DonkeyRepublic Holding A/S (DONKEY) Earnings Call Transcript & Summary

Welcome to today's event where we have the pleasure to present Donkey Republic. As we can see here on the front page, the H1 report, the expectation for the rest of the year and the achievement through the first half of the year will be the topic of today's presentation. To help us through today's presentation, present the results and answer questions in the end of the presentation, we're joined by CEO, Thor Moger and COO, Signe Storgaard. As always, there's a box down below. Do feel free to ask questions. Do feel free to do it in Danish, I'll try and translate to the best of my ability. There has already come in some questions, see whether it has already been asked, but do still feel free to ask questions. But with that introduction, I think I will hand the stage over to you, Thor.

Thank you very much, Michael, and thank you for hosting this event. Also, thank you for all participants taking the time to listen in. My name is, as you mentioned, Michael, Thor Moger Pedersen and I'm the CEO of Donkey Republic, and I'm joined by my good colleague, COO, Signe.

Yes. I'm Signe Storgaard, and I'm the COO of Donkey Republic.

And we have been -- had the honor of leading Donkey Republic now for a bit more than 12 months. And we are very excited to present this H1 results, also showcasing the great efforts done by the organization and the team in implementing the company's strategy and also showing the effects of the transformatory decisions we made back in 2025. But let's get to it. If we start with the overview, what has defined H1 2026 for Donkey Republic. The main headline is that we have delivered on our strategy and really been in execution mode. We launched our strategy Ride and Do Well back in Q3 2025. And since then, we have been very focused in actually executing the strategy and what we see is that we are improving on profitability alongside a continued growth path for the company. Importantly to highlight is that we have implemented a stronger operating model, transforming our organization. This means in the essence that we now have a very efficient and cost efficient -- effective HQ organization in place, enabling us to onboard new cities without increasing central cost and we have regional accountability and also regional execution power, enabling us to pursue commercial opportunities with a greater speed compared to previous setup. So that is the foundation enabling us to deliver profitability and growth at the same time.

Yes. And on an operational perspective, we have also launched our new two regions in Germany, Ruhr and Dusseldorf. We had a great launch event in Ruhr April 1 and launched in Dusseldorf July 1. Furthermore, the Gen4 platform has now really shown to be successful also at scale, and we are now harvesting the first benefits from a greater, more qualitative bike, and that is also what will be supporting us for profitable growth going forward.

Exactly. And on top of the operational improvements, we have also successfully executed a capital raise in the beginning of the year. And following that capital raise, we have finalized and completed a comprehensive restructuring of our debt, meaning that we now have the company in a very solid capital position, and the outlook for our growth expectation is from a capital perspective, that we now have the set up to fund our expansion towards 2030 without additional equity raises, which is, of course, a positive situation to be in. Looking at the numbers, Q2 has been strong performance quarter. We have seen revenue grow more than 18% compared to same period last year. And especially, we have also seen EBITDA and thereby, profitability increased significantly to more than DKK 21 million for the period. And the KPIs are also showing in growth in monthly revenue per bike. We have also seen trips and riders increased more than our fleet has expanded in Q2, sort of delivering a very solid foundation for the half year and translating into the full half year, where we did see back in Q1 a bit of headwind due to tough weather in the Nordics. We do see H1 performing as planned, with growth of almost 16% and especially, again, highlighting that our profitability for the period is at an acceptable and planned level and much improved compared to H1 2025. That is also the reason for us to narrow our guidance for the full year performance. We are narrowing our guidance upwards. So now we do expect a revenue between DKK 184 million to DKK 194 million and profitability on EBIT level between DKK 4 million and DKK 9 million. This is, of course, reflecting the strong H1 performance, but also a solid outlook for the rest of the year with high season already in place here in August. And we are, of course, very focused to actually deliver this performance because it will require full attention from both management and all team members to actually execute on these guidance expectations. But however, given the H1 performance, we do have confidence in us actually executing these expectations. Just double-clicking on what is actually driving the profitability improvements of the company performance. We are coming from a situation last -- same period last year where we actually saw a negative EBIT of DKK 8.1 million. And this half year -- first half year, we are delivering a positive EBIT result of DKK 4.7 million. That is the first positive H1 performance in the history of Donkey Republic. And of course, we are very proud and pleased to see this development. We see several effects building up to the positive result. One is increased revenue. Then we also see that within our city operations, we have managed to improve contribution margin, so being more cost effective within each city operation. And on top of that, we see the effects of the organizational changes made in Q3 and Q4 2025, lowering the central HQ cost and thereby contributing to the overall profitability. We do see also an extra depreciation effect coming from the fact that we are increasing our fleet. Nevertheless, we are transforming negative DKK 8.8 million (sic) [ DKK 8.1 million ] to a positive 4.7 million EBIT performance results, which is in line with our plan and a testimony to the effects of our strategy. Now you, Signe, will take over and give us some insights in the regional performance and sort of with the last 12-month perspective.

