Temenos hit by financial market slowdown

Temenos hit by financial market slowdown

Swiss core banking vendor Temenos has declined to give revenue guidance for 2009 as the financial slowdown bites into Q4 revenues and profits and reduces market visibility.

Revenue for the fourth quarter was $122.2m, down two percent from $125.3m in the same period last year. Licence revenue for the quarter was $49.9m, 27% behind the previous year. The slowdown in sales hit fourth quarter operating profit, which was down 17% to $36.1m, compared with $43.7m in the same period last year.

CEO Andreas Andreades says: "Uncertainty regarding 2009 made some CEOs reluctant to commit to big projects, which adversely affected our closure rates."

Temenos has been actively cutting costs and laying off staff in an effort to improve margins and retain profitability. Although reluctant to commit to hard figures for revenue in the coming year, Andreades believes the business is capable of delivering higher margins and profitability in 2009.

"We expect our 2009 costs to be $33m lower than 2008 pro-forma levels, which, coupled with a baseline maintenance stream of around $118m, allows us to be comfortable with our margin outlook of 19% to 20% and our target of at least 75% Ebidta to operating cash conversion," he says.

For the full year 2008, total revenue was $406.9m, up 23% on 2007, with licence revenue at $150.1m, one per cent ahead of the previous 12 months. The full year operating profit was $64.0m, up from $62.5m in the prior year, representing a two per cent increase.

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