November 28, 2017 DIEBOLD NIXDORF AG AT GERMANY EQUITY FORUM Dr. Jürgen Wunram
Agenda Diebold Nixdorf AG History and shareholder structure Market trends, strategy and progress of integration Diebold Nixdorf AG financials and outlook 1 DIEBOLD NIXDORF
Agenda Diebold Nixdorf AG History and shareholder structure Market trends, strategy and progress of integration Diebold Nixdorf AG financials and outlook 2 DIEBOLD NIXDORF
History of Diebold Nixdorf AG 1952 1990 1999 2004 2016 Innovation leadership Broad product portfolio Initiated banking and retail business relations Customer driven organization Integration into Siemens International expansion Optimization of internal controlling and processes Carve-out (1999) Built-up of standalone organization New brand KKR (71%), GS (18%), management and employees (11%) as shareholders Public listing of Wincor Nixdorf AG Leading provider of integrated solutions for branch and store optimization Further profitable growth Business Combination completed on August 15, 2016 3 DIEBOLD NIXDORF
Transaction and Integration Overview 2016 2017 2018 Nov 23, 2015 Announcement of Business Combination Agreement Feb 5, 2016 Initial Offer Acceptance Period Begins; S-4 Declared effective April 12 End of Acceptance Period Aug 15 Close Day 1 Closing Regulatory Approvals Sept. 26 Vote on Domination Agreement (DPLTA) at Wincor Nixdorf Extraordinary Shareholder Meeting Feb. 14, 2017 DPLTA effective July 05, raised DN2020 savings target from $200m to $240m New governance and organization plan Implement governance model and management structure Develop integration plans Ramp-up synergy activities Full execution 4 DIEBOLD NIXDORF
2016 Diebold Nixdorf Pro Forma Revenue & Adjusted EBITDA ($Millions) Revenue Non GAAP GP Non GAAP OP Adjusted EBITDA Reported Total DN $3,333 $845M $159M $266 Pro-forma Wincor Nixdorf 1 $1,652 $394M $92M $133 Pro-Forma Total DN (Non-GAAP) $4,985 $1,239M $251M $399 % of Revenue 25% 5% 8% Note 1: The company presents Wincor Nixdorf pro forma revenue for the period January 1st - August 14th 2016 as reported under IFRS and converted into USD based on our monthly rates. Diebold Nixdorf pro forma reflects the non-gaap revenue of Diebold Nixdorf combined with the pre-acquisition IFRS revenue of Wincor Nixdorf. The company presents Wincor Nixdorf pro forma Adjusted EBITDA for the periods January 1st - August 14th 2016 to facilitate future comparisons. Diebold Nixdorf pro forma reflects the Adjusted EBITDA of Diebold Nixdorf combined with the pre-acquisition Adjusted EBITDA of Wincor Nixdorf. 5 DIEBOLD NIXDORF
Diebold Nixdorf AG Shareholders Diebold Nixdorf AG Shareholders 1 Valuation Diebold KGaA ( a wholly-owned subsidiary of Diebold Nixdorf, Inc.) 22,921,935 or 76.9% November 23, 2015 2 52.50/share Minority shares outstanding 6,894,276 or 23.1% Minority shareholder compensation 3 Cash buyout or 55.02/share Gross recurring compensation 3.13/share/year Redeemable noncontrolling interest liability 1, 4 $486 million Note 1) As of September 30, 2017. Excludes 3.3M Wincor Nixdorf treasury shares. 2) Valuation announced on November 23, 2015 which included 38.98 in cash plus 0.434 shares of DBD stock. 3) The adequacy of both forms of compensation payments to minority shareholders under the domination and profit-and-loss transfer agreement has been challenged by shareholders of Diebold Nixdorf AG by initiating court-led appraisal proceedings. The outcome and timing of these legal proceedings is uncertain. 4) Includes approximately $44M of pre-existing redeemable noncontrolling interests of Diebold Nixdorf AG assumed as a result of the Acquisition. 6 DIEBOLD NIXDORF
Agenda Diebold Nixdorf AG History and shareholder structure Market trends, strategy and progress of integration Diebold Nixdorf AG financials and outlook 7 DIEBOLD NIXDORF
