Everyone’s
Banking
Platform
Annual Reportand Accounts 2023

Contents
Overview
1

Highlights of 2023

2

At a glance

6

Insights

Our strategy to be
Everyone’s Banking
Platform:

Integrated Report
8

Chairman’s statement

10

CEO statement

12

Our market opportunity

14

Our strategy

16

Industry recognition

18

Temenos Value Benchmark

20

Software and products

26

Research and development

29

Partner First delivery

34

Sustainability

121 Appendix

Continued SaaS acceleration

North America focus

Increasing penetration in large banks

Partner First approach

141 Financial review
146 Principal risks and uncertainties

Corporate Governance
156 Board of Directors
158 Executive Committee
160 Corporate governance report
172 Compensation report
196 R eport on the audit of thecompensation report

Financial Statements
198 R eport on the audit of theconsolidated financial statements
204 Consolidated statement of
profit or loss
205 Consolidated statement ofother comprehensive income
206 Consolidated statement offinancial position
207 Consolidated statement ofcash flows
208 Consolidated statement ofchanges in equity
209 Notes to the consolidated
financial statements
260 Report on the audit of thefinancial statements
264 Unconsolidated balance sheet
265 Unconsolidated income statement
266 Notes to the unconsolidated
financial statements
272 Financial highlights
273 Information for investors
274 Temenos world offices
277 Sources

B Read more on pages 14 and 15

Overview

Temenos AG Annual Report and Accounts 2023

1

HIGHLIGHTS OF 2023

Non-IFRSAnnual Recurring Revenue(USDm)

Subscription revenue(USDm)

SaaS revenue(USDm)

Total software licensing(USDm)

2022: 105.7 (+52%)

2022: 163.7 (+25%)

2022: 404.8 (+10%)

730.0

160.4

Maintenance(USDm)

Total revenue(USDm)EBIT(USDm)EBIT margin(%)

2022: 401.9 (+5%)

2022: 949.6 (+5%)

2022: 272.4 (+15%)

2022: 28.7 (+3%)

2022: 626.1 (+17%)

423.7

Earnings per share
(USD)

3.19

2022: 2.82 (+13%)

1,000.2

205.1
313.0

443.6
31.3

Operating cash flow
(USDm)

Free cash flow
(USD)

Dividend per share(CHF)

2022: 316.6 (+24%)

2022: 192.9 (+26%)

2022: 1.10 (+9%)

391.5

242.6

1.20

The journey towards
the future of banking
Industry context

In 2023, General Artificial Intelligence (Gen AI) erupted onto theglobal technological scene, revolutionizing industries with its
advanced capabilities and potential for innovation. Within thistransformative landscape, banks have swiftly recognized thestrategic importance of Gen AI, actively investing in its
integration to enhance operational efficiency, customer
experience and risk management. This surge in adoption
represents a significant opportunity for Temenos, as ourcutting-edge banking software solutions are uniquely
positioned to harness the power of Gen AI, building on ourstrong foundation in Explainable AI. Hence, we are committed
to ensuring that our Gen AI solutions are responsible andtransparent, and also deliver tangible incremental businessvalue in terms of personalized customer experiences, betterrisk management and improved operational efficiency.
Nimble non-incumbents such as payment providers,
e-commerce and technology giants as well as neobank andfintech challengers, with their lower cost operating models
and superior customer experience, have been attacking both themargins and market share of incumbents for a few years now.
While incumbent (traditional) banks confirm the continued threatof fintechs, the past year saw significant decline in fintech
funding, accompanied by changing investor expectations fromgrowth to near-term profitability; this trend is expected to persist
in the near term even as rates begin to fall. Fintechs will reboundin the medium to longer term, not only taking away share fromincumbents, but also expanding the banking revenue pool bytapping more into the large volume of unbanked andunderbanked individuals and SMEs, especially in emerging
markets. We have also strongly positioned ourselves to serve thefast growing non-incumbent segment with our market leadership

position within challenger banks, fintechs, platforms and BaaS
players, and in the past year continued to sign deals with large
or niche players which have greater value potential.
Therefore, the position of incumbent banks has become
stronger in the short term and they are fighting back with theirown next-gen banking products and experiences. We remain
an undisputed market leader in the incumbent banking market
which is projected to be 91% of our addressable market in 2027.
The shift towards public cloud adoption in banking continues
to accelerate. A recent Economist survey reveals that 51% ofbankers anticipate that banks will no longer have traditional
data centers within five years, favoring the agility and scalabilityof public cloud solutions. Bolstered by substantial investmentsfrom hyperscalers in security measures, large banks are
growing more confident in adopting public cloud services.
Within mission-critical workloads, large banks are prioritizing
the migration of digital banking and customer-facing channels,
and core banking for secondary business lines and overseas
operations. Mid-small banks are adopting public cloud and
SaaS for primary business lines and domestic operations as
well, while non-incumbents have a strong preference to start
greenfield on SaaS. SaaS is also an increasingly popular path tothe public cloud for banks in markets with hyperscaler
availability but lower cloud talent pools.
Looking ahead to 2027, our projections indicate that incumbent
banks are set to outspend non-incumbents with 3.5x spend on
public cloud. Temenos, with its strong penetration in bothsegments, and through its advanced cloud-native solutions
and mature SaaS offering, is uniquely positioned to maximize
the public cloud opportunity.

2

Overview

Temenos AG Annual Report and Accounts 2023

AT A GLANCE

The open platform forcomposable banking
Our purpose is to power a world of banking
that creates opportunities for everyone.

Our values

We challenge

We challenge the status quo, try tolook at things differently and drivechange.

We commit

We commit with determination andpersistence to make things happen.

We collaborate

We collaborate within Temenos andacross a broader Partner ecosystem.

We careWe care and listen to each other,
our clients, our Partners and thecommunities we serve.

Over 950
Over 600
Over 90%
core banking clients1

digital clients1of revenue generated by top 1,000 clients across all
products in FY-231

150+

countries in which clients are present1

1	In this report and in the future, Temenos will focus its client number disclosure on those clients generating the significant majority of Temenos’annual revenue, as well as client numbers across its core banking and front office platform, in an effort to better reflect the relevance ofTemenos’ client base to its business performance. Previously disclosed total client numbers included a range of clients acquired as a resultof M&A transactions contributing less to Temenos’ annual revenue.

Temenos AG Annual Report and Accounts 2023

Overview

Recurring revenue model delivering value
and continuing to drive growth

Aligned sales organization
to ARR model
ARR based targets; incentives
to drive SaaS, subscription
and maintenance

Enhanced value-based
selling to capture uplift
Optimized deal structures
and aligned to business value

Strengthened salesorganization globally
Specialization; recruited
seasoned industry talent;promoted provenleaders with structured
succession management

AI driven sales execution
Enhancing predictability
and value capture3

Overview

4Temenos AG Annual Report and Accounts 2023

AT A GLANCE continued

Our global
opportunity

19

13

offices

offices

The Americas

EuropeRevenue (%)

Revenue (%)

Total software licensing
revenue (%)

28% 41%

Total software licensing
revenue (%)

30% 24%

Overview

Temenos AG Annual Report and Accounts 2023

8

16

offices

offices

Middle East and Africa

Asia Pacific

Revenue (%)

Revenue (%)

Total software licensing
revenue (%)

24% 20%Total software licensing
revenue (%)

18% 15%5

6Overview

Temenos AG Annual Report and Accounts 2023

INSIGHTS

Banking trends –Economist Impact report
released by Temenos
Banks must harness emerging technologies to create their own digital
ecosystems and remain at the center of the banking universe.
New technologies will have the biggest impact on banks inthe next five years – more than customer demands andevolving regulation.
More than 70% of survey respondents see unlocking value
from AI as a key differentiator between winners and losers,
while 75% expect generative AI to impact banking.
Customer centricity is driving banks to offer more embedded
ESG propositions to their customers (73%).
With the focus on lowering their carbon footprint, as well as
the increasing use of data-intensive AI, banks are inevitably
moving to the public cloud – 51% of respondents agree thatbanks will no longer own any private data centers after moving
to the public cloud.

The move to byte-sized banking –can banks create a true ecosystem?
In the last iteration of Economist Impact’s global
banking survey, conducted in 2021, banks were facing aperfect storm as the pandemic accelerated consumer
use of online banking, hastening the closure of bankbranches and seemingly giving a strong advantage todigital-first competitors. It is no surprise, then, that newtechnologies are expected to have the biggest impact
on banks in the next five years, according to 63% of
respondents in this year’s survey – a finding that has
been consistent since 2019.
The Economist Impact, on behalf of Temenos, surveyed 300
executives in retail, commercial and private banking spanning
Europe (25%), North America (23%), Asia Pacific (18%),
Middle East and Africa (17%) and Latin America (17%). Half of the
respondents were C-suite executives. This global independent
report, which is now in its eighth year, highlights thefollowing trends:

Rise of the machines

New technologies are expected to have the biggest impact onbanks in the next five years, according to 63% of respondents inthis year’s survey – a finding that has been consistent since2019. Even more respondents in North America are convincedcompared to those in other regions (90%, compared with 63%
globally) that technology will be the trend to have the biggest
impact on banks in their country in the next five years.
In the spotlight this year is generative AI. While AI and machinelearning (ML) have been in existence for decades, the launch of
Chat GPT late last year demonstrated the potential of AI totransform everyday tasks and spurred companies to find thebest ways to leverage it. Indeed, 75% of respondents to thisyear’s survey believe that the banking sector will be significantly
impacted by generative AI and more than 70% agree that
unlocking value from AI will be the key differentiator between
winners and losers.

Moving to the cloudAs ecosystems enable banks to play a larger part in consumers’
lives, what they stand for and how they operate will mattermore. Companies across sectors are increasingly expected bycustomers and employees to operate according to clear values.
There is growing public attention directed towards the importantrole that banks can play in climate action. The shift of applications
to the cloud is a part of this drive, as public cloud storage
typically has lower carbon emissions than private data centers.
More than half (51%) of survey respondents agree that banks
will no longer own any data centers because they will have
moved to public cloud in the next five years. More banks inNorth America (79%) believe that a multi-cloud strategy will
become a regulatory pre-requisite in the next five years,
compared with just 60% in Europe.

Banks prioritizing becoming more inclusive,
more sustainable organizations

This is translating into banks offering more ESG andsustainable banking propositions to both retail and enterprisecustomers in the next five years (73%), as well as providing
capital to environmentally friendly projects (74%) and taking
capital away from carbon-intensive industries (64%). More than
one-third (37%) of banks report investing in low-carbon
technologies and start-ups working on decarbonization.
As part of their own sustainability initiatives, 31% are
implementing strategies to reduce emissions in theiroperations internally as well as their supply chain.

Overview

Temenos AG Annual Report and Accounts 2023

Competition and collaboration – if you can’tbeat them, join them

Since the last survey in 2021, deepening engagement with
fintechs has become a much more important innovation
strategy for banks. Compared to 2021, a much higher shareof banking executives now cite investing in fintech start-ups(41%) and participating in sandboxes with fintechs and othertechnology providers to test new propositions (32%) as their
top innovation strategy.

Meeting banking customers where they are

To keep a direct connection with customers, banks arerecognizing that they must become true digital ecosystems.
Survey respondents say that this is the top way that theirbusiness models will evolve over the next 12–24 months, andthis will support their top strategic priority for the next five
years of improving personalized and embedded customer
experience and engagement (30%). 79% of survey respondents
expect banking to become embedded in customers’ lives andbusinesses’ value chains in the next five years.

7300

global banking executives, half of whom were C-suite, weresurveyed on the changes they see taking place in theirindustry in the next three to five years.
New technologies

63%

believe that new technologies will have the biggest impact
on banks in the next five years.
Embedded finance79%

agree that banking will become “embedded” in consumers’
lives and businesses’ value chains.
Digital ecosystems

Banks need to tap into expertise in newtechnologies like cloud and AI as well as
collaborate with fintechs and technology
companies to offer embedded finance andbuild digital ecosystems. The case for the
public cloud is becoming more apparent, with
51% of respondents agreeing that banks will nolonger own any data centers due to the moveto public cloud in the next five years.
Environmental concerns have also joined thelist of reasons that banks are accelerating theshift to the cloud.
Kanika Hope
Chief Strategy Officer
Temenos

38%

foresee acting as a true digital ecosystem, offering own andthird party banking and non-banking products and services.
Customer experience

75%

agree that banks will seek to differentiate on customer
experience rather than products in the next five years.
Moving to the cloud

51%

agree that banks will no longer own any private data centersin the next five years after moving to the public cloud.

8

Integrated Report

Temenos AG Annual Report and Accounts 2023

CHAIRMAN’S STATEMENT

Our values
and ourleadership
Dear shareholders,

2023 has been a year of good growth and achievement of
all targets announced in February. I am pleased with theperformance of our Executive team, led by Andreas Andreades
since January, when he took the interim CEO responsibility.
Despite the ongoing macro uncertainty and several unforeseen
events in the year including the collapse of Silicon Valley Bankand First Republic in the US, and the takeover of Credit Suisse
by UBS in Europe, Temenos has focused on what it does best
– driving innovation in the platform and helping clients achieve
their business objectives through partnering with us. And thishas resulted in a solid set of results for the year where weachieved success across our KPIs.
Temenos has made excellent progress in its journey to arecurring revenue business model through 2023. With thetransition to subscription in place of term licenses substantiallycompleted for new transactions by the end of the year, andthe growing share of SaaS revenue, we have seen very strong
growth in Annual Recurring Revenue as well as Free Cash Flow,and this is expected to continue going forward.
The Company signed a number of landmark deals in the year,
including with one of the largest US banks for their international
corporate business, another tier 1 global bank headquartered inEurope for the international wealth business, and a flagshipsigning in the US with Regions Bank. It is clear Temenos hasretained and even expanded its competitive moat in the faceof traditional competitors and more recent neo-vendors,
through its relentless focus on innovation and R&D.

Thibault de Tersant
Chairman

The Board is confident
that the Company’s
strategy will continue todrive growth in thebusiness. The strategic
objectives of accelerationin SaaS, a focus on North
America, a Partner
centric approach andincreasing our
penetration in largerbanks will ensure weremain at the forefrontof our industry.

Integrated Report

Temenos AG Annual Report and Accounts 2023

9

I would like to thank our shareholders for yourcontinued support as we look to the future andfocus on delivering value for all our stakeholders.

The Board is confident that the Company’s strategy willcontinue to drive growth in the business. The strategic
objectives of acceleration in SaaS, a focus on North America,a Partner centric approach and increasing our penetration inlarger banks will ensure we remain at the forefront of ourindustry. Temenos has demonstrated the strength of its
cloud-native platform, with some of the largest banks in theworld working with us to migrate their workloads to the cloud,and shown its innovation capabilities, with market-leading
fintechs and payment providers also choosing Temenos.
Looking at the non-IFRS results for 2023, Temenos delivereda revenue of USD 1,000 million, an EBIT of USD 313 million and
EPS of USD 3.19, growing 13%. Our ARR reached USD 730 million
by year end, an increase of 17%, and our Free Cash Flow reached
USD 243 million, an increase of 26%.
Based on the strength of these results, the Board of Directors
are pleased to propose an annual dividend for 2023 of CHF 1.20
per share, an increase of 9%, to be voted on at the Annual
General Meeting on 7 May 2024.
We are fortunate to operate in a sector with many positive
characteristics, however it is also a sector where its volatility
in growth and debates around accounting treatments havehistorically attracted short selling speculators. It is disappointingthat in spite of the strength of our cash flow, our below industry
average customer churn and our good ARR growth, a report
was released on 15 February alleging “major accounting
irregularities” and “failed products” by Hindenburg with theintention of causing damage to our share price.
Although the Board was confident about the quality of
our cash flow, our systems, our products and good control
environment, we understand the impact which this type of
event can have. There must be complete confidence andtransparency in our business. We decided therefore tocommission an examination of the allegations led by myself
with a Committee of Independent Board members supported
by leading independent examiners. The conclusions of thiswork were made public on 15 April 2024 and have provided
independent confirmation that there is no substance andthe allegations are misleading and inaccurate.

I really want to thank and congratulate the Temenos teams
who maintained their dedication to deliver for our customers
and achieve our objectives, while facing these allegations andwe feel more united and stronger than ever.
Finally, after a long and thorough selection process, we are
hopeful to be able to introduce our new CEO to you at our
upcoming AGM on 7 May. I would like to thank Andreas Andreades,
for stepping in and extending his time at Temenos as CEO toenable this transition and more importantly for the enormous
contribution he has made in his 25 years with Temenos.
Temenos is a first class company with an exciting future aheaddelivering value and innovation to our clients and achieving our
mid-term objectives, leveraging the strong Temenos teams
and culture.
I would like to thank our shareholders for your continued
support as we look to the future and focus on deliveringvalue for all our stakeholders.

Thibault de Tersant
Chairman

10

Integrated Report

Temenos AG Annual Report and Accounts 2023

CEO STATEMENT

Return to
growthThoughts on our performance in 2023

Looking back on 2023, it was a critical year for Temenos inmany ways, and one which I think we will see as a milestone
in the Company’s history. After an unusual 2022, with macro
uncertainty causing a slowdown in our end market, we werelooking forward to a year of greater stability and focusing on
executing on our strategic initiatives without the distractionsof previous years. The key focus for us was moving to arecurring revenue model through our transition to subscription
revenues and further development of our SaaS business. And
we achieved both of these, with our transition to subscription
from term license substantially complete by the end of theyear, and we continued to put in place the foundations forfurther growth in our SaaS business.
Reflecting on our financial performance, 2023 was a successful
year for Temenos, in which we delivered growth across all of
our KPIs. We listened to the feedback from our shareholders,and set guidance at the start of the year that we considered
realistic and achievable based on strength of our pipeline. With
our strong performance through the year we were then in aposition to progressively raise our guidance through the year.
ARR is now the key metric of measuring the progress with ourshift to a recurring revenue business model, and we delivereda strong 17% growth in this metric for the full year. More
broadly, we saw good growth across our revenue, profit andmargins, and in particular had very strong growth in our free
cash flow, reflecting the progress we have made on our
subscription transition and SaaS acceleration.
2023 was a highly productive year for Temenos from both aclient perspective as well as our own innovation and investments.
We signed a number of landmark deals during the year that are
testimony to our market leadership position, in particularamong tier 1 global banks. Early in the year, we signed a deal
with a tier 1 global bank headquartered in Europe to renovate
its international private bank, capitalizing on our Wealthproduct expertise and deep understanding of banking acrossmultiple geographies. We also expanded our relationship witha tier 1 US bank to upgrade its international corporate banking
platform in the cloud, after already signing a deal with them in
2022 to renovate their international private bank. This continued
penetration of an existing customer, and one of the world’s
largest banks, demonstrates the value our clients achieve byusing our platform as well as the trust our clients put in us.
We also won a landmark core banking renovation with Regions
Bank, a top 30 domestic US bank.

Andreas Andreades
Chief Executive Officer

The key focus for us wasmoving to a recurring
revenue model throughour transition to
subscription revenues
and further developmentof our SaaS business.

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11

We have now firmly established our cloud-native
credentials, as demonstrated by the number ofclients running on SaaS with Temenos or runningtheir Temenos platform in the public cloud themselves.

None of this would be possible without the ongoing supportand references from our existing client base. We were very
pleased to announce we achieved a market-leading Net
Promoter Score (NPS) of +54 following a survey of over 900
customer contacts.
According to our clients who took part in the NPS survey, oneof the key factors driving customers to recommend Temenos
to others is our product capabilities. We made significant
investments in 2023 in our organization to further enhance ourplatform and product capabilities, in particular around SaaSand cloud. There were a number of exciting new product launches
such as the launch of Temenos Enterprise Services, ourend-to-end SaaS services for retail, business and corporatebanking that come with over 120 pre-packaged banking
products and 700 pre-configured APIs. Using Temenos
Enterprise Services, our clients can deploy software solutionsin just 24 hours and significantly reduce modernization costs,
complexity and risk while accelerating time to value. Temenos
also recently announced Leap, a new AI-powered offering thathelps customers to modernize faster and to seamlessly andquickly move to the latest cloud-native Temenos technology.
With the investments planned over the next 12 months, I am
confident we will continue to be at the forefront of innovationin our industry.
We have now firmly established our cloud-native credentials,
as demonstrated by the number of clients running on SaaSwith Temenos or running their Temenos platform in the public
cloud themselves. We are clearly putting more distance between
ourselves and our competitors, both the established global
vendors we have always competed with, and the newer
cloud-native competitors that have sprung up over the last
decade. We are confident we have a highly differentiatedcloud-native offering against both sets of competitors, andfully intend to increase our competitive advantage through ourrobust innovation roadmap over the coming years.
Looking at our end market, 2023 was broadly a good year forour client base globally. Despite a number of events thattriggered concerns of contagion across the industry, notably thecollapse of Silicon Valley Bank and First Republic in the US, andemergency rescue of Credit Suisse by UBS in Europe, the wider
banking system continued to operate without any widespread
disruption. Rising interest rates have boosted bank profits
whilst at the same time making it more challenging for fintechs
and other new entrants to raise capital and fund investments.
Incumbent banks are, of course, still contending with a highly
competitive landscape, where leading traditional players areinvesting in their IT platforms and product offerings, andfintechs with new business models are trying to capture
market share. And banks are also having to consider the role of
AI in their operations which can be both an opportunity if

properly leveraged to drive efficiency and greater
understanding of their client base, and a threat in terms ofretaining their competitive positioning, especially in terms ofresilience and security of their operations and data.
In this context, 2023 was a year that Temenos did what it is
known best for. We continued to be the leader in the sector,
pushing the boundaries of the banking software market. We
are at the forefront of the move to the cloud in banking andbelieve we are creating the market through our relentless
focus, and in the process delivering success for all
our stakeholders.
Our performance and the progress Temenos made in 2023 set
us up very well for further growth and success in 2024. We
expect to see continued growth in both our subscription and
SaaS businesses as we leverage the advantages of a single
platform with industry-leading levels of investment. We haveexcellent momentum with both new and existing clients andwe benefit from very strong client references that give newclients the confidence to partner with Temenos to solve theirbusiness goals. Of course our success is only possible with theeffort of every Temenosian, and I am incredibly proud of thecommitment our people show every day to Temenos, theirclients and the banking industry.
Temenos is able to succeed because of the values that are at
the heart of everything we do. We call our values the four Cs;
we challenge, we commit, we collaborate and, most importantly,
we care. We care about each other, our clients, our Partners
and the communities we serve and operate in. And this isreflected in our approach to ESG, which we have integrated
across our operations and business processes. ESG is a
Board-level issue for our clients, which expect their Partners tomeet the highest ethical and sustainability standards. Not only
have we been recognized as a leader in ESG in the software
industry, but we are also helping our clients achieve their own
ESG targets, in particular through our cloud-native platform,
enabling our clients to track and significantly reduce their carbon
emissions. And I am confident that Temenos will retain its
position as a leader in ESG and sustainability going forward.

Andreas Andreades
Chief Executive Officer

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12

Temenos AG Annual Report and Accounts 2023

OUR MARKET OPPORTUNITY

Market growth driven by
structural industry drivers
Temenos’ Serviceable Addressable Market (SAM)
Serviceable Addressable Market is the banking third party software spend addressable by Temenos products.

