Cegedim SA (C7E.F) Earnings Call Transcript & Summary

Hello, everyone. Sorry for this little delay due to technical issue. So, now we are back. I think we'll be able to start the presentation. Really sorry for this slight delay, and we'll start in a few seconds just to let everyone to come back on the webinar, on the webcast. So, Pierre could join us also. So everyone is here and still -- sorry for the inconvenience. So, now we're going to start the presentation of this first half 2025 earnings. We would like to start with the highlights of the first half and also after the closing, all the new that happened. So, as we had discussed during the first half revenue presentation we had in July, we know we have set up a workforce restructuring at the pharmacy business in France. As we had announced, it will be a redundancy of around 100 jobs. And after the closing, we received the approval of the collective agreement by the DREETS, which is the Regional and Interdepartmental Directorate for the Economy, Employment, Labor and Solidarity. It means that we have a provision of EUR 6 million in the first half, as you will see later on, and also EUR 1.4 million related to this restructuring plan. These are other costs associated with it, that you'll see in the nonrecurring income. Second, we had the news from the administrator that the In Practice asset had been sold to OneAdvanced, U.K.-based IT service provider. So it means that the administrator can start the liquidation of the subsidiary from now on. If there were to be any impact, this would happen in H1 2026. Third news, as you know, and as promised, we transferred our shares from the Cegedim Group to the Euronext Growth market on September 4. And after that, you have also the fact that the SBTi validated our decarbonization targets, which is important to us. It's also a part of our condition to transform our credit facility into a Sustainability-Linked Loan as SLL, to which the condition is mostly the compliance to the trajectory validated by the SBTi on Scope 1, 2 and 3 and also the increase in diversity in management bodies. This would -- could lead us to a margin reduction on our interest rates, as we had mentioned in the press release. Now I would like to present you to introduce you to the figure of the first half. So you know the revenue established at EUR 322.5 million on first half, a 1.1% growth reported, 2.8% like-for-like. The gap between both is mainly the exit of In Practice Systems. The performance on the revenue would stem from HR, marketing, health insurance and digitization businesses. So, second is the, what we call the adjusted operating income, which happened to be at EUR 18.5 million, a growth of EUR 8.2 million. I think it's important to precise here. that the new general accounting plan, which is the body that sets the accounting standards in France, limited the number of specific transactions in the nonrecurring operating income and expenses line. So, in order to be able to compare with our recurring operating income from last year and previous years, we created this adjusted operating income to make it comparable and to take all the exceptional items that you can see on the right side of the slide. So it means that this adjusted operating income is actually the recurring operating income we had calculated like we had last year. So it's a strong growth of EUR 8.2 million, 78% growth. Very good performance due to -- mainly to strong cost management and also a bit due to the exit of in-practice system. Later on in the presentation, we'll deep dive into the details, but strong performance. And you can see on the exceptional items, the nonrecurring items. So this is the total like we used to compute it in '24, for instance, and the years before. It's EUR 9 million compared to EUR 2.6 million last year. This EUR 9 million is mainly coming from the restructuring plan at the pharmacy business in France, as I mentioned earlier, we have a EUR 6 million provision plus EUR 1.4 million of other debt -- other -- sorry, expenses related to it. So it's EUR 7.4 million out of this EUR 9 million. The rest is due to other reorganization inside the group. The number of employees compared to last year is a slight decrease of 2.4%. So now we are 6,605 people. The difference is mainly due to the exit of in practice system. We have a slide on employees and payroll costs later on. I'll be happy to give you more detail and more insight on this. The strong operating performance translates into the operating free cash flow. On the first half, it established to EUR 56.6 million, a growth of EUR 34.4 million compared to last year. We have also -- we have some more details in the free cash flow details. As such, the growth in operating cash flow and cash flow and free cash flow results also in a decrease of the net debt, which established itself at EUR 182 million, a decrease of 15% compared to last year of EUR 32 million. Now we can have a bit more color on the P&L for the first half. So, as I mentioned earlier, the revenue grew by 1.1% reported. You can see that the good operational performance I was mentioning before is coming much from the decrease in external expenses, which is due to the policy of the group to internalize skills rather than externalized to external providers, especially at our BPO operations in insurance. So you can see this improvement of EUR 5 million. Also, as we internalize, we have been able also to maintain our payroll cost quite stable. It's only an increase of 2.7%. We also see later that we have decreased our capitalized R&D. So it means that the total payroll cost for the company is stable. It's less than this growth of 2.7%. Still, everything here results in an adjusted EBITDA of EUR 61.2 million, an increase of 17.2% or EUR 9 million, which means this adjusted EBITDA margin is 19% compared to last year, 16.4%. You can see on the line just under these other items affecting the operating income. This is the difference with last year in the accounting, which results in the recurring EBITDA. And you can see that still it's a growth of 14.2%. We have -- I've left something in French, sorry. We have amortization cost just below. And you can see it's quite stable, a slight increase of 2.1%, resulting in adjusted operating income of EUR 18.5 million compared to EUR 10.3 million last