Intrinsic value of Diebold Nixdorf - DBD

Previous Close

$16.75

  Intrinsic Value

$131.24

stock screener

  Rating & Target

str. buy

+684%

Previous close

$16.75

 
Intrinsic value

$131.24

 
Up/down potential

+684%

 
Rating

str. buy

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of DBD stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  37.08
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  3,316
  5,306
  8,197
  12,259
  17,787
  25,095
  34,500
  46,309
  60,806
  78,243
  98,827
  122,720
  150,038
  180,846
  215,171
  253,002
  294,303
  339,012
  387,058
  438,364
  492,851
  550,449
  611,098
  674,751
  741,380
  810,975
  883,544
  959,119
  1,037,750
  1,119,508
  1,204,485
Variable operating expenses, $m
 
  5,118
  7,854
  11,695
  16,925
  23,837
  32,733
  43,903
  57,616
  74,110
  93,580
  116,082
  141,921
  171,063
  203,531
  239,316
  278,382
  320,673
  366,120
  414,650
  466,189
  520,672
  578,039
  638,249
  701,274
  767,104
  835,748
  907,234
  981,611
  1,058,947
  1,139,327
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  3,476
  5,118
  7,854
  11,695
  16,925
  23,837
  32,733
  43,903
  57,616
  74,110
  93,580
  116,082
  141,921
  171,063
  203,531
  239,316
  278,382
  320,673
  366,120
  414,650
  466,189
  520,672
  578,039
  638,249
  701,274
  767,104
  835,748
  907,234
  981,611
  1,058,947
  1,139,327
Operating income, $m
  -160
  187
  344
  563
  862
  1,258
  1,767
  2,405
  3,190
  4,133
  5,246
  6,639
  8,117
  9,783
  11,640
  13,687
  15,921
  18,339
  20,938
  23,714
  26,662
  29,777
  33,058
  36,502
  40,106
  43,871
  47,797
  51,885
  56,139
  60,561
  65,158
EBITDA, $m
  -25
  405
  626
  937
  1,359
  1,918
  2,636
  3,539
  4,646
  5,979
  7,552
  9,377
  11,465
  13,819
  16,442
  19,333
  22,488
  25,905
  29,576
  33,496
  37,660
  42,061
  46,695
  51,559
  56,651
  61,968
  67,514
  73,288
  79,297
  85,544
  92,037
Interest expense (income), $m
  85
  118
  257
  508
  859
  1,338
  1,970
  2,784
  3,806
  5,060
  6,569
  8,351
  10,418
  12,782
  15,448
  18,419
  21,693
  25,267
  29,136
  33,294
  37,734
  42,449
  47,433
  52,682
  58,190
  63,956
  69,979
  76,259
  82,799
  89,604
  96,679
Earnings before tax, $m
  -238
  69
  86
  56
  3
  -80
  -203
  -379
  -616
  -928
  -1,323
  -1,712
  -2,302
  -2,999
  -3,808
  -4,732
  -5,772
  -6,927
  -8,197
  -9,580
  -11,072
  -12,672
  -14,375
  -16,180
  -18,084
  -20,085
  -22,182
  -24,374
  -26,660
  -29,042
  -31,520
Tax expense, $m
  -67
  19
  23
  15
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -33
  50
  63
  41
  2
  -80
  -203
  -379
  -616
  -928
  -1,323
  -1,712
  -2,302
  -2,999
  -3,808
  -4,732
  -5,772
  -6,927
  -8,197
  -9,580
  -11,072
  -12,672
  -14,375
  -16,180
  -18,084
  -20,085
  -22,182
  -24,374
  -26,660
  -29,042
  -31,520

