GreenMobility A/S (GREENM) Earnings Call Transcript

Welcome to today's presentation where we have the pleasure to present GreenMobility. The occasion for today's event is, of course, your H1 '26 results. You were also out warning a little bit on the top line guidance, but kept your earnings guidance earlier in the week and Thursday, we had the results. So that will be the topic for today. So I was through today's presentation and answer questions. In the end, we are joined by CEO, Kasper Gjedsted. As always, there's a box down below, ask questions, do it during the event after the event, do it in Danish or in English. I will try and translate to the best of my ability in Danish. But I think that was for me. I will leave the stage to you, Kasper.

Thank you very much, Michael. So for the ones who don't know GreenMobility, we are a car sharing company. We have around 1,500 vehicles in our fleet. We are in Aarhus and in Copenhagen. The way our product works is that you download our app, then you use the app, you swipe it when you're next to a car and the car opens, unlocks, then you go to wherever your destination is within our operating zone. And then after you are done driving, you just get out of the car and swipe again. And then the car locks and we send you an invoice. It's as simple as that. And we have that for more than 135,000 trips a month now. So a lot of people have found out how easy it is to use our services here. Our fleet is an all-EV fleet. We have our premium cars, which are the Polestars. We have some Renault Megane, and we have just very recently added also some Kia Niros on that, which with a very long range. So they also work as ordinary cars if you have a need to go to Jutland or Sweden as many of our customers have. Then we have our core fleet, which consists of primarily Renault Zoe's, the workhorse in our fleet, a very good small-sized car group car with a relatively long range for a car of that size. We have just added Nissan Micra to that one too. That's the car of the year 2026 in Denmark. Then we have a fleet of cargo vans, both smaller and bigger vans, all EVs as well. And then we have also mini buses with the space for 7 people in them. So how did the first half of 2026 go? In the first half of 2026, we saw a 4% increase in our revenue, and that was disappointing if you look at it from a guidance perspective. The first half didn't live up to our expectations. And the reasons for that, I will talk more elaborately about that. But we have seen a couple of temporary headwinds on that. So that was on the negative side. On the positive side, we have seen a 19% increase in EBITDA. We are still increasing our margins due to this lean operations. Our operational excellence program is still running. We still find costs that we can cut down on and lower our cost of acquisition and marketing and so on and so forth. If you look at our depreciation, those are flat due to the unchanged fleet size versus the first half of 2025. Our financial expenses are down. They're driven by lower debt. I'll also talk more about that. And then we see our ability to make money, to make profit has doubled versus the same half 2026. And I think this is -- speaks in volumes in terms of how efficient we are and in spite of not reaching our guidance target. I think it's very good that we are in a position where we are just being better and better at earning money. So 112% increase in profit for the period. And the cash flow from the operations is the same as for the first half of 2025. Let's continue on the balance and cash flow here. I think what is very important for me to stress here is that the free cash flow, excluding our loan repayments and the share buyback that we have also initiated improved to DKK 7 million, up from DKK 4.5 million in first half of 2025. So in spite of these loan repayments and in spite of the share buyback, our free cash flow has actually improved quite heavily versus first half of 2025. Our cash position decreases by 2.8 million to 13.7 million. This is mainly due to the share buyback program that we initiated a little early on, where we have spent DKK 3.5 million on that. And then we can see that our lease liabilities have a slight increase, but this is due to the fleet additions. I'm going to talk more about the fleet additions later on. Our loan decreases due to the loan repayments. We are paying off quite a bit of -- a big chunk of the loans that we have. We have some high interest loans from EIFO/NEFCO that was made before my time here. And I want to stress in connection with loans that we have absolutely no operational debt. So it's only loans that are connecting to cars and these loans will, by the way, be on the way in 2027. If we look at the net book value of the cars, those are flat. We have added more cars and especially at the -- towards the end of the half year. And the old cars are depreciated according to the plan. So I'm also super happy that our equity ratio is now up 27%, up from 22%, and that gives