Investor Relations

Risk Factors & Investor FAQ’s


(incorporated in Switzerland with limited liability)

Risk Factors

This information (the Information) relates to TEMENOS AG (the Company, and together with its subsidiaries TEMENOS or the Group) and its shares (the Shares, and each a Share).

Investing in the Shares involves a high degree of risk. The Group operates in a complex, rapidly changing environment that involves numerous risks and uncertainties, many of which are beyond its control. Existing and prospective investors should carefully consider the risks and uncertainties of an investment for them, including each of the risks and uncertainties described below and all other information on the website of the Company, before taking any investment decision with respect to the Company or its Shares. If any of the following events actually occur, the Group’s business, financial condition and results of operations could be materially adversely affected.

The risks and uncertainties described below are not the only ones that the Group faces. Other risks and uncertainties that the Group does not currently know of or that the Group currently considers to be immaterial, could also materially adversely affect the Group’s business, financial condition and results of operations. In addition, the order in which the risks and uncertainties are presented below does not necessarily reflect the likelihood of their occurrence or the magnitude of their potential impact on the Group’s business, financial condition and results of operations.

Investment decisions with respect to the Company or its Shares should not be made solely on the basis of the information on risks and uncertainties set out below since such information cannot serve as a substitute for individual advice and information tailored to the requirements, objectives, experience, knowledge and circumstances of each existing or prospective investor individually.

Risks Factors Relating to the Company

The Company is reliant on the support of the wider Group to conduct its business

The Company is dependent upon the Group for various services including but not limited to software development and support, centralized administrative functions, licensing of IP, and management. These services are centralized within the Group for cost-effectiveness and expertise and are provided to all Group companies from numerous locations. Any contingency that affects the Group’s ability to provide the various services to the Company will have a material adverse effect on the Company’s business, financial condition and results of operations.

Risks Factors Relating to the Business Group

The Group depends on the banking and financial services industry

The Group derives all of its licensing, vendor-hosted software delivery, maintenance and services revenues from banks and other financial institutions. The banking industry is sensitive to changes in economic conditions and is highly susceptible to unforeseen external events, such as political instability, recession, inflation, changes in regulation, adverse market conditions, or other adverse occurrences that may result in a significant decline or other change in the use of financial services or their profitability. Any event that results in decreased consumer or corporate use of financial services, cost-cutting measures by financial services companies, or increased pressure on banks and financial institutions to develop, implement and maintain solutions in-house rather than procuring them from external providers such as the Group, may negatively affect the level of demand for the Group’s products and services. Any reduction in the demand for the Group’s products in the banking and finance industries could have a material adverse effect on the Group’s business, financial condition and results of operations.

Increased competition may result in decreased demand and declining prices for the Group’s products and services

The Group competes both to attract new customers and to retain and provide additional services to its existing customers. The market for banking industry software is intensely competitive and constantly evolves in response to technological innovation and other factors. The Group’s competitors are diverse and offer a variety of solutions directed at various segments of the banking and financial services industry software market. These competitors include large software vendors offering banking software solutions, such as SAP, Infosys and Tata Consultancy Services, as well as focussed providers such as Oracle Financial Services Software and Misys. The Group also faces competition from the IT departments of financial institutions that develop solutions internally and from smaller independent companies that provide specialized solutions addressing discrete needs or specific geographic regions. A number of the Group’s competitors enjoy competitive advantages such as: longer operating histories; greater financial, technical and marketing resources; stronger brand recognition; and a larger installed client base. In addition, several of the Group’s competitors have well-established relationships with a number of the Group’s current and potential future clients and strategic partners. Furthermore, the same competitors also have extensive knowledge of the banking software industry and have the resources to enable them to offer clients single-vendor solutions for all of their banking related software requirements.

As a result, some of the Group’s competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements or to devote greater resources to the development, promotion and sale of their products and services. In addition, established companies from other vertical industries, or new software companies such as FinTech companies, may enter the market for banking and financial industry software.

Failure to respond timely and effectively to any of these developments, or to any new or heightened competition, could materially adversely affect the Group’s business, financial condition and results of operations.

The Group may fail to maintain its products’ market-leading positions in an environment of rapid technological development, new business models and changing market expectations

The future success of the Group depends upon its ability to keep pace with technological developments, new business models among its customers (such as Software-as-a-Service (SaaS)) and changing market expectations. The market for banking software is characterised by rapid technological change, frequent new product introductions, technology enhancements, changes in customer demands and evolving market standards. This requires the Group to be constantly developing new products and services, enhancing existing products and services, integrating any new products and services that may be acquired through acquisitions and anticipating any future changes in customer’s needs. With increasingly sophisticated customer requirements, the Group may fail to develop technologically and commercially competitive new products and services or enhance existing products and services and bring them to market in a timely and cost-effective manner. Failure to make sufficient investments in research and development or if such investments were costly or ineffective could have a material adverse effect on the business, financial condition and results of operations of the Group.