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  717
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  5,270
  7,288
  11,260
  16,839
  24,433
  34,471
  47,390
  63,611
  83,525
  107,476
  135,751
  168,572
  206,096
  248,414
  295,564
  347,531
  404,262
  465,676
  531,673
  602,148
  676,993
  756,111
  839,420
  926,856
  1,018,379
  1,113,976
  1,213,660
  1,317,471
  1,425,481
  1,537,786
  1,654,512
Adjusted assets (=assets-cash), $m
  4,553
  7,288
  11,260
  16,839
  24,433
  34,471
  47,390
  63,611
  83,525
  107,476
  135,751
  168,572
  206,096
  248,414
  295,564
  347,531
  404,262
  465,676
  531,673
  602,148
  676,993
  756,111
  839,420
  926,856
  1,018,379
  1,113,976
  1,213,660
  1,317,471
  1,425,481
  1,537,786
  1,654,512
Revenue / Adjusted assets
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
Average production assets, $m
  702
  1,125
  1,738
  2,599
  3,771
  5,320
  7,314
  9,817
  12,891
  16,587
  20,951
  26,017
  31,808
  38,339
  45,616
  53,637
  62,392
  71,871
  82,056
  92,933
  104,484
  116,695
  129,553
  143,047
  157,173
  171,927
  187,311
  203,333
  220,003
  237,336
  255,351
Working capital, $m
  795
  297
  459
  686
  996
  1,405
  1,932
  2,593
  3,405
  4,382
  5,534
  6,872
  8,402
  10,127
  12,050
  14,168
  16,481
  18,985
  21,675
  24,548
  27,600
  30,825
  34,221
  37,786
  41,517
  45,415
  49,478
  53,711
  58,114
  62,692
  67,451
Total debt, $m
  1,798
  3,678
  7,253
  12,274
  19,108
  28,143
  39,770
  54,369
  72,291
  93,848
  119,295
  148,834
  182,605
  220,692
  263,127
  309,897
  360,955
  416,227
  475,625
  539,052
  606,413
  677,619
  752,597
  831,289
  913,660
  999,698
  1,089,413
  1,182,843
  1,280,051
  1,381,126
  1,486,180
Total liabilities, $m
  4,679
  6,559
  10,134
  15,155
  21,989
  31,024
  42,651
  57,250
  75,172
  96,729
  122,176
  151,715
  185,486
  223,573
  266,008
  312,778
  363,836
  419,108
  478,506
  541,933
  609,294
  680,500
  755,478
  834,170
  916,541
  1,002,579
  1,092,294
  1,185,724
  1,282,932
  1,384,007
  1,489,061
Total equity, $m
  591
  729
  1,126
  1,684
  2,443
  3,447
  4,739
  6,361
  8,352
  10,748
  13,575
  16,857
  20,610
  24,841
  29,556
  34,753
  40,426
  46,568
  53,167
  60,215
  67,699
  75,611
  83,942
  92,686
  101,838
  111,398
  121,366
  131,747
  142,548
  153,779
  165,451
Total liabilities and equity, $m
  5,270
  7,288
  11,260
  16,839
  24,432
  34,471
  47,390
  63,611
  83,524
  107,477
  135,751
  168,572
  206,096
  248,414
  295,564
  347,531
  404,262
  465,676
  531,673
  602,148
  676,993
  756,111
  839,420
  926,856
  1,018,379
  1,113,977
  1,213,660
  1,317,471
  1,425,480
  1,537,786
  1,654,512
Debt-to-equity ratio
  3.042
  5.050
  6.440
  7.290
  7.820
  8.160
  8.390
  8.550
  8.660
  8.730
  8.790
  8.830
  8.860
  8.880
  8.900
  8.920
  8.930
  8.940
  8.950
  8.950
  8.960
  8.960
  8.970
  8.970
  8.970
  8.970
  8.980
  8.980
  8.980
  8.980
  8.980
Adjusted equity ratio
  -0.028
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -33
  50
  63
  41
  2
  -80
  -203
  -379
  -616
  -928
  -1,323
  -1,712
  -2,302
  -2,999
  -3,808
  -4,732
  -5,772
  -6,927
  -8,197
  -9,580
  -11,072
  -12,672
  -14,375
  -16,180
  -18,084
  -20,085
  -22,182
  -24,374
  -26,660
  -29,042
  -31,520
Depreciation, amort., depletion, $m
  135
  218
  283
  373
  497
  660
  870
  1,133
  1,457
  1,846
  2,305
  2,739
  3,348
  4,036
  4,802
  5,646
  6,568
  7,565
  8,638
  9,782
  10,998
  12,284
  13,637
  15,058
  16,544
  18,098
  19,717
  21,403
