Latest / WTR Small-Cap Spotlight / Circus SE (CA1): Live From Munich: Inside Circus SE's AI-Enabled Robotic Kitchen

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Circus SE (CA1): Live From Munich: Inside Circus SE's AI-Enabled Robotic Kitchen · WTR Small-Cap Spotlight

• 0:15
  SPEAKER_00: Welcome to the WTR showcase with Circus SE.
• 0:18
  SPEAKER_00: I am your host, James Kisner, technology analyst at Water Tower Research.
• 0:22
  SPEAKER_00: Today's showcase is a special one because we are coming to you from Munich, Germany, or at least my guest is, where I'm joined by Alina Koles, head of investor relations of Circus SE, which trades on Zetra under the ticker symbol CA1.
• 0:39
  SPEAKER_00: Also here with Alina is my colleague Mike McCormick, head of client relations for water tower research.
• 0:47
  SPEAKER_00: Circus is a German AI robotics company building the first fully autonomous kitchen systems for both commercial and defense customers.
• 0:55
  SPEAKER_00: Its flagship CA1 cooks fresh, personalized meals from scratch with almost no human labor, all powered by the company's proprietary Circus OS software.
• 1:04
  SPEAKER_00: Circus systems are operating across Europe today for customers, including Meta, Rev, Mercedes-Benz, and the German Armed Forces.
• 1:12
  SPEAKER_00: In today's showcase, Alina will walk us through the product portfolio and we'll discuss the company's ecosystem strategy, its new proprietary ingredients program, and the growing defense opportunity.
• 1:22
  SPEAKER_00: Before we dive in, quick note Circus SE publishes its financial reports and press releases on the investor relations section of its website at circus-group.com.
• 1:32
  SPEAKER_00: And as a reminder, the showcase cannot be reproduced or transcribed without written permission from Water Tower Research.
• 1:38
  SPEAKER_00: So, Elena, welcome and thank you for joining us from Munich.
• 1:42
  SPEAKER_02: James, wonderful to have you virtually in Munich.
• 1:44
  SPEAKER_02: So this is where the robots live.
• 1:47
  SPEAKER_00: Awesome.
• 1:47
  SPEAKER_00: All right, we'll just kick off then.
• 1:49
  SPEAKER_00: So Alina, let's just start with a big picture.
• 1:52
  SPEAKER_00: For investors who are newer to the story, remind us of Circus's Vision.
• 1:55
  SPEAKER_00: How are you transforming food service in both commercial and defense applications?
• 2:00
  SPEAKER_02: Well, yeah, food processing is a huge global industry.
• 2:04
  SPEAKER_02: And only like 4% of it is robotized.
• 2:07
  SPEAKER_02: If you compare it to automotive, then we have 30% of robotics in automotive.
• 2:14
  SPEAKER_02: So all kinds of service industries like healthcare, hospitality, or cleaning are still very labor-heavy.
• 2:22
  SPEAKER_02: And if you can automate a car factory, you can also automate a canteen.
• 2:29
  SPEAKER_02: It just needed some crazy people, which it appears to be us, to do it.
• 2:36
  SPEAKER_02: Our approach is not to simply add another kitchen appliance to the kitchen.
• 2:44
  SPEAKER_02: Our approach is really to build an AI-native robotic infrastructure that can be deployed anywhere.
• 2:53
  SPEAKER_02: All our products, as you mentioned, are dual-use.
• 2:56
  SPEAKER_02: So we have commercial, canteens, retail, hospitality, and then we have defense with the Bundeswehr, the German Armed Forces, and other NATO partners.
• 3:08
  SPEAKER_02: So it's the same robotic system, the same brain, but a different mission.
• 3:14
  SPEAKER_02: And yeah, our overall company mission says feeling humanity.
• 3:19
  SPEAKER_02: That sounds very big.
• 3:21
  SPEAKER_02: But putting it in simple words, you can really put you can put a robot everywhere where people eat.
• 3:28
  SPEAKER_00: Yeah, that's a very good overview.
• 3:30
  SPEAKER_00: And uh it doesn't like a big vision when you put it that way.
