CompuGroup Medical SE & Co. KGaA (COP) Earnings Call Transcript & Summary

Competition. Okay. Okay. Okay. That again depends on the products, but we see levels of up to 20%.

Great. So is there any other question in the room? It looks like everyone is looking forward to having some lunch. Okay. Then we close the Q&A for the first session. Thanks, everyone, for the vivid discussion also to those of you who are following on the webcast. We're now going into the lunch break. For the webcast participants, we are planning to resume presentations at 3:00, German time or 2:00 U.K. time. And we're very much looking forward to seeing you back then. And for everyone in the room, we've got 1 hour plan for lunch now. All the speakers will be available for lunch. Lunch is taking upstairs -- taking place upstairs. After the lunch break, we have prepared some breakout sessions for you. And for the breakout sessions, I don't know whether you noticed you all on your name tags, you have a little number. So those of you who have the #1, they will be with Stefan Herkommer, our Head of Treasury, and the ones who have the #2 will be with Frederic and the ones who have the #3 will be with me, obviously. And we will gather you at 2:00 after lunch up there, and then we will take you through the 3 breakout sessions, which we have on the topics of [ Emdogain ]. [Break]

Hello again. Welcome back to the second session of today's Capital Markets Day at CompuGroup Medical. I hope you had a nice lunch break. Also welcome back to those of you on the webcast, hello. Let me remind you once again that the entire event is video webcast live on the Internet and will be available for replay going forward, including the questions you may decide to ask. Let me point to the disclaimer once again. For those of you who joined just now the second session, please note the safe harbor statement that applies to all the presentations and please take note, especially with regard to forward-looking statements. And with that, we go into the agenda for the afternoon. This afternoon, it's all about the ambulatory business. We will start with Ulrich Thomé speaking for the DACH region, connectivity; and CLICKDOC, Emanuele Mugnani for European ambulatory business and for the pharmacy business; and then Derek Pickell for the U.S. ambulatory business. Again, this will be followed by a question-and-answer session for all those 3 speakers, and Michael will be on stage as well. So please save any questions you have for the Q&A for all 3 speakers. And again, if you have questions out there following the webcast, please continue e-mailing those to Frederic and myself, work really good the first round, and we enjoyed the vivid discussion. And with that, let's jump into the first presentation, and I hand over to Ulrich Thomé. Ulrich, the floor is yours.

Thank you very much. Thanks for having me. Ladies and gentlemen, I'm starting with the disclaimer. This is week #5 for me at CompuGroup. And there is a certain likelihood that some of you are deeper in the numbers and figures than I am, but I will catch up quite fast. So looking forward to questions, but I don't know whether I will be later on able to answer everything here. And I am, however, not at all new to the German healthcare sector. I was holding various positions in the last 16 years working mainly in the administrative and billing area for various companies. It was always the triangle of doctors, patients and then insurance companies and basically the whole system that is around. And in the last 2.5 years, I was responsible for strategy at the biggest European online pharmacy and not only strategy but also the development of digital products that face towards the customer. So I guess in healthcare, I know quite something. Let me start with something I have witnessed 40 months ago in Berlin. I attended a conference with a couple of hundred physicians, politics and healthcare professionals. And Dave deBronkart gave a speech note there. I don't know -- a keynote speech. I don't know whether you know him. I would say he is one of the most famous patients we've got on this world. He got a cancer diagnosis, kidney cancer spread to the lung. His doctor told him your median lifetime will be 24 weeks. And imagine you get that kind of diagnosis that was back in 2007. And he said one sentence that really struck me, and that is patient is not a third person word. Your time will come. So I completely understand that your perspective here is a professional perspective and all what we talk about, you see from your professional angle. But at some day, all of this might become very personal to every person here in the room. I hope this is far away in the future, but that's life. That moment is going to come. And at CGM, we support healthcare professionals for that very moment. And if you look for purpose in a job, there it is. To me, as something I have witnessed in the first 5 weeks working here, that might be the reason why we've got such a hard-working team. And I'm not only talking about those guys sitting here, but I'm talking about team leaders and everybody else at CGM. I've seen quite some companies in the past, but this is really a hard-working team, and I enjoy very much being part of this team. Now let's have a look at what day-to-day life in the doctor practice is like. Basically, it's a permanent rush of patients coming in flow. Imagine you've got patients every 8 minutes. Every 8 minutes, a physician sees a new patient. Imagine you have any kind of service in every 8 minutes, a new customer sitting in front of you. You have to get to know him. You have to have -- make a diagnosis. You have to look up what has been in the past and the records, and you have to decide what do I do with that patient. And that's basically feeling the whole day. And you have to rely heavily on your knowledge, on the one hand. On the other hand, medical knowledge is really exploding there. And to give the patient the best treatment, it's a question of whether physicians are able to grab that knowledge and really bring it into action. That is something that you can see basically in every practice in Europe, especially in Germany and the DACH area. A good news also with the [indiscernible] gives is that we live in one of the best health care systems on this earth. I've -- I hardly meet anybody that is questioning that fact. And some of the reasons might be that we've got a very high number of interactions between patients and doctors. It's in Germany, 1.2 billion per year. That's an amazing amount, really a lot. Of course, demographics don't stop doctors and physicians and their practices. With more and more female doctors coming, and with more and more changing how young people think about how they want to work in the future and whether they want to take the risk and buy in practice or step in or be an employee doctor, that is changing and that comes down to a concentration that we see at health care service providers. It is, of course, a highly regulated environment. I, for myself, see that more as protectional tailwind if you are able to manage it. And I guess -- and I know we are very good at managing this here at CGM. Technological process is something we have to deal with. We can use that for the better of the services and products we deliver and also for everything the patient -- the doctor can do with his patients. And then in the end, and that's especially my sales heart, I'm more on the offense team. What I have to say is our customers are special. It's not the B2C customer where it's about ranking an app high in an app shop. And it's also not a big company that has a big IT department. It's small companies, enterprises where you have to install technology in a certain way. And that is something we witness every day and we have to cope with that and being good at that really makes success and the difference. Now the ecosystem we are dealing with, and we are servicing is really huge. It's not only physicians or dentists and the patient. It's also hospitals. It's laboratories, it's pharmacies, it's pharma companies. It's doctors associations, it's Kassenärztliche Vereinigung, It's gematik, it's BMG, it's BSI, it's BFDI. We have to deal with all of that. And all of that is really intertwined. So you need to understand this to provide a good service, and we are servicing tens of thousands of practices here, and we are really good at it. Now what is the product portfolio we provide? And I'm going to step into this in the following minutes. In the core of it, they are the ambulatory information systems we have here. Surrounded by Telematik Infrastructure, which basically serves for sending information from -- and data from 1 service provider to another. And then it's, of course, the patient perspective with CLICKDOC and m.Doc and I'll get to that in a minute. Starting with the core of it. You see here 5 brands that are our Ambulatory Information Systems. And 2 of those, which are Medistar and TURBOMED are basically the flagship systems here. They have some 20,000 installations. You will hardly find any doctor in Germany who doesn't know those 2. No matter whether they use it is or not, but go into a practice ask them, they will know those systems. All in all, we have a pretty good market share here. And basically, the whole practice is organized by that system. So incoming patients, scheduling, planning the resources for the team, the administrative work in the practice, documenting, what you find as a diagnosis, preparing billing information, all that is done by our Ambulatory Information Systems. And basically, it's the core and backbone of every practice we have. Now stepping more towards the patient side. The question is if you have the backbone in the Ambulatory Information System on the one hand, why not use it to also help the exchange of data between patients and between the practices. And as I see it, that is something that is -- that really needs to be seen from a transactional point. So when I look to doctor appointments, it's 1.2 billion appointments per year. As I said, imagine those appointments have to be made in the practice. You have to pick up the phone, you have to call the practice. Can I come at this time? Or you can do it digitally. Or you can take e-prescriptions and how that is managed. And that is some 520 million per year in Germany. And also, that process at the moment is highly manually and CLICKDOC also helps there to digitize it. So just a short reminder of how the process is -- looks in the practice because that's not clear to everybody. Doctor has the diagnosis, checks the medication, puts it in the AIS, paper in the printer, printing it, signing it or sending it to the front office, sending the patient to the front office. There he gets the prescription. Patient takes the prescription, goes to the first pharmacy. 20% of the medications you see in this country are not in the pharmacy in the first moment. So patient then sees it gets the medication or needs to go to another pharmacy. Pharmacist takes the paper, print something on it, makes the stamps on it, signs it, gives it to the patient, off you go. Take into consideration that those persons that do this are highly trained and educated, and we would need everybody of those guys working on patients and making and improving the health and not working in administrative stuff. So that is the purpose I'm talking about, and those processes can be fostered by our system. Switching to the broader picture and even more holistic view brings me to the Telematik Infrastructure. We have been the first mover in the Telematik Infrastructure. And basically, that's the general enabling of any information that is sent from one doctor to another, from one hospital to another. And basically, that is the start of every patient journey that we have in the statutory insured business in Germany today. We meet highest standards there, and we provide price security. And right now, while we do it, we are in a consortium with industry and research to discuss how TE 2.0 is going to be from 2025 onwards. And that consortium is based on a zero-trust architecture, and we are defining with others in those consortium, what is the future in health care and the service we provide look like, and we want to be part of this. And that's also something where you can see how regulation needs to be used for a company as we are. I brought some numbers from the gematik there, and I have to admit some of those numbers are impressive. And some of those numbers show an impressive headroom. When you look, for example, at the sick notes, in general, sick notes, you've got 135 million so far. They are considered to be quite a success when digitizing health care in Germany because as some of you might know, employers nowadays just get it digital, and that made the whole process digital. When you look to e-prescriptions, it's 3 million here until now. I would say in the whole time frame where -- that was counted. We can say that the whole mass of e-prescriptions was something around 850 million. So the percentage is still low, but that is going to increase in the years to come. And starting next year, we will see how that turns out. it's quite an effort, and we will have our share in that. And of course, because that is the case, we have equipped our customers with the modules they need for communication and also for eRX and eHealth records. When we look to the numbers that we find in Telematik Infrastructure and especially at the recurring revenues and the share we have there that really went up. In the beginning, it was at around 10%. And you looking from a capital market perspective, have witnessed in the past that we had more often onetime revenues. Now while we like revenues on the one hand, onetime revenues are some sometimes hard to predict because they are subject to delays, on the one hand. And on the other hand, it's not so easy to always do it in an operational good style because you have to deliver the services and the products to the practice for those -- to the practices for those one-timers. And that also brings one in a certain situation. The Ministry of Health has introduced TI flat rate within this year, and that will bring up the amount of recurring revenue or the share of recurring revenue to 60% for TI in the second half of '23. And by 2025, we plan that the share of recurring revenues will be 70% or above. And that also gives a high resilience to our company from a financial standpoint. So getting back to the whole picture that we have here, This is not only about strengths and numbers. As I see it, this is also about us being the only vendor that has really all software and hardware in place to be in the whole end-to-end patient journey and to support doctors and patients in that journey. You won't find anybody in this country that stands as broad as we do. And patients and doctors will benefit from this in the future. Finally, artificial intelligence. You have heard some things about artificial intelligence today. For me, it's not a question whether doctors and also patients will benefit from it. For me, it's more a question who is going to deliver. Because then again, we, as a big company, can use artificial intelligence quite easily for our own purposes, but the single practices being as small as it is. And having that as a subject that is not close to them, that is a bit more difficult. And I see us here in a pole position for certain things that we can give the practice to use it effectively. First point is advancing usability of our software. That is basically a no-brainer. No need to talk any longer about this. The second thing is, especially in radiology or anything that has images and image analytics in it, artificial intelligence will be of great help. Also in the support -- also in the decision support, artificial intelligence will play a big role. And there, the question for us will be how can -- and you have seen some examples of this from my colleagues before. How can we enable doctors in the practice in day-to-day life to use artificial intelligence when they are in those 8 minutes to decide what to do with the patient and what not. And then last point that is close to our very heart. That is the whole administrative and billing topic. It is quite an effort for today's practices to do the billing there and all the administrative work to do the documentation. And we can be sure that their artificial intelligence can be used to make the positions of doctors and practices even better. So what are the takeaways here? Basically, as I see it, it's a unique position we have, second to none. Second, it's a fantastic customer base we can rely on. It's a highly resilience we have with our recurring revenues, and it's a regulated environment that is, to us, more protection and tailwinds than anything else. And of course, digitization, connectivity and artificial intelligence, those are the main topics and the main drivers for the future. And we think that it's us to enable those things and to use it for the better development in the future. Thank you very much. And with that, I may hand over to Emanuele to give the European perspective and the perspective on the pharmacy.

