Earnings call transcript: WashTec posts record Q2 2026 revenue as margins lag

Oil prices turn lower as Bessent says U.S. may have Iran deal "today or tomorrow"

WashTec reported record second-quarter and first-half revenue for 2026, but profit growth lagged sales as the German car wash equipment maker absorbed mix pressure, one-time efficiency costs and higher spending on digital and industrial projects. H1 revenue rose 6.6% to EUR 248 million, while Q2 revenue climbed 10.4% to a quarterly record of EUR 137 million. H1 EBIT was essentially flat at EUR 17.7 million, and the margin slipped to 7.1% from 7.6% a year earlier. The stock was down 2.78% to $38.5 in recent trading, after closing at $39.6, leaving it near the lower end of its 52-week range.

Key Takeaways

• WashTec posted record H1 and Q2 revenue, helped by strong equipment demand and growth in North America.
• H1 EBIT was flat year over year, showing that higher sales did not yet translate into stronger profit.
• SmartCare Connect, the company’s digital equipment platform, accounted for 54% of rollover revenues in Q2.
• Management confirmed full-year 2026 guidance and said efficiency projects should start to help more in the second half.
• The stock fell 2.78% to $38.5, suggesting investors focused more on margin pressure than on sales growth.

Company Performance

WashTec’s results showed a business in transition. Demand for equipment remained strong, especially in North America, where revenue rose 18.1% in H1 and 23.4% in Q2. Europe also grew, though more modestly, and service revenue continued to rise. Consumables revenue fell 5% in H1 because of weaker wash volumes tied to weather, but management said the decline was less severe than the drop in wash activity, which points to some pricing resilience.

The company is also shifting toward a broader solution-provider model. SmartCare Connect, launched in May 2025, is now a major part of the sales mix and is helping WashTec sell more digital services and bundled contracts. Management said the product had been well received and that the installed base is expanding, which should support recurring revenue over time.

At the same time, the company is spending heavily on operational changes. It is consolidating production in the Czech Republic, implementing new IT systems and working to reduce installation costs. Those efforts helped long-term strategy but weighed on near-term profitability.

Financial Highlights

• H1 revenue: EUR 248 million, up 6.6% year over year.
• Q2 revenue: EUR 137 million, up 10.4% year over year and a quarterly record.
• H1 EBIT: EUR 17.7 million, roughly flat year over year.
• H1 EBIT margin: 7.1%, down 50 basis points from 7.6%.
• Q2 EBIT: EUR 13.9 million, up 9.4% year over year.
• Q2 EBIT margin: 10.2%, roughly in line with 10.3% a year earlier.
• H1 net income: EUR 11.3 million, about unchanged from last year.
• H1 free cash flow: EUR 40 million, down EUR 6 million year over year.
• Q2 free cash flow: EUR 6.7 million, up 90% year over year.
• Earnings per share: EUR 0.85, up EUR 0.01, helped by a 100,000-share buyback.
• Dividend yield: 6.4%, providing significant income to shareholders alongside growth prospects.
• P/E ratio: 17.2, reflecting moderate valuation relative to earnings.
• Return on equity: 35% over the last twelve months, demonstrating strong capital efficiency.

Earnings vs. Forecast

WashTec did not provide a comparable EPS or revenue forecast in the materials reviewed, so a direct beat-or-miss comparison is not available. The reported numbers still give a clear picture of the quarter: revenue growth was solid, but profit growth was limited.

The most important metric was EBIT. H1 EBIT of EUR 17.7 million was essentially unchanged from EUR 17.6 million a year earlier, even as revenue rose 6.6%. InvestingPro data shows the company maintains a "GOOD" financial health score of 2.65, with particularly strong profitability metrics. Investors seeking deeper analysis can access one of 6+ additional ProTips available exclusively on the platform, covering everything from valuation to operational efficiency. That suggests the company is still absorbing costs tied to product mix, digital investment and efficiency programs. In Q2, however, EBIT improved 9.4% to EUR 13.9 million, which indicates some progress.

Management said one-off efficiency costs of EUR 2 million to EUR 3 million burdened H1 results. Excluding those items, underlying margins would have been higher. That means the quarter was not a clear earnings disappointment, but it also was not a profit breakout.

