BUSINESS WIRE: Sorin Group Reports Final Consolida...

BUSINESS WIRE: Sorin Group Reports Final Consolidated Results for 2009 and
Presents 2010-2014

Strategic Plan



MITTEILUNG UEBERMITTELT VON BUSINESS WIRE. FUER DEN INHALT IST ALLEIN DAS
BERICHTENDE UNTERNEHMEN VERANTWORTLICH.
------------------------------------------------------------------------



MILAN, Italy --(BUSINESS WIRE)--19.03.2010--

Sorin (MIL:SRN):

* Consolidated full year revenues at EUR 689.0 million (+5.2%^* vs.
2008), EBITDA at EUR 99.4 million (14.4% of revenues, up from 12.4% in
2008) and EBIT at EUR 51.5 million (7.5% of revenues, compared with
7.0% in 2008). Before special items, EBIT at EUR 58.6 million (8.5% of
revenues, up from 6.2% in 2008). * Net profit at EUR 23.2 million, or
3.4% of revenues, versus a net loss of EUR 37.1 million in 2008. Net
profit from continuing operations at EUR 26.6 million (EUR 0.5 million
in 2008). * Net debt of EUR 181.6 million as of December 31, 2009, down
from EUR 253.1 million at the end of 2008 and EUR 198.6 million as of
September 30, 2009. * For 2010, the Company expects year-over-year
revenue growth of 2-4%^*, EBITDA margin improvement to 15-16% and a net
profit of EUR 33-37 million. Net debt is expected to be further reduced
to EUR 150 million by the end of 2010. * Strategic Plan for the
period 2010-2014 was approved by the Board of Directors. Revenue
expected to grow globally at an average of 3-5%*; in 2014 Gross Profit
at 61-63% of revenue and EBITDA margin in excess of 20% of revenue.
Highlights of the Plan will be presented to the financial community in
a meeting on Monday March, 22^nd, in Milan.

^* At comparable exchange rates.

* * *

The Board of Directors of Sorin S.p.A., meeting today under the
chairmanship of Rosario Bifulco, approved the 2009 financial statements and
the Strategic Plan for the 2010-2014 period.

“The final 2009 financial statements confirm the full achievement of our
targets; this solid financial basis will be the foundation for future
growth. The 2010-2014 Plan confirms the strategic guidelines previously
communicated, based on profitability and cash flow expansion and prepares
for accelerated growth in the future” said André-Michel Ballester, Chief
Executive Officer, Sorin Group.

CONSOLIDATED RESULTS FOR 2009

In 2009, Sorin Group reported revenues of EUR 689.0 million, up 5.2%^*
(+7.1% at actual exchange rates) compared with the previous year.

* The Cardiopulmonary Business Unit reported revenues of EUR 316.7
million, up 2.4%* (+4.6% at actual exchange rates) versus 2008, driven
mainly by the Heart-lung machines segment. During 2009 the company has
significantly strengthened its organizational structure, completing the
integration of the EVH (endoscopic vessel harvesting) business line.
The business unit has continued to its strategy of improved
profitability, through disciplined financial and inventory management.

(Euro million)              
FY 09 FY 08 % change
Revenues Revenues *
Heart-lung machines 63 57 7,4%
Oxygenators 188 188 -1,4%
Autotransfusion machines and 60 58 0,5%
devices

* The Cardiac Rhythm Management Business Unit increased revenues to EUR
255.6 million in 2009, up 9.1%* compared with 2008 (10.7% at actual
exchange rates), driven in particular by the High Voltage segment,
where the business unit has increased its market shares in all major
geographies. In the Low Voltage segment the business unit has
strengthened its presence in several European markets, becoming the
market leader in key markets such as France. Innovation and
manufacturing efficiency were key elements of the business unit
performance during the year.

