WashTec AG — Investor Presentation 2015

Aug 24, 2015

Experience and Results Investor Presentation

Content

1. WashTec at a Glance

• 1. Market & Strategy
• 1. Facts & Figures

Complete product portfolio along the carwash value chain

Distribution of Revenue (€302.6m 2014)

Equipment & Service > 80%

Chemicals ~ 11%

Marketing < 3%

Operations < 3%

Financing < 3%

Production facilities in Ger, CZ, USA, CHN

Innovation Leader

• Technology leader based on over 40 years experience in the carwash business
• Focus on customer value: profitability, speed and convenience

Market Leader

• Only stock listed carwash provider, > 2* bigger than next competitor
• Largest installed machine base with high share of recurring revenues
• Solid balance sheet structures
• High cash flows
• Sustainable profitability

WashTec at a Glance

WashTec characteristics

Global setup

• Broad direct sales & service setup with regional footprint represented in over 60 countries with more than 1,600 employees
• Subsidiaries in all major markets of Core Europe, Central Eastern Europe, North America and Asia/Pacific and numerous independent sellers

Solid profitability and further growth potential

• Solid profitability (operating EBIT margin for the last 5 years constantly above 5%)
• Ongoing efficiency measures to improve profitability in EUR
• Further expansion of the business in growth markets with a focus on:
• North America after successful turnaround 2012/13
• Asia
• Eastern Europe
• Growth along the value chain (e.g. chemicals)

Leading market position & longterm customer base

• Stable business model due to long-term relationships with key accounts and private operators
• High share of recurring revenues through over 30,000 installed carwash systems

Attractive investment

• Attractive return policy
• Solid shareholder base
• SRI pass status as sustainable investment

Global setup and revenue split WashTec at a Glance

WashTec Our main products and customer segments at a Glance

• Car dealers and fleets
• Forwarding companies, coach operator

Hobby-wash Roll-over Tunnel Truck & Bus

Solid Balance Sheet Structures

• Equity ratio of 48.9%
• Net debt/EBITDA < 0
• ROCE of 18.7%

Sustainable cash flows

Attractive return

• Dividend of € 0.64 in 2014
• Dividend of € 1.65 in 2015

Solid Business Model

Stable revenues; robust against economical cyclicality

Free Cash Flow

Proven Track Record of successfull restructuring

* After adjusting for non-recurring effects based on North America

Content

• 1. WashTec at a Glance
• 2. Market & Strategy
• 1. Facts & Figures

Market & Strategy Key Drivers for automatic Carwash Growth

Carwash Business model

Automatization & capacity need Profitability of professional carwash

Consumer demand

• Convenience & speed of carwash
• Quality of carwash
• Automated carwash vs. carwash by hand

Market drivers

Economy

• GDP & distribution of income
• Number of cars
• Infrastructure
• Cultural imprint & technology affinity

Environment

• Degree of Urbanization
• Environmental Friendliness/regulation
• Weather conditions
• Dirt index

Global car wash markets and WashTecs position Market & Strategy

	Core Europe	North America	Eastern Europe	Asia/Pacific (incl. AUS&NZ)	Middle East and Africa	Central and Latin America
 Number of cars1)	203 Mio.	149 Mio.	77 Mio.	310 Mio.	50 Mio.	80 Mio.
Market growth2) 	0%	7–8%	2–5%	+15%	+x% +3-5%	+x%
 WashTec revenues	€ 250m (79%)	€ 43m (14%)	€ 11m (3%)	€ 12m (4%)	(<1%)	(<1%)
1) OICA 2012 2) Market development WT estimate 2013	 Keep leading market position  Ongoing inno vations with focus on carwash customer demands  Ongoing efficiency measures	 Increase market share  Gain efficiency by using synergies from global setup	 Grow with the market  Strengthen position with local key accounts and private investors	 Strengthen market position in cooperation with local partners  Defend market position in Australia	 evaluate market  in Latin	Analyse and potential First cooperation America

Customer Expectations

Experience	Speed	Convenience	Quality
 Turbo-Nozzels  Power-Foam  Color-Foam  Seasonal Programs	 Drive-In  Polish to Go  Customized Programs	 Drive-In  Flexible Touch Pay  Advanced Chemical System	 Wheel Jet  Flex Stream  Shine Tecs  Rain Tecs
Value based communication
Operational excellence
Innovation	Efficiency	Service	Sales

Market & Strategy

Global Production – Leverage of global sourcing as key factor to drive efficiency

Global Supply Chain Organization

Efficient Structures

• Leverage global set up also for operations in North America
• Continuous expansion of Global Sourcing
• Standardization, modularization & automation
• Sole competitor in the carwash industry in a position to leverage global setup with German engineering, Eastern European & Asian supplies and American setup

