Temenos raises its outlook to reflect the acquisition of Financial Objects

GENEVA, Switzerland – 17 September 2008 - Temenos Group (SWX: TEMN), a market leading provider of core banking software, today sets out the impact on its 2008 and 2009 consolidated results from the acquisition of Financial Objects. In summary, before taking account of any possible revenue synergies, the acquisition is expected to increase adjusted* earnings per share (EPS) by USD0.01 in 2008 and by USD0.08 in 2009.

The recommended GBP0.60 per share cash offer for Financial Objects - valuing the group at GBP27.2m (USD49m) – was made on 3 July, but required shareholder and regulatory approval before it could be finalised. Shareholder approval was obtained at an EGM held on 11 August and the last legal formalities were completed on 10 September, when ownership transferred to Temenos. From 11 September, when Financial Objects’ shares were de-listed from the Alternative Investment Market (AIM), Temenos began incorporating the results of Financial Objects into its consolidated group accounts.

Expected contribution from acquisition

For the remainder of 2008, Temenos expects the acquisition to contribute USD11m to group revenues - taking outlook for group revenues in 2008 to USD444m, a 34% increase on 2007 - and raise adjusted* EPS by USD0.01, increasing full year outlook to USD1.40.

In 2009, Temenos expects the acquisition to add USD40m to revenue and USD0.08 to adjusted* EPS. This estimate assumes that around USD3m of cost synergies can be achieved in the first year – principally through the termination of PLC** expenses and the removal of duplicated costs - rising to approximately USD5m in the second year as some of the deferred savings materialise. What is not included in the estimate, however, is the impact from revenue synergies, even though it is likely that these will begin to manifest themselves in 2009.

Andreas Andreades, CEO, Temenos, says: “It gives me great pleasure to announce that Temenos’ acquisition of Financial Objects has closed successfully. The combination of Temenos and Financial Objects creates a group that is bigger, stronger and more profitable and, therefore, better placed to take advantage of the significant market potential that exists for third-party core banking software.

Even before any cross-selling revenues, we expect the acquisition to materially enhance our 2009 earnings and so this is clearly a value-enhancing deal for our shareholders. What is more, by this year end, we will have put in place the necessary restructuring (and borne the costs of this) to ensure that we deliver on our cost saving plans for 2009.

Following on from the Informer acquisition in July and the Actis.BSP deal last year, we are demonstrating that we can and will continue to successfully complement strong organic growth without compromising shareholder value or losing focus. For me, this underscores both our ambition and the potential for Temenos to lead the core banking software market over the long term.”

Investor Conference Call

At 14.00 BST/ 15.00 CET/ 9.00 EDT, today, September 17, Temenos will host a conference call for investors to present the impact of Financial Objects in more detail. Listeners can access the conference call using the following dial in numbers:

USA                         1 866 966 5335
Germany:                  0800 673 7932
Switzerland:              0800 800 038
UK and elsewhere:     +44 (0)203 037 9105
 
Presentation slides for the call can be accessed using the following link
http://www.temenos.com/Investor-Relations/New-Presentations/
 

*Adjusted EPS adds back the amortisation of acquired intangibles as well as the one-off non-cash restructuring charge in 2008.
**PLC costs include listing charges, audit and other advisory fees, executive and non-executive directors’ remuneration

- ENDS -

About Temenos
Founded in 1993 and listed on the Swiss Stock Exchange (SWX: 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 46 offices worldwide, Temenos serves over 600 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 annually invests around 20% of sales in R&D, significantly more than its peers, into a single fully packaged upgradeable software release, which ensures all Temenos customers benefit from modern technology and support indefinitely.

About Temenos T24
TEMENOS T24 is a functionally rich, scalable, and proven integrated banking system. It is delivered as a pre-configured Model Bank solution that incorporates industry best-practice, enabling fast and predictable implementations and immediate, measurable benefits. Temenos’ Model Bank approach allows a fast ROI and a highly flexible and responsive approach to banking ensuring maximum business agility based on T24’s flexible features. T24 offers integrated and comprehensive information on the institution at all times including a single customer view, and a single view of the enterprise including risk and profitability.

T24 incorporates modern technology including a comprehensive Service Orientated Architecture (SOA), fully enabled for standard, SOAP (Simple Object Access Protocol) web services, and BPEL process execution and compliant with industry leading ESBs (Enterprise Service Buses). T24 can be deployed on fully scalable, multi-server n-tier architecture. It provides a full front-to-back solution from electronic delivery channels such as mobile devices and internet banking right through to settlement, general ledger and other back office functions all in a fully integrated, reliable and cost effective environment. Temenos’ total commitment to open standards enables its customers to benefit from the latest advances in technology ensuring business agility, continuity, data integrity and reduced downtime delivering a significant, immediate and ongoing return on investment.

Analyst/ investor queries:
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
Tel: +44 (0) 207 290 3012
Email: brobinson@temenos.com

Press queries:
James White
Hudson Sandler
Tel: +44 (0) 20 7710 8910
Email: james.white@hudsonsandler.com