Welcome to today's event, where we have the pleasure to present Green Mobility. To help us through today's presentation and answer questions, we are joined by CEO Kasper Gjedsted. Today, as he said here on the front page, your H1 2024 interim report, just released fresh from the press this morning, is the subject for today's presentation. As always, you are encouraged to ask questions in the box down below. Do it in Danish, do it in English. If in Danish, I'll try and translate to the best of my ability, but I think for now, I will hand the call over to you, Kasper.
Okay, thank you very much, Michael. Let's jump to the second slide here, which is a disclaimer. And then, let's jump straight into a few slides that we have prepared. The first one is called Guidance 2024. So, a lot of things have been going on in Green Mobility this year. From a strategic perspective, we have now closed down all of our international markets to focus solely on the Danish market. And if you ask me how that has gone, I'm happy to say that this major strategic shift really has paid off. We have in fact come so far in the execution of this change in strategy that we just a couple of weeks ago were able to increase our guidance for 2024.
We are now having our expectations for 2024 on the continuing business to on the group revenue level of DKK 120 million-DKK 130 million , and on a profitability level before tax we are guiding between DKK 2 million and DKK 12 million-plus for this year. I'm also satisfied that you know we are on the track on the right track to become the first and only company in Europe to demonstrate this profitability of shared electric vehicles. I think that's a major milestone for us as well. We have as promised initiated a strategy process for 2025-2027 to thoroughly assess our potential with a strong strong focus on growth but with an even stronger commitment to profitability. Once we're done with this we will
I'm looking very much forward to present that to all of you. And as a standard thing, you know, I think for, that goes for most boards and management, we're continuously looking to strengthen the balance sheet and cash position in order to maintain and grow the business. Those solutions may include loans, credit lines, or capital raise. Let's jump into the next slide here, where we are diving a little more into the highlights of H1 2024. So on the revenue, we have a 59% increase. That's a 59% increase in revenue from the continued operations here. We have an improvement of almost DKK 6 million in operating profit loss from continuing operations, and we have an improvement of DKK 3.6 million in net profit on the continued operations.
I think it's super, super interesting that, if you look at, you know, if we dive into difference between Q1 and Q2, and if you compare the two, we see an accelerated growth and an accelerated profitability, and what is more interesting, even more interesting, is that, you know, from a demand perspective and from a seasonality perspective, we are now moving into the best part of the year, which is the second half of 2024, which is traditionally the best part of the year, which again, will underline that we are, you know, accelerating this growth, revenue growth and profitability, so we're very confident in the financial guidance that we have given, especially taking the second half and the, you know, seasonality perspective into that.
We're very confident about the guidance that we have given, and that we up-adjusted upwards on the 8th of August, just a couple of weeks ago. I think we're also very satisfied that we have a positive cash flow from our continued operations, and we're also very satisfied that the vast majority of activities that are related or that were related to all of our international markets and this discontinued business have now been finalized. I'm looking into the second half of this year with a very strong confidence in what we have guided.
If we, on the next slide, are diving a little more into the average monthly revenue, which is really a key indicator for us on how things are rolling here, we could see a revenue growth of 19% from Q2 2023 to Q2 2024, which has led to an all-time high monthly revenue per car in Copenhagen. I think it's important to notice here that, you know, this is a time where we have in-fleeted a substantial amount of the cars from our international markets into the fleet. In other words, there has been a really good uptake of the cars and a good demand, and it underlines this, what I keep saying, this accelerated growth, so we're growing more and more.
All cars from these international markets are now in-fleeted in Denmark, and we're of course monitoring you know the data coming in very diligently, the demand data to assess where the market saturation point is. So we're monitoring that every day. And if we go from Copenhagen to Aarhus, so in Copenhagen, we were up 19% in average monthly revenue per car. But in Aarhus, this accelerated growth is actually going even faster. So in Aarhus, we see a 25% growth in the average monthly revenue per car from Q2 2023 to Q2 2024. So Aarhus is also trending in the right direction in terms of the average revenue per car.
Please remember, you know, this accelerated growth is not only related to Copenhagen, but also to Aarhus, which has a significantly lower operational cost than Copenhagen. I think it's showing some really good trends for this city as well. If we go to the next slide and have a look at our outlook and liquidity, then our result in the first half here is in line with our strategic plan of group profitability in 2024. You know, with our accelerated growth in both revenue and profitability, we are moving steadily towards this goal. We spent a lot of time in the first half here on closing markets, you know, and to streamline and focus the organization to achieve our overall goal of becoming a profitable company.
