Temenos Ag · SIX:TEMN
Temenos — Investor Day (February 2020)
170 slides from Temenos's investor day presentation, Feb 13, 2020
Slide 1: Temenos Capital Markets Day 2020
ome CAPITAL iy 4 MARKETS TEMENOS | DAY 2020
Slide 2: Agenda
Agenda Time Session Presenter 09:15 – 09:45 Vision & Strategy Max Chuard, Chief Executive Officer Mark Winterburn, Chief Product and Technology Officer 09:45 – 10:30 Product Leadership Part 1 Temenos Infinity: Brian Abele, Product Manager Temenos Transact: Alex Duret, Product Director 10:30 – 10:50
Slide 3: Vision and strategy
Vision and strategy Max Chuard, CEO 13th February, 2020
Slide 4: Excellent performance across KPIs in FY 2019
Excellent performance across KPIs in FY 2019 Total Software Licensing EPS Saas Revenues 445 67 3.47 373 2.95 316 2.45 256 2.07 214 1.73 31 1.44 148 21 9 10 8 USDm 2014 2015 2016 2017 2018 2019 USD 2014 2015 2016 2017 2018 2019 USDm 2014 2015 2016 2017 2018 2019 Note: figures are non-IFRS c.c. growth
Slide 5: A business model that has delivered strong growth
A business model that has delivered strong growth 500 Total Software Licensing Significant addressable market of USD 60bn growing at 8% CAGR 400 The leader 300 in our market 200 Sustainable total software licensing growth of 15%+ in the long term 100 ACV bookings growing 4x faster 0 than license boo
Slide 6: Banking is undergoing a fundamental change
BANKING IS UNDERGOING A FUNDAMENTAL CHANGE
Slide 7: Technology is revolutionizing banking
TECHNOLOGY IS REVOLUTIONIZING BANKING SAAS & CLOUD API-FIRST MICROSERVICES EXPLAINABLE AI SECURITY DATA & ANALYTICS
Slide 8: New business models require a new banking architecture
NEW BUSINESS MODELS REQUIRE A NEW BANKING ARCHITECTURE MANUFACTURING DISTRIBUTION
Slide 9: The new banking architecture; agile, cloud-native & cloud-agnostic
The new banking architecture; agile, cloud-native & cloud-agnostic Distribution Services Manufacturing Services 9
Slide 10: End-to-end transformation is essential
END-TO-END TRANSFORMATION IS ESSENTIAL DIGITAL FRONT OFFICE BACK OFFICE
Slide 11: Our high-performing clients
OUR HIGH-PERFORMING CLIENTS Achieve Achieve Allocate IT spend cost-income ratios returns on equity 2x industry half the 3x industry average to growth industry average average & innovation 11
Slide 12: We have the winning combination
WE HAVE THE WINNING COMBINATION BEST ADVANCED FUNCTIONALITY TECHNOLOGY
Slide 13: Outselling the competition
Outselling the competition Old legacy New legacy Cross-industry rather than banking- THE COMPETITION New digital entrants with a cloud-only specific, broad functional scope but not offering; a technology toolkit with fit for the era of cloud, AI & DevOps limited functional scope WHY WE WIN Fit for
Slide 14: Our unique value proposition
Our unique value proposition Only focused on banks, Leading functionality, Open & independently 3,000+ banking localisation and implementable customers advanced technology products Relentless focus Continuous & Network of 6,500+ on innovation faster deployment consultants 14
Slide 15: Structural trends are driving market growth
Structural trends are driving market growth 70 Banks will increase the Third Party Software USD 60bn spend at a CAGR of 8% 2020 – 2022 60 USD 57bn 50 Core banking growing at 7% CAGR for 2020-2022 40 USD bn 30 Digital front office growing at 8% CAGR for 2020-2022 20 USD 13bn USD 14bn 10 Payments grow
Slide 16: Strategic initiatives to drive growth
Strategic initiatives to drive growth Enhance Geographic Investing in Sales An expanding Using M&A to award winning market and marketing, partner accelerate solutions development Cloud/SaaS and ecosystem organic growth Talent and people 16
Slide 17: Excellent progress in 2019
Excellent progress in 2019 Enhance award Geographic market Investing in Sales and An expanding Using M&A to winning solutions development marketing, Cloud/SaaS partner ecosystem accelerate organic and Talent and people growth Cloud-based 68% 6,500 partner microservices Significant traction increase
Slide 18: We benefit from five engines of growth
We benefit from five engines of growth 2022 third party CAGR spend (USD bn) 2020-2022 ALL DEPLOYMENT OPTIONS $5.1 7% $5.9 8% $3.3 10% $1.6 8% On- premise Source: IDC, Celent, Ovum, Temenos estimates Note: 2022 addressable market increased due to opening of new markets including fraud and new spendin
Slide 19: Exceptional momentum in SaaS and Cloud
Exceptional momentum in SaaS and Cloud 50+ 1,000+ Core banking clients Clients use Temenos SaaS services (52% increase vs 2018) (+125% vs. 2018) 42% 68% ACV of all new deals are Cloud growth in 2019 (new clients sales) (average contract term c. 3.5 years) 2011 2012 2013 2014 2015 2016 2017 2018 2019
Slide 20: A tectonic shift in growth acceleration
A tectonic shift in growth acceleration License bookings ACV bookings equivalent* ~100m ~100m ~0m 1m 1993 2012 2016 2020E *see appendix for definition
Slide 21: Driving growth in the US
Driving growth in the US 38% revenue growth and 50% headcount growth in the US, 57% increase in sales headcount in the US Temenos Infinity enhanced through Kony and Avoka, extensive SaaS and digital expertise and local market knowledge Building pipeline for Infinity and Transact across client tiers
Slide 22: The ecosystem advantage: customer success at scale
THE ECOSYSTEM ADVANTAGE: CUSTOMER SUCCESS AT SCALE 8,000 100+ Temenos Team Fintechs 6,500 Experienced Partner Consultants 12,000+ Developer Community Members 1 bank going live every day on Temenos software 500m Bank customers 3,000+ relying on Temenos Customers software every day
Slide 23: Temenosity
TENACITY TEMENOSITY VELOCITY RESPONSIBILITY AUTHENTICITY COMMUNITY
Slide 24: ESG leadership drives value creation
