Diebold Inc.

Financial Analysis

Sarah Hollister
BAD320
11/23/16
Executive Summary
An analysis to assist a potential investor in determining whether it is
advisable to invest in Diebold Inc.
Research on the company overall and a detailed financial analysis was
conducted including a trend analysis of financial results for the years
2013-2015 and an assessment of key financial ratios.
Based upon this detailed analysis of Diebold Inc.s financial position, the
company is in a reasonably sound position to achieving its goals of
returning to profitability, if economic factors do not restrict growth.
Recent restructuring actions taken by the company (Diebold 2.0) have
successfully returned the company to profitability by the end of the
period analyzed.
Investment in Diebold Inc. is recommended; however a cautious investor
may want to see a future reduction in long term and short term financing
and an improvement in debt ratios prior to investment.
Objectives
To assist potential investor in determining
whether it would be advisable to invest in the
company.
Background information
Financial analysis
Financial condition and strength
Comparison of financial analysis with industry norms
and key performance indicators.
Future plans
Analysis and assessment of companys future
plans
Method of Collecting Data
2015 Annual Report
Investor relations
Various independent financial
assessment websites
General Information
Name: Diebold, Incorporated
Address: 5995 Mayfair Road,
P.O. Box 3077, North Canton, Ohio

Key Personnel:
General Information Cont.
Shareholders
Investors through investment management companies.
88% owned by institutions
.67% owned by insiders
Lines of Work
Diebold Inc. is a leading global producer of automated teller machines (ATMs). They also
offer remote teller systems, cash dispensers, and check cashing machines. Originally, a
manufacturer of safes, the company is still active in offering vaults and security systems
for financial institutions. The companys related services range from traditional
maintenance to remote monitoring, transaction processing, and currency management.
Diebold has operations in over 90 countries and more than half its sales are outside
North America. In a major move, Diebold bought its European rival Wincor Nixdorf for
$1.8 billion.
Economic Assessment
Demand for services and products is
effected by
General economic conditions*
Business conditions of our financial
institution customers*
Global market economy*
Unstable Political Conditions*

*Currently effecting Diebold Inc.

Significant Events Effecting Diebold

Poor financial results in 2013 ($181.6 million)

Fired CEO
Hired Andy Mattes
Transforming company
Diebold 2.0
Cut cost
Reinvest
Transform into services, software, and innovative
hardware
Reduce focus on electronic security
Significant Events Effecting Diebold
Cont.
Diebold 2.0 Company Restructuring Plan
March 2015: acquired Phoenix Interactive Design
Inc. (software expertise)
February 2015: sold Venezuela business (raised
cash)
October 2015: sold North America electronic
security business to Securitas AB (raised cash)
November 2015: acquired Wincor Nixdorf
(increased market share by eliminating competitor)
December 2015: formed joint venture with leading
Chinese IT company to provide ATMs and Kiosks to
the China market (increased market share)
 1.0 Overview of Financial
Results
1.0 Overview of Financial Results

Value
Change for the analysed period
(in millions $) Average annual
Indicator +/- % value
million $ Analysis Notes
2013 2014 2015 ((col. 4-col. (in million $)
(col. 4-col. 2)
2)/col.2)
1 2 3 4 5 6 7
1. Revenue 2582.70 2734.80 2419.3 -163.40 -6% 2578.9
2. Cost of sales 1996.70 2008.60 1767.3 -229.40 -11% 1924.2
3. Gross profit (1-2) 586.00 726.20 652.00 66.00 11% 654.7
4. Other income and expenses,
-727.80 -571.50 -606.20 121.60 17% -635.2
except Finance costs
5. EBIT (3+4) -141.80 154.70 45.8 187.60 132% 19.6
6. Income tax expense (from
48.40 47.40 -13.7 -62.10 -128% 27.4
continuing operations)
7. Profit (loss) from continuing
-190.20 107.30 59.50 249.70 131% -7.8
operations (5-6)
8. Profit (loss) from discontinued
13.70 9.70 15.9 2.20 16% 13.1
operations
9. Profit (loss) (7+8) -176.50 117.00 75.40 251.90 143% 5.3
10. Other comprehensive income
-5.10 -2.60 -1.7 3.40 67% -3.1
(9+10)
2013: slowdown in spending by
regional banks and competition from
11. Comprehensive income (10+11) -181.60 114.40 73.70 255.30 141% 2.2 NCR.
2014/2015: Improved results from
cost cutting & restructuring.
2.0 Structure of Assets and
Liabilities
3.0 Net Assets (Net Worth)
3.0 Net Assets (Net Worth)

