Ivan Martin

CEOMisys Banking Division

Misys Banking Division Strategy Ivan Martin

Business Drivers Steve Gowers

Product Management Jerry Luckett

Break

Three Great Stories

SummitFT Georges Bory

MidasPlus Andrew White

EquationPlus Andrew Derrer

Summary Ivan Martin

Questions and Answers All

Agenda

Key messages

1. Banking is a large and growing software market

2. Misys is well positioned to benefit from this growth

4. Misys is growing its market share in key markets

3. Misys leads in functionality and technology

5. Retail is key growth sector going forward

Where were we?

What did we do?

Where are we now?

Where were we?

What did we do?

Where are we now?

What did we see in 2002?

“Products are old legacy back office systems”

“We see no product roadmap for the future”

“There is a risk the business will not benefitfrom a recovery in spending”

In 2002 you told me …

“Losing market share to competitors”

What did we see in 2002?

Revenue£m

50

100

150

1996 1998 20022000

Banking Division ILF

- ILF moving annual total- Smoothed ILF trend line

Where were we?

What did we do?

Where are we now?

ColumbusPortfolio

ManagementTalent

Management

Services R&D investment

What did we do?

Product Management

Banking software market

Securities

Treasury

International Retail

Asset Mgmt

Corporate

Significant opportunities in target markets

Addressable market > $5bn

US Retail

BankingDivision

Healthcare Systems Division

Financial Services Division

Financial Services Division

Misys Retail Banking

Misys Risk Management Systems

Summit Systems

Misys Wholesale Banking Systems

Misys Banking Division

ColumbusPortfolio

ManagementTalent

Management

Services R&D investment

What did we do?

Product Management

Over$100 bn

Below$5 bn

Private

Banking

Investment

Banking

Retail

Banking

Corporate

Banking

UniversalBanking

Misys and Banking Systems Market

Ass

et s

ize

of

Ba

nk

EQUATION

BANKMASTER

RIS

KMIDAS

OPICS

SUMMIT

GMS

LOAN IQ

Boxes represent market coverage – not size of business

ColumbusPortfolio

ManagementTalent

Management

Services R&D investment

What did we do?

Product Management

ColumbusPortfolio

ManagementTalent

Management

Services R&D investment

What did we do?

Product Management

Product management

Lifecycle mgmtIntroductionGrowth

MaturityDecline

Evaluation

Qu

alif

icat

ion

Def

init

ion

Operation

Businessas usual

LaunchDesign

Build

Alpha & Beta

Development

“Build”Decision

“General release”Decision

Ma

rke

t U

nd

ers

tan

din

g Market Engagement

Competitor information

Customer requirements

Technology innovations

Misys vision

Market drivers

“Go external”to beta

Ou

tlin

e

‘Delivering the solutions our customers want, when they want them’

ColumbusPortfolio

ManagementTalent

Management

Services R&D investment

What did we do?

Product Management

ColumbusPortfolio

ManagementTalent

Management

Services R&D investment

What did we do?

Product Management

R&D Man Days

Back-office

Technology

Front-office

+ 55%

R&D

20

60

100

140

2003/4 2006/7

Increasing offshore capacity

(,000)

0

Where were we?

What did we do?

Where are we now?

• Banking software markets are generally improving

• Conditions vary significantly between sectors– Retail banking continues to show sustained growth– Wholesale banking and capital markets have stabilised– Marked regional differences; activity in emerging markets

• Underlying market drivers still apply– Cost containment– Regulation– Rising consumer expectations

• Long term trends continue– Move away from in-house software to third party packages

Banking market conditions

Source: Annual Reports and Private Company estimates. Source: 2002 financial statements & Misys estimates

Market structure - banking software revenues

Auckland Bahrain Bangalore Bangkok Beijing Brussels DubaiDublin Frankfurt Hong Kong Jakarta Jo’burg Kuala Lumpur Lisbon London Lux’bourg Madrid Manila Mexico Miami Milan Moscow Munich New York Paris Riga Sao Paolo Seattle Singapore Slough Sofia Sydney Tokyo Utrecht Warsaw White Plains Zurich

Global power – local knowledge

Portfolio moved to new areas of growth

Increased investment in R&D

Increased Treasury & Capital Markets market share

Strong evidence of traction in our installed base

Achievements in 2004

Retail benefiting from market facing structure

Best increase in H2 order intake in 3 years

Closing order book up strongly

H2 professional services grew by 20%

Professional Services backlog grew by greater than 70%

Achievements in 2004

Maintenance revenues stable

Business Drivers

Steve GowersBusiness Development Director

Misys Banking Division

Misys focus

• Misys is focused on providing business critical systems in specialist vertical markets

• Characteristics of vertical markets:– Depth of industry knowledge

– Depth of software IPR

– Specialist skills able to rapidly deliver solutions

– Demand for mature and proven systems

– Long lead times

• Different drivers from ‘horizontal’ markets (e.g. ERP)

What drives growth in vertical markets?

How do vendors compete in vertical markets?

What drives growth in vertical markets?

How do vendors compete in vertical markets?

1. Breadth of product portfolio

2. Depth of IPR

4. Breadth and depth of geographic network

3. Size & quality of development capability

5. Ability to sell into installed base

Competitive dynamics in vertical markets

Over$100 bn

Below$5 bn

Private

Banking

Investment

Banking

Retail

Banking

Corporate

Banking

UniversalBanking

Breadth of product portfolio

Ass

et s

ize

of

Ba

nk

EQUATION

BANKMASTER

RIS

KMIDAS

OPICS

SUMMIT

GMS

LOAN IQ

Boxes represent market coverage – not size of business

Depth of IPR

MidasPlus• Midas represents 14 million lines of code in total, with 168

functional modules

• MidasPlus release was 3 years in the making, delivering 3 million lines of new software

• IAS Compliance was 50 man years of investment

SummitFT• Summit represents 6 million lines of code in total

• SummitFT release was 3 years in the making

• SummitFT and MUST alone represent an investment of over 75 man years

Size and quality of development

Sales and MarketingSoftware

DevelopmentProduct Management

Support

Services

F&A

2,600 specialist staff

More than 1,000software engineers

Auckland Bahrain Bangalore Bangkok Beijing Brussels DubaiDublin Frankfurt Hong Kong Jakarta Jo’burg Kuala Lumpur Lisbon London Lux’bourg Madrid Manila Mexico Miami Milan Moscow Munich New York Paris Riga Sao Paolo Seattle Singapore Slough Sofia Sydney Tokyo Utrecht Warsaw White Plains Zurich

Breadth and depth of network

Ability to sell into installed base

3 Core systems• Midas 450 Wholesale and international banks• Equation 270 Retail banks• BankMaster 190 Retail and Universal banks

4 Departmental solutions• Summit 110 treasury & capital markets operations• Opics 130 treasury departments• GMS 800 banks, funds and corporates• Loan I/Q 30 banks

Enterprise Risk• Risk Vision 30 banks

Count is number of discrete BanksTotal = more than “1400 customers” because many clients have multiple systems

Ability to sell into installed base

Upgrades/Extensions

Contracts signed in FY03/04

New product

New customer

Funded dev/Other

55% of Misys contracts were for new product and new customers

45% of Misys contracts were for extensions of existing business

Additional volume

Analysis based on numbers of contracts

What drives growth in vertical markets?

How do vendors compete in vertical markets?

1. New technology cycles

2. Growth in underlying business volumes

4. A return to IT spending for competitive advantage

3. Increasing burden of regulation/reporting

5. Trend to use of third-party vendors

Drivers of growth in vertical markets

Growth drivers – technology cycles

IT Spending Cycles

74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04

Source: Bureau of Economic Affairs

ISV’s

Mini-computers

Client-Server

Euro andY2K

Services Oriented Architecture

Growth drivers – underlying volume

1994

2.0 billion

1.8 billion

1.6 billion

1.4 billion

1.2 billion

1.0 billion

0.8 billion

0.6 billion

0.4 billion

19981996 2000 20042002

2,007,551,750 messagesTransaction Volumes

Swift estimate that Misys systems generate 15% of all transactions in their network.

Misys is at the heart of banking

Growth drivers – underlying volume

1994

$1.50 trillion

$1.25 trillion

$1.00 trillion

$0.75 trillion

$0.50 trillion

$0.25 trillion

19981996 2000 20042002

Global FX Volumes$1.4 trillion per day

Misys GMS confirms approximately 7% of the world’s $1.4 trillion daily foreign exchange transactions

This equates to $100 billion per day through Misys GMS ASP solution

Growth drivers – regulation/reporting

SimpleLightly RegulatedOld Boy Network

ComplexHighly Regulated

Performance Culture1984

2004

Growth drivers – competitive advantage

Cost Reduction

88% of CIO’s

Customer Service

ServiceCosts

Service Quality

70% of Customers

Cost

Other

Growth drivers – quality imperative

NatWest

3K

1

100K

Fails/Million

50K

Fails/Million

Growth drivers – shift to third-parties

Source: Celent – IT Spending Europe 2004

Bank IT budget allocation

90%10%

New Projects

Maintenance

Maintenance v New Projects

91%76%

9%24%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2004

Internal v External Software

The new era and Misys

‘Delivering the solutions our customers want, when they want them’

