Temenos reports excellent Q1 results - ahead of consensus estimates - and raises outlook
22 April 2008
Geneva, Switzerland, April 22, 2008 – Temenos Group AG (SWX: TEMN), a market leading provider of mission-critical core banking software systems, today announced its financial results for the first quarter 2008.
Read the full Temenos Q1 2008 Results
Download the Temenos Q1 2008 Results Presentation
Financial Highlights
| |
Q1 2008 |
Q1 2007 |
% Change |
Consensus |
| Licence revenue |
31.1 |
23.4 |
33% |
25.5 |
| Total revenue |
88.4 |
60.3 |
47% |
75.1 |
| EBIT |
6.5 |
5.2 |
25% |
5.7 |
| Adjusted EPS |
0.13 |
0.07 |
86% |
0.10 |
All numbers are in USDm, except adjusted EPS USD
Q1 Operating Highlights
- A deal with a tier 1 global financial institution to support its international treasury and
liquidity management business.
- Al-Hilal Bank in UAE taking T24 to support its Sharia-compliant retail, commercial and
investment banking businesses – demonstrating the strength of Temenos’ Islamic
Banking offering.
Commenting on the results, CEO Andreas Andreades said, “I am pleased to be able to report
another set of excellent results. We have managed to grow licence and total revenue very
strongly against a tough comparative period and, in so doing, materially exceed market
expectations. Problems in the credit market and the broader economy are unquestionably
presenting challenges for our customers, but we have still to see any slowdown in our business.
In these difficult times, our clients are increasingly focused on ways to save costs and we are
confident that our systems’ ability to automate processes, consolidate systems and reduce
maintenance expenses, especially when overlaid with their capacity to generate revenue
synergies, will see banks continue to embark on transformational projects. While constantly
vigilant to changes in demand, we are sufficiently optimistic about the depth and cover in our
pipeline to be raising guidance for the full year.”
Revenue
Revenue for the first quarter was USD88.4m, up from USD60.3m in the same period last year, representing growth of 47%. All revenue lines experienced strong growth, including licences, which were up 33% against a comparative figure that was 109% higher than the year before.
Operating profit
Operating profit for the quarter was USD6.5m, compared with USD5.2m in the same period last year, an increase of 25%. Margin for the quarter was lower than in the prior year, reflecting a change in the sales mix towards lower margin service revenue (the mix in Q1 2007 was skewed by the extraordinary licence growth of 109%), timing of investment in the product business in the prior year and also the impact of translating chiefly non-dollar costs. On an underlying basis - that is, adjusting for non-cash costs and the effect of currency translation - margins were up by 780 basis points (bps) in the last twelve months (LTM). Furthermore, as can be seen below, management maintains its target for more than 200bps of margin expansion for the full year, underpinned by improving services margins and scale economies.
Net income and Earnings Per Share (EPS)
Net income rose to USD7.0m in the quarter. This represented an increase of 67% on the prior
year and was boosted by foreign exchange gains. Adjusted EPS, which excludes amortisation of
acquisition-related intangibles, was USD0.13 in the quarter, an 86% increase over 2006
(USD0.07).
Cash
Temenos also enjoyed strong cash conversion. Cash from operations in the first quarter was
USD9.9m, representing a conversion of EBITDA (Earnings Before Interest, Tax, Depreciation and
Amortisation) of more than 85%. On an LTM basis, operating cash conversion was 85%.
Outlook
The revised 2008 outlook is for licence sales of USD175m, 18% up on 2007 levels; total revenue
of USD415m, 26% above 2007; EBIT of USD87.5, 40% above 2007 levels and a margin of
21.1%; and, adjusted EPS of USD1.36, 32% above the 2007 figure.
At 14.30 GMT/ 15.30 CET/ 9.30 EDT, today, April 22, Andreas Andreades, CEO, David Arnott,
CFO, and Max Chuard, Head 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:
A playback will also be available for up to 48 hours after the call, using the following numbers:
Pin: ID 17347 #
Presentation slides for the call can be accessed using the following link
http://www.temenos.com/Investor-Relations/New-Presentations/
Read the full Temenos Q1 2008 Results
Download the Temenos Q1 2008 Results Presentation
-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 44 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% 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. For more information please visit www.temenos.com
For more information, contact:
Investor/Analyst 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 Manager
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
Peter McKenna
Temenos Marketing Director
Tel: +44 (0) 207 423 3842
Email: pmckenna@temenos.com
Any statements in this press release about future expectations, plans and prospects for the company and statements containing the words “believes”, anticipates”, “plans”, “expects”, “will” and similar expressions, 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-looking financial information provided by the company in this press release represents the company’s estimates as today’s date. We anticipate that subsequent events and developments will cause the company’s estimates to change. However, while the company may elect to update this forward-looking financial information at some point in the future, the company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the company’s estimates of its future financial performance as of any date subsequent to today’s date.