Annual Report 2012 Continuity and Change

Annual report 2012

Continuity and Change Unaudited translation for convenience purposes only WashTec – »Hidden Champion« Mission Statement

Sustainable revenues We off er our customers the best products, processes and through largest installed base with services, which allow them to operate a successful car wash high barriers business. As a market and innovation leader with the best return of entry and High proﬁtability excellent customer Innovative, on investment, we aim to provide the best off ering in all market and cash ﬂows; relationship competitive and Strong focus on complete product segments. Fast and effi cient processes, entrepreneurial employees shareholder value portfolio for and a sound capital structure help us to achieve this goal. creation carwash operations

Proven track record Operates globally of efficiency focus; with strong regional leverage of global own footprint production and through direct sourcing sales and service

Growth potential Strong and long-term based on increasing know how of > 40 years acceptance of carwash expertise automatic car wash Strong competence in sustainability and environmentally friendly products Group Level KPIs

in €m 2012 20114) 2010 2009 2008 Revenues 301.5 293.3 268.4 256.3 285.1 Domestic 100.9 102.9 97.4 97.8 100.9 Abroad 200.6 190.4 171.0 158.5 184.2 EBITDA 29.2 19.2 29.9 22.2 37.1 EBIT 19.2 –10.4 20.3 13.1 29.4 EBT 16.5 –11.9 18.6 10.5 26.4 Net income 10.1 –14.6 10.8 5.8 15.3 Earnings per share €1) 0.72 –1.04 0.77 0.41 1.03 Net cash ﬂ ow 23.1 17.2 29.1 20.7 33.0 Investments (excl. ﬁ nance lease) 5.2 8.0 7.5 5.4 9.8 Balance sheet total 183.6 195.0 217.1 199.9 202.8 Equity 84.4 75.3 94.4 85.6 79.1 Employees2) 1.650 1.660 1.596 1.553 1.562 ROCE3) (in %) 17.0 16.3 19.9 11.8 22.9

1) Weighted average number of outstanding shares: Dec 31, 2008: 14.9m, since Dec 31, 2009: 14.0m 2) Year average 3) “Return On Capital Employed” = adjusted EBIT/ (total assets – current liabilities – cash and cash equivalents); based on equal divdend payments 4) Comparative ﬁ gures adjusted pursuant to IAS 8, see Note 7 of the Consolidated Notes Revenues, earnings, cash ﬂ ow, employees

Revenues in €m Earnings before taxes in €m Net cash flow in €m Average number of employees by year

33.0 301.5 293.3 29.1 1,660 1,650 285.1 1,562 1,596 268.4 1,553 256.3 26.4 23.1 20.7 18.6 16.5 17.2

10.5

2011 2008 2009 2010 2011 2012 2008 2009 2010 2012 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012

–11.9 Continuity and Change

“We cannot solve our problems with the same thinking we used Progress made in the United States when we created them.” Time for change – during the last year, this mantra also applied to our Albert Einstein subsidiary in the United States. After a comprehensive restructuring and cost-cutting program, the company will be able to more professionally WashTec is not standing still; ahead of us lies a future full of challenges and effi ciently work the market there, which appears to be slowly re- and great opportunity. We have the courage to think diff erently, to covering. The most recently completed fi scal year has already provided think “outside the box”. Nevertheless, in the midst of all the changes us with some validation: it was indeed the right decision to energeti- and new decisions, certain things remain constant, even after all the cally intervene here – the results have already improved signifi cantly changes in 2012: our stringent customer focus, our high-performance over the last year, and the discussion about a possible sale is no longer and innovative products, and our excellent service which is available on the table. worldwide. To us, this represents the perfect balance between continuity and change. Celebrating 50 years of the friction car wash – a success story “Made in Augsburg” New management Our trade fair exhibit at the automechanika 2012 was very much in the We also recognized the need for change and new stimulus at the spirit of the anniversary spotlight, “Celebrating 50 years of the friction executive level of our Company. By reconstituting the management car wash”. By presenting numerous new products from our 2012 inno- board, we have made sure that the strategic development at WashTec vation campaign, we were able to demonstrate why it is no coincidence will be advanced quickly. Continuity in times of change has been pro- that WashTec is the industry’s market leader. Using our own historical vided by Michael Busch, who this past summer temporarily left his post exhibits, we showed the transformation over the years and the contrast as a member of the supervisory board and assumed management board between then and now. Our trade fair exhibit revealed: WashTec is con- responsibility. Since the start of 2013, two new management board stantly reinventing itself and its products – for the benefi t of both our members are working at and for WashTec, having now completely immediate customers and the end customers. taken the baton from Michael Busch. The Group Management Report WashTec AG and the Group

Letter from the Management Board 4 Business performance and background 39

Continuity and Change 6 Results of operation, net assets

automechnika 2012 18 and ﬁ nancial position 58

Report of the Supervisory Board 20 Additional performance indicators 72

Sustainability Report 26 Supplementary report 74

WashTec Share 32 Legal Information 74

Opportunities and risk report 77

Outlook 84 Consolidated Financial Further Information Statements of WashTec

Consolidated Income Statement 90 Auditor’s Report 140

Statement of Comprehensive Income 91 Financial Statements of WashTec AG

Consolidated Balance Sheet 92 (HGB Short Version) 142

Consolidated Cash Flow Statement 94 WashTec Worldwide 144

Statement of Changes in Consolidated Equity 95

Notes to the Consolidated Financial

Statements of WashTec AG 96

Responsibility Statement 138 Letter from the Management Board

Dear Shareholders, WashTec is a solidly positioned company, which in the past few years WashTec is solidly Ladies and Gentlemen, has fallen behind in its potential to innovate expeditiously. During the positioned course of this year, we will work with the excellent WashTec team and 2012 was an eventful and successful year for WashTec AG. the supervisory board to devise a progressive strategy to fully exploit It was an eventful year because the changes on the management board the Company’s potential in the coming years. were initiated in the summer in an eff ort to smooth the path for The foundation of any strategy must be a correct understanding of the WashTec to reach an even better position in a highly competitive fi eld. business models of our customers. If we are able with our equipment It was also an eventful year because we celebrated the 50th anniversary and services to develop automated car washing into an even more at- of the invention of the friction car wash at the 40th automechanika tractive business for the operators and a comfortable and qualitatively trade fair in Frankfurt. We used this occasion to contribute the fi rst satisfying experience for drivers, then this will have a favorable impact Jürgen Rautert, Spokesman of the automated car wash, as developed by Messrs. Gebhard Weigele and on the revenues and earnings of the WashTec Group. Management Board Johann Sulzberger, to the automechanika Museum to serve as an It is therefore elementary that we engage in an extensive dialogue with exhibit. our customers in all segments and regions. We are aware that only sat- It was a successful year because we made some fi ne progress in our isfi ed customers, whose needs we are able to meet, will also be loyal North American business, which was in a crisis the previous year, and customers. because a number of important innovations were well received on the We feel it is important that sales and development teams collaborate market and will support our business development in the coming years. very closely in order to promote in an expedited fashion the right inno- We are pleased that the supervisory board has given us their trust and vations in the requisite quality. By further optimizing the supply chain would like to thank Mr. Busch, who managed the company over the and working on streamlined and secure processes, we are ensuring a past seven months, for his input on key matters concerning organiza- competitive cost structure. tional structure and in-house collaboration, for his personal commit- Our sales and service network is our most important competitive ment in dealing with important customers and for the dedicated orien- strength in our established markets. Growth in these markets will be tation training we were given. possible by gaining more market share, provided that we link our innovations with competent advice. We see additional potential in new markets in Eastern Europe and overseas; we can use our experience in these markets to establish trust with new customers.

4 The Group Letter from the Management Board We shall track all of these initiatives very closely and further expand Measured in terms of revenue and EBIT, the Core Europe region was the transparency of our internal reporting system to clearly reveal our dominant again in 2012. We see additional potential in the mid-term in progress along the way. the emerging Eastern European and Asian countries. For this reason, we are further expanding our sales and service structure there. With respect to all necessary changes, it is important to strike and protect a balance between the interests of the customers, shareholders and Let us take a quick look at the key fi nancial ratios of fi scal year 2012: employees. We are aware that you – our dear employees – are a crucial we achieved our goal of improving revenues and earnings over the prior resource of the Company. You are WashTec! We feel that a major part year. Group revenues rose by approximately 3% from 2011 to € 301.5 of our job is to maintain and promote the working collaboration and million, and we were able to improve earnings before interest, taxes, communication with and among you. We would like to thank all of you and depreciation/amortization (EBITDA) signifi cantly (by 52%) to The Group The as well as your work councils for the constructive and loyal collabora- € 29.2 million. Earnings before interest and taxes (EBIT) likewise tion we have had so far and look forward to continuing our work to- climbed substantially to € 19.2 million, although one should remember gether! that in the previous year, EBIT was lower due to one-time eff ects, which included those related to the special situation in North America. Yet During the last year, the share price of WashTec AG performed well: even adjusted EBIT rose from € 17.6 million to € 18.5 million between climbing from around € 7 at the beginning of the year to slightly above 2011 and 2012. € 9 on the last trading day of 2012. This corresponds to an increase of about 25%. In 2012, a share buyback campaign was commenced in In both 2013 and the coming years, we shall use all our eff orts within order to return capital in this form to the shareholders. the Company to build upon our market leadership. Our hope is to become an even better partner for our customers in order to permanently Good progress has been The past fi scal year has allowed us to regain our confi dence in the fu- create added value for customers, shareholders and employees. made in North America ture of the North American business. We have made good progress there and have substantially increased the order intake over the prior We would be pleased if you would continue to place your trust in year, thanks in no small measure to the new local management. At the WashTec. moment, a sale of our US business is no longer on the table. Thanks to our starting position with various major customers, which is now very good, we are confi dent that we can increase revenues and profi tability in North America in 2013. Business has also developed well in Eastern Jürgen Rautert Stefan Vieweg Spokesman of the Member of the Europe and Asia, and the Germany/Austria/Switzerland region was sta- Management Board Management Board ble; only in Southern Europe and a number of other countries in Core Europe was the market weak, a consequence of the current crisis.

Letter from the Management Board The Group 5 Continuity and Change The new management board members

Dr. Jürgen Rautert (dob: 1958), Dr. Stefan H. Vieweg (dob: 1965), Spokesman of the Management Board Member of the Management Board Areas: Sales, Service, Supply Chain, Product Areas: Finance, Quality Control, Management, Research & Development General Services

Jürgen Rautert holds a doctorate in mechanical Stefan Vieweg holds a doctorate in economics engineering and therefore the German title, and a doctorate in mechanical engineering The Group The Dr.-Ing. Maschinenbau. Following his formal and therefore the German titles, Dr.rer.oec. studies and successfully completing his disserta- and Dr.-Ing. Maschinenbau, respectively. He tion at the Polytechnical School of Darmstadt, is also a “chartered ﬁ nancial analyst” (CFA). he began his career at Heidelberger Druck- Following his formal studies and successfully maschinen AG, where he worked until 2010 as, completing his dissertation at the Polytechni- among other things, the management board cal University of Braunschweig (Brunswick), member responsible for sales and technology. the Polytechnical University at Vilnius and the His last position was as Senior Vice President of CFA Institute in Charlottesville, he began his Dematic S.a.r.l., an intralogistics company man- career at Aerodate Flugmesstechnik GmbH. aged by a private equity ﬁ rm and where he was Thereafter, he spent many years working inter- responsible for global product development. nationally at Mannesmann (which later be- Mr. Rautert has been a member of the manage- came Vodafone) as a business, sales and tech- ment board of WashTec AG since January 2013. nical manager. In 2009, he went to work for In March 2013, he assumed the position of CEO Atos Information Technology GmbH, where he and Spokesman of the Management Board of served as the CFO Managed Services. Since WashTec AG from Michael Busch, who returned January 2013, Dr. Vieweg has been on the to his position on the supervisory board. management board of WashTec AG.

“We shall focus our work on important “Drawing on the progress made in operations issues and collectively achieve our ambitious and on the further improved balance sheet objectives.” structure in 2012, we shall continue to enhance our goal-oriented approaches and remain focused on exploiting market opportunities.” 6 The Group Continuity and Change The Group The

Continuity and Change The Group 7 Continuity and Change Emerging Markets gain importance

WashTec sees great mid-term to long-term the selective expansion of local sales and ser- potential in the car wash business based on vice structures should create the conditions for the development of the emerging markets in above average future growth. In this regard, Eastern Europe and Asia. Since wage levels in the Group in 2012 established its own subsid- these markets are at the moment still rela- iary in Poland and strengthened its sales struc- tively low, they continue to be dominated by tures in China.

The Group The hand washing. The driving force behind the

transition from manual car washing to (par- EU-27 USA tially) automated washing is the increasing 28.5 24.5 number of vehicles on the market and higher per capita income, on the customer side, and 13.5 14.5 the rising costs of labor and physical space in combination with limited capacity for hand 19902030* 1990 2030* washing, on the operator side. Automated car wash equipment can wash a passenger car 10.5 in roughly half the time it takes professional 24.5 hand washers to do the same job. In the future, markets such as China, Poland and Rus- 4.0 3.0 sia will make up a larger share of WashTec’s China India business. A targeted market development and Share of worldwide economic growth of selected countries and regions (percentage) Source: treasury.gov, * Forecast

8 The Group Continuity and Change The Group The

Continuity and Change The Group 9 Continuity and Change Mark VII – successful restructuring

After the US subsidiary Mark VII incurred high operating losses in 2011, measures were instituted which have already led to signiﬁ cant improvements in company results in 2012. The original, highly decentralized structure was streamlined, both spatially and organiza- Denver, CO

The Group The tionally, by consolidating, for example, approximately 80 percent of the decentralized warehouse sites and management functions at the company’s headquarters in Denver, Colo- Mark VII direct rado. The structures and control mechanisms Sales partners in place at Mark VII are now more stable, less US headquarters expensive, and more effi cient than in the previous years. Based on this favorable development, The success of these eff orts is reﬂ ected in WashTec has decided to continue serving the what is considered astounding revenue growth North American market through the US com- for a year of restructuring. Thus, for example, pany. The company’s future challenges in Mark VII was able in 2012 to produce and sell North America will consist of not jeopardizing 8 percent more new equipment with approxi- the established stability and, at the same time, mately 18 percent less personnel. Support of exploiting growth opportunities that pres- from major customers together with the re- ent themselves. The implementes measures covering US economy also contributed to the created a solid basis for further growth. improvement in earnings.

10 The Group Continuity and Change The Group The

Continuity and Change The Group 11 Continuity and Change Improving the Supply Chain

To ensure additional growth, WashTec is America Europe/ APAC pursuing a global sales strategy. In order to World be successful in this endeavor, the diff erent Customers Customer Customer Customer

Markets Orders Orders Orders customer needs and practices in each country

and each region must be understood. The task Global of the supply chain is to service in a high qual- Product- Portfolio

The Group The ity and timely manner individual customer or- Final Regional- and order-specific ders on the basis of the existing product port- Assembly customization of products folio and, at the same time, to at least off set Systems the cost pressure brought on by rising prices. Modular kit Media Standardized, modular system To this end, a global procurement and produc- in required variants tion infrastructure was developed, which in- Move dto. Activate & cludes plants in North America, Europe and Control dto. Asia. The focus in recent years was extending Structures dto. the plant in the Czech Republic and designing Parts the work processes at the headquarters in Make Standardized with defined manufaturing parameters Augsburg more effi ciently. By virtue of the Buy Standardized parts fact that the fi nal assembly of equipment for Europe occurs in Augsburg and the quality management system is standardized for all plants, we always off er our customers a “Made in Germany” level of quality. Final assembly of car wash equipment is carried out in Denver (Colorado, USA) for the North American market and in Shanghai (China) for the markets in the Asia/Pacifi c segments.

12 The Group Continuity and Change The Group The

Continuity and Change The Group 13 Continuity and Change From carousel to SoftCare2 Pro

WashTec’s challenge was and continues to be identifying car wash needs today in order to meet the demands of tomorrow. Relying on our more than 700 patents, we are constantly pushing the development of car wash facilities and are today 1962 – one of the ﬁ rst 1985 – the Elektronik 35 autom. carwashes by Californiarohé the market leader for innovative solutions related

The Group The to car washing worldwide. Since August 8, 1962, when Gebhard Weigele and Johann Sulzberger fi led a patent application for the fi rst automated wash system for motor vehicles, this area has seen 1963 – the fi rst klein- 1987 – the soft wash quite a bit of change, however. dienst 3 brush rollover by Wesumat

Whereas at the time these systems still used a dual brush system, which during the wash process circled the standing vehicle on tracks, WashTec today produces a highly modernized rollover system for premium automated washes using state- 1969 – the Combi Typ 1994 – the C 45 by 6-269 by Kleindienst Californiarohé of-the-art software and a great variety of diff erent options.

Yet the evolution of car wash equipment has not in any way ended. In the years to come, we have

also committed ourselves to innovating and in- 1976 – the Super-Polish 2002 – Introduction of vesting in research and development in order to Combi by Kleindienst the Generation SoftCare preserve our leadership in innovation and on the market and to push even harder the notion of quality, sustainability and user friendliness in the car wash industry. 1984 – the Euro Combi 2012 – the SoftCare2 Pro by Kleindienst Touchless 14 The Group Continuity and Change The Group The

Continuity and Change The Group 15 Continuity and Change Innovations 2012

During the 50th anniversary year of the friction SoftCare Pro Classic car wash, WashTec presented – up to the au- 01 Express programs tomechanika – a novelty each month as part of a major innovation campaign in 2012: one world premiere, which was presented, was Drive-In Carwash the revolutionary Advanced Chemical System 02

The Group The (“ACS”), with which WashTec would now be off ering a completely new and very user- friendly cartridge system for cleaning and SoftCare² Pro Touchless care products. It replaces the previous 03 reﬁ lling of wash chemicals with a quick, safe and clean reloading procedure. The service

personnel can now swap out the chemical car- AquaX² tridges within one or two minutes without 04 spilling a drop or any risk of confusion, instead of having to rely on bulky canisters for reﬁ lling. SoftCare Pro Classic XL 320 The other innovations in 2012 included the 05 “Drive-in Carwash” concept, according to which the wash customer can now also enjoy the car wash experience in a comfortable, Precision chemical application time-saving and safe manner within a rollover 06 car wash system while remaining seated in his or her vehicle, as well as the new high pressure SoftCare2 Pro Touchless system, which Advanced Chemical System “ACS” can be utilized not just for extensive pre- 07 cleaning but also for a pure, touchless high pressure wash.

16 The Group Continuity and Change The Group The

Continuity and Change The Group 17 automechanika World’s leading trade fair for automotive industry

From September 11 – 16, 2012, the industry’s In addition, WashTec participated at the largest trade fair in the world, “automechan- special live event, “Man versus Machine”, at ika”, was held in Frankfurt am Main. which visitors had a chance to compete head- to-head against the speed of the world’s most At a newly designed showroom area in excess modern car wash equipment from WashTec. of 1,250 m², WashTec exhibited to a wide in- WashTec also contributed the ﬁ rst automated ternational audience more than ten innova-

The Group The car wash equipment to the “automechanika tions and other trends in commercial and eco- Museum”. WashTec thereby combined tradi- logical car washing, and thereby validated its tion and innovation like no other exhibitor position as the leading supplier of innovative at the fair. solutions for the car wash business worldwide. Highlights of the exhibit included, among other things, the Advanced Chemical System (ACS), the SoftCare² Pro Touchless, and a “Drive-in Carwash” rollover car wash system. All innovations were very well-received by the visitors.

18 The Group Continuity and Change The Group The

Continuity and Change The Group 19 Report of the Supervisory Board

Dear Shareholders, After the new supervisory board was constituted, it was our collective Ladies and Gentlemen, hope to greatly accelerate the speed of the strategic repositioning Our dear Employees, within our Company in an eff ort to continue defending and expanding the market leadership of WashTec AG. After it became clear in discus- 2012 was a year that included huge challenges and important decisions sions with the management board that we would be unable to reach an not just for WashTec AG and its supervisory board, but also for me at a agreement about the individual measures needed to implement this very personal level: strategy, the management board members agreed to resign eff ective To begin with, you – our dear shareholders – decided at the annual gen- July 31, 2012. Special thanks should go to them for their work and their eral meeting to increase the size of the supervisory board from three strong personal commitment.

The Group The members to six members. The following persons joined the re-elected After an extensive search process, we were able to recruit Messrs Dr. Michael Busch, members, Mr. Pedrazzini and me, on the board, bringing with them Rautert and Dr. Vieweg, two experienced managers, to serve as the new Chairman of the their knowledge and experience: Supervisory Board management board members. They will push with great speed the stra- Mr. Jens Große-Allermann tegic repositioning of the WashTec Group, focusing on innovation and on penetrating additional growth sectors. Dr. Rautert and Dr. Vieweg Dr. Hans Liebler will use their expertise and experience from their previous positions to Dr. Sören Hein work with WashTec management in further solidifying and expanding WashTec’s position as market, innovation and proﬁ t leader in the car We were also able to recruit Mr. Roland Lacher again for our supervi- wash industry. sory board. He had already been a member of the three-person supervisory board from 2007 through 2010. And now a very personal remark: As you can no doubt imagine, it had not been my life’s plan to once again assume operational responsibility; After many years of loyal service, Mr. Jürgen Lauer decided not to seek on the other hand, I could not and would not ignore the call of the re-election. I would like to express my thanks once again to Mr. Lauer supervisory board to manage WashTec AG for an interim period until for his many years of services as a member of our Company’s manage- a new spokesman of the Company’s management board has been ap- ment board and supervisory board. pointed. Now, looking back at my seven months as a member and After only a few weeks with the newly constituted supervisory board, spokesman of the management board, I must confess that managing I was able to determine the following as the re-elected chairman: the the Company was in fact – on a daily basis – both gratifying and even a style and nature of the collaborative work on the board have not bit fun. changed. This collaboration has continued through today and also serves as the basis for the future.

20 The Group Report of the Supervisory Board Why is this? Following the resignation of the previous management board, I became a management board member in accordance with § 105 (2) of the Ger- First, let me begin by mentioning the employees: I am thankful that the man Stock Corporation Act (AktG) eff ective as of July 28, 2012, and employees at all levels were prepared to use their ability and commit- also assumed the position of management board spokesman. During ment in helping to keep the ship on course. My contribution in words the period of this appointment, Massimo Pedrazzini was elected to and in organizational changes also had, as its goal, the improvement of serve as the new chairman of the supervisory board and Jens Große-All- the collaborative work within the Company itself. This approach was ermann as his deputy. Following a two-month transitional period after also accepted. We are on the right path today. the new management board members took offi ce, I returned to my role Second: Our customers also accepted the change and have shown me as supervisory board chairman eff ective March 1, 2013. Since that time,

during various meetings and discussions how important WashTec is for Massimo Pedrazzini has once again assumed the offi ce of deputy super- Group The them. I am particularly thankful for these (in some cases renewed) con- visory board chairman. tacts and the outside support. During the reporting year, the supervisory board discharged the respon- Third: the new supervisory board, which has since been rearranged, has sibilities imposed on it under the law, the Company’s articles of associa- altogether stood by my side at all times with its words and deeds. tion and the board’s own internal rules of procedure. The supervisory Please allow me to thank all the members of the supervisory board for board was directly involved in all decisions of fundamental signiﬁ cance their support, above all Massimo Pedrazzini, who acted as supervisory to the Company. In ﬁ scal year 2012, the supervisory board, among board chairman during my absence and his deputy, Jens Große-Aller- other things, regularly obtained information about the status of busi- mann. ness and the condition of the Group.

In connection with the repositioning and review of the North American In fi scal year 2012, the Work of the supervisory board business, a special examination of the WashTec Group’s compliance supervisory board regularly obtained information In addition to the evaluation of the current business operations and system was also performed. The management board reported to the about the condition of the specifi cally the situation in North America and Core Europe, the work supervisory board about the analysis, fi ndings and measures for further Group and supervised the of the supervisory board has been largely shaped by the changes on the improving the compliance system, and the supervisory board had the managerial activities of supervisory and management boards, particularly in the second half of management board routinely report on the progress of implementing the management board the year. Supervisory board committees were formed, negotiations with the measures. It also supervised the managerial activities of the Compa- former management board members were conducted, and the new ny’s management board. The basis for this work was, above all, timely management board members were appointed. written and oral reports issued to it by the management board. The management board provided the supervisory board with, among other things, monthly written reports on business development. When it was

Report of the Supervisory Board The Group 21 needed, the supervisory board also requested additional reports from The topics at the regular conferences of the supervisory board were the the management board and inspected other relevant Company docu- development of revenues, earnings and staffi ng at the WashTec Group, mentation. Discrepancies between actual business development and the fi nancial position and the major investment projects, and the risk the plans and targets were explained to the supervisory board in detail management system. The management board submitted regular and and then checked by the supervisory board based on the documents comprehensive reports to the supervisory board about corporate plan- presented to it. The management board conferred and coordinated ning, strategic development, the status of business and the updated with the supervisory board on the strategic direction of the Company. condition of the Group. Thus, the supervisory board had at all times a The supervisory board discussed any transactions, which were important detailed understanding of all major business events and developments to the Company, on the basis of the reports issued by the management at the WashTec Group. Moreover, any transactions and courses of board. action, which required the consent of the supervisory board, were reviewed and then discussed and decided with the management board. The supervisory board has voted on all reports and draft resolutions of the management board, whenever required by law or the Company’s Signifi cant other topics at the plenary board meetings in fi scal year articles of association, after thorough examination and discussion. In

The Group The 2012 were: addition to the extensive work conducted during the supervisory board meetings, the chairman of the supervisory board also discussed the At all meetings: discussions about current business development Focus 2012: Company’s position and its further development and direction in vari- and earnings and comparison with the budgeted fi gures, special Current business and earning situation ous one-on-one talks with the management board. The other super- focus there placed on the development of orders in the wake of the Status North America visory board members were in contact with the management board fi nancial and economic crisis as well as the developments in North Supervisory board and outside of the board meetings. All supervisory board members provided America; management board each other with detailed reports concerning their respective one-on- matters Extraordinary meeting (CC) held on February 9, 2012: preliminary one talks with the management board. 2011annual fi nancial statements; In fi scal year 2012, the plenary supervisory board held a total of Extraordinary meeting held on February 17, 2012: status report twenty-one ordinary and extraordinary meetings, of which ten were North America and the UK, budget; held in the form of conference calls (“CC”). Moreover, two resolutions were adopted by the board members without a meeting pursuant to a Meeting (CC) held on February 24, 2012: status report North draft resolution circulation and signing procedure. At least one meeting America; was held each quarter. All members of the supervisory board were Extraordinary meeting (CC) held on March 6, 2012: discussion of the represented at all the meetings held. In addition, fi ve committee meet- draft annual fi nancial statements of the Group and AG for the most ings were held, which were attended by the relevant committee mem- recently completed fi scal year in the presence of the annual accounts bers only. The committee work report is presented to the supervisory auditor, management letter 2011; board during the plenary meetings. This report will separately address the duties and tasks of the committees.

22 The Group Report of the Supervisory Board Extraordinary meeting held on March 9, 2012: supervisory board Extraordinary meeting (CC) held on July 27, 2012: report on the matters; audit committee, supervisory board and management board matters;

Meeting held on March 21, 2012: adoption or approval of the Extraordinary meeting held on August 14, 2012: supervisory board annual ﬁ nancial statements and management board with the par- and management board matters, share buyback; ticipation of the annual accounts auditor, report of the supervisory Meeting held on September 20, 2012: update North America, board, draft resolutions to the annual general meeting, update determination of the focus for the audit of the annual ﬁ nancial North America, market, taxes, supervisory board matters; statements; supervisory board and management board matters, Extraordinary meeting (CC) held on March 27, 2012: preparation capital increase Poland; for the annual general meeting, sale of unused plant grounds; Meeting held on October 25, 2012: update North America, capital Extraordinary meeting (CC) held on April 10, 2012: evaluation of increase China, supervisory board and management board matters; strategic options; Extraordinary meeting (CC) held on November 14, 2012: supervisory

Extraordinary meeting (CC) held on April 11, 2012: evaluation of board and management board matters; Group The strategic options; Meeting held on December 11, 2012: report on the compliance Extraordinary meeting (CC) held on April 24, 2012: evaluation of organization and measures, budget and mid-term planning including strategic options; strategy, annual resolutions regarding the remuneration system of the management board and regarding the corporate governance Extraordinary meeting (CC) held on May 2, 2012: evaluation of declaration; supervisory board and management board matters. strategic options, preparation for the annual general meeting, return policy, quarterly report; Corporate Governance Meeting held on May 10, 2012: preparation for the annual general After the supervisory board was increased to six members pursuant to The supervisory board meeting, update North America; the shareholder resolution, which was adopted on May 10, 2012, the currently consists of six members Extraordinary meeting held on May 10, 2012: constitution of new board decided at its meeting on May 24, 2012 to form an audit com- An audit, personnel and supervisory board including election of the chairman, status reports; mittee, a personnel committee and a nominating committee in order nominating committee to effi ciently discharge its duties and to comply with the requirements were formed Extraordinary meeting held on May 24, 2012: effi ciency measures, of the Code. The current constitution of the committees is set forth on update North America, determination of the focus of the audit of page 48. The committees have the task of preparing the topics and the half-year ﬁ nancial statements; supervisory board matters, update resolutions for the supervisory board meetings. They do in fact execute evaluation of strategic options; some decision-making authority, which is delegated to them by the Extraordinary meeting held on July 10, 2012: supervisory board and supervisory board. We provide below a brief overview of the committee management board matters; duties:

Report of the Supervisory Board The Group 23 The duties of the audit committee include, among other things, committee also regularly advises on the long-term successor planning reviewing the Company’s bookkeeping and accounting practices, the for the management board. In this regard, it takes into account the annual and consolidated fi nancial statement prepared by the manage- manager scheduling of the Company and also takes diversity into con- ment board, the combined management report and the recommenda- sideration. This body met twice in the recently completed fi scal year. tion on using the non-appropriated distributable profi ts, as well as re- The nominating committee meets as needed and recommends suitable viewing the quarterly fi nancial statements and interim management supervisory board candidates for nominations to be presented to the report of the WashTec Group. On the basis of the auditor’s report on annual general meeting. Factors in making recommendations include, the audit of the annual fi nancial statements of WashTec AG and the among other things, the international activity of the Company, indepen- WashTec Group and on the basis of the combined management report, dence, potential confl icts of interest and diversity. This committee did the audit committee works out recommendations to the supervisory not meet in fi scal year 2012. board regarding the approval of the annual fi nancial statements. The audit committee also deals specifi cally with monitoring the accounting The members of the supervisory board have exhibited effi ciency and and bookkeeping process, the eff ectiveness of the internal control sys- professional competence in their collaborative work on the board. No

The Group The tems and the internal audit system, and with the annual accounts audit, confl icts of interest arose among the supervisory board members. in this case specifi cally with the neutrality and independence of the au- The management board remuneration system is based on the duties and ditor, the additional work performed by the auditor, the issuance of the achievements of the management board members and on the condition audit mandate to the auditor, the stipulation of the audit focus and the of the Company. The overall remuneration of the members of the man- fee agreement, and with compliance. The committee met three times in agement board is made up of monetary and non-monetary as well as the most recently completed fi scal year. fi xed and variable components, and in general, it is directed at the sus- The personnel committee has the duty of preparing the groundwork tained development of the Company. for supervisory board decisions about the content, execution and modi- All of the components of remuneration are structured in such a way fi cation of service (employment) agreements with management board that each of them is reasonable both in and of itself and in the aggre- members appointed by the supervisory board and about all questions gate, and that they do not encourage the directors to take unreason- arising in this connection between the management board members able risks. The remuneration of the management board and the super- and the Company and specifi cally making recommendations regarding visory board members is more closely described within the annual the overall remuneration of the individual management board members. report under the declaration of corporate management on pages 53 –55 It will also decide on the granting of loans to the persons identifi ed in (Remuneration Report). A detailed discussion about corporate gover- §§ 89, 115 of the German Stock Corporation Act (AktG). It also advises nance is also set forth there. The supervisory board approved the an- on and prepares drafts for the supervisory board with respect to the nual remuneration systems for the management board at its meeting of planned appointment of management board members. The personnel December 11, 2012.

24 The Group Report of the Supervisory Board Audit of the annual and consolidated fi nancial statements tributable profi ts had been presented to all members of the supervisory board in a timely manner so that the latter could carry out their own The management board prepared the fi nancial statements of WashTec review. Financial statements and management report were the topic of AG as well as the consolidated fi nancial statements and the combined the supervisory board meeting, which was held on March 20, 2013 in management report of WashTec AG and of the Group as of December order to approve the accounts. As part of that supervisory board meet- 31, 2012. These fi nancial statements and reports were audited by the ing, the management board also issued a report regarding the develop- Group auditors – PricewaterhouseCoopers AG, Wirtschaftsprüfungsge- ment of the Company’s earnings. sellschaft, Munich – who were selected by the annual general meeting of shareholders, and were each issued an unqualifi ed audit opinion. The auditor attended the meeting on March 20, 2013 and provided the supervisory board with a direct and extensive report on the fi ndings PricewaterhouseCoopers also audited the annual fi nancial statements of his audit and on the focus of the audit. All questions posed by mem- of the main WashTec AG subsidiaries. bers of the supervisory board were answered here in detail. The super- The audit committee initially defi ned the focus of the audit and there- visory board noted the audit fi ndings and reviewed the annual fi nancial upon engaged the auditor to perform the audit. Prior to and during the statements of WashTec AG, the consolidated fi nancial statements and The Group The fi nancial statements audit, the audit committee monitored the inde- the combined management report as well as the management board’s pendence and qualifi cation of the auditor. proposal on the use of non-appropriated distributable profi ts. The supervisory board’s review did not yield any objections. At its meeting The auditor was also engaged to review whether the monitoring system held for purposes of approving the accounts, the supervisory board ap- established by the management board was capable of identifying in a proved the annual fi nancial statements of WashTec AG (as prepared by timely manner the potential risks that could jeopardize the Company’s the management board) and the consolidated fi nancial statements. The very existence. In this respect, the auditor stated that the management annual fi nancial statements of WashTec AG are thereby formally ad- board had taken the measures required in accordance with § 91 (2) opted. The management board’s proposal on the use of the non-appro- AktG and that these measures were suitable for identifying at an early priated distributable profi ts was approved by the supervisory board stage any developments that could threaten the Company’s continued after it reviewed the proposal. existence. Moreover, the supervisory board itself regularly monitors the eff ectiveness of WashTec AG’s internal control systems (risk manage- It is my privilege to once again express my special thanks to all employment, internal auditing, compliance). ees of the Company for their continued eff orts and personal achievements. The audited annual fi nancial statements of WashTec AG, the audited consolidated fi nancial statements, the combined management report of Augsburg, March 2013 WashTec AG and of the Group as of December 31, 2012, as well as the management board’s proposal on the use of the non-appropriated dis-

Michael Busch Chairman of the Supervisory Board

Report of the Supervisory Board The Group 25 Sustainability Report

As the worldwide leading supplier of products and services along the automated car washes with water reclaim systems. In Northern Europe, car wash value chain, WashTec meets the highest standards not only in the environmental policy requirements are now becoming increasingly matters involving product and service quality, but also in matters of strict, and even in other countries, a ban against manual car washing is environmental protection. under discussion. In Scandinavia, WashTec has already received the “Nordic Swan” environmental prize for particularly environmentally- WashTec is committed to the principle of environmental sustainability, sound water reclaim equipment and/or car wash facilities. and therefore always manages its business aff airs in a manner that uses resources and materials as effi ciently as possible. Our environmentally- In automated car washing, water and other substances, such as sham- friendly products allow us to help preserve the globally scarce sources poo and oil, remain in a closed cycle and cannot, as such, seep into the of energy and raw materials. ground or the groundwater. Since clean water is a resource that is as in- The Group The dispensable as it is precious, WashTec off ers water reclamation or re- We would like to explain to you below how sustainability is imple- covery systems which, by treating the process water, reduce fresh water mented at WashTec. consumption during car washes by up to 90%. Thus, for example, a rollover wash system with water reclaim equipment uses only between Product responsibility 14 and a maximum of 30 liters of fresh water during a standard wash 1. WashTec Products (compared to 44 liters of fresh water consumed during a standard wash The WashTec Group’s business model and its products actively contrib- with a modern washing machine). With the new AquaX2, it will be ute to protecting the environment. possible to reduce energy consumption of the water reclaim equipment by a further 70%. We fully expect that as water becomes more and more scarce as a natural resource, the requirements for water recovery or water reclama- Minimized consumation of fresh water tion will continue to rise. As this trend materializes, we will be best The WashTec environmen- equipped with our products to handle these new demands. tal seal can be found on 220 l to 180 l 220 l to 180 l all products and product All WashTec equipment meet all of the environmental regulations cur- Manual High pressure washing roll-over 170 l to 120 l components which are rently in force and off er an environmentally-sound and fresh water-pre- wash system without Brush roll-over environmentally friendly water serving alternative to the manual car washing approach that is prohib- wash system 30l to 14l reclamation and protect our natural without water Brush roll-over resources ited in Germany. Even in markets with lower environmental standards reclamation wash system with or greater water scarcity, WashTec is expecting to see more and more water reclamation regulation. This means greater potential for environmentally-friendly Source: WashTec Analysis

26 The Group Sustainability Report 2. AUWA chemical products The AUWA product program is excellently harmonized with all WashTec AUWA stands for vehicle cleaning and care, which is at once both water reclaim equipment and also in this manner helps preserve a high powerful and environmentally sound. level of water quality. The eff ectively concentrated and highly effi cient products assist in reducing dosage quantities – and therefore, consump- The range of products begins with a line-up of cleaning and care prod- tion – and in improving the quality of the process water and in thereby ucts for car wash facilities that have a low environmental impact and lowering fresh water needs. Speciﬁ c dosage recommendations on the are optimally reconciled with one another and spans from our special product packaging also help to avoid excessive dosages. solutions for water reclamation to a comprehensive assortment of cleaning and care of wash equipment and wash bays. Production

Environmental compatibility is a priority for all AUWA chemical prod- Group The 1. Equipment ucts. Strict and seamless quality controls ensure that all AUWA prod- The majority of the equipment production takes place at the headquar- ucts always satisfy all currently valid statutory requirements and that, ters in Augsburg and has in recent years been fundamentally updated for example, the wastewater thresholds are always met. For the Com- and reorganized. Moreover, the subsidiary located in Denver, Colorado pany, the need to have seamless quality controls is just as obvious as (USA), assembles car wash equipment primarily for the North American the imperative of meeting the highest environmental and health stan- market. The company in China also serves as supplier of components dards. Thus, for example, all AUWA “ecoline” products are exception- and assembles the equipment for the Asian market. The subsidiary in ally bio-degradable, environmentally friendly and non-abrasive. the Czech Republic manufactures components for the fi nal assembly in The entire AUWA portfolio is free and clear of hydrofl uoric acid and Augsburg. There is also another smaller production site in Recklinghau- nitrilotriacetic acid (NTA). This potential carcinogenic substance is used sen, where the control units are manufactured for the entire Group. to soften water in conventional car care products. The environmentally- The added value at WashTec is carried out mostly as a result of sheet friendly substitute used by AUWA is the best example in showing that metal forming with modern machinery and in the form of a fi nal assem- an uncompromisingly high level of car care can be achieved even with bly of components groups. Thus, there is no signifi cant discharge or formulations that have a low environmental impact. emission of harmful substances during production. Thereafter, products A number of AUWA products also satisfy the requirements of the Nor- are installed and maintained at our customers’ places of business by dic Ecolabel (Nordic Swan), as well as the Milieukeur Ecolabel. More- over 500 in-house service technicians, sub-contractors and technical over, the wash chemical products are inspected under the DHI-criteria personnel of our sales partners. The service technicians are on the road (which classifi es products according to various environmental catego- with specially equipped service vehicles, in which the suitable equip- ries) as well as under the ÖNORM B5106, which focuses on the waste- ment and fi ttings are installed, from tools and spare parts to safety water response of the products. equipment.

Sustainability Report The Group 27 The average period of use for car wash equipment is between 5 and Moreover, there are as a rule no poisonous ingredients used in produc- 10 years. At the end of the equipment’s period of use, it is then profes- ing AUWA products. If a raw material is classiﬁ ed as “environmentally sionally disassembled and either refurbished or professionally removed. hazardous”, then it will no longer be used or will be replaced by a non- All product speciﬁ cations for the development of the equipment at hazardous raw material. In addition, reviews are constantly being made WashTec include rules for a possible complete re-usage of the products. as to whether a raw material not requiring a label can be used instead Virtually all existing peripheral components can be used again in the of (i.e., a potentially hazardous) one that does in fact require a label. event of an equipment replacement – which now even extends to system control components. WashTec environmental scorecard

2. Wash chemicals The WashTec environmental scorecard may be divided primarily into the The wash chemical products sold by AUWA are conceptualized and pro- following two areas: duced in our laboratory in Augsburg and Grebenau in close cooperation 1. Energy with the WashTec Development Department. At WashTec, the vehicle ﬂ eet makes up the largest percentage of overall

The Group The During the production of the AUWA products, the available resources energy needs (64%). All diesel vehicles newly acquired by WashTec are are always handled conservatively. Accordingly, any raw materials such equipped with particle fi lters. These fi lters reduce the discharge of par- as dye, fragrances, emulsifying agents, or similar products, which are ticles by up to 99% per vehicle. In addition, the fuel consumption is not required for the product to work, will be avoided to the extent pos- lowered to the furthest extent possible by equipping the service vehi- sible, while factoring in our customers’ own needs. All wash chemical cles with GPS navigation systems, which facilitate better route planning products are concentrates that are automatically diluted and appor- and thereby keep travel time as low as possible. tioned in the wash equipment. In addition to saving weight, this pro- The electricity, which WashTec procures for the corporate headquarters cess also saves packaging materials, thereby reducing to a minimum and the main production site in Augsburg, is derived up to 30% (prior the transport costs. year: 30%) from renewable energy. This fi gure is signifi cantly higher The use of high-value ingredients in a highly concentrated and opti- than the national average of 18% (prior year: 18%). WashTec thereby

mized mixture allows chemical consumption per wash to be reduced. actively contributes to reducing radioactive waste and lowering its CO2 By using the concentrated cleaning agents, the uses and the related emissions. transport costs and exhaust fume emissions are reduced by 30 – 70% 2. Waste per product. In 2012, WashTec generated 2,100 tons of waste material in Germany In the production and development of all AUWA products, the general by having taken back old equipment and due to production waste. This slogan is “quality before quantity”; i.e. preference is always given to waste is systematically sorted and recorded. By utilizing reuse/recycling using an optimally reduced quantity of an effi cient raw material or a systems in the logistics process and by resolutely separating recyclable performance-enhanced raw material combination instead of a larger waste materials (e.g., metals and sheets), the Company was able to re- quantity of standard raw materials. duce the amount of waste requiring disposal. Despite lower prices on

28 The Group Sustainability Report the recycled materials markets, the sale of these waste materials still management systems are regularly reviewed and are explained in an yielded € 390k in 2012 (prior year: € 570k). Disassembled systems are annual management review. A continuous improvement process serves either refurbished or professionally removed by authorized service as a means for achieving the goals deﬁ ned by the Company. providers. Environmental Certiﬁ cate from the State Government of Bavaria GoGreen Initiative With the environmental management system set up pursuant to GoGreen is a global climate protection program, which was instituted DIN EN ISO 14001, WashTec participates in the “Environmental Pact by Deutsche Post/DHL and allows for carbon-neutral shipping service. Bavaria”. The “Environmental Pact Bavaria” is a voluntary agreement Any emissions generated during transport and handling are measured, between the Bavarian state government and Bavarian industry which, off set and reduced to the extent possible. Deutsche Post off ers its among other things, creates an obligation to provide additional

customers the opportunity to off set CO2 emissions when sending mail, environmental protection work that goes far beyond the standards by supporting climate protection projects such as hydropower plants or required by law. In recognition of its many years of involvement in the biomass power plants. Since 2011, WashTec has shipped its mail using “Environmental Pact Bavaria”, WashTec was awarded the so-called The Group The GoGreen and has thereby further contributed to environmental protec- “Umweltschutz-Urkunde” (Environmental Protection Certiﬁ cate) from tion. the Bavarian state government in 2011.

