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Introduction & Market Context
WashTec AG (ETR:WSU) presented its Q1 2025 financial results on May 6, 2025, reporting revenue growth of 7.9% year-over-year, while operating profit slightly declined. The car wash equipment manufacturer’s stock reacted negatively to the news, falling 1.59% to €44.00.
The company acknowledged challenging macroeconomic conditions, particularly in Germany, which it described as an "economic laggard" according to IMF forecasts. Despite these headwinds, WashTec maintains that several factors could positively impact its business, including interest rate reductions in the USA and EU that may lower financing costs for equipment orders, and Germany’s "turbo depreciation" policy offering 30% declining-balance depreciation in 2025-27 as an incentive for new equipment purchases.
Quarterly Performance Highlights
WashTec reported Q1 2025 revenue of €108.8 million, up 7.9% from €100.8 million in Q1 2024. However, EBIT (earnings before interest and taxes) slightly decreased by 3.9% to €4.9 million, compared to €5.1 million in the same period last year. Consequently, the EBIT margin contracted from 5.1% to 4.5%.
Free cash flow showed significant improvement, increasing by 77.4% to €16.5 million from €9.3 million in Q1 2024.
As shown in the following chart of WashTec’s Q1 revenue and EBIT performance:
Net income decreased slightly to €2.9 million in Q1 2025 from €3.1 million in Q1 2024, with earnings per share declining to €0.22 from €0.23. The company’s net operating working capital (NOWC) improved to €81.6 million from €89.9 million a year earlier.
WashTec’s EBIT development reveals several factors affecting profitability, with revenue growth contributing positively (+€2.3 million) but offset by increased costs across selling (-€1.8 million), marketing (-€0.3 million), R&D (-€0.2 million), and administration (-€0.7 million):
Segment and Regional Analysis
WashTec’s business segments showed varied performance in Q1 2025. While Equipment revenue grew modestly by 0.8% to €49.3 million, Service increased by 10.7% to €39.4 million, and Consumables delivered the strongest growth at 25.5% to €18.7 million.
The segment breakdown illustrates the growing importance of Service and Consumables to WashTec’s revenue mix:
Regionally, WashTec experienced significant disparities in performance. The European segment delivered strong results with revenue increasing 12.6% to €95.3 million and EBIT growing 10.5% to €6.3 million. In contrast, North America struggled with a 15.9% revenue decline to €14.3 million and a widening EBIT loss of €1.4 million, representing a 180% deterioration from the €0.5 million loss in Q1 2024.
The following chart illustrates the regional performance disparities:
To address challenges in North America, WashTec reported investing approximately $1 million in new manufacturing equipment during Q1 2025. This investment aims to localize car wash frame production and insource approximately $3 million in local sheet metal purchases, potentially improving the region’s cost structure and competitiveness.
Strategic Initiatives and Organizational Changes
WashTec announced the completion of its organizational restructuring with several key leadership appointments. The new global matrix organization includes recent additions to the executive team: Eric Ferreira da Silva as Head of Global Service, Tobias Arnold as Head of Human Resources, and Dirk Webert as Head of R&D. Additionally, several internal promotions were made, including Jörg Mielke as Head of Global Operations, Georg Wimmer as Head of BL Equipment, and Jürgen Ankner as Head of BL Consumables.
The company’s updated organizational structure is illustrated below:
WashTec also highlighted strategic initiatives focused on expanding competitiveness through lean processes and optimizing production locations. This includes efficiency improvements in high-gloss finishing at its Augsburg site and establishing a pre-assembly hub in Nýřany with expanded logistics capabilities.
For the U.S. market specifically, WashTec is implementing a new team structure and changing leadership in its Consumables business line. The company is developing unique selling propositions focused on consumables, short tunnels, and digitalization for the North American market.
Forward-Looking Statements and Guidance
WashTec reported a positive trend in order backlog, which grew by 14.0% during Q1 2025 and is up 8.0% compared to Q1 2024. This suggests potential for continued revenue growth in upcoming quarters.
The order backlog development is shown in the following chart:
For the full year 2025, WashTec provided optimistic guidance, projecting a mid-single-digit percentage increase in revenue compared to 2024’s €476.9 million. The company expects EBIT to grow at a faster rate than revenue, forecasting high single-digit to low double-digit percentage growth from 2024’s €45.5 million. Free cash flow is projected between €35-45 million, compared to €39.5 million in 2024.
The complete 2025 guidance is detailed below:
WashTec also plans to launch new products in May 2025, including a new rollover machine and digital products, which could contribute to future growth. The company emphasized its enthusiasm for these new offerings, describing them as "the future of car washing. One platform. All possibilities."
Despite the slight profit decline in Q1 and ongoing challenges in North America, WashTec’s growing order backlog and positive guidance suggest management remains confident in the company’s ability to navigate the current economic environment and deliver improved results throughout 2025.
Full presentation:
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