Article

Significant growth in earnings brightens outlook for Wincor Nixdorf

Buoyed by business in emerging markets, company exceeds forecast for first half of its fiscal year.

April 26, 2013

"Slightly more positive," is more than slightly good news for Wincor Nixdorf, which this week announced an improved business outlook following the first two quarters of the company's 2012/2013 fiscal year. The German ATM manufacturer anticipates that it will exceed its previous forecast of 2 percent growth in net sales, with EBITA of at least €120 million ($156 million) — including restructuring costs.

The Wincor Nixdorf Group saw net sales rise by 10 percent in the first six months of its fiscal year, as compared with the same period in its 2011/2012 fiscal year. The company netted €1,266 million ($1.64 billion), compared with €1,156 million ($150 billion) in the same period last year.

The EBITA margin was 1.3 percentage points higher at 5.2 percent, compared with 3.9 percent. Profit for the first six months of fiscal 2012/2013 was up 63 percent at €44 million ($57 million) compared with €27 million ($35 million).

Progress in global realignment

A significant factor in the company's encouraging performance is the continued growth in emerging markets. Meanwhile, many industrialized countries — especially in Europe — still show no signs of a sustained recovery.

"The progress we have made with regard to our business in the emerging markets provides further support for the realignment of our global activities, which is making good headway," said Wincor Nixdorf CEO Eckard Heidloff.

As part of the company's restructuring effort, production at the company's facility in Singapore will move to China, while administrative and support positions continue migrating to centralized regional service centers. Efforts to strengthen the company's software business and its professional services capabilities are also proceeding according to plan.

"The success we achieved so far confirms that we are on the right path with the measures we have introduced to realign our business," Heidloff said. "It is also clear that we need to remain fully committed to pursuing this path."

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 13 percent to €828 million ($1.07 billion) in the first six months of fiscal 2012/2013 (€732 million/$9.52 billion).
• Second-quarter revenue was up 11 percent.
• EBITA in the first six months of the fiscal year was at €55 million ($72 million), an increase of 112 percent (€26 million/$34 million).

Retail

• Net sales rose by 3 percent in the first six months of the fiscal year, reaching €438 million ($569 million) in total (€424 million/$551 million).
• In the second quarter, net sales were 5 percent higher compared to the previous year.
• EBITA fell by 42 percent to €11 million ($1.4 million) in the period just ended (€19 million/$25 million).

Hardware, Software and Services

• Net sales attributable to the hardware business rose in the first half of the fiscal year to €616 million ($801 million), an improvement of 13 percent (€543 million/$706 million).
• The share of total net sales generated by the hardware business rose to 49 percent in the period (47 percent).
• In the software/services business, net sales were €650 million ($845 million), up 6 percent (€613 million/$797 million).
• The proportion of total net sales derived from software/services fell to 51 percent (53 percent).

Germany

• Net sales for the first half of the fiscal year were €284 million ($369 million), a decrease of 5 percent (€300 million/$390 million),
• Net sales accounted for 22 percent of total net sales in the reporting period (26 percent).
• In the second quarter, net sales in Germany fell to €130 million ($169 million), a decrease of 10 percent (€145 million/$189 million).

Europe (exluding Germany)

• Net sales rose in the first six months of the fiscal year to €631 million ($820 million), an increase of by 13 percent (€559 million/$727 million), fueled by growth in emerging European markets.
• At 50 percent (48 percent), Europe generated the largest share of  total net sales.
• In the second quarter of the fiscal year, net sales in this region were €314 million ($408 million), an improvement of 19 percent (€264 million/$343 million).

Asia/Pacific/Africa

• Net sales rose by 22 percent to €215 million ($280 million) in the first six months of the current fiscal year (€176 million/$229 million).
• Net second-quarter sales in the region rose to €95 million ($124 million), an increase of 12 percent (€85 million/$111 million).
• The region contributed a share of 17 percent (15 percent) to total net sales.

The Americas

• In U.S. dollars, the Americas recorded a 10 percent increase in net sales during the first half of the fiscal year. In euros, this represents an increase of 12 percent to €136 million ($177 million) over the previous fiscal year (€121 million/$157 million).
• On this basis, the proportion of total net sales generated by the Americas was unchanged at 11 percent. 
• In the second quarter, net sales in the region were €58 million ($75 million), a 7 percent increase (€54 million/$70 million).

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photo: Horia Varlan