Once again, Wincor Nixdorf can look back on a successful year, having set new records in fiscal 2007/2008: net sales rose by 8 percent to €2.319 billion and EBITA (Glossary) by 11 percent to €206 million.
As shareholders, you too will benefit from this solid performance in the form of a substantial dividend – which we again wish to increase. We intend to propose a dividend of €2.13 per share to the Annual General Meeting. This is equivalent to a rise of 13 percent on the regular dividend of €1.88 paid out for 2007/2008, in addition to which we distributed a special dividend of €0.90 a year ago. The latest proposal remains in line with our established policy to distribute around half of our profit for the period before profit charges arising from the carve-out (Glossary) in the form of a dividend.
We are proud of the success achieved in fiscal 2007/2008. Despite the deepening financial market crisis, whose scope no one could have predicted at the beginning of the fiscal year, we have continued to expand even against a background of an extremely weak U.S. dollar. This currency weakness had a significant impact on the development of our net sales; without it, our net sales would have grown by as much as 11 percent.
During fiscal 2007/2008, we also took steps to ensure the continued success of our business in the future, drawing on our existing growth strategy with its four areas of focus:
Global expansion: We again pushed ahead with the internationalization of our business, especially in high-growth regions. This expansion reduces our dependence on individual customers and national economies. Since 2007, Wincor Nixdorf has been the world’s second-largest ATM supplier (annual shipments). This also contributes to the further expansion of our business with retail banks.
Innovation: Thanks to our focus on innovation, we were able to add to our portfolio process optimization solutions (Glossary) for our customers. These additions included improved automatic checkout systems (Glossary) for the retail industry, which offer considerable advantages such as cost efficiency and customer-friendly operation. In parallel, we further strengthened our portfolio of standardized applications software for retail banks and retailers.
Premium end-to-end services (Glossary) : During the year under review, we pushed ahead with the expansion of our Software Integration, Managed Services (Glossary) and Outsourcing (Glossary) business. These areas are of particular interest to us because, like product-related services (Glossary) , they generally involve multi-year contracts and, therefore, generate stable income. In addition, we added specialist banking consultancy services to our portfolio through the acquisition of a majority share in a well-known banking consultancy firm.
New business opportunities in related industries: Postal operators and service station chains also have branches with self-service systems (Glossary) similar to those of retail banks and the retail industry. We have achieved sustained success in our drive to exploit the opportunities for new business in these industries.
As for the future business prospects of Wincor Nixdorf, current trends in retail banking and the retail industry continue to suggest a positive medium-term outlook. Indeed, within the banking industry as a whole, retail banking has proven in recent months to be the least susceptible sector to outside events. We strongly believe that this development will help underpin the comeback of retail banking – a development that Wincor Nixdorf wishes to support with all the means at its disposal. In the retail industry, too, we anticipate continued investment in expansion and streamlining, and expect to benefit from both, given the highly competitive nature of the business.
For all these reasons, we are able to look ahead with confidence and expect to maintain our long-term average annual growth targets of 6 percent for net sales and 8 percent for EBITA, even if there is a temporary downturn in business as a result of the global crisis affecting the financial markets.
Although the overall economic situation is impacting the retail banking and the retail trade industries, we see continued opportunities in the current 2008/2009 fiscal year. Based on current knowledge, we are confident that we will be able to build on the success of the previous year and maintain approximately the same high level of performance.
Despite our generally positive outlook, however, we are still unable to say whether and when the financial market crisis can be contained or what concrete economic impact it will have on the industrialized and emerging countries. Depending on the intensity of the impact on the real economy, we cannot exclude the possibility of a downturn in the investment budgets of retail banks and retailers. Wincor Nixdorf is therefore preparing itself, especially in the areas of Production, Sales and Service, to respond quickly to possible challenges, primarily by implementing more flexible cost structures to protect margins.
The present economic situation represents an enormous challenge for our entire industry. However, our customers can be certain that Wincor Nixdorf will continue to make every effort to stay ahead through innovation and efficiency, and I would like to thank our customers for the confidence they have shown in our Company. I also wish to express my gratitude to all employees of Wincor Nixdorf throughout the world. It is your commitment that has earned us this confidence and helped to achieve such encouraging results.
Finally, let me thank you, our shareholders, for your loyalty and constructive support. We are fully aware that Wincor Nixdorf is your Company and are determined to put all our efforts into the task of steering it in a positive and successful direction.
Eckard Heidloff
