Grifols (GRFS) Q2 2026 Earnings Call Transcript

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DATE

Tuesday, July 28, 2026 at 12:30 p.m. ET

CALL PARTICIPANTS

• Head of Investor Relations and sustainability - Daniel Segarra
• Chief Executive Officer - Nacho Abia
• President of BioPharma - Roland Wandeler
• Chief Financial Officer - Rahul Srinivasan

TAKEAWAYS

• Group Net Revenue -- Grifols, S.A. (NASDAQ:GRFS) reported first-half revenue of €3.574 billion, representing 2.6% growth at constant currency.
• Biopharma Revenue -- Grew 5.4% at constant currency during the first half, serving as the primary driver for the group.
• IG Franchise Revenue -- Increased 12.8% at constant currency in the first half, supported by demand in the United States and Europe.
• Xembify Revenue -- Grew close to 34% at constant currency in the second quarter, reflecting sustained underlying demand in the double digits.
• Adjusted EBITDA -- Reached €472 million in the second quarter, representing a 25.2% margin.
• Adjusted EBITDA (H1) -- Totaled €854 million for the first half, up 2.4% at constant currency with a margin of 23.9%.
• Free Cash Flow -- Reported at €91 million for the first half before M&A, representing a €103 million year-over-year improvement.
• Free Cash Flow Guidance -- Management maintained full-year guidance of $500 million to $575 million.
• Net Leverage -- Total net leverage stood at slightly below 4.2 times, while net secured leverage was 2.7 times at the end of the quarter.
• Liquidity Position -- The company reported total liquidity of over €2 billion.
• Donor Center Closures -- The closure of 29 U.S. donation centers resulted in $40 million in one-off costs, of which $25 million were noncash.
• Egypt Plasma Sourcing -- Egypt currently contributes 25% of ex-U.S. plasma collections, with management targeting 50% by 2029.
• Alpha-1 and Specialty Proteins Revenue -- Returned to growth in the second quarter with a 2% increase at constant currency.
• Group Profit -- Increased to $227 million during the first half, representing a 28.7% year-over-year improvement.
• Reported Gross Margin -- 37.6% for the second quarter, impacted by costs related to donor center restructuring.
• Adjusted Gross Margin -- Reached 39.4% in the second quarter when excluding one-off costs.
• H2 IG Guidance -- Management expects mid to high single-digit growth in U.S. and European core markets during the second half.
• Plasma Self-Sufficiency Target -- The company expects total ex-U.S. plasma collections to increase 2.5 times by 2029.
• Alpha-1 Pipeline Milestone -- The SPARTA Phase 3 study remains on track with top-line results expected in late Q4 2026.

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RISKS

• Wandeler stated, "first half 26 reflects the year on year pricing impact in China following our mid-25 price adjustment," which led to a difficult comparison against the prior year's license renewal catch-up.
• Srinivasan noted that "the mismatch between a higher average euro dollar for the period versus lower end of period FX rate used for the balance sheet translation creates notional releveraging," affecting total leverage figures.

SUMMARY

Management reported first-half 2026 results for Grifols, S.A. (NASDAQ:GRFS) driven by the immunoglobulin franchise and operational optimization, including the closure of 29 U.S. donor centers. The company is transitioning its sourcing strategy to increase ex-U.S. plasma collections, specifically through expansion in Egypt and Canada, to reduce reliance on U.S. supply. Strategic priorities include the repositioning of the Diagnostic division through new product launches and the evaluation of a potential IPO for the U.S. Biopharma business. Management confirmed it remains on track to meet full-year guidance for 2026 despite currency fluctuations and pricing adjustments in China.

• CEO Abia attributed the company's competitive position to an "integrated value chain" developed over decades that remains difficult for peers to replicate.
• Management identified the Evansys IH launch as a critical step in the diagnostic roadmap, marking the first of several planned solutions under the Evansys brand.
• Wandeler noted that for CIDP treatment, "IGs continue to grow... our brand continues to grow," despite the introduction of competing therapies in the neurology market.
• The company expects its Egyptian operations to become its largest ex-U.S. plasma source by 2029, acting as a globally recognized plasma hub.
• CFO Srinivasan stated the company's balance sheet has "no meaningful maturities for a while" and retains flexibility to optimize cash interest costs.
• The SPARTA study for Alpha-1 preservation of lung density is the first Phase 3 trial designed to assess treatment over a three-year period, with top-line data anticipated by year-end.

INDUSTRY GLOSSARY

• IG (Immunoglobulins): Therapeutic proteins derived from human plasma used to treat primary and secondary immune deficiencies and autoimmune disorders.
• CIDP (Chronic Inflammatory Demyelinating Polyneuropathy): A chronic neurological disorder involving inflammation of the peripheral nerves.
• SPARTA: Grifols' Phase 3 clinical trial evaluating the efficacy and safety of Alpha-1 Antitrypsin therapy in patients with genetic deficiencies.
• NAT (Nucleic Acid Testing): A molecular screening technology used to detect viral infections in donated blood and plasma.
• FcRn (Neonatal Fc Receptor): A cellular receptor target for a new class of competitive therapies used in the treatment of autoimmune diseases.
• Evansys IH: The brand name for Grifols' next-generation diagnostic platform for immunohematology laboratories.

Full Conference Call Transcript

Daniel Segarra: Hello, everyone, and thank you for joining us today for Grifols Second Quarter 26 Earnings Call. My name is Daniel Segarra, and I serve as the Head of Investor Relations and sustainability. Today, I am joined by Grifols' chief executive officer, Nacho Abia, president of BioPharma, Roland Wandeler and chief financial officer, Rahul Srinivasan. As this is our usual practice, today's call will last about an hour. Including the Q and A session. Please note that this call is being recorded. You can find additional materials, today's presentation, in the Investor Relations section of the Grifols website at grifols.com. A transcript and replay of the webcast will also be available on the Investor Relations website within 24 hours.

Turning to Slide 2, I would like to remind everyone that forward-looking statements may be made during this call. This may include, among other things, comments regarding the company's future operating and financial performance. Statements about our future expectation, clinical developments, regulatory timelines and the potential success of our product candidates. These statements are based on current expectations and available information as of the date of this call and are subject to certain risks and uncertainties that may cause actual results to differ materially from those discussed today. Grifols financial statements are prepared in accordance with EU, IFRS and other applicable reporting provisions, including alternative performance measures or APMs as defined by the European Securities and Markets Authority.