(Euro million)              
FY 09 FY 08 % change
Revenues Revenues * High
Voltage (defibrillators and 76 67 12,5%
CRT-D) Low Voltage (pacemakers) 170 155
8,2%

* The Heart Valves Business Unit posted revenues of EUR 112.8 million in
2009. The year-over-year increase of 5.6%^* (7.5% at actual exchange
rates) versus 2008 is driven mainly by the strong expansion of tissue
valve sales in the main European markets and in the United States,
where the business unit has significantly gained market share. The
market decline of the mechanical valves segment has continued, in line
with expectations. During 2009, important milestones have been achieved
with the Perceval S^TM project, dedicated to the development of a
bovine pericardium self-expandable surgical valve. The enrollment of
180 patients in a clinical trial conducted at eight centers in Europe
has been successfully completed, with the objective of obtaining CE
mark approval in 2011.

(Euro million)              
FY 09 Revenues FY 08 Revenues % change * Mechanical heart
valves 60 61 -3,7% Tissue heart valves
47 39 20,5%

Gross Profit grew to EUR 384.3 million, or 55.8% of revenues, compared with
EUR 347.1 million, 54.0% of revenues, in 2008. This significant improvement
was due to the reduction in manufacturing costs and reflects the positive
impact of improved geographic and product mix.

Selling, general and administrative expenses (SG&A) were EUR 266.7 million,
38.7% of revenues, from EUR 254.6 million, 39.6% of revenues, in 2008.

Research and Development expenses grew to EUR 59.0 million, or 8.6% of
revenues, compared with EUR 52.4 million, or 8.1% of revenues, in 2008.

EBITDA increased to EUR 99.4 million, 14.4% of revenues, compared with EUR
80.0 million, 12.4% of revenues, in 2008.

EBIT increased by 14.2% at EUR 51.5 million (7.5% of revenues), compared
with EUR 45.1 million, 7.0% of revenues, in 2008. As detailed in the tables
below, EBIT was impacted in 2009 by provision for EUR 7.2 million
reflecting the tentative-settlement that the Company has reached with the
US Department of Justice, concerning a previously disclosed investigation.
This amount has not been included in the 2009 preliminary data, since at
that time the amount could not been estimated reliably, as communicated on
March 12^th, 2010.

Excluding special items, EBIT was up 46.2% at EUR 58.6 million, 8.5% of
revenues, compared with EUR 40.1 million in 2008, 6.2% of revenues.

Net profit rose to EUR 23.2 million (3.4% of revenues), compared to a net
loss of EUR 37.1 million in 2008. This amount is EUR 4.8 million less than
the previously communicated preliminary data, primarily reflecting the
above mentioned provision, after taxes. Profit from continuing operations
was EUR 26.6 million in 2009 vs. EUR 0.5 million in 2008. This improvement
reflected a significant reduction in financial expenses, at EUR 10.3
million, down from EUR 26.8 million a year earlier. This decrease is due to
a positive mark-to-market difference of our hedging portfolio (EUR 10.8
million) and to a reduction in the cost of servicing the debt (EUR 8.5
million), partially offset by other net financial expenses.

Net debt was EUR 181.6 million as of December 31, 2009, down from EUR 253.1
million at the end of 2008 (EUR 198.6 million as of September 30, 2009).
The net cash flow of EUR 71.5 million generated in 2009 reflects the
positive impact of improvement in profitability and the reduction in
working capital. Special items had a net positive impact of EUR 3.1 million
in 2009, as detailed in the tables below.

For 2010, the Company expects year-over-year revenue growth of 2-4%^*, an
EBITDA margin improvement to 15-16% of revenues, net profit at EUR 33-37
million. Net debt is expected to be further reduced to EUR 150 million by
the end of 2010.

* * *

The Board of Directors also approved the stand-alone statutory accounts of
Sorin S.p.A., which show a net profit of EUR 2.1 million (net loss of EUR
56.7 million in 2008). The Board of Directors has resolved to attribute the
2009 net profits to the legal reserve for EUR 0.1 and to carry forward the
remaining part of EUR 2.0 million.

