Q1 2024 Grifols SA Earnings Call

May 14, 2024

Operator: ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Music Music Music Music Music Music Music Music Music Music Music, ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Hello, everyone, and welcome to Grifols Conference. Today we will be sharing a business update on our first quarter financial results. Thank you very much for taking the time to join us. My name is Denis Segarra.

Denis Sagara: Hello, everyone, and welcome to Grifols' conference. Today we will be sharing a business update on our first quarter financial results. Thank you very much for taking the time to join us. My name is Denis Sagara.

Hello, everyone and welcome to grow your first conference call.

Speaker Change: We will be sharing this update on our first quarter financial results. Thank you very much for taking the time to join us.

Daniel Segarra: I'm Vice President of Investor Relations and Sustainability. Today, I'm joined by Grifols Executive Chairman Thomas Glanzmann, Chief Executive Officer Nat Chavia, and Roland Wandeler, President of BioPharm. Today's call will last about an hour, including a Q&A. As a reminder, this call is being recorded.

Denis Sagara: I'm Vice President of Investor Relations and Sustainability. Today, I'm joined by Grifols Executive Chairman Thomas Glanzmann, Chief Executive Officer Nat Chavia, and Roland Bandler, President of BioPharm. Today's call will last about an hour, including a Q&A. As a reminder, this call is being recorded.

Benny Segarra: My name is Benny Segarra, I'm, Vice President of Investor Relations and sustainability.

Speaker Change: Today I'm joined by default executive Chairman.

Speaker Change: Klansmen.

Notch Avia: She's executive officer, notch, Avia and rollout bundle a precedent of Biopharma.

Speaker Change: Today's call will last about an hour, including a Q&A session.

Notch Avia: As a reminder, this call is being recorded.

Daniel Segarra: All materials used during the call are available on the Investor Relations website at grifols.com. The transcript and video reply will also be available on the Investor Relations website within 24 hours. Turning to slide number two, I would first like to share a disclaimer about forward-looking statements. Forward-looking statements are subject to substantial risks and uncertainty. They are only valid on the day of the call, and the company is under no obligation to update or revise them.

Denis Sagara: All materials used during the call are available on the Investor Relations website at grifols.com. The transcript and video reply will also be available on the Investor Relations website within 24 hours. Turning to slide number two, I would first like to share a disclaimer about forward-looking statements. Forward-looking statements are subject to substantial risks and uncertainty. They are only valid on the day of the call, and the company is under no obligation to update or revise them.

Notch Avia: All materials used during the call and available on the Investor relation website at Grey Fox bet to come.

Notch Avia: The transcript and video replay will also be available on the Investor Relations website within 24 hours.

Benny Segarra: Turning to slide number two.

Investor Relations: First like to share a disclaimer on forward looking statements.

Investor Relations: Forward looking statements are subject to substantial risks and uncertainties.

Benny Segarra: They've got only ballots on the day of the call and the company is under no obligation to update or revise them.

Daniel Segarra: Default financial statements are prepared in accordance with EU, IFRS, and other applicable reporting provisions. These include alternative performance measures or APMs prepared under the Group Financial Reporting Model as defined by the Guidelines of the European Securities and Markets Authority. Please note that Grifols Management uses APMs to evaluate its financial performance, cash flow, and financial position as the basis for its operational and strategic decisions. These APMs are prepared for all time periods presented in this document. Reconciliation tables can be found on our website. With that, I would like to turn the call over to Thomas Glanzmann.

Denis Sagara: Default financial statements are prepared in accordance with EU, IFRS, and other applicable reporting provisions. These include alternative performance measures or APMs prepared under the Group Financial Reporting Model as defined by the Guidelines of the European Securities and Markets Authority. Please note that Grifols Management uses APMs to evaluate its financial performance, cash flow, and financial position as the basis for its operational and strategic decisions. These APMs are prepared for all time periods presented in this document. Reconciliation tables can be found on our website. With that, I would like to turn the call over to Thomas Glanzmann.

Benny Segarra: Could you first financial statements are prepared in accordance with EU I FRS another applicable reporting provisions.

Benny Segarra: These include alternative performance measures or a P M.

Speaker Change: And at the group financial reporting model as defined by the islands of the rupee in securities and not get so 36.

Speaker Change: Okay.

Griffes management: Please note that Griffes management uses a P M to evaluate its financial performance cash flow and financial position as the basis for it operational and strategic decisions.

Speaker Change: These eight P M I prepared for all time periods presented in this document.

Speaker Change: Reconciliation tables can be found in our website.

Speaker Change: With that I will like to turn the call over to Thomas Grantsman.

Thomas H. Glanzmann: Thank you, Danny. Good evening, afternoon, and morning to all on the call. It is great to be here with you today. Now, let me start by welcoming our new CEO, Nacho Abia, to Grifols. We are truly pleased to have him on board. He has been on the job for only six weeks, but he has hit the ground running and has come up to speed quickly, as you will see shortly. We look forward to his leadership as we move into the next successful chapter of the company's history.

Thomas H. Glanzmann: Thank you Danny good evening afternoon, and morning to all on the call. It is great to be here with you today now let me start by welcoming our new C. O notch Avia to Great Falls, we are truly pleased to have him on board. He has been on the job for only six weeks, but has hit the ground running and has come up to speed.

Roland: <unk> as you will see shortly we look forward to his leadership as we move into the next successful chapter of the company's history. I also welcome Roland to his first earnings call.

Thomas H. Glanzmann: I also welcome Roland to his first earnings call. With the changing of the guard, I would also like to take this moment to thank and recognize Raimon and Victor Grifols, who at the end of May will step down from their executive roles and become proprietary directors of Grifols.

Thomas H. Glanzmann: I also welcome Roland to his first earnings call. With the changing of the guard, I would also like to take this moment to thank and recognize Raimon and Vctor Grifols, who at the end of May will step down from their executive roles and become proprietary directors of Grifols. All of their many great contributions to Grifols over the past years have truly left a lasting imprint on the company. I am very pleased and thankful that they will continue to provide their valuable thoughts, insights, and advice as members of our board in the future.

Thomas H. Glanzmann: All of their many great contributions to Grifols over the past years have truly left a lasting imprint on the company. I am very pleased and thankful that they will continue to provide their valuable thoughts, insights, and advice as members of our board in the future. Thank you, Raimon and Vctor. I also want to share with you another significant change at the company. Alfredo Arroyo, who recently turned 67, decided and already informed me a year ago that he wanted to pursue his next chapter in life after a very successful career of more than 45 years in finance, including the last 17 as Grifols' CFO.

Speaker Change: With the changing of the guard I would also like to take this moment to thank and recognize Raymond and Victor Great Falls with the end of May we will step down from their executive roles and become proprietary directors of grid falls.

Speaker Change: All of their many great contributions to great falls over the past years have truly left a lasting imprint on the company I am very pleased and thankful that they will continue to provide their valuable thoughts insights and advice as members of our board in the future. Thank you.

Speaker Change: You Ramon and Victor.

Thomas H. Glanzmann: Thank you, Raimon and Vctor. I also want to share with you another significant change at the company. Alfredo Arroyo, who recently turned 67, decided and already informed me a year ago that he wanted to pursue his next chapter in life after a very successful career of more than 45 years in finance, including the last 17 as Grifols' CFO.

Speaker Change: I also want to share with you another significant change at the company.

Speaker Change: Oh, Frito Arroyo, who recently turned 67 decided and already informed me a year ago that he wanted to pursue his next chapter in life. After a very successful career of more than 45 years in finance, including the last 17 as Griffith CFO.

Thomas H. Glanzmann: We are grateful to have benefited from Alfredo's leadership and financial expertise since he joined Grifols in 2007, shortly after the company went public. Alfredo has been an invaluable member of the executive team overseeing the company's successful evolution during our critical growth years and effectively managing the impacts of the pandemic. On behalf of the company and the entire board of directors, I would like to thank Alfredo for his contributions over the past 17 years. We have begun searching for his successor.

Frito Arroyo: Oh well.

Alfred: We are grateful to have benefited from Alfred his leadership and financial expertise since he joined grid falls in 2007 shortly after the company went public I'll.

Alfredo: Alfredo has been an invaluable member of the executive team overseeing the company's successful evolution.

Alfred: Doing our critical growth years.

Alfredo: And effectively managing the impacts of the pandemic.

Speaker Change: On behalf of the company and the entire board of directors I would like to thank Alfredo for his contributions over the past 17 years.

Speaker Change: We have begun searching for Alfredo successor, the process will be thoughtful and thorough as he or she will be a key part of the management team taking griffiths into the future.

Thomas H. Glanzmann: The process will be thoughtful and thorough, as he or she will be a key part of the management team taking Grifols into the future. Alfredo will remain with the company throughout 2024 to ensure a smooth transition, which I personally very much appreciate. Now let's turn to my presentation. After closing a turnaround year in 2023 and delivering on all our commitments, this first quarter of 2024, as all of you know, was marked by an unprecedented and completely unwarranted attack by an opportunistic short seller, who this morning again issued a misleading report for their own financial gain. As you all know, we have already refuted all the false allegations and met all regulatory requirements.

Alfredo: Alfredo will remain with the company throughout 224 to ensure a smooth transition, which I personally very much appreciate.

Alfredo: Now, let's turn to my presentation.

Speaker Change: After closing a turnaround here in in 'twenty, three and delivering on all our commitments. This first quarter of 'twenty four as all of you know was marked by an unprecedented and completely unwarranted attack by an opportunistic short seller, who this morning again.

Speaker Change: Issued a misleading reports for their own financial gain.

Speaker Change: As you all know we have already refuted all the false allegations and met all regulatory requirements, the Spanish regulator and our external auditors confirmed and validated our financials and accounting practices. They also confirmed that related party transactions took place at arm's length can.

Thomas H. Glanzmann: The Spanish Regulator and our external auditors confirmed and validated our financial and accounting practices. They also confirmed that related party transactions took place at arm's length conditions. Also, as part of our ongoing progress to strengthen our communication and enhance our reporting practices with regulators and the capital markets, we have expanded our financial disclosures and simplified the use of alternative performance measures, building on what Danny mentioned. Throughout all this, we have stayed true to our mission and maintained our business focus. We continue to serve donors and deliver our life-saving medicines and healthcare solutions to our patients and customers.

Thomas H. Glanzmann: Spanish regulator, and our external auditors confirmed and validated our financial and accounting practices. They also confirmed that related party transactions took place at arm's length conditions. Also, as part of our ongoing progress to strengthen our communication and enhance our reporting practices with regulators and the capital markets, we have expanded our financial disclosures and simplified the use of alternative performance measures, building on what Danny mentioned. Throughout all this, we have stayed true to our mission and maintained our business focus. We continue to serve donors and deliver our life-saving medicines and healthcare solutions to our patients and customers.

Speaker Change: Nations Ali.

Danny: Also as part of our ongoing progress to strengthen our communication and enhance our reporting practices with the regulators and the capital markets. We have expanded our financial disclosures and simplified the use of alternative performance measures building on what Danny mentioned.

Alfredo: Throughout all of this we have stayed true to our mission and maintain our business focus we continued to serve donors and deliver our life saving medicines and health care solutions to our patients and customers. Furthermore, we successfully executed and remain.

Thomas H. Glanzmann: Furthermore, we successfully executed and remained focused on our priorities, implementing a series of improvements to our corporate governance, leadership, debt management, and innovation. With this in mind, I am really proud of the entire team who demonstrated an unwavering commitment to the company and to our mission of making a difference to patients, customers, and donors. On the corporate governance front, and as part of our commitment to simplify our structure, we have, as already mentioned, separated management from ownership.

Alfredo: Focus on our priorities implementing a series of improvements to our corporate governance leadership debt management and innovation.

Speaker Change: With this in mind I am really proud of the entire team who demonstrated an unwavering commitment to the company and to our mission of making a difference to patients customers and donors.

Speaker Change: On the corporate governance front and as part of our commitment to simplify our structure. We have has already mentioned separated management from ownership.

Thomas H. Glanzmann: Raimon Grifols and Victor Grifols made the thoughtful decision to transition out of their management roles to serve as proprietary directors on our board. Additionally, the board will soon be reinforced with two new independent members, both of whom will add value in finance and corporate governance. These appointments are pending approval at the upcoming AGM.

Speaker Change: Raymond referrals and Victor Gratefully made the thoughtful decision to transition out of their management roles to serve as proprietary directors on our board.

Speaker Change: Additionally, the board will soon be reinforced with two new independent members, both of whom will add value in finance and corporate governance. These appointments are pending approval at the upcoming AGM.

Thomas H. Glanzmann: Undoubtedly, another key organizational change is the appointment of NACCHO as Grifols CEO, clearly separating the chairman and CEO roles. I will continue in my executive role until February to support the transition, but at that point in time, the role of the chairman will no longer be an executive one. All in line with our plan and good corporate governance. Now, let me talk about our debt management. I am very pleased to confirm that the Shanghai Rust transaction will close in June now that all the domestic and overseas government approvals are in hand.

Thomas H. Glanzmann: Undoubtedly, another key organizational change is the appointment of Nacho as Grifols CEO, clearly separating the chairman and CEO roles. I will continue in my executive role until February to support the transition, but at that point in time, the role of the chairman will no longer be an executive one, all in line with our plan and good corporate governance. Now, let me talk about our debt management. I am very pleased to confirm that the Shanghai Russ transaction will close in June now that all the domestic and overseas government approvals are in hand.

Speaker Change: Undoubtedly.

Speaker Change: Other key organizational change is the appointment of Nacho as scriptural C O clearly separating the chairman and CEO roles I will continue in my executive role until February to support the transition, but at that point in time the role.

Nacho: The chairman will no longer be an executive one.

Nacho: All in line with our plan and good corporate governance.

Speaker Change: Now, let me talk about our debt management.

Nacho: I am very pleased to confirm that the Shanghai Ross transaction will close in June now that all the domestic and overseas government approvals are in hand.

Thomas H. Glanzmann: On the closing of the transaction, all of the proceeds, as previously communicated, will be fully allocated to reduce secured debt in line with our priority and our commitment. We also made significant progress in addressing the 25 maturities through the completed issuance in April of $1 billion in senior secure notes due in 2030. This transaction will further streamline our maturity profile and, together with the upcoming closing of the Shanghai Rust transaction, position us well on our path to address our overall debt.

Thomas H. Glanzmann: Upon the closing of the transaction... All of the proceeds, as previously communicated, will be fully allocated to reduce secured debt in line with our priority and our commitment. We also made significant progress in addressing the 25 maturities through the completed issuance in April of $1 billion in senior secure notes due in 2030. This transaction will further streamline our maturity profile and, together with the upcoming closing of the Shanghai Rust transaction, position us well on our path to address our overall debt.

