Grifols Q1 Results: On Track for Guidance and Debt Reduction

Ticker: GIKLY · Form: 6-K · Filed: May 14, 2024 · CIK: 1438569

Grifols SA 6-K Filing Summary
FieldDetail
CompanyGrifols SA (GIKLY)
Form Type6-K
Filed DateMay 14, 2024
Risk Levellow
Pages15
Reading Time18 min
Key Dollar Amounts$150m
Sentimentbullish

Sentiment: bullish

Topics: results, guidance, debt-reduction

Related Tickers: GRF, GRF.P, GRFS

TL;DR

Grifols hitting Q1 targets, on pace to cut debt and meet full-year guidance.

AI Summary

Grifols, S.A. reported its First Quarter 2024 Financial Results on May 14, 2024, indicating they are on track to meet full-year guidance and reduce debt. The company, a leading manufacturer of plasma-derived medicines, provided a business update alongside these results. Specific financial figures for the quarter were not detailed in this excerpt, but the overall tone suggests progress towards financial targets.

Why It Matters

This filing indicates Grifols is progressing towards its financial goals for the year, which could impact investor confidence and the company's future financial stability.

Risk Assessment

Risk Level: low — The filing reports positive progress towards financial guidance and debt reduction, suggesting a stable outlook.

Key Players & Entities

  • Grifols, S.A. (company) — Registrant and global healthcare company
  • May 14, 2024 (date) — Date of press release and earnings presentation
  • 2024 First Quarter (date) — Period for financial results

FAQ

What are Grifols' key financial achievements for the First Quarter of 2024?

The filing states that Grifols is on track to meet its full-year guidance and reduce debt, as reported in their First Quarter 2024 Financial Results.

When were the First Quarter 2024 results reported?

The First Quarter 2024 Financial Results were reported on May 14, 2024.

What is Grifols' primary business?

Grifols is described as a global healthcare company and a leading manufacturer of plasma-derived medicines.

What is the filing form type?

The filing form type is a 6-K, Report of Foreign Private Issuer.

Where is Grifols' principal executive office located?

Grifols' principal executive office is located in Sant Cugat del Valles, Barcelona, Spain.

Filing Stats: 4,513 words · 18 min read · ~15 pages · Grade level 13 · Accepted 2024-05-14 13:17:38

Key Financial Figures

  • $150m — vables mainly driven by the timing of a $150m commercial payment from China delayed t

Filing Documents

Forward-Looking Statements

Forward-Looking Statements This presentation contains forward-looking information and statements about Grifols based on current assumptions and forecast made by Grifols management, including pro forma figures, estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to capital expenditures, synergies, products and services, and statements regarding future performance. Forward-looking statements are statements that are not historical facts and are generally identified by the words “expected”, “potential”, “estimates” and similar expressions. Although Grifols believes that the expectations reflected in such forward-looking statements are reasonable, various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the Company and the estimates given here. These factors include those discussed in our public reports filed with the Comisión Nacional del Mercado de Valores and the Securities and Exchange Commission, which are accessible to the public. The Company assumes no liability whatsoever to update these forward-looking statements or conform them to future events or developments. Forward-looking statements are not guarantees of future performance. They have not been reviewed by the auditors of Grifols. Alternative Performance Measures (APMs) This document and any related conference call or webcast (including a Q&A session) contain, in addition to the financial information prepared in accordance with IFRS, alternative performance measures (‘APMs’) as defined in the guidelines issued by the European Securities and Markets Authority (‘ESMA’) on October 5, 2015. APMs are used by Grifols’ management to evaluate the group’s financial performance, cash flows or financial position in making operational and strateg

Business

Business Update Q1 2024 Results - 6 - Delivering on Commitments in a Challenging Q1 2024 • Private offering of €1bn of 7.5% senior secured notes • To redeem 2025 senior unsecured notes • Improved maturity profile Closed €1bn private placement note • Due diligence completed • All regulatory approvals granted • Closing in June 2024 • Proceeds used to reduce senior secured notes Progressed on the €1.6bn SRAAS deal Positive phase III topline Fibrinogen clinical trial results • Met primary endpoint • Excellent safety profile • Effectiveness in treating acquired FD as equivalent to standard of care Q1 2024 Financial Review CEO First Impressions FY 2024 Guidance Key Priorities