• 3:32
  SPEAKER_00: Um, you know, this is kind of uh the exciting part, I think.
• 3:37
  SPEAKER_00: Um you know, let's get into the portfolio itself, starting with your flagship.
• 3:40
  SPEAKER_00: Just tell us about the CA1.
• 3:42
  SPEAKER_00: Um, what does it do?
• 3:43
  SPEAKER_00: Where is it being deployed today?
• 3:46
  SPEAKER_02: Um, so this is our CA1.
• 3:49
  SPEAKER_02: Um, this is our flagship system, and it's basically a whole kitchen on seven square meters.
• 3:56
  SPEAKER_02: Um, it can cook up to six dishes in parallel, and it is deployed at customers of blue chip customers like Mercedes Benz um retail is an example with uh Rieve Supermarkets, which is the biggest uh European uh supermarket chain.
• 4:13
  SPEAKER_02: Um, and it's also active at the Bundeswehr, the German Armed Forces, for example.
• 4:19
  SPEAKER_00: Great.
• 4:20
  SPEAKER_00: So uh could you actually show us uh the CA1 in action and walk us through what's happening as it makes a meal for us?
• 4:27
  SPEAKER_02: Well, I shouldn't, I'm happy to show you.
• 4:29
  SPEAKER_02: Um but first of all, maybe apologies uh for everyone watching and not being able to taste now.
• 4:35
  SPEAKER_02: Um so we have some meals being cooked already.
• 4:39
  SPEAKER_02: Um but just to show you like the process, we can order on the order screen, you can order on a tablet, you can also order with a waiter, so there are different uh modes for ordering.
• 4:54
  SPEAKER_02: You can choose whatever is uh loaded and available on that day.
• 4:58
  SPEAKER_02: Um we have some pasta, we have some chilies and carni, we have some salads, and um some sweet brownies.
• 5:07
  SPEAKER_02: But let's go with something, yeah.
• 5:09
  SPEAKER_02: Let's go with the chilies and carni.
• 5:12
  SPEAKER_01: So, what's happening with this dish now?
• 5:14
  SPEAKER_02: So this being heated up uh according to its cooking profile.
• 5:17
  SPEAKER_02: Every ingredient has a um own specification of how it should be cooked and for how long and how hot.
• 5:25
  SPEAKER_02: So we have produced over 20,000 meals um already with CA1 systems.
• 5:29
  SPEAKER_02: Um we have reached an uptime of over 90%.
• 5:34
  SPEAKER_02: And what we use also is vision intelligence um to look inside of the system or to have a look inside the system every time um during the entire cooking process.
• 5:45
  SPEAKER_02: So if something goes off, um the system corrects its life.
• 5:49
  SPEAKER_01: Looks like our pasta is also being poured.
• 5:54
  SPEAKER_01: It's funny how it shakes the pot just like a human would.
• 5:57
  SPEAKER_02: Right?
• 5:57
  SPEAKER_02: Yeah, very human.
• 5:59
  SPEAKER_02: Um I pushed some brownies as well.
• 6:08
  SPEAKER_02: Um yeah, so now it's time to get you hungry.
• 6:16
  SPEAKER_00: That's impressive.
• 6:17
  SPEAKER_00: So um, you know, you you originally added a second system to the family with the acquisition of Albert.
• 6:23
  SPEAKER_00: So I believe that's behind what's called the CA-A.
• 6:26
  SPEAKER_00: So where are you in the integration of that?
• 6:29
  SPEAKER_00: And you know, what does the CAA bring to the portfolio?
• 6:32
  SPEAKER_00: How does it fit in the strategy?
• 6:34
  SPEAKER_02: So the CAA, um, which is over here, is basically the small brother of the CA1.
• 6:39
  SPEAKER_02: Um, it is the fastest way um to light up many customer locations.
• 6:45
  SPEAKER_02: It has a um footprint of only one square meter.
• 6:48
  SPEAKER_02: Um so we acquired the Arbitz platform and um a small, very sharp team um with an all shares transaction.
• 7:00
  SPEAKER_02: We get one going.
• 7:03
  SPEAKER_02: I'm sure Mike will want another one as well.