SAM $BBy product

10% CAGR

By SaaS vs on premise
USD37bn

USD37bn

USD26bn

By incumbent vs non-incumbent
USD37bn

CAGR
2023–27
USD26bn

USD26bn

17%

30%
5%
2023

2027

Core
Digital
Funds

2023

Financial Crime
Payments

CAGR
2023–27

9%

2027

2023

On premise
SaaS (vendor run andpublic cloud bank run)

2027

Incumbents
Non-incumbents

Incumbents poised to spend 3.5x non-incumbents on SaaS in medium term
Source: Proprietary Temenos model built on data from IDC and Ovum and assumptions from McKinsey, S&P CapIQ, CB Insights and industry experts.

Top areas of technology spend

Retail Banking

Corporate Banking⚫

Embedded finance and
BaaS propositions⚫

BNPL or PoS finance⚫

Digital lending⚫

Client lifecycle management⚫

Digital account opening⚫

Small business digital channels⚫

Customer product bundles⚫

Embedded finance and ecosystem

Private Wealth⚫

Corporate digital channels⚫

Data analytics and insights⚫

Trade services and supply
chain finance⚫

Alternative investments⚫

ESG solutions⚫

Digital account opening
and onboarding⚫

Omni-channel advice

Technology
Artificial
Intelligence

Publiccloud

Open financecapabilities

RPA/workflow
automation

Blockchain/DLT

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13

Temenos’ revenue and operating models

Subscription revenue

PrivateOn premiseTemenos
software⚫

Banks to continue in jurisdictions with restrictions⚫

Larger banks likely to run software themselves for main
business lines

Temenos⚫

Traditional Temenos business⚫

Larger banks likely to run software themselves for main
business lines⚫

Growth in public cloud accelerates revenues for Temenos

Bank runs
softwarePrivate cloud

Subscription revenue

Temenos
softwareTemenos
softwarePublic cloud

Temenos
Partner
SaaS
Operations

Bank runs
softwarePartner runs
softwareTemenos⚫

Traditional Temenos business⚫

Larger banks more open to large system integrators
providing managed services⚫

Banks in jurisdictions with data sovereignty and data
center location issues for hyperscalers

Temenos⚫

Opportunity for Temenos to improve margin and scale in
new segments/markets⚫

Migration strategy for banks running legacy software⚫

Accelerated integration to banks’ IT landscape⚫

Typically for smaller banks and non‑incumbents⚫

Increasingly adopted by larger banks for overseas,
specialty business lines⚫

Some mainstream large banks are also moving onto
Temenos Banking Cloud

SaaS revenue

Temenos
softwareTemenos
SaaS
Operations

Temenos
runs
softwareTemenos⚫

Temenos margin improves with scale, automationand cross-sellIntegrated Report

14

Temenos AG Annual Report and Accounts 2023

OUR STRATEGY

Key strategic initiatives
to drive growth
Continued SaaS focus
Enterprise services⚫

120+ pre-configured products, 700 APIs and 1,800
business service flows⚫

Reduced modernization cost, complexity and risk⚫

24-hour deployment; 90-day time to value forfirst delivery

Continuous updates⚫

Faster deployment of new features

SaaS operations automation⚫

Upgraded automation⚫

Streamlined onboarding⚫

Enhanced incident and problem management process⚫

Continued focus on risk, compliance and security

Go-to-market⚫

Try before you buy: Provision of non-production SaaS
environment for all⚫

LEAP: AI-based modernization program for existingclients to move to latest release and platform, replacing
older solutions

North America focus
Strengthened organization andproduct offering⚫

Recruited seasoned industry resources across sales,
cloud and delivery⚫

Enhanced US model bank, US specific data privacy
and security

Targeting top tier banks for
digital transformation⚫

Momentum in market and appetite for transformation
driven by cloud

Maintaining leadership in
non‑incumbent segment⚫

Upgrades and expansion with market-leading embedded
lending player⚫

Greater focus on larger and niche players

Continuing momentum in international
subsidiaries and offshore Wealth (US)⚫

Including two top 100 global banks, and three top nationalbanks from APAC and LATAM

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Temenos AG Annual Report and Accounts 2023

Increasing penetration inlarger banks
Standalone capabilities supporting build
and migrate modernization strategies⚫

Retail: Party, Holdings, Product Manager; Retail Enterprise
Service for digital spin-offs⚫

Corporate: Secondary loan trade settlement and portfolio
allocation; AI dashboard for Corporate Treasurers⚫

Wealth: Wealth Front Office with full AWS support

Technology⚫

Wide deployment choice: on premise, public cloud
agnostic, hybrid and SaaS⚫

ESG footprint reduction through Temenos Banking Cloud⚫

Elastic scale and performance; reduced total costof ownership

Go-to-market⚫

Increasing investments in specialized bid teams

Strategic Partner program⚫

Increased and structured engagement with key C-level
influencers at large banks

Strategy Days
Customer events targeted at C-level with knowledge
sharing, thought leadership and executive alignment

Partner centric approach
Sales Partners for localization⚫

9 Country Model Partnerships set up⚫

15+ in pipeline

Resellers and distributors⚫

Tiering of resellers⚫

Establishing partnerships with large distributors
to improve predictability

Delivery Partners⚫

Enhanced screening, certification methodology
and governance⚫

Continuous Partner capability and coverage reviews⚫

Majority of 391 go-lives with Partner involvement

Temenos Exchange⚫

50+ deals sourced through Exchange Partners closed
in 2023⚫

200+ leads generated⚫

51 providers onboarded in 2023; 2x YoY

15

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INDUSTRY RECOGNITION

A market leader
A “Market Leader” in corebanking and a “Market Leader”
in digital banking platforms.3

Gartner 1⚫

Recognized as a Leader for the 12th time in the2022 Gartner® “Magic Quadrant for Global RetailCore Banking”.

Forrester2

12 times⚫

Leader in Forrester Wave for Digital Banking Processing
Platforms for Corporate Banking, Q3-22 and Leader in
Forrester Wave for Digital Banking Processing Platforms
for Retail Banking, Q3-22.

⚫

Leader in Forrester Wave for Digital Banking Engagement
Platforms, Q3-21 and Leader in Forrester Wave for Digital
Banking Engagement Hubs, Q3-21.

⚫

Classed as “Global Power Seller” for new business for the
16th consecutive year and “Top Global Player” for new andexisting business deals for tenth consecutive year plus
second year as “Top Global Cross-Seller” (new category)in Forrester Global Banking Platform Deals Survey 2022.

⚫

Leader in Forrester Wave for Low-Code Development
Platforms for AD&D Professionals (Q1-19).

Recognized as a Leader 12 times1 in Gartner
Magic Quadrant for Global Retail Core Banking

16 years

Classed as “Global Power Seller”
for new business2

18 times

Ranked best-selling core banking system4

Omdia (formerly known as Ovum)3⚫

“Market Leader” in cloud-based core banking,“Market Leader” in digital banking platforms
and core banking.

⚫

“Market Challenger” in Anti-Financial Crime solutions.

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IBS Intelligence4⚫

Ranked best-selling core banking system for the 18th time
and top two positions for the past 22 consecutive years.

⚫

Ranked best-selling digital banking and channels system.

⚫

Ranked best-selling payments system.

⚫

Recognized as a “Leader” for Worldwide Integrated
Payment Platforms.

⚫

Recognized as a “Leader” for Know Your Customer (KYC)
Solutions in Financial Services and as a “Major Player” forAnti-Money Laundering (AML) Solutions in Financial
Services. Recognized as a Leader in global core banking,European mobile banking and wealth management front
and middle office.

Celent5⚫

Temenos’ client, Varo Bank, received the Model Bank of theYear Award at the 2021 Celent Model Bank Awards.

⚫

Temenos’ client, EQ Bank, received the Celent Model Bank
2020 Award for Banking in the Cloud.

IDC (International Data Corporation)⚫

⚫

Aperture: The Market Map for WealthManagement Software 20217⚫

6

The only vendor recognized as a Leader and a Transformer(the two highest categories) for WealthTech.

Recognized as a “Leader” with Temenos Digital (Infinity) in
the IDC MarketScape for North American SME Lending
Decisioning Platforms 2023–2024.

FStech Awards 2023

Recognized as a “Leader” with Temenos Digital (Infinity) in
the IDC MarketScape for SME Lending Experience
Solutions 2023–2024.

Datos (formerly Aite Group)8⚫

Recognized as a “Leader” with Temenos Infinity in the IDC
MarketScape for North America Digital Banking Customer
Experience Platforms 2022.

⚫

Winner of “Agility and Efficiency” category of IDC Real
Results Awards 2021 for Temenos and client Comerica.
Temenos also recognized as joint overall winner of IDC Real
Results 2021.

⚫

Awarded “CTO/CIO of the Year” for Tony Coleman,
Temenos Chief Technology and Innovation Officer.

⚫

Recognized as “Best in Class” (the highest ranking)for Wealth Management-Focused Core Banking Systems.

⚫

Recognized as “Best in Class” (the highest ranking) for US
Digital Banking Solutions of Core Providers.

⚫

Recognized as “Best in Class” (the highest ranking)for Investment and Fund Accounting Systems.

B Find sources on page 277

17

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TEMENOS VALUE BENCHMARK

Unlocking business value
from IT investment
Accelerating value creation by measuring and comparing
a bank’s business performance with banking peers.
The Temenos Value Benchmark (TVB) is a strategic advisory
program offered to our clients and prospects to help themunderstand, accelerate and optimize the tangible businessvalue created by their investment in IT. By leveraging our 30
years of banking domain experience and our banking clientbase across more than 150 countries, we are able to provide
our clients’ data-driven insights into business value creation
using a proven value-based methodology.

Over 200 quantitative metrics, as well as qualitative bestpractices, are collected from each participant to enable us
to provide correlations and insights to explain banking
performance. The program provides a view on high-performingbanks and their adoption of best practices, aligning these with
Temenos’ leading digital banking solutions and providing
state-of-the-art recommendations throughout the entirebanking value chain. It enables banks to identify opportunities
for operational improvements in their business in order toderive even more value from their IT investment, by further
leveraging Temenos as not just a software provider but as atrusted partner, committed to our clients’ success.

The objective is to measure and compare a bank’s businessperformance with other Temenos clients and prospects,
around specific business and IT metrics and best practices
along the banking value chain. Participants in the program
receive a customized confidential report comparing theirbusiness performance with anonymized peer group data fromother participants, including executive-level findings withbusiness and IT insights structured along the banking
value chain.

Productmanagement

Marketing

Today, we have 150 banks as part of our community across76 countries and three verticals (Retail, Business andCorporate, Wealth), we have collected over 70,000 data points
and we have met more than 1,400 senior business and IT
executives as part of this initiative.

Sales andrelationshipmanagement

Operations
and execution

Reporting and analytics

IT

Payments andsettlement

Risk andcomplianceIntegrated Report

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19

The C-level endorses the Temenos Value Benchmark

Our CEO, Chris Catliff, was quite impressed withthe breadth of the Temenos Benchmark Report
and, of course, BlueShore results – so much sothat he has asked for it to be included in our
Board meeting materials for our upcoming Board
meeting in February. As he said to me: ‘I wantthem to know how great our technology
compares as they are unaware.’Fred Cook
CIO, BlueShore

Participating twice in the Temenos Value
Benchmark allowed us to track our progressand determine what we needed to do, basedon the first time. We were able to leverage fullcapabilities, understand industry trends andtendencies, which drastically reduced ourcost-income ratio and digital onboarding times,
and streamline operations through increased
STP rates. Now that we’ve completed it asecond time, we know we’re on the right track.

The Temenos Value Benchmark is comparing you
with other banks that run the same software; it
has an operational focus and it is building yourrelationship with Temenos. If we do it again over
the years, it will give us great insights comparedto all the other benchmarks out there.

Using the technology we have now and with
Temenos Value Benchmark, we are able to pull
data we did not have access to in a meaningful
way, to customize our products and services,to grow market share and to deliver a reliable
and stable level of performance.

Thomas FehrCOO EMEA and Americas, Julius Bär Group AG

Gregory N. Hill
Managing Director, Ansa Merchant Bank Limited

Anthony Gajor
EVP, Hamilton Reserve Bank

Delivering tangible business value through our platform

Win on customer experience

Agility to grow

52%

24%

Hyper-personalization powered byopen banking and Explainable AI.

Fasteronboarding119%

HigherNPS score2

Faster innovation with cloud-native,
API-first banking capabilities and aplug-and-play fintech ecosystem.

Fastertime to market3

Source: Temenos Value Benchmark 2023, sample from 146 banks.
1 Banks with Temenos Digital Banking.
2 Banks with Temenos Core Banking.
3 Banks running Temenos front-to-back.

68%

Highercross‑sell rate1

Scale without limits

Improved cost-to-income ratiowith unlimited scale and services
delivered at a fraction of costof legacy systems.

24%

Higher customers/
FTEs1

33%

More IT spend
on growth andinnovation3

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SOFTWARE AND PRODUCTS

Our solutions
Temenos banking platform
The Temenos banking platform is the delivery foundation for all Temenos solutions and products.
It provides the basis for a continuously updated architecture enabling customers to benefit fromthe most recent software and to extend solutions safely, without impacting operations.

Services
Temenos banking services
Composable services
RetailLending

BNPL

Retail
Deposits

XAI

SEPA
TIPS

Temenos enterprise services
End-to-end services
RetailBusiness &Corporate

WealthPayments

Composeas needed

FCM

Temenos banking platform
Temenos banking capabilities
ChannelsCustomer
Engagement

Product & Pricing

ServicingOperations

Business
SupportRisk &
Compliance

XAI Models

Payments

Data & Analytics

Regionalization

Temenos Exchange
ProvidersCurrency

Time Zone

Banking Foundation
Party

Accounts

Multi-Entity

LanguageTechnology Foundation

Embedded DevOps
Continuous Updates

Extensibility

Responsible AI

Security
Everywhere

Cloud-Native
Cloud Agnostic

APIs & Events

Open Products

Delivery models
Temenos banking cloud
SaaS – Temenos Runs
Continuous
updatesand scaleServicecontinuity

Advancedcomputingpower &
modeling

Governancesecurity & risk

Bank runs

Breadth & depthof service

On public, hybrid
and private cloud
platforms

On premiseIntegrated Report

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21

The Temenos banking capabilities are the broadest in the industry, enabling the construction of both end-to-end and specialized
point solutions.

Temenos banking capabilities: breadth and depth of service
RetailChannels

SME

Corporate

WealthMobile Banking

Web Banking

Hybrid Banking

Branch Banking

RM Workspace

Corporate Onboarding& Origination

Holdings

MarketingCampaigns

OrdersParty

Product Catalog

Relationship
Engagement

SME Onboarding &Origination

Retail Onboarding &Origination

Wealth Onboarding& Origination

Product & Pricing

Enterprise Pricing

Loyalty & Rewards

Open Products

Data & Analytics

Data Hub

Reference DataManagement

Market DataManagement

Analytics

Accounts

SME Loans

Corporate Loans

Payments Execution

Portfolio Management

Retail Deposits

Mandates

Trade Finance

Request to Pay

Securities

Retail Loans

Mortgages

Cash Mgmt. &Virtual Accts

Instant Payments

Corporate Actions

Inclusive Banking

Islamic Banking

Asset Finance

Payment Repair

Commissions

Collateral Management

Collections

Funds Authorizations

Treasury

SWIFT

Limit Management

Reconciliations

Customer Management

Smart Money Management

Smart Wealth
AdviceCorporate Models

Mortgage Smart Optimizer

Credit Scoring

Transaction
Management

Financial Crime Mitigation
ModelsFinancial Crime
Mitigation

Payment Fraud
Mitigation

AML Transaction
Monitoring

Customer Sanction& PEP Matching

KYC Customer
Risk Assessment

Transaction
Sanctions Filtering

Business Support

Accounting

Positions

Clearing

Payment Gateway

CRS Reporting

Customer Compliance

FATCA

Financial Risk
Management

IFRS Reporting

RFR

Tax

Digital Identity& Security

Wealth Management

Customer
Engagement

ServicingOperations

XAI Models

Risk &
Compliance

Regionalization

External
Ecosystem

Country Models

Digital Engagement

Payments & Cards

Regulatory &Compliance

PFM & Open Banking

Sustainability

Infrastructure

Temenos Capabilities & Offerings

Partner Ecosystem-Enabled Capabilities

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SOFTWARE AND PRODUCTS continued

Cloud native and cloud agnostic
A cloud-native and cloud-agnostic approachfor real-time, non-stop banking
Temenos provides banks with an architecture designed tosupport digital transformation and provide the flexible
experiences demanded by today’s digital customers.

Elastic scalability eliminates the need to provision for peakprocessing volumes so that banks only pay for actual usage,
yielding significant cost savings. Temenos’ cloud-agnostic
approach enables the highest levels of long-term resilienceand redundancy without creating a dependency on a single
cloud service provider. This is a key Temenos strategy andan answer to regulatory concerns.

Cloud native

Designed for the digital banking age, our software allows faster
updates, lower provisioning, lower infrastructure costs, elastic
scaling, active-active resilience and security. This is built using
API-first and DevOps principles and engineered to deploy incontainers and microservices.

Cloud agnostic

We are the only banking platform readily available on all maincommercial cloud platforms. With Temenos, institutions canalso deliver on premise, or adopt hybrid cloud deployment
patterns, all using the same underlying software.

Distributed event-driven architecture
The foundation for truly composablebanking services

Temenos’ banking capabilities are defined by their message
schema which ensures that they are loosely coupled throughan event-driven architecture. This means that the breadth ofcapabilities available on Temenos’ open platform can be
updated independently, eliminating the problems ofmonolithic solutions.
By delivering Temenos’ capabilities in this way, customers
can upgrade with ease and rely on the agility they need totransform step by step, deliver high-speed change andsignificantly reduce time to market and value.

API first

Temenos developer community

Our Open API catalog brings standardized out-of-the-box APIs
to fast track innovation, supported by Temenos experts and a
growing developer community with dedicated online supportand resources.

Extensibility framework

The extensibility framework enables banks, Partners andsolution providers to easily extend and configure solutions
for their business needs, whilst protecting the reliability ofTemenos software and the ability to upgrade seamlessly overtime. A low-code environment and tooling enhance thedeveloper experience and ensure consistency across thesoftware development lifecycle.

Continuous operations

The extensibility framework embeds DevOps to enablehigh-impact changes to be made frequently and predictably
with minimal toil. It enables continuous updates, continuous
integration and delivery and unmatched resilience that comeswith release validation tests provided with every capability
deployed and updated on the platform.
Continuous updates are a core tenet of cloud utilization.
DevOps teams delivering on continuous integration can
expedite project delivery timelines through self-service andself-management environments and tools, controlling the pacewith which development plans progress, from configuration to
full testing.
Embedded DevOps provides banks with the ability to manage,
configure and assemble Temenos software – either fully
deployed and supported by Temenos Banking Cloud, or
utilizing their own cloud infrastructure.

Increased stability

Temenos uniquely provides high-value release validation tests
as part of every banking capability delivered on the platform,
powering highly resilient updates and integrations for both
Temenos capabilities and pre-integrated third party solutions
on the Temenos Exchange. Banks can rely on the same continuous
integration and delivery processes Temenos uses internally –running hundreds of thousands of tests daily – to optimize
processes and workflows.

Temenos’ Open APIs allow banks to integrate quickly witha wide range of internal or external systems to help drive
product and service innovation.

AI and machine learning

Temenos’ Open APIs enable banks to execute strategies tothrive in an age of open banking and finance. Temenos’ approachenables banks to meet regulatory requirements such as PSD2,
through pre-defined APIs that meet published specifications
such as Berlin Group and STET. We enable banks and fintechs
to innovate at speed, with a growing developer community,
low-code integration resources and a complete catalog ofinteractive API endpoints to build innovative products andservices on top of our open platform and banking capabilities.

Temenos is the first to bring transparency and explainability to
AI automated decision making in the banking industry. Our
patented Explainable AI (XAI) platform and machine learning
capabilities are delivered on the Temenos banking platform
and are available with all Temenos software either through aneasy-to-use interface or through APIs delivered on premise, inthe cloud or as a SaaS offering.

Furthermore, banks benefit from the ability to enrich theiroffering to customers through the integration of new fintech
technologies using Temenos Exchange.
Temenos offers an API-first architecture across its entire
product range. This means that all significant product capabilities
are exposed as standard, documented Open APIs and thisforms part of the design and release process.

The most advanced next-generation Explainable AI andmachine learning enable banking products.

Explainable AI (XAI)

Temenos’ XAI platform addresses one of the key issues forbanks using AI applications, which is that they typically operateas “black boxes” offering little if any discernible insight into how
they reach their decisions. We bring cutting-edge innovation to
the banking industry by providing transparency into thesedecisions and helping explain clearly, in plain language, tocustomers and regulators how AI-based decisions are made.

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The Temenos Banking Cloud
B temenos.com/temenos-banking-cloud/Temenos has delivered market-leading and functionally rich
SaaS and cloud banking solutions to clients in all geographiesand banking sectors since 2011.
Our continued technology investment in this area led to thelaunch of the Temenos Banking Cloud in 2021.
Banks and financial services providers can now take an extremely
agile approach to innovations, exploring new ideas andinnovations, and then move to prototyping and into production
quickly and easily – safe in the knowledge that the solutions
are priced elastically and can continue to be developed uponwith real-world feedback. This makes innovation fast andcontinuous, further supported by continuous delivery,
integration and updates which ensure that the latest
capabilities and services are automatically delivered tocustomers on an ongoing basis.

Sector solutions
B temenos.com/solutions/retail-banking/23

Retail Banking
Temenos provides retail banks with agility and freedom
to innovate front-to-back using the latest cloud and API
technology and leveraging the broadest set ofcomposable banking capabilities.
Every institution which provides retail facilities, whether
they are a bank, a credit union, an embedded financeprovider, or an inclusive finance institution, focuses ondriving profitability and growth through the acquisitionof new customers and increasing the wallet share ofexisting customers. This requires a front-to-backapproach, complete with AI-driven customer insights
and a flexible product engine to offer customers more
personalized, relevant experiences and services,
embedded at the point of need.
Temenos’ Retail Banking capabilities include afunctionally rich, flexible and agile core processing
engine that enables institutions to offer personalized,
customer-relevant products, while allowing for lower
operational costs and increased ROE.
The Temenos Retail Banking solution helps ourclients to:⚫

increase cross-selling with an integrated productcatalog that helps to target products and new customers;⚫

get to market first with new products created quickly;⚫

create product offers and reward schemes that are
personalized and flexible;⚫

cover all Retail Banking product areas withbroad functionality;⚫

combine comprehensive capabilities easily to create
innovative and focused products;⚫

use data and analytics to understand clients andbusinesses better and produce more relevant offers;⚫

leverage the capability of existing core platforms,
whilst also extending the product design capabilities
in the bank;⚫

create personalized products which bundle
capabilities spread across multiple systems,
including those outside of the bank;⚫

connect and engage with customers and deliver
valuable personalized insights;⚫

accelerate Retail Banking growth by acquiring newcustomers and increasing the share of wallet via
digital sales;⚫

create frictionless, personalized and secure banking
experiences to increase customer satisfaction; and⚫

thrive in a world of embedded finance with digital
ecosystems and open innovation.

