The multinational blood products Grifols earned 59 million euros last year, 71% less than the previous year, as announced to the National Securities Market Commission. The group, which suffered a stock market collapse in January due to the attack by the bearish fund Gotham City Research, explained that the 2023 results suffer the impact of the costs of its restructuring, which reached 147 million euros, but it continues the recovery of its profitability after the deterioration it suffered during the pandemic and announced a strong increase in its margins this year, which will place the operating profit or EBITDA above 1,800 million euros.
The improvement in margins and business forecasts, however, did not convince the market and by mid-morning the shares fell by more than 9%, to 10.5 euros.
The Grifols family group, now chaired by Thomas Glanzmann, announced that revenues reached 6,592 million euros, a record figure that exceeded last year’s 6,064 million euros by 11% at constant exchange rates (without taking into account the changes in the exchange rate of the euro with respect to the dollar, mainly). Excluding the currency impact, revenue growth would have been 9%. The main division of the group, called Biopharma, related to the manufacturing and marketing of medicines derived from plasma, earned 5,558 million euros, 13.3% more at constant exchange rates.
Operating profit or adjusted EBITDA closed the year at 1,474 million, 22.4% of sales, compared to the 20.1% reported in 2022, with a recovery in the group’s profitability after the deterioration of the margins suffered by the increased plasma supply costs during the pandemic. EBITDA reached 26.1% in the fourth quarter (excluding its German subsidiary Biotest).
Adjusted Ebitda excludes €223 million of extraordinary expenses, mainly comprising €159 million of restructuring costs. Without considering these charges, the EBITDA would be 1,251 million euros, which represents a margin of 19.0%.
Donations of plasma, the raw material necessary to produce their medicines, continued their recovery, and grew by 10% last year, while the average cost per liter decreased by 22% compared to the maximum recorded in July 2022.
The effects of the restructuring and the fall in the price of its raw materials have led the group to improve its results forecasts for this year: it expects its income to rise by 7%, led again by the Biopharma division, which is expected to grow between 8% and 10%. The big change, however, will be the improvement in profitability: the firm foresees that the operating profit or ebitda will be between 27% and 28% of revenues (not including its German subsidiary), and that it will exceed 1,800 million euros.
Grifols closed 2023 with a net financial debt of 9,420 million, which increases slightly compared to the 9,191.3 million in 2022, and has reduced its weight in the group’s accounts to 6.3 times its ebitda (last year this ratio was 7.1 times). The firm’s debt skyrocketed in 2021 due to the impact of the purchase of Biotest, and reached 9 times the ebitda, due to the associated effect of the deterioration of margins due to the pandemic.
The group confirmed that its priority continues to be reducing debt. For this reason, the 1,800 million euros that will be earned from the sale of 20% of Shanghai RAAS to the Haier Group will be used to amortize debt, which will place it at 5.4 times its EBITDA. The group will take advantage of this income to advance the payment of its debt. Thus, he noted, “Grifols expects to meet its 2025 maturities in the first half of 2024.”
The group highlighted that it has a high level of liquidity, of 1,141 million euros, including a cash position of 526 million.
Grifols’ stock has fallen 24.6% this year due to the attack it suffered from the vulture fund Gotham City Research, which accused it of falsifying its accounts and of conflict of interest for the benefit of Scranton, a company owned by Grifols. Grifols family. After the publication of the report, the price fell by 42%, but since then it has increased by 43%.
The company remains in the crosshairs of the bears. In Spain, the hedge funds World Quant (0.51% of share capital) and Qube Research have declared short positions to the CNMV
