WN FY201011 Annual Report

8/3/2019 WN FY201011 Annual Report

1/156

EXPERIENCE MEETS VISION.

OCTOBER 1, 2010 TO SEPTEMBER 30, 2011

WORLDS CONVERGING.ANNUAL REPORT 2010/2011


2/156

2010/20111 2009/20102 Change

Financial Statement ( mill ion)

Net sales 2,328 2,239 4%

Gross proft 570 562 1%

Gross proft as a percentage o net sales 24.5% 25.1%

Research & development expenses 100 101 1%

R&D expenses as a percentage o net sales 4.3% 4.5%

Selling, general and administration expenses 3 308 299 3%

SG&A expenses as a percentage o net sales 13.2% 13.4%

Operating proft (EBIT) 162 162 0%

Goodwill amortization 0 0

EBITA4

162 162 0%EBITA as a percentage o net sales (EBITA margin) 7.0% 7.2%

Amortization/depreciation o property, plant and equipmentand licenses and write-down o reworkable service parts 63 61 3%

EBITDA 225 223 1%

EBITDA as a percentage o net sales (EBITDA margin) 9.7% 10.0%

Proft or the period 108 106 2%

Proft or the period as a percentage o net sales 4.6% 4.7%

Earnings per share () 5 3.60 3.38

Cash flow ( mill ion)

Cash ow rom operating activities 144 154 6%

Cash ow rom investment activities 66 62 6%

Sept. 30, 2011 Sept. 30, 2010 Change

Key Balance Sheet Figures ( mill ion)

Working capital 263 235 28

as a percentage o net sales 11.3% 10.5%

Net debt 199 134 65

Equity 6 330 358 28

Human Resources

Number o employees (September 30) 9,171 9,309 138

1) Oct. 1, 2010Sept. 30, 2011.2) Oct. 1, 2009Sept. 30, 2010.3) including other operating

income and expenses.4) net proft on operating

activities beore interest, taxesand amortization o goodwill.

5) 2010/2011 calculated on basiso 29.776 million shares,2009/2010 calculated on basiso 31.371 million shares.

6) including non-controllinginterests.

Key Figures 2010/2011.

10-year Net Sales History. m

01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11

2,250

2,000

1,750

1,500

1,250

1,000

750

500

250

Change 7% 9% 11% 12% 10% 8% 3% 0% 4%

1,345 1,440 1,576

1,744

1,948

2,1452,319 2,250 2,239

2,328

10-year EBITA History. m

01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11

300

250

200

150

100

50

Change 18% 12% 17% 18% 16% 11% 13% 9% 0%

88 104116

137161

186206

179

162 162


3/156

The Company.

Wincor Nixdorf is one of the worlds most successful IT solution specialistsfor process optimization at the interface with consumers in the area of retailbanking and retailing. Both industries are exposed to intense competition atan international level, forcing them to improve their business processes con-tinuously.

Markets and Market Positions.

Wincor Nixdorf s port folio of specialized software and services for retail banksand retailers have made it one of the world leaders in its markets. We haveestablished a market presence in more than 110 countries worldwide, 42 ofwhich are served by our own subsidiaries. In the Hardware business, we arenumber 2 in Europe and the world in terms of the volume of ATMs supplied.

We have established ourselves as Europes number 1 and the world number2 for supplies of Electronic Point of Sale (EPOS) systems.

Solutions Portfolio and Core Competencies.

For our customers, the deployment of information technology is becomingmore and more instrumental in achieving competitive growth. We are commit-ted to assisting them in enhancing essential consumer-facing processes, witha particular emphasis on their branch and store operations. For this purpose,we offer them the best possible combination of innovative hardware and soft-ware, complemented by high-end services.

One of the key aims is to raise the overall eff iciency of procedures and work-flow, improve consumer-friendliness, and reduce process costs.

Our completeSolutions Portfolio,see page 58 et seq.

Market andCompetition,see page 55

www.wincor-nixdorf.com

Our IT solutions components

How we createvalue for our customers

Focusing on keycustomer processes

IT Solutions by Wincor Nixdorf.


4/156

Innovative Drive and Customer Focus asthe Basis for Business Success.

Our skills as an innovator in the field of technical advancement are essentialto our operating capabilities. In total, we invest at least 4% of our net sales inResearch and Development each year (> 100 million). What is more, we work in

close collaboration with global technology leaders within the area of IT, with theexpress purpose of transferring their latest advances to solutions made avail-able to our customers. We are equally commit ted to maintaining a close dialogwith our customers when it comes to reviewing and updating their businessprocesses. In pursuing this approach, we are able to ensure the continuous pro-gression of our solutions portfolio in line with both global and, at the same time,local market requirements associated with retail banking and retailing.

Our People the Key to our Success.

At the end of f iscal 2010/2011, the WincorNixdorf Group employed around 9,200men and women around the globe. Giventhe strong international competition weface, it is their commitment and creativ-ity that make all the difference and helpto ensure our success.

Proven Growth Strategy.

Wincor Nixdorf makes use of four strategic levers to deliver sust ained businesssuccess:

Global expansion focusing on growth, particularly outside of Europe. Innovation we invest heavily in Research and Development for the purposeof cementing our pos ition as an innovation leader. Comprehensive portfolio of high-quality services targeted expansion of com-

plex services, e.g., Professional Services, Managed Services, and Outsourcing.Extension and application of our expertise to other related markets, e.g.,

postal industry and service stations.

Research andDevelopment,see page 81 et seq.

Employees,see page 83 et seq.

Growth St rategy,see page 56 et seq.

Global expansion Innovation Comprehensive

portfolio of

high-quality services

Extension and

application

of our expertise

Headcount by Regions.

Americas

Europe

Germany

Asia/Pacific/Africa

3,985

2,623

1,734

829


5/156

2010/2011:Key Challenges Met.

Group: Lack of sustained market recovery Net sales grow by 4% EBITA un-changed year-on-year Growth in Software/Services by 6% Hardware busi-ness expands by 2% Business in Germany down on last year s strong perfor-

mance; Europe generates significant growth weaker trend in some SouthernEuropean markets; Americas fail to match last years buoyant sales; significantforward momentum in Asia/Pacific/Africa Stable cash flow; net debt remainslow Substantial investments in R&D Innovative CINEO systems generatestrong interest, with global market launch currently underway

Segment Banking: Net sales up 2% to 1,527 million (2009/2010: 1,497 mil-lion) Share of Group net sales contract s slightly to 66% EBITA down 5%to 120 million (2009/2010: 126 million)

Segment Retail: Encouraging growth in net sales by 8% to 801 million(2009/2010: 742 million) Share of Group net sales increases to 34% EBITAup 17% to 42 million (2009/2010: 36 million)

2011/2012:Primed for Volatile Market Environment.

Uncertainties arising from the impact of the sovereign debt crisis on banks,particularly in Europe Sustained growth in business within emerging markets

Potential scenarios range from a small year-on-year reduction in net sales toan increase slightly above the previous years growth rate, while EBITA may fallmarkedly or edge up slightly on last years figure Wincor Nixdorf can rely onproven skills with regard to adaptability, as well as benefiting from the stabilityof key financial indicators such as cash flow and equity ratio Fundamentaltrends for IT in retail banking and retailing remain intact Investments in R&D

continue to be substantial Expansion of activities in the emerging markets

Group BusinessPerformance,see page 64 et seq.

SegmentPerformance,see page 67 et seq.

Net Sales by Segment.

1,527mBanking

801mRetail

66%

34%

Net Sales by Business Stream.

1,159mHardware

1,169mSoftware/Services

50% 50%

Net Sales by Region.

356mAsia/Pacific/Africa

237mAmericas

612mGermany

1,123mEurope

15%

27%

10%48%


6/156

2 Letter to Shareholders Management Stock Corporate Governance Supervisor y Board Report Magazine Responsibil ity Statement

Worlds Converging.

As a provider of IT solutions for retail banks and retailers, Wincor Nixdorf

has been straddling both worlds for a number of years. Those who have

followed our progress over this period will have seen how rapidly many

of the tasks performed in both industries have converged and how

Wincor Nixdorf supports that convergence with new approaches and

cutting-edge solutions.

The relentless review of processes that had supposedly already reached

best-in-class levels has revolutionized business operations in many ways

in both industries. Hardware, software, and IT services are merging to

create new and ever-more intelligent systems. For our customers, this

optimization of processes has meant greater productivity and less com-

plexity. It has also strengthened customer loyalty, reduced costs, and

helped Wincor Nixdorf to consolidate and expand its market position.

At a regional level, too, the world is growing ever closer. Although our

core market has traditionally been Europe, markets in the emerging coun-

tries are becoming more and more important to us.

These trends are illustrated on our front page. On closer inspection, what

appears at fir st sight to be a chip card, for use at the bank or the check-

out, shows a map of the world representing the unlimited scope of our

markets. Even more detailed examination reveals a barcode, and in the

background a series of conceptual process chains such as those that

underlie all solutions.