Chairman: Upon the closing of the transaction.

Speaker Change: All of the proceeds as previously communicated we'll be fully allocated to reduce secured debt in line with our priority and our commitment. We also made significant progress in addressing the twenty-five maturities through the completed issuance in April of one.

Speaker Change: Billion in senior secured notes due in 2030.

Speaker Change: This transaction will further streamline our maturity profile and together with the upcoming closing of the Shanghai Russ transaction position us well on our path to address our overall debt.

Thomas H. Glanzmann: Turning briefly to innovation, we were pleased to report that our Phase III top-line results for fibrinogen have met the primary endpoint. We expect the regulatory approval process in Europe and the U.S. to begin in the fourth quarter of this year and are now on track for the launch in 2025.

Speaker Change: Turning briefly to innovation, we were pleased to report that our phase III topline results for fibrinogen have met the primary endpoint, we expect the regulatory approval process in Europe and the U S to begin in the fourth quarter of this year and are now on track for the launch in 'twenty five.

Speaker Change: Hi.

Thomas H. Glanzmann: Moving to our financial results, our first quarter performance was overall aligned with our plan and therefore in line with our full year guidance, which remains intact. Please note, all figures are presented on a consolidated basis, which includes biotests, unless otherwise highlighted. Our first quarter revenues exceeded $1.6 billion, up by 5.5% compared to Q1'23, a 6.8% increase, excluding the $19 million one-time commercial true-up in our diagnostics business last year. Both of these figures are at constant currency.

Speaker Change: Pivoting to our financial results.

Speaker Change: Our first quarter performance was over all aligned with our plan and therefore in line with our full year guidance, which remains intact.

Speaker Change: Please note all figures are presented on a consolidated basis, which include buyer test unless otherwise highlighted.

Speaker Change: Our first quarter revenues exceeded $1 6 billion up by five 5% compared to Q1 'twenty three.

Speaker Change: A six 8% increase excluding the 19 million one time commercial true up in our diagnostics business last year both of these figures at constant currency.

Thomas H. Glanzmann: Revenue growth was primarily driven by the strength of our biopharma business unit, which saw a 9.4% growth on a year-over-year basis in constant currency. We also delivered solid EBTA adjusted revenue of $350 million, representing a margin of 21.6%. On a like-for-like basis, which excludes 20% of Shanghai Ross EBT contribution, this represents a 280 basis point increase. Our free cash flow was negative $253 million, primarily due to non-recurring impacts in net working capital as we increased our plasma inventory levels to meet expected revenue growth, and simultaneously a delayed commercial payment of 150 million U.S. dollars from China that was expected for March but came in early April.

Speaker Change: Revenue growth was primarily driven by the strength of our Biopharma business unit, which saw a 9.4% growth on a year over year basis in constant currency.

Speaker Change: We also delivered solid EBITDA adjusted of $350 million, representing a margin of 21, 6% on a like for like basis, which excludes 20% of Shanghai Ross EBIT contribution. This represents a 280.

Speaker Change: Basis point increase.

Speaker Change: Our free cash flow was negative $253 million, primarily due to nonrecurring impacts in net working capital as we increased our plasma inventory levels to meet expected revenue growth.

Speaker Change: And simultaneously a delayed commercial payment of 150 million U S dollars from China that was expected for March but came in early April.

Thomas H. Glanzmann: Improving our free cash flow is Grifols' top priority, and we have a clear line of sight to a stronger free cash flow generation through the remainder of 2024. Nacho will address this shortly. Turning to our financial position, the company's leverage ratio as per the credit agreement increased in the short term to 6.8 times due to the non-recurring impacts of working capital. As a reminder, we will use all 1.6 billion of Shanghai Russia's proceeds to pay down secure debt. Considering this, the Performa Leverage Ratio stands at 5.7 times at the end of March 24th.

Thomas H. Glanzmann: Improving our free cash flow is Grifols' top priority, and we have a clear line of sight to a stronger free cash flow generation through the remainder of 2024. Nacho will address this shortly. Turning to our financial position, the company's leverage ratio as per the credit agreement increased in the short term to 6.8 times due to the non-recurring impacts of working capital. As a reminder, we will use all 1.6 billion of Shanghai Russia's proceeds to pay down secure debt. Considering this, the proforma leverage ratio stands at 5.7 times at the end of March 24.

Nacho: Improving our free cash flow is grateful top priority and we have clear line of sight to a stronger free cash flow generation through the remainder of 224 Nacho will address this shortly.

Nacho Rodriguez: Turning to our financial position the company's leverage ratio as predict credit agreement increased in the short term to 6.8 times due to the nonrecurring impacts in working capital as a reminder, we will use all $1 6 billion of Shanghai Ross's proceeds to pay down secured debt.

Jaime Escribano: Considering this the pro forma leverage ratio stands at five seven times at the end of March 24.

Thomas H. Glanzmann: We remain confident of our continued progress and the improvement of all key financial metrics throughout the year as we drive towards our full year 24 guidance. Lastly, our plasma supply increased by 8% versus Q1-23 and the cost per liter declined by 2% in March 24 compared to December 23. This cost decline follows a 22% drop from July 22 to December 23.

Thomas H. Glanzmann: We remain confident of our continued progress and the improvement of all key financial metrics throughout the year as we drive towards our full year 24 guidance. Lastly, our plasma supply increased by 8% versus Q1-23, and the cost per liter declined by 2% in March 24 compared to December 23. This cost decline follows a 22% drop from July 22 to December 23.

Nacho Rodriguez: We.

Speaker Change: Remain confident of our continued progress and the improvement of all key financial metrics throughout the year as we drive towards our full year 'twenty for guidance.

Speaker Change: Lastly, our plasma supply increased by 8% versus Q1, 'twenty three and the cost per liter declined by 2% in March 24, compared to December 23.

Speaker Change: This cost decline follows a 22% drop from July 22 to December 23.

Thomas H. Glanzmann: Taking a closer look at our revenue performance, the first quarter growth was driven primarily by a 9.4% increase in the biopharma unit, as mentioned, on a constant currency basis. This figure underscores the very strong momentum of our plasma business. Led by the growth of Biopharma, Grifols is poised to generate more than $7 billion in revenues in 2024, exceeding our record high revenue in 2023.

Speaker Change: Taking a closer look at our revenue performance. The first the first quarter growth was driven primarily by a nine 4% increase of the Biopharma unit as mentioned.

Speaker Change: On a constant currency basis. This figure underscores the very strong momentum of our plasma business.

Speaker Change: Led by the growth of Biopharma grid false is poised to generate more than $7 billion in revenues in 'twenty four exceeding our record high revenue in 'twenty three.

Thomas H. Glanzmann: This growth is underpinned by strong market dynamics, including robust underlying demand supported by a solid plasma supply. Within Biopharma, our key contributors are our flagship immunoglobulin franchise, which grew by 13 percent, driven by our subcutaneous immunoglobulin, which had a remarkable increase of 62 percent in the quarter. Albumin increased by 7 percent.

Thomas H. Glanzmann: This growth is underpinned by strong market dynamics, including robust underlying demand supported by a solid plasma supply. Within biopharma, our key contributors are our flagship immunoglobulin franchise, which grew by 13% driven by our subcutaneous immunoglobulin, which had a remarkable increase of 62% in the quarter. Albumin increased by 7%.

Biopharma Executive: This growth is underpinned by strong market dynamics, including robust underlying demand supported by a solid plasma supply.

Biopharma Executive: Within Biopharma are key contributors are a flagship immunoglobulin franchise, which grew by 13% driven by our subcutaneous immunoglobulin, which had a remarkable increase of 62% in the quarter albumin increased by 7%.

Thomas H. Glanzmann: All of these figures are on a constant currency basis. We are observing and benefiting from significant market growth outside the U.S., which is upsetting slower growth in the U.S. Our commercial efforts continue to focus on bolstering our growth trajectory in the U.S. Turning to diagnostics, the fundamentals of our diagnostics business remain strong as we saw 2.7 revenue growth on a constant currency basis, excluding the one-off revenues from the first quarter of 23. Our blood typing solutions reported low double-digit growth, and the performance of NAT was impacted by the timing of shipments to China.

Thomas H. Glanzmann: All of these figures are on a constant currency basis. We are observing and benefiting from significant market growth outside the U.S., which is upsetting slower growth in the U.S. Our commercial efforts continue to focus on bolstering our growth trajectory in the U.S. Turning to diagnostics, the fundamentals of our diagnostics business remain strong as we saw a 2.7 revenue growth on a constant currency basis, excluding the one-off revenues from the first quarter of 2023. Our blood typing solutions reported low double-digit growth, and the performance of NAT was impacted by the timing of shipments to China.

Biopharma Executive: All of these figures are in a constant currency basis.

Speaker Change: We are observing and benefiting from a significant market growth ex U S, which is offsetting slower growth in the U S.

Speaker Change: Our commercial efforts.

unknown: You need to focus on bolstering our growth trajectory in the U S.

Speaker Change: Yeah.

Speaker Change: Turning to diagnostics the fundamentals of our diagnostics business remained strong as we saw two seven revenue growth on a constant currency basis, excluding the one off revenues from the first quarter of 'twenty three.

Speaker Change: Our blood typing solutions reported low double digit growth.

Speaker Change: And the performance I mean, a T was impacted by the timing of shipments to China.

Thomas H. Glanzmann: Turning to Biosupplies, despite reporting a significant decline, Biosupplies performed as we had planned, impacted by phasing, which we anticipate will be more than offset by the robust revenue growth we are expecting starting in the second quarter of this year. Now turning to Margin. Adjusted EBTA increased to EUR 350 million, representing a 21.6% margin, up 280 basis points compared to Q1'23 like-for-like, which excludes 20% of Shanghai Russell's contribution. Please bear in mind that since January 1, 2024, in light of the upcoming Shanghai Ross deal, we are considering Shanghai Ross as an asset held for sale and consolidating only 6% of its net profit in 24 versus 26% in 23. Therefore, Shanghai Ross contributes only $0.5 million to EBTA in Q124.

Thomas H. Glanzmann: Turning to Biosupplies, despite reporting a significant decline, Biosupplies performed as we had planned, impacted by phasing, which we anticipate will be more than upset by the robust revenue growth we are expecting starting in the second quarter of this year. Now turning to Margin. Adjusted EBTA increased to EUR 350 million, representing a 21.6% margin, up 280 basis points compared to Q1'23 like-for-like, which excludes 20% of Shanghai Russell's contribution. Please bear in mind that since January 1, 2024, in light of the upcoming Shanghai-Rus deal, we are considering Shanghai-Rus as an asset held for sale and consolidating only 6% of its net profit in 2024 versus Therefore, Shanghai Ross contributes only $0.5 million to EBTA in Q124.

Speaker Change: Turning to bio supplies, despite reporting a significant decline buyer supplies performed as we had planned impacted by phasing, which we anticipate to be more than offset by the robust revenue growth. We are expecting starting in the second quarter.

Speaker Change: Of this year.

Speaker Change: Now turning to margin.

Speaker Change: Adjusted EBITDA increased to Europe, $350 million, representing a 21, 6% margin up 280 basis points compared to Q1, 'twenty three like for like which excludes 20% of Shanghai Russia's contribution. Please.

Speaker Change: Please bear in mind that since January one 'twenty four in light of the upcoming Shanghai Raw steel, we are considering Shanghai Ross as an asset held for sale and consolidating only the 6% of its net profit in 24 versus 26% in 'twenty.

Speaker Change: Three.

Speaker Change: Therefore, Shanghai Ross contributes only point 5 million to EBITDA in Q1 24 for your reference these contributions represent euro 11 million in Q1, 'twenty, three and you're at $25 million in Q4 23.

Thomas H. Glanzmann: For your reference, these contributions represent Euro 11 million in Q1'23 and Euro 25 million in Q4'23. EBTA margin in Q1 was also impacted by the lower absorption of operating expenses as the weight of revenue in Q1 is lower compared to upcoming quarters. This sales pattern had an impact on profitability this quarter, which we were already factoring in as part of our full year 24 guidance, and it is the baseline for sequential improvement throughout the year.

Speaker Change: EBITDA margin in Q1 was also impacted by the lower absorption of operating expenses as the weight of revenue in Q1 is lower compared to upcoming quarters.

Speaker Change: The sales pattern had an impact on profitability this quarter, which we were already factoring in as part of our full year 'twenty for guidance and it is the baseline for the sequential improvement throughout the year.

Thomas H. Glanzmann: As Nacho will explain, we expect to deliver sequential improvement in profitability in the upcoming quarters, driven by increased revenue, improved product mix, operational leverage, and ongoing benefits from a decline in the CPL throughout the remainder of the year, considering the nine-month inventory lag, which is characteristic of the industry. Now, turning to cash flow. As I mentioned in my opening remarks, free cash flow was primarily impacted by non-recurring items that affected net working capital. The negative free cash flow of $253 million in the first quarter of 2024 was driven primarily by a negative net working capital of $339 million.

Thomas H. Glanzmann: As Nacho will explain, we expect to deliver sequential improvement in profitability in the upcoming quarters, driven by increased revenue, improved product mix, operational leverage, and ongoing benefits from a decline in the CPL throughout the remainder of the year, considering the nine-month inventory lag, which is characteristic of the industry. Now, turning to cash flow. As I mentioned in my opening remarks, free cash flow was primarily impacted by non-recurring items that affected net working capital. The negative free cash flow of $253 million in the first quarter of 2004 was driven primarily by a negative net working capital of $339 million.

Speaker Change: As Nacho will explain we expect to deliver sequential improvement in profitability in the upcoming quarters, driven by increased revenue improved product mix operational leverage and ongoing benefits from a decline in the C. P. L. Throughout the remainder of the year considered.

Speaker Change: In the nine months inventory lag, which is characteristic of the industry.

Jaime Escribano: Now turning to cash flow.

Jaime Escribano: As I mentioned in my opening remarks free cash flow was primarily impacted by nonrecurring items that affected net working capital the.

Jaime Escribano: The negative free cash flow of $253 million in the first quarter of 'twenty four.

Speaker Change: It was driven primarily by negative net working capital of $339 million.

Thomas H. Glanzmann: Despite this, I want to emphasize our confidence in upcoming improvements and in our underlying actions to make that happen. So let me unpack that figure and give you a sense of what the key factors were triggering this result. As the company increased inventories to meet expected strong revenue growth in the upcoming quarters, Q124 working capital includes an inventory buildup amounting to $130 million. However, we believe that there is still room for improvement to optimize this, as NACCHO will discuss later.

