Slide 1: Investment Community Conference Call First Quarter 2020 Earnings
DieboldNixdorf.com Investment Community Conference Call First Quarter 2020 Earnings May 5, 2020
Slide 2: Use of non-GAAP Financial Information
Use of non-GAAP Financial Information To supplement our condensed consolidated financial statements presented in accordance with GAAP, the company considers certain financial measures that are not prepared in accordance with GAAP, including non-GAAP results, adjusted diluted earnings per share, free
Slide 3: Forward-looking Statements
Forward-looking Statements This document contains statements that are not historical information are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding potential impact of the ongoing coronavirus (COVID-19) pandemic
Slide 4: Our Priorities During the COVID-19 Crisis
Our Priorities During the COVID-19 Crisis Guided by Diebold Nixdorf values Protecting the health and well-being of employees Fulfilling our mission as an essential business provider ~100% of banking and ~65% of our retail revenue is from customers who are running essential businesses Consisten
Slide 5: Responding with a Comprehensive Set of Actions
Responding with a Comprehensive Set of Actions Customers & Solutions Employees & Communities Delivering strong service levels - even in the hardest hit regions Proactively caring for 22,000 employees Reinforces the criticality of ATM/retail checkout channels Leveraging our manufacturing capa
Slide 6: Diebold Nixdorf's Business Model is Resilient
Diebold Nixdorf’s Business Model is Resilient Services Products Software Strong, multi-year recurring Strong product backlog and Mix of recurring revenue from revenue from maintenance & solid sales pipeline entering licenses/ maintenance and Key characteristics managed services Q2-20 project-based r
Slide 7: Sustained Momentum in Strengthening Diebold Nixdorf
Sustained Momentum in Strengthening Diebold Nixdorf Continued solid execution of Incremental Actions Underway Targeting gross savings Targeting incremental savings of ~$130M during 2020 of $80M - $100M • Leveraging operational rigor and net working • Suspended major internal capital projects capital
Slide 8: Actions Are Driving Higher Quality Revenue
Actions Are Driving Higher Quality Revenue Revenue Gross Profit1 Total Services Products Software $254 $247 Includes $7M of FX headwinds YoY Q1-19 Revenue $1,028 $544 $376 $108 $135 $136 Services Divestitures ($13) ($7) $0 ($6) In-line with $82 $74 Products pre-COVID Reducing low-margin ($17) ($15)
Slide 9: Harvesting Efficiencies from Functional G&A Costs in 2020
Harvesting Efficiencies from Functional G&A Costs in 2020 Focus areas • Finance Transformation – regionalizing, centralizing and automating core functions • Optimizing Information Technology Spend – optimizing legacy platforms and enhancing digital capabilities • Streamlining Procurement – applying
Slide 10: Q1 2020 Financial Highlights
Q1 2020 Financial Highlights $ millions Q1-20 Q1-19 YoY variance In-line with expectations Revenue $911 $1,028 • $67M from planned reduction of low-margin business and non-recurring projects • $13M from divestitures • $19M growth from incremental volume • $33M from COVID-19; $23M currency headwind D
Slide 11: Eurasia Banking Highlights
Eurasia Banking Highlights $383 $360 Deliberate actions to drive higher quality revenue $311 • Divestitures Revenue ($M) • Planned reduction of low-margin business Additional factors include • Non-recurring projects as planned; partially offset by incremental activity • COVID-19 1 Q1-19 Q1-19 adj Q1
Slide 12: Americas Banking Highlights
Americas Banking Highlights $363 $356 $345 • Deliberate actions to drive higher quality revenue Revenue ($M) • Non-recurring projects in North America; partially offset by growth in US regional financial institutions • Software growth 1 Q1-19 Q1-19 adj Q1-20 $104 and Gross Margin1 Gross Profit ($M)
Slide 13: Retail Highlights
Retail Highlights $283 $275 $256 YoY variance from Revenue ($M) • Non-recurring POS installations in Europe as planned • Partially offset by SCO and software growth • COVID-19 1 Q1-19 Q1-19 adj Q1-20 $60 and Gross Margin1 $56 Gross Profit ($M) $54 YoY increase driven by 23.4% 19.7% 19.8% • Favorable
