Mar 20 2010
Sorin (MIL:SRN):
“The final 2009 financial statements confirm the full achievement of our
targets; this solid financial basis will be the foundation for future
growth. The 2010-2014 Plan confirms the strategic guidelines previously
communicated, based on profitability and cash flow expansion and
prepares for accelerated growth in the future”
-
Consolidated full year revenues at € 689.0 million (+5.2%
vs. 2008), EBITDA at € 99.4 million (14.4% of revenues, up from 12.4%
in 2008) and EBIT at € 51.5 million (7.5% of revenues, compared with
7.0% in 2008). Before special items, EBIT at € 58.6 million
(8.5% of revenues, up from 6.2% in 2008).
-
Net profit at € 23.2 million, or 3.4% of revenues, versus a net
loss of € 37.1 million in 2008. Net profit from continuing operations
at € 26.6 million (€ 0.5 million in 2008).
-
Net debt of € 181.6 million as of December 31, 2009, down from €
253.1 million at the end of 2008 and € 198.6 million as of September
30, 2009.
-
For 2010, the Company expects year-over-year revenue growth of 2-4%,
EBITDA margin improvement to 15-16% and a net profit of € 33-37
million. Net debt is expected to be further reduced to € 150 million
by the end of 2010.
-
Strategic Plan for the period 2010-2014 was approved by the Board
of Directors. Revenue expected to grow globally at an average of
3-5%; in 2014 Gross Profit at 61-63% of revenue and EBITDA margin in
excess of 20% of revenue. Highlights of the Plan will be presented to
the financial community in a meeting on Monday March, 22nd,
in Milan.
* * *
The Board of Directors of Sorin S.p.A., meeting today under the
chairmanship of Rosario Bifulco, approved the 2009 financial statements
and the Strategic Plan for the 2010-2014 period.
“The final 2009 financial statements confirm the full achievement of our
targets; this solid financial basis will be the foundation for future
growth. The 2010-2014 Plan confirms the strategic guidelines previously
communicated, based on profitability and cash flow expansion and
prepares for accelerated growth in the future” said André-Michel
Ballester, Chief Executive Officer, Sorin Group.
CONSOLIDATED RESULTS FOR 2009
In 2009, Sorin Group reported revenues of € 689.0 million,
up 5.2% (+7.1% at actual exchange rates) compared
with the previous year.
-
The Cardiopulmonary Business Unit reported revenues of € 316.7
million, up 2.4% (+4.6% at actual exchange rates) versus 2008,
driven mainly by the Heart-lung machines segment. During 2009 the
company has significantly strengthened its organizational structure,
completing the integration of the EVH (endoscopic vessel harvesting)
business line. The business unit has continued to its strategy of
improved profitability, through disciplined financial and inventory
management.
-
The Cardiac Rhythm Management Business Unit increased revenues
to € 255.6 million in 2009, up 9.1% compared with 2008
(10.7% at actual exchange rates), driven in particular by the High
Voltage segment, where the business unit has increased its market
shares in all major geographies. In the Low Voltage segment the
business unit has strengthened its presence in several European
markets, becoming the market leader in key markets such as France.
Innovation and manufacturing efficiency were key elements of the
business unit performance during the year.
-
The Heart Valves Business Unit posted revenues of € 112.8
million in 2009. The year-over-year increase of 5.6% (7.5% at actual exchange rates) versus 2008 is driven mainly by the
strong expansion of tissue valve sales in the main European markets
and in the United States, where the business unit has significantly
gained market share. The market decline of the mechanical valves
segment has continued, in line with expectations. During 2009,
important milestones have been achieved with the Perceval STM project,
dedicated to the development of a bovine pericardium self-expandable
surgical valve. The enrollment of 180 patients in a clinical trial
conducted at eight centers in Europe has been successfully completed,
with the objective of obtaining CE mark approval in 2011.
Gross Profit grew to € 384.3 million, or 55.8% of
revenues, compared with € 347.1 million, 54.0% of revenues, in
2008. This significant improvement was due to the reduction in
manufacturing costs and reflects the positive impact of improved
geographic and product mix.
Selling, general and administrative expenses (SG&A) were €
266.7 million, 38.7% of revenues, from € 254.6 million, 39.6% of
revenues, in 2008.
Research and Development expenses grew to € 59.0 million, or 8.6%
of revenues, compared with € 52.4 million, or 8.1% of revenues, in 2008.
EBITDA increased to € 99.4 million, 14.4% of revenues,
compared with € 80.0 million, 12.4% of revenues, in 2008.
EBIT increased by 14.2% at € 51.5 million (7.5% of revenues),
compared with € 45.1 million, 7.0% of revenues, in 2008. As
detailed in the tables below, EBIT was impacted in 2009 by provision for
€ 7.2 million reflecting the tentative-settlement that the Company has
reached with the US Department of Justice, concerning a previously
disclosed investigation. This amount has not been included in the 2009
preliminary data, since at that time the amount could not been estimated
reliably, as communicated on March 12th, 2010.
