MILAN--(BUSINESS WIRE)--At a meeting held today and chaired by Rosario Bifulco, the Sorin S.p.A. (MIL:SRN) Board of Directors approved the Company’s Interim Financial Report as of September 30, 2013.
“In the third quarter Sorin reported revenues in line with guidance and confirmed its track-record of net profit expansion and robust cash generation. The Cardiac Surgery business unit reported strong revenue growth and a full recovery for oxygenators and autotransfusion systems from the impact of the 2012 earthquakes, alongside, exceptional performance of heart-lung machines and improved results of the heart valve segment. The Cardiac Rhythm Management business unit is showing first signs of stabilization, although the outlook for the full year remains negative” stated CEO André-Michel Ballester. “We now expect sales for 2013 close to the low-end of guidance, while profitability will be in the high-end of the previously communicated guidance.”
In the third quarter 2013, Sorin Group posted revenues of €180.3 million, a 19.0% increase at comparable foreign exchange rates over the third quarter of 2012, representing the Company’s full recovery from the earthquakes.
- The Cardiac Surgery Business Unit (cardiopulmonary products for open heart surgery and heart valve repair or replacement products) reported revenues of €119.2 million. The heart-lung machine segment delivered an exceptional performance in every major market in the quarter. The Oxygenators and ATS systems also reported strong performance, demonstrating Sorin’s full recovery from the earthquakes of 2012. The product segments impacted by the earthquakes posted a 3% growth at comparable exchange rates compared to the third quarter of 2011, the latest period available for meaningful comparison. The tissue valves segment performed well during the third quarter, mainly due to MitroflowTM growth in Japan and to continued penetration of PercevalTM. Notwithstanding the continued shift toward tissue valves in Europe and the US, the mechanical valves segment also showed a positive performance, thanks to higher volumes in emerging markets.
In October 2013, Sorin Group officially launched its new family of adult oxygenators InspireTM and the HeartlinkTM system at the EACTS (European Association for Cardio-Thoracic Surgery) Annual Meeting, in Vienna, Austria.
| (Euro million) | ||||
| Q3 13 Revenues | Underlying growth %* | |||
| Heart-lung machines |
25.5 |
31.4% |
||
| Oxygenators |
48.1 |
65.1% |
||
| Autotransfusion machines and devices |
15.2 |
48.8% |
||
| Mechanical Heart Valves |
12.8 |
5.2% |
||
| Tissue Heart Valves |
14.7 |
11.3% |
||
| Other |
2.8 |
nm | ||
| Total Cardiac Surgery |
119.2 |
37.1% |
||
|
(*) For details, see attached table “Consolidated revenues by Business Unit” |
||||
- The Cardiac Rhythm Management Business Unit (implantable devices to manage cardiac rhythm disorders) reported revenues of €60.5 million, with a 5.4%3 decrease compared to the third quarter of 2012. Low voltage revenues continue to be affected by a challenging pricing environment in Europe and lower volumes in Japan due to the penetration of Magnetic Resonance Imaging (MRI) compatible pacemakers. The positive performance in high voltage was driven by the CRT-D segment, which reported over 10% growth at comparable exchange rates thanks to the ongoing penetration of SonRTM in Europe and the first implants of SonRTM in the US in the RESPOND clinical trial.
| (Euro million) | ||||
| Q3 13 Revenues | Underlying growth %* | |||
| High Voltage (defibrillators and CRT-D) |
22.2 |
0.9% |
||
| Low Voltage (pacemakers) |
35.9 |
-8.8% |
||
| Other |
2.5 |
nm |
||
| Total Cardiac Rhythm Management |
60.5 |
-5.4% |
||
|
(*) For details, see table “Consolidated revenues by Business Unit” |
||||
Gross profit for the third quarter of 2013 was €106.1 million, or 58.9% of revenues, compared to €98.4 million, or 61.3% of revenues in the third quarter of 2012. The decrease in Gross margin is mainly due to the effect of foreign exchange rates and to a different business mix due to the earthquakes in the same period of 2012, partially offset by ongoing manufacturing efficiencies.
Selling, General and Administrative (SG&A) expenses were €67.4 million, compared to €76.2 million in the third quarter of 2012. At constant foreign exchange rates, SG&A were substantially flat, notwithstanding the €0.7 million impact of the US medical device excise tax.
Research and Development (R&D) were €17.8 million (9.9% of revenues) compared to €18.8 million (11.7% of revenues) in the third quarter of 2012.
EBITDA in the third quarter of 2013 was €32.1 million, or 17.8% of revenues, compared to €14.1 million, or 8.8% of revenues in the third quarter of 2012.
EBIT was €19.4 million compared to negative €0.3 million in third quarter of 2012. EBIT before special items was €20.9 million compared to €3.4 million reported in the third quarter of 2012. Special items in the third quarter of 2013 include restructuring charges of €1.2 million and other non-recurring charges of €0.3 million.
Net financial charges were €1.5 million compared to €2.6 million in the same period of 2012. On a run-rate basis, the financial charges in the third quarter of 2013 were substantially flat over the same period of 2012.
Net profit was €14.6 million compared to €0.2 million in the third quarter of 2012.
Adjusted net profit1 was €15.7 million compared to €3.1 million in the third quarter of 2012.
Net financial debt as of September 30, 2013 was €91.3 million compared to €90.9 million at June 30, 2013 (€89.1 million as of September 30, 2012). Special items for the period were negative for €18.9 million and mainly due to lower without recourse factoring (see detail in the attached table).
In the third quarter of 2013 the Company generated free cash flow4 of €18.5 million.
Consolidated results for the first nine months of 2013
In the first nine months of 2013, Sorin Group reported revenues up 4.6%3 to €546.7 million, Gross Profit of €323.0 million or 59.1% of revenues (61.0% in the same period of 2012), EBITDA of €89.6 million or 16.4% of revenues (13.3% in the same period of 2012) and Net profit2 of €33.8 million or 6.2% of revenues (3.4% in the same period of 2012).
Guidance for the full year of 2013
Sorin Group expects to report full-year revenue growth at comparable exchange rates for 2013 of approximately 5% and Adjusted net profit1,2 of €58-60 million.
* * *
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 documented results and the accounting books and 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 an 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 Report on Operations at December 31, 2012.
* * *
This press release contains forward-looking statements. These statements are based on the Group’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 laws and regulations (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 medical device company and a leader in the treatment of cardiovascular diseases. The Company develops, manufactures and markets medical technologies for cardiac surgery and for the treatment of cardiac rhythm disorders. With 3.750 employees worldwide, the Company focuses on two major therapeutic areas: Cardiac Surgery (cardiopulmonary products for open heart surgery and heart valve repair or replacement products) and Cardiac Rhythm Management (pacemakers, defibrillators, cardiac resynchronization devices). Every year, over one million patients are treated with Sorin Group devices in more than 80 countries.
Per further information, visit: www.sorin.com.
1 Adjusted net profit: net profit before after-tax non-recurring income and expenses (special items)
2 Taxes include effects related to Law Decree no. 76/2013
3 At comparable exchange rates and perimeter
4 Free cash flow: net profit + depreciation, amortization and writedowns ± ∆ working capital – investments. The amount is stated net of the impact of special items
