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WashTec AG Interim / Quarterly Report 2024
483_ip_2024-11-06_4a288c67-148c-44dd-817d-bf60198b8d4a.pdf
Interim / Quarterly Report
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Michael Drolshagen (CEO) | Andreas Pabst (CFO)
Board of Management WashTec AG
November 6th, 2024
Sharpening our strategy - from machine supplier to ecosystem
Sharpening our organization for perfect fit to business needs
Schematic illustration of a global matrix organization
Besides our segments - in the regions Europe and others as well as North America we will implement Business Lines to strengthen our approach to the market.
The Business Lines are:
- Equipment
- Equipment Services
- Consumables (Chemicals)
Besides those business lines, we will focus on Operator Services
What are our key focus items in Europe
*1) New Rollover: Smart Care \& SoftcareSE
SmartCare is fully fledged \& digitalized.
SoftcareSE has similar pricing like former EasyWash with higher functionality.
Based on our platform ramp up period has started succesfully.
SoftcareSE will not offer full range of digital features.
$>$ Our sales funnel is currently on track as expected.
*2) AUWA Chemicals - CHEM-IN-A-BOX / New smart chemical packaging
CHEM-IN-A B0X
AUWA cleaning and care chemicals in new packaging
Environmentally friendly - safe - comfortable
AUWA CHEM-IN-A-BOX is an innovative packaging concept in which the washing chemicals are packaged in a 10-litre plastic bag with an integrated closure - enclosed in a cardboard box. This means that your washing chemicals are packaged safely, sustainably and efficiently.
*2) AUWA Chemicals - MagicCare
Coming soon: A new dimension of car care - AUWA MagicCare
Special ingredients actively form a 3D cross-linked layer with exceptional properties
It delivers best-in-class protection, shine, and color enhancement, building a protective layer that strengthens with each wash - delivering advanced Hydrophobic Properties plus enhances water-repellency and waterproofing
MagicCare provides visible and tangible, long-lasting protection for clear coat surfaces against environmental factors like UV radiation, insects, road salt, and more
The repair and easy-to-clean effects become visibly apparent, delivering a WOW factor that not only makes the car shine but also leaves a lasting impression on drivers
*3) Contractual development \& reseller agreement of SuperOperator and WashTec are signed
$+$
Contractual development \& reseller agreement are signed
What are our key focus items in North America
Car Wash Alliance at Sema Show in Las Vegas
Car Wash Alliance
- Official brand launch at the SEMA trade fair in Las Vegas (5 - 8 November 2024).
- MarkVII will operate on the US market under the new brand:
'Car Wash Alliance - The chemistry that bonds'.
12 | Financial Statement Q3 2024 | WashTec AG
NOVEMBER 5-8, 2024
LAS VEGAS CONVENTION CENTER LAS VEGAS, NEVADA
(1) WashTec
2.6\% higher EBIT on lower revenue
| Q1-Q3 | $\begin{gathered} \text { Q1-Q3 } \ 2024 \end{gathered}$ | $\begin{gathered} \text { Q1-Q3 } \ 2023 \end{gathered}$ | Change | ||
|---|---|---|---|---|---|
| absolute | in \% | ||||
| Revenue | €m | 334.2 | 356.7 | $-22.5$ | $-6.3$ |
| EBIT | €m | 27.6 | 26.9 | 0.7 | 2.6 |
| EBIT margin | \% | 8.2 | 7.5 | - | 70 bp |
| Net income | €m | 17.4 | 16.9 | 0.5 | 3.0 |
| Number of shares in circulation | units | 13,382,324 | 13,382,324 | 0 | 0 |
| Earnings per share | € | 1.30 | 1.26 | 0.04 | 3.0 |
| Free cash flow | €m | 25.0 | 26.8 | $-1.8$ | $-6.7$ |
| Net cash outflow from investing activities | €m | 6.6 | 13.5 | $-6.9$ | $-51.1$ |
| Equity ratio | \% | 26.7 | 26.7 | - | 0 bp |
| Employees at reporting date | people | 1,745 | 1,767 | $-22$ | $-1.2$ |
- Revenue down on prior year
WashTec generated revenue of $€ 334.2 \mathrm{~m}$ in the first nine months, down $6.3 \%$ on the prior year ( $€ 356.7 \mathrm{~m}$ ). This was mainly the result of lower sales of equipment, primarily in the direct sales business and to key accounts in North America.
- EBIT above prior year
Due to the improved gross profit, EBIT in the first nine months, at $€ 27.6 \mathrm{~m}$, was higher than in the prior year ( $€ 26.9 \mathrm{~m}$ ) despite the lower revenue. The EBIT margin improved in the first nine months to $8.2 \%$ (prior year: $7.5 \%$ ).
