DBD - Earnings call 2 2023 | Diebold Nixdorf, Incorporated

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Operator

Hello, everyone, and welcome to the Diebold Nixdorf Investor Update Call. My name is Emily, and I'll be coordinating your call today. [Operator Instructions] I will now turn the call over to our host, Chris Sikora, Investor Relations. Please go ahead, Chris.

Christopher Sikora

Hello, everyone, and welcome to Diebold Nixdorf's Investor Update Call. Relations us our Marquez; posted prepared presentation the with Barna, CFO, our have corporate to accompany our to remarks, Investor we CEO, and Octavio Jim slide website. Today, of section we have

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

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

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

Slide GAAP As be of X, measures can supplemental between in presentation. a non-GAAP reconciliation found and the schedules noted on

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

Octavio Marquez

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

pivotal from base long-term Exchange. highly the the support transaction moment company York deleveraging as Stock our for The Nixdorf, restructuring Today an complete for to positions in the New that consensual, relisting success. shareholder post-restructuring financial company marks is from its better a the Diebold emerged enable overwhelming has expedited, company and

in and have rupturing. I in confidence valuing company support, I debt it provide. trust our roughly for as relationship customers am grateful our would XX-day we by solutions through They humbled for to our their our we as side, like continued our their period. thank work their we [indiscernible] stood and industry-leading maintaining very

employees serving through customers restructuring are suppliers ongoing the on while we executing are very and In partnership our thankful for focused addition, proud process. our of remain our and who the work with we

an Nixdorf to plan and a emerge as capitalized liquidity Diebold company to morning, how position. This allowed balance discuss with in sheet a enhanced restructuring stronger detail process the more we

operating continued momentum. review that today in the XXXX. of is And results like both our main strong we and quarter we'd lastly, outlook highlights with positive [ covering second tracking financial We you will year performance, that one prior are our also our leave and for to ] the well

published We full our in continue in of that process restructuring late were to towards -- part late May. year as expectations our drive

Turning reiterate and to want slide the I company. investment of to thesis X. the highlight our strength

leverage execution to First, emerging satisfaction. positions The operational in we best creation. capital drive company restructuring competencies since overhang acquisition to and Wincor on debt and inherent removes and core are focused long-term immediate has that XXXX stronger its a structure been value the the Nixdorf Diebold customer

We have recurring an which operating its model software with base our stable world-class offerings, service to core winning is business. upon market the long-term, and product that of future at based in leads

checkout transformation new journeys In recycling, addition, ongoing drivers retail banking cash in around strong branch and our growth support and markets. demand end secular

of recurring, our the to Leveraging backlog performance. recurring secure our offerings. revenue Attached Approximately revenue us financial billion and predictability roughly our help strong higher-margin XX months. for our stability which sales markets are XX% XX product around next service product product to demand coverage and provide levels the provides end service for in software our is of $X.X that

helping and base, global blue-chip whom with them financial that in critical of retailers long-standing a leading consists role their customer play serve a have relationships institutions we We for customers.

continuous operating model, a optimize conversion. to efficiencies improvement across set maximize and the Lastly, we cash the drive have company flow adopted

stakeholders. and excited and we stronger onetime on conversion. as for our the deliver our expect about of cash deliver forward we us forward, debt and will overhang less create with what Removing flow focus customers will moving generate we to to are we EBITDA value allow on the items for our Going earnings higher strengths, quality a company accomplish nonrecurring to

turn will relisting over Stock of on to I the New the details us and York Jim it Exchange. behind the through restructuring walk to process results Now

James Barna

Octavio. Thanks,

have outlined The main positions outlines primary from have how in area. success Slide the significantly company restructuring areas X, going Looking for benefits business details the at X you slide process we for of the improved we in how and forward. stemming and completing improvement our that better the each

company First, billion we year-end company and expectations $X.XX $X.X approximately now end the materially structure. that approximately of of was to to gross debt billion delever in May. emergence, At And XXXX, adjusted and to net X.Xx that company part and using our were $XXX be expect the we were in Xx range million from around the able debt. the debt net $X.X in of in billion approximately capital gross year a Post the had X.Xx as the of debt. the process published XXXX, late restructuring EBITDA a perspective, of now full leverage range has at net of

