Grifols SA [GRFS] Filings

Grifols SA [GRFS] Filings

Grifols SA [GIFLF] Filings

Grifols SA [GIFOF] Filings

Grifols SA [GIKLY] Filings

20-F 1 grfs-20221231x20f.htm FORM 20-F

Table of Contents

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

◻ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

⌧ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2022

◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

◻ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report . . . . . . . . . . . . . . . . . . .

Commission file number 001-35193

GRIFOLS, S.A.

(Exact name of Registrant as specified in its charter)

Kingdom of Spain

(Jurisdiction of incorporation)

Avinguda de la Generalitat, 152-158

Parc de Negocis Can Sant Joan

Sant Cugat del Vallès 08174

Barcelona, Spain

(Address of principal executive offices)

David Ian Bell

General Counsel

Telephone: +34 93 571 02 21

Email: david.bell@grifols.com

Grifols Shared Services North America, Inc.

2410 Lillyvale Ave

Los Angeles, CA 90032-3514

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered, pursuant to Section 12(b) of the Act.



Title of each class	Name of each exchange on which registered	Trading Symbol
American Depositary Shares evidenced by American Depositary Receipts, each American Depositary Share representing one Class B non-voting share of Grifols, S.A.	The NASDAQ Stock Market LLC	GRFS

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None.

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None.

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital stock or common stock as of the close of the period covered by the annual report.

426,129,798 Class A Shares

261,425,110 Class B Shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

⌧ Yes ◻ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

◻ Yes ⌧ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

⌧ Yes ◻ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

⌧ Yes ◻ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ⌧

Accelerated filer ◻

Non-accelerated filer ◻

Emerging growth company ◻

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ◻

†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

⌧ Yes ◻ No

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ◻

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ◻

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ◻

International Financial Reporting Standards as issued
by the International Accounting Standards Board ⌧

Other ◻

If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow.

◻ Item 17 ◻ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

◻ Yes ⌧ No

Table of Contents

GRIFOLS, S.A.

TABLE OF CONTENTS


TABLE OF CONTENTS		i
GENERAL INFORMATION		iii
PRESENTATION OF FINANCIAL AND OTHER INFORMATION		iii
PRESENTATION OF MARKET INFORMATION		iv
PART I		1
Item 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	1
A.	Directors and Senior Management	1
B.	Advisers	1
C.	Auditors.	1
Item 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	1
A.	Offer Statistics	1
B.	Method and Expected Timetable	1
Item 3.	KEY INFORMATION	1
A.	[Reserved]	1
B.	Capitalization and Indebtedness	1
C.	Reasons for the Offer and Use of Proceeds	1
D.	Risk Factors	1
Item 4.	INFORMATION ON THE COMPANY	35
A.	History of and Development of the Company	35
B.	Business Overview	37
C.	Organizational Structure	64
D.	Property, Plant and Equipment	65
E.	Regulatory Matters	67
Item 4.A.	UNRESOLVED STAFF COMMENTS	81
Item 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	81
A.	Operating Results	82
B.	Liquidity and Capital Resources	94
C.	Research and Development, Patents and Licenses	107
D.	Trend Information	107
E.	Critical Accounting Estimates	108
Item 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	109
A.	Directors and Senior Management	109
B.	Compensation	116
C.	Board Practices	119
D.	Employees	126
E.	Share Ownership	127
F.	Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation.	127
Item 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	127
A.	Major Shareholders	127
B.	Related Party Transactions	129
C.	Interests of Experts and Counsel	130
Item 8.	FINANCIAL INFORMATION	130
A.	Consolidated Statements and Other Financial Information	130
B.	Significant Changes	133
Item 9.	THE OFFER AND LISTING	133
A.	Offer and Listing Details	133
B.	Plan of Distribution	133
C.	Market	133

Table of Contents

D.	Selling Shareholders	138
E.	Dilution	138
F.	Expense of the Issue	138
Item 10.	ADDITIONAL INFORMATION	138
A.	Share Capital	138
B.	Memorandum and Articles of Association	138
C.	Material Contracts	149
D.	Exchange Controls	149
E.	Taxation	150
F.	Dividends and Paying Agents	158
G.	Statement by Experts	158
H.	Documents on Display	158
I.	Subsidiary Information	159
J.	Annual Report to Security Holders	159
Item 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	159
Item 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	160
A.	Debt Securities	160
B.	Warrants and Rights	160
C.	Other Securities	160
D.	American Depositary Shares	160
GLOSSARY OF TERMS		162
PART II		168
Item 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	168
Item 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	168
Item 15.	CONTROLS AND PROCEDURES	168
A.	Evaluation of Disclosure Controls and Procedures	168
B.	Management’s Report on Internal Control over Financial Reporting	168
C.	Attestation Report of the Registered Public Accounting Firm	169
D.	Changes in Internal Control over Financial Reporting	169
Item 16.	[RESERVED]	169
Item 16.A	AUDIT COMMITTEE FINANCIAL EXPERT	169
Item 16.B	CODE OF ETHICS	169
Item 16.C	PRINCIPAL ACCOUNTANT FEES AND SERVICES	170
Item 16.D	EXEMPTION FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	170
Item 16.E	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	170
Item 16.F	CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT	171
Item 16.G	CORPORATE GOVERNANCE	171
Item 16.H	MINE SAFETY DISCLOSURE	175
Item 16.I	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	175
PART III		176
Item 17.	FINANCIAL STATEMENTS	176
Item 18.	FINANCIAL STATEMENTS	176
Item 19.	EXHIBITS	176
SIGNATURES		179

Table of Contents

GENERAL INFORMATION

As used in this annual report on Form 20-F, unless the context otherwise requires or as is otherwise indicated:

all references to “Grifols,” the “Company,” “we,” “us” and “our” refer to Grifols, S.A., a company (sociedad anónima) organized under the laws of Spain, and our consolidated subsidiaries;

all references to the “Group” or the “Grifols Group” are to Grifols, S.A. and the group of companies owned or controlled by Grifols, S.A; and

see “Glossary of Terms” for further explanations and/or definitions of terms referenced in this Form 20-F.

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

The basis of presentation of financial information of Grifols in this document is in conformity with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB, and other legislative provisions containing the applicable legislation governing our financial information, unless indicated otherwise.

All references in this annual report on Form 20-F to (i) “euro,” “€” or “EUR” are to the common currency of the European Union and (ii) “U.S. dollar,” “$” or “USD” are to the currency of the United States.

The functional and presentation currency of Grifols is the euro. All tabular disclosures are presented in thousands of euros except share and per share amounts, percentages and as otherwise indicated. Certain monetary amounts and other figures included in this annual report on Form 20-F have been subject to rounding adjustments. Accordingly, any discrepancies in any tables between the totals and the sums of amounts listed are due to rounding.

Constant Currency

Net revenue variance in constant currency is determined by comparing adjusted current period figures, calculated using prior period monthly average exchange rates, to the prior period net revenue. The resulting percentage variance in constant currency is considered to be a non-IFRS-IASB financial measure. Net revenue variance in constant currency calculates net revenue variance without the impact of foreign exchange fluctuations. We believe that constant currency variance is an important measure of our operations because it neutralizes foreign exchange impact and illustrates the underlying change from one year to the next. We believe that this presentation provides a useful period-over-period comparison as changes due solely to exchange rate fluctuations are eliminated. Net revenue variance in constant currency, as defined and presented by us, may not be comparable to similar measures reported by other companies. Net revenue variance in constant currency has limitations, particularly because the currency effects that are eliminated constitute a significant element of our net revenue and could impact our performance significantly. We do not evaluate our results and performance without considering variances in constant currency on the one hand and changes prepared in accordance with IFRS-IASB on the other. We caution you to follow a similar approach by considering data regarding constant currency period-over-period revenue variance only in addition to, and not as a substitute for or superior to, other measures of financial performance prepared in accordance with IFRS-IASB. We present the fluctuation derived from IFRS-IASB net revenue next to the fluctuation derived from non IFRS-IASB net revenue.

See below for a reconciliation of reported net revenues to net revenues in constant currency:


	Year Ended December 31,				Year Ended December 31,
	2022	2021	% var		2021	2020	% var

	(in millions of euros)				(in millions of euros)
Net Revenue	6,064.0	4,933.1	22.9	%	4,933.1	5,340.0	7.6	%
Variation due to exchange rate effects	519.2				208.5	68.0
Constant Currency Net Revenue	5,544.8	4,933.1	12.4	%	5,141.6	5,340.0	3.7	%

iii

Table of Contents

PRESENTATION OF MARKET INFORMATION

Market information (including market share, market position and industry data for our operating activities and those of our subsidiaries or of companies acquired by us) or other statements presented in this annual report on Form 20-F regarding our position (or that of companies acquired by us) relative to our competitors largely reflect the best estimates of our management. These estimates are based upon information obtained from customers, trade or business organizations and associations, other contacts within the industries in which we operate and, in some cases, upon published statistical data or information from independent third parties. Except as otherwise stated, our market share data, as well as our management’s assessment of our comparative competitive position, has been derived by comparing our sales figures for the relevant period to our management’s estimates of our competitors’ sales figures for such period, as well as upon published statistical data, information taken from filings with the Securities and Exchange Commission and information from independent third parties, and, in particular, the reports published and the information made available by, among others, the Marketing Research Bureau, or the MRB. You should not rely on the market share and other market information presented herein as precise measures of market share or of other actual conditions.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This annual report contains statements that constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words such as “may,” “anticipate,” “believe,” “estimate,” “predict,” “expect,” “intend,” “forecast,” “will,” “would,” “should” or the negative of such terms or other variations on such terms or comparable or similar words or expressions.

These forward-looking statements reflect, as applicable, our management’s current beliefs, assumptions and expectations and are subject to a number of factors that may cause actual results to differ materially. These factors include, but are not limited to:

the complexity of our manufacturing processes and the susceptibility of our biological intermediates to contamination;

our need to continually monitor our products for possible unexpected side effects;

our ability to adhere to government regulations so that we may continue to manufacture and distribute our products;

the impact of disruptions in our supply of plasma or in the operations of our plasma collection centers;

the impact of competing products and pricing and the actions of competitors;

the continued impact of the ongoing virus named “SARS-CoV-2” (the “Coronavirus” or “COVID-19”) pandemic;

the impact of product liability claims on our business;

our reliance on a plasma supply free of transmittable disease;

interest rates and availability and cost of financing opportunities;

the impact of interest rate fluctuations;

unexpected shut-downs of our manufacturing and storage facilities or delays in opening new planned facilities;

reliance on third parties for manufacturing of products and provision of services;

our ability to commercialize products in development;

our ability to protect our intellectual property rights.

Table of Contents

U.S. healthcare legislation, new legislation, regulatory action or legal proceedings affecting, among other things, the U.S. healthcare system, pharmaceutical pricing and reimbursement, including Medicaid, Medicare and the Public Health Service Program;

legislation or regulations in markets outside of the United States affecting product pricing, reimbursement, access, or distribution channels; and

changes in legal requirements affecting the industries in which we operate.

Please review a more detailed discussion of these and other risks that may impact our business set forth in this Form 20-F under “Item 3.D. Risk Factors.”

Forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including those listed above, and actual results may differ materially from those expressed or implied in the forward-looking statements.

All written and oral forward-looking statements concerning matters addressed in this annual report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this annual report. The forward-looking statements contained in this annual report speak only as of the date of this annual report. Except as required by law, we do not undertake to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events.

Table of Contents

PART I

Item 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Directors and Senior Management

Not applicable.

Advisers

Not applicable.

Auditors.

Not applicable.

Item 2.OFFER STATISTICS AND EXPECTED TIMETABLE

Offer Statistics

Not applicable.

Method and Expected Timetable

Not applicable.

Item 3.KEY INFORMATION

[Reserved]

Capitalization and Indebtedness

Not Applicable.

Reasons for the Offer and Use of Proceeds

Not Applicable.

Risk Factors

Summary

Our company, our business and our securities are subject to a number of risks which are described more comprehensively elsewhere in this item D. We present below a summary of our key risk factors.

Risks Relating to Our Structure:

Our substantial level of indebtedness could adversely affect our financial condition, restrict our ability to react to changes to our business, and prevent us from fulfilling our obligations;

Despite our substantial indebtedness, we may still incur significantly more debt. This could exacerbate the risks associated with our substantial leverage;

Table of Contents

To service our indebtedness and other obligations, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control, including our ability to receive dividends and other distributions from our subsidiaries, while covenants in our debt agreements restrict our business in many ways;

The phasing out and ultimate replacement of LIBOR with an alternative reference rate and changes in the manner of calculating other reference rates may adversely impact the value of loans and other financial instruments we hold that are linked to LIBOR or other reference rates in ways that are difficult to predict and could adversely impact our financial condition and results of operations; and

The ability to enforce civil liabilities under U.S. securities laws may be limited.

Risks Relating to the Company and Our Business:

Plasma and plasma derivative products are fragile, and improper handling of our plasma or plasma derivative products could adversely affect results of operations. Furthermore, our manufacturing processes are complex and involve biological intermediates that may be susceptible to contamination and variations in yield;

Once our products are approved and marketed, we must continually monitor them for signs that their use may result in serious and unexpected side effects, which could jeopardize our reputation and our ability to continue marketing our products. We may also be required to conduct post-approval clinical trials as a condition to licensing a product. Moreover, we may not be able to commercialize products in development;

Our ability to continue manufacturing and distributing our products depends on our continued adherence to cGMP regulations at our facilities;

A significant disruption in our supply of plasma could have a material adverse effect on our business and our growth plans;

The Coronavirus pandemic has had, and could continue to have, a material, adverse impact on us;

A significant portion of our net revenue has historically been derived from sales of our immunoglobulin (“IG”) products and we expect that they will continue to comprise a significant portion of our sales. Any adverse market event with respect to these products could have a material adverse effect on us;

We face significant competition, including from companies with greater financial resources;

Technological changes in the production of plasma derivative and diagnostic products could render our production process uneconomical;

Product liability claims or product recalls involving our products or products we distribute could have a material adverse effect on our business;

Our future success depends on our ability to retain members of our senior management and to attract, retain and motivate qualified personnel;

Our business requires substantial capital to operate and grow and to achieve our strategy of realizing increased operating leverage, including the completion of several large capital projects;

Our results of operations and financial condition may be affected by adverse changes in foreign currency exchange rates, especially a significant shift in the value of the euro as compared to the U.S. dollar;

Table of Contents

If our shipping distribution channels or the San Diego, Clayton, Emeryville, Los Angeles or Parets facilities were to suffer a crippling accident, or if a force majeure event materially affected our ability to operate, produce and distribute saleable products, a substantial part of our manufacturing capacity could be shut down for an extended period and our distribution processes could be disrupted;

We rely in large part on the services of third parties for the manufacture, sale, distribution and delivery of our products. If these third parties fail to timely perform their obligations, or if we experience equipment difficulties, or if the suppliers of our equipment or disposable goods fail to deliver key product components or supplies in a timely manner, our manufacturing ability would be impaired and our product sales could suffer;

Complex and evolving U.S. and international laws and regulations regarding privacy and data security and increased risk of cybersecurity incidents to our information technology systems could result in increased costs of operations and a significant disruption to our business;

In addition to patented technology, we rely on our unpatented proprietary technology, trade secrets, processes and know-how. Our success depends in large part on our ability to obtain and maintain protection in the United States and other countries of the intellectual property relating to or incorporated into our technology and products; and

Risks Relating to the Healthcare Industry:

The United States Patient Protection and Affordable Care Act and the companion Healthcare and Education Reconciliation Act, each enacted in March 2010, may adversely affect our business;

Impact of government regulations over product development and regulatory approvals, as well as government pressures and constraints on reimbursement may adversely affect our business; and

We are subject to extensive government regulatory compliance and ethics oversight, and the failure to comply with laws and regulations governing the sales and marketing of our products or an adverse decision in lawsuits may result in adverse consequences to us.

Risks Relating to Our Shares and American Depositary Shares:

If we discover material weaknesses or significant deficiencies in our internal control over financial reporting, it may adversely affect our ability to provide timely and reliable financial information and satisfy our reporting obligations under U.S. federal securities laws, which also could affect the market price of our American Depositary Shares or our ability to remain listed on NASDAQ;

The Grifols Family may exercise significant influence over the conduct of our business;

The market price of our Class B ADSs on NASDAQ may be volatile;

Fluctuations in the exchange rate between the U.S. dollar and the euro may increase the risk of holding our ADSs or shares;

Subscription (or preemptive) rights may be unavailable to U.S. holders of our shares or ADSs; and

ADS holders may be subject to limitations on the transfer of their ADSs.

Table of Contents

Risks Relating to Our Structure

Our substantial level of indebtedness could adversely affect our financial condition, restrict our ability to react to changes to our business, and prevent us from fulfilling our obligations under our debt.

We have a significant amount of indebtedness. As of December 31, 2022, our current and non-current financial liabilities were €10,756.2 million, of which a substantial majority (€9,960.6 million) was long-term debt.

Our high level of indebtedness could have significant adverse effects on our business, such as:

making it more difficult for us to satisfy our obligations with respect to our outstanding debt;

making us more vulnerable to economic downturns and adverse developments in our business;

impairing our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes;

reducing the funds available to us for operations and other purposes due to the substantial portion of our cash flow that we use to pay interest on our indebtedness;

placing a prior ranking claim on the underlying assets of all of the indebtedness outstanding under our purchase money indebtedness, equipment financing and real estate mortgages;

limiting our ability to fund a change of control offer;

placing us at a competitive disadvantage compared to our competitors that may have proportionately less debt;

limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and

restricting us from making strategic acquisitions or exploiting other business opportunities.

We expect to use cash flow from operations to pay our expenses and amounts due under our outstanding indebtedness. Our ability to make these payments depends on our future performance, which will be affected by financial, business, economic and other factors, many of which we cannot control. Our business may not generate sufficient cash flow from operations in the future and our anticipated growth in revenue and cash flow may not be realized, either or both of which could result in our being unable to repay indebtedness or to fund other liquidity needs. If we do not have enough liquidity, we may be required to refinance all or part of our then existing debt, sell assets or incur more debt. We may not be able to accomplish any of these alternatives on terms acceptable to us, or at all. In addition, the terms of existing or future debt agreements may restrict us from adopting any of these alternatives. The failure to generate sufficient cash flow or to achieve any of these alternatives could materially and adversely affect our business, results of operations and financial condition.

Despite our substantial indebtedness, we may still incur significantly more debt. This could exacerbate the risks associated with our substantial leverage.

We may be able to incur substantial additional indebtedness, including additional secured indebtedness, in the future. Our business is capital intensive, and we regularly seek additional capital. Although the indenture governing the 2017 Notes (as defined herein), the indenture governing the 2019 Notes (as defined herein), the indenture governing the 2021 Notes (as defined herein), the First Lien Credit Facilities (as defined herein) and the European Investment Bank Term Loans (as defined herein) contain restrictions on the incurrence of additional debt, these restrictions are subject to a number of qualifications and exceptions and, under certain circumstances, debt incurred in compliance with these restrictions, including secured debt, could be substantial. Incurring additional debt to current debt levels could exacerbate the leverage-related risks described above. For more information on our indebtedness, see Item 5 of this Part I, “Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Sources of Credit.”

Table of Contents

To service our indebtedness and other obligations, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control.

Our ability to make payments on and to refinance our indebtedness and to fund working capital needs and planned capital expenditures will depend on our ability to generate cash in the future. A significant reduction in our operating cash flows resulting from changes in economic conditions, increased competition or other events beyond our control could increase the need for additional or alternative sources of liquidity and could have a material adverse effect on our business, financial condition, results of operations, prospects and our ability to service our debt and other obligations. If we are unable to service our indebtedness, we will be forced to adopt an alternative strategy that may include actions such as reducing capital expenditures, selling assets, restructuring or refinancing our indebtedness or seeking additional equity capital. We cannot assure you that any of these alternative strategies could be effected on satisfactory terms, if at all, or that they would yield sufficient funds to make required payments on our indebtedness.

In addition, our borrowings under the First Lien Credit Facilities are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would decrease.

We cannot assure you that our business will generate sufficient cash flows from operations or that future borrowings will be available to us under the First Lien Credit Facilities or otherwise in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness on or before the maturity of such indebtedness. We cannot assure you that we will be able to refinance any of our indebtedness, including the First Lien Credit Facilities, the 2017 Notes, the 2019 Notes, the 2021 Notes and the European Investment Bank Term Loans, on commercially reasonable terms or at all. For more information on our indebtedness, see Item 5 of this Part I, “Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Sources of Credit.”

Covenants in our debt agreements restrict our business in many ways.

The agreements governing our indebtedness and other financial obligations applicable to us contain various covenants, with customary caveats, that limit our ability and/or our restricted subsidiaries’ ability to, among other things:

incur or assume liens or additional debt or provide guarantees in respect of obligations of other persons;

issue redeemable stock and preferred equity;

pay dividends or make distributions to the shareholders of Grifols or redeem or repurchase capital stock;

prepay, redeem or repurchase debt;

make loans, investments and capital expenditures;

enter into agreements that restrict distributions from our restricted subsidiaries;

sell assets and capital stock of our subsidiaries;

enter into certain transactions with affiliates; and

consolidate or merge with or into, or sell substantially all of our assets to, another person.

Table of Contents

A breach of any of these covenants could result in a default under our debt agreements. Upon the occurrence of an event of default, the respective creditors could elect to declare all amounts outstanding under the debt agreements to be immediately due and payable and, in the case of the First Lien Credit Facilities, 2021 Notes, 2019 Notes, 2017 Notes and the EIB Term Loans, terminate all commitments to extend further credit. If we were unable to repay those amounts, the respective creditors could proceed against the collateral granted to them to secure that indebtedness. We have pledged a significant portion of our assets as collateral under the First Lien Credit Facilities, the European Investment Bank Term Loans and the 2019 Notes. If the respective creditors under our existing indebtedness accelerate the repayment of borrowings, we may not have sufficient assets to repay our indebtedness.

Our ability to meet our financial obligations depends on our ability to receive dividends and other distributions from our subsidiaries.

Our principal assets are the equity interests that we hold in our operating subsidiaries. As a result, we are dependent on dividends and other distributions from our subsidiaries to generate the funds necessary to meet our financial obligations, including the payment of principal and interest on our outstanding debt. Our subsidiaries may not generate sufficient cash from operations to enable us to make principal and interest payments on our indebtedness or may have preferential dividends which are required to be paid prior to any dividends to us. For example, in the case of each of Biomat USA, Inc. (“Biomat USA”) and Biomat Newco Corp (“Biomat Newco”), our U.S.-based plasma collection subsidiaries, to the extent dividends are declared by their respective shareholders, the GIC Investor (as defined Item 4 of this Part I, “Information on the Company—A. History of and Development of the Company—Important Milestones”) would be entitled to receive preferred dividends. Such dividends are equal to $4,168,421.05 per share annually payable by each of Biomat USA (in respect of its ten preferential shares) and Biomat Newco (in respect of its nine preferential shares) and carry additional rights with them as well as including redemption rights and a liquidation preference of $52,105,263.16 per share. See Item 5 of this Part I, “Operating and Financial Review and Prospects—A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Dispositions—The Biomat Transactions.”

In addition, any payment of dividends, distributions, loans or advances to us by our subsidiaries could be subject to restrictions on dividends or, in the case of foreign subsidiaries, restrictions on repatriation of earnings under applicable local law and monetary transfer restrictions in the jurisdictions in which our subsidiaries operate. In addition, payments to us by our subsidiaries will be contingent upon our subsidiaries’ earnings. Our subsidiaries are permitted under the terms of our indebtedness to incur additional indebtedness that may restrict payments from those subsidiaries to us. We cannot assure you that agreements governing current and future indebtedness of our subsidiaries will permit those subsidiaries to provide us with sufficient cash to fund payments on our indebtedness when due.

Our subsidiaries are legally distinct from us and, except for existing and future subsidiaries that guarantee certain indebtedness, have no obligation, contingent or otherwise, to pay amounts due on our debt or to make funds available to us for such payment.

We are a foreign private issuer under the rules and regulations of the Securities and Exchange Commission and, thus, are exempt from a number of rules under the Securities Exchange Act of 1934 and are permitted to file less information with the Securities and Exchange Commission than a company incorporated in the United States.

As a foreign private issuer under the Securities Exchange Act of 1934, as amended, or the Exchange Act, we are exempt from certain rules under the Exchange Act, including the proxy rules under Section 14 of the Exchange Act, which impose certain disclosure and procedural requirements for proxy solicitations. Moreover, we are not required to file periodic reports and financial statements with the Securities and Exchange Commission, or the SEC, as frequently or as promptly as U.S. companies with securities registered under the Exchange Act; we are not required to file financial statements prepared in accordance with United States generally accepted accounting principles; and we are not required to comply with SEC Regulation FD, which imposes certain restrictions on the selective disclosure of material non-public information. In addition, our officers, directors and principal shareholders are not subject to the reporting or short-swing profit recovery provisions of Section 16 of the Exchange Act or the rules under the Exchange Act with respect to their purchases and sales of our Class A shares or Class B shares. Accordingly, you may receive less information about us than you would receive about a company incorporated in the United States and may be afforded less protection under the U.S. federal securities laws than you would be afforded with respect to a company incorporated in the United States. If we lose our status as a foreign private issuer at some future time, we will no longer be exempt from such rules and, among other things, will be required to file periodic reports and financial statements as if we were a company incorporated in the United States. The costs incurred in fulfilling these additional regulatory requirements could be substantial.

Table of Contents

Additionally, pursuant to The NASDAQ Stock Market LLC (“NASDAQ”) listing rules (the “NASDAQ Listing Rules”) as a foreign private issuer, we may elect to follow our home country practice in lieu of the corporate governance requirements of the NASDAQ Listing Rule 5600 Series, with the exception of those rules that are required to be followed pursuant to the provisions of NASDAQ Listing Rule 5615(a)(3). We have elected to follow Spanish practices in lieu of the requirements of the NASDAQ Listing Rule 5600 Series to the extent permitted under NASDAQ Listing Rule 5615(a)(3). See Item 16.G. of Part II, “Corporate Governance.”

Our business could suffer as a result of the United Kingdom’s decision to end its membership in the European Union.

The United Kingdom (“U.K.”), formally left the European Union (“E.U.”), on January 31, 2020, and on December 24, 2020, the U.K. and the E.U. reached an agreement on a new partnership governing the rules that apply between the U.K. and the E.U. On January 1, 2021, provisional application of the agreement took effect. Despite the existence of a new deal, the decision of the U.K. to exit from the E.U., or Brexit, may lead to legal uncertainty and potentially divergent laws and regulations between the U.K. and the E.U., as the United Kingdom determines which E.U. laws to replicate or replace. We still cannot predict whether or not the U.K. will significantly alter its current laws and regulations in respect of the pharmaceutical industry and, if so, what impact any such alteration would have on us or our business. Moreover, we still cannot predict the impact that Brexit will have on (i) the marketing, transportation and sale of pharmaceutical products or (ii) the process to obtain regulatory approval in the U.K. for product candidates.

Further, Brexit may still cause disruptions to our business, and create uncertainty affecting our relationships with existing and potential customers, suppliers and employees. The effects of Brexit could potentially disrupt some of our target markets and jurisdictions in which we operate, and may create global economic uncertainty. Any of these effects of Brexit, among others, could materially adversely affect our business, business opportunities, results of operations, financial condition and cash flows.

The military conflict between Russia and Ukraine, and the global response thereto, may adversely affect our business and results of operations.

In response to the military conflict between Russia and Ukraine, the United States, United Kingdom, European Union and others have imposed significant new sanctions and export controls against Russia and certain Russian individuals and entities. This conflict has also resulted in significant volatility and disruptions to the global markets. It is not possible to predict the long-term implications of this conflict, which could include but are not limited to further sanctions, uncertainty about economic and political stability, increases in inflation rates and further increases in energy prices, supply chain challenges and adverse effects on currency exchange rates and financial markets. In addition, sanctions against Russia in response to the conflict could lead to an increased threat of cyberattacks, which could pose risks to the security of our IT systems, our network and our service offerings, as well as the confidentiality, availability and integrity of our data. Up to the present date, the conflict has not directly affected our business, however, we have operations, as well as current and potential new customers, in several locations in Europe. If the conflict extends beyond Ukraine or further intensifies, it could have an adverse impact on our operations.

In July 2017, the U.K.’s Financial Conduct Authority, which regulates LIBOR, announced its intention to phase out LIBOR by the end of 2021. After December 31, 2021, the ICE Benchmark Administration ceased publication of all EUR, CHF, JPY and GBP LIBOR tenors and two of the seven U.S. dollar LIBOR tenors (1 Week and 2 Months tenors).The ICE Benchmark Administration intends to continue publication of the remaining five U.S. dollar LIBOR tenors (Overnight, 1, 3, 6, and 12 Months tenors) until June 2023. As LIBOR is phased out, it will be replaced with an alternative reference rate that will be calculated in a different manner. Similar changes have occurred or may occur with respect to other reference rates.

Table of Contents

The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, identified the Secured Overnight Financing Rate, or SOFR, as the preferred alternative reference rate to U.S. dollar LIBOR and recommended a paced transition plan with specific steps and timelines designed to encourage the adoption and implementation of a reference rate based on SOFR. SOFR is a more generic measure than LIBOR and considers the cost of borrowing cash overnight, collateralized by U.S. Treasury securities. Given the inherent differences between LIBOR and SOFR or any other alternative benchmark rate that may be established, there are many uncertainties regarding a transition from LIBOR. Our First Lien Credit Facilities contain a fallback provision providing for alternative rate calculations in the event LIBOR is unavailable, prior to any LIBOR rate transition. As a result, our level of interest payments we incur may change and the new rates we incur may not be as favorable to us as those in effect prior to any LIBOR phase-out.

The ability to serve process and enforce civil liabilities under U.S. securities laws may be limited.

We are a company organized under the laws of Spain, and many of our subsidiaries are also incorporated outside of the United States. A substantial portion of our assets and the assets of our subsidiaries are located outside of the United States. In addition, nearly all of our directors and officers and certain of our subsidiaries’ officers and directors are nationals or residents of countries other than the United States, and all or a substantial portion of such persons’ assets are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon us or certain of our subsidiaries or their directors or officers with respect to matters arising under the Securities Act of 1933 (the “Securities Act”) or to enforce against them judgments of courts of the United States predicated upon civil liability under the Securities Act. It may also be difficult to recover fully in the United States on any judgment rendered against such persons or against us or certain of our subsidiaries.

In addition, there is doubt as to the enforceability in Spain of original actions, or of actions for enforcement of judgments of U.S. courts of liabilities, predicated solely upon the securities laws of the United States. If a judgment was obtained outside Spain and efforts were made to enforce the judgment in Spain, there is some doubt that Spanish courts would agree to recognize and enforce a foreign judgment. Accordingly, even if you obtain a favorable judgment in a U.S. court, you may be required to re-litigate your claim in Spain.

Risks Relating to the Company and Our Business

Our manufacturing processes are complex and involve biological intermediates that may be susceptible to contamination and variations in yield.

Plasma is a raw material that is susceptible to damage and contamination and may contain human pathogens, any of which would render the plasma unsuitable for further manufacturing. For instance, contamination or improper storage of plasma by us or third-party suppliers may require us to destroy some of our raw material. If unsuitable plasma is not identified and discarded prior to its release to our manufacturing processes, it may be necessary to discard intermediate or finished product made from that plasma or to recall any finished product released to the market, resulting in a charge to cost of goods sold.

The manufacture of our plasma products is an extremely complex process of fractionation (separating the plasma into component proteins), purification, filling and finishing. Our products can become non-releasable or otherwise fail to meet our specifications through a failure of one or more of our product testing, manufacturing, process controls and quality assurance processes. We may detect instances in which an unreleased product was produced without adherence to our manufacturing procedures or plasma used in our production process was not collected or stored in a compliant manner consistent with Current Good Marketing Practice (“cGMP”) regulations enforced by the U.S. Food and Drug Administration (“FDA”) or other regulations, which would likely result in our determination that the impacted products should not be released and therefore should be destroyed.

Once we have manufactured our plasma-derived products, they must be handled carefully and kept at appropriate temperatures. Our failure, or the failure of third parties that supply, ship or distribute our products, to properly care for our plasma-derived products may require that such products be destroyed.

Table of Contents

While we expect to write off small amounts of work in process inventories in the ordinary course of business due to the complex nature of plasma, our processes and our products, unanticipated events may lead to write-offs and other costs materially in excess of our expectations. Such write-offs and other costs could cause material fluctuations in our profitability. Furthermore, contamination of our products could cause investors, consumers or other third parties with whom we conduct business to lose confidence in the reliability of our manufacturing procedures, which could adversely affect our sales and profits. In addition, faulty or contaminated products that are unknowingly distributed could result in patient harm, threaten the reputation of our products and expose us to product liability damages and claims.

Due to the nature of plasma, there will be variations in the biologic properties of the plasma we collect or purchase for fractionation that may result in fluctuations in the obtainable yield of desired fractions, even if cGMP regulations are followed. Lower yields may limit production of our plasma-derived products due to capacity constraints. If such batches of plasma with lower yields impact production for extended periods, it may reduce the total volume of product that we could market and increase our cost of goods sold, thereby reducing our profitability.

Our manufacture of intermediate immunoassay antigens and antibodies to screen human donated blood and blood products is also a complex biologic process, subject to substantial production risks. These processes typically involve an upstream or fermentation process and a downstream or purification process. Since in the upstream process we deal with living cells, we may face a contamination by undesired cells which would eventually translate in a low yield. Yields in general can also be greatly affected by the different nutrients compositions added to the reactors in this fermentation step. Likewise during the purification step, we can face low yields due to poor resins composition, equipment failure or procedural mistakes.

As for all pharmaceutical products, the use of our products sometimes produces undesirable side effects or adverse reactions or events (collectively, “adverse events”). For the most part these adverse events are known, are expected to occur at some frequency and are described in the products’ labeling. Known adverse events of a number of our products include allergic or anaphylactic reactions including shock and the transmission of infective agents. Further, the use of certain products sometimes produces additional adverse events, which are detailed below.

The use of albumin sometimes produces the following adverse events: hypervolemia, circulatory overload, pulmonary edema, hyperhydration and allergic manifestations including urticaria, chills, fever and changes in respiration, pulse and blood pressure.

The use of blood clotting Factor IX sometimes produces the following adverse events: the induction of neutralizing antibodies; thromboembolism, including myocardial infarction; disseminated intravascular coagulation; venous thrombosis and pulmonary embolism; and, in the case of treatment for immune tolerance induction, nephrotic syndrome.

The use of the antihemophilic blood clotting Factor VIII sometimes produces the following adverse events: the induction of neutralizing antibodies, thromboembolic events and hemolytic anemia or hemolysis.

The use of immunoglobulins sometimes produces the following adverse events: nausea, vomiting, asthenia, pyrexia, rigors, injection site reaction, allergic or anaphylactic reaction, aseptic meningitis, arthralgia, back pain, dizziness, headache, rash, pruritus, urticaria, hemolysis or hemolytic anemia, hyperproteinemia, increased serum viscosity and hyponatremia, thromboembolic reactions such as myocardial infarction, stroke, pulmonary embolism and deep vein thromboses, transfusion-related acute lung injury and renal dysfunction and acute renal failure.

The use of anti-hepatitis B immunoglobulin sometimes produces the following adverse events: thromboembolic reactions such as myocardial infarction, stroke, pulmonary embolism and deep vein thromboses, aseptic meningitis, hemolytic anemia or hemolysis and acute renal failure.

Table of Contents

The use of Koate^®-DVI, which we license exclusively in the United States to Kedrion S.p.A, a corporation organized under the laws of Italy, sometimes produces the following adverse events: allergic reactions, tingling in the arm, ear and face, blurred vision, headache, nausea, stomach ache and a jittery feeling.

The use of Prolastin^®, Prolastin^®-C, alpha-1 proteinase inhibitor, or A1PI, sometimes produces the following adverse events: dyspnea, tachycardia, rash, chest pain, chills, influenza-like symptoms, hypersensitivity, hypotension and hypertension.

In addition, the use of our products may be associated with serious and unexpected adverse events, or with less serious reactions at a greater than expected frequency. This may be especially true when our products are used in critically ill patient populations. When these unexpected events are reported to us, we must undertake a thorough investigation to determine causality and implications for product safety. These events must also be specifically reported to the applicable regulatory authorities. If our evaluation concludes, or regulatory authorities perceive, that there is an unreasonable risk associated with the product, we would be obligated to withdraw the impacted lot(s) of that product. Furthermore, an unexpected adverse event caused by a new product may be recognized only after extensive use of the product, which could expose us to product liability risks, enforcement action by regulatory authorities and damage to our reputation.

Once we produce a product, physicians are responsible for prescribing and administering the product as we have directed and for the indications described on the labeling. It is not, however, unusual for physicians to prescribe our products for unapproved, or off-label, uses or in a manner that is inconsistent with our directions or the labeling. To the extent such off-label uses and departures from our administration directions become pervasive and produce results such as reduced efficacy or other adverse effects, the reputation of our products in the marketplace may suffer.

Our ability to continue manufacturing and distributing our products depends on our continued adherence to cGMP regulations at our facilities.

The manufacturing processes for our products are governed by detailed written procedures and governmental regulations that set forth cGMP requirements for blood, blood products and other products. Our quality operations unit monitors compliance with these procedures and regulations, and the conformance of materials, manufacturing intermediates and final products to their specifications. Failure to adhere to established procedures or regulations, or to meet a specification, could require that a product or material be rejected and destroyed.

Our adherence to cGMP regulations and the effectiveness of our quality systems are periodically assessed through inspections of our facilities by the FDA, and analogous regulatory authorities of other countries. If deficiencies are noted during an inspection, we must take action to correct those deficiencies and to demonstrate to the regulatory authorities that our corrections have been effective. If serious deficiencies are noted or if we are unable to prevent recurrences, we may have to recall product or suspend operations until appropriate measures can be implemented. We are also required to report certain deviations from procedures to the FDA and even if we determine that the deviations were not material, the FDA could require us to take similar measures. Since cGMP reflects ever-evolving standards, we regularly need to update our manufacturing processes and procedures to comply with cGMP. These changes may cause us to incur costs without improving our profitability or the safety of our products. For example, more sensitive testing assays (if and when they become available) may be required or existing procedures or processes may require revalidation, all of which may be costly and time consuming and could delay or prevent the manufacturing of a product or launch of a new product.

Changes in manufacturing processes, including a change in the location where the product is manufactured or a change of a third-party manufacturer, may require prior FDA review and approval or revalidation of the manufacturing processes and procedures in accordance with cGMP regulations. There may be comparable foreign requirements.

Table of Contents

To validate our manufacturing processes and procedures following completion of our upgraded facilities, we must demonstrate that the processes and procedures at the upgraded facilities are comparable to those currently in place at our other facilities. To provide such a comparative analysis, both the existing processes and the processes that we expect to be implemented at our upgraded facilities must comply with the regulatory standards prevailing at the time that our expected upgrade is completed. In addition, regulatory requirements, including cGMP regulations, continually evolve. Failure to adjust our operations to conform to new standards as established and interpreted by applicable regulatory authorities would create a compliance risk that could impair our ability to sustain normal operations.

Regulatory authorities, including the FDA and the European Medicines Office (“EMA”), routinely inspect our facilities to assess ongoing compliance with cGMP. If the FDA, the EMA or other regulatory authorities find our facilities to be out of compliance, our ongoing operations or plans to expand would be adversely affected.

A significant disruption in our supply of plasma could have a material adverse effect on our business and our growth plans.

The majority of our revenue depends on our access to U.S. source plasma (plasma obtained through plasmapheresis), the principal raw material for our plasma derivative products. Our ability to increase revenue depends substantially on increased access to plasma. If we are unable to obtain sufficient quantities of source plasma, we may be unable to find an alternative cost-effective source of plasma and we would be limited in our ability to maintain current manufacturing levels of plasma derivative products. As a result, we could experience a substantial decrease in net revenue or profit margins, a loss of customers, a negative effect on our reputation as a reliable supplier of plasma derivative products or a substantial delay in our production growth plans.

Our current business plan envisages an increase in the production of plasma derivative products, which depends on our ability to maintain and/or increase plasma collections or improve product yield. The ability to maintain and/or increase plasma collections may be limited, our supply of plasma could be disrupted or the cost of plasma could increase substantially, as a result of numerous factors, including:

A reduction in the donor pool. Regulators in most of the largest markets for plasma derivative products, including the United States, restrict the use of plasma collected from specific countries and regions in the manufacture of plasma derivative products. For example, the appearance of the variant Creutzfeldt-Jakob, or mad cow disease, resulted in the suspension of the use of plasma collected from U.K. residents and concern over the safety of blood products, which has led to increased domestic and foreign regulatory control over the collection and testing of plasma and the disqualification of certain segments of the population from the donor pool, significantly reducing the potential donor pool. The appearance of new viral strains could further reduce the potential donor pool. Also, changes in socioeconomic conditions could impact the number of donors. More recently, the COVID-19 pandemic also adversely impacted our plasma collection volumes because of, among other things, mobility restrictions. See Item 5 of this Part I, “Operating and Financial Review and Prospects—A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Consequences of Covid-19.”

Regulatory requirements. See “—Disruption of the operations of our plasma collection centers would cause us to become supply constrained and our financial performance would suffer.”

Plasma supply sources. In recent years, there has been vertical integration in the industry as plasma derivatives manufacturers have been acquiring plasma collection centers. Any significant disruption in the supply of plasma or an increased demand for plasma may require us to obtain plasma from alternative sources, which may not be available on a timely basis.

Table of Contents

Disruption of the operations of our plasma collection centers would cause us to become supply-constrained and our financial performance would suffer.

In order for plasma to be used in the manufacturing of our products, the individual centers at which the plasma is collected must be licensed and approved by the regulatory authorities, such as the FDA and the EMA, of those countries in which we sell our products. When a new plasma collection center is opened, it must be inspected on an ongoing basis after its approval by the FDA and the EMA for compliance with cGMP and other regulatory requirements, and these regulatory requirements are subject to change. For example, an FDA final rule, effective May 23, 2016, addressed the collection of blood components, such as plasma, intended for transfusion or further manufacturing use, including requirements with respect to donor education, donor history and donor testing. While we believe that our centers have timely adopted the regulations, which generally reflected our existing approaches, the compliance efforts necessary for evolving requirements, such as these, may increase our costs. An unsatisfactory inspection could prevent a new center from being approved for operation or risk the suspension or revocation of an existing approval.

In order for a plasma collection center to maintain its governmental approval to operate, its operations must continue to conform to cGMP and other regulatory requirements. In the event that we determine a plasma collection center did not comply with cGMP in collecting plasma, we may be unable to use and may ultimately destroy plasma collected from that center, which would be recorded as a charge to cost of goods. Additionally, if noncompliance in the plasma collection process is identified after the impacted plasma has been pooled with compliant plasma from other sources, entire plasma pools, in-process intermediate materials and final products could be impacted. Consequently, we could experience significant inventory impairment provisions and write-offs.

We plan to continue to obtain our supplies of plasma for use in our manufacturing processes through collections at our plasma collection centers and through selective acquisitions or remodeling and relocations of existing centers. This strategy is dependent upon our ability to successfully integrate new centers, to obtain FDA and other necessary approvals for any centers not yet approved by the FDA, to maintain a cGMP compliant environment in all centers and to attract donors to our centers.

Our ability to increase and improve the efficiency of production at our plasma collection centers may be affected by: (i) changes in the economic environment and population in selected regions where we operate plasma collection centers; (ii) the entry of competitive centers into regions where we operate; (iii) our misjudging the demographic potential of individual regions where we expect to increase production and attract new donors; (iv) unexpected facility related challenges; (v) unexpected management challenges at select plasma collection centers; or (vi) unforeseen governmental changes to policies limiting the donor population or imposing regulations that make plasma donations onerous and restrictive.

The Coronavirus pandemic has had, and could continue to have, a material, adverse impact on us.

The outbreak of the respiratory illness caused by a coronavirus named “SARS-CoV-2” (the “Coronavirus” or “COVID-19”) resulted in governments and businesses worldwide adopting emergency measures to combat the spread of the Coronavirus while seeking to maintain essential services. These measures included, without limitation, social distancing, the temporary closure of non-essential businesses, stay-at-home and work-from-home policies, self-imposed quarantine periods, border closures and travel bans or restrictions. These measures and conditions continue to have an adverse impact and may continue to adversely affect our manufacturing and supply chains, clinical trial operations and the ability of our employees to attend work or work effectively, which caused our net plasma supply to be negatively impacted in 2020 and 2021. As a result of a decrease in donors due to mobility restrictions, we increased our donor fees and, consequently, our cost per liter of plasma collected also increased during the pandemic. Although in the second half of 2022 these material issues started to ease, with our cost per liter, donor compensation, and other negative factors improving, if the measures adopted in response to the COVID-19 pandemic are re-introduced, and potentially upon their gradual or complete removal, our revenues, financial condition, profitability and cash flows may be materially adversely affected.

Table of Contents

See Item 5 of this Part I, “Operating and Financial Review and Prospects—A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Consequences of COVID-19” for additional details.

A significant portion of our net revenue has historically been derived from sales of our immunoglobulin products and we expect that they will continue to comprise a significant portion of our sales. Any adverse market event with respect to these products could have a material adverse effect on us.

We have historically derived a significant portion of our net revenue from our immunoglobulin products, including our immunoglobulin products. In 2022 and 2021, our IG products accounted for approximately 43% and 42% of our net revenue, respectively. If any of these IG products were to lose significant sales or were substantially or completely displaced in the market, we would lose a significant and material source of our net revenue. Similarly, if either Flebogamma^®, Gamunex^®-C/Gamunex^® or Xembify^® were to become the subject of litigation or an adverse governmental ruling requiring us to cease sales of it, our business could be adversely affected. Although we do not currently anticipate any significant decrease in the sales of any of these products, a significant decrease could result from plasma procurement and manufacturing issues resulting in lower product availability for sales and changing market conditions.

We face significant competition.

We face significant competition. Each of Takeda, CSL Behring, Kedrion Biopharma, Octapharma Plasma and Bio Products Laboratory Ltd. now has a 10% liquid intravenous immunoglobulin (“IVIG”) product in the United States. Both Octapharma and Bio Products Laboratory have launched 5% liquid IVIG products. As competition has increased, some of our competitors have discounted the price of immunoglobulin products as many customers have become increasingly price sensitive with respect to immunoglobulin products. If customers demand lower priced products, we may lose sales or be forced to lower our prices.

In 2015, the European Commission granted marketing authorization for CSL’s Respreeza^® in all European Union member states. Another competitor is seeking to offer an inhaled formula and submitted a Marketing Authorization Application with the EMA, which remains pending. Our current and future competitors may increase their sales, lower their prices, change their distribution model or improve their products, causing harm to our product sales and market share. Also, if the attrition rate of our A1PI patient base accelerates faster than we have forecasted, we would have fewer patients and lower sales volume.

Other new treatments, such as small molecules, recombinant products, gene therapies or other therapies including Hemlibra, may also be developed for indications for which our products are now used. Recombinant Factor VIII and Factor IX products, which are currently available and widely used in the United States and Europe, compete with our plasma-derived product in the treatment of hemophilia A and B and are perceived by many to have lower risks of disease transmission. Additional recombinant products and new small molecules, some with extended half-lives, compete with our products and reduce the demand for our products. In October 2018, the FDA approved Genentech, Inc.’s emicizumab-kxwh injection treatment, Hemlibra, a non-plasma product to control bleeding in patients with hemophilia A. The use of Hemlibra presents a significant competitive risk for the use of plasma derived and recombinant Factor VIII. Additionally, numerous novel gene therapies are under development for the treatment of hemophilia which may further compete with our existing plasma derived therapies.

Furthermore, while we are investigating additional indications for the use of albumin, these new possibilities are countered by the fact that there are alternatives from competitors for albumin use in the main application we apply it, as a plasma volume expander.

We are only one of a number of companies that produce an alpha-1 anti-trypsin for the treatment of patients with hereditary emphysema and our competitors continually develop new methods of administration for this therapy. Additionally, new treatments such as gene therapy are in development by other companies and, regardless of the uncertainties surrounding the potential safety and efficacy of such new treatments, they help increasing our level of competition.

Table of Contents

The introduction of products approved for alternative routes of administration, including subcutaneous, may also adversely affect sales of our products. For example, CSL Behring and Takeda introduced preparations of human immunoglobin at a 20% concentration for the treatment of people who need antibody replacement and Takeda has an immune globulin with a recombinant human hyaluronidase indicated for the treatment of primary immunodeficiency (“Pl”) in adults. Although we have FDA approval for similar concentrations and routes of administration, the level of competition remains significant and trending up as other players continue developing their operations in this expanding area of therapy.

Other companies are developing different therapies for the treatment of autoimmune diseases and other disorders that are currently treated with our immunoglobulins. If an increased use of alternative products for Factor VIII, Factor IX, albumin, alpha-1 or immunoglobulins makes it uneconomical to produce our plasma-derived products, or if further technological advances improve these products or create other competitive alternatives to our plasma derivative products, our financial condition and results of operations could be materially adversely affected. We expect in the future to face greater competition from biosimilar products which could further adversely affect our financial performance.

We do not currently sell therapeutic recombinant products. We have recombinant versions of A1PI and plasmin in our pipeline, but we cannot be certain that any of these products will be approved or sold in the future. Additionally, we have recombinant versions of polyvalent and specific immune globulins under development. However, we cannot be certain that we will succeed in developing these products for licensed commercial use. As a result, our product offerings may remain plasma-derived, even if our competitors offer competing recombinant products.

We face competition from companies with greater financial resources.

We operate in highly competitive markets. Our principal competitors include Takeda, CSL Behring and Octapharma. Some of our competitors have significantly greater financial resources than us. As a result, they may be able to devote more funds to research and development and new production technologies, as well as to the promotion of their products and business. These competitors may also be able to sustain for longer periods a deliberate substantial reduction in the price of their products or services. The development by a competitor of a similar or superior product or increased pricing competition may result in a reduction in our net revenue or a decrease in our profit margins.

Technological changes in the production of plasma derivative and diagnostic products could render our production process uneconomical.

Technological advances have accelerated changes in recent years. Future technological developments could render our production processes uneconomical and may require us to invest substantial amounts of capital to upgrade our facilities. Such investments could have a material adverse effect on our financial condition and results of operations. In addition, we may not be able to fund such investments from existing funds or raise sufficient capital to make such investments.

The discovery of new pathogens could slow our growth and adversely affect profit margins.

The possible appearance of new pathogens could trigger the need for changes in our existing inactivation and production methods, including the administration of new detection tests. Such a development could result in delays in production until the new methods are in place, as well as increased costs that may not be readily passed on to our customers. See also “—The Coronavirus pandemic has had, and could continue to have, a material, adverse impact on us.”

Table of Contents

Product liability claims or product recalls involving our products or products we distribute could have a material adverse effect on our business.

Our business exposes us to the risk of product liability claims. We face an inherent risk of product liability exposure related to the testing of our product candidates in human clinical trials and an even greater risk when we commercially sell any products. If we cannot successfully defend ourselves against claims that our product candidates or products caused injuries, we could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in any or all of the following:

decreased demand for our products and any product candidates that we may develop;

injury to our reputation;

withdrawal of clinical trial participants;

costs to defend the related litigation;

substantial monetary awards to trial participants or patients;

loss of revenue; and

the inability to commercialize any products that we may develop.

Like many plasma fractionators, we have been, and may in the future be, involved in product liability or related claims relating to our products, including claims alleging the transmission of disease through the use of such products. Plasma is a biological matter that is known to be capable of transmitting viruses and pathogens, whether known or unknown. Therefore, our plasma and plasma derivative products, if donors are not properly screened or if the plasma is not properly collected, tested, inactivated, processed, stored and transported, could cause serious disease and possibly death to the patient. Any transmission of disease through the use of one of our products or third-party products sold by us could result in claims by persons allegedly infected by such products.

Our potential product liability also extends to our Diagnostic business unit and Healthcare Solutions (as defined herein) products. In addition, we sell and distribute third-party products, and the laws of the jurisdictions where we sell or distribute such products could also expose us to product liability claims for those products. Furthermore, the presence of a defect in a product could require us to carry out a recall of such product.

A product liability claim or a product recall could result in substantial financial losses, negative reputational repercussions and an inability to retain customers. Although we have a program of insurance policies designed to protect us and our subsidiaries from product liability claims, and we self-insure a portion of this risk, claims made against our insurance policies could exceed our limits of coverage. We intend to expand our insurance coverage as our sales grow. However, as product liability insurance is expensive and can be difficult to obtain, a product liability claim could decrease our access to product liability insurance on acceptable terms. In turn, we may not be able to maintain insurance coverage at a reasonable cost and may not be able to obtain insurance coverage that will be adequate to satisfy any liability that may arise. Although we have not experienced a material liability claim, we cannot assure you that we will not experience one in the future.

Our ability to continue to produce safe and effective plasma derivative products depends on a plasma supply free of transmittable diseases.

Although it is currently believed that COVID-19 cannot be transmitted through blood or plasma, the COVID-19 pandemic has affected our ability to collect plasma and the ability by donors to donate blood or plasma. See Item 5 of this Part I, “Operating and Financial Review and Prospects—A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Consequences of COVID-19” for additional details.

Table of Contents

Despite overlapping safeguards, including the screening of donors and other steps to remove or inactivate viruses and other infectious disease-causing agents, the risk of transmissible disease through plasma-derived products cannot be entirely eliminated. If a new infectious disease was to emerge in the human population in the future, the regulatory and public health authorities could impose precautions to limit the transmission of the disease that would impair our ability to procure plasma, manufacture our products or both. Such precautionary measures could be taken before there is conclusive medical or scientific evidence that a disease poses a risk for plasma-derived products.

In recent years, new testing and viral inactivation methods have been developed that more effectively detect and inactivate infectious viruses in collected plasma. There can be no assurance, however, that such new testing and inactivation methods will adequately screen for, and inactivate, infectious agents in the plasma used in the production of our products.

Plasma and plasma derivative products are fragile, and improper handling of our plasma or plasma derivative products could adversely affect results of operations.

Plasma is a raw material that is susceptible to damage. Almost immediately after its collection from a donor, plasma is stored and transported at temperatures that are at or below -20 degrees Celsius (-4 degrees Fahrenheit). Once we manufacture plasma derivative products, they must be handled carefully and kept at appropriate temperatures. Our failure, or the failure of third parties that supply, ship or distribute our plasma and plasma derivative products, to properly care for our plasma or plasma derivative products may require us to destroy some raw materials or products. If the volume of plasma or plasma derivative products damaged by such failures were to be significant, the loss of that plasma or those plasma derivative products could have a material adverse effect on our financial condition and results of operations.

Our future success depends on our ability to retain members of our senior management and to attract, retain and motivate qualified personnel.

We are highly dependent on the principal members of our executive and scientific teams. The loss of the services of any of these persons might impede the achievement of our research, development, operational and commercialization objectives. In particular, we believe the loss of any member of our senior management team would significantly and negatively impact our business. For details regarding the members of senior management, see Item 6 of this Part I, “Directors, Senior Management and Employees—A. Directors and Senior Management—Senior Management.” We do not maintain “key person” insurance on any of our senior management.

Recruiting and retaining qualified operations, finance and accounting, scientific, clinical and sales and marketing personnel will be critical to our success. We may not be able to attract and retain these personnel on acceptable terms, given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions. If we are unable to attract, retain and motivate qualified and experienced personnel, we could lose customers and suffer reduced profitability. Even if we are successful in attracting and retaining such personnel, competition for such employees may significantly increase our compensation costs and adversely affect our financial condition and results of operations.

Table of Contents

cGMP regulations also require that the personnel we employ and hold responsible for product manufacturing, including, for example, the collection, processing, testing, storage or distribution of blood or blood components, be adequate in number, educational background, training (including professional training as necessary) and experience, or a combination thereof, and have capabilities commensurate with their assigned functions, a thorough understanding of the procedures or control operations they perform, the necessary training or experience and adequate information concerning the application of relevant cGMP requirements to their individual responsibilities. Our failure to attract, retain and motivate qualified personnel may result in a regulatory violation, affect product quality, require the recall or market withdrawal of affected product or result in a suspension or termination of our license to market our products, or any combination thereof.

Our business requires substantial capital to operate and grow and to achieve our strategy of realizing increased operating leverage, including the completion of several large capital projects.

We have implemented several large capital projects to expand and improve the capacity and structure of our facilities and to improve the structure of our plasma collection centers in the United States. These projects may run over budget or be delayed. We cannot be certain that these projects will be completed in a timely manner or that we will maintain our compliance with cGMP regulations, and we may need to spend additional amounts to achieve compliance. Additionally, by the time these multi-year projects are completed, market conditions may differ significantly from our assumptions regarding the number of competitors, customer demand, alternative therapies, reimbursement and public policy, and as a result, capital returns might not be realized.

We also plan to continue to spend substantial sums on research and development, to obtain the approval of the FDA, and other regulatory agencies, for new indications for existing products, to develop new product delivery mechanisms for existing products and to develop innovative product additions. We face a number of obstacles to successfully converting these efforts into profitable products, including, but not limited to, the successful development of an experimental product for use in clinical trials, the design of clinical study protocols acceptable to the FDA and other regulatory agencies, the successful outcome of clinical trials, our ability to scale our manufacturing processes to produce commercial quantities or successfully transition technology, the approval of the FDA and other regulatory agencies of our products and our ability to successfully market an approved product or new indication.

For example, when a new product is approved, the FDA or other regulatory authorities may require post-approval clinical trials, sometimes called Phase IV clinical trials. If the results of such trials are unfavorable, this could result in the loss of the license to market the product, with a resulting loss of sales.

We continually make capital expenditures for the maintenance and enhancement of our facilities. The amount and timing of future capital spending is dependent upon a number of factors, including market conditions, regulatory requirements and the extent and timing of particular projects, among other things. Our ability to grow our business is dependent upon the timely completion of these projects and obtaining the requisite regulatory approvals.

We may not be able to develop some of our international operations successfully.

We currently conduct sales in over 100 countries. The successful operation of such geographically dispersed resources requires considerable management and financial resources. In particular, we must bridge our business culture to the business culture of each country in which we operate. In addition, international operations and the provision of services in foreign markets are subject to additional risks, such as changing market conditions, currency exchange rate fluctuations, trade wars and barriers, exchange controls, regulatory changes, changes to tax regimes (including proposed changes to U.S. tax laws by the Biden administration and the U.S. Congress), foreign investment limitations, civil disturbances, war and emerging pandemics. Furthermore, if an area in which we have significant operations or an area into which we are looking to expand suffers an economic recession or currency devaluation, our net revenues and accounts receivable collections in that region will likely decline substantially or we may not be able to successfully expand or operate in that region.

Table of Contents

Uncertainties regarding the general regulatory and legal environment, particularly in China, could adversely affect our business.

Our international operations are governed by local laws and regulations applicable to foreign investments and foreign-owned enterprises. Our business could be adversely affected by the interpretation and enforcement of and changes in these laws and regulations. These laws and regulations often lack transparency, can be difficult to interpret and may be enforced inconsistently. A significant portion of our revenues is derived from our operations in China. China has not developed integrated legal systems that cover all aspects of our activities. The Chinese legal system is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value. Since 1979, Chinese legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China. Because these laws and regulations are relatively new, and because of the limited volume of published decisions and their nonbinding nature, the interpretation and enforcement of these laws and regulations are uncertain. In addition, the Chinese legal system is based in part on government policies and internal rules that may have retroactive effect and, in some cases, are not published at all. As a result, we may not be aware of any alleged violation of these policies and rules until after the alleged violation has occurred. Any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention.

We are susceptible to interest rate variations.

We use issuances of debt and bank borrowings as a source of funding. At December 31, 2022, $2.3 billion and €1.3 billion of our senior interest bearing debt, which represented 37% of our senior interest bearing debt, bore interest at variable rates, at a spread over the LIBOR for our U.S. dollar denominated debt and at a spread over the Euro Interbank Offered Rate, or EURIBOR, for our euro denominated debt. Any increase in interest rates payable by us, which could be adversely affected by, among other things, our inability to meet certain financial ratios, would increase our interest expense and reduce our cash flow, which could materially adversely affect our financial condition and results of operations. See “—Risks Relating to Our Structure— The phasing out and ultimate replacement of LIBOR with an alternative reference rate and changes in the manner of calculating other reference rates may adversely impact the value of loans and other financial instruments we hold that are linked to LIBOR or other reference rates in ways that are difficult to predict and could adversely impact our financial condition and results of operations.” And see Item 11 of this Part I, “Quantitative and Qualitative Disclosures About Market Risk—Interest Rate Risk.”

A significant portion of our business is conducted in currencies other than our reporting currency, the euro. In 2022, €4,416.9 million, or 73%, of our net revenue of €6,064.0 million was denominated in U.S. dollars. We are also exposed to currency fluctuations with respect to other currencies, such as the British pound, the Brazilian real, the Canadian dollar and the Argentine, Mexican and Chilean pesos. Currency fluctuations among the euro, the U.S. dollar and the other currencies in which we do business result in foreign currency translation gains or losses that could be significant.

We are also exposed to risk based on the payment of U.S. dollar denominated indebtedness. At December 31, 2022, we had approximately $2,313.9 million of U.S. dollar denominated senior debt. See Item 5 of this Part I, “Operating and Financial Review and Prospects—B. Liquidity and Capital Resources” and Item 11 of this Part I, “Quantitative and Qualitative Disclosures About Market Risk—Currency Risk.”

Table of Contents

If our main facilities were to suffer a crippling accident, or if a force majeure event materially affected our ability to operate and produce saleable products, a substantial part of our manufacturing capacity could be shut down for an extended period.

A substantial portion of our revenue is derived from plasma fractionation or products manufactured at our main facilities, including the facilities located in San Diego, Clayton, Emeryville, Los Angeles and Parets. In addition, a substantial portion of our plasma supply is stored at facilities in City of Industry, California, as well as at our Clayton and Parets facilities. If any of our main facilities, including the ones mentioned above, were to be impacted by an accident or a force majeure event such as an earthquake, major fire, storm or explosion, major equipment failure or power failure lasting beyond the capabilities of our backup generators, our revenue would be materially adversely affected. In this situation, our manufacturing capacity could be shut down for an extended period and we could experience a loss of raw materials, work-in-process or finished goods inventory. In addition, extreme weather conditions may become more severe and frequent as the temperature rises due to the effects of climate change, and such extreme weather conditions could heighten the risks and uncertainties noted above.

Other force majeure events such as terrorist acts, influenza pandemic or similar events could also impede our ability to operate our business. In addition, in the event of the reconstruction of our Clayton, Los Angeles or Parets facilities or our plasma storage facilities, gaining the regulatory approval for such new facilities and the replenishment of raw material plasma could be time consuming. During this period, we would be unable to manufacture all of our products at other plants due to the need for FDA and foreign regulatory authority inspection and certification of such facilities and processes.

Our property damage and business interruption insurance may be insufficient to mitigate the losses from any such accident or force majeure event. We may also be unable to recover the value of the lost plasma or work-in-process inventories, as well as the sales opportunities from the products we would be unable to produce.

If we experience equipment difficulties or if the suppliers of our equipment or disposable goods fail to deliver key product components or supplies in a timely manner, our manufacturing ability would be impaired and our product sales could suffer.

We depend on a limited number of companies that supply and maintain our equipment and provide supplies such as chromatography resins, filter media, glass and stoppers used in the manufacture of our products. If our equipment should malfunction, the repair or replacement of the machinery may require substantial time and cost, which could disrupt our production and other operations. Our plasma collection centers rely on disposable goods supplied by third parties and information technology systems hosted by third parties. Our plasma collection centers cannot operate without an uninterrupted supply of these disposable goods and the operation of these systems. Alternative sources for key component parts or disposable goods may not be immediately available. And while we have experienced periodic outages of these systems, a material outage would affect our ability to operate our collection centers.

Any new equipment or change in supplied materials may require revalidation by us or review and approval by the FDA or foreign regulatory authorities, including the EMA, which may be time-consuming and require additional capital and other resources. We may not be able to find an adequate alternative supplier in a reasonable time period, or on commercially acceptable terms, if at all. As a result, shipments of affected products may be limited or delayed. Our inability to obtain our key source supplies for the collection of plasma and manufacture of products may require us to delay shipments of products, harm customer relationships and force us to curtail operations.

If our shipping or distribution channels were to become inaccessible due to a crippling accident, a pandemic, an act of terrorism, a strike, earthquake, major fire or storm, or any other force majeure event, our supply, production and distribution processes could be disrupted.

Not all shipping or distribution channels are equipped to transport plasma. If any of our shipping or distribution channels becomes inaccessible due to a crippling accident, a pandemic, an act of terrorism, a strike, earthquake, major fire or storm or any other force majeure event, we may experience disruptions in our continued supply of plasma and other raw materials, delays in our production process or a reduction in our ability to distribute our products directly to our customers.

Table of Contents

We rely in large part on third parties for the sale, distribution and delivery of our products.

In the United States, we regularly enter into distribution, supply and fulfillment contracts with group purchasing organizations (“GPOs”), home care companies, alternate infusion sites, hospital groups and others. We are highly dependent on these agreements for the successful sale, distribution and delivery of our products. For example, we rely principally on GPOs and on our distributors to sell our immunoglobulin products. If such parties breach, terminate or otherwise fail to perform under these contracts, our ability to effectively distribute our products will be impaired and our business may be materially and adversely affected. In addition, through circumstances outside of our control, such as general economic decline, market saturation or increased competition, we may be unable to successfully renegotiate our contracts or secure terms which are as favorable to us. Furthermore, we rely in certain countries on distributors for sales of our products. Disagreements or difficulties with our distributors supporting our export business could result in a loss of sales.

We rely on the services of third parties for the manufacture of certain products.

We have rights of sale and distribution for several different products, including Tavleese^® in the European market. However, for many of these products we rely upon supply from third parties. To the extent such third parties are unable to properly and timely manufacture and deliver the necessary products and services in Europe, our business could be materially affected.

We may not be able to commercialize products in development.

Before obtaining regulatory approval for the sale of our product candidates or for the marketing of existing products for new indicated uses, we must conduct, at our own expense, extensive preclinical tests to demonstrate the safety of our product candidates in animals and clinical trials to demonstrate the safety and efficacy of our product candidates in humans. Preclinical and clinical testing is expensive, is difficult to design and implement, can take many years to complete and is uncertain as to outcome. A failure of one or more of our clinical trials can occur at any stage of testing. We may experience numerous unforeseen events during, or as a result of, preclinical testing and the clinical trial process that could delay or prevent our ability to receive regulatory approval or commercialize our product candidates, including, without limitation, the following:

regulators or institutional review boards (“IRBs”) may not authorize us to commence a clinical trial or conduct a clinical trial within a country or at a prospective trial site;

the regulatory requirements for product approvals may not be explicit, may evolve over time and may diverge by jurisdiction;

our preclinical tests or clinical trials may produce negative or inconclusive results, and we may decide, or we may be required by regulators, to conduct additional preclinical testing or clinical trials or to abandon projects that we had expected to be promising;

the number of patients required for our clinical trials may be larger than we anticipate, enrollment in our clinical trials may be slower than we anticipate or participants may withdraw from our clinical trials at higher rates than we anticipate, any of which would result in significant delays;

our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner;

we may be forced to suspend or terminate our clinical trials if the participants are being exposed to unacceptable health risks or if any participant experiences an unexpected serious adverse event;

regulators or IRBs may require that we hold, suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements;

Table of Contents

undetected or concealed fraudulent activity by a clinical researcher, if discovered, could preclude the submission of clinical data prepared by that researcher, lead to the suspension or substantive scientific review of one or more of our marketing applications by regulatory agencies and result in the recall of any approved product distributed pursuant to data determined to be fraudulent;

the cost of our clinical trials may be greater than we anticipate;

the supply or quality of our product candidates or other materials necessary to conduct our clinical trials may be insufficient or inadequate, as we currently do not have any agreements with third-party manufacturers for the long-term commercial supply of any of our product candidates;

an audit of preclinical or clinical studies by the FDA or other regulatory authorities may reveal noncompliance with applicable regulations, which could lead to disqualification of the results and the need to perform additional studies;

the effects of our product candidates may not achieve the desired clinical benefits or may cause undesirable side effects, or the product candidates may have other unexpected characteristics; and

our clinical trials, or the ability of regulatory agencies to review the results of our clinical trials, may be delayed as a result of the COVID-19 pandemic.

If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete our clinical trials or other testing, if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we may be delayed in or unable to obtain marketing approval or reimbursement for our product candidates, or be unable to obtain approval for indications that are not as broad as intended or have the product removed from the market after obtaining marketing approval.

Our product development costs will also increase if we experience delays in testing or approvals. We do not know whether any preclinical tests or clinical trials will begin as planned, will need to be restructured or will be completed on schedule, if at all. Significant preclinical or clinical trial delays could also shorten the patent protection period during which we may have the exclusive right to commercialize our product candidates or could allow our competitors to bring products to market before we do, impairing our ability to commercialize our products or product candidates.

Even if preclinical trials are successful, we still may be unable to commercialize a product due to difficulties in obtaining regulatory approval for its engineering process or problems in scaling that process to commercial production. Additionally, if produced, a product may not achieve an adequate level of market acceptance by physicians, patients, healthcare payors and others in the medical community to be profitable. The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, some of which are beyond our control, including the following:

the prevalence and severity of any side effect;

the efficacy and potential advantages over alternative treatments;

the ability to offer our product candidates for sale at competitive prices;

relative convenience and ease of administration;

the willingness of physicians to prescribe new therapies and of the target patient population to try such therapies;

the strength of marketing and distribution support; and

sufficient third-party coverage or reimbursement.

Therefore, we cannot guarantee that any products we may seek to develop will ever be successfully commercialized, and to the extent they are not successfully commercialized, such products could involve significant expense with no corresponding revenue.

Table of Contents

Our operations are highly dependent on our information technology systems, including internet-based systems, which may be vulnerable to breakdown, cybersecurity incidents, wrongful intrusions, data breaches, malware, ransomware, and malicious attack. In addition, information security risks have generally increased in recent years, increasing our systems’ potential vulnerability, such as to data security breaches or cyber attack, whether by employees or others, which may expose sensitive data to unauthorized persons. Such data security breaches could lead to the loss of trade secrets or other intellectual property, or could lead to the public exposure of personal information (including sensitive personal information) of our employees, customers, plasma donors and others. Data security breaches may also adversely impact the conduct of scientific research and clinical trials, including the submission of research results to support marketing authorizations.

Additionally, our information technology systems utilize certain third party service organizations that manage sensitive data, such as personal medical information regarding plasma donors, and our business may be adversely affected if these third party service organizations are subject to data security breaches. We may continue to incur significant expenses to comply with existing privacy and security standards and protocols imposed by law, regulation, industry standards or contractual obligations.

Federal, state and foreign governments continue to adopt new, or modify existing laws and regulations addressing data privacy and the collection, processing, storage, transfer and use of data. This includes, for example, the E.U.’s regulation, the General Data Protection Regulation (“GDPR”) and the new California Consumer Protection Act (“CCPA”), effective on January 1, 2020. In our efforts to meet the GDPR, CCPA, U.S. Health Insurance Portability and Accountability Act of 1996, as amended, and implementing regulations (“HIPAA”) and other data privacy regulations, we have made and continue to make certain operational changes to our business practices. Other governmental authorities throughout the U.S. and around the world are considering similar types of legislative and regulatory proposals concerning data protection. These privacy, security and data protection laws and regulations could impose increased business operational costs, require changes to our business, require notification to customers or workers of a security breach, or restrict our use or storage of personal information.

For example, health information laws and regulations, such as regulations under HIPAA and potential revisions thereto, as proposed in December 2020, include requirements to implement various recordkeeping, operational, notice and other practices intended to safeguard that information, limit its use to allowed purposes and notify affected individuals in the event of privacy and security breaches, establish standards regarding electronic health data transmissions and set rules for specific electronic transactions, such as transactions involving claims submissions to third party payers. Failure to comply with HIPAA and similar state laws could expose us to breach of contract claims, substantial fines, penalties and other liabilities and expenses, costs for remediation and harm to our reputation. Additionally, a U.S. federal privacy bill introduced to the U.S. House of Representatives on July 20, 2022 (and reported by the applicable committee on December 30, 2022), would establish new requirements for how companies handle personal data, including information that identifies or is reasonably linked to an individual, such as our consumers. If this bill becomes law, we may be required to implement certain security practices to protect and secure personal data against unauthorized access, and we may be subject to further requirements for complying with this requirement if any applicable agency issues related regulations.

Table of Contents

In the United States and specifically in California, for example, the CCPA generally requires companies, such as us, to institute additional protections regarding the collection, use and disclosure of certain personal information of California residents. The California Attorney General announced the finalization of initial CCPA regulations on August 14, 2020, and two new sets of modifications to CCPA regulations have since been proposed and have completed the required public comment process, although they are still subject to internal review and finalization by the California Attorney General, the timing of which is uncertain. In addition to providing for enforcement by the California Attorney General, the CCPA also provides for a private right of action. Entities in violation of the CCPA may be liable for civil penalties. Significantly, in November 2020 California enacted the California Privacy Rights Act (“CPRA”), effective January 1, 2023, which amends the CCPA. The CPRA, among other substantive measures, expands the CCPA’s private right of action, increases consumers’ control over personal information, imposes new compliance obligations on businesses, and enacts new exceptions that may apply to our businesses. Notably, the CPRA created the California Privacy Protection Agency Board, which is responsible for enforcing the CCPA and CPRA, and which approved final CPRA regulations in February 2023. Other States in the United States either have or, presumably, will adopt similar laws.

The European Parliament and the Council of the European Union adopted the GDPR, which increased privacy rights for individuals in Europe, extended the scope of responsibilities for data controllers and data processors and imposed increased requirements and potential penalties on companies offering goods or services to individuals who are located in Europe or monitoring the behavior of such individuals (including by companies based outside of Europe). Noncompliance can result in penalties of up to the greater of €20 million, or 4% of global company revenues.

Our efforts to implement programs and controls that comply with the GDPR, CCPA, HIPAA and other data protection requirements are likely to impose additional costs on us, and we cannot predict whether the interpretations of the requirements, or changes in our practices in response to new requirements or interpretations of the requirements, could have a material adverse effect on our business.

Our success depends in large part on our ability to obtain and maintain protection in the United States and other countries of the intellectual property relating to or incorporated into our technology and products.

Our success depends in large part on our ability to obtain and maintain protection in the United States and other countries for the intellectual property covering or incorporated into our technology and products, especially intellectual property related to our purification processes. The patent landscape in the field of biotechnology and pharmaceuticals generally is highly uncertain and involves complex legal and scientific questions. We may not be able to obtain additional issued patents relating to our technology or products. Even if patents are issued to us or to our licensors, they may be challenged, narrowed, invalidated, held to be unenforceable or circumvented, which could limit our ability to stop competitors from marketing similar products or limit the length of time our products have patent protection. Additionally, most of our patents relate to the processes we use to produce our products, not to the products themselves. In many cases, the plasma-derived products we produce or develop in the future will not, in and of themselves, be patentable. Since our patents relate to processes, if a competitor is able to design and utilize a process that does not rely on our protected intellectual property, such competitor could sell a plasma-derived or other product similar to one we developed or sell.

Our patents also may not afford us protection against competitors with similar technology. Because patent applications in the United States and many other jurisdictions are typically not published until 18 months after their filing, if at all, and because publications of discoveries in the scientific literature often lag behind actual discoveries, neither we nor our licensors can be certain that we or they were the first to make the inventions claimed in our or their issued patents or pending patent applications, or that we or they were the first to file for protection of the inventions set forth in such patent applications. If a third party has also filed a U.S. patent application covering our product candidates or a similar invention, we may be required to participate in an adversarial proceeding, known as an “interference proceeding,” declared by the U.S. Patent and Trademark Office to determine priority of invention in the United States. The costs of these proceedings could be substantial and our efforts in them could be unsuccessful, resulting in a loss of our anticipated U.S. patent position.

Table of Contents

Our patents expire at various dates. Our pending and future patent applications may not issue as patents or, if issued, may not issue in a form that will provide us with any competitive advantage. Even if issued, we cannot guarantee that: any of our present or future patents or patent claims or other intellectual property rights will not lapse or be invalidated, circumvented, challenged or abandoned; our intellectual property rights will provide competitive advantages; our ability to assert our intellectual property rights against potential competitors or to settle current or future disputes will not be limited by our agreements with third parties; any of our pending or future patent applications will be issued or have the coverage originally sought; our intellectual property rights will be enforced in jurisdictions where competition may be intense or where legal protection may be weak; or we will not lose the ability to assert our intellectual property rights against, or to license our technology to, others and collect royalties or other payments. In addition, our competitors or others may design around our protected patents or technologies.

Effective protection of our intellectual property rights may be unavailable, limited or not applied for in some countries. Changes in patent laws or their interpretation in the United States and other countries could also diminish the value of our intellectual property or narrow the scope of our patent protection. In addition, the legal systems of certain countries do not favor the aggressive enforcement of patents, and the laws of foreign countries may not protect our rights to the same extent as the laws of the United States. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. In order to preserve and enforce our patent and other intellectual property rights, we may need to make claims or file lawsuits against third parties. Such lawsuits could entail significant costs to us and divert our management’s attention from developing and commercializing our products.

We, like other companies in the pharmaceutical industry, may become aware of counterfeit versions of our products becoming available domestically and abroad. Counterfeit products may use different and possibly contaminated sources of plasma and other raw materials, and the purification process involved in the manufacture of counterfeit products may raise additional safety concerns, over which we have no control. Any reported adverse events involving counterfeit products that purport to be our products could harm our reputation and the sale of our products in particular and consumer willingness to use plasma-derived therapeutics in general.

Unauthorized use of our intellectual property may have occurred or may occur in the future. Although we have taken steps to minimize this risk, any failure to identify unauthorized use and otherwise adequately protect our intellectual property would adversely affect our business. For example, any unauthorized use of our trademarks could harm our reputation or commercial interests. Moreover, if we are required to commence litigation related to unauthorized use, whether as a plaintiff or defendant, such litigation would be time consuming, force us to incur significant costs and divert our attention and the efforts of our management and other employees, which could, in turn, result in lower revenue and higher expenses.

In addition to patented technology, we rely on our unpatented proprietary technology, trade secrets, processes and know-how.

We generally seek to protect proprietary information by entering into confidentiality agreements with our employees, consultants, scientific advisors and third parties. These agreements may not effectively prevent disclosure of confidential information, may be limited as to their term and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, our trade secrets may otherwise become known or be independently developed by our competitors or other third parties. To the extent that our employees, consultants or contractors use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. Costly and time-consuming litigation could be necessary to determine and enforce the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position. We also rely on contractual protections with our customers, suppliers, distributors, employees and consultants and implement security measures designed to protect our trade secrets. We cannot assure you that these contractual protections and security measures will not be breached, that we will have adequate remedies for any such breach or that our suppliers, employees or consultants will not assert rights to intellectual property arising out of such contracts.

Since we rely on trade secrets and nondisclosure agreements, in addition to patents, to protect some of our intellectual property, there is a risk that third parties may obtain and improperly utilize our proprietary information to our competitive disadvantage. We may not be able to detect the unauthorized use of such information, prevent such use or take appropriate and timely steps to enforce our intellectual property rights.

Table of Contents

We may infringe or be alleged to infringe intellectual property rights of third parties.

Our products or product candidates may infringe or be accused of infringing one or more claims of an issued patent or may fall within the scope of one or more claims in a published patent application that may be subsequently issued and to which we do not hold a license or other rights. Third parties may own or control these patents or patent applications in the United States and/or abroad. These third parties could bring claims against us or our collaborators that would cause us to incur substantial expenses and, if successful against us, could cause us to pay substantial damages. Further, if a patent infringement suit were brought against us or our collaborators, we or they could be forced to stop or delay research, development, manufacturing or sales of the product or product candidate that is the subject of the suit.

If we are found to be infringing on the patent rights of a third party, or in order to avoid potential claims, we or our collaborators may choose or be required to seek a license from a third party and be required to pay license fees or royalties or both. These licenses may not be available on acceptable terms, or at all. Even if we or our collaborators were able to obtain a license, the rights may be nonexclusive, which could result in our competitors gaining access to the same intellectual property. Ultimately, we could be prevented from commercializing a product, or be forced to cease some aspect of our business operations, if, as a result of actual or threatened patent infringement claims, we or our collaborators are unable to enter into licenses on acceptable terms.

There has been substantial litigation and other proceedings regarding patent and other intellectual property rights in the pharmaceutical and biotechnology industries. In addition to infringement claims against us, we may become a party to other patent litigation and other proceedings, including interference proceedings declared by the U.S. Patent and Trademark Office and opposition proceedings in the European Patent Office, regarding intellectual property rights with respect to our products. The cost to us of any patent litigation or other proceeding, even if resolved in our favor, could be substantial. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace. Patent litigation and other proceedings may also absorb significant management time.

Many of our employees were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. We take steps to ensure that our employees do not use the proprietary information or know-how of others in their work for us. We may, however, be subject to claims that we or these employees have inadvertently or otherwise used or disclosed intellectual property, trade secrets or other proprietary information of any such employee’s former employer. Litigation may be necessary to defend against these claims and, even if we are successful in defending ourselves, could result in substantial costs to us or be distracting to our management. If we fail to defend any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel.

We have in-licensed certain patent rights and co-own certain patent rights with third parties.

Our rights in certain intellectual property that we have in-licensed or co-own with third parties and the value therein may depend on our third party licensors’ or co-owners’, as applicable, performance under our intellectual property agreements with them. If one of these third parties is unable to, or does not, enforce their own rights in such intellectual property or perform under our agreements with them, it could affect our ability to effectively compete in the marketplace and operate our business.

Our in-license agreements for certain patent rights may impose payment and/or other material obligations on us as a licensee. Although we are currently in compliance with all of our material obligations under these licenses, if we were to breach any such obligations, our counterparty licensors may be entitled to terminate the licenses. Such termination may restrict, delay or eliminate our ability to develop and commercialize our products, which could adversely affect our business. We cannot guarantee that the third-party patents and technology we license will not be licensed to our competitors. In the future, we may need to obtain additional licenses, renew existing license agreements or otherwise replace existing technology. We are unable to predict whether these license agreements can be obtained or renewed or whether the technology can be replaced on acceptable terms, or at all.

Table of Contents

We may not realize the expected benefits from the entry into new or amended contracts, cost-savings and business improvement initiatives.

We recently acquired plasma collection centers from GC Pharma (in 2020), BPL (in 2021) and Kedrion (in 2021), as well as entered into a plasma supply agreement with Haema AG in Hungary (in 2021) and through the acquisition of Biotest AG (in 2022). There can be no assurance we will be successful with this plasma acquisition strategy or that we will realize all of the benefits we expect from such new centers. Moreover, we have introduced and instituted a cost savings plan for 2023 to reduce headcount, become more efficient in the plasma procurement process and close certain underperforming plasma centers, among other strategies. See Item 4 of this Part I “A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Operational Improvement Plan.” Our cost savings and business improvement initiatives could result in unexpected charges and expenses that negatively impact our financial results and we could fail to achieve the desired efficiencies and estimated cost savings. In addition, if we are not able to effectively implement these initiatives, or if they fail to operate as intended, our financial results could be adversely affected. Additionally, these types of initiatives could yield unintended consequences such as distraction of management and employees, business disruption, an inability to attract or retain key personnel, which could negatively affect our business or financial condition and results of operations. If we are not able to effectively develop, implement and manage our cost savings or business improvement initiatives (including our acquisitions), we may experience operational difficulties and increased costs, which may adversely affect our results of operations.

Climate change and increased risk of major natural disasters may adversely affect our business.

Climate change is already causing extreme heat and poor air quality in some areas, which threaten to exacerbate pre-existing health conditions such as respiratory diseases. In addition, an increase in temperature and humidity may cause a proliferation of insects that carry vector-borne diseases, including dengue fever and malaria. Ultimately, climate change could undermine decades of progress in improving human health at a time when antimicrobial resistance is also rising.

We are exposed to climate risks such as physical risks (e.g., heat, water scarcity, sea level rise, flooding from severe weather events) and transition risks (e.g., regulatory frameworks, carbon pricing, cost of and access to capital), which could vary in magnitude and impact country by country. For example, some of our production facilities that depend on the availability of significant water supplies are located in areas where water is increasingly scarce. Other facilities are located in places that, because of increasingly violent weather events, sea level rise, or both, are increasingly at risk of substantial flooding. In regions where this risk is present, it impacts not only our own operations but also our distribution supply chain. Such events may result in increased costs, business interruptions, destruction of facilities, loss of life, and disruption to healthcare systems that patients use to access our medicines.

Climate change may trigger the adoption of new regulatory requirements across the globe. Such legislation could include increased requirements to invest in technology to reduce energy use, water use and greenhouse gas emissions, beyond what we expect to invest in our existing plans. Item 4 of this Part I, “Information on the Company—B. Business Overview—Climate Change.” In addition, legislation could include carbon pricing, climate risk disclosure mandates, and changes in zoning or building codes to increase climate resilience. The combined impact of these transition risks could increase our direct operating costs and result in the same impact across our supply chain.

Risks Relating to the Healthcare Industry

United States Healthcare Reform may adversely affect our business.

The United States Patient Protection and Affordable Care Act and the companion Healthcare and Education Reconciliation Act, each enacted in March 2010, as amended (collectively, the “ACA”), increased federal oversight of private health insurance plans and included a number of provisions designed to reduce Medicare expenditures and the cost of health care generally, to reduce fraud and abuse, and to provide access to increased health coverage. While the ACA has materially expanded the number of individuals in the United States with health insurance, it has faced ongoing legal challenges, including litigation seeking to invalidate some of or all of the law or the manner in which it has been interpreted.

Table of Contents

There are uncertainties due to federal legislative and administrative efforts to repeal (under the previous U.S. presidential administration), substantially change, replace or invalidate portions or all of the ACA. Additionally, federal litigation related to the ACA is proceeding in several courts and could have a significant impact on the United States healthcare industry. The U.S. Supreme Court, in upholding the constitutionality of the ACA and its individual state mandate provision in 2012, simultaneously limited ACA provisions requiring Medicaid expansion, making such expansion a state-by-state decision. In 2017, the U.S. Congress effectively repealed the ACA’s individual mandate provision by eliminating the financial penalty for non-compliance. In the most recent ACA litigation, a federal appeals court found the individual mandate to be unconstitutional, and returned the case to a lower federal court for consideration of whether the remainder of the ACA could survive the excision of the individual mandate. On June 17, 2021, the United States Supreme Court held that plaintiffs do not have standing to challenge the constitutionality of the individual mandate. Also, a federal district court held in 2022 that plaintiffs have standing to challenge the preventive services guarantee of the ACA, however, it is uncertain whether the litigation reaches a federal appeals court or the U.S. Supreme Court. It is also uncertain whether there will be additional challenges to the ACA. Any future legislation, guidance, rules or regulations and/or executive orders that materially alter the healthcare industry could have a significant impact on our operations. The uncertain status of the ACA affects our ability to plan, and its repeal without adequate replacement could have a material adverse effect on our United States operations.

Government pressures and constraints on reimbursement may adversely affect our business.

We engage in various manufacturing, processing, marketing and sales activities pertaining to pharmaceutical products in a number of jurisdictions around the world. These activities subject us to several governmental regulations mandating multiple types of controls over pricing and general operations in the various countries in which we operate. The growth of overall healthcare costs as a percentage of gross domestic product in many countries means that governments and payers are under intense pressure to control spending even more tightly.

In the United States, which is our main market, implementation of the ACA and trends in recent years in the healthcare industry have caused significant changes including a shift towards managed or value-based care, collective purchasing agreements, consolidation in office-based healthcare providers, and other cost-saving, revenue and payment reduction measures with respect to, for example, several government healthcare programs that cover our products, including Medicaid, Medicare Parts B, C and D and the 340B Program. These trends could have a material adverse impact on our financial performance. For more details of these measures see Item 4 of this Part I, “Information on the Company—E. Regulatory Matters—Pharmaceutical Pricing and Reimbursement.” Global emphasis on healthcare cost containment exerts significant pressures on the pricing of our products and on our ability to obtain and maintain reimbursement rates to cover our products, which may adversely affect our business.

The availability of federal funds to pay for our products under Medicaid and Medicare Part B programs requires that we extend discounts under the 340B Program, and changes to this program under the ACA could adversely affect our financial performance. The 340B Program extends discounts to a variety of community health clinics and other entities that receive health services grants from the 340B Program, as well as hospitals that serve a disproportionate share of certain low income individuals, and the ACA expanded the number of qualified 340B entities eligible to purchase products for outpatient use, adding certain cancer centers, children’s hospitals, critical access hospitals and rural referral centers. The 340B Program price, or ceiling price, cannot exceed the average manufacturer price (“AMP”) (as reported to the U.S. Centers for Medicare & Medicaid Services (“CMS”) under the Medicaid drug rebate program) less the Medicaid unit rebate amount. We have entered into a pharmaceutical pricing agreement (“PPA”), with the government in which we have agreed to participate in the 340B Program by charging eligible entities no more than the ceiling price for drugs intended for outpatient use. Evolving requirements with respect to this program continue to be issued by the Health Resources and Services Administration (“HRSA”) of the United States Department of Health and Human Services (“HHS”), the federal agency responsible for oversight of the 340B Program, which creates uncertainty. Certain aspects of the 340B Program relating to manufacturers’ 340B pricing restrictions for prescriptions filled at contract pharmacy locations continue to be challenged in federal district courts, which adds to such uncertainty. In addition, in 2022, the Inflation Reduction Act of 2022 was signed into law and has the potential to affect the ultimate 340B price calculated for eligible covered entities. Within this context, we expect the healthcare industry will continue to be subject to increasing pricing and cost containment pressures in 2023 and beyond. These pricing and cost containment pressures may impact the reimbursement rates for our products and have an adverse effect on our business. We believe that we meet the requirements of the 340B Program, and are continuing to review and monitor these and other developments affecting the 340B Program.

Table of Contents

Continuing efforts of certain regulatory and legislative bodies, as well as the United States Congress, are focused on pricing and reimbursement. The outcome of these continuing discussions remains uncertain, but may have a potential negative impact on our business.

Impact of government regulations over product development and regulatory approvals may adversely affect our business.

We develop and manufacture pharmaceutical products in a number of jurisdictions around the world. These activities subject us to several governmental regulations mandating specific governmental approvals that are necessary for us to develop our products in the various countries in which we operate. Obtaining market approval for our products is a lengthy, costly and complex regulatory process that requires intensive preclinical and clinical data, and the approval process can vary significantly depending on the regulatory authority of each jurisdiction. Relevant health authorities may, at the time of the filing of the application for a marketing authorization, or later during their review, impose requirements that can evolve over time, including requiring additional clinical trials, and such authorities may delay or refuse to grant approval.

Even where we have obtained marketing approval for a product in one or more major markets, we may need to invest significant time and resources in applying for approval in other markets, and there is no assurance that we will be able to obtain such approval. In recent years, health authorities have become increasingly focused on product safety and on the risk/benefit profile of pharmaceutical products, which could lead to more burdensome and costly approval processes and negatively affect our ability to obtain regulatory approval for products under development. For example, the FDA and the EMA have been implementing strict requirements for approval, particularly in terms of the volume of data needed to demonstrate a product’s efficacy and safety.

In the United States, our main market, even with the changes in the ACA to accelerate the regulatory process for certain products, including biosimilars, it is still a lengthy, costly and complex regulatory process. The ACA introduced a new abbreviated regulatory approval pathway for biological products found to be “biosimilar” to or “interchangeable” with a biological “reference product” previously licensed under a Biologics License Applications (“BLA”). This abbreviated approval pathway is intended to permit a biosimilar product to come to market more quickly and less expensively by relying to some extent on the data generated by the reference product’s sponsor, and the FDA’s previous review and approval of the reference product.

The law provides that no biosimilar application may be accepted for FDA review until four years after the date the reference product was first licensed by the FDA, and that the FDA may not make approval of an application effective until 12 years after the reference product was first licensed. The law also includes an extensive process for the innovator biologic and biosimilar manufacturer to litigate patent infringement, validity, and enforceability, which could increase costs of protecting our reference products. Once approved, biosimilars likely would compete with, and in some circumstances may be deemed under applicable laws to be “interchangeable with,” the previously approved reference product. The extent to which a biosimilar product, once approved, will be substituted for any of our products, in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing. The FDA is actively seeking to encourage the entry of biosimilars into the marketplace, including issuing, in July 2018, its Biosimilar Action Plan, intended to enhance the speed of the biosimilar development and approval processes. We expect in the future to face greater competition from biosimilar products, including a possible increase in patent challenges, all of which could adversely affect our financial performance.

Regarding access to our products, the ACA established and provided significant funding for a Patient-Centered Outcomes Research Institute to coordinate and fund Comparative Effectiveness Research, as those terms are defined in the ACA. While the stated intent of Comparative Effectiveness Research is to develop information to guide providers to the most efficacious therapies, outcomes of Comparative Effectiveness Research could influence the reimbursement or coverage for therapies that are determined to be less cost effective than others. Should any of our products be determined to be less cost effective than alternative therapies, the levels of reimbursement for these products, or the willingness to reimburse at all, could be impacted, which could materially impact our financial results. In connection with the FDA’s authority to ensure the development of safe and effective biosimilars, in September 2022, the FDA User Fee Reauthorization Act of 2022 was signed into law, which allows the FDA to assess and collect fees for biosimilars for a five-year period through 2027. While the fee rates charged to biosimilar program sponsors are intended to expedite the process for reviews of biosimilar applications, such fees could be passed onto manufacturers and, thus, could also impact our financial results.

Table of Contents

Failure to comply with laws and regulations governing the sales and marketing of our products or an adverse decision in lawsuits may result in adverse consequences to us.

We engage in various marketing, promotional and educational activities pertaining to, as well as the sale of, pharmaceutical products in a number of jurisdictions around the world. The promotion, marketing and sale of pharmaceutical products and medical devices is highly regulated and the sales and marketing practices of market participants such as us have been subject to increasing supervision by governmental authorities around the world, and we believe that this trend will continue.

For example, the laws governing our conduct in the United States are enforceable by criminal, civil and administrative penalties. Violations of laws such as the Federal Food, Drug and Cosmetic Act (“FDCA”), the Federal False Claims Act (“FCA”), the Public Health Service Act (“PHS Act”) or provisions of the U.S. Social Security Act known as the “Anti-Kickback Law” and the “Civil Monetary Penalties Law,” or any regulations promulgated under their authority, may result in jail sentences, fines or exclusion from federal and state programs, as may be determined by Medicare, Medicaid, the Department of Defense, other regulatory authorities and the courts. There can be no assurance that our activities will not come under the scrutiny of regulators and other government authorities or that our practices will not be found to violate applicable laws, rules and regulations or prompt lawsuits by private citizen “relators” under federal or state false claims laws. For a description of fraud and abuse laws see Item 4 of this Part I, “Information on the Company—E. Regulatory Matters—Government Regulation—United States Government Regulation—Anti-fraud and Abuse Regulation.”

Failure to comply with fraud and abuse laws and regulations could also result in other significant civil and criminal penalties and costs, including the loss of licenses and the inability to participate in federal and state health care programs, and could have a material adverse effect on our business. In addition, these measures may be interpreted or applied by a prosecutorial, regulatory or judicial authority in a manner that could require us to make changes in our operations or incur substantial defense and settlement expenses. The fraud and abuse laws and regulations have been subject to heightened enforcement activity over the past few years, and significant enforcement activity has been the result of “relators” who serve as whistleblowers by filing complaints in the name of the United States (and if applicable, particular states) under applicable false claims laws, and who may receive up to 30% of total government recoveries. Even unsuccessful challenges by regulatory authorities or private relators could result in reputational harm and the incurring of substantial costs. Further, many of these laws are vague or indefinite and have not been interpreted by the courts, and have been subject to frequent modification and varied interpretation by prosecutorial and regulatory authorities, increasing the risk of noncompliance. Most states have adopted similar state false claims laws, and these state laws have their own penalties which may be in addition to FCA penalties, as well as other fraud and abuse laws. While we believe that we are substantially compliant with applicable fraud and abuse laws and regulations, and have adequate compliance programs and controls in place to ensure substantial compliance, we cannot predict whether changes in applicable law, or interpretation of laws, or changes in our services or marketing practices in response to changes in applicable law or interpretation of laws, could have a material adverse effect on our business.

Failure to satisfy requirements under the FDCA can also result in penalties, as well as requirements to enter into consent decrees or orders that prescribe allowable corporate conduct. In this regard, our Los Angeles facility was previously managed pursuant to a consent decree that was entered into in February 1998 based on action by the FDA and the U.S. Department of Justice (the “DOJ”), addressing FDCA violations committed by the former owner of the facility, Alpha Therapeutic Corporation (“Alpha”). The consent decree provided for annual inspection of the plant by the FDA. On March 15, 2012, the United States District Court for the Central District of California entered an order vacating the consent decree on the Los Angeles facility.

Adverse consequences can also result from failure to comply with the requirements of the 340B Program under the PHS Act, which extends discounts to a variety of community health clinics and other entities that receive health services grants under the PHS Act. In early 2016, HRSA finalized a regulation regarding the 340B pricing methodology, providing guidelines for when civil monetary penalties may be issued for “knowing and intentional” manufacturer overcharges of 340B covered entities. Under this regulation, which became effective on January 1, 2019, manufacturers who overcharge could be subject to significant monetary penalties. Such findings could also result in negative publicity that could harm the manufacturer’s reputation or cause business disruption, penalties, or CMP. Under the rule, the CMP may be up to $5,000 for each instance of overcharging a covered entity. If we are ultimately required to change our sales or pricing practices with regard to the distribution of drugs under the 340B program, or if we were required to pay penalties under the applicable regulations, there would be an adverse effect on our revenues and profitability.

Table of Contents

In addition, companies in the United States, Canada and the European Union are generally restricted from promoting approved products for other indications that are not specifically approved by the competent regulatory authorities, nor can companies promote unapproved products. Improper promotion of unapproved drugs or devices or unapproved indications for a drug or device may subject us to warnings from, or enforcement action by, regulatory agencies, harm demand for our products, and subject us to civil and criminal sanctions. Further, sanctions under the FCA have recently been brought against companies accused of promoting off-label uses of drugs, because such promotion induces the use and subsequent claims for reimbursement under Medicare and other federal programs. The ACA significantly strengthened provisions of the FCA, the anti-kickback provisions of Medicare and Medicaid and other health care antifraud provisions, leading to the possibility of greatly increased qui tam suits by relators for perceived violations. Industry data indicates that a significant portion of IVIG volume may be used to fill physician prescriptions for indications not approved by the FDA or similar regulatory authorities. Violations or allegations of violations of the foregoing restrictions could materially and adversely affect our business.

We are required to report detailed pricing information, net of included discounts, rebates and other concessions, to CMS for the purpose of calculating national reimbursement levels, certain federal prices and certain federal and state rebate obligations. We have established systems for collecting and reporting this data accurately to CMS and have instituted a compliance program to assure that the information collected is complete in all respects. If we report pricing information that is not accurate to the federal government, we could be subject to fines and other sanctions (including potential FCA liability) that could adversely affect our business.

To market and sell our products outside of the United States, we must obtain and maintain regulatory approvals and comply with regulatory requirements in such jurisdictions. The approval procedures vary among countries in complexity and timing. We may not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all, which would preclude us from commercializing products in those markets. In addition, some countries, particularly the countries of the European Union, regulate the pricing of prescription pharmaceuticals. In these countries, pricing discussions with governmental authorities can take considerable time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost effectiveness of our product candidate to other available therapies. Such trials may be time consuming and expensive and may not show an advantage in efficacy for our products. If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, in either the United States or the European Union, we could be adversely affected.

In the United States under a provision in the ACA, referred to as the Physician Payment Sunshine Act or Open Payments Program (the “PPS Act”), we are required to report and disclose payments or other transfers of value made to certain practitioners, such as physicians and teaching hospitals. CMS publishes information from these reports on a publicly available website, including amounts transferred and healthcare provider identities. Under the PPS Act we are required to collect and report detailed information regarding certain financial relationships we have with covered healthcare providers. The PPS Act preempts similar state reporting laws, although we or our subsidiaries may also be required to report under certain state transparency laws that address circumstances not covered by the PPS Act, and some of these state laws are also ambiguous. We are also subject to foreign regulations requiring transparency of certain interactions between suppliers and their customers. While we believe we have substantially compliant programs and controls in place to comply with these reporting requirements, we cannot assure you that regulations will not require us to take additional compliance steps. Our compliance with these rules imposes additional costs on us.

We also are subject to certain laws and regulations concerning the conduct of our foreign operations outside the United States, including the U.S. Foreign Corrupt Practices Act (“FCPA”) and other anti-bribery laws and related laws, and laws pertaining to the accuracy of our internal books and records, which have been the focus of increasing enforcement activity in recent years. Under the FCPA, the United States has increasingly focused on regulating the conduct by U.S. businesses occurring outside of the United States, generally prohibiting remuneration to foreign officials for the purpose of obtaining or retaining business. Also, in some countries we may rely on third parties for the marketing and distribution of our products, and these parties may lack sufficient internal compliance resources, and may operate in foreign markets involving substantial corruption. If our efforts to monitor these parties fail to detect potential wrongdoing, we could be held responsible for the noncompliance of these third parties with applicable laws and regulations, which may have a material adverse effect on our business.

Table of Contents

We could be adversely affected if other government or private third-party payors decrease or otherwise limit the amount, price, scope or other eligibility requirements for reimbursement for the purchasers of our products.

Certain of our products are subject to various cost-containment measures, such as government-imposed industry-wide price reductions, mandatory pricing systems, reference pricing systems, payors limiting access to treatments based on cost-benefit analyses, an increase in imports of drugs from lower-cost countries to higher-cost countries, shifting of the payment burden to patients through higher co-payments, limiting physicians’ ability to choose among competing medicines, mandatory substitution of generic drugs for the patented equivalent, and growing pressure on physicians to reduce the prescribing of patented prescription medicines. Such pressures could have a material adverse impact on our business, financial condition or results of operations, as well as on our reputation.

For example, certain pharmaceutical products, such as plasma derivative products, are subject to price controls in several of our principal markets, including Spain and countries within the European Union. In the United States, where pricing levels for our products are established by governmental payors and negotiated with private third-party payors, if the amount of reimbursement available for a product is reduced, it may cause groups or individuals dispensing the product to discontinue administration of the product, to administer lower doses, to substitute lower cost products or to seek additional price-related concessions. These actions could have a negative effect on our financial results, particularly in cases where our products command a premium price in the marketplace or where changes in reimbursement induce a shift in the location of treatment. The existence of direct and indirect price controls and pressures over our products has affected, and may continue to materially adversely affect, our ability to maintain or increase gross margins. In addition, the growth of overall healthcare costs and certain weak economic and financial environment in certain countries where we do business, as well as increased scrutiny over pharmaceutical pricing practices, such as in the United States, all enhance these pricing pressures.

In the United States pricing concerns include political and legislative efforts to increase transparency around healthcare and pharmaceutical drugs costs. Various pricing proposals have been introduced, some of which could take effect based on action by federal administrative agencies without the need for Congressional action. The uncertainty around these pricing proposals affects our ability to plan, and the proposals, if adopted, in whole or in part, could adversely affect our business. For example, on November 12, 2020, CMS issued final rules imposing price transparency requirements on hospitals and group health plans. Specifically, beginning in 2022, group health plans must post, on a public internet website, in-network provider negotiated rates (which include rates with device suppliers and manufacturers), historical out-of-network allowed amounts and drug pricing information. Our negotiated rates with various providers and group health plans could be published, which could impact our ability to independently negotiate sales contracts and rate agreements.

