Temenos Ag · SIX:TEMN
Temenos — Q3 2009 Earnings Presentation
27 slides from Temenos's earnings presentation, Oct 21, 2009
Slide 1: Financial Results & Business Update
Financial Results & Business Update Quarter ended 30 September 2009 21 October 2009
Slide 2: Disclaimer
Disclaimer Any remarks that we may make about future expectations, plans and prospects for the company constitute forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of various factors. In particular, the forward-looki
Slide 3: Agenda
Agenda Introduction Ben Robinson Associate Director IR & Business Strategy Strategy and Business update Andreas Andreades CEO Financial update David Arnott CFO Outlook and Summary Andreas Andreades CEO Q&A Andreas Andreades CEO David Arnott CFO Max Chuard Director Slide 3
Slide 4: Agenda
Agenda Introduction Ben Robinson Associate Director IR & Business Strategy Strategy and Business update Andreas Andreades CEO Financial update David Arnott CFO Outlook and Summary Andreas Andreades CEO Q&A Andreas Andreades CEO David Arnott CFO Max Chuard Director Slide 4
Slide 5: Business update
Business update Executing on strategy for growth with better profitability and cash generation Resilient licence performance • Against a strong comparative, like-for-like licences* were up 6% • Year to date, like-for-like licences* are up 3% Continued good cost control • Costs fall sequentially for
Slide 6: Business update
Business update Executing on strategy for growth with better profitability and cash generation New operating model firmly established and sustainable • Partners carrying out greater proportion of implementations • Convergence of T24 and TCB and more efficient use of development factories • 70/30 imp
Slide 7: Update on sales: T24 sales, ARC and Insight
Update on sales T24 sales • 9 new customers in Q309 compared to 9 in PY • Higher licences based on signing bigger deals than in PY • Strong growth in retail licences • 2 new entry-level tier 1 deals (taking number of tier 1 deals to 6 in YTD) providing significant downstream potential • Growth in al
Slide 8: Services Update
Services Update Another 4 clients went live in Q309 • 4 clients went live in Q309 (vs. 6 in Q308)... • ...taking number of go-lives to 39 in YTD vs. 24 in YTD 08 ... as services initiatives help us to scale more efficiently • TAM, TIM, Management Consulting, Model Bank have all helped the services b
Slide 9: Update on other initiatives
Update on other initiatives Partners • Relationship with Cognizant progresses well → Training underway → Jointly going to market on a number of deals • Actively speaking to other technology and services partners • Expect to sign second strategic services partnership during Q4 • Already, we are deliv
Slide 10: Agenda
Agenda Introduction Ben Robinson Associate Director IR & Business Strategy Strategy and Business update Andreas Andreades CEO Financial update David Arnott CFO Outlook and summary Andreas Andreades CEO Q&A Andreas Andreades CEO David Arnott CFO Max Chuard Director Slide 10
Slide 11: Income statement highlights – Q3 2009
Income statement highlights – Q3 2009 Q3 2009 Q3 2008 y-o-y (USDm) (USDm) Licence revenues 26.8 35.3 (24%) Total revenues 88.6 100.4 (12%) EBIT 20.3 11.2 81% Adjusted EPS* 0.34 0.13 162% * in USD; see appendix for reconciliation Slide 11
Slide 12: Like-for-like revenues
Like-for-like revenues ► Adjusting for FX, acquisitions and Metavante 120 USDm Metavante 100 FX Acquisitions 80 Services Services (20%) 60 +10% (12%) 40 Maintenance Maintenance 20 +6% License License 0 Q3 2008 Q3 2009 Slide 12
Slide 13: Financial statement highlights
Financial statement highlights in USDm Q3 09 Q3 08 LTM 09 LTM 08 Licences 26.8 35.3 (24%) 131.9 168.5 (22%) Maintenance 29.2 25.4 +15% 113.9 94.6 +20% Services 32.5 39.7 (18%) 128.1 147.0 (13%) Total revenue 88.6 100.4 (12%) 373.9 410.0 (9%) Total operating costs (68.2) (89.2) (24%) (298.2) (338.5)
Slide 14: Income statement
