Temenos unveils new strategic plan and 2028 targets
Adds CEO quotes in paragraphs 2-3, 8, analyst comment in paragraph 6, investments in paragraph 10
By Chiara Holzhaeuser and Dave Graham
ZURICH, Nov 12 (Reuters) -Temenos TEMN.S, a Swiss banking software firm, on Tuesday trimmed its mid-term targets and presented a new plan to boost growth over the next four years by boosting its sales force and focusing on the U.S. market.
CEO Jean-Pierre Brulard, who joined the company in May, said the U.S. will be an important driver in helping Temenos to outperform its addressable market, which it expects to grow by 7% a year through to 2028.
"We are doubling down the size of the sales force, massively investing in product and technology in the U.S.," he told Reuters.
The election of Donald Trump as president won't impact Temenos' strategy, Brulard said, adding that he expects a stronger economy that could drive investments within the U.S. banking industry.
Temenos said that on a timeline for 2028 it was targeting annual recurring revenue (ARR) of more than $1.3 billion. It had previously expected to hit that level by 2027. It sees lower non-IFRS EBIT (earnings before interest and taxes) of about $500 million, and free cash flow of around $420 million.
The reductions comejust a few weeks after the firm cut its outlook for 2024 for the second quarter in succession.
Temenos shares slipped after the market opening, falling by as much as 2.7% before trimming losses.
"The new targets ... appear more credible. This is a further important step in rebuilding confidence," Vontobel said in a note.
Last month the company lowered its full-year outlook for the second straight quarter and launched an "efficiency program" that includes reorganizations at management level.
"When I took my job, I had 1,150 managers for 6,000-plus employees. After four months, we have only 750 managers," Brulard said.
To drive growth, Temenos also plans to invest an additional $30-$40 million in 2025, in areas including research and development, products and technology.
Geneva-based Temenos is due to discuss in detail its plan and targets at its Capital Markets Day later on Tuesday.
Writing by Dave Graham, Chiara Holzhaeuser, Editing by Friederike Heine
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