Increased proportion of clients that are “Tier 1 and 2” may increase the reputational risk to the Group

The Group’s “Tier 1 and 2” client list, which includes clients such as Nordea, Bank of Ireland, Commerce Bank, Openbank, ABN Amro, BANESCO, Itau, Julius Baer, SinoPac, Bank of Shanghai and Swissquote, is a key competitive strength, which strengthens the reputation and brand of the Group within the banking industry. However, the continued acquisition of “Tier 1 and 2” clients increases the reputational exposure of the Group in the event of a product defect or customer complaint in relation to a Tier 1 or Tier 2 client. Any incident or action that damages the reputation or brand of the Group could materially adversely affect its business, financial condition and results of operations.

The Group is dependent on its ability to attract and retain key management and other skilled personnel

The Group operates in an industry in which there is intense competition for experienced and highly qualified individuals. The success of the Group is partly dependent on its ability to identify, attract, develop, motivate, adequately compensate and retain highly skilled and qualified management, sales, support, service, marketing and software development personnel, particularly those with expertise in the banking software industry. In particular, the Group depends heavily on the continued services and performance of its directors, members of its Executive Committee and other senior managers and technical personnel. In addition, the Group relies on hubs of its technical staff at its facilities in India, Romania and other locations for cost-effective development, support and other activities. There is intense competition for experienced and highly skilled personnel, particularly in India, and the Group may fail to meet its personnel recruitment goals.

Also, the continued public focus on compensation practices of listed companies may have an adverse impact on the Group’s ability to attract and retain highly skilled employees. In particular, limits on the amount and form of executive compensation imposed by regulatory initiatives, including the Swiss Ordinance Against Excessive Compensation with respect to Listed Stock Corporations in Switzerland (the Compensation Ordinance) could impact the Group’s ability to retain certain of the Group’s most highly skilled employees and hire new qualified employees in certain businesses.

If the Group fails to recruit and retain the numbers and types of employees that it requires, its business, financial condition and results of operations could be materially adversely affected.

The Group may fail to successfully identify, complete or manage acquisitions

The Group pursues a strategy of making targeted acquisitions and regularly evaluates potential acquisitions that the Group believes would provide a strategic fit with its business. The risks associated with such a strategy include: the availability of suitable candidates, in particular as any further consolidation in the Group’s industry may decrease the number of potential desirable acquisition targets; failure to obtain regulatory approvals or otherwise complete planned acquisitions; integration issues such as the failure to assimilate operations and personnel, and the risk of entering markets in which the Group has no or limited prior experience.

The process of integrating an acquired company or business is risky and may create unforeseen operating difficulties and expenditures, including: difficulties in integrating the operations, technologies, services and personnel of the acquired businesses; unexpected costs or liabilities of acquired businesses (or future acquisitions); ineffectiveness or incompatibility of acquired technologies or services; failure to realise cost savings, synergies or other benefits from completed transactions; potential loss of key employees of acquired business and cultural challenges associated with integrating employees from the acquired company; inability to maintain the key business relationships and the reputations of acquired businesses; disruption to the Group’s existing businesses; and diversion of management’s attention from other business concerns. In connection with the integration of any acquired company’s business, the Group may have to restructure its business, sell assets or portions of the Group’s business or re-evaluate business and client relationships based on its risk appetite and compliance protocols, all of which may be costly and is subject to significant risks and uncertainties. In addition, acquired businesses may not perform as anticipated, resulting in charges for the impairment of goodwill and other intangible assets.

The funding of future acquisitions by the Group may require the use of significant amounts of cash, potentially dilutive issuances of equity securities and the incurrence of debt or amortisation expenses related to intangible assets. Such acquisitions may result in a decrease in the Group’s cash position, an increase in its indebtedness, and a reduction in the Group’s ability to access additional capital when needed.

Any failure to identify desirable acquisition targets, to consummate an acquisition or to effectively integrate and derive the desired value of any acquired business now or in the future could materially adversely affect the Group’s business, financial condition and results of operations.

