Slide 1: Financial Results & Business Update
Financial Results & Business Update Quarter and year ended 31 December 2009 17 February 2010
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: Agenda
Agenda Introduction Ben Robinson Director, Strategic Planning Strategy and Business update Andreas Andreades CEO Financial update David Arnott CFO Acquisition Update Max Chuard Director, M&A and IR Outlook and Summary Andreas Andreades CEO Q&A Slide 3
Slide 4: Agenda
Agenda Introduction Ben Robinson Director, Strategic Planning Strategy and Business update Andreas Andreades CEO Financial update David Arnott CFO Acquisition Update Max Chuard Director, M&A and IR Outlook and Summary Andreas Andreades CEO Q&A Slide 4
Slide 5: 2009 Highlights
2009 Highlights • Operating profit growth of 26% to USD80.2m; margin up 600bps to 21.7% • Cashflow from operations reached USD118m – 107% of EBITDA • Core licensing business returned to growth - up 8% for the year, 15% for each of Q3 & Q4 • 43 new customer wins, including 8 new tier 1 customers - co
Slide 6: 2009 review
2009 review We have achieved all of our financial objectives for 2009: Financial objectives set at Q408 Final outcome Cost base of USD310m USD290m EBIT margin of 19%-20% 21.7% Maintenance revenue of USD117m USD118m 75% EBITDA into cash conversion 107%/USD118m Slide 6
Slide 7: Business update
Business update The business is in very good shape to benefit from recovery in spend: • Core licensing business already returned to growth, continued market share gains → Non-Metavante licence business +8% for year, +15% in Q3 and Q4 • Compelling product roadmap → Converging core system and developi
Slide 8: Overview of FY Sales
Overview of FY Sales Strong sales execution more than offset weaker demand and Metavante impact Core sales Focused execution resulted in higher deal sizes... • 43 new core banking customers (12 in Q409) vs 48 in 2008 • But deal sizes were higher, reflecting the return of tier 1 deals • In 2009, we s
Slide 9: Overview of FY Sales
Overview of FY Sales Strong sales execution more than offset weaker demand and Metavante impact ARC & Insight For the full year, we added 31 new Insight customers... • This was the first year of Insight sales – the product was launched in Q109 • 31 sales comprised 19 new customers, 12 existing • ASP
Slide 10: Services Update
Services Update In 2009, we achieved record number of go-lives... • In 2009, 50 T24 customers went live (vs. 44 in 2008) ... as services initiatives help us to scale more efficiently • TAM, TIM, Management Consulting, Model Bank have all helped the services business to scale to meet demand 3,500 3,1
Slide 11: Update on partners
Update on partners Partners Cognizant → We are jointly going to market for a number of new T24 opportunities → Partnership already enjoying successes – one tier 1 existing client just awarded significant joint services project → Targets for no of trained consultants have been revised up significantl
Slide 12: Agenda
Agenda Introduction Ben Robinson Director, Strategic Planning Strategy and Business update Andreas Andreades CEO Financial update David Arnott CFO Acquisition Update Max Chuard Director, M&A and IR Outlook and Summary Andreas Andreades CEO Q&A Slide 12
Slide 13: Income statement highlights – FY 2009
Income statement highlights – FY 2009 FY 2009 FY 2008 y-o-y (USDm) (USDm) Licence revenues 126.0 150.1 (16%) Total revenues 370.3 406.9 (9%) EBIT 80.2 64.0 26% Adjusted EPS* 1.23 1.14 8% * in USD; see appendix for reconciliation Slide 13
Slide 14: Financial statement highlights
Financial statement highlights in USDm Q4 09 Q4 08 FY 09 FY 08 Licences 44.0 49.9 (12%) 126.0 150.1 (16%) Maintenance 31.6 28.4 +11% 117.1 101.2 +16% Services 43.0 44.0 (2%) 127.2 155.7 (18%) Total revenue 118.6 122.2 (3%) 370.3 406.9 (9%) Total operating costs (77.9) (86.1) (9.5%) (290.1) (343.
