WashTec Aktie

Ladies and gentlemen, we warmly welcome you to the Capital Markets Webcast Part 4: Strategy in North America of the WashTec AG. I'm pleased to welcome WashTec's CEO, Michael Drolshagen; CFO, Andreas Pabst; as well as Uwe Scharfy, CEO and President at Mark VII. These gentlemen will guide us through the presentation in a moment. After the presentation, we will move to a Q&A session.

And with that said, I'm handing over to you, Mr. Drolshagen.

Ladies and gentlemen, welcome to our Capital Markets webcast on the WashTec Group's North American strategy. Let me begin with a clear overview. U.S. is the largest and most dynamic carwash market in the world and thus a key market for WashTec and in particular, for Mach VII. For us, North America is not just another market, it is the market that will determine whether we can further expand our global leadership position.

Against this backdrop, today's focus is on three [ categories ]. First, service is the backbone of our business. Service secures our installed base, fosters customer loyalty and acts as a firewall for our market share.

Second, digitalization and data are our key drivers of efficiency. They enable higher availability, better control for the customer and thus, structurally higher profitability.

And third, now a stronger focus, consumables and green are key growth drivers. Chemicals are not just an additional business, they are a highly profitable recurring revenue stream and a central component of our one-stop shop approach. At the same time, we see an opportunity here to clearly differentiate ourselves with sustainable, efficient solutions.

And finally, a significant portion of the market is not yet actively addressed by us, our so-called sleeping customers. The interplay of service, digital, chemicals and green and targeted market development is the core of our growth strategy in North America.

Before we dive into the details, let me briefly introduce today's panel. I'm pleased to say that today, you will be guided through our strategy from three different perspectives. I'll start by providing an overview of the market and our current situation. Next, Uwe Scharfy, CEO of Mach VII, will take over and walk you through our U.S. strategy and the road to 2030. And finally, Andreas Pabst, our CFO, will explain the financial goals and implications.

It is important to us to provide you with a comprehensive integrated overview today from our understanding of the market to the strategic measures and the financial implementation.

Let me briefly go over the agenda. We will start by providing an overview of the North American market and our performance to date. Building on that, we will present Mark VII's strategy with a clear vision for 2030. This is the central part of this presentation. We will then move on to the financial targets and the economic rationale. And of course, we'll have plenty of time at the end for your questions.

The overarching theme is very clear. What have we learned? What will we do differently in the future? And how does that translate into profitable growth? Let me start by making a clear statement. The performance of our North American business in recent years has fallen short of our expectations, and it is important to us to address this openly.

The key point is, for a long time, we did not sufficiently understand the market based on its own logic, but instead viewed it too much through our European lens. However, the U.S. market operates fundamentally differently, different customer needs, different operating models, different economic levers. At the same time, North America is our largest [ single ] market and thus, of course, high correspondingly strategic importance.

The conclusion is clear, we do not need incremental adjustments, but rather a distinct market-specific strategy. And it is precisely this new perspective that we would like to present to you today.

When we look at the numbers, it becomes very clear why we had to take action. For one thing, our business has underperformed expectations. For another, there is a clear structural difference between North America and Europe.

In North America, our business is more equipment driven, while in Europe, service and consumables account for significantly larger shares. And this is precisely the key point. Service and consumables are the high-margin, stable and recurring sources of revenue. This means our previous mix in North America was not optimal for sustainable profitability.

Furthermore, we have not consistently addressed the market in certain segments based on our customer segments and needs. Our conclusion is we must delve deeper in the market, clearly define where we want to succeed and deploy our resources there in a targeted manner. With this focus, we expect significant revenue growth accompanied by disproportionately high EBIT growth.

To understand the new strategy, one point is clear. The U.S. carwash market differs fundamentally from the European market. I would like to illustrate this across four dimensions. First, equipment. The market is dominated by tunnel systems with extremely high throughput. Speed is a decisive factor. A wash cycle often takes only 2 to 3 minutes.

Second, customers. U.S. vehicles are larger, usage is more intensive. And above all, subscription models are widespread and are driving usage up sharply. Third, our operators. Operators expect maximum convenience and integrated solutions. This extends to automated chemical supply and data-driven operations. Fourth, the market structure. We see consolidation at the top tier combined with many specialized niche providers. And overall, it is a clearly cash-driven business.

The bottom line can be boiled down to three key concepts: speed, convenience, integration. And it is precisely these three dimensions that we are aligning our strategy with.

Let's now take a closer look at the structure of the North American car wash market because it is crucial to our strategic approach. What you see there, the market comprises around [ 70,000 ] professional carwash locations with one dominant segment, tunnel carwashes. These tunnels not only account for a large portion of the installed base, but also represent the core economic market as they have very high utilization and throughput rates. In contrast, our classic in-bay carwashes where we have traditionally been strong.

Here, however, we see two things. First, in the U.S., the share of brushless solutions is significantly higher than in Europe. Second, the importance of this segment in the overall market is lower than that of tunnels.

And this is exactly where our key strategic point arises. We are currently well positioned, but not sufficiently represented in all relevant growth segments. Another difference is the logic behind the segments. In the tunnel business, speed and volume are the primary factors.

In the EBA segment, flexibility and specific use cases play a greater role. And in areas such as jet wash or truck and bus, our opportunities are currently still selective with a priority on digitalization. Therefore, we must sharpen our focus, invest strategically in the relevant segments and where necessary, expand our portfolio in a targeted manner.

The key message is, therefore, the North America market is highly segmented and success means addressing the right segments with the right solutions. And our strategy is based precisely on this market logic. What we specifically derive from this? What priorities we are setting? And how we intend to further develop Max VII by 2030?

Uwe will explain now this to you in detail. Thank you.

Good afternoon, everyone, and thank you for joining us. Over the next 20 minutes, I want to take you to North America to show you the market we operate in, the company we have built there and the strategy that will carry Mark VII to 2030.

Let me start with the market itself because the opportunity in North America begins with demand that is large, durable and growing. Consider the foundation. There are 288 million registered light vehicles in the United States. Americans are driving more miles each year, they are washing their cars more often, 12 to 13x per vehicle on average every year.

Total consumer spending on car washing in the U.S. runs to about $16 billion to $18 billion annually. Registered vehicles, rising mileage, increasing wash frequency, growing consumer spending; every one of these driver points in the same direction, up.

The slice of that world we serve directly is equipment, service and consumables, which is a $2.3 billion market across the U.S. and Canada in 2025, and it is growing. By 2030, we expect it to reach $3.3 billion with a compounded annual growth rate of around 7%.

With that, equipment and consumables are of similar size, roughly $0.9 billion and $0.8 billion, respectively, while service adds about 30% on top of equipment revenue. There's also a truck and bus segment worth an additional $300 million in the U.S., a segment where Mark VII is not presently today, but one we are aware of.

So the picture is clear, strong underlying demand, healthy structural growth and a market that rewards the player who is closest to the customer. That is the backdrop of everything that follows.

Next, the competitive landscape, and this is where the opportunity sharpens. The North American market shows a very particular shape, strong consolidation at the top and highly fragmented field below. A small number of players generate more than $100 million in revenue. Below them sits a long tail of smaller competitors in the $50 million to $100 million range, the $20 million to $50 million range and many more under $20 million.

A couple of points of orientation. [ Sunny's ] sits at the large end as a reference point for scale. And while ISTOBAL appears on the landscape, it does not generate its main revenue in the U.S. and Canada. So it is not fully comparable to the players competing head-to-head in our market.

Why does this structure matter? Because a market that is consolidated at the top and fragmented below is a market where we are focused, well capitalized full-line player can take share, both by competing for the large multisite operators and by consolidating the fragmented middle. That is precisely the position Mark VII is building towards.

So who is Mark VII? Let me give you the company at a glance in four numbers. 60 years of history, founded in 1966 in Nevada, Colorado, roughly 5,500 Mark VII carwashes operating across North America today, around 275 committed employees in North America. And of this, approximately 130 service staff backed by additional local partner technicians on the ground.

Those numbers tell you something important. This is an established, deeply rooted business with 6 decades of installed base, a substantial service footprint and a committed local team. That installed base and that service presence are the platform on which we build everything else.

I would like to show you now a small video about Mark VII. Operator, please start the video.

[Presentation]

So let me add little more details on the business itself. Mark VII has been part of the WashTec family since 2006. We operate from 2 locations: Our headquarters in Nevada in Colorado and a facility in Burlington, Ontario, which is serving the Canadian market. Our Colorado footprint comprises of 3 buildings, about 120,000 square feet on 8 acres with a team of around 275 people.

On the product side, we combine local manufacturing with the best of WashTec. In Colorado, we fabricate and assemble equipment built for the North American market, local for local. [ DSL1 ], which is a durable speed tunnel, ChoiceWash, AquaJet, SoftWash and JetWash.

From the WashTec in Germany, we import the SL2, which is a durable high-end tunnel; wheelwasher, AquaPur as well as some key components such as the side brush carriages, wheel jets and hub scrubs.

What sets Mark VII apart is the completeness of our model. We cover the United States and Canada through both direct sales and distributor network. We provide full service coverage, and we serve the consumables market with our own private label chemicals. Mark VII is a fully integrated equipment service and consumables business, anchored in the North American business, powered by WashTec.

Here, you see our product portfolio at a glance. It spans the full spectrum of professional vehicle washes from in-bay automatics to mini, short and long tunnels, self-service and water reclaims as well as ancillaries such as dryers, reverse osmosis, all those cover the needs of fuel and convenience retailers, professional carwash operators and fleet customers. Mini tunnels are considered when an in-bay automatic is converted to a tunnel in a very small space, usually minimum of about 37 feet.

With that market and the company in mind, our road to 2030 rests on five strategic pillars. Pillar #1, geographical expansion. For us, focus means servicing the top states directly, so we can be as close as possible to our customers.

Pillar #2, service excellence. Our customers benefit from maximum uptime, high convenience and reliable availability. Pillar #3, true green leadership, sustainability that pays off. The smartest way to run a sustainable car wash is less water, less chemistry, lower cost, proven at scale.

Pillar #4, digital and intelligence, digital solutions that empower our customers and differentiate Mark VII from our competitors. And pillar #5, the portfolio completion. Winning as a one-stop shop closing portfolio gaps to share, scale faster and monetize profitable niches. Let me take you through each one of them.

First, geographical expansion. North America is not a homogeneous market. As the map shows, the top 15 states each have more than 1,600 carwash sites, while the bottom 15 have fewer than 200. Where we compete matters enormously. Our expansion logic follows the volume. We are expanding in the high-volume wash markets with direct sales and direct service because direct presence keeps the customer relationships close to Mark VII.

In some areas, we will operate hybrid territories alongside our distributors. Equally important, we are establishing direct chemical sales channels in these high-volume markets. This is what lets us participate in the large tender of major multisite operators, tenders that are simply not accessible through an indirect model. It directly supports our push into the convenience store and fuel station segment as well as professional carwash operators.

The ambition shows in the coverage numbers. Today, our direct coverage reaches around 180 million people for equipment and 55 million for consumables. In the future, that grows to roughly 270 million for equipment and 190 million for consumables. On the consumable side, that is more than threefold increase in direct market access.

Second, service excellence. In this industry, uptime is everything. Every hour a wash is down, our customers lose revenue. So service is not a cost center for us, it is a competitive weapon. We are investing in three areas: First, a new training excellence center, enabling faster onboarding of service technicians and extending to the training of our customers and distributors. That is driving efficiency and higher quality across the network.

Second, we are strengthening our leadership in remote monitoring. Today, we already solved 65% of all issues remotely from Colorado for our key account customers. We are now rolling that capability out to all of our North American customers, meaning faster responses and increased uptime.

And third, we are transforming towards data and AI-driven service. By combining the data we already hold with artificial intelligence, we enable smart systems that deliver faster, more efficient response times and transparent reporting for our customers. The outcome is higher uptime and with it, stronger customer loyalty.

Third, true green leadership. Sustainability in our industry is not a marketing exercise, it is economics. Less water and less chemistry mean lower operating costs for our customers, green that will pay off.

Our path here has three steps. We will introduce our own formulations for true green chemicals. We will significantly expand our consumable sales network geographically, as I described previously under pillar #1. Once a certain volume threshold is reached, we see the potential to in-source consumables production in the future. A clear growth path has been built. Mark VII intends to lead the green transition of the North American carwash market and to capture the margin that comes with it.

Fourth, digital and intelligence. The headline is the launch of CarWash Assist in North America. CarWash Assist is being rolled out successfully across Europe today, and we will bring it across the Atlantic. The goal is simple: reduce downtime, increase uptime. And it is a key tool for easing operations at convenience stores and for enabling unmanned sites, which is where this market is heading.

Alongside, we are expanding my.markvii.net, our digital interface for the customer, billing, service reports, machine status, water quality, electricity consumption, wash programs, configurations, key performance indicators; everything the operator needs in one place. Digital is how we differentiate and how we stay embedded in our customers' daily operation.

And fifth, portfolio completion. Our ambition is to win as a one-stop shop, and that means four work streams: one, modernization of our in-bay automatic solutions. We will strengthen our core market leadership by enhancing existing technologies and closing featured gaps with most features launched by 2028.

Two, in-sourcing of certain key components currently sourced externally. This increases our margins, improve system integration and gives us greater control over supply, with most of this in-sourcing completed by 2028.

Three, the introduction of new innovations, targeted product and features launches between '27 and 2029 that are new to the North American market to close the portfolio gap and sharpen our differentiation.

And four, entry into a new product segment. We see significant market potential in the segment we do not yet cover today. For a customer base, we already serve very well. We are currently evaluating several avenues to enter this market, and the timeline will depend on the avenues we select.

Let me close by being direct with you because you deserve candor as much as ambition. I'm not satisfied with where Mark VII stands today. We have a 60-year heritage, a strong installed base and the backing of WashTec, but we are not yet the player where we should be in the North American market. There's a great deal to accomplish. I see that clearly, and we are ready for that challenge.

We're not here to defend a position, we are here to build one. Our ambition is clear: make Mark VII a successful leading player in the car wash equipment manufacturing business in North America. And what gives me confidence and not optimism, it is a concrete plan with concrete actions behind every commitment.

Let me show you what I mean by walking through what Mark VII will be in 2030 and the actions that will get us there. By 2030, along with our partners, Mark VII will compete to win in every product category that matters in this market.

The white space is real. Every gap we close is share we capture and revenue we add, a modernized in-bay automatic line, a wave of innovations landing through 2029 and a brand-new segment we do not touch today. That is a broader product engine and a bigger addressable market for the same customers we already serve.

Mark VII will sit right next to its customers, not at the end of the distribution chain, but face-to-face in the markets that drive the volume.

Direct sales, service and chemical channels in the highest volume states unlock something we cannot reach today. Those are the large multisite tenders where the biggest contracts are won. This is how we convert proximity into pipeline and pipeline into recurring revenues.

Also by 2030, Mark VI will be a great development center in North America and an engine that is building products designed for this market. We will be putting our money where our ambition is by at least doubling our research and development efforts. That investment, combined with in-sourcing key components that we buy externally today lifts our margins, tightens our supply control and turns innovations from a promise into a pipeline.

Uptime will be our signature. Today, we already fixed two out of three issues remotely from Colorado with our key account customers. Tomorrow, we extend that reach to every customer in North America and supercharge it with data and AI. Every hour, a wash stays running in perfect condition is revenue for our customers and loyalty for Mark VII. In a market where service revenue writes on top of equipment, this is not just better service, it is a higher margin and a more defensible revenue stream.

The most important of all, our people. None of what I have just described happens on a slide. It happens because of the Mark VII team. We have 6 decades of deep part one knowledge sitting inside this company. Knowledge of these machines, these customers, this market that you simply cannot buy. By 2030, we will have grown the knowledge, not lose it. And we will have paired it with fresh talent and fresh ideas that push us forward.

Experienced personnel that mentor the next generation combined with a new thinking will energize our veterans. We need both. We will invest in both because the strategy is only as strong as a team that executes it, and this team is ready.

Mark VII will not just participate in the green shift, we will lead it. Our own true green chemical formulations and a far wider consumables network turn sustainability into a profit center with higher-margin products for us.

In this industry, green is not a cost we absorb, it is a value we create. So this is my response to you. Yes, there's much to do. We will not pretend otherwise. But every one of these commitments is backed by a specific action on a specific timeline in a market that is large, growing and ready for a focused full-line player. With the action we are planning, I'm convinced we will succeed with our Strategy 2030. We know where the growth is, we know how to reach it, and we have started executing.

Thank you very much for your attention. I would like to hand now over to our CFO, Andreas Pabst.

Well, thank you, Uwe, for this good and very profound explanation of our strategy in North America. Hello, everybody. Good to have you here. Ladies and gentlemen, let's now touch some of the financial implications about what you have heard.

I guess you fully understand that we cannot dive too deep into the figures due to the competitive reasons. Nonetheless, please find our key statements for North America on this slide.

In all discussions we had over the last months developing the strategy for North America, we focused on rising revenues with overproportional development of our profitability. We are targeting an up to 50% increase of revenue until 2030. And in terms of EBIT margin, we want to knock on the double-digit be.

All that, we want to achieve by an optimized capital allocation, meaning low single million CapEx per annum in North America, ramping up local R&D team with strong ties to our team in Europe. And what Uwe already implied, we have learned from the past that we cannot and will not do all by ourselves. We open up for partnerships where appropriate to relieve our own spend.

If we now look a little bit closer to the expected revenue stream, we see that on a long term, Mark VII was somehow a $90 million company influenced over the last years by some contractual effects with key accounts and by the general market trends, as Uwe explained before. That is what we change now with our new strategy. Especially with our geographical expansion and our investments in service excellence, we will be able to increase revenue in the next 2 years.

We expect a double-digit CAGR. We have clear target figures for every new sales rep and service technicians we hire in the designated new areas, meaning strong focus on controlling of the expected results is given. Midterm, we still believe that we can achieve a mid-single-digit CAGR. That further increase will be supported by our additional investments in our ambition for true green leadership and the enhancement in our value proposition and our product portfolio.

Just a few words about what we believe in the development of recurring revenues, meaning service and consumables. As you have seen on Michael's starting side, this is very important for us also in North America. Therefore, we focus on that business here as well. We expect to increase the ratio of recurring revenues until 2030 to 40% to 50%.

Coming now to EBIT. As you see in the past, the total EBIT was very volatile, mainly related to up and down of equipment business and in general, shrinking over the last years. This, we will break with our recurring revenues and our strategy initiatives for service excellence and our improving digital intelligence. Both programs are focused on higher efficiency and profitability.

The strategic initiatives for geographical expansion, portfolio completion and the green leadership will come along with higher revenues and additional EBIT.

For me, it is important to mention here that for every strategic initiatives, we made detailed business plans. You understand that I will not go into the details here, but I can assure you that for every move we make with our new North America strategy, we, the management board of WashTec, [ requested ] that we have an overproportional growth in EBIT. We are aiming for a double-digit EBIT margin until 2030 also in North America. And I am very happy that our local management, Uwe and his team is here fully on the same page.

Having said that, I thank you for your participation and open the floor for questions you might have. Michael, Uwe and myself are happy to answer your questions. Therefore, I'm handing back to the operator now.

Yes. Thank you very much for your presentation. Ladies and gentlemen, now it's your turn. We are opening the Q&A session now. [Operator Instructions] Mr. Wolfgang Specht, can you hear us? Okay. I think we have some complications with Mr. Specht. I will check our Q&A chat box where we have not received any questions so far. So Mr. Specht, I will invite to unmute yourself again. But I think -- Mr. Specht maybe you can type in your question into our chat box, and I can read it out loud for you. All right.

[Operator Instructions] We have not received any questions in our Q&A box yet. I will send Mr. Specht another request to unmute himself, just in case. But I think there are no questions so far, nor other risen hands than the one I have received from Mr. Specht. With that said, we already received one from Mr. [indiscernible] in our chat box. He says, can you elaborate on the CapEx plans for America?

Yes, I'll take this question. Thank you, Mr. [indiscernible] for asking this question. I guess I said it in, let's say, side sentence. So we made really for every single step we want to make, we made really detailed business plans that includes, for sure, all the CapEx we need for the different plants.

What is important or what can I say here is that we do not see for the next years and in any year really a high CapEx spend. It is always low single million-digit number, which we have there. So it's overall a little bit more than we have today. That's correct. Yes, we need to invest, we want to invest. But overall, not really big money.

All right. Thank you very much, and thank you very much, Mr. [indiscernible] for your question. I don't think Mr. Specht is able to unmute himself at the moment. So Mr. Specht, if you still want to ask a question, maybe you can put it into a chat box or you can always contact Investor Relations at WashTec.

We have received another question in our chat box by Mr. James [indiscernible]. He's asking, you mentioned that the structure of the market is quite fragmented other than the 4 or 5 large players. Would it make sense for you to play an active role in consolidation if the opportunity arises?

Okay. What we want to do as a first step is to go in the specific segments to get a larger market share. And for sure, if we see a chance to consolidate, then we take this also into consideration for sure.

All right. Thank you very much, Mr. [indiscernible], for your question. We have not received any further questions so far or risen hands. [Operator Instructions] But I think there are no questions so far anymore. I mean, as we have not received any further questions, we may come to the end of today's call. No, there's no question anymore.

Well, thank you for your interest in WashTec. With that said -- actually, there's another question by Mr. [ Vyas ]. He's asking, is the order intake in the U.S. still positive in the U.S., quotation marks, "the momentum"?

Yes. I would like to answer this. We have very good positive momentum, especially in this year. Order intake even at the end of last year has picked up, considering the economic factors. But I must say that it's really good. We are above target in order intake. I see the momentum.

There was some -- in '23, '24, people were holding back a little bit. But it's definitely '26, I see a major uptick on this one. So we see in all segments also. It's for us in the tunnel as well as the in-bay automatic. Throughout all of our customer segments, I see positive developments.

Perfect. Thank you so much. We actually made it, I think. Mr. Specht, can you hear us?

Can you hear me? Yes. The system is tricky. Three or four questions from my end, if I may. First, regarding your service employees for the U.S., the figure 135 looks very low. How are your plans to ramp that up to get better coverage? Or are there any plans to add more direct personnel?

The second one is the sales slide of Mark VII since 2023. I'm very sure you're making detailed channel checks. So to which competitors did the business you were missing out since then went mostly?

Third question is what happens to the tail end of the market? The colleague already raised the question, if there will be an active consolidation or do you also believe that some smaller competitors will simply fade out and leave the market? That would be the first three [ questions ] from my end.

So maybe I can answer the first one. So the first one in terms of how to ramp up the service personnel, we have been putting -- it starts all with hiring the right people, right? This is very important and putting up a proper training program.

And one of the pillars is also training excellence center, where we not only train ourselves, our employees, but we're also going to train our distributors and as well as some of our customers because some of our customers have service direct, right? So it's all about how well you perform. Especially in America, the service is everything. I mean our customer doesn't want to wait a full day to get this machine fixed.

How are we going to scale this up? I think with the right HR strategy, and we're also using some of the weaknesses from our competitors that we currently see in the market, especially on the service side, we're taking advantage of that and also to recruit the right people in the right places.

But hiring the right people is also we're doing a thorough analysis of each area where we add more people because it requires a certain amount of machines that need to be in that market for a certain amount of people.

And with our new training strategy, also our people are continuously tested and retested to see the skill level. So if there's any lags in certain areas, we can retrain them, reskill them and -- but we're very strict on every level, not just in service, but also in the sales performance and chemicals to make sure our people are performing to our expectations.

The second question?

The second one was about which competitors did our machines go? Maybe if I answer the question and then you can add something.

Mr. Specht, so if you look at the revenue streams we had over the different years, you can see that in -- from 2023 onwards, we had declining revenues in North America. I guess that is much more related to two topics. One topic is that the overall market was shrinking a little bit to our understanding, that was also for some of the competitors.

And late in the year, so meaning the year before, we had some topics with one of our main customers where a big contract was still under negotiation. And during the negotiation, this customer did not order too much machines. So that is mainly the two explanations for the shrinking revenue streams from 2023 to 2025.

Yes, it's definitely, it was in the middle of the negotiation. And if you look at the North American market, it was declining in -- you saw the already the order intake in '23, not just with us, but throughout the industry. And if you talk to our competitors, there's similar pictures to this. And '24, you really saw it in '24, '25. However, as I mentioned, it has been greatly picked up now at the end of '25.

And it was -- yes, when you have like the large key accounts and when you're in the middle of the renegotiation of a year-long contract, then they start to be a little bit more careful in that specific year. Thankfully, we have secured long-term contract with our key accounts with all of them. And so this is very positively to see. And I think we're going to have momentum out of this in the next years, for sure.

And what you also can see is like the geographical expansion. So also, we make sure that we have the right people, salespeople, measure them accordingly. And we're expecting also an increase in sales in terms of certain areas that we determined would be would be good for the future.

Third question I take. There was a question if we see more consolidation or disappearing of our competitors or small competitors in the U.S. market and if there's any tailwind there.

We think that the market was consolidated, especially between 2020 and 2024. We don't see a huge consolidation in the next 2, 3 years. Today, there is more disappearing. We expect that the one or the other small machine provider or machine producer will disappear because of the competitiveness of the other active in the market.

Thanks a lot. If there are no other questions, I would continue with the last one. Okay. On the chemicals side, if I understand you right, you will, for the time being, continue with a white label solution. Are there any important competitors in the U.S. on the equipment side that have their own chemicals production? Or does everybody use a white label solution?

So there's definitely some of the larger players that do have their own chemical production, of course. And it always -- when you have your own chemical production, it always helps with the attach rate, right, when you can sell bundles of equipment, chemicals and service. So yes, there are some of them, the larger ones. But the smaller ones, they usually do white labeling.

And it's a calculation, to be honest. And if you reach a certain number, meaning so many thousands of tonnes, then it is worth exploring and investing into your own chemical production. But a certain number has to be reached.

Okay. So for the time being, you're fine with white label, but if your growth plans materialize, it could be a natural step to move to known production?

Yes, effectively.

Thank you very much, Mr. Specht for your questions. In the meantime, we have received one more question by Mr. [indiscernible]. He's asking a question on the strategy of in-sourcing. Some of the components that are purchased from third parties, what are the main components that you are referring to? And how complicated is it to in-source them? Is it more of an R&D issue or a question of manufacturing capacity?

I don't think -- well, one is the industry buys from each other in the carwash industry. Of course, there's a certain -- we used to have different ancillaries that were in our portfolio, that were no longer in our portfolio. One is, for instance, the reverse osmosis that I mentioned earlier. We're offering this again because we can -- based on our cost structure, we can produce it at a very competitive rate.

And yes, there are certain components that we buy in. I wouldn't want to go into the details yet into which components we're looking into. However, there are certain skills that is required to do the R&D project to develop something, but we look deeply into it, what are we paying into the -- or what do we have to pay and what will it cost us? So we have like very detailed business plans before we make decisions to produce something or develop something on our own and then produce something on our own.

