Temenos Ag · SIX:TEMN
Temenos — Q1 2004 Earnings Presentation
28 slides from Temenos's earnings presentation, Apr 28, 2004
Slide 1: Financial Results & Business Review
Financial Results & Business Review Quarter ended March 31st, 2004 1
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-loo
Slide 3: Presentation Overview
Presentation Overview Agenda Speaker Position Introduction Max Chuard Director Business Update Andreas Andreades CEO Financial results David Arnott CFO Q&A All 3
Slide 4: Business Update
Business Update Andreas Andreades CEO 4
Slide 5: Business Update
Business Update • Initial Licence Fee (ILF) signings for the quarter amounted to USD 15.7 million, an increase of USD 91.5% compared to the same period last year. • During the quarter our revenues have grown 20.7% compared to the same period last year at USD 39.7 million compared to USD 32.9 million
Slide 6: Business Update (Cont.)
Business Update (Cont.) • We continue to see increased deal flows in Europe in all regions both for TEMENOS T24 and TEMENOS Corebanking. • We continue to see strong demand in retail banking where we continue to gain market share in line with our plan. • We have already signed USD 5.0 million of new
Slide 7: New Signings
New Signings The following new deals were signed during the quarter: – Bank for Agriculture and Agricultural Cooperatives (BAAC) in Thailand with IBM and Thai Equipment Research – Anglo Irish Bank Corporation in the UK and Ireland – Overseas Private Investment Corp. in the US – Banque de France in F
Slide 8: Financial Results
Financial Results David Arnott CFO 8
Slide 9: Q1 2004 Financial Highlights
Q1 2004 Financial Highlights Revenue • Licence revenues at USD 17.4 million for the quarter, up 40.9% compared to the same period last year • Total revenues at USD 39.7 million for the quarter, up 20.7% compared to the same period last year Operating Costs • Operating costs at USD 36.0 million up 13
Slide 10: Q1 2004 Financial Highlights - Cont
Q1 2004 Financial Highlights - Cont EBITDA • EBITDA at USD 8.0 million for the quarter compared to USD 4.9 million for the same period last year Net Earnings • Net Earnings at USD 4.1 million for the quarter compared to USD 1.2 million for the same period last year Earnings Per Share • Fully diluted
Slide 11: Profit & Loss
Profit & Loss USD million Quarter ended March 31 Quarter ended Dec 31 2004 2003 Growth 2003 Growth Revenues Licensing 17. 4 12.4 40.9% 16.8 4.0% Maintenance 8.9 7.3 21.5% 8.6 2.9% Services 13.4 13.2 1.3% 13.5 (0.7)% Total Revenues 39.7 32.9 20.7% 38.9 2.1% Expenses Cost of Licences 1.9 1.0 88.0% 1.5
Slide 12: Currency Movements
Currency Movements USD millions Q1 2004 Q1 2003 % Revenue – as reported 39.7 32.9 20.7% Currency impact 1.2 Revenue Adjusted for FX 39.7 34.1 16.4% Operating Expenses – as reported 36.0 31.8 13.2% Currency impact 2.7 Operating Expenses Adjusted for FX 36.0 34.5 4.3% Net Currency impact (1.5) • Struc
Slide 13: Cash Cost
Cash Cost USD million Q1 2004 Q4 2003 Q1 2003 Total Cost- As reported 36.0 34.3 31.8 Capitalised development 0.7 1.1 0.7 Depreciation & Amortisation (3.3) (2.8) (3.9) Total Cash Cost 33.4 32.6 28.6 Foreign Exchange Impact* n/a 0.7 2.7 Total Cash Cost Adjusted for FX 33.4 33.3 31.3 * Adjustment to Q1
Slide 14: EBITDA
EBITDA USD million Q1 2004 Q4 2003 Q1 2003 EBIT- As reported 4.7 4.6 1.1 Depreciation & Amortisation 3.3 2.8 3.8 EBITDA 8.0 7.4 4.9 Foreign Exchange Adjustment * n/a (0.4) (1.5) EBITDA Adjusted for FX 8.0 7.0 3.4 * Adjustment to Q1 2004 rate 14
Slide 15: EBITDA (cont.)
