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Wincor Nixdorf revises forecasts as sales dip

28 July 2014  |  1132 views  |  0 Source: Wincor Nixdorf

In response to unfavorable developments in key emerging markets, Wincor Nixdorf AG has revised its forecast issued for fiscal 2013/2014 as a whole.

The Company now expects net sales to reach a level comparable to that recorded in the previous year instead of rising by the 4% it had originally projected. The forecast for operating profit, by contrast, remains unchanged, with EBITA expected to increase by 17% to €155 million. However, this projected figure now includes the proceeds from the forthcoming sale of the Company’s former production facility in Singapore. The Company decided in favor of selling the building, and it is highly probable that the process of disposal will be completed by the end of September 2014. Following the discontinuation of production activities by Wincor Nixdorf at the Singapore site, the Company had been faced with the option of selling the facility or utilizing it for other purposes.  

As regards the original annual forecast for fiscal 2013/2014, high expectations had been placed in particular on growth within the emerging markets. In the meantime, however, business performance in this region has been affected by a sustained deceleration of economic momentum. Additionally, business has become more difficult in some key emerging markets by the depreciation of local currencies. However, CEO & President Eckard Heidloff views the challenging climate associated with these developments as being of a temporary nature. "Our strategy with a focus on growth in the emerging countries is and remains the right choice. After all, as the local population continues to expand and the level of prosperity grows, so too will demand for banking and retail services. We want to and, indeed, have to be in on the action."

As anticipated at the beginning of the current fiscal year, business in the industrialized markets of Europe is progressing at a subdued rate. There is still no prospect of a sustained improvement in the investment climate for retail banks and retailers in this region, which remains Wincor Nixdorf’s largest market. "In orde order rder to cushion the effects of slower growth, we will continue to restructure our company," said Heidloff. He sees particular potential in supporting customers with their efforts to evolve their businesses in response to the progressive digitalization of sales channels. "In combination with innovative hardware, software is increasingly establishing itself as a core element underpinning this change."

Performance After Nine Months
After the third quarter, prevailing market trends were reflected in a year-on-year decline in net sales by 2% and an EBITA performance that was comparable to that seen in the same period a year ago. Net sales fell to €1,803 million (previous year: €1,841 million). Operating profit (EBITA) remained unchanged year on year at €92 million. The EBITA margin was 0.1 percentage points higher at 5.1% (5.0%). Profit for the first nine months of fiscal 2013/2014 was unchanged year on year at €61 million.

Net Sales up in Retail Segment
Net sales in the Banking segment fell by 7% to €1,137 million (€1,217 million) in the first nine months of fiscal 2013/2014. Third-quarter revenue was down 8%. EBITA for the Banking segment totaled €63 million (€79 million), which was 20% down on the figure posted for the same period a year ago. Net sales generated in the Retail segment grew by 7% in the first nine months of the fiscal year, reaching €666 million in total (€624 million). Third-quarter revenue was up 15% compared to the same period a year ago. EBITA for the Retail segment amounted to €29 million in the reporting period (€13 million), up 123% on the same period a year ago.

Growth in Germany and Americas
In Germany, net sales rose by 5% to €432 million (€412 million) in the first nine months of the fiscal year, thus accounting for 24% (23%) of the Group’s total net sales. In the third quarter, net sales in Germany stood at €141 million (€128 million), which corresponds to growth of 10%.

At €843 million (€924 million), Europe (excluding Germany) saw a year-on-year decline in net sales of 9% in the first nine months of the current fiscal year. This was attributable primarily to a downturn in business in emerging European markets.

In the first nine months of the fiscal year, Europe (excluding Germany) contributed the largest part of total net sales for the Group at 47% (50%). In the third quarter, net sales in the region covering Europe (excluding Germany) stood at €267 million (€293 million), which corresponds to a year-on-year decline of 9%.

In the Asia/Pacific/Africa region, net sales in the first nine months of the current fiscal year were unchanged at €317 million. Thus, the contribution made by Asia/Pacific/Africa to total net sales for the Group remained unchanged at 17%. Third-quarter net sales in Asia/Pacific/Africa fell marginally by 1% to €101 million (€102 million).

In U.S. dollars, the Americas recorded an 18% increase in net sales during the first nine months of the fiscal year. Translated into euros, this is equivalent to growth of 12% to €211 million (€188 million). As a result, the proportion of Group net sales generated in the Americas was 12% (10%). In the third quarter of the fiscal year, net sales in the region were up 23% at €64 million (€52 million).

Increase in Proportion of Net Sales from Software/Services
In the first nine months of the fiscal year, net sales attributable to the Hardware business fell by 8% year on year to €822 million (€890 million). In the Software/Services business, net sales were up 3% at €981 million (€951 million). The share of total net sales generated by the Hardware business fell to 46% (48%) in the period under review. Correspondingly, the proportion of total net sales derived from Software/Services was 54% (52%).


Key Financials

in € millions

 

3rd quarter 2013/2014

3rd quarter 2012/2013

Change

9 months 2013/2014

9 months 2012/2013

Change

Net sales

573

575

0%

1,803

1,841

-2%

Operating profit (EBITA)

23

26

-12%

92

92

0%

EBITDA

39

40

-3%

137

135

1%

Profit for the period

15

17

-12%

61

61

0%

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