You can find out what all this means in practice for our customers and

for Wincor Nixdorf in the latest edition of our magazine REENGINEERING

PROCESSES on page 27. The article will he lp you to unders tand what we

mean when we say Experience meets Vision.

MagazineREENGINEERING

PROCESSES,see page 27 et seq.


7/156

3Group Management Report Group Accounts Notes to the Group Financial Statements Auditors Report Further Information

Cross referenceswithin theAnnual Report

Brief explanations

Link to Internet

Reference to non-financial performanceindicators

QR code

Letter to Shareholders. 4

The Management Team. 6

Wincor Nixdorf Stock. 8

Corporate Governance and Compensation Report. 12

Supervisory Board Report. 22

Responsibility Statement. 52

Group Management Report. 54

Group Financial Statements. 98

Notes to the Group Financial Statements. 102

Auditors Report. 143

Glossary. 144

Financial Calender, Editorial. 147

International Subsidiaries 149

MAGAZINE: REENGINERING PROCESSES. 27

Contents.

For a detailed tableof contents relatingto the Group Management Report, pleaserefer to page 53.

For a detailed tableof contents relatingto the Notes to theGroup Financial Statements, please referto page 97.


8/156

4Letter to Shareholders

Management Stock Corporate Governance Supervisor y Board Report Magazine Responsibil ity Statement

One o the most signifcant challenges acing Wincor Nixdor AG over the last fscal year was to ormulate a response to

the lack o any sustained recovery in our key markets. Today, I can inorm you that it was a challenge Wincor Nixdor suc-

cessully met, with a our percent increase in net sales and operating proft maintained at last years level.

It is equally important or both our shareholders and the Company that you share in this perormance, as we again

intend to propose a dividend o 1.70 to the Annual General Meeting. In doing so, we are maintaining our established

dividend policy o distributing around fty percent o our proft or the fscal year. We believe this demonstrates the con-

sistency and reliability o our approach to shareholders.

Although there has been no sign o a sustained market recovery in recent months the economic situation in some

countries o Southern Europe is a case in point one actor at least remains constant in our markets with regard to the

undamental trends in retail banking and the retail industry. Both industries have shown that investment in inormation

technology is critical to success in response to intense and ever-greater competition. The need or streamlining remains

strong in our established markets or both retail banks and retailers.

In this context, the global introduction o our new CINEO systems another major challenge acing us last fscal year is o particular importance to our business. CINEO is geared specifcally towards the needs o both industries in the area o

automation and rationalization, and has considerable potential or our business in the medium term. However, our success

will largely depend on how ast the business environment stabilizes so that companies are again more willing to invest.


9/156


While our established markets are o course very important to us, so is growth in the emerging countries, which now

account or almost twenty percent o global IT investment by retail banks and retailers. For this reason, we are particularly

delighted by our success in these regions to date.

Thus, there can be no doubt that Wincor Nixdor is committed to growth. We want to consolidate our existing success

and, indeed, build on it. At the heart o our eorts to do so is our corporate strategy, which ocuses on delivering innovative

systems such as CINEO and new sotware products. It also includes our expansion in markets outside Europe and the expan-

sion o our portolio o high-end services. Finally, our strategy involves achieving growth by applying the expertise we have

gained in the retail banking and retail industries to other areas, such as the branch operations o postal service providers

and service station operators.

The act that we have been able to implement and push even urther ahead with this strategy in the last twelve months

is a testament to our global workorce o around 9,200 employees. I would like to take this opportunity to express my gratitude

or their tremendous commitment over the last fscal year. Thanks are also due to our customers, whose confdence is thevery oundation o our success. Indeed, it is the challenge o retaining your confdence that motivates and drives us.

To conclude, let me take a brie look ahead. We expect conditions in the current fscal year 2011/2012 to be very chal-

lenging indeed, especially in Western Europe, as a result o the sovereign debt crisis and a weakening economic climate. It

has already become evident that the current level o uncertainty is aecting the willingness o European banks in particular

to invest. Compensating or this will not be easy, even allowing or continued healthy growth in the emerging economies.

At 75 percent, Europe simply accounts or too big a share o our overall net sales.

In light o these imponderables and uncertainties, we are not able to oer a reliable orecast or 2011/2012: as regards

net sales, the potential scenario ranges rom a slight downturn to a moderate increase, while operating proft may contract

signifcantly or expand slightly.

Consequently, we eel it is particularly important to be prepared. We want to be able to respond quickly and exibly

i the crisis becomes even more acute, or, as might also be the case, i demand picks up. We have already demonstrated

this capacity to adapt on many occasions and will strive to maintain it. Even so, urther personnel adjustments cannot be

excluded. These may involve accelerating our existing plans to increase the size o our workorce in the Asia/Pacifc/Arica

region, while urther reducing sta in Germany and Western Europe in response to the prevailing uncertainty currently

aecting the European market in particular.

As you will know rom our past record, Wincor Nixdors policy is to remain exible and adaptable in challenging situa-

tions, while prioritizing fnancial solidity and stability. As our shareholders, you can continue to rely on these strengths.

Thank you or placing your trust in Wincor Nixdor. I can assure you that we will continue to do all we can to live up to your

justifable expectations o our Company.

Regards,

Eckard Heidlo


10/156

6 Letter to ShareholdersManagement

Stock Corporate Governance Supervisor y Board Report Magazine Responsibil ity Statement

Jens Bohlen

Senior Vice President,Services

Born 1962. Since November

2006 at Wincor Nixdorf and Memberof the Executive Board; responsible

for the IT services business with

banks and retail companies.

Rainer Pfeil

Senior Vice President,Human Resources

Born 1962. Joined

Wincor Nixdorf in July 2001;since then Member of the

Executive Board; responsible for

Human Resources.

Reinhard Rabenstein

Senior Vice President,CTO

Born 1954. Joined Nixdorf

in 1980. Since October 2005Member of the Executive Board

and Chief Technology Officer.

Thomas Fell

Senior Vice President,Retail

Born 1968. Joined Wincor

Nixdorf in November 2010 andsince then Member of the

Executive Board; responsible

for the Retail business.


11/156


Dr. Jrgen WunramMember of the Boardof Directors

Executive Vice President,CFO, COO

Born 1958. Joined the

Company in March 2007and since then Member of

the Board of Directors;

responsible for finances.

Khoon Hong Lim

Senior Vice President,Region Asia-Pacific


in 1988. Member of theExecutive Board since October

2005 and responsible for Group

business in Asia-Pacific.

Stefan AuerbachMember of the Boardof Directors

Executive Vice President,Banking


in 1983. Member of theBoard of Directors, since

October 2005; responsible for

the Banking business.

Javier Lpez-Bartolom

Senior Vice President,Region Americas

Born 1959. Joined the

Company in 1997. Member ofthe Executive Board since 1999;

responsible for the Group business

in the Americas.

Eckard HeidloffPresident & Chief ExecutiveOfficer


in 1983. President &CEOsince January 29, 2007.


12/156

8 Letter to Shareholders ManagementStock

Corporate Governance Supervisor y Board Report Magazine Responsibil ity Statement

Share Performance. At the end o the reporting period,

Wincor Nixdor stock closed at 33.80, nearly 30% down on its

opening price as o October 1, 2010. This downturn was much

more pronounced than that o the MDAX, which lost only 5%

over the same period.

Wincor Nixdorf Share Performance Subdued Proposed Dividend of 1.70 per Share

Share Performance Well Below Market as a Whole.

40

60

October November December January February March April May June July August September

2010 2011

Wincor Nixdorf MDAX (Performance Index) MSCI World

140%

130%

120%

110%

100%

90%

80%

70%

60%

70.4%

94.9%

93.2%

Performance of Wincor Nixdorf Shares Compared to MDAX and MSCI World.

50

30


13/156


The ollowing points can be observed in relation to the peror-

mance o Wincor Nixdor stock in the fscal year just ended:

Overall share prices generally rose up to July 2011 with occa-

sional downturns.

In August 2011, there was an abrupt slump in the market as a

whole in response to the European debt crisis; the subsequent

trend remained downwards with considerable uctuations.

Wincor Nixdor stock largely outperormed the market as a

whole up to around mid-March 2011.

The stock ell abruptly in early May ollowing a change in

the Groups net sales and proft orecast or the fscal year

2010/2011.

From July 2011 onward, Wincor Nixdor shares ell at a more

pronounced rate as part o a dramatic slide in the overall

market.

The lowest trading price or the reporting year was 31.55

on September 23, 2011, while the highest fgure o 63.45 was

achieved on February 15, 2011.

The average trading volume o Wincor Nixdor shares on all

German stock exchanges declined rom 4.1 million shares per

month in fscal 2009/2010 to 3.8 million shares traded per

month during fscal 2010/2011.

