Diebold announces realignment plan to reduce cost structure by $100M-$150M

theflyonthewall.com

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% 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 $10M 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 $15M-$30M related to the plan. The actions the company has taken to date are expected to account for approximately $60M of the overall savings plan.

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