Thank you, Ulrich. Good afternoon to the guests those who are here with us Koblenz in our headquarters and also to the ones that are connected remotely. I'm in the company since 10 years. So I [indiscernible] part of the growth we had in this year with different roles and I am the Managing Director of the Ambulatory and Pharmacy Information System in Europe since about a couple of years. This includes all the business we do with doctor, paramedics, nurses, therapists around all the European country out of the German-speaking country. So out of the -- fully responsibility in the area. And I have the responsibility of the pharmacy business and on the dental business all over Europe, so including Germany. Some numbers of the last 12 months we met here 12 months ago, the AIS business, the full AIS business, not only the one out of Germany and Austria grew 2% in the first part of this year. Pharmacy business had great results for different reasons and our grow in the first part of this year compared with last year was 8%, and we have a very strong recurring base. Because we have 74% of our revenue that is recurring. This gives us a base to build on future growth, but be quite sure of a big part of the revenue and have the possibility to focus on new value for the customers and new revenue for us. We also went through last 12 months a very big transformation in AIS and Pharmacy Europe. I will dedicate some time to this transformation, not only to explain you how we are evolving, but also because this is a transformation that allows us to create marginality. The revenue per employee increased 15% in AIS in the last 12 months, and the revenue per employee increased 5% in pharmacy. And let me underline, this is because we are counting the last 12 months. And the transformation in pharmacies that I will explain later, actually started end of '22. But from the moment, we created a transformation in both area, the revenue per employee increased 15%, and this is clearly an impact on our marginality. We have a strong position around Europe. You have already seen this number in the Michael presentation, but let me focus on the area out of Germany. We are the leader in each of these markets. And in many of these markets, we are present in different area. Nobody has this positioning in our space around Europe. This allow us to leverage on synergies we can create across country. And this allow us to follow in different countries, the end-to-end patient journey. And we will go more in detail in the next slides to explain exactly what we are doing. We have a unique product offering. On one side, in each of the markets you have just seen, we usually have the leader, most complete legacy system. But innovation is a key success factor in our market. And we work a lot to bring innovation to our customers in last years. And we are now more in the moment in which we say, okay, we are investing and innovation will arrive. We delivered in the last 12 months, the 3 products you see in this slide. And these are not tiny little modules. CGM STELLA is a completely new product for pharmacy that is going to substitute our core products in all our markets in different years. As we released in Italy, we already have almost 400 customers parapharmacy working on this and will be released during 2024 completely in Germany and for pharmacy in Italy. CGM STUDIO is our new -- sorry, STELLA is a completely new cloud -- completely cloud product as CGM STUDIO. CGM STUDIO is the commercial brand of our new third-generation product for doctors that we will roll out around Europe. This is live in Italy. This has almost also, in that case, 400 doctors using that a complete cloud solution, and we are already in an advanced phase in the project in France and will be released in France during 2024. CGM XDENT is the new completely cloud and completely integrated with CLICKDOC product based on the same technology of CLICKDOC that we released for dentists, same strategy. We will leverage on the synergies across country. This will be 1 product for the dental market around Europe. And we launched that in Germany, we are in pilot phase. And as I said before, we have a strong recurring revenue base. And we have product, 4 different areas. We have product for pharma -- for pharmacy, for nurses, for therapists, for doctors and so on. And this allows us to be the key player on the interoperability across the different markets. But also we have complete product. We don't have only the AIS and the core system. We are, as mentioned by Hannes this morning, the single point of contact for everything that is around IT, for the little entrepreneur that are the doctors, the pharmacy, the nurses around Europe. And this is a huge value because they want a unique point of contact. They don't have a structured IT department that can manage different supplier. They are doctors, they are pharmacist, deal with IT is not their core business. They want 1 contact, and we are the unique player that can provide that. We are around Europe very well in the best market in which we can be. There is increase in spending. In a no market we are in a trend of digitalization as the health care market. There are a lot of very little vertical solutions that are entering the market, and this player cannot enter the market alone. These players look for partnerships. And we are in each of the country that I mentioned, the preferred partner for this little local solution that we integrate and we bring to the market, being the cornerstone of this environment. Which are the main drivers of our grow in the environment that I just described. There are a lot. I will focus on the 5 main drivers in my opinion, that is sustaining our growth in last month and will sustain our growth in next months. The regulatory initiatives are a key drivers. They continue to sustain the grow and they continue to be activated by country in different ways. There is a deep transformation of our European organization, and this allowed us to be more efficient. For each of this topic, I will go more in detail in next slide. We are delivering marketing innovative product, not only the core product that I explained a few minutes ago, but also we delivered on the market artificial intelligence solution. And I will give you 2 examples to be more concrete on what has been described this morning by Michael. We want to follow the patient journey end-to-end. And as I said before, there are no players that can follow the patient across all the health scale players. And I will give you a couple of examples in detail how we are doing that in some of the countries. And we are not only a provider of solution for each single health care player. But through our positioning in different countries, we are the enabler of the national ecosystem. We are in strong contact with the national government, and we drive the change. About the regular initiative speaking around Europe, the most important one is Ségur la Santé in France. For us, and for, in general, the French health care system has been a revolution. And for us, has been a huge project to deliver completely new product completely certified for the Segur la Sante projects with new functionality and we completely new way of connection with the national health care system. Was 1 year of product, 16 certification only for CompuGroup to cover 660 requirements. We have been the first company to be certified with all our products. The last product certified by CompuGroup was certified before the first product of any other competitor. And we have been the first provider to -- in deliver and install and train all our customers on the new solution in the French market. Why this is important? For 2 reasons. Programs like that are starting in all the countries around Europe. And these are all financed by the country. And this is a strong continuous growth lever for us. And these are programs that have waves. Waves in terms of innovation and new functionality, waves in terms of other health care providers that enter in the program. And this already in deep definition, the next wave that will arrive between '24 and '25 that will have a second wave for the doctor about the same complexity of delivery and the first wave for paramedics and nurses. And we are strong with thousands and thousands of customers in each of these markets. I spoke about the transformation. And I believe this is a great value for our company. I want to spend some minutes on that. We went between end of '22 and the first 6 months of '23 through the wider reorganization, I believe, in the history of our company, for sure, on the 10 years in which I'm here. We created all around Europe, excluding Germany and Austria, a unique product house, 1 organization under 1 manager, under 1 VP Product Management that design our product with 1 head, putting together development team, and this allow us, first of all, to have better dedicated managers. We had before senior manager that had to follow the product side and the market side. But the capability and the skills of these managers are different. Second, this allows us to have a unique and consistent strategy. Third, this allowing us to take the synergies we can have not only creating one European product for the market, but also not doing multiple times the same things in different products. And we created a side of the product organization country-focused organization. Everything was launched at beginning of '22 for pharmacy, 1st of January 2023 for Doctors and Dental. In first 6 months of 2023, we not only increased the revenue for employee creating synergies. But also, we focused on the customer satisfaction. We increased the NPS of 20 points in 6 months. Having more focused organization in the country. The third lever I mentioned is how we work on the product. We are not only simply launching products of new generation. We are cautiously working on the streamlining