Our product business enjoyed better-than-expected growth in the period under review. Net sales increased by 12% to €1,157 million (previous year: €1,032 million). The ratio of net sales from product business to total net sales remained constant year on year at 59% (previous year: 59%).

Product business was characterized by significantly stronger demand for premium-priced high-end systems and particularly buoyant demand for less complex systems, which bolstered economies of scale.

Against this background, the global development and production facilities were further enhanced during the fiscal year just ended. Lower production costs, consistently high product quality and short lead times made a significant contribution to reinforcing our product business. The plant in Shanghai was expanded. As regards products destined for the Asian market, our Singapore-based facility produced ATMs and kiosk systems for the first time in fiscal 2005/2006. This allowed us to slash delivery times. This “local-for-local” production concept has also been successfully implemented at our São Paulo production facility.

Germany (Paderborn, Arnstadt) is of central importance in our global production network as a technology supplier for mechatronic components as well as recycling and deposit systems. In addition, Paderborn provides logistics support for the European market.

For a global production network to operate effectively, all processes must be covered by standardized IT systems – from market rollout to product delivery and quality management. As a result, our uniform IT platform was expanded and improved for all of our production facilities during the year under review. Within this context, standardized Key Performance Indicators (KPIs) allow process control and corresponding improvements in efficiency.

We recorded double-digit percentage growth within the area of Solutions/Services, as we did already a year earlier. Net sales increased by 11% to €791 million (previous year: €712 million).

However, this growth is not reflected in the proportion of Solutions/Services business to total net sales. As in the previous year, Solutions/Services accounted for 41% of total net sales. This is due to the fact that growth levels in net sales were virtually identical within both our product and our Solutions/Services business. Therefore, the respective percentages calculated on the basis of total net sales remained unchanged year on year. Over the long term, we are looking to grow the Solutions/Services share of our business at an accelerated pace to around 50% of total net sales.

We have further reinforced our global network of local solutions competence centers, with the purpose of expanding our Solutions/Services business. This move will allow us to ensure that we can implement, update and integrate solutions worldwide within our customers' IT landscapes. Close collaboration on the ground also ensures that we are directly involved in the ongoing development of our customers' business processes and are thus able to offer them new solutions.

In both the Banking and Retail segments, openness, stronger internationalization and the expansion of our software solutions to include new functions were top priorities in the fiscal year under review.

The multichannel software architecture ProClassic/Enterprise, which guarantees banks investment protection and flexibility, has become more established. Indeed, in the period under review, it was installed in several networks operated by major banks. Thus, we were able to further consolidate our already strong position in middleware for retail banks. In addition, we have already received initial follow-on orders linked to these installations. Demand was also strong for the installation of software to operate multivendor ATM networks. We again received several orders from large international banks for these applications. We were also successful with our software for the remote monitoring of self-service systems (ProView). For the first time, banks based outside of Germany ordered this software to control processes for assisted self-service solutions.

We have moved closer to our claim of being a global provider of end-to-end solutions for retail branches by securing key orders from major international operators within this area. At the same time, our in-store solutions have been extended to include additional functions to operate new, automated checkout concepts as well as features for the centralized analysis of business data.

Our Services business was able to continue its above-average growth from the past year. The bulk of this stemmed from a formidable performance in Germany as well as strong growth in the rest of Europe and Asia.

In the period under review, Wincor Nixdorf took several measures to drive its internationalization still further. We strengthened our resources already existing within the Company in Western European countries, in particular, and expanded capacity in Eastern Europe via service partners.

In Asia/Pacific/Africa, which together with the U.S. is the region with the highest growth potential for Wincor Nixdorf's Services business, we also formed new service partnerships and reinforced our own service organization in China, Malaysia and Thailand.

In the Americas, we drove ahead with expanding our own service organization in the U.S. In Central and South America, work commenced on the establishment of a service network.

Product-related services generally constitute the bulk of Wincor Nixdorf's business, in particular services that are combined with the purchase of self-service or POS systems for a specified period of time (packaged services). Additionally, demand for services focusing on preventive maintenance of IT infrastructures, applications and databases by means of centralized remote monitoring and control (remote services) was particularly buoyant.

Multivendor services as well as transaction-based invoicing models also contributed to our success. The service fee for these invoicing solutions is based on how often the self-service systems are used. This allows the costs to be invoiced where they actually arise.

Increasingly, we are “industrializing” our service offering in order to offer infrastructure services, remote services, IT outsourcing and business process outsourcing services on a competitive basis. In other words, we standardize and automate the services we offer in order to generate economies of scale and consistently high quality.

One example of this is our “eServices Platform,” which Wincor Nixdorf deploys to offer its services in an increasing number of countries. Disruptions to the connected IT systems are reported automatically, and the subsequent service processes, interfaces, and procedures are managed on a consistent basis, benefiting customers and partners alike. This approach is particularly suited to large multinational corporations requiring uniform IT infrastructures and transparent processes. The "eServices Platform" enables services to be managed efficiently using agreed indicators (Key Performance Indicators).

Our Services business also benefited from the trend toward outsourcing subprocesses to service providers. Operating according to schedule, Wincor Nixdorf optimized major outsourcing projects already under way relating to branch IT structures at banks in the year under review. In addition, we began other projects at the start of the fiscal year (for example Wincor Nixdorf Portavis GmbH, Hamburg, Germany).

Demand for managed services has enjoyed excellent growth. These service packages are centered around operational concepts for entire branch IT infrastructures at banks and retail companies. This area covers the control, monitoring and software distribution for self-service systems (for example ATMs), POS systems, clients, server and applications.