Certiﬁ cations Stakeholder Dialogue

WashTec is certifi ed under EN ISO 9001:2008 and 14001:2004, which WashTec as a sustainable investment are standards that set forth the globally recognized requirements in responsible quality management and environmental management sys- Due to the Company’s sustainable business model, WashTec shares are tems. In addition, WashTec is certifi ed under SCC**:2006. “SCC” stands included as components in investment funds that focus on sustainable for “Safety Certifi cate Contractors”. This standard governs all safety investment. In 2007, WashTec received the “SRI Pass-Status” as a sus- rules and work conditions for technical service providers and serves tainable investment (Sustainable & Responsible Investment). to protect the health of our employees.

Ecological aspects constitute a permanent part of WashTec’s strategic planning: from product development to resource management in the production. At WashTec, group-wide environmental goals are routinely set and measures for their achievement adopted, which measures are realized and evaluated in projects. Goal realization and environmental

Sustainability Report The Group 29 Customer satisfaction 2. Employee handbooks In all foreign subsidiaries of the WashTec Group, the most important Our goal is to off er our customers at all times the best possible prod- provisions concerning the employment relationships are also governed ucts and processes as well as the best possible service for operating a in so-called “Employee Handbooks”. These contain, for example, rules successful car wash business. on non-discrimination, handling employee complaints, employee inter- In order to review the extent to which we can satisfy this goal, we con- action as well as general rules on structuring employment relationships. stantly carry out customer satisfaction surveys in which we review the 3. Internal compliance audits level of satisfaction with our products (e.g., regarding quality, price-per- All departments and companies within the WashTec Group are regularly formance ratio, introductory operational training) and our customer ser- audited on their compliance with all applicable internal and external vice (e.g., regarding quality, reaction time, friendliness). The survey re- directives and rules. These audits take the form of a so-called “internal veals that our customers have been consistently very satisﬁ ed with the compliance audit”. Thus, any inconsistencies or discrepancies should be service we provide. According to the most recent survey conducted in identiﬁ ed as early as possible and corrected. Germany, the overall customer satisfaction with WashTec service and

The Group The our products is very high. In connection with this survey, approximately 4. Training and human resource development 1,000 service deployments and machine installations were analyzed in Human resource development plays an important role at WashTec. 2012. Almost 200 of our chemicals customers were also surveyed. Our WashTec off ers all its employees the opportunity to participate in inter- customers are particularly satisﬁ ed with the quality of the product as- nal and external continuing education and training programs. These sembly (grade: 1.6) and the supply of replacement parts (grade: 1.2). programs include, for example, foreign language courses or courses in The quality of work has also been given a very good grade of 1.4. None current Offi ce programs. A budget is planned each year for the ongoing of the categories was graded worse than 2.0 (grading based to the Ger- training of employees. man school grading system where 1 represents the highest grade and Most of the employees in the WashTec Group’s subsidiaries are service 6 the lowest grade). technicians who install and regularly maintain the car wash systems. The service technicians are under a special obligation to learn and Personnel and Compliance understand the issue of safety (for details on this issue, please see the 1. WashTec Code of Ethics heading “Health and Safety”). Since 2005, a standard Code of Ethics applies to all companies of the At the Company’s headquarters in Germany, the Company off ers formal WashTec Group, and its main tenet requires that all employees comply training and education to qualify as a mechatronic technician [Mecha- with all laws and directives (compliance). The Code includes the key troniker], a marketing communication business person [Kauff rau/-mann directives on how employees ought to interact with one another and für Marketingkommunikation] and an IT business person [Informatik- how to interact with customers, suppliers, advisors and government of- Kauff rau/-mann]. ﬁ cials. The managers at WashTec Group are required each year to sign an avowal to comply with the directive. Any violations will be pursued. The WashTec Code of Ethics can be downloaded from www.washtec.de.

30 The Group Sustainability Report 5. Employee satisfaction In connection with the reorganization of the production routines and The employees of WashTec are a key to our business success. The satis- investments in the production sites, special emphasis has also been faction of our employees in Germany, for example, is refl ected in the placed on ergonomic processes and tools. low employee turnover and in the high average number of years of The number of occupational accidents at WashTec has also declined company service. signifi cantly in the past years. 6. Health and safety 7. Balancing family and career Through its regular training on work safety, the ergonomic design of Balancing of family and career is a matter that lies close to every par- its work stations and its medical wellness checks (e.g., in connection ent’s heart. WashTec actively seeks to meet this need for a work-life with the “WashTec Health Days” program, which is regularly off ered balance among its employees. For this reason, WashTec entered into in Germany), WashTec has a proven commitment to the health of its cooperation with the operator of children’s daycare center. This agree- employees. ment provides that WashTec staff will be given preference in the Moreover, under the SCC certifi cation, WashTec has a very well devel- allotment of spots in the daycare program, and WashTec will provide

oped employee safety system and health protection management sys- fi nancial assistance in covering the daycare costs. Group The tem. WashTec service technicians are under a special obligation to learn and understand the issue of safety. The focus of regular training and Social commitment – the Bunter Kreis certifi cation programs are training sessions for conduct in and around The birth of a handicapped child, a heart problem or the diagnosis of gas stations in preparing and implementing work related to the com- cancer, an accident or hereditary disease always aff ects the entire family missioning, maintenance and servicing of our equipment and systems. and changes lives abruptly. All WashTec service technicians in Germany have participated in a WashTec-fi nanced driver safety training program. The compliance with With approximately 70 professionals, the registered association, the safety provisions is routinely monitored in internal and external Bunter Kreis e.V., which was formed in Augsburg in 1991, supports audits. handicapped and sick children as well as families in that situation in terms of psychiatry, social services, medicine and fi nance.

Since 1996, WashTec has continually supported the Bunter Kreis and has done so as one of the main sponsors by making both monetary and in-kind donations.

Sustainability Report The Group 31 WashTec Share

Good year on the stock markets despite major uncertainties WashTec share price increased by approximately 26% during the course of the year to a level of around € 9 The hallmark of the stock markets in 2012 was heavy price volatility, which was attributable to the uncertainties about the potential impact Initially, the main infl uence on the WashTec share price in 2012 was the of the Euro and fi nancial crisis on the real economy. In light of favorable residual impact of the North American business weaknesses that came corporate results that were reported and the hope of a solid economic to light in 2011 and the generally diffi cult overall conditions facing the recovery, the leading German index, the DAX, climbed by approxi- car wash equipment business. Accordingly, the WashTec share regis- mately 20% to over 7,100 points by the middle of March. Nevertheless, tered its lowest trading price at € 7.20 on the fi rst trading day of the the subsequent intensifi cation of the euro crisis, the discussions sur- year. Investor confi dence about an imminent solution to the problems rounding a possible Greece exit from the euro zone and the expansion in North America and the relatively solid operating fi gures led to a sig- The Group The of the crisis to Italy and Spain all led thereafter to major disenchant- nifi cant recovery of the stock price through mid-February (rising to € 9). Dr. Stefan Vieweg, Member of the management. The DAX once again fell below the 6,000 points threshold. It The price stabilized when a new corporate strategy and a favorable out- ment board was not until early June, after some commitments were made by politi- look for fi scal year 2012 were announced at the fi nancial press confer- cians and the European Central Bank regarding the stability of the euro, ence at the end of March. On May 21, the stock reached its highest that the situation levelled out. The risk premiums on government bond price of the year at € 9.45. In subsequent months, the share price yields declined and the stock prices once again rose. In September, the moved within a relatively tight range at or around the € 9 level. Only DAX again broke past the 7,000 point barrier. The discussions in the when reports emerged about personnel changes on the management United States regarding the so-called “fi scal cliff ” and the possible ef- board at the end of July did some uncertainty arise briefl y and the price fects on the global economy dampened the moods on the stock mar- declined. The Company was able to counteract these developments, kets in November. After at least a temporary agreement on the problem however, by publicizing a share buyback program and by reporting solid was reached, however, the market again rallied through the end of the operating earnings in the second half of the year. Accordingly, the stock year and many stock markets closed the year very near to their highest price recovered and closed out the stock market year on December 28, levels for the year. The DAX fi nished at 7,612 points and therefore 2012 at € 9.03. Thus, WashTec reported a roughly 26% price increase showed a gain of over 25%, while the small-cap index, the SDAX, rose during 2012. by 17% to 5,249 points and the European index, the Stoxx 50, reported Market capitalization higher than € 100m an 11% gain to 2,636 points. The market capitalization of WashTec AG as of December 31, 2012 was € 126.2m based on an unchanged number of shares (13,976,970 shares). In order to be included in the SDAX in the mid-term, WashTec

32 The Group WashTec Share would need to rank among the top 110 in terms of both market capi- Return policy is continued talization criterion and trading volume criterion. Based on the market Pursuant to a resolution adopted by the annual general meeting of WashTec sticks to its return capitalization, WashTec already satisfi es this criterion by ranking 92nd shareholders on May 10, 2012, the Company did not pay a dividend to policy (prior year: 96th), but does not meet the trading volume criterion its shareholders for fi scal year 2011. WashTec’s enduring return policy, (ranking: 114; prior year ranking: 115). Thus, in the future as well, the however, is to distribute roughly 40% of its net result. For such a distri- Company will endeavor to elevate interests in, and therefore the trading bution to be made, the Company must maintain a conservative gearing volume of, WashTec shares in fi scal year 2013 by continuing to engage ratio of less than 1 and have adequate resources to expand the market in appropriate investor relations work. position and achieve moderate growth. Against this background, the Price development of WashTec shares 2012/2013 compared management board and the supervisory board will tentatively recom- The Group The to the SDAX (indexed) mend to the annual general meeting of shareholders, which is sched-

11.0 uled for May 15, 2013, that a dividend be paid in accordance with WashTec’s existing dividend policy (plus a special dividend) and that 10.2 the shareholders authorize a further buy-back of the Company’s own shares, inasmuch as the Company’s current share buy-back program is 9.4 expiring in May.

8.6 Upon exercising the authority granted to it by the annual general meeting on May 5, 2010, the management board of WashTec, with the 7.8 consent of the supervisory board, resolved on August 14, 2012 to institute a program for buying back the Company’s own shares. In the pe- Jan Feb Mar April May June July Aug Sep Oct Nov Dec Jan Feb riod through May 4, 2013, the Company may buy up to 400,000 of its

WashTec SDAX own shares (corresponding to approximately 2.86% of the Company’s registered share capital) on the open stock market. The share buyback As of February 28, 2013, WashTec shares were trading at € 10,80. Since is a refl ection of the Company’s high cash fl ow and operating profi tabil- the beginning of 2013, the share performance is therefore at 20% and ity and is consistent with the return policy of WashTec AG. As of Feb- has outperformed the SDAX (14%) over this same period of time. ruary 28, 2013, the Company had acquired 40,423 of its own shares at an average price of € 9.14. Details regarding the buyback may be found in the investor relations section of the Company’s website, www.washtec.de.

WashTec Share The Group 33 Numerous changes in the shareholder structure ing shares reached the 3% threshold as June 19, 2012 and held 3.0% on that day. In addition, Leifi na GmbH & Co. KG reported that its vot- The WashTec AG shares are listed on the Prime Standard segment, and ing shares in WashTec AG exceeded the 3% threshold on June 27, 2012 the majority of those shares are held by institutional investors, who are and equaled 3.2% on that day. It further reported that its voting shares mostly from Anglo-American regions and the rest of Europe. The strong in WashTec AG exceeded the 5% threshold on December 27, 2012 and focus of WashTec products on matters involving environmental protec- equaled 5.6% on that day. Thus, 6 investors held at least 5% of the tion and sustainability is also refl ected in the stake held by shareholders, voting rights; 28% of the shares is held in free fl oat. According to the who select their investments on the basis of clearly defi ned sustainabil- defi nition used by Deutsche Börse, the free fl oat is even at 100%. ity criteria.

Shareholder structure Active investor relations work continued

EQMC Europe Development WashTec’s active investor relations work, which had been intensifi ed WashTec shares are Capital Fund plc. 16.2% signifi cantly in recent years, was continued in 2012. In addition to the covered by a number of independent analysts Sterling Strategic Value Limited 15.3% detailed quarterly reporting, the shareholders of WashTec AG were The Group The updated in a timely manner about all important events through disclo- Kempen Capital Free float 28.0% sures and postings on the Company’s website. In fi scal year 2012, the Management N.V. 11.1% management board continued to cultivate its contacts with sharehold- Leifina GmbH & Co. KG et al. 5.6% Diversity Industrie ers and journalists as well as with the fi nancial community and pre- Investment AG für Holding 3.0% sented the Company at road shows and in a number of individual dis- Bank of New York langfr. Investoren, TGV 5.4% Mellon Corporation 3.1% Lazard Frères Gestion S.A.S. 5.0% cussions with institutional investors in the most important fi nancial Setanta Asset Paradigm Capital Value Fund 3.8% capitals of Europe. On the occasion of its publications, the Company Management 3.5% held a fi nancial press conference as well as conference calls for analysts Source: Disclosure pursunt to the German Securities Trading Act (WpHG) and investors. The WashTec management board also appeared at numerous analyst and investor conferences, such as the German Invest- In fi scal year 2012, WashTec received numerous voting rights notifi ca- ment Conference and the Equity Capital Forum. tions pursuant to the German Securities Trading Act (WpHG): Setanta Asset Management Limited disclosed that its voting shares in WashTec WashTec shares are regularly analyzed and valued by analysts at repu- AG exceeded the 3% threshold on May 24, 2012 and equaled 3.5% on table fi nancial institutions (Berenberg, BHF, Hauck & Aufhäuser, HSBC that day. Diversity Industrie Holding AG likewise reported that its vot- Trinkaus & Burkhardt and MM Warburg).

34 The Group WashTec Share Key data on WashTec shares 2012 2011 2010 Annual closing price* € 9.03 7.35 9.14 Annual high* € 9.45 11.09 9.30 Annual low* € 7.20 6.46 7.30 Annual opening price € 7.16 9.10 7.61 Number of shares as of Dec 31 million 14.0 14.0 14.0 Free ﬂ oat as of Dec 31 % 28.0 43.2 43.2 Market capitalization as of Dec 31 €m 126.2 103.4 127.8 Development over the year % +26 –19 +20 (for comparison: SDAX) % +17 –15 +45 Earnings per share** € 0.72 –1.04 0.77 Dividend per share € 0.00 0.31 The Group The * Based on Xetra-closing prices ** Weighted average number of outstanding shares: approx. 14.0m

Additional information and contact:

Current data on WashTec shares as well as detailed information concerning the WashTec Group and its products can be found on the Company’s website at www.washtec.de.

In addition, any persons interested in the Company or its shares may also contact the Investor Relations Department at WashTec AG:

Telephone: +49-(0)821-5584-0 Fax: +49-(0)821-5584-1135 Email: [email protected]

We look forward to our continuing dialogue with you!

WashTec Share The Group 35 Revenue development

301.5 293.3 285.1 268.4 256.3

2008 2009 2010 2011 2012

36 Management Report WashTec AG and the Group 2012 Management Report

Business performance and background 39

Results of operation, net assets

and ﬁ nancial position 58

Additional performance indicators 72

Supplementary report 74

Legal Information 74

Opportunities and risk management 77

Outlook 84

37 Management Report 38 Management Report

Business performance and background 2012 ataGlance Asia/Pacifi North America Emerging Europe Core Europe Revenues:€ 11.9m; EBIT: € –0.7m Expansionoflocalstructures inChina is showingsuccess: StabledevelopmentoftheAustralian market Revenues€ 44.9m; EBIT: € –0.2m Improvement inrevenues andearningsasaresult ofthe successful Firstsignsofmarketstabilization,butnogeneral recovery Revenues:€ 13.7m; EBIT: € 0.8m EstablishmentofasubsidiaryinPoland Continuedfavorable marketandrevenue development Revenues:€ 246.5m; EBIT: € 19.2m Slightincrease inrevenues withfavorable earningsgrowth Stablemarketenvironment inGermany, AustriaandSwitzerland as fi Southern Europe aswellBenelux,France andGreat Britainremain key accountbusiness restructuring aswellpositivedevelopment ofthedirect and under pressure well asinthenorthernEuropean countries;individualmarketsin rstequipmentsold c AdjustedEBIT AdjustedEBIT AdjustedEBIT AdjustedEBIT Net cash flow Net cash flow Net cash flow Net cash flow Revenues Revenues Revenues Revenues EBIT EBIT EBIT EBIT Q1 2012 Q4 2012 Q3 2012 Q2 2012 € 0.4m € 0.1m € 1.9m € 3.4m € 3.7m € 4.5m € 4.8m

€ 5.1m € 7.4m

€ 7.8m

€ 9.8m

€ 12.2m

€ 66.7m € 84.4m € 74.5m € 75.9m Numerous off product portfolio inthe industry most comprehensive the carwashvaluechain; 1 erings along 1.1 Group structure andoperations Business performanceandbackground WashTec istheleading provider ofinnovativesolutionsforthecarwash drivers. chemicals andwaterreclaim systems.WashTec alsooff car washequipmentaswelltheassociatedperipheral devices,wash brokering theﬁ operator modelsand including themaintenanceofequipment, industry worldwide.The WashTec product range comprisesalltypesof systems andtherelated servicingare theCompany’smajorrevenue sive servicingpackagescoveringtheentire lifecycleoftheproducts sold, nancing for the equipment. The saleofroll-over wash nancingfortheequipment. ers comprehen- Operations businessandothers Chemicals Spare parts andservice New andusedequipment Revenues byproducts in€m,2012 Water reclaim systems Wash tunnels Commercial carwashequipment Self-servicewashequipment Roll-overwashequipment WashTec FinancialServices WashTec CarwashOperations Spare parts Call-out Service Full Service € 11.6m € 29.8m € 90.1m Business performance and background € 170.0m

Management Report

Management Report Management Report 40 Management Report

Business performance and background 1.1.1 Group andorganizational structure 1) 2) Control andproﬁ Companyconstitutesasub-group withBenelux WashTec Carwash Operations GmbH WashTec Financial ServicesGmbH Augsburg, Germany Augsburg, Germany Carwash Management B.V., Zoetermeer, Netherlands; Belgium, theproﬁ Netherlands; andWashTec BeneluxN.V., Brussels, WashTec BeneluxAdministrative B.V. Zoetermeer, to WashTec BeneluxB.V. Zoetermeer, Netherlands. t(loss)transfer agreement tsandlossesofwhich are booked Mark VIIEquipmentInc. Czech Republic WashTec CleaningTechnology s.r.o. Spain WashTec Denmark AS USA WashTec CleaningTechnology SA Sweden WashTec Nordics AB Spain WashTec Spain SA Austria WashTec Cleaning Technology GmbH Denmark 1)

Augsburg, Germany WashTec Holding GmbH Augsburg, Germany WashTec AG 3) 4) 5) 6) Company iscurrently inactive Includesoperating sitesinNorway 4) WashTec CleaningTechnology GmbH90%, Includes subsidiary WTMVII CleaningTechnologies Includessubsidiary WTMVII

Canada, Inc.inCanada WashTec HoldingGmbH10% 6)

Augsburg, Germany Augsburg, Germany WashTec Cleaning Technology GmbH AUWA-Chemie GmbH 3)

1) Poland WashTec Polska Sp.z.o.o. Australia WashTec Australia PtyLtd. (Shanghai) Co.Ltd., China WashTec CarCleaningEquipment United Kingdom California KleindienstLtd. Netherlands WashTec Benelux United Kingdom WashTec UKLtd. France WashTec France SAS Italy WashTec Italia Srl. 1)

5) 3)

As ultimateparent compa- sible forthestrategic management andcontrol ny, WashTec AG isrespon- The bulkofoperations isperformedbyWashTec CleaningTechnology As theGroup’s ultimateparent company, WashTec AG isresponsible for AUWA-Chemie GmbH,WashTec HoldingGmbHandWashTec Carwash AG isprovided where required. The subsidiariesofWashTec AG are fi WashTec AG WashTec HoldingGmbH WashTec CleaningTechnology GmbH Operations GmbH,theWashTec Group’s operational interests are held Carwash Operations GmbH. Operations GmbH.Profi Company’s subsidiariesandindependent foreign salespartnersare sup- GmbH, Augsburg, Germany. This iswhere thekeyproducts ofthe Cleaning Technology GmbH. Profi With theexceptionofAUWA-Chemie GmbHandWashTec Carwash WashTec Group are developed,manufactured, soldandserviced.The Since theCompanydoesnothaveanyoperations ofitsown,results out belowrelates mainlytotheGroup. Informationspecifi of operation, netassets,andfi by WashTec HoldingGmbH, whichisbasedinAugsburg, Germany. between WashTec AG andAUWA-Chemie GmbHaswellWashTec plied andsupportedbytheoperating company. ing GmbHandWashTec FinancialServicesGmbHaswellWashTec the strategic managementandcontrol ofallitssubsidiaries. nancial performance of its subsidiaries. As a result, theinformationset nancialperformanceofitssubsidiaries.Asaresult, tandlosstransfer agreements are inplacebetweenWashTec Hold- tandlosstransfer agreements are inplace nancialpositiondependsolelyonthe ctoWashTec The WashTec Group hasitsownsubsidiariesinallofthekeyCore Euro- AUWA-Chemie GmbHdevelops, manufactures andsellschemicalprod- AUWA-Chemie GmbH WashTec CarwashOperations GmbH WashTec Financial ServicesGmbH Group customized instrumentsforfi France, Belgium,Denmark/ Canada, Australia, China,Spain,theUK, Norway, Sweden,Poland, Austria,ItalyandtheNetherlandsare respon- WashTec CarwashOperations GmbHhandlestheoperation ofcarwash WashTec FinancialServices GmbHbrokers forcustomersoftheWashTec Foreign subsidiaries equipment onbehalfofandfor theaccountofitscustomers.The com- analyses. assembly inAugsburg. pany alsooff The Czechsubsidiarymanufactures componentsforfi ment. nents andassemblesequipmentforthemarketsinAsia/Pacifi The subsidiaryinChinaalsoservesasasupplierofcompo- ican market. pean, NorthAmericanandAsia/Pacifi in thefi products. Itreceives abrokerage commissionfrom thelendersinvolved subsidiary assemblescarwashequipmentprimarilyfortheNorth Amer- sible forsellingandservicingWashTec products. Furthermore, theUS ucts forcarwashequipmentusing itsowndistributionorganization within Germanyanddistribution partnersthroughout Europe. tities. nancingdeals;mostofthoselendersare commercial leasingen- ers numerous otherservices,suchasprofi nancingtheacquisitionofWashTec cmarkets.SubsidiariesintheUS, Business performance and background tabilityandsite nal cseg-

Management Report

Management Report 1.1.2 Locations

WashTec has a global The WashTec Group has a global presence with over 1,600 employees presence with over 1,600 worldwide and subsidiaries in all major markets including Core Europe, employees worldwide North America, and Asia/Paciﬁ c. Furthermore, WashTec has a broad network of independent sales partners and is thereby represented in around 60 countries in total throughout the world.

At the start of 2012, another company, WashTec Polska Sp. z.o.o., was formed in Poland, with its registered offi ce in Warsaw. This allows WashTec to support its Polish customers locally.

1.1.3 Production, sourcing and logistics Denver, CO

WashTec has an international procurement and production chain, which consists of subsidiaries in China, the Czech Republic, the US and Germany. The ﬁ nal assembly of various pre-fabricated components and parts, some of which are manufactured by the Czech subsidiary, accounts for the majority of work performed at the production sites in Augsburg, Denver and Shanghai. WashTec uses modern production methods to produce all of its products. The Company is able to make Management Report Management capacity adjustments at its main production site in Augsburg by making use of its annual working time models and by increasing and decreasing the number of temporary workers.

Component manufacturing The WashTec Group currently produces its entire product range for in China and Czech Repub- Europe in Augsburg, Germany. In addition, individual components have lic; Final assembly in Augs- been partially sourced or manufactured in China and the Czech Repub- burg (Germany), Denver (USA) and Shanghai lic. Final assembly of car wash equipment is carried out in Denver (China) (USA) for the North American market and in Shanghai (China) for the markets in the Asia/Paciﬁ c segments.

42 Management Report Business performance and background Recklinghausen Nyrany

Grebenau

Augsburg

Shanghai Management Report

Headquarters Augsburg WashTec/Mark VII direct

Major sales partners Production sites

Business performance and background Management Report 43 Management Report 44 Management Report

Business performance and background 1.2 Managementandcontrol The Company hasconcludedlong-termsupplyagreements withthe The CompanyhastwoadditionalsmallersitesinGermanyproducing The management board, initsownauthority, managestheCompany, As theCompanywhichmanages thegroup, WashTec AG determines AktG), WashTec AG hasatwo-tiered managementandsupervisory As required bytheGermanStockCorporations Act(Aktiengesetzor (Grebenau). Company’s internalcontrolling pursues this challengethrough avalue- visory board. WashTec’s managementboard usuallyhastwomembers. control unitsfortheentire group (Recklinghausen)andwashchemicals controlling strategy, target ratios formanagement andavarietyofmea- oriented management system.This system encompassesanintegrated ority goalofWashTec istosustainablyincrease shareholder value.The cation andcommunicationsbetween theCompany’simportanttarget of sixmemberspursuanttothe ArticlesofAssociation,advisesandsu- determines itsstrategic positioningandpursuesthegoalofeff and order fl all organizational units–from order clarifi parts withinEurope isperformedcentrally from thewarehouses ofex- Sourcing ofsparebined undertheumbrella ofasingleresponsible unit. board andsupervisoryboard defi ments andeffi pervises themanagementboard. increasing theCompany’svalue.The supervisoryboard, which consists suppliers ofkeycomponents.IntheGroup’s supplychainorganization, sures forensuringasustainable growth inprofi structure whichiscomposedofthemanagementboard andthesuper- groups, particularlythecapitalmarketand theshareholders. Ahigh-pri- ternal logisticserviceproviders. the corporate strategy andseniormanagementdecisions,resource allo- owinproduction, todeliveryoftheequipment–are com- cient capital management. The Company’s management cientcapitalmanagement. nethecorporate strategy andthe tar- cationtosourcing ofparts ts,effi ciencyimprove- ectively 1.3 Carwashmarket The numberofnewlyregistered carshadbeencontinuously increasing The monitoring iscarriedoutthrough regular committeemeetingsheld Automotive Markets Database–2010). (Sources: HSBCGlobalResearch “The World in2050”–January2011; CAR UniversityDuisburg-Essen – 2010/2012;DataMonitorEuropean Economy: Increase inthenumberofnewlyregistered carsandlabor Key marketdrivers detailed duediligenceprocess, whichislikewisereviewed atthearea capacity planning,regular reporting andforecasting, ongoingmarket again inmanyregions around theworld;however, the European car average growth rates were beingrecorded inEasternEurope andAsia, agement meetingswithallofheadstheoperating companies,strate- and managementboard levels. analyses, andregular unitrevenue, sales,order backlogand market market is sluggish at present. The vehicleinventoriesare alsoexpected market issluggishatpresent. nomic crisis,thenumberofregistered carshassince startedtorise in particular. Afterthedrop incarsalesdueto thefi board meetings withthedivisiondirectors, regular internationalman- in allreporting units.These includemonthlyextended management some newmomentum andelevatedemandfor carwashequipment separately andmonitored throughout theestablishmentperiod.Port- share analyses. Inthisconnection,allinvestmentprojects are reviewed gets resulting therefrom, whichare establishedatallbusinessunits gic andannualplanningincludinginvestmentplanning,production and to grow continuously. These factorscould givethecarwashbusiness throughout theworlduntilfi through alloftheGroup’s levelsofresponsibility. folio optimizations,suchascorporate acquisitions, mustundergo avery costs, risingpercapitaincome nancialandeconomiccrisisbegan. Above- nancialandeco- The factorspromoting demands fortechnology vehicles andthegrowing and convenience automated carwashesare the increasing numberof The importanceoffresh waterasalimitedand precious resource and As laborcostsincrease, theriseinpercapita incomeandtherapidly Technology/Convenience: Increasing demandswithrespect tospeed, Compared tomanualwashing,automatedcarwashgenerally yieldsbet- Environmental issues:More stringentrequirements and environmental awareness are increasing around theglobe.Signifi cause othermaterialssuchasshampooandoilsremain inaclosedcycle of automatedcarwashinginthefuture. In addition,automatedcar and thuscannotendupinthesoilorgroundwater. reduction inwaterusageandtheneed to avoidpollutinggroundwater process in anautomatedcarwashisfarlesstime-consumingthanman- resulting transition from manual washerstoautomatedcarwashing increasing vehicleinventoryintheEmerging Marketsaswellthe wash equipmentwhichinclude waterreclaim systems. with lubricantsandwash-chemicals are theimpetusesforinstallingcar ual washes.Risingexpectationswithrespect towashresults, combined washing isenvironmentally friendlybecauseitsavesfresh waterandbe- with lowerwaitingandthroughput times,willmeangreater acceptance will openthedoortosustainedmarketpotentialintheseregions. ter washqualityandislessabrasive tocarfi convenience andqualityofthewash implementation ofenvironmental lawsandregulations – fresh water asalimitedresource nish.Furthermore, thewash cant 1.4 Corporate strategy andgoals The Group’s corporate strategy isaimedatmaintainingitspositionas The Company iscarefully monitoringtheseandothertrends inorder to Additional trends andinfl fi value chainofcarwashactivities. This includes theentire equipment and care. Insomecases,WashTec alsooperates entire carwashsystems a current installedbaseofwellover30,000 carwashsystemsworld- itself. With is basedonover40yearsofexperience inthecarwashsegment. portfolio aswellabroadly diversifi react to changed circumstances asquicklypossible. worldwide inthefuture. WashTec’s marketandtechnologyleadership wide, theCompanyisgenerating sustainable revenue overtheentire the leadingsupplierofinnovative solutionsforthecarwashbusiness nancingmodelsandthesupply ofspecialchemicalsforcarwashing Demographic development: Apopulationthatisincreasingly aging Demographic development: Alternativeindividualmobilityconcepts(e.g.,carsharingmodels): Alternativevehicledrivetrains: Untilnow, noclearfavoritehas (e.g., hybrid/electric)andthedevelopmentcontinuestoprogress – Vehicles, alsorequire whichare setasideforthisarrangement, emerged astowhichdrivetrain conceptwillprevail inthefuture albeit slowly–whichmeansthatitremains unclearwhere “vehicle however, thatthegasstationwillremain importantinthemid-term. refueling andwillbewashedbysuppliersorusers. should triggermore demandforproducts thatare simple touse. fuelling” willtakeplaceinthefuture. The Companyisassuming, uences: edservicepalette,assistancewith Business performance and background

Management Report

Management Report Management Report 46 Management Report

Business performance and background WashTec istheonlysupplierinindustrywithapresence on allcon- expansion infuture growth regions ofemerging economiesinparticular, acceptance ofautomated washingonthepart ofthecustomers.The access through direct salesandserviceactivities.The core businessis increasing environmental awareness and the tighteningofregulations nifi ing MarketssuchasAsiathatthe numberofvehicleshasincreased sig- located inEurope andNorthAmerica,butthestrategic goalisonheavy with afocusonAsiaandEastern Europe. Itisspecifi the highsustainability oftheproducts itoff for carwashing in somecountrieshavebenefi tinents inaround 60countries,whichaff sourcing production and leverage ofglobal of efficiencyfocus; Proven track record cantly in the recent past. Accompanyingthisisalso anincreasing cantlyintherecent past. automatic carwash acceptance of based onincreasing Growth potential creation shareholder value Strong focuson and cashflows; High profitability friendly products environmentally in sustainabilityand Strong competence relationship excellent customer of entryand high barriers installed basewith through largest Sustainable revenues ords itgreat regional market ers. Basedonitstrack record tedtheGroup becauseof carwash expertise know howof> 40 years Strong andlong-term carwash operations portfolio for complete product competitive and Innovative, callyintheEmerg- sales andservice through direct own footprint with strong regional Operates globally Growth through increased innovation, furtherinternationalization 1 1.4.1 Corporate goals The focus ofthebusinesspolicyisonsatisfying,andcreating added Further optimizationofcoststructure through intelligentand 2 Resolute furtherdevelopmentofthe HSE Standards (Health, 4 Expansion ofourmarketposition in NorthAmerica. 3 WashTec willusethevarious marketopportunitiesanditsownstrong WashTec isthemarket leaderinthecarwashbusiness.The Company’s value for, ourcustomers.This appliesbothto theoperators andtothe customers, shareholders andemployees.This specifi encompasses targeted internationalmarketcultivation,particularlyin actual carwashcustomers. and ourlarge installedbaserepresent highbarrierstomarketentry a uniquenetworkofcustomers.The capitalexpenditures required as aninnovativeandlong-establishedcompany, WashTec possesses manner inorder toexpanditsownpositioningintheinterest ofits market positionaswellitssolid balancesheetstructure inafocused goal istomaintainthismarketleadership.Inadditioncontinued fu- following points: to continuesustainablyincreasing profi for potentialcompetitors.The corporate goaloftheWashTec Group is fore create sustainableandfavorable profi to eff the Emerging Markets.“Operational Excellence”Programs are intended thisgoalalso ture growth andbringingproduct innovationstomarket, Safety, Environment) byimplementingthe WashTec SafetyRules of businessandgreater professionalization oftheprocesses. and increasing thequality standards oftheGroup. international sourcing andproduction. ectively design idealprocesses thatraise productivity andthere- tabilityinthecomingyears. tabilitygrowth. callyincludesthe able profi ket cultivationandfavor- ship through targeted mar- Maintain marketleader- tability growth tability 1.4.2 Financial quantitativetargets andperformanceindicators The main instrumentsusedfortheCompany’splanningandmanage- Additional performanceindicators WashTec regularly carriesoutsurveyswithwhichtheCompany evalu- Key figures fortheCompany’splanningandmanagement ates customersatisfactionwith itsproducts andservices.The surveys have shownthatthecustomers surveyedare consistentlyverysatisfi indicators: ment systemar with WashTec’s performance. Customersatisfactionsurveysand analyses Employeeturnoverandaverage period ofservice ROCE(EBIT/(totalassets–short-term liabilities–cashand Cash fl Equityratio (equitycapital/balancesheettotal)andgearingratio Net-current assets(shorttermtrade receivables +inventories– perbusinesssegment Operating results (EBIT) EBITmargin (EBIT/revenue) (net fi equivalents) short termtrade payables) nancialindebtedness/equitycapital) owfrom operating activities e thefollowingfi gures and additionalperformance ed 1.5 Declaration on corporate management The managementandsupervisory board ofWashTec AG identifywith The principlesofresponsible andgoodmanagement dictatetheactions 289a (1)oftheGermanCommercial Code (HandelsgesetzbuchorHGB) (including corporate governancereport) Comparison fi Cash flow from operating activities in €m €m in activities operating from flow Cash Gearing** 0.10 cashandequivalents) on thebasisofequaldividendpayments **** “Return OnCapitalEmployed”=adjustedEBIT/(totalassets–short-term liabilities– Shorttermtrade receivables +inventory–short-term trade payables *** ** Net fi * Comparative fi Multiple yearcomparisonofkeyplanningandmanagementfi ROCE in %**** €m*** in assets current Net % in ratio Equity % in margin EBIT EBIT in €m entitled “Employees”. corporate management and supervisionaimedatachieving asustain- corporate governanceoftheCompany. on itsmanagementoftheCompany. The managementandsupervisory declaration represents themanagementboard’s report pursuanttosec. able increase inshareholder value. boards hereby simultaneouslyfi Differences possible due to rounding-off rounding-off to due possible Differences turnover andaverage periodofserviceare setforthinthesection the objectivesof theCode,whichencourage responsible, transparent the GermanCorporate GovernanceCode (the“Code”)concerningthe taken bythemanagementand supervisoryboard ofWashTec AG. This nancialdebt/equity gures covering multipleyearsshowingemployee gures adjusted asperIAS 8,seeNote.7oftheConsolidatedNotes letheirreport pursuanttosec.3.10 of 2012 Business performance and background Management Report 38.6 43.5 38.6 46.0 19.2 73.1 75.5 68.2 17.2 29.1 23.1 17.2 17.0 –. 7.6 –3.56.4 0.32 0.28 16.3 19.9 16.3 –04 20.3 –10.4 2010 2011* gures 47

Management Report Management Report Supervisory board ex- WashTec AG isimplement- dations oftheCode committees formed committees panded tosixmembers; ing mostoftherecommen- 48 Management Report

Business performance and background 1.5.1 Corporate andmanagerialstructure The Declaration ofConformityisalsopublishedonWashTec’s website Any deviationsfrom individualrecommendations oftheCodewere dis- As aresult oftheexpansionapproved bytheannual general meetingon Mr. Buschare ontheauditcommittee, whereas Dr. Liebler, basedonhis May 10,2012,thesupervisory board isnowcomposedofsixmembers Expert”. Mr. Busch actsaschairman ofthepersonnel committee and WashTec’s websitefor aperiodofatleastfi WashTec AG’s managementandsupervisoryboards regularly givetheir Within thescopeofoverall responsibility of the supervisoryboard, Supervisory board closed intheDeclaration ofConformity, issuedbythemanagementand dations andsuggestionsoftheCode,asamendedonMay15, 2012, cally applycorporate governancewhere itsuitsthesize,typeand dations oftheCode.Instead,Companywillcontinuetosystemati- each memberperforms certaindutiesonthecommittees basedonthe effi attention tosatisfyingtherequirements oftheCode.Aftercareful con- and anominationcommittee.The committees are charged withthe according totheArticlesofAssociation. Inorder toperformitsduties have beenimplemented. member’s expertise. Dr. Liebler(chairman),Mr. Große-Allermann and powers whichhavebeendelegated tothembythesupervisoryboard. board meetings.The committeesalsoexercise somedecision-making pervisory board establishedanauditcommittee,apersonnelcommittee supervisory board onDecember11, 2012. structure ofWashTec. However, insubstantialrespects, therecommen- sideration, WashTec AG decidednottoimplementalloftherecommen- special expertise andexperience,alsohandles therole of the“Financial governance thatare nolongercurrent willremain available on under InvestorRelations(www.washtec.de). Declarations oncor task ofpreparing thetopicsanddraft resolutions forthe supervisory cientlyandhavingregard totherequirements oftheCode,su- veyears. porate 1.3 of theCompany‘sinternalrulesofprocedure forthesupervisory The supervisoryboard overseesandadvisesthe managementboard asit The supervisoryboard monitors the Company’scompliancewith legal The supervisory board already largely satisfi The composition ofthesupervisoryboard isbasedontheCompany’s At regular intervals,thesupervisoryboard holds discussionswithre- Messrs. LacherandPedrazzini alsoserveasadditionalmembers.The Group. The annualfi Dr. Liebler andDr. Hein.Detailsregarding thedutiesofcommittees WashTec AG’s annualfi When proposing candidatestothecompetentelectionbodies,noper- views theCompany’squarterly andsemi-annualreports andapproves offi composition andintendstofactorintheapproved goalsduringthe composition dance withitsrecommendation undersec.5.4.1 oftheCode,su- corporate purpose,thesizeofCompany, thecompositionof can befoundinthereport ofthesupervisoryboard. its strategy andtheimplementationthereof. The supervisoryboard re- manages theCompany’sbusiness. board). member resigns before hisorhertermhasended.The sameruleapplies next supervisoryboard electionorintheeventasupervisoryboard norms, regulations andinternalcorporate guidelines(compliance). Its resolution oftheannual general meetingpursuanttosec.172 AktG. pervisory board resolved tosetspecifi nomination committeeconsistsofMessrs.Große-Allermann (chairman), spect totheCompany’sbusiness developmentandplanningaswell sons willbeconsidered whowouldturn75duringtheregular termof staff upon theirapproval bythe supervisoryboard, inasmuchasthere isno to proposals madeintheeventofacourt-ordered appointment. ceasamemberofthesupervisoryboard oftheCompany(seesec. andonthe internationalbusinessactivityofWashTec. Inaccor- nancialstatements ofWashTec AG are adopted nancialstatements,aswell those ofthe cobjectiveswithrespect toits esthesegoalsinitscurrent The supervisory board hasadoptedinternalrulesofprocedure govern- The managementandsupervisoryboards cooperate closely inthebest The supervisory board isgovernedbyinternalrulesofprocedure, inpar- The managementboard ofWashTec AG, whichnormallyconsistsoftwo Company’s strategic focus,forplanning andsetting theCompany’s bud- Management board views, amongotherthings,thesystemofcompensation/remuneration of resolutions andthemannerinwhichconfl cooperation withthesupervisory board, andbearsresponsibility forthe quired toactintheCompany’s bestinterests. The orientationpursued addition, thesupervisoryboard adoptsresolutions on,andregularly re- and continuestobeassured atalltimes. ment board, establishthemattersneedingapproval ofthesupervi- prescribe themattersthatare reserved fordecisionbythefullmanage- ing theworkofmanagementboard; in particular, theserulesdefi handled. interests oftheCompany. No confl measures –are subjecttosupervisoryboard approval. major signifi management board aswelldefi pendent adviceto,andoversight over, themanagementboard hasbeen bers ofthemanagementorsupervisory board requiring disclosure to ble forspecifying theprinciplesofCompany’s corporate policiesin rected toward asustainedincrease inshareholder value.Itisresponsi- by themanagement board intheexercise ofitsresponsibilities isdi- members, isacorporate managerialbodyoftheCompanyandisre- sory board andsetquorumsformanagementboard resolutions. scope ofresponsibilities furtherincludes appointingthemembersof the areas ofresponsibility forthemembersofmanagementboard, ticular pertainingtothenoticeandconductofmeetings, adoption that system(sec.4.2.2oftheCode).Managementboard decisionsof for themanagementboard, includingthemaincontractual elementsof the supervisoryboard arose. The supervisoryboard’s provision ofinde- cance–forexample,acquisitions,divestitures andfi ningtheirareas ofresponsibilities. In ictsofinterest onthepartofmem- ictsofinterest shouldbe nancing ne Vieweg, commenced onJanuary1, 2013,themanagementboard was Vieweg isresponsible forFinances,QualityControl, IT, Personnel, In- Michael Busch,whofi Pursuant tosec.15aoftheGerman SecuritiesTrading Act(Wertpapier- From the resignation ofMr. KrügerandMr. Khorram, whichwentinto Sales, Service,SupplyChain,Product Management andDevelopment Reported securitiestransactions (“Directors’ Dealings”) vestor Relations,LegalandCorporate Audit. ceeds thesumof €5,000duringasinglecalendar year. Nosuchtransac- extent thevalue ofthepurchase andsaletransactions executed by that corporate guidelinesordirectives, anditworks toward compliance with compliance withlegalandregulatory requirements andwith internal divisions andservesasspokesman ofthemanagementboard. Mr. eff compliance, aswellriskandmanagementsituation,which are of of themanagementboard startedtheirwork,Mr. Buschcontinuedto board memberandpersons closelyrelated tohimorherreaches orex- heads. Inaddition,themanagementboard isresponsible forensuring board haveanobligationtodisclosetheir purchase orsaleofthesecuri- handelsgesetz orWpHG),members ofthemanagementandsupervisory relevance totheCompanyandGroup. planning, theCompany’sfi board at regular intervalsandinatimelycomprehensive manner month transition period.Mr. Buschreturned tothesupervisory board at made upofonlyoneperson,thepostedsupervisoryboard memberMr. new managementboard members,Dr. Jürgen Rautert andDr. Stefan serve asspokesmanofthemanagementboard foranadditionaltwo- get, forallocatingresources andperformingoversightoverdepartment get, with respect toallquestionsofstrategy andstrategic implementation, tions were reported toWashTec AG during thefi ties inWashTec AG orany fi these byallcorporate group affi the startofMarch 2013.Mr. Rautertisresponsible for managingthe ect attheend ofthedayJuly31, 2012,untiltheappointmentof lledinduringthistime.Afterthenewmembers nancialpositionandresults ofoperations, nancialinstruments basedthereon, tothe liates.Itreports tothesupervisory Business performance and background scalyearunder review.

