Temenos Ag · SIX:TEMN
Temenos — Q3 2003 Earnings Presentation
27 slides from Temenos's earnings presentation, Oct 23, 2003
Slide 1: Financial Results & Business Review
Financial Results & Business Review Quarter ended September 30th, 2003 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 • During the quarter our revenues have grown 42.8% compared to the same period last year. • EBITDA of USD 7.0 million for the quarter compared to a loss of USD 14.4 million for the same period last year. EBITDA of USD 17.8 million year to date compared to a loss of USD 8.9 million fo
Slide 6: Financial Results
Financial Results David Arnott CFO 6
Slide 7: Q3 Financial Highlights
Q3 Financial Highlights Revenue • Revenues at USD 37.9 million for the quarter, up 42.8% compared to the same period last year • Revenues at USD 107.3 million year to date compared to USD 93.2 million for the same period last year, up 15.1%. Operating Costs • Operating costs at USD 34.8 million down
Slide 8: Q3 Financial Highlights - Cont
Q3 Financial Highlights - Cont Operating Profit • Operating profit, at USD 3.1 million for the quarter, compares to a loss of USD 18.2 million for the same period last year and EBITDA at USD 7.0 million for the quarter compares to a loss of USD 14.4 million for the same period last year. Net Earning
Slide 9: Profit & Loss
Profit & Loss USD million Quarter ended September 30 Nine months ended September 30 % % 2003 2002 Growth 2003 2002 Growth Revenues Licensing 15.2 8.4 81.3% 43.0 34.3 25.3% Maintenance 8.4 7.5 11.4% 23.6 21.0 12.4% Services 14.2 10.6 34.6% 40.7 37.9 7.4% Total Revenues 37.9 26.5 42.8% 107.3 93.2 15.1
Slide 10: Revenue impact of Acquisitions and Disposals
Revenue impact of Acquisitions and Disposals USD million Quarter ended September 30 Nine months ended September 30 % % 2003 2002 growth 2003 2002 growth Revenue – as reported 37.9 26.5 43% 107.3 93.2 15% Acquisitions (0.2) (0.2) (0.9) (0.6) Disposals -___ (1.0) (0.5) (3.1) Restated revenues 37.7 25.
Slide 11: Currency Movements
Currency Movements USD millions Q3 2003 Q3 2002 % Revenue – as reported 37.9 26.5 43.0% Currency impact 0.6 Revenue Adjusted for FX 37.9 27.1 39.9% Operating Expenses – as reported 34.8 44.7 (22.1)% Currency impact 2.3 Operating Expenses Adjusted for FX 34.8 47.0 (26.0)% Net Currency impact (1.7) •
Slide 12: Cash Cost
Cash Cost USD million Q3 2003 Q2 2003 Q3 2002 Total Cost- As reported 34.8 34.5 44.7 Restructuring charges / One-Off charges 0.8 1.1 7.8 Total Cost Adjusted 34.0 33.4 36.9 Depreciation & Amortisation 3.9 3.8 3.6 Total Cash Cost Adjusted 30.1 29.6 33.3 Foreign Exchange Impact * n/a (0.3) 2.3 Total Ca
Slide 13: EBITDA
EBITDA USD million Q3 2003 Q2 2003 Q3 2002 EBIT- As reported 3.1 2.0 (18.2) Restructuring charges / One-Off charges 0.8 1.1 7.8 EBIT Adjusted 3.9 3.1 (10.4) Depreciation & Amortisation 3.9 3.8 3.6 EBITDA Adjusted 7.8 6.9 (6.8) Foreign Exchange Adjustment * n/a 0.2 (1.7) EBITDA Adjusted for FX 7.8 7.
Slide 14: EBITDA (cont.)
