Under our revised base-case for 2026 and 2027, we forecast leverage will gradually decline to 4.2x-4.7x by year-end 2027, and FOCF will increase from about €400 million in 2025. In line with the company's guidance, we forecast FOCF of approximately €400 million in 2025, up from €302.9 million in 2024. This is supported by higher EBITDA and stabilizing growth capital expenditure (capex) notably stemming from the phase-out of Immunotek payments, which should more than offset increased working capital needs associated with growth. Given limited immediate needs to expand the donor-center base, as well as sufficient manufacturing capacity to meet expected growth in demand in the coming years, we foresee Grifols shifting its growth capex to increase efficiency in the supply chain to drive manufacturing and plasma collection yields. Notwithstanding Grifols' efforts to drive inventory optimization--optimization of the cost per liter, yield improvements, and end-to-end supply-chain efficiencies--we continue to expect annual cash outflows of €150 million-€200 million annually over 2025-2027 as the company builds plasma inventories to meet expected demand growth. In our view, continued EBITDA growth and normalization of capex should support further FOCF expansion over 2026 and 2027.In our view, deleveraging will be slowed by Grifols' intention to allocate excess FOCF to dividend distributions and the buyback of Haema and BPC. We understand that Grifols' strategic priorities remain reducing net leverage toward its 3.0x-3.5x target range (4.0x-4.5x on an S&P Global Ratings-adjusted basis), from 4.2x as of Sept. 30, 2025, and further improving FOCF generation. That said, from 2025 onward, we expect the company to allocate some of its incremental FOCF to acquisitions--primarily related to portfolio optimization--and to reinstate shareholder returns. This includes the delisting of Biotest, completed in 2025 for €102 million, as well as our expectation that Grifols will exercise its call options on Haema and BPC for a combined net cash outflow of approximately €500 million in 2026. Taken together, these factors should slow the deleveraging trend demonstrated in 2024, with our adjusted leverage ratio expected to decline more gradually to about 5.0x-5.5x in 2025, 4.7x-5.2x in 2026, and 4.2x-4.7x in 2027. Based on our understanding of Grifols' financial policy, we see limited likelihood of additional discretionary spending that could hinder the deleveraging path over the forecast period.AssumptionsPositive underlying demand trends for IG, supported by higher diagnosis rates for key indications, an aging population, increased disease awareness, and rising use of plasma-derived therapies.Pricing pressures for albumin to persist through 2025-2027, due to health care cost controls implemented by the Chinese government.Revenue growth of about 4% in 2025, driven by the IG franchise and largely offsetting pricing pressures in the albumin business, as well as the weaker U.S. dollar and the impact of the U.S.' IRA.Revenue growth at 6%-7% on a constant currency basis in 2026-2027 as the underlying business continues to expand and the impacts from the IRA subside.S&P Global Ratings-adjusted EBITDA margins gradually increasing to 23.5%-24.0% in 2025, 24.0%-24.5% in 2026, and 24.5%-25.0% in 2027, driven by positive operating leverage, gross margin expansion, and normalizing exceptional cash costs, partly offset by selling, general, and administrative expenses and reinvestments in product development and commercial capabilities.FOCF of about €400 million in 2025, and increasing over 2026-2027, supported by higher EBITDA, normalizing capex, and lower cash interest expense more than offsetting higher inventory investments to support growth.Capex decreasing to about €450 million annually as committed payments under the ImmunoTek agreement phase out, with growth capex focused on manufacturing and plasma-collection efficiency.Working-capital outflows of €150 million-€200 million annually over 2025-2027 as the company secures plasma inventory to meet expected demand growth.About €100 million of acquisition spending in 2025 related to the Biotest delisting, and about €500 million of net cash out in 2026 related to the Haema and BPC buyouts, with no meaningful acquisition spending in 2026.Dividend distributions of about €100 million in 2025, €180 million in 2026, and €250 million in 2027.
España