Wincor Nixdorf Q3 profit jumps

Net sales increased in the first nine months by 13% to 1,435 million euros (1,265 million euros). Operating profit before amortization of product know-how, EBITA, rose by 19% to 118 million euros (99 million euros). This resulted in an improvement of the profit-to-revenue ratio of 0.4 percentage points to 8.2% (7.8%).

"Our shareholders can take special pleasure in this sizeable leap in net profit for the period which is up 45% in the first three quarters alone", said CEO Karl-Heinz Stiller.

Net profit for the period within the first three quarters rose to 58 million euros (40 million euros). The continuously rising increase is not only the result of an improvement in operating income, it is also – and primarily – due to a refinancing carried out last year that brought lower interest charges with it. It also results from a lower strain from write-downs as a result of the carve-out from the Siemens group of companies. Earnings for the period before carve-out expenses increased in the first three quarters by 31% to 68 million euros (52 million euros).

The CEO said he was pleased that the company has succeeded in continuing its net sales and profit performance and, in so doing, reducing volatility from quarter to quarter.

Regarding performance for the remainder of the fiscal year, Stiller emphasized that, "Our current performance underpins the full-year forecast we raised back in April. We're expecting those figures to mark the lower end of what we are going to achieve, i.e. net sales up at least 10% and EBITA up at least 15%."

Significant improvement in profitability in Q3 as well

In its current fiscal Q3, Wincor Nixdorf once again grew EBITA faster than net sales.

Operating profit rose 19% to 43 million euros (36 million euros), and net sales increased 16% to 492 million euros (424 million euros).

In addition to the benefits provided by net sales growth and economies of scale in the product line-up, the effort invested in the company's profit improvement program is contributing to a significant increase in profitability. Part of this includes the concentration on profitable areas of business in the retail portfolio successfully carried out over the last few years. Greater demand for high-end "intelligent deposit" solutions is also having a positive impact. These include the deposit, authentication and posting of cash and checks at self-service systems in banks – a development based on cutting-edge image processing technology – or automated reverse vending machines in retail environments.

Good growth in Europe and Asia, strong business in Germany

In the region Europe (excluding Germany), which still contributes the largest share to overall business (52% compared with 54% in the previous year), net sales increased in the first nine months to 751 million euros (682 million euros) or by 10%. Net sales in the third quarter improved by 18% to 255 million euros (217 million euros).

Business in Germany continued to develop positively and made a major contribution to the group's overall growth. Net sales climbed by 16% to 392 million euros (previous year: 337 million euros) in the period under review, corresponding as in the previous year to a share of 27% of total business. Net sales in Germany rose 19% to 138 million euros (116 million euros) in the third quarter.

The increase in net sales in the region America of 11% to 112 million euros (101 million euros) is specifically attributable to very good growth in Latin America. The rise in terms of US dollars is 5% and the share of overall business remains 8%. Net sales in the third quarter were stable year-on-year at 42 million euros.

In the region Asia/Pacific/Africa, net sales in the first nine months rose by 24% to 180 million euros (145 million euros) – and by 17% in terms of US dollars. As a result, this region contributes a share of 13% (11%) to total net sales. In the third quarter, net sales were 57 million euros (49 million euros) or an increase of 16%.

Very good product business in both segments

Net sales in the banking segment rose in the first three quarters of the fiscal year by 19% to 874 million euros (previous year: 737 million euros), mainly on the back of sharp rates of increase in the product and service businesses. Net sales growth in the third quarter was 21%.

The retail segment posted net sales of 561 million euros (528 million euros), an increase of 6%. It profited greatly from good product business in Germany with reverse vending machines. Net sales rose by 8% in the third quarter.

Broken down by types of business in product business, consolidated net sales increased by 16% to 861 million euros (744 million euros) in the first nine months. Very good projects involving automated teller and reverse vending machines were the most important drivers. In addition, good product business creates the foundations for continuous service business in subsequent years.

Net sales from service-oriented solutions and service business increased in the period under review by 10% to 574 million (521 million euros).

In order to strengthen its local service capacities, Wincor Nixdorf has taken over the cash-in-transit business of Heros Netherlands from the administrators of the insolvent Heros group.

The number of employees at the group grew by 631 to 7,568 (6,937 at September 30, 2005). In order to safeguard employees' company pension entitlements of around 3,000 employees and retirees, Wincor Nixdorf has incorporated the pension obligations in a Contractual Trust Arrangement (CTA). This CTA, in which assets are allocated to the pension commitments toward employees, has a volume of 100 million euros.