You can still find NCR at the nexus of people and money. Born during the waning days of the Wild West as National Cash Register, NCR is a leading maker of ATMs. The company also makes point-of-sale (POS) terminals, bar code scanners, and related printer consumables. Other retail and financial systems offerings include check image processing systems and self-service kiosks for hospitality, retail, and travel applications. NCR's services segment provides maintenance and support, as well as professional services such as systems integration and managed services. NCR, which facilitates more than 550 million transactions daily, does business in more than 180 countries. About 60% of its sales are generated outside the US.
The company's largest segment, financial services, represents about 50% of sales and includes ATMs and payment processing hardware and software. Its retail solutions segment accounts for about a third of total sales and includes POS terminals and bar-code scanners. The hospitality and emerging industries segments -- which include POS hardware and software for restaurants and sports/entertainment venues and products and services for the manufacturing, travel, and gaming industries, respectively -- bring in the remaining revenue.
The US is NCR's largest market, accounting for 41% of sales, with the Americas as a whole contributing about 50%. Europe and the AMEA (Asia, Middle East, and Africa) region each account for about a quarter of revenue. The company saw growth across all regions, except the Americas outside the US. The US market grew 14%.
NCR has manufacturing facilities in Australia, Austria, Brazil, China, Hungary, India, and the US.
Sales and Marketing
The company's products and services are marketed primarily through a direct sales force, although it does, to a lesser degree, tap a network of distributors and resellers.
NCR reported revenue of about $6.6 billion in 2014, an 8% increase from the prior year, marking the fifth consecutive year of rising sales for the company. Despite the rise in sales, net income fell 57% over the same period to $191 million on higher expenses. The rise in revenue was driven by double-digit growth in NCR's financial services, and upticks in the hospitality and emerging industries segments. Retail solutions revenue ticked 1% lower. The company continued to operate as its own ATM in 2014, generating 86% more cash ($524 million) than it did in 2013.
In a major strategic move, NCR in 2014 expanded in China via a partnership with Shanghai Anmao Information Technology Co. to put point-of-sale technology in retail outlets across the country. China, along with Brazil, India, and Russia, and key emerging markets for NCR.
In 2014 NCR formalized the shift of its business toward software-based consumer transaction technologies. It began a restructuring designed reallocate resources to reorient its focus on businesses with opportunities for higher growth and bigger margins. It is rationalizing its product portfolio and phasing out older commodity product lines. The company spent $104 million in 2014 on the restructuring plan, which continued in 2014.
In 2015, NCR rolled out its cloud-based ATM software, called Kalpana. While the ATM still dispenses hard currency, its running on software residing in an NCR data center. Moving ATM operations to the cloud is to reduce costs by 40%, speed up new services offerings, and reduce the impact of malware.
Mergers, Acquisitions and Divestments
Focusing on financial services, the company acquired Digital Insight Corp., a leader in online and mobile banking software, for $1.65 billion in early 2014. It also recently acquired Alaric Systems Ltd., a London-based software firm that provides secure transaction switching and fraud prevention, for about $84 million. Together, the Digital Insight and Alaric purchases extend NCR’s existing capabilities in the banking industry to form a complete enterprise software platform that will deliver across all digital and physical channels - mobile, online, branch, and ATM.
In February 2013, NCR bought the Israeli retail software provider Retalix Ltd. for $791 million. In December 2013, it acquired Alaric Systems Ltd. for about $84 million. Alaric makes secure transaction switching and fraud prevention software. In January 2014, NCR purchased California-based Digital Insight Corp., a provider of online and mobile banking products, for $1.65 billion.