Basic Data.

Date frst traded May 19, 2004

Issue price 20.50

Stock exchange Frankurt Securities & StockExchange (Prime Standard)

Prime sector Industrial

Total number o shares 33,084,988 shares with a nominalvalue o 1.00 each

WKN (German securities no.) A0CAYB

ISIN DE000A0CAYB2

Index Membership. According to data issued by Deutsche

Brse or September 2011, Wincor Nixdor is ranked 25th in the

MDAX index on the basis o market capitalization (previous

year: 18th) and also 25th (previous year: 19th) on the basis o

trading volume. Both criteria are particularly important to

make the stock more appealing to institutional investors.

Index Included since

MDAX September 20, 2004

MSCI World Index (World Small Cap) June 1, 2005

Dow Jones STOXX 600 June 19, 2006

Kempen SNS European Smaller SRI Index(Socially Responsible Investment)

October 1, 2007

Wincor Nixdorf Shares Key Facts & Figures.(Data adjusted ater capital increase, executed on March 22, 2007, through issuance o shares in a ratio o 1:1)

2010/2011 2009/2010 2008/2009 2007/2008 2006/2007

Opening price (Xetra) 48.00 43.70 41.74 59.00 57.62

Fiscal year-end price (Xetra) 33.80 47.83 44.01 41.49 58.00

Fiscal year high (Xetra) 63.45 55.49 45.26 69.19 75.00

Fiscal year low (Xetra) 31.55 38.55 26.90 39.73 50.75

Number o shares as o September 30 33,084,988 33,084,988 33,084,988 33,084,988 33,084,988

Number o shares outstanding (ree oat)as o September 30 29,776,490 31,370,717 31,664,008 31,664,008 32,382,208

Free oat 90.0% 94.8% 95.7% 95.7% 97.9%

Market capitalization as o September 30 1,006m 1,500m 1,394m 1,314m 1,878m

Total dividend 51m1 53m 59m 67m 88m

Dividend per share 1.701 1.70 1.85 2.13 2.78Dividend yield (based on fscal year-end price) 5.03% 3.55% 4.20% 5.13% 4.79%

Earnings per share 2 3.60 3.38 3.69 4.26 3.621)Proposed dividend.2)Proft or the period (up to 2008/2009 beore carve-out charges) based on shares outstanding.


14/156

10 Letter to Shareholders ManagementStock

Corporate Governance Supervisor y Board Report Magazine Responsibil ity Statement

Shareholder Structure: Broad Scope of Interna-

tional Ownership. A to ta l o 90% o Wincor Nixdors

stock (excluding treasury shares) is in ree oat. Based on the

announcements issued pursuant to Section 21 o the German

Securities Trading Act (Wertpapierhandelsgesetz WpHG), at

the end o the reporting period the ollowing entities each held

an interest in Wincor Nixdor in excess o the disclosure

threshold:

Aberdeen Asset Management PLC (over 3%)

AMUNDI S.A. (over 3%)

DWS Investment GmbH (over 5%)

Details concerning Directors Dealings pursuant to Section

15a WpHG are published on the Companys website at www.

wincor-nixdor.com in the section entitled Investor Relations.

According to our own estimate, at the end o the reporting

period, approx. 80% o Wincor Nixdor shares were held by

investors domiciled abroad. A signifcant proportion o these

shares are held particularly by investors based in France, the

United Kingdom, and the United States o America.

Investor Relations Ongoing Communication

more Important than Ever in Times of Crisis.

For Wincor Nixdor, all Investor Relations activities are centered

around open and proactive fnancial communication. We are

committed to providing investors and analysts with inormation

on the strategic direction and development o our Company

in a comprehensive and timely manner. We aim to generate

confdence by establishing an ongoing dialog with the capital

markets.

During fscal 2010/2011, we held a total o 30 road shows

and conerences in Austria, Canada, Denmark, France, Germany,

Italy, the Netherlands, Spain, Sweden, Switzerland, the United

Kingdom, and the United States o America as a means o os-

tering close relations with existing partners and establishing

new contacts.

We also conducted numerous one-on-one meetings with inves-

tors at our headquarters in Paderborn. These included a tour o

the plant and product presentations, allowing visitors to gain a

comprehensive insight into our Company and portolio.

Coinciding with our annual Wincor World in-house exhibi-

tion in Paderborn, we organized the 7th Wincor Nixdor Inves-

tors Day on January 25, 2011, which included an extensive

range o inormation or investors and analysts.

In all, the Board o Directors and the Investor Relations

team held talks with well over 200 institutional investors in the

reporting period. Fund managers rom France, the United King-

dom, and the U.S. in particular showed a strong interest in our

Company.

Following the publication o our quarterly reports and pro-

visional results or fscal 2010/2011, we discussed our fnancial

situation and business perormance in the respective segments

at length during several conerence calls with analysts and in-

vestors.

All ad hoc announcements, press releases, and quarterly re-

ports are published promptly on our website, both in German

and English. The website also contains extensive inormation

on our share buyback programs, corporate structure, manage-

ment, and strategy, in addition to providing details on corpo-

rate governance and our Annual General Meetings.

Analyst Coverage. At the end o the fscal year under

review, the Company was ocially covered by 22 fnancial an-

alysts, who issue comments and recommendations on a regu-

lar basis. These analysts are (in alphabetical order):

Bank o America Merrill Lynch, Bankhaus Lampe, Beren-

berg Bank, Cheuvreux, Commerzbank, Deutsche Bank, DZ Bank,

equinet Bank, Fairesearch, Goldman Sachs, HSBC Trinkaus &

Burkhardt, Kepler Capital Markets, LBBW, MainFirst, Metzler

Equity Research, M.M. Warburg, Nord/LB, Silvia Quandt Research,

UBS, Unicredit, Wedbush Morgan Securities, and WestLB.

Annual General Meeting. Shareholders attending the

Annual General Meeting (AGM) o Wincor Nixdor AG in Pader-

born, Germany, on January 24, 2011, represented over 68% o

the Companys voting rights. All resolutions on the agenda

were passed with very large majorities.

The next Annual General Meeting is scheduled to take

place in Paderborn on January 23, 2012.

Details concerning

Directors Dealingsat www.wincor-

nixdorf.com,Section: Investor

Relations

Next AGM:January 23, 2012


15/156


Dividend Remains Stable. For fscal 2009/2010, we

paid a dividend o 1.70 per share. For fscal 2010/2011, the

Board o Directors and the Supervisory Board intend once again

to propose a dividend o 1.70 per share to the Annual General

Meeting. This represents a dividend yield o 5.03% based on

the fscal year-end price o Wincor Nixdor stock.

This means that the Board o Directors will again ollow

the dividend strategy established at the time o otation, ac-

cording to which around 50% o proft or the year would be

distributed to shareholders.

Development of Dividend.

Fiscal year 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11

3.00

2.50

2.00

1.50

1.00

0.50

Change on previous year +72% +33% +34%1 +13% 13% 8% 0%

1) Including extra dividend +99%.2)Proposed dividend.

0.61

0.90

1.881.051.40

2.78

2.13

1.85 1.70 1.702

Treasury Shares. On August 3, 2010, the Board o Direc-

tors o Wincor Nixdor AG adopted a resolution to buy back

up to 400,000 shares in the Company through the stock ex-

change in the period between August 3 and November 3, 2010.

This decision ollowed the corresponding authorization given by

the AGM to repurchase the Companys own shares. The Com-

pany repurchased the remaining 106,709 shares under this

program at an average price o 48.17 between October 1 and

October 6.

On May 4, 2011, the Board o Directors o Wincor Nixdor

AG adopted a resolution to buy back up to 1,737,569 shares in

the Company through the stock exchange in the period between

May 4 and September 30, 2011. This decision ollowed the cor-

responding authorization given by the AGM to repurchase the

Companys own shares. The stock buy-back program was com-

pleted on June 16, 2011. In total, 1,737,569 shares were acquired

at an average price o 48.35. The repurchased shares are in-

tended or all purposes admitted by the law and covered by the

authorization given by the AGM, in particular to ulfll the

Companys obligations in respect o the share options already

issued or to be issued to members o the Board o Directors,

other managerial sta, and employees o the Company and/or

subordinate associated companies.

At the end o the reporting period, the Company held a total

o 3,308,498 treasury shares, equivalent to 9.99% o its share

capital, as a result o repurchase programs rom fscal 2006/

2007 up to 2010/2011.


16/156

12 Letter to Shareholders Management StockCorporate Governance

Supervisor y Board Report Magazine Responsibil ity Statement

Essential basis for commercial succes s Construc tive dialog between Board of Directors

and Supervisory Board Open communication with shareholders and stakeholders Com-

pliance as a fundamental management task Well-functioning risk management system as

a prerequisite for responsible governance Detailed account of annual compensation for

Board of Directors and Supervisory Board

Corporate Governance and Compensation Report.

