Company Culture: Our vision states, "We want to make Wincor Nixdorf the leading provider of IT services and solutions to the branch businesses of banks and retailers!" This is only possible with a team which works together and which sticks together. With people who pursue our Company's aims and objectives with motivation and commitment. People who identify with their company and are proud to work for it. People with spirit.
Wincor Nixdorf Holding GmbH is one of the world's leading manufacturers of automated teller (ATM) and electronic point-of-sale (EPOS) machinery, equipment, and software. The company, based in Paderborn, Germany, is that country's market leader, and number three in the world, in both categories. Wincor Nixdorf is also number one in Europe for EPOS equipment for the retail sector, and number two in Europe for ATMs. Production takes place in Germany and at its Asian-region headquarters in Kallang, Singapore. Wincor Nixdorf focuses on two core sectors, including the retail banking market for its ATM and self-service terminal systems, such as information terminals and statement and voucher printers. The company also sells its ProClassic/Enterprise software, adding international support for Internet and telephone banking services. Retailers form Wincor Nixdorf's other major area of operation, for which the company provides POS systems as well as shelf-labeling, "reverse vending systems" (for returns of items such as refillable bottles and containers), and other retail-oriented systems. The company supports these products with inventory management and related information software. In addition to its hardware and software production, Wincor Nixdorf also provides a range of support services for its bank and retailer customers, including call-screening and part supply logistics, as well as IT outsourcing services. Once one of Germany's major computer companies, then part of Siemens, before being spun off in the late 1990s, Wincor Nixdorf returned to the Frankfurt Stock Exchange in 2004. In that year the company posted sales of EUR 1.58 billion ($1.9 billion).
Germany's Pride in the 1950s
For much of the postwar era Nixdorf Computer epitomized the Wirtschaftswunder, Germany's extraordinary recovery from the devastation of war. From its headquarters in the provincial town of Paderborn, Nixdorf built a worldwide reputation for quality and innovation in the field of small- and medium-sized computers, becoming a source of considerable pride in a country still suffering from the war's physical and psychological wounds. In the year following the death of Heinz Nixdorf, the charismatic founder and owner of the corporation, Nixdorf was honored as 1987's "most admired German company." By the end of the 1980s, after a decade of more than 20 percent annual sales growth, there was talk of Nixdorf eventually challenging the world's computer leaders.
Yet by 1989, the erstwhile pride of Germany was headed for bankruptcy, a victim of one of the sudden storms that periodically lash the international computer industry. By early 1990 the company had been sold to German industrial giant Siemens. Heinz Nixdorf's miraculous creation remained Nixdorf in name alone, but Germany as a whole maintained control of one of its symbols of economic strength.
Heinz Nixdorf was born in Paderborn in 1925, the son of a railway clerk. After service in the Luftwaffe at the end of World War II, he enrolled at Frankfurt University to study physics and business but left before taking a degree. With a small amount of borrowed capital, Nixdorf founded his own company, the Labor für Impulstechnik, in a basement workshop in Essen in 1952. He devised and built a calculator using radio tubes and sold it to West Germany's largest electrical utility, the Rheinische Westfalische Elektrizitatswerke. Word spread of Nixdorf's innovative machines, and Impulstechnik began supplying some of Europe's leading electrical manufacturers with products they later sold under their own names. Chief among these customers were Groupe Bull of France and Wanderer Werke in West Germany.
When the former was bought out by General Electric in 1964 the resulting drop in Nixdorf sales taught its founder an important lesson. Henceforth his company would not rely on such unpredictable relationships with industrial giants. It would manufacture and sell its own equipment. Nixdorf developed a line of calculators and billing machines superior to those it supplied to Wanderer and quickly proceeded to out-sell its own best customer. Nixdorf soon simplified matters by buying out Wanderer--considered a remarkable coup for a 15-year-old company. Nixdorf thus acquired extensive production facilities and a widespread sales force, with which it set about revolutionizing the use of computers in small businesses and banking.
In the mid-1960s few people yet envisaged any but IBM's theory of computer utilization, in which ever-larger central processing units handled a growing amount of corporate data from a single location. Heinz Nixdorf recognized that most companies did not need more computational muscle. They needed to put such tools to work efficiently. To do so, they required two elements IBM was not particularly interested in supplying including small, versatile computers and a sales force willing to tailor such machines to the specific needs of each customer. This strategy was not only generally sound but also addressed the realities of the West German economy, whose companies tended to be smaller, family-owned concerns not capable of IBM-style investments but still in need of computing efficiency. For these users Nixdorf brought out its 820 general-purpose minicomputer in 1968, adding both the sales force and software needed to adapt such a machine to the daily needs of each small-business client. As a result of this campaign, Nixdorf sales rose from DEM 28 million in 1966 to DEM 263 million four years later, beginning the pattern of explosive growth that did not end until the debacle of 1989.