The Group may discover contingent or other liabilities of acquired businesses or other facts which the Group was not aware of and that could expose it to losses

The success of an acquisition depends, in part, on the Group’s ability to perform adequate due diligence before the acquisition. While the Group commits significant resources to conducting due diligence on potential target businesses, the Group may discover issues relating to any acquired business, including operational, legal, regulatory, internal controls and compliance problems, during the course of such acquired business’ integration into the Group that may have a material adverse effect on the Group’s reputation as well as on the business, financial condition and results of operations of the Group. In addition, unexpected liabilities associated with the acquired business may be substantial and may exceed the amount of liabilities the Group anticipated. This could lead to adverse business, accounting or financial consequences, such as the need to make large provisions against the acquired assets or to write down acquired assets. These difficulties could materially and adversely affect the Group’s business, financial condition and results of operations.

The Group’s results of operations could be impacted by foreign exchange or interest rate fluctuations

The Group’s financial statements are expressed in U.S. dollars and the Group generates the majority of its revenues in U.S. dollars. However, a significant portion of its operating expenses is incurred in currencies other than the U.S. dollar, particularly in euros, Swiss francs, Indian Rupees and Pounds Sterling. In some jurisdictions the Group receives payment in U.S. dollars or other currencies, while independent distributors resell the products to clients in the local currency. In the event of the depreciation of the local currency against the U.S. dollar, the Group may be forced to reduce the sale price. As a result, fluctuations in the exchange rate of the U.S. dollar against other currencies could materially affect the Group’s reported results from year to year. The appreciation of the U.S. dollar relative to other currencies would generally have an adverse effect on the Group’s profitability expressed in U.S. dollars, while depreciation of the U.S. dollar relative to another currency would have a positive effect.

The Group makes efforts to mitigate its foreign exchange risk by aligning its revenue streams to currencies that match its cost base and hedges most of the residual exposure by the use of derivative instruments. However, such hedging may not be sufficient protection against significant fluctuations in the exchange rate of the U.S. dollar to other currencies, in particular those currencies in which the Group incurs operating expenses, generates revenues or holds assets. Such fluctuations may impose additional costs on the Group, impact the comparability of its results between financial periods and have a material adverse effect on the Group’s business, financial condition and results of operations.

Furthermore, the Group is exposed to the fluctuation in interest rates. Some of the Group’s financing arrangements bear interest at floating rates of interest per annum equal to EURIBOR or LIBOR, as adjusted periodically, plus a margin. These interest rates could rise significantly in the future. To the extent that interest rates were to increase, the Group’s interest expense would correspondingly increase, reducing Group cash flow. This could have a material adverse effect on the Group’s business, financial condition and results of operations.

The Group relies on third parties and strategic partners for sales and implementation services

The Group delivers its products and services to customers directly and indirectly through distributors and through strategic alliances with IT service providers. The Group’s strategic partners sell to customers and provide implementation services through a customer contract with the partner, rather than with the Group. These relationships with IT service providers and strategic partners are intended to help drive co-innovation of the Group’s products and services, profitably expand the Group’s routes to market to enhance market coverage and provide high-quality services in connection with the Group’s product offerings. Any failure to maintain and expand these relationships could adversely affect the delivery of the Group’s products and services and, in turn, the Group’s ability to compete, all of which could materially adversely affect the Group’s business, financial condition and results of operations.

The Group’s results of operations could be impacted by its increased use of professional subcontractors

The Group relies on professional subcontractors to fulfill certain of its obligations to customers, in particular in the context of implementing Group products. The Group’s use of subcontractors reduces its professional services gross margins and, consequently, any increase in the use of subcontractors may negatively impact the Group’s services margins. Due to the typically short-term nature of the contracts with professional subcontractors, there is a risk that should they be terminated on short notice, the Group’s ability to implement its products could be materially reduced. Such a reduction could impact the competitiveness of the Group’s products and services offering and, in turn, have a material adverse effect on the Group’s business, financial condition and results of operations.

The Group’s sales cycle is long and may cause its operating results to vary widely

Any decision by a potential customer to purchase the products of the Group involves a significant commitment of such customer’s resources and is influenced by its budget cycles. The process of winning new customers may require a significant amount of management time and resources, as the Group must educate any potential new clients regarding the benefits of using the Group’s products and services. Consequently, the period between initial contact and the purchase of products is often long and prone to delays associated with the lengthy budgeting, approval and competitive evaluation processes that typically accompany significant IT expenditures. The Group’s sales cycles typically range between nine and twelve months from initial contact with a potential customer to the signing of a license agreement. Lengthy delays between the purchase of products and payment may cause the Group to incur significant expenses before payment by the customer, which could have a material adverse effect on the Group’s business, financial condition and results of operations.

