Diebold Nixdorf (DBD) Q4 2020 earnings summary

Executive summary

• Resilient 2020 performance amid COVID-19: revenue declined 11.5% YoY, while operating profit turned positive and adjusted EBITDA rose 13% to $453M.

• Momentum strengthened in H2: product orders rose 22%, backlog increased 23% YoY to $981M, and revenue grew sequentially by more than 10% in both Q3 and Q4.

Financial highlights

• FY 2020 revenue was $3.902B, down 11.5% reported and 10.7% at constant currency; net loss was $267.8M versus $344.6M in 2019.

• Operating profit was $24.0M versus a $26.6M operating loss in 2019; reported gross profit was $1.035B versus $1.067B.

• Adjusted EBITDA reached $453M, up 13%, with an 11.6% margin, up 250 bps YoY; DN Now generated approximately $165M of gross savings.

• Adjusted free cash flow was $57M; GAAP operating cash flow was $18M, pressured by restructuring payments, delayed collections and higher safety-stock inventory.

Outlook and guidance

• 2021 outlook: revenue of $4.0B-$4.1B, representing 3%-5% growth; adjusted EBITDA of $480M-$500M.

• 2021 targets include free cash flow of $140M-$170M and ROIC of 15%; cumulative free cash flow target exceeds $600M through 2023.

• DN Now gross annualized savings target is approximately $500M through 2021, with approximately $160M expected in 2021; capital expenditures, capitalized software and cloud implementation costs are expected to total approximately $85M.