Functionally rich

Component based

Engineered on Java & .NET

With compliance built in

Product Management and Development Process

Jerry LuckettProduct and Strategy Director

Misys Wholesale Banking Systems

Resource Allocation

Internal Return

Market Requirements

Target Market

Solutions to Meet Requirements

Product management objectives

Evaluation

Qu

alif

icat

ion

Def

init

ion

“Build”Decision

Ma

rke

t U

nd

ers

tan

din

g

Competitor information

Customer requirements

Technology innovations

Misys vision

Market drivers

Ou

tlin

e

Product management process

Operation

Businessas usual

Market- Launch

“General release”Decision

Lifecycle mgmtIntroductionGrowth

MaturityDecline

Design

Build

Alpha & Beta

Development

“Go external”to beta

Market Engagement

Customer involvement

Strategic Development Partnerships

Customer Advisory Boards

User Groups

Funded Development

Market Research

RequirementsDefinition

SystemSpecification

Design Construct Integration

TestQuality

AssuranceControlled

DeploymentOngoing Fix

Quality ManagementDevelopment Process – Development Standards – Quality Plan – Quality Audit – BMS / ISO Accreditation

Configuration ManagementDoc Set Mgmt – Version Control – Collection – Packaging – Shipping – Dev Schedule – Dev Facility – Client Inventory

Project ManagementDev Plan – Test Plan – Deployment Plan – Dev Tracking

Development process

The move to offshore and outsourcing

• Misys has been creating offshore capacity for more than a decade

• What we gain from offshoring:– Lower unit costs

– Increased capacity

– 24 hour development capability

– Access to wider skill pool

– Significant local market presence

• In addition outsourcing also provides a variable cost model

Lower Cost

Moving to offshore cost base

Getting It Right!• Have an ambition, know your

target• Plan offshore/onshore mix• You are moving, your

customers are not• Inject product skills through

secondment• Recruit and train• Protect domain knowledge –

realignment strategy• Excellent communications

2004

2007

Summary

• Know what you want to build

• Get the software factory working effectively and efficiently

• Result– Focus on growth products and new markets

– Output that meets and exceeds industry quality standards

• Increase development capacity without increasing the R&D to revenue ratio

SummitFT

Georges BoryManaging DirectorSummit Systems

Summit – a brief introduction

Product• Treasury & Capital markets

solution 400+ staff in 8 countries world-wide

• 110 global customers • Consistent management

and technology strategy• Loyal customer base

Resources• Core development in NY & Paris• Outsourcing partner• Support and local development

New York, Paris, London, Frankfurt, Singapore, Seoul, Tokyo

• Sales – global resource

Target Markets• Primarily Tier 2 & 3 banks• Some Tier 1• ASP solution for Tier 4 / corporates

Technological advantages - .NET and real time services

Market leading tool for exotics & structured products

Modular Technology that grows with clients needs

Breadth & Depth of functionality – No. 1

One Solution front-to-back covering multiple asset classes

ASP

Summit solutionDerivatives

Treasury

Commercial Lending

Fixed Income

Derivatives

Fixed Income

• Bonds

• MTNs

• MBS/ABS

• Repos

• Sec Lending

• GICs

• Emerging Mkt

Treasury

• Loans

& deposits

• Foreign

Exchange

• Money

Market

securities

Derivatives

• Interest Rate

• Credit

• Currency

• Equity

• Bonds

• Commodity

Lending

• Syndicated

Loans

• Bilateral

Loans

• Exotics & Structured (MUST)

Multi-asset class coverage

• Client - Server • C • Unix• Sybase

1990 200019981996 2001 20021993 2003

MARKETS RISK MANAGEMENTDERIVATIVES FRONT OFFICE

MONEY MARKET and FIXED INCOMEDERIVATIVES BACK OFFICE

CREDIT DERIVATIVESTREASURY FRONT to BACK OFFICE

REAL TIME FXCOMMERCIAL LENDING

REAL TIME STPDISTRIBUTED RISKS

EQUITY DERIVATIVESWEB TRADING

CASH MANAGEMENT

•Extendible Data Model• Customizable GUI• Pricing API

• C++• Native NT• Oracle-Sybase• Product Formula• Excel Add-In

• 3 Tier Corba Orbix • Gateway • RT FX Position Server• RT Event API

• eToolkit Excel / Java• XML• Credit Server• Risk Server

• RT STP Framework• Web Trading• MS SQL Server• FpML

2004

FT MS .NET• Parallel Distributed architecture EXOTICS &

STRUCTURED TRADES

• MUST• Linux• Grid Computing• SOAP & Web Services

14 Years Track Record

Product evolution

Investing ahead of the curve

• Increased R&D during downturn• Ready with market leading technology for upturn• Followed a consistent product strategy and vision• Employed and retained product development and product marketing expertise• 54,000 R&D man days over 5 years

