Temenos Ag · SIX:TEMN
Temenos — Investor Day (February 2022)
38 slides from Temenos's investor day presentation, Feb 15, 2022
Slide 1: Capital Markets Day 2022
TEMENOS Capital Markets Day 2022
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: Non-IFRS Information
Non-IFRS Information Readers are cautioned that the supplemental non-IFRS information presented in this presentation is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for IFRS measurements. Also
Slide 4: Strategy and Vision
Strategy and Vision Max Chuard CEO
Slide 5: Business overview
| Business overview Dy »:
Slide 6: Temenos: Everyone's banking platform
Temenos: Everyone’s banking platform 1.2 billion Banks that use Our 3000 banks individuals, Temenos are include 41 of the top families, businesses industry leaders 50 global banks, 70+ rely on Temenos challengers That’s 30% of the Achieving They rely on the world’s banking return on equity World’s #
Slide 7: Relentless Focus on Innovation
Relentless Focus on Innovation Sustained $ 2.5B high level of R&D $ 1.0B Investment cumulative R&D R&D investment investment 1990-2021 2022-25 We invest 20% of revenues in R&D…highest in the industry 2011 2020 2022 Temenos Cloud Cloud Native Temenos Banking Cloud Next… (Virtual machines, Core (Conta
Slide 8: Market opportunity
| Market opportunity
Slide 9: Disruptive technologies key to the future of banking
Disruptive technologies key to the future of banking… 2022 - 2025 AI/Machine Blockchain/ Cloud/SaaS API/Microservices DevOps Big Data Learning Distributed DB Banking 2025 - 2030 Quantum Augmented/ Internet 5G Biometrics Wearables Computing Virtual Reality of Things 9
Slide 10: Unbundling of the banking value chain
…leading to unbundling of the banking value chain, which has fundamentally changed our market Distribution Manufacturing Product Sales & Marketing Servicing Operations Management Banks – Tier 1,2,3+ Credit unions & Specialty Finance Micro finance Bank owned Incumbents community banks Challenger bank
Slide 11: Sizeable and fast-growing addressable market
Sizeable and fast-growing addressable market USD 64bn USD 26bn USD 26bn USD 26bn USD 18bn 18% USD 18bn USD 18bn 70% 9% 82% 84% 91% 30% 16% Total Addressable Market Third party software Third party software Third party software Third party software Third party software Third party software spend spen
Slide 12: Penetrating the non-incumbent market
From our market leading position at traditional banks, we have successfully penetrated the non-incumbent market Traditional banks Non-incumbents (Digital transformation from legacy to modern) (Rapid scaling of greenfield business) Global multi-country client Single country client Flowe 12
Slide 13: Varo: Growth and path to profitability on The Temenos Banking Cloud
Varo: Growth and path to profitability on The Temenos Banking Cloud First and only consumer fintech with a national bank charter in the US Background Customer-centric strategy to deliver a real-time, omni-channel customer experience & Context + Why Continued R&D investment to support current
Slide 14: Openbank: Successful greenfield implementation of a scalable platform
Openbank: Successful greenfield implementation of a scalable platform for international expansion Largest full-service digital bank in Europe, with 1.6 million customers Background Considered the flagship digital offering of the Santander Group & Context Multi-country project By Open, API dr
Slide 15: Santander Digital Consumer Bank
Our Digital Consumer Bank: building on a strong foundation 0 te Openbank Santander Auto Global consumer financing Largest full-service Auto loan and leasing business business serving offline global digital bank serving OEMs and dealers and e-commerce merchants in the world Openbank?= > 55k Merchant
Slide 16: Client credentials
Client credentials Dan Henry President and CEO
Slide 17: Continued market leadership
Continued market leadership Best-In-Class for Aite Matrix: Leader in Omdia Universe Leader in Forrester Waves for #1 Digital banking and Digital Banking US Digital Banking Solutions of Core Providers Matrix for Digital Banking Platforms 2020-21 Digital Banking Engagement Platforms & Digital Banking
Slide 18: Our composable banking platform
Our composable banking platform
Slide 19: Open composable banking platform for continuous innovation
Open composable banking platform for continuous innovation EXPLORE DEVELOP DEPLOY & TEST COLLABORATE & SELL API Catalogue Base Camp Sandbox Environment Temenos Exchange Temenos Open Platform for Composable Banking TEMENOS COMPOSED BANKING SERVICES TEMENOS ENTERPRISE SERVICES precomposed services bas
Slide 20: Key differentiators of the platform
Key differentiators of the platform Pre-built Banking Broadest set of Localization through Services banking capabilities Country Model Banks in the market Scales with Continually Updated Extensible with Banking business growth solutions Capabilities from Temenos and Exchange 20
Slide 21: Single code and configuration base drives higher margin