year. So this increase of EUR 8.2 million this year, which results in adjusted operating income, adjusted EBIT margin of 5.7% compared to 3.2% last year. So a strong growth in operating income. Below, you can see the nonrecurring operating income and expenses, EUR 7.4 million, which are mainly the plan -- the restructuring plan from the pharmacy business in France. All-in, the operating income is EUR 9.5 million, a growth of 22.4% compared to last year, which was at 7.7%. So it's a growth of EUR 1.8 million, sorry. Just below, you can see an increase in the financial result. This stems from the fact that the amount of debt has increased since last year as we needed to finance the acquisition of Visiodent and also a slight increase in cost of debt, which results in financial results lowering by EUR 3.3 million. On the total tax, you can see an improvement of EUR 1.9 million. This is due to the implementation of a French regime called IP Box regime. This regime allows us to reduce tax rate of 10% on profits attributable, sorry, to license income and derived from software developed in-house. So it means that we have this 10% tax instead of 25% on software we developed. So this results in a lower total tax. Bottom line, the net income group share is EUR 1.2 million compared to a bit more than EUR 0.6 million last year. So a net improvement on the profitability all in. I told you just before that we had less capitalized R&D on this first half. Part of it is due to the exit of in-practice system. So we went from EUR 28.1 million to EUR 25 million. So it's a negative impact on operating income of EUR 3.1 million. Also, the amortization of R&D grew by EUR 1.1 million on this first half. This is due to the group policy on accelerating the amortization of R&D and also to the harmonization of Visiodent to group policy, which increased a bit this amortization of R&D. All-in, this means that we had an adverse impact of EUR 4.2 million on our operating income -- adjusted operating income, meaning that without this, it would have been about EUR 22 million this year -- this first half compared to EUR 18.5 million. This is important because to see how you can see this impact that even though we had less of this positive impact from R&D, we were able through cost management to improve our operational performance. On the payroll costs, as I mentioned earlier, we were able to manage those costs to keep them quite stable. You can see that the headcount was lowered of 2.4%, so about 164 employees. And especially on the onshore side, we were able to lower the number of headcount. A big chunk of it comes from In Practice Systems. And you can see that we were able to increase the offshore employees. As I mentioned, this is the policy of the group to lower the external providers and to internalize those skills, especially in Morocco. As I mentioned also, so the headcount is at June 30, and the payroll is during the whole year. Also, as we have capitalized a bit of less R&D, the total payroll cost is quite flat. Maybe to answer your question now, the effect of the restructuring plan on pharmacy business will be seen in 2026 and is not here in these figures. So, now let's skip to the free cash flow statement. So, you can see that the good operational efficiency translates into the cash flow generated by the activity, by the operating activity. Last year, it was EUR 22.2 million. This year it's EUR 56.6 million. On this slide, you can see that the tax paid last year, please remind that on the EUR 11.6 million, there were almost EUR 11 million due to a payment due to a litigation with tax authorities. And this year, we even benefit from previous overpayments also due to this IP Box regime that I mentioned earlier. This means that we were able to generate from operating activity a strong growth in cash flow. You can see below that the intangible assets decreased from EUR 29.9 million to EUR 25.2 million. So it is a direct result from the lowering of R&D capitalization that I mentioned in previous slides. Also, intangible assets, you can see a decrease of almost EUR 3.5 million. This is due to a bit less investment in our infrastructure on this half, first half. And from last year, you can see the impact in consolidation scope, EUR 35.5 million was the integration of -- with the acquisition of Visiodent. All-in, even though -- even if we take out this acquisition of Visiodent, we improved the net cash flow generated by investment operation. We're able to lower it. And down this, you can see that on the cash flow generated by financing activities, you can see that on the others line is the expenses paid, the financial expenses paid, and also the first reimbursement of EUR 3 million on tranche A of our financing platform that we set up last year. All-in, the change in cash is a slight positive of EUR 0.6 million compared to a negative of EUR 10.5 million last year, which translates into a lower net debt compared to H1 2024, but also to full year 2024 and which is now EUR 182 million. This is the financial platform. As you can see that as you can see on the bank loan, the decrease of EUR 3 million from EUR 180 million to EUR 177 million was due to this reimbursement of EUR 3 million that happened on January 31, and that will happen every six months. Then we have here the balance sheet. Nothing special to mention about it. It's quite stable compared to last year. Now maybe now we're going to introduce you to earnings by divisions and also business units. Remember, we want -- I will tell you a bit more about the business units, but it's a new presentation we would like to introduce you to, which is more operational. But let's stick first to our division presentation that you are used to. So the first one is the Software and Services division. So you can see that there's an improvement in the adjusted operating income on this first half coming from a loss of EUR 1.4 million last year to a gain of EUR 1.9 million this year. This is due to mainly to the insurance and the HR businesses. But first, let's take a look at Cegedim Santé. On Cegedim Santé, it's very important to see that even though it's -- you can see a decrease here, the EBITDA at Cegedim Santé is stable on this first half compared to last year, even though R&D capitalization was lower by EUR 1 million. And also -- so it means that