DIEBOLD NIXDORF Inc
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
DBD$58.27-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0000028823-24-000076
Item 2. : Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0000028823-24-000114
Item 2. : Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 144 previous paragraphs and 88 current paragraphs.
67 unchanged; 14 reworded; 6 added; 53 removed; 10 previous and 1 current paragraphs rearranged.
Tables are not compared: 18 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
Banking net sales in both the three and nine month periods of 2024 Successor reflect higher ATM unit sales volume and relatively flat service revenue compared to the 2023 Successor and Predecessor periods. Retail net sales in the 2024 Successor periods were challenged by market headwinds due to retailer's spend environment.
Current report
Three and nine months ended September 30, 2024 (Successor) compared with each of the 2023 Successor and Predecessor Periods
Current report
2024 Successor period product gross margin for both the three and nine months ended September 30, 2024 was favorable over the 2023 Successor and Predecessor periods, primarily due to product sales unit volume at favorable pricing as well as favorable logistics costs and normalization of certain raw material costs, most notably semiconductor chips. Further enhancing product gross margin the 2024 Successor period for the nine months ended September 30, 2024 was a PIS/COFIN tax recovery in Brazil.
Current report
Service gross margin for the 2024 Successor period continues to experience compression due to investments in resource and service infrastructure, in addition to absorption of charges related to the application of ASC 852, specifically depreciation and amortization of assets that were stepped up to fair value as a result of the Company's emergence from the Restructuring Proceedings.
Current report
Three and nine months ended September 30, 2024 (Successor) compared with each of the 2023 Successor and Predecessor Periods
Current report
Reorganization items, net in the 2023 periods were directly related to the Company's filing and subsequent emergence from the Restructuring Proceedings. For further details please refer to Notes 2 and 3 to our condensed consolidated financial statements. Additional details can also be found in the consolidated financial statements and notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Removed paragraphs (53)
Previous report
SERVICES AND PRODUCT SOLUTIONS
Previous report
The Company offers a broad portfolio of solutions designed to automate, digitize and transform the way people bank and shop. As a result, the Company’s operating structure is focused on its two customer segments — Banking and Retail. Leveraging a broad portfolio of solutions, the Company offers customers the flexibility to purchase the combination of services and products embedded with software that drive the most value to their businesses.
Previous report
The Company continues to drive higher availability of its devices deployed worldwide through continuously improved processes and the increasing customer adoption of DN AllConnect SM Data Engine (ACDE), which enables a more data-driven and predictive approach to services. As of June 30, 2024, more than 250,000 of the company’s Banking and Retail devices were connected to ACDE. An instrumental solution for Diebold Nixdorf and its customers, ACDE is a key enabler to providing a higher-performing self-service channel, delivering a better consumer experience and driving loyalty while optimizing operational efficiencies for both customers and the Company.
Previous report
Banking
Previous report
The Company provides integrated solutions for financial institutions of all sizes designed to help drive operational efficiencies, differentiate the consumer experience, grow revenue and manage risk.
Previous report
Banking Services
Previous report
Banking services represents the largest operational component of the Company and includes product-related services, implementation services and managed services. Product-related services incidents are managed through remote service capabilities or an on-site visit. The portfolio includes contracted maintenance, preventive maintenance, “on-demand” maintenance and total implementation services. Implementation services help our customers effectively respond to changing customer demands and includes scalable solutions based on globally standardized processes and tools, a single point of contact and reliable local expertise. Managed services and outsourcing consist of managing the end-to-end business processes and technology integration. Our integrated business solutions include self-service fleet management, branch life-cycle management and ATM as-a-service capabilities.
Previous report
The Company's DN Vynamic software is the first end-to-end software portfolio in the banking marketplace designed to simplify and enhance the consumer experience. This platform is cloud-native, provides new capabilities and supports advanced transactions via open application program interface (API). In addition, the Company’s software suite simplifies operations by eliminating the traditional focus on internal silos and enabling inter-connected partnerships between financial institutions and payment providers. Through its open approach, DN Vynamic brings together legacy systems, enabling new levels of connectivity, integration, and interoperability. The Company’s software suite provides a shared analytic and transaction engine. The DN Vynamic platform can generate new insights to enhance operations; prioritizing consumer preferences rather than technology.
Previous report
Banking Products
Previous report
The banking portfolio of products consists of cash recyclers and dispensers, intelligent deposit terminals, teller automation, and kiosk technologies. As financial institutions seek to expand the self-service transaction set and reduce operating costs by shrinking their physical branch footprint, the Company offers the DN Series™ family of self-service solutions.