Summit R&D vs Nasdaq

0

5,000

10,000

15,000

20,000

99/00 00/01 01/02 02/03 03/04

Year

R&

D m

an d

ays

0

1,000

2,000

3,000

4,000

5,000

R&D NASDAQ

Client examples

Global Investment Banks

International Wholesale Banks

Regional & Large Local Banks

Hedge Funds/Corporates

Our customers speak for us

The processing and managing of trades will be massively improved with Summit and I expect to see a quick return on our investment.

Our decision to pool all applications into one with Summit as the BLB core solution for investment banking, will help us achieve this goal. Replacing such a large number of systems will reduce costs in many areas by reducing system complexity and improving STP.

I was impressed by Summit’s product knowledge and the capability of its solution. It will provide us with flexible pricing, integrated risk management and back-office tools that will enable us to establish and grow our business in this competitive and profitable market.

Market trends

“Banks are looking to consolidate vendors”

“Treasury technology spend is now starting to see strong signs of recovery and positive growth rates, and Datamonitor predicts CAGRs of 3.2% and 2.9% from 2002 to 2006 in Europe and the US respectively. “

“the deadline for IAS39 compliance, together with overall pressures to centralize treasury technology in order to improve operational efficiency, is going to drive significant increases in year-on-year growth of investment until 2006 and beyond”

“ISDA has estimated that the credit derivatives market has doubled for each of the last six years - $3.58 trillion by the end of 2003 with 51% growth expected in 2004”

The Summit advantage

Breadth and depth

Regulatory compliance

Corporate strength

Business specialists

Technological advantage

14 years experience

33 banks of the top 100 Banks use Summit

Worldwide customer base

Summit MUST

MidasPlus

Andrew WhiteCEO

Misys Wholesale Banking Systems

This is Midas!

Loyal customer base – TRUST

Global product, local features, local support

Unmatched corporate banking capabilities

International branches and regional banks

Most successful banking software package ever

25 years of change

IT Spending Cycles

74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04

Source: Bureau of Economic Affairs

ISV’s

Mini-computers

Client-Server

Euro andY2K

Manual operations

Change again. Banks are under pressure.

Rocketing customer expectations

Regulation

Risk

Competition: markets, products, price

Next phase

IT Spending Cycles

74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04

Source: Bureau of Economic Affairs

ISV’s

Mini-computers

Client-Server

Euro andY2K

Services Oriented Architecture

This is MidasPlus!

Multi-channel eServices platform

Head office solution

Straight Through Processing (STP)

Global processing

Open architecture

MidasPlus – A whole new world

Deep functionality

Tightly integrated yet flexible

Improved functionality

Strong support

New solution - with pedigree

Customer self service

Modern technology platform

Deployment options

Open

Efficient

Faster time to market

Development tools

Delivering global processing solutions

Improved customer service

Cost and credit control

Reduced risk

Cross-selling opportunities

Agility

The Power of One

Roadmap – more to come!

• Client Server• GUI

1996 200220001999 2003 20041997 2005

Syndicated LendingPrivate BankingEuro Support

Y2KIBAN SupportRepo ProcessingCollaterals Register

CLSCredit Risk management

ISO15022Profit Centre AccountingOvernight Index Swaps

IAS 39Cash Mgmt

IAS 18, 32Local FeaturesCollateral LendingManagement Limits

KYCeServicesLocal FeaturesGlobal ReportingSyndication Manager

• Messaging• APIs

• iSeries• Integration Toolkit

• MUI• MQ Series

• J2EE• 10 Digit Account• Websphere

• Thin Client• Web Services• i5/OS

2006

Enhanced Front OfficePrivate BankingEnhanced RetailLocal FeaturesRevenue Analysis

• Full API support• User Defined Forms• SOAP

• Advanced Processing• Component based

solutions• Business Routing

25 Years Track Record

Single biggest investment in Midas, ever

First two customers in production before Dec

15 deliveries the day MidasPlus was launched

The MidasPlus effect

Delivered on schedule

Three years in the making

Banks will each select a single vendor solution

Misys is market leader and has first mover advantage

Local features and local reporting are musts

The global processing effect

All Midas customers will upgrade over time

All back offices in a bank will converge

Why Misys and Why MidasPlus?

