WashTec AG — Interim / Quarterly Report 2007

Nov 6, 2007

washtec ag – Report on the Period from January 1 to September 30, 2007

Dynamic Revenue Growth in the Third Quarter:

• After three quarters revenues exceed EUR 200m for the first time (EUR 200.1m; prior year: EUR 190.2m)
• EBIT at EUR 17.2m (prior year: EUR 16.0m)
• Stock options granted and share buy-back program started
• Goals 2010 announced on 1st investor day

		Jan. 1 to Sept. 30, 2007	Jan. 1 to Sept. 30, 2006	Change
Revenues	EUR m	200.1	190.2	9.9
EBITDA	EUR m	22.9	21.1	1.8
EBIT	EUR m	17.2	16.0	1.2
EBIT adjusted for non-recurring effects	EUR m	16.6	19.5	–2.9
EBT	EUR m	14.3	13.2	1.1
Investments	EUR m	–7.9	–22.3	14.4
Cash paid for acquisitions	EUR m	–3.9	–16.2	12.3
Employees as of Sept. 30		1,547	1,437	110
Earnings per share*	EUR	0.36**	0.52	–0.16
Net cash flow	EUR m	11.3	11.3	0.0

* diluted = basic; number of shares: 15,200,000

**non recurring effect due to write-down of deferred tax assets (EUR 3.3m) because of German tax reform

Interim Management Report (Unaudited)

1. Results of Operations, Financial Position and Net Assets

Due to a dynamic third quarter, WashTec's revenues exceeded EUR 200m for the first time in September 2007 (EUR 200.1m, prior year EUR 190.2m). This corresponds to revenue growth of EUR 9.9m or 5.2%, year on year. In the third quarter alone, revenues rose by 10.0% on the prior year. Revenues in the European core markets were well above the prior-year level after being slightly below at the halfyear mark. Southern and Eastern European markets contributed strongly in the revenue growth. In Northern America revenues increased EUR 4.1m to EUR 21.9m (up 23.0%) in the first three quarters.

EBT amounted to EUR 14.3m year to date, compared to EUR 13.2m in the prior year. EBIT increased from EUR 16.0m to EUR 17.2m, improving the EBIT margin to 8.6% for the first nine months (2006: 8.4%). The management board is still aiming for an EBIT margin increase to at least 10% in 2007 (2006: 9.5%).

Operating net-cash flow of EUR 11.3m stayed on prior year level (2006: EUR 11.3m).

In the US, sales and service activities were further expanded with the takeover of the distributor in Texas and the start of own activities in New England during the third quarter.

The stock option and share buy-back plans were implemented in the third quarter. On July 23, 767,000 options were granted to the management board and the first level of management at an issue price of EUR 15.34. The options may be exercised after a waiting period of two years if the share price increases by 20%. On September 17, 2007, the management board announced the implementation of the share buyback program. The Company intends to acquire up to 800,000 of its own shares until November 21, 2008. The share buy-back shall, amongst others, be used to cover the stock options granted and thus avoid a potential dilution. The current status of the share buy-back program can be viewed at www.washtec.de/Investor Relations.

WashTec organized its first »Investor Day« at the company's headquarters in Augsburg in September. At this event, WashTec presented its strategy – including financial goals 2010 – to investors and analysts from Germany, France, Switzerland, Italy and the UK. A summary of the company presentation may be downloaded at www.washtec.de/Investor Relations.

Dynamic company performance in the third quarter: revenue growth of 10.0%.

US: Sales and service activities further expanded.

1.1 Economy and Market

The economic situation in Germany and Europe remains positive, even though it has slowed down due to the mortgage crisis in the US. Experts forecast continued positive economic performance for Europe in 2008. By contrast, economic growth in the US is expected to further slow down.

The short-term investment behaviour in the car wash business, however, only has a limited correlation to the development of the general economic conditions. Investment decisions in car wash systems are usually made depending on the age of the machinery and the respective number of washes. The number of washes is usually more dependent on weather conditions or drastic changes in gasoline prices than the general economic situation.

The corporate income tax reform was adopted in Germany in July 2007. The related tax relief will improve the overall competitiveness of companies operating in Germany. WashTec corporate tax rate will decrease from approx. 40% to about 32% from 2008 going forward after an extraordinary burden due to the write-down of deferred tax assets in the current fiscal year.

