WashTec : Annual financial report 2023

The EBIT margin increased to 11.3% in the fourth quarter

EBIT

EBIT margin

EBT

Net income

Number of shares in circulation

Earnings per share

Revenue down in fourth quarter

Revenue of €132.8m was 7.6% down on the record prior-year

quarter (€143.7m).

EBIT at high prior-year level with higher EBIT margin

Despite the lower revenue, the EBIT of €15.0m was on the

same high level as in the prior year (€15.4m). The EBIT margin

increased to 11.3% (prior year: 10.7%). The implemented cost

increases and active cost management contributed to this positive

outcome.

WashTec

WashTec // Portfolio

Full service all around sustainable carwash

Services

Wash tunnelsWater recycling

Gantry car washWash chemicals

Self-service

Report of the Management Board

Dear Shareholders, Ladies and Gentlemen,

For WashTec, as for many other companies, the past reporting period once again presented a wide variety of challenges. Persistently high inflation and the resulting key interest rate hikes, coupled with a generally high level of economic uncertainty, significantly slowed consumption and investment. Tensions with China, the ongoing war in Ukraine and the Middle East conflict also had a noticeable impact on economic development. The German economy has cooled significantly since the end of last year. Contrary to expectations last summer, a recovery failed to materialize in the second half of the year. This ongoing crisis mode has led to increased general economic uncertainty and also made our customers cautious about investing.

WashTec responded to these successive crises in the fiscal year, among other things by adjusting its strategy. In the summer, together with the Supervisory Board, we defined and confirmed the following priorities for the years ahead:

Total customer care: We continue to focus on maximum customer benefit in everything we do. Based on our portfolio of superior equipment and biodegradable wash chemicals and on our advanced digital platform, we offer carwash operators and consumers the most profitable and most sustainable carwash. With the coordinated, integrated system of car-wash equipment, water treatment and chemicals, we enable our customers to achieve the best possible wash results. We see the integration of our entire product and service port-folio - equipment, service and chemicals, embedded in digital solutions - as a source of major growth potential.

In regional terms, we will primarily focus on our core regions of Europe and North America in order to better exploit the market potential available there.

Following the changes on the Supervisory Board and the Management Board in the new fiscal year, the implementation of this strategic direction will be accelerated in 2024.

In connection with the regional focus on our defined core markets, we sold the majority of our Chinese subsidiary to the existing management at the end of 2023. The Chinese market will continue to be developed as a distributor market.

Our focus in the ongoing expansion of our digital capabilities is on systematically implement-ing additional customer benefits. To this end, WashTec entered into a cooperation on in-car payment with Ryd Wash in January 2024. In February 2024, we announced a strategic part-nership with Superoperator. This partnership will embed the most advanced digital subscrip-tion solution for consumers into our digital service portfolio.

These realignments will lead to a strengthening of our profitable business growth. The Service and Chemicals business lines will have above-average growth and will benefit from digitaliza-tion.

The WashTec Group achieved a new revenue record of €489.5m in fiscal year 2023, an in-crease of€7.3m or 1.5% on the prior year (€482.2m). At constant exchange rates, the growth in revenue was 3.4%.

The revenue growth compared to the prior year was mainly due to a larger contribution from the aftersales business with service and chemicals. Revenue with our chemical products espe-cially developed very positively due to the acquisition of new customers, increasing by 15.6% year on year.

Due to an improvement in gross profit, EBIT rose by 10.3% to €41.9m (prior year: €38.0m). The EBIT margin was 8.6% (prior year: 7.9%). We have therefore delivered, and met our guidance for 2023.

In Europe, the equipment business was mainly affected by the general economic uncertainty and by changes in strategic orientation at major customers - such as Total Energies selling all of its service stations in Germany and the Netherlands to Couche-Tard. Renewal of the prod-uct portfolio involves start-up and ramp-up costs. Measures such as training for our service employees and design-to-cost issues were addressed in the fourth quarter and are having an impact in the new fiscal year. The good service business and, above all, the very good chemi-cals business helped to compensate for these issues. In total, EBIT in Europe remained at the prior year's level of €36.2m.

Orders received were lower in the reporting year than in the prior year due to the drop in demand in the market as a whole. The lower level of orders received meant that the order backlog at the end of December 2023 was down on the prior year, but it is still high overall compared to the long-term average and secures capacity utilization for the first few months of the new fiscal year.

