GreenMobility A/S (GREENM.CO) Q3 FY2025 Earnings Call Transcript & Summary

Welcome to today's event and we have the pleasure to present GreenMobility. As always, very welcome to the audience, and welcome to you, Kasper Gjedsted, CEO of GreenMobility. Today, your Q3 trading statement. So not heavy on numbers. So I guess it will not be a long presentation, so let's focus on the Q&A, as always, when you do the trading statements. As always, you're very welcome to ask questions in the box down below during the presentation, but we will take the main part of the questions in the end. We will conduct this in English but very welcome to ask questions in Danish, and I will try and translate to the best of my ability. But for now, I will hand the call over to you, Kasper.

Thank you very much, Michael, and welcome to all of you who are viewing today, after this disclaimer very shortly on myself and GreenMobility here. So I come from the old fashioned car industry. I've been CEO for the Avis Budget Group in Denmark and in Sweden. I've also been with SIXT for a number of years. And I came to GreenMobility in the beginning of 2023. And for those of you who don't know GreenMobility, it's a super easy product to use. If you need a car. You just download our app. You open the car in the app by swiping and you get into the car, you drive to your destination, you leave the car behind you and then remember to lock it, of course, and then we charge your credit card for the minutes, the hours or the days that you have used the car. We have around 1,400 vehicles. The majority of the backbone of our fleet is the Renault Zoe, it's a small city car with a very -- I mean for the size of the car, it has a very big battery. We also have some premium cars, which is the Polestar and a few Renault Megane and we also have cargo, cargo vans, also EVs, which is also a very good revenue generator for our fleet. And then we recently -- before the summer, we introduced the ID bus 7-seaters. It's a category that we haven't used or tried before. It's going well. And it's super for the purpose of groups and sports clubs. And if you have a lot of luggage going to the airport and so forth. We have the leading car, free flow car sharing platform in Denmark, we have now more than 135,000 trips per month. We have a market cap of DKK 425 million as of yesterday. And also as of yesterday, the share price is up 117% year-to-date. So I think it's one of the best-performing shares on NASDAQ OMX this year. We have a guidance of 13% to 15% revenue growth, and we're expecting EBITDA growth of 32% to 42%. So if we dive into the Q3 and look at some of the highlights from Q3, if you take the first 9 months of this year and compared to 2024, we see a 23% increase in the revenue. If you take the same 9 months and compared it to the same 9 months of '24, we see a 60% increase in EBITDA, a 60% increase in EBITDA. And if we zoom in on the Q3 alone, we see a 14% increase in the revenue compared to the Q3 '24 and 60%, again here on the EBITDA compared to Q3 '24. So I think it's a solid quarter for us. We are continuing on executing on our operational excellence. We're continuing on executing on our cost management. We have some very strong marketing customer acquisitions. We are very data based on our marketing. We are award nominated in several categories on our marketing and we've seen a summer demand for this quarter, July, August, that was very good. Some of the changes for the company from a revenue perspective is actually what you can see in this map. This is a map for normal summer day, I would say, in Denmark. And prior to me stepping in, we were actually having some challenges on what did we do during the summertime when all our normal day commuters were leaving the city, going on an airplane to somewhere, down south whatever they were doing. They were leaving the city. And one of the successes we have had from a revenue point of view is that we have been able to transform the company from these short trips, intra city trips, 10, 15, 30-minute trips and then convincing new and existing customers to take one of our cars and go on a vacation with it and use it for longer trips. And this is what the map shows. We have cars everywhere on a summer day, everywhere in Denmark, even in Southern Sweden, as you can see to the far right. So that is one of the success factors driving the revenue, the continuous revenue growth here over the summer. So yes, that's -- we have had 2 -- we have 2 adjustments of the guidance, positive adjustments of the guidance. We had one in July, where we went from 17% to 13% on the revenue to 10% to 13% guidance. And then on the EBITDA on -- we had a 40% growth guidance, and then we narrowed that up to 25% to 40% growth year-on-year. And then in September, some months later, we revised our guidance again upwards. And going from that 10% to 13% and up to 13% to 15% on the revenue and then again, from 25% to 40%, going up to 32% to 42% growth year-on-year on the guidance. And that is the latest guidance as we see here. And then on the latest news is that maybe some of you heard it, I'm not sure. That's a very popular podcast in Denmark called Millionærklubben, Millionaire Club, lack of better translation. And I was on it earlier this week, and I talked about self-driving cars in the GreenMobility context and self-driving cars in general. And it's something some of you have heard me talk about before, I can talk for hours about it, I promise to make it short here. It's not as far away as a lot of people think with self-driving cars, and that's why I'm starting to talk about it and not even talk about them. We are actually having planned for that with GreenMobility. And the reason why I talk about it and the reason why I'm spending my time on it is because if you take these cars, if you take the Google owned Waymo or Alphabet owned Waymo, which is running in the United States at the moment. 350,000 trips per week without a chauffeur, 350,000 trips per week with paying passengers. These cars are making around 90% fewer damages. So that would have a significant impact, of course, if we can make the same statistics for Denmark and apply it here, that will have a significant impact on our costs, right, and we will reduce our costs significantly and our insurance cost as well. And we are running around with our current model. We're running 3 to 6 trips per day, Waymo car or an autonomous vehicle is running between 22 and 26 trips per day. So for those -- I mean -- and for those 2 arguments, it's super interesting for us to look at that. And the third, and I think very important argument is -- why I'm looking that this is because GreenMobility we have -- we're sitting on a ton of gold. We're very well positioned because I think the technology is there now. We've seen that 350,000 trips per week plus the millions of trips that you have from autonomous vehicles in China and the Middle East and so on, going on now. The technology is there. So from an operator like us, we have a very huge advantage because we're so well positioned because we have all the data. We know where the customers are driving. We know how long they're driving, we know exactly where they're driving from and to, we know how much they're willing to pay and so on and so forth. And we have 8 years of data for millions and millions of trips in our company that we can utilize and apply as soon as we get our hands on these cars. And the second part, which is also the most important, 1 or 2 most important things is that we are -- right now, we have the customer relation. We own the customer, so to speak. So it's for us and for me personally, I can hardly wait until we get these cars. And obviously, I mean, talks with the big manufacturers and operators of these cars around the world, to get them in as best as possible. It's not the technology that we're waiting for. It's actually the authorities. So obviously, we're also in talks with the authorities around this. And it's not because it's going to change GreenMobility next year or the year after. It's not like we're changing 1,400 cars into autonomous vehicles. It's going to be gradual -- a gradual change of our fleet into that. Eventually whenever the authorities are working with us on that to get the permit and all that. But I'm talking about this because I think this is what we see the future of GreenMobility, and it has some very interesting potential for us. But I mean, I recommend that you go in and listen to Millionærklubben from this week where I was in and I talk a lot more about it. I think that's it for me, Michael.

Perfect. Let's jump to the Q&A session and don’t worry, I wasn't there that day, so you will not need to hear my voice, and you can also only get to Kasper's interview. There's a question here about how do you work on improving your Trustpilot ratings. There has been some discussion about your Trustpilot ratings, the experience in the car. So have you improved that, your Trustpilot rating or are still in progress? And how do we actually work with improving that, I guess, customer experience in the car.

So with regards to the reviews, I mean, if you look at Google, they look very different from Trustpilot, thank God. But anyway, that's a whole lot of discussion on Trustpilot, whatever. But we are very -- of course, we are very focused on this. If you sort of group the customer complaints, there are 2 major groups of customer complaints. You have actually complaints over the previous driver who had the car because he or she have -- may have left the car dirty with a trash or with a smell of smoke, for example. And we're addressing this with, I think, 3 major operational excellence plans or 3-part plans on that. So we are and we have professionalized the cleaning standards. So before I came into this company, there was one cleaning standard for every employee doing the car. Right now, we have -- I mean our goal and now we also have like this McDonald's level consistency where the customers are met with exactly the same standard of a clean car, no matter which employee has been with the car. For smoking, we have installed smoke detectors in our cars now. It's actually a revenue generator, but it's toxic revenue as I normally coin it, it's toxic revenue because it's not revenue we want. Of course, we'll take it. But we actually prefer customers not to vape and smoke in our cars. But right now, we can actually -- we can charge customers for that. And that also has a preventive effect so that when customers are starting to find out that we have smoke detectors and when we have given them the first administrative fine on it, it will also discourage them from smoking. And then we have also added AI cameras into our cars, where the cameras can actually detect trash when somebody has left the car and left a McDonald's bag after themselves. So we are addressing this and we're taking it seriously. And the problem is we are not inspecting every car after every rental, right? It's not like the old fashioned car rental industry, where they're inspecting every car. It's -- these cars are left. We might see them every fifth time or every 6 time whatever. So there will be customers who are not as well behaved as we are. You and me, Michael, probably, I hope, that's where we are using technology to mitigate these issues, right? So I think we will see much better results on that. And the second very big chunk of customer complaints that we're getting is actually from parking fines, which essentially has nothing to do with GreenMobility per se. And we have one very big problem on parking fines, to be honest with you. We have some -- especially in Copenhagen, we have some signage from the municipality, that says this parking spot is for a car sharing car. And we are a car sharing company, right? So our customers obviously think they can park on these spots for a car sharing car. Now here's the problem. They cannot park on those. And the reason is they can only park on the ones with the parking signs saying electric car sharing spot. And we've talked to the ministry about this, the transport ministry, those are the ones who are actually deciding on the names and what can be in a signage and we talk to the municipality about it, and it's really, really annoying. And of course, we are talking to the customers. We are communicating it to the customers. Please don't park there. You can park here. We are putting stickers in the cars, we are sending e-mails, newsletters and so on and so forth. But as you know, it's -- sometimes people don't read what you say. So those are the 2, I think, major reasons why we have those reviews. Those are the major triggers about it, and we are taking it seriously, and we are actually working on it. And I think we have a very good mitigation plan for that. I'm sorry for a long, long answer to a short...

No, no, no. I think the customer experience with that many customers is an important part of the equity story. But yes. Well, then let's jump in. I think I have 3 questions here. You did upgrade your guidance. The numbers actually look pretty solid. And if you look at the 9 months, it's ahead of the guidance. So yes, I think I have 3 or 4 different questions saying could there be more guidance upgrades? And why haven't you upgraded here in the quarter.

So as I said before, this company before my time was a committee that -- and everybody knows this. So it's no secret, it was a company that overpromised and under delivered and I think one of my major task here has to be reestablishing the trust from investors. And I'm not basing -- or we are not basing our guidance on gut feelings. We want data. And in this case, should we decide to do anything on our guidance, it will be data driven and not based on hope or whatever. And before we even talk about any guidance adjustments, we simply need to get some more data in to be sure that we can maintain this momentum that we have from Q3 going into Q4. We also see some uncertainties from a competitive point of view that we also need to get some more data on. If you look at Bolt, they're running big campaigns now, you can get a 50% discount on Bolt at the moment. It will take it from downtown Copenhagen to the airport for DKK 117. Well, maybe I shouldn't say this because it's a competitor, right, but you have public transport companies who are spending a lot of taxpayers' money on campaigns for the fall holidays here, DKK 60, you can drive as much as you like to in trains and buses for a whole day. So we are actually waiting for that data on how that is going before we want to make whatever potential adjustments. But for now, it is based on the current data. That is what we are communicating.

And there was actually also a question about, have you seen them run any more, campaigns or it is still the same that I see on the taxi side and we will not mention any more. Are they increasing the pressure or is it the same campaigns that have been running through the year?