Value Change
in million $
at the beginning +/- %
Indicator at the end of the million $ (col. 3-
of the period ((col. 3-col. Analysis Notes
period analysed col. 2)
analysed 2)/col.2)
(3.12.2015)
(3.12.2013)
1 2 3 4 5
1. Net tangible
1,716.25 1,643.60 -72.65 -4.2%
assets
2. Net assets The effect of selling and
596.76 412.4 -184.36 -30.9%
(Net worth) buying business units.
3. Issued
98.27 99.60 1.33 1.4%
(share) capital
Cash and cash Cost cutting. Increased
equivalents sales in 2014/15. Sold
230.71 313.6 82.89 35.9%
and bought business
units.
4.0 Liquidity Analysis

4.0 Liquidity Analysis

Liquidity Value Change

The indicator description and its
Indicator 31.12.2013 31.12.2014 31.12.2015 $ (col. 4-col. 2) Analysis Notes
recommended value
1 2 3 4 5
The current ratio is calculated by Slightly concerned that the
dividing the current assets by current company may not be able to
1. Current ratio
liabilities. It indicates a company's pay off its short term debt,
(working capital 1.74 1.61 1.72 -0.02
ability to meet short-term debt however financing to acquire
ratio)
obligations. business units is part of re-
Acceptable value: 2 or more. structuring plan.
Calculated by dividing liquid assets
(cash and cash equivalents, trade
and other current receivables, other
current financial aassets) by current
2. Quick ratio
1.32 1.25 1.33 0.01 liabilities. It is a measure of a
(acid-test ratio)
company's ability to meet its short-
term obligations using its most liquid
assets (near cash or quick assets).
Normal value: no less than 1.
Calculated by dividing absolute liquid
assets (cash and cash equivalents)
3. Cash ratio 0.26 0.32 0.33 0.07
by current liabilities.
Normal value: no less than 0.2
5.0 Key Indicators of the Companys
Financial Sustainability
5.0 Key Indicators of the Company's Financial Sustainability

Value Change
The indicator description and its
31.12.2013 31.12.2014 31.12.2015 (col. 4-col. 2) Analysis Notes
recommended value
1 2 3 4 5
Total liabilities divided by shareholder's Concerned that the company
equity. is borrowing money to
Debt-to-equity ratio It is a key financial ratio and is set as a acquire new business.
2.66 5.15 4.44 1.78
(financial leverage) standard for judging a company's financial However, this is consistent
standing. with their re-structuring plan
Acceptable value: no more than 1.5 that appears to be working.
Total liabilities divided by total assets. It Slightly concerned that the
shows how much the company relies on debt company is borrowing money
Debt ratio (debt to to finance assets. to acquire new business.
0.73 0.77 0.82 0.09
assets ratio) Acceptable value: 0.6 or less (optimum 0.3 - However, this is consistant
0.5) with their re-structuring plan
that appears to be working.
Long-term (non-current) liabilities divided by Long term debt is high but it
equity is high because they are
Long-term debt to
1.16 1.47 2.12 0.96 borrowing money to acquire
Equity
new businesses and to
increase sales.
Dividing long-term (non-current) liabilities by Long term liabilities is high
net worth (equity) and measures the extent of but it is high because they
Non-current assets
1.16 1.47 2.12 0.96 a company's investment in low-liquid non- are borrowing money to
to Net worth
current assets. acquire new businesses and
Nominal value: no more than 1.25 increase sales.
Calculated by dividing non-current assets by
Capitalization ratio 0.49 0.52 0.47 -0.02
the sum of equity and non-current liabilities
This ratio indicates the extent to which the
owners cash if frozen in the form of fixed
Fixed assets to Net assets such as property, plant, and
0.27 0.31 0.43 0.16
worth equipment, investment property and non-
current biological assets.
Nominal value: 0.75 or less.
Current liability ratio is calculated by dividing
Curent liability ratio 0.44 0.43 0.48 0.04 non-current liabilities by total (current and
non-current) liabilities.
 6.0 Profitability Ratios
6.0 Profitability Ratios