Grifols management uses APMs to evaluate financial performance as the basis for operational and strategic decision making. These APMs are prepared for all the time periods presented in this document. As announced, the Board of Directors has decided to initiate a process to evaluate a potential IPO of the Grifols U. S. Biopharma business. Any such transaction remains subject to legal and regulatory requirements, internal approvals and market conditions. Among other considerations. While we are currently limited by applicable laws and regulations, in what we can say, we will provide updates when appropriate. Now moving to today's agenda, I will turn the call to Nacho to kick it off. Nacho.

Jose Ignacio Abia Buenache: Thank you, Daniel, and thank you all for joining us today. The second quarter played out in line with our expectations. Allowing us to deliver a solid first half of the year and keeping us firmly on track to deliver our full year 2026 guidance. The progress we have made over the first 6 months reinforces our confidence as we look to the second half of the year. Not because all the work is done, but because the business continues to perform according to plan and the key levers we have put in place are delivering the results we expected. For Grifols, that confidence start with the strength and resilience of our business model.

Our integrated value chain has long been 1 of the defining characteristics of Grifols. It is a model built over decades with capabilities that are difficult to replicate and that continue to differentiate Grifols. Today, I would like to leave you with 3 key messages. First, how to think about our first half performance. Second, how the work we have done across our biopharma and diagnostic business continues to strengthen the long term position of the company. And finally, why the levers that are already in place position us well to deliver on our commitment for the second half. Let me start with our performance during the first 6 months of 26.

Revenue for the first half reached €3.574 billion up 2.6% at constant currency. With biopharma being the primary growth engine delivering 5.4% growth. Reflecting the disciplined commercial approach we have been taking across the portfolio. As we have said over the past few quarters, our goal is not to maximize volume at any price. But to drive sustainable, profitable and free cash flow growth by focusing on the products, customers and markets where we believe we can create the greatest value. That same discipline is visible in our profitability. Adjusted EBITDA reached €472 million in second quarter, representing a margin of 25.2% And for the first half, adjusted EBITDA reached €854 million up 2.4% year over year at constant currency.

With a margin close to 24%. Free cash flow improved by approximately €100 million during the first half, reflecting our continued focus on operational discipline working capital management and capital allocation. While the second half is seasonally stronger for our business, we are encouraged by the progress already achieved and by the foundations we continue to build. Beyond the financial results, we also continue to strengthen the company operationally. The recent organizational changes are designed to bring decision making close to our customers and markets, sharpen our commercial focus and improve operational efficiencies in The United States and in the rest of the world.

This quarter, in Diagnostics, we launched Evansys in Immunohematology, which is how we name in the Barcelona platform. An important step for our diagnostic business and the first of many solutions to come under the Evansys brand name. This demonstrates how we continue to translate decades of innovation into new solutions for our customers. That commitment to building capabilities rather than pursuing short term opportunities is also reflected in our plasma strategy. Our U. S. Collection network remains the foundation of our plasma platform. At the same time, the continued development of our projects in Egypt and Canada is creating a more diversified and resilient sourcing network. Egypt is much more than a new plasma collection project.

It is a strategic investment in the future of our business strengthening our ex U. S. Plasma platform, increasing operational flexibility and supporting sustainable growth for many years to come. The same disciplined approach has also shaped the way we manage our balance sheet. The refinancing completed during the first half has further our financial flexibility. Rahul will discuss this in more detail later in the presentation. Finally, on this slide, we continue to progress our evaluation and associated preparations for a potential IPO for the U.S. Biopharma business. We will provide any relevant update as appropriate in full compliance with applicable laws and regulations.

Let me now turn to BioPharma for the work we have been doing over the recent years is becoming increasingly visible. Grifols holds a leading position in a large and growing biopharma market. And we continue to build on that leadership by advancing our pipeline to address patients' evolving needs. Our IG franchise continued to deliver strong momentum, supported by strong underlying market fundamentals. As we continue to expand the approved indication of our IG portfolio, I would like to highlight our ongoing Phase 3 clinical trials in secondary immunodeficiencies and CIDP.

First, our Phase III sigma study evaluates the efficacy and safety of GAMUNEX-C in combination with the standard of care treatment to prevent infections in patients with secondary antibody deficiency. Together with our EXCEL study for XEMBIFY, focused on patients with blood cancer who are at increased risk of infections. It reflects our continued investment in expanding the indication of our immunoglobulin portfolio. Another important Phase III study in IG is EXPERT, designed to support the potential expansion of XEMBIFY into the treatment of CIDP. Offering the potential to expand treatment options for patients. Beyond OIG, our broader protein portfolio is progressing well. Fibrinogen for congenital indication was launched in The U. S. As planned in the second quarter.

And we are in the final stage discussions with the FDA to agree on the Phase 3 trial design for the acquired indication. It will complement our European launches across both congenital and acquired indication. Our Alpha-1 pipeline remains fully on track. Led by SPARTA and our 15% subcutaneous program. And Roland will provide more details later about it. And our albumin clinical programs in cirrhosis continue to advance as well. Underpinning all of this is our expanding self-sufficiency platform. With our unique presence in The U. S, both Egypt and Canada continue to strengthen our ex U. S. Plasma sourcing through strategic partnerships.

Allowing us to keep optimizing our collection footprint while maintaining consistently high quality and safety standards across the entire plasma network. Together, our leadership in IG, a broadening protein portfolio and an increasingly self sufficiency sourcing base provide a strong foundation for continued sustainable growth. Having said that, Grifols has always been more than biopharma alone. And another important source of differentiation and 1 that continues to create value for the group is diagnostic. Turning to Slide 7, I would like to comment on the progress within It remains a leading profitable and cash generative business. Built on long standing customer relations, high barriers to entry, and mission critical solutions embedded in our customers' daily workflows.