Yes, exactly. So over the last 12-month performance, we're showing that we're both increasing revenue and also numbers of trips and have also been able to increase our contribution margin, meaning that we have delivered growth without trading profitability. Overall, we have focused on both increasing utilization in all our markets, and that has been done through both activating more riders through specific city offerings, but it has also been done by our ability to now price our offerings more strategically and also have variance across different periods depending on the situation, events, weather and so on in the cities. Furthermore, we have had a strong focus on operational efficiency, both really planning the budget for each city in a really strong and tight way. And then we have also really improved on our spare part management setup, making sure that we are only ordering what we need and have been more firm in also how we are basically supporting the bikes in the cities. Yes. If we look at the DACH region, we've seen a good revenue growth despite both scaling the numbers of trip, but we've been managed to keep the operational costs under control, leaving us with a strong and stable contribution margin now on 56%. We do, however, also continue to have full focus on the rollout in both Ruhr and Dusseldorf, focusing both on getting the utilization up, but also making sure that we continue to keep our tight cost focus. We expect overall that the effect of these 8,000 new bikes on the street will have full P&L impact in 2027. Moving forward to the Nordics, we see a continuous improved performance with a 23% (sic) [ 9.7% ] increase in revenue and also an improvement in the contribution margin even in a market where we see very high competition. What we've done to respond to this competition is that we have focused on dynamic pricing structure and also strengthening our membership offerings across the cities. In Benelux, we saw a slight decline in the revenue still due to the downscaling of the Netherlands. However, we are on the right track to stabilize this region that is key for us. And we do see an underlying uplift in the contribution margin over the past months. So we are confident that we are on the right track and will stabilize even further.

Thank you, Signe. And I will just give a status on our company strategy being the key driver for our improved success and will also be the key direction for us going forward this year and onwards. We have three highlights of defining key trends for the bike sharing market towards 2030. First of all, we do see a very high growth in demand both from users and cities, with bike sharing becoming an increasingly integrated part of urban infrastructure and modern mobility. In addition, we see public transportation being more and more interested in integrating bike sharing into already existing public transportation platforms and systems. And as a third key trend, we do expect long-term contracts, meaning tender-based contracts and protected licenses to be the dominant regulatory regime for bike sharing going forward. Based on the trends and also our point of departure as a company, we aim to be #1 within trusted city partnership, integrating bike sharing into urban transportation infrastructure and also being #1 in operational efficiency. That is our key value proposition and the focus areas constituting our daily operations and also our strategic priorities. What have we achieved so far in the last 12 months, where we have had the pleasure of leading the company under the new strategy together with the rest of the team. We have seen margin increased due to a combination of cost control and increased growth. In addition, we have, as stated in the beginning of this presentation, implemented a new operating model, allowing us to scale without central costs growing in the same pace as our revenue, meaning that we now have in place a scalable model where we can onboard new cities and harvest the economies of scale, which is a necessity for asset-based business like ours. So now we are growing our footprint across Europe, and as you said, Signe, with Ruhr and Dusseldorf as milestone projects for this year. We do also see a good market outlook regarding tenders and protected licenses, putting together with our performance, full comfort in our 2030 ambitions being realized step by step. I have already mentioned that we are upwards narrowing our guidance range for this year, and we still see the progress of our business in '27 and onwards towards 2030, in line with our communicated strategy plans and thereby bringing the business up to a profitable and scalable position.

Yes. And just showing again our strategic pipeline that is now included in the reports that we published. But it really underpins that the market is there and it's growing, and it is in line and also our ability to deliver on our strategic ambitions. We remain dedicated to achieve our disciplined growth, and we will continue to pursue the strategic opportunities within the 3 defined regions. And as you can see, we do still look into a number of possibilities that we are working hard on within the organization.

