Grifols Rebounds 20% on the Stock Market Due to Its Cash Flow Data and the Sale of Shanghai Raas

Grifols shares bounced 17.51% on the stock market at 11:13 in the morning of March 1st, after having risen more than 20% after communicating an increase in its cash flow expectations to the market and reporting that the period contractually established by the parties in relation to the performance of 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 equity interest in Shanghai Raas Blood to Haier . 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 Chinese group, some 1.6 billion euros, will be used entirely to repay debt.

In this way, Grifols shares partially recovered from the 35% collapse suffered yesterday on the Stock Market after presenting its 2033 results without auditing.

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 asset). fixed) extraordinary growth related to the pre-existing agreement with ImmunoTek.

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Grifols expects its cash flow to reach 900 million euros

The company has stressed that after 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, reaching approximately €900 million , 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 five 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 million euros to 2,500 million .

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.

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(Featured image by Austin Distel via Unsplash)

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