An increasing number of states in the United States have also proposed or passed legislation that seeks to directly or indirectly regulate pharmaceutical drug pricing, such as by requiring drug manufacturers to provide advance notice of certain price increases, publicly report pricing information or to place a maximum price ceiling on pharmaceutical products purchased by state agencies. State laws regulating pharmaceutical drug pricing may cause us to experience additional pricing pressures on our affected products, and could adversely affect our business.

Also, the intended use of a drug product by a physician can affect pricing. Physicians frequently prescribe legally available therapies for uses that are not described in the product’s labeling and that differ from those tested in clinical studies and that are approved by the FDA or similar regulatory authorities in other countries. These off-label uses are common across medical specialties, and physicians may believe such off-label uses constitute the preferred treatment or treatment of last resort for many patients in varied circumstances. In the United States, many off-label uses of drug products may be reimbursed by Medicare and other third-party payors, generally based on the payors’ determination that the intended use is for a medically accepted indication, for example, based on studies published in peer-reviewed medical journals or information contained in drug compendia, such as the United States Pharmacopeia-National Formulary. However, if reimbursement for off-label uses of products, including IVG, is reduced or eliminated by Medicare or other third-party payors, including those in the United States or the European Union, we could be adversely affected.

Proposed federal and state legislation have targeted drug pricing, including direct negotiations with manufacturers over price, reimbursement and discounts. Plasma protein therapeutics have been excluded from certain aspects of the several legislations; however, there is a continuing risk that our products may be subject to new pricing restrictions.

Table of Contents

We are subject to extensive government regulatory compliance and ethics oversight.

Our business is subject to extensive government regulation and oversight by the many countries in which we operate. We have enacted anticorruption, privacy, healthcare and corporate compliance policies and procedures that govern our business practices and those of our distributors and suppliers. These policies and procedures are effectuated through education, training and monitoring of our employees, distributors and suppliers. In addition, to enhance compliance with applicable healthcare laws and mitigate potential liability in the event of noncompliance, regulatory authorities, such as HHS’s Office of the Inspector General (“OIG”) of the United States, have recommended the adoption and implementation of a comprehensive healthcare compliance program that generally contains the elements of an effective compliance and ethics program described in Section 8B2.1 of the U.S. Sentencing Commission Guidelines Manual. Increasing numbers of U.S.-based pharmaceutical companies have such programs, and we have adopted U.S. healthcare compliance and ethics programs that generally incorporate the OIG’s recommendations. However, our adoption and enforcement of these various policies and procedures does not ensure that we will avoid investigation or the imposition of penalties by applicable government agencies.

Failure to comply with changing regulatory requirements could materially adversely affect our business.

We engage in various manufacturing, processing, marketing and sales activities pertaining to pharmaceutical products in a number of jurisdictions around the world. These activities subject us to several governmental regulations governing our global operations. The laws and regulations of the many jurisdictions that govern our business and operations are subject to varying and evolving interpretations that affect our ability to comply, and future changes, additions, and enforcement approaches, including in light of political changes. For example, in the United States, President Biden’s administration has authorized and encouraged a freeze on certain federal regulations that have been published but are not yet effective, as well as a review of all federal regulations issued during President Trump’s administration. Changes with respect to the applicable laws and regulations may require us to update or revise our operations, services, marketing practices, and compliance programs and controls, and may impose additional and unforeseen costs on us, pose new or previously immaterial risks to us, or may otherwise have a material adverse effect on our business. There can be no assurance that current and future government regulations will not adversely affect our business, and we cannot predict new regulatory priorities, the form, content or timing of regulatory actions, and their impact on the health care industry and on our business and operations.

We are subject to extensive environmental, health and safety laws and regulations.

Our business involves the controlled use and the generation, handling, management, storage, treatment and disposal of hazardous substances, wastes and various biological compounds and chemicals. The risk of contamination or injury from these materials cannot be eliminated. If an accident, spill or release of any regulated chemicals, substances or wastes occurs, we could be held liable for resulting damages, including for investigation, remediation and monitoring of the contamination, including natural resource damages, the costs of which could be substantial. As owners and operators of real property, we could also be held liable for the presence of hazardous substances as a result of prior site uses or activities, without regard to fault or the legality of the original conduct that caused or contributed to the presence or release of such hazardous substance on, at, under or from our property. We are also subject to numerous environmental, health and workplace safety laws and regulations, including those governing laboratory procedures, exposure to blood-borne pathogens and the handling of biohazardous materials, chemicals and wastes.

Although we maintain workers’ compensation insurance to cover the costs and expenses that may be incurred due to injuries to our employees resulting from the use and handling of these materials, chemicals and wastes, this insurance may not provide adequate coverage against potential liabilities.

Additional or more stringent federal, state, local or foreign laws and regulations affecting our operations may be adopted in the future. We may incur substantial capital costs and operating expenses to comply with any of these laws or regulations and the terms and conditions of any permits required pursuant to such laws and regulations, including costs to install new or updated pollution control equipment, modify our operations or perform other corrective actions at our respective facilities. In addition, fines and penalties may be imposed for noncompliance with environmental and health and safety laws and regulations or for the failure to have or comply with the terms and conditions of required environmental permits.

Table of Contents

Risks Relating to Our Shares and American Depositary Shares

Effective internal and disclosure controls are necessary for us to provide reliable financial reports and effectively prevent fraud and to operate successfully as a public company. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed. A “significant deficiency” is a deficiency, or combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention of those responsible for oversight of our financial reporting. In addition, a “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

To the extent that any material weakness or significant deficiency exists in our or our consolidated subsidiaries’ internal control over financial reporting, such material weakness or significant deficiency may adversely affect our ability to provide timely and reliable financial information necessary for the conduct of our business and satisfaction of our reporting obligations under U.S. federal securities laws, which could affect our ability to remain listed on NASDAQ. Ineffective internal and disclosure controls could cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our American Depositary Shares, or ADSs, or the rating of our debt.

See Item 15 of Part 2 “Controls and Procedures” in connection with the restatement of the investment by the GIC Investor.

The Grifols Family may exercise significant influence over the conduct of our business.

The founders of the Company and their relatives (the “Grifols Family”) and Scranton Enterprises B.V. own, directly and indirectly, approximately 36% of our Class A shares. The Class A shares exercise 100% of the voting control of our Company. As a result, the Grifols Family and Scranton Enterprises B.V. may exercise significant influence over matters requiring shareholders’ approval, including, among other things, the election of our board of directors, or the Board, dividend policy and certain fundamental corporate action, such as the issuance of bonds, a merger or a dissolution. Conflicts may arise between the interests of the principal shareholders and those of the other shareholders, and the principal shareholders may choose to resolve the conflict in a way that does not coincide with the interests of the other shareholders.

The market price of our Class B ADSs on NASDAQ may be volatile.

The market price of our Class B ADSs may be volatile as a result of various factors, many of which are beyond our control. These factors include, but are not limited to, the following:

market expectations for our financial performance;

actual or anticipated fluctuations in our results of operations and financial condition;

changes in the estimates of our results of operations by securities analysts;

potential or actual sales of blocks of our Class B ADSs in the market by any shareholder or short selling of our Class B ADSs. Any such transaction could occur at any time or from time to time, with or without notice to us;

the entrance of new competitors or new products in the markets in which we operate;

volatility in the market as a whole; and

the risk factors mentioned in this section.

Table of Contents

The market price of our Class B ADSs may be adversely affected by any of the preceding or other factors regardless of operations and financial condition. Since December 31, 2020, our Class B ADSs have traded as high as $19.78 per ADS on January 19, 2021 and as low as $5.95 per ADS on September 29, 2022.

Fluctuations in the exchange rate between the U.S. dollar and the euro may increase the risk of holding our ADSs or shares.

The Spanish securities market for equity securities consists of four stock exchanges located in Madrid, Barcelona, Bilbao and Valencia (collectively, the “Spanish Stock Exchanges”). The majority of the transactions conducted on the Spanish Stock Exchanges are done through the Spanish Automated Quotation System (Sistema de Inteconexión Bursátil Español, or SIBE).

Our Class A shares and Class B shares are listed on the Spanish Stock Exchanges and quoted on SIBE in euros. In addition, our Class B shares are traded in the United States on the NASDAQ Global Select Market in the form of ADSs, evidenced by American Depositary Receipts, or ADRs, in U.S. dollars. Fluctuations in the exchange rate between the U.S. dollar and the euro may result in temporary differences between the value of our ADSs and the value of our shares, which may result in heavy trading by investors seeking to exploit such differences. This may increase the volatility of, and have an adverse effect on, the price of our shares or ADSs.

In addition, as a result of fluctuations in the exchange rate between the U.S. dollar and the euro, the U.S. dollar equivalent of the proceeds that a holder of our ADSs would receive upon the sale in Spain of any shares withdrawn from the ADR depositary and the U.S. dollar equivalent of any cash dividends paid in euros on our shares represented by the ADSs could also decline.

Subscription (or preemptive) rights may be unavailable to U.S. holders of our shares or ADSs.

In the case of a future increase of our registered share capital, existing shareholders will generally be entitled to subscription (or preemptive) rights pursuant to Spanish law, unless waived by a resolution of the shareholders or, if such power has been delegated to the Board pursuant to a shareholders’ resolution, by a resolution of the Board and except in certain situations, such as capital increases made for an in-kind contribution, in which subscription (or preemptive) rights are not applicable by law. Holders of the Class B shares will generally not have a right to vote on any resolution on a capital increase or on the waiver of subscription (or preemptive) rights, unless such resolution does not treat the Class B shares in the same way as the Class A shares, except in the limited circumstances set out in the Articles of Association of Grifols, S.A. as amended (the “Articles of Association”).

Even if preemptive rights are granted, holders of our ADSs or U.S. resident shareholders may not be able to exercise subscription (or preemptive) rights, in which case holders of our ADSs could be substantially diluted, unless a registration statement under the Securities Act, as amended, or the Securities Act, is effective with respect to such rights and the shares for which they give such right or an exemption from the registration requirements of the Securities Act is available.

We intend to evaluate at the time of any rights offering the costs and potential liabilities associated with any such registration requirements, as well as the benefits of enabling the exercise of subscription (or preemptive) rights for the shares. In doing so, we will also evaluate any other factors that we may consider appropriate at the time.

There can be no assurance that we will decide to comply with such registration requirements. If no such registration requirements are satisfied, the depositary will sell the subscription (or preemptive) rights relating to the ADSs on deposit and will distribute the proceeds of such sale, if any, to the holders of the ADSs. If the depositary is unable to sell rights that are not exercised or not distributed or if the sale is not lawful or reasonably practicable, it will allow the rights to lapse, in which case no value will be given for these rights.

Table of Contents

ADS holders may be subject to limitations on the transfer of their ADSs.

ADSs are transferable on the books of the depositary. However, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when the books of the depositary are closed or if such action is deemed necessary or advisable by the depositary or by us because of any requirement of law or of any government or governmental body or commission or under any provision of the deposit agreement. Moreover, the surrender of ADSs and withdrawal of our shares may be suspended subject to the payment of fees, taxes and similar charges or if we direct the depositary at any time to cease new issuances and withdrawals of our shares during periods specified by us in connection with shareholders’ meetings, the payment of dividends or as otherwise reasonably necessary for compliance with any applicable laws or government regulations.

Item 4.INFORMATION ON THE COMPANY

History of and Development of the Company

Introduction

We were founded in 1940 in Barcelona, Spain by Dr. José Antonio Grifols i Roig, a specialist and pioneer in blood transfusions and clinical analysis and the grandfather of our current Honorary Chairperson of the Board. We have been making and selling plasma derivative products for more than 70 years. Over the last 25 years, we have grown from a predominantly domestic Spanish company into a global company by expanding both organically and through acquisitions throughout Europe, the United States, Latin America and Asia.

We were incorporated in Spain as a limited liability company on June 22, 1987 under the name Grupo Grifols, S.A., and we changed our name to Grifols, S.A. in 2005. We conduct business under the commercial name “Grifols.” Our principal executive office is located at Avinguda de la Generalitat, 152 Parque Empresarial Can Sant Joan, 08174 Sant Cugat del Vallès, Barcelona, Spain and our telephone number is +34 93 571 0500. Our registered office is located at c/Jesús y María, 6, Barcelona, Spain.

We are a vertically integrated global producer of plasma derivatives and we believe we rank in the top three largest producers in the industry. Our activities include sourcing raw material, manufacturing various plasma derivative products and selling and distributing final products to healthcare providers. We have expanded our plasma collection network and our manufacturing capacity through a combination of organic growth and acquisitions. As of December 31, 2022 we had 392 operating plasma collection centers located across the United States, Germany, Austria, Hungary, Canada and Egypt; and a manufacturing capacity of approximately 22 million liters of plasma per year.

We also research, develop, manufacture and market in vitro diagnostics products, including analytical instruments, reagents, software and associated products for use in clinical and blood bank laboratories and hospital products.

Our Class A shares have been listed on the Spanish Stock Exchanges since we completed our initial public offering on May 17, 2006 and are quoted on the SIBE under the ticker symbol “GRF.” Since January 2008, we have been part of the IBEX-35 Index, which comprises the top 35 listed Spanish companies by liquidity and market capitalization. Our Class B shares were issued as part of the consideration for the acquisition of Talecris Plasma Resources, Inc. (“Talecris”), a company that has since been merged into our subsidiary Biomat USA, and are listed on the Spanish Stock Exchanges and quoted on the SIBE under the ticker symbol “GRF.P.” Our Class B shares are also traded in the United States on the NASDAQ Global Select Market in the form of ADSs, evidenced by ADRs, under the symbol “GRFS.” Each ADS represents one of our Class B shares. Our ADSs are currently traded in U.S. dollars. In November 2011, our ADSs were added to the NASDAQ Biotechnology Index.

The SEC maintains an internet site at http://www.sec.gov that contains reports, information statements and other information regarding issuers that file electronically with the SEC.

Table of Contents

Important Milestones

The following are some of our most important milestones:

On April 25, 2022, we acquired all of the existing equity interest in Grifols Biotest Holdings GmbH, formerly known as Tiancheng (Germany) Pharmaceutical Holdings AG (“Biotest Holdings”), which in turn owns 89.88% of the ordinary shares and 1.08% of the preferred equity shares of German publicly traded company Biotest AG, a global company that supplies plasma protein products and biotherapeutic drugs, for a total consideration of €1,090,518,254. In addition, (1) we completed a voluntary tender offer to all remaining shareholders of Biotest AG to acquire their ordinary and preferred shares, where we acquired 1,250,298 ordinary shares (for €43.00 per share) and 8,340,577 preferred shares (for €37.00 per share) and (2) we acquired 185,359 ordinary shares in May 2022 following the exercise of a legal put right provided by applicable German corporate laws by former shareholders of Biotest AG. This has brought our interest in Biotest AG to 97.13% of the voting rights and 70.18% of the share capital. As a result of these transactions, we have acquired 28 additional plasma collection centers. See Item 5 of this Part I, “Operating and Financial Review and Prospects—A. Operating Results—Factors Affecting our Financial Condition and Results of Operations—Acquisitions—Biotest AG Acquisition;”

On December 1, 2021, we sold a minority equity interest in the Biomat group, comprised of our U.S.-based plasma collection subsidiaries Biomat Newco, its subsidiary Biomat USA and its subsidiaries Grifols Bio Supplies, Inc., formerly known as Interstate Blood Bank, Inc., Talecris and Biomat USA South, Inc., the latter two of which have since been merged into Biomat USA and dissolved, respectively (collectively, the “Biomat Group”), to Parette Investment Pte. Ltd. (the “GIC Investor”), to an affiliate of GIC Private Limited, which is a sovereign wealth fund established by the Government of Singapore. Specifically, the GIC Investor acquired 12.9% of Biomat Newco and 12.5% of Biomat USA. The purchase price received was $990 million. We used the net proceeds to (i) prepay $600 million of principal amount of the Revolving Loans under the First Lien Credit Facilities, (ii) prepay $142,360,501.31 of the principal amount of the Dollar Tranche B Term Loans, (iii) prepay $88,003,617.48 of the Euro Tranche B Term Loans and (iv) repurchase €97,535,000.00 of the 2019 Notes under an asset sale offer. See Item 5 of this Part I, “Operating and Financial Review and Prospects—A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Dispositions—The Biomat Transactions” and “Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Sources of Credit;”

On October 15, 2020, we acquired 100% of the equity of Alkahest, Inc. (“Alkahest”), a California biopharmaceutical company, for a total consideration of $146 million. In 2015, we had previously acquired a significant minority stake of Alkahest and, with this transaction, we gain total control of the company;

On October 1, 2020, we acquired a plasma fractionation facility and two purification facilities located in Montreal, Canada, as well as 11 plasma collection centers located in the U.S., from South Korean based GC Pharma (Group) (“GC Pharma”), for a total consideration of $457 million. When the facilities are licensed and approved, we will become the only commercial manufacturer of plasma products in Canada, with a fractionation capacity of 1.5 million liters annually. We plan to be ready to manufacture IVIG and albumin in the Canadian facilities to supply the Canadian market starting in 2023;

On March 30, 2020, we acquired 26.2% of the voting and economic rights in Chinese company Shanghai RAAS Blood Products Co Ltd (“Shanghai RAAS”), in exchange for 45% of the economic rights and 40% of the voting rights in our U.S. subsidiary, Grifols Diagnostic Solutions Inc. (“GDS”);

In June 2018, we completed the acquisition of German based pharmaceutical company Haema AG for a purchase price of €220 million;

In August 2018, we completed the acquisition of U.S. based pharmaceutical company Biotest US Corporation, for a purchase price of $286 million;

Table of Contents

In December 2016, we entered into an asset purchase agreement with Hologic Inc. (“Hologic”), to acquire Hologic’s nucleic acid testing (“NAT”) Donor Screening Unit. The transaction closed in January 2017 for a purchase price of $1.9 billion;

In January 2014, we acquired the diagnostic business of Novartis Corporation (“Novartis”), for a purchase price of $1.7 billion;

In June 2011, we acquired U.S. based biotherapeutics company Talecris Biotherapeutics for a purchase price of $3.7 billion; and

In July 2003, we acquired the assets of Alpha Therapeutics Corporation, including its plasma fractionation plant in Los Angeles, California, for a purchase price of $104 million.

For further details of our principal capital expenditures and divestitures, see Item 5 of this Part I, “Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditures, Other Intangible Assets and Rights of Use.”

Business Overview

General

We are one of the leading global specialty plasma therapeutics companies developing, manufacturing and distributing a broad range of biological medicines based on plasma derived proteins. Plasma derivatives are proteins found in human plasma, which once isolated and purified, have therapeutic value. These protein-based therapies extend and enhance the lives of individuals who suffer from chronic and acute, often life-threatening, conditions, including primary and secondary immunological deficiencies, Chronic Inflammatory Demyelinating Polyneuropathy (“CIDP”), A1PI deficiency and related emphysema, immune-mediated ITP, Guillain Barré syndrome, Kawasaki disease, allogeneic bone marrow transplants, hemophilia A and B, von Willebrand disease, traumatic or hemorrhagic shock and severe burns. In addition, we have built a diagnostic business that focuses on researching, developing, manufacturing and marketing in vitro diagnostics products for use in clinical and blood bank laboratories. We also specialize in providing infusion solutions, nutrition products and medical devices for use in hospitals and clinics.

Our products and services are used by healthcare providers in over 100 countries to diagnose and treat patients with hemophilia, immune deficiencies, infectious diseases and a range of other medical conditions, and we have a direct presence, through the operation of commercial subsidiaries, in over 30 countries.

We are a leading producer in the industry in terms of total sales globally. We believe we have a top three market position in various segments of the plasma derivatives industry, including A1PI, IG and albumin as well as in terms of plasma collection centers and fractionation capacity. Our long-term aim is to further strengthen our leadership through the development of new and differentiated plasma-derived therapeutics, and the expansion of our global plasma collection footprint via acquisitions and greenfield projects.

We organize our business into five business units: Plasma Procurement, Biopharma, Diagnostic, Bio Supplies and Others.

Plasma Procurement. The Plasma Procurement business unit includes all activities relating to plasma collection, including the evaluation and screening of plasma donors and the operation of our plasma collection centers. Our Plasma Procurement business unit has no revenues, as all plasma collected in our facilities is sold to Grifols companies in the Biopharma business unit.

Biopharma (formerly Bioscience). The Biopharma business unit includes activities relating to the manufacture of plasma derivatives for therapeutic use, including the reception, analysis, quarantine, classification, fractionation and purification of plasma and the sale and distribution of end products. The main plasma products we manufacture are IG, Factor VIII, A1PI and albumin. We also manufacture intramuscular (hyperimmune) immunoglobulins, ATIII, Factor IX and plasma thromboplastin component, or PTC. The Biopharma business unit accounted for €5,005.4 million, or 82.5%, of our total net revenue in 2022.

Table of Contents

Diagnostic. The Diagnostic business unit focuses on researching, developing, manufacturing and marketing in vitro diagnostics products, including analytical instruments, reagents, software and associated products for use in clinical and blood bank laboratories, covering the entire value chain from donation to transfusion. We concentrate our Diagnostic business in transfusion medicine (immunology, immunohematology) and specialty diagnostics such as hemostasis. The Diagnostic business unit’s main customers are blood donation centers, clinical analysis laboratories and hospital immunohematology services. The Nucleic Acid Testing, or NAT, Donor Screening Unit is engaged in research, development, manufacturing and commercialization of assays and instruments based on NAT technology for transfusion and transplantation screening. NAT technology makes it possible to detect the presence of infectious agents in blood and plasma donations, contributing to greater transfusion safety. The Diagnostic business unit accounted for €671.3 million, or 11.1%, of our total net revenue in 2022.

Bio Supplies. Net revenue from Bio Supplies primarily consists of revenue related to biological products for non-therapeutic use. The Bio Supplies business unit accounted for €146.1 million, or 2.4%, of our total net revenue in 2022.

Other Activities and Operations. In addition to our four business units, we have other smaller operations, activities and business lines (“Others”), which net revenue primarily originating from the provision of manufacturing services to third parties, third party plasma sales and research activities. Others also includes our Healthcare Solutions (formerly our Hospital Division). It also includes pharmaceutical products manufactured by the Group and intended for hospital pharmacies, as well as the marketing of products that complement our own products. Others accounted for €250.2 million, or 4.1%, of our total net revenue in 2022.

Geographic Markets

We believe we are a leading plasma derivatives producer globally, ranking in the top three largest producers in the industry in terms of total sales, along with Takeda and CSL Group. We are the world’s largest producer of A1PI, which is used for the treatment of A1PI deficiency-related emphysema.

We currently operate in over 100 countries through distributors and subsidiaries in 30 countries. The United States is the largest sales region in the world for the plasma derivative sector. For the year ended December 31, 2022, the United States and Canada accounted for 63.6% of our total net revenue, Europe accounted for 17.0% of our total net revenues (of which 31.1% was generated in Spain) and the rest of the world accounted for 19.4% of our total net revenue.

Certain sales regions, particularly in emerging markets, have experienced continuous growth, driven by enhanced socioeconomic conditions and more informed patients who are demanding better quality medical care, as well as increasing government healthcare spending on plasma derivative products. These emerging markets are expected to experience significant growth. Our presence and experience in Latin America, in countries such as Mexico, Colombia, Argentina, Chile and Brazil, where we have been marketing and selling products for over 20 years, has positioned us to benefit from this additional growth in both our Biopharma and Diagnostic business units. In the Asia-Pacific region, we have established a presence through our subsidiaries and representative offices in Malaysia, China, Thailand, Singapore, Australia, Japan, India, Hong Kong, Taiwan and Indonesia. We have also opened a Middle Eastern representative office in Dubai and Saudi Arabia.

We maintain a continuing focus on international expansion and acquisitions and will continue to selectively consider acquisitions that would generate operation synergies. For specific examples of acquisitions we have made to further enhance our operations, see “—A. History and Development of the Company—Important Milestones” above.

The following chart reflects a summary of net revenue by each of our geographic regions for the past three years:


	Year ended			Year ended			Year ended
	December 31,	% of total		December 31,	% of total		December 31,	% of total
Summary of Net Revenue by Region	2022	net revenue		2021	net revenue		2020	net revenue

	(in thousands of euros, except for percentages)
European Union⁽¹⁾	1,032,210	17.0	%	906,449	18.4	%	834,492	15.6	%
United States and Canada	3,855,607	63.6	%	3,154,549	63.9	%	3,599,746	67.4	%
Rest of the World	1,176,150	19.4	%	872,120	17.7	%	905,800	17.0	%
Total	6,063,967	100.0	%	4,933,118	100.0	%	5,340,038	100.0	%

(1)	Net revenue earned in the European Union includes net revenue earned in Spain.

Table of Contents

Principal Activities

We organize our business into five business units: Plasma Procurement, Biopharma, Diagnostic, Bio Supplies and Others. The Plasma Procurement business unit generates no revenues, as all plasma collected is sold to Grifols companies in the Biopharma business unit. As a result, our presentation of consolidated financial information excludes Plasma Procurement as an operating segment. The following chart presents our total net revenues by each of our other business units for the past three years:


	Year ended			Year ended			Year ended
	December 31,	% of total		December 31,	% of total		December 31,	% of total
Summary of Net Revenue by business unit	2022	net revenue		2021⁽¹⁾	net revenue		2020⁽¹⁾	net revenue

	(in thousands of euros, except for percentages)
Biopharma	5,005,382	82.5	%	3,814,983	77.3	%	4,242,502	79.4	%
Diagnostic	671,292	11.1	%	779,108	15.8	%	775,889	14.5	%
Bio Supplies	146,076	2.4	%	115,811	2.3	%	133,221	2.5	%
Others	250,165	4.1	%	266,461	5.4	%	222,521	4.2	%
Intersegments	(8,948)	(0.1)	%	(43,245)	(0.8)	%	(34,095)	(0.6)	%
Total	6,063,967	100.0	%	4,933,118	100.0	%	5,340,038	100.0	%

(1)	As a consequence of the change in transactions and balances allocations by segments discussed in Item 4 of this Part I “A. Business Overview—Principal Activities—Other Activities and Operations (“Others”),” the comparative figures for the fiscal years 2021 and 2022 have been adjusted accordingly.

The Biopharma Business Unit

The Biopharma business unit is responsible for the research and development, production and marketing of plasma derivative products. In 2022, the Biopharma business unit accounted for 82.5% of our total net revenue.

Table of Contents

Operational Structure

The following chart illustrates its operational structure:

From plasma donation to therapeutic application, there are four major steps in the industry value chain process: (i) plasma collection, (ii) transport and logistics, (iii) manufacturing (fractionation and purification) and (iv) marketing and distribution. We are present at all levels of the value chain, from collection centers to distribution of the final products. This vertical integration enables us to leverage our position at each stage to control the overall process, to benefit from lower prices and to introduce complementary products, such as those offered through the Diagnostic business unit, to our customers.

Table of Contents

Plasma Collection

Plasma is the key raw material used in the production of plasma-derived products. We have expanded our plasma collection network through a combination of organic growth by opening new plasma collection centers and acquisitions. We obtain our plasma primarily from the United States and Europe (Germany, Austria, Czech Republic, and Hungary) through 392 operating plasma collection centers and, to a much lesser extent, through agreements with third parties. Over the last few years, pursuant to the implementation of our business strategy, we have acquired plasma collection centers in the United States, Canada and Europe. See Item 5 of this Part I, “Operating and Financial Review and Prospects—A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Acquisitions—Acquisition and Sale of Haema AG and Biotest US Corporation.” below. In 2022, we are advancing on our efforts to increase our plasma supply through our expansion plan, comprising organic and inorganic growth.

We believe that our plasma requirements through 2023 will be met through plasma collected at our plasma collection centers and purchased from third-party suppliers pursuant to various plasma purchase agreements. As we source the majority of our plasma internally, we have been able to ensure the availability of plasma for our manufacturing needs and assure the quality of the plasma throughout our manufacturing process.

We have implemented mechanisms to ensure that plasma donors meet the guidelines set forth by applicable regulations regarding, among other things, health, age and frequency of donations. Once the plasma donation is completed, as required by applicable United States and European regulations, we test every donation for pathogens such as HIV, hepatitis A, B and C, parvovirus B19 and syphilis. If we discover a unit of plasma that cannot be used in the fractionation process, we notify the donor and remove all plasma previously donated by such donor from our inventory.

Transport and Logistics

Once plasma has been collected, it is frozen at the collection center and sent to fractionation centers. One essential aspect of this process is the implementation of safety procedures to guarantee the quality and safety of the donated plasma. To ensure preservation of the proteins found in plasma, plasma must be kept at or below a temperature of -20 degrees Celsius (-4 degrees Fahrenheit). In accordance with European and United States requirements, we store our plasma at a temperature of -30 degrees Celsius (-22 degrees Fahrenheit). During transportation, plasma is kept at a temperature at or below -20 degrees Celsius. Our frozen plasma is transported by one of two transport companies, which are the same used throughout the industry.

Fractionation and Purification

Once plasma has been obtained, it may be used for plasma transfusions. It may also be frozen (as fresh frozen plasma) and manufactured into plasma derivatives through the fractionation process. The fractionation process consists of the separation of specific proteins through temperature and pH changes, as well as the use of filtration and centrifugation techniques. This process also includes a phase of introducing various viral inactivation procedures. Fractionation occurs in tanks at near freezing temperatures to maintain the integrity of the proteins. All known plasma derivative products can be fractionated from the same batch of plasma. As a result, the development of a new or higher yield plasma derivative product would likely generate incremental sales without increasing the requirement for additional plasma.

We currently operate three Biopharma manufacturing facilities in the United States and Spain. Our plasma derivative products are manufactured at our Clayton, Los Angeles and Parets facilities, which have a combined fractionation capacity of approximately 22 million liters per year. Our Clayton facility is one of the world’s largest integrated protein manufacturing sites, including fractionation, purification and aseptic filling and finishing of plasma-derived proteins.

Currently, the Clayton, Los Angeles and Parets facilities are equipped and licensed to produce certain plasma derivative products for the United States, European and other markets. For example, we produce our Flebogamma^® DIF and Gamunex^® IVIG products for all of our markets at the Clayton, Los Angeles and Parets facilities.

Table of Contents

In addition, on October 1, 2020, we purchased from GC Pharma and other investors a plasma fractionation facility and two purification facilities located in Montreal, Canada (as well as 11 plasma collection centers located in the U.S). The Canadian facilities are currently in the process of construction and renovation. When the construction and renovation are complete and the facilities are licensed and approved, we will become the only commercial manufacturer of plasma products in Canada, with a fractionation capacity of 1.5 million liters annually. We plan to be ready to manufacture IVIG and albumin in the Canadian facilities to supply the Canadian market starting in 2023.

We optimize utilization of our fractionation capacity by obtaining FDA and EMA licenses, and completing further requirements, that allow us to purify at any of our other facilities intermediate products that are produced at one of our facilities. We have obtained the following FDA licenses, among others:

to use at our Clayton facility the Fraction II+III made at both our Los Angeles and Parets facilities to make Gamunex^®;

to use at our Los Angeles facility the Fraction II+III made at both our Los Angeles and Clayton facilities to make Gamunex^®;

to use Fraction V obtained at our Los Angeles facility to produce albumin at our Parets facility;

to use Fraction V obtained at both our Clayton and Parets facilities to produce Albutein^®in our Los Angeles facility;

to use Fraction IV-1 obtained at our Los Angeles facility to produce Prolastina^®, an A1PI we market in Spain, at our Clayton facility;

to use Fraction IV-1 obtained at our Los Angeles facility to produce Prolastin^®-C lyophilized at our Clayton facility;

to use Fraction IV-1 obtained at our Clayton facility to produce Prolastin^®-C liquid at our Parets facility;

to use the same method currently in place in our Parets facility to produce Alphanate^® in our Los Angeles facility;

to use paste from the new fractionation facility at Clayton to produce Gamunex^® and Prolastin^®;

to produce nano-filtered Gamunex^® and the 40 gram vial presentation; and

to use Cryoprecipitate obtained at our Clayton facility to produce Alphanate^® at our Clayton facility, which is later sent to our Los Angeles facility to be filled.

We are continuing our efforts to obtain additional FDA licenses of this nature. The flexibility provided through such licenses allows us to increase production efficiency and to better address changes in demand between the United States, the European Union and other world markets.

For more information on our manufacturing facilities, see “—D. Property, Plant and Equipment” below.

Safety

We have never experienced a recall of any batch of our finished biological products due to a safety risk. In alignment with our commitment to safety and quality, we have voluntarily withdrawn some product lots. All withdrawals were due to a reported rate of adverse drug reactions slightly higher than usual. Our philosophy is that the health of the plasma donor and the patient are the paramount considerations. None of the withdrawn products had a significant impact on patients. We strongly believe that our safety philosophy is consistent with the business objective of generating profit. We also believe that we have a strong reputation for safety in our markets, thus making our products particularly attractive to customers. Our vertically integrated business model allows us to assure the safety and quality of our plasma derivative products through the implementation of our safety standards.

Table of Contents

The plasma collection, fractionation and purification process is long, complex and highly regulated. We have adopted and maintain rigorous safety standards that we believe exceed those required by health authorities in Europe and the United States. Grifols is periodically inspected and certified for Good Manufacturing Practices, or GMP, by competent health authorities, such as European authorities, the FDA, and other relevant government authorities of other countries where our products are marketed.

Grifols maintains standards consistent with other industry participants with regard to plasma safety, and is periodically certified by the Plasma Protein Therapeutics Association (“PPTA”), under the International Quality Plasma Program (“IQPP”), for plasma donation centers, and under the Quality Standards of Excellence, Assurance and Leadership Program (“QSEAL”), for fractionation plants. For example, source plasma inventory is held for not less than 60 days after donation, to allow for retrieval and destruction of plasma units if the donor is disqualified during this period (after seroconversion or due to high-risk behavior or international travel). We have also introduced innovative methods such as the Plasma Bottle Sampling™ system, which automatically prepares, codes and labels test samples at the time of plasma donation, and the PediGri™ On Line system, which provides full traceability of human plasma raw material throughout the plasma supply chain. See “—Distribution Process” below.

The manufacturing plants have been designed fulfilling the current GMP standards and applicable regulations for clean areas, and are designed to minimize clean areas as well as human intervention, with the objective of lowering the risk of contamination. The facilities are subject to a cleaning and sanitizing plan and to a corrective and preventive maintenance program. Periodically, we voluntarily shut down all of our manufacturing facilities to perform maintenance work, expansion projects and other capital investments. Our manufacturing facilities have never been shut down because of regulatory noncompliance while under our operation. We believe that our voluntary shutdown procedure lowers the risk of any mandatory shutdown.

All of our plasma derived products are manufactured strictly following validated and approved procedures, and in accordance with the corresponding marketing authorization. Also, each manufacturing process includes at least one validated specific virus inactivation or removal step as a precautionary measure to avoid improbable virus contamination.

Since our products are proteins that cannot be terminally sterilized, they therefore are sterilized by filtration before being aseptically filled in their final container. Grifols has patented the Grifols Sterile Filling (“GSF”) system which minimizes the risk of microbial or particulate contamination during the aseptic filling process. During this process, sterilized containers are filled with the product under Grade A laminar air flow. The partially closed containers (vial with stopper and protector) are sterilized prior to filling. The container closure unit remains partially closed until the moment of filling, after which it is immediately sealed thus reducing the risk of contamination by reducing the product and container exposure to the controlled environment. The filling process is recorded which enables us to identify the cause of, and rectify more easily, any related problem. These records are maintained according to our data retention policy.

Once aseptically filled, each unit of product is laser-marked with the objective of individually identifying each container and preventing and detecting counterfeits. This allows us to protect the integrity of our manufacturing process.

After plasma derivatives are manufactured, every unit of each lot is visually inspected in order to detect the presence of foreign particles or other imperfections in the container closure system. Each lot is also tested during production and at the end of the manufacturing process according to the licensed specifications, marketing authorization and corresponding Pharmacopoeia monographs. All processes are overseen by the quality systems in place at Grifols with the objective of ensuring that products are marketed with the appropriate quality, purity, potency and safety.

Finally, once the product is marketed, our Pharmacovigilance system allows us to control all potential adverse reactions resulting from the administration of our products, thus ensuring the safety of our products globally around the world.

We continually invest in the improvement of our manufacturing facilities and plasma fractionation process, as well as in other related systems, in order to ensure the quality and safety of our products.

Table of Contents

Distribution Process

With each batch of plasma derivatives, we deliver electronic information regarding the origin, characteristics and controls of each of the units of plasma that we use in the preparation of the batch to our customers. This feature, called the PediGri™ On Line system, allows for healthcare users of our products and regulatory authorities to have immediate and easy access to this information, tangible proof of the full traceability of our products. We have had this system in place since 1996, and we believe we are the only fractionator that provides this feature to customers.

We have our own sales and distribution networks covering substantially all of our markets, staffed with highly trained personnel. A majority of our sales in 2022 were made through our own distribution network, which is experienced in the proper handling of our products. This network provides for greater safety because it allows us to track our products and react quickly in the case of a potential product recall. In countries where we do not have our own distribution network, we use carefully selected distributors who follow all of our safety standards.

For further information, see “—Marketing and Distribution” below.

Biopharma Products and Services

Collected plasma, whether source or recovered, is fractionated into different component proteins. We fractionate and purify a broad range of plasma derivative products that improve patient care. Our Biopharma business unit also sells a non-plasma derivative medicinal product, Tavlesse^® (fostamatinib), in Europe.

Table of Contents

The chart below presents our principal products by brand name and their respective therapeutic indications:

Product Description		Main Therapeutic Indications
Gamunex^®/Gamunex^®-C. Immune Globulin Injection (Human), 10% Caprylate/Chomatography Purified. Flebogamma^®5% and 10% DIF. Immune Globulin Intravenous (Human).		IVIG is used for the treatment of: primary and secondary immunological deficiencies; and autoimmune conditions including immune-mediated ITP; Guillain Barré syndrome; Kawasaki disease; chronic inflammatory demyelinating polyneuropathy (“CIDP”); and multifocal motor neuropathy (“MMN”). Severe acute myasthenia exacerbations is an approved indication for Gamunex^®-C in Europe.

Xembify^®. Immune Globulin Subcutaneous (Human) - klhw 20% solution.		Used to treat Primary Humoral Immunodeficiency (“PI”). In Europe and Australia, Xembify^® is also indicated to treat hypogammaglobulinaemia and recurrent bacterial infections in patients with chronic lymphocytic leukaemia (“CLL”) in whom prophylactic antibiotics have failed or are contra-indicated, hypogammaglobulinaemia and recurrent bacterial infections in multiple myeloma (“MM”) patients, and hypogammaglobulinaemia in patients pre- and post- allogeneic haematopoietic stem cell transplantation (“HSCT”).

HyperRAB^®Rabies Immune Globulin (Human).		Anti-rabies immunoglobulin indicated for postexposure prophylaxis, along with rabies vaccine, for all persons suspected of exposure to rabies who have not been previously vaccinated with a rabies vaccine.

Prolastin^®/Prolastin^®-C/ Prolastin^®-C Liquid/Prolasplan^®/ Prolastina^®/Pulmolast^®/Lynspad^®. Alpha 1-Proteinase Inhibitor (Human).		Used to treat adults with clinical evidence of emphysema due to severe hereditary alpha-1 antitrypsin deficiency (“A1PI deficiency”).

Fanhdi™ and Alphanate^®. Antihemophilic Factor/von Willebrand Factor Complex (Human).		Used for the prevention, management and control of bleeding in Factor VIII deficiency (hemophilia A) and indication for von Willebrand disease.

Koate^®-DVI. Antihemophilic Factor (Human).		Used for the prevention and control of bleeding in Factor VIII deficiency (hemophilia A).

Albutein^®/ Albutein^® FlexBag^® / Human Albumin Grifols^®/Plasbumin^®. Albumin (Human) 5%, 20% and 25%.		Used to re-establish and maintain circulation volume in the treatment of hypovolemia (i.e., traumatic or hemorrhagic shock, septic shock and severe burns) and to treat complications related to cirrhosis.

Vistaseal™/VeraSeal^®. Human fibrinogen/human thrombin.		Used as a supplemental treatment in adults where standard surgical techniques are insufficient for improvement of haemostasis, and as suture support in vascular surgery.

Tavlesse^®. Fostamatinib Disodium Hexahydrate Film Coated Tablets.		Used for the treatment of chronic immune thrombocytopenia (“ITP”) in adult patients who are refractory to other treatments.

Table of Contents

Gamunex-C^® IVIG, a ready-to-use liquid IVIG product, is one of the leading products in the IVIG segment. We believe Gamunex-C^® IVIG is one of the premium products in its category since its launch due to a comprehensive set of differentiated product characteristics. We are one of the market leaders in the production and marketing of immunoglobulin, with about 25.6% market share in volume in the United States as of November 2022, according to PPTA.

In July 2019, the FDA approved Xembify^®, our subcutaneous immunoglobulin product for use to treat primary immunodeficiencies. We launched Xembify^® in the United States in the fourth quarter of 2019. From 2019 to 2021, Xembify^® was also approved in Canada, France, Italy, Sweden and the United Kingdom for use to treat primary and secondary immunodeficiencies. In 2022, Xembify^® received approvals in Australia, Czech Republic, Finland, Slovakia and Spain.

HyperRAB^® is the world’s leading human anti-rabies immunoglobulin indicated for postexposure prophylaxis, along with rabies vaccine, for all persons suspected of exposure to rabies who have not been previously vaccinated with rabies vaccine. HyperRAB^®, a 300 IU/ml formulation of which is available in the U.S., is the only human rabies immunoglobulin (“HRIG”) provided as a higher-potency formulation, potentially requiring fewer injections in administration of each dose. We had an estimated 80% market share in sales of anti-rabies immunoglobulins in the United States as of December 2022.

In addition, we are the global market leader in the sales of alpha-1-antitrypsin augmentation therapy (“AAT”). Our AAT has 35 licenses in 28 countries worldwide with 19 countries in North America and Europe. Our liquid formulation of AAT (Prolastin^®-C Liquid) is FDA approved as a chronic augmentation and maintenance therapy to treat emphysema related to severe hereditary A1PI deficiency. We had an estimated 71% global sales market share for AAT as of December 2021. A worldwide clinical trial is ongoing to meet post-approval regulatory commitments and obtain Prolastin^®-C regulatory approval in Europe.

Between Koate^®-DVI, Fanhdi and Alphanate,we had an estimated 20% market share in volume globally in the pdFVIII hemophilia A market in 2021 (excluding Von Willebrand disease use).

Grifols albumin brands are sold globally, with an estimated 19% market share in volume. In addition, our albumin products meet U.S., European and Chinese requirements, making them attractive to biotechnology companies and genetic labs, as well as hospitals and physicians. In 2021 and 2022, we launched and began to market in the U.S. Albutein 25% and 5% FlexBag^®, a flexible container designed to add convenience, ease of use, and durability.

Tavlesse^®is a novel SYK-inhibitor in-licensed from Rigel Pharmaceuticals for commercialization in Europe and additional markets in the Middle East and North Africa. Tavlesse^® is indicated to treat chronic immune thrombocytopenia in adult patients who are refractory to other treatments. EMA regulatory authorization was obtained in January 2020, and commercial sales have commenced in Czech Republic, Norway, Denmark, The Netherlands, Germany, Spain, Italy, France and the United Kingdom.We plan to launch in additional countries in Europe and the Middle East. Tavlesse^® is the first oral therapy commercialized by Grifols Biopharma.

We also produce antithrombin (e.g., AT, ATIII, pdAT) (Anbinex^® and Thrombate^® III), which is used in the prevention and treatment of thromboembolic complications in patients with antithrombin deficiency; AlphaNine^®, Profilnine^® and Factor IX Grifols^®, which are used in the prevention and control of bleeding in patients with hemophilia B.

In addition to the products described above, we also commercialize intramuscular (hyperimmune) immunoglobulins, which are used for the prevention and treatment of tetanus, prevention and treatment of hepatitis B, and Rh factor complications during birth. Niuliva^® and Igantibe^® are used after liver transplants to prevent hepatitis B reinfection of the graft.

We also manufacture Vistaseal™/Veraseal^®, a biological fibrin sealant composed of fibrinogen and human thrombin used in surgical operations to expedite the healing process. It is commercialized in the U.S. and Canada, in some European countries (i.e. Germany, United Kingdom, Switzerland, Estonia, Latvia, Lithuania, Austria, Ireland, Netherlands, Norway, Finland, Sweden, Denmark, France, Italy and Spain) as well as in Singapore and Australia by Ethicon US, LLC (a Johnson & Johnson company).

Table of Contents

To sell medicinal products, we must first register the products with the relevant authorities of the jurisdictions where the products are to be marketed and sold. To comply with the regulatory requirements in a given jurisdiction, we have a core team in Spain and the United States that prepares, files and coordinates the registration process with the technical personnel at the subsidiary assigned to that jurisdiction. We have 1,072 Biopharma product licenses registered in 89 countries throughout Europe, the United States, Latin America, Asia and the rest of the world. Our most significant government-issued licenses for Biopharma products are:

Gamunex^®/Gamunex^®-C/Flebogamma^® DIF. We have 202 licenses for the marketing and sale of one or more IVIG products;

Xembify^®. We have 18 licenses for the marketing and sale of this product;

Prolastin^®/Prolastin^®-C/ Prolastin^®-C Liquid/Prolasplan^®/Prolastina^®/Pulmolast^®/Lynspand^®. Alpha 1-Proteinase Inhibitor (Human). We have 35 licenses for the marketing and sale of one or more of these A1PI products;

Fanhdi™/Alphanate^®/Koate^®- DVI Factor VIII. We have 233 licenses for the marketing and sale of one or more of these Factor VIII products;

Albutein^®/Human Albumin Grifols^®/Plasbumin^®. We have 266 licenses for the marketing and sale of one or more of these albumin products in their various concentrations;

VistaSealTM/VeraSeal^®. We have 23 licenses for the marketing and sale of this product; and

Tavlesse^®. We have EMA authorization for Tavlesse^® in the European Union and national authorization in the United Kingdom. Tavlesse^® is currently sold in Czech Republic, Norway, Denmark, The Netherlands, Germany, Spain, Italy, France, and the United Kingdom.

Pursuant to a consent order issued by the Federal Trade Commission (the “FTC”) on July 20, 2011 to settle certain charges related to our acquisition of Talecris (the “Consent Order”), we have granted Kedrion the exclusive license to sell Koate^®-DVI in the United States (see “Financial Information—A. Consolidated Statements and Other Financial Information—Antitrust Approval of Talecris-Grifols Merger”).

In addition to the sale of the products described above, we have entered into a series of arrangements with many Spanish transfusion organizations to fractionate recovered plasma (plasma separated from blood obtained from a blood donation) from such organizations and manufacture plasma derivatives under our own brand name for use by hospitals. We charge the transfusion centers for the fractionation and manufacturing service. We also provide virus photo-inactivation of transfusion plasma to hospitals and clinics in Spain. The plasma is inactivated at our manufacturing facilities and then sent back to the clinic or hospital at which it was collected, where it is used for transfusions.

Table of Contents

The Diagnostic Business Unit

The Diagnostic business unit focuses on researching, developing, manufacturing and marketing in vitro diagnostics products, including analytical instruments, reagents, software and associated products for use in diagnostic clinical and blood bank laboratories. We believe that we have a significant market share in NAT blood screening solutions. In addition, we have increased our sales of automated immunohematology systems and reagents to hospital transfusion services and blood centers in several key global markets. We also continue to grow our portfolio of clinical and diagnostic products in select areas, including autoimmunity, and have agreements to extend the number of antigens we manufacture for use in clinical and blood bank diagnostic tests. The Diagnostic business unit accounted for €671.3 million, or 11.1% of total net revenue in 2022. Our principal diagnostic products are:


Product Description		Main Applications

Transfusion Medicine:

Procleix^® Panther^® systems/Procleix^® Panther^® with Automation Ready Technology (ART). Automated NAT blood screening systems, assays and software.		Used to detect infectious viruses and parasites in donated blood and plasma including: HIV (Types 1 & 2); Hepatitis A, Hepatitis B, Hepatitis C and Hepatitis E; parvovirus B19; West Nile Virus; Dengue Virus; Zika Virus and Babesia.

WADiana^®/Erytra^® /Erytra Eflexys^® analyzers. Automated immunohematology analyzers that use gel agglutination technology to enable automatic processing of DG Gel^® system, including DG Gel^® cards, reagent red blood cells, antisera and associated software. Manual and semiautomated equipment are also part of the DG Gel system.		Used to perform routine pre-transfusion compatibility testing, including blood typing, unexpected antibody screening and identification, extended phenotype and cross-match tests, among others.

BLOODchip ID/ IDCore^XT/ IDHPA^XTA/ IDRHD^XT / IDCORE^CONTRO / BIDS^XT. A multiplex blood group genotyping family of products based on Luminex technology, including kits for the main allelic variants of red blood cells, human platelet antigens, a positive control for ID CORE^XT, and an accompanying software.		Used to help determine blood groups in individuals who may not be able to be typed with traditional blood grouping methods due to recent transfusions, autoantibodies, or other limitations.

Antigens. Critical component of certain infectious disease tests.		Used in the manufacture of clinical diagnostic and blood donor screening immunoassays.

Clinical and Specialty Diagnostics:

Promonitor^®. Highly specific immunoassays for quantification of serum drug levels and anti-drug antibodies of various biological drugs.		Used to measure quantity of drug and antibodies for a number of biological drugs, commonly used in the treatment of various inflammatory diseases.

AlphaID^TM. Genetic test for patients for alpha-1 deficiency.		This is a free cheek swab to screen for alpha-1, the most common genetic form of Chronic Obstructive Pulmonary Disease (“COPD”).

We assemble the majority of our instrument analyzers at our Parets facility in Spain. We manufacture antigens at our Emeryville facility in the U.S., oligos and other critical components of the transcription-mediated amplified NAT kits for blood and plasma infectious diseases screening at our San Diego facility in the U.S.

The production, marketing and sale of many of our Diagnostic business unit products are subject to the prior registration of such products with the relevant authorities of the applicable jurisdictions. We have over 3,420 diagnostic product licenses registered in over 80 countries in Europe, the United States, Canada, Latin America, Asia-Pacific, Middle East and Africa.

Table of Contents

In addition to the products noted above, we offer our customers solutions developed in collaboration with, or manufactured by, third-parties that we believe complement our product lines. The Diagnostic business unit distributes products in over 100 countries in Europe, the Americas, Asia-Pacific, Middle East and Africa.

Our Diagnostic business unit includes a complete line of products and systems to perform blood donor screening molecular tests aimed at detecting the pathogenic agents of transfusion-related infectious diseases such as HIV (Types 1 & 2), Hepatitis A, Hepatitis B, Hepatitis C, Hepatitis E, parvovirus B19, West Nile Virus, Zika Virus, Dengue Virus, Babesia and Plasmodium. We control the research and development, manufacturing and worldwide commercialization of our Procleix^® blood screening products. We believe that our Procleix^® NAT solutions continue to lead the market, and are used to screen more blood and plasma donations worldwide each year than any other NAT system.

Transfusion Medicine

We have a leadership position in transfusion medicine, with a broad portfolio of products that range from blood and plasma testing to blood typing. We focus primarily on meeting changing market needs with new and enhanced products for our Procleix^® NAT blood screening portfolio and on expanding sales of our immunohematology products (WADiana^®, Erytra^® and Erytra Eflexis^® analyzers and related DG Gel^® blood determination cards) in key markets.

We continue to focus on obtaining FDA and other regulatory approvals to expand our portfolio of NAT products. In January 2019, we obtained FDA approval for an assay to detect four species of the Babesia parasite (B. Microti, B. Venatorum, B. Divergens and B. Duncani), known to cause babesiosis, a tick borne disease. The assay is designed to be used for routine screening by U.S. blood banks on the Procleix^® Panther^® system, where we estimate that we are currently the market leader and continue our efforts to offer innovative solutions to blood banks. We obtained CE mark for the Babesia assay in early 2021.

In October 2019, the Procleix^®Panther^® System featuring Automated Ready Technology, or ART, obtained Europe’s CE mark, making it available in European markets accepting the certification, and reinforcing our leadership in the blood banking industry. With significant hardware and software improvements on the current platform, the Procleix Panther System featuring ART will help accelerate laboratory efforts to reach higher levels of workflow automation for blood and plasma screening.

In May 2020, Procleix^® Panther^® System, featuring ART, received FDA approval for use with the following U.S. licensed products: Procleix^® Ultrio Elite Assay, Procleix^® WNV Assay, Procleix^® Zika Virus Assay and the Procleix^® Babesia Assay.

Also in May 2020, we obtained CE Mark for the Procleix^® SARS-CoV-2 assay to screen blood or plasma for SARS-CoV-2 and plasma from convalescent donors who have recovered from COVID-19 or infection with SARS-CoV-2, for further manufacture. We also received CE Mark for a respiratory claim as an aid in the diagnosis of COVID-19 in specific respiratory specimens that are transported in Specimen Extraction Buffers, which obtained a separate CE Mark. The SARS-CoV-2 respiratory claim is limited to Spain, Northern Ireland and other select E.U. countries on a contractual basis with Hologic. The agreement for this assay with Hologic expired in December 2021 and will not be renewed. In August 2020, we obtained the approval of the Zika assay in Canada.

Also in August 2020, we successfully commercialized the Procleix^® UltrioPlex E assay, a new multiplex assay for use on the Procleix^® Panther^® system, in Japan. The assay, which is a Transcription Mediated Amplification (“TMA”) qualitative in vitro NAT, was designed to detect five viruses in human blood specimens: HIV‐1, HIV‐2, HCV, HBV, and HEV in a single, simultaneous test, improving overall laboratory efficiencies. Early in 2021, the Procleix^® UltrioPlex E assay received CE mark. This assay enhances blood safety and represents a significant advance in streamlining a laboratory’s NAT testing operations by allowing for an increased screening of viruses from a single-donor specimen without the need for any additional equipment. The Procleix^® UltrioPlex E assay also helps produce less waste with higher results throughput and greater walk-away time for laboratory staff when compared with running current screening solutions separately.

In 2022, we had several developments in transfusion medicines, including the following:

●

we obtained CE approval for an assay to detect ribonucleic acid (“RNA”) from Plasmodium species (P. falciparum, P. knowlesi, P. malariae, P. ovale, and P. vivax) in whole blood specimens that causes Malaria disease. The assay is designed to be used for routine screening by blood banks on the Procleix^® Panther^® system, where we estimate that we are currently the market leader and continue our efforts to offer innovative solutions to blood banks;

Table of Contents

●

we received FDA 510(k) clearance for Procleix Quality Controls (“PQCs”) intended for use as an external assayed quality control material to monitor the performance of sevarla assays performed on the Procleix^® Panther^® system, such as the Procleix^® Ultrio Elite Assay, Hepatitis B Virus DNA, Hepatitis C Virus RNA, HIV-1 RNA, Procleix^® West Nile Virus Assay and Procleix^® Babesia Assay;

●

we obtained CE approval for immunohematological products Sero-Cyte Pool Dia 0.8% and Grifols sCD38. Sero-Cyte Pool Dia 0.8% is designed to be used by blood banks on DG Gel^® systems for routine testing for the screening of irregular antibodies, including the antigen Dia, in donors. This reagent complements the existing reagent red blood cells and allows us to reinforce our presence in markets, such as Brazil, where the identification of the antigen Dia is required by local regulations. The new product Grifols sCD38 is an innovative product designed to be used in patients being treated with Darzalex (a drug for multiple myeloma treatment). Grifols sCD38 is a protein reagent used for the pre-treatment of the plasma of patients receiving Darzalex therapy, and is meant to counteract Darzalex-mediated pan-reactivity without significantly diluting the patients’ plasma. This enables subsequent screening and identification of irregular antibodies in DG Gel^® system and tube techniques, and crossmatch in DG Gel^® system. Currently, the market is experiencing a lack of availability of this kind of reagent, which leads us to believe that Grifols sCD38 will be well received by blood bank customers;

●

We received FDA 510(k) clearance for Blood Typing Manager, a product designed to aid in the interfacing and managing of data among immunohematology instruments, blood establishment computer software and laboratory information systems as part of the DG Gel^® System;

●

we received BLA approval for a DG Gel^® 8 Direct Coombs card used for the evaluation of the direct antiglobulin test of two different human blood samples. This card makes it possible to differentiate red blood cells sensitized in vivo by IgG type immunoglobulins or the complement C3d fractions. The card is intended to be used with the DG Gel^® System; and

●

we obtained CE approval for a DG Gel^® DC Scan Plus card, also intended to be used in gel technique for the evaluation of the direct antiglobulin test. This test permits the differentiation of red blood cells sensitized in vivo by IgG, IgA and IgM type immunoglobulins and/or with the complement C3b, C3d and C4b fractions in human blood samples. The DG Gel^® DC Scan Plus card is intended for the investigation of clinical situations where the presence of hemolysis has been established, or is suspected, to distinguish immune from nonimmune hemolytic anemia. The card can be used manually or with automated instruments of the DG Gel^® System.

As part of our strategy of geographic expansion and as a leader in this market segment, we continue to consider requests to include NAT screening for blood and plasma donations in countries as they develop their health systems. In 2020 and 2021, we entered several new countries, such as Guatemala and Czech Republic.

We continue to experience strong sales of our DG Gel^® system blood typing products. In December 2018, Erytra Eflexis^®, a fully automated, mid-size analyzer that performs pretransfusion compatibility testing using DG Gel^® technology already in use in the E.U., was approved by the FDA. It has a smart and compact design, offering intuitive operation that has expanded our product portfolio, which already includes the WADiana^® and Erytra^® analyzers and DG Gel^® cards. The DG Gel^® family of products continued to expand in 2019, with the commercialization in CE mark countries of DG Reader NET, a single card processing platform operating with the same consumables and reagents as our fully automated systems. The DG Reader NET received FDA approval at the end of 2019. Also, in November 2019 we received FDA approval for two new red blood cell panels, Data-CytePlus 2 and Data-CyteExtend. Additionally, a Weak D assay, to be used in combination with the DG Gel^® system in automation, received FDA approval at the end of 2019. This is a valuable test for donor centers and Grifols Laboratory Solutions and will support our expansion in the region. More recent FDA approvals include the new DG Gel 8 ABO/Rh (2D) card, which helps customers to identify the majority of D^VI variant patients as part of the ABO/Rh type, and, as mentioned previously, the DG Gel 8 Direct Coombs card.

In the U.S., our blood typing solutions have experienced solid growth. We have expanded commercialization efforts and will continue to promote this area in light of its high growth potential. Recently, we launched in CE mark countries and Australia the new middleware for our immunohematology instruments, our Blood Typing Manager (“BTM”). This middleware complements our blood typing systems portfolio and increases our competitiveness by adding new advanced features that support increasing our customer base.

Table of Contents

Through our U.S. subsidiaries Biomat USA and Interstate Blood Bank Inc., we have entered into an agreement with Creative Testing Solutions (“CTS”), a nonprofit blood donor testing laboratory organization in the United States. Pursuant to this agreement, as of April 1, 2022, CTS began to operate for a period of ten years (renewable for up to another ten years) our three testing laboratories located in Memphis, Tennessee and San Marcos and Austin, Texas, to perform donor screening for blood and plasma collections. Grifols Laboratory Solutions will continue to provide specialty testing, including in-process and final product testing, as well as diagnostic solutions for clinical issues related to Molecular and Serological Immunohematology. The facility in Austin, Texas, provides testing, consultation and integrated solutions to optimize patient care for specialists in Hematology, Oncology, Perinatology, Obstetrics, Pharmacy, Transplantation and Transfusion Medicine.

In several countries, we distribute BLOODchip^® blood group genotyping tests manufactured by Progenika, a Grifols company. This product line includes ID CORE XT, which determines 37 antigens of red blood cell groups, ID RHD XT, a molecular diagnostic kit that detects the most relevant RhD variations, and ID HPAXT kit to determine 12 Human Platelet Antigen (“HPA”) systems. BIDSXT is the software tool that allows the analysis, interpretation and database management to transmit the results to the Laboratory information system (“LIS”).

In November 2021, consistent with our long-term growth strategy, which focuses on promoting viable and essential business lines, we decided to exit the blood collection bags business. As a result, we are shutting down production of blood collection bags at our plants in Murcia, Spain, and Campo Largo, Brazil.

We operate a product line of high quality antigens, which are critical components of clinical diagnostic and blood screening immunoassay tests sold worldwide, which are produced through a joint business with Ortho Clinical Diagnostic. As part of this joint business, we have a contract with Abbott Laboratories for the supply of high quality antigens used in the manufacture of immunoassay diagnostics. This contract, with a total value of approximately $700 million, extended the supply of antigens until 2026, ensuring higher levels of recurring income in this area. We also extended our agreement with OraSure Technologies through 2022, reinforcing our position as a flexible provider of antigens.

Working together with Ortho Clinical Diagnostics, we maintain the VITROS^® HIV Combo test for the early detection of HIV infection. This is an important milestone in the joint business between the two companies, in which Grifols is responsible for manufacturing the antigens for the test. The test received approval from the FDA in October 2018 to be used on Ortho’s VITROS^® ECi/EciQ. The test was previously approved for use on Ortho’s VITROS^® 5600 Integrated System and Ortho’s VITROS^® 3600 Immunodiagnostic System.

Clinical and Specialty Diagnostics

Operating within our Clinical and Specialty Diagnostics, Progenika manufactures a genetic diagnosis test for Familial Hypercholesterolemia (“FH”) using next generation sequencing technology (“NGS”). The Diagnostic business unit continues its efforts to broaden the Promonitor^® line, used to monitor biologic drugs as sales continue in Chile, select European Union countries, Australia and in the U.S. The Promonitor^® product line includes an ELISA (enzyme-linked immunoabsorbent assay) device line also developed by Progenika to monitor patients being treated with biological medicines for rheumatoid arthritis and other chronic inflammatory diseases. We maintain CE marking of two additional tests in the Promonitor^® family that enable treatment with the biological product golimumab, and several tests to permit the use of a single dilution to measure quantity of drug and antibodies for a number of biological drugs, commonly used in the treatment of various inflammatory diseases, such as rheumatoid arthritis and ulcerative colitis. In 2021, we entered into a co-development agreement with DIESSE Diagnostica Senese to adapt Promonitor^® ELISA kits to DIESSE’s Chorus analyzer. This adaptation to monotest and ready-to-use devices addresses customer and market needs for improved automation. The development of Promonitor^® tests on the Chorus automated system facilitates an improved testing workflow, resulting in earlier feedback for the clinician.

As a result of the development of Promonitor^®, we have discontinued production of our Triturus^®analyzer, but continue to service it for our existing customer base.

Pursuant to an exclusive agreement with AESKU Diagnostics GmbH & Co. (“AESKU”), we distribute autoimmunity diagnostic products in Chile, Portugal, Spain and Mexico. We also serve key U.S. customer segments with AESKU products. One of these diagnostic products is Helios, the only fully automated platform capable of performing all immunofluorescence pipetting and reading steps in the United States, which strengthened our U.S. portfolio of products.

Table of Contents

We retain the first FDA approved biological molecular test that uses the DNA of the patient for the diagnostic. This genetic test to detect alpha-1 antitrypsin deficiency (the “A1AT Genotyping Test”) can be conducted on DNA extracted from blood as well as a drop of blood collected on paper (a “Dry Blood Spot”). This test was developed by Progenika Biopharma, a Grifols subsidiary. In 2022, A1AT Genotyping Test was also CE marked. Although highly complex, the test has been designed so any molecular biology laboratory can process it with minimal human intervention. At the end of 2019, we also introduced AlphaID™, a new simple cheek swab that greatly simplifies the sample collection process. AlphaID™ allow physicians and healthcare providers to obtain a sufficient oral sample for alpha-1 screening, and it is completely free from ordering to results. The test is now available for distribution in the U.S.

Since the approval of AlphaID™ in 2019, Progenika Biopharma has been developing a service to offer, directly to homes, a diagnostic solution to potential patients of alpha-1 antitrypsin deficiency. The service has been cleared by the FDA in 2022 as “AlphaID™ At Home Genetic Health Risk Service.” This is a complex multidisciplinary project that brings together six international companies lead by Progenika Biopharma, being the second over-the-counter clinical diagnostic service approved by FDA.

The Bio Supplies Business Unit

The Bio Supplies Business Unit provides human biological materials for life sciences research and the development and manufacturing of pharmaceutical and diagnostic products. Most materials and products come from our collection centers with vertical integration manufacturing processes (in-house production). The Bio Supplies business unit accounted for €146.1 million, or 2.4% of our total net revenue in 2022.

Products in our Bio Supplies business unit cover a broad spectrum of applications where the need for human-based biological material cannot be replaced by other types of products, such as:

Cell Therapy: providing human-based cell culture supplements, plasma proteins, and leukocyte apheresis (white blood cell concentrate obtained through apheresis and used in the development of new cell therapies).

Pharma Manufacturing: human-based plasma proteins to be used as excipients (i.e. inactive substances that serve as vehicles or mediums for a drug or other active substances in the manufacturing of therapeutic drugs). Human plasma and intermediates used to manufacture plasma derived medicines.

Diagnostic Manufacturing: human blood cells, proteins and plasma and serum for the manufacturing of quality controls and calibrators used in in vitro diagnostics tests.

Life Science Research: Human blood derived products and biospecimens used in life science basic research or by in vitro diagnostic companies to develop and validate their analytical assays.

Other Activities and Operations (“Others”)

In addition to our four business units, “Others” represents operation and activities including the provision of manufacturing services to third parties and third-party plasma sales, pharmaceutical products manufactured by the Grifols Group intended for hospital pharmacies.

With the sale of substantially all assets of Goetech, LLC, which does business under the name Medkeeper (“Medkeeper”), the activities of our former “Hospital Division” were significantly reduced, which caused us to reallocate such activities and related products into a smaller business line named healthcare solutions (“Healthcare Solutions”), which is also accounted as Others. Others accounted for €250.2 million, or 4.1%, of our total net revenue in 2022. See Item 5 of this Part I, “Operating and Financial Review and Prospects—Factors Affecting Our Financial Condition and Results of Operations—Dispositions—MedKeeper.”

The Healthcare Solutions business line provides services and manufactures products used by hospitals, blood banks, plasma collection centers and other healthcare systems. These products include parenteral solutions, robotics and software. It also includes products that we do not manufacture but that we market as supplementary to the products that we do manufacture.

Table of Contents

Research and Development

Research and development is a significant aspect of our business. Our principal research and development objectives are (i) to discover and develop new products, (ii) to research new applications for existing products and (iii) the improvement of our manufacturing processes to improve yields, safety and efficiency. Research and development spending was €294.2 million in 2020, €354.9 million in 2021 and €361.1 million in 2022. In addition, as of December 31, 2022, we had 1,271 scientists and support staff dedicated to research and development.

We have several decades of successful innovation history. For example, we developed a unique fractionation design that reduces the risk of contamination, reduces maintenance costs and increases the amount of product extracted per liter of plasma. We also developed the first centrifugation unit for the automated cleaning of blood cells. In addition, we were one of the first fractionators to conduct double viral inactivation processes for Factor VIII and have designed and implemented a new process for the sterile filling of vials that reduces exposure to potential contaminants as compared to other existing processes. Further, we have developed a nanofiltration method of viral inactivation for our IG, alpha-1 PI, and ATIII products. As a result of our continuing investment in research and development, we believe that we are well positioned to continue as a leader in the plasma-derived therapies industry.

Our key therapeutic areas of study focus on immunology, hepatology and intensive care, pulmonology, hematology, neurology and infectious diseases. Our next innovations into these therapeutic areas will go beyond plasma-derived proteins, as our significant investments to increase R&D capabilities are allowing us to develop a new class of recombinant antibodies and small-molecules candidates.

Biopharma Initiatives

We have a number of research and development projects in our Biopharma business unit underway, 23 of which are in the clinical development phase. The following table reflects the total number of research and development projects in our Biopharma business unit by development phase as of the end of the last three years.


	As of December 31,
Development Phase	2022	2021	2020
Discovery	19	21	15
Pre-clinical	28	30	26
Clinical	23	22	25
Post Commercialization Studies	39	9	11
Rest of projects	14	14	19
Total Biopharma Research and Development Projects	123	96	96

Table of Contents

The table below presents the most important of our research and development projects:


Product Candidate	Therapeutic Area	Product Type	Potential Use	Development Phase
Albumin	Alzheimer’s	Plasma-derived	Alzheimer’s disease	Phase III (clinical trial program currently in development)

Xembify^®	Hematology and Oncology	Plasma-derived	Chronic lymphocytic leukemia	Phase III (clinical trial program currently underway)

Albumin	Hepathology	Plasma derived	Liver Cirrhosis	Phase III (clinical trial program currently underway)

Alpha-1 Proteinase Inhibitor	Pulmonology	Plasma-derived	Emphysema due to congenital deficiency	Phase I/II (clinical trial program currently underway)

Fibrin Sealant	Surgical bleeding	Plasma-derived	Vascular, organ and soft-tissue surgery	Launched in the U.S. in 2019 and in the E.U. in 2020. Post-marketing pediatric clinical trial is complete. Submission for U.S. and E.U. licenses to occur in 2023.

Immunoglobulin	Ophthalmology	Plasma-derived	Dry Eye Disease	Pre-clinical development

Fibrinogen	Hematology	Plasma-derived	Congenital deficiency & severe hypofibrinogen / acquired deficiency	Phase III (clinical trial program currently underway)

Trimodulin	Infectious diseases	Plasma-derived	Severe community acquired pneumonia (“sCAP”)	Phase III (clinical trial program currently underway)

CYTOTECT^®	Infectious diseases	Plasma-derived	Cytomegalovirus (“CMV”) infection	Phase III (clinical trial program currently underway)

AMBAR Study. The Alzheimer Management by Albumin Replacement (“AMBAR”), study was a multicenter trial that complemented two previous trials and involved combining therapeutic plasmapheresis with albumin and IVIG in different intervals and in varying doses. Since the AMBAR project was mainly based on albumin, the study also included a treatment arm with albumin alone in order for both approaches, the combination of albumin plus IVIG, and albumin alone, to be covered. Therefore, we conducted a Phase IIb/III clinical trial to demonstrate the efficacy of plasmapheresis with Albutein^® and Flebogamma^® DIF, for improving the cognitive status of treated patients with Alzheimer’s disease compared with non-treated patients. The study was conducted in collaboration with 41 hospitals in Spain and in the United States. 496 patients were enrolled, and the top line results presented in 2018 showed a reduction of 61% in disease progression in both primary efficacy endpoints measuring cognition and activities of daily living during a 14-month period. Additionally, the AMBAR treatment showed an excellent safety profile with 72% of the treated patients completing the entire study and with approximately 90% of the 4,709 procedures performed showing no adverse effects. In July 2020, clinical trial results were published in the scientific journal Alzheimer’s & Dementia: The Journal of the Alzheimer’s Association. In 2022, the design for a Phase III study was presented to United States regulatory authorities in a pre-IND meeting. Additional feedback will be obtained in 2023 from the E.U. authorities, with the goal to submit an IND later in the year.

We incurred costs in the amount of €1.0 million, €1.3 million and €2.4 million in connection with this project in 2022, 2021 and 2020, respectively. We hold significant granted patents and patent applications on the production of albumin and IVIG as well as on the combination of plasma exchange with albumin replacement for the treatment of Alzheimer’s disease.

Table of Contents

Xembify^® – CLL. The primary objective of this project is to obtain an indication for Xembify^® in chronic lymphocytic leukemia (CLL) as a result of secondary immunodeficiency. CLL is the proliferation and progressive accumulation of morphologically mature but immunologically less mature monoclonal B-cells in the blood, bone marrow, and lymphoid tissues. It is widely accepted that both intrinsic (genetic and epigenetic) and extrinsic (micro-environmental stimuli and B cell receptor-mediated antigenic stimulation) events can contribute to the pathogenesis of the disease. CLL is most common in adults and accounts for approximately 40% of all leukemia cases. CLL is primarily a disease of the elderly population, with less than 10% of the cases occurring in patients younger than 40 years of age. While no definitive cause of CLL has been established, targeted therapy regimens have proven to be efficacious treatments. Hypogammaglobulinemia (“HGG”) is the most predominant inherent immune defect in B-CLL patients and becomes more pronounced with longer disease duration and advanced-stage disease. Infectious complications continue to be one of the major causes of morbidity and mortality in patients with CLL. The Phase 3 clinical program is currently enrolling patients in the U.S., and we are also preparing to begin enrollment in select European countries to support the FDA submission in the United States.

Fibrin Sealant. We began clinical trials into the safety and efficacy of the use of fibrin sealant as a supportive treatment for the improvement of hemostasis in vascular, organ and soft-tissue surgery in 2008. In 2014, we completed a clinical trial in the European Union for the use of fibrin sealant in vascular surgery. Three additional clinical trials were performed: (i) a Phase III clinical trial in the United States for the use of fibrin sealant in solid organ surgery; (ii) a Phase III clinical trial in the United States for the use of fibrin sealant in soft-tissue surgery; and (iii) a Phase III clinical trial for the use of fibrin sealant in vascular surgery in the United States. All of the U.S. clinical trials for fibrin sealant were completed in 2015. Marketing authorization approvals were received from the FDA and EMA in November 2017. A distribution agreement was made with a third party, requiring an additional regulatory supplement. Vistaseal^® was launched in the U.S. during 2019 and Veraseal^® was launched in the E.U. in 2020. Additionally, a Phase IV study to evaluate safety and efficacy of fibrin sealant as an adjunct to haemostasis during surgery in pediatric subjects was completed in 2022 to support the FDA and EMA regulatory licenses.

We incurred costs in the amount of €0.4 million, €0.1 million and €0.1 million and in connection with this project in 2022, 2021 and 2020, respectively. We hold significant granted patents on the fibrinogen and thrombin production processes.

Fibrinogen. The AdFIrst study is a prospective, active-controlled, multicenter Phase III study investigating the efficacy and safety of the fibrinogen concentrate BT524 in patients with acquired fibrinogen deficiency. Patients who have high blood loss during planned spinal and abdominal surgery are randomized 1:1 to treatment with BT524 or FFP/Cryoprecipitate. To evaluate efficacy, further blood loss is compared between the two treatment options. The study is conducted in collaboration with ten study sites in five European countries and is currently recruiting patients. The last planned interim analysis has been successfully completed.

We incurred costs in the amount of € 4.0 million in connection with this project in 2022. We hold significant granted patents on the fibrinogen production process.

Trimodulin. Study 996: This multinational Phase III clinical trial plans to enroll about 590 adult hospitalized patients with severe sCAP (Community Acquired Pneumonia) requiring invasive mechanical ventilation. The ESsCAPE trial will be conducted worldwide in up to 20 countries and patients will be treated either with trimodulin or with a placebo as add-on therapy to standard of care.

The clinical concept of this prospective, double-blind, placebo-controlled, Phase III trial was developed based on promising results from the previous Phase II clinical trial (“CIGMA”) with 160 sCAP patients requiring invasive mechanical ventilation. In the CIGMA trial, a subgroup of patients with signs of severe inflammation showed an encouraging reduction in the mortality rate when treated with trimodulin. The first approvals for the United States have been received and the trial is currently in the recruitment phase.

Study 1001: This multinational Phase III clinical trial plans to enroll more than 330 adult hospitalized patients with moderate or severe COVID-19. These are patients with signs of early systemic inflammation admitted to hospitals and requiring supplemental oxygen due to the severity of their disease. The trial is conducted in Germany and up to 15 countries worldwide. After confirmation of SARS-CoV-2 infection, the patients will be treated either with trimodulin or with a placebo as add-on therapy to standard of care.

Table of Contents

The clinical concept of this prospective, double-blind, placebo-controlled Phase III trial was developed based on positive results from the Phase II trial (“ESsCOVID”) in a subgroup of patients with early systemic inflammation and after the German authority (Paul-Ehrlich-Institute) confirmed that further development is warranted. The trial has currently been approved in 13 countries and is recruiting patients.

We incurred costs in the amount of €16.4 million in connection with this project in 2022. We received a grant from the German Federal Ministry of Education and Research (Bundesministerium für Bildung und Forschung, BMBF) in the amount of €11.2 million for the relevant period in 2022, which reduced expenses.

We hold significant granted patents on the trimodulin production process.

CYTOTECT^® The open-label, single-arm, prospective Phase III clinical trial PreCyssion (Prevention of maternal-fetal Cytomegalovirus transmission after primary maternal infection) is evaluating the efficacy and safety of Biotest’s CMV hyperimmunoglobulin, Cytotect CP Biotest^®, for the treatment of pregnant women with CMV infection to prevent the transmission to the fetus. The clinical concept of this pivotal Phase III trial is based on convincing data from an observational study coordinated by the University of Tübingen. In this study, pregnant women with primary CMV infection in early pregnancy were treated with Cytotect CP Biotest^®. In 149 treated women (153 fetuses), transmission of the virus to the fetus occurred in ten cases by the time of amniocentesis (around gestational week 20). This corresponds to a transmission rate (primary endpoint) of 6.5%, which is significantly lower than the rate of 35.2% of a historical control group. The study is conducted in collaboration with five study sites in Germany and is currently in the recruitment phase.

We incurred costs in the amount of €0.4 million in connection with this project in 2022. We hold significant granted patents on the hyperimmunoglobulin production process.

Other Biopharma research and development projects undertaken during 2022 included:

new container closure systems for Albutein^® and Xembify Prefilled syringes;

clinical programs to evaluate new indications of Flebogamma^® DIF 5%;

A1PI. New vial sizes of Prolastin^®are in development, providing important advancements in manufacturing efficiency as well as improved patient convenience;

clinical studies to evaluate the effects of the prolonged administration of human albumin on cardiovascular, hepatic and renal function in patients with advanced cirrhosis and ascites.

All clinical trials involve risks and uncertainties. Preclinical and clinical testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to outcome. A failure of one or more of our clinical trials can occur at any stage of testing. We may experience numerous unforeseen events during or as a result of preclinical testing and the clinical trial process that could delay or prevent our ability to receive regulatory approval or commercialize our product candidates. For a discussion of these unforeseen events, see Item 3 of this Part I, “Key Information—D. Risk Factors—Risks Relating to the Company and Our Business—We may not be able to commercialize products in development.” Upon the completion of each of the development stages we evaluate the results achieved as compared to the objectives pursued. Each of the key projects listed above has met our expectations with respect to results at the various development stages and we expect to move forward with the development process for each.

We believe that our current liquidity is sufficient to fund the ongoing costs of our key projects listed above through their completion as well as our other research and development initiatives.

Table of Contents

Diagnostic Initiatives

Research and development in the Diagnostic business unit supports various business areas, including transfusion medicine, clinical diagnostics, and the recombinant protein business. The Diagnostic business unit focuses on the development of in vitro diagnostic reagents/assays, instrumentation, and software for donor screening, which includes pathogens detection to assure safety and blood typing tests to determine donor/recipient blood compatibility. Here, research and development focuses on opportunities to develop new assays for emerging pathogens, increase multiplex test capabilities (simultaneous detection of several analytes in a single reaction), as well as improved automation solutions in order to increase efficiency and throughput for customers. The Diagnostic business unit also develops products for clinical diagnostics, including a broad menu of drug and anti-drug ELISA kits for biological drug monitoring, as well as assays for genetic testing, including the detection of alpha-1 antitripsin deficiency. In 2022, our R&D team also initiated the development of ultrasensitive immunoassays in priority areas of clinical diagnostics.

The research and development team employs a diverse technology portfolio, including transcription mediated amplification (“TMA”), polymerase chain reaction (“PCR”), next generation sequencing (“NGS”) for molecular assays, immunologic based methods using red blood cells (“RBC”), and agglutination. We have also continued research and development of new recombinant proteins, antibodies and enzymes as critical raw materials to support internal and external diagnostics customers in various fields such as infectious diseases, neurodegenerative diseases and immunohematology. Our R&D group has also expanded synergistic work to support the Biopharma business unit to advance its therapeutic goals.

In 2022, the Diagnostic business unit obtained CE mark according to new IVD Regulation 2017/746 for 17 immunohematology products in reagents, assays and software, in addition to achieving IVDD CE mark for a new kit to resolve daratumumab interference in blood typing. In Europe, our Diagnostic business unit also obtained the CE mark for Procleix Plasmodium under IVDD and CE mark for a new improved reagent equilibration system under IVDR. In the United States, we obtained FDA clearance through the 510(k) process (which means that the FDA agrees with the manufacturer that a medical device is similar to a previously approved product) for new Procleix controls, along with the release of a new version of pooler software. The Diagnostics business unit also achieved updated CE mark for several existing Class A products, to transition these from IVDD to IVDR regulations.

Additionally, the Diagnostic business unit filed several patents, spanning composition of matter, methods and device, in the areas of infectious disease and neurodegenerative disease in order to enhance Grifols IP portfolio.

Other Initiatives

We are increasing our research and development activities in new fields. We conduct these activities through the creation of joint ventures participated in by Grifols Innovation and New Technologies Ltd (“GIANT”), through agreements to use patents owned by third parties and through selective acquisitions. For example, in 2021 GIANT formed a new company named Grifols Pyrenees Research Center, SL in a joint venture with the Government of Andorra (GIANT owns 80%). The new company was created to develop and manage a new research center specializing in immunology, which will enhance the knowledge of the human immune system and develop new immunological therapies. See Notes 2 and 3 to our financial statements included in this annual report.

Our investment in Araclon in 2012 expanded our research and development capabilities in fields outside of our traditional business segments.

Araclon is dedicated to finding solutions that promote new diagnostic and therapeutic approaches to Alzheimer’s disease, to be applied in the early stages of the disease. Araclon is working on the validation of an early diagnostic test and the development of a vaccine to combat Alzheimer’s disease in the asymptomatic preclinical stage. The vaccine has passed the animal experimentation stage and a Phase I clinical trial in humans has been completed. In 2017 Araclon obtained approval by the AEMPS for a Phase II placebo-controlled trial of the AB40 vaccine in Alzheimer disease patients and completed recruitment in 2019. In 2020, a change in the design of the trial was introduced that allows cross-over of the treatment arms, so all the participants could receive the vaccine. We received the top line data of part A of the trial in mid January 2022 and preliminary results are showing an excellent safety profile. The part B and final clinical study report will be available in 2023.

Table of Contents

We completed the acquisition of Alkahest in 2020 (see Item 5 of Part I, “Operating and Financial Review and Prospects—A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Acquisitions—The Alkahest Acquisition”). Alkahest’s platform focuses on identifying proteins that change with age and have a biological impact. To date, Alkahest has identified over 10,000 separate proteins using advanced molecular analysis techniques at the cellular level, some of which we expect to enter in our discovery and development pipeline as new targets. In 2021, Alkahest had a productive year with the completion of 3 Phase 1 and 5 Phase 2 clinical trials. In 2022, Alkahest completed one Phase 2 and two Phase 1 clinical trials.

In 2016, we acquired 30% of the equity of AlbaJuna Therapeutics, a spin-off company from the IrsiCaixa AIDS Research Institute, promoted jointly by “la Caixa” Foundation and the Department of Health of the Government of Catalonia, and undertook the pre-clinical and clinical development of monoclonal antibodies that neutralize the effect of HIV in the body while increasing the activity of the natural killer cells that have the task of destroying infected cells. In 2020, we selected a candidate and began proof of concept studies in non-human primates (“NHP”). We also started process development and manufacturing activities by late 2020. We completed the NHP study in 2022 and the results and are currently under evaluation, along with results from other experiments, to decide how to move forward with the development.

Our subsidiary GigaGen Inc. (“GigaGen”) is developing a novel class of therapeutics, recombinant polyclonal antibodies, to address unmet needs in infectious disease. GigaGen is preparing its next recombinant polyclonal antibody therapeutic candidate, a treatment for chronic hepatitis B virus, for an IND filing in 2024. GigaGen is also preparing its next-generation anti-CTLA-4 monoclonal antibody therapeutic, GIGA-564, for IND filing in 2023.

Finally, we signed an agreement in the first quarter of 2020 to support a consortium with the IrsiCaixa AIDS Research Institute, the Barcelona Supercomputing Center (“BSC”) and the IRTA (Institute of Agrifood Research and Technology) aimed to discover new antibodies and vaccines against COVID-19. The consortium continued in 2022 with some vaccine and antibodies candidates evaluated in in vivo studies in animals.

Seasonality

Our businesses are not significantly affected by seasonal trends.

Raw Materials

The cost of plasma, the key raw material used in the production of plasma-derived products, remained stable in 2022 as compared to 2021. We are currently focused on margin expansion while achieving desired plasma volumes for 2023, and reducing cost per liter of plasma collected to more sustainable levels. To this end, a 20% decrease in donor commitment compensation (“DCC”) in the fourth quarter of 2022 in comparison to the peak in DCC in July drove a 10% reduction in our cost per liter of plasma collected over the same reference period. Other plasma operating costs, accounting approximately for the remaining 65% of the fully-loaded plasma cost, also declined, albeit to a lesser extent, amid the current macroeconomic backdrop.

We continue to monitor the efficiency of our plasma collection platform and have concentrated all of our plasma testing into six laboratories in Austin and San Marcos, Texas, Memphis, Tennessee, Boca Raton, Florida, Leipzig, Germany and Parets, Spain.

Our long-term aim is to further strengthen our leadership through the development of new and differentiated plasma-derived therapeutics, and the expansion of our global plasma collection footprint via acquisitions and greenfield projects. On April 25, 2022, we acquired all of the existing equity interest in Biotest Holdings from Tiancheng International Investment Limited (“TIIL”) and accepted an assignment of certain shareholder loans granted by TIIL to Biotest Holdings. Biotest Holdings in turn owns 89.88% of the ordinary shares and 1.08% of the preferred equity shares of Biotest AG, a global company that supplies plasma protein products and biotherapeutic drugs, which will give us access to 28 additional plasma collection centers. See Item 5 of this Part I, “Operating and Financial Review and Prospects—A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Acquisitions—Biotest AG Acquisition.”

Table of Contents

On July 29, 2021, we signed a joint venture agreement with ImmunoTek GH, LLC (“ImmunoTek”) to develop 21 plasma donation centers in the United States, five of which are already operational. Once all centers become operative and ramped-up, which we expect to happen by October 2022, collectively they will supply an additional plasma capacity of 1 million liters annually. On March 31, 2021, we acquired seven U.S.-based plasma donation centers from Kedplasma, LLC for a total purchase price of $55.2 million. On February 28, 2021, we acquired 25 U.S.-based plasma centers from BPL Plasma Inc for $385 million. These plasma centers obtain, in the aggregate, a run-rate of one million liters of plasma per year. See Item 5 of this Part I, “Operating and Financial Review and Prospects—A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Acquisitions— Acquisition of plasma donation centers from BPL Plasma, Inc.”

In October 2020, we purchased 11 collection centers in the U.S., as well as a plasma fractionation facility and two purification facilities in Montreal, Canada, from GC Pharma for a total consideration of $457 million on a debt free basis. See Item 5 of this Part I, “Operating and Financial Review and Prospects—A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Acquisitions—The GC Pharma Acquisition.”

Furthermore, the Plasma Supply Agreement among Grifols, Grifols Worldwide Operations Limited (“GWWO”), Biotest Pharmaceuticals Corporation and Haema AG (the “Plasma Supply Agreement”), was extended on January 1, 2019 for a 30-year period, and we continue to operate such companies’ plasma collection centers.

The principal raw materials for our intravenous therapy products are plastic and glass bottles, which we purchase from various European suppliers.

Marketing and Distribution

We currently sell Biopharma, Diagnostic and Healthcare Solutions products to hospitals and clinics, GPOs, governments and other distributors in over 100 countries.

In the United States, the sales model is complex, with many intermediaries, requiring Grifols to execute multi-faceted arrangements for the distribution of our products. Sales of finished goods are distributed through various channels such as distributors, wholesalers, specialty pharmacies, home health care companies, clinics, hospitals, government entities and directly to physician offices. Payers and purchasers also control access to products, requiring separate negotiations with payers and GPOs. GPOs are entities that act as purchasing intermediaries for their members, which are primarily hospitals. GPOs negotiate the price and volume of supplies, equipment and pharmaceutical products, including plasma derivatives, used by their members.

We market our products to healthcare providers and other decision-makers, such as those in hospitals, through focused sales presentations. Although price and volume are negotiated through contractual agreements with intermediaries, demand for our products is generated through promotional efforts by Grifols’ sales representatives. In the case of GPOs, the actual sales are made to the authorized distributor(s) of each GPO at the contract price, and the distributor then sells the products to the members of that GPO. We promote our products directly to the GPO’s members. For safety and post-sale service reasons, the distributor is required to provide us with the specifics of the ultimate delivery to the client.

The sales, marketing and distribution process is different in Europe, where the bulk of sales are generally made directly to hospitals. We have developed long-standing relationships with major hospitals in most of our European markets, and we believe that hospitals are loyal customers that recognize the high quality and safety of our products, our reliability as a supplier and the strong product expertise and service provided by our sales representatives. Due to the nature of our customer base and the prevalence of repeat sales in the industry, we market our products through focused sales presentations rather than by advertising campaigns.

Sales to Eastern Europe, the Middle East and some Asian countries are made mostly by third parties outside of our sales network. Our sales in Latin America are made mainly by our sales network.

Table of Contents

Sales Representatives

We require our sales representatives to be able to highlight the technical differences between our products and those of our competitors. This skill requires a high degree of training, as the salesperson must be able to interact and discuss product differences with doctors, pharmacists and other medical staff. Sales representatives call on office-based healthcare providers and hospital-based healthcare providers, departmental heads, purchasing agents, senior hospital directors, lab directors and pharmacy managers. We compensate our sales representatives by means of a fixed salary and a bonus component based on sales. We divide our sales efforts along the lines of our main product categories. Our sales personnel are primarily located in Europe and the United States, but we also have sales personnel in Latin America and Asia-Pacific.

In our Biopharma business unit, we utilize mixed sales units comprised of both marketing and sales personnel. In some countries, we have product line-specific sales units for immunology & neurology, pulmonary, intensive care and coagulation factors.

Advertising

We participate in medical conferences, conventions and fairs and occasionally publish advertisements in medical journals and trade magazines. This promotional activity is also supported by online activities.

Distribution

We believe that having our own distribution network staffed with highly trained personnel is a critical element of a successful sales and marketing effort. Through this network, we are able to provide high-quality pre- and post-sales service, which we believe enhances brand recognition and customer loyalty. Our distribution network is experienced in the proper handling of our products and allows us to know where our products are located, enabling us to act quickly in the event of a suspected problem or product recall.

Our distribution network personnel are located in Europe, Latin America, the United States and Asia-Pacific and handle the distribution of our biological medicine, diagnostic and other medical products as well as goods manufactured by other premier healthcare companies that complement our own products.

During 2021, we distributed the majority of our products through our own distribution network. In some cases, particularly in the field of Diagnostics, we distribute products through marketing partners and third-party distributors. We have a direct presence in 30 countries and we carefully select distributors in the countries where we do not have a direct presence. We have a responsive, effective logistics organization that is able to punctually meet the needs of hospital centers and other customers throughout the world.

Our sales, marketing and distribution network included 1,636 employees as of December 31, 2022, which included 1,469 sales and distribution personnel and 167 marketing employees.

Each of our commercial subsidiaries is responsible for the requirements of the local market. It is our goal for each commercial subsidiary to be recognizable as one of our companies by its quality of service, ethical standards and knowledge of customer needs. Strong local knowledge enables us to build and maintain long-term relationships with customers to earn their trust and confidence.

Patents, Trademarks and Licenses

Patents and Trademarks

Through our patent ownership, co-ownership and licensing, we seek to obtain and maintain intellectual property protection for our primary products.

Table of Contents

As of December 31, 2022, we owned 3,487 patents and patent applications in various countries throughout the world, of which 970 are in the final application process. In some countries, these patents grant a 20-year protection period. 1,435 of these patents are set to expire in the next ten years, including the patent for the Biotest intravenously administered polyclonal immunoglobulin preparation, containing IgM and method of manufacturing (CA1341505C), which expires in May 2023, the patent for the Grifols Sterile Filling system, which expires in January 2024, and the patent for the process of removing viruses in Fibrinogen solutions, which expires in March 2024.

As of December 31, 2022, we also owned 4,167 trademarks in various countries throughout the world, of which 156 are in the final application process. In addition, we co-own certain patents and patent applications with third parties, including patent rights co-owned with Novartis following the Novartis Acquisition.

We maintain a department with personnel in Spain and Ireland to handle the patent and trademark approval and maintenance process and to monitor possible infringements.

Plasma Derivative Products

As of December 31, 2022, we owned 980 patents and patent applications related to plasma derivatives, including 396 in Europe, 112 in the United States and Canada, 470 in the rest of the world and two international patent applications under the Patent Cooperation Treaty, an international treaty allowing patent protection in many countries by filing a single international application. The most important of these patents relate to:

a concentrated subcutaneous alpha-1 antitrypsin;

the use of low volume plasma exchange for the treatment of Alzheimer’s disease;

transferrin for neurodegenerative applications;

transferrin for the treatment of Hipoxia inducible factor related conditions;

plasmin in wound healing;

the process for removing viruses in Fibrinogen solutions;

a concentrated subcutaneous Immunoglobulin G injection;

concentrated Immunoglobulin M preparations for the treatment of bacterial infections; and

anti-thrombin to treat blunt trauma.

Diagnostic Products and Healthcare Solutions

As of December 31, 2022, we owned 190 patents and patent applications related to our Diagnostic products and Healthcare Solutions business line, including 141 in Europe, 32 in the United States and Canada and 17 in the rest of the world. The most important of these patents relate to the:

BlisPack^®, a blister handling machine;

Erytra Eflexys^®, a mid-sized instrument to perform pre-transfusion compatibility tests using DG Gel^® technology;

innovative containers for human plasma proteins;

novel HIV antigens for blood screening;

Table of Contents

novel GpIbα for homeostasis;

soluble recombinant form of CD38 receptor;

screening assays for bloodborne parasites; and

recombinant antigens for detection of COVID-19.

As of December 31, 2022, we owned 93 patents and patent applications related to other areas of the business, including 32 in Europe, 26 in the United States and Canada and 35 in the rest of the world.

Licenses from Third Parties

We license certain intellectual property rights from third parties, including Singulex and Hologic. Singulex granted us an exclusive worldwide license under certain intellectual property rights for the use and sale of certain products and services for blood donor and plasma screening. Pursuant to an intellectual property license with Hologic, we obtained a fully paid-up license to certain of Hologic’s intellectual property for use in the NAT Donor Screening Unit.

Licenses from Government Authorities

Government authorities in the United States, at the federal, state and local level, and in other countries throughout the European Union, Latin America, Asia and elsewhere, through licenses, approvals, reviews, inspections and other requirements, extensively regulate the research, development, testing, approval, manufacturing, labeling, post-approval monitoring and reporting, packaging, promotion, storage, advertising, distribution, marketing and export and import of healthcare products such as those that we collect, manufacture, sell or are currently developing.

For example, in order to sell our plasma derivative products we must hold appropriate product licenses from applicable governmental authorities. We have 1,072 Biopharma product licenses registered in 89 countries, which include the licenses we hold from the FDA for the sale in the United States of IG, A1PI, albumin, Factor VIII, Factor IX, ATIII and PTC. The production, marketing and sale of many of our Diagnostic business unit products are subject to the prior registration of such products with the relevant authorities of the applicable jurisdictions. We have over 3,420 diagnostic product licenses registered in a total of 80 countries in Europe, the United States, Canada, Latin America, Oceania and Asia.

Governmental oversight extends to the various facilities involved in our operations. For example, our Parets and Murcia facilities are subject to applicable regulations and standards of the European health authorities. With respect to oversight by the FDA, our Instituto Grifols Biopharma plant at our Parets facility has been registered with the FDA since 1995, and our other manufacturing facilities maintain FDA registration, and all are subject to FDA standards. We lease most of our plasma collection centers as well as our main laboratory facility located in Austin, Texas, and maintain licenses with the appropriate regulatory authorities, including the FDA, for all of these locations.

For more information on government licenses and regulation, see “—Principal Activities” above and “—E. Regulatory Matters” below.

Regulatory

For detailed information regarding the regulations applicable to our business, see “—E. Regulatory Matters” below.

Table of Contents

Insurance Coverage

General and Product Liability

We have a program of insurance policies designed to protect us and our subsidiaries (including our United States subsidiaries) from product liability claims. Effective May 1, 2022, we have product liability insurance coverage for up to $220 million per claim and in annual aggregate for Diagnostic and Bio Supplies business units for products manufactured in all of our facilities and for third-party products we sell. That limit is of $500 million per claim and in the annual aggregate for Biopharma business unit. This policy expires on April 30, 2023. We have elected to self-insure $188.5 million per claim and in annual aggregate of our global liability program through the purchase by one of our subsidiaries of such portion of the insurance policy. See “—Self-insurance” below.

Our master liability program also protects us and our subsidiaries from certain environmental liabilities arising in those countries in which our subsidiary companies have operations. This risk is covered up to a maximum of $220 million per claim and in annual aggregate, except that amount is $500 million for the Biopharma business unit.

Biomat USA, Inc., Grifols Bio Supplies, Inc., BPC Plasma Inc., Prometic Plasma Resources, Inc., Plasmavita Healthcare GmbH, Plasmavita Healthcare II GmbH, Haema AG and Haema Plasma Kft maintain a separate liability insurance policy. The policy covers their professional liability for plasmapheresis business activities and expires on April 30, 2023. The maximum amount of coverage for liability claims under the policy is $15 million per claim and in the annual aggregate. In addition, we have general liability coverage for up to $500 million per claim and in the annual aggregate for Biomat USA, Inc., Grifols Bio Supplies, Inc., BPC Plasma Inc., Prometic Plasma Resource, Inc., Plasmavita Healthcare GmbH, Plasmavita Healthcare II GmbH, Haema AG and Haema Plasma Kft.

Property Damage and Business Interruption

Our property damage and business interruption insurance program covers us and our subsidiaries (including our United States subsidiaries). This insurance program, which expires on April 30, 2022, covers damages suffered by plants and buildings, equipment and machinery. Under the current terms, the insurer will cover damages to our facilities produced by fire, smoke, lightning and explosions, among others, for up to $1.5 billion per occurrence. It also covers property damage produced by flooding, for up to $110 million per claim and in the annual aggregate.

In addition, this policy covers loss of profit for a period of 36 months with a deductible equivalent to up to five business days of lost profits. Pursuant to the loss of profit, in the event that any or all of our plants stop production due to an event not excluded under the policy, the insurer covers fixed expenses, in addition to net profits we did not earn during the term of coverage.

We also have a transit and inventory insurance program, which covers damages to raw materials, supplies, semi-finished products and finished products for up to $25 million per claim for transit and $500 million for inventory in annual aggregate.

Self-insurance

We are self-insuring part of the risks described above through the purchase of a portion of the relevant insurance policies by Squadron Reinsurance DAC, one of our wholly owned subsidiaries. We self-insure $38.5 million per claim per year of our global liability program (except that amount is $188.5 million per claim and in the annual aggregate for the Biopharma business unit), the first $230,000 per loss for property damage and the first ten days of lost profits, the first $27,000 per claim for transit losses, the first $200,000 per claim for inventory losses and any transit or inventory losses exceeding $2 million have an additional retention of 10% of loss value with a maximum of $500,000 per loss and an annual aggregate of $3 million. These amounts are in excess of the deductibles for each of the policies that make up our insurance programs.

Table of Contents

Climate Change

Aligned with the United Nations’ plan to achieve the sustainable development goals defined in its 2030 agenda, we have set commitments to help preserve the environment. Since 2020, our environmental program included the reduction of emissions through the use of 68 million kWh of renewable electricity through power purchasing agreements, the construction of two new photovoltaic plants (in Barcelona and Murcia) and the construction of new refrigeration plants with refrigerant gases with a global warming potential equal to zero. With the aim of replacing the most polluting technologies, we regularly analyze the technological options available on the market, with a special focus on technologies that increase the climate resilience of our facilities.

By 2030, we are committed to reducing our greenhouse gas emissions per unit of production by 55%, increasing our energy efficiency per unit of production by 15% and ensuring that 100% of the electricity consumed in our facilities originates from renewable sources. We are also committed to facilitating the decarbonization of transport in business trips and employee commutes, protecting biodiversity in our properties through the Grifols Wildlife Program, and continuing to implement circular economy measures in every stage of our operational cycle. We are committed to achieving carbon neutrality by 2050.

We invested €8.4 million in 2022 in environmental assets (€7.3 million in 2021 and €2.8 million in 2020), mainly intended to optimize water consumption, make improvements in wastewater treatment, eco-efficiency projects in the use of energy and the replacement of refrigerant gases with others with a lower environmental impact. Our expenses for the protection and improvement of the environment in 2022 amounted to approximately €25.8 million (€20.6 million in 2021 and €20.5 million in 2020).

Organizational Structure

Grifols, S.A. is the parent company of the Grifols Group, which was comprised at December 31, 2022, of 87 companies. Subsidiaries in which Grifols, S.A. directly or indirectly owned the majority of equity or voting rights have been fully consolidated. In addition, there were five companies that were accounted for using the equity method, because Grifols, S.A. owned between 20% and 50% of its share capital and had no power to govern its financial or operating policies.

See Notes 1 and 2(b) to our audited consolidated financial statements included in this annual report on Form 20-F for details of our consolidated and non-consolidated companies.

Table of Contents

Property, Plant and Equipment

Our headquarters is located in Barcelona, Spain. As of December 31, 2022, we owned or leased facilities in seven countries. We currently own or lease manufacturing facilities in 13 sites in 11 different locations, five of which have plasma fractionation capabilities. The table below shows the geographic location and business purpose of our principal properties as of December 31, 2022.

Location	Facility	Own/Lease ⁽²⁾	Business Purpose

Parets del Vallès, Spain	Industrial Facility One Parets	66% owned; 34% of the property is leased from a third party	Plasma fractionation Manufacture of plasma derivatives & business unit support activities

	Industrial Facility Two Parets	80% owned; 20% of the property is leased from a third party	Manufacture of Diagnostic and Healthcare Solutions products

	Industrial Facility Three Parets	68% owned; 32% of the property is leased from a third party	Plasma storage & other operating activities

Los Angeles, California, U.S. – Valley	Industrial Facility, U.S.	92% owned; 8% of the property is leased from a third party	Plasma fractionation Plasma purification Manufacture of plasma derivatives

Los Angeles, California, U.S. – City of Industry	City of Industry, U.S.	100% leased	Plasma storage

Clayton, North Carolina, U.S.	Clayton Facility	100% owned	Plasma fractionation Plasma purification Manufacture of plasma derivatives

Durham, North Carolina, U.S.	Research Triangle Park	22% owned, 78% of the property is leased from a third party	Research and Development Labs and Offices

Emeryville, California, U.S.	Emeryville Facility	100% owned	Manufacture of Diagnostic products

San Carlos, California, U.S.	Alkahest site	100% leased	Research and Development Labs and Offices

South San Francisco, California, U.S.	GigaGen site	100% leased	Research and Development Labs and Offices

Murcia, Spain	Industrial Facility Murcia	100% owned	Manufacture of Healthcare Solutions products

Fribourg, Switzerland	Industrial Facility Switzerland	100% leased	Manufacture of Diagnostic products

Melbourne, Australia	Industrial Facility Australia	100% owned	Manufacture of Diagnostic products

Austin, Texas, U.S.	Plasma Testing Lab	100% leased	Plasma testing

San Marcos, Texas, U.S.	Plasma Testing Lab	100% owned	Plasma testing

San Diego, California, U.S.	San Diego Facility	75% owned; another 25% of the property is leased from a third party	Manufacture of components of the TMA amplified NAT kits

Dublin, Ireland	Global Operations Center	⁽¹⁾	Operating activities related to the Biopharma business unit

Sant Cugat del Vallès, Barcelona, Spain	Headquarters	100% leased	Headquarters

Derio, Bizkaia, Spain	Progenika Biopharma	90% owned, 10% leased	Manufacture of Diagnostic products & Research and Development

Zaragoza, Spain	Araclon Biotech	100% leased	Research and Development Labs and Offices

Arrasate, Guipuzcoa, Spain	Kiro Grifols	100% leased	Manufacture of Hospital equipment and Offices

Memphis, Tennessee, US	IBBI	57% owned, 43% leased	Plasma Lab

Leipzig, Germany	Haema	100% owned	Headquarters, Lab & Warehouse

Montreal, Canada	Industrial Facility Montreal	100% owned	Plasma fractionation Plasma purification

Dreieich, Germany	Industrial Facility Dreieich	86% owned, 14% leased	Plasma fractionation

(1)	We hold a 999 year leasehold interest in the property.

