Temenos Ag · SIX:TEMN
Temenos — Q1 2005 Earnings Presentation
31 slides from Temenos's earnings presentation, Apr 27, 2005
Slide 1: Financial Results & Business Update
Financial Results & Business Update Quarter ended 31st March, 2005 1
Slide 2: Presentation Overview
PRESENTATION OVERVIEW Agenda Speaker Position Business Update Andreas Andreades CEO Financial Results David Arnott CFO Investor Relations Max Chuard Director 2
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-loo
Slide 4: Business Update
Business Update Andreas Andreades CEO 4
Slide 5: Our Vision
OUR VISION To become The leading global brand in financial services software 5
Slide 6: Temenos Today
TEMENOS TODAY A leading global financial services software company A growing company with a firm foundation and strong financials Supporting two product lines for core processing: T24: Private, Universal, Wholesale, Retail banks TCB: Large scale Retail banks International Client Base 400+ institutio
Slide 7: Temenos Strategy
TEMENOS STRATEGY Create the leading international banking software group Become the provider of choice for the world’s leading financial institutions Focus on four key banking segments - Retail - Universal - Wholesale - Private Growth through both controlled acquisitions and organic activities Strat
Slide 8: Q1 Results – Key Points
Q1 RESULTS – KEY POINTS • Strong start to 2005 • T24 ILF signings at US$12 million, up 58% compared to Q1 2004. Ahead of target. Excellent progress on delivering on our TCB targets for the year • Business model on target as evidenced by all line items (maintenance up 27%, cost down 6%, size of servi
Slide 9: Sales Performance
SALES PERFORMANCE • Q1 2005 comparatives unfavourable due to large TCB deal in Q1 2004 • US$ 4million of Q4 2004 slippage (2 T24 deals) absorbed • In addition to two deals slippage, T24 grew at 15% for the quarter. Ahead of target and 12 month run rate already at US$ 55 million which is our full yea
Slide 10: IBS Report
IBS REPORT • Out of a total of 320 deals 200 are in the areas of Universal, Retail, Private and Wholesale • TEMENOS ranked in 2nd position, increasing the number of deals from 24 in 2003 to 30 in 2004 i.e. 15% market share of the global market, up from 12% in 2003 • iFlex scores the same number of d
Slide 11: Temenos Confirms Excellent Position
TEMENOS CONFIRMS EXCELLENT POSITION • SAP were listed with only 1 sale of Corebanking • Fidelity with 2 wins of Corebanking and 1 win of Profile (Sanchez) • Avaloq also with only 1 sale (down from 5) • Details available at: www.ibspublishing.com 11
Slide 12: US Market Update
US MARKET UPDATE • Renewed commitment to the US market by Temenos in 2005 • US operations strengthened significantly by appointment of Alex Groenendyk and Greg Green, formerly President and COO of Fiserv CBS Worldwide • Alex and Greg bring market knowledge, significant credibility and a network of p
Slide 13: Market Outlook
MARKET OUTLOOK • Robust growth in core spending for Retail and Universal banks on a global basis • Core system replacement represents today the number one or number two priority for CIO’s of major institutions • Key drivers are growth and strategic cost management. – Customer retention (refer to art
Slide 14: Outlook
OUTLOOK • T24 product established market leader, excellent pipeline in place – Growth run rate ahead of full year target – Full year target is at 10% growth compared to 2004 • TCB market space shared by very small number of competitors – Excellent progress on TCB deals in accordance with our plans –
Slide 15: Financial Results
Financial Results David Arnott CFO 15
Slide 16: Q1 2005 Financial Highlights
Q1 2005 FINANCIAL HIGHLIGHTS Earnings Per Share • Fully diluted EPS for the quarter of US$ 0 per share compared to US$ 0.06 per share for the same period last year. EBIT • EBIT at US$ 0.5 million for the quarter compared to US$ 4.0 million for the same period last year, down 88.0%. Revenue • Revenue
Slide 17: Profit and Loss
PROFIT AND LOSS US$ million Quarter ended 31 March 2005 2004 Growth ILF Signings 12 16 (24)% T24 12 8 58% TCB - 8 n/a Revenues Licensing T24 unbundled 8.6 3.8 126.3% T24 % completion 1.0 3.7 (72.9%) Total T24 Licensing 9.6 7.5 28.0% TCB - 10.9 n/a Total Licensing Revenues 9.6 18.5 (48.2)% Maintenanc