Business

Business Update Q1 2024 Results - 7 - Sales growth +5.5% cc1 Q1’24 vs. Q1’23 €1,626m EBITDA Adjusted2 +21% Q1’24 vs. Q1’23 excluding SRAAS Q1’23 contribution3 €350m EBITDA Adjusted margin2 +280bps Q1’24 vs. Q1’23 excluding SRAAS 20% Q1’23 contribution3 21.6% Plasma supply6 +8% vs. Q1’23 Free Cash Flow2 -€109m Q1’24 vs. Q1’23 -€253m Leverage ratio Cost Per Liter6 -2% vs. Dec.’23 Q1 2024 Consolidated Financial Highlights 6.8x5 As per the Credit Facility 7.9x2 As per EBITDA as per P&L and Net Debt as per the BS Note: All figures are presented on a consolidated basis (including Biotest) except for plasma supply and Cost per Liter which refer to U.S. data 1 At constant currency, excluding exchange rate fluctuations over the period 2 Reconciliations in the Annex 3 Following the classification of SRAAS as an asset held-for-sale since January 2024, ~6.6% of its net profit is now consolidated into Grifols EBITDA vs. ~26.6% in 2023 5 Defined as per the Credit Agreement; refer to Annex. 6 US data only Liquidity and cash balance €713m Liquidity position as of March 31, 2024 Cash on hand as of March 31, 2024 €449m Q1 2024 Financial Review CEO First Impressions FY 2024 Guidance Key Priorities

Business

Business Update Q1 2024 Results - 8 - Biopharma Starts Strong with a 9.4% cc Increase, Driving 6.8%1 cc Revenue Growth in Q1 2024 Note: All figures are presented on a consolidated basis (including Biotest), At constant currency (cc), excluding exchange rate fluctuations over the period 1 Excluding one-off in Q1’23 revenues related to a commercial true-up in Diagnostic 1,561 15 21 22 Q1’23 Biopharma Diagnostic Bio Supplies and others Q1’24 cc FX Q1’24 121 1,648 1,626 +6.8% cc1 +5.5% cc +5.4%1 +4.1% Immunoglobulin +13%cc, SCIG +62%cc Albumin +7%cc Alpha-1 and Specialty proteins: +4%cc Impacted by one-off commercial true-up in Q1’23 Blood Typing as the main driver of growth, with +16%cc NAT performance impacted by shipment delays in China Revenue (in million EUR) Biopharma +9.4% cc Diagnostic -8.3% cc; +2.7% cc1 +9.4% cc Q1 2024 Financial Review CEO First Impressions FY 2024 Guidance Key Priorities

Business

Business Update Q1 2024 Results - 9 - EBITDA Adjusted Margin Increased by 280 bps vs. Q1 2023 EBITDA Adjusted (in million EUR) 163 310 125 40 11 Q1'23 Q1'24 Non-recurring expenses Reported EBITDA 299 350 18.8% 21.6% excl. SRAAS 20% Q1’23 contribution1 +280pbs SRAAS contribution Gross margin expanded to 38.8% (+320bps vs. Q1’23) driven by the cost per liter decline Lower absorption of opex on the back of lower revenues weight in Q1 compared with Q2-Q4 Lower EBITDA contribution of SRAAS in Q1’24 (EUR 0.5m) as 20% of SRAAS is now reported as an asset held-for sale1 . [Contributions of SRAAS in 2023: EUR 11m in Q1’23 and EUR 25m in Q4’23] Note: All figures are presented on a consolidated basis (including Biotest). 1 Following the classification of SRAAS as an asset held-for-sale since January 2024, ~6.6% of its net profit is now consolidated into Grifols EBITDA vs. ~26.6% in 2023. Q1 2024 Financial Review CEO First Impressions FY 2024 Guidance Key Priorities