Whether a bank is a new start-up looking for its firstsolution, or a large-scale multi-country bank, thesoftware provides a solution which will enable it
to scale, onboard, reduce attrition and deliver amarket‑leading service to its customers.

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SOFTWARE AND PRODUCTS continued

Business Banking

Corporate Banking

B temenos.com/solutions/business-banking/B temenos.com/solutions/corporate-banking/Temenos provides banks which offer solutions for SMEs
and growing businesses with flexible account andlending services to enable businesses to thrive andscale to meet their goals.

The Temenos Corporate Banking solution, with its
scalable, innovative technology, provides superiorfeatures for corporate banks, supporting profitability,
customer acquisition and retention. Corporate andCommercial Banking customers can now benefit froma seamless digital solution that is equal to the leading
Retail Banking experience.

Every bank providing solutions for businesses of any
size needs to easily acquire new customers and allow
them to scale as their business grows. This requires afront-to-back focus for basic banking services plus theneed for lending facilities, complete with high levels of
AI-driven customer insight to help them manage theirbusiness better.
The Temenos Business Banking solution is an integratedbanking software solution for banks offering services tobusinesses of all sizes across the globe.
The solution helps our clients to:⚫

⚫

cover all SME and Business Banking product areas
with broad functionality for organizations of any size;
combine comprehensive capabilities easily to create
innovative and focused products that allow abusiness to grow;⚫

enable innovative pricing schemes for
distinct propositions;⚫

provide omni-channel experiences to their rangeof customers;⚫

accelerate SME banking growth by acquiring newcustomers and increasing share of wallet via asset
finance and digital lending;⚫

scale a business from a sole trader to a larger,
growing business; and⚫

give the business easy control over users and user
rights to ensure each individual is able to performtheir required role.

The solution provides a firm with insight about its
business, with the Smart Banking Advisor capability
offering intelligent insight into areas such as cash flow
predictions that can then help it manage the businessbetter. Using next-generation AI, our solutions canempower a business owner to make the right decisions
for the growth of their business.
Whether a bank is new to the SME segment, or alreadyoffering solutions, Temenos software will enable it toscale, onboard and service customers of all sizes
and industries.

Temenos’ Corporate Banking customers benefit fromincreased efficiency and profitability through:⚫

a full, complete, single solution;⚫

a transparent, single view offering a 360° view ofaccounts and facilities;⚫

agile, parameter-driven platform flexibility;⚫

a product builder to quickly create segment customer
level products;⚫

insight into customer profitability, loyalty, attrition
risk and number of products for targeting activity;⚫

a massively scalable, straight-through processing solution;⚫

comprehensive business functionality and a modern,advanced, secure, open and modular architecture; and⚫

an automated, digital solution without the need for
cumbersome paper-based processes.

Our solution is divided into three main areas:

Corporate lending

Temenos offers a complete solution for a bank’s
corporate lending needs. A comprehensive front-toback credit solution which extends from origination tofacility design and management provides for theefficient set-up of new facilities using the inbuilt pricing
grid and an extensible set of standardized covenants
and lending terms which can be applied at initiation orchange in the credit cycle. The solution supports bothbilateral and club loans and can be used to address
both the Business Banking and Corporate Banking sectors.

Cash management

Temenos provides a full set of cash and liquidity
management tools, ranging from traditional auto‑sweeping
and balance maintenance capabilities to virtual
account processing. These are accessed by means ofsophisticated user design tools, to make the process ofcreating and managing complex hierarchies easier andmore efficient.

Trade finance

There is support for a wide range of trade financeinstruments, enabling banks to provide a full service totheir customers which trade internationally.

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Wealth Management
B temenos.com/solutions/wealth-management-private-banking/An end-to-end, componentized solution empowering
wealth managers, private banks and their clients withthe latest technology.
With a strong client base, including some of the largest
global private banks, Temenos Wealth is the de facto
software solution for the private wealth management
industry. It provides differentiation with superior digitaland front-office capabilities, total cost reduction
through automation and cloud technology and theability to digitally transform firms through real-time,
front-to-back integration.
Temenos Wealth is an end-to-end solution covering allof a firm’s needs, from self-service channels to portfolio
management to back-office processing and market
data management. It is unique in its breadth and depth,with digital customer experience, hyper-personalized
services and highly automated processes that enable
our clients to service Ultra High Net Worth Individuals
and Mass Affluent clients alike. Its composable architecture,
available as a service or on premise, and the standard
integration to other Temenos solutions and the wider
Temenos ecosystem make it the ideal solution for firms
which seek to grow in a highly competitive environment,
while protecting their margins.
In a sector undergoing considerable changes, Temenos
Wealth helps our customers tackle the most urgent
challenges with substantial benefits:⚫

higher engagement through an exceptionalcustomer experience;⚫

growing revenue from differentiating investment
services and efficient portfolio management;⚫

lower costs with highly automated back-office
operations; and⚫

risk mitigation with enhanced data quality andregulatory compliance functions.

25

Fund Administration
Offering fund administrators, asset managers,
insurance companies and pension funds a complete
solution to thrive in the digital age and deliver greater
operational efficiency, improve control and oversightand reduce operational risk.
⚫

Supports investment book of record (IBOR) andfund accounting (ABOR) activity with a single,
global platform.

⚫

Sophisticated, highly automated workflow, to drive
enhanced scalability and efficiency.

⚫

Unique Explainable AI (XAI) enabled exception
management, to reduce false positives and enableaccounting team to clear exceptions more efficiently.

⚫

Leveraging the latest cloud-native, cloud-agnostic
technologies to scale with demand.

Islamic Banking
Temenos Islamic Banking is a flexible and efficient
award-winning solution, delivering an outstanding
Shari’ah compliant experience to customers using a
combination of digital and human interaction andleveraging advanced graphical product building
capabilities and modern technology to create
offerings that are compliant and personalized,
enabling digital transformation.
⚫

Compliant: fully compliant to Shari’ah requirements,
processes and account entries.

⚫

Comprehensive: covers all areas of banking with richfunctionality across all verticals.

⚫

Enables innovation: with faster time to market due
to its flexible product builder.

⚫

Digital: built on the best digital platform enablingbanks to face digital challenges and competition.

⚫

Scalable: up-to-date and future-proof solution
for banks of all sizes.

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RESEARCH AND DEVELOPMENT

Investment in innovation
The Temenos software investment approach forms a virtuous cycle in which ourclients influence Temenos’ investment and therefore benefit from the improved
product. This in turn contributes to their success. Our clients then advocate forour solutions, enabling us to attract new clients, continuing the cycle.

Revolutionary investment in technology
and architecture

In order to keep pace with the rapid rate of change in information
technology, Temenos continues to invest significantly to ensurethat its software takes advantage of the latest innovations.
What is revolutionary at one point becomes standard in thefollowing years and this approach ensures that our clients cancontinue to leverage the latest technology.

Evolutionary investment in banking functionality

Banking functionality changes more gradually than information
technology, with evolutionary advances being made in banking
products, industry practice and regulation. Temenos’ investment
in functionality over the past 29 years reflects this. We enable
our existing clients to add new functionality to what they use
already through regular updates, whilst also releasing thelatest software for new clients.
We also actively invest in growing our country specificfunctionality in conjunction with our regional specialist
Partner network. This enables banks to go live quickly andto focus on the capabilities which will differentiate themfrom their competitors. It also provides Temenos with a clear
differentiation in the market, successfully blending globally
innovative banking capabilities with pre-configured regionaland national solutions.

Responding to changing industry regulationand trends

Banking, being a highly regulated industry, is subject to thecontinuous changing of requirements by regulatory agencies.
At Temenos, we actively follow changes in banking practice
to build relevant solutions into the software and support ourclients which automatically receive updates with our continuous
updates mechanism. This program runs on a global basis,
allowing us and our clients to quickly respond to changing
practices at speed.

Responding to digital acceleration

We respond to the continuing and increasing drive towards
digitization with new offerings to help banks and non-banks
to service their customers better. Our AI and data analytics
technologies enable increasingly automated and personalized
offers to be designed and rolled out. These same technologies
help with operational efficiency and stability and have been
increasingly embedded across all of our solutions. Cloud adoption
has also accelerated, bringing the benefits of scalability, lower
cost and increased reliability. We have also responded to new
trends such as the rise of unsecured short-term lending andembedded finance, by delivering banking services such as
Embedded Finance on the Temenos Banking Cloud, to help
rapidly respond to new growth opportunities.

Continuous operations

Temenos builds, deploys and tests software on a daily basis.
We use this as the foundation for the continuous release of
updates to clients, which are then accumulated into one
annual maintenance release each year. All releases are
cumulative, enabling clients to upgrade when they want.
The upgrade process is designed to operate with minimal
disruption to a bank’s staff and customers.

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27

The highest R&D spend
in the industry
R&D at more than twice the level of our competitors plus deep
domain knowledge mean that our software never becomes legacy,
with approximately 20% of revenue invested each year in R&D.

$3.1bnOver
950

R&D investment
1990-2023

core banking
clients

Over
600

>150
countries

digital clients

1993

2003

2011

2020

2021

2022

Packaged
upgradable
open

Multiplestack
support

Cloud
ready

Cloud-native,
cloudagnostic XAI

Cloud-native(all products)

Open
platform forcomposablebanking

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RESEARCH AND DEVELOPMENT continued

The highest R&D spend in the industry continued

Investing more than our peers on R&D

Temenos has consistently invested over 20% of its revenues in
R&D. This is more than twice the level of estimated investment
made by our closest competitors. Furthermore, since we only
produce software for banking and finance, all of thisinvestment is targeted at our concentrated product portfolio.

Channeled continuously into product releases

Our software is fully packaged and upgradeable. We produce
new software on a continuous basis which has traditionallybeen available on a monthly release cycle. This will continue tobe available, together with an annual release, for clients whichwish to consume our software on this basis. We also make oursoftware available on a Continuous Deployment basis, with
DevOps support, for banks to help them to shorten theinnovation cycle as part of our SaaS solution set. The increasing
componentization of our solutions also creates the possibilityof adding different elements to already deployed solutions,allowing for innovations to be more quickly adopted and newmarket opportunities to be addressed.

Core principles

Temenos has always produced software according to a setof core principles. We believe in reuse, openness and being
agnostic about technology platforms. This means that all
developments are made available to all clients. It also means
giving our clients choice over which technology they run andnever locking them into a particular provider. The openness
means that third parties can develop on our platform toaccelerate innovation, thus ensuring that our clients always
have access to the best technology and functionality.

Proud record of innovation

Our philosophy is one of constant functional evolution delivered
on innovative technology. We are proud of the record of innovation
which we have established, being, for example, the first banking
software vendor to run on open systems, the first to have atruly 24x7 platform, the first to run core banking software in
the public cloud and the first to have all services exposed as
REST APIs and domain microservices. Our cloud-native solutions
continue to benefit from ongoing innovation, with particularfocus currently on key areas such as Artificial Intelligence,
DevOps processes to help our clients benefit from innovations
more quickly and a growing catalog of Open APIs which enable
faster and more easily maintained integration between oursolutions and third party products and services, including
those found in Temenos Exchange.

The Temenos Exchange
Driving innovation through a thriving
fintech ecosystem

The Temenos Exchange is a collective engine of innovation.
Customers need easy access to low-risk, pre-integrated
solutions which not only address their fundamental needs,
but also provide inspiration to continue to innovateand differentiate.
The program has an evolving membership made up of many
third party specialist solutions, covering all areas of banking
and financial services, ranging from Wealth Management
to Sustainability to Digital Assets. The resulting breadth ofinnovation powers ongoing growth and opportunity forour clients.
Additionally, we continue to focus on pre-integrating solutions
by establishing a dedicated integration team which is building
standard integrations that are architected to be robust,
scalable, repeatable, pluggable and supported by packaged
APIs and events.

Temenos developer community
Banking’s largest collaborative community
empowering the developer ecosystem
B temenos.com/community/temenos-developer-community/

The Temenos developer community plays an essential role inenabling our customers, prospects and Partners with expert
support, learning programs and a calendar of interactive
events designed to help our members scale. Our rapidly
growing developer community is united by a common desire
to learn and innovate – a desire that we foster through ouraward-winning Base Camp community platform.
Through the sharing of knowledge and a focus on developer
experience, we are empowering the developer community toconstantly evolve and innovate and to leverage our market‑leading
technology to enhance the banking experience for our millions
of end-users.

Temenos AG Annual Report and Accounts 2023

Integrated Report

PARTNER FIRST DELIVERY

Focusing on execution andreturning to profitability
The execution of the Partner First strategy in 2022 has continued in 2023
and brought the expected benefits in the long term: Temenos’ delivery risk
is reducing and the margin value of Temenos Services is increasing backto a sustainable and positive profit. With the expertise of Temenos Services
collaborating with Partners able to provide scale of both capacity and capability,
the trend of successful go-lives continued through 2023, with a growing numberof customers moving to production on the Temenos SaaS platform.
The Partner First strategy consists of encouraging ourcustomers to contract directly with Partners to deliver
implementation and upgrade projects. Temenos is supporting
both customers and Partners by offering a suite of
Packaged Services. Having provided options with regards tosuitable Partners, Temenos retains a critical role
throughout the lifecycle of the project by delivering
governance to clients through the Temenos ProjectConsultancy Services (TPCS) and support to Partners fromthe Collaborative Implementation Offerings (CIO). In 2023,
this offering has been extended to propose dedicatedTemenos spine teams (group of experts and specialized
senior consultants) to larger customers.
A group of 20 Strategic Delivery Partners has been identified,making it possible for Temenos to focus efforts and support
the most successful and investing business allies. Special
events, training and sharing knowledge facilities have thenbeen developed to enable the right Partner pool. Thosecompanies are consequently better scaled, and theirconsultants better prepared, for delivering Temenos
solutions in all geographies.

With the evolution of Temenos products and technologies,
the Temenos Learning Community is continually updating
the training content to ensure that clients, Partners andTemenos consultants stay up to date with the latest
version of our software. The Temenos Knowledge Center(TKC), launched in September 2022 as a platform to shareknowledge and lessons learned to Temenos internalServices staff, has been opened in November 2023 forStrategic Partners to contribute.
In 2023 Temenos Services has extended the spectrumof its offering to live clients. New productized offerings –pre‑defined scope services packages – have been built,
bringing high value to existing customers running Temenos
solutions in production. On top of generating a new stable
and controlled source of Services revenue, this model
participates in the Company’s effort to support the successof Temenos customers in a long-term trusted business
relationship.

29

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PARTNER FIRST DELIVERY continued

Collaboration withenabled Partners todeliver customer success

We continued our commitment to collaboratively working with our Partners todeliver successful projects to our mutual clients throughout 2023. The support
offered to our Partners was further developed in 2023 and has led to an increasing
number of Partner-led projects and successful go-lives and an increased focus ondelivering SaaS engagements.

The Temenos Delivery Partner ecosystem comprises over 50
Partners able to offer a vast array of differing services to ourclients. To reflect the diversity of the organizations in the
IMPACT Program, Temenos has identified 20 Strategic Delivery
Partners which offer implementation and upgrade services atscale supported by large Temenos practices. The engagement
and enablement of these Strategic Delivery Partners aresupported by dedicated Temenos resources and in addition are
also offered access to the knowledge sharing platform and amembership of the Temenos Partner Advisory Board. The
remaining 30 Delivery Partners offer specialist niche services
to either a dedicated local market or a specific Temenos
product set such as data or financial crime.

The Temenos strategy supports Delivery Partners to directly
contract with clients and prime the delivery of Services
complemented by Temenos packaged offerings rather thansubcontracting via Temenos on a back to back basis, a practicethat was stopped in 2023. The Temenos Packaged Services areeither for clients in the form of Governance (TPCS – Temenos
Project Consulting Services) or spine teams (a dedicated teamof Project Management and Architect resources) and Partners
via the Collaborative Implementation Offerings to assist withproject delivery.
Ongoing execution of the Partner strategy by Temenos allows
us to recommend suitable Partners for planned client engagements
using the certification badges issued that cover product,function and regional knowledge. 2023 saw yet anotheryear-on-year increase in the number of Partner-involved
go-lives.

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31

The focus for
Temenos Services
Our global services team is the linchpin for translating vision into reality.
Collaborating seamlessly with Delivery Partners, our skilled professionals
orchestrate successful implementation of cutting-edge solutions for our clients.

Model Bank Platform Approach (MBPA)

To keep clients abreast of technological advancements andexperience faster implementation, Temenos has revamped its
strategy from traditional end-to-end to package-based
implementation called a Model Bank Platform Approach(MBPA). It involves initiating with a minimal model bankinstallation, incorporating prescriptive customer-specificfeatures. This cost-effective approach has assisted clients inquick implementation of the most important user journeys
based on client requirements. This client-centric approach has
also empowered client teams to drive transformation andcustomization efforts either independently or collaboratively
with Partners. These implementations are facilitated throughPackaged Services along with the solid Client Enablement
which enhances the expertise and accelerates the projectdelivery. This approach has provided systematic and effective
approach to clients in implementing the Packaged Services inan organized manner and established a clear pathway for
project success by emphasizing pre-requisites, activities,
validation and exit criteria.

Productized Services

Also, to support our live clients, we have been successfully
delivering a range of Productized Services, especially the suiteof upgrade services. These Productized Services are meticulously
crafted providing standardized packages designed to address
the requirements of existing customers to ensure they arealways ahead of the game and in time. The footprint of
Productized Services has significantly grown last year throughstrategic campaigns.

Services Development Managers (SVDM)

To enhance the customer experience, Temenos has introduced
Services Development Managers, which are client-focusedexperts who collaborate closely to facilitate client transformations
in line with Temenos technological advancements. SVDM are
instrumental in fostering client success and enhanced
operational efficiency, and ensuring the organization remains at
the forefront of technological advancements, thereby
contributing to long-term growth and sustainability. Working
internally, SVDM strategically develop a profitable services
pipeline, emphasizing the distinctive advantages of Temenos
Packaged and Expert Services.

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PARTNER FIRST DELIVERY continued

Implementation excellence
for world-class cloud services
During 2023, we focused heavily on upskilling our services team in our own
hosted SaaS solution as well as giving our Senior Architects the opportunity
to learn about all cloud hosting technologies. This involved all of our services
team undertaking our internal SaaS/cloud training via the Temenos Learning
Center so that everyone in Services has a foundational level for SaaS. The
Architects went through the more detailed Technical and Functional Modules
to gain a deeper understanding of our solutions.

In addition to our own cloud training we also
provided 125 of our Senior Architects with paid
licenses to third party technology training content
to enable them to dive deeper into cloud hosting
solutions from AWS, Azure and Google Cloud andalso the technologies enabling these solutions suchas Kubernetes, OpenShift, Red Hat and Python plus
many others. This training will continue throughout
future years as a process of continual learning.

During the year we set up a team of Global Services
Solution Owners (GSSOs) who, in addition to their
Client Delivery role, will also act as a single pointof contact between the Services and other teams
within Temenos to share knowledge, and feed backareas for enhancement and improvement of oursolutions. During 2024 this will be extended toeach region via Regional Services Solution Owners(RSSOs) so that we have a full coverage and a
two-way feedback process within Services andother parts of the business.

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33

Temenos Learning
Community
Temenos Learning Community (TLC) has been a cornerstone in addressing theescalating product training demands of Temenos professionals (clients, Partners
and independent consultants) since its establishment in 2017. This year, TLC
continued its growth, showcasing advancements in learning products such as TLC
Online, TLC Engine and TLC Classroom, thereby reaffirming its status as the premier
global provider of Temenos product training. By utilizing TLC, a subscriber benefits
from a proven learning methodology that is easier, faster and more cost effective.

TLC Online

TLC Online is a cloud-based, Learning Management System
offering self-paced product training courses on a 24/7 online
basis. Subscribers enjoy access to the latest product content,
practice sandboxes and pre-defined learning pathways. TLC
Online also provides the training foundation and roadmap toachieve the industry-recognized Temenos certification.
In 2023, TLC experienced a remarkable 20% growth in paying
members, reaching almost 5,500 subscribers (Partners andclients). Currently, an increasing number of individuals outside
Temenos hold a Temenos certification, marking an 18% riseover the previous year. Moreover, 13 Partners have leveraged
TLC Online to become certified at the organizational level.

TLC Engine

TLC Engine, an online tool for process mapping and training,incorporates Temenos product processes. It allows customers
to train, test and internally certify their end-users quickly andon an ongoing basis. Available in an on-premise version or as a
SaaS solution, TLC Engine provides our clients with a process‑led
learning solution and the option to integrate their uniqueoperating processes into the Temenos product processes.
All Temenos customers can now access Temenos productprocesses through a cloud instance of TLC Engine.

TLC Classroom

TLC Classroom, our traditional instructor-led training,
maintained its popularity in 2023, with over 700 courses
delivered to approximately 8,700 trainees. TLC Classroom canbe tailored to a client’s specific needs, either in an in-person or
remote classroom environment. Although the travel restrictions
related to Covid-19 have been mostly removed in 2023, remotedelivery remains a very popular, cost-effective choice withmany Partners and customers.
TLC Classroom is aligned with the standard courses available
through TLC Online, while offering an alternative learning
approach for specific teams through the curated delivery ofcourses in a live session which includes hands-on practice
exercises in a test environment. Additionally, TLC offers a
related service to assist clients in developing a more formal
training strategy and to ensure that the correct level and typeof training is targeted. The Training Needs Analysis (TNA) is alimited engagement that creates a learning roadmap basedon individual user roles.

TLC’s overall commitment to timely product updates and the creation of new training content, guided by our continuously updated
training roadmap, ensures that TLC is a vital resource for Temenos clients and Partners. Again in 2023, this was confirmed by the
positive feedback and evaluations received from participants.

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SUSTAINABILITY

Thibault de Tersant
Non-Executive Chairman

Fosteringsustainability
throughtechnology

Andreas Andreades
Chief Executive Officer

Introduction
34 Fostering sustainability through technology
36 Innovating with purpose
37 Achievements and endorsements
38 Progress and targets
39 Our ESG approach
40 Preparing for CSRD
41 ESG double materiality assessment
45 EU Taxonomy
46 Goals and targets
51 Sustainability governanceOur sustainability approach
52 Achieving Business Excellence
56 Operating Responsibly
69 Caring for the Planet
86 Investing in Our People
109 Empowering Our Local Economies
and Communities

Appendix
121 About this report123 Independent assurance report
125 Stakeholder groups
127 Contribution to the UN Sustainable
Development Goals
130 UN Global Compact Index
131 GRI content index
138 Disclosures in accordance with Art. 964b
Swiss Code of Obligations
139 International standards and certifications

Temenos AG Annual Report and Accounts 2023

Integrated Report35

We are leading the market globally in termsof Environmental, Social and Governance (ESG) having
embedded ESG into our operations and product offering.

In 2023, Temenos celebrated a major milestone as we turned
30 years young. While this was a moment to celebrate ourorigins and history, it was also a chance to celebrate who andwhat we are today. Ours is a story of human endeavor, poweredby the desire to do something different in the world of banking
software. It is also a story of creating sustainable ESG value forall our stakeholders, which in today’s world of complex andpressing global challenges is more urgent than ever.

