Temenos Ag · SIX:TEMN
Temenos — Q1 2013 Earnings Presentation
32 slides from Temenos's earnings presentation, Apr 23, 2013
Slide 1: Financial results & business update
Financial results & business update Quarter ended 31 March 2013 23 April 2013
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 Business update David Arnott, CEO Financial update Max Chuard, CFO Summary David Arnott, CEO Q&A 3
Slide 4: Summary
Summary Solid Q1 performance across all metrics Multi-product strategy gaining momentum Sustainably lower cost base underpinning margin expansion Strong cash conversion Acquisition of TriNovus to accelerate US growth and enter US SaaS market Refinancing and bond issue completed to lock-in flexible,
Slide 5: Q1 financial overview
Q1 financial overview LFL licence revenues up 5% - the second consecutive quarter of growth Maintenance revenues remain resilient with LFL growth of 4% Services revenues stable and margin improving as revenue mix shifts Non-IFRS EBIT more than doubled with margin up 7 percentage points LTM cash conv
Slide 6: Q1 sales and operational overview
Q1 sales and operational overview Multi-product approach is working • Strong and high quality pipeline across all products • Gradual improvement in core banking • Europe resilient with growth in the quarter, all other markets gaining traction • Strong sales into the installed base • Almost half of l
Slide 7: Competitive landscape
Competitive landscape • Sole vendor at the top of both pyramids • 8th consecutive year as “Global Power Seller” New-named clients All counted deals • 1st position – 14th year in top 2 places • 34 deals – twice nearest competitor Taking market share in a consolidating marketplace Source: Forrester “G
Slide 8: Update on US
Update on US TriNovus signed 57 new clients in Q1 including State Bank & Trust, Intercontinental Bank and Sunwest Bank Integration on track • SaaS versions of Insight and AML going to market in Q2 • Early adopters for US SaaS version of T24 identified Launching Social Comply to non-US customers at T
Slide 9: Agenda
Agenda Business update David Arnott, CEO Financial update Max Chuard, CFO 2013 guidance David Arnott, CEO Q&A 9
Slide 10: Non-IFRS income statement - operating
Non-IFRS income statement - operating In USDm Q1 13 Q1 12 Y-o-Y LTM 13 LTM 12 Y-o-Y Licences 24.5 23.5 4.3% 126.2 141.4 (10.8)% Maintenance 51.0 48.5 5.1% 204.1 197.0 3.6% Services 28.1 28.4 (0.8)% 123.2 132.2 (6.8)% Total revenue 103.6 100.3 3.3% 453.5 470.7 (3.7)% Operating costs 90.2 94.1 (4.2)%
Slide 11: Like-for-like revenue and costs
Like-for-like revenue and costs Q1 like-for-like revenue up 2% Q1 like-for-like non-IFRS costs down 5% Maintenance Licence Services USDm USDm 120 120 (2)% 90 90 (5)% 60 +5% 60 30 30 +4% 0 0 Q1 2012 Q1 2013 Q1 2012 Q1 2013 LFL revenue up 2% with costs down 5% 11
Slide 12: Non-IFRS income statement – non-operating
Non-IFRS income statement – non-operating In USDm, except EPS Q1 13 Q1 12 Y-o-Y LTM 13 LTM 12 Y-o-Y EBIT 13.5 6.3 114.7% 92.7 89.0 4.2% Net finance charge (1.6) (2.0) 23.7% (7.3) (8.9) 17.9% FX loss (0.6) (1.9) 67.6% (2.2) (7.7) 71.3% Tax (2.5) (2.1) (8.9%) (13.0) (14.2) 9.8% Net profit 8.7 0.2 NA 7
Slide 13: Cash conversion
Cash conversion USDm 111% 120 82% 216% 90 60 30 0 LTM Q1 2011 LTM Q1 2012 LTM Q1 2013 EBITDA Operating cashflow Strong cash conversion – on track to deliver full year commitments 13
Slide 14: Balance sheet – debt and financing
Balance sheet – debt and financing In USDm 31 March 13 Comment Credit facilities 210.1 USD 350m facility and CHF 100m bond, due in 2017 Others 0.6 Total debt 210.7 Cash (92.8) Held in short term deposits Net debt 117.9 1.1x LTM EBITDA Treasury shares (58.2) Reflects market value as of 31 March 2013
Slide 15: Bond issue and refinancing
Bond issue and refinancing Bank debt refinancing and bond issue in March 2013 to take advantage of favourable market conditions and lock in low cost, long term financing CHF 100m senior unsecured bond – 2.75% coupon, matures July 2017 First ever public debt issuance Oversubscribed - evidencing capit
Slide 16: 2013 guidance (post TriNovus acquisition)