ESG leadership drives value creation E S G ENVIRONMENT SOCIAL GOVERNANCE Environmental Digital Inclusion & Ethical Business Conduct & Management Innovation Governance Climate Change & Carbon Gender Diversity & Equal Responsible Neutrality Opportunity Procurement Employee Information Security, Data V
Slide 25: We have reached the $1bn inflection point
We have reached the $1bn inflection point 14 years 1bn 5 years 5bn 15 years 1bn 6 years 5bn 22 years 1bn 6 years 5bn 10 years 1bn 6 years 5bn 9 years 1bn 6 years 5bn *figures rounded 25
Slide 26: Temenos Capital Markets Day 2020
ome CAPITAL iy 4 MARKETS TEMENOS | DAY 2020
Slide 27: Product leadership
Product leadership Mark Winterburn, Chief Product and Technology Officer
Slide 28: 25 years of leadership in banking software
25 years of leadership in banking software REVOLUTIONARY AGNOSTIC TECHNOLOGY Client Server Multi-Tier Cloud Ready Cloud Native 1993 2003 2013 2019 EVOLUTIONARY PACKAGED FUNCTIONALITY 28
Slide 29: Deployment options: SaaS, public cloud, hybrid
Temenos Software Risk & Compliance Data Lake Temenos Runs Software Client Runs Software Temenos SaaS Public Cloud Hybrid Cloud Like On Premise 29
Slide 30: Applications into Microservices
Applications into Microservices Separation of solutions into 2019 2020 Infinity Distribution Services Transact Microservices 30
Slide 31: Delivered using Continuous Deployment
Delivered using Continuous Deployment Temenos Model Bank MarketPlace provider updates software & updates Temenos Continuous Assemble Integration/testing Development (TCD) Bank Production Developers Extend Release Development Deployment Bank code and tests Build in the morning, consume in the afterno
Slide 32: Significant investment in innovation
Significant investment in innovation MARKET DRIVERS Banking Market Technology New Industry Model Parallel Industry Changes Changes Competitors Changes Innovations Customers Prospects Partners Staff PRODUCT INPUTS Rational Rational PRODUCT MANAGER REVIEWS PRODUCT MANAGER PROPOSAL PRODUCT BOARD Core R
Slide 33: Functional Investments
Functional Investments DISTRIBUTION SERVICES MICROSERVICES Open omni-channel services Standalone functionality Independently deployable Independently deployable Multiple cores, multiple channels Partial upgrades 77 FURTHER FUNCTIONAL ANNOUNCEMENTS TO OUR SALES FORCE IN JANUARY 2020 Infinity Transact
Slide 34: The five drivers of growth
| The five drivers of growth ¥* TEMENOS 4. TEMENOS Infinity Transact 4 TEMENOS Saas 4 TEMENOS q*. TEMENOS Fund Administration Payments QW TEMENOS 34
Slide 35: Temenos Infinity
Temenos Infinity Brian Abele, Product Manager
Slide 36: The digital front office market opportunity
The digital front office market opportunity Digital front office is the platform for marketing to, acquiring and servicing customers of the bank Medium term spend of $5.9bn growing at 8% CAGR Our product offering is Temenos Infinity Our value proposition is an omni-channel full service platform AI,
Slide 37: Competitive landscape
Competitive landscape Backbase Q2 EdgeVerve Crealogix Digital Front to Back Distribution based Architecture Crosses all Banking Verticals Proven Digital Onboarding with Journey Analytics Extensive partner ecosystem 37
Slide 38: A holistic Digital Banking capability
A holistic Digital Banking capability Retail Gig and Wealth Small & Enterprise or Small Medium Corporations Business Business 38
Slide 39: How banks use Temenos Infinity
How banks use Temenos Infinity Customers Branch & Support Product Owners Technology 39
Slide 40: The banking value chain
The banking value chain Channels Distribution Manufacturing 3rd Party 3rd Party 3rd Party Applications Distribution Manufacturing Experience APIs B2B Interfaces Infinity Apps Infinity Services Transact 40
Slide 41: A bank without Temenos Infinity
A bank without Temenos Infinity Other Core A Core B Core C Core D Core n product systems Application Lost marketing High legacy drop-offs leads platform costs 41
Slide 42: A bank with Temenos Infinity
A bank with Temenos Infinity T1 Bank and/or Temenos Infinity Channels Mobile Internet Call Centre Branch Agent Chat API’s Temenos Infinity Distribution Services Marketing, Sales and Servicing API’s Other product Core A Core B Core C Core D Core n systems 42
Slide 43: Distribution Microservices
Microservice based Origination Onboarding Marketing Payment Catalogue Initiation Real-Time Funds Engagement Authorization Distribution Holdings & Microservices Multi-Party Arrangements
Slide 44: Distribution Microservices – key value statements
Distribution Microservices – key value statements Personalization & Explainability Deployment & Cost of Operation Time to Market Scalability & Availability Adoption of New Business Models
Slide 45: Temenos Transact
Temenos Transact Alex Duret, Product Director
Slide 46: The core banking market opportunity
The core banking market opportunity Core banking is the transaction processing and position keeping system of the bank Medium term spend of $5.1bn growing at 7% CAGR Our product offering is Temenos Transact Our value proposition is to deliver a faster and cheaper transformation through technology in
Slide 47: Competitive landscape
Competitive landscape Infosys Oracle Sopra Mambu Global, all segments Integrated, end-to-end Cloud native, cloud agnostic Upgrade path Localization 47
Slide 48: Introducing New Microservices
Introducing New Microservices Large and complex banks often maintain intricate and ageing core systems built on obsolete technologies. Their replacement should be a priority, but can prove difficult to justify in immediate payback or risk. Transact microservices architecture enables large bank
Slide 49: Temenos Transact Microservices
Temenos Transact Microservices Temenos Transact Standalone microservices Accounts Enterprise Enterprise Retail Lending & Deposits Product Hub Pricing Hub Embedded modules Trade Finance Forex Etc.
