hGears AG Group: Solid first half of 2025 supported by structural and cost-saving measures as well as production brought forward.

FIRST-HALF 2025 HIGHLIGHTS

• Group revenue marginally down 1.8 % year-on-year at EUR 49.5 million
• The positive development of e-Tools compensated for the slight decline in [e]‑Mobility and the weakness of e-Bike in the first half of the year
• Advance effects in production and savings led to adjusted gross profit of EUR 22.6 million, margin 45.6 %
• Adjusted EBITDA improved to EUR 1.1 million thanks to structural and cost-cutting measures, with an adjusted EBITDA margin of 2.2
• Stable balance sheet with an equity ratio of 47.8 % and net debt of EUR 14.7 million
• 2025 guidance reconfirmed following solid half-year results, which were positively impacted by production volumes brought forward from the second half
   

Schramberg, 13 August 2025 – hGears AG generated consolidated revenue of EUR 49.5 million and adjusted EBITDA of EUR 1.1 million in the first half of 2025. The solid development of e-Tools helped cushion the softer performance in [e]-Mobility and the pronounced weakness in e-Bike, although it could not fully compensate for it.

The economic environment was volatile in the first half of 2025, not least due to emerging economic tensions, which were mainly characterised by the tariffs threatened and partially implemented by the new US administration. The e-Tools business area continued its recovery with a 19.4 % increase in sales compared to the same period last year, supported in particular by solid demand from the garden tools segment, and achieved sales of EUR 18.0 million. While our focus on the premium and sports segment had a stabilising effect, the [e]-Mobility business area suffered a slight decline in sales of 3.0 % to EUR 23.8 million due to the current structural problems in the automotive industry in the Western Hemisphere and weak consumer sentiment. As expected, the e-Bike business area continued to be affected by the reduction of excess inventories and suffered a decline of 28.6 % to EUR 7.5 million. However, initial indicators may suggest that this industry segment might have bottomed out.

Adjusted gross profit amounted to EUR 22.6 million in the first half of 2025, corresponding to an adjusted gross margin of 45.6 %. The company generated adjusted EBITDA of EUR 1.1 million and an adjusted EBITDA margin of 2.2 %. This represents an absolute decline in gross profit of around EUR 1.0 million year-on-year, while adjusted EBITDA increased by EUR 0.5 million. This reflects our operational optimisations and cost-cutting measures on the one hand, and the positive impact of efficiency improvements on the other. These were achieved through targeted organisational measures and by bringing forward production volumes from the second half of the year, which enabled us to utilise our facilities to a greater extent while reducing start-stop costs. Free cash flow amounted to EUR -2.3 million as of June 2025, and cash and cash equivalents amounted to EUR 9.4 million. Including the credit lines not utilised in the second quarter, cash and cash equivalents would have amounted to EUR 14.4 million (December 2024: EUR 17.1 million).

The balance sheet remains stable; in June 2025, net debt amounted to EUR 14.7 million, the leverage ratio was 14.1x (December 2024: net debt of EUR 9.4 million, leverage ratio 18.7x), and the equity ratio 47.8 % (December 2024: 49.4 %).

Sven Arend, CEO of hGears, comments:

"The structural adjustments and cost-cutting measures are having an effect. In addition, we have brought forward production volumes from the second half of the year in order to better utilise our capacity and thereby reduce start-stop costs. This had a positive impact on revenue and profitability. The e-Bike business area is likely to remain affected by ongoing inventory reduction in the second half of the year, although initial signs may indicate that the trough has been reached in 2025. Overall, we are well positioned to successfully navigate future uncertainties and are maintaining our outlook for 2025."

OVERVIEW OF 1H 2025 FIGURES

Please note: The figures may be rounded.

OUTLOOK

The outlook for the 2025 financial year remains unchanged. Against the backdrop of ongoing cyclical, geopolitical and economic challenges on international markets, the Management of hGears continues to expect

• Group revenues of EUR 80 - 90 million
• Adjusted EBITDA of EUR minus 4 to minus 1 million
• Free cash flow of EUR minus 6 to minus 2 million

Contact

hGears AG

Christian Weiz

Brambach 38

78713 Schramberg

T: +49 (7422) 566 222

E: christian.weiz@hgears.com

About hGears

hGears is a global manufacturer of mission-critical high-precision gears and components with a strategic focus on products for e-mobility. The products include gears, shafts and other function-critical components that are used in electric drive systems for e-bikes and in electric and hybrid vehicles (EHV). In the e-bike sector, hGears AG is a leading European company in the supply of high-precision gear parts and components. The company is thus well positioned to benefit from the growing end markets for e-bikes and EHVs. hGears has three different business areas for which it develops and manufactures high-precision components: e-Bike, [e]-Mobility (primarily for premium and luxury cars, EHVs and powersports vehicles) and e-Tools.

hGears combines over 65 years of experience in highly developed machining steel processing and state-of-the-art sintered metal production. This makes it one of the few companies in the world that can offer its customers both processes. hGears works together with its customers in a “co-development” role to design components and find technologically optimal solutions to satisfy the customer’s specifications. hGears' blue-chip customer base includes several major Tier 1 suppliers and original equipment manufacturers (OEMs). The company benefits from long-standing, stable and sustainable relationships with its customers, with many key customers being supplied for more than 20 years.

hGears is headquartered in Schramberg (Germany) and operates worldwide with production facilities in Schramberg (Germany), Padua (Italy) and Suzhou (China). Visit hGears on the Internet at: www.hgears.com