Analysts are not completely convinced by Grifols’ debt reduction prospects. In the presentation of the annual results for 2022, they specify that their roadmap this year is based on three pillars: the increase in income and margins, as well as reducing their indebtedness. The company has managed to close with a leverage of 7.1% times the gross operating result (ebitda), up to 9,191 million net debt, a figure that exceeds the forecasts, which pointed to a ratio of 7.9 times.
Looking ahead to this year, within the framework of the reduction of their financial burden, they contemplate several levers: the savings plan worth 400 million, actions focused on improving cash flow and, even, they contemplate some transaction. However, they have not made express reference to the objectives set for the drop in this ratio to four times the ebitda during 2023 and up to 3.5% times in 2024, a matter that Barclays qualifies as a reason for “concern”.
Debt has been the Achilles heel of the blood derivatives firm for years, an issue in which, although the improvement in gross operating profit (1,247 million in 2022) can help reduce indebtedness, from the investment bank that contributes It could have ceased to be one of the main “priorities” for the Catalan group. In the publication of the annual accounts, Grifols ensures that 35% of its financing is contracted at a variable rate, to which they defend a “limited” exposure to the impact of the rise in interest rates.
From Bankinter, they believe that after a transition exercise for the group, in which some problems that arose during the Covid have resisted, the key will be in expectations after 2023. Specifically, they focus on the possible improvement of profitability in the final stretch of this year and ensure that the relationship between Ebit and the assets used by a company (ROCE) is above the cost of debt. Another of its main risks is that Grifols’ activity is focused on a business of “recurring low growth” that requires acquisitions to accelerate higher profits.
It should be noted that Grifols does not have a significant debt maturity until 2025, the date by which Bankinter expects it to recover the dividend and for the share to begin to take off. At the close of the market this Wednesday, the titles were trading at a price of 11.6 euros, far from the 17.35 euros that can be placed according to the ‘Bloomberg’ consensus. It should be noted that Grifols is at 66% of its all-time high, reaching 34.1 euros in December 2019.
The arrival of Thomas Glanzmann to the executive presidency has raised misgivings among investors, as it is the second replacement at the controls of the company in less than five months. After the last setbacks experienced by this value during February -the last one this Tuesday, when it dropped 9% after presenting results-, it accumulates a revaluation of 8% so far this year.
The strong corrections have caused them to become the ‘Ibex firm’ with the greatest potential twelve months ahead, including Cellnex Telecom, Rovi, Acerinox and Logista. Specifically, this is higher than 49%, although purchase recommendations have been reduced from almost 70% to 65%. The positive note is that sales have also been reduced in recent days from 8.7% to 4.3%. The latest to review Grifols upwards have been CaixaBank BPI, Morningstar or JB Capital Markets.
