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GRIFOLS: 3Q’20 RESULTS (ANÁLISIS BANCO SABADELL)

3Q'20 vs. 3Q'19 Results:
Sales: € 1.353 Bn (+2.9% vs. +2.5% BS(e) and +2.6% consensus);
EBITDA: € 403.7 M (+9.3% vs. +7.8% BS(e) and +4.6% consensus);
EBIT: € 322.79 M (+9.7% vs. +8.5% BS(e) and +8.7% consensus);
Net Profit: € 267.5 M (+96.0% vs. +27.8% BS(e) and +41.4% consensus);
9M'20 vs. 9M'19 Results:
Sales: € 4.031 Bn (+7.8% vs. +7.7% BS(e) and +7.7% consensus);
EBITDA: € 983.6 M (-7.7% vs. -8.3% BS(e) and -9.4% consensus);
EBIT: € 744.49 M (-11.6% vs. -12.0% BS(e) and -11.9% consensus);
Net Profit: € 485.7 M (+14.7% vs. -7.3% BS(e) and -2.9% consensus);
Robust 3Q’20 Results and slightly better on the operating level. The 3Q’20 EBITDA grew slightly above expectations (+9.3% vs. +7.8% BS(e)) and +5% consensus) even though sales were very much in line (+2.9% vs. +2.6% BS(e) and consensus; +6% LfL) thanks to margins above expectations (29.8% vs. 29.5% BS(e) and 28.6% consensus) that underscore a gradual improvement of +180bps (ex € -200 M provision in gross margin in 2Q’20). We stress that the progress made in its € -100 M savings programme expected in EBITDA’20 that would offset higher remuneration to plasma donors (to halt the drop in supply). Net Profit grew +15% up to € 267 M (vs. € 174 M BS(e) and € 194 M consensus) due to the update of its stake in Alkahest (€ 86.7 M) by the equity method.
Net debt fell -4% to € 5.27 Bn (4.1x NFD/EBITDA vs. 4.4x in 2Q’20) vs. €~5.47 Bn BS(e) thanks to the positive operating performance and solid working capital levels.
In short, the 3Q’20 results were strong, showing positive operating performance (especially on the margin level), despite the plasma supply problems over the past few months and with solid debt performance, which would explain the stock’s reaction (+1.7% vs. IBEX in spite of the recent performance, +2% vs. IBEX since 2Q’20 results; +8% on the year). BUY. T.P. € 37.30/sh. (upside +51.93%).