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Growth in the public transport industry: CAF/ Solaris and Stadler with record sales

Die CAF Gruppe inklusive des Busherstellers Solaris und Stadler verzeichneten im Jahr 2019 Rekordumsätze I Fotomontage: Urban Transport Magazine

The increasing investment in public transport and e-mobility and the healthy growth of CAF and Stadler, which have turned from medium-sized companies to global players, are probably the reason why both groups can show above-average growth in 2019 with record numbers. However, the weak position of competitors such as Bombardier and Pesa might have helped the success of CAF and Stadler in recent years.

CAF’s net profit rose 47% in 2019 to € 63 million and has record orders of € 4.066 billion. It was a good year for the Basque train manufacturer based in Beasain (Guipúzcoa) thanks to the diversification and purchase of the Polish bus manufacturer Solaris at the end of 2018. Revenue rose to € 2.598 billion (+ 27%), of which 89% came from Solaris and its international business. The takeover of Solaris was a good move for CAF.

The CAF Group’s order backlog reached a total of 9.446 billion euros (+ 22%) in 2019 and is thus almost twice as high as four years ago. Looking to the future, CAF hopes for further growth for both its subsidiaries Solaris and EuroMaint, a Swedish train maintenance company which CAF acquired in July 2019.

Record year for Solaris

2019 was a record year for Solaris in many respects. First of all, the company has achieved its biggest ever sales volume. All in all, the manufacturer has supplied 1487 vehicles. Furthermore, Solaris saw record sales revenues of PLN 2.6 billion in 2019. This represents a climb by nearly 40% year-on-year. For 2020, the firm is setting itself ambitious sales targets. And it is already clear that this year, the firm will deliver over 500 electric buses. 

Chart: Solaris revenue over the years 2016-2019 in millions of PLN (Złoty) I © Solaris Bus & Coach S.A.

In 2019, Solaris sold a record number of 1487 vehicles. That is the best result ever achieved by the company. The previous record sales volume occurred in 2017 and was by nearly 100 buses lower (1397).

Currently, products of Solaris can be found in 32 countries, in over 750 cities. In total, the manufacturer has supplied nearly 19,000 vehicles to its customer so far. In 2019, the biggest sales markets of Solaris were Poland, Germany, Belgium, Lithuania and Italy. It should be stressed that Solaris is very dynamically developing its sales position on European markets but it is also quickly refocusing the organisation of production and after-sales servicing towards vehicles with alternative, low or zero-emission propulsions. In 2018, hybrid and electric buses as well as trolleybuses constituted in total 29% of all vehicles sold. Meanwhile, in 2019, their share in sales increased by 11 percentage points to 40%. Solaris is an indisputable one of the European leaders of e-mobility. The number of sold and contracted electric buses made by Solaris has been growing dynamically for a few years now. In 2019, the manufacturer has supplied in total 162 battery buses, which marks a rise by 51% versus 2018.

Based on the orders already secured, it is possible to assume sales of battery buses of Solaris at a level of at least 500 units in 2020. The contracts due to be performed this year include among others the mega order for 130 articulated Solaris Urbino 18 for operator MZA in Warsaw, or the framework agreement for the supply of 250 Solaris Urbino 12 electric buses for Milanese operator ATM. Compared to 2017, this represents an over eightfold increase of orders secured for electric buses!

The rising significance of electric buses in the sales structure of Solaris is consistent with the long-term development strategy of the firm, as well as of the whole CAF Group which Solaris is part since 2018.

The trend of a growing share of low or zero-emission drive vehicles in the company’s sales and production structure will certainly continue in 2020. It is also consistent with the trends of the whole EU and EFTA market which is the chief area of commercial activity for Solaris. For a few years now, these states have seen an unusually dynamic climb of demand for low and zero-emission vehicles in public transport.

Solaris is one of the market leaders in the European e-bus market I © Solaris Bus & Coach S.A.

This is also shown in the number of battery buses ordered in EU and EFTA states in 2018 and 2019. When comparing the number of battery buses commissioned year-on-year (2018 – 1313 units / 2019 – 2341 units) we see that this segment has recorded a 78% surge. Solaris is one of the leaders of this transition of the market towards e-mobility. Company was of the first movers and promotors of e-bus technology and continues its leading role for many years now.