Previous report
DN Series is the culmination of several years of investment in consumer research, design and engineering resources. Key benefits and features of DN Series include:
Previous report
◦superior availability and performance;
Previous report
◦next-generation cash recycling technology;
Previous report
◦full integration with the DN Vynamic™ software suite;
Previous report
◦a modular and upgradeable design, which enables customers to respond more quickly to changing customer demands;
Previous report
◦higher note capacity and processing power;
Previous report
◦improved security safeguards to protect customers against emerging physical, data and cyber threats;
Previous report
◦physical footprint as much as 40% less vs. competing ATMs in certain models;
Previous report
◦made of recycled and recyclable materials and is 25% lighter than most traditional ATMs, reducing CO 2 emissions both in the manufacturing and transportation of components and terminals;
Previous report
◦uses LED technology and highly efficient electrical systems, resulting in up to 50% power savings versus traditional ATMs; and
Previous report
◦increased branding options for financial institutions.
Previous report
Retail
Previous report
The Company’s comprehensive portfolio of retail services and products improves the checkout process for retailers while enhancing shopping experiences for consumers.
Previous report
Retail Services
Previous report
Diebold Nixdorf AllConnect Services® for retailers include maintenance and availability services to continuously optimize the performance and total cost of ownership of retail touchpoints, such as checkout, self-service and mobile devices, as well as critical store infrastructure. The solutions portfolio includes: implementation services to expand, modernize or upgrade store concepts; maintenance services for on-site incident resolution and restoration of multivendor solutions; support services for on-demand service desk support; operations services for remote monitoring of stationary and mobile endpoint hardware; as well as application services for remote monitoring of multivendor software and planned software deployments and data moves. As a single point of contact, service personnel plan and supervise store openings, renewals and transformation projects, with attention to local details and customers’ global IT infrastructure.
Previous report
The DN Vynamic software suite for retailers provides a comprehensive, modular and open solution ranging from the in-store check-out to solutions across multiple channels that improve end-to-end store processes and facilitate continuous consumer engagements in support of a digital ecosystem. This includes click & collect, reserve & collect, in-store ordering and return-to-store processes across the retailers' physical and digital sales channels. Operational data from a number of sources, such as enterprise resource planning (ERP), POS, store systems and customer relationship management systems (CRM), may be integrated across all customer connection points to create seamless and differentiated consumer experiences.
Previous report
Retail Products
Previous report
The retail product portfolio includes self-checkout (SCO) products and ordering kiosks facilitate a seamless and efficient transaction experience. In 2023, the Company introduced the DN Series™ EASY ONE, the newest member of its DN Series EASY family of self-service solutions. The DN Series EASY ONE is a revolutionary checkout platform built to transform the assisted and self-service shopping experiences, improve store efficiency and reduce retailer total cost of ownership. Designed for retail environments where maximum flexibility is required, the DN Series EASY ONE can be configured for assisted, semi-assisted or full self-service checkout while offering tremendous options for peripherals and mounting. The DN Series EASY MAX Kiosk automates routine tasks and in-store transactions, offers order-taking abilities, particularly at quick service restaurants (QSRs) and fast casual restaurants and presents functionality that furthers store automation and digitalization. The retail product portfolio also includes modular and integrated, “all-in-one” point-of-sale (POS) and self-service terminals that meet changing consumer shopping journeys, as well as retailers’ and store staff’s automation requirements. Supplementing the POS system is a broad range of peripherals, including printers, scales and mobile scanners, as well as the cash management portfolio, which offers a wide range of banknote and coin processing systems. Additionally, our retail software solutions are inclusive of a cloud native software platform which is hardware agnostic and multi-vendor capable.
Previous report
The increase in net sales of 1.9 percent was primarily due to price increases and mix of unit sales in the Banking segments, offset by declines in product sales in the Retail segment, particularly in 3rd party products and to lesser degree SCO. The increase in net sales was also partially attributable to increases in Services revenues in both segments.
Previous report
The increase in net sales of 3.1 percent was primarily due to price increases, mix of unit sales and a $9.7 PIS/COFIN tax recovery in Brazil in the Banking segments. This was offset by declines in product sales in the Retail segment, particularly in 3rd party products and to lesser degree SCO. The increase in net sales was also partially attributable to increases in Services revenues in both segments.
Previous report
Service margins were adversely impacted in the Successor Period by higher investments in resources and service infrastructure to ensure customer satisfaction.
Previous report
Product gross profit performance was driven by favorable geographic mix, improved pricing realization, logistical costs and normalization of certain raw material costs.
