Temenos Ag · SIX:TEMN
Temenos — Q4 2011 Earnings Presentation
26 slides from Temenos's earnings presentation, February 2012
Slide 1: The Banking Software Company
\é The Banking Software Company
Slide 2: Financial Results & Business Update
Financial Results & Business Update Quarter and year ended 31 December 2011
Slide 3: Disclaimer
Disclaimer NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO OR FROM THE UNITED STATES OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION This presentation is not intended to and does not constitute
Slide 4: Agenda
Agenda 1 Introduction | Ben Robinson | Strategy Director 2 Strategy and Business update | Guy Dubois | CEO 3 Financial update | David Arnott | CFO 4 Summary and Closing Remarks | Guy Dubois | CEO 5 Q&A 4
Slide 5: Agenda
Agenda 1 Introduction | Ben Robinson | Strategy Director 2 Strategy and Business update | Guy Dubois | CEO 3 Financial update | David Arnott | CFO 4 Summary and Closing Remarks | Guy Dubois | CEO 5 Q&A 5
Slide 6: 2011 Overview
2011 Overview 1 We faced difficult macroeconomic conditions all year… 2 …negatively impacting licensing and profits 3 We saw no material change in competitive environment 4 We grew licences to existing customers, in Middle East and Asia 5 We took action to reduce our cost base 6 We conducted a strat
Slide 7: 2011 Highlights
2011 Highlights 1 Strong growth in MEA, Asia and in existing customer sales 2 Significant new releases of flagship products 3 40 new customers wins 4 12% partner brought licences 5 Strong cashflow underpinned by growing maintenance base 6 Achievement of milestones in Odyssey & Primisyn acquisitions
Slide 8: Q4 Operating Highlights
Q4 Operating Highlights 1 9 new customers added in the quarter… 2 …including a significant retail deal in China 3 Strong growth in sales to existing customers (+42%) 4 7 institutions went live on our solutions 5 IBM added as services partner - key to success in T1/T2 retail 6 A record funnel of deal
Slide 9: Q4 Financial Highlights
Q4 Financial Highlights 1 Strong operating cash of USD125m in the quarter… 2 …underpinned by maintenance – now at c.USD200m annually 3 Net debt now below USD100m 4 Service business achieved profitability in the quarter 5 Restructuring plan effected in line with our Q3 announcement… 6 …reducing our f
Slide 10: Observations on Q4 Developments
Observations on Q4 Developments 1 Banking sector remained in a state of uncertainty 2 New customers delayed decisions… 3 …and we could only partly mitigate fall through sales to base 4 Pricing was better than a year ago 5 We noted no significant change in the competitive environment 6 Our funnel gre
Slide 11: Agenda
Agenda 1 Introduction | Ben Robinson | Strategy Director 2 Strategy and Business update | Guy Dubois | CEO 3 Financial update | David Arnott | CFO 4 Summary and Closing Remarks | Guy Dubois | CEO 5 Q&A 11
Slide 12: Income Statement Highlights
Income Statement Highlights in USDm Q4 11 Q4 10 y-o-y FY 2011 FY 2010 y-o-y Licences 41.1 60.9 (33%) 146.0 160.1 (9%) Maintenance 49.9 47.7 5% 197.3 154.8 28% Services 36.0 41.2 (13%) 130.1 133.1 (2%) Total Revenue 127.0 149.8 (15%) 473.5 448.0 6% Adj. operating costs (91.8) (96.0) (4%) (385.8)
Slide 13: FY 2011 Like-for-Like Revenue and Cost Performance
FY 2011 Like-for-Like Revenue and Cost Performance Like-for-like Revenue* (5%) and like-for-like costs** flat 0.4% (14%) 6% (9%) *FY 2010 adjusted for FX and acquisitions ** Includes pro-forma Odyssey costs, and excludes FX, restructuring and amortization of acquired intangibles Actions taken on cos
Slide 14: Cash Flow Conversion
Cash Flow Conversion EBITDA conversion into operating cash flow Reported Adjusted 160 106% 111% 140 109% 228% 120 100 80 60 40 20 0 FY 2010 FY 2011 Adj. EBITDA (USD m.) Adj. Operating cashflow (USD m.) Strong cash flow generation – in excess of EBITDA 14
Slide 15: Non-Operating Items
Non-Operating Items in USDm Q4 11 Q4 10 y-o-y FY 2011 FY 2010 y-o-y Adjusted EBIT 35.2 53.8 (35%) 87.7 113.7 (23%) Net finance charge (2.5) (6.1) (60%) (8.6) (12.9) (33%) FX loss (2.7) 0.5 n/m (5.4) 1.1 n/m Tax (9.0) - n/m (12.2) (0.5) n/m Bond Interest - 1.6 n/m - 6.0 n/m Adjusted Net 20.9 49.8
Slide 16: Agenda
Agenda 1 Introduction | Ben Robinson | Strategy Director 2 Strategy and Business update | Guy Dubois | CEO 3 Financial update | David Arnott | CFO 4 Summary and Closing Remarks | Guy Dubois | CEO 5 Q&A 16
Slide 17: CEO Agenda Update
CEO Agenda Update 1 Strategic review completed and new strategy in execution 2 Investor day held in London on 2 December 3 Organisational structure revamped 4 Management team strengthened 5 New sales tooling and territory model introduced 6 Services organisation re-energised and partnerships strengt
Slide 18: Mid-term Financial Outlook
Mid-term Financial Outlook 1 Return to 10-15% annual licence growth 2 Return services to double-digit margins 3 Keep services contribution to 25% of total revenues 4 Increase EBIT margins by 100-150bps on average p.a. 5 Maintain 100% conversion of EBITDA into Cash from Ops We reiterate our mid term
Slide 19: Possible All Share Merger With Misys
Possible All Share Merger With Misys 1 Possible all share merger with Misys announced on 7 February 2012 2 Discussions continue with Misys 3 The announced exchange ratio is 4.1 Misys shares to 1 Temenos share Parties continue to believe combination would be one of the leading companies in the 4 fina
Slide 20: Agenda
Agenda 1 Introduction | Ben Robinson | Strategy Director 2 Strategy and Business update | Guy Dubois | CEO 3 Financial update | David Arnott | CFO 4 Summary and Closing Remarks | Guy Dubois | CEO 5 Q&A 20
Slide 21: Appendices
Appendices ‘e TEMENOS 21 The Banking Software Company
Slide 22: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation USDm, except EPS (USD) Q4 11 Q4 10 FY 2011 FY 2010 Net Earnings (8.0) 31.7 (28.3) 61.4 Amortization of acquired 4.3 4.7 17.7 14.9 intangible assets Bond interest - 1.6 - 6.0 Restructuring 24.6 11.8 72.0 25.1 Earnings for adjusted EPS 20.9 49.8 61.4 107.4 Number of Dilutiv
Slide 23: DSOs Trend
DSOs Trend 170 168 164 150 130 125 Days 110 103 90 70 50 FY 2008 FY 2009 FY 2010 FY 2011 23
Slide 24: Breakdown of Licence Revenue by Major Geographies
Breakdown of Licence Revenue by Major Geographies Q4 2011 AMERICAS 7% MEA 21% APAC 27% EUROPE 45% 24
Slide 25: Breakdown of Licence Revenue by Customer Tier
Breakdown of Licence Revenue by Customer Tier 25
Slide 26: Thank You
c hh Thank You