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Mysis Banking System

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					Mysis Banking System

Agenda
• Overview of Misys

• Pressures for banks to change
• Our strategy in banking • Summary

Misys – group structure
Banking and Securities Division Revenue Profit £303 million £63 million Healthcare Systems Division £286 million £50 million Financial Services Division £447 million £30 million

Employees
Locations

3, 000
Offices in 28+ countries

2, 200
Offices in 62 US locations

1, 300
Offices in 7 UK locations

Customers

90%+ of world top 50 banks >60% of world top 250 banks

85, 000 physicians 1, 200 hospitals 600 homecare providers

Approx. 7, 000 IFAs in Misys networks 2, 000 general insurance brokers

Note: Adjusted to exclude goodwill amortisation, exceptional items.

Summary results
£m - year ended 31 May Revenue Adjusted Operating Profit Adjusted PBT Adjusted EPS Dividend Per Share Cash Flow From Operations Cash Conversion 2002 2001 Growth

1036

859
142 136 18.8p 4.29p 128 104%

21%
(10%)

128
112 16.4p

(18%)
(13%)

4.93p
121 111%

15%

Note: Adjusted to exclude goodwill amortisation, exceptional items and the investment in B2C Internet Services

Agenda
• Overview of Misys

• Pressures for banks to change
• Our strategy in banking • Summary

Current behaviour reflects tougher short term environment
Have you delayed or deferred IT spending this year?

Yes - and no sign of budgets easing

23% 29%

Yes - but conditions are easing

16% 17%

No deferrals

61% 54%

0% 10% 20% 30% 40% 50% 60% 70% Mar-02
Source: Cazenove October 2002

Sep-02

Pressures for banks to change
• Big issues:– Globalisation drives heightened expectations amongst:
• customers • regulators
– e.g. Basle II

• shareholders

– Technology
• lowers barriers to entry, increases transparency • encourages new entrants • opens door for straight-through processing • enables step-changes in cost structures

Pressures for banks to change

• Meaning that they have to produce
– higher volumes of lower margin business from which they have to make more money whilst employing less capital

Three ways to meet the challenge
• The challenge: – higher volumes of lower margin business from which they have to make more money whilst employing less capital

Increase transaction volumes • channels to market • product innovation • quality of service

Reduce transaction costs • straight-through processing

Reduce capital necessary to support each transaction • risk management

Pressures for banks to change

• Meaning that they have to produce
– higher volumes of lower margin business from which they have to make more money whilst employing less capital

• Outcomes
– consolidation – spending on technology is a necessity and will continue to rise over the medium to longer-term

How can banks control IT costs
“Full-year internal IT spend by banks generally exceeds budgeted outlays by an average 20-25% per year.”

Gartner Group 2002
• Higher use of outsourcing
– external vendors often have more advanced systems

• Greater focus on deliverable ROI not just expenditure
– clear linkage between spend and outcomes

• Increased role for IT managers
– IT managers increasingly overseeing spending-toimplementation process

Key enterprise software buying criteria
Integration with existing systems Depth of functionality Vendor reputation Price Vendor financial stability
7% 34%

49%

5%

4%

0% 10% 20% 30% 40% 50% 60%
Source: Cazenove October 2002

Agenda
• Overview of Misys

• Pressures for banks to change
• Our strategy in banking • Summary

Strategic approach

• “a portfolio … covering all major activities of financial institutions”
– our results are not dependant one sector – enables us to be a key strategic vendor – enables us to leverage our distribution

• “diverse in segment”
– enables us to move to where the demand is

Large markets
Estimated annual spend on ILF + maintenance – Total = $7.5bn

Asset management
Securities

Retail

Treasury

Corporate

Source: Misys estimates

Product portfolio - segment coverage
Asset Management
F R O N T

Securities & Cap Markets

International / Corporate

Private

Retail

Multi-Channel Delivery (mobile, internet, call centre, branch)
Customer Relationship Management Corporate Private Retail Corporate Trade Finance Lending Private Private Banking Retail Branch Automation

Dealing, Pricing, Position Keeping, Trading Risk Management, Performance Measurement, Trading Data

B A C K

Transaction Processing, Payments, Accounting, Settlement, MIS

Enterprise-wide Risk Management & Reporting
Risk Management, Statutory Reporting, Market Data

i n t e g r a t I o n

Mix of customers in tiers 1 - 4

Banking and Securities business mix
(% of total revenues by segment „02)

Other 1% Securities Trading 8% Asset Management 9% Risk 3%

International Banking 35%

Retail 12%

Treasury & Capital Markets 32%

Banking – installed base by region
Live sites Total = c 3,500 live sites

Americas

Europe

APAC

CISMEA

Strategic approach

• “a portfolio … covering all major activities of financial institutions”
– our results are not dependant one sector – enables us to be a key strategic vendor – enables us to leverage our distribution

• “diverse in segment”
– enables us to move to where the demand is

• “balanced in maturity”
– enables us to make money at all points in the cycle, whilst still investing substantial amounts in R&D

Banking – using R&D and distribution to strengthen product
OPICS cumulative customer base
177 151 133 104 60 45 4 17 210

93

94

95

96

97

98

99

00

01

Pre-acquisition: - 7 sales staff in 3 centres - 60 customers in 19 countries

Post-acquisition: - 134 sales staff in 24 centres - 210 customers in 61 countries

Strong position

• Strategic approach delivers:
– more new names than any other vendor in our space

Leading market position

International Banking (back office systems)
New name sales 2001 Live sites

Misys
Temenos I-flex Trema Sungard
6
11 29

38 35 145 129 450

1,163

45

Source: IBS Magazine, March 2002

Strong position

• Strategic approach delivers:
– more new names than any other vendor in our space – resilient recurring revenue stream from large, existing customer base

Banking – resilient business mix
Misys-IBS Order intake ILLUSTRATIVE

Additional product/usage

New customers

Upgrades

Misc

New sites

Agenda
• Overview of Misys

• Pressures for banks to change
• Our strategy in banking • Summary

Summary

• We are building a world-class software products group • In banking Misys has a leading position in one of the largest areas of IT spend • Substantial pressures on banks to switch spending behaviour towards external vendors • We can deliver customer‟s need for wide product functionality • The long-term dynamics of the market are favourable


				
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Description: Mysis Banking System