(2)	Lease percentage based on property size.

Table of Contents

Plasma Fractionation Plants

Our plasma derivative products are manufactured at our Parets, Los Angeles, Clayton and Dreieich facilities. All of our fractionation facilities have FDA and EMA certification. As of December 31, 2022, our facilities had an aggregate fractionation capacity of approximately 22 million liters of plasma per year, and this capacity is sufficient to cover our current production needs.

The Parets facility has a fractionation capacity of 5.0 million liters per year and a unique design that separates the maintenance area from the clean areas required for the fractionation and purification procedures. This design, which we developed in house, minimizes the risk of contamination and reduces maintenance costs. In addition to licenses from the European Union and other required specific authorities for the production of various plasma derivative products, the Parets facility is also licensed by the FDA. In addition to the plasma fractionation facilities, the Parets site also has protein purification, fill and finish, packaging, storage, research and development and energy co-generation facilities for the Biopharma business unit and manufacturing for the Diagnostic business unit and Healthcare Solutions business line. The Parets facility holds GMP’s, ISO 13485 and ISO 14001 for the Biopharma, Diagnostic and Healthcare Solutions plants and ISO 9001 certifications for its diagnostic manufacturing facilities.

The Los Angeles facility has a fractionation capacity of 2.4 million liters per year. The facility contains purification and aseptic filling areas for coagulation factors, IG and albumin. The facility is licensed by the FDA and Grifols is working to certify the Los Angeles facility with ISO 14001 certification, similar to the rest of Grifols’ manufacturing plants.

We increased the capacity of our Clayton facility in North Carolina by two million liters in 2022, reaching a fractionation capacity of 11.8 million liters per year. This facility is one of the world’s largest fully integrated facilities for plasma-derived therapies, including plasma receiving, fractionation, purification, filling/freeze drying and packaging capabilities, as well as freezer storage, testing laboratories and a cGMP pilot plant for clinical supply manufacture. This facility holds the ISO 14001 certification, which recognizes excellence and continuous improvement in environmental performance. The scope of the certification includes research, development, production and quality control of pharmaceutical specialties derived from human plasma.

In October 2020, we acquired the Montreal facility as a result of the GC Pharma acquisition. The facility, which is pending licensing and approvals by the appropriate authorities, is designed for a fractionation capacity of one million liters per year, and is currently being revamped to increase the capacity to 1.5 million liters per year. Grifols expects to launch operations in these facilities in 2023, manufacturing IVIG and albumin to supply the Canadian market.

We completed construction of the new albumin purification, dosing and sterile filling plant in Dublin, Ireland, with a capacity of three million liters per year.

In April 2022, we acquired the Dreieich facility as a result of the Biotest AG acquisition. The facility has an annual manufacturing capacity of up to three million liters of plasma, as well as bulk production plants for albumin, new fibrinogen and IgM concentrate product lines and next-generation polyvalent immunoglobulins.

Global Operations Center

In the last quarter of 2015, we opened a global operations center for our Biopharma business unit. The facility, located in Dublin, Ireland, occupies 22,846 square meters and centralizes decision-making with regard to commercial policy, research and development policy and supply chain global management. It houses Biopharma’s global logistics and distribution activities; warehousing of plasma, intermediate paste and finished product, labelling and secondary packaging of the product; as well as regulatory and quality activities relating to the supply of plasma and plasma derivatives. It also centralizes our treasury function and acts as our point of access to the capital markets.

Table of Contents

Regulatory Matters

Government Regulation

Government authorities in the United States, at the federal, state and local level, and in other countries extensively regulate, among other things, the research, development, testing, approval, manufacturing, labeling, post-approval monitoring and reporting, packaging, promotion, storage, advertising, distribution, marketing and export and import of healthcare products such as those we collect, manufacture, sell or are currently developing. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. The following is a summary of the overall regulatory landscape for our business.

United States Government Regulation

In the United States, the FDA regulates drugs, biologics, plasma collection and medical devices under the FDCA and, as applicable, the PHS Act, and their implementing regulations. Failure to comply with the applicable FDA requirements at any time during the product-development process, approval process or after approval may result in administrative or judicial sanctions. These sanctions could include, as applicable, the FDA’s imposition of a clinical hold on trials for drugs, devices or biologics, refusal to approve pending applications, withdrawal of an approval, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties or criminal prosecution or any combination of these sanctions. Any agency or judicial enforcement action could have a material adverse effect on us.

The BLA (Biologics License Application) Approval Process

Drugs that are also biological products, such as our plasma derivative products IG, A1PI, Factor VIII and albumin, and also certain in vitro diagnostic products associated with testing blood and blood components, must also satisfy the requirements of the PHS Act and its implementing regulations. In order for a biological drug product, or for these in vitro diagnostic tests, to be legally marketed in the United States, the product must have a BLA approved by the FDA. Obtaining BLA approval from the FDA is a robust process involving, among other things, completion of preclinical laboratory tests, controlled human clinical trials, submission of manufacturing and chemistry data, and multiple statistical and physical review processes by the FDA. During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data and clinical trial investigators, including reports regarding adverse events and safety issues.

Given the robust process, certain of our clinical trials may not be completed successfully within any specified period, if at all. Furthermore, we or the FDA may suspend or terminate clinical trials at any time on various grounds, including a finding that the subjects or patients are being exposed to an unacceptable health risk, have experienced a serious and unexpected adverse event, or that continued use in an investigational setting may be unethical. Similarly, an IRB can suspend or terminate approval of research if the research is not being conducted in accordance with the IRB’s requirements or if the research has been associated with unexpected serious harm to patients.

Overall, the testing and approval processes require substantial time and effort and there can be no assurance that the FDA will accept the BLA for filing and, even if filed, that any approval will be granted on a timely basis, if at all. In most cases, the BLA must be accompanied by a substantial user fee.

Table of Contents

The ACA introduced a new abbreviated regulatory approval pathway for biological products found to be “biosimilars” or “interchangeable” with a biological “reference product” previously licensed under a BLA. This abbreviated approval pathway is intended to permit a biosimilar to come to market more quickly and less expensively by relying to some extent on the data generated by the reference product’s sponsor, and the FDA’s previous review and approval of the reference product. The law provides that no biosimilar application may be accepted for FDA review until 4 years after the date the reference product was first licensed by the FDA, and that the FDA may not make approval of an application effective until 12 years after the reference product was first licensed. Once approved, biosimilars likely would compete with, and in some circumstances may be deemed under applicable laws to be “interchangeable with,” the previously approved reference product. The extent to which a biosimilar, once approved, will be substituted for any of our products, in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing. The FDA is actively seeking to encourage the entry of biosimilars into the marketplace, including issuing, in July 2018, its Biosimilar Action Plan, intended to enhance the speed of the biosimilar development and approval processes.

The testing and approval processes to obtain a BLA require substantial time, effort and financial resources, and each process may take several years to complete. Data obtained from clinical activities is not always conclusive and may be susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. The FDA may not grant approval on a timely basis, or at all. We may encounter difficulties or unanticipated costs in our efforts to secure necessary governmental approvals, which could delay or preclude us from marketing our products. The FDA may limit the indications for use or place other conditions on any approvals that could restrict the commercial application of the products.

Post-approval Requirements

After regulatory approval of a product is obtained, we are required to comply with a number of post-approval requirements. For example, as a condition of approval of a BLA, the FDA may require post-marketing testing and surveillance to monitor the product’s safety or efficacy. In addition, holders of an approved BLA are required to keep extensive records, to report certain adverse reactions and production problems to the FDA, to provide updated safety and efficacy information and to comply with requirements concerning advertising and promotional labeling for their products. Also, quality control and manufacturing procedures must continue to conform to cGMP regulations and practices, as well as the manufacturing conditions of approval set forth in the BLA. The FDA periodically inspects manufacturing facilities to assess compliance with cGMP, which imposes certain procedural, substantive and recordkeeping requirements. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.

Future FDA inspections may identify compliance issues at our facilities or at the facilities of our third-party suppliers that may disrupt production or distribution, or require substantial resources to correct and prevent recurrence of any deficiencies, and could result in fines or penalties by regulatory authorities. In addition, discovery of problems with a product or the failure to comply with applicable requirements may result in restrictions on a product, manufacturer or holder of an approved BLA, including withdrawal or recall of the product from the market or other voluntary, FDA-initiated or judicial action that could delay or prohibit further marketing. Newly discovered or developed safety or efficacy data may require changes to a product’s approved labeling, including the addition of new warnings and contraindications. The ACA established and provided significant funding for a Patient-Centered Outcomes Research Institute to coordinate and fund Comparative Effectiveness Research. Also, new government requirements, including those resulting from new legislation, may be established that could delay or prevent regulatory approval of our products under development.

Table of Contents

Orphan Drug Designation

The FDA may grant orphan drug designation to drugs intended to treat a “rare disease or condition” that affects fewer than 200,000 individuals in the United States, or that affects more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for such a disease or condition will be recovered from sales in the United States for that drug. Orphan drug designation must be requested before submitting an application for marketing approval. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. Orphan drug designation can provide opportunities for grant funding towards clinical trial costs, tax advantages and FDA user fee exemptions. In addition, if a product that has an orphan drug designation subsequently receives the first FDA approval for the indication for which it has such designation, the product is entitled to orphan drug exclusivity, which means the FDA may not approve any other application to market the same drug for the same indication for a period of seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or a meaningfully different mode of administration. Competitors may receive approval of different drugs or biologics for the indications for which the orphan product has exclusivity. However, if a company with orphan drug exclusivity is not able to supply the market, the FDA could allow another company with the same drug a license to market for said indication. The FDA granted Gamunex^® IVIG orphan drug status, which provided marketing exclusivity for the CIDP indication in the United States through September 2015. Gamunex^® IVIG was the first IVIG product approved for CIDP in the United States.

Fast Track Designation

The FDA’s fast track programs, one of which is fast track designation, are designed to facilitate the development and review of new drugs that are intended to treat serious or life-threatening conditions and that demonstrate the potential to address unmet medical needs for the conditions. Fast track designation applies to a combination of the product and the specific indication for which it is being studied. Thus, it is the development program for a specific drug for a specific indication that receives fast track designation.

The sponsor of a product designated as being in a fast track drug development program may engage in close early communication with the FDA, including through timely meetings and feedback on clinical trials. Products in fast track drug development programs also may receive FDA priority review or accelerated approval; in other words, the review cycle has a six-month review clock instead of a ten- or 12-month review clock. Sponsors may also be able to submit completed portions of an application before the entire application is completed; however, the review clock will not officially begin until the entire completed BLA is submitted to and filed by the FDA. The FDA may notify a sponsor that its program is no longer classified as a fast track development program if the fast track designation is no longer supported by emerging data, the designated drug development program is no longer being pursued, or another product that meets the unmet medical need for the same indication is approved first.

Plasma Collection

The FDA requires a licensing and certification process for each plasma collection center prior to opening and conducts periodic inspections of facilities and processes. Many states also regulate plasma collection, imposing similar obligations and additional inspections and audits. Collection centers are subject to periodic inspections by regulatory authorities, which if noncompliance is alleged, may result in fines, citations, the temporary closing of the centers, loss or suspension of licenses or recall of finished products.

Diagnostic Devices

Certain of our products are regulated as medical devices, which are typically subject to clearance for commercialization in the United States, based on a pre-market notification to the FDA demonstrating the device to be marketed is safe and effective by proving substantial equivalence to a legally marketed device (predicate device). The manufacturers of medical devices must register their establishments with the FDA, and the production of the devices must accord with applicable current good manufacturing practices and quality system regulations. With respect to the manufacture and sale of immunoassay antigens and antibodies to screen human donated blood and blood products, these products are manufactured and sold under a BLA issued by the FDA, and are subject to the heightened regulatory oversight associated with biological products.

Table of Contents

Drug Supply Chain Security Act

The Federal Drug Quality and Security Act of 2013 brought about significant changes with respect to pharmaceutical supply chain requirements and pre-empts state law. Title II of this measure, known as the Drug Supply Chain Security Act (“DSCSA”), is being phased in over 10 years, and is intended to build a national electronic, interoperable system to identify and trace certain prescription drugs as they are distributed in the United States, including certain of our products. The law’s track and trace requirements applicable to manufacturers, wholesalers, repackagers and dispensers (e.g., pharmacies) of prescription drugs began to take effect in January 2015 and will continue to be implemented. The DSCSA product tracing requirements replaced the former FDA drug pedigree requirements and pre-empt state requirements that are inconsistent with, more stringent than, or in addition to, the DSCSA requirements. The DSCSA also establishes certain requirements for the licensing and operation of prescription drug wholesalers and third party logistics providers (“3PLs”), and includes the creation of national wholesaler and 3PL licenses in cases where states do not license such entities. The DSCSA requires that wholesalers and 3PLs distribute drugs in accordance with certain standards regarding the recordkeeping, storage and handling of prescription drugs. According to FDA guidance, states are pre-empted from imposing any licensing requirements that are inconsistent with, less stringent than, directly related to, or covered by the standards established by federal law in this area. Current state licensing requirements will likely remain in effect until the FDA issues new regulations as directed by the DSCSA.

Anti-fraud and Abuse Regulation

Since we supply products and services that are reimbursed by U.S. federal healthcare programs such as Medicare and Medicaid, our activities are also subject to regulation by CMS and enforcement by the OIG. The Anti-Kickback Law prohibits providers and others from directly or indirectly soliciting, receiving, offering or paying any remuneration with the intent of generating referrals or orders for services or items covered by a government health care program. Many states have similar laws. Courts have interpreted this law very broadly, including by holding that a violation has occurred if even one purpose of the remuneration is to generate referrals, even if there are other lawful purposes. There are statutory and regulatory exceptions, or safe harbors, that outline arrangements that are deemed lawful. However, the fact that an arrangement does not fall within a safe harbor does not necessarily render the conduct illegal under the Anti-Kickback Law. In sum, even legitimate business arrangements between the companies and referral sources could lead to scrutiny by government enforcement agencies and require extensive company resources to respond to government investigations. Also, certain business practices, such as payment of consulting fees to healthcare providers, sponsorship of educational or research grants, charitable donations, interactions with healthcare providers that prescribe products for uses not approved by the FDA and financial support for continuing medical education programs, must be conducted within narrowly prescribed and controlled limits to avoid any possibility of wrongfully influencing healthcare providers to prescribe or purchase particular products or as a reward for past prescribing.

The FCA is violated by any entity that “presents or causes to be presented” knowingly false claims for payment to the federal government. In addition, the ACA amended the FCA to create a cause of action against any person who knowingly makes a false statement material to an obligation to pay money to the government or knowingly conceals or improperly decreases an obligation to pay or transmit money or property to the government, including clarifying that a federal Anti-Kickback Law violation can be a basis for federal FCA liability. For the purposes of these recent amendments, an “obligation” includes an identified overpayment, which is defined broadly to include “any funds that a person receives or retains under Medicare and Medicaid to which the person, after applicable reconciliation, is not entitled …”

Table of Contents

The fraud and abuse laws and regulations have been subject to heightened enforcement activity over the past few years, and significant enforcement activity has been the result of “relators” who serve as whistleblowers by filing complaints in the name of the United States (and if applicable, particular states) under applicable false claims laws, and who may receive up to 30% of total government recoveries. Penalties under fraud and abuse laws may be severe, and could result in significant civil and criminal penalties and costs, including the loss of licenses and the ability to participate in federal and state health care programs, and could have a material adverse effect on our business. Also, these measures may be interpreted or applied by a prosecutorial, regulatory or judicial authority in a manner that could require us to make changes in our operations or incur substantial defense and settlement expenses. Even unsuccessful challenges by regulatory authorities or private relators could result in reputational harm and the incurring of substantial costs. Most states have adopted similar state false claims laws, and these state laws have their own penalties which may be in addition to federal FCA penalties, as well as other fraud and abuse laws.

We also are subject to certain United States and foreign laws and regulations concerning the conduct of our foreign operations, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, German anti-corruption laws and other anti-bribery laws and laws pertaining to the accuracy of our internal books and records, which have been the focus of increasing enforcement activity globally in recent years.

The PPS Act has imposed new reporting and disclosure requirements for biologic, drug and device manufacturers with regard to payments or other transfers of value made to certain practitioners, such as physicians and teaching hospitals, and for such manufacturers and for group purchasing organizations, with regard to certain ownership interests held by physicians in the reporting entity. CMS publishes information from these reports on a publicly available website, including amounts transferred and physician and teaching hospital identities. Amendments expanded the law to also require reporting, effective January 1, 2022, of payments or other transfers of value to physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and certified nurse-midwives, and this new requirement will be effective for data collected beginning in calendar year 2021. The PPS Act preempts similar state reporting laws, although we or our subsidiaries may also be required to report under certain state transparency laws that address circumstances not covered by the PPS Act, and some of these state laws, as well as the federal law, can be ambiguous. We are also subject to foreign regulations requiring transparency of certain interactions between suppliers and their customers.

Other Health Care Regulation

In the United States, government actions to seek to increase health-related price transparency may also affect our business. For example, on November 12, 2020, CMS issued final rules imposing price transparency requirements on hospitals and group health plans. Specifically, beginning in 2022, group health plans must post, on a public internet website, in-network provider negotiated rates (which include rates with device suppliers and manufacturers), historical out-of-network allowed amounts and drug pricing information. This may result in the publication of our negotiated rates with various providers and group health plans, which could impact our ability to independently negotiate sales contracts and rate agreements.

Another notable Medicare health care reform initiative, the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”), enacted on April 16, 2015, established a new payment framework, which modified certain Medicare payments to “eligible clinicians,” including physicians, dentists and other practitioners. Under MACRA, certain eligible clinicians are required to participate in Medicare through the Merit-Based Incentive Payment System (“MIPS”) or Advanced Alternative Payment Models (“APMs”), through which Medicare reimbursement to eligible clinicians includes both positive and negative payment adjustments that take into account quality, promoting interoperability, cost, and improvement activities. Data collected in the first MIPS performance year (2017) determined payment adjustments that began January 1, 2019. MACRA standards continue to evolve, and represent a fundamental change in physician reimbursement that is expected to provide substantial financial incentives for physicians to participate in risk contracts, and to increase physician information technology and reporting obligations. The implications of the implementation of MACRA are uncertain and will depend on future regulatory activity and physician activity in the marketplace. New payment and delivery system reform programs, including those modeled after such federal program, are also increasingly being rolled out at the state level through Medicaid administrators, as well as through the private sector, which may further alter the marketplace and impact our business.

Table of Contents

Recently, in addition to other government efforts to control health care costs, there has been increased scrutiny on drug pricing and concurrent efforts to control or reduce drug costs by Congress, the President, executive branch agencies and various states. At the state level, several states have adopted laws that require drug manufacturers to provide advance notice of certain price increases and to report information relating to those price increases, while others have taken legislative or administrative action to establish prescription drug affordability boards or multi-payer purchasing pools to reduce the cost of prescription drugs. At the federal level, several related bills have been introduced and regulations proposed which, if enacted or finalized, respectively, would impact drug pricing and related costs.

Antitrust and Consumer Protection

The U.S. federal government, most U.S. states and many foreign countries have antitrust laws that prohibit certain types of conduct deemed to be anti-competitive, as well as consumer protection laws that seek to protect consumers from improper business practices. At the U.S. federal level, the FTC oversees enforcement of these types of laws, and states have similar government agencies. Violations of antitrust or consumer protection laws may result in various sanctions, including criminal and civil penalties. Private plaintiffs may also bring civil lawsuits against us in the United States for alleged antitrust law violations, including claims for treble damages.

European Community Government Regulation

In addition to regulations in the United States, we are subject to a variety of regulations in other jurisdictions governing clinical trials and commercial sales and distribution of our products. Whether or not we obtain FDA approval for a product, we must obtain approval of a product by the comparable regulatory authorities of countries outside the United States before we can commence marketing that product in those countries. The approval process varies from country to country, and the time may be longer or shorter than that required for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to country. Also, in addition to approval of final products, plasma collection centers for manufacture into products to be distributed in the European Union must also be approved by the competent European health authority.

Medicines can be authorized in the European Union by using either the centralized authorization procedure or national authorization procedures. The EMA is responsible for the centralized authorization procedure.

Centralized Authorization Procedure

The EMA is responsible for the centralized procedure, or Community authorization procedure, for human medicines. This procedure results in Community marketing authorization, the single marketing authorization that is valid across the European Union, as well as in the European Economic Area/European Free Trade Association states Iceland, Liechtenstein and Norway.

The Community authorization procedure is compulsory for:

medicines derived from biotechnology processes, such as genetic engineering;

advanced-therapy medicines, such as gene-therapy, somatic cell-therapy or tissue-engineered medicines;

medicinal products for human use containing a new active substance that did not receive Community marketing authorization when the Community authorization procedure was first implemented, for which the therapeutic indication is the treatment of human immunodeficiency virus (“HIV”) or acquired immune deficiency syndrome (“AIDS”), cancer, neurodegenerative disorders, diabetes, autoimmune diseases and other immune dysfunctions or viral diseases; and

officially designated orphan medicines (medicines for rare diseases).

Table of Contents

The Community authorization procedure is optional for products:

containing new active substances for indications other than those stated above;

representing significant therapeutic, scientific or technical innovations; or

for which the granting of a Community marketing authorization would be in the interests of European Union public health.

Our blood derivative products are not subject to compulsory Community authorization, but it is an option for our new products. Flebogamma^® DIF 50 mg/ml and 100 mg/ml, VeraSeal solutions for sealant and Tavlesse (fostamatinib) were approved through the Community authorization procedure.

Applications through the Community authorization procedure are submitted directly to the EMA. Evaluation by the EMA’s relevant scientific committee takes up to 210 days, at the end of which the committee adopts an opinion on whether the medicine should be marketed. This opinion is then transmitted to the European Commission, which has the ultimate authority for granting marketing authorizations in the European Union.

Once a Community marketing authorization has been granted, the holder of that authorization can begin to make the medicine available to patients and healthcare professionals in all European Union countries.

National Authorization Procedures

Each European Union member state has its own procedures for the authorization, within its own territory, of medicines that fall outside the scope of the Community authorization procedure. There are two possible routes available to companies for the authorization of such medicines in several countries simultaneously.

Decentralized procedure. Using the decentralized procedure, companies may apply for simultaneous authorization in more than one European Union country of medicines that have not yet been authorized in any European Union country and that do not fall within the mandatory scope of the centralized procedure.

Mutual-recognition procedure. In the mutual-recognition procedure, a medicine is first authorized in one European Union member state, in accordance with the national procedures of that country. Following such authorization, further marketing authorizations can be sought from other European Union member states in a procedure whereby the countries concerned agree to recognize the validity of the original, national marketing authorization.

Our products Niuliva 250 I.U./ml and Xembify 200 mg/ml were approved through the decentralized procedure. Our products Prolastina^® 1000 mg/ml, and Gamunex^® 10% and some of the Human Albumin Grifols / Albutein licenses were approved through the mutual-recognition procedure. All our other products were approved pursuant to individual national procedures. We expect to use the mutual-recognition procedure if we want to extend our product licenses to other European countries in the future.

In some cases, disputes arising in these procedures can be referred to the EMA for arbitration as part of a “referral procedure.”

Orphan Drug Designation

Applications for designation of orphan medicines are reviewed by the EMA through the Committee for Orphan Medicinal Products. The criteria for orphan designation are:

the medicinal product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting no more than five in 10,000 persons in the European Union at the time of submission of the designation application (prevalence criterion);

Table of Contents

the medicinal product is intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition, and without incentives it is unlikely that the revenue after marketing of the medicinal product would cover the investment in its development; and

either no satisfactory method of diagnosis, prevention or treatment of the condition concerned is authorized, or, if such method exists, the medicinal product will be of significant benefit to those affected by the condition.

Companies with an orphan designation for a medicinal product benefit from incentives such as:

protocol assistance (scientific advice for orphan medicines during the product-development phase);

direct access to centralized marketing authorization and 10-year marketing exclusivity;

financial incentives (fee reductions or exemptions); and

national incentives detailed in an inventory made available by the European Commission.

Since December 2011, orphan medicinal products are eligible for the following level of fee reductions:

full (100%) reduction for small- and medium-sized enterprises, or SMEs, for protocol assistance and follow-up, full reduction for non-SME sponsors for pediatric-related assistance and 75% reduction for non-SME sponsors for non-pediatric assistance;

to determine which companies are eligible for SME incentives, the EMA applies the definition of micro-, small- and medium-sized enterprises provided in the Commission of the European Communities’ Commission Recommendation 2003/361/EC. To qualify for assistance, companies must be established in the European Economic Area, employ less than 250 employees and have an annual turnover of not more than €50 million or an annual balance sheet total of not more than €43 million;

full reduction for pre-authorization inspections and 90% reduction for post-authorization inspections for small- and medium-sized enterprises;

full reduction for SMEs for new applications for Community marketing authorization and 10% reduction for non-SME sponsors; and

full reduction for post-authorization activities including annual fees only to small and medium sized enterprises in the first year after granting a marketing authorization.

We have EMA Orphan Drug Designations for the following products:

alpha-1 proteinase inhibitor (for inhalation use) for the treatment of cystic fibrosis; and

alpha-1 proteinase inhibitor (for inhalation use) for the treatment of congenital alpha-1 antitrypsin deficiency.

Because each of these products is already authorized for a non-orphan indication in the EU, in order to obtain marketing authorization for any of the above-mentioned orphan indications, we would be required to apply for a separate marketing authorization through the Community authorization procedure for such indication, using a different proprietary name. It is not possible to extend the existing marketing authorization to cover the new orphan indication. Orphan and “non-orphan” indications cannot be covered by the same marketing authorization.

Table of Contents

United Kingdom Regulatory Process

The United Kingdom (“U.K.”) withdrew from the E.U. on January 31, 2020, and is no longer an E.U. Member State. A transition period, during which E.U. pharmaceutical law continued to be applicable to the U.K., has ended on December 31, 2020.

As of January 1, 2021, the protocol in Ireland/Northern Ireland is applicable and has an impact on marketing authorizations for medicinal products in the U.K. with respect to Northern Ireland.

There are several routes to obtain a marketing authorization in the U.K., England, Scotland and Wales (“Great Britain”) or Northern Ireland. The options available are determined by the intended market and the type of application. To obtain a marketing authorization, you need to use one of the following procedures:

National Routes:

Innovative Licensing and Access Procedure (“ILAP”). The ILAP aims to accelerate the time to market and facilitate patient access for innovative medicines, including new chemical entities, and biological medicines, new indications and repurposed medicines;

National Procedure (a 150-day procedure). This national 150-day accelerated procedure is available for high-quality applications to market a medicine in the United Kingdom, Great Britain (England, Wales and Scotland) or Northern Ireland;

Rolling review. Permits the submission of your application in module(s), to obtain a marketing authorization in the United Kingdom, Great Britain (England, Wales and Scotland) or Northern Ireland. This is a new route for marketing authorization applications, where an applicant for a new active substance in the U.K., Great Britain, or Northern Ireland submits modules of the eCTD dossier incrementally for pre-assessment by the MHRA, rather than as part of a consolidated full dossier submission.

This rolling review is intended to streamline the development of novel medicines by offering periodic enhanced regulatory interaction and advice to reduce the risk of failure at the final phase and may be integrated with the Target Development Profile (“TDP”) to provide a clearer pathway for development of innovative medicines.

Marketing authorization applications for any new active substance based on a “full dossier,” including biological products, are eligible for the rolling review;

EC Decision Reliance Procedure (a 67-day procedure). For products under evaluation or approved in the E.U. centralized procedure, and for a period of three years from January 1, 2021, Great Britain (may rely on decisions taken by the European Commission (“EC”) when considering the approval of new marketing authorizations.

A letter of intent should be submitted to MHRA at least four weeks before the Committee for Medicinal Products (“CHMP”) opinion is expected. Marketing authorization applications should be submitted to MHRA on receipt of a positive opinion from the CHMP and should contain the entire dossier as reviewed by CHMP, all iterations of the assessment reports and the positive CHMP opinion.

All U.K. national requirements will apply. Confirmation of the EC decision should be provided immediately on receipt to allow determination of a Great Britain marketing authorization as close to the EC approval as practicable.

MR/DC Reliance Procedure (a 67-day procedure).The MHRA may rely on marketing authorizations approved through European decentralized (“DC”) and mutual recognition (“MR”) procedures, with a view to granting a marketing authorization in the United Kingdom or Great Britain.

Applications should include the dossier approved for marketing in the E.U. member states, accompanied by all iterations of the Reference Member State (“RMS”) assessment report and the RMS end of procedure notification. Applications will be reviewed for compliance with U.K.-specific requirements;

Table of Contents

Unfettered Access from Northern Ireland (a 67-day procedure). Applicants may seek recognition in Great Britain of a marketing authorization approved in Northern Ireland under certain qualifying conditions.

This route is available for marketing authorizations approved in Northern Ireland via European MR or DC or through the national procedure, if the marketing authorization holder is established in Northern Ireland and the product is distributed from Northern Ireland to Great Britain.

For authorizations approved in E.U. procedures, applications should include the dossier as approved for marketing in Northern Ireland, accompanied by all iterations of the relevant RMS and CHMP assessment reports.

Note that national applications intended to cover marketing of a product in Northern Ireland must continue to comply with the requirements of Directive 2001/83/EC, the European Community’s code relating to medicinal products for human use, and Regulation 726/2004 on European Community procedures and supervision of medicinal products.

International routes (collaborative procedures):

Access consortium. The Access consortium is a medium-sized coalition of regulatory authorities that work together to promote greater regulatory collaboration and alignment of regulatory requirements for companies intending to market a medicine in the U.K., Australia, Canada, Singapore and/or Switzerland. The MHRA joined the consortium in 2020 and commenced work-sharing applications in January 2021; and

Project Orbis. Project Orbis is a program coordinated by the FDA involving the regulatory authorities of Australia (TGA), Canada (Health Canada), the United Kingdom (MHRA), Singapore (HSA), Brazil (ANVISA), Israel (IMoH) and Switzerland (Swissmedic) to review and approve promising cancer treatments.

In addition to the above, the following procedures can be used to obtain a marketing authorization in Northern Ireland:

Northern Ireland may be included in DC or MR procedure as a Concerned Member State (CMS). The DC and MR procedures can be used by companies intending to market a medicine in Northern Ireland and other named E.U. countries. One member state will lead the assessment of the application as the RMS. The other member states (including Northern Ireland) receiving applications are called the ‘concerned member states’ (“CMSs”). The procedure takes up to 210 days (DC procedure) or 90 days (MR procedure), excluding time taken to provide further information or data required. If the application is approved, each CMS (including Northern Ireland as a CMS) will issue a national marketing authorization for the product within 30 days of approval.

Marketing authorizations approved in the EU’s DC procedure will automatically have effect in Northern Ireland. The E.U. centralized procedure, including its mandatory scope, continues to apply in Northern Ireland, and therefore, the centralized procedure results in a single marketing authorization to market a product in all E.U. member states, as well as Iceland, Liechtenstein, Norway and Northern Ireland.

Further information can be found in the U.K.’s website for license applications (www.gov.uk).

Table of Contents

Canadian Regulatory Process

Authorization to Market. Therapeutic products can be marketed in Canada after they have been subject to a review to assess their safety, efficacy and quality. A New Drug Submission must be submitted to Health Canada for review, and a Notice of Compliance (“NOC”), and/or a Drug Identification Number (“DIN”), must be received by the sponsor prior to marketing a product in Canada. Responsibility for review of pharmaceutical drug products resides with Health Canada’s Therapeutic Products Directorate (“TPD”), while responsibility for review of biological products is under the Biologics, Radiopharmaceuticals and Genetic Therapies Directorate (“BGTD”). An active DIN is required for any product being marketed in Canada. Our IG, A1PI, albumin and hyperimmune products are subject to these review and authorization processes.

Changes to Market Authorization. There are four classes of changes to existing market authorizations in Canada. Level 1 changes are considered “significantly different” and have the potential to impact safety, efficacy, quality or effectiveness of the product. These require the filing of a Supplemental New Drug Submission, and a NOC must be issued by Health Canada prior to implementation of the change. Level 2 changes are not considered “significant,” but a “Notifiable Change” submission must be filed to Health Canada for review, and approval is provided via a “No Objection” letter to the sponsor. Level 3 changes have minimal potential to impact safety, quality or effectiveness and can be made without prior approval of Health Canada; a summary of these changes is reported to Health Canada with the sponsor’s Annual Drug Notification. Level 4 changes are implemented without any notification to Health Canada, based on no expectation of risk.

Clinical Trials. A Clinical Trial Application (“CTA”), must be submitted to Health Canada prior to conducting any study protocol that proposes the use of a new product, or the use of an existing product, where the indication, target population, route of administration or dosing differs from the current market authorization. The CTA should include summaries of preclinical and clinical studies conducted and (if applicable) chemistry, manufacturing and control data, and is submitted to either TPD (for drug products) or BGTD (for biological products) for review. The TPD or BGTD are responsible for assessing protection and safety of the participants as well as quality of the product; they will issue a “No Objection” letter to sponsors for studies deemed acceptable. Research ethics board approval for each trial is also required prior to conduct of the study.

Establishment Licensing. All establishments in Canada that are involved in the fabrication, packaging/labeling, testing, import, distribution or warehousing of drug products must have a current establishment license (once an establishment license is issued, an annual report must be submitted by April 1 of each year to maintain the effectiveness of that license). As an importer/distributor, part of the licensing requirements include demonstration that any foreign (non-Canadian) facilities involved in fabrication, packaging/labeling or testing of products imported/distributed under the license comply with cGMP.

Post-Approval Requirements. The Health Products and Food Branch Inspectorate of Health Canada periodically inspects licensed establishments in Canada to verify compliance with cGMP. Manufacturers and importers are required to monitor the safety and quality of their products and must report adverse reactions to the Marketed Health Products Directorate in accordance with a prescribed timeline and format.

Regulatory Process for Markets outside the United States, Europe, United Kingdom and Canada

The majority of regulatory authorities in countries outside the United States, Canada and Europe require that a product first be approved by the FDA or European authority prior to granting the market authorization in their country. There are a limited number of countries (Bahamas, Bermuda, Guam, Oman and Qatar) that do not require further local product registration for products and they may be distributed based on the existing FDA approval.

Table of Contents

In addition to requiring the submission of a license application containing documentation supporting the safety, efficacy and quality of the product, many countries require the submission of FDA Export Certificates for our products to provide assurance that such products can be legally marketed in the United States. The Certificate of Pharmaceutical Product (“CPP”), and/or the Certificate to Foreign Government (“CFG”), are issued by the FDA at the request of the manufacturer seeking licensing in the country outside the United States. The CPP conforms to the format established by the World Health Organization (“WHO”), and is intended for use by the importing country when considering whether to license the product in question for sale in that country. The CFG serves to document that the product can be legally marketed in the United States and the manufacturer is in compliance with GMP. A limited number of regulatory authorities in countries outside United States, Canada and Europe conduct onsite inspections to verify GMP compliance. Failure to maintain and document GMP compliance could result in withdrawal of marketing authorization. In addition changes to manufacturing or testing procedures for the product require approval of the change in the United States prior to the submission of the variation to the registration in the international market. These changes may require approval in each market in order to maintain product distribution. Furthermore, any changes in the distributors supporting our export business could result in a loss of sales.

Pharmaceutical Pricing and Reimbursement

In the United States and other countries, sales of any products for which we receive regulatory approval for commercial sale will depend in part on the availability of reimbursement from third-party payors. Third-party payors include government health programs, managed care providers, private health insurers and other organizations. These third-party payors are increasingly challenging the price and examining the cost-effectiveness of medical products and services. In addition, significant uncertainty exists as to the reimbursement status of newly approved healthcare products. Our products may not be considered cost-effective. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.

United States Pharmaceutical Pricing and Reimbursement

In the United States, our products are reimbursed or purchased under several government programs, including Medicaid, Medicare Parts B, C and D and the 340B Program, and pursuant to our contract with the Department of Veterans Affairs. Medicaid is a joint state and federal government health plan that provides covered outpatient prescription drugs for low income individuals. Under Medicaid, drug manufacturers pay rebates to the states based on utilization data provided by the states. The rebate amount for most brand name drugs is the greater of 23.1% of the AMP per unit or the difference between the AMP and Best Price per unit and adjusted by the CPI-U, subject to certain exceptions (for example, for certain clotting factors, such as Factor VIII and Factor IX, of the rebate amount is the greater of 17.1% of the AMP per unit or the difference between the AMP and the Best Price per unit and adjusted by the CPI-U. For non-innovator multiple source (generic) drugs, the rebate percentage is equal to a minimum of 13.0% of AMP. The ACA also extended this rebate obligation to prescription drugs covered by Medicaid managed care organizations.

Medicare Part B reimburses providers for drugs provided in the outpatient setting based upon average sales price (“ASP”). Beginning in 2005, the Medicare drug reimbursement methodology for physician and hospital outpatient schedules changed to ASP + 6%. This payment was based on a volume-weighted average of all brands under a common billing code. After changes in certain prior years, CMS increased the rate back to +6% for 2013 and maintained the same rate from 2014 through 2019, except that effective January 1, 2018, a new CMS rule went into effect substantially reducing reimbursement paid to hospitals and other providers for certain outpatient drugs and biologicals, including certain of our products, if purchased by these providers under the 340B Program. The reimbursement was decreased from ASP + 6% to ASP - 22.5%. On December 27, 2018, the Federal District Court for the District of Columbia issued an opinion finding that this reimbursement cut exceeded CMS’s regulatory authority. However, on July 31, 2020, the District of Columbia Circuit Court of Appeals overturned the Federal District Court for the District of Columbia’s opinion, ruling that CMS acted within its regulatory authority. After this ruling, CMS retained the reimbursement as ASP - 22.5% for 2022. For 2023, however, in light of a 2022 United States Supreme Court ruling on this issue, CMS finalized a general payment rate of ASP + 6% for drugs and biologicals acquired through 340B. And, as required by law, CMS implemented a -3.09% reduction to the payment rates for non-drug services to achieve budget neutrality for the 340B drug payment rate change for calendar year 2023. CMS is expected to address the remedy for 340B drug payments from 2018 through 2022 in future rulemaking before 2024. Because the United States Supreme Court only recently ruled on this issue, we may experience decreased demand for our products and adverse effects on our business.

Table of Contents

We believe that we meet the requirements of the 340B Program and are continuing to review and monitor these and other developments affecting the 340B Program, including additional lawsuits that may be filed against CMS and the potential for court-ordered remedies affecting reimbursement under the 340B Program. In addition, under the Bipartisan Budget Act of 2013 and subsequent measures, Medicare is subject to a 2% reduction in federal spending, or “sequestration,” including drugs reimbursed under Medicare, for federal fiscal years 2013 through 2025. The full ramifications of this sequestration for Medicare reimbursement remain uncertain, as further Congressional action may reduce, eliminate or otherwise change this payment reduction. For example, in December 2021, Congress agreed that solely for the period between April through June 2022 a 1% “sequestration” reduction will be in effect. The reduction will return to a 2% rate thereafter.

Among other pricing concerns in the United States is the fact that, in September 2021, pursuant to an executive order by President Biden, the HHS released various drug pricing reform proposals aimed at making drug prices more affordable and equitable for all consumers and throughout the health care system. The areas of focus include reimbursement for drugs under Medicare Parts B, C and D. To advance the goals of its drug pricing reform proposal, the HHS recommended certain legislative policies focused on promoting competition and reducing drug pricing. The extent of HHS and Congressional implementation of these drug pricing reforms is still uncertain and could adversely affect our business. Additionally, in November 2020, the OIG enacted a rule rendering illegal, under the Anti-Kickback Law, many drug rebates routinely paid by manufacturers to health benefit plans or their pharmacy benefit managers (“PBMs”) under Medicare Part D. This rule also created new regulatory safe harbors that provide additional avenues for legal pharmaceutical market practices. Because this rule only became effective on January 1, 2023, its effects on certain pharmaceutical market practices are still uncertain and could adversely affect our business.

Additionally, in August 2022, the Inflation Reduction Act of 2022 was signed into law. This law includes provisions to lower certain products’ costs for Medicare beneficiaries and provides Medicare, for the first time, with the ability to negotiate drug prices, with certain exceptions. Included among the drugs excluded from the negotiation process are drugs with an orphan designation as their only FCA-approved indication, that have a generic or biosimilar available, that are less than nine years (for small-molecule drugs) or 13 years (for biological products) from their FDA approval or licensure date, with Medicare spending of less than $200 million in 2021 (increased by the CPI-U for subsequent years), and those which account for 1.0% or less of Part D or Part B spending and account for 80% or more of spending under each part on that manufacturer’s drugs. Also included are all plasma-derived drugs. To the extent our drugs fall within any of the aforementioned categories, Medicare would not have the ability to negotiate our prices for those drugs.

Also under the Inflation Reduction Act of 2022, as of 2023, if a manufacturer increases the prices for certain products used by Medicare beneficiaries at a higher rate than the applicable inflation rate for such products, then such manufacturer would be required to pay rebates to Medicare. If our products are used by Medicare beneficiaries, we could be required to pay rebates to Medicare or potentially face fines representing the difference between the actual and the inflated prices. And, beginning in 2025, the law modifies a manufacturer’s liability relating to Medicare’s spending above a beneficiary’s out-of-pocket cap. Specifically, manufacturers will be required to provide a 20% price discount on brand-name drugs and a 10% discount on brand-name drugs between the deductible and the annual out-of-pocket spending cap, which replaces the 70% price discount in the coverage gap phase under the current benefit design. Because this provision is aimed at decreasing Medicare beneficiaries’ out-of-pocket costs, manufacturers’ share of those costs may increase. Consequently, our net revenue, beginning in 2025, may be adversely affected.

An increasing number of states in the United States have also proposed or passed legislation that seeks to directly or indirectly regulate pharmaceutical drug pricing, such as by requiring drug manufacturers to publicly report pricing information or to place a maximum price ceiling on pharmaceutical products purchased by state agencies. For example, in October 2017, California enacted a prescription drug price transparency law that requires prescription drug manufacturers to provide advance notice and explanation for certain drug price increases that exceed a specified threshold. Laws of this type may cause us to experience additional pricing pressures on our affected products, and could adversely affect our business.

Table of Contents

Medicare Part D is a partial, voluntary prescription drug benefit created by the federal government primarily for persons 65 years old and over. The Medicare Part D drug program is administered through private insurers that contract with CMS. Government payment for some of the costs of prescription drugs may increase demand for any products for which we receive marketing approval. However, to obtain payments under this program, we are required to negotiate prices with private insurers operating pursuant to federal program guidance. These prices may be lower than we might otherwise obtain. In addition, beginning in 2011, the ACA generally required that we provide a 50% discount (the “Coverage Gap Discount”) to patients who have expended certain amounts for drugs and therefore fall within the Medicare Part D coverage gap. In February 2018, legislation was enacted as part of the Bipartisan Budget Act of 2018 that increased this coverage gap discount to 70%, and extended the price reductions of the Coverage Gap Discount Program to include biosimilar drugs.

The availability of federal funds to pay for our products under the Medicaid and Medicare Part B programs requires that we extend discounts under the 340B/PHS drug pricing program. The 340B/PHS drug pricing program extends discounts to a variety of community health clinics and other specified entities that receive health services grants from the PHS, as well as hospitals that serve a disproportionate share of certain low income individuals. The PHS ceiling price cannot exceed the AMP (as reported to CMS under the Medicaid drug rebate program) less the Medicaid unit rebate amount. We have entered into a PPA with the government in which we agree to participate in the 340B Program by charging eligible entities no more than the PHS ceiling price for drugs intended for outpatient use. Evolving requirements with respect to this program continue to be issued by the HRSA of HHS, the federal agency responsible for oversight of the 340B Program, which creates uncertainty. For example, effective January 1, 2019, a final HRSA rule codified standards regarding the calculation of the ceiling price for covered outpatient drugs under the 340B Program, as well as regarding the imposition of civil monetary penalties, or CMP, on manufacturers that knowingly and intentionally overcharge covered entities.

We make our products available for purchase by authorized government users of the Federal Supply Schedule (“FSS”), pursuant to their FSS contracts with the Department of Veterans Affairs. Under the Veterans Health Care Act of 1992, companies are required to offer discounted FSS contract pricing to four federal agencies — the Department of Veterans Affairs, the Department of Defense, the Coast Guard and the PHS (including the Indian Health Service) — for federal funding to be made available for reimbursement of products under the Medicaid program and products eligible to be purchased by those four federal agencies. FSS pricing to those four federal agencies must be equal to or less than the ceiling price, which is, at a minimum, 24% off the non-federal AMP for the prior fiscal year.

The ACA imposed a fee on manufacturers and importers of branded prescription drugs and biologics based on their sales to United States government health programs. An aggregate annual fee of $3.0 billion was imposed on all covered entities for 2014 through 2016. The aggregate fee is allocated among applicable manufacturers and importers, including us, based on their relative sales to government health programs. The aggregate fee increased up to $4.0 billion for 2017, $4.1 billion for 2018, and was reduced to $2.8 billion for 2019 and thereafter. Beginning in 2013, the ACA also imposed a new excise tax on many medical devices equal to 2.3% of the sales price, and excludes devices generally purchased by the general public at retail for individual use. However, with respect to the medical device excise tax, a two-year moratorium was imposed under the Consolidated Appropriations Act, 2016, suspending the imposition of the tax on device sales during the period beginning January 1, 2016 and ending December 31, 2017. On January 22, 2018, an additional two-year moratorium was imposed under Public Law No. 115-120, suspending the imposition of the tax on device sales during the period beginning January 1, 2018 and ending on December 31, 2019. On December 20, 2019, the medical device excise tax was repealed under Public Law No. 116-94, eliminating the imposition of the tax for periods after December 31, 2019. In addition, the Prescription Drug User Fee Act (“PDUFA”), first enacted in 1992, sets forth user fees that pharmaceutical and biological companies pay to the FDA for: certain applications for approvals of drugs and biologicals; the establishments where the products are made; and the products themselves. The fees under PDUFA cover a substantial portion of the FDA’s operating budget, and the measure also addresses aspects of the regulatory approval process, such as timing and procedures. The PDUFA is subject to reauthorization by Congress every five years and, in September 2022, the FDA User Fee Reauthorization Act of 2022 was signed into law, reauthorizing the PDUFA for fiscal years 2023 through 2027.

Table of Contents

The marketability of any products for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement. Federal, state and local governments in the United States have enacted and continue to consider additional legislation to limit the growth of healthcare costs, including the costs of prescription drugs. Existing and future legislation could limit payments for our existing products or for drug candidates that we are developing, including possibly permitting the federal government to negotiate prices directly with manufacturers. In addition, an increasing emphasis on managed care in the United States has increased and will continue to increase the pressure on pharmaceutical pricing. For a discussion of certain risks related to reimbursement and pricing, see Item 3 of this Part I, “Key Information—D. Risk Factors—Risks Relating to the Healthcare Industry—United States Healthcare Reform may adversely affect our business.”

European Union Pharmaceutical Pricing and Reimbursement

Our operations in the E.U. are subject to regulations that affect the pricing and marketing of our products. The governments of E.U. Member States are able to influence the price of pharmaceutical products through their control of national healthcare systems. As such, governments in the E.U. Member States have been introducing healthcare reforms to limit increases in costs, particularly with respect to prescription drugs. Some E.U. Member States have also passed legislation to impose mandatory rebates for pharmaceutical products and financial claw-backs on the pharmaceutical industry. Through health technology assessment organizations that use formal economic and clinical metrics such as cost-effectiveness, budget impact models and clinical benefits versus existing marketed (or in development) drug products being used as comparators, to determine prices, coverage and reimbursement of new therapies, E.U. Member States are also seeking to limit healthcare costs. We expect that E.U. Member States will continue to pursue actions to reduce healthcare expenditures.

The E.U. is currently undergoing an analysis of the intellectual property protections extended to pharmaceutical products as well as the overall regulatory framework for the approval and commercialization of medicinal products. This could result in significant changes in the way drugs are approved and marketed, as well as with respect to the duration of orphan market exclusivity and global orphan marketing authorization, in particular for orphan drugs where the marketing authorization holder cannot benefit from multiple, separate exclusivity periods for the same active substance.

Pricing and Reimbursement in Other Countries

Many countries around the world have been taking steps to control healthcare costs, particularly as they relate to prescription drugs. For example, Canada is contemplating regulatory changes that seek to reduce prices for certain medicinal products, such as biologics and medicines for rare diseases. China has organized national price negotiations for certain products directly linked to national drug reimbursement. Drug prices in China may further decline due to a stated national policy of reducing healthcare costs. Furthermore, countries are utilizing tendering processes to generate competition in a bid to control prescription drugs.

Item 4.A.UNRESOLVED STAFF COMMENTS

None.

Item 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following is a review of our financial condition and results of operations as of December 31, 2022 and 2021, and for the three years ended December 31, 2022, and of the key factors that have affected or are expected to be likely to affect our ongoing and future operations. You should read the following discussion and analysis in conjunction with our audited consolidated financial statements and the accompanying notes included elsewhere in this annual report on Form 20-F.

Some of the information contained in this discussion, including information with respect to our plans and strategies for our business and our expected sources of financing, contain forward-looking statements that involve risk and uncertainties. You should read “Cautionary Statement Regarding Forward-Looking Statements” in this Part I for a discussion of the risks related to those statements. You should also read Item 3 of this Part I, “Key Information—D. Risk Factors” for a discussion of certain factors that may affect our business, financial condition and results of operations.

Table of Contents

We have prepared our audited consolidated financial statements as of December 31, 2022 and 2021, and for the three years ended December 31, 2022 in accordance with IFRS, as issued by the IASB. The financial information and related discussion and analysis contained in this item are presented in euros except as otherwise specified. Unless otherwise specified the financial information analysis in this annual report on Form 20-F is based on our actual audited consolidated financial statements as of December 31, 2022 and 2021, and for the three years ended December 31, 2022.

See “Presentation of Financial and Other Information” in this Part I for further information on our presentation of financial information.

Operating Results

Subsequent Events

On February 15, 2023, we announced a comprehensive operational improvement plan designed to yield significant cost savings. The plan includes the optimization of plasma costs and operations, streamlining corporate functions, and enhancing other efficiencies across the organization. It also includes a workforce optimization to be implemented during 2023 that would affect approximately 8% of our employees, primarily in our U.S. plasma operations. On March 31, 2023, we recorded a one-time restructuring charge of €140 million. See “—Operational Improvement Plan.”

Factors Affecting Our Financial Condition and Results of Operations

Consequences of COVID-19

Due to the COVID-19 pandemic, from March 2020 to December 2022, we experienced several impacts on our operational and financial performance. A lower level of plasma collection due to lockdowns and restricted movement, quarantines and fear of disease, as well as the economic stimulus programs provided by the U.S. government, caused our facilities to operate with reduced capacity utilization and our plasma collection centers to offer higher donor compensation. However, these negative impacts were partially offset by several measures, including savings in operating costs, product price increases and sales of COVID-19 diagnostic tests.

The COVID-19 pandemic limited donors’ traffic in our plasma collection centers, negatively impacting plasma collection volumes. In addition, travel restrictions, specifically the U.S. border closure with Mexico, put further pressures on those collection centers close to the southern border of the U.S. The government stimulus programs issued to households also lowered the financial incentive for individuals to donate. This decrease in plasma collection levels resulted in a corresponding decline in processed volumes at our facilities, negatively affecting manufacturing cost absorption. Additionally, our cost per liter increased mainly as a result of higher compensation paid to donors.

Although our plasma collection decreased by 15% in 2020 as compared to 2019, and by 4% during 2021 as compared to 2020, our collection levels saw a 4% increase in the nine-month period ended December 31, 2021 as compared to the same period in 2020. This recovery was mainly driven by the addition of new plasma collection centers to our portfolio, which collectively provided two million liters of additional capacity per year. See “—Acquisitions.” In the wake of wider vaccination and the easing of COVID-19 constraints, plasma collections continued to improve in 2022, increasing by 25% in comparison to 2021 and surpassing 2019 levels, with our cost per liter, donor compensation, and other negative factors improving. However, despite these improvements, it remains unclear at this time how the developments in relation to COVID-19 will continue to evolve through the remainder of 2023 and beyond, and the extent to which COVID-19 might further impact our business, results of operations and financial condition. See Item 3 of this Part I, “Key Information—D. Risk Factors—Risks Relating to the Company and Our Business—The Coronavirus pandemic has had, and could continue to have, a material, adverse impact on us.”

Price Controls

Certain healthcare products, including plasma derivative products, are subject to price controls in many of the markets where they are sold, including Spain and other countries in the European Union. The existence of price controls over these products has adversely affected in the past, and may continue to adversely affect, our ability to maintain or increase our prices and gross margins.

Table of Contents

Plasma Supply Constraints

Plasma is the key raw material used in the production of plasma-derived products. Our ability to continue to increase our revenue depends substantially on increased access to plasma. We currently obtain our plasma mainly from the United States and Europe (Germany, Austria and Hungary) primarily through our plasma collection centers and, to a much lesser extent, through agreements with third parties.

A continued increase in demand for plasma products could lead to industry supply constraints. In response, we and certain of our competitors and independent suppliers could open a number of new plasma collection centers.

As of December 31, 2022, we operated 392 plasma collection centers located across the United States, Europe, across Germany, Austria and Hungary; Canada and Egypt. We have expanded our plasma collection network through a combination of organic growth, by opening new plasma collection centers, and acquisitions. In 2016, we purchased equity interests in the Interstate Blood Bank Group (Interstate Blood Bank, Inc., Bio-Blood Components, Inc. and Plasma Biological Services, LLC, collectively referred to herein as the “IBBI Group”), and on April 10, 2019, we exercised our option to purchase the remaining 51.0% equity interest of the IBBI Group, which has 36 FDA-approved centers (26 plasma collection centers and 10 blood donation centers), as well as an analytical laboratory. On October 1, 2020, we obtained 11 U.S. plasma collection centers from GC Pharma. As part of the GC Pharma acquisition, we must supply certain output of plasma arising from the 11 collection centers for a 24-month period commencing on October 1, 2020. In 2021, we acquired 25 plasma collection centers from BPL and seven U.S. plasma donation centers and one Canadian plasma center from Kedrion. In 2022, we acquired Biotest AG and with it, 28 new plasma collection centers. Additionally, we are focused on optimizing our plasma collection center network by closing or consolidating underperforming centers, having closed 18 centers in the fourth quarter of 2022 and with several additional centers scheduled to be closed or consolidated in the first half of 2023.

The COVID-19 pandemic had an adverse impact on our plasma collection volumes, mainly in the United States. Among the reasons for this negative impact are mobility restrictions, closings of the border with Mexico and stimulus checks paid to American families with children, which lowered the willingness to donate plasma. As a result, our plasma collection decreased by 15% in 2020 as compared to 2019 and by 4% during 2021 as compared to 2020, although we saw a 4% increase in our collection levels during the nine-month period ended December 31, 2021, as compared to the same period in 2020. This improvement in 2021 was due in part to our efforts to increase plasma supply through our expansion plan, comprising organic and inorganic growth, such as: (i) plasma collected through our plasma collection centers, including acquiring centers from BPL and Kedrion, (ii) plasma collected through our 30-year Plasma Supply Agreement with each of Haema AG and Biotest US Corporation and (iii) plasma purchased from third-party suppliers pursuant to various plasma purchase agreements. The upward trend continued in 2022, as plasma collections increased by 25% as compared to 2021, surpassing 2019 levels. See “—Acquisitions” and “—Consequences of COVID-19” for additional details.

Acquisitions

Access Biologicals, Inc.

In January 2017, we acquired 49% of the voting rights in Access Biologicals LLC, a company based in San Diego, California, for the amount of $51 million. We also entered into an option agreement to purchase the remaining 51% voting rights in five years. On June 15, 2022, we reached an agreement to acquire all of the shares of Access Biologicals LLC by exercising the call option for the remaining 51%, for a total of $142 million. Effective as of April 1, 2023, Access Biologicals LLC, as well as its subsidiaries Access Plasma, LLC and Access Cell Culture, LLC, merged with and into our subsidiary Grifols Bio Supplies Inc, which was the surviving entity of the merger.

Access Biologicals LLC’ core business was the collection and manufacture of an extensive portfolio of biological products. Combined with a closed materials sourcing process, it provided support services for different markets such as in-vitro diagnostics, biopharmaceuticals, cell culture and diagnostic research and development.

Table of Contents

Biotest AG Acquisition

On April 25, 2022, we acquired from TIIL 100% of the equity interests in Biotest Holdings, a German privately held stock corporation, and accepted an assignment from TIIL of certain shareholder loans granted by TIIL to Biotest Holdings. Biotest Holdings in turn owns 89.88% of the ordinary shares and 1.08% of the preferred equity shares of Biotest AG, a German stock corporation listed on the Frankfurt Stock Exchange. The purchase price for the acquisition of Biotest Holdings was €1,090,518,254, which included a loan receivable of €318 million granted by Biotest Holdings to Biotest AG. In addition, (1) we completed a voluntary tender offer to all remaining shareholders of Biotest AG to acquire their ordinary and preferred shares, where we acquired 1,250,298 ordinary shares (for €43.00 per share) and 8,340,577 preferred shares (for €37.00 per share) and (2) we acquired 185,359 ordinary shares in May 2022 following the exercise of a legal put right provided by applicable German corporate laws by former shareholders of Biotest AG. The acquisition of Biotest Holdings, the voluntary tender offer and the acquisition of shares pursuant to the put right have brought our interest in Biotest AG to 97.13% of the voting rights and 70.18% of the share capital.

In order to fund this acquisition, on October 5, 2021, our wholly-owned subsidiary Grifols Escrow Issuer, S.A.U. (the “Escrow Issuer”) issued €1,400.0 million senior notes that will mature on October 15, 2028 and bear interest at 3.875% per annum and $705.0 million senior notes that will mature on October 15, 2028 and bear interest at 4.750% per annum. Within 15 months from the consummation of the acquisition, which occurred on April 25, 2022, the Escrow Issuer will merge with and into the Company, with the Company as the surviving entity, and we will assume all the obligations of the Escrow Issuer under the notes. See “—B. Liquidity and Capital Resources—Sources of Credit—The 2021 Notes.” As of the date of filing of this report, our Board has agreed to proceed with the merger.

Biotest AG is a global company that specializes in innovative hematology and clinical immunology solutions. Headquartered in Dreieich (Germany), it develops, produces and markets biological medicinal products with applications in hematology, clinical immunology and intensive care. Biotest AG’s current portfolio includes 12 different products with a global commercial footprint in more than 90 countries, employing approximately 2,000 people around the world.

Acquisition of plasma donation centers from Kedplasma, LLC

On March 31, 2021, Grifols acquired seven U.S.-based plasma donation centers from Kedplasma, LLC for a total purchase price of $55.2 million. The seven centers acquired are authorized by the FDA and European health authorities and collect approximately 240,000 liters of plasma per year.

GigaGen Acquisition

On March 8, 2021, Grifols acquired 56% of shares of GigaGen Inc. (“GigaGen”) for a base amount of $80 million. Grifols now owns 100% of GigaGen’s share capital, and financed the transaction with its own funds, without incurring in any debt. Half of the consideration was paid at the closing date and the remaining amount was paid in March 2022. This agreement is in line with our R+D+i strategy, grounded in an integrated approach that encompasses both in-house projects and investee-led initiatives whose research complements our core operations. Prior to this transaction, Grifols’ percentage stake in GigaGen was recorded using the equity method and, therefore, the difference between the fair value of the previous investment and the book value, estimated in $42 million, has been recognized as income. See Note 10 to our audited consolidated financial statements included in this annual report on Form 20-F for more information regarding this transaction.

Acquisition of plasma donation centers from BPL Plasma, Inc.

On February 28, 2021, Grifols acquired 25 U.S.-based plasma donation centers from BPL Plasma Inc for $385 million. These plasma centers generate, in the aggregate, approximately 1 million liters of plasma per year. The transaction received the applicable regulatory clearances and was financed with our own resources, without incurring debt. See Note 10 to our audited consolidated financial statements included in this annual report on Form 20-F for more information regarding this transaction.

Table of Contents

The GC Pharma Acquisition

On July 20, 2020, we executed share purchase arrangements with South Korean based GC Pharma and other investors for the purchase of a plasma fractionation facility and two purification facilities located in the city of Montreal, Canada, as well as 11 plasma collection centers located in the U.S., for a total consideration of $457 million, subject to certain working capital and other adjustments.

The Canadian facilities are currently in the process of obtaining needed licenses and regulatory approvals by competent health authorities for the manufacturing of plasma-derived products. When licensed and approved, we will become the only commercial manufacturer of plasma products in Canada, with a fractionation capacity of 1.5 million liters annually. We plan to be ready to manufacture IVIG and albumin in the Canadian facilities to supply the Canadian market starting in 2023.

The GC Pharma acquisition closed on October 1, 2020. As part of the consummation of the GC Pharma acquisition and through a plasma supply agreement, we are committed to supplying a certain output of plasma arising from the 11 plasma collection centers in the U.S. to GC Pharma for a 24-month period concluding on October 1, 2022.

The Alkahest Acquisition

In March 2015, we entered into a definitive agreement to acquire approximately 45% of the equity of California biopharmaceutical company Alkahest for a $37.5 million payment upon entry into the agreement and a further payment of $12.5 million to fund the development of Alkahest’s plasma-based products.

On September 2, 2020, we executed an agreement with the remaining shareholders in Alkahest, to acquire the remaining shares of Alkahest. On December 15, 2020, we closed the transaction and acquired the remaining shares of Alkahest (approximately 55%) in exchange for a total price of $146 million, on a debt free basis. We paid $20 million at the closing of the transaction and the remaining $126 million on February 1, 2021. With this transaction, we gain total control of Alkahest.

Alkahest is a clinical stage biopharmaceutical company targeting neurodegenerative and age-related diseases with transformative therapies derived from a deep understanding of the plasma proteome in aging and disease. Our acquisition of the remaining shares of Alkahest is part of our commitment to the research and development of therapeutic alternatives designed to contribute to both scientific and social development. It is also aligned with our strategy of complementing our range of existing plasma protein therapies and diagnostic products to treat and diagnose serious diseases and to extend the quality of human life.

NSPO Joint Venture

On November 24, 2020, we executed the NSPO JV Agreement, a binding master joint venture agreement with the Egyptian based National Service Projects Organization to incorporate a new company under the laws of Egypt (“Grifols Egypt”). Grifols Egypt is owned by Grifols and NSPO on a 49%-51% basis, respectively. Grifols Egypt will develop and construct 20 plasma collection centers throughout Egypt and will be capable of initially collecting approximately 600,000 liters of plasma annually. In addition, Grifols Egypt will develop a fractionation facility with an annual fractionation capacity of up to one million liters of plasma, a purification and fill & finish facility, a warehouse and an analysis laboratory.

For us, Grifols Egypt will free-up plasma and manufacturing capacity and bring diversification to our plasma procurement sources. Additionally, through a future contract manufacturing agreement, we will secure the processing of the plasma collected in Egypt into plasma-derived products to serve Egyptian national needs. The NSPO JV Agreement also provides that for the implementation of any similar project (including the commercialization of plasma or plasma derived products) in certain countries within the Middle East and the entire African continent, Grifols and NSPO shall exclusively work through Grifols Egypt.

Grifols Egypt follows equivalent quality, safety and general operational standards as are applied by us in our worldwide operations, hence, as part of the recognized value to be contributed by Grifols into the Grifols Egypt, we will provide our knowledge and expertise in the industry as well as know-how and technology held by it, providing, among other things, engineering services and quality assurance support to set the infrastructure and processes of Grifols Egypt to the strictest quality and safety standards.

Table of Contents

The Shanghai RAAS Acquisition

On March 7, 2019, we entered into an Agreement for Assets Purchase by Share Issue (the “Shanghai RAAS Agreement”), with Shanghai RAAS. Shanghai RAAS is a leader in China’s plasma derivatives sector and is listed on the Shenzhen Stock Exchange. Pursuant to the Shanghai RAAS Agreement, on March 30, 2020, we acquired 26.2% of the voting and economic rights in Shanghai RAAS in exchange for the contribution of 45% of the economic rights and 40% of the voting rights in our U.S. subsidiary, Grifols Diagnostic Solutions Inc., or GDS. Thus, we have become the largest shareholder of Shanghai RAAS, while we maintain operational, political and economic control of GDS.

As part of the acquisition, we also entered into an Exclusive Strategic Alliance Agreement pursuant to which Shanghai RAAS became the exclusive distributor of our plasma-derived products and transfusional diagnostic solutions in China. In exchange for royalties, we provide technological and know-how support in the Biopharma and diagnostic fields to Shanghai RAAS.

Dispositions

The Biomat Transactions

On December 1, 2021, we sold a minority equity interest in the Biomat Group (our group of U.S.-based plasma collection subsidiaries) to the GIC Investor, an affiliate of GIC Private Limited, which is a sovereign wealth fund established by the Government of Singapore. Specifically, the GIC Investor acquired 12.9% of Biomat Newco and 12.5% of Biomat USA. The purchase price received was $990 million. We used the net proceeds from the Biomat Transactions to (i) prepay $600 million of principal amount of the Revolving Loans under the First Lien Credit Facilities, (ii) prepay $142,360,501.31 of the principal amount of the Dollar Tranche B Term Loans, (iii) prepay $88,003,617.48 of the Euro Tranche B Term Loans and (iv) repurchase €97,535,000 of the 2019 Notes under an asset sale offer. See “—B. Liquidity and Capital Resources—Sources of Credit.”

As a result of the transaction, the GIC Investor received ten class B common shares of Biomat USA and nine class B common shares of Biomat Newco. These common shares are non-voting but have the right to receive annual preferential dividends, to the extent dividends are declared, of $4,168,421.05 per share. These shares also granted the GIC Investor with redemption rights of up to one share per year beginning in 2023 at $52,105,263.16 per share. Further, the shares also carry a liquidation preference at the same share price as for redemption rights, plus all unpaid dividends. These rights would be enforceable by the GIC Investor in certain circumstances, such as in the case of a liquidation, dissolution or winding up of Biomat USA, if we cease to control or have at least a 75% voting interest in Biomat USA, or upon the exclusive licensing of all or substantially all intellectual property of Biomat USA. In addition, in the event the payment of dividends did not occur or such redemptions were not made, there would among other things be monetary penalties or holders of the shares could opt to exchange them for shares of Grifols, S.A.

On December 21, 2022, the GIC Investor delivered a notice exercising its right to redeem one class B common share of Biomat Newco at the redemption price of $52,105,263.16, with such redemption to be effective on June 30, 2023.

Subject to certain minority shareholder remedies in the charters of Biomat USA and Biomat Newco, we continue to oversee all aspects of the Biomat Group’s management and operations. All plasma collected by the Biomat Group will continue to be supplied to us for the production of plasma-derived medicines, through a long-term plasma supply agreement.

MedKeeper

On January 24, 2018, we acquired a majority stake in the U.S. technology firm Goetech, LLC, based in Denver, Colorado, doing business as MedKeeper. This transaction, for a total of $98 million, included a 51% stake in Medkeeper and a call option for Grifols and put option for MedKeeper for the remaining 49% on the third anniversary of the deal.

On November 9, 2020, we acquired, through our subsidiary Grifols Shared Services North America Inc., the remaining 49% interest in MedKeeper for the amount of $60.2 million. MedKeeper’s core business is the development and distribution of web and mobile-based platforms for hospital pharmacies that improve quality standards, productivity in the process, control systems and monitoring different preparations while increasing patient safety.

Table of Contents

In July 2022, we formalized the sale of substantially all of the assets of MedKeeper to affiliates of the U.S. company Becton, Dickinson and Company for a total adjusted purchase price of $91.6 million. As a consequence of this divestment, we recognized an income of €23.1 million in our statement of profit and loss.

Operational Improvement Plan

We have recently approved an operational improvement plan designed to reinforce our competitiveness and build a more streamlined, efficient and cost-effective global organization. The plan focuses on three major areas: optimizing plasma costs and operations, streamlining corporate functions, and enhancing other efficiencies across the organization. While we expect to implement the measures comprising most or all of these savings by the fourth quarter of 2023, due to our inventory accounting and overall timing of implementation, we expect that approximately €100 million of savings will be recognized for income statement purposes in 2023 relative to comparable 2022 full year costs. Following the full implementation of the plan, we expect to achieve annualized cost savings of approximately €400 million relative to comparable 2022 full year costs. Most of the annualized cost savings will be recognized for income statement purposes in 2024.

The first part of the plan, optimization of plasma costs and operations, is designed to improve our plasma procurement operation and aims to maintain desired plasma volumes while reducing the cash cost per liter of plasma through a set of measures expected to generate annualized savings of up to approximately €300 million compared to full year 2022 numbers. These measures will also reduce the U.S. plasma operations workforce by approximately 2,000 positions in 2023.

The second part of the plan is focused on streamlining corporate functions covering a broad range of initiatives such as centralizing and automating functions, more fully sharing services across business units, consolidating vendors, streamlining reporting structures, and eliminating duplicative functions and positions, among others. These initiatives will impact close to 300 full-time equivalents (“FTEs”), most of whom are in the United States and approximately one third are located in Spain.

The third part of the plan, enhancing other efficiencies across the organization, will enable the company to reduce operational costs related to, among other things, global procurement, logistics, and facilities, in part due to a real estate rationalization affecting certain offices but not industrial facilities. On March 31, 2023, we recorded a one-time charge of €140 million to deliver the cost savings initiatives. This charge was derived mainly from severance payments, advisory fees, and other restructuring activities. Please see “Cautionary Statement Regarding Forward-Looking Statements” in this Part I for a discussion of the risks related to forward-looking statements.

Other Factors

Our financial and operating prospects can also be significantly affected by a number of other internal and external factors, such as unfavorable changes in governmental regulation or interpretation, increased competition, the inability to hire or retain qualified personnel necessary to sustain planned growth, the loss of key senior managers, problems in developing some of the international operations and lack of sufficient capital, among others.

Operating Results

Overview

The subsequent discussion and analysis provide information that our management believes is relevant to an assessment and understanding of our consolidated results of operations. You are encouraged to read the following discussion and analysis of our financial condition and results of operations together with our audited consolidated financial statements and the related notes included elsewhere in this annual report on Form 20-F.

Table of Contents

Year ended December 31, 2022, as compared to the year ended December 31, 2021:


	Year Ended December 31,		Change
Consolidated Statement of Profit and Loss	2022	2021	€	%

	(in thousands of euros, except for percentages)
Continuing Operations
Net revenue	6,063,967	4,933,118	1,130,849	22.9	%
Cost of sales	(3,832,437)	(2,970,522)	(861,915)	29.0	%
Gross margin	2,231,530	1,962,596	268,934	13.7	%
Research and development	(361,140)	(354,881)	(6,259)	1.8	%
Selling, general and administration expenses	(1,190,423)	(1,061,508)	(128,915)	12.1	%
Operating expenses	(1,551,563)	(1,416,389)	(135,174)	9.5	%
Other Income	22,235	16,302	5,933	36.4	%
Profit/(loss) of equity accounted investees with similar activity to that of the Group	103,478	32,555	70,923	217.9	%
Operating result	805,680	595,064	210,616	35.4	%
Finance income	33,859	11,551	22,308	193.1	%
Finance costs	(496,524)	(277,994)	218,530	(78.6)	%
Change in fair value of financial instruments	11,999	246	11,753	4,777.6	%
Exchange differences	7,725	(11,602)	19,327	166.6	%
Finance result	(442,941)	(277,799)	(165,142)	59.4	%
Profit/(loss) of equity accounted investees	(1,482)	33,188	(34,670)	(104.5)	%
Profit before income tax from continuing operations	361,257	350,453	10,804	3.1	%
Income tax expense	(90,111)	(85,126)	(4,985)	5.9	%
Profit after income tax from continuing operations	271,146	265,327	5,819	2.2	%
Consolidated profit for the year	271,146	265,327	5,819	2.2	%

Net Revenue

Net revenue is calculated by subtracting certain chargebacks, cash discounts, volume rebates, Medicare and Medicaid discounts and other discounts from our gross revenue. See Note 23 to our audited consolidated financial statements included in this annual report on Form 20-F.

Net revenue increased by 22.9% (12.4% in constant currency), or €1.1 billion, in 2022 reaching €6.1 billion compared to €4.9 billion in 2021. The increase was largely due to the performance of our Biopharma business unit, as explained below.

The following table reflects a summary of net revenue by each of our business units for 2022, as compared to 2021:


	Year ended			Year ended
	December 31,	% of total		December 31,	% of total
Summary of Net Revenue by business unit	2022	net revenue		2021⁽¹⁾	net revenue		% var		% var CC⁽²⁾

	(in thousands of euros, except for percentages)
Biopharma	5,005,382	82.5	%	3,814,983	77.3	%	31.2	%	19.6	%
Diagnostic	671,292	11.1	%	779,108	15.8	%	(13.8)	%	(19.7)	%
Bio Supplies	146,076	2.4	%	115,811	2.3	%	26.1	%	13.2	%
Others	250,165	4.1	%	266,461	5.4	%	(6.1)	%	(11.5)	%
Intersegments	(8,948)	(0.1)	%	(43,245)	(0.8)	%	(79.3)	%	80.7	%
Total	6,063,967	100.0	%	4,933,118	100.0	%	22.9	%	12.4	%

(1)As a consequence of the change in transactions and balances allocations by segments discussed in Item 4 of this Part I “A. Business Overview—Principal Activities—Other Activities and Operations (“Others”),” the comparative figures for the fiscal year 2021 have been adjusted accordingly.

(2)Net revenue variance in constant currency is determined by comparing adjusted current period net revenue, calculated using prior period monthly average exchange rates, to the prior period net revenue. See “Presentation of Financial and Other Information—Constant Currency.”

Table of Contents

Biopharma. Net revenue for the Biopharma business unit increased by 31.2% (19.6% at constant currency) from €3.8 billion in 2021 to €5.0 billion in 2022. This increase was mainly due to increased plasma collections, robust underlying demand for key proteins and price increases. Favorable product mix was also a notable driver with subcutaneous immunoglobulin (SCIG) Xembify^® sales increasing by 33.7%, supported by higher demand and favorable customer mix, as well as ALBUTEIN FlexBag^® gaining traction after its launch in November 2021.

Diagnostic. The Diagnostic business unit’s net revenue decreased by 13.8% (19.7% at constant currency) from €779.1 million in 2021 to €671.3 million in 2022. This decrease was primarily due to non-recurring sales of TMA molecular tests, used to detect SARS-CoV-2, and the termination of mandatory Zika-virus testing, partially offset by blood typing solutions’ double-digit-growth across most geographies.

Bio Supplies. The Bio Supplies business unit records sales of biological products for the pharmaceutical and diagnostics industry. Net revenue from Bio Supplies increased by 26.1% (13.2% at constant currency), from €115.8 million in 2021 to €146.1 million in 2022, mainly driven by the acquisition of the remaining 51% capital of Access Biologicals, which positively impacted performance of Bio Supplies Biopharma’s cell culture media and plasma for diagnostics.

Others. Under “Others,” we record sales of Healthcare Solutions business line (formerly Hospital Division), as well as those related to the fractionation and purification agreements signed with Kedrion and third-party plasma sales. Net revenue decreased by 6.1% (11.5% at constant currency) from €266.5 million in 2021 to €250.2 in 2022. This decrease is due to the sale of substantially all of the assets of MedKeeper in July 2022 and lower third-party plasma sales.

The following table reflects a summary of net revenue by each of our geographic regions for 2022 as compared to 2021:


	Year ended			Year ended
	December 31,	% of total net		December 31,	% of total
Summary of Net Revenue by Region	2022	revenue		2021	net revenue		% var		% var CC⁽¹⁾

	(in thousands of euros, except for percentages)
European Union⁽²⁾	1,032,210	17.0	%	906,449	18.4	%	13.9	%	13.5	%
United States and Canada	3,855,607	63.6	%	3,154,548	63.9	%	22.2	%	8.5	%
Rest of the World	1,176,150	19.4	%	872,121	17.7	%	34.9	%	25.6	%
Total	6,063,967	100.0	%	4,933,118	100.0	%	22.9	%	12.4	%

(1)	Net revenue variance in constant currency is determined by comparing adjusted current period net revenue, calculated using prior period monthly average exchange rates, to the prior period net revenue. See “Presentation of Financial and Other Information—Constant Currency.”

(2)	Net revenue earned in the European Union includes net revenue earned in Spain.

Net revenue in the U.S. and Canada increased by 22.2% (8.5% at constant currency) from €3.1 billion in 2021 to €3.9 billion in 2022, mainly due to higher volume sales of IG as a result of higher plasma supply and strong demand, coupled with price increases. Meanwhile, sales in the European Union increased by 13.9% (13.5% at constant currency) from 906.4 million in 2021 to €1.0 billion in 2022, mainly due to higher plasma supply and strong demand, led by growth in countries like Spain, France, Italy and Germany. Sales in the Rest of the World increased by 34.9% (25.6% at constant currency) from 872.1 million in 2021 to €1.2 billion in 2022, mainly due to the strong performance of our products in China.

Cost of sales

Cost of sales increased by 29.0% from €3.0 billion in 2021 to €3.8 billion in 2022. Cost of sales as a percentage of net revenue increased to 63.2% in 2022 compared to 60.2% in 2021. This was mainly due to the high cost per liter of plasma collected in the first half of 2022 in view of increased donor compensation and labor costs. See “—Factors Affecting Our Financial Condition and Results of Operations—Consequences of COVID-19,” and Item 4 of this Part I, “Information on the Company—B. Business Overview—Raw Materials.”

Table of Contents

Gross Margin

The decrease in gross margin from 39.8% of net revenue in 2021 to 36.8% in 2022 was mainly due to a double impact from the Biopharma and Diagnostic business units. On the one hand, we had high cost per liter of plasma collected in 2021 and the first half of 2022 due to inventory accounting (c.9-months lag). This was primarily due to elevated donor commitment compensation (“DCC”) and inflationary pressures on labor costs. On the other hand, the decrease in COVID-19 one-off testing and Zika screening adversely impacted our gross margin by 2.1% in 2022 compared to 2021.

We are currently focused on margin expansion while achieving desired plasma volumes for 2023, reducing cost per liter of plasma collected to more sustainable levels. To this end, the drop in DCC by 20% in the fourth fiscal quarter of 2022 in comparison to its peak in July drove a reduction of 10.0% in the cost per liter of plasma over the same reference period. Other plasma operating costs, accounting approximately for the remaining 65.0% of the full plasma cost, also declined, albeit to a lesser extent, amid the current macroeconomic backdrop.

Research and development

Research and development spending increased by 1.8%, from €354.9 million (7.2% of net revenue) in 2021 to €361.1 million (6.0% of net revenue) in 2022. These results underscore the integration of Biotest AG’s projects into our portfolio, as well as our ongoing efforts to integrate and develop cutting-edge projects such as those of Alkahest and GigaGen. See Item 4 of this Part I, “Information on the Company—B. Business Overview—Research and Development” for additional details.

Selling, general and administration expenses

Selling, general and administration expenses increased by 12.1% from €1.1 billion in 2021 to €1.2 billion in 2022, mainly as a result of the integration of Biotest AG and general inflationary pressures, partially offsetting cost savings.

Finance result

Finance result in 2022 represented a loss of €442.9 million, compared to a loss of €277.8 million in 2021. The increase mainly results from the increase of interest rates, the funds received from the GIC Investor and the issuance of the 2021 Notes (as defined herein) to finance the Biotest AG acquisition, in the amounts of €1,400,000,000 and $705,000,000, in the fourth quarter of 2021. See “—B. Liquidity and Capital Resources—Sources of Credit—The 2021 Notes.”

Income tax expense

In 2022, we had a profit before income tax of €361.3 million and income tax expense of €90.1 million, which represents a tax rate of 24.9%. Our effective tax rate increased from 24.3% in 2021 primarily due to a change in the country mix of our taxable income.

Table of Contents

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

The following discussion and analysis contain information regarding our results of operations for the year ended December 31, 2021, as compared to the year ended December 31, 2020:


	Year Ended December 31,		Change
Consolidated Statement of Profit and Loss	2021	2020	€	%

	(in thousands of euros, except for percentages)
Continuing Operations
Net revenue	4,933,118	5,340,038	(406,920)	(7.6)	%
Cost of sales	(2,970,522)	(3,084,873)	114,351	(3.7)	%
Gross margin	1,962,596	2,255,165	(292,569)	(13.0)	%
Research and development	(354,881)	(294,216)	(60,665)	(20.6)	%
Selling, general and administration expenses	(1,061,508)	(985,616)	(75,892)	7.7	%
Operating expenses	(1,416,389)	(1,279,832)	(136,557)	10.7	%
Other Income	16,302	—	16,302	100	%
Profit/(loss) of equity accounted investees with similar activity to that of the Group	32,555	20,799	11,756	56.5	%
Operating result	595,064	996,132	(401,068)	(40.3)	%
Finance income	11,551	8,021	3,530	44.0	%
Finance costs	(277,994)	(249,639)	(28,355)	11.4	%
Change in fair value of financial instruments	246	55,703	(55,457)	(99.6)	%
Exchange differences	(11,602)	8,246	(19,848)
Finance result	(277,799)	(177,669)	(100,130)	56.4	%
Profit/(loss) of equity accounted investees	33,188	60,166	(26,978)	(44.8)	%
Profit before income tax from continuing operations	350,453	878,629	(528,176)	(60.1)	%
Income tax expense	(85,126)	(169,639)	84,513	(49.8)	%
Profit after income tax from continuing operations	265,327	708,990	(443,663)	(62.6)	%
Consolidated profit for the year	265,327	708,990	(443,663)	(62.6)	%

Net Revenue

Net revenue decreased by 7.6% (3.7% in constant currency), or €0.4 billion, in 2021 reaching €4.9 billion compared to €5.3 billion in 2020. The decrease was largely due to a decrease in Biopharma sales, partially offset by a net revenue increase in the Diagnostic and Bio Supplies business units, and Others.

The following table reflects a summary of net revenue by each of our business units for 2021, as compared to 2020:


	Year ended			Year ended
	December 31,	% of total		December 31,	% of total
Summary of Net Revenue by Business Unit	2021⁽¹⁾	net revenue		2020⁽¹⁾	net revenue		% var		% var CC⁽²⁾

	(in thousands of euros, except for percentages)
Biopharma	3,814,983	77.3	%	4,242,502	79.4	%	(10.1)	%	(5.9)	%
Diagnostic	779,108	15.8	%	775,889	14.5	%	0.4	%	3.5	%
Bio Supplies	115,811	2.3	%	133,221	2.5	%	(13.1)	%	(9.9)	%
Others	266,461	5.4	%	222,521	4.2	%	19.7	%	23.1	%
Intersegments	(43,245)	(0.8)	%	(34,095)	(0.6)	%	26.8	%	(33.7)	%
Total	4,933,118	100.0	%	5,340,038	100.0	%	(7.6)	%	(3.7)	%

(1)	As a consequence of the change in transactions and balances allocations by segments discussed in Item 4 of this Part I “A. Business Overview—Principal Activities—Other Activities and Operations (“Others”),” the comparative figures for the fiscal years 2021 and 2020 have been adjusted accordingly.

(2)	Net revenue variance in constant currency is determined by comparing adjusted current period net revenue, calculated using prior period monthly average exchange rates, to the prior period net revenue. See “Presentation of Financial and Other Information—Constant Currency.”

Table of Contents

Biopharma. Net revenue for the Biopharma business unit decreased by 10.1% (5.9% at constant currency) from €4.2 billion in 2020 to €3.8 billion in 2021. This decrease was mainly due to lower sales caused by the impact of the COVID-19 pandemic, which adversely affected our plasma collection volumes.

The lower plasma collection volumes triggered a decrease in IVIG volumes and revenue. This impact was partially offset by price increases in the United States, Canada and several E.U. countries, and contributions from new products such as Xembify^®, Vistaseal^TM and Tavlesse^®. In particular, sales of the subcutaneous immunoglobulin product Xembify^® increased by 48.3% (54.5% at constant currency) from 2020 to 2021. See “—Factors Affecting Our Financial Condition and Results of Operations—Consequences of COVID-19.”

Albumin sales maintained their positive trajectory, driven by mid-single-digit growth in China, where we launched our third albumin product (Plasbumin^®) in July, and in the Middle East.

Alpha-1 antitrypsin revenues continued to grow in its main markets–Canada and the U.S.– where AlphaD^TM, Grifols’ free testing program to detect AATD, has benefitted more than a million people. Demand is also robust in various European countries, including Germany, the Netherlands, Portugal and Italy. Currently, Grifols has three presentations to adapt treatments to patients’ needs. In 2021, we made further inroads to expand their availability in new markets such as Japan and France.

The performance of specialty proteins, supported by anti-rabies immunoglobulin and anti-tetanus immunoglobulin in the U.S., as well as anti-hepatitis B immunoglobulin in South America and APAC, was positive and grew in mid-single digit in 2021. In addition, tetanus vaccine increased mid-to-high single digit due to higher demand in the U.S.

In terms of new products, Tavlesse^® (fostamatinib) recorded positive sales performance in those European countries where it has been launched. Within the framework of the agreement with Rigel Pharmaceuticals, it is used to treat chronic immune thrombocytopenia (“ITP”) in adult patients refractory to other treatments. On the other hand, revenues of the biological sealant were particularly robust. The sealant is designed and developed by Grifols to control surgical bleeding using a combination of two plasma proteins (fibrinogen and thrombin) and marketed and distributed by Ethicon under the brand name Vistaseal^TM.

Diagnostic. The Diagnostic business unit’s net revenue increased by 0.4% (3.5% at constant currency) from €775.9 million in 2020 to €779.1 million in 2021. This increase was driven by a strong contribution of TMA (Transcription-Mediated Amplification) molecular tests used to detect the SARS-CoV-2 virus and the sales upturn of blood typing solutions. The strong sales of these products helped counterbalance the impact of the mandatory termination of Zika testing in blood and plasma donations.

Bio Supplies. The Bio Supplies business unit records sales of biological products for the pharmaceutical and diagnostics industry.

Net revenue from Bio Supplies decreased by 13.1% (9.9% at constant currency), from €133.2 million in 2020 to €115.8 million in 2021, mainly driven by higher biological products sales for the pharmaceutical and diagnostics industry and cell culture media.

Others. Net revenue increased by 19.7% (23.1% at constant currency) from €222.5 million in 2020 to €266.5 million in 2021. This increase relates to higher third-party plasma sales, an upswing in sales of intravenous solutions, nutrition and medical devices from the Healthcare Solutions business line, as well as such business line’s reactivated third-party manufacturing services.

Table of Contents

The following table reflects a summary of net revenue by each of our geographic regions for 2021 as compared to 2020:


	Year ended			Year ended
	December 31,	% of total		December 31,	% of total
Summary of Net Revenue by Region	2021	net revenue		2020	net revenue		% var		% var CC⁽¹⁾

	(in thousands of euros, except for percentages)
European Union⁽²⁾	906,449	18.4	%	834,492	15.6	%	8.6	%	8.7	%
United States and Canada	3,154,548	63.9	%	3,599,746	67.4	%	(12.4)	%	(7.9)	%
Rest of the World	872,121	17.7	%	905,800	17.0	%	(3.7)	%	1.3	%
Total	4,933,118	100.0	%	5,340,038	100.0	%	(7.6)	%	(3.7)	%

(1)	Net revenue variance in constant currency is determined by comparing adjusted current period net revenue, calculated using prior period monthly average exchange rates, to the prior period net revenue. See “Presentation of Financial and Other Information—Constant Currency.”

(2)	Net revenue earned in the European Union includes net revenue earned in Spain.

Net revenue in the U.S. and Canada decreased by 12.4% (7.9% at constant currency) from €3.6 billion in 2020 to €3.1 billion in 2021, mainly due to lower volume sales of IVIG as a result of plasma supply constraints partially offset by price increases. Meanwhile, sales in the European Union rose by 8.6% (8.7% at constant currency) to €906.4 million in 2021, led by growth in countries like Spain, Italy, Hungary and France. Sales in the Rest of the World decreased by 3.7% (increased by 1.3% at constant currency) in 2021 to €872.1 million principally as a result of performance in China.

Cost of sales

Cost of sales decreased by 3.7% from €3.1 billion in 2020 to €3.0 billion in 2021. Cost of sales as a percentage of net revenue increased to 60.2% compared to 57.8% in 2020. This was mainly due to the higher cost of plasma per liter, mainly as a result of higher donor compensation and lower absorption of fixed costs. See “—Factors Affecting Our Financial Condition and Results of Operations—Consequences of COVID-19,” and Item 4 of this Part I, “Information on the Company—B. Business Overview—Raw Materials.”

Gross Margin

The decrease in gross margin from 42.2% of net revenue in 2020 to 39.8% in 2021 was mainly due to the increase in cost of sales, as described above.

Research and development

Research and development spending increased by 20.6%, from €294.2 million (5.5% of net revenue) in 2020 to €354.9 million (7.2% of net revenue) in 2021. These results underscore our ongoing efforts to integrate and develop cutting-edge projects as those of Alkahest and GigaGen. See Item 4 of this Part I, “Information on the Company—B. Business Overview—Research and Development” for additional details.

Selling, general and administration expenses

Selling, general and administration expenses increased by 7.7% from €985.6 million in 2020 to €1,061.5 million in 2021, mainly as a result of the integration of new companies, such as Alkahest, GigaGen and Green Cross, as well as transaction and restructuring costs, higher freight costs due to global supply chain constraints, and general inflationary pressures.

Finance result

Finance result in 2021 represented a loss of €277.8 million, compared to a loss of €234.2 million in 2020, when excluding the one-time €56.5 million positive change in the fair value of financial instruments in connection with the closing of the Shanghai RAAS transaction in 2020. The increase mainly results from the issuance of the 2021 Notes (as defined herein) to finance the Biotest AG acquisition, in the amounts of €1,400,000,000 and $705,000,000, in the fourth quarter of 2021. See “—B. Liquidity and Capital Resources—Sources of Credit—The 2021 Notes.”

Table of Contents

Income tax expense

In 2021, we had a profit before income tax of €350.5 million and income tax expense of €85.1 million, which represents a tax rate of 24.3%. Our effective tax rate increased from 19.3% in 2020 primarily due to a change in the country mix of our taxable income.

Regulation

For detailed information regarding the regulations applicable to our business, see Item 4 of this Part I, “Information on the Company—E. Regulatory Matters.”

Inflation

We historically have not been affected materially by inflation in our core geographies. However, despite the current macroeconomic context, we are having some inflation pressures on labor costs and selling, general & administrative costs. See Item 5 of this Part I, "Operating and Financial Review and Prospects-A. Operating results-Overview" for additional details.

Liquidity and Capital Resources

Our principal liquidity and capital requirements consist of costs and expenses relating to:

the operation of our business (see “—Operating Results,” “—Liquidity and Capital Resources—Net Cash from Operating Activities” and “—Working Capital” for a description and quantification of costs and expenses relating to our operations);

capital expenditures for existing and new operations (see “—Capital Expenditures” for a description and quantification of our capital expenditures, including capital expenditures on other intangible assets and rights of use additions, incurred in each of the years ended December 31, 2020, 2021 and 2022;

the purchase price of acquisitions (see “—Recent Developments” and “—Factors Affecting Our Financial Condition and Results of Operations—Acquisitions” for a description of our most recent acquisitions); and

debt service requirements relating to our existing and future debt (see “—Sources of Credit” for a description and quantification of our principal indebtedness).

Historically, we have financed our liquidity and capital requirements through internally generated cash flows, mainly attributable to revenue and debt financings. As of December 31, 2022, our cash and cash equivalents totaled €548.0 million. In addition, as of December 31, 2022, we had the equivalent €1,048.0 million available under our debt agreements, including the equivalent of €938 million available as Revolving Loans under our First Lien Credit Facilities.

We expect our cash flows from operations combined with our cash balances and availability under the Revolving Loans from the First Lien Credit Facilities to provide sufficient liquidity to fund our current obligations (primarily debt service and acquisition payments as described above), projected working capital requirements and capital expenditures for at least the next twelve months. Currently, we do not generate significant cash in any country that might have restrictions for funds repatriation, and we estimate that the existing cash located in Ireland, Spain and the United States, along with the cash generated from operations, will be sufficient to meet future cash needs in key countries.

We are committed to deleveraging in the medium term and maintaining elevated and adequate levels of liquidity through (i) internally generated cash flows, and (ii) a substantial decrease in dividend payments in the medium term. We also do not envision any material acquisitions in the medium term.

Table of Contents

Our capital expenditures consist primarily of expanding and enhancing our production facilities, replacing fully depreciated items and promoting efficiency of our operations. In addition, we allocate cumulative industrial capital investments to expand the manufacturing capacities of the Biopharma business unit, as well as investments in the Diagnostic and Bio Supplies business units, with the goal of improving the structure of our plasma collection centers in the United States and expanding our manufacturing facilities. We are also expanding and relocating plasma donation centers and improving infrastructures related to raw materials classification, preparation and storage facilities, logistics centers and analysis laboratories.

Our principal existing contractual obligations as of December 31, 2022 are comprised of financial debt obligations, with principal and interest amortization for short- and long-term debt including, among other things, capitalized lease obligations and bilateral credit facilities bearing interest at market rate. In addition, on October 5, 2021, we entered into three cross-currency interest rate swaps of $705 million to hedge part of the Euro equivalent value of the 2021 Notes (see “—Sources of Credit” above and Notes 26 and 29 to our audited consolidated financial statements included in this annual report on Form 20-F for further discussion regarding our debt obligations and related interest rate agreements outstanding at December 31, 2021). We have contractual obligations involving future payments for licenses and royalties based generally on volume of sales.

Historical Cash Flows

The table below presents our net cash from operating, investing and financing activities for each of the years ended December 31, 2022, 2021 and 2020.


	Year Ended December 31,
	2022	2021	2020

	(in thousands of euros)
Net cash from operating activities	(10,867)	596,975	1,110,336
Net cash (used in) investing activities	(1,978,823)	(854,149)	(858,115)
Net cash from/(used in) financing activities	(173,493)	2,297,679	(354,401)

Net Cash from Operating Activities

In the year ended December 31, 2022, our net cash from operating activities represented a loss of €10.9 million due largely to an increase in inventory levels resulting from a higher cost per liter of plasma collected and upsurge in plasma donations. This context also adversely affected our working capital, which represented a loss of €609 million. The principal effects on working capital were as follows:

•

increase of €80.2 million in trade and other receivables. The average collection period increased to 36 days (32 days in 2021);

•

increase of €600.3 million in inventory levels primarily due to a higher cost per liter of plasma collected and higher donation volumes. Inventory turnover was 296 days at December 31, 2022, compared with 278 days reported at December 31, 2021; and

•

increase of €80.2 million in trade and other payables. The average payment period decreased from 64 days at December 31, 2021 to 53 days at December 31, 2022.

In the year ended December 31, 2021, we generated net cash from operating activities of €597 million. The principal effects on working capital were as follows:

increase of €16.8 million in trade and other receivables. The average collection period increased to 32 days (27 days in 2020);

increase of €157.5 million in inventory levels primarily due to an increase in period-to-period plasma volume collections through strategic acquisitions during 2021 and to the increase in the cost of plasma. Inventory turnover was 278 days at December 31, 2021, compared with 237 days reported at December 31, 2020; and

Table of Contents

increase of €40.4 million in trade payables. The average payment period increased from 62 days at December 31, 2020 to 64 days at December 31, 2021.

In the year ended December 31, 2020, we generated net cash from operating activities of €1.1 billion. The principal effects on working capital were as follows:

increase of €35.4 million in trade and other receivables. The average collection period remained stable at 27 days (26 days in 2019);

decrease of €164.6 million in inventory levels due to lower plasma collections and higher inventory utilization for the production of plasma-derived medicines during 2020, partially offset by the increase in the cost of plasma. Inventory turnover was 237 days at December 31, 2020, compared with 310 days reported at December 31, 2019; and

decrease of €2.3 million in trade payables. The average payment period increased from 60 days at December 31, 2019 to 62 days at December 31, 2020.

Net Cash from/(Used) in Investing Activities

Net cash used in investing activities amounted to €1,978.8 million in 2022, €854.1 million in 2021 and €858.1 million in 2020.

Investments made in 2022 included the Biotest AG acquisition for a total of €1.4 billion, as well as execution of the call option to acquire the remaining 51% of Access Biologicals’ share capital for a total of $142 million, and €375.5 million allocated to property, plant and equipment and intangible assets. Capital expenditures focused mainly on new Biopharma manufacturing facilities, including a new albumin plant in Dublin, the upgrade of the Montreal plasma fractionation, immunoglobulin purification and albumin plants, as well as several IT and digitalization-related projects. See “—A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Acquisitions;” and “—Capital Expenditures, Other Intangible Assets and Rights of Use.”

Investments made in 2021 included the acquisition of 25 plasma collection centers from BPL for $370 million, seven plasma collection centers from Kedplasma, LLC for $55.2 million, the first payment related to the acquisition of GigaGen for an amount of €38.2 million and the remaining payment for the Alkahest acquisition of $126 million. In addition to the aforementioned acquisitions, we invested €315.1 million in property, plant and equipment and other intangibles in 2021. See “—A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Acquisitions.”

Investments made in 2020 included the acquisition of Green Cross Biotherapeutics and Green Cross North America for $457.2 million (€387.9 million) and the remaining payment for the MedKeeper acquisition of $60.2 million (€51.2 million). We also invested €363 million in property, plant and equipment and other intangibles in 2020.

Net Cash from/(Used in) Financing Activities

Net cash used in financing activities was €173.5 million in 2022, primarily as a result of net debt repayments.

Net cash from financing activities was €2,297.7 million in 2021, primarily as a result of the issuance of the 2021 Notes to finance the Biotest AG acquisition, in the amounts of €1,400,000,000 and $705,000,000 (see “—B. Liquidity and Capital Resources—Sources of Credit—The 2021 Notes.”), and dividend payouts of €259 million. On the other hand, sale of investments includes the Biomat Transactions, under which we received a $990 million investment in our subsidiary Biomat USA. See “—A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Dispositions.”

Net cash used in financial activities was €354.4 million in 2020, primarily as a result of dividend payments of €113.2 million, net payments related to financial instruments amounting to €243.4 million, including debt repayment of €152.0 million, and lease payment of €78.9 million.

Table of Contents

Working Capital

Our working capital, which is driven primarily by our trade receivables turnover and inventory aging, can vary significantly from period to period depending on the activity. Our capital requirements will depend on many factors, including our rate of sales growth, acceptance of our products, continued access to adequate manufacturing capacities, maintaining cGMP compliant facilities, the timing and extent of research and development activities, and changes in operating expenses, including costs of production and sourcing of plasma, all of which are subject to uncertainty. We anticipate that our cash needs will be significant and that we may need to increase our borrowings under current or future debt agreements in order to fund our operations and strategic initiatives. We anticipate that our working capital will increase in absolute terms in order to grow our business.

Inventory Aging

Inventory aging average increased from 2021 to 2022, primarily as a result of the higher cost per liter of plasma collected and higher plasma donation volumes. Inventory turnover increased to 296 days at December 31, 2022, compared to 278 days at December 31, 2021. Inventory aging average increased from 2020 to 2021, primarily as a result of larger plasma volume collections driven by recent strategic acquisitions during 2021 and an increase in the cost of plasma. Inventory turnover increased to 278 days at December 31, 2021, compared to 237 days at December 31, 2020.

See Item 4 of this Part I, “Information on the Company—B. Business Overview—Raw Materials” for additional details.

Trade Receivables

Our receivables had an aging average of 36, 32 and 27 days at December 31, 2022, 2021 and 2020, respectively. We are focused on optimizing our working capital.

We may sell receivables with a maturity beyond 30 days to financial institutions without recourse. We sold €3,174.3 million, €2,975.3 million and €2,736 million of receivables to third parties during the years ended 2022, 2021 and 2020, respectively. The volume of invoices sold without recourse to various financial institutions which, based on their due date would not have been collected at December 31, 2022, is estimated to €445.2 (€317.1 million at December 31, 2021 and €441.9 million at December 31, 2020).

Capital Expenditures, Other Intangible Assets and Rights of Use

The following table presents our capital expenditure, other intangible assets and rights of use additions in the years ended December 31, 2022, 2021 and 2020, by business unit.


	Year Ended December 31,
	2022	2021⁽¹⁾	2020⁽¹⁾

	(in thousands of euros)
Biopharma	402,672	349,890	289,062
Diagnostic	49,890	19,991	34,516
Bio Supplies	98	13,836	10,915
Others	30,192	28,597	12,698
Unallocated	59,866	55,380	107,178
Total	542,718	467,694	454,369

(1)	As a consequence of the change in transactions and balances allocations by segments discussed in Item 4 of this Part I “A. Business Overview—Principal Activities—Other Activities and Operations (“Others”),” the comparative figures for the fiscal years 2021 and 2020 have been adjusted accordingly.

January 2020 through December 2022

Facilities. The most important capital projects relating to the expansion and improvement of our manufacturing facilities during 2020, 2021 and 2022 were:

Table of Contents

Parets site (Barcelona, Spain):

investments to increase purification capacity of fibrin sealant and topic thrombin of €3.2 million in 2020, €1.9 million in 2021 and €3.7 million in 2022;

investments in a plant to manufacture Prolastin-C^® of €1.3 million in 2020;

investments to increase the albumin purification capacity of €0.1 million in 2020;

investments to increase Factor VIII manufacturing capacity of €1.0 million in 2021 and €0.1 million in 2022;

investments to increase the production of intravenous solutions bags of €2.0 million in 2020 and €3.4 million in 2021 and €1.4 million in 2022;

investments to improve the manufacturing lines of the production of intravenous solutions in glass bottles in the Parets facility of €1.3 million in 2021 and €0.1 million in 2022; and

investments of €2.3 million in 2020, €4.2 million in 2021 and €0.5 million in 2022 to build the extension of the existing Grifols International building and 2-8ºC chamber for 2,000 pallets.

