Empresas y finanzas

Sorin Group Announces Earnings for Q1-2008 Exceeding Guidance - Full Year Guidance Confirmed

08/05/2008 - 10:40

Q1-08 Results: revenues in line with expectations(*)

profits above guidance despite significant and unfavourable foreign

exchange impact, and net debt improved from guidance

Revenues at 183.2 million Euro, down 1.4%(*)(**) compared to the same period in 2007;

EBIT at 9.1 million Euro (4.9% of revenues) compared to 6.4 million

Euro in the first quarter of 2007 (3.3% of revenues);

EBITDA at 20.6 million Euro (11.2% of revenues) up from 19.3

million Euro in the same quarter 2007 (9.9% of revenues); both EBIT

and EBITDA were materially impacted by foreign exchange;

Net Debt at 318.2 million Euro as of March 31, 2008, compared to

330.5 million Euro as of March 31, 2007.

2008 full-year guidance confirmed. In Q2-08 revenues are

expected to be substantially constant(*)(**) versus the same period last year. EBITDA and EBIT margins are expected

to be between 11.5-12.0% and 5.5-6.0% of revenues, respectively. Net

Debt is expected to be stable if compared to the same quarter last year.

For H1-08 the company´s net earnings

are expected to be positive at constant perimeter.

The Board of Directors of Sorin S.p.A. (MIL:SRN) meeting today under the

chairmanship of Umberto Rosa, approved the consolidated financial

statements for the first quarter of 2008, ending March 31st.
"We continue our transformation towards

becoming a strong and consistent performer. We are focusing on

profitability improvements through gross margin expansion and SG&A

reduction initiatives, while maintaining a high level of innovation"

said André-Michel Ballester, Chief Executive

Officer.
In the period, Sorin Group posted Revenues of 183.2 Euro million

down 1.4%(*)(**) over the same period

2007. Foreign exchange negatively impacted revenues in the quarter by

approximately 7 million Euro.

The Cardiac Rhythm Management Business Unit (implantable

devices that manage cardiac rhythm disorders) reported revenues of

54.2 million Euro in the quarter, up 1.7%(**) from Q1-07. Sales rose 0.7%(**) in the High

Voltage segment (OvatioTM defibrillators and CRT-D) to 15 million Euro

whilst the Low Voltage segment (SymphonyTM and ReplyTM pacemakers)

grew 1.6%(**) in the quarter to 37 million

Euro. Q1 sales were significantly impacted by management decisions to

discontinue US$ based sales in unprofitable countries and to

restructure its sales force in Southern United States as well as by a

change in the reimbursement of the SymphonyTM pacemakers in France. The company expects Q2 sales growth to continue

to be impacted by the same factors. However, the forecasted launch in

the 2d half of 2008 of OvatioTM CRT in the US

and of the new generation CRT-D device in Europe will allow the CRM

Business Unit to regain growth momentum in Q3 and Q4-08, in line with

the guidance for the full year.

The Cardiopulmonary Business Unit reported revenues at

70.9 million Euro, down 3.2%(*)(**) from the same period in 2007. Sales of Heart-Lung Machines were 11

million Euro in the quarter, down 11.7%(**) versus the same period in 2007 due to a challenging

quarter-over-quarter comparison. In the Oxygenator segment the company

reported revenues of 46 million Euro, -2.0%(*)(**) vs. Q1-07, whilst the Autotransfusion business was up 1.3%(*)(**) to 14 million Euro in the period, compared to the same period of 2007.

The company expects that the combined launch of the S5TM Heart-Lung Machine in Japan and of the Kids D101TM Infant Oxygenator globally will, as planned, stabilize sales for the

rest of the year.

The Heart Valves Business Unit (including mechanical and tissue

heart valves, as well as valve repair products) reported revenues of

25.7 million Euro, up 1.1%(**). In the

Mechanical Heart Valves segment revenues declined by 8.8%(**)

in line with expectation, to 15 million Euro. In the Tissue Heart

Valves segment revenues were significantly up (+27.8%(**))

to 9 million Euro fuelled by the successful launch of the MitroflowTM valve in the US where the adoption of the valve is accelerating.

The Vascular Therapy Business Unit (drug-eluting and

bare-metal coronary stents, endovascular stents and catheters for

angioplasty) posted revenues of 5.6 million Euro in the first quarter

down 37,9%(**) versus the same period in

2007. The Renal Care Business Unit (biomedical devices used to

treat patients with kidney diseases) had revenues in the quarter of

26.5 million Euro, up 7.9%(**).