Business

Business Update Q1 2024 Results - 10 - Free Cash Flow Mainly Impacted by Non-Recurring Items in Net Working Capital EBITDA Adjusted to Free Cash Flow reconciliation (in million EUR) Q1'23 Q1'24 EBITDA Adjusted 298 350 Inventories (143) (130) Receivables (62) (154) Payables 40 (56) Net working capital (166) (339) CAPEX (43) (38) IT and R&D (21) (22) Taxes (9) (4) Interests (78) (106) Others (47) (66) Free Cash Flow before extraordinary items (65) (217) Extraordinary Growth CAPEX (5) (32) Restructuring costs (75) (5) Free Cash Flow (145) (253) 01 03 04 Increase due to interest rates Egypt CAPEX Restructuring costs linked to the extension of the Operational Improvement Plan Higher inventory levels to meet expected revenue growth throughout 2024, partially offset by CPL decline Higher receivables mainly driven by the timing of a $150m commercial payment from China delayed to April 2, 2024 Payables: supplier ratio stayed steady at 55 days from Q1’23 to Q1’24, while peaking at 60 days in Dec.’23 Note: All figures are presented on a consolidated basis (including Biotest). 02 Capex, IT and R&D cash out stable Q1 2024 Financial Review CEO First Impressions FY 2024 Guidance Key Priorities

Business

Business Update Q1 2024 Results - 11 - Nacho Abia Chief Executive Officer (CEO) CEO First Impressions FY 2024 Guidance, and Key Priorities Q1 2024 Results - 12 - CEO First Impressions 02 05 03 06 01 04 Solid business fundamentals in a fast-growing market Cash flow generation and debt management, the key priority COVID impacts served as a catalyst for evolution and transformation Strategic initiatives in place to support mid and long-term growth Strong organizational commitment to our mission of serving patients, donors and stakeholders worldwide Significant opportunities to benefit from past investments Q1 2024 Financial Review CEO First Impressions FY 2024 Guidance Key Priorities

Business

Business Update Q1 2024 Results - 13 - On Track to FY 2024 Guidance | Revenues and EBITDA Adjusted Outlook FY24 Revenue growth Q1’24 H1’24 H2’24 FY24 Total growth 5.5% cc 5-7% cc 10-12% cc 7%+ cc 1,561 1,663 1,597 1,770 1,626 Q1 Q2 Q3 Q4 2023 2024 EBITDA Adjusted Q1’24 H1’24 H2’24 FY24 EBITDA Adj. €350m ~€750m ~€1,050m €1,800m+ EBITDA Adj. margin 21.6% 23-24% 27-28% 25-26% 298 361 373 442 350 Q1 Q2 Q3 Q4 2023 2024 Key proteins sales volume increase Lower Cost Per Liter Higher absorption of Opex IG growth following revenue pattern and reflecting momentum in Europe and U.S. Drivers to achieve FY2024 Guidance Following Q1 phasing Albumin to further growth in China Alpha-1 growth driven by new specialty pharmacy partner Larger SCIG sales driven by U.S. market and recent launches in key EU countries, with new launches in 2024 Note: All figures are presented on a consolidated basis (including Biotest). 2024 figures scaled for illustrative purposes Improved product mix Q1 2024 Financial Review CEO First Impressions FY 2024 Guidance Key Priorities

Business

Business Update Q1 2024 Results - 14 - Drivers to achieve FY2024 Guidance Free Cash Flow 2024 includes EUR480m of extraordinary items: On Track to FY 2024 Guidance | Free Cash Flow Extraordinary Growth CAPEX (EUR 370m) • Agreement with ImmunoTek to develop 28 plasma centers which will provide c.1.5m liters of plasma • Construction of plasma infrastructure in Egypt • Acquisition of plasma centers in Canada Restructuring and transaction costs (EUR 110m) mainly related to the extension of the Operational Improvement Plan Outlook FY24 -100 -253 Q1 Q2 Q3 Q4 2024 initial plan 2024 forecast EBITDA expansion Driven by revenue growth, product mix, further positive impact of the CPL, and operational leverage Working capital normalization Decrease in inventory levels coupled with a normalization of accounts receivables and payables Cash Flow Improvement Plan Activating a Cash Improvement Plan to improve FCF performance Note: All figures are presented on a consolidated basis (including Biotest). 2024 figures scaled for illustrative purposes. Free Cash Flow does not include proceeds related to the SRAAS 20% disposal €5m Free Cash Flow FY24 Q1 2024 Financial Review CEO First Impressions FY 2024 Guidance Key Priorities

