DBD - Earnings call transcript Q3 2021 | Diebold Nixdorf, Incorporated

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Operator

Good morning, good afternoon. Hello, my name is Adam and I will be your conference operator today. At this time I would like to welcome everyone to the Diebold Nixdorf Third Quarter 2021 Earnings Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions] Miss Marchuska, you may begin your conference.

Christine Marchuska

Great. Adam. you, Thank welcome and third XXXX quarter Hello to call. earnings everyone, our Relations Vice-President Nixdorf. Marchuska, Christine for of I’m Investor Diebold And on Jeff the Schmid Officer. [Ph], call with me and Executive today Chief Officer and Rutherford, Financial President Chief are Gerrard accompany and presentation our release corporate To our section Investor earnings prepared have to remarks, posted our press Relations website. the of we this we will webcast. morning, post this Later a replay of

be the you will for will Before participants call, forward-looking all XXXX. I year statements providing this remind the will we guidance statements These including begin, during that hear expectations we full reflect beliefs the differ are to our call, could and subject of of they results management actual materially team from that of but uncertainties cause time as these to statements. and risks this

be annual periodic can should of the Additional render SEC. events Participants out these found filings mindful the information information and that subsequent this date. be may factors company's with be in to on

be GAAP the our I'll today's site, call non-GAAP today's also schedules the of well financial earnings will measures certain release. And in earnings Gerrard. supplemental of hand over on found in as non-GAAP be and as to measures discussing the We between tables presentation Reconciliation now call. can

Gerrard Schmid

changing aren't of to however, by same customer traditional cited happening towards their addressing not functionality. channel the experiences time, consumer customers Good only while And At and more of physical teller of difficult offer process. shopping we options same space. the looking and for self-service purchase with how banks fewer constraints, ATMs as I'm meet are the physical growth better pandemic logistics to navigate branch towards is in broadly, More QX our more to from I at branch embracing, than quarter rapidly customers support There banking despite positioned touch Most are morning, who who demands, opportunities chain expecting that the but window by our our service and spirit Christine. consumers the resulted optimizing footprints, In and the landscapes. are steps competitive consumer is supply XX% for encouraged self and prefer purchases ever, recent omni more in all, solutions challenges. chain reducing options effective of our understand, or supply our are the locations. more through our consumer while retailer, robust and are same customers remained customer committed our making say still for by more studies, including digital, available store, solutions while than to a pleased and it's service, and fewer grocery Thank at headwinds. welcome shifting marketing, of time, workforce time, on-going the flexible, in And inflationary innovative the our deliver banking, practices away In or the to of store. tellers shopping, the during you, that outreach Whether lower growth real I'm and consumer joining solutions. use to our helping our to at It's are XXXX prefer more also consumer you focused are as continue encouraged e-commerce, estate customers for bank, journeys. the Thank in retail, am they crucial. on-going important ever, company needs, the helping consumers the customer providing everyone. call. team. third earnings customer demand level is same ATMs we

much the is Indeed, automation around will install a scanning, signaled the efficiencies RBR, consumer camera I in a short, service and purchases. of to more experience, that self-protection, and provide age We forward done be quarter for our the produce lower convenient provides we're a experience technology the demand and of retailer to gives mile shopping XXXX. providing seeing now what for restricted for reach terminals third the safe, the change a the way as end retailers create offerings self-checkout cost XXXX, leading In consumers X.X shopping needed automation base million opportunity. efficient nearly last assist market structural installed the global base self-checkouts. to Our by business remarks we to of alike us runway of believe tripling accelerating the at believe and store. self embracing performance. According and like going will self-checkout almost are the friction long

QX demand remain to from to Although QX work QX, we through continue constraints QX, challenges. shifted and XXXX orders of and logistics from fulfilment as supply product strong to in

as out facing. increased Our entry and to the original was X% and currently versus our XX% approximately the supply continues we're models, a temporary revenue shifted our of quarter quarters to due portion constraints last exceed challenges to year. has down Revenue backlog for the period logistics future same

continue the XXXX. with and quarter as revenue third to growth XX% perform of Our retail segments of well, compared to