The depreciation of the US dollar against the Euro only had some effects in the area of financing but not on WashTec's operations since the majority of WashTec's contracts is denominated in Euros. Almost all products for the US market are assembled in the US. Therefore only a low proportion of materials for Mark VII is sourced from Europe. However, due to the exchange rate, the increase of operating revenues in US dollars (+32.3%) is significantly higher than that disclosed in Euros (+23.0%).

The competitive conditions have not changed compared with those presented in the management report for 2006. There have been no major changes in technology.

1.2 Business and Earnings Situation

Revenues by region

in EUR m	Jan. 1 to	Jan. 1 to	Jul. 1 to	Jul. 1 to
	Sep. 30, 2007	Sep. 30, 2006	Sep. 30, 2007	Sep. 30, 2006
Germany	67.3	67.4	23.0	22.9
Rest of Europe	108.3	101.5	39.2	32.3
North America	21.9	17.8	7.6	7.4
Rest of world*	2.6	3.5	1.0	1.7
Total	200.1	190.2	70.8	64.3

* Mainly Asia and Australia

Increase of revenue in US dollars higher than that disclosed in Euros.

in EUR m	Jan. 1 to	Jan. 1 to	Jul. 1 to	Jul. 1 to
	Sep. 30, 2007	Sep. 30, 2006	Sep. 30, 2007	Sep. 30, 2006
Machines	125.8	125.1	46.1	42.5
Spare parts, service	60.1	55.3	20.5	19.0
Used machines	3.3	2.8	1.2	0.9
Chemicals	7.3	5.2	2.2	1.4
Accessories	1.9	1.4	0.8	0.4
Cleaning Technology segment	198.4	189.8	70.8	64.2
Systems Business segment	2.5	2.7	0.8	0.8
Consolidation	–0.8	–2.3	–0.8	–0.7
Total	200.1	190.2	70.8	64.3

Revenues by segment

Revenues of the WashTec Group increased by EUR 9.9m (5.2%) to EUR 200.1m compared to the EUR 190.2m achieved in the prior year. In the third quarter alone, revenues increased by 10.0%.

Revenues in Germany were at prior-year level in the third quarter with revenues of EUR 23.0m (prior year: EUR 22.9m). Adjusted for revenues from the discontinued train wash business totaling EUR 1.1m in 2006, revenues for the first nine months increased slightly.

Revenues in the rest of Europe grew at a dynamic pace in the third quarter and reached EUR 108.3m by September 30, 2007 (prior year: EUR 101.5m), with revenues in Southern and Eastern Europe continuing to grow at a high rate. Delayed investments of the major customers in the first half of the year were over-compensated in the third quarter.

The positive revenue development in Northern America continued in the third quarter. At EUR 21.9m, revenues increased by EUR 4.1m compared to the prior year (2006: EUR 17.8m). Revenues grew mainly due to the continuing positive development of friction car wash systems and the expansion of direct business.

The subsidiary WesuRent Carwash Marketing GmbH, whose revenues are reported in the Systems Business segment, reported steady revenues in the third quarter, but was not able to compensate the weather-driven lower wash numbers of the first half of the year. Furthermore, results were impacted by investments made for the future expansion of this business segment.

in EUR m	Jan. 1 to	Jan. 1 to	Jul. 1 to	Jul. 1 to
	Sep. 30, 2007	Sep. 30, 2006	Sep. 30, 2007	Sep. 30, 2006
EBITDA	22.9	21.1	10.6	10.1
EBIT	17.2	16.0	8.7	8.2
EBIT adjusted for non-recurring effects	16.6	19.5	8.3	8.2
EBT	14.3	13.2	7.7	7.2

Earnings

At 22.9m, EBITDA increased by EUR 1.8m year on year (2006: EUR 21.1m).

Domestic revenues and revenues in the core markets in the rest of Europe slightly above prior year.

Positive development in Northern America continues. Prior-year figures include non-recurring expenses of approx. EUR 3.5m (mainly from phantom stocks). The result of the current year includes a positive non-recurring effect of EUR 0.6m. It is primarily attributable to the final liquidation of the Canadian company (SSI) and the final purchase price adjustments of acquisitions. The decrease in earnings adjusted for non-recurring effects in the first nine months is attributable to investments into growth areas and additional efficiency projects, which are set to deliver positive contributions to earnings in the medium term. The operating result (EBIT) adjusted for non-recurring effects in the third quarter stood at EUR 8.3m which is a slight increase compared to the prior-year figure (EUR 8.2m).