Business

Business Update Drivers to exceed FY2024 Guidance Q1 2024 Results - 15 - Plan to Improve Cash Generation in 2024 and Beyond EBITDA Continuing to expand EBITDA as the main driver of cash flow generation, along with maintaining financial discipline Investment discipline Capex and M&A Cash Improvement Plan Activated Cash Improvement Plan to increase cash flow generation 2024 2025-2027 01 Working capital normalization 02 Operations continuous improvement 03 SG&A and spend control 04 Optimize real estate 05 Portfolio analysis Q1 2024 Financial Review CEO First Impressions FY 2024 Guidance Key Priorities

Business

Business Update Q1 2024 Results - 16 - Streamlining the Deleveraging Path SRAAS Proceeds 20% of SRAAS disinvestment to be fully use to reduce debt (€1.6bn) EBITDA Increase Driven by revenue growth, product mix, positive impact of the CPL, and operational leverage Q1 2024 Results - 16 - 6.3x 0.4x 0.1x FY23 SRAAS contribution Net debt increase Q1'24 Leverage ratio (as per the Credit Agreement 1 ) Liquidity Improvements Optimization in working capital will drive improvement in cash balance 01 02 03 Note: All figures are presented on a consolidated basis (including Biotest). 1 See Annex for reconciliations 2 Following SRAAS’ classification as an asset held-for-sale since January 2024, its contribution to EBITDA is excluded from the calculation of the leverage ratio as per the Credit Agreement Q1 2024 Financial Review CEO First Impressions FY 2024 Guidance Key Priorities

Business

Business Update 2 6.8x 4.5x -0.9x -1.2x -0.2x Q1'24 SRAAS proceeds EBITDA increase Cash position FY24E Q1 2024 Results - 17 - Key Priorities Four-pillar strategy anchored on financial discipline… … supported by key focus areas Dedicated to meeting the needs of our patients and customers and serving our donors Commercial operations effectiveness Operational excellence and continuous improvement Innovation acceleration Cash flow improvement Commercial expansion and key product launches Talent assessment and performance culture Simplification 1 3 4 2 Financial discipline & cash flow generation Q1 2024 Financial Review CEO First Impressions FY 2024 Guidance Key Priorities

Business

Business Update Q1 2024 Results - 18 - Building Blocks for Shareholder Value Creation for 2024 and Beyond 01 Robust business and market fundamentals in a growing industry 02 Focus on key priorities, led by FCF, leverage reduction and financial strength 03 Well-invested to further capture commercial and innovation opportunities 04 Accountable for FY2024 commitment and guidance 05 Investor Day in October ‘24 Q1 2024 Financial Review CEO First Impressions FY 2024 Guidance Key Priorities

Business

Business Update Q1 2024 Results - 19 - Agenda Q2 2024 Financial Results July 30, 2024 Investor & Analysts Day 2024 October 10, 2024 Q3 2024 Financial Results November 7, 2024 Q1 2024 Results - 20 - ANNEX Q1 2024 Results - 21 - Delivering on 2024 Innovation Milestones Milestone 2024 timing Status Details Alpha-1 AT 15% SC Phase 1/2 Cohort 2 Tx 1: First patient enrolled H1 First patient enrolled in March. Enrollment progressing on track PRECIOSA Last Patient Out – LPLV H1 Enrollment completed in 2023 Last patients finalizing treatment phase (LPLV expected in May) OSIG in DED – Start of GLP Preclinical studies H1 GLP preclinical studies started in April. Results expected for Q4 Yimmugo BLA FDA approval H1 FDA submission completed in Jun’23. Approval expected in Jun’24 Xembify® bi-weekly dosing FDA approval H2 FDA submission (sBLA) completed in Sept’23. GIGA2339 in HBV Phase 1 IND submission H2 Preclinical activities (GMP manufacturing, GLP tox study) progressing on track to support IND submission for Ph1 study PRECIOSA topline results H2 Last patients finalizing treatment phase. Gamunex in bags Conformance Lots production H2 Progress on track Fibrinogen Congenital & Acquired Deficiency MAA/BLA submission H2 Positive topline study results released in Feb’24 Regulatory approval process in Euro

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