Welcome to the Temenos 2021 Capital Markets Day. My name is Adam Snyder, I'm Head of Investor Relations for Temenos. Thank you for joining us on what I hope will be a really interesting and engaging day. To run through the agenda briefly, our first session will include presentations covering our strategy and vision, customer success, our approach to innovation, product and technology, our SaaS and cloud business, and Temenos Infinity, our digital front office platform. We'll then stop for a short break, and in the second session, we will have presentations covering how we meet the needs of large banks, the Temenos Value Benchmark, ESG, and our financial growth plans. There will then be a second break, after which we'll open up for Q&A. You can submit questions at any time through the box on the bottom of your screen. Please do state which presenter your question is addressed to. Given there are over 300 of us today attending this event, I'd appreciate it if you'd limit yourselves to one question each. With that, I'd like to hand over to Max Chuard, CEO, to talk about our strategy and vision. Over to you, Max. Thank you, Adam, welcome to Temenos Capital Market Day 2021. Thank you for taking the time to be with us. Hopefully, you all received our Temenos cap. I hope you're enjoying a good cup of coffee or tea as we kick off the session. I'm super excited to share with you our strategy and vision for Temenos. I want to show you the massive potential for our business and what we do to capture this. First, let me tell you what drive us at Temenos. What is our purpose? We exist to make banking better, together with our clients, our partners, and our whole Temenos community. 1.2 billion people all over the world rely on our software for their banking needs every day. That's 30% of the global banking population, and our clients are the most successful in the industry, achieving a return on equity 3x the industry average. That's why over 3,000 banks choose Temenos, including 41 of the top 50 global banks. It's why Temenos is the world's number one cloud native intelligent banking platform. We are really proud to be making a positive and sustainable impact on our society. For 27 years, Temenos has been focused 100% on the banking industry. We are passionate about innovation. We have made a cumulative $2.1 billion of investment in our product. We were the first to move to real-time core processing in 2004, and the first again to move to cloud in 2010. Today, we are cloud- native and cloud- agnostic with explainable AI embedded across our platform. We've made massive investments in our technology, our products, and our SaaS capabilities. We can deliver for all our clients, from large banks running on premise, to challenger banks going live in weeks and months with our fully SaaS offering. We do not stop here. We invest more than anyone else, and we will continue to do so. Over $1 billion in the coming years. This mean we can meet the future needs of our client and extend our market leaderships. This is the commitment we make to our customers. I'm very excited about the acceleration our business will see over the next five years. We have ambitious targets and a strategic plan to deliver. We plan to hit more than $1 billion of bookings by 2025. This will be a huge milestone for the business, driven by strong license growth and a dramatic acceleration in SaaS. We will do this while continuing to expand our margins to at least 41% by 2025. Because we've already made massive investment in our technology and SaaS capabilities, because we have a single code base, that means it's the same product we sell, whether on premise or as SaaS, and because we are leveraging a single global sales organization to sell our products. We will also generate significant free cash flow, more than $600 million by 2025. Temenos has consistently delivered over the last decade, and we will continue to do so. Over our 27 years of history, we dealt with several global crises, like the global financial crisis and the sovereign debt crisis. Each time, Temenos was impacted for one or two quarters, but we rebounded rapidly and emerged even stronger. That's because our industry and what we do is structural. It's not cyclical. Digitalization is imperative for banking, and the urgency to change has never been greater. The majority of banks are still using systems that date back more than 50 years. Banks have no choice but to transform, and this will drive sustainable long-term growth for Temenos. Looking back at 2020, clearly this was an unprecedented year. Banks suffered big disruptions and saw the delayed deals, particularly in the first half of 2020. However, already in Q3, we started to see a recovery, with strong sequential improvement in Q3 and continued strongly in Q4. Sales closure rates and business predictability improved. Our licensing came back strongly. When you look at the growth in our ACV, we can see the acceleration in demand for SaaS. The rebound in H2 was driven by the urgency for our clients to continue the investment in modern banking technology. As soon as they rolled out the business continuity plans, banks returned to the strategic transformation projects. Temenos was also able to adapt very rapidly to the changing environment. We supported our customers with minimal disruption. We had a total of 307 implementations over the course of the year, and remote implementation quickly became the new normal. We won deals in every region, with 64 new logos, as well as building a very strong pipeline. This sets us up very well to return to strong growth in 2021. It's clear that COVID-19 has accelerated digital transformation by years, and this is a huge opportunity for our industry. The pandemic has driven massive consumer demand for digital. Individuals and businesses are now less likely to visit branches, less likely to use cash, and more willing to bank digitally. These are lasting changes that fundamentally shift how banks run their business and service their customers. Every segment of the market has been impacted, retail, corporate, and wealth management, from challenger banks to global tier 1 institutions. Banks still have some strong competitive advantages. Remember, they have the customer base with the data, and most importantly, the trust. They are also compliant and are well capitalized. The reality is that legacy systems of banks are holding them back. They are running the patchworks of overlapping systems that are not integrated. We call that spaghetti code. Those are very expensive to maintain, and they come with high level of risk. These banks cannot create and launch product quickly. They cannot innovate, and they cannot create tailored, hyper-personalized experiences. Those systems are not fit for the challenges banks face today. This has become a concern for regulators as well, and that builds even more pressure on banks to invest in modern technology and software. In 2020, we saw that banks who already embraced modern technology coped a lot better with the crisis. They gained market share, and now they're emerging as winners. Of course, we know that banks were already facing big changes before coronavirus. Intense financial pressures, rising customer expectations, fierce competition, and the pandemic has greatly added to that. You can see the effect it had on banks' return on equity. In fact, based on our analysis of banking performance across the globe, 70% of banks cannot cover the cost of capital. Turning this around will require banks to accelerate their transformation. Technology will play a central role in this. When I speak to bank CEOs, they tell me of the urgency to transform. They understand the impact of new and disruptive technologies like cloud and AI. We've made massive investment in our technology capabilities to meet this demand. We will continue investing for the future. We operate in a huge market, $63 billion. However, only 27% of the spend is on third-party software. This compares with 70%-80% for other industries at maturity. This represents an incredible growth opportunity. This will continue sustainably for the next 10-15 years at least. Banks are investing massively in their IT. Ultimately, they do not have a choice. Third-party software spend is expected to grow at 8% for the next five years, with the on-premise market growing at 6%. As you know, Temenos has a track record of growing around two times faster than the market, and we will continue to do this. We also see a dramatic acceleration in SaaS, and this is expected to grow at around 25% over the same period. The majority of this will be incremental. I'd like to give you now a flavor of where the demand is coming from. Firstly, you have large banks that are renovating specific product lines, function, and lines of business, and transforming through domain-specific microservices. They may use a bit of cloud and sometimes SaaS, for example, the international businesses, but the vast majority is on-premise. The goal is really to reduce cost and complexity, and spend more ultimately on innovation. At present, 70% of the IT budget goes into maintaining the legacy systems. That's just not sustainable. They need to invest for innovation. They want to speed up the launch of new products from months to days, using AI for smarter, faster project and digital insights. For the mid and lower tier banks, they are experiencing intense competition. They simply don't have the same budget to spend on IT as large banks. They aren't free of legacy like the challengers. They look at third-party solution to help them innovate and compete. They tend to renovate the entire lines of business. IT is again, mainly on-premise. We do see increasing demand for cloud and SaaS. Finally, there are challenger banks and fintechs that are focused on rapid time to market and innovation with a hyper-efficient cost model. With no prior infrastructure, they are SaaS first for the entire operations. Temenos is uniquely placed to meet the demand across all tiers and business models. We have a unique value proposition. Banking is all we do. We have deep domain expertise with the richest functionality built over 27 years, and we combine this with extensive localization like country model banks for our clients in 150 countries. We have game-changing technology. Our platform is cloud- native, cloud- agnostic, and even multi-cloud. Our technology is APIs first with artificial intelligence embedded across the platform. We have packaged products with a single code base. This means all our clients are running on the same platform, and they can all benefit from our innovation in R&D, which is the highest in the industry. We call this the winning combination. Our game-changing technology comes together with our rich, highly localized functionality. This is why we win the most times when we compete. These are strengths our competitors cannot match. The traditional vendors cannot offer the choice or the technology. They don't have the size and cloud capabilities. They do not offer packaged products. The neo vendors simply do not have our breadth and depth of functionality, localization or AI capabilities, and they don't have the budget to invest in continuous innovation at the same level as us. We are cloud native, but with 27 years of banking experience. We have far greater set of capabilities. This means we are the vendor of choice for the bank's entire needs. We have massive scalability. With seven million transactions Temenos SaaS for one global multi-country client. We have the size, the scale, the expertise, the track record, and most importantly, the best product and technology in the market. Temenos gives banks the freedom and flexibility on how they run our solutions. A client can run this for themselves on-premise, on the cloud. This is our license business. We can run it for them as Temenos SaaS. As I said, it is the same product, a single code base. It is sold by the same sales organization. This means all our clients can benefit from the huge investment we've made in our platform over the last 10 years, however they choose to run it. We started the move to cloud a decade ago, and today we are cloud native and cloud agnostic, offering a low-cost platform to clients. We've invested in our multi-cloud capabilities to support hybrid architecture and offer increased resiliency to our clients. We offer a loosely coupled architecture with a combination of containers and microservices, and this provides elastic scale and agility at low cost. All of this means we are ready today to capture the acceleration of SaaS. There are significant benefits from moving off legacy to Temenos software, whether that's on-premise or SaaS. Bank running on SaaS can achieve as low as 10% of their legacy costs. They are driving down costs through increased flexibility, speed to market, and agility, and by removing overlapping legacy systems that are expensive to maintain. They are gaining incremental benefits from reduced cost of infrastructure, elasticity, and scalability. Now, 70% of this cost saving can be achieved by running our modern software and technology on-premise. While we expect some of our existing on-premise clients to move to SaaS, this will only happen slowly and gradually over time. That's because of the significant benefit they are already capturing with our platform. We work with over 300 banks in more than 150 countries. Let me give you some examples of what we do for them. We help the largest banks in the world transform. Like Komerční banka, which is part of Société Générale Group. The selected Temenos Transact to digitally transform banking for the 1.6 million retail and corporate customers. Our open APIs and modern technology will allow them to simplify and consolidate their IT, and deliver leading-edge products faster. They will reduce time to market for innovative services and products, access straight through processing across the entire operation, and achieve a market-leading cost-to-income ratio. Temenos is also the de facto choice for mid-tier banks. For example, Canadian Western Bank, they want to be Canada's first full-service bank for small and medium-sized business owners. To do this, they needed to replace the legacy core systems. They chose Temenos Transact, Temenos Data Lake with explainable AI, and Temenos Infinity. Together, this will allow Canadian Western Bank to truly differentiate. They will get incredible AI-driven data insights. This can be used to create amazing new products, launched rapidly, and outstanding experiences to take the customer relationship to the next level. Finally, we are the leader for challenger banks. Over 60 challenger banks use Temenos today. Like Alpian, a new Swiss digital bank with private banking and wealth management services. They chose Temenos Transact and Temenos Payments delivered as SaaS to enable short time- to- market and a hyper-efficient cost model. Alpian is also taking advantage of our localized package functionality. With plans to expand outside of Switzerland, Alpian will benefit from elastic scalability of Temenos SaaS to grow rapidly and cost effectively. What is unique at Temenos is that we can tangibly demonstrate the benefit we bring to our clients through the Temenos Value Benchmark. This helps bank understand how their IT investment impacts their operation, where and how they can improve their IT, and the benefit from doing so. Our clients are achieving industry-leading cost-income ratios, half the industry average. Return on equity, 3x the industry average. We've more than doubled the amount of customer involved in our benchmark over the past year. Ultimately, this give us thousands of data points, and no one else has this level of insight. We can prove the benefit of our solution to our clients. This is a unique advantage. You've heard about the big opportunity in our market and why Temenos is in a unique position to capture this. I want to tell you about the strategic initiatives to drive our growth, both in SaaS and our license business. Our focus is on four key areas. I am turning firstly to SaaS. We have a higher win rate, in fact, in SaaS than on our premise business. As you know, both are extremely high. We have invested in our SaaS and cloud capabilities for the last decade. We will capture the accelerating demand with our SaaS first cloud-native product. We will also leverage our global sales organization. Finally, we will continue investing in our SaaS operation to drive automation and efficiency at scale. Together, this will allow Temenos to achieve SaaS growth profitably with significant margin expansion over the next five years. We have made so much investment in all our products. I am so proud of our market leadership position across all those products. For example, Temenos Transact is the best-selling core banking product. We outsell the competition by 6 x. We continue to innovate and launch exciting new microservices, like Temenos Enterprise Pricing, which we just launched, which helps large banks start on their digital transformation journey. For Temenos Infinity, our front office digital banking solution, we now have over 650 customers. We are seeing demand in exciting new areas like SME and wealth. We are embedding explainable AI that allows banks to create outstanding personalized experiences. In every product, we are recognized by industry analysts like Gartner, IBS, and Forrester as the best seller with the most compelling vision and strategy and market-leading execution capabilities. We have consistently maintained this leadership for years. Our future in R&D investment will keep us at the forefront of the market. Turning then to North America, this is the largest market globally, and we've made big investment in the last five years to build our presence. This is a great opportunity for us. North America was our largest region in 2020, and we grew strongly. It's where last year we signed our largest ever ACV contract. We'll continue accelerating our growth in the regions, both on premise and on SaaS. We have proven the localization of our software with all the elements of the U.S. regulation required, and we have strong references in North America to help us make even further progress. In fact, I'm very pleased that last weekend, a Tier 1 bank went live on Transact in the U.S. Now, we are investing in our sales leadership across client segments to drive further growth. We are strengthening our go-to-market strategy with new strategic partnerships, and we are building a very strong U.S. SaaS pipeline, which is the largest contributor to our global sales business. The last strategic initiative is something I'm very excited about, and that our game-changing strategic partnership. We have fantastic global, regional, and local partnerships with technology and implementation partners around the globe. This gave our clients massive choice and flexibility. I'm delighted to say that Temenos has signed a partnership deal with Salesforce, the world's number one CRM company. We are taking the transactional strengths of Temenos Infinity and the relationship capabilities of Salesforce to create a new digital workspace. This will let banks reimagine the way they engage with their customers and employees. The second game-changing partnership we've just announced is with DXC. This will enable DXC's large banks customers to accelerate their digital transformation on Temenos software. The partnership will combine the implementation and integration strengths of DXC with the power of Temenos technology and functionality. This opens up a new channel to market for Temenos with a proven transformation partner. Both partnerships will help accelerate our penetration in the large banks, as well as in the U.S. particularly. As I come towards the end of my presentation, I'd like to make two really important points. Firstly, it's my firm belief that ESG leadership creates sustainable value, and I'm very proud of our commitment at Temenos to operating ethically and responsibly. It's now more than five years that we've structured our ESG initiatives so we can ensure real value for our stakeholders, our communities, our people, and the environment around us. I'm pleased to say that this year we are enhancing our ESG reporting. In 2021, we'll be mapping SASB reporting with the GRI Standards. We will also incorporate TCFD recommendations, and we will map the contribution of our product offering to the United Nations Sustainable Development Goals. I also want to mention the importance of our culture, which we call Temenosity. Temenosity is the way we do things. It means different things to each of us, but ultimately it's about