us a lot of comfort within our target zone here, which is 20%. For those of you who have seen me on these calls earlier, we have talked about a target zone of 20% for us to be able to buy back shares, for example. That's also for our ability to get financing to our cars at good rates. It's also a very important factor in that. So equity ratio up from 22% to 27%. Let me take you back to where we started on the revenue growth, which has been disappointed. So there are, I would say, 2 main factors for that. The first factor is a very heavy factor, and that is because we have seen some delays in our fleet in fleeting of cars. We were supposed to have cars in fleet at a much earlier stage. That was what we planned for. But we also saw some disruptions in the global supply chains from, in particular, the home strait. And I've got to be very honest with you, it wasn't a part of our risk assessment plans when we ordered these cars. A lot of them come from South Korea. Those are key that they would be so heavily delayed as we saw here. So that is a major contributor to this guidance adjustments. Then I've also written down the platform migration. So from a technical point of view, the platform migration has gone very well. When you do a platform migration to a completely new platform, there's a lot of risk associated with that. I think that was mitigated very well. We didn't see any downtime. We saw that all of our customers were migrated and so on and so forth. But -- so from a technical point of view, that has gone well. The new platform is also a prerequisite, the foundation for new features that I've also talked about earlier. And those new features, they have -- I was hoping for a big bang where all of the new features could be from the get-go of the migration. But unfortunately, they have been postponed as well. And I think we have a very good communication with the developers during the tours. But unfortunately, they haven't been able to deliver in time. So we will see these features come second half of the year where we can get the full effects from some of these features. Another but less significant thing, which has also impacted our revenue has been this local road closures. Some of you who are familiar with Copenhagen probably know that Ama has been sort of closed off for public road driving. And unfortunately, Ama is our biggest revenue driver in terms of areas of Copenhagen. And therefore, it has had a negative impact. And then if we look at the rest of the year, we're also seeing a little change or some change in the competitive landscape here. There will be a new taxi operator coming in. We've seen that before when Bolt entered -- when Uber entered the Copenhagen market. We saw that they were running very aggressive pricing campaigns. The new competitor here will probably do that, too. It just adds -- and I mean, we survived that before, right? Fundamentally, we have -- from a cost perspective, the fundamentals are just on our side because, obviously, when you have a taxi, you have to pay a driver. And if you have a cost every month of DKK 20,000, DKK 25,000 on that and our drivers are essentially paying to drive our cars, then you just have a fundamentally different business model. So we will always be able to compete with them, but it could create some disturbances in the second half year. There's no changes to our financial targets that we have also communicated before, the financial targets towards 2028. We're still focusing on Denmark. We still expect an average revenue growth of 8% to 12% per year towards 2028. And we are also expecting a 12% to 16% growth in the EBITDA towards 2028. We are strengthening the balance sheet. I think the first half is showing that very well with an ambition to redistribute excessive cash. We have also lived up to that. We are in the midst of a share buyback program. It's continuing here. So I'm very happy that we initiated that in the first half. And then we are still razor sharp focus on bringing autonomous driving to Denmark. We will be among the first one with autonomous -- full autonomous driving to Denmark. And I'm not talking about the Tesla kind of autonomous driving. I'm talking about the full autonomous driving without chauffeurs. Good. And then I also have talked about our revenue pockets and some of them -- some of you might have seen them before. I'm super happy that I'm able today to tell you that we are getting very close to opening up for the 17-year-olds to be able to drive our cars. So this summer, 17-year olds will be able to drive the cars with GreenMobility. I think it's a very interesting growth potential that lies in them. Just a year ago, the law on 17-year olds were changed. So they're now allowed to drive cars between 5 in the morning and 8 in the evening. And obviously, we should let them do that, not in our premium cars, though, only in our Renault Zoe's. So I'm looking forward to welcome this customer group as well. And I think that was it for the half year presentation.