Our ESG approach also requires us to run our own operations
ethically and responsibly. We have a strong corporate
governance and risk and ethics framework in place, as
evidenced by the results of the thorough investigation
done by independent examiners following allegations
from Hindenburg. We have set science-based targets to
reduce our GHG emissions by 2030 and remain alignedwith the Paris Agreement.

Sustainability makes clear business sense for Temenos. It is
now a C-suite and Board-level issue for our clients and a focus
for their own clients and investors. It is embedded deeply into
due diligence, compliance and regulatory requirements, andalso offers cost savings and other financial benefits that comefrom operational efficiencies tied to sustainability.

We are very proud of Temenos ESG performance, and therecognition we have gained as the leader in ESG in the IT
industry. We have now topped the Dow Jones Sustainability
Index with the highest score in the software industry for thesecond year running. This is alongside similarly high rankingsfrom S&P, FTSE4Good, MSCI, ISS, Sustainalytics, CDP, EcoVadis
and the SXI Switzerland Sustainability Index. This recognition
demonstrates our commitment to sustainability, and thepositive impact we make by supporting our clients to achieve
their ESG goals and transition to a low-carbon economy.

But it is more than that; ESG is essential for realizing our vision
as a company to “make banking better” by helping the industry
address the biggest challenges in our world. Banking is an IT
intensive sector, whose dependence is increasing with pressure
to deliver new digital offerings, process growing transaction
volumes, leverage new technologies such as Artificial
Intelligence and maintain vast data repositories. By migratingbanking operations to cloud and SaaS, banks can significantly
reduce their environmental impact and operate in a moresustainable manner. Banks running on our cloud-based
platform are getting very substantial carbon emission savings
compared to on-premise IT infrastructures.
As Temenos leads the transition to SaaS, we therefore have aunique and inspirational opportunity to help decarbonize thebanking industry. We are further accelerating this journey in2024 with our new end-to-end SaaS Enterprise Services and
LEAP, a new AI-powered offering that helps banks modernize
faster and to seamlessly and quickly move to the latest
cloud-native Temenos technology. In addition, we continue toimprove the energy efficiency of our code to minimize its
environmental impact by 32% in the latest software releasevalidated by GoCodeGreen.
Helping our clients achieve their ESG ambitions is only possible
through our people, our bold and committed Temenosians.
Our diversity is our strength, and the basis of our working
model for every one of our 30 years in business. We represent
86 different nationalities, working with clients and Partners
from over 150 different countries. Women make up 35% of
STEM positions, 46% of our workforce under 30, 50% of our
top management and 38% of our Board of Directors. This issignificantly ahead of our industry, and in 2023 we achieved aperfect 100% disclosure score in the Bloomberg 2023 Gender
Equality Index (GEI) for the second year in a row.

Three decades ago, Temenos set out to redefine banking
software, and in doing so forever changed the way banking
works. It means that today we are shaping the banking world
and driving positive change with sustainable value. By helping
the industry decarbonize, we now have the opportunity toaccelerate positive change and “make banking better” fordecades to come. It is a challenging vision, but the pioneering
spirit, innovative thinking and strong commitment of ourpeople that underpinned our achievements so far will drive us
forward towards future success.
The 2023 Sustainability Report details our progress towards
these bold and exciting ESG commitments.

Thibault de Tersant
Non-Executive Chairman

Andreas Andreades
Chief Executive Officer

Integrated Report

36

Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

Innovating with purpose
Our priority areas

For 30 years, our commitment to the SDGs have guided the way we operate internally, innovateand deliver on our business mission. Our corporate responsibility and sustainability strategy
focuses on mitigating risks and creating value across priority ESG areas towards five directions:

1
2
3
4
5

Achieving Business Excellence

We innovate with purpose, championing
client-centered design and support, outstanding
business practices and long-term sustainablevalue.

SDGs

B Read more on page 52

Operating Responsibly

We steward stakeholder trust by taking
responsibility for our business’ ethics,
procurement and security.

SDGs

B Read more on page 56

Caring for the Planet

We commit to aligning our business with thevision of a net-zero world by collaborating with
our stakeholders across the value chain.

SDGs

B Read more on page 69

Investing in Our People

We strive to create an open, fair, equalopportunity and honest work environment forour people and for the people who we impact
through our work.

SDGs

B Read more on page 86

Empowering Our Local Economies
and Communities
We contribute to a more inclusive world by
investing in our local communities, whileproviding equitable and affordable financial
services to all.
B Read more on page 109

B Read more in the Appendix: Contribution to the UN Sustainable Development Goals

SDGs

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37

Achievements
and endorsements
World Economic Forum (WEF)
Member

UN Global Compact (UNGC)
Participant

Global Compact Network
Switzerland
MemberSXI Switzerland
Sustainability 25® Index

Signatory

DJSI World & Europe, ranked #1
in the SOF category globally

Low risk – Top rated

Participant for 3rd consecutive year

3x Sustainability Award Winner,
2023 S&P Global Gold Class

Top 10%

Top 1%, Platinum medal

Top performer

Highest rating

Supporter

Early adopter

Highest rating in all ESG categories

Prime status

Top 20%

B Read more here: Our Achievements

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SUSTAINABILITY continued

Progress and targets

Environment

SocialGovernance2023 progress

2023 progress

2023 progress

Reduction of absolute Scope 1,
2 and 3 GHG emissions vs SBT
2019 baseline year

Gender diversity inglobal workforce

Gender diversity inBoard of Directors

31.3%
86%

Use of renewable electricity in
Temenos internal operations73%

ISO 14001:2015 certification
coverage

35%

43%

Racial diversity in the US

46%

Gender diversity under
30 years old

38%

40%

Gender diversity in
Executive Committee

50%

Gender diversity in
top management

99%

Employees completed EthicalBusiness Code of Conduct andmandatory compliance trainings

Targets

Targets

Targets

Reduction of absolute Scope 1,
2 and 3 GHG emissions by
2030 vs 2019 baseline year
(officially validated near-termscience‑based target)

Gender diversity in global
workforce by 2025

Gender diversity in Boardof Directors by 2025

50%

Net-zero

GHG emissions by 2050

8 offices

With ISO 14001:2015
certification by 2025

36%

40%

Gender diversity in global
workforce by 2030

40%

Racial diversity in the
US by 2025

30%

>97%

Completion rate of EthicalBusiness Code of Conduct andmandatory compliancetrainings by 2025

ESG targets

In Executive compensation(planned)

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Our ESG approach
Our mission:

Making banking better, together

Founded in 1993, we serve clients from the largest to challengers
and community banks in more than 150 countries by helping thembuild new banking services and state-of-the-art client experiences.

Our vision:

Everyone’s banking platform
Our purpose is to power a world of banking that creates
opportunities for everyone.

Our culture:

Temenosity

Our culture of Temenosity guides the way we work. A culture thatencourages all of us to challenge convention and commit to
making banking better together. A culture that enables us tocollaborate with our community and truly care about the people
we serve and the impact of our business.

Our commitments

Operating responsibly is in our DNA, part of our Temenos culture.
We strongly believe that our long-term success requires asustainable business model that incorporates responsibility as animportant part of our business operation. Temenos is committed
to achieving business excellence and long-term value throughsuperior financial performance while operating responsibly andwith integrity, honoring ethical values and respecting its
stakeholders, communities and the environment.

Integrating ESG into our operations and product offering
What it means to us:

Helping our clients transform into
smart, inclusive and sustainableorganizations

Managing our operations ethicallyand responsibly

Contributing to global social andenvironmental initiatives

Our goal
To grow our businessin a way that takes
care of the world around us,
delivering value toanyone associatedwith us39

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SUSTAINABILITY continued

Preparing for CSRD
As part of the European Green Deal, the Corporate Sustainability Reporting Directive (CSRD) entered into
force on 5 January 2023 with the main goal of revising and strengthening the previous rules concerning
sustainability reporting. The European Sustainability Reporting Standards (ESRS) define disclosure
requirements encompassing the complete range of environmental, social and governance topics
and were developed to have a very high level of interoperability with other global standards.

With the objective of achieving fullcompliance with the new EU Directive,
in 2023, Temenos conducted acomprehensive gap assessment
aiming to identify in detail the
Company’s current non-financial
reporting status regarding all ESRS
requirements. The gap assessment
covered all topical standards and the
ESRS 2 and encompassed threedifferent steps.

1) Build an in-depth understanding of the ESRS requirements:
Temenos considered the overall architecture of the ESRS standards, its
fundamental concepts, the general requirements for preparing and presenting
sustainability-related information and the full list of disclosure requirements.
Temenos conducted a mapping exercise of its current status against therelevant applicable ESRS requirements, after examining the existing sustainability
information, current reporting practices and connected environmental, socialand governance-related policies.
2) Identification of the gaps and conclusions:
The gap assessment was conducted at Disclosure Requirement (DR) level
and covered all ESRS standards, highlighting per area (General Disclosures,
Environmental, Social and Business Conduct), the number of requirements
which were assessed as addressed, partially addressed or not addressed.
Temenos identified gaps in its current reporting compared to ESRS requirements.
The majority of Disclosure Requirements of Temenos ESRS material topics
were assessed as partially addressed (74.6%), with 11.1% assessed as alreadyaddressed and 14.3% as not addressed.
3) Definition of the implementation plan:
The results of the analysis allowed Temenos to develop a roadmap which
includes engaging different stakeholders to examine the identified gaps and define,in collaboration with the global ESG team, a detailed action plan to address
discrepancies and bridge the current gaps for meeting the ESRS requirements
within 2026 (see Temenos planned CSRD implementation roadmap below).

January
CSRD enteredinto force

CSRD

2023

December
Double materiality
in line with CSRD
and CSRD gap
assessment

2024

July
European Commission
adopted first set ofstandards as delegated act

Reportstructured inline with CSRD

All gaps on KPIs/
metrics for material
topics closed

2025

2026

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41

ESG double materiality
assessment
Stakeholder engagement
Stakeholder groups

Priority areas

Employees
Frequency: daily

Investing in Our People
Empowering Our Local Economies and Communities
Caring for the Planet
Operating Responsibly

Clients
Frequency: daily

Achieving Business Excellence
Operating Responsibly
Caring for the Planet

Investors – research analysts
Frequency: weekly

All priority areas

Suppliers and Partners
Frequency: daily

Operating Responsibly
Caring for the Planet

Local communities and NGOs
Frequency: monthly

Empowering Our Local Economies and Communities

Academic community
Frequency: daily

Investing in Our People
Empowering Our Local Economies and Communities

Media and industry analysts
Frequency: daily

All priority areas

Engaging with our key stakeholders informs our decision
making, strengthens our relationships and helps us deliveron our commitments and succeed as a business. In orderto achieve our goals, we recognize that we need to workin partnership with those stakeholders who share ourcommitment and support our targets.
We believe that regular, open and transparent communication
with our stakeholders is the most effective way to assess
the impact of our operations and our performance as acorporate citizen.
Such engagement with our stakeholders is helping us:⚫

define our ESG focus areas;⚫

incorporate them into our corporate strategy;⚫

set targets; and⚫

document the progress in the Temenos Annual Report.

B For a more detailed view of how we engage with our stakeholders and what
their key concerns are, please refer to the appendix

Temenos conducts at least bi-annually ESG materiality
assessments with input from experts across theorganization and within ESG governing bodies to identify
key ESG topics, opportunities and risks associated with them.
These assessments allow us to enhance our understandingof issues that require our attention, adopt a more dynamic
approach and improve our long-term economic,
environmental and social performance.
The world constantly changes, and we strive to stay aheadof these changes. This is why in 2023 we have collaborated
with an independent third party to conduct a comprehensive
double materiality assessment, following the requirementsof the Corporate Sustainability Reporting Directive (CSRD)
and the European Sustainability Reporting Standards(ESRS) framework.
In addition, the latest developments, trends and challenges
in the broader socio-economic environment in which Temenos
operates were taken into account, as well as a range ofinternational and industry-specific sustainability standards,
initiatives and data sources, such as the GRI Standards, theSASB reporting standards, the Task Force on Climate-Related
Financial Disclosures (TCFD) and the ten principles of the UN
Global Compact (UNGC).

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SUSTAINABILITY continued

ESG double materiality assessment continued

Process to determine material topics

Step 2: Material impact identification

Step 1: Contextualization and mapping

Step 3: Assessment of financial risks
and opportunities

The materiality analysis has emerged as a cornerstone ofeffective ESG reporting; hence, Temenos performed the double
materiality assessment according to the ESRS requirements.
This exercise allowed the Company to identify the mostsignificant positive or negative impacts resulting from its
activities on the environment and people, including humanrights, as well as the financial risks and opportunities
associated with its own activities, upstream and downstream
value chain, and business relationships. Four main steps were
followed in this process, to understand and address the mostcritical issues that shape Temenos sustainability performanceand financial success:Temenos assessed industry-specific disclosure frameworks
and benchmarks with peers, suppliers and clients to identify
ESG topics commonly linked with our sector. This informed
the development of a preliminary list of material topics.
The Company’s previous efforts and double materiality
assessment exercise also contributed to the definition of these
topics. Additionally, we considered the list of sustainability
matters outlined in the ESRS as part of topic selection.
This phase also involved a comprehensive assessment ofour key stakeholders, considering their interests and influence
on Temenos’ ESG topics.

We engaged with internal and external stakeholders to
identify material impacts, risks and opportunities. A survey
instrument was employed to capture impacts acrossenvironmental, economic and societal dimensions, classifying
them as positive or negative, actual or potential. The insights
gained from this stage supported the assessment of theirsignificance. This allowed Temenos to define the relevanceof each material topic through a scoring methodology.
The impact’s significance assessment is based on theimpact’s severity, which encompasses scale, scope andirremediable character 1.

A qualitative and quantitative analysis of financial risks
and opportunities was conducted to assess their magnitude
and likelihood.

Step 4: Double materiality results

The determination and adoption of the threshold forconsidering the relevance of the topics was part of the final
step. This enabled Temenos to confirm the double materiality
results and define the Company-specific material impacts, risks
and opportunities to be covered in its Sustainability Report.

Scoring and evaluation

Based on the industry-specific context, market analysis and benchmark, and considering the ESRS list of sustainability matters,a preliminary list of 21 topics for Temenos double materiality assessment was developed. The list has been assessed throughout
the process so, as a result, the actual material topics were defined based on scoring.
By completing the double materiality assessment process, we identified the topics that are most important to our sustainability
performance and prioritized our efforts accordingly. This process consisted of two main steps:

Impact materiality

Financial materiality

Stakeholder engagement: Conducted a survey to gather
feedback from internal and external stakeholders.

Survey outcomes review: Reviewed and corroborated
the findings regarding financial risks and opportunities.

Topic categorization: Classified material topics
considering whether they have an impact on theenvironment, people or the economy.

Impact assessment: Assessed the impacts associatedwith the Company’s dependencies on natural, social or
human resources.

Impact categorization: Categorized impacts into two
categories: positive/negative and potential/actual.

Topic assessment: Categorized material topics asfinancially material based on magnitude and likelihood.

Likelihood assessment: Assessed the likelihood of each
impact, ranging from very likely to very unlikely, and not
applicable for actual impacts.

Magnitude assessment: Assessed the magnitude ofeach material topic, ranging from very high to very low.

Significance assessment: Rated each impact basedon its severity, which is defined by the scale, scopeand irremediable character, ranging from very highto very low.
Impact score calculation: Computed the impact scoreby multiplying the impact significance score by the
impact likelihood score.

Likelihood assessment: Assessed the likelihood of eachmaterial topic, ranging from very likely to very unlikely.
Risks and opportunities score calculation: Computed
the risks and opportunities score by multiplying themagnitude factor by the likelihood factor.

1	Scale pertains to the severity of negative or positive impacts and may vary based on compliance with laws, regulations or authoritativeintergovernmental instruments. Scope determines the impact spread among individuals or environmental resources. Irremediable charactermeasures the difficulty in mitigating resultant harm, exclusively applicable to negative impacts.

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43

In addition, we enhanced our materiality assessment methodology by incorporating the feedback received from our clients
through RFPs and supplier assessments and from our investors through engagement calls and meetings we had throughout theyear. We also incorporated the areas against which we are rated and scored in ESG ratings and indices, such as the Dow Jones
Sustainability Index, FTSE4Good, MSCI, ISS, EcoVadis, Sustainalytics, Vigeo Eiris, Bloomberg Equality Index and CDP, among others.

Results

Following the outlined ESRS process, and evaluating the outcomes of the interviews with internal and external stakeholders, wehave identified 21 material topics.
The impact materiality assessment process enabled Temenos to identify that out of the 21 topics considered material to theorganization, 12 are recognized for promoting a positive impact on one or more dimensions (environment, economy and people),while 9 topics were identified as having the potential to cause a negative impact on one of these dimensions.
The financial materiality assessment supported the process of identifying which of these 21 material topics are associated withfinancial risks and opportunities for the organization. We identified 7 financial opportunities and 14 financial risks to which
Temenos is potentially exposed.
As a final step, the double materiality score was calculated considering both impact and financial materiality assessments.
The threshold definition and adoption determined which of the impacts will be covered in Temenos’ Sustainability Report.
The topics assessed with a double materiality score of “very low” will still be addressed/considered, but will not be part ofTemenos disclosures. As a result, 11 material topics, 7 ESRS and 4 Company-specific, will be included in the double
materiality assessment matrix.

Double materiality assessment matrix

The double materiality assessment matrix plots the results of the assessments previously described in the form of a graphic visualization,
indicating the main material issues per priority strategic area for Temenos. The matrix shows topics spread through two axes, the impact
materiality and the financial materiality. The position of the topic in the matrix is determined by the topic’s score (very low to very high).
VERY HIGH

Key
Achieving Business Excellence3

Client satisfaction and engagement

2

Technology and product innovation

Caring for the Planet
8

IMPACT MATERIALITY

1

9

6

4

10
1

7

3

Climate change mitigation

4

Energy5

Climate change adaptation

Investing in Our People
6 	Equal treatment and equal opportunities

2

for all (within Temenos’ own workforce)

5

Very high7 	Working conditions (within Temenos’

own workforce)

11

Operating Responsibly

LOW

8
Low
LOW

Outside Temenos

MediumFINANCIAL MATERIALITY

Within andoutside TemenosHigh
VERY HIGH

Within Temenos

Information security and data privacy

9 	Corruption and bribery
10

Business continuity

11

Responsible procurement

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SUSTAINABILITY continued

ESG double materiality assessment continued

Double materiality assessment matrix continued

The detailed results of the double materiality assessment are presented in the following table:
Impact on society
and environment

Financial
impactMetric type

Impactscore

DoubleFinancial materiality
score
score

Material issues

ESG priority area

Client satisfactionand engagement

Achieving Business
Excellence

Positive, Actual

Opportunity

Company-specific topic

MediumLow

MediumTechnology andproduct innovation

Achieving Business
Excellence

Positive, Actual

Opportunity

Company-specific topic

Low

Low

MediumClimate change mitigation

Caring for the Planet

Negative, Actual

Risk

E1 climate change

High

Very low Medium

EnergyCaring for the Planet

Negative, Actual

Opportunity

E1 climate change

MediumVery low Low

Positive, Potential

Climate change adaptation

Caring for the Planet

Risk

E1 climate change

Low

Very low Low

Equal treatment and equal
opportunities for all (within
Temenos’ own workforce)

Investing in Our People Positive, Actual

Opportunity

S1 own workforce

MediumVery low Medium

Working conditions (within
Temenos’ own workforce)

Investing in Our People Positive, Actual

Risk

S1 own workforce

MediumVery low Medium

Information-related impacts
for consumers

Operating Responsibly Negative, Potential Risk

S4 consumers andend-users

High

High

Very highCorruption and bribery

Operating Responsibly Negative, Potential Risk

G1 business conduct

HighMediumHigh

Business continuity

Operating Responsibly Negative, Potential Risk

Company-specific topic

MediumMediumHigh

Responsible procurement

Operating Responsibly Positive, Actual

Risk

Company-specific topic

Low

Low

Low

Equal treatment and equal
opportunities for all (within
the context of workers in thevalue chain)

Operating Responsibly Positive, Actual

Opportunity

S2 workers in the value
chain

Low

Very low Very low

Working conditions (within
the context of workers in thevalue chain)

Operating Responsibly Positive, Actual

Risk

S2 workers in the value
chain

Low

Very low Very low

Very low Very low

Protection of whistle-blowers

Operating Responsibly Positive, Actual

Risk

G1 business conduct

Low

Air pollution

Caring for the Planet

Negative, Actual

Risk

E2 pollution

Very low Very low Very low

Other work-related rights
Operating Responsibly Positive, Actual(within Temenos’ own workforce)

Risk

S1 own workforce

Very low Very low Very low

Other work-related rights(within the context of workers
in the value chain)

Operating Responsibly Positive, Actual

Risk

S2 workers in the value
chain

Very low Very low Very low

Social inclusion of consumers

Operating Responsibly Positive, Actual

Opportunity

S4 consumers andend-users

Very low Very low Very low

Corporate culture

Operating Responsibly Negative, Potential Opportunity

G1 business conduct

Very low Very low Very low

Water consumption

Caring for the Planet

Negative, Potential Risk

E5 circular economy

Very low Very low Very low

Waste

Caring for the Planet

Negative, Potential Risk

E5 circular economy

Very low Very low Very low

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45

EU Taxonomy
Assessment of EU Taxonomy eligibility
and alignment

As identified in the previous reporting period of 2022,
operations related to Temenos Banking Cloud were identified
to be EU Taxonomy eligible, falling under the definition of
economic activity 8.1 “Data processing, hosting and related
activities” and aiming at contributing to climate change
mitigation (CCM) (Annex I to the Climate Delegated Act 2021/2139).
In 2023, activity 8.1 generated revenue through the provision of
SaaS services to banks and financial institutions as well as
capital and operating expenditures related to investments andmaintenance operations on IT infrastructure. The proportion of
Taxonomy-eligible Group revenue for economic activity 8.1 wascalculated as the portion of net revenue from the related SaaS
services (numerator) divided by total Temenos’ Group net
revenue (denominator) resulting in a total Taxonomy-eligible
revenue proportion of 20.51%.
The criteria for EU Taxonomy alignment of activity 8.1 were not
met in FY-23. Temenos is currently progressing to fulfill thecriteria set out in the Taxonomy regulation, thereby aiming toincrease the share of alignment in the years to come.
Particularly the substantial contribution criteria – (1) the
implementation of all expected practices of the European
Code of Conduct for data centers (2) their verification by anindependent third party and (3) not exceeding the threshold of
675 global warming potential (GWP) with the refrigerants usedin the data centers – are currently not fully met by Temenos’
data centers operators globally. Moreover, the following “Do No
Significant Harm” (DNSH) criteria need to be met, in order todeclare activity 8.1 aligned:⚫

Climate change adaptation. A climate risk assessment isconducted to identify potential physical climate risks that
may affect the performance of the economic activity andadaptation solutions are implemented to reduce those risks.

⚫

Sustainable use and protection of water and marine resources.
The undertaking has identified the environmental degradation
risks related to water quality and has developed a protection
management plan for the potentially affected water bodies.

⚫

Transition to a circular economy. To comply with this criteria
the undertaking has to demonstrate all of the following:⚫

the equipment used meets the requirements laid downin Directive 2009/125/EC;⚫

the equipment used does not contain the restricted
substances listed in Annex II to Directive 2011/65/EU;⚫

a waste management plan is in place and ensures maximal
recycling at end of life of electrical and electronicequipment; and⚫

at its end of life, the equipment undergoes preparation
for reuse, recovery or recycling operations, or proper treatment.