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Business performance and background The annualgeneral meetingofshareholders ofWashTec AG takesplace All directors’ dealingsare publishedintheInvestorRelationssectionof 2010, thiscompanyheldashare of2,142,868 (15.33%)ofthevoting As ofDecember31, 2012,MassimoPedrazzini, whoisamemberof (Deutsches Eigenkapitalforum) inNovember. Jens Große-Allermann servesasamemberofthemanagementboard of Mr. Pedrazzini isalsoChairmanofthe Board ofDirectors ofSterling Company’s quarterlyfi Company. The Company’sinvestorrelations activitiesinvolveregular Investmentaktiengesellschaft fürlangfristigeInvestoren TGV, whichpur- WashTec AG reports toitsshareholders intheformofquarterly fi WashTec AG asofDecember31, 2012.The supervisory board member Strategic Value Limited.According toitsnotifi Shareholdings ofthemanagementandsupervisoryboards Shareholders andtheannualgeneral meeting cial reports, whichprovide detailedinformation onbusinessdevelop- distributable profi ment Conference inSeptemberandtheGermanEquityForum ments aswellthefi in thefi board and supervisoryboard membersdidnothold anyshares in rights inWashTec AG asofMarch 30,2010.The othermanagement meeting adopts resolutions regarding, inter alia,theappropriation of suant tothenoticeofJuly31, 2009,heldasofthatdateashare making up 758,358votingrights(5.43%)ofWashTec AG. which hehadacquired priortohiselectionthesupervisoryboard. the Company’swebsiteatwww.washtec.de. the WashTec AG supervisoryboard, held2,251shares ofWashTec AG, tions atanalystandinvestorconferences, suchastheGermanInvest- ference callforanalysts.The managementboard alsogave presenta- talks withanalystsandinstitutional investors.Inaddition,whenthe rsthalfofthefi t, theratifi t, nancialsituationandresults ofoperations ofthe gures are published,theCompanyholdsacon- scalyear, usuallyinMay. The annualgeneral cationoftheacts takenbythemanage- cationdatedApril1, nan- 1.5.2 Riskmanagement These systemsare continuouslydevelopedand adapted tochangesin Commercial Code(HGB) ontheinternalmonitoringand riskmanage- German andinEnglish.This meansthatWashTec AG’s homepageoff Company’s capitalare resolved exclusivelybythe annualgeneral meet- Dealing responsibly withcommercial riskisoneofthebasictenants Details of risk management are found in the Risk Report, whichispart Details ofriskmanagementare foundin theRiskReport, In 2012, as in years past, WashTecIn 2012,asinyearspast, AG placesallof thedocuments, WashTec AG off of the Management Report. The ManagementReport containsthe of theManagementReport. does notbroadcast itsannualgeneral meetingontheInternetanddoes and company-specifi a comprehensive informationplatformforbothnationalandinterna- posal whichpermitittoidentify, evaluateandmanagetheserisks. ment systemas itrelates toaccountingmatters. report required undersecs.289(5)and315(2)no.5of theGerman ments regarding suchrisks. not electronically transmit noticesofsuchmeetings. but boundbytheinstructionsissuedshareholder inquestion. ing ofshareholders andare implementedbythemanagementboard. ment andsupervisoryboards, andtheselectionofCompany’saudi- good corporate governance.The managementboard has intra-group granting of authoritytoengageinmeasures eff which were relevant toitsannualgeneral meeting,onthe Internetin the supervisoryboard regularly astoexistingrisksanddevelop- The managementboard informs the businessandlegalenvironment. tional investorswithrespect toitsannualgeneral meeting.WashTec AG the optionofauthorizingaproxy, whoisappointedbytheCompany tors. AmendmentstotheCompany’sArticlesofAssociationand ers itsshareholders, priortotheannualgeneral meeting, creporting andmanagementsystemsatitsdis- ecting changes tothe ers All documentsrelevant are available fordown- meeting ofshareholders to theannualgeaneral loading from theInternet All oftheexecutive Compliance organization of Ethics by theirsignature edged theWashTec Code managers haveacknowl- is constantlyrefi ned 1.5.3 Compliance The strategic guidelinesandtheWashTec CodeofEthicsformthebasis The compliance organization isthereby continuouslyrefi Company’s assets.The CodeofEthicsisbindingonallemployeesthe Ethics is renewed regularly. Providing comprehensive andtimelyinformationtoshareholders and WashTec Group throughout theworld,aswellmembersof WashTec hasestablished acomplianceorganization, whichisintended of Ethicsbytheir signature. This acknowledgement oftheCode of complying withtheprohibition oninsider trading, andprotecting the dealing withsuchmattersascompliance withcompetitionlawand of theCompany’scomplianceprogram. The CodeofEthics contains control at WashTec. The detailedreport oninternalcompliancewithin organization asamajorelementofthestructure ofmanagementand concerning corporate governance(e.g.,theWashTec CodeofEthics) ernance report (asapartoftheAnnualReport)andfurtherdocuments of WashTec AG, allofitsDeclarations ofConformity, itscorporate gov- anti-corruption law, handlingdonations, avoidingconfl are available fordownloadfrom theInvestorRelationssectionat and byholdingpress conferences onitsfi management board. The members ofthesupervisoryboard observe binding rulesonlegallycompliant conductaswellprecise directions board. Inaddition,adetailedcompliance report isprepared each year. proved. The managementandsupervisoryboard regard thecompliance hoc disclosures. Allnoticesanddisclosures, theArticlesofAssociation ness situationanditsresults ofoperation through fi stakeholders isahighpriorityforWashTec. WashTec reports onitsbusi- www.washtec.de. tives andoffi these rulestothe extenttheyare applicabletothem.All oftheexecu- the Group isthusaregular partofthemeetings ofthesupervisory to ensure thatallofthelegalandregulatory requirements are observed. through conference calls.WashTec alsopublishespress releases andad- cersthroughout theGroup have acknowledgedtheCode nancialstatementsaswell nancialreporting ictsofinterests, nedandim- “WashTec AG, Augsburg The text below isthewording ofthedeclaration ofconformityrequired The shareholdings ofmanagementandsupervisoryboard membersare The listofinsidersmandatedundersec.15bWpHGismaintainedand up- The followingexceptionshaveappliedandcontinue toapply: The managementboard andsupervisory board declare thatWashTec AG has 2012 andpublishedintheInvestorRelationssectionofCompany’s Any transactions byexecutivesandoffi Code” (“Code”) (version datedMay26,2010)from thedateonwhich they Code ofthe“GovernmentCommission oftheGerman Corporate Governance Declaration of Conformity undersec.161AktG Declaration ofConformity dated onaregular basis.The individualsrecorded inthelistofinsiders are requirements ofsec.6.6theCodehavebeenmet. published bothintheCompany’sAnnualReportandInvestor Relations ings”), whichmustbereported, are published.The individualsatWashTec, informed oftheirresulting duties. sued bythemanagementboard andsupervisoryboard onDecember11, section oftheCompany’swebsiteatwww.washtec.de, provided thatthe spect todirectors’ dealings. website atwww.washtec.de. under sec.161oftheGermanStockCorporation Act(AktG),asitwasis- who are aff and willinthefuture complywiththeJune15,2012version oftheCode. complied withtherecommendations intheGermanCorporate Governance ing thesupplementtoDeclaration ofConformity ofAugust3,2012) issued theirlastDeclaration ofConformity onDecember 22,2011(includ- Pursuant tosection4.2.3 sentence3oftheCode, themonetary compo- German StockCorporation Act(AktG).As aprecautionary measure, the appointed to the management board pursuant to sec. 105para. 2ofthe appointed tothe managementboard pursuant tosec. ommendation also appliestomembers ofthesupervisory board whoare clude bothfi nents ofthecompensation ofthemanagement board members should in- ected thereby, are alsoinformedabouttheirdutieswithre- xed andvariable elements.Itisnotclearwhether thisrec- cers(so-called“Directors’ Deal- Business performance and background

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Business performance and background SincetheCompany’s supervisory board hadconsisted ofonlythree mem- Section4.2.1 sentence1oftheCode provides thatthemanagement board Althoughupuntiltheappointmentofnewmanagementboard mem- July 27, 2013,isreceiving onlyfi Mr. MichaelBusch,whowasappointedto the managementboard pursu- Company’s ArticlesofAssociationandsection2themanagementboard for hisworkonthemanagementboard, theSupervisory Board member, should consistofseveral persons. Inaccordance withsection7.1 ofthe spect tothenumber ofsupervisory board members (June18,2012),no section 4.2.3para. 2oftheCode. sation, there was,however, nobasisforconductinganevaluationovera would notbeappropriate giventhatsuchcomponentsare generally in- the successor’sappointment. tended tobebasedonanevaluationoveranumberofyears according to ability totransact business,aninterimsolution neededtobefounduntil arrangement wasthattheprevious managementboard members agreed to ant to sec. 105para. 2AktGfrom July28,2012through nolaterthan ant tosec. of thesupervisory board member, Mr. MichaelBusch.The reason forthis only oneperson onthemanagementboard inconnection withtheposting committees hadbeenformed onorbefore thatdate (sections5.3.1, 5.3.2 component. Giventhebrevity ofthetermoffi complies withtherecommendations oftheCode. resign asofJuly31, 2012andthatinorder tomaintaintheCompany’s management board members, Mr. RautertandMr. Vieweg, there has been more persons. From thedatethatMr. KrügerandMr. Khorram resigned internal rulesofprocedure, themanagementboard shallconsist ofoneor management board andsupervisory board disclosethatasconsideration number ofyears (section4.2.3para. 2oftheCode). The newmanagement management board contracts aspartofthemanagement board compen- bers upuntilthedate ArticlesofAssociationwere amendedwith re- board contracts provide for managementboard compensationthat fully bers there hadbeenvariablecompensationcomponentsstipulatedinthe eff ective 12midnightonJuly31, 2012untiltheappointmentofnew xed compensationwithoutanyvariable ce, avariablecomponent Augsburg, December11, 2012 Additional information aboutcorporate governancecanbe foundinthe Management Board and Supervisory Board WashTec AG annualreports under thecorporate governance report orthedec- laration ofcorporate management andon theInternetat www.washtec.de” For theduration ofMr. Busch’spostingonthemanagement board, the Notwithstanding section5.4.6 sentence3oftheCode, theworkofchair- Association shouldberecommended tothe annualgeneral meetingof Committee, Personnel Committee. felt itwasadvisabletoappointanothermemberofthesupervisory board section 5.4.2oftheCode. sory board willonceagainseektocomplywiththerecommendation of shareholders work ofthebody. InitsmeetingonMay24,2012,thenewsupervisory to serve as thechairperson ofthePersonnel Committee forthetransitional to beselectedquickly. Underthesecircumstances, thesupervisory board the current specialsituation,newmanagementboard members wouldneed the Code –serve asthechairmanofcommitteewhichhandles the Code, formedthefollowingcommittees:Nomination Committee, Audit acting supervisory board chairman willnot–contrary tosection5.4.2of and 5.3.3oftheCode). Suchastepwas viewed asunnecessary giventhe contain asuitableprovision. The managementboard andthesupervisory of theArticlesAssociationrelating tothenumberofsupervisory board management board contracts. This arrangement isjustifi number ofmembers existingatthattime andinasmuchasthesupervisory members onJune18,2012,theprevious compensation systemdidnot had notformedanycommittees priortotheadoptionofamendment ing thecommitteeshasnottodate beenfactored intothesupervisory board, which consistsofsixmembers andadheres totheguidelinesfrom board believed thatformingcommitteeswouldhaveonlycomplicatedthe board are reviewing whethersucharelated amendmenttotheArticlesof board member’scompensation.Sincethe supervisory board, duetoitssize, period. OnceMr. Buschhasreturned tothesupervisory board, thesupervi- ed becauseunder 1.5.4 Remuneration report The three actingmembersofthe managementboard, whowere inof- The remuneration ofthe WashTec AG managementboard aswellthe The remuneration ofthe members ofthemanagementboard comports The remuneration system waslastdiscussedbythesupervisoryboard at The overall remuneration ofthemembersmanagementboard is 2012 untilnolaterthan27July 2013,willreceive strictlyafi fi Supervisory board memberMr. MichaelBusch, whowasappointedto Fixed salary Remuneration ofthemanagementboard duties oftherespective managementboard member, hispersonalper- components, andingeneral, itdirectly aimsatthesustaineddevelop- as welltheCompany’seconomicsituation,successandperspectives and withtherecommendations andsuggestionscontainedintheCode. have a multi-year basis of assessment, wouldnotbeappropriate. have amulti-year basisofassessment, in theaggregate, andthattheydonotencourage thetakingofunrea- ment oftheCompany. Allofthecomponentsremuneration are struc- its meetingofDecember11, 2012andadoptedbyresolution, including board. Inviewofthebrevity ofthetermoffi made upofmonetaryandnon-monetaryaswellfi system is,asawhole,structured insuchawayastotakeaccountofthe structure ofthatremuneration are setbythesupervisoryboard andreg- sonable risks. ularly reviewed by it. InconformitywiththeCode, theremuneration ularly reviewed byit. which according tosec. 4.2.3 sentence4oftheCodeshould generally with thestatutoryrequirements oftheGerman Stock Corporation Act without anyvariablecomponents forthisworkonthemanagement for thefuture. formance, andtheperformanceofmanagementboard asawhole, the managementboard pursuanttosec.105(2)AktGfrom July28, tured insuchawaythateachofthemis reasonable bothbyitselfand the majorelementsofremuneration (sec.4.2.2para. 1oftheCode). ceduring thecourseof 2012,were paidafi xednon-performance re- ce,avariablesalary, xedandvariable xedsalary Khorram, includedannuallyrecurring components linkedtotheperfor- With respect tomanagementboard remuneration, itshouldbenoted Short-term variableremuneration –performancerelated visory board. The newmanagementboard contracts provide foraman- of themanagementboard]: € 693,567). The fi components. The variableremuneration componentsof the former other things,are tiedtotheCompany’sfi cess. Ontheotherhand,variablecomponents–which,among duties, toactinaccordance withthewell-understoodbestinterests of of remuneration ensure thatthemanagementboard membersreceive agement board salarywhichfullyaccords withtherecommendations of as determinedpursuanttoIFRS, aboveabaseamountsetbythesuper- alignment ofinterests betweenthemanagementboard andtheother lated salarytotaling€ 573,194 in2012(prioryear[twoactingmembers mance ofthebusiness.They tracked theearnings pershare aftertaxes, members ofthemanagementboard, Thorsten Krüger andHouman basic compensationpermittingthem,astheygoaboutdischarging their reimbursement forthecostsofasecondresidence. The fi in particular, oftheprovision ofcompanycars, insurance coverage and management board membersalsoincludesbenefi business performance ofWashTec AG. The short-term variable annual incentive mechanism forthemanagementboard which is tiedtothe multi-year basisofassessment (sec. 4.2.3para. 2oftheCode),even board commenced, noneofthemanagementboard contracts hada stakeholders. salary is basedonannual strategic and/orfi without becomingdependentonpurely short-term objectivesforsuc- targets tobedetermined bythesupervisoryboard. This shouldserveas term andlong-term componentslinkedtothe achievementofvarious the Code.The variablecompensationcomponentshere includeshort- though thecontracts didinfactprovide forvariable compensation that untiltheappointmentofnewmembersmanagement the Companyandwithduediligenceofaprudentbusinessman, com ponents nancialresults –guarantee an nancial and/oroperational xedremuneration ofthe Business performance and background tsin-kindconsisting, xedelements

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Business performance and background The entire short-term remuneration paidtotheactingmanagement The newmanagementboard employmentcontracts provide for man- 2 oftheCode). Components withlong-termincentive In therealm ofretirement pensions,agreements have beenputinplace Until thestartofappointmentnewmembers manage- ihe uc sneJl 8 02 13 – 153 – – 139 281 Total 573 Michael Busch(sinceJuly28,2012) Houman Khorram (untilJuly31, 2012) Thorsten Krüger(untilJuly31, 2012) Remuneration in€k – Pensions andpensioncommitments Benefi vide forvariablecomponentsofthemanagementboard remuneration vorable and unfavorable developments(sec.4.2.3, para. 2 oftheCode). variable componentofcompensationwhichtakesaccount both fa- director’s annualfi dations oftheCode.The long-termvariablecompensationisbasedon a multi-yearbasisofassessment tobesetbythesupervisoryboard. a separate strategic and/orfi agement board remuneration whichfullyaccords withtherecommen- ment board, themanagementboard employmentcontracts didnotpro- lenging targets, managementboard memberswere andare granted a board members duringthe2012fi which hadamulti-yearbasisofassessment/evaluation(sec.4.2.3 para. targets tobeseteachyearbythesupervisoryboard. Bysettingchal- the annualcontribution doesnottotalmore thanone-third ofthe the formofcontribution-oriented pensioncommitments, underwhich to provide specialbenefi ts followingtermination ofemployment

xedremuneration. These pensioncommitments are tstothemembers ofthemanagementboard in nancialand/oroperational target whichhas scalyearissetforthbelow: 2012 Fixed Variable – 0 232 0 461 Fixed Variable 2011 63 0 693 The oldmanagement board employmentcontracts provided foragen- hrtnKüe utlJl 1 02 61 Thorsten Krüger(untilJuly31, 2012) Total 61 Mr. Krüger andMr. Khorram aswellthecontracts withthenew Other benefi In connectionwiththetermination ofthemanagementboard employ- Both thecontracts withtheformermembersofmanagementboard otiuinoine eso omtet 2012 Contribution-oriented pensioncommitments omnKorm(ni uy3,21) – Houman Khorram (untilJuly31, 2012) vant managementboard employmentcontract limitedsuchpayments vide forremuneration, whichisequalto50%of thelastshort-term charged. of theformermanagement board membersunderthemanagement of aboard member’stermofoffi of thedirector’s offi eral caponfi competition followingterminationoftheiremploymentrelationship. all paymentsfor reimbursables andspecialpayments,were fully dis- board employmentcontracts, including thevariablecompensation and payment totaling around € 0.9m andHouman Khorram received aone- ment contracts onJuly31, 2012,Thorsten Krügerreceived aone-time maximum oftwoannualsalaries intheeventofpremature termination remuneration drawn bythem andwhichservesasconsideration for members ofthemanagementboard Mr. RautertandMr. Vieweg pro- thenhiswifewillhavearighttoclaim management board agreement, included inthetotalreported remuneration. Nodefi securing theenforceability ofacontractually agreed prohibition on gations havebeenmade.Ifthebenefi time paymenttotaling around € 0.4m. Withthesepayments, allclaims to amaximumof150%the severance cap(sec.4.2.3oftheCode). the fullamountoffi in €k nancialsettlements(severance cap),limitingpaymentstoa ts inconnectionwiththeterminationofemployment ce.Likewise,inthecaseofpremature termination xedsalaryforuptosixmonthsthereafter. ceduetoachangeofcontrol, therele- ciarydiesduringthetermof ned-benefi tobli- 2011 87 87 – The fi The remuneration ofthe supervisory board isspecifi The members ofthemanagementboard donotreceive anyloansor The newmanagementboard employmentcontracts containaprovision, € 50,000. Inaccordance withsec.8.16 oftheArticlesAssociation of fi fi Code). WashTec AG, thesupervisoryboard chairmanreceives twicetheamount Miscellaneous Supervisory board remuneration of thefi dance withIFRS)exceedthecomparable amountofthepriorfi every supervisoryboard memberwillreceive € 500 foreachcentby ordinary memberofthesupervisoryboard isnow€ 20,000 forafull other indemnitiesfrom theCompany. dated May5,2011, thesupervisoryboard remuneration wasreconfi any benefi able remuneration components.Pursuanttothe shareholder resolution muneration. The Companyhasnot paidanyremuneration orgranted bers, whowere onthesupervisoryboard foronlypartofthefi Anysupervisory board mem- receives one-and-one-halfthatamount. payments are agreed butshouldbelimitedtoa maximumoftwoyears board work, whichwasnottriggered bygoodcausejustifyingtermina- pursuant towhichifthere isanearlyterminationofthemanagement supervisory board oritscommittees,whichtheyattend.Inaddition, supervisory board alsoreceive afeeof€ 1,500 foreachmeetingofthe ured starting infi which theconsolidatedearnings pershare (asdeterminedinaccor- will bepaidaproportionately lowerfi worth ofcompensationincludingreimbursables (severance cap). the ArticlesofAssociationWashTec AG. Itcomprisesfi thenseverance tion ofthemanagementboard employmentcontract, scalyearforservices rendered personally bythem(sec.5.4.6of the scalyearofmembershiponthesupervisoryboard. Membersofthe xedandvariableremuneration islimitedtoamaximum of xedsalaryandvariablecomponents, whilethedeputychairman tstothemembers ofthesupervisoryboard duringthe 2012 scalyear2011. The basicfi xedandperformance-based re- xedremuneration foran edinsec.8.16 of xedandvari- scalyear, scalyear. g- 2012 in€k, 2011 in€k, oa 9 4 4 25 144 225 144 54 0 90 Total oa 1547137525 285 115497113725285 Total Jens Große-Allermann (sinceJune18,2012) Jürgen Lauer Jürgen Lauer Fee Amount Fee Amount Michael Busch Michael Busch Massimo Pedrazzini asm erzii 0 1 3 5 32 50 32 12 0 20 Massimo Pedrazzini asLelr(ic ue1,21) 1 4 1 7 2 27 27 27 70 27 12 69 47 11 11 47 11 Hans Liebler(sinceJune18,2012) Roland Lacher(sinceJune18,2012) 1) 1) öe en(ic a 0 02 3 6 7 3 32 32 78 9 56 13 Sören Hein (sinceMay10,2012) 2) 2) 4) 3) 5) Chairman;mandatesuspendedduringthepostingtomanagementboard (sinceJuly28,2012) Chairman DeputyChairmanuntilMay10,2012 DeputyChairman DeputyChairmansinceJuly28,2012 DeputyChairmanuntilJuly27, 2012/ChairmansinceJuly28,2012 Payments limitedbycap (according tomembershipstatus/function) diff diff 2) 2) (ni a 0 02 1 4 1 6 2 27 27 69 11 47 11 (untilMay10,2012) 3 0 8 8 5 48 75 48 18 0 30 erences possibleduetorounding-off erences possibleduetorounding-off 1) 1) 310 710 7 57 57 27150 23100 40 0 24 64 100 64 3) 114 712 7 77 77 27192 31134 4)

38 15 66169738

Business performance and background ie Vral Meig oa a Payout Cap Total Meeting Variable Fixed Payout Cap Total Meeting Variable Fixed

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Business performance and background 1.6 Overview ofbusinessperformance 1.6.1 Overall economicperformance China (at+7.8%) onceagaintaking itspositionasaleadingdriverofthe Growth of worldeconomyslowedduring2012 During 2012,onceagainthemostsignifi Federal Governmentreported growth of0.7%there duringthereport- Due totheEuropean sovereign debtcrisisandageneral economic during 2012remained largely stable. countries remained athistoricallylowlevels.The pricesofraw materials emerging marketsshowedaggregate growth of5.3%during 2012,with countries cameinat1.9%, whereas thatofthe emerging marketswas of 2011. Germanywasonceagainanexceptiontothisrule:theGerman downwards several timesoverthecourseof year. The industrialized ing period.DevelopmentsintheUnitedStatesandJapanwere some- major EUcountriessuchasItalyandSpainwastoblameforthe fact nations reported onlyverymoderate growth of1.3%. The recession in by only3.3%during2012,according to data furnishedbytheInterna- signifi sedately relative totheprevious year. Infl slow-down duringthesecondhalfofyear, theglobaleconomygrew growth of pastyears.Thus, theeconomiesofdevelopingand world economy, althoughevenitseconomyperformed somewhatmore what better. Ineachofthosecountries,theIMFreported 2.2%growth. from the emerging markets.However, theyfailedtomatchthedynamic that theeconomicperformanceofeuro zonefell0.4%belowthat tional MonetaryFund(IMF).Forecasts ofexpertshadbeenrevised cantlyhigher, at6.1%. Key interest rates intheindustrialized cantimpetusforgrowth came ationintheindustrialized data of German Federal Government, January2013 data ofGermanFederal Government, Source: InternationalMonetaryFund(IMF)World EconomicOutlook,October2012and Economic growth2012in% In general, thewashequipmentmanufacturing sectorisalate-cyclein- Since economictrends ingeneral havehadonlyalimitedimpactonthe Impact ontheoperation ofcarwashequipment vestments innewequipmentor, in the caseofreplacement investments, crisis. MarketssuchasSpainorPortugal were theexceptionhere, overall remained mostlystable,evenduringthefi thewashconductofendcustomers operation ofcarwashequipment, dustry, inasmuchastheindustry’s development doesnotcoincide with crisis. This newreality togetherwiththeuncertaintyaboutfuture eco- ers are abletosecure fi are describedin more detail aspartofthe segmentreport. and economiccrisis onthebusinessofWashTec andonthebusiness of have ledtoextendedlifecycles oftheequipment. nomic developmentshavecaused manycustomerstopostponetheirin- ures. Weather-related fl where the continuedeconomiccrisishasledtodeteriorating washfi the equipment operators varytremendously from region toregion and the general macroeconomic trends. The specifi teriorated signifi this situation.The general conditionsunderwhich(individual)custom- Developing andEmergingMarkets Central andEasternEurope Industrialized Nations cantlyasaconsequenceofthe fi nancingtoacquire anewwashsystemhavede- uctuationsinwashfi Eurozone Germany World China Japan USA –0.4 +0.7 gures havecompounded +1.3 ceff +2.0 +2.2 +2.2 nancialandeconomic nancialandeconomic +3.3 ects ofthefi +5.3 nancial +7.8 g- Uncertaintyaboutfu- Wash conductofend customers remains equipment investments incarwash ture development and largely stable led topostponementin fi limited nancinghave Key competitors inEurope:Key competitors Istobal SA, Spain IstobalSA, OttoChristAG, Germany 10% (inrelation totheinstalledbase).WashTec iscontinuouslymoni- 1.6.2 Marketforcarwashequipment The main European competitorsare OttoChristAG (Germany),andIs- The WashTec Group’s customersare predominately operators ofpetrol (Italy) iscurrently ininsolvencyproceedings. Atthesametime,compet- Competition Customer groups PDQ ManufacturingInc.,Belanger Inc.andSONNY’S EnterprisesInc. European marketleaderwithrespect tomarketcoverage andmarket WashTec withamarketshare ofroughly isinthird placeonthismarket, cles inorder topreserve thevalueoftheirvehicle pools.These cus- operators ofpure carwashes.Othercustomergroups off oil companies,individualoperators andoperators ofchainspetrol and transport companies. as acomplementaryservicetotheircustomersorwashown vehi- large competitorsintheNorthAmerican marketare RykoSolutionsInc., many) orAquarama (Italy),aswellahostoflocalproducers ofself- itors withsmallermarketshares suchasAlfred Kärcher GmbH (Ger- markets inorder tobeinapositiontaketimely, appropriate action. service washsystems,are attemptingtogainmarketshare. The other share. Pursuant toinformationavailabletheCompany, Ceccato S.p.A. stations/car washesandsupermarkets.The customerbasealsoincludes stations thatoff generate partoftheirearnings.These customers includemultinational tobal SA(Spain).According toitsownresearch, WashTec istheclear tomer groups includecardealershipsandgarages, forwarding agencies toring developmentsofthecompetitive situationonallofitsmajor er customers on-sitewashingfacilities,withwhichthey er carwashing The globalstructure ofWashTec isalsorefl The global marketforcarwashequipmentisdividedintoanumberof America region. Group revenues were generated outsideofGermany. BusinessinCore Europe (with over80%oftheGroup’s netincome)stilldominatesthe Sales markets and EasternEurope (currently approximately 4%each)and theNorth placed ongenerating revenues ingrowth regions suchasAsia/Pacifi picture. In themid-term,however, more emphasisisexpectedtobe bution ofrevenues. Inthe2012reporting year, approximately 67%of in more detailaspartofthesegmentreport. spective markets.The specialfeatures ofthesesub-marketsare setforth sub-markets, dependingonthedegree ofdevelopmentwithinthere- ectedintheregional distri- Business performance and background c

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Management Report Management Report Order backlogasof December 2012slightly lower thanprioryear 58 2 Management Report

Results ofoperation, net assetsand fi 2.1 Order backlog The Group reported asofDecember31, 2012aslightlylower backlog € 18.5m andwastherefore € 0.9m (or5.1%) higherthantheprioryear € 19.2m; afteradjustingforthenon-recurring eff € 301.5m. EBIT–whichhadbeenverynegativelyimpactedduring the 2013 fi fi Results ofoperation, netassetsand fi During fi North Americawere agreat success,enablingthe Companytosubstan- Since WashTec’s orders generally cycle-through withinsixtotenweeks, optimization ofWashTec’s salesandorganizational structures inGer- ability toachievesustainedpositiveearningsinfuture. Investmentsin ated duringfi navia, andthetransfer ofportionsWashTec’s production operations many, capacityadjustments,particularlyinSpain,theUKandScandi- ments andregions, whichshouldleadtoimproved earnings,suchas infrastructure andeffi pected drop intheNorthAmericabusiness–rose from € –10.4m to prior yearmostlyduetotheone-timecharges resulting from theunex- sub-markets, WashTec substantiallyincreased itssalesfrom € 293.3m to the order backloghasonly limitedindicativevaluefor how theentire the yearshowedanabove-average order intake. than ithadattheendofprior year, althoughthelasttwomonthsof to theCzechRepublic. tially improve itsrevenues andearningsthere. Furthermeasures initi- gures (€ 17.6m). The restructuring measures thatwere launchedin nancialposition scalyearwilldevelop. scal2012,despiteadiffi scal2012havecreated favorable conditionsforWashTec’s ciencymeasures were madeinallmarketseg- nancial position cultmarketenvironment incertain ects, EBITequaled 2.2 Resultsofoperation The following sectionexaminestheWashTec Group’s businessdevelop- The following tableshowsthekeyearningsfi AG willbedealtwithseparately. AUWA-Chemie GmbH.Thus, thefollowingdiscussionrelates primarily 2.2.1 Key earningsfi Group: Financial result –2.7 –2.7 19.2 51.7 10.0 result Financial (EBIT) result Operating 100.2 andDepreciation amortization 126.9 4.3 EBITDA 29.2 taxes) other (incl. expenses operating Other expenses Personnel income operating Other materials of Cost Earnings before taxes 16.5 16.5 10.1 income net Consolidated taxes before Earnings in % in fi * Comparative 2012 Revenues 301.5 (unadjusted) €m in due to rounding-off to due exclusively from dividendspaidbyWashTec Holdingaswellfrom profi ments. WashTec AG isnotitselfanoperating entity andearnsincome Diff to theGroup. To theextentnecessary, anydiscussionaboutWashTec erences possible ttransfers madebyWashTec CarwashOperations GmbHand gures adjusted pursuant to IAS 8, see Note 7 in the Consolidated Notes Consolidated the 7in Note see 8, IAS to pursuant adjusted gures

gures gures fortheWashTec 2011* 104.6 293.3 –14.6 –10.4 127.4 –11.9 48.8 29.5 19.2 –1.6 4.8 284.6 –66.1 52.1 5.9 –4.2 –10.4 –0.4 2.8 169.2 238.7 –68.8 Change The WashTec Group’s revenues totaled€ 301.5m andwere thus€ 8.2m € 80.6m). After adjustingforcurrency rate eff 2.2.2 Revenuedevelopment of 2012,revenues increased by€ 3.8m or4.7% overthesameperiodof or 2.8%higherthanintheprioryear(€ 293.3m). Inthefourthquarter were therefore 1.0% abovethoseintheprioryear(€ 293.3m). the prioryear(revenues inQ42012:€ 84.4m; revenues inQ42011: Revenues overmultipleyears (in€m) Revenues bysegmentsin€m, change in%versus2011 Core Europe +0.8% 246.5 082009 2008 285.1 mrigErp ot mrc Asia/Pacific North America Emerging Europe 256.3 +20.2% 13.7 ects, revenues equaled€ 296.2m and 2010 268.4 +15.7% 44.9 2011 293.3 2012 301.5 +1.7% 11.9 The profi € 13.7m (prioryear:€ 11.4m). In A detaileddescriptionofthedevelopmentinindividualsegments is (€ 11.7m). Total 301.5 Overall, themarketsin During the2012fi prtosbsns n tes 11.6 Operations businessandothers Chemicals 29.8 (in %) due to rounding-off to due Revenues byproducts New equipment pr at,srie 90.1 Spare parts, service ern European markets( year levelsacross allofitsproduct groups. Revenuesfrom all intheUnitedStates,and,atatotalof€ 44.9m, were clearlyabove revenues totaled€ 11.9m, andwere thusslightlyaboveprioryearlevels ingly, therevenues inthissegmentrose byapproximately 20%to ment wasstable.Revenuesinthisregion, whichtotaled€ 246.5m, were set outinthesegmentreport under2.3below. slightly abovethoseoftheprioryear(€ 244.5m). The Central andEast- generated in Diff n sdeupet 170.0 and usedequipment to € 29.8m (prior year:€ 24.3m). from taled USD 58.0m (prioryear:USD 54.3m). Inthe those oftheprioryear(€ 38.8m). InUSdollarterms,theserevenues to- n€ 2012 in €m used equipment service erences possible chemicals climbedby€ 1.2m to € 90.1m (prioryear:€ 88.9m); revenues tablewashbusinessisrefl service andchemicals

onceagainperformed verywell,increasing signifi increased slightlyfrom € 168.7m to€ 170.0m. scalyear, WashTec generated revenues above prior Emerging Europe Core Europe North America Results ofoperation, net assetsand fi ectedintheincreased revenues . Revenuesfrom developedasexpected;develop- ) continuedtogrow. Accord- , revenues rose, above Asia/Pacifi 168.7 293.3 spare partsand 2011 24.3 88.9 11.4 2.8 1.8 22.6 1.3 0.8 Change new and c segment, segment, nancial position cantly Revenues inallproduct groups above prioryear Management Report 59

Management Report Management Report 60 Management Report

Results ofoperation, net assetsand fi “Emerging Europe” and“Asia/Pacifi The cost ofmaterialsincludes,aboveall,purchased raw materials,con- The revenues generated byWashTec CarwashOperations GmbHand The gross profi € 3.0m (prioryear:€ 1.6m), andconsistedofinvoicing(pass-through) 2.2.3.1 Expenseitems 2.2.3 Expenseitemsandresults Cost ofmaterials WashTec AG’s revenues (asdefi WashTec FinancialServicesGmbHare reported under Whereas personnelexpensesinNorthAmerica fellasaresult ofrestruc- Personnel expenses charges to itssubsidiariesformanagementcosts. during thatperiod.Adjustedfor theseeff on thepurchase pricesofthosematerials.The largest items related to ing measures inNorthAmericahadgivenrisetoincreased expense because provisions accruedduring2011inconnectionwithrestructur- larly Germany). Nevertheless, duetolowerextraordinary expenses for increases undercollective bargaining contracts inCore Europe (particu- result oftheexpansion WashTec’s salesand servicestructures inits increased. There wasaclearimprovement inthegross profi mately atthesamelevelsasduring theprioryear. slightly higherthanintheprioryear(€ 11.4m). sumables andsupplies,duringthe2012reporting year, depended which rose to58.2%,relative tothatoftheprioryear(56.7%). terials fellslightlyrelative totheprioryear, from € 127.4m to€ 126.9m, the purchase ofsteel,plasticsandotherraw materials.The costofma- time payments made toformerboard membersanddue towagescale turing measures, expensesinotherregions increased, forexampleasa business andothers tclimbedfrom € 166.4m to€ 175.4m becauserevenues . Revenueshere totaled€ 11.6m, andwere thus nancial position nedundertheHGB)rose by€ 1.4m to c”regions, aswelldue toone- ects, suchcostswere approxi- operations tmargin, The exchangerate developmentoftheUSDollar totheEuro doesnot € 2.2m (prioryear:€ 0.9m) andresulted primarilyfrom theremunera- € 104.6m duringtheprioryear, to€ 100.2m, in2012.The personnelex- € 48.8m to€ 51.7m, dueprimarilytocostsincurred inconnectionwith 2.2.3.2 Foreign currency eff Other operating expenses(asdefi Other operating expenses(includingothertaxes)rose by€ 2.9m, from Other operating expenses(includingothertaxes) Personnel expenses(asdefi Note 7intheConsolidatedNotes. value creation andrevenue generation takes placeintherespective company carfl due toconsultancyandrecruitment expensesincurred whileimple- and Legal. are explained intheremuneration report andinareas InvestorRelations assets andliabilities thatare heldinaforeign currency hadanegative inasmuch asthese positionswere largely hedgedusingderivatives. impact onearnings ofonlyapproximately € –0.2m (prior year:€ +0.3m), regions themselves.The reporting datevaluation ofthebalancesheet proximately € –1.0m hadbeenreported. loss ofapproximately € –1.1m. In2011, aforeign exchangelossofap- menting thecorporate strategy, andduetotheexpansionofWashTec’s penses ratio (thatexpenseasapercentage ofrevenues) fellfrom 35.7% phased-retirement programs, personnelexpensesfellinaggregate from restructuring measures andchangesinaccountingconnectionwith by € 0.6m to€ 2.4m (prioryear:€ 1.8m). sales structures inEmerging Markets,trade fairexpenses and higher generally haveanyimpactontheoperating business becausemostof tion ofthemanagementboard (includingseverance payments),which to 33.2%.The prioryearfi the expansionofWashTec’s research anddevelopmentdepartments, eetexpenses.This itemalsoincludesaforeign exchange gures were adjusted pursuanttoIAS 8,see nedundertheHGB)ofWashTec AG equaled ects nedintheHGB)ofWashTec AG rose Personnel expenses fell from €104.6mintheprior year, to€100.2m AdjustedEBITrose to EBITrose by€ 29.6m € 18.5m; adjustedEBIT margin at6.1% margin at6.4% to € 19.2m; EBIT The investment result ofWashTec AG (asdefi € 29.5m). The reason forthehighprioryearfi 2.2.3.5 Investmentresult ofWashTec AG 2.2.3.4 Depreciation andamortization 2.2.3.3 EBITDA EBIT overmultipleyears (in€m) Depreciation andamortizationdeclinedto€ 10.0m (prioryear: taxes,depreciation andamortization(EBITDA)Earnings before interest, WashTec HoldingGmbH paidadividendintheamountof€ 3.9m, of goodwillinNorthAmerica. increased to€ 29.2m, andwere therefore signifi ments intheamountof€ 2.5m (prioryear:€ 2.5m). Inaddition, primarily basedonincomederivedfrom profi which wascollectedduringthesamephase(prioryear:€ 2.0m). the prioryear(€ 19.2m). 29.4 082009 2008 13.1 20.3 002012 2010 –10.4 2011 nedundertheHGB)is t(loss)transfer agree- gure wasawrite-down cantlyabovethoseof 19.2 The unadjusted earnings before interest and taxes (EBIT) increased sub- The unadjusted earningsbefore interest andtaxes(EBIT) The EBIT adjustedfornon-recurring eff € 18.5m. The adjustedEBITmargin equaled6.1% (prioryear:6.0%). € +1.2m Non-recurring eff totheNorthAmericasegment. € +0.7m, € –0.5m ofthese were attributed totheCore Europe and At theindividualsegmentlevel, there were (asin theprioryear)re- 2.2.3.6 EBIT 2.2.3.8 Netfi 2.2.3.7 Non-recurring eff Group level.Ofthenon-recurring eff Net fi Europe € –4.8m, Asia/Pacifi ot mrc –. –1.4 0.8 19.7 –0.2 Adjusted 0.8 19.2 EBIT North America Emerging Europe Core Europe in €m 2012 EBIT oprtv fi * Comparative Group 19.2 Consolidation 0.0 Asia/Pacifi 0.0 18.5 due to rounding-off to due EBIT/adjusted EBITbysegments at 6.4%(prioryear:–3.5%). prior yearandaccording tosegmentbroke down asfollows:Core stantially to€ 19.2m (prioryear:€ –10.4m) andtheEBITmargin stood gional non-recurring eff Diff from interest rate swaps. erences possible nancialexpense increased from € 1.6m to€ 2.7m duetoeff c 07 –0.7 –0.7 c gures adjustedpursuanttoIAS 8,seeNote7intheConsolidated Notes nancial expense

ects thatwere partiallycompensatedatthe ects c€ +0.7m andNorthAmerica€ –24.3m. Results ofoperation, net assetsand ﬁ ects reported for2012andtotaling ects rose from € 17.6m to –29.9 –5.6 –10.4 17.6 EBIT Adjusted 17.9 22.7 –0.1 –0.5 0.7 0.0 1.1 1.1 1.1 2011* ects forthe nancial position ects EBIT Non-recurring eff Net ﬁ of € +0.7m to € 2.7m Management Report nancialexpenserose ects 61

