Q4 2022 Diebold Nixdorf Inc Earnings Call
Okay.
Good morning, My name is painting and I'll be your conference operator today at this time I would like to welcome everybody to the depot Nixdorf fourth quarter 2022 conference call. All lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there will be a question answer session. If you would like to ask a question. During this time simply press.
Star followed by the number one your telephone keypad.
I'd like to withdraw your question. Please press star followed by two thank you.
Scott you May now begin your conference.
Thank you Hello, everyone and welcome to our fourth quarter and full year 2022 earnings call I'm, Christine <unk>, Vice President of Investor Relations for Diebold Nixdorf to accompany our prepared remarks, we have posted our press release and presentation to the Investor Relations section of our corporate website.
Later this morning, a replay of this webcast will also be available on the Investor Relations section of our website.
Before we begin I'll remind all participants that during this call you will hear forward looking statements. These statements reflect the expectations and beliefs of our management team at the time of this call, but they are subject to risks and uncertainties that could cause actual results to differ materially from these statements.
Additional information on these factors can be found in the company's three audit and annual filings with the SEC.
Participants should be mindful that subsequent events may render this information to be out of date.
We will also be discussing certain non-GAAP financial measures on today's call a reconciliation between GAAP and non-GAAP measures can be found in the tables of today's earnings release, and now I'll hand, the call over to I'll caveat.
Thank you Christine and thank you all for joining us today.
Before I start as we announced this morning I want to thank my colleague and friend, Jeff Who's FERC for his leadership over the past four years and his significant contributions to our company.
I look forward to working with him over the next few weeks as he transitions to his CFO role to Jim Barton.
Jim <unk> head of Treasury and tax who has been part of our succession planning for the CFO role has been instrumental in refinancing our debt and improving our operating model.
I am excited about working with Jim during this new chapter for our company.
With that I will turn it over to Jeff for some remarks.
Over the last four years, we have accomplished a lot here at Diebold Nixdorf and I'm confident in the path, you're taking the company to success.
I would like to thank the investment community for your continued support and I wish I caveat on the company and the best.
Thanks, Jeff.
We also want to say, thanks to Gary Greenfield, who stepped down as board chair after five years.
For his service to the company.
We are grateful for the contributions of these leaders and for bringing us to this point in our transformation journey.
As communicated earlier this week, we intend to announce a smaller board in our upcoming annual proxy statement are refreshed board and leadership team are excited and unified about our priorities as a company.
Which include operational execution and know that our refinancing its behind us a strong focus on deleveraging.
With that let's now discuss our quarterly results.
Okay.
From key customer wins to important milestones that are improving our operational rigor. The steps we took in 2022 to position our company for a stronger future will be a springboard for our success.
As I reflect on the past 11 months as CEO of Diebold Nixdorf I couldn't be prouder of our employees for helping me navigate an ever changing environment and to our customers for their for the support they provided in their continued trust in DN solutions.
Last year, a significant amount of effort and time was spent on improving operations and completing a refinancing transaction I.
I am happy to say, we ended 2022 on a positive note both with the closing of our transaction support agreement and finishing the year with a record high backlog.
Closing the TSA was an important milestone that provides us with the capital we need to normalize our operations be supplier commitments and fully execute on our value generating model.
Yeah.
It also allows us to put our focus solely back on meeting customer demand converting a record high $1 $4 billion backlog into revenue.
Banking compulsory $1 1 billion of the backlog with retail composing the remainder $305 million.
We now have scheduling and confirmation of 75% of our ATM unit count and 60.
Percents, and 35% of our scope and E plus unit count respectively for 2023.
As we continue to shift our customers in installed base to the new DN series recycling Atms and rollout our self checkout family, including our new retail E C. One solution.
Yeah.
Closing out 2022 with backlog and financial stability has allowed us to enter 2023 focused on clear priorities for our customers employees and shareholders. Our focus is straightforward delever.
Deleveraging free cash flow generation and evaluating all strategic opportunities based on the following three goals.
First and foremost we plan to deliver our products to our customers and maintain operational excellence.
Me be clear in the operational plan, we presented in our last call. We are committed to delivering 60000, Atms 35000 skulls and 134.
He passed in 2023, delivering these products if our first and primary focus as it translates directly into revenue and financial stability.
Next we will stabilize and grow our recurring revenue for <unk>.
