Slide 1: The Banking Software Company
\é The Banking Software Company
Slide 2: Financial Results & Business Update
Financial Results & Business Update Quarter ended 30 June 2012
Slide 3: 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 4: Agenda
Agenda 1 Introduction | Chris McGinnis | Investor Relations 2 Strategy and Business update | David Arnott | CEO 3 Financial update | Max Chuard | CFO 4 Outlook and Summary | David Arnott | CEO 5 Q&A 4
Slide 5: Agenda: Strategy and Business update
Agenda 1 Introduction | Chris McGinnis | Investor Relations 2 Strategy and Business update | David Arnott | CEO 3 Financial update | Max Chuard | CFO 4 Outlook and Summary | David Arnott | CEO 5 Q&A 5
Slide 6: Q2 Market & Sales Summary
Q2 Market & Sales Summary 1 Disappointing quarter – licences down 38% 2 Improvement in trend not achieved due to new name sales execution 3 Installed base sales resilient, but couldn’t offset new name weakness 4 Emerging markets holding up well in 1H – large wins in APAC & MEA 5 Retail strong; PWM a
Slide 7: Q2 Financial & Operating Highlights
Q2 Financial & Operating Highlights 1 Maintenance revenue shows resilience with 6% growth 2 Services recovery continues – margins improve 400bps in LTM 3 8 Go Lives, no slowdown despite drop in new licences 4 Launch of Temenos Enterprise Framework Architecture (TEFA) 5 ABN AMRO and Temenos payments
Slide 8: CEO priorities
CEO priorities 1 Market fundamentals intact 2 Strategic priorities reconfirmed 3 Flatter management structure 4 Processes simplified to improve execution 5 USD20m cost cut programme to protect profitability 6 Cost base of USD350m in 2012 Strategic priorities confirmed; profitability protected 8
Slide 9: Agenda: Financial update
Agenda 1 Introduction | Chris McGinnis | Investor Relations 2 Strategy and Business update | David Arnott | CEO 3 Financial update | Max Chuard | CFO 4 Outlook and Summary | David Arnott | CEO 5 Q&A 9
Slide 10: Income Statement Highlights
Income Statement Highlights in USDm Q2 12 Q2 11 LTM 12 LTM 11 Licences 24.2 39.2 (38)% 126.4 165.9 (24)% Maintenance 50.1 49.0 2% 198.1 182.6 8% Services 31.3 34.2 (8)% 129.4 130.9 (1)% Total Revenue 105.6 122.5 (14)% 453.9 479.4 (5)% Adj. operating costs (94.8) (98.8) (4)% (377.8) (367.6) 3% Ad
Slide 11: Q2 2012 Like-for-Like Revenue and Cost Performance
Q2 2012 Like-for-Like Revenue and Cost Performance Like-for-like Revenue* -11% and like-for-like costs** +2% 140 100 (37)% 2% 120 90 80 100 Licence Licence 70 USDm 6% 80 60 USDm 50 60 Maintenance Maintenance 40 40 (5)% 30 20 20 Services Services 10 0 0 Q2 2011 Q2 2012 Q2 2011 Q2 2012 *Adjusted for F
Slide 12: EBITDA conversion into Operating Cash Flow
EBITDA conversion into Operating Cash Flow Cash conversion at 137% in LTM 120 115% 137% 100 80 USDm 60 40 20 - LTM 2011 LTM 2012 EBITDA (USD m.) Operating cashflow (USD m.) Improving LTM cash conversion 12
Slide 13: Non-Operating Items
Non-Operating Items in USDm Q2 12 Q2 11 LTM 12 LTM 11 Adjusted EBIT 10.8 23.7 (55)% 76.1 111.8 (32)% Net finance charge (1.6) (2.0) (8.2) (12.1) FX gain/(loss) (1.5) (1.8) (7.4) (0.4) Tax (3.9) (0.8) (17.4) (1.2) Adjusted Net 3.8 19.1 (80)% 42.8 98.4 (57)% Profit for EPS Adjusted EPS* 0.05 0.27
Slide 14: Balance Sheet – Debt and Financing
Balance Sheet – Debt and Financing in USDm 30 June 12 Comments Credit facilities 223.2 USD 350m facility, due in 2014 Others 0.5 Total debt 223.7 Cash (59.1) Held in ST deposits Net debt 164.6 Treasury Shares (51.2) Held at market value as of 30/6/12 Net debt & financing 113.4 Under 1x leveraged by
