Sorin Group Announces Final Financial Results for 2012

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Sorin Group Announces Final Financial Results for 2012

MILAN--(BUSINESS WIRE)-- Consolidated results for 2012:

  • Revenues were €731.1 million;
  • Adjusted net profit° was €41.9 million;
  • Net financial debt as of December 31, 2012 was down to €87.8 million,compared to €105.9 million as of December 31, 2011.

For 2013, the Company expects:

  • Cardiopulmonary to recover from the earthquakes and to grow revenues by approximately 10%* over 2012;
  • The remaining businesses to grow by 3-5%* over 2012;
  • Adjusted net profit° of approximately €55-60 million.

For the first quarter of 2013, Sorin Group expects revenues of approximately €178-180 million**.

* * *

At a meeting held today and chaired by Rosario Bifulco, the Sorin S.p.A. (MIL:SRN) Board of Directors approved the Draft of the 2012 Financial Statements.

"2012 final results are substantially in line with the preliminary figures published on February 7, 2013. In 2012 Sorin Group demonstrated the strength of its foundations in successfully recovering from the consequences of the earthquakes in Mirandola and in gaining shares in the CRM and heart valves markets, despite challenging industry dynamics" said André-Michel Ballester, Sorin Group's Chief Executive Officer. "In 2013 we are committed to continue executing on our longer-term growth strategy as confirmed by our recent acquisition of Alcard in Brazil and the further investment with option-to-buy in Enopace Biomedical" he added.

CONSOLIDATED RESULTS FOR 2012

In 2012, Sorin Group reported revenues of €731.1 million, a 1.7% decrease (as reported) compared to 2011. Revenues of the product segments not impacted by the earthquakes increased by 5.3% (as reported) or by 2.0%* at constant foreign exchanges over 2011. For a more detailed commentary refer to the press release on 2012 preliminary results dated February 7, 2013 and attached tables.

Gross profit in 2012 was €443.0 million, or 60.6% of revenues, compared to 60.2% of revenues in 2011. This improvement is mostly driven by a favorable product mix and ongoing manufacturing efficiency gains.

Selling, general and administrative(SG&A) expenses were €309.6 million compared to €290.1 million in 2011. Notwithstanding the earthquakes and in order to preserve the Company's ability to accelerate its recovery plan, Sorin Group did not reduce during the year its sales and marketing activities in the Cardiopulmonary Business Unit.

Research and development (R&D) expenses were €75.4 million compared to €70.1 million in 2011.

EBITDA was €101.8 millioncompared to €128.3 million in 2011. The Company estimates that the earthquakes had a negative impact on EBITDA of approximately €31 million for the full year of 2012.

EBIT was €36.9 million compared to €87.2 million in 2011. EBIT before special items was €58.0 million (€87.4 million in 2011). Special items, totalling €21.0 million for 2012, include restructuring charges for €7.9 million, non-recurring charges related to the earthquakes for €13.3 million and extraordinary expenses related to the write-off of in-process research & development for €7.5 million, partly balanced by the partial recovery from insurance coverage for the earthquakes of €13.75 million. The remaining non-recurring charges refer to business development activities and legal costs. As a subsequent event to the fourth quarter 2012 and 2012 preliminary results, the Company recorded as special item a €0.8 million charge following a voluntary field action on a discontinued product.

Financial charges amounted to €12.8 million compared to €7.3 million in 2011. The full-year 2012 incorporates a financial charge of €4.8 million for the unwinding of an over-hedging position resulting from a lower revenue level following the earthquakes. On a run-rate basis, interest expenses decreased by €1.4 million in 2012, mostly as a result of lower average debt.

Net profit was €23.0 million compared to €57.8 million in 2011.

Adjusted net profit° was €41.9 million compared to €58.0 million in 2011. The Company estimates that the negative impact on adjusted net profit related to the earthquakes amounted to approximately €20 million for the full-year 2012.

Net financial debt as of December 31, 2012 was down to €87.8 million, compared to €105.9 million as of December 31, 2011 (€89.1 million as of September 30, 2012). Improvement in working capital was partially offset by special items totalling €29.8 million. Special items include €38.0 million associated to business development initiatives related to the implementation of the Company's long-term growth strategy (see attached table for details).

In 2012, the Company generated €47.8 million of free cash flow***. Sorin Group estimates that the negative cash impact related to the earthquakes amounted to approximately €30 million, partially offset by the first installment of €10 million of the insurance coverage.