• 7:06
  SPEAKER_02: Um which is also nice here.
• 7:09
  SPEAKER_02: Breakeven is at 17 cups a day already.
• 7:13
  SPEAKER_02: Um so with 20 cups a day, you have a profitable, a good profitable case.
• 7:19
  SPEAKER_02: Clients of us run with 60 cups a day, so it's like three times um breakeven.
• 7:26
  SPEAKER_02: Um so it would also work with a more low traffic location as well.
• 7:30
  SPEAKER_02: Um the deployment universe is huge.
• 7:33
  SPEAKER_02: Uh we have hotels, we have gyms, we have healthcare, we have offices, um, transport hubs, um, all needing some fresh, nutritious, also functional food, um, which is all cup-based and liquid.
• 7:49
  SPEAKER_02: So we do have warm soups and we have some cold smoothies.
• 7:53
  SPEAKER_02: We can also do matchas, frappes, and use supplements as well.
• 7:58
  SPEAKER_02: Um, so supplements which are very popular right now, I see as creatine, magnesium, uh, collagen.
• 8:05
  SPEAKER_02: So all of these things are being stored inside the system as well.
• 8:09
  SPEAKER_02: It's a frozen supply chain, which also means that we have zero food waste or our customers have zero food waste.
• 8:15
  SPEAKER_02: Um, yeah.
• 8:17
  SPEAKER_00: It's like a high-end smoothie shop, collagen.
• 8:19
  SPEAKER_00: That's amazing.
• 8:20
  SPEAKER_00: Um you touched on something that I'd like to drill down a little bit on.
• 8:24
  SPEAKER_00: Um, you know, let's talk about the business model for a moment.
• 8:27
  SPEAKER_00: So when a customer buys a system, like what does that look like?
• 8:29
  SPEAKER_00: How does the pricing model work?
• 8:31
  SPEAKER_00: And maybe how does that differ across the portfolio if it does?
• 8:35
  SPEAKER_02: Yeah.
• 8:36
  SPEAKER_02: Um so we sell all our products once, and then we earn on the software forever.
• 8:43
  SPEAKER_02: Um and now we also uh earn on the ingredients as well.
• 8:48
  SPEAKER_02: Um so we started with the frozen supply chain with um Albert and now embedding more and more of chilled um ingredients um as well.
• 8:59
  SPEAKER_02: Um so there are two ways to buy a uh to buy a system.
• 9:03
  SPEAKER_02: Um you can purchase it or you can lease it through our financing partners uh like Siemens, for example.
• 9:10
  SPEAKER_02: Um that uh really lower lowers the barrier um for our enterprise customers.
• 9:16
  SPEAKER_02: Um there's no big hubs hit um and the procurement cycle is just uh way faster.
• 9:25
  SPEAKER_02: Um yeah, as you saw, the CA1, that is our flagship uh system.
• 9:29
  SPEAKER_02: Um it also has a hardware ticket, then um a monthly uh Circus OS subscription.
• 9:35
  SPEAKER_02: The CAA uh you see in the back, um that is really like the entry product for a lot of clients, um, with a lower hardware um price and um a lower monthly uh fee for the circus OS.
• 9:49
  SPEAKER_02: Um and it scales very fast.
• 9:51
  SPEAKER_02: So this is really a volume play with the CAA.
• 9:55
  SPEAKER_02: Um what we also have is a CAM that is different, slightly different again because it's it's kind of defense pricing.
• 10:04
  SPEAKER_02: Um we have custom SLAs, um, longer contracts and higher complexity there.
• 10:11
  SPEAKER_02: Um but all have a Sex OS subscription.
• 10:14
  SPEAKER_02: Um, so with every deployed system every month, um, and that fleet um scales automatically.
• 10:23
  SPEAKER_00: The kitchen robotics.
• 10:24
  SPEAKER_00: So, what was the strategy behind that acquisition and how should we think about it you know, in terms of integration into the business?
• 10:31
  SPEAKER_02: Um yeah, we uh what we acquired is the whole company, Kitchen Robotics.
• 10:36
  SPEAKER_02: They were founded in 2019, so they're really uh like the dinosaurs in kitchen robotics and um deep in AI-based control and uh algorithms.
• 10:49
  SPEAKER_02: Um we acquired them for their like over 30 international patents um and all the software IP.
• 10:57
  SPEAKER_02: Um that was an all cash transaction.
• 11:00
  SPEAKER_02: Um it was a low, low six um figure range.
• 11:05
  SPEAKER_02: Um the deal was starting last year in Q4 of 2025 and uh was now fully closed in in the beginning of um 2026.
• 11:19
  SPEAKER_02: And strategically, um it was also very relevant for us to get the certifications and of course the IP and patents, but also the NSF certification.
• 11:30
  SPEAKER_02: Um so that gives us just so now we just have the US regulatory in our bag.
• 11:37
  SPEAKER_00: That sounds like it'd be very valuable.
• 11:38
  SPEAKER_00: So um you know you and the team talk a lot about the circus ecosystem.
• 11:43
  SPEAKER_00: So, you know, what is what does circus mean by ecosystem, you know, beyond beyond your hardware and software?
• 11:49
  SPEAKER_00: Um, I think that tied to your revision, to your outlook for this year, which which you guys framed as a conscious decision.
• 11:55
  SPEAKER_00: So maybe you can just help us understand the thinking a bit there.
• 11:59
  SPEAKER_02: Um sure.
• 12:01
  SPEAKER_02: Well, I think in three years, this decision would look obvious.
• 12:07
  SPEAKER_02: Um the alternative would have been building volume instead of a business.
• 12:13
  SPEAKER_02: Um it's harder to tell the story short term now, um, but it's the only one that really compounds.
• 12:21
  SPEAKER_02: Um so the choice was doing a sprint on hardware for one year or build layers that pay back to us for the next uh 10 years.
• 12:33
  SPEAKER_02: Um so our customers were very clear on that, our long-term investors were also clear on that, uh, which way to go.
• 12:39
  SPEAKER_02: Um, so we're essentially shifting our revenue um from this year, which was very backloaded, anyways, and do the production ramp um in 2027 and also ramping up then uh automatically the software subscription and also the um revenues coming from our new ingredient uh supply chain and ecosystem.
• 13:02
  SPEAKER_02: So now we really have all layers in place to scale properly.
• 13:07
  SPEAKER_02: And that's also a great mode that only gets deep, deeper and deeper over time.
• 13:13
  SPEAKER_00: That makes sense.
• 13:14
  SPEAKER_00: Has has anything changed at all about your view of the market itself or the size of the opportunity for circus?
• 13:21
  SPEAKER_02: Um, the market got bigger, um, and barely no one else is playing uh seriously at that production layer as we are.
• 13:32
  SPEAKER_02: Um so yeah, food processing is huge.
• 13:35
  SPEAKER_02: Um it's under automated, as I said in the beginning.
• 13:38
  SPEAKER_02: Um other um industries are far far more automated.
• 13:45
  SPEAKER_02: Um in food service, we also have some structural tailwinds, of course.
• 13:49
  SPEAKER_02: So there are labor shortages worldwide, there's food inflation, um, the defense budgets are growing as well, and um the competitive landscape is uh surprisingly empty um at the like autonomous food production layer.
• 14:07
  SPEAKER_02: Um lot of delivery robots and cloud kitchen real estate, but very few actual uh food production robots.
• 14:15
  SPEAKER_02: And I don't know, every time I see food courts at airports or people eat, I really see our thumb.
• 14:22
  SPEAKER_02: That's it's it's um yeah, it's kind of ruined uh seeing food courts for me.
• 14:29
  SPEAKER_00: Yeah, it seems like a pretty wide open opportunity.
• 14:32
  SPEAKER_00: So um, you know, on this sort of related topic, I I want to talk about your announcement on ingredients.
• 14:37
  SPEAKER_00: Perhaps I'll kind of lop a few questions together here.
• 14:40
  SPEAKER_00: Um, you know, just why does Circus Field need to build its own ingredient strategy?
• 14:44
  SPEAKER_00: You know, how complex was that?
• 14:47
  SPEAKER_00: Um you know, does it change the products you're able to offer?