Slide 15: FY like-for-like revenues
FY like-for-like revenues ► Adjusting for FX, acquisitions and Metavante Total revenue -8% 500 USDm 450 FX 400 Metavante Acquisitions 350 300 Services -22% Services 250 200 +8% Maintenance Maintenance 150 100 -1%* 50 License License 0 2008 2009 * Non-Metavante licence revenue +8% (due to USD7m cost
Slide 16: Q4 like-for-like revenues
Q4 like-for-like revenues ► Adjusting for FX, acquisitions and Metavante Total revenue -5% 160 USDm 140 Metavante 120 100 Services Services -9% 80 60 Maintenance Maintenance +8% 40 License License -6%* 20 0 Q4 2008 Q4 2009 * Non-Metavante licence revenue +15% Slide 16
Slide 17: Income statement
Income statement Q4 2009 Q4 2008 y-o-y FY 09 FY08 y-o-y (USDm) (USDm) (USDm) (USDm) EBIT 40.7 36.1 13% 80.2 64.0 26% Net finance charge (2.0) (1.9) (6%) (7.7) (5.8) (33%) FX (loss)/gain 0.1 8.4 (99%) (3.7) 5.1 n/a Tax (0.1) 1.9 n/a (0.3) 1.8 n/a Net earnings 38.7 44.5 (13%) 68.5 65.2 5% Adjusted E
Slide 18: Update on cash
Update on cash Strong cash generation in the year • EBITDA into operating cash conversion of 118% in Q4 • FY 09 conversion at 107% • FY 09 operating cash of USD118m EBITDA into operating cash conversion 140 +107% 120 100 +64% USDm 80 +118% EBITDA (USD m.) 60 +100% Operating cashflow (USD m.) 40 20 0
Slide 19: Balance sheet – Debt and financing
Balance sheet – Debt and financing FY 2009 Comments (USDm) 1.5% coupon, matures 2013 (converts at Convertible bond 135.2 CHF18.6) 137.1 Consortium of 7 banks, repayment up to Credit facilities end of 2012 Other 1.3 Obligations under finance leases TOTAL DEBT 273.6 Cash 142.7 Held in short-term depos
Slide 20: Introducing new metrics
Introducing new metrics We are replacing EBIT with adjusted EBIT for 2010 reporting: 2009 2008 EBIT 80.2 64.0 Amortisation of acquired intangibles 8.1 5.1 Restructuring 3.0 2.5 Adjusted EBIT 91.3 71.5 (4.2) For formal outlook, we will continue to use EBITDA into operating cashflow But, we will also
Slide 21: Agenda
Agenda Introduction Ben Robinson Director, Strategic Planning Strategy and Business update Andreas Andreades CEO Financial update David Arnott CFO Acquisition Update Max Chuard Director, M&A and IR Outlook and Summary Andreas Andreades CEO Q&A Slide 21
Slide 22: Introducing Viveo
Introducing Viveo Overview of Viveo Established in 1983 410 full time employees Offices in France, Belgium, Romania and Switzerland (Geneva) 750 customers/ 400 in France Clients in 35 countries USD65m of revenues in 2008/ high single-digit margins Slide 22
Slide 23: Details and rationale for deal
Details and rationale for deal Transaction Summary 24th December agreement signed and closed The price of the acquisition is USD81m It values the company at approx. 3.8x expected 2010 maintenance revenues Transaction financed entirely by existing debt facilities Rationale for the deal: Acc
Slide 24: AML Product Overview
AML Product Overview 3rd Directive Screening of clients & accounts KYC OFAC Profiling Filtering USA Patriot Act Behavioural analysis Real time transaction filtering & watch list enrichment Slide 24
Slide 25: Payments STP Product Overview
Payments STP Product Overview A process-based approach towards payment platform streamlining 1. Payment processing Automated repair and enrichment Operator assisted resolution Message conversion and routing 2. Activity logging STP assessment Rule efficiency logging 3. Rules and data fine t
Slide 26: Payments & AML – Customer References
Payments & AML – Customer References Slide 26
Slide 27: Summary
Summary • Acquisition gives us 50% market share of French market → Market today worth c.USD100m (licence & maintenance), but is roughly 10% penetrated • Expect Viveo to contribute USD60m before revenue synergies → 35% maintenance, 38% services, 27% licences • We expect payments and AML software to r
Slide 28: Agenda
Agenda Introduction Ben Robinson Director, Strategic Planning Strategy and Business update Andreas Andreades CEO Financial update David Arnott CFO Acquisition Update Max Chuard Director, M&A and IR Outlook and Summary Andreas Andreades CEO Q&A Slide 28
Slide 29: Summary: A reminder of the market opportunity
