| Wed 3 Oct 2001, 0:00 | | Temenos Reports Slowdown In Market Following Septe |
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Geneva, Switzerland - October 3, 2001 ---- TEMENOS GROUP AG (TEMN) a global
provider of integrated banking systems reported that despite the widespread
slowdown in IT spending that has troubled the technology sector in recent
months, it expects to report revenue growth for the quarter to September 30,
2001 that exceeds the company's guidance.
FOR IMMEDIATE RELEASE
CONTACT:
Kim Goodall
TEMENOS
kgoodall@temenos .com
+44 207 751 9500
The company's revenues are expected to grow at the rate of 50% to 55%
compared to the same period last year. However, the operating margin for the
quarter is expected to be depressed due to a lower than anticipated ratio of
license to service revenues and the increasing build-up of internal delivery
capability based on the original growth plans. Implementation of recently
signed licenses is progressing according to plan and we continue to benefit
from our sizable contracts backlog.
Forward Guidance
Following a weaker than expected September for new contracts, we are
revising our revenue forecasts for the business to allow for the increased
uncertainty that exists in the market place since the September 11 events.
We believe our business model has until very recently insulated us from the
overall slowdown in the IT market because our products are of a strategic
nature and offer banks the opportunity to lower costs and manage their
operations more efficiently. The overall macro business environment and
political uncertainty, if prolonged, may, however, lead banks and other
financial institutions to further curtail their spending plans and revise
their decisions affecting spending in areas, including IT, which until now
have proved robust.
Despite the expected slow down in spending in the banking industry and the
current unsettled macro economic outlook, we still expect our revenues for
the next three quarters to continue to grow at double digit rates, although
not at previously planned levels of growth.
In response to the reforecast of revenue growth, management has taken an
aggressive stance on costs in order to protect margins. We are taking
advantage of our extensive development and client support infrastructure to
accelerate our cost-saving programmes. We will transfer certain of our back
office development and client support operations to our Technology Centre in
Chennai, India more quickly than originally planned. This and other cost
initiatives are expected to yield significant savings, which we anticipate
will start accruing from January 1, 2002 onwards. The goal of these cost
savings is to protect medium-term margins, although some short-term margin
pressure is inevitable. "Uncertainty has been significantly increased
following the events of September 11, 2001" says George Koukis, Chairman and
CEO. "We believe that taking the corrective measures announced today will
allow us to better manage the currently uncertain business environment
without compromising our long-term strategy and delivery capability" said
George Koukis.
About TEMENOS
TEMENOS is a global leader in providing financial institutions with
integrated banking systems that increase productivity and profitability, and
allow them to respond to changing market conditions. The company's solutions
are utilized in a variety of segments including retail and wholesale banking
as well as for treasury and accounting functions. TEMENOS customers include
Deutsche Bank (GER:DBK), Bank Julius Baer(SWX: BAER), Barclays Bank (LONDON:
BARC) and Merrill Lynch (NYSE:MER). TEMENOS has 40 offices in 28 countries
and has installed over 400 client bases since its founding in 1993. The
company had revenues of US$125.2 million for the twelve months ending 30
June, 2001. In June 2001 TEMENOS became a public company, listed on the
Swiss Stock Exchange (TEMN).
Any statements in this press release about future expectations, plans and
prospects for the company, as well as statements containing the words
"believes," "anticipates," "plans," "expects," "will" and similar
expressions, constitute forward-looking statements. Actual results may
differ materially from those indicated by such forward-looking statements as
a result of various factors. In addition, the forward-looking statements
included in this press release represent the company's estimates as of
October 3, 2001. The company anticipates that subsequent events and
developments will cause the company's estimates to change. However, while
the company may elect to update these forward-looking statements at some
point in the future, the company specifically disclaims any obligation to do
so. These forward-looking statements should not be relied upon as
representing the company's estimates or views as of any date subsequent to
October 3, 2001.
TEMENOS and TEMENOS GLOBUS are trademarks of The TEMENOS Group.
For immediate comment, please contact:
Gavin Leonard, CFO of Global Technology
Tel: 011 797-6902 (PA: Maria Machado)
