Grifols Sa Barc Ord New

Hello everyone and thank you for joining us today for Grifols second quarter 2026 earnings call. My name is Daniel Segarra and I serve as a head of investor relations and sustainability. Today I'm joined by Grifols chief executive officer Nat Shabia, president of Biopharma Roland Vandeler and chief financial officer Rahul Srinivasan. As this is Transcription by CastingWords Turning to slide two, I would like to remind everyone that forward-looking statements may be made during this call. This may include, among other things, comments regarding the company's future operating and financial performance, statements about our future expectation, clinical developments, regulatory timelines, and the potential success of our product candidates. These statements are based on current expectation and available information as of the date of this call and are subject to certain risks and uncertainties that may cause actual results to differ materially from those discussed today. Grateful financial statements are prepared in accordance with EU, IFRS and other applicable reporting provisions including alternative performance measures or APMs as defined by the European Securities and Markets Authority. Grifols Management uses APMs to evaluate financial performance as the basis for operational and strategic decision making. These APMs are prepared for all the time periods presented in this document. As announced, the Board of Directors has decided to initiate a process to evaluate a potential IPO of the Grifols U.S. biopharma business. Any such transaction remains subject to legal and regulatory requirements. Thank you Danny and thank you all for joining us today.

The second quarter played out in line with our expectations, allowing us to deliver a solid first half of the year and keeping us firmly on track to deliver our full year 2026 guidance. The progress we've made over the first six months reinforces our confidence as we look to the second half of the year, not because all the work is done, but because the business continues to perform according to plan and the key levers we have put in place are delivering the results we expected. For Grifols, that confidence starts with the strength and resilience of our business model. Our integrated value chain has long been one of the defining characteristics of Grifols. It is a model built over decades with capabilities that are difficult to replicate and that continue to differentiate Grifols. Today, I would like to leave you with three key messages. First, how to think about our first half performance. Second, how to work we have done previously Thank you very much. Revenue for the first half reached 3,574 million euros, up 2.6% at cost and currency, with biopharma being the primary growth engine delivering 5.4% growth. Reflecting the disciplined commercial approach we have been taking across the portfolio. Thank you very much. Adjusted EBITDA reached €472 million in the second quarter, representing a margin of 25.2%, and for the first half, adjusted EBITDA reached €854 million, up 2.4% year-over-year at cost and currency, with a margin close to 24%. Pre-cash flow improved by approximately 100 million euros during the first half, reflecting our continued focus on operational discipline, working capital management and capital allocation. While the second half is seasonally stronger for our business, we are encouraged by the progress already achieved and by the foundations we continue to build. Beyond the financial results, we also continue to strengthen the company operationally. Thank you very much. This demonstrates how we continue to translate decades of innovation into new solutions for our customers. That commitment to building capabilities rather than pursuing short-term opportunities is also reflected in our plasma strategy. Our U.S. collection network remains the foundation of our plasma platform. At the same time, the continued development of our projects in Egypt and Canada is creating a more diversified and resilient sourcing network. Egypt is much more than a new plasma collection project. It is a strategic investment in the future of our business, strengthening our ex-US plasma platform, increasing operational flexibility, and supporting sustainable growth for many years to come. The same discipline approach has also shaped the way we manage our balance sheet, and the refinancing completed during the first half has further strengthened our financial flexibility. Rahul will discuss this in more detail later in the presentation. BioPharma, where the work we have been doing over the recent years is becoming increasingly visible. Grifols holds a leading position in a large and growing biopharma market, and we continue to build on that leadership by advancing our pipeline to address patients' evolving needs. Our IG franchise continues to deliver strong momentum, supported by strong underlying market fundamentals. As we continue to expand the approved indication of our IG portfolio, I would like to highlight our ongoing Phase III clinical trials in secondary immunodeficiencies and CADP. First, our Phase 3 SIGMA study evaluates the efficacy and safety