QX total to starting QX generation devices. with early see continued we orders this for based on business Momentum ATMs banking. highlights continuing our for in for Series orders as XXXX. a on percentage and of And these our great Moving DN trend our next

fleet cycling devices. the now contributing live DN had like to technology win, Series new with change significant of XXX our notable Mexico, in market, Series Azteca’s for globally, our doubled the branches some Banco our We Series In free Introduction and not third and DN composed Bank. million not licenses including the cleaner, our of branches. for and this DN’s. in across expanding wins higher expansion a hardware, We is highlight modern is coverage over to is year earned fully Series quarter. with cash reliability at previously be recyclers, for more five and DN With DN cash displace maintenance certified which $XX locations contract we in a XX Banco of over XX% space. This DN environmentally a contract. and this presence contract countries secured of the will service on recyclers. competitor software Azteca Piraeus I a the by XXX capabilities market Greece, recycling our had Additionally, including XX Approximately of our profile. cash win off-premise equipped sustainable on win based capacity the a mechanical branching this includes also higher over ATMs

ATMs. to a fleet DN built Malaysia, Bank DN Series, we upgrading legacy of Chartered win to our competitive Lastly, their Standard of XXX% vices Series our increasing with all consist

services XX%, to solution, as as AllConnect in which by Engine leverages drives approximately are Data number higher as QX devices a demand than of banking self-service as customer our much real time significant in this cost is connected ATMs, We total for This reduced downtime, Internet-of-Things satisfaction, with and milestone see consistently connected increasing our to XXX,XXX lower us more XXXX. in than deployed connections growth benefits, a This XX% has for devices, continue the end evident of uptime. greater user our Data This of growth is our for sales successes XX% We resulting from our that such and I'm best business service backlog, ownership multiple sequentially operational technology field that for Engine. QX we consumer AllConnect to in demand in Award our association's AllConnect delivery and awarded the were of share Star our solid. XXXX needs practices will industry proud Data differentiated that in market the meet that today's in pipeline, robust healthy believe solutions the especially efficiencies. also of bank team increased for leading Engine. remain

favorable experiences to secured as continue our along we comprehensive challenges takeaway face retailer We for business, provide and they cost an solution self-checkout efficiency look to advices retail other bought Series, replace our offerings to with see that our suite self-checkout our self-checkout and staffing with door to our for a competitor’s tough full be strong Italian performance from as solutions, on portfolio. and retailers products comparisons. Moving retailer with DN demand next solutions their competitive consumer

takeaway expanded eventual XX included our large SCO rollout full XXXX a the with competitive to stores in an over XXX a of countries beginning Europe, devices. XX devices, and with expanding We self-checkout customer also which in retailer before span important rollout This three two country secures of of two multi a strategic years. relationship countries win with stores in stores or

year a contract. and services maintenance this three signed retailer Additionally,

reconfirmed support, our our point retail feel their systems to large strength including global of formats. and store a and are retail We as renewal In contract our growth business solutions. software, services, in for their over sale, customers significant of retail the we a with convenience and helpdesk was the store services. well petrol won we Malaysia positioned totalling $XX for renewal This third sites. a global for the large million confidence quarter, commitments Overall, other

per remain considering some fewer on level automation focused increasing technology all While the are investment of store. retailers they locations, and

the XXXX, XXXX. we're pre-pandemic a self-checkout seeing number above devices on witnessed retail our in the our year-on-year in And levels business our anticipate we Additionally, blend that basis. in growth of year absolute

the also our adjacencies growth lends more for our efficiencies. from consumers’ to software, markets, and as that desire automation in payments cost self-service other portfolio for layering greater It trajectory such offerings itself provided platform for addressable on I with Around and large core services, options of additional our dynamic benefit managed for business. continues and needs to earlier. sustainable Our future trends industry the more customer’s banking discussed resulting retail,

the the multi-year We been the what proud scores are now banking results. retail I'm We levels our we've made of improving our our survey. recently is highest delighted customer customers. of of of And that results received are us seen net some customers from promoter particularly progress a trend awarding we've satisfaction with reinforcing and annual

continue with on initiatives. to productive forward financial remain new In in now multiple services, we Turning and growth move discussions business managed our securing institutions. more to

a In We a pipeline a managed America, were one financial including Series XXXX. North also services DN with of QX agreement awarded services in large ATMs. see in for large a tier order institution, promising we managed

with and We our a our continue XX platforms, Payments at global than debit top Vynamic bank XX,XXX more ATMs. offering to scale credit cross

and go-to-market customers continue is team Platform, pipeline growing fighter sales our existing our scale [ph] we As for Payments for a our fire to strong implement XXXX.

