Geneva, Switzerland, 24 April, 2012 – Temenos Group AG (SIX: TEMN), the market leading provider of banking solutions, today reports solid first quarter 2012 results, supporting its full year outlook.
Q1 Financial and Operating highlights
• Strong growth in adjusted operating profits, +26%
• 7 new customers signed, including two tier 2 banks
• Continued strong cash generation, bringing DSOs below 100 days
• Services revenue +8%, demonstrating continued progress
• 15 Go-lives up from 8 in Q1 2011
• Series of industry analyst reports confirm product leadership
Commenting on the results, Temenos CEO Guy Dubois said: “I am satisfied with the progress we made in Q1. We are executing well against our strategic initiatives, increasing the share of revenues coming from the fastest-growing and most important markets - such as retail, private wealth management (PWM), Asia and Americas - and from our installed base. In addition, we continue to drive our services business towards profitability. Lastly, the effects of the restructuring actions we took at the end of 2011 are clearly visible: adjusted costs fell by 4%, underpinning the margin improvement in the quarter.
It is still too early to talk of a recovery, although there are some signs of stabilisation in our end market, and our priority remains to improve our own execution. Q1 represents a solid start to 2012 and we are confident in our ability to deliver our outlook for the full year.”
Revenue for the first quarter was USD 100.3m compared to USD 103.1m in the same period last year, representing a decrease of 3%. Licence revenue for the quarter was USD 23.5m, down 16% compared to Q1 2011. For the LTM 2012, total revenue was USD 470.7m, up 3% on LTM 2011, with LTM licence revenue at USD 141.4m, 12% below the same period last year.
Adjusted EBIT (EBIT before one-off adjusting charges of USD 8.2m – primarily related to terminated M&A discussions - and amortisation of acquired intangibles of USD3.4m) was USD 6.3m, 26% above Q1 2011. Adjusted EBIT for the last twelve months was USD 89.0m compared to USD 106.2m in the prior period, representing a decline of 16%. The adjusted EBIT margin was 6%, an increase of 140 basis points on the prior year, with LTM 2011 adjusted EBIT margin at 19%, 4 percentage points lower than in the prior 12 months.
Earnings Per Share (EPS)
Adjusted EPS, which excludes the amortisation of acquired intangibles and one-off adjusting charges, was USD 0.00 per share in the quarter, versus 0.05 per share in the same quarter of last year. The LTM adjusted EPS was USD 0.83 per share, a decline of 39% on the previous 12 months.
Operating cash net of taxes was an outflow of USD 19.4m in the quarter, compared to an outflow of USD 19.9m in the same quarter of 2011. On a twelve month basis, operating cashflow was USD 99.3m, 20% higher than in the comparative period, and representing a 102% conversion of adjusted cashflow into adjusted EBITDA.
2012 Outlook Reiterated
The company reiterates its full year outlook, set out as follows: for total revenues, the company anticipates a growth range of -5% to +6%, which implies approximately USD 450m–500m in total revenues. The company expects to achieve adjusted EBIT margins between 19% and 22%, which implies a profit range of USD 85m- 110m. Lastly, the company expects a 100% conversion of adjusted operating cashflow into adjusted EBITDA. The absolute ranges are based on FX spot rates as of the end of January 2012.
At 18:30 CET/ 17:30 BST/ 12:30 EST, today, April 24, 2012, Guy Dubois, CEO and David Arnott, CFO, and Max Chuard, Director of M&A and IR, will host a conference call to present the results and to offer an update on operational performance. Listeners can access the conference call using the following dial in numbers:
+44 (0) 1452 555 566 (UK Standard Int’l Call)
0800 694 0257 (UK Free Call)
+41 (0) 565 800 007 (Swiss Local Call)
0800 828 006 (Swiss Free Call)
1 866 966 9439 (US Free Call)
Conference ID # 72424009
A transcript will be made available on the company website 48 hours after the call.
Presentation slides for the call can be accessed here
To view the full press release, please click here.
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 more than 60 offices worldwide, Temenos serves over 1,200 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 a leader in the IBS Sales League Table 2011; 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.
For more information please visit www.temenos.com
Director, Corporate Finance & IR
Member of the Executive Board
Tel: +41 (0) 22 708 1482
Tel: +44 (0)20 7796 4133
Associate Director, Strategy and IR
Tel: +44 207 423 3774
Mob: +44 78 3433 7573
Director, Strategic Planning
Tel: +41 (0) 22 708 1535
Mobile: +41 795 207208