And in terms of R&D capacity, yes, that was -- I don't want to say a roadblock, but it was basically in the past, something that we didn't have enough capacity. But as you saw in my presentation that R&D will at least double in the next years. And we already have specific plans. We already are hiring the right people for that. And so R&D, yes, we need to bring more people in.

I also want to combine the experience of what we have with our seasoned engineering team together with newer technologies and fresh minds that come enter the industry. In terms of production capabilities, we have 8 acres. So we have a really large facility, we have 3 buildings. And so production floor is -- manufacturing space is not a problem for us, we can expand further. So we're ready.

It was a more R&D approach in the past, and we have managed now to build up teams driven by U.S., but also supported by Augsburg employees to speed up here, and we have already started with one or the other topic.

Thank you so much. Mr. [indiscernible] has another question. He says, sorry, one last one. Is it still economic to source some components from Augsburg? And could these be in-sourced directly in the U.S. as well?

Yes, that is -- we made here already very detailed examination of our complete supply chain after the Liberation Day. And so as of today, we are only delivering 30% of our purchasing volume from North America is coming from Europe. That is already pretty low, I would say. Nonetheless, we are enforcing our purchasing and our supply chain team in North America to do even more local.

So overall, once again, yes, I think we are in a good shape, but we are moving further to be even more local for local.

13% is a low percentage.

All right. Thank you very much. We have not received any further questions in our chat box or risen hands. So I would say we come to the end of today's Capital Markets webcast. Thank you for your interest in WashTec. If you have any further questions at a later time, please feel free to contact Investor Relations.

A big thank you also to the management team for the presentation and the time you took to answer all the questions. I wish you all a successful day, and I'm handing over to you, Mr. Drolshagen, once again for your closing remarks.

Yes. Ladies and gentlemen, on behalf of the Management Board, we would like to thank you for your interest in our company and wish you a pleasant day. Thank you very much.

Thank you.

Thank you.

Good afternoon, ladies and gentlemen, and welcome to WashTec's earnings call on the results of Q1 2026. My name is Kevin Lorenz. I'm Investor Relations Manager at WashTec.

With me, I have today our Chief Financial Officer, Andreas Pabst, who will provide a brief update on WashTec and guide you through our quarterly results. Following his presentation, the floor will be open for questions.

Also, you might have just seen a short video on our newest product, JetWash Connect during the waiting room, which we are very proud of. If you are interested, you can find this and further videos on this new product on our WashTec website or you can also just send us a short mail, and we will share it with you.

But without further ado, I'm now handing over to our Chief Financial Officer, Andreas Pabst.

Thank you, Kevin. Also from my side, a very warm welcome. I really appreciate that you are in our call today. Let me first give you some brief statements about our current topics at WashTec before I shift over to the figures of the first quarter of 2026.

Let's start with our new JetWash Connect. We already mentioned the planned launch of this new product during our last call on the fiscal year 2025. But now we are live. And as you can imagine, we are very proud on our product launch on April 14. Our new JetWash has some really good features for the users, for our customers, the operators as well as for us.

First, the new steel structure. We own the complete construction details, and that puts us in the position that we can source the necessary steel parts locally instead of shipping them from Germany to all over Europe.

Second, Wash & Pay leads to the fact that the average paid time increases by 25% to 30%. That means more revenue for our customers.

And third, the new polish is a real eye catcher. You can really see the difference when you clean your car with this feature.

With all these advantages, we believe that we can expand our business in this production category even further. Already with our last generation, we were able to achieve double-digit million revenue in Europe in 2025 that stands for approximately 10% of our equipment business. So we expect more to come.

That brings me to my next topic. You are already aware that we are optimizing our production. This is one of the biggest levers we currently have in the company. We have made a major step in the future development of our production network. The grand opening of our new plant in Czech took place on March 26. We started with the transfer of preassembly, assembly and logistics to the new building. The state-of-the-art facilities ensures process stability and efficient material flows while enhancing preassembly capacity with clear structured process change.

Currently, we have already transferred around 50% of the total jobs to be transferred. That means on the other side, we currently have planned higher costs. There are people in Augsburg who train the new colleagues in Czech. The handover is in quite good shape, and our employees are working very well together. We expect that this higher capacity need will be resolved before the end of this year, and then we will collect the full saving from this lighthouse project.

Let me now briefly address the potential risks related to the conflict in the Middle East. From a revenues perspective, our direct exposure in the affected countries is limited and remains modest. However, the broader uncertainty can lead to a temporary reluctance to invest, particularly impacting equipment demand on a global level. This is something we are closely monitoring.

On the recurring side of the business, our assessment remains unchanged. Based on historical data, higher fuel prices may lead to short-term adjustments in driving behavior, but we do not expect a structural impact on car wash usage. Accordingly, we see no material long-term risk to our chemicals and service revenues.

On the cost side, we are paying particular attention to supply chains and commodity prices, especially energy-related inputs and selected raw materials. For metals, we are in the lucky situation that we have secured a major part of our need until end of this year already in December 2025. For other parts, we are increasing our stock level cautiously.

Higher fuel prices, we counteracted with some surcharges for our customers in the field of service. Currently, we are discussing further mitigation measures and put them in place, depending on the duration of the conflict. You see we are prepared and do the utmost to keep the financial impact on WashTec manageable and to protect margins.

On this slide, which you probably already know, you see our main efficiency programs, which we are currently driving. And you are, of course, aware that these are already fundamental for our company. For sure, you also can imagine that not all of those programs always run 100% as planned. I have already given an update on the optimization of production footprint, where we currently have some planned negative impact on the gross margin, but where we are fully in line with our targets.

In terms of installation costs, here, we are facing some delays, which are -- influence our gross margin negatively. We somehow have underestimated the complexity of this job in some details and have intensified our efforts here. Our program for cost down of production and modularization is currently slightly behind time line, but overall, with no significant impact for the 2026 figures.

On the other side, our programs for quality excellence and the Global Scope Configurator are developing extremely well. Our quality cost per units are decreasing continuously and contribute to our profitability. The Global Scope Configurator has been rolled out now to 3 European countries and further to come. This program clearly delivers what we expected, a strong complexity reduction along the whole process chain from the customer order to production.

Now let's come to the figures for Q1 2026. Summing up Q1 in a statement. Revenue is good, especially in equipment in North America, improvement of profitability necessary. But first things first.

Starting with our revenues for Q1 2026. We achieved a new first quarter revenue record of EUR 111 million, representing an increase of 2.3% year-on-year. This growth was primarily driven by a strong performance in North America, particularly in the equipment business, supported by higher revenues with key accounts. In Europe and Other, revenues were stable overall compared to prior year.

On a business line basis, equipment revenues increased by 7%, while service remained stable. Consumable revenues declined mainly due to the weather-related lower wash volumes. However, the revenue decline was less pronounced than the drop in volumes, underlining the resilience of the underlying business.

Looking at our profitability, we see an EBIT of EUR 3.8 million. This is an EBIT margin of 3.4%, whereas on -- 1 year ago, we booked 4.5%. The shortfall was on the one hand side, expected by necessary expenses caused by some programs. Remember my statements to a production shift to Czech. On the other side, we saw a cost increase in terms of installation. Our measures we started are not finished and do not show positive effects in the first quarter, but they will come. We have full focus on this cost block.

Having a short view on free cash flow. The number is down by EUR 9 million to EUR 7 million. This drop doesn't make me too nervous right now as we have increased our stock due to the real good order backlog we have. Therefore, our net working capital increased to EUR 94 million and comparable number of March 2025 was EUR 82 million. So overall, Q1 was mixed in terms of financials and hard work is still in front of us. But given the strong top line as well as our current order book, we can look optimistic in the future, especially if we look at the development in equipment, what brings me to the next page.

In the first quarter, we see a clear differentiation across our business lines. Equipment was the key growth driver with revenues up 7% year-on-year. This growth was primarily driven by North America, supported by higher revenues with key accounts, while Europe and Others also showed a slight increase. Service revenues were stable compared to the prior year, once again underlying the resilience of our recurring revenue base. This stability is a key strength of our business model, particularly in a more volatile macro environment.

Consumable revenues were below the prior year level, mainly due to weather-related lower wash volumes. Importantly, the decline in revenue was less pronounced than the decline in volumes, which demonstrates the fundamentally sound operational development of our washing chemical business. Overall, we are confident with the growth of our top line.

Now let's put eyes on our segments. In Europe and Other, revenue remained broadly stable year-on-year. Earnings in the segment were impacted by planned temporarily higher costs, mainly related to the expansion to our Czech site as well as delays in the execution of certain efficiency initiatives, particularly in installation and logistics. I already gave some insights here. In addition, earnings were affected by weather-related lower activity in consumable business.

In North America, we saw a clear improvement in both revenue and earnings, driven primarily by higher equipment revenues with key accounts. The segment benefited from improved execution and more favorable product mix. Looking at the EBIT number, we see an increase in this KPI by EUR 1.4 million to now breakeven. This is the best EBIT in the first quarter in North America since 2017. Yes, that's remarkable.

Coming now to our EBIT bridge, showing the development of Q1 '25 to Q1 '26. The increase in group revenue in the first quarter generated a positive gross profit contribution, while at the same time, the gross margin declined year-on-year, coming from 29.3% last year to now 28.4%. This was mainly driven by a less favorable product and regional mix, including a lower share of consumables and a higher share of equipment business in North America.

In addition, gross profit was impacted by planned temporarily higher costs, primarily related to the expansion of the Czech site and delays in selected efficiency programs, as already mentioned. Selling expenses increased in line with revenue growth and remained broadly stable as a percentage of revenue. Administrative expenses are slightly higher compared to last year, mainly to ongoing IT projects.

On this slide, you see some more financial KPIs. Net income and earnings per share follow mainly our EBIT development. Our net financial debt is still in a very good shape despite the outstanding amount is higher compared to the same time 1 year ago. Reason for this is besides higher dividend payment and the share buyback program, we already mentioned higher net working capital.

On the following slide, you see our equity ratio and our fixed asset ratio. Both in a reasonable shape. In terms of employees, it is remarkable that we have increased our workforce by 94 year-on-year. Most of our new colleagues have been hired in the business line service followed by sales department.

Now to the equipment order backlog, as always, indexed basis this time is the year 2022. Equipment orders received was significantly higher in the first 3 months of the year than in the prior year quarter. This cut across both segments and was primarily due to the positive trend in North American segment, where the increase was even well into the double-digit percentage range. Therefore, as already mentioned, we have a very strong order backlog, plus 10% compared year-on-year, plus 16% compared to end of 2025. And by the way, the increase in North America is even stronger. This gives us a good view on the top line in the coming months.

Let's now turn to our guidance for 2026. In general, WashTec confirms its guidance for 2026 and expects that the delays in the efficiency projects will be made good over the course of the year. That is where we, the management and the complete team, need to focus on. We expect revenue growth in the mid-single-digit percentage range and an increase in EBIT that is disproportionately higher than revenue growth. The forecast does not make allowance for any further significant worsening of the economic situation due to the developments in the Middle East or other global disturbances due to some political statements and actions.

However, in addition to high volatility in raw material markets, we are currently seeing a significant increase in uncertainty regarding the future course of the conflict in Middle East and the resulting indirect economic impact. That doesn't help too much for stable guidance. So this time, it is even more important to state that this guidance is subject to uncertainties and all these figures reflect our expectations based on our current knowledge and significant deviations in either directions are not factored in here.

This concludes my remarks. On the following page, you will find our 2026 financial calendar. Thank you very much for your interest so far. Kevin and I are now available to answer your questions you might have.

[Operator Instructions] We have the first question from Stefan Augustin from Warburg Research. Mr. Augustin, we can hear you.

Great. I hope so. I have a couple of questions. So the first one is actually, can you elaborate a little bit more again on the headwinds? So when do you think which one of the headwinds is going to start to decline?

I mean, Czech Republic is probably second half of the year, so not Q2 yet. When is the element of the installation efficiencies going to kick in? And can you remind us on the SAP integration costs in Q1 '26 compared to the ones you might have had in Q1 '25? So that would be the first block.

Okay. So yes, you are right, the profitability or the increasing profitability for the transfer to Czech Republic will kick in more, end of this year, and we will see full effect according to the actual plans. And we are in the current time line, we are fully on track. We will see that in 2027.

In terms of installation costs, we are currently really a little bit behind. We detected some, let's call it, difficulties, yes, where we need to dig further and we need to create other solutions to come back here. So that means, I would say we are here now 1 quarter behind, but we will manage to come up with this one during the year.

And then you asked about the cost for the implementation of SAP. So if you look to the EBIT bridge, which is in the presentation, the deviation in administrative cost is more or less coming from this cost for the introduction of S/4HANA. So it's around about EUR 200,000.

Okay. The next one is the -- you mentioned that the orders that you received in Q1 are largely also on the U.S. side, but we should also expect growth and a positive book-to-bill in the quarter on the European side. Is that okay?

So if I look at the order income, I'm positive in Europe as well as North America for the first quarter. Both showed an increase compared to prior year. That is good. The increase was even -- just what I said was, the increase was even higher in North America. So yes, you're right with your statement.

And probably the weather, especially in Germany has been quite good in the second quarter or in April. So it would not be wrong to expect a better chemicals business in the second quarter. Is that a fair assumption?

Let me think about -- so currently, we have May 5, I guess. So the second quarter is not completely done yet. But looking at April was good washing weather, especially in Europe in one of our key markets. That's some headwind we have -- or tailwind, sorry.

Okay. And then maybe just switching back a little bit. The -- say, the headwind on the installation efficiencies, is that more in Europe or respectively, if we have in the second quarter, stronger volumes to expect from North America, would we still see a very or a sizable drop-through in operating leverage as the installation part is quite okay in North America?

That's really a good question. Thank you for that one. So the topic what we see in installation cost is mainly related to Europe. So the installation costs in North America are on a reasonable level if we compare it over the year and compare it to the targets we have.

And we have another question from Wolfgang Specht from Berenberg. Mr. Specht, can you hear us? We can't hear you. Sorry, okay, I see the question was actually in written form.

So the question is, connection is a mess still would have several questions. Okay. And so Mr. Specht, our provider in EQS has now also included an option that you can dial in via phone. Currently, many analysts have the problems that their banks are very restrictive with their IT and so if you can -- if it's possible for you, then you can also dial in via phone and there should be -- the procedure should be described. There should be a number that you have to call and then -- so let's maybe give him a little bit more time to -- if there's a question coming or not. Else -- I don't see any other questions right now.

So I don't know, should we give him another minute or should we.

Let's wait for 30 seconds and see if it works, if not yes. And that's also.

There should also be an option to write down questions in text form, also for everyone else who might still have questions.

So Mr. Specht, we really like to answer your question. So if it doesn't work right now, yes, probably then we can do it later on. That is for all the audience. But then I would say no further questions right now. So then ladies and gentlemen, on behalf of the whole Management Board, we really would like to thank you for your interest in WashTec and wish you a pleasant day. Thank you. Bye-bye.

Ladies and gentlemen, on behalf of the WashTec Management Board and my colleague, CFO, Andreas Pabst, I would like to welcome you to our annual press conference and presentation of the Annual Report 2025.

Before my colleague, Andreas Pabst, presents the figures for fiscal year 2025 and the outlook for 2026, I would like to give you an update on WashTec and present some of last year's results.

Ladies and gentlemen, 2025 was another year for WashTec that impressively showed we deliver, and we deliver reliably. Despite geopolitical uncertainties, high volatility in global markets and noticeable restraint in some industries, we are able to achieve, and in some cases, even exceed our strategic targets.

With sales of EUR 498.6 million, we have set a new record in the company's history and are those closer to the EUR 500 million mark than ever before. It is particularly pleasing that we have not only grown, but that our EBIT has increased disproportionately. The EBIT margin of 9.8% shows that our measures to increase efficiency optimize processes and focus on high-margin business areas are working.

We were also able to continue the positive development in terms of free cash flow. The improved operating performance and our consistent working capital management show that WashTec is financially strong, strategically clearly aligned and operationally well managed. These results are the result of hard work by our teams worldwide, our consistent focus on customer needs and our ability to grow profitably despite turbulent conditions.

Ladies and gentlemen, let me now take a look at the global market environment that shaped our 2025 financial year. 2025 was marked by exceptionally high levels of uncertainty in the economic and geopolitical environment. We saw our persistently tense geopolitical situation, high energy prices, rising interest rates and an overall subdued willingness to invest, especially in Europe. At the same time, other regions, especially North America and parts of Asia developed much more dynamically.

For WashTec, this environment means 2 things. On the one hand, we operate in an industry that is undergoing structural change. Operators today prioritize energy-efficient and sustainable technologies. They are looking for digital solutions and expect reliability in the supply and service chain. On the other hand, we see that investments are increasingly flowing to where cost certainty, automation and long-term profitability are guaranteed.

This is exactly where WashTec plays to its strength. With a clear focus on efficiency, digital services and sustainable solutions, we are strategically positioned to grow in a heterogeneous market environment, even if the overall economic situation remains challenging.

As we delve deeper into the market development, we see significant shifts in customer priorities. Operators, whether oil companies, car dealerships, car wash chains or individual locations are now increasingly investing in predictability and efficiency of their operating costs, speed of installation and service, digital control and transparency of our plants as well as sustainable technologies that reduce water and energy consumption.

At the same time, we are experiencing a professionalization of many operator structures, especially in Europe and North America. Demand is shifting towards premium technologies, remote service capabilities and integrated system solutions that combine hardware, Chemistry and digital services. What does this mean for us? This opens up attractive growth opportunities for WashTec. We offer complete solutions with a strong digital platform, state-of-the-art Chemistry and increasingly efficient machines. This integrated value creation, combined with our large installed base and an excellent service organization, gives us a sustainable competitive advantage.

All in all, the market environment clearly shows innovative strengths, efficiency and customer benefits are increasingly becoming the decisive differentiating factor, and this is exactly where we deliver.

One topic that is particularly preoccupying us at the moment is the conflict in the Middle East. Even though WashTec only generates small direct sales in this region, we see possible effects of indirect effects on our business model. On the one hand, we are affected by the development of energy prices, which has a direct impact on material, logistics and production costs.

On the other hand, distortions can arise in global supply chains that can lead to delays or cost increases. These effects are currently difficult to plan and require very close and ongoing monitoring of the situation. In addition, we see potential impacts on consumption and investment behavior, especially in Europe. Many operators are acting more cautiously, projects are being examined more intensively and possibly postponed.

At the same time, however, there are also opportunities for providers who are -- who offer stability, transparent processes and a high level of service reliability in uncertain times. For WashTec, this means in concrete terms, we analyzed the situation closely, we assess risks at an early stage and adapt our processes flexibly. Our robust value chain, the modernization of our sites and the professionalization of our logistics will support us in the event of a possible crisis.

A key driver for our positive earnings development in 2025 were our efficiency programs. We have worked on our cost structures, processes and production workflows in a structured, consistent and measurable way and will continue to drive this forward in 2026. For some programs, we have already been able to achieve efficiency increases in 2025, while for others, the full synergies will come in 2026 and 2027. This includes the optimization of our production footprint, the reduction of installation costs, increasing manufacturing efficiency, the further development of our product platforms and modularization as well as improvements in service and logistics processes. These programs have not only directly supported our EBIT, but they have also created the basis for further growth on the top line or cost reductions on the bottom line, both in the equipment business and in recurring revenues from service and consumables.

We consciously invest in efficiency because it strengthens our competitiveness and enables us to serve customers faster, more reliably and more cost effectively. 2026 will be a year of high strategic investments with a focus on our sites in Augsburg and Nýrany in the Czech Republic. We are investing more than ever before in modernization of production, the expansion of our logistics, the optimization of our assembly, the digitization and artificial intelligence of our workflows and processes, our training center for the education and training of our employees and customers; and last but not least, capacity expansion for future growth.

Our central element is a gradual relocation of preassembly volumes to the Czech Republic. In this way, we are creating the freedom in Augsburg to develop society into a modern center of excellence with a clear focus on process stability, efficiency and quality. These investments are not just a cost or capacity issue, they are a fundamental course for the future viability of WashTec.

Optimizing our production is one of the biggest levers we currently have in the company. A new state-of-the-art hall is being built in Nýrany, which will not only make our pre-assembly and logistics processes much more efficient, but will also enable us to centralize the entire module production at one location. This creates a clearly structured, consistent material logging. The modules are prefabricated in Nýrany and delivered reliably to Augsburg in stable cycles.

At the same time, we are continuing to develop production in Augsburg in depth. The focus on poor finishing results in leaner material flows, significantly shorter throughput times and a noticeably more stable production environment. Teams can fully focus on quality, precision and assembly excellence. However, the logistical advantage that arises from this new structure is particularly important. First, we create clear transfer points between module production and final assembly. Secondly, we reduce internal transport and complexity. And third, we increase predictability and reliability across the entire value chain.

The interplay of efficient module production in Nýrany and focused final production in Augsburg is a decisive step towards production that is scalable, more digital, more stable and overall, much faster and that optimally prepares us for future growth.

With SmartCare Connect, we set a milestone in our product strategy in May 2025. SmartCare Connect is much more than an upgrade. It's a completely new digital operating service and operator experience. Our customers benefit from higher machine availability, better maintainability, automated processes, remote access and diagnostic in real-time and a consistently improved total cost of ownership.

The rollover development impressively shows that the market is accepting the product exemplary, both in terms of order intake and sales. SmartCare Connect is a prime example of how we create real added value with digitalization.

2025 was also a year of significant product innovations. We have expanded the portfolio in all 3 business lines. First, in equipment. New wheel washing technologies improved tunnel components and further development of SmartCare Connect. Here, we have strengthened our portfolio in a target technological way. The new wheel washing systems ensure significantly better cleaning performance with gentler brush contact at the same time. Optimized tunnel components increase system reliability and to reduce service costs, and with stable market launch and further development of SmartCare Connect, we offer an even smarter, connected operation and service experience with higher availability and more efficient maintenance.

Second, consumables. MagicCare, high-end Polishes with already over 1,000 customers. The introduction of our premium chemical series MagicCare was a complete success. The high-quality Polish deliver visible shine, sustainable surface protection and improve the overall experience for end customers. The fact that more than 1,000 customers are already using MagicCare shows the strong market acceptance and profitable growth potential in the consumables business.

And third, our digital solutions. Easy Carwash Pro and 4U as well as CarWash Assist in the digital area, we have consistently developed our solutions. Easy Carwash Pro and 4U offer operators even more control options, and end customers are more convenient, fully digital user experience. With Wash Assist, we are introducing another innovation that makes the washing process more intuitive, faster and more transparent, and thus noticeable relieves both operators and end customers. This diversity shows that we are investing along the entire value chain from hardware to chemicals, to digital services and are thus creating an integrated system offering that further consolidates our position as an industry leader.

A special highlight in 2026 will be the introduction of our new JetWash. With JetWash, we are launching a completely redesigned self-service system to the market more modern, more digital and more convenient than anything that has existed before. The interplay of a new machine, and intuitive operation and payment concept, as well as MagicCare Chemistry takes self-service washing to a completely new level. How does Wash and Pay work? With Wash and Pay, we are introducing a new fully digital operation and payment system that significantly simplifies the entire washing process. The customer identifies themselves directly at the terminal via QR code, app or card. So system automatically activates the stored means of payment. Billing is accurate to the minute according to the actual period of use, completely transparent without coins, without preselection and without remaining credit.

Optionally, customers can use stored profiles so that preferred washing programs settings are immediately available. This way, we reduced complexity, increase convenience and create a modern self-service experience that meets today's expectations of digital self-service systems.

Why is MagicCare a real added value for the vehicle and the customer? With MagicCare, we are bringing our high-end chemicals to the SP sector for the first time. The benefits are clear and correspond to our performance promise and the lectures to MagicCare with our rollover machines and are immediately visible to the customer.

All in all, the result is a self-service launch we experience that is noticeably higher quality and in turn, means higher customer satisfaction and return rates for operators. Conclusion, JetWash is an example of how we interconnect innovations across hardware, digital services and Chemistry. It is further proof that WashTec uses its innovative strengths to create real customer benefits, intuitively, digitally, efficiently and economically.

That brings me to the end of my part. 2025 was a year of growth, innovation and steady progress. We made strategic investments, improved our operations, and at the same time, continue to drive our path towards greater digitalization, greater efficiency and greater customer value.

My colleague, Andreas Pabst, will now present the financial details of the fiscal year and provide a more detailed outlook for 2026. Andreas, the floor is yours. Thank you.

Yes. Thank you, Michael. Ladies and gentlemen, I would also like to extend a warm welcome to you all. I'm truly delighted that you have joined us for today's earnings call.

Before we get to the 2025 figures and the guidance for 2026, let me, as always, begin with the topic of sustainability. For WashTec, sustainability is not just an abstract buzzword, but the central component of our corporate strategy, which we continue to sharpen year after year, sustainability is firmly anchored in our strategy ecologically, socially and governmental. Through transparency, comparability and reliability, both for the public and for the capital markets, we position ourselves as a reliable partner in matters of sustainability as well.

Therefore, in the interest of transparency, we have presented the same charts and key figures on this slide, as in the previous year. And we have once again prepared our group sustainables -- sustainability statement for 2025 financial year in accordance with ESRS standards. This statement was reviewed by our auditor as part of a so-called limited assurance.

As part of the dual materiality analysis, we have clearly prioritized the sustainability topics relevant to WashTec. On the environmental side, this include, in particular, climate change, water and resource conservation as well as for the first time since 2025, the circular economy. On a social level, the focus is on occupational safety and since 2025, workers in the value chain.

On the government's level, the focus is on responsible corporate governance. The chart above shows the trend in our Scope 1 and 2 CO2 emissions since 2019. The message is clear. We are continuously reducing our emissions. Our next milestone is to achieve 50% absolute reduction in CO2 emissions by 2030 compared to 2019.

In social matters, we remain committed to taking responsibility for our people and being a reliable and fair employer to our employees. Equal opportunity is important to us. This is reflected, for example, in the proportion of women in leadership position. We aim for the proportion of women in management to correspond to the proportion of women in the overall workforce. Currently, the proportion of women in management stands at 19%, up from 17% last year, which is slightly higher than the 18% figure of the overall workforce.

We are also able to increase the water recovery rate calculated as the proportion of WashTec water recovery systems installed worldwide relatively to all WashTec car wash systems installed worldwide by 1 percentage point to now 23%.

That concludes our discussion on sustainable for now. You can find much more detailed information in our annual report.

Let me now turn to the 2025 figures. Ladies and gentlemen, the year 2025 can be summarized briefly. WashTec delivered guidance met, revenue growth in the mid-single-digit percentage range with above-average EBIT growth. But first things first. The 2025 fiscal year marks another important milestone for WashTec. With revenue of EUR 498.6 million, we have set a new record.

