Earnings call transcript Q1 2023

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Operator

Good morning. My name is Glenn, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Diebold Nixdorf First Quarter of 2023 Conference Call. All lines have been placed on mute to prevent any background noise. The call will conclude after the speakers prepared remarks today.

your begin may you conference. Chris,

Chris Sikora

our welcome Hello, morning, available Relations earnings prepared section first slide a posted XXXX of be our Later of our I'm everyone, remarks, to Chris this Investor have our replay and also call. accompany Sikora, quarter To this there. and will website. to Investor the release press corporate we presentation Relations. webcast

all statements Before hear participants the I we remind that will of These to will call this call. beliefs at forward-looking this and subject But statements. team they that uncertainties differ actual the reflect could and of during expectations results you from management materially are statements. begin, our risks cause to time these

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

discussing on be measures certain financial also will We non-GAAP call. today's

between measures presentation. slide today's supplemental the three, in As the found slides earnings release and of can GAAP a noted tables in be and on reconciliation non-GAAP

turn we'll Octavio. call that, With over the to

Octavio Marquez

you, thank Chris, for all us Thank you today. joining and

operational quarter the as demand as market Our positive reflect implemented past we've for solutions, outcomes our results first several consistent months. from improvements over well

We retail continue for products environment drivers to and self-service see and automation. our our driven growth banking robust demand around by long-term

and our efficiency use lower market generating together of for our ease retail banking demand and for preferences customers of solutions. Consumer leading with for operations ongoing the cost are

profitability, as levels higher strong improving evidenced our and improvements operating in year-over-year in production are and revenue as momentum as execution our factories. Our well by

impact. our the take becoming to continue efficient agile by we business macroeconomic to more better operations, steps to and our improve navigate In

to hard We to year for are it balance starting our be this will see quarter objectives. important and of sustain momentum us the of achieve the progress in for first proof the to

long-term develop solution move structure. to lending banking with partners conversations our a our constructive and We continue with capital forward to to

I sent our a to memo these focus employees conversations. reinforcing today, our continue Earlier while we

healthier including making for to to our and in dedicated to long-term, seamless stronger partners. and our our the commitments our are and our investment customers, We our meet company vendors people and operations products continued

five. priorities We and objectives. we our have will in on a put Turning focused call, position refined cash the Since earnings achieving to generation XXXX these and implementing entered our clearly priorities company around that slide stronger aligned to deleverage. key last further us

and Our first priority sheet is balance the accelerate deleveraging. fortifying

backlog focused fully are optimizing strong while pipeline. order capital, our on We deliver and working on we

level in of installed as banking elevated We units our is produced now focus those and goods are finished we support getting units our inventory. customer out of schedules. carrying advance implementation to The

additional On for improving top of room that, we raw in inventory. materials see our

stabilize. [Indiscernible] chain As the and to begins and supply environment logistic

and from we more a in mentioned a I short As through are place. considerations financing permanent solution around working structure long-term the capital perspective, get to

As our discussed are previously, advisors the us options to retained sale have we assets across company. we and the sure make of continue help exploring non-core we to all explore

company. To excellence. the further operating customers improve products The and reduce profits second gross drive to to and our operational plan across continuous We improvement that a priority efficiencies adopting deliver mindset maintain is will expense.

XXX and as it EPOS committed profit. crucial directly devices are and ATMs, to is Efficiently products revenue self-checkout XX,XXX delivering delivering We XX in revenue and these devices translates XXXX. into

a realignment made an year last streamlined As us more that we a organization wide reminder, completed company.

the we to off to XXXX, savings program incremental in P&L. drive build continue Now that to

margin closely trends, the we business, to of and additional as drive evaluating the disciplined well are product side monitoring and operations as gross manufacturing On inflation pricing product expansion.

to local drive further to take business, efficiencies. of side to global service we the opportunities the continue resource of advantage On

of everything it's to aligned is solutions our the our core leading on for the execute market our and markets. needs. Our we banking to forward retail do, path third At priority self-service customer

industry the new have have wins with quarter traction see revenue growth. and clearly at current can customers we orders, best when backlog the our and our you products product strong in of We you look

attach that, On software additional services of contracts. we of top have and level strong higher

a value. near-term past through and hurdles to strong serving have several are headwinds. through. for has year We presented business us our customers customers that work to we But working The committed our

turn to performance. at six, we If company looking total slide

additional GAAP you earnings statements. am non-GAAP that referring reconciliations I to in you details me non-GAAP find remind the and to metrics Let can the on