of our portfolio. We switched off with no impact for the market and on the customer base, 5 core products in the last 6 months, 1 in France, 2 in Belgium, 2 in Netherlands. Migrating our customers to more modern products, allowing them to have a better experience and allowing us to save cost because maintaining multiple products in a country, being our market strongly influenced by the continued change in the regulation is a huge saving for us. We work on the innovation. I explained it before the new product we launched, but we also launched new models. We launched end of '22 a completely new billing system in France. Before each of our AIS system had embedded inside the own billing rules. We switched off this. We launched a new billing system that is supporting all our legacy system. So we have to maintain only 1 billing system. This is much better, so the experience of the customer is much better. And this is designing and implemented exactly on the technology of our G3 system that when will be launched, as I said before, end of '24, will immediately connect on our new billing system. And we integrated, I will go more in detail on that to artificial intelligence solution in our France markets. And we launched a new generation product, but I already explained that. Let me explain a little bit better the 2 artificial intelligence solutions that are on the market today. One year is Synapse copilot. This is a solution based on natural language processing algorithm that allow health care professional to save time and improve their operations. This system suggests prescription, personalized and secure interacting with the doctors. This is very important. The doctors take the final decision. The doctor can interact with the system, change parameter, have different advice and it's the doctors that define the prescription. But this is a huge value when the doctor have to prescribe something that is not the typical things you see every day. Connected to the prescription, there are medical recommendation, there is therapeutic monitoring, there is a full tracking of all the documents and the system based on the behavior of each single doctor create daily scientifical report for the doctor to stay informed on the things on which he works. And the system learn from the experience on what's happening on all the doctors using that. This is fully completely integrated in our 2 core AIS system in France. There is a seamless experience by the doctor, they don't have any view on the fact that is using a separate model. It's completely in the flow of his prescription process. The second one is SmartPredict. This is an application that assist the health care provider to measure the warning sign of fall of old people. This takes the data for each patient from the clinical record of the patient, the strength, the robustness, measure that the doctor do when you visit the patient and put that together with the data they collect from sensor. The old person is simply a [indiscernible], nothing invasive. There are sensors in the house that check the behavior of the person and detect putting everything together the risk of fall, even of elderly people that never falled. Elder people are representing a growing part and an important cost of the health care system. And usually, when an old people fall, enter in a much more severe situation. By the way, this is not only to provide to our customer, to the citizen better experience, but it's also for us a strong grow forecasting next year, because why we started in France? Because preventive action are financed at national level with a clear low. How we enable the ecosystem? It's true that we are used to speak about our core businesses, the doctors, the hospitals, the pharmacy. But if we want to enable the ecosystem, in particular in area, again, I do a France example where the e-healthcare space is changing. It's changing through poly-ambulatory that does not have only doctors. So we need to provide to this poly-ambulatory integrated solution that cover all the kind of scale player. And again, there are no other players in the market that are all focused on 1 sector. We are the #1 player, not only in doctors market because we are the #1 in doctors in France, but also in Paramedics. More than 50,000 paramedics use our solution in France. A few words on CLICKDOC. It's a cornerstone of our strategy. What's new? First of all, in my opinion, it's new at functionality. At system level, we reached the level where we wanted to be. We are exactly at the same level of the pure play competitors, but with the advantage of being completely integrated in the system of the healthcare player. We have in France more than 330,000 customers using -- patient using CLICKDOC. We started selling and delivering CLICKDOC from the paramedics, and we already have 2,500 paramedics using CLICKDOC in France, and we started the campaign on doctors in July. Why we started only in July? Because this system has to be completely integrated with the experience of doctor. And we knew Ségur is arriving. So we focused on the delivery of Ségur on bringing the doctors to a normal user to Ségur, and we released in July a solution completely integrated in the new Ségur experience. And now we are starting the commercial phase for the doctor. But even if we really have now very few doctors, 100 is very few. And we are focused on paramedics. In this moment, we have more than 70,000 booking every month through our CLICKDOC solution only in France. I spoke about Patient journey. I would like to explain you a little bit better what we do in Denmark. Last year, for the ones that were here, I made the same for Italy. Why? Not only to explain you the value that we can bring to the market, but also the experience we have in managing this workflow, in countries that, in some cases, are a little bit more advanced than our core countries in the digitalization of the processes. We completely manage to app and portal developed by us, the contact between patient and doctors. In Denmark, we have more than 3.8 million of citizen in countries that have less than 10 million of inhabitants, registered and used our app and our portal. There is a strong usage, much more in average in another country of video consultation. We know how to manage it. Only in 2022, we had more than 5 million of teleconsultation inside our system with the doctors that use our AIS and video consultation system. We managed inside our system and [ in the ] flow more than EUR 40 million of prescriptions last year. In Denmark, again, interoperability and exchange between healthcare players. There is a clear referral model for the specialist -- between specialists and hospitals and especially to receive money based on the referrals. In the last 12 months, we managed inside our system more than 1.7 million of referral. And we follow the same patient across this flow. And we also have a solution that manage the therapeutical advance, where we have 180,000 patients daily using that. Just to remind you, and we are not doing that for a little part of the country. We are by far the leader in the Nordic countries. We are the #1 in doctors. We are the #1 in therapists. We have the experience to be the player that follow together the patient and a health care player in 1 process. We are very good. We have revenue and growth. And also thanks to the new organization, we put together people that added experience to do that in 1 country, and we are now using that experience to replicate exactly the same solution in other countries. I will not go to again the patient journey in Italy. But this is another good example to explain how our experience can be reused and how our presence is huge. We are by far the leader in the market of pharmacy in Italy. We have more than 50% of the pharmacy using our software, the core software to sell and to many stocks and orders. But we don't do only that. We have in Italy, a company that only provide telemedicine solution. And the pharmacy of service is one of the trend. The main customer for the telemedicine solution in Italy for us are pharmacy that then provides that to the pharmacy of services, that is the evolution of the pharmacy to their customer. And we provide logistic services. Pharma is a company completely honored by CompuGroup that provide drug deliveries from the pharmacy to the patient. Manage the orders, including the prescriptions and manage the delivery. We provide full services to the pharmacy. We contract the logistic providers. We help the pharmacy to be a player that can beat the online pharmacy. We manage in our application 25,000 delivery every month, from the pharmacy to a citizen. This is based on our core system. And on top of that, we are launching new generation product that we are migrating not with big pressure because we want the customers are happy to migrate. And in this moment, the customers are also very happy of our old system. But we want to be sure we are on the age of innovation, even if where we have 50% of the market as pharmacy in Italy, but we cannot sit on that. This is why we said we need a new generation product. So to summarize, excellent position in strong customer base. Nobody is innovating like us across Europe. Yes, you can find one player in one nice market. Nobody is innovating like us across Europe. I'm sure about that. We have a strong knowledge through our organization of every local market. Our margin is strongly increasing, and I show you some number. The only number you have not seen in my previous slide. We measure every year the satisfaction also of our employees, and this is growing. Starting from a good base, this is growing on any axis that we measure. Because they feel the idea that they are part of a successful company, and they are part of the story of the company that is really enabling the change of the healthcare in Europe. Thank you. And I hand over to Derek.

