Publication date: November 7, 2024

We frequently spotlight companies that are innovative, promising and have navigated the cycle of excitement and challenges. Consider JustEatTakeAway and Pharming. We may place the protagonist of this article in the same context; Ebusco. Been through a lot and is ready for the next phase. Interesting!

Short introduction

Ebusco, established in 2012, is a Dutch company specializing in the production of electric buses. Its headquarters are located in Brabant, with additional offices in countries such as China and the United States. Currently, Ebusco has about 700 employees. The largest shareholders are founder Peter Bijvelds and ING Group. The customer group includes the well-known Connexxion and Qbuzz.

Since September of this year, a new CEO has been appointed. The experienced German Christian Schreyer replaces the duo Bijvelds and Peters who were previously at the helm together.

Ebusco has been listed on the Amsterdam Stock Exchange since October 2021. Here is a quick overview of the stock price changes over the past three years!

What caused Ebusco's share price to fall so much?

Expectations were high at the time but several disappointing developments depressed sentiment and confidence. Here are some of the factors behind the downturn in recent years.

Ebusco struggled with significant losses in 2023, with a net loss of €120.1 million and sales of only €102.4 million, much lower than expected. These results were affected by production and supply chain problems, which put pressure on profitability.

Delays in production and supply chain problems prevented many buses from being delivered on time. This led to fines and reversed earnings, which affected financial stability and investor confidence.

Costs, especially due to increased personnel expenses and investments in inventory, proved difficult to manage. Ebusco's cash position declined significantly at the end of 2023, which has raised investor concerns that future financing may come under pressure.

Although Ebusco's order book has grown, revenues are not realized until the delivery of buses. The time between contracting and actual revenue generation can affect cash flow, especially if deliveries are delayed.

Given the current loss and disappointing results, investor sentiment around Ebusco has deteriorated, leading to selling pressure on the stock. There are also macroeconomic concerns about interest rates and economic slowdown that could negatively impact growth stocks such as Ebusco.

In 2024, the company proved unable to deliver 59 buses ordered to Qbuzz. Spare parts were also not delivered, which prevented 10% of Qbuzz's buses from running. Qbuzz claimed an agreed compensation because of the late delivery. When the company failed to pay that compensation, Qbuzz seized €1.2 million from Ebusco's bank accounts. The money was needed for salaries and the buses were almost ready in a factory in China. After the seizure, Ebusco initiated proceedings against Qbuzz, which served in October 2024. Ebusco lost the summary proceedings. The judge ruled that the cancellation of Qbuzz's order was justified, and so was the seizure. Directly after that, Ebusco decided to stop its production and outsource production, especially to China. Without these measures, bankruptcy would be imminent. In slimmed-down form, however, the company could remain active in the design of electric buses.

What is the current situation at Ebusco?

As stated, with the new CEO, there is clearly a breath of fresh air blowing through the troubled company. In addition to the experience Christian Schreyer brings with him, a possible advantage is that he comes from outside the company. This puts him in a better position to make changes to the culture and operations.

Ebusco announced in September 2024 that it plans to raise €36 million in new capital through a rights issue. This capital increase is part of a "turnaround plan" aimed at improving the company's operational and financial performance. The capital raised will be used to address production issues and get Ebusco back on a profitable path. The plan was recently presented to investors and confidence has now been expressed. Within the plan, consolidation from 5 shares to 1 share has also been introduced. This is to improve the marketability and appearance of the share.

This plan is part of Ebusco's broader efforts to strengthen its liquidity position and get production back on track, which is critical to ensuring the company's continuity and growth.