Clayton site (North Carolina, United States):

construction of a new immunoglobulins’ purification and filling plant for €65.8 million in 2020,€23.3 million in 2021 and €20.7 million in 2022;

construction of a new 6-million-liter fractionation plant for €10.4 million in 2020, €2.4 million in 2021 and €32,000 in 2022;

investments to expand packaging incubators for €1.1 million in 2020, €2.0 million in 2021 and €0.1 million in 2022;

investments of €0.4 million in 2020 for the construction of a finished goods warehouse with the capacity to store 6,000 pallet positions;

construction of a Plasma Logistic Center for €8.4 million in 2020 and €1.7 million in 2021 to increase the overall plasma storage capacity; and

expansion of Grifols’ current waste water pretreatment plant in Clayton to meet Town of Clayton permit limits for €6.2 million in 2020, €11.1 million in 2021 and €12.4 million in 2022.

Los Angeles (California, United States):

increasing our albumin purification capacity and including a new presentation in ready-to-use flexible bags for €1.0 million in 2020, €1.5 million in 2021 and €0.5 million in 2022; and

investments to increase Factor VIII manufacturing capacity of €0.7 million in 2020 and €0.3 million in 2021.

Dublin (Ireland):

investments to build a new headquarters, global operations and logistics center to serve as part of the new global operations center of the Biopharma business unit of €4.8 million in 2020, €0.8 million in 2021 and €2.0 million in 2022; and

Table of Contents

investment in a new albumin purification and filling plant for bags of €21.7 million in 2020, €33.0 million in 2021 and €17.6 million in 2022.

Montreal (Canada):

investment of €11.3 million in 2021 to remodel Canada facility for fractionation increase, Albumin manufacturing and Gamunex addition.

San Diego (California, United States):

investments of €1.1 million in 2020, €0.5 million in 2021 and €0.3 million in 2022 to expand manufacturing capacity for our NAT Diagnostic business, including quality control, research and development labs and an R&D pilot plant; and

investments of €0.5 million in 2020, €3.0 million in 2021 and €6.8 million in 2022 to build a new immunohematology manufacturing facility in building 10895.

Emeryville (California, United States):

investments of €7.3million in 2020, €4.4 million in 2021 and €0.3 million in 2022 for the new protein manufacturing process and scale up labs based on mammalian cell cultures; and

Other Investments. Other relevant capital projects relating to the expansion and improvement of our manufacturing facilities during 2020, 2021 and 2022 were:

investments in serialization to enhance manufacturing and packaging identification of €1.9 million in 2020, €1.2 million in 2021 and €1.3 million in 2022;

investments in new donor centers and donor center expansions in the United States of €6.0 million in 2020, €38.6 million in 2021 and €23.8 million in 2022;

investments of €9.7 million in 2020, €8.1 million in 2021 and €3.8 million in 2022, to expand our overall lab testing capacity;

investments for a new data center building in Los Angeles to support all IT services and to address current risks with the existing data center for €1.0 million in 2020, €1.7 million in 2021 and €0.9 million in 2022;

Spain: investments of €0.6 million in 2020, €0.3 million in 2021 and €0.1 million in 2022 to increase the capacity to manufacture parenteral solutions by approximately eight million units, reaching approximately 60 million units of total capacity. This increase will allow Grifols to produce a big portion of the anticoagulant solution required for plasma donations, following the vertical integration strategy for Biopharma business;

investments of €2.0 million in 2020 and €1.7 million in 2021 to increase our plastic manufacturing capacity and create vertical integration for the group with synergies between the Biopharma business unit and Healthcare Solutions line;

investments of €9.4 million in 2020, €3.0 million in 2021 and €3.8 million in 2022 for acquisition of a new plot next to our Barcelona manufacturing facilities of 79,180 square meters that will be used to grow our industrial and research capabilities, adding to the current Grifols workforce in the region by more than 3,500 employees;

investments to remodel our commercial offices worldwide of €1.0 million in 2020 and €1.9 million in 2021, including new offices in Beijing, Singapore, Chile, Marseille, Mexico, Tokyo, Czech Republic, Shanghai and a new warehouse in the U.K.;

Table of Contents

investments to update manufacturing facilities to EMA regulation related to the manufacturing of sterile medicinal products of €3.3 million in 2020, €4.6 million in 2021 and €5.1 million in 2022; and

investments to increase our IVIG purification capacity of €3.3 million in 2020, €1.2 million in 2021 and €0.8 million in 2022.

January 2023 through December 2024

In 2022, we completed a €1.4 billion investment plan initiated in 2018 that involved, among other investments, cumulative industrial capital investments to expand the manufacturing capacities of the Biopharma business unit, as well as investments in the Diagnostic business unit and Healthcare Solutions business line. We are currently focusing our capital expenditures on the maintenance of our facilities while we formulate a large-scale strategy for 2023 and 2024.

The majority of our capital investments benefit our Biopharma business unit, systemically enhancing our manufacturing facilities. We aim to optimize utilization of our fractionation capacity by obtaining FDA and EMA licenses and completing other requirements to purify any of our intermediate products at any of our plants. We are also relocating and renovating plasma donation centers and improving infrastructures related to raw materials classification, preparation and storage facilities, logistics centers and analysis laboratories. See “—A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Operational Improvement Plan.”

The most important planned capital projects relating to the improvement of our manufacturing facilities are:

Andorra: construction of a new immunology research center in Andorra;

●

Montreal: continue upgrading facilities for plasma fractionation and purification;

●

Dublin: overwrapping palletization project and final start-up of Phase I;

●

Bilbao: construction of a new building for single molecule counting near Progenika;

●

Murcia: investments related to bag filling expansion;

●

Clayton: expansion of the B350 Plasma Logistic Center, continue the investment for the upgrade of the waste treatment plant, investment in the initial Phase II of the purification and filling facility, and remodeling of the C580 building;

●

San Diego: rebuilding of a laboratory, offices and warehouse, and continue the expansion of the blood testing and immunohematology systems;

●

Dreieich: investments in several sectors to be made by Biotest AG, as well as in plasma collection centers; and

●

Egypt: construction of new manufacturing plant (phase I Plasma Logistic Center) and continue the construction of plasma collection centers (10 new centers planned).

100

Table of Contents

Collaboration with Canadian Blood Services

On July 29, 2022, we executed a 15-year renewable collaboration agreement with Canadian Blood Services (“CBS”), a non-profit organization in Canada that operates on a national basis within the Canadian healthcare system. CBS provides services for patients on behalf of all provincial and territorial governments of Canada except Quebec, safeguarding Canada’s national system to provide lifesaving therapies related to blood, plasma, stem cells, organs and tissues. By means of this agreement we committed to supply an amount of IG to CBS that is equivalent to 25% (2.4 million grams) of the Canadian patient consumption needs (excluding Quebec). We will fulfill this agreement exclusively through the collection of Canadian plasma from a to-be-developed Canadian plasma center collection network and manufactured through a newly Grifols built facility in Montreal, Quebec. In addition, from each liter of Canadian plasma used for the provision of IG, we will also supply to CBS all remaining manufactured paste for the processing of other plasma-derived products. We have committed to have the plasma collection network fully developed by July 2026 and a fully operational fractionation facility in Montreal by sometime in 2026.

Sources of Credit

European Investment Bank Term Loans

On October 28, 2015, GWWO entered into a loan agreement with the European Investment Bank for a term loan of €100 million under the European Fund for Strategic Investments (the “2015 EIB Term Loan”), which was amended on December 5, 2017. The financial terms of the loan agreement include a fixed interest rate of 2.40% for a tenor of ten years from October 28, 2015, and a repayment schedule with amortization in years three through ten. The proceeds of this loan are being used to support our research and development, primarily focusing on the search for new indications for plasmatic proteins, including the treatment of Alzheimer’s disease, vascular disease, cardiovascular surgery and arterial thrombosis, amongst others.

On December 5, 2017, Grifols obtained a new long-term loan with the European Investment Bank totaling €85 million (the “2017 EIB Term Loan”). The financial terms of the loan include a fixed interest rate of 2.019% for a tenor of ten years and a two-year grace period before any payment of principal becomes due and payable. The proceeds of this loan are being used for research and development initiatives, notably the discovery and development of new products (plasma proteins), the finding of new therapeutic indications for existing plasma proteins and the improvement of manufacturing processes to increase yields, safety and efficiency.

On September 7, 2018, Grifols obtained a new long-term loan with the European Investment Bank totaling €85 million (the “2018 EIB Term Loan” and, together with the 2015 EIB Term Loan and the 2017 EIB Term Loan, the “EIB Term Loans”). The financial terms of the loan agreement include a fixed interest rate of 2.145% for a tenor of 10 years and a two-year grace period before any payment of principal becomes due and payable. The proceeds of this loan are being used for research and development initiatives, notably the discovery of new therapeutic indications for plasma-derived protein therapies.

The EIB Term Loans are guaranteed by the same entities that guarantee the First Lien Credit Facilities described below and are secured by a perfected first priority security interest (subject to permitted liens, as defined in the documentation governing the EIB Term Loans) on the same collateral securing the First Lien Credit Facilities and the 2019 Notes, each as described below (noting that the blood plasma inventory of GWWO located in Spain is not charged to secure the 2019 Notes), subject to a customary pari passu intercreditor agreement entered into by and among Grifols, GWWO, certain subsidiaries of Grifols party thereto, the European Investment Bank, Bank of America, N.A., as collateral agent under the First Lien Credit Facilities and The Bank of New York Mellon, London branch, as collateral agent under the 2019 Notes.

We entered into an amendment to the EIB Term Loans on August 6, 2021 to permit (i) the consummation of the Biomat Transactions; and (ii) upon the consummation of the Biomat Transactions, the release of Biomat USA and Talecris from their respective guarantees provided under the corresponding guarantee agreement for the EIB Term Loans and that release the liens granted over the assets of Biomat USA and Talecris. The Biomat Transactions were consummated on December 1, 2021.

On September 28, 2022, we entered into Amended and Restated Accession Agreements in connection with the EIB Term Loans to add Biotest Holdings as guarantor thereunder.

As of December 31, 2022, we had €148.8 million in aggregate principal amount outstanding of EIB Term Loans.

101

Table of Contents

First Lien Credit Facilities

On November 15, 2019, we entered into a Credit and Guaranty Agreement (the “First Lien Credit Facilities”) with a syndicate led by Bank of America Europe Designated Activity Company (formerly known as Bank of America Merrill Lynch International Limited Designated Activity Company), Bank of America, N.A., BNP Paribas S.A., Sucursal en España, HSBC France, Banco Bilbao Vizcaya Argentaria S.A., and JP Morgan Securities PLC, as the arrangers (the “Arranging Banks”), which consist of the “Term Loans” and the “Revolving Loans.” The initial Term Loans (consisting of a Dollar Tranche B Term Loan and a Euro Tranche B Term Loan) were fully drawn down on November 15, 2019. Both the Dollar Tranche B Term Loan (in original principal amount equal to $2,500,000,000) and the Euro Tranche B Term Loan (in original principal amount equal to €1,360,000,000) mature eight years from November 15, 2019 and have a repayment schedule with quarterly amortization starting on the last business day of the fiscal quarter ending on March 31, 2020, equal to 0.25% of the aggregate principal amount of the initial Dollar Tranche B Term Loan (or Euro Tranche B Term Loan, as the case may be) outstanding on November 15, 2019, with the remainder payable at maturity.

The Revolving Loans, which initially provided for a commitment of $500,000,000, are available during the period commencing from November 15, 2019 and ending on the sixth anniversary of November 15, 2019. On May 7, 2020, we signed an upsize to the Revolving Loans to increase the lender commitments thereunder from $500,000,000 to $1,000,000,000 with the existing and new revolving lenders. The terms and conditions of which are similar to those entered into on November 15, 2019. As part of the upsize, the applicable margin for Revolving Loans was increased from 0.50% to 1.50% in the case of Base Rate Loans and from 1.50% to 2.50% in the case of Eurocurrency Rate Loans. Additionally, the commitment fee payable in respect of the unused Revolving Commitments was increased from 0.50% to 0.875%. The purpose of the upsize of the Revolving Loans was to reinforce our liquidity position.

The borrower under the revolving facility is GWWO, an Irish entity and our wholly owned direct subsidiary. The borrower under the Euro denominated tranche B facility is Grifols. The borrower under the Dollar-denominated tranche B facility is Grifols Worldwide Operations USA, Inc. (“Grifols Worldwide Operations USA”), a Delaware corporation and a direct wholly owned subsidiary of GWWO. The First Lien Credit Facilities are governed by New York law; however, certain collateral documents are governed under the local law of other jurisdictions.

The interest rates on the Revolving Loans are either (a) the base rate (i.e., the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) (1) if denominated in dollars or any other non-Euro currency, the London Interbank Offered Rate, or LIBOR, with a one-month interest period plus 1.00% and (2) if denominated in Euros, the Euro interbank offered rate, or EURIBOR, with a one-month interest period plus 1.00%) plus 1.50% or (b) LIBOR (if denominated in dollars or any other non-Euro currency) or EURIBOR (if denominated in Euros) plus 2.50%. The interest rate on the Dollar Tranche B Term Loan is either (a) the base rate plus 1.00% or (b) LIBOR plus 2.00%. The interest rate on the Euro Tranche B Term Loan is EURIBOR plus 2.25%.

Borrowings under the First Lien Credit Facilities are subject to mandatory prepayment upon the occurrence of certain events, including the incurrence of certain debt and the sale or other disposition of certain assets. In addition, a portion of the borrowings under the First Lien Credit Facilities are subject to mandatory prepayment in the event we have excess cash flow, as defined therein. Both the Term Loans and the Revolving Loans are guaranteed by Grifols (solely in respect of the obligations of Grifols Worldwide Operations USA and GWWO) and certain subsidiaries of Grifols that together with Grifols represented, as of December 31, 2022, in aggregate, at least 60% of the earnings before interest, tax, depreciation and amortization of Grifols and its subsidiaries (calculated in accordance with the formula set forth in the First Lien Credit Facilities, the “Guarantor Coverage Test”), and are secured by a perfected first priority security interest (subject to permitted liens, as described in the First Lien Credit Facilities) in all of the tangible and intangible assets of the U.S. credit parties and plasma inventory of GWWO and pledges of equity of certain subsidiaries of Grifols (subject to certain exclusions and limitations). The First Lien Credit Facilities include customary affirmative and negative covenants and events of default. Negative covenants include, among other limitations, limitations on additional debt, liens, asset sales and affiliate transactions. Events of defaults include, among other events, violation of covenants, material breaches of representations, cross default to other material debt, bankruptcy and insolvency and material judgments.

102

Table of Contents

The terms of the First Lien Credit Facilities contain limitations on our ability to pay ordinary dividends. We may pay dividends (a) in the ordinary course of business consistent with our dividend policy in an amount not to exceed in respect of any fiscal year, 40% of the consolidated net income of Grifols and its subsidiaries for such fiscal year, which may be paid in installments, the first, no earlier than December of such fiscal year and the last, no later than the following fiscal year or (b) whether or not in the ordinary course of business so long as after giving effect thereto, the leverage ratio is not greater than 3.75x. We may make regularly scheduled payments of interest in respect of the 2017 Notes and the Senior Refinancing Notes (as defined in the First Lien Credit Facilities) to the extent required by the terms of the indenture governing the 2017 Notes or the Senior Refinancing Notes Documents (as defined in the First Lien Credit Facilities), as the case may be.

The First Lien Credit Facilities and related security documents were amended on August 13, 2021 to (i) permit the consummation of the Biomat Transactions, (ii) reduce the Guarantor Coverage Test to 60%, and (iii) upon the consummation of the Biomat Transactions, release Biomat USA and Talecris from their respective guarantees provided under the First Lien Credit Facilities and release the liens granted over the assets of Biomat USA and Talecris.The Biomat Transactions were consummated on December 1, 2021, and we used part of the net proceeds therefrom to (i) prepay $600 million of principal amount of the Revolving Loans under the First Lien Credit Facilities, (ii) prepay $142,360,501.31 of the Dollar Tranche B Term Loans and (iii) prepay the Euro equivalent of $88,003,617.48 of the Euro Tranche B Term Loans.

On April 21, 2022 and April 25, 2022, we entered into Counterpart Agreements in connection with the First Lien Credit Facilities to add, respectively, the Escrow Issuer and Biotest Holdings as guarantors thereunder. On September 28, 2022, we amended and restated the Counterpart Agreement entered into on April 25, 2022 by Biotest Holdings to amend and restate the provisions relating to the guaranty limitations for German guarantors to account for Biotest Holdings conversion from a stock corporation (Aktiengesellschaft) to a limited liability company (Gesellschaft mit beschränkter Haftung).

As of December 31, 2022, we had €1,258.5 million and $2,313.9 million in aggregate principal amount outstanding of Term Loans, and no amounts outstanding under our Revolving Loans.

The 2017 Notes

On April 26, 2017, Grifols issued €1.0 billion aggregate principal amount of senior unsecured notes that will mature on May 1, 2025 and bear interest at 3.20% per annum (the “2017 Notes”). On May 2, 2017, the 2017 Notes were listed on the Global Exchange Market of the Irish Stock Exchange.

The 2017 Notes pay interest semi-annually in arrears on May 1 and November 1, commencing on November 1, 2017. The 2017 Notes are currently guaranteed on a senior unsecured basis by Grifols and the subsidiaries of Grifols that are guarantors and co-borrowers under the First Lien Credit Facilities. As of the date of this annual report on Form 20-F, the 2017 Notes are guaranteed by Grifols Biologicals LLC, Grifols Shared Services North America, Inc., Grifols Therapeutics LLC, Instituto Grifols, S.A., Grifols International S.A., Grifols USA, LLC, GWWO, Grifols Worldwide Operations USA, the Escrow Issuer and Biotest Holdings.

We may redeem the 2017 Notes, in whole or in part, at a redemption price of 100.000% of the principal amount plus accrued and unpaid interest, if any, on the 2017 Notes redeemed, to the applicable redemption date. We are not required to make mandatory redemption or sinking fund payments with respect to the 2017 Notes.

If we experience a change of control, we must give holders of the 2017 Notes the opportunity to sell to us their 2017 Notes at 101% of their principal amount, plus accrued and unpaid interest.

Grifols and the guarantors of the 2017 Notes may incur additional indebtedness if the fixed charge coverage ratio (as defined in the indenture governing the 2017 Notes) for Grifols and the restricted subsidiaries (as defined in the indenture governing the 2017 Notes) on a consolidated basis for the most recently ended four full fiscal quarters immediately preceding the date on which such additional indebtedness is incurred would have been at least 2.00 to 1.00, determined on a pro forma basis.

103

Table of Contents

The indenture governing the 2017 Notes contains certain covenants limiting, subject to exceptions, carve-outs and qualifications, Grifols’ ability and its restricted subsidiaries’ ability to: (i) pay dividends or make certain other restricted payments or investments; (ii) incur additional indebtedness or provide guarantees of indebtedness and issue disqualified stock; (iii) create liens on assets; (iv) merge, consolidate, or sell all or substantially all of our and our restricted subsidiaries’ assets; (v) enter into certain transactions with affiliates; (vi) create restrictions on dividends or other payments by our restricted subsidiaries; and (vii) create guarantees of indebtedness by restricted subsidiaries. The indenture also contains certain customary events of default.

On August 6, 2021, we entered into an indenture supplement amending the indenture governing the 2017 Notes to (i) permit the consummation of the Biomat Transactions, and (ii) upon the consummation of the Biomat Transactions, release Biomat USA and Talecris from their guarantees provided under the indenture governing the 2017 Notes. The Biomat Transactions were consummated on December 1, 2021. On April 21 and April 25, 2022, we entered into additional indenture supplements amending the indenture governing the 2017 Notes to add, respectively, the Escrow Issuer and Biotest Holdings as guarantors for the 2017 Notes.

The 2019 Notes

On November 15, 2019 Grifols issued €905.0 million senior secured notes that will mature on February 15, 2025 and bear interest at 1.625% per annum (the “1.625% Notes”) and €770.0 million senior secured notes that will mature on November 15, 2027 and bear interest at 2.250% per annum (the “2.250% Notes” and together with the 1.625% Notes, the “2019 Notes”).

The 2019 Notes are currently guaranteed on a senior secured basis by the wholly-owned subsidiaries of Grifols that are guarantors and co-borrowers under the First Lien Credit Facilities and the EIB Term Loans. As of the date of this annual report on Form 20-F, the 2019 Notes are guaranteed by Grifols Biologicals LLC, Grifols Shared Services North America, Inc., Grifols Therapeutics LLC, Instituto Grifols, S.A., Grifols International S.A., Grifols USA, LLC, GWWO, Grifols Worldwide Operations USA, the Escrow Issuer and Biotest Holdings. Subject to permitted liens, all obligations under the 2019 Notes, and the guarantees of those obligations, are secured on a first-priority basis by the tangible and intangible assets of the domestic guarantors, the blood plasma inventory of GWWO (with the exception of blood plasma inventory located in Spain) and pledges of equity of certain subsidiaries of Grifols (subject to certain exclusions and limitations). The collateral securing the 2019 Notes also secures the First Lien Credit Facilities and the EIB Term Loans, subject to the Intercreditor Agreement.

We are not required to make mandatory redemption or sinking fund payments with respect to the 2019 Notes.

If we experience a change of control, we must give holders of the 2019 Notes the opportunity to sell to us their 2019 Notes at 101% of their principal amount, plus accrued and unpaid interest.

Grifols and the guarantors of the 2019 Notes may incur additional indebtedness if the fixed charge coverage ratio (as defined in the indenture governing the 2019 Notes) for Grifols and the restricted subsidiaries (as defined in the indenture governing the 2019 Notes) on a consolidated basis for the most recently ended four full fiscal quarters immediately preceding the date on which such additional indebtedness is incurred would have been at least 2.00 to 1.00, determined on a pro forma basis.

The indenture governing the 2019 Notes contains certain covenants limiting, subject to exceptions, carve-outs and qualifications, Grifols’ ability and its restricted subsidiaries’ ability to: (i) pay dividends or make certain other restricted payments or investments; (ii) incur additional indebtedness or provide guarantees of indebtedness and issue disqualified stock; (iii) create liens on assets; (iv) merge, consolidate, or sell all or substantially all of our and our restricted subsidiaries’ assets; (v) enter into certain transactions with affiliates; (vi) create restrictions on dividends or other payments by our restricted subsidiaries; and (vii) create guarantees of indebtedness by restricted subsidiaries. The indenture also contains certain customary events of default.

On November 15, 2019 the 2019 Notes were listed on the Global Exchange Market of the Irish Stock Exchange.

On August 6, 2021, we entered into an indenture supplement amending the indenture governing the 2019 Notes to (i) permit the consummation of the Biomat Transactions, and (ii) upon the consummation of the Biomat Transactions, release Biomat USA and Talecris from their guarantees and collateral provided under the indenture governing the 2019 Notes. The Biomat Transactions were consummated on December 1, 2021, and, on January 11, 2022, we repurchased the total principal amount of €97,535,000 (€67,144,000 of 1.625% Notes and €30,391,000 of 2.250% Notes) of the 2019 Notes under an asset sale offer.

104

Table of Contents

On April 21 and April 25, 2022, we entered into additional indenture supplements amending the indenture governing the 2019 Notes to add, respectively, the Escrow Issuer and Biotest Holdings as guarantors for the 2019 Notes.

A. The 1.625% Notes

The 1.625% Notes pay interest semi-annually in arrears on February 15 and August 15, commencing on February 15, 2020. Grifols may redeem the 1.625% Notes, in whole or in part, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, on the 1.625% Notes redeemed, to the applicable redemption date (subject to the right of the holders of the 1.625% Notes on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period beginning on February 15 of the years indicated below:


Fiscal Year	Percentage
2023	100.40625	%
2024 and thereafter	100.000	%

B. The 2.250% Notes

The 2.250% Notes pay interest semi-annually in arrears on May 15 and November 15, commencing on May 15, 2020. Grifols may redeem the 2.250% Notes, in whole or in part, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, on the 2.250% Notes redeemed, to the applicable redemption date (subject to the right of the holders of the 2.250% Notes on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period beginning on November 15 of the years indicated below:


Fiscal Year	Percentage
2023	100.5625	%
2024 and thereafter	100.000	%

The 2021 Notes

On October 5, 2021, the Escrow Issuer, a newly formed wholly owned subsidiary of Grifols that does not hold or otherwise have any interest in any material assets, issued €1,400,000,000 senior notes that will mature on October 15, 2028 and bear interest at 3.875% per annum (the “Euro notes”) and $705,000,000 senior notes that will mature on October 15, 2028 and will bear interest at 4.750% per annum (the “Dollar notes” and together with the Euro notes, the “2021 Notes”). The 2021 Notes were issued to fund the acquisition of Biotest Holdings (and indirectly Biotest AG) and a voluntary tender offer for the shares in Biotest AG not owned by Biotest Holdings. See “—A. Factors Affecting Our Financial Condition and Results of Operations—Acquisitions—Biotest AG Acquisition.”

On the date of issuance of the 2021 Notes, the Escrow Issuer deposited the gross proceeds from the offering into segregated escrow accounts for the benefit of the holders of the 2021 Notes until such funds were released back to the Escrow Issuer on April 21, 2022 (the “Acquisition Escrow Release Date”) in connection with the consummation of the Biotest AG acquisition on April 25, 2022. Within 15 months from the Acquisition Escrow Release Date, the Escrow Issuer will merge with and into the Company, with the Company as the surviving entity, and we will assume all the obligations of the Escrow Issuer under the 2021 Notes (the “Escrow Issuer Merger”).

Prior to the Escrow Issuer Merger, the 2021 Notes will remain general unsecured obligations of the Escrow Issuer unconditionally guaranteed by Grifols and each of our subsidiaries that guarantee the First Lien Credit Facilities, GWWO and Grifols Worldwide Operations USA. From and after the Escrow Issuer Merger, the 2021 Notes will be general unsecured obligations of Grifols and will be unconditionally guaranteed by our subsidiaries that guarantee the obligations under the First Lien Credit Facilities, GWWO and Grifols Worldwide Operations USA.

The Escrow Issuer is not required to make mandatory redemption or sinking fund payments with respect to the 2021 Notes.

If we experience a change of control, we must give holders of the 2021 Notes the opportunity to sell to us their 2021 Notes at 101% of their principal amount, plus accrued and unpaid interest.

105

Table of Contents

Following the Escrow Issuer Merger, Grifols and the guarantors of the 2021 Notes may incur additional indebtedness if the fixed charge coverage ratio (as defined in the indenture governing the 2021 Notes) for Grifols and the restricted subsidiaries (as defined in the indenture governing the 2021 Notes) on a consolidated basis for the most recently ended four full fiscal quarters immediately preceding the date on which such additional indebtedness is incurred would have been at least 2.00 to 1.00, determined on a pro forma basis.

The indenture governing the 2021 Notes contains certain covenants limiting, subject to exceptions, carve-outs and qualifications, Grifols’ ability and its restricted subsidiaries’ ability to: (i) pay dividends or make certain other restricted payments or investments; (ii) incur additional indebtedness or provide guarantees of indebtedness and issue disqualified stock; (iii) create liens on assets; (iv) merge, consolidate, or sell all or substantially all of our and our restricted subsidiaries’ assets; (v) enter into certain transactions with affiliates; (vi) create restrictions on dividends or other payments by our restricted subsidiaries; and (vii) create guarantees of indebtedness by restricted subsidiaries. The indenture also contains certain customary events of default.

On October 11, 2021 the 2021 Notes were listed on the Global Exchange Market of the Irish Stock Exchange.

On September 28, 2022, we entered into an indenture supplement amending the indenture governing the 2021 Notes to add Biotest Holdings as guarantor for the 2021 Notes.

A. The Dollar notes

The Dollar notes accrue interest at the rate of 4.750% per annum pay interest semi-annually in arrears on April 15 and October 15, commencing on April 15, 2022. We may redeem the Dollar notes, in whole or in part, at any time on and after October 15, 2024 at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, on the Dollar notes redeemed, to the applicable redemption date (subject to the right of holders of the Dollar notes on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period beginning on October 15 of the years indicated below:


Fiscal Year	Percentage
2024	102.375	%
2025	101.188	%
2026 and thereafter	100.000	%

From and after the Escrow Issuer Merger and prior to October 15, 2024, we may redeem up to 40% of the aggregate principal amount of the Dollar notes at a redemption price equal to 104.750% of the principal amount thereof with an amount equal to or less than the net cash proceeds that we raise in one or more equity offerings, plus accrued and unpaid interest on such notes, if any, to, but not including, the redemption date.

B. The Euro notes.

The Euro notes accrue interest at the rate of 3.875% per annum pay interest semi-annually in arrears on April 15 and October 15, commencing on April 15, 2022. We may redeem the Euro notes, in whole or in part, at any time on and after October 15, 2024 at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, on the Euro notes redeemed, to the applicable redemption date (subject to the right of holders of the Euro notes on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period beginning on October 15 of the years indicated below:


Fiscal Year	Percentage
2024	101.938	%
2025	100.969	%
2026 and thereafter	100.000	%

106

Table of Contents

From and after the Escrow Issuer Merger and prior to October 15, 2024, we may redeem up to 40% of the aggregate principal amount of the Euro notes at a redemption price equal to 103.875% of the principal amount thereof with an amount equal to or less than the net cash proceeds that we raise in one or more equity offerings, plus accrued and unpaid interest on such notes, if any, to, but not including, the redemption date.

The Biomat Transactions

On December 1, 2021, we sold a minority equity interest in the Biomat Group to the GIC Investor. Specifically, the GIC Investor acquired 12.9% of Biomat Newco and 12.5% of Biomat USA. The purchase price received was $990 million.

As a result of the transaction, the GIC Investor received ten class B common shares of Biomat USA and nine class B common shares of Biomat Newco. These common shares are non-voting but have annual preferential dividends of $4,168,421.05 per share of Biomat USA and Biomat Newco. These preferential shares also granted the GIC Investor with redemption rights of up to one share per year beginning in 2023 at $52,105,263.16 per share. This investment was originally recorded as equity, but was later restated as debt in our consolidated financial statements for the year ended December 31, 2021, prepared under pursuant to IFRS-EU and filed with the Spanish National Securities Market Commission (Comisión Nacional del Mercado de Valores, or “CNMV”) in Spain. The investment by the GIC Investor is recorded as debt in our financial statements, and the reclassification did not affect compliance with the covenants under our debt instruments.

Other Debt

Certain other credit facilities and lease obligations are in place with various lenders and consist of long-term and short-term indebtedness of both us and Grifols subsidiaries. As of December 31, 2022, we had €74.0 million of aggregate short-term credit under these facilities. The short-term credit facilities have maturity dates occurring in the next 12 months.

Research and Development, Patents and Licenses

For detailed information regarding our research and development initiatives, see Item 4 of this Part I, “Information on the Company—B. Business Overview—Research and Development.”

Trend Information

Plasma-derived protein therapies are essential to extend and improve the lives of individuals suffering from chronic, acute and life-threatening conditions including infectious diseases, such as hepatitis, immunological diseases, such as multiple sclerosis, hemophilia, von Willebrand disease, liver dialysis and acute conditions such as burns and severe blood loss. For this reason, the administration of these products cannot be interrupted or postponed without putting patients’ lives at risk. This ensures a stable demand for such products. In addition, because of the nature of the diseases treated, the reimbursement rates for plasma derivative products in the United States are high. Any changes to such rates would likely elicit a strong lobbying response in the United States.

Based on MRB reports, in 2021, the worldwide plasma proteins market (without recombinant products) reached $29.2 billion, a 23.5% increase from 2018, or 7.3% per year of such three-year period. We believe that many plasma derivative products are underutilized and will continue to benefit from strong demand. Additionally, new indications are being explored for a number of plasma-derived therapies, such as the treatment of Alzheimer’s disease. We believe that the volume of global sales of plasma derivative products will continue to grow driven primarily by the same factors that have contributed to its historical growth, including:

population growth;

the discovery and approval of new applications and indications for plasma-based products;

an increase in the number of diagnosed patients and diagnosed but previously-untreated patients;

geographic expansion; and

physicians’ greater awareness of conditions and treatments.

107

Table of Contents

Approximately 17.0% of our sales were generated in the European Union in 2022, as compared to 18.4% in 2021 and 15.6% in 2020. We anticipate that the percentage of our sales generated in the European Union will not significantly increase in 2023.

Our plasma-collection levels began to recover in 2021 in the wake of wider vaccination and the easing of COVID-19 constraints. Plasma collections continued to improve in 2022, increasing by 25% in comparison to 2021. However, despite these improvements, we cannot assure you that the effects of the COVID-19 pandemics will not adversely affect our plasma collection in the future. See Item 3 of this Part I, “Key Information—D. Risk Factors—Risks Relating to the Company and Our Business—The Coronavirus pandemic has had, and could continue to have, a material, adverse impact on us” and Item 5 of this Part I, “Operating and Financial Review and Prospects—A. Operating Results—Consequences of COVID-19” for additional details.

There are significant barriers to entry into the plasma derivative products industry, as the industry is highly regulated and requires significant expertise and capital investments. We do not expect these barriers to decrease in the near term.

Regulatory Environment. In order to operate in the plasma derivatives industry, manufacturers and distributors must comply with extensive regulation by the FDA, the EMA and comparable authorities worldwide. As a result, significant investments are required to develop, equip and maintain the necessary storage, fractionation and purification facilities and to develop appropriate sale, marketing and distribution infrastructures. Additionally, only proteins derived from plasma collected at FDA-approved centers can be marketed in the United States, so securing an adequate supply of U.S. source plasma is required to operate in the United States. We expect these regulatory restrictions to continue.

Product Pipeline. We have an expanded portfolio of key products as a result of our recent acquisitions and will continue to invest in research and development with respect to new product and new indications for existing products. Some key research and development projects underway include clinical studies of the use of albumin, diagnostic and vaccine therapies to treat Alzheimer’s disease, of albumin to treat advance cirrhosis and ascites, and of antithrombin in heart surgery.

Operational Improvement Plan. We have recently approved an operational improvement plan designed to reinforce our competitiveness and build a more streamlined, efficient and cost-effective global organization. The plan focuses on three major areas: optimizing plasma costs and operations, streamlining corporate functions, and enhancing other efficiencies across the organization. See “A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Operational Improvement Plan.”

Critical Accounting Estimates

The preparation of consolidated financial statements in accordance with IFRS requires us to make estimates and judgments in certain circumstances that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures of contingent assets and liabilities. A detailed description of our significant accounting policies is included in the notes to our audited consolidated financial statements included elsewhere in this annual report on Form 20-F.

Certain of our accounting policies require subjective and complex judgments, often requiring the use of estimates about the effects of matters that are inherently uncertain. We apply estimation methodologies consistently from year to year. Other than changes required due to the issuance of new accounting guidance, there have been no significant changes in our application of critical accounting policies during the periods presented. We periodically review our critical accounting policies and estimates with the Audit Committee of our Board.

These accounting policies include depreciation, subsequent recognition, impairment, goodwill and amortization, among others. See Note 4 to our audited consolidated financial statements included in this annual report on Form 20-F for more information regarding our Critical Accounting Policies.

More information on newly issued accounting standards is included in Note 2 to our audited consolidated financial statements included in this annual report on Form 20-F.

108

Table of Contents

Item 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Directors and Senior Management

Directors

Set forth below are the names and current positions of the members of the Board:


Name	Age	Title	Type	Director Since	Term Expires
Víctor Grifols Roura	73	Honorary Chairperson	Proprietary	Jul 1991⁽¹⁾	May 2025
Thomas H. Glanzmann⁽²⁾	64	Executive Chairperson	Executive	Apr 2006	Oct 2024
Raimon Grifols Roura	59	Director, Vice-Chairperson of the Board and Chief Executive Officer	Executive	May 2015	May 2023
Víctor Grifols Deu	46	Director and Chief Executive Officer	Executive	May 2016	Oct 2024
Tomás Dagá Gelabert	67	Director and Vice-Secretary of the Board	Other External	Apr 2000	May 2023
Enriqueta Felip Font	59	Director	Independent	May 2019	May 2023
Montserrat Muñoz Abellana⁽³⁾	55	Director	Independent	June 2022	June 2026
Susana González Rodríguez ⁽³⁾	47	Director	Independent	June 2022	June 2026
Carina Szpilka Lázaro	54	Director and Lead Independent Director⁽⁴⁾	Independent	May 2015	May 2023
James Costos	60	Director	Independent	Oct 2020	Oct 2024
Iñigo Sánchez-Asiaín Mardones	59	Director	Independent	May 2015	May 2023
Nuria Martín Barnés	64	Secretary non-member of the Board of Directors	n/a	May 2015	n/a

(1)

Between July 8, 1991 and May 30, 2002, Mr. Víctor Grifols Roura was not a director but sat on the Board as representative of our then director Deria, S.A. On September 30, 2022, the Board accepted the resignation of Mr. Victor Grifols Roura as non-executive Chairperson of the Board. Mr. Grifols Roura continues being a member of the Board and is its Honorary Chairperson. On the same date, Mr. Steven Mayer was designated by the Board to serve as Executive Chairperson.

(2)

On February 21, 2023, the Board accepted the resignation of Mr. Steven Mayer as Executive Chairperson and member of the Board and designated Mr. Thomas Glanzmann as the new Executive Chairperson of the Board. Further, Mr. Raimon Grifols Roura was designated as the new Vice-Chairperson of the Board in substitution of Mr. Thomas Glanzmann.

(3)

On the General Shareholders’ Meeting held on June 10, 2022, the shareholders opted to not reelect the former members of the Board Marla E. Salmon and Belén Villalonga Morenés, whose term ended in 2022. Elected to replace them as Board members were Montserrat Muñoz Abellana and Susana González Rodríguez.

(4)

The lead independent director is a figure introduced by Law 31/2014, adopted on December 3, 2014, that amended the Spanish Companies Act in matters of corporate governance, or Law 31/2014. It is mandatory to appoint a lead independent director when the office of Chairperson of the Board and that of chief executive officer is held by the same person. The lead independent director must, among other responsibilities, (i) be an independent director and be authorized to request the calling of a board meeting or the inclusion of new points on the agenda of a board meeting already convened, (ii) coordinate and gather the non-executive directors and (iii) direct, when applicable, the Chairperson’s periodic evaluation by the Board. The Board in its meeting held on February 25, 2022, agreed to appoint Carina Szpilka Lázaro as the Company’s Lead Independent Director.

109

Table of Contents

Director Biographies

Víctor Grifols Roura

Mr. Víctor Grifols Roura is since September 30, 2022 Honorary Chairperson and proprietary director since January 1, 2017. From 1987 until his appointment as non-executive Chairperson, a position which he held until September, 30, 2022, he held the role of Chief Executive Officer and top executive of the Grifols Group, succeeding his father, Mr. Víctor Grifols i Lucas. Mr. Víctor Grifols Roura spearheaded the 1987 reorganization that created Grifols as it is today. Mr. Víctor Grifols Roura originally joined the Group in 1973 as an Export Manager and later served as Sales Manager. Mr. Grifols Roura earned a business administration degree from the University of Barcelona. As part of the approved Company’s succession plan on January 1, 2017, Mr. Víctor Grifols Deu and Mr. Raimon Grifols Roura were appointed co-CEOs of the Company.

Mr. Víctor Grifols Roura is a shareholder of Deria S.A. (a non-controlling shareholder, pursuant to the Spanish Securities Market Act (Ley 6/2023, de 17 de marzo, de los Mercados de Valores y de los Servicios de Inversión) as amended and restated (the “Spanish Securities Market Act”). He is also a shareholder of Scranton Enterprises, B.V. (a non-controlling shareholder, pursuant to the Spanish Securities Market Act).

Víctor Grifols Deu

Mr. Víctor Grifols Deu is Grifols’ joint and several Chief Executive Officer together with Mr. Raimon Grifols Roura since January 1, 2017. He succeeded his father, Mr. Víctor Grifols Roura in the position. He is a member of the administration bodies of several companies within the Grifols Group and was appointed executive director in May 2016. He joined the Company in 2001 as an analyst in the Planning and Control Department of the Company. In 2008 he became the director of the Planning and Control Department and was also appointed a member of the Executive Committee. He has been part of the team that analyzed and was responsible for the integration of operations after the acquisition of Alpha Therapeutics, Talecris Biotherapeutics and Novartis’ Transfusion Diagnostic Unit. He graduated in Business Administration and Management from the Ramon Llull University — Sarrià Chemical Institute and holds a postgraduate degree in Business Administration and Management from Michael Smurfit Business School in Dublin.

Mr. Víctor Grifols Deu is a shareholder of Ralledor Holding Spain S.L. (a non-controlling shareholder, pursuant to the Spanish Securities Market Act).

Raimon Grifols Roura

Mr. Raimon Grifols Roura is Grifols’ joint and several Chief Executive Officer together with Mr. Víctor Grifols Deu since January 1, 2017 and since February 21, 2023 he is the Vice-Chairperson of the Board. He succeeded his brother, Mr. Víctor Grifols Roura in the position. He is a member of the administration bodies of several companies within the Grifols Group. From 2001 to 2015 he held the role of non-member secretary of the Board of Directors of Grifols, and in 2015 began serving as director and Vice Secretary of the Board of Directors. In May 2016, the Board accepted his resignation as Vice Secretary. Until his appointment as executive director in July 2016, Mr. Grifols Roura was a partner at the law firm Osborne Clarke in Spain. Mr. Grifols Roura earned his law degree from the University of Barcelona (Universidad de Barcelona).

Mr. Raimon Grifols Roura is a shareholder of Deria S.A. (a non-controlling shareholder, pursuant to the Spanish Securities Market Act). He is also a shareholder of Scranton Enterprises, B.V. (a non-controlling shareholder, pursuant to the Spanish Securities Market Act).

Tomás Dagá Gelabert

Mr. Tomás Dagá Gelabert has served as director of Grifols since April 2000 and also as Vice Secretary of the Board since May 2016. He is a partner and founder of the law firm Osborne Clarke in Spain. He was the managing partner of the law firm Osborne Clarke in Spain until June 30, 2017. Prior to joining Osborne Clarke, he worked in the corporate and tax department of Peat Marwick Mitchell & Co. in Barcelona. His professional career has provided him with a wide range of accounting, financial and audit skills. He is currently a member of the administrative bodies of several companies within the Grifols Group. He is a board member of RAAS Blood Products Co., Ltd. Mr. Dagá earned his law degree from the University of Barcelona (Universidad de Barcelona).

110

Table of Contents

Mr. Tomás Dagá Gelabert is a shareholder of Scranton Enterprises, B.V. (a non-controlling shareholder, pursuant to the Spanish Securities Market Act).

Thomas H. Glanzmann

Mr. Thomas H. Glanzmann has served as a director of Grifols since April 2006 and since February 21, 2023, he is the Executive Chairperson of the Company. He serves as a director on the board and as a member of several committees at Alcon, Inc. (among others, the sustainability, compensation and innovation committees). He is also a founder and General Partner in Medical Technology Venture Partners in California. From 2006 until 2011 he was the CEO and Chairman of Gambro AB. Prior to this Mr. Glanzmann was the CEO and Managing Director of HemoCue AB. Between 1988 and 2004 he held various positions at Baxter Healthcare Corporation: Senior Vice President and Senior Corporate Officer of Baxter Healthcare Corporation; President of Baxter Bioscience; Chief Executive Officer of Immuno International; and President of the European Biotech Group, among others. Between 1984 and 1988 he worked at Philip Morris where he was the country manager for Norway, Denmark and Iceland. Mr. Glanzmann holds an MBA from IMD in Lausanne-Switzerland, a B.A. in Political Science from Dartmouth College, U.S., and a Board of Directors Certification from the UCLA Anderson School of Management, U.S.

Enriqueta Felip Font

Ms. Enriqueta Felip Font has served as a director of Grifols since May 2019. She received her degree in Medicine and Surgery from the Autonomous University of Barcelona (UAB), where she also completed her studies for a PhD in Medical Oncology. She was an Associate Professor at the UAB from 2010 to May 2019. She is a Professor of Medicine at the Universitat de Vic (UVicc-UCC). Ms. Felip Font has an extensive professional career and accredited experience in the oncology sector, as well as knowledge in the scientific and research field. She is currently the Section Chief of the Medical Oncology Service at Vall d’Hebron University Hospital and the Principal Investigator of the Vall d’Hebron Institute of Oncology’s Thoracic Tumors and Head and Neck Cancer Group. Ms. Enriqueta Felip Font has made a significant contribution to cancer research, especially in the field of thoracic tumors, and has collaborated in the development of lung cancer approaches that define the current standard of care for the disease. Ms. Enriqueta Felip Font has been involved in several initiatives with scientific organizations, among them, as member of the Board of Directors of the International Association for the Study of Lung Cancer (IASLC, 2017-2021). She is currently the President of the Oncology Comission at Vall d’Hebron University Hospital and a member of the Scientific Committee of the Institut d'Investigació i Innovació Parc Taulí. Throughout her career, she has obtained several recognitions for her work in the oncology field. In 2015, she was awarded with the first Women for Oncology Award from the European Society of Medical Oncology (ESMO). In May 2022, she was awarded with the Prize “La Vanguardia de la Ciencia,” which awards cutting-edge scientific works aiming to give visibility to frontier scientific research in Spain.

Most recently, she featured on Clarivate Analytics’ annual Global Highly Cited Researchers List 2018, 2019, 2020, 2021 and 2022. Ms. Enriqueta Felip Font has authored more than 300 peer-reviewed articles. Her professional background has provided her with expertise and knowledge on scientific and innovation matters.

Montserrat Muñoz Abellana

Ms. Muñoz Abellana earned a degree in Chemical Engineering from the Institut Químic de Sarrià in Barcelona (Universitat Ramon Lull) and several Executive Development Programs at IESE, INSEAD and the London Business School.

She began her professional career in the Consumer Goods sector at Procter & Gamble where she held different roles in Operations across Europe. For the last 17 years and until end of 2022, she has been a Senior Executive at Danone where she has served as Global Medical Nutrition Operations Vice President, Iberia Medical Nutrition General Manager and Value Chain Digital Transformation Vice President.

111

Table of Contents

Ms. Muñoz Abellana is also an independent director and the Chairperson of the Audit and Compliance Committee at Uriach and independent director at Comexi and has served from 2015 to early 2022 as Board member in related National Industry Groups (Asociación Española de Nutrición Enteral and Federación Española de la Industria de Alimentación y Bebidas). Her professional background has provided her with expertise and knowledge on digital transformation matters.

Susana González Rodríguez

Ms. González Rodríguez earned a degree in Business Administration from the Asturias Business School and an MBA from the San Francisco State University. She began her professional career in the electronics industry sector at TE Connectivity where she held different roles. She is currently a Senior Executive at Rockwell Automation where, since January 2019, she has served as President of the Europe, Middle East, and Africa regions. Likewise, she is a managing director at Rockwell Automation B.V. and is a member of the Global Business Women Leaders Council by The Conference Board. Her professional background has provided her with expertise and knowledge on digital transformation matters.

Carina Szpilka Lázaro

Ms. Carina Szpilka Lázaro has served as a director of Grifols since May 2015 and is the Lead Independent director of Grifols’ Board since February 2022. She earned a degree in Business Administration from the Universidad Pontificia de Comillas in Madrid (ICADE) and an Executive MBA from the Instituto de Empresa de Madrid. She began her professional career in the financial sector working at Banco Santander and Argentaria (now known as BBVA). In 1998 she was part of the team that founded ING Direct in Spain, where she held the position of CEO from 2010 to 2013, having previously held that position in ING Direct France from 2008 to 2010. She is currently an independent director at Abanca and Meliá Hotels International, as well as a partner at KFund Venture Capital and Chairwoman of Adigital. She has received numerous awards. Among others, in 2011 she was given the “Female Executive of the Year” award by the Spanish Federation of Female Directors, Executives, Professionals and Entrepreneurs (Federación Española de Mujeres Directivas - FEDEPE). For four years, she was also a member of the UNICEF Foundation. Her academic and professional background has provided her with financial, accounting and audit skills as well as in the field of digitalization.

James Costos

Mr. James Costos has served as a director of Grifols since October 2020. He is an American diplomat who holds a degree in Political Science from the University of Massachusetts. He has an extensive professional career and accredited experience in different sectors including international relations and the digital and communications sectors. From 2013 to 2017, he was the U.S. Ambassador to the Kingdom of Spain and to the Principality of Andorra. He is currently the President of Secuoya Studios in Madrid. He is a member of the Board of Directors of PJT Partners, a firm providing financial advisory services in investment banking, Senior Advisor of F.C. Barcelona and Senior Managing Director in the Venture Technology Group at Dentons. He is member of various cultural and humanitarian organizations, among others the Reina Sofía Museum, as well as he is a member of the board of the Human Rights Campaign. Likewise, he has been appointed as member of the J. William Fullbright Foreign Scholarship Board. His professional background has provided him with international expertise and knowledge on matters such as the development of diversity and equality policies.

Iñigo Sánchez-Asiaín Mardones

Mr. Iñigo Sánchez-Asiaín Mardones has been the Lead Independent director of the Board since May 2015 until 2022 and he has served as director of Grifols, S.A. since May 2015. He earned a degree in Business Administration from the Universidad Pontificia de Comillas in Madrid (ICADE) and an MBA from Harvard Business School. In 2010 he founded Portobello Capital, where he remains a partner and a member of the Executive Committee and Investment Committee, leading the investments in companies such as Angulas Aguinaga, a company where he is Vice-Chairman and member of the Executive Committee, and Hotels & Resorts Blue Sea, S.L., where he is a member of the Board of Directors. He is also a member of the Executive Committee at the Harvard Club of Spain, which he has previously chaired. Previously, from 1993 to 2005, he was Deputy General Director at Banco Santander and from 2005-2010 was a partner and member of the board of directors of Ibersuizas Gestión SGECR, S.A, through which, together with his academic training, he has gained experience and knowledge on matters such as accounting, audit and risk management, both financial and non-financial.

112

Table of Contents

Biography of the Secretary Non-Member of the Board

Nuria Martín Barnés

Ms. Nuria Martín Barnés served as Vice-Secretary Non-Member of the Board of Directors from 2001 to 2015, and has served as Secretary Non-Member of the Board of Directors since 2015. Ms. Martín has been the managing Partner at Osborne Clarke Spain since July 1, 2017 until December 31, 2022. Prior to joining Osborne Clarke she worked in the Corporate and Tax Department of KPMG Peat Marwick from 1982 to 1986. Ms. Martín is a trustee of the Probitas Fundación Privada foundation and she is also secretary and member of the board of directors of Compañía General de Inversiones, S.I.C.A.V., S.A., and Gesiuris Asset Management, S.G.I.I.C., S.A. Ms. Martín earned her law degree from the University of Barcelona.

Senior Management

In 2022, we effected some changes in our senior management aligned with our strategic plan of streamlining corporate functions and enhancing other efficiencies across the organization. See Item 5 of this Part I “Operating and Financial Review and Prospects—A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Operational Improvement Plan.” Our senior management currently consists of the following persons:

Name	Age	Title	Since
Raimon Grifols Roura	59	Vice Chairperson & Co-Chief Executive Officer	2023
Víctor Grifols Deu	46	Co-Chief Executive Officer	2017
Alfredo Arroyo Guerra	66	Chief Financial Officer	2013
Vicente Blanquer Torre	62	Chief Quality Officer	2016
Montserrat Gaja Llamas	58	Chief Human Resources Officer	2021
David Ian Bell	68	Chief Corporate Development, Legal & Data Protection Officer	2022
Daniel Fleta Coit	52	Chief Industrial Services Officer	2022
Alberto Grifols Roura	64	President of the Bio Supplies business unit	2018
Maria Teresa Rioné Llano	58	Chief Communications Officer	2018
Albert Grifols Coma-Cros	45	Chief Scientific Innovation Officer	2021
Antonio Martinez Martinez	56	President of the Diagnostic business unit	2022
Fernando Rodriguez Haro	45	Executive Vice President, Transformation	2016
Francisco Javier Guix Huguet	61	Vice President, Healthcare Solutions	2022
Lluis Pons Gomez	40	Senior Vice President, Strategy	2022
Ignacio Ramal Subira	55	Chief Internal Audit & Enterprise Risk Manager	2022
Jordi Balsells Valls	50	President, Plasma Procurement	2022
Maria Pia D’Urbano	54	President, Biopharma	2022

Senior Management Biographies

The following are the biographies of our senior management who are not also directors:

Alfredo Arroyo Guerra

Mr. Arroyo has served as our Corporate Vice President and Chief Financial Officer since January 2007. Previously, Mr. Arroyo served as a CFO and in various Senior Finance positions in companies including KPMG, Carrefour, Chupa Chups, Reckitt Benckiser and Winterthur. Mr. Arroyo received a degree in Economics and is a Certified Public Accountant in Spain.

113

Table of Contents

Vicente Blanquer Torre

Mr. Blanquer has served as our VP Quality and Regulatory Affairs since 2007 and was Corporate Vice President and the Technical Director of the Biological Industrial Group (previously the Pharmaceutical Technical Director) since 1993. He is currently the Chief Quality Officer, responsible for both Biopharma’s quality assurance and quality control. From 1987 until 1993, he was the Deputy Technical Director, responsible for process quality control concerning plasma derivatives manufacturing. Mr. Blanquer received a degree in Pharmacy from the University of Barcelona.

Montserrat Gaja Llamas

Ms. Gaja joined us in 1992. She currently serves as Chief Human Resources Officer. Previously, she served as Deputy Chief Human Resources Officer and VP Compensation & Benefits from 2011 to 2020. She also served in different positions in the Administration and Finance departments. Prior to joining us, Ms. Gaja served as Accountant Analyst at Banco de la Pequeña y Mediana Empresa. Ms. Gaja received a Bachelor’s Degree in Economics at the University of Barcelona.

David Ian Bell

Mr. Bell has been the General Counsel NA since 2003 and Chief Corporate Development Officer since 2021. He currently serves as Chief Corporate Development, Legal and Data Protection Officer. He previously held the position of Chief Innovation Officer from 2016 to 2020. Mr. Bell joined us as a Corporate Vice President of Grifols Shared Services North America, Inc. (previously Grifols, Inc.) in July 2003. He also served as a member of our Executive Committee in Spain. He additionally serves on the boards of numerous companies affiliated to Grifols. Mr. Bell is responsible for all legal activities of our U.S. operations, including litigation, mergers and acquisitions, real estate transactions, intellectual property and contracts. Prior to joining us, Mr. Bell was Vice President and General Counsel for Alpha. He also spent time as a partner at the U.S. law firm of Knapp, Petersen & Clarke where he specialized in complex litigation involving healthcare, pharmaceutical and biotechnology regulation and liability. Mr. Bell attended the University of California, Irvine, Southwestern University School of Law and a postgraduate program at Harvard Law School. He is a member of the California State Bar and is admitted to practice before the United States Supreme Court as well as numerous federal appellate and district courts.

Daniel Fleta Coit

Mr. Fleta joined us in 2001 and, since June 2022, he has been our Chief Industrial Services Officer. From 2018 to 2022, he served as our Chief Industrial Officer. Previously, Mr. Fleta served as Managing Director of Grifols Engineering S.A. from 2011 to 2018. Beginning in 2005, he has served as Director Pharmaceutical Projects. Mr. Fleta received a degree in Industrial Engineering from the Institut Químic de Sarrià in 1995.

Alberto Grifols Roura

Mr. Grifols joined us in 1985 and since 2018 has served as President Bio Supplies business unit. Previously he held several positions, such as Managing Director of Grifols Argentina S.A., Managing Director of Biomat S.A., Managing Director of Laboratorios Grifols, and President of Instituto Grifols, S.A. from 2011 to 2016. Mr. Grifols received a Master’s degree in Industrial Engineering from the Universitat Politècnica de Terrassa in 1985.

Maria Teresa Rioné Llano

Ms. Rioné joined Grifols in 2018 and currently serves as the Chief Communications Officer. Prior to joining Grifols, Ms. Rioné was Senior Director of Communications Western Europe at Nike Corporation. Ms. Rioné is a graduate in Law with honors in Commercial Law from Universitat de Barcelona and a Master’s in Marketing and Sales Management from IE Business School.

Albert Grifols Coma-Cros

Mr. Grifols Coma-Cros joined Grifols in 2004 and since 2021 serves as Chief Scientific Innovation Officer. He held the position of President at GWWO from 2018 to 2020, and previously he was the Corporate Cash Manager and Global Treasury Director. Mr. Grifols Coma-Cros received a degree in Business Administration from the Universitat Autònoma de Barcelona in 2004.

114

Table of Contents

Antonio Martinez Martinez

Dr. Martinez joined Grifols in 2020 and, since 2022, serves as President of the Diagnostic business unit. Previously, he was the President of Diagnostic Scientific & R&D. Prior to Grifols, he served as Chief Executive Officer of Progenika Biopharma S.A., a leading molecular diagnostic company dedicated to personalized medicine he co-founded in 2000 and that was acquired by Grifols in 2013. Mr. Martinez has received the Ernst & Young Most Innovative Entrepreneur Award (2010) and the Ruban d´Honneur in the European Business Awards, HSBC Bank (2011). Before receiving a MOD from the Instituto de Empresa, Dr. Martinez obtained his PhD from the University of Navarra with a project aimed at the development of a diagnostic method for cystic fibrosis, an aim that he accomplished in 1992. The output of Dr. Martinez’s research and development work includes more than 70 publications in scientific journals and 20 patent applications on diagnostic methods for genotyping or gene expression.

Fernando Rodriguez Haro

Mr. Rodriguez joined Grifols in 2016 and, since 2022, has been serving as Executive Vice-President, Transformation. Previously, he served as Vice-President, Corporate Planning & Control. Prior to joining Grifols, Mr. Rodriguez served in various finance leadership roles at AkzoNobel N.V. and Nike Inc. Mr. Rodriguez received a degree in Economics from Universidad Nacional de Córdoba, Argentina and a Master’s in Business Administration from DePaul University - Kellstadt School of Business.

Francisco Javier Guix Huguet

Mr. Guix joined Grifols in 1989 and, since June 2022, he has been our Vice-President, Healthcare Solutions. From 2018 to 2022, Mr. Guix served as President, Hospital Sales & Commercial Operations IBAM&ROW. Since he started in Grifols as a Medical Devices Product Manager he has occupied several commercial positions in Marketing and Sales Management. He is a member of the Kiro Grifols board since the creation of this company in 2014. He occupies also a place in the Constant Group board. Mr. Guix received a degree in Biochemistry by the Universitat Autonoma de Barcelona in 1987.

Lluis Pons Gomez

Mr. Pons joined Grifols in 2017. He currently serves as Senior Vice-President, Strategy. Previously, Mr. Pons served in Bain&Co. as a management consultant. Mr. Pons holds an MBA from Hong Kong UST and London Business School and received a degree in Industrial Engineering from the Universitat Politecnica de Catalunya in 2000.

Ignacio Ramal Subira

Mr. Ramal joined Grifols in 2008. He currently serves as Chief Internal Audit & Enterprise Risk Manager. Previously, Mr. Ramal served as external auditor in Ernst & Young. Mr. Ramal received a degree in Economics and is a Certified Public Accountant in Spain.

Jordi Balsells Valls

Mr. Balsells joined Grifols in 2022 as President of Plasma Procurement. Previously, Mr. Balsells served in various executive roles at FC Barcelona and Desigual. Mr. Balsells received a degree in Economics and Business Administration from Universitat Pompeu Fabra (Barcelona) and an Executive MBA degree from Esade Business School.

115

Table of Contents

Maria Pia D’Urbano

Ms. D’Urbano joined Grifols in 2022 as President of the Biopharma business unit. Prior to joining Grifols, she held the position of Senior Vice President and Head of Commercial for Novo Nordisk from 2020 to 2022, and was a US Senior Executive member of Novo Nordisk since joining Novo Nordisk in 2018 as Corporate Vice President, Biopharmaceuticals. Prior to joining Novo Nordisk, Mrs. D’Urbano was a member of the US Executive Committee at Sanofi and held multiple roles, such as Vice President and Head of US Public Affairs & Advocacy, Vice President and Head of the US Dermatology and Respiratory Biologics Business unit. She also served as Vice President and Head of New Products Launch Unit, North America and Associate Vice President, Commercial Brand Head, for the US Oncology business. Her leadership roles also included serving as co-chair of WISE (Women Inspiring Sanofi Excellence.). Mrs. D’Urbano holds a marketing degree from Vanier College, as well as a Bachelor of Commerce/Business from Concordia University, both in Montreal, Canada.

Family Relationships

Mr. Raimon Grifols Roura, director and one of our Co-Chief Executive Officers, Mr. Alberto Grifols Roura, President of the Bio Supplies business unit and Mr. Víctor Grifols Roura, a director and Honorary Chairperson of the Board, are brothers.

Mr. Raimon Grifols Roura is the uncle of Mr. Víctor Grifols Deu, both being directors and Co-Chief Executive Officers.

Mr. Alberto Grifols Roura, the President of the Bio Supplies business unit, is the uncle of Mr. Victor Grifols Deu, one of our Co-Chief Executive Officers.

Mr. Víctor Grifols Deu, director and one of our Co-Chief Executive Officers, is the son of Mr. Víctor Grifols Roura, a director and the Honorary Chairperson of the Board.

Messrs. Víctor Grifols Roura, Alberto Grifols Roura and Raimon Grifols Roura are the grandchildren of Mr. José Antonio Grifols i Roig, our founder.

Mr. Raimon Grifols Roura, director and one of our Co-Chief Executive Officers, Mr. Alberto Grifols Roura, President of the Bio Supplies business unit and Mr. Victor Grifols Roura, a director and Honorary Chairperson of the Board, are cousins of Mr. Albert Grifols Coma-Cros, the Chief Scientific Innovation Officer.

Arrangements Pursuant to Which Certain Directors or Senior Management Were Selected

We have no arrangements.

Compensation

Compensation of Members of the Board

The Articles of Association generally set forth the processes for the determination of the compensation paid to the members of the Board. Article 20.bis of the Articles of Association currently in force provides that the directors’ remuneration shall be approved by the General Shareholders’ Meeting and shall apply for a maximum of three fiscal years. New directors’ remuneration policies must be approved by the General Shareholders’ Meeting prior to the last year of applicability of the previous policy, and any new policies approved may apply from the date of approval up to the three following years if so determined by the General Shareholders’ Meeting.

Our directors are entitled to receive compensation in a fixed amount for serving as directors on our Board, pursuant to our Articles of Association and the directors’ remuneration policy in force at any time. Director compensation for the performance of executive duties may consist of (i) a fixed amount, (ii) a variable amount based on financial and non-financial metrics, and (iii) if applicable, compensations in certain cases of termination or dismissal, in each case pursuant to the Articles of Association and the directors’ remuneration policy, as well as with the agreements approved in accordance with the provisions of the Spanish Companies Act.

116

Table of Contents

Pursuant to Article 26 of the Regulations of the Internal Functioning of the Board of Directors of Grifols, S.A. currently in force (Reglamento de funcionamiento interno del consejo de administración, or the “Board Regulations”) the directors’ remuneration policy (i) with respect to directors in their role as such shall necessarily determine the maximum amount of the annual remuneration to be paid to all said directors in their role as such, as well as the criteria for its distribution taking into account the duties and responsibilities attributed to each of them and (ii) with respect to the remuneration of the directors for performing their executive duties, must include the amount of the annual fixed remuneration, the different parameters to set the variable components and the main terms and conditions of their contracts including, in particular, duration, severance payments or compensations for the termination of the employment relationship, and exclusivity, post-contractual non-competition, and retention or loyalty agreements. The Board then determines, pursuant to Articles 26.2 and 26.3 of the Board Regulations, how much of the shareholder-approved aggregate compensation amount will be allocated to each director as compensation, taking into account the prior report of our appointments and remuneration committee (Comisión de Nombramientos y Retribuciones, or the “Appointments and Remuneration Committee”), in each case pursuant to the framework of the Articles of Association, the remuneration policy and the relevant agreements, as applicable.

The General Shareholders’ Meeting approved our current director remuneration policy on June 10, 2022 (the “Remuneration Policy”). Spanish Law 5/2021, of April 12, 2021, which amended the Spanish Companies Act and other financial regulations with respect to the promotion of long-term involvement of shareholders in listed companies, introduced changes in the minimum content of the remuneration policies of Spanish listed companies. Our current Remuneration Policy incorporated the changes introduced by such law. The main amendment in relation to our previous remuneration policy, which had been in force since October 9, 2020, was the inclusion of a new metric related to the achievement of environmental, social and corporate governance (ESG) objectives when determining the variable remuneration for directors performing executive duties. The Remuneration Policy was in force and applicable during 2022 and will remain in force for the fiscal years 2023 and 2024, unless the General Shareholders’ Meeting expressly modifies it.

Our director compensation philosophy, as set forth in Article 27 of the Board Regulations, provides that the remuneration of non-executive directors (consejeros no ejecutivos) shall be established in a manner that provides incentives for our directors to be dedicated and involved while not creating an obstacle to their independence. To that end, Article 27 further establishes that the Board, following the advice of the Appointments and Remuneration Committee, shall take the necessary measures to ensure that non-executive directors’ remuneration adheres to the following guidelines: (a) their remuneration should be relative to their dedication, qualification and responsibility; and (b) they are excluded from any plans (x) consisting of the delivery of equity awards or options or other instruments linked to the value of our shares, (y) linked to our performance or (z) including retirement benefits. However, non-executive directors may be remunerated with our shares only if they agree to hold them for the duration of the term that they hold their office.

In accordance with the compensation system outlined in the Articles of Association and the Remuneration Policy, the shareholders set the maximum annual amount available for compensation to the non-executive directors at €100,000 per director, other than those non-executive directors of the Board that render remunerated professional services to us. Also, any director that is a member of one of the Board committees (Audit Committee, Appointments and Remuneration Committee and Sustainability Committee) shall receive an additional gross annual remuneration of €25,000 as a result of the heavier workload (thus, the total remuneration would amount to €125,000). Similarly, the chairpersons of each Committee would receive an additional €25,000 for performing their duties as chairperson (thus, the total remuneration would amount to €150,000). The lead independent director would receive an additional remuneration amounting to €50,000 for performing his/her duties (thus, the total remuneration would amount to €150,000). Under no circumstances may the remuneration of a non-executive director exceed €150,000 per year.

As of the date of this annual report, Ms. Enriqueta Felip Font, Mr. James Costos, Ms. Montserrat Muñoz Abellana, Ms. Susana González Rodríguez, Ms. Carina Szpilka Lázaro and Mr. Iñigo Sánchez-Asiaín Mardones are our independent directors in conformity with Exchange Act requirements and NASDAQ Listing Rules. Messrs. Dagá serves as external director (and not independent) and Mr. Víctor Grifols Roura serves as proprietary director (and not independent) in conformity with Spanish rules.

117

Table of Contents

The total compensation paid to directors in the year ended December 31, 2022, in the aggregate, amounted to €5.3 million. Of the total director compensation amount, our Co-Chief Executive Officers (consejeros delegados solidarios) received, in the aggregate, €2.1 million in cash in 2022 (€1.8 million in fixed compensation in cash and €290,885 in variable compensation in cash for their service as Co-Chief Executive Officers). Both of our Co-Chief Executive Officers have voluntarily waived 50% of their short-term variable remuneration for the achievement of objectives set for the fiscal year 2021, which would have been payable in March 2022. The reason for these waivers was that to achieve such objectives, organizational measures had to be implemented impacting personnel and business levels, and both considered their respective waivers as a contribution to the effort carried out by the Company. In addition, the amount of fixed remuneration received by each Co-Chief Executive Officer was not increased compared to the previous year.

In 2022, our Co-Chief Executive Officers, Mr. Raimon Grifols Roura and Mr. Víctor Grifols Deu, received restricted stock units (“RSUs”) allocated in fiscal year 2020, which had a vesting period of two years and one day. Hence, in 2022, each received Class B shares in the amount of €209,121.28. In 2022, each was awarded Class B shares with an equivalent value of approximately €217,845.76. Directors categorized as “other external” directors (other than those who render remunerated professional service to us) received €150,000 in aggregate in 2022. These figures include accruals for contingent or deferred compensation. None of our directors received attendance fees for meetings of the Board or committees of the Board. Finally, pursuant to Article 20.bis of the Articles of Association, our directors are reimbursed for all expenses incurred in connection with their service as directors.

For the year ended December 31, 2022, we paid €290,885 to both Co-Chief Executive Officers, in the aggregate, as variable compensation in cash. In March 2022, we paid to our Co-Chief Executive Officers their variable remuneration (taking into account their waiver of the aforementioned 50%) as follows: 50% of the amount in cash and 50% of such amount in Class B shares of the Company.

The remuneration of the Chairperson of the Board in the years ended December 31, 2022 and 2021 was a fixed annual amount of €965,000, as established under the Remuneration Policy. The compensation of Mr. Grifols Roura has been determined taking into account his proven experience as director and Chairperson of the Company, in addition to his knowledge in the sector where we operate. When deciding the remuneration of Mr. Grifols Roura, which is the same fixed amount he had when he held an executive position, excluding any variable amount, the additional duties that he will carry out, as well as those set out in the Spanish Companies’ Act, the Articles of Association and the Remuneration Policy for the position of Chairperson of the Board, were taken into account.

Mr. Steven F. Mayer, who served as the Executive Chairperson of the Board from September 30, 2022, until February 21, 2023, received the aggregate amount of €751,354. He received this amount from our U.S. subsidiary Grifols Shared Services North America, Inc. for the exercise of executive functions inherent to his position as Executive Chairperson of said subsidiary. He did not receive any remuneration from Grifols, S.A. for his position as Executive Chairperson of Grifols, S.A.

Compensation of Senior Management

In 2022, members of our senior management (excluding those who also served as members of the Board) were paid compensation amounting to €13,890,763, in the aggregate. This figure includes accruals for contingent or deferred compensation earned in respect of 2022 service. In 2021, members of our senior management (excluding those who also served as members of the Board) were paid compensation amounting to €15,135,947 in the aggregate. This figure includes accruals for contingent or deferred compensation earned in respect of 2021 service. The breakdown of the aggregate amount paid to such senior management for discharging their duties in the years ended December 31, 2022 and 2021 is set forth in the table below.


	Amount paid in the year
	ended December 31,
Component	2022	2021

	(in euros)
Salaries	8,489,991	11,074,903
Variable Compensation	5,400,772	4,061,044
Stock options or other securities	—	—
Other — e.g., life and health insurance	68,301	119,510
Other — e.g., pensions/savings	124,677	125,327

118

Table of Contents

Employment and Severance Arrangements

We have entered into employment contracts with all members of our senior management that entitle them to unilaterally rescind their employment contracts and receive termination benefits of two to five years’ salary in the event that we undergo a change of control. In addition to this, six members of our senior management are contractually entitled to termination benefits of one to four years’ salary under certain circumstances other than a change of control.

See Notes 28(c) and 30(a) to our annual consolidated financial statements included in this annual report for further details of the payments received by employees.

Equity and Other Incentive Programs

In 2022, no compensation was paid pursuant to a profit sharing plan or any stock option and no other equity compensation was awarded to any of our directors or senior management.

Pension and Retirement Compensation Programs

Our directors and senior management employed by our U.S. subsidiaries participate in a tax-qualified 401(k) plan on the same terms as our other employees. The aggregate amount of employer contributions to the 401(k) plans for our directors and senior management during 2022 was €76,612. In addition, the Company made contributions to the pension plan of one member of senior management who resides in Canada, in the amount of €48,065. In 2022, neither we nor our subsidiaries set aside or accrued any other amounts to provide pension, retirement or similar benefits for our directors or senior management.

Board Practices

Board of Directors

Pursuant to the Articles of Association, we are managed by a board of directors (the “Board”), which may be composed of not less than three and not more than 15 directors. Our current Board has 11 directors. Directors must be individuals. Under Spanish law, the Board is responsible for management, administration and representation in all matters concerning the business, subject to the provisions of the Articles of Association and the powers conferred at the general shareholders’ meeting.

Appointment and Dismissal

Pursuant to Spanish law and our Articles of Association, directors are elected by our shareholders to serve for a term of four years and may be reelected to serve for an unlimited number of terms, except in the case of independent directors, who pursuant to Spanish law and the regulations of our Board originally approved at the Board meeting held on April 5, 2006, as amended from time to time (the “Board Regulations”), shall not serve as such for more than 12 years. We do not provide for the reelection of directors at staggered intervals or cumulative voting for such directors or otherwise.

A director must be an individual. If a director ceases to hold office prior to the expiration of his or her term, the Board may fill the vacancy by appointing a new director to replace the outgoing director. Any director so appointed will hold office until the next general shareholders’ meeting when the appointment may be confirmed or revoked by our shareholders. If such appointment takes place between the time that a general shareholders’ meeting is called and the time the meeting takes place, then the director so appointed will hold office until the next general shareholders’ meeting, when this appointment is to be confirmed or revoked. Any such appointment will be only for the remainder of the term of the outgoing director, without prejudice to such director’s eventual election. A director may resign, or be removed, from office by a resolution of our general shareholders’ meeting at any time. A director who is also a shareholder may vote freely on any of our shareholders’ resolutions relating to the appointment and dismissal of directors (including the appointment or dismissal of that director).

119

Table of Contents

In addition, pursuant to the Board Regulations, a director must tender a resignation to the Board and the Board may accept such resignation, in its discretion, under the following circumstances: (i) when the director ceases to hold the executive position to which such director’s appointment to the Board was related; (ii) when circumstances arise that might harm the Company’s name or reputation, related or not to their actions within the Company; (iii) when the director becomes unable to hold the office due to a legal cause of ineligibility or incompatibility; (iv) when any criminal charges are brought against or a formal inquiry is opened against him or her by a regulator; (v) when the director has been severely admonished by our Audit Committee for having breached his or her duties as director; (vi) when the director’s participation on the Board may jeopardize our interests or when the reasons for his or her appointment cease to exist; and (vii) in the case of a proprietary director, when the relevant shareholder ceases to hold its stake in us, or reduces its stake below the level that reasonably justified the appointment of such director. When a director leaves his/her position, whether by resignation or resolution of the general shareholders’ meeting before his/her tenure expires, he/she shall explain, in sufficient detail, the reasons behind this decision or, in the case of non-executive directors, his/her opinion of the reasons for the general shareholders’ meeting resolution, in a letter that must be sent to the members of the board via the chairperson or the secretary.

In addition, under Spanish corporate law, a holder of voting shares (or group of shareholders of voting shares acting together) may, subject to availability of seats on the Board, appoint a number of directors proportionate to that shareholder’s (or group of shareholders’) interest in our voting capital. If the voting capital stock represented by the shares held by such shareholder (or group of shareholders) is equal to or greater than the result of dividing our total voting capital stock by the number of directors, such shareholder (or group of shareholders) shall have the right to appoint a proportionate number of directors. For example, a shareholder holding 20 voting shares out of a total of 100 voting shares in a company with five directors will be entitled to appoint one director. Should this power be exercised, shares so pooled shall not participate in the voting for the other members of the Board. However, they may exercise their voting rights with respect to the removal of existing directors. Since such rights apply only to voting shares or Class B shares that have recovered their voting rights, our Class B shares and the Class B ADSs that represent them in the United States do not count towards the proportional representation right.

The Board must appoint a Chairperson of the Board from among its members. Mr. Thomas Glanzmann is the current Executive Chairperson. The Board may also designate one or more Vice Chairperson, who shall be numbered consecutively, and who shall replace the Chairperson in the event of impossibility to act or absence. Mr. Raimon Grifols Roura is the current Vice Chairperson. The Board may appoint an Honorary Chairperson. The Honorary Chairperson shall have duties of honorary representation and will provide advice to the Board to the Chairperson and to the Vice Chairperson of the Board. Mr. Victor Grifols Roura is the current Honorary Chairperson.

The Board must also appoint a Secretary and may also designate one or more Vice-Secretaries. Neither the Secretary nor the Vice-Secretary is required to be a member of the Board; however, the Secretary or the Vice-Secretary will not be entitled to vote on matters before the Board unless he or she is a member of the Board. Mr. Tomás Dagá is the current Vice-Secretary of the Board and Ms. Nuria Martín Barnés is the current Secretary non-member of the Board.

Meetings of the Board

Pursuant to the Articles of Association, a meeting of the Board may be called by the Chairperson whenever he considers such a meeting necessary or suitable. The Chairperson is also required to call a meeting at the request of one-third of the directors. Meetings of the Board are called using any means of notice at least ten days before the date of the meeting, unless exigent circumstances require a shorter term. Such notice of a meeting of the Board must state the place, date and time as well as the issues to be discussed. The Board is required by Spanish law to hold a meeting at least every three months. Our Articles of Association provide that a majority of the directors (half plus one of the directors present at a meeting) of the Board (represented in person or by proxy by another director on the Board; non-executive directors may only appoint another non-executive director to represent them) constitutes a quorum. Except as otherwise provided by law or specified in the Articles of Association, resolutions of the Board must be passed by an absolute majority of the directors present or represented at a meeting, with the Chairperson having the right to cast a deciding vote in the event of a tie.

Pursuant to the Articles of Association the Board may hold meetings by videoconference, conference call or by any other distance communication systems as long as said communications take place in real time and therefore, in one sole act, and both the identity of the participating or voting individual and the security of the electronic communications, are properly guaranteed.

120

Table of Contents

Delegation of Powers

Pursuant to Spanish law and our Articles of Association, the Board may delegate its powers either to an executive committee (Comisión Ejecutiva) or to one or more chief executive officers. Spanish corporate law provides that resolutions appointing an executive committee, any chief executive officer or authorizing the permanent delegation of all, or part of, such board of directors’ powers, requires a two-thirds majority of the members of such board of directors and the registration of such resolution in the Spanish Commercial Registry (Registro Mercantil). The Board may also revoke such powers at any time. In addition, when a member of the Board is appointed chief executive officer or vested with executive functions, he/she will need to enter into an agreement with the Company, which shall be approved by a two-thirds majority of the Board. The director in question will have to refrain from participating in the deliberation and voting process of such agreement.

Under Spanish corporate law, a board of directors may also grant general or specific powers of attorney to any person whether or not that person is a director or a shareholder. General powers of attorney must be registered in the Commercial Registry. However, Spanish law provides that the following powers, among others, may not be delegated: (i) the formulation and submission for approval of the yearly financial statements at the general shareholders’ meeting; and (ii) those powers granted to the board of directors by a general shareholders’ meeting (unless otherwise provided in the relevant shareholders’ resolution).

Mr. Raimon Grifols Roura and Mr. Víctor Grifols Deu currently serve as joint and several Chief Executive Officers of the Company, with delegation of all powers legally delegable from the Board. Further, Mr. Thomas Glanzmann currently serves as Executive Chairperson of the Board, with delegation of all powers legally delegable from the Board.

Expiration of Current Terms

The periods during which our directors and senior management have served in their offices, as well as the date of expiration of each director’s term, are shown in the tables under “—A. Directors and Senior Management” above.

Termination Benefits

See Notes 28(c) and 30(a) to our audited consolidated financial statements included in this annual report on Form 20-F for further details of the payments received by employees.

Diversity

On August 6, 2021, the U.S. Securities and Exchange Commission approved NASDAQ’s proposal to amend its listing standards to encourage greater board diversity and to require board diversity disclosures for NASDAQ-listed companies. Pursuant to the amended listing standards, Grifols, as a foreign private issuer, is required to have at least one diverse member of the Board by August 7, 2023 and two diverse members of the Board by August 6, 2025, or explain the reasons for not meeting this objective. Furthermore, a Board diversity matrix is required to be included in the Annual Report on Form 20-F, containing certain demographic and other information regarding members of the Board.

Grifols currently complies with the diversity requirement, as we currently have four female members on our Board of Directors. The Board diversity matrix is set out below.

121

Table of Contents

Board Diversity Matrix (status as of December 31, 2022)


Country of Principal Executive Offices	Spain
Foreign Private Issuer	Yes
Disclosure Prohibited under Home Country Law	Yes⁽¹⁾
Total Number of Directors	11
	Female	Male	Non-Binary	Did not Disclose Gender
Part I: Gender Identity
Directors	4	7	n.a.	n.a.
Part II: Demographic Background
Underrepresented Individual in Home Country Jurisdiction	n.a.
LGBTQ+	n.a.
Did Not Disclose Demographic Background	n.a.

(1)

In accordance with Article 9.1 of the EU General Data Protection Regulation (GDPR) (Regulation (EU) 2016/679 of 27 April 2016), the categories of data contained in Part I and Part II of the above table are considered “special categories of personal data” (which includes, among others, personal data revealing racial or ethnic origin, or a natural person’s sex life or sexual orientation). The same article prohibits the processing of these special categories of personal data, unless any of the derogations regulated in Article 9.2 of GDPR apply.

One of the derogations to this prohibition is contained in Article 9.2.a) of GDPR, which provides that the data subject has given explicit consent to the processing of those personal data for one or more specified purposes, except where Union or Member State law provide that this prohibition may not be lifted by the data subject. Precisely on this point, Article 9.1 of the Spanish Organic Act 3/2018 (Spanish Data Protection Act) provides that, in order to avoid discriminatory situations, the sole consent of natural persons is not enough to lift the general prohibition of processing said special categories of personal data in Spain. Given this general prohibition in Spain, we consider that the lawful manner by which Grifols could process such categories of personal data from its Directors would either be based: (a) on the existence of a EU or EU Member State legal instrument with the status of law applicable to Grifols that enables said processing for reasons of substantial public interest (based on the derogation contained in Article 9.2.g) of GDPR, jointly with Article 9.2 of the Spanish Data Protection Act), or; (b) on special categories of personal data which are manifestly made public by the corresponding Director (based on the derogation contained in Article 9.2.e) of GDPR).

In conclusion, Grifols cannot collect nor share such personal data because (i) there is no legal instrument with the status of law applicable to Grifols that enables such processing and, further, and (ii) Grifols would not be in a position to ascertain whether or not the corresponding Director has manifestly made public such sensitive personal data.

The Policy on Director Diversity in the composition of the Board of Directors was initially approved by the Board of Directors of Grifols on February 22, 2019 and amended on December 11, 2020, with the aim of formalizing the procedures and guidelines followed during the selection process of candidates to form part of the Board of Directors of Grifols to favor an appropriate composition of the same.

In accordance with the recommendations set out in the Code of Good Governance of Listed Companies (Código de Buen Gobierno de las Sociedades Cotizadas) published by the CNMV, the policy has always had two aims:

to guarantee that any proposal for the appointment or re-election of members of the Board of Directors be based on a prior analysis of the required skills by the Board of Directors; and

to support knowledge, experience, age and gender diversity.

122

Table of Contents

The Board of Directors of Grifols must ensure that the selection process promotes balance and diversity in age, gender, experience and knowledge, as well as that it be free from any bias that may infer any kind of discrimination, in particular, on grounds of gender, disability or any other personal condition. In this respect, any discriminatory circumstance by reason of gender obstructing or hindering the appointment of a female candidate to the Board of Directors must be avoided. The policy provides that efforts must be made to ensure that the Board of Directors has a diverse and balanced composition as a whole, so that its composition enriches the analysis and debate and contributes plural points of view and positions in matters within its competence. In this respect, Grifols must continue to promote measures that encourage Grifols to have a significant number of women in senior management roles.

Committees of the Board

The Board has an Audit Committee, an Appointments and Remuneration Committee and a Sustainability Committee. The following is a brief description of such committees.

Audit Committee

The Board established an Audit Committee in compliance with Articles 24.bis and 24.ter of the Articles of Association and Article 14 of the Board Regulations.

The regulations applicable to the Audit Committee are set forth in the provisions referred to above, as well as the bylaws of the Audit Committee, which were approved by the Board and the Audit Committee on December 9, 2008, and modified in February 2023 in order to adapt its content to the current recommendations of the Good Governance Code of Listed Companies. In connection with the Talecris Biotherapeutics acquisition, at a Board meeting held on May 24, 2011, the Articles of Association and Board Regulations were amended to conform to NASDAQ Listing Rules and to facilitate the listing of our Class B ADSs on NASDAQ. Furthermore, the bylaws of the Audit Committee were modified at a Committee meeting held on March 31, 2015, to adapt them to the requirements imposed by Law 31/2014. In 2017, article 24.ter of the Articles of Association and Article 14 of the Board Regulations concerning the composition and functions of the Audit Committee were amended in order to adequate their content to the latest amendments of the Spanish Companies Act introduced by the currently in force Spanish Audit Act.

Pursuant to our Spanish corporate governance requirements and our Articles of Association and the Board Regulations, the Audit Committee consists of a minimum of three directors and a maximum of five directors who are appointed by the Board based on such directors’ knowledge, competence and experience in accounting, audit and risk management matters (both financial and non-financial). All of the members of the Audit Committee must be non-executive directors, and the majority must be independent directors. As a group, the members of the Committee must have the pertinent technical knowledge in relation to the sector of activity of the Company. In addition, all members of the Audit Committee, including the chairperson, must meet the independence, experience and other requirements set forth in the Exchange Act and NASDAQ Listing Rules.

The responsibilities of the Audit Committee include:

●

reporting to the shareholders at general shareholders’ meetings regarding matters for which the Audit Committee is responsible;

●

recommending to the Board the selection, appointment, re-election, hiring and replacement of the external auditor regardless of the faculties vested in the general shareholders’ meeting and the Board with regard to the approval of such resolutions under Spanish law;

●

oversight of our internal audit department, including selecting, appointing and dismissing its manager, monitoring its budget, receiving periodic information on the department’s activities and ensuring that management takes the conclusions and recommendations of the department’s reports into account;

●

setting up and supervising procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls or auditing matters, as well as the confidential and anonymous submission by employees and other persons related to Grifols of concerns regarding questionable accounting or auditing matters;

123

Table of Contents

●

exercising oversight of the process for gathering financial and non-financial information and the related internal control system; reviewing the financial statements and the periodic financial statements that should be submitted to the securities regulatory authorities and ensuring that the appropriate accounting standards are followed; reporting to the Board on any change in the accounting standards and on balance sheet and off balance sheet risks;

●

supervising and evaluating the efficiency of our internal control, internal audit and risk control and management systems, financial and non-financial, including any operative, technological, cybersecurity, legal, social, environmental, political, reputational or corruption related risks;

●

receiving information from the auditors including relating to auditor independence and conduct of audits of the financial statements, and issuing on an annual basis a written opinion on the independence of the auditor;

●

ensuring that the external auditor holds an annual meeting with the full Board of Directors to report on the work carried out and on the evolution of our accounting and risk situation;

●

ensuring that the remuneration paid to the external auditor for its work does not compromise its quality nor its independence;

●

reporting on the related-party transactions to be approved by the general meeting or the board of directors and supervise the internal procedure for those whose approval has been delegated;

●

supervising any transactions entered into with significant shareholders as set forth in the Board Regulations; and

●

(i) ensuring compliance with the Internal Code of Conduct of Grifols in Matters Relating to the Stock Market, or Stock Market Code of Conduct, the Code of Conduct for Grifols’ Employees, the Board Regulations (each available on our website, at www.grifols.com) and, in general, any other corporate regulations and (ii) making any necessary proposals to improve such regulations.

The Audit Committee currently consists of Mr. Iñigo Sánchez-Asiaín Mardones, Ms. Montserrat Muñoz Abellana and Ms. Carina Szpilka Lázaro. Each of Mr. Sánchez-Asiaín, Ms. Muñoz and Ms. Szpilka is independent in conformity with Exchange Act requirements and NASDAQ Listing Rules, as well as in conformity with the Spanish Companies Act. Mr. Tomás Dagá Gelabert serves as Secretary non-member of the Audit Committee.

On April 13, 2023, we received a deficiency letter from the Listing Qualifications Staff of NASDAQ. The notice was prompted by our inadvertent falling out of compliance with NASDAQ Listing Rule 5605(c)(2)(A), which requires that issuers have an audit committee of at least three members who each meet the criteria for independence set forth in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934. The letter does not affect our listing on NASDAQ or our operations.

We fell out of compliance due to the appointment of Mr. Tomás Dagá to our audit committee, on September 30, 2022. Although Mr. Dagá’s appointment was compliant with the audit committee composition requirements of our home Spanish regulator, it did not meet the independence requirements of NASDAQ Listing Rule 5605(c)(2)(A) and Rule 10A-3(b)(1) under the Securities Exchange Act of 1934 as Mr. Dagá is an external non-independent director.

As acknowledged by the deficiency letter, the appointment on April 13, 2023, of Ms. Montserrat Muñoz to the audit committee to replace Mr. Dagá cured this deficiency and brought us back to compliance.

Appointments and Remuneration Committee

The Board established an Appointments and Remuneration Committee in compliance with Article 24.bis and 24. quater of the Articles of Association and Article 15 of the Board Regulations.

124

Table of Contents

Pursuant to Spanish corporate governance requirements and Article 15 of the Board Regulations, the Appointments and Remuneration Committee is required to consist of between three and five members, all of which must be non-executive directors, which includes at least two independent directors.

The responsibilities of the Appointments and Remuneration Committee include:

assisting in the nomination of directors, including evaluating potential nominees in light of the level of knowledge, competence and experience necessary to serve on the Board;

establishing a representation target for the gender that is least represented on the Board and prepare guidelines to achieve said target;

reporting and making proposals to the Board on the appointment of members to the various committees of the Board and on the persons who should hold the office of Secretary and Vice-Secretary of the Board;

examining and organizing the orderly and planned succession of the Chairperson of the Board and the Chief Executive Officer;

reporting on proposals for the appointment and removal of any members of senior management made by the Chief Executive Officer;

making proposals on the remuneration plans for the Board and senior management;

periodically reviewing the remuneration plans of senior management, including considering their suitability and performance;

reporting on transactions in which directors may have a conflict of interest and ensuring that potential conflicts of interest do not impair the independence of any external advice provided to the committee; and

periodically reviewing the remuneration policy applied to directors and senior management and ensuring that their individual remuneration is proportionate to that paid to other directors and senior management.

Consistent with NASDAQ Listing Rules for foreign private issuers, our Appointments and Remuneration Committee currently consists of Ms. Carina Szpilka Lázaro, Mr. Tomás Dagá Gelabert and Ms. Susana González Rodríguez as directors. Each of Ms. Szpilka and Ms. González is independent, in conformity with Exchange Act requirements and NASDAQ Listing Rules and Mr. Dagá is considered an “Other External” director under the Spanish Companies Act. Ms. Nuria Martín Barnés serves as Secretary non-member of the Appointments and Remuneration Committee.

Sustainability Committee

In its meeting held on December 11, 2020, the Board resolved to amend certain articles of the Board Regulations, in order to adapt its content to certain recommendations of the reform of the Good Governance Code of Listed Companies published in June 2020 by the CNMV, and created a Sustainability Committee.

The regulations applicable to the Sustainability Committee are set forth in article 15 bis. of the Board Regulations, as well as in the Regulations of the Sustainability Committee, which were approved by the Board on February 19, 2021 and amended in February 2023. Pursuant to Article 15 bis of the Board Regulations and the Regulations of the Sustainability Committee, the Sustainability Committee is required to consist of between three and five members, all of which must be non-executive directors, the majority of them being independent.

The responsibilities of the Sustainability Committee include:

monitoring compliance with the Company’s internal codes of conduct and corporate governance rules, and ensuring that the corporate culture is aligned with its purpose and values;

125

Table of Contents

monitoring the implementation of the general policy regarding the disclosure of economic-financial, non-financial and corporate information, as well as communication with shareholders and investors, proxy advisors and other stakeholders. Similarly, the way in which the Company communicates and relates with small and medium-sized shareholders should be monitored;

periodically evaluating the effectiveness of the Company’s corporate governance system and environmental, climate change and social policy to confirm that it is fulfilling its mission to promote the corporate interest and catering, as appropriate, to the legitimate interests of remaining stakeholders;

ensuring the Company’s environmental, climate change and social practices are in accordance with the established strategy and policy; and

monitoring and evaluating the Company’s interaction with its stakeholder groups.

The Sustainability Committee currently consists of Mr. James Costos, Ms. Montserrat Muñoz Abellana and Ms. Enriqueta Felip Font. Each of the members is independent, in conformity with Exchange Act requirements and NASDAQ Listing Rules. Ms. Nuria Martín Barnés serves as Secretary non-member of the Sustainability Committee.

Employees

The table below indicates the number of employees by department as of December 31, 2022, 2021 and 2020:


	As of December 31,
Department	2022	2021	2020
Manufacturing	21,235	18,735	19,049
Research & development — technical area	1,271	1,088	1,115
Administration and others	1,870	1,609	1,661
General management	302	313	301
Marketing	167	203	219
Sales and distribution	1,469	1,285	1,310
Total	26,314	23,233	23,655

The table below indicates the number of employees by geographic region as of December 31, 2022, 2021 and 2020:


	As of December 31,
Geographic Region	2022	2021	2020
Spain	4,224	4,163	4,292
North America	16,862	16,393	16,756
Rest of the World	5,228	2,677	2,607
Total	26,314	23,233	23,655

We actively train our employees. The Grifols Academy opened in Spain during the second quarter of 2011. It is a meeting point for advanced training on all processes related to the preparation and production of plasma-derived medicines. In addition, the Grifols Academy serves to actively spread and strengthen the “Grifols’ spirit” that guides employee actions and their understanding of the business. It also acts as a center of technical, scientific and management training for the Group’s personnel, fostering a continued exchange among experts and external bodies, such as professional healthcare associations, hospitals, schools and universities.

The Grifols Academy works closely with the Grifols Academy of Plasmapheresis, which opened in Phoenix, Arizona in 2009. The Grifols Academy of Plasmapheresis has two U.S. campuses, Glendale, Arizona and Indianapolis, Indiana.

Our Spanish employees are mainly represented by three labor unions, the Workers’ Commissions (Comisiones Obreras - CCOO), the Workers General Union (Unión General de Trabajadores - UGT) and the General Labor Confederation (Confederación General del Trabajo - CGT). The employees of some of our subsidiaries in Spain, Germany, Italy, France, Argentina and Brazil are

126

Table of Contents

covered by collective bargaining agreements. The remainder of our employees are not represented by labor unions. We have not experienced any significant work stoppages in the last 15 years. We generally consider our employee relations to be good.

We subscribe to an insurance policy that covers death or permanent disability of employees caused by work accidents. All of our employees are covered under this policy. We implemented a defined contribution pension plan for all our Spanish entities beginning on January 1, 2002, which excludes top management and which requires us to make matching payments to these employees. Our contribution to this pension plan was €1.0 million in the year ended December 31, 2022, compared to €0.9 million and €0.9 million in the years ended December 31, 2021 and 2020, respectively. We also sponsor a savings plan for the benefit of U.S. employees, which qualifies as a defined contribution plan under Section 401(a) of the Internal Revenue Code of 1986, as amended. We make fully vested matching contributions to the savings plan, which totaled €34.1 million in 2022, compared to €31.8 million and €32.2 million for the years ended December 31, 2021 and 2020, respectively. For certain employees in Germany, we have a defined benefit pension plan, as required by statutory law. The pension cost relating to this plan is not material.

Share Ownership

For information on the direct, indirect and represented holdings of our current directors and executive officers with respect to our Class A shares as of December 31, 2022 see Item 7 of this Part I, “Major Shareholders and Related Party Transactions—A. Major Shareholders.”

We do not have any agreements, plans or arrangements in effect that provide for the issue or grant of options or shares or securities.

F.Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation.

Not Applicable.

Item 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Major Shareholders

The following table sets forth certain information, including information regarding beneficial ownership of our Class A (voting) shares as of the date of this annual report, for (i) our major shareholders, including, in accordance with applicable Spanish regulations, each person or entity that is known to us to be the beneficial owner of more than 3% of our Class A shares or 1% of our Class A shares in the event of a person or entity domiciled in a tax haven, (ii) each of our directors and (iii) each member of our senior management.

Since our Class A shares are represented through book entries, their exact ownership structure cannot be known, except through the information that the shareholders provide voluntarily or in compliance with applicable regulations, and information provided by the Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A., or Iberclear, on which the shares are settled and cleared, and its participant entities (entidades participantes).

127

Table of Contents

Beneficial ownership is determined in accordance with applicable Spanish regulations.


	Number of	Percentage of
	Voting	Voting
Name of Beneficial Owner	Shares	rights
Major Shareholders
Deria S.A.⁽¹⁾	39,183,692	9.195	%
Scranton Enterprises B.V.⁽²⁾	35,812,622	8.404	%
Ponder Trade, S.L.	30,209,093	7.089	%
Ralledor Holding Spain S.L. ⁽³⁾	26,224,374	6.154	%
Capital Research and Management Company	24,115,813	5.659	%
Blackrock, Inc.⁽⁴⁾	17,650,464	4.142	%
Europacific Growth Fund	12,924,438	3.033	%

Directors
Víctor Grifols Roura ⁽⁵⁾	787,376	*
Thomas H. Glanzmann ⁽⁶⁾	169,322	*
Tomás Dagá Gelabert ⁽⁷⁾	152,576	*
Víctor Grifols Deu	14,620	*
Raimon Grifols Roura	5,280	*
Carina Szpilka Lázaro	1,490	*

Senior Management
Vicente Blanquer Torre	44,754	*
David Ian Bell	20,000	*
Victor Grifols Deu	14,620	*
Alberto Grifols Roura	27,000	*
Maria Teresa Rioné Llano	5,289	*
Albert Grifols Coma-Cros	66,000	*
Francisco Javier Guix Huguet	1,367	*
Jordi Balsells Valls	806	*
Montserrat Gaja Llamas	682	*

*	Less than 1%.

(1)	The various members of the Grifols Roura family hold their respective shares indirectly through Deria S.A.

(2)	Scranton Enterprises B.V. is a corporation whose shares are owned by certain of our directors. Some members of the Grifols Family who are directors or executive officers hold part of their shares indirectly through Scranton Enterprises B.V.

(3)

On February 21, 2022, Ms. Nuria Roura Carreras informed the shareholders of Ralledor Holding Spain S.L., that due to her advanced age, she no longer holds the indirect voting rights of Grifols, S.A. and, therefore, from that date forward the voting rights of Grifols, S.A. have been held directly by Ralledor Holding Spain S.L.

(4)	Of the total number of 17,650,464 voting rights, 13,158,368 voting rights are held indirectly by Blackrock Inc. through rights over Class A shares and 4,492,096 voting rights through financial instruments.

(5)	Of the total number of 787,376 voting shares attributed to Mr. Víctor Grifols Roura, 786,376 are held indirectly through Padolç, S.L.

(6)	24,000 Class A shares are held indirectly through Glanzmann Enterprises AG, and 106,000 Class A shares are held indirectly through Opulentia Holdings Ltd.

(7)	Of the total number of 152,576 voting shares attributed to Mr. Tomás Dagá Gelabert, 35,000 are held indirectly through Prismiberica, S.A.

To our knowledge, we are not controlled, directly or indirectly, by any other corporation, government or any other natural or legal person. We do not know of any arrangements which would result in a change in our control.

128

Table of Contents

Significant Changes in Ownership

Beginning on January 1, 2022 until the date of this filing, in accordance with Spanish reporting requirements, the following transfers of shares were reported to the CNMV:

Scranton Enterprises increased its stake from 8.133% to 8.404%.

Europacific Growth Fund increased its stake from 2.689% to 3.033%.

Blackrock, Inc. increased its stake from 3.532% to 4.142%.

Voting Rights

Each of our Class A shares is entitled to one vote, except that the voting rights of Class A shares held in treasury by us or by any of our direct subsidiaries are suspended. Class A shares held by our major shareholders, directors or senior management do not entitle such shareholders to different voting rights.

Holders of our Class B shares generally do not have voting rights, except with respect to certain extraordinary matters that require approval by a majority of our outstanding Class B shares. However, each of our Class B shares entitles its holder to receive a minimum annual preferred dividend out of the distributable profits at the end of each fiscal year the share is outstanding equal to €0.01 per Class B share. In any given fiscal year, we will pay a preferred dividend to the holders of our Class B shares before any dividend out of the distributable profits for such fiscal year is paid to the holders of our Class A shares.

See in Item 10 of this Part I, “Additional Information—B. Memorandum and Articles of Association—Shareholder Rights—Class B Shares—Separate Vote at General Shareholder Meetings on Extraordinary Matters” and “Additional Information — B. Memorandum and Articles of Association — Shareholder Rights” for further details regarding our Class A shares and Class B shares.

Related Party Transactions

Sale of Haema AG and Biotest US Corporation

In December 2018, we sold our 100% stake in Haema AG and Biotest US Corporation to Scranton Plasma B.V., one of our major shareholders and a related party, for a total of $538 million. Scranton Enterprises B.V. financed the purchase in part through a loan from Grifols Worldwide Operations Limited for an initial principal sum of the euro equivalent of $95 million, with an interest rate of EURIBOR plus 200 basis points. As of December 31, 2022, the euro equivalent of $95 million was outstanding on the loan.

We have the ability to repurchase the shares sold to Scranton Plasma B.V. at any time. Our Plasma Supply Agreement in place with Haema AG and Biotest US Corporation has been extended for a 30-year period and we continue to operate the companies’ plasma centers. See Item 5 of this Part I, “Operating and Financial Review and Prospects—A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Acquisitions—Acquisition and Sale of Haema AG and Biotest US Corporation” above.

Charitable Contributions

In 2022, we contributed to two charitable foundations, the Mr. Víctor Grifols i Lucas Foundation and the Probitas Private Foundation, which were formed by us, and certain of our current officers and directors serve as patrons of the Probitas Private Foundation.

129

Table of Contents

The Mr. Víctor Grifols i Lucas Foundation provides grants to further the study of bioethics. It was created in 1998 with the mission of promoting bioethics through dialogue between specialists in a range of areas. The Víctor Grifols i Lucas Foundation seeks to foster ethical attitudes in organizations, companies and individuals active in the field of human health, offering a discussion platform that provides a forum for the exchange of different perspectives. Mr. Víctor Grifols i Lucas is our former Chief Executive Officer and is the father of both Mr. Raimon Grifols Roura, our Co-Chief Executive Officer, and Mr. Víctor Grifols Roura, a proprietary director and Honorary Chairperson of the Board. We contributed €0.5 million, €0.4 million and €0.4 million to the Víctor Grifols i Lucas Foundation in the years ended December 31, 2022, 2021 and 2020, respectively.

The Probitas Private Foundation provides medical and sanitary assistance to international communities that lack medical and sanitary resources or that have an urgent and essential need for such services due to catastrophes. The Probitas Private Foundation was founded by us in 2008. Mr. Tomás Dagá Gelabert, one of our directors, was a patron of the Probitas Private Foundation until May 27, 2021. We contributed €3.4 million, €3.6 million and €9.9 million to the Probitas Private Foundation in the years ended 2022, 2021 and 2020, respectively. We contribute to the Probitas Private Foundation an amount equal to 0.7% of our profits before tax each year.

Loans

We have not extended any advances or loans to members of the Board or key management personnel nor have we assumed any guarantee commitments on their behalf. We also have not assumed any pension or life insurance obligations on behalf of former or current members of the Board or key management personnel.

Interests of Experts and Counsel

Not Applicable.

Item 8.FINANCIAL INFORMATION

Consolidated Statements and Other Financial Information

Financial Statements

See our audited consolidated financial statements and the related notes starting on page F-1 of this annual report on Form 20-F.

Legal Proceedings

We are involved in various legal proceedings in the ordinary course of our business. In the event of adverse outcomes of these proceedings, we believe that resulting liabilities will either be covered by insurance or not have a material adverse effect on our financial condition or results of operations.