Guidance for the current fiscal year

For 2013, the Company expects:

  • Cardiopulmonary to recover from the earthquakes and to grow revenues by approximately 10%* over 2012;
  • The remaining businesses to grow by 3-5%* over 2012;
  • Adjusted net profit° of approximately €55-60 million.

For the first quarter of 2013, Sorin Group expects revenues of approximately €178-180 million°.

* * *

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 €70.4 million (€35.0 million in 2011), and proposed to allocate the profit to the legal reserve (€3.5 million) and retained earnings (€66.9 million).

* * *

Analyst and Investor Day

Sorin Group will hold its Analyst & Investor Day on October 1, 2013 in Milan. The time and location of the event will be communicated in the future. The meeting will also be accessible via audio webcast.

* * *

Buy-back plan

At today's meeting, the Board of Directors approved a resolution pursuant to Articles 2357 and 2357-ter of the Italian Civil Code and Article 132 of Legislative Decree no. 58 of February 24, 1998, to submit a proposal to the Shareholders' meeting to be convened, for the authorization of a new plan covering the purchase and disposal of the Company's shares, replacing the plan approved by the April 30, 2012 Shareholders' meeting which expires in October 2013.

The new authorization would be valid for a period of 18 months from the date of the Shareholders' resolution. The proposed plan would allow the purchase, in one or more transactions, on a revolving basis, of new treasury shares in order for the Company to own, if the purchase option is exercised and taking into account the shares already held, up to 10% of the share capital of Sorin S.p.A.

As of today, Sorin Group owns n. 2,626,813 own shares, corresponding to 0.55% of the Company's share capital, purchased on the market in accordance to the share buy-back program authorized by the Shareholders' meetings on September 14, 2010 and April 30, 2012.

The proposed plan provides for the purpose of stabilizing Sorin's share price and for the purchase of treasury shares to service existing and future share incentive plans for executives and/or employees and/or associates of Sorin S.p.A. or other companies of the Group.

The Board of Directors proposes that the share price for the purchases may be established from time to time for each transaction, provided that such price may not be higher or lower by 10% than the reference price recorded on the Stock Exchange in the trading session preceding each purchase transaction.

For any other information regarding the proposal, reference should be made to the Report of the Directors drawn up pursuant to Article 73 of the Issuer Regulations.

* * *

Call of the Shareholders' meeting

The 2012 consolidated draft financial statements approved by the Sorin S.p.A. Board of Directors will be submitted to the next Shareholders' meeting convened for April 30, 2013.

The Shareholders' meeting will also be called upon to pass a resolution in relation to the appointment of the Board of Statutory Auditors, of the Independent Auditors and in relation to the termination of a Director appointed pursuant to art. 2386 of the Civil Code. The Shareholders' meeting will also be called upon to pass a resolution regarding the proposal of a plan covering the purchase and disposal of treasury shares, as described above.

The Board of Directors has also approved for submission to the Shareholders' meeting: i) Report on Management compensation; and ii) a new "Long-Term Incentive 2013-2015" plan for executives and employees of Sorin S.p.A. and/or companies controlled by Sorin S.p.A.

The documentation required by prevailing laws and regulations in relation to the aforementioned matters and in relation to the proposals to be submitted to the Shareholders' meeting will be filed in accordance with the period required by law with the registered office of the Company along with the 2012 consolidated Financial Statements and the Report on Corporate Governance approved today by the Board of Directors.

The documentation will also be available on the Internet site: www.sorin.com.

* * *

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.

* * *

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, 2012.

* * *

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.

* * *

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, 2012 auditor's report of Sorin Group Financial Statements is still in progress.

* * *

About Sorin Group

Sorin Group (www.sorin.com), 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 visit:www.sorin.com

° Adjusted net profit: net profit before the after-tax treatment of non-recurring income and expenses (special items)
* At comparable exchange rates and perimeter
** Assuming exchange rates at levels of February 7, 2013 (see press release on 2012 preliminary results)
*** Free cash flow: net profit + depreciation, amortization and writedowns ± ∆ working capital - investments. This account is net of the impact of special items



Martine Konorski
Director, Corporate Communications
Sorin Group
Tel: +33 (0)1 46 01 33 78
Mobile: +33 (0)6 76 12 67 73
e-mail: martine.konorski@sorin.com
or
Francesca Rambaudi
Director, Investor Relations
Sorin Group
Tel: +39 02 69969716
e-mail: investor.relations@sorin.com

KEYWORDS:   Europe  Italy

INDUSTRY KEYWORDS:

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