similarities XXXX to X in stations. ATMs public by to charging natural and an for the fit roughly approximately business. our U.S. XXX,XXX X.X is and I'm announce the a EV between Europe, XXX,XXX split United about of charging over between stations. service from XXX% and entry This global technicians, network this charging into vehicle of XXXX. XXX,XXX an horizontal increase There today services million And in is the stations States in our Europe stations even estimated With charging Additionally, and an are electric pleased our experienced new

some with of in top currently have key a this future that are with is EV already in forward new rapidly players companies And discussions in secured the private This and on solution this look hearing We quarters. promising station growing for to contracts offering space. market. the we charging more our

area of growth best turning constructed that encourages recently of awarded we another on brasses focus facilities, our our scouts Now that Germany's business energy improve environmental for also only energy initiative to and to green sustainability. roof, sustainable German were We saving savings to Paderborn The I'm facility. important we our practices [ph] government say a sustainability at shareholders, opportunities. our attaining regional energy a do XXXX. on installed focus Not we proud processes.

operate. initiatives with solar out no operate our on greenways programs, focus e-bikes that around adverse around our look the in areas. We XX for effects as charging other a globe included we health environmental, Additionally, commitments. cars we communities We and are public social, facilities sustainable ports, to part where and drive have sustainable the goal consistently for in the parking or governance of of system working and panel to

QX, we a remain out ability on ahead the close our in leadership, basis. year market Looking to to strong and confident year-over-year

are owners sales, segments. and our We customers XXX% negligible demand and to business risk committed our with strong see today, with loss for of confirmed of banking strength retail As products. America's

of starting QX QX with XXXX. $XXX higher for this a than backlog the we of are our beginning banking million Additionally, in segments, quarter approximately

we're enter orders fourth XXXX timely customers fulfill the receiving over last time backlog increase year. seeing basis compared of of we continuous working a as our on for our same a We're high as on America's level to a with Specifically the we're basis. banking, in XX% to quarter all the

This as the first above revenue to for last our to of of our As orders steps year-over-year as forward-looking we the same continue pre-booked I Furthermore, key far receive for to year. taking a customer increase XXXX components accelerate further base. focus, time as as our remains half half growing stock or affirms basis, from backlog. indicator first well of demand we're our vessels robust, from outlook the XXXX, of as on this advance levels conversion the confirmed

significant needs, While see our ability to inflationary for impact we companies the continue we pressures, business. continue meet in navigating in our chain many to supply like markets, and to and opportunity global logistics our customer’s that

As are delivery will I year-end in revising or of discussed for we earlier, our delays to XXXX. revenue in to cause delivering some Thus, future guidance quarters. shift our products

believe is I it to a point we broadly, However, see that important in supply inflection note as disruptions. peak chain QX

a has Our half XXXX. of providers of into line markets increased with visibility of sight many semiconductor first the providing to chip two through meaningfully, us the

our I'm shipping. leaves of proud strategic of issues. Additionally, as team the tactics some previously these mitigate dependencies the they've other deployed of such on capacity production work DN our and which we've had to internally, extremely logistics shifting

Before our performance we're around results the for take to outlook, me our experiencing call while my the upcoming the for XXXX hold. by Jeff over the around let remainder year, reinforcing turn supply I of and improvements robust to chain solutions and close financial discuss optimism demand the

convenience, to positioned expand of the self-service. as more retailers of our our to automation squarely through and and base needs demand more meet consumers continue and and banks innovation are more customers We access,

it’s have it mitigate are challenges in these important to Jeff. a at a turn I'd And our pullback over performance, like top possible chain customers for to you. and understand this remains delivering supply we led that Although Thank doing time, challenges, temporary priority. to everything to to

Jeff Rutherford

Thank currency And will of $X the businesses. million for gross morning quarter Total divestitures, a and decrease software metrics a certain such decreased foreign you, product include and to X% million, as quarterXXXX to $XXX over Adjusted non-GAAP and gross reported, revenue My domestic benefit X% an increased of X% excluding and EBITDA. foreign was margin, Gerrard. everyone. currency X%, services approximately XXXX. remarks further third references profit, good QX adjusted X% XXXX impact revenue of as from decrease million decreased revenue compared $XX for revenue third

quarter $XX margins ATM revenue a a reduction quarter, to the million, the inflation XX points and approximately primarily result delays. third legacy due component countries of and year XXX pressures non-billable of versus for logistics, margins America inbound period, Service versus revenue million due versus a customer prior and of versus more million approximately geographic extended certain by $XX primarily Latin with inflationary basis supply times of the During and offset total to This million reduced as XXX by margin and delayed U.S., chain partially technology DN $XX impacted transport and resulted basis was year approximately points XX.X%. of our the sequential and basis, third a points. Product revenue decrease gross revenue prior Non-GAAP mix. approximately margins increased gross Series favorable a quarter On was were line total period $XXX approximately in The lower million. to of approximately expectations. on gross X%. the $XX in profit deferral increased prior period gross basis or the APAC down

