Temenos Ag · SIX:TEMN
Temenos — Investor Day (February 2021)
159 slides from Temenos's investor day presentation, Feb 18, 2021
Slide 1: Capital Markets Day
TEMENOS Capital Markets Day
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: Non-IFRS Information
Non-IFRS Information Readers are cautioned that the supplemental non-IFRS information presented in this presentation is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for IFRS measurements. Also
Slide 4: Strategy & Vision
Strategy & Vision Max Chuard CEO
Slide 5: We exist to make Banking Better, Together
We exist to make Banking Better, Together 1.2 billion Our 3000 banks Banks that use individuals, include 41 of the Temenos are families, businesses top 50 global industry leaders rely on Temenos banks Achieving They rely on the That’s 30% of the return on equity World’s #1 cloud- world’s banking 3X
Slide 6: Relentless Focus on Innovation
Relentless Focus on Innovation AI/Machine Blockchain/ Cloud/SaaS API/Microservices DevOps Big Data Learning Distributed DB Sustained Highest $2.1 billion Level of R&D Over $1 billion Investment cumulative R&D of R&D investment over investment 1990-2019 Outselling the mid-term competition by 6x 6
Slide 7: Consistent and Profitable Growth Trajectory in next 5 years
Consistent and Profitable Growth Trajectory in next 5 years Achieving Expanding Generating more than EBIT margin to more than USD1bn at least USD600m of bookings 41% of Free Cash by 2025 by 2025 Flow by 2025 Our Vision …from Category Killer to the Industry Standard in Banking Software… Note: Non-IFR
Slide 8: Temenos has successfully navigated global crises and come out stronger
Temenos has successfully navigated global crises and come out stronger A resilient business model 1,800 1,600 Global European sovereign Covid-19 1,400 Finance Crisis debt crisis pandemic 1,200 1,000 800 600 400 200 - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E 2025 E
Slide 9: 2020 – an unprecedented year driven by COVID-19
2020 – an unprecedented year driven by COVID-19 USDm Total bookings USDm Total Software USDm SaaS ACV USDm EBIT 400 Licensing 250 30 350 250 25 200 300 200 20 250 150 150 200 15 150 100 100 10 100 50 50 5 50 0 0 0 0 H1 2020 H2 2020 H1 2020 H2 2020 H1 2020 H2 2020 H1 2020 H2 2020 Rapid scaling of rem
Slide 10: COVID-19 has accelerated Digital Transformation of Banks
COVID-19 has accelerated Digital Transformation of Banks Banks need to 15% 30-40% 56% accelerate digital transformation and customer experience across complex product and customer journeys Increase in consumer Reduction in cash usage1 Consumers concerned digital adoption about their ability to pay (
Slide 11: Current Reality at Incumbent Banks
Current Reality at Incumbent Banks High Operational costs Complex, Monolithic, High Dependencies on end-of-life Long times to Inflexible, operational market systems major cause for Batch Legacy risk concern Based IT Landscapes Basel committee introduces new rules to standardize operational risk
Slide 12: Digital Transformation Enabled by Technology Key for ROE Recovery post COVID-19
Digital Transformation Enabled by Technology Key for ROE Recovery post COVID-19 European Banking1, ROE in % Tech-enabled Non-tech enabled ~5-8 ~5-8 COVID-19 presents us with a unique ~2-4 opportunity 2019A Impact of 2022E Digital first Other cost Enhanced New growth New growth 2022E COVID-192 sales
Slide 13: Disruptive Technologies key to the Future of Banking
Disruptive Technologies key to the Future of Banking AI/Machine Blockchain/ Cloud/SaaS API/Microservices DevOps Big Data Learning Distributed DB 84% believe cloud 77% think unlocking value 66% think new technologies will have the biggest impact on platforms and the shift from AI will be the banking
Slide 14: Structural trends driving market growth
Structural trends driving market growth USD 63bn 27% third party penetration in banking vs. 70-80% in other industries at maturity On premise market CAGR SaaS market 2020-25 USD 26bn USD 26bn USD 17bn USD 17bn 6% 25% Total Addressable Market Third party spend Third party spend Third party spend Thir
Slide 15: Segmenting the market
Segmenting the market Large banks Renovation on-premise by domain-specific microservices Selective use of cloud and SaaS Cost and complexity reduction, speed-to-market for new products AI for smarter, faster projects and digital insights Mid to lower tier banks Largely on-premise renovatio
Slide 16: Why Temenos?