At 58.1%, the gross profit margin in the first three quarters was below the prioryear level (2006: 59.6%). The main reason for the decrease of the gross profit margin is the increased revenue contribution by Mark VII and the Southern European companies, which due to their different sales structures and market conditions achieve lower margins than the WashTec Group in the European core markets.

Operating result above prior year in the third quarter.

Headcount increased by 110 as a result of the expansion of the sales and services networks in Southern Europe and the US.

At EUR 63.2m, personnel expenses were down on the prior year (EUR 64.5m). In 2006, personnel expenses included non recurring expenses of EUR 4.0m for the expired phantom stock program. The increase, adjusted for the non-recurring effects, is mainly attributable to the higher number of employees due to the expansion of the sales and services networks in Southern Europe and the US. The number of employees increased by 110 to 1,547 in the last 12 months.

The new stock options granted result in annual expenses of approx. EUR 0.9m which are included in the personnel expenses and accounted pro rata over the waiting period of the options.

At EUR 29.7m, other operating expenses increased by EUR 2.3m compared to EUR 27.4m in the prior year. This increase can mainly be attributed to restructuring costs associated with the takeover and integration of Motor Mediterraneo S.A., Spain, costs in connection with the additional sales and service activities in the US as well as start-up and planning costs for further projects on growth and efficiency.

Depreciation amounted to EUR 5.6m, an increase of EUR 0.5m compared to EUR 5.1m reported in the prior year period. This increase is mainly due to the depreciation of investments in connection with the plant restructuring projects in Germany and the US.

Finance costs were up slightly from EUR 2.9m to EUR 3.0m, mainly due to the increase in the interest rates. In summary, EBT in the first three quarters increased from EUR 13.2m to EUR 14.3m. As a result of the tax reform which came into effect in July, deferred tax assets had to be written down by EUR 3.3m in the third quarter. After deducting taxes of EUR 8.9m, net profit amounted to EUR 5.4m (prior year: EUR 7.9m). Earnings per share (diluted = basic) were at EUR 0.36 (prior year: EUR 0.52).

Balance Sheet

Assets in EUR m	Sep. 30, 2007	Dec. 31, 2006
Non-current assets	115.8	124.7
thereof deferred tax assets	18.1	24.8
Current assets	89.1	83.0
thereof trade receivables	38.7	41.8
thereof inventories	40.5	34.0
thereof other assets	4.5	2.8
thereof cash on hand	4.2	3.0
thereof prepaid expenses	1.2	1.3
Assets held for sale	3.1	1.1
Total assets	208.1	208.8

Special write-down charged on the deferred tax assets as a result of the tax reform.

Rounded-off to EUR k, rounding differences are possible.

Deferred tax assets decreased due to the depreciation following the German tax reform and the positive result from EUR 24.8m at the end of 2006 to EUR 18.1m as of September 30, 2007.

Inventories increased from EUR 34.0m to to EUR 40.5m as of September 30, 2007. Key drivers are the expansion of direct business in Southern Europe and the US as well as the reorganisation of spare part logistics in Europe.

Trade receivables decreased from EUR 41.8m as of December 31, 2006 to EUR 38.7m mainly due to seasonality.

Other assets were up from EUR 2.8m to EUR 4.5m driven by the recognition of hedging instruments and cash in transit.

In Q3 part of the real estate property in Augsburg, reported as assets held for sale, was sold at book value (EUR 2.0m). Payment and transfer of title will take place in Q4.

Equity and Liabilities in EUR m	Sep. 30, 2007	Dec. 31, 2006
Equity	66.6	61.7
Liabilities to banks	59.8	57.3
Other liabilities and provisions	76.0	82.9
thereof trade payables	14.8	11.4
thereof provisions	28.0	31.3
Deferred income	5.7	6.9
Total equity and liabilities	208.1	208.8

Rounded-off to EUR k, rounding differences are possible.

