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Wincor Nixdorf holds steady on annual net sales — with some rebalancing

Hardware and banking sales sagged, but increases in retail and software earnings took up the slack, CEO Eckard Heidloff said in the company's annual press conference.

November 11, 2014 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications

At 2.47 billion euros ($3.07 billion), Wincor Nixdorf AG net sales for the fiscal year 2013/2014 ended Sept. 30 were comparable to those for the previous year, the company said in its annual earnings press conference on Monday. The company cited economic inertia in Europe and political unrest in the Middle East and Africa as contributors to the year's flat earnings.

Wincor Nixdorf CEO and President Eckard Heidloff said that the 2014/2015 fiscal year would likely bring more of the same, but vowed that the company would seize market opportunities that present themselves. 

"The economic climate as a whole is considered to be challenging and susceptible to crises. However, we intend to build on prevailing trends in markets offering scenarios for growth," he said.

For the fiscal year 2013/2014:

• Wincor Nixdorf recorded EBITA of 155 million euros ($193 million), up 17 percent from 132 million ($164 million) the previous year. This includes net proceeds from the sale of the company's former production facility in Singapore at the end of the September, which amounted to 20 million euros ($25 million);
• profit for the fiscal year rose by 18 percent to 104 million euros ($129 million), compared with 88 million euros ($109 million) year over year; and
• the proposed dividend is set to increase by 18 percent to 1.75 euros ($2.17) compared with 1.48 euros ($1.84) the previous year.

Looking ahead to the 2014/2015 fiscal year, the company anticipates moderate growth in net sales, despite current business conditions, and expects to achieve a percentage increase in EBITA slightly above that of net sales.

Heidloff told press conference attendees that how Wincor Nixdorf positions itself in upcoming years will depend a great deal on two trends:

The first trend is the increasing digitization of consumer channels. "Wincor Nixdorf is favorably positioned to support retail banks and retailers in their efforts to combine digital and stationary channels to the customer," he said.

These efforts include branch restructuring and omnichannel operations that bring together channels, such as the Internet, call centers, and branch or store structures. In particular, the Wincor Nixdorf software portfolio represents an important tool for merging the various channels and facilitating efficient interaction, Heidloff said.

The second trend relates to sustained growth in emerging economies. Heidloff said that despite a slight loss in forward momentum, the company believes that these markets look set to become even more important in the future, simply on the basis of demographic developments. He said that, in light of this, Wincor would continue to pursue its current restructuring program and would consider possible acquisitions in support of its activities.

Net sales up in Germany, down in Europe

In Germany, net sales rose by 4 percent to 588 million euros ($731 million), however, in Europe (excluding Germany), net sales declined by 6 percent to 1.14 billion ($1.42 billion) (2012/2013: €1,216 million); this was attributable mainly to a downturn in business with Russia, Ukraine, and Turkey, as well as to persistently sluggish business in the Southern European countries of the Eurozone.

The Asia/Pacific/Africa region saw net sales rise by 6 percent to 445 million euros ($553 million), however, business in the Middle East and Africa was adversely affected by political uncertainty in these regions.

As a region, the Americas recorded growth of 11 percent, taking net sales to 294 million euros ($365 million), with expansion in both North and South America. The proportion of group net sales generated in the Americas increased to 12 percent from 11 percent in the previous fiscal year.

Downturn in banking, growth in retail

Developments in the wider economy took their toll in particular on the banking segment, which saw business decline year on year.

The retail segment, by contrast, recorded encouraging growth, benefiting from global retail enterprises to standardize their international IT infrastructures.

The banking segment accounted for 63 percent of total net sales as compared with 65 percent the previous year. Retail contributed 37 percent, compared with 35 percent in fiscal year 2012/2013.

Encouraging growth in software and services business

Following an increase in the previous fiscal year, Wincor's hardware business contracted slightly in 2013/2014. However, the software and services business, which is of increasing importance to the company, according to Heidloff, recorded encouraging growth.

Net sales generated from hardware fell by 5 percent year over year to 1.13 billion euros ($1.40 billion), a downturn attributable primarily to a loss of net sales in the emerging economies of Eastern Europe. The hardware business contributed 46 percent of net sales.

Meanwhile, net sales from software and services rose by 5 percent to 1.34 billion ($1.67 billion), growth that the company attributes to larger revenue contributions from software as well as higher-end business such as professional services, managed services, and outsourcing.

Overall, the share of total group net sales generated from the software and services business rose to 54 percent from 52 percent in fiscal 2012/2013.

High level of R&D spending maintained

Wincor Nixdorf again made substantial investments in product and technology development during the fiscal year. Research and development costs amounted to 98 million euros ($122 million), compared with 99 million euros ($123 million) in 2012/2013. The R&D ratio was unchanged year on year at 4.0 percent.

Further details relating to fiscal 2013/2014 can be found in a PDF document published by Wincor Nixdorf AG as part of its annual press conference in Düsseldorf. 

About Suzanne Cluckey

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Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally.