Welcome to today's event where we have the pleasure to present Donkey Republic. To help us through today's presentation, we are joined by CEO Thor Möger Pedersen and CFO Christian Dufft. Today's event covers the H1 2025 Report you released yesterday. As always, there's a box down below where you're very welcome to ask questions. We have got some in. You can see whether it has been asked. Do feel free to ask in Danish, and I'll try and translate to the best of my ability. For now, I think I will hand the call over to you, Thor, and I can see on the next slide that you will make a short introduction of yourself.
Yes, and thank you. Welcome also from our side, and thank you all for attending this investor presentation. My name is Thor Möger Pedersen, and I serve as CEO of Donkey Republic . Right here next to me is our talented CFO, Christian Dufft. We have both been looking very much forward to this event and the opportunity to share insights and highlights of our company's performance. We have prepared a brief presentation, and afterwards, we will gladly receive questions and provide our answers. However, just as you said, Michael, before we get to the numbers, I will briefly introduce myself. As you might know, I joined Donkey Republic as CEO roughly three months ago.
I bring leadership experience from the energy industry, engineering consultancy, and politics. In Donkey Republic , I recognize the opportunity to lead an asset-heavy business model to which success is highly dependent on public tender success and strong relationships with municipality stakeholders, disciplines I know very well. However, now I am to apply them into a new industrial context. I was excited and humbled to accept the responsibility as CEO. Excited because Donkey Republic represents a solution to the mobility challenges that modern cities are facing. Humbled because the long-lasting impact of our business requires improved profitability and shareholder returns. Together with the team, I am committed to execute disciplined growth and continuous business optimization to harvest economies of scale. As you will see, our company is performing well, and the demand for bike-sharing systems is growing. I have full confidence in our ability to reach our ambitions.
We have a great product. We are in a growing market, and Donkey Republic is well-positioned to consolidate. Now, let's get to the numbers. Overall, in the first six months of 2025, our financial performance improved significantly compared to the same period last year. Revenue, as you can see, is up by 25%, and EBITDA up by 79%. Just as important, the underlying metrics should be highlighted. In the first half year, both the number of riders and the number of trips have increased by 23%. Our fleet size, however, has grown 8%. That reflects an increased adoption of our bike-sharing systems within the cities we operate, meaning that the total revenue growth comes from the combination of expanding our fleet and increasing utilization of the bikes. This is driving revenue per bike and supports profitable growth.
Our general expectation is that we can continue this dual growth engine of both expanding the fleet and increasing usage. As part of our half-year report, we are delighted to increase transparency. Among other items, we are introducing last 12 months' reporting and regional breakdown of financial performance. LTM figures provide a more accurate assessment of our business performance as it neutralizes seasonal effects. We are increasingly consolidating our operations in three strategic regions, that is Benelux, DACH, and Nordics. This geographical diversification decreases single-city dependency and thereby reduces overall risk. At the same time, the strategic focus to consolidate and expand within our current markets opens for operational synergies and thereby future upsides. Our operations in Belgium and the Netherlands have grown to become our largest region on revenue.
The Belgian market is mainly characterized by city contracts with subsidies, whereas the Netherlands is mainly characterized by licenses without subsidies. During the period, we have experienced some headwind regarding license renewals in the Netherlands. However, we have managed to partly offset the revenue effects by redeploying bikes in other cities in the region. There is still significant growth potential in Belgium and the Netherlands, and Donkey Republic is well-positioned to capture this opportunity. The LTM growth in Benelux is at an acceptable level. However, the contribution margin has dipped to 59% last 12 months compared to 51% last year. This is due to costs associated with the redeployment of bikes I just mentioned and also investment in fleet maintenance. Looking at our DACH region, it is currently consisting of city operations in Germany and Switzerland.
The region has grown significantly in the last 12 months, and because of operational consolidation, the contribution margin has reached 54% LTM compared to 51% last year. The market outlook for the DACH region is very positive. Operations in the region are mainly based on city contracts with subsidies, and several tender opportunities are already in our pipeline. Looking at the Nordics, we are operating cities in Denmark and Finland. Danish cities are generally license-based, and Finland is a market solely based on city contracts with subsidies. Despite increased competition in Copenhagen and Aarhus, we have managed to defend our market position in Denmark. By implementing strategic price cuts, the number of trips in Denmark has grown, and revenue for the region has remained stable at DKK 49 million the last 12 months.
However, we have seen the contribution margin decline to 57% the last 12 months compared to 61% last year. This is a result of our price setting and expansion costs in Aarhus. Nevertheless, we regard 57% as a strong performance and a show of our resilient market position. In the Nordics, demand for bike-sharing systems is expected to grow, and Donkey Republic will prioritize the opportunities with the best fit for our system. Providing this LTM perspective shows that our business is growing steadily, measured by revenue and trips. We aim to continue this journey alongside the continuous improvement in our operational efficiency and cost structure. That was it from me. I will get back in a minute. Now, Christian, over to you.
