Grifols, S.A. (GRF) Earnings Call Transcript & Summary

And very good commercial footprint, very complementary to Grifols in the sense that they are not present in the U.S., we are very strong. And they have a stronger presence in some regions in the EMEA region, which is extremely complementary, both companies. Brief description of Biotest number. This is public data, so I will not extend much. I have said, and Raimon have said, it's a family origin company founded in 1946. They have 2 manufacturing sites, one already for many years working around 1.5 million liters of plasma per year that it can process. And just -- it's about to finish an expansion of a new plant in the same site for additional 1.5 million liters. So in total, this new combination will give 3 million liters of additional manufacturing plasma throughput capacity per year, plus the 26 centers that I have just mentioned. And last, of course, but not least, Biotest, it's an entity that around -- has around 2,000 employees overall. And you see here the projections. The last actual data for revenue and for EBITDA, a solid revenue trend, with a boost in 2020 compared to 2019 and a good performance in this adjusted EBITDA, which is an adjusted by the company, excluding basically R&D and this new CapEx project that they have -- that I have just mentioned. Well, if we join forces, if we complement each other, we think the result will be fantastic. Again, both are family origin company, and with family spirit in the management still today, Biotest has a highly experienced management, very, very knowledgeable of the industry, which is very important because it's a very special industry. As I said, a strong presence in Europe. And more -- very, very important, a strong pipeline that, in the short term, will deliver results that what we expect and they expect. And maybe I think that they are not good and Grifols will bring complement to that is that they don't have access to U.S. plasma nowadays. And Grifols, you know us very well, we are a leader in the industry. We have a good track record in growing business both from the organic and inorganic standpoint; a strong plasma in manufacturing and engineering, you know that very well from us; and a strong presence in the U.S. And the result of this combination is what you have in the right-hand side. Basically, it's -- again, these 2 new proteins will enhance our plasma economics in the form of additional revenue per liter. We will strengthen both our pipeline, you will see in a minute. And just to highlight, for instance, the last bullet in this slide is that we will become an industry player with more than 20 million-liter per year capacity of fractionation, which puts us in a very strong position in the leading. Continuing with Biotest -- well, what this combination will bring. As you can see here, Grifols and Biotest combined, we will be around, let's say, the globe from east to west in the plasma collection space. Grifols was already in China through the Shanghai RAAS, you know that. Recent efforts in Grifols in the last 3 years to become an industry leader in collecting plasma in Europe. This, for sure, will be enhanced with this integration, adding 26 plasma centers. And our story in the U.S. totaling 300,000 with this recent effort that is shown here with this additional of 11 plus 25, plus 7 plasma centers totaling 43, leading us to put in 300,000 in the U.S. So all together, if we are combined, we will have 380 plasma centers, which is, as well, an industry-leading position here. The complementary from the commercial footprint, they are very strong in Europe or high percentage of the revenue for them come from Europe. Very little from the U.S. To the contrary, in Grifols, Grifols is very -- all the revenues -- most of that around 70% is coming from the U.S. So again, very complementary. Now the pipeline of Biotest, which is one of the key aspects of this investment, on this journey. Here is a summary of their pipeline, and we want to highlight in blue, it's shown here in blue, the 2 main proteins that we think are paramount for this transaction is fibrinogen and IgM. Fibrinogen they have a clinical development in place to get indications both in congenital and acquired deficiency of that protein. They both are in Phase III. And we expect them, based on the information we have, that they will be able to -- we will be able to launch that during even '23 or early '24. And you have here the market around EUR 800 million per year. There is competition in this field, and we plan to license both in Europe and in the U.S. In the U.S., there is less competition. And IgM, in this case, it's no competition at all. It's a brand-new product. It's an enhanced IgM cocktail with more portion of IgM versus other Igs, which will give a boost in terms of efficacy. That's what we expect for the product. And similar timing in terms of launching around 2024. And the estimation of the market is minimum EUR 1 billion, that's what we expect from our intelligence to up to [ EUR 2 million ], depending on how rapid we develop this market. I put their pipeline, and our pipeline together in Grifols, you can appreciate here that there is really a minor overlap in the projects that we are ongoing. And the only overlap that we have is in Fibrinogen and in IgM in the concept of, okay, same proteins, that's an overlap. But there is no overlap in terms of timing. Grifols, we are less advanced in the progress on the clinical program. And as you can see here, we have those products in still a preclinical phase. So the idea that we have is that we will discontinue our Fibrinogen projects, our IgM, and Alfredo will present later, this will result in a synergistic for our P&L. Going back to plasma economics. This is the very same chart that I just explained. And in the next slide, you will see the effect of the addition of these 2 proteins that I was mentioning, fibrinogen and IgM, and the effect is that one. You add revenue, which is highlighted here in this light blue for IgM and dark blue for Fibrinogen. This is for 1 given year. So we have expanded this blue area. We have captured value from this latent revenue that was there by adding these 2 proteins that are a reality -- will be a reality in the market. But here it's key to notice that the plasma cost line, this red line in the bottom has not changed at all. It's in the very same place as it has been in the previous scenario, meaning that there will be automatically an increase in the gross margin. And you can see that in more detail here in this slide. Assuming that today Grifols' revenue per liter, this is on a per liter basis, is 100, so base '21 equals 100. We add to this these new proteins that will be launched in '24, around '24. The same cost of plasma on a per liter basis, this doesn't change but you add revenue to this basis of 100, meaning that you will, for the -- by the same cost of plasma, you enhance your revenue in 11 points, let's say, 11, therefore, resulting in an enhanced and increased margin going from [ 45 to 50 ]. Another way to see the effect in plasma economics of having additional proteins with the same cost of plasma. Let's assume industry growth around 6% to 8%, okay, meaning that the plasma that you need to grow every year, it's around 6%. This means this organic growth only with this orange color. But when you add 2 new proteins that in the past year didn't have, your revenue automatically has to grow or will grow more than this 6%, more than the input, more than the cost. And the effect of this combination of 6% cost, but 8% revenue, it's a resulting that your CAGR for your gross margin -- it's kind of -- has a boost, a turbo, and goes up to 10% per year. This is another way to look at this. And I think this is my last slide, and now I transfer to Alfredo.