Why Temenos? Leading functionality, Only focused Packaged product, localization, on banking single code base advanced technology Scaling through Relentless focus on ecosystem of technology Leader in our market, innovation, highest and implementation 3,000+ clients R&D over 27 years partners 16
Slide 17: Leading Functionality + Latest Technology
Leading + Latest Functionality Technology The Winning = Combination 17
Slide 18: Outselling the competition
Outselling the competition Neo vendors Traditional vendors New digital entrants, cloud-only Cross-industry, not packaged or offering, limited functional scope cloud & SaaS ready Why we win Why we win Cloud native, 27 years of Banking IP Highest R&D in the industry Depth and breadth of functionality
Slide 19: Ready for SaaS Acceleration
Ready for SaaS Acceleration Temenos runs the software Bank runs the software SaaS Revenue License Revenue Bank’s Private cloud On-Premise Cloud Private Public Single code base, same product 19
Slide 20: Significant benefits from running Temenos on-premise and SaaS
Significant benefits from running Temenos on-premise and SaaS From legacy to Banks running Temenos on-premise already Temenos SaaS benefit from modern architecture Flexibility 1000s of Configuration, Migration and Extension APIs 10% of legacy cost Time To Market Continuous integration and Online Mig
Slide 21: Proven at Banks of all Sizes, across all Geographies
Proven at Banks of all Sizes, across all Geographies Large Banks Mid Tier banks Challenger Banks 41 of the world's top The de facto for A market-leading 50 banks over 3000+ banks 60 Challenger banks 21
Slide 22: Komercni Banka
Komercni Banka Temenos Part of the Objectives Products Societe Generale Simplify and consolidate Group IT landscape. Deliver leading edge, innovative products faster. 1.6 million Retail and Streamline STP. Corporate Achieve market-leading customers cost-income ratio. 22
Slide 23: CWB
CWB Temenos Objectives Aims to be Products Canada’s first full service Replace its heavily bank for customized legacy business systems. owners Launch new services quickly and cost effectively. Differentiated customer insights and experience. 23
Slide 24: Alpian
Alpian Temenos Objectives New Swiss Products digital bank for private banking Short time-to-market and wealth and hyper-efficient management cost. Accessible, appealing banking app. Expand outside CHF 660bn Switzerland. market 24
Slide 25: Temenos software delivers tangible value to banks
Temenos software delivers tangible value to banks TEMENOS VALUE BENCHMARK OUR HIGH-PERFORMING CLIENTS Achieve Achieve Allocate IT spend cost-income ratios returns on equity 2x industry half the 3x industry average to growth industry average average & innovation 25
Slide 26: Key strategic initiatives to drive growth across SaaS and licence
Key strategic initiatives to drive growth across SaaS and licence Game-changing Profitable SaaS Product North strategic acceleration growth engines America partnerships 26
Slide 27: Profitable SaaS Acceleration
Profitable SaaS Acceleration Leveraging Leveraging the cloud-native sales organization Hyper-scaling and SaaS-ready for customer operations product success Profitable SaaS Growth with Margin Expansion Achieving 41% Group EBIT margin by 2025 Note: Non-IFRS 27
Slide 28: Continued market leadership across all our growth engines
Continued market leadership across all our growth engines Leader in Omdia Universe Leader in for Digital Banking Platforms Gartner Magic Quadrant 2020-21 Leader in IDC MarketScape Best-In-Class for Integrated Payment for Aite Matrix Platforms Leader Leader in Forrester Wave for Digital Forrester Wav
Slide 29: Accelerating our North America growth
Accelerating our North America growth Investing in our people Majors Expansion of Sales & Marketing headcount Investment in sales leadership across all key segment Go-to-market strategy Nationals Refining approach to market segments New strategic partnerships to drive US growth SaaS and clou
Slide 30: 2021 Partner Program
2021 Partner Program Global Alliances Global Partners Multiregional Partners Regional Partners Strategic Technology Alliance Strategic Technology Partner Technology Partner Technology 30 Provider
Slide 31: Game-changing Global Strategic Partnerships
Game-changing Global Strategic Partnerships Integration of Temenos Infinity Accelerate digital transformation and Salesforce CRM platforms to of DXC’s existing large bank create NEW Digital Workspace customers Be #1 Digital Banking Platform for Combines DXC’s implementation ALL banking clien
Slide 32: And we will achieve this ethically and responsibly
And we will achieve this ethically and responsibly Five pillars of our ESG strategy Achieving Business Excellence Operating Responsibly Investing in our People Investing in our Communities Enabling Access to Financial Services Enhancing our ESG reporting Existing Enhancements in 2021 GRI
Slide 33: Tenacity Velocity Responsibility Authenticity Community
TENACITY VELOCITY RESPONSIBILITY AUTHENTICITY COMMUNITY 33
Slide 34: Consistent and Profitable Growth Trajectory in next 5 years
Consistent and Profitable Growth Trajectory in next 5 years Achieving Expanding Generating more than EBIT margin to more than USD1bn at least USD600m of bookings 41% of Free Cash by 2025 by 2025 Flow by 2025 Our Vision …from Category Killer to the Industry Standard in Banking Software… Note: Non-IFR
Slide 35: Customer success
Customer success Alexa Guenoun COO
Slide 36: Customer Expectations Hit all Time High
Market Context 01 Customer Expectations Hit all Time High 80% of customers say the experience a company provides is as important as its products and services 02 Experience Impacts the Bottom Line, for Better or Worse 74% of customer say they’ll pay more for a great experience 03 Commitment to Custom
Slide 37: Customer Success – Market Best Practise
Customer Success – Market Best Practise “Customer success is when our customers achieve their desired outcome through their interactions with Temenos” A customer centric and customer obsessed dedicated organization delivers: Proactive Customer Goal Achievement | Ensures Customer Value from our Produ
Slide 38: Customer Success Strategy at Temenos: Reinforces culture & purpose
