Temenos Ag · SIX:TEMN
Temenos — FY2004 Earnings Presentation
27 slides from Temenos's earnings presentation, Feb 23, 2005
Slide 1: Financial Results & Business Update
Financial Results & Business Update Quarter ended December 31st, 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 3
Slide 4: Business Update
Business Update Andreas Andreades CEO 4
Slide 5: Business Update
Business Update • Fully diluted EPS for the full year 2004 of USD 0.26 per share (2003: USD 0.19) up 36.8% • EBIT for the full year 2004 at USD 17.4m (2003: USD 10.7m) up 62.5% • Growing Initial Licence Fee (ILF) signings for the full year 2004 at USD 62.0m (2003: USD 51.0m) up 22% – Growth in Retai
Slide 6: Business Update (Cont.)
Business Update (Cont.) Revenues (USD m) Costs (USD m) 157.7 Services 50.9 54.2 Maintenance 48.7 137.2 39.8 135.5 32.2 28 Licence 63.8 59.7 36.6 2004 2004 2004 2003 2002 2004 2003 2002 Headcount Fully Diluted EPS (USD per share) 0.26 1179 1224 1179 0.19 2004 2004 2003 2002 2004 2004 2003 2002 -0.95
Slide 7: Business Update (Cont.)
Business Update (Cont.) Working Capital (USD m) Operating Cash Flows (USD m) 15 15.9 16.4 9 2004 2004 2003 2002 2004 2003 2002 -1.5 -4.8 Investing Cash Flows (USD m) Net Cash (USD m) 30.8 2004 2004 2003 2002 26.7 -5.8 14 -12.2 -16.3 2004 2004 2003 2002 7
Slide 8: Business Update (Cont.)
Business Update (Cont.) Revenue – 2004 Revenue – 2003 ASIA ASIA 15% 14% AMERICAS AMERICAS 8% 13% EMEA 72% EMEA 78% Signings – 2004 Signings – 2003 ASIA ASIA 11% 25% AMERICAS 21% AMERICAS 6% EMEA EMEA 69% 68% 8
Slide 9: Business Update (Cont.)
Business Update (Cont.) Signings per segment – 2004 Signings per segment – 2003 Others 26% Others 44% Retail/Unive rsal 56% Retail/Unive rsal 74% Signings per tier - 2004 Signings per tier - 2003 Tier 1&2 29% Tier 1&2 Tier 4 42% 47% Tier 4 62% Tier 3 Tier 3 9% 11% 9
Slide 10: Business Update (Cont.)
Business Update (Cont.) Number of Clients New Client Additions in 2004 UBS, London Banque de France, Paris 407 Anglo Irish Bank, Dublin and London BAAC, Thailand Opic, Washington 382 RZB, Slovenia Sacom Bank, Vietnam 365 UNFCU Banco Sabadel Ukrsots, Ukraine KMB, Moscow CIB, Egypt 2004 2004 2003 2002
Slide 11: EPS Growth
Business Update (Cont.) EPS Growth 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% n/a -10.0% TEMENOS Average* DST Fiserv SAP Sungard i-Flex Misys 2003/2002 2004/2003 Source: JCF * Average is based on all the above companies. 11
Slide 12: Market & Business Outlook
Market & Business Outlook • Banks spending on core software continues to be strong and the main drivers are: – Technology and functionality in emerging markets – Strategic cost reduction and revenue growth in mature markets • We are starting to see more activity from Tier 1 European Institutions tha
Slide 13: Financial Results
Financial Results David Arnott CFO 13
Slide 14: Q4 & FY 2004 Financial Highlights
Q4 & FY 2004 Financial Highlights Earnings Per Share • Fully diluted EPS for the quarter of USD 0.13 per share compared to USD 0.09 per share for the same period last year, up 44.4% • Fully diluted EPS for the full year of USD 0.26 per share compared to USD 0.19 per share for the same period last ye
Slide 15: Q4 & FY 2004 Financial Highlights - cont
Q4 & FY 04 Financial Highlights - cont Revenue • Revenues at USD 40.6 million for the quarter, up 4.4% compared to the same period last year. Revenues at USD 154.6 million for the year compared to USD 146.2 million for the same period last year, up 5.7% • Revenues for 2004 include US$1.0 million rel