EBITDA (cont.) USD million Quarterly EBITDA 10.0 7.0 4.9 5.9 5.0 2.9 2.6 0.0 Q1 2002 Q2 2002 Q3 2002 Q4 2002 Q1 2003 Q2 2003 Q3 2003 -5.0 -10.0 -15.0 -14.4 -20.0 -25.0 -23.0 • TEMENOS has generated USD17.8 million of EBITDA year to date compared to a loss of USD (8.9) million for the same period las
Slide 15: Research & Development
Research & Development USD million Q3 2003 Q2 2003 Q3 2002 R&D costs – As reported 8.1 7.9 11.1 Restructuring/ One-Off charges 0.0 0.0 2.0 Adjusted R&D costs 8.1 7.9 9.1 Capitalised Development costs 0.5 0.5 0.7 Non Cash items (2.9) (2.7) (2.6) Adjusted cash R&D costs 5.7 5.7 7.2 Less: Funded develo
Slide 16: Client Services
Client Services USD million Q3 2003 Q2 2003 Q3 2002 Revenues 14.2 13.3 10.6 Costs 11.9 12.2 15.6 Restructuring/ One-Off charges 0.1 0.3 2.5 Adjusted Margin 2.4 1.4 (2.5) Adjusted Margin (%) 17% 10% n/a • Strong improvement in profitability driven by better contract mix and good cost control. 16
Slide 17: Sales & Marketing
Sales & Marketing USD million Q3 2003 Q2 2003 Q3 2002 S & M costs – As reported 6.4 5.3 9.8 Restructuring/ One-Off charges 0.0 0.1 1.8 6.4 5.2 8.0 • Quarter on quarter impacted by seasonality. 17
Slide 18: General & Administrative
General & Administrative USD million Q3 2003 Q2 2003 Q3 2002 G&A costs – As reported 6.3 6.2 6.6 Restructuring / One-Off charges 0.7 0.6 1.7 5.6 5.6 4.9 • We have absorbed growth led investment initiatives within the existing cost base 18
Slide 19: Balance Sheet
Balance Sheet USD million Sept 2003 June 2003 Sept 2002 Receivables 35.0 37.9 34.4 Accrued revenue 26.4 27.3 37.4 Less Deferred revenue (23.9) (36.5) (19.9) Net 37.5 28.7 51.9 Cash 21.7 25.7 38.1 Unutilised facility 15.0 15.0 15.0 Less Debt (7.5) (10.0) (29.8) Available Cash 29.2 30.7 23.3 • Less ca
Slide 20: Q3 2003 Cash flow
Q3 2003 Cash flow US$ million Qtr ended September 30, 2003 2002 Last 12months Cash at beginning of period 25.7 53.9 38.1 Operating cash flow (1.4) (12.9) 11.9 Capital spending (0.8) (2.8) (6.2) Debt repayment & financing costs (2.5) (0.0) (22.2) Others (FX impact, etc) 0.7 (0.1) 0.1 Cash at end of p
Slide 21: Operating Cash Flows
Operating Cash Flows USD million Q3 2003 YTD 2003 Last 12 months Operating Earnings 3.1 6.1 (20.8) Working Capital changes (8.4) (14.3) 19.9 Depreciation & Amortisation 3.9 11.6 15.6 Other (FX, etc) (0.0) 0.1 (2.8) Operating Cash Flows (1.4) 3.5 11.9 • We are operating cash flow positive for the las
Slide 22: Quarterly Operating Cashflows
Quarterly Operating Cashflows Quarter Amount Quarter Amount Quarter Amount Q1 2003 (3.4) Q1 2002 (4.5) Q1 2001 2.2 Q2 2003 8.3 Q2 2002 4.1 Q2 2001 1.7 Q3 2003 (1.4) Q3 2002 (12.8) Q3 2001 (5.9) Q4 2003 Q4 2002 8.4 Q4 2001 1.7 TOTAL 3.5 TOTAL (4.8) TOTAL (0.3) • Strong cashflow management brings Q3 c
Slide 23: Q3 2003 ILF Backlog
Q3 2003 ILF Backlog USD million Quarter Ended Sept 30th, June 30th, 2003 Backlog at the start of the Quarter 25.6 27.5 ILF revenue booked (14.4) (14.4) Signings (ILF value) 6.1 14.0 Backlog movement – more than 12 month 0.0 (1.9) Foreign Exchange effect 0.1 0.4 Closing Backlog 17.4 25.6 • Backlog lo
Slide 24: Financial Guidance - 2003
Financial Guidance - 2003 USD million Start of the Year Movement End of the Year Revenues Budgeted 130.0 Q1 & Q2 higher than budgeted signings + 1.2 Foreign Exchange + 2.6 Q3 & Q4 signings + 5.2 Revenues Expected (Net of Cost of Licence) 139.0 Cost of Licence 6.0 Revenues Expected (Gross of Cost of
Slide 25: Financial Guidance – 2003 (cont.)
Financial Guidance – 2003 (cont.) USD million Start of the Year Movement End of the Year Operating Costs Budgeted 120 South African / Asian Operations + 2.2 Investment in Northern America + 2.7 Disposal of Alphametrics (0.6) Restructuring of Corebanking (1.3) Other Restructuring + 1.0 Foreign Exchan
Slide 26: Financial Guidance – 2003 (cont.)
Financial Guidance – 2003 (cont.) 2003 • We expect to deliver an EBITDA of USD 25 million and an EBIT of 10 million for the year. • We expect signings for the full year to be within USD 50-60 million in 2003 (2002: USD 57.8m). 26
Slide 27: Financial Guidance - 2004
Financial Guidance - 2004 2004 • We target revenues for 2004, gross of third party licence, in the range of USD 150 million to USD 160 million. We will monitor this as visibility improves during Q4. • Going into 2004 we target a cost base on 2003 levels and therefore plan to fund growth within exist