Thomas H. Glanzmann: Despite this, I want to emphasize our confidence in upcoming improvements and in our underlying actions to make that happen. So let me unpack that figure and give you a sense of what the key factors were triggering this result. As the company increased inventories to meet expected strong revenue growth in the upcoming quarters, Q124 working capital includes an inventory build-up amounting to $130 million. However, we believe that there is still room for improvement to optimize this, as NACCHO will discuss later.

Speaker Change: Despite this I want to emphasize our confidence in upcoming improvements in and in our underlying actions to make that happen.

Speaker Change: So let me unpack that figure and give you a sense of what the key factors were triggering this result.

Jaime Escribano: As the company increased inventories to meet expected strong revenue growth in the upcoming quarters Q1, 'twenty four working capital includes an inventory buildup amounting to $130 million. We believe that there is still room for improvement to optimize this is nacho will discuss later.

Thomas H. Glanzmann: Accounts receivable finished $154 million higher due to a delay in the commercial payment of $150 million that I mentioned from our main customer in China, which was subsequently received on April 2nd. We also had an increase in our accounts payable in the quarter of $55 million as the accounts payable ratio abnormally increased to 60 days on December 23.

Jaime Escribano: Accounts receivable finished hundred and 54 million higher due to a delay in the commercial payment of 150 million that I mentioned from our main customer in China, which was subsequently received on April 2nd.

Nacho: We also had an increase in our accounts payable in the quarter of 55 million as the accounts payable ratio abnormally increased to 60 days in December 23, and.

Speaker Change: In Q1, 'twenty four hit normalized back to 55 days. So we are not expecting such fluctuations going forward.

Thomas H. Glanzmann: In Q1-24, it normalized back to 55 days, so we are not expecting such fluctuations going forward. With a $150 million payment collected and receivables and inventory buildup in the process of being normalized, we expect a meaningful recovery of free cash flow starting in Q2 24 and then continuing throughout the year. As will be discussed in more detail in a moment, we anticipate significant improvements in upcoming quarters, which will enable us to achieve at a minimum the full year 24 guidance of $5 million positive free cash.

Speaker Change: With a $150 million payment collected in receivables and inventory buildup in the process of being normalized we expect a meaningful recovery of free cash flow starting in Q2, 24, and then continuing throughout the year.

Speaker Change: Has it will be discussed in more detail in a moment, we anticipate significant improvements in upcoming quarters, which will enable us to achieve at a minimum the full year 'twenty for guidance of 5 million positive free cash flow.

Thomas H. Glanzmann: It is worth mentioning that we had an impact of EUR 37 million of extraordinary items in the free cash flow in the first quarter. Most of these were related to CAPEX in Egypt, where we continue to execute our growth plan. To a lesser extent, it includes some restructuring costs linked to the extension of the Operational Improvement Plan.

Thomas H. Glanzmann: It is worth mentioning that we had an impact of Euro 37 million of extraordinary items in the free cash flow in the first quarter. Most of these were related to CAPEX in Egypt, where we continue to execute our growth plan. To a lesser extent, it includes some restructuring costs linked to the extension of the Operational Improvement Plan.

Speaker Change: It is worth mentioning that we had an impact of your 37 million of extraordinary items in the free cash flow in the first quarter. Most of these were related to Capex in Egypt, where we continue to execute our growth plan to a lesser extent it includes some restructuring costs.

Speaker Change: Linked to the extension of the operational improvement plan.

Thomas H. Glanzmann: Be assured that generating free cash flow is our highest priority, and we are focused on activating all possible levers to enhance cash generation in the short, medium, and long term. With that, I will now turn the call over to Nacho, who will not only introduce himself but also provide you with our priorities and outlook for the rest of the year as we, together with the Grifols team, continue to move the company forward. Thank you for your attention. Thank you.

Speaker Change: Be assured that generating free cash flow is our highest priority and we are focused on activating all possible levers to enhance to enhance cash generation in the short medium and long term.

Nacho: With that I will now turn the call over to Nacho will not only introduce himself, but also provide you with our priorities.

Nacho: And outlook for the rest of the year as we together with the grateful team continue to move the company forward I. Thank you for your attention.

Speaker Change: Okay.

Nacho Abia: Thank you, Thomas, for your words, and thank you, everyone, for joining the call today. First and foremost, as a newcomer to the team, let me begin by sharing a bit about myself. I am an engineer at heart, driven by challenges, and I have a results-oriented mindset and a commitment.

Thomas H. Glanzmann: Thank you. Thank you Thomas for your worse and thank you everyone for joining the call today.

Nacho: First and foremost as a newcomer to the team let me begin by sharing a bit about myself.

Thomas: I am an engineer at heart, driven by challenges and I have a resource oriented mindset and a commitment to Fox.

Nacho Abia: This approach has brought me here today as I am convinced Grifols offers an incredible opportunity to unlock tremendous potential built upon its rich history and solid foundation in an exciting and growing industry. By building on our legacy, I am committed to steering the company forward and serving as a catalyst for positive change. As you know, I'm originally from Barcelona, and I have spent most of my career with Olimpia, serving for more than two decades in a number of capacities and geographies, including the United States for the last 30 years.

Nacho Abia: This approach has brought me here today as I am convinced Grifols offers an incredible opportunity to unlock tremendous potential, built upon its rich history and solid foundation in an exciting and growing era. By building on our legacy, I am committed to steering the company forward and serving as a catalyst for positive change. As you know, I'm originally from Barcelona, and I have spent most of my career at Olympia, serving for more than two decades in a number of capacities and geographies, including the United States for the last 30 years.

Speaker Change: Our approach has broken me here today as I'm convinced greif false offers incredible opportunity to unlock tremendous potential buildup on it rich history and solid foundation in an exciting and growing industry.

I'm: By building on our legacy I'm committed to a steering the company forward and serving as a catalyst for positive change.

Speaker Change: As you know.

Speaker Change: I'm originally from Barcelona, and I have spent most of my career at Olympias, serving for more than two records in a number of capacities and geographies, including the United States for the last 13 years.

Nacho Abia: In my former company, I led significant strategic initiatives that transformed and globalized the company, enhanced operations, and delivered sustainable business improvement. These experiences will serve me well to define and execute the next chapter of Grif. First, addressing cash flow and leverage, followed by a sustainable plan to increase revenue and expand margins over the years to come. And all that with the strong backbone of our powerful commitment to improve patients' lives across the world.

Nacho Abia: In my former company, I led significant strategic initiatives that transformed and globalized the company, enhanced operations, and delivered sustainable business improvement. These experiences will serve me well to define and execute the next chapter of Grifols. First, addressing cash flow and leverage, followed by a sustainable plan to increase revenue and expand margins over the years to come. And all that with the strong backbone of our powerful commitment to improve patients' lives across the world.

Speaker Change: My former company I, let significant strategic initiative to transform and globalize the company enhanced operations and deliver sustainable business improvement.

Greenfields: These experiences will serve me well to define and execute the next chapter of Greenfields.

Speaker Change: First addressing cash flow and leverage followed by a sustainable plan to increase revenue and expand margins over the years to come.

Speaker Change: And all of that with a strong backbone of our powerful commitment to improve patients life across the world.

Nacho Abia: I see a remarkable combination of opportunities and expertise that will take us to achieve those goals. We are a company with an inspiring mission to enhance patient health and well-being. Having always been passionate myself about the great honor and responsibility to be part of the healthcare industry, I feel that this step in my career is a natural, personal, and professional one. I want to begin by telling you what I've learned over my first six weeks at this company and why I'm excited for the future. During this time, I visited offices and met with people in Spain and the United States.

Nacho Abia: I see a remarkable combination of opportunities and expertise that will take us to achieve those goals. We are a company with an inspiring mission to enhance patient health and well-being. Having always been passionate about the great honor and responsibility to be part of the healthcare industry, I feel that this step in my career is a natural, personal, and professional one. I want to begin by telling you what I've learned over my first six weeks at this company and why I'm excited for the future. During this time, I visited offices and met with people in Spain and the United States.

Speaker Change: I see every market or a combination of opportunities and expertise that will take us to achieve those goals.

Speaker Change: We're a company with an inspiring mission to enhance patient health and wellbeing.

Speaker Change: Having always been passionate and myself about the great honor and responsibility to be part of the health care industry I feel that this is a step in my career is a natural personal and professional fit.

Speaker Change: Okay.

Nacho Abia: These insightful meetings span across all functions within the organization. The first thing I noticed at Grifols is that our team has outstanding dedication and devotion to our mission. This idea of human-to-human medicine is truly embraced by all Grifols employees, and I am convinced that the solid commitment of our people has been and will be a continuous key success. The company also has challenges, and I'll talk about them later. But at the same time, the business foundation is extremely solid.

Nacho Abia: These insightful meetings span across all functions within the organization. The first thing I noticed at Grifols is that our team has outstanding dedication and devotion to our mission. This idea of human-to-human medicine is truly embraced by all Grifols employees, and I am convinced that the solid commitment of our people has been and will be a continuous key success. The company also has challenges, and I'll talk about that later. But at the same time, the business foundation is extremely solid.

Speaker Change: I want to begin by telling you what I've learned over my first six weeks in this company and why I'm excited for the future to come.

Speaker Change: During this time I visited officers and met with people in Spain and in the United States, There's insightful meetings and span across all functions within the organization.

Speaker Change: The first thing I noticed that grateful that our team has an outstanding dedication and devotion to our mission.

Speaker Change: This idea of human to human medicine is truly embraced by all grateful to employees and I'm convinced that solid commitment of our people has been and will be a continuous key success factors.

Speaker Change: The company also has challenges and I'll talk later about them.

Speaker Change: At the same time the business Foundation is extremely solid we operate in a market, which is nicely growing high single digits and this bear with investments. The company has done to be prepared for the future give me confidence that those challenges will be others soon.

Nacho Abia: We operate in a market that is growing nicely, in high single digits, and this, paired with the investments the company has made to be prepared for the future, gives me confidence that those challenges will be addressed. The COVID-19 pandemic was a difficult period for the plasma industry, and for Grifols as well.

Speaker Change: The COVID-19 pandemic was a difficult period for the plasma industry.

Oswald: And for Greif was Oswald.

Nacho Abia: But as the saying goes, never let a good crisis go to waste, and Grifols took full advantage of those times to emerge as a renovated company. And the efforts and investments that were done following that period will fuel our profitable growth moving forward. During my first weeks at the company, I also learned about how capital-intensive this industry is and how critical it is to act decisively and well in advance in order to be able to meet future demands. Grifols did that, and thanks to it, we are now well prepared to successfully face the years ahead. However, as you know well, those necessary investments also significantly increase our leverage and our cash consumption.

Nacho Abia: But as the saying goes, never let a good crisis go to waste, and Grifols took full advantage of those times to emerge as a renovated company, and the efforts and investments that were made following that period will fuel our profitable growth moving forward. During my first weeks at the company, I also learned about how capital-intensive this industry is and how critical it is to act decisively and well in advance in order to be able to meet future demands. Grifols did that, and thanks to it, we are now well prepared to successfully face the years ahead. However, as you know well, those necessary investments also significantly increase our leverage and our cash consumption.

Oswald: But as the saying goes never let a good crisis go to waste and Grateful took full advantage from those times to Americas renovated company and the Air Force one investments at a weighted on following that period will fuel our profitable growth moving forward.

Grateful: So in my first weeks at the company I have also learned about how capital intensive is this industry.

Grateful: How critical is to act decisively on well in advance in order to be able to meet future demand.

Grateful: Grateful to lead that and thanks to it we are now well prepared to successfully face the years to come.

Speaker Change: However, as you know well those necessary investment also increased significantly lower significantly our leverage and our cash consumption.

Nacho Abia: And I want to reassure all of you that improving cash flow and reducing leverage will be my most important priority move. We have aligned the organization and started to implement cash flow improvement measures, and I am confident results will be shown soon. At the same time... We will continue working to strengthen our commercial organization, especially in the United States, to build on existing strategic initiatives and product launches to secure and enlarge our market.

Nacho Abia: And I want to reassure all of you that improving cash flow and reducing leverage will be my most important priority moving forward. We have aligned the organization and started to implement cash flow improvement measures, and I am confident results will be shown soon. At the same time... We will continue working to strengthen our commercial organization, especially in the United States, to build on existing strategic initiatives and product launches to secure and enlarge our market.

Speaker Change: And I want to reassure all of you that to improve cash flow and reduce leverage will be my most important priority moving forward.

Russell: We have aligned the organization and are starting to implement already cash flow improvement measures and I'm confident Russell's will be shown soon.

At the same time.

Russell Smith: We will continue working to strengthen our commercial organization, especially in the United States to harvest, our existing strategic initiatives and product launches to secure and a larger market share.

Nacho Abia: As I am sure that once the concerns about free cash flow and leverage are substantially mitigated, the focus, your focus as well, will be back to growth and higher margins. From here, let me share with you my views on the business and what we can expect. Allow me to focus on 2024 and not go beyond that today, as I am still working with the team to fully assess our mid- and long-term objectives.

Russell Smith: I'm sure that once the concerns about free cash flow and leverage will be substantially mitigated the focus on your photos as well will be back to growth and further margin expansion.

Russell Smith: Yeah.

Russell Smith: From here, let me share you with my views on the business and why do we kind of expect this year.

Speaker Change: Allow me to focus on 2024, and not comment beyond that today, because I'm still working with the team to fully assess our meet our long term opportunities.

Nacho Abia: For now, the most important point I'd like to reiterate is that, based on all my conversations and observations, my impression is that the company is well on track to reach its full year 2024 guidance, as Thomas already said. In order to do that, following the pattern from the previous year, we are forecasting a significant revenue surge in the second half of this year, with growth accelerating to 10-12% on a constant currency. Let me walk you through the factors that will drive this acceleration to give you more clarity about how we plan. The first is growth from our immunoglobulin trench.

Nacho Abia: For now, the most important point I'd like to reiterate is that, based on all my conversations and observations, my impression is that the company is well on track to reach its full year 2024 guidance, as Thomas already mentioned. In order to do that, following the pattern from the previous year, we are forecasting a significant revenue surge in the second half of the year, with growth accelerating to 10-12% on a constant currency. Let me walk you through the factors that will drive this acceleration to give you more clarity about how we plan. The first is growth from our immunoglobulin trend.

Speaker Change: For now the most important point I'd like to reiterate is that based on all my conversations and observations my impression is that the company is well on track to reach its full year 'twenty 'twenty four guidance stomach as already mentioned.

Speaker Change: In order to do that following the pattern from previous year, we're forecasting a significant revenue short in the second half of the year with growth accelerating to 10, 12% on a constant currency basis.

Speaker Change: Let me walk you through the factors that will drive this acceleration to give you more clarity about how we plan to achieve it.

Speaker Change: The first is growth from our immuno Golar will inflight franchise, we have already seen a significant growth outside the U S that will continue and in U S. Traditionally the market tend to increase inventory days in the channels towards year end that normalize in the first half of the year to accelerated again in the second half.