Slide 14: Net Working Capital and Cash Update
Net Working Capital and Cash Update Net Working Capital as a % of TTM Revenue1 Free Cash Flow2 -580 bps YoY drivers 24.0% 22.5% 22.1% + Higher adjusted EBITDA 18.3% 19.1% 17.7% 15.6% + Net working capital improvements 13.9% 13.3% ($65) ($72) + Reduced capex and restructuring ~$35M of higher bonus pa
Slide 15: Debt Maturities and Leverage
Debt Maturities and Leverage Debt Maturity Schedule (M) Leverage Ratio2 $1,400 5.6x $1,200 5.0x 4.7x $1,000 $344 Revolver1 and $359 4.4x 4.4X Term Loan A maturing April 30th $800 $600 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 $400 $570 Term Loan A-1 maturing August 30th • Net debt3 of $1,908M $200 • Leverage ra
Slide 16: Under Challenging Scenarios, Diebold Nixdorf's Model Remains Resilient
Under Challenging Scenarios, Diebold Nixdorf’s Model Remains Resilient Services Products Software 2019 Revenue (M) $2,231 $1,710 $469 Gross Margin1 26.5% 21.3% 33.1% Revenue Impact Mild 2 Moderate Mild Expectations Gross Margin1 Improved Broadly stable Improved + Services modernization plans + Varia
Slide 17: Diebold Nixdorf is Well-Positioned to Persevere
Diebold Nixdorf is Well-Positioned to Persevere Designated as Essential Service Provider to banks and retailers Criticality of ATM, POS & self-checkout channels have been reaffirmed Strong recurring revenue streams – trusted technology partner Resilient leadership team with a demonstrated tr
Slide 18: Supplemental Schedules
On Diebold Nixdorf Nn Supplemental Schedules
Slide 19: YoY Revenue Variance for FX, Divestitures and Related Actions
YoY Revenue Variance for FX, Divestitures and Related Actions Reconciliation GAAP to non-GAAP ($Millions) Segments Business Lines $Millions Q1-20 Q1-19 Variance F/(U) Variance % $Millions Q1-20 Q1-19 Variance F/(U) Variance % Eurasia Banking Revenue (GAAP) 311 383 (72) -18.9% Services Revenue (GAAP)
Slide 20: YoY Gross Profit Variance for FX, Divestitures and Related Actions
YoY Gross Profit Variance for FX, Divestitures and Related Actions Reconciliation GAAP to non-GAAP ($Millions) Segments Business Lines $Millions Q1-20 Q1-19 Variance F/(U) Variance % $Millions Q1-20 Q1-19 Variance F/(U) Variance % Eurasia Banking Gross Profit (Non-GAAP) 90 109 (19) -17.8% Services G
Slide 21: Q1 2019 Profit & Loss Statement
Q1 2019 Profit & Loss Statement Reconciliation GAAP to non-GAAP ($Millions) Restructuring and Wincor Nixdorf DN Now Divestitures purchase Other 2019 % of Net transformation Legal / deal and fixed accounting Inventory non-routine 2019 % of Net (GAAP) Sales expenses expense asset sale adjustments char
Slide 22: Q1 2020 Profit & Loss Statement
Q1 2020 Profit & Loss Statement Reconciliation GAAP to non-GAAP ($Millions) Restructuring and Wincor Nixdorf Loss making DN Now Divestitures purchase Costs related to contract related to Other 2020 % of Net transformation Legal / deal and fixed accounting previously divested Inventory discontinued n
Slide 23: Gross Profit and Operating Expense Reconciliation
Gross Profit and Operating Expense Reconciliation Reconciliation GAAP to non-GAAP ($Millions) Gross Profit – Segment View Operating Expense Q1-19 Q2-19 Q3-19 Q4-19 2019 Q1-20 Revenue (GAAP) $1,028 $1,150 $1,079 $1,152 $4,409 $911 Total Operating Expense (GAAP) $271 $272 $248 $303 $1,094 $253 Selling
Slide 24: Adjusted EBITDA
Adjusted EBITDA Reconciliation GAAP to non-GAAP ($Millions) $Millions Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Revenue (GAAP) $1,064 $1,106 $1,119 $1,290 $1,028 $1,150 $1,079 $1,152 $911 Net income (loss) ($66) ($116) ($220) ($128) ($132) ($55) ($35) ($123) ($93) Income tax (benefit) ex
Slide 25: Free Cash Flow and Net Debt Reconciliations
Free Cash Flow and Net Debt Reconciliations ($Millions) Q1-18 Q2-18 Q3-18 Q4-18 2018 Q1-19 Q2-19 Q3-19 Q4-19 2019 1Q-20 Net cash provided by (used in) operating activities - continuing - GAAP ($142) ($114) ($115) $268 ($104) ($57) ($11) $75 $128 $136 ($80) Excluding the impact of changes in assets h