MILAN--(BUSINESS WIRE)--At a meeting held today and chaired by Rosario Bifulco, the Sorin S.p.A. Board of Directors approved the Draft of the 2013 Financial Statements, which will be submitted to the next Shareholders’ meeting convened for April 30, 2014.
“2013 final results are substantially in line with the preliminary figures published on February 6, 2014. In 2013 Sorin Group (MIL:SRN) successfully recovered from the consequences of the earthquakes and delivered strong financial results. During the year, the Company launched new breakthrough products, such as the new InspireTM- HeartlinkTM- ConnectTM System and KORATM, the only pacemaker with MRI automatic mode feature. In 2013, the Company also announced several important deals, including the acquisition of Brazilian manufacturer Alcard, the joint-venture with MicroPort for the Chinese CRM market and the greenfield project to manufacture cardiopulmonary products in China”, said André-Michel Ballester, Sorin Group's Chief Executive Officer. “Today Sorin Group also announces the acquisition of Oscor’s CRM leads business to enhance its lead portfolio for MRI system development”, he added.
CONSOLIDATED RESULTS FOR 2013
In 2013, Sorin Group reported revenues of €738.5 million, a 4.8%* increase compared to 2012.
Gross profit in 2013 was €436.8 million, or 59.1% of revenues, compared to 60.6% of revenues in 2012. The decrease in Gross margin is mainly due to the effect of foreign exchange rates and to a normalized product mix after the full recovery from the earthquakes, partially offset by ongoing manufacturing efficiencies.
Selling, general and administrative (SG&A) expenses were €280.3 million compared to €309.6 million in 2012. At constant foreign exchange rates, SG&A were substantially flat, notwithstanding the €2.7 million impact of the US medical device excise tax.
Research and development (R&D) expenses were €73.7 million (10.0% of revenues) compared to €75.4 million (10.3% of revenues) in 2012.
EBITDA was €131.1 million, or 17.8% of revenues, up 28.8% compared to €101.8 million, or 13.9% of revenues in 2012.
EBIT was €68.6 million compared to €36.9 million in 2012. EBIT before special items was €82.8 million in 2013 compared to €58.0 million in 2012. Special items, negative for €14.2 million in 2013, included restructuring charges for €7.2 million, non-recurring charges related to the earthquakes for €3.5 million, partly balanced by a further installment of the insurance indemnification for the earthquakes of €3.75 million received in the second quarter of 2013. The remaining non-recurring charges refer mainly to business development activities and litigation costs. Compared to preliminary figures, special items have increased by €1.5 million mainly attributable to a higher provision for the specific risks fund.
Financial charges amounted to €10.3 million compared to €14.3 million in 2012. On a run-rate basis, the financial charges in 2013 were lower by €0.6 million compared to 2012.
Net profit was €48.9 million compared to €20.3 million in 2012.
Adjusted net profit° was €59.2 million, up 51.3% compared to €39.2 million in 2012.
Net financial debt as of December 31, 2013 was €68.7 million, compared to €87.8 million as of December 31, 2012 (€91.3 million as of September 30, 2013). Special items for the period were negative for €31.4 million, including €20.5 million for business development initiatives (see details in the attached table).
In 2013, the Company's free cash flow^ amounted to €50.5 million.
Significant events occurring after December 31, 2013
In addition to the previously-communicated joint-venture with MicroPort Scientific Corporation, Sorin Group acquired Oscor Inc. CRM leads business, including a lead manufacturing facility in the Dominican Republic for an aggregate value of approximately US$20 million and made a further investment of US$5.1 million in Cardiosolutions, a company focused in the development of an innovative mitral repair system. The European Investment Bank has also approved a new medium-long term financing for Sorin Group of €100 million.
Guidance for the current fiscal year and for the first quarter of 2014
For 2014 the Company expects revenues to grow by 3-5%* over 2013.
Sorin Group expects an adjusted net profit° of approximately €55-60 million, equivalent to adjusted EPS of €11.5-12.5 cents, despite the unfavorable impact of foreign exchange for approximately €10 million and the investments in New Ventures which will have a temporary dilutive effect of around €6-7 million. The Company’s 2014 adjusted net profit° guidance does not include income related to further installments of the insurance indemnification for the earthquakes, for which the final assessment and closing is expected in 2014.
For the first quarter of 2014, Sorin Group expects revenues to grow 0-2%* over the same period of 2013.
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Results of the parent company, Sorin S.p.A.
The Board of Directors approved the financial statements of the parent company, Sorin S.p.A., which recorded a net profit of €28.5 million (€70.4 million in 2012), and proposed to allocate the profit to the legal reserve (€1.4 million), foreign exchange gains reserve (€4.0 million) and retained earnings (€23.1 million).
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Call of the Shareholders' meeting
The Board of Directors has mandated the Chairman to convene Sorin S.p.A. Shareholders’ meeting, which will take place on April 30, 2014, in accordance with the period required by law.
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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.
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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 Interim Report on Operations at June 30, 2013.
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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.
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The amounts indicated in the reclassified layouts of the attached tables are not included in the audit by the Independent Auditors. In addition, notice that the issue of the December 31st, 2013 auditor’s report of Sorin Group Financial Statements is still in progress.
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About Sorin Group
Sorin Group (Reuters Code: SORN.MI), 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.
For more information, please refer to www.sorin.com
* At comparable exchange rates and perimeter
° Adjusted net profit: net profit before after-tax non-recurring income and expenses (special items)
^ Free cash flow: net profit + depreciation, amortization and writedowns ± ∆ working capital – investments. This account is net of the impact of special items