This business continued to be a complementary pillar to our biopharma franchise. Providing meaningful contributions to our overall margin profile and cash conversion. We continue to make progress across our innovation road map. The clearest milestone this quarter was the successful launch of Evansys IH, an important step in advancing our next generation blood typing portfolio. These platforms delivers meaningful improved performance in a smaller modular design with a simplified workflow and reduced footprint for customers. And we expect it to be a key driver in sustaining our leadership in this market segment. Alongside this, Grifols is advancing the development of its solutions to help laboratories simplify workflows and enhance operational efficiency.

And this includes our ISARD immunoassay platform and our MUNDAKA molecular platform. Both of which continue to progress as planned. ISARD in particular position us to directly target the approximately US$1 billion serology market end. And over time to expand into a much larger clinical immunoassay space. Our next generation NAT platform, MUNDAKA, reinforces our leadership in blood screening while strengthening our molecular diagnostics offering. This innovation roadmap further diversifies our diagnostic revenue base, extends our reach into higher growth adjacent segments and reinforces our strategy to build a presence across the clinical diagnostics market. Together with our ability to operate independently across these platforms, it enable us to capture more value across the diagnostic value chain.

While further strengthening our leadership position. Moving to Slide 8, let me highlight the key levers that support our confidence in continuing to deliver improvement through the second half. First, continued growth in biopharma. Driven by sustained IG momentum, continued product mix improvement and expected stabilization of albumin in China. Second, the continued ramp up of plasma from Egypt. While enabling optimization of our U. S. collections. Third, continued progress at Biotest. With improving manufacturing performance and a stronger operational execution. Fourth, further operating leverage. Supported by our ongoing disciplined cost management across the group. And finally, continued improvement in free cash flow generation reflected by effective working capital management capital allocation and continued financial discipline.

The priorities we set at the beginning of the year remain unchanged. The levers supporting our guidance are already in motion and progressing as expected. And we remain laser focused on delivering our commitments for 2026 while continuing to strengthen Grifols for the long term. I hand over to Roland, I would like to take a moment to recognize his contribution to Grifols. As you are aware, Roland has decided to return home to Basel in Switzerland to lead a biotechnology company. We appreciate his leadership his strong contribution and his partnership. We wish him every success in his new role.

We have a strong transition plan in place, supported by a highly experienced leadership team ensuring continuity, disciplined execution and sustained progress against our objectives. Thank you, Roland and all the best.

Roland Wandeler: Thank you, Nacho, for your kind words. It has been a privilege to contribute to Grifols' success over the last several years and to work alongside so many talented colleagues. I am incredibly proud of the dedication, passion, and commitment our team shows every day to serve patients who are counting on our medicines and advance the strategic priorities we have set for the business. Moving to Slide 10. The Biopharma business performed in line with our expectations in the first half, delivering 5.4% revenue growth at constant currency, reflecting the more balanced growth profile we anticipated entering the year. Growth was driven by our IG franchise, more than offsetting temporary headwinds in albumin.

Importantly, Alpha-1 and specialty proteins returned to growth in the second quarter, resulting in a broader-based performance across the portfolio and reinforcing our confidence in the full year outlook. Let me now comment on each franchise in more detail, starting with IG. Immunoglobulins remained our clear growth engine delivering 12.8% growth at constant currency in the first half. Performance continued to be driven by robust demand across The U. S. And Europe, sustained GammaNex momentum in our core markets and the successful launch of YIMMUGO in The U. S. Xembify, our subcutaneous IG, also showed strong performance, growing close to 34% at constant currency in the second quarter.

As we highlighted in our last call, the underlying in market demand for Xembify remains firmly in the double digits, and we continue to see that reflected in our performance. Looking ahead, we expect underlying demand growth for IG to continue across our 3 main indications: In primary immunodeficiency, increased awareness and better diagnosis, are expanding access to therapy. In secondary immune deficiency, demand continues to rise in an ageing population and with an increase in immune compromised patients. And in CIDP, we also continue to see growth. Immunoglobulins, with their broad mechanism of action, remain the established first line standard of care in this complex multifactorial disease.

This is supported by extensive clinical experience, the broad immune modulatory activity, and a compelling value proposition. Recent market developments continue to reinforce the importance of maintaining effective therapy options for CIDP patients and support our confidence in the growth outlook for CIDP. Following our strong first half, we expect IG in the second half to continue to grow mid to high single digit in The U. S. And our European core countries in line with the market. Partly offset by deliberate lower growth in other markets. For Xembify, our SCIG, we see strong momentum and expect continued strong double digit growth. Turning to albumin.

The underlying market dynamics in China remain broadly unchanged from what we have been discussing in prior calls. As anticipated, first half 26 reflects the year on year pricing impact in China following our mid-25 price adjustment, with Q2 facing a particularly challenging comparison due to the post license renewal catch up we saw in Q2 of the prior year. Our focus here remains on executing the actions we outlined. Leveraging our strategic partnership with Shanghai RAAS to expand our commercial reach in China while continuing to grow the business in The U. S. And other international markets.

Looking forward, we remain cautiously optimistic that market conditions continue to stabilize supported by an easier comparison in our second half of the year as we lap the pricing adjustment implemented in the middle of last year. Together with increasing weight of Egyptian plasma in our collection, which comes with high local albumin use and excess IG, we believe that Grifols is well positioned to balance albumin with IG growth over time. On alpha-1 and specialty proteins, sales returned to growth in the second quarter, up 2% at constant currency. For ALFA-1, we saw higher treatment numbers in Q2 as patient access continued to improve following a challenging U. S. Reauthorization period earlier in the year.

We continue to appropriately support health care professionals throughout the process for their patients, and were encouraged by the sequential improvement we saw during the quarter. Demand for HyperRAB also remained strong as we entered a seasonally important summer period in rabies. And in June, our U. S. Team launched FESILTY, our new fibrinogen concentrate for patients with congenital fibrinogen deficiency in The U. S, adding to our specialty proteins. Together, the momentum we see in alpha-1 and specialty proteins reinforces our confidence that this franchise will deliver growth for the full year as we outlined at the beginning of 2026. Turning to Slide 11, I would like to spend a moment on Alpha 1.

