ANNUAL MEETING OF SHAREHOLDERS

Transcription

1 ANNUAL MEETING OF SHAREHOLDERS GETTING DOWN TO BUSINESS WELCOME APRIL 27, 2006 NYSE: DBD

2 ANNUAL MEETING OF SHAREHOLDERS THOMAS W. SWIDARSKI PRESIDENT AND CHIEF EXECUTIVE OFFICER APRIL 27, 2006 NYSE: DBD

3 FORWARD-LOOKING STATEMENTS Some of the comments today may be considered forward-looking statements and may contain company financial estimates -- internal/external factors could significantly impact actual results -- and as a precaution, we refer you to the more detailed information in our annual report or our Form 10-K, which is on file with the Securities and Exchange Commission.

4 Proud to lead such a company Talented and dedicated employees Rich history, solid reputation Respected products and services Core of the company is sound Many challenges GETTING DOWN TO BUSINESS PERSONAL COMMENTS Most are clearly in our scope of control Focus on the customer and Diebold employees Financial results will follow

5 GETTING DOWN TO BUSINESS PERSONAL BELIEFS Customers are the primary focus Having resources close to customers Open and strong communications Developing employees Sharing goals and aligning priorities Indecision will not be part of our culture Fewer priorities, drive to success

6 Improve customer satisfaction and loyalty Improve product and service quality Strengthen supply chain responsiveness Enhance communications and teamwork Rebuild margins and profitability GETTING DOWN TO BUSINESS PRIORITIES

7 Embedding customer focus throughout the organization Aligned Global Product Development and Service operations Added resources to the U.S. regional bank market: MOVING FORWARD CUSTOMER SATISFACTION/LOYALTY Experts in integrated services, deposit automation, security and branch transformation Pictured: Chuck Ducey - vice president, global development and services

8 Combined procurement, manufacturing engineering and production operations Increasing product testing methods Addressing logistical gaps in supply chain Optimizing manufacturing footprint Shortening order-to-cash process MOVING FORWARD QUALITY AND SUPPLY CHAIN Pictured: George Mayes, Jr. - vice president, global supply chain management

9 MOVING FORWARD COMMUNICATIONS & TEAMWORK Making Diebold a better organization: Closer to its customers More efficient and productive Developing leadership across the company Building off the strengths of employees worldwide: Leveraging talent and passion Sharing knowledge and information Pictured: Sheila Rutt - vice president and chief human resources officer

10 MOVING FORWARD REBUILD PROFITABILITY Created price management function: Sell the value of our products and services Added sales discount controls Aligned sales compensation with both revenue and margin targets Streamlining critical processes: Reduce inefficiencies and eliminate waste Pictured: Kevin Krakora - vice president and chief financial officer

11 MOVING FORWARD OPERATING MARGIN TARGETS SECURITY SOLUTIONS 2005: 6.2% 3-year goal: 9% - 10% 2005 revenue: $661 million ELECTION SYSTEMS/OTHER 2005: 5.5% 3-year goal: 9% - 10% 2005 revenue: $154 million FINANCIAL SELF-SERVICE 2005: 9.7% 3-year goal: 12% % 2005 revenue: $1.8 billion TOTAL COMPANY 2005: 8.6% 3-year goal: 11% - 12% 2005 revenue: $2.6 billion Excluding restructuring charges

12 PRODUCTS & SERVICES Barriers Alarms/CCTV Monitoring Access control Integrated systems Fire detection IT services MARKET FOCUS Financial Commercial Government Retail SECURITY SOLUTIONS

13 SECURITY SOLUTIONS EXPANDING IN NON-FINANCIAL MARKETS Advance Auto Parts CVS Eckerd Exxon Mobil HP Kroger Nissan Rite Aid Starbucks

14 SECURITY SOLUTIONS BUSINESS STRATEGIES Globalize security business through organic growth and acquisitions Penetrate new markets with emphasis on commercial, government and retail Review manufacturing strategies and outsource where appropriate Acquisitions increase capabilities and expand solutions: Diebold Enterprise Security Systems (AntarCom/TASC) Diebold Information & Security Systems (TFE) Diebold Fire & Security (NCI) Monitoring (Alarmas Adler)

15 SECURITY SOLUTIONS CURRENT PRESENCE Assessing Global Market Potential Strategic acquisitions will allow us to capitalize on our strong presence in financial self-service outside of the United States and further penetrate promising new markets in the government, retail and commercial sectors.