Thank you, Victor. Good morning to everybody. I'm going to show you a few slides about numbers. The first one shows that this transaction will bring incremental EBITDA of more than EUR 600 million by 2026. Around EUR 300 million will be obtained by 2024 and an additional EUR 300 million will be obtained from 2024 up to 2026. The main contribution of this incremental EBITDA, as you see in the slide, comes from the new product contribution, the IgM and fibrinogen. These are 2 products that will bring high gross margin due to the fact that currently, those plasma fractions are thrown away. In addition to the product contributions from these 2 new products, we have the Biotest EBITDA stand-alone contribution plus around EUR 75 million OpEx synergies expected to achieve up to 2026. These OpEx synergies will come from -- basically from the fact that there are certain functions and activities that are overlap. R&D cost savings, we expected that, in addition to this incremental EBITDA, to achieve more than EUR 200 million savings from Grifols and Biotest overlap R&D projects. Also, we'll enjoy a one-off EUR 50 million CapEx savings by using Biotest capacity. Now I'm going to show you a bridge EBITDA analysis. So it's kind of more detail coming from the previous one. First, on the left-hand side, as you see right now, this is the Grifols stand-alone EBITDA, last 12 months June, EUR 1.4 billion, that was the reported EBITDA. And then we add back the COVID impact. We have a negative COVID transitory, COVID impact associated to lower collections and higher cost per liter. And then we add back the EBITDA from the brand-new recently acquired 50 new donor centers, so this is the EBITDA coming from those centers. So once we consider this, we have an underlying EBITDA ended June, last 12 months, of EUR 1.7 billion. So this is the starting point. And then from the previous slide, we had the incremental EBITDA of EUR 600 million. Once again, new product contributions, OpEx synergies. And then we have around EUR 500 million from the organic EBITDA from both companies. Once we factor all of these numbers put together, we see that by 2026, we expected to achieve EUR 2.8 billion EBITDA with a margin of 32%. Leverage. The company, as always, now more than ever, is highly committed for a rapid deliver. This chart shows -- this is a bridge -- analysis about how the leverage ratio is going to evolve in the coming years. Starting as a baseline and the June number, we reported 4.9x leverage. If we consider the underlying EBITDA from the previous slide, this is 4x. And then we take into account the $1 billion investment coming from GIC. This transaction will be closed early Q4 of this year. So this transaction, as we announced, will be used -- or these proceeds will be used to repay debt and to increase the company's liquidity. The next step is the EUR 2 billion financing for this investment. We have already, from Bank of America, committed bridge loan. But at the same time, we are planning to explore other financing options in the unsecured debt market. With -- once we consider these 2 items, the GIC investment and the financing of [ this mark, ] of Biotest, we see that the pro forma leverage as of June is 5.4x or 4.4x considering the underlying EBITDA. And then here it comes, this C letter shows the firm commitment of the company to -- for a rapid deleverage. So the company will do whatever it takes to achieve this rapid leverage. Through a financial discipline and other things, we are considering not to make any significant M&A transactions as well as cash dividends. And this is in line with what we have done in previous years, in previous transactions. So the company knows what is going to be our leverage. And again, as we have done in the past, we'll do whatever it takes to further reduce or to reduce this level, to come down to expected levels that by the year 2024, should be below 3.5x. This is just some transaction highlights in addition of the announcement. The transaction values Biotest equity at EUR 1.6 billion. And once we consider debt around EUR 400 million, this gives us an enterprise value of around EUR 2 billion. Grifols offers around EUR 800 million for the 90% of Biotest ordinary shares and 1% of Biotest preferred shares plus EUR 310 million of outstanding loan. This offer includes around 23% premium to the 30-day price volume weighted average price for Biotest ordinary shares. Upon completion, Grifols will indirectly own 90% of total share capital by voting rights and 45% by economic rights. Grifols launches tender offer for Biotest remaining ordinary and preferred shares for cash.