Stadler has sold more trains in 2019 than ever before

Stadler has sold more trains in 2019 than ever before. Incoming orders for 2019 amount to 5.1 billion Swiss francs and are over 700 million francs higher than the previous year. Of this amount, more than 833 million Swiss francs were attributable to the Service and Components reporting segment. Consequently, the order backlog also rose to a record 15 billion Swiss francs. Stadler has invested in new technologies in recent years and was able to win customers for several innovations much earlier than expected. These include digitalisation projects, new drive technologies with rechargeable batteries and hydrogen, and a completely newly developed tram model. Investments in growth and additional costs in projects (in particular Greater Anglia) have affected EBIT and EBIT margin. Exchange rate movements, particularly between the Swiss franc and the Norwegian krone and Swedish krona, had a negative effect on the operating result. As a result of the record high order intake, the result was also affected by higher than expected sales expenses. 

The year 2019 was marked by spectacular growth not only in terms of incoming orders, but also in other areas: a total of 444 trains and locomotives were delivered in the past financial year. This represents an increase of around 80 percent compared to the previous year. Seven fleets of vehicles which have received approval in various countries and now started regular passenger operations represent an essential component of these new deliveries; they include the Giruno high-speed train for SBB and the double-decker train for Mälardalstrafiks in Sweden.

Strong increase in sales 

In the financial year 2019 Stadler achieved growth in revenue of 60 percent compared to the previous year, generating revenue of 3.2 billion Swiss francs (prior year: 2 billion Swiss francs). However, due to postponements in projects (primarily Greater Anglia), revenue in the reporting period was lower than expected, which also weighed on the result.

The Greater Anglia order presents Stadler with specific challenges in several respects: firstly, the camera system of a British supplier, which had been taken into consideration at the request of the customer, did not meet expectations in terms of performance and stability. Secondly, the infrastructure in this region is partly dated, which led to disruptions during the introduction of the bi-modal FLIRT vehicle. However, approval for the bi-modal (BMU) and electrical (EMU) multiple units was achieved in record time.

EBIT margin of 6.1 percent 

Stadler also succeeded in increasing its operating result (EBIT). However, the EBIT margin was 6.1 percent, lower than in the previous year, and failed to meet expectations. Postponements and additional costs for individual orders had a significant impact on the result. As a result of the record order intake, EBIT was also affected by higher than expected sales expenses. In the same way, exchange rate movements, particularly between the Swiss franc and the Norwegian krone and Swedish krona, had a negative effect on the operating result.

Full order books: Stadler has established itself as a manufacturer of trains, metros and trams in Germany I © UTM

Capacity expansions required 

In order to ensure that the vehicles ordered last year can be delivered to the usual high standard of quality, capacity needs to be expanded at several locations and the provision of more specially trained staff ensured. Last year, Stadler’s headcount rose by 2,044 employees across the group (average FTEs), which represents an increase of around 23 percent. In 2019 an average of over 10,900 employees worked at Stadler. Introductory training of new employees in particular led to extra expenses for several orders. Further capacity and staff expansion is taking place, in addition to Switzerland particularly in Germany, Spain and Belarus. Switzerland continues to be the largest division in the Group with over 3900 employees.

With the new plant in St. Margrethen, optimum conditions have been created to enable us to remain competitive in a fiercely contested market, despite being based in the high-wage country of Switzerland. The investment in Switzerland as a manufacturing location at the St. Margrethen site, spread over several years, amounts to over 86 million Swiss francs. In 2019, significant investments were again made at various locations to expand capacity.

After growth-related above-average investments in net working capital and delays in individual projects, net cash flow from operating activities amounted to -186.8 million Swiss francs (compared to -193.3 million Swiss francs the previous year)

New markets 

Stadler has been successful in Asia in two respects: firstly, 34 diesel-electric locomotives have been sold to Taiwan. Secondly, Stadler has signed a joint venture agreement with PT Inka in Indonesia in September 2019 to gain a foothold on the Asian continent. Stadler sees the base in Indonesia as the best possible prerequisite for achieving profitable growth in this region.
The first US FLIRT trains have been in scheduled service in Dallas Fort Worth since the beginning of the year. On 13 May the new assembly plant in Salt Lake City (Utah) was inaugurated. The very first service contract was won in the USA at the beginning of June: the order for the delivery of eight FLIRT trains for Dallas Rapid Transit (DART) also includes the planning of a service depot. In November, the Metropolitan Atlanta Rapid Transit Authority (MARTA) awarded Stadler a contract for the delivery of 127 METRO trains with two options for 25 additional trains each. For Stadler this is the largest single order for vehicles in the history of the company, and also marks the first major METRO order in the USA. Also in November, Stadler was able to secure its first contract for a hydrogen-powered train. Stadler is building the first FLIRT H2 vehicle for the San Bernardino County Transportation Authority (SBCTA), which is to be put into passenger service from 2024.