16 FINANCIAL SELF-SERVICE OPTEVA Orders from 3,000 customers in 80 countries Lowers customers operating costs up to 15% to 20% Differentiated by feature/ functionality, lower cost of ownership and our superior service capabilities

17 Building a stronger software development function: FINANCIAL SELF-SERVICE AGILIS Opened center in India in 2005 Improving tools and processes Enhancing selling capabilities Efforts will improve Agilis: Open, multi-vendor terminal software Launched a more robust Agilis 2.0 version in fall 2005

18 Reduces cost of deposit processing Takes envelope out of deposit process Transmits check images immediately to speed processing Bulk Note Accepter takes cash deposits up to 100 notes Growth driver in 2007 and 2008 FINANCIAL SELF-SERVICE DEPOSIT AUTOMATION

19 FINANCIAL SELF-SERVICE CAPITALIZING ON EMERGING MARKETS China Bank of China plans to transfer about 40% of its traditional teller transactions to its self-service delivery channel by For the first time, the bank selected Diebold to provide: More than 600 Opteva ATMs Nearly 300 bulk cash recycling machines Agilis software and related services

20 FINANCIAL SELF-SERVICE CAPITALIZING ON EMERGING MARKETS Russia Bank Petrocommerce, since Nov. 1, 2005, has issued 385,000 cards and installed 400 ATMs across Russia. The bank s goal is to expand its offering and provide its customers with advanced functionalities such as bulk note acceptance. The bank selected Diebold to provide: 250 Opteva ATMs 50 of the terminals include bulk note acceptance Order complements the bank s purchase of more than 200 Opteva terminals during the last 18 months Agilis software

21 ELECTION SYSTEMS Exceeded 2005 revenue and profitability goals Establishing recurring revenue streams through service, printing, charge-per-use products and services Created AccuView Printer Module for touch-screens Added new products and services to automate the elections process ExpressPoll VoteRemote

22 FIRST QUARTER 2006 RESULTS AND HIGHLIGHTS RESULTS GAAP earnings of $.18 per share, or $.22 per share excluding restructuring charges Revenue of $623.7 million, up 16.5% from the first quarter 2005 Financial Self-service up 3.9% Security up 21.5% Net income of $12.7 million, compared to $27.9 million in the first quarter 2005 HIGHLIGHTS Manufacturing optimization plan initiated: Plans to establish a new manufacturing operation and the likely location is Budapest, Hungary Planned closure of Cassis, France, production facility Multi-year profit improvement program underway Total orders up in the low double-digit range As reported in the April 25, 2006, earnings release

23 PRIVATE PLACEMENT FUNDING DETAILS March 2, 2006, completed private placement of $300 million Comprised of senior notes with 7, 10 and 12-year maturities Attractive financing at effective weightedaverage interest rate of 5.36% USES First quarter approx. $160 million used to repay debt outstanding under revolving credit facility Intends the remaining balance of $140 million to further repay debt outstanding under its revolving credit facility

24 USE OF CASH DIVIDEND STRATEGY 2006 will mark the 53rd consecutive year Diebold has increased its cash dividend $0.90 $0.85 $0.80 $0.82 $0.86 $0.75 $0.74 $0.70 $0.65 $0.60 $0.62 $0.64 $0.66 $0.68 $ Dividend payout generally targeted to be 30-35% of a five-year rolling average of EPS (excluding restructuring charges)

25 USE OF CASH SHARE REPURCHASES & ACQUISITIONS SHARE REPURCHASES Repurchased approx. 1.3 million shares in the first quarter 3.1 million shares remaining under existing repurchase plan ACQUISITION PRIORITIES Security industry: Globalization of the business Continued focus on U.S. government market Self-service industry: selectively expand into adjacent markets Fill out geography Multi-vendor service companies and distributors Capitalize on outsourcing trends through services Self-service software/checkimaging Deposit automation/recycling technologies

26 GETTING DOWN TO BUSINESS 2006 A YEAR OF TRANSITION Addressing challenges that affected performance: Multi-year profit improvement plan to eliminate $100 million from cost structure Significantly improving order-to-cash process Optimizing supply chain and manufacturing footprint Making organizational changes and increasing near-term investment in: Manufacturing infrastructure ERP system implementation Additional resources in procurement, development and other areas

27 SUMMARY New management team is committed to improve performance by focusing on the customer, quality, responsiveness and profitability The company is sound: Strong balance sheet to support growth opportunities, share repurchases and dividends Global company with a diverse geographic revenue stream Significant recurring service revenue stream Strong free cash flow Industry leader We have the strategies in place to define the future of Diebold

28 ANNUAL MEETING OF SHAREHOLDERS THANK YOU! QUESTIONS APRIL 27, 2006 NYSE: DBD