EBITDA (cont.) USD million Quarterly EBITDA 10.0 7.0 6.4 7.4 7.0 8.0 8.0 5.9 5.4 4.9 5.0 2.9 2.6 3.5 0.2 0.0 -0.2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 -5.0 2002 2002 2002 2002 2003 2003 2003 2003 2004 -10.0 -15.0 -14.4 Actuals -20.0 -18.6 Adjusted -25.0 -23.0 for FX on -27.3 Q1 04 -30.0 • TEMENOS has generate
Slide 16: Balance Sheet
Balance Sheet USD million March 2004 Dec 2003 March 2003 Dec 2002 Receivables 34.4 39.7 37.9 20.5 Accrued revenue 35.8 31.0 22.0 20.3 Less Deferred revenue (31.1) (35.9) (33.3) (22.2) Net 39.1 34.8 26.6 18.6 Cash 26.2 31.7 17.5 24.0 Unutilised facility / debt 25.0 15.0 15.0 15.0 Less Debt (0.0) (5.0
Slide 17: Q1 2004 Cash flow
Q1 2004 Cash flow US$ million Qtr ended March 31st 2004 2003 Last 12months Cash at beginning of period 31.7 24.0 17.5 Operating cash flow (1.4) (3.4) 18.4 Capital spending (0.8) (2.8) (3.9) Debt repayment (5.0) (0.0) (10.0) Other (Financing costs, FX impact, 1.7 (0.3) 4.2 and minority interest etc)
Slide 18: Operating Cash Flows
Operating Cash Flows USD million Q1 2004 Q1 2003 Last 12 months Profit before Taxation 4.4 1.3 15.8 Working Capital changes (9.4) (8.4) (10.6) Depreciation & Amortisation 3.3 3.9 13.8 Other (FX, etc) 0.3 (0.2) (0.6) Operating Cash Flows (1.4) (3.4) 18.4 • We are operating cash flow positive for the
Slide 19: Quarterly Operating Cashflows
Quarterly Operating Cashflows Quarter Amount Quarter Amount Quarter Amount Q1 2004 (1.4) Q1 2003 (3.4) Q1 2002 (4.5) Q2 2004 Q2 2003 8.3 Q2 2002 4.1 Q3 2004 Q3 2003 (1.4) Q3 2002 (12.8) Q4 2004 Q4 2003 12.9 Q4 2002 8.4 TOTAL TOTAL 16.4 TOTAL (4.8) • Operating cashflow on target reflecting seasonalit
Slide 20: TEMENOS Signings targets
TEMENOS Signings targets USD 51.0 million USD 68.0 million USD 22.2 m USD 28.8 m USD 31.7 m USD 36.3 m + 43% + 26% 25.30 22.00 15.70 16.00 14.00 11.00 8.20 6.80 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04E Q3 04E Q4 04E 20
Slide 21: Financial Guidance - 2004
Financial Guidance - 2004 USD million Start of the Year Movement End of the Year Previous Gross Revenue Guidance 150.0 – 160.0 based on USD 51.0 million ILF signings Revenue upside due to higher ILF signings + 6.0 Foreign Exchange + 2.0 New Gross Revenue Guidance 158.0 – 168.0 based on USD 60.0 mill
Slide 22: TEMENOS 2004 Operating Costs Run Rate
TEMENOS 2004 Operating Costs Run Rate Guidance (USD million) Implied Guidance Expectations Previous Implied Cost Guidance 130.0 – 145.0 139.0 Forex + 3.0 Additional Costs in line with revised 2005 target + 2.0 New Implied Cost Guidance 136.0 – 151.0 144.0 USD million Q1 04 Assumption FY04 Run Rate O
Slide 23: Summary Financial Guidance - 2004
Summary Financial Guidance - 2004 2004 • We target revenues for 2004, gross of third party licence, in the range of USD 158 million to USD 168 million. • We target to deliver an EBITDA in the range of USD 32-37 million in 2004 and an EBIT in the range of USD 17-22 million in 2004. • We target to del
Slide 24: Additional slides
Additional slides TEMENOS THE BANKING SOFTWARE STANDARD 24
Slide 25: Client Services
Client Services USD million Q1 2004 Q4 2003 Q1 2003 Revenues 13.4 13.5 13.2 FX Adjustment n/a 0.1 0.5 Adjusted revenues 13.4 13.6 13.7 Costs 11.7 13.3 11.1 FX Adjustment n/a 0.2 0.9 Adjusted costs 11.7 13.5 12.0 Adjusted Margin 1.7 0.1 1.7 Adjusted Margin (%) 12.7% 0.1% 12.4% • Services margin refle
Slide 26: Research & Development
Research & Development USD million Q1 2004 Q4 2003 Q1 2003 R&D costs – As reported 8.4 6.4 8.0 FX Adjustement n/a 0.3 0.8 Adjusted R&D costs 8.4 6.7 8.8 Capitalised Development costs 0.7 1.1 0.7 Non Cash items (2.2) (1.5) (2.6) Cash R&D costs 6.8 6.3 6.9 Less: Funded development (0.5) (1.2) (1.6) 6.
Slide 27: Sales & Marketing
Sales & Marketing USD million Q1 2004 Q4 2003 Q1 2003 S & M costs – As reported 6.6 6.0 5.8 FX Adjustment n/a 0.1 0.5 6.6 6.1 6.3 • Quarter on quarter impacted by seasonality and investment in new territories 27
Slide 28: General & Administrative
General & Administrative USD million Q1 2004 Q4 2003 Q1 2003 G&A costs – As reported 7.0 6.7 5.5 FX Adjustment n/a 0.1 0.4 7.0 6.8 5.9 • We have largely absorbed growth led investment initiatives within the existing cost base 28