Grifols and Brookfield this week buried the folder of the fund’s possible takeover of the pharmaceutical company after months of due diligence and conversations before even showing up. And according to the words of Nacho Abia, CEO of the blood products firm, the takeover bid that never came to be will not have an alternative in the form of a large corporate operation. “There is no plan B or plan C, we return to business as usual with a focus on the business,” he said.
The first executive of the Catalan organization assures that the company’s priority is now to increase its results. “We are on track to close an excellent year, we are growing double digits and EBITDA is up between 20% and 25%,” he recalled. In the last twelve months, the firm has generated an EBITDA of 1.7 billion euros. It is the main lever to reduce debt, he explained.
In this way, Abia wants to clear up the possibility of a large operation in the immediate future. There will not be a large sale and he is working “so that a capital increase is not necessary,” he said.
Regarding the disinvestments, expected by the market, the leader points out that when he talks about portfolio management It refers to rigorously managing the amalgamation of the company’s projects and societies because it involves hundreds of initiatives that entail their consequent investment. “We are going to see those who continue forward and those who decide to stop,” he says. He guaranteed, however, that there will be “no divestment of relevant volume”. Analysts had speculated about the sale of the diagnostics subsidiary, especially during 2022.
Abia also assures that management is working “so that the capital increase is not necessary.” “Many circumstances may arise in the future, but I know that the current shareholders are comfortable as they are and As long as the numbers are what they are, we do not need the capital increase“, he adds. “It’s not on the agenda,” he concludes.
Nor, he maintains, is the so-called plan B in the mind of the Grífols family, the reference shareholder. “I don’t know that there is one or that the family is looking for it.” In statements to EFEsources from the Catalan saga said on Wednesday that they are “very satisfied and happy with the support received from the current shareholders” and that “they will not support any other operation.”
In the family’s opinion, the blood product manufacturer “has great value and will continue to expand, as it has been doing for more than 115 years.” Abia also defends having received the support of numerous investors despite the punishment that the stock has been suffering in recent months.
Thus, Grifols’ focus is now on continuing to generate good financial results, which have grown in double digits in the last year. It does not expect that the arrival of Donald Trump to the White House will reduce its profitability with an increase in plasma costs: “We don’t believe it will have an effect. It is a necessary industry. During the time of Covid, the problem arose that the border was closed, but what is being talked about now is managing illegal immigration.” The listed centers in the southern United States are partly nourished by Mexican donors who cross the border. “They are not illegal, there are immigrants who go to work in the United States and take the opportunity to donate,” he said.
The improvement of ebitda It is the main source with which to reduce debt, which has gone from 6.7 times debt/EBITDA in April to 5.1 times at the end of the third quarter. “I won’t say that it doesn’t worry me, but the debt rather worries me,” he compares. Of the 9.2 billion backpack, in 2025 the refinancing of 1.3 billion is faced. “Next year is under control,” he said.
Thus, Grifols has already started talks to refinance 350 million of a bond that matures in February. It is also in talks with the bank to renew a line of stirring worth 950 million euros. Debt has been one of Abia’s main fields of work since his arrival. In addition, the 1.6 billion obtained from the sale of 20% of Shanghai Raas, completed last June, were allocated to this chapter.
The key date in the payment calendar will be 2027, when more than 2,000 million in maturities await, after the last refinancing. “We have to generate good results and cash flow; that’s three years away.”
Capital Markets Day “between February and March”
The conversations with Brookfield caused Grifols to decide to suspend the Capital Markets Dayscheduled for the month of October. Once the takeover folder has been saved, the listed company will call analysts and investors once the results for the entire 2024 financial year have been published. “It will be at the end of February or beginning of March,” Abia stated. The firm wants to explain its strategic plan and the numbers for the coming years with the fiscal year figures already being a reality.
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