DBD stock is up about 10% after the company released its quarterly report.
Diebold Nixdorf (NYSE: DBD), a global leader in driving connected commerce for the banking and retail industries, announced today that it is reaffirming its 2019 financial outlook, while providing guidance for 2020 and targets for 2021.
For 2019, the company’s reaffirmed outlook is as follows:
- Total revenue of approximately $4.4 billion;
- Adjusted EBITDA of $400 million to $410 million, which represents 25% to 28% growth over 2018;
- Net cash provided by operating activities of $120 million to $150 million;
- Capital expenditures of approximately $50 million; and
- Free cash flow of $70 million to $100 million.
For 2020, the company’s guidance is:
- $4.2 billion to $4.3 billion of revenue, approximately flat on a constant currency basis and after accounting for an approximate $100 million reduction from divestitures;
- Adjusted EBITDA of $430 million to $470 million, which includes a modest impact from divestitures;
- Net cash provided by operating activities of $170 million to $200 million, representing growth of approximately 30% to 40% from the 2019 outlook;
- Capital expenditures of approximately $70 million, including growth capital and internal systems investments;
- Free cash flow of $100 million to $130 million; and
- Leverage ratio in the mid-3x’s by the end of 2020, a decrease from the mid-4x’s at year-end 2019.
- For 2021, the company is targeting:
- Revenue growth towards the low end of its previously announced range of 2% – 4%;
- Adjusted EBITDA margin is now in excess of 12%;
- Free cash flow of greater than $200 million; and
- Leverage ratio of less than 3x and return on invested capital in the mid-teens.
“By executing on our DN Now transformation, the company has strengthened its financial position by delivering substantial improvements in profitability and free cash flow while reducing its financial leverage,” said Gerrard Schmid, Diebold Nixdorf president and chief executive officer. “We’ve made solid progress during year one of our three-year transformation, demonstrating a cohesive team effort towards delivering on our shared vision.”
Schmid continued, “Looking forward, we expect sustained progress on our operating efficiency initiatives, with significant reductions in selling, general and administrative expenses through our finance transformation plan and other activities. At the same time, we expect increased sales of our distinctive DN Series™, retail self-checkout solutions and managed services offerings.”
More than anything I think DBD stock got too cheap and with the turnaround underway, traders took the gambit today.