For me, and for the rest of the team, and the board, we have promised that we will be profitable this year, and I'm absolutely confident, given the first half here, that we're gonna achieve that. But of course, it costs money to close these markets and to turn around a company like this. And the closing of these international markets has had a significant cost and has led to a negative equity position at the end of first half of 2024. We expect to restore this negative equity position during 2025 at the latest, and we have also received support from, you know, our banks and counterparts to change this whole strategy, and therefore, and this is important for me to stress, therefore, we have sufficient cash to drive this strategy forward.
But again, you know, as any responsible board and management, we are looking into, you know, possible solutions to strengthen our liquidity position, you know, and to give us more cushion if need be. But right now, we have sufficient cash to drive the strategy forward. And if we go to the last slide, Michael, you know, I'm just gonna reiterate what I said in the beginning. Our expectations for 2024 on the continuing business, we are confident about them, given our accelerated growth in both revenue and in profitability. Our group revenue, I repeat, that is DKK 120 million-DKK 130 million . Our profit before tax is between DKK 2 million and DKK 12 million. And we are committed to achieving this profitability, and we are committed to show, with the profitability, that this green transition can actually be profitable within shared mobility. And that's it.
I think those are the highlights given. Profitability and growth goes well hand in hand this time around, and I think our strategy is on the right path. Over to you, Michael.
Let's jump into some questions, Kasper, if you're ready.
Mm-hmm. Sure.
What is driving the growth in revenue per car in Aarhus? Have you increased market spend or other initiatives?
I think, you know, I think one of the major advantages of focusing your business on not having to, you know, have your organization distribute all of its efforts in many, many markets, international markets, and really have the ability to focus your business. I think Aarhus is a result of that, because now we have really given Aarhus some love, and care, and attention, and therefore, we have also seen a better utilization of our fleet. Focus, you know, I think is one of our main drivers here with the strategy that we have now on focusing on the Danish market. We can really, you know, give the different markets in Denmark the necessary love, if you will, to drive that.
And you also stated, and, you know, you need the proof in the pudding that if you put more cars in, more people will see them in the street, there will be more availability, and more will start using it. Do you think that's what you're seeing in Aarhus? Because there was not a competitive going out, so that must be kind of pure numbers of you putting in more cars, you know? Is that also what you see besides the love or besides the focus, do you see that as a sign that that sentence or that theory of business might be correct?
I think, no, in Aarhus, I think we see something different than in Copenhagen, because we actually haven't put that many more cars into Aarhus, quite the opposite.
Okay.
So in Copenhagen, I think that's a snowball effect, some of it that we're seeing, because the more cars you have on the street, the more people who see the cars, who see our branding, who you know start to put us on top of their mind. The more cars are available when you need them, and so on and so forth.
Yeah.
It's a snowball effect, the more cars you have, but obviously, you also have a saturation point. We just haven't seen it, I mean, a demand saturation point. We don't know why that is, actually. We don't know why that is with our current products, we don't know why it is, and especially not, you know, when introducing new products and new services and so on and so forth.
Yeah.
We simply don't know where that is. We haven't seen that yet. That's, as much as I can see.
And then, to finish off, Aarhus. I think, is there a reason that, besides time, that Aarhus is on a lower level than Copenhagen, and actually structural? You know, should there be any difference? Is it easier to get a higher revenue in a bigger city? Any thoughts about, you know, Aarhus reaching Copenhagen's level of revenue, anything structural that should make that not possible?
I think there may be some cultural changes. There's some maturity levels when we talk about this. There's maturity in the market. We have been in the Copenhagen markets for substantially longer than we have been in Aarhus. Copenhagen is a bigger market with a bigger demand, natural growth demands. But I really do believe that Aarhus has a lot, you know, a lot of demand that we haven't unleashed yet, and a lot of revenue that we haven't unleashed yet. You know, with the focus that we now can give on the home markets here, I think there's a lot to come for Aarhus still.
Obviously, it also, you know, have to have a good cooperation with the municipality in Aarhus, Aarhus Kommune, and the municipality there. I think we are in good discussions with them. We have some fruitful discussions with them, and I'm looking forward to we can combine, make it even better for people living in Aarhus to support them with the shared mobility.
Perfect, and now, a question, and now you focus on Denmark. Do you have any plans to expand into other related business segment or, or maybe within your business segment? You know, I think I've heard you use it... You have the service segment, you have the premium segment, you have the van segments, you know, and, so any thoughts about between those segments, whether expanding in some of the segments and, and maybe also into some related business areas, or maybe that's too soon in the strategy process?
