Temenos Ag · SIX:TEMN
Temenos — Q1 2014 Earnings Presentation
32 slides from Temenos's earnings presentation, Apr 29, 2014
Slide 1: Financial results & business update
Financial results & business update Quarter ended 31 March 2014 29 April 2014
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 and 2014 guidance Summary David Arnott, CEO Q&A 3
Slide 4: Summary
Summary Strong Q1 results across all key performance indicators Software licencing growth above full year guidance Continued strong execution on services strategy with LTM margin approaching breakeven Better revenue mix and operational leverage drives non-IFRS EBIT and margin expansion Strong cash i
Slide 5: Q1 2014 sales and pipeline overview
Q1 2014 sales and pipeline overview Strong Q1 licensing growth of 22% taking growth on an LTM basis to 13% Good sales to both the installed base and to new customers • 9 new customer wins (Q1 2013:7) • very strong growth from Americas including Banesco and Banco de la Nacion del Peru High levels of
Slide 6: Q1 2014 operational overview
Q1 2014 operational overview Continued strong execution • 20 implementation go-lives (Q1 2013: 7) • 40 go-lives in total (Q1 2013: 32) Deepening and maturing relationship with partner ecosystem • partners leading on increasing number of implementations • growing opportunity for partners Increased sa
Slide 7: Update on the US
Update on the US Profile continues to be raised in the US market New customers signed for T24 in Q1 • signings with both community banks and credit unions • provides platform from which to build further in both markets On track for go-lives of T24 on a SaaS basis throughout 2014 Over 50 new customer
Slide 8: 3rd party validation of market leadership
3rd party validation of market leadership • Sole vendor at the top of both pyramids • 9th consecutive year as “Global Power Seller” New-named clients All counted deals • 1st position again - 6th time in 7 years • Twice number of deals of nearest competitor Taking market share in a consolidating mark
Slide 9: The most profitable banks run Temenos
The most profitable banks run Temenos Lower cost Higher return on assets Higher return on equity to Income ratio 8.1 Percentage Points 32% 42% The Banker – ‘Top 1000 Banks 2008 – 2012’. Average values for Temenos customers compared with average values for banks with legacy systems. Quantifiable bene
Slide 10: Agenda
Agenda Business update David Arnott, CEO Financial update Max Chuard, CFO and 2014 guidance Summary David Arnott, CEO Q&A 10
Slide 11: Q1 2014 financial highlights
Q1 2014 financial highlights LFL software licencing growth of 20% with LTM growth of 12% 7.3% pts improvement in non-IFRS services margin; approaching breakeven for LTM Non-IFRS EBIT up 47% Non-IFRS EBIT margin up 5.1% points in Q1 with LTM margin of 25.2% Non-IFRS EPS up 54% Q1 operating cashflow i
Slide 12: Non-IFRS income statement - operating
Non-IFRS income statement - operating In USDm Q1 14 Q1 13 Y-o-Y LTM 14 LTM 13 Y-o-Y Software licensing 29.8 24.5 21.7% 143.1 126.2 13.4% SaaS 1.7 NA NA 6.6 NA NA Total software licensing 31.5 24.5 28.8% 149.6 126.2 18.6% Maintenance 53.8 51.0 5.6% 215.3 204.1 5.5% Services 24.2 28.1 -14.0% 108.8 123
Slide 13: Like-for-like revenue and costs
Like-for-like revenue and costs Q1 LFL revenue up 3% Q1 LFL non-IFRS costs down 2% Maintenance Licence SaaS Services USDm USDm 120 120 100 (15)% 100 (2)% 80 +16% 80 60 +20% 60 40 40 20 +4% 20 0 0 Q1 2013 Q1 2014 Q1 2013 Q1 2014 Revenue mix continues to improve 13
Slide 14: Non-IFRS income statement – non-operating
Non-IFRS income statement – non-operating In USDm, except EPS Q1 14 Q1 13 Y-o-Y LTM 14 LTM 13 Y-o-Y Non-IFRS EBIT 19.8 13.5 47% 119.1 93.4 28% Net finance charge -2.5 -1.6 -61% -9.9 -7.3 -34% FX gain -0.5 -0.6 23% -2.0 -2.2 9% Tax -2.8 -2.5 -12% -16.9 -13.0 -30% Non-IFRS net profit 14.0 8.8 60% 90.4
Slide 15: Cash conversion
Cash conversion USDm 119% 180 150 111% 120 216% 90 60 30 0 LTM Q1 2012 LTM Q1 2013 LTM Q1 2014 EBITDA Operating cashflow Consistent improvement in operating cashflows; strong conversion 15
