Diebold Nixdorf Incorporated Common stock

Good morning. My name is Glenn, and I'll be your conference operator today. At this time, I would like to welcome everyone to the DEBO NextOff first quarter of 2023 conference call. All nine have been placed on mute to prevent any background noise. The call will conclude after the speaker's prepared remarks today. Chris, you may begin your conference.

Hello, everyone, and welcome to our first quarter 2023 earnings call. I'm Chris LaCour in Investor Relations. To accompany our prepared remarks, we have posted our press release and slide presentation to the Investor Relations section of our corporate website. Later this morning, a replay of this webcast will also be available there. Before we begin, I will remind all participants that during this call, you will hear forward-looking statements. These statements reflect the expectations and beliefs of our management team at the time of 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 Participants should be mindful that subsequent events may render this information to be out of date.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. As noted on slide three, a reconciliation between GAAP and non-GAAP measures can be found in the tables of today's earnings release and supplemental slides in the presentation. With that, we'll turn the call over to Octavio.

Thank you, Chris, and thank you all for joining us today. Our first quarter results reflect consistent market demand for our solutions, as well as positive outcomes from operational improvements we've implemented over the past several months. We continue to see a robust demand environment for our banking and retail products driven by long term growth drivers around self service and automation. Consumer preferences for efficiency and ease of use together with the lower cost of operations for our banking and retail customers are generating ongoing demand for our market leading solutions. Our execution and operating momentum are improving, as evidenced by our strong year-over-year improvements in revenue and profitability, as well as higher production levels in our factories. In our operations, we continue to take steps to improve our business by becoming more agile and efficient to better navigate the macroeconomic impacts. We are starting to see proof of our progress in the first quarter, and it will be important for us to sustain this momentum for the balance of the year to achieve our objectives. We continue to move forward with constructive conversations with our banking and lending partners to develop a long-term solution to our capital structure. Earlier today, I sent to our employees a memo reinforcing our focus while we continue these conversations. We are dedicated to making our company healthier and stronger for the long term, including continued investment in our people and products and seamless operations to meet our commitments to our customers, our vendors, and our partners. Turning to slide 5, we entered 2023 clearly focused on cash generation and implementing key priorities that will put us in a stronger position to deleverage. Since our last earnings call, we have further refined our priorities and aligned the company around achieving these objectives. Our first priority is fortifying the balance sheet and accelerate the leveraging. We are fully focused on optimizing working capital while we deliver on our strong backlog and order pipeline. We are carrying elevated level of banking finished goods as we produce units in advance to support our customer implementation schedules. The focus is now getting those units installed and out of our inventory. On top of that, we see additional room for improving in our raw materials inventory as the supply chain and logistic environment begins to stabilize. As I mentioned, from a financing perspective, we are working through short and long-term considerations around the capital structure to get a more permanent solution in place. As discussed previously, we continue to explore the sale of non-core assets and we have retained advisors to help us make sure we are exploring all our options across the company. The second priority is adopting a continuous improvement mindset across the company to drive further efficiencies that will improve gross profits and reduce operating expense. We plan to deliver our products to customers and maintain operational excellence. We are committed to delivering and revenue 60,000 ATMs, 35 self-checkout devices, and 134 EPOS devices in 2023. Efficiently delivering these products is crucial as it translates directly into revenue and profit. As a reminder, we completed an organization-wide realignment last year that made us a more streamlined company. Now in 2023, we continue to build off that program to drive incremental savings to the P&L. On the product side of the business, we are closely monitoring inflation trends as well as evaluating manufacturing operations and pricing discipline to drive additional product growth, margin, and expansion. On the service side of the business, we continue to take advantage of local to global resource opportunities to drive further efficiencies. Our third priority is to execute on our path forward aligned to our customer needs. At the core of everything we do is our market-leading self-service solutions for the banking and retail markets. We have the best products in our industry, and you can clearly see the traction we have with customers when you look at our strong backlog of product orders, new wins, and current quarter revenue growth. On top of that, we have a strong attach of additional services and higher level software contracts. We have a strong business that customers value. The past year has presented several hurdles for us to work through, but we are committed to serving our customers and working to our near-term .