hGears (HGEA) H1 2024 earnings summary

Executive summary

• Revenue declined 11.7% year-over-year to €50.5 million in H1 2024 amid weak demand and high inventory levels, especially in e-bikes and e-tools.

• Adjusted EBITDA dropped to €0.5 million (1.1% margin), down from €3.0 million (5.2%) in H1 2023, reflecting lack of operating leverage and start-stop inefficiencies.

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

• Cost-saving measures, including workforce reductions and structural adjustments, reduced personnel and operating expenses by €1.8 million and €1.9 million, respectively.

• Balance sheet remains solid with €21.7 million in cash and a 53.1% equity ratio.

Financial highlights

• Revenue: €50.5 million (H1 2024), down from €57.2 million (H1 2023).

• Gross profit: €22.8 million, gross margin 45.3% (down from 51.7%).

• Adjusted EBITDA: €0.5 million (margin 1.1%), vs. €3.0 million (5.2%) prior year.

• EBIT: €-6.7 million; Net result: €-8.1 million; EPS: €-0.78.

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

Outlook and guidance

• FY 2024 guidance: revenue €100–110 million, adjusted EBITDA €1–3 million, free cash flow €0 to €-3 million.

• Medium-term (3–5 years): target revenue €150–180 million, with focus on e-Bike and [e]-Mobility growth.

• Guidance for 2024 and mid-term targets confirmed; management remains cautious due to high inventories, demand shifts, and geopolitical risks.