Nacho Abia: We are already seeing significant growth outside the U.S. that will continue, and in the U.S., traditionally, the markets tend to increase inventory days in the channels towards year-end, which normalizes in the first half of the year, to accelerate again in the second half. The commercial and supply chain teams are already working closely to ensure the growing demand will. The second driver is that we expect our highly profitable subcutaneous immunoglobulin to continue gaining traction and contributing to the product.

Nacho Abia: We are already seeing significant growth outside the U.S. that will continue. And in the U.S., traditionally, the markets tend to increase inventory days in the channels towards year-end but normalize in the first half of the year, to accelerate again in the second half of the year. The commercial and supply chain teams are already working closely to ensure the growing demand will. The second driver is that we expect our highly profitable subcutaneous immunoglobulin to continue gaining traction and contributing to the product.

Speaker Change: The commercial and supply chain teams are already working closely to ensure they grow in demand will be met.

Speaker Change: The second driver is that we expect our highly profitable subcutaneous immunoglobulin to continue gaining traction and contributing to their product mix.

Nacho Abia: This is one of our most relevant products, and despite being launched in 2019, we're seeing it as a critical driver of growth, and we expect to keep on tapping its full potential. Our revenue projections are also supported by an improved performance in albuming, as we know China will continue to grow in the coming quarters. We also see our Alpha One franchise continuing to show stronger positive momentum in key markets following the introduction of a new specialty pharmacy partner in the U.S., which further enhances our service.

Speaker Change: There's one of our most relevant products and they span the launch in 2019, we're see need is a critical driver of growth and we expect to keep on tapping its full potential.

China: Our revenue projections are also supported by an improved performance of albumin as we know China will continue to grow in the coming quarters.

China: We also see our alpha one franchise continuing to show a stronger positive momentum in key markets. Following the switch of our newest specialty pharmacy partner in the U S, which further enhance our service offering.

Nacho Abia: In addition to all this, we have a solid deal pipeline that provides good expectations for the diagnostics and biosupplies division, and BioTest will be launching key products in the second half. All in all, I believe we have strong drivers to continue building momentum and to deliver as committed in the upcoming quarters and in the full 2020. Following revenue growth, we know it will be translated into a significant EBITDA sequential improvement throughout the year, going from 23-24% adjusted margins in the first half to 27-28% in the second half, allowing us to achieve the... 1,800 million euros, a bit adjusted for the whole year, as we previously guided.

Nacho Abia: In addition to all this, we have a solid deal pipeline that provides good expectations in the agnostics and biosupplies division, and BioTest will be launching key products in the second half. All in all, I believe we have strong drivers to continue building momentum and to deliver as committed in the upcoming quarters and in the full 2020. Following revenue growth, we know it will be translated into a significant EBITDA sequential improvement throughout the year, going from 23-24% adjusted margins in the first half to 27-28% in the second half, allowing us to achieve the... 1,800 million euros, a bit adjusted for the whole year, as we previously guided.

biotech <unk>: In addition to all this we have as well a solid deal pipeline that provides good expectations in diagnostics and by our suppliers divisions and biotech <unk> will be launching new products in the second half of the year.

Speaker Change: All in all I believe we have a strong drivers to continue building momentum and to deliver is committed in the upcoming quarters and in the fall 2024.

Speaker Change: Oh and revenue growth, we know it will be translated into a significant EBITDA sequential improvement throughout the year.

Going from 23, 24% adjusted margin in the first half to 27, 28% in the second half.

Speaker Change: Allowance, allowing us to achieve the.

Speaker Change: 1000, 800 million euros EBITDA adjusted for the whole year as we previously guided.

Nacho Abia: The most relevant driver for this will be, of course, the increase in revenues in the second half of the year. It will also be supported by an improved product mix, including more subcutaneous immunoglobulin, albumin, alpha-1, specialty proteins, and bio-supplies, all of them higher-margin.

Speaker Change: The more relevant driver for this will be of course, the increase in revenues in the second half of the year.

Speaker Change: But it will be also supported by an improvement in product mix, including more subcutaneous immunoglobulin albumin Alpha one specialty proteins and buyer supplies all of them higher margin items.

Nacho Abia: Equally important will be the contribution of the lower cost of goods as the cost per liter initiatives and the yield improvement efforts have been delivering and improving our inventory costs significantly. And finally, as revenue increases throughout the year, it will trigger a higher absorption of operating expenses, thus having a significant positive impact on our economy. So to conclude with this slide, and for the reasons explained, I'm very confident we can achieve the guidance that was provided for 2020. Now, let me address that, the elephant in the room, the cashman.

Nacho Abia: Equally important will be the contribution of the lower cost of goods, as the cost per liter initiatives and the yield improvement efforts have been delivering and improving our inventory costs significantly. And finally, as revenue increases throughout the year, it will trigger a higher absorption of operating expenses, thus having a significant positive impact on our economy. So to conclude with this slide, and for the reasons explained, I'm very confident we can achieve the guidance that was provided for 2020.

Speaker Change: Equally important will be the contribution of the lower cost of goods is the cost per liter initiatives and the yield improvement efforts has been delivering and we're improving our inventory costs significantly.

Speaker Change: And finally revenue in Christmas throughout the year, it will trigger a higher absorption of operating expenses, thus, having a significant positive impact on our rabbit.

Speaker Change: So to conclude with this is light and for the reasons explained I'm very confident we can achieve the guidance that was provided for 'twenty to 'twenty four.

Nacho Abia: Let me address that, now, the elephant in the room: cash. As I mentioned before, this is going to be my top priority, and we have already started to work on it. Despite the negative free cash flow in Q1 2024, which, as Thomas explained, was impacted by a non-recurring impact of €150 million, the cash flow developments follow the established pattern, and the company remains on track to deliver positive free cash flow as per the guidance provided back in 2013.

Let me address that now the elephant in the room the cash flow.

Nacho Abia: As I mentioned before, this is going to be my top priority, and we have already started to work. Despite the negative free cash flow in Q1 2024, which, as Thomas explained, was impacted by a non-recurring impact of €150 million, the cash flow developments follow the established pattern, and the company remains on track to deliver positive free cash flow as per the guidance provided back in February. From now on, we expect a slightly positive free cash flow in Q2 and a clear improvement in Q3.

Speaker Change: As I mentioned before this is going to be my top priority and we have already started to work on it.

Thomas: Despite the negative free cash flow in Q1, 'twenty 'twenty four which is Thomas explained was impacted by a nonrecurring.

Thomas: Impact of 150 million Europe, the cash flow developments followers established plant and the company remains on track to deliver positive free cash flow as part of the guidance provided back in February.

Nacho Abia: From now on, we expect a slightly positive free cash flow in Q2 and a clear improvement in the second quarter. Please note that this 2024 Free Cash Flow Trajectory includes extraordinary investment CapEx items, like the payments related to the acquisition of Immunotech in Q2 and Q3, as well as other items, including restructuring and transactions which add up to 480 million euros for the... The primary drivers that will bridge to our fiscal year 24 guidance are first VITA expansion, followed by working capital normalization.

Thomas: From now on we expect a slightly positive free cash flow in Q2, and a clear improvement in the second half. Please.

Nacho Abia: Please note that this 2024 free cash flow trajectory includes extraordinary investment capex items like the payments related to the acquisition of Immunotech in Q2 and Q3, as well as other items, including restructuring and transactions which add up to 480 million euros for the year. The primary drivers that will bridge to our fiscal year 24 guidance are first, the VITA expansion, followed by working capital normalization.

Thomas: Please note that this 2020 for free cash flow trajectory includes our strategy and our investment capex items like the payments related to the position of immuno Tech in Q2 and Q3.

Speaker Change: As well as other items, including restructuring and transaction costs, which add up to 480 million euros for the year.

Organization representative: The primary drivers that will bridge to our fiscal year 'twenty for guidance, our first that'd be the expansion followed by working capital normalization, but in addition, we have started already and organization wide cash flow improvement plan a plan to significantly increase free cash flow generation at all in 'twenty 'twenty four but then.

Nacho Abia: But in addition, we have already started an organization-wide cash flow improvement plan to significantly increase free cash flow generation not only in 2024 but in the years to come. As a result of those efforts, we plan to update our fiscal year 2024 guidance accordingly as we gain more visibility into any potential upsides brought by that plan this year. Our cash flow improvement plan started with a simple but solid and exhaustive analysis of the current situation that has already identified opportunities comprised of five main levels.

Nacho Abia: But in addition, we have already started an organization-wide cash flow improvement plan to significantly increase free cash flow generation, not only in 2024 but in the years to come. As a result of those efforts, we plan to update our fiscal year 2024 guidance accordingly as we gain more visibility into any potential upsides brought by that plan in the future. Our cash flow improvement plan started with a simple but solid and exhaustive analysis of the current situation that has already identified opportunities comprised of five main levels.

Organization representative: The years to come.

Speaker Change: As a result of those efforts we plan to update our fiscal year 'twenty four guidance accordingly, as we gain more visibility into any potential upsides broiler that plan in this year.

Nacho Abia: Working Capital Normalization, Continuous Operational Improvement, SG&A and Spend Control, Optimizing Real Estate, and a Thorough Portfolio Analysis. Some of these initiatives will have an impact sooner than others; some will be recurrent improvements, and some just one time off.

Speaker Change: Our class a gas flow improvement plan started with a simple, but solid an exhaustive analysis of the current situation that has already identified opportunities comprised with five main levers working capital normalization continuous operational improvement.

Nacho Abia: Working Capital Normalization, Continuous Operational Improvement, SG&A and SPEN Control, Optimizing Real Estate, and a Thorough Portfolio Analysis. Some of these initiatives will have an impact sooner than others. Some will be recurrent improvements, and some just one time off.

Speaker Change: SG&A in the spend control optimizing our real estate and a thorough portfolio analysis.

Speaker Change: Some of these initiatives will have an impact sooner than others. Some will be recurrent improvement and some just one time off but altogether, we must consider them plan. This exercise as a new mindset for the company and this will be our most important priority till our cash flow generation and our leverage will be at the required level.

Nacho Abia: But all together, we must consider and plan this exercise as a new mindset for the company, and this will be our most important priority until our cash flow generation and our leverage are at the required level. Particularly important in 2024 will be the optimization of our working capital. Starting with our inventory levels, which will be reduced, our revenue will increase in the upcoming quarters, especially in the second. In addition, as previously mentioned, in the second quarter, we are already seeing a normalization of our receivables and payables that we expect to continue throughout the year.

Nacho Abia: But all together, we must consider and plan this exercise as a new mindset for the company, and this will be our most important priority until our cash flow generation and our leverage are at the required level. Particularly important in 2024 will be the optimization of our working capital. Starting with our inventory levels, which will be reduced, our revenue will increase in the upcoming quarters, especially in the second quarter. In addition, as previously mentioned, in the second quarter, we are already seeing a normalization of our receivables and payables that we expect to continue throughout the year.

Speaker Change: Particularly important in 'twenty 'twenty four will be the optimization of our working capital starting with our embedded on the inventory levels that will reduce our revenue will increase in upcoming quarters, especially in the second half.

Speaker Change: In addition, as previously mentioned.

Speaker Change: In the second quarter, we're already seeing a normalization of our receivables and payables that we expect to continue throughout the year.

Nacho Abia: Another important contributor to cash flow in 2024 and beyond will be the implementation of the Continuous Improvement Program that they started last year, which includes more than 50 business-lead initiatives to streamline our operations. Some of these projects have already shown an impact on our financials, and their incremental impact in the coming years is expected to be very significant. These initiatives include improvement of yields in both plasma donation and our manufacturing operations, including Donor Fee Optimization and Industrial Process Improvement.

Nacho Abia: Another important contributor to cash flow in 2024 and beyond will be the implementation of the Continuous Improvement Program that started last year, which includes more than 50 business-lead initiatives to streamline our operations. Some of these projects have already shown an impact on our financials, and their incremental impact in the coming years is expected to be very significant. These initiatives include improvement of yields in both plasma donation and our manufacturing operations, including donor fee optimization and industrial process improvement.

Speaker Change: Another important contributor to cash flow in 2024 and beyond will be the implementation of the continuous improvement program at the start of last year, which includes more than 50 business led initiatives to streamline our operations.

Speaker Change: Some of these projects have already show an impact in our financial and its incremental impact in upcoming years is expected to be very significant.

Speaker Change: These initiatives include improvement of Geos in both plasma the nation, and our manufacturing operations, including donor fee optimization and industrial process improve.

Speaker Change: Yeah.

Nacho Abia: In addition, and while the company has made good efforts to rebase its cost structure over the past few years, we will continue to focus on SENA and spending control to operate more efficiently, with a continuous improvement and zero-based budgeted mentality. Finally, and although these two efforts will most likely impact only 2025 and beyond, we have already started the process to look into our real estate footprint, which offers some interesting opportunities, and initiated a portfolio analysis of all our projects, affiliates, and businesses to ensure all of them deliver at the spectacle. I know you probably will have a lot of questions about it.

Nacho Abia: In addition, and while the company has made good efforts to rebase its cost structure over the past few years, we will continue to focus on SG&A and spending control to operate more efficiently with a continuous improvement and zero-based budgeted mentality. Finally, and although these two efforts will most likely impact only 2025 and beyond, we have already started the process to look into our real estate footprint, which offers some interesting opportunities, and initiated a portfolio analysis of all our projects, affiliates, and businesses to ensure all of them deliver at the right speed.

Speaker Change: In addition, and while the company has made good they're forced to rebase its cost structure over the past few years, we will continue to focus on S. N E and spending control to operate more efficiently with a continuous improvement and zero base budgeting mentality.

Speaker Change: Finally, although these two efforts will most likely impact only 2025 and beyond we have already started the process to look into our real estate footprint, which offer some interesting opportunities and initiated a portfolio analysis of all our projects affiliates and businesses to ensure all of them deliver at the expected level.

Nacho Abia: I know you probably will have a lot of questions about... But let me manage expectations by saying that at this point, there is still work to do before being able to provide information regarding specific activities or provide guidance for our future cash flows beyond 2020. Please be patient and give us the time to work things out. Most importantly, it is clear to me that the company has the levers to improve its cash flow profile and generate additional and substantial free cash flow in the years to come. Ultimately, cash flow generation will be key to address our leverage, and so the leveraging path will continue. The focus remains on reducing the leverage ratio below four times.

Speaker Change #100: I know, you'll probably will have a lot of questions about this.

Nacho Abia: But let me manage expectations and say that at this point, there is still work to do before being able to provide information regarding specific activities or to provide guidance for our future cash flows beyond 2020. Please be patient and give us the time to work on all this. Most importantly, it is clear to me that the company has the levers to improve its cash flow profile and generate additional and substantial free cash flow in the years to come. Ultimately, cash flow generation will be key to address our leverage, and so the leveraging path will continue moving forward. The focus remains on reducing the leverage ratio below four times.