tenacity, velocity, responsibility, authenticity, and community. To me, it's about putting Temenos first. It's about the ability to change and take and make decisions. I strongly believe our culture is one of the key elements of our success. We value people. Our culture brings us together, and it attracts the best people in the industry. That's key for us as we grow. In the end, our people made Temenos the world's number one banking software company. They lived our value amazingly last year. Now they are going to drive us forward to the next level. As we discussed, we have a massive opportunity in front of us, and COVID-19 is accelerating this. We are the leader in our market, the only one that can meet the demands of our clients across all tiers, all geographies, and all business models, whether on-premise or SaaS. We have the right product, the right technology, and our passion for innovation. Our people have the talent, the drive, and the energy, and we have the scale and ambition with a clear strategy to deliver on our targets. That's why by 2025, I'm confident we will achieve our targets of more than $1 billion of bookings, an EBIT margin of at least 41%, and more than $600 million of free cash flow. I hope you enjoy the next couple of hours. I'm going to hand over to our Chief Operating Officer, Alexa, to present how we approach customer success, and I look forward to joining you again for the Q&A session later on. Thank you. Hello, everybody, thanks for joining us. I want to share with you the views that we have at Temenos and that I have on customer success and the importance of delivery within our ecosystem and for our customers. The first thing really that I would want to cover is customer success. This is something we're hearing a lot about. This is something that the whole industry talks about, and this is something that is taking center stage now. One thing that is important, it's not support. Customer success is very different. Support deals with issue. Customer success deals with how do I make the experience better? If I look at what customer expects, really, this is top of mind. About 80% of customers, when asked, would tell you that this is the most important thing, and that's what would have them come back to you, basically. It is important for them not only to have a product that functions, but that they can get the best experience through that product from the company and deliver then the best experience to their customers. The other thing really is that people talk about NPS, so net promoter scores and all these other ways of measuring the engagement of your customers and their satisfaction. What you don't always really look at is the actual real impact on your bottom line. Obviously this is very important in the business. You want every action you take to have an impact. For 74% of customers, whenever they judge that their customer experience is great, they are willing actually to pay a bit more. For them, it's not a problem to spend a bit more money with you as long as they feel that they have a great experience and are getting the most of what they're doing with you. Again, like it or not, it impacts the bottom line. May I say, for better or worse. It is possible sometimes that it doesn't go where you really want it to go. This is something, though, that you need to take as a commitment. You need to make sure that it's something that's in the DNA of your company, in the DNA of your people. That's something at Temenos that we really take extremely seriously. Loyalty is everything. We have many product, many business line, and for us as well, we can really echo what we hear in the market. Really, in terms of best practice, if you look at what everybody says about customer success, it's really when your customers achieved with your product, they desire income. For us at Temenos, it's through every interaction, every time they speak to us for any reason, whether it's during implementation, whether it's during the life of the journey with us using our product, it's for them to have this feeling that whenever they talk to us, they're achieving the best outcome, and they're getting what they wanted out of the product. Not again, just a functioning product. A customer-centric culture is important, but really it is about customer obsession. That's, if I may say, something that the new actors have taught us in banking and in software. Everybody has that Netflix, Amazon experience where customer success is key and customer interaction is driven through that. For us, really, we need to make sure we have constantly a proactive engagement with our customers to make sure they achieve their goal. Again, it's not about support. Ensuring that they get the best value of our product. They buy a product, they could do more. How do we teach them to do more? Doing more drives more consumption. Again, giving them long-term perspective. How do we make sure that they understand that we're in for the journey and that we will grow with them? Making sure, again, through all the touchpoint that they get that view. Finally, making sure that we take away all the burdens of having to navigate an organization they do not know. Making sure that we are there for them to manage all the cross-team interaction within Temenos and absorb them from all of that. Finally, post-sale financial growth. You sold something, they're using it. How do you make sure they use more of that same thing or come to you for other needs? To derive that culture and purpose of customer success, really, we've articulated our strategy, and we made it very simple. The goal really is that if you look at it, when our customers are successful, actually we are successful. That's pretty simple and pretty basic. Really we've articulated the strategy around three pillars. The first one being customer obsession, the second one, customer protection and growth. The second one is applicable whether you're consuming product from us on SaaS or whether on-prem. Let's look at those a little bit more in details. If I look at the customer obsession, really it's about delivering on your promises. Whatever you said you would deliver in the business plan of a customer, you should be delivering. It's about making sure that the model drives value creation and value realization for the clients. When it comes to protecting and grow, again, this is a perfect growth engine. I mentioned that earlier. It should be measurable in your bottom line, and usually it is. For us, we're saying that any engagement should really lead to growing at least 10% on a status quo. If there is nothing happening, no change, no change in business, and no additional product, we should aim really at year-on-year growing constantly 10% at minimum. Finally, the experience should really be the same whether you're on SaaS or on-prem, because again, as I mentioned, everybody has an Amazon account or a Netflix account, the lines have been blurred. It doesn't really matter. The experience should be the same. That should really help you transition then from your on-prem model to SaaS. Again, for us, it's all about future-proofing the investment and making sure that customers see that. Of course, we want to achieve this. This is what we've been doing for a while now. We are structuring this in a full program. This should be measurable on our bottom line, but also in something very important to us, which is customer references. No matter how much we think we have achieved customer obsession and our customers are happy and we have achieved a customer success culture with them. Really it shows in how much they're willing to talk about what they're doing with us to others. We're very proud to say for our ambassador program, which we've been running for quite some time at Temenos, we have seen this year a very big acceleration of 20% of our number of ambassadors in 2020. We now have 567 individual customers who are happy to take references, who talk to their peers and tell them what they've been doing with us and how great the experience has been. It's actually manifesting itself with 834 individual C-levels or sometime lower level in the bank that are able to come and say to a prospect, to a peer, or to a client that maybe want to use our solutions differently, what they've achieved with us and how great the experience has been. Again, nobody tells it better than your customer. This is just a snapshot, and I'm not going to go through all of those, obviously, but you can see it's a very mixed type of customers. We're talking about large banks that are happy to go and talk on our behalf, mid-tier banks, as well as challenger banks. Across all those segments, you have people who are seeing the benefit of what we're doing and are able to talk about it and to articulate the value. I have to say customer success is almost a transition from the implementation because your best customer success advocates in the company are your implementation and services teams, as well as your partner, right after a customer has engaged with you and bought a solution from you, because then you need to implement and make it work. If anything, this year has been challenging, different, but it has also shown us how prepared we were for this because we've had to move completely remote, and remote implementation now is the new normal. The good thing for us is we didn't have to change much in our methodology because everything we were doing before is still applicable to be done remotely. Obviously, human interaction is always important and customers always want to see our teams and have them on the floor co-located with their teams. However, what we're seeing is that really we were ready. We had an amazing number of go-lives this year while still, again, working remotely. All our teams have been enabled very quickly to deliver, again, the same work, the same implementation remote, and that's because we were doing that in a way before. We were doing workshops before remotely. Not all of them were physical, if only because we had to deal with visa issues or mobility issues. That was easy to change. We were equipped as a company in terms of the tools that you may need for collaboration. These were already in place, and the switch was done, again, instantly, pretty much. When we look at it, really saying that it's the new norm is almost like it was the old norm for us, but our customers are now realizing that it is doable. It takes a bit of convincing, and probably there's nothing better than a pandemic to convince everybody that you had no choice. Banks couldn't stop working. When we started this, we thought we would be in for a couple of months. It's one year down the road, and we have pretty much road-tested that strategy. If you look at it also, it's a very big improvement in the way we manage our resources and our partner manage their resources. The amount of time consultants on a project spend on plane, leaving on Sunday night, coming back on Friday night or Monday morning, for sometime a task that is not exactly a week. This enables us now to have them working on multiple implementation and to use the best skill available on the specific part of an implementation without having to mobilize a person for a week or for a day. Again, for us as well as our partners, this has brought a lot of efficiency and may I say as well quality of life in our consultant side. They're all missing the on-site interaction. Not being on a plane every single day is probably also something good for them. What does it mean in terms of numbers? We've managed to take live 99 new customers that were using our solution for the first time. We're not talking upgrades, we're not talking additional projects. We're talking brand new customers that went live for the first time with one of our solution in 2020. Across all customers, though, it's 307 go- lives. We're getting very close to a customer every day. Last year, we were seeing a customer every working day, and now we are getting close to every single day. It's really a big uptake for us. Also, as we've seen that trend growing, it hasn't diminished. It hasn't stopped. Partners are involved in most of our implementation. In different shape or form, whether it's just for helping us and supplementing us or leading those implementations, I don't think there is any single implementation across Temenos that is done without the involvement of a partner. That's really a great achievement because, again, it's a force multiplier for us. We are not a services company. We don't intend to run a full SI setup, and so we couldn't do that without them. You can see on the graph that this has steadily increased in 2017. You may think that it has a little bit stopped between 2019 and 2020 in terms of skilled resources that we can find in the market for Temenos. You know that we have been managing our cost base on our side, and so we have less consultant on our side, and as a result, then our partners have had to ramp up and get ready to basically supply that capacity. If anything, our partners have now more skilled resources than they had last year. That's a good transition, I would say, to how the partner program itself has evolved.While the fundamentals were there and our partners ecosystem is growing, we felt that it was time maybe to do a little bit of a change on how we were addressing the partners and how we were working with them. Of course, whether you're in a region only or you're a global company, the way we work with partners is slightly different. We've had to revamp a little bit how we, I wouldn't say classify, maybe isn't the right term, but at least how we manage partners. We've created a new tiering system, the first one being the global alliances. If you remember, we were talking about partners all the time, and we've created that separate and distinct class, I would have to say, that's called alliance, mostly to group the partners for which we had the biggest reach and had the biggest implication in all our projects, but also not only in terms of number, but in terms of coverage. We've realized that within our global partners, there were partners that were actually able to work on every single product of Temenos pretty much, that had a plan for capacity over 500 people. We felt that these were partners we had to deal with differently. These are partners, for example, with who we do co-innovation, I would say. The rest is, again, similar to what we used to have. You have those global partners, which are the ones that are operating in all the regions where we operate. You have the multi-regional partners that tend to operate in two or three regions, and then the fully regional partners, which tend to operate in only one region. With the way they operate and where they operate, obviously, you imagine that the number of consultants that they have is actually adapted through that. On the technology side, again, that's something that's being center stage for the last three, four years, especially with the adoption of cloud, where we had to look at our technology partner very differently. Again, we are looking at the strategic technology alliances, again, not only partners, where we are talking about those big software and providers that are not only key to our clients to make our solution run, but these are also solutions we run and we use, for example, in our SaaS. These are partners with which we have a very different relationship, and we figured out that, again, alliances was probably different. The main driver being obviously that we ourselves use them. You have the strategic technology partners, which you can classify and put as the partners without which our solution wouldn't run. Be it a database partner or a SaaS partner, they are needed to run. You have the technology partners, which are, I would say, add-on solutions or companies that help us simplify our offering. Last but not least, the technology providers, that could be point solutions that are needed or desired by some of our customers, and for which we facilitate, obviously, the adoption and the way it is used within our product or with our product. The list is changing. We are adding partners, removing partners, as you know, every year based on the different criteria. By and large, these are the list of people we are working with. Thank you for listening, and thank you for allowing me to share with you our view on customer success and obviously customer implementation and delivery, which is pretty much everything that happens after the customer signs, and it's a very, very important part of their journey with us. Thanks, Alexa. Our next session will cover our approach to innovation, product, and technology. I'm pleased to welcome Mark Winterburn, our Chief Product and Technology Officer. My name is Mark Winterburn, and I run the product and technology group. I'm going to kick off this product session by looking at our ongoing investment in products and technology, where we focused that investment in 2020, and what it means for our customers going forward. I'm then going to hand over to Prema and Tony, and they'll talk through in a little more detail some of our innovations in the product architecture and the technology. We lead the packaged software market in banking for many reasons, but here I want to concentrate on our investment in products and what we do with it. We invest a large development in innovation budget into a single line of packaged products, leveraging the very latest technology. These great products make our customers successful, and so we sell more. We've increased revenues, we've increased our investments. Between 1990 and today, we've invested over $2 billion in our products, more than most banks in their banking software. Our growth has allowed us to accelerate this. We plan to invest a further $1 billion in the medium term. What does that kind of spend look like? This level of investment can be summarized into two themes, which have been with Temenos since the beginning. A continuous evolution of business functionality, staying at the forefront of banking developments, including specific regional needs such as compliance and revolutionary technology, allowing our clients to leverage the latest advances to reduce costs, to make integration easier, and allowing them to concentrate on innovating to satisfy their customers. Prema and Tony will both go into more detail later in this session. In parallel, we've invested significantly in the way we design, build, test, and package our software. As we've increased the velocity of our innovations, we've invested in the tooling we use to automate the various product assembly factories and the comprehensive testing suites. These are now a vital part of our continuous integration, continuous deployment that underpins our SaaS operation. How did we invest that money in 2020? Well, in January each year, we spend a couple of days working with people from across Temenos, demonstrating the latest innovations and new and enhanced solutions. I thought it may be useful to have a look at what we showed them at a high level. Now clearly, I can't compress two days into a few minutes, but I think this shows the scale and the breadth of the enhancements we have made to our solutions. Last year, we invested over half a million people days, and they completed over 180 functional enhancements and over 20 major platform enhancements. As you can see from the list scrolling on the screen, these improvements span the entire product range, all of them aimed at meeting changing clients or market needs, improving the breadth and depth of our functional capability, making the products easier and quicker to install, more open, secure, resilient, performant, et cetera. In parallel, of course, we also invest massively on the technology which underpins our solutions. In 2020, we focused on a wide range of areas, but invested significantly around SaaS in making our products more cloud provider agnostic and strengthening our cloud-native capabilities. Let's recap why we've been investing in microservices. Well, put simply, a microservices-based solution gives clients greater confidence to undertake change, especially core banking and digital transformation, because it gives them the ability to implement more granular change more easily, more quickly, and with less risk. In Transact, cloud-native domain microservices with pre-configured business capability and pre-packaged APIs allow banks to control what functionality they implement and when, whether they do so themselves or procure it via SaaS. The pre-packaged APIs that connect digital channels and other systems inside and outside of the bank help speed up the required integrations. The ability to