Diebold Nixdorf offers a unique combination of Services, Software and Systems Always on Value-added services ATM as a service Out-of-branch networks DN has the largest service organization focused on retail banking (~15K) Branch/store lifecycle management Lower total cost of ownership Open APIs SW orchestration layer App store Big Data analytics Cash Management Open ecosystem SOFTWARE SERVICES 528.046 593.331 SYSTEMS Cash recycling Contactless transactions Encrypted touch screens Beacon technology Automation of paper processes Internet of Things POS, SCO and Kiosk Branch/store transformation 8 DIEBOLD NIXDORF
ATM Trends by Geographic Region Number of Bank Branches Volume of Cash Withdrawals 1.07 1.08 World +0.4% 107 100 World +6.4% EMEA -2.1% EMEA +2.4% Millions Americas -0.1% Millions Americas +7.2% Asia Pacific +2.3% Asia Pacific +8.4% 2015 2016 2015 2016 Installed Base of ATMs by Region Millions 3.2 3.3 World +3.4% EMEA +1.3% Americas +0.6% Installed Base of ATMs by Deployer Millions 3.2 3.3 World +3.4% Independent ATM Deployers +2.7% Banks +3.5% Market Share of Installed Base Others 32% Asia Pacific +5.9% 2015 2016 Note 1) Source: RBR 2017,Global ATM Market and Forecasts to 2022. 2015 2016 2016 9 DIEBOLD NIXDORF
Capitalizing on opportunities created by macro-trends Macro Trends Markets DN Growth Opportunities Automation / self service Digitalization BANKING Monetizing the Long Tail of Cash Individualization As a service RETAIL Connected Commerce 10 DIEBOLD NIXDORF
Connected Commerce Ecosystem: From Omni-Channel to Customer Centric Retail example Early consumer identification Loyalty rewards Payment options Mobile consumer engagement A B C Omni-channel will be term of the past Personalized offers Connected Commerce BANKING Personalized Bank CUSTOMER CUSTOMER CENTRIC RETAIL Store For One Fast and secure checkout in store SYSTEMS OF Engagement Operation Record Insight and intelligence Trust / Loyalty 11 DIEBOLD NIXDORF
Diebold Nixdorf Software Leadership Powering the largest financial institutions in the world. 11 out of the top 15 in the Americas 16 out of the top 20 in EMEA 12 of the top 20 in Asia The first end-to-end connected commerce software portfolio geared to enable secure transactions across mobile devices, ATMs, POS and SCO terminals, kiosks and online channels. 12 DIEBOLD NIXDORF
DN2020 Transformation Program - Achievements Sales Excellence Connected Commerce Strategy Culture / Talent Customer Finance Excellence Operational Excellence Integration Net savings of $240 million by 2020 On track to reduce ~1,000 employees by year-end 90% of supplier contracts renegotiated More than one third of planned country legal entity combinations completed. On track to consolidate 75% in 2017. Rightsizing our global manufacturing capacity in 2017 Field Service Integration finalized for ~ 80% of countries Closure of Hungary factory and Netherlands logistic center finalized OPEX reduction accelerated and ahead of plan Number of different terminals reduced by more than 50% since day 1 Production capacity reduced by 45% and now at target level Upskilling team with emphasis on services and software ~$75 million in 2017 13 DIEBOLD NIXDORF
Targeting $240M OP impact by 2020 - broken down by cost type DN 2016 PF cost base OP impact 1 2017-2020E Key levers CoS Services ~ $1.8B ~$65M Services Excellence (Field Service & Replacement Parts) Further nearshoring opportunities Process excellence & global delivery infrastructure CoS Software ~ $0.3B Growth Expanding connected commerce SW offering Expand Retail SW reach to Americas Professional services excellence CoS Systems ~ $1.7B ~$70M Operational Excellence Streamline platforms, components and capacity Consolidated supplier base OPEX ~ $1.0B ~$105M Corporate & regional functional management integration Back-office / shared services integration R&D synergies and scale Total ~ $4.8B $240M Notes: 1) Gross savings significantly higher to compensate for price decrease and re-investments into growth 14 DIEBOLD NIXDORF