In this indication, where 85% of patients remain undiagnosed and without treatment, clinical innovation remains central to our strategy. All with the objective to continue to expand the market while further strengthening our leadership in a franchise where we are the global leader. Our SPARTA study has the potential to significantly strengthen the evidence base for augmentation therapy and thus support broader testing and diagnosis as well as improve patient access globally. SPARTA is the most comprehensive outcome study ever conducted in alpha-1, and the first phase 3 trial designed to assess preservation of lung density by CT over a 3 year period. Importantly, the study evaluates both the current standard dose and the higher dose regimen against placebo.

Positive results not only have the potential to significantly strengthen the clinical evidence supporting augmentation therapy, and thus unlock market growth and improve access. But also may provide valuable insights into future dosing strategies. SPARTA's last patient, last visit milestone is scheduled for August. Top line results expected in late Q4 this year. Our second key program is alpha-1 Sub Q 15 percent, which entered Phase 3 with our first patient dosed in June 2026, following our successful Phase 1/2 study. The programme has the potential to transform the patient experience, by expanding treatment options through a more flexible and convenient subcutaneous formulation.

Taken together, these 2 programs reinforce our confidence in the long term outlook and opportunity for the Alpha-1 franchise. Approximately 85% of eligible patients still undiagnosed significant unmet need remains. By advancing the clinical evidence base and expanding treatment options, we believe we can help drive awareness, improve diagnosis broaden patient access and continue to grow the category further strengthening Grifols' leadership position in Alpha-1. Slide 12. As we continue to expand the long term opportunity for our business through innovation, we are also evolving our operating model to capture that opportunity more effectively translate it into sustainable growth and value creation. To accelerate execution of our strategic roadmap, we are reorganizing biopharma into 2 dedicated units.

Biopharma U.S. and Biopharma rest of world each built around its own self sufficient operating model with dedicated leadership and clear accountability for its respective market. Biopharma U. S. Remains our scaled, fully vertically integrated end to end platform with 2 manufacturing sites and around 280 donor centers. It is set up to serve the largest, most established plasma derived therapies market in the world where demand is expected to grow at a continued mid- to high single digit rate annually. Supported by our existing platform, we are well invested to support that growth and can continue to sharpen our focus on operational efficiency and portfolio expansion.

BioPharma Rest of World is a distinct, increasingly self sufficient growth platform with more than 130 donor centers and 5 manufacturing sites. Its priority is optimizing plasma allocation. Increasingly supplying Europe and the rest of the markets from ex U. S. Sources reducing reliance on U. S. Plasma and better aligning sourcing costs with pricing structures to optimize growth and profitability. Egypt and Canada are central to building that self sufficiency strengthening supply resilience and operational efficiency while increasing patient access to our therapies. Organizing around these 2 platforms gives each business the focus accountability and operating flexibility to execute within its respective market dynamics.

At the same time, bringing decision making closer to each business allows us to accelerate execution while continuing to build what we believe is the industry's most resilient highest value plasma platform. Let me close by illustrating on Slide 13 how Egypt enables the next phase of our global plasma sourcing strategy and the creation of a truly self sufficient rest of world platform. As we explained during our Q1 call, the long term vision behind our global plasma sourcing strategy is to increasingly supply Europe with plasma from Europe and Egypt, allowing more of our U. S. Collections to remain in The U. S.

Beyond the economics, this diversification reduces our exposure to any single geography at a time when the geopolitical environment increasingly rewards local self sufficiency. By 2029, we expect total ex U. S. Plasma collections to increase by around 2.5x, providing sufficient supply to fully support our European and rest of world demand. That compares with today where roughly 25% of U. S. Plasma collections are still needed to support sales outside The U. S. As that dependency unwinds, we progressively shift to a U.S. plasma collections for U.S. model unlocking significant plasma supply and optimization opportunities for our U. S. Platform, to support the expected strong and growing demand in The U. S.

Egypt is the primary driver of this shift. This year, Egypt already represents around 25% of our ex-U.S. plasma collections. And by 2029, we expect the contribution to grow to around 50% making Egypt our single largest ex U. S. Source of plasma and a globally recognized plasma hub under what we call the Grifols Seal of Quality and Excellence. The benefit goes well beyond supply security. As Egypt becomes an increasingly meaningful part of our plasma network, it strengthens supply resilience while significantly improving the economics of our sourcing model. Together with the operational optimization undertaken across our U. S.

Plasma network, these initiatives create a more resilient, more efficient and higher value plasma network, 1 that strengthens supply security, supports sustainable growth and enhances long term profitability. With that, I will hand it over to Rahul to walk you through the financials.

Rahul Srinivasan: Thank you, Roland. Turning to Slide 15. Our financial highlights for Q2 and H1 2026. We are pleased with our Q2 and first half performance. Results that reflect the resilience and strength of this business and the tireless efforts of our teammates across the entire group for which we are very thankful. Group net revenues reached €1.874 billion in second quarter, bringing first half revenues to €3.574 billion a growth of 2.6% at constant currency. As in Q1, biopharma again grew faster than the group as a whole, up 5.4% at constant currency. This also reflects the strategic repositioning that is underway in Diagnostics. And I will elaborate on this further on the following slide.

Reported gross margin was 37.6% for the quarter, and 37.1% for the first half. This was impacted by 1 off costs, primarily related to the closure of 29 U.S. donation centers. To help investors and analysts track our underlying progress, we are also disclosing gross margin excluding these 1 off costs which came in at 39.4% for the quarter and 38.6% for the first half. We expect reported gross margin to continue improving in the coming quarters. Adjusted EBITDA reached €472 million in the quarter, and €854 million for the first half, representing a 2.4% growth at constant currency with margin for the quarter expanding to 25.2% and for the first half to 23.9%, slightly ahead of H1 last year.

Group profit in H1 increased to $227 million up 28.7% year on year. And if we eliminated the impact of both positive and negative 1 offs, the year on year comparison is still a strong double digit improvement. We achieved $91 million in free cash flow before M&A for the first half of 2026, a $103 million year-on-year improvement, and I will elaborate on this free cash flow performance on a subsequent slide. Total net leverage stood at slightly below 4.2 times and net secured leverage at 2.7 times.