independently deploy manageable units of the required banking capability, e.g., different product lines or pricing or payments execution, with limited downtime, allows smaller and simpler upgrades, providing banks the agility to roll out new features more quickly and with less cost and less risk. In Infinity, our competitors still believe in connecting channels directly to the core, creating a complex spaghetti architecture in the front office, similar to what happened in the back office. With our core agnostic distribution microservice-based architecture, Temenos Infinity addresses this, allowing banks to independently roll out feature upgrades and new products on the digital channels without changing the core. Banks are starting to realize the need for this architecture via their non-functional requirements, although they may not yet use the same language we do. We believe with the investments we have made over a number of years, we now have the industry-leading platform. It provides the lowest cost, the most highly resilient, and the most secure platform in the industry. That's true whether it's for a SaaS client or whether it's an on-premise implementation. Tony's going to talk about some of these items in a little bit more detail in the next session. What differentiates us from our competitors is that we provide the same software under both SaaS and on-premise license models. That means the virtuous circle of focused investment I talked about earlier, increased sales, increased revenue, and more investment operates for both streams of our business, and that helps us to leverage our license revenue to improve the SaaS offering and our SaaS revenue to improve our license solutions. It also means we offer clients choice whether they wish to buy a license or to consume SaaS from us. This choice isn't only made at the initial purchase. License clients can continue to choose whether to change to SaaS at some point which suits their business and operational needs without having to look for a new solution or a new solution provider. At this point, I'd like to hand over to Prema. She's going to talk a little more about feature function, and also our architecture. She'll hand over to Tony, and he's going to talk more about our technology. Many thanks. Hello, everyone. My name is Prema Varadhan, Chief Product Architect at Temenos. Following on from Mark's presentation, I would like to take you through some specific areas of product innovation and technology that have helped us achieve the growth in the SaaS business and also strengthen our leadership position. Real innovation for us has always involved finding a new idea that is often unmet and also basically an unidentified need that realizes the business value and is technically feasible and also can be deployed in a cost-effective manner. Technology evolves rapidly, we all know that. As a technology company, our focus has been in identifying the trends in technology that have the potential to transform banks in a tangible way and provide the business and IT benefits. Some of the key technological innovations that we have been focusing on, making the shift from on-prem to a cloud-native, cloud-agnostic solution, where we can offer very low cost platform for our banks. We have enabled multi-cloud, whereby banks can have a hybrid architecture across two different cloud vendors. We have moved away from modular architecture to a more loosely coupled architecture with containers and microservices, which provide the elastic scale, the agility at low cost to our customers. We offer also our applications on distributed databases, basically scaling the databases up and down. Everything we develop is API first. Our open APIs have helped banks with best-in-class digital experiences. We consume these APIs ourselves, so it is guaranteed to work. We know that these experiences are best in class, and we test them, therefore, we know it will work. In the last two years, we have embedded AI and machine learning pretty much across all of our platform, whether it is core banking, digital banking, FCM or risk analytics or complaince, for that matter, to provide personalization and automation in digital processes. We have also moved to a continuous integration and deployment model, where changes can be automatically deployed in a continuous fashion. This is how we deliver our software to our clients, whether it is on-prem or on SaaS. The key point here is we offer these technologies with a single code base. We don't have one code base for SaaS. We don't have another code base for on-prem. Absolutely not. We have a single code base. The level of abstraction, the focus on innovation, the discipline with which we continue to build our software, that is what is enabling us to seamlessly move into the SaaS model and also continue to strengthen our position with the on-prem customers. No matter the size of the banks, these are the fundamental banking characteristics that banks must acquire in order for them to be successful in their transformation. I won't go into each and every specific point here. The slide is self-explanatory. We strongly believe for banks to transform, they need to look at reducing their cost dramatically. This can be achieved by modernizing the systems, using more of the commodity technologies, running more of the stack on commodity platforms, and then to provide that value, the cloud vendors and the technology platform vendors offer at the right cost. This is what we believe banks must be doing. We have seen that when businesses, banks move their businesses onto cloud, they have definitely achieved at least 10% of their legacy costs in many cases. On the right-hand side, you can see a few characteristics. These are absolutely fundamental. They are foundational in many ways. No matter which option bank chooses, security, resilience, and openness of the banking platform, these are absolutely critical. Banks are opening up their solutions to third parties over the internet. Therefore, security is a major factor. Resilience particularly has to be baked into their processes in robust testing and also in the operational practices. Banks should be leveraging the technological solutions that are available in order to achieve that high availability and resilience of the solution. In summary, with over $1 billion of investment in the medium term and the functional maturity that we have on our products, it's very clear to us that Temenos continues to be the preferred partner for banks to achieve these goals. All these characteristics are pretty much what we focus on when we develop our software, when we change our platforms, when we add more technology components. This is what we are focusing to achieve, these characteristics. Each of the platform featured on the left that you see in this slide has a direct correlation to banks' ability to transform their business. It's again, self-explanatory. I won't go into every specific point. As few examples, I'll take the artificial intelligence example. When banks embed AI models into their SME solutions, for example, the small business, medium business enterprise, they drive the business growth by simulating different business solutions. They're able to analyze the cash flow. They're able to provide some real-time funding advices. They're able to truly differentiate the experience that the customers are getting from them. Also, uniquely bundling the products and services that are tailored to those customers' needs, all by analyzing their data and also deriving the insights from that data. Taking all these at the right price point and offering that to their customers. This cannot be achieved without AI and machine learning. The capabilities have to be embedded on the platform for it to be leveraged across various business applications. Another very important example, I think that is not discussed enough, though it is truly fundamental, is again, continuous integration and deployment. Banks using legacy systems often have struggled to roll out new digital features. Without a CI/CD model, it is simply impossible for them to continuously roll out the digital upgrades. In the COVID times, they had to do plenty of feature rollout, digital features rollout, and that had to be done very frequently and in a very agile manner. Without a proper CI/CD kind of approach, it is impossible for banks to do it. Because that is how we deliver our software, banks can extend the model, the pipeline that we provide through continuous deployment in order for them to roll out those solutions, whether they are deploying it on-prem or on their own cloud platform, or we host it for them. The main goal for us in offering microservices-driven architecture is to give banks the ability to take a subset of capabilities, not the entire core banking platform, just a discrete set of capabilities, and take it in any particular sequence that fits their transformation strategy. That means banks need more choice, right? We can't prescribe the sequence in which they need to do. We want to give them more choices in how they pick those capabilities to go about their transformation journey. The important point here is we have always offered the solutions by value chain, but by offering more of the distribution services, which are pretty much packaged banking business logic, which offer the digital sales, digital servicing, digital marketing, completely agnostic of core, that fills in a big white space for banks. Because banks have always connected channels to their cores or product systems, and when they need to roll out those digital features, they have to change the core, they have to update the channels as well. It becomes extremely difficult for them to cope with those changes, both the changes, and keep it in tandem. By introducing a set of core agnostic API-first distribution services, we completely solve this problem by giving that decoupled and de-risked option for them to do those rollouts of digital features. This is a very important point because not all vendors look at this problem space the way we do, and we don't believe there is a market-leading solution like we have on the headless distribution architecture basically for the front office. I also wanted to emphasize strongly again on the model bank and country layering approach that we have strictly followed all these years. This has given us strong foundation to be able to offer the same set of solution on our SaaS model and also on-prem. All our clients have been offered the new solutions and new features that we develop as upgrades. They're able to take those features, whether it is on our SaaS or on-prem, without any loss of service, with full backward compatibility. This is a very important point because we have seen lots of companies which make a transition into SaaS try to take a different path to build a separate set of solutions and products, particularly for SaaS, different to the on-prem model. We don't have to do that because the discipline with which we layer and build our software, that is starting with model bank, that is applicable to everybody, all banks across all regions, and then a country layer, and then a bank-specific customization, that gives us that ability to offer this whether on SaaS, on-prem, with a single code base. This is a very important point. Finally, I would like to conclude the presentation with three focus areas for us. Data migration, that's not been talked about enough. We have seen banks deal with this area, which is a very complex set of activity. It has got lots of sequence in actions to be executed in a particular order, meaning filter the data, de-duplicate the data, ensure that the data is clean, it is mapped in the right structure, and then extract the data, transform the data, load it properly, all performed at scale without loss of any data. This is a very important area and a complex area for banks to tackle. What we have been focusing on is providing automation, providing smart data mapping through AI algorithms to speed up this process, to optimize the process, to also enhance the process significantly so there is a reduction in the time, efficiency in the data migration process. All of this happen quite seamlessly. Secondly, the other area that we have been focusing on, in the context of COVID-19 particularly, is the need to rapidly expand and deepen the digital offerings in multiple channels with straight-through execution and processing. The banking domain-based microservices pretty much offer that choice for banks. It avoids complex, risky, costly exercise of retesting the entire platform to roll out new features. This, along with the continuous deployment, continuous integration, and automation of deployment, it becomes very easy for banks to take discrete sets of capabilities, roll it out continually, and therefore go through that process of continuous renovation. Finally, the packaged software vendors do talk about broadening the functional coverage all the time, hyperparameterization and all that. The tooling, in order to extend and customize the software, has to be equally efficient. It has to be low code to an extent possible. It has to be very easy and self-explanatory when it comes to how to configure the system, how to extend the system, extend the particular business functionality or a business process, and then to be able to maintain all of the code upgrades and also the customization without any loss in functionality. This is very important. We have been focusing a lot in our tooling to provide that low-code capability across various aspects of our platform. With these three very important areas of focus, we believe that we are in a very strong position to offer cost reduction, shortening the implementation timelines, and a very low-risk implementation approach to our customers, whether it is SaaS or on-prem. Thank you very much, everyone. I'll now hand over to Tony, who will take us through technology and innovation. Hi, everyone. My name is Tony Coleman. I'm going to take a few minutes and talk through sort of at a macro level how our products and technology fit together. We've been speaking throughout the day of the investment that Temenos enjoys into its products and into its technology, the idea of the evolution of the solution from a functional point of view, and the revolutionary technology leaps that we've gone through in the past. Although there are a number of aspects to this, today I'm just going to take a few minutes to talk through how some of our cloud-native and cloud-agnostic technology, coupled with technologies like containers and microservices, are benefiting not only the on-premise and the cloud deployments, but our Temenos SaaS business as well. As a quick reminder, the diagram is talking about Infinity and Transact, but it's applicable to all of the products and all the business lines. We have the ability to run the software ourselves. In our Temenos SaaS offering, we can run the software for our clients, or the client can choose to run the software themselves, and there's a number of different operating models that they can choose to do that. The obvious one is indeed the public cloud, and as Temenos, we've done the work, we've made the investment into those various reference architectures for the leading public clouds. That list is growing all the time, and most importantly, we keep them up to date. Every year, every month, we are reviewing the latest offerings coming from the cloud platform providers and improving our reference architectures and the executable architectures that back all of that for those cloud platforms. We've also done the work to allow a hybrid model, be that a burst to cloud or a fail to cloud option, we support both of those. We have two flavors of the on-premise offering. The idea of a cloud-like solution where we leverage the same technology platform that we use for the cloud deployments. Technologies like containers, container orchestrators, be that OpenShift, Kubernetes, these sorts of technologies, to name a few, we leverage those on-premise. Of course, we have a more traditional on-premise option, Java EE app servers, et cetera, for any client that wants to take that model. This view is very much backed up by the Temenos Value Benchmark. As you can see from the slide, the numbers speak for themselves, really. The idea that the modern, scalable, secure infrastructure is at the forefront of everybody's mind. In these unprecedented times, it's clear that you need an adaptive and resilient operating model that will indeed scale to spikes in demand, and critically, not only scale up when you have those peaks, but also scale down. That speaks to the efficiency of the cloud platform and the underlying cost savings of that elastic scaling. What does it mean to be cloud-native and cloud-agnostic? Because I've talked to a few people, and they seem that these are two almost diametrically opposed points of view. Let's take a few moments to talk through that. By cloud-agnostic, we mean that there is choice of which cloud platforms the solution runs on. The cloud-native part, there's various definitions. As you go through, whether you look at beyond the 12-factor app, 12-factor apps, the definitions of the Cloud Native Computing Foundation, what we've found is a lot of our clients, a lot of our prospects, a lot of the industry, what they really want to see is that the software is using as many of the managed services as possible. The cloud-native architecture that we've put together, the way that we deploy it, almost all of the infrastructure, perimeter services, database services, et cetera. Everything that you need to operate the solution, we leverage as managed services. This really means that from a cost and efficiency point of view, you are leveraging the scale of the platform provider, and critically, you can free up staff to do more interesting tasks that add value to the business. This is true, not only to our clients that run the solution in the cloud themselves, but to the Temenos SaaS business. That leads us into this idea of continuous operation. The classic DevOps CI/CD pipeline, we're seeing now extend more and more into the idea of not only continuous integration, continuous deployment, but continuous ops. Leveraging a tool chain that will enable that is key to the success of this always-on scalable, resilient solution. We've introduced a single tool chain across all of the Temenos products that allows you to do end-to-end change management baked into either the bank's SDLC or the Temenos SaaS SDLC. That will run as well on cloud or indeed on-premise. All of this leads us to the point where Temenos is positioned at a macro level to really leverage all of these technology benefits in the product towards the SaaS business. All of the things that we've been talking about for a few years now, about the improvements to the product, the technology platform, et cetera. We're really seeing that accelerate our scale in the cloud, in the SaaS business. There's a number of key things there. The main drivers that we're seeing is through intelligent, smart, elastic scaling so that we can scale up the underlying infrastructure up through the cloud platform. Nothing that Temenos is running, leveraging the containers and the elastic scaling of the underlying infrastructure provided by the cloud platform. All of that coming through, not only reacting to load, but predicting the upcoming load through data. Then, again, coming back to the idea of leveraging and using these managed services. Last but not least, the idea of this safe extensibility, which means we can deploy updates, upgrades through the SDLC pipeline with confidence. We can put through high impact changes frequently and predictably. To sum up, Temenos offers choice. This is choice about who runs the software, whether Temenos is running that through our SaaS business or the client is running the software themselves. We give choice of the architecture, whether that is using the integrated solution that we've talked about, or the decoupled solution where the functional offering is enabled and deployed as microservices, or some hybrid combination of both, allowing our clients to choose the business benefits they wish from those architectures. Then, as I mentioned right at the start, the idea of the deployments, the choice of deployment. We give all of that flexibility to use the platform of choice, given that we operate in a highly regulated industry where there are some geos where the use of cloud for financial services is restricted. Giving that cloud-like deployment, which gives a clear future and an on-ramp to cloud. Last but not least, although it's not a choice