Seasonality may cause the Group’s quarterly operating results to vary widely

The Group’s quarterly results are subject to seasonal fluctuations that are a factor of the market and sectors within which the Group operates. In particular, licence revenues are typically strongest in the fourth quarter, when a large proportion of customers with calendar yearend budgeting procedures make their purchasing decisions. In contrast, first quarter results are typically the weakest in the annual reporting cycle. In addition, the third quarter includes the summer months when both sales and billable client services activity, as well as client purchase decisions, tend to be lower, particularly in Europe. Such seasonal fluctuations may put stress on the Group’s cash position which may necessitate the Group drawing on existing working capital facilities or other sources of liquidity. As a result of seasonality of the Group’s revenues, the Group’s quarterly operating results may fluctuate materially and lead to volatility in the price of the Company’s shares, which may, overall, have a material adverse effect on the value attributed to the Group. In addition, the Group may have difficulty in accurately forecasting revenues on a quarterly basis. All of the foregoing factors could have a material adverse effect on the Group’s business, financial condition and results of operations.

The Group may face difficulties in the provision of its SaaS and Cloud services offering

SaaS and Cloud technology are relatively new to the banking and financial market sector, with broad adoption only in certain fields such as customer relationship management in retail banking and private wealth management. The Group will likely be subject to changing regulatory requirements, evolving customer attitudes and technical complexities in developing a new business offering and support services. The Group may fail to achieve desired operating profit results in this new market due to regulatory changes or inability to develop a competitive product which appeals to its clients.

By providing Cloud technology to customers the Group will hold a large amount of customer data. Hardware failures, product defects or system errors could result in data loss or corruption, or cause the information held to be incomplete or contain inaccuracies. The availability of the Group’s application suite could be interrupted by a number of factors, such as the failure of a key supplier, its network or software systems due to human or other error and security breaches. See also “—The Group’s information technology and network systems may be vulnerable to cybersecurity risks.”

Errors or defects in the Group’s software could adversely affect the Group’s performance and reduce the demand for its products and services

The Group’s products or services may contain errors or defects that could adversely affect the performance of such products and services and negatively impact the Group’s relationship with its customers. This risk is particularly pronounced in connection with the development of new products or services or new versions or enhancements of existing products or services. It is not always possible to identify and rectify any errors or defects during development, and the Group has discovered software defects in new or enhanced products or services after they have been introduced. The detection and subsequent correction of any errors or defects can be expensive and time-consuming, and it is not always possible to meet the expectations of customers regarding the timeliness and effectiveness of the remediation process. The Group may fail to rectify certain defects, in a timely manner or at all, or meet customer expectations. In such circumstances, customers may pursue claims for refunds, damages, attempt to terminate existing arrangements, request replacement software or seek other concessions.

A defect or error in any of the Group’s products could also result in adverse reactions by customers not directly affected by such defect or error and potential customers, all of which are highly sensitive to potential defects and errors in the software they use. Any negative publicity could reduce demand for the Group’s products and services. A defect or error in new versions or enhancements of the Group’s existing products could result in the loss of orders or a delay in the receipt of orders and could result in reduced revenues, delays in market acceptance, diversion of development resources, product liability claims or increased service and warranty costs. Any claim brought against the Group in connection with defective software, regardless of its merits, could entail substantial expense and require a significant amount of time and attention by management personnel.

Any error or defect in any Group products or services, and any related costs, liabilities and reputational damage, could have a material adverse effect on the business, financial condition and results of operations of the Group.

The Group may encounter difficulties in migrating clients to T24 and the Group’s other products

Historically, the Group’s business strategy was focused almost exclusively on the licensing and servicing of a single integrated banking software product, known as T24. Over the years, the Group has acquired and developed additional products to offer a multiproduct suite to a broad client base. Both the migration to new products and the introduction of new products entail implementation risks for the client. Although the Group has successfully migrated many clients to T24 and other products of the Group, any new client may encounter technical difficulties, delays or unexpected expenses as it completes the migration to this platform.

Unsuccessful, lengthy or costly customer migration projects could result in claims from customers or reputational damage to the Group, and could have a material adverse effect on its business, financial condition and results of operations.

The Group’s international operations are subject to burdensome and oftentimes conflicting legal and regulatory requirements

The Group services more than 3,000 clients in over 150 countries, and the Group has 62 offices in 41 countries. The Group’s future revenue growth depends on the successful continued expansion of its development, sales, marketing, support and service organizations, through direct or indirect channels, in the various countries around the world where its current and potential clients are located, including in many developing or newly industrialized countries. Such expansion will require the opening of new offices, hiring new personnel and managing operations in widely disparate locations with different economies, legal systems, languages and cultures, and will require significant management attention and financial resources.