The mismatch between a higher average euro dollar for the period versus lower end of period FX rate used for the balance sheet translation creates notional releveraging But over a longer period of time, that should dissipate, consistent with our prior guidance that structural movements in euro dollar have a broadly neutral impact on leverage over time. So leverage remains stable, notwithstanding the FX related deleveraging in Q2, and we have $2 billion of liquidity. So our balance sheet overall is in a relatively strong position. On Slide 16, we summarize the net revenue performance of the business in the first half.

BioPharma remains both the bedrock as well as the growth engine of the group, and continues to benefit from strong momentum across our core markets. Immunoglobulins once again delivered a double digit growth with sub QIG returning to strong double digit growth during the quarter and for H1, confirming that the softer first quarter performance reflected timing rather than any change in underlying demand. Alpha-1 in our specialty protein portfolio also performed well. And continues to support our growth expectations for the full year. Due to the timing of the price concession for albumin in China in H2 last year, relative albumin H1 performance has been impacted.

We expect the H2 albumin performance to be in line with H2 last year. At Biotest, we are encouraged by the operational turnaround progress, and we are beginning to see that also come through in the Biotest growth rate with YIMMUGO sales ramping up. Turning to diagnostics. The year on year comparison reflects the dissolution of the QuidelOrtho joint business. However, the rest of the Diagnostics business continues to post year on year growth, and the team is executing on the Diagnostics repositioning plan hitting all relevant milestones. For BioSupplies, we expect a better H2 than H1. And more broadly, we remain comfortable with the outlook for this niche business in the medium term.

Within others, we have phased out a legacy contract manufacturing agreement at the end of 25, impacting the comparison in 2026. In short, the Grifols Group portfolio continues to perform in line with our expectations for the year, with the momentum of the biopharma business more than offsetting the planned strategic transition we are executing in Diagnostics and softness in Biosupplies and others. Slide 17. The headline numbers the 2.4% constant currency growth in group adjusted EBITDA, the 10-basis-point points improvement in adjusted EBITDA margin and biopharma adjusted EBITDA growing by over 5% on a constant currency basis. All mask the underlying drivers of that outcome.

I will spend some time unpicking this for you as I think the underlying drivers matter more than the headline outcome. In 2025, higher for the full year 2026. Starting with biopharma. EBITDA growth and margin progression is supported by 4 structural factors. First, immunoglobulins remain the largest contributor to both revenue and profitability, benefiting from continued momentum and an increasingly favorable product and geo mix. Executing our plans in albumin and alpha-1 and other proteins, as Roland alluded to, will further support profitability. Second, the efforts to support Biotest is yielding improvements operationally and making a growing contribution to group sales, and we expect to continue to support the YIMMUGO ramp up in the coming quarters.

Third, we are in the early stages of seeing the benefits from the confluence of our self sufficiency and plasma sourcing strategies. The continued ramp up of the EMA approved collections in Egypt, together with the optimization of our U. S. Donor center network, is improving both unit economics and plasma economics. And with the continued biopharma momentum that we expect, these benefits should be further amplified over time by operating leverage across the business. While the $40 million of 1 off costs, of which $25 million are noncash, resulting from the closure of 29 U.S. donor centers affect this year's reported EBITDA, they support a structurally more efficient operating model going forward.

And fourth, disciplined cost management as evidenced by our OpEx evolution, remains an important contributor. Also to round out the picture, the full year effect of the albumin pricing concession in China introduced in mid last year has been a headwind in H1 2026, and is now fully reflected in our comparable base aiding future year on year comparisons of quarterly performance. Taken together, these drivers give us confidence that the biopharma business is well positioned to continue delivering compelling EBITDA growth and margin progression over time.

In addition, in the rest of the group, we are executing our plans and hitting all the milestones with regards to the strategic repositioning of the Diagnostics business, be it the launch of our new blood typing platform that Nacho touched on, hitting development milestones in other platforms, be it MUNDAKA or ISARD, as well as the strategic freedom that the QuidelOrtho dissolution gives us. We remain on course to deliver EBITDA growth and margin improvement from this repositioning of the Diagnostics business over the coming years. As Nacho referenced earlier, we have the levers in place to deliver our adjusted EBITDA constant currency growth and margin guidance for 2026.

On Slide 18, the punch line is that we continue to progress our free cash flow generation efforts in a disciplined manner and we remain on track to deliver our full year free cash flow guidance. In the first half, free cash flow before M&A was positive €91 million, €103 million better than H1 2025 having benefited from some phasing. As we have guided to in the past, while adjusted EBITDA is negatively impacted by a depreciating U. S. Dollar, the impact on free cash flow before M&A remains broadly neutral. To support the continued momentum in biopharma, and our robust outlook for H2, there has been essential investment in inventory similar to Q1.

We continue to manage our working capital diligently and responsibly. CapEx levels are normalizing from the 2024-2025 peak. And as disclosed in Q1, we were required to classify the final Immuno Tech payment made to JPMorgan within financing activities following guidance from our auditors. Capitalized IT R&D is slightly higher as we successfully achieve various development milestones for example, within our Diagnostics business. And finally, we balanced the refinancing of some of our cheapest debt in our capital structure earlier this year, by proactively redeeming $500 million of our most expensive debt the 7.5% 2030 bonds, 7.5% 2030 bonds. And thereby, we expect to keep our cash interest cost levels in line with 2025.

In conclusion, our free cash flow trajectory is progressing as planned aligned with the typical seasonal patterns of the business and we remain on track to deliver our full year guidance. Finally, turning to Slide 19. I will repeat myself when I say that our balance sheet is in a really good place. No meaningful maturities for a while. Almost all the debt in the capital structure is either callable or can be repaid at par, allowing the company to optimize its cash interest cost at any point if it so chooses.

Strong support from institutional credit investors and banks, and rating agencies fully acknowledging the resilience of the business the progress that has been made and the proactive actions we have taken to considerably improve our balance sheet. With very strong liquidity levels of over 2 billion it offers significant downside protection and financial flexibility. Despite refinancing the very cheap debt earlier this year, we remain on course to maintain our 2025 cash interest costs. And in the status quo scenario, we remain committed to continuing to delever organically given the momentum of our biopharma business and the strong progress we are making in the strategic repositioning of our Diagnostics business.

With that, let me hand it back to Nacho to conclude the presentation.