per se, the package solution that is upgradeable, that gives you those safe extension points so you can confidently upgrade. We give the contribution model banks, which again, we keep updated for regulatory compliance as well as that initial speed of implementation. Thank you for your time. Back to you, Adam. Thank you, Tony. Our next session will cover our SaaS and cloud business. I'm pleased to welcome Ross Mallace, our business line director for Temenos SaaS. Hello, everybody. My name is Ross Mallace. I commercially look after the SaaS business here at Temenos. I think 2020 was another great year for us. We're continuing to see such a strong growth rate and acceleration towards SaaS in the market. The profile of our customers that onboarding onto our service is increasing in terms of them being regulated banks in many different geographies around the world. I think just talking about geographies, I think the most exciting thing for me is that we're really seeing some significant momentum in the U.S. market. This has really picked up as that market is moving to the public cloud and SaaS. I think what's most exciting is it's the perfect match between the established cloud infrastructure that was actually born in the U.S. and now finally a real structural change, that's moving in terms of the banking industry moving to digital. Of course, the U.S. is actually the largest contributor to our current pipeline, with Europe coming after that. I think that just on that note as well, I think with the establishment of the cloud sites and data centers that we're seeing, for example, in the Middle East, we're starting to really see some early mover clients blaze the trail and come with us on that journey moving to cloud. I think broadly the theme is that we're continuing to see that building pipeline in such regions where a couple of years ago there wouldn't have been any activity due to regulation or data center availability. Each year, again, we did a lot last year, we continue to break those new markets. We are actually helping banks be the first in their regulated market to actually come and move their core workloads to cloud by taking Temenos SaaS. I think fundamentally it's really exciting as this momentum and proof point suddenly just helps us build on that year on year, especially when we look into the year ahead of 2021. Really positive to see is not just the fact that we're growing and doing well, but it's also the success of our clients we're having, with who are launching new innovative digital propositions, of course, on our platform. We've got many examples, but there are a couple here we're showing, where the results have been truly fantastic, having gone live last year and seeing a massive growth and uptake. Just to give you a sense of the magnitude, this account growth is in the millions, and it's great success with the right clients, obviously, who are then leveraging our great technology. Fundamentally, this growth is all about driving, again, further consumption on Temenos SaaS, which is a huge benefit of being in this business in the first place. In 2020, we continued to see some real strong tailwinds in the market. It was a challenging year for the world with the onset of the pandemic, but it really ultimately drove the market deeper in towards digitalization and ultimately SaaS. I think that the banking and cloud regulations were already moving fast, but I think that accelerated last year, as the uptake of cloud and SaaS became much more of a key thing they need to do. For example, all of a sudden you have employees who can't come in, due to the COVID restrictions, lockdowns to come in and manage infrastructure. This really put hyperscalers onto the map in terms of actually fulfilling a really key need that was generated through COVID. I think on top of that, I think regulations and deployment of financial services, whether it be public or private cloud, whilst they differ across different regions, they're all learning from each other. As each one continues to issue guidance and give a clear path for banks to move to cloud, the others are following it because they all talk to each other. The other key structural driver, and it's quite obvious, but the non-banks and newer banks are really starting to attack the markets that used to be dominated by traditional banks. As they start to come online, it's driving more and more growth and interest in that space. All of these players are really looking for software with customer-friendly, easy-to-access capabilities with low barriers. That means being able to take something on a SaaS basis and buy software, buy hardware, put it together, and really allow the banks to get to market quickly, all these challenges, but get to market quickly with combined propositions. I think that ultimately the theme continues where we continue to see that customer demand for always on mobile-only banking experiences. That puts a huge pressure to have a high performing front to back, especially core banking systems that can scale on demand, in this real change in the profile in the way customers access data, do transactions, and get serviced by their banks. Not everybody in the market has an answer to this. When we talk about Temenos, and we talk about Temenos SaaS, I think one of the great things that we make clear in the market and make clear to you here today is that we've invested heavily in our technology and our software over time, and keeping up with all the latest innovations around cloud, et cetera. One of the greatest benefits this has brought and allowed us to do, that hasn't always been clear, is that we've been able to build our SaaS offering around the same software and technology that we are selling to banks to deploy in the cloud themselves. This means that we're not reinventing a new product. We're not creating a cut-down version of our software that can be put in the cloud to offer as a SaaS, as a much more limited scope. We're able to take the power and the might and the 27 years of deep banking experience and offer that on our full SaaS model. When we are actually going out to market, we have two simple models. We always ask ourselves, if the bank wants to run the software themselves, whether it's on-cloud, on-premise, in containers, whatever it is, we can sell a software license to them. When we run it, they consume it as SaaS. That's the same capability with Temenos responsible for managing the entire service, and the bank consumes it and pays for what they use. Talking a little bit more about Temenos SaaS, a couple things worth making clear is that our SaaS offering is very much like a global shared service. It is like a global product. Something obviously is proven and running banks around the world, but it's that one global team, using pre-built, standardized people, process, technology, tooling, automation, and really run and managed like a global product. Within that, being able to offer dedicated client data environments, networks that are therefore, most importantly, compliant as well from a regulatory risk point of view. One of the key things is that regulators are very much pushing the banks to look at this. When you take mission-critical or core workloads to the cloud, you want to be able to manage and control change and risks in the way that core workload is managed. The only way you can truly do that is to have a SaaS experience but still have some of that autonomy that dedicated environments give you. Of course, being a global service like a global product, as we continue to invest our R&D into the service, it gets better over time, and therefore anybody who comes onto it, the next year, they're going to get the benefit of a better service. Why are we winning and why is Temenos SaaS? What's so compelling about our offering? I think that the key thing is that we are future-proof. It's all the continuous innovation, the continuous R&D delivered in an evergreen delivery model. Okay? We always use the word never upgrade again. You can consume new capabilities as we deliver them over time. I think the other big thing about it being something that you can spin up and consume, it's all about that accelerating time to value. Being able to deploy in minutes and go live in days or weeks, not months and years. To take all of that, you really need someone you can trust, somebody who you know can do it in a compliant manner. Someone like Temenos, with the unrivaled industry certifications and unrivaled pedigree in terms of our customer base and proof points of regulated banks around the world on our service. When you combine all of that with 27 years of banking experience and expertise, that deep expertise and breadth is a powerful winning combination. I think that the proof points around that is the fact that we are outselling in the market. We are outselling our competition and winning a significant number of challenger banks. People always say, Well, why are you winning in this space? Why do they choose us? Well, I think that one key thing they look for is modern technology stack, and it's something we have. The challenger banks, always their key ethos is modern technology. The other thing is they're also prioritizing agility and time to value. They've all got time pressure. They want to get to market quicker. They want to seize the opportunity. Being able to obtain that benefit on SaaS, it's really a key facet of something we can offer that meets the mark. Fundamentally, I think one of the things I find most interesting is that when you're in the startup space or challenger bank space, you're trying out a new business model. You want to see if it works. You also tend to have plans for your future growth, your future expansion of your business. When you come to a vendor like Temenos, it's got a very big, broad and deep portfolio of offerings. Not only is it giving them what they need today, but you know that it's giving them their future needs and potentially the things they haven't thought about yet because they may have to pivot their business model. It means that they've got that comfort that they're not only in that trusted, safe pair of hands, but they also know they're going to be able to get whatever capability they need from the number one banking software company in the world. That's why I think we're outselling the competition, especially in the challenger bank space. It's not just the challenger banks that are new entrants to the banking market. Of course, we're competing against new SaaS vendors in our space. I think that it's a continuation of a story in terms of how we're competing and positioning ourselves against them. We are unrivaled when it comes to huge functionality. I talked about that 27 years of banking experience and capability at our proposition. Again, combined with that leading technology, where we can actually compete and go toe-to-toe with those that claim to be born in the cloud or more recently developed in the cloud. Of course, that single code base. We're not competing against these new players with something small and narrow that we've developed recently. It's leveraging all of that deep experience and that deep functionality on a SaaS basis to really use a killer combination. You take all of that and make it evergreen and available to banks, it really hits the mark. When you get away from the exciting technology capability story, when you're moving to cloud, when you're launching a new bank, and you're going to go through regulation and compliance, whether it's through your migration to cloud or actually getting your banking license, we're unmatched when it comes to certifications and quality around operations. The other big thing, I think geography-wise as well is we've already gone through the growing pains of breaking into markets, building out all the localization and functionality required and local payments or whatever it is. They know we have the scal ability to deliver, and meet their needs. Combining the breadth and depth, which I've already mentioned, with our regulation and compliance proof points. We've taken many banks through their initial orders to get their banking license, and we've also taken many banks to cloud for the first time and helped them go through that process, all taken on our standard service that has met the mark. Varo recently made history by becoming the first fintech to be a fully digital national bank. One of the things that really differentiates Varo is its technology. We've chosen a cloud-based OpenAPI technical framework and architecture that allows us to very rapidly innovate and bring new products to market quickly. It also gives us a hyper-efficient cost structure, and that is really important because as we're trying to create value for consumers, the fact that our costs are so much lower allows us to pass that back to the everyday consumer. We are the new proposed Alba Bank, a brand new, exciting challenger bank based in Glasgow, Scotland, servicing the small and medium-sized enterprise community of businesses throughout the United Kingdom. Our journey established and started a couple of years ago, when we embarked upon the project. We had identified a real need in the market to support SME business as they felt that they were not being served appropriately by the larger incumbent banks who were already operating there. We needed an established partner with an established relationship with a number of other banks on which we could then leverage. We needed the ability to have our services in the cloud. We were not looking to have stacks on premises and have a traditional IT approach. That wasn't going to work for the way we wanted to do that at Alba. We chose Temenos SaaS technology as it allows us certainty of cost in the model, which is really important when establishing a new challenger bank. We selected Temenos as our technology partner because of the breadth of their product across our core channels and analytics, their ability to integrate with our third-party service providers, their ability to implement. We're using Temenos Infinity, Transact, and Analytics solutions. We elected to go with a front-to-back SaaS offering to reduce the overall complexity of the solution. We selected Temenos as our technology partners as they have a proven track record in keeping up to date with technology trends. It's got a commitment to R&D and product service improvement. They share a vision with us on what the future of banking will look like. We're at the beginning of our journey with Temenos. We're relying on Temenos maintaining its edge in the core banking space and keeping its SaaS offering in line with technology trends, providing us with core banking innovation, reliability, agility, and enabling our own innovation in bringing beautifully simple and rewarding banking experiences to our customers. The SaaS model is a vehicle by which we leverage Temenos' strength in financial services technology. We chose Temenos' SaaS platform because here at Altium, we're always trying to push the boundaries on how we can deliver our products and services in the most modern, most advanced, most stable, and secure way, so that our end clients can benefit from the fact that they have incredible state-of-the-art products and services and a way of interacting with those products and services. The benefits that we expect to gain from using Temenos cloud technology is through both lower cost of customer acquisition and cost to serve. We expect to achieve this via straight-through processing of the customer onboarding journey, also through offering our customers with self-service capability via their channel of choice. We've absolutely been able to achieve this, which has enabled us to meet our business case objectives. Temenos is going to be a great partner for us to be able to help that rapid cycle of product iteration, gaining insights, and then being able to continue to deliver solutions that solve real pain points for consumers. We estimate that our cost to service a customer is going to be about 25% of what it would cost a traditional bank to be able to service a similar customer. It's a real competitive advantage for us. Temenos was the core banking system that allowed us to really fulfill our dream of being best in class in terms of security, best in class in terms of technology, and best in class in terms of products and services. I'll now hand over to Colin Jarrett, our Chief Cloud Officer, who will talk to you a little bit more around what we're doing on the operations side of things. Thank you, Ross. Hello. My name is Colin Jarrett, Temenos' Chief Cloud Officer. Last year, I talked to you about how 2020 was going to be the year of SaaS. Whilst we didn't foresee the turmoil of the year, I feel that we were right in our prediction. This year, I want to focus on how our operations are ready to grow the business at hyperscale. You'll see from the slide that our operations capability has true global breadth and depth. Our specialist cloud engineers are in every region. In 2020, we restructured our capability to build out our global command center in India, adding both scale and experience. Our global SaaS operations and support teams in India provide great depth in our core platform and product knowledge, as well as allowing us to rapidly deliver scalability in operations as we roll out improved automation and processes. Our regional capability allows us to deliver improved 24x 7, follow- the- sun support to our clients, while our local experts work with our clients in the regions to implement their cloud solutions. We're pleased to see every region around the globe in 2020 increasing the take-up of our SaaS services. We've also been investing significantly in our product, tools, and processes. We're doing this to deliver improved scalability and maturity to support the hyperscaling growth in 2021. In product, we're increasing end-to-end automation of our release management, reducing cost, and improving reliability. We're also improving our product's auto-scaling capabilities to deliver increased operational cost efficiency and enhancing our upgrade capabilities, helping clients to ensure that they are up to date with our latest improvements. We've also been enhancing our security services, a critical area for us in 2020, where we've been seeing increasing global threats. Our philosophy is to automate everything, and we've been working with industry leaders to improve our tooling to deliver better operational performance and increased efficiency. We understand that over the next day or two, we'll be receiving industry recognition for our intelligent, proactive, AI-driven monitoring capability, and we're really pleased about that. We continue to focus on improving our operational processes, driving standardization, improving operational readiness, and enhancing our incident management processes. In addition to improvements in product, tooling, and process, we've made a significant change to our organization. We've established a dedicated SaaS engineering team within our overall SaaS operations organization. The SaaS engineering team designs, builds, runs, and supports the platform with the goal of improving overall reliability. More specifically, the team delivers automation, builds zero-touch capabilities, drives zero downtime, and delivers continuous improvement. The outcomes of this team are improved cost of operations, improved platform stability, and enhanced scalability. To summarize, we're confident that we've delivered a highly successful SaaS operations that is ready for hypergrowth in 2021. With that, I'll hand you over to Joaquin, and thank you. Thank you very much, Colin. Welcome to the Infinity session. My name is Joaquin de Valenzuela. I am the line of business director for Infinity. It's a pleasure to be here. I joined the company four months ago coming from Salesforce. I have been the head of financial services in Europe, Middle East, and Africa for five years there, and I am very excited about the incredible journey that we have multiplying the Infinity revenue. It's an incredible opportunity to help more and more financial institutions to transform their businesses, to disrupt the markets where they operate, and also to accelerate their digital journeys. Let me start talking about some of the trends that we see in the market. The first one is about digital transformation. We will all agree that this has been a common theme in the industry in the last few years, and COVID has really accelerated this trend, and digital is now the new normal. We see also how there are disruptive technologies that are helping the banks to accelerate their digital journeys and also helping the banks to