Management Report Management Report 62 Management Report

Results ofoperation, net assetsand fi The prior yearfi equaled€ The earnings before taxes(EBT) 16.5m (prioryear:€ –11.9m). 2.2.3.9 EBT EBT overmultipleyears (in€m) Breakdown offi Interest rate swaps –1.3 –1.3 –0.5 fi from Expenses fi from Expenses 0.1 swaps rate Interest loans Interest-bearing income similar and interest bank from Income similar expenses –0.6 –0.6 expenses similar Financial expense –2.8 –2.8 0.1 fi (net result Financial expense Financial income Financial solidated Notes. in €m, €m, in diff erences possible due to rounding-off to due possible erences nance leasing –0.4 –0.4 and costs nancing leasing nance gure wasadjustedpursuanttoIAS 8,seeNote7inCon- nancial result 26.4 082009 2008 nancial expense) –2.7 –2.7 expense) nancial nancial position 10.5 18.6 2010

2012 –11.9 2011 16.5 2012 2011 –0.8 –0.2 –0.2 –0.5 –1.6 –1.7 0.2 0.2 The annualprofi Taxes equaling€ 6.4m (prioryear:€ 2.7m) consistoftheusedeferred € 3.7m to€ 4.9m. € 0.72 (prioryear:€ –1.04) becausetheaverage numberofshares had 2.2.3.11 Consolidated netincome 2.2.3.10 Taxes Consolidated net incomeovermultipleyears (in€m) Consolidated netincomeaftertaxesrose by€ 24.7m to€ 10.1m (prior Loss carry-forwards are heldmainlybyinternationalcompanies, while of individualequityholdingshadanimpactonthedevelopment ofthe year: € –14.6m). Earningspershare (diluted=undiluted)rose slightlyto in theConsolidatedNotes. prior year(13,976,970shares) asaresult oftheshare buy-back program. The prioryearfi the losscarry-forwards inGermanyhavebeenlargely exhausted. tax rate. the non-recognition ofdeferred taxesonlosscarry-forwards inrespect from –22.7% to38.8%.Inadditionthepositivetrends inearnings, tax credits rose andcurrent taxexpenses.The taxrate (relative toEBT) fallen slightlyto13,962,989shares compared totheaverage ofthe tofWashTec (asdefi 15.3 082009 2008 gures were adjusted pursuanttoIAS 8,seeNote 7 5.8 10.8 002012 2010 nedundertheHGB)rose from –14.6 2011 10.1 € 10.1m Consolidated netincome rose by€ 24.7m to 2.3 Segmentreport (plus aspecialdividend)andthattheshareholders authorizeafurther 2.2.4 Useoffunds/dividend Group inNorthernandWestern Europe are consolidated.The “ Chinese sub WashTec intendstosustainably distributearound 40%oftheannualnet WashTec’s globalbusiness isbroken downintofourgeographical seg- WashTec considersits share tobevalue-orientedwithanattractive current share buy-back program isexpiringinMay. dividend bepaidinaccordance withWashTec’s existingdividendpolicy cluding Russia,whereas thesegment“ debt andfi defi activities intheUnitedStatesand Canada.The “ buy-back oftheCompany’sownshares, inasmuchasthe Company’s meeting ofshareholders, whichisscheduledforMay15,2013,thata income toitsshareholders intheformofdividendpaymentsand/or ments. Inthe“ market positiongloballyandtoachievemoderate revenue growth return policy. AnotherelementofWashTec’s strategy istoexpandits primarily refl share buy-backs. Against thisbackground, themanagementboard and while maintainingaconservativeleverage (gearing)ratio. WashTec the supervisoryboard willtentativelyrecommend totheannualgeneral ing Europe nesaconservativeleverage ratio asaratio ofEBITDA tonetbank nanceleasesoflessthanone(1).Undertheseconditions, ” segmentcomprisesthecountries ofEasternEurope in- sidiaries. ectsthebusinessdevelopment oftheAustralian and Core Europe ” segment, theactivitiesofWashTec” segment, North America Asia/Pacifi ” includesthe c ” segment Emerg- EBIT bysegments2011/2012(in€m) Group 2012:€301.5m 11.9 Asia/Pacific Europe 13.7 Emerging 44.9 North America Core Europe 246.5 Revenues bysegments2011/2012(in€m) 17.9 Europe Core 2011 2012 19.2 –29.9 2011 America North –0.2 2012 Results ofoperation, net assetsand fi Group 2011:€293.3m 11.7 Asia/Pacific Europe 11.4 Emerging 38.8 North America Core Europe 244.5 1.1 2011 Europe Emerging 2012 0.8 2011 0.7 Pacific Asia/ –0.7 nancial position 2012 Management Report 63

Management Report Management Report 64 Management Report

Results ofoperation, net assetsand fi The current mainEuropean competitors are Otto ChristAG (Germany) The competitionisintenseandlimited toonlyafewmanufacturers The wash equipmentmarketinCore Europe isbyfarthemostdevel- 2.3.1 Core Europe Other clientsare independentcustomerssuchassupermarketchains, In recent years,growth inthenumberofvehicles inCore Europe has Market environment andcompetition Key fi BTmri % 7.8 1,354 % 31) Dec of (as Employees margin EBIT EBIT €m Revenues €m 19.2 246.5 over bynew, insomecaseslocal, operating chains. of salesandserviceaswellthehighestproduct quality. Major clients oped vehiclewashmarketintheworld,withhighestproportion of ern Europe), thewashbehaviorofendcustomershasbeenvery and IstobalSA(Spain). The mostimportantmarketsare dominated by are multinationaloilcompaniesthatoperate car washfacilitiesintheir individual operators, logisticscompaniesorcardealerships.Areview of petrol stationnetworkseitherthemselves orthrough lessee-operators. themostprofessional structure interms installed carwashequipment, part, onweather.part, been stable.IntheCompany’sopinion,thistrend willalsonotchange split from thepetrol stationnetworkswhichhaveinsteadbeentaken stable and predictable because such activity is dependent, forthemost stable andpredictable becausesuchactivityisdependent, signifi Diff who havesuccessfully shapedtheconsolidation ofthelast20years. the direct salesnetworks ofthemanufacturers andadirect manufac- the variouscustomergroups reveals thatsomelarge oilcompanies have erences possible due to rounding-off to due possible erences cantlyinthefuture. Exceptforindividualregions (e.g.,inSouth- gures Core Europe nancial position

2012 244.5 1,316 2011 17.9 .3 7. The Companyhasseen increasingly aggressive pricinginthoseregions As aresult ofthegreater competitiveintensity, theCompanybelieves Prior tothefi Kingdom remain substantially more aff In 2012,themarketsinCore Europe generally developedmore poorly WashTec istheclearmarket leaderintermsofmarketcoverage and equipment wasastablereplacement marketthatallowedallmanufac- effi over carwashesinWashTec’s core markets.Withthiswide-coverage economic crisishasrevealed asignifi ern Europe aswellthe Beneluxcountries,France andtheUnited cantly. basis, WashTec isvery well-positionedintermsofprofessionalism and network aswellbyfarthelargest installedbaseofover20,000roll- market share andhasbyfarthebestestablisheddirect salesandservice markets, particularlySouthernEurope, andatransformation ofthecar graphically expansiveservicestructure, thebarriersfornewcompetitors wash equipment market, whichexhibitsthefollowingaspectsand wash equipmentmarket, with lowmarketgrowth. IntheCompany’sopinion,fi to enterthismarketare veryhigh.According toitsownresearch, formed through dealers.Giventhegreat importanceofhavingageo- turer-tied servicebusiness.Aportionofthesalesandisper- features: turers and dealersinNorthernandWestern Europe toearngoodresults for exampleinGermany, have beenstable. asthelargest single market, than intheprioryear. individualregions suchas South- Inthisrespect, that theaverage returns intheindustryhavelikewisedeclinedsignifi The earningssituationamongsomemanufacturers hasdeclined whichare due Longerreplacement cyclesforcarwashequipment, ciency. signifi to thelongerservicelives,have resulted inalowersalesvolume; cantly. nancialandeconomiccrisis,themarketforcarwash cantmarketdeclineincertainsub- ected, whilethedevelopments nancialand - Markets developedmore year poorly thanintheprior € 246.5m Revenues inCore Europe rose slightly by€ 2.0m to There isariskthatoverthemid-termmarketwillstagnateatitscur- Although WashTec’s results in Core Europe suff (prior year:€ 244.5m). Kingdom through thestillstablerevenue streams from Germany, Aus- WashTec wasabletooff Southern Europe andintheBeneluxcountries,France andtheUnited Revenue development Earnings development cluded, forexample,makingchangestoWashTec’s supply chainstruc- customers hasalsobecomemanifestininvestmentbehavior, assome eff costs andfurtherwrite-downs of receivables inSouthernEurope, EBIT operational expensesduetothetrade fair, anincrease incompany car of thecostsconnectedwithcollective wagescaleincreases inGermany overall revenues inCore Europe rose slightlyby€ 2.0m to€ 246.5m and France, one-timepaymentsasaresult ofstaff pany hascontinueditsstructural measures toimprove effi investments andinstallationshavebeenpostponed.Hence,the Com- rent lower levelandthatthiswillbringaboutadditionalchangesboth segment orhasinstitutedothercoursesofaction.Suchactions havein- still rose to€ 19.2m (prioryear:€ 17.9m). Adjustedfornon-recurring gent cost-cutting andeffi tures. that havebeenparticularlyaff this trend through innovations,furtherprofessionalization andintelli- WashTecfor manufacturers andfordealers.Asinthepast, isaddressing tria andSwitzerlandthecountriesofNorthernEurope, suchthat ects, EBITfellfrom € 22.7m to€ 19.7m. set themarket-driven, sharpfallinrevenues in ciencyprojects. ected. The continueduncertaintyamong ered primarilybecause lay-off s andincreased ciencyinthis The number ofvehiclesinthe“ 2.3.2 Emerging Europe Europe. There are alsolocalcompetitors,particularlyintheself-service Before theonsetoffi WashTec expectsthatthemarketinthis segmentwillreturn tovery Market environment andcompetition Key fi EBIT margin % 5.8 5.8 10 % 31) Dec of (as Employees margin EBIT €m EBIT Revenues €m 0.8 13.7 enjoyed before thecrisis. development ofthemarketbyindependentdealers,whoare supported considerably. This trend isexpectedtocontinue inthecomingyears,as again startedtogrow intheinterim.Thus, thanks toanimproved sales and economiccrisisimpactedsome ofthecountriesEmerging Eu- area. pone their investments in new car wash equipment. The markethas pone theirinvestmentsinnew car washequipment. rope strongly andcausedcustomerstochange their strategy andpost- in Emerging Europe islargely similartothestructure prevailing inCore ies representing theminindividualregions. The competitorsituation by WashTec’s salesrepresentatives. Onlyafewsuppliershavesubsidiar- rise. The salesandservicestructure inthisregion isbasedprimarilyon structure, theCompanyhasbeenableto return to thegrowth rates it share, given thelowerlaborcoststhere, thatmarketshare continuesto generating double-digitgrowth fi Diff well. Althoughtheautomatedcarwashstillhasonlyasmallmarket favorable growth againinthefuture and planstofurtherstrengthen its erences possible due to rounding-off to due possible erences gures Emerging Europe nancialandeconomiccrisis,WashTec was Emerging Europe

2012 gures in this segment. The ﬁ gures inthissegment. Results ofoperation, net assetsand ﬁ ” segmenthasrisen nancial nancial position 2011 11.4 9.6 1.1 4 Positive marketdevelop- future ment expectedalso inthe Management Report 65

Management Report Management Report € 2.3m to€ 13.7m Europe increased by Revenues inEmerging 66 Management Report

Results ofoperation, net assetsand fi The numberofvehiclesinNorthAmerica hasremained largely stablein 2012 were at€ 13.7m (prioryear:€ 11.4m). 2.3.3 NorthAmerica fi In the United States, most customers are independent, smallorme- In theUnitedStates,mostcustomers are independent, Revenues inthissegmenthavecontinuedtoimprove signifi aseparate companywasformedin PolandIn thiscontext, inearly2012. Earnings dropped to€0.8mbycomparisonwiththeprioryear(€ 1.1m) Market environment andcompetition Revenue development Earnings development Key fi EBIT €m Revenues €m 44.9 –0.2 EBIT margin % 0.0 0.0 229 % 31) Dec of (as Employees margin EBIT dium-size operators ofpetrol stationsandindividual operators ofcar end customershaslikewisenot changedsignifi customers inindividualregions, forexamplebysettingupsalesoffi dealer networkandexpanditsownpresence anddirect accesstomajor diffi as aresult ofexpenditures madetoexpandsales structures. There were number ofvehiclesisexpected inthefuture. The washconductofthe no non-recurring eff Diff wash equipment. Asaresult ofthe fi wash equipment. the lastfewyears.Someslight population growth andgrowth inthe ticularly inlightofgoodequipmentsales,revenues asofDecember31, to longeroperating lifeof theequipmentandonother hand,ithas nancingoptions ofthesecustomershavebecome considerably more erences possible due to rounding-off to due possible erences culttouseand remain very limited.Ontheonehand, thishasled gures NorthAmerica ects. nancial position

2012 nancialandeconomic crisis,the cantly. cantly. Par- –29.9 ces. –77.1 2011 38.8 247 There were initialindications ofaslightrecovery ofthemarketdiscern- America ishighlyfragmented andischaracterized byanumberofman- In comparisontoEurope, thecarwashequipmentmarketinNorth WashTec hasreacted tothechangedmarketsituationand unex- car washconveyorsystems. car washesisRykoSolutionsInc.,alocalmanufacturer whichworksthe caused areduction inthenumberofinstalled machines.Itisestimated cant adjustmentsinteraliatoits staffi Intermsofinstalledbaseandmar-competitive positioninthemarket. organization, whichwas originallystructured inahighlydecentralized are also manufacturers whichhavestrictlydealersalesstructures and ably higherthaninEurope. The leaderintherealm offrictionsystem a general marketrecovery isnotyetinsight. market forthemostpartusingitsownsalesandserviceteams. There have, intheinterim,startedinvestingagainexpandingtheir petrol ible during2012,inparticular, customerswithasupra-regional scale menting acomprehensive restructuring program andbymakingsignifi pectedly poordevelopmentin its results duringfi market are PDQManufacturingInc.and BelangerInc.intherealm of its ownresearch. The otherbiggestcompetitorsintheNorthAmerican ket share, WashTec occupiesthird placeinNorthAmerica,according to local production havesofarbeenunabletoestablishanynoteworthy indirect areas oftheorganization. Overthecourseof2012,WashTec’s management functions atitsheadquartersinDenver, Colorado. proximately 70%ofthe Company’slocalinventorywarehouses and wassubstantiallystreamlined, forexamplebyconcentrating ap- ment, sales). The percentage ofsalescarriedoutthrough dealersisconsider- However,station networksandinrenewing theircarwashequipment. ufacturers thatworkwithdiff way bothinterms ofgeographical locationandinterms ofmanage- touchless washes,aswellSONNY’S EnterprisesInc.intherealm of those withmixedsalesstructures. European manufacturers withoutany that theUSmarkethassubsequentlyshrunkbynearly40%overall. erent salesstructures (dealers anddirect nglevelsbothinthedirect and scal2011byimple- - dealers of manufacturers and featuring alarge number US: Fragmented market € 44.9m increased by€ 6.1m to Revenues inNorthAmerica The restructuring measures are proceeding according toplanandhave 02, signifi € –0.2m, 2.3.4 Asia/Pacifi Mostly duetothefavorable developmentsinWashTec’s direct andkey Options forstrategic alliancescontinuetobeexamined. During thefourthquarter, theCompany’soperational results reached In general, theNorthAmericanbusinessdevelopedfavorably in2012. USD totaled 57.5m (prioryear:USD 53.0m). WashTec’s successfulimplementation ofitsrestructuring measures and Earnings development Revenue development Key fi EBIT margin % –5.9 –5.9 47 % 31) Dec of (as Employees EBIT margin EBIT €m Revenues €m 11.9 –0.7 outlook, WashTec hasdecidedtoretain itspresence inNorthAmerica. earnings situation.Givenitsglobalcustomerrelationships andfavorable account business,WashTec’s revenues inNorthAmericadeveloped ada, thefoundationhasbeenlaidforotherfuture improvements tothe already led tosignifi more favorably thanexpectedandcameinsubstantiallyabovethoseof Diff the break-even point. for non-recurring eff EBITin euros was tial improvement initsUSDresults inthissegment. the favorable businessperformanceinNorthAmericaledtoasubstan- the prioryear, at€ 44.9m (prioryear: € 38.8m). Regionalrevenues in erences possible due to rounding-off to due possible erences gures Asia/Pacifi cantlyaboveEBITintheprioryear(€ –29.9m). Adjusted c cantimprovements inWashTec’s earnings.InCan- ects, EBITtotaled € –1.4m (prioryear:€ –5.6m). c

2012 2011 11.7 6.0 0.7 45 “Asia/Pacifi The marketinAustralia, where untilnowmostofthebusiness inthe A signifi Chinese manufacturers andtocompetitorsfrom otherAsiancountries On the Australian market, themajorAmericanand European manufac- On theAustralian market, In 2012,thefi In JapanandKorea, there are anumber ofdominantlocalmanufactur- Until now, thecompetitioninthismarkethasbeenlimitedtoseveral Market environment andcompetition develop toEuropean levelsoverthemid-tolongterm. extraordinary stillrelatively growth potential.Basedonthecurrent, ers withanationalfocus.Allof theEuropean andthemajorUScom- at alowlevel.More specifi and dealershipsegment–eventhoughthatmarketisonlyexpected to reluctant tomakeinvestments orhavepostponednew installations. important Chinese focus market. The expansionofstructures isyielding important Chinesefocusmarket. ing. Since2008,WashTec hashaditsownproduction andprocurement manual washes.Sincethisapproach cannotcompletelyservethe low laborcoststhere, themarketforcarwashesisstilldominatedby petitors havedistributorsinNew Zealand. Allothercompeti- manufacturer withitsownpresence inthismarket. some initialresults –thefi site nearShanghaiandhasasalespartnerforservicingmajor customers. ganization wasstrengthened furtherinorder tohelpactivelyshapethe with limitedexperienceinthefi witnessing verystrong growth inthenumberof vehiclesandhas to automatedcarwashesinthefuture. tremendous leapindemandforcarwashes,there willbeatransition tors conducttheirbusinesslocally through independentdealers. turers are indirect competitionwithoneanother. WashTec istheonly cant part of this segment is the Chinese market, whichis cantpartofthissegmentistheChinesemarket, c”segmentwas transacted, hasdevelopedandstabilized rstdirect salesstructures were created, andthelocalor- rstequipmenthasbeensoldinthecardealer cally, individualoperators haveremained eldofprofessional automatedcarwash- Results ofoperation, net assetsand fi nancial position dealership segment sold inthecardealerand China: Firstequipment WashTec growth potential for growth expected; great and long-termmarket China: Strong mid-term Management Report 67

Management Report Management Report Revenues inAsia/Paciﬁ rose slightly to€ 11.9m 68 Management Report c

Results ofoperation, net assetsand ﬁ At €11.9m, revenues were slightlyabovetheprioryear’slevel (prior year:€ 0.7m), primarilyasaresult ofinvestmentsinmarket (€ 11.7m). The marketinAustralia, where themajorportionofactivities Earnings inthissegmentasofDecember31, 2012declinedto€ –0.7m By continuingtoexpandtheglobalsupplychainandsourcing activities, WashTec’s goalistoadjusttheproduct portfoliotomeetthelocal Earnings development Revenue development development andsalesstructures. There were nonon-recurring eff ment. in thissegmenthasbeenconductedto-date,showsstabledevelop- ment advantagesfrom thisregion fortheentire product portfolio. needs andtobuild-upitsownsalesservicestructure inkeyregions. such thatadjustedEBIT2011totaled€ 0.0m. whereas non-recurring eff the Companywillalsobeleveraging themanufacturingandprocure- ects during theprioryeartotaled€ +0.7m, nancial position ects, 2.4 Netassets The WashTec Group’s The € 42.3m (prioryear:€ 42.3m). Managementsubjectsthecapitalized 2.4.1 Assetandcapital structure 2.4.1.1 Assets Deferred tax assets 5.9 5.9 3.8 88.8 48.5 Equity equivalents cash and Cash assets tax Deferred Inventories assets other and Receivables assets Non-current Diff €m, sheet balance consolidated Condensed 84.4 36.6 Balance sheet total 183.6 183.6 3.0 8.8 59.6 6.7 ﬁ * Comparative 27.8 total sheet Balance liabilities tax Deferred revenues Deferred payables trade which, of Liabilities taxes) income (including Provisions need forfurther write-downs.Non-current assetsinclude theitems situation inNorth America,there doesnotcurrently appeartobe any goodwill to an annual impairment test. The testisbasedonamid-term goodwill toanannualimpairment test. write-downs made duringthepastyearinconnection withthespecial to € 183.6m. forecast fortheperiod2013to2015at theGroup level.Giventhe balance sheettotal erences possible due to rounding-off to due possible erences gures adjusted pursuant to IAS 8, see Note 7 in the Consolidated Notes Consolidated the 7in Note see 8, IAS to pursuant adjusted gures non-current assets oftheWashTec Group declinedfrom € 195.0m

2012 includegoodwilltotaling 2011* 2010 195.0 217.1195.0 50.9 47.4 32.3 22.3 75.3 94.4 75.3 10.4 10.2 10.4 39.3 37.4 74.0 85.6 74.0 93.1 110.0 4.6 15.3 3.0 4.6 3.0 9.9 9.5 9.9 7.1 7.0 7.1 Balance sheettotal declines to€183.6m “real properties and buildings”(€ 17.0m), “technicalequipmentand € 75.3m to€ 84.4m. Detailsconcerningthe incomeandexpensesrec- € 3.8m, dueprimarilytothe optimization offi € 128.0m (prioryear:€ 128.0m). Managementalsosubjects theshares As a result of favorable earnings development, As aresult offavorable earnings development, As ofthebalancesheetdate, (€ 9.0m). (€ 2.5m). (€ 3.4m) andfrom deferred taxassetsbasedon losscarryforwards 2.4.1.2 Liabilitiesandequity Deferred taxassetstotaling€ 5.9m resulted from timingdiff Under theHGBaccountingprinciples,WashTec AG’s non-current assets WashTec AG’s receivables, asdefi Inventories Receivables andotherassets consist primarilyofshares inaffi ognized directly inequity capitalpursuanttoIFRSmay befoundinthe eral inter-company setoff equaled € 13.5m (prioryear:€8.0m)andresulted primarilyfrom gen- of receivables fellby3daysto48(prioryear:51days). machines” (€ 13.5m) and“intangible assets(excludinggoodwill)” related repayment of debt. related repayment ofdebt. inventory management. inventory management. profi held inaffi short-term current accountliabilities)haddeclinedfrom € 4.6m to the activemanagementofreceivables. Compared tolastyear, theterm there does notcurrently appeartobeanyneed for furtherwrite-downs. t(loss)transfer agreements. liated enterprises to an annual impairment test. Here too, liatedenterprisestoanannualimpairmenttest. decreased from € 39.3m to€ 36.6m duetoan improved s amongthe affi cash andequivalents declinedfrom € 50.9m to€ 48.5m dueto liatedenterprisesinanamountof nedunderHGBaccountingprinciples, liatedenterprisesandfrom nancingresources andthe equity rose from (notincluding erences – declinedto0.10 (prioryear:0.32) byvirtueoftheincrease inequity. The The The provisions ofWashTec AG undertheaccountingrulesofHGB € 27.8m (prioryear:€ 32.3m). Trade payables Compared toDecember31, 2011, WashTec AG hadequity(asdefi Statement ofChangesinEquity. The equityratio increased substantially Provisions Net bankdebt date. equaled € 0.7m (prioryear:€ 0.8m) andwere setasideprimarilyfor cash management. year (€ 16.6m). year: € 134.9m). This yieldsanequity ratio of98.4%(prioryear:98.9%). as theprevious year(prioryear:€ 3.0m). below theprioryear(€ 24.4m). board compensationand supervisoryboard compensation. legal andconsulting costs,chartered accountingcosts, management back obligations.Asofthebalance sheetdate,thisitemequaled made forpersonnel,phasedretirement obligations, warranties andbuy- balances) was€ 1.5m andtherefore alsosignifi short-term fi suant toIAS 8;seeNote7intheConsolidatedNotes. from € 21.2m to€ 5.3m specifi to 46.0%(prioryear:38.6%).The prioryearfi deferred taxliabilities gearing (incl.incometaxliabilities)consist primarilyofprovisions nanceleasingdebt)was€ 8.3m andtherefore € 16.1m –defi (long-termandshort-term bankdebtlesscredit declinedfrom € 9.9m to€ 6.7m asofthebalancesheet Net fi nedasthequotientofnet fi nance debt were € 3.0m andtherefore atthesamelevel callyduetohighcashfl nedbytheHGB)of€ 139.6m (prior Results ofoperation, net assetsand fi (netbankdebtpluslong-termand bank debt declinedsignifi gures were adjustedpur- cantlylessthantheprior nancedebttoequity owandanactive cantly nancial position Gearing drops to0.10 Equity ratio at46.0% Equity Management Report 69

Management Report Management Report 70 Management Report

Results ofoperation, net assetsand fi 2.5 Financial position There are nooff As partofthecentralized fi 2.5.1 Principlesandgoals offi 2.4.2 Internallygenerated intangibleassets andoff GmbH. The Company’smainliabilitiesare denominatedineuro. The Carwash Operations GmbH,fi fi Internally generated intangibleassets,whichhaveapositiveeff cultivated overmanyyears.Mostlyduetoitsglobalpresence, theCom- equaled € 35.5m asofthebalancesheetdate.The subsidiary, WashTec could bedeployedforfuture operations andfor discharging obligations, proximity tothecustomers. pany isinthepositiontooff base whichhasbeenbuiltupandexpandedovertheyearswith respect how andexperienceofWashTec employeesaswelltheknowledge line totaling€ 46.3m. The credit line,whichwas notutilizedbutwhich interest rate swaps.For the swaps,interest rates ranging from 2.572% prove planningcertainty, WashTec usesthecustomary instrumentslike reduce theriskposedbyageneral increase ininterest rates andtoim- base interest rate oftheloanisvariableandlinked toEURIBOR.To sale andleaseback transactions. the WashTec Group are fi the WashTec Group’s ownsalesandservicenetworkwhichhasbeen Anotherkeyfactorofsuccesshasbeen to research anddevelopment. the WashTec business, include,aboveall,thecomprehensive know- to 2.580% are set. As ofDecember31,to 2.580%are set. 2012,theGroup hadacredit nancial instruments -balance sheet fi nancedthrough WashTec CleaningTechnology nancial position nancial management, thecompanieswithin nancialmanagement, er WashTec products andservicesinclose nancesitsequipmentinvestments using nancial management nancialinstruments. -balance sheet ect on The Additional informationconcerningthefi 2.5.2 Cashfl as of December 31 3.5 3.5 1.0 31 December of as equivalents 16.5 cash and Cash equivalents cash and cash in change Net –3.5 fi from cash in Change fl cash Free activities investing from cash in Change fl cash (net activities operating from cash in Change taxes before Earnings (in %) qiyrto >3% 46.1% 0.3 >35% 2012 Value <2.5 agree- loan per value Target shares * treasury Incl. ratio* Equity ratio gearing EBITDA covenants) ment (fi in €m, oprtv fi * Comparative entitled, “Financingrisks”. can befoundundertheopportunitiesandriskreport inthesubsection the endofyear(prioryear:1.3). EBITDA gearingratio diff erences possible due to rounding-off to due possible erences o) 23.1 ow) o 19.6 ow gures adjusted pursuant to IAS 8, see Note 7 in the Consolidated Notes Consolidated the 7in Note see 8, IAS to pursuant adjusted gures ow statement nnigatvte –18.6 nancing activities (netfi nancialdebt/EBITDA) equaled0.3asof nancial

2012 nancingoftheWashTec Group –20.3 2011* –11.9 –11.9 –8.8 17.2 2.6 8.4 34.6 108.4 8.4 133.3 60.2 34.3 238.7 Change Value 2011 Value 38.6% 1.3 Net cashfl owat€23.1m The Company isconstantlytakingmeasures tooptimizeandimprove € 23.1m (prioryear:€ 17.2m). This increase wascaused,aboveall, (current trade receivables +inventories–current trade payables)de- Cash infl Net cashoutfl clined from € 75.5m to€ 73.1m. The ratio ofnetcurrent assets to year 2012(prioryear:€ 8.8m) andwasattributableprimarily tothe management. by changesinthenetcurrent assetsduetoeffi revenues decreased slightlyto0.24(prioryear:0.26). in informationtechnologyandproduct development. investments madeinthemanufacturingsiteCzechRepublic and working capital.Byvirtueofthesemeasures, the Net cashflow(in €m) ow from operating activities(netcashfl ow from investingactivities 33.0 082009 2008 20.7 29.1 2010 17.2 equaled€ 3.5m infi 012012 2011 cientworkingcapital net current assets ow) 23.1 climbedto scal

The scheduled write-downofassetswasdoneonthebasisstatu- The focus oftheCompany’sinvestmentswasoncapitalexpenditures in To theextentgoodwillwas capitalized, itisnotamortizedonasched- € 20.3m). The cashoutfl 2.5.3 Investmentsandwrite-downs Cash andcashequivalents Cash outfl Free cashfl vested mostlyintheCzechRepublicmanufacturingsiteand product development. development andonIT. Intheprioryear, theCompanyhadlikewisein- over theirordinary usefullife.The assetsare subjecttoanimpairment ance sheetdate,December31, 2012.The Companywas,atalltimes, an annual impairment test. The basisforthistestis themid-termbud- an annualimpairmenttest. in apositiontomeetitspaymentobligations. lease liabilities. repayment ofloansaswelltherepayment ofthelong-termfi rule, theassetsare amortizedordepreciated on a straight-line basis get of2013through 2015attheGroup level. uled basis.Managementdoes, however, subjectcapitalizedgoodwill to to effi ties) improved verysignifi tory requirements andtheaccountingprinciples setbyWashTec. Asa the manufacturingplantlocatedinCzechRepublic,onnew product test asoftheendfi cientworkingcapitalmanagement. ow from fi ow (netcashfl nancing activities owin2012includedinterest payments,the cantlyto€ 19.6m (prioryear:€ 8.4m) thanks scalyear. owlesscashoutfl rose from € 2.6m to€ 3.5m asofthebal- Results ofoperation, net assetsand fi equaled€ 18.6m (prioryear: owfrom investingactivi- nance nancial position Focus of investments in 2012: Newproduct develop- IT Investments in Management Report ment in CzechRepublic manufacturing plant 71

Management Report Management Report Number ofemployees increased to1,674 72 3 Management Report

Results ofoperation, net assetsand fi 2011, WashTec alsoimplementedtheCompensationMaster Agreement Additional performanceindicators 3.1 Employees (prior year:1.6%) andinalongaverage periodofservice,whichis16.9 (Entgelt-Rahmenabkommen orERA). Total 1,674 1,674 Total Compared tothestaffi In Germany, theWashTec Group issubjecttothecollectivewageagree- WashTec’s employeesare asignifi Dec Dec 31, 2012 Number ofemployees Production, technology technology Production, Finance and administration 167 167 administration and Finance Sales and service 1,005 1,005 service and Sales employees onanannualaverage basis(prioryear:1,660). of employeesrose by23to1,674. Afteradjustingforacquisitionsand years (prioryear:16.5years).All executiveemployeeshavecontracts year comparison.WashTec employedanaverage numberof1,650 ments thatare inplacewiththetrade union,IG Metall. InJanuary individually agreed objectives. neration componentsare linkedto theGroup earningsandtomeeting ple, isrefl mercial success.WashTec employee satisfactioninGermany, forexam- sourcing measures, thenumberofemployeesfell by22onayear-to- and development 502 502 development and with fi xedandvariable remuneration components. The variableremu- ectedinthelowlevelsofemployee turnover, whichis1.3% ngstatusonDecember31, 2011, thenumber nancial position cantfoundationoftheGroup’s com- Dec 31, Dec 2011 1,006 1,651 473 172 Change –1 23 –5 29 9001, 14001andSCC(SafetyCertifi 3.2 Quality and environmental management, Sustainability 3.2 Qualityandenvironmental management, Average numberofemployeesbyyear German Technical Control Association (TÜV). WashTecGerman Technical Control Association(TÜV). thusmeetsthe High-quality products provide thebasisforWashTec’s technological WashTec feelscommittedtotheprincipleofecological sustainability assumes thatthe demandforwaterreclamation orwater retention will and therefore alwaysoperates itsbusinessundertheconditionthat actively contribute totheprotection andpreservation oftheglobally are keycomponentsofWashTec’s corporate philosophy. The Company materials andresources beused as effi limited resources ofenergy andraw materials. increase. Thus, theWashTec Group’s businessmodelandproducts requirements ofinternationallyrecognized standards andisDIN ISO health andsafetyprotection, whichisauditedatregular intervalsbythe has anextensivemanagement system forquality, the environment, Quality,leadership onthemarket. safetyandenvironmental protection grow sincetheshortage ofwaterasaresource willonlycontinueto 1,561 082009 2008 1,553 1,596 2010 cateContractors) certifi cientlyaspossible. The Company 1,660 2011 1,650 2012 ed. enhanced byinnovations should becontinuously The range ofproducts 14 – 30 litersperwash.The AUWA product program issuperbly harmo- The strong focusofWashTec products onmattersinvolvingenviron- The research anddevelopmentactivitiesoftheWashTec Group are 3.3 Research anddevelopment Detailed informationregarding sustainabilitycanbefoundinthesus- WashTec isaleaderin innovation,andonceagainprovided proof WashTec off visitors. equipment tohandle ever-evolving vehicleforms and contours,to cus. The developmentwork alsostrives,aboveall,topreserve natural quirements ofcustomersinatimelyand eff question. defi order toguarantee environmentally-friendly carwashes.Inthisway, the and inmannerthat doesnotcausepaintabrasion, toadjust wash aimed atcontinuouslyenhancing theexistingrange ofproducts through amount offresh waterusedbyaroll-over carwashcanbereduced to resources, accelerate throughput times,tohandle thevehicleeff innovation andatcateringtothe individualdesignandprogram represented numerous product innovationssuchasthe“ACS” cartridge ika, whichwasheldinFrankfurt amMain inSeptember2012,WashTec by shareholders whoselecttheirinvestmentsonthebasisofclearly mental protection andsustainabilityisalsorefl mentally-friendly andnon-abrasive. retention ofahighlevelwaterquality. Thus, forexample,allprod- nized withallwaterreclaim systemsandalsosupportsinthiswaythe system forwashchemicals.The innovations were verywellreceived by ucts undertheAUWA “ecoline”are superblybio-degradable, environ- the addedbenefi thereof in 2012.Attheworld’slargest industrytrade fair, automechan- tainability report. nedcriteriarelating tothesustainabilityofcorporate group in ers waterreclaim systemsforallcarwashequipmentin tsforoperators andend customersare alwaysthefo- ective way. Inthisrespect, ectedinthestakeheld ectively The continuous improvement andfurtherdevelopmentoftheproducts, A technologicalproduct team,includingexpertsfrom Germanyand (prior year:€ 1.4m). Addedtothatare thecostswhichcouldnotbe oa ot 2.2 Total costs In 2012,thecapitalizeddevelopment costsoftheGroup totaled€ 1.4m aiaie ot 1.4 Capitalized costs WashTec canalsorely ontheideasandexperienceofitsemployees: WashTec attachesgreat importancetotheprotection ofitsinnovations Multi-year comparisonofcapitalized development Expenses 0.8 development atWashTec’s headquartersinAugsburg. concepts. Asawhole,more than50employeesworkinresearch and capitalized totaling€ 0.8m (prioryear€ 0.5m). abroad, is responsible fordevelopingnewtechnologicalsolutionsand an extensivedialoguewiththeindustryonthesematters. a collaboration thatseekstoidentifyasearlypossiblenewvehicle results as wellastheincrease intheeffi more important isthecollaborative workwiththeautomobileindustry; mands formore user-friendly carwashing.Alsobecomingmore and provide greater availability ofequipmentandtomeetcustomerde- respect to theconsumptionofresources, ensures asignifi specifi selling points. strategy istosafeguard innovationsthatprovide WashTec withunique forms, materialsandsurfacequalities.WashTec iscurrently engagedin than 700patents.The core conceptoftheWashTec Group’s patent through the useofpatents.The WashTec Group istheholderofmore tive advantageforWashTec. costs/development expenses in €m, callywithrespect totheimprovement ofthewashanddrying diff erences possibledue torounding-off Results ofoperation, net assetsand fi

2012 ciencyoftheequipmentwith cantcompeti- 2011 2010 0.5 0.4 1.9 1.9 1.4 1.5 nancial position

Management Report 73

Management Report Management Report 74 4 5 Management Report

Supplementary report, LegalInformation Supplementary report, Supplementary report The following textincludesthedisclosures inaccordance with The Company’s subscribedcapitaltotals€ 40,000,000 andisdivided Legal Information No signifi In accordance withsec.71bAktG,the Companyhasnorightspertain- WashTec AG occurred afterthebalancesheetdate. Signifi Sec. 315(4)no.1HGB“Subscribedcapital” Sec. 315(4)no.2HGB“Restrictions regarding votingrightsor Explanatory report bythemanagementboard Disclosures inaccordance withsecs.289(4),315(4)HGB– control. diff are noshares carryingspecialrightsgranting theirholders apowerof restrictions onvotingrights orrestrictions pertainingtothetransfer of has onevote.To themanagementboard’s knowledge, there are no ing toanytreasury shares itacquires. Inall otherrespects, eachshare restrictions aff into 13,976,970no-parvaluebearer shares, witheachshare granting secs. 289(4)and315HGB. shares. transfer” the samerights,inparticular samevotingrights.There are no erent classesofshares. The managementboard isnotaware ofany cant eventsafterthebalancesheetdate canteventsimpactingtheconditionofGroup and ecting thevotingrightsortransfer ofshares. There Source: Disclosure pursunttotheGermanSecuritiesTrading Act(WpHG) Management 3.5% Setanta Asset Mellon Corporation 3.1% Bank ofNewYork Holding 3.0% Diversity Industrie Free float28.0% Shareholder structure The Company’s votingrightsare currently distributedasfollows: There are noholdersorbearers ofshares withspecialrightsgranting To theknowledgeofmanagementboard, approx. 28%oftheCom- German SecuritiesTrading companiesthatholdeitherdirect or Act, Limited (15.3%)andKempen CapitalManagementN.V. (11.1%). Europe Development CapitalFundplc.(16.2%),SterlingStrategic Value No employeeshold ashare intheCompany’scapital. Sec. 315(4)no.5HGB“Control ofvoting rights,where employees Sec. 315(4)no.4HGB“Bearers ofshares withspecialrights” Sec. 315(4)no.3HGB“Direct orindirect capitalparticipations” indirect equity stakesexceeding10%ofthevotingrightsare EQMC powers ofcontrol. pany’s shares are infree fl hold ashare inthecompany’scapital” oat. According tothe fi oat. Paradigm CapitalValue Fund 3.8% Lazard Frères GestionS.A.S. 5.0% langfr. Investoren, TGV5.4% Investment AG für 5.6% Leifina GmbH&Co.KGetal. Management N.V. 11.1% Kempen Capital Limited15.3% Value Strategic Sterling 16.2% Capital Fundplc. EQMC Europe Development lingsmadeunderthe 179 and133AktGsecs.9.99.10 oftheArticlesAssociation. The Companyhasnotmadeuseofthe option tosetoutfurtherrequire- The appointment anddismissalofmembersthemanagementboard Amendments totheArticlesofAssociationare madepursuanttosecs. Association donotsetoutanyspecialrequirements withrespect tothe Association oftheCompany. Pursuanttosec.7.1 oftheArticlesAsso- Authorized capital (sec. 5.1Authorized capital (sec. oftheArticlesAssociation ofWashTec AG) Pursuant toaresolution adoptedbytheannualgeneral meeting of In accordance withtheArticlesofAssociationandcurrent in- Sec. 9.9oftheArticlesAssociation reduces thestatutorymajority Sec. 315(4)no.7HGB“Powers ofthemanagementboard toissue Sec. 315(4)no.6HGB“Appointmentanddismissalofmanagement dismissals. Membersmaybereappointed tothemanagementboard or ciation, themanagementboard consistsofoneormore members.The authorized tomakeonlyproofreading/non-editorial amendmentsto appointment anddismissalofoneorallthemembers manage- more occasionstheCompany’s registered share capital byuptoatotal rized, withtheconsent ofthesupervisoryboard, toincrease on one or requirement totheextentallowedbylaw. The supervisoryboard is ments foramendmentstotheArticles ofAssociation. have theirtermofoffi ment board. The supervisoryboard isresponsible forappointmentsand pointed bythesupervisoryboard toserveasspokesman.The Articlesof board currently comprisestwomembers,oneofwhomhasbeenap- number ofmembersthemanagementboard isdeterminedbythe is basedonsecs.84and85AktGaswellsec.7oftheArticles of shareholders heldonMay 5,2010,themanagementboard was autho- supervisory board. the ArticlesofAssociation. ternal rulesofprocedure ofthemanagementboard, themanagement and buybackshares” board membersandamendmentstotheArticlesofAssociation” ceextended. Contingent capital (sec. 5.2oftheArticlesAssociationWashTecContingent capital(sec. AG) Pursuant toaresolution adoptedbytheannualgeneral meetingof opportunities and thatariseonthecapitalmarkets. only to the extentthat the holdersofoptions (orcreditors) orconver- capital isadopted. This contingent capitalincrease willbecarried out credited againstthispro rata amountoftheregistered share capitalwill capital wasconditionallyincreased byup to€12,000,000,dividedinto credited against theaforementioned authorizedamountatthetime of €12,000,000onorbefore May4,2013byissuingnewno-parvalue commissioned bythemanagementboard andthensubjecttoanobli- erally be granted preemptive rights,unlessotherwiseprovided. The der agendaitem9;iftheforegoing conversionrightsordutiesoption on theauthorizingshareholder resolution adoptedonMay5,2010un- rized (subjecttotheapproval ofthesupervisoryboard) toexclude rect preemptive right).However, themanagementboard isalsoautho- basis ofsec.5.1 oftheArticlesAssociation (Authorized Capital);any be theamount by whichtheregistered share capitalisincreased onthe intended toenabletheCompany toreact rapidly andfl not madeuseoftheseauthorizations todate.The authorizedcapitalis new shares are issuedwillbethepro rata amountoftheregistered bearer shares inexchange forcashornon-cashcontributions,although new shares mayalsobeunderwrittenbyoneormore banks,whichare theshareholders mustgen- Inthisrespect, must betakenintoaccount. rights ordutiesnolongerexistbecausetheyhadbeenexercised asof whichwere granted duringtheperiodofthisauthorizationbased ist, shareholders’ preemptive rightsincertaincases as setoutinsec.5.1 of such credit willbemade whentheapplicableresolution forincreasing shareholders heldonMay5,2010,the Company’sregistered share share capital thatisattributabletothosenopar-value bearer shares, on gation tooff up to4,193,091 no-parbearer shares (Contingent CapitalI),although which theconversionrightsordutiesoption ex- the ArticlesofAssociationWashTec AG. The management board has the timenewshares are issued,thentheshares issued thereunder er theseshares totheshareholders forsubscription(indi- exiblytogrowth

