Diebold Nixdorf Inc. Upgraded To ‘B+’ On Improving Free Cash Flow And Leverage Profile; Outlook Stable.
Diebold Nixdorf, a world leader in transforming the way people bank and shop, announced that S&P Global Ratings (S&P) has recently upgraded its credit rating for the company. The upgrade reflects the company’s strengthened financial profile and an expectation for solid cash flow generation and improving debt leverage ratios.
According to S&P, over the past 18 months, Diebold Nixdorf Inc.’s earnings have steadily improved as it benefitted from operating efficiencies related to its recently launched LEAN program and cost restructuring initiatives. Its credit metrics and free operating cash flow (FOCF) generation also improved.
S&P Global Ratings expectations
„We expect larger, one-time restructuring costs to roll off at the end of this year and contribute to lasting cost efficiencies, such that adjusted EBITDA margin rises to about 10.8% in 2025 and continues to improve thereafter.” – the rating agency said. Considering the anticipated roll off in restructuring expenses and realization of related cost synergies, „we project Diebold’s adjusted EBITDA of about $409 million in 2025, increasing to $514 million in 2026„.
„We expect hardware refreshes and geographic expansion opportunities, particularly in retail, will support near-term growth. In 2024, Diebold generated approximately 74% of its revenues from the banking segment and about 43% of the segment’s revenue was tied to product sales. We view the ATM market as mature and expect growth prospects in this vertical will be limited in the medium to long term due to increased digitization and rise in popularity/use of alternative payment methods. As a result, we expect global ATM install base to steadily decline, but note upgrades to recyclers may help offset some erosion. The global ATM install base declined 2% in 2024 from 2023 levels, and Datos Insights (formerly RBR Data Services) expects global ATMs to shrink by about 4.3% over the next six years, reducing worldwide terminal footprint to approximately 2.8 million in 2030.„
„While the changes in demand continue to pressure terminal usage, and thus terminal manufacturers like Diebold, we believe near-term growth opportunities may come from the early upgrade cycle and a software and services led strategy. In particular, we expect Diebold will maintain steady revenue growth and benefit from a terminal refresh cycle (in February 2025, management estimated remaining ATM refresh opportunity of across 75% of its installed customer base) and increased demand for software- and services-based revenues (e.g. cash management/monitoring, machine maintenance). Today, software and services make up roughly 57% of its banking segment mix, and we anticipate this mix will continue to shift in this direction as Diebold ramps its Branch Automation Solutions program.”
„We expect the retail sector to be a larger contributor of top-line growth in 2026, driven by a broad end-market recovery starting the back half of this year. We also believe expansion within European markets and greater penetration in North America, where Diebold currently occupies 9% market share, will support growth in the retail segment. We expect value-add of more customizable, modular solutions and AI-integrated products will also drive customer adoption.”
„At the same time, the non-sticky nature of the retail customer base provides for lower switching costs and supports Diebold’s ability to compete in the North American market. Considering these factors, we forecast somewhat flat revenue in 2025 and slowly ramping low- to mid-single-digit percent growth in 2026 and 2027. Our sales growth expectations consider Diebold’s large and growing backlog of $980 million at the end of second-quarter 2025.„
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