So the campaigns are -- it depends on the seasonality. So now we are going into the fall vacation here, the schools fall vacation. I think it's actually starting today. And then you see them become more aggressive, because all of their business customers who are normally taking the taxi of the public customers, of the authorities are spending a lot of money on taxis. They are gone, so they have to fill up the taxis there. So obviously, for these periods, they are a little more aggressive. And again, that's what we're waiting to see what happens in terms of our revenue on that.

Perfect. And then there's a very detailed question. I don't know whether you have given data enough to the market on that. Is the unit economy on the cars, they are talking about revenue, utilization rate and payback period. How have they improved? And what level do you expect to get in the short and long term. I am not sure whether you can talk a little bit -- can tell us about that with you not being publishing it. And if you can, can you talk a little bit about the trend at least on some of these, you might say, these -- so revenue, utilization rate and payback period.

Well, yes, I would really love to talk in details about it, and I can talk for hours about it but not in the meeting around Q3 because that's simply not what is in our information on the Q3. So I'm afraid you have to wait for the full year to talk more details about that. Sorry for being so boring.

It's okay. Is it new customers or existing customers that is driving the growth in this quarter?

That's a good mix, actually. We have a very good intake of customers, which is primarily driven by this data-driven marketing, as I mentioned earlier. We are very successful with our marketing, and we are very much on top of the metrics on the marketing, the customer acquisition, lifetime value and so on and so forth. We are -- if you look in into Google, which is a very important source of new customers. We are positioned better than any of the old fashion car rental companies. We are positioned much better there. We have a super position there. We have even been recognized in awards and so on for being able to be positioned like we are there. So I think that drives a lot. We're also selling more to the existing customers. We have more products on the shelves, so to speak. We are more aggressive in our communication to existing customers. We are much more focused on individual messages to the customers based on their behaviours and so on. So the whole communication is -- has much more of an intelligence to it than it has ever had before.

But this Bolt driving. I don't -- I guess you don't want to comment on 50-50, 60-40 or anything?

No.

Then there's a question here. Do you have more cars in your fleet now than when you went into 2025? How is the fleet developed? And maybe that will also give at least, apparently on the revenue, on the total business, if we know that. So a little bit about the fleet. How is that developing in '25?

Well, it hasn't really developed at all. We had around the same cars throughout the years, 1,400, I say cars. It's actually vehicles. There's been some minor adjustments over the year where we had more vans and fewer cars and -- but it's very minor. So it's very -- it has been very flat throughout the year here.

And also the composition between -- as you said, the vans has been moving up and down, but between premium and so is -- that has been pretty stable?

It's more or less the same. So I mean, if we are seeing an increase on the revenue, it's because we have a better utilization of the current fleet.

Perfect. And then we start to look into next year 2026. It's not a ask of you to guide because that will be weird for you to do, an announcement, or a little bit about the sources of growth? Will it be geographic expansion, new vehicles, similar, more marketing pressure on existing customers and so on. So I know it's still a little bit ahead, but I guess you have started to think about the growth levels for next year also, not telling us how much it's going to be, but the growth levels you are going to try for.

I think the most important thing is that what we want to do and what we have actually created in the company as it is today is that we need to have a healthy growth, a profitable growth in opposition to early on, where there was a different model for the strategy. For me, it's all about making it profitable growth. And there's a lot of -- I said earlier this week as well, and I said it before, we're just getting started with this company. That's what the amazing thing is. Now we have stabilized it. I think we are building muscles now. We are introducing a new platform coming up and so on. And then we are looking into a lot of growth pockets that I can also talk about for hours. So -- but for me, it's all the most important thing, and I think it's important for you to hear from me as well is that we are not going to take some big adventures and going on all sorts of directions. This is a stable good profitable growth, and it's the profitability that underlines everything.

And I will try and push you a little bit. Is it tapping more into the long-term rental market? Is it more use of directed campaigns and giving the drivers to drive more to the new platform, a little bit about -- not the specific, but if you should mention the 2 most important ones, you hope to and I know -- I don't know whether you want to do it, but the growth levels that you want to really, really hope to push on in '26.

