Sorin Group (MIL:SRN) (Reuters Code: SORN.MI), a global medical device company and a leader in the treatment of cardiovascular diseases, announced today the following update on the status of its manufacturing operations in Mirandola, in the Northern Italian region of Emilia-Romagna, after the earthquakes of May 20 and May 29.
Personnel
The Company is relieved to report no casualties and no injuries among Sorin´s employees. Sorin Group continues to prioritize maximum safety conditions to all employees.
Operations and production
As a result of two main earthquakes, the Mirandola manufacturing facility has sustained some damage. As a consequence, Sorin manufacturing operations in Mirandola have been discontinued and product shipments have been temporarily interrupted.
The Mirandola plant manufactures oxygenators and autotransfusion disposable kits, part of Sorin´s Cardiopulmonary Business Unit. The other cardiopulmonary by-pass disposables, Sorin´s ATS machines and the entire heart-lung machine segments are manufactured in the facilities of Denver (Colorado, United States) and Munich (Germany). These other Cardiopulmonary products are therefore available as usual. In addition, none of the plants dedicated to Cardiac Rhythm Management devices and Heart Valves were affected in any way by the earthquakes.
Sorin Group, immediately after the first earthquake, set up an emergency task force and initiated investigation on the damages of the Mirandola campus to assess measures for recovery, alongside with the Company´s effort to constantly communicate with its customers. Security clearance has recently been provided by competent authorities to access the Mirandola campus, commence work to ensure safety of buildings and resume shipments from the finished goods warehouse.
As a result of extensive restoration and repair efforts and thanks to the outstanding commitment from the employees in the Mirandola area and the strong leadership from the Business Unit management team, the site´s core manufacturing operations are expected to resume as follow:
- For autotransfusion disposable kits a gradual return to production is already underway, and as of August 1, 2012 manufacturing operations will be restored.
- The oxygenator manufacturing operations are expected to restart on September 1, 2012. With regards to the Inspire new family of oxygenators, Sorin Group is targeting full launch in the first half of 2013 for all geographic areas.
Impact on performance
Sorin Group´s revenues and profits in the short-term will be affected by the impact of the earthquakes, but long-term guidance remains unchanged. In particular:
- For the second quarter of 2012, the impact of the earthquakes on revenues is estimated to be in the region of €18 - 20 million.
- For fiscal year 2012 the impact of the earthquakes on revenues is estimated to be approximately €90-100 million and the estimated impact on net earnings, prior to any recoveries from insurance coverage, is expected to be in the region of €35-40 million.
- For fiscal year 2013 the Company expects to regain 100% of its market share in the product segments affected by the earthquakes by June 2013. Therefore the Company´s long-term guidance from second half of 2013 onwards remains unchanged.
The Cardiopulmonary segments unaffected by the earthquakes, as well as the whole Cardiac Rhythm Management and Heart Valves Business Units are expected to perform, in the second quarter of 2012 and for the full year 2012, in line with previous forecasts.
Sorin Group has in place a comprehensive insurance policy program providing coverage, including against natural hazards, for both property damage and business interruption, therefore the Company´s ability to execute its long term plan will be unaffected by these recent events.
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 3,750 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.
For further information, visit: www.sorin.com.