key X.X% we Gross million quarter impact During period. delivered first particular Revenue $XXX constant approximately prior financial divestitures banking which compared X.X% the of profit quarter, of for year million and versus million, improvement, of solid our was business. $XXX our currency the with was or strength year in an increased measures. product the $XX across prior in the increase with excluding

well expanded our the as compared XXX logistics functions. prior and with in chain lower points, savings year-over-year Gross SG&A expenses primarily down spend cost basis earlier was quarter, costs. of margin impact approximately to million benefiting the year Operating lower as $XX supply program, from

year profit $XX quarter. also million to XXXX, of $XX is with the The up compared quarter $XX of $XX first million was million. compared operating EBITDA net million, Adjusted with the up result quarter for year the prior prior

we we for objectives, start that improve that to be much this done year to momentum. the upon taking still our work build there's is achieve right can a are reinforces our While steps good operating the to

services. continue products in our confidence performance, investing support in the segment to continue of company recycling integrated great In the ATMs In the DN our our and cash show technology wins business by strong lead banking exemplify solutions. and Several market. during quarter Series our our to and customers value

agreement global technology related at across a European-based seven $XX with refresh countries. bank DN over a approximately locations Series major a Our for X,XXX team at services valued million secured support and to ATMs

$XX with Sicredi, branches. credit more a with We than in and won an members also million million X,XXX union X agreement Brazil

transformation branch other and technology. recycling cash For

processor expertise have leading landed we its are our compared Additionally, stack multiple quarter. technology and covering our million region. the customers and product prior Europe growth platform replace a service to in payment wins a in banking for backlog, processing Payments $X for Vynamic win competitive we to existing exemplify These with in new Southeast deal double-digits, banks payments strong the trust the the up seeing in year supports is which our the

mix the particular was at to geographic Series In which results compared first is approximately year revenue perspective, Looking ATMs, banking from gain in sales, our Americas, quarter The customers. our where Americas focusing position from a revenue recyclers cash in ATM accelerating product we contract strength our XX% growth against with refresh service. base more to into the the quarter. customer our we improving to towards efficiency and of DN we of continue themselves competition. the install led In prior them some derived by underpinned are units we saw traction a market. shift see seeing This Americas, has operational banks on the in particular, better of regional as the these to

In was million self-checkout Shifting and demand. increased solutions European a retail continued services. installation support to in $XX Eastern with new retail discount Multinational related quarter openings to hardware, great for continue a retailer Among with British large during technology for deal a consistent growth million to migration. store And and business drive contract Delivering the consumer $XX our wins a business retail. the engagement. cost efficiency with major and

closed the million a also frame approximately based in pharmacy major with chain $X at We valued Mexico. agreement

one our we Belgium are AI-driven addition, partner at cooperation our this country's live in shrinkage inventory retailers, with biggest SeeChange. first with In the solution in of done

activity. technology value our a about retail are happy proposition excited We very see to we of are deal customer and great

The from regional growing first for with securing the them we it's the retail helping store believe Europe, a from This been more and our company perspective, XX% checkout supporting is Europe, growth at us are a In focused a we for the with market Americas and Americas quarter core long United customer major market standing and which their automation build the opportunities in as drive revenue in more SCO meaningful was a has follow. efficiency States. Units relationship now derived approximately Looking of on our in global we customer helped presence for the retail. presence will the and technology. retailer rollout have

If we sequential ATMs quarter the and can seven, slide shipments improvements for self-checkout. unit see in you turn to

We challenges are had. aware our the company of all

well as As other many XXXX. companies faced this area in in

the XXXX third point our production. being quarter low of the of With recent

easy or we of attention. Due see we begin Managing and are the of However, slightly timing positive been to require quarter-over-quarter and are still that shipment we’ll business, stabilizing expectations. chain can two been have able below production expect the a to seasonality quarters our unit more during now not the has supply a and historical past variances lot to above trend. seeing the

shipment and say and increases to confidence ATM sequential me the second in units in see quarter the the in consistent sales production give and Part the orders of expect of efforts our stable shipment fill more meaningful the visibility of However, confirmed fill year. half checkout year. confidence measures Factory comes next the back remainder we quarter gives only to the in with the us factory not rates, which but current quarter, from dates. to rate firm to plant a

fill currently we target rate year. current for an unit the banking, XX% on have For our shipment

the rates that second retail, we factory in encouraging the will Even higher our have XX% backlog that rate for more have orders quarter. we we full-year from move For is as the self-checkout fill through fill year. customers drive