At Wincor Nixdor, responsible, transparent business manage-

ment and control centered on the creation o sustained added

value is considered an essential basis or commercial success.

Indeed, corporate governance has been an integral element o

management or many years. The Board o Directors and the

Supervisory Board have issued the statutory statement o com-

pliance in accordance with Section 161 o the German Stock

Corporation Act (Aktiengesetz AktG), stating that, with the

exceptions specifed therein, Wincor Nixdor complies with all

the recommendations o the German Corporate Governance

Code. Adherence to this Code is monitored by the Board o Di-

rectors and the Supervisory Board. Issued annually, the state-

ment o compliance is permanently available to all sharehold-

ers on the Internet at www.wincor-nixdor.com under the

heading o Investor Relations.

Close Collaboration between Board of Direc-

tors and Supervisory Board. A relationship based on

close collaboration and mutual trust exists between the Board

o Directors and the members o the Supervisory Board. The

Board o Directors reports regularly to the Supervisory Board on

the progress o business activities. There is also an ongoing and

constructive dialog concerning strategy, corporate planning,

and Company proftability. For urther details, please reer to

the Supervisory Board Report.

The Supervisory Board convened fve scheduled meetings in

the fscal year under review. In addition, it held one extraordi-

nary meeting during this period. The report prepared by the Su-

pervisory Board contains urther details o board meetings con-

vened over the course o the fscal year. The Supervisory Board

has established our committees: a Mediation Committee, pur-

suant to Section 27 (3) o the German Co-Determination Act

(Mitbestimmungsgesetz MitbestG); a Personnel Committee,

dealing especially with the preparation o sta issues that per-

tain to the Board o Directors as well as with the preparation

o the compensation structure or the Board o Directors; a

Nomination Committee, responsible or preparing the candi-

date proposals put orward by the Supervisory Board to the An-

nual General Meeting or the subsequent Supervisory Board

elections; and an Audit Committee. No conicts o interest

arose among members o the Board o Directors and members

o the Supervisory Board.

TRANSPARENCY AND COMPL IANCE.

Internal and Ex ternal Transparenc y. Wincor Nixdor

is committed to providing comprehensive, continuous and

prompt inormation in its communications with the Companys

shareholders. As regards the Annual General Meeting o Share-

holders (AGM) on January 23, 2012, we will again appoint a

proxy vote representative so that shareholders not attending

the AGM can be given the opportunity to exercise their voting

rights. Shareholders will be able to issue their instructions via

the Internet prior to the AGM.

With a view to ensuring prompt and open communication

with the public, we provide detailed documents and inorma-

tion on our website. This includes AGM inormation, fnancial

reports, current ad hoc announcements, and press releases. Our

online content also includes the Companys Articles o Asso-

ciation, the Code o Conduct and inormation on Directors

Dealings.

Compliance.

For Wincor Nixdor AG, responsible and lawul conduct is a pre-

requisite or quality, business success, and sustainable corporate

development. The Board o Directors thereore regards compli-

ance as a undamental management task and has pledged in

its compliance statement to respect the law, while expressly

acknowledging the need or lawul, social, and ethical conduct.

Wincor Nixdor has designed a Compliance Management

System (WN CMS) tailored to the requirements o an interna-

www.wincor-nixdorf.com,

heading: InvestorRelations

Directors Dealings,for further

information visitwww.wincor-nixdorf.com,

heading: InvestorRelations

SupervisoryBoard Report,

see page 22 et seq.


17/156


tional group. This involves determining compliance targets and

the overall ocus o the CMS, in particular the promotion o

a avorable compliance culture; establishing compliance as

a strategic developmental and procedural structure; analysis

o compliance-relevant stakeholder relationships; the process

o devising the compliance program; and the development o

communication and qualifcation processes, rom measures to

identiy potential breaches through to the ongoing develop-

ment o the CMS.

Aims of the CMS. The WN CMS is an organizational

model integrated into the strategic and operational business

and based on values. Its purpose is to ensure ongoing compli-

ance with the law and internal rules. The overarching objective

is to ensure that the Companys managing bodies and employ-

ees conduct themselves within legal constraints and in line

with internal rules in order to minimize liability risks, avoid f-

nancial and indirect damage to the enterprise, and strengthen

its market and public reputation.

Focus on Values and Corporate Culture. Corpo-

rate culture is a key aspect o an ecient CMS. A corporate

and management culture that ocuses not only on compliance

with the law but also on values such as transparency and air

competition provides a solid ramework to guide the actions o

all those who belong to the Company when dealing with di-

cult situations. It helps to protect the Company against dam-

age through breaches o the law or internal rules by Company

personnel, enhances its reputation and boosts its long-term

competitiveness. The core mechanisms o the WN CMS are the

Code o Conduct, which reects the value-based corporate cul-

ture o the Group and is binding on its entire international

workorce, and the Code o Conduct or Wincor Nixdors sup-

pliers, which is integrated into purchasing contracts. A number

o additional rules (e.g., the Corporate Hospitality Guide) have

also been released to provide guidance on issues such as gits,

entertainment, and invitations.

A great deal o importance is attached to our regular com-

pliance training courses, based partly on attended sessions and

partly online. Our existing communications program was also

maintained over the reporting period. This includes our quarterly

compliance newsletter and the compliance portal on the Wincor

Nixdor intranet. Furthermore, the Compliance Ocer is avail-

able to advise employees on all matters relating to the WN CMS.

Structure. At Wincor Nixdor, the overall compliance struc-

ture has two key elements. On the one hand, Compliance Man-

agement is linked to our business activities so that it remains

an ongoing and integral part o existing processes; at the same

time, we have developed a Compliance Ocer System that sup-

ports management by implementing and carrying out compli-

ance measures.

As long ago as 2007, Wincor Nixdor appointed a Chie Com-

pliance Ocer (CCO) at holding level with authority to report

directly to the Board o Directors and the Audit Committee o

the Supervisory Board. The Compliance Ocer is responsible or

coordinating and managing the global implementation and

monitoring o compliance measures and or ongoing develop-

ment o the WN CMS. The role o the local compliance ocers

(Local COs) appointed within Group companies is to ensure

that the CMS is implemented and observed at regional level

and to report back to the CCO.

A CMS checklist devised in the last fscal year now makes

it possible or Local COs to conduct regular checks on their re-

gionally implemented CMS in order to identiy any need or im-

provement.

The WN CMS is subject to an ongoing process o develop-

ment to ensure that we can respond to changes in the legal

and economic conditions governing our international business.

Either directly or indirectly, the Board o Directors and the

Supervisory Board hold shares or options in Wincor Nixdor AG

equivalent to more than 1% o the Companys share capital.

Together, the members o the Board o Directors hold 1.64%

and the members o the Supervisory Board 0.27% o the Com-

panys share capital.

Details o Directors Dealings pursuant to Section 15 a o

the German Securities Trading Act (Wertpapierhandelsgesetz

WpHG) can be downloaded rom the Investor Relations section

o the Companys website.

A list o all third-party entities in which Wincor Nixdor AG

holds an interest deemed to be not o minor signifcance has

been included in the annual fnancial statements o Wincor

Nixdor AG. The annual fnancial statements o Wincor Nixdor

AG are published, among other places, on the Companys

website.

RISK MANAGEMENT SYSTEM FOR VALUE-

LED CORPORATE MANAGEMENT.

Responsible corporate governance is dependent on a properly

unctioning risk management system. The risk management

system implemented by Wincor Nixdor is geared toward meet-

ing the practical requirements o our business. It is designed to


18/156

14

highlight risks at an early stage and to help avoid or limit them

where they occur. Further details are provided in the Group

Management Report in the section entitled Risk Report.

EXCEPTIONS TO THE

CORPORATE GOVERNANCE CODE.

Under Section 161 o the German Stock Corporation Act (Ak-

tiengesetz AktG), the Board o Directors and the Supervisory

Board o stock exchange-listed companies are obliged to issue

a declaration each year stating that the recommendations o

the Code o the Government Commission on German Corpo-

rate Governance, as published by the German Federal Ministry

o Justice in the ocial section o the Federal Gazette (elec-

tronic version), have been and are being met. This declaration

must also speciy which recommendations have not been or are

not being applied and why not.

Exceptions to the Corporate Governance Code.

In accordance with Section 161 AktG, the Board o Directors

and the Supervisory Board o Wincor Nixdor AG issued a new

declaration o compliance on November 23, 2011.

I. Since its last declaration o compliance on November 24,

2010, Wincor Nixdor AG has complied with the recom-

mendations o the German Corporate Governance Code, in

the version dated May 26, 2010 (published in the Elec-

tronic Federal Gazette on July 2, 2010), with the fve ex-

ceptions detailed below:

1. At its Annual General Meeting, the Company does not ex-

ercise the option to hold an absentee ballot (postal vote) granted

by its Articles o Association (Section 2.3.3 Sentence 2 GCGC).