Tactic protecting and selectively growing our contract base.
And importantly for the leadership team and I, we will reinvigorate our culture after a year of so much change.
These priorities plus starting the deleveraging process are the foundation for our 2023 model and we are committed to building and delivering our core solutions with a strong focus on unit conversion and unit economics.
We started talking about this last quarter and we believe it is the most simple and effective way to evaluate our performance from an operational event.
As I mentioned previously in 'twenty to 'twenty three we plan to recognize revenue for 60000, Atms 35000, self checkout solutions in 134 point of sale devices.
We have clear line of sight to our ability to manufacture and deliver the units.
Stabilizing our business around our core expertise to drive growth and execute around our contract base will also expand our recurring revenue opportunity creating longer term value.
And finally, we continue to optimize our pricing strategy and we will see the benefit of these actions throughout the year.
As the multiple pieces of our global supply chain continue to stabilize.
We will see some variability quarter over quarter through 2023, however, with the significant work done in 2022 such as getting our Ohio manufacturing facility fully operational and setting up contract manufacturing for the India market. We are building resiliency in our operations.
As we implement our plan, we will be diligent in managing our working capital and liquidity and make sure that costs don't creep back into our business as we continue to look for additional efficiencies.
Demand for our banking and retail solutions in the market is high and we will deliver.
I look forward to sharing more information with you on these company wide priorities in future quarters, now I would like to turn it over to Jim to cover our Q4 2022 financial performance.
Thank you Octavio.
Prepared remarks will include references to certain non-GAAP metrics, such as adjusted EBITDA today I'll spend my time discussing the fourth quarter results relative to the full year 2022 operating model included on our last earnings report on November eight.
For a discussion of our fourth quarter and full year performance relative to prior periods. Please see the financial summary included in our earnings release.
Total revenue of approximately $969 million was largely in line with our Q4 risk adjusted operating model, we revenue the falling units in Q4, 17000, Atms approximately 6000 scope and approximately 33000 ethos.
Adjusted EBITDA of approximately $104 million was also in line with our Q4 operating model and represents a sequential improvement of approximately $28 million or approximately 37% over the third quarter.
The sequential improvement was driven by higher conversion of units to revenue along with continued execution on our cost savings plan and marks the return of exceeding $100 million of quarterly adjusted EBITDA.
For the full year, we revenue total.
Total revenue for the full year total revenue of approximately 346 1 billion, we recognize revenue on the falling units and full year 2020 to approximately 49000 Atms.
Approximately 21, thousands goes and approximately 126000 ethos.
Adjusted EBITDA of approximately $265 million was in line with our operating model considering the risk previously communicated in Q3.
Turning to 2023 for a moment with respect to liquidity, we're modeling to have adequate liquidity throughout 2023 to run our business and execute on our plan and will vigilantly manage liquidity through increased operational rigor.
We ended 2022 with approximately $345 million in liquidity and as for our model our targeting to end 2023 with greater than $375 million of liquidity.
The increase is modeled to be the result of positive free cash flow generation net of anticipated debt Paydowns in Q4 of 2012.
Now Octavio will walk you through our banking and retail business and financial highlights.
We had a strong number of customer wins during the quarter.
In banking the shift from legacy ATM ATM devices continued as our new DN series cash recyclers comprises approximately 80% of total new banking mortgage and North America in the fourth quarter.
In terms of financial performance banking revenue came in at $689 million and segment operating profit was 102 million both metrics were up sequentially due largely to increased unit delivery and continued focus on driving efficiencies in the business.
In retail we saw contract based growth in self service solutions, including self checkout as the vast majority of scope shipments represent new placements in the market and have generally a strong service attachment rate.
Coming off of <unk>.
<unk> National Retail Federation show better known as center in New York City in January our retail solutions remained in high demand and our self checkout business continues to grow faster than the market.
Especially as we have started the rollout at a major grocer in the U S.
Increasingly more U S based retailers are seeing the difference of the DN skull experience in these stores.
In addition, we are also very excited about our new DN series D. C. One product, which received great feedback from over 160 customers who attended the launch during the NRA show. We believe this product is a game changer, because it allows the retailer to easily and economically move from a traditional checkout to a self check.
To stay ahead of consumer preferences.
Retail revenue was approximately $276 million in the fourth quarter, while segment operating profit was $44 million sequentially.
