BarcelonaHistoric drop in the Grifols stock market. The Catalan pharmaceutical company plummeted 35% this Thursday, the day it presented its 2023 results, which closed with a record income and a drop in profits due to restructuring costs. Despite starting the session in clear decline, the bleeding did not occur until mid-afternoon, shortly after the stock market analysts’ conference. The share price fell to 7,584 euros, a figure not seen since 2012.
The Catalan multinational blood products reached its historical revenue record last year, with a total of 6,592 million euros, 11% more than in 2022. However, this boost was not transferred to profits, which have suffered a drop in 70% for restructuring costs linked to its transformation plan. Thus, it closed the year with profits of 59 million euros, which excluding these extraordinary expenses would reach 206 million, a figure similar to those of 2022.
These results, as explained by the company in the information sent to the National Securities Market Commission (CNMV), have not been audited, but the consulting firm KPMG has confirmed in writing that it will issue its audit opinion before March 8. Grifols has also reported that councilor Jaime Costos has not signed the accounts because he was absent from the board of directors meeting held yesterday in Barcelona. “However, he has not expressed disagreement or opposition with the documentation,” the company stated in its annual report.
Following these results – the company had already set an all-time high in revenue in 2022 – there is growth in all business units, but especially in Biopharma, which had a turnover of 5,558 million, 13.3% more. The adjusted gross operating result (ebitda) stood at 1,474 million euros, which does not include the 223 million euros of extraordinary expenses. The forecast for 2024 is 1.8 billion euros.
A dividend of €266 million in Scranton
In the same financial report, the Catalan pharmaceutical company explains that its subsidiary BPC Plasma paid a dividend of 266.4 million euros last year to Scranton Plasma, linked to the founding family of Grifols. The company states in this report that the dividend was distributed “without cash outflow compensating other non-current financial assets” and that the dividend corresponds to the result of the four previous years. But it also admits that this distribution has had an impact “against the reserves of the group’s non-dominant interests.”
Gotham City Research’s recent offensive against Grifols erupted precisely because of its relationship with Scranton Entreprises; Specifically, the New York fund accused the pharmaceutical company of manipulating results and debt through it family office, which controls 8.3% of Grifols shares. Gotham pointed out that the Catalan company would have tweaked the accounts by incorporating into its own accounts the results of the German Haema and the American BPC Plasma “despite controlling 0% of the shares” of both companies. In today’s report, Grifols explains that in 2018 it acquired 100% of the shares in both companies and that a few months later they were sold to Scranton for the same amount. It also remembers that it maintains the option to repurchase 100% and that this option gives power to Grifols, although it has not been exercised, so “Haema Plasma is included in Grifols’ consolidated financial statements as of 2022.”
Family, debt and restructuring
The pharmaceutical company began in 2023 with the announcement, made in mid-February, of 2,300 layoffs within the framework of a restructuring plan to save 400 million euros in costs compared to the previous year. Only six days later came a major change at the top: the until then vice president, Thomas Glanzmann, assumed management of the company. He was the second replacement in less than five months at the helm of the pharmaceutical company. In May, Glanzmann reached the top of the board by replacing the two CEOs of the family, Raimon Grífols Roura and Víctor Grífols Deu.
It was the prelude to a historic step that would come this year: both Grifols left their management positions this February. For the first time in 115 years of history, Grifols was no longer managed by family names. This same Thursday, at the investor conference, Glanzmann announced that from 2025 he will become non-executive president of the company. In a month, Nacho Abia will land as the pharmaceutical company’s new CEO.
These movements have as a background the company’s biggest battle in recent years: facing its high debt, which rises above 9.4 billion euros. The multinational is in the midst of a divestment strategy, as Glanzmann made clear to shareholders in June: “We are approaching it to ensure our future sustainable growth.” It was the last big announcement of 2023: Grifols sold 20% of Shanghai RAAS for about 1,630 million euros to the Chinese group Haier, maintaining 6%. “The proceeds from the sale of 20% of Shanghai RAAS in the Haier Group will be used entirely to repay debt,” the company explained this Thursday in a statement.