of Gammon XC in combination with the standard of care treatment to prevent infections in patients with secondary antibody deficiency. Together with our Excel study for Shembify, focused on patients with blood cancer who are at increased risk of infections, it reflects our continued investment in expanding the indications of our immunoglobulin portfolio. Another important Phase III study in IG is EXPERT, designed to support the potential expansion of Sembify into the treatment of CIDP, offering the potential to expand treatment options for patients. Beyond IG, our broader protein portfolio is progressing well. Fibrinogen for congenital indication was launched in the U.S. as planned in the second quarter, and we are in the final stage discussions with the FDA to agree on the Phase III trial design for the acquired indications. It will complement our European launches across both congenital and acquired indications. And the pinning of this is our expanding self-sufficiency platform. With our unique presence in the U.S., both Egypt and Canada continue to strengthen our ex-U.S. plasma sourcing through strategic partnerships, allowing us to keep optimizing our collection footprint while maintaining consistently high quality and safety standards across the entire plasma network. Together, our leadership in IG, a broadening protein portfolio and an increasingly self-sufficient sourcing base provide a strong foundation for continued sustainable growth. Having said that, Grifos has always been more than biopharma alone. And another important source of differentiation, and one that continues to create value for the group, is diagnostic. I would like to comment on the progress within Diagnostics. It remains a leading, profitable and cash-generated business, built on long-standing customer relations, high barriers to entry, and mission-critical solutions embedded in our customers' daily workflows. This business continues to be a complementary pillar to our biopharma franchise, providing meaningful contributions to our overall margin profile and cash conversions. We continue to make progress across our innovation roadmap. The clearest milestone this quarter was the successful launch of Avanzas IH, an important step in advancing our next-generation blood-typing portfolio. This platform delivers meaningfully improved performance in a smaller, modular design with a simplified workflow and reduced footprint for customers. And we expect it to be a key driver in sustaining our leadership in this market segment. Alongside this, Grifols is advancing the development of its automated solutions to help laboratories simplify workflows and enhance operational efficiency. And this includes our ISAR immunoassay platform and our Mondaka molecular platform, both of which continue to progress as planned. ISAR, in particular, positioned us to directly target the approximately $1 billion serology market end. And over time, to expand into a much larger clinical immunoassay space. Our next generation NAT platform, Mundaka, reinforces our leadership in blood screening while strengthening our molecular diagnostics offering. This innovation roadmap further diversifies our diagnostic revenue base, extends our reach into higher growth adjacent segments, and reinforces our strategy to build a presence across the clinical diagnostics market. Together with our ability to operate independently across these platforms, it enables us to capture more value across the diagnostic value chain. while further strengthening our leadership position. Moving to slide eight, let me highlight the key levers that support our confidence and continue to deliver improvement through the second half. First, continued growth in biopharma, driven by sustained IG momentum, continued product mix improvement, and respected stabilization of albumin in China. Second, the continued ramp up of plasma from Egypt, while enabling optimization of our U.S. collection. Third, continued progress at biotests, with improving manufacturing performance and a stronger operational execution. Fourth, further operating leverage, supported by our ongoing discipline cost management across the group. And finally, continued improvement in free cash flow generation, reflected by effective working capital management, capital allocation, and continued financial discipline. The priorities we set at the beginning of the year remain unchanged. The levers supporting our guidance are already in motion and progressing as expected. And we remain laser focused on delivering our commitments for 2026 while continuing to strengthen Grifols for the long term. Before I hand over to Roland, I would like to take a moment to recognize his contribution to Grifols. As you are aware, Roland has decided to return home to Basel in Switzerland to lead a biotechnology company. We appreciate his leadership, his strong contribution, and his partnership, and we wish him every success in his new role. We have a strong transition plan in place, supported by a highly experienced leadership team, ensuring continuity, discipline execution, and sustained progress against our strategic objectives. Thank you, Roland, and all the best.