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Legal Information Share buy-back Pursuant toaresolution bytheannualgeneral meetingofshareholders current €40,000,000ofregistered share capital.The totaltreasury or before May4,2013,theCompany’s ownshares forpurposesother on May5,2010,themanagement board wasauthorizedtoacquire, on conversion pricedeterminedinaccordance withtheaforementioned obligated toexercise theoptionorconversionrights,satisfytheirobli- anteed onorbefore May4,2013bytheCompanyoradownstream authorization resolution. The newshares willhavedividend rightsbe- issued inexchangeforcashcapitalcontributionsandare issuedorguar- participating bonds(oracombinationofsuchinstruments),which are rights underwarrant-linked orconvertiblebonds,participationrights registered share capital.The managementboard canopt to acquire ration Act(AktG),mayat notimeexceed10%oftherespective pany inaccordance with secs.71detseq.oftheGerman StockCorpo- provided thatnocashcompensationisgranted ortreasury shares orthe lieu ofpaymentthecashamountdue–grants itsCompanyshares, make useoftheiroptionorconversionrightsor, totheextenttheyare board is authorized, withtheconsentofsupervisoryboard, topre- sion rightsorpersonsobligatedtoexercise theirconversionoroption sury shares, whichare heldbytheCompanyorattributable totheCom- shares, whichare acquired underthisauthorizationandtheothertrea- shares of anotherpubliclylistedcompanyare usedtosatisfythoseobli- scribe additionaldetailsregarding theimplementationofcontin- gations. The newshares willbeissuedineachcaseattheoptionor gation toexercise theirconversionoroptionrights,totheextent group enterprise oftheCompanybasedonauthorizationgranted to gent capitalincrease. ginning inthefi than todealintreasury shares, uptoatotalof10% oftheCompany’s that theCompanyexercises anelectiveright–incompleteorpartial the managementboard bytheannualgeneral meetingonMay5,2010, scalyearinwhichtheyare created. The management 2013, theCompanymayrepurchase upto400,000ofitsownshares (representing approximately 2.86%oftheCompany’sregistered share Individual contracts concludedbytheWashTec Group (e.g.loanagree- Details regarding thebuy-back can befoundontheInvestorRelations Sec. 315IVnos.8+9HGB“Materialcontracts whichare subjectto visory board, decidedonAugust14,2012tolaunchaprogram forbuy- of achangecontrol. capital) onthestockexchange.Per December31, 2012,theCompany ments) provide fortheoptionofextraordinary termination intheevent had reacquired 32,234shares atanaverage priceof€8.94pershare. ing backtheCompany’sownshares. Duringtheperiodthrough May4, ity, theWashTec AG managementboard, withtheconsentofsuper- purchase are setforthintheinvitationtoWashTec AG’s ordinary annual section oftheCompany’swebsiteatwww.washtec.de. general meeting oftheshareholders in2010.In exercising thisauthor- fers directed atallshareholders. The exacttermsandconditionsforthe to allshareholders orbymeansofapublic invitationtosubmitsalesof- these shares onthestockexchange,by means ofapublicpurchase off a changeofcontrol provision inconnectionwith atakeoveroff er” er Multi-stage systemfor risks instituted identifying andmonitoring The international businessactivitiesoftheWashTec Group provide both Opportunities andriskreport Company’s mainbusinessprocesses are subjecttoaninternalmanage- In thisregard, allbusinessrisksare matchedagainsttheCompany WashTec hasinstituted amulti-stagesystemforidentifyingandmoni- Risk management counter-measures. defi der tomanagetheseopportunitiesandrisksinacontrolled manner, the opportunities andrisksthatare inextricablylinkedtoitsbusiness.Inor- any andallidentifi any riskismadeusinguniform criteria. Usingriskassessmentsurveys, and risksatanearlystagetoimplementthenecessarycounter- ability tocontinueasagoingconcern,canbereasonably identifi processes, analyzedandquantifi measures inatimelymanner. ment andmonitoringsystemthatisdesignedtoidentifyopportunities ing thisearlyriskidentifi management board, allmaterialrisks,whichthreaten theCompany’s months), andtotaketheappropriate stepsforlaunchingsuitablecoun- by future events,byusingshort-term andmid-termforecasts (24 ing concern.The aimofthissystemistoidentifyrisks,whichare posed 6.1 Opportunitiesandriskmanagement tial damage,thelikelihoodofoccurrence andtheeff the divisionalheads.These assessmentsfocusonthemaximumpoten- ter-measures aspartofastructured approach. Intheopinionof toring allrisksthatthreaten theCompany’sabilitytocontinueasago- ningandlaunchingsuitablecounter measures. The evaluationof edrisksare routinely reported byandqueriedfrom cationsystem. ed.Riskmanagementiscarried outby ectiveness ofany edus- The goal ofopportunitymanagementistoidentify, assess and manage At theendofthisreview, theso-called“netrisk”oractualriskpotential fi Opportunity management In general, thefollowingadditionalmechanisms are utilizedforthe 6.1.1 Monitoringandmanagementsystem at anearlystagefuture performancepotentialandtoengageinsuitable according tomore universalrisksatGroup level.The riskmanagement measures forimplementingnewstrategies andinnovations.The identi- monitoring revealed thatthere were nothreats totheCompany’sability monitoring andmanagementsystem: mentation according tospecifi risk situationfortheGroup ispresented. This, inturn,allows forseg- is isolated.Byaddingtogetherallindividualriskpotentials,thetotal system regularly monitorsthestatusofimplementation.The risk the changing overall conditions and environment. the changingoverall conditionsandenvironment. these purposesare constantlybeingdevelopedandadjustedtomeet tifying growth oreffi the Company. This appliesboth operationally andstrategically foriden- tinuing taskofbusinessenterpriseforensuringthelong-term successof to continueasagoingconcern. cationanduseofopportunities(opportunitymanagement)is acon- Product portfolioconference Monthlyandquarterly reporting Ongoingforecast calculations Annual planning Management meetings Extendedmanagementboard meetings ciencypotential.The systemsandprocesses for crisksinindividualbusinessdivisionsand

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Opportunities andriskreport These arrangements andmechanismsformthebasisforexisting The IKR covers theprinciples,procedures andactionsforensuringthe WashTec Group. Newprovisions andchangestoexistingrulesregarding 6.1.2 Internalcontrol systemfortheaccountingprocess (IKR) cured. Group-wide guidelinesforaccountingand measurement are of theaccountingandcompliance withtheapplicablelegalrequire- eff accounting are examinedinatimelymannerwithrespect totheirim- pact ontheWashTec Group. WashTec hasanextensively standardized intended toensure conformityandconsistencyoftheaccountingin nancial reporting andthepublishedannual fi ments. The objectiveofWashTec’s IKRistoensure thatreliability offi risk managementsystem. structure forweekly, monthlyandquarterly reporting, whichrefl statements ofthe Group companiesare analyzedinternallyinthe Group the applicablepolicies inatimelyandupdated manner. The fi Key projects follow-up Personnel planningand development Purchasing andsupplymanagement Compliance offi Risk offi Insurance policies Debtor/accountsreceivable management Internal audits Production andcapacityplanning Investment planning ectiveness andeconomicfeasibilityofthe accounting,thepropriety cer cer nancialstatementsare se- nancial ects - There were nochangesmade intheinternalcontrol systembetween All procedures andcompaniesare evaluatedaccording totheirpotential Compared totheprioryear, there havebeennomaterial changesinthe Opportunities are possiblefuture developments orevents,whichcould Department, whichreports directly tothemanagementboard. TheseDepartment, Risks are possiblefuture developmentsorevents, whichcouldleadto During theintegration ofnewlyacquired companies,theCompanyex- eff described opportunities andrisksexistwhichcould haveamaterial opportunity andriskstructure. AsofDecember 31, 2012,thefollowing on amonthlybasisusingGroup-wide budgetingandreporting tools. dards of the WashTec Group. anisms usedhere are describedbelow. and previously identifi and serviceactivitiesare gaininginsignifi amines whethertheIKRofacquired companymatchesthestan- performed, usually by the Controlling Department. The tools andmech- performed, usuallybytheControlling Department. reviews are carriedoutcontinuouslythroughout theentire year. Within business developmentaswell. nity. Ongoingcostoptimization andthesuccessfulstart-up ofnewsales pany. Apossiblefavorable eff lead toprojections ortarget variancesthatare favorable fortheCom- risk iscausallylinkedtoaperil. projections ortarget variancesthatare negativefortheCompany. The was prepared. 6.2 OpportunitiesandRisks the businessdivisionsthemselves,control measures are regularly the balancesheetdateanddayonwhichmanagement report ect onthecontinueddevelopment oftheWashTec Group. edrisksandreviewed bytheInternalAudit ect ofariskisalsoreferred toasopportu- canceforsuccessfulfuture The fi The global fi Climate changes,increasing congestionsonroads, highfuelcostsand Opportunities Likewise, lawsand regulations, suchasthebanon operation ofcar WashTec withanopportunity toexpanditsinnovationandmarketlead- States, SouthernEurope orGreat Britain,countriesthatare greatly im- Risks Risks 6.2.1 Financial andeconomic crisis,Euro crisis 6.2.2 Climateandenvironmental infl ership asaconsequenceofincreasing consolidationpressure. Asithas customer groups, whosefi eff among equipmentsuppliers.Thus, itcouldbecomemore diffi and, accordingly, reduce investments madeinvehiclewashequipment. have retreated from individualmarketsduetothesituation there. been noted,someindividualcompetitorsinregions andmarketspartic- ratio. meet certainfi ing diffi pacted bythecrisis.Acontinuationofcrisisandensuing fi is aff mental awareness couldresult infewervehicles on theroad inaneff bans oninner-city drivingtogether withroad tollsandgreater environ- some extentadverselyimpactingtheinvestmentbehaviorof individual ularly impactedbythecrisishaveencountered fi wash facilitieson Sundaysandpublicholidays, couldhaveanadverse tors orcardealersaswellindividualsub-marketsliketheUnited to protect the environment. Suchatrend coulddiminishwashactivity to protect theenvironment. ect onwashbehavior. ecting, above all,individualcustomerssuchasindependentopera- nancialandeconomiccrisistheEuro crisiscouldalsoprovide cultiescouldleadtoelevatedcompetitionandpricepressures nancialandeconomiccrisistheEuro crisisare stillto nancialcovenantsorratios suchastheEBITDA gearing nancingopportunitiesare limited.The crisis uences nancingdiffi cultiesand cultto nanc- ort The factthatfresh waterasaresource isbecomingscarcer andmore The establishment ofnewsalesandservicecompanies,theincreasing A falseassessmentorincorrect valuation ofthetarget couldhavean Moreover, theintegration ofnewcompanies intotheGroup mayturn Opportunities zations orinconnectionwithacquiring salespartners(e.g.,inrelation Risks 6.2.3 Establishmentofnewsalesandserviceorganizations vestment analysis. It cannot be ruled out, however,vestment analysis.Itcannotberuledout, thattheseanalyses out tobemore timeconsuming andexpensivethanplanned andcould of operation. Moreover, WashTec couldbeexposed torisksinconnec- erally wouldrequire theCompanytoraise additionaloutsidecapital. or incapableofimplementation. Anyeff or theCompany’sinvestmentanalyses willlaterprove tobeincorrect costly couldresult inanincrease inautomatedcarwashingwhich,if claim systems.Ifthestricterlegislationbeingenactedinvarious coun- adverse eff are based onananalysisofthemarketneedsandacorresponding in- a positiveeff manual washingortocarwashequipmentwhichdonothave waterre- produce specifi horizontal diversifi water by90%orapproximately 150litersperwashincomparisonto water reclaim systemsare used,couldreduce theconsumptionoffresh with waterreclaim equipmentcouldrise.Likewise,lawsandregula- tie-up humanresources. to personnelcostsandotheroperating costs forthenewinfrastructure). tion withstart-up lossesin establishingnewsalesandservicingorgani- through theacquisitionofcompaniesand companybusinessunitsgen- tions, suchastheprohibition ofmanualwashingvehicles,couldhave tries becomesmore widespread, thenthedemandforcarwashsystems ect ontheGroup’s netassets,fi ect onthe demand forcarwashequipment. crisksforWashTec. AlloftheCompany’sinvestments cationandthedevelopmentofnewproducts could orts toexpandtheorganization nancialpositionandresults Opportunities andriskreport Management Report 79

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Opportunities andriskreport As aconsequenceoftheshortage andincreasing costsoffossilfuelsand A freeze on investmentsbyindividualmultinationaloilcompaniesor A favorable start-up andsuccessfulintegration ofanyacquired sales Opportunities Risks from aggressive pricecompetitionresulting from decliningde- WashTec hasinstalled a systematicandextensivemarkettracking sys- Risks 6.2.4 Customers,competitionandmarket combined withthelaunchofnewproducts andmore extensivemarket emerge astheprevailing concept(e.g.,electricalcharging/battery swap of petrol stationsinitscurrent formcoulddecline.Nevertheless,itis enhancement, product range optimization,modifi enhancement, can bemitigatedpartiallybyusing measures related toongoingproduct years. InWashTec’s view, achangeduse inthepetrol stationswould and serviceorganizations couldimprove theWashTec Group’s market at petrol stations;electricalcharging athome).In theopinionofour its profi penetration, couldincrease theCompany’smarket share and improve position andearnings.The successfulexpansionoftheproduct range, not infl infl however,major customers, thisdevelopmentwillnot, haveasignifi presently unclearwhichutilityconcept fortheelectricalvehicleswill markets ormarketsegments. mand couldputincreasing pressure onpricesandmargins inindividual national oilcompaniescouldleadtoadeclineinrevenues forWashTec. the technicaladvancementand proliferation ofelectric vehicles,theuse terms andconditionsaswell capacityadjustments. tem. Riskstoearningsfrom decliningdemandorrisksfrom fallingprices the listingofothersuppliersduetonewtenderagreements withmulti- uenceonthenumber anduseofpetrol stationsinthe next5to10 uencethenumber ofwashes,butmerely thelocation of the ts. cationstopurchasing cant The current businessclimateaff This entailstheriskthatassumptions orestimates,whichwere The evaluation ofrisksandopportunitiesplaysadecisiverole whenre- Opportunities Decisions tomakeinvestmentsrequire, amongotherthings,themaking WashTec planstosupportthesignature rulefor maintainingtheso- Risks 6.2.5 Investments viewing potentialinvestments. opportunities toinvestinproducts andmarketstoexploitthe eff curement andproduction ofindividualcomponents inthefuture. called “4-eyes-principle” (secondsetofeyesprinciple) through the defi order toreasonably managesuchrisk,theCompany hasadetailed owed onanycommittedcapital, non-scheduledwrite-downs,etc.In of assumptionsandestimatesaboutfuture developmentsandtrends. ket share oftheinstalledcarwashbasecouldhavepositiveone-time its leadingmarketposition.The solidstructure oftheCompanyoff penditures are summarized intheannualinvestmentplan,submitted rized tomakecertainexpenditures. Larger investments orcapitalex- policy forapproving investmentsandotherexpenditures. The policy position andresults ofoperation oftheWashTec Group duetointerest be made.Wrong investmentswouldencumberthenetassets,fi made, willnotmaterializeasplanned orthatwrong investmentswill needed, react toanychangesinatimely manner. weakened positionofoneormore competitors. Anincrease inthemar- workfl washes. The Companyiscarefully followingthistrend andwill,if further effi to themanagement board andthenapproved bythesupervisory board. ects. The increasingly global purchasing activitiescouldmeanthat nesupperthresholds andidentifi owsystemwhich iscurrently implementedonlyinGermany. ciencypotentialcouldberealized withrespect tothepro- ords WashTec anopportunitytoexpand esthegroups ofpersonsautho- nancial ers Opportunities Opportunities Investments off Even ifpatentshaveapresumption ofvaliditybyoperation ofthelaw, WashTec willinfringethird partypatentsbecauseWashTec’s competi- WashTec Group’s research and developmentactivitiesare aimedat WashTec hasalarge numberofpatentsandvariouslicensesthatare Strategic decisionsare takenonlyafterthere havebeendetaileddiscus- Risks 6.2.6 Innovations very importanttotheGroup’s business. cost situation. theopportunitytostrengthen WashTec’son thetypeofinvestment, developments incarpaints.We currently donotanticipateanysus- car washbusinesscouldpermanently impactthedemandforWashTec development ofnewsubstitute innovationsinsectorsoutsideofthe of intellectualproperty rightscouldimpairtheWashTec Group’s ability equipment and quicklyandeffi and withthesupervisoryboard. and receive patentprotection. Competitorinnovationsaswellthe market andcompetitivepositionand/ortoimprove earningsorthe products. WashTec’s R&Ddepartmentisconstantlymonitoring new reduce itsfuture earnings.Furthermore, itcannotberuled outthat be validorthatanypatentclaimsare enforceable. This appliesaboveall ments of customerswith respect tofacilitydesigns andprograms. sions onthemanagementboard, withintheextendedmanagergroup tained impactonthecarwash business intheshort- ormid-term. tors, justlikeWashTec itself, register numerous inventionsaspatents to exploititstechnologicallead togenerate profi to theAsianmarkets.Insuffi the granting ofpatentsdoesnotnecessarilymeanthatthepatentwill further developing theexistingproduct range, developingnew car wash er numerous opportunities.These include,depending cientprotection ortheactualinfringement cientlymeeting theindividualrequire- tsandcouldthereby The new washequipmentdevelopedonthebasisofongoingresearch A declineindemandusuallyleads tocapacityadjustmentsinthe Quality andprocess riskscanariseinconnectionwithnewproduct Dependency onsuppliersmeans thattheCompanyrequires astrictsup- Input materialsare subjecttothefollowingrisks:Supplierscheduling HSE requirements (health,safety, andenvironment). Recklessviolations WashTec’s innovationshavealready received numerous awards atin- 6.2.7 Qualityandprocess risks 6.2.9 Capacityrisks 6.2.8 Supplierrisks dustry trade fairs and were then successfully launched on the market. dustry trade fairsandwere thensuccessfullylaunchedonthemarket. of newITsystems.Furthermore, WashTec isrequired tomeetveryhigh ongoing qualitycontrol ensure thatallprocesses intheCompanyare early aspossible. The targeted use oftemporary staff capacity adjustments. and signifi and developmentactivitiesdoesnotonlymeettheneedsof Com- pany’s existingcustomers,butalsohelpstoacquire newcustomers plier andprocurement managementsystem.Aclearsystemisinplace risks, product availabilityrisks,qualityrisks andpurchase pricerisks. launches andwithchangestointernalprocesses andtheintroduction regularly monitored anddocumented. position andresults ofoperation overthelong-term.Certifi by individualemployeescouldmeanthatWashTec loses majorcon- production capacityplanning, WashTec aimsto identifycapacityrisksas processing workfl sonal workingmodels orshort-time work facilitatespartialshort-term those thatare reliable andquality-bound. for thispurpose,allowingWashTec toassesssuppliers andemployonly tracts, prompting adeterioration oftheCompany’snetassets,fi cantlyexpandthemarketposition. ow. Byusinginternal markettracking andongoing andfl Opportunities andriskreport exiblesea- cationand nancial Management Report 81

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Opportunities andriskreport The Company facesariskoftakeoverifitsstockmarketvaluationfails The baseinterest rate ontheloansisvariableandlinked toEURIBORas A takeovercouldchangetheWashTec Group’s existingstrategy and A bankingsyndicatehasmadeavailable–inmajorpartsloans and fi fi Some oftheWashTec Group’s agreements (e.g.,loanagreements) 6.2.11 Financial risks 6.2.10 Takeover risks could, insomecases,result intheforfeiture oflosscarry-forwards. discounted cashfl cause. or abreach ofamaterialcontractual obligation(suchasabreach ofthe operating fl other localcredit linesamountingto€46.3muntilDecember2014.The economic crisiscouldmakeitmore diffi in control. by independentresearch analysts. ny’s fi ratios which,inturn,couldhaveadirect adverse eff stipulate aterminationforcauseoptionintheeventthere isachange should occur(suchasachange ofcontrol orthelossofakeysubsidiary) well astheCompany’sactualdegree of indebtedness. The fi to suffi the termofloan,WashTec Group mustcomplywithcertain terms andconditionsunderthesyndicatedloanslimitfi nancialcovenants),thentheagreement maybeterminatedforgood nancialcovenants.Ifcertaineventsdescribedinthecredit agreement nancingsituation. cientlyrefl exibilityoftheWashTec Group. Thus, for example,during ecttheCompany’slong-termintrinsicvaluebasedon owcalculationsorEBITDA gearingratio performed culttosatisfycertainfi ect ontheCompa- nancialand nancialand nancial The Group entersintotransactions withcreditworthy third partiesonly. There isapotentialliquidityriskwhenthere mightnotbeadequate One ofthekeybusinessobjectivesistoensure thatWashTec companies By virtueoftheUSDtransactions triggered bythesubsidiaryin In order tokeepthedelcredere riskaslowpossible–ifthecustomer United States,anychangesintheUSD/EURexchangerate couldimpact 6.2.13 Liquidityrisks 6.2.12 Exchangerate risks 6.2.14 Credit risks derivatives thatwere executedinJune2011. Operational risksresulting credit riskconcentrations within theGroup. dence ofcredit standingorfi does nothaveafi each month–theCompanyisabletoidentifypotentialbottlenecks ina cash todischarge thefi allowances are suffi are solvent atalltimes.Usingtheimplementedcashmanagementsys- lized credit linesensure thesupplyofliquidity. program, theliquidityriskisviewedaslow. low levelofindebtednessand the successofcashmanagement the section“FinancialRisks”. for theGroup duetotheirlowvolumeorare already describedunder from other individualtransactions inforeign currencies are immaterial the fi to controls. For new regional customers,theCompanyrequests evi- timely mannerandtoensure thatappropriate stepsare taken.Unuti- tem –forexample,anannualizedrolling group liquidityplanexecuted nancialstatements.Inorder toavoidhighrisks,WashTec relies on rst-rate credit rating – order acceptancesare subject cienttocover the actualrisk.There are no material nancialobligationsastheyfalldue.Giventhe nancing.Itisassumedthatthe baddebt The WashTec Group hasrecognized losscarry-forwards intheGerman Identifi 6.2.15 Tax risks or earningspershare. The losscarry-forwards inGermanywillpresum- could result inexpensesarisingfrom thevaluationofcapitalizedde- occurrence andtheirpotentialfi ably beusedupinlessthanthree years. and internationalcompanies.Changesintaxlegislation,which relate to aggregated likelihoodforthevariousriskcategories,following 6.3 Overviewofcorporate risks ferred tax assetsandhaveanadverseeff the taxrate ortheextenttowhichlosscarry-forwards canbeused, table usesthree categories:“high”,“medium”and“low”. edrisksare assessedwithrespect tothelikelihoodoftheir nancial impact. Inorder todepictthe nancialimpact. ect onconsolidated equityand/ The totalrisksituationoftheWashTec Group remains manageable. aevrrss mdu medium medium Takeover risks a ik lw medium low Tax risks Given thegoodbalancesheetstructure, nomaterialfi Climate andenvironmental infl aaiyrss eim medium medium medium medium low low Capacity risks Quality andprocess risks Customers, competitionandmarket rdtrss eim medium medium Credit risks occurrence of Likelihood impact Possible fi iaca n cnmccii,Er rss o medium low Establishment ofnewsalesandservice Financial andeconomiccrisis,Euro crisis netet o low low Innovations low Investments low iudt ik lw medium low medium low low medium Liquidity risks Exchange rate risks Financial risks organization medium medium upirrss o low low Supplier risks existence ofthe WashTec Group. currently identifi are noindividualrisks,eithercurrently orinthe foreseeable future, ment ofallsingle risksdoesnotreveal anythreat tothecontinued basis oftheinformation,which currently existsandispredictable for which couldthreaten theCompany’sexistence.The totalriskassess- 6.4 Total riskassessment the foreseeable future, theCompany’smanagementbelievesthatthere ablewhichcouldadverselyaff une mdu medium medium uences ect WashTec. Onthe Opportunities andriskreport nancialrisksare nancial Management Report 83

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Outlook 7.2 Marketsand products 7.1 Businesspolicyandstrategy This outlook report takesintoaccountrelevant factsandeventswhich The marketdriversoftheWashTec businesswillalsopersistin 2013, Outlook In 2013andsubsequentyears,WashTec willcontinuetoadhere toits WashTec Group shouldcontinue toincrease incomingyearsthrough

ciency, inorder tothereby generate highcash fl expand marketshares inanumberofregions. The profi direction orpositioningoftheWashTec Group, i.e.thedevelopmentof ever, in viewofitsstrong marketposition,good balancesheetstructure could impacttheexpecteddevelopmentandbusinessperformance of as betterpositionedthanmostofitscompetitors.The future strategic and globallyuniquesalesservicenetwork,theCompany sees itself play apivotalrole here. Accordingly, there are opportunitiestofurther innovation andgreater internationalizationandprofessionalization, will have lessofanimpactonthedevelopment oftheoperational business but inviewoftheuncertaingeneral economic conditions,theymay wash industry. How- This isdependent ontheeconomicenvironment. were known atthetimeofpreparation ofthereport andwhich this newdirection andthrough aconstantimprovement in costeffi ther expandingitsmarketandtechnologyleadershipinthevehicle fundamental businesspolicyandstrategy ofatleastmaintainingorfur- the WashTec Group. than wouldbeexpectedinthe mediumtolong-term. ow. tabilityofthe - The WashTec product range issuccessfullyestablishedinmore than60 The number ofvehicles,whichhasalready risenverydynamicallyinthe Group is intheAsianbusiness,particularlyChina.Itisanticipated Over thelong-term,greatest area ofpotential fortheWashTec WashTec isplanningthe gradual expansionofactivitiesthere inorder equipment aswelltheassociated peripheral devices,washchemicals countries worldwideandwillcontinue tocomprisealltypesofcarwash currently anonstarterinthisregion, willincrease greatly. Therefore, and waterreclaim systems.WashTec alsooff and tosetthestageforrealizing thegreat potential forgrowth inthat and thebrokering offi region. past years,willcontinuetoincrease accordingly. Inconnectionthere- nue drivers. packages coveringtheentire lifecycleoftheproducts sold.Inaddition with, itisexpectedthatthepopularityofautomatedvehiclewashing, wash equipment andtherelated serviceare theCompany’smajor reve- to capture aleadingmarketpositioninSouthAsiaandSoutheast that theeconomyandpercapitaincomethere willcontinuetogrow. to maintenance of the equipment, thisalso includesoperator models to maintenanceoftheequipment, Environmental issues:More stringentrequirements andimplementa- Technology/convenience: Increasing demandswithrespect tospeed, Economy: Increase inthenumberofnewlyregistered vehiclesand convenience andqualityofthewash resource labor costs,risingpercapitaincome tion ofenvironmental lawsandregulations –fresh water as alimited nancing for the equipment. The saleofroll-over nancingfortheequipment. ers comprehensive service “fi 7.3 General economicconditions According toinformationprovided bytheInternationalMonetaryFund (IMF), theglobaleconomyshouldexpandby3.6%in2013.The great- IMF growthprognosisfor2013in% Experts seeanopportunityforaslightgrowth of0.2%.WhileItalyand Spain shouldremain boggedinarecession, theGermanFederal Gov- Slight recovery oftheworldeconomyexpectedin2013 economy intheUnitedStatescoulddevelopmore favorably thanEu- ernment hasannouncedthatitexpects0.4%growth forGermany. The est challengeremains solvingthesovereign debtcrisisintheEurozone. according totheIMF. Japan’seconomyishopingfora1.2% growth rope. Should themeasures thatwere adoptedtoavoidtheso-called report somewhat stronger economicoutputgrowth at8.2%. rate. As in previous years,theimpetusforgrowth intheworldeconomy should againstemfrom developingandemerging countriesin2013.A government actiontopromote theeconomy, Chinashould once again growth rate forthisgroup ofcountriesisforecasted at5.6%.Thanks to information provided by the German Federal Government, January2013 information provided bytheGerman Federal Government, Source: InternationalMonetary Fund(IMF),World EconomicOutlook,October 2012and Developing andEmergingMarkets scalcliff Central andEasternEurope ” runsmoothly, thenthegrowth there in2013couldbe2.1%, Industrialized Eurozone Germany Nations World China Japan USA +0.2 +0.4 +1.2 +1.5 +2.1 +2.6 +3.6 +5.6 +8.2 7.4 WashTec businessdevelopment The management board isaware thatrisksexistinlightofthislack Group in termsofcontributiontoearningsandpotentialforoptimiza- Due tothecurrent lackofclarityintheoverall developmentinthesub- In 2013,WashTec willexaminealloperations andactivitiesofthe Due tocosttransfers, WashTec AG expectsstablerevenue development duction measures ifnecessary–intheeventofsignsaworsening order to be abletoreact quicklyandeff ously followsongoingdevelopments,particularlyintheEurozone, in clarity, whichcouldhavesignifi on theprofi on prioryearlevel. Resultsinthefuture willcontinueto bedependent decline slightly. of salesstructures andthefurtherstrengthening ofthelocalorganiza- years isexpectedtobehigher than infi and earnings development. The managementboard thereforeand earningsdevelopment. continu- markets, anyforecast for2013ismarkedbyconsiderable uncertainty. board to continuethestrategic repositioning oftheCompanyandto ing Europe andAsia/Pacifi not beabandoneddespiteaconsolidationofthebusiness.In thiscon- policy andfocusonprojects, areas andregions thathavethebest should bedevelopedhere forexamplethrough thegradual expansion growth prospects forthemediumterm.Future-oriented projects will while anincreasing volumeofcapitalexpenditure isexpectedinEmerg- further improve operating profi the economicsituation.Furthermore, itisthegoalofmanagement for 2013and2014 andthusalsocontinuedpositive operating results the comingyears,weexpectemployee numberstoremain stableor text, thefocus inCore Europe willbeonreplacement investments, text, tion. WashTec willpursue aconservativeexpenditure andinvestment tions. The overall capitalexpenditure volumeforthenexttwofi tdistributionpotential ofthesubsidiaries. c(especiallyChina).Marketopportunities tability. cantinfl uenceontheforecasted revenue scalyear2012.Furthermore, in ectively –with furthercostre- scal Outlook Management Report 85

Management Report Management Report 86 Management Report

Outlook The Company, asawhole,isprojecting thefollowingregional develop- By virtueofthelong-termfi balance sheetstructures, WashTec believesthatitiswell-equippedfor ments for2013: strengthened. future changes andwillcomeoutofthediffi Asia/Pacifi nogeneral market NorthAmerica:Despiteastabilizing market, Emerging Europe: The Company expectsthatthemarketinEmerging Core Europe: From theCompany’s perspective,themarketinCore Europe will onceagaincontinuetogrow in2013.Thus, in combina- Europe will againremain diffi only slightrevenue andearningsgrowth. Collectivewageincreases and economiccrisisaswelltheincreasing competitionandon- lower earningsperformance,whereby the largest share inrevenue lower earningsperformance. ment isforsignifi recovery is in sight. WashTec’srecovery isinsight. eff medium-term only. Thus, inthisregion, theCompanyisassuming sumably leadtoconsiderable revenue growth withaproportionately small profi growth will be expected from the Chinese market. growth willbeexpectedfrom theChinesemarket. growth. A normalizationofcompetitiveintensityisanticipatedinthe going pricingpressure willalsoaff would poseanadditionalrisktoearnings. tion withtheexpandedsalesactivities,expectationinthis seg- focus oncontinuedimprovement ofearnings inorder toachievea c:The continued expansionofthesalesstructures willpre- tonaslightlyrisingrevenue stream. cantrevenue growth butwithadisproportionately nancingoftheCompanyanditssolid cultin2013.The continuingfi orts inthissegmentwillstrongly ect future revenue andmargin cultmarketsituation nancial The corporate strategy iscurrently underreview. The mid-termplanning The launchedeffi Thus, in the comingyears,revenues andearningsgrowth willdepend Augsburg, March 19,2013 35%. Initsoutlook,themanagementboard assumesthatthesekey fi In the past, WashTecIn thepast, hasshownthatitbeenrelatively unaff WashTec willalsocontinue tofocusonoptimizingtheworkingcapital WashTec islookingforslightrevenue growth of1 – 2% (exchangerate aaeetBad Management Board Management Board r ügnRuet Dr. Stefan Vieweg Dr. Jürgen Rautert pksa fte Member ofthe Spokesman ofthe corresponding developmentofearnings. This prognosis isbasedonthe expectstablerevenues andearningswithgrowth rates upto2%. and eff are anEBITDA gearingratio ofbelow2.5andanequityratio ofover and oneff adjusted) fortheentire Group infi assumptions thatexchangerates willremain unchangedandcostswill and ondefendingthemarketpositioninCore Europe. For 2013we in Core Europe mustbetakenintoaccount. theincreasingly vola- increase in adjustedearnings.Inthisassessment, increase slightly. revenues willcontinuetogrow slightlycompared to2013, witha represented onlyabout10%oftheprioryear’srevenues. by conditionsintheeconomy;indeed,economicslump 2009 were agreed toinconnectionwithrefi will beadoptedandcommunicated bythelastquarterofthisyear. tile marketenvironment andthecorresponding businessdevelopment to alarge extentonexploitinggrowth opportunitiesinnewmarkets gures willalsobemetinthefuture. orts overseasallcreate theexpectationthatin mid-term ective fi ciencyprograms, anongoinginnovationcampaign nancial management. Key fi nancialmanagement. scalyear2013,withaproportionate nancingtheCompanyin2011, nancialcovenants,which ected Outlook Management Report 87

Management Report 88 Consolidated Financial Statements of Washtec AG

Consolidated Financial Statements of WashTec AG Consolidated Income Statement 90 Statement of Comprehensive Income 91 Consolidated Balance Sheet 92 Consolidated Cash Flow Statement 94 Statement of Changes in Consolidated Equity 95

Notes to the Consolidated Financial Statements Statements Financial of WashTec AG 96 Responsibility Statement 138

Further Information Auditor’s Report 140 Financial Statements of WashTec AG (HGB Short Version) 142 WashTec Worldwide 144

89 Consolidated Income Statement

in € Jan 1 to Jan 1 to See notes for further explanations to the Consolidated Income Statement. The notes Dec 31, 2012 Dec 31, 2011* to the Consolidated Statement form an integral Notes adjusted part of the Consolidated Financial Statements for fi scal year 2012. Revenues 8 301,535,828 293,262,274 Rounding diff erences may occur. Other operating income 9 4,301,361 4,836,273 * Comparative fi gures adjusted per IAS 8, Capitalized development costs 1,427,105 1,383,577 see item 7 in the notes to the consolidated Change in inventories of work in progress 792,996 493,059 fi nancial statements Total 308,057,290 299,975,183

Cost of materials Cost of raw materials, consumables and supplies and of purchased material 103,950,751 105,955,214 Cost of purchased services 22,982,988 21,447,364 126,933,739 127,402,578

Personnel expenses 10 100,210,784 104,597,709

Amortization, deprecation and impairment of tangible and intangible assets 9,986,095 29,527,743 Other operation expenses 11 50,419,930 47,944,912 Other taxes 1,306,716 854,811 Total operating expenses 288,857,263 310,327,752 Management Report Management EBIT 19,200,027 –10,352,569

Other interest and similar income 95,390 172,986 Interest and similar expenses 2,812,175 1,724,797 Financial result 12 –2,716,785 –1,551,811

Financial Statements Financial Result from ordinary activities/EBT 16,483,242 –11,904,380

Income taxes 13 –6,433,107 –2,697,208

Consolidated proﬁ t for the period 10,050,135 –14,601,588

Average number of shares 13,962,989 13,976,970

Earnings per share (basic = diluted) 14 0,72 –1,04

9090 Consolidated Financial Statements of WashTec AG Consolidated Income Statement Statement of Comprehensive Income

in €k Jan 1 to Jan 1 to See notes for further explanations to the Statement of Comprehensive Income. The notes Dec 31, 2012 Dec 31, 2011* to the Consolidated Statement form an integral part of the Consolidated Financial Statements Results after taxes 10,050 –14,601 for fi scal year 2012. Rounding diff erences may occur. Changes in the fair value of fi nancial instruments used for * Comparative fi gures adjusted per IAS 8, hedging purposes recognized under equity 673 –506 see item 7 in the notes to the consolidated fi nancial statements

Adjustment item for the currency translation of foreign subsidiaris and currency changes 266 –75

Exchange diff erences on net investments in subsidiaries –126 339

Actuarial gains/losses from deﬁ ned beneﬁ t obligations and similar obligations –1,567 –238

Deferred taxes on changes in value taken directly to equity 283 124

Valuation gains/losses recognized directly in equity –471 –355

Total income and expense and valuation in gains/losses recognized directly in equity 9,579 –14,956 Financial Statements Financial

Statement of Comprehensive Income Consolidated Financial Statements of WashTec AG 91 Financial Statements Management Report 92 92 Consolidated Financial Statements ofWashTec AG Consolidated BalanceSheet–Assets Tax receivables receivables Tax receivables Trade receivables Tax receivables Trade Total current assets assets current Total Total non-current assets assets non-current Total Total assets assets Total Cash and bank balances balances bank and Cash assets Other Other assets assets Other Goodwill

Property, plant and equipment equipment and plant Property, Inventories Inventories Deferred tax assets Deferred assets tax assets Intangible Current assets Current Non-current assets Non-current in € in

Consolidated Balance Sheet Notes 22 22 23 20 20 21 21 18 16 19 17 17 87,005,748 96,600,519 183,606,267 183,606,267 317,764 1,403,564 8,977,370 42,313,530 37,497,989 1199 6,8 1,210,691 15,304,363 5,584,162 4,602,593 69,887 3,365,306 3,771,477 3,458,841 111,909 36,648,658

Dec Dec 31, 2012 5,916,187 5,916,187 174,115 43,014,863 43,014,863 adjusted adjusted Dec 31, 2011* Jan 1, Jan 2011* 31, Dec 2011* 195,004,687 217,083,381 195,004,687 0,3,3 117,670,963 101,534,433 92396 37,378,273 39,273,936 34024 99,412,418 93,470,254 23353 58,192,039 42,313,523 61852 39,934,929 46,158,532 14954 41,920,722 41,459,574 9,319,436 9,862,248 9,319,436 ,40 6 7,015,377 268 0, 7,14 0,0 252,817 200,501 2,6 387,967 823,860 7,7 39,793 277,271 fi see item7inthenotestoconsolidated fi * Comparative Rounding diff Financial Statementsforfi integral partoftheConsolidated the ConsolidatedStatementforman The notesto Consolidated BalanceSheet. See notesforfurtherexplanationstothe nancialstatements erences mayoccur. gures adjustedperIAS 8, scalyear2012. Consolidated Balance Sheet – Equity and Liabilities

in € Dec 31, 2012 Dec 31, 2011* Jan 1, 2011* See notes for further explanations to the Consolidated Balance Sheet. The notes to Notes adjusted adjusted the Consolidated Statement form an Equity integral part of the Consolidated Financial Statements for fi scal year 2012. Subscribed capital 24 40,000,000 40,000,000 40,000,000 Rounding diff erences may occur. Contingent capital 24 12,000,000 12,000,000 12,000,000 * Comparative fi gures adjusted per IAS 8, Capital reserves 25 36,463,441 36,463,441 36,463,441 see item 7 in the notes to the consolidated fi nancial statements Treasury shares 26 –431,021 0 0 Other reserves and exchange rate eff ects 27 –2,943,154 –2,471,897 –2,116,221 Profi t carryforward 1,304,817 15,906,406 9,462,770 Consolidated profi t for the period 10,050,135 –14,601,588 10,776,497 84,444,218 75,296,362 94,586,487

Non-current liabilities

Interest-bearing loans 30 5,021,125 18,953,013 276,582 Finance leasing liabilities 31 4,434,259 5,251,755 6,617,302 Provisions for pensions 28 8,876,236 7,307,18 8 7,013, 238 Trade payables 32 109,392 0 47,000 Other non-current provisions 29 3,746,019 4,798,116 3,365,101 Other non-current liabilities 32 1,425,801 1,808,373 1,540,501 Deferred Income 33 739,938 860,671 698,988 Deferred tax liabilities 18 2,991,965 3,060,978 4,651,859 Total non-current liabilities 27,344,735 42,040,094 24,210,571

Current liabilities

Interest-bearing loans 30 242,026 2,294,388 32,427,648

Finance leasing liabilities 31 2,412,581 2,499,054 2,560,143 Statements Financial Prepayments on orders 32 7,746,785 4,175,186 7,968,064 Trade payables 32 6,573,095 9,940,581 9,478,523 Other liabilities for taxes and levies 32 5,651,259 4,207,868 3,321,152 Other liabilities for social security 32 927,168 901,168 815,887 Tax provisions 2,169,914 4,264,330 1,711,785 Other current liabilities 32 25,031,429 23,935,498 20,631,733 Other current provisions 29 13,000,991 15,920,176 9,884,854 Deferred Income 33 8,062,066 9,529,983 9,486,534 Total current liabilities 71,817,314 77,668,232 98,286,323

Total equity and liabilities 183,606,267 195,004,687 217,083,381

Consolidated Balance Sheet Consolidated Financial Statements of WashTec AG 93 Financial Statements Management Report 94 94 Consolidated Financial Statements ofWashTec AG Consolidated CashFlowStatement Adjustments to reconcile profi reconcile to Adjustments Amortization, depreciation and impairment of non-current assets 9,986 9,986 assets non-current of impairment and depreciation Amortization, anls rmdsoaso o-urn ses –175 assets non-current of disposals from Gain/loss Other gains/losses custo fasbiir,nto ahaqie 0 acquired cash of net asubsidiary, of Acquisition fi (without equipment and plant property, of Purchase paid tax Income Interest expense Interest income Changes in other net working capital 5,359 5,359 1,673 2,619 –3,291 equipment and plant property, of sale from Proceeds capital working net other in Changes payables trade in Increase/decrease inventories in Increase/decrease provisions in Movements Increase/decrease in trade receivables 42 42 receivables trade in Increase/decrease Changes in net working capital: working innet Changes Repayment of non-current liabilities from fi from liabilities non-current of Repayment paid Interest Repayment of non-current liabilities to banks –14,310 –14,310 received Interest Dividend payout banks to liabilities non-current of Repayment loans long-term of Raising Cash and cash equivalents at December 31 31 December at equivalents cash and Cash Current bank liabilities liabilities bank Current Cash and cash equivalents at December 31 3,529 3,529 2,603 31 December at equivalents cash and Cash equivalents cash and Cash fl cash for equivalents cash and cash of Composition 1 January at equivalents cash and Cash Share buy-back buy-back Share Net cash fl cash Net EBT Net increase/decrease in cash and cash equivalents 972 972 diff exchange foreign Net equivalents cash and cash in increase/decrease Net Net cashfl Net cash fl cash Net

ows usedin ﬁ osfo prtn ciiis 23,110 activities operating from ows ows from operating activities –3,508 –3,508 activities operating from ows nancing activities –18,631 –18,631 nancing activities erence –46 –46 erence t before tax to net cash ﬂ cash net to tax t before Consolidated Cash Flow Statement nance leases –2,746 –2,746 leases nance ow purposes: ows nance leasing) –5,181 –5,181 leasing) nance Notes 23 16,483 16,483 –242 3,771 3,771 717 2012 –1,424 –1,424 –7,074 2,812 –95 95 –246 0 0 –4,273 €k 3,529 3,529 –31,293 –11,904 –11,904 –20,327 –11,912 19,000 29,528 –2,000 –8,025 –6,916 –8,762 –4,333 –1,286 –2,487 15,155 –1,362 –1,375 17,178 4,603 2,603 2,603 1,725 2011* 7,311 –640 –677 –329 –155 –173 –112 549 148 255 €k 0

fi see item7inthenotestoconsolidated fi * Comparative Rounding diff for fi part oftheConsolidatedFinancialStatements to theConsolidatedStatementformanintegral The notes Consolidated CashFlowStatement. See notesforfurtherexplanationstothe nancialstatements scalyear2012. erences mayoccur. gures adjustedperIAS 8, Statement of Changes in Consolidated Equity

See notes for further explanations to the in €k Number Subscribed Capital Treasury Other Exchange Profi t Total Statement of Changes in Consolidated Equity. of shares capital reserve shares reserves eff ects carried The notes to the consolidated statement form in units forward an integral part of the consolidated fi nancial statements for fi scal year 2012. As of January 1, 2011 previously reported 13,976,970 40,000 36,464 0 –1,986 –130 20,011 94,359 Rounding diff erences may occur. * Comparative fi gures adjusted per IAS 8, Adjustments January 1, 2011 227 227 see item 7 in the notes to the consolidated fi nancial statements

As of January 1, 2011* 13,976,970 40,000 36,464 0 –1,986 –130 20,238 94,586

Income and expenses recognized directly in equity –405 –75 –480 Taxes on transactions recognized directly in equity 124 124 Dividend –4,333 –4,333 Consolidated proﬁ t for the period –14,601 –14,601

As of December 31, 2011* 13,976,970 40,000 36,464 0 –2,267 –205 1,304 75,296

As of January 1, 2012 13,976,970 40,000 36,464 0 –2,267 –205 1,304 75,296

Income and expenses recognized directly in equity –1,020 266 –754 Taxes on transactions recognized directly in equity 283 283 Share-based payment –32,234 –431 –431 Consolidated proﬁ t for the period 10,050 10,050

As of December 31, 2012 13,944,736 40,000 36,464 –431 –3,004 61 11,354 84,444 Statements Financial

Statement of Changes in Consolidated Equity Consolidated Financial Statements of WashTec AG 95 Notes to the Consolidated Financial Statements of Washtec AG (IFRS) for Fiscal Year 2012

General

1. General information on the Group The requirements under sec. 315a HGB for exempting the Company from having to prepare consolidated fi nancial statements in accordance with German commercial law have been The consolidated fi nancial statements of the WashTec Group for the fi scal year from January met. 1 through December 31, 2012 were prepared on March 1, 2013 and made available to the supervisory board for review. They are expected to be approved at the supervisory board The consolidated fi nancial statements are generally prepared on a historical cost basis, meeting on March 20, 2013 and thereafter released for publication by the management except with respect to derivative fi nancial instruments, which are measured at fair value. board. The consolidated fi nancial statements and Group management report are available The consolidated fi nancial statements are presented in euro and, unless otherwise indicated, for viewing on the online version of the Bundesanzeiger [German Federal Gazette] and the all fi gures are rounded to the nearest thousand (€k). electronic company register and may be downloaded from our website, www.washtec.de. 3. Basis of consolidation The ultimate parent company of the WashTec Group is WashTec AG, which is entered in the commercial register in Augsburg under registration no. HRB 81. The consolidated fi nancial statements include the fi nancial statements of WashTec AG and its subsidiaries as of December 31 of each fi scal year. The fi nancial statements of the subsid- The Company’s registered offi ce is located at Argonstrasse 7, 86153 Augsburg, Germany. iaries are prepared for the same reporting period as the parent company, using uniform The Company’s shares are publicly traded. accounting policies.

