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SORIN GROUP Presentation 1
André-Michel Ballester, CEO
Jefferies Global Healthcare Conference
London - November, 2014
SORIN GROUP Presentation 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 3
SORIN
AT-A-GLANCE
FY 13 Revenues - €738.5 million
65%
35%
By
business
Cardiac Surgery
Cardiac
Rhythm
Management
67.9%
18.9%6.6%
4.6%
Threadneedle (2%) Bios
Equinox Two
UnipolSai
Free float
52%
27%
9%
12%
By
geography
Note: Percentages may not add up to 100 due to roundings.
Shareholders’ structure
Global reach
Europe
North America
Japan
RoW
SORIN GROUP Presentation 4
WHERE WE WERE AND WHERE WE WANT TO BE:
“FROM VALUE TO GROWTH”
2008 2009 2010 2011 2012 2013 2014 2015 2018
Reorganize &
restructure
Drive profitability De-leverage
Opportunistic acquisitions
New growth strategy
Identify & executeIdentify technology platforms
Trigger geographic expansion
Consolidate & Re-allocateGrow base business
Invest in growth platforms and
Emerging markets
Accelerate growthMarket launch of new technologies
Emerging markets penetration
EXECUTION PHASE
2016
Today
2017
SORIN GROUP Presentation 5
CARDIAC SURGERY – CARDIOPULMONARY
GLOBAL LEADER
Revenues Products
* Underlying growth (at comparable FX rates & perimeter )
Data in €m
Full recovery of Oxygenators and ATS devices from 2012 earthquakes
Continuous geographic expansion
Record revenues in HLM
Successful Inspire-Heartlink-Connect launches
Cannulae growth: Estech, CalMed & BEL acquisitions
Acquisition of Alcard, Brasilian leading player in HLM
Greenfield project for CPB products in China
481.8
96.3
196.7
60.1
Cardiac Surgery
HLM
Oxygenators
ATS systems
+12.1%
+16.6%
+18.6%
+11.5%
FY13 Growth*
Key achievements
9m 14 Growth*
364.4
73.8
151.5
46.8
+5.6%
+16.7%
+5.1%
+7.7%
Heart-lung machines
Oxygenators Autotransfusion systems
SORIN GROUP Presentation 6
CARDIAC SURGERY GROWTH DRIVERS
INSPIRE-HEARTLINK-CONNECT: INNOVATIVE SOLUTION IN PERFUSION
New family of oxygenators: 6 & 8 lpm, integrated arterial filter, dual chamber reservoir
Increase oxygenator profitability
• Lower average manufacturing cost per unit
• Design-to-cost and lean manufacturing
Improved performance and best-in-class product
Gain at least 5 points of market share by 2018 leveraging system sell with Connect, Heartlink/GDP Monitor
Sorin’s IHC systemInspire key features
-2,00
-1,00
-
1,00
2,00 Oxy range
Set-up
Brackets
Ease of use
Safety
Gas exchange Heat Exchange
Reservoir perf,
Priming volume
Biocompatibility
Air handling
INSPIRE 6 AFFINITYCOMPETITOR
First and only perfusion system changing the standard
of care
• Link between HLM and disposables
• Innovative and unique functionalities
• Continuous and on-line monitoring of metabolic
parameters
• Improves ease of use and safety
SORIN GROUP Presentation 7
CARDIAC SURGERY - HEART VALVES
40 YEARS OF LEADING INNOVATIONS
Revenues Products
Key achievements
#2 Heart Valve global player in mechanical valves and #2 Heart Valve player in Europe
10% market share in aortic tissue valves in the US
Perceval growth: €12.1m in revenues in 2013
Supply agreement with Boston Scientific for the manufacturing of certain components of LotusTM Aortic Valve System
Key regulatory approvals and product launches in 2014:
• CE mark of CROWN PRTTM and MEMO 3D ReChord
• FDA approval for Mitroflow PRT and Solo SmartTM
* Underlying growth (at comparable FX rates & perimeter )
481.8
52.6
63.9
+12.1%
-4.9%
+6.2%
Cardiac Surgery
Mechanical Valves
Tissue Valves
Data in €m Growth*FY13 Growth*9m 14
364.4
36.1
47.2
+5.6%
-7.7%
+1.5%
Mechanical valves
Tissue valves
Annuloplasty rings
Sutureless valves
SORIN GROUP Presentation 8
CARDIAC SURGERY GROWTH DRIVERS
INNOVATION IN HEART VALVES
PercevalTM CROWN PRTTM Solo SmartTM
Sorin’s new generation of stented
