Diebold Nixdorf plans 3x leverage, to use free cash flow to cut debt

By Devika Patel

Knoxville, Tenn., Feb. 10 – Diebold Nixdorf will use free cash flow to pay down debt, with hopes of getting its net leverage ratio under 3x net debt to adjusted EBITDA by 2023.

The nearest maturity is November 2023, and the company’s leverage has not changed since last year.

“At the end of 2020, the company's net leverage ratio of 4.4x was unchanged from the end of 2019 as the increase in EBITDA and our positive free cash flow was offset by payments associated with our debt refinancing, M&A activities and an unfavorable exchange rate on foreign net debt balances,” senior vice president and chief financial officer Jeffrey Rutherford said on the company’s fourth quarter and year ended Dec. 31, 2020 earnings conference call on Wednesday.

“Over the next three years, we will generate stronger free cash flow due to the elimination of restructuring payments, continued strong management of net working capital investments and incremental profitability.

“We expect to use free cash flow to pay down debt, and we're targeting a reduction in leverage ratio to less than 3x net debt to adjusted EBITDA by 2023.

“The next material debt maturity date is November of 2023, which provides the company with ample time to complete our transformation, strengthen our credit profile and execute on our growth initiatives,” Rutherford said.

Cash, cash equivalents and restricted cash were $324.5 million as of Dec. 31, 2020, compared to $280.9 million as of Dec. 31, 2019.

Long-term debt was $2,335,700,000 as of Dec. 31, 2020, compared to $2,108,700,000 as of Dec. 31, 2019.

Diebold is a North Canton, Ohio-based provider of self-service delivery, value-added services and software primarily to the financial industry.

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