we cash improved Next, a have flow profile. dramatically

interest beginning $XXX annual has the been to of for $XXX million expense. approximately in expense interest million XXXX annual of Our expectations approximately of reduced

laser-focused are on EBITDA growth. also We driving cash

to much we position position. coming below target this our cash and restructuring challenged prior have out with was the of business In more had the efficiently. to liquidity liquidity Next, filing, a past, robust impacting our a run process, the minimum company ability levels

with million liquidity in as have excess position cash $XXX a of we June Now, XXXX. of healthy

our restructuring in we with but the payable we able to excess was stretched had relationships. our vendor later prior benefit filing. of the cover detail were of more normalize presentation, DPO in to significant accounts will days another I XXX in Lastly, this that

normalized payables to We have more our sustainable to been able now down significantly pay level. trade a

transaction restructuring continue the forward. and the in of is compete benefits winning to company positioned market are much the better going believe we significant and The

maturities a exit to near-term slide ranging had and approximately Slide term at the around XXXX The filing, of billion loan you post-emergence debt have X, structure, restructuring we my having with in on previous see from that billion reinforce eliminated the materially capital of structure maturing refinancing $X.XX eliminates any company's in debt comments delevered a debt the On $X.X the to factor XXXX it market for can time recapitalized place. risk replaced which exit plus rate This and has markets. debt operations to XXXX. also overhang loan positive will The in an capital points. balance sheet to The structure SOFR be compete a more the value us in enabling now equity. near-term and basis of term interest XXX commercial company's eliminates outstanding the effectively even

revolving for improve and flexibility. in going Accordion provide term exit expect to facility forward our put place debt credit the near allows in term, capital the a which Additionally, additional will we an of loan cost Basket

profile. new we equity Diebold X, Slide On provide around details the Nixdorf

common have trading was the DBD belief without on the Stock approximately and overwhelming oriented their relisted of York have resumed value demonstrated from and Exchange and process and and this Again, value in morning, globally. shares our under the our support Diebold's banks the stock million New we shareholder long of ticker this not emerged XX.X has outstanding. is retailers could base. post-restructuring nature As and to we strong term company group This of in investors provide there

investors implies compared the is at at that As billion value restruct a result the Legacy for approximately lower this an billion Diebold $X.XX billion to of filing, time compared Nixdorf attachment is which point approximately $X.X for of strike Legacy to $X.X effective Diebold process, in equity Nixdorf.

over now move Octavio into to performance. to second I quarter will back our it turn

Octavio Marquez

announcement, we published were slides earnings few next color The and more of our to little call provide last week Jim. part on today. as wanted the Thanks, a

So starting on XX. Slide

basis year. as performed Retail, automation well reflecting as approximately compared well Overall, was solutions and The adjusted improvements representing results prior have in revenue our a EBITDA continued Both strength the with increase with profit operational points. EBITDA quarter expanded quarter we margin year year self-service X.X% our gross particular to with in quarter. of in second second implemented $XX we the were Banking the product and for XX% compared the and past results demand Banking business. over Adjusted for prior net up quarter, million, the XX

Going XX% positive the we of quarters. we year-over-year, able highlight quarter quarter-over-quarter variances Retail this businesses. ATM by ATM timing several to that units revenue unit our encouraged but units up see X,XXX our see Banking areas which stabilize to for we XX,XXX as and XXXX. are or were been above and Banking, are around shipment are Due below In shipment X second in to expect have units year-over-year, expectations, production delivered XX% our There historical slightly and more seasonality into at a this represents can developing. up units the quarter were business, trend we ATM to little from more compared quarter. to detail consecutive

our expect the DN continue and strength Banking production recyclers. factory With product Series demand driven in strong we by improving, for to Banking products, ultimately backlog

unit self-checkout XX% were up shipments Retail, year-over-year. In

we Germany see the representing for towards self-service year shift production preference up to prior delivered increased compared can XX% accommodate added continue demand the X,XXX Self-checkout during this additional in in with half solutions. see approximately quarter year. ensure self-checkout we line offering an more were year-over-year, We customer revenue the units checkout of We units to second this period.