valve
State-of-the-art hemodynamic and
durability performance
Phospholipid Reduction Treatment
Short rinse time
Enhanced ease of implant through
visible markers
Improved radiographic
visualization through dedicated X-
ray markers
The biological solution of choice
for aortic valve replacement
Over 6,000 implants in 250
centers world-wide and 32
countries
Over 7 years of clinical experience
Reimbursement in growing
number of countries (i.e., Belgium,
Germany, Czech Republic)
IDE trial on track
Evolution of the Freedom Solo
valve
• Over 4,000 implants and up to
8 years of clinical experience
Closest bioprosthesis to the native
aortic valve
• Removable Ni-Ti alloy stent
• Single suture line implant
technique
• No rinsing before implantation
SORIN GROUP Presentation 9
CARDIAC RHYTHM MANAGEMENT
FOCUS ON HEART FAILURE
ProductsRevenues
* Underlying growth (at comparable FX rates & perimeter)
253.9
92.0
150.9
-6.8%
-2.3%
-10.0%
CRM
High Voltage
Low Voltage
Data in €m Growth*FY13
Key achievements
Recent successful launches
• SonRTM in Europe & selected intercontinental countries
• Reply 200TM featuring Sleep Apnea Monitoring in Europe
• Kora 100TM MRI compatible pacemaker in Europe
• Intensia ICD and CRT-D with DF-4 connector
SonRTM IDE ongoing (RESPOND CRT)
JV with MicroPort to enter CRM Chinese market fully operational
Acquisition of Oscor leads business (including manufacturing facility in Dominican Republic) for $20m
Growth*9m 14
184.1
65.5
109.3
-2.2%
-3.2%
-3.0%
Pacemakers CRT-DDefibrillatori
High VoltageLow Voltage
SORIN GROUP Presentation 10
CARDIAC RHYTHM MANAGEMENT GROWTH DRIVERS
PRODUCT INNOVATION DRIVES PERFORMANCE
SonRTM Reply 200TM
The only weekly, self-adjusting
CRT optimization system
Reduces the need for time
consuming and expensive echo
procedures
Increases CRT responder rates
Potentially reduces HF
hospitalizations
FDA approval expected in 2016
Sleep Apnea: unmet clinical and
economic need
REPLYTM 200 automatically
screens patients for the risk of SAS
• Screening with high specificity
(85%) and high sensitivity (89%)
• Correlated with gold standard
Apnea-Hypopnea Index
• 6-month trend data
• Easy to program
FDA expected in 2015/16
KORA 100TM
MRI compatibility, automatic
switch and sleep apnea
• One flexible cardiology visit
• Limited time in asynchronous
mode
• Automatic switch to normal
mode
Japan approval expected by
end 2014
FDA expected in 2017
SORIN GROUP Presentation 11
EMERGING MARKETS
ACCELERATE GROWTH AND EXPAND LOCAL FOOTPRINT
Action plan & targets
Emerging markets and BRIC growing, respectively, by 20% and 25% at constant FX (FY2013)
Opening of branch in Russia (January 2013)
Alcard acquisition in Brazil (February 2013)
Joint Venture with MicroPort to enter Chinese CRM market (January 2014)
(*) The mix is calculated on sales of Base Business
Note: Emerging markets include: Medaf, Metip, China, Other Asia, Latin America, Eastern & Central Europe
Revenue target (FY 2018)
Recent achievements
Emerging markets
~25%
RoW
~75%
Key market opportunities: China, Brazil and Russia
Expand local footprint by establishing manufacturing presence and
performing R&D for local markets
China: CPB Greenfield operations and local partner
(MicroPort) in CRM
Brazil: Leverage Alcard acquisition and search local partner
to enter CRM
~25% of 2018 sales* from Emerging Markets
SORIN GROUP Presentation 12
EMERGING MARKETS
ACCELERATE GROWTH AND EXPAND LOCAL FOOTPRINT
Cardiac Surgery Greenfield CRM Joint Venture
Local manufacturing of Cardiopulmonary products
Total investment of approx. €18m over 7 years
Located in Suzhou Industrial Park (SIP)
• Top-tier international economic and
development zone
• Focus on high-tech and life sciences
Chinese domestic JV: MicroPort Sorin CRM
(Shanghai) Co. Ltd.
