Diebold Nixdorf (DBD) Q4 2022 earnings summary

Executive summary

• FY22 revenue fell 11.4% to $3.46B, including $241.6M of unfavorable FX; excluding divestitures, sales declined $77.6M.

• Operating loss was $211.7M and net loss attributable to shareholders was $581.4M, versus profits of $137.1M and a net loss of $78.8M in FY21.

• Liquidity pressures and debt obligations raised substantial doubt about the ability to continue as a going concern; management was pursuing lender modifications and additional capital.

Financial highlights

• Net sales were $3,460.7M, down from $3,905.2M; services revenue was $2,098.9M and product revenue was $1,361.8M.

• Gross profit was $757.3M versus $1,043.4M; gross margin declined to 21.9% from 26.7%, pressured by inflation and lower fixed-cost absorption.

• Operating expenses totaled $969.0M, including $111.8M of impairment charges; operating loss was $211.7M versus operating profit of $137.1M.

• Net loss attributable to shareholders was $581.4M, or $7.36 per diluted share, versus a $78.8M loss, or $1.01 per share, in FY21.

Outlook and guidance

• Simplification and digitization initiatives target annual efficiencies above $150M by end-2023; FY22 restructuring and transformation costs were $124.2M.

• FY23 capital expenditures and capitalized software development costs are expected to total ~$50M, funded through credit facilities and business-generated funds.

• A potential first-in-last-out ABL facility was expected to add $55M of liquidity and close by March 20, 2023, subject to conditions and no assurance of completion.

• Product backlog was ~$1.4B at year-end, with orders generally expected to ship or install within 18 months; backlog is not necessarily indicative of future revenue.