Hello everybody in the room. Hello everybody out there in the Internet world. My name is Derek Pickell. Known finely around these parts as the crazy American for some reason. I don't quite know why. But I joined the company with the eMDs' acquisition. And I took over the American business, the U.S. and India business in 2021. When I came on board, one of the things we did a lot of was integration, and you'll see that's kind of built into my slide here about integration and also about brand recognition. In '21, the first thing we did, kind of similar to what Emanuele was talking about doing here in Europe is, we did an organizational restructure, right? So we brought all these various companies together. So we spent a lot of time on putting leadership in place, bringing companies or organizations so we had 1 support organization, 1 development organization, and we redid all of our go-to-market sales and marketing group, so we come under one umbrella in that environment as well. Then in '22, the whole focus was integration of the products, right? So we came on, eMDs had a core of solutions. And then CGM had some add-on functions too. Of course, the 2 of them when we started didn't talk. So a lot of the time we spent was bringing those together and making sure that we can use the new add-on modules and build them into the core solutions. And then recently, actually, we'll talk a little bit more about this. We introduced new releases of those core solutions literally just within the last 60 days. And now able to bring all these add-on modules to market, that we frankly weren't able to sell up until this point. And of course, now it's all about how do we grow that business? How do we get those out into the space? So at a high level, just kind of bring it and narrow it down to. Obviously, we grew revenues heavily from '19 into now, obviously, a big component of that, was the addition of the eMDs business, but we tripled the revenue in the U.S. market over those few years. And our organic growth for the first half of the year was just at 6%, which is what we kind of talked about where we get to over the next 5 years when we started the 5-year plan. And our business has always been highly recurring. So we right now are sitting at about 80% recurring revenue, and we'll see that growing as some things change within the business. And one of the items that we talked a lot about over time, which you'll see in our growth slides is the eMEDIX Clearinghouse platform. Very important product and a very important solution to us. Just with the annualized rates of where we're sitting in the transactions in that business right now, we've increased that by almost 50% year-over-year. And we expect that to continue to grow at pretty high rates as we move forward. One of the things I'm going to spend a couple of minutes on now is just our go-to-market solutions. And again, these are the 4 solutions that we really are selling net new, if you will. They're going out to new logo, there being add-ons and the like. The CGM APRIMA product, that's our fully integrated EHR, practice management system that's offered to the U.S. ambulatory market. And that's really our key new logo solution, if you will. So that's what we're out there selling to replacements of other EHR companies. It's highly awarded multiple times best-in-class. For those of you who don't know, class as an independent organization in the U.S., and also in Europe, actually. We have another one of our solutions, this is who is also best-in-class. So really doing well from that perspective. And then the second really key business, if you will, is the ARIA Health Services business. This is everything about revenue cycle. Hannes was talking about revenue cycle. We'll talk a little bit more about how we may be trying to come together with what they're doing here and what we're doing in the U.S. as well. But the ARIA business is definitely -- and will continue to be one of our double-digit growth drivers over the course of the next 3 to 5 years. The service is set up so that we offer revenue cycle management. We offer credentialing enrollment for providers. And we've branded this on its own. So although you will see CGM around ARIA, when we go to collateral and the like, it's really ARIA health services, and we did that because this is also a solution that we're selling in a B2B environment. So we actually have other EHR companies who we might compete with to go sell EHR solutions, but they're using us from a services perspective in a white label environment. And that's really grown pretty well. In fact, as recently as this past month, one of those EHR companies just added on additional business that within the next 6 months should bring us an extra $1 million per year in annual revenue just by the add-on business that they added. So we see a lot of opportunity there. This is also the business where we have the big offshore presence in India. So we have over 1,600 employees that are in the India operation, and we continue to build there. The other 2 major offerings, we talked a little bit about the eMEDIX. eMEDIX is the clearinghouse business. Back in the day, there is a new regulatory requirement that the U.S. government put in play called HIPAA and HIPAA mandated everything around patient privacy, things like that, but it also mandated electronic transactions in healthcare, which over the years have been extremely manual and paper intensive. So this solution is one that automates the transactions of things like finding out if the patient is eligible for the insurance and at what level are they eligible? Once the patient comes in, it's generating a claim that electronically then gets sent to the insurance carriers. We can do an automated claim status checking to see where it sits in the adjudication process. And it also does the automatic payments coming back into it as well. The long story short of this solution, a clearinghouse solution is every provider in the U.S. has to use a clearinghouse solution. So obviously, great opportunity, we think, as we bring -- we start to bring this to market in a bigger way. Another product that we are branding separately, because once again, we have built the infrastructure around eMEDIX now so that we can go to a B2B market. So in some of these companies, and we're already talking to a few where we're doing the RCM business for them in a white label environment, we're now opening up the opportunity to be their EDI or their clearinghouse vendor as well. So again, another B2B type environment. And then the last major one. Of course, we have a lot of other solutions that are out there, but I'm really just trying to focus on the 4 where we see growth coming into the business is our lab business or LIS business. And in that environment, LABDAQ is the main core laboratory information system that we sell into the market. We acquired SchuyLab a few years ago. What SchuyLab did for us is it gave us a Spanish version of an LIS. So we're able to sell that in Spanish-speaking countries. We do a lot down in the Caribbean now, and we're trying to expand that as well. And then the Medicus solution, which we just acquired recently, is really a very far down market, very small practice offices where they're doing lab work right there in the office. The excitement about that is they brought a bunch of additional distributorships. So they distribute that product not directly, but they go through others to do it. So it's opened up some new distribution channels for us. So they're the major solutions that we put out there that we're bringing to market that are really the high-growth solutions as we move forward. On the branding side, I kind of last -- I think, the last few years when I came and talked, because I come from a background. I've been in U.S. health care, IT and technical services for over 30 years, I know the business extremely well, the ton of contacts in that business. And when we were looking at potentially going out to sell, one of the bankers brought CGM to the business. I said, "Who the hell is CGM, I never heard of them in all the years that I've been here." It was kind of interesting. So I was a little concerned about that. But what we've been doing over the last few years, I mean, the obvious things, right? I mean we're changing websites. We're doing collateral that's going to have CGM in it and everything else are wrapped around those kind of marketing materials. But what we've also been trying to do is win awards under the CGM umbrella. So this year, we're really excited and we're very prestigious awards from Surescripts, which I don't know if you guys know Surescripts in the States, but it's the big electronic prescription kind of central piece. So everything has to mostly go through Surescripts to get to the pharmacies ultimately. And each year, they have what they call these White Coat Awards. And this year, we won of the prescriptions that our physicians put out there and also Structured & Codified Sig, which is all wrapped around being able to say when the patient goes and gets their prescription, all the structured data is in there to say, okay, you're going to get Lipitor or something like that, and it brings all the patient education information as well. So anybody who goes in to get a prescription, you also get a print out of things you should know about that drug and that prescription. So 2 areas where we're really trying in the U.S. You have to keep there until the end of the year and then you win best-in-class for the year. So doing very well there from a what the users think about us, right? Independent organization that's saying we're doing a good job, high NPS scores and so forth. And then one of the ones that's not on here too is about the employees, right? So we have really great NPS scores on our Peakon, which is an internal survey that we do. But also, we have something in the U.S. called Glassdoor. I don't know if you guys have it here or not. But Glassdoor is an environment where if an employee is looking to join a company, they often will go to Glassdoor to see what the results are. And usually, the companies are -- they're rated from 0 to 5, 5 obviously being the best. And right now, we're sitting at like a 4.4. So when people want to look, I think now the CompuGroup name is getting out there a lot more. We're hearing it. People kind of are calling us now. We're just kind of exciting, right? We didn't have that in the past. So we get a lot more activity actually on our website looking for information about the business and about the company. Now over the last couple of years, I outlined 3 primary organic drivers that we in the U.S. business have. Obviously, winning new customers, bringing those new logos to the table. Key for us, we got to do it. We, as an organization, even pre-CGM, we did spend a lot of time looking for new customers, because we have such a large client base, we can make so much money just in upselling into that client base. But then it became clear we really should be focused on replacement market as well, because we believe there is a very large replacement market coming up in the U.S. for EHR and practice management systems for the practices. And then obviously, retaining and monetizing the customer base. And I'm all about -- I always talk to the team about we can't have a leaky bucket, right? Leaky bucket, meaning we're having high attrition. If we have too high attrition, it's so hard to grow the business, right? So we're doing a lot of focus on retention and obviously finding ways to monetize the base. And then the last major driver from a growth perspective is taking that eMEDIX business, the clearinghouse business and expanding it out all of our systems and all of our organizations. Of course, the most important thing on all of these is the execution, right? I can talk about this all day long on what we say we're going to do. But until we show that we can execute on that, it's not really going to mean anything. So what I wanted to do over the next few slides is really focus on the success of the execution of those environments of where we are today and give you a little bit of an update. So when you think about this whole concept of winning new customers, I would say we've -- in the past, we didn't win a ton of new replacement customers. The market really wasn't out there. And all of a sudden, now with the 21st Century Cures Act, which forces more technology within an EHR solution so that some of these older systems really can't get certified from a 21st Century Cures Act perspective. So on this last year, year-to-date, we've sold over 140 net new APRIMA EHR solutions that we're in the middle of implementing as we speak. And these are people that are migrating away from older EHRs. We have a relationship and had a relationship with Quest, as an example. They had an EHR, and they basically came out and they're sunsetting that similar to what Hannes talked about what's going on in the HIS market here. We're seeing a lot more talk about some of these systems that have been around for the long, long period of time in the U.S. going to be sunset, which we think is a great opportunity for us to sell new APRIMA into the market. APRIMA also does a great job in we call kind of the home care primary care market, which is another big growth area within U.S. healthcare. And that's the environment where physicians don't practice within an office any longer, right? They're out of the 4 walls. And what they do is they go out to assisted living facilities, they go out to the patients' home. They see elderly patients. They see chronically ill patients, and they do all that on the road. And the product is set up extremely well for that, and we have 3 of the largest primary care home care companies, who are now on APRIMA within the last few years. So it's been going pretty well. We also, with the distributorship that we brought on with Medicus. We've been able to sell more on the lab side. We're actually selling somewhere between 1 and 2 net new AP EASY deals, which is the pathology piece of lab as well. And we also have come out with some new releases within the lab business. And then also, if you think about the ARIA RCM business, again, like I mentioned, B2B business, a lot of additional add-on business in that environment. That's an area where this past year, we saw double-digit growth and we're seeing much higher penetration into our existing base. So to put it in perspective, we think, if you look at the market and a lot of our competitors out there, if you can get to a 20% to 25% penetration of each of your software platforms on RCM, we think you're doing pretty well. We're getting close to that on the APRIMA side. On the eMDs legacy product, I mean, we're in single digits. On the CGM legacy products, we're in single digits and in the lab, we're in really low single