Geneva, Switzerland, 27 October 2010 – Temenos Group AG (SIX: TEMN), the market leading provider of core banking solutions, today reports third quarter 2010 results showing outstanding growth in license revenues on the back of market share gains and strong software demand.
Q3 Financial and Operating highlights
We are also very happy that our partner strategy is developing at a faster pace than we initially anticipated. We observe partners beginning to function as an additional sales channel, sourcing deals which closed in the quarter at an increasing pace. Furthermore, partners are also taking an increasing share of our implementation business and this will help us to scale our business and grow profits faster in the future.
Our leadership allows us to play the role of consolidator and we are very happy to have made our largest acquisition to date – one that will elevate us into the position of clear leader in the private wealth management market. Our success with our recent integration of Viveo has given us the experience and confidence to undertake larger acquisitions. As part of the Temenos organization, we believe that Odyssey will enjoy faster growth and bring enhanced value to all stakeholders.
Given our excellent performance year to date, we are well on track to meet our full year outlook, which we reiterate at this time.”
Revenue
Revenue for the third quarter was USD 104.0m, up from USD 88.6m in the same period last year, representing an increase of 17%. Licence revenue for the quarter was USD 37.7m, 41% higher than in 2009. For the LTM 2010, total revenue was USD 416.8m, up 11% on LTM 2009, with licence revenue at USD 143.2m, 9% higher than the same period last year.
Adjusted EBIT
Adjusted EBIT (EBIT before restructuring charges and amortization of acquired intangibles) was USD 29.2m in the quarter, 16% higher than in Q3 2009. Adjusted EBIT for the last twelve months was USD 102.5m compared to USD 88.5m in the prior period, representing a 16% increase. The adjusted EBIT margin was 28%, flat on the prior year, with LTM 2010 adjusted EBIT margin at 25%, 99 basis points higher than in the prior 12 months.
Earnings Per Share (EPS)
Adjusted EPS, which excludes amortization of acquired intangibles and restructuring charges, was USD 0.40 in the quarter, up from USD 0.34 in the same quarter of the previous year, which represents a growth of 18%.
Cash
Operating cash was an inflow of USD 14.1m in the quarter, representing a 42% operating cashflow into EBITDA conversion. On a twelve month basis, operating cashflow was USD 80.7m, representing a 71% operating cashflow into EBITDA conversion.
Outlook
For the full year, the guidance range for total revenue is unchanged at between USD435m and USD445m.The company increases its full year license revenue outlook to approximately USD 155m, which represents 15% l-f-l growth. The range for adjusted EBIT of USD110-115m is left unchanged. Incorporating Odyssey for the balance of the year raises our total revenue expectation to USD 451-461m, our license revenue to USD 161m, and has no impact on adjusted EBIT.
Conference call
At 17.30 UK Time/ 18.30 CET/ 12.30 EST, today, October 27th 2010, Andreas Andreades, CEO, David Arnott, CFO, and Max Chuard, Director of M&A and IR, will host a conference call to present results and offer an update on business outlook. Listeners can access the conference call using the following dial in numbers:
Dial In information:
UK Standard International +44 (0) 1452 555 566
UK Free Call 0800 694 0257
US Free Call 1 866 966 9439
Switzerland Free Call 0800 828 006
Switzerland Local Call 0565 800 007
Conference ID 20821265
Presentation slides for the call can be accessed using the following link
http://www.temenos.com/Investor-Relations/New-Presentations/
Or if you prefer to follow along via web-linked presentation:
Webex URL: https://webconnect.webex.com/webconnect/onstage/g.php?t=a&d=667362700
We ask that participants dial in 10-15 minutes in advance so that all information can be captured and the conference can start on time.
A transcript will be made available on the company website 48 hours after the call.
About Temenos
Founded in 1993 and listed on the Swiss Stock Exchange (SIX: TEMN), Temenos Group AG is a global provider of banking software systems in the Retail, Corporate & Correspondent, Universal, Private, Islamic and Microfinance & Community banking markets. Headquartered in Geneva with 57 offices worldwide, Temenos serves over 1000 customers in more than 120 countries. Temenos’ software products provide advanced technology and rich functionality, incorporating best practice processes that leverage Temenos’ experience in over 600 implementations around the globe. Temenos’ advanced and automated implementation approach, provided by its strong Client Services organisation, ensures efficient and low-risk core banking platform migrations. Temenos is top of the IBS Sales League Table 2009; winner every year since its launch of the Best Core Banking Product in Banking Technology magazine’s Readers’ Choice Awards and ranks 26th in the American Banker top 100 FinTech companies. Temenos customers are proven to be more profitable than their peers: data from The Banker – top 1000 banks shows that Temenos’ customers enjoy a 54% higher return on assets, a 62% higher return on capital and a cost/income ratio that is 7.2 points lower than non-Temenos customers.