13 | WashTec Investor Presentation | July 2015

Content

• 1. WashTec at a Glance
• 1. Market & Strategy
• 3. Facts & Figures

	2014	2013	2012
Revenues	302.6	299.7	301.5
EBITDA	28.6	27.1	29.2
EBIT	18.4	17.1	19.2
Consolidated net income	12.7	11.2	10.1
Earnings per share *	0.91	0.80	0.72
Net cash flow	29.2	21.0	23.1
Equity ratio	48.9	50.4	46.0
Net financial debt	-15.4	2.9	8.3

* Approx. Shares: 14.0m since 2009, 13.9m since 2013

in €m

	2014	2013	Change
Equipment & Service	255.7	255.2	+0.5
Chemicals	34.3	32.0	+2.3
Operations business and others	12.6	12.5	+0.1
Total	302.6	299.7	+2.9

Balance sheet structure improved once again Facts & Figures

50.4 2013 2014 46.0 Equity ratio (in %)* 48.9 2012 2013 2014

Net financial debt** (in €m)

Comparative figures adjusted as per IAS 8 ** Net bank debt plus long-term and short-term finance leasing debt

Independent funding of growth due to solid balance sheet structure

Solid revenue and earnings development Facts & Figures

Earnings development Facts & Figures

Facts & Figures H1 2015: Strongest H1 in WashTec's history

21 | WashTec Investor Presentation | July 2015

Facts & Figures Revenues and earnings improved in all segments

Revenues by segment (H1) in €m

Positive outlook 2015 confirmed Facts & Figures

23

WashTec Group: significant increase in revenues and earnings

• revenues increase of more than 5 %, adjusted for currency effects
• half-year EBIT ratio of 8.6% confirmed for fy 2015
• Stronger Q3 2015 expected compared to €74,2m in 2014
• Q4 in 2014 was already extraordinary, limited chance to report higher revenues in Q4 2015

• Core Europe: significant increase in revenues and earnings (forecast improved compared to annual report 2014)

• Eastern Europe: significant increase in revenues and earnings
• North America: significant increase in revenues and earnings
• Asia/Pacific: significant increase in revenues and earnings

23 | WashTec Investor Presentation | July 2015 WashTec AG H1 2015 Report, Conference Call August 05, 2015

Chicago 1920

Germany app. 1960

Backup Board of Management

Dr. Volker Zimmermann (CTO/CEO)

Areas: Supply Chain, Development, Service Support, Quality

• Doctorate in mechanical engineering
• Worked for Voith Turbo GmbH & Co. KG, i.a. as a board member
• Formerly chairman of the board of Knorr-Bremse, Systeme für Nutzfahrzeuge GmbH

c Karoline Kalb (CHRO)

Areas: Legal & Compliance, Investor Relations, Human Ressources, Global Key Account Management, Special Projects

• Lawyer
• Has been working for WashTec since 2001 in various management functions, i.a. as director Key Account Management and Compliance

c c c Rainer Springs (CFO)

Areas: Finance and IT

• Master in Business Administration (Dipl.-Kfm.)
• Worked for management consulting firms
• Worked for ABB AG before joining WashTec in 2004
• Formerly COO of the US subsidiary Mark VII

Stephan Weber (CSO)

Areas: Sales and Service, Product Management & Marketing

• Engineer in the field of wood engineering (Dipl.- Ing.)
• Worked for well-known machine and plant engineering companies • Formerly member of the board of Michael Weinig AG

Independent & institutional representatives with broad knowledge of industry & finance

Dr. Günter Blaschke (Chairman)	Jens Große-Allermann
		Roland Lacher
Chair of the Personnel Committee, member of the Audit Committee	Chair of the Nominating Committee, member of the Audit Committee	Member of the Personell Committee
Businessman, former CEO of Rational AG	Board Member of Investment-AG für langfristige Investoren TGV and Fiducia Treuhand AG	Independent Businessman former CEO of Singulus Technologies AG
Ulrich Bellgardt (Deputy Chairman)	Dr. Sören Hein	Dr. Hans Liebler
Member of the Personnel Committee	Member of the Nominating Committee	Chair of the Audit Committee, Member of the Nominating Committee
Managing Partner of ubc GmbH	CEO & Founder of Compound Disk Drives	Investment Manager, Managing Director Lehnbach Capital GmbH

