Consolidated results for 2011:
- Revenues of €743.4 million, a 1.0%*
increase (-0.3% as reported) over 2010;
- Gross profit of €447.6 million, 60.2%
of revenues (58.9% in 2010);
- EBITDA of €128.7 million, 17.3% of
revenues (16.1% in 2010);
- Net profit up 48.5% to €58.0 million,
7.8% of revenues (5.2% in 2010).
Net financial debt down to €105.9 million as of December 31,
2011, compared to €128.8 million as of December 31, 2010.
For 2012, the Company forecasts consolidated revenue
growth of 2-4%* and a net profit increase of 5–10% over 2011.
For the first quarter of 2012, the Company forecasts revenue
growth of 1 –2%* over the same period last year.
* * *
At a meeting held today and chaired by Rosario Bifulco, the
Sorin S.p.A. (MIL:SRN) Board of Directors approved the Draft of the
2011 Financial Statements.
“2011 final data are fully in line with the preliminary figures
published on February 9, 2012. 2011 was a challenging year for the
top line, particularly in CRM. In contrast, the Company
strengthened its global leadership position in Cardiopulmonary and
was able to significantly grow its net profit by around 48%. In
2012 we are committed to continue sustaining our longer-term growth
strategy with further geographic expansion initiatives and
additional investments in innovation”, stated Sorin Group's Chief
Executive Officer André-Michel Ballester.
CONSOLIDATED RESULTS FOR 2011
In 2011, Sorin Group reported revenues of €743.4 million,
up 1.0%* (-0.3% as reported) compared to 2010.
- The Cardiopulmonary Business
Unit posted revenues of €344.9 million, a 4.2%* increase
over 2010. This performance, the highest revenue growth of the past
five years, reflects the strong contribution of the emerging
markets. The growth was led by the heart-lung machines segment
which had outstanding performance in all of the main markets and by
the autotransfusion business, thanks to the commercial success of
XtraTM. The oxygenator segment performed well, mainly in the
emerging markets and in the United States, where it benefitted from
the integration of Gish Biomedical during the first part of the
year. In the fourth quarter the Company obtained CE mark for the
first InspireTM adult model. In 2012 Sorin will roll-out this new
and innovative range of oxygenators on a global basis.
(Euro million)
2011
Revenues Underlying growth % Heart-lung machines 78.1
14.2% Oxygenators 200.1 0.6% Autotransfusion machines and devices
61.9 6.3% Other 4.8 n.m. Total Cardiopulmonary 344.9 4.2%
- The Cardiac Rhythm Management
Business Unit reported revenues of €277.5 million, a
2.9%* decrease compared to 2010. The high-voltage segment reported
a revenue decline mainly due to a global market slowdown and the
absence in the first nine months of significant new product
launches for the Company in the cardiac resynchronization therapy
(CRT) segment. With the European commercial launch of the
innovative SonR system in October, Sorin stopped its share erosion
in the CRT segment. In the low voltage segment Sorin posted a
slight decrease, with a sluggish market trend in the United States
and Europe only partially offset by share gains in Japan and in
emerging markets.
(Euro million)
2011
Revenues Underlying growth % High Voltage
(defibrillators and CRT-D) 90.4 -4.3% Low Voltage (pacemakers)
177.0 -1.9% Other 10.1 n.m. Total Cardiac Rhythm Management 277.5
-2.9%
- The Heart Valves Business Unit
reported revenues of €119.0 million, a 1.5%* increase
compared to 2010. The mechanical valves segment experienced a
slight decrease in revenues in line with the expected and continued
shift of the market to tissue values. Traditional tissue valves
performed positively thanks to the contribution of the new
PercevalTM sutureless valve and to the penetration in emerging
markets and the United States, which more than offset the slowdown
in the European market.
(Euro million)
2011
Revenues Underlying growth % Mechanical Heart Valves
56.5 -1.3% Tissue Heart Valves 55.8 1.9% Other 6.8 n.m. Total Heart
Valves 119.0 1.5%
Gross profit rose to €447.6 million, or 60.2% of
revenues, compared to 58.9% of revenues in 2010, representing the
first year in the Company's history in which gross margin resulted
above 60%. The improvement is attributable to the ongoing
manufacturing cost reduction programs.
