Hardware

Diebold Nixdorf earnings beat Q2 estimates

July 30, 2020

Despite global economic concerns due to the coronavirus pandemic, Diebold Nixdorf reported earnings improved in the second quarter, which was driven by the continued execution of DN Now transformation initiatives and the overall resiliency of the company's business model.

GAAP loss per share of $0.31 during the quarter improved versus the $0.66 loss per share in the prior year; on a non-GAAP basis, earnings of $0.38 per share improved versus $0.06 per share in the prior year.

Revenue of $890.5M decreased 22.6% or $260 million in the quarter, compared with year-ago figures. Revenue figures reflected about $108 million in unplanned reductions related to COVID-19, planning delays and $113 million in previously concluded divestitures.

"Our second quarter financial results demonstrate the resiliency of our business during the COVID-19 pandemic as well as solid execution of our DN Now transformation initiatives," Gerrard Schmid, Diebold Nixdorf president and chief executive officer, said in the report. "As the second quarter progressed, business activity picked up and the conversion rate to profitability was strong. For the quarter, GAAP operating margin expanded 170 basis points to 2.3% while non-GAAP operating margin increased 460 basis points to 11.0%. We are also pleased with the strong level of investor support for our recent refinancing, which further strengthened our balance sheet."

The company made significant progress with next-generation DN Series ATMs including new orders with a top 10 and a top 25 financial institutions in the U.S. It also secured a new contract in Egypt for 350 DN Series ATMs, plus remote monitoring and cash deposit software. Globally, the DN Series certification projects nearly doubled since the beginning of the year to 475.

• Diebold Nixdorf continues to lead the Americas region in deposit automation technology with a $13 million contract for cash recycling ATMs and related services at one of the largest financial institutions in Latin America.

• The company signed a three-year product and managed services contract with A.S. Watson, an international health and beauty retailer with over 15,700 stores across 25 markets, to support its digital transformation strategy.

• Diebold Nixdorf secured a new $17 million contract to deliver managed services, new point-of-sale and self-checkout solutions across several European countries for one of the world's largest home furnishing retailers.

• The company extended a strategic relationship with Accenture to accelerate digital transformation and cloud migration activities.

"While overall macroeconomic conditions remain uncertain, our execution and improving visibility enables the company to reiterate its 2020 outlook for revenue and adjusted EBITDA. Additionally, our outlook for net cash provided by operating activities and free cash flow has improved," Schmid said in the report. "Looking forward, we remain focused on operating margin expansion through our DN Now work streams, further optimizing our capital structure and continuing to differentiate our solutions to pursue growth opportunities."