  23,158
  24,983
  26,879
Funds from operations, $m
  177
  268
  346
  414
  499
  580
  666
  755
  841
  918
  982
  1,027
  1,046
  1,036
  993
  914
  796
  638
  440
  203
  -74
  -388
  -738
  -1,123
  -1,540
  -1,988
  -2,465
  -2,970
  -3,502
  -4,059
  -4,641
Change in working capital, $m
  150
  111
  162
  227
  310
  409
  527
  661
  812
  976
  1,153
  1,338
  1,530
  1,725
  1,922
  2,119
  2,313
  2,504
  2,691
  2,873
  3,051
  3,225
  3,396
  3,565
  3,731
  3,897
  4,064
  4,232
  4,403
  4,578
  4,759
Cash from operations, $m
  27
  157
  184
  187
  190
  171
  140
  93
  29
  -58
  -170
  -311
  -483
  -689
  -929
  -1,205
  -1,517
  -1,866
  -2,250
  -2,670
  -3,125
  -3,613
  -4,134
  -4,687
  -5,271
  -5,885
  -6,529
  -7,203
  -7,905
  -8,638
  -9,400
Maintenance CAPEX, $m
  0
  -74
  -118
  -183
  -274
  -397
  -560
  -770
  -1,033
  -1,357
  -1,746
  -2,205
  -2,739
  -3,348
  -4,036
  -4,802
  -5,646
  -6,568
  -7,565
  -8,638
  -9,782
  -10,998
  -12,284
  -13,637
  -15,058
  -16,544
  -18,098
  -19,717
  -21,403
  -23,158
  -24,983
New CAPEX, $m
  -40
  -423
  -613
  -861
  -1,172
  -1,549
  -1,994
  -2,503
  -3,073
  -3,697
  -4,364
  -5,065
  -5,791
  -6,531
  -7,277
  -8,020
  -8,756
  -9,478
  -10,186
  -10,877
  -11,551
  -12,211
  -12,858
  -13,495
  -14,125
  -14,754
  -15,385
  -16,022
  -16,670
  -17,333
  -18,015
Cash from investing activities, $m
  -561
  -497
  -731
  -1,044
  -1,446
  -1,946
  -2,554
  -3,273
  -4,106
  -5,054
  -6,110
  -7,270
  -8,530
  -9,879
  -11,313
  -12,822
  -14,402
  -16,046
  -17,751
  -19,515
  -21,333
  -23,209
  -25,142
  -27,132
  -29,183
  -31,298
  -33,483
  -35,739
  -38,073
  -40,491
  -42,998
Free cash flow, $m
  -534
  -340
  -548
  -857
  -1,256
  -1,775
  -2,414
  -3,180
  -4,078
  -5,112
  -6,280
  -7,582
  -9,013
  -10,568
  -12,242
  -14,027
  -15,919
  -17,912
  -20,002
  -22,185
  -24,459
  -26,822
  -29,276
  -31,819
  -34,454
  -37,184
  -40,011
  -42,941
  -45,979
  -49,129
  -52,398
Issuance/(repayment) of debt, $m
  997
  1,987
  3,575
  5,021
  6,834
  9,034
  11,627
  14,599
  17,923
  21,556
  25,447
  29,539
  33,771
  38,087
  42,435
  46,770
  51,058
  55,273
  59,398
  63,427
  67,361
  71,206
  74,978
  78,692
  82,371
  86,037
  89,715
  93,430
  97,208
  101,075
  105,054
Issuance/(repurchase) of shares, $m
  -2
  698
  334
  517
  757
  1,084
  1,495
  2,001
  2,608
  3,323
  4,150
  4,994
  6,054
  7,231
  8,523
  9,929
  11,445
  13,069
  14,797
  16,627
  18,557
  20,583
  22,706
  24,924
  27,237
  29,645
  32,151
  34,755
  37,461
  40,273
  43,193
Cash from financing (excl. dividends), $m  
  947
  2,685
  3,909
  5,538
  7,591
  10,118
  13,122
  16,600
  20,531
  24,879
  29,597
  34,533
  39,825
  45,318
  50,958
  56,699
  62,503
  68,342
  74,195
  80,054
  85,918
  91,789
  97,684
  103,616
  109,608
  115,682
  121,866
  128,185
  134,669
  141,348
  148,247
Total cash flow (excl. dividends), $m
  404
  2,345
  3,361
  4,681
  6,335
  8,343
  10,708
  13,420
  16,452
  19,767
  23,318
  26,951
  30,812
  34,750
  38,717
  42,672
  46,584
  50,430
  54,193
  57,869
  61,458
  64,967
  68,408
  71,797
  75,154
  78,499
  81,854
  85,244
  88,691
  92,219
  95,849
Retained Cash Flow (-), $m
  -179
  -748
  -397
  -558
  -759
  -1,084
  -1,495
  -2,001
  -2,608
  -3,323
  -4,150
  -4,994
  -6,054
  -7,231
  -8,523
  -9,929
  -11,445
  -13,069
  -14,797
  -16,627
  -18,557
  -20,583
  -22,706
  -24,924
  -27,237
  -29,645
  -32,151
  -34,755
  -37,461
  -40,273
  -43,193
Prev. year cash balance distribution, $m
 