OFAC Request for Interpretative Guidance

Pursuant to our acquisition of 100% of the equity interests in Biotest Holdings on April 25, 2022 and a subsequent voluntary tender offer to all remaining shareholders of Biotest AG, we acquired 96.2% of the voting rights and 69.72% of the share capital of Biotest AG. Among its ongoing activities, Biotest AG has entered into product-supply agreements with five different Iranian entities, whereby the Iranian entities send plasma collected in Iran to Biotest AG for processing. Biotest AG then uses the plasma to manufacture pharmaceutical products for the Iranian entities, including IG products, Albumin, Factor VIII and Factor IX. These product-supply agreements were entered into by Biotest AG prior to the acquisition. See Item 5 of this Part I, “Operating and Financial Review and Prospects—A. Operating Results—Factors Affecting our Financial Condition and Results of Operations—Acquisitions—Biotest AG Acquisition.”

130

Table of Contents

On February 21, 2023, Grifols filed a request with the Licensing Division of the U.S. Office of Foreign Assets Control (“OFAC”) for interpretative guidance or, in the alternative, for license authorization, under the Iranian Transactions and Sanctions Regulations (“ITSR”), which restrict commercial interaction with Iran and its governmental entities and provide for sanctions in the case of failure to comply. In its filing, Grifols asserts that the ITSR should not apply in this case, but that if OFAC determines otherwise, that OFAC should authorize the issuance of a license permitting Biotest AG’s current activity involving Iran on humanitarian grounds. We cannot assure you that OFAC will agree with our assertion that the ITSR should not apply or that it will issue the requested license. In such instance, we would have to terminate Biotest AG’s activities in Iran and may be subject to penalties. The termination of Biotest AG’s activities in Iran will not have a material adverse effect on our operations or financial condition.

Illinois Biometric Information Privacy Act Claim

The plaintiffs allege that we committed certain administrative violations of the Illinois Biometric Information Privacy Act (“BIPA”) in a class action. Such plaintiffs donated plasma at one of our Illinois-based plasma donation centers. As part of the FDA approved donation process, donors were required to scan at least one fingerprint to verify their identity. The Plaintiffs allege that we failed to comply with the BIPA’s requirements when collecting their fingerprint data. Specifically, they allege that we violated the BIPA by (a) failing to develop a publicly available data-retention policy and guidelines for permanently destroying biometric data, and (b) collecting, using, and storing their donors’ biometric data without obtaining informed written consent.

Although we denied all of the plaintiff’s allegations, we have settled this class action, without any admission or determination of liability or the strength of the parties’ claims and defenses, for the amount of $16,750,000. On March 9, 2023, the court preliminarily approved the settlement and set the date of determination for final approval on August 24, 2023.

Third Arbitration involving GDS and Ortho-Clinical Diagnostics against Siemens

In 2022, GDS and Ortho-Clinical Diagnostics (“Ortho”) initiated a third arbitration against Siemens alleging the failure to pay royalties under certain agency and license agreements. Siemens counterclaimed against GDS and Ortho alleging that those royalties were not owed, among other claims. The parties are currently contemplating a resolution to all disputes between them, including the possible execution of a settlement agreement, new license and supply agreements, along with a payment by Siemens to GDS and Ortho-Clinical Diagnostics in the amount of $43,300,000.

Unpaid Royalties Dispute

GDS, GWWO, Abbott Laboratories, or Abbott, and Novartis Vaccines and Diagnostics, Inc. are in dispute over unpaid royalties payable by Abbot to GDS and Ortho, under an HIV License and Option agreement dated August 16, 2019 (the “HIV License”). On September 12, 2019, GDS and Ortho filed a Notice of Arbitration in the U.S. District Court for the Northern District of Illinois. On October 3, 2019, Abbott terminated the HIV License and filed for declaratory relief seeking to invalidate the licensed patent. GDS filed motions to dismiss and to compel arbitration, but the Court continued all pending motions and referred the parties to a Magistrate for a mandatory settlement conference. On the February 5, 2020, the parties attended a mandatory settlement conference ordered by the District Judge, with the magistrate judge presiding. No satisfactory settlement was reached. On March 16, 2020, GDS and Ortho filed an answer and counterclaim to the litigation, while simultaneously pursuing arbitration for the pre-termination amount owed by Abbot. The arbitration hearing was on June 15-16, 2020, and the arbitrator awarded $4 million to GDS/Ortho. The court litigation is continuing. Abbot’s motion to dismiss was denied December 1, 2020. Fact discovery concluded on October 25, 2021. Expert Discovery was concluded on October 14, 2022, and the parties filed dispositive motions, including a motion for summary judgement by Abbott and an opposition filed by GDS. The Court has yet to rule on the motion for summary judgement filed by Abbott. GDS and Ortho contend that the patent is valid and they believe that Abbott will be unsuccessful in its Declaratory Relief action and Motion for Summary Judgment in attempting to invalidate the patent.

See Note 28(e) to our annual consolidated financial statements included in this annual report for additional information regarding the legal proceedings in which we are involved.

131

Table of Contents

Antitrust Approval of Biotest Pharmaceuticals Corporation Acquisition

In August 2018, the FTC issued a consent order which allowed the acquisition of 24 donor centers and required the divestiture of three centers to Kedrion. The consent order requires annual reports to be made to the FTC for a period of 10 years. We filed the first annual compliance report in March 2020, the second compliance report in March 2021, and the third compliance report in March 2022. There has been no further action by the FTC.

CFIUS Approval on certain transactions

In September 2019, as a consequence of the share exchange agreement we entered with Shanghai RAAS, Grifols and the Committee on Foreign Investments in the United States (“CFIUS”) entered into a National Security Agreement to ensure the protection of certain data obtained as required from donors of human source plasma collected in the United States and maintained in donor management systems (“DMS”), and pursuant to this agreement, we are obligated to make bi-annual compliance reports to CFIUS. The most recent report was filed and accepted in February 2023 and the next report is due to be filed in August 2023.

Dividend Policy

Class A Shares

Our dividend policy is to pay out approximately 40% of our net consolidated profits. However, the First Lien Credit Facilities and some other documents governing our financial indebtedness contain limitations on our ability to pay cash dividends in the ordinary course of business in accordance with our dividend policy depending on our debt levels and the availability of certain restricted payments baskets. For a further discussion of the terms of the First Lien Credit Facilities and our other financing arrangements, see Item 5 of this Part I, “Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Sources of Credit” In any event, as a result of our commitment to reduce our debt level, we do not expect to pursue any distribution of cash dividends until debt leverage is below 4.00:1.00.

The declaration and payment of dividends is reviewed annually by the Board based upon a review of our balance sheet and cash flow, the ratio of current assets to current liabilities, our expected capital and liquidity requirements, the provisions of our governing documents and the provisions in our financing arrangements governing cash dividends. The payment of future dividend will be determined by the Board, based upon the factors described above and other factors that it deems relevant at the time that declaration of a dividend is considered. There can be no assurance as to whether or in what amounts any future dividend might be paid.

In addition, the availability of the reserves for distribution is subject to limitations under Spanish law. The distributable reserves of us and our Spanish subsidiaries are limited by the amount of mandatory reserves, which include, for us and each of our Spanish subsidiaries, the legal reserves and the amount of capitalized research and developments pending to be amortized by us and each of our Spanish subsidiaries. This limitation on distributable reserves due to capitalized research and developments expenditure amounted, on a consolidated basis, to €23.9 million at December 31, 2022.

During 2022, no dividend was paid. As mentioned above, the Board has not proposed the distribution of dividends to shareholders at the upcoming annual general meeting of shareholders.

Class B Shares

Each Class B share entitles its holder to receive a minimum annual preferred dividend out of the distributable profits at the end of each fiscal year the share is outstanding equal to €0.01 per Class B share, if the aggregate preferred dividend does not exceed the distributable profits for that year and provided that the distribution of dividends has been approved by our shareholders. In any given fiscal year, we will pay a preferred dividend to the holders of the Class B shares before any dividend out of the distributable profits for such fiscal year is paid to the holders of Class A shares. The preferred dividend on all issued Class B shares will be paid by us within the nine months following the end of that fiscal year, in an amount not to exceed the distributable profits obtained during that fiscal year. During 2022, no dividend was paid.

132

Table of Contents

Significant Changes

See Item 5 of this Part I, “Operating and Financial Review and Prospects—A. Operating Results—Subsequent Events.”

Item 9.THE OFFER AND LISTING

Offer and Listing Details

Our Class A shares have been listed on the Spanish Stock Exchanges since we completed our initial public offering on May 17, 2006 and are quoted on the Spanish Automated Quotation System under the ticker symbol “GRF.”

Our Class B shares have been listed on the Spanish Stock Exchanges since June 2, 2011 and quoted on the Spanish Automated Quotation System under the ticker symbol “GRF.P.”

Our Class A ADSs are not listed on a national exchange and have traded on the Over the Counter Bulletin Board, an electronic stock listing service provided by NASDAQ, since July 2009.

Our Class B ADSs have been listed and traded on the NASDAQ Global Select Market under the symbol “GRFS” since June 2, 2011. Each Class B ADS represents one Class B share.

Plan of Distribution

Not Applicable

Market

Our Class A shares have been listed on the Spanish Stock Exchanges since May 17, 2006 and are quoted on the Spanish Automated Quotation System under the ticker symbol “GRF.” Our Class B shares were issued as part of the consideration for the Talecris acquisition and were listed on the Spanish Stock Exchanges on June 2, 2011 and quoted on the Spanish Automated Quotation System under the ticker symbol “GRF.P.”

Our Class B ADSs have been listed and traded on the NSADAQ Global Select Market under the symbol “GFRS” since June 2, 2011.

Spanish Securities Market

The Spanish Stock Exchanges consist of four stock exchanges located in Madrid, Barcelona, Bilbao and Valencia. The majority of the transactions conducted on them are done through the Spanish Automated Quotation System. During 2022, the Spanish Automated Quotation System accounted for the majority of the total trading volume of equity securities on the Spanish Stock Exchanges.

Spanish Automated Quotation System

The Spanish Automated Quotation System was introduced in 1989 and links the Spanish Stock Exchanges, providing those securities listed on it with a uniform continuous market that eliminates most of the differences among the Spanish Stock Exchanges.

133

Table of Contents

The principal feature of the system is the computerized matching of buy and sell orders at the time of entry of the order. Each order is executed as soon as a matching order is entered, but can be modified or canceled until executed. The activity of the market can be continuously monitored by investors and brokers. The Spanish Automated Quotation System is operated and regulated by the Sociedad de Bolsas, a corporation owned by the companies that manage the Spanish Stock Exchanges. All trades on the Spanish Automated Quotation System must be placed through a bank, brokerage firm, an official stock broker or a dealer firm member of a local exchange directly.

There is a pre-opening session held from 8:30 a.m. to 9:00 a.m. local time each trading day, during which orders are placed. The computerized trading hours are from 9:00 a.m. to 5:30 p.m. Each session ends with a five-minute auction, between 5:30 and 5:35 p.m., with a random closedown of 30 seconds. The price resulting from each auction is the closing price of the session.

On March 29, 2021, new rules came into effect regarding the functioning of the Spanish Automated Quotation System, which, among other things, regulates the maximum price fluctuations in the price of stocks. Under the new rules, each stock in the continuous market is assigned a static and a dynamic range within which the price can fluctuate. The price of a stock may rise or fall by its static range (which is public and calculated according to the stock’s average historic price volatility) above or below its opening price (which is the closing price of the previous session). When the stock trades outside of this range, the trading of the stock is suspended for five minutes, during which an auction takes place. After this auction, the price of the stock can once again rise or fall by its static range above or below its last auction price (which will be considered as the new static price before triggering another auction). Furthermore, the price of a stock cannot rise or fall by more than its dynamic price range (which is public and calculated according to the stock’s average intra-day volatility), from the last price at which it has traded. If the price variation exceeds the stock’s dynamic range, a five-minute auction is triggered.

Moreover, there is a block market (el mercado de bloques) allowing for block trades between buyers and sellers from 9:00 a.m. to 5:30 p.m. during the trading session. Under certain conditions, this market allows cross-transactions of trades at prices different from prevailing market prices. Trading in the block market is subject to certain limits with regard to price deviations and volumes.

Between 5:40 p.m. and 8:00 p.m., certain trades may occur benefiting from an exemption to the pre-trade transparency requirements.

Clearance and Settlement System

Until April 1, 2003, transactions carried out on the Spanish Stock Exchanges and the continuous market were cleared and settled through the Servicio de Compensación y Liquidación de Valores, S.A. Since April 1, 2003, the settlement and clearance of all trades on the Spanish Stock Exchanges, the Public Debt Market (Mercado de Deuda Pública), the AIAF Fixed Income Market (Mercado AIAF de Renta Fija) and the Market for Latin-American Stocks in Euros (Mercado de Valores Latinoamericanos en Euros) as well as any securities trading on other official regulated markets and multilateral trading systems that have appointed Iberclear for such purposes, have been made through Iberclear, which was formed as a result of a merger between the Servicio de Compensación y Liquidación de Valores, S.A and Central de Anotaciones del Mercado de Deuda Pública, which was managed by the Bank of Spain.

Book-entry System

Ownership of shares listed on any Spanish Stock Exchange is required to be represented by entries in a register maintained by Iberclear, and transfers or changes in ownership are effected by entries in such register. The securities register system is structured in two levels: the central registry managed by Iberclear, which keeps the securities balances of the participants, and a detailed registry managed by the participants where securities are listed by holder’s name.

Securities Market Legislation

The Spanish Securities Market Act (today known as Ley 6/2023, de 17 de marzo, de los Mercados de Valores y de los Servicios de Inversión), or Securities Market Act, which first came into effect in 1989, among other things:

established an independent regulatory authority, the CNMV, to supervise the securities markets;

134

Table of Contents

established a framework for the regulation of trading practices, tender offers and insider trading;

required stock exchange members to be corporate entities;

required companies listed on a Spanish Stock Exchange to file annual audited financial statements and to make public semi-annual financial information;

established a framework for integrating quotations on the Spanish Stock Exchanges by computer;

exempted the sale of securities from transfer and value added taxes;

deregulated brokerage commissions as of 1992; and

provided for transfer of shares by book-entry or by delivery of evidence of title. The Securities Market Act was amended by, among others, Law 37/1998, which implemented two European Union directives that innovated the Securities Market Act. The first was the recognition that both Spanish and other European Union member state companies authorized to provide investment services have full access to the official secondary securities markets, with full capacity to operate, thereby enabling the direct admission of banking entities into the stock exchange area. The second innovation was that the scope of the Securities Market Act was enlarged to include a list of financial instruments, such as financial exchange contracts, or installment financial contracts, which expanded the categories of securities included.

The Securities Market Act was further amended by Law 44/2002 (November 22, 2002) on reform measures of the financial system, which introduced certain modifications to the laws governing financial markets and corporations generally, including:

provisions requiring listed companies to establish an audit committee, redefining the reporting requirements for relevant events, establishing rules relating to the treatment of confidential and insider information and related party transactions, preventing manipulative and fraudulent practices with respect to market prices and otherwise regarding market transparency;

the establishment of Iberclear; and

the authorization of the Ministry of Economy and Finance (Ministerio de Economía y Hacienda) to regulate financial services electronic contracts.

On July 17, 2003, the Securities Market Act was amended by Law 26/2003 in order to reinforce the transparency of listed companies. It introduced:

information and transparency obligations including detailed requirements of the contents of the corporate website of listed companies and the obligation to file with the CNMV an annual corporate governance report; and

the obligation to implement a series of corporate governance rules including, among others, regulations regarding the boards of directors and the general shareholders’ meeting.

On March 11, 2005, Royal Decree Law 5/2005 was approved, modifying the Securities Market Act in order to implement Directive 2003/71/EC of the European Parliament and of the Council of the European Union, or Council, on the prospectus to be published when securities are offered to the public or admitted to trading. The Directive (i) harmonizes the requirements for the process of approval of prospectuses, which enables a prospectus to be valid throughout the European Union and (ii) incorporates the application of the country-of-origin principle later set forth in Spanish Royal Decree, or Royal Decree, 1362/2007.

135

Table of Contents

Law 12/2006, of May 16, 2006, amended the Securities Market Act by (i) introducing a new article relating to notifications to the CNMV of transactions that might constitute insider dealing or market manipulation, (ii) completing the regulation of Bolsas y Mercados Españoles, which operates the Spanish Stock Exchanges and financial markets and (iii) clarifying the regulation of significant participations in the entities that manage the clearing and settlement of securities and the Spanish secondary securities markets.

Law 6/2007, of April 12, 2007, amended the Securities Market Act to modify the rules for takeover bids and for issuer transparency. This Law came into effect on August 13, 2007, and partially integrates into the Spanish legal system Directive 2004/25/EC of the European Parliament and of the Council, of April 21, 2004, on takeover bids and Directive 2004/109/EC of the European Parliament and of the Council, of December 15, 2004, on the harmonization of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC. This Law was further developed by Royal Decree 1066/2007, of July 27, 2007, on rules applicable to takeover bids for securities; by Royal Decree 1362/2007, of October 19, 2007, on transparency requirements for issuers of listed securities; and by Royal Decree 1698/2012, of December 21, 2012, to implement Directive 2010/73/EC of the European Parliament and of the Council, of December 24, 2010 (amending Directive 2003/71/CE and Directive 2004/109/EC).

Law 6/2007 (i) introduced several changes to the periodic financial information (annual, biannual and quarterly) to be published by issuers of listed securities and (ii) introduced new developments to the system that establishes the duty to provide notice of significant stakes in an enterprise. These duties include notification requirements such as:

anyone with a right to acquire, transfer or exercise voting rights granted by the shares, regardless of the actual ownership of the shares, and anyone owning, acquiring or transferring other securities or financial instruments that grant a right to acquire shares with voting rights must provide notice of the holding of a significant stake in accordance with the regulations;

directors of listed companies, in addition to providing notice of any transaction concerning the shares or other securities or financial instruments of the issuer that are linked to these shares, must inform the CNMV of their stake upon appointment or resignation; and

listed companies must provide notice of transactions concerning their treasury shares in certain cases, which will be established in the developing regulations.

Law 12/2010, of June 30, 2010, amended the Securities Market Act to require listed companies to create electronic shareholders forums on their websites to facilitate communication prior to the holding of general meetings. It also established that shareholders of listed companies may create associations to exercise their rights and coordinate the defense of their common interests. Such associations must enroll in a special CNMV registry. Finally, Law 12/2010 also amended the Securities Market Act to change the regulations regarding the composition and functions of audit committees.

Royal Legislative Decree 1/2010, of July 2, 2010, approved the Spanish Companies Act in order to consolidate and clarify the laws applicable to public limited companies, limited share partnerships and limited liability companies.

Law 2/2011, of March 4, 2011, on Sustainable Economy (Ley de Economía Sostenible) amended the Securities Market Act’s provisions related to the requirements for annual reports on corporate governance and management reports. The Law also made certain corporate governance and shareholder disclosure recommendations in the Spanish Unified Good Governance Code for Listed Companies (Código Unificado de Buen Gobierno de las Sociedades Cotizadas, the “CNMV Governance Code), regarding the composition of boards of directors and its committees and the qualification of directors as executive, proprietary or independent mandatory. The CNMV Governance Code for Listed Companies was approved in 2015 and further revised in June 2020. It unified the recommendations and principles that are applicable to Spanish listed companies; removed some principles and recommendations of the CNMV Governance Code that were written into Spanish legislation and introduced some recommendations on the corporate social responsibility of listed companies.

Law 25/2011, of August 1, 2011, amended the Securities Market Act to implement Directive 2007/36/CE of the European Parliament and of the Council, regarding the exercise of certain rights of the shareholders of listed companies, to simplify and promote the right to information and shareholder voting rights.

136

Table of Contents

Law 1/2012, of June 22, 2012, amended the Spanish Companies Act by making corporate websites mandatory for listed companies and introducing other new requirements regarding the creation, amendment, transfer and removal of corporate websites, as well as the obligations of directors arising in connection with the contents of such websites.

Law 31/2014, of December 3, 2014, amended the Spanish Companies Act to improve the corporate governance practices, increase management efficiency and increase the transparency of companies listed on a Spanish Stock Exchange.

Royal Decree 878/2015, of October 2, 2015, on the clearing, settlement and recording of transferable securities represented in book-entry form, on the legal regime of the central securities depositaries and central counterparties, and on the transparency requirements for issuers of securities admitted to trading in a regulated, which was published in the Spanish Official Gazette on October 3, 2015, meets the need to develop the latest amendments introduced in the Securities Market Act in matters of book-entries and clearing and settlement of securities, in addition to the need to adapt our legal system to a number of EU Law provisions. The reform of our post-trading system seeks to improve its efficiency and stability, in addition to equating the securities clearing, settlement and recording activities to those of the European markets, thus helping to reduce operational costs and improve the competitiveness of our markets, entities and infrastructures and, consequently, of the financial sector. On April 27, 2016, the new post trading system of clearing and settlement of shares kicked off.

Regulation (EU) No. 596/2014, on market abuse, which was directly applicable in all European Union member states, came into force in 2016 with the aim to ensure that European Union regulation keeps pace with market developments in order to combat market abuse on financial markets as well as across commodity and related derivative markets.

Regulation (EU) No. 2017/1129, of June 14, 2017, which was directly applicable in all European Union member states, came into full force in 2019 to regulate the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC.

Royal Legislative Decree 19/2018, of November 23, 2018, on payment services and other urgent financial measures amends among others, the Securities Market Act in order to integrate into the Spanish legal system, and Regulation (EU) No. 596/2014, on market abuse. The main novelties introduced to the Securities Market Act are (i) the distinction between the concepts of inside information and relevant information, (ii) the removal of the obligation to have an internal code of conduct for securities markets and (iii) the reduction of the notification threshold of people with management responsibilities.

On December 28, 2018, the Spanish Commercial Code, the Companies Act and the Audit Act were amended by Law 11/2018 in order to reinforce the disclosure of non-financial and diversity information, among others, of listed companies. It introduced information and diversity obligations including (i) the obligation to prepare a non-financial information statement on environmental matters, social and employee-related matters, respect for human rights, anti-corruption and bribery matters and society matters and (ii) the obligation to ensure that the selection procedures for Company directors facilitate diversity in relation to age, disability and training as well as gender, experience and knowledge.

On June 26, 2020, the CNMV approved the partial review of the CNMV Governance Code. The review updated and adapted various recommendations of such code to various intervening legal amendments approved since its publication and clarified the scope of others that had raised certain doubts. The four key elements of the reform were: (i) promoting the presence of women in boards of directors; (ii) greater importance of non-financial information and sustainability; (iii) more attention to reputational risk and, in general, non-financial risks; and (iv) clarification of aspects related to the remuneration of the board members.

As a result of the amendment of the CNMV Governance Code referred to above, Circular 1/2020 of October 6, 2020, amended (i) Circular 5/2013 of June 12, 2020, by establishing a new template for the annual corporate governance report for listed public companies, savings banks and other entities that issue securities admitted for trading on official securities markets and (ii) Circular 4/2013 of June 12, 2020, by establishing a new template for the annual report on remuneration of directors of listed public companies and members of boards of directors and control committees of savings banks that issue securities admitted to trading on official securities markets.

137

Table of Contents

Law 5/2021, of April 12, 2021, among other regulations, amended the Spanish Companies Act, as well as the Spanish Securities Market Act. The purpose of this law is to transpose into Spanish Law Directive (EU) 2017/828 of the European Parliament and of the Council of 17 May 2017 amending Directive 2007/36/EC with respect to the encouragement of long-term shareholder engagement in listed companies.

As a result of the amendment of the Spanish Companies Act and the Spanish Securities Market Act referred to above, Circular 3/2021 of September 28, 2021, amended (i) Circular 4/2013 of June 12, 2020, by establishing a new template for the annual report on remuneration of directors of listed public companies and members of boards of directors and control committees of savings banks that issue securities admitted to trading on official securities markets and (ii) Circular 5/2013 of June 12, 2020, by establishing a new template for the annual corporate governance report for listed public companies, savings banks and other entities that issue securities admitted for trading on official securities markets.

On May 26, 2022, Circular 2/2022 of the CNMV was approved. This circular establishes the new forms to be used to report significant shareholding in entities whose securities are admitted to trading on a regulated market and to report any transaction that an issuer makes with its treasury shares and includes certain new provisions applicable to market makers.

Law 6/2023, of March 17, 2023, approved the Securities Market Act, repealing the former securities market act from 2015. The new Securities Market contains certain adjustments in relation to the 2015 legislation meant to improve its organization and eliminate a number of inconsistencies.

Selling Shareholders

Not Applicable.

Dilution

Not Applicable.

Expense of the Issue

Not Applicable.

Item 10.ADDITIONAL INFORMATION

Share Capital

Not Applicable.

Memorandum and Articles of Association

The following is a summary of the material terms of our Articles of Association and Board Regulations, as amended and currently in effect. This summary is not meant to be complete and is qualified in its entirety by reference to each of the Articles of Association and Board Regulations. Because this is a summary, it does not contain all the information that may be important to you. You should read the Articles of Association and Board Regulations carefully. The current Articles of Association are included as Exhibit 1.1 and Exhibit 1.2 (English translation) to this annual report on Form 20-F. The Articles of Association and the Board Regulations are also available on our website, which does not form part of this annual report on Form 20-F, at www.grifols.com under the headings “Investors—Corporate Governance—Articles of Association” and “Investors—Corporate Governance—Board of Directors, Regulations.”

The Articles of Association were originally approved and incorporated with the Commercial Registry on June 22, 1987. The Board Regulations were initially approved by the Board on April 5, 2006.

138

Table of Contents

At the general shareholders’ meeting held on May 29, 2015, the shareholders voted to amend our Articles of Association on matters pertaining to corporate governance in order to ensure compliance with the amended Spanish Companies Act. The shareholders renewed the delegation of authority to the Board to effect a two-to-one split of the Class A and Class B shares, within one year following the date of the meeting, by reducing the nominal value and increasing the number of such shares, without changing the total nominal value of the share capital. Finally, the shareholders provided the Board authorization for the derivative acquisition of treasury stock thereby revoking and leaving without effect the authorization granted to the Board during the shareholder meeting on extraordinary matters held on January 25, 2011.

At the general shareholders’ meeting held on May 27, 2016, the shareholders voted to delegate to the Board, with full power of substitution in any of its members, the authority to increase the Company’s share capital at once or in several times and at any given moment, within a maximum term of five (5) years as from the date of the May 27, 2016, general meeting, and in an amount that in no case may exceed half of the Company’s share capital at the time of this authorization. Pursuant to this authorization, the share capital increases will be carried out, if appropriate, by issuing and placing in circulation the new shares (whether of Class A and Class B, exclusively Class A or exclusively Class B), with or without share premium, with a consideration consisting in cash contributions. As long as there are non-voting Class B shares in circulation, the capital increases will observe, when applicable, the provisions of the Company’s Articles of Association as regards the pre-emptive right of acquisition that may correspond in said capital increases. Likewise, as long as Class B shares hold the redemption rights foreseen in paragraph 4 of article 6.bis of the Articles of Association, the nominal value of the Class B shares that may be issued in the execution of this delegation of authorities cannot exceed one fourth of the total amount of the share capital resulting from the capital increase resolution.

At the general shareholders’ meeting held on May 26, 2017, the shareholders voted to amend our Articles of Association concerning the composition and functions of the Audit Committee, in order to conform its content to the latest amendments of the Companies Act introduced by the Audit Act currently in force. The shareholders also voted to amend the regulation of the general shareholders’ meeting, concerning the competences of the general shareholders’ meeting, in order to adapt its content to the latest amendments of the Companies Act, introduced by Law 5/2015 of promotion of business financing (Ley 5/2005 de fomento de la financiación empresarial), on matters of issuance of bonds and other securities. The amendment consists of eliminating the issuance of numbered series of bonds or other securities, whether convertible or not, that may recognize or create a debt expressly as a competence of the general shareholders’ meeting. The shareholders also renewed the delegation of authority to apply for the listing of the Class A shares on NASDAQ, via Class A ADSs, within three years following the date of the meeting.

At the general shareholders’ meeting held on May 24, 2019, the shareholders voted to amend our Articles of Association and the regulations of the General Shareholders’ Meeting with respect to the valid casting of votes through distance voting systems of the General Shareholders’ Meeting in order to extend the deadline for receipt of votes until immediately before midnight on the day prior to the date that the General Shareholders’ Meeting is scheduled at its first call or second call.

At the general shareholders’ meeting held on October 9, 2020, the shareholders voted to amend our Articles of Association and the regulations of the General Shareholders’ Meeting with respect to the right to attend, proxy granting and representation at the General Shareholders’ Meeting, with the purpose of expressly establishing the possibility of attending the General Shareholders’ Meeting by remote, simultaneous and bidirectional connection via telematics means. The shareholders also renewed the delegation of authority to the Board for the derivative acquisition of treasury stock, thereby revoking and voiding the authorization granted to the Board during the General Shareholders’ Meeting held on May 29, 2015. Such authorization is granted for a maximum term of five years. Further, the shareholders renewed the delegation of authority to apply for the listing of the Class A shares on NASDAQ, via Class A ADSs, within three years following the date of the meeting.

At the general shareholders’ meeting held on May 21, 2021, the shareholders voted to renew the delegation of authority to the Board to increase the company’s share capital, thereby revoking and voiding the authorization granted to the Board during the General Shareholders’ Meeting held on May 27, 2016. Such authorization is granted for a maximum term of five years as from the date of the General Shareholders’ Meeting.

139

Table of Contents

At the general shareholders' meeting held on June 10, 2022, the shareholders voted to amend our Articles of Association and regulations of the General Shareholders' Meeting in order to conform their wording to the latest amendments of the Spanish corporate law rules and regulations, with amendments regarding (1) the right to attend, proxy granting and representation at the General Shareholders' Meeting and the casting of votes through distance voting systems; (2) the remuneration of the Board of Directors; (3) the Audit Committee and annual accounts; (4) the information rights available for shareholders prior to the holding of the General Meeting; and (5) the attendance by telematic means, distance voting and the minutes of the General Shareholders' Meeting.

The Board, with full power of substitution in any of its members, has the authority to set the terms and conditions of the capital increases and the characteristics of the shares in all aspects not foreseen by the general shareholders’ meeting, as well as to freely offer the new unsubscribed shares within the term(s) of exercise of the pre-emptive right of subscription; establish that, in the event of an incomplete subscription, the share capital will be increased only in the amount of the subscriptions effectively carried out; redraft the articles of the Articles of Association related to share capital and number of shares; exclude, pursuant to the provisions of article 506 of the Companies Act, the pre-emptive right in the terms and conditions set forth therein and up to a maximum of 20% of the Company’s share capital; apply for, when appropriate, the listing of the shares issued pursuant to this authorization, as well as to carry out all the necessary actions and procedures and to file the documents that might be required before the competent bodies of the above-mentioned stock exchange markets, for admission to listing of the new shares issued as a consequence of the agreed capital increase; it is expressly put on record that Grifols agrees to be bound by already existing and future rules related to the Stock Exchange matters and, specially, as regards contracting, permanence and exclusion from official listing; request the inclusion of the new shares in the accounting registries of the company Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A.U. (Iberclear).

The full text of the amendments to the Articles of Association detailed above is available on our website, which does not form part of this annual report on Form 20-F, at www.grifols.com under the heading “Investors—Corporate Governance.”

General

As of December 31, 2022, our share capital was €119,603,705 and comprised:

Class A shares: 426,129,798 ordinary shares with a par value of €0.25 each. All of the Class A shares belong to the same class and series.

Class B shares: 261,425,110 non-voting preference shares with a par value of €0.05 each. All of the Class B shares belong to the same class and series and have the preferential rights set forth in the Articles of Association.

All of our shares are fully paid and non-assessable. Both share classes are issued in book-entry form, governed by the Securities Market Act, as amended, and such other provisions as may be applicable. The book-entry registry is maintained by Iberclear and its participant entities.

Register

We are a public limited trading company registered with the Commercial Registry of Barcelona. Our fiscal identification number is A-58389123.

Our principal executive office is located at Avinguda de la Generalitat, 152 Parque Empresarial Can Sant Joan, 08174 Sant Cugat del Vallès, Barcelona, Spain. Our registered office is located at c/Jesús y María, 6, Barcelona (08022). We were incorporated on June 22, 1987. Our fiscal year runs from January 1 to December 31.

Corporate Purpose

Article 2 of the Articles of Association states that our corporate purpose is to provide administration, management and supervision services of companies and businesses as well as investments in personal and real estate assets.

140

Table of Contents

Board of Directors

Under Article 31 of the Board Regulations, a director shall abstain from attending or intervening in deliberations that affect matters in which he/she (or any person related to him/her) is personally involved, directly or indirectly. A director cannot carry out professional or commercial transactions with us, directly or indirectly, unless he/she previously informs the Board about the conflict of interest, and the Board, following a report from our Appointments and Remuneration Committee, approves the transaction.

Under Article 15 of the Board Regulations, the Appointments and Remuneration Committee will in all cases be fully composed of non-executive directors, two of which shall be independent directors, and the chairperson must be an independent director.

The Board, with the advice of the Appointments and Remuneration Committee, sets director compensation. As set forth in Article 20.bis of our Articles of Association the directors’ remuneration shall be approved by the General Shareholders’ Meeting and shall apply for a maximum of three fiscal years. New directors’ remuneration policies must be approved by the General Shareholders’ Meeting prior to the last year of applicability of the previous policy, and any new policies approved may apply from the date of approval up to the three following years if so determined by the General Shareholders’ Meeting. As set forth in Article 27 of the Board Regulations, non-executive directors should be excluded from receiving remuneration linked to our profits or welfare systems, other than shares in Grifols, that they must hold until their resignation as directors. Further, the establishment of equity compensation plans in which members of the Board participate must be authorized in the Articles of Association and requires the shareholders’ prior approval at a shareholders’ meeting. Additionally, the amount of non-executive directors’ remuneration should be calculated in order to incentivize dedication but not become an obstacle to independence.

For more information regarding related party transactions, see Item 7 of this Part I, “Major Shareholders and Related Party Transactions—B. Related Party Transactions.”

We do not impose an age limit requirement for the retirement or non-retirement of directors. We also do not impose a shareholding requirement for director qualification. Article 6 of the Board Regulations does provide, however, that a director cannot qualify as an independent external director if he or she has a significant shareholding in us.

For information regarding the provisions of the Articles of Association as applied to the Board, see Item 6 of this Part I, “Directors, Senior Management and Employees—A. Directors and Senior Management—Directors” and “Directors, Senior Management and Employees—C. Board Practices.”

Shareholder Rights

The following summary of material considerations concerning our share capital briefly describes certain material provisions of the Articles of Association and Spanish law relating to our share capital. Because it is a summary, it is not meant to be complete, is qualified by reference to the applicable Spanish laws and our Articles of Association and does not contain all the information that may be important to you.

Neither Spanish law nor our Articles of Association limit the right to own our securities, including the rights of non-resident or foreign shareholders to hold or exercise voting rights on the securities.

Under Spanish law, the rights of shareholders may be changed only by an amendment to the articles of association of a company that complies with the requirements explained below under “—Class A Shares—Shareholders’ Meetings and Voting Rights.” Our Articles of Association do not further specify what actions or quorums are required to change the rights of our shareholders, other than that they classify an amendment thereto as an extraordinary matter, as described below in “—Class B Shares—Separate Vote at General Shareholder Meetings on Extraordinary Matters.”

141

Table of Contents

Class A Shares

Shareholders’ Meetings and Voting Rights

Pursuant to Article 13 of our Articles of Association and the Spanish Companies Act, the annual general shareholders’ ordinary meeting shall be held during the first six months of each fiscal year on a date fixed by the Board. Resolutions presented at duly constituted general shareholders’ meetings are, except as indicated herein, passed by a simple majority vote of the voting capital present or represented at the meeting.

Extraordinary meetings may be called by the Board whenever it deems it appropriate or at the request of one or more shareholders representing at least 3% of our share capital. The requesting shareholders must state in their request the matters to be addressed at the meeting. Per Spanish Law and the Articles of Association, we are required to publish a “calling of the meeting”, which sets forth the matters to be voted on at each general shareholders’ meeting, at least one month prior to the date set for the meeting in at least: (i) the Official Gazette of the Commercial Registry (Boletín Oficial del Registro Mercantil) or one of the local newspapers of wide circulation in the province where we are domiciled (currently Barcelona, Spain); (ii) CNMV’s website; and (iii) our website.

Holders of ordinary and Class B shares duly registered in the book-entry records maintained by Iberclear and its participant entities at least five days prior to the day on which a shareholders’ meeting is scheduled, in the manner provided in the notice for such meeting, may attend such meeting (in person or represented by proxy) and, where so entitled, may vote. Holders of our Class B shares generally do not have voting rights, except with respect to certain extraordinary matters that require approval by a majority of our outstanding Class B shares, as set forth below in “—Class B Shares—Separate Vote at General Shareholder Meetings on Extraordinary Matters.”

For an ordinary or extraordinary general meeting of shareholders to be duly constituted on the first call, the presence in person or by proxy of shareholders representing 25% of our issued voting share capital is required to constitute a quorum and proceed. If a quorum is not obtained on the first call, a meeting is validly convened on the second call regardless of the share capital in attendance.

Under Spanish law, the following shareholder actions require approval by the affirmative vote of the holders of a majority of our Class A shares present in person or represented by proxy at a duly constituted meeting of holders of our Class A shares at which meeting, if (i) on first call, a quorum of at least 50% of the issued voting share capital is present or represented by proxy or (ii) on second call, a quorum of at least 25% of the issued voting share capital is present or represented by proxy (unless on such second call less than 50% of the issued voting share capital is present or represented by proxy, in which case those matters require the affirmative vote of at least two-thirds of the share capital present or represented at such meeting):

the issuance of bonds;

an increase or reduction of the share capital, or the suppression/limitation of pre-emptive rights in issuances of new shares;

the transformation of Grifols (change in corporate nature);

a merger, de-merger, split, spin-off or other structural change subject to Law 3/2009;

any other amendment of the Articles of Association; and

a dissolution.

142

Table of Contents

For purposes of determining the quorum, those shareholders who vote by mail or through the internet are counted as being present at the meeting, as provided by the regulations of the general shareholders’ meeting of Grifols, S.A (Reglamento de la Junta General de Accionistas). Such regulations are available on our website, which does not form part of this annual report on Form 20-F, at www.grifols.com under the heading “Investors—Corporate Governance—Shareholders’ General Meeting—Regulations of the General Shareholders’ Meeting.”

In general, resolutions passed at a general shareholders’ meeting are binding upon all shareholders. In very limited circumstances, Spanish law gives dissenting or absent shareholders, including those holding Class B shares, the right to have their Grifols’ shares redeemed by us at prices determined in accordance with established formulas or criteria.

Dividends

Payment of dividends must be proposed by the Board and authorized by our shareholders at a general shareholders’ meeting. Interim dividends may be declared by the Board on account of profits for the then current fiscal year, subject to certain limitations.

Spanish law requires each company to apply at least 10% of its net income each year to a legal reserve until the balance of such reserve is equivalent to at least 20% of such company’s issued share capital. A company’s legal reserve is not available for distribution to its shareholders except upon such company’s liquidation. According to Spanish law, dividends may only be paid out of profits (after deduction of any amounts required to be applied to the legal reserve) or distributable reserves and only if the value of a company’s net worth is not, and as a result of distribution would not be, less than such company’s share capital.

In addition, no profits may be distributed unless the amount of the distributable reserves is at least equal to the amount of research and development expenses recorded as an asset on a company’s consolidated balance sheet.

Spanish law also requires the creation of a non-distributable reserve equal to the amount of goodwill recorded as an asset on a company’s consolidated balance sheet and that an amount at least equal to 5% of such goodwill be transferred from the profit from each financial year to such non-distributable reserve until such time as the non-distributable reserve is of an amount at least equal to the goodwill recorded on such company’s consolidated balance sheet. If, in any given financial year, there are no or insufficient profits to transfer an amount equal to 5% of the goodwill recorded as an asset on a company’s consolidated financial statement, Spanish law requires that the shortfall be transferred from freely distributable reserves to the non-distributable legal reserve.

In the event of a reduction in share capital to offset losses, dividends may not be distributed until the legal reserve reaches 10% of the new share capital.

Distributions of dividends to our Class A shareholders will be made in proportion to the capital that they have paid up. The shareholders at the general shareholders’ meeting shall decide the amount, time and form of payment of the dividends. If these details are not so determined, the dividend will be payable at our registered office on the day following the date of the resolution.

The right to a dividend lapses and reverts to us if it is not claimed within five years after it becomes payable. Dividends payable by us to non-residents of Spain may be subject to a Spanish withholding tax of 19%, effective January 1, 2016. However, residents of certain countries are entitled to the benefits of the Convention Between the United States of America and the Kingdom of Spain for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, as described below in “—E. Taxation—Spanish Tax Considerations.”

As set forth below under “—Class B Shares—Preferred Dividend,” since the issuance of our Class B shares, the dividend rights of our Class A shareholders have been subordinated to the €0.01 per share preferred dividend of our Class B shares.

Liquidation Rights

Upon our winding-up and liquidation, holders of our Class A shares and Class B shares will be entitled to receive a pro rata portion of any assets remaining after the payment of our debts, taxes and the expenses of the liquidation as follows: (i) before any amount is distributed to the holders of Class A shares, the holders of Class B shares will receive the nominal value and share premium paid up for such Class B shares at the time of issuance and (ii) once such liquidation preference is received, the holders of the Class A shares and Class B shares will share pari passu in the amounts distributed.

143

Table of Contents

Subscription (or Preemptive) Rights and Increases of Share Capital

Pursuant to the Spanish Companies Act, shareholders and holders of convertible bonds have subscription (or preemptive) rights to subscribe for any new shares (or other securities convertible into, or exchangeable for, shares) issued by a company in a capital increase via monetary contributions.

In accordance with the Spanish Companies Act, such subscription (or preemptive) rights may be waived under special circumstances by a resolution passed at a meeting of shareholders or the Board (such as when we listed on the Spanish Stock Exchanges), and the general shareholders’ meeting delegates to the Board the right to increase the share capital or to issue securities convertible into, or exchangeable for, shares and to waive subscription (or preemptive) rights). See Item 3 of this Part I, “Key Information—D. Risk Factors—Risks Relating to Our Shares and American Depositary Shares—Subscription (or preemptive) rights may be unavailable to U.S. holders of our shares or ADSs.”

Further, subscription (or preemptive) rights, in any event, will not be available in the event of certain capital increases, such as those in which we receive an in-kind contribution, those effected to meet the requirements of a convertible bond issue or those for a merger in which shares are issued as consideration. Subscription (or preemptive) rights are transferable, may be traded on the Spanish Automated Quotation System and may be of value to existing shareholders because new shares may be offered for subscription at prices lower than prevailing market prices. In the case of a share capital increase against reserves, the same rule applies to the free allotment (derecho de asignación gratuita) rights.

Finally, as described below in “—Class B Shares—Subscription Rights,” in connection with an issuance of securities where subscription (or preemptive) rights apply, our Class B shares may only be granted preemptive rights with respect to additional Class B shares if our Class A shares are granted preemptive rights with respect to additional Class A shares. The preemptive rights of each class must be otherwise equal.

Registration and Transfers

Our Class A shares are in book-entry form on Iberclear and are indivisible. Joint holders of one share must designate a single person to exercise their shareholders’ rights, but they are jointly and severally liable to us for all the obligations flowing from their status as shareholders, such as the payment of any pending capital calls.

Iberclear maintains the central registry reflecting the number of shares held by each of its participant entities. Each participant entity, in turn, maintains a registry of the owners of such shares.

Transfers of shares quoted on the Spanish Stock Exchanges are normally made through credit entities or investment companies that are members of the Spanish Stock Exchanges.

Reporting Requirements

Pursuant to Royal Decree 1362/2007, any individual or legal entity that, by whatever means, acquires or transfers shares with voting rights in a company for which Spain is listed as the Country of Origin (Estado Miembro) (as defined therein) and which is listed on an official secondary securities market or other regulated market in the European Union must notify the issuer and the CNMV, if, as a result of such transaction, the proportion of voting rights held by that individual or legal entity reaches, exceeds or thereafter falls below a 3% threshold of that company’s total voting rights. The notification obligations are also triggered at thresholds of 5% and multiples thereof (excluding 55%, 65%, 85%, 95% and 100%). The applicable threshold is 1% (or its successive multiples thereof) for persons or entities located in designated “tax havens” (as defined in Royal Decree 1080/1991) or other jurisdictions lacking adequate supervision.

The individual or legal entity obliged to provide the notification must serve the notification by means of the form approved by the CNMV from time to time for such purpose, within four business days from the date on which the transaction is acknowledged. Royal Decree 1362/2007 deems that a transaction is “acknowledged” within two business days from the date on which such transaction is entered into.

144

Table of Contents

The reporting requirements apply not only to the purchase or transfer of voting shares, but also to those transactions in which, without a purchase or transfer, the proportion of voting rights of an individual or legal entity reaches, exceeds or thereafter falls below the threshold that triggers the obligation to report as a consequence of a change in the total number of voting rights of a company on the basis of the information reported to the CNMV and disclosed by such individual or legal entity.

Regardless of the actual ownership of the voting shares, any individual or legal entity with a right to acquire, transfer or exercise voting rights of the shares, and any individual or legal entity that owns, acquires or transfers, whether directly or indirectly, other securities or financial instruments that grant a right to acquire shares with voting rights, will also have an obligation to notify us and the CNMV of the holding of a significant stake in accordance with the regulations.

Furthermore, all members of the Board must report to both us and the CNMV the percentage and number of voting rights in Grifols held by them at the time of becoming or ceasing to be a member of the Board. All members of the Board must also report any change in the percentage of voting rights they hold, regardless of the amount, as a result of any acquisition or disposition of our shares or voting rights, or financial instruments that carry a right to acquire or dispose of shares that have voting rights attached, including any stock-based compensation that they may receive pursuant to any of our compensation plans.

In addition, pursuant to the Securities Market Act, any member of the Board and any parties closely related to any member of the Board must similarly report any acquisition or disposal of our shares (in this case, either Class A or Class B shares), derivatives or other financial instruments relating to our shares regardless of the size, including information on the percentage of voting rights which they hold as a result of the relevant transaction within five business days of such transaction. In this respect, Regulation (EU) No. 596/2014, on market abuse, introduces certain changes as regards notifications from directors. From a practical viewpoint, the transactions that may be notified are broadened, the notification period is reduced from 5 to 3 business days and the prohibition against directors and executives to trade during 30 calendar days before the publication of an interim or annual financial report (restricted periods or “blackouts”) is regulated. Royal Decree-Law 19/2018, which amends the Securities Market Act and implements Regulation (EU) No. 594/2014, on market abuse, establishes that persons discharging managerial responsibilities, as well as persons closely associated with them, must report to Grifols and the CNMV any acquisition or disposal of our shares (in this case, either Class A or Class B shares), derivatives or other financial instruments relating to our shares, once the sum of the amounts of all transactions made within a calendar year reaches the amount of €20,000.

Additional disclosure obligations apply in respect of voting agreements. In this respect, the Spanish Companies Act requires parties to disclose certain types of shareholders’ agreements that affect the exercise of voting rights at a general shareholders’ meeting or contain restrictions or conditions on the transferability of shares or bonds that are convertible or exchangeable into shares.

Moreover, persons holding a net aggregate short position in our shares must report the short position to the CNMV on a confidential basis whenever it reaches 0.2% and notify the CNMV of any subsequent decrease or increase by 0.1% (and successive multiples thereof) within the day immediately following the relevant trade. The CNMV publishes individual net short positions of 0.5% or more and aggregate information on net short positions between 0.2% and 0.5%.

The Articles of Association do not contain additional provisions governing the ownership threshold above which shareholder ownership must be disclosed.

Class B Shares

Our Class B shares have substantially similar dividend and other economic rights as our Class A shares, summarized above in “—Class A Shares,” but differ from the Class A shares in some important respects that are outlined below.

Voting Rights

Holders of our Class B shares generally do not have voting rights, except with respect to certain extraordinary matters, with respect to which approval by a majority of our outstanding Class B shares is required.

145

Table of Contents

Separate Vote at General Shareholder Meetings on Extraordinary Matters

Notwithstanding the lack of voting rights of our Class B shares generally, resolutions on the matters detailed below (each, an “extraordinary matter”) require the approval of a majority of our outstanding Class B shares.

Any resolution (i) authorizing us or any of our subsidiaries to repurchase or acquire any of our Class A shares, except for pro rata repurchases available equally to holders of our Class B shares on the same terms and at the same price as offered to holders of our Class A shares or (ii) approving the redemption of any of our shares and any share capital reductions (through repurchases, cancellation of shares or otherwise), other than (a) those redemptions required by law and (b) those redemptions which affect equally our Class A shares and Class B shares and in which each Class B share is treated the same as a Class A share in such transaction.

Any resolution approving the issuance, granting or sale (or authorizing the Board to issue, grant or sell) (i) any of our shares, (ii) any rights or other securities exercisable for or exchangeable or convertible into our shares or (iii) any options, warrants or other instruments giving the right to the holder thereof to purchase, convert, subscribe or otherwise receive any of our securities, except if (a) each Class B share is treated the same as a Class A share in the relevant issuance, grant or sale and, therefore, has a preferential subscription right (derecho de suscripción preferente) or a free allotment right in the relevant issuance, grant or sale to the same extent, if any, as a Class A share or (b) if the issuance is made in accordance with the subscription rights described in “— Subscription Rights” below.

Any resolution approving unconditionally or not (i) a transaction subject to Law 3/2009 (including, without limitation, a merger, split-off, cross-border redomiciliation or global assignment of assets and liabilities), except if in such transaction each Class B share is treated the same as a Class A share or (ii) our dissolution or winding-up, except where such resolution is required by law.

Any resolution for the delisting of any Grifols shares from any stock exchange.

Generally, any resolution and any amendment of the Articles of Association that directly or indirectly adversely affects the rights, preferences or privileges of our Class B shares (including any resolution that adversely affects our Class B shares relative to our Class A shares or that positively affects our Class A shares relative to our Class B shares, or that affects the provisions in the Articles of Association relating to our Class B shares).

The general shareholders’ meeting has the power to decide on all matters assigned to it by law or by the Articles of Association and, in particular, without limitation to the foregoing, shall be the only corporate body or office entitled to decide on these extraordinary matters.

Preferred Dividend

Each of our Class B shares entitles its holder to receive a minimum annual preferred dividend out of the distributable profits at the end of each fiscal year the share is outstanding equal to €0.01 per Class B share. In any given fiscal year, we will pay a preferred dividend to the holders of our Class B shares before any dividend out of the distributable profits for such fiscal year is paid to the holders of our Class A shares. The preferred dividend on all issued Class B shares will be paid by us within the nine months following the end of that fiscal year, in an amount not to exceed the distributable profits obtained by us during that fiscal year.

If, during a fiscal year, we have not obtained sufficient distributable profits to pay in full, out of those profits, the preferred dividend on all the Class B shares outstanding, the preferred dividend amount exceeding the distributable profits obtained by us will not be paid and will not be accumulated as a dividend payable in the future.

Lack of payment, total or partial, of the preferred dividend during a fiscal year due to insufficient distributable profits to pay in full the preferred dividend for that fiscal year will not cause our Class B shares to recover any voting rights.

As set forth above in “—Class A Shares—Dividends,” the dividend rights of our Class A shareholders are subordinated to the preferred dividend described in this section.

146

Table of Contents

Other Dividends

Each Class B share is entitled to receive, in addition to the preferred dividend referred to above, the same dividends and other distributions (in each case, whether in cash, securities of Grifols or any of our subsidiaries, or any other securities, assets or rights) as one Class A share. Each Class B share is treated as one Class A share for the purpose of any dividends or other distributions made on our Class A shares, including as to the timing of the declaration and payment of any such dividend or distribution.

Redemption Rights

Each holder of our Class B shares is entitled to redeem those shares as set forth in this section if a tender offer for all or part of our share capital is made and settled (in whole or in part), except if holders of our Class B shares were entitled to (i) participate in such offer and (ii) have their shares acquired in such offer equally and on the same terms as holders of our Class A shares (including, without limitation, for the same consideration).

Upon the closing and settlement (in whole or in part) of a tender offer for our shares in which holders of our Class B shares were not entitled to (i) participate and (ii) have their shares acquired in such offer equally and on the same terms as holders of our Class A shares (including, without limitation, for the same consideration), the redemption process will follow the process detailed below.

We will, within ten days of the date on which the redemption event occurred (i.e., the date on which the triggering tender offer settled), publish in the Commercial Registry Gazette, the Spanish Stock Exchanges’ Gazettes and in at least two of the newspapers with widest circulation in Barcelona an announcement informing the holders of our Class B shares of the redemption event and the process for the exercise of redemption rights in connection with such redemption event.

Each holder of our Class B shares will be entitled to exercise its redemption right for two months from the first date of settlement of the tender offer triggering the redemption right by notifying us of its decision. We will ensure that mechanisms are in place so that the notification of the exercise of the redemption right may be made through Iberclear.

The redemption price to be paid by us for each Class B share for which the redemption right has been exercised will be the sum of (i) the amount in euro of the highest consideration paid in the tender offer triggering the redemption right plus (ii) interest on the amount referred to in (i), from the date such tender offer is first settled until the date of full payment of the redemption price, at a rate equal to the one-year EURIBOR plus 300 basis points. For the purposes of this calculation, the amount in euro corresponding to any non-cash consideration paid in the tender offer will be the market value of such non-cash consideration as of the date the tender offer is first settled. The calculation of such market value shall be supported by at least two independent experts designated by us from auditing firms of international repute.

We will, within 40 days of the date on which the period for notification of the exercise of redemption rights following a tender offer lapses, take all the necessary actions to (i) effectively pay the redemption price for our Class B shares for which the redemption right has been exercised and complete the capital reduction required for the redemption and (ii) reflect the amendment to Article 6 of the Articles of Association (related to share capital) deriving from the redemption.

The number of our Class B shares redeemed shall not represent a percentage over our total Class B shares issued and outstanding at the time the tender offer is made in excess of the percentage that the sum of our Class A shares (i) to which the tender offer is addressed, (ii) held by the offerors in that offer and (iii) held by persons acting in concert with the offerors or by persons having reached an agreement relating to the offer with the offerors represent over the total Class A shares issued and outstanding at the time the tender offer causing the redemption of our Class B shares is made.

147

Table of Contents

Payment of the redemption price will be subject to us having sufficient distributable reserves but, after a tender offer occurs and until the redemption price for our Class B shares is paid in full, we will not be able to declare or pay any dividends nor any other distributions to our shareholders (in each case, whether in cash, securities of Grifols or any of our subsidiaries, or any other securities, assets or rights).

Liquidation Rights

Each Class B share entitles its holder to receive, upon our winding-up and liquidation, an amount equal to the sum of (i) the nominal value of such Class B share and (ii) the share premium paid up for such Class B share when it was subscribed for.

We will pay the liquidation amount to the holders of our Class B shares before any amount on account of liquidation is paid to the holders of our Class A shares.

Each of our Class B shares entitles its holder to receive, in addition to the liquidation preference amount, the same liquidation amount paid for a Class A share.

Subscription Rights

Each Class B share entitles its holder to the same rights (including preferential subscription rights and free allotment rights) as one Class A share in connection with any issuance, granting or sale of (i) any shares in Grifols, (ii) any rights or other securities exercisable for, exchangeable or convertible into shares in Grifols or (iii) any options, warrants or other instruments giving the right to the holder thereof to purchase, convert, subscribe or otherwise receive any securities in Grifols.

As an exception, the preferential subscription rights and the free allotment rights of the Class B shares will only be for new Class B shares or for instruments giving the right to purchase, convert, subscribe for or otherwise receive Class B shares, and the preferential subscription right and the free allotment right of an Class A share will only be for new Class A shares or for instruments giving the right to purchase, convert, subscribe or otherwise receive Class A shares, for each capital increase or issuance that meets the following three requirements: (i) the issuance of Class A shares and Class B shares is in the same proportion of our share capital as they represent at the time the resolution on the capital increase is passed; (ii) grants of preferential subscription rights or free allotment rights, as applicable, to the Class B shares for the Class B shares are under the same terms as the preferential subscription rights or free allotment rights, as applicable, granted to the Class A shares for the Class A shares; and (iii) no other shares or securities are issued.

Registration and Transfers

Class B shares are in book-entry form on Iberclear and are indivisible, as indicated with respect to Class A shares above in “—Class A Shares—Registration and Transfers.”

Change in Control

The Articles of Association do not contain any provisions that would have the effect of delaying, deferring or preventing a change in control of Grifols.

Changes in Share Capital

Changes in share capital are considered extraordinary matters and must be approved by our shareholders in accordance with the procedures explained above in “—Class A Shares—Shareholders’ Meetings and Voting Rights” and “—Class B Shares—Separate Vote at General Shareholder Meetings on Extraordinary Matters.”

A capital increase may be effected by issuing new shares or by increasing the par value of existing shares. A capital reduction may be effected by reducing the par value of existing shares or by redeeming or repurchasing existing shares.

426,129,798 Class A Shares are currently issued and outstanding with a par value of €0.25 per share and 261,425,110 Class B Shares are currently issued and outstanding with a par value of €0.05 per share. As of December 31, 2022, our total share capital stands at €119,603,705.

148

Table of Contents

Sinking Fund

The Articles of Association do not contain any sinking fund provisions.

Material Contracts

The following contracts have been entered into by us within the two years immediately preceding the date of this annual report on Form 20-F or contain provisions under which we or another member of the Grifols Group has an obligation or entitlement that is material to us:

2017 Notes

For a summary of the material terms of the 2017 Notes, see Item 5 of this Part I, “Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Sources of Credit—The 2017 Notes.”

2019 Notes

For a summary of the material terms of the 2019 Notes, see Item 5 of this Part I, “Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Sources of Credit—The 2019 Notes.”

2021 Notes

For a summary of the material terms of the 2021 Notes, see Item 5 of this Part I, “Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Sources of Credit—The 2021 Notes.”

First Lien Credit Facilities

For a summary of the material terms of the First Lien Credit Facilities, see Item 5 of this Part I, “Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Sources of Credit—First Lien Credit Facilities.”

European Investment Bank Term Loans

For a summary of the material terms of the European Investment Bank Term Loans, see Item 5 of this Part I, “Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Sources of Credit—European Investment Bank Term Loans.”

Acquisitions

For a summary of the material terms of our acquisitions substantially completed in 2020, 2021 and 2022, see Item 5 of this Part I, “Operating and Financial Review and Prospects—A. Operating Results—Factors Affecting Our Financial Condition and Results of Operations—Acquisitions.”

Exchange Controls

Restrictions on Foreign Investment

Under present regulations, foreign investors may transfer invested capital, capital gains and dividends out of Spain without limitation on the amount other than applicable taxes. Law 19/2003, of July 4, 2003 , as amended, updated Spanish exchange control and money laundering prevention provisions, by recognizing the principle of freedom of the movement of capital between Spanish residents and nonresidents unless they fall within the scope of article 7 bis of Law 19/2003, enacted in December 2022 through Royal Decree-Law 20/2022, or - solely with respect to investments in the defense sector - article 11 of Royal Decree 664/1999, of April 23, 1999.

149

Table of Contents

The law establishes procedures for the declaration of capital movements for purposes of administrative or statistical information and authorizes the Spanish government to take measures which are justified on grounds of public policy or public security and public health. Article 7 bis of Law 19/2003 establishes a screening mechanism for certain investments made by non-EU and non-EFTA residents, based on public order, public health and public security reasons. It also provides the mechanism to take exceptional measures with regard to third countries if such measures have been approved by the European Union or by an international organization to which Spain is a party.

The Spanish Stock Exchanges and securities markets are open to foreign investors. Royal Decree 664/1999, on Foreign Investments, of April 23, 1999, established a new framework for the regulation of foreign investments in Spain that, on a general basis, no longer requires any prior consents or authorizations from authorities in Spain (without prejudice to specific regulations for several specific sectors, such as television, radio, mining, telecommunications, etc.). Royal Decree 664/1999 requires notification of all foreign investments in Spain and liquidations of such investments upon completion of such investments to the Investments Registry of the Ministry of Economy and Finance, strictly for administrative statistical and economical purposes. Where the investment or divestiture is made in shares of a Spanish company listed on any of the Spanish Stock Exchanges, the duty to provide notice of a foreign investment or divestiture lies with the relevant entity with whom the shares (in book-entry form) have been deposited or that has acted as an intermediary in connection with the investment or divestiture.

Only investments from tax haven countries require notice before and after execution of the investment, except that no prior notice is required for: (i) investments in listed or publicly negotiable securities or in participations in collective investment schemes that are registered with the CNMV and (ii) investments that do not increase the foreign ownership of the share capital of a Spanish company to over 50%. In specific instances, the Council of Ministers may agree to suspend all or part of Royal Decree 664/1999 following a proposal of the Ministry of Economy and Finance, or, in some cases, a proposal by the head of the government department with authority for such matters and a report of the Foreign Investment Body. These specific instances include a determination that the investments, due to their nature, form or condition, affect or may potentially affect activities relating to the exercise of public powers, national security or public health. Royal Decree 664/1999 is currently suspended for investments relating to national defense. In those cases in respect of which Royal Decree 664/1999 is suspended, the affected investor must obtain prior administrative authorization in order to carry out the investment.

Exchange Controls

Law 10/2010, on the prevention of money laundering and funding of terrorism, was adopted on April 28, 2010 and entered into force on April 30, 2010. This Law requires a person moving (i) paper money and coins in any currency, (ii) bearer checks in any currency or (iii) any other physical medium, including electronic media, designed for use as payment to the bearer to declare such payment to the Spanish exchange control authorities if it exceeds €10,000 (or the foreign currency equivalent).

Taxation

In General

Treatment of Holders of ADSs

This section describes the material United States federal income and Spanish tax consequences of owning shares or ADSs. It applies to you only if you hold your shares or ADSs as capital assets for tax purposes. This section does not apply to you if you are a member of a special class of holders subject to special rules, including:

a dealer in securities;

a trader in securities that elects to use a mark-to-market method of accounting for securities holdings;

a tax-exempt organization;

a life insurance company;

a person liable for alternative minimum tax under the Code (as defined below);

150

Table of Contents

a person that actually or constructively owns 10% or more of our voting stock;

a person that holds shares or ADSs as part of a straddle or a hedging or conversion transaction; or

a U.S. Holder (as defined below) whose functional currency is not the U.S. dollar.

This section is based on the Internal Revenue Code of 1986, as amended, or the Code, its legislative history, existing and proposed regulations, published rulings and court decisions, in each case as in effect as of the date hereof and all of which are subject to change, possibly on a retroactive basis, as well as the tax laws of Spain and regulations thereunder and the Convention Between the United States of America and the Kingdom of Spain for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, or the Treaty, in each case as in effect as of the date hereof and subject to change.

You are a “U.S. Holder” if you are a beneficial owner of shares or ADSs and you are:

a citizen or resident of the United States;

a corporation or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

an estate whose income is subject to United States federal income tax regardless of its source; or

a trust if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the trust.

An “eligible U.S. Holder” is a U.S. Holder that:

is a resident of the United States for purposes of the Treaty;

does not maintain a permanent establishment or fixed base in Spain to which shares or ADSs are attributable and through which the U.S. Holder carries on or has carried on business (or, in the case of an individual, performs or has performed independent personal services); and

is otherwise eligible for benefits under the Treaty with respect to income and gain from the shares or ADSs.

A “non-U.S. Holder” is a beneficial owner of shares or ADSs that is not a U.S. Holder.

In addition, if a partnership (including any entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of shares or ADSs, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. A beneficial owner of shares or ADSs that is a partnership, and partners in such partnership, should consult their own tax advisors regarding the tax consequences of owning and disposing of shares or ADSs.

You should consult your own tax advisor regarding the United States federal, state and local and the Spanish and other tax consequences of owning and disposing of shares and ADSs in your particular circumstances. In particular, you should confirm your status as an eligible U.S. Holder with your advisor and should discuss any possible consequences of failing to qualify as an eligible U.S. Holder.

This discussion addresses only United States federal income taxation and Spanish income taxation, gift and inheritance taxation, wealth taxation and transfer taxation.

Treatment of Holders of ADRs

In general, and taking into account the earlier assumptions, for United States federal income and Spanish tax purposes, if you hold ADRs evidencing ADSs, you will be treated as the owner of the shares represented by those ADRs. Exchanges of shares for ADRs, and ADRs for shares, generally will not be subject to United States federal income or to Spanish tax.

151

Table of Contents

Spanish Tax Considerations

This discussion of Spanish tax consequences applies only to owners of ADSs or shares who are eligible U.S. Holders. The following is a summary of material Spanish tax matters and is not exhaustive of all the possible tax consequences to individuals or entities of the acquisition, ownership and disposition of ADSs or shares.

Taxation of Dividends

Under Spanish law, including Royal Legislative Decree 5/2004, of March 5, 2004, as amended by Law 26/2014 (which is effective from January 1, 2015), on the Non-Resident Income Tax Law, dividends paid by a Spanish resident company to a holder of ordinary shares or ADSs not residing in Spain for tax purposes and not operating through a permanent establishment in Spain are subject to Spanish Non-Resident Income Tax of 19%.

We will levy an initial withholding tax on the gross amount of dividends at a 19% tax rate, following the procedures set forth by the Spanish Ministerial Order, or Order, of April 13, 2000. However, under the Treaty and subject to the fulfillment of certain requirements, individuals and entities may be entitled to a reduced rate of 15%.

To benefit from the Treaty’s reduced rate of 15%, an individual or entity must provide the depositary with a certificate from the U.S. Internal Revenue Service, or IRS, stating that, to the knowledge of the IRS, it is a resident of the United States within the meaning of the Treaty. The IRS certificate may be obtained by filing an IRS Form 8802 and is valid for a period of one year from the date of issue, unless it includes a specific year for which a tax resident is considered, in which case the certificate will be deemed applicable during that year.

According to the Order of April 13, 2000, to get a direct application of the Treaty’s reduced rate of 15%, the certificate referred to above must be provided to the depositary before the tenth day following the end of the month in which the dividends were distributable by us. If an individual or entity fails to timely provide the depositary with the required documentation, it may obtain a refund of the 4% in excess withholding that would result from the Spanish tax authorities in accordance with the procedures below.

Spanish Refund Procedure

According to Royal Decree 1776/2004, of July 30, 2004, as amended, which further develops the Royal Legislative Decree 5/2004 on the Non-Resident Income Tax Law, a refund of the amount withheld in excess of the rate provided by the Treaty can be obtained from the relevant Spanish tax authorities. An eligible U.S. Holder may pursue the refund claim by filing all of the following:

a Spanish 210 Form;

the certificate from the IRS referred to above in “—Taxation of Dividends;” and

evidence that non-resident income tax was withheld with respect to it.

The Spanish Revenue Office must make the refund within six months after the refund claim is filed. If such period lapses without receipt of the refund, the holder is entitled to receive interest for late payment on the amount of the refund claimed.

152

Table of Contents

The refund claim must be filed within four years of the date on which the withheld tax was collected by the Spanish tax authorities. According to Order EHA/3316, of December 17, 2010, for dividends paid as of January 2011, the 210 Form must be filed as from February 1st of the calendar year following the year in which the dividend was paid.

Individuals and entities are urged to consult their own tax advisers regarding refund procedures and any U.S. tax implications of refund procedures.

Taxation of Capital Gains

Under Spanish law, any capital gains derived from securities issued by persons residing in Spain for tax purposes are considered to be Spanish source income and, therefore, are taxable in Spain. For U.S. residents, income from the sale of ADSs or shares will be treated as capital gains for Spanish tax purposes. Spanish Non-Resident Income Tax is levied at a 19% rate on capital gains realized by persons not residing in Spain for tax purposes who are not entitled to the benefit of any applicable treaty for the avoidance of double taxation. Capital gains and losses will be calculated separately for each transaction and losses may not be offset against capital gains.

Notwithstanding the above, capital gains derived from the transfer of shares on an official Spanish secondary securities market by any holder who is a resident of a country that has entered into a treaty for the avoidance of double taxation with Spain containing a clause of “exchange of information” (as defined in Law 36/2006, of November 30, 2006, related to measures to prevent tax fraud) will be exempt from taxation in Spain. In addition, under the Treaty, capital gains realized by an individual or entity upon the disposition of ADSs or shares will not be taxed in Spain. An individual or entity is required to establish that it is entitled to this exemption by providing to the relevant Spanish tax authorities an IRS certificate of residence in the United States, together with the appropriate Spanish 210 tax form, between January 1st and January 20th of the calendar year following the year in which the transfer of shares took place.

Spanish Wealth Tax

Individuals not resident in Spain for tax purposes who hold shares or ADSs located in Spain are subject to the Spanish wealth tax (Law 19/1991), which imposes a tax on property and rights located in Spain or that can be exercised within the Spanish territory on the last day of any year. The Spanish tax authorities may take the view that all shares of Spanish corporations and all ADSs representing such shares are located in Spain for Spanish tax purposes. If the tax authorities take this view, non-residents of Spain who held shares or ADSs on the last day of any year would be subject to the Spanish wealth tax for such year on the average market value of such shares or ADSs during the last quarter of such year (this average price of listed shares is published in the official State Gazette every year). Law 4/2008 amended the Spanish wealth tax law, introducing a 100% tax rebate and eliminating the obligation to file any form for tax periods starting as of 1 January 2008. However, this 100% tax rebate was temporarily abolished with effect as of the 2011 fiscal year, and since then this situation has been extended every year. From 2021, the abolition of the rebate has been established as indefinite, thus eliminating the need to stipulate extensions. Notwithstanding the above, there is a tax-free allowance of €700,000.

As a result of the above legislation, non-residents of Spain who hold or held shares, ADSs, or other assets or rights located in Spain according to Spanish wealth tax law, on the last day of the year, the combined value of which exceeds €700,000 might be subject to the Spanish wealth tax on that excess amount at marginal rates varying between 0.2% and 3.5% (the highest bracket increased by 1% since 2021), and would be obliged to file the corresponding wealth tax return.

Law 11/2021 amends the Wealth Tax Law to clarify that all non-residents taxpayers (and not only those who are resident in the EU and EEA jurisdictions) are entitled to apply the tax reliefs approved by the Spanish Regions.

153

Table of Contents

Solidarity Tax on Large Fortunes

On December 29, 2022, a new solidarity tax on large fortunes came into force, meant to be supplementary to the wealth tax described above. The new solidarity tax is a direct and personal tax levied on individuals with a net wealth above €3.0 million as of December 31 of each year. Non-Spanish residents would be subject to this tax only taking into account their Spanish net wealth. This new tax is consistent with the provisions of the Spanish wealth tax in most essential aspects (such as exemptions, taxable and net taxable bases, tax rates and limit on amount of tax payable). The solidarity tax has been designed to be temporary and will remain in force for two calendar years (i.e. 2022 and 2023), although the law includes a review clause allowing the legislator to assess whether to extend it at the end of the initial period. In order to avoid double taxation, the rules applicable to the new solidarity tax allows individuals to deduct amounts already paid as Spanish wealth tax from their total payable solidarity tax.

Spanish Inheritance and Gift Taxes

Under Law 29/1987, transfers of shares or ADSs upon death or by gift are subject to Spanish inheritance and gift taxes if the transferee is a resident of Spain for tax purposes, or if the shares or ADSs are located in Spain at the time of gift or death, or the rights attached thereto could be exercised or have to be fulfilled in the Spanish territory, regardless of the residence of the beneficiary. In this regard, the Spanish tax authorities may determine that all shares of Spanish corporations and all ADSs representing such shares are located in Spain for Spanish tax purposes. The applicable tax rate, after applying all relevant factors, ranges between 0% and 81.6% for individuals. Law 11/2021 amends the Gift and Inheritance Tax Law to clarify that all non-residents taxpayers (and not only those who are resident in the EU and EEA jurisdictions) are entitled to apply the tax reliefs approved by the Spanish Regions, following the case-law of the Spanish Supreme Court.

Gifts granted to corporations not resident in Spain are subject to Spanish Non-Resident Income Tax of 19% of the fair market value of the shares as a capital gain. If the donee is a United States corporation, the exclusions available under the Treaty described above in “—Taxation of Capital Gains” will be applicable.

Expenses of Transfer

Transfers of ADSs or shares will be exempt from any Spanish transfer tax or value-added tax. Additionally, no Spanish stamp tax will be levied on such transfers.The transfer of shares or ADSs may be subject to the Spanish Financial Transaction tax (the “Spanish FTT”). The Spanish law which implements the Spanish FTT (the “FTT Law”) was approved on October 7, 2020, and published in the Spanish Official Gazette (Boletín Oficial del Estado) on October 16, 2020. The Spanish FTT came into force three months after the publication of the FTT Law (i.e., on January 16, 2021) and will charge a 0.2% rate on specific acquisitions of listed shares issued by Spanish companies (including ADSs) whose market capitalization exceeds 1 billion euros (€1 billion) (this may be the case of Grifols), regardless of the jurisdiction of residence of the parties involved in the transaction. Transactions in the primary market (such as a capital increase) are exempt from the Spanish FTT. However, the Spanish FTT will subject other transactions involving the acquisition of shares or ADSs depending on the market capitalization of Grifols. Prospective investors are advised to seek their own professional advice in relation to the Spanish FTT.

United States Federal Income Tax Considerations

Taxation of Dividends

U.S. Holders

Under the United States federal income tax laws, and subject to the passive foreign investment company (“PFIC”) rules discussed below, if you are a U.S. Holder, the gross amount of any dividend (including any preferred dividends on our Class B shares) we pay out of our current or accumulated earnings and profits (as determined for United States federal income tax purposes) is subject to United States federal income taxation. If you are a noncorporate U.S. Holder, dividends (including any preferred dividends on our Class B shares) paid to you that constitute qualified dividend income will be taxable to you at a maximum tax rate of 20% provided that you hold the shares or ADSs for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date and meet other holding period requirements. Dividends we pay (including any preferred dividends on our Class B shares) with respect to the shares or ADSs generally will be qualified dividend income.

154

Table of Contents

With respect to any dividend we pay (including any preferred dividends on our Class B shares) you must include any Spanish tax withheld from the dividend payment in the gross amount of such dividend even though you do not in fact receive it. Dividends are taxable to you when you, in the case of shares, or the Depositary, in the case of ADSs, receive such dividend, actually or constructively. Such dividends will not be eligible for the dividends-received deduction generally allowed to United States corporations in respect of dividends received from other United States corporations. The amount of a dividend distribution that you must include in your income as a U.S. Holder will be the U.S. dollar value of the euro payments made, determined at the spot euro/U.S. dollar rate on the date the dividend distribution is includible in your income, regardless of whether the payment is in fact converted into U.S. dollars. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date you include a dividend payment in income to the date you convert the payment into U.S. dollars will be treated as ordinary income or loss and will not be eligible for the special tax rate applicable to qualified dividend income. The gain or loss generally will be income or loss from sources within the United States for foreign tax credit limitation purposes. Distributions in excess of current and accumulated earnings and profits, as determined for United States federal income tax purposes, will be treated as a non-taxable return of capital to the extent of your adjusted tax basis in the shares or ADSs and thereafter as capital gain.

Subject to certain limitations, the Spanish tax withheld in accordance with the Treaty and paid over to Spain will be creditable or deductible against your United States federal income tax liability. Special rules apply in determining the foreign tax credit limitation with respect to dividends that are subject to the maximum 20% tax rate. To the extent a refund of the tax withheld is available to you under Spanish law or under the Treaty, the amount of tax withheld that is refundable will not be eligible for credit against your United States federal income tax liability. See “—Spanish Tax Considerations—Spanish Refund Procedure” above for the procedures for obtaining a tax refund.

Dividends will be income from sources outside the United States, and dividends paid will, depending on your circumstances, be “passive” or “general” income which, in either case, is treated separately from other types of income for purposes of computing the foreign tax credit allowable to you.

A U.S. Holder may make an election to treat all foreign taxes paid as deductible expenses in computing taxable income, rather than as a credit against tax, subject to generally applicable limitations. Such an election, once made, applies to all foreign taxes paid for the taxable year subject to the election. The rules governing foreign tax credits are complex and, therefore, U.S. Holders are strongly encouraged to consult their own tax advisors to determine whether they are subject to any special rules that may limit their ability to make effective use of foreign tax credits and whether or not an election would be appropriate based on their particular circumstances.

Non-U.S. Holders

If you are a non-U.S. Holder, dividends (including any preferred dividends on our Class B shares) paid to you in respect of shares or ADSs will not be subject to United States federal income tax unless such dividends are “effectively connected” with your conduct of a trade or business within the United States, and such dividends are attributable to a permanent establishment that you maintain in the United States if that is required by an applicable income tax treaty as a condition for subjecting you to United States taxation on a net income basis. In such cases you generally will be taxed in the same manner as a U.S. Holder. If you are a corporate non-U.S. Holder, “effectively connected” dividends may, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate or at a lower rate if you are eligible for the benefits of an income tax treaty that provides for a lower rate.

Taxation of Capital Gains

U.S. Holders

Subject to the PFIC rules discussed below, if you are a U.S. Holder and you sell or otherwise dispose of your shares or ADSs, you will recognize capital gain or loss for United States federal income tax purposes equal to the difference between the U.S. dollar value of the amount that you realize and your adjusted tax basis, determined in U.S. dollars, in your shares or ADSs. Capital gain of a noncorporate U.S. Holder is generally taxed at a maximum rate of 20% where such noncorporate U.S. Holder has a holding period greater than one year. Such gain or loss will generally be income or loss from sources within the United States for foreign tax credit limitation purposes.

155

Table of Contents

Non-U.S. Holders

If you are a non-U.S. Holder, you will not be subject to United States federal income tax on gain recognized on the sale or other disposition of your shares or ADSs unless:

the gain is “effectively connected” with your conduct of a trade or business in the United States, and the gain is attributable to a permanent establishment that you maintain in the United States if that is required by an applicable income tax treaty as a condition for subjecting you to United States taxation on a net income basis; or

you are an individual, you are present in the United States for 183 or more days in the taxable year of the sale, and certain other conditions exist.

If you are a corporate non-U.S. Holder, “effectively connected” gains that you recognize may also, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate or at a lower rate if you are eligible for the benefits of an income tax treaty that provides for a lower rate.

Passive Foreign Investment Company Considerations

We believe that our shares and ADSs should not be treated as stock of a PFIC for United States federal income tax purposes, but this conclusion is a factual determination that is made annually and thus may be subject to change. If we were to be treated as a PFIC, gain realized on the sale or other disposition of your shares or ADSs would in general not be treated as capital gain. Instead, if you are a U.S. Holder, you would be treated as if you had realized such gain and certain “excess distributions” ratably over your holding period for the shares or ADSs and would be taxed at the highest tax rate in effect for each such year to which the gain was allocated, together with an interest charge in respect of the tax attributable to each such year. With certain exceptions, your shares or ADSs will be treated as stock in a PFIC if we were a PFIC at any time during your holding period in your shares or ADSs. Certain elections (such as the mark-to-market election or the Qualified Electing Fund (“QEF”) election) may be available that would result in alternative treatments of the ADSs or shares. Dividends that you receive from us will not be eligible for the special tax rates applicable to qualified dividend income if we are treated as a PFIC with respect to you either in the taxable year of the distribution or the preceding taxable year, but instead will be taxable at rates applicable to ordinary income.

Medicare Contribution Tax on Unearned Income

A U.S. Holder that is an individual is subject to a 3.8% tax on the lesser of (1) such U.S. Holder’s “net investment income” for the relevant taxable year and (2) the excess of such U.S. Holder’s modified adjusted gross income for the taxable year over a certain threshold (between $125,000 and $250,000, depending on the individual’s circumstances). A U.S. Holder that is an estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, is subject to a 3.8% tax on the lesser of (1) such U.S. Holder’s undistributed “net investment income” for the relevant taxable year and (2) the excess of such U.S. Holder’s adjusted gross income for the taxable year over the amount at which the highest tax bracket begins for that taxable year ($13,450 for 2022). A U.S. Holder’s net investment income will generally include, among other items, the amount of gross dividend income and the amount of any net gains from such U.S. Holder’s disposition of your shares or ADSs, unless such dividends or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). U.S. Holders that are individuals, estates or trusts should consult their own tax advisors regarding the applicability of this tax to income and gains in respect of their investment in the shares or ADSs.

Backup Withholding and Information Reporting

If you are a noncorporate U.S. Holder, information reporting requirements, on Internal Revenue Service Form 1099, generally will apply to:

dividend payments or other taxable distributions made to you within the United States; and

the payment of proceeds to you from the sale of shares or ADSs effected at a United States office of a broker.

156

Table of Contents

Additionally, backup withholding may apply to such payments if you are a noncorporate U.S. Holder that:

fails to provide an accurate taxpayer identification number;

is notified by the Internal Revenue Service that you have failed to report all interest and dividends required to be shown on your federal income tax returns; or

in certain circumstances, fails to comply with applicable certification requirements.

If you are a non-U.S. Holder, you are generally exempt from backup withholding and information reporting requirements with respect to:

dividend payments made to you outside the United States by us or another non-United States payor; and

other dividend payments and the payment of the proceeds from the sale of shares or ADSs effected at a United States office of a broker, if the income associated with such payments is otherwise exempt from United States federal income tax; and:

the payor or broker does not have actual knowledge or reason to know that you are a United States person and you have furnished the payor or broker one of the following:

an Internal Revenue Service Form W-8BEN, Form W-8BEN-E or an acceptable substitute form upon which you certify, under penalties of perjury, that you are a non-United States person, or

other documentation upon which it may rely to treat the payments as made to a non-United States person in accordance with U.S. Treasury regulations, or

you otherwise establish an exemption.

Payment of the proceeds from the sale of shares or ADSs effected at a foreign office of a broker generally will not be subject to information reporting or backup withholding. However, a sale of shares or ADSs that is effected at a foreign office of a broker will be subject to information reporting and backup withholding if:

the proceeds are transferred to an account maintained by you in the United States;

the payment of proceeds or the confirmation of the sale is mailed to you at a United States address; or

the sale has some other specified connection with the United States as provided in U.S. Treasury regulations, unless the broker does not have actual knowledge or reason to know that you are a United States person and the documentation requirements described above are met or you otherwise establish an exemption.

In addition, a sale of shares or ADSs effected at a foreign office of a broker will be subject to information reporting if the broker is:

a United States person;

a controlled foreign corporation for United States federal income tax purposes;

a foreign person 50% or more of whose gross income is effectively connected with the conduct of a United States trade or business for a specified three-year period; or

a foreign partnership, if at any time during its tax year:

157

Table of Contents

one or more of its partners are “U.S. persons,” as defined in U.S. Treasury regulations, who in the aggregate hold more than 50% of the income or capital interest in the partnership, or

such foreign partnership is engaged in the conduct of a United States trade or business, unless the broker does not have actual knowledge or reason to know that you are a United States person and the documentation requirements described above are met or you otherwise establish an exemption. Backup withholding will apply if the sale is subject to information reporting and the broker has actual knowledge that you are a United States person.

Backup withholding is not an additional tax. You generally may obtain a refund of any amounts withheld under the backup withholding rules that exceed your income tax liability by filing a refund claim with the United States Internal Revenue Service.

Disclosure of Information with Respect to Foreign Financial Assets

Certain U.S. individuals who hold any interest in “specified foreign financial assets,” including our shares or ADSs, during such holder’s taxable year must attach to their U.S. tax return for such year certain information with respect to each such asset if the aggregate value of all of such assets exceeds $50,000 (or a higher dollar amount prescribed by the Internal Revenue Service), unless such shares or ADSs are held in an account maintained by a U.S. payor, such as a U.S. financial institution or the U.S. branch of a foreign bank or insurer. For this purpose, a “specified foreign financial asset” includes any depositary, custodial or other financial account maintained by a foreign financial institution, and certain assets that are not held in an account maintained by a financial institution, including any stock or security issued by a person other than a U.S. person. A taxpayer subject to these rules who fails to furnish the required information may be subject to a penalty of $10,000, and an additional penalty may apply if the failure continues for more than 90 days after the taxpayer is notified of such failure by the Internal Revenue Service, unless the taxpayer demonstrates a reasonable cause for such failure to comply. An accuracy-related penalty of 40% is imposed for an underpayment of tax that is attributable to an “undisclosed foreign financial asset understatement,” which for this purpose is the portion of the understatement of gross income for any taxable year that is attributable to any transaction involving an “undisclosed foreign financial asset,” including any asset that is subject to information reporting requirements under these rules, which would include our shares or ADSs if the dollar threshold described above were satisfied.The applicable statute of limitations for assessment of U.S. federal income taxes is extended to six years if a taxpayer omits from gross income more than $5,000 and such omission is attributable to a foreign financial asset as to which reporting is required under the rules described in the preceding paragraph or would be so required if such rules were applied without regard to the dollar threshold or any other exceptions specified by the Internal Revenue Service. In addition, the statute of limitations will be suspended if a taxpayer fails to provide in a timely manner either information with respect to specified foreign financial assets required to be reported or the annual information reports required for holders of PFIC stock, including PFIC stock for which a QEF election is made. You should consult your own tax advisor concerning any obligation you may have to furnish information to the Internal Revenue Service as a result of holding our shares or ADSs.

Dividends and Paying Agents

Not Applicable.

Statement by Experts

Not Applicable.

Documents on Display

We are subject to the information requirements of the Exchange Act, except that, as a foreign private issuer, we are not subject to the proxy rules or the short-swing profit disclosure rules of the Exchange Act. In accordance with these information requirements, we file or furnish reports and other information with the SEC. Reports and other information filed or furnished by us with the SEC may be inspected and copied at the public reference facilities maintained by the SEC at Room 1024, 100 F Street, N.E., Washington, D.C. 20549, and at the SEC’s regional offices at 233 Broadway, New York, New York 10279 and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.

158

Table of Contents

Copies of such material may also be inspected at the offices of NASDAQ, 4 Times Square, New York, New York 10036, on which our ADSs are listed. In addition, information filed electronically with the SEC is publicly available on the SEC’s website, which does not form part of this annual report on Form 20-F, at http://www.sec.gov.

Subsidiary Information

Not Applicable.

Annual Report to Security Holders

If we are required to provide an annual report to security holders in response to the requirements of Form 6-K, we will submit the annual report to security holders in electronic format in accordance with the EDGAR Filer Manual.

Item 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The risks inherent in our market-sensitive instruments are potential losses that may arise from adverse changes to interest rates, foreign exchange rates and market prices. We are subject to market risk resulting from changes in interest rates because such changes may affect the cost at which we obtain financing. We are subject to exchange rate risk with respect to our debt denominated in foreign currencies.

Currency Risk

We operate internationally and are exposed to currency risks when operating in foreign currencies, in particular with respect to the U.S. dollar. Currency risk is associated with future commercial transactions, recognized assets and liabilities and net investments in foreign operations.

We hold several investments in foreign operations, the net assets of which are exposed to currency risk. Currency risk affecting net assets of our foreign operations in U.S. dollars are mitigated primarily through borrowings in the relevant foreign currency. Our main exposure to currency risk is to the U.S. dollar, which is used in a significant percentage of our transactions in foreign currencies.

If the U.S. dollar had strengthened by 10% against the euro at December 31, 2022, equity would have increased by €892.8 million and profit would have increased by €17.4 million. This analysis assumes that all other variables are held constant, especially that interest rates remain constant. A 10% weakening of the U.S. dollar against the euro at December 31, 2022 and December 31, 2021 would have had the opposite effect for the amounts shown above, all other variables being held constant.

Interest Rate Risk

Our interest rate risks arise from current and non-current borrowings. Borrowings at variable interest rates expose us to cash flow interest rate risks. The purpose of managing interest rate risk is to balance the debt structure, maintaining part of borrowings at fixed rates and hedging part of variable rate debt.

As of December 31, 2022, €3.4 billion of our indebtedness had a variable rate (LIBOR or EURIBOR). This variable-rate debt represented 37% of our total debt at December 31, 2022 (42% at December 31, 2021) and includes mainly senior secured debt. See Item 3 of this Part I, “Key Information—D. Risk Factors—Risks Relating to the Company and Our Business—We are susceptible to interest rate variations.”

159

Table of Contents

As of the date of this annual report, we are not participating in interest rate hedges of Euros or U.S. dollars. In previous years, the fair value of interest rate swaps, contracted to reduce the impact of increases in variable interest rates (LIBOR and EURIBOR), were accounted for on a monthly basis. These derivative financial instruments comply with hedge accounting requirements.

If the interest rate had been 100 basis points higher at December 31, 2022, the interest expense would have increased by €34.7 million. A 100 basis points decrease in interest rates at December 31, 2022 would have had the opposite effect for the amounts shown above. As we do not have any hedging derivatives in place, the net effect on cash interest payments would have increased by the same amount.

Market Price Risk

We are subject to price risk with respect to raw materials, which is mitigated by the vertical integration of the hemoderivatives business in a sector that is highly concentrated.

Item 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Debt Securities

Not Applicable.

Warrants and Rights

Not Applicable.

Other Securities

Not Applicable.

American Depositary Shares

Deutsche Bank Trust Company Americas serves as the depositary for both our Class A ADSs and our Class B ADSs, and its principal executive office is located at 60 Wall Street, New York, NY 10005, USA. The custodian is Deutsche Bank Sociedad Anónima Española, and its principal office in Spain is located at Ronda General Mitre 72-74, 08017 Barcelona, Spain.

Each Class A ADS represents the right to receive one half of one Class A ordinary share of Grifols. Each Class B ADS represents the right to receive one Class B non-voting preference share of Grifols.

160

Table of Contents

The following is a summary of the fee provisions of the deposit agreements for each of the Class A ADSs and Class B ADSs. For more complete information, you should read each deposit agreement in its entirety.


Associated Fee		Depositary Action
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)		Issuance of ADSs, including issuance resulting from a distribution of shares or rights or other property. Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates.

$2.00 (or less) per 100 ADSs (or portion of 100 ADSs)		Distribution of cash proceeds, including cash dividends or sale of rights and other entitlements.

$2.00 (or less) per 100 ADSs (or portion of 100 ADSs) per calendar year, provided that this fee, when combined with the fee for distribution of cash proceeds, including cash dividends or sale of rights and other entitlements, shall not exceed $2.00 (or less) per 100 ADSs (or portion of 100 ADSs) in any calendar year		Depositary operation and maintenance costs.

Annual fee of $1.00 per 100 ADSs		Inspections of the relevant share register.

Registration or transfer fees		Transfer and registration of our shares on its share register to or from the name of the depositary or its agent when you deposit or withdraw our shares.

Expenses of the depositary		Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement). Converting foreign currency to U.S. dollars.

Taxes and other governmental charges the depositary or the custodian has to pay on any ADS or share underlying an ADS, including any applicable interest and penalties thereon and any share transfer or other taxes or governmental charges, for example, stock transfer taxes, stamp duty or withholding taxes		As necessary.

Any fees and expenses incurred by the depositary in connection with the conversion of a foreign currency in compliance with the applicable exchange control and other regulations, and the delivery of deposited securities, including any fees of a central depository, and any additional fees, charges, costs, or expenses, that may be incurred by the depositary from time to time		As necessary.

Any additional fees, charges, costs or expenses that may be incurred by the depositary from time to time.		As necessary.

The depositary collects its fees for issuance and cancellation of our ADSs directly from investors depositing shares or surrendering our ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions, by directly billing investors or by charging the book-entry system accounts of participants acting for such investors. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

161

Table of Contents

The fees and charges holders of our ADSs may be required to pay may vary over time and may be changed by us and by the depositary. Our ADS holders will receive prior notice of such changes.

Fees Paid by the Depositary to Grifols

Deutsche Bank Trust Company Americas, as depositary, has agreed to reimburse or pay on behalf of Grifols certain reasonable expenses related to our ADR programs and incurred by us in connection with the programs, such as investor relations activities and ongoing maintenance expenses and listing fees. It has covered all such expenses incurred by us during 2021 for an amount of $2.1 million. The amounts the depositary reimbursed or paid are not perforce related to the fees it collected from ADS holders.

GLOSSARY OF TERMS

“AAT” means alpha1-antitrypsin, a protein that protects the lungs.

“ACA” refers to the Affordable Care Act, a U.S. regulation.

“AlphaID” is a free cheek swab to test for alpha-1 deficiency in patients.

“AEMPS” refers to the Spanish Agency of Medicines and Medical Products.

“AMP” means the average manufacturer price of certain outpatient drugs covered by Medicaid, as defined under the Medicaid drug rebate program, and is used to help calculate rebates paid by certain drug manufacturers that are shared by the U.S. and state governments.

“Alzheimer’s disease” is the most common form of dementia. This incurable, degenerative, and terminal disease was first described by German psychiatrist and neuropathologist Alois Alzheimer in 1906 and was named after him.

“Albumin” is the most abundant blood plasma protein and is produced in the liver and forms a large proportion of all plasma. Albumin normally constitutes about 60% of human plasma. It is important in regulating blood volume by maintaining the oncotic pressure of the blood compartment.

“ASP” means the average sales price of certain outpatient drugs covered by Medicare Part B, and is used to help calculate reimbursement of such drugs.

“Assays” are systems designed to detect antibodies, antigens or the nucleic acid of an infectious agent. For instance, the WNV assay detects the presence of the West Nile virus in blood donations. The main types of assay used for blood screening are Immunoassays and Nucleic acid technology, or NAT assays.

“ATIII” means intramuscular (hyperimmune) immunoglobulins.

“A1PI” means alpha-1 proteinase inhibitor.

“BIDSXT” means a software tool that allows the analysis, interpretation and database management to transmit the results to the LIS.

“BLA” (Biologics License Application) is a biological license application issued by the FDA, and serves as a U.S. marketing authorization for certain biological drug products.

“BlisPack” a blister handling machine.

“BLOODchip” blood group genotyping tests manufactured by Progenika, a company in which Grifols has a majority stake.

162

Table of Contents

“Brexit” refers to the withdrawal of the United Kingdom (U.K.) from the European Union (EU).

“CCPR” refers to the California Consumer Protection act, a regulation passed by the U.S. state of California.

“CFIUS” refers to the Committee on Foreign Investment in the United States.

“cGMP” means current Good Manufacturing Practice.

“CIDP” means chronic inflammatory demyelinating polyneuropathy, a neurological disease resulting in weakness, numbness, pain and difficulty in walking.

“Cirrhosis” is a medical condition which is a result of advanced liver disease. It is characterized by the replacement of liver tissue by fibrosis (scar tissue) and regenerative nodules (lumps that occur due to attempted repair of damaged tissue).

“Congenital Alpha-1 Antitrypsin Deficiency” is an inherited disease characterized by reduced levels in the blood of the substance Alpha-1 Antitrypsin, or AAT. This substance is a protein that is normally made by the liver and reaches other organs (such as the lungs) after being released into the blood circulation.

“CLL” means chronic lymphocytic leukaemia.

“CMS” refers to the U.S. Centers for Medicare & Medicaid Services.

“CMV” means Cytomegalovirus, a common virus that infects people of all ages.

“CNMV” means the Comisión Nacional del Mercado de Valores.

“CPI-U” means the Consumer Price Index For All Urban Consumers, which measures the changes in the price of a basket of goods and services purchased by urban consumers.

“CPP” is the certificate of pharmaceutical product, a certificate issued in the format recommended by the WHO, which establishes the status of a pharmaceutical product and of the applicant for a certificate in the relevant exporting country.

“CSRC” refers to the Chinese Securities Regulatory Commission.

“DHPR” means dihydropyridine receptors.

“Diabetes” is a metabolic disease in which a person has high blood sugar, either because the pancreas does not produce enough insulin, or because cells do not respond to the insulin that is produced.

“DOJ” refers to the United States Department of Justice.

“ELISA” means enzyme-linked immunosorbent assay.

“EMA” refers to the European Medicines Agency.

“Erytra Eflexis” a fully automated, mid-size analyzer that performs pretransfusion compatibility testing using DG Gel technology.

“Factor VIII” or “FVIII” is an essential blood clotting factor also known as anti-haemophilic factor, or AHF. In humans, Factor VIII is encoded by the F8 gene. Defects in this gene results in hemophilia A, which is a sex-linked disease and occurs predominantly in males. FVIII concentrated from donated blood plasma, or alternatively recombinant FVIII, or rFVIII, can be given to hemophiliacs to restore hemostasis.

163

Table of Contents

“Factor IX” is an important blood clotting factor also known as Christmas factor or plasma thromboplastin component, or PTC. It is one of the serine proteases of the coagulation system and belongs to the peptidase family S1. In humans, a deficiency of this protein causes haemophilia B, which is a sex-linked disease and occurs predominantly in males.

“FDA” is the U.S. Food and Drug Administration.

“Fibrin Sealant” is surgical adhesive material that is utilized in a variety of surgical situations.

“Fractionation” is the process of fractionating plasma, or separating it into its different components or plasma derivatives.

“FSS” refers to the Federal Supply Schedule, a schedule managed by the U.S. Department of Veterans Affairs, which includes discounted drug pricing for certain U.S. government agency programs.

“GMP” means good manufacturing practices.

“GPO” means group purchasing organization.

“GDPR” refers to the General Data Protection Regulation, an EU regulation.

“Gri-fill System” is a process for the sterile filling of flexible material bags.

“HBV” means hepatitis B virus.

“HBC” means hepatitis C virus.

“Hematology” is the study of blood, blood-forming organs, and blood diseases.

“Hemoderivative” is a substance obtained by fractionation of human blood plasma.

“Hemophilia A” is a genetic deficiency in clotting Factor VIII, which causes increased bleeding (usually affects males).

“Hemostasis” is a complex process which causes the bleeding process to stop. It refers to the process of keeping blood within a damaged blood vessel (the opposite of hemostasis is hemorrhage). Most of the time this includes the changing of blood from a fluid to a solid state. Intact blood vessels are central to moderating blood’s tendency to clot. Hemostasis has three major steps: 1) vasoconstriction, 2) temporary blockage of a break by a platelet plug, and 3) blood coagulation, or formation of a clot that seals the hole until tissue are repaired.

“HHS” refers to the U.S. Department of Health and Human Services.

“HIPAA” refers to the Health Insurance Portability and Accountability Act of 1996, as amended, a U.S. regulation.

“HIV” refers to the human immunodeficiency virus.

“IFX” means infliximab, a medication used to treat Crohn’s Disease and Ulcerative Colitis.

“IG” means immunoglobulin, which contains the pooled IgG (immunoglobulin (antibody) G) extracted from plasma.

“Immunohematology” is a branch of hematology relating to the study of antigens and antibodies and their effects on blood and the relationships between disorders of the blood and the immune system.

164

Table of Contents

“Immunology” is a broad branch of biomedical science that covers the study of all aspects of the immune system in organisms. It deals with the physiological functioning of the immune system in states of both health and disease; malfunctions of the immune system in immunological disorders (autoimmune diseases, hypersensitivities, immune deficiency, transplant rejection); the physical, chemical and physiological characteristics of the components of the immune system in vitro, in situ, and in vivo.

“IND” means investigational new drug application, which is an application that must be accepted by the FDA and in effect prior to certain drug sponsors commencing clinical trials involving human subjects.

“IRB” refers to institutional review boards, oversight committees that approve and monitor clinical trials to protect the rights and welfare of human subjects.

“ITP” means idiopathic thrombocytopenic purpura.

“IVIG” means intravenous immunoglobulin, which is a blood product administered intravenously. It contains the pooled IgG (immunoglobulin (antibody) G) extracted from plasma. It is mainly used as treatment in four major categories: (i) immune deficiencies, (ii) inflammatory and autoimmune diseases, (iii) neurological diseases and (iv) acute infections.

“Kawasaki disease” is a rare autoimmune disease that mostly affects children and causes inflammation of vessels, fever and rashes. This disease can be treated with IVIG.

“Koate-DVI” is a medication is used to control and prevent bleeding episodes in people with low levels of factor VIII (hemophilia A).

“LIS” means Laboratory information system.

“Medicaid” is a social healthcare program in the United States for individuals with low income and resources.

“Medicare” is a national insurance program in the United States, primarily for persons 65 years old and over and certain younger persons with disabilities.

“Medicare Part B” is a portion of the Medicare program which includes, in part, reimbursement based on ASP for certain physician-administered drugs and drugs provided in the hospital outpatient setting.

“Medicare Part D” is a portion of the Medicare program which includes certain coverage for prescription drugs generally dispensed to patients by retail pharmacies.

“MM” means multiple myeloma.

“MRB” refers to the Market Research Bureau, Inc., an independent market research firm which supplies blood and plasma products industry data on a global level.

“NAT” means nucleic acid testing.

“NVD” means the share and asset agreement, executed with Novartis Vaccines and Diagnostics, Inc.

“OIG” is the HHS Office of the Inspector General, which is charged with protecting the integrity of HSS programs, including the Medicare and Medicaid programs.

165

Table of Contents

“Orphan drug” is a pharmaceutical agent that has been developed specifically to treat a rare medical condition, the condition itself being referred to as an orphan disease. The assignment of orphan status to a disease and to any drugs developed to treat it is a matter of public policy in many countries, and has resulted in medical breakthroughs that may not have otherwise been achieved due to the economics of drug research and development The Orphan Drug Act (ODA) of January 1983, passed in the United States, with lobbying from the National Organization for Rare Disorders, is meant to encourage pharmaceutical companies to develop drugs for diseases that have a small market. Under the law, companies that develop such a drug (a drug for a disorder affecting fewer than 200,000 people in the United States) may sell it without competition for seven to ten years, and may get clinical trial tax incentives.

“Open Payments Program” imposes new reporting and disclosure requirements for pharmaceutical and medical device manufacturers with regard to payments or other transfers of value made to certain U.S. healthcare practitioners, such as physicians and academic medical centers, and with regard to certain ownership interests held by physicians in reporting entities.

“PDUFA” is the Prescription Drug User Fee Act, which levies a user fee on certain human drug applications.

“Plasma” is the liquid part of the blood. The majority of plasma is composed of water. The remainder is essential proteins and antibodies that help sustain our body’s vital functions. A shortage of any one of these plasma proteins, such as albumin or immunoglobulins, can give rise to one of many life-threatening illnesses.

“Plasmapheresis” is a technique which separates plasma from other blood components, such as red blood cells, platelets, and other cells. These unused blood components are suspended in saline solution and immediately re-injected back into the donor while the plasma collection process is taking place. Because the donor is only providing plasma and not whole blood, the recovery process is faster and better tolerated, and the donor is therefore able to make donations more frequently. Plasmapheresis was developed by Jose Antonio Grifols Lucas in the year 1951. It is the only procedure that is capable of obtaining sufficient quantities of plasma to cover the needs of manufacturing our many different plasma protein therapies.

“Plasma derivatives” are proteins found in human plasma, which once isolated and purified, have therapeutic value.

“PTC” means plasma thromboplastin component.

“Prolastin” is a concentrated form of alpha1-antitrypsin, or AAT, produced by Grifols and derived from human plasma and approved only for chronic, or ongoing, replacement therapy in people with emphysema caused by genetic AAT deficiency. Given as prescribed, Prolastin raises the levels of AAT in the blood and lungs. Raising the AAT level may help reduce the damage to the lungs caused by destructive enzymes.

“Promonitor” Highly specific ELISA kits for quantification of serum drug levels and anti-drug antibodies of various biological drugs

“Q-Coagulometer, Q-Smart Q-Next and Q-Expert analyzers” Fully automated hemostasis analyzers that use reagents to measure blood coagulation levels.

“RFID” means Radio-Frequency Identification.

“RNA” means ribonucleic acid.

“sCAP” means severe community acquired pneumonia.

“SCIG” means subcutaneous immune globulin, which is a blood product administered subcutaneously. It contains the pooled IgG (immunoglobulin (antibody) G) extracted from plasma and is mainly used as treatment in four major categories: (i) immune deficiencies, (ii) inflammatory and autoimmune diseases, (iii) neurological diseases and (iv) acute infections.

