Overview of Revenue Decline#
German precision gear manufacturer hGears reported a 4.1% decline in revenue for 2025, primarily due to weak demand in the e-Bike sector. This information was shared by the company on Wednesday.
Financial Performance#
Despite the drop in revenue, hGears saw an increase in adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) to 1.6 million euros, which translates to a margin of 1.70%. This improvement is credited to various structural and cost-saving measures, including a reduction in personnel costs, which also helped enhance gross margins.
Factors Behind Revenue Decline#
The company pointed out that consistently high inventory levels and low demand in the e-Bike market led to decreased production volumes, contributing significantly to the revenue decline.
Growth in Other Segments#
On a positive note, hGears reported revenue growth in its e-Tools segment, driven by strong demand for components used in gardening tools. Additionally, the e-Mobility division experienced growth, focusing on premium, sports, and luxury vehicle segments.
Future Outlook#
Looking ahead to 2026, hGears anticipates revenue between 80 million euros and 90 million euros. However, the company projects adjusted EBITDA to be between minus 3 million euros and zero, with free cash flow expected to range from minus 5 million euros to minus 2 million euros.