Software year gross declined impact points excluding prior that the XXXX. margins million of approximately in period prior recur basis $X of year did versus prayer XXX not cost a benefit the

$XXX of Operating effects operating variable drove expense offset profit quarter period, compensation, down to X.X% million sequentially. the prior and of with EBITDA in net reductions margin approximately million investment were decreased margins gross variances compared The $XXX reductions million and $XX to decreased versus $XX the approximately key adjusted Compared was for include year second variable trends due in of by quarter, operating and quarter When and same of million unfavorable points result with mix. margin due million in quarter. XX and projects. unfavorable compensation. the operating decreased $XX expense basis our in the partially an growth prior Software of the adjusted XX.X% period EBITDA

discuss $X approximately of a impact million benefit XX% the group Eurasia for XX% banking will highlights. and adjusting prior currency million revenue of with to of after collateral the was expired termination chain segment I and installations million of period affecting due Now $X $XXX decreased revenue foreign delays our of and timing versus services plus impact primarily revenue product divestitures. and contracts. service software of supply deliveries Lower and of

expected, As non-recurring order a product prior several liabilities growth year, strong following entry XX%. QX in in and decreased the segment order

of services $XXX collateral negative approximately segment unfavorable the primarily North from of an entry mix to was $XX to for to our million, strong declines due year-over-year or $XX order continues $X X% due $X We installations profit are down the manufacturing million and the points, to and million by QX. Latin for are to million, and to on the banking Europe which Gross XX.X% in included unfavorable revenue our balances and Americas customers located divestiture a be due basis foreign offset was XX forecasting to ATMs, our focus facilities of banking of in disproportionately affected Gross at cost revenue Series favorable American. location currency impact impact software Asia. margin primarily decreased Americas of management. America to geographic primary pressures, decrease inflationary of DN million. decreased end due

margin Gross geographic mix percentage inflation to Americas year-over-year, DN market However, in – impact was value Backlog year prior lower as solid Series due chain noted. Series XX% previously gains higher we supply working and via growth another manufacturing in profit cash manufacturing operations order ATMs. versus and saw of as gross are on product to of declined banking $XX XX% quarter million ATMs. DN increased our of strategies down recycling $XX Segment mitigation Americas in certain the assist approximately revenues. the grew share unfavorable our by to the million due

million year after million Our reported for had benefit point-of-sale retail increase self-checkout expanded attributable continued of approximately X% of $X points XX% at another self-checkout Retail growth driven -- period investor million as in revenue. margin strong directly gross the XX%. segment of headwind adjusting revenue quarter XXX $X revenue of currency growth Demand our basis Retail performance. by gross by we versus to increased for with prior growth, checkout increased million. $XXX XX% an to year-over-year profit and proprietary $XX

optimize an core to to our agreement purchase less year our to is our the This approximate deal retail order expanding the our to close date continue decision for total annual business in business continue, targeted made a sell the second going we work end. X% than portfolio segments, strategic fit revenues share with of forward. enter focus and we was As reverse business for

capital short to XX. six Unlevered of as primarily prior and as to balance covenant the levels including September X.X levels presentation, flow delivery the due components of continues critical In $XXX the cash million our inventory XXth liquidity, and increase ratio million we both times. for total orders. quarter. end made of of be At cash $XXX leverage our below debt in versus quarter, gross increased in our to September reflects our cash which in term as increases our during with maximum ended The as the to of updated production well and quarter free structure of times, company's increases company's investments. the was which $XXX Turning targets the payments interest the in are quarter year inventory, metrics. necessary QX XXXX support used Company

outlook Turning for updated to our XXXX.

The approximately million adjusted million. to in $XXX million gross current our million on account million impact approximately to billion, associated chain with XXXX to an $XXX to are chain Accordingly, inflation are now to $XX the revenue of EBITDA previous outlook inflation total million approximately range XXXX due is challenges. $X.XX million revenue by revising aforementioned $XX supply We range from taking the estimates. margin $X.X for deferral deferral related which chain $XX estimated supply a and to related revising we our into the supply $XXX incremental reflects revenue over

and million $XXX timing the $XX operator revenue flow Q&A call cash impact revised net deferred. working reflecting the Operator? hand now to I the of is now our session. for million, incremental outlook the free EBITDA Our back capital will outlook to the

Operator

first D.A. [Operator today question please Matt Our Instructions] ahead. Summerville Davidson. Matt, from go of is

Matt Summerville

questions. of Couple Thanks.

