WashTec (ETR:WSU) outlined a North America strategy aimed at improving growth and profitability at its Mark VII business, saying the region remains its largest single market but has underperformed management’s expectations in recent years.
During a Capital Markets Webcast focused on North America, Chief Executive Officer Michael Drolshagen said the U.S. is “the largest and most dynamic car wash market in the world” and a key region for WashTec and Mark VII. However, he said WashTec had previously viewed the market too much through a European lens and had not sufficiently adapted to the different customer needs, operating models and economic drivers in North America.
WashTec Targets More Recurring Revenue in North America
Drolshagen said the company’s North American business has been more equipment-driven than its European operations, where service and consumables account for larger shares of revenue. He identified service and consumables as higher-margin, stable and recurring revenue sources that are central to the company’s plan for sustainable profitability.
The company’s North American strategy will focus on service, digitalization, consumables and sustainable “green” solutions, as well as better targeting of customer segments that WashTec said it has not actively addressed. Drolshagen described service as the “backbone” of the business, saying it protects the installed base, supports customer loyalty and helps defend market share.
He also said digitalization and data are expected to improve equipment availability and customer control, while consumables, particularly chemicals, represent a profitable recurring revenue opportunity and a core part of WashTec’s one-stop-shop approach.
Mark VII Sees a $3.3 Billion Addressable Market by 2030
Uwe Scharfy, CEO and President of Mark VII, said the U.S. car wash market is supported by 288 million registered light vehicles, rising mileage and average car wash frequency of 12 to 13 washes per vehicle each year. He said U.S. consumer spending on car washing totals about $16 billion to $18 billion annually.
Scharfy said the market directly served by Mark VII — equipment, service and consumables in the U.S. and Canada — is estimated at $2.3 billion in 2025 and is expected to grow to $3.3 billion by 2030, implying a compound annual growth rate of around 7%. He said equipment and consumables are similar in size, at roughly $0.9 billion and $0.8 billion, respectively, while service adds about 30% on top of equipment revenue.
Mark VII, which has been part of WashTec since 2006, has about 5,500 car washes operating across North America, roughly 275 employees in the region and approximately 130 service staff, supported by local partner technicians, Scharfy said. The business is headquartered in Arvada, Colorado, with an additional facility in Burlington, Ontario.
Five Strategic Pillars Through 2030
Scharfy said Mark VII’s strategy through 2030 rests on five pillars:
- Geographical expansion: focusing direct sales, service and chemical channels in high-volume states.
- Service excellence: improving uptime through technician training, remote monitoring and data- and AI-driven service.
- True Green leadership: expanding sustainable chemical solutions that reduce water and chemical use for customers.
- Digital and intelligence: bringing WashTec’s Car Wash Assistant to North America and expanding the mymarkvii.net customer interface.
- Portfolio completion: modernizing in-bay automatic systems, insourcing selected components, launching innovations and evaluating entry into a new product segment.
On geography, Scharfy said Mark VII plans to expand direct coverage in the highest-volume markets. He said direct equipment coverage is expected to grow from about 180 million people today to roughly 270 million, while direct consumables coverage is expected to expand from about 55 million people to 190 million.
On service, Scharfy said Mark VII currently resolves 65% of issues remotely from Colorado for key account customers and plans to extend that capability to all North American customers. He said a new training excellence center will support onboarding of service technicians and training for customers and distributors.
“In this industry, uptime is everything,” Scharfy said. “Every hour a wash is down, our customers lose revenue.”
Financial Goals Include Up to 50% Revenue Growth
Chief Financial Officer Andreas Pabst said WashTec is targeting an increase of up to 50% in North American revenue by 2030 and aims to approach a double-digit EBIT margin in the region. He said the strategy is expected to require low single-digit million euros of capital expenditure annually in North America.
Pabst said Mark VII has historically been “somehow a EUR 90 million company,” with recent years affected by key-account contract effects and market trends. He said WashTec expects a double-digit compound annual growth rate over the next two years, supported by geographical expansion and service investments, followed by a mid-single-digit CAGR over the medium term.
The company also expects recurring revenue from service and consumables to rise to 40% to 50% of North American revenue by 2030, Pabst said. He added that management has prepared detailed business plans for each strategic initiative and is seeking “overproportional growth in EBIT” for each move.
Management Addresses CapEx, Consolidation and Order Momentum
During the Q&A session, Drolshagen said WashTec does not expect “really a high CapEx spend” in any year, describing the planned investment level as a low single-digit million-euro amount annually and “overall, not really big money.”
Asked about industry consolidation, Drolshagen said WashTec’s first step is to gain market share in specific segments, but that the company would consider consolidation opportunities if they arise. He later said the market was consolidated especially between 2020 and 2024 and that management does not expect “huge consolidation” in the next two to three years, though some smaller competitors may disappear.
Scharfy said order intake in the U.S. has shown “very good positive momentum” this year and was above target. He said order intake picked up at the end of last year after some customers held back in 2023 and 2024, and he expects a “major uptick” in 2026 across tunnel and in-bay automatic segments.
On chemicals, Scharfy said Mark VII currently uses private-label solutions but could consider its own production if volumes grow enough to justify the investment. He said some larger competitors have their own chemical production, while smaller players generally use white-label arrangements.
Regarding supply chain localization, Drolshagen said only 13% of Mark VII’s North American purchasing volume comes from Europe, and WashTec is working to make procurement and supply chain operations even more local.
About WashTec (ETR:WSU)
WashTec AG provides solutions for car wash in Germany, Europe, North America, and the Asia Pacific. The company offers gantry carwashes, self-service, and commercial vehicle wash equipment, as well as conveyor tunnel systems. It also provides water recovery systems; full maintenance; on-call service agreements; service projects and upgrades; spare parts; and digital solutions. In addition, the company offers car wash management services; and financial services, such as financing and leasing solutions.
