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)
- - - - - -