Market Reaction

WashTec shares were last quoted at $38.5, down 2.78% from the previous close of $39.6. The stock is now about 6.4% above its 52-week low of $35.9 and roughly 25.4% below its 52-week high of $51.6. According to InvestingPro analysis, the stock appears undervalued at current levels, with a Fair Value estimate suggesting meaningful upside potential. This positions WashTec among companies on the Most Undervalued list, potentially offering an attractive entry point for long-term investors despite near-term margin pressures.

Because the earnings call was held before the market open, the full post-earnings reaction was not yet visible. Still, the early move suggests investors were cautious. The market appeared to weigh the flat H1 EBIT and margin decline more heavily than the record revenue and strong backlog.

No trading volume data were provided, so it is not possible to determine whether the move came with unusually heavy activity.

Outlook & Guidance

WashTec confirmed its full-year 2026 guidance. It expects mid-single-digit revenue growth and EBIT growth that outpaces revenue growth. Analysts covering the stock maintain a positive outlook, with price targets ranging from $61 to $64, well above current trading levels. For comprehensive analysis of WashTec’s prospects, investors can review the detailed Pro Research Report available on InvestingPro, which distills complex Wall Street data into clear, actionable intelligence across 1,400+ top stocks. The company also kept its free cash flow target at EUR 35 million to EUR 45 million for the year and said return on capital employed should improve from 2025.

Management said the second half should benefit from several factors:

• a strong order backlog,
• continued adoption of SmartCare Connect,
• better execution of efficiency programs,
• lower one-time costs,
• and improved consumables sales as weather normalizes.

The company also pointed to long-term gains from its Czech production footprint optimization. Management said 85 workplaces have been shifted from Augsburg to the Czech Republic, which should generate about EUR 3 million in annual savings. In North America, WashTec said it aims to reach an 8% to 9% EBIT margin within about three years, up from 2.2% in H1 2026.

Executive Commentary

Chief Financial Officer Andreas Pabst said the company’s Czech facility upgrade is central to its strategy. “The upgrading of Czech facilities is not just a construction project,” he said. “It is a key element of how we are reshaping WashTec’s industrial footprint for the next phase of profitable growth.”

He also highlighted the market response to the company’s new digital platform. “SmartCare Connect keeps us busy, but given the results from the market, in a very positive way,” Pabst said.

On the outlook, he pointed to demand and execution as the main reasons for confidence. “We really have a strong order backlog,” he said. “We are seeing that our products are very well received in the market.”

Risks and Challenges

• Margin pressure from product mix: Faster equipment growth can weigh on group margins because equipment carries lower margins than service and consumables.
• Execution risk on efficiency projects: Management said some programs are moving slower than planned, which could delay expected savings.
• Working capital strain: Higher receivables and safety stock lifted operating working capital and increased net financial debt.
• Geopolitical uncertainty: The company built extra inventory because of conflict-related supply concerns, which could affect costs.
• Weather-linked consumables demand: Lower wash volumes in Europe hurt consumables sales and may remain a swing factor.

Q&A

Analysts focused on margins, SmartCare Connect adoption, consumables trends and North America profitability.

One question centered on how much H1 margins were affected by one-time efficiency costs. Pabst said those costs were in the EUR 2 million to EUR 3 million range, which implies reported margins were held down by temporary spending.

Another topic was whether SmartCare Connect should already be boosting consumables sales more visibly. Pabst said the link is real but not yet fully reflected in the numbers. He added that the company is using a global scope configurator to help sales teams sell machines, digital projects and long-term consumables contracts together.

Analysts also asked about the customer base. Pabst said the number of consumables customers rose by a low single-digit percentage, and that WashTec is targeting tunnel customers and third-party machines more aggressively.

Questions about North America drew a clear answer: the region’s EBIT margin improved sharply from a loss a year ago to 2.2% in H1 2026, but management still sees room for major improvement. Pabst said the medium-term goal is an 8% to 9% margin within three years.

Finally, analysts asked about the production footprint optimization in the Czech Republic. Pabst said the project should generate about EUR 3 million in annual savings, though some additional costs remain as the company completes the transition.