Compared to the prior year, this represents an increase of 4.6%. Adjusted by currency effects the increase is even 5.7%, which stands for breaking the EUR 500 million mark for the first time.

At the same time, we succeeded in further increasing our operating profitability. EBIT Increased by 7.5% to EUR 48.9 million, and the EBIT margin improved again for the third time in a row to 9.8%, up from 9.5% in the previous year. This development underscores the quality of our business model and is attributable in particular to the positive performance in the Europe and other segment.

Our company's operational strength is also evident in our cash flow. Free cash flow amounted to EUR 41.9 million, an increase of 6.1% compared to prior year. Overall, 2025, thus represents a clear continuation of our growth trajectory. Rising revenues, a further improved EBIT margin and robust cash flow generation. This creates a solid foundation for sustainable value creation and further profitable growth.

Overall, the Executive Board is satisfied with the fourth quarter of 2025, although the revenue in the fourth quarter at EUR 140.4 million was slightly below prior year's level. It is important to note that prior year's quarter was exceptionally strong, namely the quarter with the second highest quarterly revenue in the company's history. Broken down by segment, Europe continued to grow moderately in the fourth quarter.

While in North America, the trend was characterized by declining equipment demand and shifts into 2026. This is also reflected in the order backlog in North America, which is up from prior year, but more on that later.

EBIT amounted to EUR 16.5 million in the final quarter, also slightly below the previous year, but still with a very solid EBIT margin of 11.8%. We can be satisfied with this, but at the same time, we view the figures as an incentive for further improvements.

Let's now take a look at the breakdown of revenue by product. First, it should be noted that we were able to increase revenue year-over-year across all business lines, namely equipment, service and consumables. This is a very positive picture. The increases in the Service and Consumables segments were particularly encouraging, each exceeding 7%.

In 2025, equipment revenues stood at EUR 268 million, up by EUR 7 million from prior year. Sales in Europe region were particularly strong across all customer segments, more than offsetting the somewhat weaker business in North America. Thanks to the expansion of our capacities in -- and improved digital connectivity, revenue in the Service segment increased significantly by EUR 11 million to EUR 155 million.

We have also invested in the Consumables segment and expanded our sales activities. Favorable weather conditions in the first month of the fiscal year 2025 also supported the revenue growth here. Overall, we recorded a revenue increase of EUR 5 million in this business line, bringing the total to EUR 70 million.

Due to a relatively stronger increase in recurring revenues, e.g., Service and Consumables, the share of total revenue has risen from 43.9% in the previous year to 45.1%. This brings us another step closer to our long-term target of around 50%. Let's now turn to the segments.

In 2025, Europe was the growth region for WashTec. Our core markets of Germany and France, in particular, performed exceptionally well. Despite continued intensive competition, which is limited to a few manufacturers, WashTec achieved a very respectable increase in revenue of approximately 8%. All 3 business lines contributed to this.

As a result, EBIT increased by approximately 11% despite burdens such as those from IT projects or expenses related to the implementation of our corporate strategy. It's clear that our very well-developed sales and service network by far the largest installed base, and our investments are paying off more and more here. North America has developed in the opposite direction. Both revenue and earnings are significantly below the prior year's level.

We recorded low sales figures, particularly in Equipment segment. The protracted contract negotiation with major customers, which dragged on, especially in the first half of the year, could not yet be made up for in the second half of the year. Additionally, some installations were pushed back to 2026 toward the end of the year, meaning that the corresponding revenue could not longer be recognized into fiscal year 2025.

Overall, we cannot, and we will not be satisfied with our revenue and earnings in North America. That is why we are currently working very intensively on our future strategy. We will, of course, keep you informed as soon as we have reached the final decision on this matter.

On this page, you will find the familiar EBIT bridge. The increase in revenue and the improved gross margin contributed nearly EUR 7 million and nearly EUR 2 million, respectively, to the rise of the group EBIT to EUR 49 million.

Gross profit increased at a faster rate than revenue rising by 5.8%. The key drivers of this positive development were higher business volume in the Europe segment and efficiency enhancement programs that had already been launched earlier in the year. The gross profit margin rose slightly from 31.0% to 31.3%. The increase in selling expense of EUR 5.2 million resulted from higher outbound freight costs associated with the rise in revenue as well as from the expansion of the sales organization in connection with the implementation of the corporate strategy and the launch of new products.

Administrative expenses in the fiscal year were impacted, among other things, by higher IT expenses for ongoing projects such as IT costs for the plant S4/HANA implementation and new software for service optimization. Expenses related to employee profit sharing also contributed here.

Overall, earnings before interest and taxes rose by 7.5%, reaching EUR 48.9 million. This corresponds to an EBIT margin of 9.8%, marking yet another increase compared to the prior year. On the following 2 pages, I would like to briefly discuss a few additional key figures and how they have changed compared to the prior year.

Despite a significant improvement in EBIT, earnings per share of EUR 2.29 are slightly below the prior year's level. This is due to a EUR 4.5 million increase in tax expenses, primarily resulting from tax reversals related to deferred taxes. As a result, the tax rate now stands at 33.9%, up from 26.7% in previous year.

The financial debt remains, in my view, in a very healthy thing. At the end of the fiscal year, the EBITDA leverage ratio remained unchanged from prior year at 0.8%. Net operating working capital is also roughly at the prior year's level.

WashTec's equity ratio stood at a very solid 28.6% at the end of 2026, although this is below the prior year's figure of 31.7%. In addition to the higher dividend payout, this is primarily due to negative effects from currency translation as well as our share buyback program, which I will discuss briefly later.

The number of employees increased by 91 reaching now 1,861 as of December 2025, up from 1,770 in the prior year. We have expanded our capacity, particularly in the service business.

Just a quick note on our ROCE, we were able to significantly improve this metric over the course of the year with an increase of 1.2 percentage points to 24.8%, we achieved the increase we have predicted. Here too, WashTec is on the right track.

Let me now say a few words about our dividend proposal. WashTec has pursued an attractive dividend policy in the past and will continue to do so in the future. We want to let our investors share in the company's success through an attractive dividend and/or share buyback programs. The Executive Board and Supervisory Board will, therefore, propose to the Annual General Meeting scheduled for May 12, 2026, at a dividend of EUR 2.50 be paid per dividend entitled share. This represents an increase of EUR 0.10 compared to prior year.

In addition, on November 6, 2025, we launched a share buyback program for a maximum of 100,000 shares. We acquired these shares by March 13, 2026, for a total of EUR 4.8 million. Details can be found on the next page.

Overall, with the dividend and the share buyback program, we believe we are providing our investors with an appropriate share of the once again improved earnings before interest and tax situation.

Now regarding the order backlog. End of 2025, our order backlog was 9% higher than the previous year. The chart here shows the long-term relative trend compared to the base year 2021. As you can see, the order backlog relatively to this base level stands at 105% at the end of 2025, which is a strong level.

Given the different performance of our segments in 2025, it is important to note that the order backlog at the end of the fiscal year was higher than previous years in both Europe and North America. In percentage terms, it was even higher in North America than in Europe. All in all, this gives us a solid foundation for the coming months. However, given the current geopolitical situation, some of those certainties we want to program it no longer seem to exist.

Let's now turn to the guidance. The war in the Middle East certainly posed significant challenges for all of us. Michael has provided a detailed report on this. You can rest assured that we are keeping a close eye on current events and will respond as quickly and effectively as possible.

Furthermore, potential impacts from the implementation of the strategy of North America, which is currently being developed have not been factored in our guidance. In the guidance for 2026 presented here, we have taken into account all the significant factors known as of today. That said, the WashTec Group remains committed to its goal of profitable, largely organic growth for 2026 fiscal year as well.

We see ourselves as a comprehensive solution provider in the vehicle wash business delivering maximum value to our customers. With this focus, our central goal is to continuously improve operational performance and steadily increase customer value through sustainable technologies and digital innovations, among other measures.

Based on a largely stable price level and a solid order backlog as of the end of 2025, the company expects profitable growth for 2026 fiscal year. That is, we anticipate revenue growth in the mid-single-digit percentage range and an EBIT increasing that is disproportionately higher relatively to the revenue growth. We expect free cash flow to range between EUR 35 million and EUR 45 million.

In addition, we plan to increase our capital efficiency measured in ROCE by further 0.2% to 2.0 percentage points. As a nonfinancial performance indicator, we will again use the accident frequency rate for 2026 and aim to bring it back to below the level of recorded in fiscal year 2024. But please allow me to point out once again that all these figures reflect our expectations based on current knowledge and significant deviations in either direction are not factored in here. This concludes my remarks.

On the following page, you will find our 2026 fiscal financial calendar. Thank you very much for your interest. Michael and I are now available to answer any questions you might have.

[Operator Instructions] And we have a question from Stefan Augustin.

Can you hear me, actually?

Yes, we can hear you.

I have one particular question in detail, and that is pertaining to the Q4 business in Europe. I noted that it is a little bit down, and it is a bit difficult to square it up because we see the revenues in absolute terms being slightly up, the EBIT being slightly down. So can you walk me through here? And is that something that we should extrapolate a bit going into the first half of '26. Yes, that to start.

Maybe I'll start with an answer, and if you like, you can add something. Thanks for raising that question, Mr. Augustin. So yes, it's true that the EBIT margin in Europe in the fourth quarter is a little bit down compared to prior year. One has to do with some of our efficiency programs where we are not at the stage where we want to be. installation costs, I can mention here was not where we want to be in the fourth quarter, but that will definitely be improved. And another thing is that we decided that all our employees should participate in the good result. And therefore, we decided that they should have a small bonus. And this is booked in Q4 2025, whereas it was not booked in the corresponding year, 2024.

Okay. So concluding from that one, Q1 should look more or less according to the expectations. Did you bake in the forecast some cautiousness as it is -- well, you have already elaborated a little bit that it will be kind of a hockey stick going into '27. But I thought that '26 could be a bit higher. So is there, let's say, from all the current macro developments baked in some cautiousness with respect to that outlook? Or is it a factor of when the measures will kick in and there will be an accelerated part towards the latter part of the year? And thus, it is a run rate element.

I also take the question? Yes. So Mr. Augustin, yes, once again, thanks for this question as well, yes. So that is exactly what we already mentioned, I guess, in our Capital Markets webcast, too. If I have it right in mind, there are 2 main effects. One is paying in for the top line. And the second effect is paying in for the gross profit.

When we realize the efficiency gains, which we expect from our efficiency programs. And there are a lot of programs, as you know. Some of them are really, really well on track. For example, like Michael mentioned, that we have shifted people from Augsburg to Czech, we have the opening ceremony. Is that the right word for our Czech plant already in March? So that is really, really well on track.

Today, that's the idea, that's why we are not there.

Importance there. So -- and some others are maybe slightly a little bit behind where we wanted to be right now, but we believe that we can accelerate throughout the year, and then we can speed up. And if we are able to do this, then we are still believing in the figures for 2027. That is what you're referring to, that we can achieve it. But yes, in that way, it is kind of a hockey stick.

And we have another question from Richard Schramm. He wrote, can you please give us an idea what size the efficiency gains have in percentage on value, which you expect from the production optimization in 2026?

That's easy to say. We have shifted already in 2025, 20 people, 21 exactly from here to Czech Republic, and we will shift additionally 62 people to come, yes, that's correct. And each person, we have calculated by around EUR 30,000 cost reduction, or if you multiply this, and you get the efficiency gain only due that program in 2026.

If you have further questions, you can either write your question down or press the blue Q&A button and if there are no question, probably I add something to the program question.

What we have seen in the ramp-up of installation project that we have to refocus a little bit on the new machine, SmartCare Connect, which was ramping up in a very good way for us from a percentage-wise, as I have presented some minutes ago. And due to that new machine we had to train also all our subcontractors on a global basis, and that was impacted us in the time schedule of the project of the program. So we see that there was also a reason of the Q4 results, where we thought we can achieve more savings, and we're working heavily to get the savings in 2026.

Also with the hub concept and the installation trolley, which we now have implemented from March on, we have now the hubs rented and can now start also to start this process in the best way.

We have one more question from [indiscernible] from Berenberg. He's asking which components could drive free cash flow to upper or lower end?

Components -- what we are in general doing, we are -- I think we have a pretty good net working capital management. We will intensify this once again for this year. We believe that with the higher revenues, which we plan for this year and the higher profitability that we will have the same range like last year between EUR 35 million and EUR 45 million, why is it in that range, not even higher because as we said, as Michael showed, we have higher CapEx this year a little bit. So therefore, the question is -- therefore, we will be in the same range. So what will it drive to the higher end or the lower end, if we do not need all the CapEx, which we have planned could be, then it will be on the higher end or in between or so. But currently, I guess, the middle is pretty well.

Another question from -- again from [indiscernible] from Berenberg. How is the status of contract negotiations with U.S. customers? How do you see the likelihood of striking deals in 2026?

Customers? U.S. customers. Okay. So we -- with the key accounts, we have negotiated, and we see in the order intake already the rollover are coming in. And we see also the first requests from our big key account customer in the tunnel area. So this is done and also the signature, regards Service and Consumables is also ready and finished.

So maybe I add here. So because it was part of my speech that in the first half year of 2025 in North America, we really suffered that this major contract was in, let's call it, permanent negotiation. We saw then in the second half year, a really good order intake from this customer. And on top of that, we are now able to deliver also some tunnels to this customer, which we were not -- which we did not in the past. So -- at the end of the year, it's much more positive than at the beginning of the year.

And some time, it's for us a good number.

Another question from [indiscernible]. You indicated the necessity for further measures in the U.S. Can you provide more color on this?

Only on a very high level because we are in working out strategy for the U.S. and aligning with the Supervisory Board. Therefore, there is no final strategy discussed and implemented. But we see from a -- we see 5 pillars where we want to focus in the future. One is the regional aspect, or we have deeply investigated on which region we should attack. There is a service and consumables, possibility to grow our business with specific measures where we see all the business in the future, which we currently do mainly with subcontractors and externals. And we see our equipment that sustainability and water could be a big differentiator between us and our competitors in the future.

Okay. So -- there's only one more message from [indiscernible] from Berenberg. Thank you, and wishes you all the best for 2026. Apart from that, I currently don't see any further questions.

So I would hand over the word to our CEO, Michael Drolshagen.

Ladies and gentlemen, on behalf of Andreas and Sebastian, the Management Board, we would like to thank you for your interest in our company, and we wish you a pleasant day. And thanks, and goodbye.

Bye-bye.

Ladies and gentlemen, we warmly welcome you to the Capital Markets webcast Part 3 deep dive service of the WashTec AG. And after the presentation, we will move to a Q&A session. With having said this, I'm handing over to Mr. Lorenz.

Hello, and thank you for tuning in to our first Capital Markets webcast. My name is Kevin Lorenz, and I'm Investor Relations Manager at WashTec. For everyone who is new to this format, we started our Capital Markets webcast series in July last year in order to create a format where we can share more details on our business areas and on our strategic developments outside of the quarterly earnings calls.

The first webcast from July was about WashTec's general strategic direction and our digital solution, EasyCarWash PRO. The second Capital Markets webcast in November looked more closely at our business line consumables and at the different efficiency programs within our group. And today, we will have a closer look at our business line Global Service. Of course, all presentations and recordings are available on our Investor Relations website. With me, I have today our Group Chief Executive and Chief Technology Officer, Michael Drolshagen; our Group Chief Financial Officer, Andreas Pabst; and our Head of Business Line Global Service, Eric Ferreira da Silva.

Looking at today's agenda, in a second, Michael will outline the general importance of the service area for the WashTec Group, followed by Eric, who will provide a deep dive into our business line and present one of our newest digital solutions, the CarWash Assist. Last but not least, Andreas will provide a financial summary. And in the end, there will be a Q&A round.

Now before we start, just a very quick reminder. Tomorrow, we will publish our financial report for the fiscal year 2025. We would be happy to see you during the press conference in the morning at 11:00 a.m. or during the earnings call in the afternoon at 3:00 p.m.

With that, I'm handing over to our CEO, Michael Drolshagen.

Thank you, Kevin, and welcome to our third Capital Markets webcast. Today, we would like to give you an in-depth insight into an area that whilst open operating behind the scenes is crucial to WashTec's success, our service. For us, service is far more than just a support function. It is a central component of our value creation and the key to offering our customers what really matters in the Car Wash business, maximum uptime, the highest quality and a seamless experience for end users. Everything we do at WashTec, whether innovations in our product portfolio, digitalization or efficiency programs ultimately contributes to one goal, keeping our customers' operations running safely and profitably. Today, we will show you why service, in particular, plays such a pivotal role in our overall strategy.

Before we delve deeper into the area of service, let's briefly set the scene. The industry is changing and significantly so. Operators are facing a shortage of skilled workers, rising demands for service quality and a greater need for uptime, whilst at the same time, the number of carwashes is stagnating in many markets. For us, this means that WashTec must offer solutions that tangibly simplify our customers' day-to-day operations. As presented in our first webcast, our overarching goals as a solution provider are, therefore, clearly defined and embedded in our strategy. First, comfort and ease of use. We design our products and services to be intuitive, reliable and easy to use without the need for specialist knowledge for both our internal and external customers. For operators, this means less complexity in their day-to-day operations and for their customers, a convenient hassle-free car wash experience. Simplicity is a core element of our customer promise and runs through our technology, chemicals and service. Secondly, business success for our customers. Our aim is to deliver clearly measurable business value for all stakeholders throughout the entire product life cycle. We achieved this through, among other things, excellent products, high availability, strong chemistry, efficient processes and increasingly through digital services and subscription models that support recurring revenue and higher customer satisfaction.

Third, sustainability in chemistry, water and operations. For us, sustainability is not a secondary consideration, but an integral part of our performance promise, resource efficient cleaning chemistry, optimized water treatment and energy-efficient system solutions. Our aim is to combine environmental impact with business benefits in the interest of both our customers and the environment. And fourth, quality throughout the entire life cycle. We view quality as an ongoing commitment from development and production right through to ongoing operation. Real-world usage data, continuous improvements and technical innovations ensure that our systems perform reliably for many, many years. Our service team plays a key role in this as quality ambassadors in the field. And this is exactly where service comes into play. Uptime isn't achieved through good products alone, but through seamless, reliable and ongoing support. Whilst the sales team is in contact with the customer every few years, our service technicians are on site, carrying out regular maintenance or repairs and are, therefore, the most important point of contact for building quality, trust and loyalty. This is our defense against our competitors, whether they are from Europe, the West or the East and Far East. When we talk about transformation at WashTec, service is one of the areas undergoing the most significant change. We are evolving from a traditional reactive approach to service towards becoming a data-driven, proactive and digital solutions provider. What does that mean in practice? In the past, our service offering was primarily based on traditional full service contracts. This meant that we took full responsibility for maintenance and servicing, but without digital support or data-driven transparency.

Service deployments were predominantly only triggered for regular maintenance or once a fault had already occurred. We could, therefore, only react once the customer reported a problem. And the first point of contact was our helpdesk, which provided telephone support but had only limited insight into the actual system status. And last but not least, remote support was possible, but more as an additional service, technically limited and without a continuous data foundation.

Let's take a look into today. First is, My.Carwash as a digital platform for our service. With My.Carwash, we are creating a central digital platform through which operators, technicians and our support staff can jointly access real-time information transparently, intuitively and at any time. Second, digital connected systems. Our systems are now fully connected. They automatically send operational data, status messages and error notifications to our platform, thereby enabling a whole new level of service quality. Third, preventive fall detection. By analyzing condition data, we identify problems before they occur. This reduces unplanned downtime and ensures significantly higher system availability.

And fourth, increased uptime through monitoring and automated alerts. Continuous monitoring, automated warnings and intelligent notifications enable a service that runs in the background before the customer even notices anything. And tomorrow, our technicians are supported by digital tools, intelligent resource planning, automated spare parts, recommendations and AI-supported diagnostics. This enables them to work faster, more efficiently and with a higher first-time resolution rate. Our commitment is clear. We guarantee our customers stable, reliable and highly available operation every day. Service has always been part of our DNA. Now we are taking this area to the next level.

Today, WashTec boasts one of the densest and most efficient service networks in the industry, a genuine competitive advantage, around 1,800 employees worldwide, over 700 of whom work in service. They work daily to ensure the availability of our machines. What makes us the industry leader an extensive service network always close to the customer, excellent availability. 98% of all calls are answered directly and still in person. Rapid spare parts supply, decentralized warehouses and express logistics reduce downtime to a minimum and transparency and efficiency, remote support plus real-time status updates, data-driven fault diagnostics. Our service organization is our economic moat. It creates liability, customer proximity and it protects our market position. And it is our ear to the customer. No other unit gathers more feedback, more experience and more operational insights.

Particularly important point. Our machines do not need servicing because they are unreliable, but because they operate under extreme conditions. Good service ensures a longer service life, higher customer satisfaction and stable recurring revenue. At WashTec, service is not a cost center. It is a strategic value driver. The sales team sells the first machine, service team sells everyone after that.

And with that, I hope you enjoy Eric's deep insights. Eric, the stage is yours.

Thank you. Dear ladies and gentlemen, it's a great pleasure to welcome you today. My name is Eric Ferreira da Silva, and I have the privilege of leading the global service business line at WashTec. Over the next 20 minutes, I will take you on a deep dive into the world of WashTec service, our footprint, our performance and our strategic direction. A few moments ago, Michael Drolshagen outlined WashTec's strong positioning in service leadership. I would like to build on that by highlighting the true scale and strength of our global service network. Across 14 countries from Germany and Austria to the United States of America, Canada, New Zealand and Australia, our service entities operate under a unified centrally coordinated structure from our headquarters in Augsburg.

Why is such service footprint of importance for our customers? Our car wash sites are regularly visited with an average of 6 to 7 interventions per year, resolving our customer cases in 87% with the first intervention. Our footprint is not just impressive, it is essential. It ensures that our customers receive local support in their own language with consistent quality and internationally certified standards. WashTec service is generating more than a quarter of million service reports annually. We are able to serve our customers efficiently all over the world, thanks to WashTec attractiveness as employer with a strong brand, local entities adapting to market conditions and proving the best working conditions possible as well as personal development through an established competence management system.

Dear ladies and gentlemen, with this slide, I would like to provide you the service revenue perspective. Since 2021, our service revenue has grown at a compounded annual rate of more than 8% and the share of the service business line has risen from 26% in 2021 to 31% in 2025. This growth is driven by expanded regional coverage, strong pricing power and best-in-class service performance. Let's describe the activities performed by the WashTec service organization, leading to this high revenue level with the following slide.

Our service organization delivers a broad portfolio of activities. Digital services, a powerful digital platform offering real-time insights into machine usage, status, maintenance history and annual cost. The WashTec service is installing our equipment at customer site as part of the machine delivery and handover process. We are able, thanks to the support of our partners to install complex sites in record times all around the world. By such, ensuring the highest performance and quality right after commissioning the equipment. We cooperate with construction companies and architects to provide a complete functioning site to our customers. This activity represents around 30% of the total working hours performed by the organization, in this case, mainly by partners.

Preventive maintenance. WashTec service is maintaining the equipment on a regular basis to secure correct functioning and best washing quality. On request for high users in extreme environments, WashTec service is providing an extended preventive maintenance plan.

Repairs. WashTec service repairs all technical installation related to car wash systems at our customer location within the best-in-class reaction time and quality. Through remote support and our helpdesk, we answer our customers' inquiries and incident notifications. A large share of incidents can be resolved remotely through the cooperation of our customers on site and our helpdesk. Preventive maintenance, repairs and remote support account for a share of 55% of the activities. The service organization is ensuring the implementation of our warranty obligation and goodwill support.

Spare parts management, administration training account for around 7% of the activities. We have now a good understanding of WashTec service activities. With the following slide, we will describe how those activities relate to the service portfolio and market segments. We differentiate between 2 main service models. First, vehicle and spare parts are related to customers without having a service contract with WashTec, representing around 60% of pre-consolidation service revenue. WashTec is reacting to customer incident notification and solve those in 87% of the case as the first intervention. Our customers are contacting WashTec through helpdesk available in local language. Spare parts are provided to the customer side either through a web shop order or through an order triggered by the helpdesk.

The second type of service model is service amendment contracts. Those are tailored frameworks for key accounts and non-key accounts, including remote monitoring, guaranteed response times and full maintenance packages. Our service contract offering is adapted to the market segment, the local requirement and is combining many different types of service activities. Just to mention some of those, remote monitoring, intervention within 4 hours after incident notification, preventive maintenance, site activity dashboard and many more. For key accounts, we guarantee service level for their complete network spread across several countries. Service cases are managed according to key account requirements and IT systems. Financial contract management is adapted to our customer needs.

On the other side, our non-key customers are profiting in all countries from our best-in-class service performance. Through full maintenance contract agreements, our customers secure their cost base for their WashTec equipment until end of life, giving them visibility on their profit pipeline. Our market positioning supports our pricing strategy, best-in-class service for our customer paired with a strong pricing positioning. Today, WashTec is servicing 70% of the WashTec equipment installed basis. 30% of the installed base is classified as sleeping customers, a large potential to develop further the service activities in our region.

Now we have a good understanding of the WashTec service portfolio and market segments. With the following slide, we have a look at the regional structure. Over the past 60 years, we have developed into a full service provider in the world of car washing. In the equipment sector, this includes our rollover systems where the car stands still and the system moves back and forth and tunnel system where the car is pulled through the system. Of course, we also wash buses and lorries; and those -- for those who prefer to do it themselves, we have our jet wash system in our range.

In addition, we have water treatment, which is becoming increasingly important and our chemicals and aftersales service. Europe and other countries are representing an installed base of more than 38,000 sites. EUR 125 million service revenue, where 40% of our customers are under service amendment contracts. Around 70% of the WashTec machines are serviced by WashTec with around 490 technicians. Each technician has an average of around 70 machines under his responsibility. We see a large potential with client service and increase in technician density in selected regions.

North America is representing EUR 31 million revenue with more than 5,500 units as installed basis, 30% of the size being under service and maintenance contract. 5% of the equipment are covered by the WashTec service with around 90 own service technicians and several local partners. The machine density per technician is around 32. North America potential results in our benchmark online service offering and regional increase of workforce. Overall, WashTec service covers 65% to 70% of the installed base with more than 580 technicians for a yearly revenue of EUR 155 million in 2025.

Looking now at our competitive landscape in Europe in particular. Our market is fragmented, but no competitor in Europe matches our service network density. Our main competitors are the ones active in the carwash equipment business. None of our competitors is able to provide in Europe a comparable service network density. The service offering is a crucial criterion for many customers, especially for key accounts at the time of purchase. Here, we compete with Christ, Istobal and others being manufacturer and service providers. We compete in terms of the overall solution and the total cost of ownership. Since we don't normally service third-party machines, our service competitors are small local service providers or large full-service gas station service providers.