Perfect. Let's jump into the questions. And as I was a guy living on Ama, I sometimes -- when I hear CEO, I can't really relate to it, but I can tell you that driving out from my runway, I have been in the lines ever since -- this is crazy. So first half, I really could relate not to the, not to everything, but Ama that I could relate to. Perfect. Let's jump into the questions. And actually, the first one is, is there any plans of launching a new design interface in your app? And there's a little bit of questions and the new features are the late, which features can we expect? So a little bit about what do we have now? Is there a new layout planned? And what features are we missing? And what features do you hope to bring into this in the second half of the year?

Yes, that's a really good question and super relevant because our layout or the user interface is actually outdated. That's also why I'm super happy that we are expecting a new UI interface, which is much more modern, one. Two, it gives us a lot of much better opportunities for upselling. So -- and it just gives a better, more update experience for the customers. And we're expecting that in the second half here, probably in Q3. Famous last words, but I think it's going to be Q3 that we're going to see that.

Then we will have a new user interface. Some of the features, I guess there's also some back end you might be missing, maybe not what we are seeing to be able to target your customers and dynamic pricing and so on. Is that also still missing as...

So from the back-end side, there has actually -- that's where you -- what you don't see as a customer. But that's actually where we've seen the biggest gains so far. That is the controlling of the fleet from our staff on the ground in the street, they have a much, much faster user interface. We have a better overview of the fleet and so on. So I would say the biggest developments that we have seen is actually what you can see, but that is the back end, the service app, our service center app and so on, which are not visible to the customers yet. But you will really soon, sooner rather than later, I would say, you'll be able to see a major upgrade to a much more modern look, feel and opportunities for us as a company to upsell at a much higher rate than we've been able to before.

Then there's a question. How many of the 185 new cars, the big plans you did are on the street today? And meaning how many of your implemented of these new cars? I don't know whether you want to put a number on that and where the cars are now. Did I understand you correctly, they are in Denmark, it's you who need to execute. It's no longer the supply chain, that is a risk.

No. So I'm happy to say that all cars are now having number plates on running in the GreenMobility fleet as of -- I mean, the status of today is that all are in. Of course, it takes a little longer now. The reason why we've also adjusted the guidance, one of the major reasons of this is that we're missing out on the revenue that we should have had when we were expecting the cars. They're coming in now. They're coming in as the tail of cars, as we say. So they will obviously have a lower revenue per car for the first months that they're in the fleet. It's always like that. It takes a little bit of time to uptake these cars revenue-wise. So there will be a delay that has an effect for the whole year. But the good thing is that it is -- they are all in the fleet now.

Perfect. Then there's a question. Your trade receivables are up from DKK 12.1 million to DKK 15 million. Has there been more damages to the car, which I guess is something you could have outstanding? And has provision -- have you had to make any meaningful provisions on the debtors, meaning I think I've heard you before say you really don't have a lot of losses on your debtors because you collect that credit card. So the debtors are up or your receivables. Is it more damages on car? Or do you have seeing more meaningful losses on your debtors?

No. So I don't think we have more -- we don't see any more damages in our cars on a general level. We have a high focus on our working capital, and we're continuously monitoring this development. And I think that's as much I can say on that topic.

Then there's a question about -- it was nice to see a lot of GreenMobility cars in Roskilde festival. I needed one in Copenhagen. So I was not so glad about it, but the city was really -- then there's a question here. I hope that municipality will give you some fixed places. So you can kind of do the mess up in Roskilde. I think it's more a comment. But looking at Roskilde, you trying to get the same deal as you have in Copenhagen with some fixed to kind of make this as maybe more and just a hub but a little bit of a permanent. Now you have the Roskilde festival. I know that's special. But are you looking at Roskilde and you are trying to get maybe more support from the municipality to your fixed license or your parking places only for you and so on? So a very specific question for Roskilde.

Yes. I'm always glad to hear when you can't get a car, Michael, because that means there's money in the bank for us, right? The cars are driving, making revenue. I think what I want to say on the municipalities is that for Copenhagen municipality, we have an excellent cooperation with them. They're very, very into the car sharing though. It is one of the great solutions to the big problems that the big cities have and Copenhagen municipality has -- they're very mature in terms of understanding how we can help the city with the congestion and pollution and so that not everybody goes out and buy a car. And so we have a very good relation with them. A few of the parking lots are going to be -- we have -- we were given 1,000 parking lots. Some of them will be rolled back or they will actually not be rolled back. They will be posted as they say, around 1/3 of them which is okay. We have a very good cooperation with the municipality on pointing towards which makes sense and which doesn't make sense. And then we can take that back those parking lots should the demand be as expected.

So do you have any plans about the near municipalities also to do something similar? I know the question is for, but maybe you have these city hubs, I guess, where you're also trying to create something. Are you working with the municipalities there? Or is it not necessary? Is that really primarily necessary in Copenhagen to make a business case for having these hubs where you can drive to?