Temenos Ag · SIX:TEMN
Temenos — FY2005 Earnings Presentation
31 slides from Temenos's earnings presentation, Feb 22, 2006
Slide 1: Financial Results & Business Update
Financial Results & Business Update Quarter ended December 31st, 2005 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 Business Update Andreas Andreades CEO Financial Results David Arnott CFO 3
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 banking 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 500+ institutions, 600+ li
Slide 7: TEMENOS Strategy
TEMENOS Strategy Create the leading international banking software company Become the provider of choice for the world’s leading banks Focus on four key banking segments - Retail - Universal - Wholesale - Private Growth through both controlled acquisitions and organic activities Strategic partnershi
Slide 8: Business Update
Business Update • Fully diluted EPS for the full year 2005 of USD 0.32 per share (2004: USD 0.22) up 46%. Like for like diluted EPS up 212%. • EBIT for the full year 2005 at USD 22.7m (2004: USD 14.9m) up 52% • Growing Initial Licence Fee (ILF) signings for the full year 2005 at USD 91m (2004: USD 6
Slide 9: Business Update (Cont.)
Business Update (Cont.) Revenues (USD m) Costs (USD m) and Headcount Σ 168.7 +15% 139.7 145.9 Σ 146.5 57.5 +13% Services 50.9 1179 1373 46.8 39.8 +18% Maintenance 55.8 64.4 Like for Like Licence +15% 2004 2005 2004 2005 2005 2005 EBIT* (USD m) Fully Diluted EPS* (USD per share) 0.32 30 22.7 20 6.9 1
Slide 10: Business Update (Cont.)
Business Update (Cont.) Revenue – 2003 Revenue – 2004 Revenue – 2005 ASIA ASIA ASIA 14% 15% 16% AMERICAS 8% AMERICAS AMERICAS 13% 15% EMEA EMEA EMEA 69% 72% 78% Signings – 2003 Signings – 2004 Signings – 2005 ASIA ASIA 11% ASIA 17% 25% AMERICAS 21% AMERICAS AMERICAS 17% 6% EMEA EMEA EMEA 65% 68% 69%
Slide 11: Business Update (Cont.)
Business Update (Cont.) Signings per segment – 2003 Signings per segment – 2004 Signings per segment – 2005 Others Others 26% 30% Others 44% Retail/Unive rsal 56% Retail/Univ Retail/Unive ersal rsal 70% 74% Signings per tier - 2003 Signings per tier - 2004 Signings per tier - 2005 Tier 1&2 29% Tier
Slide 12: Business Update (Cont.)
Business Update (Cont.) Number of Clients – as at Dec 31, 68 New Client Additions in 2005 HSBC Lehman Brothers Sumitomo Trust Companie Monégasque de Banque 505 Financiera Compartamos 437 Royal Bank of Trinidad and Tobago 382 Caja Libertad Zenith Bank The Bank of East Asia Arab Turkish Bank Military
Slide 13: Competition & Market Share
COMPETITION & MARKET SHARE • TEMENOS has been consistently winning against competition including iflex, Misys, Fidelity and SAP • In 2005 we have increased market share with 47% growth which was significantly ahead of industry growth rate of 6% to 8% • TEMENOS has richest product and broader distrib
Slide 14: Acquisitions
ACQUISITIONS • Organic growth model on track • TEMENOS continues to target growth through acquisitions in its core business areas: – Enhance product – Acquire client base – Strengthen delivery capability and distribution • Management continues to maintain a disciplined approach in conducting acquisi
Slide 15: Market Outlook
MARKET OUTLOOK • Robust growth in core spending for Retail, Universal and Private banks on a global basis • Core system replacement today represents the number one or number two priority for CIO’s of major institutions • Key drivers are growth and strategic cost management – Customer retention – Int
Slide 16: Business Outlook
BUSINESS OUTLOOK • Following record Q4 performance, strong momentum continues across both T24 and TCB business into 2006 • Product Maturity and increased client referenceability on T24 and TCB contributing to significant growth in pipeline and opportunities compared to one year ago • During the last
Slide 17: Financial Results