Previous report
Service margins were adversely impacted in the Successor Period by higher investments in resources and service infrastructure to ensure customer satisfaction.
Previous report
Product gross profit performance favorable geographic mix, improved pricing realization, logistical costs and normalization of certain raw material costs, as well as the PIS/COFIN tax recovery in Brazil.
Previous report
Selling and administrative expenses in both periods were driven by spending related to restructuring and transformational initiatives. The decline in the three months ended June 30, 2024 compared to the three months ended June 30, 2023 is a result of spend management initiatives.
Previous report
(Gain) loss on sale of assets, net in the Successor period is the result of lease terminations in Poland.
Previous report
Impairment for certain facilities leases in the U.K. as a result of an initiative to streamline administrative office space usage was recognized in the Predecessor period.
Previous report
Selling and administrative expenses in both periods were driven by spending related to restructuring and transformational initiatives. The decline in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 is a result of spend management initiatives.
Previous report
(Gain) loss on sale of assets, net in the Successor period is the result of sales of fleet vehicles in the US and lease terminations in Poland.
Previous report
Impairment for certain facilities leases in the U.K. as a result of an initiative to streamline administrative office space usage was recognized in the Predecessor period.
Showing the first 40 of 53 passages. Open the source sections for the rest.
Reworded paragraphs (14)
Previous wording
The following discussion of the Company’s financial condition and results of operations provides information that will assist in understanding the financial statements and the changes in certain key items in those financial statements. This discussion focuses on comparison of Successor results for the three and six month periods ended June 30, 2024 compared to the Predecessor results for the period ended June 30, 2023. The following discussion should be read in conjunction with the condensed consolidated financial statements and the accompanying notes that appear elsewhere in this Quarterly Report on Form 10-Q.
Current wording
The following discussion of the Company’s financial condition and results of operations provides information that will assist in understanding the financial statements and the changes in certain key items in those financial statements. This discussion focuses on the drivers of Successor results for the three and nine month periods ended September 30, 2024 as well as the drivers of each of the 2023 Predecessor and Successor results for the period from August 12, 2023 through September 30, 2023. The following discussion should be read in conjunction with the condensed consolidated financial statements and the accompanying notes that appear elsewhere in this Quarterly Report on Form 10-Q.
Previous wording
(1)The Company calculates constant currency by translating the prior-year period results at the current year exchange rate.
Current wording
The Company calculates constant currency by translating the prior-year period results at the current year exchange rate.
Previous wording
Research and development costs continues to decrease as a result of ongoing costs savings initiatives as well as project prioritization and rationalization.
Current wording
Selling and administrative expenses in all periods presented were driven by spending related to restructuring and transformational initiatives. Research and development costs are reflective of investment in costs savings initiatives as well as project prioritization and rationalization.
Previous wording
Foreign exchange gain (loss), net includes realized gains and losses, primarily related to the favorable exposures in the Brazilian Real, Colombian Peso, and Euro during the second quarter of 2024.
Current wording
Interest income remained materially consistent across all periods presented, while interest expense in the 2024 Successor period was driven by the lower debt balances partially offset by increased variable interest rates. Refer to Note 10 to our condensed consolidated financial statements for further detail. Foreign exchange gain (loss), net includes realized gains and losses, with the most material fluctuations observed in the Brazilian Real, Colombian Peso, Euro, Mexican Peso and Thai Baht exposures. Miscellaneous gain, net was primarily driven by recognition of non-service pension credits, the most significant of which are in Germany.
Previous wording
Changes in net (loss) income are a result of the fluctuations outlined in the previous sections and impacted by income tax expense. Refer to Note 5 to our condensed consolidated financial statements for additional information regarding tax expense.
Current wording
Changes in net (loss) income were a result of the fluctuations outlined in the previous sections and impacted by income tax expense. Refer to Note 5 to our condensed consolidated financial statements for additional information regarding tax expense.
Previous wording
On June 5, 2023, the Company entered into the DIP Credit Agreement, which provided the $1,250.0 DIP Facility. The proceeds of the DIP Facility were used, among others, to: (i) repay in full the term loan obligations, including a make-whole premium, under the Superpriority Facility and (ii) repay in full the ABL Facility and cash collateralize letters of credit thereunder. The payment for the Superpriorty Facility totaled $492.3 and was comprised of $401.3 of principal and interest, $20.0 of premium, and a make whole amount of $71.0. The payment for the ABL Facility, including the FILO Tranche, and the cash collateralization of letters of credit thereunder totaled $241.0 and was comprised of $211.2 of principal and interest and $29.8 of cash collateralized letters of credit.