- Free cash flow slightly below prior year
Free cash flow for the first nine months, at $€ 25.0 \mathrm{~m}$, was lower than the prior year ( $€ 26.8 \mathrm{~m}$ ), mainly due to the increase in net operating working capital relative to December 2023.
- Guidance for full year 2024
The WashTec Group confirms the guidance for fiscal year 2024 and expects revenue on a similar level to the prior year ( $\pm 3 \%$ ) and an increase in EBIT in the mid single-digit percentage range. WashTec currently expects revenue to be at the lower end of the guidance range.
Third-quarter EBIT margin of 9.6\% at same level as prior year
| Q3 | Q3 2024 | Q3 2023 | Change | ||
|---|---|---|---|---|---|
| absolute | in \% | ||||
| Revenue | €m | 114.1 | 120.4 | $-6.3$ | $-5.2$ |
| EBIT | €m | 10.9 | 11.5 | $-0.6$ | $-5.2$ |
| EBIT margin | \% | 9.6 | 9.6 | - | 0 bp |
| Net income | €m | 6.7 | 7.2 | $-0.5$ | $-6.9$ |
| Number of shares in circulation | units | 13,382,324 | 13,382,324 | 0 | 0 |
| Earnings per share | € | 0.50 | 0.54 | $-0.04$ | $-6.9$ |
bp: basis point (1/100th of a percentage point)
- Third-quarter revenue down on prior year
Following a $6.8 \%$ revenue decline the first half-year, third-quarter revenue was down $5.2 \%$. The revenue generated was $€ 114.1 \mathrm{~m}$ (prior year: $€ 120.4 \mathrm{~m}$ ). This mainly resulted from a weak course of business in North America in both the key accounts business and the direct sales business.
- Third-quarter EBIT down on prior year
EBIT was down $€ 0.6 \mathrm{~m}$ in the third quarter to $€ 10.9 \mathrm{~m}$ (prior year: $€ 11.5 \mathrm{~m}$ ). Due to a further increase in gross profit in the third quarter, the third-quarter EBIT margin, at $9.6 \%$, was on a par with the prior-year quarter ( $9.6 \%$ ).
Long-term Group revenue and earnings
- 5-years perspective we need to take into consideration that 2020 was the Covid year.
- Compared to 2022 based on similar revenues level for first nine months we continue to improve the profitability of the company with a yearly improvement of EBIT and EBIT ratio from $6.7 \%$ to now $8.2 \%$.
Revenue and EBIT Q3 in $€ \mathrm{~m}$, multi-year comparison
- Similar picture in comparison of Q3/22 with Q3/24: slightly lower revenues (-3.8\%) with significant higher EBIT (+12.3\%); EBIT margin now at $9.6 \%$.
Q1-Q3 and Q3 revenue by region
Revenue by region in $€ \mathrm{~m}^{*}$ Q1-Q3
- Europe and other: Revenue adjusted by China effect (part of the group in 2023) is on the level of prior year and is still impacted the weak first quarter, which saw difficult market conditions, particularly in the direct sales business, and a weather-related fall in carwash volumes in the Chemicals business.
- North America: Both the direct sales business and the key account business were down in the first nine months, mainly due to the lower order backlog at the beginning of the year and the weak level of orders received from key accounts in the first few months.
- Cross-segment consolidation effects are disregarded.
Percentage change relative to comparative period.
** Comparative information prepared on the basis of the modified reporting structure applicable from January 1, 2024.
Revenue by region in $€ \mathrm{~m}^{*} \mathrm{Q} 3$
- Europe and other: Revenue performance in the third quarter was positively influenced by key account business, whereas direct sales business fell short of the prior year. Adjusted for the revenue of $€ 1.7 \mathrm{~m}$ generated last year by the Chinese subsidiary, revenue was on a par with the prior year.
- North America: Short fall in revenues mainly due to the lower order backlog at the beginning of the year and the weak level of orders received from key accounts in the first months. Order intake increased in the third quarter compared to the prior year.
Q1-Q3 and Q3 EBIT by region
EBIT by region in $€ \mathrm{~m}^{*}$ Q1-Q3
- Europe and other: EBIT improvement mainly due to efficiency programs to optimize production costs and to the prior-year sales price increases.
- North America: EBIT decrease is driven by lower revenue. The measures implemented last year to increase profitability in this region on a lasting basis meant that EBIT was positive despite the significantly lower revenue.
- Cross-segment consolidation effects are disregarded.
Percentage change relative to comparative period.
** Comparative information prepared on the basis of the modified reporting structure applicable from January 1, 2024. EBIT at the subsidiary in China, which was still part of the WashTec Group in the prior-year period, totaled $€=0.5 \mathrm{~m}$.
EBIT by region in $€ \mathrm{~m}^{*}$ Q3
- Europe and other: EBIT on prior year level. EBIT-ratio improved from 10.1\% up to $10.3 \%$.