After having investigated our competitive landscape, how do we envisage WashTec service growth and profitability in the future? We will continue to grow steadily service revenue through building service contract with equipment purchase, enlarging our product portfolio by introducing new smart and digital products, further increasing our service coverage in areas without service today and also increase our service capacities in areas with a large concentration of equipment, service offering to car wash related areas. While steadily increasing revenue, we are operating more efficiently, thanks to digital tools, data-driven decision-making paired with advanced AI solutions. Efficient upskilling and onboarding of our staff and reducing significantly the effort for installation of our customer sites and changing our logistic model to a hub-based one. I will further develop this later on. And we sustainably operate by reducing the CO2 emissions, thanks to higher remote servicing. WashTec service is also improving the longevity of our machine.

Dear ladies and gentlemen, we are not certainly curious on how we concretely do this. So let me show you an example for Germany with the next slide. We see here an exemplary service heat map for Germany. The small squares are depicting our technicians and the dots of our customer sites. By combining our equipment data, type of equipment, age, last intervention with the data related to our service technician, the stock on their van experience, the distance to travel, we are efficiently exploiting our service business. Furthermore, AI tools will support soon on reduction in the service deployment effort. We have in several regions with growth potential, increased the number of technicians.

In 2025, the number of technicians has increased by more than 50 full-time employees. Acknowledging the service growth potential given by the market potential around 30% sleeping customers, we are introducing further service type in our portfolio. Here, we distinguish between digital and smart product offering and service extending further our portfolio and activities at our customer side. The new digital and smart service product are real-time monitoring the equipment through our digital backbone and digital platform. We can react to any anomalies reported by the equipment before the staff on site is noticing any breakdown. We are then proactively coordinating with our customers the needed actions to solve the anomaly. As example, we are covering the complete installed base of a large key account customers in North America with this service.

CarWash Assist. This is a further evolution of the remote monitoring. Thanks to video streams and interaction with the wash customer, we are able to reset the machine, restart the wash program and many other remote functions. I will further detail CarWash Assist in a couple of minutes. Our digital platform, MyWashTec is offering real-time information to our customer and will be further deployed into the installed bases. We are also introducing EasyCarWash PRO/4U, which is our solution for a customer to offer a subscription service to their customer. Our EasyCarWash PRO is featuring an app-based user interface on one side and an automatic registration through plate recognition at the washing side on the other side. On a more traditional side of service offering, we are cleaning the wash bay on a regular basis, recycling the mud from the water reclaim system or refilling chemicals at our customer site. This service offering is being actually pushed and developed.

Ladies and gentlemen, let us now turn to a particularly effective lever in our efficiency program, reducing installation costs. In a highly competitive market environment, it is crucial to achieve maximum efficiency, not only in production, but also in the delivery and installation of our systems. Why is the topic of installation so important? Currently, installation costs account for a double-digit percentage of machine sales. This is a significant proportion that has a major impact on our results. At the same time, we see that installation capacity repeatedly become a bottleneck, especially in times of high demand. That is why we have put together a comprehensive package of measures that addresses several levels.

Our strategic goals are clearly defined. We are significantly shortening the installation process. Our goal is to reduce throughput time by around 15% to 30%. We use existing capacities more flexibly and efficiently in order to avoid bottlenecks and respond more quickly to customer requirement. And we are reducing the overall cost of installation in the long term. How do we achieve this? A key element is the introduction of the hub concept where -- which we will rollout gradually from the first half of 2026. Regional hubs will serve as consolidation centers where machines and components are bundled and optimally prepared for delivery. This will enable us to significantly reduce delivery time to customer. In addition, we are making our installation teams more flexible. This means that we are setting up the teams in such a way that they can be deployed quickly and efficiently depending on demand and the order situation. This allows us to avoid idle times and better cushion peaks.

Another important point is close integration of processes between sales, purchasing, production installation. By harmonizing and standardizing these processes, we are reducing interface losses and avoiding unnecessary complexity, especially with peripheral and small parts, which have often led to delays in the past. What do we expect to achieve? The program is already well on track. We are confident that these measures will not only significantly reduce installation costs, but also further increase customer satisfaction. After all, faster, more efficient and smoother installation means less downtime and faster commissioning of our customer systems.

We will see the first effects as early as 2026 with further savings and efficiency gains expected from first quarter 2027 onwards. This will enable us to make an important contribution to achieving our financial goals while strengthening our competitiveness in the market. We had previously a comprehensive walk through how growth is generated for WashTec Service, and we presented our first efficiency program related to reducing the installation effort. Let me now present further efficiency levers, which are accompanying our revenue growth. We are fully leveraging efficiency opportunities through our digital backbone.

The service deployment is transitioning to an IE-based tool, enabling more efficient route planning. Thanks to the available machine monitoring algorithm, we can detect degradation of the machine health and before any breakdown, implement a protective preventive measure. Here, as an example, the side brush drive health monitoring indicator. By data fusion of, as example, less activities on the equipment and further development of MyWashTec digital platform, we are driving efficiently the service activities in our market. WashTec service is onboarding also many technicians by such supporting a larger service footprint and revenue growth. At the same time, we're anticipating retirements.

To accompany this generation change and staff increase, we are opening a WashTec Academy in Augsburg in first quarter 2027. Thanks to this state-of-the-art training asset, we are reducing the training time for technicians and upskilling the actual technician population for the benefits of our service quality. So now let's have a closer look at one of our digital solutions that we are currently introducing to the market, CarWash Assist. This picture is showing the evolution of our actual helpdesk with CarWash Assist.

To support our customers, we are enlarging the possibilities of our helpdesk and interacting directly with the wash customer. On the left screen, the CarWash Assist interface for our helpdesk is shown. Video live streams, machine status and function common are available. On the middle screen, the actual technician position and on the right screen, the incoming call from our customers. Why is the CarWash Assist so important for our customers? The uptime of the machine is the most relevant factor for the operator of the site. Revenue is generated only when the machine is washing. The machine must be available as soon as the wash customer intends to enter the washing bay. So how does CarWash Assist help our customers?

In case the machine is not ready to wash or the wash customer requires support to wash his car, the customer used to address the staff on site, which is very often busy with other tasks or cannot further help due to missing training. By interfacing directly with WashTec, a quick response to any anomalies or customer question is ensuring higher uptime of the machine, happy customers and more washes. And to visualize the benefits of the CarWash Assist, let me show you a short video. Operator, can you please start the video?

[Presentation]

Now we are detailing the CarWash Assist offering. Our team of experts monitor the status of the machine. They are alerted by the system in the event of errors and are contacted directly by carwash customers in case of problems. Four cameras provide a live 360-degree view of the car wash and archive all events for up to 5 days. The video material can be used in case of accidents. State-of-the-art technology enables our experts to control the machine remotely due to security policy, on-site confirmation of carwash customer or staff is required to set machines in motion. Third-party devices can also be connected and remotely controlled using our IoT gateway like turning on our flights, compressors, controllers and many more. CarWash Assist benefits our customers and WashTec equally. For our customer, CarWash Assist brings higher customer satisfaction and therefore, also higher customer loyalty, no need for trained on-site staff, which also allow to operate fully unmanned sites and of course, higher up times.

For WashTec, the benefits are higher customer satisfaction and loyalty, regular revenue streams and CarWash Assist is an enabler for us to bundle digital tools with long-term service and consumable contracts. Finally, we can increase our operational service efficiency through by solving issues remotely. We are bundling a service contract with a supplier of our chemicals and the customer pays a monthly fee to WashTec, potentially structured as a pay per wash model.

We are now at the end of the CarWash Assist presentation. I will answer any questions you may have during the Q&A session. Thank you for your attention, and I'll now hand over to Andreas.

Yes. Thank you, Eric, for this deep explanations about the core of our service business, what makes us unique and why we hold a strong and prosperous market position. Ladies and gentlemen, let me summarize on a more financial perspective, what we have heard. Why is service key from a financial perspective? Let me start with the economics of our installed base. When we look at the average lifetime revenue per machine, it becomes clear that the initial equipment sale is only one part of the story.

Over a typical lifetime of around 10 years, roughly half of total revenues are generated after the installation through service and consumables. Equipment accounts for about 50% to 60%, whereas service still contributes another 20% to 30%, depending on the configuration, usage of intensity and product mix and consumables contributes about another 15% to 25%. This illustrates an important point. Each machine we place today creates a long-term revenue stream or, in other words, over the life cycle, each machine sold twice. Even more important is profitability.

In the center of the slide, you can see our indicative CM3. CM3 stands for Contribution Margin 3, what we consider gross profit, including selling expenses. You easily notice that our recurring revenues, service and consumables show up with higher profitability. Therefore, no wonder that we want to expand our revenue share in these fields. So overall, service sits in a very attractive position. It combines recurring revenue, strong margins and close customer relationships. On the right-hand side, you see our Service workforce structure. Around 75% of our service employees are direct technicians and share has been increasing year-over-year. Direct technicians stand for quality, productivity and scale service revenues efficiently, while indirect functions focus on deployment, planning and back-office excellence.

Let me now turn to how this translates into midterm growth. Our revenue development by business line show a clear structural shift. While equipment remains a strong foundation, the share of service and consumables has been steadily increasing. In absolute terms, we are targeting around 5% average annual growth, driven disproportionately by recurring revenues. This is also reflected in the revenue split on the right-hand side. Recurring revenues represent around 38% in 2022, reaching roughly 47% by 2025 and are expected to reach around 50% by 2027. How do we achieve this?

Eric has taken you on a journey how we will achieve this. Summarizing is easy. We increase our customer loyalty through service excellence, high uptime, fast response times and reliable performance are the strongest levers to secure long-term customer relationship. We bundle our offerings through standardized service packages and global configuration, we simplify purchasing decisions and increase lifetime value per customer. And last but not least, digitalization. Solutions like CarWash Assist and subscription-based models enable predictive maintenance, better resource allocation and recurring digital revenues, all with attractive margins and low incremental cost. So the financials speak by itself.

But as always, for me, it's also key to understand and track and optimize some other more quantitative KPIs that underpin our strategy. Some are shown on this slide. We compete around 250,000 service reports per year, but efficiency comes with service reports per technicians. Long term, this number increases. But year-on-year, we had a slight decline of around 1%. Deeper analysis show me that this is driven mainly by the number of new technicians, Eric already mentioned, we hired in 2025 to expand our future business. The new colleagues need to be trained. Therefore, this number goes temporarily slightly down and next year, it will go up again. A particularly important metric is sleeping customers currently at around 30%. This represents significant upside potential within our existing installed base without the need for new equipment sales. And last, our first fix rate exceeds 85%. This is not only a quality metric, but also a cost driver. Fewer repeat visits mean lower costs and higher customer satisfaction. Taken together, these KPIs clearly demonstrate that operational excellence in service directly translates into financial performance.

To conclude, WashTec's service business is not an add-on. It is a core value driver. It provides recurring revenues, superior margins and resilience across economic cycles. By continuously expanding our installed base, strengthening service excellence and leveraging digital solutions, we are bundling a business model that delivers sustainable growth and attractive returns for our investors. Thank you for your attention. We look forward now to your questions, for which I'm handing over to the operator.

Yes. Thank you very much, Mr. Drolshagen, Mr. Ferreira, Mr. Pabst for the time you took to make this presentation. Ladies and gentlemen, now it's your turn. [Operator Instructions] We already have the first participant and we go to Mr. [indiscernible]. [Operator Instructions].

While then we try and get to Mr. Augustin.

And I have 2 questions to start off. The first one is actually the difference between the partner networks and your own network. So to understand a little bit the accounting of your revenues and intentions. So is a partner network completely outside your revenue stream? Or do you supply some service to the partner and then some of that is actually also on your sales and your profitability? And do you consider to enlarge your network by partners in the future?

Who will take this one. Eric?

Yes. To answer your question first, we have already in the past, enlarged our network by simply taking over some partners. In the presentation, I mentioned several time partners, you have to understand is that we are -- we could also call them subcontractors. So they are performing work on our behalf as part of a statement of work contracts we have with them. And then they are counted as cost of sales or internal costs and generating the revenue -- we are generating the revenue towards customers.

Okay. And the next one is actually looking at the differences between the U.S. and Europe. So there is a different amount of machines or penetration of machines versus employees. And my question would be, is there also a difference between the profitability of the service business in the U.S. and Europe? And is that largely connected to that, let's say, amount of machines that is serviced by one employee? And could you help me with bridging the idea for the difference?

Maybe Mr. Augustin, that's somehow part of the story. It's true. If the distances get longer, then service technicians are spending more time on the road, and that means that the productivity is going down because you simply spend more time on the road. So if you have a look at the heat map, which we have in the presentation for Germany, for example, you really can see that the service technicians are, let's call it, surrounded by a lot of installed base by a high density of machines. And you know in North America, our density is not as high as in Europe, and that is one part of the situation, while the profitability overall in service in North America is a little bit lower. But the other thing here is with implementing the digital solutions like CarWash Assist, we really can speed up here and also can increase the profitability there.

We are on a good track record in the U.S. with online services. So we can solve many problems already in the U.S. online due to this huge country size. And in addition, we have done analysis in the last weeks and months where it makes sense to hire service technicians or also to probably have some closer cooperations with subcontractors. And so we speed up this as well that we get this revenue stream closer into our network than it was before.

And we move back to Mr. [indiscernible], you should be able to speak now.

Okay. Two additional ones from my end. One on the, let's say, density in the U.S. was already answered. The other one would be, is there a big difference in service between the different technologies, rollover, tunnel or jet. So are some of these machines more likely to have downtimes? Or is it pretty much the same across your products? The second question would be when it comes to contact centers, that's definitely can develop into a severe cost base. So are there any ideas to replace first level support by chatbots or any kind of AI functions?

Yes. So let me answer your first question. If we make the difference between rollover, tunnel and jet wash equipment, due to the technology used in those 3 type of equipment, we have a different need for service. As an example, tunnels are very often operated with local staff from the operator, which are able to correct simple anomalies. So when WashTec technicians is addressing topics on the tunnel, those are basically more complicated topics than others.

For rollovers, the question is basically that all the equipments are installed on site where the staff on the site is not familiar with this type of equipment. And we are then by such increasing the need of having a WashTec response to any anomalies. And to finish with high-pressure systems, self wash, those are subject to interaction directly with the wash customers. So we have degradation of hoses and such type of things, which makes the biggest part of our problems to be taken. So yes, to answer your question, those 3 type of equipment are generating completely different level of activities for the WashTec service organization.

Therefore, we're implementing the training center that we also can train our customers in a better way, especially for the tunnel segment.

And to answer your second question, which is related to local language capabilities of interacting with customers, so mentioned by me in the presentation as helpdesk. Today, we have very high performance of answering calls and are actively working on chatbot AI-related solutions, not only for our customers, also for our own staff being able to answer simple questions and direct to correct solutions. And this is a clear improvement we are working on in particular because the large part of interactions we have with the site are related to basics problems, which could be simply solved with a standard interface and standard response.

Okay. Thank you very much. And in the meantime, we have not received further questions. [Operator Instructions] That is not the case by now. So well, Mr. [indiscernible] again, please.

Yes. If we still got some minutes, I make use of it. You demonstrated that consumables come within a very attractive margin. So is there also an idea if you have, let's say, a more dense service network that this would also, let's say, positively influence the sale of consumables to the customers or is this a complete, let's say, different type of business or distribution?

The two types of businesses are linked as explained, we explained it with previously with the sales of the machine and then having service technicians directly at the contact with customers and customer loyalty doing this. Of course, it is a very strong lever also to explain or to bring our chemicals in use on the different sites. The technicians perfectly sees which type of chemicals are used in the machine we are servicing and give the opportunities, and we are looking into it to better market and to have a higher penetration of our chemicals products.

[Operator Instructions] We come to the end of today's capital market webcast. Thank you to all participants for your interest in WashTec. And if there are any further questions till later date, please feel free to contact Investor Relations. Thank you to the management team for the presentation and your time to answer the questions. I wish you all a successful day and handing over to one of you guys for the final remarks.

That's me. So ladies and gentlemen, on behalf of the Management Board, I would like to thank you for your interest in our company, and we wish you a pleasant day. Thank you very much.

Thank you.

Thank you.

Hello. I'm Andreas Pabst, CFO of WashTec, and I warmly welcome you. Thanks for tuning into WashTec's second Capital Markets webcast. After we got very good feedback following our first webcast in July, we decided to move on with this format and give you a deeper insight into our business from different angles, not only focusing on pure financial figures, but also giving a little bit more flavor on how our business works and why it is so resilient and why it is in a pretty good condition.

With me today, I have my Board colleague, CEO and CTO, Michael Drolshagen; and our Manager for the Business line Consumables, Jürgen Ankne. We will guide you through today's agenda. First, I will give a short introduction and explain why we have chosen the topics for today. After that, Jürgen will give you a deep dive into our consumable business in Europe. This will be followed by Michael explaining in detail how our different efficiency programs will boost our EBIT margin in the next years. And of course, at the very end, we will answer all the questions you might have. I would like to start my introduction with a short recap about our midterm financial targets, meaning what do we want to achieve until 2027.

First, we want to grow top line on 5% on annual average. And in the first 9 months of 2025, we delivered. Revenue grew by 7.2%. Secondly, we are aiming for an EBIT margin of 12% to 14% in 2027. In the third quarter 2025, we already had 11.8% EBIT margin. As a third very important financial KPI, we want to drive our free cash flow to a range of EUR 40 million to EUR 50 million per year. Also here, we are developing well. Our free cash flow for the first 9 months 2025 exceeds prior year's figures by 11.2%. And finally, we look sharply at return on capital employed. The target for 2027 is more than 28%. In September 2025, we are already standing at 25.7%. So after 9 months in 2025, we are really on the right path to achieve our targets. But there is still a way to go. And today, we want to explain you a little bit more how we will reach our targets. Now let's dive a little deeper into our expectations about revenue development.

Overall, we want to grow 5% in average per year, but we also want to increase our portion of recurring revenues, meaning sales from service and consumables from 38% in 2022 to around about 50% in 2027. In other words, we expect that revenue streams with service and consumables grow faster than the one with equipment. In our first capital market webcast, we gave some insight how our digitalization initiatives will help us here. Today, we explain in more details how we will develop our European consumables business. And later, Michael will explain how the global scope configurator will support these ambitions.

Higher revenues in general and higher recurring revenues will drive our profitability measured in EBIT margin. But that alone will not be enough to achieve the financial targets in 2027. We also need more efficiency in our company. That is exactly why we have set up several efficiency programs, just to name some of them. There is the optimization of the production footprint, the program installation cost reduction, our efforts for a better quality excellence and last but not least, our ambitions to lower the production cost of our products. These programs are not easy ones. There's a lot of detailed work and a lot of small little steps to improve. Early investments are also necessary. Only acting so, we will be able to harvest at the long end. That is also the reason why our EBIT margin path to 12% to 14% in 2027 will not be a linear one. There will be smaller steps in 2025 and 2026 and a bigger one in 2027. That is what we see as of today and what we also see currently in our internal discussions in the course of the budget for 2026 and the midterm plan for the next 3 years.

On this slide, I want to show on which cost blocks the different programs mainly attack. In the middle, you see the cost composition of our 3 business lines. The program of optimization of our production footprint mainly triggers, and that's not surprising, the labor cost for equipment and also quite obvious which costs are attacked by the installation cost reduction program, the installation costs for our equipment, which are, in our understanding, still too high. The program of quality excellence focuses on the labor costs in the service field as well as on the warranty costs. Working on cost down of products and modularization mainly aims for lower material costs for equipment as well as lower labor costs and service as products become easier to handle. And last but not least, there is the introduction of the global scope configurator. With that new tool, we will not only be able to decrease some costs in indirect departments, but we are targeting for increasing revenues if we really offer our full product range at any time to our customers. This is another important step in our vision towards being a real solution provider.

With that brief introduction, I now hand over to Jürgen, who will give you a deep dive into our business line consumables in Europe. Jürgen.

Hello. My name is Jürgen Ankne. I'm the Head of the Business Line Consumables & Managing Director from AA Chemicals. I have been working for WashTec and AUWA for 14 years in different roles like Project Management, Head of Industrial Engineering and Vice President, Product line rollover. Since WashTec acquired AUWA in 2008, AUWA is a success story. Back then, AUWA generated EUR 14.4 million in revenue. Today, we are on track to exceed EUR 64 million by 2024, representing a compound annual growth rate of nearly 9% over more than 15 years. This is consistent profitable growth.

What makes this story so compelling? First, innovation and portfolio expansion from Sintex in 2008 to [ SealthTex ] in 2012, the tax line in 2015 and Green Car Care in 2021. We have continuously introduced new high-quality solutions that meet evolving customer needs. Most recently, Magic Care and CHEM-IN-A-BOX are setting new standards in quality, convenience and sustainability. Second, profitability. AUWA is not just growing. It is the most profitable business line within WashTec with a strong EBIT ratio. Our cost structure is highly efficient and our ability to command premium pricing ensures robust margins.

Third, strategic importance. Consumables are a recurring revenue stream, creating stability and predictability. They strengthen customer loyalty and lock in long-term relationships, which is critical in a fragmented market. Every new equipment sale is an opportunity to expand consumables penetration and we still have significant untapped potential. AUWA has become a cornerstone of WashTec's success story. And now I want to give you a quick snapshot of where we stand and what comes next. AUWA operations are split between Augsburg, where we focused on R&D and [indiscernible], which houses our production facility. With around 70 highly skilled employees across R&D, production, product management, sales and administration, we have built a strong team in a lean and efficient organization that delivers exceptional results.

Today, AUWA offers over 100 product formulations based on a modular recipe concept and structured into 3 product lines: basic, standard and premium. This flexibility allows us to serve a wide range of customer needs while maintaining strong margins. AUWA current production volume is approximately 20,000 tonnes, supported by high-quality standards, including certifications such as DSO 9001, 14001, 50001 and Nordic Swan. These credentials reinforce our commitment to quality, sustainability and environmental responsibility. However, here is one key point. Capacity is becoming a strategic priority. Demand for our consumables continues to grow strongly, driven by innovation, recurring revenue streams and increasing penetration among existing customers. If we want to maintain this growth path, we must ensure that our production capacities enable our growth path over the next years.

This is not a challenge. It's an opportunity. By investing in additional capacity, we can unlock further volume growth, enhance our market leadership and continue delivering the highest EBIT ratio within WashTec. We want to make AUWA and the supply chain ready for the next chapter, and it's all about growth. AUWA's success is built on one clear principle, focus. We are not trying to be everything to everyone. Instead, we concentrate on what we do best, vehicle washing and the complete range of cleaning solutions around it in the B2B segment. Our portfolio covers every car wash segment, rollover systems, tunnel washers, truck and bus washers, check wash stations, water recovery solutions. This breadth ensures that AUWA can serve the entire spectrum of car wash operators from small independent businesses to large-scale commercial fleets in the key account business.

And for each segment, we offer dedicated product lines tailored to specific operational needs. This is not a one-size-fits-all approach. It's based on a modular recipe concept to allow a wide product range for a customer-centric strategy that drives loyalty and recurring revenue. Beyond the washing process itself, we provide complementary solutions that strengthen our position as a full service provider. Car wash and wash cleaning products, fuel farm maintenance solutions, cleaning wipes, sales support and marketing tools. This integrated offer creates a unique competitive advantage. Customers don't buy just chemicals. They buy a complete solution that simplifies operations, ensures quality and maximizes profitability.

Let's take a closer look to AUWA's position in the European car wash consumables market. The total market size is approximately EUR 300 million, and AUWA holds a leading position with a 20% to 25% market share in Europe. This is a strong foundation, but what makes this opportunity truly exciting is the market structure. It is highly fragmented, which creates room for further consolidation and growth. Across europe, we see clear regional strength and opportunities. In DACH and the Netherlands with a market volume around EUR 100 million, our is the market leader in rollover segment, and we are focusing now on growth in the tunnel segment.

In U.K. and Ireland, a market worth EUR 25 million, we have a strong position in key accounts, especially in tunnel washes. In France, Iberia and Italy, with a combined market of EUR 100 million, we lead in rollover segments and see growing potential in other segments. In the Nordics, a EUR 50 million market, we are the clear market leader and see growing potential in truck and bus wash solutions. And in Eastern Europe, particularly Poland, the market is smaller, around EUR 25 million, but growing fast, offering attractive expansion opportunities. Finally, exports to all countries where we do not have own companies, remaining a stable business bundled with equipment sales. In total, AUWA combines market leadership with untapped potential. This is enough potential to grow in our focused B2B vehicle wash market. And in the long term, there is also an opportunity to grow in car wash segments near our current focus segment in a moderately growing market.

As I mentioned, the European car wash consumables market is highly fragmented with more than 15 active players. This fragmentation creates both challenges and opportunities, and AUWA is uniquely positioned to capitalize on them. Our competitive environment consists of several groups. Car wash equipment manufacturers with their own consumables business, such as ISTOBAL, Christ and [ Kärcher ], multinational consumable providers, including Nerta, [indiscernible] local car wash consumable providers, often small regional players with limited scale, and large chemical groups with car wash divisions such as SONAX, KIEHL, STOCKMEIER and [ Autos Smart ]. Despite this crowded landscape, AUWA together with WashTec stands out as a full service provider with deep expertise and strong brand recognition. We combine premium product quality with integrated solutions, which gives us a clear competitive edge.

AUWA has the scale and capabilities to lead this process. Our strong market position and profitability allows us to pursue organic growth through innovation and customer penetration while also considering inorganic growth. The car wash consumable market is evolving quickly, and AUWA is not just keeping pace. We are shaping the future. Our strategy is built on anticipating megatrends and developing solutions specifically tailored to these margins -- sorry, to these changes.

Let me highlight the key drivers now. First, subscription models gain market share. Car wash subscriptions are becoming increasing popular, driving higher wash frequency and customer loyalty. This trend means more consumables usage. Second, premium single car washes as counterpart to subscriptions. Operators specialized on single-pay models will focus on high quality. Premium car washes will require top-tier products and strong brands. Third, automation and rising labor costs. Labor shortages and cost pressures are enhancing automation, providing solutions around consumables will become standard. Fourth, electricity its fuel, new business models. As manned sites turned into unmanned stations, especially we already see it in markets like Norway, new business models will emerge.

Fifth, sustainable products and lower CO2 footprint. Environmental regulations and waste cycle management are becoming stricter.Minimization waste and emissions are not longer optional. It's essential. AUWA is not reacting to trends. We are anticipating them, scanning the markets day by day and innovating ahead of the curve. Our R&D pipeline is aligned with long-term market drivers, securing relevance and growth for decades. For the mentioned trends, we already have answers in different markets. AUWA is not reacting to trends. We are anticipating them, scanning the markets day by day and innovating ahead of the curve. Our R&D pipeline is aligned with long-term market drivers, securing relevance and growth for decades. For the mentioned trends, we already have answers in different markets.

