Temenos Ag · SIX:TEMN
Temenos — Q4 2003 Earnings Presentation
38 slides from Temenos's earnings presentation, Mar 8, 2004
Slide 1: Financial Results & Business Review
Financial Results & Business Review Quarter ended December 31st, 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, Corp. Finance & IR 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 93.4% compared to the same period last year and 29.0% for the full year. • EBIT of USD 4.6 million for the quarter compared to a loss of USD 26.9 million for the same period last year. EBIT of USD 10.7 million for the full year compared to
Slide 6: Business Update (cont.)
Business Update (cont.) • Cash costs at constant rate continued to decline quarter on quarter with a cash cost trend of approx. USD 31 million per quarter. • Operating cash inflows of USD 12.9 million for the quarter compared to operating inflows of USD 8.4 million for the same period last year. Ope
Slide 7: Business Update (cont.)
Business Update (cont.) • 2003 represents our highest revenue ever. USD m 160 146.2 140.9 140 120 113.3 95.3 100 80 60 40 20 0 2003 2002 2001 2000 • Maintenance revenues accumulate to provide increasing visibility and locked in cashflow .(CAGR: 17.6%) USD m 35.0 32.2 28.0 30.0 24.8 25.0 19.8 20.0 15
Slide 8: Business Update (cont.)
Business Update (cont.) • Deferred revenues provide the company with visibility on the year to come. In 2003, more than 23% was deferred which is our higher ever visibility % of forward USD m 40.0 23% e 25% revenues 35.0 35.9 20% 30.0 15% 15% 14% 25.0 15% 20.0 22.2 15.0 10% 20.0 16.6 10.0 5% 5.0 0.0
Slide 9: Outlook
Outlook • We are seeing increased deal flows in Europe and we are close to completing a number of significant contracts in all regions both for TEMENOS T24 and TEMENOS Corebanking. • We are seeing strong demand in retail banking where we continue to gain market share in line with our plan. • We are
Slide 10: Financial Results
Financial Results David Arnott CFO 10
Slide 11: Q4 & FY 03 Financial Highlights
Q4 & FY 03 Financial Highlights Revenue • Revenues at USD 38.9 million for the quarter, up 93.4% compared to the same period last year • Revenues at USD 146.2 million for the year compared to USD 113.3 million for the same period last year, up 29.0%. Operating Costs • Operating costs at USD 34.3 mil
Slide 12: Q4 Financial Highlights - Cont
Q4 Financial Highlights - Cont Operating Profit • Operating profit, at USD 4.6 million for the quarter, compares to a loss of USD 26.9 million for the same period last year and EBITDA at USD 7.4 million for the quarter compares to a loss of USD 22.7 million for the same period last year. Net Earning
Slide 13: Profit & Loss
Profit & Loss USD million Quarter ended December 31 Twelve months ended December 31 2003 2002 Growth 2003 2002 Growth Revenues Licensing 16.8 2.3 633.2% 59.7 36.6 63.6% Maintenance 8.6 7.0 23.2% 32.2 28.0 15.1% Services 13.5 10.8 24.7% 54.2 48.7 11.2% Total Revenues 38.9 20.1 93.4% 146.1 113.3 29.0%
Slide 14: Earnings per share
Earnings per share Quarter ended December 31 Twelve months ended December 31 2003 2002 2003 2002 Net income (USD million) 5.1 (33.4) 10.9 (49.5) Shares outstanding (m) 54.3 54.1 53.3 52.0 Diluted shares outstanding (m) 57.3 56.9 56.3 54.4 Basic EPS 0.09 (0.62) 0.20 (0.95) (USD per share) EPS (fully
Slide 15: Revenue impact of Disposals
Revenue impact of Disposals USD million Quarter ended December 31 Twelve months ended December 31 % % 2003 2002 growth 2003 2002 growth Revenue – as reported 38.9 20.1 93.4% 146.2 113.3 28.9% Disposals - (0.8) (0.6) (3.2) Restated revenues 38.9 19.3 101.6% 145.6 110.1 32.2% 15
Slide 16: Currency Movements
Currency Movements USD millions Q4 2003 Q4 2002 % Revenue – as reported 38.9 20.1 93.4% Currency impact n/a 1.0 Revenue Adjusted for FX 38.9 21.1 84.4% Operating Expenses – as reported (34.3) (47.0) (27.1)% Currency impact n/a (4.2) Operating Expenses Adjusted for FX (34.3) (51.2) (33.0)% Net Curren
Slide 17: Currency Movements
Currency Movements USD millions 2003 2002 % Revenue – as reported 146.2 113.3 29.0% Currency impact n/a 5.9 Revenue Adjusted for FX 146.2 119.2 22.7% Operating Expenses – as reported (135.5) (157.7) (14.1)% Currency impact n/a (14.7) Operating Expenses Adjusted for FX (135.5) (172.4) (21.4)% Net Cur
Slide 18: Cash Cost
Cash Cost USD million Q4 2003 Q3 2003 Q4 2002 Total Cost- As reported 34.3 34.8 47.0 Restructuring charges / One-Off charges (0.2) (0.8) (7.8) Total Cost Adjusted 34.1 34.0 39.2 Depreciation & Amortisation (2.8) (3.9) (4.2) Total Cash Cost Adjusted 31.3 30.1 35.0 Foreign Exchange Impact * n/a 3.3 4.
