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Wincor Nixdorf Q3 profit jumps
July 31, 2006
In the third quarter of the current fiscal year,Wincor Nixdorf AGonce again posted high growth rates for net sales and earnings.
Net sales increased in the first nine months by 13 percent to 1,435 million euros. Operating profit before amortization of product know-how, EBITA, rose by 19 percent to 118 million euros. This resulted in an improvement of the profit-to-revenue ratio of 0.4 percentage points to 8.2 percent.
"Our shareholders can take special pleasure in this sizeable leap in net profit for the period, which is up 45 percent in the first three quarters alone," said Karl-Heinz Stiller, chief executive officer.
Stiller 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.
"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 percent and EBITA up at least 15 percent," said Stiller.
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 percent to 43 million euros, and net sales increased 16 percent to 492 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 also is 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 percent compared with 54 percent in the previous year), net sales increased in the first nine months to 751 million euros or by 10 percent. Net sales in the third quarter improved by 18 percent to 255 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 percent 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 percent of total business. Net sales in Germany rose 19 percent to 138 million euros in the third quarter.
The increase in net sales in the region America of 11 percent to 112 million euros is specifically attributable to very good growth in Latin America. The rise in terms of U.S. dollars is 5 percent and the share of overall business remains 8 percent. 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 percent to 180 million euros — and by 17 percent in terms of U.S. dollars. As a result, this region contributes a share of 13 percent to total net sales. In the third quarter, net sales were 57 million euros or an increase of 16 percent.
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 percent 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 percent.
The retail segment posted net sales of 561 million euros, an increase of 6 percent. It profited greatly from good product business in Germany with reverse vending machines. Net sales rose by 8 percent in the third quarter.
Broken down by types of business in product business, consolidated net sales increased by 16 percent to 861 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 percent to 574 million.
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.
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