hGears (HGEA) H2 2023 earnings summary

Executive summary

• FY 2023 results were resilient relative to guidance despite weak end-market demand, slower-than-expected industry destocking and adverse weather; cash preservation, efficiency and agility remained priorities.

• Positive FCF generation in H2 supported net debt reduction and improved liquidity headroom; FY 2023 FCF was much better than guidance.

Financial highlights

• Revenue was €112.5m, down 18.3% YoY from €135.3m, reflecting lower e-Mobility and e-Tools demand.

• Gross profit was €56.0m versus €69.8m; gross margin was 49.8%, down from 51.6% YoY.

• Adjusted EBITDA was €5.6m versus €15.3m; adjusted EBITDA margin was 5.0%, down from 11.3% YoY.

Outlook and guidance

• FY 2024 guidance: revenue €100m–€110m, adjusted EBITDA €13m and FCF of negative €0m–€3m, reflecting ongoing market uncertainty.

• Mid-term revenue outlook is €150m–€180m.

• 2024 operational priorities: resource management, cost control, asset utilization, working capital management and project management.

• Full benefits from 2023 measures are expected in 2024, with further savings expected from measures underway.