Temenos reports results for 2008 : ran 44 go-lives and signed 48 new deals

Temenos, the provider of core banking solutions, reports its final […]

March 15, 2009

Temenos, the provider of core banking solutions, reports its final audited financial results for the full year 2008 and provides outlook for 2009.

2008 Financial and Operating Highlights

Revenue of USD407m, up 23% on 2007 and adjusted EPS of USD1.13, an increase of 10% compared to 2007. 48 new clients signed, including many prominent names across a broad cross-section of banking verticals and geographies. 44 new client go-lives (up from 36 in 2007), including Bank of Shanghai, which, with 11 million accounts and around 2.5m transactions per day, became T24’s highest volume retail reference site.

Further independent recognition of product quality, including T24’s promotion to “leader” in the Forrester Wave: “Global Banking Platforms, Q1 ’09” and T24 winning for the second consecutive year the Banking Technology Readers’ award for Best Core Banking Product The successful conclusion and integration of three strategic acquisitions, providing, inter alia, improved services capacity, supplemental high margin maintenance revenues, product enhancements as well as substantial costs and revenue synergies, all of which are delivering significant value to our shareholders.

Commenting on the results, CEO Andreas Andreades said, “Overall, 2008 was another good year for Temenos. We grew revenue and profits, successfully completed and integrated three strategically important acquisitions and produced a number of operational successes – such as a record number of customer go-lives. However, trading through the fourth quarter was difficult. Uncertainty regarding 2009 made some CEOs reluctant to commit to big projects, which adversely affected our closure rates. As a consequence, management has taken a number of actions to protect shareholder value and mitigate the impact of the difficult economic environment.

We have substantially reduced our 2009 cost base and, together with the increase in locked-in maintenance, we believe that the business is capable of delivering higher margins and profitability in 2009. We expect our 2009 costs to be USD33m lower than 2008 pro-forma levels, which, coupled with a baseline maintenance stream of around USD118m, allows us to be comfortable with our margin outlook of 19% to 20% and our target of at least 75% EBITDA to operating cash conversion. Thanks to its significant growth over recent years, Temenos is now of a size and scale where it can manage costs to manage margins.

Looking ahead, we have a bright future. The market for core banking software has strong, sustainable drivers and Temenos is currently the best-placed company in this market. Once the outlook for banks has stabilised, they will once again focus on improving return on assets. Core replacement, by facilitating cost efficiency and revenue growth, will again become a strategic priority. As the market leader in the packaged core banking market, Temenos will capitalise on this growth.”

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