The pandemic has reduced Grifols’ operating profit or EBITDA by 500 million euros, as the company announced to its shareholders at the meeting held this morning in Sant Cugat.
Alfredo Arroyo, financial director of the company, explained that the reduction in EBITDA is due to the increase of 150 million euros in compensation to donors; due to an increase of 183 million euros in fixed costs because fewer donations increase the cost per liter, and 238 million euros due to a drop in sales because they did not have plasma to manufacture their products, despite the fact that demand has been maintained. The launch of the covid test only made it possible to partially reduce these higher costs, since it provided the group with an operating profit or EBITDA of 68 million euros.
Difficulties in the supply of plasma, from which it makes its blood products, weighed down the company’s results in the last two years: the decrease in donations due to the pandemic reduced its availability of plasma. Donations, however, have recovered and have already returned to pre-pandemic levels, as explained by the group’s co-CEO, Victor Grífols Deu. In May, the firm already announced that donations had increased by 16% at the start of 2022 compared to 2021, and now, Grifols assured, the recovery is even greater.
“These last two years have been difficult and we have confirmed the importance of diversifying our supply sources” recognized its CEO, Raimon Grifols, for which the firm has prioritized in its investments to increase its network of plasma centers. The group, explained Raimon Grifols, has reached 403 plasma donation centers around the world, and has incorporated a new model of openings with collaboration formulas with governments, which has allowed its entry into Canada and Egypt, where it already has a center underway and will reach 19. “France and Greece are now also beginning a shift towards these collaboration formulas with private companies because they have seen the importance of being self-sufficient in the supply of plasma,” explained Víctor Grífols Deu, who recalled that the group, leader in plasma collection in the world, is the firm best positioned to win these projects.
The firm continues to have the core of its supply in the United States, with 312 centers, but has incorporated 41 in China through its alliance with Shanghai Raas, and has become the leader in Europe with 57 centers in Germany, 18 in Hungary , 11 in the Czech Republic and 3 in Austria, of which 31 come from the purchase of the German company Biotest.
The recovery of plasma donations and sales will naturally reduce the group’s debt ratio, which today exceeds 6 times operating profit, assured Victor Grífols. The pandemic has reduced EBITDA by a third, leaving the usual 27% margin at approximately 19%, although underlying profitability has already recovered, which will allow the company to reach its objective of reducing debt below 4 “perhaps even at the end of 2023”, explained Raimon Grifols. When this is achieved, the company is committed to paying dividends again.
Grifols explained that the group has accumulated an investment of 1,450 million euros in the last five years, of which 281 million materialized last year. Now the company has investments worth 520 million euros underway, of which 394 correspond to the opening or acquisition of new plasma centers and the rest to innovation, mainly with the purchase of the American biotechs Alkahest and GigaGen.
Víctor Grífols Deu explained that the company has taken advantage of the pandemic to restructure its business, closing its less profitable businesses, which will produce structural savings of 100 million euros per year.
Raimon Grifols explained that the pandemic has led Europe to rethink its position regarding the participation of companies in plasma collection, with the aim of becoming self-sufficient (now only Germany and the United States are). In Spain, he explained, 60% of the plasma is imported. The Spanish government, with the agreement it has with Grifols to transform leftover plasma, earns 72 million euros a year, a figure that could be multiplied with more intense collaboration models, he assured.
