temenos acquires trinovus - slides

Entering the US SaaS banking market and accelerating growth Acquisition of TriNovus

22 March 2013

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Any remarks that we may make about future expectations, plans and prospects for the company constitute forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of various factors.

In particular, the forward-looking financial information provided by the company in this conference call represent the company’s estimates as of 22 March 2013. We anticipate that subsequent events and developments will cause the company’s estimates to change.

However, while the company may elect to update this forward-looking financial information at some point in the future, the company specifically disclaims any obligation to do so. This forward-looking information should not be relied upon as representing the company’s estimates of its future financial performance as of any date subsequent to 22 March 2013.

Disclaimer

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A compelling strategic rationale

David Arnott, CEO

The market opportunity David Brasfield, President & CEO of TriNovus

Financial impact

Max Chuard, CFO

Q&A

Agenda

4

Transaction overview

A compelling proposition

Acquisition of TriNovus, a software-as-a-service (SaaS) technology provider that develops and delivers compliance and core processing services to over 800 US financial institutions

Funded through a combination of cash reserves and treasury shares

Combination of Temenos and TriNovus will create a unique proposition in the US market:

• Comprehensive SaaS offering with real-time processing and market-leading analytics, AML, wealth and compliance solutions

• A market leader and a recognized authority in the US compliance market

• A broad out-of-box on-premise solution for large institutions

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Temenos in North America

• Opened first office in NYC in 1997

• Currently operates from 8 offices with 235 employees

• Serving over 60 financial institutions, running core banking, wealth, channels, BI, money laundering and payment automation

• Mature T24 model bank

• Generating USD 50m in annual revenues

• Russell Taylor joined in October 2012 from SAP as President of Temenos NA

• Next step with TriNovus

Already an established presence

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The acquisition of TriNovus will provide Temenos with a platform for growth in the US:

1. A client base of over 800 financial institutions with significant cross-sell opportunities

2. SaaS core processing expertise, ancillary solutions and platform to launch comprehensive SaaS offering based on T24

3. A leading authority in US banking compliance

4. An experienced team with local knowledge and market presence

What the transaction brings to Temenos

Positioned to capture generational shift in US market

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1. A client base of over 800 financial institutions

Eastern Region 87 client

implementations

Western Region 77 client

implementations

Southern Region 627 client

implementations

Northern Region 133 client

implementations

Significant opportunity to cross-sell the Temenos suite of products

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IP 100% owned by TriNovus and based on validated technology

Recurring revenue model with long-term contracts in place (USD 17m of contracted revenues at present)

Core solution offers the flexibility to interface with other vendor products, allowing TriNovus to work with third-party partners to provide bolt-on modules

Data center operations in Texas and Alabama

Ancillary solutions (e.g. statement rendering, check processing)

2. Software-as-a-service core processing expertise

A platform to launch a comprehensive SaaS offering based on T24

Comprehensive SaaS solution based on core banking, wealth, channels, BI, money laundering and payment automation

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Market-leading compliance solutions backed by thought leadership 30-day sales cycle and one-day implementations

3. A leading authority in US banking compliance

A portfolio of compliance offerings targeted at US financial institutions

SocialComply Moderates, archives, monitors, and reports on

internal and external conversations relating to a

bank

TriComply Acts as an advisor by keeping compliance officers

abreast of the latest regulatory requirements

BankerVMS Comprehensive, web-based system allowing

banks to store and manage all vendor

relationships in a dashboard format

BankRisk Proactively evaluates the effects of adverse

economic conditions on a bank’s entire loan

portfolio

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Led by David Brasfield with over 25 years experience in the US banking software market

• 1989: founded SBS Corporation, a core processing company serving more than 1000 financial institutions in 27 states – acquired by Intercept (now part of FIS) in 1999

• 2001: launched Brasfield Technology - acquired by Metavante Corporation in 2005

51 employees working out of 2 locations

Deep knowledge of the US regulatory and compliance requirements

Extensive existing interfaces and relationships with third party vendors

Will play a key role in developing the combined business

4. Local market knowledge and presence

An experienced and well connected team

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David Arnott, CEO


Financial impact

Max Chuard, CFO

Q&A

Agenda

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The market opportunity

The largest financial services software market in the world

Type of FI Number of institutions

Large US-based commercial banks 264

Community banks 7,500

Foreign banks operating in the US 311

Federally-insured credit unions 6,819

State-insured credit unions 2,793

Mortgage companies 960

TOTAL 18,647

The US has over 18,000 institutions spending more than USD10bn annually on software

