UPDATED: hGears to make first whole eBike motor for Revonte

Electric bike motor and tooling parts maker hGears has revealed in its first quarter trading statement that it has begun to build a complete, bespoke electric bike motor for a client (now named as Revonte), representing the first time the highly relied upon components maker has assisted with a complete unit.

Coming alongside news of a multi-year contract extension with a major e-Mobility customer for mission critical components, the development has this morning seen the company’s share price rebound slightly having been on a downward course since the last update spoke of delays to order shipments as a result of upstream bottlenecks in the bike business.

Those problems have not gone away entirely, according to today’s trading update, which pins the disruption solely on its e-Mobility arm. What the business has done to mitigate further disruption is introduce pass-through clauses in many of its customer contracts, in theory preventing further bottlenecks.

“Despite this background, hGears is pleased to announce the addition of a renowned e-bike customer to whom it will be the sole supplier for an entire transmission system. The deal provides further evidence of the Company’s market-leading position. The innovative transmission will create a new breed of e-bikes and has the potential to revolutionize e-bike construction and become a transmission system for other micromobility solutions in the future,” said hGears of its new partnership.

Signs of a recovery are emerging, so says the component maker. “March 2022 showed clear signs of improvement,” wrote the statement, adding “This anticipated business acceleration brings operational leverage, which is additionally expected to have an increasingly positive effect on margins in the second half of the year.”

Pierluca Sartorello, CEO of hGears, comments: “Whilst the business environment remains challenging, the order backlog for e-bikes in the consumer market remains sizeable. This is evident in our ongoing customer wins and recent contract extension with a significant e-Mobility customer. We believe that we are navigating these unprecedented challenges very well, and we remain confident in our ability to advance our portfolio, ramp up our new projects and reap the benefits from operating leverage as the year progresses.”

When it comes to the like-for-like Q1 numbers, revenues were off by 7.1%, gross profit down 12.9% and gross profit margins down 370 basis points. The aforementioned impact on e-Mobility revenue saw a 15.4% dip year-to-year, though expectations of a recovery have been outlined.

Looking ahead, the group targets are to achieve a high single digit growth in overall revenues, to continue to grow the e-Mobility and e-Tools share of the business and maintain conventional revenue at current levels. In the mid-term that target is to triple e-Mobility revenue to €150 million, which in Q1 registered at €10.6 million, down on last year’s €12.6 million.

Adjusted EBITDA in full-year 2022 is expected to be on a par with the prior year. The positive impact of the operating leverage is expected to be realized in the second half of 2022 and in 2023.

The Revonte announcement is found in full below:

The powerful motor comes with an integrated, fully automatic stepless transmission to provide an effortless riding experience for all kinds of e-bikes. Revonte ONE also has integrated smart communication for advanced features like automatic ride tracking, remote diagnostics and theft protection.

“After over three years of intensive development work, Revonte ONE e-bike motor is now getting ready for mass production. The overwhelmingly positive response from dozens of customers testing the system gave us a clear signal that we would need an experienced manufacturing partner that can scale with the customer demand”, says Otto Chrons, CEO of Revonte. “We discussed with several experienced manufacturing companies in Europe and hGears came on top thanks to their strong focus on e-bikes and ability to manufacture our rather demanding system at scale. It was a perfect match.”, he continues.

Pierluca Sartorello, CEO of hGears, adds: “The deal with Revonte makes us really proud and represents an important milestone on the journey we began seven years ago when we decided to move the company’s focus from manufacturing components for traditional motorbikes and combustion engines, to being a provider of solutions for e-mobility and other electrical applications. The deal provides another evidence that with our extensive experience in automotive and decades of acquired knowledge with electrical e-drive applications, we enable our partners to optimize the product development process and factually support them with our broad set of manufacturing know-how.  We feel that, by dedicating our intelligence, competence and passion to these new exciting markets, we can contribute to a sustainable, better world of tomorrow”.

The two companies share a common vision of e-bikes becoming a mainstream mobility solution for people in Europe and elsewhere in the world. This creates demand for a new breed of e-bikes that are easy to use and offer a fantastic ride experience, to further motivate individuals to switch from cars to e-bikes.

“For e-bikes to truly become a mainstream transportation vehicle, they have to be desirable to ride. We humans do things that make us feel good. This is the core of Revonte ONE, to make riding fun again”, concludes Otto.