I was about to say, you know, we're not done. We have started the strategy process, but we're not ready to, you know, present it yet. But obviously, that goes, that's a part of that strategy process to look at, you know, our current product offering, our distribution channels, you know, what kind of models we have, fleet renewal and so on and so forth. But you know, we have already tapped into more customer segments than we have before. In the beginning of the year, we in-fleeted 50 Polestars, as one example, and we have in-fleeted more vans than ever before, more big vans, you know, the Opel Vivaro-e, Mercedes-Benz eVito and stuff like that, and those are going very well. So obviously those are potential growth or growth markets.
I think another important aspect about this is our, now our ability to do, you know, go into other segments or expand into already existing segments without taking the risk on the, on the cars.
Mm.
I think that's super important for me to stress that I'm of the strong belief, and I've done this before in other companies that I've been leading, is that we are moving toward an asset-light model. The Polestars, we don't have any residual risk on. All of the vans that we're taking in, we don't have any residual risks on. We can actually return them before time, if the demand is not there. So we're really mitigating the risk and lowering the risk of running the business and running the operations, even if we go into new segments.
It's really important for me from a strategic point of view and from a risk perspective, that we're lowering and mitigating all of the risks that there are with running a company like that with a lot of, you know, heavy assets and expensive assets.
Um-
We do that on the new segments that we already tapped into.
Perfect. And then there's a question: Is there any effect in Q2 or H1 of sale of cars out of the fleet?
I'm not sure that we are guiding on that. But, you know, we haven't sold any cars in the first half that has had any-
Within the continued business. Sorry.
Continued business
... I needed to say that because-
Okay, cool
... of course, you have shed some cars in-
Yes
... the discontinued, but in the continued business.
We haven't sold cars in the first half that relates to continued business to any, you know, significant extent. And, you know, I'm focusing more on the operational cash flow, and there's no effect on the operational cash flow in terms of selling of cars on that one.
Perfect. Then there's a question: You're looking for capital. How much?
I have to correct you there. We're not looking for capital per se. We have sufficient cash to drive our strategy forward. And that's also what we stated today in our half-year report. That's all I can say about that.
I think you mentioned, well, but maybe there was a sentence afterwards, but that was more talking like a buffer, if you prefer to have a buffer, and that can be from other sources, you know, than necessary capital. Was that how we should understand the second sentence?
Yes. I think it's, it goes without saying, but I think most board and management, even, I mean, those who are responsible at least, they will always evaluate the, you know, possible solutions to strengthen their liquidity position, you know, to have a more comfortable cushion. But for now, we have a sufficient cash, so, you know, if we should look for a cushion, that would just be, you know, good, but not necessary.
Good. What is the expected loss from the discontinued activities in Q3 and H2 2024? I don't know whether you guide on that. Do we guide on that?
I don't think we guide on that one.
So what you are able to tell us is that the main part of the activity of this one is done. Is that how we should understand it?
That is correct. So the main activities have already been helped, so to speak. You know, we had organizations there. We had, you know, office buildings, we had cars and so on, operating cars and insurance and all that, and everything has either been closed down or sold off. So the vast majority of operations there have ceased. So everything related to discontinued or the vast majority have been finalized.
There's a question. Copenhagen and Aarhus did well in Q2 and earned DKK 1.8 million. Can you analyze this earnings to get an impression of your earnings capacity in the coming years? Is there any seasonal effect? Is there still a ramp up of something in this quarter, so you should not necessarily analyze the 1.8 times four? Is that how we should understand it?
I think, you know, as I mentioned, from a demand perspective and from a, you know, the seasonality perspective, we are now moving into traditionally the best part of the year in the second half, which again, as I see it, will, you know, underline that we are accelerating our growth and profitability. The first half of the year, especially the first three months, are always the lowest from a seasonality perspective. And the second half of the year is always the highest. That's what we can see from historical data.
Yeah.
We are moving into the best part of the year. And that's also my hope and also my expectation that we're accelerating the revenue growth and profitability there.
Yeah. So it's a no to analyzing this quarter, if I-
As close as I can get it.
I think that's also what you indicate in your guidance at the top end, at least. So, yeah. Is the level of externality expenses what we can expect going forward with the amount of cars? More like, are you... Is this a leveling out, or are you still pursuing, you might say, trying to take out some costs?