Slide 18: Currency Movements
CURRENCY MOVEMENTS US$ millions Q1 05 Q1 04 % Revenue – as reported 34.9 40.7 (14.2)% Currency impact n/a 0.6 Revenue Adjusted for FX 34.9 41.3 (15.5)% Operating Expenses – as reported (34.5) (36.7) (6.2)% Currency impact n/a (1.0) Operating Expenses Adjusted for FX (34.5) (37.7) (8.5)% Operating pr
Slide 19: Q1 2005 Cash Flow
Q1 2005 CASH FLOW US$ million Qtr ended March 31, 2005 2004 FY 2004 Net cash at beginning of period 30.8 26.7 26.7 Operating cash flow (7.7) (1.4) 15.9 Capital spending* (2.8) 1.1 (12.5) Net financing costs (0.5) (0.2) 0.2 Other (FX impact, etc) (0.5) - 0.5 Net Cash at end of period 19.3 26.2 30.8 *
Slide 20: Balance Sheet
BALANCE SHEET US$ million March 2005 Dec 2004 March 2004 Dec 2003 Receivables (i) 62.4 52.3 34.4 39.7 Accrued Revenues (ii) 19.7 22.6 35.9 31.0 Less Deferred revenue (iii) (29.0) (34.6) (31.1) (35.9) Net 53.1 40.3 39.2 34.8 Other net current liabilities (27.9) (30.1) (25.0) (28.8) Working Capital (i
Slide 21: DSO & Working Capital Analysis
DSO & WORKING CAPITAL ANALYSIS 250 207 190 200 150 100 83 70 50 - juin.03 juin.04 juil.03 juil.04 mai.03 mai.04 mars.03 mars.04 mars.05 avr.03 févr.04 avr.04 févr.05 nov.03 nov.04 janv.04 janv.05 déc.03 déc.04 août.03 sept.03 août.04 sept.04 oct.03 oct.04 Total DSOs Net working capital Linear (Total
Slide 22: Quarterly Operating Cashflows
QUARTERLY OPERATING CASHFLOWS 2005 US$m. 2004 US$m. 2003 US$m. Q1 (7.7) Q1 (1.4) Q1 (3.4) April 7.0 Q2 0.3 Q2 8.3 YTD (0.7) Q3 (5.6) Q3 (1.4) - Q4 22.6 Q4 12.9 TOTAL 25+ TOTAL 15.9 TOTAL 16.4 EBITDA (2005:consensus) 33-34 28.5 24.8 W. Capital movement (8-9) (12.6) (8.4) • Operating cashflow volatili
Slide 23: Outlook - 2005
OUTLOOK - 2005 • We continue to guide on 2005 Fully Diluted Earnings Per Share (EPS) to grow in the range of 20-25% compared to 2004 • We continue to target two to four TCB deals for the year • The outlook is based on: – ILF signings in the range of US$ 70-75 million – Tax rate of 16% – US$/Euro exc
Slide 24: Investor Relations
Investor Relations Max Chuard Director, Corporate Finance & IR 24
Slide 25: Temenos Shares
TEMENOS SHARES • During Q1 2005 Temenos acquired approx. 40,000 TEMENOS shares at an average price of 7.6 or a total consideration of CHF 305,000 • At current stock price levels, TEMENOS continues to consider it is accretive to shareholders to acquire shares in the market to meet maturing stock opti
Slide 26: Dual Currency
DUAL CURRENCY • Stock price is denominated in CHF for a business which is mainly US$ based, hedged in US$ and reports in US$. Stock price movements mask an underlying currency exposure between CHF and US$ • SWX management committee has accepted Temenos’ application for dual currency trading • Temeno
Slide 27: Future Events
FUTURE EVENTS • 4th Ordinary General Meeting of Shareholders of TEMENOS to be held on Wednesday, 25th May 2005 at 2.00pm CET at the Mandarin Oriental-Hotel du Rhône in Geneva, Switzerland • TEMENOS Client Forum, to be held from the 13th-15th June 2005 in Monaco • Investor & Analyst Session on Tuesda
Slide 28: Appendix
@ TEMENOS* Appendix
Slide 29: Cash Cost
CASH COST US$ million Q1 2005 Q4 2004 Q1 2004 Total Cost- As reported 34.5 33.1 36.7 Capitalised development 1.6 3.4 0.7 Depreciation & Amortisation (3.5) (3.5) (3.3) Option Costs (0.8) (0.7) (0.7) Total Cash Cost 31.8 32.3 33.4 Foreign Exchange Impact* n/a (0.1) 1.1 Total Cash Cost Adjusted for FX
Slide 30: Research & Development
RESEARCH & DEVELOPMENT US$ million Q1 2005 Q4 2004 Q1 2004 R&D costs – As reported 6.6 4.7 8.4 FX Adjustment* n/a - 0.1 Adjusted R&D costs 6.6 4.7 8.5 Capitalised Development costs 1.6 3.4 0.7 Non Cash items (3.0) (2.3) (2.2) Adjusted cash R&D costs 5.2 5.8 7.0 * Adjusted to Q1 2005 rate 30
Slide 31: Article
ARTICLE • Power of New Systems; IBK and Woori Bank Reduced the Time Taken to Develop New Product from 20 to 2-3 Days. • Date: 2005-04-19 B2 [Economics Section] Reporter: Hong-Soo Kim • In mid March, when Korean public were heated about the Dok-do or Dok island issue with Japan, another heated race w