Prudent management, especially in controlling costs has resulted in Sorin Group posting a significant profit increase in the face of slightly lower sales revenues, as reported in the company’s Q3 earnings report.
Sales revenues were down 2.5% in the quarter, although the company expects to report full-year revenue growth for 2011 of approximately 1% and net profit of €58-60 million, increasing by approximately 50% compared to 2010.
In the report, revenue from the Cardiopulmonary Business Unit is showing a 0.5% increase, while Cardiac Rhythm Management and Heart Valves show revenue shrinkage of 5% and 2.4% respectively. In the case of Cardiac Rhythm, this is attributed to general global slowdown in the CRM market and the absence of significant new product launches in the high voltage segment for Sorin Group during the first nine months of the year. However the company has recently announced CE mark approval and the European commercial launch of SonR, an innovative system for cardiac resynchronization therapy (CRT).
The slowdown in heart valve revenues is attributed to competitive activities limiting tissue valve penetration in the United States and in Europe in a global market which is seeing a move from mechanical to tissue valves. However the company reports that feedback from the physician community following the launch of the PercevalTM valve has been outstanding and in October, Sorin obtained CE mark approval for the new25mm iteration. Following conditional IDE approval, the Company will also initiate its clinical study for the Freedom Solo valve in the fourth quarter in the United States.
Commenting on the results, CEO André-Michel Ballester stated “As anticipated, the third quarter was a challenging quarter on the top line. However, thanks to our continuous focus on cost control, the Group exceeded for the first time 60% Gross Margin. We also demonstrated our commitment to long-term growth with targeted investments in the promising and fast growing heart failure market.”