Thank you. Good morning and also a warm welcome from my side. Thanks, Thor, for the kind introduction earlier. After you've been talking now about business highlights and the larger picture with looking at the last 12 months, I will narrow in now on our reporting period, the first six months of 2025. Starting with the revenue, we already talked about the double growth engine that we have with increasing fleet and increased revenue per bike, which resulted in our revenue increase to DKK 75 million. That's DKK 15 million more than in the same period in the previous year. That increase in revenue also has been our main driver when we look into our profitability. You can see here an EBIT bridge that shows the development from our EBIT in 2024 first half to now 2025 first half. The DKK 15 million revenue increase translates into around DKK 7.2 million improvement in profitability if we apply the same margin as in the previous period.
We see, however, a deterioration in our margin and have a negative impact of around DKK 1.2 million there in the first half. This is mainly due to our efforts in the Netherlands that we explained in the report, and that comes with higher maintenance needs and also reshuffling of the fleet. I just want to be clear here, this is below our expectations. We were anticipating a better performance in that area and are working hard now to regain that. We move on. Now, the next part is fixed cost. This increased by DKK 3.3 million. This is mainly due to our continuous effort to professionalize our organization. We are in a better position to utilize and follow up on market opportunities, especially larger tenders, something we will come back to later on. The last part then is the depreciation. It increased by DKK 3 million.
It is connected to the growth of the fleet. This is also one of the reasons why we have such a strong focus on the utilization of our bikes because that is the revenue growth that comes without additional depreciation. Enough about profitability. Moving on to cash, another major focus area for us. What you can see here is the development of our cash over the first six months of 2025. You can see that EBITDA with DKK 5 million remains a strong indicator for our cash flow from operating activities. It is because the changes in our net working capital are relatively small. We have a stable development there, something we already announced one year ago in our last half-year report that we expect it to be stable. That has been the case, and we also see that moving forward.
An area where we have invested a lot is both in our products and the extension of our investments in our fleet. Starting with the product, we have the Gen 4, the newest generation of our bike, starting now in the second half. There have been development costs associated with that in the first half of the year. We also continuously improve our app, the software side of our product, which also attributes to our capitalization of DKK 7.6 million that you can see here. The second part of the investing activities is investment in our fleets. The smaller part of that amount is refurbishment and retrofit activities. That is something that we started already by the end of last year. We use our existing team of mechanics to significantly improve the quality of our bikes.
We basically take a bike apart, either repair or replace all parts besides the frame, and the result is a bike that has a significantly longer profitable lifetime. The cost attributed to that is therefore considered CapEx that goes directly into our fixed assets. The larger part of the investment in the fleet, however, is our prepayments to the suppliers that will provide us with the new batch of our bikes that we expect to roll out in the second half of the year. These prepayments to the suppliers are also largely covered with the financing that we received in the beginning of the year. We announced in January that we have, together with IFO, NEFCO, and Suhlbank, three good financial partners, set up a credit facility.
We use that now, but we haven't fully exhausted it, so we're going to draw upon it also now in the second half when it comes to paying the remaining cost for the bikes that we are launching. Talking about financing, or better, the repayment of financing, I want to highlight one thing in our balance sheet that is the loan-to-value ratio and how it develops. What we look at here is, first of all, our fleet. That is just the bikes that we have on the street. You can see that improved in the last half year, partially because of our refurbishment efforts, meaning that we invested time and that improved the value of our bikes, but mostly because we also launched new bikes in the spring of this year, and that increased our fleet value to a little over DKK 80 million.
At the same time, we have continuously repaid the loans that we have in connection to this fleet, not just on a regular basis, but also agreed with our main lender, IFO, on an early repayment. One of the early repayments happened in July. It was an old COVID loan. I still wanted to highlight it because I think it's important to see that we now have a loan-to-value, if you look at our active fleet, of around 0.5, a ratio that we are quite satisfied with and think it puts us in a strong position moving forward. Talking about moving forward, I would like to finish now with the outlook for the rest of the year. As you all probably are aware, we published a guidance adjustment in July.
The reason behind that is, to some degree, the challenges that we are facing in the Netherlands, as mentioned before, but also that we see that the tender period is taking longer than originally expected, so that we do not see ourselves in a position to deploy all the bikes we anticipated. We are, however, quite bullish in regards to the tender outlook, so we want to retain the organizational structure that enables us not just to follow up, but also to utilize these market opportunities. This, however, results in our adjusted guidance on EBITDA, which is now between DKK 22 million to DKK 32 million, and our guidance on EBIT, which is between minus DKK 5 million to plus DKK 2 million. That's the end of my part, and I would give now the word to Thor to talk about our pipeline.