Equity increased to EUR 66.6m (as of December 31, 2006: EUR 61.7m) due to the positive results. The acquisitions in Spain and in the US lead to slightly increased liabilities to banks of EUR 59.8m as of September 30, 2007 (December 31, 2006: EUR 57.3m).

Equity ratio as of September 30, 2007: 32.0%.

Trade payables increased from EUR 11.4m as of December 31, 2006 to EUR 14.8m essentially driven by higher purchasing volumes and the related increase in inventories as of the balance sheet date.

Provisions decreased from EUR 31.3m to EUR 28.0m over the last 9 months due to usage and the release of provisions built for the earn-out portion of the Mark VII purchase price.

Cash Flow Statement

Cash flows from operating activities (net cash flow) reached prior year level with EUR 11.3m in the first three quarters of 2007 (EUR 11.3m in 2006).

Cash flows from investing activities amounted to EUR 7.9m, compared to the EUR 22.3m achieved in 2006. The focus of investments in the current year was on the acquisition of dealers in Spain and the US as well as replacement investments in Europe. In 2006 the acquisition of Mark VII Equipment in the US had been the main investment.

Cash and cash equivalents increased overall by EUR 1.5m to EUR 3.1m as of September 30, 2007 compared to January 1, 2007.

Employees

Headcount rose by 110 to 1,547 in comparison to September 30, 2006 due to the acquisition in Spain and the expansion of direct sales in the US. In comparison with December 31, 2006, this is an increase of 96 employees.

The WashTec Stock

Management was in continuous contact with journalists and the financial community in the first three quarters. Numerous conference calls and meetings with analysts and investors took place as part of roadshows and on-site visits.

On September 19, 2007, the first »WashTec Investor Day« for investors and analysts took place in Augsburg, Germany. In addition to a plant tour, which gave a look at the product portfolio and the production facilities in Augsburg, guests from Germany, France, Switzerland, Italy, and the UK were provided with a detailed overview of the strategic and financial goals of WashTec up to 2010.

The WashTec stock is currently covered by Berenberg, Cazenove, HVB, HSBC Trinkaus & Burkhardt, Merrill Lynch and MM Warburg. JP Morgan, Cazenove, and Merrill Lynch renewed their buy recommendations after the Investor Day. Five banks have issued buy recommendations in their latest publications.

Threadneedle sold its investment in WashTec AG in the third quarter. Powe Capital Management increased its shareholding to 16.1%. On October 16, 2007, Tocqueville Finance, France, reported that its shareholding increased to 3.93%. The current shareholder structure breaks down as follows:

On the first »WashTec Investor Day« guests from Germany, France, Switzerland, Italy, and the UK were provided with a detailed overview of the strategic and financial goals 2010.

Shareholding in %	Oct. 16, 2007
Cycladic Capital Management LLP.	21.0
Powe Capital Ltd.	16.1
IED – International Equity Development GmbH & Co. KG	8.9
Julius Baer Investment Funds Services Ltd.	5.9
Tocqueville Finance SA	3.9
Free float	44.2

* Source: notifications pursuant to the German Securities Trading Act ["Wertpapierhandelsgesetz": WpHG]

The price of the WashTec stock fell to EUR 13.30 as of September 28, 2007 compared to the year-end price 2006 of EUR 13.84, following the downward trend of the markets.

Events After the End of the Reporting Period

No significant events occurred after the end of the reporting period.

2. Forecast

The management board is still aiming for an EBIT margin increase to at least 10% with moderate growth for the current fiscal year. The new markets in the US and Southern Europe are major drivers for the current revenue growth with little or no contribution to earnings at the moment.

WashTec's aim is to take up a leading position as a full-service provider for car wash systems in all major global markets. Further acquisitions may also be made in this context. As part of strategic planning, country-specific strategies were adopted for all focus markets worldwide.

The expansion of the offerings, especially in the core European markets with high market shares, is a major part of the strategy. It includes, amongst others, the expansion of offerings and services around the complete value chain of operation of vehicle wash systems including chemicals, financing and marketing support. In addition, efficiency projects are a major component of the WashTec strategy in order to further improve WashTec's competitive edge. The establishment of a sourcing organization in Asia is one component of the strategy.

The management board is aiming for revenue growth of 4% to 7% p.a. and additional increases in the EBIT margins to 12% and 14% by 2010.