Full transcript - WashTec AG (WSU) Q2 2026:

Kevin Lorenz, Investor Relations Manager, WashTec: Good afternoon, ladies and gentlemen, and welcome to WashTec’s earnings call on the results of the first half year 2026. My name is Kevin Lorenz, Investor Relations Manager at WashTec. With me, I have today our Chief Financial Officer, Andreas Pabst, who will provide a brief update on two important current topics of WashTec and guide you through our results. Following his presentation, the floor will be open for questions. You may already queue now if you want to ask questions in person or write down any questions you might have. Without further ado, I am now handing over to our CFO, Andreas Pabst.

Andreas Pabst, Chief Financial Officer, WashTec: Thank you, Kevin. Hello, everybody. Also, very warm welcome from my side. I am really happy that you took time today to listen to the latest news and figures on WashTec. Thank you for your audience. Before I come to the figures, there are two items WashTec is working very intensively on. One is the optimizing of our production footprint, and the other one is everything in connection with the ongoing rollout of our SmartCare. Let us start with the optimization of our productions. Optimization our production is clearly one of the biggest levers we currently have in the company. That, in general, does not only include the new site in Nýřany, close to Plzeň in the Czech Republic, but also has a huge impact on our sites in Augsburg. Recently, I visited once again our site in Nýřany and brought these pictures to show you our progress.

Believe me, I was personally deeply impressed by what our WashTec colleagues have been doing here over the last months. The upgrading of Czech facilities is not just a construction project. It is a key element of how we are reshaping WashTec’s industrial footprint for the next phase of profitable growth. At Nýřany, we are building up a modern and clearly focused production and logistics setup. Our facilities will take over a central role in module production, pre-assembly, and material preparation. This allows us to bundle activities that can be standardized, scaled, and industrialized more efficiency. The whole site consists out of 3 plants, where number 3 is the newest one and is currently furnished, whereas number 2 will be closed mid of next year. Not everything is as of today in full functionality, but major steps forward have been made in this quarter.

For example, the logistics section, meaning goods receipts, goods dispatch, as well as production supply processes, are now fully active. Necessary assembly areas from plant 2 have been fully integrated in plant 3. SmartCare pre-assembly and electrical production are moved, too. This gives room for further optimization of plant 1, building up here a central sheet metal warehouse with short transport distances. This was only the description of movements within our three sites in Czech. Further movements to optimize the whole production flow are also necessary in Augsburg and in Derching, close to Augsburg. All this is not only related to the shift of 85 workplaces, it is a lot more. You see, WashTec is doing here a real big thing, and you can imagine that within such a huge project, not everything is 100% in cost and in time.

We are doing quite well, and we strongly believe that at the end, we will be able to cash in the expected additional profitability. This brings me now to the update on my second topic, our new rollover SmartCare Connect, a completely new digital operating service and operator experience. We have launched SmartCare Connect in May 2025. Given the figures, it is a big success. In Q2 2026, we did, for the first time, the majority of our rollover revenues with this brand new equipment, 54%. In terms of units, we celebrated recently the 1,500 machine produced. The rollover development impressively shows that the market is accepting the product excellently. We are still moving forward with developing additional features for our SmartCare Connect. Some weeks ago, we built the first prototype with a height of 2 meters 90.

You can see it here in the picture. The machine is painted in pink, and I can assure you that it was really a delight to see this one moving along our production stations and to see the pride in the eyes of our employees. On the other side, everyone who has ever introduced a complete new product line knows that there are some obstacles. Sure, at the beginning, we had some quality topics which we now have under control. The installation costs gave us some headache. As you can see on the columns at the upper right side on this slide, the installation costs overall increased quarter by quarter. Our implemented installation task force shows positively results. Since this year, we could stop further increase. We need to do the next step and bring down the overall installation cost to a better level.

Overall, SmartCare Connect keeps us busy, but given the results from the market, in a very positive way. Let’s come to the figures of H1 2026. Summing up H1 in a statement Revenue, especially in equipment in North America, is quite good. A new all-time high for the first six months. In terms of profitability, a clear improvement compared to Q1 2026, but further efforts are necessary. Stepping now into more details. I’m pleased to report that we achieved a new record level of revenue in the first half of 2026, reaching EUR 248 million, which represents an increase of 6.6% compared to the prior year. This growth was mainly driven by the continuous strength of our equipment business, with higher sales volume across both our Europe and other segment, as well as North America.