Jose Ignacio Abia Buenache: Thank you, Rahul. I would like to conclude today's presentation with a few final remarks. Our first half performance reinforces our confidence that we are on to deliver our 26 objectives. The sustained strength of our immunoglobulin franchise continues to underpin our growth. While we expect albumin performance in China to stabilize in the second half, supporting a more balanced contribution across our protein portfolio. At the same time, our expanding alpha-1 clinical pipeline continues to strengthen that franchise and reinforces our long term growth opportunities. Biotest also continues to make progress in its turnaround. Contributing to a stronger performance at BioPharma. We also currently continue to make meaningful progress on our key strategic priorities.

Egypt and our broader self sufficiency platform remain a key differentiator and value drivers. structurally improving our cost structure and progressively reducing our reliance on U. S. Plasma. Together, these initiatives support the top line growth and margin expansion that remains a key priority for 2026 and onwards. Across our business, we continue to strengthen the foundation for long term growth through innovation, disciplined and consistent execution, with multiple key milestones across biopharma and diagnostics. These efforts continue to enhance the resilience of our business and position Grifols to capture attractive growth opportunities in the years ahead.

As Rahul outlined, we have also continued to strengthen our financial profile, delivering further EBITDA growth meaningful free cash flow improvement and the successful completion of our refinancing. Positioning us well to continue reducing leverage over time. Collectively, these actions are building a stronger, more efficient, more disciplined and increasingly cash generative company. Reinforcing our confidence in delivering our full year guidance while creating long term value. As we move forward, our focus remain clear, delivering on our commitments, further strengthening our financial profile and unlocking the full value of Grifols for all our stakeholders. As always, I would like to finish by thanking our employees, donors, customers, partners and shareholders for their continued trust and support.

We look forward to updating you on our progress next quarter. And with that, I will turn it back over to you, Daniel.

Daniel Segarra: Thank you. Now let's turn to the Q and A session. Please remember to star 5 again to get back on the list. Our first question today is coming from Charles Pitman from Barclays. Charles, please go ahead.

Charles Pitman: Hi, guys. Charles Pitman from Barclays. Thanks for taking my questions and congrats, Roland, on the next role. Thanks for your help over the past few years. Maybe 2 questions from me, please. Starting with Roland, you with CIDP, you mentioned recent market developments reinforce the importance for maintaining effective therapy options for CIDP patients. I was wondering could you elaborate on this? And when you say IG remains the preferred first line treatment, can you just provide any detail around whether that preferred market share you are seeing is declining at all in the face of competition?

Or whether new entrants are just growing the market, and therefore, that is why you remain confident in the continued growth you referenced? And then secondly, for Rahul, with respect to Egypt and thinking about the margin development and lead times of plasma that are usually on a lag, can you just remind us when we are expecting to see the benefit of Egypt's plasma coming through our margins and also when we expect to see the benefit of the U.S. donor center closure in the fourth quarter. Thank you.

Roland Wandeler: Yes, Charles. Well, thank you for your wishes. And happy to comment on CIDP. So with about 2 years into the launch of FcRn's we see that there is more and more real life experience out there. Looking at patients that switched and switched back. And you may have seen that some of the label language on the FcRn side was updated to reflect some of these data. And what we hear back from our thought leaders and from the physicians that we speak with is that in their mind, FcRn are a fantastic therapy for myasthenia gravis and have a very important role there changing lives and, you know, obviously, a great addition for any neurologist.

But if they look at CIDP, a multi factorial disease, they just say it is a disease that is predestined for broad mechanism of action like the 1 that you see from IGs. Given with what they have in terms of payer access, what we hear back from physicians is that is where they want to start their patients and they want to be very thoughtful which patients they transition over. Having said that, at the same time they are of course aware that there are other treatment options for any patients that do not do so well.

And if we look at the numbers, what we see is that in looking at the demand in the beginning of this year that IGs continue to grow in CIDP, Our brand continues to grow in CIDP. And yes, so we expect that overall what we are seeing in this class is that more patients get the benefit in later lines. Which is at the end of the day good for patients. But it also supports fully confidence that we have in the continued growth outlook for IG in this class.

Rahul Srinivasan: And on your second question, Charles, Egypt we are beginning to see some of the impact of Egypt come through in our numbers. Obviously, that ramps up as the year progresses. And you will see the full impact of the 1 million certainly as you go into 2027. You will see that come through in our numbers then. Similarly, for the U.S. center closures, you will see the impact or the benefit of that coming through towards the back end of this year, early next year as well and through our numbers. Alright. Thank you, Rahul.

Daniel Segarra: Thank you, Charles. Now is the time for Joaquin from GB Capital. Joaquin, please.

Joaquin Garcia-Quiros: Yes. Thank you for taking my questions. The first 1 is regarding albumin in China. You mentioned that prices have stabilized, but I remember that in the first quarter, you said that patients the number of patients was increasing Has that remained the same during the second quarter? And then earlier in the year, you pointed towards a strategy of slowing down IG in order to balance albumin IG, but IG has continued to grow at a very decent rate. I know you mentioned it will slow down a bit in the second half of the year, but still it will be ahead of what I was expecting. And I think a lot of people.

So has the strategies changed, or, did you find another way to balance Albumin and IG? If you can, talk a little bit about that. Thank you.

Roland Wandeler: Well, Joaquin, thank you. On albumin in China, what we focus on in this market, of course, is and user prescription and demand. And this is where we commented that we see signals of stabilization both in terms of price with our customers as well as prescriptions and pull through. In this market, we saw that in Q1, we continue to see this at the moment. Having said that, it is a market that had an impact of the government measures as you know. We have this reflected in our price adjustment mid last year, but since then have experienced ourselves a stabilization and are cautiously optimistic that we can build from there.

And on IG, I can just perhaps clearly just clarify that for IG, we have a twofold strategy, which is that we want to continue to go with the market in The U. S. And our core European markets. And selectively dial back on purpose in lower margin markets And that is what you see panning out. So basically, you see reflected strong continued demand in our core markets and in The U. S. And you will indeed see that over time that the phase out in these lower margin markets will come through later this year. But Rahul, if you want to add.