Customer Success Strategy at Temenos: Reinforces culture & purpose “When our customers are successful we are successful. Goal Therefore ensuring our customers achieve their desired outcome through their interactions with Temenos and our portfolio is key” Strategy ‘Delivering on Our Promise’ ‘Growth
Slide 39: 20% increase in customer references
567 customer references 834 active customer ambassadors 20% increase in ambassadors in 2020 Bank of Singapore winning the “Visionary Leadership Award” Recognition for their outstanding contribution to the industry and their attributes of a visionary leader Bank Of Singapore 39
Slide 40: 567 active Customer References
567 active Customer References Large banks Mid-tier banks Challenger banks 40
Slide 41: Remote implementation is the new normal
Remote implementation is the new normal Remote first approach now Implementation available to clients in every methodology fully remote region compliant All teams in delivery Temenos Saas, organization (incl. partners) technology and tools in with remote implementation place to collaborate and exper
Slide 42: Success in 2020: 99 customers, 307 Go-lives
Success in 2020 Go-lives across all 6,500+ skilled Temenos consultants products – 307 Go-lives 99 customers across all Temenos skilled consultants ecosystem using Temenos customers (January 2017 - January 2021) for the first time 7000 6000 6523 6580 5822 5000 4000 Partners 4123 3000 2935 involved 20
Slide 43: The new Partner Program Model
The new Partner Program Model Alliances Services Technology Alliances Global Global Strategic Technology Alliance Partner Global Partner Strategic Global Technology Partner Partner Technology Partner Region Multi Partner Provider Regional Partner Technology Provider 43
Slide 44: 2021 Services Partner Program
2021 Services Partner Program Global Alliances Global Partners Multiregional Partners Regional Partners Strategic Technology Alliance Strategic Technology Partner Technology Partner Technology 44 Provider
Slide 45: Our Products and Technology
Our Products and Technology Mark Winterburn Chief Product and Technology Officer
Slide 46: Why we lead the market
WHY WE LEAD THE MARKET $2.1bn > $1bn 513k Invested in Planned to Person Days our products be invested in the invested since 1990 medium term in 2020
Slide 47: Over 25 years of leadership in banking software
Over 25 years of leadership in banking software REVOLUTIONARY TECHNOLOGY Client Server Multi-Tier Cloud Ready Cloud Native 1993 2003 2013 2020 EVOLUTIONARY FUNCTIONALITY 47
Slide 48: Product Investments
Product Investments 513k Person Days invested in 2020 180 New Functional Enhancements 20 Platform Enhancements
Slide 49: Evolution of Microservices
Evolution of Microservices Separation of solutions into Bank proprietary systems 2019 2020 - 2021 Bank proprietary Infinity Distribution Services systems Transact Enterprise Microservices Agility, flexibility and reusability 49
Slide 50: Temenos Technology – ready for the future
Temenos Technology – ready for the future Cloud native, Cloud agnostic platform Containers & Micro services Distributed Database, immutable logging API First Explainable Artificial Intelligence as a service Event streaming, embedded analytics Continuous Integration and Deployment 50
Slide 51: Temenos Delivery & Sales Options
Temenos Delivery & Sales Options Temenos runs the software Bank runs the software SaaS Revenue License Revenue Proven SaaS Classical installation Installation on Bank’s technology on-premise public or private cloud Bank’s Private cloud On-premise Cloud Private The SaaS contract & other 3rd parties i
Slide 52: Our Products and Technology
Our Products and Technology Prema Varadhan Chief Product Architect
Slide 53: Revolutionary Technology, Evolutionary Functionality
Revolutionary Technology, Evolutionary Functionality 53
Slide 54: Temenos Banking platform characteristics
Temenos Banking platform characteristics Flexibility Security Lower cost to run… 1000s of Configuration, Migration and Full security framework Extension APIs Resilience Time To Market Active-active multi-cloud Continuous integration and Online Migration through automated DevOps and AI 10% Openness 1
Slide 55: Technology & Microservices architecture underpinning the Temenos platform
Technology & Microservices architecture underpinning the Temenos platform offers tangible business benefits to banks Platform Features Technology Enablers Business Benefits Cloud native, Cloud agnostic, Multi-Cloud Dramatically lower Flexibility TCO platform Reusability Containers & Micro serv
Slide 56: We are on a continuous microservices journey
We are on a continuous microservices journey to serve all Tiers in all regions Full Temenos stack with embedded banking Banking capabilities as Banking capabilities as capabilities (decoupled by Value-Chain) loosely coupled services Microservices Messages Banks can select a sub-set of banking capabi
Slide 57: Model Bank and with localization
Model Bank and with localization TEMENOS VALUE BENCHMARK Temenos Software Temenos Model Bank Country Specifics Bank Specific Central core with more 1000+ pre-defined processes >280 country modules Bank than 200 optional Compliance, regulation and branding 90% pre-defined parameters modul
Slide 58: Harnessing disruptive technologies to transform transformation
Harnessing disruptive technologies to “transform” transformation Cloud-native domain microservices/ Next generation architecture Low code data migration differentiation technologies capability Temenos will help banks make transformation cheaper, faster and less risky 58
Slide 59: Our Products and Technology
Our Products and Technology Tony Coleman Product Director: Technology
Slide 60: Temenos Technology – ready for the future
Temenos Technology – ready for the future Cloud native, Cloud agnostic platform Containers & Microservices Distributed Database, immutable logging API First Explainable Artificial Intelligence as a service Event streaming, embedded analytics Continuous Integration and Deployment 60
Slide 61: Temenos Software: Overview
Temenos Software: Overview Risk & Compliance Data Lake Temenos Runs Software Client Runs Software Temenos Saas Public Cloud Hybrid Cloud Like On Premise 61