round First the in think respect just numbers. million year. you your the history basically has assuming Jeff, number covering my generate company, quarter. with is that. in $XXX for near the ever anywhere flow In outlook guidance to cash don't the turned fourth But of a full I'm using people I long

to through, that me you're comfortable year? this with help get me walk how So accomplish going help

Jeff Rutherford

as everything Yes, And that's can it primarily fixed cash direct else imagine, model. good flow fairly from you question. our cap. in comes And all is working

So DSOs payable achieve to in to DPOs here's In the in revenue mid-XXs. need DSOs And what we of accounts the middle we happen. we XX. need in order that, need

-- definitely that's around flow, Based number let’s year's revenue drive going So, seen cash free on impacts based cash a What days? DPO a in happens year's probably after DSO first today. next of XX, say after on Inventory where what especially fourth approximately happens to flow. flow. XX November today in free impacts XX free of next days quarter we're recognition cash as at XX

mid-XXs. XXs in increase to we about now. right need And numbers to to make we So are that low increase DSOs I They're the we to drop referenced from the five the need DPOs where a in to that's we day number, need now.

there. So path get there's a to

execution. it's Now requires

Matt Summerville

the to of to the from year you are at this in where the million you. With where down seen the Should through of the now respect year several people's targets beginning P&L impact where a genesis XXXX now? my put really structure? are question pressures is, $XX EBITDA And the part to you've we right of were more the cost roughly anything you now. experiencing Thank take and does now be there out stuff thinking permanent of any this about becoming times you've of you're you

Gerrard Schmid

those until XXXX for we not impact XXXX. XXXX to That's and provide targets. confirming And we're guidance going

say. all of the we're But I impacts. still Here, would modeling what working here's through and

and margin add into but you inflation. go what experience rest and to still that increases. source quarter, see material If And million, is the numbers experienced component fourth the is we million quarter year-to-date, from going which around can and carry experienced, approximately portions logistics at both that raw it inflation all you inventory, if this in $XX caught in million look us, and fourth is from impact quarter, still What's parts we've only it's the increase component back up you materials that quarter changed of The not operating $XX inflation. have up as and is $XX logistics logistics is $XX is, and, to the parts going in raw for we too. costs. the today, the move get That to we're prior logistics; twine are going and the the

it, half some we second So talk about supply as drag probably anticipate logistics, into to next quarter chain until when see to that And going we that's the constraints. turns. lessening of costs of we're inventory going third not any year, the

logistics, So what and to the and inbound and the And this measure to normalization pricing we what model that from to chain. we reductions we then outbound are a post, can from effect And going at need the a gone supply has when pricing look it's and, and impact especially perspective. XXXX. perspective, we do are need to measuring and

you saw just more peak give and to a prepared some add well remarks When our we additional as substance to comments wanted QX as color. may point. we I if that. inflection [Indiscernible] some And made in some I some around -- So

like started Moving extreme to of an chips. see through visibility QX, critical we semiconductor tightening components to

to safety well down QX, through is And has XXXX. went substantially. we now of first through semiconductor improved As our the half and chips our stock access visibility that

moved to feeling chips. we're we've relates semiconductor to as like So over hump the access

starting revenue prices materials and raw steel, spot to paying semiconductor as recognize felt at for of look P&L various price to we and as for flows a subside ready there's starting that raw through on those effect stock the materials, in notably a in QX. we most QX peak it's somewhat. it QX take will whether But forward chips, the evidence our ATMs, resins so to were we timing be However,

don't we structurally model. in raw So being costs see those our as prominent material

I inflation the said, that as you right know, to there'll think of XXXX they're still rightly be now to pieces, And for logistics other we right as we Jeff through that key Jeff first for the lumpiness abating. some do the move think we effect half us, see As going those of driver said, in XXXX. mitigate some want in another capacity need actions to less that our referenced to shipping as Jeff certainly the we we've That will of U.S. up take the inflation. Europe of We cost rely building pressure we're on manufacturing seen logistics ease a Americas. perspective impact the from the from to

as were we're and those initiatives Second But there’s a good pretty some obviously lag prior products pricing that of priced take still we're traction all, we've services software been seeing building products, moving pretty decisively from timing across a with pricing quarters. and in hold. perspective

number guidance yeah that not right now, I So to a we're that impact going in play are of give while mitigating there's XXXX. factors will think

Matt Summerville

get I'll you in queue. Thank back it? guys. Got

Operator

Our from go Mehta Kartik, is please Kartik Northcoast. from ahead. next question

Kartik Mehta

Thank you.

before? your you about look of as debt flow to continue of you out Just about do had your ability kind and refinance spoken to cash look, conversation you some XXXX. the talked to free impact that think How this

