hGears forecasts tripling of eMobility revenue in updated guidance

Component part supplier to the eMobility trade hGears has reported a 20% growth in its eDrives business, contributing to a gross profit increase of 19.1% for the group.

The precision gears manufacturer, which held its IPO on Frankfurt’s exchange earlier this year, took to the Eurobike show in September to further broaden its reach with light electric vehicle suppliers and has today reported the addition of five new customers. Updating its forecasts for the growing and profitable eMobility business, hGears said it expects to triple revenues to at least €150 million in the mid-term, which will contribute to a doubling of group revenue to €250 million.

The business already had component parts present in around 2 million of the 4.6 million e-Bikes that were sold in Europe in 2020, counting eMobility giants like Bosch as clients.

eMobility trade, which year-to-year has grown from a 34% to 36% share of the business’s revenue, continues to grow at a faster rate than the eTools arm, though this did likewise register a 13.1% growth. The segments are worth €36.9 million and €32.5 million, respectively, with a ‘conventional’ arm of trade adding a further €31.8 million.

Adjusted EBITDA rose 34.3% year-on-year to €18.4 million, with adjusted EBITDA margin up 270-bps to 18.0%.

For the FY 2021, despite the difficulties that exist in the marketplace, hGears says that it expects high single digit growth.

Pierluca Sartorello, CEO of hGears, commented in the third quarter statement: “The first nine months of 2021 marked a strong performance for hGears, with double-digit growth in revenues and solid business performance across the Group. In the third quarter, the Company continued to work on several leads and develop new projects associated with e-mobility drive systems. Moreover, we remain confident in our mid-term ambitions, as evidenced in the third quarter with the acquisition of new e-mobility customers with expected serial production during 2022, further demonstrating our business development efforts and positioning in a market with long-term, untapped potential.

Amidst the supply chain pressures impacting many others, hGears has remained well-insulated with minimal impact in the first nine months of the year due to our diversified business mix and positioning in the premium and high category vehicles segment. Whilst the third quarter saw a notable shift in volatility elsewhere related to these supply chain issues, our supply chain and production capabilities remain unaffected. As the supply chain disruptions persisted, the impact of this became more widespread towards the quarter end, and we do not discount the possibility of some impact for premium OEMs.

“The Company continues to monitor the market situation actively and remains on track with its project pipeline. With high-quality products and a strong market position, the Company confirms its ability to further expand its customer base and leading market share in this high growth market segment, in line with its mid-term outlook. Moreover, demand for e-tools continues to remain robust, as we continuously gain new projects, whilst the Conventional business area remains stable.”

The European electric bike market is surging with multiple manufacturers plotting to substantially increase their output. The electric cargo bike market alone is expected to add a 65% growth this year as businesses seek to switch to more efficient delivery forms.