Backup

WashTec uniquely addresses business drivers in the carwash industry

Key Account Management Service Network Technological Expertise

• Central KAM at headquarters in Augsburg & regional contacts

• Regional contacts by own organizations in key markets

• 500 own technican (EUR) + 300 technicians at sales partners

• Consistent service performance with uptimes of 98%+

• Innovation leader

• Equipment and Wash Process Know How

• 300 active patents

• Successive projects to improve cost structure

• Most modern logistic and manufacturing processes

Cost Leadership Installed Equipment Base/ Carwash Expertise

• More than 30,000 installed car washes worldwide*
• More than 40 years experience in carwash

Quality

• High product quality standard, reliability and availability
• Highest standards in HSE

Competition Backup

	Core Europe	North America	Eastern Europe	Asia/Pacific (incl. AUS&NZ)	Middle East Central and and Africa Latin America
Customer Structure	•Consolidated •High share of Key Accounts	•Fragmented •High share of independent operators / convenience stores	•See Core Europe •plus local Key Accounts	•AUS/NZ: MOC + independent Key Accounts •CHN: local Key Accounts, Cardealers, independent Key Accounts	•Local Key Accounts •Few european players
Competition	•Consolidated •3 major players: •Christ •Istobal •Kärcher	•Fragmented •25+ players: •Ryko (friction wash) •PDQ (touchfree) •Sonny's (Tunnel)	•See Core Europe •Some local jetwash suppliers	•AUS: US + european competitors •CHN: local competitors +Japan (Daifuku) +Taiwan	•Mainly european + some US

Cost of Operation (labour, natural resources,...) high low low high Automatic wash Mature markets Growing markets Jet Wash Hand wash market volume Customer sophistication & environmental regulation (time, spending, education, ressources) Base enabler: increasing gdp, no. of cars, carwash demand

Backup

GDP, Number of cars and cost of operation drive carwash business

Market Growth Assess market Distribution via dealers Increase in professionalism/tech. Development of sales partners Development of own key accounting Highly competitive mature Own sales and service High quality & tech. expectation Mainly hand wash Expansion of service offerings Automatic car wash sites High ROI-growth + – – Asia, China Eastern Europe, USA Mature Europe +

GDP per capita/no. of cars/ cost of operation/ capacity needs/ consumer demand

Backup

Car Wash Drivers Technology – Continued innovations with focus on measurable added value for operators & wash customers

Compliance: Quality and Safety	Equipment quality & reliability and availability  Better wash and drying result for customer  Compliance with stricter regulations  Reduction of operating costs	ACS advance chemical system
Speed & Convenience	"Time is money" high throughputs at limited space  High speed while top wash quality Easy to use for operator and customer  Remote programming, sales / service reporting  Easy drive-in and start-up process	SoftLine² SLX
Experience & Operations	Car wash experience  Color, flavors, lighting, waiting time, etc. Combining hardware and operational support  Chemicals, marketing, consulting, training, etc.	ShineTecs

CarWash Operations with 15-30% profit as % of revenue

Backup

Core Europe:

Backup

• Revenues: € 250.1m (2013: € 244.5m) / EBIT (adjusted): € 17.6m (2013: € 15.5m)
• General business development slightly improved
• Continued growth in the chemicals segment

North America:

• Revenues: € 43.2m (2013: € 45.0m) / EBIT (adjusted): € 0.7m (2013: € 1.5m)
• Decline in revenues and earnings due to slightly reduced key account investment
• Investment into sales and service structures

Eastern Europe:

• Revenues: € 11.1m (2013: € 13.2 m) / EBIT (adjusted): € 0.0m (2013: € 0.6m)
• Decline in revenues and earnings due to regional political uncertainties
• Continued expansion of the sales and service structures

Asia/Pacific:

• Revenues: € 12.5m (2013: € 12.3m) / EBIT (adjusted): € 0.2m (2013: € 0.0m)
• Slight increase in revenues and positive earnings
• Continued expansion of the China business

Core Europe – clear market leader in a mature market

Market & setup

• Largest installed base & proprietary sales & service network
• Mature markets with declining market volumes in southern Europe

• Main competitors Christ (D), Istobal (E)

• Revenues 2014: € 250.1m (2013: € 244.5m)

• EBIT 2014: € 17.6m (2013: € 15.5m)

WashTec objectives

• Defend leading position & improve profitability through synergies, innovations and cost optimization
• Expand chemical business
• Focus on efficiency measures to off-set cost increases

Defend current Revenue- & improve EBIT-level

North America – growing market after drop 2009-2011

Market & setup

• Number of cars and automatic wash volume high
• Completed and competitive product portfolio and access to large & regional accounts
• Successful turnaround
• Direct & indirect Sales and Services with focus on Key Accounts

• Main Competitors: PDQ, Ryko, Sonny's, Bellanger, Hanna/Coleman, MacNeil

• Revenues 2014: € 43.2m (2013: € 45.0m)

