Wincor Nixdorf posts solid Q1

Source: Wincor Nixdorf

Wincor Nixdorf AG completed the first quarter of the current fiscal year with 7 percent growth in net sales and an 8 percent increase in operating profit (EBITA).

Net sales generated by the company specializing in IT solutions for retail banks and retailers rose to €646 million in the first three months of the fiscal year (€602 million). Adjusted for the effects of exchange rates, net sales growth amounted to 5 percent. EBITA climbed to €56 million (€52 million). The EBITA margin improved by 0.1 percentage points to 8.7 percent (8.6 percent), while profit for the period rose by 9 percent to €35 million (€32 million). However, commenting on projected business development over the course of the fiscal year, President & CEO Eckard Heidloff emphasized that these figures should not be extrapolated to the year as a whole. "The impact of the economic crisis will also be felt by Wincor Nixdorf."

Heidloff left open as to what extent the global economic crisis might have on the company: "That is impossible to gauge at this moment in time." However, he emphasized that Wincor Nixdorf remained committed to following up the very good previous year's performance and maintain approximately the same level of business,

The President & CEO added that this outlook should be seen against the backdrop of opportunities and risks governing future performance. "The opportunities presented to us come in the form of favorable sector-specific trends that continue to apply within the area of retail banking and retailing as well as in the form of large-scale project tenders. The risks currently emanate from an economic crisis that is difficult to assess and whose direction is impossible to predict."

Heidloff said that he could not rule out the possibility of business development becoming less dynamic in the short term, if both the banking and the retail industries were to scale back capital expenditure in response to a serious deterioration in the state of the economy as a whole. He added that the company had taken appropriate action to address this eventuality by initiating measures aimed aat bringing greater flexibility to its cost structures. At the same time, he expressed his cautious optimism for the medium-term future. "The overriding industry trends such as intense competition and pressure to streamline operations remain unchanged both in retail banking and in the retail sector, as does the move towards internationalized activities and standardized IT infrastructures - developments to which we have already responded by establishing a strong position in the relevant areas."

First quarter governed by polarity of opportunities and economic risks
Given the challenging economic climate, Wincor Nixdorf's performance in the first quarter was considered presentable by Eckard Heidloff. It showed that Wincor Nixdorf had positioned itself incisively and had taken a solid step forward in terms of meeting its forecast for the current fiscal year. "The coming months will reveal to what extent we can actually achieve our stipulated goals."

As in the past, growth at Group level was driven mainly by the extremely solid performance of its Banking segment, which expanded by 12%. Within this area, net sales rose to €456 million (€406 million). Business in the field of retailing generated net sales of €190 million in the first three months (€196 million), which was down a slender 3% on the same period a year ago.

Nonuniform regional performance
In Germany, net sales grew by 12% to €155 million in the first quarter (€138 million). Calculated on this basis, business in Germany contributed 24 percent (23%) to total net sales.

As in the first three months of the previous year, net sales in Europe (excluding Germany) amounted to €333 million. Thus, at 52% (55%) Europe again contributed the largest share to total net sales for the Group.

Additionally, buoyant business in Asia/Pacific/Africa produced significant momentum, with net sales for this region growing by 23% to €100 million. Calculated on the basis of U.S. dollars, net sales improved by 11%. Thus, Asia/Pacific/Africa accounted for 15% (14%) of Group revenue.

Business in the Americas also expanded, with net sales up 16% to €58 million. As a result, the proportion of net sales attributable to business in the Americas was 9% (8%). Expressed in U.S. dollars, growth for this region stood at 5%.

Calculated on the basis of business streams, net sales associated with the Group's product business rose by 4 percent in the first quarter, up to €373 million (€358 million). Software/Services generated growth of 12%, taking net sales to €273 million (€244 million). Thus, the share of total net sales from product-related business was 58% (59%), while software/services accounted for 42% (41%).

In-house trade show again attracts strong interest - Focus on solutions aimed at cost optimization
The international trade show Wincor World, which takes place in Paderborn from January 20 to 22, 2009, is to be seen as an integral element in support of the company's efforts to drive growth. The in-house exhibition showcases a range of IT solutions and services designed to improve the internal processes of banks and retailers. Alongside the issue of customer focus, the emphasis of this year's event will be on cost optimization, a theme that has already attracted considerable interest in the run-up to the trade fair. As in the previous year, the upcoming Wincor World exhibition is expected to draw over 7,000 visitors from more than 80 countries.

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