AGM Statement

GENEVA, Switzerland - 23 May, 2006, TEMENOS Group (SWX: TEMN), a provider of integrated core banking systems, today announced that at today's Annual General Meeting of TEMENOS Group AG, Andreas Andreades, Chief Executive of TEMENOS, will make the following statement:

2005 was an outstanding year for TEMENOS. Our revenues reached USD 168.7 million, up 9% compared to 2004. Over the 3 years revenues have grown from USD 113.3 million in 2002 to USD 168.7 million in 2005, a compound annual growth rate exceeding 14%.

Maintenance revenues, a measure of our long term success and profitability, continued to grow at a significant double digit numbers at 18% compared to 2004, and professional services grew at 13% compared to 2004. Licence revenues are reported at USD 64.4 million, up 1% compared to a 2004 figure which includes legacy percentage of completion revenues from contracts signed in prior year. When adjusted for this licence revenues are growing by 15% year on year. Cost leverage continues to be excellent, with costs growing at 4% compared to 2004.

Management is committed to further organic growth of the business and remains focused on continuing to improve profitability and on creation of shareholder value. As we further develop our target markets, our maintenance revenues will continue to grow improving both net margins and net profitability, and driving enhanced shareholder value. We remain as positive as ever towards taking advantage of the business model to conclude corporate transactions that leverage our core assets and are accretive to shareholders.

During the year we continued to strengthen our organisation at all levels, and have attracted key talent from the banking software industry. In March 2005, Alex Groenendyk and Greg Green joined TEMENOS from Fiserv CBS Worldwide, a division of Fiserv, Inc., where they held the positions of President and Chief Operating Officer respectively, bringing a collective 35 years of experience. Greg has recently been promoted to Managing Director of our TCB business while Alex continues as President of our Americas region.
After an excellent 18 months as Regional Director for Asia Pacific region, Mark Cullinane, who joined TEMENOS in 2004, has recently been appointed Chief Operations Officer of the Group. Mark’s responsibilities include running global operations covering sales, services and support, and product development. Mark brings with him more than 20 years of experience with strong operating skills combined with excellent commercial acumen.
In addition, Costa Christodoulou, with 22 years experience holding key executive positions with a number of leading industry players, has recently joined TEMENOS to run our Northern European and C.I.S. business.
We remain committed to attracting the best executives in the industry as we build the future TEMENOS.

On 1st March of 2006, TEMENOS launched a CHF 132.5 million convertible bond with a maturity of seven years. Simultaneously, chairman George Koukis, along with Global Finance SA, a private equity firm with a TEMENOS holding in the funds under its management, announced that they were selling a total of seven million TEMENOS shares. On George’s side, this was part of a personal investment diversification strategy and he intends to remain a significant TEMENOS  shareholder. George Koukis now holds approximately 18.2% of TEMENOS (previously 25.7%) and funds managed by Global Finance SA hold 5.0% of TEMENOS (previously 10%). TEMENOS has issued a convertible bond to take advantage of the attractive financing opportunity presently available in the convertible markets and the current low interest rate environment. We believe that the manageable level of additional funding provided by this convertible bond will enable us to decrease our cost of capital; strengthen the company’s strategic position and ability to take advantage of further value-enhancing acquisition opportunities within a consolidating industry; and enhance its overall financial flexibility. Following the share offering, TEMENOS free float has now reached 82.5%.

For the second year running, TEMENOS has been ranked among the leading companies listed in Switzerland in terms of good corporate governance and has even improved its rating since last year. TEMENOS’ rating is in the first quartile, where out of the 25 companies listed, only seven are not part of the Swiss Market Index (SMI) – TEMENOS being one of these seven. The Ethos Investment Foundation, which represents 77 Swiss pension funds, undertakes an annual comparative study of the 100 most important listed companies (the Ethos report is available at www.ethosfund.ch). To assess the level of corporate governance, Ethos takes into consideration a number of criteria, such as information, capital structure, board of directors, external auditor, and shareholders’ participation rights, based on international best practice in corporate governance. The principle of corporate governance has two key aims: to establish a good balance of power within a company, for instance by separating the roles of executives’ management and the board of directors; and also, to protect the right to shareholders.

