OUR SUSTAINABLE BUSINESS MODEL

OUR VALUES DRIVE OUR BUSINESS AND GUIDE “ONE GRIFOLS”

“One Grifols” gathers the solid corporate values established by the founders of Grifols in 1909.

These values promote teamwork, responsibility, innovation, sustainability, long-term value creation and strategic vision.

Inspired by these principles, Grifols creates wealth for its stakeholders by generating stable employment, driving frontline research, promoting development, and building trust with shareholders and investors. To this end, the company follows a sustainable growth strategy aligned with its mission of enhancing the health and well-being of people worldwide.

Grifols is the embodiment of these fundamental values, its commitments and a pioneering spirit in pursuit of scientific progress.

INTERNATIONALLY RECOGNIZED

THE PRINCIPLES OF BIOETHICS GUIDE OUR OPERATIONS: THE VÍCTOR GRÍFOLS I LUCAS FOUNDATION

As part of Grifols’ commitment to scientific and social progress, we believe that science must be firmly committed to life in all of its facets. At its essence, scientific progress aims to improve the quality of life of human beings, both as individuals and humanity as a whole.

This principle has formed part of Grifols’ DNA since its beginnings. The fundamental tenets of bioethics guide the development, production and marketing of Grifols products in order to ensure the safety and dignity of patients and donors and effectively address the ethical questions raised by scientific advancements.

Victor Grifols i Lucas Foundation
Grifols founded The Victor Grifols i Lucas Foundation in 1988 to spark cross-disciplinary debate and dialogue on the subject of bioethics. The Foundation aims to foster ethical attitudes among healthcare organizations, companies and professionals and serve as the catalyst for new new ideas, insights and perspectives on the ethics of life. In support of its mission, the Foundation sponsors a Bioethics Chair that promotes research and educational initiatives, awards, scholarships and publications to stimulate and spread knowledge of specific bioethic areas.
BASED ON BIOETHICS PRINCIPLES AND THROUGH A SOLID CORPORATE GOVERNANCE, GRIFOLS EVALUATES AND MANAGES ITS ECONOMIC, SOCIAL AND ENVIRONMENTAL DIMENSION, PROMOTING TALENT, INNOVATION, QUALITY AND SAFETY AS STRATEGIC PRIORITIES
GRIFOLS’ BUSINESS MODEL SUPPORTS SUSTAINABLE DEVELOPMENT GOALS (SDGs) PROMOTED BY THE UNITED NATIONS AND ORIENTED TOWARDS VALUE CREATION
It is a vertical integration model that promotes complementary products and services and global expansion

GRIFOLS’ BUSINESS MODEL SUPPORTS SUSTAINABLE DEVELOPMENT GOALS (SDGs)

We actively support efforts to achieve SDGs

Adopted by the United Nations in 2015, the 2030 Agenda for Sustainable Development offers a shared global vision to promote peace and prosperity for people and the planet. The Agenda is grounded in 17 Sustainable Development Goals, which collectively advocate a holistic approach to address and manage critical global challenges such as the eradication of hunger and poverty, access to high-quality education, gender equality, decent work opportunities and the fight against climate change. The SDGs have been broken down into 169 concrete and measurable targets to help translate these global commitments into action.

Grifols is highly aware of the critical role that companies can play toward achieving sustainable development. For this reason, it partners with and supports the actions of numerous agents engaged in this global pursuit, reflecting its commitment to making a positive impact on society.

In order to effectively measure and communicate its contributions, Grifols has pinpointed and prioritized the SDGs in which it could make the maximum impact. This analysis has enabled the company to determine how it could create the most value and provide solutions in relation to its sector, operations and geographical scope.

Grifols carried out a materiality analysis to prioritize these objectives, selecting a total of five core SDGs where it could wield the greatest impact and four additional SDGs in which it could make a significant contribution. Grifols also supports the SDG17 – Partnerships to the Goals – by collaborating with different interest groups (social and educational institutions, governments, organizations, entities and other companies) to jointly spearhead initiatives in the fields of education, innovation and healthcare, among others.