2017 Outlook Previous Guidance Current Guidance Total revenue ~$4.7B - $4.8B ~$4.6B Net Income (Loss) attributable to DN $(125)M - $(110)M $(140)M - $(130)M Adjusted EBITDA (non-gaap) $360M - $380M $370M - $380M EPS (GAAP) $(1.65) - $(1.45) $(1.80) - $(1.70) Restructuring ~$0.85 ~$0.70 Non-routine (income)/expense: Integration expense ~$0.70 ~$0.90 Legal, Acquisition, and Divestiture expense ~$0.30 ~$0.25 Impairment & Other Non-routine ~$0.05 ~$0.05 Wincor Nixdorf purchase price accounting ~$1.90 ~$2.10 Total non-routine (income)/expense ~$2.95 ~$3.30 Tax impact of restructuring and non-routine ~$(1.20) ~$(1.15) EPS (non-gaap) $0.95 - $1.15 $1.05 - $1.15 Non-GAAP effective tax rate 1 ~30% ~20% Note: The company expects a non-gaap effective tax rate of approximately 20% for the full year. With respect to the company s non-gaap tax rate outlook for 2017, the company is not providing the most directly comparable GAAP financial measure and, with respect to the company's non-gaap tax rate and adjusted EBITDA outlook for 2017, the company is not providing corresponding reconciliations because it is unable to predict with reasonable certainty those items that may affect such measures calculated and presented in accordance with GAAP without unreasonable effort. These measures exclude the future impact of restructuring actions, net non-routine items, acquisition, divestiture and integration related expenses and purchase accounting fair value adjustments. These reconciling items are uncertain, depend on various factors and could significantly impact, either individually or in the aggregate, our future period tax rate calculated and presented in accordance with GAAP. Please see Use of Non-GAAP Financial Measures for additional information regarding our use of non-gaap financial measures. 15 DIEBOLD NIXDORF
Agenda Diebold Nixdorf AG History and shareholder structure Market trends, strategy and progress of integration Diebold Nixdorf AG financials and outlook 16 DIEBOLD NIXDORF
Key Figures for Diebold Nixdorf AG Q3 2016/17 Statement of Income ( millions) 3.Q 3.Q Change 9 months 9 months Change 2016/2017 1 2015/2016 2 2016/2017 3 2015/2016 4 Net sales 602 629-4% 1,826 1,938-6% of which Banking 339 385-12% 1,049 1,164-10% of which Retail 263 244 8% 777 774 0% Gross profit without restructuring expenses* 140 155-10% 429 476-10% Gross profit as a percentage of net sales 23.3% 24.6% - 23.5% 24.6% - Research & development expenses without restructuring expenses* -22-23 -4% -67-70 -4% R&D expenses as a percentage of net sales 3.7% 3.7% - 3.7% 3.6% - Selling, general and administration expenses 5 without restructuring expenses* -75-85 -12% -233-251 -7% SG&A expenses as a percentage of net sales 12.5% 13.5% - 12.8% 13.0% - Operating profit (EBITA) 6 without restructuring expenses* 43 47-9% 129 155-17% EBITA as a percentage of net sales (EBITA margin) 7.1% 7.5% - 7.1% 8.0% - of which Banking 24 32-25% 80 108-26% as a percentage of net sales Banking 7.1% 8.3% - 7.6% 9.3% - of which Retail 19 15 27% 49 47 4% as a percentage of net sales Retail 7.2% 6.1% - 6.3% 6.1% - Restructuring expenses* -11-4 - -21-9 - Operating profit (EBITA) 6 incl. restructuring expenses* 32 43 108 146-26% EBITA as a percentage of net sales (EBITA margin) 5.3% 6.8% - 5.9% 7.5% - 1) January 01, 2017 - June 30, 2017. 2) January 01, 2016 - June 30, 2016. 3) October 01, 2016 - June 30, 2017. 4) October 01, 2015 - June 30, 2016. 5) Including other operating result as well as result from equity accounted investments. 6) Profit on operating activities before interest, taxes and amortization of goodwill. 17 DIEBOLD NIXDORF