Slide 50: Temenos Transact vs. T24
Temenos Transact vs. T24 Simplify upgrades and speed up adoption of new features Enable progressive renovation of complex, legacy core platforms Deliver enterprise services
Slide 51: Where is the value?
Where is the value? Small banks: full Transact deployment, SaaS Middle tier: full Transact deployment, partial upgrades Tier 1-2 banks: individual microservices, unlock the value of Temenos software
Slide 52: Temenos Transact in 2020
Temenos Transact in 2020 Micro Corporate Retail User services Banking Banking Experience Leading Heavy More pricing New user technology investment into and lending experience for T1 banks a new, capabilities to based on Kony for disruptors competitive, consolidate our technology to for any client mo
Slide 53: Temenos Capital Markets Day 2020
ome CAPITAL iy 4 MARKETS TEMENOS | DAY 2020
Slide 54: SaaS and cloud
SaaS and cloud Colin Jarret, Chief Cloud and Delivery Officer
Slide 55: The SaaS and cloud market opportunity
The SaaS and cloud market opportunity SaaS and cloud enable banks to use our solutions in a cloud environment which can be run by Temenos Applicable across all Temenos products Our product offering is Temenos SaaS, supported by our Temenos cloud services Our value proposition is an enabling banks to
Slide 56: Competitive landscape
Competitive landscape Mambu Fidor Finastra Infosys Avaloq Global presence with regional customization Extensive product offering Cloud Native capabilities for core services Robust API architecture Extensive partner ecosystem** We compare fa
Slide 57: Exceptional momentum in SaaS and cloud
Exceptional momentum in SaaS and cloud 50+ 1,000+ 42% 68% ACV Core banking Clients use Temenos of all new deals growth in 2019 clients SaaS services are Cloud (average contract term (52% increase vs 2018) (+125% vs. 2018) (new clients sales) c. 3.5 years) 2011 250+ First Temenos Temenos Cloud Cloud
Slide 58: Temenos SaaS: investment in operating capabilities
Temenos SaaS: investment in operating capabilities Cloud Platform Release & Governance, Risk & Customer Success Implementation Compliance Management Client Relationship Application Temenos Certification & Management Management Client Relationship Continuous Compliance Management Deployment Professio
Slide 59: SaaS on the rise globally
SaaS on the rise globally In 2019, public cloud spend is set to reach $21.5bn $21.5bn in banking, growing at a projected 22% annually (IDC). 15% Worldwide, 15% of bank applications are already running on the cloud. 36% of retail banks top new proposition for innovation is building their own greenfie
Slide 60: US banking market dynamics
US banking market dynamics Interest rate environment fueling the need for low cost deposit growth Growing number of banks launching digital only, affinity brands Rising FinTechs are creating “deposit run-off” pressure Complexity of US regulatory environment
Slide 61: Temenos announces the launch of its US SaaS solution
21st Jan 2020 Temenos announces the launch of its US SaaS solution for new digital banks
Slide 62: Built for US banking landscape
Built for US banking landscape Front-to-back Out-of-the-box Continuously Deployed
Slide 63: Service and functionality
Service and functionality PRODUCTS SERVICES CHANNELS Checking accounts On-boarding Mobile Savings accounts Origination Internet MMDA accounts Account servicing API CDs Card mgmt Bill Payments ACH Payments FCM Analytics
Slide 64: Service and functionality – future additions
Service and functionality – future additions PRODUCTS SERVICES CHANNELS Checking accounts On-boarding Mobile Savings accounts Origination Internet MMDA accounts Account servicing API CDs Card mgmt Chat Consumer Lending Bill Payments Business accounts ACH Payments Rewards FCM Analytics Fedwire
Slide 65: Best technology, best service
BEST TECHNOLOGY BEST SERVICE Using marking leading Market leader in core software including channels, banking in the cloud core, FCM, analytics Longest tenure Microservices and API Experience in regulated architecture markets Stable of success stories and references Secure and resilient Expertise of
Slide 66: Technology
Technology Tony Coleman, Cloud Technology Director
Slide 67: The banking technology market opportunity
The banking technology market opportunity Technology is the enabler for banks to deliver an exceptional customer experience Our technology permeates all Temenos solutions Our value proposition is to provide banks platform choice with cloud native, cloud agnostic, API-first software, which can be del
Slide 68: Banks need technology to deliver an exceptional customer experience
Banks need TECHNOLOGY to deliver an EXCEPTIONAL CUSTOMER EXPERIENCE
Slide 69: Delivering exceptional customer experiences
Delivering exceptional customer experiences Multi-Device DISTRIBUTION MANUFACTURING Omni-Channel Continuous Security Continuous Operations APIs APIs Performance Platform Choice Analytics / Reporting Smart Data Lake Risk / Compliance 69
Slide 70: Temenos delivering exceptional customer experiences
Temenos delivering exceptional customer experiences Risk & Compliance Distribution Data Lake Manufacturing Continuous Security Continuous Operations Performance Platform Choice 70