Sequentially revenue growth was largely product driven which was a function of improved self checkout volumes and a rebound in third party solution business.
Operating profit improvement was largely the result of gross margin improvement due to higher volume and mix.
Despite significant supply chain challenges retail managed to grow low single digits, excluding currency and divestitures in fiscal year 2022.
Now I would like to provide you an update on the cost savings plan, we implemented last year.
We entered 2023 with $175 million up executed run rate cost savings and expect.
To close the year with a run rate of $190 million.
We continue to target mid.
Midpoint of 2023 for completion of the restructuring and expect to see some cost savings benefits in the first half off the year offset by the reinstatement of our annual incentive compensation and merit pay increases.
Okay.
In closing as we look ahead in 2023, we are well positioned for success with a strong order pipeline and are straightforward focus converting our backlog into revenue.
I'd like to recognize our incredible employees for their hard work and dedication.
Especially during a year of considerable change their hard work discipline and unwavering commitment to our customers are making a real difference in our efforts to strengthen our business and our competitive position.
We look forward to continuing to make important strides to deliver world class products and services that meet the demands of our banking and retail customers, while sustaining our market competitiveness we.
We are building momentum and we will leverage our leadership position to capitalize on opportunities and transforming in a transforming industry.
I am excited to move forward in 2023 with a clear plan to success and a strong committed global Pete.
With that I will now turn the call over to the operator for Q&A.
Okay.
Thank you.
Again, if you would like to ask a question. Please press Star then the number one on your telephone keypad.
Okay.
Well of course, but just a moment to compile the Q&A roster.
The first question today.
Comes from the line of Matt Summerville from D. A Davidson. Please go ahead. Your line is now open.
Okay.
Thanks couple of questions, maybe first let's talk about pricing versus input costs. What was your total price capture in 'twenty, two and how much incremental price do you intend to capture in 'twenty, three and with that what will your price cost ratio look like.
So Matt Thanks for the question and one with multiple multiple ways to answer this for you.
Let me start with the pricing question.
Clearly as inflationary pressures accelerated through 2022, we needed to take pricing action and with extended supply.
Fly chain lead times, we were always a little bit behind the curve in our cost to price ratio. We've made significant changes to improve supply chain velocity, which we will start to see and I am confident that we've worked through most of the backlog that was I would say incorrectly price where price not considering some of the inflationary pressures so.
As we stated in our in our operating plan you can see the walk through and we expect to get to go to our historical margins by the end of 'twenty by the end of the year. So that's what I would tell you. That's the work that we're doing in that aspect.
It is important to note we changed many things around pricing.
The frequency, though the monitoring of input costs that in this changing environment needs to be done almost on a daily basis is one of the changes we've changed sales compensation sold out our sales teams are more heavily compensate or compensated based on the profitability of the deals that they bring so I am I am.
Confident then we can and you can probably walk you through in a in a in a different called through all the pricing elements that are are at play, but we feel confident that all these actions will help us get back to our historical to our historical margins.
Yeah. The other part of your question Matt.
Hi.
Sure.
The all around around input costs, we do see you know that input costs have started to have stabilized and are actually starting to trend in a positive in a positive direction.
I would give you the clear examples.
One of the biggest headwinds that we had was around microelectronics components, both in availability and cost.
We see the cost starting to normalize and availability improves has improved significantly another big input cost has been global logistics, where we now see container pricing trending trending favorably. It started trending favorably at the beginning of the quarter and we continue to see that trending favorably. So I would say that both the new.
New pricing discipline, the new pricing actions that we've taken plus.
Fifth stabilization on the component inputs I think it's still too early to call that we will be know that it's a significant reduction but at least we see that it has stabilized and now starting to trend in the right direction will clearly be beneficial as we go through the year.
Got it.
Thank you for that color and then just.
As a follow up.
Octavio now.
I've taken on the role as chairman I'm wondering if this may be allows the company to think differently.
About strategically about the business and as chairman and CEO do you think it makes sense for the company to formally you know look at our strategic process as a means to drive accelerated deleveraging.
So Matt.
The first thing I'm very I'm very excited about the you know the way the company has structured itself I think it's part of a broader plan that the board of directors has.
We are refreshing our refreshing our board, creating a smaller board the deficient to combined the CEO and chairman position.
<unk> is very clear for the time being we have to be very very aligned on the priority for the company. One of them is deleveraging you know.