operationally, we were able to manage cost at Cegedim Santé. And the difference at the adjusted operating income is due to R&D amortization, which is now done quicker at the group. But also, as I mentioned a bit earlier, it's also due to the alignment to the group policy for which happened to be a slight burden with there, but very important to notice that Cegedim Santé had a good operating performance at the EBITDA level. On the other activities in France, I just mentioned that HR business is still growing due to this client diversification products. And insurance business also benefits from projects and the run from the 2024 projects at revenue level, but also at adjusted operating income also. And this offsets the French pharmacy performance, which was not very good due to the lower equipment sales, especially. International activities. So we have the effect of the exit of In Practice Systems on revenue, but also on the adjusted operating income, which is a good positive here. Still, it has some impact on -- we discussed that on Cegedim on the pharmacy business in the U.K. due to the decoupling of costs that they had together, so it's a slight burden for pharmacy business over there on -- starting now. And also, remember that on the revenue side, the difference was between reported and like-for-like was due to In Practice Systems. And also at the insurance business in the U.K., one of the clients had stopped its activity. So it's also a slight burden on the operating income for international activities. Still, the whole division has a positive adjusted operating income this year, I repeat it, EUR 1.9 million compared to a loss of EUR 1.4 million last year, meaning an adjusted EBIT margin of 1.3%. On the Flow division, so we have e-business and third-party payer. Remember, the growth was 7.8% on the first half. Stemming from both activities, e-business and third-party payers. You can see just a slight decrease on adjusted operating income. This mainly comes from the invoicing and purchasing segment through which we are able to get some more new clients, but we have some expenses in order to prepare to -- into force of the reform of the Dematerialization of invoices in France in 2026. Still, the adjusted EBIT margin for the Flow division is 10.7% on the first half. Data & Marketing. Data & Marketing still very good growth, as we had mentioned in July, especially coming from the marketing segment with strong sales momentum with new and existing customers. This more than translates into the growth of adjusted operating income that established at EUR 9.2 million in 2025 compared to EUR 5.3 million last year, with still a good profitability in data and a good chunk coming from the marketing due to cost control also and effective production tools and its physical sales. So, it's an adjusted EBIT margin on the first half for the Data & Marketing division of 14.6% compared to 8.9% last year. Maybe it's worth remembering that marketing last year had a very good H2 due to the Olympics. So just to be cautious on H2 on marketing, we won't have the Olympics. Still H1 is very strong. On the BPO business, so we had a growth of 8% on the insurance, mainly due to the overflow of the offering and the business services due to its attractive compliance offering. We have a slight decrease of EUR 0.4 million in EBIT on this first half. This is due to a transfer of a client from -- in HR from BPO to software solution. Last but not least, the Cloud & Support division. So we have all the support side on this one, but also we have all the sales from our cloud solutions here. And even though the growth was a bit tepid on first half due to the end of a contract in Q2, the division has been able to come back to a breakeven on the adjusted operating income, thanks to -- mainly from cost structure optimization and is able now to have a EUR 0.1 million adjusted operating income compared to a loss of EUR 1.3 million last year. This means that all the divisions, as you have seen, have reported a positive adjusted operating income on this first half. We would like to -- just to introduce you by this new breakdown that we would like -- which we believe is more operational, more in line with the operations at Cegedim with these five business units, the Health and Provident Insurance solutions, the Cegedim Business Services, Data & Marketing, Healthcare Professionals and Cloud and Support. You can see that Cloud & Support and Data and Marketing are exactly the same as the divisions that I mentioned before. On Health and Provident Insurance, you can see that we had an increase of 7% on revenue on first half. 8% at Cegedim Business Services. 6.9% Data & Marketing. And Healthcare Professional, we had a decrease of 9.5% like-for-like that we had discussed in July. Maybe the interesting part is to see the adjusted operating income by business units in the first half. You can see that at the Health and Provident insurance, the adjusted EBIT grew faster than the sales. It's also the case at CGM Business Services, Data & Marketing that you saw before and also a decrease lower than at the Healthcare and Professional. So you can see here the various margins, operating -- adjusted operating income margins for all these five business units. We believe that, that will be in the future, we still release with the divisions. But in the future, we think it's more in line, as I mentioned, with the operational -- the operations at Cegedim. So, I've talked quite a lot about the results. Just to finish on the outlook for 2025. So we stick to our -- to the outlook we had given you to -- in the previous webcast like-for-like growth in the 2% to 4% range and an increase in recurring operating income. And as I mentioned a bit earlier, we are -- of course, the operating performance has been very good in H1, and we -- it will keep on H2. But remember that H2 2024 had a very strong performance due to various factors, especially at the marketing operation due to the Olympics. I think it's important to bear in mind. Next meeting, tomorrow, we have a physical meeting in Paris. And on October 23, we will release our third quarter revenue. So, now we'll be happy to take your questions with Pierre. You know how it works. Please raise your hand if you have a question, and we'll be happy to answer it. The floor is yours.