Gross Profit was 94.8 million Euro in Q1-08, or 51.7% of revenues

(compared to 99.9 million Euro, or 51.1% of revenues, in the same

quarter of 2007), thanks to the continuing improvements in manufacturing

efficiency more than offsetting negative foreign exchange impact.
SG&A expenses in the quarter were 72.0 million Euro, from

78.5 million Euro in the same period of 2007, corresponding to 39.3% and

40.2% of revenues respectively, showing the first benefits of the cost

reduction initiatives announced previously.
Research and Development expenses were 13.7 million Euro (7.5% of

revenues), same as in Q1-07 (7.0% of revenues), highlighting the Company´s

efforts to reduce costs whilst maintaining a strong commitment to

innovation.
EBIT in the first quarter 2008 was 9.1 million Euro, or 4.9% of

revenues, compared to 6.4 million Euro, or 3.3% of revenues, in

the same 2007 period.
EBITDA amounted to 20.6 million Euro (11.2% of revenues) in the

quarter, compared to 19.3 million Euro (9.9% of revenues) in the same

quarter of 2007.
This improvement in profitability was generated notwithstanding the

strong negative impact of the Euro vs. $ of about 2 million Euro in the

quarter.
The Group´s Net Debt as of March 31

2008 was 318.2 million Euro, 12.3 million Euro less than 31.03.2007

thanks to a marked improvement in working capital and particularly in

Account Receivables and Inventory. Net debt at the end of 2007 was 293.3

million Euro; the increase in Q1-08 is due to the seasonality of working

capital and the cash impact of restructuring and extraordinary items.
The Company confirms guidance previously communicated for full-year 2008.
In the second quarter of 2008 revenues are expected to be

substantially constant(*)(**) versus the

same period last year. EBITDA and EBIT margins are expected to be

between 11.5-12.0% and 5.5-6.0% of revenues, respectively. Net Debt is

expected to be stable if compared to the same quarter last year. For

H1-08 the company´s net earnings are

expected to be positive at constant perimeter.
The manager responsible for preparing 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.
About the Sorin Group
The Sorin Group (Bloomberg: SRN.IM; Reuters: SORN.MI), a world leader in

the development of medical technologies for cardiac surgery, offers

innovative therapies for cardiac rhythm dysfunctions, interventional

cardiology and the treatment of chronic kidney diseases. The Sorin Group

includes these brands: Dideco, CarboMedics, COBE Cardiovascular, Stöckert

Mitroflow, ELA Medical, Sorin Biomedica, Bellco and Bellco-Soludia. At

the Sorin Group 4,500 employees work to serve over 5,000 public and

private treatment centers in more than 80 countries throughout the

world. For more information, please visit: www.sorin.com
________________________________
(*) net of sales to subcontractors
(**) At comparable foreign exchange rates

SORIN GROUP

CONSOLIDATED INCOME (LOSS)

(amounts in millions of euro)

= = = = = = = = = = =

1st quarter 2008

1st quarter 2007
- - - - - -

- - - - - -

Net revenues

183.2

195.4
- - - - - -

- - - - - -

Other revenues and income

2.9

1.3
- - - - - -

- - - - - -

Change in inventory of work in progress

- - - - - -

semifinished goods and finished goods

7.5

6.2
- - - - - -

- - - - - -

Increases in company produced additions

- - - - - -

to fixed assets

5.8

6.7
- - - - - -

- - - - - -

Production value

199.4

209.6
- - - - - -

- - - - - -

Cost of raw materials, outside services

- - - - - -

and miscellaneous operating costs

(114.4)

(121.1)
- - - - - -

- - - - - -

Personnel expense

(64.4)

(69.2)
- - - - - -

- - - - - -

EBITDA

20.6

19.3
- - - - - -

- - - - - -

Depreciation, amortization and writedown

(11.3)

(11.2)
- - - - - -

- - - - - -

Provisions for risks and charges

(0.2)

(0.4)
- - - - - -

- - - - - -

Charges and provisions for

- - - - - -

restructuring (1)

(1.3)
- - - - - -

- - - - - -

Net production value (EBIT)

9.1

6.4
- - - - - -

- - - - - -

(1) Net of surplus of restructuring

provisions set aside in past years.
- - - - - -

SORIN GROUP
CONSOLIDATED FINANCIAL POSITION
(amounts in millions of euro)

= = = = = = = = = = =

03.31.2008

12.31.2007
- - - - - -

- - - - - -

Non current financial assets

--
- - - - - -

- - - - - -

Current financial assets:

- - - - - -

- Receivables from derivative financial instruments

2.7

3.2
- - - - - -

- Other financial assets

36.0

31.9
- - - - - -

- Cash and cash equivalents

21.1

22.7
- - - - - -

- - - - - -

Total financial assets

59.8

57.8
- - - - - -

- - - - - -

Non current financial liabilities

(194.1)

(199.0)
- - - - - -

- - - - - -

Current financial liabilities:

- - - - - -

- Payables from derivative financial instruments

(0.4)

--
- - - - - -

- Other financial liabilities

(183.5)

(152.1)
- - - - - -

- - - - - -

Total financial liabilities

(378.0)

(351.1)
- - - - - -

- - - - - -

NET INDEBTEDNESS

(318.2)

(293.3)
- - - - - -

- of which current indebtedness

(124.1)

(94.3)
- - - - - -

- of which non current indebtedness

(194.1)

(199.0)
- - - - - -