Acknowledging the complexity of these criteria, Temenos isactively working to implement measures ensuring compliance.
In line with this effort, a comprehensive assessment is scheduled
to identify necessary actions for addressing current gaps.
Temenos has evaluated the capital expenditure (CapEx) andoperational expenditure (OpEx) required to enhance the energy
efficiency of its offices. This primarily involves installing,
replacing and maintaining LED lighting, HVAC systems andlow-water/energy consuming kitchen and sanitary water
fittings. These actions fall under the Taxonomy-eligible activity
7.3, “Installation, maintenance and repair of energy efficiency
equipment”, which contributes to climate change mitigation
as defined in Annex I of the Climate Delegated Act 2021/2139.
Temenos is currently assessing the alignment criteria set out inthe regulation. While Temenos activities fulfill the substantial
contribution criteria, achieving full alignment with the “Do No
Significant Harm” (DNSH) criteria requires additionallyaddressing the following:⚫

Climate change adaptation. A climate risk assessment isconducted to identify potential physical climate risks that
may affect the performance of the economic activity andadaptation solutions are implemented to reduce those risks.

⚫

Pollution prevention and control. The activity must not
result in the production or use of several hazardous
substances, listed in the Appendix C of the Climate
Delegated Act (2021/2139).

Finally, the last step of alignment assessment involves
compliance with the social minimum safeguards which require
the undertaking to have in place procedures that ensure thealignment with the Organisation for Economic Co-operation andDevelopment (OECD) Guidelines for Multinational Enterprises andthe UN Guiding Principles on Business and Human Rights.
Temenos is committed to operating in accordance with theseinternational standards, as described in the Group’s Business
Code of Conduct and together with external consultancies it iscurrently evaluated to document our compliance.
Temenos has been voluntarily disclosing information on the
EU Taxonomy reporting. Going forward, and in line with our
upcoming regulatory obligations, we are working on graduallyfulfilling the technical screening criteria and continue to report
our Taxonomy-aligned economic activities.

Revenue

CapEx

AmountUSD m

EU
taxonomyeligible %OpEx

AmountUSD m

EU
taxonomyeligible %AmountUSD m

EU
taxonomyeligible %ActivityNo.

Objective

Installation, maintenance and repairof energy efficiency equipment

7.3

CCM

–

–

0.1

0.09%

4.5

0.56%

Data processing, hosting andrelated activities

8.1

CCM

205.1

20.51%

1.0

1.03%

27.7

3.46%

Temenos overall operations

1,000.2

97.2

800.8

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SUSTAINABILITY continued

Goals and targets
Operating Responsibly
Ethical business conduct and governance

2021

2022

2023

2025
target

97.5%

97.3%

99.2%

>97%

Indicator

Percentage of completion of Ethical Business Code of Conduct andmandatory compliance trainings

Information security

Indicator

2021

2022

2023

2025 target

ISO 27001 certification coverage

13 locations

13 locations

14 locations

To continue to expand the scope in order
to include new locations/acquisitions
based on the business needs anddirectives from the Management.

ISO 27017/ISO 27018 certification
coverage

11 locations

10 locations

13 locations

To continue to integrate newly acquiredcompanies, if any, and certify new
locations as required.

EU Cloud Code of Conduct–

Level 1compliance

Level 2complianceTo maintain Program compliance.

Responsible procurement

2021

2022

2023

2025
targetSustainability assessment as part of the qualification and risk
assessments implemented to focus categories of suppliers1

100%

100%

100%

100%

Percentage of new or renewed focus categories of suppliers, providing
goods or services with Supplier Code of Conduct applicable clause

100%

100%

100%

100%

Sustainable procurement to be included as part of all-staff induction Program

100%

100%

100%

100%

Ensure the internal Sustainable Procurement Policy is reviewed regularlyas part of the CSR strategy

100%

100%

100%

100%

Sustainability assessment for most supplier categories

84%

80%

84%

100%

Supplier engagement rate (engaged suppliers which have completed theenvironmental questionnaire out of total focus suppliers)2

45%

60%

73%

100%

Indicator1	100% of our focus suppliers are assessed based on environmental and social criteria. 23.4% of new suppliers, including focus and non-focus,
have been evaluated using environmental and social criteria.
2	We have chosen to disclose a slightly different metric on supplier engagement compared to last year to get more comprehensive insights.
We have included prior years’ numbers in order to show the trend.

Indicates target achieved

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47

Achieving Business Excellence
Client satisfaction and engagement

2021

2022

2023

2025
targetClient Voice: Number of participants from our clients compared to 2016baseline (4,000)

10,007

11,826

12,753

12,000

Improve Client Satisfaction: Percentage points in the Net Promoter
Score, since the metric was launched

+26pp

+33pp

+90pp

+55p

2021

2022

2023

2025
target– % of total revenue

14.5%

18.8%

21.5%

30%

Cumulative R&D investment since 1990

$2.5bn$2.8bn$3.1bn$3.5bnIndicator

Technology and product innovation

Indicator

Environmental and social impact of product portfolio

Indicates target achieved

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SUSTAINABILITY continued

Goals and targets continued

Caring for the Planet
Environmental management and awarenessIndicator

Roll out EMS to additional locations and increase theISO 14001:2015 certification coverage
Increase global waste diversion from landfill

2021

2022

2023

2025
target2030
target

6 offices

7 offices 3

7 offices

8 offices

10 offices

75%

78%

73%

80%

90%

–

74%

72%

75%

80%

No physicalevent due to
Covid-19
restrictions

1 event

2 events

4 events

12 events

Percentage of per capita water consumption for certified
ISO 14001 offices, compared to 2018 baseline (firstcertification) reduction
Organize sustainable events43	We have implemented an ISO 14001:2015-certified EMS in our seven biggest offices: four in India, one in Romania, one in Luxembourg
and one in the UK.
4 Results displayed annually represent the cumulative count of sustainable events since 2022.

EnergyIndicator

2021

2022

2023

2025
target2030
targetPercentage of per capita energy consumption forcertified ISO 14001 offices, compared to 2018 baseline(first certification) reduction

35%

45%

37%

50%

Percentage of annual sourcing of renewable electricity
use in Temenos internal operations (offices and owned
data centers)

4.4%

18.2%

86%

80%

100%

2021

2022

2023

2025
target2030
targetGet validation of Science Based Targets initiative (SBTi)for the reduction of GHG emissions

Target for
FY-22

Official
validation

SBTi target: Percentage of absolute Scope 1 and 2 GHG
emissions reduction, compared to 2019 baseline

13.5%

17.7%

90.7%

25.2%

50%

–

1.7%

31.3%

25.2%

50%

Climate Change Strategy
Business Ambition for 1.5°C

Indicator

SBTi target: Percentage of absolute Scope 1, 2 and 3 GHG
emissions reduction, compared to 2019 baseline5

Targetrevision5	Since 2022, data includes all relevant Scope 3 categories aligned with the SBTi. Our Scope 3 target boundary covers 68.6% of total Scope 3
emissions, in line with the SBTi criteria, representing 56,345 tCO2e for 2019.

Indicates target achieved

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49

Investing in Our People
Gender diversity

Indicator 6

2021

2022

2023

2025
target2030
target

Women in the Temenos total headcount

35%

36%

35%

36%

40%

Women in all management positions, including junior,middle and senior management (as % of total
management workforce)

33%

33%

33%

Women in junior management positions, i.e. first level ofmanagement (as % of total junior management positions)

41%

44%

46%

Women in top management positions, one level awayfrom the CEO or comparable positions (as % of total top
management positions)

40%

43%

50%

Women in top management positions, two levels awayfrom the CEO or comparable positions (as % of total top
management positions)

30%

29%

34%

Women in management positions in revenue-generating
functions (e.g. Sales) as % of all such managers (i.e.
excluding support functions such as HR, IT, Legal, etc.)

28%

28%

28%

Women in STEM-related positions (as % of total
STEM positions)

35%

35%

35%

2021

2022

2023

2025
target2030
target

38.5%

41%

43%

40%

Indicator (1):

2021

2022

2023

2025
target2030
targetPercentage of actively engaged employees

68%

71%

72%

72%

74%

Indicator (2):

2021

2022

2023

2025
target2030
target

–

–

316

>300

6 To have a consistent year-on-year increase of at least 1%.

Racial diversity

Indicator

Asian, Black or African American, Hispanic or Latino, or
other races/ethnicities in the US total headcountWellbeing at work

Number of wellbeing activities

Indicates target achieved

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SUSTAINABILITY continued

Goals and targets continued

Empowering Our Local Economies and Communities
Digital inclusion and innovation

2021

2022

2023

2025
target19,20034,347

36,69450,000Indicator

2021

2022

2023

Revised 2025
target 7

Percentage of volunteers (% of the total headcount of the year)

9.1%

16.6%

20.7%

>20%

Indicator

2021

2022

2023

2025
targetPercentage of India employees’ funds raised and Company matched –Adopt a Kid since Program launch

38%

73%

89%

100%

Indicator

Number of students reached/benefited through the Adopt-iT CSR India
Program, since the Program was launched

Volunteering and community service

7 Due to target achievement.

Employee fundraising and corporate matching

Indicates target achieved

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Sustainability
governance
Board of Directors

Membership⚫

Responsibilities⚫

Approves and oversees the sustainability, climate andCSR strategy (“ESG matters”) of the Group including theclimate-related impacts, risks, opportunities and associatedmetrics and targets⚫

Appoints and oversees the members of the Executive Committee

Chaired by the Non-Executive Chairman

B Read more here: Corporate GovernanceNomination & ESG Committee

Membership⚫

Chaired by the Non-Executive
Vice-Chairman

Responsibilities⚫

Establishes the qualification criteria for Board of
Directors membership⚫

Reviews the structure, size and composition of the Boardof Directors⚫

Reviews the sustainability, climate and CSR strategy (“ESGmatters”) of the Group including the climate-related impacts,
risks, opportunities and associated metrics and targets, stays
abreast of trends in ESG matters and reports accordingly to
the Board of Directors

B Read more here: Nomination & ESG Committee

CSR & Ethics Committee

Membership⚫

Responsibilities⚫

Identifies, designs and leads the sustainability, climate andCSR strategy (“ESG matters”) of the Group including theclimate-related impacts, risks, opportunities and associatedmetrics and targets⚫

Reports to the Board of Directors through the Nomination& ESG Committee⚫

Represents different Temenos functions and departments,
ensuring all the voices of internal and external stakeholders
are taken into account

Chaired by the CEO

B Read more here: CSR & Ethics Committee Charter

Responsibilities⚫

Manages the sustainability, climate and CSR strategy (“ESGmatters”) of the Group including the climate-related impacts,
risks, opportunities and associated metrics and targets⚫

Interacts with stakeholders and drives the CSR, sustainability
and climate-related policies, Programs and reporting

Chief ESG Officer

51

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SUSTAINABILITY continued

1

Achieving Business
Excellence

We are committed to contributing to global efforts
to address social and environmental issues. Financial
technology and digital finance can advance sustainable
development and accelerate the achievement of global
environmental and social goals. At Temenos, we innovatewith purpose and our solutions have a positive environmental
and social impact. In that way, we are contributing to theglobal effort to achieve the UN SDGs.

Business performance
Economic impact

Economic impact for Temenos means achieving our
medium-term growth targets to generate long-termsustainable value for all of our stakeholders and contributing
to the global economy as well as the local economies where
our clients conduct our business.
In 2023, non-IFRS total software licensing increased by
10% in comparison to 2022 and non-IFRS total revenues
increased by 5%. We have achieved a full year EBIT of USD
313 million with a non-IFRS EBIT margin of 31.3%. Long-term
profit and cash flow strength support the proposed dividendof CHF 1.20. Leverage decreased to 1.6x at year end, downfrom 2.0x in 2022 and we generated USD 392 million ofoperating cash flow in 2023.

Geographical outcomes

The total monetary value of financial assistance received by
Temenos from governments during 2023 was as follows:
EuropeRomania: Temenos Romania benefits from an income tax
exemption for employees in software creation-related roles.
The amount of the exemption for 2023 was USD 210,003(2022: USD 366,962). In addition, there is also a reductionof 20% of the annual corporate tax if this is redirected to
donations. The 20% reduction of the annual corporate tax
redirected CSR spending by Romania in 2023 was USD
22,037 (2022: USD 21,630).
Asia
Singapore: Under Singapore’s Central Provident Fundtransition offset and job growth incentive, Temenos claimed
USD 2,502 in 2023 (2022: USD 30,258).

Technology and product innovation

In order to keep pace with the rapid rate of change in
information technology, Temenos has a long history ofinvesting in its products. This has ensured our position as
the leading solution in our sector and, together with theupgradability, means that clients can continue to enjoy thebenefits of our industry-leading investment in the future.
Temenos has consistently invested over 20% of its revenues
in R&D.
The R&D spend inclusive of overhead allocations for 2023
was USD 277.9 million. This is more than twice the level ofinvestment made by our closest competitors. Furthermore,since we only produce software for banking and finance, allof this investment is targeted at our concentrated productportfolio. For more information, please refer to the Annual
Report: Research and Development section.
Environmental and social impact of product portfolio
Category

USD m% of total
revenue

Cloud/SaaS

205.1

20.51%

FCM

0.5

0.05%

Inclusive Banking

2.0

0.20%

TLC

7.4

0.74%

FY-23
USD 000

FY-22
USD 000

Economic contribution to various
stakeholders

1,000,224

949,628

Employee wages and benefits

487,761464,905

Payment to provider of funds

626,210603,378

Payment to government

68,542

26,048697

453

Revenue

Community investment(monetary donations only)

B For more information on our financial performance, please visit therespective section

USD 3.1bn
cumulative R&D investment
1990–2023

Contributing to the UN SDGs

We innovate with purpose, championing
client-centered design and support,
outstanding business practices andlong-term sustainable value.

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53

Case study

Tech-powered sustainability for banks towards net-zero
At Sibos 2023, Kalliopi Chioti, Temenos Chief Marketing and
ESG Officer, was invited as a speaker to explore how banks
are leveraging technology and ESG demands to drive
sustainable finance. The need for banks to adjust theirbusiness model and adopt new technologies like cloud andAI, and collaborate with fintech and technology companies
to build a new digital ecosystem was highlighted.
During the panel discussion, she emphasized how crucial it
is for banks to decarbonize both their direct and indirectemissions, and how key technology such as the Temenos
Banking Cloud (TBC) and the Temenos Carbon Emissions
Calculator can empower banks to optimize efficiency andmonitor progress effectively. Specifically, it was mentioned
how Temenos Banking Cloud, powered by hyperscalers,
enables banks to streamline direct operations sustainably
by migrating legacy IT infrastructure to public cloud
hyperscalers and adopting a Software as a Service (SaaS)model. The environmental benefits of this transition,
including reduced electricity usage and emission reductions
up to 98% compared to on premise, were also highlighted.
Furthermore, the importance of banks’ commitment toreporting indirect emissions, from purchased goods andservices to the carbon footprint of their portfolio, wasstressed. The Temenos Carbon Emissions Calculator, a freetool embedded within the Temenos Banking Cloud was
discussed as a pivotal tool which can empower banks totrack their direct and indirect cloud emissions from the useof the TBC, measure progress towards sustainability goals
and comply with growing climate regulations.
The importance of collaborating with technology providers
that embed ESG principles into their value chain to achieve
tangible emissions reductions and foster accountability
was also presented. It was pointed out that at Temenos,
ESG by design is a core principle of how we build
technology. This was demonstrated by the fact that
Temenos code is 32% more carbon efficient in the latest
software release.

The panel discussion underscored how regulatorycompliance for ESG becomes more stringent and how
Temenos offers banks another valuable tool, the Temenos
Exchange, a marketplace for connecting banks and fintech
solutions. Through the composability of the open platform,
third party applications from the Partners marketplace canprovide banks and their customers with tools to assess
their ESG performance, measure and mitigate their carbon
impact, and address ESG regulation. As a result, thismarketplace enables banks to accelerate the creation of
innovative financial services offerings that enrich theoverall user experience.
Finally, the discussion touched upon how Temenos ESG
investing as a service, an offering armed with explainable
AI, can support banks and wealth managers in meeting
their ESG requirements across lending and investment
portfolios. With this ESG service, banks will be able to create
investment products and power digital experiences thatallow investors to build their portfolios around their values.
To read more please refer to:
B Tech is the key to sustainability for Temenos | FF News at Sibos 2023
B A bank’s ESG record depends on how its technology is built |Finance Derivative
B Exclusive: Leaner and greener banking needed in race to net zero |Net Zero Investor

54

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Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

Achieving Business Excellence continued

Focus on client satisfaction and engagement
Client VoiceThe Temenos Client Voice Program (initially called the Temenos
Customer Loyalty Program) was launched in 2012, as a key
aspect of our sustainable business model is to create successfor our clients to drive long-term loyalty. Over the last decade,we have tailored, developed and redefined services for ourclients, invested in technology to lead innovation in a changing
market, expanded support locations and improved global
delivery, and focused on delivering accumulative success forour clients. This has allowed us to grow our client base, deliver
sustainable ARR and software licensing growth, receive a BBB
investment grade rating and be recognized by industry analysts
and benchmarks as the leading universal banking
technology provider.
Alongside these initiatives, we have been monitoring ourcustomer loyalty through an annual NPS survey with the goalof surfacing insights from over 12,000 users and improving ourscore by 55 points by 2025. We are pleased to announce thatthe 2023 survey revealed that Temenos has greatly exceededboth of these metrics early, well ahead of the 2023 target. We
are also pleased to share publicly our 2023 NPS of +54 (±3.5 at
95% confidence interval) which is reflective of the success that
we have experienced in 2023 from our existing customer
revenue growth and new customer acquisitions. We see ourcurrent NPS of +54 as a reflection of the market dominancethat Temenos has built and developed over the last 30 years.
Banks who use Temenos recommend others to engage with us
as no other vendor in the market can deliver the same productand service, and the entire market solution has been designedwith the future of banking in mind.
While this NPS is market leading and is reflective of thesubstantive loyalty that clients have towards Temenos, werealize that for us to deliver sustainable success to our clients,
we need to continuously improve. As such, the Temenos Client
Voice Program will evolve over 2024 to closer align with ourglobal customer success initiatives. This evolution will include
the rollout of ongoing CSAT surveys across the entire
customer-facing operation giving real-time insights into
satisfaction along the entire customer journey. With these
real-time insights, timely data-driven decisions will be made toaccelerate customer success, further improve customer
loyalty and strengthen our sustainable business model,
ensuring that Temenos leads the universal banking technology
market well into the future.

Temenos Ambassador Program

We are committed to putting our clients at the core of ourbusiness while generating long-term value for them. The goalof the Ambassador Program is to promote innovation inbanking and showcase the value and positive impact Temenos
technology has on our clients, and ultimately to celebrate ourclients’ success. 83% of our Ambassadors are C-level ordepartment heads, from financial institutions of all sizes andsectors all over the world. This Program allows them to giveback to the leaders’ community by sharing their experiences.

In 2023, 29 ambassadors nominated their company for theInnovation Hero awards. The winners were voted online bypeers (over 55,000 votes on social media) and by a jury ofindustry experts. In addition, we continue to recognize one
exceptional ambassador each year with the Visionary
Leadership award.
The Ambassador reception at Temenos Community Forum,
regular events and scheduled meetings provide ambassadors
with networking opportunities where they can gain valuable
insights from peers. The Program includes a reward scheme
and we launched a new Ambassador portal so that they canmonitor their points balance, redeem their rewards and easily
engage in new activities.
2022

2023

YoY

Referenceable accounts

594

633

+7%

Temenos ambassadors

805

850

+6%

Customer success and support

Throughout 2023, customer success has continued to be at
the core of our sustainable business model. Temenos realizes
that satisfied and successful clients are more likely to invest in,advocate for and promote Temenos to the wider market. To
further develop Temenos’ capability to deliver customer successand to enhance the customer experience, significant investments
have been made during 2023 into customer success dedicatedpeople, process and technology. Through 2024, this investment
and development will continue with the goal of having a
specialized customer success representative advocating within
Temenos for each client. This specialist team will enhance thecustomer journey through a technology-driven proactive
partnership focused on continuous improvement to provide
long-term success and satisfaction.
Separate to this customer success team but highly complementary,
the Temenos support team continues to augment productcapabilities and satisfy clients. The 2023 Client Voice survey
highlighted that “product support” was the most selectedfactor contributing positively to the promoter’s satisfaction.
The augmentation of this team with real-time CSAT surveys,
improved implementation methodologies and the expanding
customer success team should see this positive influence
continue throughout 2024.
Objectives⚫

⚫

To build a world-class
support and customer
success organization that is
passionate about deliveringvalue and an exceptional
experience to our clients
Empowering them toachieve their objectives

Success criteria⚫

100% of customers engaged
in CSAT survey⚫

100% of Sev 1 tickets
responded within
contracted SLAs⚫

Customer Satisfaction score>7.5/10

Integrated Report

Temenos AG Annual Report and Accounts 2023

Case study

Case study

Helping clients reduce and monitor
carbon emissions

Temenos joins forces with theMonetary Authority of Singapore
to advance sustainable finance

Alpian is Switzerland’s first digital private bank which
offers specialized banking services, boutique investment
products and access to in-person financial counselling.
It offers the best of both digital and everyday banking,along with embracing ESG commitments. Alpian
recognizes the role of ESG in its operations, stressing its
carbon footprint alongside risk and return. By making
ESG a priority, Alpian demonstrates its commitment tosustainability. Leveraging our SaaS technology, Alpian
has achieved a remarkable saving of over 90% of tCO2eemissions compared to on-premise alternatives.
Kalliopi Chioti, Chief Marketing and ESG Officer at
Temenos, and Schuyler Weiss, CEO of Alpian, attended
the Temenos Community Forum, where experts
discussed paths to sustainable growth for banks andemerging ESG solutions.
B Read more here:
Achieving sustainable growth:
Acting on ESG priorities (finextra.com)

During the 2023 Singapore FinTech Festival, Temenos
announced a collaboration with Gprnt, a digitalplatform launched by the Monetary Authority ofSingapore (MAS), to accelerate innovation in sustainablefinance. This partnership marks a significant step
forward as Temenos becomes the first core banking
software vendor to collaborate with Gprnt.
The aim of this collaboration is to develop cutting-edge
technology solutions by exploring data integration
methods, fostering product development initiatives
that address the evolving needs of sustainable financeand empowering banks to manage balance sheet
decarbonization, navigate ESG risks and comply
with regulations.
The collaboration intends to investigate state-of-theart approaches, enable smooth data integration andpropel product development that is in line with asustainable finance future. The potential productco-development use cases with Temenos, include
enhanced “Know Your Customer”, that takes ESG
data from verifiable sources through the Gprnt
platform, and feed directly into a bank’s client
onboarding. Another possibility is augmented data
analytics, incorporating additional ESG metrics for abank’s loan originations and setting targets forpipeline loans that increasingly will see embedded
elements of sustainability.
This partnership aligns with Temenos’ existingcommitment to integrating ESG principles into its
operations and product offerings. Together with
Gprnt, we aim to provide financial institutions withthe tools and resources needed to transition towards
a more sustainable future.
B Read more here:
Temenos to Work with MAS to Advance Sustainable
Finance – Temenos

55

56

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Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

2 Operating Responsibly
Ethical businessFor 30 years we have been proud of our reputation for
professionalism and the strong relationships we have built
up with our clients. We believe that sound and ethicalbusiness conduct and governance are critical to earning andmaintaining the trust of our clients, investors, Partners andsuppliers. Integrity, honesty and transparency are at theheart of what we do. Our commitments to ethical businesspractices and strong corporate governance structures aredesigned to promote the long-term interests of ourshareholders, maintain internal checks and balances,promote accountability at all levels of our organization andfoster responsible decision making.
As a global company, we have been operating at an
exceptionally high standard of integrity in complying with thelaws and regulations of the countries in which we operate –in some cases higher standards than required by nationallaws or regulations. We understand the responsibility thatcomes with that role and are committed to working with all
our stakeholders to build long-term business relationships
and create sustainable value for them.

