Small Caps under the microscope: Gefran and its expansion strategy in South America

As at 30 June 2026, Gefran had net cash of 25.6 million, although this was down from the 32.6 million recorded at the end of 2025 following capital expenditure of 8.1 million (an investment programme totalling 20 million is currently underway for the refurbishment of a 13,000 m² building owned by the company in Via Stazione Vecchia, Provaglio d’Iseo, which is expected to be fully operational in the spring of 2027; 3.9 million was allocated to this project in the first half of 2026), the acquisition of the remaining 40 per cent stake in Cz Elettronica Srl for 0.6 million, the payment of dividends totalling 6.1 million and taxes amounting to 1 million.

And now the acquisition of Novus. This will strengthen both of Gefran’s business areas (whilst also expanding the product range in the instrumentation, monitoring and Industrial IoT segments) and in 2025 it generated (in euro terms) revenue of 16.4 million and EBITDA of 3.4 million (an EBITDA margin of 20.7 per cent, which is therefore very high), as well as having net cash of approximately 1.2 million. Following the completion of the transaction, Gefran will nevertheless maintain a low level of debt (moreover, as at 30 June 2026, its equity stood at approximately 102.7 million, whilst Novus’s was approximately 13.2 million euro) and there is therefore no reason to believe that the shareholder remuneration policy will be altered (the 2025 payout ratio is approximately 61 per cent).

One feature that Gefran and Novus have in common is their regular participation in trade fairs. In 2026, the Brescia-based group took part in SPS Italia in Parma, Plast in Milan and Chinaplast, and will soon be attending Conexpo India, whilst Novus attended Distributech in San Diego, the Hannover Messe, Fispal Technology in São Paulo, and Automation Expo in Mumbai, and will attend the Chillventa trade fair in Nuremberg in November. For export-oriented companies, participation in international trade fairs is strategic and serves, above all, to showcase new products and technological innovations. It is no coincidence that, as at 30 June 2026, Gefran’s operating costs (excluding staff and raw materials) rose by 7.3 per cent to 12.8 million.

In the first half of 2026, Gefran launched the new Tpla silicon-based low-pressure sensor, the new GHS Safety range of wire-type sensors and the G-Mation W55 operator panels, but further innovations are expected by the end of the year, particularly in the field of magnetostrictive sensors; Furthermore, the first Research and Development unit has been established at Gefran Automation Technology’s Shanghai headquarters.

Another area of common ground is the focus on ESG issues. Gefran has been producing a sustainability report for years, and already 83 per cent of its electricity comes from certified renewable sources (the new plant will house a 500 kWp photovoltaic system and will be surrounded by a landscaping project based on native species), 100 per cent of packaging is recyclable and 100 per cent of the paper used is from certified sources. A pilot project on environmental impact assessment has been carried out for the KM pressure sensor, and the group aims to reduce its carbon footprint by 25 per cent by 2030. Furthermore, from 2025, Enterprise Risk Management processes and dual materiality analysis have been integrated for ESG purposes.

For its part, in June 2026, Novus launched a page on its website dedicated specifically to ESG issues (with monthly updates) and, on the social front, provides financial support to the Associação Esporte+, which helps people with disabilities take part in sport.

Gefran, which is included in the FTSE Italia Small Cap Index and, more specifically, in the high-standard Star segment, has also been part of the Intermonte Valore Italia Index since July 2026, whose constituents must meet various requirements, including financial soundness (a net debt to EBITDA ratio of less than 5 times; as we have seen, Gefran will comfortably meet this criterion even following the acquisition of Novus) and a free float of at least 30% (for Gefran, this stands at 36.5 per cent, and the shareholder base includes major institutional investors such as Anima Sgr and Lazard Fréres Banque, each holding stakes of just over 5 per cent).

The market values the company, but over the past year its share price has shown only a modest increase (less than 10 per cent), which probably does not fully reflect the group’s potential, particularly in view of the forthcoming expansion of its geographical diversification across its target markets (in the first half of 2026, around one-third of revenue came from Italia – which nevertheless remains a priority – and one-quarter each from the rest of the EU and Asia, the latter being a growing market despite the adverse impact of exchange rates).

Hence the strategic importance of both Gefran and Novus taking part in trade fairs in India, and of expanding the Group’s presence in the Americas – whilst seeking to mitigate the impact of US tariffs – thanks to the strategic acquisition in Brazil. It is no coincidence that, from 6 to 11 September 2026, over 90 Italian companies will be travelling to Argentina and Brazil as part of the first joint Confindustria–ICE mission following the Mercosur agreement; in the very first month of the agreement’s implementation, Italian exports to the region rose by 21.1 per cent to 745 million (90 per cent of which was to Argentina and Brazil) compared with May 2025.