Thank you, Signe. And of course, we have also a few events after the reporting period, which we have highlighted, we have already touched upon the launch of Dusseldorf in Germany. We have also communicated that we are expanding into Helsinki, Finland, now present in the city center of Helsinki and increasing the fleet throughout August. And as I mentioned earlier, we have completed our debt restructuring. So going forward, our company will not be exposed to state-backed financial institutions, but we will be financing our investments through commercial banking facilities with AL Sydbank as our main lender partner. Also, we have welcomed a new board member to Donkey Republic. Lars Kristensen joined the Board, July 2026. We look forward to the collaboration in the Board. We have also communicated a change in executive management with Jonas Bech stepping down from his position with full effect from the end of this month. Thank you for your patience and for you listening in, we have tried to time it in a way where we also have time for Q&As. And Michael, do we have received any questions?

Yes, yes. Perfect. Perfect. I think it will fit actually perfect. So you have one intent to award contract. Is that the July '22 Helsinki deal you showed in your...

No, it's not. Helsinki setup is based on an open license and what we show in our strategic pipeline that is tender-based opportunities and protected licenses. So the intent to award is not Helsinki.

Perfect. And then staying at the Helsinki, you go in, as you said, on a different, without public support, and there's already a public supported a bike operator up there. Your thoughts about going into such a market with the strategy in mind as we read there and some of the future perspectives for this city. So why this city in this way?

We have assessed the Helsinki opportunity very thoroughly, both as a business case and as a strategic focus area. First of all, looking at the business case isolated, we are quite confident that we can supplement the public-based system and deliver a profitable operation in Helsinki and that we actually also see that our bikes is a good contribution to the urban infrastructure in Helsinki. We have been in close dialogue with the municipality administration and see a good fit for us. So that is sort of the one aspect we do. We wouldn't have entered Helsinki if it wasn't a healthy business case in itself. In addition, our presence in Helsinki is also a strategic move. We do want to have a close relationship with the city administration and the people living in Helsinki because we think we are a good match for the future public bike sharing system, which is expected to be tendered out within the short-term horizon. So it also gives us hands-on experience operating a fleet in Helsinki, which can be a strategic advantage going forward.

And then a little bit about the initial reception in the Ruhr and Dusseldorf. I know it's early, but can you say a little bit about this? And I think there's a question about the rollout of bikes, but let's start about the initial receptions and your feeling of the efficiency on the bikes or how the take-up of the bikes.

Can you take that, Signe?

Sure. Yes. So I think as we have also described, we do see a small delay in the rollout in Dusseldorf, meaning that we have not had as many bikes as we had hoped for at the current moment in time. And that also means, obviously, that the utilization of the system is not where we had hoped it to be. The delay here we're talking about is around 2 to 3 weeks, increasing the number of bikes, you can say, more sort of heavy here in the last end of August and September, whereas we had planned for a more sort of even rollout from July 1. That means that right now, we're not seeing the number of trips as we have hoped for, but we have initiatives both to get utilization up and also to have campaigns to really showcase that we are there now. So we do not expect that it will have a long-term effect. In Ruhr...

I don't know whether you want to go into such specifics, but there's 1,300 out of 8,300 bikes was the status at half year. Do you want to give us the status now and how that looks? Or is that too much down to the lines which you don't publish?

Yes. But what I can say is that the system is divided. So we have 5,500 bikes around that, in the Ruhr area. We have delivered the parts that we've also published in April there. And the 2,500 bikes that we have planned in Dusseldorf will be on the streets around mid-September. So basically, coming back to the question, we do also see a month or so delay in the rollout plan for Ruhr leaving us with the exact same challenge that we see in Dusseldorf. But again, we are not seeing it having a sort of a long-term impact, but we have had some challenges with one of our suppliers.

Perfect. Let's then jump into next. There has been some debate about bike sharing. I guess, by debate, they mean how do they ride their bikes for us living here. Do you see any angles in the debate? Is it just too much? And it's actually not that bad? Or will you try and teach your bike riders how to ride bikes a little bit better? Any talks about this debate because I guess it could be -- you don't want the public against you and this discussion. So any thoughts about this debate by you?