Slide 71: Temenos software deployment options
Temenos software Risk & Compliance Data Lake Temenos Runs Software Client Runs Software Temenos SaaS Public Cloud Hybrid Cloud Like On Premise 71
Slide 72: Google Anthos, VMware Tanzu: Multi-Cloud, Managed
Google Anthos, VMware Tanzu: Multi-Cloud, Anthos is Google Cloud’s hybrid and Managed multi-cloud application platform. Run anywhere; in the cloud, on-premise, hybrid or on multiple clouds. A single pane of glass to manage deploy and run Public Cloud VMware’s Tanzu represents a growing portfolio of
Slide 73: What's new
What’s new Platform Distributed Choice Multi-Cloud Loosely Coupled Cloud Native Event Driven Cloud Agnostic Distributed Architecture 73
Slide 74: Temenos Data, Analytics, and AI
Temenos Data, Analytics, and AI Prema Varadhan, Chief Product Architect
Slide 75: The Data & Analytics, and AI market opportunity
The Data & Analytics, and AI market opportunity Data, Analytics, and AI enables banks to gain deeper insights into customer behaviour and increase revenues Embedded within all Temenos products, making existing products more valuable, and enabling of creation of next generation banking solutions Our
Slide 76: Full complement of Data, Analytics, and AI capabilities
Full compliment of Data, Analytics, and AI capabilities Profit Journey Application Campaign Risk Analytics Analytics Analytics Analytics Analytics Customer Data Protection Data Innovation End-to-end Analytics Data Foundation Financial Fund Other data/ Infinity Transact Crime Mitigation Management Un
Slide 77: Competitive position – Temenos Analytics
Competitive position – Temenos Analytics Other analytics providers Web native, cloud agnostic platform for development and distribution of analytics and reporting Hundreds of out of the box banking dashboards, KPIs, analytics, and reports for all banking verticals Embedded Analytics allowing
Slide 78: Competitive position – Temenos Data Lake
Competitive position – Temenos Data Lake Other data lake providers Natively built on state of the art big data technologies Provides seamless integration with Temenos core banking system both on real time and batch Recipient of continuous R&D for next generation connectors Completely aut
Slide 79: Why AI is better
Why AI is better PERSONALIZED ADAPTABLE vv ACCURATE vv SCALABLE INTEGRATED Eliminates high Adapts Removes human ML makes Can be level rules and automatically as bias from the decisions in a integrated into provides the business, decision making fraction of a applications and personalized customers,
Slide 80: Embedding AI into Temenos software
Embedding AI into Temenos software Current Q1 2020 Q2 2020 XAI Platform Smart Wealth Advice Next Best Product SME Credit Scoring Customer Attrition Portfolio Optimization Credit Score with Retail Credit Scoring Customer Lifetime Value Preapproved Loan Amount Automatic Alert Evaluation + Peer Group I
Slide 81: Temenos AI embedded across the board
Temenos AI embedded across the board Risk & Next Best SME Credit Portfolio Distribution Credit Score Compliance Product Scoring Optimization with Preapproved Cash Flow Smart Wealth Retail Credit Loan Amount Automatic Alert Personalization Prediction Advice Scoring Evaluation + (FCM) Peer Group Trans
Slide 82: Temenos AI embedded across the board
Temenos AI embedded across the board Risk & Next Best SME Credit Portfolio Credit Score Compliance Product Scoring Optimization with Preapproved Cash Flow Smart Wealth Retail Credit Loan Amount Automatic Alert Personalization Prediction Advice Scoring Evaluation + (FCM) Peer Group Transaction Transa
Slide 83: The explainability of AI decisions
The explainability of AI decisions An XAI or Transparent AI or Interpretable AI is an AI whose models and actions can be easily understood and analyzed by humans. TRANSPARENCY CAUSALITY BIAS FAIRNESS SAFETY Leaders may not invest in AI if they can’t see Companies will be at a competitive evidence of
Slide 84: Temenos XAI is uniquely positioned
Temenos XAI is uniquely positioned Other XAI Data driven models Fully Transparent models Fully auditable rules Integrate human experience to augment and edit Governance AI predictions mirroring human intuition Unique patented techniques Temenos delivers the only fully tra
Slide 85: AI models
AI models Customer Attrition Miminize customer churn by more than 20% while allowing optimising the customer offers Personalization Drive targeted campaigns through recognising unusual contextualised events and offering appropriate services SME Credit Scoring Reduce risk and increase new business Sm
Slide 86: Temenos Capital Markets Day 2020
ome CAPITAL iy 4 MARKETS TEMENOS | DAY 2020
Slide 87: Infinity Customer Solutions Demos
Infinity Customer Solutions Demos Holger Lehmann, Business Solutions Group Ed Gross, Global Design Centre of Excellence
Slide 88: Partners Federal Credit Union
Partners Federal Credit Union Americas: United States
Slide 89: $1.8BN AUM servicing Disney Cast
$1.8BN AUM servicing Disney Cast. Serving a community that has mastered the art of creating dream-like experiences. Wanted to Gain alignment with Disney brand. Grow wallet share of existing members. Show members that they are valued.