AUWA success is not just about selling chemicals. It's about creating partnerships that drive mutual growth. Our vision is clear. We want to be a solution provider, not just a consumable supplier and work hand-in-hand with our customers to achieve one common goal, increase revenue and maximize EBIT. How do we respond to the 5 market trends and we deliver on this promise with 5 key pillars. First, products. Our portfolio includes premium solutions like Magic Care designed to deliver superior cleaning performance and customer satisfaction. AUWA is already with scalable solution that fits subscription-based business models, but includes products with a perfect price performance ratio. For every business and performance level, we have the right answer on product side.

Second, customer loyalty. We build long-term relationships through innovative models such as bundling of equipment, consumables and service contracts and paper wash contracts. These approaches create predictable revenue streams for both AUWA and AUWA customers. Third, smart supply. AUWA is already working on future concepts for unmanned car wash station, ensuring our products and services fit the future operational landscape. With full level displays, range calculations and complete supply chain management, we ensure customers never run out of stock. This reduces downtime, saves costs and optimizes operations, directly impacting profitability.

Four, services around car wash. We go beyond chemicals by offering, for example, hall cleaning, sludge removal and refill service. The additional services simplify operations for customers and strengthen our role as a trusted partner. Last but not least, sustainability. Solutions like CHEM-IN-A-BOX and Green Car Care meet growing environmental demands while maintaining performance. Sustainability is not just a trend. It's a competitive advantage, and AUWA is leading with these eco-friendly innovations that combine performance with responsibility. I want to give you now 3 examples and deeper insights. In AUWA in 2025, AUWA launched Magic Care, and it is already proving to be an exceptional success. This is not just another product. It is a premium innovation that has the potential to become a global brand and redefine the car wash experience worldwide. What makes Magic Care so extraordinary? High-end polish through active modified polymers for a deep lasting shine, outstanding water repealant effect, ensuring superior protection and ceiling of micro scratches enhancing vehicle longevity.

From a business perspective, Magic Care is a margin powerhouse. It is a premium product with a premium price per kilogram. It drives higher chemical usage per wash, increasing revenue per transaction. It opens doors for cross-selling opportunities, helping AUWA win new customers and expand market share. But the story doesn't stop here. Magic Care is attracting global interest. Its unique value proposition resonates across markets from Europe to North America and Middle East. This positions AUWA to scale the success story internationally, leveraging our strong distribution network and WashTec's global footprint.

As I mentioned before, we believe that long-term success comes from building strong lasting relationships with our customers. One of the most powerful tool we have to achieve is Smart Supply. Why is Smart Supply so important? Let me explain how. Smart Supply provides continuous level measurement and low-level alerts, ensuring customers never run out of stock. League alerts add an extra layer of security, reducing operational risks. Operators receive real-time data and reporting options, enabling them to track usage, optimize inventory and plan proactively. This transparency builds trust and strengthen customer relationships. With systems like CHEM-IN-A-BOX and offboard tanks, we simplify logistics and reduce complexity. These solutions are designed to minimize downtime and maximize efficiency. Measurement data is transferring across independent systems, allowing predictive planning and automatic replenishment. This means fewer manual interventions and more time for operators to focus on their core business.

AUWA Green Car Care line represents consistently sustainable and innovative solutions. We follow a zero waste strategy and use ecologically sound transport packaging like CHEM-IN-A-BOX. All products are highly biodegradable and made with premium ingredients that combine maximum cleaning performance with outstanding material and environmental compatibility. We also optimize the use of material and energy and ensure independent certification by the Institute SGS Fresenius. This gives our customers and partners confidence that Green Car Care is not just a promise, it's reality. Green Car Care is not just a sustainability initiative. It is a strategic growth driver for AUWA and a competitive advantage.

Be sure, there are even more topics for presenting AUWA as an outstanding company, but we would run out of time. So let me summarize now why our Consumables segment is not only the most profitable business line within WashTec, but also a key driver of future growth. First, volume and pricing. In 2024, we sold over 17,000 tonnes of consumables, and there is still plenty of room to grow. Our strong market position allows us to maintain premium pricing at more than EUR 3.70 per kilogram. This combination of scale and pricing power creates a highly resilient revenue stream. Second, cost structure and margins. Our cost composition is optimized for profitability. With material costs at 25% to 35% and labor costs at just 10% to 15%, this business line delivers the highest margins across WashTec divisions.

Third, customer potential. Around 70% of our installed base are so-called sleeping customers, existing equipment owners who are not yet purchasing consumables from us. This represents a massive untapped opportunity. By leveraging our position as a full service provider, we can convert these customers and drive incremental growth. Finally, market leadership. In Europe, we already hold a 20% to 25% market share in a highly fragmented market. This leadership gives us a strong platform to consolidate further and capture share from smaller competition -- competitors.

With this significant potential in the market, our strong products, we will continue to deliver robust annual growth into the future while maintaining a strong margin on consumables. For investors, this means predictable cash flow, strong EBIT contribution and sustainable long-term returns. AUWA's consumables business is not just profitable today. It is a growth engine that will combine to deliver volume for years to come.

Thank you for your attention. And now I want to hand over to Michael Drolshagen.

Thank you, Jürgen. This was like always, very interesting. Thanks for the insights. Dear sir or madam, dear investors, analysts, interested parties, I would also like to welcome you to our second Capital Markets webcast. Following our first webcast in July 1, I would like to focus today on the efficiency programs in Europe.

Let us, therefore, delve into our efficiency programs, a key lever for WashTec's future profitability. Your interest and trust are both an incentive and an obligation for us. Our goal is clear. We want to simplify processes, reduce cost and increase speed, all without compromising on quality and service. What does that mean in concrete terms? Let us dive into the details of our efficiency programs together and show how we are positioning WashTec for sustainability and future success. Our efficiency programs are a key component in achieving our midterm target EBIT margin of 12% to 14%.

Just to repeat our midterm targets, we are aiming for free cash flow of EUR 40 million to EUR 50 million, average revenue growth of 5% per year and a ROCE of over 28% and as just explained, the key levers with regards to our EBIT margin target are our efficiency programs. The 5 programs we consider most important are our global scope configurator, cost reductions through product modularization, quality improvement, optimization of the production footprint and reduction of installation costs.

Our message is clear. We have had a very strong third quarter and are fully on track to achieve our targets in 2025. For 2026, it will be crucial to focus on our further efficiency programs in order to realize disproportionate EBIT margin growth by 2027. We will discuss now these programs in more detail. One key element of our efficiency strategy is the optimization of our production footprint. Our goal is to leverage the core competencies of the WashTec supply chain at the Augsburg site while benefiting from the labor cost advantages in Czechia. The roles are clearly defined. Preassembly and module assemblies will be manufactured in Czechia in future and delivered just in time to Augsburg for final assembly. An important milestone was the agreement to relocate 85 jobs to Czechia, which we signed together with the Works Council in April 2025. The expansion of the site in Czechia in Nýrany with a second hall for assembly and the warehouse for regionally sourced components will start shortly.

In addition, we are examining further potential through additional in-house production at the existing plant in Nýrany. Our expectation is that the relocation of the machines and 85 jobs from Augsburg to Czechia will be completed by the end of 2026. Therefore, the full savings will take effect from 2027 on. We will invest part of the savings in Augsburg, for example, in the training and education center. Well-trained employees, especially in the operational area, bring faster solutions for our customers, higher satisfaction among our employees themselves and ultimately, shorter training periods until our employees are fully operational, which in turn has an impact on our margin and above all, on our customer satisfaction.

Ladies and gentlemen, let us now turn to particularly effective lever on our efficiency program, reducing installation costs. In a highly competitive market environment, it is crucial to achieve maximum efficiency, not only in production, but also in the delivery and installation of our systems. Why is the topic of installation so important? Currently, installation costs account for a double-digit percentage of machine sales. This is a significant proportion that has a major impact on our results. At the same time, we see that installation capacities repeatedly become a bottleneck, especially in times of high demand. That is why we have put together a comprehensive package of measures that addresses several levels. Our strategic goals are clearly defined. We want to significantly shorten the installation process. Our goal is to reduce throughput time by a double-digit percentage.

We want to use existing capacities more flexibly and efficiently in order to avoid bottlenecks and respond more quickly to customer requirements. And we want to reduce the overall cost of installation in the long term. And how we -- and how do we achieve this? A key element is the introduction of the hub concept, which we will roll out gradually from the first half of 2026. Regional hubs will serve as consolidation centers where machines and components are bundled and optimally prepared for delivery. This will enable us to significantly reduce delivery times to customers. In addition, we are making our installation teams more flexible. This means that we are setting up the teams in such a way that they can be deployed quickly and efficiently depending on demand and the order situation. This allows us to avoid idle times and better casing peaks.

Another important point is the close integration of processes between sales, purchasing, production and installation. By harmonizing and standardizing these processes, we are reducing interface losses and avoiding unnecessary complexity, especially with peripheral and smart parts, which have often led to delays in the past. What do we expect to achieve? The program is already well on track. We are confident that these measures will not only significantly reduce installation costs, but also further increase customer satisfaction. After all, faster, more efficient and smoother installations mean less downtime and faster commissioning of our customer systems. We will see first effects as early as 2026 with full savings and efficiency gains expected from quarter 1, 2027 onwards. This will enable us to make an important contribution to achieving our financial goals while strengthening our competitiveness in the market.

Let us now turn to another key component of our efficiency strategy, quality excellence. For WashTec, quality is not just a promise to our customers, but a decisive competitive factor and an integral part of our corporate culture. An important step on our path to even greater quality is the standardization of quality feedback from all areas of the company. We refer to this as our quality sensor system. Until now, quality data and feedback have often been recorded and evaluated in different ways. In order to obtain a truly holistic and comparable view of our quality, we have defined a uniform system for recording, evaluating and analyzing this feedback and will establish it across the board in 2026.

This means that whether it's production, assembly, service or sales, all areas will provide their quality feedback according to the same standard and criteria. This will create transparency, enable us to identify trends at an early stage and take targeted countermeasures. Our goal is not only to combat symptoms, but to identify the actual causes and remedy them in a sustainable manner. To this end, we have established cross-functional quality teams that use a ranking system similar to an FMEA assessment to determine the importance or, in other words, the criticality of the quality issue. This quality ranking is then used to work through the issues from most important to least important, step-by-step improving our overall quality from component quality and parts availability to the simplicity of our products and processes.

How is the quality KPI determined? This indicator is composed of various standardized quality feedback such as complaint rates, internal errors, feedback from the field and service calls. All data is consolidated in an integrated KPI dashboard, which enables an objective and data-based assessment of quality. The KPI is therefore not only an early warning system, but also a control instrument for targeted improvements. The importance of the KPI is also reflected in its anchoring within the company. From 2026, it will be mandatory for all managers to include it in the MBOs. This means that every manager will be directly responsible for WashTec's quality targets in future. Our claim with this consistent standardization, focus on root cause elimination and clear assignment of responsibility, we are laying the foundation for sustainable quality excellence. In this way, we are not only securing our competitiveness, but also the trust of our customers today and in the future.

Let us now turn to another key lever of our efficiency strategy, targeted cost reduction through product modularization and complexity reduction. Firstly, we want to significantly reduce the complexity of our products by reducing the number of components and consistently streamlining processes. Secondly, we are focusing on the standardization and harmonization of key components across the entire product portfolio. This creates synergies, simplifies production and increases efficiency. Thirdly, we are striving to significantly reduce the production costs of all WashTec systems with SmartCare as our flagship product. We have set ourselves clear milestones for SmartCare, we are aiming for a production cost reduction of at least a high single-digit percentage.

Another focus is on the alignment and standardization of components such as frame and functional parts, especially across the rollover platforms. We see great potential here through complexity reduction, modularization and standardization as well as the harmonization of central components. We estimate a reduction in variant diversity of over 20% at component and module level, which we also have an impact on our supplier base and its consolidation. However, the effects here in the supplier base will be felt downstream. But let me summarize it this way. 2 become 1 out of 2 rollovers, and we are confident that our SmartCare SE will be ready and available to order in 2027, featuring the modules and advantages of SmartCare Connect as well as [ source ] of SmartCare SE. The goal is clear and is being pursued with enthusiasm, significant savings and further simplification of our product platforms by 2027. With the global scope configurator, we are focusing on standardization and digitalization in sales. The aim is to establish a uniform configuration process for all European WashTec markets in the first step.

This ensures consistent quality and facilitates expansion not only for our equipment, but for all our products. We are replacing local axle price list with a modern centralized sales platform that, on the one hand, improves the customer experience through transparent options such as a high-end washing and drying package, thereby strengthening our market position and on the other hand, creates buildable and configurable products through interfaces to our ERP system. These standardized back-office processes reduce manual effort and complexity. The SAP-based configuration logic with automated validation and complete software integration minimizes errors and ensures reliable processes. The successful pilot in Germany and Austria has been completed with the introduction of further products and expansion to other countries to follow in 2026. We expect to see the first savings as early as 2026.

At this point, I would like to emphasize once again the central importance of our efficiency programs for WashTec's profitability and future viability. The initiatives presented today are not isolated measures, but rather looks like deals and together unfold their full effect. Optimization of the production footprint by relocation, preassembly and module assembly to Czechia and clearly defining the roles of our various locations, we are laying the foundation for sustainable cost reductions and a more flexible, efficient supply chain. Full implementation by the end of 2026 will lead to a noticeable savings from 2027 onwards and further strengthen our competitiveness.

Installation cost reduction. One particularly effective lever is the reduction of installation costs. With the introduction of the hub concept, the increased flexibility of our installation teams and the harmonization of processes between sales, purchasing, manufacturing and installation, we are significantly reducing installation times and lowering costs in the long term. We will see first effects as early as 2026 with full savings and efficiency gains expected from 2027 onwards. Quality excellence as a driver for efficiency. By standardization and digitalization of our quality feedback, our Q sensor technology and consistently analyzing causes, we are ensuring that quality is not only improved in the short term, but raised to a new level in the long term. The Q KPI is a key management tool that will become mandatory for all managers and the Executive Board from 2026 onwards. Quality will become an integral part of our corporate management and contribute directly to profitability.

Cost-cutting products and modularization. A reduction in variant diversity, modularization and standardization of key components enable us to significantly reduce production costs across the entire portfolio. We expect a cost reduction of at least 5% for SmartCare in particular. We will see the greatest effects in 2027 when the programs are fully implemented and the supplier base has been consolidated for new machines. Reduction in installation costs. Global scope configurator. The digitalization and standardization of the sales process through the global scope configurator ensures greater transparency, fewer errors and more efficient processing. We will realize initial savings as early as 2026, which will increase further in subsequent years.

Overall assessment and outlook. All of these programs are on track and will take full effect from the end of 2026 and in 2027, respectively. They are key to achieving our ambitious targets, in particular, an EBIT margin of 12% to 14%, free cash flow of EUR 40 million to EUR 50 million and ROCE of over 28%. Our efficiency programs are, therefore, not just a short-term cost-cutting exercise, but a comprehensive transformation process that will make WashTec sustainably profitable, resilient and future-proof. We are investing specifically in the right levers to create long-term value for our customers, our employees and you, our investors. And the good thing is that we can do this from a position of strength proactively and creatively. There are currently other industries and companies that are operating in emergency mode and reactively.

As in 2025, we would like to showcase one of our latest product developments in 2026. Next year, the focus will be on Jet wash, its digitalization and customer centricity and of course, our jet wash chemicals. Car care becomes an experience in WashTec's new jet wash self-service car wash. Thanks to perfectly coordinated technology, water and chemicals, laundry customers can effortlessly achieve brilliant results without compromise. Every wash cycle impresses with its simple operation, maximum cleanliness and the sparkling finish that inspires enthusiasm. At the same time, operators benefit from a robust, durable system that combines the highest quality with maximum cost effectiveness. Wash and Pay is a flexible washing concept. Customers pay for the Wash and Pay for the time they actually need for cleaning. It's simple and transparent. The scope of services can be expanded individually, for example, by integrating a vacuum cleaner for interior cleaning.

Wash and Pay is an innovative business model that enables operators to achieve significantly higher margins while offering maximum convenience for customers. And as we heard before, Magic Care for rollovers, now we also want to provide for our jet wash business, Magic Care high-end polish now also available for our self-service car washes. Magic Care provides extreme shine, color depth and an immediately visible being effect. The outstanding drying and car results are visible to the naked eye after the first application. Thanks to innovative active modified polymer AMP technology, our unique 3D protective layer is created that allows paintwork and colors to shine with unparalleled depth. The effect intensifies with every wash, maximum shine, intensive protection against environmental influences and impressive surface smoothness. This turns car into an experience and every wash into a wow moment. And I'm already curious to see what our team has in store for us then also in 2027.

Thank you very much. And now let's start with the Q&A session.

[Operator Instructions] The first question from Stefan Alstein from Warburg Research.

Stefan, I tried to put you live. Does it work?

I think that looks good. Some quick questions. Actually, the first one is a little bit on the chemical side and the installed base. So very quickly, you say you have a 20% to 25% market share in Europe, while you say you penetrate around 30% of your own installed base right now. And if I have that quite right in my head, you say you have around 50% of the market share of the installed base in Europe. So very quickly summing that up, if you would double your -- or add twice your market share, gaining your complete penetration of your installed base would be a bit high compared to your machine installed base. So there seems to be a slight mismatch.

Can you elaborate on that one? Is there, I mean, a specific difference between tunnel penetration and rollover penetration?

Exactly. This is a topic. We have 50% market share in the rollover segment from the equipment side and not in the overall segments like jet wash tunnel and so on. And we think from a realistic standpoint that we can double the rollover undelivered or not delivered locations from us. So that means currently from 30% to 60% is a realistic case. And the overall tonnes means something between 8 and 12 tonnes in addition if we can achieve that.

I think 1,000 tonnes, right?

Sorry, 1,000 tonnes. Otherwise, you can put it on the table here. sorry, 1,000 tonnes, yes. 8,000 to 12,000 tonnes.

All right. Okay. So that gives then also an idea. But -- and the price per kilogram, I think that's EUR 3.7 per kilogram. Is that right?

Yes.

Okay. And I also do the calculation somehow correctly, if I would go from the total equipment sales of, let's say, something a bit north of EUR 250 million and you say 10% is the installation cost and you want to save 10%, so we can put directly a EUR 3 million ticket round on that one if it comes through. Is that also a quite good calculation?

Not so bad.

He's much faster than I calculate normally. It's interesting.

So currently, are there any other questions? If yes, please just press the button. Let's wait for a second. No.

I guess there are no further questions.

So from our side, thank you very much for the patient and for the interest in WashTec. We wish you a nice Wednesday night. And hopefully, see you soon.

Sorry, I need to interrupt you. 2 quick -- there are 2 questions now. One is from Alexander Galitsa from Hauck Aufhäuser. Alexander, you're live. Mr. Galitsa.

There's also a question from Richard Schramm. Let's try this one. If we cannot get in Mr. Galitsa. Mr. Schramm, can you?

Are the extra costs for transferring workload to Czechia already taken?

No, not all. So we have extra costs for moving the first 30% of our topics to Czech Republic, and this are already spent in 2025 for sure. And we have other topics with the new plant 2, where we have the preassembly where we have also to put some budget into it, but not so high as expected before because we can use plant 1 for the cheap metal parts, and this would have been the very expensive part, which we now keep in place as it is today. So we have also done some cost cutting here with renting a smaller plant in addition and not a complete new one in Czech Republic.

So the answer to your question is we have spent already for the topics we already moved to Czech Republic, and we have some additional budgets in our 2026 planning.

This was the question from Mr. Schramm. Now let's try once again with Alexander Galitsa.

Now it should work normally.

I think so. Mr. Galitsa, I think we have opened the line or you can write your question.

Mr. Alexander writes that he has some tech issues. So probably we also can answer your question afterwards after the call. If you have any, then please just contact us. So that means so far -- sorry, tech issues. So I do not see any further questions now. Maybe let's wait some seconds more then. No further questions. So we see no further questions right now.

Okay. Then again, and you interrupt if we get new questions. Thank you very much for your time, for your attention and as I mentioned, for your interest in WashTec. This makes us very proud. And we wish you a pleasant attention and -- a pleasant afternoon. And hopefully, we see us sooner than later. Thank you, and goodbye.

Thank you. Bye-bye.

Good afternoon, ladies and gentlemen, and welcome to WashTec's conference call on the Q3 results 2025. My name is Kevin Lorenz, Investor Relations Manager at WashTec. And with me today, I have our Chief Operating Officer, Michael Drolshagen, who will provide an update on the current developments at WashTec and our Chief Financial Officer, Andreas Pabst, who will guide you through the results of the first 9 months. Following the presentation, the floor will be open for questions. [Operator Instructions] Of course, this call will be recorded and made available on our Investor Relations website.

With that, I'm handing over to our CEO, Michael Drolshagen.

Ladies and gentlemen, thank you, Kevin, and a warm welcome to WashTec AG's earnings call for the third quarter of 2025. My name is Michael Drolshagen, I'm CEO and CTO of WashTec AG. Before my colleague, Andreas Pabst presents the figures for Q3 2025, I would like to present to you the most important recent developments. Let's start by looking at the general economic environment in our core markets, the U.S.A. and Europe. In Europe, we are seeing the first signs of recovery, but uncertainties remain due to geopolitical risks and protectionist measures. In the U.S.A., new tariffs and a weak dollar are making export conditions more difficult, while demand for capital goods remains stable.

Due to the low level of exports to the U.S.A. shown in the last call, the risk for WashTec is low. General economic growth is suffering from the current trade barriers, which is also reflected in the lower market forecast for Europe and the U.S.A. for 2026. This means that WashTec's challenge going forward, such as subdued investment willingness. But given the current order backlog for WashTec, we remain positive. This is supported by our digitalization and sustainable technology offering, which gives us great opportunities for differentiation and growth.

Let us take this opportunity to take another look at the core of our strategic orientation and where we currently stand, our house of strategy. Our increasingly smart products form the basis of our business model. However, we go far beyond this by bundling these products into modular tailor-made solutions that are precisely tailored to the needs of our customers. The focus is on the entire customer journey from the initial contact to long-term support. We offer complete solutions from a single source, machines, chemicals and software.

With the scope configurator launched in Germany in August this year, we can now configure our products in the same way as a car and create bundles with chemicals and services. This not only makes the job of our sales staff easier, but also gives our customers greater transparency and streamlines the entire process from order creation to machine installation. In the coming months, we will roll out this solution to all markets and also integrate all our products.

Our digital products enable intelligent payment and control systems, data analysis and performance optimization as well as customer loyalty through smart user guidance. We are clearly positioning ourselves as a solution provider with a focus on Europe and North America. But strategy is nothing without culture. That is why we focus on customer orientation, enthusiasm and personal responsibility as well as a corporate culture that motivates and supports our employees.

Our strategy is brought to life by the people who implement it. And in order to be able to act quickly and empower our employees, we have defined and described 4 core areas to provide clear guidance for all employees into WashTec family. Clear statements for our employees and our organization, expectation management for our financial figures, lean processes and a clear customer focus. The framework is in place. Now it is up to the team to bring the strategy to life step by step. And as we can see today, we are already well on our way.

A special milestone in 2025 was the completion and official launch of our new rollover machine, SmartCare Connect as well as our first and most important digital products in May of this year. With SmartCare Connect, we have created a digital solution that not only complements our product range, but also sets new standards in the industry. The market launch was extremely successful. We received very positive feedback from the market in the first few months after the launch. Our customers particularly appreciate its initiative usability, its intuitive usability, integration into existing systems and the wide range of options for data analysis and performance optimization.

The system achieves top washing results with short washing times, especially when used in combination with our sustainable chemicals. The positioning of SmartCare Connect is clear. It is the digital heart of our new generation of washing systems and stands for innovation, efficiency and sustainability. With SmartCare Connect, we offer a solution that creates real added value for both large fleet operators and individual locations throughout the entire life cycle of the system.

At the same time, our SoftCare SE remains a central component of our portfolio. It stands for proven quality and reliability. While SmartCare Connect focuses primarily on digitalization, smart networking and washing speed with washing time, SoftCare SE impresses with its robust and proven technology. Both product lines complement each other perfectly and enable us to offer the right solution for every customer.

The first few months after the launch of SmartCare Connect confirm that we are on the right track. Demand is high, customer feedback is extremely positive and the market response shows that our strategy is spot on. We will continue to pursue this path consistently. Our efficiency programs are a key component in achieving our midterm target EBIT margin of 12% to 14%. Just to repeat our midterm targets, we are aiming for free cash flow of EUR 40 million to EUR 50 million, average revenue growth of 5% per year and a ROCE of over 28%.

As just explained, the key levers with regards to our EBIT margin target are our efficiency program. These are the global scope configurator, cost reductions through modularization, quality improvement, optimization of the product footprint and reduction of installation costs. We will discuss these programs in more detail during our Capital Markets webcast on November 20.

Our message is clear. We have had a very strong third quarter and are fully on track to achieve our targets 2025. For 2026, it will be crucial to focus on our further efficiency programs in order to realize this proportional EBIT margin growth by 2027. As part of our strategic goals, we are focusing on sustainable reductions in production costs, particularly for our SoftCare SE and SmartCare products. We see great potential here through complexity reduction, modularization and standardization as well as the harmonization of central components.

We estimate a reduction in variant diversity of over 20% at component and module level, which will also have an impact on our supplier base and its consolidation. However, the effects here will be felt downstream. The goal is clear and is being pursued with enthusiasm, significant savings and further simplification of our product platforms by 2027.

A key highlight of the current financial year is the successful rollout of our new digital products. Following an intensive preparation phase, we are already in the middle of the rollout phase with pilot projects. We have been able to launch our EasyCarWash PRO and CarWash Assist solutions on the market and gradually expand their introduction.

EasyCarWash PRO and 4U and CarWash Assist are already in use in over 50 pilot facilities in more than 5 countries. Further pilot facilities are planned in over 7 countries and over 500 new facilities are planned for 2026. The feedback from our key accounts and from area sales is extremely promising. The rollout of our digital products is an important component of our growth strategy and sends a clear signal to the market. WashTec is shaping the future of vehicle washing digitally, networked and customer-oriented.

Another important step we decided on is WashTec's new share buyback program. The Executive Board and Supervisory Board gave the green light on the 23rd of October. The program will start tomorrow on the 6th of November and will run until 4th of May 2026. A total of up to 100,000 shares or a maximum value of EUR 5 million can be repurchased.

Why do we think this is a good program? First, a share buyback is a clear sign of our confidence in our own financial strength and the future development of our company. We have a solid balance sheet, a strong liquidity position. With the buyback, we are sending a signal to the capital market that we believe in the sustainable success of WashTec. Second, our buyback program increases the value of each remaining share, reducing the number of outstanding shares increases earnings per share.