digits. So the opportunity to upsell RCM into those is great, and we're really focusing heavily on that. We have a team that's all they do right now as they're out there upselling RCM into that base. And then we talked about the clearinghouse as well. And that's an environment to where we're branding that separately, and we also now have contracts that we've never had before because we never sold it in a B2B environment before. So we think there's opportunity there. And then when you look at that kind of leads into the next area where we talk about retain and monetize. Obviously, as I mentioned, first and foremost, we got to keep our customers. So we put in some new client satisfaction and executive sponsorship programs this past year. So every one of my executive team members owns a set of customers that they have to talk to and the larger ones, they have to go visit at least once a quarter. It gives us an opportunity to really get closer to the customer. And we find out -- I mean, I've been sitting with some. Everybody says they're happy, they're happy, and I go talk to them and they say, "Well, now we're thinking about change in systems." So just by having that communication interaction, they're now looking to migrate one of the old legacy products that was in the eMDs to the new APRIMA product. So we're now going to save a customer that was a pretty big customer that had we not been doing this program, we never would have known that they were actually out there and not happy at this point in time. So excited about that. As I mentioned, we came out with these new releases of upgrades in Q3, both on the APRIMA product and the eMDs product, and that's with the integration that all came together. You'll notice there, we talked about an All Star Sales Campaign. In the U.S. right now, baseball is hot, right? So my Phillies are doing good, people are doing good. So we came out with this All Star Campaign. The concept is now because we have this integration available we have 6 or 7 new add-on modules to each of these products that we couldn't sell prior to August, because they weren't -- they didn't work. They just didn't work with those core solutions. And actually, in August, we had our highest bookings month this entire year in upsells into our core base. So we're optimistic that, that's going to continue, and we're going to see more of that between now and the end of the year. All those items that we're selling are all subscription and they're all recurring revenue. So we think that's really going to get us to the numbers we expect to hit in '24 and '25. So we're excited about that. On the lab side, lab is notoriously more onetime. They sell the software, they sell hardware. And we've taken the AP Easy product and turned that into a SaaS solution. So we now are migrating those what would be on-prem type solutions into the lab and environment. We've already migrated or at least got contracts to migrate 10% of that base. Again, that will go from one time to move all in the recurring, which will help us get that 80% potentially higher. And then on the rev cycle side, we talked about -- we had a lot of focus on improved customer satisfaction. Our class scores, I think, are proving that we're able to do that. And we're really doing well there. And we, again, like I said, double-digit growth in sales year-over-year in ARIA and also in top line. One of the things that we've been focused on kind of like the data mindset of what we can do with data that Eckart was talking about is how do we better monetize this big client base. And we've been looking at very different ways. And in health care in the U.S. right now, there's a big movement towards, I guess, what I would call value-based care. I don't know if you've heard of that in States. But basically, you're going away from getting paid for a service, a fee-for-service environment to now you're getting paid as a provider for the outcome. The fact that you're keeping patients healthy. The fact that if somebody is a diabetic or has COPD, you're following the protocols that everyone believes are the best protocols to keep that patient healthy. And then if you're part of this kind of this whole accountable care organization, there's big opportunity for bonus and for upside at the end of each year. So we signed up with the first one, I think we'll do a lot more. But the idea is if we go up and sign up with these organizations, we bring our providers then to the opportunity to join these value-based care organizations. Everyone that we bring -- this group, which we literally just signed last week, we have our kickoff in 2 weeks for every patient, not provider now. So for every patient that falls into Medicare Advantage that is a patient in the roster of that provider, if they sign on, we would get up to $10 per patient per month as a fee to provide our RCM services to. So again, I'll just give that as an example of ways that we're trying to find other areas to monetize the business. And with the value-based care becoming such a big push in the U.S., we think there might be some great opportunity. We have another one on track to hopefully sign before the end of the year as well. And then, of course, we talked about monetizing data as well and we continue down that path. And then the last major growth driver that we talk about is expanding eMEDIX. So we have the integration. On the APRIMA side, it was a little bit easier for us to do because when we had APRIMA originally, when we sold the product, we sold it with an EDI clearinghouse solution. So the contract is directly with us. So we've been able to move 75% of that client base now under the eMEDIX solution from an EDI perspective, which will help us bottom line to help us top line. We still have third parties out there that are using it, but we should have everybody [indiscernible] between the provider and a third party. So we have to now go out and show that our integration is so much better, kind of the old somebody's kind of talked about it, but the one throat to choke concept, right? We're going to come in. Our systems are much better integrated, why don't you just migrate to our EDI, our clearing house and use our -- you're using our PMS or practice management system. So we come out -- we just came out with that release as part of our Phase II. And then Phase II, we have a new release for the MEDISOFT and Lytec base. That's the base that if you may recall, is mostly managed by our resellers. And that new release is coming out in December. So then we could start upselling into that, which is a very large provider base. We can upsell into that the eMEDIX platform as well. So we're really excited about where we are with that, and we think there's huge upside both from a top and bottom line as we do more of the eMEDIX into these bases. Spend just a couple of minutes going back to kind of the AI mindset, too. I won't go into too much, because it's very similar to what you've heard up to this point in time. But we've been using AI type tools in the ARIA RCM business, forever, really, I mean, from that perspective, in some way, shape or form. And we do everything from what we would say is take a bunch of data, right? eMEDIX now has a lot of data on claims, on denial information, a lot of information that comes from the insurance companies that now we can use to before we send a claim out of door -- out the door for a provider, we can identify where we think there's going to be a problem or there's going to be a denial. So we use all of that data. We use that. We make it intelligent data now, and it comes back to our team in the RCM side and says, "Hey, this code is probably going to get rejected, you better look at it better talk to the provider and do something else." So we're doing that now. We're also doing a lot on document management. One of the things in U.S. health care that we've been trying to get away from is paper. We get literally hundreds of thousands of paper remittances every month for our RCM business. And we started this year and we developed a way to basically take all that paper, it gets scanned, it gets into a structured format so that what was on a paper that we would need a bunch of people in our ARIA business out in the India operation to manually look at it and they would have to go in and type it in. 90% of that right now has now been moved from manual to being automated, Chatbot, because there's easy answers. And with all the data we have, it's easy to put that into that format. And then the other one, I'll just -- there's 2 other ones that I think are worth focusing on. The population health I talked about this value-based care. There's much more opportunity to be able to do more proactive looking from a clinical perspective using AI. When we do a lot more around that, that's going to be -- I think, is really going to help us especially in the 0 value-based care that we're getting to in the U.S. And then the last one is voice documentation. We've talked to Nuance. We actually had them come in. We worked with them a little bit. We've been doing transcribing forever, right? I mean going in and the physician speaks and they type it. We're also looking more now at the environment where you have a microphone in each exam room. And as you're talking as a patient to your provider, it's taking all of that data -- and then it ultimately is taking it and again, putting it into a structured format, which is what it's all about, to be able to enter it directly into the note. So as opposed to your provider sitting in front of you and typing in information, I mean, he or she is really spending time directly one-on-one with the patient, and they can really -- patient feels better, right, that they're really listening to what they have. So another key area where we see it going in the future. Real-life example. I talked about this, I won't spend a ton of time. But basically, in this environment where we've been able to optimize denial management. We've been able to automate all this paper into automated posting, we were able to get a 10% improvement in really the whole productivity of that team. So I mean you think about it, as we continue to do more of this in an environment where we have 1,500 or 1,400, almost 1,500 employees now, if we can do more of that in an automated fashion, obviously, as we grow the business, we won't have to add as many people. It will be extremely helpful from the bottom line. So if you bring it all together, workflow, the LAB workflow is pretty easy from a patient journey perspective, right? Someone sick, they go to see their physician the physician decides in the office, they're going to take blood samples, they're going to take tissue samples, whatever. There then goes through our solutions, the solutions take it to the labs that actually do the test after they do the test and come up with the results. Those results are automatically funneled into our systems and to -- when she makes that appointment online, the system will also ask her for insurance information. And it will do a check on issue eligible, will the insurance pay for this visit. If not, how much will she owe, and we can actually ask for payment right there, too, because we now have CGM Pay, which gives her the opportunity to pay in an automated fashion rate online. And then, of course, she comes in -- it gets scheduled. She sees the doctor. Once she sees the doctor, again, there could be other tests that go on that comes through. And then the physician may prescribe a med. We actually do over 50 million electronic prescriptions right now in the business. Why that's important is we get a piece of the action for every prescription that we put in. And there's other ways to monetize that as well. So really big -- e-prescription in the U.S. has been big for a long time. It seems like it's going more now, obviously, across the world. And then obviously, then we have a claim that goes out. In this environment, we could be doing the billing and AR management functions of that. And then the other things that have just added this last kind of CGM Connection and CGM Pay, they are the new functionality that we didn't have last year that we've now put out there. So it's the environment where now that KIM has done, she had her process, she saw everything, it will go out, we can do a survey to see how she liked the provider becoming required in the U.S. now. And it also gives an opportunity to remind her that hey, you might need to go back for a visit in 3 months. It will text her to let her know about that. And then once the bill drops, it will send her a statement electronically text or paper or not paper or e-mail, whatever makes sense, whatever is going to work and let her know what she has to pay. And then at the end of it, be able to also know that she can pay online as she goes forward. So I think we're really ready to achieve all that organic growth that we said we would achieve over time and also the margin expansion. So if you net it all down, we've talked about this always in the past. I think the U.S. health care market is poised for a lot of disruption. I mean for those of you who may have seen yesterday, one of our biggest competitors up for sale, has got a reason to sell, obviously, it opens up an opportunity for us to sell on a lot of fear uncertainty of doubt what's going to happen to them, what's this new owner going to do? We see a lot more of that. There's at least 2 of the larger ones that we know are up for sale. We have another one that's going to go out and try to go public again. There's just a lot going on. And then with the 21st Century Cures Act, that means that all of these systems that have been out there for a long period of time is part of meaningful use, which went back like 10, 15 years ago. Those systems are going to go out. So we think there's great opportunity in the market. Obviously, we have a large base, both on the physician and client side. And now we think we're a known brand in the U.S., a little bit better than it ever was before. So that brand recognition will bring opportunities to us. And the team, our executive team, I mean, we've integrated a ton of acquisitions over the years, right? I mean, as part of the eMDs world before it became part of CGM, we did 4 acquisitions. We brought some of the McKesson business out of the U.S. from the ambulatory side, we brought the APRIMA business. I mean there's been a lot of that, and we've done a pretty good job, I think, of integrating all those solutions and the team comes in an environment where they've been in U.S. health care for a long period of time. We're sticking to our guns. We're getting to that 6% to 9% organic growth. And then ultimately, that's all going to come, obviously, because of the significant upsell opportunity that we have into our base. So with that, I'm going to pass it over to Thomé.

