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Wincor Nixdorf says financial outlook good, but global economic crisis could take a toll in '09
On the eve of its annnual trade fair, the world's second-largest ATM manufacturer braces itself for an uncertain year.
January 18, 2009
PADERBORN, Germany — On the eve of Wincor Nixdorf AG's annual trade fair, Wincor World, the company released financial results for the first quarter of fiscal year 2008/2009.
During the first quarter, Wincor Nixdorf's net sales increased 7 percent from the previous year, with net sales for IT solutions sold to retail banks and retailers increasing €644 million in the first three months. Profit for 1Q is up 9 percent, going from €32 million to €35 million.
But going forward into 2009, president and chief executive Eckard Heidloff says those totals should not be extrapolated to the year as a whole, as "the impact of the economic crisis will also be felt by Wincor Nixdorf."
Wincor World '09 to focus on cash, cost optimization Wincor World, which runs from Jan. 20 until Jan. 22, will highlight a range of IT solutions and services designed to improve internal processes for banks and retailers. Alongside the issue of customer focus, the emphasis of this year's event will be on cost optimization — a theme that has already attracted considerable interest. Despite the economy, Wincor Nixdorf says it expects the Wincor World exhibition to draw more than 7,000 visitorsfrom more than 80 countries. |
In a release issued by the company regarding corporate revenue and earnings, Heidloff says Wincor Nixdorf remains unsure about how or when the global economic crisis will affect the company.
"That is impossible to gauge at this moment in time," Heidloff stated. "The opportunities presented to us come in the form of favorable sector-specific trends that continue to apply within the area of retail banking and retailing, as well as in the form of large-scale project tenders. The risks currently emanate from an economic crisis that is difficult to assess and whose direction is impossible to predict."
Heidloff said that he could not rule out the possibility of business development becoming less dynamic in the short term, if the banking and the retail industries scale back capital expenditures. He added that the company had taken appropriate action to address this eventuality by initiating measures aimed at bringing greater flexibility to corporate cost structures. At the same time, Heidloff expressed cautious optimism for the medium-term future.
"The overriding industry trends, such as intense competition and pressure to streamline operations, remain unchanged both in retail banking and in the retail sector, as does the move toward internationalized activities and standardized IT infrastructures —developments to which we have already responded by establishing a strong position in the relevant areas," Heidloff said.
1Q overshadowed by polarity of opportunities and economic risks
Given the challenging economic climate, Wincor Nixdorf's performance in the first quarter was not exceptional, but performance was in line with the company's forecast for the year.
That said, "the coming months will reveal to what extent we can actually achieve our stipulated goals," Heidloff stated.
Growth during the quarter, as has historically been the case, was driven by solid performance in the banking segment, where sales were up 12 percent. In the banking segment, net sales increased €50 million, while business in the retail segment was up €6 million in the first three months — down 3 percent from a year ago, when the first three months of FY 2007/2008 showed stronger sales.
In Germany, net sales grew 12 percent during 1Q, and business in Germany accounted for 24 percent of total net sales.
Net sales in the rest of Europe (excluding Germany) amounted to €333 million, or 52 percent of the company's net sales, the largest share. That total, however, was down slightly from last year, when net sales in Europe accounted for 55 percent of the company's net sales.
Business in Asia-Pacific and Africa continued to show momentum, with net sales for those combined regions growing 23 percent, to €100 million, accounting for 15 percent of the company's revenue.
Business in the Americas also expanded, with net sales up 16 percent, hitting €58 million, and accounting for 9 percent of the company's net sales.
Net sales from Wincor Nixdorf's product business rose 4 percent in 1Q, totaling €373 million, an improvement from the €358 million reported for the same period last FY. Software and services generated growth of 12 percent, taking net sales to €273 million, up from €244 million last year.
Net sales from Wincor Nixdorf's product-related business accounted for 58 percent of the company's net sales, while software/services accounted for 42 percent.
Company ProfilesMiddle East & AfricaAsia, Australia & PacificIndustry OrganizationsRetail / Off-PremisesManufacturersNorth AmericaPublic CompaniesBank / Credit UnionBranch TransformationSoftwareWincor Nixdorf International
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