Thank you, Nacho, for your kind words. It has been a privilege to contribute to Grifo's success over the last several years, and to work alongside so many talented colleagues. I am incredibly proud of the dedication, passion and commitment our teams show every day to serve patients that are counting on our medicines and advance the strategic priorities we have set for the business. Moving to slide 10, the biopharma business performed in line with our expectations in the first half, delivering 5.4% revenue growth at constant currency and reflecting the more balanced growth profile we anticipated entering the year. Growth was driven by our IG franchise, more than offsetting temporary headwinds in albumin. Importantly, Alpha-1 and specialty proteins returned to growth in the second quarter, resulting in a broader base performance across the portfolio and reinforcing our confidence in the full-year outlook. Let me now comment on each franchise in more detail, starting with IG. Immunoglobulins remained our clear growth engine, delivering 12.8% growth at constant currency in the first half. Thank you very much. Thank you very much. Looking ahead, we expect underlying demand growth for IgE to continue across our three main indications. In primary immunodeficiency, increased awareness and better diagnosis are expanding access to therapy. In secondary immunodeficiency, demand continues to rise in an aging population and with an increase in immune compromised patients. And in CIDP, we also continue to see growth. Immunoglobulins, with their broad mechanism of action, remain the established first-line standard of care in this complex multifactorial disease. This is supported by extensive clinical experience, their broad immune-modulatory activity, and a compelling value proposition. Recent market developments continue to reinforce the importance of maintaining effective therapy options for CIDP patients and support our confidence in the growth outlook for CIDP. Following our strong first half, we expect IG in the second half to continue to grow mid to high single digit in the US and our European core countries, in line with the market, partly offset by deliberate lower growth in other markets. For Xambify, our SCIG, we see strong momentum and expect continued strong double digit growth. Turning to Albumin, the underlying market dynamics in China remain broadly unchanged from what we have been discussing in prior calls. As anticipated, first half 26 reflects the year-on-year pricing impact in China, following our mid-25 price adjustment, with Q2 facing a particularly challenging comparison due to the post-license renewal catch-up we saw in the Q2 the prior year. Our focus here remains on executing the actions we outlined, leveraging our strategic partnership with Shanghai Ross to expand our commercial reach in China, while continuing to grow the business in the US and other international markets. Looking forward, we remain cautiously optimistic that market conditions continue to stabilize, supported by an easier comparison in our second half of the year as we lap the pricing adjustment implemented in the middle of last year. Together with the increasing weight of Egyptian Plasma in our collection, which comes with high local albumin use and excess IG, we believe that Griffles is well positioned to balance albumin with IG growth over time. On Alpha-1 and specialty proteins, sales returned to growth in the second quarter, up 2% at constant currency. For Alpha-1, we saw higher treatment numbers in Q2 as patient access continued to improve following a challenging U.S. reauthorization period earlier in the year. We continued to appropriately support healthcare professionals throughout that process for their patients and were encouraged by the sequential improvement we saw during the quarter. Demand for hyperab also remained strong as we entered a seasonally important summer period in rabies. And in June, our U.S. team launched Veselti, our new fibrinogen concentrate for patients with congenital fibrinogen deficiency in the U.S., adding to our specialty proteins. Together, the momentum we see in Alpha-1 and specialty proteins reinforces our confidence that this franchise will deliver growth for the full year, as we outlined at the beginning of 26. Turning to slide 11, I would like to spend a moment on Alpha 1. In this indication, where 85% of patients remain undiagnosed and without treatment, clinical innovation remains central to our strategy, all with the objective to continue to expand the market while further strengthening our leadership in a franchise where we are the global leader. Our SPARTA study has the potential to significantly strengthen the evidence base for augmentation therapy, and thus support broader testing and diagnosis as well as improve patient access globally. SPARTA is the most comprehensive outcome study ever conducted in Alpha 1 and the first phase 3 trial designed to assess preservation of lung density by CT over a three-year period. Importantly, the study evaluates both the current standard dose and the higher dose regimen against placebo. Positive results not only have the potential to significantly strengthen the clinical evidence supporting augmentation therapy Thank you very much. Thank you very much. Thank you very much. As we continue to expand the long-term opportunity for our business through innovation, we are also evolving our operating model to capture that opportunity more effectively and translate it into sustainable growth and value creation. To accelerate the execution of our strategic roadmap, we are reorganizing Biopharma into two dedicated units, Biopharma US and Biopharma Rest of World, each built around its own self-sufficient operating model with dedicated leadership and clear accountability for its respective market. Biopharma US remains our scaled, fully vertically integrated, end-to-end platform with two manufacturing sites and around 280 donor centers. It is set up to serve the largest, most established plasma-derived therapies market in the world, where demand is expected to grow at a continued mid-to-high single-digit rate annually. Supported by our existing platform, we are well invested to support that growth and can continue to sharpen our focus on operational efficiency and portfolio expansion. BioPharma Rest of World is a distinct, increasingly self-sufficient growth platform with more than 130 donor centers and 5 manufacturing sites. Its priority is optimizing plasma allocation, increasingly supplying Europe and the rest of the markets from ex-US sources, reducing reliance on US plasma, and better aligning sourcing costs with pricing structures to optimize growth and profitability. Egypt and Canada are central to building that self-sufficiency, strengthening supply resilience and operational efficiency while increasing patient access to our therapies. Organizing on these two platforms gives each business the focus, accountability, and operating flexibility to execute within its respective market dynamics. At the same time, bringing decision-making closer to each business allows us to accelerate execution while continuing to build what we believe is the industry's most resilient and highest value plasma platform. Let me close by illustrating on slide 13 how Egypt enables the next phase of our global plasma sourcing strategy and the creation of a truly self-sufficient rest-of-world platform. As we explained during our Q1 call, the long-term vision behind our global plasma sourcing strategy is to increasingly supply Europe with plasma from Europe and Egypt, allowing more of our US collections to reign in the US. Beyond the economics, this diversification reduces our exposure to any single geography at a time when the geopolitical environment increasingly rewards local self-sufficiency. By 2029, we expect total ex-US plasma collections to increase by around two and a half times, providing sufficient supply to fully support our European and rest of world demand. That compares with today, where roughly 25% of US plasma collections are still needed to support sales outside the US. As that dependency unwinds, we progressively shift to a US plasma collections for US model, unlocking significant plasma supply and optimization opportunities for our US platform to support the expected strong and growing demand in the US. Egypt is the primary driver of this shift. This year, Egypt already represents around 25% of our ex-US plasma collections, and by 2029, we expect their contribution to grow to around 50%, making Egypt our single largest ex-US source of plasma and a globally recognized plasma hub under what we call the Griffith Seal of Quality and Excellence. The benefit goes well beyond supply security, as Egypt becomes an increasingly meaningful part of our plasma network, Thank you, Roland.