Revenue in North America was maintained at the same level in US dollars as in the prior year. The WashTec Group's business in this region was also adversely affected by the generally sub-dued demand. Earnings in North America increased significantly by €4.3m to €5.7m. This is mainly due to the efficiency improvement projects launched and successfully implemented in fiscal year 2023, particularly in the areas of supply chain and service.

Despite the uncertain overall economic situation described above, we achieved our targets in 2023 and met our guidance in all respects. With the more sharply focused strategy and accel-erated execution, we have laid the basis for further profitable growth.

We will be helped here not only by the collaborations with digital service partners described above, but also by the high level of research and development expenditure maintained in fis-cal year 2023. The focus of this R&D was on developing additional features and functions for the new gantry carwash platform. The new competition-beating digital gantry carwash offers outstanding washing and drying performance at maximum process speed. At the same time,we are continuously reducing the ecological footprint. We have made further improvements here through a better understanding of the biological and chemical interrelationships in water treatment, further reducing the amount of fresh water needed and thus helping to address the water shortages caused by climate change in many regions. Another focus was the successful introduction of a modular system for the new JetWash generation, which ensures fast assem-bly and easy commissioning at customers' sites. As of December 31, 2023, around 70 people were employed in research and development. This represents 4.1% of the workforce and illustrates the importance of innovation to our future success.

Focusing on the entire integrated system of equipment, water treatment and biodegradable chemicals places an increased emphasis on sustainability. Consumers want to wash their cars in the most environmentally friendly way possible, and our own customers - the operators of carwash equipment - are also increasingly concerned about sustainable and cost-effective use of resources. We address this need. With our automated carwashes, water treatment and Green Car Care chemicals, we provide customers with the products they require for this pur-pose. It is our corporate responsibility to continuously improve and further develop the sus-tainability aspects of our business model.

Sustainability is also an integral part of our business processes. This is very important to us. We therefore continued our extensive reporting in fiscal year 2023, compiling our second voluntary Sustainability Report, the WashTec Sustainability Policy and the WashTec Group Environmental Policy. These documents can be viewed at any time on the Company website athttps://ir.washtec.de/en/sustainability/. They provide information on our activities and goals in the areas of economic, environmental and social sustainability.

None of this would have been possible without our employees and their tireless commitment to WashTec. In challenging times like these, it is all the more important that we at WashTec pull together and demonstrate on a daily basis that drive and solidarity are core elements of our corporate culture. On behalf of my colleagues on the Management Board and myself,

I would like to thank all our employees for their dedication and hard work in 2023.

Dear Shareholders,

Fiscal 2023 was not an easy year. Nevertheless, we have steered our company well through these challenging times and worked intensively on our future direction. By adjusting our strat-egy, we have laid the groundwork for our company to return to a double-digit EBIT margin in the coming years, and our consistent focus on maximizing customer benefit will lead to increasing earnings contributions. We are sure that we have taken the action needed.

Thank you very much for your trust and loyalty.

Andreas Pabst

CFO/Member of the Management Board

Members of the Management Board

Sebastian Kutz (*1979)

CSO/Member of the Management Board

Global Sales and Service, Key Account Management, Marketing, Business Units/Product Management, Service Support, WashTec Carwash Manage-ment GmbH

Interim (from February 22, 2024): R&D, Quality, AUWA-Chemie GmbH

Sebastian Kutz holds a degree in business administration. After holding various positions in national and international sales and marketing at RATIONAL AG until 2019, he was most recently Executive Vice President Sales and Service DACH at WashTec. Sebastian Kutz has been Member of the Management Board of WashTec AG since March 2023.

Andreas Pabst (*1973)

CFO/Member of the Management Board

Finance/Controlling, IT, Procurement, Investor Relations, Legal and Com-pliance, Risk Management, Internal Audit, Insurance, WashTec Financial Services GmbH

Interim (from February 22, 2024): Corporate Culture, Communication and Philosophy, HR, Supply Chain, Sustainability

Andreas Pabst holds a business degree and is a qualified tax adviser (Steuerberater). After beginning his professional career at KPMG and various positions in accounting at listed companies, he moved to KUKA. There, he held various commercial positions of increasing responsibility and was Group CFO from 2018 to 2021. Mr. Pabst most recently worked for Midea. Andreas Pabst has been Member of the Manage-ment Board of WashTec AG since October 2022.

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WashTec AG published this content on 27 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 March 2024 06:06:07 UTC.