The result demonstrates that our new products, not only the MANTRA SmartCare Connect, but also the new JetBay Connect or our MagicCare consumables line, as well as our strategic movement towards a solution provider, contribute to this growth despite an uncertain market environment. Looking at profitability, EBIT came in at EUR 17.7 million, essentially on par with prior year’s EUR 17.6 million. Given the higher sales, this results in a lower EBIT margin of 7.1% compared to 7.6% in the prior year. Here, we are not satisfied with the result, but we took some measures to improve. For more detailed analysis, please wait some slides to come. Turning to cash flow, free cash flow amounted to EUR 40 million, a decrease of EUR 6 million versus the prior year. This development was primarily driven by higher trade receivables resulting from the strong revenue growth in the second quarter.

This reflects working capital timing effects rather than any deterioration in the underlying business. Compared to the first quarter of this year, we, the management team, see a clear improvement in second quarter. We need to keep going further. Let me now turn to our second quarter’s performance. As I already intimated when I spoke about the first six months, second quarter showed a significant improvement. Revenues up to a new quarterly record of EUR 137 million, representing a 10.4% increase year-over-year. Similarly to the first quarter, growth was primarily driven by higher equipment sales volumes across Europe and North America. At the earnings level, EBIT increased by 9.4% to now EUR 13.9 million, what led to an EBIT margin of 10.2%, essentially in line with 10.3% reported a year ago. Free cash flow also showed a very encouraging development.

At EUR 6.7 million, free cash flow was up by 90% year-over-year. The strong increase was driven by higher net income as well as the reimbursement of investment income tax, supporting both liquidity and financial flexibility. Summing up, Q2 2026 was basically good. Let’s move further in that direction. Let me now provide you some more details on the development of our business lines, which clearly illustrates the drivers behind strong revenue growth in both the first half and the second quarter. The key growth engine continues to be our equipment business. In the first half of 2026, equipment revenue increased by 13.4% to EUR 128 million, compared to EUR 130 million one year ago. In the second quarter alone, equipment revenue grew even faster, rising 18.7%.

Despite we are happy in all regions and all customer segments, meaning key accounts and directs, it is worth to mention that the growth with key accounts in North America was outstanding. In the service business line, revenue increased by 3.2% to EUR 81 million in the first half, while second quarter revenue grew by 5.7%. Especially the strengthening of our service technicians network pays out here step by step. In consumables, revenue amounted to EUR 36 million in the first half, a decrease of 5% compared to the prior year. The decline primarily reflects weather-related lower wash volumes across several markets. Encouragingly, the reduction in consumables revenue was less pronounced than the decline in every wash volumes, demonstrating the resilience of our pricing and customer relationship. In short, we still have a strong market position and are seen as trustworthy business partner to our customers.

Overall, the revenue growth was driven by equipment, reflecting strong investment activity by our customers. Consequently, the share of recurring revenues, meaning service and consumables, declined slightly on a year-on-year basis to now 47.2%. The installation of new equipment further strengthens the installed base and lays the foundation for future recurring revenues. Let me now discuss the performance of the two reporting segments. Starting with Europe and other, revenue in the first half increased to EUR 230 million, up by EUR 10 million or 4.9% compared to the prior year. After a comparatively modest first quarter, we saw a significant acceleration in the second quarter with revenue growing 8.7%. Profitability in the segment remained impacted by the overall product mix and the ongoing efficiency initiatives. First half EBIT decreased and EBIT margin declined by 150 basis points to 7.9%.

While the expected benefits from our efficiency programs have not yet fully materialized due to implementation delays and additional project costs, the management took further corrective actions during the second quarter. Among those actions are sharpening the overall focus on key projects, very restrictive hiring, and ignite cost sensitiveness in every team meeting. Our investments, both in terms of capital and management capacity, are starting to bear fruit. Second quarter EBIT margin drop was significantly lower to now 60 basis points. Turning to North America, the development was particularly positive. Revenue increased by 18.1% in the first half to EUR 37 million, driven primarily by strong equipment sales with key accounts. In the second quarter alone, revenue grew even stronger by 23.4%. The revenue growth translated into a significant improvement in profitability.