Okay. So now to end this presentation. This is a sort of a resume. You can see that by putting together Grifols and Biotest, we are really marking the plasma industry. You see here the value creation, okay? So it has been explained in the previous slides. But what is more important for us, I think, is this final slide, which is what is moving us to do some -- this type of investments. Well, we are going to put more product in more places, accessible to our patients, which as, at the end, is our goal and our feat here. And also having new products to treat new diseases that now are unmet diseases and to give new treatments to our patients, okay? And we are doing this following the commitment of my grandfather, Victor's great grandfather, which is here is this phrase from him that is what is moving refers to move forward industry. So thank you very much for your attention.

Thank you very much. Thank you all, and we hope you have found this explanations helpful. Let's go into the questions now. Let me remind you that you need to register -- sell-side analysts need to register through the Zoom link, and we'll be taking your questions here. Here, we have been joined now by Tomas Daga, who's a Board member; and Eduardo Herrero, President of the Bioscience Division. So let's see. We have first question. Let's switch, one moment, the screens. This is coming from Michael Jungling. Hi, Michael?

Can you hear me?

Yes, perfectly. Thank you.

Great. Great. Interesting deal. But I have a question about the pipeline. It seems to me that a good chunk of the synergies is the pipeline. And from 2020 onwards, things needs to look pretty good in terms of achieving the synergies. How much due diligence have you been able to do to make sure that the pipeline that you described on Page 10 is indeed safe and sound for investors to rely on? I'm trying to understand whether you've appreciated all the risks when you've given that 2024 and 2026 EBITDA guidance.

Michael, we have done a due diligence in the extent that we have been able to. But really here, fibrinogen, it's a product that is already being used and it's already being sold by other companies. It's basically to replace, in case deficiency or depletion of that product, meaning that clinically, we think we will be able to license the product, both in Europe and in the U.S. And IgM kind of the same, they are well advanced in this project. For many years, they have been working. Remember that for IgM, Biotest is the only company that has had kind of an IgM product in the market. This is a new version, putting more proportion of IgM into the Ig cocktail. And the product has been marketed by them for many years. And this, we expect to be the same.

Okay. Thank you. Thank you, Michael. We have one other question. I cannot see the name. Veronika, now I can see you. Thank you. Please, welcome.

Excellent. Just -- actually, a question on the synergy and what is the key driver of the operational efficiencies that you expect from the business? And I guess, any claims that you guys have to streamline the fractionation footprint that you will have? And then maybe related to that, with Talecris, one of the big benefits that you uptake was yield efficiency. So I'm wondering if that is an opportunity here and to what extent that's included in the EUR 65 million of synergies that you're talking about versus to what extent it could come on top?

Okay. Veronika. Well, the synergies, as I said, basically coming from these new products, which is the chunk of this, I would say, incremental EBITDA, and as I said, currently, we are throwing away these plasma fractions. So those will be brand-new products with no cost, okay? So you just factor this in our plasma economics, as mentioned by Victor, suddenly, you're going to get a significant boost in our margins. The other OpEx synergies basically are not, I would say, front-end synergies, more back-office synergies, the standard synergies typically in this transaction.