Yes, thank you very much, Christian. As already stated, the market outlook across Europe shows that bike-sharing systems will expand and include many more cities. That is evident for our core markets as well, especially in Germany, Finland, Belgium, and Switzerland. We see growing tender activities among cities. As part of our enhanced transparency in our H1 report, we now disclose insight to our pipeline for tender-based city contracts. It's important to understand that cities are compelled to comply with the EU tender regulations when contracting long-term and large bike-sharing systems. This fact results in lengthy sales cycles, as you can see in the table. However, the benefits of achieving these contracts are well known: long-term revenue certainty and attractive upsell opportunities during the duration of the contract. Currently, we are preparing more than 10 tender applications. We have five submitted tender applications awaiting municipality decisions, and we have achieved two intent-to-award.
Having an intent-to-award means that we are a preferred supplier chosen by the municipality. However, competing bidders have an opportunity of contesting the result legally, meaning that before a final award is in place, there can be delays. That is what we currently have experienced in the two tenders that we have received intent-to-award. The duration of such legal processes can vary a lot from very short to up to 12 months, based on our experience. Nevertheless, the outlook seen from the tender-based pipeline is that we have a mature pipeline and that we have a strong sort of outlook in terms of providing profitable growth in the years to come. I think that was it from our side. We have a bit more than 10 minutes left in the call, making us available for questions and answers.
If there are a lot of questions, we are also in a position where we can prolong the session a bit. Michael, will you guide us through the...
Yeah, perfect. Let's jump into them. The first one is, is the new Gen 4 bike intended to be rolled out in new city contracts, or will it also be implemented in existing cities?
In short, and you can supplement, Christian, but yes, the new Gen 4 bike is designed with city requirements as a guiding line, meaning that this is a product very capable of winning tenders and also to be implemented in future cities that we will operate. However, it is also a bike that is very durable and easy to maintain, meaning that the bike is also very attractive to deploy in our existing city operations. Yeah, I think that is quite an answer to the question. Do you have anything to add, Christian?
I think not a lot. I think a strong side of us is that we have 10 years' experience in running bike-share systems. We have in the organization a lot of former mechanics that are now in different positions, but also that are in the design team. The efficiency of maintaining a bike is the day-to-day business also when we design a new bike. I think we will really see that as a benefit when launching that bike. In addition to that, we have something that really fits city requirements.
Can you talk a little bit about the cost, the less cost it takes to maintain such a bike compared to the third generation or second generation? I don't know whether you have numbers on that. Just to give a feel on maybe how that could also improve your margins going forward, how important it always is to have new generations of your bike.
We haven't published exact numbers on that, but what we focus on is to ease the repair, to make it more efficient. That, of course, then means high availability and creates more revenue. We do expect improved unit economics out of that bike, but also we need to be aware that we have a fleet of 22,000 Gen 2 and Gen 3 bikes, and now we're going to slowly start adding Gen 4 bikes. It's going to take some time to get that come in. We do, however, at the same time, also have a lot of projects that are focusing on overall improving maintenance efficiency. We do not just make it dependent on the bike. We look into our working processes, on how we structure our work, and see how we can overall improve that and get better there.
When you retrofit, as you talked about, you already used a lot. Do you use some of the new knowledge also to implement on the second and the third generation where it's possible?
Yes.
There are the two tenders where you have been selected as the preferred supplier, which are very large, 10,000 to 15,000 bikes. How do you ensure sufficient capital for such large investments? Is there already a dialogue with lenders and investors? Should you be awarded that in the time frame that you are indicating there?
Thank you. A good question. As already mentioned, we have a strong setup with NEFCO, IFO, and Suhlbank as financing partners on the lender side. We are also in a continuous dialogue with investors, meaning that we do feel we are in a good position to raise the needed capital. Also, this H1 report with enhanced transparency provides the opportunity to go into details with investors on several matters linked to these tender opportunities.
Can you provide an update on the two tenders where you have been selected as the preferred supplier? When do you expect the final decision on each of them, and what factors are causing the process to be delayed?
I already touched a bit upon the factors causing the delay in the tender processes. Given the EU tender regulation, non-awarded bidders are allowed to contest the decision made by municipalities in intending to award or choosing a preferred supplier. In different markets and different legal systems, these legal processes vary in time, meaning that what has caused delay is legal contest from the bidders not being intended to award. We are unfortunately not in a position to give a precise timetable for the conclusion of these legal processes. As we have stated, it can be everything from a few weeks or months up to 12 months. Do you have anything to add, Christian?