Slide 90: Demonstration: Partners
Demonstration Partners! “PARTNERS? FEDERAL CREDIT UNION Welcome to Partners! testaccountl Standard Level Standard = Standard Bronze Less than $2,500 Calculated by Combining Deposit, Loan, Partners Retirement, and Wealth Management Balance Excluding Certificates Partners/CO-OP/ CU24ATM Unlimited Tran
Slide 91: Results Powered by Temenos
Results Powered by Temenos: From 2.2 to 4.6 star rating in app stores 80% of non-cash transactions done through digital channels, reducing operating costs significantly. 16% growth of mobile users in 2019. 4 releases in 4 months, enhancing functionality with every release.
Slide 92: HSBC Credit Card Onboarding & Origination
2.5 Trillion AUM HSBC Credit Card Onboarding & Origination Goals Rapid time to market Platform & Solution Flexibility Connectivity to Ecosystem Customer Experience
Slide 93: Demonstration: HSBC
Demonstration: HSBC • Rapid Journey Implementation & Refinement • Powerful Integrations • Flexible User Journey • Consistent, Simple, Engaging User Experience 93
Slide 94: Demonstration: HSBC Journey Analytics
Demonstration: HSBC Journey Analytics 94
Slide 95: Results Powered by Temenos
Results Powered by Temenos: 4x to 5x in origination volume. Exceeded plan by 50% + 75% Straight through processing
Slide 96: Australia: Credit Union of Australia
Australia: Credit Union of Australia
Slide 97: They Know Best In Class…
They Know Best In Class… Australia’s largest credit union with 550k members and US$10bil funds under management Need to out-innovate rather than out-spend Australia’s 4 dominant banks to continue to thrive 3 different vendors to achieve best in class: 1. Customer On-Boarding 2. Mobile Banking 3. Rel
Slide 98: Demonstration: CUA Journey Manager
Demonstration CUA: Journey Manager 98
Slide 99: Demonstration: CUA Account Servicing
Demonstration CUA: Account Servicing Payee Setup Example Pre-configured low-code banking objects and templates, supporting: • Accounts and Transaction Details • Account Info and Transaction Search • Payments and Transfers • Pay ID and BPay – a local AU Service • Apple, Samsung & Google Pay • In-app
Slide 100: Demonstration: CUA Engage
Demonstration: CUA Engage 100
Slide 101: Results Powered by Temenos
Results Powered by Temenos: 10% Member growth over 24 months with 70% less manual processing 40% growth in Mobile Banking adoption 220% increase in payments via Mobile 20k Engage Users with 50k 2020 target 1 Agent Outsold 8 Branches in a Week Product holding of 1.9 vs 3.1 (iMCUA)
Slide 102: Temenos Capital Markets Day 2020
ome CAPITAL iy 4 MARKETS TEMENOS | DAY 2020
Slide 103: Temenos Value Benchmark
Temenos Value Benchmark Kanika Hope, Global Strategic Business Development Director
Slide 104: Introduction to the Temenos Value Benchmark
Introduction to the Temenos Value Benchmark
Slide 105: IT is now a Driver rather than an Enabler of banking
105 IT is now a “Driver” rather than an “Enabler” of the Banking Business Model AI/Machine Mobile Social Cloud Big Data Learning Blockchain Disruptive Technologies driving Industry Transformation What is the value of IT ? External Cost & Efficiency Pressures + Historic Underinvestment in IT + Busine
Slide 106: Key questions that banks face regarding their IT investments
106 Key questions that banks face regarding their Business-led IT investments Differentiate between Prioritize IT investments? innovation and non- discretionary spend? Build or Buy? ? Balance between short-term and long-term? Include both business and IT Balance speed of project benefits in business
Slide 107: Temenos Value Benchmark Program
107 Temenos Value Benchmark Program Bank A strategic survey-based program to discuss business performance and value creation enabled by our clients’ investment in IT, structured around business and IT metrics and qualitative best practices Complete confidentiality - Bank-specific report with anonymo
Slide 108: Four key factors position Temenos to offer value benchmarking
Four key factors position Temenos to offer a compelling value benchmarking service to banks 1 2 3 4 Banking is Market Proven First all we do! leader methodology mover This is a zero risk engagement for me to identify how I can improve my business. I don’t see this benchmark as another sales tool tha
Slide 109: Temenos Value Benchmark Performance Analysis Framework
109 Temenos Value Benchmark Performance Analysis Framework Banking Value Chain Sales & Product Operations & Payments & Risk & 1 2 Marketing 3 Relationship 4 5 6 Management Execution Settlement Compliance Company Management Profile 7 Reporting & Analytics 8 IT Example of quantitative metrics Example
Slide 110: Temenos Value Benchmark in Numbers
Temenos Value Benchmark in Numbers 46 banks 32 countries 3 banking verticals– completed in 5 regions Retail, Corporate, Wealth 35 banks 714 hours of on-site 85 C-level and 421 analysed consulting senior executives met 10,179 quantitative and 10,374 qualitative data points collected 110
