Record sales and earnings provide solid platform for the future In completing fiscal 2005/2006 (October 1 to September 30) with record figures, Wincor Nixdorf AG has emulated its successful business performance shown in recent years. "Wincor Nixdorf has achieved an outstanding position and has thus created a particularly solid platform for the future," said Karl-Heinz Stiller at his final annual financial press conference as CEO. As reported, he will be handing over the reins to Eckard Heidloff, his current deputy and Chief Financial Officer, following the AGM. Consolidated net sales rose by 12% to €1,948 million (€1,744 million). Earnings before interest, taxes and amortization of product know-how (EBITA) increased by 18% to €161 million (year: €137 million). Net profit was propelled upward by 46% to €82 million (previous year: €56 million). Net profit adjusted for the effects of product know-how amortization, also referred to as cash net income, grew by 31% to €94 million (previous year: €72 million). At the Annual General Meeting to be held on January 29, 2007, the Supervisory Board and Board of Directors will be proposing a dividend payment of €2.80 per share for the fiscal year just ended. Furthermore, Wincor Nixdorf lifted its cash flow from operating activities to €155 million in fiscal 2005/2006 (previous year: €133 million). The successful growth in net sales over the course of fiscal 2005/2006 was attributable to a combination of several factors. Within its core business of hardware products, software and IT services for bank branches and retail stores, for instance, Wincor Nixdorf gained considerable momentum in the year just ended. As regards business performance by geographical region, the company’s successful program of international expansion was complemented by the return to more favorable growth in Germany. Alongside revenue growth, the significant increase in profit was driven by further improvements within the area of cost management. Solid growth in all regions "We are gradually homing in on our target of becoming Europe's market leader in our banking business, having already achieved this goal as a supplier to the retail industry. In parallel, we have strengthened our foundations in the world's growth regions with a view to expanding our business in the global arena, in addition to enhancing our market presence in the United States and China, two countries in which we are particularly keen to move forward to the next level," said Stiller when asked to comment on the company's international performance. Following a protracted period of stagnation, Wincor Nixdorf managed to raise net sales by 11% to €569 million in Germany (€513 million). The key growth drivers within the banking segment were outsourcing services provided by Wincor Nixdorf Portavis GmbH, while the retail segment benefited from a significant boost in demand for reverse vending systems. In Europe – excluding Germany – net sales climbed by 10% to €992 million (€902 million). Business in Asia/Pacific/Africa was buoyed by a solid performance in the banking segment. Net sales grew by 18% to €232 million in this region (€196 million). The Americas also recorded significant growth, with net sales increasing by 17% to €155 million (€133 million). As in the previous fiscal year, Germany accounted for 29% of total sales. Europe contributed 51% (52%), while Asia/Pacific/Africa accounted for 12% (11%) and the Americas 8% (previous year: 8%). Strong growth recorded with hardware products and solutions/services The distribution of total sales by business stream, i.e. hardware products on the one hand and solutions/services on the other, remained unchanged year on year. Products accounted for 59% of total sales, while solutions/services contributed 41%. Wincor Nixdorf recorded double-digit growth in both areas. Wincor Nixdorf is well positioned to meet the growing trend toward automation, industrialization and outsourcing of business processes at branch level. The company has further enhanced its portfolio of fully integrated solutions comprising products and services, with the purpose of supporting the full range of business processes at bank branches and retail outlets. "The move toward outsourcing is a prime example. A number of major renowned international banks not only entrust us with the management of their branch systems, they also source out the operation of their complete IT networks," said Eckard Heidloff. He also presented the company's latest outsourcing project at the press conference: Wincor Nixdorf Portavis GmbH has been assigned the task of operating the data centers and more than 5,000 PC workstations of HSH Nordbank. Another example of all-embracing solutions cited by Heidloff was integrated cash management at banks and retail stores. He went on to explain that this area is set to become the key interface between banks and retailers, opening up tremendous opportunities for Wincor Nixdorf to apply its core strengths as a leading innovator and develop superior handling solutions. Higher expenditure on R&D Wincor Nixdorf invested approx. €87 million in research and development over the course of fiscal 2005/2006 (€78 million), a year-on-year increase of 12%. The company has thus underlined its commitment to securing its technological prowess in the long term and creating added value for its customers. The R&D ratio, calculated in relation to net sales, remained unchanged year on year at 4.5%. In total, 790 employees currently work within R&D (714), which represents 10% of the workforce. Targeted recruitment drive The number of people employed within the Wincor Nixdorf Group rose by 850 to 7,787 (6,937). The recruitment drive was mainly directed at non-German locations (560 new staff members, taking the headcount to 4,102). The number of employees in the home market increased by 290 to now 3,685. The majority of new recruits have been assigned to the services division as well as the Group's international manufacturing centers. Another part of them strengthened the sales unit responsible for growth markets as well as the R&D department. "We have thus shown that commercial success and job creation can go hand in hand, in other words the one does not necessarily preclude the other," said Stiller. Furthermore, he emphasized that the company remained committed to staff profit-sharing initiatives. For instance, more than 80 percent of staff in Germany had received performance-based pay components in addition to their basic salaries, thus allowing them to increase their overall remuneration by a considerable margin in the fiscal year just ended as result of Wincor Nixdorf’s strong business performance. Continuing the success story The Group's overall performance has shown that Wincor Nixdorf is well positioned to maintain its momentum of profitable growth. At the same time, however, the formidable track record of recent years means that the bar for future business performance has been raised considerably. Irrespective of this, Wincor Nixdorf has reaffirmed its growth forecast presented as part of the company's IPO in 2004. "We want to achieve an average of six percent growth in net sales and eight percent in profit. These are also the targets we have set ourselves for fiscal 2006/2007," said Eckard Heidloff and added, "Of course, we will channel all our energy into being even better." He also explained that the first quarter of the new fiscal year had begun positively.