Diebold 2002 Annual Report
Who Are You Investing In? Chairman's Letter What Are We Investing In? Financials Index

FELLOW DIEBOLD SHAREHOLDERS: As the cover of our annual report states, Diebold has been conducting business now for more than 145 years. I have been fortunate to lead this company as chairman and chief executive officer for more than five years.

During that time we have faced significant challenges, including market volatility and economic weakness. Additionally, our company has experienced increased competition and continuing transformation within our markets.

We’ve also faced unprecedented opportunities: expanding our portfolio of products and services for our core self-service and security markets, tapping into new sources of demand in faster growing, developing countries and leveraging our skills and expertise to enter new markets that offer high-growth potential.

Through it all, our management team has been guided by a consistent vision and strategy. The key elements of this vision include attaining global market leadership in financial self-service; developing a comprehensive strategy to harness the power of technology and drive our business forward; enhancing our service capabilities; and becoming a faster, more responsive and efficient company with which it is easy to do business.

STILL FOCUSED. Today we’re still focused on these initiatives and, as we measure our progress, two things become clear. First, we’ve come a long way in a relatively short period of time. And second, we still enjoy significant potential to grow our company, improve how we do business and enhance our profitability.


Let’s start by looking at how we have changed over the past five years since 1999:


Revenue increased 89%, from $1.26 billion in 1999 to $2.38 billion in 2004.

More of this revenue now comes from recurring services – about 50% in 2004 compared with about 40% in 1999. More revenue also came from international markets, which contributed $903 million in 2004.

At the same time, we’ve also more than doubled our security business since 1999, generating $594 million in product and service revenue in 2004.

Earnings per share rose from $1.85 in 1999 to $2.54 in 2004, a 37% increase.

Our dividend payout rose to $0.74 per share in 2004, a 23% increase from 1999 and our 51st consecutive annual dividend increase.

Our total return to shareholders since 1999 was 159% vs. -3% for the S&P 500.


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