Slide 62: Scalable, Resilient Operations a Top Priority
Scalable, Resilient Operations a Top Priority: TEMENOS VALUE Confirmed By Our Clients BENCHMARK 92% 92% Adaptive and resilient operating model 92% Scalable, secure infrastructure (Cloud) X% Proportion of Temenos Value Benchmark participants (retail divisions of 18 banks) rated the capability as top
Slide 63: Cloud Native, Cloud Agnostic
Cloud Native, Cloud Agnostic IAM, WAF, KMS APIs DNS Logging, Monitoring Queue … Message Flows External Internet Users Gateway User Agents … Load Balancer Public Cluster (User Agents & APIs) VPN … SQL / Internal SQL JSON Users API * Gateway NOSQL SQL Graph … Private Server-less (Application) Private
Slide 64: Tooling Accelerates Adoption of Continuous Operations
Tooling Accelerates Adoption of Continuous Operations Single tool for all Temenos products End-to-end change management Web based Cloud or On Premise 64
Slide 65: Hyperscale SaaS Operations Through Automation
Hyperscale SaaS Operations Through Automation Investment in technology benefits SaaS Operations: Safe extensibility on packaged software with automated acceptance testing allows high-impact changes frequently and predictably Using cloud native managed services simplifies operations Infrastruct
Slide 66: Temenos Offers Choice
Temenos Offers Choice Who Runs Software Temenos or Client Integrated Architecture Decoupled Hybrid Public Cloud Private Cloud Deployment Hybrid Cloud Like Updatable Package Country Model Banks Extensions 66
Slide 67: Temenos SaaS
Temenos SaaS Ross Mallace Business Line Director, Temenos SaaS
Slide 68: Accelerating SaaS Growth
Accelerating SaaS Growth 70+ Core Banking clients 65% Annual Contract Value growth in 2020 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 68
Slide 69: Driven by client success
Driven by client success Exceeding client goals through customer growth Digital Bank Customer Growth Accounts 800,000 7,000,000.00 700,000 6,000,000.00 600,000 5,000,000.00 500,000 4,000,000.00 400,000 3,000,000.00 300,000 200,000 2,000,000.00 100,000 1,000,000.00 0.00 Apr May Jun Jul Aug Sep Oct No
Slide 70: Strong tailwinds for the market adopting SaaS solutions
Strong tailwinds for the market Market drivers adopting SaaS solutions Growing ecosystem General cloud Speed and impact of with new players (Non- adoption for financial regulatory changes banks, Neobanks, services Fintechs) Security – need for Breadth, depth, and Cost and margin secure software and
Slide 71: Temenos Delivery & Sales Options
Temenos Delivery & Sales Options Temenos runs the software Bank runs the software SaaS Revenue License Revenue Proven SaaS Classical installation Installation on Bank’s technology on-premise public or private cloud Bank’s Private cloud On-premise Cloud Private The SaaS contract & other 3rd parties i
Slide 72: Why Temenos SaaS
Why Temenos SaaS Temenos SaaS is a Global Shared Temenos SaaS Service, proven and running banks around the world. Future Proof Continuous Innovation One global team using pre-built Never upgrade again. standardised people, processes and tooling automation Accelerated Time to Value Client
Slide 73: Temenos is outselling the competition with over 60 challenger banks signed
Temenos is outselling the competition with over 60 challenger banks signed Vendor of choice for regulated banks globally 73
Slide 74: Competing against new SaaS vendors
Competing against new SaaS vendors UNRIVALLED STRONG CREDENTIALS CAPABILITIES AND TRACK RECORD Huge functional capability Unmatched Certifications & Operation Leading cloud-native technology Scale & Ability to deliver Single Codebase Breadth and Depth Evergreen Regulation & Compliance 74
Slide 75: Temenos SaaS and Cloud Operations
Temenos SaaS and Cloud Operations Colin Jarrett Chief Cloud Officer
Slide 76: Global SaaS Operations
Global SaaS Operations Our Global SaaS Operations are positioned to support significant global growth though our Global Command Center in India and our Regional Cloud Centers (Americas, Europe and APAC). Europe 18 Regional Cloud Specialists The Americas 39 Regional Cloud Specialists APAC 21 Re
Slide 77: SaaS Operational Investments in 2020
SaaS Operational Investments in 2020 We have invested significantly across our Product, Tools and Processes to deliver improved Operational Maturity (i.e. operational excellence, scalability and efficiency) Product Automation Operational Engineering Security Tooling Processes Automated End to End
Slide 78: Integrating SaaS Operations and Engineering
Integrating SaaS Operations and Engineering To deliver further scalability and efficiencies, we have established a SaaS Engineering Team within the overall SaaS Operations Organization SaaS SaaS Engineering designs, builds, runs and supports the Engineering Platform combining Cloud Engineering a
Slide 79: Temenos Infinity
Temenos Infinity Joaquin de Valenzuela SVP & Infinity Business Line Director
Slide 80: Digital Banking Trends
Digital Banking Trends Digital as the Disruptive Rising Customers New Normal Technologies Expectations 80
Slide 81: The Digital Customer Requires new Capabilities
The Digital Customer Requires new Capabilities Mobile, World Customer 360º Class View Self-Servicing Activity/Behaviour Omni-Channel Management Actionable Customer Insights Onboarding Real Time Product Interactions Origination Opportunity Management THE DIGITAL CUSTOMER Open Banking Dynamic Pricing
Slide 82: Customer Success in Digital Banking
Customer Success in Digital Banking Infinity Success: Helping 650 banks to transform their businesses 82
Slide 83: Infinity Digital Platform
Infinity Digital Platform 6 PARTNERS 5 CHANNELS Mobile Internet Call Branch Agent Chat Center 4 DIGITAL BANKING SOLUTIONS Temenos Retail Business Corporate Private Banking Infinity Banking Banking Banking & Wealth 3 BUSINESS SOLUTIONS Quantum Onboarding Origination Real-Time Analytics Campaigns 2 IN
Slide 84: Market Analysts recognize our investments
Market Analysts recognize our investments and the great job we are doing OVUM DECISION MATRIX: OMDIA UNIVERSE: SELECTING A DIGITAL BANKING PLATFORM (2019) SELECTING A DIGITAL BANKING PLATFORM (2020) Temenos Temenos 84
Slide 85: How can Temenos Infinity help YOU?
