IBS Journal May 2015


Wincor Nixdorf embarks on major restructuring programme…


Germany-based Wincor Nixdorf has unveiled a major restructuring initiative, aimed at turning its fortunes around, fol- lowing a notable decline in sales and earnings. The troubled vendor has already announced that it would fail to meet its original guidance issued for the current fiscal year. In the first half of the year, net sales declined by two per cent to €1.2 bil- lion and profits slumped by nearly a third to €31 million (€45 million in the same period last year). Deteriorating business conditions in key emerging markets like Russia and China, plus the ongoing reluc- tance of European countries to invest in products and services in the Wincor Nix- dorf space, are to blame, the vendor says. Also, a lot of blame is pointed at Win-


cor Nixdorf’s hardware business, which has been in decline over the last few years. In the latest results (for the first half of the year), the hardware sales stood at €504 million – a twelve per cent slide compared to the same period last year (€575 mil- lion). And even though the software ser- vices line is experiencing growth (seven per cent increase in H1 to €704 million), it is not sufficient to offset the hardware downturn, the vendor tells the market. The


hardware business ‘can no longer be offset in the long term, due in part to insufficient economies of scale’, reads the Wincor Nix- dorf statement. Thus, although this busi- ness is ‘an important pillar’, realignment is required. It will be ‘redimensioned with regard to the vertical range of develop- ment activities within the value chain as well as in respect of global production and supply chains; this will be accompanied by significant adjustments to capacity lev- els’, according to the vendor. The aim is to achieve sufficient margins, even on the basis of lower volumes of unit sales. Wincor Nixdorf is keen to transition to


being a ‘software and IT services compa- ny’ as this is where the profits and growth lie, it feels. A seven-point programme has been devised to facilitate this: 1. boosting of the software business


and associated professional services; 2. expansion of high-end IT services


for operations management, e.g. managed services, outsourcing (it already launched a cloud-based offering last year); 3.


‘fundamental realignment’ of the


hardware strategy; 4. turning the Cashless Payment unit


into a standalone entity;


Jens Bohlen, Wincor Nixdorf ©www.wincor-nixdorf.com


5. price optimisation; 6. streamlining of administration


costs; 7. organisational support to imple-


ment changes. Additional investment will be


pumped into the software business, its existing staffing and operational capaci- ties will be restructured, and focus will be directed on managed services and out- sourcing. Furthermore, acquisitions will be made. The vendor is confident all this will ensure its software business net sales will double within a five-year period (in the fis- cal year of 2017/18, it anticipates €600 mil- lion worth of sales). Meanwhile, its Cashless Payment busi- ness unit will be carved out into an inde- pendent entity. It is expected to gener- ate €50 million in sales in fiscal 2014/15. It will be a start-up, says the vendor, ‘with all the associated freedom of manoeuvre. This may serve, for example, as a platform for partnerships or collaborative activi- ties in the payment market or to facilitate investment opportunities.’ An IPO is also mooted. The headcount at Wincor Nixdorf will


Wincor Nixdorf HQ, Paderborn ©www.wincor-nixdorf.com


be reduced over the next three years, by 1100 (this represents twelve per cent of the company’s staff). Of these, around 500


8 © IBS Intelligence 2015 www.ibsintelligence.com


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