EQS-News

hGears AG Group: Full Year 2023 performance impacted by industry-wide destocking; focus remains on driving operational flexibility across the business - Seite 3

NOTE: Numbers may be subject to rounding

 

FINANCIAL REVIEW

Group revenues in the full year 2023 were down 16.9 % to EUR 112.5 million (previous year: EUR 135.3 million), a marginal 2.2 % below the guided range of EUR 115 – 123 million. The decrease in revenue is attributed to the e-Mobility and e-Tools business areas.

In the e-Mobility business area, revenue declined 18.3 % in the full year 2023 to EUR 42.0 million, reflecting a temporary slowdown in the market due to industry-wide destocking in the e-bike industry and amongst key customers. Higher sales in EHV slightly compensated for this trend.

As expected, the operating environment in the e-Tools business area remained challenging in 2023, with the industry continuing to unwind elevated inventory levels, while high interest rates impacted building and construction activities and demand for gardening tools in Europe suffered due to adverse weather conditions. Overall revenue decreased 36.0 % year-on-year to EUR 26.5 million in 2023 versus EUR 41.4 million in the prior year period.

In 2023, hGears continued to benefit in the Conventional business area from its strategic focus on the more stable premium and luxury segments of the automotive industry, while the resolution of supply chain constraints led to a robust uptick in revenue in the first half of 2023, albeit with the pace of expansion slowing down in the second half. Overall, for the full year 2023, revenue increased to EUR 43.2 million, representing an increase of 5.0 % over the prior year period.

At EUR 56.0 million, gross profit decreased 19.8 % compared to EUR 69.8 million in the prior-year period, predominantly reflecting lower revenue volumes and stop-and-start inefficiencies. This resulted in a gross margin of 49.8 % vs. 51.6 % in the previous year.

The adjusted EBITDA for the full year 2023 stood at EUR 5.6 million, compared to EUR 15.3 million in the prior-year period and within the guided range of EUR 5 – 9 million, reflecting the overall challenging environment and constraints in capitalizing on the Group’s inherent operating leverage. As a result, the adjusted EBITDA margin for the full year 2023 was 5.0 % (previous year: 11.3 %). Management implemented countermeasures throughout the year to preserve profitability, including organizational streamlining, efficiency improvements, and cost savings. These measures could only partially offset the impact of the sizeable revenue reductions, with some implemented from Q2 2023 onwards. The Company will benefit from the full effect of implemented measures in the coming years.