Slide 16: Balance sheet – debt and financing
Balance sheet – debt and financing In USDm 31 Mar 14 Comment Debt 316.5 USD 350m facility and CHF 200m bonds Cash (220.3) Held in short term deposits Net debt 96.2 0.6x LTM EBITDA Treasury shares (58.7) Reflects market value as of 31 March 2014 Net debt inc. treasury shares 37.5 0.3x LTM EBITDA LTM
Slide 17: 2014 guidance
2014 guidance Software licensing growth of 10% to 15% (implying software licensing revenue of USD 152m to USD 158m)* Non-IFRS revenue growth of 5% to 10% (implying revenue of USD 491m to USD 515m)* Non-IFRS EBIT margin of 25.1% (implying non-IFRS EBIT of USD 123m to USD 129m)* 100%+ conversion of EB
Slide 18: Agenda
Agenda Business update David Arnott, CEO Financial update Max Chuard, CFO and 2014 guidance Summary David Arnott, CEO Q&A 18
Slide 19: TCF 2014 – Rome: 20 to 22 May 2014
TCF 2014 – Rome: 20 to 22 May 2014 • Separate analyst & investor track • See innovation • Hear about industry trends • Hear from eminent industry speakers • Meet senior executives • Hear directly from our customers and partners The biggest and best TCF ever 19
Slide 20: Summary
Summary • Strong Q1 results across all key performance indicators • Strong operational performance translated into strong financial performance • High levels of customer activity in all regions • Pipeline underpins confidence in achieving full year guidance Confidence for 2014 and beyond 20
Slide 21: Appendices
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Slide 22: FX assumptions underlying 2014 guidance
FX assumptions underlying 2014 guidance In preparing the 2014 guidance, the Company has assumed the following, which remains unchanged since the announcement of the company’s Q4 and FY 2013 results: • USD to Euro exchange rate of 0.734; • USD to GBP exchange rate of 0.607; and • USD to CHF exchange
Slide 23: Net earnings reconciliation
Net earnings reconciliation In USDm, except EPS Q1 14 Q1 13 IFRS net earnings 11.8 3.7 Acquisition related charges - 0.3 Amortisation of acquired intangibles 1.9 2.6 Restructuring 0.6 2.3 Taxation (0.3) (0.2) Net earnings for non-IFRS EPS 14.0 8.7 No. of dilutive shares 69.5 70.0 Non-IFRS diluted EP
Slide 24: Total software licensing revenue breakdown by geography
Total software licensing revenue breakdown by geography Q1 2013 Q1 2014 APAC APAC 14% 21% Europe 19% Europe 26% Americas Americas MEA MEA 26% 13% 40% 41% LTM Q1 2013 LTM Q1 2014 APAC APAC 22% Europe 17% Europe 26% 23% Americas Americas MEA MEA 12% 18% 40% 42% 24
Slide 25: Total software licensing revenue breakdown by customer tier
Total software licensing revenue breakdown by customer tier Q1 2013 Q1 2014 1 and 2 1 and 2 14% 43% 3, 4 and 5 3, 4 and 5 57% 86% LTM Q1 2013 LTM Q1 2014 1 and 2 1 and 2 22% 37% 3, 4 and 5 3, 4 and 5 63% 78% 25
Slide 26: Total software licensing revenue breakdown by new / existing
Total software licensing revenue breakdown by new / existing Q1 2013 Q1 2014 New New 33% Existing 42% Existing 58% 67% LTM Q1 2013 LTM Q1 2014 New New 27% 37% Existing Existing 63% 73% 26
Slide 27: DSOs
DSOs 250 240 230 220 210 200 190 180 170 30 Sept 12 31 Dec 12 31 Mar 13 30 Jun 13 30 Sept 13 31 Dec 13 31 Mar 14 DSOs down 19 days vs Q1 2013 27
Slide 28: Capitalisation of development costs
Capitalisation of development costs USDm Q1 12 Q2 12 Q3 12 Q4 12 FY 12 Cap’ dev’ costs -9.6 -9.6 -9.6 -13.0 -41.8 Amortisation 6.2 6.7 6.5 6.1 25.5 Net cap’ dev’ -3.4 -2.9 -3.1 -6.9 -16.3 USDm Q1 13 Q2 13 Q3 13 Q4 13 FY 13 Cap’ dev’ costs -9.7 -9.6 -9.8 -12.7 -41.9 Amortisation 6.0 6.1 7.6 8.0 27.7
Slide 29: Reconciliation from IFRS EBIT to non-IFRS EBIT
Reconciliation from IFRS EBIT to non-IFRS EBIT USDm Q1 2014 IFRS EBIT 17.3 Deferred revenue write-down - Discontinued activities - Acquisition-related charges - Amortisation of acquired intangibles 1.9 Restructuring 0.6 Non-IFRS EBIT 19.8 29
Slide 30: 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 30
Slide 31: 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 32: Thank you
Thank you www.temenos.com