service This sales a we represent grow quarter And base sequential of we vast -- rate. us self-checkout the self-checkout has in new our product metric. to basis a tracking quarter Our strong started allowed have attach since majority the our market. this a on shipments estimate placements self-checkout on contract

and another good done be are we we quarter, much operating taking reinforce right to this While build in there's and steps half, work improve can to upon momentum. still our second is the the

even as On the deliver backlog more been our able customers of alluded to strong I as product our XXXX. earlier, remains in to have first half Slide XX, we

primary backlog our accelerate Going objective to be conversion. forward, will

supply We vendor will our relationships. continue to strengthen and chain

to fronts, execute backlog we normalizing quarterly Xx is goal product long-term these revenue. X.Xx As our on to

Spain. and and of and the of and banks we evident and notable attachment this Retail stores nearly an Britain reiterate service a $XX Service in had ATM Similarly, a Banking, I X-year stable on in of some revenue. in with valued $X quarter. also as In support X-year agreement agreement the the long-term, at a agreement more major Great drives covering more service Turkey. major about software financial largest wins the a in a I secured of also $X strong have private supermarket service a million chain institution French with million lot activity side, at won a with valued product we X,XXX our service $X a business, than strength must is major one that retailers with This agreement it million the talked million is

over more our turn go I back will to performance. into it second Jim quarter now to detail on

James Barna

Octavio. Slide you, on XX. Starting Thank

$XXX year approximately period, up XX.X% driven of volumes. was by primarily million revenue the higher Banking versus product prior

delivery prior the supply our on strong revenue and tied period, offering. product by software capitalize by as from allowing to work $XXX from profit to up chain to in benefit second approximately X% price lower for the Banking the to the continue million ] in as the versus logistics delivery Service costs. [ the demand us and Series logistics $XX the of was We revenue. increased year well year-over-year improving higher products is that which adjustments environment, of with quarter profitability DN million driven installation impact improved in benefits quarter gross strong higher was

the gross of to to is resources, support higher lower year the adding external duplicative first we prior delivery XX.X% resource This and and To to the as and the between resources region which the greater half market of the by Some in first customer transition the quarter. down gross in to compared America by changed and in an to upside resulted have compared the period we the service during internal Banking additional points transition. impacted which in in quarter ensure mix tempered had with of more service, costs up year, this costs was in satisfaction some basis was North slightly we XXX products improved model. the internal quarter, margin profit quality

the self-checkout versus and self-checkout quarter Slide by revenue. revenue XX. was Retail was as EPOS year-over-year. higher the $XX to for this the as was an but to continues slightly revenue well product higher basis service volume flat QX and margin software growth revenue offset points profit year third-party XXXX, self-checkout area slightly from lower by Moving of of the $XXX Retail driven offset this prior down delivery increased million company, supply XX quarter million in was contract compared to by units revenue lower contract environment. benefited X% be favorable revenue. Retail the year-over-year period. quarter and logistics Service base growth primarily of in in by was Product due to in second chain improving up to gross mix our as

Service the margins This were favorable basis in XX% is in of in contract of benefit base. gross to quarter, Retail period. compared the which cost year earlier resulted the prior and to the year-over-year margin due self-checkout XX initiatives savings points up growth

wanted from outlook as in a Now basis of are meaningful on range that the Slide of and tracking profitability we through XX, the second on to quarter, driving year-to-date the that revenue as we a improvements part year-over-year year XXXX, we QX restructuring share published full process perspective. are Also, May. was in late towards

and discipline a facility. Now proceeds course of Diebold operations. turning to I XXX our has high XX significant this days the covered more of already Throughout XX. time the little from normalizing had We wanted the the via DPO on a on its DIP in reduced operational but from to days given earlier to XXXX, I Slide utilizing increased spend has impact highlights the presentation, it

to a relationships. strengthening a basis expect goal XX of go-forward of supplier manage target global with DPO on to the days We further

The evaluate implement support procurement company optimization initiatives continues and to supplier and supply costs. to chain reduce relationships

contracts opportunity the to company balance. and line the to provide much product our presentation, with reliability another We mutually suppliers. strength capital deferred initiatives negotiate component Also, the position beneficial will shown expect more to these an and bolster in not for This it's from improvement have and normalization results new to now collaborative explicitly working our bid we of enable a expand the that is in improved which margins. of revenue while top should be

let you walk On cash through Slide free the quarter. for flow me XX,

a of nonrecurring Excluding for that approximately are to been to capital with vendors position. items cash million $XX free revenue associated These elevated uses million some investment payments would of normalization uses certain restructuring of have costs cash transaction. long-term the our These million represent nature, quarter, in in approximately the cash in balance, burn down working short-term the and the include: position, flow normalize $XX of deferred breakeven. on the quarter effectively DPO $XXX our

the $XXX cash cash year of to million. and expect We equivalents end the at exceed