• Ownership: MicroPort (51%), Sorin (49%)
• Corporate governance: equal partners
• Registered capital: $20m cash injection
Business activity
• Import, sale and service of Sorin’s CRM
devices
• R&D and manufacturing of local CRM products
for the Chinese market
Operations started in June 2014
Leveraging complementary strengthes
Aligned vision, culture and strategy
SORIN GROUP Presentation 13
Enopace Equilia Intense
Aortic Baroreceptor Activation
(BAT)
Intra-Aortic Scaffold w/ Wireless
Transmission
$12m invested, 29% ownership
FIH in 2015
Expected launch 2016
Vagus Nerve Stimulation (VNS)
Implantable Stimulator plus Cuff
Lead
Around €10m invested, including
cash-out for Neurotech acquisition
FIH in 2014/2015
Expected launch 2016
Generation 2 VNS
Automaticity, Selectivity,
Personalized Therapy
Approximately €3m
Expected launch 2017/2018
NEW VENTURES GROWTH PLATFORMS
HEART FAILURE PROGRAMS
Large market to be created and developed
• Estimated market size of €0.2m in 2018 and €1bn in 2023
SORIN GROUP Presentation
Cardiosolutions HighLife Caisson
Mitral Spacer System
Transapical delivery
$13.1m invested, 32% ownership
FIH in 2015
Expected launch 2016
Mitral Replacement
Trans-atrial delivery
€4.5m invested, 27% ownership
Expected launch 2017
Mitral Replacement
Transfemoral delivery
$8m invested, 33% ownership
Expected launch 2018
14
NEW VENTURES GROWTH PLATFORMS
PERCUTANEOUS MITRAL PROGRAMS
Large market to be created and developed
• Estimated market size of €0.6m in 2018 and €1.2bn in 2023
SORIN GROUP Presentation 15
NEW VENTURES GROWTH PLATFORMS
PARTNERSHIP WITH RESPICARDIA
Transaction details
Deal signed on October, 2014
$20.0 million investment for a minority stake
Option-to-buy Respicardia in the future
Exclusive distribution right in selected European
countries; commercialization starting beginning
2015
Large and underserved market
First CE approved implantable device for treating
CSA
Familiar technology to Sorin
Significant operating synergies
Same implanter as for CRM (EP and HF physician)
High quality management and Scientific Advisory
Board
Deal terms
Use of
funds
Investment
rationale
On-going clinical validation of the
remedē® System
Founded in 2006 and headquartered near
Minneapolis (Minnesota, US)
Developer of implantable therapies to improve
Respiratory Rhythm ManagementTM
First fully implantable device for the treatment of
central sleep apnea (CSA)
Pacemaker-like device that delivers electrical pulses
via an implantable transvenous lead to the phrenic
nerve which restores a more natural, less disrupted
breathing pattern
CE Mark approved in 2010
Positive clinical results from
pilot study
FDA approved randomized,
controlled IDE pivotal trial
ongoing
The remedē® System
SORIN GROUP Presentation 16
STRATEGY
ACCELERATING LONG TERM GROWTH
Grow Base Business
Faster than Market
Base Business New Product
Geographic Expansion: Emerging Markets
New Ventures Growth
Platforms
Manufacturing Cost Reduction
& Operating Leverage
Bolt-on
Acquisitions
Accelerating long term growth
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