achieve customer centricity and to reimagine the way how they interact with their customers providing a personalized service. Finally, I would like to remark the third trend or major trend that we see that is about the rise in the customer expectations. I think that the consumers and the customers are really used to interacting with the fintech companies, and that kind of amazing experience is the one that they are expecting to receive from the financial institutions. These three trends are, let's say, pushing the banks to accelerate the plans they have to put the customers at the center of everything that they do. To achieve that, they need to acquire new capabilities. Some capabilities are related to the 360- view that they need to get to know more about their customers, to be able to understand which are the goals, the interests that these customers have in order to provide that personalized service. They need to take this idea of personalization to the limit, thinking in, let's say, customizing every interaction that is made across all channels and touch points, but also even thinking in providing a hyper-personalized price for a product in the context or service in the context of the relationship that the individual or the business has with the financial institutions. These are two of the capabilities needed, but we are also speaking about transactional capabilities. We're speaking about being able to implement an end-to-end onboarding or origination platform, being able to provide world-class services. It's the combination of all those capabilities, what is needed to achieve customer centricity. We think that this idea of customer centricity is a major trend in the industry, and it's something that all the financial institutions are trying to achieve. And we feel very proud of what we are doing with Infinity, helping the banks in achieving that view. We see hundreds of financial institutions, more than 600 now, that are using Infinity to transform the way how they interact with their customers. Financial institutions that are small credit unions or many of the challenger banks, or very big banks, universal banks like HSBC, that have presence in multiple geographies. We see this also across all different line of businesses, from retail banking to wealth management, business banking or corporate banking. We feel very proud of what we are doing with our solution, our digital banking platform. We are very proud of being able to help so amazing number of financial institutions to accelerate their digital journeys and transform their businesses. It's interesting because what we think in the capabilities that we have in the platform, we see how complete it is and how unique it is, because we are speaking about the first layer of data. We collect information, and we access to information that is in a data lake, in a core banking system, in Temenos Transact or in any other core banking system or back office system that the customer has. We are able to leverage all that information, and we are able to extract value from all that data using our XAI platform. Creating insights that are actionable, insights that, for example, are related to the next best action that can be implemented in the context of the relationship of a banker and a customer. We also provide, as part of this platform, business solutions that are very complete, are about streamlined business processes that cover absolutely everything that is needed, that provides a seamless experience to the bank customers, and that cover origination and onboarding across all different lines of business, from retail banking to SME to corporate banking. We are also speaking about the business banking solutions. We are speaking about putting 25 or adding 25 years of experience in the banking industry to solutions that are really accelerating the roadmap of our customers to achieve or to implement digitization strategies. We are speaking about solutions that include, are hyper-customized for retail banking or for wealth or for business banking or for corporate banking, and that are really including what is needed to personalize the service that is provided across all the different channels. This is very important because we think that this is a platform that is built for banking, that is leveraging all of our experience in all these years and all of our experience in the banking industry. Well, we think that is a very unique accelerator. All of these capabilities provided are also enriched by the ecosystem. We have many partners who are adding unique capabilities, are adding incredible capabilities to this platform. Well, we think that this is a combination that is super powerful and that is one of the reasons for the success that we are having in the banking market. This success is being recognized by many analysts. One example is Omdia, that is positioning Infinity as a true leader in the top quadrant in terms of customer experience and solution capabilities. We think that this is the result of all the investments that we are doing in the product, but also in terms of how we are helping the customers to be successful when using Infinity. I could like to also to make a deep dive on the areas where we are helping banks in. We are helping banks in three different areas, I could say. The first one has to do with the digitization of the customer journeys. That is a super hot topic in the banking industry. Also, we help them to personalize the experience that they provide to the end customers. Finally, in a world that is more and more interconnected, that is more about API ecosystems, it's an API-driven economy. I could say that we help the banks to go beyond banking, to go outside their comfort areas, basically delivering a service that combines financial and non-financial products and that leverage very new distribution models. Let me now speak about the first area, the first topic that is about digitization. This starts with the onboarding experience, and this is very important because this is the first time the customer has contact with the bank. We are speaking about the first experiences, and it's important to provide, to welcome the customer and to delight him or her, so providing this frictionless experience in the onboarding process. We are speaking about implementing the easy banking concept and also thinking in helping the customer through all the different mechanisms, I could say. One of them has to do with the self-services channels that are fully digitized. The second one has to do with the personalization, the personalization across all channels. We are speaking about knowing the customers. That is super important. We are speaking about guiding the customer, and for that, it's absolutely relevant to produce insights that leverage every piece of information, as we were mentioning before. It's also very important to be able to wow the customer also to produce really an amazing hyper-personalized experience that is even though proactive in terms of, let's say, helping the customer to achieve their life goals and the financial goals that the person, the individual, or even the business has. Finally, this idea of going beyond banking, so implementing or helping the bank to implement the concept of banking as a service and banking as a platform. The banks are not anymore the only players in town, and it's very important for them to distribute services through other platforms or to even though own the platform and embed in their offering of products and services, what is coming from even though non-financial institutions or even competitors. That's something that we are starting to see in many markets. We have spoken about the capabilities, the recognitions that the analysts are making of Temenos Infinity and our ability to provide an incredible experience, and also the capabilities that we have in the platform. To be honest, all of this has made us think that there is no limit in terms of the number of customers we can help with our solutions. We are very, very ambitious, I would say, in terms of what can be achieved with our platform. Obviously, the investments that we are doing are paying dividends. What we want is to make double down on Temenos Infinity. What we have done is to create a new organization, a new Temenos Infinity line of business with a very strong growth and customer success-obsessed culture. This is super important. We think that this organization is going to be instrumental to grow the business, and we have implemented a go-to-market plan that has two dimensions that are important, that obviously put the bank at the center of everything we do, but include two dimensions, focus in terms of the ranges, the accounts that we target, but also includes a scale dimension. This scale dimension is absolutely critical because we don't want to scale our business model to be able to help many more financial institutions. For that, what we are doing this year is to pivot our approach around sales plays, identifying or creating solutions that respond to common and repeatable business problems that we find in the industry, but also thinking in reinforcing our partner ecosystem, and that is absolutely critical from a delivery point of view, but also thinking in the strategic partnerships with some absolutely key companies. Let me speak now about the strategic partnership that we have signed with Salesforce. We are bringing together the number one digital banking company and the number one CRM company, so Temenos and Salesforce. This is a unique opportunity to build a solution that will help thousands of banks to accelerate the process to achieve customer centricity. All these banks are obsessed in terms of providing a hyper-personalized, mobile-first, omnichannel, truly digital, and advice experience. That is exactly what we are going to be able to do, combining the CRM capabilities provided by Salesforce and the transactional capabilities provided by Temenos Infinity. We are speaking about creating a platform that brings together the lead management, the opportunity management, the case management capabilities from Salesforce with all the servicing, the onboarding, the origination capabilities that we have in Infinity in one platform, giving all those capabilities to the relationship managers, to the bankers at their fingertips. That means that we will help the banks to, for example, create conversion funnels that integrate the relational and the transactional world, creating those funnels that will allow them to capture all the leads, convert those leads into opportunities, close the opportunities, and start the onboarding and the origination processes in one platform, providing a seamless and amazing experience, I could say, to employees and also to customers. We are speaking about a solution that is going to transform the way how banks visualize customer engagement in physical channels. We are speaking about a platform that is focused on those physical channels, contact centers, branches, and that will improve the 360 view, will supercharge the employees, because we will be providing actionable insights that combine the relational, the CRM, and the transactional information. We will also be integrating the digital and the physical channels, and that is something very important because we will be able to give the banks the ability to start, let's say, a transaction for a customer, an end customer, to start a transaction in, or a business process in one channel, continue in the branch and finish in another channel. Well, we think that this is absolutely unique in the industry. No other player has anything like that. Well, having in mind the amount of banks that are implementing in somehow this journey, we think that this accelerator is going to make a difference, and it's going to really have a huge attraction in the market. We are targeting with this solution, not just the branch networks, we are targeting any physical channel. We are speaking about contact centers or wealth advisory centers, and we are talking about many different personas. Of course, all of the employees seated in the front office, so bankers, relationship managers, mortgage advisors, but we are also speaking or agents in a contact center. We are also speaking about employees in the middle office and the back office, so employees working in an onboarding team, reviewing documents in a back office or credit officers or risk officers in the middle office. It's a solution that we think is a game changer for Temenos. It's going to, in many aspects, disrupt the industry because we think that with this solution, we are bringing something that the banks were looking to get, and this is going to help us to position Infinity as the preferred banking solution for all customers and especially for all customers who are using now Salesforce in the physical channels. Let me now show how it works, this solution that will be available by July, and that will initially be focused on retail banking and SME, but that will expand to all the other line of businesses with the intention of helping the banks to unify the financial institution around their customers. Let's see how it works. Today is a big day for the Morris family. They're waiting for son John's exam results, and it's good news. When they have finished celebrating, his mom, Julie, says he's going to need his own bank account now. Luckily, Bank of You makes this an effortless experience, and in a few minutes, John has his new bank account and a payment card. After breakfast, John goes out to meet his friends to celebrate their results. John buys the coffees using his new banking app. He sees the transaction come through and can categorize it and set budgets to build healthy financial habits. He can also create goals. He's been admiring his friend's bike, so he snaps a photo and adds it as a goal. Meanwhile, Julie's relationship manager, Justin, is notified that a new account has been added to his client's household. He loves working for Bank of You because he gets to help people achieve their goals. Fast-forward a few months and John is at university. He's settled in well, but at the start of the second term, his student loan payment is delayed. When his next rent is paid, this would take him overdrawn. The bank proactively reaches out to him to help him find a solution, and he decides to continue the conversation, talking with an agent. Sally, a bank agent, can see the full 360 of John's history and offers him a free overdraft facility. John is relieved and agrees. What could have been a stressful situation has been made simple with Bank of You. Fast-forward several years. John is really happy with Bank of You. He knows they look after him, and over the years, he takes out additional products. One day, John receives a personalized email message that based on his current situation and the evolution of the housing market, he could save money if he were to buy a property rather than continue to rent. John's interested and starts the guided application but is out of his comfort zone. He wants to do some research. A couple of days later, John receives a nudge to continue his inquiry with an option to speak to a mortgage advisor. John hit the yes button and chooses meeting Sarah, a mortgage specialist at the local branch. When John arrives at the bank branch, he receives a welcome message on his phone. Sarah receives a notification that her client has arrived. In preparation for the meeting, she has seen a full 360 view of John. She even saw that he started the application online. Well prepared, she meets John, and together they seamlessly move the conversation from digital to physical, building on everything John has already shared across other channels. Sarah is able to show some specific mortgage types tailored to John's circumstances. John is impressed by the continuity. Even though they've never met, it feels like Sarah already knows him and is there to help. Sarah guides John through the application from the point he left to get a mortgage in principle so he can start his home buying journey. This white glove experience cements his advocacy for Bank of You. Bank of You has been there for John every step of the way, proactively anticipating his needs and delivering a hyper-personalized experience at each point of his life. Experiences like these are only possible when the best digital banking solution and the best customer engagement platform join forces. This is the power of Temenos Infinity Digital and Salesforce Financial Services Cloud. Hope you have enjoyed the story about the Morris family. To finalize this presentation, I would like to speak about why so many customers are choosing Infinity. They are choosing Infinity because they want to reduce the risk that they take when implementing a digital transformation strategy. It's obvious that we are embedding 25 years of experience and knowledge in Infinity. We are also helping them to reduce the time to value, and that is super important in a competitive world. This is something that they really appreciate. Of course, with a reduced cost, I could say, and with a platform that has built-in flexibility, and that is based on standard components, and that provides continuous innovation, because let's remember that 20% of all the Temenos revenues are invested in research and development. Infinity is a super innovative solution, and that's the result of the acquisitions that we have made, but also all the tremendous effort in terms of product roadmap and engineering. Let me finally position Temenos Infinity in the context of other players in the market. We truly believe that this is a unique solution. It's a unique solution because it's front to back. It includes a super robust architecture based on distribution services, on microservices. It crosses all banking sub verticals, and this is super important, is retail banking, business banking, corporate banking, wealth management. It's proven, and it's super robust. Let's think in, for example, onboarding, and that is a critical business process. Finally, the extensive network of partners. This is important because we have partners that complete our solution, extend the capabilities that we have, and the best example is Salesforce. We are building this new solution called Temenos Infinity Digital for Salesforce that will be transforming the way how hundreds of financial institutions engage with their customers and will help us to accelerate our growth in SaaS. Thank you very much for attending to this session, and I hope you have enjoyed. Thanks a lot. Thanks, Joaquin. We're going to take a short program break now, and we'll be back again in 15 minutes. Welcome back to Temenos' 2021 Capital Markets Day. Our next presentation will cover how we meet the needs of large banks, and I'll hand over to Phil Barnett, our President of Strategic Growth. Thanks, Adam. My name is Philip Barnett, and I'm responsible for driving strategic growth at Temenos, which is essentially designed to accelerate our execution. I'd like to take a few minutes to outline how we're leveraging these initiatives to meet the needs of larger banks, and in particular, how that's enabling them to execute on their essential transformation journeys. We're all aware of the challenges that banks are facing: increased customer expectations coupled with nimble, innovative, and often aggressive competition, and of course, the ever-increasing regulatory oversight and compliance demands. Trying to address these challenges with legacy solutions, infrastructure, and technology is an issue, but for large banks, they have the added issue of scale. Temenos has developed a number of viable solutions to address these challenges. When coupled with the ability to support the modernization journey in a low-risk manner, we believe that these banks will now accelerate their initiatives. Banks are really looking at three main strategies to deal with these industry pressures, often combining them. Collaboration can give some benefits. Banks build out their own API capability, if that's possible, and integrate their value-added partners. However, this does not in itself address the fundamental legacy constraints. Greenfield can deliver fast time to value, the ability to compete and innovate, and it's also possible to use as a platform for subsequent migration. It needs to consider the ability to scale in both functionality terms, but also improve in performance. Renovation starts to address the strategic imperative of core and can also deliver quick business outcomes as you pick off specific pain points or opportunities by leveraging microservices, APIs, and cloud computing. Temenos provides a number of options to support