Selling, General and Administrative (SG&A)
expenses were €289.7 million, or 39.0% of revenues, compared to
39.4% of revenues in 2010. Net of the impact of hedge accounting,
SG&A amounted to 38.8% of revenues compared to 38.0% in 2010.
The difference is attributable to a slight increase in selling and
marketing expenses for the commercial launch of new products and
for geographic expansion initiatives.
Research and Development (R&D) expenses increased by
4.7% to €70.1 million, or 9.4% of revenues, compared to 9.0% in
2010.
EBITDA in 2011 rose by 7.1% to €128.7 million, or
17.3% of revenues, compared to 16.1% of revenues in 2010.
EBIT grew by 22.7% to €87.7 million, or 11.8% of
revenues, compared to 9.6% in 2010. EBIT before special items was
€87.8 million in 2011 (€78.4 million in 2010).
Net financial charges, including expenses on investments
in associates, decreased to €7.6 million from €11.6 million in
2010. On a run rate basis, net financial charges decreased by €1.9
million as a result of lower average debt for the period and a
lower spread applied to medium/long-term debt.
Net profit rose by 48.5% to €58.0 million, or 7.8% of
revenues, compared to 5.2% of revenues in 2010.
Net financial debt as of December 31, 2011 is down to
€105.9 million, compared to €128.8 million as of December 31, 2010
and €122.4 million as of September 30, 2011. Free cash flow°
generated in 2011, equal to €37.7 million, is mainly the result of
increased profitability, despite significant deterioration of
payment terms in Southern Europe.
2011 net debt position was negatively impacted by €14.8 million
of special items, including the effect of the difference in fair
value of hedging portfolio and business development investments
(see attached table for details). Major investments included the
acquisition of the Estech cannulae portfolio, the minority
investments in MD Start (incubator in the European med-tech sector)
and Enopace Biomedical (start-up focused on innovative solutions
for heart failure patients) and a partnership for the development
of a new lead portfolio.
Guidance for the current fiscal year
For fiscal year 2012, the Company expects consolidated
revenue growth of 2-4%* and net profit growth of 5–10%. For the
first quarter of 2012, the Company expects revenues to grow by
1-2%* over the same period of 2011.
The 2012-2016 Strategic Plan will be approved by the Board of
Directors on September 20, 2012. The outline of the Strategic Plan
will be presented to the financial community during a meeting
scheduled for September 24, 2012.
* * *
Results of the parent company, Sorin S.p.A.
The Board of Directors also approved the financial statements of
the parent company, Sorin S.p.A., which recorded a net profit of
€35.0 million (€10.0 million in 2010), and proposed to allocate the
profit to the legal reserve (€1.7 million) and retained earnings
(€33.2 million).
* * *
Buy-back plan
In accordance with Article 144-bis of Consob regulation no.
11971/1991 (Issuer Regulations), Sorin Group announced the
conclusion of the share buy-back program authorized by the ordinary
Shareholders meeting on September 14, 2010 for a period of 18
months. Such program resulted in the purchase of a total of
3,773,600 Sorin ordinary shares, equivalent to 0.79% of the current
share capital, for a total consideration of €6,046,131. These
shares are currently held by the Company.
At today's meeting, the Board of Directors approved a resolution
pursuant to Articles 2357 and 2357-ter of the Italian Civil Code
and Article 132 of Legislative Decree no. 58 of February 24, 1998,
to submit a proposal to the shareholders' meeting to be convened,
for the authorization of a new plan covering the purchase and
disposal of the Company's shares within a period of 18 months from
the date of the shareholders’ resolution. The proposed program
would allow the purchase, in one or more transactions, on a
revolving basis, of up to 10% of the share capital of Sorin
S.p.A..
The proposed plan provides for the purpose of stabilizing
Sorin’s share price and for the purchase of treasury shares to
service existing and future share incentive plans for directors
and/or employees and/or associates of Sorin S.p.A. or other
companies of the Group.
The Board of Directors proposes that the share price for the
purchases may be established from time to time for each
transaction, provided that such price may not be higher or lower by
10% than the reference price recorded on the Stock Exchange in the
trading session preceding each purchase transaction.
For any other information regarding the proposal, reference
should be made to the Report of the Directors drawn up pursuant to
Article 73 of the Issuer Regulations.
* * *
Call of the Shareholders' meeting
The draft of the 2011 consolidated financial statements approved
by the Sorin S.p.A. Board of Directors will be submitted to the
next Shareholders’ meeting convened for April 27, 2012 (first call)
and, if necessary, for April 30, 2012 (second call).