- North America: EBIT decrease is driven by lower revenue.
Revenue by product
| Revenue by product Q1-Q3 | ||||
|---|---|---|---|---|
| in $€ \mathrm{~m}$ | Q1-Q3 2024 |
Q1-Q3 2023 |
Change | |
| absolute | in \% | |||
| Equipment and service | 281.3 | 301.5 | $-20.2$ | $-6.7$ |
| Chemicals | 48.4 | 51.2 | $-2.8$ | $-5.5$ |
| Others | 4.6 | 4.0 | 0.6 | 15.0 |
| Total | 334.2 | 356.7 | $-22.5$ | $-6.3$ |
| Revenue by product Q3 | ||||
| in $€ \mathrm{~m}$ | Q3 2024 | Q3 2023 | Change | |
| absolute | in \% | |||
| Equipment and service | 97.9 | 104.6 | $-6.7$ | $-6.4$ |
| Chemicals | 14.6 | 14.5 | 0.1 | 0.7 |
| Others | 1.6 | 1.3 | 0.3 | 23.1 |
| Total | 114.1 | 120.4 | $-6.3$ | $-5.2$ |
- Equipment and service: Direct sales down to previous year due to weak order backlog at the beginning of the year and lower order intake in the first months. Key Accounts sales in North America significant below previous year in Europe positive development compared to previous year.
- Chemicals: Year to date decrease mainly due to a weatherrelated fall in carwash volumes primarily in the first quarter. In addition, the prior year saw increased deliveries to newly acquired major customers in connection with the initial stocking of their chemical inventories. In the third quarter revenues are back on previous year level.
Q1-Q3 EBIT bridge
NOWC, free cash flow, net financial debt, equity ratio
- NOWC on the prior year level. The increase compared to the end of 2023 is mainly due to the usual rise in inventories at the beginning of the year and an ordersdriven build-up of finished goods inventories as part of optimizing the production process.
- FCF decrease is mainly due to the development of net operating working capital. In 2023, this mainly involved the positive effects from the reduction in inventories and the reduction in receivables following the record revenue in the fourth quarter of 2022.
- Net financial debt on previous year level
- Equity ratio stable at $26.7 \%$
Development of order backlog
- After Q2/24 also Q3/24 with increasing order intake compared to previous year
- Order Backlog 30/9/24 in Europe and other as well as in North America above previous year level
- Also, from a long-term perspective high order backlog level (compared to year-end 2020 at 181\%)
Guidance 2024
| 2023 | Guidance 2024 | |
|---|---|---|
| Revenue | $€ 489.5 \mathrm{~m}$ | $+/-3 \%$ to PY - currently expects to be at the lower end of the guidance range |
| EBIT | $€ 41.9 \mathrm{~m}$ | Increase in mid-single-digit percentage range |
| Free Cash Flow | $€ 46.1 \mathrm{~m}$ | $€$ m 30-40 |
| ROCE | $21.5 \%$ | $\pm 1$ percentage point |
This forecast is fundamentally subject to uncertainties. These can result, for example, from a possible escalation of the conflicts in Ukraine and the Middle East, a significant deterioration in economic conditions in key sales markets or additional burdens from structural adjustments.
Financial calendar 2024/2025
| Date | Annual report 2024/Annual press conference |
|---|---|
| March 26, 2025 | Quarterly statement Q1 2025 |
| May 6, 2025 | Annual General Meeting 2025, Augsburg |
| May 13, 2025 | H1 Report 2025 |
| August 5, 2025 | Quarterly statement Q1-3 2025 |
| November 5, 2025 |
Disclaimer
Cautionary note with regard to forward-looking statements: This document contains forward-looking statements and statements of future expectations that reflect management's current views and assumptions with respect to future events. Such statements are subject to known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied and that are beyond WashTec AG's ability to control or estimate precisely. In addition to statements which are forward-looking by reason of context, the words 'may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential, or continue' and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those statements due to, without limitation, (i) general economic conditions, (ii) future performance of financial markets, (iii) interest rate levels (iv) currency exchange rates (v) the behaviour of other market participants (vi) general competitive factors (vii) changes in laws and regulations (viii) changes in the policies of central banks, governmental regulators and/or (foreign) governments (ix) the ability to successfully integrate acquired and merged businesses and achieve anticipated synergies (x) reorganization measures, in each case on a local, national, regional and/or global basis. WashTec AG does not assume any obligation and does not intend to update any forward-looking statements to reflect events or circumstances after the date of these materials.
No obligation to update information: Due to rounding, numbers presented throughout this, and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. WashTec AG does not assume any obligation and does not intend to update any information contained herein.
No investment advice: This presentation is for information only and shall not constitute investment advice. It is not intended for solicitation purposes but only for use as general information. All descriptions, examples and calculations contained in this presentation are for illustrative purposes only.