Grifols earns 36 million until June and places net debt according to balance sheet at 9,396 million

Confirms its forecasts for the year after restating its half-yearly accounts due to “incorrect accounting”

BARCELONA, 30 ()

Grifols closed the first half of the year with a reported net profit of 36 million euros, compared to losses of 70 million in the same period of 2023, while net profit excluding extraordinary items was 152 million, according to the company, which has confirmed its forecasts for the year.

In a statement sent to the National Securities Market Commission (CNMV) on Tuesday, the company explained that its net financial debt stood at 8.262 billion euros, according to the criteria of the credit agreement.

This amount does not include the impact of €1,134 million as of June 30, 2024 of financial obligations related to the leasing (rent) of plasma centers mainly (IFRS 16), so the net debt according to the balance sheet was €9,396 million.

The company closed the period with revenues of 3.444 billion euros, 7.5% more than in the previous year, and highlighted that in the second quarter there was a “9.3% acceleration in growth across all business units.”

Adjusted gross operating profit (EBITDA) was €791 million in the first half of the year, up 24.1% and with a 23% margin, reflecting the reduction in cost per litre in the second half of 2023 and greater absorption of fixed costs in the first half of this year.

Reported EBITDA was €724 million and a 21% margin, including €44 million of non-recurring transaction and restructuring costs and €22 million from the Biotest Next Level project.

The leverage ratio is reduced to 5.5x thanks to the improvement in EBITDA and the 1.6 billion euros obtained from its divestment in SRAAS, completed in June

The company has presented its results after acknowledging an “incorrect accounting” in its accounts related to its participation in the Chinese company Shanghai RAAS and the collaboration agreement with InmunoTek, so the comparative figures for the first half of 2024 have been restated, with no material impact on results, cash flow generation, or the leverage ratio.

However, this accounting adjustment has resulted in a reduction in net assets of 457 million euros.

Thus, at the request of the CNMV and after being reviewed and agreed with the new auditor (Deloitte), the company has included some adjustments in the balance sheet and in the income statement for years prior to June 30.

Before this information was communicated, the CNMV provisionally suspended, with immediate effect, the negotiation of Grifols shares, after its auditor Deloitte detected a “non-monetary accounting discrepancy” related to its participation in the Chinese company Shanghai RAAS, according to Bloomberg.

At the time of the suspension, Grifols shares were down 1.91% on the Ibex 35, trading at a price of 8.92 euros. When they returned to trading at 4:45 p.m., Grifols shares were down 2%.

GLANZMANN AND ABIA

The company’s CEO, Thomas Glanzmann, has explained that they reaffirm their forecasts for 2024 and that they remain focused on “executing the established strategy, which includes debt management.”

CEO Nacho Abia has highlighted that “positive free cash flow, significant sequential expansion of EBITDA and almost double-digit revenue growth have been achieved.”

“As we move into the second half of the year, we will remain laser-focused on operational excellence and disciplined cost management to further improve free cash flow generation and deliver sustainable profitability,” Abia added.

CASH FLOW

Grifols said that free cash flow generation “continues to be a priority” and that it stood at €57 million during the period, reflecting, it says, the start of the significant sequential improvement expected throughout the year.

As of June 30, and excluding the €1.6 billion from the sale of Shanghai Raas, Grifols had a liquidity position of €915 million, with a cash position of €568 million.

FORECASTS

The Catalan company expects revenue growth at the end of the year to be over 7% and biopharmaceutical revenue to increase by 8 to 10%.

It also forecasts an adjusted EBITDA of more than 1.8 billion euros and an adjusted EBITDA margin of between 25% and 26%.