Now to cover I over our will turn back to Octavio outlook. it

Octavio Marquez

XX. outlook the on our for year of remainder the to Turning Slide

approximately We of and to the in what of XXX and year-over-year deliver in with in with $X.XX be billion XX,XXX XX,XXX revenue XXXX, device X.X% previously. revenue. aligns expected are ATMs, approximately $XXX line models Adjusted during is $XXX committed we've self-checkouts million revenue point-of-sale EBITDA is range to in Total in to to restructuring disclosed in units million represents the to which provided the which billion, $X.X growth expected process the range debt May. be

first As for our towards year, you the from tracking can the see we are of end range higher the XXXX. of half results

to moving Slide Lastly, XX.

company the that of mindset. share The market. transformation There XXXX today improving to to to priorities continuous continue efficiency to in will service, of improving optimizing growth, EBITDA performance include of these The flow accelerating and improved model and our our operations, free conversion. management, quarterly improved earnings quality to -- business both and key to office improvement our will improvement operating high-level We wanted and out growing beyond. capital Looking significant the into our additional is in linearity the higher program and implement program broader linked all sources with of management of that opportunity translate you govern customer better are framework. cash we priorities working view a a -- the revenue

Board our top of our talent We Directors led in program. ranks and to implement governance will identified maintain the enhancements employee by in acquired strong framework the our retain

we details We develop going the to we and with benefit value these quantify and unlock share you further plan more will be forward. sure programs as ultimate to

Q&A. that, we would the open And now to like call with for

Operator

comes D.A. Summerville from question today with first Davidson. Matt The line of the Instructions] [Operator

Matt Summerville

-- -- you're help Thanks. and understand comfortable me bit ask America sort lot Maybe not in piece when acute me issues just business? could North a start the here, there's is Can get Services we business. start chronic obviously, what but And away? let's in go help detail what they that more to the in the are of experiencing of a you

Octavio Marquez

Sure, to from good hear Matt, you. and

the you for service have with always third-party that with and past So can market attrition the resources. positions, little years, a bit supplemented we've we dealt the higher board -- all for across imagine, as in

we one strong satisfaction improving the my As at satisfaction. look -- service a driver and important customer of key the across the into or transition is -- belief that company board, stronger is customer most what's -- it's of

us trained So is that that managed better having can key internal can forward. more be for better resources going be

this during we've number as quarter, own there's a clearly, of and resources. make on reliance the customers of transition, little as of our smooth in shift -- to possible. third-party couple as of So implemented the we overlap increasing transition This this reducing during want to past resources that cost we bit our service months,

forward, eye over So will our that we And be of we having a we're on. is keep as close very confident key a control very we that a more move every this aspect -- for something have service us. delivery

Matt Summerville

it. others heard follow-up, what want been you to from earnings flow just company. talk different has since I've theme I've followed free What's dealt cash then do the team linearity. drive forward in the Got I've the better linearity as you're And every about than trying years, know, to mean covered have XX guys going I've doing with past? tried I management versus as flow I a what to a cash probably for and company about more

Octavio Marquez

XX years us. Thank covering you, Matt, for and thanks the

me you what's different. Let tell

is to, in and thing I this first that the So mentioned I you point the -- call. would Matt,

of $X.X be linear. should fairly revenue, have We which service billion

some have of the that business aligning always that the So recurring business have. part The our of the can we revenue always slow that that need is we're year, as variability that that we of product to managing the the of that provide and had expenses make deploying solid and inventory and in inventory part correctly to last then sure of the quarters year building progresses, back it into year up -- building the starting during cash. turning the seasonality then and

the the First depending one, with product thing said, that XX of we of is very -- have, next, XX have I revenue. the backlog that's on different visibility months to as we strong region we