Nacho Abia: And this year, we are expecting to bring our leverage down to 4.5% by the end of 2020, mostly thanks to the proceeds from the Shanghai RAS divestiture, EBITDA, and cash position. As an immediate and important step, as has been explained already, we are well-addressing our 2025 maturities, and this will be primarily accomplished by using the €1 billion private placement to repay the 2025 unsecured notes and the Shanghai RATS proceeds to reduce the 2025 and 2027 secured notes.

Speaker Change #101: But let me manage expectations say that at this point, there's still work to do before being able to provide information regarding the specific activities or to provide guidance for our future cash flows beyond 2024. Please.

Speaker Change #102: Please be patient and give us the time to work in all these mother.

Company Representative: Most importantly, it is clear to me that the company has the levers to improve its cash flow profile and generate additional and substantial free cash flow in the years to come.

Speaker Change #104: Ultimately cash flow generation will be key to others, our leverage and Shaw deleveraging path will continue moving forward.

Speaker Change #104: Our focus remains on reducing our leverage ratio below four times. This year, we are expecting to bring our leverage down to four five times by the end of 'twenty 'twenty four mostly thanks to the proceeds from Shanghai Rush divested EBITDA and cash position improvement.

Nacho Abia: And this year, we are expecting to bring our leverage down to 4.5% by the end of 2020, mostly thanks to the proceeds from Shanghai RAS' divestiture, EBIDDA, and Casposition. As an immediate and important step, as has been explained already, we are well-addressing our 2025 maturities, and this will be primarily accomplished by using the €1 billion private placement to repay the 2025 unsecured notes and the Shanghai RATS proceeds to reduce the 2025 and 2027 secured notes.

Shaw: There's an immediate and important step as it has been explained already where well address in our twenties twenty-five maturities and this will be primarily accomplished by using the 1 billion private Europe 1 billion Euro private placement to repay the 2025 unsecured notes and the Shanghai Rice perfect proceeds to reduce the 20 to 25 and 2020.

Speaker Change #106: Favorite secured notes.

Nacho Abia: I think it's enough numbers and figures for today, and I would like now to share some of my views on what will be the key priorities for Grifols in the years to come. As I have already said, I am a pragmatic person.

Speaker Change #107: I think there's enough of numbers and figures for today and I would like now to share some of my views on what will be the key priorities for greenfields in the years to come.

Speaker Change #107: As I already say I am a pragmatic person I like to set goals in a way, which is simple focus and with clear expectation. So I'm convinced this helps organization to align and progress.

Nacho Abia: I like to set goals in a way that is simple, focused, and with clear expectations. I'm convinced this helps the organization to align and progress. Based on that thought, the core of our activities will be a solid financial discipline and focus on cash flow generation. But this itself will not be effective unless we can continue meeting the needs of our patients and donors, continue improving our commercial operations to better meet customers and market demand, and leverage and continue the operational improvements already seen.

Speaker Change #108: Based on that thought the core of our activities will be a solid financial discipline and focus on cash flow generation.

Speaker Change #109: But this is tell will not be effective unless we can continue meeting the needs of our patients and doctors.

Speaker Change #110: Improving our commercial operations to better meet customers' end market demand and to leverage and continue to be able to continue the operational improvements already start.

Nacho Abia: Also, very critical will be to accelerate innovation in a pragmatic and strategic way and bring new products and new indications to markets in a time and cost-efficient manner in order to create a self-reinforcing cycle that will aim not only to enhance financial metrics but also to ensure enhanced competitiveness.

Speaker Change #111: Also very critical will be to accelerate innovation in a pragmatic in a strategic way.

Speaker Change #112: And bring to market new products, new indications in a time and cost efficient manner in order to create a self reinforcing cycle that will aim not only to enhance financial metrics, but also to ensure enhanced competitiveness.

Nacho Abia: Over our next interactions, you will hear me talk a lot about these foundational pillars, and I'll be happy to share more as the specific action plans are developed and implemented. For now and in the short term, in addition to the cash flow improvement plan already explained, our immediate focus will be to strengthen our commercial operations to be able to successfully face forthcoming product launches, to carry out talent assessments across the organization to make sure we have the right people in the right places, and to initiate a process that should aim to reduce company complexity, both in our processes and in our structure.

Speaker Change #112: Our next interactions you will hear me talk a lot about this foundational pillars and I will be happy to share more as the specific action plans to develop and implement.

Speaker Change #113: For now and in the short term you know the in addition to the cash flow improvement plan already explained our immediate focus will be to strengthen our commercial operations to be able to successfully face for common product launches too.

Speaker Change #113: The work in our talent assessment across the organization to make sure we have the right people in the right place and.

Speaker Change #114: And to initiate a process that should aim to reduce company complexity, both in our processes and in our restructures.

Nacho Abia: I think this slide is a good summary of what you can expect from me and Grifols in the months and years to come, and I look forward to our continuous dialogue about all this important work. As a summary of what has been said, and before we move on to the Q&A, I'd like to reiterate a few points that we have already made but that are worth repeating. The Board of Directors of Grifols has met to appoint him as CEO to lead Grifols by building upon its previous success.

Speaker Change #115: I think this slide is a good summary of what you can expect from me angry falls in the malls in years to come and I look forward to a continuous dialogue dialogue about all these important topics.

Speaker Change #115: As a summary of what has been safe and before we move into Q&A.

Speaker Change #117: Like to reemphasize, a few points that we have already made but other wharf repeating.

Speaker Change #115: The board of directors of grief Walsh asked me to join the company as CEO to lead Greif forced by building upon its previous success.

Speaker Change #115: If this.

Nacho Abia: We must, first of all, improve cash flow generation and reduce leverage. And while doing this, we must continue enhancing operational execution, maintaining financial discipline, and improve business performance overall. Thanks to our cumulative efforts, today Grifols operates in a solid growing market, is well invested in plasma centers, production facilities, a global footprint, and cutting-edge technology. This positions the company to drive significant and sustainable growth. And therefore, I am convinced that by acting decisively and with a strong focus on execution, we can significantly unleash shareholder value as well. This is my mission, and this is what I plan to do.

Nacho Abia: We must, first of all, improve cash flow generation at the review level. And while doing this, we must continue enhancing operational execution, maintain financial discipline, and improve business performance overall. Thanks to our cumulative efforts, today Grifols operates in a solid growing market, is well invested in plasma centers, production facilities, a global footprint, and cutting-edge technology. This positions the company to drive significant and sustainable growth. And therefore, I am convinced that by acting decisively and with a strong focus on execution, we can significantly unleash shareholder value as well. This is my mission, and this is what I plan to do.

Grief Walsh: We must first of all improved cash flow generation and reduced leverage.

unknown: And while doing this we must continue enhancing operational execution maintain financial discipline and improved business performance overall.

unknown: Thanks to our cumulative air force today grateful to operate in a solid growing market is well invested in plasma centers production facilities, our global footprint and cutting edge technologies.

Speaker Change #120: This positions the company to drive significant and sustainable growth and therefore, I'm convinced that by acting decisively and with a strong focus on execution, we can significantly alicia shareholder value as well.

Speaker Change #119: This is my mission and this is what I plan to do.

Nacho Abia: Finally, I am pleased to announce that we will be hosting an Investor Analyst Day on October 10, 2024. We will dive deeper into some of the things mentioned today and in our future plans, with the aim to provide a comprehensive view of the company's long-term goals and strategies. Thank you all for joining us today and for your continued support and engagement. I look forward to meeting many of you in person over the next weeks and months. And with that, I'll turn it back to Danny. Thank you, Nacho.

Nacho Abia: Finally, I am pleased to announce that we will be hosting an Investor Analyst Day on October 10, 2025. We will dive deeper into some of the things mentioned today and in our future plans, with the aim to provide a comprehensive view of the company's long-term goals and strategies. Thank you all for joining us today and for your continued support and engagement. I look forward to meeting many of you in person over the next weeks and months. And with that, I'll turn it back to Danny. Thank you, Nacho.

Speaker Change #118: Finally, I'm pleased to announce that we will be hosting an investor and analyst analyst day on October 10th 'twenty 'twenty four we will deep deeper into some of the things mentioned today and in our future plans with the aim to provide a comprehensive view of the company's long term goals and strategies.

Speaker Change #118: Thank you all for joining us today and for your continued support and engage them I look forward to meeting many of you in person over the next weeks and months to come.

Dani: And with that I'll turn it back to Dani.

Dani: Thank you and our true with regards to our agenda for the rest of the year. We have several key dates to share with you first on July 30th we will discuss our financial performance for the second quarter of 2024.

Daniel Segarra: With regard to our agenda for the rest of the year, we have several key dates to share with you. First, on July 30th, we will discuss our financial performance for the second quarter of 2020. And, as mentioned just now, on October 10th, we will host our annual Investor and Analyst Day here in Barcelona.

Denis Sagara: With regard to our agenda for the rest of the year, we have several key dates to share with you. First, on July 30th, we will discuss our financial performance for the second quarter of 2020. And, as mentioned just now, on October 10th, we will host our annual Investor and Analyst Day here in Barcelona.

Dani: As mentioned just now on October 10th we will host our annual Investor and Analyst day here in Barcelona.

Speaker Change #118: Finally on November 7th we will be reporting our third quarter financial results.

Speaker Change #118: These events play an essential role in our efforts to strengthening our communication and ongoing dialogue with market participants.

Daniel Segarra: Finally, on November 7th, we will be reporting our third quarter financial results. These events play an essential role in our efforts to strengthen our communication and ongoing dialogue with market players. Now I will open it up for questions. Please remember to press start 5 to ask a question. We need to place a limit of 2 per person per session.

Denis Sagara: Finally, on November 7th, we will be reporting our third quarter financial report. These events play an essential role in our efforts to strengthen our communication and ongoing dialogue with market players. Now, I will open it up for questions. Please remember to press start 5 to ask a question. We need to place a limit on two perennials.

Speaker Change #118: Now I will open it up for questions.

Speaker Change #118: Yeah.

Speaker Change #122: Please remember to press star five to ask a question.

Speaker Change #124: We need to place a limit of two per analyst.

Peter Verdult: But if you have any follow-up, please dial Star 5 again to get back on the list. Our first question comes from, I think it's Peter, Peter from Citi, please. Thank you all.

Denis Sagara: But if you have any follow-up, please dial Star-5 again to get back on the line. Our first question comes from, I think it's Peter. Peter from Citi, please. Thank you all.

Speaker Change #123: But if you have any follow up please dial star FIFO gain to get back on the lease.

Speaker Change #123: Our first question come from I think is Peter Peter from Citi.

Speaker Change #123: <unk>.

Peter Verdult: It's Peter Verdult here from Citi. Two questions. Nacho, I appreciate you giving us your first impressions after only being at the helm for a matter of weeks. Forgive me for pushing, but I think the market is very focused on free cash flow. I understand that you can't give guidance beyond this year, but it's also fair to say that the prior management team was also communicating a message that they were very focused on free cash flow.

Peter Verdult: It's people do it from from Citi two questions I'm not sure I appreciate you, giving us your.

Nacho Abia: Nacho, I appreciate you giving us your first impressions after only being at the helm for a matter of weeks. Forgive me for pushing, but I think the market is very focused on free cash flow, and I understand that you can't give guidance beyond this year, but it's also fair to say that the prior management team was also communicating a message that they were very focused on free cash flow. What low-hanging fruit is there this year that makes you confident that you can accelerate efforts? And if I could squeeze one last one in, I think it's important. You called out this specialty pharma switch benefiting Alpha One. Could you maybe just explain that a little bit more?

Peter Verdult: So it's impressions after only being at the helm for I'm not sure of weeks.

Peter Verdult: Forgive me for pushing them, but yeah I think the market is very focused on free cash flow I understand that you called Gabe garden's beyond this year, but it's also fair to say that the prior management team are also communicated the message that they were very focused on free cash flow. So just want low hanging fruit is there this year that she allows eagle.

Peter Verdult: What low-hanging fruit is there this year that makes you confident that you can accelerate efforts to improve free cash flow? And if I could chance my arm, what haven't you liked that you've seen as you travel around the Grifols sites?

Peter Verdult: Which makes you confident that you can accelerate efforts to improve free cash flow in like a chalk well how would you like that you've seen.

Nacho Abia: And then, just secondly, because we've got Roland on and you are calling out product mix as a big driver, can we just make sure that we're all on the same page? I mean, my assumptions are that Zembify is probably a 50% premium to IVIG, but it only represents 5% of IG sales currently. So can you correct me where I'm wrong and if I could squeeze one last one in, I think it's important. You called out this specialty pharma switch benefiting Alpha One. Could you maybe just explain that a little bit more?

Peter Verdult: Travel around the peripheral sites and then just secondly them because we got rolling at all and that you are calling out your product mix is a big driver should we just make sure a little on the same page I mean more assumptions of Zumba Flyers, probably a 50% premium.

AIG: So if AIG, but.

AIG: But it only represents 5% of all.

Speaker Change #127: I T cells. Currently can you can you correct me where I'm wrong.

Speaker Change #130: And if I could squeeze one last one I thought it was important you called out the specialty pharma switch benefit benefiting out for one could you maybe just explain that a little bit more thank you.

Nacho Abia: Thank you. This is Nacho, and I think I cannot add much more than what I have already said. I think that the free cash flow or cash flow focus, in general, is very well established in the company. I think in the last six weeks, we've been working across the organization to make sure that the mindset is there. And I see a lot of activity already moving forward in that direction. And it's not rocket science.

Speaker Change #128: That is not true and I think I cannot add much more than what I already say offended.

Speaker Change #129: The free cash flow or cash flow focus in general is a is very well established in the company I think in the last six weeks, we've been working across the organization to make sure that the mindset is there and and I see a lot of activity already moving forward in that direction and it's not rocket science to be honest I think it's it's mostly the five lever.

Roland Wandeler: To be honest, I think it's mostly the five levers I mentioned before. And if I think in 2024, clearly, working capital is going to play a very significant role as this is probably the highest impact. But we've already been working for months on a lot of operational improvements that will also generate a significant benefit this year. And ultimately, I think we need to control well all our expenses and the things we can control within this year. There is no magic, Peter.

Nacho Abia: To be honest, I think it's mostly the five levers I mentioned before. And if I think in 2024, clearly, working capital is going to play a very significant role as this is probably the highest impact. But we've already been working for months on a lot of operational improvements that will also generate a significant benefit this year. And ultimately, I think we need to control well all our expenses and the things we can control within this year. So I say, There is no magic, Peter.