How can Temenos Infinity help YOU? Digitalize the Personalize the Go Beyond Customer Journey Experience Banking 85
Slide 86: Digitalize the Customer Journey
Digitalize the Customer Journey Welcome Customers with a Delightful Experience Onboard new customers frictionless and start to know them Make it Easy Banking with you Tailor you offers in real time to maximize the customer live-time value, sell and deliver instant fulfillment Help Customers Help
Slide 87: Personalize the Experience across Channels
Personalize the Experience across Channels Make Banking Personal Know Your Customers Have a comprehensive view of your customers’ financial information and goals, and analyze their digital behavior Discover New Insights Leverage AI to estimate LTV, churn risk, the next best product and identify
Slide 88: Go Beyond Banking
Go Beyond Banking The Banking Ecosystem Banking as a Service Let your customers integrate your services and sell your product through third party ecosystems Banking as a Platform Provide your customers with end-to-end solution blending financial and no- financial products and orchestrating third
Slide 89: Infinity GTM Model – 3 Dimensions, #OneTeam
Infinity GTM Model – 3 Dimensions, #OneTeam Growth and Customer Success Scale GTM Focus Accounts 1 Obsessed Organization 2 Operations 3 and Geographies Sales Comp Specialists Sales Plays Focus Countries Talent & Drive our strategy and Capabilities BSG Grow the business in alignment across the region
Slide 90: Temenos and Salesforce, Strategic Partnership Agreement
Temenos and Salesforce, Strategic Partnership Agreement + #1 Digital Banking #1 CRM Platform 90
Slide 91: Customer Centricity – New capabilities are needed
Customer Centricity – New capabilities are needed Compete on Experience, supercharge the RM, differentiate in a more and more digital world Actionable Insights leveraging every piece of data Customer 360 View Truly Omnichannel (Digital and Lead Management Physical Channels Integration) Las
Slide 92: Temenos Infinity for Salesforce
Temenos Infinity for Salesforce NEW Digital Workspace to enable business transformation in Physical channels, engage with customers and employees in a whole new way, and deliver and amazing End to End Experience Improved 360 customer View Supercharged employees Truly Phygital engagement Stre
Slide 93: Scope
Scope Physical Channels Only Branches (Mass affluent & Premier) Virtual branches Advisory Centers Contact Centers Wealth Management Offices Personas: Front Office: Relationship Manager, Teller, Mortgage Specialist, Branch Manager, Customer Sales representative, Premier Banking Advisor, W
Slide 94: Banking Solution for ALL
Partnership Goal: Infinity to be the preferred Banking Solution for ALL Customers 94
Slide 95: Why Customers Choose Temenos Infinity
Why Customers Choose Temenos Infinity Lower Risk Greater Speed Reduced Cost Full Flexibility Banking is all we do! Built for Banking Cost to Change Any Deployment Model 25 years of banking domain Retail, Business, Corporate Low code platform that Could be deployed on premise, knowledge and expertise
Slide 96: Infinity competitive landscape
Infinity competitive landscape Backbase Q2 EdgeVerve Crealogix Digital Front to Back Distribution based Architecture Crosses all Banking Verticals Proven Digital Onboarding with Journey Analytics Extensive partner ecosystem 96
Slide 97: Meeting the needs of Large Banks
Meeting the needs of Large Banks Philip Barnett President of Strategic Growth
Slide 98: Current Reality at Incumbent Banks
Current Reality at Incumbent Banks High Operational costs Complex, Monolithic, High Dependencies on end-of-life Long times to Inflexible, operational market systems major cause for Batch Legacy risk concern Based IT Landscapes Basel committee introduces new rules to standardize operational risk
Slide 99: Banks following three strategies to respond to industry pressures
Today, banks are following a combination of three strategies to respond to industry pressures Collaborate Build Renovate with fintechs greenfield existing business Source capabilities from Adopt cloud, fintechs to augment Launch a greenfield microservices and API /complement own challenger bank (new
Slide 100: Temenos supports two ways of renovating large banks
Temenos supports two ways of renovating large banks Build and renovate Continuous renovation Selected banking capabilities as Integrated Temenos stack loosely coupled microservices Distribution Services Temenos Infinity Open Banking & 3rd parties Marketing Funds Real-time Origination Bank proprietar
Slide 101: Open APIs and MarketPlace
Open APIs and MarketPlace TEMENOS VALUE BENCHMARK Banks with strong API capabilities1 have 47% higher3 customer growth Banks with strong access to well populated and curated digital marketplaces2 have 13% lower3 1 Fully API-enabled architecture (maturity rating from 1 to 5) customer attrition 2 Capa
Slide 102: Leveraging Global Strategic Partnerships
Leveraging Global Strategic Partnerships Integration of Temenos Infinity Accelerate Core Banking and Salesforce CRM platforms to transformation of DXC’s global create NEW Digital Workspace banking customers Be #1 Digital Banking Platform for Enable ~40 of the world’s largest ALL banking clie
Slide 103: Why we win
Why we win Industry leading Extensive country technology model banks Flexible Broadest renovation functionality strategies Market leading Global strategic R&D partnerships 103
Slide 104: Temenos Value Benchmark
Temenos Value Benchmark Kanika Hope Chief Strategy Officer
Slide 105: What is the Temenos Value Benchmark program?