Current wording
On June 5, 2023, the Company entered into the DIP Credit Agreement, which provided the $1,250.0 DIP Facility. The proceeds of the DIP Facility were used, among others, to: (i) repay in full the term loan obligations, including a make-whole premium, under the Superpriority Facility and (ii) repay in full the ABL Facility and cash collateralize letters of credit thereunder. The payment for the Superpriority Facility totaled $492.3 and was comprised of $401.3 of principal and interest, $20.0 of premium, and a make whole amount of $71.0. The payment for the ABL Facility, including the FILO Tranche, and the cash collateralization of letters of credit thereunder totaled $241.0 and was comprised of $211.2 of principal and interest and $29.8 of cash collateralized letters of credit.
Previous wording
On the Effective Date, the Company’s existing the DIP Facility was terminated and the loans outstanding under the DIP Facility were converted into loans outstanding under the Exit Facility (the Conversion), and the liens and guarantees, including all guarantees and liens granted by certain subsidiaries of the Company that are organized in the United States and in certain foreign jurisdictions, granted under the DIP Facility were automatically terminated and released.
Current wording
On the Effective Date, the Company’s existing the DIP Facility was terminated and the loans outstanding under the DIP Facility were converted into loans outstanding under the Exit Facility (the Conversion), and the liens and guarantees, including all guarantees and liens granted by certain subsidiaries of the Company that are organized in the United States and in certain foreign jurisdictions, granted under the DIP Facility were automatically terminated and released. In connection with the Conversion, the entire $1,250.0 under the Exit Facility was deemed drawn on the Effective Date. The Exit Facility will mature on August 11, 2028.
Previous wording
On February 13, 2024, the Company, as borrower, entered into a credit agreement (the Revolving Credit Agreement) with certain financial institutions party thereto, as lenders, and PNC Bank, National Association, as administrative agent and collateral agent. The Revolving Credit Agreement provides for a superior-priority senior secured revolving credit facility (the Revolving Credit Facility) in an aggregate principal amount of $200.0, which includes a $50.0 letter of credit sub-limit and a $20.0 swing loan sub-limit. Borrowings under the Revolving Credit Facility may be used by the Company for (i) the repayment of outstanding principal under the senior secured term loans under the Exit Credit Agreement and (ii) general corporate purposes and working capital. Loans under the Revolving Credit Agreement bear interest at an adjusted secured overnight financing rate plus 4.00 percent per annum or an adjusted base rate plus 3.00 percent per annum.
Current wording
On February 13, 2024, the Company, as borrower, entered into a credit agreement (the Revolving Credit Agreement) with certain financial institutions party thereto, as lenders, and PNC Bank, National Association, as administrative agent and collateral agent. The Revolving Credit Agreement provides for a superior-priority senior secured revolving credit facility (the Revolving Credit Facility) in an aggregate principal amount of $200.0, which includes a $50.0 letter of credit sub-limit and a $20.0 swing loan sub-limit. Borrowings under the Revolving Credit Facility may be used by the Company for (i) the repayment of outstanding principal under the senior secured term loans under the Exit Credit Agreement and (ii) general corporate purposes and working capital. Loans under the Revolving Credit Agreement bear interest at an adjusted secured overnight financing rate plus 4.00% per annum or an adjusted base rate plus 3.00% per annum.
Previous wording
Concurrently with the closing of the Revolving Credit Facility, the Company prepaid $200.0 of outstanding principal of its senior secured term loans under the Exit Credit Agreement.
Current wording
Concurrently with the closing of the Revolving Credit Facility, the Company prepaid $200.0 of outstanding principal of its senior secured term loans under the Exit Credit Agreement. As of September 30, 2024, $38.7 was drawn under the Revolving Credit Facility. Liquidity provided thereunder is expected to sustain the Company for at least the next twelve months. The Revolving Credit Facility will mature on February 13, 2027.
Previous wording
•Cash flows from operating activities during the Predecessor Period ended June 30, 2023 were driven by uses for inventory and accounts payable primarily due to normalize supplier payments which is expected to revert to our historic level.
Current wording
•Cash flows from operating activities during the Predecessor period ended August 11, 2023 were driven primarily by uses for inventory and accounts payable.
Previous wording
Cash flows from investing activities during the Successor and Predecessor Periods, respectively, approximate normal operations of the Company and reflect expected trend. The increase in purchases of investments in the Successor period was due to excess cash from the receipt of a large customer payment during the quarter.
Current wording
Cash flows from investing activities during the Successor and Predecessor periods, respectively, approximate normal operations of the Company and reflect expected trend.