Information security, cybersecurity, data
privacy and business continuity

Financial institutions worldwide entrust Temenos with theirtechnological and digital transformation needs, recognizing
our leadership in delivering superior products and services.
This trust necessitates a steadfast commitment to security
and privacy in every aspect of our operations. At Temenos,
we prioritize the safeguarding of our systems and the securedelivery of our software and services, ensuring rigorous
protection of client data against malicious threats andcompliance with our stringent data handling responsibilities.
To fulfill this commitment, Temenos has integrated security
and privacy into the very foundation of our business model.
We have established robust governance structures,assembled a team of skilled professionals and implemented
comprehensive processes, all dedicated to securing ourorganization and the array of products and services we offer
to our valued clients.

Responsible procurement

Temenos has incorporated sustainability considerations into
its Procurement Policy and practices, introducing proactive
engagement as part of the procurement strategy on supplierselection and ongoing monitoring. We have partnered with
ESG specialized consultants to help us formalize a supplierengagement Program, focusing on advancing sustainability
practices and conducting Corporate Social Responsibility(CSR) audits across our supplier base and business partners.
Our objective is to achieve a minimum engagement rate of
50% by 2025 through our Program.

2023 key highlights

99%

of employees completed BCC training

100%of our focus suppliers underwent sustainability assessments

We steward stakeholder
trust by taking responsibility
for our business’ ethics,
procurement and security.
Contributing to the UN SDGs

Integrated Report

Temenos AG Annual Report and Accounts 2023

Ethical businessCorporate governanceCorporate governance at Temenos promotes the long-term
interests of all of our stakeholders and fosters a culture oftransparency, business integrity, responsible decision making
and accountability, maintains internal checks and controls andhelps build public trust in the Company, by balancing theinterests of all its stakeholders. More information on corporate
governance can be found in the Annual Report: Governancesection and on the corporate website, www.temenos.com.

Business Code of Conduct

The Temenos Business Code of Conduct with the linked
corporate policies is the foundation of our commitment toethical business practices and legal compliance. The Codedefines the standards for business conduct everywhere we
operate and provides guidance in addressing the business,legal and ethical issues encountered while performing daily
work or making decisions on behalf of Temenos. We operate inaccordance with our Code, including where local legislation isless strict, or there is absence of legal and/or regulatory
frameworks. Our Code and policies are aligned with the ten
principles of the UN Global Compact on the four issue areas of
Human Rights, Labor, Environment and Anti-Corruption andthe OECD Guidelines for Multinational Enterprises. The
members of the Board of Directors and the Executive
Committee have endorsed the Code. Our Code is available in
English and French on our intranet and our corporate website.
It applies equally to full-time, part-time and temporary
employees and contractors globally. It is a key part of theemployment contract and contractor agreement. All
employees are required to read and acknowledge the Code andlinked policies within the first three months of theiremployment. They are also required to complete themandatory trainings upon joining and to repeat every 12
months. The CSR and Ethics Committee is charged with
monitoring the compliance with the Code and Ethics
Framework. The compliance requirements of the Code are alsopart of our Partners and Suppliers Program. Specificcompliance provisions are included in the Services Partner
agreement and all new suppliers are required to comply with
the Code as well as the Temenos Supplier Code of Conduct. In
addition, the rollout of the Suppliers Program includes existing
suppliers, as they incrementally need to comply with the Codeand related policies and to verify compliance by providing
respective information when requested.
The backbone of our Code is the corporate policies linked
to it that provide detailed guidance on how to exercise good
judgment when working and making decisions for Temenos.
The policies are reviewed annually and reflect our continued
commitment to ethical business practices and legal compliance.

57

Human rights

As defined in the UN Guiding Principles on Business andHuman Rights (UNGP), we are committed to respecting as wellas promoting and advancing human rights, as recognized
in international human rights standards, within our organizationand our supply chain. We are committed to preventing andmitigating any adverse human rights impacts resulting fromour own actions. This commitment extends not only to ourdirect activities but also to any adverse impacts linked to ouroperations, products or services through our business
relationships, even if we have not directly caused or contributed
to those impacts. Our human rights commitment is an integral
part of our Business Code of Conduct, mandatory related
training and ethical business conduct Program, as well as the
Supplier Code of Conduct and supplier performance and risk
assessment processes of our Global Procurement Policy andprocedure. It clearly outlines the requirements for our own
operations (employees, direct activities, products or services)and for our suppliers and Partners, as well as the actions andprocedures we undertake to meet our commitment. We expect
our employees, Partners, suppliers and clients to share thiscommitment to ensure that the IT sector and our business
respect and promote human rights.
Temenos has developed a due diligence process to proactively
and systematically identify potential issues relating torespecting human rights issues and where they could occur in
our own operations, value chain or activities related to ourbusiness and manage them. Our cross-functional Human
Rights Working Group oversees our human rights strategy,
helping to coordinate our efforts to identify and mitigate
human rights risks in our own operations and our value chain.
The results of these efforts are shared with the CSR and Ethics
Committee, the Executive Committee and the Board of Directors.
Our human rights due diligence process covers various issues.
We perform internal audits on a regular basis at a global levelto identify potential human rights risks, while taking mitigation
and remediation actions as required.
In 2023, we renewed our compliance with the UK Modern
Slavery Act by issuing a Slavery and Human Trafficking
Statement where we outlined Temenos’ policies andprocedures related to fair labor standards and respect forhuman rights throughout our operations and supply chain,
while describing our efforts to address modern slavery. As a
UN Global Compact participant, we respect and support thevalues of the Universal Declaration of Human Rights, the OECD
Guidelines for Multinational Enterprises and the International
Labour Organization’s (ILO) Declaration on Fundamental
Principles and Rights at Work by integrating human rights
considerations into our business operations. We respect
government policies in the countries where we operate, while
seeking ways to honor these global principles. We conduct
regular audits to check internal compliance with thesestandards. We have established a process to assess on aregular basis our obligations under Switzerland’s newprovisions on minerals and metals from conflict-affected andhigh-risk areas and in relation to child labor. According to theassessment conducted for 2023, Temenos is exempt from the
Swiss due diligence and reporting obligations, as we do notimport minerals and metals and have not identified reasonablegrounds to suspect child labor in our supply chain.

58

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Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

Operating Responsibly continued
Ethical business continued
Human rights due diligence process and mitigation measures*
Forced laborChild labor

Collective bargaining
agreements

Groups at risk
Temenos employees and third
party employees

Groups at riskChildrenGroups at risk
Temenos employees

Objectives
A work environment relieved offorced or compulsory labor

Objectives
No Temenos employees or workers
in the supply chain younger than 18
years old

Objectives
All Temenos employees have theright to participate in collective
bargaining agreements

Management and mitigation actions⚫ Specific section against forced labor
included in Business Codeof Conduct

Management and mitigation actions⚫ Specific section against childlabor included in Business Codeof Conduct

Management and mitigation actions⚫ Specific section for collective
bargaining agreements included in
Business Code of Conduct⚫

All Temenos employees andsuppliers get trained andacknowledge the Code annually⚫

All Temenos employees andsuppliers get trained andacknowledge the Code annually⚫

All Temenos employees andsuppliers get trained andacknowledge the Code annually⚫

Specific questions under Human
Rights section of the Supplier
Questionnaire to ensure noforced labor, distributed to all
focus suppliers⚫

Specific questions under Human
Rights section of the Supplier
Questionnaire to ensure no
child labor, distributed to all
focus suppliers⚫

Reporting as per GRI 2-30⚫

Employment contracts⚫

Employment contracts⚫

Background checks inrecruitment process⚫

Background checks inrecruitment process⚫

Reporting as per GRI 408-1

Discrimination

Harassment

Health and safety

Groups at risk
Temenos employees, third party
employees, women andother minorities

Groups at risk
Temenos employees, third party
employees, women andother minorities

Groups at risk
Temenos employees

Objectives
Eliminate discrimination in theworkplace and the supply chain

Objectives
Prevent harassment in the workplace
and the supply chain

Objectives
Occupational health and safety inthe workplace

Management and mitigation actions⚫ Specific section against
discrimination included in Business
Code of Conduct

Management and mitigation actions⚫ Specific section against harassment
included in Business Code of Conduct

Management and mitigation actions⚫ Internal audits on a regular basis to
identify potential health and safetyissues and ensure zero accidents inthe workplace⚫

⚫

All Temenos employees andsuppliers get trained andacknowledge the Code annually
Specific questions under Labor
Standards section of the Supplier
Questionnaire to ensure nodiscrimination, distributed to all
focus suppliers⚫

“Working with Integrity Principles”
Policy⚫

Robust Anonymous Reporting
Mechanism Including Policy and24/7 available system⚫

⚫

All Temenos employees andsuppliers get trained andacknowledge the Code annually
Specific questions under Labor
Standards section of the Supplier
Questionnaire to ensure no
harassment, distributed to all focus
suppliers⚫

“Working with Integrity Principles”
Policy⚫

Robust Anonymous Reporting
Mechanism including Policy and24/7 available system⚫

Seeking external consulting on
implementing the requirements of
ISO 45001⚫

Global Health and Safety Policy⚫

Global wellbeing and culture team⚫

Mental health platforms andsupport offerings in 17 countries,
covering 85% of Temenos
employees*	Human rights due diligence process and mitigation measures described in the above table are applicable to all Temenos operational sites globally,
unless stated otherwise.

Temenos AG Annual Report and Accounts 2023

Compliance Program

In 2023, the Temenos Compliance Framework continues to be
based on the principles of assessment, prevention, detection
and correction, ensuring that Temenos continues to:⚫

operate responsibly in accordance with applicable laws
and regulations;⚫

maintain a culture of honesty, integrity, responsibility
and compliance;⚫

meet high ethical and professional standards;⚫

prevent fraud and abuse and other compliance issues;⚫

detect compliance issues at earlier stages and prompt
corrective actions; and⚫

build employee trust and confidence.

The Temenos Compliance Framework has been designed tooperate in the form of a “Compliance Ecosystem” and includes:

Integrated Report59

As a testament to our commitment to ethical businesspractices, in 2023, Temenos has not incurred any fines orsettlements, nor was it involved in any investigations related toanti-competitive business practices, bribery or corruption.
As part of our ongoing commitment to anti-corruption, we
have expanded our commitments in this area beyond
Temenos, to include our suppliers, Partners and other third
parties that have a direct contractual relationship with
Temenos. Integrity is a vital part of our business. We also haveanti-corruption and bribery provisions in our Partner andcontractor agreements as well as in our procurement processwith suppliers.
Temenos does not make any contributions to political parties
nor does it engage in any lobbying activities.

2. anti-corruption and bribery;

Temenos monitors compliance with the policy regularly
through routine and ad hoc checks and audits across theorganization. The Anti-Corruption and Bribery Policy and theeffectiveness of the Anti-Corruption Program are assessed andrevised on a regular basis.

3. due diligence and on boarding;Due diligence and onboarding

1.

anti-trust and anti-competitive practices;

4. export controls and sanctions;
5. anti-money laundering; and6. conflict of Interest and related party transactions.

Anti-trust and anti-competitive practices

Temenos values customer and market trust and strongly
believes that it is fundamental to ensure Temenos safeguards
its reputation. Complying with anti-trust laws throughout theworld is part of our commitment to operating in an effective,
fair and free market economy. This commitment includes
contracts with clients and any third party, ensuring Temenos
competes independently from other market players and does
not seek to control the commercial policy and practices of its
re-sellers or distributors in any illegal or inappropriate manner.
The most significant amount of our revenues derives fromdirect dealings with our clients ensuring Temenos is in a strong
position for enforcing its sales and contracting processes.
Specific provisions of the Temenos Anti-Trust Policy have been
included in the Business Code of Conduct.

Anti-corruption and bribery

For Temenos, anti-corruption is not only a legal obligation but
also a matter of ethical business standards. The Company
takes a zero-tolerance approach to bribery and corruption andis committed to acting professionally, fairly and with integrityin all its business dealings and relationships – wherever it
operates – and to implementing and enforcing effective
systems to counter bribery. Temenos’ zero tolerance on
corruption and ethical standards are set out in our Business
Code of Conduct and our Anti-Corruption and Bribery Policy,
which apply to all Temenos employees and Group entities.
Anti-Corruption and Bribery training is part of the annual
mandatory training that all employees should take when joining
Temenos and to repeat annually during their employment
with Temenos.

The Temenos Due Diligence Framework is currently
implemented on sub-licensing and introducer deals, following
a risk-based approach. As part of our commitment to further
enhance our Compliance Framework, all the assessments
carried out in the previous year as part of the due diligenceprocess are examined and – based on the analysis and results– the model’s assessment and key risk factors are fine tuned
in order to further strengthen its predictability and risk
assessment evaluation methodology.

Export controls and sanctions

Temenos complies with all applicable export control laws andsanctions worldwide and meets obligations under sanctions
regimes of the jurisdictions in which it does business. To
support the Compliance Program, and in order to meet thechallenges and complexities of the regulatory requirements
when operating at a global scale, Temenos will seek, whenrequired, the advice of external legal counsel with expertise in
the relevant fields. Temenos will forgo business which would
breach sanctions regimes directly applicable to it.
All Temenos employees, contractors, distributors and Partners
are expected and required to comply with the Export Controls
and Sanctions Policy, which is also part of the Code. Failure toobserve sanctions and export controls may cause operational
delays, expose the Company to regulatory investigations,severely damage our reputation and create substantial legal
exposure for Temenos companies including criminal and civil
fines, and for individuals, fines and imprisonment.
The Temenos Financial Crime Mitigation (FCM) solution is an
integrated part of the Sanctions and Export Controls
Compliance Program and covers all the relevant businessneeds and compliance requirements. The respective
implementation enables us to examine the country where thesoftware will be exported as well as the underlying entity.

60

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Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

Operating Responsibly continued

Ethical business continued
Anti-money laundering

At the present time, due to the nature of our business activities which are business-to-business dealings with regulated entities(primarily banking and financial services institutions), Temenos assesses it has limited exposure to money laundering risk. To thisend, Temenos is following a risk-based counterparty due diligence approach, in terms of assessments and controls in order tomitigate any money laundering risk. It is based on the “Know Your Customer” approach and it is formalized into two distinct
phases: a) pre-onboarding assessment and b) ongoing and systematic monitoring of high-risk counterparties.

Conflict of interest and related party transactions

Conflicts of interest in both the public and private sector have become a major matter of public concern worldwide. As a global
market-leading software provider, Temenos might be faced with actual, potential or perceived conflicts of interest. Temenos issensitive to the ways in which an employee’s private financial affairs could create potential conflicts of interest. Also, transactions
executed by related parties (legal entities and natural persons) must be reported if such transactions are carried out under thesignificant influence of a Temenos senior manager. Ensuring that the integrity of the Company’s decision making is notcompromised by employees’ private interests, Temenos has in place business-specific policies and procedures that address theidentification and management of actual, potential or perceived conflicts of interest that may arise in the course of business aswell as the reporting of any related party transactions.
The Conflict of Interest Policy is linked to the Code and describes in detail the disclosure mechanism for all Temenos employees,
members of senior management and the Board of Directors as well as the appeal process to the CSR and Ethics Committee,
which is charged with monitoring the compliance with the Code and its linked policies.
We have an internal online global system designed to centralize the declaration of conflict of interest and related party transactions
as well as the approvals of Outside Directorships Requests made by Temenos employees or members of the Board of Directors
serving as a Director or an officer for an outside organization, which might also result in a conflict of interest. The Chief Compliance
Officer prepares and submits on an annual basis a consolidated conflict of interest incidents report to the Audit Committee.

Ethical business conduct monitoring and reporting

Our responsibility is to train our employees on ethical business conduct, provide them with communication channels, build
controls to prevent and detect unethical and non-compliant conduct and perform regular internal audits. When we identify orlearn of concerns or improper conduct, we investigate them fully and take appropriate action to remediate any issues identified.
Temenos offers employees, Partners and suppliers ways to report compliance concerns. If instances of possible non-compliancewith the Business Code of Conduct are detected, an internal grievance mechanism is in place to record verbally, in print orelectronically, any related concerns through the line manager, Group People department, Group Legal department and GroupInternal Audit.
In addition, there is an independent anonymous reporting mechanism in place, the details of which are set out in the Anonymous
Reporting Policy and guidelines, which is linked to the Temenos Business Code of Conduct as well as the Temenos Supplier Codeof Conduct. It is available on our intranet and our corporate website. Anonymous reporting means raising a concern aboutsuspected wrongdoing involving Temenos people, contractors, Partners and suppliers. Temenos is committed to promoting andmaintaining the highest ethical standards in all our work, and ensuring that where concerns are raised, they are investigated andresolved, preserving the anonymity and confidentiality of anyone raising a concern. In addition, an appeal process to the CSR and
Ethics Committee is in place, whose decision is final and binding. All disclosures are reported to the Audit Committee.
Internal audits concerning ethical business issues have been conducted for all of our operational sites in 2023. All filed cases
have been successfully resolved. The below table includes concerns raised from Temenos employees (one case) as well as
externals (two cases):
Employee concerns 2023 (including externals)

RaisedUpheldDismissed

Action taken

Workplace discrimination concerns (perceived feeling of discrimination)

1

1

–

Yes

Other workplace concerns (failure to comply with legal obligations, suchas breach of employment law or human rights obligations)

2

–

2

n/a

Fraud, theft, bribery or other ethical misconduct

–

–

–

n/a

Health and safety or perceived damage to the environment

–

–

–

n/a

Violation of the Temenos Business Code of Conduct

–

–

–

n/a

Actual, potential or perceived conflict of interest

–

–

–

n/a

Total

3

1

2

Integrated Report

Temenos AG Annual Report and Accounts 2023

61

Shaping up the future – Temenos Integrity Framework

The Temenos Integrity Framework is based on the below four pillars (as set by the World Economic Forum):

1

2

3

4

Commitment toethics andintegrity beyond
compliance

Building,
maintaining andenhancing theculture of
integrity

Leveragetechnology

Effectively
implementcollective action
initiatives

Risk management and internal control

Risk management and internal controls provide independent oversight over the portfolio of key risks impacting Temenos andmanage emerging risks with a potential business impact. Temenos has established a Group Risk Management function overseen
and managed by the Chief Risk Officer (who reports to the Chief Security and Risk Officer) to monitor and manage enterprise risks
including the establishment of a Group level Risk Management Framework which is aligned with ISO 31000: Risk management and
COSO ERM methodology. In addition to the Group Risk Management Framework, there is also a robust internal control system inplace for financial reporting and key operational and fraud risks that goes beyond statutory requirements. All relevant risks are
identified, formally assessed and documented. For each risk we have implemented specific controls and mitigation plans andthese are documented in formal risk and control matrices. The effectiveness of the controls is regularly evaluated through aformal self-assessment process which is independently reviewed and tested by both internal and external audit.
B To read more on our Group Risk Management Framework and internal controls, please refer to the Responsible Risk Management – Principal Risks andUncertainties section of this reportCompliance training

In addition to acknowledging the Business Code of Conduct when joining the Company and annually thereafter, Temenos
employees are required to complete training on the Code and the areas of Anti-Corruption and Bribery, Data Protection andPrivacy, and Security Awareness. In 2023, building on our commitment to operate sustainably and responsibly, Environmental
Awareness and Business Continuity trainings, aligned to ISO 14001 and ISO 22301 requirements, have become mandatory for all
Temenos employees and are included in the Business Code of Conduct mandatory trainings percentage. Specifically, BusinessContinuity has been integrated into Information Security training and Environmental awareness consists of a standalone training.
All Executive Committee members have completed the compliance trainings in all areas. The completion percentages below
include all Temenos employees.
Global Temenos 2023 training completion percentage%

Business Code of Conduct Acknowledgment

99.2

Information Systems Security Acknowledgment

99.2

Business Code of Conduct training

99.2

Anti-Corruption and Bribery training

99.3

Data Protection and Privacy training

99.1

Information Systems Security and Business Continuity

99.0

Environmental Awareness

99.0

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Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

Operating Responsibly continued

Ethical business continued
Compliance training continued

The Anti-Corruption and Bribery Policy and the Anti-Corruption Program include several elements such as proportionate procedures,
top-level commitment, risk assessment, integrity due diligence, communication, training, monitoring, review, enforcement andsanctions, with the aim of continuous improvement and alignment with prevailing international standards. The Board of Directors has
the highest level of executive oversight for the Company‘s Anti-Corruption Program. As part of our ongoing commitment to anticorruption, we have expanded our commitments in this area beyond Temenos, to include our suppliers, Partners and other third
parties that have a direct contractual relationship with Temenos. Integrity is a vital part of our business. We also have anti-corruption
and bribery provisions in our Partner and contractor agreements as well as in our procurement process with suppliers.

Anti-corruption and bribery training dashboard
By function*

General administration
R&D

No.

Employees
trained

606

99.8%

2,964

99.1%

Sales and marketing

720

99.6%

Services

1,803

99.5%

Cloud

426

99.3%

6,519

99.3%

No.

Employees
trained

APA

379

99.5%

Europe

1,083

99.5%

India

4,221

99.2%

MEA

226

99.6%

NAM

388

99.7%

LATAM

222

100%

6,519

99.3%

Grand total
By region*

Grand total*	The tables above cover the entire 2023. 54 employees were exempt from mandatory compliance trainings due to long-term leave reasons(sickness, maternity, etc.).

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63

Information security, cybersecurity, data privacy and business continuity
Information security
Governance

Temenos upholds rigorous governance and oversight of its
Information Security and Risk Management Programs. These
Programs are under the direct purview of the Board of
Directors, which is accountable for guiding and approving theGroup IT, Security and Risk strategies. The Board of Directors,
with its profound expertise in strategy, finance and technology,
plays a crucial role in steering these areas.
In alignment with the Board of Directors’ direction, Temenos
employs a robust “three lines of defense” model to bolster ourbusiness strategy and key initiatives through effective
management of risks, security and compliance. This model
includes distinct first, second and third lines of defense, ledrespectively by the Chief Security Officer and the Chief Risk
Officer for the first two lines, and the Chief Internal Audit
Officer for the third.
The Board of Director’s Audit Committee, meeting at least fourtimes annually, exercises comprehensive oversight of the
Security and Risk functions, including their strategic direction.
These functions regularly report to the Committee, presenting
updates on strategy execution, key performance and risk
indicators, audit outcomes and significant incidents or findings.
The Temenos Executive Committee, responsible forformulating and tracking the Group’s strategic plans, includes
information security as a key element. Meetings occur monthly,with broad representation from various business lines. In 2024
Temenos appointed a Chief Security and Risk Officer to the
Executive Committee to ensure senior representation of suchimportant, strategic topics within a key management board.
The Temenos Security and Privacy Committee is dedicated tooverseeing the implementation of global Information Security
and Privacy Programs in alignment with our business strategy.
Chaired by the Chief Security Officer, the Committee meets atleast quarterly and comprises members from diverse functions
within Temenos, including Information Security, Privacy, Cloud,IT, Legal, People & Culture, Finance, CSR and Internal Audit,
ensuring a comprehensive, cross-functional approach tosecurity and privacy. The Committee is tasked with ensuringthat appropriate Security and Privacy policies, guidelines andoperating procedures are established, advising the business of
obligations and requirements, reviewing significant security
incidents and ensuring appropriate resources are provided for
the Security and Privacy functions.