3. Opportunities and Risks Relating to Future Development

There were no major changes in comparison to the opportunities and risks presented in the annual report for 2006.

Medium-term planning 2010: EBIT margin of 12–14%, revenue growth of 4–7% p.a.

Tocqueville Finance increases to 3.9%.

Consolidated Income Statement (unaudited)

	Jan.1 to	Jan.1 to	Jul.1 to	Jul.1 to
	Sep.30,2007	Sep.30,2006	Sep.30,2007	Sep.30,2006
	EUR k	EUR k	EUR k	EUR k
Revenues	200,099	190,189	70,774	64,321
Change in inventories	3,271	2,402	1,652	–854
Own work capitalized	287	351	57	125
Other operating income	3,694	3,025	1,787	498
Total	207,351	195,967	74,270	64,090
Cost of materials	90,996	82,537	32,976	25,412
Personnel expenses	63,203	64,473	20,495	19,223
Other operating expenses	29,748	27,364	10,012	9,183
Amortization, depreciation and impairment losses	5,614	5,093	1,925	1,863
Other taxes	545	456	172	160
Total operating expenses	190,106	179,923	65,580	55,841
Operating result (EBIT)	17,245	16,044	8,690	8,249
Financial result (net financial expenses)	2,982	2,866	1,002	1,032
Result from ordinary activities (EBT)	14,263	13,177	7,688	7,217
Income taxes	–8,859	–5,231	–6,282	–2,847
Consolidated result	5,404	7,946	1,406	4,370
Earnings per share (diluted = basic)	EUR 0.36	EUR 0.52	EUR 0.09	EUR 0.29

Consolidated Balance Sheet (unaudited)

Assets	Sep. 30,	Dec. 31,
	2007	2006
	EUR k	EUR k
Non-current assets
Intangible assets	61,511	61,215
Property, plant and equipment	36,133	38,471
Financial assets	25	173
	97,669	99,858
Deferred tax assets	18,126	24,839
Non-current receivables and other assets	32	32
Total non-current assets	115,827	124,730
Current receivables
Inventories	40,558	34,020
Trade receivables	38,728	41,842
Other assets	4,544	2,762
	83,830	78,624
Cash on hand and bank balances	4,168	3,045
Prepaid expenses	1,150	1,327
Total current assets	89,148	82,996
Non-current assets held for sale	3,127	1,110
Total assets	208,102	208,836

Equity and liabilities	Sep. 30,	Dec. 31,
	2007	2006
	EUR k	EUR k
Equity
Subscribed capital	40,000	40,000
Capital reserves	44,392	44,338
Other reserves	–484	124
Loss carryforward	–22,734	–35,236
Profit for the period	5,404	12,502
	66,577	61,728
Non-current liabilities
Financial liabilities to banks	51,097	48,226
Other liabilities	4,133	5,049
Non-current provisions	13,114	13,474
Total non-current liabilities	68,345	66,749
Current liabilities
Financial liabilities to banks	8,722	9,024
Trade payables	14,797	11,389
Payments received on account of orders	2,825	5,951
Current provisions	14,924	17,797
Other liabilities	26,210	29,269
Deferred income	5,701	6,929
Total current liabilities	73,180	80,359
Total equity and liabilities	208,102	208,836

Consolidated Cash Flow Statement (unaudited)

	Jan. to Sep.	Jan. to Sep.
	2007	2006
	EUR k	EUR k
Result from ordinary activities (EBT)	14,263	13,177
Reconciliation of profit and cash inflow/outflow from ordinary activities
Write-downs non-current assets	5,614	5,093
Profit/loss from the disposal of non-current assets	–389	–856
Interest and similar income	–674	–387
Interest and similar expenses	3,656	3,253
Change in non-current provisions	–360	–768
Increase/decrease in trade receivables	5,099	–3,408
Increase/decrease in inventories	–5,886	183
Increase/decrease in trade payables	3,359	181
Change in other net current assets	–11,344	–3,221
Income taxes paid	–2,080	–1,928
Net cash flows from operating activities (net cash flow)	11,259	11,319
Cash paid for investments in non-current assets	–4,009	–8,812
Cash received for the disposal of non-current assets	1,100	2,691
Cash paid for the acquisition of equity investments less acquired funds	–4,981	–16,165
Net cash flows used in investing activities	–7,889	–22,286
Repayment of subordinated loan	0	–1,836
Net non-current loans raised	2,474	9,390
Interest paid	–2,982	–2,866
Repayment of non-current liabilities from finance leasing	–1,233	–1,287
Cash inflow/outflow from financing activities	–1,741	3,401
Net increase/decrease in cash and cash equivalents	1,628	–7,566
Adjustment for currency differences	–127	0
Cash and cash equivalents as of Jan.1	1,570	6,856
Cash and cash equivalents as of Sep.30	3,071	–710