Previous wording
Cash flows from financing activities during the Successor Period include a $200.0 borrowing against the Revolving Credit Facility which was used to pay down the Exit Facility, and a $160.7 repayment of the Revolving Credit Facility (refer to Note 11 of the condensed consolidated financial statements).
Current wording
Cash flows from financing activities during the Successor period ended September 30, 2024 draw under the Revolving Credit Facility which was used to pay down the Exit Facility, and a $161.3 repayment of the Revolving Credit Facility (refer to Note 10 of the condensed consolidated financial statements). Cash flows from financing activities during the during the 2023 Predecessor period primarily relate to the Restructuring Proceedings. Refer to Notes 2, 3, and 9 for further details.
Previous wording
The Company enters into various arrangements not recognized in the consolidated balance sheets that have or could have an effect on its financial condition, results of operations, liquidity, capital expenditures or capital resources. The principal off-balance sheet arrangements that the Company enters into are guarantees and sales of finance lease receivables. The Company provides its global operations guarantees and standby letters of credit through various financial institutions to suppliers, customers, regulatory agencies and insurance providers. If the Company is not able to comply with its contractual obligations, the suppliers, regulatory agencies and insurance providers may draw on the pertinent bank. The Company has sold finance lease receivables to financial institutions while continuing to service the receivables. The Company records these sales by removing finance lease receivables from the consolidated balance sheets and recording gains and losses in the consolidated statement of operations (refer to Note 18 of the condensed consolidated financial statements).
Current wording
The Company enters into various arrangements not recognized in the consolidated balance sheets that have or could have an effect on its financial condition, results of operations, liquidity, capital expenditures or capital resources. The principal off-balance sheet arrangements that the Company enters into are guarantees and sales of finance lease receivables. The Company provides its global operations guarantees and standby letters of credit through various financial institutions to suppliers, customers, regulatory agencies and insurance providers. If the Company is not able to comply with its contractual obligations, the suppliers, regulatory agencies and insurance providers may draw on the pertinent bank. The Company has sold finance lease receivables to financial institutions while continuing to service the receivables. The Company records these sales by removing finance lease receivables from the consolidated balance sheets and recording gains and losses in the consolidated statement of operations.
Previous wording
•the ultimate outcome of the appraisal proceedings initiated in connection with the implementation of the Domination and Profit Loss Transfer Agreement with the former Diebold Nixdorf AG (which was dismissed in the Company’s favor at the lower court level in 2022) and the merger/squeeze-out (which was dismissed in the Company's favor in 2023);
Current wording
•the ultimate outcome of the appeals for the appraisal proceedings initiated in connection with the implementation of the Domination and Profit Loss Transfer Agreement with the former Diebold Nixdorf AG (which was dismissed in the Company’s favor at the lower court level in 2022) and the merger/squeeze-out (which was dismissed in the Company's favor at the lower court level in 2023);
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
•Cash flows from operating activities during the Successor period ended September 30, 2023 were driven by uses for trade receivables and deferred revenue as well as cash provided by inventories and accounts payable. The key drivers of these cash flows are timing of sales, collections, and vendor payments which can fluctuate significantly period to period.
Rearranged previous paragraphs (10)
Previous report — wording carried elsewhere
(1)The Company calculates constant currency by translating the prior-year period results at the current year exchange rate.
Previous report — wording carried elsewhere
Research and development costs continues to decrease as a result of ongoing costs savings initiatives as well as project prioritization and rationalization.
Previous report — wording carried elsewhere
Miscellaneous gain, net was primarily driven by recognition of non-service pension credits, the most significant of which are in Germany.
Previous report — wording carried elsewhere
Miscellaneous gain, net was primarily driven by recognition of non-service pension credits, the most significant of which are in Germany.
Previous report — wording carried elsewhere
In connection with the Conversion, the entire $1,250.0 under the Exit Facility was deemed drawn on the Effective Date.
Previous report — wording carried elsewhere
The Exit Facility will mature on August 11, 2028.
Previous report — wording carried elsewhere
Loans under the Exit Facility bear interest at an adjusted secured overnight financing rate with a one-month tenor rate plus 7.50% per annum or an adjusted base rate plus 6.50% per annum.
Previous report — wording carried elsewhere
The Revolving Credit Facility will mature on February 13, 2027.
Previous report — wording carried elsewhere
As of June 30, 2024, $39.3 was drawn under the Revolving Credit Facility.
Previous report — wording carried elsewhere
Liquidity provided thereunder is expected to sustain the Company for at least the next twelve months.