Speaker Change #131: As I mentioned before and if I think in 2024, clearly working capital is going to play a very significant role.

Speaker Change #134: As this is probably the highest impact, but we've been working already four months in a lot of operational improvements that will also generate a significant benefit in the year and and ultimately I think we need to control world are all our expenses and are on and the things we can control within this year. So I.

Roland Bandler: I think that this is all about focus, it's about attention, it's about mindset, it's about aligning the company in that direction, and that's what we are doing. I think the next question, which Roland would love to answer, And Peter, to your first point on Xembify, you're correct on both points, that yes, there is a price premium, and especially with Xembify currently at 5%, we see tremendous growth potential for the future for this very important pillar of our immunoglobulin franchise.

Thomas M. Jones: I think that this is all about focus, it's about attention, it's about mindset, it's about aligning the company in that direction, and that's what we are doing. I think the next question Roland would love to answer on both points is that, yes, there is a price premium, and especially with Xembify currently at 5%, we see tremendous growth potential for the future for this very important pillar of our immunoglobul And to your second question on Alpha-1, our switch in specialty pharmacy partners will allow us to dramatically enhance our service offering for patients currently on therapy in a big part of the market that is counting on home infusion as their way to receive their treatment, and as well help us in onboarding new patients as we aim to further expand diagnosis rates in this market that still has a lot of untapped potential with 90% of patients not diagnosed. Thank you so much. Now we are going to go with Tom Jones from Bellenburg.

Peter: There is no magic Peter I think that this is all about focus it's about the tension is about my incentives about aligning the company in that direction and that's what we are doing.

Peter: I think the next question Roland would love to answer.

Roland Smith: Absolutely. Thank you not try and Peter to your first point on sanctify, you're correct on both points that yes, there is a price premium and especially with 75 currently at 5%, we see tremendous growth potential for the future for this very important pillar of our immunoglobulin franchise and.

Roland Bandler: And to your second question on Alpha-1, our switch in specialty pharmacy partners will allow us to dramatically enhance our service offering for patients currently on therapy in a big part of the market that is counting on home infusion as their way to receive their treatment, and it will also help us in onboarding new patients as we aim to further expand diagnosis rates in this market that still has a lot of on-tap potential with 90% of patients not diagnosed. Thank you so much. Now we are going to go with Tom Jones from Berenberg.

Peter: To your second questions on August one our switch in our specialty pharmacy partner will allow us to dramatically enhance our surface offering for patients currently on therapy in a big part of the market that is counting on home infusion as their way to receive their treatment.

Peter: And as well help us in Onboarding of new patients as we aim to further expand diagnosis rates in this market that still has a lot of untapped potential with 90% of patients not diagnosed yet.

Peter: Okay.

Thomas M. Jones: Tom, please. Oh, good afternoon. Thank you for taking my questions. I had two, really.

Peter: Thank you so much.

Roland Smith: Now we are going to go with Tom Jones from dialing back Tom Please.

Thomas H. Glanzmann: One was just on the potential for future cost savings. You talked quite a lot about them in the prepared remarks, and you're looking to spend €110 million this year on one-off costs related to the extension of the Operation Improvement Plan. That's quite a decent number to spend, so it would be healthy if you could try and at least give us some idea of kind of what future cost savings you might be expecting to come from these projects, and perhaps in what areas. And then my second question was just on the leverage target.

Thomas M. Jones: One was just on the potential for future cost savings. You talked quite a lot about them in the prepared remarks, and you're looking to spend €110 million this year on one-off costs related to the extension of the Operation Improvement Plan. That's quite a decent number to spend, so it would be helpful if you could try and at least give us some idea of what future cost savings you might be expecting to come from these projects, and perhaps in what areas.

Thomas M. Jones: Okay, Jonathan Thank you for taking my questions Hey, Rudy.

Thomas M. Jones: One was just on the potential for future cost savings you see you talked quite a lot about them in the in the prepared remarks, and Youre looking to spend 110 million euros. This year on one off costs related to the extension of the operational improvement plan.

Thomas M. Jones: Quite a decent number to spend so it'd be healthy if he could try to at.

Speaker Change #137: Please give us some stair of kind of.

Speaker Change #137: What future cost savings you might be expecting to come from from these projects and perhaps in what areas.

Nacho Abia: And then my second question was just on the leverage target. You did previously have a target of four times by year-end 2024, and I know on previous calls you'd said that that was pretty much out of range unless you considered further asset sales, and the slides today sort of suggest four-and-a-half times is where you're going to land for the year-end. Can we conclude from that that sort of further asset sales are probably not on the cards now for this year, and are they still the kind of projects that are underway, or should we just forget about them forever, really? Hi Tom.

Thomas M. Jones: And then my second question was just on the leverage target.

Nacho Abia: You did previously have a target of four times by year-end 2024, and I know on previous calls you'd said that that was pretty much out of range unless you considered further asset sales, and the slides today sort of suggest four and a half times is where you're going to land for the year end. Can we conclude from that that sort of further asset sales are probably not on the cards now for this year, and are they still the kind of projects that are underway, or should we just forget about them forever, really? Hi Tom.

Speaker Change #136: And you did previously have a target of four times by year end 2024, and I know in previous calls you had said that that was pretty much out of range unless you consider further asset sales.

Speaker Change #138: In the slides today, you sort of suggest four and a half times is where you're going to land for the year for the year and can we conclude from that that sort of further asset sales are probably not in the cards now for this year.

Speaker Change #136: And are they still kind of projects that are underway or should we just forget about them forever already.

Thomas H. Glanzmann: I mean, just to give you a little bit of color, right, so the operational improvement plan is something that they started last year. Most of the restructuring costs are the last part of the cost of the plan, but they have started to be implemented, and that has been explained in the past. I think that this plan covered the entire organization, mostly on the operational part and the industrial part, but also focusing procurement activities, generating additional yields in all areas, etc.

Nacho Abia: I mean, just to give you a little bit of color, right? The operational improvement plan is something that started last year. Most of the restructuring costs are the last part of the cost of the plan that has started to be implemented. And it has been explained in the past, I think, that this plan was across the entire organization, mostly on the operational part and the industrial part, but also focusing procurement activities, generating additional yields in all areas, etc.

Speaker Change #136: Alright, I tell them I mean, just to give you a little bit of color right. So on the on the operational improvement plan is our is something that started last year and most of the restructuring cost or the last part of the course of the plan there started to be implemented.

Speaker Change #140: And and and I said it hasn't been explaining the past I think that this plan was across the entire organization, mostly on the operational part of industrial part, but also progress in procurement activities generate an additional yields in all areas et cetera. So I think that the lost money that you will see in terms of restructuring is coming from the <unk>.

Nacho Abia: So I think that the last money that you will see in terms of restructuring is coming from the last payment related to the efforts that have been done. And all that is already visible either in our inventory or in our operational costs as we move forward. As for the leverage, and I will make some comments, and I'm sure that Thomas probably would like to complement, what we have shown today, 4.5, is what we believe is a very realistic expectation based on the Shanghai RAS, divestiture of the 20% of the Shanghai Dash Trust divestiture, plus the operational improvement that we are seeing.

Thomas H. Glanzmann: So I think that the last money that you will see in terms of restructuring is coming from the last payment related to the efforts that have been done, and all that is already visible either in our inventory or in our operational costs as we move forward. As for the leverage, and I will make some comments, and I'm sure that Thomas probably would like to complement, what we have shown today, 4.5, is what we believe is a very realistic expectation, based on the Shanghai RAS, on the 20% of the Shanghai trust divestiture, plus the operational improvement that we are seeing.

Speaker Change #139: Last payment related to the Air force that has been done and all that is already being visible in either in our inventory are in our operational cost and as we move forward.

Speaker Change #139: As part of the leverage and and I will I will make some comments and I'm sure that Thomas probably would like to compliment.

Thomas: What we have shown today 4.5 is what we believes is a very realistic expectation based on the Shanghai rise.

Thomas: [noise] divested or under 20% of the Shanghai, that's translated restaurateur plus the operational improvements that we're seeing are of course, we remain committed to 244 times leverage or below and and he will call them over time, but I think that this point and realistically speaking 'twenty 'twenty four we can commit to 4.5.

Nacho Abia: Of course, we remain committed to four times leverage or below, and that will come over time. But I think at this point, and realistically speaking, in 2024, we can commit to 4.5, and maybe Thomas wants to complement that. Sure. No, happy. Hey, Tom, how are you?

Thomas H. Glanzmann: Of course, we remain committed to four times leverage or below, and that will come over time. But I think at this point, and realistically speaking, in 2024, we can commit to 4.5, and maybe Thomas wants to complement that. Sure. No, happy. Hey, Tom, how are you?

Thomas: And maybe Thomas complement now happy Hey, Tom how are you great great. Great question. So let me let me just go back to the fact that we said when we started twenty-three that for whats the target that we're aiming at that point in time.

Thomas H. Glanzmann: Great question. Let me just go back to the fact that we said when we started 23, that four was the target that we were aiming for. At that point in time, you know, we also assumed that we would do a major sale of Shanghai Rust, actually sell all of it. And as you know, at this point in time, we're only selling 20% of it.

Thomas H. Glanzmann: Great question. Let me just go back to the fact that when we started 23 that 4 was the target that we were aiming for. At that point in time, you know, we also were assuming that we would do a major sale of Shanghai Rust. In fact, we would be selling all of it. And as you know, at this point in time, we're only selling 20% of it. But as Nacho just said, you know, we're, for this year, 4.5. We're still, you know, targeting to get below 4.

Thomas: We also we're assuming that we would do in a major asset that we would do a major sale of our Shanghai Ross actually we would be selling all of it and as you know right at this point in time, we're only selling 20% of it.

Thomas H. Glanzmann: But as Nacho now said, you know, for this year, 4.5, we're still, you know, targeting to get below the 4. I think at this point in time, we're not expecting to do any other asset sales for this year, really just focusing now on cash flow generation and free cash flow generation as we, you know, approach the year. Perfect.

Thomas: But as as a notch and I said you know we're word for this year 4.5, we're still targeting to get below four I think at this point in time, we're not expecting to do any other asset sales.

Thomas H. Glanzmann: I think at this point in time, we're not expecting to do any other asset sales for this year, really just focusing now on cash flow generation and free cash flow generation as we, you know, approach the year. And just one cheeky follow-up, if I may, on the sort of IG strategy. Kind of reading between the lines, it looks like Emungo is probably going to take over as one of your primary brands of IG, but it feels like the sort of ramp-up in production of that is perhaps running a little bit behind schedule.

Thomas: Hum four four in for this year really just focusing now on on cash flow generation and the free cash flow generation is as we address the year.

Thomas H. Glanzmann: And just one cheeky follow-up, if I may, on the sort of IG strategy. Kind of reading between the lines, it looks like Emungo is probably going to take over as one of your primary brands of IG, but it feels like the sort of ramp-up in production of that is perhaps running a little bit behind schedule. Any kind of color you can share with us for the future that you can give us, you know, on that ramp-up, and maybe anything else you can share at this point on the sort of pathway to replacing some of your older legacy IG products with Emungo, which I assume has a high yield and therefore a significantly higher margin on a sort of per liter basis? Tom, you know, YMUGO indeed adds to our portfolio of immunoglobulins that we have, in addition, of course, to our GammaNex flagship that we have and our Xendify.

Thomas: Perfect and then just.

Speaker Change #141: G cheeky follow up it's on my own on the sort of <unk> strategy.

Speaker Change #141: Yeah.

Speaker Change #143: My kind of reading between the lines it looks like it's probably going to take over as one of your primary brands.

G: But it feels like this will ramp up in production of that is perhaps running a little bit behind plan.

Speaker Change #145: Any kind of color you can shed comfort you can give us on that ramp up and then maybe.

Thomas H. Glanzmann: Any kind of color you can share with us for the future that you can give us, you know, on that ramp-up, and maybe anything else you can share at this point on the sort of pathway to, you know, replacing some of your older legacy IG products with Emungo, which I assume has a high yield and therefore a significantly higher margin on a sort of per liter basis? Tom, you know, YMUGO indeed adds to our portfolio of immunoglobulins that we have, in addition, of course, to our GammaNex flagship that we have and our Xantify.

Speaker Change #141: Anything else you can share at this point almost sort of pathway to be.

Speaker Change #141: Replacing some of your older legacy products with it and then go with Sheba as high yield and therefore significantly high margin almost at a per liter basis.

Thomas M. Jones: Yeah, Tom you move or indeed adds to our portfolio of E immuno globally and stuff. We have in addition of course to our gamma next flagship that we have in our extended if I and.

Tom: You know as we look at time, we see that the Mughal can play an important role in substituting hour of labor gamma in the market, which is an older version of our I T. But you know with T. Mobile. In addition in our portfolio. This opens for US a set of quite interesting strategic possibilities as we think about positioning in the marketplace and.

Thomas H. Glanzmann: And, you know, as we look ahead, we see that YMUGO can play an important role in substituting our flavogamma in the market, which is an older version of our IgE. But, you know, with YMUGO, in addition to our portfolio, this opens for us a set of quite interesting strategic possibilities as we think about positioning in the marketplace and is a key part of our plan to further grow our immunoglobulin I just want to reiterate the point that, you know, Emuga had a growth of 62% in the first quarter. And as Roland said, it only really represents 5% of our IG franchise.

Thomas H. Glanzmann: And, you know, as we look ahead, we see that YMUGO can play an important role in substituting our Flavogamma in the market, which is an older version of our IgE. But, you know, with YMUGO, in addition, in our portfolio, this opens for us a set of quite interesting strategic possibilities as we think about positioning in the marketplace and is a key part of our plan to further grow our immunoglobul You know, I just want to reiterate the point that, you know, YMUGO had growth of 62% in the first quarter, and as Roland said, it only really represents 5% of our IgE franchise.

T. Mobile: <unk> is a key part of our plan to further growth I'll remain on protein franchise.

T. Mobile: I just wanted to reiterate the point that you know in yoga had a growth of 62% in the first quarter and as as Roland said it only really represents 5% of our Orion G franchise. So the opportunity obviously is significant for us, particularly when you think that is.

Thomas H. Glanzmann: So the opportunity, obviously, is significant for us, particularly when you think that it's a, you know, almost... Forty percent of our competitors are already in sub-Q. So we see this as one of our significant, really big opportunities. And I know that Roland and his team are extremely focused on driving the growth of this product.

Thomas H. Glanzmann: So the opportunity, obviously, is significant for us, particularly when you think that almost... Forty percent of our competitors are already in sub-Q. So we see this as one of our significant, really big opportunities. And I know that Roland and his team are extremely focused on driving the growth of this product. I'm sorry, I meant Semify, obviously, so let me just correct that. There are so many Y's here, so I got a little confused.

