Temenos Ag · SIX:TEMN
Temenos — H1 2004 Earnings Presentation
27 slides from Temenos's earnings presentation, Jul 28, 2004
Slide 1: Financial Results & Business Review
Financial Results & Business Review Quarter and Half year ended June 30th, 2004 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 Q&A All 3
Slide 4: Business Update
Business Update Andreas Andreades CEO 4
Slide 5: Business Update at the half year stage
Business Update at the half year stage • Growing Initial Licence Fee (ILF) signings for the half year at USD 31.9m (2003: USD 22.2m) up 44%. On track to deliver on our full year target of USD 68.0 m (2003: USD 51.0m) up 33% • Growth in Retail, Universal banking and Private banking and accross both T
Slide 6: New Signings
New Signings The following new deals were signed during the first quarter: – Bank for Agriculture and Agricultural Cooperatives (BAAC) in Thailand with IBM and Thai Equipment Research – Anglo Irish Bank Corporation in the UK and Ireland – Overseas Private Investment Corp. in the U.S. – Banque de Fra
Slide 7: Outlook
Outlook • We continue to see strong demand in Q3 where we target ILF at USD 11.0 million up 62% compared to last year and bringing nine months ILF at USD 42.9 million compared to USD 29.0 million for the same period last year (+47.9%). We maintain our full year ILF target at 68.0 million (+ 33.3% ye
Slide 8: Financial Results
Financial Results David Arnott CFO 8
Slide 9: Q2 & H1 2004 Financial Highlights
Q2 & H1 2004 Financial Highlights Revenue • Revenues at USD 37.3 million for the quarter, up 1.9% compared to the same period last year • Revenues at USD 77.0 million for the half year compared to USD 69.5 million for the same period last year, up 10.8% Operating costs • Operating costs at USD 33.8
Slide 10: Q2 & H1 2004 Financial Highlights - Cont
Q2 & H1 2004 Financial Highlights - Cont EBITDA • EBITDA at USD 7.0 million for the quarter compared to USD 5.9 million for the same period last year, up 20.0% • EBITDA at USD 15.0 million for the first half year compared to USD 10.8 million for the same period last year, up 39.1% Operating Profit •
Slide 11: Profit & Loss
Profit & Loss USD million Quarter ended June 30th Quarter ended Mar 31st 2004 2003 Growth 2004 Growth Revenues Licensing 15.2 15.4 (0.9)% 17.4 (12.7)% Maintenance 9.4 7.9 19.6% 8.9 5.9% Services 12.6 13.3 (5.2)% 13.4 (5.7)% Total Revenues 37.3 36.6 1.9% 39.7 (6.1)% Expenses Cost of Licences 1.0 2.5
Slide 12: Profit & Loss (Cont.)
Profit & Loss (Cont.) USD million 6 months ended June 30th % 2004 2003 Growth Revenues Licensing 32.7 27.7 17.8% Maintenance 18.3 15.2 20.5% Services 26.0 26.5 (2.0)% Total Revenues 77.0 69.5 10.8% Expenses Cost of Licences 2.9 3.5 (17.6)% Services 23.5 23.6 (0.6)% Software development 15.9 15.4 2.8
Slide 13: Currency Movements
Currency Movements USD millions Q2 2004 Q2 2003 % Revenue – as reported 37.3 36.6 1.9% Foreign Exchange Impact * 0.8 Revenue Adjusted for FX 37.3 37.4 0.3% Operating Expenses – as reported 33.8 34.5 (2.1)% Foreign Exchange Impact * 1.9 Operating Expenses Adjusted for FX 33.8 36.4 (7.1)% Net Currency
Slide 14: Currency Movements
Currency Movements USD millions H1 2004 H1 2003 % Revenue – as reported 77.0 69.5 10.8% Foreign Exchange Impact * 1.6 Revenue Adjusted for FX 77.0 71.1 8.3% Operating Expenses – as reported 69.8 66.4 5.2% Foreign Exchange Impact * 3.6 Operating Expenses Adjusted for FX 69.8 70.0 (0.3)% Net Currency
Slide 15: Cash Cost
Cash Cost USD million Q2 2004 Q1 2004 Q2 2003 Total Cost- As reported 33.8 36.0 34.5 Capitalised development 1.2 0.7 0.6 Depreciation & Amortisation (3.6) (3.3) (3.8) Total Cash Cost 31.4 33.4 31.2 Foreign Exchange Impact* n/a 0.9 1.8 Total Cash Cost Adjusted for FX 31.4 34.3 33.0 * Adjusted to Q2 2
