SALOMÉ BOUZAS ROMERO
MUTUAL FUND ANALYST & PORTFOLIO MANAGER
Score prediction: SPAIN 2 – SWEDEN 1
If you think about Spanish companies that are world class leaders in their industry, the first one that probably comes to mind is Inditex. Even though the headquarters of Inditex are a few kilometers away from where I was born, I would like to introduce the readers to another global leader that is probably less well known.
I’m talking about Grifols, a global company, established in 1909 in Barcelona, focused on the production of plasma-derived medicines and transfusion medicine.
Let’s begin explaining what the plasma is: our blood is make up of different components – for example red cells and white cells. The biggest component is plasma which consists mostly of water containing proteins and antibodies.
Grifols picks out these proteins to produce medicines that can cure a huge variety of diseases. The company represents 20% of a market that has an oligopolistic structure and high barriers of entry (it takes six years to set up a factory).
In its Q1 reporting we have seen the resilience the company has shown during the pandemic: its revenues have declined slightly in the last quarter, achieving a EBITDA of €322m due to very compelling operating margins. This was accomplished thanks to the contribution of new products and its ability to increase prices, both of which have offset its lower sales.
In addition to its competitive advantage, we see its innovation to which it dedicates €300m each year, as a driver that will help Grifols maintain this privileged position in a healthcare segment that remains globally under used.
HEAD OF ASSET MANAGEMENT
Score prediction: SPAIN 3 – SWEDEN 1
In our industry we constantly remind clients that Past Performance is no guarantee of future results when it comes to evaluating investments. However, in this particular football match, that statement could probably not be further away from the truth.
Over the last 100 years, Sweden has beat Spain only three times in football. Last time it happened was in Stockholm on the 7 October 2006 and I recall how the loss left Spain in a state of shock.
Since that very day in October 2006, the Spanish stock market (measured as IBEX 35), excluding dividends, has fallen over 30% giving a negative average annual return of -2.2%.
During the same time period, the Swedish equity market (measured as OMX 30), excluding dividends, has risen 113% giving a positive average annual return just shy of 5%.
The loss against Sweden back in 2006 is probably not the only way to explain the relative performance between the two equity markets, but rather that the Kingdom of Sweden has world class infrastructure, cutting edge tech companies and the growth is green.
Spain, however, is the undisputed favourite to win the group.