The stock market shoots up more than 15% around 12:30 p.m.
Grifols has informed the National Securities Market Commission (CNMV) this Friday that the period contractually established by the parties in relation to the performance of the confirmatory ‘due diligence’ by Haier has concluded with a “satisfactory” result.
Specifically, Grifols and Haier had signed a strategic alliance agreement and share purchase contract to transfer approximately 20% of the shareholding in Shanghai RAAS Blood to Haier.
The blood products company has highlighted that the closing of the transaction is subject to obtaining the pending ordinary regulatory approvals and has estimated that the transaction is expected to close during the first half of this year.
The firm published this Thursday in the presentation of its unaudited results that the income from the sale of 20% of Shanghai Raas to the Haier Group – some 1.6 billion euros – will be used entirely to repay debt.
The operation contemplates the sale of 20% of the shares of the Chinese company to the technology group for about 1.8 billion US dollars (almost 1.63 billion euros).
The executive president and CEO of Grifols, Thomas Glanzmann, announced this Thursday in the meeting with analysts that the ‘due diligence’ of the sale of Shanghai Raas to Haier Group had already been completed and that the operation is only pending the approval of the regulatory authorities.
Glanzmann reiterated that the funds obtained will be entirely used to pay the company’s debt, while the financial director of Grifols, Alfredo Arroyo, explained that the best scenario that the company contemplates for the current year is to achieve a debt/Ebitda ratio 4x or 4.5x at the end of the year.
This ratio will be achieved both by the estimated increase in the adjusted gross operating result (Ebitda) – which the company has estimated this Friday at 1,800 million in its ‘guidance’ for 2024 – and by possible divestments.
The company estimates that the ratio will be 5.4x when the sale of 20% of Shanghai Raas is closed, and Arroyo noted that they are working on “potential divestments.”
In any case, Arroyo said that the 4x or 4.5x ratio should be achieved organically and, if they occur, adding possible sales later.
Grifols shares rose on the Ibex 35 by 15.64% after midday, until its shares were exchanged at a price of 8.770 euros, after closing yesterday with a collapse of 35%, the lowest of 2012, after presenting its unaudited accounts. .
In mid-February, in the first phase, the National Markets and Competition Commission (CNMC) authorized the purchase of 20% of Grifols’ stake in Shanghai RAAS Blood by Haier, through its subsidiary Qingdao Medical Haier Medical Technology.
In this way, the body chaired by Cani Fernández gave approval to the operation notified by Haier on February 7, perceiving that there were no problems for competition.
FREE CASH FLOW OF 485 MILLION IN 2024
Grifols expects to register a free cash flow of 485 million euros in 2024, excluding extraordinary items, as reported this Friday by the company, which highlights that it is expected to be “temporarily” affected, mainly by ‘capex’ (investment in the fixed assets) of extraordinary growth related to the pre-existing agreement with ImmunoTek.
The company has stressed that following the publication of its 2023 financial results, which have not yet been audited by KPMG, “it aims to provide greater clarity on the expected free cash flow from 2024 onwards.”
In this sense, the blood products company has indicated in a statement sent to the National Securities Market Commission (CNMV) that its cash flow generation increased in 2023 due to “a strong business boost”, accelerating in the second half of 2023.
Therefore, Grifols has estimated that it expects operating cash flow generation before extraordinary items to increase in 2024 by nearly 500 million euros, reaching approximately 900 million euros, mainly driven by an improvement in gross operating income ( Ebitda) and lower consumption of working capital.
In this sense, Grifols’ guidance for 2024 estimates recording an adjusted Ebitda of more than 1.8 billion euros, as well as a free cash flow of 5 million euros.
In the coming years, Grifols is expected to “significantly” improve its ability to generate positive cash flow thanks to the improvement in operating cash flow and the containment of capex and investments.
For the period between 2025 and 2027, Grifols expects to generate free cash flow (before dividends) in the range of 2,000 to 2,500 million euros.
For its part, in 2021 the company closed a collaboration agreement with the American company ImmunoTek for the opening of 21 plasma donation centers with a capacity to obtain one million liters per year.
2023 RESULTS
Grifols obtained a profit of 59.3 million euros in 2023, which represents a decrease of 71.5% compared to the profits of 208.3 million recorded in the previous year, while recording record income of 6,592 million, 8.7% more.
The Catalan firm, which has also achieved a reduction in its leverage, has highlighted that its net profits include “non-recurring items worth 147 million euros related, mainly, to restructuring costs”, as they explained to Europa Press company sources.
The firm, which presented its unaudited results, has assured that “it has received written confirmation from KPMG that it expects to complete its internal procedures and issue its audit opinion before March 8, 2024, ahead of the legislation deadline. current Spanish”.
Likewise, Jaime Costos, current member of the board of directors of Grifols, has not signed the annual accounts published this Thursday by the blood products company as he was absent “for personal reasons” at the board of directors meeting held yesterday in Barcelona.
However, the company has assured that Costos has not expressed “dissatisfaction or opposition with the documentation sent,” as explained to the CNMV.
