Grifols, S.A. Q2 FY2025 earnings call

• Strong first half performance with revenue of EUR 3.7 billion (+7% reported, +10.1% like-for-like constant currency) and adjusted EBITDA of EUR 876 million (+12.7% reported, +20.1% like-for-like constant currency). - Disciplined execution of the value creation plan focusing on commercial growth, margin expansion, and pipeline execution. - Progress in deleveraging with a leverage ratio of 4.2x. - Dividend reinstated as a sign of commitment to shareholders. - Pipeline advancements including upcoming fibrinogen launch in Europe Q4 2025 and U.S. in H1 2026, and progress on various oncology and dry eye disease programs. - Diagnostic business showing growth across segments with strategic alliances and platform developments.

Biopharma: Reported revenue growth of 8.2% with ~12% like-for-like growth. IG franchise saw 12.5% growth in the first half, subcu IG up 66% over the last 12 months. Albumin grew ~10% in Q2. Alpha-1 and specialty proteins revenue grew 6.6% at constant currency in the first half. Diagnostics: Had a solid start in the first half with 2.8% growth at constant currency. Blood Typing Solutions grew 7.1% at constant currency, Molecular Diagnostic 2.2%, and Immunoassay 8.1%.

• Reaffirmed 2025 guidance. - Improved free cash flow pre-M&A to $375 million to $425 million, up from previous $350 million to $400 million. - Dividend of EUR 0.15 per share reinstated. - Continued deleveraging progress with a leverage ratio of 4.2x, the lowest in 5 years.

• Foreign exchange volatility presenting challenges, though impact on group profit, leverage, and free cash flow is broadly neutral. - Macro-economic uncertainties, tariff impacts, and U.S. dollar depreciation posing risks to EBITDA.

Q: Congrats on strong results. First, on free cash flow and dividend, what's the primary driver of raised free cash flow target and logic of prioritizing dividend reinstatement ahead of executing call optional BPC and Haema?

A: Rahul Srinivasan mentioned free cash flow is a combination of factors, not solely interest costs. Dividend reinstatement is consistent with capital allocation framework as leverage is lower than when last paying dividends. On BPC and Haema, milestone remains half year 2026.

Q: IG trends, acceleration from Q1 to Q2, any one-off or share loss to Vyvgart?

A: Roland Wandeler stated IG remains strong, with feedback from thought leaders and physicians seeing IG as standard of care in CIDP, and FcRns mostly in second-line setting.

Q: EBITDA guidance, low end implies 1% Y/Y growth in H2 due to FX uncertainties?

A: Rahul Srinivasan said EBITDA guidance is impacted by FX, but H1 performance was strong and guidance reaffirmed.

Q: Canadian operations case study, products produced and potential?

A: Nacho Abia said Canadian project has a working facility producing albumin, plans to fractionate and produce immunoglobulins in future, collaborating with Canadian Blood Services for self-sufficiency.

Q: Alpha-1 specialty proteins growth, source of growth?

A: Roland Wandeler said growth in alpha-1 and specialty proteins is due to changes in specialty pharmacy provider in U.S., helping reach undiagnosed patients.