Segment’s EBIT improved from a loss of EUR 1.5 million in the prior year to a profit of EUR 0.8 million in the first half of 2026. This corresponds to an EBIT margin improvement of 700 basis points, reaching now 2.2%. Let me now provide some additional color on the development of our EBIT margin and the key factors influencing profitability in the first half of 2026. Our EBIT margin of 7.1% reflects a combination of positive structural developments and temporary headwinds. Starting with the product mix. If we compare our business lines, contribution margin three, meaning gross profit, including selling expenses, is the one to compare. On a group level, this KPI is about 15.6%. From the indicative columns on the right upper side, you can derive that consumables and service contribute with higher margins than equipment.

Our strong growth in equipment business by 13.4% year-over-year, where we are all happy with, puts relatively pressure on the total group margin. This growth motivates our consumables and service guys to do even more. A second positive factor is a strong development in North America. Revenue in the region is up by 18.1%, and North America share of group revenue increased from 13.3% to 14.7% in the first half. Despite significant improvement, EBIT margin, this one is still below comparative number in Europe. Here, mathematically stronger top-line growth in North America puts pressure on group profitability, or in other words, motivates our colleagues on the other side of the Atlantic to bring up their profitability even faster. We need to speak about our ongoing efficiency programs. Overall, we remain satisfied with the strategic direction and expected long-term benefits of these initiatives.

Some of them are close to be finalized, e.g., our quality program, which is now inherited in our DNA. We made other good progress with our global scope configurator. Some of the projects are currently progressing more slowly than originally anticipated or require higher implementation cost, to be named installation cost or the optimization of production footprint. As a result, the associated expenses are still burdening our profit and loss statement by a low single-digit million euro amount in the current year. Administrative expenses increased, primarily driven by higher IT-related spending, including major transformation projects such as our S/4HANA or the field service solution implementation. Here, we have already done countermeasures, so that the overall additional IT expenses of around EUR 1 million are not fully seen directly in our P&L.

Looking at the workload, WashTec management is overall satisfied with the engagement of our team and the enthusiasm performed on all those topics. Now we need to focus more and identify the real contributing items. We will do so. I guess the overall explanation to our P&L took this time a little bit longer. That is important to understand that we have some special items, but we are on a quite good path. Coming now to some additional, more financial KPIs in short. With net income of EUR 11.3 million, we have on par with prior year. To the buyback of 100,000 shares, the earnings per share increased by EUR 0.01 to now EUR 0.85. As mentioned, we had very strong revenues in Q2 2026. Therefore, our accounts receivables are higher than one year ago.

Also, given the fact of the geographical uncertainties, meaning the Iran-U.S. war and other conflicts, we increased our safety stock slightly. This led to higher net operating working capital, which was mainly financed by our bank loans, so that our net financial debt increased accordingly. For investing activities, we spent approximately EUR 4 million in the first half year, and expect a slightly higher number in the second half year, mainly related with the optimization of our production flow and further digitalization offerings. With regards to the equity ratio, we see a decline of 2.8% to now 20%, which is, to my understanding, still a very solid number. The comparatively lower number is mainly caused by the paid dividend as well as the share buyback program.

Fixed assets ratio is quite stable, I skip this one and guide your eyes on the composition of the increase of our employees year-over-year. It is important to acknowledge that from our increase of 75 employees, 27 are in the sales field and 25 in service, meaning mainly direct employees. Also from the remaining 23, all must be attributed to the supply chain. Most importantly, if you compare the number of colleagues from end of Q1 to end of Q2, the headcount only increased by nine colleagues. Here you can start to see the impact of some of the measures we took in Q2. Next slide. To make this one very short, WashTec has a strong order backlog.

