Grifols Delivers Strong Third-Quarter Performance Led by Biopharma 12.1% Growth

Barcelona, Spain – November 7, 2024 – Grifols (MCE:GRF, MCE:GRF.P, NASDAQ:GRFS), a global healthcare company and leading manufacturer of plasma-derived medicines, reported strong third quarter results, delivering sequential improvement across key metrics.

Nacho Abia, Chief Executive Officer, commented, “I am proud of the strong third quarter performance delivered by the entire Grifols team. We have successfully built growth momentum, maintained disciplined cost control and advanced our continuous improvement initiatives. With this work underway, and our strong fundamentals, we continue to make progress on achieving our 2024 targets.”

Rahul Srinivasan, Chief Financial Officer, said “This record-breaking quarter stands as a testament to the passion and commitment of our entire team at Grifols towards our mission of improving patients' lives globally and supporting our donors. We remain firmly focused on our ongoing priorities of deleveraging and free cash flow generation.”

Business Segment Performance

In the third quarter of 2024, total revenue reached EUR 1,793 million, a year-over-year increase of 12.4% cc (12.2% on a reported basis). This brought year-to-date revenue to EUR 5,237 million, up 9.1% cc (8.6% reported), driven by strength in Biopharma.

Biopharma revenue grew by 12.1% cc (12.1% reported) in Q3’24 to EUR 1,533 million across key geographies, supported by strong demand for key proteins, particularly immunoglobins (+16.6% cc) and albumin (+11.7% cc) in the U.S. and international markets. Year-to-date revenue grew by 9.9% cc (9.6% reported) to EUR 4,455 million.

The immunoglobin franchise grew by 14.3% cc in the first nine months of the year as a result of successful launches in Europe and strong performance in the U.S. of subcutaneous immunoglobulin (SCIG), which increased by 51.8% cc. Albumin grew by 10.3% cc year-to-date, mainly driven by higher demand in China. Additionally, Alpha-1 and specialty proteins grew 1.3% cc year-to-date, driven by higher demand of Rabies in the US, while Alpha-1’s saw a paced recovery in the third quarter following the strategic transition of our specialty pharma distributor in the U.S.

Diagnostic sales were up 1.7% cc (+0% reported) on a like-for-like basis⁴ to EUR 479 million in the first nine months of the year, increasing 1.3% cc (+0% reported) in the third quarter. Improved performance was mainly driven by Blood Typing Solutions, up 13.7% cc year-to-date (+11.4% cc in the quarter), as well as our Nucleic Acid Testing Donor Screening (NAT) business, which grew by 3.5% cc in the third quarter.

Plasma supply continues to be managed efficiently, with cost per liter (CPL) declining modestly in the third quarter, further extending the significant drop since peak cost in July 2022. The outlook for plasma costs remains positive, with opportunities for further cost reductions stemming from continuous improvement initiatives aimed at increasing efficiencies.

Financial Performance and Leverage

Adjusted EBITDA in the third quarter was EUR 462 million with a 25.8% margin, an increase of 26.7% cc (24.6% reported) compared to the third quarter of 2023. Year-to-date, adjusted EBITDA was EUR 1,253 million, an increase of 25.0% cc (23.1% reported). This performance reflects an enhanced product mix, gross margin improvement following the reducing of cost per liter reported over the last quarters, and strong commercial execution and operational leverage.

Reported EBITDA for the third quarter was EUR 425 million and EUR 1,149 million in the first nine months of 2024, with margins of 23.7% and 21.9%, respectively. In the third quarter, reported EBITDA mainly included close to EUR 30 million of non-recurring transaction and restructuring costs and EUR 5 million from the Biotest Next Level (BNL) project⁵.

Reported net profit stands at EUR 88 million year-to-date, an increase of EUR 102 million year-over-year, driven by a strong third quarter total of EUR 52 million. Net profit was impacted by certain non-recurring financial and tax expenses associated with the Company’s efforts to reduce debt and the SRAAS transaction. Excluding these items, the Company’s net profit amounted to EUR 264 million in the first nine months of the year.

Free Cash Flow⁶ increased to EUR 127 million for the third quarter, reflecting sequential improvement compared to the EUR 253 million deficit in the first quarter and EUR 57 million in the second quarter. Third quarter Free Cash Flow was mainly driven by improved working capital management.

As of September 30, 2024, Grifols had a net financial debt as per the Credit Facility of EUR 8,128 million. This amount does not include the impact of the financial obligations related to leasing, primarily of plasma centers (IFRS 16) – the related impact is EUR 1,080 million. Therefore, net financial debt on the Balance Sheet stood at EUR 9,208 million. Liquidity position stands at EUR 704 million.

Deleveraging remains a top priority, with the leverage ratio standing at 5.1x⁷ for the quarter, down from 5.5x in the second quarter of 2024 and 6.8x in the first quarter. The company remains focused on strengthening its financial profile, as evidenced by the allocation of all proceeds from the
EUR 1.6 billion SRAAS asset sale to reduce the 2025 Senior Secured Notes and 2027 Term Loan B’s in the third quarter.

Alternative Performance Measures (APMs)

This document contains the following Alternative Performance Measures (APMs): Consolidated EBITDA Reported, Consolidated EBITDA Adjusted, Leverage Ratio as per the Credit Facility, Net Debt as per the Credit Facility, Free Cash Flow, Working Capital, and non-recurring items. For further details on the definition, explanation on the use, and reconciliation of APMs, please see the Appendix of the Presentation as well as the “Alternative Performance Measures” document from our website www.grifols.com/en/investors.