What is the Temenos Value Benchmark program?
Slide 106: What is the Temenos Value Benchmark?
106 What is the Temenos Value Benchmark? 100% consultative approach with Temenos strategy consultants Bank A strategic survey-based program to Annual Complete discuss business performance and engagement confidentiality value creation enabled by the bank’s investment in IT, structured around business
Slide 107: Temenos Value Benchmark – Why is it relevant
Temenos Value Benchmark – Why is it relevant Proven Banking is Market Data as methodology all we do! leader an asset A structured approach 27 years of banking Leader in the banking For banks, data is the to provide insights into domain knowledge software industry biggest asset. We our client
Slide 108: Temenos Value Benchmark framework
108 Temenos Value Benchmark framework Banking Value Chain Sales & Product Operations & Payments & Risk & 1 2 Marketing 3 Relationship 4 5 6 Management Execution Settlement Compliance Company Management Profile 7 Reporting & Analytics 8 IT Example of quantitative metrics Example of qualitative best p
Slide 109: 70+ participants in the Temenos Value Benchmark program
70+ participants in the Temenos Value Benchmark program today and counting… 72 banks 5 regions, 3 banking verticals– participated 47 countries Retail, Corporate, Wealth covered 1117 hours of 122 C-level and 657 15,931 quantitative, consulting senior executives met 16,237 qualitative workshops data p
Slide 110: What clients get?
| What clients get? TEMENOS Capital Markets Day
Slide 111: Detailed insights on trends, quantitative metrics and qualitative best practices
Detailed insights on trends, quantitative metrics and qualitative best practices A 100-page detailed and free-of-charge report Drivers of Banking QUALITATIVE BEST QUANTITATIVE METRIC 1 performance & 2 comparison by domain 3 PRACTICE INDUSTRY TRENDS comparison by domain Identification of key operat
Slide 112: Drivers of banking performance
1 Drivers of banking performance Performance indicators Cost-Income Ratio Return on Equity Innovation Effective Risk Performance Customer Operational Advanced and and Analytics drivers Centricity Efficiency Analytics Growth Compliance Time to market % Digitally active % Risk & Compliance staff % Fro
Slide 113: KPI comparison across banking value chain
2 KPI comparison across banking value chain Domain Sample KPI Positioning Product Time to market for new products Management (# of weeks) 52.7 34.0 30.9 13.2 Marketing Digital campaigns lead conversion (%) 1.9 10.3 19.4 27.0 Sales & Relationship Customer growth (%) Management 4.7 18.0 25.4 39.8 Valu
Slide 114: Importance and maturity of best practices
3 Importance and maturity of best practices Best Practice Importance Maturity 4.2 We offer great quality support to clients. Requests are solved efficiently, with high 5.0 1 ownership, and feedback is collected to continuously improve the quality of service. 3.2 5.0 3.0 3.9 We are able to offer a se
Slide 115: What clients say?
| What clients say? TEMENOS Capital Markets Day
Slide 116: The C-level endorse the Temenos Value Benchmark
The C-level endorse the Temenos Value Benchmark Using the technology we have now and with the Temenos Value Benchmark, we are able to pull data we did not have access to in a meaningful way; to customize our products and services, to grow market share, and to deliver a reliable and stable level of p
Slide 117: Our approach to ESG
Our approach to ESG Kalliopi Chioti Sustainability & Social Responsibility Director
Slide 118: Our GOAL
Our GOAL To grow our business in a way that takes care of the world around us, delivering value to anyone associated with us 118
Slide 119: Committed to our stakeholders
Committed to our stakeholders Build long-term, sustainable relationships with our stakeholders Manage our operations in a responsible, secure and sustainable way Help our clients transform into smart, sustainable organizations Achieve both financial and non-financial value for our stakeholders 119
Slide 120: Generating financial & non-financial value
Generating financial & non-financial value For 27 years, these commitments have guided the way we operate internally, innovate and deliver on our business mission towards 5 directions: Achieving Business Excellence Operating Responsibly Investing in our People Investing in our Communities
Slide 121: Engaging with our stakeholders to define our focus areas
Engaging with our stakeholders to define our focus areas SOCIAL Poverty Alleviation & Financial ENVIRONMENT Inclusion GOVERNANCE Digital Inclusion & Innovation Environmental Management & Ethical Business Conduct & Awareness Diversity, Equity & Inclusion Governance Climate Change & Carbon
Slide 122: Innovating with purpose
Innovating with purpose Financial technology & digital finance can advance sustainable development and accelerate the achievement of global environment & social goals Alleviating poverty Climate change Temenos Temenos Inclusive Cloud & Banking Safeguarding peace Delivering education SaaS Temenos Tem
Slide 123: Ensuring effective transparency
Ensuring effective transparency Sustainability Reporting GRI Reporting, the most globally adopted standards Mapping our contribution (operations) to the UN SDGs Mapping GRI with the UN Global Compact External Assurance of CSR report 2021 SASB Reporting and mapping SASB with GRI standards
Slide 124: Our Journey: Key learnings & recognitions
Our Journey: Key learnings & recognitions SXI Dow Jones Switzerland Sustainability FTSE4GOOD Sustainability Index World Index 25® Index & Europe ISS ESG MSCI A ISS E&S Ecovadis PRIME Rating Rating Platinum Rating 124
Slide 125: Financial growth plan
Financial growth plan Takis Spiliopoulos CFO
Slide 126: Consistent and Profitable Growth Trajectory in next 5 years
Consistent and Profitable Growth Trajectory in next 5 years Achieving Expanding Generating more than EBIT margin to more than USD1bn at least USD600m of bookings c.41% of Free Cash by 2025 by 2025 Flow by 2025 Our Vision …from Category Killer to the Industry Standard in Banking Software… Note: Reven
Slide 127: Temenos has successfully navigated global crises and come out stronger
Temenos has successfully navigated global crises and come out stronger A resilient business model 1,800 1,600 Global European sovereign Covid-19 1,400 Finance Crisis debt crisis pandemic 1,200 1,000 800 600 400 200 - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E 2025 E
Slide 128: Why Temenos?
