Sorin revenues down in 2012
For the year 2012, Sorin has reported revenues of EUR 731.1 million, a 1.7 per cent decrease (as reported) compared with 2011. Revenues of the product segments not impacted by the earthquakes increased by 5.3 per cent (as reported) or by 2.0 per cent at constant foreign exchanges over 2011.
Gross profit in 2012 was EUR 443.0 million, or 60.6 per cent of revenues, compared with 60.2 per cent of revenues in 2011. This improvement is mostly driven by a favourable product mix and ongoing manufacturing efficiency gains. Selling, general and administrative expenses were EUR 309.6 million compared with EUR 290.1 million in 2011. Notwithstanding the earthquakes and in order to preserve the company's ability to accelerate its recovery plan, Sorin did not reduce its sales and marketing activities in the cardiopulmonary business unit during the year. R&D expenses were EUR 75.4 million compared with EUR 70.1 million in 2011.
EBITDA was EUR 101.8 million compared with EUR 128.3 million in 2011. The company estimates that the earthquakes had a negative impact on EBITDA of approximately EUR 31 million for the full year of 2012. EBIT was EUR 36.9 million compared with EUR 87.2 million in 2011. EBIT before special items was EUR 58.0 million (EUR 87.4 million in 2011). Special items, totalling EUR 21.0 million for 2012, include restructuring charges for EUR 7.9 million, non-recurring charges related to the earthquakes for EUR 13.3 million and extraordinary expenses related to the write-off of in-process R&D for EUR 7.5 million, partly balanced by the partial recovery from insurance coverage for the earthquakes of EUR 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 EUR 0.8 million charge following a voluntary field action on a discontinued product.
Financial charges amounted to EUR 12.8 million compared with EUR 7.3 million in 2011. The full-year 2012 incorporates a financial charge of EUR 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 EUR 1.4 million in 2012, mostly as a result of lower average debt.
Net profit was EUR 23.0 million compared with EUR 57.8 million in 2011. Adjusted net profit was EUR 41.9 million compared with EUR 58.0 million in 2011. The company estimates that the negative impact on adjusted net profit related to the earthquakes amounted to approximately EUR 20 million for the full-year 2012.
Net financial debt as of 31st December 2012 was down to EUR 87.8 million, compared with EUR 105.9 million as of 31st December 2011 (EUR 89.1 million as of 30th September 2012). Improvement in working capital was partially offset by special items totalling EUR 29.8 million. Special items include EUR 38.0 million associated to business development initiatives related to the implementation of the company's long-term growth strategy.
In 2012, the company generated EUR 47.8 million of free cash flow. Sorin estimates that the negative cash impact related to the earthquakes amounted to approximately EUR 30 million, partially offset by the first installment of EUR 10 million of the insurance coverage.
For 2013, the company expects:
â¢ cardiopulmonary to recover from the earthquakes and to grow revenues by approximately 10 per cent over 2012;
â¢ the remaining businesses to grow by 3 to 5 per cent over 2012; and
â¢ adjusted net profit of approximately EUR 55 to 60 million.
For the first quarter of 2013, Sorin expects revenues of approximately EUR 178 to 180 million.