Slide 19: Cash Cost
Cash Cost USD million 2003 2002 Total Cost- As reported 135.5 157.7 Restructuring charges / One-Off charges (2.0) (13.9) Total Cost Adjusted 133.5 143.8 Depreciation & Amortisation (14.5) (12.8) Total Cash Cost Adjusted 119.0 131.0 Foreign Exchange Impact *n/a 8.8 Total Cash Cost Adjusted for FX 119
Slide 20: EBITDA
EBITDA USD million Q4 2003 Q3 2003 Q4 2002 EBIT- As reported 4.6 3.1 (26.9) Restructuring charges / One-Off charges 0.2 0.8 10.7 EBIT Adjusted 4.8 3.9 (16.2) Depreciation & Amortisation 2.8 3.9 4.2 EBITDA Adjusted 7.6 7.8 (12.0) Foreign Exchange Adjustment * n/a (1.4) (3.2) EBITDA Adjusted for FX 7.
Slide 21: EBITDA
EBITDA USD million 2003 2002 EBIT- As reported 10.7 (44.4) Restructuring charges / One-Off charges 2.0 17.8 EBIT Adjusted 12.7 (26.6) Depreciation & Amortisation 14.5 12.8 EBITDA Adjusted 27.2 (13.8) Foreign Exchange Adjustment * n/a (8.8) EBITDA Adjusted for FX 27.2 (22.6) and for Restructuring/One
Slide 22: 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 23: Q4 2003 Cash flow
Q4 2003 Cash flow US$ million Qtr ended December 31, 2003 2002 Last 12months Cash at beginning of period 21.7 38.1 24.0 Operating cash flow 12.9 8.4 16.4 Capital spending (1.6) (2.7) (5.8) Debt repayment & net financing costs (2.4) (20.1) (4.5) Other (FX impact, etc) 1.1 0.3 1.6 Cash at end of perio
Slide 24: Operating Cash flows
Operating Cash flows US$ million Qtr ended December 31, 2003 2002 Last 12months Operating Earnings 4.6 (26.9) 10.7 Working Capital changes 5.0 32.7 (9.3) Depreciation & Amortisation 2.8 3.9 14.5 Others (FX impact, tax etc) 0.5 (1.3) 0.5 Operating Cash Flows 12.9 8.4 16.4 • We are operating cash flow
Slide 25: Financial Guidance - 2004
Financial Guidance - 2004 2004 • We continue to guide revenues for 2004 in the range of USD 150 million to USD 160 million. • We continue to guide EBITDA in the range of USD 30-35 million in 2004 and EBIT in the range of USD 15-20 million. • We are guiding for Earnings Per Share (EPS) for the year 2
Slide 26: Appendix
TEMENOS Appendix THE BANKING SOFTWARE STANDARD £
Slide 27: Revenue Analysis
Revenue Analysis Geographic split 70.0% 66.3% 60.0% 50.0% 40.0% 30.0% 20.0% 14.0% 12.0% 7.7% 10.0% 0.0% Europe Asia (incl. India) Americas ME & Africa • TEMENOS grew its revenues by approx. 29% during the year 2003 27
Slide 28: Signings Analysis
Signings Analysis % of 2003 signings by Tier % of 2003 signings by segment 70.0% 61.3% 35.0% 60.0% 28.9% 29.5% 30.0% 27.7% 50.0% 25.0% 40.0% 20.0% 30.0% 13.9% 15.0% 18.2% 20.0% 10.0% 11.3% 9.2% 10.0% 5.0% 0.0% 0.0% Tier 1 Tier 2 Tier 3 Tier 4 Private Retail Universal Wholesale • TEMENOS signed USD 5
Slide 29: EBITDA (cont.)
