The change in the leadership of Grifols generates suspicion among investors. The imminent resignation of Steven F. Mayer from the presidency of the group has taken the market by surprise, which had placed a vote of confidence in the company after the announcement of its restructuring plan. Although the departure occurs for personal and health reasons, the second replacement in the position in less than a year, replacing Victor Grifols Roura, sows uncertainty about the group. Its titles suffered a fall of almost 7% on the US stock market on Tuesday, putting at risk the buoyant trajectory that it has experienced on the Spanish parquet since autumn, when the former Cerberus took over the reins.
The firm based in Catalonia has chosen to put a strong man in charge within the house, but outside the family, present in the management through Raimon Grifols Roura and Víctor de Grifols Deu (brother and son of Víctor Grifols). , both with the positions of joint CEOs. The reason why this blood derivatives empire has decided to remove the directing members of the clan from the presidency is unknown.
Thomas Glanzmann has been making decisions for Grifols in the shadows since 2006, when he became part of the board, so with his election they intend to continue the mandate of the hitherto president. Glanzmann, who has developed his entire career in the plasma sector, now faces the challenge of continuing with the cost-saving program drawing by Mayer, which involves both laying off 2,300 people, and continuing with the closure of extraction centers of blood and cut costs in the facilities that are still active.
In this way, it shows its preference for an industrial profile in this new stage that they are opening after Mayer -with experience in ‘private equity’- has established a roadmap focused on reducing leverage ratios. Víctor Grifols, who holds the Sunday honorary presidency, left after his passing to one side of the company a legacy of 9,300 million in debt. Now, the interest rate rises are blowing against the company, which he sees as the acquisition strategy resorting to external financing has become a main obstacle.
In recent years, Grifols has grown through purchases. Between 2019 and 2022 alone, it has acquired assets from its Chinese partner Creat Group worth 3,000 million. This amount includes Shanghai RAAS, BPL Plasma USA and the German Biotest, which has carried out regardless of a reduction in its income after the pandemic. To these are added Kiro Robotics or Haema AG, among other operations, years ago.
Analysts estimate that the debt increased to 10,500 million, for which it would have risen by more than 46% since the end of 2018 and by more than 1,200 million in the last fourteen months. If confirmed, this complicates the objective set by Mayer of having reduced this figure to 7.9 times ebitda by the end of 2022. In these circumstances, the capital increase is postulated as one of the few options that Grifols has to insufflate with oxygen to their accounts, an option that, for now, they reject from the council.
Instead, they have committed to reducing their investments and therefore not to carry out any significant corporate operations. As a saving measure, the dividend will also be frozen until the ratio is reduced to four times the gross operating result, estimating that Grifols expected to achieve this year given the takeoff of blood extractions. Glanzmann will make its come-out on February 28, when the company presents its annual results for 2022. The ‘Bloomberg’ consensus forecasts an ebitda of 1,242 million (+21%) and places revenues at the edge of 6,000 million ( +20%).
One of its main Achilles heels is the low level of free float, given that more than a third of the capital is controlled by the Grifols saga. Its most prominent institutional investors include Capital Group (5.66%), BlakcRock (2.9%), Deutsche Bank (2.1%), Vanguard Group (2.1%) and BNP Paribas (1.7%) .
Everything indicates that the titles may fall back at the opening of the markets this Wednesday, threatening the revaluation of 5.6% that it has accumulated in the last week and that has established it as the second spearhead of the Ibex 35, with a higher rebound to 33% since the beginning of 2023, only behind Banco Sabadell (+35%) at the market close this Tuesday. The analysis houses have launched into the race to raise their target price in recent days in the face of the rise experienced, placing their twelve-month target price up to 18 euros after putting the threshold of 15 euros a stone’s throw away. At the moment, the only bearish position that appears in the CNMV’s records is that of AKO Capital with a short position of 0.84%.
