Spanish Small & Midcaps: CAF

CAF, manufacturer for railway systemsCAF, manufacturer for railway systems

ACF | Spanish manufacturer for railway systems CAF was able to weather the current economic turbulences by means of an ambitious internationalisation plan that started in 1995. Revenue increased by 20 % yoy in the first half of 2017  to €755 million from 632 million to last year’s same period, driven by a recovery in industrial activity in rolling stock and growth in services. 87 % of revenues corresponded to the overseas market. Against this backdrop, CAF is an excellent investment opportunity.

1) the sector’s good situation. Analysing the figures published by UNIFE, the next few years should be very favourable for CAF. This is due to an increase in the annual accesible investments in the railway sector to 122.2 billion euros in the period 2019-2021e ((TACC of +3,2% vs the period 2013- 2015).

2) The company’s excellent geographic positioning and portfolio of products: the formers gives CAF increased potential because its biggest investments are concentrated in the regions where it operates. In this respect, Europe, a market which represents 49% of the group’s sales, will account for 40.2% of annual investments.

3) Its extensive portfolio of products: CAF is well positioned in practically all the different types of rolling stock. In any event, it’s worth pointing out that those segments where CAF has more weight (underground and light vehicles 46% of the order book at end-2016, regional trains 44%) will be earmarked for almost 50% of future investments in the sector.

4) Improvement in results: the strong order book (5.927 billion euros at end-H1’17 and 4,5x sales), a result of the high number of contracts awarded in 2016, guarantee future results and strong growth.




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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.