I will now hand over to our CFO, who will present the detailed financial figures and the performance of the individual segments. Thank you for your attention and enjoy the second part. Andreas, the stage is yours.

Thank you, Michael. Also from my side, a very warm welcome. I really appreciate that you are all in our call today. Let's go directly to our results. I am pleased to present our results for the first 9 months of 2025 as the numbers speak for themselves, not only compared to prior year, but also in a 5 years perspective. We did very well, strong top line growth and outpacing growth of profitability. We achieved revenues of EUR 358 million, up 7.2% year-on-year, confirming the strong market demand especially in Europe.

EBIT grew disproportionately by 17.4% to EUR 32 million, significantly outpacing revenue growth. This is the second highest EBIT in the last 5 years. Only 2021, the year after COVID showed a higher number here, which had a significant catch-up effect. Our EBIT margin improved to 9.0% compared to 8.2% last year. This reflects the success of our cost discipline and operational excellence initiatives, combined with a tailwind from higher revenues.

Also, free cash flow rose by 11.2% versus the prior year to now EUR 28 million. This is mainly driven by optimized working capital management and higher net income. The free cash flow ratio of 7.8% is highest in the last 5 years. And if you now look at Q3 stand-alone, the figures are even more impressive. EBIT increased by 35.8% compared to prior year, and it even outpaced the double-digit revenue growth of 10.3%. Also on the long run, WashTec had never seen a higher increase in those numbers year-on-year.

Overall, we achieved revenues of EUR 126 million in the third quarter with an EBIT margin of 11.8% or in absolute terms, EUR 50 million. So overall, in Q3, we are clearly on track according to our ambitions. Top line growth accompanied by an overproportional growth of profitability.

As you see from this slide, we have a pretty strong top line growth in all business lines. It's a broad-based growth and a solid foundation of recurring revenue, meaning the sum of service and consumables, which now accounts for 47.5% of total revenue. Revenue from equipment grew especially in Q3 with 13.7% year-on-year. For the first 9 months of 2025, this results in an increase of 6%, reaching now EUR 184 million. Growth momentum in Europe and other segments successfully offset the subdued performance in North America, especially Germany and France continued their very strong performance also in Q3.

Service revenue grew by 7.5%, totaling EUR 116 million. This improvement reflects our focus on process optimization, digital connectivity and expanded capacity. We hired additional service technicians and field service solution software. By September, we had approximately 13,000 machines connected, an increase of around 14% compared to year-end 2024, a clear indicator of our progress in building a digitally enabled service ecosystem. This will help us in future to grow our profitability even further. Consumables delivered the strongest growth, up 11% to EUR 53.7 million.

Looking at the revenue share, equipment remains our strong or largest contributor at 51.2%, but recurring revenue, meaning services, which accounts for 32.5% and consumables, which accounts for 15% are catching up. Therefore, the recurring revenues are now up to 47.5%, last year's 46.9%. The revenue mix develops further to our goal of 50% recurring and therefore, higher predictable revenues.

Let's now turn the perspective and take our segments into the focus. Our results clearly demonstrate resilient growth in Europe and other regions, while North America faced headwinds not only but also from currency effects. Revenue, Europe and Other segment increased by 10.3% year-on-year, reaching EUR 309 million. EBIT rose even more sharply, up to EUR 23.6 million to EUR 33 million, driven by strong revenue performance across all business lines.

The EBIT margin improved to 10.5% compared to 9.8% last year. These results reflect execution and the benefits of our high capacity load in our production plants. Besides this, we work full steam on our efficiency programs and have already achieved important milestones this year, further to come. Nonetheless, we will see the full contribution of these efforts as planned next year or part-wise even in 2027. Despite that, we had some additional expenses related to corporate strategy and ongoing IT projects.

Contrary, revenues declined in North America by 9% in the first 9 months. FX had some impact. On a U.S. dollar basis, revenue is down by 6.1%. However, operational performance stabilized in the third quarter, especially equipment revenues came back. Overall, North America delivered an EBIT of EUR 1.4 million in Q3, up from EUR 1.0 million in the prior year. With that much better Q3 result, the segment stands now after 9 months at breakeven. This gives me some optimism for the coming quarters.

To visualize different influences on our EBIT, this bridge might be helpful. Due to higher revenues, we could book EUR 7.3 million additional gross profit and another EUR 3.1 million due to higher gross profit margin. The gross profit margin is now at 31.6% compared to 30.4% last year. This positive performance was mainly due to the increased business volume in Europe, as already mentioned, given in the current setup of our production plants and working close to the limit, and we are facing in some regions, installation capacity constraints.

The product and the regional mix also supported this development. Contrary, we had higher selling and marketing costs resulting from higher outbound freight rates in connection with the revenue growth and of the expansion of our sales organization as well as from the launch of the new products.

Higher administrative expenses are mainly linked to IT expenses for ongoing projects such as already named SAP investments and new software for the service optimization. In total, earnings before interest and taxes are up by EUR 4.8 million to now EUR 32.4 million. This results in an EBIT margin of 9.0%.

Now some other important KPIs. In line with EBIT development, net income increased compared to last year, similar earnings per share. We achieved EUR 1.57 compared to last year's EUR 1.30. Our net financial debt of EUR 60 million is EUR 5 million above prior year's level. with credit lines of around EUR 100 million, unused by more than 50%, our financial position is quite strong.

In respect of net operating working capital, we see more or less similar numbers by around EUR 90 million compared to end of September last year. Compared to the end of last year, which was at EUR 94 million, we are down by EUR 4 million. We are still cautious about investments, meaning after 9 months, we spent EUR 5.5 million. The main portion of those investments is linked to our North American production plant, where we bought some machines to strengthen our local production footprint and to our digital products and solutions.

Our equity ratio is at 25.5% compared to 26.7% end of Q3 2024. But our balance sheet is still very solid and very healthy. In terms of employees, 85 more people work for WashTec compared to 1 year ago. The majority is hired for service. I already spoke about this one.

Let us now debate a little bit about our order backlog. As usual, this slide doesn't give absolute numbers, but index numbers based on a 5 years view. In the first 9 months of 2025, WashTec Group did very well in terms of order intake, especially in Germany and France, we had a very strong order intake, whereas North America remained at prior year's level in euro and a little bit above in U.S. dollar. Especially in Q3, we saw here some progress.

Consequently, this overall higher order intake results in higher order backlog, which is 20% over year-end 2024 and a comparable level compared to end of Q3 2024. Knowing about this good order backlog, we have some clarity on increasing equipment revenues in the next 6 months in all segments. This provides us with a solid base for the months ahead.

Coming now to our guidance. WashTec confirms its guidance for the group for 2025 based on our current order backlog as well as progress of our initiatives. Especially the EBIT development in Q3 supports our guidance with regards to a disproportional increase of EBIT compared to revenues. We now expect revenues and earnings growth in Europe and other segments to be comparatively stronger and in North America, relatively weaker in local currency.

But overall, we expect for the group, a full year growth of revenues by mid-single-digit percentage and a disproportionate EBIT increase in excess of revenue growth. Full year's free cash flow is expected to be in the range of EUR 35 million to EUR 45 million, and we also see improvement in our ROCE number.

Summing up, we confirm our group guidance for 2025, and we look optimistic into the future. This forecast is based on the assumption that the current global trade conflict will not have any significant negative impact on investment behavior in the car wash market.

Next slide, please. So before we start with the Q&A session, a quick reminder about our upcoming capital markets communications. Feedback we got from you after our first capital market webcast on July 10, we feel ourself-confirmed that this type of communication really adds some value. Therefore, we have recently announced to do our second capital market webcast on November 20. Currently, we are working on the details. But I can tell you that we want to explain in much more details what is the plan in future for our consumable business as well as some deep dive into our efficiency programs. These are essential part in our plan to achieve our midterm profitability targets. So we hope that you dial in. Straight after, we will be in November at the German Equity Forum where we can meet in present. We are looking forward to meet you there. So that's it from my side. Thank you for listening.

[Operator Instructions] And we already have the first question from Stefan Augustin from Warburg Research.

My first question is actually on the very strong European margin. If I look at the recurring revenues, it's likely not a positive mix effect. So is this then driven by the efficiency programs? Or is that simply driven by the volume and load? That would be my first question. And from that one, I have likely a follow-up.

Let me take this one, Mr. Augustin. Thank you for asking that question. So yes, you are right. In Europe, we are doing very, very well. And our gross profit margin is influenced by similar different topics. For sure, there is a higher revenue, which helps us there. The production load is better. And there is also a small contribution by better material prices, but also we see the first effects on the efficiency programs, not at a stage where we wanted to have them. That is what we have announced a little bit, but we see that they are also contributing.

Okay. From that one, looking maybe into Q4 and taking your full year guidance, which implies that we have maybe a slightly lower or roughly the same volume in Q4 as the last year. If you have savings on the material side, gains, would it be fair to assume that on the European business, you should at least be able to get the same absolute amount of EBIT with the same volume?

So indeed, yes, we are planning that we reach or achieve our guidance in total. We will be stronger in Europe compared to last year and weaker in North America. So if I look at the Q4 for Europe stand-alone, as you asked, I'm positive that we are doing here pretty well again.

Okay. And then maybe a bit on the order intake. If I read your slide correctly, my assumption would be that we have a book-to-bill in Q3 that is very close to 1. And what it does not show me is the actual growth in the order intake Q3 year-over-year. Can you comment on that one?

Yes, a very important topic, which is a regular bigger order, which we receive once in a year is related to North America, where we -- in the comparable numbers last year, we had from bigger customer, a great order in the figures. We did not have received this order this year, but we expect to receive it in the fourth quarter. So that is one part of the explanation.

All right. And the last one, could you help me a little bit with how much the IT and other implementation costs have burdened Q3?

It will come in future when its Q3 already. So it's -- the question is how much was it in Q3? So we are really -- we are facing the implementation of, for example, SAP S/4HANA is pretty expensive, and we started the program in beginning of this year and every quarter, it's a little bit more. So stand-alone in Q3, if you ask me right now, I would say it had cost us between EUR 0.5 million and EUR 1 million together with the other programs.

Okay. And that one, you indicated it's going to go up a little bit going further.

Correct. Yes. So according to the plan, which we see is that we will need next year for fully implement S/4HANA and some other IT programs as well. It's not only S/4HANA, but the plan is that we will have done this with the first 2 major steps until Q4 2026.

We do a lot of SAP S/4HANA has advantages that is driven by cloud costs, and we started in parallel to reduce the cost for cloud data storage that we -- with all our manpower and efforts to -- that you have only the data in the cloud in SAP S/4HANA that really need there and the others are still on-premise or somewhere else to have our costs under control in the IT sector.

I don't want to spoil the upcoming Capital Markets Day, but I assume that, let's say, you skipped how much that could be in 2026. Would you be happy to share at this point or...

Probably -- we will not give a detailed number for our introduction cost of S/4HANA. Probably that is too much insight, but we will give an indication about it, how we see it.

Okay. And then finally, do you think -- would you describe yourself at this point also very confident to achieve your full year guidance with respect to sales?

Yes. Simple answer, yes. We feel confident.

We have another question from Nicole Winkler from Berenberg.

Maybe starting with a housekeeping question. In your report, you mentioned that all 3 business lines contributed to revenue growth in Europe in Q3. How about North America? Was it mainly driven by service and consumables again in Q3? Or do you already see the uptick of equipment sales?

North America, that goes along with the story which we already said in Q2 about a major customer who places orders again. So what we now see in North America is that especially equipment in Q3 contributed here. But also there was not too bad in terms of service and consumables. But comparable to last year, the equipment topic was in favor for us.

Perfect. Maybe this also goes along with this one big customer, but you also mentioned that contract negotiations in North America are finally finalized and order intake increased significantly. Now looking at the order backlog, you cannot see this yet. So basically, can you give us some more color here when we should see also these kind of orders coming in from big North American client in your order backlog?

So I assume the client you are mentioning is we are confident with it. Yes, the orders are coming in. The order backlog is fine. The client I mentioned in my speech before is a different one, where we expect to get the orders in Q4 this year.

Okay. Understood. Maybe also regarding the service revenue, can you give us some more detail in which amount the optimization of processes, the digitally connected equipment and increased capacity in this area contributed to revenue growth. What I would like to understand is because you mentioned it that now you have like, I guess, 13,000 connected units by now. Do they already contribute to service and consumable business?

Yes. The more machines are connected the better we can work with the data, the better we can push the efficiency of our service business line. What is important for this year also, and maybe I just mentioned it somewhere in between the lines, we have hired throughout the year a lot of new service technicians. And you understand immediately that if you hire a new person, you need to train this person, you need to educate this person. So at the beginning, this person contributes to the top line, but not necessarily in the same amount to the gross margin. And what we see now is in Q3 that we are catching up here again, and we are in the same EBIT margin in service like we have been last year. And I think that is really something very positive, understanding how much new service technicians we have hired.

And it takes us 3 to 9 months currently to train them. And this is also where we work on to reduce our complexity that in future that they contribute faster to revenue and EBIT margin than it's today.

Okay. Understood. And one last question regarding your shift of workforce from Germany to Czech Republic. Have you had any restructuring costs? And if yes, which amount in Q3?

We have cost because we have to train the people and we have some processes and people in parallel. How much it is, I can calculate it in my brain fast if you have the number.

So the topic is that in the moment when we shift, we need additional people. So we need the people here and we need the people there in Czech because they have to train. But if your question is referring to severance payments or stuff like this, so we are really happy that we could do this and can do this without any major severance payments. So we are just using fluctuation. We are reducing temporary workers. And so as of today, and we are not fully through, but as of today, we do not have any significant severance payments.

You can calculate around 10 to 15 people in parallel for 2 to 3 months. And this is over 1 year time period. This is our extra cost here. We have calculated this in the savings and we hope that after the starting phase that the savings we gain that we can cover the extra cost in the following months.

And we have another question from Alexander Galitsa from Hauck Aufhäuser.

I have a couple of topics, different ones. Maybe first one, just a clarification. You mentioned in your remarks that for 2026, you will be focusing on pushing forward the initiatives that are underway to prepare the company for disproportionate growth in 2027. I'm not sure if I heard it, maybe I misheard, but could you just clarify that should we read it in a sense that one should not necessarily expect disproportionate EBIT growth in 2026 or it was not that -- it was not meant that way?

What I meant was that we will have still some costs with doing all those efficiency programs and that we will see the efficiency gains from those programs on a full year's perspective in 2027. And we really need to execute those programs and that they really kick in because in the Capital Markets Day and also Michael today repeated it again that in 2027, we want to achieve an EBIT ratio between 12% and 14%. So if you go from 2025 to 2027, I do not think that it will be a linear growth. So there will be a little bit of burden in 2026, but we will also grow in 2026, that's what I believe.

Perfect. And maybe just a quick follow-up since you mentioned the range, 12% to 14% is obviously a big bandwidth. The upper end of this bandwidth, what would you say you need to achieve to get there?

We have calculated this already. Otherwise, we couldn't promise that we try to achieve it. So we need revenue growth in our segments. We think we can do this not only in equipment also in chemicals and service. And on the other side, we have really to focus on our bottom line. There is a lot of opportunity there. And if we do this in the right way, so reducing complexity by 20%, 30%, implementing our installation process in the next levels, which we are focusing on currently.

And I think we are close to implement the next phase. We have some standard programs, how we want to achieve efficiency in the indirect areas. So if the growing is coming as we expect it, and it looks like in the order intake and we do our homework in the bottom line with our program, then I'm really confident that we can achieve that.

Perfect. Then maybe briefly on consumables growth. I just wonder if you could somehow elucidate to what extent consumable growth is already driven by the bundling initiatives? And maybe what's the sort of natural progression in terms of time frame when those bundles are going to play a role in that regard?

We implemented the scope configurator just a few months ago. So there is not a lot of revenue and EBIT margin due to bundling in that area. So we expect more in that area 2026, but we have to roll out the system. We have to train the people and so on that the full scope we think we will get in 2027. So it's a step-by-step market by market. We started now in Germany with focus on Germany and now we go from the biggest markets to the smallest markets to get efficiency as early as possible, but this takes time. And we think full gain is in 2027.

And you're generally confident that this would -- is getting traction within customers and there's not going to be a major pushback on the bundle offer?

We are deeply convinced that this will ease up the process and also for our customers that they clearly see what they order for what kind of money and what they get finally. And we can use and chemicals are driven by headcount as more headcount you put in the system as more you can achieve. And with that, we can also use our equipment salespeople in a better way than we have done it before.

Understood. And then just 2 last topics I have. One is on equipment growth. I think you already mentioned that backlog gives you certain visibility. Could you confirm or is that reasonable to expect that equipment should be also growing year-on-year in Q4? Because I think you're kind of competing also against a strong base. But based on your backlog, is that a reasonable assumption that equipment should grow?

Being a little bit cautious. Last year Q4 2024 was a pretty strong equipment quarter. We expect that this year will be on the same level like last year. But in equipment, you really have the topic that you are -- you do not have it always in your own hand if the revenue slips to the beginning of January 2026 or if you can make it in 2025. So our expectation is that we can repeat what we had last year.

Okay. Perfect. And then very last one. I don't know how material this topic is, but there has been a press release from you some time ago on a partnership with Prag, I believe, is the owner of 100-plus petrol stations. And I think they've commented that they are delighted to have 30 of those stations digitalized. Just wonder what does WashTec get incrementally from a partnership like that? Will you start selling more services and consumables into this specific customer? Or how should one read that news flow?

I think the most important thing here is that we are confident that our digital initiatives, they are accepted by the customer. And Prag is for sure, one of midsized customer where we tested if it works. And we got really positive feedback from the cooperation with Prag, and I think it's moving here in the right direction. I do not want to comment if we make now much more revenue or EBIT with one single customer. I think that is not here the place to speak about a single customer.

What we see -- probably in that direction, what we see in the data with our pilot facilities, not only with that customer is that we increase on our operator side, the number of washes per site. So this we see already with our pilots. And this is good news for our operators. And this on mid- and long-term run is a good news for our equipment sales, which is in a year's perspective, but it's also good for our service and equipment as more washes we have as more we have traffic here in that business. So this is what we see, and we have to support here that we have good numbers that we have a good app and good equipment installed and that we have transparent data available and can provide this to our operators and they set in place, the next step will come automatically.

We have no further questions.

Okay. Then ladies and gentlemen, on behalf of the Management Board, we would like to thank you for your interest in our company and wish you a pleasant day. Thanks.

Thank you very much for joining. Bye-bye.

Good afternoon, ladies and gentlemen, and welcome to the WashTec conference call on the report of the first half year 2025. My name is Kevin Rowand, Investor Relations Manager at WashTec.

And with me today, I have our Chief Financial Officer, Andreas Pabst, who will guide you through the results for the first half year. Unfortunately, our CEO, Michael Drolshagen, cannot join us today. But during the recent Capital Markets webcast, which is also available on our Investor Relations website, we gave quite a deep insight into recent developments at WashTec. As you might have -- you might have already seen, we are now using a new platform for our conference call. The floor will be open for questions following the presentation. Anyone who enrolled to our e-mail distribution list received a link with which you are able to ask questions. [Operator Instructions] Of course, this call will be recorded and made available on our website.

And with that, let me hand over to our Chief Financial Officer, Andreas Pabst.

Thank you, Kevin. Welcome, everybody. Glad to have you here in this call. Despite the fact that the focus today on financials, I would also give you a hint that in our first Capital Markets webcast on July 10, the Management Board of WashTec gave a deep insight into our strategic direction, our transformation to a solution provider, our financial framework and first time into our financial midterm targets. But now coming to the results of H1 '25.

On this slide, you can see our main financial KPIs on a long-term basis. And to make it short, WashTec is doing pretty well. In half year -- in the first half year, we were able to increase our revenues by 5.6% to now EUR 232 million, especially Europe performed quite good. Our EBIT margin after 6 months is back on the good level of last year, meaning we show up with an EBIT of EUR 17.6 million, which is in absolute terms, EUR 1 million above last year. And also our free cash flow stays at a high level of EUR 20 million.

Before we step into our business lines and segments, let's have a glimpse on Q2 stand-alone. Also in the current quarter, we were able to outperform our top line compared to prior year second quarter, a plus of 3.5% in terms of revenue results to a total amount of EUR 124 million in the second quarter 2025. But more impressive is that we achieved an increase in EBIT to EUR 12.7 million, a plus of 10.4% compared to prior year. Our EBIT margin stands at 10.3%, the highest profitability since 2021. So overall, in Q2, we are back on track according to our guidance. Top line growth accompanied by an overproportional growth of profitability.

Now coming to more details on our revenue streams, starting with our business lines. Equipment revenues slightly increased in the first half year as well as in the second quarter. Sales in Europe, especially in Germany and France, were pretty strong and compensated the shortfall in North America. Given the good order intake and strong order backlog as of June 30 in all regions, we see further good equipment sales.

Our recurring revenues with service and consumables are still quite good. After 6 months, service was up by 8.4% to now EUR 78 million, whereas consumable revenues expanded by 12.4% to now EUR 38 million. Especially in the first quarter, we had some tailwinds because of good washing weather, but we also work on further improvement lying in our own hands. As an example, we invested in our service network and hired around about 80 service employees. And to increase the efficiency of our service technicians, we sit them with a new field service solution software. But there are also some other ideas for improving the efficiency of our service in our back office. New service technicians must be trained. This goes along with slightly weaker profitability, but we see that we are on the right track.

In terms of consumables, we are doing well, too. The new products like MagicCare or the new packaging [ TeminaBox ] help to intensify customer contact and give us the possibility to create new consumable bundle offers. The total ratio of recurring revenues was 47% in the second quarter. This is slightly lower than the first 3 months of this year, but follows our regular revenue split throughout the year.

Overall, the split of revenues is developing in the right direction. Recurring revenues in service and consumables expanding more and more. In H1, we already had 50% of recurring revenues compared to 48% in half year 1 2024. Let's now turn the perspective and take our segments in the focus. Giving an explanation in short, Europe is doing very well, whereas we have some topics in North America.

First, Europe and others. In terms of revenue, we did EUR 80 million or 10% more than 1 year ago, altogether EUR 203 million. All business lines contributed to this positive development. Given the current order backlog and the positive impact from the launch of the new SmartCare Connect embedded in the Bright Future campaign as well as the efficiency initiatives, we expect good quarters to come. Our EBIT increased by 16% to now EUR 90 million for the first 6 months and impressive development and shows now a clear disproportionate EBIT increase of profitability in excess of revenue growth.

As mentioned above, we hired additional service technicians. Further, there are some IT projects, not only in Field Service Solutions, but also project SAP S/4HANA, and we expected in connection with the corporate strategy realignment, which we laid out in May and explained in detail in the Capital Markets webcast. Together with the product launch, this caused higher marketing expenses. And furthermore, in Germany, we faced some onetime payments according to the labor agreement. Besides this, we work full steam on our efficiency programs and have already achieved important milestones this year.

Nonetheless, we will see the contribution of these effects as planned at a later point in time. Overall, the EBIT margin in this segment is 9.4% after 6 months to compare last year's 8.9% -- this becomes even more impressive if we recap that after 6.6% in the first quarter, we achieved now 11.8% in the second quarter.

Coming now to North America. Revenue in the first 6 months [indiscernible] significantly by 15% to EUR 31 million, similar development also in Q2. This is mainly caused by lower turnover with key accounts. Increasing revenues with service and consumables couldn't cover this. Looking at the current order backlog and in July, we also had a good order intake, we can look more optimistic to the coming months. This optimism is also supported by successfully finalized contract negotiations with key accounts who are now starting to order again.

Due to the lower revenue, segment EBIT is down at minus EUR 1.5 million compared to last year's EUR 0.2 million. To visualize all these influences, our EBIT bridge is helpful. Due to higher revenues, we could book EUR 3.7 million additional gross profit and another EUR 1.2 million due to the higher gross profit margin. The gross margin is now at 30.6% compared to last year's 30.0%. This positive performance was mainly due to the increased business volume in Europe and the favorable product and regional mix, which includes a higher percentage of service and consumables.

Contrary, we had higher selling and marketing costs resulting from higher freight rates and the planned expansion of our sales team. Higher administrative expenses are mainly linked to IT expenses for ongoing projects such as already named SAP investments and new software for service optimization. In total, earnings before interest and tax are up by EUR 1 million to now EUR 70.6 million, which is an EBIT margin of 7.6%.

Now some other important KPIs. In line with EBIT development, the net income increased compared to last year. Similar earnings per share. We achieved EUR 0.84 compared to last year's EUR 0.80. In respect of our net operating working capital, we see similar numbers by around EUR 84 million compared to end of June last year. Compared to the net operating working capital end of last year, which was EUR 94 million, we are down by around about EUR 10 million, mainly due to lower accounts receivable.

As we are cautious about investments, it is not surprising that we are on a similar level to last year's after 6 months. The main portion of those investments is linked to our North American production plant, where we bought some machines to strengthen our local production footprint and through our digital products and solutions.

With net financial debt of EUR 65 million, which is EUR 8 million above prior year level, credit lines of around about EUR 100 million and with an equity ratio of 22.8% compared to 24.9% end of Q2 '24, our balance sheet is still very solid and very healthy.

In terms of employees, 110 people more work for WashTec compared to 1 year ago. The majority is hired for service. And we welcome 24 new WashTec employees in connection with the acquisition of the Polish company.

Let us now have a glimpse on the order backlog. As usual, this slide doesn't give absolute numbers, but index numbers based on a 5 years view. In the first 6 months of 2025, we did very well in terms of order intake. In all regions, we have done better than 1 year before. The same statement is true for all customer groups. Consequently, this higher order intake results in a higher order backlog, which is by 21% over year-end 2024 or by 6% over end of Q2 2024. Knowing about our good order backlog, we have some clarity about increasing equipment revenues in the second half year in all segments, and this provides us with a good basis for the months ahead.

Coming now to our guidance. We published our guidance on March 26. Only a few days later, economic growth was heavily shaken by the so-called Liberation Day. Since then, we have ongoing discussions. And finally, it looks like that we have a deal now with -- which is not so in favor for European companies. But given our local U.S. production footprint, we do not see major direct impact of the tariffs. Nonetheless, all the ongoing discussions and the uncertainty is not helpful for our business, especially predictability becomes more and more difficult.

Given that statement in advance, WashTec keeps its guidance for 2025 based on current order backlog as well as progress of our initiatives. Especially the EBIT development in Q2 supports our guidance of a disproportional increase of EBIT compared to revenues. Overall, we expect a full year growth of revenues by mid-single-digit percentage and a disproportionate EBIT increase in excess of revenue growth. Full year's free cash flow is expected to be in the range of EUR 35 million to EUR 45 million, and we see also improvement in our ROCE number.