The Board of Directors has also approved for submission to the
Shareholders' meeting: i) the report on the Management
compensation; ii) a new “Long-Term Incentive 2012-2014” plan for
directors and employees of Sorin S.p.A. and/or companies controlled
by Sorin S.p.A.; iii) a stock grant plan to service the deferral,
including partial deferral, and the conversion into shares, of the
2012 annual “Short-Term Incentive” bonus earned by directors and
managers with strategic responsibility of Sorin S.p.A. and/or
companies controlled by Sorin S.p.A.; and iv) a proposal for the
integration and amendment of the “Long-Term Incentive 2009-2013”
plan for the benefit of directors and employees of Sorin S.p.A.
and/or companies controlled by Sorin S.p.A., as approved by the
Shareholders' meeting on September 14, 2010.
The Shareholders' meeting will also be called upon to pass a
resolution in relation to the appointment of members of the Board
of Directors, subject to the determination of the number of
directors for the years of 2012-2014 and the determination of the
related directors' fees, as well as a resolution about the proposal
for authorization of a plan covering the purchase and disposal of
treasury shares, as described above.
In the extraordinary session, the Shareholders will also
deliberate on the proposal to confer to the Board of Directors,
pursuant to Article 2443 of the Italian Civil Code, for a period of
five years from the date of approval, the powers to execute a free
share capital increase, in one or more transactions, for a nominal
value of up to €10 million, by issuing up to 10.0 million ordinary
shares with par value of €1.00 each, to be assigned to employees of
Sorin S.p.A. and/or of the companies controlled by Sorin S.p.A.,
pursuant to Article 2349 of the Italian Civil Code within the
framework of each of the aforementioned incentive plans or similar
plans that may be approved in the future covering the granting of
shares. This resolution will also entail an amendment of Article 5
of the corporate by-laws.
The documentation required by prevailing laws and regulations in
relation to the aforementioned matters and in relation to the
proposals to be submitted to the Shareholders' meeting will be
filed in the period required by law with the registered office of
the Company and with Borsa Italiana S.p.A. along with the 2011
consolidated financial statements and the report on corporate
governance approved today by the Board of Directors.
The documentation will also be available on the Internet site:
www.sorin.com.
* * *
The Corporate Officer responsible for the company’s financial
reports, Demetrio Mauro, declares, pursuant to paragraph 2 of
Article 154 bis of the Consolidated Law on Finance, that the
accounting information contained in this press release corresponds
to the document results, books and accounting records.
* * *
In addition to the conventional indicators recommended by the
IFRS, this press release provides alternative performance
indicators. These indicators should not be considered as
replacements for the conventional indicators recommended by the
IFRS, but rather as additional source of information,
representative of the income statement, balance sheet and financial
position parameters used internally in the decision-making process.
An explanation of the meaning and structure of these alternative
performance indicators is provided in the Interim Report on
Operations at June 30, 2011.
* * *
This press release contains forward-looking statements. These
statements are based on the Company’s current expectations and
projections about future events and, by their nature, are subject
to inherent risks and uncertainties. They relate to events and
depend on circumstances that may or may not occur or exist in the
future, and, as such, undue reliance should not be placed on them.
Actual results may differ materially from those expressed in such
statements as a result of a variety of factors, including:
continued volatility and further deterioration of capital and
financial markets, changes in commodity prices, changes in general
economic conditions, economic growth and other changes in business
conditions, changes in government regulation (both in Italy and
abroad), and many other factors, most of which are outside of the
Company’s control.
* * *
About Sorin Group
Sorin Group (www.sorin.com) is a global company and a leader in
the treatment of cardiovascular diseases. The company develops,
manufactures and markets medical technologies and innovative
therapies for cardiac surgery and for the treatment of cardiac
rhythm disorders. With over 3,700 employees worldwide, the Company
focuses on three major therapeutic areas: cardiopulmonary bypass
(extra-corporeal circulation and autotransfusion systems), cardiac
rhythm management, and repair and substitution of heart valves.
Each year, over one million patients are treated with the devices
of Sorin Group in more than 80 countries.
* * *
* At comparable exchange rates and perimeter
° Free cash flow: net profit + depreciation, amortization and
writedowns ± ∆ working capital – investments. This account is net
of the impact of special items.