Slide 15: Cost Efficiencies Plan
Cost Efficiencies Plan Cost Area Source of Savings • Simplified structure Sales & Marketing • Refocus • Office consolidation G&A • Offshoring/nearshoring • Efficiencies from acquisitions R&D • Offshoring/nearshoring • Changing skills mix Services • Simplified structure Further net USD20m of cost cut
Slide 16: Agenda: Outlook and Summary
Agenda 1 Introduction | Chris McGinnis | Investor Relations 2 Strategy and Business update | David Arnott | CEO 3 Financial update | Max Chuard | CFO 4 Outlook and Summary | David Arnott | CEO 5 Q&A 16
Slide 17: 2012 Outlook
2012 Outlook Key Performance Indicator Outlook Implied Range Total Revenue -5% to +1% USD437-464m Adjusted EBIT Margin* 19% to 22% USD83-102m Operating Cash to EBITDA 100% Based on spot rates at the end of June 2012 – see appendix for details *Adjusted EBIT adjusts for exceptional items and amortisa
Slide 18: Historical Licence Revenue Breakdown
Historical Licence Revenue Breakdown H1 Historical Licence Breakdown (USDm)* H2 Historical Licence Breakdown (USDm)* 100.0 100.0 90.0 90.0 80.0 80.0 70.0 70.0 60.0 60.0 50.0 50.0 40.0 40.0 30.0 30.0 20.0 20.0 10.0 10.0 0.0 0.0 H1 2010 H1 2011 H1 2012 H2 2010 H2 2011 Mid-point H2 2012 Implied Outlook
Slide 19: Conclusion
Conclusion 1 H2 revenue outlook achievable – given mix and extra focus 2 Cost cuts to deliver cost base of USD350m in 2013 3 Sales organisation refocused and re-energised to deliver 2012 4 Product is extending lead with TEFA, PWM suite and R12 5 Maintenance resilient; services gaining traction 19
Slide 20: Appendices
Appendices ‘e TEMENOS 20 The Banking Software Company
Slide 21: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation USDm, except EPS (USD) Q2 12 Q2 11 Net Earnings (0.0) (21.8) Amortization of acquired 3.2 4.6 intangible assets Adjusting costs * 0.7 36.3 Earnings for adjusted EPS 3.8 19.1 Number of Dilutive Shares 69.6 72.7 Adjusted EPS 0.05 0.27 * Restructuring and one-off non-recurri
Slide 22: Understanding tax
Understanding tax We Wehave havenow nowreached reachedour ourlong-term long-termtax taxrate rateofof17%-18% 17%-18% InIn2011 2011tax taxcharges chargeswere weretaken takenmostly mostlyininQ4 Q4 2012 charge will be smoother throughout year, hence higher LTM 2012 charge will be smoother, hence higher
Slide 23: FX assumptions
FX assumptions FX rates underlying outlook USD/EUR 0.790 USD/GBP 0.635 USD/CHF 0.949 23
Slide 24: DSOs Trend
DSOs Trend Days Sales Outstanding* 180 171 160 160 136 140 124 120 Days 100 80 60 40 20 0 Q2 2009 Q2 2010 Q2 2011 Q2 2012 * Includes deferred revenues Sustained reduction of DSOs continues 24
Slide 25: Breakdown of Licence Revenue by Geography
Breakdown of Licence Revenue by Geography Q2 2012 Q2 2011 AMERICAS AMERICAS 2% 8% MEA MEA APAC 43% APAC 41% 35% 47% EUROPE EUROPE 8% 16% LTM 2012 LTM 2011 AMERICAS AMERICAS 10% 10% MEA 19% MEA APAC APAC 25% 21% 31% EUROPE EUROPE 40% 44% 25
Slide 26: Breakdown of Licence Revenue by Customer Tier
Breakdown of Licence Revenue by Customer Tier Q2 2012 Q2 2011 1-2 1-2 24% 27% 3-5 3-5 76% 73% LTM 2012 LTM 2011 1-2 1-2 27% 23% 3-5 73% 3-5 77% 26
Slide 27: Breakdown of Licence Revenue by Existing/New Customer
Breakdown of Licence Revenue by Existing/New Customer Q2 2012 Q2 2011 Existing Existing 27% 46% New New 54% 73% LTM 2012 LTM 2011 New 39% Existing Existing 41% 61% New 59% 27