Thanks a lot for the presentation. Congrats on the exceptional results, really great. So, the first and maybe most important one is you're on the way of cost cutting and discipline. And can we expect that in the future from you?

We will have cost cutting on the pharmacy business in France next year due to the plan we have put on now. Then for the other businesses, we have no plan today to reduce staff. We think that the unique business unit, which is loss-making, which is health care professionals, will become profitable next year, first of all, due to the plan in place for the pharmacists, but also due to the fact that we now enter into the period where we will receive secure subsidies. Those are subsidies paid from the authorities to push the health care professionals to be equipped with new software functionalities we have developed. So, we feel relatively positive on the health care professional part. The other businesses will go on growing. And of course, we will put pressure on those business units so that they manage correctly their costs, but we have no other plan of strong reductions, except the pharmacist French business.

And maybe another one. Regarding your loss of INPS and maybe some losses of clients in the pharmacy business, will that have an effect on the data business going forward?

No. We won't have any impact in the sense that we are on the way to sign a contract with EMIS, which is the main competitor and the main -- the leader of software for doctors in the U.K. So we don't foresee any negative impact of the fact that In Practice Systems is not anymore into the group. I will add something. The fact that we have stopped in systems comes from the fact that we have lost a lot of market share. So, anyhow to go on and receive data, we would have been obliged to have a contract with EMIS. So this will not change anything.

And maybe my last one regarding the Flow business, we've seen increased costs in your report you've written that's because of the new regulation regarding electronic invoices. And in this segment, I would expect that you are maybe hiring or purchasing services. Will that continue in the future? Or do you believe that your costs right now are in line? And when we see revenue increase, then we would see a return on the margin side here.

