E-bike precision gears maker hGears plans Frankfurt IPO

HGears, a supplier to key e-Bike OEM parts makers, including Bosch, will make an initial public offering on Frankfurt’s stock exchange during the second quarter of 2021.

Though many in the trade may not yet have come across the business, its componentry was actually present in approximately two million of the total 4.6 million e-bikes sold in Europe in 2020 giving it significant market share.

Reuters first reported the up-coming listing, outlining to investors the proposition, which is a company with €126.3 million in revenues and an operational profit margin that sat at 18% in 2020.

Though it has operations in tooling and other industrial work, E-mobility growth has gained in importance for the business, adding 59% in revenue year-on-year and coming to represent 68% of the group’s trade. For the e-bike world it specialises in the production of gears, shafts, and other “mission-critical components to be used in combustion-free electrical drive applications for e-bikes and electric and hybrid vehicles.”

As part of the listing it is expected shares worth around €65 million will be issued on the exchange, with a placement made to include existing shareholders.

Pierluca Sartorello, CEO of hGears, comments: “hGears is a leading supplier of high precision gears and components focusing on e-mobility applications. Our market position is particularly strong in the area of e-bikes for which we develop and manufacture high-precision quality parts used in the e-bike’s gearbox, the heart of the e-bike. The market for e-bikes is booming now, but we have the visibility on continued future demand as this boom marks a fundamental shift in consumer appetite for this great lifestyle accessory. Through decades of industry experience, we have acquired the know-how necessary to meet the demanding requirements for precision gears and components not only in e-bikes but also e-vehicles that need to be capable of withstanding high torque, are light weight and operate with reduced noise. In 2020 our gears were in approximately one of every two e-bikes sold in Europe. Considering the highly attractive growth prospects offered by the e-mobility sector and our excellent revenue visibility we are confident of meeting our clear goal of doubling group revenue in the medium term.”

Forward looking the firm expects to grow into the ever-evolving e-bike and electric and hybrid vehicles, for which the predicted growth trajectory is steep. Electric bike sales now represent 17% of all complete bicycles sales made in the EU, a new paper on European mobility trends concluded recently.

Daniel Basok, hGears’ CFO, adds: “The strategic focus on mission-critical parts for e-mobility applications has successfully set the basis for strong sales growth and we are proud of our achievement of consistently increasing gross profit margin and adjusted EBITDA margin in every one of the three years prior to our IPO. We aim to achieve our medium-term goals 100% organically and on the basis of a strong order book with a high share of future sales already agreed through to 2025 and beyond. The proceeds from the IPO will secure the production capacities to deliver accelerated growth.”

To learn more about the company see its full IPO statement here.