• EBIT 2014: € 0.7m (2013: € 1.5m)

WashTec objectives

• Increase market share by:
• Gain of new accounts also in customer segments outside gas station operators (e.g. car dealers)
• Grow business and overproportianlly participate in market growth after market recovery
• Efficiency improvement especially through global sourcing
• Check growth

Increase market share after successful turnaround

Eastern Europe – market with low saturation

Revenue > 10% p.a. & positive EBIT development; Investments into sales and service structures

Asia/Pacific (incl. AUS&NZ): significant growth in CHN

China: growth opportunities / AUS/NZ: Stable revenues & EBIT midterm to Group level

	2014	2013	2012	2011*	2010
Revenues	302.6	299.7	301.5	293.3	268.4
EBITDA	28.6	27.1	29.2	19.2	29.9
EBIT	18.4	17.1	19.2	–10.4	20.3
Consolidated net income	12.7	11.2	10.1	–14.6	10.8
Earnings per share **	0.91	0.80	0.72	–1.04	0.77
Net cash flow	29.1	21.0	23.1	17.2	29.1
Equity ratio	48.9	50.4	46.0	38.6	43.5
Net financial debt	-9.8	2.9	8.3	24.4	26.6

* Comparative figures adjusted as per IAS 8

** Approx. Shares: 13.9m in 2011, 2012; 14.0m in 2013

Profit/Loss Statement Backup

P+L	2014	2013
Revenues	302.6	299.7
Gross margin	182.6 (60.3%)	177.8 (59.3%)	Increase due to change in product mix and higher revenues
Personnel expenses	(111.1) [36.7%]	(106.4) [35.5%]	Wage increases especially in Germany, effects from restructuring program
Other operating expenses	(47.5) [15.7%]	(48.8) [16.3%]	Efficiency measures and cost reduction reg. consultancy and cars, lower FX losses
EBITDA	28.6	27.0
Depreciation	(10.3)	(9.9)
EBIT	18.4 [6.1%]	17.1 [5.7%]
Financial Result	(0.7)	(1.3)	Repayment of loans and lower effects from interest rate swaps
EBT	17.7	15.8
Tax Expenses	(5.0)	(4.6)
Net income	12.7	11.2

Backup Very solid balance sheet structure

	Dec. 31, 2014	Dec. 31, 2013
Balance sheet total	185.8	174.2
Goodwill	42.3	42.3
Equity	90.9	87.8	Equity ratio at 48.9%
Net finance debt	-9.8	2.9	Net financial liquidity by end of 2014 due to strong CashFlow
Net cash flow	29.2	21.0	Higher prepayments
Net current assets	71.2	65.2	Higher receivables/inventory
Cash outflow from investing activities	(4.1)	(5.3)
Free cash flow	25.1	15.7

Backup	Financial calendar
September 22-24, 2015	Baader Bank
October 30, 2015	3Q/2015 Report
November 23-25, 2015	Equity Capital Forum

Backup

WashTec was positively mentioned in many publications in the last 6 months

Analyst Coverage
Analyst Recommen (+ Date) dation		Target Price (€)
Hauck & Aufhäuser (06/15)	Hold	20.00
HSBC (06/15)	Buy	22.00
MM Warburg (06/15)	Buy	22.70

Trade Volume (Xetra)
		Volume (pcs.)
Period	2015	2014
Jan.- Jun.	1,642,291 481,612
SDAX-Ranking	Turnover
Jun.	114 131

Backup

WashTec share: Value-oriented with attractive return policy

• 2010: 40%
• 2011: no dividend because of North America effects
• 2012: € 0.58 (40% + special dividend of 40% to compensate for 2011)
• 2013: € 0.64 (40% + special dividend of 40%)
• 2014: € 1.65 (42,4% + special dividend of 57,6% )

Company	Distribution (in %)
Bertrandt	69
Vossloh	0
SMT Scharf	88
Grammer	36
Bauer AG	8
Wacker Neuson	59
Dürr	20
Elring Klinger	59
Leoni	97

WashTec AG

Argonstr. 7

D-86153 Augsburg

www.washtec.de

Dr. Johannes Ley

Tel.: +49 821 5584-1136

Mail: jley@washtec.de

No offer:

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Cautionary Note Regarding Forward-Looking Statements:

This document refers to statements relating expressly and implicitly to the future. Such forward-looking statements are based on current expectations, estimates, forecasts and prognoses concerning the development of the market as well as management estimates and assumptions. Such forward-looking statements are no guarantee that events or results will actually materialise in the future and are subject to risks, uncertainties, assumptions and other factors that could lead to actual events or results deviating substantially from those anticipated in these forward-looking statements. The company assumes no obligation to update any forward-looking information.