“SME” means small and medium-sized enterprises.

“SYK-inhibitor” a new group of small molecule inhibitors which have been proposed as a therapy for both lymphoma and chronic lymphocytic leukemia.

166

Table of Contents

“TMA” transcription mediated amplification, a technology that allows a clinical laboratory to perform assays for blood screening with fewer steps, less processing time, and faster results. It is used in molecular biology, forensics, and medicine for the rapid identification and diagnosis of pathogenic organisms.

“Triturus analyzers” Open and fully automated analyzer for ELISA (enzyme-linked immunoabsorbent assay), tests with multi-test/multi-batch capability.

“Von Willebrand Disease” is the most common hereditary coagulation abnormality described in humans, although it can also be acquired as a result of other medical conditions. It arises from a qualitative or quantitative deficiency of von Willebrand factor, a multimeric protein that is required for platelet adhesion.

“WADiana/Erytra analyzers” Automated immunohematology analyzers that use gel agglutination technology to enable automatic processing of DG Gel^® blood determination cards.

“WHO” refers to the World Health Organization.

167

Table of Contents

PART II

Item 13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

Item 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

Item 15.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officers and our Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this annual report on Form 20-F, have concluded that, as of such date, our disclosure controls and procedures were effective.

Management’s Report on Internal Control over Financial Reporting

Our management, under the supervision of our Chief Executive Officer and our Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control system is designed to provide reasonable assurance as to the reliability of financial reporting and the preparation of the published financial statements under generally accepted accounting principles. For Grifols, “generally accepted accounting principles” means IFRS as issued by IASB.

Our internal control over the financial reporting system includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of our company are being made only in accordance with authorizations of management and directors of our company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our company assets that could have a material effect on the financial statements.

Internal control over financial reporting is a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS as issued by IASB. Internal control over financial reporting has inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements will not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2022. In making this assessment, they used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013). Based on their assessment under these criteria, our management believes that, at December 31, 2022, our internal control over financial reporting is effective.

168

Table of Contents

Our management excluded Biotest AG and its subsidiaries (the “Biotest AG Group”) from internal control over financial reporting from its assessment of the effectiveness of our internal control over financial reporting as of December 31, 2022, given that we acquired the Biotest Group only on April 25, 2022. At December 31, 2022 total assets and total revenues subject to Biotest Group’s internal control over financial reporting represented 6.7% and 6.0% of our consolidated total assets and total revenues, respectively, as of and for the year ended December 31, 2022.

Attestation Report of the Registered Public Accounting Firm

KPMG Auditores, S.L., an independent registered public accounting firm, who also audits the Group’s consolidated financial statements for 2022, has audited the effectiveness of Grifols S. A.’s internal control over financial reporting, and has issued an unqualified report thereon, which is included on page F-3 of this annual report on Form 20-F.

Changes in Internal Control over Financial Reporting

In connection with the audit of our consolidated financial statements as of and for the fiscal year ended December 31, 2021, we identified a material weakness related to the risk assessment process over the design and implementation effectiveness of controls over the classification of financial instruments subject to complex contractual arrangements. In response to this material weakness, we implemented a remediation plan to reinforce the controls and procedures over the financial reporting by seeking advice from third-party accounting professionals for highly complex transactions. As a result, this material weakness had been remediated at December 31, 2022.

Our management is committed to maintaining a strong internal control environment in compliance with the accounting policies, controls and procedures to provide reasonable assurance as to the reliability of financial reporting and the preparation of the published financial statements under generally accepted accounting principles.

Other than the already implemented remediation plan, there was no change in our internal control over financial reporting that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 16.[RESERVED]

Item 16.AAUDIT COMMITTEE FINANCIAL EXPERT

The Board has determined that Mr. Íñigo Sánchez-Asiaín Mardones is an “audit committee financial expert,” as defined in Item 16A of Form 20-F, and is an independent director under Rule 10A-3 under the Exchange Act.

Item 16.BCODE OF ETHICS

We have adopted the Employee Code of Conduct, which applies to all of our employees, directors and officers, including our principal executive officer, principal financial officer and principal accounting officer. This Code is intended to meet the definition of “code of ethics” under Item 16B of Form 20-F.

If the Code of Conduct for Grifols’ Employees is amended, or if a waiver is granted, we will disclose such amendment or waiver on our website.

169

Table of Contents

Item 16.CPRINCIPAL ACCOUNTANT FEES AND SERVICES

The table below sets forth the total fees paid to KPMG Auditores, S.L., our principal accountants, and to other member firms of the KPMG international organization, for services performed in the years 2022 and 2021, and breaks down these amounts by category of service:


	2022	2021

	(in thousands of euros)
Audit fees	7,058	5,680
Audit-related fees⁽¹⁾	408	828
Tax fees	18	9
All other fees⁽²⁾	191	107
Total	7,675	6,624

(1)	Audit-related fees are fees for assurance services or other work traditionally provided to us by external audit firms in their role as statutory auditors.

(2)	All other fees primarily relate to the review of non-financial information.

The table below sets forth the total fees paid to other auditors for services performed in the years 2022 and 2021, and breaks down these amounts by category of service:


	2022	2021

	(in thousands of euros)
Audit fees	84	88
Audit-related fees	—	—
Tax fees	—	—
All other fees	—	—
Total	84	88

Pre-approval Policies and Procedures

Subject to shareholder approval of the independent auditor in accordance with Spanish law, the Audit Committee makes recommendations to the Board regarding the appointment, retainer and replacement of the independent auditor. The Audit Committee is also directly responsible for the compensation and oversight of the work of the independent auditor. We have developed a policy regarding the engagement of professional services by our external auditor, in accordance with the Spanish Audit Law and the Sarbanes-Oxley Act of 2002. This policy generally provides that we will not engage our independent auditors to render audit or non-audit services unless the service is specifically approved in advance by the Audit Committee.

In accordance with the pre-approval policy, all audit and permitted non-audit services performed for us by our principal accountants, or any of its affiliates, were approved by the Audit Committee, which concluded that the provision of such services by the independent accountants was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions.

Item 16.DEXEMPTION FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

Item 16.EPURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

As of December 31, 2022, we held 3,944,430 Class A shares and 5,199,784 Class B in treasury. In November 2022, we purchased 129,254 Class B shares in the open market.

The Buy-back Program

On its meeting held on March 11, 2021, our Board of Directors resolved to implement a buy-back program of Grifols’ own shares (the “Buy-back Program”), in accordance with the authorization granted by Grifols’ ordinary general shareholders’ meeting held on October 9, 2020, under item 12 of its agenda.

170

Table of Contents

The Buy-back Program was carried out pursuant to the provisions of the Regulation (EU) No. 596/2014 of the European Parliament and of the Council of April 16, 2014, on market abuse regulation (the “MAR”) and Commission Delegated Regulation (EU) 2016/1052 of March 8, 2016, supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council (the “Delegated Regulation”) with regard to regulatory technical standards for the conditions applicable to buy-back programs and stabilization measures (with the exception of article 2 para. 1(a) of the Delegated Regulation) (the Delegated Regulation, together with the MAR, the “Buy-back Programme Rules”).

The maximum number of shares allowed to be acquired under the Buy-back Program was 6,875,549, in the aggregate. Specifically, 4,261,298 Class A shares and 2,614,251 Class B shares, representing approximately 1% of our share capital were allowed to be bought back. The maximum net investment allowed was €125 million. The purchase of Class A and Class B shares was to be made on a pro-rata basis, in accordance with the Articles of Association.

Grifols entrusted the execution of the Buy-back Program to an independent bank. This bank made its decisions regarding the number of shares, share price and time at which any share purchase was carried out without any influence of Grifols, in accordance with the Buy-back Program Rules. We did not exercise control over the bank’s decisions in this respect.

The Buy-back Program started on March 12, 2021, and remained in force until June 14, 2021, and the total of 3,944,430 Class A Shares and 2,419,896 Class B Shares were bought back.

Item 16.FCHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not applicable.

Item 16.GCORPORATE GOVERNANCE

Pursuant to NASDAQ Listing Rules, as a foreign private issuer, we may elect to follow our home country practice in lieu of the corporate governance requirements of the NASDAQ Listing Rule 5600 Series, with the exception of those rules that are required to be followed pursuant to the provisions of NASDAQ Listing Rule 5615(a)(3). We have elected to follow Spanish practices in lieu of the requirements of the NASDAQ Listing Rule 5600 Series to the extent permitted under NASDAQ Listing Rule 5615(a)(3). Set forth below is a summary of the significant differences between the corporate governance practices we follow under Spanish law (as in effect as of December 31, 2022) and those followed by NASDAQ-listed U.S. domestic issuers.

Corporate Governance

Under NASDAQ Listing Rules, a U.S. domestic issuer is required to establish a quorum as specified in its bylaws for any meeting of the holders of common stock, provided, however, that such quorum is not permitted to be less than 33% of the outstanding shares of voting stock. The Articles of Association provide that, on the first call of our general shareholders’ meetings, a duly constituted meeting requires a quorum of at least 25% of our subscribed share capital with voting rights, and, if a quorum is not obtained on the first call, a meeting is validly convened on the second call regardless of the share capital in attendance. However, certain major corporate actions (such as issuing additional ordinary shares, increasing or decreasing our share capital, issuing debt securities, amending the Articles of Association or approving merger transactions) require shareholder approval at a meeting at which at least 50% of our subscribed share capital with voting rights is present or represented on the first call or at least 25% of the share capital with voting rights present or represented on second call. However, when the number of shareholders attending our meeting represents less than 50% of our subscribed share capital with voting rights, resolutions on any of these major corporate actions must be adopted by the affirmative vote of at least two-thirds of the share capital present or represented at such meeting.

171

Table of Contents

In addition, all actions described in Article 6.bis of the Articles of Association, which are considered to affect the economic rights of our Class B shares, must be approved at a shareholders’ meeting by the holders of at least a majority of Class B shares.

Under NASDAQ Listing Rules, U.S. domestic issuers are required to solicit proxies, provide proxy statements for all shareholders’ meetings and provide copies of such proxy materials to NASDAQ. As a foreign private issuer, we are generally exempt from the SEC rules governing the solicitation of shareholder proxies. However, under Spanish law and per the Articles of Association, we are required to publish a calling of the meeting at least one month prior to the date set for each general shareholders’ meeting in at least: (i) the Official Gazette of the Commercial Registry or one of the local newspapers of wide circulation in the province where we are domiciled (currently Barcelona, Spain); (ii) CNMV’s website; and (iii) our website. We distribute a copy of the notice of the meeting and a form of proxy to our U.S. shareholders and also make these materials available through our website in advance of such meeting.

Under NASDAQ Listing Rules, shareholders of U.S. domestic issuers must be given the opportunity to vote on equity compensation plans and material revisions thereto, with limited exceptions set forth in NASDAQ Listing Rules, including an exception for foreign private issuers who follow the laws of their home country. Under Spanish law, equity compensation plans involving the issuance of our securities require prior shareholder approval. Additionally, equity compensation plans in which our officers and employees participate can be approved by the Board without shareholder approval. However, the establishment of equity compensation plans in which members of the Board participate must be authorized in the Articles of Association and requires the shareholders’ prior approval at a shareholders’ meeting.

Under NASDAQ Listing Rules, shareholders of U.S. domestic issuers must approve the issuance of securities when such issuance would result in a change in control of such issuer. Under Spanish law, any issuance of our securities, regardless of whether such issuance would result in a change of control, requires prior shareholder approval.

In Spain, companies with securities listed on a Spanish Stock Exchange are:

(i)recommended to follow the provisions of the CNMV Governance Code;

(ii)required by law to publish an Annual Report on Corporate Governance as well as corporate governance information on their websites;

(iii)required by law to publish an Annual Report on Remuneration of the members of the Board; and

(iv)required by law to comply with the regulations with respect to audit committees and appointment and remuneration committees set forth in the Spanish Companies Act, as amended.

Board Practices

Independence of Directors

Pursuant to NASDAQ Listing Rules, a majority of the directors of a listed U.S. company are required to be “independent,” as such term is defined by NASDAQ Listing Rules. As a foreign private issuer, we are exempt from such requirement, and Spanish law does not contain any such requirements.

Spanish law establishes the category of directors and the indispensable requirements to determine their independence. The Board Regulations, consistent with Spanish law, recognize two main categories of directors: (i) executive directors; and (ii) external directors, who can be divided into (a) proprietary directors, (b) independent directors and (c) other directors who cannot be considered proprietary or independent.

The definition of “independent director,” as set forth by Spanish law, provides that the persons listed below may not be nominated or designated as independent directors.

(i)Employees or executive directors of any Group companies, unless three or five years have elapsed, respectively, since the termination of the relationship.

172

Table of Contents

(ii)Persons that have received some payment from us or from the Group in addition to their directors’ remuneration, unless the amount involved is not significant to the director. Dividends or pension supplements received by a director for prior employment or professional services are excluded, provided that such payments are non-contingent (i.e., the paying company has no discretionary power to suspend, modify or revoke the payment).

(iii)Persons that have been, during the last three years, partners of the external auditors or the firm responsible for the audit report, whether with respect to the audit of us or any other company in the Group for those years.

(iv)Executive directors or senior officers of other companies in which any of our executive directors or senior officers is an external director.

(v)Persons that have or had, during the last year, material business relationships with us or with any other company in the Group, whether in their own name or as a significant shareholder, director or senior officer of a company that has or had such a relationship. For purposes of this paragraph (v), “business relationships” means any relationship with suppliers of goods or services, including financial, advisory and consultancy services.

(vi)Significant shareholders, executive directors or senior officers of an entity which receives or has received, during the last three years, significant donations from us or the Group. This provision does not apply to those who are merely trustees of a foundation receiving donations.

(vii)Spouses or related persons maintaining an analogous relationship or close relatives of one of our executive directors or senior officers.

(viii)Any person not proposed for appointment or renewal by the Appointments and Remuneration Committee.

(ix)Persons in any of the situations set out in (i), (v), (vi) or (vii) above with regard to a significant shareholder or a shareholder with Board representation. In the case of the family relations set out in (vii) above, the limitation applies not only in connection with the shareholder but also with our proprietary directors.

(x)Persons that have been directors for 12 consecutive years.

The proprietary directors who lose this status as a consequence of the sale of the shareholding by the shareholder they represent, can be reelected as independent directors only when such shareholder has sold the total amount of its shares.

Finally, any member of the Board that owns our shares can be considered independent, as long as the shareholding is not significant and satisfies all the above-mentioned conditions.

We have not determined whether our directors would be considered independent under NASDAQ Listing Rules, except for the three directors who are members of the Audit Committee and as such must meet NASDAQ independence criteria. As of the date of this report, six members of the Board are independent directors in accordance with the Board Regulations and the CNMV Governance Code.

Furthermore, we follow the Spanish Companies Act, which does not, unlike NASDAQ Listing Rules, require independent directors to hold meetings where only such independent directors are present.

For a detailed discussion of the composition, responsibilities and terms of our Audit Committee, see Item 6 of Part I, “Directors, Senior Management and Employees—C. Board Practices—Committees of the Board—Audit Committee.”

173

Table of Contents

Audit Committee

Responsibilities and Terms. In accordance with NASDAQ Listing Rules, our Audit Committee is in charge of the appointment, compensation, retention and oversight of the services of any registered public accounting firm engaged for the purpose of preparing and issuing any audit report, or for performing other audit reviews or related services. Notwithstanding the above, Spanish laws provide our shareholders with the authority to appoint and replace the independent auditor at a general shareholders’ meeting.

Independence of the Audit Committee. All of the members of our Audit Committee meet the independence criteria set out in NASDAQ Listing Rules. Subsequent to the entry into force of Law 31/2014 and Law 22/2015, Spanish law requires that (a) the Audit Committee be composed of external directors (the majority of them being independent and one of them being appointed due to his knowledge and experience in accounting or auditing matters) and (b) the chairperson of the Audit Committee is an independent director. For a further discussion regarding the composition of our Audit Committee, see Item 6 of Part I, “Directors, Senior Management and Employees—C. Board Practices—Committees of the Board—Audit Committee.”

Internal Audit Department. We have an internal audit department responsible for internal audit matters and ensuring the efficiency of the internal audit control process of our different business units. Our internal audit department reports directly to the Audit Committee, supporting the adequate performance of all its functions.

Appointments and Remuneration Committee

Pursuant to NASDAQ Listing Rules, foreign private issuers are exempt from the requirements regarding independent nominating and compensation committees. Foreign private issuers are permitted to follow their home country corporate governance practice in this respect.

Spanish law requires that all Spanish listed companies have an appointments and remuneration committee comprised of external directors, at least two of whom must be independent, and that the chairperson of the appointments and remuneration committee be an independent director.

Our Appointments and Remuneration Committee is comprised exclusively of external directors and is chaired by an independent director. For a detailed discussion of our Appointments and Remuneration Committee, see Item 6 of Part I, “Directors, Senior Management and Employees—C. Board Practices—Committees of the Board—Appointments and Remuneration Committee.”

Internal Code of Conduct on Matters Related to the Securities Market and Business Ethics

Under NASDAQ Listing Rules, we are required to adopt a code of business conduct and ethics applicable to all directors, officers and employees, which must be publicly available. Under Spanish law, listed companies were previously required to have an internal code of conduct on matters related to the securities markets. However, with the entry into force of Royal Legislative Decree 19/2018, of November 23, 2018, on payment services and other urgent financial measures, this obligation has been removed.

Notwithstanding the above, Grifols will continue to apply the internal code of conduct for securities markets that was approved by the Board in its meeting held on October 28, 2016, in order to prevent insider trading, misconduct, and to control possible conflicts of interest.

Additionally, the Board Regulations set out in detail the directors’ main obligations relating to conflicts of interest concerning business opportunities, use of Grifols’ assets, confidentiality and non-competition. Both the Internal Code of Conduct on Matters Related to the Securities Market and the Board Regulations are publicly available on our website, which does not form part of this annual report on Form 20-F, at www.grifols.com. Although not mandatory under Spanish laws, the Board of Grifols also approved the Code of Conduct for Grifols Employees, which is publicly available on our website, which does not form part of this annual report on Form 20-F, at www.grifols.com.

174

Table of Contents

Item 16.HMINE SAFETY DISCLOSURE

Not applicable.

Item 16.IDISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

175

Table of Contents

PART III

Item 17.FINANCIAL STATEMENTS

We have elected to provide financial statements pursuant to Item 18 of this Part III.

Item 18.FINANCIAL STATEMENTS

The audited consolidated financial statements as required under Item 18 of this Part III are attached hereto starting on page F-1 of this annual report on Form 20-F. The audit report of KPMG, our independent registered public accounting firm, is included herein preceding the audited consolidated financial statements.

Item 19.EXHIBITS

Exhibit Number		Description


1.1		Articles of Association (Estatutos) of Grifols, S.A. (English translation)*

2.1		Amendment No. 1 to Deposit Agreement dated as of March 14, 2011 among Grifols, S.A., Deutsche Bank Trust Company Americas, as depositary, and all Holders from time to time of American Depositary Shares evidenced by American Depositary Receipts issued thereunder (incorporated herein by reference to Exhibit (a)(2) to our Registration Statement on Form F-6 (File No. 333-182636 filed July 12, 2012))

2.2		Amendment No. 2 to Deposit Agreement dated as of December 30, 2020 among Grifols, S.A., Deutsche Bank Trust Company Americas, as depositary, and all Holders and Beneficial Owners of American Depositary Shares evidenced by American Depositary Receipts issued thereunder (incorporated herein by reference to Exhibit 2.2 of our Annual Report on Form 20-F (File No. 001-35193) filed on April 9, 2021)

2.3		Form of Deposit Agreement among Grifols, S.A., Deutsche Bank Trust Company Americas, as depositary, and all Holders from time to time of American Depositary Shares evidenced by American Depositary Receipts issued thereunder (incorporated herein by reference to Exhibit (a) to our Registration Statement on Form F-6 (File No. 333-172688) filed March 9, 2011)

2.4		Form of Deposit Agreement among Grifols, S.A., Deutsche Bank Trust Company Americas, as depositary, and all Holders from time to time of American Depositary Shares evidenced by American Depositary Receipts issued thereunder (incorporated herein by reference to Exhibit (a) to our Registration Statement on Form F-6 (File No. 333-159327) filed May 18, 2009)

2.5		Senior Notes Indenture, dated as of April 26, 2017, relating to the 3.20% Senior Notes due 2025, between Grifols S.A., the guarantors signatory thereto and BNY Mellon Corporate Trustee Services Limited, as trustee (incorporated herein by reference to Exhibit 2.4 of our Annual Report on Form 20-F (File No. 001-35193) filed on April 6, 2018)

		Form of 3.200% Senior Note (incorporated herein by reference to Exhibit 2.4 of our Annual Report on Form 20-F (File No. 001-35193) filed on April 6, 2018)

2.6		First Supplemental Indenture, dated as of August 6, 2021, relating to the 3.20% Senior Notes due 2025, between Grifols S.A., the guarantors signatory thereto and BNY Mellon Corporate Trustee Services Limited, as trustee (incorporated herein by reference to Exhibit 2.6 of our Annual Report on Form 20-F (File No. 001-35193) filed on April 29, 2022)

2.7		Supplemental Indenture, dated as of April 21, 2022, relating to the 3.20% Senior Notes due 2025, between Grifols S.A., Grifols Escrow Issuer, S.A.U. and BNY Mellon Corporate Trustee Services Limited, as trustee*

176

Table of Contents

Exhibit Number		Description

2.8		Supplemental Indenture, dated as of April 25, 2022, relating to the 3.20% Senior Notes due 2025, between Grifols S.A., Grifols Biotest Holdings GmbH and BNY Mellon Corporate Trustee Services Limited, as trustee*

2.9		Senior Notes Indenture, dated as of November 15, 2019, relating to the 1.625% Senior Notes due 2025 and the 2.250% Senior Notes due 2027, between Grifols S.A., the guarantors signatory thereto and BNY Mellon Corporate Trustee Services Limited, as trustee (incorporated herein by reference to Exhibit 2.6 of our Annual Report on Form 20-F (File No. 001-35193) filed on April 6, 2020)

		Form of 1.625% Senior Note due 2025 (incorporated herein by reference to Exhibit 2.6 of our Annual Report on Form 20-F (File No. 001-35193) filed on April 6, 2020)

		Form of 2.250% Senior Note due 2027 (incorporated herein by reference to Exhibit 2.6 of our Annual Report on Form 20-F (File No. 001-35193) filed on April 6, 2020)

2.10		First Supplemental Indenture, dated as of August 6, 2021, relating to the 1.625% Senior Notes due 2025 and the 2.250% Senior Notes due 2027, between Grifols S.A., the guarantors signatory thereto and BNY Mellon Corporate Trustee Services Limited, as trustee (incorporated herein by reference to Exhibit 2.8 of our Annual Report on Form 20-F (File No. 001-35193) filed on April 29, 2022)

2.11		Supplemental Indenture, dated as of April 21, 2022, relating to the 1.625% Senior Notes due 2025 and the 2.250% Senior Notes due 2027, between Grifols S.A., Grifols Escrow Issuer, S.A.U. and BNY Mellon Corporate Trustee Services Limited, as trustee*

2.12		Supplemental Indenture, dated as of April 25, 2022, relating to the 1.625% Senior Notes due 2025 and the 2.250% Senior Notes due 2027, between Grifols S.A., Grifols Biotest Holdings GmbH and BNY Mellon Corporate Trustee Services Limited, as trustee*

2.13		Senior Notes Indenture, dated as of October 5, 2021, relating to the 3.875% Senior Notes due 2028 and the 4.750% Senior Notes due 2028, between Grifols Escrow Issuer, S.A.U., Grifols S.A., the guarantors signatory thereto and BNY Mellon Corporate Trustee Services Limited, as trustee (incorporated herein by reference to Exhibit 2.9 of our Annual Report on Form 20-F (File No. 001-35193) filed on April 29, 2022)

		Form of dollar 4.750% Senior Note due 2028 (incorporated herein by reference to Exhibit 2.9 of our Annual Report on Form 20-F (File No. 001-35193) filed on April 29, 2022)

		Form of euro 3.875% Senior Note due 2028 (incorporated herein by reference to Exhibit 2.9 of our Annual Report on Form 20-F (File No. 001-35193) filed on April 29, 2022)

2.14		Supplemental Indenture, dated as of April 21, 2022, relating to the 3.875% Senior Notes due 2028 and the 4.750% Senior Notes due 2028, between Grifols S.A., Grifols Escrow Issuer, S.A.U., the guarantors party thereto and BNY Mellon Corporate Trustee Services Limited, as trustee*

2.15		Supplemental Indenture, dated as of September 28, 2022, relating to the 3.875% Senior Notes due 2028 and the 4.750% Senior Notes due 2028, between Grifols Escrow Issuer, S.A.U., Grifols Biotest Holdings GmbH and BNY Mellon Corporate Trustee Services Limited, as trustee*

4.1		Credit and Guaranty Agreement, dated as of November 15, 2019 by and among Grifols Worldwide Operations Limited, Grifols Worldwide Operations USA, Inc., Grifols, S.A., certain subsidiaries of Grifols, S.A., the lenders party thereto and Bank of America, N.A., as administrative and collateral agent (incorporated herein by reference to Exhibit 4.6 of our Annual Report on Form 20-F (File No. 001-35193) filed on April 6, 2020)

177

Table of Contents

Exhibit Number		Description

4.2		First Amendment, dated as of August 13, 2021, to the Credit and Guaranty Agreement dated as of November 15, 2019 by and among Grifols Worldwide Operations Limited, Grifols Worldwide Operations USA, Inc., Grifols, S.A., certain subsidiaries of Grifols, S.A., the lenders party thereto and Bank of America, N.A., as administrative and collateral agent (incorporated herein by reference to Exhibit 4.2 of our Annual Report on Form 20-F (File No. 001-35193) filed on April 29, 2022)

4.3		Counterpart Agreement, dated as of April 21, 2022, between Grifols Escrow Issuer, S.A.U. and Bank of America, N.A., as administrative agent and collateral agent*

4.4		Counterpart Agreement, dated as of April 25, 2022, between Tiancheng (Germany) Pharmaceutical Holdings AG (predecessor-in-interest to Grifols Biotest Holdings GmbH) and Bank of America, N.A., as administrative agent and collateral agent*

4.5		Amended and Restated Counterpart Agreement, dated as of September 28, 2022, between Grifols Biotest Holdings GmbH and Bank of America, N.A., as administrative agent and collateral agent*

4.6		Description of Securities (incorporated herein by reference to Exhibit 4.7 of our Annual Report on Form 20-F (File No. 001-35193) filed on April 9, 2021)

8.1		List of subsidiaries (see Notes 1 and 2(b) to our audited consolidated financial statements starting on page F-1 of this annual report on Form 20-F)

10.1		Plasma Supply Agreement, dated as of February 5, 2019, among Grifols, S.A., Grifols Worldwide Operations Limited, Biotest Pharmaceuticals Corporation and Haema AG (incorporated herein by reference to Exhibit 10.1 of our Annual Report on Form 20-F/A (File No. 001-35193) filed on April 23, 2019)

12.1		Principal Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

12.2		Principal Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

13.1		Principal Executive Officer and Principal Financial Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

101		Interactive Data File

*	Filed herewith.

178

Table of Contents

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

	GRIFOLS, S.A.

	By:	/s/ Victor Grifols Deu
		Name: Victor Grifols Deu
		Title: Director and Co-Chief Executive Officer

	GRIFOLS, S.A.

	By:	/s/ Raimon Grifols Roura
		Name: Raimon Grifols Roura
		Title: Director and Co-Chief Executive Officer

Date: April 18, 2023

179

GRIFOLS, S.A. AND SUBSIDIARIES

Consolidated Financial Statements

31 December 2022 and 2021

SUMMARY

●	Consolidated financial statements

	● Report of Independent Registered Public Accounting Firm (KPMG Auditores, S.L., Madrid, Spain. Audit Firm ID: 1027)	F – 3
	● Consolidated Balance Sheets	F - 6
	● Consolidated Statements of Profit and Loss	F - 8
	● Consolidated Statements of Comprehensive Income	F - 9
	● Consolidated Statements of Cash Flows	F - 10
	● Statements of Changes in Consolidated Equity	F - 11

●	Notes

	(1) Nature, Principal Activities and Subsidiaries	F - 12
	(2) Basis of Presentation	F - 12
	(3) Business Combinations and Sales	F - 19
	(4) Significant Accounting Policies	F - 32
	(5) Segment Reporting	F - 45
	(6) Goodwill	F - 47
	(7) Other Intangible Assets	F - 51
	(8) Leases	F - 53
	(9) Property, Plant and Equipment	F - 54
	(10) Equity-Accounted Investees	F - 55
	(11) Financial Assets	F - 61
	(12) Inventories	F - 62
	(13) Contract assets	F - 62
	(14) Trade and Other Receivables	F - 63
	(15) Cash and Cash Equivalents	F - 64
	(16) Equity	F - 64
	(17) Earnings per Share	F - 68
	(18) Non-Controlling Interests	F - 69
	(19) Provisions	F - 71
	(20) Financial Liabilities	F - 76
	(21) Trade and Other Payables	F - 82
	(22) Other Current Liabilities	F - 83
	(23) Net Revenues	F - 83
	(24) Personnel Expenses	F - 85
	(25) Expenses by Nature	F - 86
	(26) Finance Result	F - 87
	(27) Taxation	F - 88
	(28) Other Commitments with Third Parties and Other Contingent Liabilities	F - 92
	(29) Financial Instruments	F - 97
	(30) Balances and Transactions with Related Parties	F - 107
	(31) Subsequent events	F - 109

F-1

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Consolidated Financial Statements

31 December 2021 and 2020

SUMMARY

●	Appendices

	● Appendix I	Information on Group Companies, Associates and Others	F - 110
	● Appendix II	Operating Segments	F - 129
	● Appendix III	Changes in Other Intangible Assets	F - 131
	● Appendix IV	Movement in Rights of Use	F - 133
	● Appendix V	Movement in Property, Plant and Equipment	F - 135

F-2

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of Grifols, S.A.

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Grifols, S.A. and subsidiaries (the Company) as of 31 December 2022 and 2021, the related consolidated statements of profit and loss, comprehensive income, changes in consolidated equity, and cash flows for each of the years in the three-year period ended 31 December 2022, and the related notes and Appendix I to V (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of 31 December 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of 31 December 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended 31 December 2022, in conformity with International Financial Reporting Standard as issued by the International Accounting Standard Board and International Financial Reporting Standards as adopted by the European Union. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of 31 December 2022 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The Company acquired Biotest, AG Company during 2022, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022, Biotest, AG Company’s internal control over financial reporting associated with net total assets of Euros 1.204.795.733 (excluding goodwill and other purchase accounting adjustments subject to the Company’s internal control over financial reporting) and total revenues of Euros 361.238.624 included in the consolidated financial statements of the Company as of and for the year ended December 31, 2022. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Biotest, AG Company.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

F-3

Table of Contents

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation of the Diagnostic goodwill impairment analysis

As discussed in Notes 4 and 6 to the consolidated financial statements, the goodwill balance as of 31 December 2022 was Euros 7,011,909 thousand, of which Euros 2,773,160 thousand related to the Diagnostic cash generating unit (CGU). The Company calculates the recoverable amount of goodwill on an annual basis and whenever there is an indication that goodwill may be impaired.

We identified the evaluation of the goodwill impairment analysis for the Diagnostic CGU as a critical audit matter. Significant auditor judgment was required to evaluate the Company’s impairment test which was performed using a discounted cash flow model. The discounted cash flow model included assumptions related to sales projections for the Blood Typing Solutions (BTS) and Clinical Diagnostics (CDx) lines of business, perpetual growth rate and the discount rate. Minor changes to these assumptions, could have a significant effect on the Company’s assessment of the carrying value of the goodwill.

The primary procedures we performed to address this critical audit matter included the following:

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s goodwill impairment assessment process, including controls related to the determination of the fair value less costs of disposals/recoverable amount of the Diagnostic CGU, and the development of the sales projections of the BTS and CDx lines of business, perpetual growth rate and discount rate assumptions.

We involved a valuation professional with specialized skills and knowledge, who assisted in:

-	Evaluating the Company’s perpetual growth rate for the Diagnostic CGU, by comparing it with publicly available market data for comparable entities.

-	Evaluating the discount rate by comparing it against a discount rate range that was independently developed using publicly available market data for comparable entities.

We performed sensitivity analyses over the significant assumptions to assess their impact on the recoverable amount of the Diagnostic CGU.

F-4

Table of Contents

We challenged the sales projections for the BTS and CDx business lines, by examining publicly available data of past experiences of the evolution of similar technologies and industry reports.

We evaluated the Company’s ability to forecast sales projections for the BTS and CDx business lines by comparing the historical projections to actual results and the business plans approved by the Company’s governing bodies.

Impairment assessment of the Shanghai Raas, Ltd. equity method investment

As discussed in notes 4 and 10 to the consolidated financial statements, the Company’s equity method investment in Shanghai Raas, Ltd. (“SRAAS”) as of December 31, 2022 was EUR 1,910,428 thousand. The Company performed an impairment assessment to determine the recoverable amount of this investment based on its value in use using the discounted cash flow model.

We identified the evaluation of the impairment assessment of the equity method investment in SRAAS as a critical audit matter. A high degree of auditor judgment was required to evaluate the perpetual growth rate and discount rate used to determine the value in use of the investment. Minor changes to these assumptions could have a significant effect on the value in use of the investment.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the impairment assessment of the equity method investment in SRAAS, including controls related to the development of perpetual growth rate and discount rate assumptions.

We involved valuation professionals with specialized skills and knowledge, who assisted in:

-	Evaluating the perpetual growth rate, by comparing it with publicly available market data for comparable entities.

-	Evaluating the discount rate by comparing it against a discount rate range that was independently developed using publicly available market data for comparable entities.

We performed sensitivity analyses over the significant assumptions to assess their impact on the recoverable amount of the equity method investment in SRAAS.

KPMG Auditores, S.L.

We have served as the Company’s auditor since 1990

Barcelona, Spain

18 April 2023

F-5

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Consolidated Balance Sheet

at 31 December 2022 and 2021

(Expressed in thousands of Euros)


Assets	Reference	31/12/22	31/12/21
Goodwill	Note 6	7,011,909	6,228,901
Other intangible assets	Note 7	2,949,147	1,636,950
Rights of use	Note 8	897,552	795,657
Property, plant and equipment	Note 9	3,270,937	2,547,497
Investment in equity-accounted investees	Note 10	1,955,177	1,999,776
Non-current financial assets
Non-current financial assets measured at fair value		38,570	4,106
Non-current financial assets at amortized cost		582,175	358,161
Total non-current financial assets	Note 11	620,745	362,267
Deferred tax assets	Note 27	174,923	152,507
Total non-current assets		16,880,390	13,723,555

Inventories	Note 12	3,201,357	2,259,354
Non-current assets held for sale		4,969	—
Current contract assets	Note 13	35,154	1,939
Trade and other receivables
Trade receivables		608,688	432,197
Other receivables		73,181	55,063
Current income tax assets		56,782	12,448
Trade and other receivables	Note 14	738,651	499,708
Other current financial assets	Note 11
Current financial assets measured at fair value		12,629	3,238
Current financial assets at amortized cost		31,034	2,026,469
Total current financial assets	Note 11	43,663	2,029,707
Other current assets		81,814	64,079
Cash and cash equivalents	Note 15	547,979	655,493
Total current assets		4,653,587	5,510,280

Total assets		21,533,977	19,233,835

The accompanying notes form an integral part of the consolidated financial statements.

F-6

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Consolidated Balance Sheet

at 31 December 2022 and 2021

(Expressed in thousands of Euros)


Equity and liabilities	Reference	31/12/22	31/12/21
Share capital		119,604	119,604
Share premium		910,728	910,728
Reserves		4,326,436	4,133,388
Treasury stock		(162,220)	(164,189)
Profit for the year attributable to the Parent		208,279	188,726
Total equity		5,402,827	5,188,257

Cash Flow hedges		(438)	3,130
Other comprehensive Income		(8,084)	(869)
Translation differences		735,633	333,091
Other comprehensive expenses		727,111	335,352
Equity attributable to the Parent	Note 16	6,129,938	5,523,609
Non-controlling interests	Note 18	2,327,606	1,793,489
Total equity		8,457,544	7,317,098

Liabilities

Grants		15,123	15,036
Provisions	Note 19	110,063	24,122
Non-current financial liabilities	Note 20	9,960,562	7,768,950
Other non-current liabilities		15	333
Deferred tax liabilities	Note 27	1,034,823	633,984
Total non-current liabilities		11,120,586	8,442,425

Provisions	Note 19	56,339	31,407
Current financial liabilities	Note 20	795,686	2,438,291
Trade and other payables
Suppliers		731,918	628,992
Other payables		114,730	151,834
Current income tax liabilities		15,687	4,516
Total trade and other payables	Note 21	862,335	785,342
Other current liabilities	Note 22	241,487	219,272
Total current liabilities		1,955,847	3,474,312
Total liabilities		13,076,433	11,916,737

Total equity and liabilities		21,533,977	19,233,835

The accompanying notes form an integral part of the consolidated financial statements.

F-7

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Consolidated Statements of Profit and Loss

at 31 December 2022, 2021 and 2020

(Expressed in thousands of Euros)


	Reference	31/12/22	31/12/21	31/12/20
Continuing Operations
Net revenue	Note 5 and 23	6,063,967	4,933,118	5,340,038
Cost of sales		(3,832,437)	(2,970,522)	(3,084,873)
Gross Margin		2,231,530	1,962,596	2,255,165
Research and development		(361,140)	(354,881)	(294,216)
Selling, general and administration expenses		(1,190,423)	(1,061,508)	(985,616)
Operating Expenses		(1,551,563)	(1,416,389)	(1,279,832)

Other Income		22,235	16,302	—
Profit of equity accounted investees with similar activity to that of the Group	Note 10	103,478	32,555	20,799
Operating Result		805,680	595,064	996,132
Finance income		33,859	11,551	8,021
Finance costs		(496,524)	(277,994)	(249,639)
Change in fair value of financial instruments		11,999	246	55,703
Impairment of financial assets at amortized cost		—	—	—
Exchange differences		7,725	(11,602)	8,246
Finance result	Note 26	(442,941)	(277,799)	(177,669)
Profit/(loss) of equity accounted investees	Note 10	(1,482)	33,188	60,166
Profit before income tax from continuing operations		361,257	350,453	878,629
Income tax expense	Note 27	(90,111)	(85,126)	(169,639)
Profit after income tax from continuing operations		271,146	265,327	708,990
Consolidated profit for the year		271,146	265,327	708,990
Profit attributable to the Parent		208,279	188,726	618,546
Profit attributable to non-controlling interest	Note 18	62,867	76,601	90,444

Basic earnings per share (Euros)	Note 17	0.31	0.28	0.90
Diluted earnings per share (Euros)	Note 17	0.31	0.28	0.90

The accompanying notes form an integral part of the consolidated financial statements.

F-8

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

for the years ended 31 December 2022, 2021 and 2020

(Expressed in thousands of Euros)


	Reference	31/12/22	31/12/21	31/12/20
Consolidated profit for the year		271,146	265,327	708,990
Items for reclassification to profit or loss
Translation differences		469,551	811,683	(747,221)
Equity accounted investees / Translation differences	Note 10	30,771	(95,939)	21,916
Cash flow hedges - effective portion of changes in fair value		40,052	5,306	—
Cash flow hedges - amounts taken to profit or loss		(44,809)	(1,133)	—
Tax effect		1,189	(1,043)	—
Other		(7,215)	286	(252)
Other comprehensive income for the year, after tax		489,539	719,160	(725,557)

Total comprehensive income for the year		760,685	984,487	(16,567)
Total comprehensive income attributable to the Parent		600,038	797,762	1,408
Total comprehensive income attributable to non-controlling interests		160,647	186,725	(17,975)

The accompanying notes form an integral part of the consolidated financial statements.

F-9

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

for the years ended 31 December 2022, 2021 and 2020

(Expressed in thousands of Euros)


	Reference	31/12/22	31/12/21	31/12/20
Cash flows from operating activities
Profit before tax		361,257	350,453	878,629
Adjustments for:		780,436	574,493	409,766
Amortization and depreciation	Note 25	407,864	359,767	321,533
Other adjustments:		372,572	214,726	88,233
(Profit) / losses on equity accounted investments	Note 10	(101,996)	(65,744)	(80,965)
Impairment of assets and net provision charges		69,982	64,091	(17,148)
(Profit) / losses on disposal of fixed assets	Notes 7, 8 and 9	(1,731)	1,196	1,067
Government grants taken to income		(16,440)	(5,608)	(1,683)
Finance cost / (income)		445,027	246,189	170,535
Other adjustments		(22,270)	(25,398)	16,427
Change in operating assets and liabilities		(609,219)	(140,908)	106,283
Change in inventories		(600,245)	(157,474)	164,631
Change in trade and other receivables		(80,170)	(16,806)	(35,429)
Change in current financial assets and other current assets		(9,010)	(7,075)	(20,600)
Change in current trade and other payables		80,206	40,447	(2,319)
Other cash flows used in operating activities		(543,341)	(187,063)	(284,342)
Interest paid	Note 20d	(350,387)	(155,120)	(155,788)
Interest received		4,054	407	3,773
Income tax paid		(196,436)	(30,595)	(131,510)
Other paid		(572)	(1,755)	(817)
Net cash from/ used in operating activities		(10,867)	596,975	1,110,336
Cash flows from investing activities
Payments for investments		(2,073,480)	(876,678)	(858,387)
Group companies, associates and business units	Notes 3 and 10	(1,533,264)	(519,128)	(468,589)
Property, plant and equipment and intangible assets		(375,560)	(315,088)	(362,560)
Property, plant and equipment	Note 7	(266,491)	(247,373)	(280,154)
Intangible assets	Note 9	(109,069)	(67,715)	(82,406)
Other financial assets		(164,656)	(42,462)	(27,238)
Proceeds from the sale of investments		94,657	22,529	272
Group companies, associates and business units	Notes 3 and 10	91,373	20,399	—
Property, plant and equipment		3,284	639	272
Other financial assets		—	1,491	—
Net cash used in investing activities		(1,978,823)	(854,149)	(858,115)
Cash flows from financing activities
Proceeds from and payments for equity instruments		(3,459)	(125,703)	—
Payments for treasury stock		(3,459)	(125,703)	—
Proceeds from and payments for financial liability instruments		(177,372)	2,746,380	(243,373)
Issue		1,134,168	3,324,399	108,541
Redemption and repayment		(1,207,253)	(495,327)	(272,877)
Lease payments		(104,287)	(82,692)	(79,037)
Dividends and interest on other equity instruments		10,125	(247,498)	(103,075)
Dividends paid		(592)	(258,946)	(113,230)
Dividends received	Note 10	10,717	11,448	10,155
Other cash flows used in financing activities		(2,787)	(75,500)	(7,953)
Financing costs included in the amortized cost of the debt		—	(78,165)	(9,227)
Other amounts from / (used in) financing activities		(2,787)	2,665	1,274
Net cash from/(used in) financing activities		(173,493)	2,297,679	(354,401)
Effect of exchange rate fluctuations on cash		35,551	55,459	(60,155)
Net increase / (decrease) in cash and cash equivalents		(2,127,632)	2,095,964	(162,335)
Cash and cash equivalents at beginning of the year		2,675,611	579,647	741,982
Cash and cash equivalents at year end	Note 15	547,979	2,675,611	579,647

The accompanying notes form an integral part of the consolidated financial statements.

F-10

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Statement of Changes in Consolidated Equity

for the years ended 31 December 2022, 2021 and 2020

(Expressed in thousands of Euros)


		Attributable to shareholders of the Parent
								Accumulated other comprehensive income			Equity
					Profit attributable				Other		attributable
		Share	Share		to	Interim	Treasury	Translation	comprehensive	Cash flow	to	Non-controlling
	Reference	Capital	Premium	Reserves	Parent	dividend	Stock	differences	income	hedges	Parent	interests	Equity
Balance at 31 December 2019		119,604	910,728	3,009,599	625,146	(136,828)	(49,584)	344,357	(903)	—	4,822,119	2,023,649	6,845,768
Translation differences		—	—	—	—	—	—	(616,886)	—	—	(616,886)	(108,419)	(725,305)
Other comprehensive income		—	—	—	—	—	—	—	(252)	—	(252)	—	(252)
Other comprehensive income / (expense) for the year		—	—	—	—	—	—	(616,886)	(252)	—	(617,138)	(108,419)	(725,557)
Profit/(loss) for the year		—	—	—	618,546	—	—	—	—	—	618,546	90,444	708,990
Total comprehensive income / (expense) for the year		—	—	—	618,546	—	—	(616,886)	(252)	—	1,408	(17,975)	(16,567)
Net change in treasury stock	Note 16 (d)	—	—	—	—	—	5,850	—	—	—	5,850	—	5,850
Acquisition / Divestment of non-controlling interests	Note 16 (c)	—	—	405,698	—	—	—	—	—	—	405,698	(405,698)	—
Other changes		—	—	(13,453)	—	—	—	—	—	—	(13,453)	11,687	(1,766)

Distribution of 2019 profit:
Reserves		—	—	488,318	(488,318)	—	—	—	—	—	—	—	—
Dividends		—	—	(113,230)	—	—	—	—	—	—	(113,230)	—	(113,230)
Interim dividend		—	—	—	(136,828)	136,828	—	—	—	—	—	—	—
Operations with shareholders or owners		—	—	767,333	(625,146)	136,828	5,850	—	—	—	284,865	(394,011)	(109,146)

Balance at 31 December 2020		119,604	910,728	3,776,932	618,546	—	(43,734)	(272,529)	(1,155)	—	5,108,392	1,611,663	6,720,055
Translation differences		—	—	—	—	—	—	605,620	—	—	605,620	110,124	715,744
Cash flow hedges		—	—	—	—	—	—	—	—	3,130	3,130	—	3,130
Other comprehensive income		—	—	—	—	—	—	—	286	—	286	—	286
Other comprehensive income / (expense) for the year		—	—	—	—	—	—	605,620	286	3,130	609,036	110,124	719,160
Profit/(loss) for the year		—	—	—	188,726	—	—	—	—	—	188,726	76,601	265,327
Total comprehensive income / (expense) for the year		—	—	—	188,726	—	—	605,620	286	3,130	797,762	186,725	984,487
Net change in treasury stock	Note 16 (d)	—	—	—	—	—	(120,455)	—	—	—	(120,455)	—	(120,455)
Acquisition / Divestment of non-controlling interests	Note 16 (c)	—	—	(1,611)	—	—	—	—	—	—	(1,611)	1,522	(89)
Other changes		—	—	(8,036)	—	—	—	—	—	—	(8,036)	82	(7,954)
Distribution of 2020 profit:
Reserves		—	—	618,546	(618,546)	—	—	—	—	—	—	—	—
Dividends		—	—	(252,443)	—	—	—	—	—	—	(252,443)	(6,503)	(258,946)
Interim dividend		—	—	—	—	—	—	—	—	—	—	—	—
Operations with shareholders or owners		—	—	356,456	(618,546)	—	(120,455)	—	—	—	(382,545)	(4,899)	(387,444)

Balance at 31 December 2021		119,604	910,728	4,133,388	188,726	—	(164,189)	333,091	(869)	3,130	5,523,609	1,793,489	7,317,098


Translation differences		—	—	—	—	—	—	402,542	—	—	402,542	97,780	500,322
Cash flow hedges	Note 29	—	—	—	—	—	—	—	—	(3,568)	(3,568)	—	(3,568)
Other comprehensive income		—	—	—	—	—	—	—	(7,215)	—	(7,215)	—	(7,215)
Other comprehensive income / (expense) for the year		—	—	—	—	—	—	402,542	(7,215)	(3,568)	391,759	97,780	489,539
Profit/(loss) for the year		—	—	—	208,279	—	—	—	—	—	208,279	62,867	271,146
Total comprehensive income / (expense) for the year		—	—	—	208,279	—	—	402,542	(7,215)	(3,568)	600,038	160,647	760,685
Net change in treasury stock	Note 16 (d)	—	—	—	—	—	1,969	—	—	—	1,969	—	1,969
Acquisition / Divestment of non-controlling interests		—	—	—	—	—	—	—	—	—	—	373,468	373,468
Other changes		—	—	4,322	—	—	—	—	—	—	4,322	2	4,324

Distribution of 2021 profit:
Reserves		—	—	188,726	(188,726)	—	—	—	—	—	—	—	—
Dividends		—	—	—	—	—	—	—	—	—	—	—	—
Interim dividend		—	—	—	—	—	—	—	—	—	—	—	—
Operations with shareholders or owners		—	—	193,048	(188,726)	—	1,969	—	—	—	6,291	373,470	379,761

Balance at 31 December 2022		119,604	910,728	4,326,436	208,279	—	(162,220)	735,633	(8,084)	(438)	6,129,938	2,327,606	8,457,544

The accompanying notes form an integral part of the consolidated financial statements.

F-11

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(1) Nature, Principal Activities and Subsidiaries

Grifols, S.A. (hereinafter the Company) was incorporated with limited liability under Spanish law on 22 June 1987. Its registered and tax offices are in Jesús i Maria, 6, 08022, Barcelona. The Company’s statutory activity consists of providing corporate and business administrative, management and control services, as well as investing in assets and property. Its principal activity involves rendering administrative, management and control services to its subsidiaries.

On 17 May 2006 the Company completed its flotation on the Spanish securities market, which was conducted through the public offering of 71,000,000 ordinary shares of Euros 0.50 par value each and a share premium of Euros 3.90 per share. The total capital increase (including the share premium) amounted to Euros 312.4 million, equivalent to a price of Euros 4.40 per share.

The Company’s shares were floated on the Spanish stock exchange IBEX-35 index on 2 January 2008.

All of the Company’s shares are listed on the Barcelona, Madrid, Valencia and Bilbao securities markets and on the Spanish Automated Quotation System (SIBE/Continuous Market). On 2 June 2011, Class B non-voting shares (ADRs) were listed on the NASDAQ (USA) and on the Spanish Automated Quotation System (SIBE/Continuous Market).

Grifols, S.A. is the Parent of the subsidiaries listed in Appendix I of this note to the consolidated financial statements.

Grifols, S.A. and subsidiaries (hereinafter the Group) act on an integrated basis and under common management and their principal activity is the procurement, manufacture, preparation and sale of therapeutic products, especially hemoderivatives.

The main factory locations of the Group’s Spanish companies are in Parets del Vallés (Barcelona) and Torres de Cotilla (Murcia), while the US companies are located in Los Angeles (California), Clayton (North Carolina), Emeryville (California), and San Diego (California).

(2) Basis of Presentation

The consolidated financial statements have been prepared on the basis of the accounting records of Grifols, S.A. and of the Group companies. The consolidated financial statements for 2022 have been prepared under International Financial Reporting Standards as issued by the International Accounting Standard Board (IFRS-IASB) which for Grifols Group purposes, are identical to the standards as endorsed by the International Financial Reporting Standards as adopted by the European Union (IFRS-EU) to present fairly the consolidated equity and consolidated financial position of Grifols, S.A. and subsidiaries at 31 December 2022, as well as the consolidated results from their operations, consolidated cash flows and consolidated changes in equity for the year then ended.

At their meeting held on 13 April 2023 the Board of Directors of Grifols, S.A. authorized for issue the 2022 consolidated financial statements.

The consolidated financial statements are presented in thousands of Euros, which is the functional and presentation currency of the Parent.

These consolidated financial statements for 2022 show comparative figures for 2021 and voluntarily show figures for 2020 from the consolidated statement of profit and loss, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows and their corresponding notes thereto. For the purposes of comparing the consolidated statement of profit and loss for 2022, 2021 and 2020 and the consolidated balance sheet for 2022 and 2021, the effects of the application new standards described in note 2 must be taken into account.

The Group adopted IFRS-EU for the first time on 1 January 2004 and has been preparing its financial statements under International Financial Reporting Standards, as adopted by the European Union (IFRS-EU) as required by Spanish capital market regulations governing the presentation of financial statements by companies whose debt or own equity instruments are listed on a regulated market.

F-12

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

In accordance with the provision of section 357 of the Irish Companies Act 2014, the Company has irrevocably guaranteed all liabilities of an Irish subsidiary undertaking, Grifols Worldwide Operations Limited (Ireland) (see Appendix I), for the financial year ended 31 December 2022 as referred to in subsection 1(b) of that Act, for the purposes of enabling Grifols Worldwide Operations Limited to claim exemption from the requirement to file their own financial statements in Ireland.

(a) Relevant accounting estimates, assumptions and judgments used when applying accounting principles

The preparation of the consolidated financial statements in conformity with IFRS-IASB requires management to make judgments, estimates and assumptions that affect the application of Group accounting policies. The following notes include a summary of the relevant accounting estimates and judgments used to apply accounting policies which have the most significant effect on the amounts recognized in the consolidated financial statements.

●

Determination of the fair value of assets, liabilities and contingent liabilities in relation to business combinations. The fair value methods used by the Group are detailed in note 3

●

Assumptions used to test non-current assets and goodwill for impairment. Relevant cash generating units are tested annually for impairment. These are based on risk-adjusted future cash flows discounted using appropriate interest rates. The key assumptions used are specified in note 6. Assumptions relating to risk-adjusted future cash flows and discount rates are based on business forecasts and are therefore inherently subjective. Future events could cause a change in business forecasts, with a consequent adverse effect on the future results of the Group. To the extent considered a reasonably possible change in key assumptions could result in an impairment of goodwill, a sensitivity analysis has been disclosed to show the effect of changes to these assumptions and the effect of the cash generating unit (CGU) on the recoverable amount.

●

Evaluation of the capitalization of development costs (see note 4(d)). The key assumption is related to the estimation of sufficient future economic benefits of the projects.

●

The calculation of the income tax expense requires tax legislation interpretations in the jurisdictions where Grifols operates. The decision as to whether the tax authority will accept a given uncertain tax treatment and the expected outcome of outstanding litigation requires significant estimates and judgements. Likewise, Grifols recognizes deferred tax assets, mainly from tax credits and rights to deduct to the extent that it is probable that sufficient taxable income will be available against which temporary differences can be utilized, based on management assumptions regarding amount and payments of future taxable profits (see notes 4(q) and 27).

●

Determination of chargebacks made to certain customers in the United States (see note 4 (p)).

No changes have been made to prior year judgments relating to existing uncertainties.

The Group is also exposed to interest rate and currency risks. Refer to sensitivity analysis in note 29.

(b) Basis of consolidation

Appendix I shows details of the percentages of direct or indirect ownership of subsidiaries by the Company at 31 December 2022, 2021 and 2020, as well as the consolidation method used in each case for preparation of the accompanying consolidated financial statements.

Subsidiaries in which the Company directly or indirectly owns the majority of equity or voting rights have been fully consolidated. Associates in which the Company owns between 20% and 50% of share capital and over which it has no control but does have significant influence, have been accounted for under the equity method.

Although the Group holds 49% of the shares with voting rights of Grifols Malaysia Sdn Bhd, it controls the majority of the economic and voting rights of Grifols Malaysia Sdn Bhd through a contract with the other shareholder and a pledge on its shares. As a consequence, it has been fully consolidated.

F-13

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Grifols (Thailand) Ltd. has two classes of shares and it grants the majority of voting rights to the class of shares held by the Group. As a consequence, it has been fully consolidated.

Changes in associates and jointly controlled entities are detailed in note 10.

Changes in subsidiaries

In 2022:

●

Albimmune, S.L.

On 13 January 2022, Grifols, through its wholly owned subsidiary Grifols Innovation and New Technologies Limited, Inc., reached an agreement to acquire 51% of the shares of Albimmune, S.L. for a total amount of Euros 3,000.

●

VCN Biosciences, S.L.

On 10 March 2022, Grifols, together with the other shareholders, reached an agreement to sell one hundred percent of the issued and outstanding shares of VCN Bioscience, S.L. for US Dollars 7,700 thousand.

As a result of this divestment, the Group has recognized income of Euros 7,557 thousand in the statement of profit and.

●

Biomat USA, Inc.

Effective 1 April 2022, Biomat USA Inc. and Talecris Plasma Resources, Inc. entered into a merger agreement, and the resulting company was Biomat USA, Inc.

●

Biotest AG and Grifols Biotest Holdings GmbH

On 25 April 2022, and once all regulatory approvals had been obtained, Grifols completed the acquisition of 70.18% of the share capital of Biotest AG and the entire share capital of Tiancheng (Germany) Pharmaceutical Holdings AG, whose current corporate name is Grifols Biotest Holdings GmbH, for Euros 1,460,853 thousand (see note 3).

●

Access Biologicals Inc.

●

Grifols México, S.A. de C.V.

Effective 15 December 2022, Grifols México, S.A. de C.V. and Logística Grifols, S.A. de C.V. entered into a merger agreement, and the resulting company was Grifols México, S.A. de C.V.

F-14

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

In 2021:

●

Grifols Pyrenees Research Center, SL

Grifols, through its wholly-owned subsidiary Grifols Innovation and New Technologies Limited (“GIANT”), owns 80% of the company Grifols Pyrenees Research Center, SL, which was created to develop and manage a new research center specializing in immunology, which will enhance the knowledge of the human immune system and develop new immunological therapies. The contribution made by the Group amounted to Euros 2 thousand.

The remaining 20% belongs to the Government of Andorra, through its economic promotion office Andorra Desenvolupament i Inversió.

●

Gigagen, Inc.

With the acquisition of 100% of the shareholding, Grifols obtained control over Gigagen and, therefore, it is considered a group company and started to be consolidated under the full integration method. Until that date, the previous shareholding of 43.96% was accounted for by the equity method. The difference between the fair value of the previous shareholding and the value recognized in books was Euros 34,525 thousand (US Dollars 41,758 thousand), recognizing a gain for this amount “Profit/Loss of equity accounted investees” in the statement of profit and loss (see note 3).

●

Prometic Plasma Resources, Inc.

On 31 December 2021, Grifols, through its wholly owned subsidiary Grifols Canada Therapeutics Inc., reached an agreement to acquire all of the shares of Prometic Plasma Resources Inc. for a total consideration of US Dollars 8,805 thousand (see note 3).

●

Grifols Escrow Issuer, S.A.

On August 26, 2021, Grifols, S.A. acquired all of the shares of Grifols Escrow Issuer, S.A. for a total consideration of US Dollars 60 thousand.

●

Araclon Biotech, SL

In October 2021 Araclon Biotech, S.L carried out a share capital increases of Euros 10 million. After the latter capital increase Grifols’ interest rises to 75.85%.

●

Haema Plasma Kft.

On 1 February 2021, Scranton Plasma B.V. acquired 100% of the shares of Haema Plasma Kft. (see note 3 (b)).

The following companies were incorporated during 2021 and were included in the consolidated Grifols Group.

●

Grifols Middle East&Africa, LLC

●

Grifols Bio North America, LLC

●

Biomat Holdco, LLC

●

Biomat Newco, Corp

F-15

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

In 2020:

●

Grifols Diagnostic Solutions, Inc.

On 30 March 2020, Grifols closed a share exchange agreement with Shanghai RAAS Blood Products Co. Ltd. (hereinafter SRAAS), through which Grifols delivered 90 shares of its US subsidiary Grifols Diagnostic Solutions Inc. (hereinafter GDS) (representing 45% of the economic rights and 40% of the voting rights), and in exchange received 1,766 million SRAAS shares (representing 26.2% of the share capital). Thus, Grifols became the largest shareholder of SRAAS, while maintaining operational, political and economic control of GDS (see note 10).

●

Plasmavita Healthcare GmbH

On 14 April 2020, Grifols made a contribution of Euros 10 million in cash that was recognized as a shareholder contribution in Plasmavita. The equity shares of 50% has remained unaffected after the contribution. However, in assessing the existence of control due to the new shareholders’ agreement signed on this date, it can be concluded that Grifols has control over Plasmavita and, therefore, it is considered part of the group and it has been fully consolidated (see note 3).

●

Alkahest, Inc.

On 2 September 2020, the Group reached an agreement with the shareholders of Alkahest Inc. (“Alkahest”) to acquire 57.55% of Alkahest’s shares for a total price of US Dollars 146 million, on a debt free basis (see note 3).

●

Green Cross

On 20 July 2020, Grifols executed share purchase arrangements with the South Korean-based GC Pharma (Group) (“GC Pharma”) and other investors for the purchase of a plasma fractionation facility and two purification facilities located in the city of Montreal, Canada, (the “Factories”) and 11 plasma collection centers located in the United States (“the “Donation Centers”), for a total price of Euros 387,917 thousands (US Dollars 457,160 thousand), on a debt free basis. Grifols will not require supplementary financing for this transaction. On 1 October 2020, the transaction was closed (see note 3).

●

VCN Biosciences, S.L.

On 2 December 2020, VCN Biosciences, S.L. carried out a share capital increase of Euros 5 million. Consequently, the Group interest rises from 81.34% to 86.83%.

(c)	Amendments to IFRS in 2022, 2021 and 2020

In accordance with IFRS, the following should be noted in connection with the scope of application of IFRS and the preparation of these consolidated financial statements of the Group.

F-16

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Effective in 2020


		Mandatory application for annual periods
		beginning on or after:
Standards		EU effective date	IASB effective date
IAS 1 IAS 8	Definition of Material (issued on 31 October 2018)	1 January 2020	1 January 2020

Various	Amendments to Reference to the Conceptual Framework in IFRS Standards (issued on 29 March 2018)	1 January 2020	1 January 2020

IFRS 3	Amendment to IFRS 3 Business Combination (issued on 22 October 2018)	1 January 2020	1 January 2020
IFRS 9
IAS 39	Interest rate Benchmark Reform (issued on 26 September 2019)	1 January 2020	1 January 2020
IFRS 7
IFRS 16	Covid 19 - Related Rent concessions (issued on 28 May 2020)	1 June 2020	1 June 2020

Effective in 2021


		Mandatory application for annual periods
		beginning on or after
Standards		EU effective date		IASB effective date
IFRS 4	Amendments to IFRS 4 Insurance Contracts – deferral of IFRS 9 (issued on 25 June 2020)		1 January 2021		1 January 2021
Various	Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase 2 (issued on 27 August 2020)		1 January 2021		1 January 2021
IFRS 16	Amendment to IFRS 16 Leases Covid 19-Related Rent Concessions beyond 30 June 2021 (issued on 31 March 2021)		1 April 2021		1 April 2021

Effective in 2022

The following standards published by the IASB and the IFRS Interpretations Committee and adopted by the European Union for application in Europe came into force in 2022 and, therefore, have been taken into account in the preparation of these consolidated financial statements:


		Mandatory application for annual periods
		beginning on or after:
Standards		EU effective date	IASB effective date
	Amendments issued 14 May 2020 to:
	– IFRS 3 Business Combinations: references to the Conceptual Framework;
Various	– IAS 16 Property, Plant and Equipment: Proceeds before Intended Use;	1 January 2022	1 January 2022
	– IAS 37 Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts — Cost of Fulfilling a Contract ; and
	– Annual Improvements to IFRSs 2018-2020: IFRS 1, IFRS 9, IFRS 16 and IAS 41.

The application of these standards and interpretations has had no significant impact on these consolidated financial statements.

F-17

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Standards issued but not effective in 2022

At the date these consolidated financial statements were authorized for issue, the following IFRS and amendments have been published by the European Union but their application is not mandatory until the future periods indicated below:


		Mandatory application for annual periods
		beginning on or after:
Standards		EU effective date	IASB effective date
IAS 1	Amendments to IAS 1 Presentation of Financial Statements: - Classification of Liabilities as Current or Non-current Date (issued on 23 January 2020); - Classification of Liabilities as Current or Non-current - Deferral of Effective Date (issued on 15 July 2020); and - Non-current Liabilities with Covenants (issued on 31 October 2022)	pending	1 January 2024
IFRS 16	Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (issued on 22 September 2022)	pending	1 January 2024
IFRS 17	Insurance Contracts (issued on 18 May 2017); including Amendments to IFRS 17 (issued on 25 June 2020)	1 January 2023	1 January 2023
IAS 8	Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estitmates (issued on 12 February 2021)	1 January 2023	1 January 2023
IAS 1	Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies (issued on 12 February 2021)	1 January 2023	1 January 2023
IAS 12	Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (issued on 7 May 2021)	1 January 2023	1 January 2023
IFRS 17	Amendments to IFRS 17 Isurance contracts: Initial Application of IFRS 17 and IFRS 9 - Comparative Information (issued on 9 December 2021)	1 January 2023	1 January 2023

The Group has not applied any of these standards or interpretations in advance of their effective date.

The application of these standards and interpretations has had no significant impact on these consolidated financial statements.

F-18

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(3) Business Combinations and Divestments

2022

a)Prometic Plasma Resources, Inc.

On 31 December 2021, Grifols, through its wholly owned subsidiary Grifols Canada Therapeutics, Inc., acquired all the shares of Prometic Plasma Resources Inc. for a total of Canadian Dollars 11,127 thousand (Euros 7,757 thousand).

Aggregate details of the cost of the business combination, the provisional fair value of the net assets acquired and the goodwill at the acquisition date are shown below:


	Reference	Thousands of Euros	Canadian Dollars
Cost of the business combination
Consideration paid		7,757	11,127
Total consideration paid		7,757	11,127

Fair value of net assets acquired		4,933	7,075

Goodwill (excess of the cost of the business combination over the fair value of net assets acquired)	Note 6	2,824	4,052

The amounts determined at the acquisition date of the assets, liabilities and contingent liabilities acquired are as follows:


	Fair Value
		Thousands of Canadian
	Thousands of Euros	Dollars
Other Intangible Assets	551	791
Rights of Use	238	341
Property, plant and equipment	36	51
Inventories	71	102
Trade and other reeceivables	4,603	6,602

Other current assets	9	13

Cash and cash equivalents	32	46

Total Assets	5,540	7,946

Non-current financial liabilities	(32)	(46)
Current financial liabilities	(264)	(379)
Trade and other payables	(311)	(446)
Total Liabilities	(607)	(871)
Total net assets acquired	4,933	7,075

The resulting goodwill has been allocated to the Biopharma segment and includes the donor database, licenses and workforce.

b)Haema Plasma Kft.

On 1 February 2021, Scranton Plasma B.V. acquired 100% of the shares of Haema Plasma Kft. Scranton is a shareholder of Grifols.

F-19

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

On 1 February 2021 the Group signed a call option on the shares of Haema Plasma kft, exercisable by the Group only 12 months after signing and with an expiry of 48 months from the date on which the option becomes exercisable. The option price was set at thirteen times EBITDA minus net debt.

The Group has potential voting rights arising from the option to purchase the shareholding and these are substantive, based on:

●

A call option for Grifols which gives it the irrevocable and exclusive right (not an obligation) to acquire the Haema Plasma Kft shareholding at any time after 1 February 2022.

●

Grifols is committed to providing support services in the business of collecting, processing and distributing plasma from the donation centres. There is also a Plasma Supply Agreement whereby the plasma produced by these entities will be used almost entirely to cover Grifols’ needs. There is no sales exclusivity.

●

There are no shareholder agreements that provide for relevant decisions to be approved in a manner other than by majority vote.

The above are indicators of the power that Grifols acquires over this entity, considering that the call option is likely to be exercised and Grifols will have the financial capacity to carry it out.

Consequently, at the time the option becomes exercisable, the option empowers Grifols, even though it has not yet been exercised, and Haema Plasma Kft. is therefore included in Grifols’ consolidated financial statements from 2022.

Aggregate details of the cost of the business combination, the provisional fair value of the net assets acquired and the provisional goodwill at the acquisition date are shown below:


		Thousands of	Thousands of
	Reference	Euros	Hungarian Forint
Call option price		16,948	6,228,796
Total consideration		16,948	6,228,796

Fair value of net assets acquired		2,209	812,371

Goodwill (excess of the cost of the business combination over the fair value of net assets acquired)	Note 6	14,739	5,416,425

F-20

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The provisional amounts determined at the date of consolidation of the assets, liabilities and contingent liabilities acquired are as follows:


	Fair Value
		Thousands of Hungarian
	Thousands of Euros	Forint
Other Intangible assets	37	13,620
Rights of Use	3,421	1,257,286
Property, plant and equipment	1,301	478,222
Other non-current assets	302	110,810
Deferred tax assets	13	4,742

Inventories	2,784	1,022,926

Trade and other receivables	357	131,821
Other current assets	252	92,769
Cash and cash equivalents	3,343	1,228,356

Total Assets	11,810	4,340,552

Provisions	(169)	(61,946)
Non-current financial liabilities	(2,517)	(925,074)
Current financial liabilities	(4,281)	(1,573,216)
Trade and other payables	(2,100)	(771,861)
Other current liabilities	(534)	(196,084)
Total Liabilities and contingent liabilities	(9,601)	(3,528,181)
Total net assets acquired	2,209	812,371

The resulting goodwill has been allocated to the Biopharma segment and includes the donor database, licences and workforce.

c)VCN Biosciences, S.L.

As a result of this divestment, the Group has recognized an income of Euros 7,557 thousand under “other income” in the statement of profit and loss. VCN’s net assets were derecognised from the consolidated group as of the indicated date.

d)Biotest AG

On 25 April 2022, and once all regulatory approvals were obtained, Grifols completed the acquisition of 70.18% of the share capital of Biotest AG for Euros 1,460,853 thousand. The transaction was structured as follows:

●

Grifols acquired the entire share capital of Tiancheng (Germany) Pharmaceutical Holdings AG for Euros 1,090,518 thousand. This amount included a loan from Tiancheng (Germany) Pharmaceutical Holdings AG, whose current corporate name is Grifols Biotest Holdings GmbH, to Biotest AG of Euros 317,876 thousand. The Biotest shares were valued at Euros 43.00 per ordinary share (17,783,776 shares) and Euros 37.00 per preference share (214,581 shares).

●

At the same time as the transaction, Grifols closed the voluntary takeover bid to all shareholders, which involved the payment of 370,335 thousand of euros for 1,435,657 ordinary shares at 43.00 euros per share and 8,340,577 preference shares at 37.00 euros per share.

F-21

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The investment in Biotest will significantly strengthen Grifols’ capabilities, including its scientific and technical capabilities, helping to strengthen the availability of plasma medicines, its commercial presence and its R&D pipeline. With the opening of 2 new centers, Biotest now has 28 plasma donation centers in Europe.

Aggregate details of the cost of the business combination, the provisional fair value of the net assets acquired and the provisional goodwill at the acquisition date are shown below:


	Reference	Thousands of Euros
Cost of the business combination
Consideration paid		1,460,853
Total consideration paid		1,460,853

Fair value of net assets acquired		1,157,229

Goodwill (excess of the cost of the business combination over the fair value of net assets acquired)	Note 6	303,624

The resulting goodwill has been allocated to the Biopharma segment.

The provisional amounts determined at the date of consolidation of the assets, liabilities and contingent liabilities acquired are as follows:


		Fair Value
		Thousands of Euros
Other Intangible Assets		1,172,582
Rights of Use		25,256
Property, plant and equipment		545,667
Other non-current assets		13,969
Deferred Tax Assets		9,109
Inventories		259,316

Contract Assets		35,319

Trade and other receivables		88,249
Other current assets		25,644
Cash and cash equivalents		94,662

Total assets		2,269,773

Non-controlling interests		(356,386)
Non-current provisions		(120,298)
Non-current financial liabilities		(182,761)
Other non-current liabilities		(9)
Deferred tax liabilities		(347,192)
Current Provisions		(18,239)
Current financial liabilities		(35,052)
Trade and other payables		(40,489)
Other current liabilities		(12,118)
Total Liabilities and contingent liabilities		(1,112,544)
Total net assets acquired		1,157,229

F-22

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

As part of the purchase price allocation, the company has determined that identifiable intangible assets are the research and development projects in progress, the current product portfolio as well as certain distribution agreements.

The fair value of intangible assets has been estimated using an income approach and the projected cash flows have been discounted using rates between 8.6% and 11%. The cash flows have been based on estimates used to establish the transaction price and the discount rates applied have been compared with reference to the implied rate of return of the transaction model and the weighted average cost of capital.

The fair value of research and development projects in progress involving plasma therapies (Fibrinogen, IgM and IgG) has been estimated in accordance with an income approach based on the Multiple-Period Excess Earnings Method for the application of which the results of such projects have been adjusted for the probability of success according to the clinical phase of the project at the date of the transaction.

The current product portfolio comprises regulatory approvals, trademarks, patient relationships and physician relationships related to products currently marketed by Biotest. The distribution agreements identified as intangible assets relate to the distribution of certain products in different geographic regions. In both cases, the fair value has been determined using the Multiple-Period Excess Earnings Method.

Research and development projects in progress, the current product portfolio and distribution agreements are amortized on a straight-line basis over an average period of 20, 30 and 7.5 years, respectively.

If the acquisition had taken place as of January 1, 2022, the revenue would have changed by Euros 154,846 thousand and the group result by Euros (15,434) thousand.

The Group has recognized under operating expenses in the consolidated statement of profit and loss an amount of Euros 23,600 thousand of transaction costs.

e)Access Biologicals Inc.

On 15 June 2022, Grifols, through its wholly owned subsidiary Chiquito Acquisition Corp., reached an agreement to acquire all the shares of Access Biologicals LLC, exercising the call option for the remaining 51% for a total of US Dollars 142 million. With the acquisition of 100% of the stake, Grifols obtains control over Access Biologicals LLC and is therefore considered a group company and consolidated under the full consolidation method. The difference between the fair value of the previous shareholding and the recognised carrying amount is Euros 72,984 thousand (US Dollars 77,209 thousand), and a gain of this amount is recognised under “ Profit/(loss) of equity accounted investees “ in the statement of profit and loss (see note 10).

Access Biologicals’ core business is the collection and manufacture of an extensive portfolio of biological products. Combined with a closed materials sourcing process, it provides support services for different markets such as in-vitro diagnostics, biopharmaceuticals, cell culture and diagnostic research and development.

F-23

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Aggregate details of the cost of the business combination, the provisional fair value of the net assets acquired and the provisional goodwill at the acquisition date are shown below:


			Thousands of US
	Reference	Thousands of Euros	Dollars
Cost of the business combination
First share purchase		48,218	51,010
Second share purchase (present value)		134,742	142,544
Total consideration paid		182,960	193,554


Gain on the previously held investment		72,984	77,209
Accumulated gain for equity method before acquisition date		8,256	8,735
Step-up of the previously held investment		81,240	85,944

Fair value of net assets acquired		(83,366)	(88,193)

Goodwill (excess of the cost of the business combination over the fair value of net assets acquired)	Note 6	180,834	191,305

The provisional amounts determined at the date of consolidation of the assets, liabilities and contingent liabilities acquired are as follows:


	Fair Value
	Thousands of	Thousands of US
	Euros	Dollars
Other Intangible Assets	82,080	86,832
Property, plant and equipment	2,589	2,739
Other non-current assets	75	79
Inventories	16,836	17,811
Trade and other receivables	7,522	7,958
Other current assets	1,529	1,618
Cash and cash equivalents	2,987	3,160


Total Assets	113,618	120,197

Trade and other payables	(7,249)	(7,669)
Deferred tax liabilities	(22,981)	(24,312)
Other non-current liabilities	(22)	(23)

Total Liabilities and contingent liabilities	(30,252)	(32,004)
Total net assets acquired	83,366	88,193

The resulting provisional goodwill has been allocated to the Bio-Supplies segment.

As part of the purchase price allocation, the Company has determined that identifiable intangible assets are customer relationships.

F-24

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Customer relationships have been valued using the Multiple-Period Excess Earnings Method, for the application of which a discount rate of 8.1% has been considered and a decline rate resulting in an average useful life of 14 years. The cash flows have been based on estimates used to establish the transaction price and the discount rate applied has been compared with reference to the implied rate of return of the transaction model and the weighted average cost of capital. The excess of the purchase price over the estimated fair value of the net assets acquired has been recorded as goodwill. The factors contributing to its recognition have been the acquired workforce as well as the expected benefits from the combination of the Group’s activities.

If the acquisition had taken place as of January 1, 2022, the revenue would have changed by Euros 4,402 thousand and the group result by Euros 1,819 thousand.

The Group has recognized under operating expenses in the consolidated statement of profit and loss an amount of Euros 486 thousand of transaction costs.

f)Goetech, LLC

In July 2022, Grifols closed an agreement to sell in cash substantially all of the assets of its subsidiary Goetech LLC, whose trade name is MedKeeper, for a US Dollars 91,635 thousand Enterprise Value (Euros 90,002 thousand). MedKeeper develops and markets innovative mobile and cloud-based IT applications aimed at helping hospital pharmacies boost productivity, process safety and compliance.

As a consequence of this divestment, the Group has recognized an income of Euros 23,106 thousand in the profit and loss account. Goetech’s net assets were derecognized from the consolidated group as of the indicated date.

2021

●

Gigagen, Inc.

GigaGen is a U.S. biotechnology company specializing in the discovery and early development of recombinant biotherapeutic drugs. GigaGen’s research focuses on the discovery of new biological treatments based on antibodies derived from millions of donor-derived immune system cells.

With the acquisition of 100% of the shareholding, Grifols obtained control over Gigagen and, therefore, it was considered a group company and is consolidated under the full consolidation method. Until that date, the previous shareholding of 43.96% was accounted for using the equity method. The difference between the fair value of the previous shareholding and the value recognized in books was Euros 34,525 thousand (US Dollars 41,758 thousand), recognizing a profit for this amount under “Profit/(loss) of equity accounted investees “ in the statement of profit and loss.

From the total amount agreed, as of 31 December 2021, an amount of Euros 38,201 thousand was paid in cash and Euros 36,591 thousand were payable. This amount was presented under “Current financial liabilities” in the balance sheet and it was paid in March 2022.

The Group recognized an amount of Euros 404 thousand of transaction costs under operating expenses in the consolidated statement of profit and loss.

Aggregate details of the cost of the business combination, the fair value of the net assets acquired and the goodwill at the acquisition date are shown below:

F-25

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements


		Thousands of	Thousands of
	Reference	Euros	US Dollars
Consideration paid
First share purchase		38,201	46,203
Second share purchase (present value)		35,227	42,608
Total consideration paid		73,428	88,811

Fair value of the previous investment in the company		50,792	61,434

Fair value of net assets acquired		18,760	22,691
Goodwill (excess of the cost of the business combination over the fair value of net assets acquired)	Note 6	105,460	127,554

The amounts determined at the acquisition date of the assets, liabilities and contingent liabilities acquired are as follows:


		Fair value
		Thousands of	Thousands of
	Reference	Euros	US Dollars
Development costs in progress	Note 7	24,027	29,061
Property, plant and equipment	Note 7	1,168	1,413
Non-current financial assets		151	183
Trade and other receivables		56	68
Other current assets		2,368	2,864
Cash and cash equivalents		12,389	14,985

Total assets		40,159	48,574
Non-current liabilities		(17,792)	(21,520)
Current liabilities		(3,607)	(4,363)
Total liabilities and contingent liabilities		(21,399)	(25,883)
Total net assets identified		18,760	22,691

The fair value of the R&D projects in progress was estimated based on market approach of comparable transactions.

The resulting goodwill was allocated to the others segment and includes the specialized R&D workforce and the portfolio of future early stage products.

The acquired business generated consolidated results for the Group during the period from the acquisition date to year-end in the amount of Euros 4,350 thousand.

If the acquisition had occurred as of 1 January 2021, the Group’s net revenues and results would not have changed significantly.

●	BPL Plasma, Inc.

On 28 February 2021, Biomat USA, Inc. the Group’s American subsidiary, acquired 25 plasma donation centers in the United States from BPL Plasma, Inc. a subsidiary of Bio Products Laboratory Holdings Limited, for US Dollars 385 million.

The transaction received the necessary regulatory approvals and was financed with its own resources, without issuing debt.

Grifols will obtain approximately one million liters of plasma per year from these centers.

The Group recognized transaction costs of Euros 2,764 thousand in operating expenses in the consolidated statement of profit and loss.

F-26

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Aggregate details of the cost of the business combination, the definitive fair value of the net assets acquired and the definitive goodwill at the acquisition date are shown below:


	Reference	Thousands of Euros	Thousands of US Dollars
Consideration paid
First payment made		9,921	12,000
Cash paid at the transaction closing date		308,016	372,548
Total consideration paid		317,937	384,548
Fair value of net assets acquired		15,039	18,190
Goodwill (excess of the cost of the business combination over the fair value of net assets acquired)	Note 6	302,898	366,358

The amounts determined at the acquisition date of the assets, liabilities and contingent liabilities acquired are as follows:


		Fair value
	Reference	Thousands of Euros	Thousands of US Dollars
Property, plant and equipment	Note 9	14,406	17,424
Non-current financial assets		85	103
Inventories		557	674
Total assets		15,048	18,201
Current liabilities		(9)	(11)
Total liabilities and contingent liabilities		(9)	(11)
Total net assets identified		15,039	18,190

The resulting goodwill was allocated to the Biopharma segment and included the donor database, licenses and workforce.

●	Acquisition of plasma centers from Kedplasma, LLC.

On 31 March 2021, Biomat USA, Inc., the Group’s American subsidiary, acquired 7 plasma donation centers in the United States from the company Kedplasma, LLC for US Dollars 55.2 million. All the centers acquired are licensed by the U.S. Food and Drug Administration (FDA) and the European authorities.

Grifols will have immediate access to the plasma obtained at these centers, which obtain approximately 240,000 liters of plasma per year.

The transaction received the necessary regulatory approvals and was financed with equity without issuing debt.

The Group recognized transaction costs of Euros 625 thousand in operating expenses in the consolidated statement of profit and loss.

Aggregate details of the cost of the business combination, the definitive fair value of the net assets acquired and the definitive goodwill at the acquisition date are shown below:


	Reference	Thousands of Euros	Thousands of US Dollars
Consideration paid		45,638	55,200
Total consideration paid		45,638	55,200
Fair value of net assets acquired		2,692	3,256
Goodwill (excess of the cost of the business combination over the fair value of net assets acquired)	Note 6	42,946	51,944

F-27

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The amounts determined at the acquisition date of the assets, liabilities and contingent liabilities acquired are as follows:


		Fair value
	Reference	Thousands of Euros	Thousands of US Dollars
Property, plant and equipment	Note 9	2,448	2,961
Inventories		244	295
Total assets		2,692	3,256
Total net assets identified		2,692	3,256

The resulting goodwill was allocated to the Biopharma segment and included the donor database, licenses and workforce.

●	Prometic Plasma Resources, Inc.

On 31 December 2021, Grifols, through its wholly owned subsidiary Grifols Canada Therapeutics Inc., acquired all of the shares of Prometic Plasma Resources Inc. for a total consideration of US Dollars 8,805 thousand (see note 2).

The purchase price has been assigned provisionally to Goodwill in the consolidated balance sheet, considering that the initial accounting has not been completed at the end of the reporting period.

2020

(a) Plasmavita

In November 2017, Grifols established Plasmavita Healthcare GmbH (hereinafter Plasmavita), a joint venture between Grifols (50%) and two other partners (50%) for the construction and operation of 10 plasma donor centers in Germany.

On 14 April 2020, Grifols made a contribution of Euros 10 million in cash that was recognized as a shareholder contribution in Plasmavita. The equity share of 50% has remained unchanged after the contribution. However, in assessing the existence of control due to new shareholder agreement signed on this date, the following was concluded:

Grifols has a casting vote for any decision, determination and approval, with respect to the annual budget of Plasmavita and the distribution of dividends. Grifols has the power to make key business decisions.

Grifols is involved in the decision-making related to exposure or rights to variable returns from the investee.

Grifols has the casting vote to distribute dividends.

Considering the above, it was concluded that Grifols has control over Plasmavita and, therefore, it is considered part of the group and it has been fully consolidated.

Details of the aggregate business combination cost, the fair value of the net assets acquired and the goodwill at the acquisition date are provided below:


	Reference	Thousands of Euros
Consideration paid
Cash paid		10,000
Total consideration paid		10,000
Fair value of the previous investment in the business		10,674
Fair value of net assets acquired		21,374
Non-controlling interests		(10,687)
Goodwill (excess of the cost of the business combination over the fair value of net assets acquired)	Note 6	9,987

F-28

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The amounts determined at the date of acquisition of assets, liabilities and contingent liabilities acquired are as follows:


		Fair Value
	Reference	Thousands of Euros
Intangible assets	Note 7	177
Rights of use	Note 8	7,856
Property, plant and equipment	Note 9	6,506
Investment in group companies		9,548
Non-current financial assets		5,017
Inventories		1,114
Trade and other receivables		811
Other current assets		333
Cash and cash equivalents		359
Total assets		31,721
Deferred tax liabilities		(1,364)
Other non-current liabilites		(7,575)
Current liabilities		(1,408)
Total liabilities and contingent liabilities		(10,347)
Total net assets acquired		21,374

The resulting goodwill was allocated to the Biopharma segment, and it included the donor data base, licenses and workforce.

If the acquisition had taken place on 1 January 2020, the net amount of the Group´s revenue and profit would not have differed significantly. The revenue and consolidated profit generated by Plasmavita between the acquisition date and 31 December 2020 are not significant for the Group.

The difference between the fair value of the previous investment and the book value amounted to Euros 5,357 thousand and has been recognized as income under “Profit/(loss) of equity accounted investees with similar activity to that of the Group” in the consolidated statement of profit and loss. The minority interest’s share of the contribution made amounts to Euros 5 million and has been recognized as a loss under the same line item.

(b) Alkahest, Inc.

On 2 September 2020, Grifols signed an agreement to acquire all the shares of Alkahest Inc. (“Alkahest”) for a total amount of Euros 123,425 thousand (US Dollars 146,000 thousand), which was subject to approval by regulatory authorities. As part of the agreement, the Group had:

●

Grifols has a casting vote for any decision, determination and approval, with respect to the annual budget of Alkahest and the distribution of dividends. Grifols has the power to decide on key business decisions.

●

Grifols is involved in the decision-making related to exposure or rights to variable returns from the investee.

Considering the above, it was concluded that Grifols has control over Alkahest and, therefore, it is considered part of the group and it has been fully consolidated. Until that date, the previous 42.45% stake in Alkahest was recorded using the equity method. The difference between the fair value of the previous investment and the book value amounted to Euros 86,743 thousand (US Dollars 102,552 thousand) and has been recognized as income under “Profit/(loss) of equity accounted investees” in the consolidated statement of profit and loss.

On 15 October 2020, and as a result of the aforementioned share purchase agreement, Grifols proceeded to acquire 57.55% of the capital of Alkahest. After the transaction, the Group owns 100% of the company’s share capital. Given that Grifols already had control of Alkahest, the transaction has been recorded as an agreement with the non-controlling interest, which has meant the recognition of a liability at amortized cost of Euros 121,149 thousand (US Dollars 143,706 thousand) and a decrease in “Non-

F-29

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

controlling interests” in the amount of Euros 121,486 thousand (US Dollars 143,307 thousand), net of recorded losses and “Other reserves “in the amount of Euros 337 thousand (US Dollars 399 thousand).

At 31 December 2020, the amount payable totaled Euros 100,492 thousand and was presented under the line item “Current financial liabilities”. This amount was settled on 1 February 2021(see note 20).

Details of the aggregate business combination cost, the fair value of the net assets acquired and the goodwill at the acquisition date are provided below:


		Thousands of US
	Thousands of Euros	Dollars
Cost of the business combination
First repurchase of non-controlling interests	18,797	22,235
Second repurchase of non-controlling interests (present value)	104,628	123,765
Total business combination cost	123,425	146,000

Fair value of the previous investment in the business	91,023	107,671
Fair value of net assets acquired	140,076	165,696
Goodwill (excess of the cost of the business combination over the fair value of net assets acquired)	74,372	87,975

The amounts determined at the date of acquisition of assets, liabilities and contingent liabilities acquired are as follows:


	Fair Value
		Thousands of
	Thousands of Euros	US Dollars
Other Intangible Assets	265,617	314,198
Property, plant and equipement	4,970	5,879
Other non-current assets	178	210
Trade and other receivables	2,552	3,019
Other current assets	1,609	1,904
Cash and cash equivalents	7,563	8,946
Total assets	282,489	334,156
Non-current financial liabilities	(42,269)	(50,000)
Deferred tax liabilities	(74,372)	(87,975)
Other non-current liabilities	(19,644)	(23,237)
Trade and other payables	(1,863)	(2,204)
Other current liabilities	(4,265)	(5,044)
Total Liabilities	(142,413)	(168,460)
Fair value of net assets acquired	140,076	165,696

The resulting goodwill was allocated to the Others segment and it mainly includes the workforce.

The fair value of research and clinical development projects in progress that include products for neurodegenerative disorders, neuromuscular and ophthalmologic diseases have been estimated according to an income approach based on risk-adjusted discounted free cash flows.

Had the acquisition taken place on 1 January 2020, the net amount of the Group´s revenue would not have changed significantly, and the net profit would have decreased by Euros 30,045 thousand. The profit of Alkahest between the acquisition date and 31 December 2020 amounted to Euros (12,317) thousand. The amount of net revenue has not changed significantly.

F-30

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

On 20 July 2020, Grifols signed share purchase arrangements with the South Korean based GC Pharma Group and other investors for the acquisition of a plasma fractionation facility and two purification facilities located in the city of Montreal, Canada, and 11 plasma collection centers located in the United States, for a total consideration of Euros 387,917 thousand (US Dollars 457,160 thousand), on a debt free basis. On 1 October 2020, the transaction was closed.

The consideration was paid with Grifols’ own cash resources, and at the close of the Transaction certain equity, working capital and cash targets were guaranteed.

The factories are currently in the process of obtaining the required licenses and regulatory approvals from the competent health authorities for the manufacturing of plasma-derived products. When licensed and approved, Grifols will become the only commercial manufacturer of plasma products in Canada, with a fractionation capacity of 1.5 M liters.

Grifols plans to be ready to manufacture IVIG and Albumin at the factories to be able to supply the Canadian market starting in 2023.

The collection centers achieved a collection volume of 350,000 liters of plasma in 2019.

Upon the execution of the Transaction, and by means of a plasma supply agreement, the Group has also committed to supplying certain output of plasma arising out of the collection centers to GC Pharma for a 24-month period.

Details of the aggregate business combination cost, the fair value of the net assets acquired and the goodwill at the acquisition date are provided below:


		Thousands of US
	Thousands of Euros	Dollars
Consideration paid
Cash paid	387,917	457,160
Total consideration paid	387,917	457,160
Fair value of net assets acquired	194,227	228,897
Goodwill (excess of the cost of the business combination over the fair value of net assets acquired)	193,690	228,263

F-31

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The amounts determined at the date of acquisition of assets, liabilities and contingent liabilities are as follows:


	Fair Value
	Thousands of Euros	Thousands of US Dollars
Other Intangible Assets	2,877	3,390
Rights of Use	11,642	13,720
Property, plant and equipement	158,148	186,377
Deferred tax assets	33,081	38,986
Other non current assets	122	144
Inventories	2,999	3,534
Trade and other receivables	3,484	4,106
Other current assets	943	1,111
Cash and cash equivalents	6,053	7,133
Total assets	219,349	258,501
Non-current financial liabilities	(13,150)	(15,497)
Current financial liabilities	(797)	(939)
Trade and other payables	(11,175)	(13,168)
Total Liabilities	(25,122)	(29,604)
Fair value of net assets acquired	194,227	228,897

The resulting goodwill was allocated to the Bioscience segment, and it includes the donor data base, current licenses and future authorizations and workforce

Had the acquisition taken place on 1 January 2020, the net amount of the Group´s revenue would have increased by Euros 31,197 thousand and the net profit would have decreased by Euros 32,423 thousand. The revenue and profit of Green Cross between the acquisition date and 31 December 2020 amounted to Euros 4,625 thousand and Euros (5,023) thousand respectively.

(4)Significant Accounting Policies

(a)

Consolidation

Dependents

Subsidiaries are considered to be those over which the Group exercises control. A subsidiary is controlled when, due to its involvement in it, it is exposed, or has the right, to variable returns and has the capacity to influence such returns through the power it exercises over it.

The income, expenses and cash flows of subsidiaries are included in the consolidated financial statements from the date of acquisition, which is the date on which the Group effectively obtains control of the subsidiaries. Subsidiaries are excluded from consolidation from the date on which control is lost.

Transactions and balances with Group companies and unrealized gains or losses have been eliminated in consolidation.

The accounting policies of the subsidiaries have been adapted to the Group’s accounting policies for transactions and other events that, being similar, have occurred in similar circumstances.

The financial statements of the subsidiaries used in the consolidation process are as of the same reporting date and for the same period as those of the Parent Company.

Appendix I includes information on the subsidiaries included in the Group’s consolidation.

Business combinations

F-32

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The acquisition method is used to account for the acquisition of subsidiaries in a business combination. The acquisition date is the date on which the Group obtains control of the acquired business.

The acquisition cost of a subsidiary is determined at the acquisition date and comprises (i) the fair values of assets delivered, (ii) liabilities incurred or assumed, (iii) equity instruments issued, (iv) the fair value of any asset or liability resulting from a contingent consideration arrangement and (v) the fair value of any previous interest in the subsidiary. Any disbursement that is not part of the exchange for the acquired business is excluded.

Acquisition-related costs are expensed as incurred.

The Group recognizes identifiable assets acquired and liabilities and contingent liabilities assumed at fair value at the acquisition date. Assets held for sale, liabilities for employee compensation, transactions with payments based on equity instruments, deferred tax assets and liabilities and right-of-use assets and liabilities and lease liabilities are excluded from the application of this criterion.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquired subsidiary and the acquisition-date fair value of any previous interest in the acquired subsidiary over the fair value of the identifiable net assets is recorded as goodwill. If these amounts are less than the fair value of the identifiable net assets of the acquired subsidiary, the difference is recognized in profit or loss as a bargain purchase.

When settlement of any part of the cash consideration is deferred, amounts payable in the future are discounted to their present value at the date of exchange.

Contingent consideration is classified as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured at fair value with changes in fair value recognized in profit or loss.

When the business combination could only be determined on a provisional basis, the identifiable net assets are initially recorded at their provisional values, recognizing the adjustments made during the measurement period as if they had been known at the acquisition date, restating comparative figures for the previous year, if applicable. The adjustments to the provisional values only incorporate information relating to facts and circumstances that existed at the acquisition date and which, had they been known, would have affected the amounts recognized at that date. The measurement period should not exceed twelve months from the date of acquisition.

If the business combination is carried out in stages, the acquisition-date carrying amount of the previously held equity interest of the acquiree is remeasured at its acquisition-date fair value, with any resulting gain or loss recognized in profit or loss.

Non-controlling interests

Non-controlling interests in subsidiaries are recorded at the acquisition date at their percentage of interest in the fair value of the identifiable net assets, without considering potential voting rights. In addition, the profit or loss for the year and each component of other comprehensive income allocated to the non-controlling interest is allocated in proportion to its percentage of ownership.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit and loss, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated balance sheet, respectively.

The increase and reduction of non-controlling interests in a subsidiary while maintaining control is recognized as an equity transaction in reserves.

Associated

Associated entities are those over which the Group exercises significant influence, understood as the capacity to intervene in financial and operating decisions, without the existence of control or joint control.

F-33

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Investments in associates are initially recognized at acquisition cost, including costs directly attributable to the acquisition and any active or passive contingent consideration that depends on future events or the fulfillment of certain conditions.

Subsequently, investments in associates are accounted for by the equity method from the date on which significant influence is exercised until the date on which the Company can no longer justify the existence of significant influence.

The excess between the cost of the investment and the Group’s share of the fair values of the identifiable net assets is recorded as goodwill, which is included in the carrying amount of the investment. The shortfall, once the amounts of the cost of the investment and the identification and valuation of the net assets of the associate have been evaluated, is recorded as income in the determination of the investor’s share in the results of the associate for the year in which it was acquired.

The accounting policies of the associated companies have been subject to time and valuation homogenization in the same terms as those referred to in the subsidiaries.

The Group’s share in the profits or losses of associates obtained from the date of acquisition is recorded as an increase or decrease in the value of the investments with a credit or debit to “ Profit/(loss) of equity accounted investees “. Likewise, the Group’s share in the other comprehensive income of associates obtained since the acquisition date is recorded as an increase or decrease in the value of the investments in associates, with the balancing entry by nature being recognized in other comprehensive income. Dividend distributions are recorded as decreases in the value of investments. To determine the Group’s share of profits or losses, including impairment losses recognized by associates, income or expenses arising from the acquisition method are considered.

When the Group’s share of losses on an equity accounted investment equals or exceeds its interest in the entity, the Group does not recognize additional losses unless it has incurred obligations or made payments on behalf of the other entity.

The Group’s share in the profits or losses of associates and changes in equity is determined on the basis of the ownership interest at year-end, without considering the possible exercise or conversion of potential voting rights. However, the Group’s share is determined considering the possible exercise of potential voting rights and other derivative financial instruments that, in substance, grant current access to the economic benefits associated with ownership interests, i.e. the right to participate in future dividends and changes in the value of associates.

After applying the equity method, the Group assesses whether there is objective evidence of impairment of the net investment in the associate. The impairment calculation is determined by comparing the carrying amount of the net investment in the associate with its recoverable amount, where recoverable amount is the higher of value in use or fair value less costs of disposal. In this regard, the value in use is calculated based on the Group’s share of the present value of the estimated cash flows from ordinary activities and the amounts that could result from the final disposal of the associate. The recoverable amount of the investment in an associate is assessed in relation to each associate (see note 10), unless it does not constitute a cash-generating unit (CGU). Impairment losses are not allocated to goodwill or other assets implicit in the investment in associates arising from the application of the acquisition method. In subsequent years, reversals of the value of investments are recognized against income, to the extent that there is an increase in the recoverable value. Impairment losses are presented separately from the Group’s share in the results of associates.

Appendix I includes information on subsidiaries and associates included in the Group’s consolidation.

Joint agreements

Joint arrangements are those in which there is a contractual agreement to share control over an economic activity, so that decisions on the relevant activities require the unanimous consent of the Group and the other operators. Investments in joint arrangements are classified as joint operations or joint ventures, depending on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement.

Interests in joint ventures are accounted for by the equity method, after initially being recognized at cost in the consolidated balance sheet.

F-34

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(b)Transactions and balances in foreign currencies

Transactions in foreign currencies are translated to the functional currency using the average exchange rate of the previous month provided that it does not differ significantly from the exchange rate at the date of the transaction. Foreign currency gains and losses resulting from the settlement of these transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at closing exchange rates are recognized in profit or loss except when there are qualified cash flow hedges and qualified net investment hedges that are deferred to equity.

The effect of exchange rate changes on cash and cash equivalents denominated in foreign currencies is presented separately in the statement of cash flows as “Effect of exchange rate changes on cash”.

The translation of foreign operations whose functional currency is not that of a hyperinflationary country has been made by applying the following criteria:

●

Assets and liabilities, including goodwill and adjustments to net assets arising from the acquisition of businesses, are translated at the closing exchange rate at each balance sheet date;

●

Revenues and expenses are translated at the average exchange rate of the previous month, as an approximation of the exchange rate at the date of the transaction;

●

Translation differences resulting from the application of the above criteria are recognized in other comprehensive income.

(c)Goodwill

After initial recognition, goodwill is recorded at cost, less any accumulated impairment loss, which is not reversible.

Goodwill is not amortized, but is tested for impairment on an annual basis or more frequently in the event that events indicative of a potential loss in the value of the asset have been identified. For these purposes, goodwill resulting from business combinations is allocated to each of the cash generating units (CGUs) or groups of CGUs that are expected to benefit from the synergies of the combination and the criteria referred to in note 6 are applied. CGUs or groups of CGUs are identified at the lowest level that goodwill is controlled for the purpose of internal management (Note 6).

(d)Intangible assets

Intangible assets are recorded at cost (acquisition or development) or at fair value when acquired in a business combination, less accumulated amortization and any accumulated impairment losses.

Any expenses incurred during the research phase of projects are recognized as an expense when incurred.

Costs related to development activities for internally generated intangible assets are capitalized to the extent that:

●

The Group has technical studies that justify the viability of the production process;

●

There is a commitment by the Group to complete production of the asset so that it is in a condition for sale or internal use;

●

The asset will generate sufficient economic benefits;

●

The Group has the technical and financial resources to complete the development of the asset and has developed budget control and analytical accounting systems that make it possible to monitor the budgeted costs, the modifications introduced and the costs actually charged to the various projects.

F-35

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

These development costs are recorded as income under the heading “self-constructed non-current assets” in the consolidated statement of profit and loss when they are capitalized. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period.

The Group amortizes its intangible assets with finite useful lives by distributing the cost of the assets on a straight-line basis according to the following criteria:


	Amortisation method	Rates
Development expenses	Straight line	10%
Concessions, patents, licenses, trademarks and similar	Straight line	4% - 20%
Computer software	Straight line	33%
Currently marketed products	Straight line	3% - 10%

Intangible assets with indefinite useful lives are not subject to amortization but are tested for impairment at least once a year.

The Group reviews the useful lives of intangible assets at the end of each year. Changes in the initially established criteria are recognized as a change in estimate.

(e)Property, plant and equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and, if applicable, accumulated impairment losses.

Cost includes, among other items, direct labor costs used in the construction of the asset and a portion of the costs indirectly attributable to the asset. These two items are recorded as income under the heading “Self-constructed non-current assets” in the consolidated statement of profit and loss, when capitalized.

Finance costs incurred that are directly attributable to the acquisition or construction of the asset until the asset is ready for use also form part of the cost.

Likewise, expansion or improvement costs are included as an increase in the value of the asset when they represent an increase in its capacity or an extension of its useful life. However, maintenance costs are recognized in income when incurred.

Depreciation of property, plant and equipment is provided on a straight-line basis over the estimated useful lives of the assets, less their residual value.

Depreciation of property, plant and equipment is determined by applying the following criteria:


	Depreciation method	Rates
Buildings	Straight line	1%-3	%
Other property, technical equipment and machinery	Straight line	4%-10	%
Other property, plant and equipment	Straight line	7%-33	%

The Group reviews the residual value, useful life and depreciation method of property, plant and equipment at the end of each reporting period. Changes in the initially established criteria are recognized as a change in estimate.

(f)

Leases

Lessee

The determination of whether a contract is or contains a lease is based on an analysis of the contractual arrangement and requires an assessment of whether the lessee has the right to control the use of the identified asset and to obtain all of the economic benefits from the use of the asset throughout the lease term.

F-36

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The lease term is the non-cancelable period considering the initial term of each contract unless the Group has a unilateral extension or termination option and there is reasonable certainty that such option will be exercised in which case the corresponding extension or early termination term will be considered.

In lease contracts where the Group acts as lessee, it is recognized at the lease commencement date (i.e. the date on which the underlying asset is available for use):

●

A liability for the present value of the installments to be paid over the lease term, using the incremental borrowing or implicit interest rate as the discount rate when expressly indicated in the contract and,

●

A right-of-use asset representing the right to use the underlying leased asset during the term of the lease.

Lease liabilities include fixed lease payments less any incentives, as well as variable payments that depend on an index or interest rate known at the date of inception of the lease. Also included is the exercise price of the purchase option when the lessee is reasonably certain of exercising it. After initial recognition, the liability is increased by the interest on the lease liability and reduced by the payments made. The liability is also remeasured if there are changes in the amounts payable and the lease terms. Payments included in the lease payments corresponding to maintenance, electricity, water, gas, security, cleaning, among others, are not part of the lease liability and are recognized as an expense.

