Grifols lifts 2023 margin outlook as revenue rises

Spanish drugmaker Grifols on Tuesday lifted its 2023 margin outlook after reporting sturdy growth in first-quarter core earnings and revenue as cost-cutting measures took effect and supply of plasma blood used in its medicines recovered.

The company, which was severely hit at the start of the pandemic due to plasma shortages and left its share price three times lower than it was in 2020, has sought to reassure investors with cost-cutting measures and a leadership change.

On Monday Grifols named Executive Chairman Thomas Glanzmann as new chief executive with immediate effect, ending the founding family’s executive leadership.

Announcing its results, Grifols said it expects its earnings before interest, taxes, depreciation, and amortisation (EBITDA) to have a margin over its revenue of 22%-24% in 2023, while its previous target was 21%-23%. It said it had already achieved the 21% goal in the first quarter of the year.

It reported a 19% rise in first-quarter EBITDA to 299 million euros ($329.1 million). Its revenue increased by 23% to 1.5 billion euros.

Grifols swung to a net loss of 108 million euros in the first quarter due to its cost-cutting plans.

It now expects to save 50 million euros more than initially planned, to a total of 450 million, due to its strategy to lay off 8.5% of its workforce as it seeks to cut debt.

Its net financial debt stood at 9.3 billion euros in the first quarter of the year, slightly above 2022 levels and equivalent to seven times EBITDA. The company’s target is to lower the debt to a ratio of four-to-one by 2024.

($1 = 0.9084 euros)