Yes. This is exactly what you say. We have costs, and we have a high level of cost due to some R&D costs, we are not -- we keep those costs into our P&L, although those are R&D costs. The problem with this business is that we are billing, the billing is depending on the number of invoices that we are managing that go through our systems. And we have signed a lot of contracts with very big and nice companies, but we see that it is very low -- slow -- sorry, it is very slow to have more and more documents to manage. This is due to the fact that the regulation has been delayed. And now it is September '26. And so we feel that during the first months of '26, we will see much more volume than we see now. So we should have an increase into the revenue. The problem is that there might be a risk that once again, regulation will be delayed maybe by 2027. So, this is unfortunately possible. So, on the midterm, we feel very comfortable with this business. Today, it is loss-making because the costs to start all those contracts are heavy compared to the fact that we are not managing a lot of documents.

Are there other questions? I think we have written question on cash EBITDA and free cash flow from Jonas. Cash CapEx. So how should investors think about normalized cash EBITDA, meaning EBITDA minus CapEx going forward and both for H2 and over. So you can see the EBITDA was growing, and we believe CapEx was a bit lower on this first half. However, we still have some CapEx in the rest of the year and in 2026. So we believe the CapEx will be stable. And as a percent of revenue, we were about 13% this year. So it should be something around this also. So, I believe the cash EBITDA should increase as a result. And what was the second point? On the EUR 13 million CapEx in H1, how much was maintenance versus growth? And what is the sustainable CapEx level as a percent of revenue? So, as a percent of revenue, so we were 13% last year. We'll be around the same this year. And we hope in a couple of years from now to be able to lower this part of CapEx. Do we provide a target on the cash EBITDA margin or free cash flow margin? I don't think so. Even though, as we mentioned earlier, we are committed in improving the free cash flow. So, but we haven't given a target for the moment. I don't know if you want to elaborate on this, Pierre.

Yes. On the question two, we don't compute the maintenance versus growth CapEx. But most of CapEx is R&D cost -- R&D capitalization, sorry. We can say that this is for the growth. And we have -- we are investing into a lot into two area. We are buying screens to equip the pharmacists. This is for the C-MEDIA for the marketing part. And this is -- part of it is for C-MEDIA España because we are launching the business in Spain. So this is for growth. The other part is that we are building a new data center in Magny-les-Hameaux, France. So, in this new data center, we will transfer part of the existing data center. So maybe part of it could be of -- could be considered as maintenance. But the new data center is -- the purpose of it is to push the business of cloud, Cegedim cloud. So, I would say that a very big part of those EUR 38 million is dedicated for growth. although we are not computing it very precisely. So, the sales price from in practice system is very difficult to know because the administrator has to liquidate the company. But we may receive something between EUR 1 million or EUR 2 million. That's what we estimate what will remain from the liquidation of the company. It will be exceptional profits. Yes.

I think Mark, you wanted to ask a question. The floor is yours.

Just I wonder whether I could -- a couple of questions. But firstly, could you just remind us how the reorganization of the Healthcare Professional business is going, how the product has -- is evolving when the new product became available or will become available and how you're transferring the service on that product out to Morocco? And just help us give a bit more color in terms of how it's going to improve. And Mr. Marucchi, you already said it's going to push the company to profitability next year. But can we just get a bit more sort of feel for what's happening on the timing on it, et cetera? Is it a very rapid change? That would be great. And secondly, I wonder if you can tell us a little bit more about the vehicle that has been channeling management purchase of shares, how that's been going? And thirdly, I'd love to hear Mr. Marucchi's view on the switch to Euronext Growth. I can understand that it's a market with less constraints, but has got a lower reputation as well. I'd love to hear his view on that.

So, speaking about the products in the Healthcare Professional business units. We have two products fast growing, two new products fast growing, the one for nurses and pédiatre, and the one for physiotherapists via KINÉ. We have just launched the new product for doctors Maiia Médecin. So, we are losing -- globally, we are still losing doctors. Why? Because a lot of our clients are equipped with old solutions and a lot of our clients are going for retirement. Since we have launched the new product, which is very competitive to the Doctolib product to say. But we have just launched it. We don't see today the number of clients growing, but we are very confident with that. Then we have the pharmacist product. This is a very new product. This is the unique product in France, which is dedicated to young people. It's a very modern interface. And when we show it to clients, they are very fond of it. Problem is that until 1st of September, this product was not stabilized. So it was not really possible to push for sales. We are just starting now to invest into commercial actions to push these new products. Then we have Visiodent. Visiodent has a product which is very well dedicated to groups, but it is not dedicated to individuals, dentists. So, we are working on Maiia Dentist, so that we will be able by next year, mid next year to launch a product more dedicated for private dentist. So as you can see, half of the products are really well performing. Half of the other products are on the way to become performance, but we are still having a lot of clients working on our old solutions. That's the reason why we don't see this year a fast-growing business on this part.