The incremental borrowing rate is determined taking into account: (i) geographic areas, (ii) financial term, (iii) lease term, (iv) risk-free rate as reference rate and (v) financial spread.

Rights-of-use assets are measured at cost, less accumulated amortization and impairment losses (if any) and adjusted as a result of the remeasurement of the lease liability. Cost includes the amount of the initial valuation of the lease liability, as well as any amounts previously paid to the lessor prior to or at the commencement date of the lease less any incentives received by the lessor and estimated costs to decommission the leased asset. Amortization of rights of use is provided on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term.

The Group applies the exception to recognition for those contracts where the lease term is 12 months or less or where the value of the leased asset (individually) when new, is less than US Dollars 5,000 or its equivalent in another currency. Consequently, in these cases, the amounts accrued will be recognized as an expense during the lease term.

Lessor

When the Group acts as lessor, it classifies contracts between operating and finance leases. Leases in which the Group acts as lessor while retaining a significant portion of the risks and rewards incidental to ownership of the leased asset are treated as operating leases. Otherwise, the lease is treated as a finance lease.

(g)Impairment of non-financial assets

Goodwill and intangible assets that have an indefinite useful life are not subject to amortization and are tested for impairment annually, or more frequently in the event of events or changes in circumstances that indicate that they may be impaired.

Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

When the recoverable amount is less than the carrying amount of the asset, an impairment loss is recognized in the consolidated statement of profit and loss for the difference between both amounts.

The recoverable amount is the higher of an asset’s fair value less costs of disposal and the estimated value in use based on discounted future cash flows expected to arise from the use of the asset. The estimate of value in use considers expectations about possible

F-37

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

variations in the amount or timing of cash flows, the time value of money, the price to be paid for bearing the uncertainty related to the asset and other factors that affect the valuation of future cash flows related to the asset.

For the purpose of assessing impairment losses, assets are grouped at the lowest levels for which there are separately identifiable cash inflows that are largely independent of the cash inflows of other assets or groups of assets (cash-generating units). Impairment losses on non-financial assets (other than goodwill) are reviewed for possible reversal at the end of each reporting period.

Losses related to the impairment of CGUs are initially allocated to reduce, if applicable, the value of goodwill attributed to the CGU and then to the other assets of the CGU, pro rata based on the carrying amount of each asset, with the limit for each asset being the higher of its fair value less costs of disposal, its value in use and zero.

Impairment losses related to goodwill are not reversible.

(h)Financial instruments

Financial assets

Ranking

The classification of financial assets is determined based on the characteristics of the contractual cash flows of those assets and the business model that represents how the financial assets are managed to achieve a particular business objective. In determining whether the cash flows are obtained through the receipt of contractual cash flows from the assets, consideration is given to the frequency, value and timing of sales in prior periods, the reasons for those sales and expectations regarding future sales activity. This information provides indicative data on how the Group’s stated objective regarding the management of financial assets is achieved and, more specifically, how cash flows are obtained.

Therefore, financial assets are classified according to the following valuation categories based on the business model and are only reclassified when, and only when their business model for managing them changes:

a)Financial assets at amortized cost: includes financial assets, including those admitted to trading on an organized market, for which the Group holds the investment under a business model whose objective is to hold financial assets to receive cash flows from the execution of the contract, and the contractual terms of the asset give rise, at specified dates, to cash flows that are solely collections of principal and interest on the principal amount outstanding.

In general, the following are included in this category:

i) Trade receivables: arising from the sale of goods or the rendering of services for trade transactions with deferred payment, and

ii) Receivables from non-trade operations: these arise from loans or credits granted by the Group whose collections are of a determined or determinable amount.

b)Financial assets at fair value through other comprehensive income: this category includes financial assets whose contractual conditions give rise, at specified dates, to cash flows that are solely collections of principal and interest on the principal amount outstanding, and are held within the framework of a business model whose objective is achieved by obtaining contractual cash flows and selling financial assets. Investments in equity instruments irrevocably designated by the Group at the time of their initial recognition are also included in this category, provided that they are not held for trading and are not to be valued at cost.

c)Financial assets at fair value through profit or loss: includes financial assets held for trading and those financial assets that have not been classified in any of the above categories. Also included in this category are financial assets that are optionally designated by the Group at the time of initial recognition, which otherwise would have been included in another category, because such designation eliminates or significantly reduces a valuation inconsistency or accounting missmatch that would otherwise arise.

F-38

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Initial measurement

Financial assets are recorded, in general terms, initially at the fair value of the consideration given plus directly attributable transaction costs. However, transaction costs directly attributable to assets recorded at fair value through profit or loss are recognized in the statement of profit and loss for the year.

Trade accounts receivable are initially recognized at the amount of the consideration that is unconditional, unless they contain significant financial components, in which case they are recognized at fair value.

Subsequent measurement

Financial assets at amortized cost are recorded by applying this valuation criterion, charging to the statement of profit and loss the interest accrued by applying the effective interest rate method.

Financial assets included in the fair value category through other comprehensive income are recorded at fair value, without deducting any transaction costs that may be incurred in their disposal. Changes in fair value are recorded directly in equity until the financial asset is derecognized or impaired, at which time the amount so recognized is taken to the statement of profit and loss.

Financial assets at fair value through profit or loss are measured at fair value and the result of changes in fair value is recorded in the statement of profit and loss.

Disposals of financial assets

Financial assets are derecognized when the rights to receive cash flows related to them have expired or have been transferred and the Group has substantially transferred the risks and rewards of ownership.

Impairment

The Group assesses, on a prospective basis, the expected credit losses associated with its debt instruments carried at amortized cost and at fair value through other comprehensive income The methodology applied for impairment depends on whether there has been a significant increase in credit risk.

For trade receivables, the Group applies the simplified approach permitted by IFRS 9 which requires expected losses to be recorded from the initial recognition of the receivables, so that the Group determines expected credit losses as a probability-weighted estimate of such losses over the expected life of the financial instrument.

The practical solution used is the use of a provisioning matrix based on segmentation into homogeneous asset groups, applying historical information on default rates for these groups and applying reasonable information on future economic conditions.

Default rates are calculated based on current default experience over the past year, as it is a very dynamic market, and are adjusted for differences between current and historical economic conditions and considering projected information, which is reasonably available.

Financial liabilities

Financial liabilities assumed or incurred by the Group are classified in the following measurement categories:

(a)Financial liabilities at amortized cost: are those debits and payables of the Group that have arisen from the purchase of goods and services for trading operations, or those which, without having a commercial origin, not being derivative instruments, arise from loan or credit operations received by the Group.

F-39

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

These liabilities are initially measured at the fair value of the consideration received, adjusted for directly attributable transaction costs. Any difference between the amount received and its repayment value is recognized in the consolidated statement of profit and loss during the repayment period of the debt, applying the effective interest rate method.

(b)Financial liabilities at fair value through profit or loss.

Liability derivative financial instruments are measured at fair value, following the same criteria as those corresponding to financial assets at fair value through profit or loss described in the preceding section.

The Group derecognizes financial liabilities when the obligations that generated them are extinguished.

Assets and liabilities are presented separately in the balance sheet and are only presented at their net amount when the Group has the enforceable right to offset the recognized amounts and, in addition, intends to settle the amounts on a net basis or to realize the asset and settle the liability simultaneously.

Equity instruments

The Group holds financial assets, mainly equity instruments, which are measured at fair value. When Group management has opted to present gains and losses in the fair value of equity investments in other comprehensive income, after initial recognition, the equity instruments are measured at fair value, recognizing the gain or loss in other comprehensive income. Amounts recognized in other comprehensive income are not reclassified to profit or loss, but are reclassified to reserves when the instruments are derecognized. Dividends from such investments continue to be recognized in profit or loss as other income when the Group’s right to receive payments is established.

(i)Derivative financial instruments and hedging activities

Financial derivatives are recognized at fair value at the date of the contract and at each year-end. The method for recognizing the gain or loss depends on whether the derivative is classified as a hedging instrument, and if so, the nature of the hedged asset.

For accounting purposes, they are classified as follows:

(i) Derivatives qualifying for cash flow hedge accounting

Hedging effectiveness

Hedge effectiveness is determined at the inception of the hedging relationship, and through periodic prospective effectiveness assessments to ensure that there is an economic relationship between the hedged item and the hedging instrument.

In derivatives such as the euro/dollar cross-currency swap, the Group uses the hypothetical derivative method to assess effectiveness. This hypothetical derivative is constructed without the inclusion of credit risk and currency spread. Under the hypothetical derivative method, the cumulative change in the fair value of the actual currency swap, excluding the effect of the currency spread, will be compared to the cumulative change in the fair value of the hypothetical swap. Therefore, the hypothetical derivative is constructed as a cross-currency swap with fixed euro payment, fixed U.S. dollar receipt without the inclusion of credit risk and foreign currency spread and with a fair value of zero at the date of designation.

Recognition

At the inception of the hedging relationship, the Group documents the economic relationship between the hedging instruments and the hedged items, including whether changes in cash flows of the hedging instruments are expected to offset changes in cash flows of the hedged items. The Group documents its risk management objective and strategy for undertaking its hedging transactions.

F-40

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The effective portion of changes in the fair value of derivatives designated and classified as cash flow hedges is recognized in equity under “Cash flow hedge reserve”. In the case of cross-currency swaps, the currency spread of the hedging relationship is excluded and treated as hedging costs in equity. The gain or loss corresponding to the ineffective portion is recognized immediately in profit or loss for the year under the heading “Change in fair value of financial instruments”.

Amounts accumulated in the hedging reserve included in shareholders’ equity are transferred to profit or loss when the hedged item affects profit or loss or when ineffectiveness is identified.

The fair value of derivatives designated as hedges is detailed in note 29. Movements in the hedging reserve included in shareholders’ equity are shown in note 16 (c).

(ii) Derivatives that do not qualify for hedge accounting

When derivatives do not meet the criteria for hedge accounting, they are classified as “held for trading”. Changes in fair value are recognized immediately in the consolidated statement of profit and loss.

(j)Own equity instruments

The acquisition of treasury stock is recorded at acquisition cost, reducing equity until the time of disposal. Gains or losses on the disposal of treasury stock are recorded under “Reserves” in the consolidated balance sheet. Transaction costs related to own equity instruments, net of taxes, are recorded as a reduction of equity.

(k)Inventories

Inventories are stated at the lower of weighted average cost or net realizable value. Net realizable value is the estimated selling price in the normal course of business, less the estimated costs to complete production and those necessary to make the sale. For raw materials and other supplies it is the replacement cost.

The cost includes direct materials, direct labor and an appropriate proportion of indirect variable and fixed costs, the latter being allocated on the basis of the normal working capacity of the means of production. The cost of plasma stocks includes the amount delivered to donors, or the amount invoiced by the seller when purchased from third parties, as well as the cost of products and devices used in the collection process, and rental and storage costs. The costs of purchased inventories are determined after deducting discounts and rebates when it is probable that the conditions determining their concession will be met. Indirect costs such as management and administrative overheads are recognized as expenses in the period in which they are incurred.

Any previously recognized inventory impairment adjustment is reversed against income under “Cost of sales” when the circumstances that caused the impairment no longer exist or when there is clear evidence of an increase in the net realizable value as a result of a change in economic circumstances. The reversal of the write-down is limited to the lower of cost and the new net realizable value of inventories.

(l)Cash and cash equivalents

Cash and cash equivalents include cash on hand, demand deposits with banks, other short-term highly liquid investments with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(m)Government grants

Government grants are recognized when there is reasonable assurance that the conditions attached to the grant will be met and that the grant will be collected.

F-41

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Non-refundable capital grants are recorded on the liability side of the consolidated balance sheet at the original amount granted and are recognized in the consolidated statement of profit and loss as the related assets financed are depreciated.

Grants received as compensation for expenses or losses already incurred or for the purpose of providing immediate financial support not related to future expenses are credited to the consolidated statement of profit and loss.

Financial liabilities that incorporate implicit aid in the form of the application of below-market interest rates are recognized initially at fair value. The difference between this value, adjusted where appropriate for the costs of issuing the financial liability and the amount received, is recorded as a government grant based on the nature of the grant.

(n)Employee benefits

(i) Defined contribution plans

The Group records the contributions to be made to defined contribution plans as they accrue. The amount of accrued contributions is recorded under “Personnel expenses” in the consolidated statement of profit and loss in the year to which the contribution relates.

(ii) Defined benefit plans

The liability recognized corresponds to the present value of the obligation at the consolidated balance sheet date less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the obligation is determined by discounting the estimated future cash flows at interest rates of bonds denominated in the currency in which the benefits will be paid and with maturities similar to those of the related obligations. Actuarial gains and losses arising from changes in actuarial assumptions or differences between assumptions and reality are recognized in equity under “Other comprehensive income”. Past service costs are recognized in the consolidated statement of profit and loss under “Personnel expenses”.

(iii) Termination benefits

Termination benefits are recognized on the earlier of the following dates: (a) when the Group can no longer withdraw the offer or (b) when the Group recognizes costs of a restructuring within the scope of IAS 37 and this results in the payment of termination benefits.

(iv) Short-term employee benefits

The Group recognizes the expected cost of short-term compensation in the form of paid leave whose rights accrue as employees render the services that entitle them to receive it. If the leave is not accrued, the expense is recognized as the leave is taken.

The Group recognizes the expected cost of profit sharing or employee incentive plans when there is a present legal or constructive obligation as a result of past events and a reliable estimate can be made of the value of the obligation.

(v) Share-based payments

The Group grants share-based payments to certain employees who are rendering services to the company.

The fair value of services received is estimated by estimating the fair value of the shares granted at the grant date. Since the equity instruments granted become vested when the employees complete a certain period of service, the services received are recognized during the vesting period in the statement of profit and loss as an expense for the year with a corresponding credit to equity. The amount recognized corresponds to the amount that will be settled once the agreed conditions are met and will not be reviewed or revalued during the vesting period, as the commitment is settled in shares. If an employee resigns from his/her position before the end of the vesting period, he/she will only receive the agreed incentive in shares, being the Company’s choice its settlement in cash or through equity instruments.

F-42

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(o)Provisions

Provisions are recognized when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognized for future operating losses.

The amount of the provision corresponds to the best estimate at the closing date of the disbursements required to settle the present obligation, after taking into account the risks and uncertainties related to the provision and, when significant, the financial effect of discounting, provided that the disbursements to be made in each period can be reliably determined.

(p)Revenue recognition

Revenue from the sale of goods or services is recognized at an amount that reflects the consideration the Group expects to be entitled to receive in exchange for transferring goods or services to a customer, at the time the customer obtains control of the goods or services rendered, i.e. when the customer has the ability to direct the use of the goods or services. The consideration committed in a contract with a customer may include fixed amounts, variable amounts, or both. The amount of consideration may vary due to discounts, rebates, incentives, performance bonuses, penalties or other similar items. Contingent consideration is only included in the transaction price when it is highly probable that the amount of revenue recognized will not be subject to significant future reversals. Revenue is presented net of value added tax and any other amounts or taxes, which in substance correspond to amounts received on behalf of third parties.

(i)Sales of goods

Revenue from the sale of goods is recognized when the Group satisfies the performance obligation by transferring the committed goods to the customer. An asset is transferred when the customer obtains control of that asset. In assessing the satisfaction of the performance obligation, the Group considers the following indicators of the transfer of control, which include, but are not limited to, the following:

●

The Group has a present right to payment for the asset.

●

The customer has the legal right to the asset

●

The Group has transferred the physical possession of the asset

●

Customer has the significant risks and rewards of asset ownership

●

The customer has accepted the asset

The nature of the assets that the Group undertakes to transfer are mainly: sale of goods, sale of equipment, toll contracts, maintenance and technical service contracts, training, licenses, royalties and know-how and engineering contracts, among others.

In determining the transaction price, it is assumed that the goods and/or services are transferred in accordance with the terms of the contract. The consideration committed to a customer may include fixed amounts, variable amounts, or both. The price should be estimated taking into account the effect of variable consideration (as applicable) for returns, chargebacks/volume discounts or other incentives, provided that the same is highly probable.

The Group participates in state Medicaid programs in the United States. Provision for Medicaid rebates is recorded at the time the sale is recorded in an amount equal to the estimated Medicaid rebate claims attributable to such sale. The Group determines the estimate of the accrual for Medicaid rebates primarily based on historical Medicaid rebate experience, legal interpretations of applicable laws related to the Medicaid program and any new information regarding changes in Medicaid program guidelines and regulations that could affect the amount of the rebates. The Group considers pending Medicaid claims, Medicaid payments, and

F-43

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

inventory levels in the distribution channel and adjusts the provision periodically to reflect actual experience. Although rebate payments typically occur with a lag of one to two quarters, adjustments for actual experience have not been material.

As is standard industry practice, certain customers have entered into contracts with the Group for purchases that are eligible for a price discount based on a minimum purchase quantity, volume discounts or cash discounts. These discounts are accounted for as a reduction in sales and accounts receivable in the same month in which the sales are invoiced based on a combination of the customer’s actual purchase data and historical experience when the customer’s actual purchase data is later known.

In the United States, the Group enters into agreements with certain customers to establish contractual prices for products, which these entities purchase from the authorized wholesaler or distributor (collectively, “wholesalers”) of their choice. Accordingly, when these entities purchase the products from the wholesalers at the contractual price which is lower than the price charged by the Group to the wholesaler, the Group provides the wholesaler with a credit known as a chargeback. The Group accounts for the accrual of chargebacks at the time of sale. The allowance account for chargebacks is based on the Group’s estimate of the wholesaler’s inventory levels and the expected direct sale of the products by the wholesalers at the contract price based on past chargeback history and other factors. The Group periodically monitors factors influencing the provision for rebates and applies adjustments when it believes that actual rebates may differ from the established allowance accounts. These adjustments occur over a relatively short period of time. As these refunds are typically settled within 30 to 45 days of sale, adjustments for actual amounts have not been material.

The amount at closing for the remaining discounts is settled in the following year within 90 to 180 days depending on the type of provision.

(ii) Provision of services

Revenue from the rendering of services is recognized by reference to the stage of completion of the transaction at the reporting date when the outcome of the transaction can be estimated reliably. This circumstance occurs when the amount of revenue, the stage of completion, costs already incurred and costs to be incurred can be reliably measured and it is probable that the economic benefits derived from the rendering of the service will be received.

In the case of services rendered for which the final result cannot be reliably estimated, revenue is recognized only up to the limit of the recognized expenses that are recoverable.

(q)Income tax

The income tax expense or tax credit for the year comprises both current tax and deferred tax.

Current tax is the amount payable on the taxable income for the current year based on the applicable tax rate for each jurisdiction. It is calculated on the basis of the laws enacted or about to be enacted at the balance sheet date in the countries where subsidiaries and associates operate and generate taxable income. The Group periodically evaluates the positions taken in tax returns with respect to situations where the applicable tax regulations are subject to interpretation and establishes provisions, if necessary, based on the amounts expected to be paid to the tax authorities, the provision for which is included in taxable income (loss).

Deferred taxes are recognized on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. It is determined using tax rates (and laws) enacted or about to be enacted at the balance sheet date that are expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled.

Deferred taxes are not recognized if they arise from the initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither accounting nor taxable income. Deferred tax assets and liabilities are also not recognized for temporary differences between the carrying amount and tax base of investments in foreign operations when the company is able to control the date on which the temporary differences will reverse and it is probable that the temporary differences will not reverse in the foreseeable future. Likewise, deferred tax liabilities are not recognized if they arise

F-44

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

from the initial recognition of goodwill. Lastly, deferred tax assets are only recognized if it is probable that sufficient future taxable profit will be available against which they can be utilized.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset when the entity has a legally enforceable right to offset and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

Current or deferred income tax is recognized in profit or loss, unless it arises from a transaction or economic event that has been recognized in other comprehensive income or directly in equity. In such cases, the tax is also recognized in other comprehensive income or directly in equity, respectively.

The Group periodically evaluates the positions taken in tax returns with respect to situations where the applicable tax regulations are subject to interpretation and establishes provisions, if necessary, based on the amounts expected to be paid to the tax authorities, the provision for which is included in taxable income (loss).

(r)Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Group’s chief operating decision maker in order to decide on the resources to be allocated to the segment, evaluate its performance and for which discrete financial information is available.

(s)Environment

The Group carries out operations whose main purpose is to prevent, reduce or repair damage to the environment as a result of its activities.

Items of property, plant and equipment acquired for the purpose of being used on a lasting basis in its activity and whose main purpose is the minimization of environmental impact and the protection and improvement of the environment, including the reduction or elimination of future pollution from the Group’s operations, are recognized as assets through the application of measurement, presentation and disclosure criteria consistent with those mentioned in note 4(e).

(5) Segment Reporting

In accordance with IFRS 8 “Operating Segments”, financial information for operating segments is reported in the accompanying Appendix II, which forms an integral part of this note to the consolidated financial statements.

Group companies are divided into four areas: companies from the industrial area, companies from the commercial area, companies from the services area and companies from the research area. Within each of these areas, activities are organized based on the nature of the products and services manufactured and marketed.

Assets, liabilities, income and expenses for segments include directly and reliably attributable items. Items which are not attributed to segments by the Group are:

●

Balance sheet: equity, cash and cash equivalents and loans and borrowings.

●

Statement of profit and loss: finance result and income tax.

F-45

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(a)

Operating segments

The operating segments defined by the steering committee are as follows:

●

Biopharma (formerly Bioscience): concentrates all activities related to products derived from human plasma for therapeutic use.

●

Diagnostic: including the marketing of diagnostic testing equipment, reagents and other equipment, manufactured by Group or other companies.

●

Bio Supplies: this groups together transactions related to biological products for non-therapeutic use. The part relating to sales of plasma to third parties has been reclassified from Bio Supplies to Other.

●

Others: includes the provision of manufacturing services to third parties, plasma sales to third parties and research activities. It also includes pharmaceutical products manufactured by the Group and intended for hospital pharmacies, as well as the marketing of products that complement the Group’s own products.

Details of sales by groups of products for 2022, 2021 and 2020 are as follows:


	Thousands of Euros
	31/12/2022	*31/12/2021 ()**	*31/12/2020 ()**
Biopharma
Haemoderivatives	5,005,382	3,814,983	4,242,502
Diagnostic
Transfusional medicine	640,604	712,238	714,164
Other diagnostic	21,740	23,625	27,630
Bio supplies	146,076	115,811	133,221
Others	250,165	266,461	222,521

Total	6,063,967	4,933,118	5,340,038

* As a consequence of the review of transactions and balances allocations by segments, the comparative figures for the fiscal year 2021 and 2020 have been adjusted accordingly.

At 31 December 2022, 97.6% of the income from the sale of goods and services has been recognized at a certain point-in-time (97.4% in 2021 and 97.5% in 2020).

The Group has concluded that hemoderivative products are sufficiently alike to be considered as a whole for the following reasons:

●

All these products are human plasma derivatives and are manufactured in a similar way.

●

The customers and methods used to distribute these products are similar.

●

All these products are subject to the same regulations regarding production and the same regulatory environment.

(b)Geographical information

Geographical information is grouped into four areas:

●

United States of America and Canada

●

Spain

●

Rest of the European Union

●

Rest of the world

F-46

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The definition of these four segments is mainly due to the geographical level that Group management sets to manage its revenue as they respond to specific economic scenarios. The main framework of the Group is consistent with this geographical segment grouping, including the monitoring of its commercial operations and its information systems.

The financial information reported for geographical areas is based on sales to third parties in these markets as well as the location of assets.

(c)Main customers

In 2022, no customer has accounted for more than 10% of the Group’s gross revenues, and nor was the case in 2021. In 2020, 10.38% of the Group’s gross revenues corresponded to revenues from a customer in the Biopharma segment.

(6) Goodwill

Details of and movement in this caption of the consolidated balance sheet at 31 December 2022 were as follows:


			Thousands of Euros
			Balance at	Business			Translation	Balance at
	Segment	Reference	31/12/2021	Combination	Disposals	Transfers	differences	31/12/2022
Net value
Grifols UK.Ltd. (UK)	Biopharma		8,185	—	—	—	(438)	7,747
Grifols Italia.S.p.A. (Italy)	Biopharma		6,118	—	—	—	—	6,118
Biomat USA, Inc.(USA)	Biopharma		676,321	—	—	175,920	47,707	899,948
Grifols Australia Pty Ltd. (Australia) / Medion Diagnostics AG (Switzerland)	Diagnostic		9,752	—	—	—	107	9,859
Grifols Therapeutics, Inc. (USA)	Biopharma		1,962,024	—	—	—	121,408	2,083,432
Progenika Biopharma, S.A. (Spain)	Diagnostic		40,516	—	—	—	—	40,516
Grifols Diagnostic (Novartis & Hologic) (USA, Spain and Hong Kong)	Diagnostic		2,565,493	—	—	—	157,292	2,722,785
Kiro Grifols S.L. (Spain)	Others		24,376	—	—	—	—	24,376
Goetech LLC (USA)	Others	Note 3	59,590	—	(63,798)	—	4,208	—
Haema AG (Germany)	Biopharma		190,014	—	—	—	—	190,014
BPC Plasma, Inc. (formerly Biotest Pharma Corp; USA)	Biopharma		151,584	—	—	—	9,380	160,964
Interstate Blood Bank, Inc. (USA)	Biopharma		171,184	—	—	(175,920)	4,736	—
Plasmavita Healthcare GmbH (Germany)	Biopharma		9,987	—	—	—	—	9,987
Alkahest, Inc (USA)	Others		77,675	—	—	—	4,806	82,481
Grifols Canada Therapeutics, Inc (formerly Green Cross Biotherapeutics, Inc.) (Canada)	Biopharma		155,755	—	—	—	(980)	154,775
GigaGen, Inc (USA)	Others		112,621	—	—	—	6,969	119,590
Prometic Plasma Resources, Inc. (Canada)	Biopharma	Note 3	7,706	(4,894)	—	—	(10)	2,802
Haema Plasma Kft. (Hungary)	Biopharma	Note 3	—	14,739	—	—	(1,210)	13,529
Grifols Biotest Holdings GmbH / Biotest AG (Germany)	Biopharma	Note 3	—	303,624	—	—	—	303,624
Access Biologicals, LLC (USA)	Bio Supplies	Note 3	—	180,834	—	—	(1,472)	179,362
			6,228,901	494,303	(63,798)	—	352,503	7,011,909
				(See note 3)

F-47

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Details of and movement in this caption of the consolidated balance sheet at 31 December 2021 are as follows:


			Thousands of Euros
			Balance at	Business		Translation	Balance at
	Segment	Reference	31/12/2020	Combination	Transfers	differences	31/12/2021
Net value
Grifols UK.Ltd. (UK)	Biopharma		7,674	—	—	511	8,185
Grifols Italia.S.p.A. (Italy)	Biopharma		6,118	—	—	—	6,118
Biomat USA, Inc.(USA)	Biopharma		234,791	345,844	51,364	44,322	676,321
Grifols Australia Pty Ltd. (Australia) / Medion Diagnostics AG (Switzerland)	Diagnostic		9,538	—	—	214	9,752
Grifols Therapeutics, Inc. (USA)	Biopharma		1,816,404	—	—	145,620	1,962,024
Araclon Biotech, S.L. (Spain)	Diagnostic		6,000	(6,000)	—	—	—
Progenika Biopharma, S.A. (Spain)	Diagnostic		40,516	—	—	—	40,516
Grifols Diagnostic (Novartis & Hologic) (USA, Spain and Hong Kong)	Diagnostic		2,376,978	—	—	188,515	2,565,493
Kiro Grifols S.L. (Spain)	Others		24,376	—	—	—	24,376
Goetech LLC (USA)	Others		55,167	—	—	4,423	59,590
Haema AG (Germany)	Biopharma		190,014	—	—	—	190,014
BPC Plasma, Inc. (formerly Biotest Pharma Corp; USA)	Biopharma		140,334	—	—	11,250	151,584
Interstate Blood Bank, Inc. (USA)	Biopharma		158,479	—	—	12,705	171,184
Plasmavita Healthcare GmbH (Germany)	Biopharma		9,987	—	—	—	9,987
Alkahest, Inc (USA)	Others		71,910	—	—	5,765	77,675
Grifols Canada Therapeutics, Inc (formerly Green Cross Biotherapeutics, Inc.) (Canada)	Biopharma	Note 3	134,569	16,667	—	12,225	163,461
GCAM, Inc (formerly Green Cross America Inc.) (USA)	Biopharma		49,416	—	(51,364)	1,948	—
GigaGen, Inc (USA)	Biopharma	Note 3	—	105,460	—	7,161	112,621
			5,332,271	461,971	0	434,659	6,228,901

Impairment testing:

CGUs correspond to the reporting segments except for the Others segment which corresponds to Kiro Grifols and GigaGen as separated GGU.

As a result of the acquisition of Talecris in 2011, and for impairment testing purposes, the Group combines the CGUs allocated to the Biopharma segment, grouping them together at segment level, because substantial synergies were expected to arise on the acquisition of Talecris, and due to the vertical integration of the business and the lack of an independent organized market for the products. Because the synergies benefit the Biopharma segment globally they cannot be allocated to individual CGUs. The Biopharma segment represents the lowest level to which goodwill is allocated and is subject to control by Group management for internal control purposes.

As a result of the acquisition of Novartis’ Diagnostic business unit in 2014, the Group decided to combine Araclon, Progenika, Australia and Hologic’s share of NAT donor screening unit acquisition into a single CGU for the Diagnostic business as the acquisition is supporting not only the vertically integration business but also cross-selling opportunities. In addition, for management purposes, the Group’s management is focused on the business more than geographical areas or individual companies.

F-48

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The Hospital division is no longer a reportable segment since it does not meet any of the quantitative thresholds described in IFRS 8 Operating Segments. The segment information included in the Hospital CGU in previous years is currently grouped into an Others segment.

In addition, due to the acquisition of the remaining 51% stake in Access Biologicals, a new CGU for the Bio Supplies business has been identified (see note 3).

The CGUs established by Grifols management are:

●

Biopharma

●

Diagnostic

●

Bio Supplies

●

Kiro Grifols

●

GigaGen

The recoverable amount of the Biopharma CGU and Bio Supplies CGU has been calculated based on its value in use calculated as the present value of the five-year future cash flows discounted at a discount rate considering the related inherent risk.

The recoverable amount of the Diagnostic CGU has been calculated based on its fair value less costs to sell calculated as the present value of future cash flows approved by Management discounted at a discount rate considering the inherent risk.. Due to the reorganization to boost the business units, a long term strategic plan has been approved in order to transform the Diagnostic business unit by investments which will lead to a beyond five year growth. Consequently, management has estimated future cash flows for the period 2023-2033.

The recoverable amount of the Kiro Grifols CGU has been calculated based on its fair value less costs to sell calculated as the present value of the five-year cash flows discounted at a discount rate considering the related inherent risk.

For the calculation of the recoverable amount, management has considered:

●

Gross margin based on historical performance and actual situation

●

Development prospects in the international market

●

Current investments

●

Investments which will imply a significant growth of the production capacity for those cases whose fair value has been considered

Cash flows estimated as of the year in which stable growth in the CGU has been reached are extrapolated using the estimated growth rates indicated below. Perpetual growth rates are consistent with the forecasts included in industry reports.

The recoverable amount of the GigaGen CGU has been determined based on the fair value less costs to sell, calculated as the present value of the future cash flows mainly of a research and development project that have been approved by management, adjusted by the probability of success and discounted at a discount rate that includes their inherent risk. Cash flows have been estimated taking into consideration a useful life of 20 years from the product launch and their reduction as of the sixth year.

F-49

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The key assumptions used in calculating impairment testing of the CGUs for 2021 were as follows:


	Perpetual Growth rate		Pre-tax discount rate
Bioscience	2.0	%	9.0	%
Diagnostic	2.0	%	9.3	%

The key assumptions used in calculating impairment testing of the CGUs for 2022 have been as follows:


	Perpetual Growth rate		Pre-tax discount rate
Biopharma	1.9	%	10.9	%
Diagnostic	1.9	%	9.7	%
Bio Supplies	1.9	%	10.9	%
Kiro Grifols	1.5	%	11.6	%
GigaGen	N/A		19.6	%

Additionally, the following key assumptions have been used for the GigaGen CGU impairment testing:


	Sink rate		Success rate
GigaGen	5.0	%	20.0	%

Likewise, for the impairment test of the Diagnostic CGU, the sales of Blood Typing Solution (BTS) and those of the Clinical Diagnostic have been considered as key assumptions.

The discount rate used reflects specific risks relating to the CGUs and the countries in which they operate. The main assumptions used for determining the discount rate are as follows:

●

Risk free rate: normalized government bonds at 10 years

●

Market risk premium: premium based on market research

●

Unlevered beta: average market beta

●

Debt to equity ratio: average market ratio

In 2021, the reasonably possible changes considered for the CGUs impairment testing were a variation in the discount rate, as well as in the estimated perpetual growth rate, , with independent movements of each other, as follows:


	Perpetual Growth rate	Pre-tax discount rate
Bioscience	+/- 50 bps	+/- 50 bps
Diagnostic	+/- 50 bps	+/- 50 bps

In 2022, and according to the current economic context, the reasonably possible changes considered for the CGUs impairment testing are a variation in the discount rate, as well as in the estimated perpetual growth rate, with independent movements of each other, as follows:


	Perpetual Growth rate	Pre-tax discount rate
Biopharma	+/- 50 bps	+/- 50 bps
Diagnostic	+/- 50 bps	+/- 50 bps
Bio Supplies	+/- 50 bps	+/- 50 bps
Kiro Grifols	+/- 50 bps	+/- 50 bps
GigaGen	No aplica	+/- 100 bps

F-50

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Additionally, for the impairment test of the Diagnostic CGU, two scenarios of sensitivity to variations in the sales of the Blood Typing Solutions (BTS) business line and the Clinical Diagnostics (CDx) business line have also been considered. In the first case, sales projections were estimated to be approximately 10% lower than initially projected, on average, each year. In the second case, a projection has been estimated so that Clinical Diagnostics sales from 2029 onwards represent on average 80% of the initially estimated sales.

In addition, the following reasonably possible changes have been considered for the GigaGen CGU impairment testing with independent movements of each other:


	Sink rate	Success rate
GigaGen	+/- 100 bps	+/- 100 bps

The reasonably possible changes in key assumptions considered by management in the calculation of the recoverable amount of the Biopharma, Bio Supplies, Kiro Grifols and GigaGen CGU’s would not cause the carrying amount to exceed its recoverable amount.

The reasonably possible changes in key assumptions considered by management in the calculation of the Diagnostic CGU recoverable amount would cause the carrying amount to exceed its recoverable amount as follows:


	% of asset value
Perpetual Growth rate	-1	%
Pre-tax discount rate	-4	%
Sensitivity to BTS sales	-1	%
Sensitivity to CDx sales	-4	%

At 31 December 2022 Grifols’ stock market capitalization totals Euros 6,636 million (Euros 9,834 million at 31 December 2021).

(7) Other Intangible Assets

Details of other intangible assets and movement during the years ended 31 December 2022 and 2021 are included in Appendix III, which forms an integral part of these notes to the consolidated financial statements.

Intangible assets acquired from Talecris mainly include currently marketed products. Identifiable intangible assets correspond to Gamunex and have been recognized at fair value at the acquisition date of Talecris and classified as currently marketed products. Intangible assets recognized comprise the rights on the Gamunex product, its commercialization and distribution license, trademark, as well as relations with hospitals. Each of these components is closely linked and fully complementary, are subject to similar risks and have a similar regulatory approval process.

Intangible assets acquired from Progenika mainly include currently marketed products. Identifiable intangible assets correspond to blood, immunology and cardiovascular genotyping. These assets have been recognized at fair value at the acquisition date of Progenika and classified as currently marketed products.

F-51

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The cost and accumulated amortization of currently marketed products acquired from Talecris and Progenika at 31 December 2022 was as follows:


	Thousands of Euros
	Balance at		Translation	Balance at
	31/12/2021	Additions	differences	31/12/2022
Cost of currently marketed products - Gamunex	1,059,509	—	65,561	1,125,070
Cost of currently marketed products - Progenika	23,792	—	—	23,792
Accumulated amortisation of currently marketed products - Gamunex	(373,772)	(37,833)	(22,798)	(434,403)
Accumulated amortisation of currently marketed products - Progenika	(21,012)	(2,379)	—	(23,391)
Carrying amount of currently marketed products	688,517	(40,212)	(22,798)	691,068

The cost and accumulated amortization of currently marketed products acquired from Talecris, Progenika and Gigagen at 31 December 2021 was as follows:


	Thousands of Euros
	Balance at		Translation	Balance at
	31/12/2020	Additions	differences	31/12/2021
Cost of currently marketed products - Gamunex	980,873	—	78,636	1,059,509
Cost of currently marketed products - Progenika	23,792	—	—	23,792
Accumulated amortisation of currently marketed products - Gamunex	(313,335)	(33,610)	(26,827)	(373,772)
Accumulated amortisation of currently marketed products - Progenika	(18,633)	(2,379)	—	(21,012)
Carrying amount of currently marketed products	672,697	(35,989)	51,809	688,517

The estimated useful life of the currently marketed products acquired from Talecris is considered limited, has been estimated at 30 years on the basis of the expected life cycle of the product (Gamunex) and is amortized on a straight-line basis.

At 31 December 2022 the residual useful life of currently marketed products is 18 years and 5 months (19 years and 5 months at 31 December 2021).

The estimated useful life of the currently marketed products acquired from Progenika is considered limited, has been estimated at 10 years on the basis of the expected life cycle of the product and is amortized on a straight-line basis.

At 31 December 2022 the residual useful life of currently marketed products acquired from Progenika is 2 months (1 year and 2 months at 31 December 2021).

(a)

Self — constructed intangible assets

At 31 December 2022 the Group has recognized Euros 37,214 thousand as self-constructed intangible assets (Euros 34,034 thousand at 31 December 2021).

(b)

Purchase commitments

At 31 December 2022 the Group has intangible asset purchase commitments amounting to Euros 69 thousand (Euros 431 thousand at 31 December 2021).

F-52

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(c)

Intangible assets with indefinite useful lives and other intangibles in progress

At 31 December 2022 the Group recognizes plasma center licenses with indefinite useful lives under intangible assets for a carrying amount of Euros 31,054 thousand (Euros 29,394 thousand at 31 December 2021).

The Group has also an amount of Euros 486,364 thousand as development costs in progress (Euros 432,534 thousand at 31 December 2021).

(d)

Results on disposal of intangible assets

The total losses on disposals and sale of intangible assets amounts to Euros 1,082 thousand in 2022 (losses of Euros 30 thousand in 2021).

(e)

Impairment testing

Indefinite-lived intangible assets have been allocated to the cash-generating unit (CGU) of the Biopharma segment. These assets have been tested for impairment together with goodwill (see note 6).

Impairment testing has been analyzed for each of the intangible assets in progress by calculating its recoverable amount based on their fair value.

(8) Leases

Details of leases in the consolidated balance sheet at 31 December 2022 and 2021 are as follows:


Right-of-use assets	Thousands of Euros
	31/12/2022	31/12/2021
Land and buildings	885,050	782,125
Machinery	3,017	5,283
Computer equipment	1,026	2,044
Vehicles	8,459	6,205
	897,552	795,657


Lease liabilities	Thousands of Euros
	31/12/2022	31/12/2021
Non-current	914,588	825,157
Current	102,356	48,567
	1,016,944	873,724

The composition of lease liabilities as of 31 December 2022 and 2021 is shown below. Undiscounted future payments classified on a maturity basis are presented together with the effect of the financial discount:


	Thousands of Euros
	31/12/2022	31/12/2021
Maturity:
Within one year	102,356	85,972
In the second year	97,823	82,923
In the third to fifth years	270,876	224,378
After the fifth year	996,655	872,926
	1,467,710	1,266,199
Discounting effect	450,766	392,475
Total lease liabilities	1,016,944	873,724

F-53

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Details by maturity of lease liabilities are shown under “Liquidity risk” in note 29.

At 31 December 2022, the Group has recognized an amount of Euros 141,973 thousand related to additions of right-of- use assets (Euros 133,442 thousand at 31 December 2021). Movement at 31 December 2022 and 2021 is included in Appendix IV, which forms an integral part of these notes to the consolidated financial statements.

At 31 December 2022 and 2021, the amounts recognized in the consolidated statement of profit and loss related to lease agreements are:


Right-of-use depreciation	Thousands of Euros
	31/12/2022	31/12/2021
Buildings	72,214	57,901
Machinery	1,983	2,120
Computer equipment	1,432	2,269
Vehicles	4,869	4,430
	80,498	66,720


	Thousands of Euros
	31/12/2022	31/12/2021
Expenses related to short-term contracts	1,739	3,106
Expenses related to low-value contracts	13,435	13,404
Other operating lease expenses	23,820	16,435
	38,994	32,945

At 31 December 2022, the Group has paid a total of Euros 104,287 thousand related to lease contracts (Euros 82,692 thousand at 31 December 2021).

The total amount recognized in the balance sheet corresponds to lease contracts in which the Group is the lessee.

(9) Property, Plant and Equipment

Details of property, plant and equipment and movement in the consolidated balance sheet at 31 December 2022 and 2021 are included in Appendix V, which forms an integral part of this note to the consolidated financial statements.

Property, plant and development under construction at 31 December 2022 and 2021 mainly comprise investments made to extend the companies’ equipment and to increase their productive capacity.

In 2022, the Group has capitalized interests for a total amount of Euros 25,184 thousand (Euros 18,636 thousand in 2021) (see note 26).

Insurance

Group policy is to contract sufficient insurance coverage for the risk of damage to property, plant and equipment. At 31 December 2022 the Group has a combined insurance policy for all Group companies, which more than adequately covers the carrying amount of all the Group’s assets.

F-54

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Losses on disposal of property, plant and equipment

Total losses incurred on disposals of property, plant and equipment for 2022 amount to Euros 6,817 thousand (losses of Euros 2,720 thousand in 2021).

Self - constructed property, plant and equipment

At 31 December 2022 the Group has recognized Euros 87,656 thousand as self -constructed property, plant and equipment (Euros 87,885 thousand at 31 December 2021).

Purchase commitments

At 31 December 2022 the Group has property, plant and equipment purchase commitments amounting to Euros 41,680 thousand (Euros 40,596 thousand at 31 December 2021).

Impairment testing

As a result of the reorganization of the USA donor center network, an impairment for some tangible assets allocated to the relocated donor centers has been recognized for a total amount of Euros 5.7 million as an expense in the consolidated statement of profit and loss for 2022.

As a result of the discontinuation of the Blood Collection Systems activity, an impairment for some of the tangible assets allocated to this business activity was recognized for a total amount of Euros 11.5 million as an expense in the consolidated statement of profit and loss for 2021.

Impairment testing for the tangible assets has been analyzed by calculating its recoverable amount based on their fair value.

f)Transfers

At 31 December 2022, transfers include the reclassification of Euros 5,159 thousand to “non-current assets held for sale” related to agreement that the Group has reached for the sale of the installations owned by Grifols Brasil, Lda.

(10) Equity-Accounted Investees

Details of this caption in the consolidated balance sheet at 31 December 2022 and 2021 are as follows:


			Thousands of Euros			Thousands of Euros
	% ownership		31/12/2022	% ownership		31/12/2021
Access Biologicals LLC	100.00	%	—	49.00	%	53,264
Shanghai RAAS Blood Products Co., Ltd.	26.20	%	1,910,428	26.20	%	1,909,596
Grifols Egypt Plasma Derivatives	49.00	%	36,111	49.00	%	31,847
BioDarou P.J.S. Co.	49.00	%	5,051	0.00	%	—
Total equity accounted investees with similar activity to that of the Group			1,951,590			1,994,707
Albajuna Therapeutics, S.L	49.00	%	622	49.00	%	1,910
Mecwins, S.A.	24.59	%	2,965	24.99	%	3,159
Total of the rest of equity accounted investees			3,587			5,069

Total equity-accounted investees			1,955,177			1,999,776

F-55

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Movement in the investments in equity-accounted investees for the year ended 31 December 2022 is as follows:


	Thousands of Euros
	2022
	Equity accounted investees with similar activity to that of the Group					Rest of equity accounted investees
		Shanghai
	Access	RAAS Blood	Grifols Egypt			Albajuna
	Biologicals	Products Co.,	Plasma	BioDarou P.J.S.		Therapeutics,	Mecwins,
	LLC	Ltd.	Derivatives	Co.	Total	S.L	S.A.	Total	Total
Balance at 1 January	53,264	1,909,596	31,847	—	1,994,707	1,910	3,159	5,069	1,999,776

Acquisitions	—	—	—	4,534	4,534	—	—	—	4,534
Transfers	(129,459)	—	—	—	(129,459)	—	—	—	(129,459)
Share of profit / (losses)	76,895	26,680	865	(962)	103,478	(1,288)	(194)	(1,482)	101,996
Share of other comprehensive income / translation differences	3,028	(18,859)	(16,419)	1,479	(30,771)	—	—	—	(30,771)
Collected dividends	(3,728)	(6,989)	—	—	(10,717)	—	—	—	(10,717)
Others	—	—	19,818	—	19,818	—	—	—	19,818
Balance at 31 December	—	1,910,428	36,111	5,051	1,951,590	622	2,965	3,587	1,955,177

Movement in the investments in equity-accounted investees for the year ended 31 December 2021 is as follows:


	Thousands of Euros
	2021
	Equity accounted investees with similar activity to that of the Group				Rest of equity accounted investees
		Shanghai RAAS	Grifols Egypt		Albajuna
	Access	Blood Products	Plasma		Therapeutics,
	Biologicals LLC	Co., Ltd.	Derivatives	Total	S.L	GigaGen, Inc.	Mecwins, S.A.	Total	Total
Balance at 1 January	46,782	1,800,578	—	1,847,360	3,378	15,677	2,605	21,660	1,869,020

Acquisitions	—	—	30,454	30,454	—	—	860	860	31,314
Transfers	—	—	—	—	—	(50,794)	—	(50,794)	(50,794)
Share of profit / (losses)	8,298	24,835	(578)	32,555	(1,463)	34,957	(306)	33,188	65,743
Share of other comprehensive income / translation differences	3,929	89,886	1,971	95,786	(5)	160	—	155	95,941
Collected dividends	(5,745)	(5,703)	—	(11,448)	—	—	—	—	(11,448)
Balance at 31 December	53,264	1,909,596	31,847	1,994,707	1,910	—	3,159	5,069	1,999,776

Movement in the investments in equity-accounted investees for the year ended 31 December 2020 is as follows:


	Thousands of Euros
	2020
	Equity accounted investees with similar activity to that of the Group				Rest of equity accounted investees
			Shanghai
	Access		RAAS Blood			Albajuna
	Biologicals	Plasmavita	Products Co.,			Therapeutics,			Medcom
	LLC	Healthcare	Ltd.	Total	Alkahest, Inc.	S.L	GigaGen, Inc.	Mecwins, S.A.	Advance, S.A	Total	Total
Balance at 1 January	49,922	10,368	—	60,290	14,708	5,228	23,997	2,338	7,912	54,183	114,473
Acquisitions	—	—	1,807,351	1,807,351	—	—	—	—	—	—	1,807,351
Transfers	—	(10,674)	—	(10,674)	(91,023)	—	—	—	—	(91,023)	(101,697)
Share of profit / (losses)	8,962	306	11,531	20,799	76,414	(1,878)	(6,725)	267	—	68,078	88,877
Share of other comprehensive income / translation differences	(4,160)	—	(16,090)	(20,250)	(99)	28	(1,595)	—	—	(1,666)	(21,916)
Impairment losses	—	—	—	—	—	—	—	—	(7,912)	(7,912)	(7,912)
Collected dividends	(7,942)	—	(2,214)	(10,156)	—	—	—	—	—	—	(10,156)
Balance at 31 December	46,782	—	1,800,578	1,847,360	—	3,378	15,677	2,605	—	21,660	1,869,020

F-56

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The main movements of the equity-accounted investees with similar activity to that of the Group are explained below:

Grifols Egypt for Plasma Derivatives (S.A.E.)

On 29 July 2021, a cooperation agreement was signed with the National Service Projects Organization (NSPO) to help build a platform to bring self-sufficiency in plasma-derived medicines to Egypt. The Company made a first contribution of US Dollars 36,750 thousand (equivalent to Euros 30,454 thousand at the date of integration), and in exchange received GEPD shares representing 49% of its share capital, which amounts to US Dollars 300 million. The Company has undertaken to make the contributions for the outstanding amount corresponding to its interest as the capital requirements are approved. As a result, the Group made a further capital contribution of US Dollars 22 million during 2022, equivalent to 49% of the total capital contribution made (US dollars 45 million).

Shanghai RAAS Blood Products Co. Ltd.

In March 2019, Grifols entered into a share exchange agreement with Shanghai RAAS Blood Products Co. Ltd. (hereinafter SRAAS), through which Grifols would deliver 90 shares of its US subsidiary Grifols Diagnostic Solutions Inc. (hereinafter GDS) (representing 45% of the economic rights and 40% of the voting rights), and in exchange would receive 1,766 million of SRAAS shares (representing 26.2% of the share capital).

After receiving all relevant authorizations, at 31 December 2019, Grifols delivered 90 shares of its subsidiary GDS in exchange for a contractual right to receive equity instruments in an associate (equivalent to 1,766 million of SRAAS shares), because at that date no shares of SRAAS were received. As a consequence, at 31 December 31 2019, SRAAS was the minority shareholder owning 45% of GDS. Grifols recorded the aforementioned contractual right for the fair value of the GDS shares delivered and subsequently, the right was measured based on its fair value through profit or loss.

On 30 March 2020, the share exchange agreement was closed and Grifols received SRAAS shares corresponding to 26.2% of its share capital. Therefore, Grifols became the largest shareholder of SRAAS, while maintaining operational, voting and economic control of GDS.

Consequently, the consolidated balance sheet at 31 December 2020, did not longer show any financial asset related to the contractual right, but the interest in SRAAS was recorded as an investment in an associate company because the Group exercises significant influence in accordance with the criteria established in IAS 28 – Investment in Associates and Joint Ventures. SRAAS’ equity-accounted investment was recognized at the value of the shares at the closing date of the transaction. The difference between the contractual right value recognized at 31 December 2019 and SRAAS quoted value at 30 March 2020 was Euros 56,526 thousand which was recognized as Change in fair value of financial instruments in the consolidated statement of profit and loss (see note 26).

The impact on the consolidated statement of profit and loss related to the equity method result was included in the Operating Result under “Profit/(loss) of equity accounted investees with similar activity to that of the Group”, since SRAAS is a company dedicated to the plasma product sector.

The transaction costs were recognized as part of the investment value and totaled Euros 34,088 thousand.

As of 31 December 2022, the quoted value of SRAAS shares was CNY 6.34. As a result of the prolonged decline in the fair value of the associate Shanghai RAAS (hereinafter referred to as SRAAS) below its cost, there is an indication of impairment.


	31/12/2022	31/12/2021	Date of acquisition
SRAAS Share price	CNY 6.34	CNY 6.80	CNY 7.91

The recoverable amount of the investment in SRAAS has been determined based on its value in use calculated as the present value of future cash flows discounted at a discount rate that reflects the inherent risk.

F-57

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Management has determined the gross margin based on past performance and the current situation, ongoing investments and its expectations of market development without considering new business.

Cash flows have been estimated over 14 years since SRAAS operates in an emerging market where current investments are estimated to result in long-term growth beyond 5 years. Cash flows from the fourth year onwards are extrapolated for a further 10 years using growth rates that reduce the fourth year growth rate to the long-term growth rate shown below to better reflect medium-term growth estimates. Perpetual growth rates are consistent with forecasts included in industry and country reports.

The key assumptions used to perform the impairment test of the investment in SRAAS for 2022 are as follows:


	Perpetual Growth rate		Pre-tax discount rate
SRAAS	3.3	%	9.2	%

The discount rates used reflect the specific risks related to SRAAS and the country where it operates. The main assumptions used to determine the discount rate are as follows:

●

Risk-free rate: Standardized 10-year government bonds.

●

Market risk premium: Premium based on market studies.

●

Unleveraged beta: Average beta of the market.

●

Debt-to-equity ratio: market average ratio.

In the actual economic context, the reasonably possible changes considered for SRAAS are a variation in the discount rate, as well as in the estimated perpetual growth rate, with independent movements of each other, as follows:


	Perpetual Growth rate	Pre-tax discount rate
SRAAS	+/- 50 bps	+/- 50 bps

Reasonably possible changes in key assumptions considered by management in calculating the recoverable amount of SRAAS would cause the carrying amount to exceed its recoverable amount as follows:


	Pre-tax discount rate +50 bps
SRAAS	-2	%

Plasmavita Healthcare GmbH

In 2017, Grifols established PLASMAVITA GmbH, a joint venture between Grifols (50%) and two European partners (50%).

On 14 April 2020, Grifols made a contribution of Euros 10 million in cash that was recognized as a shareholder contribution in Plasmavita. The equity share of 50% remained unchanged after the contribution. However, in assessing the existence of control due to the new shareholder agreement signed on that date, it was concluded that Grifols has control over Plasmavita and, therefore, it was considered part of the group and it has been fully consolidated (see note 3).

Access Biologicals LLC.

On 12 January 2017, the group announced the acquisition of 49% of the voting rights in Access Biologicals LLC, a company based in San Diego, California, USA, for the amount of US Dollars 51 million. Grifols entered into an option agreement to purchase the remaining 51% voting rights in five years, in 2022. Grifols also signed a supply agreement to sell biological products not meant for therapeutic use to Access Biologicals.

F-58

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The principal business activity of Access Biologicals is the collection and manufacturing of an extensive portfolio of biological products. Combined with closed-loop material sourcing, it provides critical support for various markets such as in-vitro diagnostic manufacturing, biopharmaceutical, cell culture and diagnostic research & development.

On 15 June 2022, Grifols, through its wholly-owned subsidiary Chiquito Acquisition Corp., reached an agreement to acquire all the shares of Access Biologicals LLC, exercising the call option for the remaining 51%, for a total of US Dollars 142 million. With the acquisition of 100% of the shares, Grifols obtains control over Access Biologicals LLC and, therefore, it is considered a group company and is consolidated under the full consolidation method (see note 3).

BioDarou P.J.S. Co.

On 25 April 25 2022, and after obtaining all regulatory approvals, Grifols closed the acquisition of 70.18% of the share capital of Biotest AG for Euros 1,460,853 thousand (see note 3). Biotest AG is the parent company of a consolidated group of companies, which includes a joint venture investment corresponding to a 49% interest held by Biotest Pharma GmbH in BioDarou P.J.S. Co, whose registered office is in Tehran, Iran, and which is accounted for using the equity method.

The company’s goal is to collect plasma, process it into immunoglobulins, factors and human albumin through Biotest AG and then sell the finished products in Iran.

The main movements for the rest of the equity-accounted investees are explained below:

Alkahest, Inc.

Likewise, as a result of agreements between shareholders, Grifols obtained control of Alkahest on 2 September 2020. Until that date, the previous 42.45% stake in Alkahest was equity accounted. The difference between the fair value of the previous stake and the book value was Euros 86,743 thousand (US Dollars 102,552 thousand), recognizing a profit for such amount under “Profit/(loss) of equity accounted investees” in the statement of profit and loss.

As from this date, Alkahest was incorporated into the Group’s consolidation perimeter by the full consolidation method.

Medcom Advance, S.A.

In February 2019, the Group completed the acquisition of 45% of the shares in Medcom Advance, S.A. for an amount of Euros 8,602 thousand. Medcom Advance, S.A. is a company dedicated to research and development with a view to create proprietary patents using nanotechnology. The company was equity-accounted. At 31 December 2021 and 2022, this investment is fully impaired.

Mecwins, S.A.

On 22 October 2018 Grifols allocated Euros 2 million to the capital increase of Mecwins through Progenika Biopharma, reaching 24.99% of the total capital.

Mecwins is a spin-off of the Institute of Micro and Nanotechnology of the Center for Scientific Research (CSIC), specialized in the development of innovative nanotechnological analysis tools for the diagnosis and prognosis of diseases.

Mecwins has developed ultrasensitive optical reading immunoassay technology from nanosensors for the detection of protein biomarkers in blood. This technology has potential applications in fields such as oncology, cardiovascular and infectious diseases.

F-59

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The injection of capital, in which CRB Inverbio also participated with an additional Euros 2 million, will enable Mecwins to start developing pre-commercial prototypes of this technology and for Grifols to position itself in the field of nanotechnology applied to diagnosis.

GigaGen Inc.

On 5 July 2017, Grifols through its 100% subsidiary Grifols Innovation and New Technologies Limited (“GIANT”) acquired a 43.96% shareholding in GigaGen, Inc., a company based in San Francisco (USA) for the amount of US Dollars 35 million.

GIANT and GigaGen entered into a Research and Collaboration Agreement whereby in exchange of a collaboration fee of US Dollars 15 million in the aggregate, GigaGen will commit to carry out research activities to develop recombinant polyclonal immunoglobulin therapies derived from human B cells for the treatment of human diseases.

On 8 March 2021, Grifols, through its wholly owned subsidiary Grifols Innovation and New Technologies Limited (“GIANT”), reached an agreement to acquire all of the shares of Gigagen, Inc. for a total amount of US Dollars 90.5 million. With the acquisition of the 100% stake, Grifols obtains control over Gigagen and, therefore, becomes a group company and is consolidated under the full consolidation method (see note 3).

The most recent financial statements available of the main equity-accounted investments of Grifols are as follows:

Balance sheet


	Thousands of Euros	Thousands of Euros
	31/12/2022	31/12/2021
			Access
	SRAAS	SRAAS	Biologicals
Non-current assets	3,028,641	2,877,382	2,707
Current assets	648,415	549,977	23,287
Cash and cash equivalents	430,655	401,117	3,790
Non-current liabilities	(2,645)	(3,313)	(36)
Non-current financial liabilities	(292)	(453)	—
Current liabilities	(193,289)	(191,133)	(3,615)
Current financial liabilities	—	—	(2,649)
Net assets	3,911,485	3,633,577	23,484

P&L:


	Thousands of Euros	Thousands of Euros
	31/12/2022	31/12/2021
			Access
	SRAAS	SRAAS	Biologicals
Net revenue	700,831	395,812	45,689
Profit for the year	227,000	181,395	17,380

As previously mentioned, on 15 June 2022, Grifols acquired all of Access Biologicals LLC shares and is therefore considered a group company. Consequently, the company’s financial statements for 2022 are no longer detailed.

F-60

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(11) Financial Assets

Details of non-current financial assets on the consolidated balance sheet at 31 December 2022 and 2021 are as follows:


		Thousands of Euros
	Reference	31/12/2022	31/12/2021
Financial investments in listed shares		11,540	2,038
Non-current derivatives	Note 29	27,030	2,068
Total Non-current financial assets measured at fair value		38,570	4,106
Non-current guarantee deposits		9,277	7,763
Other non-current financial assets	(a)	476,361	261,294
Non-current loans to related parties	Note 30	96,537	89,104
Total Non-current financial assets measured at amortized cost		582,175	358,161

Details of current financial assets on the consolidated balance sheet at 31 December 2022 and 2021 are as follows:


		Thousands of Euros
	Reference	31/12/2022	31/12/2021
Current derivatives	Note 29	12,629	3,238
Total Non-current financial assets measured at fair value		12,629	3,238


		Thousands of Euros
	Reference	31/12/2022	31/12/2021
Deposits and guarantees		359	561
Other current financial assets	(a)	30,627	2,025,869
Current loans to third parties		48	39
Total other current financial assets measured at amortized cost		31,034	2,026,469

(a)

Other non-current and current financial assets

Details of other non-current and current financial assets are as follows:


		Thousands of Euros
	Reference	31/12/2022	31/12/2021
Other financial assets with related parties	Note 30	318,890	220,947
Other financial assets with third parties		188,098	2,066,216
Total other non-current and current financial assets		506,988	2,287,163

In 2021 Grifols closed a collaboration agreement with the U.S. firm ImmunoTek Bio Centers, LLC, specialized in the opening and construction of plasma centers, to open 21 plasma centers in the United States. At 31 December 2022, the Group has made advanced payments related to this project for an amount of Euros 124.1 million (Euros 42.3 million).

At 31 December 2021 “Other financial assets with third parties” was mainly composed of the cash received from the new bond issue, which has been used in 2022 to acquire the existing share capital of Tiancheng (Germany) Pharmaceutical Holdings AG, whose current corporate name is Grifols Biotest Holdings GmbH, owner of approximately 90% of Biotest ordinary shares and 1% of Biotest preferred shares (see note 15 and 20).

F-61

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(12) Inventories

Details of inventories at 31 December 2022 and 2021 are as follows:


	Thousands of Euros
	31/12/2022	31/12/2021
Goods for resale	138,909	137,887
Raw materials and supplies	1,064,776	657,060
Work in progress and semi-finished goods	1,331,644	721,088
Finished goods	666,028	743,319
	3,201,357	2,259,354

Movement in the inventory provision was as follows:


	Thousands of Euros
	31/12/2022	31/12/2021	31/12/2020
Balance at 1 January	158,724	122,613	104,251
Net charge for the year	(66,647)	28,092	42,255
Cancellations for the year	(12,155)	(269)	(189)
Translation differences	4,818	8,288	(23,704)
Balance at 31 December	84,740	158,724	122,613

As a result of the discontinuation of the Blood Collection Systems activity, an impairment of some inventory was recognized for a total amount of Euros 5 million as an expense in the consolidated statement of profit and loss for 2021.

(13) Contract assets

Contract assets from contract fractionation relate to contingent claims for the complete fulfilment of contractual obligations from contract fractionation agreements entered into by Biotest AG. The resulting performance obligations are generally fulfilled by Biotest over a period of up to 12 months. Receivables from this business, which usually have a due date of between 90 and 120 days, are recognized when the right to receive the consideration becomes unconditional. This is the case when the biological drugs produced from the blood plasma provided by the customer are delivered to the customer. These are service transactions that are valued at the corresponding costs of sales incurred plus profit margin, if it can be estimated.

Details of contract assets at 31 December 2022 and 2021 are as follows:


	Thousands of Euros
	31/12/2022	31/12/2021
Contract assets (gross)	35,467	1,939
Allowances for expected credit losses	(313)	—
Contract assets (net)	35,154	1,939

Default risks are accounted for by making value adjustments to the contract assets. The allowance for expected credit losses is calculated as the difference between the nominal amount of the contract assets and the estimated recoverable amount. An independent expert has examined the portfolio of contract assets that do not show any concrete indications of impairment in individual cases.

Movement in allowance for expected credit losses corresponding to contract assets is included in note 29.

F-62

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(14) Trade and Other Receivables

Details at 31 December 2022 and 2021 are as follows:

		Thousands of Euros
	Reference	31/12/2022	31/12/2021
Trade receivables		478,597	324,442
Receivables from associates	Note 30	162,382	131,764
Impairment losses	Note 29 (i)	(32,291)	(24,009)
Trade receivables		608,688	432,197
Other receivables	Note 29 (i)	10,050	11,014
Personnel		770	654
Advance payments	Note 29 (i)	19,033	6,210
Taxation authorities, VAT recoverable		38,719	35,389
Other public entities		4,609	1,796
Other receivables		73,181	55,063
Current income tax assets		56,782	12,448
Total trade and other receivables		738,651	499,708

Other receivables

During 2022, 2021 and 2020 the Grifols Group has sold receivables without recourse to some financial institutions (factors), to which the risks and benefits inherent to the ownership of the assigned credits are substantially transferred. Also, the control over the assigned credits, understood as the factor’s ability to sell them to an unrelated third party, unilaterally and without restrictions, has been transferred to the factor. The main conditions of these contracts include the advanced collection of the assigned credits that vary between 70% and 100% of the nominal amount and a percentage of insolvency risk coverage on the factor side that varies between 90% and 100% of the nominal of the assigned credits.

These contracts have been considered as without recourse factoring and the amount advanced by the factors has been derecognized from the balance sheet.

Likewise, in financial years 2022 and 2021, some receivables assignment contracts were signed with a financial institution, in which Grifols retains the risks and benefits inherent to the ownership of the assigned credits. These contracts have been considered as with resource and the assigned amount remains in the consolidated balance sheet at 31 December 2022 and a short-term debt has been recognized for an amount equal to the consideration received from the factor for the assignment. The amount recognized is Euros 16,546 thousand at 31 December 2022 (Euros 23,450 thousand at 31 December 2021).

Total receivables without recourse sold to financial institutions through the aforementioned contracts in 2022 amount to Euros 3,174,308 thousand (Euros 2,975,343 thousand in 2021 and Euros 2,735,973 thousand in 2020).

The financial cost of credit rights sold for the Group totals Euros 18,201 thousand which has been recognized under finance costs in the consolidated statement of profit and loss for 2022 (Euros 10,292 thousand in 2021 and Euros 10,964 thousand in 2020) (see note 26).

Details of balances with related parties are shown in note 30.

The volume of invoices sold without recourse to various financial institutions which, based on their due date would not have been collected at 31 December 2022, totals Euros 445,185 thousand (Euros 317,054 thousand at December, 2021).

F-63

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(15) Cash and Cash Equivalents

Details of this caption of the consolidated balance sheet at 31 December 2022 and 2021 are as follows:

	Thousands of Euros
	31/12/2022	31/12/2021
Current deposits	5	—
Cash in hand and at banks	547,974	655,493
Total cash and cash equivalents recognized in the balance sheet	547,979	655,493
Restricted cash	—	2,020,118
Total cash and cash equivalents recognized in the statement of cash flows	547,979	2,675,611

As mentioned in note 20, during 2021 the Group issued a bond in two tranches for amounts of Euros 1,400 million and US Dollars 705 million. These funds were held in an escrow account and were released once the transaction with Tiancheng (Germany) Pharmaceutical Holdings AG, whose current corporate name is Grifols Biotest Holdings GmbH, became effective.

(16) Equity

Details of consolidated equity and movement are shown in the consolidated statement of changes in equity.

(a)

Share capital

At 31 December 2022 and 2021, the Company’s share capital amounts to Euros 119,603,705 and comprises:

●

Class A shares: 426,129,798 ordinary shares of Euros 0.25 par value each, subscribed and fully paid and of the same class and series.

●

Class B shares: 261,425,110 non-voting preference shares of 0.05 Euros par value each, of the same class and series, and with the preferential rights set forth in the Company’s by-laws.

The main characteristics of the Class B shares are as follows:

●

Each Class B share entitles its holder to receive a minimum annual preferred dividend out of the distributable profits at the end of each year equal to Euros 0.01 per Class B share provided that the aggregate preferred dividend does not exceed the distributable profits of that year and, subject, according to the commercial law, to the approval of the distribution of dividends by the Company’s shareholders. This preferred dividend is not cumulative if sufficient distributable profits are not obtained in the period.

●

Each Class B share is entitled to receive, in addition to the above-mentioned preferred dividend, the same dividends and other distributions as for one Grifols ordinary share.

●

Each Class B share entitles the holder to its redemption under certain circumstances, if a takeover bid for all or part of the shares in the Company has been made, except if holders of Class B shares have been entitled to participate in the bid on the same terms as holders of Class A shares. The redemption terms and conditions reflected in the Company’s by-laws limit the amount that may be redeemed, requiring that sufficient distributable reserves be available, and limit the percentage of shares to be redeemed in line with the ordinary shares to which the bid is addressed.

●

In the event the Company were to be wound up and liquidated, each Class B share entitles the holder to receive, before any amounts are paid to holders of ordinary shares, an amount equal to the sum of (i) the par value of the Class B share, and (ii) the share premium paid for the Class B share when it was subscribed. In addition to the Class B liquidation preference amount, each holder is entitled to receive the same liquidation amount that is paid for each ordinary share.

F-64

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

These shares are freely transferable.

Since 23 July 2012 the ADSs (American Depositary Shares) representing Grifols’ Class B shares (non-voting shares) have had an exchange ratio of 1:1 in relation to Class B shares, ie.1 ADS represents 1 Class B share. The previous rate was 2 ADS per Class B share.

The Company’s knowledge of its shareholders is based on information provided voluntarily or in compliance with applicable legislation. According to the information available to the Company, there are no interests representing more than 10% of the Company’s total capital at 31 December 2022 and 2021.

At 31 December 2022 and 2021, the number of outstanding shares is equal to the total number of Company shares, less treasury stock.

Movement in outstanding shares during 2022 is as follows:


	Reference	Class A shares	Class B shares

Balance at 1 January 2022		422,185,368	256,354,580
(Acquisition) / disposal of treasury stock	Note 16 (d)	—	(129,254)
Balance at 31 December 2022		422,185,368	256,225,326

Movement in outstanding shares during 2021 is as follows:


	Reference	Class A shares	Class B shares

Balance at 1 January 2021		426,129,798	258,412,946
(Acquisition) / disposal of treasury stock	Note 16 (d)	(3,944,430)	(2,058,366)
Balance at 31 December 2021		422,185,368	256,354,580

(b)

Share premium

Movement in the share premium is described in the consolidated statement of changes in equity, which forms an integral part of this note to the consolidated financial statements.

(c)

Reserves

The drawdown of accumulated gains is subject to legislation applicable to each of the Group companies.

At 31 December 2022, Euros 18.908 thousand equivalent to the carrying amount of development costs pending amortization of certain Spanish companies (Euros 29,486 thousand at 31 December 2021) are, in accordance with applicable legislation, a distribution limitation until these development costs have been amortized.

The movement in this caption of the consolidated balance sheet during the years ended at 31 December 2022, 2021 and 2020 is reflected in the consolidated statement of changes in equity, the most significant movements being detailed below:

F-65

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Legal reserve

Companies in Spain are obliged to transfer 10% of each year’s profits to a legal reserve until this reserve reaches an amount equal to 20% of share capital. This reserve is not distributable to shareholders and may only be used to offset losses if no other reserves are available. Under certain conditions it may be used to increase share capital provided that the balance left on the reserve is at least equal to 10% of the nominal value of the total share capital after the increase.

At 31 December 2022 and 2021 the legal reserve of the Parent amounts to Euros 23,921 thousand which corresponds to 20% of the share capital.

Distribution of the legal reserves of Spanish companies is subject to the same restrictions as those of the Company and at 31 December 2022 and 2021 the balance of the legal reserve of other Spanish companies amounts to Euros 2,066 thousand.

Other foreign Group companies have a legal reserve amounting to Euros 4,137 thousand at 31 December 2022 (Euros 3,805 thousand at 31 December 2021).

Hedging reserve

The hedging reserve includes the cash flow hedge reserve and the costs of hedging reserve, see note 4(i) for details. The cash flow hedge reserve is used to recognise the effective portion of gains or losses on derivatives that are designated and qualify as cash flow hedges, as described in note 29.

The group defers the changes in the forward element of forward contracts and the time value of option contracts in the costs of hedging reserve.

(d)

Treasury stock

The Parent held Class A and B treasury stock equivalent to 1.3% of its capital at 31 December 2022 (1.3% of its capital in Class A and B treasury stock at 31 December 2021).

Treasury stock Class A

Movement in Class A treasury stock during the year ended 31 December 2022 is as follows:


	No. of Class A
	shares	Thousands of Euros
Balance at 1 January 2022	3,944,430	89,959
Disposal Class A shares	—	—
Balance at 31 December 2022	3,944,430	89,959

Movement in Class A treasury stock during the year ended 31 December 2021 is as follows:


	No. of Class A
	shares	Thousands of Euros
Balance at 1 January 2021	—	—
Disposal Class A shares	—	—
Acquisition Class A shares	3,944,430	89,959
Balance at 31 December 2021	3,944,430	89,959

At the meeting held on 11 March 2021, the Board of Directors agreed to implement a program to buy back Grifols’ treasury stock for the purpose of using it as consideration in possible future acquisitions. This Buyback Program began on 12 March 2021 and has been in force until 14 June 2021 and its execution was entrusted to an independent bank.

F-66

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Treasury stock Class B

Movement in Class B treasury stock during 2022 was as follows:


	No. of Class B
	shares	Thousands of Euros
Balance at 1 January 2022	5,070,530	74,230
Disposal Class B shares	(370,746)	(5,428)
Acquisition Class B shares	500,000	3,459
Balance at 31 December 2022	5,199,784	72,261

Movement in Class B treasury stock during 2021 is as follows:


	No. of Class B
	shares	Thousands of Euros
Balance at 1 January 2021	3,012,164	43,734
Disposal Class B shares	(361,530)	(5,248)
Acquisition Class B shares	2,419,896	35,744
Balance at 31 December 2021	5,070,530	74,230

In March 2022, the Group delivered 370,746 treasury stocks (Class B shares) to eligible employees as compensation under the Restricted Share Unit Retention Plan.

In March 2021, the Group delivered 361,530 treasury stocks (Class B shares) to eligible employees as compensation under the Restricted Share Unit Retention Plan.

(e)

Distribution of profit and dividends

The profits of Grifols, S.A. and subsidiaries will be distributed as agreed by respective shareholders at their general meetings.

The proposed distribution of profit of the Parent Grifols, S.A. for the years ended 31 December 2022, and the distribution of profit approved for 2021, presented at the general meeting held on 10 June 2022, is as follows:


	Thousands of Euros
	31/12/2022	31/12/2021
Voluntary reserve	(266,296)	(140,728)
Profit of the Parent	(266,296)	(140,728)

The distribution of profit corresponding to the year ended 31 December 2022 and 2021 are presented in the statement of changes in consolidated equity.

During 2022 no dividend has been paid.

The following dividends were paid in 2021:


	31/12/2021
	% of par value		Euros per share	Thousands of Euros
Ordinary shares	146	%	0.36	154,005
Non-voting shares	729	%	0.36	93,515
Non-voting shares (preferred dividend)	20	%	0.01	2,614
Total dividends paid				250,134

F-67

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

At the general meeting held on 21 May 2021 the shareholders of Grifols S.A. approved the distribution of a preferred dividend of Euros 0.01 for every Class B non-voting share, together with the approval of an ordinary dividend of Euros 0.36 for Class A and Class B share charged to voluntary reserves of the Company for an amount of Euros 247,520 thousand.

During 2022 and 2021 no interim dividend has been paid.

(f) Restricted Share Unit Retention Plan

The Group has set up a Restricted Share Unit Retention Plan (hereinafter RSU Plan) for certain employees (see note 28). This commitment will be settled using equity instruments and the cumulative accrual amounts to Euros 7,304 thousand at 31 December 2022 (Euros 9,838 thousand at 31 December 2021).

(17) Earnings Per Share

(a)	Basic Earnings per share

The calculation of basic earnings per share is based on the profit for the year attributable to the shareholders of the Parent divided by the weighted average number of ordinary shares in circulation throughout the year, excluding treasury stock.

Details of the calculation of basic earnings per share are as follows:


	Thousands of Euros
	31/12/2022	31/12/2021	31/12/2020
Profit for the year attributable to shareholders of the Parent (Thousands of Euros)	208,279	188,726	618,546
Weighted average number of ordinary shares outstanding	679,805,142	681,556,937	685,515,740
Basic earnings per share (Euros per share)	0.31	0.28	0.90

The weighted average number of ordinary shares outstanding (basic) is as follows:


	Number of shares
	31/12/2022	31/12/2021	31/12/2020
Issued shares outstanding at 1 January	679,598,330	685,601,126	685,198,238
Effect of shares issued	—	—	—
Effect of treasury stock	206,812	(4,044,189)	317,502
Weighted average number of ordinary shares outstanding (basic) at 31 December	679,805,142	681,556,937	685,515,740

(b) Diluted Earnings per share

Diluted earnings per share are calculated by dividing profit for the year attributable to shareholders of the Parent by the weighted average number of ordinary shares in circulation considering the diluting effects of potential ordinary shares.

F-68

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The RSU Plan granted by the Group and payable in shares, assumes the existence of dilutive potential shares. Diluted earnings per share have been calculated as follows:


	Thousands of Euros
	31/12/2022	31/12/2021	31/12/2020
Profit for the year attributable to shareholders of the Parent (Thousands of Euros)	208,279	188,726	618,546
Weighted average number of ordinary shares outstanding (diluted)	679,292,729	681,404,922	685,142,749
Diluted earnings per share (Euros per share)	0.31	0.28	0.90

The weighted average number of ordinary shares outstanding diluted has been calculated as follows:


	Number of shares
	31/12/2022	31/12/2021	31/12/2020
Ordinary shares outstanding at 1 January	679,598,330	685,601,126	685,198,238
Shares committed under RSU plan	(512,413)	(152,015)	(372,991)
Effect of shares issued	—	—	—
Effect of treasury stock	206,812	(4,044,189)	317,502
Weighted average number of ordinary shares outstanding (diluted) at 31 December	679,292,729	681,404,922	685,142,749

(18) Non-Controlling Interests

Details of non-controlling interests and movement at 31 December 2022 are as follows:


		Thousands of Euros
				Business
				combinations /
		Balance at		Perimeter	Other	Translation	Balance at
	Reference	31/12/2021	Additions	additions	movements	differences	31/12/2022
Grifols (Thailand) Pte Ltd		4,417	282	—	(23)	103	4,779
Grifols Malaysia Sdn Bhd		3,059	593	—	—	11	3,663
Araclon Biotech, S.A.		240	(833)	—	—	—	(593)
VCN Bioscience, S.L		97	0	—	(97)	—	0
Kiro Grifols, S.L.		284	(312)	—	3	—	(25)
Haema AG		233,542	(4,858)	—	—	—	228,684
BPC Plasma, Inc		305,276	30,086	—	—	19,140	354,502
Grifols Diagnostics Solutions Inc.		1,234,850	46,719	—	111	71,994	1,353,674
Plasmavita Healthcare		11,724	(1,590)	—	—	—	10,134
Haema Plasma Kft		—	(4,074)	17,080	—	(1,067)	11,939
G Pyrenees Research Cntr		—	(7)	1	—	—	(6)
Albimmune SL		—	(742)	1	—	—	(741)
Biotest AG	Note 3	—	(2,397)	356,386	8	7,599	361,596
		1,793,489	62,867	373,468	2	97,780	2,327,606

On 25 April 2022, the Group acquired 70.18% of the shares in Biotest AG. Consequently, the information relating to Biotest, AG corresponds to the period from 1 May to 31 December 2022.

F-69

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Details of non-controlling interests and movement at 31 December 2021 are as follows:


	Thousands of Euros
			Business
			combinations /
	Balance at		Perimeter		Translation	Balance at
	31/12/2020	Additions	additions	Dividends paid	differences	31/12/2021
Grifols (Thailand) Pte Ltd	4,338	218	—	—	(139)	4,417
Grifols Malaysia Sdn Bhd	2,923	810	(843)	—	169	3,059
Araclon Biotech, S.A.	(1,088)	(1,119)	2,447	—	—	240
VCN Bioscience, S.L	316	(219)	—	—	—	97
Kiro Grifols , S.L.	598	(314)	—	—	—	284
Haema AG	231,284	2,258	—	—	—	233,542
BPC Plasma, Inc (formerly Biotest US Corporation)	274,995	8,014	—	—	22,267	305,276
Grifols Diagnostic Solutions, Inc.	1,087,632	65,894	—	(6,503)	87,827	1,234,850
Plasmavita Healthcare	10,665	1,059	—	—	—	11,724
	1,611,663	76,601	1,604	(6,503)	110,124	1,793,489

F-70

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

At 31 December 2022 and 2021, the main items of the statement of financial positions of the most significant non-controlling interests are as follows:


	Thousands of Euros				Thousands of Euros
	31/12/2022				31/12/2021
							BPC Plasma,
	Biotest, AG	Grupo GDS	Haema AG	BPC Plasma, Inc	Grupo GDS	Haema AG	Inc
Non-current assets	585,282	4,175,839	126,051	345,906	3,796,855	121,309	263,921
Current assets	619,513	286,153	40,308	30,242	291,371	57,985	74,206
Total Assets	1,204,795	4,461,992	166,359	376,148	4,088,226	179,294	338,127

Non-current liabilities	701,613	292,416	19,673	54,131	278,620	27,137	53,715
Current liabilities	130,193	93,474	72,675	60,638	91,299	84,117	83,592
Total Liabilities	831,806	385,890	92,348	114,769	369,919	111,254	137,307

Total equity	372,989	4,076,102	74,011	261,379	3,718,307	68,040	200,820

Profit/(loss) for the year	(16,036)	140,678	5,972	48,132	198,416	8,100	34,333

Detail of cash flows of the most significant non-controlling interests is as follows:


	Thousands of Euros
	31/12/2022		31/12/2021
	Biotest, AG	GDS Group	GDS Group

Net cash flows from operating activities	(39,881)	220,566	274,202
Net cash flows from investing activities	(29,358)	(222,612)	(247,441)
Net cash flows from financing activities	91,219	1,914	(26,682)
	21,980	(132)	79

(19) Provisions

Details of provisions at 31 December 2022 and 2021 are as follows:


	Thousands of Euros
	31/12/2022	31/12/2021
Provisions for pensions and similar obligations (a)	94,071	6,717
Other provisions	15,992	17,405
Non-current provisions	110,063	24,122

Trade provisions	56,339	31,407

Current provisions	56,339	31,407

F-71

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The movement in non-current and current provisions is as follows:


	Thousands of Euros
	Reference	31/12/2022	31/12/2021	31/12/2020
Opening balance		55,529	38,446	61,139

Business combinations	Note 3	138,476	32	954
Net charges		12,588	15,664	414
Net reversal		—	—	(21,998)
Net cancellations		(9,091)	(794)	(422)
Transfers		(33,575)	(673)	468
Translation differences		2,475	2,854	(2,109)

Closing balance		166,402	55,529	38,446

(a)

Pension plan

At 31 December 2022, 2021 and 2020, the balance of provisions for pensions and similar mainly includes a provisions made by the Biotest Group in relation to retirement benefit obligations and foreign personal commitments with employment.

Benefits are based on the employee’s length of service and salary. Retirement benefit obligations relate mainly to employees of the Group’s German companies. Similar obligations are foreign obligations payable in a lump sum on retirement and obligations of the Biotest pension savings plan. These plans are voluntary pension plans not subject to statutory or legal obligations. The amount of the pension obligations is mainly dependent on interest rate movements and the life expectancy of the participants.

Assets of Euros 5,676 thousand were held by a trustee, company of the group, in financial year 2022 under a contractual trust arrangement (CTA) as external insolvency insurance for portions of the occupational pension scheme. Since the transferred funds qualify as plan assets in accordance with IAS 19, provisions for pensions and similar obligations were netted with the transferred assets. As a result, provisions for pensions and similar obligations were reduced accordingly.

At 31 December 2022, the net defined benefit liability of the Biotest Group comprises the following:


		Thousands of Euros
		31/12/2022
From pension plans		80,445
From similar obligations		11,046
Net present value of defined benefit obligations		91,491

For pension plans		(4,222)
For similar obligations		(1,454)
Fair value of plan assets		(5,676)

From pension plans		76,223
From similar obligations		9,592
Net defined benefit liability		85,815

F-72

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The costs for the defined benefit plans consist of the following components:


		Thousands of Euros
		31/12/2022
Current service cost		3,517
Net interest expenses		766
Total expenses recognised in profit and loss		4,283

Actuarial losses due to experience adjustments		1,294
Actuarial gains due to changes in financial assumptions		(34,754)
Actuarial gains from changes in demographic assumptions		(6)
Return on plan assets (excluding amounts included in net interest expense)		755
Revaluation recognised directly in other comprehensive income		(32,711)

Defined benefit costs		(28,428)

In financial year 2022, actuarial gains of Euros 32,711 thousand are recognised in other comprehensive income. Of this amount, Euros 34,754 thousand resulted from changes in actuarial assumptions, which is mainly due to the increase in the actuarial interest rate in the main plans in Germany from 1.1% to 3.9%.

F-73

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The following table shows the reconciliation of the net present value of the defined benefit obligation (DBO):


		Thousands of Euros
		31/12/2022
Net present value of defined benefit obligation at 1 May		122,880

Current service cost		3,517
Interest expense		816
Expenses recognised in the statement of profit and loss		4,333

Actuarial losses due to experience adjustments		1,294
Actuarial gains due to changes in financial assumptions		(34,754)
Actuarial gains from changes in demographic assumptions		(6)
Revaluation recognised directly in other comprehensive income		(33,466)

Pension benefits paid		(2,256)

Net present value of defined benefit obligations at 31 December		91,491

The following table shows the reconciliation of the fair value of plan assets:


		Thousands of Euros
		31/12/2022
Fair value of plan assets as of 1 May		4,560

Interest income		50
Income recognised in the consolidated statement of income		50


Return on plan assets (excluding amounts included in net interest expenses)		(755)
Revaluations recognised directly in the statement of comprehensive income		(755)

Contribution by the employer		1,821
Payments from plan assets		—

Fair value of plan assets as of 31 December		5,676

The following payments are expected to be made in subsequent years based on the current pension obligations of the Biotest group:


		Thousands of Euros
		31/12/2022
In the next 12 months		4,394
Between 2 and 5 years		21,629
Between 5 and 10 years		31,124
After 10 years		112,888
Total expected payments		170,035

The weighted average term of the defined benefit plans is 11.7 years as of 31 December 2022.

F-74

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Plan assets of the Biotest group were invested in the following asset classes as of the reporting date:


		Thousands of Euros
		31/12/2022
Cash and cash equivalents		187
Financial investment		1,000
Fund shares		4,489
Fair value of plan assets		5,676

The plan assets transferred to Biotest Vorsorge Trust e.V are invested in accordance with defined investment principles, whereby the maturity or termination option of the financial instruments must always be selected in such a way that the association can meet its payment obligations. In accordance with the investment principles, the assets can be invested in Euro time deposits as well as domestic government bonds, mortgage bonds or fund units in money market funds or corporate bonds, all in Euro. Loans can also be issued to the Biotest Group companies against the corresponding guarantees. A minimum rating of A- is required for all financial instruments. The expected contributions to plan assets amount to Euros 1,896 thousand.

Of the provisions for pensions and similar obligations in the Biotest group, Euros 90,783 thousand relate to pension plans. The calculation of the pension plans is based on the following actuarial assumptions:


	31/12/2022
Discount rate	3.9	%
Expected return on plan assets	1.1	%
Rate of increase for wages and salaries	3.4	%
Rate of interest for pensions	2.2	%
Employee turnover rate	3.0	%

Actuarial assumptions are mainly based on historical empirical values with the exception of the discount rate. The calculation was based on the published Heubeck 2018 G mortality tables.

Under IAS 19.145, the effect of any possible changes to parameters for the underlying assumptions used to calculate the pension obligations must be disclosed in the sensitivity analysis. Only changes that are realistically expected to occur in the following financial year are to be considered.

The actuarial rate of interest, salary trend, pension trend and life expectancy are regarded as material assumptions. These parameters are shown in the following overview together with information on the parameter changes and their impact on the net present value calculation as of 31 December 2022.


	Thousands of Euros
		Impact on the
	Parameter change	pension obligation
Rate of interest	Increase by 50 basis points	(4,906)
Rate of interest	Decrease by 50 basis points	5,414
Salary trend	Increase by 50 basis points	171
Salary trend	Decrease by 50 basis points	(166)
Pension trend	Increase by 100 basis points	6,227
Pension trend	Decrease by 100 basis points	(5,310)
Life expectancy	Increase by one year	2,916

F-75

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

An amount of Euros 11,844 thousand was recognized as expense for defined contribution plans and is broken down as follows:


		Thousands of Euros
		31/12/2022
Defined contribution plans of the Company		134
Employer contributions to statutory pension scheme		11,710
		11,844

(20) Financial Liabilities

This note provides information on the contractual conditions of the Group’s financial liabilities, which are measured at amortized cost, except for the financial derivatives that are valued at fair value. For further information on exposure to interest rate risk, currency risk and liquidity risk and the fair values of financial liabilities, please refer to note 29.

Details at 31 December 2022 and 2021 are as follows:


		Thousands of Euros
Financial liabilities	Reference	31/12/2022	31/12/2021
Non-current bonds	(a)	4,638,444	2,577,465
Senior secured debt	(b)	3,419,058	3,296,025
Other loans	(b)	336,530	480,836
Other non-current financial liabilities	(c)	887,707	838,826
Non-current financial derivatives	Note 29	4,003	—
Non-current lease liabilities	Note 8	914,588	825,157
Loan transaction costs		(239,768)	(249,359)
Total non-current financial liabilities		9,960,562	7,768,950

Current bonds	(a)	150,512	2,270,474
Senior secured debt	(b)	8,904	—
Other loans	(b)	477,065	165,139
Other current financial liabilities	(c)	113,680	43,234
Current financial derivatives	Note 29	733	875
Current lease liabilities	Note 8	102,356	48,567
Loan transaction costs		(57,564)	(89,998)
Total current financial liabilities		795,686	2,438,291

(a)

Senior Notes

Detail of Senior Notes at 31 December 2022 are as follows:


	Thousands of Euros
	Issue date	Company	Nominal value	Currency	Annual coupon		Maturity
	18/04/2017	Grifols, S.A.	1,000,000	Euros	3.20	%	2025
Unsecured senior notes	05/10/2021	Grifols Escrow Issuer S.A.	1,400,000	Euros	3.875	%	2028
	05/10/2021	Grifols Escrow Issuer S.A.	705,000	US dollar	4.750	%	2028

Secured senior notes	15/11/2019	Grifols, S.A.	770,000	Euros	2.25	%	2027
	15/11/2019	Grifols, S.A.	905,000	Euros	1.625	%	2025

The bonds issued by Grifols, S.A. in 2017 and 2019 were admitted to listing on the Irish Stock Exchange on the same issue date.

F-76

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

On 5 October 2021, Grifols Escrow Issuer, S.A. closed the issuance of a senior unsecured corporate bond (Senior Unsecured Notes) in two tranches for amounts of Euros 1,400 million and US Dollars 705 million. Both tranches mature in 2028, accrue an annual coupon of 3.875% and 4.750%, respectively and are listed on the Irish Stock Exchange.

The proceeds from the bonds were used to finance the Euros 1,100 million acquisition of the entire share capital of Tiancheng (Germany) Pharmaceutical Holdings AG, whose current corporate name is Grifols Biotest Holdings GmbH, which holds 89.88% of the ordinary shares of Biotest AG and 1.08% of the preferred shares. In addition, the proceeds will also be used to finance the voluntary public offering for the remaining ordinary and preferred shares of Biotest AG.

Details of movement in the Senior Notes at 31 December 2022 are as follows:


	Thousands of Euros
	Opening
	outstanding balance		Exchange	Closing outstanding
	01/01/2022	Cancellation	differences	balance 31/12/22
Senior unsecured corporate notes 2017	1,000,000	—	—	1,000,000
Senior secured corporate notes 2019	1,675,000	(97,535)	—	1,577,465
Senior unsecured corporate notes Euros 2021	1,400,000	—	—	1,400,000
Senior unsecured corporate notes US Dollars 2021	622,462	—	38,517	660,979
	4,697,462	(97,535)	38,517	4,638,444

On 2 December 2021, Grifols, S.A. announced a repurchase offer for the same price plus unpaid accrued interests of the mentioned bonds, up to the equivalent in Euros of US Dollars 110,317 thousand. The agreement with the bondholders was closed in January 2022.

Details of movement in the Senior Notes at 31 December 2021 are as follows:


	Thousands of Euros
	Opening			Closing
	outstanding balance		Exchange	outstanding balance
	01/01/21	Issue	differences	31/12/21
Senior unsecured corporate notes 2017	1,000,000	—	—	1,000,000
Senior secured corporate notes 2019	1,675,000	—	—	1,675,000
Senior unsecured corporate notes Euros 2021	—	1,400,000	—	1,400,000
Senior unsecured corporate notes US Dollars 2021	—	598,970	23,492	622,462
	2,675,000	1,998,970	23,492	4,697,462

At 31 December 2022 and 2021 the current obligations caption includes the issue of bearer promissory notes to Group employees, as follows:


	Thousands of Euros
	31/12/2022		31/12/2021
Issue date	04/05/2022		04/05/2021
Maturity date	04/05/2023		04/05/2022
Nominal amount of promissory notes (Euros)	3,000		3,000
Interest rate	3.00	%	2.50	%
Promissory Notes subscribed	12,054		119,325
Buy-backs or redemptions	(1,938)		(1,740)
Interest pending accrual	(1,176)		(975)

F-77

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(b)

Loans and borrowings

Details of loans and borrowings at 31 December 2022 and 2021 are as follows:


					Thousands of Euros
					31/12/2022		31/12/2021
					Amount	Carrying	Amount	Carrying
Credit	Currency	Interest rate	Date awarded	Maturity date	extended	amount	extended	amount
Senior debt - Tranche B	Euros	Euribor + 2.25%	15/11/2019	15/11/2027	1,360,000	1,255,285	1,360,000	1,258,554
Senior debt - Tranche B	US Dollars	Libor + 2.00%	15/11/2019	15/11/2027	2,343,896	2,163,773	2,227,171	2,037,471
Total senior debt					3,703,896	3,419,058	3,587,171	3,296,025

EIB Loan	Euros	2.40%	20/11/2015	20/11/2025	100,000	21,250	100,000	31,875
EIB Loan	Euros	2.02%	22/12/2017	22/12/2027	85,000	42,500	85,000	53,125
EIB Loan	Euros	2.15%	25/09/2018	25/09/2028	85,000	53,125	85,000	63,750
Total EIB Loan					270,000	116,875	270,000	148,750

Revolving Credit	US Dollars	Libor + 1.5%	15/11/2019	15/11/2025	937,559	—	882,924	330,000
Total Revolving Credit					937,559	—	882,924	330,000

Other non-current loans	Euros	1.76% - Euribor+ 6.70%			235,000	219,655	10,000	2,086
Loan transaction costs					—	(163,476)	—	(197,703)
Non-current loans and borrowings					5,146,455	3,592,112	4,750,095	3,579,158

Thousands of Euros

31/12/2022

31/12/2021

Credit

Currency

Interest rate

Date awarded

Maturity date

Amount extended

Carrying amount

Amount extended

Carrying amount

Senior debt - Tranche B

Euros

Euribor + 2.25%

15/11/2019

15/11/2027

(*)

3,269

(*)

—

Senior debt - Tranche B

US Dollars

Libor + 2.00%

15/11/2019

15/11/2027

(*)

5,635

(*)

—

Total senior debt

—

8,904

—

EIB Loan

Euros

2.40%

20/11/2015

20/11/2025

(*)

10,625

(*)

10,625

EIB Loan

Euros

2.02%

22/12/2017

22/12/2027

(*)

21,250

(*)

21,250

Total EIB Loan

—

31,875

—

31,875

Other current loans

0.10% - 3.75%

481,163

445,190

211,901

133,265

Loan transaction costs

—

(36,559)

—

(37,245)

Current loans and borrowings

481,163

449,410

211,901

127,895

(*) See amount granted under non-current debt

Current loans and borrowings include accrued interest amounting to Euros 12,592 thousand at 31 December 2022 (Euros 7,682 thousand at 31 December 2021).

Between 2015 and 2018, the Group arranged three long-term loans with the European Investment Bank totaling Euros 270,000 thousand (divided into two loans of Euros 85,000 thousand and one loan of Euros 100,000 thousand) to support its investments in R&D, mainly focused on the search for new therapeutic indications for plasma-derived protein therapies. The financial terms include a fixed interest rate, a maturity of 10 years with a grace period of 2 years. At 31 December 2022, the carrying amount of the loans obtained from the European Investment Bank amounts to Euros 148,750 thousand (Euros 180,625 thousand at 31 December 2021).

Senior Secured debt

The Senior Secured debt consists of an eight-year loan divided into two tranches: US Tranche B and Tranche B in Euros. The terms and conditions of both tranches are as follows:

◾

US Dollar Tranche B:

●

Original principal amount of US Dollars 2,500 million.

●

Applicable margin of 200 basis points (bp) pegged to US Libor.

●

Quasi-bullet repayment structure.

●

Maturity in 2027.

F-78

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

◾

Tranche B in Euros:

●

Original principal amount of Euros 1,360 million.

●

Applicable margin of 225 basis points (bp) pegged to Euribor.

●

Quasi-bullet repayment structure.

●

Maturity in 2027.

Details of Tranche B by maturity at 31 December 2022 are as follows:


	US Tranche B			Tranche B in Euros
		Principal in Thousands	Principal in		Principal in Thousands of
	Currency	of US Dollars	Thousands of Euros	Currency	Euros
Maturity
2023	US Dollars	6,015	5,635	Euros	3,269
2024	US Dollars	24,058	22,557	Euros	13,076
2025	US Dollars	24,058	22,557	Euros	13,076
2026	US Dollars	24,058	22,557	Euros	13,076
2027	US Dollars	2,235,700	2,096,101	Euros	1,216,058
Total	US Dollars	2,313,889	2,169,407	Euros	1,258,555

The borrowers of the total Senior secured debt are Grifols, S.A. and Grifols Worldwide Operations USA, Inc.

At 31 December 2021, the Group redeemed in advance an amount of Euros 74,246 thousand from Tranche B in Euros and Euros 124,798 thousand from Tranche B in US Dollars, using part of the amount received from GIC (sovereign wealth fund in Singapore).

Revolving credit facility

On 7 May 2020, the Group concluded the upsize of the multi-currency revolving credit facility from US Dollars 500 million to US Dollars 1,000 million with maturity in 2025 and an applicable margin of 150 basis points (bp) pegged to US Libor.

Movement in the Revolving Credit Facility is as follows:


	Thousands of Euros
	31/12/2022	31/12/2021
Drawn opening balance	330,000	—
Drawdowns	591,537	829,636
Repayments	(916,958)	(525,979)
Translation differences	(4,579)	26,343
Drawn closing balance	—	330,000

The costs of refinancing the revolving credit facility in 2020 amounted to Euros 9.3 million.

Guarantors

The Notes, the Senior Term Loans and the Revolving Loans are secured by Grifols, S.A. and certain significant subsidiaries of Grifols, S.A., which together with Grifols, S.A., represent, in the aggregate, at least 60% of the consolidated EBITDA of the Group.

The Notes are guaranteed on a senior secured basis by subsidiaries of Grifols, S.A. that are guarantors and co-borrower under the New Credit Facilities. The guarantors are Grifols Worldwide Operations Limited, Grifols Biologicals Inc., Grifols Shared Services North America, Inc., Grifols Therapeutics, Inc., Instituto Grifols, S.A., Grifols Worldwide Operations USA, Inc., Grifols USA, Llc. and Grifols International, S.A.

F-79

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(c)

Other financial liabilities

Details of other financial liabilities at 31 December 2022 and 2021 are as follows:


		Thousands of Euros
Other financial liabilities	Reference	31/12/2022	31/12/2021
Non-current debt with GIC (sovereign wealth fund in Singapore)	(i)	833,664	829,937
Non-current preferential loans		4,943	7,029
Other non-current financial liabilities	(iii)	49,100	1,860
Total other non-current financial liabilities		887,707	838,826

Current debt with GIC (sovereign wealth fund in Singapore)	(i)	86,284	—
Current preferential loans		1,633	2,607
Outstanding payments of acquisitions	(ii)	—	39,075
Other current financial liabilities	(iii)	25,763	1,552
Total other current financial liabilities		113,680	43,234

(i)Debt with GIC – Singapore sovereign wealth fund

In November 2021 approval was received from the pertinent authorities to close the agreement with GIC (Sovereign Fund of Singapore), announced in June 2021, whereby the Group received an amount of US Dollars 990 million in exchange for 10 ordinary Class B shares in Biomat USA and 9 ordinary Class B shares in a new sub-holding, Biomat Newco, created for this purpose.

The main terms and conditions of the agreement with GIC were:

●

The distribution of annual preferential dividends to GIC equivalent to US Dollar 4,168 thousand per share, following majority approval of the Board of Directors of Biomat USA and Biomat Newco;

●

The redemption right with respect to Class B stock for US Dollars 52,105 thousand per share, is subject to unilateral approval of the Class B stockholders (with one share annually redeemable starting as of 31 December 2022). At 31 December 2022 no shares have been redeemed.

●

From 1 December 2036, holders of Class B shares of Biomat USA will have the right to request Biomat USA to redeem up to the total of the Class B shares they hold at a value of US Dollars 52,105,263.16 per share. Class B shareholders of Biomat Newco will have the same right with respect to Biomat Newco.

●

In the event that the dividends or the annual redemption at Biomat USA or Biomat NewCo, where applicable, is not approved, is partially paid, or is otherwise not paid, GIC holds the right to obtain in exchange thereof an undetermined number of shares among the following alternatives (i) an additional number of shares in Biomat USA, in lieu of the non-payment occurred at Biomat USA, (ii) an additional number of shares in Biomat NewCo, in lieu of the non-payment occurred at Biomat NewCo; or (iii) a number of ADRs of Grifols, S.A. in lieu of either (i) or (ii).

●

Grifols holds the right to redeem all of the Class B stock from the fifth year onwards;

●

In the event of liquidation of Biomat USA and Biomat Newco, GIC shall have the right to the preferential liquidation of US Dollars 52,105 thousand per share, but shall not have any rights over the liquidation of net assets of these companies.

Current debt with GIC includes Euros 37,432 thousand of accrued interests plus Euros 48,852 thousand related to the share redemption right.

F-80

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Grifols did not have the discretional right to avoid payment in cash and therefore, the instrument was recorded as a financial liability at 31 December 2022 and at 31 December 2021.

The Group does not lose control of Biomat USA and continues overseeing all aspects of the Biomat Group’s administration and operations.

(ii)Outstanding payments of acquisitions

At 31 December 2021, the balance corresponded to the outstanding amount payable relating to the Gigagen, Inc. acquisition (see note 3).

(iii)Other non-current and current financial liabilities

At 31 December 2022, “other non-current financial liabilities” include mainly an unsecured long-term loan in the amount of Euros 44.3 million and a repayment obligation arising from a supply contract amounting to Euros 5.9 million, both corresponding to Biotest, AG, a company acquired by the Group on 25 April 2022 (see note 3).

At 31 December 2022, “other current financial liabilities” include mainly distributor commission liabilities of Euros 15.5 million corresponding to Biotest, AG, a company acquired by the Group on 25 April 2022 (see note 3).

Details of the maturity of other financial liabilities are as follows:


	Thousands of Euros
	31/12/2022	31/12/2021
Maturity at:
Up to one year	113,680	43,234
Two years	54,506	88,144
Three years	50,086	88,947
Four years	50,408	89,027
Five years	49,483	88,871
Over five years	683,224	483,837
	1,001,387	882,060

F-81

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(d)

Changes in liabilities derived from financing activities


	Thousands of Euros
			Senior Secured
			debt & Other	Finance lease	Other financial
	Reference	Bonds	loans	liabilities	liabilities	Total
Carrying amount at 1 January 2020		2,677,202	3,687,739	740,690	101,749	7,207,380
New financing		116,352	—	—	—	116,352
Refunds		(105,564)	(66,047)	(79,037)	(22,681)	(273,329)
Interest accrued		81,880	124,840	35,084	2,073	243,877
Other movements		—	(10,468)	88,867	4,837	83,236
Interest paid/received		(60,355)	(95,433)	—	—	(155,788)
Business combinations	Note 3	—	—	—	34,778	34,778
Foreign exchange differences		—	(172,246)	(52,105)	(5,443)	(229,794)
Balance at 31 December 2020		2,709,515	3,468,385	733,499	115,313	7,026,712
New financing		2,126,979	329,555	—	829,937	3,286,471
Refunds		(114,480)	(266,659)	(82,692)	(3,507)	(467,338)
Interest accrued		100,948	130,327	35,786	2,165	269,226
Other movements		(33,920)	5,445	135,697	729	107,951
Interest paid/received		(64,031)	(91,089)	—	—	(155,120)
Business combinations	Note 3	—	—	—	(64,749)	(64,749)
Foreign exchange differences		18,523	131,084	51,434	3,047	204,088
Balance at December 31, 2021		4,743,534	3,707,048	873,724	882,935	10,207,241
New financing		112,557	990,537	—	16,448	1,119,542
Refunds		(217,058)	(944,386)	(104,287)	(15,685)	(1,281,416)
Interest accrued		176,317	206,901	43,640	84,586	511,444
Other movements		744	(744)	123,792	—	123,792
Interest paid/received		(150,595)	(156,461)	—	(43,331)	(350,387)
Business combinations	Note 3	(1,804)	121,597	30,290	31,016	181,099
Foreign exchange differences		27,965	117,029	49,785	50,154	244,933
Balance at 31 December 2022		4,691,660	4,041,521	1,016,944	1,006,123	10,756,248

(21) Trade and Other Payables

Details are as follows:


	Thousands of Euros
	31/12/2022	31/12/2021
Suppliers	731,918	628,992
VAT payable	11,133	13,011
Taxation authorities, withholdings payable	7,986	7,267
Social security payable	23,627	39,191
Other public entities	71,984	92,365
Other payables	114,730	151,834
Current income tax liabilities	15,687	4,516
	862,335	785,342

Suppliers

Details of balances with related parties are shown in note 30.