2013 guidance (post TriNovus acquisition) Non-IFRS revenue growth of 4.5% to 7.5% (implying revenue of USD 469m to USD 482m)* Licence growth of 5% to 10% (implying licence revenue of USD 131m to USD 137m)* Non-IFRS cost base of USD 368m reaffirmed with non-IFRS EBIT margin of 21.7% to 23.2% (implyin
Slide 17: Agenda
Agenda Business update David Arnott, CEO Financial update Max Chuard, CFO Summary David Arnott, CEO Q&A 17
Slide 18: TCF 2013 - Abu Dhabi
TCF 2013 - Abu Dhabi 14- 16 May 2013 • Great venue • Lots of new product launches • Separate Investor track • Eminent industry speakers • Meet senior management • Hear directly from our customers Biggest and best attended to date 18
Slide 19: Summary
Summary Solid Q1 performance across all metrics Multi-product strategy gaining momentum Sustainably lower cost base underpinning margin expansion Strong cash conversion Acquisition of TriNovus to accelerate US growth and enter US SaaS market Refinancing and bond issue completed to lock-in flexible,
Slide 20: Appendices
‘e TEMENOS Appendices
Slide 21: New look non-IFRS income statement from Q2 2013
New look non-IFRS income statement from Q2 2013 In USDm Comments for FY 2013 Licence revenues Expected growth of 5% to 10% SaaS revenues Expected to be c.USD 5.5m Total software licensing Maintenance Services Total revenue Expected growth of 4.5% to 7.5% Operating costs Expected to be USD 368m EBIT
Slide 22: FX assumptions underlying 2013 guidance
FX assumptions underlying 2013 guidance In preparing the 2013 guidance, the Company has taken the actual Q1 2013 results and for the remainder of 2013 assumed the following (with comparisons at announcement of Q4 and FY 2012 results): • USD to Euro exchange rate of 0.780 (from 0.778); • USD to GBP e
Slide 23: Net earnings reconciliation
Net earnings reconciliation In USDm, except EPS Q1 13 Q1 12 IFRS net earnings 3.7 (11.4) Acquisition related charges 0.3 5.0 Amortisation of acquired intangibles 2.6 3.4 Restructuring 2.3 3.2 Taxation (0.2) - Net earnings for non-IFRS EPS 8.7 0.2 No. of dilutive shares 70.0 69.6 Non-IFRS EPS (USD) 0
Slide 24: Licence revenue breakdown by geography
Licence revenue breakdown by geography Q1 2012 Q1 2013 APAC APAC 14% 16% Europe 21% Europe 26% Americas Americas MEA MEA 30% 13% 40% 40% LTM Q1 2012 LTM Q1 2013 APAC APAC 22% Europe 22% Europe 29% 26% Americas Americas MEA MEA 11% 12% 38% 40% 24
Slide 25: Licence revenue breakdown by customer tier
Licence revenue breakdown by customer tier Q1 2012 Q1 2013 1 and 2 1 and 2 33% 3, 4 and 5 43% 3, 4 and 5 57% 67% LTM Q1 2012 LTM Q1 2013 1 and 2 1 and 2 28% 37% 3, 4 and 5 3, 4 and 5 63% 72% 25
Slide 26: Licence revenue breakdown by new / existing customer
Licence revenue breakdown by new / existing customer Q1 2012 Q1 2013 New New 33% 47% Existing Existing 53% 67% LTM Q1 2012 LTM Q1 2013 New New 37% 46% Existing Existing 54% 63% 26
Slide 27: DSOs
DSOs 240 235 230 220 217 216 210 200 LTM Q1 2011 LTM Q1 2012 LTM Q1 2013 Continuous reduction in DSOs in line with strategy 27
Slide 28: ADR
ADR Details of ADR Type of ADR program Sponsored Level I ADR Program Ratio 1 ADR = 1 ordinary share US CUSIP 87974R208 Stock Symbol TMSNY Depositary bank BNY Mellon Swiss custodian bank UBS For further information about our program or ADRs in general • please call BNY Mellon on +1 212 815 2293 or •
Slide 29: Definition of Non-IFRS adjustments
Definition of Non-IFRS adjustments Deferred revenue write-down Adjustments made resulting from acquisitions Discontinued activities Discontinued operations at Temenos that do not qualify as such under IFRS Acquisition related charges Relates mainly to advisory fees and integration costs Amortisation
Slide 30: Reconciliation from IFRS to non-IFRS
Reconciliation from IFRS to non-IFRS IFRS revenue measure + Deferred revenue write-down = Non-IFRS revenue measure IFRS profit measure +/- Discontinued activities +/- Acquisition related charges +/- Amortisation of acquired intangibles +/- Restructuring +/- Taxation = Non-IFRS profit measure 30
Slide 31: Reconciliation from IFRS EBIT to non-IFRS EBIT
Reconciliation from IFRS EBIT to non-IFRS EBIT USDm Q1 2013 IFRS EBIT 8.2 Deferred revenue write-down - Discontinued activities - Acquisition-related charges 0.3 Amortisation of acquired intangibles 2.6 Restructuring 2.3 Non-IFRS EBIT 13.5 31
Slide 32: Thank you
Thank you www.temenos.com