WashTec ETR: WSU reported higher revenue for the first nine months of 2026 but said profitability and free cash flow were pressured by implementation costs, organizational changes and the relocation of production activities to the Czech Republic.
Chief Financial Officer Andreas Pabst said nine-month revenue rose 4.6% year over year to €375 million, the highest level in the company’s five-year comparison. Growth was supported by both the Europe and other segment and North America. However, all-in EBIT declined to €25.7 million from €32.4 million a year earlier, producing an EBIT margin of 6.9%.
Excluding €2 million of expenses related to organizational optimization, WashTec said EBIT would have been €27.7 million, or a 7.4% margin. Free cash flow fell €19.2 million from the previous year to €8.6 million, reflecting higher net operating working capital and increased capital expenditures.
Organizational Changes and Czech Relocation
Pabst said WashTec has implemented management and organizational changes intended to speed decision-making and increase accountability. The company’s supervisory board extended Chief Executive Officer Michael Drolshagen’s contract through April 2030, while the management board will continue with two members for the foreseeable future.
WashTec also appointed Arthur Wessels as Senior Executive Vice President for Global Sales and Marketing. Wessels has worked at the company since 1992 and previously held responsibilities including global key accounts, the Netherlands subsidiary and car wash management. The company also made changes across middle management, including roles in global service, product management and regional operations.
The organizational actions resulted in currently €2 million of unplanned costs, primarily including severance-related expenses, during the first nine months, Pabst said.
The company’s production-footprint optimization is centered on expanding its Czech operation in Nýřany. Sheet-metal production and a warehouse in Derching near Augsburg have been closed, with machinery and workstations transferred to the Czech Republic. New laser and bending equipment is operational, and the assembly relocation and warehouse commissioning have been completed without major production disruption, according to Pabst.
Remaining steps include moving welding workstations and transferring about 1,200 inbound-logistics storage locations from Augsburg to the Czech Republic by year-end. WashTec expects the overall project to be completed around the end of 2026 or the beginning of 2027.
Pabst acknowledged that the company underestimated the project’s complexity and faced prolonged negotiations with the workers’ council. As a result, initial savings arrived later than expected and the project will not be cost-neutral in 2026. He said the company expects most savings to be realized during 2027.
WashTec said labor-cost savings from relocating 85 positions from Augsburg to the Czech Republic could amount to roughly €2.6 million to €2.7 million annually before additional depreciation and transportation costs. The company said it had invested between €4 million and €5 million in additional Czech-site capital expenditures and expects another €1 million to €1.5 million of spending through the end of 2026.
Business-Line Trends
Equipment remained the main growth driver, with nine-month revenue rising 6.9% to €196 million. Service revenue increased 4.7% to €122 million, supported by the growing installed base and additional service staff. Consumables revenue declined 2.6% to €52 million, primarily because weather-related lower car-wash volumes affected the first four to five months of the year.
Pabst said consumables sales showed a slight increase in the third quarter. He added that chemical volumes sold year to date were close to the prior-year level, although the historical relationship between weather conditions and wash volumes appeared less pronounced over the previous two to three months.
Recurring revenue represented 46.5% of total revenue after nine months, compared with 47.5% a year earlier. The ratio improved in the third quarter, according to the company.
North America was a brighter area, with nine-month revenue increasing 16% to €60 million, driven primarily by equipment sales to key accounts and through direct sales. North American EBIT improved to €1.3 million for the nine-month period.
WashTec continued to expand Mark VII’s direct sales and service presence in selected high-volume North American markets. The company had 345 employees in the region as of Sept. 13, compared with 306 at the beginning of the year, with most additions in sales and service. Pabst said newly hired staff require time to ramp up, which contributed to the expected profit dip in the third quarter.
Costs, Cash Flow and Outlook
Third-quarter revenue was €127 million, slightly above the prior-year period. The revenue mix shifted toward North America and equipment, while consumables remained affected by lower wash volumes. Third-quarter EBIT, even excluding organizational optimization costs, was below the prior year due to production-relocation expenses, elevated installation costs and a slight rise in material costs, including chemicals and copper-related components.
WashTec said installation costs per unit have declined for three consecutive months, although absolute costs remain above the prior-year level. The company also said it raised equipment list prices during the summer, with the higher pricing applying as newly ordered equipment is delivered.
Net debt increased as a result of higher working capital, a higher dividend and a €4.8 million share buyback program completed in March 2026. Inventory increased partly because WashTec raised safety stock following the start of the war in the Gulf region, as well as due to the production transfer and spare-parts warehouse move.
For 2026, WashTec confirmed its expectation for a mid-single-digit percentage revenue increase from €498.6 million in 2025. The company maintained its revised EBIT-margin outlook of 8% to 9%, which Pabst said includes all anticipated costs and is not adjusted for one-off items. WashTec expects return on capital employed to be below the prior-year level and forecast free cash flow of €35 million to €45 million, more likely toward the lower end of that range.
Pabst said the company’s order backlog was slightly below the third quarter of 2025 but remained above year-end 2025 levels. While European order intake softened in some markets, including Germany and France, he said the sales funnel indicated potential for future equipment business.
About WashTec (ETR:WSU)
WashTec AG provides solutions for car wash in Germany, Europe, North America, and the Asia Pacific. The company offers gantry carwashes, self-service, and commercial vehicle wash equipment, as well as conveyor tunnel systems. It also provides water recovery systems; full maintenance; on-call service agreements; service projects and upgrades; spare parts; and digital solutions. In addition, the company offers car wash management services; and financial services, such as financing and leasing solutions.
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