Value
Change
Profitibility Ratios (in %) The indicator description and its
(col. 4-col. 2) Analysis Notes
2013 2014 2015 reference value
1 2 3 4 5
1. Net Profit Margin -7.0% 4.2% 3.0% 10.00%
Net profit (after taxes) divided by total Half of cash recovered
assets. Expressed as a %. through cost cutting was
Normal value 6% or more invested in re-structuring.
2. Return on assets (ROA) -11.7% 6.9% 4.5% 16.2%
Not concerened because this
is part of the re-structuring
plan.
Net profit (after taxes) divided by equity.
Expressed as a %. One of the most
3. Return on Equity (ROE) -30.4% 21.5% 17.9% 48.3% important financial ratios and profitability
metrics.
Normal value 12% or more
ROCE is calculated by dividing EBIT by
capital employed (equity plus non-current
4. Return on Capital
-0.11 0.12 0.04 0.15 liabilities). It indicates the efficiency and
Employed (ROCE)
profitability of a company's capital
investments.
5. Earnings per common Indicator that the re-
-2.85 1.76 1.12 3.97
share (EPS) structuring is successful.
Dividends in 2013 paid out of
cash reserves. In 2014 and
2015 dividend was able to be
6. Payout Ratio -0.41 0.65 1.00 1.41
made out of profit. Indication
that re-structuring is
Dividends paid / earnings working.
7. Cash Dividend 1.15 1.15 1.15 0.00
Future Plans
Continue to execute its multi-year transformation of Diebold 2.0
Cost: streamline the cost structure and improve near-term delivery and execution.
Cash: generate increased free cash flow in order to fund the investments necessary
Talent: attract and retain the talent necessary to drive innovation
Growth: return Diebold to sustainable, profitable growth trajectory

Company has identified targeted savings of $200million that are expected to be fully
realized by end of 2017 and plans to reinvest approximately 50% of the cost savings to
drive long term growth.
Narrowing its scope in the Brazil other business to primarily focus on lottery.
Decisions enable company to refocus its resources and better position itself to pursue
growth opportunities in the dynamic self service industry.
Continue to invest in developing new services, software and security solutions that align
with the needs of its customers.
Complete integration of Wincor Nixdorf.
Pursue growth opportunities in this dynamic industry.
Conclusion
Based upon a detailed analysis of Diebold Inc.s financial position, the company is in a reasonably
sound position to achieving its goals of returning to profitability.
A financial trend analysis of the years 2013, 2014, and 2015, indicates an improvement in net
income from a loss of $181.6 million in 2013 to positive results of $114.4 million in 2014 and
$73.7 million in 2015. This represents a 141% improvement through the period analyzed.
A trend analysis also indicates that cost cutting measures and business divestures resulted in an
increase in cash and cash equivalents of 35.9%. This positions the company well to invest in new
technologies and acquisitions.
Increased financing to acquire Wincor Nixdorf has increased noncurrent liabilities by 26.1%, but
positions the company to substantially expand its market share.
An assessment of key financial ratios indicates a high level of financing however this is consistent
with the companys restructuring plan.
Recent restructuring actions taken by the company (Diebold 2.0) have successfully returned the
company to profitability by the end of the period analyzed.
Future plans position the company to achieve its goal of sustained profitability.
Investment in Diebold Inc. is recommended; however a cautious investor may want to
see a future reduction in long term and short term financing and an improvement in
debt ratios prior to investment.
Resources Consulted
https://finance.yahoo.com/quote/D
BD?p=DBD
http://www.dieboldnixdorf.com/-/media
/diebold/diebold-asset-library/
dn_corporatepresentation_august201
6_v03_en.pdf
http
://www.hoovers.com/company-informa
tion/cs/competition.diebold_incorp
orated.81413af0e95278a5.html