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Wincor Nixdorf puts emphasis on expansion

Wincor Nixdorf CEO Karl-Heinz Stiller told attendees of the Wincor World show that the German manufacturer is becoming an increasingly global presence, with several major deals in new markets, including North America.

February 12, 2002

PADERBORN, Germany - Because the ATM world puts so much emphasis on operating systems and applications, it's easy to forget that people play a crucial role in the business.

Karl-Heinz Stiller, chief executive officer of German ATM manufacturer Wincor Nixdorf, put the emphasis squarely back on people - both employees and customers - in two addresses he gave at Wincor World, an annual trade event here.

While other technology companies, including competing ATM manufacturers, cut their workforces in 2001, Stiller said that Wincor Nixdorf added 700 employees, boosting its staff from 3,700 to 4,400. More than 2,900 are based in Germany, and about 1,500 work elsewhere.

Wincor Nixdorf CEO Karl-Heinz Stiller

Stiller said the company expects to hire an additional 350 people in 2002, including 100 based in Paderborn.

The increases signal Wincor's intent to focus on the service side of its business. While service made up 25 percent of Wincor's business (or $275 million euros) in 2001, Stiller said the company wants to increase that number to 34 percent by 2007.

"You can automate services and products to some degree, but you need people to make them work," Stiller said. "I'm totally convinced that we need an organization that is 100 percent customer focused, not one looking at internal stuff all the time."

In a speech given to Wincor customers, Stiller urged the show's 13,000 attendees to look into the eyes of Wincor staff, where they would see a "glimmer," he said. "They want to offer you success. That's their job, and they enjoy it."

Employees own 12 percent of Wincor's stock, Stiller said, and 50 percent of their compensation is "variable" and based upon the company's performance.

Stiller told both the company's customers and the press that its employees will help Wincor achieve its goal of becoming number one in its two market segments: banking and retail. In both markets, Wincor is currently number one in Germany, number two in Europe and number three worldwide.

Wincor made some significant gains in 2001, Stiller said. Despite a poor economy, revenue rose 9 percent to 1.5 billion euros and EBITA (earnings before interest, taxes and amortizations) rose 12 percent to 86 million euros. (The company's fiscal year ended Sept. 30, 2001.)

The biggest boost came from the Banking Division (including ATMs), with sales rising from 677 million euros to 812 million euros. Stiller said the company shipped 25,000 ATMs in 2001, an increase of 8,000 units.

He believes 2002 will be even better. In Wincor's first quarter (ended Dec. 31), Stiller said that revenue is up 6 percent and EBITA is up 20 percent.

In fact, he believes that Wincor may overtake archrival NCR as Europe's number one manufacturer, in terms of new units shipped, when 2001 sales figures are released this spring.

Already, Wincor has announced several big contracts.

In a deal worth $30 million U.S, Wincor will supply 1,500 ProCash 1500 ATMs and related service and maintenance to 7-Eleven Taiwan. Stiller is especially proud of this deal because it came at the expense of NCR, which supplies the ATMs for a similar 7-Eleven program in Japan.

"Wherever NCR is dominant in the market, we're looking to take the wind out of their sales," Stiller said. "Everybody fought for this deal, but we got it. Two or three years ago, we wouldn't have won such a project because we didn't have the ability to manage it."

Wincor also will supply 1,000 ProCash Compact ATMs to E*TRADE Access to be deployed in Target stores. The E*TRADE deal is Wincor's biggest ever in the U.S., nearly doubling its current installed base there, and marks the company's first collaboration with new North American sales and service partner IBM Global Services.

Stiller is excited by the IBM partnership. "Two years ago, if somebody told me we'd have a partner called IBM to help us sell bank products, I would have said 'that's a wonderful vision but it will never become reality.' And now here we are."
 
Wincor and IBM soon will announce a U.S. deal even bigger than E*TRADE, to supply 1,500 ATMs to a major gas station chain. "Right now we're nobody in that market (North America), but we expect the IBM channels will allow us to sell 6,000 ATMs a year there," Stiller said.

North America is a key part of Wincor's strategy to become an increasingly international presence. Noting that Germany accounted for 46 percent of Wincor's revenues in 2001, down from 51 percent in 2000, Stiller said, "We're starting to gain a stronger foothold around the world."

Wincor is active in 80 countries, Stiller said, in 30 with its own legal entities and in another 50 with partners. Indeed, attendees at Wincor World came from 40 countries and every continent, according to show organizers.

Partners are a particularly important part of Wincor's strategy, Stiller said. "Knowhow is available everywhere, but the local touch is not. I don't think we'd be able to do business in China from Paderborn."