The purpose of the WashTec Group comprises the development, manufacture, sale and Subsidiaries are fully consolidated as of the date of acquisition; i.e. from the date on which servicing of car wash products, as well as leasing, and all services and fi nancing solutions, the Group acquires control. Control will be deemed to exist from the date on which which are related thereto and are required in order to operate car wash equipment. WashTec AG has the possibility of directly or indirectly determining business and fi nancial policy. Subsidiaries will no longer be consolidated once the parent no longer has the control. 2. Accounting principles underlying the consolidated fi nancial statements All intra-group balances, transactions, income, expenses as well as unrealized gains and The consolidated fi nancial statements of WashTec AG have been prepared in accordance losses resulting from intra-group transactions are eliminated in full.

Financial Statements Financial with the International Financial Reporting Standards (IFRSs) of the International Accounting In addition to the parent company, the consolidated ﬁ nancial statements of WashTec AG Standards Board (IASB) in force as of the balance sheet date and with the applicable inter- also contain the following group entities as of December 31, 2012: pretations (IFRIC). They comply with the accounting standards applicable in the European Union for ﬁ scal year 2012 and are also supplemented by additional information required by sec. 315a HGB [“Handelsgesetzbuch” or German Commercial Code] and the Group management report.

9696 Notes to the Consolidated Financial Statements of WashTec AG General Information Consolidated entities Share in Equity capital Proﬁ t/loss 4. Signiﬁ cant accounting judgments, estimates and assumptions

capital at Dec 31, 2011 for 2012 In certain cases, estimates and accounting assumptions may be required. These estimates in % in €k in €k and assumptions include complex and subjective assessments and estimates that are based German entities on the current knowledge of facts which, by their very nature, are marked by uncertainty WashTec Cleaning Technology GmbH, Augsburg 1) 100 29,846 0 and could be subject to change. Estimates and accounting assumptions can change over WashTec Holding GmbH, Augsburg 100 93,159 831 time and could aff ect the presentation of the net assets, fi nancial position and results of WashTec Carwash Operations GmbH, Augsburg 2) 100 51 0 operation. The estimates relate primarily to the defi nition of economic useful lives, the mea- WashTec Financial Services GmbH, Augsburg 1) 100 62 0 surement of provisions and the potential use of deferred tax assets as well as assumptions AUWA-Chemie GmbH, Augsburg 2) 100 537 0 about future cash fl ows and discount rates. The uncertainty connected with these assumptions and estimates could result in outcomes that may require material future adjustments Foreign entities to the carrying value of the aff ected asset or liability. WashTec France S.A.S., St. Jean de Braye, France 100 1,474 346

Mark VII Equipment Inc., Arvada, USA 100 4,651 390 4.1 Signiﬁ cant estimates and assumptions WashTec S.r.l., Casale, Italy 100 261 –4,679

WashTec UK Ltd., Great Dunmow, United Kingdom 100 1,820 280 Impairment of non-ﬁ nancial assets

California Kleindienst Limited, Wokingham, United Kingdom 5) 100 0 0 The Group evaluates non-fi nancial assets on each reporting date to determine whether there WashTec A/S, Hedehusene, Denmark 4) 100 2,585 906 are any indications of impairment. Goodwill and other intangible assets with indefi nite use- WashTec Cleaning Technology GmbH, Wien, Austria 100 733 61 ful lives are tested for impairment at least once annually and when certain indications exist. WashTec Spain S.A., Madrid, Spain 100 359 –460 Other non-fi nancial assets are tested for impairment when there are indications that the WashTec Car Cleaning Equipment (Shanghai) Co. Ltd., carrying values may not be recoverable. Shanghai, China 100 –150 –88

WashTec Cleaning Technology s.r.o., Nyrany, The discounted cash ﬂ ow method is used to value the sales price of non-ﬁ nancial assets

Czech Republic 100 1,817 –248 (less the applicable selling costs). To this end, the future cash ﬂ ows and interest rate trends

WTMVII Cleaning Technologies Canada Inc., Grimsby, are estimated using business and market information, and a suitable discount rate is

Ontario, Canada6) 100 –6,934 –556 selected in order to calculate the present value of those cash ﬂ ows. For further details,

WashTec Australia Pty Ltd., Sydney, Australia 100 228 639 please see Note 5.2.

WashTec Cleaning Technology España S.A., Bilbao, Spain 5) 100 1 0 Deferred tax assets

WashTec Benelux B.V., Zoetermeer, Netherlands 3) 100 2,433 446 Statements Financial

WashTec Nordics AB, Bollebygd, Sweden 100 –444 –8 Deferred tax assets are recognized to the extent that it is probable that taxable income

WashTec Polska Sp. z o.o., Warsaw, Poland 100 –28 –33 will be available. Management judgment is required to determine the amount of the taxable income and the anticipated timing of its receipt. For further details, please see Note 18 1) Proﬁ t/loss assumption by WashTec Holding GmbH related to deferred taxes. 2) Proﬁ t/loss assumption by WashTec AG 3) Subgroup with Benelux Carwash Management B.V., Zoetermeer, NL, Washtec Benelux Administratie B.V., Zoetemeer, NL and WashTec Benelux N.V., Brussels, Belgium, whose results are reported in WashTec Benelux B.V., Zoetemeer, NL 4) Including permanent establishments in Norway 5) Company is currently inactive 6) Indirect ownership interest through Mark VII Equipment Inc., Arvada, USA

General Information Notes to the Consolidated Financial Statements of WashTec AG 97 Pension and other post-employment beneﬁ ts as well as phased retirement beneﬁ ts 5. General accounting policies

The costs under the pension and phased retirement commitments are determined using The accounting policies adopted are generally consistent with those adopted in prior years, actuarial calculations. The actuarial valuation involves making assumptions about discount except as provided below. rates, future wage and salary hikes, mortality rates and future yield increases. Due to the long term nature of these plans, such estimates are subject to considerable uncertainty. 5.1 Amendments to the accounting policies Further details are provided in the sections on pension provisions and other provisions for In fi scal year 2012, the Group applied the following new and revised IFRS Standards and phased retirement. Interpretations. Provisions IAS 1 Amendment to IAS 1 – Presentation of Items of Other Comprehensive Special restructuring provisions and provisions for loss contracts have been created on the Income basis of expectations and the planned courses of action. The costs, which are actually in- IAS 19 Amendment to IAS 19 – Employee Benefi ts – Early Adoption in Fiscal curred, are subject to uncertainties because they depend on the occurrence of underlying Year 2012 premises. IFRS 7 Amendments to IFRS 7 – Financial Instrument: Disclosures – Transfer of Financial Assets 4.2 Signifi cant accounting judgments IFRS 9 Financial Instrument: Classifi cation and Measurement IFRS Improvements to IFRS 2009-2011 Development costs The eff ects, which are caused by the early adoption of IAS 19 in fi scal year 2012, are de- Development costs are capitalized in accordance with the accounting policies presented in scribed in Note 7. The other facts addressed by the Standards are currently not relevant to Note 5.2. The fi rst capitalization of costs is based on management’s conviction that there is the WashTec Group. technological and economical feasibility, usually when a product development project has reached a defi ned milestone under an established project management model. Moreover, IASB and the IFRIC enacted additional Standards, Interpretations and Amend- ments listed below, but these did not yet have to be applied in fi scal year 2012 or they have Buy-back obligations (buy-back contracts) not yet been recognized by the European Union. As of December 31, 2012, the WashTec At the moment, the WashTec Group sells some of its wash systems to major customers Group had not adopted or applied these Standards earlier than required. The fi rst-time through leasing companies. Under these arrangements, the WashTec Group guarantees that, adoption of the Standards is planned for the date on which they are recognized and enacted if necessary, it will repurchase wash systems at the end of the lease term for a residual pur- by the EU. chase price, to which the parties agreed in advance. Financial Statements Financial IAS 12 Amendments to IAS 12 – Deferred Tax: Recovery of Underlying Assets In order to calculate the provision, an estimate is made about the likelihood of whether IAS 27 Revision of IAS 27 –Separate Financial Statements the system will need to be repurchased at the end of the lease term. IAS 28 Revision of IAS 28 –Investments in Associates and Joint Ventures The WashTec Group realizes income at the time that the sale is closed with the leasing IAS 32 Financial Instruments: Presentation – Off setting Financial Assets and Financial company since the economic use and the applicable opportunities and risks pass to the Liabilities purchaser at that time. IFRS 1 Amendments to IFRS 1 – Severe Hyperinfl ation and Fixed Transition Dates Relief for First time Adopters

9898 Notes to the Consolidated Financial Statements of WashTec AG General Information IFRS 1 First-time Amendment to IFRS – Government Loans Excepted therefrom are exchange diff erences from net investments in a foreign operation IFRS 7 Amendments to IFRS 7 –Financial Instruments: Disclosures – Off setting and from foreign currency loans that provide a hedge against a net investment in a foreign Financial Assets and Financial Liabilities operation. These are recognized directly in equity until the disposal of the net investment, IFRS 9 Financial Instruments and Amendments to IFRS 9 and IFRS 7, Mandatory at which time they are recognized as income or an expense in the relevant period. Deferred Eff ective Date and Transition Disclosures taxes charges and credits attributable to exchange diff erences on those borrowings are also IFRS 10 Consolidated Financial Instruments recorded directly under equity. Non-monetary items, which are measured at historical cost IFRS 11 Joint Arrangements in a foreign currency, are translated using the exchange rates applicable on the dates of the IFRS 12 Disclosure of Interests in Other Entities initial transactions. Non-monetary items, which are measured at fair value in a foreign cur- IFRS 13 Fair Value Measurement rency, are translated using the exchange rates on the date when the fair value is appraised. IFRS 10, 12 Amendments to IFRS 10 Consolidated Financial Instruments, IFRS 11 Joint Any goodwill arising from the acquisition of a foreign operation and any fair value adjust- Arrangements, IFRS 12 Disclosure of Interests and Other Entities – ments to the carrying amounts of assets and liabilities arising from the acquisition are recog- Transition Guidance nized as assets and liabilities of the foreign operation and translated as of the closing rate. IFRS 10 – 12 Amendments to IFRS 10 Consolidated Financial Instruments, The functional currency of the foreign operations is the respective local currency. and IAS 27 IFRS 12 Disclosure and IAS 27 of Interests in Other Entities and IAS 27 Separate Financial Statements – Investment Entities The assets and liabilities of foreign operations are translated into euro at the rate of ex- IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine change applicable on the balance sheet date and their income statements are translated at the weighted average exchange rates for the year. The facts addressed by IAS 12, IAS 27, IAS 28, IAS 32, IFRS 1, IFRS 11, IFRS 12, IFRS 13 und IFRIC 20 are currently not relevant to the WashTec Group. The other Standards currently The exchange diff erences from the currency translation are recognized directly as a separate have no material adverse eff ect on the net assets, ﬁ nancial position and results of operation item under equity. On disposal of a foreign operation, the deferred cumulative amount rec- for the WashTec Group or would not result in more information having to be disclosed. ognized in equity relating to that particular foreign operation is recognized as a gain or loss.

Property, plant and equipment 5.2 Accounting policies in the Group Property, plant and equipment are recognized at cost less accumulated scheduled deprecia- Foreign currency translation tion and accumulated impairment losses. Such costs include the cost of replacing part of the The consolidated ﬁ nancial statements are presented in euro, which is the Group’s functional plant and equipment when that cost is incurred, if the recognition criteria are met. The and reporting currency. Each entity within the Group determines its own functional currency, costs of manufacturing internally generated equipment will include not only directly attrib- and the items included in the separate ﬁ nancial statements of each entity are measured us- utable costs but also prorated costs of materials and overhead as well as depreciation (IAS Financial Statements Financial ing that functional currency. Monetary assets and liabilities denominated in foreign curren- 16). Interest will be collected only to the extent a qualifying asset exists. All other repair and cies are converted at the functional currency exchange rate on the balance sheet date. All maintenance costs are recognized on the income statement as they are incurred. These as- exchange diff erences are recognized in the income statement. sets are depreciated on a straight-line basis over their estimate useful life pro rata temporis.

General Information Notes to the Consolidated Financial Statements of WashTec AG 99 The following assets will generally be depreciated on the basis of the useful lives set forth in Intangible assets the schedule below: Intangible assets include acquired patents, technologies and capitalized development costs Property, plant and equipment Useful life and licenses: Buildings 20 to 50 years Intangible assets Useful Life Technical plant and machinery 5 to 14 years Acquired patents and technologies 8 years Finance leasing 6 to 10 years Licences and software 3 to 8 years Other plant, ﬁ xtures and ﬁ ttings 3 to 8 years Capitalised development costs 6 to 8 years

An item of property, plant and equipment will be derecognized upon its disposal or when Acquired intangible assets no future economic benefi ts are expected from its use or disposal. Intangible assets, which are not acquired in connection with a business combination, are Any gain or loss arising from the derecognition of the asset (calculated as the diff erence measured at cost when fi rst recognized. Following initial recognition, intangible assets are between the net disposal proceeds and the carrying amount of the asset) will be included in carried at cost less any accumulated amortization and any accumulated impairment losses. the income statement for the period in which the asset is derecognized. At the end of each fi scal year, an asset’s residual value, useful life and method of depreciation shall be reviewed A distinction is made between intangible assets with fi nite useful lives and those with and, if necessary, adjusted. in-defi nite useful lives. During the reporting period, the Group held assets with only fi nite useful lives. Business combinations and goodwill Intangible assets with fi nite useful lives are amortized over the useful economic life. The The acquisition method is used to account for business combinations. amortization period and the amortization method for an intangible asset with a fi nite useful For this purpose, the acquisition costs must be determined. The acquisition costs include life are reviewed at least at the end of each fi scal year. Changes in the expected useful life the fair value of the transferred assets, the issued equity instruments and the assumed lia- or the expected pattern of consumption of future economic benefi ts embodied in the asset bilities on the date of the acquisition. All acquisition-related costs are expensed. are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates. Goodwill is initially measured at the cost of acquisition being the excess of the acquisition cost of the business combination over the Group’s share in the net fair value of the ac- Gains or losses arising from the derecognition of an intangible asset are measured as the quiree’s identifi able assets, liabilities and contingent liabilities. diff erence between the net disposal proceeds and the carrying amount of the asset and are recognized in profi t or loss in the period when the asset is derecognized. After fi rst-time recognition, goodwill is measured as the acquisition cost less any accumu- Financial Statements Financial lated impairment losses. For the purpose of impairment testing, goodwill acquired in con- Internally generated intangible assets (research and development costs) nection with a business combination is, beginning on the acquisition date, allocated to each Research costs are expensed in the period in which they are incurred. Development expen- of the Group’s cash-generating units that are expected to benefi t from the synergies of the ditures on any given project include directly attributable costs (mostly personnel expenses) combination, irrespective of whether other assets or liabilities of the acquiree are assigned as well as a share of the overhead costs. These costs will be recognized as an intangible asset to those units. when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefi ts, the availability of re-

sources to complete the asset and the ability to measure reliably the expenditures incurred during the asset’s development.

100100 Notes to the Consolidated Financial Statements of WashTec AG General Information Following initial recognition of the development expenditures as an asset, the cost model Goodwill will be applied requiring the asset to be carried at cost less any accumulated amortization The Group assesses, as of each reporting date, whether there are any indications that good- and accumulated impairment losses. Amortization of the asset begins when development is will is impaired. Goodwill is tested for impairment at least once annually and when circum- complete and the asset is available for use. It is amortized over the period of the expected stances indicate that the carrying value may be impaired. future benefi ts. During the development phase in which the period of use is indefi nite, the asset is tested for impairment annually. Impairment is determined for goodwill by assessing the recoverable value of the cash-generating units, to which the goodwill relates. The cash generating units at the WashTec Group Impairment of non-fi nancial assets correspond with the segments defi ned pursuant to IFRS. The cash generating units at the The Group assesses on each reporting date whether there is any indication that an asset WashTec Group correspond with the operating segments as defi ned under IFRS. They are could be impaired. If any such indication exist or if annual impairment testing for an asset is divided between the regions of “Core Europe”, “Emerging Europe”, “North America” and required, then the Group will estimate the asset’s recoverable value. An asset’s recoverable “Asia/Pacifi c”. value is the higher of an asset’s or cash-generating unit’s fair value less selling costs and its Where the recoverable value of the cash-generating units is less than their carrying value, value in use and is determined for an individual asset, unless the asset does not generate then an impairment loss is recognized. Impairment losses relating to goodwill cannot be cash infl ows that are largely independent of those from other assets or groups of assets. reversed in future periods. The Group performs its annual impairment test of goodwill after Where the carrying amount of an asset exceeds its recoverable value, the asset is considered completing the budgeting process. impaired and is written down to its recoverable value. In assessing the value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate Financial assets that refl ects current market expectations of the time value of money and the risks specifi c to In general, fi nancial assets within the meaning of IAS 39 are classifi ed as fi nancial assets at the asset. In determining fair value less costs to sell, an appropriate valuation model is used. fair value through profi t or loss, as loans and receivables, as held-to-maturity investments, or Except for goodwill, an assessment is made on assets as of each reporting date as to whether as available-for-sale fi nancial assets. When fi nancial assets are recognized initially, they are there is any indication that previously recognized impairment losses may no longer exist or measured at fair value. In the case of investments as such, which are not classifi ed at fair may have decreased. If such indication exists, the Group will estimate the recoverable value. value through profi t or loss, transaction costs, which are directly attributable to the acquisi- A previously recognized impairment loss is reversed only if there has been a change in the tion of the asset, will also be taken into account. estimates used to determine the asset’s recoverable value since the last impairment loss was Financial assets will be classifi ed in the measurement categories when they are fi rst recog- recognized. If this is the case, then the carrying value of the asset is increased to its recover- nized. able value. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset All purchases and sales of fi nancial assets made at arm’s length are recognized on the trade Financial Statements Financial in prior years. Such reversal is recognized in profi t or loss for the period in question. date, which is the date that the Group commits to the purchase or sale of the asset. Regular way purchases or sales are purchases or sales of fi nancial assets that require delivery of as- The following criteria are also applied in assessing impairment of specifi c assets. sets within the period generally established by regulation or convention in the marketplace. In the fi scal year, the Group held fi nancial assets only from the category “loans and receivables” in the form of receivables and “assets measured at fair market value through profi t and loss”.

General Information Notes to the Consolidated Financial Statements of WashTec AG 101 Loans and receivables Assets carried at amortized cost

Loans and receivables are non-derivative fi nancial assets with fi xed or determinable pay- If there is objective evidence that an impairment loss on assets carried at amortized cost has ments that are not quoted on an active market. After initial recognition, loans and receiv- been incurred, then the amount of the loss is measured as the diff erence between the asset’s ables are carried at amortized cost using the eff ective interest method less any allowance carrying value and the present value of estimated future cash fl ows (excluding future expected for impairment. Gains and losses are recognized in profi t or loss in the period in which the credit losses that have not been incurred) discounted by the fi nancial asset’s original eff ective loans and receivables are derecognized or impaired. interest rate (i.e., the eff ective yield computed at initial recognition). The carrying value of the asset is reduced through the use of an allowance account. The amount of the loss shall be Fair value recognized in profi t or loss. The fair value of investments, which are actively traded in organized fi nancial markets, is If, in a subsequent period, the amount of the impairment loss decreases and the decrease can determined by reference to quoted market bid prices at the close of business on the balance be related objectively to an event occurring after the impairment was recognized, then the sheet date. On investments, for which there is no active market, fair value is determined previously recognized impairment loss shall be reversed, to the extent that the carrying value using valuation techniques. Such techniques include using recent arm’s length market trans- of the asset does not exceed its amortized cost as of the reversal date. Any subsequent rever- actions between willing and informed independent business partners, referencing the sal of an impairment loss is recognized in profi t or loss. current market value of another instrument which is substantially the same, conducting a discounted cash fl ow analysis or deploying other valuation models. Financial liabilities

Amortized costs Financial liabilities within the meaning of IAS 39 are either “fi nancial liabilities at fair value through profi t and loss”, or “fi nancial liabilities measured at their amortized cost”. Held-to-maturity investments and loans and receivables are measured at amortized cost. This is computed using the eff ective interest method less any allowance for impairment. The In the fi scal year, the Group had merely fi nancial liabilities attributable to the category, calculation takes into account any premium or discount on acquisition and includes trans- “measured at amortized cost”. action costs and fees that are an integral part of the eff ective interest rate. Interest-bearing loans Impairment of fi nancial assets Interest-bearing loans are initially recognized at cost. They are not recognized at fair value. The Group assesses as of each balance sheet date whether a fi nancial asset or group of After initial recognition, interest-bearing loans are subsequently measured at amortized cost fi nancial assets is impaired. using the eff ective interest method.

Derecognition of ﬁ nancial assets and ﬁ nancial liabilities

Financial Statements Financial Financial assets

A fi nancial asset (or a part of a fi nancial asset or a part of a group of similar fi nancial assets) will be derecognized, if contractual rights to receive cash fl ows from a fi nancial asset expire.

102102 Notes to the Consolidated Financial Statements of WashTec AG General Information Financial liabilities The fair value of interest rate swap contracts is determined by reference to market values for similar instruments. A ﬁ nancial liability will be derecognized, if the obligation, which forms the basis of the liability, is discharged, cancelled or expires. For the purpose of hedge accounting, hedges are classiﬁ ed as:

If an existing fi nancial liability is replaced by another fi nancial liability issued by the same fair value hedges when hedging the exposure to changes in the fair value of a recognized lender with substantively diff erent contractual terms and conditions or if the terms and con- asset or liability or an unrecognized fi rm commitment; ditions of an existing liability are materially changed, then any such replacement or such cash fl ow hedges when hedging exposure to variability in cash fl ows that is either attrib- change will be treated as a derecognition of the original liability and a recognition of a new utable to a particular risk associated with a recognized asset or liability or a highly proba- liability. The diff erence between the respective carrying values will be recorded as income ble forecast transaction or the foreign currency risk in an unrecognized fi rm commitment; or an expense. or Financial instruments and hedging hedges of a net investment in a foreign operation. Original fi nancial instruments At the inception of a hedge relationship, the Group formally designates and documents the The primary fi nancial instruments used by the Group – with the exception of derivative in- hedge relationship to which the Group wishes to apply hedge accounting, as well as the risk struments – include cash and cash equivalents, trade receivables, bank loans, trade payables management objective and strategy for undertaking the hedge. The documentation includes and fi nancial lease contracts. The main purpose for using these fi nancial instruments is to identifi cation of the hedging instrument, the hedged item or transaction, the nature of the fi nance the Group’s business activities. risk being hedged and how the entity will assess the hedging instrument’s eff ectiveness in off setting the exposure to changes in the hedged item’s fair value or cash fl ows attributable Cash and cash equivalents to the hedged risk. Hedges are expected to be highly eff ective in achieving off setting Cash and short term deposits shown in the balance sheet comprise cash at banks and on changes in fair value or cash fl ows and are assessed on an ongoing basis to determine that hand and short-term deposits with an original maturity of three months or less. they actually have been highly eff ective throughout the fi nancial reporting periods for which they were designated. For the purpose of the consolidated cash fl ow statement, cash and cash equivalents consist of cash and cash equivalents as defi ned above, net of outstanding bank overdrafts. Hedges which meet the strict criteria for hedge accounting are accounted for as follows:

Derivative ﬁ nancial instruments and hedging Cash ﬂ ow hedges

The Group uses derivative ﬁ nancial instruments, such as interest rate swaps, to hedge its The eff ective portion of the gain or loss on a hedging instrument is recognized directly

risks associated with interest rate fl uctuations. Such derivative fi nancial instruments are under equity capital, while the ineff ective portion is recognized immediately in profi t or Statements Financial initially recognized at fair value on the date on which a derivative contract is concluded loss. Amounts recorded under equity capital are transferred to profi t or loss in the period and are later re-measured at fair value. Derivatives are carried as assets when the fair value in which the hedged transaction aff ects profi t or loss, such as when the hedged fi nancial is positive and as liabilities when the fair value is negative. income or fi nancial expenses are recognized or when a forecasted sale occurs. If the forecasted transaction or fi rm commitment is no longer expected to occur, then any amounts Any gains or losses arising from changes in fair value of derivatives during the year that do previously recognized in equity capital are transferred to profi t or loss. If the hedging instru- not qualify for hedge accounting are taken directly to profi t or loss. ment expires or is sold, terminated or exercised without replacement or rollover, then the amounts previously recognized in equity capital will remain recorded under equity capital until the forecasted transaction or fi rm commitment occurs.

General Information Notes to the Consolidated Financial Statements of WashTec AG 103 Net investment hedge Provisions

Hedges of a net investment in a foreign operation are accounted for similarly to a cash fl ow A provision is recognized only when the Group has a present obligation (legal or construc- hedge. tive) as a result of a past event, it is probable that an outfl ow of resources embodying economic benefi ts will be required to settle the obligation and a reliable estimate can be made The eff ective portion of the gain or loss on a hedging instrument used – together with any of the amount of the obligation. Where the Group expects some or all of a provision to be results from a foreign currency translation of a hedged investment – is recognized directly reimbursed, for example under an insurance contract, the reimbursement is recognized as under equity capital, while the gain or loss attributable to the ineff ective portion is recog- a separate asset if the reimbursement is virtually certain. If the time value of money from nized immediately in profi t or loss. discounting is material, provisions are discounted using a current pre-tax rate that refl ects, Only after the disposal (sale or liquidation) of the foreign operation will the changes in where required, the risks specifi c to the liability. Where discounting is used, the increase the hedging instrument’s value as accumulated in the equity capital account together with in the provision due to the passage of time is recognized as a fi nance cost. The reversal of the conversion results on the underlying transaction be recycled into profi t or loss. provisions is generally recognized under the items of the income statement in which the provisions were created. Inventories Provisions for pensions Inventories are valued at the lower of cost and net realizable value. The net realizable value is the estimated proceeds from a sale in the ordinary course of business less the estimated Provisions for pensions are determined according to the projected unit credit method (IAS costs of completion and the costs necessary to make the sale. 19). This method takes into account the pensions known and expectancies earned as of the balance sheet date as well as the increases in salaries and pensions expected in the future. Inventories are accounted for as follows: In accordance with IAS 19, the actuarial gains and losses were recognized outside of profi t Raw materials, consumables and supplies: cost of acquisition based on the weighted or loss immediately and in full. For further details, please see Note 28. average cost method, Finished goods and work in progress: costs of materials and production as well as a The provisions relate mainly to WashTec Cleaning Technology GmbH and WashTec Holding reasonable portion of the overhead costs based on the normal capacity of the production GmbH, Augsburg, Germany, and have been recognized in order to refl ect obligations arising facilities, but excluding borrowing costs. from future and current benefi t entitlements to current and former employees and their survivors. The pension plan provides for retirement benefi ts (upon reaching the age of 63), Treasury shares early retirement and disability benefi ts. Employees must have served the Company for at WashTec AG has been acquiring its own shares (treasury shares). The acquisition costs of least 10 years in order to be entitled to the benefi ts, with years of service taken into account such shares are removed directly from the equity capital account. The purchase, sale or only after the employee has reached the age of 30. The monthly retirement benefi t is de- Financial Statements Financial redemption/cancellation of the Company’s own shares is not recognized in profi t or loss. rived from a fi xed amount multiplied by the number of pension-qualifying years of service. In addition, individual contractual terms and conditions apply.

Risks under the pension obligations arise mostly from an increase in the life expectancies of the pension beneﬁ ciaries, which has led to an increase in the pension provision.

104104 Notes to the Consolidated Financial Statements of WashTec AG General Information Provisions for phased retirement agreements As a rule, lease-back contracts have a term of approximately 5 – 7 years, whereas the contracts that WashTec Group has with its customers have terms of up to 10 years. The gains Phased retirement agreements are based primarily on the so-called “block model”. Under from the sale are amortized over the life of the lease. these arrangements, there are two types of obligations which, using actuarial principles, are measured at their cash value and then recognized separately from one another: the fi rst type The sale and lease-back contracts that are related to machines/equipment generally include of obligation relates to the accumulated outstanding performance amount, which is recog- a purchase option at the end of the term as well as an option to extend the contract. Price nized pro rata temporis over the term of any active/work phase. The accumulated outstand- adjustments during the term of the lease are prohibited. ing performance amount is based on the diff erence between the compensation earned by If the WashTec Group is the fi nance lessee, then the leased property is capitalized at the the employee prior to the phased retirement agreement (including the employer’s share of inception of the lease. The lease is recognized at the fair value of the leased property or, if the social security contributions) and the compensation for the part-time employment (in- lower, at the present cash value of the minimum lease payments. Lease payments are ap- cluding the employer’s share of the social security contributions, but not including the top- portioned between the fi nance charges and reduction of the lease liability so as to achieve up contributions). a constant rate of interest on the remaining balance of the liability. Finance charges are The second type of obligation relates to the employer’s obligation to pay the top-up contri- refl ected in profi t or loss. butions plus an additional amount towards the statutory pension insurance. In accordance Capitalized leased assets are depreciated over the shorter of the estimated useful life of the with IAS 19 (revised), this is set aside as a provision in installments during the work phase asset and the lease term if there is no reasonable certainty that the Group will obtain own- (see also discussion under Note 7 above). In prior years, the so-called “top-up contributions” ership by the end of the lease term. Operating lease payments are recognized as an expense were recognized directly and in full once the obligation arises. in profi t or loss on a straight-line basis over the lease term. Deferred income Taxes The deferred income item serves to ensure that income from servicing agreements and guar- Actual income tax anty extensions is recognized in the relevant accounting period. Actual tax refund claims and tax liabilities for the current and prior periods are measured at Leases the amount expected to be recovered from or paid to the tax authorities. The estimates are Equipment (machines) produced by WashTec is sold to a leasing company and then leased based on the tax rates and tax laws applicable as of the balance sheet date. back by the WashTec Group in order to make it available to its own customers, above all Actual taxes relating to items, which are recorded directly in equity capital, are recognized large operator groups or oil companies, as part of the operator model, in return for usage- under the equity capital accounts of the balance sheet and not in the Company’s income based fees. The agreements between the leasing company and WashTec are treated as fi - statement.

nance leases pursuant to IAS 17 because WashTec bears substantially all the economic risks Statements Financial incidental to ownership. Other ﬁ nance leases relate to vehicles. As of year’s end, the carry- Deferred taxes ing (book) value was € 5k. Deferred taxes are recognized using the liability method on temporary diff erences between the assets and liabilities recognized on the balance sheet and their carrying amounts for ﬁ nancial (tax) reporting purposes.

General Information Notes to the Consolidated Financial Statements of WashTec AG 105 Deferred tax liabilities are recognized for all taxable temporary diff erences, except: taken into account on the balance sheet date, if tangible enactment conditions are met as part of a legislative process. Deferred taxes relating to items, which are recorded directly in where a deferred tax liability arises from the initial recognition of goodwill or of an asset equity capital, are recognized under the equity capital accounts of the Company’s balance or liability in a transaction that is not a business combination and, at the time of the sheet and not in its income statement. transaction, aff ects neither the accounting profi t nor taxable profi t or loss, and Deferred tax assets and deferred tax liabilities are off set against each other, if the Group has where a deferred tax liability arises from taxable temporary diff erences associated with a legally enforceable right to off set its actual tax refund claims against its actual tax liabilities investments in subsidiaries, if the timing of the reversal of the temporary diff erences can and these relate to the income taxes of the same taxable entity and are assessed by the be controlled and it is probable that the temporary diff erences will not reverse in the same tax authority. foreseeable future. Value added tax Deferred tax assets are recognized for all deductible temporary diff erences, the carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that the Revenues, expenses and assets are recognized net of value added tax (VAT) amounts, with taxable profi t will be available against which the deductible temporary diff erences and the the following exceptions: carry-forward of unused tax credits and unused tax losses can be utilized with the following if the VAT incurred on a purchase of assets or services is not recoverable by the exceptions: tax authority, then the VAT will be recognized as part of the cost of the asset or where the deferred tax asset relating to the deductible temporary diff erence arises from as part of the expense item. the initial recognition of an asset or liability in a transaction that is not a business com- receivables and liabilities are stated with the amount of VAT included. bination and, at the time of the transaction, aff ects neither the accounting profi t nor taxable profi t or loss, and, The net amount of VAT recoverable from, or payable to, the tax authority is included as part of receivables or liabilities in the balance sheet. where deferred tax assets arise from deductible temporary diff erences associated with investments in subsidiaries, associates and interests in joint ventures, and it is probable Revenue recognition that the temporary diff erences will not reverse in the foreseeable future and that there Revenue is recognized if it is probable that the economic benefi ts will fl ow to the Group and will be an insuffi cient amount of taxable profi t against which the temporary diff erences the amount of the revenue can be measured reliably. Revenue must be measured at the fair can be utilized. value of the consideration received. Rebates, cash discounts, VAT and other charges are not The carrying amount of deferred tax assets is reviewed on each balance sheet date and taken into account. In addition, revenue may be recognized only if the following recognition reduced to the extent that it is no longer probable that suffi cient taxable profi t will be criteria are met:

Financial Statements Financial available to allow all or part of the deferred tax asset to be utilized. Revenues from the sale of machines, accessories, goods and services are recognized once Unrecognized deferred tax assets are reassessed on each balance sheet date and are recog- the performance due has been rendered or the signifi cant risks and rewards of ownership nized to the extent that it has become probable that future taxable profi t will allow the have passed to the buyer. This is normally the case when fi nished goods or merchandise deferred tax asset to be recovered. are delivered, sent or collected.

Deferred income tax assets and liabilities are measured using the tax rates that are expected Revenues from servicing agreements are recognized once the performance has been to apply to the year when the asset is realized or the liability is settled, based on tax rates rendered. (and tax laws) that apply as of the balance sheet date. Future changes in tax rates must be

106106 Notes to the Consolidated Financial Statements of WashTec AG General Information Revenues from the rent business are not recognized until the respective car wash is per- The regions of “Core Europe”, “Emerging Europe”, “North America” and “Asia/Pacifi c” have formed, even if the wash system was fi rst sold to an external leasing company, inasmuch been defi ned as sale territories. as this sale is treated as a “sale and leaseback transaction” in accordance with IAS 17. The individual segments are managed on the basis of the operating results achieved. The Interest income is recognized as the interest accrues (using the eff ective interest method, segment results consist of income and expenses directly attributable to the reporting seg- i.e. the rate that discounts estimated future cash receipts through the expected life of ment and to the apportioned income or expenses generated from inter-divisional functions. the fi nancial instrument to the net carrying amount of the fi nancial asset). The sum of the reportable segments equals the consolidated result (after consolidation).

Earnings per share A geographical segment is a distinguishable component of an enterprise, which off ers or provides products or services within a particular economic environment and which is subject In accordance with IAS 33, earnings per share are calculated by dividing the after-tax con- to the risks and returns that are diff erent from those of components operating in other eco- solidated profi t by the weighted average number of shares outstanding. nomic environments. Undiluted earnings per share are calculated by dividing the net profi t for the year attribut- The Group’s geographical segments are based on the location of the Group’s assets. Sales able to the ordinary shareholders of the parent company by the weighted average number to the outside customers, who are identifi ed in geographical segments, are assigned to the of ordinary shares outstanding during the year. individual segments based on the customer’s geographical location. Diluted earnings per share are calculated by dividing the net profi t attributable to the Segment assets and segment liabilities include the assets and liabilities, which are used by ordinary shareholders of the parent company by the weighted average number of ordinary one segment for its own operations. Where possible, the balance sheet items are allocated shares outstanding during the year, plus the weighted average number of ordinary shares, directly to the segment assets and segment liabilities. If a direct allocation is not possible, which would be issued if all dilutive potential ordinary shares were in fact converted into then the allocation will be done on the basis of an apportionment key. ordinary shares. Transfer prices between the individual Group entities are charged on an “arm’s length” basis. Segment reporting They take into account specifi c market and economic conditions of the individual regions. According to IFRS 8, the “management approach” is used as the basis for identifying reportable, operating segments. Under this approach, the external segment reporting is carried out 6. Business combinations on the basis of the internal group organizational management structure as well as the inter- Business combinations in 2011 nal reports submitted to the entity’s “chief operating decision maker”. IFRS 8 requires that the entity provide a report about the fi nancial and described information on its reportable In the Wash Chemicals Division, WashTec Benelux B. V., Zoetermeer, Netherlands, con- segments. Where the aggregation criteria are met, operating segments will be aggregated cluded a purchase agreement eff ective April 1, 2011 regarding selected assets, specifi cally Financial Statements Financial into reportable segments. the customer list and acquired a sales employee of the former dealer for Waschchemie-Shop Service Center B.V. WashTec has thereby secured the future supply and support of all local At the WashTec Group, the segmentation under the management report is done according customers for Auwa wash chemicals through the WashTec subsidiary in the Netherlands. to sales territories. The purchase price for the corporate acquisition was less than € 0.5m. It included a variable

component. The due diligence reviews focused primarily on economic risks.

General Information Notes to the Consolidated Financial Statements of WashTec AG 107 WashTec also signed an agreement in April to purchase the key assets of the “Carwash” divi- 7. Corrections pursuant to IAS 8 sion of the former Ceccato dealer and second largest market player in Spain, Barin S.A. By The WashTec Group elected an early adoption of the amended IAS 19 – Employee Benefi ts – virtue of this step, WashTec has become the second largest supplier on the Spanish market. in fi scal year 2012. The early adoption relates to the accounting of phased retirement provi- Given the diffi cult market situation in Spain, Barin had begun experiencing fi nancial diffi cul- sions as well as supplemental notes on pension provisions. Details about the accounting ties and was forced to fi le for bankruptcy at the end of 2010. WashTec therefore decided to of phased retirement provisions include the description of the accounting policies. Pursuant exploit this opportunity in order to expand its market position in Spain – despite the diffi cult to IAS 8.19, this change must be applied retrospectively if there is a change made to an economic environment that persisted there. WashTec expects the merger of the two organi- accounting policy. zations to generate good synergies. The retrospective application requires the adjustment of the opening balance sheet fi gures The parties agreed to a purchase price of approximately € 0.7m, which covers both the cus- of each of the impacted equity components of the earliest prior period presented and other tomer list and various inventory items. Moreover, key employees were acquired by WashTec. comparative amounts disclosed for each prior period presented as if the new accounting The purchase price included a hold-back, which was enforceable against the seller. During policy had always been applied [IAS 8.22]. the reporting year, the variable purchase price components totaling € 0.2m as well as assets totaling roughly the same amount were derecognized in profi t and loss because the goals The book entries would be made to the following items: for the earn-out were not, or are likely not to be, achieved. Profi t/loss carry forward: per January 1, 2011, improvement in the amount of € 227k, In connection with the acquisitions, incidental costs of acquisition totaling € 52k were reduction of other long-term provisions by € 328k and increase of the deferred tax liabilities incurred which were recognized in the income statement. by € 101k

The following table shows the carrying values and the preliminary fair values of the afore- Proﬁ t/loss carry forward: per December 31, 2011, improvement in the amount of € 142k, mentioned companies’ assets and liabilities, which were acquired, as of the acquisition reduction of other long-term provisions by € 205k and an increase of the deferred tax liabili- closing date: ties by € 63k

in €m Fair Value Carrying Value Personnel expense: expense in the amount of € 123k for calendar year 2011 and increase in Inventories 0.2 0.2 other long-term provisions Intangible assets 1.0 0.0 Income tax expense: Income in the amount of € 38k for calendar year 2011 and reduction of the deferred tax liabilities

The following tables 1 through 3 provide an overview of the impact of the corrections. Financial Statements Financial

108108 Notes to the Consolidated Financial Statements of WashTec AG General Information Table 1 Correction of the Consolidated Income Statement per December 31, 2011

in € Jan 1 to Correction Jan 1 to Dec 31, 2011 IAS 8 Dec 31, 2011 previously reported adjusted

Revenues 293,262,274 293,262,274 Other operating income 4,836,273 4,836,273 Capitalized development costs 1,383,577 1,383,577 Change in inventories of work in progress 493,059 493,059 Total 299,975,183 0 299,975,183

Cost of materials Cost of raw materials, consumables and supplies and of purchased material 105,955,214 105,955,214 Cost of purchased services 21,447,364 21,447,364 127,402,578 0 127,402,578

Personnel expenses 104,474,580 123,129 104,597,709

Amortization, deprecation and impairment of tangible and intangible assets 29,527,743 29,527,743 Other operation expenses 47,944,911 47,944,911 Other taxes 854,811 854,811 Total operating expenses 310,204,623 123,129 310,327,752

EBIT –10,229,440 –123,129 –10,352,569 Other interest and similar income 172,986 172,986 Interest and similar expenses 1,724,797 1,724,797 Financial result –1,551,811 –1,551,811

Result from ordinary activities/EBT –11,781,251 –123,129 –11,904,380 Statements Financial

Income taxes –2,735,009 37,801 –2,697,208

Consolidated proﬁ t for the period –14,516,260 –85,328 –14,601,588

Average number of shares 13,976,970 13,976,970

Earnings per share (basic = diluted) –1.04 –1.04

General Information Notes to the Consolidated Financial Statements of WashTec AG 109 Table 2 Correction of the Consolidated Balance Sheet per December 31, 2011

Equity and Liabilities in € Jan 1, 2011 Correction Jan 1, 2011 Dec 31, 2011 Correction Dec 31, 2011 previously IAS 8 adjusted previously IAS 8 adjusted reported reported

Equity

Subscribed capital 40,000,000 40,000,000 40,000,000 40,000,000 Contingent capital 12,000,000 12,000,000 12,000,000 12,000,000 Capital reserves 36,463,441 36,463,441 36,463,441 36,463,441 Other reserves and exchange rate eff ects –2,116,221 –2,116,221 –2,471,897 –2,471,897 Proﬁ t carryforward 9,235,334 227,436 9,462,770 15,678,970 227,436 15,906,406 Consolidated proﬁ t for the period 10,776,497 10,776,497 –14,516,260 –85,328 –14,601,588 94,359,051 227,436 94,586,487 75,154,254 142,108 75,296,362

Non-current liabilities

Interest-bearing loans 276,582 276,582 18,953,013 18,953,013 Finance leasing liabilities 6,617,302 6,617,302 5,251,755 5,251,755 Provisions for pensions 7,013,238 7,013,238 7,307,188 7,307,188 Trade payables 47,000 47,000 Other non-current provisions 3,693,291 –328,190 3,365,101 5,003,177 –205,062 4,798,115 Other non-current liabilities 1,540,501 1,540,501 1,808,373 1,808,373 Deferred income 698,988 698,988 860,671 860,671 Deferred tax liabilities 4,551,105 100,754 4,651,859 2,998,024 62,954 3,060,978 Total non-current liabilities 24,438,007 –227,436 24,210,571 42,182,201 –142,108 42,040,093

Current liabilities

Financial Statements Financial Interest-bearing loans 32,427,648 32,427,648 2,294,388 2,294,388 Finance leasing liabilities 2,560,143 2,560,143 2,499,054 2,499,054 Prepayments on orders 7,968,064 7,968,064 4,175,186 4,175,186 Trade payables 9,478,523 9,478,523 9,940,581 9,940,581 Other liabilities for taxes and levies 3,321,152 3,321,152 4,207,868 4,207,868 Other liabilities for social security 815,887 815,887 901,168 901,168 Tax provisions 1,711,785 1,711,785 4,264,330 4,264,330 Other current liabilities 20,631,733 20,631,733 23,935,498 23,935,498 Other current provisions 9,884,854 9,884,854 15,920,176 15,920,176 Deferred income 9,486,534 9,486,534 9,529,983 9,529,983 Total current liabilities 98,286,323 0 98,286,323 77,668,232 0 77,668,232

Total equity and liabilities 217,083,381 0 217,083,381 195,004,687 0 195,004,687

110110 Notes to the Consolidated Financial Statements of WashTec AG General Information Table 3 Correction of the Consolidated Cash Flow Statement for January 1 to December 31, 2011

in €k Jan 1 to Correction Jan 1 to Dec 31, 2011 IAS 8 Dec 31, 2011 previously adjusted reported

EBT –11,781 –123 –11,904

Adjustments to reconcile profi t before tax to net cash fl ows Amortization, depreciation and impairment of non-current assets 29,528 29,528 Gain/loss from disposals of non-current assets –112 –112 Other gains/losses –155 –155 Interest income –173 –173 Interest expense 1,725 1,725 Movements in provisions 7,188 123 7,311 Changes in net working capital: 0 Increase/decrease in trade receivables –6,916 –6,916 Increase/decrease in inventories –1,375 –1,375 Increase/decrease in trade payables 255 255 Changes in other net working capital –329 –329 Income tax paid –677 –677 Net cash fl ows from operating activities 17,178 0 17,178

Purchase of property, plant and equipment (without ﬁ nance leasing) –8,025 –8,025 Proceeds from sale of property, plant and equipment 549 549 Acquisition of a subsidiary, net of cash acquired –1,286 –1,286 Net cash ﬂ ows from operating activities –8,762 0 –8,762

Raising of long-term loans 19,000 19,000 Repayment of non-current liabilities to banks –31,293 –31,293 Dividend payout –4,333 –4,333 Financial Statements Financial Interest received 148 148 Interest paid –1,362 –1,362 Repayment of non-current liabilities from fi nance leases –2,487 –2,487 Net cash fl ows used in fi nancing activities –20,327 0 –20,327

Net increase/decrease in cash and cash equivalents –11,912 –11,912 Net foreign exchange diff erence –640 -640 Cash and cash equivalents at January 1 15,155 15,155 Cash and cash equivalents at December 31 2,603 2,603

Composition of cash and cash equivalents for cash ﬂ ow purposes: Cash and cash equivalents 4,603 4,603 Current bank liabilities –2,000 –2,000 Cash and cash equivalents at December 31 2,603 2,603

General Information Notes to the Consolidated Financial Statements of WashTec AG 111 Had IAS 19 not been adopted Consolidated Income Statement early, the consolidated income

statement and the consolidated in € Jan 1 to Correction Jan 1 to balance sheet would show the Dec 31, 2012 IAS 19 Dec 31, 2012 following results for ﬁ scal year IAS 19 without early IAS 19 2012: with early Adoption without early Adoption Adoption

Revenues 301,535,828 301,535,828 Other operating income 4,301,361 4,301,361 Capitalized development costs 1,427,105 1,427,105 Change in inventories of work in progress 792,996 792,996 Total 308,057,290 0 308,057,290

Cost of materials Cost of raw materials, consumables and supplies and of purchased material 103,950,751 103,950,751 Cost of purchased services 22,982,988 22,982,988 126,933,739 0 126,933,739

Personnel expenses 100,210,784 947,268 101,158,052

Amortization, deprecation and impairment of tangible and intangible assets 9,986,095 9,986,095 Other operation expenses 50,419,930 50,419,930 Other taxes 1,306,716 1,306,716 Total operating expenses 288,857,263 947,268 289,804,532

EBIT 19,200,027 –947,268 18,252,758 Other interest and similar income 95,390 95,390 Interest and similar expenses 2,812,175 2,812,175 Financial result –2,716,785 0 –2,716,785 Financial Statements Financial Result from ordinary activities/EBT 16,483,242 –947,268 15,535,973

Income taxes –6,433,107 290,811 –6,142,296

Consolidated proﬁ t for the period 10,050,135 –656,457 9,393,677

Average number of shares 13,962,989 13,962,989

Earnings per share (basic = diluted) 0.72 0.67

112112 Notes to the Consolidated Financial Statements of WashTec AG General Information Consolidated Balance Sheet – Equity and Liabilities

in € Dec 31, 2012 Correction Dec 31, 2012 IAS 19 IAS 19 IAS 19 with early without early without early Adoption Adoption Adoption Equity

Subscribed capital 40,000,000 40,000,000 Contingent capital 12,000,000 12,000,000 Capital reserves 36,463,441 36,463,441 Treasury shares –431,021 –431,021 Other reserves and exchange rate eff ects –2,943,154 –2,943,154 Proﬁ t carryforward 1,304,817 –142,108 1,162,709 Consolidated proﬁ t for the period 10,050,135 –656,457 9,393,678 84,444,218 –798,565 83,645,653 Non-current liabilities Interest-bearing loans 5,021,125 5,021,125 Finance leasing liabilities 4,434,259 4,434,259 Provisions for pensions 8,876,236 8,876,236 Trade payables 109,392 109,392 Other non-current provisions 3,746,019 1,152,330 4,898,349 Other non-current liabilities 1,425,801 1,425,801 Deferred Income 739,938 739,938 Deferred tax liabilities 2,991,965 –353,765 2,638,200 Total non-current liabilities 27,344,735 798,565 28,143,300

Current liabilities Interest-bearing loans 242,026 242,026 Finance leasing liabilities 2,412,581 2,412,581

Prepayments on orders 7,746,785 7,746,785 Statements Financial Trade payables 6,573,095 6,573,095 Other liabilities for taxes and levies 5,651,259 5,651,259 Other liabilities for social security 927,168 927,168 Tax provisions 2,169,914 2,169,914 Other current liabilities 25,031,429 25,031,429 Other current provisions 13,000,991 13,000,991 Deferred Income 8,062,066 8,062,066 Total current liabilities 71,817,314 0 71,817,314

Total equity and liabilities 183,606,267 0 183,606,267

General Information Notes to the Consolidated Financial Statements of WashTec AG 113 8. Notes on segment reporting

By segment 2012 Core Europe Emerging North Asia/Paciﬁ c Consolidation Group in €k Europe America Revenues 246,495 13,743 44,913** 11,880 –15,496 301,536 with third parties 231,867 13,712 44,488 11,880 –411 301,536 with other divisions 14,629 32 425 –1 –15,084 0 EBIT 19,250 758 –174 –663 29 19,200 Other interest and similar income 95 Interest and similar expenses –2,812 Result from ordinary activities 16,483 Income taxes –6,433 Consolidated net proﬁ t 10,050

Assets 165,765 1,780 15,191 4,143 –13,406 173,473 Liabilities 69,638 291 6,825 4,892 –1,362 80,284 Investments in property, plant and equipment 5,750 810 237 224 0 7,021 Scheduled amortization, depreciation and impairment losses –8,790 –487 –378 –331 0 –9,986

By segment 2011 * Core Europe Emerging North Asia/Paciﬁ c Consolidation Group in €k Europe America Revenues 244,485 11,379 38,836** 11,673 –13,111 293,262 with third parties 233,155 11,357 37,910 11,673 –833 293,262 with other divisions 11,330 23 926 0 –12,279 0 EBIT 17,886 1,068 –29,910 746 –142 –10,352 Other interest and similar income 173

Financial Statements Financial Interest and similar expenses –1,725 Result from ordinary activities –11,904 Income taxes –2,697 Consolidated net proﬁ t –14,601

Assets 167,208 3,725 17,676 4,640 –10,372 182,877 Liabilities 68,477 206 15,370 3,967 –6,214 81,806 Investments in property, plant and equipment 11,130 1,010 153 323 0 12,616 Scheduled amortization, depreciation and impairment losses –8,807 –402 –939 –300 0 –10,448 Non-scheduled amortization, depreciation and impairment losses 0 0 –19,079 0 0 –19,079 * Comparative ﬁ gures adjusted pursuant to IAS 8, see Note 7 of the Consolidated Notes. ** The revenues for North America in 2012 were $ 57,452k (prior year: $ 54,338k)

114114 Notes to the Consolidated Financial Statements of WashTec AG General Information Reconciliation of segment assets and liabilities The consolidated revenues were generated in the following regions:

in €k 2012 2011 in €m 2012 2011 Change Segment assets 173,473 182,877 Germany 100.9 102.9 –2.0 Deferred tax assets 5,916 7,140 Rest of Europe 143.2 139.3 3.9 Tax receivables 286 270 of which France 43.0 44.4 –1.4 Cash and cash equivalents 3,771 4,603 North America 44.4 37.9 6.5 Non-current assets held for sale 159 115 Rest of World ¹) 13.0 13.2 –0.2 Consolidated balance sheet total 183,606 195,005 Total 301.5 293.3 8.2

1) Primarily Asia and Australia

in €k 2012 2011* Segment liabilities 80,284 81,806 The consolidated assets can be broken down into the following regions within our business Deferred tax liabilities 2,992 2,998 segments: Income tax liabilities 2,170 4,264 2012 Germany Rest of Emerging North Asia/ Group Non-current interest-bearing loans 5,021 18,953 in €k Core Europe America Pacifi c Current interest-bearing loans 242 2,294 Europe Finance lease liabilities 6,847 7,751 Carrying value of property, Derivative fi nancial instruments 1,606 1,643 plant and equipment 27,308 6,438 2,616 617 519 37,498 Consolidated debt capital 99,162 119,709 Investments in property, Equity capital 84,444 75,296 plant and equipment 1,515 2,532 810 237 219 5,313 Consolidated balance sheet total 183,606 195,005 Carrying value of intangible assets 45,161 6,013 0 0 117 51,291 * Comparative fi gures adjusted pursuant to IAS 8, see Note 7 of the Consolidated Notes Investments in intangible assets 1,687 16 0 0 5 1,708

The consolidated revenues were generated in the following products: 2011 Germany Rest of Emerging North Asia/ Group in €k Core Europe America Paciﬁ c in €m 2012 2011 Change Europe New machines and used machines 170.0 168.7 1.3 Carrying value of property, Spare parts, services 90.1 88.9 1.2 plant and equipment 31,179 6,650 2,233 789 609 41,460 Financial Statements Financial Chemicals 29.8 24.3 5.5 Investments in property, Rent, accessories and miscellaneous 11.6 11.4 0.2 plant and equipment 3,572 2,492 1,010 132 277 7,483 Total 301.5 293.3 8.2 Carrying value of intangible assets 44,743 6,755 3 0 132 51,633 Investments in intangible assets 1,796 3,270 0 21 46 5,133

The Group has no assets in the other countries because it does not have its own sales orga- nizations in those areas. Any revenues earned from other countries are generated through exports to independent dealers.

General Information Notes to the Consolidated Financial Statements of WashTec AG 115 Notes to the Consolidated Income Statement 11. Other operating expenses

Other operating expenses may be itemized as follows:

9. Other operating income in €k 2012 2011 Vehicle costs 10,753 9,951 Other operating income totaled € 4,301k (prior year: € 4,836k) and consisted primarily of Travel expenses 5,135 5,022 income from exchange rate diff erentials in the amount of € 921k (prior year: € 1,304k), from Rent/operating leases excluding vehicles 3,551 3,360 income accruals based on operator models in the amount of € 1,687k (prior year: € 1,462k), Legal and consulting fees 3,295 3,185 income from the sale of scrap in the amount of € 584k (prior year: € 779k) and income from Maintenance/repairs 3,047 3,126 the sale of acquired vehicles and from the sale of other property, plant and equipment total- Advertising and trade fair costs 2,856 2,400 ing € 217k (prior year: € 168k). Allocations to bad dept allowances on receivables 2,609 588 10. Personnel expenses Temporary workers 2,383 2,681 Communication costs 2,340 2,288 Personnel expenses consist of the following: Operating leases – vehicles 1,971 2,140 IT expenses 1,858 2,210 in €k 2012 2011* Exchange rate eff ects 1,134 1,024 Wages and salaries 84,441 89,530 Training/continuing education costs 1,099 883 Social security contributions 8,094 7,649 Insurance 1,035 779 Pension and phased-retirement costs 1,641 1,675 Fees, licences and research costs 818 528 Expenses for employer share of statutory and voluntary pension Offi ce supplies 587 588 insurance (contribution-oriented) 6,035 5,744 Expenses for own patents and intellectual property rights 502 355 Total 100,211 104,598 Product liability 377 425 * Comparative ﬁ gures adjusted pursuant to IAS 8, see Note 7 of the Consolidated Notes PR work 324 272

The average number of staff members, according to their job functions, may be shown as Bank charges 299 323 follows: Loss on disposals of non-current assets 44 27 Miscellaneous administrative expenses/other expenses 4,403 5,790 Total 50,420 47,945 Number of employees 2012 2011 Change Financial Statements Financial Sales and service 1,011 1,035 –24 Production, technology and development 484 481 3 Auditor’s fees Finance and administration 155 144 11 The following fees were incurred in the reporting year for services rendered by the annual Total 1,650 1,660 –10 account auditors (PricewaterhouseCoopers AG, Wirtschaftsprüfungsgesellschaft, Munich, Germany):

in €k 2012 2011 Annual accounts auditing 278 238 Other conﬁ rmations 27 49 Tax advisory services 0 4 Other services 60 68 Total 365 359 116116 Notes to the Consolidated Financial Statements of WashTec AG Notes to the Consolidated Income Statement 12. Financial result Tax expenses consist of the following:

in €k 2012 2011 in €k 2012 2011* Other interest and similar income 95 173 Deferred tax expense/income 1,469 –1,671 Financial income 95 173 Actual tax expense 4,964 4,368 Interest-bearing loans 512 860 Total income taxes 6,433 2,697

Interest rate swaps 1,326 165 * Comparative ﬁ gures adjusted pursuant to IAS 8, see Note 7 of the Consolidated Notes. Expenses from ﬁ nance leases 408 496 Expenses from borrowing costs and similar expenses 565 203 14. Earnings per share Financial costs 2,812 1,725 Financial result –2,717 –1,552 Calculation of undiluted earnings per share for 2012 and 2011:

in €k or units 2012 2011* Of the interest income and interest expense, a total of € –982k (prior year: € –1,237k) must Consolidated proﬁ t 10,050 –14,602 be apportioned to the categories, “Loans and receivables” (LaR) and “Financial liabilities Weighted average outstanding number of shares 13,962,989 13,976,970 measured at amortized cost” (FLAC). Earnings per share (undiluted + diluted) 0.72 –1.04

13. Income tax expense * Comparative ﬁ gures adjusted pursuant to IAS 8, see Note 7 of the Consolidated Notes.

This item relates to both current and deferred taxes. The management board and supervisory board shall recommend to the annual general meeting of shareholders scheduled for May 15, 2013 that a dividend totaling approximately The table below shows a reconciliation of the expected and actual tax expenses reported. 40% of net income for the year (€ 4.0m) and a special dividend be paid for ﬁ scal year 2012. To calculate the anticipated tax expense, earnings before income taxes were multiplied by the Group tax rate of 30.7% (prior year: 30.7%). The eff ective tax rate of the WashTec 15. Non-recurring eff ects Group equaled 39.0% (prior year: –23.2%). In the reporting year, one-time gains were recognized in the items costs of materials in €k 2012 2011* (€ 1.4m), personnel expenses (€ 1.4m) and other operating income (€ 0.3m). Non-recurring Expected income tax expense 5,061 –3,655 charges arising in other operating expenses (€ 2.4m) can be off -set against these gains. Tax diff erences due to diff erent tax rates 134 144 Non-deductible expenses –243 4,193 In the prior year, the Company booked non-recurring charges totaling € 5.4m in personnel

Eff ects of the non-recognition of deferred tax assets 1,832 2,113 expenses, € 0.5m in other operating expenses, € 3.0m in cost of materials. Of this amount, Statements Financial Write-down of deferred tax assets from loss carryforwards –535 98 € 4.3m is attributable to the initiated restructuring and effi ciency program. The remaining Eff ects of use of loss carryforwards from non-recognition amount has been used to endow other provisions.

of deferred tax assets –129 0 In the prior year, a non-scheduled write-down was also made on the intangible assets in Capitalisation of corporate income tax credits –5 –5 North America in the amount of € 19.1m. Withholding tax 31 48 Other 287 –237 Actual income tax expenses 6,433 2,697

* Comparative ﬁ gures adjusted pursuant to IAS 8, see Note 7 of the Consolidated Notes.

Notes to the Consolidated Income Statement Notes to the Consolidated Financial Statements of WashTec AG 117 Notes to the Consolidated Balance Sheet

16. Property, plant and equipment

Property, plant and equipment developed as follows:

in €k Land, Technical Other Finance Prepayments Total land rights equipment equipment, leasing and construction and buildings and machines fi ttings and fi xtures in progress Costs January 1, 2011 41,216 23,056 15,619 16,259 42 96,192 Additions 692 3,596 1,582 1,343 271 7,483 Disposals 26 1,108 1,678 834 0 3,647 Reclassifi cations 18 863 77 –795 –164 0 Currency translation eff ects 57 28 69 3 2 161 December 31, 2011 41,957 26,435 15,668 15,977 151 100,188 Additions 561 1,043 1,438 1,840 431 5,313 Disposals 1,249 1,116 490 55 0 2,910 Reclassifi cations 35 1,287 66 –1,240 –136 12 Currency translation eff ects 8 54 7 –1 1 70 December 31, 2012 41,312 27,704 16,689 16,522 446 102,673

Amortization, depriciation and impairment losses January 1, 2011 21,486 14,144 12,090 6,551 0 54,271 Amortization/depreciation for the year 1,519 2,120 1,660 2,257 0 7,556 Disposals 17 1,090 1,345 553 0 3,006 Reclassiﬁ cations 0 563 0 –563 0 0 Currency translation eff ects 55 46 –195 1 0 –93 December 31, 2011 23,043 15,782 12,210 7,693 0 58,728 Amortization/depreciation for the year 1,510 2,374 1,702 2,302 0 7,887 Financial Statements Financial Disposals 194 797 384 56 0 1,430 Reclassiﬁ cations 0 856 48 –892 0 12 Currency translation eff ects 1 4 –57 6 0 –46 Write-ups 0 26 –2 0 0 23 December 31, 2012 24,361 18,245 13,518 9,051 0 65,175

Carrying value December 31, 2012 16,951 9,459 3,171 7,470 446 37,498 December 31, 2011 18,914 10,653 3,458 8,284 151 41,460 January 1, 2011 19,730 8,912 3,529 9,708 42 41,921

118118 Notes to the Consolidated Financial Statements of WashTec AG Notes to the Consolidated Balance Sheet Finance leases

Carrying value in €k 2012 2011 Washing equipment, sale and leaseback 7,465 8,243 Finance leasing, ﬁ xtures and ﬁ ttings 5 41 Total 7,470 8,284

Finance leases, ﬁ ttings and ﬁ xtures cover mainly vehicle leases. These agreements generally have a term of between 3 – 5 years.

As of the balance sheet date, there were no material contractual obligations such as duties to purchase plant, property and equipment or intangible assets. Financial Statements Financial

Notes to the Consolidated Balance Sheet Notes to the Consolidated Financial Statements of WashTec AG 119 17. Intangible assets

in €k Development Licences Patents, techno- Goodwill Other, Total costs and software logies and other prepayments internally acquired intangible and construction generated assets in progress Costs January 1, 2011 10,279 9,013 3,658 80,897 1,693 105,540 Additions 51 400 21 19 1,395 1,885 Additions from company acquisitions 0 0 3,241 0 0 3,241 Disposals 0 1 4 0 37 43 Reclassiﬁ cations 0 544 0 0 –544 0 Currency translation eff ects 101 –1 63 502 8 672 December 31, 2011 10,430 9,955 6,979 81,417 2,515 111,297 Additions 52 269 3 0 1,384 1,708 Disposals 0 72 0 0 0 71 Reclassiﬁ cations 932 0 –944 0 0 –12 Currency translation eff ects –62 2 54 –299 0 –306 December 31, 2012 11,352 10,154 6,093 81,118 3,899 112,617

Amortization and impairment losses January 1, 2011 5,546 6,565 2,670 22,705 0 37,486 Amortization for the year 522 1,236 1,135 0 0 2,892 Impairment 2,559 0 126 16,394 0 19,079 Disposals 0 0 –33 0 0 –33 Currency translation eff ects 104 1 64 4 0 174 December 31, 2011 8,731 7,801 4,029 39,103 0 59,664 Amortization for the year 614 673 811 0 0 2,099 Impairment 0 0 0 0 0 0 Disposals 0 54 1 0 0 54

Financial Statements Financial Reclassiﬁ cations 155 0 –167 0 0 –12 Currency translation eff ects –61 1 –14 –298 0 –372 December 31, 2012 9,439 8,422 4,660 38,805 0 61,326

Carrying value December 31, 2012 1,914 1,732 1,433 42,314 3,899 51,291 December 31, 2011 1,699 2,154 2,951 42,314 2,515 51,633 January 1, 2011 4,732 2,447 989 58,192 1,693 68,054

120120 Notes to the Consolidated Financial Statements of WashTec AG Notes to the Consolidated Balance Sheet The addition of prepayments and construction in progress resulted as far as possible from In the prior year, an unscheduled write-down of goodwill in the amount of € 16,394k capitalized development costs. These developments are currently not yet completed and became necessary. The write-down related to goodwill for North America. The amount were therefore subject to impairment test as of the end of the year, which did not necessi- recoverable under the basis of “value in use” was less than the carrying (book) value of the tate an impairment allowance. cash generating unit on the basis of mid-term planning. The detailed situation in North America is explained in the management report. Also incurred were research and development costs of € 818k (prior year: € 528k), which were not capitalized since the criteria of the capitalization under IAS 38 was not met. In the reporting year, there was no need to write down any other goodwill of the WashTec Group. Even with a 10-percentage-point higher discount rate and a 5-percentage-point Goodwill lower gross margin, there is still no need for a write-down. The total goodwill, which has a carrying value of € 42,314k (prior year: € 42,314k), will be attributed to the operating segments (as determined under IFRS 8) as follows: “Core Europe” 18. Deferred taxes in the amount of € 41,601k (prior year: € 41,601k), “Emerging Europe” in the amount of The Group is reporting deferred tax assets in the amount of € 5,916k (prior year: € 7,140k) as € 705k (prior year: € 705k), “North America” in the amount of € 0k (prior year: € 0k) and well as deferred tax liabilities in the amount of € 2,992k (prior year: € 3,061k). These items “Asia/Paciﬁ c” in the amount of € 8k (prior year: € 8k). resulted from deferred tax claims on expected recoverable tax loss carry-forwards and from The impairment test for goodwill is routinely carried out for the operating segments on the timing diff erences that were calculated according to the so-called “liability method”. basis of the useful life calculation. The loss carry-forwards were recognized as deferred tax assets, to the extent that the recov- According to the approach described under section 5.2, the impairment test for goodwill is erability of the loss carry forwards could be assured with suffi cient certainty on the basis of based on the Group’s medium-term forecast for 2013 through 2017. the internal mid-term planning (2013 through 2017).

Medium-term planning was based on the following assumptions, which are derived from To the extent that there is uncertainty about whether the loss carry-forwards can be off set the long-standing experience of management as well as from medium-term strategies for against future taxable income, such loss carry-forwards were not recognized as deferred tax the individual markets. More extensive information was available to management in the assets. form of outside market studies. The key assumptions are as follows: Accordingly, loss carry-forwards in the amount of € 23,610k (prior year: € 25,450k) were not increase in revenues between 3% and 7% per annum, in individual regions up to 28% recognized. This corresponds to non-capitalized tax assets in the amount of € 7,712k (prior year: € 8,132k). cost increases of 2 – 3% Some of the loss carry forwards have no time restrictions with regard to their utilization. wage and salary cost increases of approx. 2 – 4% per annum.

A total of € 15,310k in loss carry-forwards is restricted. Of this amount, € 2,301k will lapse Statements Financial For discounting purposes, an interest rate of 8.6% (prior year: 7.63%) and a long-term between 2013 through 2022 and €13,009k will lapse between 2023 through 2033, if they growth rate under a perpetual annuity of 1 to 1.5% (prior year: 1 to 1.5%) was used as cannot be utilized. a basis. The deferred tax receivables and tax liabilities are apportioned, prior to netting, according The discount rate calculation is derived from a weighted borrowing rate of 3.6% (prior year: to the following balance sheet items and loss carry-forwards. 4.7%) and the weighted equity rate. The equity rate is based on a risk-free rate of return averaging 2.5% (prior year: 3.20%) as well as a beta factor of 1.26 (prior year: 1.06). The rate of the risk premium is 6.5% (prior year: 5.0%).

Notes to the Consolidated Balance Sheet Notes to the Consolidated Financial Statements of WashTec AG 121 in €k Deferred tax receivables Deferred tax liabilities in €k 2012 2011 2012 2011 2012 2011 before after before after Tax loss carryforwards 2,536 3,333 0 0 Income Income Income Income Income Income tax tax tax tax tax tax Property, plant and equipment 233 121 –4,298 –4,743 Changes in the fair value Intangible assets 96 293 –1,843 –1,695 of ﬁ nancial instruments 674 –208 466 –506 156 –350 Inventories 1,111 1,576 –697 –525 Changes of acruarial Trade receivables 162 250 –405 –236 gains and losses –1,567 494 –1,073 –238 71 –167 Provisions 2,112 1,585 –24 –228 Changes in value recorded Other liabilities 843 718 –65 –72 directly under equity capital –754 283 –471 –480 124 –356 Finance lease liabilities 1,967 2,116 0 0 Deferred income 1,343 1,620 0 0 19. Inventories Miscellaneous 90 113 –237 –145 Total 10,493 11,724 –7,569 –7,644 in €k 2012 2011 of which non-current 6,830 7,399 –6,319 –6,393 Raw materials, consumables and supplies, including merchandise 22,797 24,844 of which current 3,663 4,325 –1,250 –1,251 Work in progress 5,489 5,712 Finished goods and merchandise 8,234 8,325 Prepayments 129 393 Deferred tax liabilities totaling € 4,577k were set-off against deferred tax receivables under Total 36,649 39,274 the netting rules of IAS 12.

During the reporting year, € 283k (prior year: € 124k) in deferred taxes were booked directly During the reporting year, the write-back of the inventory allowances (valuation adjust- under equity capital. The net balance of the deferred taxes recorded under equity capital ments) equaled € –324k (prior year addition of € 1,942k). therefore equals € 1,293k (prior year: € 1,010k). 20. Tax receivables The following table shows the income and expenses as well as the tax liability incurred

thereon for the changes in value recorded directly under equity capital: in €k 2012 2011 Non-current tax receivables 174 200 in €k 2012 2011 Current tax receivables 112 70

before after before after Total 286 270 Financial Statements Financial Income Income Income Income Income Income tax tax tax tax tax tax The tax receivables involved primarily the discounted claims against the tax authorities Adjustment item for the currency based on corporate income tax credits. translation of foreign subsidiaries and currency changes 266 – 266 –75 – –75 21. Trade receivables Exchange diff erences on net investments in subsidiaries –127 –3 –130 339 –104 235 in €k 2012 2011 Current trade receivables 43,015 46,158 Non-current trade receivables 1,403 824 Total 44,418 46,982

122122 Notes to the Consolidated Financial Statements of WashTec AG Notes to the Consolidated Balance Sheet Trade receivables are generally due between 0 and 90 days net. Write-downs on trade 22. Other assets receivables are recorded in a separate account for bad debt allowances. If the receivable in €k 2012 2011 is classiﬁ ed as uncollectible, then the related impaired asset is derecognized. Non-current other assets 318 277 As of December 31, 2012, bad debt allowances were charged on trade receivables in the Current other assets 3,459 3,365 nominal amount of € 4,976k (prior year: € 2,798k). The bad debt allowance account devel- Total 3,777 3,642 oped as follows: of which prepaid expenses 1,487 1,223

in €k 2012 2011 Prepaid expenses are recognized in order to account for prepayments of servicing fees and As of January 1 2,798 3,277 prepayments of insurance premiums and for taxes relating to other periods. Allocations recognised as expense 2,784 835 Utilization –386 –1,100 23. Cash and cash equivalents Reversal –186 –225 Currency translation eff ects –34 11 in €k 2012 2011 As of December 31 4,976 2,798 Bank balances and cash on hand 3,771 4,603

The ageing analysis of the overdue trade receivables, on which no bad debt allowances have Credit balances held at banks earn interest at variable interest rates based on daily bank ac- been charged, may be shown as follows as of December 31: count rates. The cash in those accounts has a fair value of € 3,771k (prior year: € 4,603k).

in €k 2012 2011 The cash fl ow statement shows how cash and cash equivalents (cash on hand, bank balances Receivables, neither overdue nor written down 35,329 37,568 with maturity of up to 3 months, and overdraft accounts) held by the WashTec Group Overdue receivables, not written down, of which changed in the fi scal year. Cash fl ows were classifi ed in accordance with IAS 7 as follows: less than 30 days 4,783 5,372 cash fl ow from operating activities, cash fl ow from investing activities and cash fl ow from 30 – 120 days 2,785 3,049 fi nancing activities.

120 – 365 days 1,262 851 For purposes of the consolidated cash ﬂ ow statement, cash and cash equivalents comprised more than 365 days 0 0 the following as of December 31: Total 8,830 9,272 Receivables written down 5,236 2,942 in €k 2012 2011 Bank balances and cash on hand 3,771 4,603 Financial Statements Financial A standard bad debt allowance on receivables is made on the basis of the account aging Overdraft account –242 –2,000 structure. Individual receivables may also be written down where there is a risk that they Cash and cash equivalents 3,529 2,603 will not be collected (drohender Uneinbringlichkeit) or where legal action has been initiated. For explanations regarding interest-bearing loans, see Note 30. With respect to those trade receivables, which have not been written down or are not in default, there is no indication as of the ﬁ nancial statements date that the debtors will be unable to meet their payment obligations.

Notes to the Consolidated Balance Sheet Notes to the Consolidated Financial Statements of WashTec AG 123 Equity capital However, the management board is also authorized (subject to the approval of the supervisory board) to exclude shareholders’ pre-emptive rights in certain cases as set out in sec. 5.1 of the Articles of Association of WashTec AG. The management board has not made use of 24. Subscribed capital these authorizations to date.

The subscribed capital totals € 40m. It is divided into 13,976,970 no-par-value bearer shares Contingent capital (prior year: 13,976,970 shares) and is fully paid in. Each share consists of a single voting Pursuant to sec. 218 of the German Stock Corporation Act (AktG), the contingent capital right and is entitled to dividends according to the share’s percentage of the registered share of a stock corporation may be increased in the same proportion as that portion of the regis- capital. tered share capital, which is increased from the corporation’s own capital reserves.

2012 2011 Pursuant to a shareholder resolution dated May 5, 2010, contingent capital account was Ordinary shares in units k 13,977 13,977 created as follows. Nominal value of ordinary shares in € 2.86 2.86 Contingent capital I: The registered share capital was conditionally increased by up to € 12,000,000, divided into up to 4,193,091 no-par bearer shares (Contingent capital I), As of December 31, 2012, the average weighted number of shares issued and outstanding although credited against this pro rata amount of the registered share capital will be the was 13,962,989 (prior year: 13,976,970 shares). amount by which the registered share capital is increased on the basis of sec. 5.1 of the Arti- The annual general meeting of shareholders of WashTec AG resolved on May 10, 2012 cles of Association (Authorized capital); any such credit will be made when the applicable to carry forward the entire accumulated and non-appropriated proﬁ t, as reported on the resolution for increasing capital is adopted. This contingent capital increase will be carried balance sheet for 2011, in the amount of € 4,096,309.17. out only to the extent that the holders of options (or creditors) or conversion rights or persons obligated to exercise their conversion or option rights under warrant-linked or Authorized capital con vertible bonds, participation rights or participating bonds (or a combination of such Pursuant to the resolution adopted at the annual general meeting of shareholders on May 5, in struments), which are issued in exchange for cash capital contributions and are issued or 2010, the management board was authorized, with the consent of the supervisory board, guaranteed on or before May 4, 2013 by the Company or by a downstream group enterprise to increase on one or more occasions the Company’s registered share capital by up to a total of the Company based on the authorization granted to the management board by the an- of € 12,000,000 on or before May 4, 2013 by issuing new no-par value bearer shares in nual general meeting on May 5, 2010, make use of their option or conversion rights or, to exchange for cash and/or non-cash contributions, although credited against the aforemen- the extent they are obligated to exercise the option or conversion rights, satisfy their obliga- tioned authorized amount at the time the new shares are issued will be the pro rata amount tion to exercise their conversion or option rights, or to the extent that the Company exer-

Financial Statements Financial of the registered share capital that is attributable to those no par-value bearer shares, cises an elective right – in complete or partial lieu of payment of the cash amount due – on which the conversion rights or duties or the option rights or duties exist, which were grants its Company shares, provided that no cash compensation is granted or treasury shares granted on the basis of the shareholder resolution adopted on May 5, 2010. If the afore- or the shares of another publicly listed company are used to satisfy those obligations. mentioned conversion rights or duties or option rights or duties no longer exist because The new shares will be issued in each case at the option or conversion price determined in they had been exercised by the time the new shares were issued, then the shares issued accordance with the aforementioned authorization resolution. The new shares will have under those rights must be taken into account. dividend rights beginning in the ﬁ scal year in which they are created. The management board is authorized, with the consent of the supervisory board, to prescribe additional In this respect, the shareholders must be granted preemptive rights. The new shares may details regarding the implementation of the contingent capital increase. also be underwritten by one or more banks, which are commissioned by the management board and then subject to an obligation to off er these shares to the shareholders for sub- scription (indirect preemptive right).

124124 Notes to the Consolidated Financial Statements of WashTec AG Notes to the Consolidated Balance Sheet 25. Capital reserves 27. Other reserves and currency eff ects

Capital reserves consist primarily of contributions of California Kleindienst Holding GmbH The other reserves item consists of, above all, the recognition of actuarial gains and losses to WashTec AG as of January 1, 2000 in the amount of € 26,828k and € 18,019k, less relating to pension provisions as well as the recordation of fi nancial instruments used as € 1,774k in costs relating to capital increase, from the premium paid in connection with the hedging devices: capital increase in August 2005. In 2009, the capital reserve account was reduced when in €k Dec 31, 2012 Dec 31, 2011 some of the Company’s own shares were redeemed in the amount of € 9,464k. Recorded changes in the fair value of fi nancial intruments used for hedging purposes –1,078 –1,752 26. Treasury shares Exchange diff erences from net investments in subsidiaries –547 –420 Shares Value shares Actuarial gains/losses from defi ned benefi t pension in units in €k commitments and similar obligations –2,672 –1,105 As of January 1 – – Deferred taxes on value changes recognized directly Additions 2012 32,234 289 in equity capital 1,293 1,010 As of December 31 32,234 289 Other reserves –3,004 –2,267 Currency eff ects 61 –205 Pursuant to a resolution adopted at the annual general meeting of shareholders on May 5, Total –2,943 –2,472 2010, the Company is authorized on or before May 4, 2013 to purchase up to 10% of the current registered share capital of € 40,000,000 for purposes other than trading. 28. Provision for pensions On August 14, 2012, the management board of WashTec AG, Augsburg (the “Company”), with the supervisory board’s consent which was granted on that same day, resolved to pur- The amount of the provision was computed using actuarial methods at a discount rate of chase on the open stock market in the period ending May 4, 2013 up to 400,000 of the 3.0% (prior year: 4.75%). As in the previous year, the annual salary and cost-of-living in- Company’s own shares as part of the stock buy-back program described below. This amount creases continue to be measured at a rate of 1.5%. The anticipated return from reimburse- constitutes approximately 2.86% of the current registered share capital of the Company. ment claims due to the existing liability insurance policies amounts to 4.5% (prior year: The Company has thereby exercised the powers granted to it by the annual general meeting 4.5%). The “2005 G mortality tables”, published by Prof. Klaus Heubeck, were used as the on May 5, 2010 in accordance with sec. 71 (1) no. 8 AktG. biometrical basis of calculation. Staff turnover ratios were estimated according to age and sex. The repurchased shares could be used, inter alia, in connection with the direct or indirect

purchase of companies, company divisions or equity interests in companies or in connection The number of beneﬁ ciaries as of December 31, 2012 equaled 236 employees (prior year: Statements Financial with a merger with other companies. The shares may also be used to service any options, 233 employees). which are granted under a stock option plan to members of the managing directorship of Eff ects for experienced-based adjustments are contained in the new valuations and total companies affi liated with the Company or to employees of the Company or enterprises € 83k (prior year: € 51k). related to the Company.

The Company reserves the right to cancel all or part of the repurchased shares.

