Sorin Group Announces Third Quarter 2009 Results: Continuous Improvement in Profitability and Cash-Flow

Third Quarter 2009 highlights:

• Consolidated revenues at € 162.1 million, up 6.2% ^* (8.4% at actual exchange rates) versus Q3 08;
• Gross Profit at € 91.7 million, 56.6% of revenues versus 53.1% in Q3 08;
• EBITDA at € 20.2 million, 12.5% of revenues versus 9.6% in Q3 08;
• Net Earnings at € 3.9 million, 2.4% of revenues versus a loss of € 15.3 million in Q3 08;
• Net Debt down to € 198.6 million as of September 30, 2009 versus € 209.8 million as of June 30, 2009 (€ 286.2 million as of September 30, 2008).

Following the third quarter results, Sorin Group (MIL:SRN) expects full year 2009 net sales to grow at 4-5%*, EBITDA margin to be at 14.0-14.5%, net profit to be at € 23-27 million and net debt to be below € 200 million.

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Pursuant to IFRS 5, 2008 results have been reclassified to ensure comparability of data following the sale of the Vascular Therapy and Renal Care Business Units in 2008.

The Board of Directors of Sorin S.p.A., meeting today under the Chairmanship of Rosario Bifulco, approved the results for the Third Quarter of 2009.

“We are satisfied with our operational and financial achievements in the quarter. They confirm the growing acceptance of our innovative product portfolio with the medical community across the globe. Thanks to robust financial discipline and to continued strong focus on innovation we are confident we will achieve the long-term targets of our Strategic Plan”, said Chief Executive Officer André-Michel Ballester.

In the third quarter 2009, Sorin Group posted revenues of € 162.1 million, up 6.2% ^* (8.4% at actual exchange rates) from the same period in 2008, driven by the positive performance of its three business units, in all major geographies.

• The Cardiopulmonary Business Unit (Heart-lung machines, extra-corporeal and Autotransfusion blood circulation systems) posted revenues of € 75.1 million, up 2.4%* compared with the same quarter last year, driven by strong growth in Heart-lung machines. In the Oxygenators segment, Sorin is maintaining its market share globally. The Business Unit is now investing more R&D resources in order to streamline its manufacturing operations both in Europe and in North America and to further enhance the performance of its Oxygenator and Autotransfusion product lines;

		3Q 09 revenues		3Q 08 revenues		% change *
Heart-lung machines		16		14		14.0%
Oxygenators		43		45		-4.2%
Autotrasfusion machines		14		13		2.4%

• The Cardiac Rhythm Management Business Unit (implantable devices to manage cardiac rhythm disorders) posted revenues of € 60.7 million, up 10.3%* compared with the same period in 2008, driven, as in preceding quarters, by solid revenue growth in Japan and in key European countries. Sales were strong in particular in the High Voltage segment where the newly introduced Paradym ^TM family is gaining share across Europe thanks to its unique features. Low Voltage sales (Symphony ^TM, Reply ^TM, Esprit ^TM and Facil ^TM families of pacemakers) are reflecting the increased acceptance in Europe and Japan of Reply ^TM, the smallest pacemaker available in the world; the company also announced in the quarter the introduction of the Reply ^TM family of pacemakers in Canada and of new models of Reply ^TM and Facil ^TM pacemakers in Japan;

		3Q 09 revenues		3Q 08 revenues		% change *
High Voltage (defibrillators and CRT-D)		18		15		16.0%
Low Voltage (pacemakers)		41		36		9.9%

• The Heart Valves Business Unit (mechanical and tissue heart valves, and valve repair products) posted revenues of € 25.4 million, up 8.3%* compared with the same quarter in 2008. Sales in the mechanical valves segment were impacted in Q3 09 both by the continuous erosion from biological valves in the market and by the impact of the discontinuation of an old mono-leaflet product line. Sorin’s tissue valves continue gaining share globally and in particular in the US thanks to the growing penetration of the Mitroflow ^TM valve. Enrolment in the minimally invasive “Perceval S ^TM” aortic tissue heart valve CE mark clinical trial continues to progress on schedule and will be completed in Q4 2009.

		3Q 09 revenues		3Q 08 revenues		% change *
Mechanical Heart Valves		12		13		-8.5%
Tissue Heart Valves		12		9		34.0%

Gross Profit grew 15.5% to € 91.7 million, 56.6% of revenues (53.1% in Q3 08), as a result of the positive effects of the manufacturing cost reduction programs in progress and an improved revenue mix. The reduction of manufacturing costs remains one of the main strategic priorities for Sorin Group. Among various initiatives, the company started, in Q3 09, production in its state-of-the-art new CRM manufacturing and R&D facility located in Clamart (France).