The Group’s operations are affected by factors inherent in international business activities, such as:

differing and burdensome laws and regulations, including those governing practices, risk and compliance in the banking sector;

  • difficulties in staffing including works councils, labour unions and immigration laws and foreign operations;
  • the complexity of managing competing and overlapping tax regimes;
  • differing import and export licensing requirements;
  • operational difficulties in countries with a high corruption perception index;
  • protectionist trade policies such as tariffs;
  • limited protection for intellectual property rights in some countries;
  • difficulties enforcing intellectual property and contractual rights in certain jurisdictions;
  • differing data protection and privacy laws;
  • political and economic instability, outbreaks of hostilities, international embargos sanctions and boycotts; and
  • longer accounts receivable payment cycles or bad debt.

The risks and uncertainties associated with doing business internationally will intensify as the Group expands further into new countries and markets. Additionally, laws and regulations and governments’ approaches to their enforcement, as well as the Group’s products and services, are continuing to change and evolve. Managing Group compliance with the laws and regulations in the various jurisdictions involves significant management time and costs and may require costly changes to products, services or business practices. Failure to comply with any law or regulation in any of the jurisdictions in which the Group operates could result in prosecution, fines or reputational damage.

Any of the above risks related to the Group’s international operations could materially adversely affect the Group’s business, financial condition and results of operations.

The Group may fail to protect its proprietary technology

The Group relies upon a combination of copyright, trademark and trade secrecy laws, confidentiality procedures, contractual provisions and license arrangements to establish and protect its proprietary rights and the Group’s ability to do so effectively is crucial to its success. The Group enters into agreements with its employees, partners, distributors and clients that seek to limit the distribution of and otherwise protect its proprietary information. However, as such measures afford only limited protection, the Group may fail to prevent misappropriation of its proprietary information. The Group’s proprietary rights could be challenged, invalidated, held unenforceable or otherwise affected. Certain proprietary technology may be vulnerable to disclosure or misappropriation by employees, partners or other third parties, and third parties might reverse-engineer or otherwise obtain and use technology and information that the Group regards as proprietary. Accordingly, the Group may be unable to protect its proprietary rights against unauthorized third-party copying or utilization, which may undermine the Group’s market position and deprive it of revenues. In addition, the Group may be unable to detect unauthorized use of its intellectual property, or take appropriate steps to enforce the Group’s intellectual property rights. The Group’s products are used in operations in over 150 countries and subject to varying laws governing the protection of software and intellectual property in each of these jurisdictions, resulting in varying levels of protection and, in some jurisdiction, no effective protection at all.

Litigation, which could involve significant financial and management resources, may be necessary to enforce the Group’s proprietary rights. Moreover, any legal action that the Group may bring to enforce its proprietary rights could involve enforcement against a partner or other third party, which may have a material adverse effect on the Group’s ability, and its clients’ ability, to use that partner’s or other third parties’ products.

Any infringement of the Group’s proprietary technology or rights, or any failure by the Group to enforce its proprietary rights, could have a materially adverse effect on its business, financial condition and results of operations.

The Group may be subject to third party claims for intellectual property infringement

Although the Group believes that its products do not infringe upon the intellectual property rights of others, and that the Group has all the rights necessary to utilise the intellectual property employed in its business, the Group is still subject to the risk of claims alleging infringement of third-party intellectual property rights, including in respect of intellectual property that has been developed by third parties and acquired by the Group in business or asset purchase transactions. Responding to such claims, regardless of whether they are with or without merit, and negotiations or litigation relating to such claims could require the Group to spend significant sums in litigation costs, payment of damages and expend significant management resources. In addition, such claims could lead to shipment delays or require the Group to enter into royalty or licensing agreements on unfavorable terms, discontinue the use of challenged trade names or technology, or develop non-infringing alternative intellectual property. The Group’s liability insurance does not protect it against the risk that its own or licensed third-party technology infringes the intellectual property of others.

The number and intensity of intellectual property infringement claims, and related litigation, may increase significantly in the future as a result of, among other things: the growing number of products in the financial services software market; the Group acquiring companies which rely on third-party code; the expanding use of open source code; the Group expanding into new areas of the banking industry resulting in greater overlap in the functional scope of products; and increasing assertion of intellectual property infringement claims by non-practising entities that do not design, manufacture, or distribute products.