During the 1970s Nixdorf continued to defy conventional wisdom by exploiting the niche it had uncovered. The company's first international sale provided the Swedish banking industry with 1,000 terminals for its various branch locations, and by 1972 Nixdorf had opened sales and manufacturing centers in 21 other countries as well. The most important foreign target was the United States, but Nixdorf met with only limited success in the U.S. market. In 1969 it bought the electronic division of Victor Comptometer, a U.S. manufacturer of office equipment, and in 1977 it added the Massachusetts-based Entrex, Inc., but at no time was Nixdorf able to gain more than 1 percent of the U.S. market. It was not that the company seemed in need of additional sales. By 1978 Nixdorf had passed DEM 1 billion in sales and employed some 10,000 people around the world.
Heinz Nixdorf and his family still owned 100 percent of the company stock, which some observers felt gave Nixdorf a decided advantage over its main German competitor, Siemens, a multibillion-mark conglomerate unable to keep up with the rapidly changing computer world. Although such a concentration of ownership offered more flexibility and the ability to move quickly, it also limited the company's capital base, and in 1978 Nixdorf dallied with a number of suitors eager to buy up large chunks of the corporation. However, the entrepreneur refused to relinquish control, instead making a conditional sale of 25 percent of his stock to longtime ally Deutsche Bank in 1979.
Siemens to the Rescue in the 1990s
In addition to its traditional strength in small businesses and banking, Nixdorf expanded in 1974 to provide information services for the retail sector. Nixdorf's retail involvement primarily involved point-of-sale equipment, an area in which the company became one of the European leaders. The fourth leg of Nixdorf's marketing platform was in place by 1982, when its new telecommunications division created Germany's first digital telephone switching system. Heinz Nixdorf predicted that telecommunications would provide 50 percent of corporate revenue by the century's end, as the gradual convergence of telecommunication and computer systems opened a vast new field known as integrated service digital networks.
To pursue such goals Nixdorf needed yet more capital, and in 1984 the company made its initial public offering (IPO) of stock, first in West Germany and then also on the Swiss markets. Response was outstanding, as expected for a company whose 1984 sales had reached DEM 3.27 billion and continued to climb at about 21 percent per year. Heinz Nixdorf had become something of a legend in his native land; the employer of 20,000 skilled German workers was a symbol of that country's unflagging determination to remain a world leader in the crucial computer industry.
When the founder died unexpectedly of a heart attack while dancing at a company party in March 1986 his employees were stunned, but none doubted that under new Chairman Klaus Luft the Nixdorf ascent would continue. At that time the company offered both a full line of IBM-compatible minicomputers, workstations, and terminals, and a new series of TARGON machines using the UNIX "open" operating system which was the only real competitor to that of IBM.
Nixdorf was Europe's largest seller of software and had built perhaps the world's most dedicated, knowledgeable sales force to help its many smaller customers make intelligent use of the machines and programs they purchased. The company always worked from the customer to the machine, not vice versa, in that way earning the kind of loyalty that ensures repeat sales. For all of these reasons, therefore, the financial community was puzzled when it became apparent that 1988 profits were not going to be as spectacular as Nixdorf had expected. As the months went by, a rather embarrassed Klaus Luft admitted that profits would indeed not be spectacular at all, except in a wholly negative sense: Profits for the year were DEM 26 million, down 90 percent from the previous year's record DEM 264 million.
The year 1989 proved to be an unprecedented nightmare for Nixdorf. A first half loss of DEM 297 million snowballed into a second half nearly twice as bad. By the end of the year, the company's losses had topped DEM 1 billion, wiping out nearly all of the company's profit from the decade before. Since Deutsche Bank and the Nixdorf family, who still controlled 100 percent of the voting stock, were determined to keep the company in German hands, the Siemens buyout was the most advantageous solution.
Nixdorf was overcome by an unfortunate combination of factors mostly outside its control. The company suffered a triple blow from the economy at large. The price of computer chips skyrocketed; the Nixdorf mix of sales shifted rapidly from high-margin bank installations to low-margin office and retail work; and, most important, increased world competition and standardization of products severely depressed hardware prices. The international movement toward so-called open systems meant that an increasing percentage of equipment was interchangeable, which drove standard part prices down and forced competitors to "add value" to their own products in order to justify a higher final price. Nixdorf thus found itself paying more for the computer chips with which it assembled machines that sold only at lower prices. The element the company could have better managed was the excessive growth of its highly paid personnel, most of them software designers and engineers.