• 14:51
  SPEAKER_00: Does it simplify sourcing and give you more control of the supply chain?
• 14:54
  SPEAKER_00: Just say what you can about ingredients.
• 14:56
  SPEAKER_02: Um well, ingredients or the ingredient layer is like the biggest margin lever in this whole industry.
• 15:05
  SPEAKER_02: Um and we already owned everything except of that, um, until now.
• 15:11
  SPEAKER_02: Um so the problem is really the traditional restaurant sourcing.
• 15:15
  SPEAKER_02: There's like a 2 to 4% margin um with those kickback um structures um in place there.
• 15:23
  SPEAKER_02: And now with our proprietary um ingredient system or ingredient units, um, we have increased, we can we are able to increase the margin up to uh 45%.
• 15:33
  SPEAKER_02: Um I think it's it's well inspired by an espresso or coffee.
• 15:39
  SPEAKER_02: So it's a great espresso machine, but the real business is the capsule.
• 15:44
  SPEAKER_00: And also how long will it take before ingredients start to impact the business in a meaningful way?
• 15:53
  SPEAKER_00: Are there any major obstacles to implementing that?
• 15:55
  SPEAKER_00: Um for example, uh building enough diversity of sources.
• 16:02
  SPEAKER_02: So we see a meaningful revenue contribution in 2027.
• 16:10
  SPEAKER_02: Um all obstacles are solvable.
• 16:12
  SPEAKER_02: Um we're already we're already in the making of solving them.
• 16:16
  SPEAKER_02: Um so now we're just really rolling it out across customers.
• 16:20
  SPEAKER_02: Um the ingredient revenue scales then with every deployed fleet.
• 16:25
  SPEAKER_02: Um, and the meaningful contribution as I had will be like 2027.
• 16:29
  SPEAKER_02: Um and what we already have is the frozen supply chain from um the CAA system.
• 16:38
  SPEAKER_02: And now in line, uh, which is just simply the next step, is um the fresh tilled ingredients, um which is different logistics, higher margins, uh, more products.
• 16:50
  SPEAKER_02: Um yeah, so maybe the obstacle was really finding the good a good diversity of sources, um, like a multi-partner architecture depending on the region as well.
• 17:02
  SPEAKER_02: Um, so that's already underway and great um great benefits from it.
• 17:10
  SPEAKER_00: Great.
• 17:11
  SPEAKER_00: Uh okay, just a few more here um before we wrap up.
• 17:14
  SPEAKER_00: You know, just this talk briefly on defense, which we haven't really talked about very much, um, which has been kind of one of your fastest you know growing areas.
• 17:22
  SPEAKER_00: Um, where does the defense opportunity stand today?
• 17:24
  SPEAKER_00: Can you kind of give an update on the CAM?
• 17:28
  SPEAKER_02: Uh yeah, sure.
• 17:29
  SPEAKER_02: Um, well, defense is the fastest growing segment.
• 17:34
  SPEAKER_02: All our products are dual use.
• 17:36
  SPEAKER_02: Um CAM is a game changer for how like feed how to feed forward troops.
• 17:44
  SPEAKER_02: Um so yeah, defense is the the fastest growing segment for all our products since they are all dual use.
• 17:53
  SPEAKER_02: CAM is one game changer though, because it is um it changes the way how to feed forward troops, military troops, um, and brings a lot of strategic value.
• 18:03
  SPEAKER_02: Um it really reduces personal exposure um at forward positions, um, which is a huge key.
• 18:10
  SPEAKER_02: Um so it frees soldiers from sitting in the kitchen or standing in the kitchen uh and brings them as well as some consistent nutrition anywhere they are.
• 18:20
  SPEAKER_02: Um yeah, so one CAM is comparable to one field kitchen, um, but with roughly 5% of the staff and 10 times the setup speed.
• 18:36
  SPEAKER_00: Yeah, it makes makes a ton of sense.
• 18:38
  SPEAKER_00: My grandfather was a cook in Old War 2, so uh might not have had to be there.
• 18:42
  SPEAKER_00: Um so uh, you know, let's turn to a customer that you recently uh announced, um Sakura.