Selling, General and Administrative (S,G&A) expenses were € 65.7 million, slightly down as a percentage of revenues to 40.5% versus 40.6% in Q3 08.

Research & Development (R&D) grew 25% in the quarter to 10.0% of revenues (€ 16.3 million), from 8.7% reported in Q3 08. Thanks to its increased profitability, the Group is able to invest more for long-term growth, focusing in particular on key projects: new Heart Failure algorithms and Remote Monitoring in CRM, the promising Perceval S ^TM minimally invasive heart valve and innovative and more cost efficient products lines in Cardiopulmonary.

EBITDA showed strong 40.7% growth to € 20.2 million (12.5% of revenues) compared with € 14.4 million (9.6% of revenues) in Q3 08, thanks to the combined effect of increased sales and gross margin expansion.

EBIT grew to € 9.7 million (6.0% of revenues), versus € 2.6 million (1.8% of revenues) in Q3 08. Before special items, EBIT was € 9.8 million (6.0% of revenues) compared with € 5.7 million (3.8% of revenues) in Q3 08. An analysis of special items is provided in the attachments.

Net Financial Charges were € 1.8 million, versus € 12.3 million in Q3 last year. In Q3 2008, financial charges were negatively impacted by € 7.4 million coming from the mark-to-market adjustment of the hedging portfolio of exchange and interest rates risks.

Net Earnings were € 3.9 million, equal to 2.4% of revenues, versus a loss of € 15.3 million in Q3 08.

Net Financial Debt as of September 30, 2009 decreased to € 198.6 million, versus € 209.8 million as of June 30, 2009 and € 286.2 million as of September 30, 2008. This strong operating cash flow generation is driven by improved profitability and more efficient working capital management. Over the last 12 months debt reduction was € 87.6 million, of which € 13.2 million from special items (see attached table).

In the first nine months of 2009 Sorin posted Revenues of € 512.2 million, up 5.8% ^* (9.8% at actual exchange rates) versus the same period last year, an EBITDA at € 68.7 million (vs. € 52.3 million in the first nine months of 2008), an EBIT before special items at € 38.1 million (vs. € 26.0 million in the first nine months of 2008). The net profit of the period was € 17.8 million (vs. a loss of € 0.9 million in the first nine months of 2008).

Following the third quarter results, Sorin Group expects full year 2009 net sales to grow at 4-5%*, EBITDA margin to be at 14.0%-14.5%, net profit to be at € 23-27 million and net debt to be below € 200 million.

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The Board of Directors acknowledged that Mittel S.p.A., Equinox Two S.c.A., Hopa S.p.A., MPS Investments S.p.A. and Unipol Gruppo Finanziario S.p.A. subscribed on October 12, 2009 a Shareholders’ Pact concerning the respective shares directly or indirectly held in Sorin S.p.A.. A notice containing an excerpt of the Shareholders‘ Pact was published pursuant to applicable regulations on 21 October 2009 in a major Italian newspaper. This notice can be also downloaded from the Company’s web site www.sorin.com. The Shareholders’ Pact concerns n. 178,048,423 shares, equal to 37.85% of Sorin share capital. As a consequence and subject to the entry into force of the pact (conditional upon receipt, by December 1st, 2009, of authorizations from the relevant Antitrust Authorities) Mittel S.p.A., Equinox Two S.c.A. and Hopa S.p.A. will promote through a Newco, to be named BH Holding S.p.A., (jointly controlled, pursuant to art. 2359.1, n.1, Civil Code from Mittel and Equinox and participated by Bootes S.r.l., a company controlled by the Chairman of the Board of Directors of Sorin S.p.A., and from Hopa S.p.A., through the controlled company Earchimede S.p.A.) a mandatory Tender Offer on Sorin S.p.A. entire share capital, pursuant to art. 106 and 109 of the Law Decree n. 58/98.

Declaration

The manager responsible for preparing 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 document results, books and accounting records.

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Disclaimer

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 government regulation (in each case, in Italy or abroad), and many other factors outside of the Group’s control.

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About the Sorin Group

Sorin Group ( www.sorin.com) is a global 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 3,500 employees worldwide, the Group focuses on three major therapeutic areas: cardiopulmonary bypass (extracorporeal circulation and autotransfusion systems), cardiac rhythm management, and heart valve repair and replacement. Each year, over 1 million patients are treated with the devices of Sorin Group in more than 80 countries.

For more information, please visit: www.sorin.com or contact:

^* At comparable exchange rates