Rahul Srinivasan: I think it captures it well as well on Page 10, Joaquin, in terms of our outlook for h 26. Where we are guiding to mid- to high single digit growth in core markets, Could we grow IG more? Sure. But I think we are it is a deliberate strategy. To optimize the mix between growth and margin improvement. And that remains our focus.

Jose Ignacio Abia Buenache: And just to add here that, I mean, at the end, this what we try to do is a smart growth strategy and really focusing the customers, the regions and the products that will provide the better margin position. that is what XEMBIFY, you see that it will continue growing and will continue to grow very strong because we are building our position in the market. We are in IVIG well established. So I think that our strategy will continue growing. I mean, certainly, we believe in IG and we believe in the mean, in the strong demand of IG in the markets.

But we will do it in a smart way and certainly I mean, betting on those places, customers and regions, which can offer better profitability.

Daniel Segarra: You. Thank you, Joaquin. Now it is the turn of Guilherme Sampaio from Caixabank. Guilherme, please.

Guilherme Sampaio: Yes. Good morning. Thank you for taking my questions. And thank you, Roland, for this year. So first question on free cash flow. You have reached the year-on-year improvement in free cash flow implied in the top end of your guidance already in H1? Is there any factor that we should take into consideration that is preventing you from raising the free cash flow guidance at this stage? And the $25 million compensation due to the JV termination. I think it was scheduled to be to be paid this quarter. Just if you can confirm that it was paid or not and if it was accrued in some certain way. Either or not. And you mentioned some phasing.

If you can quantify the phasing around the free cash flow this quarter. The second question is regarding the execution risk. So there is been the market rumors that you might have certain execution risks in the ramp-up of your centers in Egypt. What kind of comfort or color could you provide regarding this business Thank you.

Rahul Srinivasan: Why do not I take the first 1, and I will start with the second 1 as well. And if either Roland or Nacho want to add, they can do so. On the first 1, Guilherme, around free cash flow, I did reference phasing deliberately so that you do not just take $103 million and add it to $467 million we delivered last year and say, hey, we are at $570 million. There are phasing aspects of it. You have mentioned some of it QuidelOrtho is also an aspect that is reflected in there. And we remain very much in the guidance of the $500 million to $575 million of free cash flow before M&A for the full year.

As you think about execution risks, look, we remain confident about the ramp up in Egypt. Just if ever you are in Egypt And you walk past our centers, you will see that they are packed nonstop. And this is only the first wave of donor center opening. So things are going there. very, going very well, and we do not anticipate any execution risks with that ramp up. We will have to obviously optimize it, so which is why we say 1 million in 2026. Ramping up to up to 3 million by 2029. I will leave it at that.

Jose Ignacio Abia Buenache: And just to add, I do not know what rumors you refer to. We have not heard any rumors. I actually think the execution in Egypt is working very well. We are very much on plan and on track to build the 20 donor centers that we wanted to build. As Rahul said, those donor centers are packed. And we have tons of donors waiting to donate. And we are already working into planning for the next centers that will be built over the next year. So I think it is working very well as planned and we have no notion of execution risk other than obviously, we will keep continuously in our attention. We will keep focusing on that.

Daniel Segarra: Thank you, Rahul, and thank you Nacho. Now let's move to Morgan Stanley. Thibault, please.

Thibault Boutherin: Yes. Thank you. Rahul, maybe just a clarification. I think I heard you say that the albumin outlook for H2 would be in line with H2 last year. Just if you could confirm this and if you meant in absolute terms or in terms of decline rates, basically, versus H2 last year? that is the first question. And also on albumin, if you could give us any idea of the growth ex China of the albumin franchise, if seeing some growth in H1, just so we sort of better forecast when we get out of the China base effect. And then second question on Biotest. So turnaround of Biotest has been definitely a driver of margin for the business.

How far are you on the story of turning around this business Can it continue to be a driver for margin in the next few years? Are you mostly through the improvement here? Thank you.

Rahul Srinivasan: Yes. Let me start with what I said on albumin. Where what I was referencing was the absolute level for H2, Rather than the growth rate. So please do not reflect any draconian scenarios. The absolute level Because remember, we the price concession was provided in mid last year. So that is why the absolute level is the right benchmark. Just in terms of growth ex China, I will let Roland pick that up in a moment. Let me answer your question on Biotest in the meantime. On BioTest, the operational turnaround is commencing now. We have a lot of runway on this topic, and we expect to make considerable progress in the coming quarters.

And certainly, it is a key part of the value driver going out through 2029.

Roland Wandeler: But on the albumin ex China, Roland, do you want to pick that up? On the albumin ex China, I differentiate there in the U. S, where we see high interest in our albumin in bags, where we are 1 of only 2 providers that offers that and where we are actively working to increase our supply for this differentiated presentation. And in the other markets, ex China, ex U. S, yes, in the first half, we have seen good growth. We are not disclosing the detailed growth number, but we have seen good growth in the first half of this year.

And Just To Perhaps Provide Context There, As You May Recall, In The Past, We Have Been Prioritizing China. And we discussed that we have opportunities in these other markets. The team has been executing against that. I think that is behind the growth that we see.

Daniel Segarra: Thank you so much, Roland. Let's move to the next question. Jaime Escribano, from Santander. Jaime, please.

Operator: Go ahead.

Jaime Escribano: Hi, good afternoon. Thank you. Yeah, first of all, thank you and good luck to Roland. My first question would be on diagnostics. So on diagnostics, after breaking the JV with ortho. Just thinking out loud, So can you elaborate a little bit on what opportunities new opportunities come in terms of selling the reagents to other customers and so on. From 27 onwards, I mean. And the second question would be regarding net financials, which in Q2 look quite low. I do not know if you have answered that, Rahul, but just if you can elaborate a little bit further. Thank you.

Jose Ignacio Abia Buenache: Yeah. Thank you. Thank you, Jaime. And let me explain about the diagnostic question. I mean, essentially, the collaboration with QuidelOrtho has been a very good collaboration for Grifols and QuidelOrtho over many years. And but this was coming to an end for a number of reasons. But specifically to your question about what this will provide, I think probably the most important benefit of this termination is actually the fact that it will open the possibilities for us that once the ISARD platform of immunoassay will be ready, we will be able to access that market without restrictions.

