After Absorbing Wincor Nixdorf, Diebold Looks to a More Diversified Future

Diebold Nixdorf, the ATM manufacturer formed last August when North Canton, Ohio-based Diebold Inc. bought Germany’s Wincor Nixdorf AG, on Tuesday reported results for its first full quarter as a combined company. The merged firm, double the size of the former Diebold Inc., is now looking to expand globally and diversify beyond ATMs.

“I’m particularly proud of the team as we completely reshaped the company in 2016 and laid the foundation for our future,” chief executive Andy W. Mattes said in a morning conference call with analysts.

The combined company now has about $5 billion in annual revenues, approximately twice that of $2.4 billion recorded by Diebold Inc. in 2015. Annual revenues from services are up 90% on a pro-forma basis to about $2.5 billion and software revenue has tripled to $450 million.

Recurring revenues from services and software tend to be less cyclical than hardware sales, which is one reason why ATM industry leader NCR Corp. also diversified into those markets.

Wincor Nixdorf had a stronger presence in retail payments than Diebold Inc. did. In 2015, Diebold generated less than 2% of its revenues from retailers, but in 2016 retailing generated about 20% of revenues on a pro-forma basis.

Diebold Nixdorf now gets 50% of its revenues from the Europe-Middle-East Africa region and 23% from North America. The company says it has an order for 4,000 ATMs from an independent ATM deployer in North America.

A year ago Diebold divested its security business. Besides the merger, other highlights of 2016 included the formation of two joint ventures in China.

The company reported revenues of $1.24 billion in the fourth quarter compared with $610.4 million a year earlier and a loss, partly because of acquisition expenses, of $77.8 million versus net income of $32.6 million. For the year, revenues increased to $3.32 billion compared with $2.42 billion in 2015. The net loss was $33 million compared with 2015’s net income of $73.7 million.