Indexing 2022 for this long-term analysis, we are now 9% over the amount of 2022, 13% above the amount of end of 2025, and also 2% above the amount end of Q2 2025. Sorry. Let me remind you that 2022 was for WashTec a year where we saw significant catch-up effects after the pandemic and some unusual high order intake from key accounts. If we would choose 2023 as a starting point, the long-term increase would be much higher. Looking a little bit more in detail, we see a very positive double-digit growth in orders received in North America, where in Europe, the orders received are only slightly down. Overall, order backlog is in good shape and gives us a good view of the top line in the coming month. Let us now turn to our guidance 2026. In general, WashTec confirms its guidance for 2026.

We expect revenue growth in the mid-single digit % range, which is strongly supported by the current order backlog. EBIT should grow disproportionately higher than revenue growth. Given the results for the first six months, WashTec needs to speed up, but we expect that the delays in the efficiency projects can still be made good over the course of the year. Exactly this is where we, the management and the complete team, need to focus on. Furthermore, we need to follow the additional measures mentioned before. In terms of free cash flow, we expect an amount of EUR 35 million-EUR 45 million, and ROCE should come in with a higher rate than 2025. As always, I must state that this guidance is subject to uncertainties. All these figures reflect our expectations based on current knowledge and current macroeconomic situation. Any significant deviations in either direction are not factored in here.

This concludes my remarks. Thank you for your interest so far. Now handing back to Kevin.

Kevin Lorenz, Investor Relations Manager, WashTec: Before we start our Q&A session, let’s have a quick look at our communication cycle for 2026. You can see that the first half of the year has been quite busy. We not only went to the HIT Conference in Hamburg and for Roadshow to the Nordics, we also hosted two more capital markets webcasts. The first one in March was focusing on our business line service, and the second one described in detail our newly developed strategy for North America. Feel free to watch the recordings, which are all available on our investor relations website. Looking at the coming months, we are pleased to participate at the Berenberg Goldman Sachs German Corporate Conference in Munich in September and the Deutsches Eigenkapitalforum in November in Frankfurt. We are looking forward to see you there. Besides that, we are currently discussing some further ideas.

Sign up for our email distribution list so we can keep you posted once our ideas are final. With that, we would now start our Q&A session. If you wish to ask a question, you may use the Q&A function in the webcast and follow the instructions. Also, feel free to write any question you might have. We can read them for you. I see there is already one question from Moritz Weiß from Discover Capital. He is asking: Can you quantify how adjusted EBIT margin in Q1 or H1 would have been without the ongoing one-off efficiency costs? This would give a clearer picture for the margins. Thank you.

Andreas Pabst, Chief Financial Officer, WashTec: Thank you, Moritz, for asking that question. I anticipated that somebody would ask it. You understand that we do not give very detailed numbers on every single project we are doing. What I already said in the presentation is that it is a lower single-digit million number. Something around between EUR 2 million and EUR 3 million, in that direction, you have to think about.

Kevin Lorenz, Investor Relations Manager, WashTec: Okay. Maybe if Moritz Walz first posted another question before we hand over to the next one. Can you quantify Oh, no, sorry, this was the question. We have a remark from Stefan Augustin. Mr. Augustin, you should be live now. Can you hear us?

Stefan Augustin, Analyst: Hello. Thank you. Thanks for upcoming my questions. I recognize that the SmartCare share of the installations has gone up quite quickly. To my understanding, there is a connection between more SmartCare, digitalized processes, bundled contracts, more consumables and service business sales. My question is, especially in the consumables, haven’t seen a pickup and you related that to weather. Should there not be also this underlying positive trend? Let’s say, how do you feel is the weather situation so far in Q3? My personal perception is the weather is quite okay. A bit hot, but okay. When do we start to see the growth rate in the consumables business?

Andreas Pabst, Chief Financial Officer, WashTec: Okay. Thanks for those questions, Stefan. Maybe one thing in respect of SmartCare Connect and our sale of consumables. There’s another thing I would guide your thinking. You know that we are currently introducing the global scope configurator, which is a tool which empowers, enforces our sales reps in the field that they sell the machine and also sell digital projects. For example, they also sell the consumable long-term contracts. That is something which we have in place now. This is not only attributable to the SmartCare Connect. SmartCare Connect is a fully digital machine, that helps a little bit. The boosting will come, to my understanding, by this machine, but even more by this change in how we sell our offerings. The second question was, when do we see higher consumable revenues? Hopefully very soon. Smiling a little bit.

