Diebold Nixdorf Incorporated · NYSE:DBD
Diebold Nixdorf — Q4 2020 Earnings Presentation
31 slides from Diebold Nixdorf's earnings presentation, Feb 10, 2021
Slide 1: Fourth Quarter 2020 Earnings
Fourth Quarter 2020 Earnings February 10, 2021 DieboldNixdorf.com
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: DBD Investment Thesis
DBD Investment Thesis Transforming the Leveraging Our Business Model to Generate Competitive Differentiation Strong Free Cash Flow1 for Growth 3 | DIEBOLD NIXDORF 1) Non-GAAP metric
Slide 5: Transformation Programs Well Underway to Strengthen Free Cash Flow
Transformation Programs Well Underway to Strengthen Free Cash Flow Targeting ~$160M of DN Now savings in 2021 ... our 3rd and final year of the Transformation Driving strong free cash flow1 outlook for 2021 Restructuring to conclude in 2021 $140M - $170M ... targeting a maximum spend of $50M Digital
Slide 6: Leveraging Our Competitive Differentiation For Growth
Leveraging Our Competitive Differentiation For Growth Delivering greater customer value from digitally-enabled solutions Banking Cloud-native Supporting Our Customers Digital DN Series All Connect Managed VynamicTM Transformation Agenda ATMs Data Engine Services Payments Retail DN Series EASY Cloud-
Slide 7: Vynamic Payments: Cloud-Native Platform
Vynamic Payments: Cloud-Native Platform Any... Market Opportunity Channel Self-Service / ATM POS – Store ▪ New payment types emerging Branch / IVR ▪ Payment volumes expanding globally Digital Wallet / Token E-Commerce ▪ Legacy bank payment platforms fragmented, expensive, and difficult to adapt to p
Slide 8: Strong 2020 Results and 2021 Outlook
Strong 2020 Results and 2021 Outlook Delivered Strong 2020 Results ...and Planning for Stronger Results in 2021 ▪ Strengthened competitive ▪ Revenue position with digitally-enabled solutions $4.0 - $4.1 billion ▪ 2020 order activity increased ▪ Adjusted EBITDA1 despite COVID-19 complexities $480 - $
Slide 9: Strong Financial Results in 2020
Strong Financial Results in 2020 Product Backlog1,2 Total Revenue2 $981 $1,106 $796 Revenue rebounding $995 from COVID-19 +23% $890 related delays 2019 2020 Q2-20 Q3-20 Q4-20 Adjusted EBITDA and Margin1,2 Free Cash Flow1,2 $453 $93 $401 11.6% $57 9.1% 2019 2020 2019 2020 8 | DIEBOLD NIXDORF 1) Non-G
Slide 10: Financial Highlights of 2020
Financial Highlights of 2020 Total Revenue Gross Profit1 & Gross Margin1 $303 $296 $4,409 $1,109 $1,099 $1,152 $1,106 $3,902 28.2% 26.8% 26.3% 25.2% 2019 2020 2019 2020 Q4-19 Q4-20 Q4-19 Q4-20 Adj. EBITDA1 & Adj. EBITDA Margin1 Free Cash Flow1 $186 $453 $93 $131 $128 $401 $106 11.6% 11.6% $57 11.4%
Slide 11: Eurasia Banking Highlights
Eurasia Banking Highlights Revenue ($M) Gross Profit & Margin1 -3% as reported $127 Gross margin was relatively 29.5% $123 unchanged despite lower revenue $432 $419 +1% adjusted for currency & Q4 divestitures 29.5% 29.4% Q4-19 Q4-20 Q4-19 Q4-20 -13% as reported Gross margin expanded 110 bps -8% adju
Slide 12: Americas Banking Highlights
Americas Banking Highlights Revenue Gross Profit & Margin1 -10% as reported $108 Gross margin expanded 80 bps 29.5% $100 despite lower revenue -7% adjusted for currency & Q4 $418 $375 divestitures 26.7% 25.8% Q4-19 Q4-20 Q4-19 Q4-20 -12% as reported Gross margin expanded 520 bps $415 despite lower r
Slide 13: Retail Highlights
Retail Highlights Revenue Gross Profit & Margin1 +3% as reported Gross margin expanded -1% adjusted for currency $73 80 bps Q4 $302 $312 & divestitures $68 23.3% 22.5% 23.4% 4Q-19 4Q-20 4Q-19 4Q-20 -9% as reported and adjusted Gross margin expanded for currency & divestitures 290 bps despite lower F
Slide 14: Leverage and Debt Maturities
Leverage and Debt Maturities Leverage Ratio1 Debt Maturities4 5.5 • No material maturities until November 2023 4.4 4.4 Facilities Balances Interest Rate Maturity & YE2020 ($M) Index & Margin4 Termination Dates < 3x Revolving Credit $60 LIBOR +4.25% $39M in 2022 $330M in 2023 YE2018 YE2019 YE2020 202
Slide 15: Income Taxes
Income Taxes Tax Structure Financials Tax Principals 2020A 2021E in US & Germany • ~$37M cash tax payments • ~$35M cash tax payments • Consolidated pre-tax loss • Estimated effective tax rate 25% - 30% Provide Pay for • Consolidated pre-tax income Products & Products & Support Support Key Considerat
Slide 16: Outlook for 2021
Outlook for 2021 2020A 2021E Key Expectations2 Total Revenue growth led by DN Series and SCO adoption $3.9B $4.0 - $4.1B Revenue Completed divestitures and related actions create a $50M headwind YoY improvement2 driven by + Higher gross profit from revenue growth & $160M DN Now savings Adjusted $453
Slide 17: Establishing 2023 Financial Targets