T. Mobile: A you know almost 40% of our competitors are already in sub Q. So we see this as one of our significant really big opportunities and I know that Roland and team are extremely focused on on driving the growth of of this product.

Tom: Okay.

Tom: And so I think we will go.

Roland Smith: <unk> of course will help us on the IV side and satisfy as mentioned before I'm sorry, Yes men friend at 475, obviously, so let me just correct that.

Thomas H. Glanzmann: I'm going to call that. You caught that. There are so many whys here, so I got a little confused.

Roland Smith: I called out.

Roland Smith: There's so many wives here, so I got a little confused.

Thomas H. Glanzmann: Thank you. Now we are going to go with Charles Pitman from Barclays. Charles, please, from me.

Thomas H. Glanzmann: Thanks. Thank you. Now we are going to go with Charles Pitman from Barclays. Charles, please, from me.

Roland Smith: Yeah.

Charles Pitman: Just firstly, can you just confirm on the Shanghai RAF asset sale? I think when you put out a release recently, you're talking about announcing features of this deal. Can you just confirm that those features are likely related to the comments made on this call about using them to address your FY25 and FY27 senior secured bonds?

Speaker Change #149: Thank you.

Speaker Change #149: Now we Gotta go now go with Charles Pitman from Barclays Chart. Please.

Thomas H. Glanzmann: And then just secondly, coming back to buy a test, the next level project, and the general consolidation of that part of your business, can you just talk us through how we've got from it being so diluted in the past when you expect it to become accretive and what the delay has been since the completion of the project in FY22 and the reason for the contribution to the working capital impact of 1Q24 as you've been building up inventory? Yeah, I think that would be helpful based on the conversations we've been having with investors.

Charles Pitman: Hi, guys. Thanks, very much for taking my questions. So I'll start from Barclays.

Charles Pitman: Couple from me.

Charles Pitman: Firstly could you just confirm on the Shanghai Ross asset sale.

Charles Pitman: When you put out a release recently talking about announcing features of the scale.

Barclays Chart: Can you just confirm that those features likely related to the comments made on this call to violence using those to address your FY 'twenty five in FY 'twenty seven senior secured bonds.

Speaker Change #151: And then just secondly, just coming back to buy a test the next level of projects and the general consolidation of that part of your business can you just talk us through like.

Thomas H. Glanzmann: And then just secondly, coming back to buy a test, the next level project, and the general consolidation of that part of your business, can you just talk us through how we've got from it being so diluted in the past, when you expect to become accretive, and what the delay has been since the completion of the project in FY22 and the reason for the contribution to the working capital impact of 1Q24 as you've been building up inventory? Yeah, I think that would be helpful based on the conversations we've been having with investors.

Speaker Change #151: How we got from it being set at least for US when you expect just gonna creatures.

Speaker Change #150: The delay has been since the completion of the projects FY 'twenty two and the reason for the contribution to the working capital impact.

Speaker Change #150: Q4 is you've been building up inventory.

Speaker Change #155: I would just be helpful based on conversations we've been having with investors. Thank you first of all.

Thomas H. Glanzmann: Thank you. First of all, we will close the transaction in June, and we will use the proceeds as you outlined and as we said in our document. On biotest, clearly the focus on biotest right now is for them to bring their new products to market, which they're doing. I mean, I mentioned the fibrinogen trial.

Thomas H. Glanzmann: Thank you. First of all, we will close the transaction in June, and we will use the proceeds as you outlined and as we said in our document. On biotest, you know, clearly the focus on biotest right now is for them to bring the two new products or the new products to market, which they're doing. I mean, I mentioned the fibrinogen trial that went extremely well.

Speaker Change #156: We will close the transaction in June.

Speaker Change #156: And we will use the proceeds as you outlined and as we said in our document.

biotech speaker: On bio test the clearly the focus on biotech right now is to for them to bring the two new proud of other new products to market, which they're doing yeah, I mean, I mentioned the fibrinogen trial.

Thomas H. Glanzmann: They're also in the process of ramping up, now I'll say the right thing, Yumugo, which they intend to be launching here in the U.S. later. They've launched it in Europe, and they expect to launch it later in the U.S. But clearly, one of the things we've said all along is that they are actually not going to be contributing to EVTA until basically the launch of fibrinogen and the new products take place, and we stand by that at this point in time. So, you know, biotest still has a bit of runway until it will contribute significantly to the group. Thank you. It's time for Alvaro. Alvaro Lence, please.

Thomas H. Glanzmann: That has gone extremely well. They're also in the process of ramping up, now I'll say the right thing, Yumugo, which they intend to be launching here in the US later. They've launched it in Europe, and they expect to launch it later in the US.

Speaker Change #153: That is done gone extremely well there also in the process of ramping up now I'll say the right thing you Mughal which they intend to be launching here in the U S. Later, they've launched it in Europe and that they expect to launch. It later in the U S. You know clearly one of the things we've said all along.

Thomas H. Glanzmann: You know, clearly, one of the things we've said all along is that they are actually not going to be contributing to EVTA until basically the launch of fibrinogen and the new products that take place. And we stand by that at this point in time. So, you know, biotest, you know, still has a bit of runway until it will contribute significantly to the group. Thank you so much. Thank you. Time for Alvaro. Alvaro Lence, please.

bio test: Is that are they are actually you know not going to be contributing to EBITDA until basically the launch of fibrinogen and the new products that take place and we stand by that at this point in time. So you know bio test are you know still has got a bit of runway until it it will contribute.

bio test: Can lead to a to the group.

bio test: Thank you.

Alberto: It's time for Alberto Alberto answered please.

bio test: Okay.

Alvaro Lenze Julia: Hi, thanks for taking the time to answer my questions. The first one would be if you could update us on the capacity situation, both in plasma collection and industrial capacity, in terms of fractionation and purification, before and what it will look like after you complete the extraordinary CAPEX efforts that you are doing. And my second question would be regarding Frequency Flow Guidance.

Alvaro Lence: Hi, thanks for attending my questions. The first one would be if you could update us on the capacity situation, both in plasma collection and industrial capacity, in terms of fractionation and purification, before and what will it look like after you complete the extraordinary CAPEX efforts that you are doing. And my second question would be regarding the Frequency Flow Guidance.

Alberto Alberto: Hi, Thanks for taking my questions. The first one would be if you could update us on the capacity situation. Both in plasma collection and industrial capacity for instance, or in terms of fractionation and purification.

Alberto Alberto: Before and what will it.

Alberto Alberto: It looked like after you complete the extraordinary capex that youre doing in.

Nacho Abia: You mentioned that it's a bit too early to provide guidance beyond 2024. But if I am not mistaken, you had previous guidance of $2.5 billion on Frequency Flow Cumulative over 2025 and 2027. Just to know whether that guidance still holds. Thank you.

Speaker Change #161: And my second question would be regarding the free cash flow guidance you mentioned it.

Speaker Change #162: That'd be too early to provide guidance beyond 'twenty 'twenty, four but if I'm not mistaken you've had a previous guidance of two to $2 5 billion of free cash flow cumulative.

Speaker Change #162: 597, just.

Speaker Change #158: To know whether that guidance still holds thank you.

Thomas H. Glanzmann: Hi Alvaro, this is Nacho, and let me comment on capacity-based, again on my observations of these first weeks, and again, Thomas might want to add. I mean, I think what I've seen is that, as I mentioned before, the company is well positioned in terms of capacity. I mean, our investment in plasma collection centers and also in our industrial footprint is well-established. I mean, we don't see a significant need for significant investments, at least in the next three, four years to come, as both the plasma collection and the industrial footprint are ready for the growth that we are expecting to have in the next year. So I think it's time...

Nature: Hi, Omar this is nature and let me comment on capacity rates again, and my observations of this first the first weeks.

Speaker Change #158: And and again Thomas might want to complement I mean, I think what I've seen is that as I mentioned before the company as well as well position in terms of capacity I mean, our investment in our plasma collection centers and also in our industrial footprint is a well established I mean, we don't see a significant need of of Cigna.

Thomas: Second investments at least in the next three or four years to come as as both the plasma collection in the in industrial for the many ready for the growth that we're expecting to happen in the next years. So I think it's a.

Nacho Abia: In that regard, I think we're in good shape in that regard. As for our fiscal year 2025 and beyond cash flow, as I say in my remarks, please be patient, right? So I just have started to work on this. I think that we're making good progress. 2024 looks good.

Thomas: And that good I think we're in good shape in that are in that front as our fiscal year, 2020 five and beyond cash flow as I say in my remarks, please be patient right. So I just have started to work on this I think that we're doing good progress 2024 looks good.

Speaker Change #163: Our next step will be to focus in 2020 five 'twenty six 'twenty seven we will provide you an update on the information as soon as it's ready.

Thomas H. Glanzmann: The next step will be to focus on 2025, 26, 27. And we will provide you with an update on the information as soon as possible. So just to complement what Nacho said, our capacity, particularly for fractionation, is about 70%, so we've got significant room to grow in the coming years. And with regard to plasma centers, as Nacho said, we're well set up right now, and we do not expect to add any new centers until basically 2027, when we think we will probably start to need to implement about 20 centers going forward. So we're well positioned. I also do want to mention, obviously, the Egypt project, where there are going to be 20 centers. There are 10 centers now.

Not mentioned: So just to complement what not just said you know our capacity, particularly on the fractionation is about at 70%. So we've got significant room to grow.

Not mentioned: And you know in that.

Speaker Change #165: In the coming years and with regard to plasma center is not just said, we're well set up right now.

Speaker Change #166: And we do not expect to add any new centers until basically 27, where we think you know we will probably start to two need to implement about 20 centers going forward. So you know where where wealth position I also do want to mention obviously you know the Egypt project, where we're going to have they're going to be 20 centers there too.

Speaker Change #169: 10 centers now and then we also got the Canada.

Nacho Abia: And then we also got the Canada project, which is also going to add capacity but also centers as we move forward. So overall, I think we're very well positioned to take advantage of the significant opportunities that we see in front of us in the coming years. Thank you very much and welcome, Nacho.

Speaker Change #169: Project, which also is not only going to add capacity, but also centers as we move forward. So overall I think we're very well positioned to take advantage of the significant opportunities that we see in front of us in the coming years.

unknown: Thank you very much and welcome nurture.

Graham Glyn Charles Parry: Thank you so much. Now it's time for Bank of America. Graham, please, is that a timeframe which we could potentially expect to see some concrete mid-term sales, EBITDA or EPS guidance from the company? I think that's something which investors would definitely welcome. Secondly, just on 2024, I guess, you know, in your EBITDA guidance, if you could just give us a feel for just the level of confidence that you have in that now, presumably you've collected the majority of the plasma, so you know your cost per litre for most of your cost of goods for the year, you know what you're contracted to sell at, so, you know, what are the variables that could derail you from the achievement of that guidance, which is pretty much in the bag now.

Speaker Change #169: Yes.

Speaker Change #167: Thank you so much now it's time for bank of America. Please.

Speaker Change #165: Okay.

Graham Glyn Charles Parry: And then, just lastly, I just wonder if you could comment on the latest report from your friendly short seller that Grifols funnels cash to Scranton via BPC, and if you could just address that point and confirm all payments to BPC were for plasma at market rates, as validated by the CNMV investigation. Thank you. Thank you. I'll take the first two and Thomas will take the last one.

Speaker Change #168: Great. Thanks for taking my questions. So firstly on the same day that you're planning for October he set a timeframe, which we could potentially expect to see some concrete midterm sales and EBITDA or EPS guidance from the company are due I think that's something which investors would definitely welcome them.

Speaker Change #168: Just on 2024, I guess you know in your EBITDA guidance. If you could just give us a feel for just the the level of confidence you have in that now presumably you've you've collected the majority of the plasma T. Now your cost per liter. So nice to your cost of goods for the year you know you're contracted to sell at say what are the variables that could derail you from the achievement of our guidance range.

Speaker Change #170: Pretty much in the back now.

Speaker Change #165: And then just lastly, just wonder if you could comment on the latest report from your friendly short seller and peripheral suttles cash discounts and five P. P. C. If you could just address that point and confirm all payments to BPC with a plasma at market rates as validated by the C. N N V investigation. Thank Keith.

Speaker Change #165: Ill take the first two and and Thomas will take the last one.

Nacho Abia: As for Investors' Day, I mean, we are building the agenda as we speak, and obviously, we plan to provide as much as possible information to the market, but it's early to say how much and what the level of detail will be. I mean, obviously, we'll be talking to all of you and providing our strategies and our directional goals and probably some specific figures in the areas we can, but I think it's early to confirm right now what those metrics will be.

Speaker Change #165: As part of Investor Day, I mean, we are we have built in the agenda as we speak and and obviously we plan to provide as.

Thomas: As much as possible information to the market, but it's early to say how much and what would be the level of detail I mean, obviously, we'll be talking to all of you and and providing definitely our strategies and our directional goals and and probably some specific figures in the areas. We can but that thing is early to confirm right now what will.

Thomas: B those metrics.

Nacho Abia: As per the generation this year, I think for what I pretty much explained in my presentation, right? I think, I mean, the first six weeks, I spent a significant amount of time trying to understand our 2024 situation with the team, both the commercial team and the finance team. And for the reasons I explained, I feel quite confident that the 1,800,000,000 euros plus that we committed at the beginning of the year will be delivered. As per the short seller report, maybe Thomas wants to comment. Yeah, I'm happy to too.

Speaker Change #172: The spirit of the the EBITDA generation this year I think for what I pretty much what I explained in my in my presentation right I think I mean, the first six weeks I have spent significant amount of time trying to understand our 'twenty 'twenty four situation. We the team by the commercial team on the finance team and for the reasons I explained.

Speaker Change #171: Feel quite confidence that are that they are the 1 billion 800.

Speaker Change #173: Million Euro plastic we committed at the beginning of the year will be the liver.

Speaker Change #173: The short seller report, maybe Thomas wants to comment yeah happy to well first of all the short seller keeps on dishing out misleading.

Thomas H. Glanzmann: Well, first of all, the short seller keeps on dishing out misleading reports and statements. You know, Grifols has provided full details of all its transactions in its financial statements and in specific reports. All the information is public. It's been verified by both the regulator and our auditors. And we really stand by it.

Speaker Change #173: Reports and statements you know Griffith has provided full detail of all its transaction and its financial statements and in specific reports all the information is public it's been verified by both the regulator and our auditors and we really standby, we got nothing more to add to that then standing by by that stage.

Speaker Change #173: So you know I mean I, it's it's it's a it's quite a quite amazing too.

Speaker Change #174: Having continuation from the short sellers like like we're seeing now.