In addition to that Alfredo, we have kind of R&D synergies by canceling our current IgM and fibrinogen clinical programs. And from the manufacturing standpoint, it's a really good company. We have been able -- maybe, Eduardo?

I mean the reality is that this is also a strength or capabilities in Europe. We will be able to have more than 8 million liters of fractionation. And also, they have a state-of-the-art facilities. We know that. And well, they have the 3 proteins that we all know, but these new brand new proteins that provide additional yield and also the possibility of enhanced these new indications. These 2 new proteins are proteins that we all know because Grifols has been working for some time on them, so we are very familiar. But they have an accelerated program because these proteins are in clinical stage, in late stage, and this is a big advantage for us. So from the manufacturing standpoint of view, industrial point of view and also plasma procurement is a significant advantage for us.

And are there any synergies from a CapEx perspective that you guys can talk about?

CapEx, as mentioned in one of the slide, we are going to use part of the capacity -- manufacturing capacity and, therefore, we're expecting a EUR 50 million CapEx savings.

And there is another synergy, difficult to calculate now Veronika, but it's the supply chain -- related with supply chain. I mean, sourcing plasma from Europe and shipping this plasma to plants that are already in Europe, and in the case of Biotest, it's Germany, so its neighbors, and Spain. And we know supply chain, how complex has become now as a consequence of the pandemic. And so we think this is an important synergy. Again, difficult to calculate, but derisking for sure, it's intangible, but it's a synergy here as well.

Thank you, Veronika. We have another question coming from Tom Jones from Berenberg.

It's very much appreciated. Just 2 quickies, if I may. I mean the first, wondered if you could give us some more color on the likely shape of the tender process for the remaining shares, timing, squeeze out potential, whether you intend to put any conditions -- meaningful conditions on that tender process? And then the second question was really just about you're very welcome, I would say, provision of explicit EBITDA and margin targets. I'm not so interested in how you get that, I think you've explained it all quite well. But what I am interested in is why you've taken this choice to be so explicit about what you expected from this deal. That's quite a significant change for Grifols as far as I can recall in the last 15 years, you've only given an explicit margin guidance once, and we all know what happened after that. And when your rationale for that was you didn't want to hamstring yourself in the future and didn't want to restrict future investment opportunities, et cetera. So I'm intrigued to know what's changed that's giving you the impetus to provide such explicit guidance and targets this time around?

Okay. Take the -- yes, Tom, regarding the tender process, we expect to submit our offer at the end of October, okay? But this offer, as you should know, will be subject to certain conditions. And one of the conditions, of course, is to close our deal with, let's say, controlling shareholder of target of Biotest. We believe that it's a good offer. We believe that most of the shareholders will tender the shares. And if this is the case, of course, at the end, we will squeeze out any remaining shareholders. But if for whatsoever reason, people doesn't want to tender the shares, we'll be more than happy to work together with Biotest, to keep it Biotest as it is because our idea is to give it independent, to take the best values of this company working together with Grifols. We expect that nothing will be finalized until, let's say, during the first half of 2022, remember that we have to clear competition authorities in Germany, in Austria, Spain and Turkey. So we expect to have a clear view of everything during second quarter of 2022. This is regarding the voluntary tender.

Okay, for the second question, I mean, we are not changing our forward-looking guidance for the existing business. But since this is a business that has not yet come, that is going to come. We need to provide to the markets with certain color about high-level numbers, what the synergies that will be achieved and how the deleverage will be evolved over the time.

And given your sort of reluctance to provide guidance in the past, should we take these targets that you've laid out as kind of minimums rather than expected maximum? Or is that taking it just a step too far?

No, this is a base case. And then, there are certain items, for instance, the item of these savings, R&D savings, more than EUR 200 million, this is not included in the incremental EUR 600 million. So I would say that this is our base case, our best estimate.

Okay. Thank you, Tom. We have now Jo Walton from Credit Suisse.

Just a few, please. Just to clarify, it shows that at the end of this transaction, you'll have 45% of the economic rights. So I'm presuming that you are -- or your forecast, you're basing on 100% of the economic rights, so just to check how that works. Could you tell us, please, what the interest rate is that you're paying on the debt that you're getting -- you may be able to refinance it with what your staffing level of debt is? And is there any chance that Europeans perhaps, in Germany, where you would have the biggest overlap, that they would see any concern about the concentration of ownership that you will have of collection centers? And my final one is whether you can tell us how many million liters or what the literage is that you will get in with those 26 centers that you're getting in Europe?