That that I want to be very clear about so we will clearly evaluate all options and that is something that we that the board is very conscious about and we will look at all possibilities. This operational things that we can do to deleverage there and we will use every tool at our disposal to really look at how we how we can change the trajectory of the.
That the company has no debt burden that the company has.
But I would tell you that we will look at all at all I'll turn it over and this is one of the priorities of our board.
Okay.
Great I appreciate that I'll get back in queue. Thank you.
Thank you Matt.
Thank you.
The next question today comes from the line of Paul Chung from Jpmorgan. Please go ahead. Your line is now open.
Yeah.
Hi, Thanks for taking my question so just on <unk>.
<unk> shipments you recognized I think 49 for the for the year.
I think the three key Guy who was around 52, so what drove the shortfall there and.
On the confirmed 45 K orders for 23 of this.
Higher than normal confirmed orders this early in the year given some of the <unk>.
Component shortages kind of hitting last year how company.
Is it firm on kind of delivering on those units. This year and then I have a follow up.
Sure sure sure Paul.
Let me start with the one around where do we stand today with our backlog and confirmed manufacturing and deliveries to customer.
As you saw we have you know north of 70 plus percent in ATM, 60% been scope.
These are orders that are now scheduled in our manufacturing are clear to build based on the customer scheduled unclear to built to us means that we either have all the components, we need it or we have commitment for RMR suppliers to deliver those components.
And in the time that we need those components to complete those units. So I would tell you that our view is we are extremely confident.
Delivering on those on those units so.
As far as how does that compare to add to it to history and again I'm always a little reluctant to talk about history, because the world has changed so much over the past over the past year at least over the past two years.
But if we look historically, we have never started the year with more than 30% of our backlog in this position. So we are clearly in a much better position right now to deliver on our operational plan that we've ever been before so I'm I'm comprehend about that and the other side, we continue to receive significant orders from our.
Our appliance.
Our backlog, even though our revenue grew didn't reduce that as much as we were expecting two because we had strong order entry that you know again that surpassed our expectations. So that's helped US continue building on that backlog. So so to make the long story short we feel very confident on delivering on those units and we feel very confident that with the <unk>.
Then rescheduling backlog, we will get to the stated goals that are aligned to our plans.
Okay, great. Thanks for that and then on the planned revenue unit 60, K that would.
Suggest 20% increasing unit so how does that 60 K unit projection.
Translate to overall banking revenue results or SAR 23 can you talk about the ASC mix.
FX that youre seeing.
Services attach rate software.
Yes, so Paul I.
We will start disclosing though as we go into Q1 the revenue the units, we manufacture and remember we don't manufacture it neither our ATM, nor a skull world E. Pos device without a firm customer order. So we will start disclosing how many devices, we manufactured and how many of.
Those turned into revenue during the quarter.
Let me give you a hypothetical example of what you will see in the ideal world.
To deliver 60000, Atms for cash flow refunds and linearity it would be great. If we could.
Manufacturer 15000, Atms every quarter and then revenue 15000, Atms every quarter.
What you will see US doing is probably Q1 and a portion of Q2, we are manufacturing will exceed our revenue as we're shipping Atms across the globe, but starting the second half of Q2 and forward you will you'll start seeing our manufacturing be lower than the rest than the units that we start revenue so youll start seeing.
That flow and we will share that with you.
As far as the Asp's and that we will we will keep it consolidated remember depending on the type of unit, whether it's a recycler or a or a cash dispenser, whether it's being sold to a large national bank in the U S or a small credit union or a global bank or the Asian customer the Asp's out have great bear.
<unk>, but we will we will start giving you more color around that and into the future for now because in any given quarter. There can be some variation based on geographic mix and product mix, but overall the year it should be a fairly straightforward calculation.
Okay. Thanks for that and lastly on free cash flow have you provided an initial outlook for 'twenty three I didn't see it but how.
How do we think about kind of working cap dynamics cash interest expense capex.
And.
You know your expectations for how cash builds through the year.
Thank you.
I'll turn that over to two my through my colleague Jim. So he can answer. His first question asks as incoming CFO . Paul. So he will always have a special he will always have a special place in his heart is the first question comes from you.
Yes.
Yes.
I'd say, Paul we kind of couched it there in the context of liquidity right. I mean, we've talked about where we added 22, and then where we expect to.