Source: FDIC, NCUA

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The market opportunity (2)

The US market is ripe for disruption and change

A vendor community struggling to meet FIs’ needs

Pressures on US financial institutions

• Changing customer behaviour

• New regulation

• New technology

• Changing competitive landscape

• Dominated by a few large vendors – little choice

• Multiple core systems for each vendor

fragments market and R&D spend – rationalisation will result in fall out

• Legacy technology – batch processing, not

real-time

• Inflexible, difficult to launch new products

• Low R&D, not being updated quickly for market changes

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The competitive landscape

Broad US functionality

Retail

Corporate

Private wealth

Real-time architecture

Single core

Compliance

Temenos has a unique proposition for US banks

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An industry analyst’s view

“US banks are confronted with increasingly complex regulations, customer demand for

new relationship-based products, and the growth of lower cost direct banks and non-

bank competitors. Financial institutions can prosper in this new environment, but only

by moving to a new operating model that supports the introduction of new value-added

products, improves customer service, and significantly reduces operating expenses. This

model cannot be realized without modernizing the banks infrastructure, including the

streamlining of operations and replacement of legacy software with modern, real-time

core systems.”

CEB TowerGroup senior research director Robert Hunt

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David Arnott, CEO


Financial impact

Max Chuard, CFO

Q&A

Agenda

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The acquisition will generate 2013 forecast revenues and costs of c.USD 8m leading to slight revision of 2013 guidance: • Non-IFRS revenue range raised from 2.5%-5.5% to 4.5%-7.5% (USD 470m to USD 483m) • Non-IFRS cost base raised by USD 8m to USD 368m implying non-IFRS EBIT margin of

21.7% to 23.2% • No change to Licence revenue, non-IFRS EBIT, cash conversion or tax rate guidance New revenue line (SaaS revenue) to be introduced from Q2 results

Transaction will be earnings neutral in 2013

2013 guidance

Transaction will be earnings neutral in 2013

Assumes USD / EUR 0.778, USD / GBP 0.631 and USD / CHF 0.938

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Medium term targets No change to medium term targets However, looking beyond 2013, Temenos would expect TriNovus to be contributing 5-10% of group revenues within 3 years and operating at group margin over a similar time horizon ADR Intention to launch a Sponsored Level 1 American Depository Receipt Expected to commence trading in early Q2

Medium term targets and ADR

Acquisition to contribute 5% to 10% of group revenues within 3 years

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Key takeaways

The US market offers a huge opportunity The combination of Temenos and TriNovus will create a unique proposition in the US market The market is ripe for disruption and change The acquisition of TriNovus will provide Temenos with a platform for growth in the US

The opportunity is now

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David Arnott, CEO


Financial impact

Max Chuard, CFO

Q&A

Agenda

Biographies Appendix I

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Russell Taylor, President of Temenos North America

• Over 20 years’ experience • Re-joined Temenos in October 2012, from SAP where he was the Vice

President of Consulting for Financial Services – North America • Began his career with the Standard Bank of South Africa, where he held

various management roles within their Electronic Banking Division • First joined Temenos in 2000, and over a 10 year period held various roles

in product management, community banking, business development and sales leadership in different geographies

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David Brasfield, President & CEO of TriNovus

• Founder of TriNovus, David brings over 25 years of experience in the banking and software industries including time with the Federal Reserve and NCR Corporation

• In 1989 David founded SBS Corporation, a core processing company serving more than 1000 financial institutions in 27 states. SBS exited with a purchase by a public software company. As part of the exit, Netzee an internet banking company was spun out and taken public

• In 2001 Brasfield launched Brasfield Technology focused on providing the financial marketplace with security solutions, imaging, telephone and Internet Banking, core processing services and more. Brasfield Technology was acquired by Metavante Corporation in 2005

• TriNovus was launched in 2009 with the goal of bringing relevant technology and Compliance solutions to community financial institutions. In 2011 TriNovus acquired eBank Systems, a data processing center located in Lubbock, TX

An introduction to Temenos Appendix II

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Temenos – a global market leader

No.1 World class delivery • 43 new customers went

live in 2012

• Strength and depth: 900+ consultants, 100 concurrent projects

• Community of 1500+ certified partner consultants

Product led • Highest level of research

and development in the industry

• Regular software upgrade strategy

• Passion for standards and openness

World’s leading banking software company • 1,200+ installations

in 140+ countries

• USD 450M revenues in 2012

• 3,700+ employees in 57 international offices

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Global reach

Asia Pacific Australia Bangladesh China Hong-Kong India Indonesia Japan Malaysia Pakistan Singapore Taiwan Thailand Vietnam

