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GRIFOLS: 2Q’21 RESULTS (ANÁLISIS BANCO SABADELL)

2Q'21 vs. 2Q'20 Results
Sales: € 1.352 Bn (-2.3% vs. -5.6% BS(e) and -5.6% consensus);
EBITDA: € 337.7 M (+47.6% vs. +43.8% BS(e) and +41.6% consensus);
EBIT: € 250.6 M (+69.2% vs. +64.8% BS(e) and +65.2% consensus);
Net Profit: € 136.9 M (+325.2% vs. +328.6% BS(e) and +303.7% consensus);
1H'21 vs. 1H'20 Results
Sales: € 2.537 Bn (-5.3% vs. -6.9% BS(e) and -6.9% consensus);
EBITDA: € 634.5 M (+9.4% vs. +7.9% BS(e) and +7.1% consensus);
EBIT: € 463.55 M (+9.9% vs. +8.4% BS(e) and +8.5% consensus);
Net Profit: € 266.8 M (+22.3% vs. +22.8% BS(e) and +19.1% consensus);

The company has released better 2Q’21 results on the operating level. The quarter’s EBITDA came in as expected (€ 338 M vs. € 329 M BS(e) and € 324 M consensus) thanks to better sales performance (-2.3% vs. -5.6% BS(e) and consensus; +5.3% LfL vs. -0.9% in 1Q’21) and margins in line (25.0% vs. 25.2% BS(e) and 24.8% consensus). On the positive side we highlight the gradual improvement of Biosciences (~80% sales), which grew +5.1% organically on the quarter (vs. +1.5% BS(e) and -5.6% in 1Q’21), which we believe will continue to speed up over the next few quarters, especially from 4Q’21 on. Net Profit multiplied by 4.3x to € 137 M (vs. € 138 M BS(e) and € 130 M consensus), in line with our estimates.
Net debt increased by +4.4% to € 6.47 Bn, slightly above our estimate of € 6.42 Bn BS(e), which allowed for debt to be reduced to 4.9x NFD/EBITDA (vs. 4.8x BS(e) and 5.1x as of 1Q’21). The company also confirmed that its agreement with GIC, which implied the provision by GIC (Singaporean sovereign wealth fund) of US$ 1 Bn in return for a minority stake in Biomat (100% GRF), which gave GIC economic but not voting rights in the latter, will reduce debt by an additional -0.6x. We expect the company to provide further details to clarify the deal’s financial impact.
Currently, GRF is rising by +1.5% (+0.9% vs. IBEX), and we maintain our positive view awaiting better 2H results and following the stock’s recent poor performance (-8% since 1Q’21 results; -6% vs. IBEX), trading -39% below pre Covid-19 levels. BUY. Target Price: € 33.50/sh. (upside 60.67%)