Reasons: The GCGC does not actually recommend that

companies oer to hold an absentee ballot; it merely recom-

mends that companies support shareholders in the holding o

an absentee ballot in the event that the Board o Directors de-

cides to make this option available. Following the Annual Gen-

eral Meeting on January 25, 2010, in accordance with the op-

tion granted by Section 118 (2) AktG, Wincor Nixdor AG took

the precaution o introducing a new clause into its Articles o

Association authorizing the Board o Directors to allow an ab-

sentee ballot. However, an absentee ballot does not provide any

recognizable additional beneft to shareholders in the personal

exercise o their rights when compared to the proxy voting ser-

vice oered by Wincor Nixdor AG up to the day o the Annual

General Meeting, under the terms o which proxies are bound

by written or electronic voting instructions. Consequently, the

Board o Directors does not intend to exercise the option o

holding an absentee ballot.

2. The D&O insurance policy agreed by Wincor Nixdor AG

does not eature a policy deductible or the Supervisory Board

(Section 3.8 Paragraph 3 GCGC).

Reasons: The D&O insurance policy agreed by Wincor

Nixdor AG does not eature a policy deductible or the Super-

visory Board, in particular no such deductible o at least 10%

o the damage up to at least one and a hal times the fxed

annual remuneration. The D&O insurance policy was taken out

or a signifcant number o management sta across the entire

Wincor Nixdor Group, at home and abroad, including members

o the Companys boards. When the policy agreement was

signed, it did not appear proper to dierentiate between Board

members and other management sta; equally there was no

legal requirement to do so. Eective rom July 1, 2010, only

insurance policies or members o the Board o Directors were

to be amended pursuant to Section 93 (2) Sentence 3 AktG

in conjunction with Section 23 (1) Sentence 1 o the Introduc-

tory Act to the Stock Corporation Act (Einhrungsgesetz zum

Aktiengesetz EGAktG). There is no stipulation in the legislation

(Section 116 Sentence 1 AktG) o a mandatory policy deduct-

ible or the Supervisory Board; indeed, the Supervisory Board is

specifcally exempted rom such a mandatory policy deductible.

Given the nature o the role o the Supervisory Board, which is

also clear rom that Boards dierent remuneration structure,

this distinction in the treatment o the Board o Directors and

the Supervisory Board appears commensurate, especially since

the insurance policies have not been changed or other senior

managers. Consequently, it does not appear proper to extend

the policy deductible in the D&O insurance policy held by

Wincor Nixdor AG to members o the Supervisory Board.

3. The contracts o members o the Board o Directors o

Wincor Nixdor AG did not contain rules on severance pay-

ments in the event o the early termination o a members ser-

vice by the Company without good cause (Section 4.2.3 Para-

graph 4 GCGC).

Reasons: The contracts o members o the Board o Direc-

tors o Wincor Nixdor AG did not contain rules on severance

payments in the event o the early termination o a members

service by the Company without good cause. Since the early

termination o a members service by either party presupposes

the existence o good cause and Wincor Nixdor regularly con-

cludes and maintains service contracts or members o the

Board o Directors or the duration o their period o oce in

line with the German Stock Corporation Act, no such rules on

Letter to Shareholders Management Stock

Corporate GovernanceSupervisor y Board Report Magazine Responsibil ity Statement


19/156


severance payments were applied in the past. To avoid the need

to declare a departure rom Section 4.2.3 Paragraph 4 GCGC,

the service contracts o members o the Board o Directors

have now been amended to include a corresponding provision

or a settlement cap in the event o the early termination o a

members service without good cause. The provision makes re-

erence to Section 4.2.3 Paragraph 4 GCGC.

4. In setting the level o remuneration paid to members o

the Supervisory Board, no account is taken o chairmanship o

any committee other than the Audit Committee, or o member-

ship o any o the Supervisory Board committees (Section 5.4.6

Paragraph 1 Sentence 3 GCGC).

Reasons: Remuneration or mere membership o a commit-

tee is deemed unnecessary. As regards the activities o the Su-

pervisory Board, practice has shown that the vast majority o

committee meetings are scheduled to coincide closely with

meetings o the Supervisory Board itsel. Chairmanship o the

Audit Committee is remunerated separately due to the addi-

tional time and eort required by the role.

5. Members o the Supervisory Board are not paid any per-

ormance-related remuneration in addition to their fxed emol-

uments (Section 5.4.6 Paragraph 2 Sentence 1 GCGC).

Reasons: In the Companys view, a fxed remuneration or

members o the Supervisory Board is more appropriate given

that the bodys supervisory unction is independent o the

Companys perormance.

II. Wincor Nixdor AG will, in uture, comply with the rec-

ommendations o the Code o the Government Commission

on German Corporate Governance in the version dated

May 26, 2010 (published in the Electronic Federal Gazette

on July 2, 2010), with the ollowing our exceptions:

1. At its Annual General Meeting, the Company does not

exercise the option to hold an absentee ballot (postal vote) as

granted by its Articles o Association (Section 2.3.3 Sentence 2

GCGC).

Reasons: See above under I. 1.

2. The D&O insurance policy agreed by Wincor Nixdor AG

does not eature a policy deductible or the Supervisory Board

(Section 3.8 Paragraph 3 GCGC).


3. In setting the level o remuneration paid to members o

the Supervisory Board, no account is taken o chairmanship o

any committee other than the Audit Committee, or o member-

ship o any o the Supervisory Board committees (Section 5.4.6

Paragraph 1 Sentence 3 GCGC).


4. Members o the Supervisory Board are not paid any peror-

mance-related remuneration in addition to their fxed emolu-

ments (Section 5.4.6 Paragraph 2 Sentence 1 GCGC).


OBJECTIVES OF THE SUPERVISORY BOARD

IN RELATION TO ITS COMP OSITION

CURRENT STATE OF IMPLEMENTATION.

According to Section 5.4.1 Sentence 5 GCGC, the Corporate

Governance Report should contain details o the specifc objec-

tives o the Supervisory Board in relation to its composition

and with due regard or the organizations international activ-

ities, potential conicts o interest, the stipulation o an age

limit or members o the Supervisory Board, and diversity, the

latter especially in terms o achieving an appropriate level o

involvement o women. The report should also evaluate the

state o implementation o these objectives.

To this end, at its meeting on September 27, 2011, the Su-

pervisory Board set out its objectives in relation to the compo-

sition o the Board as ollows:

As required by the German Co-Determination Act, the Su-

pervisory Board o Wincor Nixdor AG is made up o six share-

holder representatives and six employee representatives.

A ballot to elect the six employee representatives on the

Supervisory Board was held on December 89, 2010, with the

result that the end o their terms o oce will coincide with

the end o the Annual General Meeting in January 2016. Nei-

ther the Supervisory Board nor the Company exerted any inu-

ence on the proposals or election. The Supervisory Board or, at

a preliminary stage, its Nomination Committee may only exert

an inuence on the election o the six shareholder representa-

tives through its right to propose candidates to the Annual

General Meeting.

Objectives:

The specifc objectives or the composition o our Supervisory

Board are thereore limited to the composition o the six share-

holder representatives:

a) With regard to the international activities o the

Company. The international activities o Wincor Nixdor AG

have previously been taken into account in the composition o

the shareholder representatives on the Supervisory Board and

will continue to be taken into account when the Supervisory


20/156

16

Board submits candidate proposals to the Annual General

Meeting. The key actors here are a knowledge o spoken and

written English, proessional experience (either in management

or on another supervisory body) in other German or oreign

companies o a comparable size with an international presence,

and an understanding o global economic issues in relation to

manuacturing, sales, or services. This requirement or candi-

dates to have an international profle does not necessarily

mean that the Supervisory Board should include one or more

oreign nationals. German citizens can also provide the desired

international experience, e.g., as a result o time spent working

in another country.

b) Avoiding potential conicts o interest. Potential con-

icts o interest are avoided at an early stage when the Super-

visory Board submits its proposed candidates to the Annual

General Meeting. With the exception o the Chairperson o the

Supervisory Board, who held the position o Chie Executive O-

fcer o Wincor Nixdor AG up to January 29, 2007, no other

ormer members o the Board o Directors o Wincor Nixdor or

ormer Wincor Nixdor general managers serve on the Supervi-

sory Board as shareholder representatives. When it submits the

names o proposed candidates to the Annual General Meeting,

the Supervisory Board ensures that the candidates in question

do not perorm a managerial, advisory, or supervisory role on

behal o one o the Companys competitors, suppliers, lenders,

or customers. This avoids conicts o interest rom the outset.