No, I think that covers it.
Perfect. How have you experienced Q3 so far, which of course is an important peak season with you? There's a comment about the weather in Northern Europe was less favorable in July. I can assign to that being at home. Has this affected the use of bikes? I know you can't give us exact figures, but some indication on how it's running compared to your expectation these two months or one and a half months.
Yeah, I would say that you're completely right that weather is a factor in high season performance. However, weather has actually been behaving according to expectation, and that goes also for our performance. We are actually seeing performance as we have expected during Q3. However, it is also important to say that we are sort of in the midst of the high season. Before we can make final conclusions regarding Q3, we need to have the last half of the quarter in the books.
Perfect. How do you view the possibility of regaining the Rotterdam license? Should we read anything into it that you have moved the bikes? When is the city expected to issue these licenses?
We do not expect to return to Rotterdam during 2025. That is also why we have made rapid decisions of redeployment to especially Den Haag, where we see a good revenue effect already. However, there has been, as I stated earlier, costs associated with that redeployment. It is not realistic, also from a city perspective, that Donkey Republic can return to Rotterdam during 2025. However, we do keep good relationships with the city and also many other cities in the Netherlands to make sure that we are in a good position to provide bike-sharing systems going forward.
There's a question. You already touched a little bit upon it, the competitive situation here in the Nordic, but how is it looking in general on your market, the competitive situation?
Of course, it is a competitive market, and we do experience competition in tender processes. However, we do have a strong track record of delivering strong bids. Looking at the license-based operations, such as the one we are facing in Denmark, we have seen competitors increasing their presence. However, we have managed to secure and defend our market position by strategic price setting, increasing adoption of our bike-sharing system, and also increasing riders' trips and thereby defending our total revenue levels in the Danish market in specifics. We do not expect, as we see the market situation right now, to do structural price adjustments. However, we do closely monitor market developments and react if required.
Are the two tenders under intent to award included in your '25 guidance?
The short answer is no.
Perfect. Do we have any one-off costs this year, for example, from relocating bikes to other cities? Some major ones, and I guess also maybe you had a lot of development on the Gen 4 bike and maybe also on retrofitting the other bikes. Is there any one-off cost? I know some are hitting the cash flow and some are hitting the P&L, but is it substantial? I want to ask, and is there other costs than relocating the bikes?
I can start out, and Christian can elaborate afterwards. In short, yes, we have had costs associated with redeployment of bikes. That goes for the operation in the Netherlands already disclosed and also for our ramping up in Aarhus, where we have increased the fleet with associated costs related to that ramp-up. In addition, we have had the development cost for our Gen 4 bike, which Christian already alluded to. I would say that those are the important factors, but you can elaborate.
Yeah, yeah. They are the important factors. I would not call them specifically one-offs because it is, for me, still part of our normal operations. It is now not a favorable development we had in the Netherlands, and we had put additional efforts there. Yes, but we do redeploy bikes. We do move bikes throughout the year to see how we can best gain the best margin in the best cities. For example, we increased our presence in Geneva. These activities that we do to a larger or lesser extent throughout the year. This is also development. We are going to have the Gen 4 out. That is a very big, important milestone for us as a company. We have a lifetime of these generations if we compare it with previous generations of two to three years.
However, we continuously see development and improvement needs in our bikes and in improving our offers. We are going to continue to have also a focus on developing and improving our product that can be more or less in specific years. I would not single these things out as specific one-off effects out of operations. They are all, for me, part of the overall operations.
We're busy here. Yes, thank you. There's a question here. Revenue LTM is DKK 162 million. EBIT LTM is around zero. Towards the DKK 300 million and some of your ambition and 45 in EBIT, do we see that scale if reached, if the revenue is reached, can add so much additional EBIT?
We are very confident in our ambitions, and it will be a combination of growth from growing the fleet, increased revenue per bike, that is increased utilization, and of course, economies of scale in terms of securing a correct and lean cost structure on fixed cost.
If we do the math, it's the 50% around margin and then the fixed cost based on the depreciation. Perfect. Yes. I believe there's a large tender opportunity in Munich. Is that still open or has MVV already made a decision?
MVV has not made a decision. There has been a longer legal process going on regarding the Munich tender, and the tender is now due to legal ruling back to best and final offer stage, which means that that tender has been prolonged and actually moved back in our pipeline from intent to award to an application submitted.
Perfect. That was the last question from the audience. I think one minute over, so I think we can say we catch it in the 30 minutes. Perfect. Thank you for you two for taking us through and answering questions.
Thank you. A real pleasure.
Thank you. Have a good day.