WashTec ETR: WSU reported record first-half revenue for 2026 as equipment sales increased across Europe and North America, while the company said profitability remained constrained by product mix, implementation costs and delays in efficiency initiatives.
Revenue for the first six months rose 6.6% year over year to €248 million, Chief Financial Officer Andreas Pabst said on the company’s earnings call. EBIT was broadly unchanged at €17.7 million, compared with €17.6 million a year earlier, resulting in an EBIT margin of 7.1%, down from 7.6%.
“Revenue, especially in equipment in North America, is quite good,” Pabst said, describing the first-half result as a new all-time high for the period. He added that second-quarter results improved meaningfully from the first quarter, though further work is needed to lift profitability.
Second-Quarter Revenue Reaches New High
Second-quarter revenue rose 10.4% year over year to a record €137 million. EBIT increased 9.4% to €13.9 million, with an EBIT margin of 10.2%, nearly level with the 10.3% margin reported in the prior-year quarter.
Free cash flow in the second quarter increased 90% to €6.7 million, aided by higher net income and reimbursement of investment income tax. For the first half, however, free cash flow declined by €6 million from the prior year to €40 million, mainly due to higher trade receivables following strong second-quarter sales.
Pabst said the receivables increase reflected working-capital timing rather than deterioration in the underlying business. The company also raised safety stock modestly amid geopolitical uncertainty and concerns over potential supply shortages and price increases.
- First-half equipment revenue increased 13.4% to €128 million.
- Second-quarter equipment revenue rose 18.7%.
- First-half service revenue grew 3.2% to €81 million.
- First-half consumables revenue declined 5% to €36 million, primarily due to weather-related lower wash volumes.
The company said the share of recurring revenue from service and consumables fell slightly to 47.2%, reflecting faster growth in equipment. Pabst said the installation of new equipment expands the installed base and supports future recurring revenue.
North America Returns to Profit
North America was a major contributor to growth, particularly through equipment sales to key accounts. Revenue in the region increased 18.1% in the first half to €37 million and rose 23.4% in the second quarter.
The segment reported EBIT of €0.8 million for the first half, compared with a loss of €1.5 million in the prior-year period. Its EBIT margin improved by 700 basis points to 2.2%.
While Pabst said the margin improvement was substantial, he said the current profitability level remains below the company’s expectations. WashTec is targeting an EBIT margin of 8% to 9% in North America over roughly the next three years.
In Europe and other markets, first-half revenue increased 4.9% to €230 million. Segment profitability remained affected by product mix, project costs and efficiency-program implementation delays. The first-half EBIT margin declined 150 basis points to 7.9%, although the margin decline narrowed to 60 basis points in the second quarter.
SmartCare Connect Gains Market Adoption
WashTec highlighted continued adoption of its SmartCare Connect rollover system, launched in May 2025. The company generated 54% of its rollover revenue from the new equipment in the second quarter, marking the first time SmartCare Connect represented a majority of rollover revenue. WashTec recently produced its 1,500th unit.
Pabst said the company had encountered early quality issues with the product, which it now has under control. Installation costs increased quarter by quarter after the launch, though an installation task force has stopped further cost increases since the start of 2026. The next step is to reduce installation costs, he said.
The company is also developing additional SmartCare Connect configurations, including a prototype with a height of 2.9 meters.
Regarding consumables, Pabst said lower revenue reflected weaker wash volumes, but noted that the decline was less pronounced than the reduction in wash counts. The number of consumables customers increased by a low single-digit percentage, he said, while WashTec is working to expand consumables sales both to tunnel operators and rollover customers.
Manufacturing Footprint and Cost Actions
WashTec is continuing to optimize its manufacturing footprint, including its facilities in Nýřany, Czech Republic, as well as sites in Augsburg and Derching, Germany. The Czech site will play a central role in module production, pre-assembly and material preparation.
At Nýřany, logistics operations are active, assembly areas have been integrated into the newest plant, and SmartCare pre-assembly and electrical production have been moved. Plant 2 is scheduled to close around the middle of next year, while plant 3 is still being furnished.
The project includes shifting 85 workplaces from Augsburg to the Czech Republic. Pabst said the company estimates annual savings of about €35,000 per workplace, implying a roughly €3 million benefit, although additional costs and process-related effects must also be considered.
Efficiency programs and related project costs continued to weigh on first-half earnings by approximately €2 million to €3 million, Pabst said in response to an analyst question. Administrative expenses also increased because of IT spending on transformation efforts, including S/4HANA and a field-service solution.
Management has introduced additional measures, including restrictive hiring, closer cost controls and a sharper focus on key projects. Headcount increased by 75 employees year over year, primarily in sales, service and supply chain, but rose by only nine employees from the end of the first quarter to the end of the second quarter.
Guidance Confirmed
WashTec confirmed its 2026 outlook. The company expects revenue to grow in the mid-single-digit percentage range, supported by its order backlog, and expects EBIT to rise disproportionately faster than revenue.
The order backlog was 13% above the level at the end of 2025 and 2% above the level at the end of the second quarter of 2025, according to Pabst. Orders received in North America showed double-digit growth, while orders in Europe were slightly lower.
WashTec expects free cash flow of €35 million to €45 million for the full year and a return on capital employed above the 2025 level. Pabst said the company must accelerate the benefits from its efficiency programs in the second half to achieve its profit outlook.
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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