In the event that a conict o interest arises during the period

o oce o a member o the Supervisory Board, the person in

question is required to disclose that conict to the Supervisory

Board via the Chairperson and, providing the conict o inter-

est is signifcant and not just temporary, to stand down.

c) Stipulation o an age limit. The age limit, i.e., the ex-

piry o a serving members term o oce at the end o the An-

nual General Meeting ater which that person reaches the age

o 70, is already stipulated in the Companys Articles o Associ-

ation (Article 7 Paragraph 6).

d) With regard to diversity. Due regard must be given to

issues o diversity in the composition o the Supervisory Board.

In particular, the Supervisory Board must provide or an appro-

priate level o emale representation. At present, the Supervi-

sory Board is made up o one emale and eleven male members.

Diversity is reected in the varying proessional careers and

activities o shareholder representatives and in terms o the

Boards international profle their dierent international ex-

periences. In cases where male and emale candidates are

equally qualifed and suitable, due regard should be given to

the appointment o a emale candidate. The Company aims to

ensure that there continues to be at least one emale member

o the Supervisory Board.

State of Implementation of Objectives:

Details o the current state o implementation o the objectives

presented above under a) to d) or the composition o the Su-

pervisory Board are given below:

The objectives relating to a) With regard to the interna-

tional activities o the Company, b) Avoiding potential conicts

o interest, and c) Stipulation o an age limit have already

been met. Objective d) Diversity including the appropriate par-

ticipation o emale representatives on the Supervisory Board

is given due consideration by the Boards Nominations Com-

mittee when it looks or suitable candidates to replace share-

holder representatives who leave the Board. Unortunately, no

emale candidate with appropriate international experience

was available out o the pool o suitable candidates or inclu-

sion in the Boards proposal to the Annual General Meeting on

January 23, 2012, or the election and appointment o two new

members; however, the Nominations Committee and the Super-

visory Board have set a target o continuing to look or suitable

emale candidates as shareholder representatives on the Board.

AUDIT OF GROUP FINANCIAL

STATEMENTS BY KPMG.

The Group fnancial statements o Wincor Nixdor AG or the

fscal year ended September 30, 2011, have been prepared in

accordance with International Financial Reporting Standards

(IFRS) as applicable in the European Union, supplemented by the

statutory requirements laid out in Section 315a (1) o the Ger-

man Commercial Code (HGB). The consolidated fnancial state-

ments have been audited by the accountancy frm KPMG AG.

COMPENSATION REPORT.

The inormation contained in the compensation report orms an

integral part o the Group Management Report. Thereore, the

Notes to the Group fnancial statements include no additional

presentation o details discussed as part o the compensation

report.

The compensation report outlines the key principles applied

when determining remuneration levels or the Board o Direc-




21/156


tors o Wincor Nixdor AG. It also describes the structure and

level o compensation or the Board o Directors. In addition,

it details the principles and level o Supervisory Board compen-

sation.

The compensation report has been prepared in conormity

with the recommendations o the German Corporate Gover-

nance Code (in the version o May 26, 2010) and includes in-

ormation which, in accordance with the requirements o Ger-

man commercial law, amended by the Act on the Disclosure o

Management Board Compensation (Gesetz ber die Oenle-

gung der Vorstandsvergtungen VorstOG) o August 3, 2005,

orms an integral part o the Notes to the Group fnancial

statements pursuant to Section 314 o the German Commercial

Code (Handelsgesetzbuch HGB) and the Group Management

Report pursuant to Section 315 HGB.

System of Compensation for the Board of Di-

rectors. The Supervisory Board o Wincor Nixdor AG, acting

on the recommendations o its Personnel Committee, which

deals with the employment contracts o members o the Board

o Directors, determines the overall level o compensation or

each member o the Board o Directors. Additionally, it regu-

larly reviews and makes decisions relating to the compensation

system or the Board o Directors, as well as the appropriate-

ness o total compensation payable to each member o the

Board o Directors, including all signifcant elements within the

contract. The requirements o the Act on the Appropriateness

o Management Board Compensation (Gesetz zur Angemessen-

heit der Vorstandsvergtung VorstAG) dated July 31, 2009,

have been met with regard to existing employment contracts

and to the extension o employment contracts with members

o the Board o Directors.

The compensation o members o the Board o Directors o

Wincor Nixdor AG is determined on the basis o the Companys

size and global presence, its economic and fnancial situation

as well as the level and structure o management board com-

pensation oered by similar companies based in Germany and

abroad. In addition, the duties, contribution and perormance

o each member o the Board o Directors are taken into ac-

count. The level o compensation is designed to be competitive

within the market or highly qualifed executives and to provide

incentives or successul work that contributes in turn to the

organizations sustained development as part o a high-peror-

mance culture. Wincor Nixdor AG regularly takes part in remu-

neration reviews relating to both its own industry and other

MDAX enterprises, with the express purpose o ensuring hori-

zontal comparability o Board o Director compensation. Fur-

thermore, when determining compensation levels or its Board

o Directors, the pay scale and remuneration system within the

Wincor Nixdor Group are taken into account (verticality).

The remuneration o the Board o Directors is ocused on per-

ormance and comprises the our components described below:

1. Fixed basic salary plus ringe benefts

2. Variable compensation (bonus) dependent on the attainment

o specifc targets (short-term perormance-based component)

3. Share-based compensation (long-term incentive component)

4. Pension commitment

Within this context, the fxed basic salary, the ringe ben-

efts and the pension commitment represent non-perormance-

based components. The fxed basic salary is payable in monthly

installments o equal amounts. The ringe benefts mainly com-

prise contributions made to accident and liability insurance pol-

icies as well as the provision o a company car. Additionally, all

members o the Board o Directors o Wincor Nixdor AG are

entitled to retirement benefts, as described in detail in the

section entitled Pension Commitments.

Variable, perormance-based compensation payable in the

orm o a bonus is dependent on the attainment o specifc tar-

gets defned within the respective employment contracts. These

targets are set on the basis o EBITDA (earnings beore interest,

taxes, depreciation, and amortization) and Group net income.

Each target receives the same weighting and is settled sepa-

rately. I the agreed budget per target is met in ull (100%),

the member o the Board o Directors receives 100% o his/her

annual fxed basic salary as a bonus. I he/she alls short o the

agreed budget by a maximum o 20%, the bonus is reduced on

a straight-line basis. I the specifed targets are met to an ex-

tent equivalent to 80%, the member o the Board o Directors

receives 25% o the agreed bonus. I the level o target attain-

ment remains below 80% with regard to one o the two targets,

the entitlement to a bonus payment is no longer applicable; in

this case, the Supervisory Board must decide, as in duty bound,

on the granting o a bonus and the possible extent o such

a bonus. I the level o target attainment reaches 120%, the

associated bonus rises to 175% o the applicable fxed basic

salary o the Board member in question. In accordance with

contractual requirements, variable compensation may be equiv-

alent to a maximum o 200% o the respective fxed annual

basic salary. All targets are ocused on increasing enterprise

value. The targets to be applied as a basis or calculating the

bonus amounts payable or fscal 2010/2011 were defned at

the Supervisory Board meeting o September 21, 2010. The bo-

nus is payable in December ollowing adoption o the Group

fnancial statements by the Supervisory Board.


22/156

18

Members o the Board o Directors receive share options as a

orm o compensation with a long-term incentive eect. For

each member o the Board o Directors, the share-based com-

pensation as a long-term incentive component should lie be-

tween 30% and 40% o target annual income. The remainder

should be derived rom the members fxed annual salary and

pension commitment (35%50%) and rom variable compen-

sation (20%35%) (bonus). Full details are established by the

Supervisory Board.

The non-perormance-based and short-term, perormance-

based components o compensation are itemized below and re-

late to all duties perormed by the members o the Board o

Directors within the Group:

The perormance-related payments or the fscal years shown

in the table take into account dierences between the accrued

amounts at the corresponding reporting dates and the amounts

actually paid out in the subsequent periods.

Share-based Compensation (Long-term Incen-

tive Component). Starting in fscal 2010/2011 (2011 share

option program), the number o share options granted to mem-

bers o the Board o Directors will no longer be based on indi-

vidual, contractually fxed numbers; henceorth, the number

will be calculated on the basis o the planned ratio o long-term

incentive components to the members target annual income.

In accordance with the requirements o Germanys VorstAG Act,

rom the 2010 share option program onwards the vesting

period or share options is now our years. Please reer to note

16 in the Notes to the Group fnancial statements or ull

details about the range o exercise prices, the remaining term

o the respective options, the average exercise price o the

share options during the exercise period, as well as the condi-

tions o option grant and exercise associated with the share-

based payment programs.

