hGears Group improves in 2025 the adjusted EBITDA through efficiency and cost reduction measures

hGears Group improves in 2025 the adjusted EBITDA through efficiency and cost reduction measures

HIGHLIGHTS FOR THE FULL YEAR 2025

• Group revenue of EUR 91.8 million, down 4.1 % from the previous year
• Revenue growth in e-Tools and [e]-Mobility largely offset the decline in e-Bike revenue
• Adjusted gross profit of EUR 42.0 million, improved margin of 45.7 % despite a weaker product mix and lower volumes
• Adjusted EBITDA reached EUR 1.6 million, adjusted EBITDA margin 1.7 %
• Free cash flow at EUR -3.3 million, impacted by accounting-related reclassification of EUR 2.1 million
• Stable balance sheet; equity ratio of 31.9 %, cash and cash equivalents of EUR 8.7 million

Schramberg, 25 March 2026 – The hGears Group generated consolidated revenue of EUR 91.8 million and adjusted EBITDA of EUR 1.6 million in fiscal year 2025. The market environment continued to be characterized by geopolitical uncertainties, weak economic momentum, and increased volatility in the U.S. Against this backdrop, the business areas showed mixed performance: While [e]-Mobility and e-Tools gained ground over the course of the year, the e-Bike area remained below the previous year’s level due to persistently high inventory levels and a corresponding reduction in production activity.

hGears generated an adjusted gross profit of EUR 42.0 million in fiscal year 2025 and increased the adjusted gross profit margin by 20 basis points to 45.7 %, despite a less favourable product mix and lower volumes. The structural and efficiency measures implemented had an increasingly positive impact over the course of the year and led to an increase in adjusted EBITDA of EUR 1.1 million to EUR 1.6 million. The adjusted EBITDA margin improved accordingly by 120 basis points to 1.7 %.

Free cash flow amounted to EUR -3.3 million in 2025 (prior year: EUR -3.2 million) and was impacted by an accounting-related reclassification of EUR 2.1 million.

Net working capital, at 8.5 % of revenue, was at the lower end of the targeted range of 8 – 10 %. The equity ratio was 31.9 %, and cash and cash equivalents amounted to EUR 8.7 million.

Sven Arend, CEO of hGears:

“We have once again successfully navigated the year 2025 in a market environment that remains challenging. Our consistently implemented cost and structural measures are delivering results and are clearly contributing to the improvement in earnings. We have thus created a solid basis and are well-prepared for another challenging year. We remain confident that the structural growth drivers in our end markets will boost demand across all three business areas in the medium term.”

OVERVIEW FY 2025 FIGURES

Please note: Figures may be rounded.

FINANCIAL REPORT

Consolidated revenue for the full year 2025 was EUR 91.8 million, down 4.1 % from the previous year (EUR 95.7 million) and thus slightly above the forecast range of EUR 87 – 90 million. The decline in revenue is primarily attributable to lower volumes in the e-Bike division.

The e-Tools business area increased revenue by 7.0 % year-over-year to EUR 34.8 million (previous year: EUR 32.5 million), driven in particular by continued solid demand for components for gardening tools. The [e]-Mobility business area increased revenue by 5.9 % to EUR 46.8 million (previous year: EUR 44.2 million). This performance was supported by our focus on the premium, sports, and luxury segment, while structural challenges in the Western automotive industry and delayed project launches continued to have an impact. The e-Bike business area recorded a 46.7 % decline in revenue to EUR 9.8 million (previous year: EUR 18.5 million). This was due to persistently high inventory levels along the value chain as well as subdued end-demand, which led to an overall reduction in production activity in the bicycle industry.

Adjusted gross profit for 2025 was EUR 42.0 million, down 3.6 % from the previous year (EUR 43.6 million). At the same time, the adjusted gross margin improved by 20 basis points to 45.7 % (previous year: 45.5 %).

The impact of the lower revenue level and the less favorable product mix was largely offset by the management through efficiency and cost reduction measures.

Adjusted EBITDA at the Group level amounted to EUR 1.6 million in fiscal year 2025 (previous year: EUR 0.5 million), and the adjusted EBITDA margin reached 1.7 % after 0.5 % in the previous year. The improvement is primarily attributable to the positive impact of the implemented structural and cost-saving measures, in particular the reduction in personnel costs by EUR 2.7 million.

Free cash flow amounted to EUR -3.3 million in fiscal year 2025 (previous year: EUR -3.2 million), falling short of the most recently adjusted forecast of EUR minus 2 to 0 million. This was primarily attributable to an accounting-related reclassification of EUR 2.1 million between investing and financing activities.

The equity ratio stood at 31.9 % at the end of 2025 (previous year: 53.9 %), and cash and cash equivalents amounted to EUR 8.7 million (previous year: EUR 17.1 million). The ratio of net working capital to revenue was 8.5 % (previous year: 7.5 %), placing it at the lower end of the targeted range of 8 – 10 %.

OUTLOOK

Based on current market trends and taking into account ongoing uncertainties, the Management Board expects the following for the 2026 fiscal year:

• Consolidated revenue of EUR 80 – 90 million
• Adjusted EBITDA of EUR minus 3 to 0 million
• Free cash flow of EUR minus 5 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