  610
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  2,207
  2,964
  4,123
  5,576
  7,259
  9,212
  11,419
  13,845
  16,445
  19,167
  21,957
  24,758
  27,519
  30,193
  32,743
  35,139
  37,361
  39,396
  41,242
  42,902
  44,384
  45,702
  46,874
  47,917
  48,854
  49,704
  50,489
  51,230
  51,946
  52,656
Discount rate, %
 
  9.40
  9.87
  10.36
  10.88
  11.43
  12.00
  12.60
  13.23
  13.89
  14.58
  15.31
  16.08
  16.88
  17.73
  18.61
  19.54
  20.52
  21.54
  22.62
  23.75
  24.94
  26.19
  27.50
  28.87
  30.32
  31.83
  33.42
  35.09
  36.85
  38.69
PV of cash for distribution, $m
 
  2,017
  2,455
  3,067
  3,689
  4,226
  4,668
  4,977
  5,125
  5,102
  4,913
  4,581
  4,138
  3,622
  3,074
  2,531
  2,021
  1,565
  1,175
  856
  604
  413
  274
  176
  109
  65
  38
  21
  11
  6
  3
Current shareholders' claim on cash, %
  100
  50.0
  41.2
  33.9
  28.0
  23.2
  19.3
  16.1
  13.5
  11.4
  9.7
  8.3
  7.1
  6.1
  5.2
  4.5
  3.9
  3.4
  3.0
  2.6
  2.3
  2.0
  1.7
  1.5
  1.3
  1.2
  1.0
  0.9
  0.8
  0.7
  0.6

Diebold Nixdorf, Incorporated provides connected commerce services, software and technology. The Company's geographic segments include North America (NA), Asia Pacific (AP), Europe, Middle East and Africa (EMEA), and Latin America (LA). These segments sell and service financial self-service (FSS), retail solutions and security systems. The Company is engaged in providing connected commerce solutions to financial institutions. These solutions are supported by a field service organization. The Company provides security solutions, which combine a services portfolio and products to help address its customers' needs. The Company provides services for a portfolio of physical security offerings, in addition to serving as a national locksmith. The Company provides voting machines for official elections and the terminals for the governmental lottery and correspondent bank.