Okay. For the first question regarding the cost of debt, we are, as I mentioned, we are exploring, we are planning to go to the market, to the unsecured debt market. And then once we launch the -- whatever is the debt instrument, we'll figure out the cost of this debt. But currently, we have not, I would say, yet determine the cost of debt.

Regarding concentration, you asked it, our assessment tells us that we do not expect to face any significant issue with German authorities. And if you focus your attention on the plasma centers, we believe that we will be in a position to explain them that this is not going to be a concentration for the final product. But on the other way around is going to have more benefits to final consumers because, as we said and they explained before, there will be more product on market if we take our plasma -- our U.S. plasma. So we do not expect really to have significant issues.

And regarding plasma collection, remember that the transaction provides additional centers in Germany, about 9, but then opens other countries like Czech Republic. And we are talking about 4 countries. So we have now presence -- or we will have presence in Austria, Czech Republic, Hungary and Germany. And as Tomas was saying, this helps for the European source efficiency that always is a concern for everybody. So we don't see this a problem. Otherwise, it's a big opportunity.

Okay. Thank you. Thank you, Jo. We now have Jaime Escribano on the line. Please, since we have quite a few questions coming in, let's try to keep it to one question. Sorry, Jaime, it's not a specific warning for you, it's for everybody who comes after you.

Yes, no problem. So thank you for taking my questions. So I have one regarding what would be the CapEx and integration costs that you need to invest in order to unlock the synergies? So for example, your remaining CapEx unit for next level plan of Biotest and any integration cost to unlock on these synergies? And yes, one question regarding synergies would be most of them come from the new products, which are launched in 2024, so should we assume that a big part of synergies will not come until 2024? Or how much you expect in 2022 and 2023? And just a very final, very short one. Would you think in merging A and B shares, accepting cash in from B shareholders in order to recapitalize as an option to further delever the company?

Regarding the -- I think that we have to be very respectful. We are going to issue a public tender. So for the time being, we have to treat and we have to respect Biotest as an independent company, the management, Supervisory Board and everybody. So this means that synergies, of course, that will come between the collaboration of both companies. And this is very important to put it here crystal clear. Our plasma, there are 2 new products, and this is going to happen. We need to sit down with them and we need to talk. Up to now, we have not seated neither with management nor with the Supervisory Board. And this is something that I want to leave it clear because we don't want to raise false expectations. Regarding merging shares or not?

On the CapEx that you mentioned, they have already completed the plant. So we will not invest any further CapEx in -- from our side. Moreover, as I said, we're going to have around EUR 50 million CapEx synergies. For the second point, the -- yes, we said that, as mentioned in our slides, that '23, '24 will be launched those products. So at that time, you will see or we will see the synergies coming from new product contribution coming into line.

Okay. And regarding the A and B shares, just to -- because some investors are asking if there could be a capital increase or some kind of transaction like cashing in from A, B shareholders? Just to be clear on that.

You refer A, B shares. Grifols A, B shares or Biotest or...

Yes, B shares, which will be an option.

No, no, no, no. We believe that it's too early to talk about all these issues. We -- as you know, we fully respect our A and B shares and especially B shares, we love them. And we'll try to do the best to give more value to B shares. But I would like to say something. I think that you should help us trying to explain investors that B share is like A share. It has the same economic rights, same value, exactly the same look what's happening right now in Biotest. In Biotest, nonvoting shares have the same value that voting shares. Is that correct? So in Grifols, should happen the same. But for the time being, we have not yet decided what to do.

I thought we had Rose on the line, but I'm not sure if we have lost -- Rose Turner from Barclays.

Hi. Can you hear me okay?

Yes.

Fantastic. So just a couple of very, very quick ones from me, cognizant of the one question limit, but everybody else has broken it. So the dividends, can we just clarify exactly when you expect to start paying a cash dividend again. Is that '23 or '24? And then is there a prospect of that being a script dividend in the meantime? And then just around divestments because that was discussed a bit at the CMD. Does this kind of speed up your planned divestments given the leverage that will be -- you'll be taking on with this?

For the next one, as I mentioned, cash, we are not planning to pay cash dividends until we are below 4x. So I said cash dividends, okay? So everything else could happen. The -- so scrip dividends is -- we have used scrip dividend in the past. So it could be an option, but this is something that needs to be approved by the Board and AGM. The other question is the divestments. As we announced in the investor meeting, now we are actually working on divest those nonstrategic assets. And soon, we will see that some of these nonstrategic assets will be divested. So we are working on that.

