Slide 1: Financial results & business update
Financial results & business update Quarter ended 30 June 2013 29 July 2013
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 Business update David Arnott, CEO Financial update Max Chuard, CFO Summary David Arnott, CEO Q&A 3
Slide 4: Summary
Summary Strong Q2 performance across all KPIs Executing on multi-product strategy • making core proposition more attractive • driving strong sales into the installed base Significant margin expansion driven by higher sales and better revenue mix, underpinned by a lower cost base Strong cashflows and
Slide 5: Q2 sales
Q2 sales Strong performance from product business • LFL software licensing revenues up 15% - the third consecutive quarter of growth • 7 new customer wins in Q2 (Q2 2012: 5) • Maintenance revenues remain resilient with LFL growth of 4% • Strong product sales underpin return to growth in overall reve
Slide 6: Q2 sales (continued)
Q2 sales (continued) Europe resilient • Growth in H1 • Strong cross-selling to the installed base, new business still challenging MEA, APAC and Americas delivering to plan • Pipeline strong & growing • Campaigns launched under new structure beginning to come to fruition Strongly positioned against c
Slide 7: Q2 operations update
Q2 operations update Product leadership Customer success New versions of T24, BI and 8 go-lives in Q2 (Q2 2012: 8) PWM products Integration Framework, Datasource, AML SaaS All key H1 deals will be partner-led and SocialComply launched Model bank & country platform enhancements Growth in productised
Slide 8: Update on US SaaS business
Update on US SaaS business 43 new customers added in Q2 LFL SaaS revenues up 31% SaaS versions of Business Intelligence and BSA / AML solutions released US country platform enhancements on track First adopters of T24 core solution identified Integration of TriNovus operations largely complete US str
Slide 9: Agenda
Agenda Business update David Arnott, CEO Financial update Max Chuard, CFO Summary David Arnott, CEO Q&A 9
Slide 10: Q2 financial overview
Q2 financial overview Strong growth in product revenues • LFL software licensing revenues up 15% • Maintenance revenues remain resilient with LFL growth of 4% Services delivering on strategy • Services revenues declining as a % of total revenues • Margin improvement of 4% pts as revenue mix shifts /
Slide 11: Non-IFRS income statement - operating
Non-IFRS income statement - operating In USDm Q2 13 Q2 12 Y-o-Y LTM 13 LTM 12 Y-o-Y Software licensing 27.7 24.2 14.3% 129.6 126.4 2.6% SaaS 1.6 - NA 1.6 - NA Total software licensing 29.3 24.2 21.1% 131.3 126.4 3.9% Maintenance 52.4 50.1 4.6% 206.5 198.1 4.2% Services 28.3 31.3 -9.8% 120.1 129.3 -7
Slide 12: Like-for-like revenue and costs
Like-for-like revenue and costs Q2 LFL revenue Q2 LFL non-IFRS costs Maintenance Licence SaaS Services USDm USDm 120 120 (11)% 90 90 (7)% +31% 60 +15% 60 30 30 +4% 0 0 Q2 2012 Q2 2013 Q2 2012 Q2 2013 Revenue mix improving and like-for-like costs lower 12
Slide 13: Non-IFRS income statement – non-operating
Non-IFRS income statement – non-operating In USDm, except EPS Q2 13 Q2 12 Y-o-Y LTM 13 LTM 12 Y-o-Y Non-IFRS EBIT 20.1 10.8 86% 102.0 76.1 34% Net finance charge (2.4) (1.5) 56% (8.2) (8.5) -4% FX gain / (loss) (0.7) (1.5) -51% (1.5) (7.4) -80% Tax (3.2) (3.9) -17% (12.3) (17.4) -29% Non-IFRS net pr
Slide 14: Cash conversion
Cash conversion USDm 180 132% 150 120 115% 137% 90 60 30 0 LTM Q2 2011 LTM Q2 2012 LTM Q2 2013 EBITDA Operating cashflow Improved profits and DSO reduction underpin strong FCF 14
Slide 15: Balance sheet – debt and financing