Summing up, WashTec confirms its guidance for fiscal year 2025. The forecast is based on the assumption that the current global trade conflicts will not have any significant negative impact on investment behavior in the car wash market. So overall, we look optimistic in the future, and we keep our guidance.

With that statement, I will shortly hand back to Kevin.

Before we start with questions and answers, a quick reminder. In September, we will participate at the Berenberg Goldman Sachs German Corporate Conference and in November at the German Equity Forum. We're looking forward to meeting you there. We will now begin with the question-answer session. Maybe give everyone a little bit more time to -- we have one question from Alexander Galista.

Good afternoon. I hope you can hear me.

Yes, we can hear you very well.

A couple of topics. Maybe starting out with market. It's good to see you have successfully concluded the negotiations with key accounts. Just wondering how happy are you with the outcome? Was it in line with your expectations or maybe you could fare better than thought? And also, if you can remind us what are the dynamics of those negotiations trickling down into your order backlog? To what extent is it already reflected? To what extent is it not?

And then maybe kind of a second tier question to the topic of North America equipment. You mentioned that you expect a return to normal in the coming months. Just wondering if you could add some color what do you mean by normal? Will you be able to get close to second half 2024 in terms of revenue for the North American market? And maybe specifically for equipment sales within North America, whether you expect equipment to return to growth in second half on a year-on-year basis?

So maybe I try to answer all your questions, how good I can without naming the customers, which are behind. So Alexander, that is true. We had one of our -- some of our major customers say they were long-term negotiations. We expected them to be finalized on the first step end of last year. And it turned out that it took much longer. And especially in North America, therefore, we did not see too many order intake from those major customers. Now the contract has been signed. And regarding to question, what is it compared to the former contract with the customer, it is split between Europe and North America. But in total, we see that we are -- that the total volume we get with the customer over the next years is higher than we got within the old framework.

And coming now to the North American business, yes, we are depending there really more on those specific customers. They did not have ordered too much in the first half year. Now the contract is signed, we already see first order intake in North America. But what is also important is that we got some tunnel orders in North America, which is pretty helpful. So also -- and that is why I mentioned the July order intake in my speech was a good month in terms of order intake in North America. Now it depends when we can convert this order intake into revenue. So giving the, let's call it, the segment forecast in terms of revenue, it's probably a little bit too early because we do not really see especially for those tunnel offers, do we get this or turn it into revenue already this year or will it be next year? But overall, we really believe that we are now speeding up in North America.

Okay. Perfect. Then maybe a couple of other topics regarding consumables. What one can see, and I think you were always transparent on consumables reporting that there has been a shift in momentum in 2022, where you started really to grow the vertical. And one can see that this growth was characterized by sort of surges in revenues in 1 or 2 quarters, I guess, as you onboard customers and they stock up chemicals and then subsequent sort of return to a normalized run rate level. And the last such surge has occurred in Q2 2024, which made the comparison especially demanding for this quarter, yet you still managed to grow consumables slightly. So my question here is do the first half revenues in consumables represent a good normalized run rate or whether those revenues that you reported in the first half are somehow propped up by onboarding of customers? Or are there any other special effects related to weather? And if so, then to what extent that was propped up? And kind of related to that, is that fair to think that second half consumables would be at least on par with the first half?

So I would say in the first half year, there is not really a big impact from one big customer in terms of consumables. So that's something we had 2023, 2024 when we onboarded the first customer and then it slowed down a bit. So what we see in this year is that especially Q1 was very good washing weather, yes. So it was more or less sunny every day. That helps the consumable business, whereas I would say Q2 was a more normalized business in terms of consumables. Where we are optimistic for the near future is that we are now rolling out this -- some new products like the MagicCare. It's really an excellent product. It's a new polish. You really see it on the car. And if you can combine this one together with other offerings we have in consumables, I think then there is a lot of room for improving the business. But once again, relating to your question, what was more normalized year, I would say Q2 was normalized. And if we combine Q1 and Q2, then things special in. Okay. Understood.

And with -- just to clarify this MagicCare, has this been already a factor behind revenue growth in consumables in prior quarters? Or is this something that is just about to sort of help?

It's really pretty new, and we are currently working on how we want to go to the market with this new product. It's really outstanding. The question is how we will approach the market. And will we give this as a single product? Or do we combine it with other products in our consumable portfolio. So that is where we are currently working. But as a polish, it is really good. So -- and therefore, we are optimistic.

Perfectly clear. And then I think I'll just ask another one, and then I'll go back in queue if there is one. With regards to SmartCare Connect and SoftCare, could you maybe give some color on the dynamics you're seeing there when you acquire new customers or maybe when you replace machines, what percentage of customers opt for SmartCare Connect as opposed to SoftCare? Like what are the dynamics you're seeing in this business?

So the order dynamics doesn't really change. It is based on rollover and Connect is really a good machine. So it's more that we have it in our own hand, what we are selling. And we have this market launch of SoftCare Connect was May 5. May 5. And from that day onwards, we only sell SmartCare Connect. There is only a very minor number of software, which we are selling due to old contracts, and it will really fade out.

Thank you. I’ll get back in queue.

We have another question from Ms. Winkler from Berenberg

Thank you. Can you hear me?

Yes, we can hear you as well.

Okay. Perfect. So basically, it's a follow-up question on the question on North America. So you're mentioning that you're seeing an increase in equipment orders and it depends whether the revenues slip into 2026 or not. But what I was wondering is regarding the margin in North America. What are you expecting for the second half? Is it like a similar run rate as in the first half? Or what makes you confident that margins might increase in the second half?

If you look at the whole business model, which we are running in North America, then in North America, we do not sell our own consumables, as you probably know. Therefore, we are really missing some margin in consumable business. That means most of the earnings is coming from selling equipment and from service. So if we had lower equipment sales in the first half year, that really also gave a lot of pressure on the margin. And now we see that the equipment revenue will come up in the second half year. That means that we will also have the effect on the EBIT margin. I really do not expect that we see the same result in the second half year than what we have seen in the first half year. It will be better.

Understood. That’s it from my side.

Well then, another question from Mr. Galitsa.

Yes. I appreciate the follow-up. Just on OpEx considerations, is it fair to think that functional expenses as a whole should probably be somewhat higher for -- on the year-on-year basis in the second half, but probably running a bit lower than what you had in H1 given the additional costs you had for projects initiatives you're having, right? Or is that too detailed for you to answer?

My best estimation right here right now would be just double the number from half year 1 to second half year.

Understood. And then the very last one, just a clarification on earlier communication you've done around the optimization of the production footprint with Czech Republic and Augsburg. You were referring to savings in the range of 30% to 40%. Would you be able to roughly estimate this 30% to 40% on what share of COGS does it -- I think you commented a 30% to 40% savings in logistics. What share of COGS are logistics, if you think about equipment?

So first, there is inbound freight and outbound freight. The outbound freight is under selling expenses, so it's not part of COGS. Inbound freight is honestly, I guess may I come to you back with answer.

No worries. I thought everything is in COGS. So yes, no problem on that. That I think is my... Well, then we don't have any further questions for now.

So then thank you all for participating for taking -- for asking the questions. Thank you for my team here. With this new techniques, it worked well. Thank you for that. Thank you for joining our call. See you. Bye-bye.

Bye.

Good afternoon, ladies and gentlemen, and welcome to the WashTec AG Capital Markets webcast. [Operator Instructions] Let me now turn the floor over to Kevin Lorenz.

Welcome, everyone, and thank you for tuning in to WashTec's First Capital Markets Webcast. My name is Kevin Lorenz, and I'm the Investor Relations Manager at WashTec. Today, we are trying out a new format in order to intensify communication with our current and potential future investors.

With me today, I have our 3 Board members. Chief Executive and Chief Technology Officer; Michael Drolshagen; Chief Sales Officer; Sebastian Kutz; Chief Financial Officer, Andreas Pabst. Also here, are 2 experts who are pushing the digitization efforts within our organization forward. Morten Dale, Executive VP for the Nordics and Operator Services; and Carsten Klees, VP for Digital Solutions.

Let me quickly guide you through today's agenda. First, Michael will present to you the strategic direction of WashTec. Afterwards, Sebastian will explain the ongoing transformation of WashTec to a solution provider. Then, we have planned a short excurse into our digitization efforts with Morten and Carsten, who will showcase some innovations.

Please be aware that at the end of this experts, there will be a separate Q&A session with Carsten and Morten specifically on digitalization. This will not mark the end. We will move forward with Andreas, who's going to outline the midterm financial plan, followed by Michael's conclusions. And of course, at the very end, our 3 Board members will answer all questions you might have.

With that, I'm handing over to our CEO, Michael Drolshagen.

Thank you, Kevin. Ladies and gentlemen, also from my side, welcome to WashTec's Capital Markets webcast. I'm very pleased to welcome you here today as CEO, but above all, as someone who is deeply convinced of the potential of our company. Today, I would like to show you where WashTec stands, how we are strategically aligned and why we are excellently positioned to actively shape the future of vehicle washing.

Let's start with a brief overview. WashTec currently has over 43,000 installed systems worldwide. The installed base is our big plus compared to our competitors. With this space, more than 3 million vehicles are washed with our equipment every day. That's an impressive figure. We employ around 1,800 dedicated employees. And together with our partners, we are located in over 80 countries.

With over 60 years of experience in carwash, we're not only the market leader but also innovation leader in vehicle washing. Our strength, the largest service network in Europe, the largest installed base worldwide, a comprehensive portfolio as one-stop-shop and last but not least, a clear leadership role in technology and innovation.

When we talk about the future, it is us taking a look back at the history that makes us proud and at the same time, obligate us. WashTec is built on a foundation of 140 years of experience. Our roots go back to 1885 with the founding of Hans Kleindienst in Augsburg, the origin of our company today.

In the further course of the company's history, we have developed strategically through targeted mergers and acquisitions like California [ Roe ] and Kleindienst or the acquisition of AUWA Chemie as an important milestone. To put it in one sentence, we were the ones who automated the car wash and continuously brought new innovations. Now we stand at a new historical transformation since the car wash becomes digital.

We have made a strategic decision in favor of this approach to enter into the partnership with Superoperator. These milestones show we think long term, act strategically and consistently adapt to market changes. And last year, as technological pioneers, we did launch the new SoftCare SE and this year, we did launch SmartCare Connect, our next digital platform generation.

Today, 12,000 machines are already online, 8,000 of them through managed connectivity. This is not just a technological advancement, but a real competitive advantage. This history is not an end in itself. It shows that WashTec has always been strong when it comes to shaping change, and that is exactly what we are doing today, concise and to the point for chemistry from product to a strategic differentiator.

Let's start with an area that has grown enormously in importance in recent years, our chemical expertise. With the acquisition of AUWA Chemie in 2008, we took the wise step away from being a pure machine manufacturer and towards becoming a fuel service provider -- a full service provider. Today, we develop our washing chemicals in-house customized to our systems to the water quality on site and to the requirements of our customers.

What does it mean in concrete terms? Our chemical products are highly effective and environmentally friendly and biodegradable. They enable perfect washing results even with difficult soiling, and they make an active contribution to conserving risk resources by reducing water and energy consumption.

Above all, however, chemistry is a strategic growth driver for us. It creates recurring sales, strengthens customer loyalty and clearly differentiates us from the competition with our best-in-class products adapted to our machines for efficient top washing quality, concise and to the point for service from reactive support to a digital platform.

Alongside equipment and consumer base, another very important central area is our service business. And here, too, we have undergone a profound transformation in recent years. In the past, service was often reactive. Today, it's digital, proactive and data-based.

What does that mean? We offer remote services that minimize downtimes. We rely on predictive maintenance to recognize problems before they arise. We have introduced myservice.com, a digital platform for managing, analyzing and optimize in service processes. And we offer full service maintenance contracts that guarantee our customers maximum availability.

For us today, service is far more than just technical support. It is a central element of our customer relationship and their decisive lever for recurring revenue. What's more? By integrating it into our new matrix organization, we have created clear responsibilities with proximity to the customer and high implementation speed.

To summarize once again, WashTec has innovation in its DNA. As a full service provider, focusing on our customers and the customer journey, this is a real effort. Let us now pause for a moment and listen to what is most important to us at WashTec, the voice of our customers. We have analyzed the key needs and expectations of our operators, partners and end users as part of our comprehensive customers survey, and the results are clear and revealing.

Looking at the feedback of our customers, the top priorities are automation and smart car washes. Our customers want systems whether intuitive, efficient and digitally controllable for a better user experience and reduced labor costs. Water recycling and operational efficiency, sustainability is no longer a trend but an expectation.

Our customers want to save resources and reduce their operating costs at the same time, reducing energy consumption and using renewable energies, this also shows that energy efficiency is a key decision criterion when choosing washing technology.

And one more, improved cleaning of difficult vehicle areas. The demands on washing quality with faster vehicle washes at the same time are increasing. To be clear, time is money for our operators and good wash quality in a timely manner means happy and loyal customers at the end. For us, these results are not just a reflection of the market. They are a clear call to action. And this is exactly what our value proposition is based on. We offer convenience through a simple operation and digital control.

We deliver efficiency and sustainability through intelligent use of resources, and we guarantee quality with every wash, every vehicle and every customer contact. These values, convenience, efficiency and sustainability and quality are not just slogans, they are the guidelines on which we base our products, services and our entire strategy because only those who understand their customers can inspire them in the long term. These values lead to our 4 value propositions, the economic success of our customers and therefore, also of us and all our employees, partners and suppliers.

Let's now talk -- let's now take a look at the overarching goals that determine our strategic direction. These goals have not been chosen [ appropriately ], they are direct response to the developments we are observing in the market.

Let's start on the left with the market trends that are currently shaping our industry. Shortage of skilled labor, a structural problem that affects many of our customers. Operators are looking for solutions that can manage with fewer staff but still deliver the highest quality. Machine availability or uptime in a highly competitive environment, every minute counts.

Our customers expect maximum reliability and minimum downtime. Sustainability is no longer a nice to have but a key purchasing criterium. Energy efficiency, water recycling and CO2 reduction are now standard requirements.

Convenience for both operators and end customers. Operation must be intuitive, the washing experience pleasant and customizable. [ Stagnation ] in washing figures, we are seeing saturation in many markets. This means that our customers need to differentiate themselves more in order to remain profitable. These trends are not a risk for us. They are an opportunity because they clearly show us what is important, and it is precisely from this that we derive our 4 overarching goals.

Quality as an immovable foundation. Our systems, our chemistry, our service, everything must meet the highest standards. For us, quality is not a goal, but a promise.

Convenience and user friendliness for operators and end customers. We develop solutions that are intuitive to use, simplify processes and improve the washing experience. Economic success for our customers and for WashTec. Our products and services must pay for themselves through efficiency, availability and recurring revenue.

Sustainability is an integral part of our business model. We think in cycles, reducing resource consumption and developing solutions that make ecological and economic sense. These 4 goals are our overarching compass. They help us to make the right decisions in product development, in service and in the organization. And our customers made it clear, we listen, we understand it and we act.

Let's now take a look at the core of our strategic direction, what we call our house of strategy. Our Smart products form the foundation, they are the basis of our business model. But we go far beyond that. We bundle these products in new modular, customized solutions that are precisely tailored to the needs of our customers. Our focus is on the entire customer journey from initial contact to long-term support. This means that we offer complete carwash solutions, consisting of machines, chemicals, service and software, all from a single source.

Our digital products make it possible. Intelligent payment and control systems, data analysis and performance optimization, customer loyalty through smart user guidance. We are clearly positioning ourselves as a solution provider with a focus on Europe and North America on B2B business and with strong partnerships.

But strategy is nothing without culture. That is why we have committed ourselves to the following 4 value propositions: Customer focus and market understanding, enthusiasm and personal responsibility, values and the corporate culture that motivate and support our employees because our strategy comes to life through the people who implemented it.

In order to successfully implement the strategy, we have fundamentally restructured our organization. As early as September 1, 2024, we now work in a global metric structure that differentiates between 3 central levels. Business lines, they are the drivers of the business. They have budget responsibility, product and project responsibility and ensure synchronizing within their teams.

Functions. They ensure technical excellence, they define standards, processes and governance and are responsible for people management. And last but not least, regions. They are our local implementers. They act as sensors in the market, assume project responsibility in selected phases and ensure proximity to the customer. This structure creates clarity speed and accountability, and it has already had an effect.

The first quick wins, for example, by reducing the complexity of machines have been realized. Our service strategy and cooperation with the regions have also been reorganized with clear roles and more efficient processes.

Ladies and gentlemen, we at WashTec are not acting from a defensive position. We are acting from a position of strength. This strength is reflected in 5 key statements that summarize our current starting position and our strategic stance.

First, we are customer centered. Our strategy is not a theoretical construct, it is based on real customer feedback. We have listened carefully what do our customers need, what do they expect from us? We have translated the answers into concrete measures from product development to service organization.

Second, we are very prepared. In recent months and years we laid the foundations for actively shaping change. We have developed clever products that are modular, efficient and digital. We have created data transparency, both internally and externally. We have restructured our organization with clear responsibilities and the global matrix structure. And we have optimized our processes in order to be faster, leaner and more customer oriented.

Third, we have already started the transformation. This is not a future project, we are right in the middle of it. Our digital products are on the market, not in the pipeline. Our new organization has been implemented, not planned. Our strategy has been developed and is being implemented not just on paper. We have not only defined the direction, we are already on our way.

Fourth, our team is highly motivated and actively demands change. This is perhaps our greatest lever. We have a team that not only pulled together, but also helps to shape things, a team that is prepared to take responsibility, break new ground and questions the status quo. The willingness change does not come from outside, it comes from within the company itself.

We are continuing to write the WashTec success story with less complexity, more focus and clear prioritization. Less is more. This is not just a motto, but principle that we apply consistently.

To summarize, we have the right products. We have the right organization, we have the right strategy, and we have the right people. That's why I say with full conviction, we are acting from a position of strength.

Ladies and gentlemen, thank you very much for your interest so far. And I would like to hand over to my colleagues, Sebastian Kutz. Sebastian, the stage is yours.

Thank you very much, Michael. Before I talk about the transformation to becoming a solution provider, I would like to explain in more detail what we mean by acting from a position of strength.

We have a very broad product range. In the equipment sector, we offer rollovers, panels, truck wash, jet wash and water reclaim systems. This is complemented by a comprehensive range of consumables, technical services, leasing and rental solutions. Our portfolio is rounded off by our digital platform mywashtec.com. We see ourselves as a service provider and supplier of the entire horizontal value chain for our customers.

Globally, we have the largest installed base of any manufacturer. Rollover, which remain our main product, accounts for the largest share here. The share of water reclaim systems is rising steadily. This high number of installed machines not only provides the basis for recurring business through consumables and service but also forms the foundation and security of our business model.

Ladies and gentlemen, one of our greatest strengths and at the same time, an often underestimated competitive advantage is our service network. With around 1,800 employees worldwide, including over 700 in service, we have a unique presence and proximity to our customers.

This is not just a number. It is a promise. We ensure the availability of our equipment. We guarantee uptime. Service is not an add-on. Service is a central element of our business model.

I look at the global distribution of roles that underscores this. 41% of our employees work in service. Another 25% in operations, 16% in sales, 6% in research and development and 11% in administration and training. This means that almost every second employee at WashTec is directly involved with customers, providing maintenance, repair, consulting and support services.

Why is this so important? Because machine availability is a decisive factor for success today. Our customers expect the equipment to run reliably, efficiently and without downtime. And that is exactly what we ensure with a comprehensive, highly qualified service network. This strength is not easy to replicate. It is based on decades of experience, continuous investments in training and digitalization and a clear commitment to customer proximity. That is why I can say with conviction, our strong market position is also based on our strong service network. And that is a key building block for our future success.

Despite all our strengths, we are increasingly noticing that customer requirements are changing. As already mentioned, this has been confirmed once again by our recent customer survey. New challenges must be met with new solutions. For this reason, we began our transformation into a solution provider on May 5 of this year. The focus on new Smart services supports this transformation. I will explain the Smart services in more details shortly.

But first, let's go into more detail about the transformation we are currently undergoing. The basis for this is smart equipment. Building on this, the aim is to make existing service more efficient through digitalization. This is the only way to create additional capacity needed to offer new digital services. This also open up new business models for WashTec. One example is pay-per-use models.

Transformation like this doesn't happen overnight. We have to explain the new concept to our customers, get them excited about it and align our organization and employees with it. We need to gain experience, learn and continuously develop the concept of being the solution provider.

Companies like Google or Amazon took around 5 years to achieve a breakthrough with their new business models. We are working to make it happen faster but it will be a journey with the goal of establishing WashTec as a Smart solution provider [indiscernible]. Smart solutions for a bright future. This new slogan appeals to all stakeholders and, in our view, can be associated with all the qualities that WashTec stands for in the future.

Based on the new SmartCare Connect, we bundle equipment, consumables and our technical service into solution packages for our customers and connect them to our digital platform. This enables us to offer completely new digital services. We call these Smart services.

Since the bundle with chemicals and service is a basic requirement, we will further expand the share of our recurring revenues. The decisive factor here is to solve the emerging problems faced by our customers. As you can see in the chart, our main product, the rollover, has already been connected. Other equipment lines will follow shortly. The situation is similar for Smart services.

Let me now take you into more detail about the new services. First and foremost the services that are designed to make life easier for customers, the operators and the car wash customers. Let's start with SmartSite, the intelligent control platform for operators with multiple car washes at a single location.

SmartSite enables real-time monitoring and control of all system, analyzes efficiency and consumption data and creates a whole new level of transparency. The result, optimized operating processes and sustainable use of resources such as energy and water, which will lead to higher profitability for the site. In addition, comfort for the operator is significantly increased.

The second solution we offer is CarWash Assist, our Smart service for comprehensive remote monitoring and control of our SmartCare Connect. Thanks to the central hotline for carwash customers and the ability to intervene directly in the control system, [ male ] functions can be fixed remotely.

The result, reduced need for on-site personnel and smooth, efficient operation with unique convenience for the operator and to the satisfaction of every carwash customer. WashTec also enables its operators to run their facilities unmanned, which in turn makes it easier for them to open new locations.

In addition to unmanned facilities, there is an even more important perquisite for opening additional locations from the operator's point of view. It is the number of washes sold per year. Michael mentioned at the beginning that this has been stagnating for years at the existing locations. For this reason, the number of locations is also stagnating. But we have solutions for this as well. I would like to explain these to you on the next slide.

Now we come to the really exciting topics that will help our customers substantially develop their carwash business in the future. Let me start with WashNow our innovative sales platform where operators, car manufacturers and other market participants can offer carwashes.

Customers can see in real-time where carwash is available on this platform, book conveniently via smartphone or near future via the car's navigation system and pay directly via the platform, either per wash or in future as part of a [ flat rate ] model. Car washing has never been easier or more convenient.

The next Smart service to grow the cake is EasyCarWash PRO. It is the digital solution for modern and flexible marketing of carwashes. This user-friendly app allows operators to offer both individual washes and subscription models. Quick customer registration and targeted marketing tools help to attract new customers and retain them long term, for example, with attractive [ flat rate ] offers.

With these Smart services, we are setting new standards in digital vehicle washing. Efficiency, customer friendliness and increasing the number of washes are the focus.

My two colleagues, Carsten and Morten will now explain the EasyCarWash PRO Smart service in more detail. Thank you.

Yes. I'm Morten Dale, responsible for operator services and bringing out all the digital solutions to our subsidiaries and distributor markets.

I'm Carsten Klees, I'm Vice President of Digital Solutions, and here at WashTec, responsible for developing digital solutions, software and AI solutions.

You heard it already from Sebastian, there are basically 4 Smart solutions coming with our new solution provider approach. We would like to take now a few minutes to focus on one of them, EasyCarWash PRO and EasyCarWash For You.

The first question, of course, is what is EasyCarWash For You and what is EasyCarWash PRO. I'm sure all the viewers drive cars, are also carwash customers. Imagine to make your carwash experience just a little bit more pleasant. Instead of going into a shop, buying tickets, you can choose your carwash at an app and even don't have to get out of the car because you are a subscription customer.

And to showcase this a little bit. We have prepared a small video. It shows the user journey of a carwash customer. Nevertheless, so basically, the user experience is compared to a traditional and an analog way, much easier, it's a much more pleasant experience. And the key here is also that the customers can use subscriptions.

And Morten, can you elaborate a little bit about that?

Thank you, Carsten. This is, I think, maybe the most powerful tool we have seen in the last 20 years within carwash, we see that bringing in subscription, it increases the wash counts for the operators. It reduces the fluctuations with the weather, so we have a fixed monthly income for the operator. We see that due to the nature of carwash business for the operator with more operational cost -- variable cost, we also see that is very profitable. We see that it's a fantastic loyalty program for the customer, so we get happy returning customers.

And I think, let's say, looking into this power, we see from the operator point of view, if you look at the value of one average car wash customer, we see a traditional car wash buying single washes compared to an average subscription customer. The value of subscription customer is 3x higher. And when our operators, if it's a big network, if it's a small network, but they start reflecting on this, the power of this is really amazing, and that's where the good discussion starts.

That's great. It's basically a solution that drives the business of our operators through subscriptions.

That's right, Carsten.

This is an example, business case. What do you see here?

Yes. I think this is also interesting because we have been doing this for many, many years. I come from the Nordic region. And I think this is, let's say, an actual business case from one of our, let's say, larger networks.

We launched the subscription service at this network. And I think after 12 months, we saw an increase in the wash count, very close to 30%. And that also goes for, let's say, the profitability of the customers. So I think when talking to the management of this, let's say, larger network, they say this is the best decision they have done for the last 10 years.

And I think by having subscription, we also allow the local operators to, let's say, have tailor-made subscriptions for local businesses, for taxi drivers, for other customer groups. This gives them a very, very steady platform.

And we see that the power of convenience is amazing because they have traditional payment terminal, you can pay at a cashier. But just after 12 months of operation, we actually see that 70% of all the transactions, it happens through the app. And this, I think, has surprised us very positively that the change is happening so fast.

So having, let's say, a business with much more -- let's say less fluctuations, more predictability, more recurring businesses, this is, say, perceived very positive and leads to a very strong partnership with our customers.

So you mentioned the Nordics a lot. I assume we are also rolling this out in other countries already running?

Yes, correct, Carsten. We have now a dedicated team. So I think based upon the experiences from the Nordic countries, we are actively in Germany, Austria, France, Italy, many, many other, let's say, countries where we have subsidiaries. We're also expanding into Australia, into U.S. And I think we're also now opening up for all our dealer markets.

So all these tools have very, let's say, low thresholds, they are easy to get started with. And I think short term, we have basically 600 sites in the pipeline. So we are, let say, busy. And we see also, let's say, positive momentum from our colleagues in different countries that they welcome us to try to, let's say, assist them in scaling this in their local countries.

So you elaborated a lot on the benefits for our carwash operators. Since this is an investor webcast, tell us a little bit more of what's in for WashTec.

