EUR 100.00 For Business Accounts Only

GRIFOLS: 1Q’20 RESULTS (ANÁLISIS BANCO SABADELL)

1Q'20 vs. 1Q'19 Results:
Sales: € 1.293 Bn (+11.8% vs. +11.1% BS(e) and +10.2% consensus);
EBITDA: € 351.1 M (+14.9% vs. +18.5% BS(e) and +17.1% consensus);
EBIT: € 273.6 M (+18.4% vs. +23.3% BS(e) and +22.0% consensus);
Net Profit: € 186.0 M (+62.6% vs. +36.4% BS(e) and +37.2% consensus);

Margins came in slightly below expectations, but COVID-19 has had little impact. EBITDA grew less than expected (+14.9% vs. +18.5% BS(e) and +17.1% consensus) despite the positive performance in sales (+11.8% vs. +11.1% BS(e) and +10.2% consensus) due to lower EBITDA margins than expected (27.2% vs. 28% consensus and 28.2% BS(e)), which would be due to lower Albumin exports to China (with higher margins) and higher roll-out costs for its subcutaneous immunoglobulin (Xembify). Net Profit beat expectations (+62.6% vs. +36.4% BS(e) and +37.2% consensus) thanks to several one-offs in financial items, where we highlight the € +56 M (no impact on cash) stemming from the integration of Shanghai Raas. Excluding the effect from one-offs, our estimates would have been -5.5% below.
NFD rose +1.4% to € 5.8 Bn (vs. € 5.75 Bn BS(e)), leaving debt stable at ~4x NFD/EBITDA.
Even though margins are slightly lower than expected, we see an improvement vs. previous quarters (+70bps vs. 1Q’19). We also stress its business resilience as regards Covid-19, not jeopardising its excellent growth dynamics, which would be being priced in now (+0%; +1.7% vs. Ibex). Although we see a risk of faltering plasma supply, the company has 6 months of safety stock and the economic slowdown should encourage a rise in donations. Also, COVID-19 could be an opportunity if any of the company’s treatments for the disease materialises (expected for July 2020). We reiterate BUY. T.P. € 37.30/sh. (+19.55% upside).