The numerous actions by which Grifols supports these concrete SDGs are highlighted throughout this report.

Grifols’ Contribution: SDGs Prioritization

Sustainable Development Goals

2019 Notable Contributions

Priority Objectives
  • Production of plasma-derived medicines to treat patients with communicable and non-communicable diseases such as primary immunodeficiencies (PID), coagulation disorders and alpha-1 antitrypsin deficiency, among others.
  • Progress on clinical trial for use of albumin to treat cirrhosis (phase III PRECIOSA) and acute-on-chronic liver failure (phase III APACHE).
  • Approvals and market launches of new product formulations and indications that address the needs of patients and healthcare professionals (Xembify® and HyperRAB®, among others).
  • Results confirming the efficacy of the AMBAR protocol in slowing down the progression of Alzheimer’s disease using measures combining cognitive and functional status in patients with mild-to-moderate Alzheimer’s Disease.
  • New diagnostic test to increase the safety of blood transfusions: detection of HIV virus, hepatitis B and C and other emerging viruses such as Zika, West Nile and babesiosis.
  • Development of new molecular diagnostic and prognosis tests for oncology, autoimmunity, cardiovascular medicine and the central nervous system. 
  • Manufacture of genomic and protein tests for in vitro diagnosis, prognosis, response prediction and monitorization of biologic drugs.
  • Creation of EUR 8,500 million in socioeconomic value and 148,000 jobs (direct, indirect and induced).
  • Growth of global workforce to 24,003 employees: 98% with permanent contracts and 93% employed full-time.
  • Reinforcement of a diverse talent pool to drive value creation: more than 80 nationalities, 51% of staff are 30-50 years old, 558 employees have some type of disability.
  • Establishment of a new area within the HR Department – “People Experience Hub” – to boost employee commitment and motivation. 
  • Commitment to the well-being of all employees with an increase in training hours on safety, health and environmental issues (more than 134,000 hours) and the launch of new health and wellness initiatives.
  • Total R+D+i investment of EUR 329 million (+12.9%). This figure represents 6.5% of revenues and denotes an innovation intensity 5 times greater than the European average. 
  • Increase in R+D+i personnel to more than 1,100 people.
  • More than USD 10 million allocated over the last 5 years to pre-clinical and clinical research projects through the Investigator Sponsored Research (ISR) program.
  • More than EUR 12 million allocated over the last 5 years to drive research projects on liver disease under the umbrella of the Grifols Chair.
  • Promotion of scientific dissemination, allocating more than EUR 2,150 thousand in 2019 to scholarships and scientific awards.
  • Analysis of more than 60 digital-innovation projects and initiatives that will lead to greater manufacturing efficiencies and quality improvements.
  • More than EUR 332 million allocated to improve production facilities.
  • EUR 21.8 million allocated to environmental initiatives. 
  • First pharmaceutical company in the U.S. to receive the Gold Certification in the “Zero Waste to Landfill” program.
  • 4% reduction in water consumption compared to 2018 and roll-out of savings measures in 75% of production centers.
  • Prioritization of waste revalorization, preventing 99% of waste generated in U.S. (Clayton, NC) facilities from reaching landfills (approximately 10,488 tons).
  • Waste recovery and recycling volumes reached 10,986 tons, with the goal of increasing recycling volumes by 500 tons more per year. 
  • Objective to consume 70% of electricity from renewable energy sources by 2030.
  • 2030 commitment to enhance energy efficiency by 15% per production unit through the systematic application of eco-efficiency measures.
  • Efforts to utilize surplus plasma from blood donations. Estimated savings of EUR 65 million for the Spanish public healthcare system arising from industrial hospital-plasma fractionation agreement.
  • Measurement and disclosure of carbon footprint in scopes 1, 2 and 3 in accordance with the GHG Protocol.
  • Application of TCFD recommendations to identify and disclose risks and opportunities stemming from climate change.
  • 13.9% savings in primary energy and reduction of 3,363 tons of CO2 emissions from the Bioscience Division’s cogeneration plant.
  • Offsetting of 1,500 tons of CO2 thanks to reforestation projects in areas of need in Panama, accredited by the Gold Standard Global Goals.
  • Goal to reduce CO2 emissions by 23,400 tons per year through the use of 68 million kWh in renewable electricity. 
  • Objective to reduce greenhouse gas emissions by 40% per production unit by 2030.
  • Distinction of Green Globe Certification in the new Clayton (U.S.) fractionation plant.
RELEVANT OBJECTIVES
  • 1.99 million training hours carried out in 2019: an average of 112 hours per employee.
  • More than 1.7 million training hours to employees with lower qualification, promoting equal opportunities among its workforce.
  • More than 7,900 collaborators and professionals received training and professional development through Grifols Academy programs and initiatives.
  • Reinforcement of strategic alliances to promote education, including the executive leadership program for senior managers in collaboration with ESADE Business School (Barcelona) and the University of Georgetown’s McDonough School of Business (Washington, D.C.)
  • Since 2013, 77 Grifols employees have graduated and 68 are in the process of earning a degree thanks to the collaboration with Southern New Hampshire University’s College for America program.
  • 31% of Board of Directors are women, exceeding CNMV recommendations.
  • 15% increase in female staff compared to previous year.
  • Increase in female representation in all professional categories, especially in the areas of top management (11.2%), senior management (11.3%) and professional staff (27.9%).
  • 98% of female employees have permanent contracts and 91% work full-time.
  • Launch in U.S. of the North America Bioscience Commercial Women’s Leadership Initiative (WLI) to support women’s career trajectories. WLI included 350 members in 2019.
  • Design of plans to increase employment of women and members of minority groups (+10.5%), with 106 concrete measures in place.
  • Gender pay gap is 2.2% in the U.S. and 5.1% in Spain. Significant strides made in identifying the root causes of the salary gap and creation of action plan.
  • Community investments of nearly EUR 40 million.
  • Donation of more than 31 million IU of clotting factors and a commitment to donate 200 million by 2021.
  • In 2019, an increase in social outreach programs in communities where Grifols plasma centers are located and implementation of more than 3,400 initiatives, an increase of 25%.
  • More than 2,400 employees in Grifols plasma donation centers took part in non-profit and fundraising activities.
  • Donation of EUR 5 million to the Probitas Foundation to promote the healthy development of children and young people at risk of social exclusion, emphasizing their physical, mental and emotional well-being and providing one meal per day.
  • No known cases of corruption.
  • Increase in communication and development activities related to anti-corruption, reaching 89% of at-risk employees.
  • Reinforcement of transparency: disclosure of transfer of value in Europe and the United States (in accordance with the EFPIA Disclosure Code and U.S. Open Payments Program) and contributions made in the U.S. according to LDA stipulations.
  • Member of the European Union’s Lobby Transparency Register