Summary A reminder of the market opportunity The bubbles below represent the size of the market today vs. the total addressable market – for licences and maintenance Market today Addressable market* USD 2.1bn USD 12.6bn Source: Temenos,Celent, Gartner and IDC estimates for total core banking market;
Slide 30: Summary: Drivers underpinning core banking adoption
Summary The drivers underpinning core banking adoption cannot be ignored... What different industries spend on IT as a % of total costs 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 Banking TMT Insurance Public Healthcare Consumer Energy Industrial Sector Goods Source: Boston Consulting Group Slide 30
Slide 31: Summary: ...nor can our credentials
Summary ...nor can our credentials Temenos T24 ranked No. 1 best selling banking system 2007 and 2008 Slide 31
Slide 32: Summary
Summary We have achieved what we intended in 2009.... Met or exceeded our financial targets Met our operational targets ...and we are well positioned for 2010 Going into the year with a higher market share & momentum Product superiority Partner programme providing services scalability and
Slide 33: 2010 Outlook
2010 Outlook Better conditions enable us to return to revenue guidance We expect demand conditions to be better than in 2009... • Pipeline conversion improving, confidence returning • We are making investments to take advantage of better conditions ...However, uncertainty persists... • Demand still
Slide 34: 2010 Outlook
2010 Outlook The following outlook includes the contribution from Viveo: • Revenue growth of 18%-25% • Adjusted EBIT* margin of 25% (2009 – 24.7%, USD91.3m), resulting in 25% EBIT growth at the mid point of the revenue range • EBITDA into cash from operations conversion of 100% • Tax rate of 0% *Add
Slide 35: Closing comments
Closing comments • Operating profit growth trend firmly restored • Revenue growth to follow on from net licence growth • The business is ready to take advantage of better conditions LTM revenues and operating profit since Q2 2005 (USDm) 450 90 400 80 350 70 300 60 250 50 200 40 150 30 100 20 50 10 -
Slide 36: Agenda
Agenda Introduction Ben Robinson Director, Strategic Planning Strategy and Business update Andreas Andreades CEO Financial update David Arnott CFO Acquisition Update Max Chuard Director, M&A and IR Outlook and Summary Andreas Andreades CEO Q&A Slide 36
Slide 37: Appendices
Appendices ‘7 om: MM fe) FA ed * EMENOS The Banking Software Company
Slide 38: Adjusted EPS reconciliation
Adjusted EPS reconciliation Q4 2009 FY 2009 (USDm) (USDm) Earnings 38.6 68.6 Amortisation of acquired intangible assets 1.9 8.1 Bond interest 1.5 5.6 Restructuring* 0 3.0 Total adjusted earnings 42.0 85.3 Number of diluted shares 71.9 69.5 Adjusted EPS 0.58 1.23 *Costs of exiting the joint agreement
Slide 39: Overview of licence growth
Overview of licence growth* FY 2008 FY 2009 MEA MEA EUROPE 26% 27% EUROPE 42% 43% +8% AMERICAS 16% APAC AMERICAS 14% APAC 9% 23% Q4 2008 Q4 2009 MEA EUROPE 25% MEA 41% Europe 23% 38% +15% Americas AMERICAS APAC 29% 5% 8% APAC 31% * This is like-for-like net licence growth (adjusted for acquisitions,
Slide 40: DSOs trend
DSOs trend DSOs – last 9 quarters 176 172 171 171 168 168 167 Days 165 164 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Sustained improvement driven by Shorter implementation times down from average of 18 months in 06 to 9-12 months Improving payment terms: In 09, just
Slide 41: Split of cost lines
Split of cost lines FY09 FY08 y-o-y (USDm) (USDm) Cost of sales 7.6 14.0 (46%) Sales & Marketing 64.6 60.9 6% Total Sales & Marketing 72.2 74.9 (4%) % of sales 19.5% 18.4% (0.1) R&D 62.5 74.9 (17%) % of sales 16.9% 18.4% Services 104.9 140.8 (26%) % of sales 28.3% 34.6% G&A 50.6 52.3 (3%) % of sale
Slide 42: Diluted shares/ FX Budget rates
Diluted shares/ FX Budget rates Diluted share count – 5 year evolution* 2006 2007 2008 2009 2010 CAGR Diluted 67.627 69.352 69.081 69.499 73.226 2% shares** • We expect the share option plan to lead to 2-3% dilution per annum***, consistent with the last 5 years FX – budget rates for 2010 EUR/USD 1.
Slide 43: Thank You
Thank You ‘7 =m: (MT Ce) FA Ee Ea fF EMENOS anking Software Company