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GRIFOLS: 3Q’19 RESULTS (ANÁLISIS BANCO SABADELL)

3Q'19 vs 3Q'18 Results
Sales: € 1.315 Bn (+14.9% vs. +13.8% expected and +12.2% expected by the market consensus);
EBITDA: € 369.2 M (+13.5% vs. +14.4% expected and +13.7% expected by the market consensus);
EBIT: € 294.13 M (+10.2% vs. +15.8% expected and +11.3% expected by the market consensus);
Net Profit: € 136.5 M (-8.6% vs. +5.8% expected and +9.2% expected by the market consensus);
9M'19 vs 9M'18 Results
Sales: € 3.738 Bn (+14.5% vs. +14.1% expected and +13.6% expected by the market consensus);
EBITDA: € 1.066 Bn (+13.5% vs. +13.8% expected and +13.5% expected by the market consensus);
EBIT: € 842.01 M (+8.9% vs. +10.9% expected and +9.3% expected by the market consensus);
Net Profit: € 423.4 M (-9.6% vs. -5.0% expected and -3.9% expected by the market consensus);
The 3Q’19 results were in line on the operating level and below expectations in Net Profit. EBITDA grew in line with expectations (+13.5% vs. +13.8% BS(e) and +13.7% consensus), despite sales beating expectations (+14.9% vs. +12.2% expected), given that EBITDA margins were lower than expected (28.1% vs. 28.7% consensus), which in our opinion were still pressured by higher plasma sales to third parties (Haema and Biotest), as well as one-off costs linked to the Shanghai Raas deal. Net Profit fell -8.6% vs. +9.2% expected due to the negative FX impact (€ -9.3 M on the quarter, which according to the company is a one-off) and the larger proportion of minority interests (€ 15 M in 3Q’19 vs. € 8 M in 2Q’19).
The NFD fell to € 5.804 Bn (-1% vs. 2Q’19), in line with expectations, leaving the debt level at 4.4x NFD/EBITDA (vs. 4.5x in the 2Q).
In summary, mixed 3Q’19 Results, where we foresee a positive reception as the performance of margins and Net Profit is explained by non-recurring factors and the share price has underperformed the IBEX by -6% in the past 3 months. In any event, we maintain our SELL recommendation given the low upside. SELL. Target Price: € 30.50/sh. (upside 8.00%)