Diebold Nixdorf (DBD) Q4 2018 earnings summary

Executive summary

• 2018 results fell short of targets amid supply-chain and services issues, excess complexity, and cash outflows for German minority-shareholder redemptions; transformation actions gained momentum in H2.

• H2 generated the strongest YoY revenue growth since the combination and more than 70% of full-year non-GAAP operating profit.

Financial highlights

• FY18 net sales were $4,578.6, down from $4,609.3 in FY17; favorable currency of $55.4 and prior-year deferred-revenue purchase-accounting adjustments affected comparisons.

• Operating loss widened to $362.9 from $93.5; net loss from continuing operations was $566.0 vs. $213.9, and basic and diluted loss per share was $7.48 vs. $3.20.

• Q4 net sales were $1,289.8 vs. $1,249.9; gross profit was $207.8 vs. $286.1 and net loss was $127.5 vs. $102.7.

• Operating cash flow was negative $104.1 vs. positive $37.1; cash, cash equivalents and restricted cash ended FY18 at $458.4 vs. $543.2.

Outlook and guidance

• Revenue streams were expected to remain relatively stable in 2019 and expand modestly thereafter; ATM systems revenue trajectory was expected to improve, especially in the largest markets.

• DN Now targets $400 of gross annualized savings through 2021, including $160 anticipated in 2019; $58.9 of FY18 restructuring charges related to DN Now.

• FY19 capital expenditures were projected at $80, primarily for product-line improvements; retirement-plan contributions and direct benefit payments were expected to total $50, with $13 reimbursement anticipated.