Americas Canada Costa Rica Ecuador Mexico USA

Middle East & Africa Egypt Kenya Lebanon Morocco Saudi Arabia South Africa UAE

Europe Belgium France Germany Greece Kazakhstan Luxembourg Netherlands Romania Russia Spain Switzerland Turkey UK

Our global network enables us to be close to our clients, understand their requirements and deliver solutions quickly and accurately

3,700 employees

57 offices

38 countries

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Our revenue model: a product led company

Maintenance

Services

Licence

• Rich product suite • Regularly upgraded • New and existing clients • Geographic spread • Referencability

• High level consultancy • Direct client feedback for

benefit of wider business

• Revenue stream grows with Licence sales

• 5 year contracts, then renewable annually

• Paid annually in advance • CPI indexed

Maintenance

45%

28%

27%

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Financial services landscape

Payments

Distribution channels

CRM

Payments

General support

Banking Investment services Insurance

Life

General

Ass

et

man

agem

ent

TCM

Retail Universal

Private Wholesale

Ris

k an

d c

om

plia

nce

Bu

sin

ess

anal

ytic

s

Temenos Connect

T24 Insi

ght

Trea

sury

Tra

de

r

AM

L, T

ryC

om

ply

, So

cial

Co

mp

ly

Trip

le’ A

Plu

s W

ealt

hM

ange

r

Rich product suite

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Market opportunity

Bank spend on third-party software today: a USD 5.5bn market*

USD 1.8bn

USD 1.0bn USD 1.3bn

USD 1.4bn

Core banking Wealth BI Channels

Organisation aligned around market that is 3x bigger than in 2009

*Licence and maintenance spend

Source: Gartner, IDC, Celent, Temenos estimates

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Our value proposition

Our products are open, integrated, componentised and upgradable, supported by a dedicated professional services organisation and a strong partner ecosystem.

Temenos offers the market leading value proposition

Sustainably lower cost

Economies of scale

Greater wallet share

Lower asset provisions

Market development

Low cost, highly automated, scalable systems

Rapid launch of personalised products, single view of customer and risk

open

integrated

componentised

upgradable

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The only Global Power Seller

“Temenos has been the one of two

firms in our Global Power Sellers

category since Forrester

introduced the global vendor

pyramid for the 2006 global

banking platform deals survey”

“(and this year) has the

enviable position of the

single Global Power Seller

in the 2011 survey.”

Leading the competition

>5 new named deals; more than 3 regions*

>35 new named deals; more than 4 regions*

>15 named deals; more than 3 regions*

>5 new named deals; 2 to 3 regions

≥ 5 new named deals for fewer than 2 regions

Temenos

Infosys / Tata Consultancy

Services

Nucleus Software Exports

Polaris / SAP

Callatay & Wouters Delta Informatique / DL&A

FIS / JHA / Open Solutions / SunGard

Accenture / BML Istisharat / Cobiscorp / CSC Eri Bancaire / FORS-BS / Intrasoft International

Misys / Path Solutions / SAB / Top Systems

Source: Forrester “Global Banking Platform deals 2011”, published April 2012

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The largest installed base

Largest customer base in all regions and across all segments

0

100

200

300

400

500

600

700

Europe Africa APAC North America Latam

Temenos

Oracle

TCS

SAP

Infosys

Core banking installed bases by region in 2012 PWM installed bases in 2012

0

20

40

60

80

100

120

140

160

180

Temenos ERI Avaloq

Notes: Fidelity (FIS) includes ACBS and Profile; Oracle excludes Daybreak; Temenos includes V.bank, Triple'A Plus and WealthManager

Source: IBS Intelligence, Capgemini, Temenos estimates

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0

5

10

15

20

25

30

35

2003 2004 2005 2006 2007 2008 2009 2010 2011

Temenos spends on average 20% of sales on R&D, more than 2x the industry average

The highest R&D in the industry

Source: Company Annual Reports, Temenos estimates

*Normalised cash R&D – adjusted for difference between capitalisation and amortisation and any one-off restructuring charges

Peer group consists of SAP, Misys (ex-Sesame where applicable), TCS (BaNCS) and Oracle Financial Services, which we have assumed to have remained constant as a % of sales since 2007, the last date of disclosure

% o

f re

ven

ues

Further extending our lead

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GUI SOA XML Open DB

Multi entity

24/7 Process Workflow

Models Cloud Platform Framework

Integration Framework

A proud history of innovation…

1993 2012

Treasury Trader

Retail banking, Corporate banking, Treasury, Lending, Payments back office, Securities