Why Temenos? Leading functionality, Only focused Packaged product, localization, on banking single code base advanced technology Scaling through Relentless focus on ecosystem of technology Leader in our market, innovation, highest and implementation 3,000+ clients R&D over 27 years partners 128
Slide 129: Sustained strong growth across revenue KPIs…
Sustained strong growth across revenue KPIs… Total Revenues Total Software Licensing 981 900 445 847 383 737 356 635 316 559 256 469 214 148 2014 2015 2016 2017 2018 2019 2020 2021E 2014 2015 2016 2017 2018 2019 2020 2021E c.15 % CAGR 2014-19 LFL basis since 2014 c.10% CAGR 2014-19 LFL basis since 2
Slide 130: Sustained strong growth across revenue KPIs…
Sustained strong growth across revenue KPIs… Annual Contract Value Saas Revenues 96 35 67 21 13 31 21 1 4 10 2016 2017 2018 2019 2020 2021E 2016 2017 2018 2019 2020 2021E Note: KPIs are non-IFRS * Historical SaaS revenues adjusted for estimated IFRS15 impact Note: 2021E based on mid-point of guidanc
Slide 131: … and delivering very robust profit growth
… and delivering very robust profit growth Non-IFRS EBIT margin Non IFRS EBIT 37.2% 36.0% 35.3% 318 320 331 265 32.4% 224 31.5% 186 30.3% 156 29.4% 128 28.0% 27.3% 2014 2015 2016 2017 2018 2019 2020 2020 2021 E 2014 2015 2016 2017 2018 2019 2020 2020 2021 E Note: Historical Non IFRS EBIT and EBIT ma
Slide 132: Business model generates strong cash-flow profile
Business model generates strong cash-flow profile Operating Cash Flow Operating cash conversion DSO days 133% 114% 114% 117% 112% 100%+ 100% Average 115% 154 406 365 364 127 119 120 114 111 300 256 227 2015 2016 2017 2018 2019 2020 2021E 2015 2016 2017 2018 2019 2020 2021E 2015 2016 2017 2018 2019 2
Slide 133: Disciplined capital allocation (2015-2020)
Disciplined capital allocation (2015-2020) Balance sheet Share buyback (31-Dec-20) - Outflow 24% Weighted average interest rate 2.1% Acquisition - Outflow Dividend - 62% Weighted average debt Outflow maturity 3 years 14% Leverage ratio 2.1x Targeted acquisitions for USD1.2bn+ and returned USD700m+ t
Slide 134: Using M&A to accelerate organic growth
Using M&A to accelerate organic growth Date Price (m) Capabilities Sep 19 $560 US scale, digital banking and low code development, cloud operations excellence Jul 19 £12 Explainable AI expertise across all products Feb 19 N.D. Data lake capabilities Dec 18 $245 Digital front office, cloud operations
Slide 135: Drivers of growth
| Drivers of growth TEMENOS Capital Markets Day
Slide 136: Application software is significantly underpenetrated in banks
Application software is significantly underpenetrated in banks 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Industrial goods Energy Consumer Healthcare Public Sector Insurance Telecom Banking Sources: Temenos estimates 136
Slide 137: An attractive and continuously growing market
An attractive and continuously growing market USD 63bn 2020 2021 On premise market SaaS market CAGR USD 26bn 2020-25 USD 26bn USD 19bn USD 17bn USD 17bn USD 14bn 6% 25% Total Addressable Third party spend Third party spend Third party spend Third party spend Third party spend Third party spend Marke
Slide 138: SaaS on the rise globally
SaaS on the rise globally Overall serviceable market On premise market SaaS market CAGR 8% USD 26bn CAGR 2020-25 USD 17bn 6% 25% 2020 2025 E Source: IDC, Ovum, Celent, McKinsey, Temenos estimates. 138
Slide 139: Building momentum with tier 1 and 2 clients
Building momentum with tier 1 and 2 clients Non-IFRS total software licensing revenues by client tier 45% 40-50% 139
Slide 140: Building momentum in North America
Building momentum in North America Non-IFRS total software licensing, North America vs. Rest of World 10% 28% 40-45% 140
Slide 141: SaaS growth is largely incremental
SaaS growth is largely incremental License growth to SaaS Prior total software licensing New total software licensing guidance at 15-20% cannibalization FY21-25 guidance at 15%+ 3% 7.5+% 3+% (1-1.5%) 17.5+% License growth 15+% 12+% 12+% 10+% 10-15% FY25 Note: Non-IFRS. 141
Slide 142: License vs Saas Profitability
License vs Saas Profitability Cumulative Gross profit 5.4 4.8 4.2 3.7 NPV: $3.6 3.1 2.8 2.6 2.6 2.4 2.2 2.1 2.0 NPV: $2.1 1.8 1.7 1.5 1.5 1.3 1.1 1.0 0.5 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 License & Maintenance Saas Break even Net present value of SaaS gross mar
Slide 143: Future reporting KPIs
