Grifols shares lead the Spanish stock market this morning, with a rise of 17% that reverses part of the 35% collapse they suffered yesterday, after the multinational clarified its investment plan that will absorb cash generation this year.
In a communication sent to the CNMV, the company explained that the operating profit or ebitda that it expects to generate this year, of more than 1,800 million euros, will allow it to generate a free cash flow of 900 million euros, 500 more than the year past, 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 273 million euros this year, and another 135 million in the next two. In total, the company will invest 620 million euros this year in improving and expanding its facilities, and will allocate another 125 million euros to R&D.
For the period 2025-2027, Grifols expects to generate 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 its German competitor Biotest.
This year 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 1.8 billion with the sale of its 20% stake in the Chinese company Shanghai RAAS to the Haier group. The company explained today to the CNMV that this firm, owned by the Chinese state, has successfully completed the ‘due diligence’ or accounting review of Shanghai RAAS. As explained by the president of the firm, Thomas Glanzmann, in a meeting with analysts, the closing of the operation is only pending approval from the Chinese authorities. In Spain, the sale was already approved in February by the National Markets and Competition Commission (CNMC).
Grifols experienced the biggest stock market crash in its history yesterday, amid investor nervousness after the Gotham City Research attacks and short sales by speculative funds. Investors were alarmed to see that the accounts were not audited, and had not been signed by one of the directors, James Costos, who according to the company had endorsed them but was outside Spain when the board met. Glanzmann pointed out in a conference with analysts that the group has a written commitment from KPMG to approve the accounts without qualifications and as they have been formulated, before March 8, and that only “administrative problems” had prevented KPMG from finishing preparing your report. In Spain it is common to present unaudited accounts, because the law allows the audit to be presented months later.
Glanzmann also explained in the meeting with analysts that after the incorporation of Nacho Abia as CEO, he himself will cease to be executive president in 2025 “to comply with good governance standards”, which separates the presidency and management. In a volatile session, this increased investors’ nervousness: 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 Steven F. Mayer to the management who was barely four months in office.