Financial Results David Arnott CFO 17
Slide 18: Q4 & FY 2005 Financial Highlights
Q4 & FY 2005 Financial Highlights Earnings Per Share • Fully diluted EPS for the quarter of USD 0.23 per share compared to USD 0.11 per share for the same period last year, up 109.1% • Fully diluted EPS for the full year of USD 0.32 per share compared to USD 0.22 per share for the same period last y
Slide 19: Q4 & FY 05 Financial Highlights - cont
Q4 & FY 05 Financial Highlights - cont Revenue • Revenues at USD 58.1 million for the quarter, up 43.1% compared to the same period last year. Revenues at USD 168.7 million for the year compared to USD 154.6 million for the same period last year, up 9.1% • Like for like revenues for the year up 14.7
Slide 20: Profit & Loss
Profit & Loss USD million Quarter ended December 31 Twelve months ended December 31 2005 2004 Growth 2005 2004 Growth ILF Signings 28 19 47 % 91 62 47% Revenues Licensing 29.3 16.7 75.9% 64.4 63.8 0.8% Maintenance 12.2 10.9 12.0% 46.8 39.8 17.5% Services 16.6 13.0 27.3% 57.5 50.9 12.9% Total Revenue
Slide 21: 12 month rolling cashflow from operations
12 month rolling cashflow from operations 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 q2 03 q3 03 q4 03 q1 04 q2 04 q3 04 q4 04 q1 05 q2 05 q3 05 q4 05 YTD FEB 2006 •Lower than anticipated Q4 cash flows compensated by strong collection in first 7 weeks period to 21st February
Slide 22: DSOs analysis
DSOs analysis 140 120 116 102 100 91 DSOs-calendar days 80 60 40 20 - Dec 2003 Dec 2004 Dec 2005 22
Slide 23: Outlook - 2006
Outlook - 2006 •The TEMENOS business model is maturing and our financial results no longer include revenues recognised under percentage of completion in either the reported period or the comparative. As a result, reported licence revenues represent a more appropriate measure of business growth than
Slide 24: Appendix
@ TEMENOS™ Appendix
Slide 25: Like for like revenues
Like for like revenues USD million 2005 2004 Licence revenues as reported 64.4 63.8 Legacy % completion revenues (8.0) Like for like licence revenues 64.4 55.8 Maintenance revenues 46.8 39.8 Services revenues 57.5 50.9 Like for like total revenues 168.7 146.6 Growth vs prior year 15% 25
Slide 26: Like for like P&L
Like for like P&L USD million 2005 2004 Revenues as reported 168.7 154.6 Legacy % completion revenues n/a (8.0) Like for like ILF revenues 168.7 146.6 Costs (145.9) (139.7) Like for like EBIT 22.7 6.9 Like for like EPS 0.32 0.10 26
Slide 27: Services margin
Services margin USD million 2005 Q4 Q1-Q3 Services revenue 57.5 16.6 40.9 Costs (61.6) (18.7) (42.8) Variable cost phasing - 1.0 (1.0) Margin (4.1) (1.1) (2.9) % margin (7%) (7%) (7%) 27
Slide 28: Q4 2005 Cash flow
Q4 2005 Cash flow US$ million Qtr ended December 31 2005 2004 Last 12months Net cash at beginning of period 11.3 17.1 30.8 Cash from operating activities 12.6 23.0 5.1 Capital spending (4.7) (9.4) (15.0) Net financing costs (2.4) (0.2) (3.0) Other (Tax, FX impact, etc) (1.1) 0.2 (2.3) Net Cash at en
Slide 29: Cash Cost
Cash Cost USD million Q4 2005 Q3 2005 Q4 2004 Total Cost- As reported 42.5 33.8 34.9 Capitalised development 4.2 2.9 3.4 Depreciation & Amortisation (2.2) (2.2) (3.5) Other non-cash items (3.0) 0.7 (0.4) Total Cash Cost 41.5 35.2 34.4 29
Slide 30: Cash Cost
Cash Cost USD million 2005 2004 Total Cost- As reported 145.9 141.8 Capitalised development 10.9 6.6 Depreciation & Amortisation (11.2) (13.9) Other non-cash items (3.8) (2.5) Total Cash Cost 141.8 132.0 30
Slide 31: Currency Movements
Currency Movements USD millions Q4 05 Q4 04 % 2005 2004 % Revenue – as reported 58.1 40.6 43.1% 168.7 154.6 9.1% Currency impact n/a (0.2) n/a 0.4 Revenue Adjusted for FX 58.1 40.4 43.8% 168.7 155.0 8.8% Operating Expenses – as reported (42.5) (33.1) 28.5% (145.9) (140.0) 4.2% Currency impact n/a (0