Grifols shares led the Spanish stock market yesterday, with a rise of 17.5%, up to 8.9 euros, which reverses part of the 35% fall they suffered on Thursday, after the multinational clarified its plan to ‘investments that this year will absorb the cash generation.
In a communication sent to the CNMV, the company explained that the operating profit or ebitda it expects to generate this year, of more than 1.8 billion euros, will allow it to generate a free cash flow of 900 million euros, 500 more than last year, which will mainly be allocated to investments, especially to the opening of 28 plasma centers in the United States, together with ImmunoTek, a project agreed in 2021 in which it plans to invest this year 273 million euros, and 135 million plus the next two years. In total, the company will invest 620 million euros in the improvement and expansion of the facilities, and allocate a further 125 million euros to R&D.
For the period 2025-2027, Grifols explained to the CNMV that it expects to generate a free cash flow of between 2,000 and 2,500 million euros, not including the possible distribution of dividends, which it suspended in 2022, when it announced the purchase of the German competitor Biotest.
This 2024 Grifols will also allocate 450 million euros of the cash it generates to pay the interest on the debt, a figure that it expects to be lower than that of 2023 (when it was 515 million), because it will have amortized 1,800 million with the sale of its 20% stake in the Chinese company Shanghai RAAS to the Haier Group.
The company also explained yesterday to the CNMV that this company, in which the Chinese State participates, has successfully completed the due diligence or accounting review of Shanghai RAAS. As explained on Thursday by the president of Grifols, Thomas Glanzmann, in a meeting with analysts, the closure of the operation is only pending the approval of the Chinese authorities. In Spain, the sale was already approved in February by the National Markets and Competition Commission (CNMC).
Grifols experienced its biggest stock market drop in its history on Thursday, amid investor jitters after the Gotham City Research attacks and short selling by hedge funds.
Investors were alarmed when they saw that the accounts presented were not audited and had not been signed by one of the directors, James Costos, who, according to the company, had supported them but was out of Spain when the meeting was held. board of directors to approve them. Glanzmann explained that the group has a written commitment from KPMG to approve the accounts without conditions and as they have been formulated, before March 8, and that only administrative problems had prevented KPMG from completing the report. In Spain, it is common to submit unaudited accounts, because the law allows the audit to be submitted months later.
Glanzmann also explained that after the incorporation of Nacho Abia as CEO, he himself will cease to be executive chairman in 2025 “to meet the standards of good governance”, which separate the presidency and management. In a volatile session this raised investor jitters: it will be the third change in the group’s management after the departure of the Grifols family from executive positions at the end of 2022, which brought management to Steven F. Mayer, who he was in office for just four months.