We have a question coming from Peter Verdult from Citi.

Just can I use the opportunity given all the questions that have already been asked, just to check in with Victor and Raimon on what you're seeing at the moment in terms of U.S. collection trends since you last updated us and outlook for donor fees. Just anything you can point to in terms of incremental data points since the last update, I'd be interested to hear what the current situation is?

Peter, I prefer this because a lot [ think that it's I ] that is managing day-by-day this.

As you know, we indicated in the last investor meeting that our plan was to have this recovery in the second part of the year. We have seen this recovery in European collections and in China collections. U.S., we have up and downs. The reality is that we have our action plan performing well. We have seen some additional stimulus coming in mid-July. We have also seen the vaccination rates, let's say, progressing, but we have reached some hold in some states. And also, we know that summer stimulus, unemployment checks and so on have been stopped in September. So what we can say is that the expectations that we have for the recovery in second part of the year and early '22 continues. The action plan is there. Also, the border with Mexico remains closed, as you all know. But we maintain our action plan, we maintain our national campaigns. We have also continue with the organic growth. We are opening centers in the U.S. We have recently opened in several centers. We have established a new deal with ImmunoTek, as you know. So we are well prepared. We know that this is a temporary situation. We see in China and European, they are recovering. We don't see why not, we cannot do the same in the U.S.

Yes. And adding to this philosophically, Peter, what I mentioned about diversifying our geographical collection, okay, not being so dependent from one particular region. So now, in Europe, we will have, if this goes on, a total of 80 plasma centers out of our 380 plasma centers in total. So this is the trend that we want to have diversification to try to mitigate as much as possible fluctuations for whatever reason like, unfortunately, the pandemic has happened.

And Victor, if I can just follow up quickly. I think when we last got together in June, you were hoping that early next year, we might see donor fee fall. Any change in that view or be sort of sooner or later?

Sorry, I didn't understand precisely your...

Donor fees -- compensation fees.

Compensation fees, as you know, has been one of the main drivers to start this recovery. We are working with the idea that for next year, we see a decline, but we are not in a position to say if this decline will start in end of the year or Q1. But we are working with the idea that as the pandemic is gone, the stimulus checks and the additional funding from the government is gone. With the action plan we have in place and the efficiencies because we are working also with several efficiency in our fleet, we see that this is -- there is a possibility. And we are working with that concept. Yes.

Okay. So José Maria, we have José Maria Cánovas from JB Capital.

Hello, can you hear me?

Yes.

Very quick. So I wondered if you could share the collection capacity of the 26 centers of Biotest? Secondly, and just to clarify, you're talking about EUR 600 million roughly incremental EBITDA. However, in the bridge that you disclosed, you're including Biotest EBITDA. So just wondering if I'm missing something here? And finally, maybe just to ask if the new leverage levels that you will reach could confront with any of your covenants? And you were talking about any measure to reduce debt, would you consider at any point a capital increase?

Okay. The EUR 600 million, okay, this incremental EBITDA is on -- it's based on Grifols stand-alone, okay? So you have Grifols stand-alone. And then the incremental will come from Biotest stand-alone plus the contribution from new products. And then you asked about the leverage. I mean, we don't have any leverage ratio from our existing lenders agreement covenant. So that's something that you need to consider. And as I said, we'll do whatever it takes to deliver our current -- our leverage ratio.

Regarding plasma collection capacity, these 26 centers has an average of 20,000 liters. You need to remember that because Biotest didn't have access to the U.S., they have need to open new centers. So most of these centers are in ramp-up. We see, based on our experience with our European plasma procurement organization, we see opportunities to continue to increase the capacity per center. There is also a good match in the geographical situation. So we see this a very good opportunity with -- based on our experience and, of course, their experience.

Okay. Thank you. I think we will need to speed a little bit both questions and answers because I think we have 3 more persons. And so we have Julien. So Julien Dormois, from BNP Paribas. Are you on mute, maybe?

Is that better?

Yes.

Yes, cool. My questions are actually very quick 2, if I may. The first one relates to the degree of self-sufficiency for Biotest in terms of plasma procurement. I'm just curious whether part of the synergies you indicate will come from a lower cost of plasma procurement by reducing the exposure to potentially plasma -- third-party plasma that they might be buying? So that would be the first one. And the second one, I think you indicated that Biotest is already selling IgM with an old formulation. Could you just give us a rough sense of how much sales they generate with that product specifically?

