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Synthes first half 2010: solid growth and improved profitability

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Published online 29 July 2010

WEST CHESTER, (PA), USA -- Synthes (SIX: SYST.VX) today announced its First Half Year 2010 financial results with sales and earnings growth of 10% and 11%, respectively (8% and 9% in local currency).

First Half 2010

  • Consolidated sales of US$ 1,803.9 million increased 10.3% (7.9% in local currency [LC]) vs. prior year (PY).
  • Net earnings of US$ 424.6 million; with growth of 9.3% in LC that exceeded sales growth.
  • Operating expenses as a percentage of sales (in LC) decreased by 110 bps (to 48.7%) vs. PY mainly due to ongoing productivity gain initiatives and lower legal expenses.
  • Income tax rate decreased by 0.9 pps to 28.6% due to continued tax planning efforts.
  • Free cash flow generation was US$ 344.2 million.
  • North America growth was fueled by good performances in Trauma and CMF, somewhat offset by the weaker performance of Spine.
  • Europe, Asia Pacific and Rest of World performance was strong with double-digit LC sales growth.

Second Quarter 2010

  • Consolidated sales of US$ 892.2 million increased 7.4% (6.9% in LC) vs. PY.
  • Ongoing economic conditions, coupled with pricing dynamics, continued to challenge growth in North America and Europe.
  • Asia Pacific's growth continued to be solid with double-digit sales growth despite government-mandated price reductions in Japan.
  • Rest of World gained momentum due to the first delivery of Middle Eastern tender order and improving distributor business in Latin America.
  • Synthes formally opened a new manufacturing facility in China which supports the Company's global mission of providing high-quality, innovative solutions to more surgeons and patients worldwide.

Michel Orsinger, President and CEO of Synthes, commented on the performance:
"Synthes' first half 2010 delivered solid top-line growth performance with growth in profits exceeding sales growth. While challenging economic and industry conditions continue to impact growth in our markets, the cost control measures that we have implemented have allowed us to improve our profitability."

To read the complete report, please click here

Source: Synthes

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