Third Quarter 2011 Conference Call

Transcription

1 Third Quarter 2011 Conference Call 28 October, 2011 SORIN GROUP Presentation 1

2 DISCLAIMER This presentation contains management preliminary estimates and forward-looking statements, including information related to Sorin projected financial performance and the expected development of the med-tech industry, in particular in the cardiovascular segment. These statements are based on estimates and assumptions made by management of the company and are believed to be reasonable, as of this date, though by their nature future estimates are uncertain and difficult to predict. Actual results or experience could differ materially from the information contained herein. This communication does not constitute an offer or solicitation for the sale, purchase or acquisition of securities of any of the companies mentioned in any jurisdiction. SORIN GROUP Presentation 2

3 KEY ACHIEVEMENTS Financial Business Challenging top line 2.1%* decline vs Q Strong increase in profitability Gross Margin of 61.1% vs 58.9% in Q EBITDA Margin of 16.3% vs 14.3% in Q Net Profit up 47.5% to 12.1m R&D expenses increased to 9.9% of Revenues from 9.1% in Q Free cash flow of 9.8 million Net Debt of million due to unfavorable impact of special items Cardiopulmonary Estech s cannulae business acquisition Xtra gaining momentum Cardiac Rhythm Management CE mark and commercial launch of SonR Investment in Enopace Biomedical First enrollment in the ISIS-ICD clinical study Heart Valves CE mark for the new 25mm Perceval valve Conditional IDE for Freedom Solo * At comparable FX rates and perimeter Free cash flow: Net earnings + Depreciation & Amortization ± Working capital Capex. The item is net of impact from special items SORIN GROUP Presentation 3

4 Q RESULTS TOP-LINE PERFORMANCE: 171.4m (-2.1%)* Data in m and % Cardiopulmonary Q Revenues 79.6 Underlying growth* +0.5% Cardiac Rhythm Management % Heart Valves % * At comparable FX rates and perimeter SORIN GROUP Presentation 4

5 Q RESULTS CARDIOPULMONARY: 79.6 m (+0.5%)* Data in m and % Heart-lung machines Q Revenues 17.1 Underlying growth* +0.7% Oxygenators % Autotransfusion devices % Heart-lung machines Strong growth in Emerging markets, partially offset by a soft performance in the US Autotransfusion devices Strong growth from Europe, Emerging markets and Japan Successful launch of Xtra (Q1 in Europe, Q2 in the US) Oxygenators Solid performance in Emerging markets, offset by a negative case load trend in Europe and in the US Expansion of the high-end cannulae offering via the acquisition of Estech s business (July 1 st, 2011) Inspire (LinOx): CE mark expected in Q * At comparable FX rates and perimeter SORIN GROUP Presentation 5

6 Q RESULTS CARDIAC RHYTHM MANAGEMENT: 64.4m (-5.0%*) Data in m and % High Voltage Q Revenues 20.1 Underlying growth* -9.3% Low Voltage % Global market slowdown No product launches in high voltage (CRT-D) Continuous focus on new products: CE mark and commercial launch of SonR (October 2011) Enrollment in the ISIS-ICD clinical study to evaluate effectiveness of PARAD+ TM algorithm in minimizing inappropriate defibrillator shocks (October 2011) Remote Monitoring: CE mark expected in Q * At comparable FX rates and perimeter SORIN GROUP Presentation 6

7 HEART FAILURE A SIGNIFICANT UNMET CLINICAL NEED HF is the largest unmet clinical need - with the highest associated healthcare costs - in cardiovascular medicine today CRT-D are available for the treatment of patients with moderate to severe HF, but non-response remains a significant issue CRT effective but limited to systolic population and responders; no approved device therapies exist for diastolic patients Target population CRM HF Strategy HF prevalence Symptomatic (Class II, III, IV) Systolic Responders CRT indication SonR Non Responders Systolic HF Non-Responders Systolic HF CRT not indicated Diastolic HF Medically untreatable Not indicated for CRT Systolic HF Responders Paradym RF SonR CRT Enopace Diastolic Neuromodulation Target Population Paradym RF CRT SORIN GROUP Presentation 7

8 CRM HEART FAILURE STRATEGY SONR THE ONLY WEEKLY SELF-ADJUSTING CRT OPTIMIZATION SYSTEM Key features SonR uses a unique hemodynamic sensor embedded in the tip of the SonRtip atrial sensing/pacing lead Sensor real-time measurements are transmitted to the Paradym RF SonR CRT-D Every week, the system automatically optimizes to adapt to the patient s changing condition At rest and during exercise In out of clinic setting, during patient s real life conditions Benefits Allows for personalized CRT optimization, able to adapt to the patient s evolution and lifestyle Reduces the need for time consuming and expensive echo procedures The only CRT device with the potential to improve responder rates Potentially reduces HF hospitalizations Leads to better quality of life Alternative methods for optimization of CRT-D PERIODIC, AUTOMATIC, HEMODYNAMIC, AT REST AND EXCERCISE CRT OPTIMIZATION AV and VV optimization Weekly automatic optimization Optimization at rest and exercise Clinical efficiency SonR TM SmartDelay TM QuickOpt TM Only AV SORIN GROUP Presentation 8