Gerrard Schmid

we the And pricing the as forward, we could going and continually still reaction be. to what have monitor of move be cash is market’s Yes, measuring what yes. we're opportunity Alright, doing. [Indiscernible] and variable that. We the

no as mid-XX. really our have you we provision remember, secured in approach This makes Now notes. to refinance cost it attractive more

cost is no, no particularly refinancing. The to immediacy is there say going would the through head I in maturity there's secured and relative the So of to debt, notes. our relative the

this another our of are what's is, why we the impact going in piece refinance. some to chain, performance should the and of global of relative supply algorithm So on

there then and in as we with our I'll now between afternoon, on in midpoint And no so XXXX. make what to of to continue between there monitor would where to trading. and even now this, call expires going and relative then sense is third debt we’re to is say, that it's soon So point Again, to say and advisors, to provision our Again, refinance will as a refinancing. for this and us quarter of the I this, impact July continue time the XXXX.

but generate this not we'll think become cash will don't in growth believe generating the And, they'll get revenue. we're be what's today, just of it giving still when the to be us be is and on that'll costs? I'm free the the from So and number flow, going impact prevents flow There'll you so I guidance, cash refinancing, free we XXXX. in part and going be auditor, continue, XXXX. I flow to the generation question cash don't

Kartik Mehta

the we'll just Gerrard, orders issues, then maybe out customers it's losing where better. supply chain there taking of until things your it too say, get risk just just, long, is And any on we'll wait

Gerrard Schmid

seeing of whatsoever. quite we're company. alone. Kartik, in customers, issue a our note to promoter Clearly, customers not why this frankly. our And highs. frustrated NPS they score scores. customer go levels, I that were We're we're every dialogue This if facing made And evidence We've with reference material to or that satisfaction our there’s global wanted our active all-time is seen any any somewhere evidence else. of net not are is in at

our order So remarks, than said, there, we're not prepared in in entry XXXX. it to higher of it evidence as any order And our -- material change are I entry. seeing Kartik, regional is my we to tracking seeing our nor

closely holding very, give continue our very well, need. products to them are So to they with right propositions good that we are and that our very, up customers work very what feeling we them our

expensive, it's risk but when that to. some obviously we in shipping, using Here don't see as expedited a we're exceptionally we're But some that relying cases, on we cases need in whatsoever. material

Kartik Mehta

you, of Thank you. both

Operator

next Our go JPMorgan. from comes Chung question of Paul Paul, please ahead.

Paul Chung

thanks my questions. for Hi, taking

of to So, just does on half impact given a for kind cash investments amount seasonality in XQ, a large inventories, cash on the some there QX in a in in given Are a a such follow into maybe of less of material XXXX? elevated place you up flow XXXX kind free first flows? spill such And drag of cash how XXXX? good harvest potential or the is of

Gerrard Schmid

Yes.

fundable, in flows. something So cash flow affect to going obviously, do cash future if you is XXXX, it's

relative our doing and they And are so good base collections. well we payment. customer request jobs to have doing as for we respond we're our And are, we to very and, is what

So we the what year. control do we're matter side, counting last got payable do gas disbursement off the the our On accounts we on. that the that a it's that's of cash of And and at end we and, year. foot we of throughout

do this we that So won't year.

cash. only much there's meant our So, But, to that ability it's purchasing, represent. your what the on EBITDA basically only but generate be revenues, so so there's based of that level generated. cash and has within to can That's

not it that you will XXXX. $XXX pushing next we'll if XXXX. two you, revenue if it’s XXXX bring are right we in say forward, million so from basically of today, And from available into of I into year. collections for weeks The out move revenue

the about from model in today. of collections increase we XXXX see will the that talked So we revenue deferred an

our also have of We we're on XXX, high not that relative revenue, deferred Basically, will we to today modeling we're recognizing we're but the inventory. building inventory million inventory, that not inventory are of have own revenue. we $XXX the we those unfavorable because relative because carrying the higher anticipate level

holding we're the So inventory.