these strategies. Our greenfield approach offers fast, pre-configured, out-of-the-box capabilities, including compliance. It also lays down a platform that can be expanded upon and migrated to over time. There is optionality on the choice of components and marketplace access is also enhanced through open APIs. Continuous renovation allows you to address the most pressing needs or opportunities, but can also form the pillars of an overarching transformation journey. Manufacturing services tackle a specific vertical, such as lending or deposits. Through the use of microservices, they are able to seamlessly integrate and coexist within the existing landscape, bringing minimal disruption, but maximum benefit to both internal and external users. Enterprise services such as pricing offer huge added value, particularly in complex environments, and the ability to combine and bundle products, deliver relationship pricing across the enterprise, but also a centralized product catalog for marketing and distribution. Additional capabilities can address compliance issues such as transparency around fees, revenue leakage, and many more use cases. Distribution services not only uplift capabilities and competitiveness, such as intelligent onboarding, but with our Salesforce announcement, this means that information is now available to the right people at the right time, where and when it matters most. I mentioned APIs and marketplace a few times, and just to highlight some of the benefits of being able to exploit these, Temenos' market-leading value benchmark, which we offer to clients and prospects, has shown that strong API capabilities can significantly support higher customer growth. Additionally, access to a well-curated and innovative marketplace through APIs can reduce customer attrition very significantly. Clearly, we have the capabilities to support the strategies. Now we have combined them with added components such as Salesforce, which we've announced, and where we expect we will see huge overlap in our large bank focus. Our strategic partnership with DXC provides us not only with access to some of the largest banks in the world that are running DXC core platforms today and also consuming their services, but by combining capabilities, we're able to significantly de-risk the transformation journey. With options ranging from fully managed services to BPO, as well as the ability to take over the legacy run while focusing on the bank teams on the modernization project, we believe this partnership will be transformative. We see these options as very significant accelerators for banks to feel more confident in executing or finally instigating their modernization plans. Finally, why is Temenos winning, and in particular in these large banks? It's really a combination of capabilities. Industry-leading technology is not something at a moment in time, and we have a consistent track record of investing relentlessly in research and development, which is absolutely critical. Proven broad functionality cannot be underestimated, nor the effort to build it, and Temenos has not just got broad, but very deep coverage in most areas. Compliance and a commitment to maintaining it is essential, and we do this on a truly global basis. Finally, these strategic initiatives, which I mentioned, and our global partner ecosystem, allows us to offer the most flexible and low-risk approaches to renovation. We believe that we are not only able to meet but exceed the needs of these large banks, and thereby further accelerate our own growth. Thank you. Thank you, Phil. Our next presenter is Kanika Hope, Chief Strategy Officer for Temenos, who's going to talk to you about the Temenos Value Benchmark. Hi, I'm Kanika. Last year, I introduced you to the Temenos Value Benchmark program. This year, I want to talk to you about the great momentum we've had in 2020, and also share with you what our clients have to say about participating in this program. This is a strategic program where we, together with our clients, aim to better understand the drivers of banking performance, the benefits of technology, and how well banks are doing compared to their peers and best in class. The banks' data is kept completely confidential, as you would expect in an exercise of this nature, with strong legal terms and conditions. This is a consultative exercise conducted by Temenos professionals with strategy backgrounds. Originally intended as a two-day on-site visit, since COVID-19, we conduct these meetings through a series of Team or Zoom calls over a two-week period. Each banking participant receives a customized report with trends, insights, comparisons, and recommendations. We want to build a long-term relationship with our clients, so we seek to conduct this exercise on a regular basis every other year or so, or at a significant event such as a merger, such as a go-live, or an upgrade. Lastly, this is free of charge, and it's a strategic investment from Temenos to help understand our clients better. As a market-leading provider of mission-critical banking software, we believe we are uniquely positioned to explore the drivers of banking performance. First of all, we are building on an established methodology around the bank's value chain or value lifecycle. How do you go about measuring and optimizing value around the bank's IT investment, building a business case at the start before the project, then at go-live, and then after go-live on an ongoing basis to continually monitor how that investment has contributed to business performance? Secondly, we bring our banking knowledge to the table. With 3,000 banks in our books, 700 core banking, and over 150 Infinity clients, we can really strive to build a world-class program with industrial-strength numbers. Finally, we recognize that data is an asset in the banking industry, and with this program, we seek to walk the talk in providing our clients with real data-driven insights. The Temenos Value Benchmark is structured around the banking value chain comprising eight business domains, six core areas, all the way from product management to sales and relationship management, to operations, risk and compliance, and two supporting areas, reporting and analytics and IT. For each business domain, we collect quantitative metrics as well as qualitative best practices, where we rate how important it is to the bank and how mature they are on that best practice. For example, in product management, we will ask a bank to estimate what their time to market to launch new products is in weeks. We also ask them about their capabilities and whether they are able to create new products very easily through configuration and drag-and-drop facilities. We are delighted to share that we have more than 70 banks in the program that have shared their confidential data with us. This is a truly global benchmark, with banks from 47 countries across all our regions. We span retail, corporate, and private banking. At each bank, we've had great discussions with senior business and IT executives to be able to provide them with valuable insights tailored to the specifics of their business model. We have built a rich repository of over 30,000 data points from which to build insights and trends to share with the TVB community. Let us now hear about what clients get from us when they finish the exercise. Each participant gets a comprehensive, detailed report after the engagement, comparing them with peers. The report has three sections. Firstly, key insights based on the trends and patterns that we observe in the data. Secondly, for each business domain, we compare each bank to average top and bottom quartile on the quantitative metrics, and finally, the same for qualitative metrics. Let me show you an example of each. This is an example of the insights we generate from the data. Here, the Temenos Value Benchmark data is telling us that there are 15 operational KPIs that correlate positively with financial drivers like cost-income ratio and return on equity. For example, those banks that have the most digital sales or the highest number of digitally active customers in our database also happen to have the best CIR or ROE. We will compare each bank to the top quartile and/or average values in our database and highlight where they lead and where they lag. For each quantitative metric, we will compare banks with the average, the top, and bottom quartiles. This is a snapshot of the sort of metrics we use. Similarly, for best practices, where we assess importance and maturity, we compare the bank with top quartile and average. Every qualitative best practice that we discuss during the remote workshops will be presented back and compared with these average and quartile figures. For instance, if the importance a bank gives to a topic is much lower than the benchmark average, it may mean that they are not focusing on something that their peers think is important, and that's a pause for thought. Now let us hear on what clients have to say about the exercise. Our participants enjoy the exercise and tell us that the insights help them in making key business decisions. Here's an example from ANSA Merchant Bank in the Caribbean. Gregory Hill, their CEO, has a vision to expand and grow internationally. He rightly recognizes the need for a reliable and stable technology platform that can integrate with systems in local markets which they choose to enter. From a CEO's perspective, he's looking at return on equity and growing shareholder value. As ANSA expands, with every acquisition and new product launch, Greg needs metrics to understand the cost of customer acquisition, speed to market, customer growth, and operating efficiency. The TVB provided him with all of these and where ANSA leads and lags. Dan Dickinson, on the other hand, is a CIO of a digital native bank in Canada, EQ Bank, which is the digital subsidiary of Equitable Bank. He used the benchmark to understand the true cost of IT and how to leverage his investment to grow rapidly and profitably from a small base as Canada's first digital challenger. He understood from the benchmark that the initial IT investments that EQ had made as a startup were high compared to peers, but would become comparable and competitive as the bank scaled its business. Now I'd like you to hear directly from our clients, Thomas Fehr of Julius Baer, and Azfar Karimuddin from Canadian Western Bank. I had three reasons. This worked. The first one is, it's comparing apples with apples. It's with other banks. It's with other banks who also run the same software. The second one is, it has a very operational, concrete focus. It's not just how we use, it's really giving you very detailed stuff. Sorry for saying also is, it's building our relationship with Temenos, and of course, it's for free. Sorry for saying. These three areas, it's honest, is the reasons why it was easy to onboard and get the buy-in of the people. If we do this over years, it will give us great insight compared to all the other benchmarks we tried. Those results helped us identify what are the areas that we wanted to concentrate in. What are the areas that we were good at? We were really skeptical about certain areas that, are we doing enough in data? Are we doing enough in digital? The benchmark helped tell us, Hey, you might be concentrating way too much here. You might want to spend some of your money here. Are you spending enough money as a whole? Are you spending too much? These are all questions that are really relevant to us as leaders of organizations, as well as our executive committee and our board members who are trying to make sure that we're investing in the right places. Thank you for watching. Now I would like to pass on to Kalliopi. Thank you, Kanika. Good afternoon to all, and welcome to the Temenos Capital Markets Day. I'm Kalliopi, and as Max mentioned earlier, I'm going to talk about the Environmental, Social, and Governance strategy of Temenos. CSR sustainability, or ESG, has been gaining great prominence the past years. COVID-19 has accelerated that trend. ESG is transforming business. Nowadays, there's a stress for a more equal, fair, sustainable way of doing business that values purpose alongside profit. Corporate leaders around the globe are quantifying ESG impact and incorporating it into their missions, cultures, and strategies. At Temenos, our goal has been to grow our business in a way that takes care of the world around us, delivering value to anyone associated with us. For 27 years, we have been operating with responsibility and integrity. Our sustainable business model has been delivering long-term value to all our stakeholders, and we're very proud of this. We're committed to all our stakeholders to build long-term sustainable relationships with them, to manage our operations in a responsible, secure, and sustainable way, to help our clients transform into smart, sustainable organizations, to contribute to the global efforts to address social and environmental issues. At the end of the day, to achieve both financial and non-financial value for our stakeholders. For 27 years, these commitments have guided the way we operate internally, the way we innovate, and the way we deliver on our business mission. We have focused on five directions. How to achieve business excellence, how to operate responsibly, how to invest in our people as well as in our communities, and how to provide access to financial services to those who lack access to capital. In order to achieve our goals, we work with our stakeholders to identify the significant economic, environmental, and social impact on Temenos and better understand their needs and expectations. This informs our decision-making, strengthens our relationships with them, helps us deliver our commitments, and ultimately succeed as a business. Engaging with our stakeholders is helping us define our focus areas. For the environment direction, we focus on two priorities, environmental management and awareness, climate change, and carbon neutrality. On the social side, poverty alleviation and financial inclusion, digital inclusion and innovation, diversity, equity, and inclusion, employee volunteering, and community service. On the governance side, ethical business conduct and governance, inclusive and responsible procurement, information security, privacy, and business continuity. We have incorporated these priority areas into our corporate strategy and have been documenting our progress in the Temenos annual report. As I mentioned before, we are committed to contributing to the global effort to address social, and economic, and environmental issues. Financial technology and digital finance can advance sustainable development and accelerate the achievement of global environmental and social issues and goals. We innovate with purpose, and our products have a positive environmental and social impact. In that way, we are contributing to the global effort to achieve the United Nations Sustainable Development Goals by helping alleviate poverty, safeguard peace, deliver education, and mitigate climate change. We are committed to accountability and transparency. Temenos has been reporting its non-financial performance, along with its financial performance in the Temenos annual report. We report in accordance with Global Reporting Initiative, GRI, which is the most globally adopted set of sustainability standards. We also map GRI with the UN Global Compact, and we're also mapping our contribution of our operations to the UN SDGs. Of course, we have our sustainability report externally verified. As you might already know, there is a strong global movement for harmonization of sustainability standards since there are many different voluntary sustainability reporting frameworks. At Temenos, we are following closely all the developments. Until we end up with one single set of standards, we decided to start reporting in accordance with SASB, in addition to GRI, and map SASB with GRI Standards. Since we also understand the importance, the significance, I would say, of climate change, we will start adopting the TCFD recommendations into our reporting. We will also start mapping the contribution of our product offering to the UN SDGs. We are very happy to see that the markets are recognizing our ESG efforts and actions. We are among the 25 Swiss stocks from the SMI Expanded I ndex with the best sustainability scores. In 2020, we again ranked in the top 1% of the software and services category in the Dow Jones Sustainability Index World. We were also one of the only two companies listed in the Europe Index for the first time. We had the best industry score for information security, privacy, business continuity, environmental management and reporting, social reporting, human rights, and corporate citizenship. We were also included in the FTSE4Good Index and received a prime ESG rating by IBS, among other recognitions you will see on my slide. Concluding, let me say that at Temenos, we will keep on doing what we know best the right way, not just the easy way. Thank you for your time and attention. Adam, back to you. Thanks, Kalliopi. For our final session of the day, I'm going to hand over to Takis Spiliopoulos, CFO, to talk about our financial growth plan. Hello, everyone around the world. My name is Takis Spiliopoulos. I am the CFO of Temenos, and I'm going to present you the financial growth plan. You heard from Max and the team about our strategy, our product investments, our go-to-market approach, and how we create value for the clients. In my section, I will outline the key elements of our financial growth plan and how we are going to deliver on our ambitious targets for 2025 as we aim to achieve at least $1 billion of bookings, expand our EBIT margin to at least 41%, and generate more than $600 million of free cash flow, all this by 2025, and to transform our vision into reality, moving from category killer to the industry standard of banking software. Now, on the next slide, I'm going to demonstrate the strong resilience of our business model. Temenos has successfully navigated some of the worst global crises in the past, every time it emerged stronger. This was the case with the global financial crisis, it was the case with the sovereign debt crisis, and it will be again following the COVID-19 pandemic. We will move forward decisively. Our innovation-focused strategy will continue to drive our resilient business model also in the future. It is worth taking a step back to demonstrate why Temenos has such a successful and resilient business model, which delivered strong returns across all financial KPIs. We only focus on banking, and we are domain experts in banking. Banking is all we do. We have the leading functionality, the best localization expertise, and the most advanced single technology architecture, leveraging 20 years of investment. We sell packaged software on a single code base for all banks, giving clients confidence and driving cost efficiencies. We are relentlessly focused on innovation with the highest R&D in the industry, and we don't have boom and bust cycles in product investment. We have a global distribution in place, a global single sales organization selling across on-premise and SaaS. We maintain high win ratios and continue to gain market share across both on-premise and SaaS. We have a high client retention resulting in minimal attrition, which drives strong growth across our recurring revenues, i.e., maintenance and SaaS. Finally, we are able to successfully scale through our global partner model, which helps releasing cash through lower DSOs. Now, this means we are truly the leader in our market. Moving now to the next slide, which shows our business model has driven strong growth in total software licensing and total revenue over the last seven years. Following the reset in 2020, we start 2021 with a strong pipeline and a market that is bouncing back. We are very confident on our growth trajectory for total software licensing revenue growth at 14%-18%, and which will also drive revenue growth of 8%-10% in 2021. We have also provided the comparable like-for-like growth numbers, which clearly demonstrate that there is no slowdown in our growth forecast. On the next slide, however, I'd like to emphasize that we are now benefiting from two strong building blocks for total software licensing. I will talk in a moment about our on-premise strength, but here I'd like to show the significant acceleration we have seen in SaaS and cloud, which has been building over several years with a step change in the second half of 2020. Given the tremendous growth in pipeline, we will continue to see excellent demand and