Temenos Announces Preliminary Results for 2014

Press Releases, January 13, 2015

Temenos – Company

Following a preliminary review of the 2014 figures, the company expects the following outcome for the year:

• Like-for-like Software licensing growth of 0% to 5% (implying software licensing revenue of USD 136m to USD 143m, versus the previous implied guidance range of USD 151m to USD 158m)
• Total non-IFRS like-for-like revenue growth of 0% to 2% (implying non-IFRS revenue of USD 466m to USD 476m, versus the previous implied guidance range of USD 489m to USD 512m)
• Non-IFRS EBIT growth of between 11% and 20% (implying USD125m to USD 130m compared to the previous implied dollar range of USD 124 to USD 130m)
• Cash from operations of c.USD190m, representing a conversion of more than 110% of EBITDA into cash

Commenting on the results, Temenos CEO David Arnott said: 

“The Q4 licensing figure was very disappointing and owed to weak sales execution predominantly in the Asia Pacific region, where sales contracted in the year. 

Despite weaker than expected licence sales in Q4, the fundamentals of the business remain intact. There were no major lost deals in the quarter. We continue to see strong and growing levels of demand, especially for core banking replacement and digital channels. Operating profits still grew strongly as lower than expected licence revenue growth was offset by lower sales commissions and lower variable pay, underlining the strong control we maintain on costs. Cash generation was very strong, continuing a sustained improvement in DSOs. 

Looking into 2015, given the strong progress made on large deals and the fact that we did not lose any significant deals in Q4, we expect licence revenue growth of at least 10%. In addition, we expect margin improvement of at least 100 basis points, which will lead to another year with strong growth in profits, and cash conversion of over 100% for the fifth year running.” 

Full year results will be published on 10 February 2015 after the market close, at which time Temenos management will update the market on its outlook for 2015. The company will be holding an analyst and investor day on 11 February in London.  Further details can be found on the Temenos website.

Non-IFRS Financial Information

Readers are cautioned that the supplemental non-IFRS information presented in this press release is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for IFRS measurements. Also, the Company’s supplemental non-IFRS financial information may not be comparable to similarly titled non-IFRS measures used by other companies. In the reconciliation of IFRS to non-IFRS found in Appendix II, the Company sets forth the most comparable IFRS financial measure and reconciliations of this information with non-IFRS information. The Company’s non-IFRS figures exclude any deferred revenue write-down resulting from acquisitions, discontinued activities that do not qualify as such under IFRS, acquisition related charges such as advisory fees and integration costs, charges as a result of the amortisation of acquired intangibles, costs incurred in connection with a restructuring plan implemented and controlled by management, and adjustments made to reflect the associated tax charge relating to the above items.