XXXX. is everybody remind go that, million I on So effect we're the thing away all will flow will of The on is restructuring payments working one in of $XX after effect, XXXX. cash

in XXX that is based potential XXXX all markets, pick and up. benefit current to that's in at wouldn't and Kartik will I we basis So on we approximately points. talked what about refinancing The be

of $X So over that. something billion

from cash of chips issue significant you semiconductor wasted. So I the say in happening, is $XX nothing with our This million caused the good they that. $XX is cash today. inbound of have again, guidance fundamental that there's inbound to that logistics. logistics XXXX to -- it same is bump amount amount model But we you I there's positives provide of numbers, impact But And significant if free wrong going flow But the that will inefficiencies. when are have. That for really in XXXX. flow company. what's a There's take we're in supply the do coming the it. There's $X million our out of of is there transitory of million at have job tried suppliers, equation, describing a purchasing you a a outbound chain take and look not by of

where are costs. to chain going mitigated some when we So that and initial supply issues year. relief the be see that post logistics are – second think to going it's quarter Expectations we're next

isn't obviously that same. there not probably would sense. investment they're we're levels new But logistics the expand a that with kept the at because today. in certainly would somewhere. capacity normal experiencing at It's it make level, Now And that there's

Paul. So my opinion, that's

Paul Chung

to of risking, kind near is instead you. Got XQ, year terms service some signings see what cash expect course we think in the year, of next flow at And XQ cash, of choose uniforms over as the doing? in de contracts least of can about your we then, peer somewhat now the

Gerrard Schmid

relative saying contract to You're billing. based

isn't Our, all other other, certain revenue based for they which have a cash which, from good our model them free it's services software, to model mainly It's flow Right? that and different. their on is Now base. on install basis. moved the

I to would software services lumpiness happen, level they've what then flow. I cash right, the as cash like we out grow free nice a we, to Now, and job free is flow. and of they need think done of have, say

Our or free around cash departments flow can be [ph]. one installations day

Paul Chung

And…

Gerrard Schmid

from and absolute effort our that perspective ATM take that in the with are tell anticipate servicing to skill ideally a technological this density we're early, cross services market ATMs, the the technicians, that out energized filled that for that business. units both number that profile to to there comparable similar around what a of work market us to see on we by I’m me introduced investor going very very, very doing charging a the build it attributes let And you community Paul, and stations. EV to it because would that. has I are still train we the seen we've to while ATM plus start business we'll

go So being looking there, is… takes what we towards what some doing. to it that time talked well ways we're but that'll operator Hello, in at think build that's is as obviously

Operator

think cut off. he I Hello? got think I Oh,

Gerrard Schmid

hear Alright, I you Paul. can

Paul Chung

I Are term? charging how you. per of revenue the got And bit per question, market? competitive kind and guess you profile? recurring can the would give follow longer kind potential Yes, unit or Thank is charging. of a be contract margin of that question helpful on; us a the and sense of service I EV you're contracts talking service that up But guess. I about commentary. the even

Gerrard Schmid

is, So will like landscape. ATM. seen lower this the right is we we we've compared Currently, the say market, attributes. little what comparable materially what I’d believe larger highly a first businesses. be per compared And mature business. currently, is new thing those to in will profile players. unit the We of would scale The ATM base in not one seen tell will to I servicing see you to more what What it's fragmented margin bit a we revenue our be but in we've a an

Paul Chung

Great, thank you.

Operator

Funds. Bergner Justin Gabelli Our from next from is question

ahead. Justin, please go

Justin Bergner

Good Gerrard. morning, morning, Good Jeff.

Gerrard Schmid

Justin. Hey

Justin Bergner

changes just wanted to quarter. I question, the the first Just from second of guidance sort confirm

that and and of $XX be million. guidance. revenue the your So from to the those not million set? entire to $XXX which cost was the second cost guess of deferral seems number non-billable quarter sort Are in revenue $XX drop million deferral through you've earlier order expected $XX I up then then taken That on million your

Jeff Rutherford

our previous one. guide was Yes, you four remember four can to

of XXX. dropped to down this So three $XXX to the the million nine movement

and you previously. engineer lower the number probably So was the [Indiscernible] can

Justin Bergner

the cash component needs would inventory lower Okay. I the extra associated million some mean and but it the $XX And million free EBITDA guess the $XX matches like. lower would on stock like seem cash decline in critical the then flow flow, guide, I have you with

not free that guide Can the there sort I'm Are help guess somewhat flow adjustments to EBITDA I in more those is than coming of that? me adjusted understand the So keep down offsets guide. positive two cash surprised you line?