9 CRM HEART FAILURE STRATEGY ENOPACE BIOMEDICAL Product overview Implantable neuromodulation system for congestive HF patients Innovative approach with percutaneous delivery and wireless stimulation implant Deal terms Transaction details Deal closed on October, 2011 $7.0 million investment for a minority stake Other major shareholder is Rainbow Medical Investment criteria Complements CRM product offering in HF Enter into an expected large and fast growing market Familiar technology to Sorin High quality management and technical team Rainbow s proven track record in developing innovative technologies Aortic Microstimulator implant Implantable Power Source Use of funds Product development and validation Initial clinical studies SORIN GROUP Presentation 9

10 Q RESULTS HEART VALVES: 26.9m (-2.4%*) Data in m and % Mechanical Valves Q Revenues 12.6 Underlying growth* -5.0% Tissue Valves % Mechanical Valves Sorin preserved its global market share Continued shift to tissue valves * At comparable FX rates and perimeter Tissue Valves Slowdown in surgical valves procedures Economic conditions Cannibalization of percutaneous valves in certain European countries Competitive activities in the US and in Europe Continuous focus on sales execution and new products CE mark for the 25mm Perceval valve (October 2011) Clinical study for the Freedom Solo valve to be started in the US in 4Q 2011 SORIN GROUP Presentation 10

11 Q RESULTS COST CONTAINMENT & INNOVATION Gross Profit SG&A R&D Data in m Data in m Data in m % % 58.9% 61.1% 41.2% 40.7% % 9.1% 9.9% Q Q Q Q Q Q Gross Profit increased 1% at comparable FX Gross margin exceeded for the first time 60% 220bps improvement driven by manufacturing efficiencies, despite negative FX impact and less favorable product mix Net of hedge accounting impact, SG&A totaled 40.5% in Q vs. 39.3% in Q Increase of R&D spending Remote Monitoring & SonR Clinical trials for Perceval and Solo valves Inspire manufacturing scaleup SORIN GROUP Presentation 11

12 Q RESULTS PROFITABILITY EBITDA EBIT Net profit Data in m Data in m Data in m % % 16.3% % +25.8% % % +47.5% % Q Q Q Q Q Q th quarter in a row of year over year EBITDA growth Excluding special items EBIT was also equal to 18.1m or 10.5% of revenues ( 15.5m or 8.6% in Q3 2010) Improved operating profit Run rate interest expenses down to 1.4m from 2.0m in Q Lower average net debt Lower spread applied to M/L term debt SORIN GROUP Presentation 12

13 Q RESULTS NET DEBT Net Debt Evolution Data in m /09/ /12/ /03/ /06/ /09/2011 Decrease in Net Debt of 33.9m in the last 12 months, despite the unfavorable contribution of special items for 11.1m Unfavorable impact of special items in 3Q 2011 for 30.5, including: Impact of fair value of hedging portfolio ( 14.6m) Business development activities ( 7.4m) Free cash flow generated in 3Q 2011 amounted to 9.8 Free cash flow: Net earnings + Depreciation & Amortization ± Working capital Capex. The item is net of impact from special items SORIN GROUP Presentation 13

14 FIRST NINE MONTHS 2011 & FULL-YEAR GUIDANCE FINANCIAL RESULTS Data in m, unless specified First 9 months 2010 First 9 months 2011 Change Revenues %* Gross Profit % of Revenues % % +1.1% EBITDA % of Revenues % % +9.5% Net Profit % of Revenues % % +60.8% For full-year 2011, Sorin expects to report revenue growth of approximately 1%* and net profit of million, increasing by approximately 50% compared to Full-year EBITDA margin is confirmed at approximately 17% * At comparable FX rates and perimeter SORIN GROUP Presentation 14

15 2012 CALENDAR OF EVENTS Date 9 February 15 March 23 April 30 April 30 July 20 September 24 September Event Preliminary 2011 Results Draft 2011 Financial Statements First Quarter 2012 Results Shareholders Meeting First Half 2012 Results BoD approval of Strategic Plan Analyst and Investor Meeting 31 October Third Quarter 2012 Results SORIN GROUP Presentation 15