Future reporting KPIs Sales P&L Cash Total bookings* Total software licensing Operating cash conversion SaaS ACV EBIT margin Free cash flow Total ARR* EPS DSOs *New KPIs Total bookings – include fair value of licence contract value, committed maintenance contract value on licence, and SaaS committed
Slide 144: 2025 Targets
2025 Targets Mid-term Guidance 2020 base (CCY) 2025 Targets Previous guidance Total Software Licensing 359.3 15-20% CAGR 2020-25 >=15% CAGR Total revenue 905.5 10-15% CAGR 2020-25 10-15% CAGR EBIT margin 36.0% c.41% by 2025 36%+ (39%+ equivalent excluding IFRS2 costs) Total Bookings 491.5 17-22% CAG
Slide 145: EBIT Margin % expansion
EBIT Margin % expansion 100-150bps p.a c.41% 70-100bps p.a 36% 120 bps FY2021 Guidance represents 120bps Non IFRS EBIT margin expansion from 36% in FY20 FY22-23 margins at 70-100bps per annum increase from FY21 FY24-25 margins at c.41% representing a further acceleration of margin expansion at
Slide 146: SaaS Gross Margin % evolution
SaaS Gross Margin % evolution 4-6% 75-80% 4-5% 3-4% 8% c.65% 57% 47% Hyper-scalers: unit costs to reduce by 25-35% as volumes increase Automation to drive significant efficiencies in operation centres Operations optimized into centralized offshore function with local hubs to provide “follow th
Slide 147: Key cost lines as a percentage of revenue
Key cost lines as a percentage of revenue 36% Margin% c.41% Margin 15% ~14% 7% ~5% 22% 18% 20% 22%+ FY20 FY25 S&M R&D G&A Services Note: Non-IFRS. 147
Slide 148: Drivers of non-IFRS EBIT margin evolution
Drivers of non-IFRS EBIT margin evolution c.41% 36.0% On-Premise and services gross margin to remain constant SaaS Margin to expand to c.75-80% Continued leverage of R&D and G&A infrastructure Sustained investments in Sales & Marketing Note: Non-IFRS. 148
Slide 149: Drivers of FCF evolution and DSO reduction
Drivers of FCF evolution and DSO reduction Free cash flow growth of at least 15% CAGR DSO Reduction from 111 to < 85 by 2025 > 600 111 ~85 297 149
Slide 150: Growth contribution from SaaS is growing rapidly
Growth contribution from SaaS is growing rapidly Non-IFRS Software licensing vs. SaaS revenues 5% 27% c. 50% 150
Slide 151: 2025 non-IFRS EBIT margin relatively insensitive to revenue mix
2025 non-IFRS EBIT margin relatively insensitive to revenue mix Medium term Lower License growth Higher License guidance scenario growth scenario License growth 10%+ CAGR 7% CAGR 13% CAGR SaaS growth 30%+ CAGR 35%+ CAGR 25%+ CAGR Total Software Licensing growth 15-20% CAGR 15-20% CAGR 15-20% CAGR EB
Slide 152: A three-pronged approach to M&A to accelerate organic growth
A three-pronged approach to M&A to accelerate organic growth Accelerated R&D Adjacent markets roadmap in key Increased and markets and scale complementary segments products 152
Slide 153: Appendix
| Appendix TEMENOS Capital Markets Day
Slide 154: EBIT reconciliation
EBIT reconciliation Changes of Non-IFRS definitions From FY-21, we will be excluding the costs of share based payments (IFRS2) and related social charges from our Non-IFRS presented financials. The change of methodology is supported by the fact that this expense is a primarily non-cash item. Our c
Slide 155: Non-IFRS EBIT reconciliation
Non-IFRS EBIT reconciliation 37.2% 36.0% 35.2% 34.8% FY21 represents mid point of guidance FY20 restated on a constant currency basis Last 10 year average IFRS 2 cost as a % of revenues was c.4% FY22-25 estimated IFRS 2 costs of 3-3.5% on total revenues Note: Non-IFRS Total IFRS2 charges for c
Slide 156: Temenos R&D overview
Temenos R&D overview R&D cash cost in FY 20 was USD 232m Total R&D headcount was 3,758 at year end FY 20 This is split between 83% based in India and 17% based globally outside of India R&D costs also include all other associated costs to run the R&D operations including travel, contractors,
Slide 157: Non-IFRS Definitions
Non-IFRS Definitions Non-IFRS adjustments Other IFRS2 charges Revenue visibility Adjustment made for IFRS2 expenses and social charges linked to Visibility on revenue includes a combination of revenue that is long term incentive plans contractually committed and revenue that is in our pipeline and t
Slide 158: SaaS Financial metrics definitions and reporting
SaaS Financial metrics definitions and reporting Annual Contract Annual value of incremental business taken in-year. Includes New Customers, up-sell/cross-sell. Value (ACV) Only includes the recurring element of the contract and exclude variable elements. Disclosure: quarterly reporting, annual guid
Slide 159: Thank You
Thank You temenos.com