This is a $1 billion market opportunity. it is a very significant opportunity Of course, is some opportunities in our in the factory that was serving those reagents. We will continue looking for customers and even providing QuidelOrtho with some supplies. We have some supply agreements with them. But the largest opportunity that we will unveil is certainly the access to the immunoassays market once the ISARD platform will be ready around 2030-2031.

Rahul Srinivasan: And for the second 1, Rahul? Yeah. Net financials, Jaime, that is the impact of IFRS 9 as a result of the refinancing we did earlier this year. And that is 1 of the reasons why I have spent a lot more time focusing on cash interest costs. Cash is cash, and there is no--you are not exposed to the vagaries of accounting treatment. So IFRS 9 requires us to do a present value calculation as a result of the refinancing, and that resulted in this onetime gain I alluded to that when I talked about the onetime gains as well as the 1 time costs impacting our net income. that is what it refers to.

But the cash interest cost number that is going through our free cash flow, that is obviously that is just that is real cash. So that remains our area of focus.

Daniel Segarra: You so much, Raul. Thank you so much, Jaime. Let's move to the next question. Juan Ross from Alantra. Juan, please go ahead.

Analyst: Hello, good afternoon. Thank you for taking my questions. 2 please. First of all, earlier this year, CSL reduced its guidance, 2026 guidance for IG in The US by around $300 million. They were saying they were signing excess inventory. So could you please reconcile this with your current IG growth in The US market? Maybe you are experiencing know, different dynamics or you are gaining market share. Is it a matter of price? Maybe you can illustrate us in that sense, please. And second, regarding the regarding the gross margin, your adjusted margin gross margin fell 90 bps this quarter.

So maybe you could you provide us some more color, on the moving parts? what is China albumin? what is IG mix? what is pricing, what is CPL, FX. Maybe you can help us a little bit with that. Thank you.

Jose Ignacio Abia Buenache: Yeah. Yeah. Thank you, Juan. I mean, the first of all, we do not comment on our competitors messages in the market. So they obviously, they explain their story as they wish. We can comment only about what we see. And what we see in The U. S. Market and not only in The U. S, but in the rest of the world is a continued strong demand of immunoglobulin I think that the high single digit demand is there for IV. And in our case, obviously, the subcutaneous formulation growing very fast because we have started late and we are very quickly gaining market share.

But we our positive view is based on what we see and based on and that is what is driving our results as well. And I do not know, Roland, you want to complement this?

Roland Wandeler: No. Just to emphasize that the results that you see that we presented today for The U. S. Are all fully demand driven. So these are patients receiving medicines and looking at wholesaler inventory levels there were roughly stable around this period in the first half of the year. So all demand driven, as Nacho says.

Operator: And Alvaro, I think your question relates to gross.

Rahul Srinivasan: I think you are making reference to on Page 15, the 38.6% adjusted, and I think you are comparing it to the 39.1% in H1 2025. Have I got your question right? Correct. Okay. Yeah. So look, I think, as you said, there are a number of constituent parts I am not going to break out the various constituent parts, but let me walk you through some of those constituent parts. I talked about price and GeoMx being supportive. I talked about plasma costs being supportive from a CPL standpoint. We have the beginning of Egypt ramp up coming through. Those are all supportive of from an adjusted EBIT gross margin standpoint.

The negatives, we talked about the restructuring as you identified as well, the restructuring of the plasma centers. that is a significant number, right? that is 40 million. Of which 25 million is noncash. And then we also talked about BioSupplies and others being a lagging compared to 2025. So those are the key drivers of the difference between the 38.6% on an adjusted as well as the 30 or actually, the 37.1 and the 39.1%. And that is why we have included the 38.6 to help make the comparison better. Also remember, H1 last year we did not have albumin the impact of the albumin price.

That only came through the albumin price concession only came through in mid last year. So that is 1 of the key drivers impacting comparability between H1 2026 and H1 2025. So hopefully, that is comprehensive in our response.

Daniel Segarra: So much, Rahul. As we are close to an hour, let's take the very last question from Charlie from Bank of America. Charlie, please.

Charlie Haywood: Hi. Charles here with Bank of America. Thanks for taking the question. it is on the SPARTA AATD trial with data at the end of the year. Could you frame your confidence in that outcome trial given the data you have seen to date? And any expectations for the 120 mg or the 60 mg dose And if you do see a dose response, do you expect to see any patient shift to the higher dose? And how much upside could that offer? And then second question on that is if you do see a dose response, do you see a risk that you effectively validate the competitor's thesis for their regulatory pathway?

That higher trough AAT levels correlates to better clinical outcomes And how do you assess that? Thank you.

Roland Wandeler: Charles, happy to speak about Sparta. As mentioned, we have the last patient last visit in August. And obviously, right now, all the data is blinded. So we have not seen the data after that patient last visit. We will have the database lock, the cleaning of data. And as soon as we have the data available and the analysis done, of course, that is where we publish our top line data. We all look forward to it.

What we do know is that the SPARTA study was designed with all the insights of prior studies and specifically the treatment window was extended from 2 years in prior studies to 3 years to give enough time for the preservation of long tissue to actually come through. So we are obviously very confident in the study design that made SPARTA and in the way that the team executed. And we know that opinion leaders are very much looking forward to seeing this study. In that sense, opinion leaders are also very much looking forward to seeing the results between the 60 milligram and the 120-milligram dose.

Now having said that, the study is initially not powered for that. it is powered to look at the outcomes, which is a key part for us to show preservation of lung function in these patients. And as it comes to I think what it would mean is that the results will guide physicians in their daily practice. And as again physicians are very much looking forward to this data.

Rahul Srinivasan: Once we have the data, we will be able to comment more in response to that. I think the second question was just around competitor validation. I think outcomes data versus augmentation levels. Is a key differentiator that Sparta brings us. Particularly as you think about, some of the payer pressures and so on and so forth. I mean, it sets us up in a much better position. So we as I think as we said we have said all along, we are ready to compete. SPARTA is certainly a part of that, and we look forward to sharing the data as soon as it is available.

Daniel Segarra: Okay. Thank you so much. I say that was the last question for today. Thank you for joining us today and especially for your time during this busy reporting week. We look forward to speaking with you again next quarter. Thank you so much.

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