Specialist
Former global leader at Diebold Nixdorf Inc
Agenda
- Overview of Diebold’s (NYSE: DBD) operating environment and performance implications of the broader macroeconomic environment
- Progress check and outlook for Diebold’s current debt restructuring
- Assessment of Diebold’s executive leadership, noting how the team will manage balance sheet issues and talent attrition
- Performance assessment and outlook for the banking solutions and retail segments
- Diebold’s competitive positioning vs NCR Corp (NYSE: NCR) and Hyosung (KRX: 004800), and commentary on Diebold’s potential bankruptcy filing
Questions
1.
Could you start us off with an industry-wide overview, assessing both the banking and retail sides of Diebold’s business, and 2-3 key trends or drivers we should be monitoring?
2.
Is there anything noteworthy about the retail side of the business? I know there are some secular trends in place, given the increased adoption of self-checkout options and the omnichannel functionalities that retailers are really looking for.
3.
You mentioned Diebold missed out on the digital banking initiative. Where does that leave the company in terms of growth opportunities?
4.
Could you expand on Diebold's transition to a more function-based ATM product? How is that changing the decision criteria from the customer side of the business? What does the actual demand appetite look like for these newer machines?
5.
How are Diebold’s recent challenges, such as its balance sheet issues, impacting the customer evaluation? How might the management approach short-term fixes to those issues and how does that look in terms of the sustainability?
6.
How would you map out the relative strengths and weaknesses of Diebold’s leadership team, especially discussing the CEO, CFO and EVPs on the banking or retail sides?
7.
What reasonable steps should Diebold take to make its short-term strategies more sustainable if it were to execute on the liquidity event in 2023?
8.
Do you have any incremental thoughts on former CEO Gerrard Schmid’s departure in February 2022? If his strategy wasn't really working in addressing the cost issues and free cash flow generation, was the business primarily going too far down that strategy, so reclaiming lost ground might be comparatively more difficult?
9.
By what magnitude would you expect retention rate degradation, given the macro challenges and the Diebold-specific challenges?
10.
You mentioned Diebold’s retention rate is around 50%. To what extent might that decline over the next year, especially if there’s a recessionary period in the next 12 months? How might that impact customer churn?
11.
Where could Diebold be more efficient in terms of the hardware supply chain?
12.
How severely might Diebold be challenged in terms of labour attraction and retention? If the company really needs high-value talent-type people to turn the business around, how well can it address this issue, given all these challenges?
13.
Is there a culture of employees being jaded at Diebold? Do you think they feel under-appreciated by the management team and might that amplify attrition rates?
14.
Developed-world banks seem to be Diebold’s target market and the area where it can lean into growth for the ATM business. With the whole bank-branch transformation strategy going on, it’s diminishing the total pie the company can really address in terms of revenue opportunity. Does this impact the outlook for banking-service revenue over the next 3-5 years, or might there be an additional upside?
15.
How would you compare and contrast Diebold’s relative positioning against legacy peers such as NCR and Hyosung?
16.
What are your thoughts on Diebold’s positioning in the retail segment, specifically the retail self-checkout?
17.
How serious are the delays in Diebold’s product deliveries vs the supply chain issues and cost inflation? You mentioned the company might be able to address these issues and essentially offset them. What are the potential red flags?
18.
Would you expect ATM customers to shift away from Diebold?
19.
Could share your thoughts on the idea that Diebold might explore a bankruptcy filing before its next liquidity event? How do you assess the probability? Layering in the different aspects of the company's outlook, I find it hard not to come up with the idea of a potential bankruptcy down the line.
20.
What might be the death blow for Diebold in your opinion? What event would trigger something like that?
21.
Is there anything else you want to highlight or anywhere you might hold a contrarian view relating to Diebold or its peers?
