hGears (HGEA) H1 2024 earnings summary

Executive summary

• First half 2024 performance aligned with expectations and guidance amid challenging market conditions, weak demand, and high inventory levels, especially in e-bikes and e-tools.

• E-mobility sales remained stable year-over-year, while e-tools and e-bike segments declined but showed signs of stabilization in Q2.

• Organizational adaptations, cost reductions, and resource management were implemented to address lower volumes and market volatility.

• Cash preservation, efficiency improvements, and maintaining a robust balance sheet remain top priorities.

• Net loss widened to €8.1 million from €5.6 million year-over-year, with EBIT at €-6.7 million.

Financial highlights

• Revenue: €50.5 million (H1 2024), down from €57.2 million (H1 2023); adjusted gross profit: €22.8 million, margin 45.3%.

• Adjusted EBITDA: €0.5 million (1.1% margin), down from €3.0 million (5.2%) in H1 2023.

• Personnel expenses reduced by €1.8 million, with 137 fewer full-time equivalents year-over-year.

• Net operating expenses cut by €1.9 million, including savings in maintenance, administration, and marketing.

• Free cash flow improved to €-1.9 million from €-10.9 million year-over-year.

Outlook and guidance

• 2024 guidance confirmed: group revenues of €100–110 million, adjusted EBITDA of €1–3 million, and negative free cash flow between €0 and €-3 million.

• Medium-term revenue target set at €150–180 million, driven by expected recovery in e-bike and e-mobility.

• No major recovery expected in the short term, but significant midterm growth potential anticipated.