Wincor Nixdorf achieves double-digit growth
in net sales and EBITA for third time in succession
Wincor Nixdorf AG closed fiscal 2006/2007 (October 1 to September 30) with a 16% increase in earnings before interest, taxes and amortization (EBITA) and a 10% rise in net sales. In doing so, the Group was able to achieve double-digit growth for the third time in succession. "We have further extended our market position as a supplier to the banking and retail sectors by drawing on our abilities as an innovator and by capturing new markets, as a result of which we are well equipped for the future," emphasized Eckard Heidloff, President & CEO of Wincor Nixdorf AG at the company's financial press conference in Düsseldorf on December 11, 2007. These trends have been confirmed by recent business performance in the new fiscal year that commenced on October 1. "We are confident that business will continue to progress on a solid basis. Wincor Nixdorf remains well on track," reiterated Heidloff.
As one of the world's leading suppliers of IT solutions tailored to the branch operations of banks and retailers, the company extended EBITA to €186 million (€161 million) and consolidated net sales to €2,145 million (€1,948 million) in the fiscal year just ended. Adjusted for exchange rate movements between the euro and U.S. dollar, growth in net sales amounted to 12%. Growth in net profit for the period was even more pronounced at 33%, taking this figure to €109 million. Cash net income, i.e. net profit adjusted for the effects of amortization of product know-how, expanded by 26% to €118 million (€94 million), while net cash from operating activities rose to €180 million (€155 million).
Against the background of a successful business performance, the Supervisory Board and Board of Directors will be proposing to the Annual General Meeting of Shareholders on January 28, 2008, a dividend of €2.73 per entitled no-par-value share. This represents a 95 percent increase compared with the previous year. The proposal is in line with Wincor Nixdorf's dividend policy announced as part of the company's IPO in 2004. According to this policy, dividend calculations are based on a figure equivalent to approximately half of the consolidated net profit before carve-out charges (cash net income). This corresponds to a proposed dividend of around €1.83 per share for the fiscal year under review. Beyond this, the above-mentioned dividend proposal of €2.73 includes a special dividend of €0.90 per share.
Expansion of international business with banks and retail customers
Yet again, business within the international arena proved to be the principal revenue driver for Wincor Nixdorf over the course of the fiscal year. In particular, the Group continued to strengthen its position in Europe, which forms Wincor Nixdorf's home market. In addition, revenue was further buoyed by the expansion of international business in growth regions.
The volume of net sales generated in Germany edged up by 1%. After a considerable boost to sales in fiscal 2005/2006, driven in particular by investments in reverse vending systems within the retail segment, business returned to more normal levels in the fiscal year just ended. Net sales amounted to €572 million (€569 million). As a result, business generated in Germany accounted for 27% (29%) of total net sales.
Europe (excluding Germany) saw a significant rise in net sales, up by 14% to €1,129 million (€992 million). At 52%, Europe (excluding Germany) thus accounts for the largest proportion of net sales within the Group as a whole.
The most pronounced growth rates were achieved in Asia/Pacific/Africa, where net sales calculated in U.S. dollars rose by 30% year on year. Translated into euros, this corresponds to a 19% increase in net sales, taking the figure to €277 million (€232 million). As a result, this region generated 13% of net sales within the Group as a whole (12%).
The Americas produced a 17% gain in net sales in the period under review, calculated on a U.S. dollar basis. Expressed in euros, this represents year-on-year growth of 8% to €167 million (€155 million). As in the previous fiscal year, the Americas thus accounted for 8% of total net sales within the Group.
"Our portfolio of services has given us direct access to global economic growth, while also opening up new opportunities in rapidly emerging countries," said Heidloff. Within this context, he also pointed to the new Wincor Nixdorf subsidiaries established in Algeria, Thailand, Russia and India.
Banking segment remains buoyant, business with retail customers unchanged year on year
The banking segment maintained its forward momentum over the course of fiscal 2006/2007, with net sales rising significantly by 15% to €1,358 million (€1,178 million). Within this context, growth was driven both by product and by software/services business. This performance was attributable mainly to the successful expansion of Wincor Nixdorf's service portfolio centered around process optimization within the branch infrastructure of retail banks.
Business within the retail segment showed slight signs of growth in the fiscal year just ended. Overall, net sales increased by 2% to €787 million (€770 million). The retail segment thus matched its sales performance of the preceding year, which had been dominated by significant demand for reverse vending systems in Germany. Sales within the area of reverse vending systems returned to a more normal level in fiscal 2006/2007.
Solid growth rates in product as well as software/services business
Net sales generated within the area of hardware rose by 8% to €1,254 million (€1,157 million). In parallel, net sales from software/services were propelled upwards by 13% to €891 million (€791 million). Supported by solid growth, the trend of recent years continued within this area, with the share of software/services in total net sales rising to 42% (41%). Wincor Nixdorf remains committed to its long-term goal of generating half its consolidated net sales through software/services.
"We are continuously expanding our portfolio by incorporating new high-end services, thereby broadening our structural base for value creation. Within this area, we have been focusing increasingly on the integration of large-scale software projects on the customer side as well as new forms of efficient operational management for branch IT systems," said Heidloff.
Increase in R&D investments
In fiscal 2006/2007, Wincor Nixdorf invested €97 million (prev. year: €87 million) in research and development, which represents a year-on-year increase of 11%. In pursuing this approach, the company has committed itself to securing its technological edge for the future. Calculated on the basis of net sales, the R&D ratio remained unchanged year on year at 4.5%. At present, 843 staff members, i.e. 10% of the workforce, are assigned to R&D duties (prev. year: 790).
Headcount expanded in growth markets
The number of staff employed by Wincor Nixdorf worldwide again rose significantly in the fiscal year just ended, up by 592 to 8,379 (prev. year: 7,787). Wincor Nixdorf recruited 467 new employees outside of Germany, propelling the non-domestic headcount to 4,569. "This approach is in line with our strategy of more pronounced international expansion," said Heidloff. The number of personnel employed in Germany rose by 125 to 3,810.
The majority of newly appointed employees have been assigned to in-house services units and the Group's international production network. Part of the recruitment drive was also directed at the sales teams in growth markets as well as R&D.
Building on a successful track record
Looking to the current fiscal year, President & CEO Eckard Heidloff reaffirmed the confident stance taken by Wincor Nixdorf. "Provided that the general business climate doesn't deteriorate markedly, we are setting our sights on growth of 8 percent in net sales and 10 percent in EBITA." He added that growth trends seen during the fiscal year just ended would continue. The principal factors cited within this context were strong international growth and particularly solid business within the banking segment.