• 18:50
  SPEAKER_00: Uh and you guys described them as an early strategic partner.
• 18:52
  SPEAKER_00: And just, you know, for those investors who may not be familiar with them, particularly here in the US, like who is Sakura?
• 18:58
  SPEAKER_00: Maybe you could share a few key stats and tell us why that relationship is strategically important to Circuits.
• 19:04
  SPEAKER_02: Yeah.
• 19:06
  SPEAKER_02: So Secura is for us the fastest channel into um German industrial canteens.
• 19:15
  SPEAKER_02: Um it's one partner with dozens of blue chip um customers on their end.
• 19:20
  SPEAKER_02: So Secura brings the accounts and the operational footprint, and we bring the technology.
• 19:26
  SPEAKER_02: Uh Secura is a German facility management group.
• 19:30
  SPEAKER_02: They have over a thousand of employees and over 200 um of like really enterprise customers, uh, a lot of in the automotive sector, for example.
• 19:41
  SPEAKER_02: Um, yeah, like Audi, BMW, Porsche, uh we have Tyson Group as well.
• 19:46
  SPEAKER_02: So a lot of industrial scale um workplace catering.
• 19:52
  SPEAKER_00: Yeah, sounds like an exciting uh opportunity with a lot of leverage.
• 19:56
  SPEAKER_00: Um, just uh one final question.
• 19:58
  SPEAKER_00: So we've kind of alluded to the US a little bit.
• 20:00
  SPEAKER_00: You've had some marquee, you know, US-linked customers in the mix.
• 20:04
  SPEAKER_00: You know, what's your read on the US market and how does it fit into the ecosystem strategy you've been building?
• 20:10
  SPEAKER_02: Yeah.
• 20:11
  SPEAKER_02: Um the US market is wide open.
• 20:16
  SPEAKER_02: Um the US food service is like a trillion-dollar market, um, still very labor-heavy, hitting real real wage pressure.
• 20:27
  SPEAKER_02: Um that's um exactly the setup we have been waiting for, right?
• 20:32
  SPEAKER_02: Um there's one example, uh Travis uh Kalinick, who's the ex-founder of uh Uber.
• 20:38
  SPEAKER_02: Um, and he's now looking into robotics and cloud kitchens.
• 20:43
  SPEAKER_02: Um, so that is also, I think, a great signal that someone like him, um, as sharp as him, um, is now also leaning into that market.
• 20:52
  SPEAKER_02: Um, so it's a it's a good place to be.
• 20:55
  SPEAKER_02: And um, maybe also for US investors, we do have an ADR uh level one in place, and we're accessible to uh US institutional investors.
• 21:06
  SPEAKER_02: And increasingly to their radar as well, I think.
• 21:11
  SPEAKER_00: Great, great.
• 21:12
  SPEAKER_00: Well, Elena, thank you so much for your insights and and thank you uh for the demo.
• 21:16
  SPEAKER_00: It's been a real treat to see those systems.
• 21:19
  SPEAKER_00: Um, you know, once again, uh that's Alana Coles, head of investor relations of Circus SE, trading on uh CTRA under the ticker CA1.
• 21:26
  SPEAKER_00: Um finally a special thanks to the producer and editor of the showcase, my WTR colleague, Krista Fitzpatrick.
• 21:33
  SPEAKER_00: To learn more about Circus, please visit the Investor Relations page on their website at circus dashgroup.com and access our research on WTR's website, which is Watertower Research.com.
• 21:42
  SPEAKER_00: I thank everybody for joining us, and please note that the views expressed in the showcase may not necessarily reflect the views of Watertower Research LC and are provided for informational purposes only.
• 21:52
  SPEAKER_00: This event may not be distributed or reproduced without written consent of Watertower Research and should not be considered research nor recommendation.
• 21:59
  SPEAKER_00: WTR is an investment engagement firm, not a licensed broker, broker dealer, market maker, investment bank, underwriter, or investment advisor.
• 22:07
  SPEAKER_00: Additional disclaimers can be found at Watertower Research dot com.
• 22:11
  SPEAKER_02: Thanks, James.
• 22:12
  unknown: Uh