GENEVA, Switzerland, 22 May 2017 – Temenos (SIX: TEMN), the software specialist for banking and finance, today announces that the acquisition of Rubik Financial Limited (‘Rubik’), a leading software provider to the Financial Services sector in Australia, has now closed. The acquisition was originally announced on 14 February 2017.
Founded in 2007, Rubik is an Australia–based software company providing banking, wealth management and mortgage broking solutions, primarily in Australia and also internationally across Asia and the Middle East. Rubik has more than 150 employees servicing 930 direct clients.
The combination of Rubik and Temenos will create a leader in the Australian market, enabling Temenos to benefit from increased scale and to accelerate growth across its key target segments including wealth, core and digital banking and fund administration. The Australian market represents a significant opportunity for Temenos, with spending on banking software forecast to grow at an 8% CAGR in the medium term and with the 4th largest investment market globally driven by the superannuation scheme.
Through the acquisition, Temenos now has relationships with 41 of the world’s top 50 banks, up from 38 prior to the acquisition, with the addition of Commonwealth Bank Group, National Australia Bank and Westpac Banking Corporation to the Temenos client base.
Temenos has acquired 100% of the issued capital of Rubik for approximately A$68 million (US$50 million). The acquisition was funded from Temenos’ existing cash.
The transaction is expected to contribute US$15m of non-IFRS revenues and to be non-IFRS EPS neutral for Temenos in 2017, and 3% accretive in 2018.
Revised 2017 Outlook
Temenos revised its outlook for the year as follows*:
- Total non-IFRS software licensing growth at constant currencies of 15% to 20% (implying total non-IFRS software licensing revenue of USD 287m to USD 300m, up from USD 276m to 288m)
- Total non-IFRS revenue growth at constant currencies of 10% to 13% (implying non-IFRS revenue of USD 682m to USD 704m, up from USD 667m to USD 689m)
- No change to non-IFRS EBIT at constant currency of USD 210m to 215m (implying non-IFRS EBIT margin of c.31%)
- 100%+ conversion of EBITDA into operating cashflow
- Tax rate of 14% to 15%
*Assumes FX rates as disclosed in the Q1 2017 results presentation – https://www.temenos.com/en/about-temenos/investor-relations)
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. 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. Below are the accounting elements not included in the 2017 non-IFRS guidance:
- FY 2017 estimated deferred revenue write down of USD 3m
- FY 2017 estimated amortisation of acquired intangibles of USD 35m
- FY 2017 estimated acquisition related charges of USD 2m
- FY 2017 estimated restructuring costs of USD 7m
Restructuring costs include realising R&D, operational and infrastructure efficiencies. These estimates do not include impact of any further acquisitions or restructuring programmes commenced after 22 May 2017. The above figures are estimates only and may deviate from expected amounts.