* * *

Call of Shareholders Meeting

The 2009 draft financial statements approved by the Board of Directors of
Sorin S.p.A. will be submitted for approval at the annual shareholders’
meeting scheduled for April 27, 2010 (first call) and April 28, 2010
(second call), which will also address the proposal of nomination of the
new Directors recently co-opted by the Board pursuant to Article 2386 of
the Italian Civil Code, and about the renewal of the Statutory Board.

* * *

2010-2014 STRATEGIC PLAN

The Board of Directors has approved the 2010-2014 Strategic Plan, which
will be presented to the financial community in a meeting held on Monday,
March, 22^nd, in Milan, at the company’s Headquarters.

This Plan confirms the guidelines previously communicated to the market,
outlining a path towards sustainable growth in profitability and cash flow.
In the 5-year period, the company will strengthen its market leadership in
its core segments through continued technological innovation and strong
financial discipline with a particular focus on gross margin improvement.
The achievement of these goals, together with selective investments in
innovation and geographic expansion, are fundamental to achievement of
Sorin’s aspirational sales growth targets for the future.

2010-2014 targets

Sorin Group revenue is expected to grow globally at a 3-5%^*, 2009-2014
average growth rate.

In particular:

• The Cardiopulmonary Business Unit is expected in the period to post an
average annual growth of revenues of 1%-2%*, driven by geographical
expansion, in particular in emerging markets, by technological innovation
and by the continuing strengthening of the pipeline, also through
penetration in adjacent market segments with internally developed and
acquired technologies. The business unit will leverage in particular on its
global leadership position and on the significant installed equipment base
to support its share in disposable products.

• The Cardiac Rhythm Management Business Unit is expected to post an
average annual growth in the period at 6%-8%*, driven by market share gains
in the High Voltage segment, where new technologies and therapies will
become increasingly available, and, to a lesser extent, by the Low Voltage
segment, led by demographics and penetration in emerging countries. The
business unit will continue to focus on becoming the innovative leader in
hemodynamic management of heart failure.

• The Heart Valves Business Unit is expected to grow annually at an average
of 8%-10%, led mainly by US market penetration with tissue and repair
therapies as well as by the expansion of its tissue position in Europe,
whilst defending mechanical shares worldwide. Heart Valves continues to be
an attractive market driven by an aging population and by increased access
to care for a large number of patients currently not undergoing treatment.
New technologies will become available and Sorin will address this
innovative valve segment with a portfolio of new products specifically
addressed to cardiac surgeons (minimally invasive surgery).

Gross margin is expected to grow at 61-63% of revenues by 2014, thanks to a
comprehensive manufacturing cost reduction program and improved product
mix. This Program is focused on quality and design-to-cost, on the
procurement process and higher efficiency and productivity.

EBITDA is planned to exceed 20% of revenues by 2014, thanks to improvements
in gross margin and to the continuous commitment to cost control.

Net profit is expected to be EUR 60 - 80 million at the end of the Plan. In
2014 the company plans to have a positive net financial position and to use
the financial resources generated by the positive cash flow to focus on
growth acceleration.

* * *

Demetrio Mauro, the Corporate Accounting Documents Officer of Sorin S.p.A.,
declares, pursuant to Article 154 bis, Section, 2, of the Uniform Financial
Code, that the accounting information contained in this press release is
consistent with the data in the supporting documents, the books of accounts
and other accounting records.

* * *

In addition to the conventional indicators recommended by the IFRSs, this
press release provides alternative performance indicators. These indicators
should not be considered as replacements for the conventional indicators
recommended by the IFRSs, 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 Financial Statements as of 31^st
December 2009.

* * *

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 the capital
and financial markets, changes in commodity prices, changes in general
economic conditions, economic growth and other changes in business
conditions, changes in government regulations (both in Italy or abroad),
and many other factors, most of which are outside of the Group’s control.

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 3,500 employees worldwide, the Group focuses on three major
therapeutic areas that include: cardiopulmonary bypass (extracorporeal
circulation and autotransfusion systems), cardiac rhythm management, and
heart valve repair and replacement. Every year, over 1 million patients are
treated with the devices of Sorin Group in more than 80 countries.

For more information, please visit: www.sorin.com

* At comparable exchange rates.