Despite such difficulties, Siemens was happy to pay $350 million for its smaller cousin. The acquisition gave Siemens a strong position in the midrange computer market, where it was previously weak, and made the parent company the seventh largest computer maker in the world. For the Nixdorf family, the deal brought to an abrupt end one of Germany's most successful postwar economic creations, as another maverick entrepreneur was swallowed up by a larger competitor whom only a few years before it had consistently outperformed in the marketplace.
Independent and Focused in the 2000s
Renamed as Siemens Informationssysteme, and then as Siemens Nixdorf Informationssysteme (SNI), the marriage between Siemens and Nixdorf quickly floundered. Indeed, some observers recognized that Siemens's acquisition had been doomed from the start. This was in large part due to Nixdorf's overemphasis on the micro-computer market. While this market had been one of the major sectors in the computer industry in the 1980s, by the early 1990s it had become in large part obsolete--crushed by the rise of the personal computer (PC) and the development of efficient networking systems. With the collapse of the microcomputer market, Nixdorf had little left to offer other than operations in a few small niche areas.
SNI's losses remained high in 1991, topping DEM 780 million, which did not include more than DEM 200 million in additional "restructuring charges." Yet, despite a thorough restructuring, the group's losses continued into the mid-1990s. In 1992, the company's losses were still greater than DEM 500 million, and dropped slightly, to DEM 420 million, at the end of 1993.
In response, SNI brought in a new CEO, Gerhard Schulmeyer, who formerly had been with Asea Brown Boveri. Schulmeyer represented the first time an outsider had come in to run Nixdorf, and the company now began a massive shift in its operations, refocusing its production on the one hand on the PC market, and on the other on financial transaction support machinery and equipment, such as ATMs and EPOS systems.
By the mid-1990s, SNI had regained some of Nixdorf's former glory. In 1996, the company appeared reborn, posting sales of nearly DEM 14 billion ($9 billion), placing it as Germany's number one computer company, and number two in Europe, trailing only IBM. Yet the company had made few inroads in penetrating the all-important U.S. computer market. As such, into the late 1990s, amid a surge in PC sales, SNI fell behind competitors such as IBM, Compaq, Hewlett-Packard, Dell, and fast-growing Acer. Unable to compete, Siemens announced its decision to sell off its PC operations to Acer in 1998.
The sell-off led to a spinoff that year of what was left of SNI into a new company, Siemens Nixdorf Retail and Banking Systems GmbH. That company was set up as a separate and independent company from Siemens, and refocused to target the retailing and retail banking markets with its ATM and EPOS systems. In 1999, Siemens sold off the former SNI entirely, in a buyout led by the venture capital firm Kohlberg Kravis Roberts and Goldman Sachs Capital Partners.
The company then took on its new name, Wincor Nixdorf, and began building its stature not only as one of Europe's leading manufacturers of ATMs and EPOS systems, but as a global player, with operations in more than 60 countries supported by a subsidiary network in more than 30 countries.
In the early 2000s, Wincor Nixdorf added a range of IT support services to its portfolio, responding to an increasing cross-industry trend toward outsourcing services. As such Wincor Nixdorf not only developed support services for its own range of equipment and software, but also for third parties. By the middle of the decade, the company had begun to offer full-service IT outsourcing services for its retail banking customers.
Wincor Nixdorf reincorporated as a joint stock company, leading to its IPO in May 2004. The listing on the Frankfurt Stock Exchange represented one of the first major IPOs since the crash of Germany's IPO market in the early 2000s. By the end of its 2004 year, Wincor Nixdorf had posted profits of EUR 116 million on sales of nearly EUR 1.6 billion ($1.9 billion). The company now turned its attention to further expansion, with a particular focus on growth in the Asian markets. Wincor Nixdorf carried the legacy of one of Germany's great economic successes into the new century.
Principal Subsidiaries: Pt. Wincor Nixdorf (Indonesia); Siemens Nixdorf B.V. (Netherlands); Wincor Nixdorf A/S (Denmark); Wincor Nixdorf AB (Sweden); Wincor Nixdorf AS (Norway); Wincor Nixdorf Asia Pacific (Singapore); Wincor Nixdorf Bilgisayar Sistemleri A.O. (Turkey); Wincor Nixdorf C.A. (Venezuela); Wincor Nixdorf Ltd. (Korea); Wincor Nixdorf Ltd. (Ireland); Wincor Nixdorf Oy (Finland); Wincor Nixdorf Retail & Banking Systems Ltd. (China); Wincor Nixdorf Retail and Banking Systems Sp. z.o.o. (Poland); Wincor Nixdorf S.R.L. (Italy); Wincor Nixdorf Sdn. Bhd. (Malaysia); Wincor Nixdorf Soluçoes em Tecnologia da Informaçao Ltda. (Brazil).
Principal Competitors: International Business Machines Corporation; NEC Corporation; Motorola Inc.; Teradata Corporation; NCR Corporation.
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