In addition to the perormance target stipulated or other

benefciaries under the program (exercise price per share equals

Non-perormance-based Perormance-based Total

Fixed basic salary Fringe benefts

2010/2011 2009/2010 2010/2011 2009/2010 2010/2011 2009/2010 2010/2011 2009/2010

Eckard Heidlo 550,000.00 550,000.00 35,530.63 33,832.41 746,062.50 456,170.00 1,331,593.13 1,040,002.41

Stean Auerbach 400,000.00 400,000.00 26,956.75 27,221.38 542,250.00 327,760.00 969,206.75 754,981.38

Dr. Jrgen Wunram 400,000.00 400,000.00 19,921.18 20,728.05 542,250.00 327,760.00 962,171.18 748,488.05

Total 1,350,000.00 1,350,000.00 82,408.56 81,781.84 1,830,562.50 1,111,690.00 3,262,971.06 2,543,471.84



Group financialstatements,

note 16,see page 121.

the initial value plus 12%), a urther condition applies to the

exercise o share options held by members o the Board o Di-

rectors and has an impact on the long-term incentive compo-

nent. The number o share options o the annual tranche

granted to members o the Board o Directors is calculated at

the start in such a way that a member can only achieve the ull

amount rom this component o the overall compensation

package, i.e., 100% o the planned sum rom the long-term

incentive component, i the share appreciates in value (yield)

by an average o 6% per year over the entire our-year term o

the share option. Share perormance is calculated in terms o

movements in the share price and the dividend (dividend yield).

Once the number o share options has been calculated in this

way, it can no longer be changed. For the Chie Executive O-

cer, the planned sum rom the long-term incentive component

is 700k and or the remaining members o the Board o Direc-

tors 500k.

I share perormance is below an annual average o 6%

over the entire our-year vesting period or the share option,

this will produce a lower fgure or this component o the

members compensation package. I share perormance is above

an annual average o 6% over the entire our-year vesting pe-

riod or the share option, this will produce a higher fgure or


23/156


this component o the members compensation package. The

contracts o members o the Board o Directors contain appro-

priate provisions to ensure that the amount actually received

by a member in respect o the long-term incentive component

does not unduly exceed the planned compensation rom this

component o the overall package. A subsequent adjustment is

possible i three times the amount o a Board members planned

annual compensation is exceeded when viewed over a fve-year

period.

On this basis, the sums payable to each member o the

Board o Directors rom long-term incentive components are as

ollows:

The total value o the share options at the date o granting was

determined by means o the Black-Scholes-Merton options pric-

ing model. Thus, the reported value o share-based compensa-

tion is merely to be seen as an amount derived rom mathe-

matical calculations. Whether the share-based compensation

components associated with the current 2010 and 2011 pro-

grams result in a payment, and i so, to what extent, will depend

on the uture perormance o the Companys share price and

the stock market price applicable during the exercise period.

The table below details the share options held as at Sep-

tember 30, 2011, by each member o the Board o Directors un-

der each share-based payment program:

in units

2011 2010 Total

Eckard Heidlo 81,666 60,000 141,666

Stean Auerbach 58,333 30,000 88,333

Dr. Jrgen Wunram 58,333 44,000 102,333

Total 198,332 134,000 332,332

The share options are not exercisable as at September 30, 2011.

In the year under review, the share options granted under the

2009 share-based payment program were exercised at an aver-

age price o 61.19. The Board o Directors exercised a total o

Amount otarget annual income

attributable to long-termincentive component1

Number oshare options

Black-Scholes-Merton options pricing model

Value pershare option2

Total value o compen-sation component with

long-term incentive eect2

Eckard Heidlo 700,000.00 81,666 9.73 794,610.18

Stean Auerbach 500,000.00 58,333 9.73 567,580.09

Dr. Jrgen Wunram 500,000.00 58,333 9.73 567,580.09

Total 1,700,000.00 198,332 1,929,770.36

1)Target value in .2) In , on date granted.

134,000 share options (Eckard Heidlo 60,000, Stean Auer-

bach 30,000, and Dr. Jrgen Wunram 44,000). The share options

granted under the 2009 program were serviced using treasury

shares. As at September 30, 2011, they were still held by the

members o the Board o Directors in question.

The personnel expenses recognized in connection with the

share-based payment programs rom 2008 to 2011 are distrib-

uted among the Board members as ollows:

2010/2011 2009/2010

Eckard Heidlo 307,849.00 422,100.00

Stean Auerbach 172,825.00 211,050.00

Dr. Jrgen Wunram 224,076.00 309,540.00

Total 704,750.00 942,690.00

Pension Commitments. The retirement beneft system

in place or the respective members o the Board o Directors is

based on a one-time payout or installment payments. They are

entitled to the pension payments when reaching the age o 60.

However, should a member remain on the Board o Directors in

an active capacity beyond this period, the receipt o retirement

benefts will only be possible as rom the end o his/her em-

ployment contract as a member o the Board o Directors.


24/156

20

The pension benefts awarded to members o the Board o Di-

rectors at the end o the reporting period and the allocations

made to retirement accruals are as ollows:

Retirement capital

Total Allocations in fscal year

Sept. 30, 2011 Sept. 30, 2010 2010/2011 2009/2010

Eckard Heidlo 700,110.30 555,116.60 126,082.00 126,082.00

Stean Auerbach 819,946.00 599,946.00 100,000.00 50,000.00

Dr. Jrgen Wunram 626,200.00 506,200.00 100,000.00 100,000.00

Total 2,146,256.30 1,661,262.60 326,082.00 276,082.00

In the event o permanent incapacity to perorm his/her duties,

a member o the Board o Directors will continue to receive his/

her fxed basic salary in monthly installments or a period o up

to 18 months; additionally, bonus entitlements will be paid (to

the extent that the targets are attained) or six months rom

onset o the illness or the incapacity.

Members o the Board o Directors receive no compensa-

tion or positions held within Group entities.

The contracts or the Board o Directors do not contain any

provisions concerning the termination o the contract in the

event o a change o control.

Remuneration of Former Members of the Board

of Directors. In fscal 2010/2011, the emoluments received

by ormer members o the Board o Directors and their surviv-

ing dependents amounted to 115k in total (2009/2010: 114k).

Provisions in the amount o 1,787k (2009/2010: 1,961k)

have been recognized in connection with pension obligations

towards ormer members o the Board o Directors and their

surviving dependents.

System of Compensation for the Supervisory

Board. Supervisory Board compensation is determined on the

basis o the size o the enterprise, the duties, and responsibili-

ties o Supervisory Board members and the economic situation

o the Company. The provisions relating to Supervisory Board

compensation are specifed in Section 12 o the Articles o

Association o Wincor Nixdor AG, which was most recently

amended on the basis o a resolution passed by the Annual

General Meeting o Shareholders on January 29, 2007, and

came into orce upon entry in the Commercial Register on

March 14, 2007. According to these provisions, the members o



The table shows the one-time pay-o entitlements that mem-

bers o the Board o Directors would receive when reaching the

age o 60, on the basis o the entitlements accumulated up to

the end o each fscal year, as well as the entitlement acquired

in each fscal year that was allocated to pension accruals as

service costs. In the event that the respective members con-

tinue to hold a position on the Board o Directors, the actual

pensions and/or one-time pay-o benefts will be higher than

those presented in the table, particularly as a result o uture

fnancing contributions. The allocations to retirement capital,

as listed in the table, will occur in the same amount in subse-

quent years until the end o the respective contracts or the

members o the Board o Directors and will bear interest o

3.5% per annum.

Miscellaneous. There were no loan arrangements with

members o the Board o Directors in fscal 2010/2011 or 2009/

2010. Furthermore, no benefts o a similar nature were granted.

I the service o a member o the Board o Directors is ter-

minated or good cause either because (in accordance with

Section 626 o the German Civil Code) the Company cancels

that persons service contract beore completion o the period

o oce or the member in question resigns or because that

member is removed or good cause as defned by Section 84 (3)

o the German Stock Corporation Act (Aktiengesetz AktG), un-

der the terms o the service contracts or the Board o Direc-

tors he/she will continue to receive his/her previous fxed basic

salary but no urther variable compensation. In the event that

a members period o oce is terminated early without good

cause, the service contracts o the members o the Board o Di-

rectors include a reerence to the provisions o Section 4.2.3 (4)

o the German Corporate Governance Code (GCGC).


25/156


the Supervisory Board receive a fxed amount o 30,000 as

annual compensation, payable ater the end o the fscal year.

In the case o the Chairperson o the Supervisory Board, com-

pensation is equivalent to three times the annual amount, and

in the case o his/her deputy one and a hal times the annual

amount mentioned above. The Chairperson o the Audit Com-

mittee also receives one and a hal times the annual amount o

compensation. Members o the Supervisory Board whose ap-

pointment to the Board or to one o the above-mentioned

unctions is limited to part o the fscal year shall receive pro-

portionate compensation or each month commenced. In addi-

tion to annual compensation, the members o the Supervisory

Board receive an attendance allowance o 3,000 per day or

meetings o the Supervisory Board and o the committees to

which they are appointed. I a meeting o the Supervisory Board

attended by the member coincides with a meeting o one o

the Supervisory Boards committees, the attendance allowance

is paid or only one such meeting.

