The value of Initial Licence Fees (ILF) for new contracts signed during the full year of 2004 amounted to US$ 62 million, an increase of 22% compared to 2003, TEMENOS's strongest ever year. During the fourth quarter, new contract signings amounted to US$ 19 million compared to US$ 22.0 million for the previous year (-14%). In the second half of the year signings were at US$ 30.0 million, up 5% on 2003. TEMENOS is maintaining its full year 2005 ILF signing target at US$ 80.0 million.
During 2004, signings have shifted towards larger deals due to take up of TEMENOSâ¢ T24, TEMENOSâs flagship product, and TEMENOSâ¢ CoreBanking. Median deal size continued to
increase with a median deal size of US$ 2.6 million for the year compared to US$ 2.2 for the full year
2003 (+18%). During 2004, TEMENOS continued to attract top tier clients as a result of superior products in the form of TEMENOSâ¢ T24 and TEMENOSâ¢ CoreBanking. More than 40% of TEMENOS's signings were made with tier one and tier two financial institutions, compared with around 29% for 2003. In 2004, more than 73% of signings were with retail and universal banks compared to 55% for 2003 in line with TEMENOS's retail strategy.
The growth in signings for 2004 is driven by very strong performance in Asia, where TEMENOS almost tripled signings and EMEA where signings grew at more than 20%, compared to 2003. There were flat signings year on year in Northern America. TEMENOS has not been able to replicate 2003âs performance in South America where TEMENOS signed Bansefi in Mexico, TEMENOSâs second TEMENOSâ¢ CoreBanking deal in the fourth quarter of that year.. However, the pipeline in South America is growing strongly on the back of reference accounts, which are now live, and TTEMENOS is confident that it will support 2005 targets.
From a product point of view, TEMENOSâ¢ T24 grew at approximately 10% compared to 2003, whilst TEMENOSâ¢ CoreBanking offering almost doubled at the same period. TEMENOS has been able to reach its target of two TEMENOSâ¢ CoreBankingdeals for the year, the first one in the first quarter with the Bank for Agriculture and Agricultural Cooperation (BAAC) in Thailand and the second one during the last quarter with Bank Thai. Bank Thai has already implemented TEMENOSâ¢ T24 for its trade finance division and will implement TEMENOSâ¢ CoreBanking to support its retail operations. The company has now six clients which have chosen TEMENOSâ¢ CoreBanking offering; three of which are now live.
During the fourth quarter, TEMENOS generated approximately US$20.0 of positive operating cash flow, bringing the total for the year to approximately US$13.0. This brings TEMENOS's closing cash to approximately US$30.0 million to, an increase in net cash of US$4.0 million over last year.
Andreas Andreades, CEO, TEMENOS says: "I am pleased with achieving a 22% growth in ILF year on year. Deal flow and pipeline evolution during the quarter was strong and consistent with prior quarters. I am particularly pleased with the results we are achieving in both Asia Pacific where we tripled ILF signings this year and Europe where we grew by 20%. The significance of our results is especially important when viewed against a market background of reported deal slippage and longer sales cycles. Our sales targets for 2005 remain at US$ 80 million and two to four TEMENOSâ¢ CoreBanking deals."
TEMENOS has brought forward the conclusion of its audit and presentation of its audited full year 2004 results by three weeks. A conference call will take place on Wednesday, 23 January 2005 at 2.30 pm CET to present its Fourth Quarter and Full Year 2004 Results.