Slide 16: Licencing Revenue Recognition
Licencing Revenue Recognition 100% 80% 60% percentage completion unbundled 40% 20% 0% 2001 2002 Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004 Matured product offering and business model as well as more use of third partners enables us to recognise revenues more on a milestone basis rather than per
Slide 17: Client Services
Client Services USD million H1 2004 H1 2003 Target Revenues 26.0 26.5 Costs 23.5 23.6 FX Adjustment n/a (0.6) Adjusted Margin 2.5 2.3 Adjusted Margin (%)* 9.8% 8.8% 15% - 17% Adjusted Margin (%) ** 11.9% 10.2% % Services to Total Revenues 33.8% 38.2% 30% - 35% *Adjusted to H1 2004 rate ** Adjusted t
Slide 18: Balance Sheet
Balance Sheet USD million June 04 Mar 04 Dec 03 Sept 03 June 03 Mar 03 Receivables 34.7 34.4 39.7 35.0 37.9 37.9 Accrued revenue 38.7 35.8 31.0 26.4 27.3 22.0 Less Deferred revenue (27.9) (31.1) (35.9) (23.9) (36.5) (33.3) Net 45.5 39.1 34.8 37.5 28.7 26.6 Cash 25.3 26.2 31.7 21.7 25.7 17.5 Unutilis
Slide 19: Q2 2004 Cash flow
Q2 2004 Cash flow USD million Qtr ended June 30th 2004 2003 Last 12months Cash at beginning of period 26.2 17.5 25.7 Operating cash flow 0.3 8.3 10.4 Capital spending (1.4) (0.8) (2.8) Debt repayment - - (10.0) Other (Financing costs, FX impact, 0.2 0.7 2.0 and minority interest etc) Cash at end of
Slide 20: Quarterly Operating Cashflows
Quarterly Operating Cashflows Quarter Amount Quarter Amount Quarter Amount Q1 2004 (1.4) Q1 2003 (3.4) Q1 2002 (4.5) Q2 2004 0.3 Q2 2003 8.3 Q2 2002 4.1 Q3 2004 Q3 2003 (1.4) Q3 2002 (12.8) Q4 2004 Q4 2003 12.9 Q4 2002 8.4 TOTAL TOTAL 16.4 TOTAL (4.8) • Operating cashflow for the quarter impacted by
Slide 21: TEMENOS Signings targets
TEMENOS Signings targets USD 51.0 million USD 68.0 million USD 22.2 m USD 28.8 m USD 31.9 m USD 36.1 m + 44% + 25% 25.10 22.00 15.70 16.20 14.00 11.00 8.20 6.80 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04E Q4 04E 21
Slide 22: Financial Guidance - 2004
Financial Guidance - 2004 2004 • We continue to target revenues for 2004, gross of third party licence, in the range of USD 158 million to USD 168 million. • We continue to target to deliver an EBITDA in the range of USD 32-37 million in 2004 and an EBIT in the range of USD 17-22 million in 2004. •
Slide 23: Additional slides
Additional slides TEMENOS ™ THE BANKING SOFTWARE STANDARD
Slide 24: EBITDA – Reconciliation to the midpoint of the Guidance
EBITDA – Reconciliation to the midpoint of the Guidance H1 2004 H2 2004 2004 H1 2003 H2 2003 2003 15.0 m 19.5 m 34.5 m 10.8 m 14.4 m 25.2 m 43.5% 56.5% 100.0% 42.9% 57.1% 100.0% 60.0% 56.5% 57.1% 50.0% 43.5% 42.9% 40.0% 30.0% 20.0% 10.0% 0.0% H1 2004 H2 2004 H1 2003 H2 2003 24
Slide 25: Research & Development
Research & Development USD million Q2 2004 Q1 2004 Q2 2003 R&D costs – As reported 7.5 8.4 7.6 FX Adjustement n/a (0.1) 0.6 Adjusted R&D costs 7.5 8.3 8.2 Capitalised Development costs 1.2 0.7 0.5 Non Cash items (2.2) (2.2) (2.7) Cash R&D costs 6.5 6.8 6.0 Less: Funded development (0.1) (0.5) (1.0)
Slide 26: Sales & Marketing
Sales & Marketing USD million Q2 2004 Q1 2004 Q4 2003 S & M costs – As reported 6.8 6.6 5.3 FX Adjustment n/a 0.0 0.3 6.8 6.6 5.6 • Quarter on quarter impacted by seasonality and investment in new territories 26
Slide 27: General & Administrative
General & Administrative USD million Q2 2004 Q1 2004 Q2 2003 G&A costs – As reported 6.3 7.0 6.2 FX Adjustment n/a 0.0 0.3 6.3 7.0 6.5 • We have largely absorbed growth led investment initiatives within the existing cost base 27