Slide 15. Our financial highlights for Q2 and H126. We are pleased with our Q2 and first half performance, results that reflect the resilience and strength of this business and the tireless efforts of our teammates across the entire group for which we are very thankful. Group net revenues reached 1.874 billion euros in the second quarter, bringing first-half revenues to 3.574 billion euros, a growth of 2.6% at constant currency. As in Q1, Biopharma again grew faster than the group as a whole, up 5.4% at constant currency. This also reflects the strategic repositioning that is underway in diagnostics, and I will elaborate on it further in the following slide. Transcription by CastingWords Thank you very much. Group profit in H1 increased to $227 million, up 28.7% year-on-year. And if we eliminated the impact of both positive and negative one-offs, the year-on-year comparison is still a strong double-digit improvement. We achieved 91 million in free cash flow before M&A for the first half of 2026, 103 million year-on-year improvement. I will elaborate on this free cash flow performance on a subsequent slide. Total net leverage stood at slightly below 4.2 times and net secured leverage at 2.7 times. The mismatch between a higher average euro-dollar for the period versus lower end-of-period FX rate used for the balance sheet translation creates notional re-leveraging, but over a longer period of time that should dissipate, consistent with our prior guidance that structural movements in euro-dollar have a broadly neutral impact on leverage over time. So leverage remains stable, notwithstanding the effects related to re-leveraging in Q2, and we have $2 billion of liquidity. So our balance sheet overall is in a relatively strong position. On slide 16, we summarized the net revenue performance of the business in the first half. Biopharma remains both the bedrock as well as the growth engine of the group and continues to benefit from strong momentum across our core markets. Immunoglobulins once again delivered a double-digit growth with sub-QIG returning to strong double-digit growth during the quarter and for H1, confirming that the softer first quarter performance reflected timing rather than any change in underlying demand. Alfa 1 in our specialty protein portfolio also performed well and continues to support our growth expectations for the full year. Due to the timing of the price concession for albumin in China in H2 last year, relative albumin H1 performance has been impacted. We expect the H2 albumin performance to be in line with H2 last year. At Biotest, we are encouraged by the operational turnaround progress, and we are beginning to see that also come through in the Biotest growth rate with Yamugo sales ramping up. Turning to diagnostics, the year-on-year comparison reflects the dissolution of the Quidel Auto joint business. However, the rest of the diagnostics business continues to post year-on-year growth. and the team is executing on the diagnostics repositioning plan hitting all relevant milestones. For buyer supplies, we expect a better H2 than H1 and more broadly we remain comfortable with the outlook for this niche business in the medium term. Within others, we have phased out a legacy contract manufacturing agreement at the end of 2025 impacting the comparison in 2026. In short, the Griffles Group portfolio continues to perform in line with our expectations for the year with the momentum of the biopharma business more than offsetting the planned strategic transition we're executing in diagnostics and softness in biosupplies and others. Slide 17 The headline numbers, the 2.4% constant currency growth in group-adjusted EBITDA, the 10 basis points improvement in adjusted EBITDA margin, and biopharma-adjusted EBITDA grown by over 5% on a constant currency basis, all mask the underlying drivers of that outcome. I will spend some time unpicking this for you as I think the underlying drivers matter more than the headline outcome in H1. All of which support our adjusted EBITDA margin target of 25% or higher for the full year 2026. Starting with Biopharma, EBITDA growth and margin progression is supported by four structural factors. First, immunoglobulins remain the largest contributor to both revenue and profitability, benefiting from continued momentum and an increasingly favorable product and geomix. Executing our plans in albumin and alpha-1 and other proteins, as Roland alluded to, will support profitability. Second, the efforts to support BioTest is yielding improvements operationally and making a growing contribution to group sales and we expect to continue to support the Imogo ramp-up in the coming quarters. Thank you very much. and with the continued biopharma momentum that we expect, these benefits should be further amplified over time by operating leverage across the business. While the 40 million of one-off costs, of which 25 million are non-cash, resulting from the closure of 29 U.S. donor centers, affect this year's reported EBITDA, they support a structurally more efficient operating model going forward. and fourth, disciplined cost management as evidenced by our OPEX evolution remains an important contributor. Also to round out the picture, the full year effect of the albumen pricing concession in China introduced in mid last year has been a headwind in H126 and is now fully reflected in our comparable base, aiding future year-on-year comparisons of quarterly performance. These drivers give us confidence that the biopharma business is well positioned to continue delivering compelling EBITDA growth and margin progression over time. Thank you very much. Thank you for watching. On slide 18, the punchline is that we continue to progress our free cash flow generation efforts in a disciplined manner and we remain on track to deliver our full year free cash flow guidance. In the first half, free cash flow pre-M&A was positive 91 million euros, 103 million better than H1 2025, having benefited from some phasing. Thank you very much. CapEx levels are normalizing from the 2024-2025 peak, and as disclosed in Q1, we were required to classify the final Immunotech payment made to JP Morgan within financing activities following guidance from our auditors. Capitalize IT R&D is slightly higher as we successfully achieve various development milestones, for example, within our diagnostics business. And finally, we balanced the refinancing of some of our cheapest debt in our capital structure earlier this year by proactively redeeming $500 million of our most expensive debt, the 7.5% 2030 bonds. And thereby, we expect to keep our cash interest cost levels in line with 2025. In conclusion, our free cash flow trajectory is progressing as planned, aligned with the typical seasonal patterns of the business, and we remain on track to deliver our full year guidance. Finally, turning to slide 19. I will repeat myself when I say that our balance sheet is in a really good place. No meaningful maturities for a while. Almost all the debt in the capital structure is either callable or can be repaid at par, allowing the company to optimize its cash interest cost effectively. Thank you very much. Thank you, Rahul.

I would like to conclude today's presentation with a few final remarks. Our first half performance reinforces our confidence that we are on track to deliver our 2026 objectives. The sustained strength of our immunoglobulin franchise continues to underpin our growth. While we expect albumin performance in China to stabilize in the second half, supporting a more balanced contribution across our protein portfolio. At the same time, our expanding Alpha 1 clinical pipeline continues to strengthen that franchise and reinforces our long-term growth opportunities. BioTest also continues to make progress in its turnaround, contributing to stronger performance at BioPharma. We also currently continue to make meaningful progress on our key strategic priorities. Egypt and our broader self-sufficiency platform remain a key differentiator and value drivers. Structurally improving our cost structure and progressively reducing our reliance on US plasma. Together, this initiative supports the top-line growth and margin expansion that remains a key priority for 2026 and onwards. Across our business, we continue to strengthen the foundations for long-term growth through innovation, discipline and consistent execution, with multiple key milestones across biopharma and diagnostics. These efforts continue to enhance the resilience of our business and position Grifols to capture attractive growth opportunities in the years ahead. As Rahul outlined, We have also continued to strengthen our financial profile, delivering further EBITDA growth, meaningful free cash flow improvement, and the successful completion of our refinancing, positioning us well to continue reducing leverage over time. Collectively, these actions are building a stronger, more efficient, more disciplined, and increasingly cash-generative company, reinforcing our confidence in delivering our full-year guidance while creating long-term value. As we move forward, our focus remains clear. Delivering our commitments, further strengthening our financial profile, and unlocking the full value of Grifols for all our stakeholders. As always, I'd like to finish by thanking our employees, donors, customers, partners, and shareholders for their continued trust and support. We look forward to updating you on our progress next quarter. And with that, I'll return it back to you, Danny.

