Diebold Nixdorf Incorporated Common stock

Good morning. My name is Victoria and I will be your conference operator today. At this time, I would like to welcome everyone to the default next door first quarter 2022 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the pound key Thank you. Ms. Marczewska, you may begin your conference.

Thank you. Hello, everyone, and welcome to our first quarter 2022 earnings call. I'm Christine Marczewska, Vice President of Investor Relations for Diebold Nixdorf. To accompany our prepared remarks, we have posted our press release and shareholder letter to the investor relations section of our corporate website. I would encourage investors to review the shareholder letter as it contains additional information regarding the progress of the company. Later this morning, a replay of this webcast will be available on the investor relations section of our website. Before we begin, I will remind all participants that during this call, you will hear forward-looking statements, including related to guidance. These statements reflect the expectations and beliefs of our management team as of the time on this call, but they are subject to risks and uncertainties that could cause actual results to differ materially from these statements. Additional information on these factors can be found in the company's periodic and annual filings with the SEC. Participants should be mindful that subsequent events may render this information to be out of date. We will also be discussing certain non-GAAP financial measures on today's call. A reconciliation between GAAP and non-GAAP measures can be found in the tables of today's earnings press release. And now, I'll hand the call over to Octavio.

Thank you, Christine. I'm pleased to be joining all of you for my first earnings call as CEO. First, I want to acknowledge that the last two years have been anything but easy. from the global pandemic and the war in Ukraine to rising inflation in most countries and uncertainty around financial markets and global supply chains. We've had to change many facets on how we work. We are concerned about the humanitarian crisis unfolding in Europe and as a result of the war and are continuing to support our employees in these effective areas. Change and disruption are inevitable. But in times of uncertainty and an ever evolving global landscape, we must remain focused on serving our customers and delivering solutions that help them transform their business. But in today's uncertain environment, we also have to transform and are working hard to continue to improve our systems and processes, streamline our operations, and ultimately create a more productive work environment for our employees around the globe. While supply chain challenges have put additional pressure on our business, we have a committed team, a leading solutions portfolio, and a customer base that wants us to succeed and wants us to help them succeed. Market demand for our products is strong, as evidenced by our growing order entry, which increased 23% first quarter year over year. I am confident we will get through this time of global volatility and come out stronger and more agile as we focus on the key priorities I will outline today. Over the past 60 days, I have spent my time talking with employees, customers, and the investment community, and they have reinforced and confirmed the following. We play a vital role in supporting two of the world's most competitive and demanding industries, banking and retail. Our innovative solutions delight our customers and help them thrive. We are fortunate to have a team that is committed to increasing our operational rigor, focusing on our customers, and delivering on shareholder value. Our investors believe in our financial model and strategy, and they believe we can grow in a profitable way. But even the best companies evolve and continuously improve, and there are clearly areas we need to strengthen and make more efficient. Customers are always first, but I'm also passionate about increasing our operational rigor and better managing costs as a company. To this end, today we are announcing a plan to simplify our operating model by focusing on the areas that provide extraordinary value to our customers and shareholders. We will accomplish this by streamlining our operations to move the organization closer to the customer, drive efficiency, and digitize processes where possible. This will result in significant cost savings of greater than $150 million over the next 12 to 18 months, according to our roadmap. Let me take a few minutes to explain how we will achieve this. First, I am very focused on being more efficient by reducing redundancies and increasing accountability in key areas close to the customer. We will simplify our organizational structure as well as standardize practices across our different subsidiaries. The world has changed permanently, and we will organize ourselves to be more proactive and agile. This means continuing our transformation journey with a strong focus on aligning our resources closer to the customer and improving our processes and using technology to streamline our operations. The world has evolved post-pandemic, and employees value the opportunity to work where they choose. This flexibility has proven to be efficient as our teams continue to go above and beyond to deliver for customers and ultimately our shareholders. whether they're working in a Diebold-Nixdorf office or remotely. It also increases our ability to attract a more diverse talent by being location agnostic. Based on that, we will be re-evaluating our global real estate footprint and closing or consolidating offices where appropriate. Next, we will focus on solidifying our supply chain to achieve stability. Like many companies, this has been a strong headwind for us. I have initiated a full analysis of our end-to-end supply chain to see where we can improve our processes and geographic inefficiencies. Our work in this area has already begun to show progress. As we produce 19% more systems in Q1 2022, as compared to the prior year addition, our manufacturing facilities are scheduled to increase production of ATMs by 17%, and self-checkout by 100% in Q2 of 2022 as compared to a year ago. As noted earlier, there is no lack of demand for our products, especially for our DM series, which is now live in 80 countries with over 500 certifications, and our self-checkout business, which keeps gaining new customers globally. We continue to see a shift away from our legacy devices with our new DM series recyclers, In North America, we now have 87% of all new orders coming from VN series. We expect continued volatility with our supply chain and logistics for the remainder of the year. And we are focused on gaining velocity to accelerate revenue conversion on the 1.2 billion product backlog that we currently have, including banking and retail. We are also evaluating how our global manufacturing footprint needs to evolve. As we have shared previously, we continue to invest in our Ohio manufacturing, which by the end of the year will be capable of fulfilling most of the demand for recyclers generated in North America. So taken together, improving our operational efficiencies. and optimizing our supply chain and manufacturing footprint we will reach our original financial targets for growth profitability and free cash flow by 2024 as outlined in our three-year model overall my leadership approach is very straightforward i will focus on strengthening our core offerings where customers see great value in the end while also instilling a mind will help us capture emerging opportunities and increase shareholder value. For example, we continue to see strong momentum in the EV charging space. Since Q4 2021, we intensified our partnership with Alpetronic in several European countries as we expand to 10,000 of their charging points across Europe this year. In addition, We signed a contract for global service desk capabilities with a leading European electric charging station manufacturer for more than 10,000 of their chargers, as well as started a pilot in mid-March to service more than 7,000 chargers in the US with another manufacturer. We continue to track to our plan to service 30,000 or more charging stations by end of 2022. For 2024, we are targeting revenue growth of 2% to 4%, greater than 13% adjusted EBITDA margin, and 50% or greater adjusted EBITDA to free cash flow conversion. Jeff will provide more detail on our financials. But before I turn it over to him, let me reiterate my focus. We will provide leading solutions to our customer base to help them better serve their customers. As we execute on our financial model, we will unlock the intrinsic value inherent in our three-year targets. Thank you. And now I would like to turn it over to Jeff.