If you compare, maybe it’s also important to understand, if we compare this year with last year, and last year it was really outstanding the amount which we could sell in the first four or five months. As that is now on a normal level. What is important for us is, if we look back in this year, we see that overall the wash counts are going down a little bit, but the number of our consumables customers increased. That gives me a positive impression for the second half year, meaning with a huge installed base, with a good connection to the customers, with doing the right things in the sales process, I expect that the consumables will come up again.

Stefan Augustin, Analyst: Okay. You already hinted here parts of where I was actually targeting. When you say the number of customers increases, would you be willing to share a little bit by how much and actually also make a small difference as a tunnel consumes a lot more consumables than a rollover? Maybe a bit into, do we see that on the rollover side, or do we see both increasing customers on the tunnel and the rollover sides that are connected?

Andreas Pabst, Chief Financial Officer, WashTec: The question sounds easy, the answer is difficult. There’s a designated task force in place to approach tunnel customers, because we can imagine that tunnel needs much more consumables than a rollover. On the other side, we are also teaching our sales reps to address each and every rollover which we know and which we have in our portfolio. For tunnels, we are also really attacking third-party machines, let’s put it that way.

Stefan Augustin, Analyst: A statement on how much increase we have in the customer base? Okay. It’s okay if you don’t want to say.

Andreas Pabst, Chief Financial Officer, WashTec: May I not answer to those detailed questions about our customer structure? There’s an increase in the low single-digit %, but I do not want to name how much we have.

Stefan Augustin, Analyst: All right. Very fine. That’s okay. Coming back a little bit on the equipment margins and the progressions here. I understand that the installation efficiency program and the relocation to the Czech Republic takes time and the efficiency gains will come a bit later. My other question would then also be, we have a bracket on the modularization and the scope and the supply with the SmartCare ramp-up. Is that materializing as you had expected it?

Andreas Pabst, Chief Financial Officer, WashTec: We are making good progress. This is also a huge program, which has a lot of difficult milestones. I would say that as of today, some of the milestones we are really fully in plan. Some others are a little bit delayed, but not really, which I would say is significant. Yeah. Overall, yes, we are pleased with that program.

Stefan Augustin, Analyst: All right. Thank you very much. That would have been it from my side.

Andreas Pabst, Chief Financial Officer, WashTec: Thank you, Stefan.

Kevin Lorenz, Investor Relations Manager, WashTec: Thank you, Mr. Ausi. We have a follow-up question from Moritz Walz regarding his question on the adjusted EBIT margin. He’s asking regarding the one-off costs, low single-digit number for Q2 or H1 2026?

Andreas Pabst, Chief Financial Officer, WashTec: For H1.

Kevin Lorenz, Investor Relations Manager, WashTec: Good. We hope this is answered. Let’s go to Mr. Specht from Berenberg. He’s asking, "Hi, what slows the order book growth in Europe? Do you expect a rebound in invest in H2? Can you quantify the tax reimbursement in Q2?

Andreas Pabst, Chief Financial Officer, WashTec: Tax reimbursement. In general, the order intake, I start with.

Kevin Lorenz, Investor Relations Manager, WashTec: Order book growth.

Andreas Pabst, Chief Financial Officer, WashTec: I start with the order intake, order backlog, which we have in general. In general, the order backlog is higher than one year ago. It’s really markedly higher for North America, whereas for Europe it is slightly, so I’m speaking about a small little number, slightly lower in Europe. That has to do a little bit with how we took the order intakes over the last year and this year from some, let’s say, major customers. In general, we see that the order intake as well as the order backlog is still in a very good condition. It’s just, let’s say, more or less slightly lower than last year. Nothing which really gives us some headaches.

In terms of the tax reimbursement, you see in the cash flow statement probably, that has to do with our dividend where we always have to pay some taxes and then get it back. It’s quite a complicated topic. If you like, I can explain it you in a separate way, it has to do with the dividend which we paid.

Kevin Lorenz, Investor Relations Manager, WashTec: There is also one more question from Mr. Specht. He was asking if we expect a rebound in inventory in H2.