Trust and expertise

Global processing

Best functionality

Corporate strength

Best local support

Integrated

Best technology

25 years experience

EquationPlus

Andrew DerrerCEO

Misys Retail Banking

Brand new technology

Market leading foundation

Wider opportunity Equation Plus

Elevates the entire market

More than just a product

• The largest market with the largest growth:

– Retail Banking to Bank Retailing

– Packages will be the norm

– Compliance deadlines

– Islamic Banking

Market dynamics

Installed sites market share

Source: IBS Market Report – International Retail Core Banking Software Market. Excludes North America

Installed base

Addressing the market need

ProcessProcess

DataData

ProductProduct

ChannelChannel

Teller Electronic B2B2C

Transactional Complex Experience

Deposit/Loans Investment Wealth management

Transactional Customer-centric Real-time analytical

Merchandising

Differentiation

Efficiency

Knowledge

• Delivering packaged software and related services to help financial institutions:

– Improve customer service

– Comply with regulatory requirements

– Reduce IT costs

The challenge

EquationPlusD

ata

Pro

du

ctP

roce

ssC

han

nel

s

Branch Channels Internet

BankingCall

CentreIVR

Customer Sales & Service

B2B2C ATM POSMobile &

Kiosk

Offline

ReportingConsumer Banking

Commercial Banking

Treasury AnalyticsCustomer Services

Other Banking Services

Business Process

Workflow

Rules

Data Propagation Management

Misys Retail Banking Database

InterfacesProduct/

TransactionGeneral Ledger

Consolidated Information

3rd Party Information

Channel platform

Open technologyExisting

New

3rd Party

The roadmap

Merchandising + DifferentiationEfficiency + Knowledge +

Business ProcessEngine

Q1 06

Complete retail system

Today

PlatformIndependentFront-Office

Multi-channel

Sales & marketing

Q1 05Platform IndependentBack-Office

24 X 7

Q4 05

Based on calendar year

• What convinces us that we can execute on the milestones?

– Experience - MidasPlus

– Partnerships

– Unique tools and utilities

– Talent

The execution

• Bring every customer with us– An attractive future for every Misys Retail Banking customer– Easy, worthwhile upgrades– Support commitment

• Technologies that meet the aspiration of banks, both large and small

• The right architecture– Inclusive, not silo-based– Right platforms

Founding principles for customers

What the market thinks

If Misys can deliver on this plan, it will mark a real renaissance for

the Equation brand

Equation Plus, a complete new-generation, richly functional, highly-advanced retail banking system, will in our assessment, transform the fragmented retail banking market and competitive landscape.

In migrating to Equation Plus, Misys has unveiled an expansive vision to combine the best elements of proven retail banking functionality, with the capabilities of leading edge architectures.

Why we will be best in the market?

First truly open system

Process automation leader

Single customer view

Functional leader

Company strength

Single point of accountability

CRM leader

20 years of experience

Summary

Ivan MartinCEO

Misys Banking Division

Growth opportunities

1. SummitFT• Market leading Treasury & Capital Markets solution• World class functionality and technology • Consistent growth up to and including last 3 years

2. MidasPlus• Most successful banking application ever• Unmatched depth of corporate banking functionality• Significant 3 year investment in new technology platform

3. EquationPlus• World class Retail functionality• Clear leader in international markets• First truly open front-to-back Retail solution

Customer satisfaction

… today our customers tell us …

“Very impressed by the improvement in Equation Support over the last six months.”

“If the Customer Satisfaction Survey were to be repeated now, Misys would see a dramatic improvement in feedback from its customers.”

“A most impressive display of solid technical expertise and great support. Best wishes from a satisfied customer.“

Market feedback

“Our survey indicates that Misys’ customers are planning fewer system replacements than users of other systems

The solutions rated more favourably than other vendors on flexibility and instrument coverage

Misys’ product position versus the market remains strong ... with products perceived as offering above-average support for banks’ future needs”

Morgan Stanley/IBSSurvey on behalf

of Associationof Foreign Banks

April 2004

1. Banking is a large and growing software market

2. Misys is well positioned to benefit from this growth

4. Misys is growing its market share in key markets

3. Misys leads in functionality and technology

Key messages

5. Retail is key growth sector going forward

Making things that really matter, work better