Graham Glyn Charles Parry: We've got nothing more to add to that than stand by that statement. So, you know, I mean, it's it's it's quite amazing to have continuation from the short sellers like we're seeing now. Thank you, Graham. Thank you so much. Jaime, please, from Panco Santander. Hi, good afternoon.

Jaime Escribano: Thank you good awesome. Thank you so much Jaime please from Banco Santander.

Jaime Escribano: So, a couple of questions from my side. The first one concerns liquidity, which is at around $700 million. So, I just want to know how comfortable you are with this liquidity. You have immunotech commitments for Q2, Q3 amounting to around $500 million. And building on this, would you consider using part of the Shanghai Rush proceeds to be more comfortable with your short-term liquidity? This would be my first question.

Jaime: Hi, good.

Jaime Escribano: Good afternoon, I'm, sorry, a couple of questions from my side. The first one regarding liquidity and he's had around 700 million.

Jaime: I just want to know how comfortable you are.

Jaime: With the liquidity you have.

Jaime:

Explorer: And that's a commitment of explorer Q2, Q3 are amounting to around 500 million.

Speaker Change #179: Building on these would you consider to use part of Shanghai Rush for.

Speaker Change #175: Our seats.

Speaker Change #180: Now to be more comfortable on your short term liquidity. These would be my my first could extend under should come on.

Nacho Abia: And the second one, in terms of strategic assets, not sure you probably have time to do an assessment. Is there anything you have identified that you can maybe sell in order to further reduce debt? And another question that probably investors want to know is whether you would consider a capital increase to further improve the balance sheet. Thank you very much.

Speaker Change #181: And then you.

Speaker Change #182: Strategic assets.

Speaker Change #183: Sure you are already happened to do on that front and then is there anything you've kind of identified that you can navy.

Investor: And in order to further reduce debt and another question that for a lot of investors want to know is what are you you would consider a capital increase to find their de leverage the balance sheet. Thank you very much.

Nacho Abia: All right, so on the liquidity level, I mean, again, as you can imagine, this has been one of my focus in the first weeks to understand where we are. I think we are operating at liquidity levels that are comfortable at anything above 500 million. I think it's something that we can comfortably operate at.

Speaker Change #186: Alright, so on the on the liquidity and the liquidity level I mean again as you can imagine this has been one of my on my focus on the first weeks to understand where we are I think we are operating at a at a liquidity level that is comfortable that anything above 500 million I think is something that we can comfortably operate.

Nacho Abia: We are on the 700 plus and with prospects to increase it over the year, so I think we feel confident about that. On the strategic assets, I knew the question would come and I had already anticipated in my remarks. I mean, it's too early to say.

Speaker Change #174: Eight we are on the 700, plus and and with prospects to increase it over the year. So I think we feel comfortable on that.

Speaker Change #185: On the strategic assets I I knew the question would would come in and I already anticipated that in my remarks, I mean, it's too early to say we are doing a portfolio analysis I don't know what the conclusions will be we're looking at at all our not only so there you've got assets, but projects initiatives affiliates and.

Nacho Abia: We are doing a portfolio analysis. I don't know what the conclusions will be. We are looking at all our, not only strategic assets, but projects, initiatives, affiliates. And I mean it's not only about potential or not divested acquisitions. It's also about making sure that all the projects that we have in running the company operate at the expected level as well. Too early to confirm anything.

Speaker Change #187: And I mean, there is not only about potential are not divested two or acquisitions is also about making sure that all the projects that we have and driving the company operates at the at the expected level as well too early to confirm anything the only thing I can assure you is that we're doing the analysis, we're looking everywhere.

Nacho Abia: The only thing I can assure you is that we are doing the analysis. We are looking everywhere, and we will be doing the work and providing information as it comes. As for the capital increase, there is absolutely no plan at this point to consider a capital increase. Thank you, Jaime.

Speaker Change #185: And and we will be doing the work and provide information as it comes.

Speaker Change #185: As part of the capital increase there is absolutely no plan at this point to consider a capital increase.

Jaime Escribano: Thank you. Thank you very much. Thank you, Jaime.

Speaker Change #185: Thank you Amy Thank you.

Simon: Thank you Simon I think it was very clear now we will love to take any question you know from Tivo from Morgan Stanley.

Thibault Boutherin: I think that it was very clear. Now we would love to take any questions, you know, from Thibault, from Morgan Stanley. Yes, thank you very much. So my first question is about financial costs. I think you previously, I mean, Grifols previously suggested that interest expenses could decline in 2024 versus 2023. And it's difficult to reconcile this with that being refinanced at a higher rate, even with the Shanghai RAS process being used to repay.

Nacho Abia: So just if you could comment on this, know that you have a bit more visibility on the refinancing rate. And, second question connected to this, you provided a helpful free cash flow bridge after the full year 2023 results. And I was just wondering if there are any elements that now look materially different from when you issued this bridge, this reconciliation, if there are any elements that are meaningfully higher or lower in terms of cash consumption. Thank you. Let me answer the second one, and Danny will talk about the financial rates. So, no, there are no items which are material on the free cash flow bridge that we presented.

Morgan Stanley: Yes. Thank you very much. So my first question is on financial costs, I think you're going to see I mean can you sort of previously suggested that interest expenses could decline.

Morgan Stanley: So that's just started in Q3.

Morgan Stanley: And it is difficult to reconcile.

Morgan Stanley: Is that being refinanced at a higher rate.

Morgan Stanley: Even though these are the Shanghai as proceeds being used to repay so just if you could comment on this.

Morgan Stanley: No visibility kinder under all kinds of thing right.

Morgan Stanley: And second question connected to this you you provided.

Morgan Stanley: For our free cash flow bridge as does it free up to Q3 results and just wondering if there's any elements that look materially different from when you issued a bridging conciliation.

Morgan Stanley: All elements that are meaningfully higher or lower in terms of.

Morgan Stanley: Cash cash consumption. Thank you.

Danny: I, let me answer the second one and and Danny will will talk about the financial rates. So no there is not.

Danny: Items with chat without a material on the on the free cash flow bridge that we presented and I think that right now we have identified all the key elements and.

Daniel Segarra: I think that by now we have identified all the key elements, and the free cash flow is going to be mostly determined by operational ratios, mostly the working capital and improvements in the operations, as I mentioned. And for the financial rates, Danny, what do you want to say? The financial expenses for the year are expected to be lower compared to the current situation.

Danny: And the free cash flow is going to be mostly determined by by operational radios, mostly their working capital and AR and AR and improvements in the operations as I mentioned and for the financial raise Danny when I mentioned.

Phil: Financial expenses for the year I would expect that to be lower compared to cover on the current situation. The thing as Phil was saying, we expect we are going to close in the Shanghai arrest infection. In June is just gonna, it's going to be the most important lever to see a reduction of our depth of that that.

Daniel Segarra: The thing, as Thomas was saying, we expect we are going to close the Shanghai RAS transaction in June. It is going to be the most important level to see a reduction in our debt, a debt that, as Thomas was mentioning as well, we are going to start repaying part of 2025 but also part of 2027. Especially in the 27, we are paying a variable interest expense. So, when you are putting it all together, even including the private placement for 1 billion at 7.5, the total financial expenses are expected to be lower. Thank you. Thank you so much. And we are going to go with one of the last ones; it's going to be Guilherme from CaixaBank.

Phil Smith: So much was mentioning as well I mean, we're going to go repaying part of 2025, but also part of 2027, you know, especially on the 27, we are paying a variable interest expense.

Phil Smith: So when you are putting all in all you know even including you know the private placement for 1 billion. That's seven five the total financial expenses is expected to be lower.

Phil Smith: Yeah.

Phil Smith: Thank you.

Phil Smith: Thank you so much.

Speaker Change #192: And we Gotta go no go with one of their lives one is gonna be guillemin from Kasha Lang BMO. Please.

Speaker Change #195: Hello, Thank you for taking my question so.

Speaker Change #188: One I don't know if it's just too early but at.

Guilherme Macedo Sampaio: Guilherme, please, at least could you provide us a sense of where you expect the leverage or where you want to put the leverage of this company over the midterm? We understand it's going to rebound four times over, perhaps the beginning of 2025, but over the midterm, where do you feel comfortable with? And the second one is a small question; just if you could provide some reconciliation of the free cash flow generated in the quarter with the increase that you reported.

Speaker Change #193: At least could you provide us a sense of well where did you expect to leverage our what do you want to put the leverage of this company over the midterm, we understand it's getting to about four times over perhaps thinking of 275, that's a bit tougher to meet them, where do you feel comfortable with and the second one is small questions.

Speaker Change #193: If you could provide some reconciliation of free cash flow generated in the quarter, we the increase in net debt.

Reporter: Reporter I have seen some increase in the ifr 16 relate to liabilities. If you can provide some color.

Guilherme Macedo Sampaio: I think there will be some increase in the IFRS 15 related liabilities. If you can provide some color on this, thanks. Yeah, on the leverage level, I think that there are many, there are probably many opinions about what is the adequate level of leverage that the company should have. If you ask my opinion, and this is a general statement, not only applicable to Grifols, I think, I mean, between 3 and 3.5 is a reasonable level to operate at.

Speaker Change #193: Yes.

Reporter: Yeah on the on the liver level send that I mean, there are many there are many probably opinions about what is the the adequate level of leverage that a company should have I I. If you ask my opinion and this is a general statement not not only applicable to greenfield type of thing I.

Speaker Change #199: I mean around between three and 3.5 is a is a is a is a reasonable level to operate a I think it also depends a lot on what are the strategic considerations. As you are having right staffing at some point you might need to lower your leverage as you're facing some potential.

Nacho Abia: I think it also depends a lot on what are the strategic considerations that you are having, right? So I think at some point, you might need to lower your leverage if you are facing some potential opportunities for acquisitions. But our work as the first step is obviously our committed four times leverage, and we are working towards that. Once we get there, then we will provide guidance about what the next step should be.

Angel: Angel opportunities or acquisitions, but our work as a that's the first establish obviously are committed to four times leverage and we're working towards that once we get there then we will provide guidance about what is an extra step.

Nacho Abia: As for the free cash flow, Dani, what do you want to mention? Sure. On the free cash flow and the debt, I mean, this first quarter, the increase that we had is pretty much in connection with the free cash flow that we had basically on the net working capital impacts, the non-recurring items that we were disclosing, and it brought about this net debt increase.

Danny: As far as the free cash flow Danny you want to mention so on the on the free cash flow and net debt I mean, this first quarter pretty much of increase that we had it's pretty much in connection with the free cash flow.

Danny: That we had basically on the net working capital impact of the nonrecurring items that we would have is closing I need to have these are these net debt increased.

Daniel Segarra: As Nacho was mentioning, under the leveraging path, you will see that we expect to recover this piece. It's going to be part of our deleveraging path. So as long as we expect to generate more cash flow in the next three quarters, it's going to help, it's going to support our deleveraging path in connection, not only with an improvement in terms of day, but also a reduction in terms of net debt on top of the Shanghai Rush transaction that has been well discussed, your second kind of like opportunity here. Charles, please.

Speaker Change #188:

Speaker Change #188: Nacho is mentioning under the leveraging past you will see that you know we expect to recover this busy it's going to be part of our deleveraging path. So as long as we expect to to generate more cash flow in the next three quarters. It is going to help is going to support our deleveraging path in connection not only with an improvement in terms of its day.

Nacho: But also a reduction in our in terms of net debt on top of the Shanghai restaurants action that it has been well discussed.

Speaker Change #188: Okay. Thanks.

Charles Pitman: Thank you so much Peggy Army, we're gonna take the last one is it going to be Charles you'll second kind of like opportunity here Charles Please.

Charles Pitman: Hi guys, just a couple of clarifications. Just earlier, when you said capacity and fractionation is at 70%, can you confirm that's the current utilization of your full capacity and that the centers that you've got to 27 before you start adding centers, that's just on top of what you've already announced? And then did you address the comment around your midterm cash flow cumulative guidance or based on the fact that, naturally, you're still getting so the company, are we just kind of not talking about Could you reiterate that, or should we wait for 2Q?

Charles: Just a couple of clarifications just anyway, you said capacity on Fractionize fractionation of 70%.

Charles: The current utilization of Joel full capacity.

Charles: And that the centers that you've got to train seven years before you start adding centers that just on top of what you've already announced.

Charles: And then could.

Charles: Could you just comment around mid <unk>.

Charles: For your cash flow cumulative guidance, so based on that.

Charles: We're still getting I'm sorry.

Speaker Change #194: The company.

Speaker Change #201: And I'm not talking about that one state could you reiterate that or should we wait for <unk>. Thank you.

Thomas H. Glanzmann: Thank you. So let me just, you know, the 70% that is current capacity, number one, and the 20 centers that I mentioned, that's not until 27. So we're well situated today with the centers we have, and again, I reiterate, you know, we got centers coming online in Egypt, and we got centers coming online in Canada. And obviously, the key focus for us is to continue to improve the efficacy and efficiency of our current centers in the U.S., which we are in the process of doing.

The company: So let me just you know the 70% that is his current current capacity.

Speaker Change #197: Number one in the 20th centers that I mentioned, that's not until 'twenty seven. So we're we're well situated today, where the centers, we have and again I reiterate now we got centers coming online in Egypt, and we got centers coming online in Canada, and obviously the key focus for US is to continue to improve the efficacy N R. F.

Us: Efficiency of our current center.

Us: Centers in the U S, which we are in the process of doing.

Thomas H. Glanzmann: As part of the cash flow projection, Charles, I think I mentioned several times that I think for now, I'm focusing a lot on 2024, and this is what we provided guidance on today. I'm comfortable, I see a lot of opportunities, I see a lot of things that we can do. We have to do the work, but I'm very comfortable and confident about the cash flow we can generate in the years to come. But I'm not ready yet to give you an answer.

Charles: As part of our cash flow projection Charles I think I mentioned already several times I think I am from now I'm focusing a lot in 2024 and this is where we provide the guidance today I'm I'm comfortable I'm I'm I see a lot of opportunities I see a lot of things that we can do we have to do the work, but I'm very comfortable and confident about the cash flow.

Charles: We can generate in the years to come, but but I'm not ready yet to give you a number.

Thomas H. Glanzmann: With that, I think that we have answered all the questions, so I just want to say thank you all for joining us today. If you have any follow-up questions or further inquiries, please contact the IR team. There is a dedicated team to keep engaging with you. Thank you so much.

Charles: Perfect. Thank you so much. Thank you. Thank you Charles with that I think that we took all the questions. So I just want to say thank you all for joining US today. If you have any follow up question of further inquiries. Please contact the IR team and he said they vacated wanted to keep engaging with you. Thank you.

Speaker Change #197: So much.

Speaker Change #197: Everybody. Thank everybody. Thank you bye bye.

Speaker Change #197: Yeah.

Speaker Change #197: [music].

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