Once again, Wincor Nixdorf can look back on a successful year, in which net sales rose to €2.145 billion and EBITA (Glossary) to €186 million. For the third year in succession, we have thus achieved double-figure growth in both net sales and operating profit, thereby demonstrating the success of our strategy and our ability to meet the expectations of our customers excellently.
As our shareholders, it is right that you should benefit from these accomplishments. Thus, the proposal submitted to the Annual General Meeting of Shareholders will be for a dividend payment of €2.73 per entitled share. This represents a 95 percent increase compared with the previous year.
In putting forward this proposal, we have again underlined our commitment to the overall dividend policy announced as part of our IPO in 2004. In line with this policy, we apply a figure equivalent to approximately half of the Group net profit before carve-out charges as the basis of our dividend calculation. 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 an extra dividend amount of €0.90 per share. For further details, please refer to the Stock section of this annual report.
Taken as a whole, this short review points to a period of continued success. It is a continuity, however, that is based on change in the form of improvements within the entire Group and our individual business activities. The growth of our core business is just one side of the coin, the other being that of assuring our future through innovation and the development of new markets.
At this point, I would like to draw your attention to some of the most outstanding successes of the last year:
We have strengthened our position as a leading innovator.
Thanks to our success in the high-end market of banking (Glossary) and
retail (Glossary) customers, we further strengthened our position as an innovative provider of solutions. These include intelligent hardware and
software solutions (Glossary) for process automation and new modular products that help to maximize the cost-efficient operation of IT systems. In the increasingly important field of software, we attracted new customers throughout the world and implemented a number of highly demanding projects.
To ensure our continued success in the role of innovator, we place great emphasis on the contribution made by research and development. For this reason, not only have we increased the number of staff involved in R&D, we have also boosted spending by a significant margin. Ten percent of our entire employees and 4.5 percent of net sales are now dedicated to research and development and the search for new products and solutions.
We have benefited from the globalization of our business.
Thanks to our innovative strength, we have been able to increase our share of the more established markets, in addition to making good progress in those markets considered to have particularly attractive prospects for growth. This applies not only to the fast-growing regions of Eastern Europe, Latin America and Asia, but also to the key U.S. market, where we laid the foundations for a much more rapid expansion of our business.
In order to prepare ourselves even better for the intense global competition ahead in the field of production, and to provide a suitable launch pad from which to respond more directly and immediately to market developments, especially in the Asian region, we have expanded our production capacity and our solutions integration resources in China and reinforced our development capacity in Singapore. We have also expanded our presence in other regions, such as Eastern Europe and the Middle East, and now have our own subsidiaries in Russia and Algeria.
We have made further improvements to our performance.
Our continuing success depends on our achieving profitable growth and making ongoing improvements to our cost structures. To this end, during the year under review, we redoubled our efforts to streamline costs, an approach we shall continue to pursue. As a result, we were again able to reduce our spending within the area of selling, general and administration. We also achieved a modest increase in our gross margin as a percentage of net sales.
Last but not least, we are making excellent progress as a solutions provider by taking responsibility for all change processes associated with our customers’ branch and self-service sales channels.
Technology is only one of the factors driving growth in our business. It is equally important to identify the needs of customers and to translate them into appropriate solutions. Together with our customers, we have developed business and partnership models that allow us to expand our service portfolio and give greater depth to our value chain. By way of example, this may involve the monitoring of SB networks or running entire IT systems on our customers’ behalf.
These and other steps forward are a result of the consistent implementation of our growth strategy, which we again refined during the year under review. This strategy is based on the expansion of our global presence, building on our strength in Europe, the consolidation and expansion of our market position as a leading innovator worldwide and growth in high-end services and related sectors.
Underlying all these accomplishments is our workforce, whose commitment is much appreciated. Especially given the high-tech nature of our business, it is their superb performance, talent for innovation and ability to gain the trust of our customers that make all the difference.
Looking ahead at the current fiscal year 2007/2008, we are confident that we can build on the success of previous years. Our aim is to exceed the targets of 6 percent in net sales and 8 percent in EBITA set as our annual growth guidance at Wincor Nixdorf’s initial public offering in 2004. We plan to increase net sales by 8 percent and EBITA by 10 percent in the current fiscal year 2007/2008, on the back of strong growth in markets outside Germany and the expansion of our banking operations.
Both now and in the future, our success also depends on the confidence our customers show in our ability to deliver what they need. I would like to express my gratitude for that vote of confidence and promise both our long-established and more recent customers that we will make every effort to remain worthy of it.
My appreciation also goes to you, our shareholders, for your trust and constructive support. Rest assured that we shall continue to dedicate ourselves wholeheartedly to the task of maintaining our current position and creating new opportunities.
Eckard Heidloff