Andreas Pabst, Chief Financial Officer, WashTec: What we have done in the first half-year, when we saw that there was the conflict starting in the Gulf region, we looked at our inventories and increased slightly our safety stock, meaning we bought some parts where there might be some shortage in the future. We bought some of the parts where we thought there might be price increases, but that is done. We are currently on a good way. The amount I am speaking here about is, it is EUR 3 million to EUR 5 million, not really a big number in terms of inventory. Depending on how this conflict is going on, we also will reduce this amount again.

Kevin Lorenz, Investor Relations Manager, WashTec: We have a couple more questions from Claudio De Ranieri from Albemarle Asset Management. He is first of all asking, what should the P&L, EBIT benefit of your optimization of the manufacturing footprint look like in the coming years, in 2026 to 2028?

Andreas Pabst, Chief Financial Officer, WashTec: I guess that we already said in one of our Capital on Markets webcasts, there are a lot of direct and indirect effects. If you just think about the number of employees, or workplaces, not employees, the number of workplaces we are shifting from Augsburg to Czech Republic means that you have savings of about EUR 35,000 per year per every workplace. We are shifting 85 workplaces from here to there. That all in calculates to roughly EUR 3 million. On the other side, there might be some additional costs. Now we have three plants in Czech. On the one-hand side, on the other side, combining all these things, there also will be some benefits from process optimization. Overall, the rough number which we are calculating is this EUR 3 million.

Kevin Lorenz, Investor Relations Manager, WashTec: Mr. Specht is asking for the detailed Thank you for the detailed answer.

Andreas Pabst, Chief Financial Officer, WashTec: Oops.

Kevin Lorenz, Investor Relations Manager, WashTec: By the way.

Andreas Pabst, Chief Financial Officer, WashTec: You’re welcome.

Kevin Lorenz, Investor Relations Manager, WashTec: Okay. Another question from Mr. De Ranieri. You confirmed your full year EBIT guidance despite flattish H1 EBIT. What are drivers that would let you achieve your target? Which imply a high single digit, double digit EBIT growth in H2. Looking at H1 headwinds, mix admin costs, issues with efficiency programs, et cetera. What would stay and what would go away in H2 2026?

Andreas Pabst, Chief Financial Officer, WashTec: Why we believe in the guidance is there are multiple reasons. One reason is we really have a strong order backlog. We are seeing that our products are very well received in the market. I think that is really important, a key statement. On the other sides, we see that we are moving onwards with our efficiency programs. They kick in step by step. It’s improving, that also will contribute. I mentioned it somewhere in between the lines. In Q2 also, the management really took measures, meaning reducing costs, ignite cost sensitiveness, being much more prudent in new hirings. Only eight I explained. That is where we also will save additional spendings, and that is why we believe that we can manage the guidance for 2026.

Kevin Lorenz, Investor Relations Manager, WashTec: Great. The one last question from Nieri. North America, nice sales development in H1, but still low profitability, low single-digit. What is the short-term and mid-term outlook for profitability in North America? When will you get a decent high single-digit margin here? Is that a matter of quarters or a matter of years?

Andreas Pabst, Chief Financial Officer, WashTec: Maybe there you are probably aware that we did a capital markets webcast recently only focusing on North America. Nonetheless, I think it’s important to state that now we have North America 2.2% EBIT margin. I’m not happy with that one, but it is really a big improvement compared to last year. We want to be every year better than the year before. In the mid-term, meaning three years roundabout, we want to see here 8% to 9% EBIT margin in North America.

Kevin Lorenz, Investor Relations Manager, WashTec: Good. So far, there are no further questions. I guess we’ve answered all of them so far.

Andreas Pabst, Chief Financial Officer, WashTec: Thank you. Thank you, everybody. Thank you for asking those questions. I am really happy to answer them. I hope you get all the answers you wanted to know. Having said that, on behalf of the management, really thank you all for attending today’s earnings call. I know it is pretty hot outside, so therefore I am even more thankful that you joined today. Stay in touch. Bye-bye.

Kevin Lorenz, Investor Relations Manager, WashTec: Again, my side. Thank you very much.

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