Chief Security Officer

The Chief Security Officer (CSO) at Temenos is responsible forthe first line of defense in the Company, maintaining anorganizational structure that guarantees continuous support
from specialized security functions in line with theorganization’s strategic plan.
Within the CSO’s domain, Temenos has developed acomprehensive Security Program. This Program encompasses
various critical areas: Information Security, Security
Operations, Security Risk and Assurance, Physical Security, andSecurity Culture and Awareness. This multi-faceted approachis designed to holistically address the security requirements ofTemenos systems and networks, our physical infrastructure
including facilities and buildings, as well as the Temenos Cloudand its associated services. This structure ensures that all
aspects of our operation are robustly protected and alignedwith our overarching security objectives.

Information Security Framework

The information security team is responsible for building andmaintaining the Security Framework, comprised of policies,
standards, guidelines, procedures and controls.
The Temenos Security Framework is modeled on the
Information Security Forum’s Standard of Good Practice, andcontrols are derived from industry sources such as Center forInternet Security, Cloud Security Alliance, ISO 27001/2, NIST
and other internationally recognized frameworks.
The information security team oversees the implementation of
security controls by working with relevant stakeholders to
identify risks to Temenos information, and application of
relevant controls to secure Temenos networks, facilities,
devices, applications and systems. Notable controls include
Endpoint Detection and Response (EDR), Data Loss Prevention(DLP), Third Party and Vendor Risk Management, Identity andAccess Management, Closed Circuit Television, configuration
hardening and multi-factor authentication.
B For more information please refer to the Responsible Risk Management
section of this report

Cloud security

The cloud security team, an integral part of the Temenos SaaS
organization, plays a pivotal role in ensuring the security of theTemenos Cloud environments. This team is dedicated to
implementing and upholding the stringent controls and tools
outlined in the Temenos Cloud Security Terms. Its focus is on
maintaining the confidentiality, integrity and availability of ourclients’ applications and data, a commitment that is at theheart of our service offerings.
This team is a critical element of the Temenos Cloud
governance structure, tasked with ensuring that all SaaS
services provided to our clients not only meet our obligations
but also embody best practices in terms of information
security controls and processes.
At Temenos, our commitment to security extends across theentire organization, with a multitude of security controls andPrograms rigorously maintained. These measures encompass
a broad spectrum of security needs and include, but are notlimited to, privileged identity and access management, data
loss prevention, advanced email and web security,
comprehensive endpoint detection and response, robust
anti-malware protection, application whitelisting, meticulous
file integrity monitoring, network intrusion prevention systems,
web application firewalls, efficient mobile device management,
denial of service protection, multi-factor authentication andthorough vulnerability management. Each of these components
plays a vital role in fortifying our security posture, ensuring thesafeguarding of our systems, data and client trust.

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SUSTAINABILITY continued

Operating Responsibly continued

Information security, cybersecurity, data privacy and business continuity continued
Information security continued
Cloud security continued

In 2023 Temenos continued to invest heavily in the security
measures of the Temenos SaaS platform and operations
centers, including new Clean Room facilities for secure
operations, phishing-resistant multi-factor authentication,and enhanced Privileged Access Management technologies andprocesses to further safeguard our clients’ workloads and data.

Security Operations Center

The Temenos Security Operations Center (SOC) is a cornerstoneof our security Program, tasked with the continuous monitoringof our corporate IT systems, Temenos SaaS platforms, end-user
devices and digital services globally. Utilizing leading-edge tools,
technology and procedures, the SOC vigilantly detects harmful
or malicious activities across a wide array of systems.
In the event of a potential or actual security incident, the SOC
is equipped with sophisticated systems and procedures fortriage, evidence collection and incident resolution. Whennecessary, incidents are escalated to higher management for
further action.
At Temenos, we understand that incident response is an
essential component of operating in the modern technologicallandscape. To this end, we have established a comprehensive
Security Incident Management capability, seamlessly integrated
across our business. This system is designed for rapid andeffective response to security incidents, both minor and major,
and is aligned with the National Institute of Standards andTechnology (NIST) Computer Incident Handling Guide.
Furthermore, we have constituted a security incident response
team (SIRT), composed of senior management from various
key departments, including Information Security, IT, Legal,
Cloud and Internal Audit. This team is tasked with overseeing
the management of security incidents. Additional experts may
be called upon to join the response depending on the specificsof the incident.
The SIRT is charged with ensuring that all necessary actions
are promptly taken during an incident, including allocating
sufficient resources and prioritizing tasks effectively. The teamalso ensures that all obligations to affected parties are
fulfilled, which may include notifying clients, regulators andinvestors, among others. Post-incident, the SIRT conducts
thorough reviews to identify and implement preventative
measures, assigning ownership to ensure these are prioritizedand carried out effectively. This comprehensive approachensures that Temenos not only responds to incidents
efficiently but also continually enhances its security posture.

Assurance

The integrity and security of Temenos networks and systems
are of paramount importance. To ensure this, we haveinstituted a rigorous Vulnerability and Threat Management
Program, which is continuously engaged in assessing potential
vulnerabilities. This comprehensive Program encompasses a
range of evaluative techniques, including vulnerability scanning,
penetration testing and advanced threat intelligence analysis.
These critical security assessments are conducted by our
dedicated in-house team of seasoned security experts. This
team works closely with system owners and relevant

stakeholders across the organization. Their role is not just to
identify vulnerabilities but also to provide expert guidance on
the remediation of these vulnerabilities, ensuring that all
actions are in strict alignment with our established Security
Policy and Standards.
This proactive and thorough approach to vulnerability andthreat management is a testament to our commitment tomaintaining the highest levels of security, safeguarding oursystems and protecting the data entrusted to us by our clients.
Through this Program, Temenos continues to fortify its
defenses against evolving security threats, ensuring resilienceand trust in our digital ecosystem.

Security training and awarenessAt Temenos, we recognize the vital role that comprehensive
security awareness plays in maintaining the integrity andsafety of our operations. To this end, all Temenos personnel,
encompassing employees, contractors and Partner resources,
are mandated to complete thorough Security Awarenesstraining. This training covers a range of critical topics, including
phishing, data security, privacy, physical security and business
continuity. It is a requirement for all new joiners to Temenos
and must be completed annually thereafter.
In addition to our internal staff, all Partners engaged under theServices Partner agreement are contractually obligated toprovide their employees, especially those involved in Temenos
projects, with Security Awareness and Data Protection training.
We also provide specialized training for employees or contractors
engaged in particularly sensitive areas, such as cloud operations,product development and our security teams. Our security
awareness initiatives are further bolstered by regular activities,
including phishing simulation exercises, informative emailcommunications and intranet posts that highlight recent security
developments both within and outside of Temenos.
Moreover, Temenos is an active participant in industry-specificorganizations, such as the Information Security Forum (ISF),
Center for Information Security (CIS) and Cloud Security Alliance(CSA). Our involvement in these organizations allows our Security
function to leverage industry best practices, stay updated on
evolving threats and continuously enhance the knowledge andpreparedness of our security staff. This proactive engagementin the wider security community is a key component of ourcommitment to upholding the highest standards of security
and protecting our systems, data and client interests.

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Product security

Temenos is steadfast in its commitment to continuous security
assessment and improvement within its software products,
constantly researching the latest vulnerabilities and attack
trends. This vigilance is a key component of our securedevelopment lifecycle. Identifying vulnerabilities involves
comprehensive testing of target applications using a diverse
array of methods and tools. Our dedication to product security
is so deeply ingrained in our product development
methodology that we confidently assure a significant reductionin the risk of security issues within our product suite.
Any architectural changes or new products undergo a
meticulous review process. These are presented to the
Security Design Authority for a global assessment andapproval. Our secure design, development and review process
is meticulously crafted to ensure the implementation of
fundamental security principles, such as:⚫

identifying potential flaws or vulnerabilities in the initial phaseof design and development, prior to the coding process;⚫

developing code securely and ensuring the implementationof security controls identified during the design phase;⚫

adhering to secure coding practices;⚫

conducting unit testing of the security features of theapplication, performing security audits and code reviews,
and utilizing automated code review tools; and⚫

ensuring that security recommendations are implemented
and approved.

65

For enhancements to information systems or new productrequests, the product development team collaborates with the
product security assurance (PSA) team. These requests are
meticulously reviewed for security design and tested using a
combination of OWASP ASVS and Top10, SANS and specific test
scenarios crafted by Temenos. The testing results are thenreviewed and approved by the PSA team.
The security testing of our products, an integral part of therelease process, is conducted by the product security
assurance team. This testing includes:⚫

Secure Code Review;⚫

Static Code Analysis (SAST);⚫

Open-Source Library Analysis (OSL);⚫

Malicious Code Detection;⚫

Dynamic Application Security Testing (DAST); and⚫

Internal and External Penetration Testing.

Vulnerability findings, complete with recommendations, areshared with development teams for remediation. All identified
issues are meticulously recorded in our Incident Management
tool. Additionally, critical applications undergo a malicious
code review conducted by the Product Security Assurance
team, which includes examinations for application backdoors
and potential for security control bypass. This comprehensive
approach ensures the utmost security and integrity of our
products, reinforcing our unwavering commitment tosafeguarding our clients’ interests.

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SUSTAINABILITY continued

Operating Responsibly continued

Information security, cybersecurity, data privacy and business continuity continued
Data privacy
Privacy organization

The Chief Compliance Officer (CCO) leads our global privacy function and has global responsibility for privacy throughout theCompany, including our cloud, product and corporate business units. The CCO reports directly to the Audit Committee. Temenos
operates an enterprise-wide privacy framework to drive and monitor privacy compliance. Important components of thisframework include:
Business area

Key privacy activities and controls

Product

Our privacy team is embedded within our product development teams to ensure that we deliver products that
honor Privacy by Default obligations; key controls include:

Cloud

Corporate⚫

an automated system to enforce and manage Privacy Impact Assessments at key stages in the Software
Development Lifecycle (SDLC); and⚫

delivering bespoke privacy training to technical product teams to ensure that privacy concepts are wellunderstood and practically applied.

Our privacy team supports our cloud business on a daily basis; key controls include:⚫

undertaking Privacy Impact Assessments when we onboard cloud clients. These assessments are used to
identify/honor applicable data privacy regulations and to create records of processing within our enterprise
privacy management system;⚫

delivering bespoke privacy training to our global cloud implementation and operation teams; and⚫

supporting security incident investigations.

Our privacy team supports our corporate functions such as sales, marketing, procurement, People & Culture
and finance by:⚫

maintaining our records of processing;⚫

completing Privacy Impact Assessment for the introduction of new systems and processes; and⚫

delivering bespoke training to high-risk functions such as Marketing and People & Culture.

Privacy regulations

We operate globally and therefore monitor for and align to regulations across the globe. Notable new and changed privacy
regulations that we have aligned to in 2023 include the Indian Data Protection Act, the Personal Information Protection Law of
the People’s Republic of China (PIPL), US state privacy laws and the Swiss Federal Act on Data Protection.

How Temenos uses data

Temenos processes personal data only for the purpose it was originally collected as per the applicable legal basis of processing.
Personal data is not processed for any other secondary purpose. Access to that data is restricted to the people responsible forthe specific processing activities. Temenos has never received any requests for customer information from government or law
enforcement agencies and we comply with all reporting requirements in this regard. In addition, the Company has neither received
any substantiated complaint concerning breaches of customer privacy and losses of customer data in 2023, nor have there been
any monetary losses as a result of legal proceedings associated with user privacy.

Data request management

We take our role as a data controller seriously and respect all rights of our data subjects including their privacy and broader humanrights; for example, we notify our employees of any data that we are required to legally share with government or law enforcement
agencies. Additionally, any government data requests are overseen by our Chief Compliance Officer, who is responsible for
evaluating and responding to law enforcement or government data requests. Any evaluation takes into account the privacy andhuman rights of our data subjects by doing a risk assessment. In the event that an investigation results from a government data
request, our Chief Compliance Officer is also responsible for leading the investigation and implementing any corrective actions.

E-privacy

The Temenos Privacy Policy is available on our website. We also maintain an Employee Privacy Notice. The users that opt in to ourtargeting/advertising cookies on temenos.com may see our display advertising banners; additionally, users that search on Google
for terms relevant to our business may see our ads. Personal data is not used in either case. The nature of our products andservices means that they are not subject to government-required monitoring, blocking, content filtering or censoring.

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Artificial Intelligence governance

At Temenos we recognize the contribution AI can make to our
success and that of our clients. However, we are also keenly
aware of the risks that AI might pose and of the concerns of all
stakeholders who may be impacted by AI. In the near future we
do expect to see AI legislation within the sector; however, until
then we have implemented our own enterprise-wide AI
governance framework, overseen by our Chief Compliance
Officer, to help manage the risk. The key components of theframework include:⚫

mandatory completion of AI impact assessments for AI
initiatives. The scope of these assessments includes
accountability, transparency, fairness, reliability and safety,
privacy and security, and inclusiveness;

67

Responsible procurement

Beyond our operations, our commitment to operate
responsibly and sustainably extends to our suppliers andPartners. Temenos has integrated sustainability considerationsin its Procurement Policy and practices and expanded to a
strategic procurement operating model that proactively
engages the business and suppliers for sustained cost
efficiency, enabled innovation and operational risk mitigation in
the supply chain.
We employ a responsible strategic sourcing process for
categories of supply considered critical for our business (focus
suppliers). The suppliers that are critical for our business are:⚫

suppliers that provide goods and/or services that are directly
linked to Temenos products and solutions;⚫

review of AI projects by our AI Committee and optionally our
CSR and Ethics Committee when necessary;⚫

⚫

addition of AI considerations into our Code of Conduct and
Employee Privacy Notice;suppliers that have access to and/or process our employee
or Company data;⚫

⚫

addition of AI considerations into the Temenos
Implementation Methodology; andsuppliers that connect to our systems or require access toTemenos intellectual property or confidential information; and⚫

⚫

additional training provided to AI project staff.

suppliers that provide technical or IT services and/or
software products that involve intellectual property licensing.

Business continuity

Temenos has an ethical and social responsibility to protect its
people, assets, clients and stakeholders from the potential
impacts of business disruption. This understanding is at thecore of our business continuity activities.
Temenos has established a Business Continuity Management(BCM) Program, which effectively contributes to the protectionof the organization, provides a resilience framework reassuring
the delivery of services to clients and enables the organizationto achieve its strategic objectives. BCM establishes andmaintains a framework of procedures and plans that aim
to prevent interruptions to mission-critical services andre‑establish the efficient and cost-effective resumption ofbusiness. The aim is to:⚫

protect the organization and its business, including
employees, assets (information and physical assets),
customers and shareholders, by minimizing the impact ofmajor disruptions;⚫

understand and communicate the recovery needs of thebusiness and ensure appropriate recovery capability isprovided to meet those needs;⚫

recover the business in a planned and controlled manner
to meet the requirements of the business and comply withapplicable laws, contracts, regulations or other factors in
all regions;⚫

ensure that BCM is an essential part of business planningand development; and⚫

maintain a robust Business Continuity Management System(BCMS).

Temenos BCMS is ISO 22301:2019 certified and associatedwith the operation and support of the Temenos products
and services. It covers both on-premise and cloud services
to customers.

Sustainability and operational risk assessments are part of the
supplier selection process. For the risk assessments, we use a
Supplier Questionnaire that covers areas such as business andethical conduct, environment, human and labor rights, impact
on society, client privacy and information security, financial
and legal compliance requirements. Our Supplier Questionnaire
is aligned with the ten principles of the UN Global Compact
and the EU General Data Protection Regulation 2016/679.
Since 2021 we use a third party supplier risk management
software to proactively map risks using external data to enablepredictive risk management and planning; and influence
suppliers by implementing a new Compliance Framework toplan, execute, monitor and assess shared strategic
sustainability goals.
Our Supplier Code of Conduct lists our commitments andexpectations as well as the requirements for our suppliers inadhering to our responsible ways of doing business and is
integrated as a clause into contracts and Purchase Order
Terms and Conditions. We expect our suppliers to champion
these values in their own supply chains, while encouraging
them to develop responsible practices of their own andcommunicate any concerns they might have related to apossible breach of our Code through the Anonymous
Reporting mechanism.
The Supplier Code of Conduct and all relevant information
related to our Purchase Order Terms and Conditions andinvoice guidelines are publicly disclosed on our corporatewebsite in a dedicated supplier section.

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SUSTAINABILITY continued

Operating Responsibly continued

Supplier Diversity Framework

As part of our ongoing plan to integrate ESG into our value chain,
we have established a comprehensive framework to ensure that
we are not only providing opportunities for diverse businesses,
but also incorporating supplier diversity as a weighted criterion
in the supplier selection and renewal processes.
We have developed a section dedicated to supplier diversity
and incorporated it into the Supplier Questionnaire that our focus
suppliers need to complete during the onboarding process. We
collect and analyze supplier diversity data in order to assign adiversity score to each of our focus suppliers. Supplier diversity
score is taken into account during the supplier selection andrenewal processes.
We consider as a diverse supplier any business that is at least
51% owned, controlled or actively managed by any of, but notlimited to, the following categories:

Responsible procurement continued
Spending on local suppliers

We recognize that a supply chain composed of diverse
suppliers promotes competition and quality from our vendors,
drives innovation and helps us better reflect the diversity of
our clients. We are proud to work with a range of diverse anddynamic suppliers that can meet the specific needs of eachbusiness line. We build and maintain relationships with both
small local suppliers and large international suppliers. The
percentage of the procurement budget used for our top
significant locations of operation spent on suppliers local tothat operation (such as percentage of products and services
purchased locally) is as follows:
Top 15 countries based on headcount*India% purchases from local
suppliers

98%

US

82%

UK

86%

Romania

98%

UAE

73%

Australia

78%

Luxembourg

89%

Canada89%

Singapore69%

Greece89%

Ecuador96%

Switzerland

54%

Mexico47%

Germany

97%

France93%* Highest: 4,277; lowest: 57.

The reported local spending contains all purchases performedby the Temenos local entity from local suppliers, i.e. suppliers
that are registered in the same country as the Temenos entitythat pays them.

Responsible procurement framework 2021-2025
We have established a responsible procurement framework to
track our current achievements and long-term goals in delivering
sustainable outcomes. A detailed view of our goals is provided
in the Goals and Targets section.

⚫

woman/women;⚫

LGBTQIA+;⚫

disabled person(s);⚫

veteran(s); and⚫

Asian/Black or African American/Hispanic or Latino/Native
American (US only).

We have invested in a robust supplier diversity platform
powered by Supplier.io, which provides us with acomprehensive database including more than 2 million
suppliers. The platform enables us to better track our diverse
suppliers in the US and globally. In addition, we monitor our
new diverse suppliers on a regular basis, through our global
vendor management system.
In 2023, our commitment towards sustainability and supplier
diversity was expanded further. We collaborated with one of
our clients, a top US-based bank, and committed to reporting
our spend with diverse suppliers on a quarterly basis. By doing
this, we are honored to participate and contribute to the bank’stier 2 supplier diversity Program.

Through the Temenos Supplier
Diversity Framework, we fostera sustainable, diverse andinclusive supply chain.
2023 progress62%

of suppliers assessed have launched or plan to launcha supplier diversity framework$7.9m

spend with diverse suppliers globally

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69

3 Caring for the Planet
Environmental responsibility

With the continued global spotlight on the critical issue ofclimate change and the fast-evolving regulatory landscape,we recognize the importance of understanding and taking
action on our material environmental impacts, risks andopportunities. While fully complying with all relevant
environmental laws and legislation at our office locations
globally, we support a precautionary approach toenvironmental challenges on our own initiative and an
environmentally responsible way of conducting our business.
We believe that environmental sustainability is not just abusiness imperative but also a moral responsibility. We arecommitted to leading by example and demonstrating thatbusinesses can operate profitably while also minimizing theirenvironmental impact and contributing to a moresustainable future.

2023 key highlights

SBTi

positive progress towards our validated near-termscience-based target

Zero

instances of non-compliance with environmental laws
and regulations73%

ISO 14001:2015 certification coverageContributing to the UN SDGs

Temenos is committed to:⚫

operating in a sustainable and responsible manner,recognizing the critical importance of environmental
stewardship in addressing the challenges of climatechange, nature and biodiversity loss;⚫

aligning our operations with existing and new regulatory
requirements and voluntary frameworks, to achieve
net-zero greenhouse gas emissions by 2050, including andnot limited to the 1.5oC Business Ambition of the Paris
Agreement, the EU CSRD and international guidelines
related to disposal of electronic waste;⚫

developing and deploying innovative technology solutions
that help banks and financial institutions manage theirenvironmental footprints, invest in sustainable initiatives
and meet their net-zero commitments;⚫

continuously identifying opportunities to increase ourenergy efficiency and reduce GHG emissions both in ouroperations as well as in our value chain, with the aim to
improve our overall environmental footprint; and⚫

monitoring our global environmental footprint andtransparently reporting on our progress.

The Temenos Environmental Roadmap supports the UN
SDGs and the transition to a net-zero economy and is
structured around four areas: Environmental Policy andManagement System, People Environmental Awareness,
Climate Change Strategy, and Environmental Monitoring
and Reporting.
In addition, we are embracing the new EU Corporate
Sustainability Reporting Directive (CSRD) requirements,
which aim to enhance transparency and disclosure ofclimate-related financial risks.

We are empowering ourclients to make the transition
to net-zero, enabling them tomeet their sustainability
goals while navigating the
evolving regulatory landscape.

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Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

Caring for the Planet continued

ActionOur Guiding Decarbonization Framework

As Temenos keeps an eye on the increasing regulatory
expectations in the EU, the US and the rest of the world, we
have adopted the 4A framework of Ambition, Action, Advocacy
and Accountability, to guide our development of a credible
transition plan, aligned with national commitments andinternational climate agreements.

Environmental management and awareness

Our Global Environmental Management System (EMS), theISO 14001 EMS certification and our Employee Awareness
Program are key tools for Temenos environmental performanceand the transition to a low-carbon economy. We are committed
to measuring, monitoring and reporting our environmental
footprint and guiding our journey towards net-zero, across thewhole value chain, including our own operations, our products
and services and our supply chain.