Any such infringement claims or similar or relates claims could have a material adverse effect on the Group’s business, financial condition and results of operations.

The group is exposed to litigation and other legal proceedings

The Group is and may from time to time in the future be subject to litigation, including class action complaints in the United States, arbitration, administrative, regulatory, fiscal and other legal proceedings. The Group’s involvement in any legal proceedings may require significant effort and be costly and time-consuming and may divert the attention of the Group’s management and resources from its business to address such legal proceedings. The Group may be unsuccessful in defending itself against any such claims. If a claim is resolved against the Group, it may have to pay substantial damages, settlement costs and, in turn, increased insurance premiums. Even if a claim is not resolved against the Group, it may incur significant related legal defense costs which the Company may not recoup and may face harm to its reputation from case-related publicity.

The outcome of any legal proceedings and the potential damages and other losses the Group may incur arising out of any current or future legal proceedings is inherently difficult to predict given, among other things, the complex nature of the facts and law involved. Deciding whether or not to provide for a loss in connection with such legal proceedings requires the Group to make determinations about various factual and legal matters beyond its control. Legal proceedings for which the Group has recognized insufficient provisions and any future related claims or for which the Group has not recognized any provisions may have a material adverse effect on the Group’s business, financial condition and results of operations.

The Group may fail to comply with the terms of its credit facilities

The Group has credit facilities in place with a syndicate of banks. The facilities contain financial and negative covenants, undertakings and event of default provisions. Moreover, the facilities contain cross-default provisions such that a default under another debt instrument could result in a default under the credit facilities and acceleration of the debt thereunder. Any failure to comply with the terms of the Group’s credit facilities, or any cross-default, could prevent the Group from drawing under such credit facilities to satisfy the Group’s working capital or other requirements or result in acceleration or cross-acceleration of the amounts owed under such credit facilities. Any such event could have a material adverse effect on the Group’s business, financial condition and results of operations.

Complex software and hardware systems may be breached, interrupted or could fail

The Group is highly dependent on the proper functioning of complex software and hardware systems. It may fail to maintain the uninterrupted operation and full security of all its systems. Any failure of any such system or any associated backup facility could lead to a business disruption with severe consequences. Any failure to manage IT security risks appropriately or data losses, breaches to the IT security systems or any other failure of the Group’s complex software and hardware systems could lead to legal sanctions, civil claims, significant remediation costs, reputational damage, potential cancellation of customer contracts and inability to compete future business. It could, in turn, have a material adverse effect on the Group’s business, financial condition and results of operations.

The Group’s business may be impacted by acts of war, terrorist attacks, severe weather conditions, natural disasters and other catastrophic events

The Group’s business operations are vulnerable to interruption from natural and manmade threats including but not limited to fire, severe weather conditions, floods, earthquakes, volcanic activity, explosions at or near Group facilities or other threats such as terrorist acts, acts of vandalism, social unrest, pandemic and other disasters or catastrophic events. This risk is exacerbated by the fact that some of the Group’s systems or facilities are based in locations with significant exposure to such threats; as the Group continues to expand into new countries and markets, such threats could intensify.

The occurrence and timing of such events cannot be predicted or controlled. As a result of these events, the Group may be unable to adequately serve its customers, which could damage those relationships, the Group may be required to incur unanticipated costs, or the investment decisions of the Group, its partners and customers may be impacted. The occurrence of any of such event, or other events with similar effects, could have a material adverse effect on the Group’s business, financial condition and results of operations.

The Group’s information technology and network systems may be vulnerable to cybersecurity risks

The Group’s information technology systems and network infrastructure may be exposed to cybersecurity risks such as cyber-attacks and other internet crime, unauthorized access and physical damage, computer viruses, worms and malware and a range of other hardware, software and network security issues. Any such cybersecurity risk may be the result of one or a combination of third-party action, employee error and malfeasance, and state or competitor-driven actions such as industrial espionage. An external information security breach, such as a hacker attack, a virus or worm, or an internal problem with information protection, such as failure to control access to sensitive systems, could materially interrupt the Group’s or its clients’ business operations (including as a result of the unavailability of the Group’s applications suite) or cause disclosure or modification of sensitive or confidential information (including personally identifiable information, the loss, leak or disclosure of which could expose the Group to particularly severe consequences). Such a failure could result in material financial loss, breach of client contracts, reputational harm and significant legal liabilities.

