Temenos AG · SIX:TEMN
Temenos — Vontobel Swiss Equities Conference 2004
28 slides from Temenos's conference presentation, Jun 3, 2004
Slide 1: Vontobel Swiss Equities Conference
TEMENOS Vontobel Swiss Equities Conference Thursday 3rd June, 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 Speaker Position David Arnott CFO Max Chuard Director Corporate Finance & IR 3
Slide 4: How did we get there?
How did we get there? A vision transformed into the leading provider of banking software systems… 1993 2001 2003 Listed on SWX Launched T24 TEMENOS founded Acquired COREBANKING Invested USD 150m+ in R&D Major Transformation 1993 Key Statistics 2003 Key Statistics • 2 Offices • 32 Offices • 34 Employ
Slide 5: 400+ Banks in 100+ Countries
400+ Banks in 100+ Countries No of Clients 300 317 272 212 176 154 114 86 71 47 21 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 5
Slide 6: World-wide Support
World-wide Support Luxembourg Amsterdam Frankfurt New York Miami London Warsaw Dublin Moscow Paris Geneva Bucharest Seoul Tokyo Madrid Zurich Shanghai Athens Beirut Hong Kong Cairo Mexico City Manila Bangkok Kuala Lumpur Singapore Quito Johannesbourg Dubai Chennai Sydney 6
Slide 7: Products
Products • TEMENOS T24: Multi platform, multi database, open technology, non stop processing – Most functionally rich – Most technologically advanced, “disruptive technology” • TEMENOS CoreBanking: native MVS OS 390 – Leverage sunk investment in mainframe market – Leverages IBM alliance 7
Slide 8: Successful Software Business Model
Successful Software Business Model Revenue Mix 2003 Regional Mix 2003 % % Continental Europe 42 33 Northern Europe 14 26 Licence 27% Asia Pacific Middle East Maintenance 22 15 Russia Services 19 16 North America 36 South America 8
Slide 9: Successful Software business model
Successful Software business model Revenue Mix 2003 % Tiers % Segment 29.5 Tiers 1 &2 14 18.2 29 Retail Wholesale Tier 3 28 Universal Private 30 Tier 4 61.3 9
Slide 10: TEMENOS Client Segmentation
TEMENOS Client Segmentation Size Tier 4 + 5 Tier 3 Tier 2 Tier 1 Asset [USD bn] <10 10-50 50-250 >250 Type Client Segments Retail Private Wholesale Universal HNWI1) > USD 1 m Covering all client Mass < USD 0.1 m SME < 1,000 segments Affluent USD 0.1-1 m employees Multinational >1,000 employees Regio
Slide 11: TEMENOS Market Size of USD 2.3 Billion
TEMENOS Market Size of USD 2.3 Billion Initial license fee and maintenance [USD m] Spending for packaged banking software Annual growth rates per banking type licenses [USD m] [CAGR 2001/2005] ∑ 2,341 Private 22% Retail 13.7% Corporate 7.9% 53% 25% Retail Private 6.0% Corporate Source: Datamonitor;
Slide 12: Our Organisation
Our Organisation Board of Directors 2 Executives and 4 Non Executives Strong Independent Board with Banking and Software experience Executive Board Experienced and Dynamic TEAM, Responsible for Strategy implementation and day to day management Regional Management 7 Regions Focusing on Operations and
Slide 13: TEMENOS Group AG is Led by an Experienced and Competent Executive Board
TEMENOS Group AG is Led by an Experienced and Competent Executive Board Executive Board Andreas Andreades Chief Executive Officer Philip Stanning David Arnott Andre Loustau Max Chuard Marc Vernet Corporate Sales Chief Technical Investor Relations & Chief Financial Software Director Director Officer
Slide 14: TEMENOS an Integrated Banking Solution
TEMENOS an Integrated Banking Solution Among hundreds of independent software vendors, TEMENOS is one of a few offering an universal banking solution Major players by segment Vendor Products Retail Banking Private Wholesale Universal Banking Banking Banking TEMENOS T24/Corebanking I-Flex Flexcube, M
Slide 15: Drivers of Growth
Drivers of Growth • Legacy applications too costly to run – more than 75% of maintenance market dates prior to 1990’s • CIOs expected to bring maintenance costs of legacy applications down • Transaction processing volume growth is exponential • Regulation – BASLE II will have over reaching effects •
Slide 16: Business Update
Business Update • 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 licences
Slide 17: 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 18: Financials
TEMENOS Financials THE BANKING SOFTWARE STANDARD ©
Slide 19: Financials
FINANCIALS Revenues Operating Cash Flow 180 160 25 140 120 20 100 15 80 10 60 5 40 0 99 00 01 02 03 04 -5 99 00 01 02 03 04 -10 EBITDA Headcount 40 30 20 1500 10 1000 (US$m.) 0 500 -10 99 00 01 02 03 04 0 -20 93 95 97 99 01 04 -30 -40 19
Slide 20: Profit & Loss
Profit & Loss USD million Twelve months ended December 31 2003 2002 2001 Revenues Licensing 59.7 36.6 61.5 Maintenance 32.2 28.0 24.8 Services 54.2 48.7 54.5 Total Revenues 146.1 113.3 140.9 Expenses Cost of Licences 6.7 3.2 3.5 Services 48.8 53.2 50.8 Software development 30.1 34.9 30.8 Sales and m
Slide 21: Balance Sheet
Balance Sheet USD million Dec 2003 Sept 2003 Dec 2002 Receivables 39.7 35.0 20.5 Accrued revenue 31.0 26.4 20.3 Less Deferred revenue (35.9) (23.9) (22.2) Net 34.8 37.5 18.6 Cash 31.7 21.7 24.0 Unutilised facility 15.0 15.0 15.0 Less Debt (5.0) (7.5) (10.0) Available Cash 41.7 29.2 29.0 • Working ca
Slide 22: Q1 2004 Profit & Loss
Q1 2004 Profit & Loss USD million Quarter ended March 31 Quarter ended Dec 31 2004 2003 Growth 2003 Growth Revenues Licensing 17. 4 12.4 40.9% 16.8 4.0% Maintenance 8.9 7.3 21.5% 8.6 2.9% Services 13.4 13.2 1.3% 13.5 (0.7)% Total Revenues 39.7 32.9 20.7% 38.9 2.1% Expenses Cost of Licences 1.9 1.0 8
Slide 23: Q1 2004 Balance Sheet
Q1 2004 Balance Sheet USD million March 2004 Dec 2003 March 2003 Dec 2002 Receivables 34.4 39.7 37.9 20.5 Accrued revenue 35.8 31.0 22.0 20.3 Less Deferred revenue (31.1) (35.9) (33.3) (22.2) Net 39.1 34.8 26.6 18.6 Cash 26.2 31.7 17.5 24.0 Unutilised facility / debt 25.0 15.0 15.0 15.0 Less Debt (0
Slide 24: Q1 2004 Cash flow
Q1 2004 Cash flow US$ 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 25: 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 25
Slide 26: 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 27: 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 28: Even Conservative Growth Assumptions Drive EBIT Growth
Even Conservative Growth Assumptions Drive EBIT Growth (US$m). 2003 2004 2006 Revenues 145 158 -168 192-216 Operating costs 135 136 -151 160-165 EBIT 10 17-22 33-40 EBITDA 25 32-37 43-50 Percentage of revenues Revenues 100% 100% 100% Cost of licencing 4% 4% 4% R&D 23% 20-21% 17-18% Services 33% 30-3