Statement of Changes in Equity (unaudited)

	Subscribed capital	Capital reserve	Accumul. loss	Other reserves	Exchange effects	Total
As of December 31, 2005	40,000	44,338	–35,236	–692	871	49,281
Income and expenses
recognized directly in equity				569	–352	217
Taxes on transactions recognized
directly in equity				–272		–272
Consolidated profit for the period			12,502			12,502
As of December 31, 2006	40,000	44,338	–22,734	–395	519	61,728
Earnings recognized directly
in equity				432	–1,050	–618
Taxes on transactions recognized
directly in equity		–167		9		–158
Share-based remunerations		221				221
Consolidated profit for the period			5,404			5,404
As of September 30, 2007	40,000	44,392	–17,330	46	–530	66,577

Rounded-off to EUR k, rounding differences are possible.

Segment Report from January 1 to September 30, 2007 (unaudited)

	Cleaning Technology		Systems		Consolidation		Group
	2007	2006	2007	2006	2007	2006	2007	2006
	EUR k	EUR k	EUR k	EUR k	EUR k	EUR k	EUR k	EUR k
Revenues	198,350	189,798	2,542	2,733	–793	–2,343	200,099	190,189
Other income	3,979	3,376	2	0	0	0	3,981	3,376
EBIT	17,497	16,772	145	443	–397	–1,172	17,245	16,044
Income from interest
and financial assets	674	387	0	0	0	0	674	387
Interest and similar expenses	–3,478	–3,109	–178	–144	0	0	–3,656	–3,253
Profit/loss from ordinary activities	14,693	14,050	–33	299	–397	–1,172	14,263	13,177
Income taxes							–8,859	–5,231
Consolidated net profit for the period							5,404	7,946

General

Accounting Policies

The quarterly report has been prepared in accordance with the International Financial Reporting Standards (IFRS) applicable as of September 30, 2007. The accounting policies have not changed in comparison to those applied in the consolidated financial statements as of December 31, 2006.

To improve the clarity and readability of the balance sheet, income statement and cash flow statement of the WashTec Group, individual items have been grouped.

Consolidated Group

In comparison to the consolidated financial statements as of December 31, 2006, the consolidated group now includes Motor Mediterraneo S.A., Spain, which was acquired in January.

Balance Sheet/Equity

WashTec AG's capital stock amounted to EUR 40m as of September 30, 2007 and was divided into 15,200,000 shares.

Earnings per Share

Earnings per share are calculated by dividing the net consolidated result by the number of shares:

	Sep. 30, 2007	Sep. 30, 2006
Net result	EUR 5.4m	EUR 7.9m
Number of shares	15,200,000	15,200,000
Earnings per share*	EUR 0.36**	EUR 0.52

* diluted = basic, ** one time impact due to write down of deferred tax assets (German tax reform, EUR 3.3m)

Information on the Parent Company

WashTec AG does not have any operations of its own. It is the ultimate group parent company. WashTec AG has a management board and performs group controlling and risk management functions; it also has a legal department. It provides advisory services in the areas of legal services, finance, marketing, development and production. WashTec AG's most important assets are its direct and indirect investees offering advisory services, which largely shape its result. As of September 30, 2007, WashTec AG had 4 employees.

Financial Calendar

Analysts Conference/	November 12 to 14, 2007/
Equity Forum	WashTec Presentation

Annual Report for 2007 March 31, 2008 Shareholder Meeting 2008 May 8, 2008

Analysts Conference/ November 12 to 14, 2007/ November 14, 2007

Contact

WashTec AG Argonstrasse 7 86153 Augsburg Telephone: +49 821 5584-0 Fax +49 821 5584-1135 www.washtec.de washtec@washtec.de