Balance sheet – debt and financing In USDm 30 June 13 Comment Credit facilities 214.5 USD 350m facility and CHF 100m bond, due in 2017 Others 0.5 Total debt 215.0 Cash (67.3) Held in short term deposits Net debt 147.7 1.3x LTM EBITDA Treasury shares (67.0) Reflects market value as of 30 June 2013 Ne
Slide 16: 2013 guidance
2013 guidance Non-IFRS revenue growth of 4.5% to 7.5% (implying revenue of USD 469m to USD 482m)* Software licensing growth of 5% to 10% (implying software licensing revenue of USD 131m to USD 137m)* Non-IFRS cost base of USD 368m reaffirmed with non-IFRS EBIT margin of 21.7% to 23.2% (implying non-
Slide 17: Agenda
Agenda Business update David Arnott, CEO Financial update Max Chuard, CFO Summary David Arnott, CEO Q&A 17
Slide 18: Taking stock of the last 12 months
Taking stock of the last 12 months Management actions • Simplified organisation - delayered and regional model reintroduced • Reconfirmed our product and sales focus • Right-sized costs to underpin profitability without impacting our ability to grow • Secured funding for strategic plan at favourable
Slide 19: Appendices
‘e TEMENOS Appendices
Slide 20: FX assumptions underlying 2013 guidance
FX assumptions underlying 2013 guidance In preparing the 2013 guidance, the Company has taken the actual Q1 and Q2 2013 results and for the remainder of 2013 assumed the following: • USD to Euro exchange rate of 0.780; • USD to GBP exchange rate of 0.658; and • USD to CHF exchange rate of 0.950. 20
Slide 21: Net earnings reconciliation
Net earnings reconciliation In USDm, except EPS Q2 13 Q2 12 IFRS net earnings 8.5 0.0 Acquisition related charges - - Amortisation of acquired intangibles 3.2 3.2 Restructuring 2.4 0.7 Taxation (0.4) - Net earnings for non-IFRS EPS 13.7 3.9 No. of dilutive shares 70.5 69.6 Non-IFRS diluted EPS (USD)
Slide 22: Total software licensing revenue breakdown by geography
Total software licensing revenue breakdown by geography Q2 2012 Q2 2013 APAC APAC 16% Europe Europe Americas 34% Americas 43% 47% MEA 12% MEA 38% 2% 8% LTM Q2 2012 LTM Q2 2013 APAC APAC 19% Europe 19% Europe 25% 31% Americas Americas 10% MEA MEA 13% 43% 40% 22
Slide 23: Total software licensing revenue breakdown by customer tier
Total software licensing revenue breakdown by customer tier Q2 2012 Q2 2013 1 and 2 14% 1 and 2 24% 3, 4 and 5 3, 4 and 5 76% 86% LTM Q2 2012 LTM Q2 2013 1 and 2 1 and 2 27% 35% 3, 4 and 5 3, 4 and 5 65% 73% 23
Slide 24: Total software licensing revenue breakdown by new / existing
Total software licensing revenue breakdown by new / existing Q2 2012 Q2 2013 New New 31% 46% Existing Existing 54% 69% LTM Q2 2012 LTM Q2 2013 New New 39% 37% Existing Existing 61% 63% 24
Slide 25: DSOs
DSOs 240 230 230 226 220 211 210 200 LTM Q2 2012 LTM Q4 2012 LTM Q2 2013 Reduction in DSOs in line with strategy 25
Slide 26: Reconciliation from IFRS to non-IFRS
Reconciliation from IFRS to non-IFRS IFRS revenue measure + Deferred revenue write-down = Non-IFRS revenue measure IFRS profit measure +/- Discontinued activities +/- Acquisition related charges +/- Amortisation of acquired intangibles +/- Restructuring +/- Taxation = Non-IFRS profit measure 26
Slide 27: Reconciliation from IFRS EBIT to non-IFRS EBIT
Reconciliation from IFRS EBIT to non-IFRS EBIT USDm Q2 2013 IFRS EBIT 14.4 Deferred revenue write-down - Discontinued activities - Acquisition-related charges - Amortisation of acquired intangibles 3.2 Restructuring 2.5 Non-IFRS EBIT 20.1 27
Slide 28: Definitions
Definitions Non-IFRS adjustments Deferred revenue write-down Adjustments made resulting from acquisitions Discontinued activities Discontinued operations at Temenos that do not qualify as such under IFRS Acquisition related charges Relates mainly to advisory fees and integration costs Amortisation o
Slide 29: Thank you
Thank you www.temenos.com