Although the Group employs security, data protection and privacy measures, such precautions may prove inadequate or may fail. The increasing frequency and sophistication of recent cyber-attacks has resulted in an elevated risk profile for many organizations around the world, including the Group. In addition, the Group’s insurance policies may not cover claims relating to loss or security breach of data or other indirect or consequential damages. Moreover, defending a suit, regardless of its merit, could be costly and time-consuming.

If any of these or other cybersecurity risks materializes, the Group’s reputation could be harmed significantly and the Group’s business, financial condition and results of operations could be materially adversely affected.

Internal controls may not effectively address all material risks affecting the Group

Although the Group considers the controls and procedures it currently has in place to minimise the financial reporting, legal, disclosure and other regulatory, compliance and operational risks associated with its business to be adequate for its purposes, the Group recognises that the efficacy of some of these controls and procedures depends significantly on employees and contractors, and on input from external legal and other advisers and all of these controls and procedures need to be kept under regular review, particularly given the pace at which the Group’s business has developed and generally increasing regulatory scrutiny. There can be no assurances that the Group will be able to identify and adequately remedy all failures or weaknesses in the internal controls and procedures of the Group.

There is no assurance that the Group will not be targeted by those willing to commit fraud against the Group. Such an action could come from either an internal or external source and could result in a significant adverse impact on the Group’s business, financial condition and results of operations.

Risk Factors Relating to the Shares

There may be limited liquidity in the market for the Shares in the future

The Shares are listed and traded on SIX Swiss Exchange. There can be no assurance regarding the liquidity of the Shares. The volume of the trading market for the Shares on the SIX Swiss Exchange may been low in the future. Therefore, the trading market may not provide enough liquidity to allow shareholders to trade or sell their Shares easily or at all.

The market price or trading volume of the Shares could decline as a result of unfavorable or inaccurate analyst reports

The trading market for the Shares depends in part on the research and reports that securities or industry analysts publish about the Group or its business. The Company does not control these analysts. If one or more of the analysts that cover the Company publish unfavorable or incorrect research about the Group’s business, or downgrade their recommendation with regard to the Shares, the price of the Shares would likely decline. If one or more of these analysts cease coverage of the Company, or fail to regularly publish reports on the Group, the Group could lose visibility in the market, which in turn could cause the trading volume in the Shares or the price of the Shares to decline.

The Company’s ability to pay dividends to shareholders is dependent on external and other factors, including on distributable profits or distributable reserves from capital contributions

The Company is a holding company with no significant assets other than the equity interests in its subsidiaries. The Company’s subsidiaries own substantially all the rights to its revenue streams. The Company’s ability to pay dividends to its shareholders depends on the availability of sufficient legally distributable profit, which depends on the performance of its subsidiaries and their ability to distribute funds to the Company, or on the availability of distributable reserves from capital contributions at the Company level. The ability of a subsidiary to make distributions to the Company could be affected by a claim or other action by a third party, including a creditor, or by laws which regulate the payment of dividends by companies, including, but not limited to, capital requirements applicable to the Company’s subsidiaries. The subsidiaries’ ability to distribute funds to the Company depends on, among other things, the availability of sufficient legally distributable profit of such subsidiaries. The Company cannot offer any assurance that legally distributable profit or reserves from capital contributions will be available in any given financial year.

Even if there is sufficient legally distributable profit available, the Company may not pay a dividend for a variety of reasons. Payments of future dividends will depend on the Company’s earnings, strategy, future outlook, financial condition and other factors, including regulatory and liquidity requirements, as well as tax and other legal considerations.

The future issuance of equity or other securities that are convertible into equity could dilute the Company’s share capital or existing shareholders

The Company may choose to raise additional capital in the future, depending on market conditions or strategic considerations. To the extent that additional capital is raised through the issuance of equity or other securities that are convertible into equity, the issuance of such securities will dilute the proportional holding of the Shares by investors.

Shareholders outside Switzerland may not be able to exercise pre-emptive rights in future issuances of equity or other securities that are convertible into equity

Under Swiss law, shareholders may receive certain pre-emptive rights to subscribe on a pro rata basis for issuances of equity or other securities that are convertible into equity. Due to laws and regulations in their respective jurisdictions, however, non-Swiss shareholders may not be able to exercise such rights. There can be no assurance that the Company would take any action to register or otherwise qualify the offering of subscription rights or shares under the law of any jurisdiction where the offering of such rights is restricted. If shareholders in such jurisdictions were unable to exercise their subscription rights, their ownership interest in the Company would be diluted.

