Results for First Half of 2009/2010

Wincor Nixdorf with anticipated downturn in net sales and operating profit - Financial position strengthened, forecast confirmed

(PresseBox) ( Paderborn, )
In line with expectations, Wincor Nixdorf AG completed the first half of the current 2009/2010 fiscal year with a decline in net sales and operating profit (EBITA). In comparison with the same period a year ago, net sales generated by the IT specialist within the area of retail banking and retailing contracted by 6%, while EBITA was down 15%. The Group's net sales fell to €1,161 million (prev. year: €1,234 million). EBITA decreased to €88 million (€103 million). Correspondingly, the Group's EBITA margin contracted to 7.6% (8.3%), while profit for the period declined by 6% to €60 million (€64 million). "We have yet to see a sustained recovery in demand, and thus our forecast for the current fiscal year remains unchanged," said President & CEO Eckard Heidloff when asked to comment on the Group's current business situation and its prospects for the fiscal year. In this context, the company anticipates a decline in net sales and EBITA, although in both cases the downturn is expected to be no greater than in the previous fiscal year, which had seen net sales slip by 3% and EBITA fall by 13%.

"We have prepared ourselves for continued sluggishness in demand within our markets. At the same time, however, we intend to seize the opportunity as soon as the situation begins to be more positive. Anyway, it is impossible to say when this might be the case," said Heidloff. Against this background, he pointed to the further reduction in net debt by €47 million to €103 million, in addition to the Group's stable operating cash flow of €140 million despite the downturn in earnings. While Heidloff expected the market environment to remain challenging, he was confident that the company had positioned itself favorably for the medium term. "Economic growth in the emerging markets, severe competition for customers and pressure to improve cost efficiency continue to be the principal trends that will drive investment within the retail and retail banking industries in the medium term - trends that we will pursue," he said. The rationale behind Wincor Nixdorf's continued commitment to substantial investments in research and development was to respond to these trends with appropriate innovations. "This crisis has promoted an entirely new way of thinking. The solution recently launched by our company with the express purpose of addressing the current complexities of cash handling for banks and retailers thus generated considerable interest." Heidloff went on to explain that customers had immediately recognized the merits of this innovative concept, which can contribute to cost reductions of more than 20 percent, as well as offering the benefits of greater security and further process automation.

According to Wincor Nixdorf's assessment of the situation, market conditions have yet to show signs of fundamental improvement. The company cited inconsistent business trends together with continued restraint on the part of customers as regards their propensity to invest. Replacement investments, for instance, are being postponed, whereas expenditure on process improvements aimed at cost reductions is more dynamic, depending on companies' financial resources. Wincor Nixdorf is benefiting from the expansion of its business with software and services, while hardware business remains under pressure.

Different developments in the segments and the regions in the first quarter

Net sales in the Banking segment ended the first half of fiscal 2009/2010 9% lower at €791 million (previous year: €866 million). Also in the second quarter, net sales declined by 9%. Net sales generated in the Retail segment edged up slightly by 1% to €370 million in the first six months of fiscal 2009/2010 (previous year: €368 million). In the second quarter, net sales increased by 2%.

In Germany, net sales rose by 2% to €344 million in the first six months of the fiscal year (previous year: €336 million), thus accounting for 30% (previous year: 27%) of total net sales. For the second quarter of the fiscal year, net sales in Germany amounted to €165 million (previous year: €181 million), which translates into a yearonyear decline of 9%.

At €470 million (previous year: €577 million), net sales in Europe (excluding Germany) for the first half were 19% down on the figure posted in the same period a year ago. This region contributed the largest part of total net sales for the Group at 40% (previous year: 47%). In the second quarter of the fiscal year, net sales in Europe (excluding Germany) declined by 11% to €217 million (previous year: €245 million).

Net sales in the Asia/Pacific/Africa region receded by 16% to €184 million in the first six months of the fiscal year (previous year: €219 million). Asia/Pacific/Africa contributed a share of 16% to total net sales for the Group (previous year: 18%). In the second quarter of the fiscal year, net sales generated in Asia/Pacific/Africa decreased by 26% to €87 million (previous year: €118 million).

In U.S. dollars, the Americas delivered a 75% increase in net sales in the first half of the fiscal year. Expressed in euros, this corresponded to growth of 60% to €163 million (previous year: €102 million). Thus, the proportion of Group net sales generated in the Americas increased to 14% (previous year: 8%). In the second quarter of the fiscal year, the Americas achieved 93% growth in net sales, taking the figure to €85 million (previous year: €44 million).

Software/Services continue to grow, Hardware business remains under pressure

In the first half of the fiscal year, net sales attributable to Hardware business contracted by 14% year on year to €608 million (previous year: €711 million). By contrast, net sales from Software/Services increased by 6% to €553 million (previous year: €523 million).

The share of total net sales attributable to Hardware business stood at 52% (previous year: 58%). Correspondingly, the proportion of total net sales from Software/Services rose to 48% (previous year: 42%).

For further details of results, please see the Group's Half-Year Interim Report 2009/2010. The PDF file and online report can be found at under the headings Investor Relations / Reports & Financial Data.

This document contains forwardlooking statements that are based on current estimates and assumptions made by the management of Wincor Nixdorf AG to the best of its knowledge. Such forwardlooking statements are subject to risks and uncertainties, the nonoccurrence or occurrence of which could cause the actual results - including the financial condition and profitability of Wincor Nixdorf - to differ materially from or be more negative than those expressed or implied by such forwardlooking statements. This also applies to the forwardlooking estimates and forecasts derived from thirdparty studies. Consequently, neither the Company nor its management can give any assurance regarding the future accuracy of the opinions set forth in this document or the actual occurrence of the predicted developments.
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