Temenos Q3 2010 Results Presentation.pdf
- Like-for-like licence growth +38%, reported licence growth +41%
- Proportion of Tier 1-2 licenses return to pre-crisis levels
- Completed largest acquisition to date – Odyssey transaction creates PWM leader
- Increasing contribution from partner-sourced deals
We are also very happy that our partner strategy is developing at a faster pace than we initially anticipated. We observe partners beginning to function as an additional sales channel, sourcing deals which closed in the quarter at an increasing pace. Furthermore, partners are also taking an increasing share of our implementation business and this will help us to scale our business and grow profits faster in the future.
Our leadership allows us to play the role of consolidator and we are very happy to have made our largest acquisition to date – one that will elevate us into the position of clear leader in the private wealth management market. Our success with our recent integration of Viveo has given us the experience and confidence to undertake larger acquisitions. As part of the Temenos organization, we believe that Odyssey will enjoy faster growth and bring enhanced value to all stakeholders.
Given our excellent performance year to date, we are well on track to meet our full year outlook, which we reiterate at this time.”
Revenue
Revenue for the third quarter was USD 104.0m, up from USD 88.6m in the same period last year, representing an increase of 17%. Licence revenue for the quarter was USD 37.7m, 41% higher than in 2009. For the LTM 2010, total revenue was USD 416.8m, up 11% on LTM 2009, with licence revenue at USD 143.2m, 9% higher than the same period last year.
Adjusted EBIT
Adjusted EBIT (EBIT before restructuring charges and amortization of acquired intangibles) was USD 29.2m in the quarter, 16% higher than in Q3 2009. Adjusted EBIT for the last twelve months was USD 102.5m compared to USD 88.5m in the prior period, representing a 16% increase. The adjusted EBIT margin was 28%, flat on the prior year, with LTM 2010 adjusted EBIT margin at 25%, 99 basis points higher than in the prior 12 months.
Earnings Per Share (EPS)
Adjusted EPS, which excludes amortization of acquired intangibles and restructuring charges, was USD 0.40 in the quarter, up from USD 0.34 in the same quarter of the previous year, which represents a growth of 18%.
Cash
Operating cash was an inflow of USD 14.1m in the quarter, representing a 42% operating cashflow into EBITDA conversion. On a twelve month basis, operating cashflow was USD 80.7m, representing a 71% operating cashflow into EBITDA conversion.
Outlook
For the full year, the guidance range for total revenue is unchanged at between USD435m and USD445m.The company increases its full year license revenue outlook to approximately USD 155m, which represents 15% l-f-l growth. The range for adjusted EBIT of USD110-115m is left unchanged. Incorporating Odyssey for the balance of the year raises our total revenue expectation to USD 451-461m, our license revenue to USD 161m, and has no impact on adjusted EBIT.
Conference call
At 17.30 UK Time/ 18.30 CET/ 12.30 EST, today, October 27th 2010, Andreas Andreades, CEO, David Arnott, CFO, and Max Chuard, Director of M&A and IR, will host a conference call to present results and offer an update on business outlook. Listeners can access the conference call using the following dial in numbers:
Dial In information:
UK Standard International +44 (0) 1452 555 566
UK Free Call 0800 694 0257
US Free Call 1 866 966 9439
Switzerland Free Call 0800 828 006
Switzerland Local Call 0565 800 007
Conference ID 20821265
Presentation slides for the call can be accessed using the following link
http://www.temenos.com/Investor-Relations/New-Presentations/
Or if you prefer to follow along via web-linked presentation:
Webex URL: https://webconnect.webex.com/webconnect/onstage/g.php?t=a&d=667362700
We ask that participants dial in 10-15 minutes in advance so that all information can be captured and the conference can start on time.
A transcript will be made available on the company website 48 hours after the call.
About Temenos
Founded in 1993 and listed on the Swiss Stock Exchange (SIX: TEMN), Temenos Group AG is a global provider of banking software systems in the Retail, Corporate & Correspondent, Universal, Private, Islamic and Microfinance & Community banking markets. Headquartered in Geneva with 57 offices worldwide, Temenos serves over 1000 customers in more than 120 countries. Temenos’ software products provide advanced technology and rich functionality, incorporating best practice processes that leverage Temenos’ experience in over 600 implementations around the globe. Temenos’ advanced and automated implementation approach, provided by its strong Client Services organisation, ensures efficient and low-risk core banking platform migrations. Temenos is top of the IBS Sales League Table 2009; winner every year since its launch of the Best Core Banking Product in Banking Technology magazine’s Readers’ Choice Awards and ranks 26th in the American Banker top 100 FinTech companies. Temenos customers are proven to be more profitable than their peers: data from The Banker – top 1000 banks shows that Temenos’ customers enjoy a 54% higher return on assets, a 62% higher return on capital and a cost/income ratio that is 7.2 points lower than non-Temenos customers.
Temenos Q3 2010 Results Presentation.pdf