are forecasting our SaaS ACV to grow 40%-50% in 2021. The strong SaaS ACV performance in H2 2020 is now flowing through the SaaS revenue line, which we see grow 30% in 2021. Both growth forecasts are on a purely organic basis and without the impact from any M&A. On the next slide, you can see that our business model has also delivered strong growth in profit and an expansion in our EBIT margin. This was driven by strong operational leverage built into our business model, but you will also appreciate that there was also an impact from M&A. I have highlighted before the key ingredients for this. One single code base selling only packaged software, one global sales force selling both across on-premise and SaaS, highly efficient R&D spend, leveraging the massive investment in R&D, and leveraging G&A. Over time, this drives margin expansion and will continue to do so in the future. We have been continuously investing into our SaaS and cloud capabilities for the last decade and also continue to invest in 2020 despite the temporary headwinds we have faced in our on-premise business. You see in the appendix the reconciliation of our new and old definition of EBIT. Excluding the impact of IFRS 2 costs, you can see that we will expand our margin by 120 basis points from 2020 to 21 to 37.2%. As we have repeatedly said, we see no need for a catch-up in investment, and we are very confident that we are now back on the EBIT and margin expansion path from 2021 onwards, even with a higher share of SaaS revenues in the mix. On the next slide, we see the strong cash generation profile of our business model. We have increased operating cash at a 12% CAGR to 2020 with sustained cash conversion of at least 100%, with the average over last year's amounting to 115%. Growth in recurring revenues and good cash collection were some of the drivers, but also the success of our partner model, as I have mentioned before. We have benefited, in particular, from working with partners, having them provide the bulk of services. Packaged software and standard implementation methodologies are two ways which have led to decreasing implementation time frames. Finally, we have been able to improve payment terms, which has also been providing tailwind for cash generation. Overall, we were able to deliver an average DSO decline of nine days per annum since 2015, and we expect to be at around 105 days or below by end of this year. On the next slide, I will talk about our disciplined approach to capital allocation. We have a strong free cash flow generation profile, of which I will talk more about later. When looking at investment options providing a high return on investment, investing in Temenos is the benchmark for any acquisition or any other investment decision, and this has created a lot of value in the past. We do regular share buybacks to manage our balance sheet and are launching a new $200 million share buyback program tomorrow. Given our strong cash generation, we would expect to end 2021 with a leverage ratio comparable to the one we have today. We have also steadily increased the dividend. We are proposing $0.90 per share for 2020, which is 6% up year-on-year. We remain with plenty of financing available. What did Temenos get for the $1.2 billion we spent since 2015 on M&A? Looking at the next slide, we show the track record of our successful bolt-on M&A. Aligned with our strategy, we are using M&A to accelerate organic growth and/or accelerate the evolution of our R&D pipeline. The acquisitions since 2015 have contributed about 15%-20% of our EBIT on a cumulative basis. This is a number which does not include the strategic value and the revenue synergies generated on top of this. This clearly demonstrates our value-accretive-based approach to M&A. These acquisitions brought us scale in the U.S. and in Australia. We obtained cloud operations excellence through Kony and Avoka, and we acquired big data capabilities through hTrunk and gained tremendously valuable AI expertise across all products through the acquisition of Logical Glue. We will remain very disciplined in our approach to M&A, both from a strategic but also from a financial point of view. Let me talk about the drivers of growth. First, we're going to look at the market and then what it means for Temenos. On the next slide, it is worth taking a step back as we show one of the core elements and why the on-premise market will continue to grow for the very long term. The chart shows the penetration of third-party enterprise application software across various sectors, with industrial goods and energy showing already a very high penetration. It also shows that banking is one of the most under-penetrated market for third-party software, and research suggests that for both core banking but also for digital, the penetration is probably around 30%. The number has moved up over the last years and will continue to do so over the next years as well. You have heard from Max and the team about all the compelling drivers for banks to change. This will continue. Banks do need to change. Banks do not have a choice. This is why the on-premise market for banking software, both core and digital, will continue to grow at a very healthy rate. Moving to the next slide, let's look at some market data. On the left, you can see the total addressable market, which is estimated at $63 billion, of which $17 billion is spent with third parties today. This is up from $14 billion, which we estimated last year. Is driven by investments made mainly in Transact, Infinity, AI, microservices, but also across the rest of all our products. Again, demonstrating the effectiveness of our R&D pipeline. As we have communicated, we did not cut R&D investment during the pandemic. Rather, we don't believe in boom and bust cycles in R&D, but rather in a consistent, innovation-driven approach. We continue to push ahead with a product and technology roadmap to come out stronger. This $17 billion market is forecast to grow at around 8% CAGR and reach $26 billion by 2025, which is an acceleration from the last 7% we presented last year. Industry research expects the on-premise market to grow at 6% CAGR and the SaaS market to grow at 25% CAGR to 2025. We forecast to substantially outgrow the market in both segments in the future, therefore continuing to take market share as we have already done in the past. I will talk about our growth projects in a moment. Moving now to the next slide, let me focus on SaaS for a minute. We have seen strong demand coming from challenger and digital banks and new entrants, but also from some lower-tier and small banks, which are all driving this massive growth in SaaS spend. The on-premise spend will also continue to grow at a very healthy rate of 6% CAGR. This growth will be driven by large and some mid-tier banks, which will stay on the license model. We have heard from various speakers about our many product innovations, with many of them geared towards tier 1 and tier 2 banks. These banks will drive our license and maintenance growth for the next five years and beyond, providing a strong built-in component of profitability improvement. You also appreciate that the SaaS growth forecast shown here is not reflecting the full growth of the SaaS market, as it only captures one year worth of SaaS revenues. This is why we show very strong ACV growth, which will over time generate SaaS revenues. Moving now to the next slide. Tier 1 and tier 2 banks control around 60% of the global spend. On average, they've contributed around 45% of our total software licensing over the last seven years. We did see a temporary slowdown in the first half of 2020 in this segment, as larger banks struggled more with business continuity versus smaller banks, and therefore delayed some of the spending decisions. This has already started to revert, and in Q4 2020, they contributed again 40% of total software licensing. We consider this as a strong message. Based on our strong pipeline, we expect tier 1 and tier 2 banks to contribute on average 40%-50% of total software licensing over the next five years. On the next slide, let's look at North America, and in particular the U.S., which remains a highly important market for us. It is the largest market globally, with nearly 40% of the global spend and a huge number of financial institutions across all tiers. The U.S. has also seen a wave of innovation with challenger bank and new entrants. The U.S. was our largest contributor to revenue in 2020. We also saw a strong take-up in our SaaS ACV business, and in particular in Q3 2020, where we had some larger deal wins for Transact on SaaS. We will keep investing in our sales teams and our U.S. SaaS offerings in particular, as the U.S. is the largest contributor to our global SaaS pipeline. Driven by both SaaS and on-premise, we expect North America to contribute 40%-45% of our total software licensing revenue by 2025, up from 28% in 2020. On the next slide, I'm addressing a topic which has gained a lot of interest since our Q3 2020 results. In terms of SaaS growth, this will largely be incremental to our business, with very limited cannibalization. Given our thorough analysis and in-depth customer relationships, we believe we have very good visibility on potential future cannibalization. Moreover, any potential cannibalization we would expect to come from smaller and lower tier banks. Based on our pipeline and visibility, we expect the percentage of cannibalization to reach not more than 10%-15% of our license growth number by 2025. It is worth remembering the sustained strong growth in on-premise licenses over the forecast period. We acknowledge that Q3 2020 was an outlier in this respect, where two larger deals with FinTechs moved from license to SaaS, which clearly skewed the picture on a quarterly basis. However, we also know that we have a very limited number of FinTech deals on a license model. We also illustrate what this means for our total software licensing growth projection, a key element of our guidance and midterm target. So far, we have been guiding for total software licensing to grow at least 15%, with more than 12% being contributed by licenses and the rest from SaaS. Looking at the right chart, we can see the composition of our future total software licensing target of 15%-20%, with the midpoint at 17.5%. We expect to maintain license growth of at least 12% for the next five years. This is two times the market growth of 6%, and in line with our previous commentary of growing at double the pace of the market by taking market share. We expect cannibalization to be a headwind of 1%-1.5% of license growth, thus reducing license growth to at least 10.5%. Through the acceleration of SaaS, we expect to gain 7.5% and therefore to reach 17.5%+ of total software licensing growth, CAGR 2020 to 2025. This will be an acceleration versus the 15%+, and driven by SaaS growth, and including the limited cannibalization headwind. On the next slide, we show an illustrative example of the SaaS economics, or what is called the conversion multiplier. We are showing a theoretical example here, comparing a 10-year license and maintenance contract with a SaaS contract of the same duration. We have done it on a gross profit margin basis to make the two profit streams comparable, and we have also done it on an NPV basis to account for the discounting of future profit streams. You can clearly see that the SaaS revenue is incremental to the business over time, and generating a 60% higher NPV or lifetime value. We are also targeting a break-even at around three years, given the continued margin improvement of our SaaS business, though we are currently a bit higher than that. This example assumes that SaaS ACV stays constant, while in fact, we often see growth in ACV as clients consume more of the service as their business grows, and more functionality over time enables upselling of additional services. On the next slide, we are introducing two new KPIs to help you monitor the progress we are making. We are giving a target for total bookings, which includes the fair value of license, committed maintenance, and SaaS. This will give an indication of the total new business generated and how this is growing and should make the acceleration of our business through SaaS visible. We will also guide and report on annual recurring revenues, ARR, which we consider best practice to demonstrate the growth trajectory of our recurring revenue streams. ARR is defined as all committed revenue across SaaS and maintenance and will include new customers, cross and upsell, and any attrition. On the next slide, we are showing our updated and revised guidance for the next five years on a 2020 to 2025 coverage basis. For total software licensing growth, we are targeting 15%-20% up from at least 15% before. Our targeted total revenue growth over the same period remains unchanged at 10%-15% coverage. We also aim to reach an EBIT margin of around 41% by 2025. This compares with our previous midterm target of 36% communicated last year or 39%+ if adjusted for IFRS 2 costs, which are now excluded from our EBIT margin guidance. To demonstrate the strong momentum in our business and to show the acceleration through SaaS, we are also introducing a target of growing total bookings of at least 17%-22% coverage, about two percentage points higher than our total software license growth target. Very strong SaaS growth and the re-acceleration of our maintenance growth should drive our recurring revenue, and so we are targeting at least 15% growth in annual recurring revenue or ARR. The beauty of our business model is the strong, resilient, and growing cash generation. We may not get the exact growth rates of on-premise and SaaS business correct by 2025. However, 2020 has shown that we are able to deliver strong cash generation even with negative license and revenue growth. We are therefore convinced that giving a firm free cash flow target of at least $600 million by 2025 should be seen as a testimony of our confidence in the excellent growth potential of our business model. This corresponds to at least 15% free cash flow growth on a coverage basis. Finally, we see the tax rate for 2022 to 2025 in a bracket of 18%-20%, and we expect DSOs to reach approximately 85 days by 2025. The next slide provides our envisioned EBIT margin trajectory from 2020 to 2025. As we have already guided, we expect 2021 to see an EBIT margin improvement of 120 basis points to 37.2%. This is driven by our growth in total software licensing, maintenance growth, and the locked-in savings from last year's cost actions. For the years 2022 and 2023, we forecast a margin expansion of 70-100 basis points as we have all variable costs reaching pre-COVID levels. With SaaS gross margin optimized, we return to our historic 100-150 basis point margin increase per annum from 2024 onwards. Looking at the next slide, we are exiting 2020 with our SaaS business at an overall gross margin of 57%. This includes the Kony non-banking business and all the legacy SaaS products, including some from Rubik, which we are sunsetting this year. Excluding these legacy products, our 2020 SaaS gross margin exit run rate was 65% on our Temenos Core products, including Temenos Infinity, Temenos Transact, Temenos Payments, AI, and FCM. From this base of 65%, we expect to drive efficiency gains as we grow our SaaS revenues. We will improve the margin on cloud provider costs by around 3%-4%. Further advances in the automation of our operations that Colin described earlier will drive another 4%-5% of gains. Finally, scaling of operations, or simply put, driving more revenues through our SaaS and cloud operations cost base will give us another 4%-6% of gross margin improvement. Putting it all together, we expect our SaaS gross margin to reach 75%-80% by 2025. It is also worth noting that the strong gross margin improvement from 2019 to 2020 clearly demonstrates our successful track record in this area. On the next slide, we talk about the drivers of our EBIT margin evolution until 2025. Our on-premise and service gross margins are expected to remain constant over the medium term. While our SaaS gross margin will expand to 75%-80% by 2025, as I have demonstrated on the previous slide. We will continue leveraging our R&D and G&A. Let me make a very important point here. We are an R&D and innovation-led business, and we will continue to grow our R&D spend. Leveraging R&D simply means that we will just grow slower than revenues. We also plan to continue investing in sales and marketing to further strengthen our existing global distribution capabilities and capture the vast market opportunity. Overall, this will drive group margins to around 41% by 2025. On the next slide, I will provide some help for modeling purposes. This is not seen as firm guidance, but should help the investor community reconcile our group EBIT margin target with the evolution of the individual cost lines. As explained before, R&D as a percentage of revenues should decline from about 22% in 2020 to below 18% by 2025, with G&A moving from 7%- 5%. We will also see sales and marketing increasing from 20% to more than 22% by 2025. Let me now present the bridges on some of our cash and balance sheet metrics. We have already demonstrated our strong cash generation profile and therefore feel confident that we can more than double our free cash flow to at least $600 million by 2025, independent of the exact mix between licenses and SaaS. The main drivers remain unchanged, as proven from past performance. Most important will be the profitability increase, followed by the growth of deferred revenues, which reflects attraction of our recurring business, and finally, cash generated by a continued reduction in DSOs, offset by some reduction in DPOs. We forecast a continued reduction in our DSOs with the same drivers as in the past. We will continue to improve our payment terms in license deals. Plus, the increasing proportion of SaaS revenues, which have very low DSOs, continue to support the trend. Finally, we will continue to improve our services DSOs across all regions, with more projects built on a time and material basis and more business outsourced to partners. On the next slide, we show how the SaaS growth has, over time, contributed more to our total software licensing figure, reaching 27% in 2020, and is forecast to increase to about 50% by 2025. Last year, we had estimated the share of our SaaS revenue to reach about 35%-40% in the midterm, so we have now reflected the SaaS acceleration we have been witnessing in the last couple of months. Please also note, by 2025, the gross margins of the two revenue lines would be converging. We have also provided a sensitivity analysis for cases of slower or faster license growth, or vice versa for SaaS growth, respectively, while keeping the resulting total software licensing growth unchanged. You can see that the 2025 expected EBIT margin is relatively insensitive to the mix of SaaS and licensing 2025, given that we will have optimized the SaaS margins by this point. To give some granularity in the case of the faster SaaS growth scenario, only years between 2022 to 2024 would see a low impact on profitability, which will be almost entirely compensated by 2025. Lastly, we will continue with our three-pronged approach to opportunistically execute M&A to drive organic growth. We aim to accelerate our R&D roadmap in key markets and segments, and also increase our scale in key markets. We also want to acquire complementary products that give us access to adjacent markets. We have proven that M&A has delivered value, and we will continue with this strategy also in the future. Thank you for your time, and now I hand back to Adam. Thanks, Takis. That was the last session for the day. We're now going to take a short break before coming back for Q&A. As a reminder, you can submit questions through the box on the bottom of your screen. I look forward to seeing you shortly. Welcome back, everyone. Thank you very much for returning for our Q&A. As a reminder, you can submit questions at any time on the bottom of your computer screen. Our first question is addressed to Max Chuard from Axel Hotz at Crossinvest. Max, given that the COVID-19 pandemic has accelerated demand for digital transformation of banks, when do you see the inflection point in terms of new bookings coming through, even in H1? Or is it more H2 2021? And from a regional perspective, where do you see already a pickup of activity, and how do you see Europe specifically in this context? Hi, Axel. Thanks for the question. Listen, regarding the seasonality, I do expect to have a strong start to the