Notes to the Consolidated Balance Sheet Notes to the Consolidated Financial Statements of WashTec AG 125 All actuarial gains and losses are off -set against equity capital. In the recently completed Sensitivities pursuant to IAS 19 for pension obligations: fi scal year, the actuarial gains and losses equaled € –1,567k (prior year: € –238k). Actuarial The following table shows the sensitivities (calculations are based on the project unit gains and losses booked directly against equity capital as of December 31, 2012 totaled method) based on current assumptions regarding the possible change in the discount rates € –2,672k (prior year: € –1,105k). in face of annuity dynamics and a life expectancy. All other variables remain constant. In fi scal years 2011 and 2012, the cash value of the pension obligations developed as Impact on defi ned benefi t obligation (DBO) follows: Change in in €k 2012 2011 2012 assumption Increase by As of January 1 7,307 7,013 Life expetancy Increase by 1 year 3.6% Pensions paid –441 –414 Annuties dynamics Increase by 0.25% 1.8% Service cost in the reporting period 125 156 Interest expense 321 323 Details regarding the change of the actuarial gains and losses: Actuarial gains and losses 1,564 229 in €k Provisions Reimburse- As of December 31 8,876 7,307 for pensions ment Rights Actuarial gains and losses Present value Fair value Total The claims held against the relief fund and the employer’s liability insurance policies taken Gains and losses from change out in order to cover the lives of the qualifying employees have an indemnity or reimburse- in fi nancial assumptions 1,430 0 1,430 ment quality. Experience In order to hedge or secure obligations arising from pensions, only reinsurance policies will gains and losses 133 3 137 be executed. No investments are made in real estate, stocks or similar assets. The develop- Total 1,564 3 1,567 ment of the so-called “reimbursement rights” in 2010 and 2011 can be shown in the following table: The average residual period of the pension obligations is approximately 10.5 years.

in €k 2012 2011 The following table shows the expected payment for pension beneﬁ ts: Fair value of reimbursement claims January 1 376 385 In €k < 1 year 1 – 5 years > 5 years Total Expected return 16 16 Pension beneﬁ ts 482 2,474 6,024 8,980 Employer contributions 0 0

Financial Statements Financial Beneﬁ ts paid 0 –18 Actuarial gains and losses –3 –7 Fair value of reimbursement claims as of December 31 389 376

126126 Notes to the Consolidated Financial Statements of WashTec AG Notes to the Consolidated Balance Sheet 29. Other provisions The other provisions totaling € 3,544k (prior year: € 5,748k) relate, above all, to provisions for legal and consulting costs in the amount of € 905k (prior year: € 1,560k) as well as provi- in €k Phased Warranty Repur- Restruc- Other Total sions for loss contracts in North America in the amount of € 1,740k (prior year: € 3,103k). retire- chase obli- turing

ment gations As of the balance sheet date, the WashTec Group believes its contingent liabilities totaled

2012 2012 2012 2012 2012 2012 2011* € 1,213k (prior year: € 726k) and consisted primarily of contractual performance obligations, As of January 1 1,674 6,185 2,669 4,441 5,748 20,718 13,373 potential expenses in connection with repurchasing machinery and lawsuit, and believes Additions from business that the likelihood that these claims will be enforced is less than 50%. combinations 0 0 0 0 0 0 188 Addition 566 6,578 524 231 399 8,299 15,584 30. Interest-bearing loans Compounding 0 0 0 0 306 306 0 in €k 2012 2011 Utilisation –914 –2,722 –302 –1,300 –2,631 –7,870 –6,449 Current interest-bearing loans 242 2,294 Reversal 0 –1,927 –285 –2,212 –280 –4,704 –2,006 Non-current interest-bearing loans 5,021 18,953 Exchange diff erences 0 4 0 –6 1 –2 28 Total interest-bearing loans 5,263 21,247 As of December 31 1,326 8,118 2,607 1,153 3,544 16,747 20,718 current 878 7,844 556 1,153 2,570 13,001 – non-current 448 274 2,051 0 974 3,746 – The WashTec Group has credit lines totaling € 46.3m. They consist primarily of a revolving Provisions in 2011* credit facility with a term ending December 31, 2014. The principal borrower is WashTec current 1,337 6,015 681 4,441 3,343 – 15,920 Cleaning Technology GmbH, which has access to a € 45m credit line. The credit line consists non-current 337 170 1,988 0 2,405 – 4,798 of a working capital credit facility in the amount of € 38m and an aval guarantee facility of € 7m. * Comparative fi gures adjusted pursuant to IAS 8, see Note 7 of the Consolidated Notes As of December 31, 2012, € 5.5m (prior year: € 5.3m) of the aval guarantee facility had been utilized. The non-utilized portion of the credit facility, which may be drawn upon for future The provision for phased retirement was calculated in accordance with IAS 19 “Employee operations and for fulfi lling obligations, is € 35.5m (prior year: € 20.3m) as of the balance Benefi ts”. The calculation was based on an interest rate of 1.60% (prior year: 3.75%) and an sheet date. annual salary increase of 1.50% (prior year: 1.50%). The syndicated loan contains conditions and covenants. During the term of the contract, The provision for warranty obligations is recognized based on past experiences. The assump- WashTec is bound by covenants to maintain a defi ned equity capital ratio and gearing ratio.

tions used as a basis for calculating the provision of warranties were founded on current Statements Financial Security is also provided as described below. sales levels and on the currently available information about repairs and returns for the sold products during the warranty period. It is expected that these costs will be incurred during The interest rate for the loan is variable and is linked to EURIBOR and to an interest margin, the warranty period after the balance sheet date. which in turn is tied to the operating performance of the Company.

The provision for restructuring measures totaled € 1,153k (prior year: € 4,441k) and included The costs for extended aval guarantees are based on the interest margin, less a discount of mostly provisions for planned personnel measures. 0.6%. The overdraft facility bears interest according to the applicable conditions of the relevant banks at the time it is utilized (drawn-down). In the reporting year, the interest rates The provision for repurchase obligations is computed on a rolling basis and takes into range between 1.41% and 3.65%. account the contractual obligations to repurchase machinery previously sold to major oil companies. In general, these obligations are secured by guarantees.

Notes to the Consolidated Balance Sheet Notes to the Consolidated Financial Statements of WashTec AG 127 In connection with structuring the ﬁ nancing, a discount was calculated using the eff ective Lease payment due (in €k) < 1 year 1 – 5 years > 5 years Total interest method in accordance with IAS 39. The amounts included under interest expense Minimum lease payment 2011 2,874 5,554 137 8,566 for the amortization of the discount equaled € 100k (prior year: € 198k). Interest expense for lease liability existing on the respective balance Key assets of the German companies of the WashTec Group were assigned or pledged as sheet date 375 437 3 815 collateral to secure the working capital facility granted. Cash value of minimum lease payment 2011 2,499 5,117 135 7,751 The following table presents the carrying values of the assets that have been used as collateral. These assets have been fully collateralized. In the event of a late payment (if applicable, Operating lease after the expiration of an applicable cure period), the banks will be entitled to seize and sell The obligations owed under the operating leases as of the balance sheet date are shown the collateral. below in thousands of euro (€k) and classiﬁ ed according to their maturities:

2012 2011 Year < 1 year 1 – 5 years > 5 years Total Collateral provided in €k Carrying value Carrying value 2012 10,045 15,290 1,701 27,037 Land and building 15,110 17,142 2011 9,264 12,126 204 21,594 Trade receivables 7,037 9,491

2012 2011 These leases relate primarily to buildings and service vehicles, which are replaced with new Weighted, eff ective average interest rate 4.42% 5.07% lease contracts at the end of the term.

32. Liabilities 31. Lease liabilities

in €k 2012 2011 Finance leases Trade payables 6,682 9,941 The Group has concluded ﬁ nance leases and lease-purchase agreements primarily for wash Prepayments on orders 7,747 4,175 equipment in connection with the operator model. Liabilities for taxes and charges 5,651 4,208 Liabilities in connection with social security 927 901 The minimum lease payments for these ﬁ nance lease liabilities equal: Other liabilities 26,402 25,744 Total 47,409 44,969 Lease payment due (in €k) < 1 year 1 – 5 years > 5 years Total

Financial Statements Financial of which current (due < 1 year) 45,874 43,161 Minimum lease payment 2012 2,624 4,658 95 7,377 of which non-current (due > 1 year) 1,535 1,808 Interest expense for lease liability existing on the respective balance Trade payables and liabilities for taxes and charges and for social security are generally due sheet date 211 316 4 530 within 90 days. Cash value of minimum lease payment 2012 2,413 4,344 91 6,847 The liabilities for taxes and charges relate primarily to unpaid value added tax.

Other liabilities due within one year include debtors with credit balances of € 1,392k (prior year: € 573k), liabilities to employees for such beneﬁ ts as vacation, overtime work, travel expenses, etc. in the amount of € 11,376k (prior year: € 11,619k), and liabilities owed to

128128 Notes to the Consolidated Financial Statements of WashTec AG Notes to the Consolidated Balance Sheet employer’s liability insurers totaling € 106k (prior year: € 247k). Other liabilities also include Interest rate risk accruals for miscellaneous debts totaling € 7,654k (prior year: € 7,193k), which resulted from During the reporting year, derivative fi nancial instruments were held in the form of interest missing invoices on services already performed, as well as for credits to be granted in the swaps. Pursuant to IFRS, derivative fi nancial instruments must be measured at fair value as Service division. of the balance sheet date and will be recognized as assets, if their fair value is positive, and as liabilities, if their fair value is negative. The positive value of fi nancial instruments is rec- 33. Deferred income ognized under current assets, the negative value is recognized under current liabilities. Deferred income totaling € 8,802k (prior year: € 10,391k) related primarily to the recog- The fair value of the interest rate swap as of December 31, 2012 is € –1,305k (prior year: nition of revenues for servicing contracts in the periods to which they relate. € –1,029k) and has been reported under other current liabilities (prior year: current liabilities). 34. Financial risk management objectives and methods The following table shows the contractual due dates for the payments: The main risks arising from the Group’s fi nancial instruments involve interest-based cash

fl ow, as well as liquidity, currency and credit risks. Commencement End Nominal values in €k Reference as of Dec 31, 2012 interest rate It is the Company’s policy to avoid or mitigate these risks as far as possible. All hedging Jan 1, 2011 Dec 31, 2015 12,267 1-month Euribor measures are largely coordinated and implemented centrally. For example, on a regular basis, June 30, 2011 Dec 31, 2015 6,133 1-month Euribor WashTec identifi es all items which are subject to interest and foreign exchange rate risks, assesses the probability of the occurrence of negative developments for the Company and makes any decisions required to avoid or reduce the corresponding interest and/or currency Cash fl ow hedge positions. Furthermore, WashTec prepares a monthly rolling consolidated liquidity plan on The base interest rate under the loan agreement is variable and tracks the EURIBOR an annual basis which facilitates the timely management of the current and future liquidity 1-month rate. As of December 31, 2012, there were a total of two interest rate swaps – de- situation. signed in part as a hedging instrument and with terms ending December 2012 – which serve The Company has derivative fi nancial instruments, which were designed in part to act as to hedge the exposure to fl uctuations under the loan’s variable, EURIBOR-linked interest hedging instruments. Their purpose is to hedge against interest rate and market risks, which rates. Under the swap contracts, the entity pays fi xed interest on the loan amount and in result from the Group’s business activities and its fi nancing sources. return receives a fl oating-rate interest on the same principal. The interest rate swaps serve to hedge the underlying obligation. For these two swaps with terms ending December 31, In accordance with internal Group policy, derivatives are generally not traded. 2015, the interest rates are set at 2.580% and 2.572%, respectively. The cash fl ow from the

At the inception of the hedge, both the hedging relationship and the Group’s risk manage- interest rate swaps is expected to be distributed throughout the term of the agreement. Statements Financial ment objectives and strategies for arranging the hedge are formally stipulated and docu- As of December 31, 2012, € 5m of the interest rate swaps are designed as a hedging rela- mented. The documentation contains the designation of the hedging instrument, the under- tionship. This hedging relationship is considered to be highly eff ective. The eff ective portion lying or secured transaction and the nature of the hedged risks, and a description as to how of the hedging relationship is recorded under equity capital and other reserves. the Company assesses the hedging instrument’s eff ectiveness in off setting the risk exposure. These types of hedging relationships are considered highly eff ective in off -setting exposures The amounts, which are accumulated under equity capital, are transferred to the income to changes in the fair value or the cash fl ow and such eff ectiveness is constantly reviewed. statement (fi nancial result) in the fi scal years in which the underlying transaction is recognized. In the fi scal year, this amount equaled € –377k (prior year: € –165k). The design and All risk types, to which the Group is exposed, together with the strategies and procedures assessment of the fi nancial instruments for interest rate hedges generated an expense in for managing these risks, are described below. the amount of € 949k in the reporting year.

Notes to the Consolidated Balance Sheet Notes to the Consolidated Financial Statements of WashTec AG 129 The following table shows the sensitivity of the consolidated profi t or loss before taxes (due Operating risks, which arise from additional individual transactions in a foreign currency, to the eff ects of the fl oating interest loan but subject to any existing interest rate hedges) to were considered insignifi cant for the Group given their low volume. a reasonable possible change in interest rates. All other variables remain constant. Signifi - The following table shows the sensitivity of the consolidated profi t and losses before taxes cant eff ects on the consolidated equity capital do not exist. (based on the change in the fair values of monetary assets and liabilities) and the consoli-

2012 EURIBOR dated equity capital of the Group (due to hedge of net investments) to a reasonable possible Increase/decrease change in the EUR/USD exchange rate. All other variables remain constant. in basis points 10 15 –10 –15 2012 Rate trend USD –5% 5% Eff ects on profi t/loss Eff ects on profi t/loss before tax €k –95 95 before taxes in €k 5 8 –5 –8 Eff ects on equity capital in €k 152 –152 2011 Rate trend USD 5% –5% 2011 EURIBOR Eff ects on profi t/loss before tax €k 120 –120 Increase/decrease Eff ects on equity capital in €k –580 580 in basis points 10 15 –10 –15 Eff ects on profi t/loss before taxes in €k –20 –31 20 31 Liquidity risk

Ensuring that the WashTec entities are solvent at all times is a key corporate business objec- Currency risk tive. Thanks to the cash management system in place, which includes such features as a rolling consolidated liquidity planning on an annualized basis, reasonable steps are taken to Due to the USD transactions relating to the subsidiary in the USA, changes in the USD/EUR identify possible bottlenecks in a timely and transparent manner. Non-utilized credit lines exchange rate could aff ect the fi nancial statements. To avoid major risks, WashTec relies on also ensure the supply of liquidity. The working capital facilities were granted by the syndi- corresponding derivatives that were concluded in June of 2011. These derivatives comprise cate banks of the WashTec Group subject to the joint and several liability of WashTec Clean- foreign exchange forwards with varying terms, some of which include a six-month term ing Technology GmbH, as the borrower, and the joint liability of other Group companies. option. The last maturity date is December 30, 2015. The changes in the fair value of the For additional details, please see Note 30 concerning interest-bearing loans. The WashTec hedging instrument and the underlying transaction are recognized in profi t or loss in the Group is fi nanced primarily via WashTec Cleaning Technology GmbH, which also has the income statement. largest funding requirements, being the Group’s most important operating company. Net investments in foreign operations The following table shows all the contractually stipulated payments and repayments of inter- Financial Statements Financial The Group holds non-current loan receivables against its subsidiary, Mark VII. Through the est and principal on fi nancial liabilities recognized on the balance sheet as of December 31, end of March 2012, there had been a net investment of USD 15m. Based on a capital in- 2012. The non-discounted cash fl ows for the next few fi scal years are stated. crease at Mark VII, which occurred when a portion of the loan receivable was contributed as The table includes all instruments, which were on the books as of December 31, 2012, and capital, this net investment was reduced by USD 11m to USD 4m eff ective April 1, 2012. The for which payments have already been agreed. Amounts in foreign currency were translated American subsidiary has long-term CAD-denominated loan receivables against the Canadian at the closing rates. The variable interest payments under the fi nancial instruments, above subsidiary. The net investment in foreign operation as of July 1, 2011 was set at CAD 5.9m all from the loan, were calculated using the anticipated interest rates. Financial liabilities, and was increased by CAD 0.9m in October 2011. Accordingly, the translation eff ects of which are repayable at any time, are always included in the earliest repayment category. The these loans are recognized in equity capital. disclosures are made on the basis of the contractual, non-discounted payments.

130130 Notes to the Consolidated Financial Statements of WashTec AG Notes to the Consolidated Balance Sheet in €k Carrying value Cash fl ows Cash fl ows Cash fl ows Capital management 2012 2013 2014 – 2016 2017 et seq. The Group’s capital management activities are primarily aimed at maintaining a high credit Interest-bearing loans 5,263 211 5,463 0 rating and a good equity ratio in order to support its operations and maximize its share- Liabilities from holder value. The Group manages its capital structure and makes adjustments in response to fi nance leases 6,847 2,624 4,307 446 the changes in economic conditions. The Group monitors capital using appropriate fi nancial Trade payables 6,682 6,682 0 0 covenants. Other fi nancial liabilities 13,017 13,017 0 0 Derivative fi nancial The Group monitors its capital by using a debt-to-equity (gearing) ratio, which corresponds liabilities 1,606 413 1,193 0 to the ratio of net fi nancial liabilities to an operating result as defi ned in the agreement underlying the interest-bearing loan. Under this defi nition, the debt-to-equity ratio may not exceed 2.5. Net fi nancial liabilities comprise interest-bearing loans and liabilities for fi nance in €k Carrying value Cash fl ows Cash fl ows Cash fl ows leases, less cash. 2011 2012 2013 – 2015 2016 et seq. Interest-bearing loans 21,247 2,616 21,055 0 In addition, WashTec’s equity capital must be at least 35% of the balance sheet total (which Liabilities from includes the treasury shares) as of the end of each quarter. fi nance leases 7,751 2,874 5,112 579 All covenants have been met as of the balance sheet date. Trade payables 9,941 9,941 0 0

Other fi nancial liabilities 13,741 13,741 0 0 35. Financial instruments – additional information Derivative fi nancial liabilities 1,029 307 759 0 The following table, which is derived from the relevant balance sheet items, shows the connection between the classifi cation and the carrying values of the fi nancial instruments.

Credit risks

The Group trades with creditworthy third parties only. In order to keep the del credere risk as low as possible, if the customer does not have a fi rst-rate credit rating, then orders are subject to strict controls. For new regional customers, the customer requests evidence of credit standing with fi nancing. We assume that the bad debt allowances are suffi cient to cover the actual risks. Financial Statements Financial There are no signifi cant concentrations of credit risks in the Group. A concentration of the credit risk will be assumed, if a single customer or an oil company makes up more than 10% of the revenues. This was not the case in fi scal year 2012.

With respect to credit risk arising from the other ﬁ nancial assets of the Group, such as cash and cash equivalents and other ﬁ nancial assets, the maximum credit risk in the event of a default by a counterparty is the carrying amount of these instruments.

Notes to the Consolidated Balance Sheet Notes to the Consolidated Financial Statements of WashTec AG 131 Carrying values, valuation approaches and fair value measurement categories:

In €k Measurement Carrying Balance sheet valuation under IAS 39 Balance sheet Fair category value Amortized Fair Value Fair Value valuation value under IAS 39 Dec 31, 2012 cost in equity through under IAS 17 Dec 31, 2012 proﬁ t and loss Assets Cash and cash equivalents LaR 3,771 3,771 – – – 3,771 Trade receivables LaR 44,418 44,418 – – – 44,418 Other ﬁ nancial assets LaR 1,124 1,124 – – – 1,124

Liabilities Trade payables FLAC 6,682 6,682 – – – 6,682 Interest bearing-loans FLAC 5,263 5,263 – – – 5,263 Other ﬁ nancial liabilities FLAC 13,017 13,017 – – – 13,017 Finance lease liabilities n.a. 6,847 0 – – 6,847 6,847 Derivatives ﬁ nancial liabilities 1,606 – 356 1,250 – 1,606 Derivatives with hedge relationship n.a. 356 – 356 – – 356

Aggregated presentation per IAS 39 measurement categories Loans and Receivables (LaR) 49,314 – – Financial Liabilities Measured at Amortised Cost (FLAC) 24,963 – – Financial Statements Financial

132132 Notes to the Consolidated Financial Statements of WashTec AG Notes to the Consolidated Balance Sheet In €k Measurement Carrying Balance sheet valuation under IAS 39 Balance sheet Fair category value Amortized Fair Value Fair Value valuation value under IAS 39 Dec 31, 2011 cost in equity through under IAS 17 Dec 31, 2011 proﬁ t and loss Assets Cash and cash equivalents LaR 4,603 4,603 – – – 4,603 Trade receivables LaR 46,982 46,982 – – – 46,982 Other ﬁ nancial assets LaR 750 750 – – – 507

Liabilities Trade payables FLAC 9,941 9,941 – – – 9,941 Interest bearing-loans FLAC 21,247 21,247 – – – 21,247 Other ﬁ nancial liabilities FLAC 13,741 13,741 – – – 13,741 Finance lease liabilities n. a. 7,751 – – – 7,751 7,751 Derivatives ﬁ nancial liabilities 1,643 – 1,029 614 – 1,643 Derivatives with hedge relationship n. a. 1,029 – 1,029 – – 1,029

Aggregated presentation per IAS 39 measurement categories Loans and Receivables (LaR) 52,335 – – Financial Liabilities Measured at Amortised Cost (FLAC) 44,929 – –

Due to their short terms, the fair values of trade receivables, trade payables and cash and The net results are attributable primarily to foreign currency valuation, allowances (loans cash equivalents match their carrying values. The fair value of the derivatives, liabilities from and receivables), and interest expenses as well as foreign currency valuation (fi nancial liabili- fi nance leasing and loans has been calculated by discounting the expected future cash fl ows ties measured at amortized costs). at the current market interest rates. The following table shows how the fi nancial instruments that are measured at fair value are The following table shows the net gains and losses from fi nancial instruments according to classifi ed. The level of hierarchy refl ects the degree of marketability.

the categories under IAS 39: Statements Financial Disclosure fair value hierarchy Net results according to measurement categories in €k Fair value 2012 Net results in €k 2012 2011 Level 1 Level 2 Level 3 Loans and receivables –1,983 –1,380 Derivative ﬁ nancial instruments – 1,606 – Financial liabilities valued at atmortised cost 626 843 in €k Fair value 2011 Level 1 Level 2 Level 3 Derivative ﬁ nancial instruments – 1,643 –

Notes to the Consolidated Balance Sheet Notes to the Consolidated Financial Statements of WashTec AG 133 Other Notes

36. Compliance statement pursuant to sec. 161 AktG Supervisory board

WashTec AG has issued the statement required under sec. 161 AktG for fi scal year 2012 and Michael Busch, (Dipl.-Kfm.), (Chairman, Board membership suspended while he served has made the statement available to its shareholders at www.washtec.de. on the management board from July 28, 2012 through February 28, 2013) Independent Business Consultant, Berlin The management board approved the consolidated fi nancial statements on March 1, 2013 and has forwarded them directly to the supervisory board for review. Memberships on other supervisory boards mandated by law: KHD Humboldt Wedag International AG, Köln (Member of the Supervisory Board) The separate fi nancial statements and the consolidated fi nancial statements are expected to be approved at the supervisory board meeting on March 20, 2013. Memberships on similar foreign and domestic governing bodies of business enterprises: member of the supervisory board of proDIU GmbH, Nauen 37. Information about the Company’s governing bodies Massimo Pedrazzini (Deputy Chairman; acted as Chairman during the period in which Management board Mr. Busch served on the management board from July 28, 2012 through February 28, 2013) Dr. Jürgen Rautert, (Dr.-Ing.), Heidelberg Attorney at Law, Massagno, Switzerland (Term of offi ce commenced January 1, 2013) Memberships on other supervisory boards mandated by law: None Spokesman of the Management Board (since March 1, 2013) Sales, Service, Supply Chain, Product Management and Development Memberships on similar foreign and domestic governing bodies of business enterprises: Fidinam Group Holding SA, Lugano, Schweiz (President of the Board of Directors) Dr. Stefan Vieweg, (Dr. rer. oec, Dr.-Ing.), Augsburg Sterling Strategic Value Ltd., Tortola, British Virgin Islands (Term of offi ce commenced January 1, 2013) (President of the Board of Directors) Finance, Quality Control, IT, Personnel, Investor Relations, Law and Corporate Audit Fondazione Fidinam, Lugano, Switzerland (Member of the Foundation board) Michael Busch, (Dipl.-Kfm.), Berlin Katadyn Produkte AG, Wallisellen, Switzerland (President of the Board of Directors) (Term of offi ce from July 28, 2012 through February 28, 2013) Pestalozzi Stiftung, Zürich, Switzerland (Member of the Foundation board) Spokesman of the Management Board (through February 28, 2013) Precicast Bilbao SA, Bilbao, Spain (Member of the Board of Directors) Rex Articoli Tecnici SA, Mendrisio, Switzerland (Member of the Board of Directors)

Financial Statements Financial Thorsten Krüger, (Dipl.-Ing.), Weißenhorn City Nuova Holding SA, Lugano, Switzerland (Member of the Board of Directors) (Term of offi ce ended July 31, 2012) Fidinam Australasia Real Estate, Sydney, Australia (Member of the Board of Directors) Spokesman of the Management Board FI Partecipazioni SA, Lugano, Switzerland (Member of the Board of Directors) Sales, Supply Chain, Service and Service Support Fly Away SA, Lugano, Switzerland (Chairman of the Board of Directors) Houman Khorram, (Dipl.-Ing. und Dipl.-Wirtsch.-Ing.), Gröbenzell Saunion, Lugano, Switzerland (Member of the Board of Directors) (Term of offi ce ended July 31, 2012) Taxﬁ d SA, Lugano, Switzerland (Member of the Board of Directors) Finance, General Services, and Business Development as well as Product Development Terzerina SA, Lugano, Switzerland (Member of the Board of Directors) Tiﬁ na Holding SA, Lugano, Switzerland (Member of the Board of Directors) Fidinam Monte Carlo SAM, Monte Carlo (Chairman of the Board of Directors) Fidinam R and T, Hong Kong (Chairman of the Board of Directors) MP Advisors SA, Lugano, Switzerland (Sole Board member)

134134 Notes to the Consolidated Financial Statements of WashTec AG Other Notes Salus Trust, Georgetown, Cayman Islands (Trustee) Dr. Hans Liebler (Member since June 18, 2012) Fondazione Isabel – una stellina per Ibipora’, Lugano, Schweiz Investment Manager, Gräfelﬁ ng (Chairman of the Foundation Committe) Memberships on other supervisory boards mandated by law: Investunity AG, München (Chairman of the Supervisory Board) Jens Große-Allermann (Member since June 18, 2012; acted as Deputy Chairman during the AUGUSTA Technologie AG, München (Deputy Chairman of the Supervisory Board) period in which Mr. Busch served on the management board from July 28, 2012 through J.P. Rosselet Cosmetics AG, Bremen (Member of the Supervisory Board) February 28, 2013) Grammer AG, Amberg (Member of the Supervisory Board) Management board of Investmentaktiengesellschaft für langfristige Investoren TGV as well as management board of Fiducia Treuhand AG, Bonn Memberships on similar foreign and domestic governing bodies of business enterprises: Identive Group Inc., Santa Ana, Kalifornien, USA (Member of the Board of Directors) Memberships on other supervisory boards mandated by law: autowerkstattgroup N.V., Amsterdam, Netherlands (Member of the Supervisory Board FPM Deutsche Investmentaktiengesellschaft mit Teilgesellschaftsvermögen, Frankfurt since May 23, 2012) Memberships on similar foreign and domestic governing bodies of business enterprises: None Jürgen Lauer, (Dipl.-Betriebswirt/MBA), (Member and Deputy Chairman through May 10, 2012) Dr. Sören Hein (Member since May 10, 2012) Managing Director of JüLa Beteiligungs GmbH, Weißenhorn Managing Director of Compound Disk Drives GmbH, Munich Member of the advisory board/supervisory board of the following companies: Memberships on other supervisory boards mandated by law: None Pulsion SE, München (Deputy Chairman)

Memberships on similar foreign and domestic governing bodies of business enterprises: Memberships on similar foreign and domestic governing bodies and business enterprises: None Medica Medizintechnik GmbH, Hochdorf (Member of the Advisory Board)

Roland Lacher (Member since June 18, 2012) Independent Businessman, Gelnhausen-Meerholz

Memberships on other supervisory boards mandated by law: None Statements Financial

Memberships on similar foreign and domestic governing bodies of business enterprises: None

Other Notes Notes to the Consolidated Financial Statements of WashTec AG 135 38. Information about related party transactions Supervisory board

In fi scal year 2012, the WashTec Group was impacted by the disclosure obligation under Remuneration paid to the entire supervisory board in the fi scal year was € 285k (prior year: IAS 24 solely with respect to business transactions with members of the management board € 144k). and supervisory board as well as with former members of the management board. The terms Shares held by members of the supervisory board developed as follows: and conditions of the transactions refl ected arms-length transactions.

Shares held by members of the supervisory board (pcs.) 2012 2011 For a detailed description of the management board remuneration and supervisory board Massimo Pedrazzini* 2,251 2,251 remuneration, reference is made to the remuneration report in the management report, Jens Große-Allermann (since June 18, 2012)** 0 0 which is incorporated by reference into the Notes. Dr. Sören Hein (since May 10, 2012) 0 0 Management board Roland Lacher (since June 18, 2012) 0 0 Dr. Hans Liebler (since June 18, 2012) 0 0 The remuneration of the entire management board in the fi scal year was € 573k plus one- Michael Busch (through July 28, 2012) 0 0 time payments totaling approximately € 1.3m, which were disbursed due to the early termi- Jürgen Lauer (through May 10, 2012) 0 0 nation of the management board agreements. The remuneration in the prior year equaled € 693k. * Mr. Pedrazzini is also the president of the board of directors of Sterling Strategic Value Shares held by the management board members developed as follows: Limited, which - according to the notifi cation dated April 1, 2010 – held 2,142,868 voting shares (15.33 %) of WashTec AG on March 30, 2010. Shares held by members of the management board (pcs.) 2012 2011 Dr. Jürgen Rautert (since January 1, 2013) 0 0 ** The supervisory board member, Jens Grosse-Allermann, sits on the management board Dr. Stefan Vieweg (since January 1, 2013) 0 0 of Investmentaktiengesellschaft für langfristige Investoren TGV, which – according to a noti- Michael Busch (since July 28, 2012 through February 28, 2013) 0 0 fi cation dated July 31, 2009 – held on that same date 758,358 voting shares (5.43%) of Thorsten Krüger (through July 31, 2012) 0 0 WashTec AG. Houman Khorram (through July 31, 2012) 390 390 Former members of the management board Resignation of Houman Khorram –390 0 There were also pension obligations owed to a former management board member or his survivors in the amount of € 220k (prior year: € 146k), which are covered by a relief fund.

Financial Statements Financial 39. Notes after the balance sheet date

No signiﬁ cant events occurred after the balance sheet date.

Augsburg, March 19, 2013

WashTec AG

Dr. Jürgen Rautert Dr. Stefan Vieweg Spokesman of the Member of the Management Board Management Board

136136 Notes to the Consolidated Financial Statements of WashTec AG Other Notes Financial Statements Financial

Sonstige Angaben Konzernanhang der WashTec AG 137 Responsibility Statement

“To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated fi nancial statements give a true and fair view of the assets, liabilities, fi nancial position and profi t or loss of the group, and the group management report includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal opportunities and risks associated with the expected development of the group.”

Augsburg, March 19, 2013

Dr. Jürgen Rautert Dr. Stefan Vieweg Spokesman of the Member of the Management Board Management Board Financial Statements Financial

138138 Notes to the Consolidated Financial Statements of WashTec AG Responsibility Statement Financial Statements Financial

Bilanzeid 139 Auditor’s Report

We have audited the consolidated fi nancial statements prepared by the WashTec AG, comprising Our audit has not led to any reservations. the income statement, statement of comprehensive income, balance sheet, cash fl ow statement, In our opinion based on the fi ndings of our audit the consolidated fi nancial statements comply statement of changes in equity and the notes to the consolidated fi nancial statements, together with the IFRSs as adopted by the EU and the additional requirements of German commercial law with the group management report of WashTec AG, which is combined with the management re- pursuant to § 315a Abs. 1 HGB and give a true and fair view of the net assets, fi nancial position port of the company for the business year from 1 January to 31 December 2012. The preparation and results of operations of the Group in accordance with these requirements. The combined of the consolidated fi nancial statements and the group management report in accordance with management report is consistent with the consolidated fi nancial statements and as a whole pro- the IFRSs, as adopted by the EU, and the additional requirements of German commercial law vides a suitable view of the Group›s position and suitably presents the opportunities and risks pursuant to § (Article) 315a Abs. (paragraph) 1 HGB (“Handelsgesetzbuch”: German Commercial of future development. Code) is the responsibility of the parent Company’s Board of Managing Directors. Our responsibility is to express an opinion on the consolidated fi nancial statements and on the group management report based on our audit. Munich, March 19, 2013 We conducted our audit of the consolidated fi nancial statements in accordance with § 317 HGB and German generally accepted standards for the audit of fi nancial statements promulgated by PricewaterhouseCoopers the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW). Those stan- Aktiengesellschaft dards require that we plan and perform the audit such that misstatements materially aff ecting the Wirtschaftsprüfungsgesellschaft presentation of the net assets, fi nancial position and results of operations in the consolidated fi nancial statements in accordance with the applicable fi nancial reporting framework and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible Petra Justenhoven Holger Graßnick Konzernlagebericht misstatements are taken into account in the determination of audit procedures. The eff ectiveness Wirtschaftsprüferin Wirtschaftsprüfer of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated fi nancial statements and the group management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual fi nancial statements of those entities included in consolidation, the determination of the entities to be included in consolidation, the accounting and consolidation principles used and signifi cant esti- Auditor’s Report Auditor’s mates made by the Company’s Board of Managing Directors, as well as evaluating the overall presentation of the consolidated fi nancial statements and the group management report. We be- lieve that our audit provides a reasonable basis for our opinion.

140140 Auditor’s Report Financial Statements Financial Auditor’s Report

Bestätigungsvermerk des Abschlussprüfers Konzernabschluss WashTec AG 141 Financial Statements of WashTec AG – Balance Sheet (HGB)

Assets Dec 31, 2012 Dec 31, 2011 Equity and liabilities Dec 31, 2012 Dec 31, 2011 € € € € A. Non current-assets A. Equity

I. Property, plant and equipment I. Subscribed capital 40,000,000 40,000,000 Fixture and ﬁ ttings 14,676 22,983 Contingent capital 12,000,000 12,000,000 Treasury shares –92,343 II. Financial Assets 39,907,657 40,000,000 Shares in associated companies 128,048,510 128,048,510 128,063,186 128,071,493 II. Capital reserve 90,844,959 90,844,959

B. Current assets III. Retained Earnings 8,811,698 4,096,309 139,564,314 134,941,268 I. Receivables and other assets 1. Receivables from associated companies 13,504,441 8,049,394 B. Provisions 2. Other assets 226,432 270,459 1. Provisions for taxes 109,123 89,615 thereof more than one year € 176,622 2. Other provisions 609,243 705,259 (prior year: € 215,649) 718,367 794,874 13,730,873 8,319,853 C. Liabilities 1. Trade liabilities 38,496 74,825 II. Cash 730 22 2. Liabilities to affi liated companies 246,106 0 730 22 3. Other liabilities 1,269,076 601,234 thereof from taxes € 1,209,347 (prior year: € 578,988) C. Prepaid expenses 41,570 20,833 thereof for social security € 15,879 (prior year: € 18,896) 1,553,678 676,059 Financial Statements of WashTec AG of WashTec Statements Financial

Total assets 141,836,359 136,412,201 Total equity and liabilities 141,836,359 136,412,201

142142 Financial Statements of WashTec AG Balance Sheet Financial Statements of WashTec AG – Income Statement (HGB)

Dec 31, 2012 Dec 31, 2011 € €

Revenues 2,967,399 1,594,215 Other operating income 65,539 243,130 3,032,938 1,837,345 Personal expenses a) Wages and salaries –2,037,826 –794,624 b) Social security, pension and other beneﬁ t costs –114,000 –122,279 thereof for old-age pensions € –83,160 (prior year: € –91,291) –2,151,827 –916,902

Amortization, depreciation and impairment of intangible assets and property, plant and equipment –7,582 –7,512

Other operating expenses –2,438,921 –1,764,663 –4,598,330 –2,689,077 –1,565,392 –851,731

Income from proﬁ t and loss transfer agreement 2,499,659 2,521,691 Expenses fom proﬁ t and loss transfer agreements 3,900,000 2,000,000 Other interest and similar income 99,531 87,878 thereof from affi liated companies € 86,242 (prior year: € 72,729) Interest and similar income –1,923 –44 thereof from affi liated companies € –1,293 (prior year: € –44) 6,497,267 4,609,524

EBIT 4,931,875 3,757,793

Income taxes –19,808 –87,839 AG Statements Financial Statements of WashTec Financial Proﬁ t for the year 4,912,067 3,669,954 Proﬁ t carried forward 4,096,309 4,759,216 Withdrawal from retained earnings 0 –4,332,861 Allocation for diff erence of share repurchase –196,678 0

Retained Earnings 8,811,698 4,096,309

Income Statement Financial Statements of WashTec AG 143 WashTec Worldwide

Subsidiaries Distributors

Australia Denmark Poland An up-to-date overview of our WashTec Australia Pty. Ltd. WashTec A/S WastTec Polska Sp. z o.o. international sales partners can be 21 Burrows Road South Guldalderen 10 ul. Sienna 73 found online at www.washtec.de St. Peters NSW 2044 DK-2640 Hedehusene 00-833 Warsaw Tel. 0061 02 83945002 Tel. 0045 46557717 Tel. 0048 782 402999 Fax 0061 02 83945099 Fax 0045 46557716 [email protected] [email protected] [email protected] Sweden Austria France WashTec Nordics AB WashTec Cleaning Technology GmbH WashTec France S.A.S. Grönkullen Wehlistraße 27 b 84, Avenue Denis Papin S-51781 Bollebygd A-1200 Vienna F-45 808 St. Jean de Braye Cedex Tel. 0046 337006557732 Tel. 0043 13343065-0 Tel. 0033 238607073 [email protected] Fax 0043 13343065150 Fax 0033 238607071 offi [email protected] [email protected] Spain WashTec Spain, S.A.U. Belgium Italy C/Isla Graciosa, 1/Ediﬁ cio Ancora WashTec Benelux WashTec Srl. E-28703 San Sebastián de los Reyes Humaniteitslaan 415 Via Achille Grandi 16/E (Madrid) B-1190 Brussels I-15033 Casale Monferrato Tel. 0034 916636070 Tel. 0032 23760035 Tel. 0039 0142418775 Fax 0034 916636071 Fax 0032 237698 51 Fax 0039 0142453704 [email protected] [email protected] [email protected] Konzernlagebericht United Kingdom Canada Netherlands WashTec UK Ltd. WTMVII Cleaning Technologies WashTec Benelux Unit 14 A Oak Industrial Estate Canada, Inc. Industrieterrein Lansinghage Chelmsford Rd. 623 South Service Road, Unit 1 Radonstraat 9 Great Dunmow Grimsby, Ontario, Canada NL-2718 SV Zoetermeer Essex CM 6 1 XN L3M 4E8 Tel. 0031 793683720 Tel. 0044 1371878800 Tel. 001 8666589274 Fax 0031 793683725 Fax 0044 1371878810 Konzernabschluss WashTec Worldwide WashTec Fax 001 9056437050 [email protected] [email protected] [email protected] Norway USA China WashTec Bilvask Mark VII Equipment Inc. WashTec Car Cleaning Equipment Bedriftsveien 6 5981 Tennyson Street (Shanghai) Co., Ltd. N-0950 Oslo CO-80003 Arvada Building 1, No. 5343 Nanting Tel. 0047 22918180 Tel. 001 3034324910 Road,Tinglin, Fax 0047 22161717 Fax 001 3034230139 Jinshan District, Shanghai 201505 [email protected] [email protected] Tel. 0086 02137 283217-0 Fax 0086 02137 283200 [email protected]

144144 WashTec Worldwide WashTec product range

Products (approx. 2/3 of revenues) Services (approx. 1/3 of revenues)

Roll-over Wash Self-service Commercial Water reclaim Service Wash Chemicals Remote systems tunnels wash systems wash systems systems Full service Management Call-out service Spare parts Operations Business WashTec Carwash Operations

Financing WashTec Financial Services Corporate structure

1) Controlling and proﬁ t and loss transfer WashTec AG agreement Augsburg, Germany 2) Subgroup with Benelux Carwash Manage- ment B.V., Zoetermeer, Netherlands, WashTec 1) 1) Benelux Admistrative B.V. Zoetermeer, WashTec Carwash Operations GmbH AUWA-Chemie GmbH Netherlands and WashTec Augsburg, Germany Augsburg, Germany Benelux N.V., Brussels, Belgium, whose results are disclosed by WashTec Benelux B.V, WashTec Holding GmbH Zoetermeer, Netherlands Augsburg, Germany 3) The company is currently inactive 4) Incl. offi ces in Norway WashTec Financial Services GmbH 1) WashTec Cleaning Technology GmbH 1) 5) WashTec Cleaning Technology GmbH 90%, Augsburg, Germany Augsburg, Germany WashTec Holding GmbH 10% 6) Including subsidiary WTMVII Cleaning Mark VII Equipment Inc. 6) WashTec Italia Srl. Technologies Canada, Inc. in Canada USA Italy

WashTec Denmark AS 4) WashTec France SAS Denmark France

WashTec Cleaning Technology GmbH WashTec UK Ltd. Austria United Kingdom

WashTec Spain SA WashTec Benelux 2) Spain Netherlands

WashTec Nordics AB California Kleindienst Ltd. 3) Sweden United Kingdom

WashTec Cleaning Technology SA 3) WashTec Car Cleaning Equipment Spain (Shanghai) Co. Ltd., China

WashTec Cleaning Technology s.r.o. 5) WashTec Australia Pty Ltd. Czech Republic Australia

WashTec Polska Sp. z.o.o. 5) Poland Financial Calendar

Annual Report 2012 March 26, 2013 Q1 Report 2013 May 7, 2013 Annual General Meeting May 15, 2013, Augsburg Q2 Report 2013 August 7, 2013 Q3 Report 2013 November 6, 2013 Equity Forum, Analysts’ Conference November 11 – 13, 2013, Frankfurt am Main

Publication details Publisher WashTec AG Argonstrasse 7 86153 Augsburg Germany Design/layout Büro Benseler Text WashTec AG Photo altro – die fotoagentur, WashTec AG Printing/litho Mediahaus Biering GmbH, Munich Paper Römerturm Druckfein hochweiß matt 130g/m2 FSC mix Circulation German 500, English 500 WashTec AG Phone +49 821 5584-0 Argonstrasse 7 Fax +49 821 5584-1135 86153 Augsburg www.washtec.de Germany [email protected]