Where we expect to end 2003, and so you can you can appreciate that within there are.
There is positive free cash flow generation and the improvement the improvement asset to all of the one time items that that we had in 2022 to your point.
Is going to come from a fair amount of working capital efficiency and as it relates to how we see that sequencing throughout the year. So Octavius point I mean, that's something that we continue to.
You need to work through.
As we layer in where were those efficiencies kind of mark themselves throughout the year.
Great. Thank you.
Thank you.
Thank you.
The next question today comes from the line of Kartik Mehta from Northcoast Research. Please go ahead. Your line is now open.
Good morning, a caveat as you know the company has refinanced its debt and it seems like it's in a better liquidity position, but.
As everything that's happened resulted in any kind of competitive issues, where maybe.
Customers might have backed off.
Because of the situation Diebold was in and if so has that changed at all.
So so karthik, there and I think its in our in our in our presentation slides and I, probably should have touched on that because it's a very very promising statistic for the future.
And the proof of the relationships, we have with customers clearly delivery delays and you know a little bit of uncertainty around the financial situation.
Always been customers' minds, but we conducted our annual banking customer survey.
During the year and I will tell you that 92% up our customers' plans to maintain or expand our relationship with diebold nixdorf VAT as people for a business to business companies in extremely high amount. So as I started my remarks, when I say I think our customers for their support I mean that whole heartedly, because we continue to receive.
Orders for both our.
Hey, recyclers for our self checkout devices and again I think that the demand is there the quality of the solution fits there and our and our customers remain very committed to continuing doing business with us we really didn't see any significant or we didn't see any cancellations based on that on delivery times.
And we don't expect to see any so we're I think we entered the year with better operational rigor better financial position and an enviable customer base, both in banking and retail that that is rooting for us to be successful.
And then I know you talked a little bit about free cash flow, but.
Would you think that I think you previously gave some thoughts on 2023 free cash flow are those still valid or has anything changed maybe to change your thoughts on that.
Yes, I would say that that that were generally in line I think when we talked at the third quarter.
And we we put this out in an Unlevered terms I would say that were materially in line with that as we think about where we expect 23 to two ultimately land.
Or how we're modeling it now there are some things as I mentioned previously that we're working through in terms of working capital.
And related efficiencies and obviously you've got the.
EBIT growth in there as well year over year, but I would say that that the the value that we put out there when our in our model that we talked about at the third quarter is still largely intact for how we currently think about 'twenty three.
Yeah.
Yes.
I appreciate it.
Yeah. The model that we put forward that is predicated on the unit conversion and unit economics that we've put forward that that is that if our guiding post.
That's why we're so focused on talking about these units because these units to support the model that we put forward and that's the model that we're driving for so so.
As Jim said, there's always through the year there'll be little little.
Movement, but we are committed to warm up to our model in and are executing to that end.
Perfect. Thank you I'll caveat I appreciate the color.
Yeah.
Thank you.
The next question today comes from the line of Matt <unk> from Wedbush Securities. Please go ahead. Your line is now open.
Good morning, Thanks for taking my question.
With the shortfall.
And unit shipments on the ATM side versus your prior guide.
And that's all of you talked a bit about.
Yes.
Orders are being better than expected in Q4, driving revenue backlog log higher.
So both of those give you some conviction or some more buffer.
In terms of how Youre thinking about your 2012.
Good job.
So so so Matt.
What I would say is we feel very comfortable with the numbers that we have we.
We still I would say that my first priority is to deliver what we commit to what we committed to delivering that's the first priority. So we have we're in the middle of our first quarter, we're working hard to deliver our first quarter. Then we will work hard to deliver our second third and fourth quarters and yeah. If demand remains strong.
We clearly would would if the markets change we know there's possibility, but right now our focus is let's deliver what we promise and not not over rotate.
On what we can do so we have a solid plan and that's what we're aiming for right now.
Thanks, and I guess my follow up is given the high backlog levels does that shifts how we should think about.
Revenue linearity all throughout the year.
I know from manufacturing perspective, you're trying even though you're manufacturing so you.
Produce a bit more in the first half more in the second half but.
But it would seem to me the normal year Youre. Your order flow would also tend to be more second half oriented where now you're just coming into the year.
With a whole lot more in terms of orders in hand, so I guess should linearity would be different or is there something on the manufacturing side.