year, as I mentioned already yesterday, so I expect a strong Q1. Obviously, the environment has been improving from Q3 to Q4, and I expect this to be the case towards 2021. Obviously, I expect growth in the first half of the year, but with an acceleration towards the second part of the year. Now, from a geography point of view, clearly, Europe came back strongly in Q4, as we had discussed. In 2020, that was the region that was the most impacted, but I was very pleased with the strong rebound in Q4. I expect this to continue towards 2021. I expect as well the U.S. to continue to perform very strongly as we've seen in 2020. As we discussed, the U.S. is where we see most of the traction from our SaaS business, on the license as well, but clearly on the SaaS even more. I will continue to expect a very strong ACV performance from the U.S. in 2021. I expect as well to see the Middle East and Africa to continue the good momentum as we've seen in 2020, and I expect Asia to recover in 2021. Again, from a seasonality point of view, I expect an acceleration throughout the second half. However, a strong start still to the year. Thank you. Great. Thanks, Max. Next, I've got a couple questions here for Takis. They're slightly overlapping. The first one from Knut Woller at Baader Bank. What is your current profitability in SaaS versus on-premise, and how should it develop until 2025? That leads into a second question from Laurent Daure at Kepler Cheuvreux. Could you talk about how you will manage costs between SaaS revenue and gross margin? Talk quickly about the key drivers for hitting your $1 billion of bookings by 2025. Okay. Hi, Knut. Thanks for the question. Let me address first the question about the margin. Clearly, as I mentioned, we expect the SaaS gross margin to eventually converge with the gross margin of our licensed business. Over the next five years, we don't expect any change to our gross margin of the licensed business. This will be an incremental path going there. As you've seen, we've already had a good development over the last year. If we exclude the non-core products, we're already at a good exit run rate. I think this will be the path we're going to continue. On the individual elements, as Colin has also highlighted, clearly one part is with the hyperscalers. We think we can get quite a bit better deals with them. That will definitely lead to gross margin improvement. The automation, which Colin talked about, there is still a lot of potential to go. Then finally, you run basically more revenue through your cost base, so that's classic operation leverage we should also improve. What are the drivers? I think Max mentioned a lot of them, and clearly it's a structural growth market and it's going to remain like that. We see the market growing at 6% for licensed, 25% for SaaS. Potentially, there is clearly some acceleration in the SaaS market possible on that where we will benefit. Clearly also you have the mix, which we indicated to be around 50% also providing good SaaS growth. Ultimately, and Max has also highlighted North America, where we have seen over the past years a strong traction. We have built very good pipeline, especially across Transact and Infinity. We have seen a lot of success already this year. I think this will continue. In terms of total software licensing, there will be clearly North America outgrowing the group. I think finally, Tier 1 and Tier 2s, as we mentioned at a couple of occasions, we're going to maintain the same split as we have in the past, which basically tells you they're going to be driving a lot of growth going forward. I think we're very confident the way Q4 ended, the way 2021 shapes up. As Max mentioned, the larger banks are back, and they will have to do something. This is also on top going to remain one of the major drivers. Ultimately, we definitely have the ambition to continue to take market share. Great. Thanks, Takis. Takis, actually one more for you then just to follow up on that from Franz Weis at Comgest. Growth achieved in the past included M&A. The growth projections that we've laid out today, do they include M&A or are they purely organic? No, they are clearly purely organic, as I mentioned. Whether it's total software licensing or total revenues or any of the other targets, so that's on a purely organic basis. Great. Thanks, Takis. Next question is for Mark Winterburn, our Chief Product and Technology Officer. This comes from Felix Remmers at zCapital. Felix has a couple questions on microservices. Firstly, is the Temenos software already fully broken up into microservices or are still investments needed? Will this trend mean that we won't see large one-time deals anymore as clients just buy microservices piece by piece? Then the third part, are microservices the breakthrough innovation for big banks to finally replace old core systems more aggressively? Thank you for that. Thank you for the question. Thank you, Felix. Nice for a product to get a question in these sessions. Going through your points. Firstly, is it done? No, it's not. We've been invested in this space some time ago through componentization and then into microservices. We refined it as we've got manufacturing or distribution or enterprise microservices. There's still work to be done. We're still invested in that space. My view is, as in most things in software, it's not done, right? We'll work with buy-in, and we'll refine it or maybe the granularity will change, right? We've made great progress. We're very pleased with it, but there's more to do. Does it mean we've sort of seen the end of the big license, the big deal? No, it doesn't. I think there is no one bank, there's no one customer. As Alexa talked about, and the way that banks want to implement, there's always nuance to it. There'll be greenfields, still into smaller banks, even a big bang, and then some other banks will take a microservice and add to it. I think we're going to see a continuation of what we see now, which is banks making choices that suit them where they are either with their legacy software or where they are in their growth trajectory. I don't see that changing. As I said in my pitch, with microservices, it just gives choice. It gives you the ability to cut it one way or another. If you're seeing leakage, then you get the chance to put, I don't know, some kind of our Enterprise Pricing offer, and you can deal with that in front of your legacy solutions and then move forward piece by piece. I don't think it's the end of anything. I think it just gives banks more choice, which is ultimately what they're after. Your final point about, is it a breakthrough change? On its own, I don't believe it is. I think as we showed earlier, there's just a history of innovation in software and in banking. It's another one in that journey. It adds to the reasons banks should or could do some part of a core transformation. There's hundreds of other reasons, frankly, that we've been talking about throughout the day. I think we'll continue to see all varieties of deals. I think microservices will play their part in that. We're at the forefront of that. It'll help, but it's not the be all and end all. There's plenty of other things about change that are good. Great. Thanks very much, Mark. Next question is for Colin Jarrett, our Chief Cloud Officer. This one's from Chandra Sriraman from Stifel. Colin, could you just talk a little bit about the investments that we're making in the SaaS and cloud business to address the growth that we're seeing? Sure, Adam. Thanks for the question, Chandra. Currently we've grown our SaaS business to around 500 people that support SaaS, including a few hundred in our operations, but also looking at our SaaS engineering, our SaaS technology, and our support functions. In terms of where we see the investment going, it's investment really that's directed towards driving efficiency, scalability and customer satisfaction. So in the efficiency and scalability, that's where we are investing heavily in building out the platform, and specifically in terms of the automation around driving hands-free, zero touch networks, fully automated deployments, et cetera. Really taking manual effort out of that process in order to, say, drive the bottom line, drive the efficiency, but also reduce the opportunity for any errors, et cetera. On top of that, we're also investing in building out the customer support network to better service our customers full 24-by-7, follow the sun model, and investment in our service delivery managers and our service delivery capability. I think it's around automation, it's around customer satisfaction, it's around driving efficiency, scalability, and improved customer satisfaction overall. Hopefully that answers the question. Great. Thanks very much, Colin. Our next question is from Stacy Pollard at JPMorgan. This one's for Alexa. To consider yourself successful in the U.S., do you need to cross-sell Transact into the existing installed base? I think Stacy's referring to our Infinity installed base. Or is an Infinity and front office product enough? The second part of the question is around how do we position Transact in the U.S. market given the embedded competition that we have there? Hi, thanks for the question. It's not really a cross-sell play, I have to say, in the U.S. I've been there now for about a year and seeing that. We have very good opportunities both for Transact and Infinity on their own. There are a couple of cases of cross-sell. That hasn't been the biggest, I would have to say, opportunities. We've continued our inroad with digital banks. I think from the success we've seen globally, the U.S. have been particularly keen on that. We have had a very strong positioning there with vendors, with banks and startups who really are interested in a new approach and are not looking so much as the legacy vendors that are at play. That's been a very good traction. We have continued to see good traction on our tier 1, tier 2. We've had a tier 1 going live just earlier this year. This is also something that we're seeing a lot in terms of tractions. As I said, the two are really independently giving us a lot of traction. Max mentioned it, and Takis as well. In terms of SaaS, we've seen a huge acceleration. On its own, the SaaS really driven the region definitely this year. Obviously, we still have our on-prem business going, but clearly we're seeing that more and more in that market, the plays around SaaS. Lots of drivers for us to grow. Occasional cross-sell, but overall really digital tier 1, tier 2, as well as our own Transact and Infinity business. Great. Thanks very much, Alexa. Next question is from Hannes Leitner at UBS. Hannes, you'd addressed this to Mark Winterburn, but actually I'm going to pass it on to Prema because I think she's best positioned to talk about it given the focus on AI. The question from Hannes is: through the hTrunk acquisition you gained industry-leading AI functionality. Could you give us some KPIs and talk about the adoption of customers? Are they willing to pay for it? Absolutely. Yeah. I'll just remind that there were two acquisitions in this space. One is hTrunk and the other is Logical Glue. hTrunk gave us the capability and a solid platform to underpin our data architecture, and Logical Glue gave us the Explainable AI platform. The good thing about the Logical Glue acquisition was that it was a completely SaaS-only platform to begin with. Yes, clients are willing to pay for it because they have started realizing the value that they get out of their own data plus the prepackaged banking AI models that we build and supply as part of our platform. Each one has got its own value whether it is a customer attrition model or a next best product or a transaction classification or cash flow analysis for SME. There are plenty of clients who have started to use the models as the accelerator and then deploy that into production. The other question was about the platforms and how well we have embedded these capabilities. We have actually completed that vision that we started with hTrunk and the Logical Glue acquisition, which is to make AI and machine learning capabilities part of our platform. Whether it's a digital banking platform or financial crime platform or core banking platform, these capabilities are very much at the heart of it. We are able to leverage and build more verticalized banking models on top of it. There are about 15 AI models that we have published and delivered. Thank you. Great. Thanks very much, Prema. Our next question is from Toby Ogg at Bank of America Merrill Lynch. I think this is one for Takis and maybe Phil will jump in as well. Based on your assumptions that North America should be 40%-45% of total software licensing in 2025, what are you assuming for software licensing growth in North America through to 2025 within that? What gives you confidence in your ability to achieve this growth rate given entrenched core banking competition? Thanks, Toby, for the question. The first part, I think if you look at the track record in the past on the U.S., we have already a very good growth trajectory. If you take the midpoint of the guidance we provided for total software licensing on a CAGR basis, and clearly the U.S. growing stronger, I think you can come up with a number yourself there. I think we don't see anything in terms of a hockey stick. I think the growth will continue also strongly in 2021, and then also the outer years. In terms of why we're confident and then I'm going to pass to Phil. First of all, and Alexa has mentioned it, we built already a good pipeline there with Transact deals which we have won throughout this year. As Max mentioned earlier in the presentation, we had a Transact customer, a tier 1 Transact customer going live just a few weeks ago. This is clearly providing us with reference cases, and there should be more coming. The second one is clearly we have been building also the sales force in U.S. across our two main products, as Alexa mentioned. Pipeline building has started. We're already reaping the benefits, and there should be more to come. There are the two initiatives, clearly for Infinity and Salesforce. I think especially for the tier 1 market with DXC, I think this opportunity could be huge. Maybe Phil, you can add some. Sure. Thanks, Takis. Just to pick up on the point, I think that really what we've seen in the U.S. market has been a fair degree of inertia, particularly with the larger banks, in trying to tackle how they can take on what they know is inevitable, but they're just not sure about how to go about it. I think what we feel is that, as Mark alluded to earlier on, I think with the position we've got the solution at and the optionality we have around that, how to tackle tier 1 banks, whether it's greenfield or whether it's through some combination of progressive renovation starting at enterprise services or distribution services. I think solution-wise, we now have a capability that can help address that inertia. I think the second part that Takis mentioned was we now have a partner that gives us tremendous optionality in terms of how we really start the deployment of that. It gives us optionality around deployment, but it also gives us optionality around how that service can be delivered back to the client. I think the combination of solution and partnership will help remove the inertia. Great. Thanks very much, Phil. Max, next question is for you from Andreas Müller at ZKB. On the market share gains, what areas do you think we can gain market share the most? Please, can you differentiate a little between on-premise and SaaS, also front office and back office product lines? Yes. Sure, Andreas, thanks for the question. Let me start with the on-premise. As you've seen during my presentation, we see a market growing at around 6% on-premise over the medium term, and we've clearly been able, over the years, to grow twice as fast. That's because of all the unique position of Temenos, the fact that we've got the best product, most references, more credible, the best technology, and so on. Clearly, I expect that we will continue to be growing twice as fast as the market on the on-premise. Hence, I would say on the Transact, which is I would say where today still most of our business comes, we will clearly continue to gain market share with Transact. If I look at the SaaS, clearly SaaS today has been a very strong market for Infinity, but we also see Transact coming strongly in the SaaS. SaaS, I've shown that is expected to grow at 25% CAGR, and you can see that we've been growing much faster than that as well. I expect as well on the Infinity, and through some of the initiatives that we've discussed around what is unique around our distributed services and how we can leverage those with partners or without partners to also be gaining market share, I would say, on the Infinity side. I would say two main products where I see most of the traction in the medium term around Transact and Infinity. Obviously, both of those products address the vast majority of the market segment as such. This is where I would see the market share gain. We'll continue to gain market share both on Transact and on Infinity. Great. Thanks very much, Max. Next question is for Takis again from Gautam Pillai at Goldman Sachs. You highlight that the SaaS is gross profit dilutive for the first few years. As SaaS increases in the mix, do you expect gross margins to dip initially before scaling up? Can you confirm if you expect EBIT margins to progressively expand from 2022 to 2025? Yes. Hi, Gautam. Thanks for the question. We have seen on the various presentations, clearly our SaaS business is growing, and it's growing very profitably. We've shown already the good track record from 2019 to 2020. Over the next years, there will be every year an improvement in our SaaS gross margin. That's definitely something we already see today. Now, on the impact of the EBIT margin, and we appreciate the question. However, for this reason, we've chosen to show not just where we end up in 2025 at around 41%, but clearly show the margin expansion story continues. We have 120 basis points for this year. We actually guide for the growth of 12%-14%, which implies 37.2%. Clearly in the first two years, 2022 and 2023, you'll have two impacts. One is the variable costs coming in full back. This year, probably not yet. There is travel increase, clearly, there is hopefully more to come next year. There is still the SaaS gross margin impact still being slightly diluted. Once we're beyond 2023, we're going to be back into our, if you want, historic EBIT margin expansion territory, i.e., 100 to 150 basis points per annum. By then we will definitely have SaaS fully optimized, and then there is also no dilution from any incremental SaaS growth. Great. Thanks very much, Takis. Our final question for the day comes from Josh Levin at Autonomous. This one's for Max as well. Recently, there's been talk of more consolidation in the European banking sector. What does that mean for Temenos? Thank you, Josh. Great question to finish the day. Obviously, we've seen already quite a bit of consolidation in Europe. Ultimately, if you look at when we replace a system within banks, and especially in the largest banks, it often comes because of prior acquisition. When you look at so many different legacy systems which have been combined but never integrated, and one of the reasons is it's extremely complicated. Hence, what we've seen over the years is acquisition could trigger, and is a trigger to simplify the IT infrastructure. Clearly those legacy systems are so expensive to maintain, having a lot of complexity, a lot of risk as well. Hence, what we've seen is through M&A, sometimes it is a trigger to engage into a whole replacement with a modern technology like the one of Temenos. I would say overall, M&A has been a slightly positive impact on our business. I think that was the last question for the day. It was quite an intense and a full day, and I think, obviously we have preferred to be together and to be able to exchange. Hopefully you've been able to have a good online virtual experience with us today. At least we clearly enjoyed a lot on our side, and hopefully you better understand our business case, you better understand the massive opportunity in front of us, and you understand our passion for Temenos, our passion for this industry, and we want to continue to make banking better, and that's really our goal. With that, I'm sure I'll be talking to lots of you in the next few days. Otherwise, take care, be safe, and looking forward to be engaging with you soon again. Thank you very much.