News

Wincor profits dip in Q3 as restructuring gets underway

Hardware sales fell while software and services sales rose; in restructuring, the company aims to further exploit opportunities presented by the digital trend in banking and retailing.

July 23, 2015

Wincor Nixdorf AG completed the first nine months of its fiscal year 2014/2015 with a slight dip in net sales, as anticipated, and a significant decline in operating profit as a result of a restructuring program, a company news release said.

Net sales generated by the company fell 2 percent to 1.77 billion euros/$1.94 billion (previous year: 1.8 billion euros/$1.98 billion). EBITA after restructuring expenses amounted to 40 million euros/$44 million (92 million euros/$101 million), down 57 percent from the previous fiscal year.

Profit for the period stood at 25 million euros/$27 million (61 million euros/$67 million), a decline of 59 percent. Excluding restructuring expenses, EBITA fell by 18 percent compared to the first nine months of the previous year, taking the total to 75 million euros/$82 million (92 million euros/$101 million).

For the current fiscal year, Wincor Nixdorf anticipates net sales 3–5 percent lower year over year. EBITA without restructuring expenses is expected to reach 100 million euros/$110 million, less restructuring expenses totaling 80 million euros/$88 million, for EBITA of 20 million euros/$22 million for the fiscal year.

Restructuring 'off to a solid start'

"On the whole, the restructuring program initiated by Wincor Nixdorf has gotten off to a solid start," said CEO and president Eckard Heidloff. "It is being implemented with emphasis, is already producing the first tangible results and can ensure Wincor Nixdorf to autonomously follow a future-proof strategy."

Heidloff also addressed recent media reports of a possible merger between Wincor Nixdorf and another industry player. "The issue of industry consolidation has been a matter of debate for many years," he said. "I do not wish to inflame the discussion by adding statements on it from our point of view."

The Wincor Nixdorf restructuring program has two key objectives, the company said: firstly, to exploit business opportunities for software and IT services presented by the ongoing trend towards digitalization in retail banking and retailing; and secondly, to structure the hardware business in a more cost-effective manner.

Sales rise in banking, fall in retail

Net sales for the banking segment increased 1 percent in the first nine months of fiscal 2014/2015 to 1.15 billion euros/$ million (1.14 billion euros/$1.25 billion). Third-quarter revenue was up 2 percent.

Net sales for the retail segment fell by 7 percent in the period to 619 million euros/$679 million (previous year: 666 million euros/$731 million).

Regional results

In Germany, net sales for the period fell 6 percent year over year to 404 million euros/$443 million (432 million euros/$474 million). Germany contributed 23 percent (24 percent) to total net sales at Group level.

Net sales generated in Europe (excluding Germany) were down 3 percent at 817 million euros/$896 million (843 million euros/$925 million). This region contributed the largest part of total net sales for the group at 46 percent (47 percent).

In Asia/Pacific/Africa, net sales rose 9 percent to 346 million euros/$380 million in the period (317 million euros/$348 million), increasing the share of total net sales for the region 20 percent (17 percent).

In local currencies, the Americas recorded a 15 percent decline in net sales. Translated into euros, this corresponded to a downturn of 5 percent to 201 million euros/$221 million (211 million euros/$231 million). As a result, the proportion of net sales generated in the Americas was 11 percent (12 percent).

Hardware down, software and services up

In the first nine months of the fiscal year, net sales attributable to the hardware business fell 12 percent to 726 million euros/$796 million (822 million euros/$902 million). In the software and services business, net sales were up 6 percent at 1.04 billion euros/$1.14 billion (981 million euros/$1.08 billion). The share of total net sales generated by the hardware business fell to 41 percent (46 percent), while the proportion of total net sales from software and services rose to 59 percent (54 percent).