Where you get more of a ramp through the year. So it looks more like.
Normal Q1 through Q4 revenue right.
Our planned Madden remember, we don't we don't discuss guidance based based on on quarters, but what youre looking at things.
Right away in the perfect World, We would manufacture as I said 15000, ATM I can't do the math on the scope three four divided by <unk> 8000, 9000 device, but whatever the math ends up being that would be the perfect. We build it and we invoice it within that within that.
That balance clearly based on where our manufacturing is based on the shipment times.
I would encourage you to think that the being all that we will be very stable and manufacturing throughout the year trying to build as much as we can in the first half of the year and that.
That revenue will probably will probably be lower than in than the shifting you know will be.
Revenue less units than we shipped in Q1 and as we move into Q2 and the end though.
You will start seeing that kind of start to match up and then as we move through the latter half of the year, where you will see that revenue starts exceeding manufacturing capacity you know what as we close the year. So.
And you'll see us as I said, youll see us disclosing that and it'll be very clear you will be able to very clearly track how much we manufacturer how much became revenue that quarter. How much is carrying over to next quarter. How much is being manufactured how much is being revenue then it becomes that's why I'm. So.
Passionate about our unit economic model because every unit that we manufacture.
I think Paul asked this question earlier and I didn't answer Bell every unit that we manufacture.
An ATM and scope carries a very very high service attach rate I would say an ATM. So it's almost.
95, plus percent famous with scope and then it also carries significant software attach revenue involved in the banking side and so so again, you will be able to start modeling those things very clearly as we move forward.
Thank you so much.
Thank you.
The next question today comes from the line of Pizza second from Creditsights. Please go ahead. Your line is now open.
Hi, good morning.
Can you talk about some of the tailwind you're seeing.
The impact on the guidance I'm assuming.
Currency.
Transportation costs have come down could you maybe quantify some impact.
2023.
Yeah.
Peter.
So as I mentioned earlier, we see component pricing stable I think.
We still don't see significant reductions in component pricing.
What we do see is that we will be able to avoid some of the headwinds like spot mice that were very critical for us that means suppliers that couldn't deliver to us for any recent and us having to go up into the open market unusually higher prices. So we feel that that type of dynamic with increased spot buys that affected our our cost will be.
Be largely behind us.
Transportation costs are clearly trending downward. That's you know that that that is true we see that in container and container routes both from Europe , where for inflammation. So so those you know those factors are looking better throughout the year and again.
As I said.
Currency also the we have a basket of currencies that we try to try to monitor from the euro the pound.
Brazilian drag the Mexican peso.
So there is there's always puts and takes there right now I would tell you you know what.
Plan, we put forward you know as a company.
What we're what we're aiming for.
Can there be tailwind for our currency, probably you know probably if that happens we will adjust accordingly can there be headwinds.
The same thing that's why we're so focused on talking about the units because the units get us floor plan and then you know currencies fluctuate a little bit, but we we'll just deal with that as it happens.
Okay.
Of your plan.
And easily.
EBITDA in.
Classified.
During this call.
Is there any read through or lack of Oh boy.
We are affirming.
Four seven April for this year.
So what I would tell you there isn't there's nothing to read into it and remember we're not in a strange situation, where I wouldn't call 470.
Four seven DSR operating plan as we went through refinancing and keep in Q3 and Q4, we didn't put out guidance, we put out our operating plan that is the plan that we're operating against that is the plan that.
Our team is committed on hitting so you shouldn't read anything into it we feel that without if our plan. If we worked to provide guidance, we could probably say, it's higher than lower than that number but since we've already shared our operating plan that is our operating plan that is what we're driving to.
And the units are key to that so if you if we hit those units we will be hitting our operating plan and that's how you should think about our business.
Okay Lastly.
Some other companies publicly traded have.
Love to.
The equity markets too.
Reduced leverage is that something that youre currently evaluating.
Yeah.
So so Peter.
We are evaluating all these.
Deleveraging the company is clearly an area of focus and.
All options to deleverage the company our options that we will evaluate that is something that myself. The board of directors take very seriously and were evaluating all options and we would and we look forward to communicating some of those sections lastly, as we've kind of crystallize that plan and talk about that during our during future quarters.
But yes, we're.
We're looking at all all tools at our disposal, we're looking at.
