Wincor Nixdorf is to slash twelve percent of its workforce and spin-off its cashless payments business as the company tackles deteriorating business conditions in key emerging markets such as Russia and China and a sluggish recovery in investment spending throughout Europe.
The restructuring was announced as the company reported a 31% decline in operating profits for the first half of the year from EUR68 million to EUR47 million. The year-on-year contraction is attributable primarily to a 12% decline in net sales from the company’s hardware business.
In an effort to realign its business around the software and services segment and reverse the slide in its fortunes, the company says it will reduce its current headcount by around 1,100 over the next three years. The restructuring will take a large chunk out of the bottom line, with the company expecting to report Ebidta of just EUR20 million for the current fiscal year as charges reach EUR80 million.
The firm says that the trend towards digitisation embraced by both banks and retailers has added to the momentum of change, with software and high-end service playing a prominent role.
"We are looking to exploit the market potential of software and IT services to an even greater extent, as well as making our hardware business more cost-effective," says CEO & president Eckard Heidloff.
He says the the relatively successful Cashless Payment business unit, which is expected to increase its net sales to €50 million in fiscal 2014/2015, will be carved out to become an independent operation.
"The intention is to position the fledgling company in the form of a start-up with all the associated freedom of manoeuvre," says the firm in a statement. "This may serve, for example, as a platform for partnerships or collaborative activities in the payment market or to facilitate investment opportunities."
With profit from the banking business segment down by 43%, the company is waving goodbye to current global banking head Jens Bohlen and transferring responsibilities to Christian Weißer, who has been appointed as senior vice president. In his most recent position, he headed the company’s banking business in Europe.