been the kind process, So through building the those then tell throughout the revenue throughout a the is and in and much XXX meet deploying year X,XXX on year, during to that that to plan we've customers important if we're again, I and developed manufacturing have behavior installation then that, in them change building this year. our industry that of you before the example, deliver expect a would actually X,XXX customers. year every of need in our us planning support the aligned devices We're that banks that the planning this to not schedule. installation jointly that devices done with their customer had without devices We're to second so some more very linear starting month planning thing to of we're where they schedules. done of bulk install would QX this and on

revenue -- rate also for been the product it's profile. that, at way business. in thanking that call a plan year, a the So our to sure supply our is frankly, our producing the been stable effort are all customers. around lot in and throughout truly clearly way our we chain, conduct a of aligned started that the a we business, change factories as And I and It's our making change

lot that supply now the it and X a in can better level little with with But backlog what still be has own we every same. doesn't our close than much with try Matt at in chain business. of strong operating with linear. that again, with quarter alignment a a the to the will delivery our customers, how quarters years, schedules mean, We're will make I past once bit That frankly, is see always seasonality the our the more

Operator

question next from The Northcoast comes with Mehta Research. Kartik

Kartik Mehta

-- a start we could maybe Maybe picture bigger Octavio. question.

bottom is as line realistic do you're is working a expectation? what a backlog. has company? little top bit line, we think I as company because normalize, prospects reconstituted, think for the a the know odd realistic through XXXX the do what But Now you you is

Octavio Marquez

documents. can that well say accelerating want we've to the future about forward. would of today. ahead range see much you cleansing We're the think. towards hopefully, very self-checkout talk to I We're what provided about our revenues. tracking going technology both I strong end the see the our we Again, for very performance. and I demand that solutions too recycling in We're for our be strong -- tracking

we the see will particularly not in We're customers growth in is will in company opportunity having Banking, for we revenue expectation demand my America, keep continue revenue than -- using Retail in So that. continue see see that But that Banking. more growth. strong to recycling, North for do as we

And enhanced focus our liquidity as We've sheet. I our we've balance cleaned is said, our up position.

and to now need being with this that on. We the to returner Our cash focus now flow. shift where is focused EBITDA do operates and focused that team the we're that in been strong sure everyone needs has That the of that's of company management really, cash we me how convert And the into business. a on. really one to and mentality things company of make

be order to to have it super in Kartik, doesn't achieve And model. a that high-growth

of it's We we strong forward. translating cash but -- EBITDA move growth expect will clearly and as the more operating that But that we into grow. discipline

Kartik Mehta

share And you Octavio, because market the of lot obviously, one about of a talking has taking in. your been are competitors situation

as a do look you out conversations bankruptcy? of you have kind Retail, what As what see came both is -- and the share market and company gained you as what Banking what's lost the customers, or as you backlog happened, of or might our at that with

Octavio Marquez

medium all multiple global I positive. I customers, I'm all customers extremely process, large, retailers very with conversations as had our because the grateful banks or restructuring were this community Kartik, our to both mentioned, So through credit and banking unions,

self-checkout that our the and in as we growth. our I revenue growing numbers, self-checkout in remember, journey that when and retail would believe focus of I you our grew space, the self-checkout be predominant that look the self-checkout will is shipments driver at tell

in most Retail, are we the in do placements market. So of new the that shipments

I how but into that placements new in So don't know market. clearly the plays it's markets,

over and talked lot when Banking I about we've look quarters. the again, couple a past And at of our units

ATM it I If believe shipments hard revenue that the find and than growing, our to we're is growing you see how not faster much market.

So didn't that the in ultimate of How I the of What's be encouraged can me we be experience the position honest, any that so analysts -- the rooting during when I that for confident process. me, we strong need numbers, do, because things we end count will give but their to feel the help by fairly test cancellations out at those year and are period? we're -- a and that coming how and during more we you Diebold was customers asking help you. what many can and this you to we

things when the these again, year, feel Kartik, share So the did. we end to that defer we're either fairly I us or market. the how people the that count to in need maintain everything so of -- share our our tell But grow optimistic doing I'll we

Operator

questions. further any will to closing call no for Sikora back remarks. turn have We I Chris the

Christopher Sikora

Relations, end me out other we for free there will questions, you. to reach the thank today's Thank Investor in follow-up today. call. are With you please time if And that, feel any and to

Operator

disconnect now for lines. Thank you your us everyone, and concludes you, our joining This may today. call,

Diebold Nixdorf (DBD) 14 Aug 232023 Q2 Earnings call transcript