This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Diebold Announces Multi-Year Realignment Plan





NORTH CANTON, Ohio, April 30, 2013 /PRNewswire/ -- To help stabilize its financial position and better enable an ability to invest in key growth initiatives, Diebold, Incorporated (NYSE: DBD) today announced a multi-year global realignment plan entailing near-term and long-term actions aimed at reducing its cost structure by $100 million to $150 million.

(Logo: http://photos.prnewswire.com/prnh/20080725/DIEBOLDLOGO )

The company expects to reinvest a portion of the savings in research, development and the systems and infrastructure necessary to drive long-term growth and execute on electronic security and financial self-service strategies.  In addition, some of the savings should offset price erosion, wage inflation in emerging markets and volatile commodity prices in the company's core business.  Given these factors, the company anticipates that approximately 50 percent of the savings will positively impact operating profit. 

The substantial portion of the actions necessary to achieve the targeted savings should be completed by the end of 2014, and the total savings are expected to be fully realized by the end of 2015.  The company has incurred first quarter 2013 restructuring charges of approximately $10 million resulting from this realignment plan.  While the company is in the process of finalizing specific details regarding the initiatives within the realignment plan, it estimates additional future restructuring costs of $15 million to $30 million related to the plan.

Late in the fourth quarter 2012, Diebold began to take several actions to realign and streamline various aspects of its organization.  The actions the company has taken to date are expected to account for approximately $60 million of the overall savings plan.  This savings figure is included in the company's 2013 outlook.  The near-term actions include:

  • The reduction of approximately 700 full-time job positions, primarily in North America and corporate operations. The majority of these job reductions have already taken place;
  • Rationalization of manufacturing facilities by selling operations in Lynchburg, Va., and Lexington, N.C., to a long-time materials supplier;
  • Institution of stricter policies to control discretionary spend across numerous areas to include restricting non-essential travel, reducing the number of company vehicles, canceling non-critical consulting engagements, and reducing spend on all non-core marketing activities and other initiatives.

In addition, Diebold is moving toward a more centralized management structure in order to drive swift action and clear accountability across its global operations. As part of the new structure, four long-term transformation initiatives have been identified to deliver savings during the multi-year realignment program and ensure an improved long-term cost foundation. These include:

  • Globalizing the company's service organization and processes to align with the increasingly global and more complex nature of the business. This is expected to enhance efficiencies, improve customer response times and reduce the company's cost to provide service;
  • Creating a unified, center-led global organization for research and development. This is expected to eliminate duplication of effort, leverage solutions developed regionally across the globe, increase speed to market and ultimately drive down product costs;
  • Transforming the company's general and administrative cost structure by increasing utilization of our existing shared services centers in low-cost regions, instituting common processes and leveraging industry best practices across the enterprise; and
  • Focusing on commercial effectiveness. This includes re-evaluating pricing strategies, reducing fixed costs within the sales organization, improving time to market and better managing product-life cycle.

The necessary structural reduction of the company's costs is ultimately expected to improve cash flow and generate the investment capacity required to execute on its growth strategies. Additional investments from savings will also be made in R&D — to speed new solutions to market — as well as infrastructure improvements such as information technology systems, in order to accelerate transformation, improve capabilities and reduce costs.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,266.70 +109.85 0.64%
S&P 500 2,011.85 +10.28 0.51%
NASDAQ 4,590.7230 +28.5340 0.63%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs