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Wincor Nixdorf reports 'sluggish' third quarter sales, maintains outlook

Wincor Nixdorf AG today reported stronger third-quarter net sales compared with the same three-month period last year, but expects a further decline in sales and operating profit.

July 27, 2010

Wincor Nixdorf AG today reported stronger third-quarter net sales compared with the same three-month period last year, but based on the quarterly performance the company expects a further decline in sales and operating profit for the 2010 fiscal year because of the worldwide economy.

The Paderborn, Germany-based ATM manufacturer recorded 2010 third quarter net sales of 521 million euros (U.S $677.1 million), up 5 percent compared with 496 million euros (U.S. $644.7 million) for the same three-month period last year.

Wincor Nixdorf, the world’s second-largest ATM manufacturer based on annual shipments, reported third-quarter sales of 341 million euros from its banking division, an increase of 3 percent compared with 330 million euros in 2009. In retail, the business logged 180 million euros in sales, up 8 percent compared with 166 million euros in 2009’s third quarter.

Earnings before interest, tax and amortization (EBITA) fell 6 percent to 33 million euros compared with 35 million euros for the same three-month period last year.

Wincor Nixdorf reported a 20 million euro profit for the thee-month period, down 13 percent compared with 23 million euros for the same three month period in 2009.

In the Americas, Wincor Nixdorf achieved 45 percent growth in net sales of 64 million euros compared with 44 million in 2009’s third quarter. On the other hand, third-quarter net sales in Asia/Pacific/Africa declined 17 percent to 62 million euros compared with 75 million euros during the same three-month period last year. In Europe, excluding Germany, net sales rose 1 percent to 230 million euros compared with 228 million euros last year. 

In Germany, the company reported net sales of 165 million euros, an 11 percent increase compared with 149 million euros in 2009’s third quarter.

The company confirmed its 2010 outlook but based on the quarterly performance, which company executives called “sluggish,” net sales and operating profit will again contract. “As announced, for the current fiscal year, we anticipate further reductions up to a maximum of 3 percent in net sales and of 13 percent in operating profit,” said Eckard Heidloff, president and CEO.

For the first nine of months of the company’s 2010 fiscal year, which began October 1 and ended June 30, Wincor Nixdorf recorded net sales of 1,682 billion euros, down 3 percent compared with 1,729 billion euros in 2009’s first nine months. The company’s banking division recorded 2010 nine-month net sales of 1,132 billion euros, down 5 percent compared with 1,195 billion euros last year. Nine-month net sales from the company’s banking division improved 3 percent to 550 million euros compared with 534 million in 2009’s first nine months. Earnings before interest, tax and amortization declined 12 percent to $121 million euros compared with 138 million euros during 2009’s first nine months. Profit for the nine-month period was 80 million euros, down 8 percent to 87 million euros for the same nine-month period last year.

By region, the Americas reported nine-month net sales of 228 million euros, up 56 percent expressed in euros. The performance compares with 146 million euros for the same nine-month period last year. Nine-month net sales in Asia/Pacific/Africa were 246 million euros, down 16 percent compared with 294 million euros in 2009. In Europe, excluding Germany, sales reached 669 million euros, down 13 percent compared with 805 million euros in 2009’s third quarter.  In Germany, net sales rose 5 percent to 509 million euros compared with 484 million euros in 2009’s first nine months.

The market has yet to see fundamental change in retail customers’ investment behavior by many retail banks and many retailers served by the company, Heidloff said.

“It is apparent that the propensity to invest within our customer base has not yet improved fully and continues to be influenced primarily by the financial resources available to individual companies,” said Heidloff, adding that this has led to regional and seasonal volatility in Wincor Nixdorf’s business.