Thank you. Now let's turn to the Q&A session. Please remember to press star 5 to ask a question. We need to place a limit of two questions per analyst. If you have follow-ups, please dial star 5 again to get back on the list. Our first question today is coming from Charles Spiedman from Barclays. Charles, please go ahead.

Hi, guys. Charles Benjamin King from Barclays. Thanks so much for taking my questions. And congrats, Roland, on the next role. Thanks for all your help over the past few years. Maybe two questions from me, please, starting with Roland. With CIDP, you mentioned recent market developments reinforce the importance for maintaining effective therapy options for CIDP patients. I was wondering... Could you elaborate on this? And when you say IG remains the preferred first-line treatment, can you just provide any detail around whether that preferred market share you're seeing is declining at all in the face of competition or whether new entrants are just growing the market and therefore that's why you remain confident in the continued growth you referenced? And then secondly for Rahul, with respect to Egypt and thinking about the margin development and lead times of plasma that are usually on a lag, can you just remind us when we are expecting to see the benefit of Egypt's plasma coming through our margins and also when we expect to see the benefit of the US centre closure announced over the quarter? Thank you.

Thank you for your wishes and happy to comment on CIDP. With about two years into the launch of FCRNs, we see that there's more and more real-life experience out there. Thank you very much. Thank you very much. Thank you very much. Thank you. Thank you very much.

And on your second question, Charles, Egypt, we're beginning to see some of the impact of Egypt come through in our numbers. Obviously, that ramps up as the year progresses, and you will see the full impact of the 1 million certainly as you go into 2027. Thank you, Rahul. Thank you, Charles. Now is the time for Joaquin from GB Capital. Joaquin, please.

Yes, thank you for taking my questions.

The first one is regarding the album in China. You mentioned that prices have stabilized, but I remember that in the first quarter you said that the number of patients was increasing. Has that remained the same during the second quarter? And then earlier in the year you pointed towards Did you find another way to balance album and IG? If you can talk a little bit about that, thank you.

Well, Joaquin, thank you. On albumin in China, what we focus on in this market, of course, is end-user prescription and demand. And this is where we commented that we see signals of stabilization, both in terms of price with our customers as well as prescriptions and pull-through. In this market, we saw that in Q1. We continue to see this at the moment. Having said that, it's a market that, you know, had an impact of the government measures, as you know. We have this reflected in our price adjustment mid last year, but since then have experienced ourselves a stabilisation and a cautiously optimistic that we can build from there. And on IG, I can just perhaps clearly just clarify that for IG we have a two-fold strategy. Rahul, if you want to.

Nothing further to add. I think it captures it well as well on page 10, Joaquim, in terms of our outlook for H226, where we're guiding to meet the high single-digit growth in core markets. Could we grow IG more? Sure. But I think it's a deliberate strategy to optimize the mix between growth and margin improvement, and that remains our focus.

And just to add here that, I mean, at the end, this, what we try to do is a smart growth strategy, really focusing the customers, the regions, and the products that will provide the better margin position. That's what Shambify, you see that it will continue growing and continue to grow very strong because we are building our position in the market. We're in IVIG position. Thank you, Joaquin.

Now it's turn of Guilherme Sampaio from CaixaBank. Guilherme, please.

Yes, good morning. Thank you for taking my questions and thank you Roland for this. So, first question on free cash flow. You've reached the year-new improvement in free cash flow implied in the top end of your guidance already in H1. Is there any factor that we should take into consideration that's preventing you from raising the free cash flow guidance at this stage? and the 25 million quid de l'or compensation due to the GV termination. I think it was scheduled to be paid this quarter, just if you can confirm that it was paid or not and if it was accrued in a certain way. And you mentioned some phasing, if you can quantify the phasing around the forecast for this quarter. The second question is regarding the execution risk. So there's been a market of rumors that you might have certain execution risks in the ramp-up of your donor centers in Egypt. What kind of comfort or color could you provide regarding this? Thank you.

Why don't I take the first one and I'll start with the second one as well. And if either Roland or Nacho want to add, they can do so. On the first one, gear me around free cash flow. I did reference phasing deliberately so that you don't just take 103 million and add it to the 467 million we delivered last year and say, hey, we're at 570. There are phasing aspects of it. You've mentioned some of it. Quidel is also an aspect that is reflected in there. And we remain very much in the guidance of the 500 to 575 pre-cash flow pre-M&A for the full year. Thank you very much. and this is only the first wave of donor center opening so things are going there very going very well and we don't anticipate any execution risks with that ramp up we'll have to obviously optimize it so which is why we say 1 million in 2026 ramping up to up to 3 million by 2029 I'll leave it at that

Just to add, I don't know what rumors you refer. We haven't heard any rumors. I actually think the execution in Egypt is working very well. We are very much on plan and on track to build the 20 donor centers that we wanted to build. As Rahul said, those donor centers are packed. Thank you very much.

Rahul and thank you Nacho. Now let's move to Morgan Stanley. Chivo, please.

Yes, thank you. Rahul, maybe just a clarification. I think I heard you say that the albumin outlook for H2 would be in line with H2 last year. Just if you could confirm this and if you meant in absolute terms or in terms of decline rates basically versus H2 last year. That's the first question. And also on albumin, if you could give us any idea of the growth ex-China of the albumin franchise, if you're seeing some growth in H1, you know, just so we sort of better forecast when we sort of get out of the China base effect. And then second question on biotest. So turnaround of biotest has been definitely a driver of margin for the business. How far are you on the story of turning around this business? Can it continue to be a driver for margin in the next few years or are you mostly through the improvement here? Thank you.

Let me start with what I said on albumin, where what I was referencing was the absolute level for H2 rather than the growth rate. So please don't reflect any draconian scenarios. The absolute level, because remember, the price concession was provided in mid last year. So that's why the absolute level is the right benchmark. Just in terms of GrowthX China, I'll let Roland pick that up in a second. Let me answer your question on Biotest in the meantime. On Biotest, the operational turnaround is commencing now. We have a lot of runway. On this topic, and we expect to make considerable progress in the coming quarters, and certainly it's a key part of the value driver going out through to 2029. But on the albumin ex China, Roland, do you want to pick that up?

I would differentiate there the U.S., where we see high interest in our albumin in bags, where we're one of only two providers that offers that, and where we're actively working to increase our supply for this differentiated presentation. And in the other markets, ex-China, ex-U.S., yes, in the first half we've seen good growth. We're not disclosing the detailed growth number, but we've seen good growth in the first half of this year. And just to perhaps provide context there, as you may recall, in the past we have been prioritizing China and we discussed that we have opportunities in these other markets. The team has been executing against that and I think that's behind the growth that we see.

Thank you so much, Roland. Let's move to the next question. Jaime Scribano from Santander. Jaime, please, go ahead.

Hi, good afternoon. Thank you. Yeah, first of all, Thank you and good luck to Roland. My first question would be on diagnostics. So on diagnostics, after breaking the JV with Ortho, just thinking out loud, so can you elaborate a little bit on what opportunities, new opportunities come in terms of selling the reagents to other customers and so on? From 2027 onwards, I mean. And the second question would be regarding net finances, which in Q2 look quite low. I don't know if you have answered that, Rahul, but just if you can elaborate a little bit further. Thank you.

Thank you Jaime and let me explain about the diagnostic question. I mean essentially the collaboration with Quidel Orzo has been a very good collaboration for Grifols and Quidel Orzo over many years but this was coming to an end for a number of reasons but specifically to your question about what this will provide I think probably the most important benefit of this termination is actually The fact that it will open the possibilities for us that once the ISAR platform of immune assays will be ready, we will be able to access that market without restrictions. This is a $1 billion market opportunity. It's a very significant opportunity. Of course there is some opportunities in the factory that was serving those reagents. We will continue looking for customers and even providing Quidel Orzo with some supply. We have some supply agreements with them. But the largest opportunity that we will unveil is certainly the access to the immunoassays market once the ISAR platform will be ready around 2030-2031. And for the second one, Rahul.