Slide 16: Profit & Loss
Profit & Loss USD million Quarter ended December 31 Twelve months ended December 31 2004 2003 Growth 2004 2003 Growth ILF Signings 19 22 (14)% 62 51 22% Revenues Licensing* 16.7 16.8 (0.0)% 63.8 * 59.7 6.9% Maintenance 10.9 8.6 26.2% 39.8 32.2 23.5% Services 13.0 13.5 (3.2)% 50.9 54.2 (6.1)% Total R
Slide 17: Currency Movements
Currency Movements USD millions Q4 04 Q4 03 % 2004 2003 % Revenue – as reported 40.6 38.9 4.4% 154.6 146.2 5.7% Currency impact n/a 1.2 n/a 4.5 Revenue Adjusted for FX 40.6 40.1 1.2% 154.6 150.7 2.6% Operating Expenses – as reported (32.4) (34.3) (5.5)% (137.2) (135.5) 1.3% Currency impact n/a (2.0)
Slide 18: Cash Cost
Cash Cost USD million Q4 2004 Q3 2004 Q4 2003 Total Cost- As reported 32.4 35.0 34.3 Capitalised development 3.4 1.3 1.1 T24 2.1 0.5 0.4 TCB 1.3 0.8 0.7 Depreciation & Amortisation (3.5) (3.6) (2.8) Total Cash Cost 32.3 32.7 32.6 Foreign Exchange Impact* n/a 0.5 1.4 Total Cash Cost Adjusted for FX 3
Slide 19: Cash Cost
Cash Cost USD million 2004 2003 Total Cost- As reported 137.2 135.5 Capitalised development 6.6 2.9 T24 2.7 1.7 TCB 3.9 1.2 Depreciation & Amortisation (13.9) (14.5) Total Cash Cost 129.9 123.9 Foreign Exchange Impact* n/a 4.8 Total Cash Cost Adjusted for FX 129.9 127.7 * Adjusted to 2004 rate, incl
Slide 20: Finantix Disposal
Finantix Disposal • Early in 2002, we acquired a 20% equity interest in Finantix for a consideration of USD 2.5 million with an option to acquire the remaining 80% • Option expired end of 2002 without exercise due to its unacceptably dilutive impact on TEMENOS shareholders. Investment written off at
Slide 21: Q4 2004 Cash flow
Q4 2004 Cash flow US$ million Qtr ended December 31, 2004 2003 Last 12months Net cash at beginning of period 17.1 14.2 26.7 Operating cash flow 22.6 12.9 15.9 Capital spending (9.3) (1.5) (12.2) Net financing costs (0.2) 0.1 (0.1) Other (FX impact, etc) 0.6 1.0 0.5 Net Cash at end of period 30.8 26.
Slide 22: Balance Sheet
Balance Sheet USD million Dec 2004 Sept 2004 Dec 2003 Receivables 52.3 39.8 39.7 Accrued revenue 22.6 40.9 31.0 Less Deferred revenue (34.6) (28.0) (35.9) Net 40.3 52.7 34.8 Other net current liabilities (25.6) (24.6) (25.7) Working Capital 14.7 28.1 9.1 Net Cash 30.8 17.1 26.7 • Post year end, we h
Slide 23: Outlook - 2005
Outlook - 2005 • We expect full-year 2005 Fully Diluted Earnings Per Share (EPS) to grow in the range of 20-25% compared to 2004 • The outlook is based on: – ILF signings in the range of USD 70-75 million – Tax rate of 16% – US$/Euro exchange rate of 1:1.35 • At current stock price level, TEMENOS co
Slide 24: Appendix
@ TEMENOS* Appendix
Slide 25: Client Services - FY 2004
Client Services - FY 2004 USD million 2004 2003 Target Revenues 50.9 54.2 Costs (47.7) (48.8) FX Adjustment n/a (0.1) Adjusted Margin 3.2 5.3 Adjusted Margin (%)* 6.3% 9.8% 15% - 17% % Services to Total Revenues 33.0% 37.0% 30% - 35% *Adjusted to 2004 rate 25
Slide 26: Research & Development
Research & Development USD million 2004 2003 R&D costs – As reported 28.0 30.1 FX Adjustment n/a 0.2 Adjusted R&D costs 28.0 30.3 Capitalised Development costs 6.6 2.9 T24 2.7 2.2 TCB 3.9 0.7 Non Cash items (9.0) (9.8) Adjusted cash R&D costs 25.6 23.4 T24 15.3 18.3 TCB 10.3 5.1 26
Slide 27: 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 (5.6) Q3 2003 (1.4) Q3 2002 (12.8) Q4 2004 22.6 Q4 2003 12.9 Q4 2002 8.4 TOTAL 15.9 TOTAL 16.4 TOTAL (4.8) • Operating cashflow volatity re