So the good securing side visibility carrying operating strong The this of with together improved are to in fact all Jim, our revenue of units year. we still our level units when on tie the strong product the to momentum for with finished the over is second it customer handing quarter. we that before our into result level demand, a elevated combine production

on details I'll our Now Jim. hand for results, to call more over financial the

Jim Barna

Starting up and $XX impact up versus foreign period, X% from $XXX year a on banking currency of the eight, adjusting impact was million and Octavio. a you, million slide the $X was revenue approximately war. for million of prior after Russia-Ukraine Thank X%

the quarter quarter logistics units, chain ATM environment which accounting Series of revenue a unit was revenue of year. compared driven to improving approximately X,XXX primarily approximately XX,XXX were and up compared the mix. to first XX% from with more units resulting in product in Higher prior prior DN the supply for the business, year the units by benefited the normal

stronger gross inflation margin million improving also costs. build XX by and quarter, related basis basis by activity. XXX mostly the an improved XXX of in million and points by quarter, service Service with first basis improving points is revenue year-over-year and in work $XX in installation $XXX expansion product on product up increased banking gross quarter year-over-year driven with products This lower Thanking by the was resulted profit XX.X% the to points. constant profitability driven which of first a in basis currency

of revenue revenue from up a million was business, Russia-Ukraine Turning a relatively $X X% to adjusting million versus $XXX after retail slide business. of nine. period, $XX was the year prior impact war. impact Higher currency million was primarily flat but the In by product driven the the and for foreign

profit across improving by both Retail profitability was in basis XXX basis quarter gross million points prior and $XX products and XXX service basis of gross $X increased to improved to XXX improving year up margin the period XX.X% by million the points, Retail with product first compared points. year-over-year services. with

around next at and in disclosed substantial filings, concern liquidity. structure have the company's slide, previously capital the there our as Looking we is SEC

created with through that has and a then working our first issue fourth with operating lenders. three of seasonality cash are in the historical the quarters year we cash funding near-term usage generating of quarter the Our a

Loan At Unsecured previous discussions portions successful asset XXXX. refinancing were pushing we Senior a backed with into of facility and closed out our XXXX lenders new Notes end in B of significant with we with Term maturities near-term and the our the XXXX, lending and

with the and necessary under and to full-year as it lenders. forecast, banks our move However, ABL, reengage through we first our continue we analyze felt the quarter to

We form the a $XX requirements in loan operating liquidity fund added million short-term. to the in of our silo

the business. We continue to will partners structure, cycles our conversations and of our with operating support solution develop which to move forward to capital a lending our long-term our better and banking in constructive model

in this any substantially expected transaction deleveraging resulting that that mentioned the part is As the solution fully is earnings shareholder or dilute of equity. morning, will release

in is disbursements. flow cash a Looking quarter result usage of free and $XXX in a first million year-over-year XXXX of of quarter usage first to resulted ending cash million the compared of $XXX the improvement usage, was in The the XXXX. at the quarter quarter, first results profitability timing increased largely for the $XXX the liquidity of million. for The

ability performance slide Turning to lender the uninterrupted the assumes our our operations. the to bank please contingent and conversations of company's full-year XXXX of upon note for a year navigate and successfully outlook outlook ongoing remainder on is XX, the

XXX,XXX to what SCO committed deliver in quarter. units, XX,XXX EPOS XX,XXX ATM disclosed units, We with and units in last XXXX revenue we line in are

the than each anticipated, not seeing are SCO have with units mix other some between our trending in impact and EPOS shift SCO potential anticipated EPOS they trending lower than out. and retail revenue higher We but met outlook meaningful on on a largely this should units as side

Total is improvement $X.X billion in to $XXX expected in range approximately a represents of unit million, to of largely a year-over-year by and range. of the is revenue billion, is expected expectations. year-over-year at growth be which in represents to our $XXX which $XXX midpoint revenue and Adjusted be range to EBITDA $X.X million million X.X% the underpinned approximately revenue

and EBITDA improving year we free flow cash the our of majority conversion. the the to of EBITDA remain second-half expect to continue on will adjusted focused We in

Octavio. I'll back Now, turn call to the

Octavio Marquez

closing, operational the Thank in the know In ahead I of momentum start have an am am we global to I of perspective, and created from good we we've we team you, positive work our a the important us. of encouraged and work had the proud all year Jim. by company.

and ongoing banking taking be partner, conversations today. will not the our lending we with Q&A Given

those with further progress we any As details additional appropriate. share we discussions, will when

listening will soon. speaking time, you today. call thank for of we look this to close forward At to and the all you We

Operator

conference This you. Thank today's concludes call.

disconnect. You may now

Chris Sikora	Vice President, Investor Relations
Octavio Marquez	Chairman, President and Chief Executive Officer
Jim Barna	Executive Vice President and Chief Financial Officer

Diebold Nixdorf (DBD) 3 May 232023 Q1 Earnings call transcript