Credit rating agency S&P Global Ratings reports that a recent assessment of Grifols could shade its access to short-term debt markets. The new study weighs how ongoing market sentiment may influence the company’s ability to tap liquidity in the near term, even as it outlines a path back to stronger financial health.
Analysts with S&P note that the allegations circulating around Grifols and related market chatter may cloud investor perception in the near term. This could influence trading activity in credit markets, potentially making it more challenging for the company to secure new short-term funding at favorable terms.
The evaluation closes with a cautious note: while bearish reports might dampen market mood, Grifols’ solid cash generation remains a counterbalance that supports its overall credit position. This is seen as a factor that could limit downside risk in a volatile period, even as the broader debt markets breathe with some headwinds.
In formal terms, S&P Global Ratings kept Grifols’ long-term issuer rating at B+ and assigned a stable outlook, basing this stance on an anticipated deleveraging path through 2024 aligned with improving operating performance and disciplined financial management.
The rating agency emphasizes that the deleveraging plan for 2024 remains intact, supported by stronger fundamentals in the global plasma market and ongoing cost-saving initiatives. The combination of higher operating efficiency and favorable market dynamics underpins the projected improvement in credit metrics.
Within the report, S&P notes that adjusted EBITDA margins are expected to stay around the mid-20s range in 2024, with the trajectory improving from 2023 levels. The sale of Grifols’ stake in Shanghai RAAS to Haier is identified as a catalyst that should contribute to deleveraging and liquidity restoration.
From this perspective, the analysis highlights that cash generation is forecast to turn positive by the end of 2023 and to strengthen further in 2024 after a dip in 2022 caused by working capital needs and inventory cycles. The assessment thus looks for a gradual recovery that supports near-term liquidity and longer-term solvency.
Looking ahead, the report estimates that Grifols’ leverage could rise to about 5.6x by the end of 2024, compared with nearly 9x in 2023. Nevertheless, S&P analysts express confidence in the company’s ability to meet liquidity requirements over the next 12 months, supported by the improved cash flow generation and the expected market recovery in plasma products.
The stable outlook on Grifols’ rating reflects an expectation that credit metrics will edge higher as the plasma market normalizes globally. This improvement is expected to support sales growth and EBITDA, reinforcing the company’s ability to service debt even amid ongoing market adjustments.
In their assessment, S&P also points to 2024 as a year with better-than-expected results, driven by cost-saving programs that mitigate prior profitability pressures. The report notes that profitability softened during the pandemic due to disruptions at plasma collection centers, especially in the United States, which created imbalances in the global plasma market and weighed on margins.
Finally, the agency cautions that if Haier were to withdraw from its acquisition of Shanghai RAAS, refinancing Grifols’ bonds maturing in May 2025 could face renewed pressure. The potential withdrawal would pose certain refinancing challenges, underscoring the sensitivity of funding plans to strategic decisions by major shareholders.