NCR's products don't "ka-ching" anymore, but the company still
registers with people and money. Born in the 1880s as National Cash
Register, NCR is a leading maker of ATMs, point-of-sale (POS)
terminals, bar code scanners, and related printer consumables. Its
other retail and financial systems offerings include check image
processing systems and self-service kiosks for hospitality, retail,
and travel. NCR's services segment provides maintenance and
support, as well as professional services such as systems
integration and managed services. NCR does business in more than
180 countries. International customers generate more than half of
the company's sales. Its products enable more than 650 million
transactions a day.
In 2016, NCR began reporting financial results as solutions
segments rather than line-of-business, reflecting the switch to a
more software-oriented business model. The new segments are
software, services, and hardware.
The company's hardware products, about 40% of revenue, consist
of several lines of automated teller machines (ATMs), cash
dispensers, cash recycling ATMs, and hardware for check and image
processing. Among other hardware products are point-of-sale (POS)
terminals, self-checkout kiosks, order and payment kiosks, bar code
scanners, printers, and peripherals.
NCR's services segment generates 35% of revenue by helping users
get hardware and software up and running and, in some, cases
managing entire systems. The company Predictive Services helps
customers identify and address technology issues.
NCR's software products, accounting for the remaining revenue,
run the company's hardware. Its software platforms include the Cx
Banking self-service ATM software application suite for financial
services, the Retail ONE and Aloha Enterprise software for the
retail and hospitality industries, and NCR Silver, a cloud-based
point-of-sale (POS) system for small businesses.
The US is NCR's largest market, accounting for about 45% of
sales. Europe and the AMEA (Asia, Middle East, and Africa) region
account for more than 30% of revenue. The Asia/Pacific region -
including Japan - generates about 15% of revenue.
The company operates more than a dozen research and development
and manufacturing facilities around the world.
Sales and Marketing
NCR's products and services are marketed primarily through a
direct sales force, although it does tap a network of distributors
Recurring revenue and product revenue each supply more than 40%
of NCR's sales with installation services accounting for 15%.
NCR rebounded with higher revenue and a profit in 2016 after a
sales dip and net loss in 2015. Cash flow from operations also
surged in 2016 from 2015.
Revenue rose about 3% to $6.5 billion in 2016 from $6.4 billion.
The Americas drove the increase with higher sales in hardware,
software, and services. Overall, software and services increased
sales in 2016 while hardware broke even as growth from ATM and
self-checkout machines was offset by declines in point-of-sale and
consumables because of a divestiture. Cloud revenue was up 9% from
previous bookings aided by mobile banking growth.
NCR rang up a $270 million profit in 2016, a turnaround from a
$180 million loss in 2015. The company reduced costs for sales,
general, and administrative functions as well as pension-related
costs. The company spent more on research and development in 2016,
but the amount was consistent with past levels of R&D as a
percentage of revenue.
Higher net income and improvements in working capital pushed
cash flow from operations to $895 million in 2016 from $680 million
NCR is building software, hardware, and services to help
businesses and customer conduct transactions however they want -
what NCR calls the omni-channel experience. That could mean
conducting an ATM transaction with a live teller via video or
checking out of a grocery store without putting items on the
checkout conveyor belt.
Software drives the hardware and that's what NCR emphasizes.
Software can be updated more frequently to provide better
experiences for stores and their customers. But NCR continues to
roll out new ATM and POS hardware. In fact, the company said it
introduced a record number of hardware products in 2016. The costs
associated with the new products reduced NCR's hardware revenue for
the year. The company's service segment gets into the mix by
helping customers make the best use of their hardware and
The company has also improved its business processes including
investing in systems for billings and invoices that helped reduce
its days sales outstanding by six days in 2016.
In 2016, NCR sold its Interactive Printer Solutions Division to
Atlas Holdings. The division provided consumable products that
include stock and custom color-printed paper receipt rolls,
pressure-sensitive labels, impact inking and thermal transfer
ribbons. NCR said the division no longer fit into its
Mergers and Acquisitions
In 2016 NCR acquired CimpleBox Inc., a provider of simplified
Software-as-a-Service-based back office software to small and
medium-sized businesses such as restaurants and retailers.
CimpleBox software helps businesses reduce the time spent on manual
processes, consolidates data and scheduling, and gives managers
more insight into the business and day-to-day operations.