Gerrard Schmid

in deliveries a for Yes. have had the to the next which revenue push weeks, that have cash means recognition, our collection. to flow revenue for weeks. two that Because next then over billing The for number we've going we customers, then disruptions is we're we're don't recognition key two

the look at it customers So day, to our cash collections direct if collections make becomes months. increasingly a it's because perspective, that's you we'll from two you And once to from it the get past due. get next difficult the that key over in not

there's feel strongly accounts out. the payable. affect today that with model does We because that build we not flow leverage inventory So post cash

have inventory We higher. to going will that's be

higher inventory. also level, see you're owned going going a but see inventory to payable, higher so to accounts lower You're

plan do as yes, collections. disbursements, and well, So we managing in have we like believe that it's it about managing were From managing a -- to processes collections, is that. on big we now the a place it. is this we And And challenge, taking good number. do to have on

model execute visibility clear to now both we've we to to R&D model. capitalization, clear it's R&D, the have up understand it. have also a And that execute We us capital to to spending and

Justin Bergner

retail year? of that this into the in side, of on is lastly, side some performance note are supply headwinds there from helpful. third margin then actually And great. sort better Okay, than the the are quarter? margin from the preventing these than on was That's And even coming it retail view being issues tracking of any your better retail what chain

Gerrard Schmid

I'll Justin, it’s one. Gerrard. take that

most on and our demand think manufacturing So major an of around but side, our because than think it's Jeff's forms the where of self-checkout exposure our modestly have we're for we plan primarily European banking, revolved our the retail we and based car nowhere solution. based. positioned as Most of recall, inflationary and rail centric, therefore manufacturing from for perspective is we are very next some where industry have self-checkout our retail where have performing from facilities are track using quarters. some At material facilities grows, business you of retail, there, as well, to logistics. near very customers we're versus of because have and we and based we non-shipping that's other benefit the as well XXXX. the several it benefit for comments better very, And we performing competitive a are We

but there, nowhere it near pressure banking. in notable it's is some is there as as So

Justin Bergner

for Great, my you taking thank questions.

Gerrard Schmid

Welcome.

Operator

ahead. [Operator Instructions] is Marla, next from Marla Our Sidoti. Backer question from go please

Marla Backer

you. Thank

have questions. I two So

on. possibility orders what's of result you're of for across a you everyone earlier, are are share were board. prospect the little there term? up But a and said bit the going instances the of noted better of that this, positioned said, the gains? you you which delivery One accelerating the Because That specifically market any in near see as losing potentially something impacting follow logistics challenges where addressing you

Gerrard Schmid

me again make evidence contract. of that reinforce to just Yes, a so or couple We're let that Marla. not on seeing that. negligible gaining will we see risk of lose comments I

give spike think on will contract that chance don't a will winning a this of that and that positioned us we front, market As base relates stage. we're at evident goal believe it's building quarters Do market incremental which our services our this know ultimately confident expense the supports the gains? gaining of our around past hopefully at time. Quite share with others I we're very a market necessarily we're to few Series DN of ATMs and we very that differentiation, become share, product to well us share over disruption frankly, that give exceptionally especially accelerate

have next we'll what happens the in think several quarters. to I see

visibility several quarters, to Now, the access on to seem the our points what over been which semiconductor have will raw I the the most think of spike is, very a freight next to say structurally supply especially materials disruption. around very, in I some handle we chips, in have difficult good chain

one, on So feeling we've the situation, managing very comment got can't are while we're I how confident that that whole... that others

Marla Backer

is which perhaps market, would which initiative. you And area? an any that, add opportunities sell give charging station an question, retailers? emerging cross stations some you are charging there EV Let's as install the thanks. Do large to see Okay, on, the this in bundling say is any potential one you synthesis -- would on is other opportunities? Do

Gerrard Schmid

up Yes, And tell in when own retailers that's charging that that the their consumer number of providers, idle their hopefully more at to enhance multiple EV time question, a drive and size EV the their discussions a comment baskets. that see I can great with that as a of made you Marla. journeys I sites drive includes multinational way we're and

we're no doubt which retail us this sell It's overlap. our there's there's and we working at, charging. exclusive initiative an as do with strong opportunities, EV retail think between outside busy, but There intersection are looking closely cross retail not on of independent plays some why So sector interesting is other are that colleagues well.

Marla Backer

Thank you.

Operator

Q&A Nixdorf over Gerrard for to This concludes now Schmid, CEO back Diebold today's of turn the closing session. I call will some comments.

Gerrard Schmid

pleased Adam. a industry. demand everyone we're seeing today's as to Thanks, to who bank and be the market the And thank for We're call. you with continued continue for us solutions we leader automation our retail joined in products and

conferences, the release. interim, And brings you you with earnings Thank please do industrial and we hesitate drive quarters talking have forward Now the like that everyone. not the additional businesses areas our our growth and next charging. software to relations core across to this new products, EV reach you if look call inflationary through payments we our look into And services as to We the challenges upcoming with upcoming chain forward and us and to questions. end. moving then of to supply all the

Operator

today's conference This concludes call.

You disconnect your may now lines.

Diebold Nixdorf (DBD) 28 Oct 212021 Q3 Earnings call transcript