The full report on Grifols’ contributions to SDGs is available on www.grifols.com
For more information about Grifols’ contributions to each goal, see Annex III in chapter 9 “About this report

A BUSINESS MODEL BASED ON VERTICAL INTEGRATION

Grifols’ vertically integrated business model guarantees maximum quality and control at every stage of the value chain OF its four divisions
WE PUT DONORS AND PATIENTS AT THE CENTER OF OUR VALUE CHAIN
We transform donors’ generosity into life-saving treatments for patients around the world

A BUSINESS MODEL FOCUSED ON SUSTAINABLE VALUE CREATION

Grifols’ value creation is reflected in its four main divisions and its ongoing pursuit to offer cross-cutting services that bolster the organization and generate new opportunities.
Four Divisions
GRIFOLS ENGINEERING
Since its origins, Grifols has focused its efforts on in-house engineering as a lever to innovate and continuously improve its industrial productivity. Grifols Engineering is dedicated to designing and constructing specialty machinery, as well as providing specialized engineering solutions to optimize biotech processes and manufacturing systems.
GRIFOLS TRAVEL AGENCY
As an international company with a strong U.S. presence and subsidiaries in 30 countries, Grifols decided to establish its own travel agency – Grifols Viajes – in order to better manage the global mobility of its workforce. Grifols Viajes offers Grifols’ employees the flexibility they need to plan their trips and optimize work-life balance. The agency also coordinates corporate events, conferences and other internal meetings.