Establishing 2023 Financial Targets Return on Revenue Profitability Free Cash Flow Leverage Ratio1,3 Invested Capital1,2 2% - 4% > 13% ~ 50% conversion of > 20% < 3X CAGR Adjusted adjusted EBITDA to levered EBITDA1 Margin free cash flow1 > $600M cumulative 3-year levered free cash flow1 1) Non-GAAP
Slide 18: Focusing on Environmental, Social and Governance
Focusing on Environmental, Social and Governance Suppliers Advancing our solutions and business model to reduce our carbon footprint, mitigate risks and generate value Employees Communities for all stakeholders Sustainable Supply Chain Environment, Health Global Customers & Operations & Safety Citiz
Slide 19: Supplemental Slides
Supplemental Slides 18 | DIEBOLD NIXDORF
Slide 20: Transformation Update
Transformation Update Increasing gross savings target from ~$470M to ~$500M through 2021 Timeline for completion 2019 2020 2021 Streamline operating model Benefits Simplify product portfolio & manufacturing footprint Operational Services modernization plan Excellence • Gross savings target of ~$500M
Slide 21: DN Now Transformation Expense and Cash Flow Bridge
DN Now Transformation Expense and Cash Flow Bridge GAAP ▪ Majority of expense is severance related 1 Restructuring to headcount reduction Expense Cumulative ($ in millions) FY 2018 FY 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 ▪ One-time implementation costs: total – Accounting compliance, includi
Slide 22: Q4 2020 Profit & Loss Statement
Q4 2020 Profit & Loss Statement Reconciliation GAAP to non-GAAP ($Millions) Amortization of Wincor Nixdorf Divestitures 2020 % of Net Restructuring and DN Now purchase accounting intangible Legal / deal and fixed asset Other 2020 % of Net (GAAP) Sales transformation expenses assets (non-cash) expens
Slide 23: Q4 2019 Profit & Loss Statement
Q4 2019 Profit & Loss Statement Reconciliation GAAP to non-GAAP ($Millions) Amortization of Wincor Nixdorf Divestitures 2019 % of Net Restructuring and DN Now purchase accounting intangible Legal / deal and fixed asset Inventory gain Other 2019 % of Net (GAAP) Sales transformation expenses assets (n
Slide 24: Full Year 2020 Profit & Loss Statement
Full Year 2020 Profit & Loss Statement Reconciliation GAAP to non-GAAP ($Millions) Loss making Amortization of Wincor Nixdorf Divestitures Costs related to contract related to Other 2020 % of Net Restructuring and DN Now purchase accounting intangible Legal / deal and fixed asset previously divested
Slide 25: Full Year 2019 Profit & Loss Statement
Full Year 2019 Profit & Loss Statement Reconciliation GAAP to non-GAAP ($Millions) Amortization of Wincor Nixdorf Divestitures Other 2019 % of Net Restructuring and DN Now purchase accounting intangible Legal / deal and fixed asset Acq. Inventory gain non-routine 2019 % of Net (GAAP) Sales transform
Slide 26: YoY Revenue Variance for FX, Divestitures and Related Actions
YoY Revenue Variance for FX, Divestitures and Related Actions Reconciliation GAAP to non-GAAP ($Millions) Segment View $Millions Q4-20 Q4-19 Variance F/(U) Variance % 2020 2019 Variance F/(U) Variance % Eurasia Banking Revenue (GAAP) 419 432 (13) -3.2% 1,431 1,650 (219) -13.4% FX Impact - 20 (20) n/
Slide 27: YoY Gross Profit Variance for FX, Divestitures and Related Actions
YoY Gross Profit Variance for FX, Divestitures and Related Actions Reconciliation GAAP to non-GAAP ($Millions) Segment View $Millions Q4-20 Q4-19 Variance F/(U) Variance % 2020 2019 Variance F/(U) Variance % Eurasia Banking Gross Profit (Non-GAAP) 123 127 (4) -3.2% 428 476 (48) -10.2% FX Impact - 6
Slide 28: Gross Profit and Operating Expense Reconciliation
Gross Profit and Operating Expense Reconciliation Reconciliation GAAP to non-GAAP ($Millions) Gross Profit – Segment View Q1-19 Q2-19 Q3-19 Q4-19 2019 Q1-20 Q2-20 Q3-20 Q4-20 2020 Revenue (GAAP) $1,028 $1,150 $1,079 $1,152 $4,409 $911 $890 $995 $1,106 $3,902 Americas Banking 363 420 404 418 1,604 34
Slide 29: Adjusted EBITDA
Adjusted EBITDA Reconciliation GAAP to non-GAAP ($Millions) Adjusted EBITDA $Millions Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Revenue (GAAP) $1,064 $1,106 $1,119 $1,290 $1,028 $1,150 $1,079 $1,152 $911 $890 $995 $1,106 Net income (loss) ($66) ($116) ($220) ($128) ($13
Slide 30: Free Cash Flow
Free Cash Flow Reconciliation GAAP to non-GAAP ($Millions) Free Cash Flow Reconciliation Q1-19 Q2-19 Q3-19 Q4-19 2019 Q1-20 Q2-20 Q3-20 Q4-20 2020 Net cash provided (used) by operating activities ($57) ($11) $75 $128 $136 ($78) ($90) ($29) $215 $18 (GAAP measure) Excluding the impact of changes in c
Slide 31: Return on Invested Capital and Net Debt
Return on Invested Capital and Net Debt Reconciliation GAAP to non-GAAP ($Millions) Return on Invested Capital (ROIC) Net Debt 2019 2020 $ Millions 12/31/19 12/31/20 Revenue 4,409 3,902 Cash, cash equivalents, restricted cash and Net Operating Profit after Tax (NOPAT) 1: short term investments (GAAP