Catalan pharmaceutical giant Grifols sees a 23% jump in net profit in the first half of 2014

Barcelona (ACN).- Catalan company Grifols, a pharmaceutical multinational firm based in Greater Barcelona and the world's third-largest producer of plasma-derived medicines, has obtained a net profit of €224.8 million during the first half of this year , 23% more compared with the same period last year, as reported by the company to the Spanish Stock Exchange Authority (CNMV) on Thursday. These positive figures were achieved due to the maintenance of financial costs, made possible by improved financial conditions, despite having increased debt in absolute terms. Regarding revenue, the company reached €1.61 billion during the first six months of the year, 16.7% more than in the same period of 2013. 75% of the revenue came from the Bioscience Division, 18% the Diagnostic one and 3% from the Hospital Division. With respect to the first quarter, the proportion of total sales generated by each of the group’s divisions remains unchanged after the acquisition of Novartis' diagnostic business.

According to Catalan multinational Grifols, geographical diversification of sales helped to reduce the potential impact of exchange rate volatility. Grifols has maintained its strategy of pursuing a balanced growth in sales to optimize raw material costs as well as manufacturing capacity. With respect to the first quarter, the proportion of total sales generated by each of the group’s divisions remains unchanged after the acquisition of Novartis' diagnostic business: over 18% for the Diagnostic Division, 75% for the Bioscience Division, and 3.1% for the Hospital Division.

Expansion of its global presence

Internationalization remains a priority for the company based in Sant Cugat del Vallès (Greater Barcelona), which plans to continue to drive its sales in new markets abroad and reinforce its already strong market position. The acquisition and integration of Novartis’ transfusion diagnostics unit has expanded the Catalan company's global footprints and strengthened the sales revenue of the Diagnostic Division in the United States.

One of the most important capital investments during this period was the completion of its plasma fractionation plants in Parets del Vallès (Greater Barcelona) and in Clayton (North Carolina), which was unveiled by the President of the Catalan Government, Artur Mas, last June. Moreover, Grifols expanded its plants in Los Angeles and Emeryville (California), as well as in Murcia's industrial complex of Las Torres de Cotillas, in southern Spain.

Excluding transactions generated by the newly acquired Novartis business, the revenue in the United States and Canada increased by 5.8% to €838.7 million, representing 52.1% of the group's sales. On the other hand, the sales in the European Union declined by 4.4%, due to the delay in some contracts for the supply of factor VIII (blood-clotting protein, also known as anti-hemophilic factor (AHF)) in some countries, such as Poland. In contrast, sales of plasma-derived proteins in Spain barely increased for the second consecutive quarter, although the decrease in the sales of the Diagnostic and Hospital divisions continued. Sales were particularly strong in France, Germany and Eastern Europe. In the rest of the world, sales revenues increased by 3.9% to 208.5 million euros, mainly due to the growth in albumin sales in China and an increased consumption of diagnostic products and certain plasma proteins in Russia.

Grifols is planning to create new subsidiaries in India, Indonesia and Taiwan in order to expand its diagnostic products. The multinational company currently has commercial subsidiaries in 25 countries and is present in more than 100 countries worldwide. After having invested more than $7 billion in the United States, Grifols became the largest Spanish investor in that country.

Growing profit

Regarding EBITDA (earnings before interest, taxes, depreciation and amortization), it was €508.2 million in the first half of 2014, a 14.3% growth compared to the €444.6 million reported in the same period last year. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) increased by 12.7% to €523.8 million.  

EBITDA growth is a result of continuous company´s development of new, more efficient and more effective manufacturing. Grifols is continuing with its strategy to optimize costs related to plasma and improve the fractionation methods and protein purification capacity. The multinational is also making efforts to implement new efficiency measures, deriving from a range of in-house R&D projects. It includes active enhancements of the ABO technology (Automatic plasma Bottle Opener), which allows a better use of each litre of plasma, as well as the implementation of radio frequency identification (RFID) on all plasma bottles, automating the recording of the traceability data by pallet.

In addition, the total consolidated assets in June 2014 were €7,276.1 million, presenting a significant growth compared to the €5,841.0 million reported in December 2013. The difference is mainly the result of the acquisition of the Novartis’ transfusion diagnostics unit.

Products that improve health and well-being of millions of patients

The company, founded in Barcelona in 1940 by a hematologist and scientist, José A. Grifols Roig, is recognised by healthcare professionals and patients around the world for the quality, efficiency and safety of its plasma-derived protein therapies. Grifols' products are used to treat rare, chronic diseases such as neurological disorders, immune diseases and hemophilia. The company mainly produces plasma-based products and is the European leader in this field and the third-largest worldwide.

Also worth noting are its sales of medical devices, instruments and reagents for hemostasis and immunohematology, immunoassays and other blood screening services using NAT technology. It is the major world supplier of IVIG, albumin, Factor VIII and other plasma-derived products.