EBITDA (cont.) USD million Quarterly EBITDA 10.0 7.0 7.4 4.9 5.9 5.0 2.9 2.6 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 -5.0 2002 2002 2002 2002 2003 2003 2003 2003 -10.0 -15.0 -14.4 -20.0 -25.0 -22.7 • TEMENOS has generated USD 25.2 million of EBITDA in 2003 compared to a loss of USD (31.6) million for the same p
Slide 30: Research & Development
Research & Development USD million Q4 2003 Q3 2003 Q4 2002 R&D costs – As reported 6.4 8.1 10.9 Restructuring/ One-Off charges 0.0 0.0 0.0 FX Adjustment n/a 0.2 0.4 Adjusted R&D costs 6.4 8.3 11.3 Capitalised Development costs 1.1 0.5 0.6 Non Cash items (1.5) (2.9) (2.3) Adjusted cash R&D costs 6.0
Slide 31: Research & Development
Research & Development USD million 2003 2002 R&D costs – As reported 30.1 34.9 Restructuring/ One-Off charges (0.2) (2.5) FX Adjustment n/a 1.2 Adjusted R&D costs 29.9 33.6 Capitalised Development costs 2.9 4.1 Non Cash items (9.8) (7.9) Adjusted cash R&D costs 23.0 29.8 Less: Funded development (4.
Slide 32: Client Services
Client Services USD million Q4 2003 Q3 2003 Q4 2002 Revenues 13.5 14.2 10.8 Costs (13.3) (11.9) (12.4) Restructuring/ One-Off charges 0.0 0.1 0.0 FX Adjustment n/a (0.6) (1.3) Adjusted Margin 0.2 1.8 (2.9) Adjusted Margin (%) 1% 13% n/a • Strong improvement in profitability driven by better contract
Slide 33: Client Services
Client Services USD million 2003 2002 Revenues 54.2 48.7 Costs (48.8) (53.2) Restructuring/ One-Off charges 0.4 0.6 FX Adjustment n/a (5.8) Adjusted Margin 5.8 (9.7) Adjusted Margin (%) 10.7 n/a • Strong improvement in profitability driven by better contract mix and good cost control. 33
Slide 34: Sales & Marketing
Sales & Marketing USD million Q4 2003 Q3 2003 Q4 2002 S & M costs – As reported 6.0 6.4 17.5 Restructuring/ One-Off charges (0.2) 0.0 (9.8) FX Adjustment n/a 0.3 1.8 5.8 6.7 9.5 • Quarter on quarter impacted by seasonality. 34
Slide 35: Sales & Marketing
Sales & Marketing USD million 2003 2002 S & M costs – As reported 23.5 42.9 Restructuring/ One-Off charges (0.5) (12.1) FX Adjustment n/a 4.7 23.0 35.5 35
Slide 36: General & Administrative
General & Administrative USD million Q4 2003 Q3 2003 Q4 2002 G&A costs – As reported 6.7 6.3 5.7 Restructuring / One-Off charges 0.0 (0.7) (0.9) FX Adjustment n/a 0.3 0.6 6.7 5.9 5.4 • We have absorbed growth led investment initiatives within the existing cost base 36
Slide 37: General & Administrative
General & Administrative USD million 2003 2002 G&A costs – As reported 24.7 22.3 Restructuring / One-Off charges (1.0) (2.6) FX Adjustment n/a 2.4 23.7 22.1 • We have absorbed growth led investment initiatives within the existing cost base 37
Slide 38: 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 12.9 Q4 2002 8.4 Q4 2001 1.7 TOTAL 16.4 TOTAL (4.8) TOTAL (0.3) 38