Okay.
Thank you.
Thank you.
Yeah.
Thank you.
Ken if you would like to ask a question. Please press star followed by one on your telephone keypad.
The next question today is a follow up question from Matt Summerville from D. A Davidson. Please go ahead. Your line is now open.
A coffee I was wondering just with the ATM business, if you could sort of.
Talk a little bit more specifically about the demand environment as we look ahead.
Can you just that you can add regional color, maybe touch on North America, Latam EMEA and Asia Pacific in terms of what your what Youre seeing there.
Yes, so I'll try to be very brief to kind of close match, Matt, but I would say North America.
As you know it.
It's a market that is embracing recycling technology is a good way to improve the cash efficiency in the end.
In the branches and change the branch footprint serve SMB customers better. So we continue to see strong refresh cycle happening in North America. You know this is a multi year cycle, but we see that new recycling technology plus the age of the fleet in North America will will allow us to.
And our technology will allow us to continue having success in that market Latin America.
It has a very special place in my heart, but it continues being a cash world.
So we still see strong demand from almost every market in Latin America. We can we have a very strong leadership position in some of those marketing and I would say all of those markets with plus 60% share in some cases. So we continue to work hard to maintain that leadership in Latin American demand there.
There continues to be to be strong there their recycling it well accepted but they're clearly more of a cash dispenser market still with just.
Access points Bingle key points for that market Asia Pacific to us. It's very important that you recall, we had exited the Indian market, which is one of the largest ATM markets in the world.
Through contract manufacturing, we are entering the reentering the Indian market and we feel optimistic that that will once again create some balls you know additional volume for us in India as we perfect fits contract manufacturing model.
And lastly, Europe , I would say that Europe looked like a stable market. We continue to see the consolidation in the pooling of ATM, So cross across countries and across banking institution, but again.
As that pooling happen if it does allow the Pos is up.
Opportunity to refresh those older machines and so it's a it's a good opportunity, but we see that more as a stable market.
Going forward and importantly, as I described but different dynamics in the market. We're also working very hard to align our cost structure to those markets. So.
Our cost structure needs to reflect the opportunity where the opportunities are and that's something that the team is working very diligently on.
Lastly.
<unk> been talking.
Quarterly basis, and sort of providing updates on.
The progress you.
We're sort of seeing.
Infrastructure initiatives I'm curious as to where you ended 2022 in terms of.
Number of ports or charges under contract and what your goal maybe for 'twenty, three and longer term about the business.
Yeah, So Matt we met all the goals that we had four units under contract for our EV charging initiative.
Yeah.
Our goal we've we've integrated that's more that's more tied to see that what's kind of a separate growth initiative run separately, we integrated that into our retail portfolio as we see tremendous synergies remember in our retail portfolio. We serve some of the largest fuel and convenience operators in the world that are also.
Also.
Going to be large large charge point employers, we sell some of the large charge point the operators. So we've integrated that into retail because we see a lot of synergies and it's a service that you know and we have a large organization that can help us position that in different vertical. So so we're very optimistic so we exceeded the target.
Of 30000, we ended close to 50000 and and again in what continues to be an interesting opportunity.
As you know you follow that industry vertical very closely there's still a lot of conforming and defining what the models need to look like and that's why I said before this is a longer term opportunity, where we want to be on the starting point and really adopt as that market continues to evolve.
Okay.
Lastly, can you put a little bit of a finer point on where you are at exactly with the ramp of Ohio manufacturing.
With respect to whether you're fully up and running with your Indian contract manufacturing partner. Thank you.
Yeah. So so Ohio is fully operational Matt you and me being now, Ohio retina you long.
Long time, he's the recent Ohio restaurant by I'm happy to walk you through our manufacturing facility anytime you.
You want and as far as India, we started setting that up early early last year and we shipped the first couple of hundred units in December so where in both cases, we now feel where we are fully operational and have met and have plans on what each of these factors, we will deliver for us throughout the year.
Okay.
Okay.
Thank you.
There are no additional questions waiting at this time, so I'll turn the call back over to Octavia Marquez.
People's next door. Please go ahead your line now open.
Thank you operator, and thank everyone, who listened and participated in today's call. We look forward to seeing you at upcoming Investor conferences and during our next earnings call. Thank you again.
This concludes today's conference call. Thank you all for your participation you may now disconnect your lines.
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