Article

Emerging markets buoy Wincor fortunes

Europe's ATM giant raises its fiscal year forecast in response to higher-than-expected revenues.

July 25, 2013

After closing out the first nine months of fiscal 2012/2013, Wincor Nixdorf AG has found itself ahead of its earnings expectations, prompting the company to make an upward adjustment in its forecast for the year.

Previous guidance for the fiscal year predicted 2 percent growth in net sales and operating profits of €120 million (including restructuring costs). But given performance over three quarters, Europe's ATM giant upped its outlook to 5 percent growth in net sales and EBITA of €130 million (with restructuring costs).

Wincor said the new numbers reflect expectations for a "relatively subdued" fourth quarter compared to the same period during the previous year.

In this most recently completed business quarter, Wincor saw net sales rise to €1,841 million, compared with €1,704 million in the same period of the previous year. EBITA, including restructuring costs, increased to €92 million (€69 million), while profit for the period rose by 45 percent to €61 million (€42 million).

For the first three quarters of 2012/2013, Wincor recorded net sales growth of 8 percent and an operating profit of 33 percent. 

Restructuring

Wincor CEO and president Eckard Heidloff credited Wincor's organizational restructuring as an important factor in the company's rising sales.

"We are back on track for growth, which is a testament to the success of our realignment program," Heidloff said during the earnings report. "What is more, we will continue to press ahead with our restructuring measures."

Wincor embarked approximately two years ago on a realignment program that included moving its Singapore division to China and migrating administrative and support positions to centralized regional service centers.

These adjustments contributed to significant forward momentum in emerging markets, Heidloff said. This growth has offset sluggish sales in Wincor's core market — industrialized Europe — which continues to feel the effects of a major recession.  

Heidloff also made reference to the company's establishment of its own software headquarters in Utrecht, Netherlands, which will help the company expand its presence in the software market for retail banks and retailers. The facility will open on Oct. 1, the beginning of Wincor's new fiscal year.

Following are earnings reported by business and market segments. Numbers in parentheses (euro/dollar) indicate returns for the same period in the previous fiscal year:

Banking  

• Net sales rose by 11 percent to €1.2 billion ($1.5 billion) in the first nine months of fiscal 2012/2013 (€732 million/$966 billion).
• Third-quarter revenue was up 8 percent.
• EBITA for the first nine months of the fiscal year was at €79 million ($104 million), an increase of 76 percent (€45 million/$59 million).

Retail

• Net sales rose by 2 percent in the first nine months of the fiscal year, reaching €624 million ($823 million) in total (€611 million/$806 million).
• In the third quarter, net sales were 1 percent lower compared to the previous year.
• EBITA fell by 46 percent to €13 million ($17 million) in the period just ended (€24 million/$32 million).

Hardware, Software and Services

• Net sales attributable to the hardware business rose in the first three-quarters of the fiscal year to €890 million ($1.2 billion), an improvement of 13 percent (€787 million/$1.0 billion).
• The share of total net sales generated by the hardware business rose to 48 percent in the period (46 percent).
• In the software/services business, net sales were €951 million ($1.25 billion), up 4 percent (€917 million/$1.21 billion).
• The proportion of total net sales derived from software/services fell to 52 percent (54 percent).

Germany

• Net sales for the first nine months of the fiscal year were €412 million ($543 million), a decrease of 5 percent (€434 million/$572 million),
• Net sales accounted for 23 percent of total net sales in the reporting period (25 percent).
• In the third quarter, net sales in Germany fell to €128 million ($168 million) year-over-year, a decrease of 4 percent (€133 million/$175 million).

Europe (excluding Germany)

• Net sales rose in the first nine months of the fiscal year to €924 million ($1.21 billion), an increase of 11 percent (€830 million/$1.0 billion), fueled by growth in emerging European markets.
• At 50 percent (49 percent), the region generated the largest share of  total net sales.
• In the second quarter of the fiscal year, net sales in this region were €293 million ($386 million), an improvement of 8 percent (€271 million/$357 million).

Asia/Pacific/Africa

• Net sales rose by 20 percent to €317 million ($418 million) in the first nine months of the current fiscal year (€264 million/$348 million).
• Net third-quarter sales in the region rose to €102 million ($134 million), an increase of 16 percent (€88 million/$ 116 million).
• The region contributed a share of 17 percent (16 percent) to total net sales.

The Americas

• In U.S. dollars, the Americas recorded a 6 percent increase in net sales during the first three-quarters of the fiscal year. In euros, this represents an increase of 7 percent to €188 million ($248 million) over the previous fiscal year (€176 million/$232 million).
• On this basis, the proportion of total net sales generated by the Americas was unchanged year-on-year at 10 percent. 
• In the third quarter, net sales in the region were €52 million ($68 million), a 5 percent decline (€88 million/$116 million).

Read more about manufacturers.

photo: carolyn conner