Growing business in the USA: In 2019, Stadler has reveived an order for hydrogen trains for California I © Stadler

Service business experiences rapid growth 

Incoming orders in the Service and Components reporting segment amounted to 833 million Swiss francs in 2019, well above the previous year’s level. In May, Stadler signed a contract for the maintenance of over 100 trains operated by Vy in Norway. It is the largest single fleet Stadler has ever contracted. In the area of modernisation and refit, Stadler won two major orders from Bogestra and Netinera in Germany. Orders for the installation of the Stadler diagnostics device (RDS system) are smaller in volume, but strategically important in the current context of digitalisation.

In the beginning of 2020, Stadler received an order for 42 light-rail vehicles for Newcastle including a maintenance contract I © Nexus/ Stadler

At the newly opened service location in Herne, Germany, Stadler will maintain 41 vehicles of the new fleet for the Rhein-Ruhr S-Bahn over a period of 32 years on behalf of the Verkehrsverbund Rhein-Ruhr (VRR). And in the UK, after delivering 52 new METRO trains for Merseytravel in Liverpool, Stadler will continue to be responsible for the maintenance of the trains in the ultra-modern new depot in Liverpool-Kirkdale for 35 years. Stadler Service will be in charge of the maintenance of the newly developed battery-powered FLIRT vehicles sold to Schleswig-Holstein for a period of 30 years.

Establishment in the signalling business 

Stadler has been constantly developing and expanding its signalling division since 2016. At the Wallisellen signalling location, several teams of highly qualified engineers are working on the implementation of the signalling strategy for the mainline, branchline and metro products. The first successes were seen last year: the ETCS train control system GUARDIA developed by Stadler and Mermec within the Angelstar joint venture received generic approval in 2019. The system is being used in BLS’s new FLIRT trains, which will be presented to the public for the first time this summer. Equivalent projects are also currently under way in Poland, Hungary, Slovenia, Italy and Germany. In addition, further projects are emerging, and country-specific approval for Stadler GUARDIA will progressively be sought in ten countries by 2022. Stadler Signalling was converted into a separate company at the beginning of 2020.

Stadler will not only deliver trains, but also signalling equipment in the future I © UTM

Management changes 

In 2019, the Board of Directors and the Group Executive Board underwent a number of changes, most of which were the result of a long-planned generation change. Jure Mikolčić assumed responsibility for the Division Germany on 1 February 2019. Markus Bernsteiner took over as manager of the Altenrhein plant from Markus Sauerbruch on 1 June 2019. Sales Director Peter Jenelten handed over to Ansgar Brockmeyer in May and, after 19 years of service at Stadler, moved to PCS Holding in Frauenfeld. At the Annual General Meeting in March 2019, Barbara Egger-Jenzer, former member of the Berne government, became the first woman to be elected to Stadler’s Board of Directors. Unfortunately, in mid-July we learned of the death of the highly esteemed, long-standing member of the Board of Directors Dr. Werner Müller (since 2003), former German Federal Minister for Economic Affairs. At the General Meeting to be held on 30 April 2020, the Board of Directors will propose Doris Leuthard, former Swiss Minister of Transport, for election to the Board of Directors. Friedrich Merz will not stand for re-election.

Successful IPO 

Stadler Rail AG has been listed on the SIX Swiss Exchange since 12 April 2019. The highly acclaimed IPO can be seen as a great success. The share price has performed well since the first day of trading. As at 31 December 2019 it had increased by more than 27 percent in relation to the issue price of 38 Swiss francs. The stock is very broadly diversified: as at 31 December 2019, Stadler had over 30,000 shareholders, including a large number of small shareholders. Around 20 percent of the shareholders own no more than 50 shares.

Stadler is expanding its production capacities in St. Magrethen neat the Swiss-Austrian border I © Stadler Rail

After exercising the over-allotment option, a total of 40,250,000 existing shares, or 40.25 percent of the share capital, were placed in the course of Stadler’s IPO. The placement volume corresponded to 1,530 billion Swiss francs. Peter Spuhler holds 39.9 percent of Stadler’s share capital directly and indirectly via PCS Holding AG. Another ten percent is held by the German RSBG SE (wholly owned by the RAG Foundation). The costs for the IPO process are fully borne by the selling shareholder.


For the current financial year, Stadler once again expects growth in revenue in the double digits, assuming that the currency situation remains stable, and anticipates a similar result to 2019. Ongoing high investments and additional costs in connection with the expansion of capacity will continue to impact profitability this year. The medium-term financial objectives have been explicitly confirmed. The Board of Directors intends to put forward a proposal to the General Meeting for the payment of a dividend of 120 million Swiss francs (1.20 Swiss francs per share) for the 2019 financial year. For the 2020 financial year, Stadler plans to pay a dividend amounting to around 60 percent of the Group result.