WashTec’s SmartCare Connect and Czech Footprint Optimize Amid Flat H1 Margins
Record H1 revenue driven by equipment, but efficiency-program delays and installation-cost headwinds keep EBIT flat; guidance confirmed on order backlog strength.
WSU.DE · Earnings Call · 2026-08-04
A record top line, a flat bottom line
WashTec reported a record first half in 2026, with revenue up 6.6% to EUR 248 million, driven mainly by equipment sales, particularly in North America. Yet EBIT came in essentially flat at EUR 17.7 million, pulling the margin down to 7.1% from 7.6%. The management team was candid about the gap between top-line momentum and underlying profitability. “Given the higher sales, this results in a lower EBIT margin of 7.1% compared to 7.6% in the prior year. Here, we are not satisfied with the result, but we took some measures to improve.” — Andreas Pabst, Chief Financial Officer · 2026-08-04 The second quarter was clearly better: revenue up 10.4% and EBIT up 9.4%, with margin essentially flat at 10.2%. Free cash flow also improved 90% year-over-year to EUR 6.7 million, thanks to higher net income and a tax reimbursement.SmartCare Connect: the new engine, but installation costs bite
The central strategic push remains SmartCare Connect, WashTec's new digital rollover platform. The adoption is impressive: in Q2 2026, SmartCare Connect accounted for 54% of rollover revenue, and the company celebrated its 1,500th machine produced. The CFO, Andreas Pabst, described the rollout as a “completely new digital operating service and operator experience.” — Andreas Pabst, Chief Financial Officer · 2026-08-04 Yet the launch has not been free of friction. “Sure, at the beginning, we had some quality topics, which we now have under control. Also, the installation costs gave us some headache.” — Andreas Pabst, Chief Financial Officer · 2026-08-04 Management has implemented an installation task force, which has stopped the quarter-over-quarter cost creep, but the absolute level remains above target. Installation costs are a key reason why the efficiency program benefits have lagged.Production footprint: Nyrany and the EUR 3M prize
The other major lever is the optimization of the production footprint, centered on the new site in Nyrany, Czech Republic. The company is shifting 85 workplaces from Augsburg to the Czech site, which should yield annual savings of EUR 30,000 to EUR 35,000 per workplace, or roughly EUR 3 million in total. Pabst was explicit about the scale of the effort: “You see WashTec is doing here a real big thing.” — Andreas Pabst, Chief Financial Officer · 2026-08-04 But the project has not been perfectly on plan. The CFO had warned earlier in May that installation costs were behind schedule, saying “We are currently really a little bit behind... we need to create other solutions to come back here.” — Andreas Pabst, Chief Financial Officer · 2026-05-05 Additionally, IT costs related to SAP S/4HANA have been a recurring drag; in Q3 2025 they were already estimated at “between EUR 0.5 million and EUR 1 million together with the other programs.” — Andreas Pabst, CFO · 2025-11-05 In H1 2026, special items from delayed efficiency projects amount to a low single-digit million euro figure, around EUR 2-3 million. The CFO acknowledged that some milestones are fully on track while others are slightly behind, but insisted the benefits will materialize in 2027.North America and order backlog: the path to guidance
North America was the standout region, with revenue up 18.1% in H1 and 23.4% in Q2, driven by strong equipment sales to key accounts. The segment swung from a EUR 1.5 million loss to a EUR 0.8 million profit, and the EBIT margin improved by 700 basis points to 2.2% — still well below Europe, but the mid-term target is 8-9%. The order backlog remains a source of confidence, now 9% above 2022 levels and up 13% from the end of 2025, although Europe's backlog is slightly down. Despite the flat H1 EBIT, management confirmed its full-year guidance for revenue growth in the mid-single-digit range and disproportionate EBIT growth.The company also noted that it increased safety stock by EUR 3-5 million due to geopolitical uncertainties, a reminder that the broader environment remains unsettled. The confirmation of guidance, combined with the SmartCare Connect momentum and the eventual payoff from the Czech Republic footprint, gives investors a clear—if not immediate—path to margin expansion. Order backlog strength underpins the top line, while installation costs will determine when the bottom line catches up.Why we believe in the guidance is there's multiple reasons. One reason is we really have a strong order backlog. We are seeing that our products are very well received in the market.