I wonder whether you can help us understand, so the 100 staff that you're letting off, can you just remind us where they are and by when they will have gone and how you're transferring over the service side to Morocco and how much that will save, et cetera?

No, no. We don't transfer to Morocco on this part. Morocco is really dedicated for the insurance businesses and for the HR business. But the people we had, I would say, we had too many people on the maintenance part, maintenance for computers. Since the pharmacists are acquiring less and less computers, one of the reason is that two years ago, they made a lot of investments because they needed to receive the new softwares to be secure compliant. So, today, we see a really very strong decrease into the material into the hardware businesses. And then we have too many people managing the equipment of the pharmacists into 24 areas in France, having a small team of two to three people, and they had not a lot of things to do. So that's -- those are the people who are quitting the company. Then the next question was about the new market. So, in fact, we took this decision more for -- because it will save costs for us. It will save cost because it is less -- it is more less -- there are less constraints. For instance, for the accounts at the end of the first half, we do not need any more to have them audited. So there are some very interesting advantages in the fact that this is -- the regulation of this market is not so heavy than the one we had in Euronext. That's the unique reason. We will go on providing the same information as before. We will not reduce our publication, but we will have less costs linked to that. Have I answered to your questions?

Yes. No, that's very clear. It's reassuring to hear you saying that as some people think when you move to a junior market, it's a first step to exiting the market.

No, no, no. No exit. The family, the Labrune family buys some shares regularly, but it is really because everybody thinks it's the share price is so low that it's a good operation to buy some shares, but there is no project of quitting the market.

So that leads to my third question, which was linked to the management, the vehicle that's buying shares that the management are shareholders of.

Yes. Today, for the past four weeks, there has been no acquisitions because we were in the quiet period. But probably it will start again. This is not -- I think that during -- for the first -- since the beginning of this year, I don't know, Damien, you have the amount of acquisition the family has...

On the full year basis, it was about EUR 5 million from March last year. Especially on 2025, we don't have the figures, but it's something around EUR 5 million during the whole year.

So, today, the family, the holding family holding owns 54%.

A bit more, 55% to 56%, yes.

Okay. So, there is no target, but it will never grow, up to 60%. It's just a way for the family to invest.

Are there other questions? Oh, yes, [indiscernible]

Thank you so much for the presentation. Actually, I have two quick questions. The first one is, if I'm not mistaken, you said that you will continue cost cutting in the pharmacy segment with staff reduction in France. So do you see the same one-offs in H2 as in H1 and maybe also in 2026? And for the second question, should the tax rate remain at 10% in the coming years also?

So, the tax rate at 10%, it is only on the part of our businesses. This is only on the software and license businesses. So it's reduction you see it's only on 5% to 6% of our business. This reduction of the tax rate. It is not on the whole group.

And for the whole group, you have a tax rate of?

25%. On the pharmacy business, the plan has been fixed. It has been signed. So we know exactly who will quit the company. The departure will be during the second half of this year and the first half of next year. And this is it. So we have made a provision of EUR 6 million. But then we will not have any strong extra costs on this plan, and we will see progressively staff being decreased. When it will be done, let's say, end of March next year, then the level of savings for 100 people with that level of salaries of wages, it will be something like EUR 4 million to EUR 5 million per year compared to the existing cost today. So, we won't see a strong decrease of staff costs in the second half. Those people will leave more at the end of the second half. This is due to the regulation in those plan in France. There are some hey, I don't know how we say in English. But then we will see savings next year.