CONSOLIDATED INCOME STATEMENT (Euro million)    
                       
        FY
FY % 2009
2008 Change                  
   
  Net Revenues 689,0
643,2 7,1%
  Cost of Product
(304,7) (296,1) 2,9% sold          
         
  Gross Profit
384,3 347,1 10,8% % of net revenues
55,8% 54,0%
  Selling, General & Administrative
(266,7) (254,6) 4,8% expenses % of net revenues
(38,7%) (39,6%)
  Research & Development
(59,0) (52,4) 12,6% % of net revenues
(8,6%) (8,1%)
  Special items
(7,1) 5,1 -                
   
  EBIT
51,5 45,1 14,2% % of net revenues
7,5% 7,0%                
   
  Interests (10,3)
(26,8) -61,7%
  Taxes
(14,6) (17,8) -17,9%            
       
  Net Result from continued operations
26,6 0,5 -
  Results from discontinued operations
(3,4) (37,6) -                
   
  Net Result
23,2 (37,1) -                  
   
 
                 
     
  EBITDA
99,4 80,0 24,2% % of net revenues
14,4% 12,4%
  EBIT before special items 58,6
40,1 46,2% % of net revenues 8,5%
6,2%



SPECIAL ITEMS IMPACT ON EBIT       (Euro million)      
       
FY FY  
2009 2008

       
       
  EBIT 51,5 45,1
  Special items (income)
/ charges   •
Disposal endovascular business -- (8,9)
  • Transaction with USA Justice Depart.
7,2 --   •
Acquisition EVH business (0,7) --
  • HV distribution agreement in Japan
(1,0) --   •
Litigations 1,0 5,1
  • Adjustments personnel funds
0,2 1,6   • ATS
litigation transaction -- (3,3)
  • Others
0,4 0,5   Total
special items 7,1 (5,1)
   
  EBIT before special items 58,6 40,1

CONSOLIDATED BALANCE SHEET      
(Euro million)        
31.12.2009 31.12.2008
Change
(*)          
 
  • Property, plant and 91,7 90,5
+1,2 equipment
  • Intangible assets and
314,0 305,8 +8,2 goodwill
  •
Investments in associated 1,3 1,1 +0,2
and other companies      
   
  Fixed assets 407,0
397,4 +9,6
  • Inventory 139,4
146,4 -7,0
  • Trade receivables
185,5 262,5 -77,0
  • Trade payables
(84,5) (114,7) -30,2
  • Other assets
(liabilities) (16,3) (10,2) +6,1    
     
  Working capital
224,1 284,0 -59,9
  •
Employee related provisions (23,9) (23,3) +0,6
  •
Other provisions (20,5) (22,5) -2,0  
       
  Net
invested capital 586,7 635,6 -48,9  
       
 
Net Indebitamento finanziario
financial netto (181,6) (253,1) -71,5
debt        
 
  Net equity Indebitamento finanziario 405,1 382,5
+22,6 netto        
   
  (*) Change in absolute value

CONSOLIDATED NET FINANCIAL DEBT    
(Euro million)            
      31.12.2009
31.12.2008 Change
(*)
         
   
  Non current financial assets -
- -
  Current financial assets - Receivables
for derivative financial 1,3 2,1 -0,7 instruments
- Other financial assets 6,3 41,4 -35,1
- Liquid funds 10,3 22,9 -12,6
         

  Total financial assets 17,9 66,4
-48,5       -
 
  Non current financial liabilities - Liabilities for
derivative financial (6,1) - +6,1 instruments -
Other non current financial (127,3) (4,8) +122,5
instruments
  Current financial liabilities - Liabilities for
derivative financial (0,2) (4,7) -4,5 instruments -
Other current financial instruments (65,9) (310,0) -244,1  
       
- Total financial
liabilities (199,5) (319,5) -120,0    
     
  Net
financial debt (181,6) (253,1) -71,5    
      - of
which current financial debt (48,2) (248,3) -200,1 -
of which non current financial debt (133,4) (4,8) +128,5    
  - - -
 
