hGears (HGEA) Q2 2025 earnings summary

Executive summary

• Solid H1 2025 results achieved despite challenging market conditions, supported by production volumes brought forward and cost-saving measures, including workforce reductions and short-time work.

• e-Tools segment grew 19.4% year-over-year, offsetting declines in e-Bike (-28.6%) and e-Mobility (-3.0%) revenues.

• Structural adjustments, cost discipline, and cash preservation improved profitability and resilience.

• Equity ratio remained solid at 47.8%, with net debt increasing due to new long-term leasing liabilities.

• Management remains cautious but expects medium- to long-term growth from structural demand in all business areas.

Financial highlights

• H1 2025 sales were EUR 49.5 million, down 1.8% year-over-year; Q2 sales matched prior year but declined 2.5% sequentially.

• Adjusted gross profit margin was 45.6%, slightly down from 46.7% in H1 2024.

• Adjusted EBITDA improved to EUR 1.1 million (margin 2.2%), more than double last year’s level, driven by cost savings.

• Free cash flow was EUR -2.3 million, compared to EUR -1.7 million last year.

• CapEx for H1 2025 was EUR 1.3 million, mainly maintenance, and below the 3% threshold for maintenance CapEx.

Outlook and guidance

• Full-year 2025 guidance reaffirmed: group revenues EUR 80–90 million, adjusted EBITDA EUR -4 to -1 million, free cash flow EUR -6 to -2 million.

• No recovery expected in end markets for the remainder of 2025; cautious optimism for gradual recovery in e-Bike and e-Mobility in 2026.

• Management remains cautious due to high e-bike inventories, automotive sector challenges, and global uncertainties.

• Continued focus on cash preservation and efficiency gains.