FINANCIAL RATIOS  of  Diebold Nixdorf (DBD)

Valuation Ratios
P/E Ratio -38.1
Price to Sales 0.4
Price to Book 2.1
Price to Tangible Book
Price to Cash Flow 46.6
Price to Free Cash Flow -96.8
Growth Rates
Sales Growth Rate 37.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -23.1%
Cap. Spend. - 3 Yr. Gr. Rate 3.3%
Financial Strength
Quick Ratio 7
Current Ratio 0.1
LT Debt to Equity 286.1%
Total Debt to Equity 304.2%
Interest Coverage -2
Management Effectiveness
Return On Assets 0.7%
Ret/ On Assets - 3 Yr. Avg. 3.9%
Return On Total Capital -1.9%
Ret/ On T. Cap. - 3 Yr. Avg. 5.2%
Return On Equity -6.6%
Return On Equity - 3 Yr. Avg. 9.8%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 22.5%
Gross Margin - 3 Yr. Avg. 25.4%
EBITDA Margin -0.5%
EBITDA Margin - 3 Yr. Avg. 4.9%
Operating Margin -4.8%
Oper. Margin - 3 Yr. Avg. 1.2%
Pre-Tax Margin -7.2%
Pre-Tax Margin - 3 Yr. Avg. 0.1%
Net Profit Margin -1%
Net Profit Margin - 3 Yr. Avg. 2.1%
Effective Tax Rate 28.2%
Eff/ Tax Rate - 3 Yr. Avg. 9.6%
Payout Ratio -197%

DBD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DBD stock intrinsic value calculation we used $3316 million for the last fiscal year's total revenue generated by Diebold Nixdorf. The default revenue input number comes from 2016 income statement of Diebold Nixdorf. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our DBD stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 9.4%, whose default value for DBD is calculated based on our internal credit rating of Diebold Nixdorf, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Diebold Nixdorf.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of DBD stock the variable cost ratio is equal to 97.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for DBD stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 7% for Diebold Nixdorf.

Corporate tax rate of 27% is the nominal tax rate for Diebold Nixdorf. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the DBD stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for DBD are equal to 21.2%.

Life of production assets of 9.5 years is the average useful life of capital assets used in Diebold Nixdorf operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for DBD is equal to 5.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $591 million for Diebold Nixdorf - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 75.587 million for Diebold Nixdorf is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Diebold Nixdorf at the current share price and the inputted number of shares is $1.3 billion.

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COMPANY NEWS

▶ ATM machine-maker Diebold's CEO steps down   [Dec-13-17 09:50AM  Reuters]
▶ Why Diebold Nixdorf Inc. Stock Popped Today   [Nov-16-17 04:49PM  Motley Fool]
▶ Diebold reports 3Q loss   [Oct-31-17 07:29AM  Associated Press]
▶ Diebold Nixdorf Names Watson As Chief Marketing Officer   [Oct-04-17 03:55PM  PR Newswire]
▶ Diebold reports 2Q loss   [Jul-19-17 09:01PM  Associated Press]
▶ Story Stocks from Briefing.com   [12:10PM  Briefing.com]
▶ [$$] Banks rush to bring old-fashioned ATMs into digital age   [Jun-27-17 12:28AM  Financial Times]
▶ [$$] NCR: Profiting From the Amazon Arms Race   [Jun-24-17 12:01AM  Barrons.com]
▶ [$$] Cash's Survival Is Diebold's Opportunity   [Jun-10-17 12:58AM  Barrons.com]
▶ Diebold reports 1Q loss   [May-04-17 08:31AM  Associated Press]
Financial statements of DBD
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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