Getlink SE: Navigating Cross-Channel Growth Amid Shifting Tides

The Channel Tunnel, a marvel of modern engineering connecting the UK and mainland Europe, remains a vital artery for trade and travel. For Getlink SE, the operator of this critical infrastructure, May 2025 marks a pivotal moment. While truck freight volumes continue to wane amid broader economic headwinds, passenger traffic has stabilized at a +3% year-to-date (YTD) growth rate, underscoring the resilience of demand for cross-Channel travel. This divergence in performance highlights Getlink's ability to capitalize on structural trends while mitigating cyclical risks—a testament to its strategic agility and long-term asset durability.

Passenger Traffic: A Resilient Pillar of Growth

Getlink's passenger vehicle traffic surged 18% in April 2025 compared to the prior year, driving YTD growth to +4% through April (rounded to +3% in the user's framing). This rebound reflects a confluence of factors: rising tourism, post-pandemic business travel recovery, and the streamlined “smart border” system implemented in 2020. By automating customs checks and reducing delays, this technology has slashed average wait times by 40%, enhancing reliability and attracting travelers back to the Channel Tunnel.

The stabilization of passenger demand contrasts sharply with truck freight, which dipped 3% in April 2025 and 1% YTD, reflecting softer manufacturing activity and supply chain shifts like nearshoring. Yet Getlink's passenger business now operates at pre-pandemic volumes, signaling a durable recovery. With tourism expected to remain robust in 2025, this segment is well-positioned to offset freight headwinds.

Truck Declines: A Temporary Blip or Structural Shift?

While truck volumes face near-term pressures, Getlink's long-term outlook remains anchored in its strategic diversification. Its Europorte rail freight subsidiary and ElecLink electricity interconnector—which connects the UK and French grids—provide dual revenue streams, shielding the company from overreliance on truck traffic. Meanwhile, the concession for the Channel Tunnel runs until 2086, offering 50+ years of predictable cash flows and reducing regulatory uncertainty.

Analysts highlight that freight declines may be cyclical rather than terminal. * shows the stock trades at *12.5x 2025E EV/EBITDA, a discount to peers, despite its fortress-like balance sheet and low-carbon commitments. This valuation gap suggests investors are overly focused on near-term freight trends while overlooking Getlink's structural advantages.

Operational Efficiency & Sustainability: A Competitive Moat

Getlink's focus on low-carbon operations and innovation is central to its long-term appeal. The ElecLink project, completed in 2020, reduces grid volatility and cuts emissions by enabling cross-border renewable energy trading. Meanwhile, the smart border system lowers operational costs while improving customer satisfaction—a rare win-win in infrastructure. These initiatives align with EU climate targets, positioning Getlink as a defensive yet growth-oriented infrastructure play.

The company's operational efficiency is also evident in its margin expansion. Despite inflationary pressures, Getlink's cost discipline and scale have maintained stable margins, with EBITDA margins hovering at 45–50% since 2021. This resilience supports dividend payouts, which have grown steadily over the past decade.

Investment Thesis: Buy the Dip, Hedge with Diversification

With passenger traffic stabilizing and strategic assets like ElecLink contributing to diversification, Getlink presents a compelling buy opportunity at current valuations. The +3% YTD passenger growth suggests demand is weathering macroeconomic turbulence, while the concession's longevity mitigates regulatory risk. Even if May's truck data (to be released June 6) shows further declines, the stock's low multiple and defensive profile offer a margin of safety.

Key Catalysts to Watch:
1. May Traffic Report (June 6, 2025): Sustained passenger growth or a truck rebound could lift sentiment.
2. ElecLink Expansion: Plans to boost interconnector capacity may unlock new revenue streams.
3. Brexit Trade Dynamics: Improved UK-EU trade relations could stabilize freight volumes over time.

Conclusion: A Cross-Channel Anchor in Volatile Times

Getlink's dual role as a transportation and energy infrastructure leader makes it a rare blend of defensive and growth characteristics. While truck declines warrant caution, the company's passenger resilience, diversification, and low-carbon moat position it to thrive through cycles. For investors seeking steady returns in a volatile market, Getlink offers a buy at 12.5x EV/EBITDA—a valuation that underappreciates its 50-year asset tailwind.

Recommendation: Buy, with a 12–18 month horizon. Monitor freight trends, but prioritize Getlink's structural strengths.