I think there's a lot of opportunity in that, actually. You know, there'll be a natural change in our fleet as we are moving down the line here. That's one of the things that I spend a lot of time on. But if you look at the natural decrease in electric vehicles, there is a significant cost save waiting for us there. I don't want to put numbers on it, but it's pretty obvious that if you look at a Group B segment like the Zoes, that which is the backbone of our fleet now, and compare it to a new Group B segments that are coming out, you know, I think that the Zoes could be bought back in the days for the average consumer for DKK 280,000, you know, in retail price.
Now you have a similar car, Group B car, they can buy from you for DKK 180,000. So if you just take those two and you analyze that gap between them, the financing gap, the operational cost reductions, and so on, we are looking into significant, a significant upside with the change of fleet.
Perfect. And then the same question regarding depreciation. Will Q2 be the level going forward? I don't know whether you want to dig that deep into details on the P&L or I'm sure they can send you an email, and your CFO will get, but should we expect around the same level of depreciations as we are seeing right now?
So about our depreciation model, I mean, if it's a very narrow question that you're happy, I mean, we're happy to answer it afterwards and just shoot me an email. I think you have my contact details at the very last slide. But on a general level, in terms of our depreciation model, I'm very confident about that. I think we have a strong depreciation model for our current fleet. I think we have some good value compared to the market values and so on. So I'm very confident about that. And if you know, if you have any specific questions about the model and how we're doing things in terms of depreciation and the depreciation model, then just shoot me an email, and me and our good CFO will be happy to answer that.
Perfect. As Q2 monthly car per revenue is affected by you putting more cars into Copenhagen as always, do you expect revenues per car to increase, or will it be at this level? You know, you indicated a little bit that you're still collecting data. You're not sure what the saturation point is. But if you can talk a little bit about your expectations, you know, going forward here, what you are seeing on revenue per car.
Yeah, I've got to be honest with you, we don't know the demand saturation point yet. We have seen a really good uptake, in spite of the fact that we have put in or inserted a lot of cars, a lot of cars. So we don't know the exact saturation point yet, and we don't know the exact saturation point because that also moves along the fact that we're introducing new products, new services, and so on. So we will actually expand the market whenever we choose to do so. So, you know, but, you know, we have guided on DKK 2 million-DKK 12 million in profitability on the continued business, and we're confident about that guidance, and if that changes, we will let you know as soon as possible.
Perfect. And then there's a little bit about Trustpilot rating. It was 4.3, 4.5, now sits at 2.4, and I don't follow this. Are you concerned about this?
Yes, I am concerned about everything that is related to our customers and customer satisfaction, and it's something that we now, with the focus on Denmark, have a very good opportunity to improve significantly. So let me talk a little bit about that because it is actually super, super important, and my entire adult life, I've been working in service organizations, so I have a lot of focus on the customer journey. So one of the things that I think was difficult for the organization before was to focus on the customer journey and with a relatively small organization, though very much bigger at that time than compared to now, there was a lack of operational excellence. Let me just be very clear about that, and there can be multiple reasons for that.
But one of the reasons was that we didn't have this focus. Now we have the focus. Another reason was that we were not working with, you know, operational excellence. As you know, you should be working with operational excellence.
Yeah.
One of the things that we're doing now is I'm talking about McDonald's all the time in the organization here. The burger has to taste the same, so no matter who is cleaning a car, they need to know, the employee need to know exactly what kind of standard they have to live up to. We're introducing the Green Mobility University, where everybody gets an education plan, a training plan, and they have to go through it. They have to pass exams. They have to be able to make a burger, no matter what you do in the organization, to make it taste the same every time the customer comes in. And I think we will see a very good improvement in terms of our customer ratings.
I'm looking more into Google, to be honest, into the Google reviews, than into the other platform here, because that's a lot of things to do with, you know, paying them and so on.
Yeah.
But if you look at our Google reviews, that's something that I'm keeping a very close eye on.
And I think you actually answered the last question we have, is whether you can have the cars cleaned, and how you're succeeding with that. But, I think you answered that now you have introduced the university on how to keep them clean, because, yeah, I think that is some of part of the customer experience, right, is that, you're sitting in not in your own car. So, I guess that's very, very important. But I guess you answered it by you saying putting focus on it. Maybe it hasn't been perfect in the past, but you hope to make it better in the future. Should we understand it like that?
That's right, and I think I've already seen that, and I hope that if you go to one of our cars today, you will already see a significant improvement in terms of the level of cleanliness that the cars will meet you with.
Perfect. That was the last question. Thank you, Kasper, for taking us through your result and answering questions, and thank you for the audience listening in.