Income statement Q3 2009 Q3 2008 y-o-y LTM 09 LTM 08 y-o-y (USDm) (USDm) (USDm) (USDm) EBIT 20.3 11.2 81% 75.7 71.5 6% Net finance charge (2.1) (2.3) (9%) (7.6) (4.6) 65% FX (loss)/gain (0.6) (3.6) (83%) 4.6 (2.2) n/a Tax (0.1) (0.2) (50%) 1.7 0.3 570% Net earnings 17.5 5.0 250% 74.4 64.9 15% Adjust
Slide 15: Update on cash
Update on cash Ongoing strong cash generation in the quarter • EBITDA into operating cash conversion of 113% in Q3 • LTM conversion at 99% • LTM operating cash of USD104m is very close to full year outlook level EBITDA into operating cash conversion 120 +99% +68% 100 USDm 80 60 EBITDA (USD m.) +113%
Slide 16: Balance sheet – Debt and financing
Balance sheet – Debt and financing Q3 2009 Comments (USDm) EXISTING DEBT 133.6 1.5% coupon, matures 2013 (converts at Convertible bond CHF18.6) Credit facilities 61.5 Consortium of 7 banks, repayment up to end of 2012 Other 1.4 Obligations under finance leases TOTAL DEBT 196.5 AVAILABLE FUNDING Cash
Slide 17: Agenda
Agenda Introduction Ben Robinson Associate Director IR & Business Strategy Strategy and Business update Andreas Andreades CEO Financial update David Arnott CFO Outlook and Summary Andreas Andreades CEO Q&A Andreas Andreades CEO David Arnott CFO Max Chuard Director Slide 17
Slide 18: Summary
Summary Executing on strategy for growth with better profitability and cash generation Licence sales resilient → In YTD, +3%; further market share gains Strong margin progression → LTM EBIT margin 20.2%; EBITDA 28.2% Excellent cash generation → EBITDA into operating cash +113% New operating model fi
Slide 19: 2009 Outlook
2009 Outlook ► With one quarter to go, we are able to give an absolute profit outlook ► ....resulting in a higher margin ► Outlook for maintenance and operating cash remain unchanged ► But we lower our costs and services revenue by USD10m • 2009 full year cost base of USD300m (Variable costs in Q4 a
Slide 20: Closing comments
Closing comments • Operating profit growth trend firmly restored • Revenue growth soon to be restored • We are investing again for growth LTM LTM revenues revenues andand operating operating profitprofit since since Q2(USDm) Q2 2005 2005 450 90 400 80 350 70 300 60 250 50 200 40 150 30 100 20 50 10
Slide 21: Agenda
Agenda Introduction Ben Robinson Associate Director IR & Business Strategy Strategy and Business update Andreas Andreades CEO Financial update David Arnott CFO Outlook and Summary Andreas Andreades CEO Q&A Andreas Andreades CEO David Arnott CFO Max Chuard Director Slide 21
Slide 22: Appendices
Appendices a =mMOnae 9 -MENOS The Banking Software Company
Slide 23: Adjusted EPS reconciliation
Adjusted EPS reconciliation Q3 2009 (USDm) Earnings 17.5 Amortisation of acquired intangible assets 1.9 Total cash Bond interest 1.4 Restructuring* 3.0 Total adjusted earnings 23.8 Number of diluted shares 69.6 Adjusted EPS 0.34 *Costs of exiting the joint agreement with Metavante – severance, legal
Slide 24: DSOs trend
DSOs trend DSOs – last 9 quarters 184 176 172 171 171 168 168 Days 167 165 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Sustained improvement driven by Shorter implementation times down from average of 18 months in 06 to 9-12 months Improving payment terms: In Q3 09, aggre
Slide 25: Overview of new T24 customer sales
Overview of new T24 customer sales LTM 2009 LTM 2008 New clients (number) Americas 5% Americas MEA MEA 14% 35% APAC 31% 25% APAC 16% Europe Europe 35% 39% New clients (licence value) LTM 2009 LTM 2008 MEA, MEA Americas 22% Americas 17% 26% 20% APAC APAC, 21% 15% Europe Europe 41% 39% Slide 25
Slide 26: Cost reduction – Yielding results
Cost reduction – Yielding results Operating costs have declined sequentially for the 100.0 last 4 quarters 89.2 90.0 86.1 80.0 72.5 71.5 68.2 70.0 USDm 60.0 50.0 40.0 30.0 20.0 10.0 - Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q3 2009 cost base consistent with full year outlook of USD300m Slide 26
Slide 27: Thank You
Thank You ‘7 sm: FM fe) FA ed Bl F EMENOS The Banking Software Company