Shareholders in countries with currencies other than the Swiss franc face additional investment risk from currency exchange rate fluctuations in connection with their holding of Share

The Company’s Shares will be quoted only in Swiss francs and any future payments of dividends on the Company’s Shares will be denominated in Swiss francs. The foreign currency equivalent of any dividend paid on the Company’s Shares or received in connection with any sale of the Company’s Shares could be adversely affected by the depreciation of the Swiss franc against such other currency.

The market for and the price of the Shares may be highly volatile and the price of the Shares could decline significantly.

The market for and the price of the Shares may be highly volatile and may be affected negatively by events involving the Group, its competitors, the financial markets or the economy in general. The capital markets have been experiencing extreme volatility and disruption for the past years. In some cases, the markets have produced downward pressure on stock prices for certain issuers seemingly without regard to those issuers’ underlying financial strength. Factors that could cause the market price for the Company’s Shares to fluctuate substantially in the future, including:

  • Announcements of developments related to the Group’s business;
  • Fluctuations in the Company’s results of operations;
  • The liquidity of the market for the Shares;
  • Differences between the Group’s actual or projected financial or operating results and those expected by investors and analysts;
  • Sale of substantial amounts of the Company’s securities into the marketplace;
  • General or perceived conditions in the Group’s markets or the worldwide economy;
  • Changes in securities analysts’ recommendations or projections;
  • Additions and departures of key personnel;
  • Speculation in the press or investment community;
  • Changes in accounting principles;
  • General market sentiment;
  • Extraneous geopolitical factors;
  • Perception of the Company’s announcement of new acquisitions or other projects;
  • Investors’ perception as to the success and impact of the strategy pursued by the Company and the Group, including any acquisitions, dispositions and other strategic transactions; and
  • Changes in laws or regulations applicable to the Company or the Group.

Changes or fluctuations in the Company’s share price may also have a number of follow-on effects which are difficult for the Company to anticipate or control, including, adversely affecting the Group’s perceived credit quality among its clients and financing sources.

Investor FAQ's

On Which Index Is Temenos Listed?

Temenos shares are listed on the main segment of the SIX Swiss Exchange under the symbol “TEMN”.

When Did Temenos Go Public?

Temenos went public on 26 June 2001.

How Many Shares Are Outstanding?

Total ordinary shares: 73.5 million shares (as at 31/12/19), with 95% free float.

How Does Someone Buy Temenos Shares?

Temenos stock can be bought or sold through a stock broker, bank, or generally through a financial institution that provides brokerage services.

Does Temenos Pay out Dividends?

Temenos’ policy is to pay a growing dividend. For year ended 31 December 2019, Temenos has proposed a dividend of CHF0.85 per share. This is subject to approval at the 2020 AGM taking place on 20th May 2020.

– Out of the total dividend of CHF 0.85, half of it (CHF 0.425) will be treated as last year and be paid as a distribution of reserve from capital contributions, therefore exempted of withholding tax (share premium dividend).
– Out of the total dividend of CHF 0.85, half of it (CHF 0.425) will be taxable (WHT 35%) taken out from the retained earnings (cash dividend).

Do Temenos Employees Participate in the Company’s Stock Programs?

Temenos offers its employees and managers various stock participation programmes such as the ESOP plan and the SARS plan.

How to Contact Temenos Share Register? ag

Fabrikstrasse 10, 4614 Hägendorf

Tel. +41 62 209 16 60 Fax +41 62 209 16 69

[email protected]

How Can I Access Past Earnings Releases?

All press releases and presentations are listed in our Financial Results sections

When Does the Next AGM Take Place?

You can find all Temenos financial dates in our Financial Calendar.

What Is Temenos’ Current Headcount?

Temenos has over 8,000 employees worldwide.

Who Are Temenos’ Auditors?

Temenos is audited by PricewaterhouseCoopers SA.

When Is Temenos’ Year End?

The year end for Temenos is 31 December.

In What Currency Are Temenos’ Results Published?

Even though Temenos is listed on the Swiss Exchange, our accounts are published in U.S. dollars.

Which Accounting Standard Does Temenos Use for Its

Temenos annual financial statements are prepared in accordance with International Accounting Standards and International Financial Reporting Standards (“IAS-IFRS”) issued by the International Accounting Standards Committee

Does Temenos Only Serve Banking and Finance?

Yes, unlike many of our competitors, Temenos only serves one set of customers. Because of this focus, we are true specialists, with deep domain knowledge.

Who Are the Largest Competitors of Temenos?

We compete with a variety of institutions, ranging from other large, and specialist software and services vendors, to in-house IT departments of financial institutions that carry out software development.