The Group’s exposure to currency risk and liquidity risk associated with trade and other payables is described in note 29.

F-82

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(22) Other Current Liabilities

Details at 31 December are as follows:


	Thousands of Euros
	31/12/2022	31/12/2021
Salaries payable	199,584	175,710
Other payables	4,069	23
Deferred income	27,642	32,970
Advances received	10,192	10,569
Other current liabilities	241,487	219,272

At 31 December 2022, and 31 December 2021, the advances received are contract liabilities relate to unperformed performance obligations for which Grifols has received a consideration from the customer.

(23) Net Revenues

Net revenues are mainly generated from the sale of goods.

The distribution of net consolidated revenues for 2022, 2021 and 2020 by segment is as follows:


	Thousands of Euros
	31/12/2022	*31/12/2021 ()**	*31/12/2020 ()**
Biopharma	5,005,382	3,814,983	4,242,502
Diagnostic	671,292	779,108	775,889
Bio supplies	146,076	115,811	133,221
Others	250,165	266,461	222,521
Intersegments	(8,948)	(43,245)	(34,095)
	6,063,967	4,933,118	5,340,038

* As a consequence of the review of transactions and balances allocations by segments, the comparative figures for the fiscal year 2021 and 2020 have been adjusted accordingly.

The geographical distribution of net consolidated revenues is as follows:


	Thousands of Euros
	31/12/2022	31/12/2021	31/12/2020
USA and Canada	3,855,607	3,154,549	3,599,746
Spain	320,631	362,407	339,169
European Union	711,579	544,042	495,323
Rest of the world	1,176,150	872,120	905,800
Consolidated	6,063,967	4,933,118	5,340,038

F-83

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Details of discounts and other reductions in gross income are as follows:


	Thousands of Euros
	31/12/2022	31/12/2021	31/12/2020
Gross sales	7,720,463	6,234,277	6,806,005
Chargebacks	(1,402,218)	(1,101,896)	(1,247,153)
Cash discounts	(76,547)	(60,019)	(68,912)
Volume rebates	(66,280)	(49,043)	(57,858)
Medicare and Medicaid	(64,438)	(53,440)	(61,089)
Other discounts	(47,013)	(36,761)	(30,955)
Net sales	6,063,967	4,933,118	5,340,038

Movement in discounts and other reductions in gross income during 2022 is as follows:


	Thousands of Euros
		Cash	Volume	Medicare /	Other
	Chargebacks	discounts	rebates	Medicaid	discounts	Total
Balance at 31 December 2021	159,846	5,701	21,246	25,614	10,585	222,992
Current estimate related to sales made in current and previous periods	1,402,218	76,547	66,280	64,438	47,013	1,656,496	(1)
(Actual returns or credits in current period related to sales made in current period)	(1,196,670)	(69,960)	(43,494)	(43,332)	(28,818)	(1,382,274)	(2)
(Actual returns or credits in current period related to sales made in prior periods)	(109,726)	(6,442)	(21,501)	(21,271)	(2,935)	(161,875)	(3)
Translation differences	8,845	338	1,034	1,587	138	11,942
Balance at 31 December 2022	264,513	6,184	23,565	27,036	25,983	347,281

(1)

Net impact in income statement: estimate for the current year plus prior years’ adjustments. Adjustments made during the year corresponding to prior years’ estimates have not been significant.

(2)

Amounts credited and posted against provisions for current period

(3)

Amounts credited and posted against provisions for prior period

F-84

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Movement in discounts and other reductions to gross income during 2021 was as follows:


	Thousands of Euros
		Cash	Volume	Medicare /	Other
	Chargebacks	discounts	rebates	Medicaid	discounts	Total
Balance at 31 December 2020	190,869	6,795	29,670	28,451	11,763	267,548
Current estimate related to sales made in current and previous periods	1,101,896	60,019	49,043	53,440	36,761	1,301,159	(1)
(Actual returns or credits in current period related to sales made in current period)	(1,080,304)	(54,554)	(29,617)	(42,890)	(27,036)	(1,234,401)	(2)
(Actual returns or credits in current period related to sales made in prior periods)	(65,681)	(6,964)	(29,304)	(15,422)	(11,057)	(128,428)	(3)
Translation differences	13,066	405	1,454	2,035	154	17,114
Balance at 31 December 2021	159,846	5,701	21,246	25,614	10,585	222,992

Movement in discounts and other reductions to gross income during 2020 was as follows:


	Thousands of Euros
		Cash	Volume	Medicare /	Other
	Chargebacks	discounts	rebates	Medicaid	discounts	Total
Balance at 31 December 2019	90,488	5,897	28,705	18,911	15,071	159,072
Current estimate related to sales made in current and previous periods	1,247,153	68,912	57,858	61,089	30,955	1,465,967	(1)
(Actual returns or credits in current period related to sales made in current period)	(1,033,053)	(61,387)	(27,798)	(34,564)	(30,509)	(1,187,311)	(2)
(Actual returns or credits in current period related to sales made in prior periods)	(97,504)	(6,030)	(26,481)	(14,526)	(3,615)	(148,156)	(3)
Translation differences	(16,215)	(597)	(2,614)	(2,459)	(139)	(22,024)
Balance at 31 December 2020	190,869	6,795	29,670	28,451	11,763	267,548

(24) Personnel Expenses

Details of personnel expenses by function are as follows:


	Thousands of Euros
	31/12/2022	31/12/2021	31/12/2020
Cost of sales	1,343,991	999,347	1,058,132
Research and development	159,766	138,629	110,682
Selling, general & administration expenses	472,413	401,390	383,851
	1,976,170	1,539,366	1,552,665

F-85

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Details by nature are as follows:


		Thousands of Euros
	Reference	31/12/2022	31/12/2021	31/12/2020
Wages and salaries		1,600,617	1,231,812	1,234,761
Contributions to pension plans	Note 28	40,994	31,757	33,226
Other social charges		33,506	27,387	27,462
Social Security		301,053	248,410	257,216
		1,976,170	1,539,366	1,552,665

(25) Expenses by Nature

(a) Amortization and depreciation

Expenses for the amortization and depreciation of intangible assets, right of use assets and property, plant and equipment, incurred during 2022, 2021 and 2020 classified by functions are as follows:


	Thousands of Euros
	31/12/2022	31/12/2021	31/12/2020
Cost of sales	275,512	211,676	198,310
Research and development	44,295	55,311	32,814
Selling, general & administration expenses	88,057	92,780	90,409
	407,864	359,767	321,533

(b) Other operating income and expenses

Other operating income and expenses incurred during 2022, 2021 and 2020 by function are as follows:


	Thousands of Euros
	31/12/2022	31/12/2021	31/12/2020
Cost of sales	682,636	535,058	500,415
Research and development	164,229	165,884	156,994
Selling, general & administration expenses	579,067	532,056	499,218
	1,425,932	1,232,998	1,156,627

F-86

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Details by nature are as follows:


	Thousands of Euros
	Reference	31/12/2022	31/12/2021	31/12/2020
Changes in trade provisions		8,743	4,844	(14,059)
Professional services		305,215	258,371	265,539
Commissions		40,397	28,671	27,147
Supplies and auxiliary materials		251,120	197,893	187,370
Operating leases	Note 8	38,994	32,945	28,176
Freight		190,692	148,797	137,466
Repair and maintenance expenses		218,971	150,308	147,039
Advertising		90,652	71,280	55,073
Insurance		46,090	38,724	30,776
Royalties		13,646	48,446	40,634
Travel expenses		49,356	30,334	23,005
External services		83,296	74,858	71,240
R&D Expenses		94,903	106,873	101,410
Gains on disposal of assets		(22,236)	—	—
Other		16,093	40,654	55,811
Other operating income&expenses		1,425,932	1,232,998	1,156,627

(26) Finance Result

Details are as follows:


	Thousands of Euros
	Reference	31/12/2022	31/12/2021	31/12/2020
Finance income		33,859	11,551	8,021
Finance costs from Senior Unsecured Notes		(181,149)	(104,944)	(85,182)
Finance costs from senior debt	Note 20 (b)	(161,466)	(111,719)	(119,140)
Finance costs from other financial liabilities		(81,914)	—	—
Finance costs from sale of receivables	Note 14	(18,201)	(10,292)	(10,964)
Capitalized interest	Note 9	25,184	18,636	16,606
Finance lease expenses	Note 8	(45,198)	(35,786)	(35,205)
Other finance costs		(33,780)	(33,889)	(15,754)
Finance costs		(496,524)	(277,994)	(249,639)
Change in fair value of financial instruments		11,999	246	55,703
Exchange differences		7,725	(11,602)	8,246
Finance result		(442,941)	(277,799)	(177,669)

The finance costs from other financial liabilities heading for 2022 includes finance costs related to the interest on the funds received by GIC amounting 81,914 thousand (see note 20 (c)).

During 2022 the Group has capitalized interest at a rate of between 4.43% and 5.44% based on the financing received (between 3.71% and 4.15% during 2021).

F-87

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

“Change in fair value of financial instruments” at 31 December 2020 includes the difference between the contractual right value recognized at 31 December 2019 and the quoted value of SRAAS at 30 March 2020 for an amount of Euros 56,526 thousand (see note 10).

(27) Taxation

Grifols, S.A. is authorized to file consolidated tax returns in Spain with Grifols Movaco, S.A., Laboratorios Grifols, S.A., Instituto Grifols, S.A., Biomat, S.A., Grifols Viajes, S.A., Grifols International, S.A., Grifols Engineering, S.A., Gripdan Invest, S.L., Araclon Biotech, Aigües Minerals de Vilajuiga, S.A. and VCN Biosciences, S.L. Grifols, S.A., in its capacity as Parent, is responsible for the filing and settlement of the consolidated tax return. Under prevailing tax law, Spanish companies pay 25% tax, which may be reduced by certain deductions.

The North American company Grifols Shared Services North America, Inc. is also authorized to file consolidated tax returns in the USA with Grifols Biologicals Inc., Grifols USA, LLC., Biomat USA, Inc., Grifols Therapeutics Inc., Talecris Plasma Resources, Inc, Interstate Blood Bank, Inc. and Goetech, LLC.. The profits of the companies domiciled in the USA, determined in accordance with prevailing tax legislation, are subject to tax of approximately 22% of taxable income, which may be reduced by certain deductions.

Grifols assesses the effect of uncertain tax treatments and recognizes the effect of the uncertainty on taxable earnings. At 31 of December 2022 and 2021, the potential obligations deriving from tax claims are properly covered. There are no lawsuits or uncertain tax treatments that are individually material.

Law 38/2022 has incorporated a temporary measure with effect for tax periods beginning in 2023, limiting the amount of the individual tax losses of each of the entities comprising the tax group for corporate income tax purposes by 50%. Under the terms in which this measure has been approved, it will have an impact on the use of tax loss carryforwards by the consolidated tax group Grifols S.A. The group is currently evaluating the impact of this measure and the alternatives that may mitigate this effect, although it is not possible to quantify this impact at this time.

The Pilar 2 Law proposes to establish a worldwide minimum taxation of 15% in Corporate Income Tax (IS) for those companies with a turnover of more than 750 M€. The group is currently evaluating the impact of this measure; however it is not expected to have a significant impact on its consolidated financial statements.

F-88

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(a)

Reconciliation of accounting and taxable income

Details of the income tax expense and income tax related to profit for the year are as follows:


	Thousands of Euros
	31/12/2022	31/12/2021	31/12/2020

Profit before income tax from continuing operations	361,257	350,453	878,629

Tax at 25%	90,313	87,613	219,657
Permanent differences	(30,796)	2,503	(7,181)
Effect of different tax rates	9,953	(8,720)	(30,686)
Tax credits (deductions)	3,667	(14,998)	(14,980)
Prior year income tax expense	12,685	18,908	517
Other income tax expenses/(income)	4,289	(180)	2,312
Total income tax expense	90,111	85,126	169,639

Deferred tax	(15,138)	17,754	43,138
Current tax	105,249	67,372	126,501
Total income tax expense	90,111	85,126	169,639

The effect of the different tax rates is basically due to a change of country mix in profits

F-89

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(b)

Deferred tax assets and liabilities

Details of deferred tax assets and liabilities are as follows:


	Tax effect
	31/12/2022	31/12/2021	31/12/2020

Assets
Provisions	20,511	8,387	3,942
Inventories	67,557	47,908	59,129
Tax credits (deductions)	33,921	26,425	57,896
Tax loss carryforwards	58,159	51,750	53,063
Other	6,197	19,993	11,004
Subtotal, assets	186,345	154,463	185,034
Goodwill	(3,063)	(2,106)	(30,040)
Fixed assets, amortisation and depreciation	(16)	3,151	(3,011)
Intangible assets	(1,349)	(3,001)	(2,062)
Other	(6,994)	—	—
Subtotal, net liabilities	(11,422)	(1,956)	(35,113)
Deferred assets, net	174,923	152,507	149,921

Liabilities
Goodwill	(337,948)	(272,596)	(215,907)
Intangible assets	(669,316)	(288,819)	(270,145)
Fixed assets	(92,811)	(86,899)	(78,325)
Debt cancellation costs	(50,666)	(61,543)	(66,720)
Subtotal, liabilities	(1,150,741)	(709,857)	(631,097)
Tax loss carryforwards	2,993	2,160	12,024
Tax credits (deductions)	14,578	—	—
Inventories	652	5,532	1,673
Provisions	70,206	37,671	36,663
Other	27,489	30,510	23,924
Subtotal, net assets	115,918	75,873	74,284
Net deferred Liabilities	(1,034,823)	(633,984)	(556,813)

Movement in deferred tax assets and liabilities is as follows:


	Thousands of Euros
Deferred tax assets and liabilities	31/12/2022	31/12/2021	31/12/2020
Balance at 1 January	(481,477)	(406,892)	(340,803)
Movements during the year	15,138	(17,754)	(43,138)
Business combination (note 3)	(361,051)	(16,400)	(47,988)
Translation differences	(32,510)	(40,431)	25,037
Balance at 31 December	(859,900)	(481,477)	(406,892)

The Spanish companies have opted to apply accelerated depreciation to certain additions to property, plant and equipment, which has resulted in the corresponding deferred tax liability.

The remaining assets and liabilities recognized in 2022, 2021 and 2020 were recognized in the statement of profit and loss.

Estimated net deferred tax assets to be reversed in a period of less than 12 months amount to Euros 112,274 thousand at 31 December 2022 (Euros 57,183 thousand at 31 December 2021).

F-90

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The majority of the tax deductions pending application from Spanish companies related mainly to research and development, mature in 18 years. Likewise, the Group estimates that practically the entire amount will be applied in five years.

Tax loss carryforwards pending to be offset derived from the US companies are available for 20 years from their date of origin whilst tax losses carryforwards pending to be offset from Spanish companies registered in the Basque Country are available for 15 years and there is no maturity date for other remaining Spanish companies. The Group estimates that of the total amount of tax credits for tax losses recognized in the balance sheet at 31 December 2022 for an amount of Euros 61,152 thousand, approximately Euros 48,453 thousand will be recovered in a period of less than 5 years.

The Group has not recognized as deferred tax assets the tax effect of the unused tax loss carryforwards of Group companies, which amount to Euros 121,486 thousand (Euros 123,407 thousand at 31 December 2021). The amount of unrecognized deferred tax liabilities associated with investments in subsidiaries amounted to Euros 78,947 thousand as of 31 December 2022 (Euros 52,119 thousand as of 31 December 2021).

The commitments from Spanish companies from the reversal of deferred tax related to provisions of investments in subsidiaries are not significant.

(c)

Years open to inspection

Under prevailing legislation, taxes cannot be considered to be definitively settled until the returns filed have been inspected by the taxation authorities, or the prescription period has elapsed.

The main tax audits currently open in the Group are as follows:

●

Certain companies of the Group domiciled in Spain were subject to an inspection by the Spanish State Tax Administration Agency in relation to Corporate Income Tax for the years 2014, 2015 and 2016 and Value Added Tax for the years 2015 and 2016.

As a result of said procedure, the State Tax Administration Agency issued assessments containing the results of the inspection, where it is indicated that the treatment of certain transactions and computations mainly related to Transfer Pricing should be adjusted, taking into consideration different interpretations related to the allocation of taxable bases between different jurisdictions. With respect to Corporate Income Tax, the deductibility of certain expenses for the computation of the tax payable has been questioned. These assessments were signed in conformity by the Group on 8 November 2021. It should be noted that no penalties were imposed on any of the Group companies for any of the taxes subject to verification.

The results of the inspection did not have a significant impact on the Group’s consolidated financial statements, and the differences determined by the State Tax Administration Agency were recorded as part of the current tax included under the heading “Current tax liabilities” in the Consolidated Balance Sheet as of 31 December 2021.

If the result of the procedure is considered to be replicable to years not reviewed and open to inspection, the Group estimated that it was not necessary to record provisions in the consolidated financial statements mainly because the number of transactions that gave rise to the aforementioned assessments has significantly decreased since the years in which they were inspected.

Likewise, having adjusted the allocation of taxable income in accordance with the aforementioned assessments for the purposes of their consideration for the determination of Transfer Pricing, the Group now has a legal right to recover certain amounts from the corresponding Administration, in accordance with the provisions of the European Convention on International Commercial Arbitration with respect to international double taxation. The minimum amount to be recovered, upon which its realization is virtually certain, was recorded as a non-current receivable included in the caption “other payable” as of 31 December 2021.

F-91

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

●

Grifols Shared Services North America, Inc. and subsidiaries: In 2020 notification of an inspection was received relating to the State Income Tax for the fiscal years 2017 and 2018.

●

Certain Group companies domiciled in Spain were notified in July 2022 of the inspection by the Spanish State Tax Administration Agency in relation to Corporation Tax for the years 2017 to 2019 and Value Added Tax, personal income tax, non-resident income and capital income for the years 2018 and 2019.

Group management does not expect any significant liability to derive from these inspections.

Based on its experience of the different tax inspections in the different jurisdictions in which Grifols operates, the Group considers it unlikely that there will be a scenario of discrepancy with the taxation authorities that will require significant adjustments to be made to the tax result or to the asset and/or liability balances relating to corporate income tax.

(28) Other Commitments with Third Parties and Other Contingent Liabilities

(a)

Guarantees

The Group has no significant guarantees extended to third parties.

(b)

Guarantees committed with third parties

The Group has no significant guarantees extended to third parties, except for those described in note 20.

(c)

Obligations with personnel

The Group’s annual contribution to defined contribution pension plans of Spanish Group companies for 2022 has amounted to Euros 1,033 thousand (Euros 948 thousand for 2021).

In successive years this contribution will be defined through labor negotiations.

In the event that control is taken of the Company, the Group has agreements with 45 employees/directors whereby they can unilaterally rescind their employment contracts with the Company and are entitled to termination benefits ranging from two to five years’ salary.

The Group has contracts with six executives entitling them to termination benefits ranging from one to four years of their salary in different circumstances.

Restricted Share Unit Retention Plan

For the annual bonus, the Group established a Restricted Share Unit Retention Plan (RSU Plan), for eligible employees. Under this plan, employees can choose to receive up to 50% of their yearly bonus in non-voting Class B ordinary shares (Grifols Class B Shares) or Grifols American Depositary Shares (Grifols ADS), and the Group will match this with an additional 50% of the employee’s choice of RSUs.

Grifols Class B Shares and Grifols ADS are valued at grant date.

These RSU’s will have a vesting period of 2 years and 1 day and, subsequently, the RSU’s will be exchanged for Grifols Class B Shares or Grifols ADS (American Depositary Share representing 1 Class B Share).

If an eligible employee leaves the Company or is terminated before the vesting period, he/she will not be entitled to the additional RSU’s.

F-92

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

At 31 December 2022, the Group has settled the RSU plan of 2019 for an amount of Euros 9,381 thousand (Euros 7,782 thousand at 31 December 2021 corresponding to the RSU plan of 2018).

This commitment is treated as equity instrument and the amount totals Euros 7,304 thousand at 31 December 2022 (Euros 9,838 thousand at 31 December 2021).

Savings plan and profit-sharing plan

The Group has a defined contribution plan (savings plan), which qualifies as a deferred salary arrangement under Section 401 (k) of the Internal Revenue Code (IRC). Once eligible, employees may elect to contribute a portion of their salaries to the savings plan, subject to certain limitations. The Group matches 100% of the first 4% of employee contributions and 50% of the next 2%. Group and employee contributions are fully vested when contributed. The total cost of matching contributions to the savings plan was US Dollars 34.1 million in 2022 (US Dollars 31.8 million in 2021).

Other plans

The Group has a defined benefit pension plan for certain former Talecris Biotherapeutics, GmbH employees in Germany as required by statutory law. The pension cost relating to this plan is not material for the periods presented.

(d)

Purchase commitments

Details of the Group’s raw material purchase commitments at 31 December 2022 are as follows:


		Thousands of Euros
2023		409,984
2024		413,283
2025		352,805
2026		230,625
2027		219,034
More than 5 years		281,951

(e)

Judicial procedures and arbitration

Details of legal proceedings in which the Company or Group companies are involved are as follows:

●

ABBOTT LABORATORIES v. GRIFOLS DIAGNOSTIC SOLUTIONS INC., GRIFOLS WORLDWIDE OPERATIONS LIMITED AND NOVARTIS VACCINES AND DIAGNOSTICS, INC.

Served: 8 October 2019

US District Court, Northern District of Illinois

Patent Infringement, Civil Action No. 1:19-cv-6587

F-93

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Abbott Laboratories (“Abbott”), GDS, GWWO and Novartis Vaccines and Diagnostics, Inc. are in dispute over unpaid royalties payable by Abbott to GDS and Ortho-Clinical Diagnostics (“Ortho”) under an HIV License and Option agreement dated 16 August 2019 (the “HIV License”). On 12 September 2019, GDS and Ortho filed Notice of Arbitration. On 3 October 2019, Abbott terminated the HIV License and filed for Declaratory Relief seeking to invalidate the licensed patent. GDS filed a Motion to Dismiss and to commence the arbitration proceeding, however the Court agreed to keep all motions filed and referred the parties to magistrate in order to convene a conference to reach a binding settlement agreement. The parties attended the agreed conference on 5 February, presided over by the magistrate selected by the District Judge. No satisfactory settlement was reached. On March 16, 2020, Grifols and Ortho filed an answer and counterclaim to the litigation, while simultaneously pursuing arbitration for the pre-termination amount owed by Abbott. The arbitration hearing was 15-16 June 2020. Grifols/Ortho were awarded US Dollars 4 Million.

NEXT ACTION: Expert Discovery was concluded on 14 October 2022, and the parties filed dispositive motions, including a motion for summary judgement by Abbott and an opposition filed by GDS, the Court has yet to rule on the motion for summary judgement filed by Abbott. GDS and Ortho contend that the patent is valid and they believe that Abbott will be unsuccessful in its Declaratory Relief action and Motion for Summary Judgment in attempting to invalidate the patent.

●

SIEMENS HEALTHCARE DIAGNOSTICS, INC. v. ORTHO-CLINICAL DIAGNOSTICS, INC., GRIFOLS DIAGNOSTIC SOLUTIONS INC.

Served: 10 November 2020

Contract Dispute

Siemens initiated dispute resolution against Ortho and GDS under the Supply Agreement alleging overpayments after an audit by Siemens.

OUTCOME: Decision by the Panel issued on 27 September 2022. The Panel denied all claims by Siemens except for the cost of an audit, which resulted in a payment to Siemens in the amount of US Dollars 171,000.

●

RAMIREZ-VIVAR, ALFONSO v. GRIFOLS DIAGNOSTIC SOLUTIONS, INC.

Served: 11 March 2021

Superior Court, CA County of Alameda

Case No.: RG21089519

Wage & Hour Class Action

Plaintiff claiming violation of CA wage & hour statutes.

NEXT STEP: The Hearing on the class certification motion was heard on 28 October 2022. Court recently granted class certification to a very limited portion of the class relating to only two of the ten claims alleged in the class action lawsuit. Defense counsel has reviewed the claims and provided an analysis of exposure and discuss options pertaining to defense and potential mediation. Plaintiff’s counsel has requested mediation and GDS is cautiously optimistic that a settlement is possible in the coming weeks/months.

CLASS POTENTIAL: Approximately 300 GDS employees in California for payroll/wage & hour violations per pay period for 4 years.

F-94

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

●

BRIAN VAUGHAN, JASON DARNELL, FEBBIE MINNIEFIELD, and ADRIEL VEGA, individually and on behalf of others similarly situated v. BIOMAT USA, INC., TALECRIS PLASMA RESOURCES, INC., and INTERSTATE BLOOD BANK, INC.

Served: 22 June 2020

Circuit Court of Cook County

Case No. 2020CH04519

Removed to Federal Court 17 July 2020, Northern District of Illinois, Case No. 20-cv-4241

Illinois Biometric Information Privacy Act

Former donors allege violations of IL Biometric Information Privacy Act in a putative class action. Plaintiffs donated plasma at one of Defendants’ Illinois-based plasma donation centers. They were required to scan at least one fingerprint to donate plasma to track their identity. Plaintiffs allege that Defendants failed to comply with the BIPA’s requirements when they collected their fingerprint data. Specifically, they allege that Defendants violated the BIPA by (i) failing to develop a publicly data-retention policy and guidelines for permanently destroying biometric data, and (b) collecting, using, and storing their donors’ biometric data without obtaining informed written consent. Defendants, for their part, deny Plaintiffs’ allegations, that they have violated the BIPA, they are subject to the BIPA, or that any biometric data of donors were disclosed to any unauthorized third parties. Defendants had many defenses including the federal preemption, arguments to be made to defeat class certification, and most relevant is that Class Members signed a consent form authorizing the use of fingerprinting as biometric authentication of their identity as part of the automated screening process.

NEXT ACTION: The Parties have settled this class action in the amount of $16,750,000. At the time of this settlement, discovery was beginning. The Group has properly accrued a total amount of US Dollars 6 million, and the remainder will be funded by the insurer. The Parties agreed to settle this litigation now without any admission or determination of liability or the strength of the Parties’ claims and defenses, in order to avoid further risk and expenses to Plaintiffs and the Defendants. The Parties have signed a settlement agreement and the Plaintiffs have now filed a Motion for Preliminary Approval of Class Action Settlement, and the request for a Final Approval Hearing is pending with the Court. When approved by the Court, the Parties will provide notice to the class and proceed with the settlement procedures.

CLASS MEMBERS: The settlement class is 66,822 individuals.

●

CERUS CORPORATION v. LABORATORIOS GRIFOLS, S.A.

Cerus Corporation (“Cerus”) and Laboratorios Grifols, S.A. (“Grifols”) entered into a Manufacturing and Supply Agreement executed in 2016, pursuant to which Grifols was to manufacture and supply to Cerus processing and filters sets to be used by Cerus in its own product (the “Agreement”). As a result of Grifols’ decision to discontinue the manufacturing, sale and support of its blood bag product business worldwide, Grifols was unable to comply with the Agreement.

In December 2021, Cerus filed a notice of arbitration in the UK pursuant to the terms of the Agreement alleging wrongful termination of the Agreement by Grifols. Furthermore, in January 2022, Cerus filed injunctive measures with the Courts of Rubí (Barcelona) requiring the suspension of the closure of Grifols’ blood bags production facility until the arbitration proceedings is finalized.

NEXT ACTION: At the end of February 2023, the Parties agreed to further suspend the proceedings which was granted until 31 August 2023. The companies are continuing to apply efforts to amicably solve technical vicissitudes in order to continue with their commercial relationship (manufacturing and supply agreement) on satisfactory terms for both parties.

F-95

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

●

THE STATE CO. FOR MARKETING DRUGS AND MEDICAL APPLIANCES IN IRAQ (KIMADIA) v. LABORATORIOS GRIFOLS, S.A.

The State Co. for Marketing Drugs and Medical Appliances in Iraq (“KIMADIA”) awarded a tender for the supply of blood bags to Laboratorios Grifols, S.A. (“Grifols”). Grifols, through Hali/Tiba (its agent in Iraq), informed KIMADIA on Grifols’ inability to supply the blood bags pursuant to the tender awarded, due to its decision to discontinue the manufacturing, sale and support of its blood bag product business.

The tender documents set forth a list of penalties and compensations in case the awardee is unable to supply the products to KIMADIA. Further, Hali/Tiba also claims Grifols a compensation for the services performed in relation to the tender.

NEXT ACTION: Grifols has received verbal information that KIMADIA has been able to have sourced alternative product for an agreeable pricing and that discussions among Hali/Tiba and KIMADIA have not continue on the topic of possible sanctions. However, Grifols is still waiting to obtain written confirmation on the latter or assurance that its possible claim has expired.

F-96

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(29) Financial Instruments

(a)Classification

Below is a breakdown of the financial instruments by nature, category and fair value. The Group does not provide details of the fair value of certain financial instruments as their carrying amount is very similar to their fair value because of its short term.


	Thousands of Euros
	31/12/2022
	Carrying amount								Fair Value
	Financial assets		Financial		Financial	Other
	at amortised	Financial assets	assets at FV		liabilities at	financial
	costs	at FVTPL	through OCI	Hedges	amortised costs	liabilities	Total	Level 1	Level 2	Level 3	Total
Non-current financial assets	—	7	11,533	—	—	—	11,540	7	—	11,533	11,540
Derivative instruments	—	—	—	39,659	—	—	39,659	—	39,659	—	39,659
Trade receivables	—	—	236,076	—	—	—	236,076	—	236,076	—	236,076
Financial assets measured at fair value	—	7	247,609	39,659	—	—	287,275

Non-current financial assets	582,175	—	—	—	—	—	582,175
Other current financial assets	31,034	—	—	—	—	—	31,034
Trade and other receivables	445,793	—	—	—	—	—	445,793
Cash and cash equivalents	547,979	—	—	—	—	—	547,979
Financial assets not measured at fair value	1,606,981	—	—	—	—	—	1,606,981

Derivatives instruments	—	(4,736)	—	—	—		(4,736)	—	(4,736)	—	(4,736)
Financial liabilities measured at fair value	—	(4,736)	—	—	—	—	(4,736)

Senior Unsecured & Secured Notes	—	—	—	—	(4,572,720)	—	(4,572,720)	(4,122,656)	—	—	(4,122,656)
Promissory Notes	—	—	—	—	(118,940)	—	(118,940)
Senior secured debt	—	—	—	—	(3,227,926)	—	(3,227,926)	—	(3,286,662)	—	(3,286,662)
Other bank loans	—	—	—	—	(813,595)	—	(813,595)
Lease liabilities	—	—	—	—	(1,016,944)	—	(1,016,944)
Other financial liabilities	—	—	—	—	(1,001,387)	—	(1,001,387)
Other non-current debts	—	—	—	—	—	(15)	(15)
Trade and other payables	—	—	—	—	(846,648)	—	(846,648)
Other current liabilities	—	—	—	—	—	(241,487)	(241,487)
Financial liabilities not measured at fair value	—	—	—	—	(11,598,160)	(241,502)	(11,839,662)
	1,606,981	(4,729)	247,609	39,659	(11,598,160)	(241,502)	(9,950,142)

F-97

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements


	Thousands of Euros
	31/12/2021
	Carrying amount							Fair Value
	Financial assets	Financial	Financial		Financial	Other
	at amortised	assests at	assets at FV		liabilities at	financial
	costs	FVTPL	through OCI	Hedges	amortised costs	liabilities	Total	Level 1	Level 2	Level 3	Total
Non-current financial assets	—	7	2,031	—	—	—	2,038	7	—	2,031	2,038
Derivative instruments	—	—	—	5,306	—	—	5,306	—	5,306	—	5,306
Trade receivables	—	—	216,433	—	—	—	216,433	—	216,433	—	216,433
Financial assets measured at fair value	—	7	218,464	5,306	—	—	223,777
			—
Non-current financial assets	358,161	—	—	—	—	—	358,161
Other current financial assets	2,026,469	—	—	—	—	—	2,026,469
Trade and other receivables	270,827	—	—	—	—	—	270,827
Cash and cash equivalents	655,493	—	—	—	—	—	655,493
Financial assets not measured at fair value	3,310,950	—	—	—	—	—	3,310,950

Derivatives instruments	—	(875)	—	—	—		(875)	—	(875)	—	(875)
Financial liabilities measured at fair value	—	(875)	—	—	—	—	(875)

Senior Unsecured & Secured Notes	—	—	—	—	(4,626,919)	—	(4,626,919)	(4,697,328)	—	—	(4,697,328)
Promissory Notes	—	—	—	—	(116,610)	—	(116,610)
Senior secured debt	—	—	—	—	(3,061,078)	—	(3,061,078)	—	(3,262,901)	—	(3,262,901)
Other bank loans	—	—	—	—	(645,975)	—	(645,975)
Lease liabilities	—	—	—	—	(873,724)	—	(873,724)
Other financial liabilities	—	—	—	—	(882,060)	—	(882,060)
Other non-current debts	—	—	—	—	—	(333)	(333)
Trade and other payables	—	—	—	—	(780,826)	—	(780,826)
Other current liabilities	—	—	—	—	—	(219,272)	(219,272)
Financial liabilities not measured at fair value	—	—	—	—	(10,987,192)	(219,605)	(11,206,797)
	3,310,950	(868)	218,464	5,306	(10,987,192)	(219,605)	(7,672,945)

(b)Measurement of fair value

In order to determine the fair value of financial assets or liabilities, the Group uses the following hierarchy based on the relevance of the variables used:

●

Level 1: estimations based on quoted prices of the instrument.

●

Level 2: estimations based on significant observable variables coming directly from the market.

●

Level 3: estimations based on valuation techniques other than observable variables in the market, mainly discounted cash flows.

(c)Financial risk management

This item provides information on the Group’s exposure to risk associated with the use of financial instruments, the Group’s objectives and procedures to measure and mitigate this risk, and the Group’s capital management strategy.

The Group is exposed to the following risks:

●

Credit risk

●

Liquidity risk

●

Market risk: includes interest rate risk, currency risk and other price risks.

F-98

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The Group’s risk management policies are established to identify and analyze the risks faced by the Group, define appropriate risk limits and controls and to control risks and comply with limits. Risk management policies and procedures are reviewed regularly so that they reflect changes in market conditions and the Group’s activities. The Group’s management procedures and rules are designed to create a strict and constructive control environment in which all employees understand their duties and obligations.

The Group’s Audit Committee supervises how management controls compliance with the Group’s risk management procedures and policies and reviews whether the risk management policy is suitable considering the risks to which the Group is exposed. This committee is assisted by Internal Audit which acts as supervisor. Internal Audit performs regular and ad hoc reviews of the risk management controls and procedures and reports its findings to the Audit Committee.

(i)Credit risk

Credit risk is the risk to which the Group is exposed in the event that a customer or counterparty to a financial instrument fails to discharge a contractual obligation, and mainly results from trade receivables and the Group’s investments in financial assets.

Trade receivables

The Group does not predict any significant insolvency risks as a result of delays in receiving payment from some European countries due to their current economic situation. The main risk in these countries is that of late payments, which is mitigated through the possibility of claiming interest as foreseen by prevailing legislation. No significant bad debt or late payment issues have been detected for sales to private entities.

The Group recognizes impairment based on its best estimate of the expected losses on trade and other receivables. The main impairment losses recognized are due to specific losses relating to individually identified risks. At year end, these impairment losses are immaterial.

Concentration of credit risk

For trade receivables the Group uses the simplified approach, estimating lifetime expected credit losses, while for all other financial assets the Group uses the general approach for calculating expected credit losses. In both cases, due to the customers’ credit rating, as well as the internal classification systems currently in place for new customers and considering that collection periods are mostly under 30 days, there is no significant impact for the Group.

Exposure to credit risk

The carrying amount of financial assets represents the maximum exposure to credit risk. At 31 December 2022 and 2021 the maximum level of exposure to credit risk is as follows:


		Thousands of Euros
Carrying amount	Reference	31/12/2022	31/12/2021

Non-current financial assets	Nota 11	620,745	362,267
Other current financial assets	Nota 11	43,663	2,029,707
Contractual assets	Nota 13	35,154	1,939
Trade receivables	Nota 14	608,688	432,197
Other receivables	Nota 14	29,083	17,224
Cash and cash equivalents	Nota 15	547,979	655,493
		1,885,312	3,498,827

F-99

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The maximum level of exposure to risk associated with receivables and contractual assets at 31 December 2022 and 2021, by geographical area, is as follows.


	Thousands of Euros
Carrying amount	31/12/2022	31/12/2021

Spain	53,145	62,108
EU countries	69,003	40,897
United States of America	139,721	110,624
Other European countries	16,030	25,163
Other regions	395,026	212,568
	672,925	451,360

Impairment losses

A breakdown of the trade and other receivables and contractual assets net of the impairment losses by ageing at 31 December 2022 is as follows:


	Thousands of Euros
					Total net third
			Total gross carrying		party trade
	ECL Rate		amount	Provision	receivables
Not matured	0.19	%	550,131	(48)	550,083
Past due 0-30 days	0.19	%	44,779	(425)	44,354
Past due 31-60 days	0.62	%	16,000	(163)	15,837
Past due 61-90 days	2.03	%	6,029	(133)	5,896
Past due 91-180 days	3.01	%	17,407	(295)	17,112
Past due 181-365 days	8.52	%	10,747	(187)	10,560
More than one year	100.00	%	9,994	(9,994)	—
					—
Customers with objective evidence of impairment			21,046	(21,046)	—
			676,133	(32,291)	643,842

A breakdown of the trade and other receivables and contractual assets net of the impairment losses by ageing as of 31 December 2021 is as follows:


	Thousands of Euros
					Total net third
			Total gross carrying		party trade
	ECL Rate		amount	Provision	receivables
Not matured	0.19	%	364,538	(445)	364,093
Past due 0-30 days	0.19	%	32,623	(51)	32,572
Past due 31-60 days	0.62	%	14,144	(79)	14,065
Past due 61-90 days	2.03	%	6,556	(133)	6,423
Past due 91-180 days	3.01	%	11,000	(311)	10,689
Past due 181-365 days	8.52	%	6,543	(249)	6,294
More than one year	100.00	%	3,911	(3,911)	—

Customers with objective evidence of impairment			18,830	(18,830)	—
			458,145	(24,009)	434,136

F-100

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Unimpaired receivables that are past due mainly relate to public entities.

Movement in the bad debt provision was as follows:


	Thousands of Euros
	31/12/2022	31/12/2021	31/12/2020

Opening balance	24,009	22,985	22,291
Net charges for the year	14,074	6,471	2,436
Net cancellations for the year	(6,949)	(6,269)	(124)
Transfers	53	—	(29)
Translation differences	1,104	822	(1,589)
Closing balance	32,291	24,009	22,985

(ii)Liquidity risk

Liquidity risk is the risk that the Group cannot meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure where possible, that it always has sufficient liquidity to settle its obligations at the maturity date, both in normal conditions and in times of tension, to avoid incurring unacceptable losses or tarnishing the Group’s reputation.

The Group manages liquidity risk on a prudent basis, based on availability of cash and sufficient committed unused long-term credit facilities, enabling the Group to implement its business plans and carry out operations using stable and secure sources of financing.

At 31 December 2022 the Group has total cash and cash equivalents of Euros 547,979 thousand (Euros 655,493 thousand at 31 December 2021). The Group also has approximately Euros 987,340 thousand in unused credit facilities (Euros 621,989 thousand at 31 December 2021), including Euros 937,559 thousand on the revolving credit facility (Euros 534,429 thousand at 31 December 2021).

The Group is able to provide sufficient liquidity to fund its current obligations based on cash flows from operations combined with cash balances and availability of unused credit lines, and it is committed to maintaining elevated and adequate levels of liquidity through internally generated cash flows, and a decrease in dividend payments in the medium term. Additionally, currently the Group does not generate significant cash in any country that might have restrictions on the repatriation of funds.

As in previous years, the Group continues with its quarterly program for optimization of working capital, which is mainly based on contracts to sell receivables without recourse.

The main contractual obligations existing at the end of the fiscal year comprise mainly long-term financial debt obligations with capital repayments and interest payments (see note 20).

Details of the contractual maturity dates of financial liabilities including committed interest calculated using interest rate forward curves are as follows:

F-101

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements


		Thousands of Euros
		Carrying
		amount at	Contractual	6 months	6 - 12	1-2	2 - 5	More than
Carrying amount	Reference	31/12/22	flows	or less	months	years	years	5 years
Financial liabilities
Bank loans	Note 20	4,041,522	5,193,051	527,770	148,914	488,105	4,028,262	—
Other financial liabilities	Note 20	1,001,387	1,685,824	169,278	18,656	124,822	441,933	931,135
Bonds and other marketable securities	Note 20	4,691,659	5,468,068	190,453	75,951	147,903	5,053,761	—
Lease liabilities	Note 20	1,016,944	1,016,944	51,088	51,268	57,695	218,384	638,509
Payable to suppliers	Note 21	731,918	731,918	731,675	243	—	—	—
Other current liabilities	Note 22	14,261	14,262	11,364	2,898	—	—	—
Financial derivatives	Note 29 (d)	4,736	4,736	733	—	12	3,991	—
Total		11,502,427	14,114,803	1,682,361	297,930	818,537	9,746,331	1,569,644


		Thousands of Euros
		Carrying
		amount at	Contractual	6 months	6 - 12	1-2	2 - 5	More than
Carrying amount	Reference	31/12/21	flows	or less	months	years	years	5 years
Financial liabilities
Bank loans	Note 20	3,707,053	4,309,621	476,397	78,524	102,070	3,641,777	10,853
Other financial liabilities	Note 20	882,060	1,294,873	41,934	1,300	164,718	448,161	638,760
Bonds and other marketable securities	Note 20	4,743,529	5,663,320	2,215,138	170,572	48,538	3,145,255	83,817
Lease liabilities	Note 20	873,724	873,723	24,640	23,927	47,595	184,032	593,529
Payable to suppliers	Note 21	628,992	628,992	622,091	6,901	—	—	—
Other current liabilities	Note 22	43,562	43,562	42,387	1,175	—	—	—
Financial derivatives	Note 29 (d)	875	875	875	—	—	—	—
Total		10,879,795	12,814,966	3,423,462	282,399	362,921	7,419,225	1,326,959

(iii)Currency risk

The Group operates internationally and is therefore exposed to currency risk when operating with foreign currencies, especially with regard to the US Dollar. Currency risk is associated with future commercial transactions, recognized assets and liabilities, and net investments in foreign operations.

The Group holds significant investments in foreign operations, the net assets of which are exposed to currency risk. The conversion risk affecting net assets of the Group’s foreign operations in US Dollars is mitigated primarily through borrowings in this foreign currency.

F-102

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The Group’s main exposure to currency risk is with regard to the US Dollar, which is used in a significant percentage of transactions in foreign functional currencies.

The financing obtained in Euros represents 60% of the total debt of the Group and amounts to Euros 5,563 million at 31 December 2022 (69% and Euros 5,962 million at 31 December 2021).

As mentioned in note 20, part of the US dollar debt of the Group is covered by a currency swap to hedge the exposure to the associated currency risk.

The Group applies the cost of hedging method. This method enables the Group to exclude the currency basis spread from the designated hedging instrument and, subject to certain requirements, changes in their fair value attributable to this component are recognized in other comprehensive income.

Details of the Group’s exposure to currency risk is as follows:


	Thousands of Euros
	31/12/2022
	*Euros ()**	US Dollars ()**
Trade receivables	2,116	58,331
Receivables from Group companies	132,645	11,542
Loans to Group companies	4,548,142	33
Cash and cash equivalents	11,154	1,989
Trade payables	(17,297)	(20,870)
Payables to Group companies	(77,367)	(29,277)
Loans from Group companies	(4,414,879)	—
Bank loans	(31,875)	—

Balance sheet exposure	152,639	21,748

(*) Balances in Euros in subsidiaries with US Dollars functional currency

(**) Balances in US Dollars in subsidiaries with Euros functional currency


	Thousands of Euros
	31/12/2021
	*Euros ()**	US Dollars ()**
Trade receivables	2,023	14,800
Receivables from Group companies	141,285	7,101
Loans to Group companies	464,789	21
Cash and cash equivalents	25,766	82
Trade payables	(27,098)	(23,349)
Payables to Group companies	(62,930)	(6,480)
Loans from Group companies	(11,495)	(3)
Bank loans	(372,500)	—

Balance sheet exposure	159,840	(7,828)

(*) Balances in Euros in subsidiaries with US Dollars functional currency

(**) Balances in US Dollars in subsidiaries with Euros functional currency

F-103

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The most significant exchange rates applied at 2022 and 2021 year ends are as follows:


	Closing exchange rate
Euros	31/12/2022	31/12/2021

US Dollars	1.0666	1.1326

A sensitivity analysis for foreign exchange fluctuations is as follows:

Had the US Dollar strengthened by 10% against the Euro at 31 December 2022, equity would have increased by Euros 892,806 thousand (Euros 812,285 thousand at 31 December 2021) and profit due to foreign exchange differences would have increased by Euros 17,439 thousand (increase of Euros 15,201 thousand at 31 December 2021). This analysis assumes that all other variables are held constant, especially that interest rates remain constant.

A 10% weakening of the US Dollar against the Euro at 31 December 2022 and 2021 would have had the opposite effect for the amounts shown above, all other variables being held constant.

The Group uses hedge accounting to partially hedge the currency risk exposure (See note 29 (d)).

(iv)Interest rate risk

The Group’s interest rate risks arise from current and non-current borrowings. Borrowings at variable interest rates expose the Group to cash flow interest rate risks. Fixed-rate borrowings expose the Group to fair value interest rate risk.

The objective of the management of interest rate risk is to achieve a balance in the structure of the debt, keeping part of the external resources issued at a fixed rate and covering part of the variable rate debt through hedges.

A significant part of the financing obtained accrues interest at fixed rates, representing 63% of the total debt of the Group at 31 December 2022 (58% at 31 December 2021). It mainly includes corporate senior notes, European Investment Bank loans, as well as the agreement with GIC (Sovereign Fund of Singapore) (see note 20).

Variable-rate debt represents 37% of the total debt at 31 December 2022 (42% at 31 December 2021) and includes mainly the senior secured debt (see note 20 (b)).

To date, the profile of interest on interest-bearing financial instruments is as follows:


	Thousands of Euros
	31/12/2022	31/12/2021
Fixed-interest financial instruments
Financial liabilities	(5,835,492)	(4,878,087)
	(5,835,492)	(4,878,087)
Variable-interest financial instruments
Financial liabilities	(3,486,460)	(3,296,025)
	(3,486,460)	(3,296,025)
	(9,321,952)	(8,174,112)

Had the interest rate been 100 basis points higher at 31 December 2022, the interest expense would have increased by Euros 34,688 thousand (Euros 35,449 thousand at 31 December 2021). As the Group does not have any hedging derivatives in place, the net effect on cash interest payments would have increased by the same amount.

F-104

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(v) Market price risk

Price risk affecting raw materials is mitigated by the vertical integration of the hemoderivatives business in a highly concentrated sector.

(d)Financial derivatives

At 31 December 2022 and 2021 the Group has recognized the following derivatives:


				Thousands of Euros
		Notional	Notional
		amount at	amount at	Value at	Value at
Financial derivatives	Currency	31/12/2022	31/12/2021	31/12/22	31/12/21	Maturity
Cross currency interest rate swap	US Dollar	500,000,000	500,000,000	35,296	5,306	15/10/2024
Cross currency interest rate swap	US Dollar	205,000,000	—	3,216	—	15/10/2024
Foreign exchange rate forward	Swiss Franc	5,500,000	—	71	—	28/02/2023
Foreign exchange rate forward	Canadian dollar	4,416,667	—	165	—	2023 and 2024
Foreign exchange rate forward	Pound Sterling	27,100,000	—	805	—	2023
Foreign exchange rate forward	US Dollar	23,720,000	—	104	—	2023
Embedded derivative	Euro	160,000,000	—	2	—	2024
Total assets (note 11)				39,659	5,306

Cross currency interest rate swap	US Dollar	205,000,000	—	(3,990)	—	15/10/2024
Foreign exchange rate forward	Canadian dollar	—	51,000,000	—	(875)	25/07/2022
Foreign exchange rate forward	US Dollar	60,000,000	—	(594)	—	30/01/2023
Foreign exchange rate forward	Canadian dollar	8,000,001	—	(145)	—	2024 and 2025
Foreign exchange rate forward	US Dollar	15,300,000	—	(6)	—	2023
Embedded derivative	Euro	65,000,000	—	(1)	—	2024
Total liabilities (note 20)				(4,736)	(875)

(i)Hedging derivative financial instruments

On 5 October 2021, the Group subscribed three cross currency interest-rate swaps with an aggregate value of US Dollars 500 million to hedge part of the Euro equivalent value of the US Dollar unsecured notes issued in October 2021. It is a fixed-to-fixed USD/EUR cross currency swap with the following characteristics:

- The Group receives a loan of Euros 431.6 million at a nominal interest rate of 3.78%.

- The Group grants a US Dollars 500 million loan at a nominal interest rate of 4.75%.

On 28 June 2022, the Group subscribed one cross currency interest-rate swap of US Dollars 205 million to hedge the remaining part of the Euro equivalent value of the US Dollar unsecured notes issued in October 2021. It is a fixed-to-fixed USD/EUR cross currency swap with the following characteristics:

- The Group receives a Euros 194 million loan at a nominal interest rate of 3.1046%.

- The Group grants a US Dollars 205 million loan at a nominal interest rate of 4.75%.

The derivative complies with the criteria required for hedge accounting. See further details in notes 4 (i).

F-105

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The movement in derivative financial instruments is as follows:


	Thousands of Euros
	31/12/2022	31/12/2021
Initial balance	4,431	—
Business combination	(1,255)	—
Changes in fair value recognized in equity	(4,757)	3,130
Transfer to profit or loss	12,552	1,895
Transfer to profit or loss - translation differences	32,954	3
Tax effect	6,170	—
Collections / Payments	(15,172)	(597)
Ending balance	34,923	4,431

(ii)Derivative financial instruments at fair value through profit and loss

The Group has subscribed various foreign exchange forwards to partially hedge the foreign currency value of intercompany loan. Since the Group chooses not to apply hedge accounting criteria, gains or losses resulting from changes in the fair value of derivatives are taken directly to “Change in fair value of financial instruments” in the consolidated statement of profit and loss. At 31 December 2022, the Group has recognized a net finance cost of Euros 2,407 thousand (Euros 280 thousand of net finance cost at 31 December 2021).

(e)Capital management

The directors’ policy is to maintain a solid capital base in order to ensure investor, creditor and market confidence and sustain future business development. The board of directors defines and proposes the level of dividends paid to shareholders.

The capital structure is periodically reviewed through the preparation of strategic plans focused mainly on a sequential improvement of EBITDA (Earnings before interests, tax, amortization and depreciation), generation of operating cash and discipline in the allocation of capital; with the objective and commitment to reduce the leverage ratio.

In accordance with the senior secured debt contract, the Group is subject to compliance with some covenants. At 31 December 2022 and 2021, the Group complies with the covenants in the contract.

The credit rating of the Group is as follows:


		September 2022	December 2021	September 2021
Moody’s Investors	Corporate rating	B1	B1
	Senior secured debt	Ba3	Ba3
	Senior Unsecured debt	B3	B3
	Perspective	Negative	Negative

Standard & Poor’s	Corporate rating	B+		BB-
	Senior secured debt	BB-		BB
	Senior Unsecured debt	B-		B
	Perspective	Stable		Negative

Fitch Ratings	Corporate rating	BB-		BB-
	Senior secured debt	BB+		BB+
	Senior Unsecured debt	B+		B+
	Perspective	Stable		Stable

The Parent held Class B treasury stock equivalent to 1.33% of its capital at 31 December 2022 (1.31% at 31 December 2021).

F-106

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(30) Balances and Transactions with Related Parties

Details of balances with related parties are as follows:


		Thousands of Euros
Carrying amount	Reference	31/12/2022	31/12/2021

Receivables from associates and joint ventures	14	162,382	131,764
Current contract assets from associates and joint ventures		3,880	—
Trade payables associates and joint ventures		(91)	(3)
Loans to other related parties		96,537	89,104
Other financial assets with other related parties	11	318,890	220,947
Debts with key management personnel		(5,534)	(6,644)
Payables to other related parties		(4,810)	(3,824)
		571,254	431,344

Payables are included in trade and other payables (see note 21).

“Other financial assets with other related parties” mainly includes a loan with a related party with maturity 2024 and an interest rate of 3.75% (see note 11).

(a)

Group transactions with related parties

Group transactions with related parties during 2022 are as follows:


	Thousands of Euros
	Associates & joint	Key management	Other related	Board of directors
	ventures	personnel	parties	of the Company

Net sales	339,170	—	—	—
Purchases	(9)	—	—	—
Other service expenses	(34)	—	(4,343)	—
Remuneration	—	(13,891)	—	(5,316)
Payments for rights of use	—	—	(6,300)	—
Purchase of property, plant and equipment	—	—	3,464	—
Dividends paid/received	10,717	—	—	—
	349,844	(13,891)	(7,179)	(5,316)

F-107

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Group transactions with related parties during 2021 were as follows:


	Thousands of Euros
	Associates & joint	Key management	Other related	Board of directors
	ventures	personnel	parties	of the Company

Net sales	220,808	—	—	—
Purchases	(613)	—	—	—
Other service expenses	(2,709)	—	(3,963)	—
Remuneration	—	(15,136)	—	(4,417)
Payments for rights of use	—	—	(5,332)	—
Purchase of property, plant and equipment	—	—	7,326	—
Finance income	2	—	—	—
Dividends paid/received	2,636	—	—	—
	220,124	(15,136)	(1,969)	(4,417)

Group transactions with related parties during 2020 were as follows:


	Thousands of Euros
	Associates & joint	Key management	Other related	Board of directors
	ventures	personnel	parties	of the Company

Net sales	10,522	—	—	—
Purchases	(459)	—	—	—
Other service expenses	(15,010)	—	(10,344)	—
Remuneration	—	(17,164)	—	(4,966)
Payments for rights of use	—	—	(5,137)	—
Purchase of property, plant and equipment	—	—	(13,500)	—
Finance income	783	—	—	—
Dividends paid/received	10,156	—	—	—
	5,992	(17,164)	(28,981)	(4,966)

Every year the Group contributes 0.7% of its profits before tax to a non-profit organization.

“Other service expenses” include contributions to non-profit organizations totaling Euros 3,833 thousand in 2022 (Euros 3,963 thousand in 2021 and Euros 10,344 thousand in 2020).

On 28 December 2018, the Group sold BPC Plasma, Inc and Haema, AG to Scranton Enterprises B.V (shareholder of Grifols) for US Dollars 538,014 thousand (see note 3). For the payment of the mentioned amount of the sale, Scranton signed a loan contract dated 28 December 2018 for an amount of US Dollars 95,000 thousand (Euros 82,969 thousand) with Grifols Worldwide Operations Limited. The compensation is 2%+EURIBOR and due on 28 December 2025.

Directors representing shareholders´ interests have received remuneration of Euros 965 thousand in 2022 (Euros 965 thousand in 2021).

The Group has not extended any advances or loans to the members of the board of directors or key management personnel nor has it assumed any guarantee commitments on their behalf. It has also not assumed any pension or life insurance obligations on behalf of former or current members of the board of directors or key management personnel. In addition, certain Company directors and key management personnel have termination benefit commitments (see note 28).

F-108

Table of Contents

GRIFOLS, S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(b)

Conflicts of interest concerning the directors

The Company’s directors and their related parties have not entered into any conflict of interest that should have been reported in accordance with article 229 of the revised Spanish Companies Act.

(31) Subsequent events

On 15 February 2023, the Group announced a comprehensive operational improvement plan with significant cost savings. The plan includes the optimization of plasma costs and operations, streamlining corporate functions, and enhancing other efficiencies across the organization. It also includes a workforce optimization to be implemented in 2023 that will affect approximately 8% of the company’s employees, primarily in the U.S. plasma operations. The Group estimates one-time restructuring charge of approximately Euros 140 million to be accrued in the first quarter of 2023.

F-109

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020


			Acquisition /			12/31/2022				12/31/2021				12/31/2020
		Registered	Incorporation			% shares				% shares				% shares
Name	Offices	Office	date	Activity	Statutory Activity	Direct		Indirect		Direct		Indirect		Direct		Indirect

Fully Consolidated Companies

Diagnostic Grifols, S.A.	Spain	Polígono Levante Calle Can Guasch, s/n 08150 Parets del Vallès (Barcelona) Spain	1987	Industrial	Development and manufacture of diagnostic equipment, instruments and reagents.	—		100.000	%	—		100.000	%	—		100.000	%

Instituto Grifols, S.A.	Spain	Polígono Levante Calle Can Guasch, s/n 08150 Parets del Vallès (Barcelona) Spain	1987	Industrial	Plasma fractioning and the manufacture of haemoderivative pharmaceutical products.	99.998	%	0.002	%	99.998	%	0.002	%	99.998	%	0.002	%

Laboratorios Grifols, S.A.	Spain	Polígono Levante Calle Can Guasch, s/n 08150 Parets del Vallès (Barcelona) Spain	1989	Industrial	Production of glass- and plastic-packaged parenteral solutions, parenteral and enteral nutrition products and blood extraction equipment and bags.	100.000	%	—		98.600	%	1.400	%	98.600	%	1.400	%

Biomat, S.A.	Spain	Polígono Levante Calle Can Guasch, s/n 08150 Parets del Vallès (Barcelona) Spain	1991	Industrial	Analysis and certification of the quality of plasma used by Instituto Grifols, S.A. It also provides transfusion centres with plasma virus inactivation services (I.P.T.H).	99.900	%	0.100	%	99.900	%	0.100	%	99.900	%	0.100	%

Grifols Engineering, S.A.	Spain	Polígono Levante Calle Can Guasch, s/n	2000	Industrial	Design and development of the Group’s	99.950	%	0.050	%	99.950	%	0.050	%	99.950	%	0.050	%

F-110

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020

		08150 Parets del Vallès (Barcelona) Spain			manufacturing installations and part of the equipment and machinery used at these premises. The company also renders engineering services to external companies.

Biomat USA, Inc.	United States	2410 Lillyvale Avenue Los Angeles (California) United States	2002	Industrial	Procuring human plasma.	—		100.000	%	—		100.000	%	—		100.000	%

Grifols Biologicals, LLC.	United States	5555 Valley Boulevard Los Angeles (California) United States	2003	Industrial	Plasma fractioning and the production of haemoderivatives.	—		100.000	%	—		100.000	%	—		100.000	%

Grifols Australia Pty Ltd.	Australia	Unit 5/80 Fairbank Clayton South Victoria 3149 Australia	2009	Industrial	Distribution of pharmaceutical products and the development and manufacture of reagents for diagnostics.	100.000	%	—		100.000	%	—		100.000	%	—

Medion Grifols Diagnostic AG	Switzerland	Bonnstrasse,9 3186 Dügingen Switzerland	2009	Industrial	Development and manufacturing activities in the area of biotechnology and diagnostics.	—		100.000	%	—		100.000	%	—		100.000	%

Grifols Therapeutics, LLC.	United States	4101 Research Commons (Principal Address), 79 T.W. Alexander Drive, Research Triangle Park, North Carolina 277709, United States	2011	Industrial	Plasma fractioning and the production of haemoderivatives.	—		100.000	%	—		100.000	%	—		100.000	%

Talecris Plasma Resources, Inc. (merged with Biomat USA, Inc.)	United States	4101 Research Commons (Principal Address), 79 T.W. Alexander Drive, Research Triangle Park, North Carolina 277709, United States	2011	Industrial	Procurement of human plasma.	—		—		—		100.000	%	—		100.000	%

Grifols Worldwide Operations Limited		Grange Castle Business Park, Grange Castle , Clondalkin,	2012	Industrial	Packaging, labelling, storage, distribution,	100.000	%	—		100.000	%	—		100.000	%	—

F-111

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020

		Dublin 22, Ireland			manufacture and development of pharmaceutical products and rendering of financial services to Group companies.

Progenika Biopharma, S.A.		Parque Tecnológico de Vizcaya, Edificio 504 48160 Derio (Vizcaya) Spain	2013	Industrial	Development, production and commercialisation of biotechnological solutions.	91.875	%	8.125	%	91.880	%	8.120	%	91.880	%	8.120	%

Grifols Diagnostics Solutions, Inc.		4560 Horton Street 94608 Emeryville, California United States	2013	Industrial	Manufacture and sale of blood testing products	—		55.000	%	—		55.000	%	—		55.000	%

Grifols Worldwide Operations USA Inc.		13111 Temple Avenue, City of Industry, California 91746-1510 Estados Unidos	2014	Industrial	Manufacture, warehousing, and logistical support for biological products.	—		100.000	%	—		100.000	%	—		100.000	%

Grifols Asia Pacific Pte, Ltd	Singapore	501 Orchard Road nº20-01 238880 Wheelock Place, Singapore	2003	Commercial	Distribution and sale of medical and pharmaceutical products.	100.000	%	—		100.000	%	—		100.000	%	—

Grifols Movaco, S.A.		Polígono Levante Calle Can Guasch, s/n 08150 Parets del Vallès (Barcelona) Spain	1987	Commercial	Distribution and sale of reagents, chemical products and other pharmaceutical specialities, and of medical and surgical materials, equipment and instruments for use by laboratories and health centres.	99.999	%	0.001	%	99.999	%	0.001	%	99.999	%	0.001	%

Grifols Portugal Productos Farmacéuticos e Hospitalares, Lda.	Portugal	Rua de Sao Sebastiao,2 Zona Industrial Cabra Figa 2635-448 Rio de Mouro Portugal	1988	Commercial	Import, export and commercialisation of pharmaceutical and hospital equipment and	0.010	%	99.990	%	0.010	%	99.990	%	0.010	%	99.990	%

F-112

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020

					products, particularly Grifols products.

Grifols Chile, S.A.	Chile	Avda. Americo Vespucio, 2242 Comuna de Conchali Santiago de Chile Chile	1990	Commercial	Development of pharmaceutical businesses, which can involve the import, production, commercialisation and export of related products.	99.000	%	—		99.000	%	—		99.000	%	—

Grifols USA, LLC.	United States	2410 Lillyvale Avenue Los Angeles (California) United States	1990	Commercial	Distribution and marketing of company products.	—		100.000	%	—		100.000	%	—		100.000	%

Grifols Argentina, S.A.	Argentina	Bartolomé Mitre 3690/3790, CPB1605BUT Munro Partido de Vicente Lopez Argentina	1991	Commercial	Clinical and biological research. Preparation of reagents and therapeutic and diet products. Manufacture and commercialisation of other pharmaceutical specialities.	95.010	%	4.990	%	95.010	%	4.990	%	95.010	%	4.990	%

Grifols s.r.o.	Czech Republic	Calle Zitna,2 Prague Czech Republic	1992	Commercial	Purchase, sale and distribution of chemical-pharmaceutical products, including human plasma.	100.000	%	—		100.000	%	—		100.000	%	—

Grifols (Thailand) Ltd	Thailand	191 Silom Complex Building, 21st Follor, Silom Road, Silom, Bangrak 10500 Bangkok Thailand	2003	Commercial	Import, export and distribution of pharmaceutical products.	—		48.000	%	—		48.000	%	—		48.000	%

Grifols Malaysia Sdn Bhd	Malaysia	Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur Malaysia	2003	Commercial	Distribution and sale of pharmaceutical products.	—		49.000	%	—		49.000	%	—		30.000	%

Grifols International, S.A.	Spain	Polígono Levante Calle Can Guasch, s/n	1997	Commercial	Coordination of the marketing, sales and logistics	99.998	%	0.002	%	99.998	%	0.002	%	99.998	%	0.002	%

F-113

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020

		08150 Parets del Vallès (Barcelona) Spain			for all the Group’s subsidiaries operating in other countries.

Grifols Italia S.p.A	Italy	Via Carducci, 62d 56010 Ghezzano Pisa, Italy	1997	Commercial	Purchase, sale and distribution of chemical-pharmaceutical products.	100.000	%	—		100.000	%	—		100.000	%	—

Grifols UK Ltd.	United Kingdom	Gregory Rowcliffe & Milners, 1 Bedford Row, London WC1R 4BZ United Kingdom	1997	Commercial	Distribution and sale of therapeutic and other pharmaceutical products, especially haemoderivatives.	100.000	%	—		100.000	%	—		100.000	%	—

Grifols Brasil, Lda.	Brazil	Rua Umuarama, 263 Condominio Portal da Serra Vila Perneta CEP 83.325-000 Pinhais Paraná, Brazil	1998	Commercial	Import and export, preparation, distribution and sale of pharmaceutical and chemical products for laboratory and hospital use, and medical-surgical equipment and instruments.	100.000	%	—		100.000	%	—		100.000	%	—

Grifols France, S.A.R.L.	France	Arteparc, Rue de la Belle du Canet, Bât. D, Route de la Côte d’Azur, 13590 Meyreuil France	1999	Commercial	Commercialisation of chemical and healthcare products.	99.990	%	0.010	%	99.990	%	0.010	%	99.990	%	0.010	%

Grifols Polska Sp.z.o.o.	Poland	Grzybowska 87 street00-844 Warsaw, Poland	2003	Commercial	Distribution and sale of pharmaceutical, cosmetic and other products.	100.000	%	—		100.000	%	—		100.000	%	—

Logística Grifols, S.A. de C.V. (merged with Grifols México, S.A. de C.V.)	Mexico	Calle Eugenio Cuzin, nº 909-913 Parque Industrial Belenes Norte 45150 Zapopán Jalisco, Mexico	2008	Commercial	Manufacture and commercialisation of pharmaceutical products for human and veterinary use.	—		—		99.990	%	0.010	%	99.990	%	0.010	%

F-114

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020

Grifols México, S.A. de C.V.	Mexico	Calle Eugenio Cuzin, nº 909-913 Parque Industrial Belenes Norte 45150 Zapopán Jalisco, Mexico	1993	Commercial	Production, manufacture, adaptation, conditioning, sale and purchase, commissioning, representation and consignment of all kinds of pharmaceutical products and the acquisition of machinery, equipment, raw materials, tools, movable goods and property for the aforementioned purposes.	100.000	%	—		99.980	%	0.020	%	99.980	%	0.020	%

Grifols Nordic, AB	Sweden	Sveavägen 166 11346 Stockholm Sweden	2010	Commercial	Research and development, production and marketing of pharmaceutical products, medical devices and any other asset deriving from the aforementioned activities.	100.000	%	—		100.000	%	—		100.000	%	—

Grifols Colombia, Ltda	Colombia	Carrera 7 No. 71 52 Torre B piso 9 Bogotá. D.C. Colombia	2010	Commercial	Sale, commercialisation and distribution of medicines, pharmaceutical (including but not limited to haemoderivatives) and hospital products, medical devices, biomedical equipment, laboratory instruments and reagents for diagnosis and/or healthcare software.	99.990	%	0.010	%	99.990	%	0.010	%	99.990	%	0.010	%

F-115

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020

Grifols Deutschland GmbH	Germany	Lyoner Strasse 15, D- 60528 Frankfurt am Main Germany	2011	Commercial	Procurement of the official permits and necessary approval for the production, commercialisation and distribution of products deriving from blood plasma, as well as the import, export, distribution and sale of reagents and chemical and pharmaceutical products, especially for laboratories and health centres and surgical and medical equipment and instruments.	100.000	%	—	100.000	%	—		100.000	%	—

Grifols Canada, Ltd.	Canada	5060 Spectrum Way, Suite 405 (Principal Address) Mississauga, Ontario L4W 5N5 Canada	2011	Commercial	Distribution and sale of biotechnological products.	100.000	%	—	—		100.000	%	—		100.000	%

Grifols Pharmaceutical Technology (Shanghai) Co., Ltd.		Unit 901-902, Tower 2, No. 1539, West Nanjing Rd., Jing’an District, Shanghai 200040 China	2013	Commercial	Pharmaceutical consultancy services (except for diagnosis), technical and logistical consultancy services, business management and marketing consultancy services.	100.000	%	—	100.000	%	—		100.000	%	—

Grifols Switzerland AG		Steinengraben, 5 40003 Basel Switzerland	2013	Commercial	Research, development, import and export and commercialisation of pharmaceutical products, devices	—		—	—		—		100.000	%	—

F-116

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020

					and diagnostic instruments.

Grifols (H.K.), Limited		Units 1505-7 BerKshire House, 25 Westlands Road Hong Kong	2014	Commercial	Distribution and sale of diagnostic products.	—		100.000	%	—		100.000	%	—		100.000	%

Grifols Japan K.K.	Hilton Plaza West Office Tower, 19th floor. 2-2, Umeda 2-chome, Kita-ku Osaka-shi Japón	Hilton Plaza West Office Tower, 19th floor. 2-2, Umeda 2-chome, Kita-ku Osaka-shi Japan	2014	Commercial	Research, development, import and export and commercialisation of pharmaceutical products, devices and diagnostic instruments.	100.000	%	—		100.000	%	—		100.000	%	—

Grifols India Healthcare Private Ltd		Regus Business Centre Pvt.Ltd.,Level15,Dev Corpora, Plot No.463,Nr. Khajana East.Exp.Highway,Thane (W), Mumbai - 400604, Maharashtra India	2014	Commercial	Distribution and sale of pharmaceutical products.	99.984	%	0.016	%	99.984	%	0.016	%	99.984	%	0.016	%

Grifols Diagnostics Equipment Taiwan Limited		8F., No.367, Fuxing N. RD., Songshang Dist., Taipei City 10543, Taiwan	2016	Commercial	Distribution and sale of diagnostic products.	100.000	%	—		100.000	%	—		100.000	%	—

Grifols Viajes, S.A.	Spain	Can Guasch, 2 08150 Parets del Vallès Barcelona, Spain	1995	Services	Travel agency exclusively serving Group companies.	99.900	%	0.100	%	99.900	%	0.100	%	99.900	%	0.100	%

Squadron Reinsurance Designated Activity Company	Ireland	The Metropolitan Building, 3rd Fl. James Joyce Street, Dublin Ireland	2003	Services	Reinsurance of Group companies’ insurance policies.	—		100.000	%	—		100.000	%	—		100.000	%

Grifols Shared Services North America, Inc.	United States	2410 Lillivale Avenue 90032 Los Angeles, California United States	2011	Services	Support services for the collection, manufacture, sale and distribution of plasma derivatives and related products.	100.000	%	—		100.000	%	—		100.000	%	—

Gripdan Invest, S.L		Avenida Diagonal 477 Barcelona, Spain	2015	Services	Rental of industrial buildings	100.000	%	—		100.000	%	—		100.000	%	—

F-117

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020

Araclon Biotech, S.L.	Spain	Paseo de Sagasta, 17 2º izqda. Zaragoza, Spain	2012	Research	Creation and commercialisation of a blood diagnosis kit for the detection of Alzheimer's and development of effective immunotherapy (vaccine) against this disease.	—		75.850	%	—		75.850	%	—		75.100	%

VCN Bioscience, S.L.		Avenida de la Generalitat 152 Sant Cugat del Valles (Barcelona) Spain	2012	Research	Research and development of therapeutic approaches for tumours for which there is currently no effective treatment.	—		—		—		86.830	%	—		86.830	%

Grifols Innovation and New Technologies Limited		Grange Castle Business Park, Grange Castle , Clondalkin, Dublin 22, Ireland	2016	Research	Biotechnology research and development	—		100.000	%	—		100.000	%	—		100.000	%

Kiro Grifols S.L	Spain	Polígono Bainuetxe, 5, 2º planta, Aretxabaleta, Guipúzcoa Spain	2014	Research	Development of machines and equipment to automate and control key points of hospital processes, and hospital pharmacy processes.	90.000	%	—		90.000	%	—		90.000	%	—

Chiquito Acquisition Corp.		2711 Centerville Road Suite 400, Wilmington, Delaware, New Castle County, United States	2017	Corporate	Engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware, as amended from time to time (the "DGCL").	—		100.000	%	—		100.000	%	—		100.000	%

Aigües Minerals de Vilajuiga, S.A.	Carrer Sant Sebastià, 2, 17493 Vilajuïga, Girona	Carrer Sant Sebastià, 2, 17493 Vilajuïga, Girona, Spain	2017	Industrial	Collection and use of mineral-medicinal waters and obtaining of	99.990	%	0.010	%	99.990	%	0.010	%	99.990	%	0.010	%

F-118

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020

					all necessary administrative concessions for the optimum and widest use of these.

Goetech LLC (D/B/A Medkeeper)		7600 Grandview Avenue, Suite 210, Arvada, CO 80002, United States	2018	Industrial	Development and distribution of web and mobile-based platforms for hospital pharmacies	—		100.000	%	—		100.000	%	—	100.000	%

Interstate Blood Bank, Inc.		5700 Pleasantville Road Memphis, Tennessee United States	2016	Industrial	Procurement of human plasma.	—		100.000	%	—		100.000	%	—	100.000	%

Haema, AG		LandsteinerstraBe 1, 04103 Leipzig - Germany	2018	Industrial	Procurement of human plasma.	—		—		—		—		—	—

BPC Plasma, Inc (formerly Biotest Pharma Corp)		901 Yamato Rd., Suite 101, Boca Raton FL 33431 - USA	2018	Industrial	Procurement of human plasma.	—		—		—		—		—	—

Alkahest, Inc.	3500 South DuPont Hwy, Dover, County of Kent Estados Unidos	3500 South DuPont Hwy, Dover, County of Kent United States	2015	Research	Development of novel plasma-based products for the treatment of cognitive decline in aging and disorders of the central nervous system (CNS).	—		100.000	%	—		100.000	%	—	42.450	%

Plasmavita Healthcare GmbH	Colmarer Strasse 22, 60528 Frankfurt am Main - Germany	Colmarer Strasse 22, 60528 Frankfurt am Main - Germany	2018	Industrial	Procurement of human plasma.	—		50.000	%	—		50.000	%	—	50.000	%

Plasmavita Healthcare II GmbH	Garnisongasse 4/12, 1090 Vienna, Austria	Garnisongasse 4/12, 1090 Vienna, Austria	2019	Industrial	Procurement of human plasma.	—		50.000	%	—		50.000	%	—	50.000	%

Grifols Canada Therapeutics Inc. (formerly Green Cross Biotherapeutics; Inc)		2911 Avenue Marie Curie, Arrondissement de Saint-Laurent, Quebec Canada	2020	Industrial	Conducting business in Pharmceuticals and Medicines Industry	0.020	%	99.980	%	100.000	%	—		—	100.000	%

GCAM, Inc. (merged with Biomat USA, Inc.)		1561 E Orangethorpe Ave #205, Fullerton, CA 92831 USA	2020	Industrial	Engage in any lawful act or activity for which corporations may be organized under the General	—		—		—		—		—	100.000	%

F-119

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020

				Corporation Law of Delaware and engaging in any and all activities necessary or incidental to the foregoing.

Grifols Laboratory Solutions, Inc	Corporation Trust Center, 1209, Orange Street, Wilmington, New Castle Country, Delaware, 19801 Estados Unidos	2020	Services	Engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware	—		100.000	%	—		100.000	%	—		100.000	%

Grifols Korea Co., Ltd.	302 Teheran-ro, Gangnam-gu, Seoul (Yeoksam-dong) Korea	2020	Commercial	Import, export of diagnostic in vitro products and solutions.	100.000	%	—		100.000	%	—		100.000	%	—

Grifols Middle East & Africa LLC	Office No. 534, 5th floor, NamaaBuilding No.155, Ramses Extension Street, Al Hay Al Sades, Nasr City, Cairo Egypt	2021	Services	Providing consultation (except for those stipulated in Article 27 of the Capital Market Law and its executive regulations) and carry out those commercial activities that are permitted by the law.	99.990	%	0.010	%	99.990	%	0.010	%	—		—

GigaGen Inc.	407 Cabot Road South San Francisco, CA 94080, United States	2017	Industrial	Engage in any lawful act or activity for which corporations may be organized under General Corporation Law.	—		100.000	%	—		100.000	%	—		43.960	%

Grifols Pyrenees Research Center, S.L.	C/ Prat de la Creu, 68-76, Planta 3ª, Edifici Administratiu del Comú d'Andorra la Vella Andorra	2021	Industrial	Constitution, development and management of operations of a research and development center in all areas of immnology, dedicated to find possible solutions	—		80.000	%	—		80.000	%	—		—

F-120

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020

				for therapeutic applications.

Grifols Bio North America LLC	251 Little Falls Drive, Wilmington, New Castle County, 19808, Delaware United States	2021	Industrial	Engage in any lawful business permitted by the Act or the laws of any jurisdiction in which the Company may do business.	—		100.000	%	—		100.000	%	—	—

Biomat Holdco, LLC.	251 Little Falls Drive, Wilmington, New Castle County, Delaware, 19808 United States	2021	Services	Engage in any lawful act or activity for which corporations may be organized under General Corporation Law of Delaware.	—		100.000	%	—		100.000	%	—	—

Biomat Newco, Corp.	251 Little Falls Drive, Wilmington, New Castle County, Delaware, 19808 United States	2021	Services	Engage in any lawful act or activity for which corporations may be organized under General Corporation Law of Delaware.	—		100.000	%	—		100.000	%	—	—

Grifols Escrow Issuer, S.A.	Parque Empresarial Can Sant Joan, Avda de la Generalitat, 152-156, Sant Cugat del Vallès, 08174, Barcelona Spain	2021	Services	Administration, management and control services for companies and businesses, as well as investment in property, as well as providing advisory services of any investee entities or group companies.	100.000	%	—		100.000	%	—		—	—

Prometic Plasma Resources, Inc.	531 Boul. Des Prairies, Building 15 Laval, Quebec H7V 1B7 Canada	2021	Industrial	Procurement of human plasma.	—		100.000	%	100.000	%	—		—	—

Access Biologicals, LLC	955, Park Center Drive, Vista, CA 92801, USA	2017	Industrial	Manufacture of biological products such as specific serum and plasma reagents that are used by	—		100.000	%	—		49.000	%	—	49.000	%

F-121

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020

				biotechnological and biopharmaceutical companies for in-vitro diagnosis, cell culture and research and development in the field of diagnostics.

Access Biologicals IC-DISC, Inc.	995 Park Center Dr, Vista, CA 92081, USA	2017	Industrial	Manufacture of biological products, including specific sera and plasma-derived reagents, which are used by biotechnology and biopharmaceutical companies for in-vitro diagnostics, cell culture, and research and development in the diagnostic field.	—	100.000	%	—	49.000	%	—	49.000	%

Access Cell Culture, LLC.	995 Park Center Dr, Vista, CA 92081, USA	2017	Industrial	Manufacture of biological products, including specific sera and plasma-derived reagents, which are used by biotechnology and biopharmaceutical companies for in-vitro diagnostics, cell culture, and research and development in the diagnostic field.	—	100.000	%	—	49.000	%	—	49.000	%

Access Plasma, LLC.	995 Park Center Dr, Vista, CA 92081, USA	2017	Industrial	Manufacture of biological products, including specific sera and plasma-	—	100.000	%	—	49.000	%	—	49.000	%

F-122

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020

				derived reagents, which are used by biotechnology and biopharmaceutical companies for in-vitro diagnostics, cell culture, and research and development in the diagnostic field.

Albimmune, S.L.	Parque Empresarial Can Sant Joan, Avda de la Generalitat, 152-156, Sant Cugat del Vallès, 08174, Barcelona España	2022	Research	The purpose of the company is the research, development and exploitation of a project on the application of the use of albumin as a medicine	—		51.000	%	—	—	—	—

Biotest, AG	Landsteinerstr. 5, D-63303 Dreieich, Germany	2022	Industrial	Development, manufacture and distribution of biological, chemical, pharmaceutical, human and veterinary medical, cosmetic and dietary products as well as containers, devices, machines and accessories for medical, pharmaceutical and analytical purposes, as well as research in these fields. Furthermore the activity (especially research development, production and distribution) in the field of plant protection and plant breeding,	24.700	%	45.480	%	—	—	—	—

F-123

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020

				the field of testing and purification of soil, water and air and in the field of products, materials and techniques used in space.

Biotest Austria, GmbH	Einsiedlergasse 58, A-1050, Vienna, Austria	2022	Industrial	Distribution of pharmaceutical products.	—	70.180	%	—	—	—	—

Biotest Italia, S.R.L.	Via Leonardo da Vinci 43, I-20090 Trezzano sul Naviglio MI, Italia	2022	Industrial	Distribution of pharmaceutical products.	—	70.180	%	—	—	—	—

Biotest (UK) Ltd.	17 High Street, B31 2UQ Longbridge Birmingham, United Kingdom	2022	Industrial	Distribution of pharmaceutical products.	—	70.180	%	—	—	—	—

Biotest (Schweiz) AG	Schützenstrasse 17, CH-5102 Rupperswil, Switzerland	2022	Industrial	Distribution of pharmaceutical products.	—	70.180	%	—	—	—	—

Biotest Hungaria Kft	Torbágy utca 15/ A, Törökbálint 2045, Hungary	2022	Industrial	Procurement of human plasma.	—	70.180	%	—	—	—	—

Biotest Farmacêutica LTDA	Rua José Ramos Guimarães, 49 A Centro, 12955-000, Bom Jesus dos Perdões – SP, Brasil	2022	Industrial	Distribution of pharmaceutical products.	—	70.180	%	—	—	—	—

Biotest Hellas M.E.P.E.	45 Michalakopoulou Str., 11528 Athens, Greece	2022	Research	Research and development of solutions in the Biopharma area.	—	70.180	%	—	—	—	—

Biotest France SAS	45/47 rue d'Hauteville, 75010 Paris, France	2022	Servicios	The purpose of the company is to act as an agent and support the group companies.	—	70.180	%	—	—	—	—

Biotest Pharmaceuticals Ilaç Pazarlama Anonim Sirketi	Nishstanbul, Cobançesme Mahallesi, 34197 Bahçeliever, Istanbul, Turkey	2022	Research	Research and development of solutions in the Biopharma area.	—	70.180	%	—	—	—	—

Biotest Medical, S.L.U.	C/ Frederic Mompou, nº 5, 6º 3ª A, 08960 Sant Just Desvern, Barcelona, Spain	2022	Industrial	Distribution of pharmaceutical products.	—	70.180	%	—	—	—	—

F-124

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020

Biotest Pharma, GmbH	Landsteinerstr. 5, D-63303 Dreieich, Germany	2022	Industrial	Carry out the development and production activities in the Biopharma area.	—		70.180	%	—	—		—	—

BioDarou PLC	Sarparast St., Italia St. Felestin Ave, 1416653163 Tehran, Iran	2022	Industrial	Procurement of human plasma.	—		70.180	%	—	—		—	—

Biotest Grundstücksverwaltungs GmbH	Landsteinerstr. 5, D-63303 Dreieich, Germany	2022	Servicios	Management of own assets.	—		70.180	%	—	—		—	—

Plasma Service Europe GmbH	Landsteinerstr. 5, D-63303 Dreieich, Germany	2022	Industrial	Procurement of human plasma.	—		70.180	%	—	—		—	—

Cara Plasma s.r.o.	Jungmannova 745/24 - Nové Město, 110 00 Praha 1 , Czech Republic	2022	Industrial	Procurement of human plasma.	—		70.180	%	—	—		—	—

Plazmaszolgálat Kft	Torbágy utca 15/ A, Törökbálint 2045, Hungary	2022	Industrial	Procurement of human plasma.	—		70.180	%	—	—		—	—

Grifols Biotest Holdings GmbH	Colmarer Str. 22, 60528 Frankfurt am Main, Germany	2022	Services	Management of own assets as well as the acquisition, sale, holding and management of shares in other companies in Germany and abroad in the company's own name and on its own account (not third parties), in particular in Biotest AG with registered offices in Dreiech.	100.000	%	—		—	—		—	—

Equity-accounted investees Aradigm Corporation	3929 Point Eden Way Hayward, California United States	2013	Research	Development and commercialisation of drugs delivered by inhalation for the prevention and treatment of severe respiratory diseases.	—		—		—	35.130	%	—	35.130	%

Mecwins, S.L.	Avenida Fernandos Casas Novoa, 37 Santiago de Compostela, Spain	2013	Research	Research and production of nanotechnological, biotechnological	—		24.590	%	—	24.990	%	—	24.990	%

F-125

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020

				and chemical solutions.

Albajuna Therapeutics, S.L	Hospital Germans Trias i Pujol, carretera de Canyet, s/n, Badalona Spain	2016	Research	Development and manufacture of therapeutic antibodies against HIV.	—	49.000	%	—	49.000	%	—	49.000	%

Singulex, Inc.	4041 Forest Park Avenue St. Louis, Missouri United States	2016	Research	Development of the Single Molecule Counting (SMC™) technology for clinical diagnostic and scientific discovery.	—	—		—	19.330	%	—	19.330	%

Access Biologicals, LLC. (becomes part of the group)	995 Park Center Dr, Vista, CA 92081, USA	2017	Industrial	Manufacture of biological products, including specific sera and plasma-derived reagents, which are used by biotechnology and biopharmaceutical companies for in-vitro diagnostics, cell culture, and research and development in the diagnostic field.	—	—		—	49.000	%	—	49.000	%

Access Biologicals IC-DISC, Inc.	995 Park Center Dr, Vista, CA 92081, USA	2017	Industrial	Manufacture of biological products, including specific sera and plasma-derived reagents, which are used by biotechnology and biopharmaceutical companies for in-vitro diagnostics, cell culture, and research and development in	—	—		—	49.000	%	—	49.000	%

F-126

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020

				the diagnostic field.

Access Cell Culture, LLC.	995 Park Center Dr, Vista, CA 92081, USA	2017	Industrial	Manufacture of biological products, including specific sera and plasma-derived reagents, which are used by biotechnology and biopharmaceutical companies for in-vitro diagnostics, cell culture, and research and development in the diagnostic field.	—	—		—	49.000	%	—	49.000	%

Access Plasma, LLC.	995 Park Center Dr, Vista, CA 92081, USA	2017	Industrial	Manufacture of biological products, including specific sera and plasma-derived reagents, which are used by biotechnology and biopharmaceutical companies for in-vitro diagnostics, cell culture, and research and development in the diagnostic field.	—	—		—	49.000	%	—	49.000	%

GigaGen Inc.	407 Cabot Road South San Francisco, CA 94080, USA	2017	Industrial	Engage in any lawful act or activity for which corporations may be organized under General Corporation Law.	—	—		—	—		—	43.960	%

Medcom Advance, S.A	Av. Roma, 35 Entresuelo 1, 08018 Barcelona; Spain	2019	Research	Research and development of nanotechnological solutions.	—	45.000	%	—	45.000	%	—	45.000	%

F-127

Table of Contents

APPENDIX I

GRIFOLS, S.A. AND SUBSIDIARIES

Information on Group Companies, Associates and others for the years ended 31 December 2022, 2021 and 2020

Shanghai RAAS Blood Products Co. Ltd.	2009 Wangyuan Road, Fengxian District, Shanghai	2020	Industrial	Introducing advanced and applicable technologies, instruments and scientific management systems for manufacturing and diagnosis of blood products, in order to raise the production capacity and enhance quality standards of blood products to the international level.	26.200	%	—	26.200	%	—	26.200	%	—

Grifols Egypt for Plasma Derivatives (S.A.E.)	Tolip El Narges Hotel, Teseen Streett, Fifth Settlement, Cairo Egypt	2021	Industrial	Establish and operate a plasma fractionation plant, regardless of whether the plasma is collected locally or imported, as well as its filling and packaging.	49.000	%	—	49.000	%	—	—		—

This appendix is part of note 2 from the consolidated financial statements.

F-128

Table of Contents

APPENDIX II

GRIFOLS, S.A. AND SUBSIDIARIES

Operating Segments for the years ended 31 December 2022, 2021 and 2020

(Expressed in thousands of Euros)


	Biopharma			Diagnostic			Bio Supplies			Others			Intersegments			Consolidated
	2022	*2021 ()**	*2020 ()**	2022	*2021 ()**	*2020 ()**	2022	*2021 ()**	*2020 ()**	2022	*2021 ()**	*2020 ()**	2022	*2021 ()**	*2020 ()**	2022	*2021 ()**	*2020 ()**
Revenues from external customers	5,005,382	3,814,983	4,242,502	671,292	779,108	775,889	146,076	115,811	133,221	250,165	266,461	222,521	(8,948)	(43,245)	(34,095)	6,063,967	4,933,118	5,340,038

Total operating income	5,005,382	3,814,983	4,242,502	671,292	779,108	775,889	146,076	115,811	133,221	250,165	266,461	222,521	(8,948)	(43,245)	(34,095)	6,063,967	4,933,118	5,340,038

Profit/(Loss) for the segment	791,339	681,925	967,415	129,968	152,948	215,793	114,397	39,901	36,142	(46,809)	(83,482)	(43,960)	35,419	(10,896)	4,428	1,024,314	780,396	1,179,818

Unallocated expenses																(218,634)	(185,332)	(183,686)

Operating profit/(loss)																805,680	595,064	996,132

Finance result																(442,941)	(277,799)	(177,669)

Share of profit/(loss) of equity- accounted investee	—	—	—	—	—	—	—	—	—	(1,482)	33,188	60,166	—	—	—	(1,482)	33,188	60,166

Income tax expense																(90,111)	(85,126)	(169,639)

Profit for the year after tax																271,146	265,327	708,990


Segment assets	13,187,651	9,467,378	7,975,667	3,681,632	3,513,991	3,371,125	341,876	47,446	251,551	766,139	827,371	641,341	(6,997)	(39,963)	(26,773)	17,970,301	13,816,223	12,212,911
Equity-accounted investments	41,162	31,847	—	—	—	—	—	53,264	46,782	1,914,015	1,914,665	1,822,238	—	—	—	1,955,177	1,999,776	1,869,020
Unallocated assets	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	1,608,499	3,417,836	1,192,845
Total assets																21,533,977	19,233,835	15,274,776

Segment liabilities	2,317,191	1,521,634	1,222,664	425,693	397,869	372,461	43,264	27,596	120,787	222,565	199,095	153,513	—	—	—	3,008,713	2,146,194	1,869,425
Unallocated liabilities	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	10,067,720	9,770,543	6,685,296
Total liabilities																13,076,433	11,916,737	8,554,721

Other information:

Allocated amortisation and depreciation	294,156	228,114	201,087	64,682	88,557	63,053	5,759	2,948	21,846	20,367	19,043	15,263	—	—	—	384,964	338,662	301,249

Unallocated amortisation and depreciation	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	22,900	21,105	20,284

Allocated expenses that do not require cash payments	(71,964)	26,051	38,955	13,639	4,446	(21,335)	120	73	3	(206)	3,349	(2,448)	—	—	—	(58,411)	33,919	15,175

Unallocated expenses that do not require cash payments	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	(10,770)	4,991	4,924

Allocated additions for the year of property, plant & equipment, intangible assets and rights of use	402,672	349,890	289,062	49,890	19,991	34,516	98	13,836	10,915	30,192	28,597	12,698	—	—	—	482,852	412,314	347,191

Unallocated additions for the year of property, plant & equipment, intangible assets and rights of use	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	59,866	55,380	107,178

This appendix forms an integral part of note 5 to the consolidated financial statements.

F-129

Table of Contents

APPENDIX II

GRIFOLS, S.A. AND SUBSIDIARIES

Reporting by geographical area

for the years ended 31 December 2021, 2020 and 2019

(Expressed in thousands of Euros)

Spain

Rest of European Union

USA + Canada

Rest of World

Consolidated

2022

2021

2020

2022

2021

2020

2022

2021

2020

2022

2021

2020

2022

2021

2020

Net Revenue

320,631

362,407

339,169

711,579

544,042

495,323

3,855,607

3,154,549

3,599,746

1,176,150

872,120

905,800

6,063,967

4,933,118

5,340,038

Assets by geographical area

1,156,068

1,092,435

1,117,647

6,600,264

5,393,407

2,927,198

11,561,068

10,525,140

9,138,360

2,216,577

2,222,853

2,091,571

21,533,977

19,233,835

15,274,776

Other information:

Additions for the year of property, plant & equipment, intangible assets and rights of use

60,503

71,022

93,787

107,030

91,388

92,873

363,034

295,526

253,442

12,151

9,758

14,267

542,718

467,694

454,369

This appendix forms an integral part of note 6 to the consolidated financial statements.

F-130

Table of Contents

APPENDIX III

GRIFOLS, S.A. AND SUBSIDIARIES

Changes in Other Intangible Assets

for the year ended

31 December 2022

(Expressed in thousands of Euros)

(Free translation from the original in Spanish. In the event of any discrepancy, the Spanish-language version prevails)


	Balance at		Business			Translation	Balance at
	12/31/2021	Additions	combinations	Transfers	Disposals	differences	12/31/2022

Development costs	801,606	39,835	943,857	—	(3,372)	40,159	1,822,085
Concessions, patents, licenses brands & similar	244,558	36,612	3,762	97	(3,907)	11,036	292,158
Computer software	330,491	31,299	50	1,881	(34,429)	11,699	340,991
Currently marketed products	1,083,301	—	—	—	—	65,561	1,148,862
Other intangible assets	156,009	1,323	307,927	(55)	(77,825)	12,418	399,797
Total cost of intangible assets	2,615,965	109,069	1,255,596	1,923	(119,533)	140,873	4,003,893
Accum. amort. of development costs	(168,366)	(28,160)	—	—	663	(3,581)	(199,444)
Accum. amort of concessions, patents, licenses, brands & similar	(64,176)	(12,321)	(332)	—	2,200	(2,702)	(77,331)
Accum. amort. of computer software	(200,291)	(30,357)	(12)	140	16,813	(6,598)	(220,305)
Accum. amort. of currently marketed products	(394,784)	(40,212)	—	—	—	(22,798)	(457,794)
Accum. amort. of other intangible assets	(81,298)	(12,603)	—	—	799	(4,687)	(97,789)
Total accum. amort intangible assets	(908,915)	(123,653)	(344)	140	20,475	(40,366)	(1,052,663)
Impairment of other intangible assets	(70,100)	(638)	—	79	76,302	(7,726)	(2,083)
Carrying amount of intangible assets	1,636,950	(15,222)	1,255,252	2,142	(22,756)	92,781	2,949,147

		(See note 3)

This appendix forms an integral part of note 7 to the consolidated financial statements.

F-131

Table of Contents

APPENDIX III

GRIFOLS, S.A. AND SUBSIDIARIES

Changes in Other Intangible Assets

for the year ended

31 December 2021

(Expressed in thousands of Euros)

(Free translation from the original in Spanish. In the event of any discrepancy, the Spanish-language version prevails)


	Balance at		Business			Translation	Balance at
	31/12/2020	Additions	combinations	Transfers	Disposals	differences	31/12/2021

Development costs	701,390	34,671	24,027	—	(5,679)	47,197	801,606
Concessions, patents, licenses brands & similar	228,023	57	—	—	—	16,478	244,558
Computer software	279,651	33,516	—	3,315	(208)	14,217	330,491
Currently marketed products	1,004,665	—	—	—	—	78,636	1,083,301
Other intangible assets	156,644	—	—	—	(12,146)	11,511	156,009
Total cost of intangible assets	2,370,373	68,244	24,027	3,315	(18,033)	168,039	2,615,965
Accum. amort. of development costs	(125,875)	(44,612)	—	(60)	5,679	(3,498)	(168,366)
Accum. amort of concessions, patents, licenses, brands & similar	(51,197)	(9,909)	—	—	—	(3,070)	(64,176)
Accum. amort. of computer software	(167,124)	(25,474)	—	(101)	178	(7,770)	(200,291)
Accum. amort. of currently marketed products	(331,968)	(35,989)	—	—	—	(26,827)	(394,784)
Accum. amort. of other intangible assets	(71,430)	(4,265)	—	—	—	(5,603)	(81,298)
Total accum. amort intangible assets	(747,594)	(120,249)	0	(161)	5,857	(46,768)	(908,915)
Impairment of other intangible assets	(65,129)	(73)	—	—	—	(4,898)	(70,100)
Carrying amount of intangible assets	1,557,650	(52,078)	24,027	3,154	(12,176)	116,373	1,636,950

(See note 3)

This appendix forms an integral part of note 7 to the consolidated financial statements.

F-132

Table of Contents

APPENDIX IV

GRIFOLS, S.A. AND SUBSIDIARIES

Movement in Rights of Use

for the year ended

31 December 2022

(Expressed in thousands of Euros)


	Balance at		Business			Translation	Balance at
	12/31/2021	Additions	combinations	Transfers	Disposals	differences	12/31/2022
Land and buildings	941,955	130,475	27,620	(455)	(35,924)	50,983	1,114,654
Machinery	9,076	5,055	347	(1,189)	(6,849)	224	6,664
Computer equipment	8,519	278	263	(568)	(1,848)	175	6,819
Vehicles	15,760	6,165	1,279	(10)	(2,527)	291	20,958

Total cost of rights of use	975,310	141,973	29,509	(2,222)	(47,148)	51,673	1,149,095

Accum. depr. of land and buildings	(159,831)	(72,214)	(359)	106	9,782	(7,088)	(229,604)
Accum. depr. of machinery	(3,792)	(1,983)	(236)	894	1,361	109	(3,647)
Accum. depr. of computer equipment	(6,475)	(1,432)	—	573	1,719	(178)	(5,793)
Accum. depr. of vehicles	(9,555)	(4,869)	—	4	2,157	(236)	(12,499)

Total accum. Depr. of rights of use	(179,653)	(80,498)	(595)	1,577	15,019	(7,393)	(251,543)

Carrying amount of rights of use	795,657	61,475	28,914	(645)	(32,129)	44,280	897,552

This appendix forms an integral part of note 8 to the consolidated financial statements.

F-133

Table of Contents

APPENDIX IV

GRIFOLS, S.A. AND SUBSIDIARIES

Movement in Rights of Use

for the year ended

31 December 2021

(Expressed in thousands of Euros)


	Balance at		Business			Translation	Balance at
	12/31/2020	Additions	combinations	Transfers	Disposals	differences	12/31/2021
Land and buildings	759,120	125,112	4,611	3,337	(3,603)	53,378	941,955
Machinery	5,907	3,412	—	(495)	(89)	341	9,076
Computer equipment	8,228	641	—	(629)	(7)	286	8,519
Vehicles	14,152	4,277	—	(407)	(2,887)	625	15,760

Total cost of rights of use	787,407	133,442	4,611	1,806	(6,586)	54,630	975,310

Accum. depr. of land and buildings	(94,118)	(57,901)	—	(3,337)	3,605	(8,080)	(159,831)
Accum. depr. of machinery	(2,236)	(2,120)	—	587	87	(110)	(3,792)
Accum. depr. of computer equipment	(4,640)	(2,269)	—	629	7	(202)	(6,475)
Accum. depr. of vehicles	(7,717)	(4,430)	—	407	2,581	(396)	(9,555)

Total accum. depr. of rights of use	(108,711)	(66,720)	—	(1,714)	6,280	(8,788)	(179,653)

Carrying amount of rights of use	678,696	66,722	4,611	92	(306)	45,842	795,657

This appendix forms an integral part of note 8 to the consolidated financial statements.

F-134

Table of Contents

APPENDIX V

GRIFOLS, S.A. AND SUBSIDIARIES

Movement in Property, Plant and Equipment

for the year ended

31 December 2022

(Expressed in thousands of Euros)


	Balances at		Business			Translation	Balances at
	31/12/2021	Additions	combination	Transfers	Disposals	differences	31/12/2022

Cost:

Land and buildings	860,447	4,636	236,732	11,374	(864)	43,081	1,155,406
Plant and machinery	2,527,744	50,025	316,946	115,070	(50,958)	110,196	3,069,023
Fixed Assets under construction	763,787	237,015	—	(147,240)	—	24,853	878,415

	4,151,978	291,676	553,678	(20,796)	(51,822)	178,130	5,102,844

Accumulated depreciation:

Buildings	(148,082)	(27,757)	—	1,553	57	(7,108)	(181,337)
Plant and machinery	(1,442,434)	(175,956)	(4,044)	3,201	41,061	(59,834)	(1,638,006)
	(1,590,516)	(203,713)	(4,044)	4,754	41,118	(66,942)	(1,819,343)

Impairment of other property, plant and equipment	(13,965)	(7,396)	—	9,383	340	(926)	(12,564)

Carrying amount	2,547,497	80,567	549,634	(6,659)	(10,364)	110,262	3,270,937
			(See note 3)

This appendix forms an integral part of note 9 to the consolidated financial statements.

F-135

Table of Contents

APPENDIX V

GRIFOLS, S.A. AND SUBSIDIARIES

Movement in Property, Plant and Equipment

for the year ended

31 December 2021

(Expressed in thousands of Euros)


	Balances at		Business			Translation	Balances at
	12/31/2020	Additions	combination	Transfers	Disposals	differences	31/12/2021

Cost:

Land and buildings	780,180	3,361	660	24,830	(123)	51,539	860,447
Plant and machinery	2,200,429	42,747	10,381	171,894	(24,960)	127,253	2,527,744
Fixed Assets under construction	704,582	219,900	(7,300)	(199,943)	—	46,548	763,787

	3,685,191	266,008	3,741	(3,219)	(25,083)	225,340	4,151,978

Accumulated depreciation:

Buildings	(122,948)	(19,388)	—	2,583	123	(8,452)	(148,082)

Plant and machinery	(1,235,483)	(153,408)	—	(2,609)	18,808	(69,742)	(1,442,434)

	(1,358,431)	(172,796)	—	(26)	18,931	(78,194)	(1,590,516)

Impairment of other property, plant and equipment	(2,653)	(11,246)	—	—	—	(66)	(13,965)

Carrying amount	2,324,107	81,966	3,741	(3,245)	(6,152)	147,080	2,547,497
			(See note 3)

This appendix forms an integral part of note 9 to the consolidated financial statements.

F-136

Grifols SA [GRFS] Filings
Grifols SA [GIFLF] Filings
Grifols SA [GIFOF] Filings
Grifols SA [GIKLY] Filings
20-F	[2023-04-18]
20-F	[2022-04-29]
20-F	[2021-04-09]
20-F	[2020-04-06]
20-F	[2019-04-05]
20-F	[2018-04-06]
20-F	[2017-04-04]
20-F	[2016-04-05]
20-F	[2015-04-01]
20-F	[2014-04-04]
20-F	[2013-04-05]
20-F	[2012-03-29]

Thousands of Euros

Reference

31/12/2022

31/12/2021

Finance lease expenses