Temenos Ag · SIX:TEMN
Temenos — Q4 2012 Earnings Presentation
31 slides from Temenos's earnings presentation, Feb 26, 2013
Slide 1: Financial results & business update
Financial results & business update Quarter and year ended 31 December 2012 26 February 2013
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 2013 guidance Medium term targets David Arnott, CEO Q&A 3
Slide 4: Overview
Overview We reversed the trend and returned to growth in Q4 Strong Q4 on all KPIs with full year 2012 results delivered within outlook range Strong sales to the installed base of products with shorter sales cycles and quicker payback New organisation already delivering benefits 2013 profitability un
Slide 5: Q4 financial overview
Q4 financial overview LFL licence revenues up 17% in Q4 Maintenance revenues highly resilient with LFL growth of 6% - $200m+ of revenues in 2012 Adjusted EBIT up 36% following recovery in licence revenues and lower cost base Adjusted EPS growth of 103% FY cash conversion of 102% Leverage of 1x as at
Slide 6: Q4 sales overview
Q4 sales overview Strong sales of products with shorter sales cycles and quicker payback with growth in Q4 from PWM, BI and Channels Core banking resilient after six quarters of decline Strong Q4 in Europe - signs of stabilisation; Americas strong; APAC and MEA weaker Strong sales in Q4 to Tier 1 an
Slide 7: Operational overview
Operational overview Sales Product Organisation aligned to market opportunity edge IPK integrated Multi-product focus in sales and pre-sales Unified product organisation Cost reduction complete Regional focus Underpins 2013 profitability New structure delivered growth in Q4 Does not impact ability t
Slide 8: Agenda
Agenda Business update David Arnott, CEO Financial update Max Chuard, CFO and 2013 guidance Medium term targets David Arnott, CEO Q&A 8
Slide 9: Q4 and FY KPIs
Q4 and FY KPIs LFL licence revenue LFL total revenue Q4 up 17% Q4 up 5% FY down 14% FY down 3% Adjusted EBIT (and margin) Adjusted EPS Q4 up 36% (margin up 8.0% pts) Q4 up 103% FY down 3% (margin up 0.5% pts) FY up 1.1% Cash Leverage USD 114m of operating cash flow in Q4 USD 97m of free cash flow in
Slide 10: Operating income statement
Operating income statement In USDm Q4 12 Q4 11 Y-o-Y FY 12 FY 11 Y-o-Y Licences 47.9 41.1 16.6% 125.1 146.0 -14.3% Maintenance 52.8 49.9 5.8% 201.7 197.3 2.2% Services 33.5 36.0 -7.1% 123.4 130.1 -5.2% Total revenue 134.2 127.0 5.7% 450.2 473.5 -4.9% Adj. operating costs 86.3 91.8 -6.0% 364.7 385.7
Slide 11: Like-for-like revenue
Like-for-like revenue Q4 like-for-like revenue up 5% FY like-for-like revenue down 3% Maintenance Licence Services Maintenance Licence Services USDm USDm 150 500 400 (3)% (10)% 100 300 (14)% +17% 200 50 100 +6% +5% 0 0 Q4 2011 Q4 2012 FY 2011 FY 2012 Maintenance up 6% in Q4; Licences up 17% in Q4 11
Slide 12: Like-for-like costs
Like-for-like costs Q4 year like-for-like adjusted costs down 8% FY like-for-like adjusted costs down 3% USDm USDm 100 100 (3)% (8)% 80 80 60 60 40 40 20 20 0 0 Q4 2011 Q4 2012 FY 2011 FY 2012 LFL costs down 8% in Q4 to USD 86m; 2013 cost base of USD 360m reconfirmed 12
Slide 13: Below the line income statement
Below the line income statement In USDm except EPS (USD) Q4 12 Q4 11 Y-o-Y FY 12 FY 11 Y-o-Y Adj. EBIT 47.9 35.2 36.0% 85.5 87.7 -2.5% Net finance charge (2.1) (2.5) 17.2% (7.8) (8.6) 9.3% FX gain / (loss) 0.1 (2.7) NM (3.5) (5.4) 35.0% Tax (3.4) (9.0) 61.8% (12.6) (12.2) -3.2% Adj. net profit 42.4
Slide 14: Cash
Cash Cash conversion* Adjusted operating cashflow (USDm) 250% 160 200% 120 150% 80 100% 40 50% 0% 0 FY 2009 FY 2010 FY 2011 FY 2012 FY 2009 FY 2010 FY 2011 FY 2012 * EBITDA into operating cashflow High quality of earnings; cashflow resilience 14
Slide 15: Balance sheet – debt and financing