Trade finance

Front office – CRM

Internet banking

Insight Business Intelligence

Arrangement Architecture

Mobile banking

Anti money laundering

Enhanced wealth management

Temenos Connect

Insight operational intelligence

A record of industry “firsts”

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1993 2012

…extending into the future

Temenos Enterprise Payments Platform

Trade finance (forfeiting & factoring)

Loan collections & leasing

Relationship-based pricing

App store

Treasury Trader

Retail banking, Corporate banking, Treasury, Lending, Payments…

Trade finance

Front office – CRM

Internet banking

Insight Business Intelligence

Arrangement Architecture

Mobile banking

Anti money laundering

Enhanced wealth

Connect

Insight

Compelling and unrivalled roadmap

Data Framework

Interaction framework

Design Framework

Componentisation framework

Smart order entry and pre-trade compliance

Supply chain finance

Cloud & Mobile BI

FATCA, Basel III

Tablet apps for Relationship Managers

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The most profitable banks run Temenos

48%

50%

52%

54%

56%

58%

60%

62%

64%

0%

2%

4%

6%

8%

10%

12%

14%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

37% 46% 25% 30% -7.4% -8.5%

Legacy systems

3rd Party Temenos

Better results with 3rd party systems, even better results with Temenos

Return on assets Return on capital Cost / income

Legacy systems

3rd Party Temenos Legacy systems

3rd Party Temenos

Performance of Temenos customers compared to banks using both other third-party systems and legacy applications

Data taken from white paper, “Bridging the Profitability Gap”, co-written with

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Strategic plan in context

Creating value

Lead 2012 onwards • True multi-product focus

• Multi-deployment options

• Realising installed base

opportunity

• Growth in key geos and

segments, partners facilitating

• Further strategic M&A

• Maturity and consistency

• Tier 1-6

Build 1993 to 2002

• Domain focus

• Truly global

• Single packaged product

• Commitment to openness

• High R&D

• Maintenance model

• Tier 3-5

Scale 2003 to 2011

• Built out regional structure

• Expansion of addressable market

• M&A programme

• Partner programme initiated

• Margin expansion

• 10pp of market share gains

• Tier 1-2

16% revenue CAGR

30% adjusted EBIT CAGR *1995 to 2001

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Converting internal spending to external spending

Third party spend & total spend on banking software today*

Maintaining leadership in Core Banking; establish leadership in other segments

*Licences and maintenance Source: Gartner, IDC, Celent, Temenos estimates

12.9

4.5

3.0

5.6

0

5

10

15

20

25

30

Spend with third-parties today Total spend on banking software today

Core banking Wealth BI ChannelsUSDbn

USD 5.5bn

USD 26.0bn

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Installed base opportunity

Significant cross-selling opportunity

Temenos has more than 1,200 customers using its software (>1,000 discrete financial institutions) Penetration rates across our product sets remain low (e.g. Insight at 20%, Internet banking at 18%) There is a significant revenue opportunity coming from relicensing customers reaching end of their 10-year licence agreements, although still immaterial in 2013 and 2014

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Focus on target areas of growth Core banking to grow slower Channels, PWM, BI expected to be high growth areas APAC and Americas to be fastest growing regions Refocus sales to increase contribution from existing customers

Our strategic plan: licences and maintenance

Focus on product Sustainably grow licence and maintenance revenues Focus on reusable product investment Underpins margin expansion and DSO reduction

41

Our strategic plan: services

Higher margin services supporting product business 20% to 25% of group revenues Higher value-add expert and productised services, driving even better levels of customer success Reducing implementation times Maximising reusability Reduced cost base providing operational leverage

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Partner strategy moving into the next phase Totally aligned with services strategy, leveraging partners to support growth Partners to drive growth in licensing, instrumental in opening up key segments and markets Services partners taking greater role on projects, leading more projects

Our strategic plan: partners

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M&A complementing growth

A three-pronged approach

2007 2008 2009 2010 2011 2012

Accelerated growth in key markets and segments

Increased scale

Complementary products

2013

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Economies of scale Higher services margins Revenue mix shift

Shorter projects New / existing mix More cash up-front

100-150bps of margin

expansion

on average

per annum

10%+ licence growth

5%+ revenue growth

per annum

Cash conversion over 100%

per annum

Medium term targets

Significant value creation

Thank you www.temenos.com

temenos acquires trinovus - slides

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