Yes. So I think instead of mentioning 2, I think it's important to understand the business like this is that you have a lot of different growth pockets from a lot of different various sources, right? So you have -- we are continuing on that path because that is what we have found. We have been successful on executing on these growth targets, as I -- as you saw before, one of the growth pockets was transforming ourselves during the summer to become a sort of more of a rental company than a car sharing company per se for the longer trips 1, 2, 3 days, 2, 3 weeks, even 4 weeks, we even have customers who take the cars for 4 weeks during the summer. So that is one aspect. Another aspect that we will see, hopefully, a good growth and also some cost savings from is the introduction of a new platform, which will be much more friendly from a customer perspective. Hopefully, we'll also see some revenue management, yield management coming in next year and then a continuation of our operational excellence plan, we are not done yet. We have seen some tremendous increases in our operations. You can see that in our EBITDA. We will continue to improve on that. So we have a lot of good things lined up and it will take years before we have exhausted the current opportunities in the market.

Yes. Then there's a question here who gets more specific on your cost saving on insurance and right depreciation on cars. So specifically what you are expecting to make up cost savings there in '26, I don't know whether you want to already give us some taste of it or wait until the guidance for...

What I can give a taste of is that because we are becoming more and more digitized. I mean we have the cameras, we can prevent more damages. We can also prove more damages. We have the damage -- we have some small computers in the cars now, boxes in the cars that can actually detect damages. We're becoming better and better for every day in terms of getting the money from a damage that a car has caused, it was very difficult before we could actually detect it digitally because we were not inspecting all the cars. You can make -- you could make a damage on a car and then you can leave it and then it would probably, maybe it would be discovered by us or by another customer, 3, 4, 5 trips later. So that's not going to happen today. And we are installing that across the fleet right. And we already have some very good positive impacts from that. When you have that, you can also go out and negotiate better deals with insurance companies, for example. So we have a much better baseline. We can prevent more damages and so on. And that is for the negotiations for the insurance. And obviously, I'm pushing that really hard, and I'm also expecting to see savings on that. I don't want to put an amount to it, but this is what I expect.

Perfect. There's -- actually Bolt doesn't have anything offers to the airport. So you didn't promote someone saying -- you didn't promote.

It depends if you already use one of their -- they're also very personalized in it. but I was actually checking it this morning, and I could get 50%. And I don't -- this is the last time I say you can get 50% with Bolt.

I think we should just -- and then the final question, the liquidity in your share is a little bit limited. I guess it has improved lately with the results also, any thinking on how you might support that better. I know it's also the board, but whether you have made some discussion with the board about how to support the liquidity in this year, getting the information more out to more investors and maybe trying to increase the liquidity and this share.

Yes. I mean, the other day, there were around 85,000 shares traded this week for 1 day. So there is definitely more liquidity in it than it has been early on. So that's one thing. We also very recently introduced a new shareholder program, a shareholder advantage program. I also recommend you -- I should actually have brought that up here. It's a very good question, by the way. But the new and improved shareholder advantage program actually gives the one of you who are owning shares, more than 100 shares, even bigger advantages than you had before. So -- and we are also seeing a tendency before -- what we can actually see is that we are getting more and more shareholders in. So the shareholder base has actually increased in our company significantly, I would say, compared to just 1 year ago. So I think it's good and it's, of course, it's also something that we are discussing and we are planning. And I had earlier this year or earlier this summer, late summer, we were also inviting for an analyst day. We're going to do that again. If anybody wants to speak with me directly, my door is always open, just reach out directly, and I'm happy to sit down and have a meeting, it's a part of my job, and I love to speak to you guys out there. Also on getting your input on our business is always very, very interesting. So just reach out, if you want to sit down and have a chat with me about that.

Let's see whether you now need thousand meeting next week, Kasper, but I think we'll leave you on that note. And say thank you for the audience for listening in, and thank you to you, Kasper, for taking us through your results and getting maybe more deeper into it through a lot of questions. So thank you to all for it.