Slide 111: Insights: Industry Trends and Capabilities
Insights: Industry Trends and Capabilities
Slide 112: Front-to-back digitization
Participants confirm that Front-to-back Digitization and Analytics are key capabilities required to compete in the industry today Digitally augmented customer experience 91% 89% 93% 80% 69% Omni-Channel Contextual Mass personalization Open banking FRONT OFFICE user-experience Harmonized, seamless, T
Slide 113: Our top performing clients significantly outperform the industry
Our top performing clients significantly outperform the industry Cost-Income Ratio Return on Equity 55.6% 59.0% 29.0% ~2.2x 16.4% 26.8% ~3.0x 9.5% Temenos Temenos Average Global Average2 Temenos Temenos Average Global Average3 Top Quartile1 Top Quartile1 1. Refers to average of top quartile of banks
Slide 114: Our top performing clients spend double their IT on growth & innovation
Our top performing clients spend double their IT on growth & innovation Retail IT spend on growth and innovation1 100% 100% 100% 49% Maintenance3 67% 75% 51% 27% Growth and Innovation 33% 25% Global Average2 Bottom Quartile Average Top Quartile Quartiles by Cost-Income Ratio Temenos invests in commo
Slide 115: Drivers of Banking performance
Drivers of Banking performance Performance indicators Cost-Income Ratio Return on Equity Innovation Effective Risk Performance Customer Operational Advanced and and Analytics drivers Centricity Efficiency Analytics Growth Compliance A % IT spend on A % Digitally active A A A % Risk & Compliance staf
Slide 116: Insights: Drivers of Banking performance
Insights: Drivers of Banking performance
Slide 117: Customer centricity
Customer centricity Customer Centricity: operational metrics driven by Temenos solution enablers A B 3rd party % Digitally active customers Mobile Internet Branch Call Centre RM APIs Loan origination time Infinity chat-bot • Single rules engine and single Channels • Omni channel capability point of
Slide 118: Banks with single rules engine have more digitally active customers
A. % Digitally active customers Customer centricity Banks with single rules engine and point of integration to channels have more digitally active customers Retail Digitally active customers vs Single rules engine and channel integration best practice1 100 5 80 72 4 60 3 40 2.4 29 1.9 1.6 2 20 5 0 1
Slide 119: Banks that run Temenos front-to-back are more efficient
Banks that run Temenos front-to-back are more efficient Retail Onboarding Customers per FTE Front Office staff time Transact only customers duration2 (min) on admin tasks 600 351 39% ~0.3x ~1.7x ~0.8x Transact + Infinity customers1 191 594 31% 1. Those participants that are live on some front office
Slide 120: What a client gets
| What a client gets @ TEMENOS
Slide 121: Detailed insights on trends, metrics and best practices
Detailed insights on trends, quantitative metrics and qualitative best practices A 100+ page detailed report DRIVERS of banking QUALITATIVE BEST QUANTITATIVE METRICS 1 performance & 2 comparison by domain 3 PRACTICES INDUSTRY TRENDS comparison by domain • Identification of key operational drivers of
Slide 122: Temenos Value Benchmark Impact
Temenos Value Benchmark Impact
Slide 123: Temenos Value Benchmark demonstrates business value to clients
Temenos Value Benchmark demonstrates business value to clients Approach Impact Use Temenos Value Benchmark to: Existing clients Provide tangible business value by assessing how IT enables their business performance vs other Temenos Leverage Temenos unique client clients global network to build t
Slide 124: Building an RoI model from the Benchmark
Building an RoI model from the Benchmark Business Case Structure Source Temenos Value Benefits from Benchmark Temenos • Temenos license • Hardware costs Cost of Sales + Client RoI • Migration Temenos • Hosting/SaaS fees • Application mgmt. (internal and external) • Training of business users and IT
Slide 125: Temenos Capital Markets Day 2020
ome CAPITAL iy 4 MARKETS TEMENOS | DAY 2020
Slide 126: The US opportunity
The US opportunity Alexa Guenoun, President of the Americas & Global Head of Partners
Slide 127: A growing US presence
A growing US presence A GROWING STRATEGIC PRESENCE ACQUISITIONS 700 Headcount in the US (up 50%) 7 Major Offices across the US Over 1,300 Referenceable US clients 127
Slide 128: The largest market globally
The largest market globally 30 USD 25bn 25 USD 23bn 20 USD bn 15 10 USD 7bn USD 6bn 5 - Total Addressable Market Third Party Spend Total Addressable Market Third Party Spend 2019 2020 Core Digital Front Office Payments Fund Admin Source: IDC, Ovum, Celent, Temenos estimates *Based on the new spendin
Slide 129: Strong drivers supporting investment in banking software
