In short
In what its boss admits was a challenging year for Sorin, the company’s revenues showed a tiny overall growth of c1%, but a significant ramp at the bottom line with net profitability up by almost 50% to €58M.
Background
According to a company press release, which can be found here, Sorin’s overall revenue picture had a combination of highlights and lowlights, with the decrease in its rhythm management business offsetting healthy gains in cardiopulmonary and valve businesses. The result was a modest overall revenue growth of 1%, yet an increase in gross profitability drove a bottom line growth of 48.5% over prior year. 2011 was the first year in which the company achieved a gross margin of over 60%, reflective of the mix of products sold.
According to the release, the three business areas seem to have been impacted mostly by new products.
Cardiopulmonary products
Sales of heart-lung machines and the new Inspire Oxygenator contributed to growth of 4.2% over prior year.
Heart Valves
A 1.5% increase compared to 2010 came from traditional tissue valves, boosted by the launch of the Perceval sutureless derivative, coupled with penetration into the emerging markets. Sales gains in USA helped offset the slowdown in the European market.
Cardiac Rhythm Management (CRM)
A 2.9% revenue decrease was blamed on a general market slowdown and no new product launches in the first 9 months of the year.
2012?
The company is sounding optimistic for 2012, forecasting revenue growth of 2-4% and profit growth of 5-10% for the year.
Company comments
“2011 was a challenging year for the top line, particularly in CRM. In contrast, the Company strengthened its global leadership position in Cardiopulmonary and was able to significantly grow its net profit by around 48%. In 2012 we are committed to continue sustaining our longer-term growth strategy with further geographic expansion initiatives and additional investments in innovation”, stated Sorin Group’s Chief Executive Officer, André-Michel Ballester.
Source: Sorin Group