Temenos Ag · SIX:TEMN
Temenos — Q2 2003 Earnings Presentation
25 slides from Temenos's earnings presentation, Jul 31, 2003
Slide 1: Financial Results & Business Review
Financial Results & Business Review Quarter ended June 30th, 2003
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 George Koukis Chairman Financial results David Arnott CFO Q&A Executive Team: George Koukis Chairman Andreas Andreades CEO David Arnott CFO Max Chuard Director
Slide 4: Introduction
Introduction George Koukis Chairman
Slide 5: Chairman's Introduction
Chairman’s Introduction • The Board of Directors has appointed Andreas Andreades as the new Chief Executive Officer of TEMENOS Group effective immediately • The Company has returned to growth and profitability • Positive Performance for the quarter and half year • Software markets remain challenging
Slide 6: Financial Results
Financial Results David Arnott CFO
Slide 7: Q2 Financial Highlights
Q2 Financial Highlights Revenue • Revenues at USD 36.6 million for the quarter, up 2.7% compared to the same period last year • Revenues at USD 69.5 million for the half year compared to USD 66.7 million for the same period last year, up 4.1%. Operating costs • Operating costs at USD 34.5 million do
Slide 8: Q2 Financial Highlights - Cont
Q2 Financial Highlights - Cont Operating profit • Operating profit for the quarter of USD 2.0 million, compared to USD 0.1 million for the same period last year and EBITDA for the quarter of USD 5.9 million, up 109.4% compared to same period last year Net Earnings • Net Income for the quarter of USD
Slide 9: Profit & Loss
Profit & Loss USD million Quarter ended: June 30th : Mar 31st: % % 2003 2002 Growth 2003 Growth Revenues Licensing 15.4 14.1 9.1% 12.4 24.2% Maintenance 7.9 7.2 9.9% 7.3 7.7% Services 13.3 14.3 (7.2)% 13.2 0.8% Total Revenues 36.6 35.6 2.7% 32.9 11.1% Expenses Cost of Licences 2.5 1.2 113.3% 1.0 144
Slide 10: Profit & Loss
Profit & Loss USD million First Half : % 2003 2002 Growth Revenues Licensing 27.7 25.9 7.1% Maintenance 15.2 13.4 13.0% Services 26.5 27.4 (3.1)% Total Revenues 69.5 66.7 4.1% Expenses Cost of Licences 3.5 1.9 84.1% Services 23.6 25.1 (6.1)% Software development 15.6 13.4 16.5% Sales and marketing 1
Slide 11: Currency movements
Currency movements USD millions Q2 2003 Q2 2002 % Revenue – as reported 36.6 35.6 2.8% Currency impact 2.1 Revenue adjusted 36.6 37.7 (2.9)% Operating Expenses – as reported 34.5 35.5 (2.8)% Currency impact 4.6 Operating Expenses 34.5 40.1 (14.0)% - adjusted Net Currency impact (2.5) Approximately 7
Slide 12: Cash Cost
Cash Cost USD million Q2 2003 Q1 2003 Q2 2002 Total Cost- As reported 34.5 31.8 35.5 Restructuring charges / One-Off charges 1.1 0.3 0.2 Total Cost Adjusted 33.4 31.5 35.3 Depreciation & Amortisation 3.9 3.8 2.7 Total Cash Cost Adjusted 29.5 27.7 32.6 Foreign Exchange Impact * n/a 1.2 4.6 Total Cash
Slide 13: EBITDA
EBITDA USD million Q2 2003 Q1 2003 Q2 2002 EBIT- As reported 2.0 1.1 0.1 Restructuring charges / One-Off charges 1.1 0.3 0.2 EBIT Adjusted 3.1 1.4 0.3 Depreciation & Amortisation 3.9 3.8 2.7 EBITDA Adjusted 7.0 5.2 3.0 Foreign Exchange Adjustment * n/a (0.7) (2.5) EBITDA Adjusted for FX 7.0 4.5 0.5
Slide 14: Research & Development
Research & Development USD million Q2 2003 Q1 2003 Q2 2002 R&D costs – As reported 7.6 8.0 6.9 Capitalised Development costs 0.5 0.7 2.0 Non Cash items (2.7) (2.6) (1.5) 5.4 6.1 7.4 T24 64% 67% 87% Corebanking 36% 33% 13% •Cash R&D costs significantly reduced and in line with target