2019 GRIFOLS’ SOCIOECONOMIC IMPACT

Grifols estimated the socio-economic impact of its 2019 operations in terms of wealth generation and job creation in its core countries of operation – United States, Spain, Germany and Ireland.
MAIN SOCIO-ECONOMIC IMPACTS
Grifols’ direct economic impact amounts to EUR 4.400 million. Additionally, Grifols generates an indirect and induced impact of EUR 4.100 million
41% of Grifols’ impact stems from its plasma center network
Grifols generates 148,000 jobs in total, including 125,000 indirect and induced jobs
Grifols generates 5.4 jobs for every 1 job it creates
60% of jobs are linked to Grifols plasma centers
All results and methodology used are included in Chapter 9 “About this report
Socio-economic impact in the United States
Socio-economic impact in SPAIN
Socio-economic impact in Germany
Socio-economic impact in Ireland

OUR BUSINESS MODEL PROMOTES GLOBAL EXPANSION

after closing the deal, Grifols will be the second-largest shareholder in Shanghai RAAS
The strategic alliance with Shanghai RAAS will boost the production, sale and development of plasma-derived products and transfusion diagnostic solutions in China in compliance with the strictest international quality and safety standards

Enhanced position in China 

In 2019, Grifols announced a strategic alliance with Shanghai RAAS, a leader in China’s plasma derivatives sector, in alignment with its sustainable growth strategy and long-term vision. Through this agreement, Grifols will strengthen its international expansion and presence in the People’s Republic of China, one of the markets with the greatest growth potential for plasma-derived products and transfusion diagnostic solutions.

China is currently Grifols’ third-most important market in terms of sales. It is the company’s largest market for albumin and the third most important market for the Diagnostic Division, with the highest sales volume of DG-Gel® cards and second-highest sales volume of Procleix® NAT Solutions.

Grifols will control a 26.2% stake in Shanghai RAAS’s capital (economic and voting rights) after closing the deal. Grifols will be now the second-largest shareholder in Shanghai RAAS and will have three members on its Board of Directors, out of the nine members.


CHINA: A GROWTH MARKET FOR GRIFOLS

China represents 55% of the global albumin market1, 10% of immunoglobulin1 (IVIG) and 5% of plasma factor VIII1.

China ranks 8th in the world in per capita consumption of albumin, with 325 grams per 1,000 population1, significantly higher than the worldwide average of 173 grams per 1,000 population1.The total volume of albumin in China expanded by 13.3% over 2012-20182.

Its per capita consumption of immunoglobulin is 20 grams per 1,000 population1, lower than the worldwide average of 28.4 grams per 1,000 population1. This consumption has shown a cumulative growth of 10.4%2 over 2013-2018.

China’s plasma factor VIII market grew by 24.5% over 2013-20182,with per capita consumption of 0.2 IU per 1,000 population1 lower than the global average of 1.9 IU per 1,000 population1.

China currently has 249 operational plasma centers3 that collected 8.41 million liters of plasma in 20184. Shanghai RAAS owns 41 centers, which represent 16% of the total. 

In 2018, China denoted a market of 14.9 million NAT blood-donor analyses5 and EUR 200 million in in-vitro immunohematology tests6.

1 Grifols Global Plasma Industry Database2017 (values).
2 Data sources: Institutes of Food and Drug Control. 
3 Source: Report released by listed manufacturers. Updated on October 28, 2019.
4 Sources: Annual report released by listed manufacturers; PPTA; National Health Committee (NHC).
5 Source: National Health Committee (NHC).
6 Source: InterChina Survey 2017.

FOR 35 YEARS GRIFOLS HAS BEEN PROGRESSIVELY STRENGTHENING ITS PRESENCE IN CHINA, CURRENTLY THE COMPANY’S THIRD-LARGEST MARKET IN SALES
GRIFOLS IN CHINA
Shanghai RAAS