hGears (HGEA) Q3 2024 earnings summary

Executive summary

• Market conditions deteriorated in Q3 2024, with no stabilization and ongoing destocking in the e-Bike division, leading to 9M24 results below expectations.

• Group sales for the first nine months of 2024 were EUR 72.1–72.6 million, down 13.6% year-over-year, reflecting destocking and automotive sector weakness.

• Adjusted EBITDA fell sharply to EUR 0.4 million (0.6% margin), impacted by lower volumes and inefficiencies.

• Cost-saving and structural measures have been implemented, with ongoing savings programs and workforce reductions.

• Cash preservation and a solid balance sheet remain top priorities, with an equity ratio of 52.5% and cash of EUR 19.2 million.

Financial highlights

• Group sales declined across all segments in the first nine months of 2024, with e-Bike sales down 28% to EUR 14.3 million.

• e-Mobility sales fell 9.4% to EUR 33.8 million; e-Tools declined 8.8% to EUR 24 million, but showed sequential improvement.

• Adjusted gross profit was EUR 33.7 million (46.5% margin), down from EUR 37.3 million (50.8% margin) in 9M23.

• Adjusted EBITDA dropped from EUR 4.8 million to EUR 0.4 million year-over-year.

• Personnel and other operating expenses declined by EUR 2.5 million and EUR 2.8 million year-over-year, respectively.

Outlook and guidance

• 2024 guidance: group revenues of EUR 90–95 million, adjusted EBITDA of EUR -1 million to +1 million, and negative free cash flow of EUR 5–2 million.

• Medium-term outlook is under review due to ongoing uncertainties; long-term prospects remain intact.

• No short-term recovery expected in e-Bike and e-Mobility; cautious optimism for e-Tools stabilization.