Diebold Nixdorf (DBD) Q4 2019 earnings summary

Executive summary

• 2019 revenue was $4,408.7 million, down 3.7% reported; excluding currency, divestitures and account rationalization, pro forma revenue grew 1.8% YoY.

• Transformation initiatives lifted adjusted EBITDA 25% to $401 million and free cash flow to $93 million; GAAP net loss was $344.6 million.

• Gross margin improved as services modernization, product mix and operating efficiencies advanced; results included substantial currency headwinds and continued restructuring costs.

Financial highlights

• Revenue was $4,408.7 million versus $4,578.6 million in 2018; unfavorable currency impact was $151.0 million, primarily from the euro and Brazil real.

• GAAP gross profit was $1,067.1 million, up $168.3 million; gross margin rose to 24.2% from 19.6%.

• Operating loss narrowed to $26.6 million from $325.6 million; net loss improved to $344.6 million from $528.7 million.

• Net loss attributable to shareholders was $341.3 million, or $4.45 per diluted share, versus a $531.4 million loss, or $6.99 per share, in 2018.

• Net cash from operations was $135.8 million, compared with $104.1 million used in 2018; free cash flow was $93 million.

Outlook and guidance

• DN Now gross annualized savings target increased to $440 million through 2021, with approximately $130 million expected in 2020; 2019 achieved approximately $175 million in annualized gross run-rate savings.

• Expected 2020 capital expenditures are approximately $70 million, focused on product-line improvements and infrastructure.

• Planned 2020 retirement-plan contributions and direct benefit payments total approximately $23 million; approximately $60 million of debt repayment is anticipated in 2020.

• Priorities include targeted Services and Software investments, operational streamlining, balance-sheet strengthening and growth in DN Series, AllConnect Data Engine and self-checkout solutions.