(*) Change in absolute value

CONSOLIDATED NET FINANCIAL DEBT - IMPACT OF SPECIAL ITEMS (Euro million)
           
       
31.12.2009 31.12.2008 Change
(Decrease)
/

Increase

           
 
Net financial debt 181,6 253,1 (71,5)
 
Special items cash out / (cash in )
  • Factoring w/o recourse
0,3
  • Restructuring charges
5,4
  • Clearglide (EVH) acquisition
0,8
  • Acquisition distributor in
2,5 Netherland
  • Sale of
intangibles for (1,0)
distribution agreement in Japan
  Net proceeds from working capital
• of Renal Care and Vascular Therapy
(20,6) business disposals
  • Price adjustment
on assets 4,0 disposals
  •
Litigations/Settlements/Others 5,5
 
  Total
special items (3,1)
 
  Change in
net financial debt before (68,4) special
items

NET FINANCIAL DEBT - MATURITY          
ANALYSIS (Euro million)          
         
  2010
2011 2012 2013 2014 TOTAL
beyond        
       
  EIB Loan (0,7)
(93,4) (94,1) Syndacated Loan (32,5) (30,4)
(62,9) Other medium-long term (1,0)
(0,6) (0,6) (0,5) (1,8) (4,5) loan Securitization &
factoring with (16,4)
(16,4) recourse Other short term
debt (15,3) (15,3) Net (payables)
receivables on
1,1 (1,4) (0,3) (4,4) (5,0) derivatives Other
financial assets 6,3 6,3 Cash
and cash 10,3 10,3
equivalents          
 
  Total (48,2) (32,4) (0,9) (0,5)
(99,6) (181,6)          
   
  Average duration 2,9 Year

SORIN S.P.A. - INCOME STATEMENT (Euro million)    
                 
       
 
FY FY %
2009 2008 Change              
       
  Net Revenues
12,6 13,3 -5,1%
  Other revenues and income
0,5 0,4 32,5%
  Purchases, services used and other costs
(14,7) (15,2) -3,2%
  Personnel expense
(7,6) (9,4) -19,6%
  Depreciation, amortization and writedowns
(1,5) (1,5) -              
     
  EBIT
(10,6) (12,4) -14,3%
  Interests - income (expense)
(7,2) (13,4) -46,0%
  Gains/(losses) from incestments in subsidiary
15,0 (33,7) n.a. companies          
         
  Profit (Loss) before taxes
(2,9) (59,5) -95,2%
  Taxes
5,0 2,8 78,6%          
         
  Net Result
2,1 (56,7) n.a.

[CT]

Kontakt: Martine Konorski Director, Corporate Communications Sorin Group
Tel: +33 (0)1 46 01 33 78 Mobile: +33 (0)6 76 12 67 73/+3902438114218
e-mail: martine.konorski@sorin.com or Carla Vidra Investor Relations Sorin
Group Tel: +39 02 69969716 e-mail: carla.vidra@sorin.com or Press Office
Image Building Simona Raffaelli Tel. + 39 02 89011300 e-mail:
sorin@imagebuilding.it

Pressekontakt:
BUSINESS WIRE
A Berkshire Hathaway Company
Sandweg 94 F
D-60316 Frankfurt a. M.
t. +49 (0)69-91 50 66-0
f. +49 (0)69-91 50 66-50
e. germany@businesswire.com
w. www.businesswire.de oder www.businesswire.com



vwd Vereinigte Wirtschaftsdienste AG
Tilsiter Straße 1
60487 Frankfurt am Main
Telefon: +49 69 50701-0
Telefax: +49 69 50701-126
E-Mail: info@vwd.com
www.vwd.comPermalink: http://www.ddpdirect.de/business_wire_sorin_group_reports_final_consolidated_results_for_2009_and_presents_2010-2014_56076.html (Dies ist eine über ddp direct verbreitete Pressemitteilung. Für denInhalt ist ausschließlich das herausgebende Unternehmen verantwortlich.) ddp direct - mehr Medien