Strong drivers supporting investment in banking software DEPOSIT EMERGENCE OF DIGITAL- LAND-GRAB FIRST COMPETITION COMPLEX REGULATORY ENVIRONMENT OPERATIONAL COST INTEREST RATE PRESSURE PRESSURE 129
Slide 130: Kony has significantly strengthened our US GTM
Kony has significantly strengthened our US GTM #1 DIGITAL US MARKET LEADER BANKING SAAS ANALYST RECOGNISED PROVIDER IN THE US DIGITAL & CLOUD EXPERTISE Award winning DBX Functionally rich (US SaaS-centric, & MXDP Low code specific) & development & complement Infinity development technologically deli
Slide 131: US Bank Technology Strategy aligned to Temenos' portfolio
US Bank Technology Strategy: Aligned to Temenos’ Portfolio DISTRIBUTION SYSTEMS OF ENGAGEMENT Analytics XAI SYSTEMS OF INSIGHT Data Lake MANUFACTURING Payments SYSTEMS OF RECORD 1,300+ US INSTITUTIONS LIVE 131
Slide 132: US SaaS Offer
US SaaS Offer US SaaS solution for new digital banks: front-to-back, out of the box, continuously deployed Go live with end-to-end SaaS digital banking in just 90 days Strategically relevant given new digital entrants and deposits land-grab Early interest from the US market 132
Slide 133: US Go-to-market
US Go-to-market Majors ~30 $100B+ AUM ~30 $ Nationals ~100 $10B-$100B AUM ~100 $ Regionals ~1,000 $1B-$10B AUM, Credit Unions & Banks $ Digital Banks ~100 Digital-first & Digital Affinity Banks $ Funds & Wealth $85.3tn AUM Asset servicers, managers & owners, $ Wealth managers
Slide 134: US Go-to-market
US Go-to-market Majors Nationals DISTRIBUTION MICROSERVICES Marketing Payment Origination Onboarding Regionals Catalogue Initiation Real-Time Funds Holdings & Multi-Party Engagement Authorization Arrangements Digital Banks TRANSACT MICROSERVICES Funds & Wealth Accounts Retail Enterprise Enterprise &
Slide 135: Case Study: Varo Bank
Case Study: Varo Bank 135
Slide 136: Scaling sales in the US
Scaling sales in the US US Sales US sales coverage up An experienced US team 57% to c.70 people with proven success Partner Channels Technology Distribution
Slide 137: Temenos Capital Markets Day 2020
ome CAPITAL iy 4 MARKETS TEMENOS | DAY 2020
Slide 138: Creating shareholder value
Creating shareholder value Takis Spiliopoulos CFO
Slide 139: A sustainable and attractive business model
A sustainable and attractive business model 16 years 25% management board total software license average tenure revenue growth (CAGR) 64% Strong business $11.9bn total shareholder return model; market cap p.a. since IPO committed community $981m $318m FY 19 revenue FY19 EBIT Strong community of Corp
Slide 140: Sustained strong growth across revenue KPIs
Sustained strong growth across revenue KPIs… Total Software Licensing Recurring revenues 373 445 383 424 316 301 342 256 231 276 214 148 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 Saas Revenues * Total Revenues 67 981 841 737 31 559 635 21 469 8 9 10 2014 2015 2016 2017 2018 2019 20
Slide 141: … and delivering very robust profit growth
… and delivering very robust profit growth Non IFRS EBIT EBIT margin EPS 32.4% 318 31.5% 3.47 265 2.95 30.3% 224 29.4% 2.45 186 2.07 28.1% 157 1.73 128 27.3% 1.44 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 141
Slide 142: Business model generates strong cash-flow profile
Business model generates strong cash-flow profile Operating Cash Flow DSO 181 365 364 154 300 127 120 227 256 119 114 191 DSO days 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 * 16% CAGR if excluding 2019 cut-off ** 14 days if excluding impact from Kony and cut-off 2019 142
Slide 143: Disciplined capital allocation (2014-2019)
Disciplined capital allocation (2014-2019) Balance sheet (31-Dec-19) Weighted average interest rate 3.5% Share buyback - Outflow 29% Weighted average debt maturity 4 years Acquisition - Outflow Dividend - 60% Outflow 11% Leverage ratio 2.6x Targeted acquisitions for USD1.2bn+ and returned USD800m+ t
Slide 144: Using M&A to accelerate organic growth
Using M&A to accelerate organic growth Date Price (m) Capabilities Sep19 $580 Digital banking and low code development Jul 19 £12 Explainable AI Feb 19 N.D. Data lake Dec 18 $245 Digital front office Feb 17 $50 Core banking, wealth management Mar 15 $260 Fund and securities Feb 15 $55 Core banking,
Slide 145: Shareholder value creation
Shareholder value creation Since IPO on Total shareholder return 1 year 5 years 10 years 25/6/01 at CHF (USD, 31/12/19) 23 per share Temenos 33% 357% 548% 1,188% Swiss Performance Index 33% 48% 144% 372% Stoxx Euro 600 25% 33% 81% 208% Nasdaq 37% 101% 347% 399% Peer group average 27% 116% 382% 688%
Slide 146: Engines of growth
Engines of growth
Slide 147: An attractive and continuously growing market
An attractive and continuously growing market Total Addressable Market CAGR 6% Third Party Spend CAGR 8% 70 USD 60bn 60 USD 57bn 50 USD 48bn 40 USD bn 30 20 USD 16bn USD 14bn USD 13bn USD 10bn 10 - Addressable Market Third Party Spend Addressable Market Third Party Spend Addressable Market Third Par