Okay. So if I may ask again all the speakers from the second session on stage. Yes, Reichl, Emanuele, Derek and Michael. And yes, so again, if I may ask you to raise your hand, I already see the first one. Please wait for the microphone. Please ask all your questions in one go that you have. And yes, I already received some questions from the webcast, but if there are any more, please do e-mail them to me. And with that, Martin, the first one again.

Yes, a couple of questions, please. First one is on the TI. So what is the impact of this TI flat rate? I mean basically, what do you expect the shortfall of the one-off revenues and to be compensated by an increase in the recurring TI revenues? And basically, what's the time line? So what's the breakeven for that? And then on the U.S. Can you talk about competition there? I mean how is competition if you're #4 in the market? And how important is size really? And how much does it really take you to get to #3 in terms of investments? And then also maybe on AIS, PCS price increases, you've obviously increased prices there this year. What is customer feedback and what magnitude should we expect in terms of price increases there next year?

All right. Yes. I'll take the first question on the TI side, because you asked a comparison with the historical pattern and the pattern going forward. So one needs to know that we had one timers in the Telematics Infrastructure, particularly at the very beginning when we introduced the connectors and sold the connectors 2017, '18 and then also later on for the pharmacies in 2020. And again, we had those one-timers starting in September last year, up until March kind of like when we resold basically the connectors and exchange those. We have a second component of one-timers in the Telematics Infrastructure that is the software updates on the connector, which typically, there was almost one per year. We missed one last year. We talked about that, which we are also coming in this year. So if we exclude the hardware component, we just talk about the software upgrade for the connector, then basically the idea is that the flat rate encompasses that and compensate for that. Still, if you want to do a number calculation, you always will have some onetimers, for instance, additional card readers being sold or exchanged if practices change or things combined. So these will not go away. So maybe more specifically because we already know there's one question coming up on the web regarding the TI flat rate. Can you help us somehow Michael, got that what is the magnitude of the flat rate? So we have been introducing the flat rate starting second half year of 2023. And currently, we charge a price of EUR 147 per month. That's very concrete.