Slide 15: Client Services
Client Services USD million Q2 2003 Q1 2003 Q2 2002 Revenues 13.3 13.2 14.3 Costs 12.5 11.1 13.2 Margin 0.8 2.1 1.1 Margin (%) 6.3% 15.8% 8.1% • Asia revenue down compared to budget due to slow progress on projects throughout the region due to SARS related project suspensions and travel restrictions
Slide 16: Sales & Marketing
Sales & Marketing USD million Q2 2003 Q1 2003 Q2 2002 S & M costs – As reported 5.3 5.8 8.7 Restructuring/ One-Off charges 0.1 0.0 0.0 5.2 5.8 8 .7 • Upside leverage possible out of present infrastructure
Slide 17: General & Administrative
General & Administrative USD million Q2 2003 Q1 2003 Q2 2002 G&A costs – As reported 6.2 5.5 5.3 Restructuring / One-Off charges 0.6 0.2 0.2 5.6 5.3 5.1 • Higher than prior year, reflecting the impact of prior year investment in Corebanking and CIS offices
Slide 18: Balance Sheet
Balance Sheet USD million June 2003 March 2003 June 2002 Receivables 37.9 37.9 30.5 Accrued revenue 27.3 22.0 37.5 Less Deferred revenue (36.5) (33.3) (18.4) Net 28.7 26.6 49.6 Cash 25.7 17.5 53.9 Unutilised facility 15.0 15.0 15.0 Less Debt (10.0) (7.5) (10.0) Available Cash 30.7 25.0 58.9 • Improv
Slide 19: Q2 2003 Cash flow
Q2 2003 Cash flow US$ million Qtr ended June 30, 2003 2002 Last 12months Cash at beginning of period 17.5 53.1 53.9 Operating cash flow 8.7 4.1 0.9 Capital spending (0.7) (3.9) (8.2) Debt repayment & financing costs (0.1) (0.1) (21.5) FX impact 0.3 0.6 0.6 Cash at end of period 25.7 53.8 25.7 • We h
Slide 20: Operating Cash Flows
Operating Cash Flows USD million Q2 2003 H1 2003 Last 12 months Operating Earnings 2.2 3.5 (46.3) Working Capital changes 2.9 (5.5) 28.6 Depreciation & Amortisation 3.9 7.7 15.3 Other (FX, etc) (0.3) (0.4) 3.3 Operating Cash Flows 8.7 5.3 0.9
Slide 21: 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 8.7 Q2 2002 4.1 Q2 2001 1.7 Q3 2003 Q3 2002 (12.8) Q3 2001 (5.9) Q4 2003 Q4 2002 8.4 Q4 2001 1.7 TOTAL 5.3 TOTAL (4.8) TOTAL (0.3) • Q2 inflows driven by good cashflow managemen
Slide 22: Q2 2003 ILF Backlog
Q2 2003 ILF Backlog USD million Quarter Ended June 30th, March 31st 2003 Backlog at the start of the Quarter 27.5 32.9 ILF revenue booked (14.4) (10.7) Signings (ILF value) 11.5 6.9 Backlog movement – more than 12 month 0.9 (1.9) Foreign Exchange effect 0.1 0.3 Closing Backlog 25.6 27.5 • Backlog ma
Slide 23: Run Rate Signings
Run Rate Signings % 12 months signings run rate 40.0% 28.0% 30.0% 25.1% 19.7% 20.0% 14.6% 10.0% 0.0% Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03 -10.0% -20.0% -14.9% -20.7% -30.0% • Growing and sustainable signings
Slide 24: Corporate Activities
Corporate Activities Global Technology Ltd • In July 2003 Global Technology Banking Division, our distributor in South Africa, was put into liquidation • Temenos has established a 100% owned subsidiary in South Africa • TEMENOS effective July 1 operates in Africa directly from a clean base in order
Slide 25: Financial Guidance
Financial Guidance • We reached approximately 100% visibility of our targeted 2003 revenues from business closed to date. • Pipeline remains strong; continuing challenging spending among our clients and prospects. • We are confident to reach our EBIT of USD 10 million and EBITDA of approximately USD