Letter to Shareholders.

Eckard Heidloff, President and Chief Executive Officer (photo)
Ladies and Gentlemen (handwriting)

The financial year just ended proved to be an immensely successful one for Wincor Nixdorf AG. We can draw satisfaction from the fact that our Delta restructuring and transformation program, which is of particular importance to us, was implemented faster than anticipated. This allowed us to focus our efforts much sooner on business activities within a newly created operational setting, thereby paving the way for one of the best fiscal years in the history of Wincor Nixdorf.

More importantly, however – and this is of tremendous significance to the future of our business –, we teamed up with Diebold to shape a new era for our two organizations under the joint name of Diebold Nixdorf. In combining our businesses, we are much better placed to seize and exploit market opportunities as they arise. The key focus of our product and service portfolios will be on leveraging potential benefits for our customers in connection with the ongoing digitalization and transformation of business operations. Together, we are even more effective at covering the entire value chain from initial consultation and planning through to professional execution and IT management.

As a single entity, we are also able to offer perfect market coverage in geographical terms. Alongside the benefits of synchronized R&D efforts and sales portfolios within the area of Hardware, the combined group will be in a position to provide more extensive resources for Software and Services. This will make us even more effective in our efforts to support customers as they make the transition toward the digital age of connected commerce. Retail business within the US market will also provide opportunities for growth.

In summary, the decisions made during the fiscal year just ended have made us stronger and have helped us to expand our potential. That is excellent news!

Allow me to look back on fiscal 2015/2016. Having entered the year on the back of a cautious outlook, it became apparent as early as the first quarter that our operating profit would be stronger than our initial guidance had suggested – both before and after non-recurring items. This was attributable primarily to the effective implementation of our restructuring and transformation program, lower-than-expected program costs, and positive one-off effects associated with M&A projects.

Net sales also developed much better than anticipated. After a sluggish prior-year performance, our Retail segment achieved record growth not only in the area of Hardware but also from business relating to Software and Services. This prompted us to revise upward our guidance for net sales: initially after the first half of the fiscal year and then again on completion of the third quarter.

Net sales grew by 6% in fiscal 2015/2016 to reach €2,579 million in total, the highest level ever seen in the history of our Company. Operating profit before non-recurring items rose from €102 million a year ago to €194 million in the period under review. Operating profit after non-recurring items (before transaction costs) increased from €22 million to €198 million.

In view of the significant improvement in performance, we as the Board of Directors, together with the Supervisory Board, are in a position to put forward a proposal to the General Meeting of Shareholders for the payment of a dividend of €1.71 per share for the fiscal year 2015/2016.

We will continue to reap the rewards of the Delta program in the new fiscal year. As a result, net sales for the annual period as a whole are expected to be slightly higher than in the fiscal year just ended. Our operating profit (EBITA) before non-recurring items is likely to be on a par with the figure recorded in fiscal 2015/2016. One-time charges relating to the business combination with Diebold are expected to total approx. €20 million.

In addition to getting back on a winning track, our aim for the fiscal year under review was to drive forward the business combination with Diebold in line with the agreement concluded for this purpose.

In February 2016, Diebold presented a voluntary public takeover offer to the shareholders of Wincor Nixdorf AG. This decision had already been announced by Diebold in November 2015. By April 2016 this offer had been accepted by shareholders representing more than 69% of the Company's share capital. Taking into account the treasury shares held by Wincor Nixdorf, Diebold had thus secured 76.7% of the voting rights in respect of Wincor Nixdorf AG.

Following the approval by various antitrust authorities, we were able to announce the business combination in mid-August 2016. At the end of September 2016 an Extraordinary General Meeting of Wincor Nixdorf AG shareholders approved the conclusion of a control (also referred to as "domination") and profit transfer agreement and a change of name to Diebold Nixdorf.

Even under favorable conditions, it goes without saying that a business combination of these proportions represents a tremendous challenge for all those involved. It is with this in mind that we will again be relying on the thorough commitment and top-class performance of our employees as we move forward.

At this juncture, I would like to express my gratitude – also on behalf of my fellow Board members – to the entire workforce. The tremendous performance of the last months would not have been possible without your exceptional effort and dedication.

I would also like to take this opportunity to thank our customers: for the close rapport established over the years and for the trust placed in Diebold Nixdorf as we venture into a new era. We look forward to maintaining our strong and successful business relationship.

Last but not least, I would like to thank you, our shareholders, for accompanying us on our journey.

Sincerely yours,

Signature Eckard Heidloff (handwriting)

Eckard Heidloff