In relation to competition, a little different from solution to solution, of course, right? So if you talk about just AIS EHR-type solution. I mean the big competitors to us are people like Athenahealth, which is about a $1.2 billion organization. We see NextGen, which is about a $650 million to $700 million organization. We see eClinicalWorks, which is a privately held organization, hard to say, our guess is they're somewhere in the $500 million range. And then we have a bunch of others like Kareo and Elation and things like that, very small in that kind of environment, they're probably $10 million, maybe $20 million. For us to get to #3 would have to be, frankly, through acquisition. I mean it will be very difficult for us to -- I mean, we literally would have to grow our business pretty significantly over year-over-year. But that's kind of where the market is right now. On the lab side, it's a little bit different from a number of customers perspective, we're actually #1. But because our customers are so small, the revenue was lower than what sounds like an Orchard, which is one of our competitors, which is a PE-backed firm. which they really go into the much larger environment. So they're a little bit larger than us. Their revenue is probably in the $50 million, $60 million range for lab, just for labs, though.

Towards the question of price increase, our direction is in this year and what is planned to be to happen next year. But first of all, one has to say that if there is a general environment of price increase and understanding, at the customer side of price increase, I would consider it to be now. And that is the reaction that we get. Of course, nobody says array when they come price increase, but it's a sticky market, and that is something that helps us there. So there is a certain pricing power, and we will see how we are going to use that next year, too.

Then I will throw in some more questions from the webcast and already, we had the first question from Knut Woller already answered, and he has another one for Emanuele which is -- in terms of revenue opportunity, can you provide more insight into the expected impact of the second wave of Ségur in 2024 and 2025? And we've got another question for Michael, which is you mentioned that you intend to keep R&D stable in absolute terms while you want to reallocate resources towards AI in the coming years. Listening to Emanuele streamlining the organization in AIS and Hannes new modern G3 product available. To which extent are these efforts behind us, helping you to reallocate R&D resources?

I go with Ségur. The definition of the Wave 2 of Ségur is not complete. It's under definition by the national government. So we can have, I believe, a reliable forecast, but not secure data. We expect that for the doctors, the founding of Wave 2 will be aligned with Wave 1. So we expect to have above the same revenue. For the paramedics that will be part of Wave 2, the expectation is that the founding bio healthcare provider will be lower, but the number of providers we have is much higher. So we expect the impact on the [indiscernible] provider that will be on top of one of the doctor will be between 60% and 70% of the impact we had for doctor Wave 1. About the timing, this is more difficult, because the French government really want to see the full implementation and result of Wave 1. The discussion now is if the deadline will be end of '24 or mid of '25, and this is really a question mark.

I'll continue on the second part. In order to keep costs constant, you either need to reduce number of contractors or your own personnel or basically reduce salaries, which we don't want to do. So that means we need to reallocate staff and the examples that were given today from Hannes and from Emanuele clearly show the direction we're moving into. But let me be also crystal clear. We have been over 36 years in existence, because we have excellent staff working on research and development for our customers. And we will continue doing that. So keeping our costs flat is already a saving, which we commit to, we will not overcome it.

Okay. So is there another question in the room right now? Andreas? Okay.

I have 3 questions. One is for Emanuele. If we look at the revenue per doctor before La Ségur and now how has it developed? I would assume that would also measure the level of digitalization that La Ségur has brought. The second is for Reichl. The revenue per doctor is presumably still the highest in the Nordics. What would you consider to be the drivers to further increase revenue and this would also relate to digitalization per doctor in Germany to the same level? And one for Derek. I remember that when the U.S. business was acquired, profitability was somewhat lower than in the rest of CompuGroup, where does profitability stand today? And do you see potential to improve it further?

I go with first one. First of all, remember, Ségur is a program only in France. So I will refer to the revenue per doctor in that specific country. We had a booster on the revenue per doctor, there is onetime revenue for the national funding to the service of installation. But then we provide more value for the doctor and this [indiscernible] has also to increase our price. And after the Ségur project in France, our revenue per doctor increased about 10%.

Yes. For the future increasing of the revenues per doctor, I would see at least 2 things. The first one is the quality that we provide in support and in service, raising that is felt by customers. And that is something that brings you to a price raise and customers understanding it. The second one is what value can we bring to the table with additional modules that we offer with additional services, and we have to work on that, and we are working on that. And that also is a good argument for doctors to have price increases and accept them. And then as I said, the general mood of it, as you see it in the practice, prices are raising, and that's the same here. So I would consider this to be the same thing in the next 12 months, and we are confident that this is going to work.

Yes. In regard to the business, I think when we first talked, we were just above 10% from a margin perspective in the U.S. business when we brought the businesses together. This year, we should end in the high teens, possibly into the 20s, and our commitment to my friend here is that by '25, we will get up into the mid-20s. And we feel pretty confident with all the add-on business that we have that has minimal costs associated with that, that will help us get there over the next 2 years.

Okay. Thank you. Then we have more questions from the webcast from -- this time from Wolfgang Specht from Berenberg. The first question is on the AIS business. What is the reason for the rather poor organic revenue growth of AIS, 2% in the first half 2023 and the declining EBITDA margin, given high stickiness of customers and pricing power, how has churn developed over the past 2 years? Second question to Emanuele, how will the price points for the SaaS solutions Stellar Studio extend in relation to the existing solutions be is a further phasing out of the on-premise solutions targeted? And while we are at Wolfgang, he handed in another question for Eckart, which is how is the monetization of the Health Intelligence Suite plant working? Maybe Michael to start.

If you allow me to -- because he was addressing first half -- so next time, you will take that question. Wolfgang that is right. We were showing that 2% organic growth for total AIS for the first half. One has to see that always in comparison to the first half of the prior year and always in comparison to what's going on in the business. So those of you that have been following CompuGroup for longer know in the moment in time when we have a connector rollout, like the one in 2017, 2018, we really put all feet on the ground, making sure that we get everything done with the connector rollout and exchange, and that was the same case here. So from September 2022 until basically March, April 2023, everybody was focusing on the AIS Germany space on making sure that we get the connector exchange. And with that, there's obviously less sales effort than also happening at the same time with practices and with the doctors because it is the same person you're talking to, you're burdening already, the NPA, the PTAs, the whole team with the connector exchange. So then the second question was regarding -- or second part of the question was regarding the margin. And here, that is one example, for instance, where we are investing, right? You saw Emanuele talking about the migration from G2 to G3 in various fields in his area. And obviously, we're doing the same also, not only in [ Moneris ] field, but also in Germany, where we are migrating towards G3 technology. And we're doing that also in the U.S., as Derek was explaining. So that has an impact on the margin. But going forward, we want to bring the margins up. Derek mentioned it already, the other 2 would have mentioned the same. So I'm very confident that we will bring up the margin and also organic sales growth will improve. We are going up against lower comparables for the fourth quarter of this year. Plus, we actually also benefit, for instance, in Germany from the introduction of the TI flat rate in the way that basically the reimbursement rules work, because that causes many of the practices to say they still need to buy some add-on modules and download functionality in order to benefit from getting the full reimbursement in place. So actually, we also see regulatory tailwind here. That makes us very positive regarding the second half year.