Sorry, sorry, let me answer these questions. Look, today, nowadays, right now, Biotest is still a public company. And I think that we cannot, and we don't have to make any statement, disclose or talk about any figure and inside of Biotest. So sorry, but I think that we cannot answer these questions. Sorry on that. Still public company.

Yes. Maybe on the IgM sales, the concern...

But about plasma, we can talk.

Yes, I mean today, they have a product that is a Pentaglobin, that is polyclonal immunoglobulin. And what they have developed is [indiscernible] is a product that is much more rich in IgM, is practically double. And it's a combination of IgM, IgE and IgG. And the beauty of this product is that -- well, as you know, IgM is the first antibody that acts in case of infection disease. So there have indications like the severe community acquired pneumonia but also in sepsis, bacterial or virus infections. And this is really a very good product. We know we are familiar with the IgM because we have been working on that. But that's the beauty of this product. The combination of the 3 different antibodies instead of one single antibody.

Okay. And maybe if I may, just to be clear, this is just a new formulation of an existing product? Or is it a new indication that you are targeting that product?

Is a new formulation of a product and, of course, with new indications. There is no other product in the market with this indication. So based on the experience with Pentaglobin, so we have all the safety profile already existing. Based on this existing profile, they have developed this new product. And of course, this new product is seeking new indications.

Thank you. We have Guilherme Sampaio from CaixaBank. No, we cannot hear you. Sorry, Guilherme.

Yes?

Yes, now it's perfect.

Okay. Okay. Perfect. So just 2 very quick. The first one, conceptually, how are you thinking about the weight of organic versus inorganic deleveraging, debt reduction process? And the second one, just a confirmation, what would be the economic rights of Biotest attributed to Grifols post both transactions?

Okay. Regarding the deleverage most of the deleverage will be organic through the additional strong cash flow generation as a result of this transaction, plus the GIC investment.

Okay. And we have...

Second.

Sorry?

Just to confirm, 100% of Biotest economic rights are going to be attributed to Grifols?

Sorry, what's the question? What's the second question? Percentage of what?

Just a confirmation, what would be the economic rights of Biotest attributed to Grifols, post both transactions, 100%?

Well, it depends. It depends what is going to happen with a public tender, voluntary public tender. If we assume that we succeed with a public tender, we'll have 100% of voting rights. If we don't succeed with a public tender, we'll have 90% of voting rights and 45% of economic terms.

And if you succeed with a public tender in terms of economic rights, you'll have 100%?

We can have 100% of the company, of course.

Okay. Thank you. Álvaro, are you still there? Yes. Álvaro Lenze from Alantra.

Just very quickly first. Is the deal with Creat subject to the success of the takeover? I mean if you fail on the takeover, you still take the 90% of voting rights and the 45% of economic rights? And secondly, looking at your guidance for 2024 and 2026, the organic growth in terms of EBITDA seems a bit low, in my opinion. It's about EUR 200 million in 3 years from both organic growth from Grifols and Biotest, which is about 4% per year compared to your EUR 1.7 billion starting point, which seems low assuming that the overall growth is above 6%, so -- in terms of revenue so that if you could clarify that organic growth guidance?

Okay. The deal is with Tiancheng. Tiancheng is the holding company that invested. Creat is a minority shareholder of Tiancheng. And the shareholders are a bunch of Chinese funds, even governmental funds. Our deal with them is crystal clear. We are going to buy, and we are going to buy this 90% stake in Biotest, subject to the only condition is clearance on competition law.

90% in voting rights.

In voting rights, okay? So the only CP that we have in this agreement is clearance on Germany, France -- Germany, Austria, Turkey, and Spain, okay? So once we will clear, we will close this transaction.

Regarding your second question, the EUR 500 million, '24, '26 coming from the organic contribution from these 2 companies, mostly due to the size will come from Grifols. And as I said, we are using for this exercise a base case.

Okay. Thank you all. I'm afraid, we'll need to stop it and to leave it here. I can see that nobody has taken my advice of making just one question. So thank you very much for that. No, but in any case, that the IR team is always available. So we'll take any other questions that you may have, and we hope you can take this deal and the information that we will bring forward. Okay. Thank you, and goodbye, everybody.