Ebusco half 2024 results: EBITDA loss grows to €60 million, revenue down 9%. Turnaround Plan is coming

Ebusco half 2024 financial results show EBITDA loss of €60.7 million (increased 40% compared to 43 in 2023) and revenue at €38 million (-8.8%). Just 98 buses were delivered, vs a order book of as many as 1,662 buses. “Scaling up with contract manufacturers has been hampered by start-up inefficiencies”, says the company, that is pivoting to a new strategy based on assembly of 3.0 model in China being made by a external partner, as stated during the presentation of 2023 results in March this year.

Late delivery penalties and direct damage claims from customers amounted to €10.4 million.

The net result for the period came in at €64.7 million negative (H1-2023: €35.8 million negative). Earnings per share changed from a loss of €0.60 per share in H1-2023 to a loss of €0.99 per share over the first half of 2024.

Ebusco shares have today a value of 1.5 €, and witnessed a -82% decrease in the last 12 months. The loss compared to the time when the company went public (October 2021) is -93%, as Ebusco’s shares value at that time was around 23 euros. Lately Ebusco has appointed a co-CEO.

Ebusco half 2024 results: Turnaround Plan is coming

As already communicated, guidance of 325 million revenue and positive EBITDA are no longer achievable and have been withdrawn. Now “the reshaped Executive Team (including Michiel Peters as co-CEO) is developing a Turnaround Plan to improve the overall performance and delivery reliability of the company”, Ebusco says. Its details have to be worked out. However, Ebusco says this will encompass completing industrialisation of existing product portfolio before launching new products, increasing of run rate to 40-50 buses per month by the end of 2025; reducing OPEX by €20-30 million in 2025.

In the meanwhile, Ebusco is dramatically reducing workforce: “For H1-2023 the employee benefit expenses amounted to €30.2 million, driven by the average number of 708 FTE (full time equivalent) being which is substantially lower than the average number of 845 FTE for H1-2024”.

Ebusco half 2024 results: inefficiencies in Deurne

The company adds: “Although Ebusco was unable to reach the production output it was aiming for, the strategic shift to re-introduce working with contract manufacturers has proven to be the right choice, resulting in accelerated assembly time. Inefficiencies at our in-house production facility in Deurne continue to hinder the finalisation of buses, slowing down factory output. This not only affects revenue but also delays the full execution of the cost reduction programme”.

The gross margin of the first half of 2024 amounts to €12.0 million negative. This amount can be split in €9.0 million negative for buses, €1.0 million positive for spare parts and maintenance and €4.0 million negative mainly related to additions to stock obsolescence- and warranty provisions.

Ebusco: the reasons for such results

Being more specific, this is the way Ebusco justifies the revenue’s situation: “The inefficiencies encountered in the logistics flows to the company’s external contract manufacturers have affected the manufacturing lead times for the Ebusco’s buses. These did not only affect the revenue recognised from the supply of the company’s buses but also delay the revenue from its maintenance and repair contracts (as these initiate after the buses have been delivered), thereby impeding the anticipated revenue from these services. Additionally, as Ebusco did not manage to catch-up on its bus delivery schedule the revenue also remains impacted by reservations for late delivery penalties which are accounted for as a deduction from revenue. Finally, Ebusco was not able to satisfy the contracts related to the delivery of the mobile energy containers and energy storage systems which also negatively impacted the revenue“.

Ebusco says it has engaged with an external consultant to assess quality of gross margin, especially in view of production with contract manufacturers. This assessment shows that unit economics per bus will reach the levels allowing the company to execute its Turnaround Plan. For financing of the plan discussions with lenders and investors have been initiated. 

Peter Bijvelds, Founder and Co-CEO of Ebusco, comments: “As the half-year figures reflect, it has been a disappointing start of the year (same word was used to define 2023, editor’s take). Although the decision to work with contract manufacturers for the Ebusco 3.0, as we have successfully done for years with the Ebusco 2.2, has proven to be the right choice, we have faced start-up inefficiencies that take longer than anticipated to resolve. To address these challenges, responsibilities within the Executive Team have been redistributed, and additional strength has been added. I am pleased that Michiel Peters has recently started as Co-CEO and chairman of the Executive Team. With the arrival of two experienced executives from the bus industry, Roald Dogge as COO and Erland Morelissen as CCO, we are ready to get the company back on track based on the turnaround we are developing.”

Michiel Peters, Co-CEO of Ebusco and chairman of the Executive Team, adds: “In the last few weeks I have had the opportunity to get to know Ebusco further and sense the commitment and knowledge of the people. With the Executive Team in a new composition, we have identified both the need and the opportunities to improve the performance of the company. Based on the unique concept of the Ebusco 3.0 and the proven concept of the Ebusco 2.2 we should be able to generate higher volumes and healthy financial returns”.