Excluding special items, EBIT was up 46.2% at € 58.6 million,
8.5% of revenues, compared with € 40.1 million in 2008, 6.2% of revenues.
Net profit rose to € 23.2 million (3.4% of revenues),
compared to a net loss of € 37.1 million in 2008. This amount is € 4.8
million less than the previously communicated preliminary data,
primarily reflecting the above mentioned provision, after taxes. Profit
from continuing operations was € 26.6 million in 2009 vs. € 0.5 million
in 2008. This improvement reflected a significant reduction in financial
expenses, at € 10.3 million, down from € 26.8 million a year earlier.
This decrease is due to a positive mark-to-market difference of our
hedging portfolio (€ 10.8 million) and to a reduction in the cost of
servicing the debt (€ 8.5 million), partially offset by other net
financial expenses.
Net debt was € 181.6 million as of December 31, 2009, down
from € 253.1 million at the end of 2008 (€ 198.6 million as of September
30, 2009). The net cash flow of € 71.5 million generated in 2009
reflects the positive impact of improvement in profitability and the
reduction in working capital. Special items had a net positive impact of
€ 3.1 million in 2009, as detailed in the tables below.
For 2010, the Company expects year-over-year revenue
growth of 2-4%, an EBITDA margin improvement to
15-16% of revenues, net profit at € 33-37 million. Net debt is
expected to be further reduced to € 150 million by the end of 2010.
* * *
The Board of Directors also approved the stand-alone statutory accounts
of Sorin S.p.A., which show a net profit of € 2.1 million (net
loss of € 56.7 million in 2008). The Board of Directors has resolved to
attribute the 2009 net profits to the legal reserve for € 0.1 and to
carry forward the remaining part of € 2.0 million.
* * *
Call of Shareholders Meeting
The 2009 draft financial statements approved by the Board of Directors
of Sorin S.p.A. will be submitted for approval at the annual
shareholders’ meeting scheduled for April 27, 2010 (first call) and
April 28, 2010 (second call), which will also address the proposal of
nomination of the new Directors recently co-opted by the Board pursuant
to Article 2386 of the Italian Civil Code, and about the renewal of the
Statutory Board.
* * *
2010-2014 STRATEGIC PLAN
The Board of Directors has approved the 2010-2014
Strategic Plan, which will be presented to the financial community
in a meeting held on Monday, March, 22nd, in Milan, at the
company’s Headquarters.
This Plan confirms the guidelines previously communicated to the market,
outlining a path towards sustainable growth in profitability and cash
flow. In the 5-year period, the company will strengthen its market
leadership in its core segments through continued technological
innovation and strong financial discipline with a particular focus on
gross margin improvement. The achievement of these goals, together with
selective investments in innovation and geographic expansion, are
fundamental to achievement of Sorin’s aspirational sales growth targets
for the future.
2010-2014 targets
Sorin Group revenue is expected to grow globally at a 3-5%*,
2009-2014 average growth rate.
In particular:
• The Cardiopulmonary Business Unit is expected in the period to
post an average annual growth of revenues of 1%-2%*, driven by
geographical expansion, in particular in emerging markets, by
technological innovation and by the continuing strengthening of the
pipeline, also through penetration in adjacent market segments with
internally developed and acquired technologies. The business unit will
leverage in particular on its global leadership position and on the
significant installed equipment base to support its share in disposable
products.
• The Cardiac Rhythm Management Business Unit is expected to post
an average annual growth in the period at 6%-8%*, driven by market share
gains in the High Voltage segment, where new technologies and therapies
will become increasingly available, and, to a lesser extent, by the Low
Voltage segment, led by demographics and penetration in emerging
countries. The business unit will continue to focus on becoming the
innovative leader in hemodynamic management of heart failure.
• The Heart Valves Business Unit is expected to grow annually at
an average of 8%-10%, led mainly by US market penetration with tissue
and repair therapies as well as by the expansion of its tissue position
in Europe, whilst defending mechanical shares worldwide. Heart Valves
continues to be an attractive market driven by an aging population and
by increased access to care for a large number of patients currently not
undergoing treatment. New technologies will become available and Sorin
will address this innovative valve segment with a portfolio of new
products specifically addressed to cardiac surgeons (minimally invasive
surgery).
Gross margin is expected to grow at 61-63% of revenues by 2014,
thanks to a comprehensive manufacturing cost reduction program and
improved product mix. This Program is focused on quality and
design-to-cost, on the procurement process and higher efficiency and
productivity.
EBITDA is planned to exceed 20% of revenues by 2014, thanks to
improvements in gross margin and to the continuous commitment to cost
control.
Net profit is expected to be € 60 - 80 million at the end of the
Plan. In 2014 the company plans to have a positive net financial
position and to use the financial resources generated by the
positive cash flow to focus on growth acceleration.
Source Sorin Group