Yes. I think it's good to bring that up because we also have to maintain, let's say, higher wash count. It's also increased responsibility to maintain a very high uptime on their networks, if it's a large customer or a smaller customer. So it's very mandatory from us that they have to use WashTec or our chemicals.

It's also mandatory that they have a pay-per-wash service contract with us. So this is something we develop, and we also explained why we need this. And I think this is also then understood and respected by our, let's say, customers.

So the funding is a must?

It's a must, yes.

Okay. So after addressing all the benefits for WashTec and our operators, let's take a little look into the technology behind it.

So earlier in the example, basically, it's a system that relies on the license plate recognition, which makes us the easiest for our carwash customers to activate the wash. There's also another cam that shows a possible queue of the wash bay. It's all connected to the Internet through a little box.

Basically, when we look at the apps, there are two types of apps that we provide. The first one is, we call it EasyCarWash For You because here, we provide a solution that can be branded for individual networks that would like to provide an own app experience to their customers. The EasyCarWash For You app will then be present in the App Store and in Google Store under its own name, customer name and can be found and downloaded there, and customers can easily register there.

On the other side, we have EasyCarWash PRO. That is more addressed to smaller operators that have maybe only a couple of wash bays, that want to be part of WashTec's own solution. EasyCarWash PRO is, therefore, the successor of the original EasyCarWash we have launched a couple of years ago.

The main difference is that we have gained a lot of experience with our first edition. We learned a lot in terms of stability, robustness, scalability. And now, as we heard from Michael earlier, we partnered up with a company called Superoperator. We are working jointly on the further development of the solution. We act as one team, take technical decisions together. And this is what really accelerates our solution from now on.

Coming back to the technology, what you also see on this slide is the dashboard. The dashboard provides data insights to the operators to see how well the business is going, basically. But it also provides the possibility to define the products, the programs, the permissions, the individual customers will get the pricing, for example. This is all happening in this one dashboard. It's a web-based access.

But for sure, as a beginner in that business, if you never have had subscription business for your customers, this can be quite challenging, Morten.

Yes. So I think. First of all, what we often do, Carsten, is sit down with the customers and try to make them understand what is your current business, what are the mix of the wash programs, what are the variable cost situation? And then we sit down and we make different kind of simulations, and we ask them what kind of position do you prefer in your market. And by let's say, going hand in hand and we see the consequences. This is they say, very, very interesting.

And it also, let's say -- we can then share, let's say, the risks because the tool is powerful and it needs to be handled in the smart way. And while I say sharing all these experiences, we also see that we are able, let's say, to scale businesses in many, many markets because I think convenience knows no borders. So I think we see more or less the same effect in all the markets where we're active.

Great. So basically, we can say that EasyCarwash PRO is one part of our growing digital ecosystem. It combines the possibilities of license plate recognition and subscription, it's usable on a very broad base, and it's also connected also to our other my.carwash products, as we heard before.

With my.carwash, the operator platform, we have MyWashTec API, which provides API interfaces with data and to the machines itself, depending on the customer use case and also provides other interfaces for alternative digital ticketing solutions for our customers. That means this is a very good example how we are now transforming from an equipment manufacturer to a solution provider.

With that being said, that would be it from our side. And of course, we're looking forward to your questions if there are any.

[Operator Instructions] And we have a question coming from Stefan Augustin. Over to you.

Yes. Thank you very much. Some very interesting data here. Can you outline a little bit what happens exactly why a customer when he has digital solution, increases the number and the value of the carwashes? I mean, probably you have made a client questionnaire and get a bit closer to the answer. That would be some intriguing for me.

And the second one is, have you ever looked at the addressable market here? I mean, obviously, you would gain market share and your operators would gain market share. That is for the other equipment producers, and you could have a higher share in the chemicals business and you would add on top the software fee. Do you have an idea how much possible growth is in this overall stagnant market?

Yes. I think I can start maybe by addressing your good questions. I think we see that the different programs are valid basically for any market, if you have, let's say, a high market share. We also see that we increased the wash counts where we have a high market share. In less mature markets, we see this is also valid because it's a very new, much attractive offering from the operators.

So I think we basically see from different market perspective that this is, let's say, valid for maybe, more or less, all markets, both mature and less mature.

I think when it comes to, let's say, the bundling part, which we touched briefly upon, I think that's also key that we, let's say, are very clear on this when we start. We also have opportunities to link in also other equipment. But I think for the financial impact, I think we will hand that over to the Board in, let's say, later Q&A session.

And why is it that the customers actually go for more carwashes and more valuable...

I think this is the basics that when you have a fixed price that you pay per month, we see that in all countries that they change their carwash habit. I think we see the European average between 6 and 8 washes per year done in the machine. When we see subscription base with more than 10,000 subscribing subscribers, we see that the average wash is then between 25 and 30x per year.

So I think this, let's say, new way of bringing convenience and fair value to the market is actually changing the behavior of the car drivers. And this is, let's say, the force of convenience. So I think convenience here works like gravity.

Can you help me here a little bit? So if clients pay a subscription, I fully understand that. And then he can let's say, basically washes a car as often as he likes...

He can, as a general statement, wash as often as he want. But then this subscription, I think, is a big number game. It's like the Gauss curve. So we see that it's an average number game. So we see that the average usage is between 25 and 30 washes per year. And then, of course, you have some customers doing more and some customers doing less.

So I think just let's say, you have to keep in mind that this is the average number gain and look at, let's say, the fleet of a customer and looking at average numbers. And that's what makes this model also interesting.

But some customers, they use fair-use policy. But basically, we offer, let's say, wash as much as you want. And we see that with more than 10,000 customers on subscription, we see that its average is then 25 to 30x per year. It's very stable regardless of price point.

Okay. And then just back to that slide where we have, let's say, at the beginning, that is somewhere from 7 washes at EUR 8 per share to 12 washes at EUR 14 per share. So if he pays the subscription, is the 12x the 14 simply than the subscription price?

Yes, correct. That's correct. So it is for the fixed income per month from the operator point of view. And this then increases the value, as mentioned 3x compared to a customer that only buys single washes roughly 8 times a year.

[Operator Instructions] At the moment, there are no further questions.

Thank you very much. Then we leave the stage for Andreas.

Thank you, Carsten. Thank you, Morten. Really good for giving that insight. Hello. A very warm welcome. Great that you're all in the call today. Let's now come to a more profound but nonetheless, a topic with highest importance, WashTec's financial plan for the next years.

I will start with an overview of our financial framework, followed by our main financial KPIs, revenue, EBIT, free cash flow and ROCE, where we now give an outlook for the upcoming years until 2027 for the first time. After that, some other important financial KPIs and some nonfinancial KPIs for steering our company will follow.

Let's jump into the financial framework. The financial framework is what we, the WashTec Management Board, discussed and aligned with the Supervisory Board over the past months with respect to our general financial guidelines.

The framework consists of eight major components. First, we aim for an annual top line growth based on our superior offerings as solution provider. But here, especially the second component kicks in. WashTec stands clearly for a profitable growth. That means we always aim for an overproportionate operability growth. And if we initiate new programs, new projects, as shown by Michael before, there are many; we always target a return on investment under 3 years.

By acting so, we will be able to continue generating high and steady cash flows, which we invest in our business or use for payback to our shareholders. In terms of investments and CapEx, we keep our business model asset light, meaning we, as a solution provider, deliver everything what is necessary to run a profitable carwash business by our customers, but we do not invest in own operations apart from some flagship stores.

Over the last, we mainly distributed our free cash flow via paying dividends, and we want to continue to deliver high returns for investors. But this could also be done via share buybacks like we did until 2015. So our clear statement here is that we stand for high returns to investors.

Furthermore, we decided to put a stronger emphasis on our capital market communication. And today's event is only the beginning. Kevin will guide you through our financial calendar 2025 at the end of this webcast.

Regarding our financial structure, we stand for a strong and stable balance sheet with moderate leverage. To ensure that we are doing the right things, we have introduced a sophisticated set of financial and nonfinancial KPIs and metrics to steer the group. And last but not least, you find the item merger and acquisition on our financial framework slide.

Over the last years, we did only some minor acquisitions. We bought our former dealers in New Zealand and Poland. This was mainly occasional. That is something we decided to change. We want to play a more active part here in case there are attributable targets at a reasonable price.

Here are our four major financial KPIs, which we historically guided each year. After we have composed a 3 years plan times now, we now feel comfortable sharing our goals for the development of those KPIs till 2027 1st time.

On first term, you see that we set ourselves ambitious targets. With an average revenue growth of 5% per year, we plan to achieve a clear double-digit EBIT margin of 12% to 14%. Free cash flow remains at a high level of EUR 40 million to EUR 50 million and a ROCE above 28%. That's just an overview.

Let's now move to more details. First, let's have a look at the expectation of our revenue development by segments. In general, we will focus on our two segments, Europe and North America. By expanding our market share and bundling our offerings, we want to grow in all regions. Also in 2027, our strongest local market will be Germany, full U.S. and France.

Digging a little deeper into the different segments, we see ourselves with over 40,000 installed machines as a clear market leader. For Europe, we expect for the upcoming years, a stable or slight increase of carwash sites; whereas in North America, we expect the growth rate a little bit higher. We believe that the split between key accounts and nonkey accounts, to be stable, which means that we postulate a key account ratio of 40% to 45% of our total revenues.

So given the fact of slowly growing number of carwash sites and our ambitious -- or ambition of rising revenues in all markets, we clearly need to have a market-changing idea or ideas. And that is what we have. With the further expanded number of connected machines and the usage of our advanced digital solutions, we will be able to boost our business in every country. Our business solutions, part-wise presented to you by Morten and Carsten, can be transformed and adapted very easily to every customer to every connected machine.

Higher number of car washes, especially due to subscriptions, will lead to higher turnover of consumables. Service will follow, and the replacement cycle of our car washer machines will shorten. And by the way of digitalization also helps a lot to do cross-selling or in our case, digitalization as the enabler to bundle all our offerings and become a real solution provider.

Now let's look closer to our three business lines: Equipment, Service and Consumables. As you are probably aware, we consider our revenues with Service and Consumables as recurring. From this chart, it becomes obvious. We improved our recurring revenues from 38% in 2021 to 44% in 2025, and we want to expand that higher profitable part of our business further to at least 50% in 2027.

One important driver to reach our targets here is, again, our efforts in the aforementioned field of digitalization. Currently, we are -- we, for example, roll out a new sales tool, our global scope configurator, which supports our sales reps in offering our full range of products and services.

Another important aspect of the global scope configurator is that starting at the sales point, all our following processes like order management, production, installation are streamlined as well. That means more efficient streamline processes and especially lower indirect costs.

But coming back to our revenues by business lines, it's not only our digital offerings. We have some nice products which had recently their initial launch like the new polish of Magic Care, which gives the cars a shine never seen before; or the sustainable packaging form [ CeminaBox ], which will reduce the transport cost of empty consumable packages by up to 50%. Furthermore, we are working on improving convenience of ordering of consumables. And you know, it's much easier to spend money if the next order is just one click away.

This slide now gives you a deeper insight into our cost structure and how we look at our business lines. On the left, our gross profit development is shown coming from 28.9% in 2020 to a respectable 30.9% in 2024 plus 2%. Given the fact that in this period, some bad external shocks like Corona, supply shortages and the Ukraine war took place, this is quite good.

To compare the profitability of the different business lines, we need to combine gross profit and selling expenses to, as we call it, contribution margin 3. This profitability ratio grew even higher by 2.4% to 18.2% in 2024.

As you can see from the cost composition chart for Equipment and Consumables, it is significant that there are selling costs. Whereas for Service, these costs are minor. If you have followed us over our latest communications, you know that we have set up several operational excellence programs for further growing profitability. Streamline our processes will need some invest and time at the beginning, but will, for sure, boost our profitability in the future.

Just mentioned some programs. First, installation costs and warranty. We have set up multiple small steps for significant reduction of our installation time and therefore, costs. For improving our warranty costs and the warranty costs are compared to our competitors already, as of today, not bad. We have set up a group-wide program to improve further following the complete product life cycle from R&D or production, logistics, installation to service.

Secondly, we work on optimization of our production footprint and the workflow across all production sites. Doing so, we will expand our capacities in Czech; whereas in Augsburg, we will focus on final assembly of our equipment. And we work intensively on our processes to identify and eliminate inefficiencies.

Just one example. At the beginning of this year, we had around about 700 different suppliers. And every supplier goes along with handling costs. We set a clear target to reduce the number of suppliers, also using our improving IT capabilities. This frees up for better supplier monitoring and development.

Coming now to the result of our efforts. As stated for the guidance, 2025, we also aim for an over-proportionate EBIT growth compared to revenue in the future. We expect to reach an EBIT margin in 2027 between 12% and 14%. The contribution of Europe remains higher than North America, and we expect for both segments, higher margins.

One of the key drivers of this profitability increase is that our share of recurring revenue from Service and Consumables will further increase. And you know, bringing our business lines in a profitability ranking that consumables are the most profitable, followed by our service, but also with equipment, we have a double-digit margin.

Now some words regarding our plans with respect to free cash flow. Over the last years, WashTec has always generated a high free cash flow. Measured in free cash flow ratio, meaning free cash flow divided by total revenues, we were able to achieve a ratio between 8% and 12%, excluding 2022. WashTec's Board will do its utmost to maintain a strong performance with this KPI.

Currently, we are doing some studies to optimize our stock keeping and push global terms and conditions for our customers and suppliers. This will have a positive effect on our trade working capital in the long run. For 2027, we expect on a cautious assumption a free cash flow between EUR 40 million to EUR 50 million and a high free cash flow ratio in the above-mentioned range, which we saw in the past.

As of today, we also do not see any significant changes in our CapEx policy, meaning that we expect that our annual CapEx for the next years will be in the range of EUR 10 million to EUR [ 50 ] million. Following our expectations on EBIT development over the next years and taking our CapEx planning into consideration, it is quite obvious that WashTec's management expects an increase of ROCE until '27. We see here a target value of above 28%, which is indicated in this chart.

On this page, we would like to touch shortly on some other financial KPIs, which we have under constant focus. As you see, we managed to reduce our C-to-C, cash-to-cash days since 2022 from 115 to now 108 days. This is the result of an ongoing optimization of our trade working capital. With all our projects and measures, for example, a reduction in the number of equipment variances supported by the global scope configurator, we expect to reduce this number further.

For the healthiness of our company, a solid balance sheet is key. We derive that from our equity ratio, which is continuously over 30%. But also our net financial debt was in the last 3 years between EUR 42 million and EUR 46 million. This results in an EBITDA leverage of 0.7 to 0.9. So a rock-solid solution -- situation.

But don't get me wrong. For a company like WashTec, I could also imagine a higher leverage of 1.5 or maybe even 2, resulting in a net financial debt over EUR 90 million. Also basic for our business model is that we do not invest heavily in fixed assets. Following this, our fixed asset ratio is and will be around 15%.

For information about the dividends, let's go further on to the next page. At least since I have been with WashTec, our statement referring to dividend payment has always been that we stand for a steady or slightly increasing dividend, and that is exactly what we did. For 2024, we paid a dividend of EUR 2.40 per share, that is 103% of our net income or 81% of full year's free cash flow. With that, WashTec has a dividend yield of 5.5%.

Also for the future, WashTec stands for high shareholder return. But does it always have to be only a dividend? Or can it be more a mix of dividends and share buyback. We are open to that, and you might remember that WashTec did some share buybacks in 2015 and before. As a result, we hold 4.25% of our own shares, which we could use, for example, for doing some M&A if there is a good opportunity.

Another point is that we want to improve the liquidity of our shares, investing more time and capital market communication like today or by attending conferences, as Kevin will show later.

Since I am with WashTec, we have implemented a wide range of financial and nonfinancial KPIs and metrics to improve the steering of our company. To give you a feeling how we track digitalization, these metrics could be of interest. I do not want to step in every detail here, just some highlights.

The most important metric in terms of business improvement via digitalization is that our machines are connected. And this figure is steadily improving, coming from 8,200 connected machines in 2020, we are end of 2024 already at 11,500 units.

Only with that broad fundament, can we offer digital products like EasyCarWash PRO and EasyCarWash For You, which Morten and Carsten presented. And we can do remote service. And in combining our data with different databases, we clearly can identify a lot of potential for our business. A simple and easy one is the sleeping customer ratio for Consumables and Services.

As of today, we only serve 70% of WashTec equipment by our own service technicians or in a reciprocal expression, 30% of WashTec's equipment is not serviced by us. We call these sleeping customers.

In terms of Consumables, the sleeping customer ratio is even higher at 70%. So a lot to gain for us. Combining these data, understanding better our customer behavior is a clear competitive advantage that we will further exploit.

So you see, there are really a lot of good things going on in WashTec. This will boost our top line as well as our profitability. With digitalization, our efficiency programs and our bundling efforts, which will lead to expanded concurring revenues, I am convinced that we will achieve our ambitious targets in the upcoming years.

With that, I will close the financial section and hand over to Michael to draw the conclusion of our webcast today.

Thank you, Andreas. Let me conclude by summarizing the key points of our presentation today and at the same time, looking to the future.

We have seen today, the markets are changing, customer behavior, technological requirements, sustainability, digitalization; all of this is changing. And we have not only recognized this change, we have embraced it. We act from a position of strength. With a leading global market position, a broad installed base and a strong team behind us, we are in an excellent position to actively shape this change, not reactively, but proactively.

We are developing WashTec into a solution provider. We no longer just offer machines, we offer solutions, complete solutions that intelligently combine machines, chemicals, software and service, solutions that are customized for our customers, modular, scalable, future-proof.

We use digitalization as a growth driver by bundling our offerings on digital platforms. We are creating new business models with a clear goal to significantly increase the proportion of recurring revenue. This means more predictability, greater customer proximity and more added value. We place profitability at the center of everything we do. Efficiency, availability, service, quality, all of this contributes to one goal, sustainable, profitable growth for our customers, for our partners and for us as a company.

And we increased the total shareholder return because in the end, it is also about increasing the value of our company through strategic clarity, operational excellence and consistent implementation.

Our conclusion, WashTec is on the right track. We have set the right course. We have a strong team, and we have a clear vision. Thank you for your attention and your trust. We are looking forward to your questions and to further discussion with you.

[Operator Instructions] And we have, again, Stefan Augustin from Warburg Research in the line.

Okay. So coming back to the earlier question, when you look at the possibilities of the rollout of the digital solutions and bundling connected to it, how much, if you would assume currently something like zero growth in the equipment business very much down in the long term? How long could you grow? And how much let's say, market share in Consumables and service, do you think, is possibly to be captured with that strategy?

Yes. Maybe I'll take that one question. Thank you for addressing it. Yes, there's a little bit of challenge in answering that question.

First of all, digitalization is a building block that will help us to increase the share of recurring revenue from currently 40% to 50%. It's a little bit challenging to give you precise numbers about the quantities. The challenge is that -- yes, yes, of course.

So some of the solutions are in the pilot phase or in the process of setting up these services. And of course, the goal is to reach the share of 50% and 50%. But you are totally right, higher utilization of our equipment, which comes with subscription models, this is what we see in the Nordics, but also in the U.S.

And then [ increases ] the demand for new sites. I mentioned before that we see in Europe a kind of stagnation in terms of opening new sites. It is -- we expect this increase in sites, but it's really challenging to say when we will see it because some customers have equipment, who are maybe 3 or 4 years old. So there's a lot of free utilization.

So it's quite challenging you to see that next year, we see this percentage in 2 years, this percentage. We see one but we can't provide you with the exact figures when it will be, how much. Hopefully, I could answer your question.

Partially. For example, if we look at the 30% third-party service providers to your equipment, if you roll out the let's say, all the digital processes, how much of those do you think could you capture? Is that possibly to bring the percentage up, for example, to 85 or even 90 or how would you think about that?

And the same is then with the, let's say, the third-party share of the consumables or the chemicals. How much do you think you can increase the penetration of using the own wash chemicals in your equipment?

So in terms of service, as you said, one of the reasons why customers decide not to ask for our service is because very often with these customers, the business case is not solid. They are not selling enough washes to, let's say, afford a service contract with us, for example. And of course, with our digital solutions and other possibilities that Andreas mentioned, we will increase the profitability of our customers, and then they can afford our service.

Therefore, I assume that we can increase the share, of course, not to 100% because there will still be customers, let's say, car dealers; which make hidden or internal washes. So their goal is not to increase the amount of washers and maybe they have -- don't have the high motivation to go and change something in service.

When it comes to consumables, there's even more to win because, as Andreas mentioned, the sleeping customers in that field are even higher. And also here, we see a bigger uplift to convince more of these customers because maybe we did not really mention it in detail.

One of the reason why we asked for such a strong bundling, especially with chemicals but also the service, is because just imagine, you have a subscription for a carwash site and you paid it already in advance. That means if you come and you would like to wash your car, and the system or the unit is broken and it's closed and is shut down.

And in case we come here with our service, but someone else is providing the chemicals, then very often, we need to wait for the company XYZ, yes, because our technician maybe is not trained and familiar with that chemicals, and that is causing big delays. And in combination with digital solutions like subscription models, it's just not working and it's just not convenient, yes.

That's one of the reasons why we asked for this strong bundling. And this will also help us not only to win new customers and decrease the number of sleeping customers in the chemicals, but also secure existing ones. The chemical business, as of today, is quite competitive. That means whenever you win a customer, you don't have a guarantee that he or she will stay long term.

In equipment, it is different because when you buy an equipment, you are more or less locked in for a couple of years. But chemicals, you can change, I would say, very fast and very easy. So in a nutshell, we also see an increase and -- but I can't give you a precise number, especially...

We don't want to give numbers here. We have clear picture from the Nordics as well as from the U.S. market. [ Subscription ] is very, very common, so we can transform this, and we have done this. But we are -- we want to see how we proceed here before we give facts and figures. So currently, we are not handing over this information.

Maybe I can add here. So the idea was to get this figure to create the idea what is in for us. And to give you and to convince you that we are really improved, we are on the way become a solution provider. And that are not only revenue and EBIT, there are also some other KPIs and metrics which we track on a regular way. But it's also the case that not everything which we have as of today, we have already for the year 2027.

You mentioned -- Andreas mentioned what we want to achieve in the EBIT margin as well as in revenue, this is something we take into consideration into that number for sure.

Yes. On the -- actually, on the EBIT margin, two questions left here. The EBIT margin, which one is, let's say -- you mentioned key's definitely the bundling and also the consumables increase. I assume that all the other factors, you continue to sell a certain volume of equipment.

You progress with your cost initiatives and indeed, the service business growth also contribute to that. But is there -- let's say, is this whole -- is this target dependent on the success of the business in the U.S.? Or is it more or less not so much dependent on that just on the EBIT margin?

Thank you for that question. So generally, it is the case that with the bundling, which we want to do in North America as well as in Europe, we will increase the EBIT margin in every segment. But I guess it's also very realistic that also in the near future, let's say, the next 3 years, the EBIT margin in the U.S. will always be lower than it is in Europe.

The cost programs, which we have started for example, moving some workloads from Augsburg to Czech or being the final assembly production line in Augsburg, that is more something -- which is more a European base.

Nevertheless, the other things like reducing the installation costs, it is not only in Europe, but it is also North America. We are coming up with, what shall I say, more structured that doesn't give the real feeling. But we are working with a lot of details to reduce our installation time and therefore, then the installation cost. And that is applicable for both regions, for North America as well as Europe.

And in Consumables, we did also deep analyses, where we can increase our margin due to the fact of where we lose cost in Europe in relation to U.S. and we have also the people how we can do it better in the future. But as Andreas mentioned, we have specific programs to Europe.

And bottom line, we are in U.S., also focused on bottom line. But on the equipment side, there we have to also to take into consideration the top line unless we do the specific topics that will increase the value for our customers in the U.S. in the near future.

The last one is actually a small detail that you might want to share it. You mentioned that you have the rollouts, the pilots and then what you addressed. Is there a considerable decline rate, let's say, operators that simply don't want to go on the model?

And maybe I'll take that one. You're referring to subscription or tools like CarWash Assist?

About the total product spectrum.

So that means there is a small part of the market, let's say, car dealers who do these internal carwashes. And these are customers, maybe they are not that open to that Smart services. To be honest, we didn't trust them for that target group. But for these customers, we have our SoftCare SE, which is a solid basic product.

But overall, I haven't seen a big tendency of customers that declined, especially the big ones are very, very open to their solutions because we are addressing their main challenges as Michael mentioned, staff shortage and growth in wash counts.

Was this the answer to your question? Because I thought -- because we track also the -- in Salesforce all customer topics. So if they agree, how they agree if so deny and so on. So everything is tracked in our database.

If you want to share.

No. There could be too many competitors here also in this group.

And next up is Nicole Winkler from Berenberg.

Thank you for the first capital markets I have attended so far. So basically, most of my questions were covered, especially regarding the margin. But I'm still trying to wrap around my head around the shareholder return point, especially when looking at the dividend policy of the recent years.

So you have shown that in recent years, you have paid dividends that well exceeded your earnings. And now looking at your M&A ambitions and also might increasing your leverage, there's a question. Have you kind of distributed too much in recent years to now be able to finance your future growth? Or let's say it other way around with regard to your future M&A ambitions, will you adjust the dividend policy accordingly?

Okay. Thank you for the question. I think it's correct that the higher of the dividend in the past was always close to 100% or a little bit above the net income. WashTec stands for a high dividend, WashTec stands for a high payback to our shareholders and I guess, also in the future. So I made the statement. It's not sure how we are doing the payback to our shareholders, but we have it clear in the focus.

On the other side, it is important that we have the strength in our own hands that we can do every invest, every CapEx or maybe every M&A transaction, if there is a target with a reasonable target that we can do it. And therefore, I did some analysis or you all little bit probably. If I look at our balance sheet, I think there is enough headroom that we can do this. I guess, that's the statement here.

There are no further questions.

Thank you. Then as operator proceeds in and Kevin, the end or the closing.

So now we've almost reached the end of today's event. Before we say goodbye, we would like to give you a brief outlook on what's next, especially during the following months of 2025. We have planned multiple events into the interact of our investors.

As previously mentioned, this was the first Capital Markets webcast ever, and we're planning to host one or maybe even two more webcast this year and further ones during 2026. While today's webcast should give you a big-picture overview, the following ones will be deep dives into certain areas.

Also, please be aware that Andreas Pabst and myself will be attending the Berenberg & Goldman Sachs German Corporate Conference in September. And then both Michael and Andreas will attend the German Equity Forum in November.

We're looking forward to meeting you during the one-on-one meetings. Of course, today's presentation and a recording will be made available on our Investor Relations website somewhere next week.

And now we've really reached the end. We hope this event helped you to better understand the strategic direction of WashTec, and we are looking forward to your feedback. Thank you for your interest, and see you soon.