Single code and configuration base drives higher margin, competitive edge and profitable growth Retail SME Corp. Wealth Segment agnostic Higher margin Total Assets Traditional Non- incumbent Tier 1 Tier 2 Tier 3+ Type agnostic Single code and Size agnostic Competitive advantage configuration base Te
Slide 22: Why we outsell the competition
Why we outsell the competition Traditional vendors Neo vendors Cross-industry, not packaged nor New digital entrants, cloud-native cloud native nor SaaS ready offering, but limited functional scope Why we win Why we win 100% Banking focused Depth and breadth of functionality Market leadership, inclu
Slide 23: Vendor of choice for core and digital banking globally
Vendor of choice for core and digital banking globally IBS Sales League Table 2021: Global new named deals 20201 0.0 x Temenos deals multiple vs competitor Core Banking Digital Banking & Channels 50 120 40 100 80 30 2.3x 2.7x 3.0x 3.7x 5.3x 8.0x 3.9x 4.1x 5.0x 15.1x 17.7x 21.2x 60 20 40 10 20 0 0 Ca
Slide 24: Subscription pricing model
| Subscription pricing model OS kets Day
Slide 25: Move to subscription captures greater value and accelerates growth
Move to subscription captures greater value and accelerates our growth Significant acceleration in Annual Recurring Revenue ARR forecast to grow 20-25% CAGR 2021-2025 Clients across all tiers and business models are ARR % of Total Revenue increasingly asking for subscription contracts c.USD1.3bn rat
Slide 26: Value creation will drive acceleration in Software licensing and EBIT
Value creation will drive acceleration in Total Software licensing and EBIT >19% >15% Total Software Licensing 22-25 CAGR Non IFRS EBIT 22-25 CAGR 10%* 17%* 10% 17% 357 323 414 356 2020 2021 2022E 2025E 2020 2021 2022E 2025E Note: Numbers are non-IFRS. 2020 and 2021 at constant currency * Mid-point
Slide 27: Tangible benefits to clients and Temenos
Tangible benefits to clients and Temenos Benefits to client Benefits to Temenos Enhanced value proposition for customers Greater upsell opportunity significantly expanding flexibility Better customer retention Lower upfront cost, reflecting a shift to OPEX Significantly expanding long-term value fro
Slide 28: Key strategic initiatives
| Key strategic initiatives arkets ay
Slide 29: Key strategic initiatives
Key strategic initiatives North America Partner centric focus approach Increasing Continued SaaS penetration in acceleration Larger banks 29
Slide 30: Continued focus on profitable SaaS growth with margin expansion
Continued SaaS acceleration Continued focus on profitable SaaS growth with margin expansion Sustained SaaS revenue growth Key levers for profitable growth SaaS Revenue (USD M) Composable Banking 30%+ CAGR Higher incremental revenue Self service portal 2021-2025 Lower time to value Click &
Slide 31: Building momentum in North America
North America focus Building momentum in North America Significant increase in North America’s contribution to our Software licensing Accelerating our North America growth Total software licensing: North America vs. Rest of Maintain advantage in non-incumbents World1 Significant growth in pipeline
Slide 32: Commerce Bank: Successful digital transformation in the US market
North America focus Commerce Bank: Successful Digital transformation in the US market from legacy to Temenos Core Banking Super community bank in the United States, 47th largest with $25 billion in assets Background Core modernization project now live, moved its legacy platform for deposits to a
Slide 33: Enhancing capabilities to serve Larger banks
Increasing penetration in Larger banks Enhancing capabilities to serve Larger banks Strong track record among Large banks Increasing penetration within larger banks > 35% of Tier 1-2 banks, Targeted incremental transformations including 41 of the top 50 Standardized global expansion (reuse, loca
Slide 34: Open platform powers network effects
Partner centric approach Open platform powers network effects Sales Partner led delivery model Partners Extensibility framework & Open APIs to help partners configure, customize and extend Temenos platform Delivery Partners Temenos SCALE program Collaboration and co- innovation with fintechs, develo
Slide 35: ESG integral to our goal of achieving our vision
ESG integral to our goal of achieving our vision and delivering business value Consistent overperformance in leading global benchmarks (Top 1% of industry) Top 1% ESG Mission: Leadership Top 10% Included in Swiss Top performer AA rating Sustainability 25 index in industry (top 20%) Help our client
Slide 36: Tenacity Velocity Responsibility Authenticity Community
TENACITY VELOCITY RESPONSIBILITY AUTHENTICITY COMMUNITY 36
Slide 37: Accelerating growth trajectory
Accelerating growth trajectory To grow ARR at a To grow Expanding Total Software EBIT margin CAGR of 20-25% Licensing from 2021-25, to c.41% revenue at a by 2025 To reach c.USD1.3bn CAGR of by 2025 (85%+ of total revenues) 15-20% from 2021-25 37 Note: Revenue, cost and profit numbers are non-IFRS
Slide 38: Thank You
Thank You