Slide 148: Expanding our market opportunity
Expanding our market opportunity 18 16 14 Added Compliance Third Party Spend (USD billions) and Origination 12 capabilities Added Fund Administration 10 Added Payments 8 6 4 2 - 2007 2013 2015 2018 2022 Core banking Front Office Payments Fund Admin Wealth FO Source: IDC, Ovum, Celent, Temenos estima
Slide 149: Building momentum with tier 1 and 2 clients
Building momentum with tier 1 and 2 clients Non-IFRS total software licensing revenues by client tier 26% 43% 149
Slide 150: Building momentum in North America
Building momentum in North America Non-IFRS total software licensing, North America vs. Rest of World 10% 27% 150
Slide 151: Exceptional growth across all SaaS metrics
Exceptional growth across all SaaS metrics Annual Contract Value SaaS revenue 67 21 13 31 21 4 10 1 2016 2017 2018 2019 2016 2017 2018 2019 Total Contract Value Annual Recurring Revenue 102 76 53 54 25 5 9 11 2016 2017 2018 2019 2016 2017 2018 2019 151 Note: SaaS revenue 2016-2018 estimated for impa
Slide 152: A tectonic shift in growth acceleration
A tectonic shift in growth acceleration License bookings ACV bookings equivalent* ~100m ~100m ~0m 1m 1993 2012 2016 2020E *see appendix for definition
Slide 153: ACV bookings growth set to accelerate further
ACV bookings growth set to accelerate further 2019 license bookings growth* 2019 ACV bookings growth 2020E license bookings growth 2020E ACV bookings growth *run-rate Q4 2019
Slide 154: Growth contribution from SaaS is rising rapidly
Growth contribution from SaaS is rising rapidly Non-IFRS Software licensing vs. SaaS revenues SaaS contribution to overall Total SW licensing growth 5% 15% >60% 49% 5% 2018 2019 2024 154
Slide 155: Building blocks of mid-term growth and EBIT targets
Building blocks of mid-term growth and EBIT targets Licensing growth – Regional contribution EBIT margin improvement contribution APAC EUROPE NAM Others CAGR Op leverage, 2019 EBIT SaaS growth 2024 EBIT Other costs Maintenance growth expansion Services margin 2019-24 155
Slide 156: Building blocks of mid-term operating cash target
Building blocks of mid-term operating cash target Operating Cash growth DSO Reduction from 120 to 90 by 2024 120 90 2019 License SaaS Mix Services 2024 EBITDA Payable day cash 2019 Op DSO IFRS reduction cash reduction 2024 Op Deferred rev DSO DSO DSO 156
Slide 157: A three-pronged approach to M&A to accelerate organic growth
A three-pronged approach to M&A to accelerate organic growth Accelerated R&D Adjacent roadmap in key Increased markets and markets and scale complementary segments products
Slide 158: Sustainable annual growth targets
Sustainable annual growth targets
Slide 159: Sustainable annual growth targets
Sustainable annual growth targets Metric Sustainable long term annual targets (Non-IFRS) Total software licensing At least 15% CAGR Total revenue 10-15% CAGR EPS At least 15% CAGR Tax rate c. 20% Cash conversion 100%+ of EBITDA p.a. Medium-term targets DSOs 90 days EBIT Margin 36%+ Tax rate 18-20% 1
Slide 160: Temenos Capital Markets Day 2020
ome CAPITAL iy 4 MARKETS TEMENOS | DAY 2020
Slide 161: Corporate Social Responsibility
Corporate Social Responsibility Kalliopi Chioti, Director of Sustainability & Social Responsibility
Slide 162: 68 offices in 40 countries
8,000 68 offices in 90 people 40 countries nationalities
Slide 163: Our goal
OUR GOAL To grow our business in a way that takes care of the world around us, delivering value to anyone associated with us
Slide 164: The 3 dimensions of our CSR strategy
The 3 dimensions of our CSR strategy VALUE RISK CREATION MANAGEMENT Impact on Impact on business model operations COMMUNITY Impact on INVESTMENT society
Slide 165: Our priority areas
Our priority areas Governance: Social: Ethical Business Conduct & Digital Inclusion & Governance Innovation Responsible Procurement Gender Diversity & Equal Information Security, Data Opportunity Privacy & Resilience Employee Volunteering Environment: Environmental Management with 3rd
Slide 166: Our achievements
Our achievements SXI Dow Jones Switzerland FTSE4GOOD Sustainability MSCI Sustainability Index Index 2019 25® Index 5 Great Ecovadis Place to ISS E&S Gold Work recognitions
Slide 167: The right way, not just the easy way
We want to keep on doing what we know best THE RIGHT WAY, NOT JUST THE EASY WAY
Slide 168: Temenos Capital Markets Day 2020
ome CAPITAL iy 4 MARKETS TEMENOS | DAY 2020
Slide 169: Thank You
Thank You temenos.com
Slide 170: SaaS - Financial metrics definitions and reporting
SaaS - Financial metrics definitions and reporting Annual value of incremental business taken in-year (Bookings). Includes New Customers, up-sell/cross-sell. Only Annual Contract includes the recurring element of the contract and exclude variable elements. Value (ACV) Disclosure: quarterly reporting