The remuneration o individual members o the Supervisory

Board o Wincor Nixdor AG is shown in the ollowing table:

Annual compensation Attendance allowances Total

2010/2011 2009/2010 2010/2011 2009/2010 2010/2011 2009/2010

Karl-Heinz Stiller (Chairman) 90,000.00 90,000.00 24,000.00 27,000.00 114,000.00 117,000.00

Michael Schild* (Deputy Chairman) 41,250.00 30,000.00 21,000.00 15,000.00 62,250.00 45,000.00

Pro. Dr. Achim Bachem 30,000.00 30,000.00 15,000.00 15,000.00 45,000.00 45,000.00

Hero Brahms (Chairman o Audit Committee) 45,000.00 45,000.00 24,000.00 24,000.00 69,000.00 69,000.00

Dr. Alexander Dibelius 30,000.00 30,000.00 15,000.00 15,000.00 45,000.00 45,000.00

Manred Feierabend* (up to January 24, 2011) 15,000.00 45,000.00 6,000.00 27,000.00 21,000.00 72,000.00

Gabriele Feierabend-Zaljec* (since January 24, 2011) 22,500.00 0.00 9,000.00 0.00 31,500.00 0.00

Walter Gunz 30,000.00 30,000.00 15,000.00 15,000.00 45,000.00 45,000.00

Hans-Ulrich Holdenried (since January 24, 2011) 22,500.00 0.00 12,000.00 0.00 34,500.00 0.00

Volker Kotnig* 30,000.00 30,000.00 21,000.00 12,000.00 51,000.00 42,000.00

Thomas Meilwes* 30,000.00 30,000.00 15,000.00 15,000.00 45,000.00 45,000.00

Dr. Bernard Motzko* (up to November 2, 2009) 0.00 5,000.00 0.00 0.00 0.00 5,000.00

Martin Stamm* (since November 2, 2009) 30,000.00 27,500.00 15,000.00 12,000.00 45,000,00 39,500.00

Franz Tlle* (up to January 24, 2011) 10,000.00 30,000.00 9,000.00 27,000.00 19,000.00 57,000.00

Pro. Dr. Harald Wiedmann (up to January 24, 2011) 10,000.00 30,000.00 3,000.00 15,000.00 13,000.00 45,000.00

Carmelo Zanghi* (since January 24, 2011) 22,500.00 0.00 12,000.00 0.00 34,500.00 0.00

Total 458,750.00 452,500.00 216,000.00 219,000.00 674,750.00 671,500.00

* Employee representatives.


26/156

22 Letter to Shareholders Management Stock Corporate GovernanceSupervisory Board Report

Magazine Responsibil ity Statement

In fscal 2010/2011, against a background o overall market recovery at global level, Wincor Nixdor AG achieved an increase

in net sales and maintained an operating proft in line with the previous year. However, it became clear over the reporting

year that the recovery was not yet suciently rooted in our key markets to allow us to generate the improvement in net

sales and proft that we had originally thought possible. Together with the introduction o CINEO, our newly developed and

innovative amily o systems, this presented a major challenge to the Company. The work o the Supervisory Board in the

year under review involved closely monitoring the Companys response to this challenge and the development o business.

The Work of the Superv isory Board. In the fscal year under review, the Supervisory Board o Wincor Nixdor

AG discharged its duties in accordance with statutory requirements, the German Corporate Governance Code, and the

Companys Articles o Association. First and oremost, this task involved advising and monitoring the Board o Directors on

a regular basis in matters concerning the strategic direction and management o the Group. This collaboration was charac-

terized by the act that all decisions o undamental importance to Wincor Nixdor AG and its Group companies were agreed

directly with the Supervisory Board. Receiving comprehensive inormation on a regular and timely basis in the orm o verbaland written reports, the Supervisory Board was inormed by the Board o Directors on all material issues relating to the

corporate planning, strategic direction and development, business perormance, and state o the Group, including risks and

risk management. All business matters o importance to the Company were discussed by the Supervisory Board on the basis

o reports urnished by the Board o Directors.


27/156


In fscal 2010/2011, fve scheduled Supervisory Board meetings were held, at which the Board o Directors inormed the

Supervisory Board about the perormance o the Company. In addition to these fve scheduled meetings, the Supervisory

Board convened on November 8, 2010, or an extraordinary Supervisory Board meeting. The main item on the agenda at this

meeting was a discussion o the key fgures in the fnancial statements and the outlook or fscal 2010/2011 beore the

annual press conerence on November 9, 2010. The fve scheduled Supervisory Board meetings were held on November 24,

2010, and on January 25, May 3, July 27, and September 27, 2011. The average attendance at these meetings o the Super-

visory Board was 94.4%, and no committee members took part in less than hal o the meetings. All meetings were attended

by representatives o the Board o Directors. At the aorementioned meetings, all necessary resolutions were passed on the

basis o documentation prepared in advance. Between each meeting convened by the Supervisory Board, the Board o

Directors inormed the Supervisory Board promptly and comprehensively about important events o particular signifcance

in assessing the position and perormance as well as the overall management o the Company. Furthermore, the Board o

Directors remained in continuous contact with the Supervisory Board and inormed it about the current business positionas well as signifcant occurrences, developments, and decisions.

At its meeting on September 27, 2011, the Supervisory Board conducted a sel-assessment in order to examine the

eciency o its activities.

Key Areas of Deliberation by the Supervisory Board. At its individual meetings, the Supervisory Board

regularly examined the business, net sales, and earnings perormance o the Group and its segments, as well as cash ows,

implementation o the strategic ocus, and HR development. It also discussed measures to exploit potential growth while

improving eciency and reducing costs, including the continued successul implementation o our strategic ProFuture

program, which was launched in 2009, our cost-reduction program ProImprove, and other initiatives or change, with a

particular ocus on generating stronger regional growth in the emerging market regions o Asia/Pacifc/Arica and Latin

America.

In addition, the Supervisory Board discussed proposals to approve the issue o share options to members o the Board

o Directors and employees (2011 tranche) and the repurchase o Company shares.

At its meeting on July 27, 2011, the Supervisory Board adopted a proposal to extend the term o oce o President &

CEO and member o the Board o Directors Eckard Heidlo, which was due to expire on January 28, 2012, by a urther fve

years, up to and including January 28, 2017. At the same meeting, the Supervisory Board also agreed to extend the term o

oce o member o the Board o Directors Dr. Jrgen Wunram, which was due to expire on February 28, 2012, also by a

urther fve years, up to and including February 28, 2017. At its meeting on September 27, 2011, the Supervisory Board gave

its approval to the fscal 2011/2012 budget proposed by the Board o Directors and to the medium-term strategic business

development plan. In addition, the Supervisory Board drew up objectives in relation to its own composition with regard to

diversity and examined the current state o implementation. Details can be ound in the Corporate Governance Report inthis Annual Report.

Committee Work. The Supervisory Board is supported in its duties by our committees established by this body. These

committees are responsible or preparing the ground or Supervisory Board resolutions and examining issues subsequently

to be addressed in plenary sessions. Furthermore, the Supervisory Board has delegated decision-making authority to the

committees within specifc areas.

With the exception o the Audit Committee, which is chaired by Supervisory Board member Hero Brahms, the commit-

tees are presided over by the Chairman o the Supervisory Board.

CorporateGovernance Report,see page 12 et seq.


28/156

24

The Audit Committee convened on three occasions during the fscal year under review. The main ocus o its work was on

examining the annual accounts and Group fnancial statements o Wincor Nixdor AG and the budget or fscal 2011/2012.

Other issues addressed were the Companys risk report and risk management policy, reporting by Internal Audit, and measures

aimed at urther extending the corporate compliance program.

The Personnel Committee met on July 27, 2011, to discuss the extension o the terms o oce o Eckard Heidlo and

Dr. Jrgen Wunram on the Board o Directors, the corresponding adjustments to their employment contracts, and the

compensation payable to the Board o Directors.

During the year under review, the Nomination Committee convened on July 27, 2011, to prepare a proposal o the

Supervisory Board to the Annual General Meeting on January 23, 2012, concerning the election o two shareholder repre-

sentatives to the Supervisory Board.

There was again no need to convene the Mediation Committee during the fscal year just ended.

Corporate Governance and Declaration of Conformity. With regard to Corporate Governance, this Annual

Report contains a separate section with a report by the Board o Directors, issued also on behal o the Supervisory Board,

pursuant to Section 3.10 o the German Corporate Governance Code. On November 23, 2011, the Board o Directors and the

Supervisory Board issued an updated Declaration o Conormity pursuant to Se

WN FY201011 Annual Report

Documents

Transcript of WN FY201011 Annual Report