How we go on the SaaS questions. In Europe, the pricing point of our SaaS solution will be substantially higher than the price we have today. But let me better explain this topic, because it's very important. Selling a SaaS cloud solution includes the all sting that solution that is on premises does not include. And this brings us in very different situation, because in a different market and in the different countries, we have ARIA where we are the provider also of the hardware to our customers. In that area where we are not the hardware supplier. They used to buy from us software and to buy hardware somewhere else. We are defining in general pricing point that allow us to have from a SaaS solution, the same revenue and the same growth in the years that we are having now where we have software and hardware business. And we expect -- we are quite sure on -- based on the calculation we have done that instead where we will migrate customers from on-premises to the SaaS solution in the market where we don't sell hardware, that delta that will be allocated to the cost and to the correct marginality in selling hosting will be upside for us in terms of revenue. About the phaseout of the product. Again, we are speaking of a very heterogeneous and different markets. We have markets where we have multiple AIS system, some of those have hundreds of installation. We have markets where with multiple 10,000 of installation on legacy products. We clearly will focus first on the migration where we have in the market where we launched product on the migration where we have low installation to be ready to phase out that specific AIS in Italy that have 500 customers to phase out that in months, even not in years. We have a situation where we will have to migrate 20,000 customers and we believe the right approach is not to force the customer to migrate till the very end of the life of a product. We have an estimation that in this case we count in years. But for that case, we still don't have a clear phaseout plan. We needed to study the adoption curve on the first month and first year of the product before defining where we can phase out the product where we have thousands and thousands of customers.

Good. I have also a question from Wolfgang, which is related to the monetization of the health intelligence suite, which basically happens in 3 stages, freemium, conversion and scale out. The freemium is happening as we speak. I alluded to the fact that we are rolling out a version of the practice teams. We call it the [ practice teams light ] as we speak to our Medistar population. Based on that platform that we are building also into the other AIS channel, we will convert those customers to a full version that we then will start to monetize. And believe it or not, the first 300 pilot customers, already 10% have asked for the upgrade without even advertising it. And then we will go full scale and sell the whole suit to the customer base, which is likely going to happen in Q3, Q4 2024. Secondly, I have a question open from Laura. Laura Metayer, which I didn't get fully in the morning. She was asking about the competitive dynamics in the data field. Yes, we have other competitors in the market that have a similar or that have a reach that is lower than ours, who are mimicking our approach, and they are about 2, 3 years behind what we are doing.

Super. Thank you. As for now, is there another question in the room, please? No? Okay. Then we've got a final round of questions from Laura Metayer from Morgan Stanley. And thank you, Eckart. The first one is on the U.S. business. Are there any regulatory programs to boost health take adoption in the U.S. If not, what you say, increased efficiency is the main incentive for the purchase of add-on modules? Second question, also on the U.S., could you talk about the competitive landscape, which players you see the most in your market and what do you think CGM can do better? And the last question for the PCS business. Can you remind us, please, what has driven the organic growth acceleration in recent quarters? And if you expect growth to go back closer to historical levels in the next quarters?

I'll start with the competitive landscape, which I think we touched on a little bit with one of the other questions here. But the companies that we see typically in the EHR now, it's a different space, right, than what is revenue cycle side or what we have on the lab side. But in that environment, we're typically seeing the Athenas of the world. We do see some smaller kind of upstart companies as well. We do see NextGen, we do see Greenway, not as much these days Greenway, probably more of the e-clinical work, more of the Athena. And as far as what we can do more in that environment, I think the fact that we're now able to come out with a more full suite of integrated solutions makes us much more competitive against a lot of those in that environment. So we feel really good about that of what we can do. There is a question, I think, about regulatory I don't know if that was specific to the add-on modules or just in general. But the 21st Century Cures Act is a regulatory requirement, and it's all wrapped around newer, better technology that has an opportunity to be more interoperable with other systems. So being able to talk to the hospital system, being able to talk to the lab system. And that is an environment where we think that will generate more opportunity for us. As far as the kind of the push for regulatory, the HIPAA environment from a clearinghouse perspective, mandates that everybody has to use a clearing house. Now we have to obviously replace some of the ones that are sitting out there. And we think through the integration of the product, we can have a much better solution, frankly, at a lower cost than what they might have to get from a third party because there's a lot of interfacing and the like that has to happen on that side too. So we think there is some good opportunity push more of this upselling of more of our new solutions as we go out the door. And one of the other ones that we just came out with, which I didn't mention is something we call CGM MEASURES. And in the U.S., again, it's all wrapped around value-based care. It's all wrapped around how are your outcomes and its clinical measures that have to be provided to the government by any provider, who wants to be part of the governmental programs. And CGM MEASURES, we literally just announced that and it's now integrated in with the eMDs product and also with the APRIMA products. We think that will really push too, because everybody's got to get it done and get it up and running before the end of the year, and they have to report in the first quarter of the next year. So we have an opportunity now, but then we'll have another bigger opportunity even in '24 because we'll have to do the same kind of reporting for '24 into '25. And at that point, we'll have a lot more experience and a lot more, I guess, I would call it, good references from that perspective.

Pharmacy grow. About half of the growth we had comes from price increase. In pharmacy, we are slightly increasing the number of customers around Europe, and this also allow us to grow. And 2, 3 percentage point comes from growth of hardware selling for some specific campaign or reason to substitute hardware. It will be challenging to consistently maintain the 8% of growth. It is a very strong growth. But we believe we are consistently in that the very low digit -- 1-digit growth we had in the last years. I believe we substantially improved our positioning. Again, 8% is very challenging year by year, but this will not be much lower than that.

Just if I may complement to remind everybody, we set out a growth target for PCS of 0% to 2%. So the gentleman is very humble. It's an excellent growth with 8%. Congrats.

Okay. And since there are no further questions in the room and also not from the webcast, thank you all for the lively discussion. And we're closing the Q&A. Thanks for all the questions. And I would like to hand over to Michael for the closing remarks.

Yes. Thank you. Can I ask my colleagues to come on stage you all here in the room and you have been spending with all of us here the whole day, and I appreciate that a lot. Thanks, first of all, to everybody who's physically here. We really love that active interaction, which we have been experiencing here today. It hasn't been as hot as I assumed it would be, right? It was warm, but it's still comfortable. So hopefully, we can enjoy some drinks afterwards. It's great on how you challenge us with your questions on how you accompany us. I also want to thank everybody, who has been participating over the web. We do know that the turnout traditionally over the web is a bit higher than the physical presence, and we will have to think about the best formats to cater for all of your needs. I want to go back to the inaugural moment of talking about the pivotal moments for CGM. This is a very relevant moment in time where we are in. The year 2023 will be the year when we will look back in 5 years from now to say that really changed and transformed the way we operate at CompuGroup Medical. We shall never ever underestimate the chances and opportunities that lie within all of us on artificial intelligence. And you heard it already on what CompuGroup has basically done in all of the segments over the past couple of years in order to prepare for that moment in time, and we feel best equipped. We want to thank you all for accompanying us on the journey. And as you can see here, the whole management team is very confident that we can achieve our 2025 targets. And with that, we want to invite you to stay on that journey with us and enjoy then a good moment in time come to 2025. But for now, we will focus on the next quarter to put it into the books. Many thanks to all of you, and many thanks for the organizational team. I want to give a big hand of applause to Claudia and her team who have done a fantastic Capital Markets Day and also to Frederic. Thank you. And with that, bye-bye to the webcast, and thank you all here in the room. Thank you.