So, we have some questions written somewhere about the products at Maiia. I think you answered most of it. We had some questions on the concrete steps from the family to restore the confidence. So, the family is aware that the confidence has been a bit deteriorated with the operational performance. And the group believes that by restoring operational performance and cash flow generation, we should be able to restore the investor confidence. And no, for the moment, the management doesn't consider any divest or spin-off of businesses or noncore assets as we believe that it also benefits the group as diversification due to diversification. And no, the family is not considering the option of taking Cegedim private for the moment it's really not an option. There was a question also on how is the influence of AI currently assessed and if it's a threat due to new competitors. So, we are, of course, very interested by AI that we want to integrate in our products and also help in the coding of the softwares. We have a committee, which is dedicated to AI in order to select the best ways to develop AI so as to really focus on interesting options for AI in our products. We have AI in Maiia Médecin that Pierre mentioned earlier that helps the doctor to summarize its interview with the patient, and we have more features to come also. So, of course, AI is a big topic in such an industry, but we are really taking it into account and gain from it in our products and also in the way we develop the products.

We have roughly 50 projects that we are following. And when I say we are following Jean-Claude Labrune and myself, we are following those projects. Some of the projects are really very innovative.

Innovative.

Yes. And maybe never will come to an end, but some of the projects are really able to be integrated into our products. And part of the projects are more dedicated to the improvement of the efficiency of our BPO people to manage, for instance, the relationships with the patients to answer questions to the patients. And also, we have projects dedicated to improve the efficiency of developers. This will have an impact on the type of developers we are going -- we are hiring now. We have seen that is very efficient, but we need to have high skilled people to use it. So there will be some transformation and the fact that I would say, young developers with no experiences, we will not need any more a lot of those people, but we will need a few very high skilled people to be able to use those techniques. So this is followed at the highest level in the company because we strongly believe in the fact that it will bring to us a very positive future.

Mark, maybe you had another question. I can see you have a hand raised.

Yes. Just a question on better understanding the seasonality of your profitability. I think history shows that you've always generated most of profits in the second half of the year. In the light of the improvement of profitability in the first half, at least at the adjusted EBIT level, can you help us understand how that works for the full year? Because your guidance is just sort of pointing to an improvement in profits for the full year. So, you've had a significant EBIT improvement in the first half and compensated by negative extraordinary items. But can you just help us understand how we should understand now in September, the guidance for improved profitability in the light of near doubling in EBIT profitability in the first half?

So, last year, we made EUR 10 million EBIT.

Current. Current operating income, yes.

In the first half, and we made almost EUR 30 million in second half. Okay. So we may be at that kind of level this year. But we are a bit cautious because last year July and August were extremely positive mainly for the marketing business due to the Olympic Games, and we know that we will not have this year. So, I would say that we would be very happy to be between, let's say, EUR 25 million and EUR 30 million EBIT current in the second half, meaning that we could end the year between EUR 45 million and EUR 50 million current EBIT.

We had a written question.

Remember something, sorry. Remember the fact that we are not having what we had in the past. We are not having a very positive impact of the difference between capitalization of R&D and amortization of R&D. Now we are almost equal. The amortization is not far from capitalization. So this has an impact. Somehow, it has no impact on the cash. And you have seen that on the first half, we had a very -- although we think it's not enough. We have a good improvement into cash generation. But the fact that we are not capitalizing as much as before and that we are amortizing more than before, it may have a negative impact on the current EBIT. Nevertheless, I think that between 45% and 50% is a good target.

We had a written question asking whether we have a net debt target and whether buybacks could be an option once profitability restored. So, we are, of course, dedicated to reducing the net debt by generating cash. This is really something the management is committed to. We haven't provided a target yet. And regarding buybacks, that could be an option that could be an option in the future. I don't know if you want to elaborate, Pierre, on net debt.

Today, we are applying the plan with the banks. So we are repaying EUR 6 million per year. We'll see if someday we think that we have too much extra cash, maybe we could negotiate with the banks to reduce the debt. But this is not a target today. The target is to generate cash and is to reduce the debt, the repayment we have no plan.

Are there any other questions? I think we have talked about lots of things, but still, if you would like, please raise the hand. Well, I believe that we -- there are no more questions now. So, I think we're going to end this webcast. And thank you for attending it and for your questions. And whether there would be some more questions in the future, please contact us, contact me, especially, so that I will be able to answer it. And thank you, Jonas. And so thank you, everyone. Thank you for attending. And the next webcast we have together will be on October 23 for the third quarter revenue webcast. Thank you very much. Bye, bye.

Bye, bye.

Bye. Thank you.