Balance sheet – debt and financing In USDm 31 Dec 12 Comment Credit facilities 213.8 USD 350m facility, due in 2014 Others 0.6 Total debt 214.4 Cash (117.7) Held in short term deposits Net debt 96.6 1.0x EBITDA Treasury shares (50.8) Held at market value as of 31 Dec 2012 Net debt and financing 45.8
Slide 16: Dividend
Dividend Temenos is highly cash generative with a strong balance sheet which enables: • servicing of our debt obligations; and • investment in the business, including industry leading R&D spend; and • funding for targeted acquisitions; and • returning value to shareholders The Board intends to initi
Slide 17: 2013 guidance
2013 guidance Non-IFRS revenue growth of 2.5% to 5.5% (implying revenue of USD 462m to USD 475m)* Licence growth of 5% to 10% (implying licence revenue of USD 131m to USD 138m)* Non-IFRS cost base of USD 360m reaffirmed with non-IFRS EBIT margin of 22.0% to 23.5% (implying non-IFRS EBIT of USD 102m
Slide 18: Agenda
Agenda Business update David Arnott, CEO Financial update Max Chuard, CFO and 2013 guidance Medium term targets David Arnott, CEO Q&A 18
Slide 19: Temenos Analyst & Investor Day: London, 27 February 2013
Temenos Analyst & Investor Day: London, 27 February 2013 10.00 to 10.45 Our strategic plan David Arnott, CEO 10.45 to 11.30 Products Mark Winterburn, Group Product Director Mark Gunning, Director of Business Solutions 11.30 to 11.45 Coffee 11.45 to 12.15 Services and Partners Mike Davis, Global Head
Slide 20: Medium term targets
Medium term targets 10%+ licence Economies Shorter growth of scale 100-150bps of projects margin Cash Higher expansion New / conversion 5%+ revenue services existing mix over 100% margins growth on average More cash per annum Revenue mix up-front per annum shift per annum Significant, sustained shar
Slide 21: Appendix
Appendix e 21 Company The Banking Software os TEMEN
Slide 22: FX assumptions underlying 2013 guidance
FX assumptions underlying 2013 guidance USD / EUR 0.778 USD / GBP 0.631 USD / CHF 0.938 22
Slide 23: Adjusted EPS reconciliation
Adjusted EPS reconciliation In USDm, except EPS (USD) Q4 12 Q4 11 Y-o-Y FY 12 FY 11 Y-o-Y Net earnings 28.9 (8.1) NM 24.2 (28.3) NM Amortisation of acquired 3.5 4.3 -19.6% 13.2 17.7 -25.8% intangiables Adjusting costs* 10.0 24.6 -59.3% 24.2 72.0 -66.3% Earnings for adjusted EPS 42.4 20.9 103.4% 61.6
Slide 24: DSOs
DSOs Old definition New definition (Receivables – Deferred Revenues) Receivables X 365 X 365 LTM total revenue LTM total revenue 200 350 300 150 250 200 100 150 50 100 50 0 0 2009 2010 2011 2012 2009 2010 2011 2012 24
Slide 25: Licence revenue breakdown by geography
Licence revenue breakdown by geography Q4 2011 Q4 2012 APAC APAC 14% 21% Europe 20% Europe 27% Americas Americas 14% 7% MEA MEA 52% 45% FY 2011 FY 2012 APAC APAC 20% Europe 22% Europe 30% 27% Americas Americas 8% MEA MEA 14% 42% 37% 25
Slide 26: Licence revenue breakdown by customer tier
Licence revenue breakdown by customer tier Q4 2011 Q4 2012 12% 1 and 2 1 and 2 3, 4 and 5 48% 3, 4 and 5 52% 88% FY 2011 FY 2012 13% 1 and 2 1 and 2 37% 3, 4 and 5 3, 4 and 5 63% 87% 26
Slide 27: Licence revenue breakdown by new / existing customer
Licence revenue breakdown by new / existing customer Q4 2011 Q4 2012 New New 35% 32% Existing Existing 65% 68% FY 2011 FY 2012 New New 48% Existing 44% Existing 52% 56% 27
Slide 28: 2012 reconciliation from IFRS EBIT to non-IFRS EBIT
2012 reconciliation from IFRS EBIT to non-IFRS EBIT USD m 2012 IFRS EBIT 48.1 Deferred revenue write-down - Discontinued activities - Acquisition-related charges 5.5 Amortisation of acquired intangibles 13.2 Restructuring 18.7 Non-IFRS EBIT 85.5 2012 non-IFRS EBIT the same as 2012 adjusted EBIT 28
Slide 29: Definition of Non-IFRS adjustments
Definition of 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
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 +/- Discontinued activities +/- Acquisition related charges +/- Amortisation of acquired intangibles +/- Restructuring +/- Taxation = Non-IFRS Profit Measure 30
Slide 31: Thank you
Thank you www.temenos.com