Net financials, Jaime, that's the impact of IFRS 9 as a result of the refinancing we did earlier this year. And that's one of the reasons why I've spent a lot more time focusing on cash interest costs. Cash is cash, and you're not exposed to the vagaries of accounting treatment. So IFRS 9 requires us to do a present value calculation as a result of the refinancing. Juan Ros from Oro. Juan, please, go ahead.

Good afternoon. Thank you for taking my questions. First of all, earlier this year, CSL reduced its guidance, 2026 guidance for IG in the U.S. by around $300 million. They were saying they were signing excess channel inventory. So could you please reconcile this with your current IG growth in the U.S. market? Maybe you're experiencing different dynamics or you're gaining market share. Is it a matter of price? Maybe you can illustrate us in that sense, please. And second, regarding the gross margin, your adjusted gross margin fell 90 pips yesterday. So maybe you could provide us some more color on the moving parts. What's China albuming? What's IG Mix? What's pricing? What's CPL? FX? Maybe you can help us a little bit with that. Thank you.

Thank you, Juan. First of all, we don't comment on our competitors' messages in the market. So they obviously explain their story as they wish. We can comment only about what we see and what we see in the U.S. market and not only in the U.S. but in the rest of the world. is a continue strong demand of immunoglobulins. I think that the high single digit demand is there for IV and in our case, obviously, the subcutaneous formulation is growing very fast because we started late and we are very quickly gaining market share. But our positive view is based on what we see and based on that is what is driving our results as well. And I don't know, Roland, you want to complement this?

Just to emphasize that the results that you see that we presented today for the U.S. are all fully demand-driven. So these are patients receiving medicines and looking at wholesale inventory levels that were roughly stable around this period in the first half of the year. So all demand-driven, as Nacho says.

Juan, I think your question relates to gross. I think you're making reference to, on page 15, the 38.6 adjusted, and I think you're comparing it to the 39.1% in H125. Have I got your question right? Correct. Correct. I think, as you said, there are a number of constituent parts. I'm not going to break out the various constituent parts, but let me walk you through some of those constituent parts. I talked about price and geomix being supportive. I talked about plasma costs being supportive from a CPL standpoint. We have the beginning of Egypt ramp up coming through. Those are all supportive from an adjusted gross margin standpoint. The negatives, we talked about the restructuring, as you identified as well, the restructuring of the plasma centers. That's a significant number, right? That's 40 million, of which 25 million is non-cash. And then we also talked about buy supplies and others being lagging. Thank you very much. Included the 38.6 to help make the comparison better. Also remember, H1 last year, we didn't have the impact of the albumen price. That only came through, the albumen price concession only came through in mid last year. So that's one of the key drivers impacting comparability between H126 and H125. So hopefully that is comprehensive in our response.

As we are close to the hour, let's take the very last question from Charlie, Bank of America. Charlie, please.

Hi, Charlie here at Bank of America. Thanks for taking the question. It's on the SPARTA Alpha 1 trial with data end of the year. Could you frame your confidence in the outcome trial given the data you've seen to date and any expectations for the 120 mg or the 60 mg dose? and if you do see a dose response do you expect to see any patient shift to the higher dose and how much upside could that offer and then second question on that is if you do see a dose response do you see a risk that you effectively validate the competitor thesis for its regulatory pathway that higher trough AOT levels correlates to better clinical outcomes and how do you assess that thank you

Charlie, happy to speak about Sparta. As mentioned, we have the last patient, last visit in August. Obviously, right now, all the data is blinded, so we haven't seen the data. After that patient, last visit, we'll have the database locked, the cleaning of data. and as soon as we have the data available and the analysis done, of course, that's where we publish our top line data. We all look forward to it. What we do know is that the Sparta study was designed with all the insights of prior studies and specifically The treatment window was extended from two years in prior studies to three years to give enough time for the preservation of lung tissue to actually come through. So we're obviously very confident in the thesis that made SPARTA possible and in the way that the team executed. And we know that opinion leaders are very much looking forward to seeing this study. Thank you very much. Thank you very much. Physicians are very much looking forward to looking at this data, and once we have the data, we'll be able to comment more in response to that.

I think the second question was just around competitive validation. I think outcomes data versus augmentation levels. Thank you very much.

Thank you so much. That was the last question for today. Thank you for joining us today and especially for your time during this busy reporting week. We look forward to speaking with you again next quarter. Thank you so much.