In October 2005, we announced that Mark E. Austen is to be recommended by TEMENOS Board for election as a new non-executive member at this AGM. Based in London, Mark has had considerable experience at an executive level in international business and banking industry. Most recently, he served as an executive of IBM’s Business Consulting Services, following a 20 year career with PricewaterhouseCoopers (PwC). There, he rose to become managing partner of Global Financial Services, and from 2000 to 2002 was an elected member of PwC’s Global Board. He was also a member of the transaction group that oversaw the sale of the consulting business to IBM.

First Quarter 2006 Results and Outlook

We had an excellent start to 2006, with business momentum continuing strongly. Licensing revenues grew by 16% and by 41% on a like for like basis exceeding our Q1 targets. Cost management continued to be good with costs growing by 6% and strong cash flows correcting the lower than usual prior fourth quarter.

During the quarter, we continued to see exceptional T24 licence revenue growth - 64% on a like for like basis, bringing our last 12 month growth to 32%.TCB was flat in the quarter compared to 2005 in the absence of a TCB deal in the quarter while sustaining a 73% growth in the last 12 months.

Growth came from all regions, while the regional mix continues to balance with APAC and the Americas now representing 42% of our licence revenue mix. Our focus on Tiers 1 and 2 continues to be successful with these segments now representing 39% of licence revenue mix.

The last 12 month trends have benefited from this quarterly performance and are illustrating our success, with top line growth of 15% and licence growth of 20%, on a like for like basis, when adjusting for revenues recognised under the legacy of percentage of completion, the growth for revenues was 20%, and an exceptional 38% for licence revenues. Cost leverage is excellent with costs growing by 6% therefore more than doubling earnings per share from USD 16 cents to USD 33 cents per share. Cash flows from operations were also growing by an excellent 45% to USD 15.4 million confirming the strength of our model.

Equally critical for our success this year has been our performance since the end of the quarter. We have won and are concluding contracts for a number of large and strategic T24 and TCB deals with Tier 1 and Tier 2 banks which places us in an excellent position to deliver on our commitments for 2006.

So when we take into account our consistently strong performance to date, the business momentum, but also the size of deals mentioned above and pipeline visibility, we have increased our License Revenues outlook for 2006 from USD 75-80 million to USD 80-85 million. Licence revenues are now expected to grow a reported 28% compared to 2005.

Finally, on the basis of strong core market spending, and our overall competitive position we are also increasing our medium term T24 license growth target. This used to be 10% and we are now revising this to 20%. T24 license growth for the past 24 months was on average 30% pa. This change results in an upwards revision to our 3 year plan.

While we are increasing our medium term T24 license revenues growth from 10% to 20% we continue to target aggressive medium term TCB growth around a Tier 1&2 conversion. We are also investing in product, technology, services and sales infrastructure in order to continue to grow market share in a faster growing market. This will enable TEMENOS to consolidate our leadership position.

For 2006 our outlook continues to be:
– EPS growth for 2006 in excess of 30% compared to 2005
– Revised growth of licensing revenues outlook from approximately 21% to 28% compared to 2005 (this is USD 80 to 85 million up from 75 to 80 million)
– We are now expecting to reach approximately USD 200 million of revenues in 2006, a growth of 19% on 2005.

Minutes of the AGM will be available in a couple of days on our website at www.temenos.com under the corporate governance section.

- ENDS -

About Temenos
Founded in 1993, Temenos Group AG is a provider of integrated modular core banking systems to over 590 financial institutions in 110 countries worldwide. Temenos software provides banks with a single, real-time view of the client across the enterprise, enabling banks to maximize returns while streamlining costs. Whether providing 24/7 functionality to the wholesale, retail and private or universal banking sectors, partnering with central banks on core system replacement, or working with the World Bank on solutions for the emerging markets, Temenos knows banking. The company has a transparent approach to its operations and brings to bear its experience, expertise, commitment and professionalism on every project. Headquartered in Geneva, Switzerland, the company has 43 offices in 33 countries and is listed on the main segment of the SWX Swiss Exchange (TEMN). For more information please visit www.temenos.com

For more information, contact:

Max Chuard
Temenos Director
Corporate Finance & IR
Member of the Executive Board
Tel: +41 (0) 22 708 1157
Email: mchuard@temenos.com

Ben Robinson
Temenos Investor Relations Manager
Tel: +44 (0) 207 290 3012
Email: brobinson@temenos.com

Bianca Morgan
Temenos PR Manager
Tel: +44 (0) 207 423 3751
Email: bmorgan@temenos.com

Chris Patmore
Team 660
Metia for TEMENOS
Tel: +44 (0) 20 3100 3596
Email: chris.patmore@metia.com