This framework provides a structured approach to Temenos
transition planning. “Ambition” drives our goals for an
economy-wide net-zero transition, prioritizing direct emissions
reduction and considering all relevant stakeholders. “Action”
translates strategic objectives into concrete short- andmedium-term steps, integrating the plan with business
operations and addressing uncertainties. “Advocacy” enables
collaboration with the wider stakeholder groups to achieve
long-term success by aligning with evolving regulatory
requirements and minimizing risks. “Accountability”
emphasizes the importance of robust governancemechanisms, incentivization, transparent reporting withquantified metrics and external verification.

Environmental Policy and Management System
Objective:
increase coverage of ISO 14001 certification across ourglobal operations

The ISO 14001 certified Environmental Management System(EMS), based on the principles of continuous improvement,
supports our commitment of minimizing our environmental
impact, including efficient management of energy, water andwaste, and provides us with a framework for achieving
compliance against current and upcoming environmental legal
regulations and stakeholders’ requirements. It also enables us
to use transparent and accurate environmental data tomonitor progress towards our action plans and theachievement of our near-term science-based target. Our CEO
is responsible for the Global Environmental Policy and the
management team is periodically reviewing the progress andcompliance. The local EMS teams, led by dedicated andtrained office managers, are responsible for the annual targets,the monitoring of the action plans, the implementation of

4A Framework

Ambition

ActionAdvocacy

Accountability

Ambition
Temenos is committed to aligning our business with the visionof a net-zero world by collaborating with our stakeholders
across the value chain.

Ambition towards net-zero

2017

2022

2019

GlobalEnvironment Policy

SBTi year of reference

1.5°C-aligned target validatedby SBTi (near-term)

2018

2020–2021

2023

Launch of Temenos Global
Environment Management
System and ISO 14001
certification of India: Chennai
and Bangalore offices>70% ISO 14001 coverage*:
India, Romania,
Luxembourg and UK

TCFD report: Quantificationof Risks & Opportunities
and Scenario Analysis* Based on total employee workforce, including all acquisitions.

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operational controls and the reporting of the environmental
performance (energy, water, waste and GHG emissions) and
the Global Sustainability and Environment Head is responsible
for the rollout of internal and external audits.
B Read more here: Sustainability and Environmental Responsibility

Facilities

All Temenos offices are located in large, leased office buildings
close to city centers and outside protected lands and habitats,following our commitment to respect legally designatedprotected areas. The Temenos offices are designed internallyin such a way as to fully utilize natural resources, like thesunlight, or make efficient use of the office space (open spaceexternally used as patios) and to create an excellent working
environment. We have incorporated environmental
requirements into our corporate facilities management
practices and developed a comprehensive facilities
management strategy that incorporates both financial andnon-financial criteria for new property leases (procedure andstandards for selecting a new property) and for renewal ofexisting leases.
At the end of 2023, our offices in Mexico City, Canada, Miami,
Orlando, Madrid, Bucharest, Amsterdam, Krakow, Paris,
Singapore, Taiwan, India, Hyderabad and Johannesburg werecertified for their environmental performance as per asustainable/green building standard, such as BOMA 360 andBest Gold, LEEDS Gold and Silver, Energy Star, BREEAM,
Green Star, Green Mark Gold Plus and IGBC Gold, on their own
initiative. We continuously pursue initiatives to improve energy
efficiency and reduction of carbon emissions at a time ofongoing growth of our business.

To achieve our targets, we mitigate our environmental impact
by incorporating operational control measures and clean
technology in our facilities, such as:⚫

installation of electricity and water motion sensors incommon areas;⚫

installation of smart metering with real-time data;⚫

upgrades of A/C systems and consolidation of critical rooms(data center server rooms and switch rooms);⚫

use of LED lights;⚫

use of ID secure printers;⚫

monthly preventive maintenance of office facilities, servers,
diesel generators, UPS and fire preventive equipment;⚫

use of electricity from renewable sources;⚫

investing in landscaping and plantations;⚫

construction of organic waste converter and garbage room
to recycle wet waste (India);⚫

installation of reverse osmosis plant in series with existing
STP, to enable HVAC systems to utilize recycled water (India);⚫

solar energy rooftop plant and application of “solar reflective
paint” on the terrace in all the exposed areas (India); and⚫

installation of EV charging points in the parking lots withmore planned as per increase in EVs (India).

2023 highlights

34.5%

Green Building Certifications

Ambition towards net-zero continued

24,298m2

total occupied area certified

2030
Achieve SBTi 1.5°C-aligned
target: 50% reduction of
Scope 1, 2 and 3 GHG
emissions vs 2019, 100% useof renewable electricity andSupply Chain Engagement:
50% of suppliers with SBTs

2024
2026

EU CSRD alignment anddevelopment of Supply Chain
Engagement Climate
Strategy

71

TNFD reporting as an
early adopter

2025

2028

2050

25.2% reduction of Scope 1,
2 and 3 GHG emissions vs2019 and 80% use ofrenewable electricity

SBTi net-zero target(long-term) to be submitted
for validation and strategy
to build a Carbon Removal
BudgetAchieve SBTi net-zerotarget (long-term) 90%
reduction of Scope 1, 2 and3 GHG emissions andremoval of residual
emissions72

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SUSTAINABILITY continued

Caring for the Planet continued

Case study

Case study

Energy conservationin India offices

Temenos Carbon
Emissions Calculator

In multi-tenant buildings, like the Bangalore IBC and
Chennai KG offices, most of the significant energy
consuming equipment like air handling units, lifts, etc.
is owned and managed by the landlord, so the India
EMS team has engaged an expert to conduct acomprehensive energy audit on site. As a result, oneof the recommendations on energy conservation wasto improve the UPS utilization efficiency throughoptimization, i.e. removing one UPS by connecting theload to another UPS without distracting the operation,and to remove the dedicated A/C units. This project
has resulted in saving 77,964kWh of energy (3% of
total building energy consumption) and 57 tCO2eemissions per year, translating to approximately
33,658 USD of operational cost savings per annum.

Innovating with purpose is fully integrated into ourculture. It is how we take care of the world around us
and it is how we deliver value to our clients, ourPartners and the communities we serve across theglobe. Climate change is a pressing global challenge
and with new regulations coming into play, banks arelooking for new ways to measure and mitigate theircarbon emissions.

Action continued
Environmental management and awareness
continued
Products and services

Objective:
incorporate sustainable software engineering practices
into each stage of our products
Since 2022, we have been engaging with GoCodeGreen, an
independent climate tech company dedicated to measuring
the carbon efficiency of software products, to provide us witha clear understanding of the carbon footprint of our products,
in order to improve our software engineering practices andreduce the carbon impact. Kicking off this project, we assessed
the release and use stage of our Transact product and we
identified key actions to improve the carbon efficiency thatcan result in sector-leading performance.
Building on the momentum, during our recent 30 th Anniversary
Hackathon, expert trainers from GoCodeGreen encouraged ourTemenosians to consider climate change and efficient codingin their prototypes. To motivate and educate our hackers, thefirst 300 to register for the event were given access to
GoCodeGreen’s Digital Sustainability Foundation course, toensure their submissions were built in a climate-friendly andefficient way.

To support banks in their race to net-zero, Temenos
has launched its Carbon Emissions Calculator on the
Temenos Banking Cloud. This industry-first andindependently verified solution is powered byhyperscalers and gives our clients deeper, datadriven insights into their carbon emissions.
The calculator is embedded into the Temenos
Banking Cloud and offers these insights at no extra
cost to our clients.
Through the Temenos Carbon Emissions Calculator
our clients can:Easily monitor their annual
carbon footprint fromrunning their workloads on
Temenos Banking Cloud.

Comply with growing
climate-related
regulations.

Benefit fromsignificant carbon
emissions savings,
compared to banks
using on-premisesoftware.

Track progress towards
reaching theirsustainability targets.

Temenos AG Annual Report and Accounts 2023

Integrated Report73

Employee environmental
awareness

Objective:
engage all Temenosians towards amore sustainable lifestyle inside andoutside the workspace
In order to reduce our environmental
footprint and address climate change,
we are committed to raising
environmental awareness of ouremployees through training
opportunities and voluntary
environmental initiatives. To show our
support, we recognize their contribution
to address climate-related issues andenvironmental impacts inside andoutside the Temenos workplace throughthe T-Stars Awards or the annual
Temenosian Awards.

Case study

Cultivating environmental
innovation among
employees
Temenos held its 30th Anniversary
Hackathon, which saw 350 Temenosians
respond to the challenge and generateover 69 new prototype ideas in just 48
hours. One of the winning teams, Green
SaaS, proposed and built the prototype
for “Carbon Aware SaaS” to help banks
on their decarbonization journey. The
Green SaaS team leveraged the powerof Temenos Transact, FCM and Infinity.
This innovative solution focused on
measuring the GHG emissions within abank’s value stream. The event was a
testament to Temenos’ commitment toinnovation and sustainability, and its
dedication to fostering a culture ofcreativity among its employees.

Environmental awareness training
We invest in our employees’ environmental
training and encourage them throughtargeted awareness campaigns to adopt asustainable lifestyle in their work as well as
in their everyday life, to help minimize theirenvironmental impact, conserve natural
resources and protect nature, biodiversity
and local ecosystems. Since 2023, we havelaunched a mandatory environmental
awareness training for all Temenos
employees. We also invest in the continuous
education and development of our EMS coreteam members and we are committed todeveloping ISO 14001 certified internal
auditors.

2023 highlights

Environmental voluntary initiatives
We educate ourselves through action andspread environmental awareness byorganizing voluntary activities around theworld. In 2023, our Mission Earth Team, agroup of passionate and dedicatedTemenosians, continued its mission topromote environmental awareness andstewardship across our global community.
Through nine insightful internal meetingsand our first-ever co-hosted environmental
event with one of our suppliers, the teamdelved into critical environmental topics
such as mass extinction, minimalism,
e-waste, green buildings, biodiversity, plastic
pollution, climate change, environmental
health, toxic ingredients and “green” holidays.
The discussions and activities fostered adeeper understanding of these pressing
issues and inspired Temenos employees totake action for a more sustainable future.

9

B Read more here: Volunteering for the Environment

99%

trained employees

100%of ISO 14001 certified
internal auditors
per region

300+

active members ofMission Earth Team
from 33 countries

Mission Earth Team
meetings

1

first-ever co-hosted
environmental eventwith one of our
suppliers

1,165

volunteering hours

74

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SUSTAINABILITY continued

Caring for the Planet continued

Climate change strategy
Business Ambition for 1.5°C

1.5°Caligned officially validated science-based target by the SBTi50%

absolute reduction of Scope 1, 2 and 3 GHG emissions by 2030 with2019 baseline year

Net-zeroemissions by 2050 with 2019 baseline year

TCFD

recommendations integrated into strategy
Temenos considers climate change as a business imperative.
We believe that how we address climate risks matters to ourbusiness, to the community and to the planet. It is importantfor us to understand the material financial implications ofclimate change on our operations, supply chain and productoffering. As part of our environmental responsibility strategy,
we are committed to:

Action continued
Environmental management and awareness
continued
Event Sustainability Management System

Objective:
organize ISO 20121 certified sustainable events, in order tominimize our negative environmental impact in the areas ofwaste, water, energy and air quality and maximize ourpositive social and economic impacts of such events
Integrating sustainability into our corporate, sponsored or othertypes of events and ensuring that our event planning operates
with the same high sustainability standards as our corebusiness proves our commitment to respecting the principles
of sustainable development. Therefore, we have a Sustainable
Event Planning Policy, which is linked to the Global
Environment Policy, as part of the Temenos Code of Conduct
and the Temenos Supplier Code of Conduct, and our two main
corporate events, TKO and TCF, are ISO 20121 certified.
B Read more here: Sustainable Event Planning⚫

measuring our global impact and implementing climate risk
mitigation and adaptation measures through energy
reduction and emission avoidance initiatives;⚫

contributing to the reduction of GHG emissions and investingin energy efficiency measures including a progressive transition
to purchasing renewable electricity in our own operations;⚫

providing our clients with the tools to reduce their or theirclients’ carbon footprint, improve their environmental
performance, reach their sustainability targets and enable
them through their net-zero journey; and⚫

collaborating with our suppliers and Partners to decarbonize
the value chain.

Our Climate Transition Action Plan, our TCFD and CDP
reporting and our commitment to the SBTi reflect our strong
commitment towards our vision of an inclusive and sustainable
world together with our stakeholders. Our Climate Transition
Action Plan sets out time-bound actions, targets and KPIs
designed to deliver an emissions reduction pathway consistent
with the 1.5°C ambition of the Paris Agreement. Our primary
focus until 2030 will be on emissions reduction, not offsetting.
Temenos’ Climate Transition Action Plan has identified four key
areas to facilitate the transition to a net-zero economy, byaligning our entire value chain to a 1.5oC emissions trajectory:
incorporation of TCFD recommendations, implementation ofemission reduction initiatives for our operations, supply chain
engagement and client enablement.

Integrated Report

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Temenos’ Climate Transition Action Plan

Collaboration with all stakeholders to reduce Scope 1, 2 and 3
GHG emissions throughout the value chain:
1. Strategy: Incorporate TCFD recommendations into our ESG
strategy, in order to ensure business decisions and strengthen
our Company’s resilience, while minimizing our impact on
the environment.
2. Operations: Increase the energy efficiency and the use ofrenewable energy, in all operations (including offices, own andcollocated data centers and cloud).
3. Suppliers: Engage with critical suppliers, supporting them toachieve net-zero, by encouraging them to commit to the SBTi.
4. Clients: Accelerate the digital transformation from on-premise
to cloud solutions, by the use of the Temenos Banking Cloud(TBC), enabling our clients to increase their energy efficiency,
reduce their GHG emissions and get a deeper insight into carbon
emissions data associated with their consumption of TBC
services, through our industry-first Carbon Emissions Calculator.
1. Integrating TCFD recommendations into business strategy
Objective:
make better informed business decisions andstrengthen resilience
Since 2021, we have adopted the recommendations of the
Financial Stability Board’s Task Force on Climate-Related
Financial Disclosures (TCFD) and published our first qualitative
TCFD report on climate-related risks and opportunities. By
engaging with external consultants, we are committed to
improving our scenario analysis and the quantification of theidentified impacts. Based on the risk assessment, we set
mitigation and adaptation measures and internal targets tomanage these climate-related risks and opportunities. In 2023,
we have conducted a gap analysis towards aligning our TCFD
reporting with the IFRS S1 and S2 standards, ensuring ourcommitment to robust and transparent climate-related
financial disclosures.
Mitigation measures: Our aim is to reduce our operational
carbon by implementing a series of key initiatives, in order toimprove energy efficiency, reduce emissions and invest in

75

carbon capture projects for the carbon emissions we cannot
reduce or replace, such as: implementation of our ISO 14001
certified Global EMS, increased internal communication andmandatory environmental training, investment in virtual
collaboration and communication technologies, travel andglobal mobility policies, implementation of a facilities
management strategy that incorporates environmental criteria
for new property leases and for renewal of existing leases,
energy efficiency joint activities with the landlords in thebuildings we lease, partnerships with suppliers and event
management vendors with the same mindset, internal carbon
pricing for flights and investment in carbon credits. In addition,
Temenos has committed to, gradually and wherever possible,
migrate from carbon-based electricity (generated by fossil
fuels) to low-carbon electricity (renewable and decarbonizedenergy). The goal is to increase the use of renewable energy
and the energy efficiency in our operations and hence reachnet-zero of our Scope 1, 2 and 3 GHG emissions, at a ratecompatible with the SBTi methodology, by 2050, with 2019as the baseline year.
Adaptation measures: Based on the Temenos risk
management methodology, physical risks have been identified
per each region. Our operations in India, the region with themost anticipated adverse effects from climate change out of
all Temenos locations, have been rated to have negligible tolow financial impacts. However, we are proactively
implementing physical climate risk adaptation measures,
based on a three-year time frame. As an overall plan, Temenos
has in place an ISO 22301 certified business continuity plan toprevent or minimize any adverse impacts and ensure thecontinuity of services to our clients, should such events occur.
Key components of the plan include back-up processes of data
centers from primary to secondary locations, switchingcomputing to other sites, using back-up generators and UPS
systems, internal corporate IT service continuity and disasterrecovery plans, supplier contingency planning, crisis
management and major incident handling procedures, property
insurance covering SFTI risks and employee mobility, specificper location. Also, Temenos offices are located in large, leased
office buildings, where such physical risks are included in thelease agreement. As a region-specific plan, please see thetable below:

Physical climate risk

Identified region

Adaptation measures

Extreme heat

India, Indonesia,
Singapore, United ArabEmirates, Australia⚫

Incorporation of extreme heat conditions in emergency response plans (part ofISO 14001 and ISO 22301)⚫

Operation of back-up generators and UPS systems in case of power outage

Water shortage

India

⚫

Assessment of high-risk depletion areas (Telangana State vs Tamil Nadu andKarnataka) and proactive reduction of Hyderabad data center⚫

Reuse of recycled wastewater within the building complex⚫

Plan for rainwater harvesting on site⚫

Implementation of spill prevention and management procedures (ISO 14001)⚫

Incorporation of flood hazard in emergency response plans for employees
and assets⚫

Ensure continuity of business by switching computing to other locations(ISO 22301)

FloodsHurricanes

Europe, India

Americas

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SUSTAINABILITY continued

Caring for the Planet continued

Action continued
Climate change strategy continued
Temenos’ Climate Transition Action Plan
continued

2. Operations
Objective:
increase the energy efficiency and the use of renewableenergy, in all operations
Offices
Renewable energy
Temenos commits to transition, wherever available andpossible given the challenge of leased property, to energy
suppliers with renewable energy, towards our journey to a
low-carbon economy. During 2023, the majority of our offices
have either switched to renewable electricity sourcing fromtheir local suppliers, or purchased Energy Attribute Certificates,
accounting for 85.7% of our total energy consumption.

Energy efficiency audits
The objective of the energy audit work is to identify, evaluate
and substantiate measures to save energy resources, increaseenergy efficiency and reduce pollutant emissions. During theenergy audits, various criteria are taken into account, such as
wall thickness, type of masonry, type of roof, condition of
basement, condition of heating columns, performance ofheating or ventilation system. All this information is obtainedby on-site research of an authorized auditor, from specificdocuments, from information from the building owner or by
specific measurements.
Our European offices in Germany, Luxembourg and Romania,
which qualify under the guidelines set by the EU Energy
Efficiency Directive, are undergoing energy efficiency audits
every four years. At our UK offices, as part of Energy Savings
Opportunity Scheme 2015 (ESOS) requirements, we engaged athird party to conduct energy efficiency audits in line with the
BS EN 16247 standard and identified opportunities to improve
our energy efficiency. By the end of 2023, our UK offices
achieved a 32% reduction in energy use vs 2022, by optimizing
use of the facilities in collaboration with the building
management companies, as well as installing LED lighting with
automatic sensors and automatic meter reading for electricity
consumption. Our UK offices are also compliant with the ESOS
Phase 2, the mandatory energy assessment scheme, according
to which large organizations are required to assess their energy
usage every four years and to find new ways to save energy, as
well as with the new Streamlined Energy and Carbon Reporting(SECR) scheme, the mandatory annual reporting of energy
consumption of GHG Scope 1 and 2 emissions and energy
efficiency initiatives. During 2023, following a multi-site energy
efficiency audit, we have rolled out targeted energy
conservation measures in all our offices in India, such asbalancing energy loads, upgrading air conditioning systems andoptimizing UPS operation, as per ASHRAE level 2 guidelines, inorder to guide Temenos’ climate change strategic plan.

Data centers and cloud
Strategic planning of data centers (SASB TC-SI-130a.3)
We recognize that data centers can make a substantial
contribution to climate change mitigation, if implementing acomprehensive set of energy efficiency practices, and thatcloud and SaaS products can lead to a more efficient use ofenergy and can contribute to mitigating climate change effects
through replacement by digital services.

Own data centers
We are reducing our data centers’ carbon footprint by carefully
considering our platform design and leveraging our multitenant architecture. We choose to repurpose our existing
servers; when a server is no longer suitable for its current
workload due to age or performance restrictions, weinvestigate options of repurposing it for another function inside
the organization. By doing so, we can extend its life and reduce
e-waste by delaying the purchase of a new one. We also apply
hyperconvergence, an IT infrastructure technique that
consolidates compute, storage and networking resources intoa unified system, helping to reduce data center complexity andfootprint. Whenever needed, we opt for selection of the mostefficient power supply on server, optimum airflow
management and cooling and decommission of underutilized
servers to avoid waste of power/cooling, thus reducing further
our carbon footprint. During the past few years, we have shut
down our own data centers in Brussels and Luxembourg andreduced the size and the electrical load of our data centers inHyderabad, India, considering the high-risk water stress of thearea, based on the WRI’s Water Risk Atlas tool, Aqueduct. Since
2020, we have rolled out an energy project in our own data
centers in India, Chennai/Bangalore/Hyderabad, based on therecommendations of the ASHRAE level 2 guidelines of the 2021
energy efficiency audit. This project, planned to be delivered by
the end of 2025, includes smart metering installations, tobetter monitor energy consumption and PUE, as well as energy
efficiency upgrades and renewable energy sourcing.
Collocated data centers
Most of our IT infrastructure is in facilities managed by third
party companies, specialized in data center services, where we
do not procure the energy or control the operations of thebuildings, the so-called collocated data centers. Since 2015, wehave been running a consolidation project with a goal to keep
two collocated data centers per continent. We highly recognize
the value added in allowing experts with green initiatives inplace to manage the IT environment, including air cooling, graywater usage, power usage effectiveness ratio, renewableenergy use, etc. We work very closely with these collocateddata centers on our sustainability journey and choose tocollaborate with those which have sustainability goals andmonitor their performance, in order to best mitigate the risksof climate change. In regions with stringent regulations
regarding carbon emissions and energy efficiency mitigationplans, like Europe, we select to partner with collocated data
centers which utilize 100% renewable energy, usinghydropower, shift towards cold-aisle containment and recycle
the generated heat with their local utility company. Especially,
our collocated data center in Geneva, Safe Host, recovers the
low-temperature thermal waste from the cooling of its servers,
which would otherwise be vented into the air and lost, andtransfers the heat to the CADZIPLO organization, which is
responsible for operating the heating requirements of thesurrounding industrial and residential buildings.

Temenos AG Annual Report and Accounts 2023

In the Americas, our providers utilize 63% renewable energy
from wind VPPAs and Green-e wind RECs. In Australia, ourcollocated data center based in Canberra is powered 100% by
renewable electricity. In total, approximately 75% of the energy
consumed by our collocated data centers globally is derived
from renewable energy sources. For 2023, we estimated that
their average Power Usage Effectiveness (PUE) ratio was 1.53,
based on reports from our providers.

Public cloud
The momentum towards sustainable banking and green IT andcloud is only increasing. Our mission towards a modernbanking technology transformation is critical to providing ourclients with the products to enable them to decarbonize.
Temenos recognizes the environmental benefits of cloudcomputing and has strategically selected to employ a cloudagnostic approach for its cloud and SaaS products. Our
cloud-native SaaS offering, the Temenos Banking Cloud, is a
climate-related opportunity, which helps banks become more
operationally efficient and sustainable by reducing their carbon
footprint and improving their operational and environmental
performance, to reach their sustainability targets. Regarding
cloud providers, we strategically partner with public cloudproviders (Microsoft Azure, AWS), with strong environmental
agendas and commitment towards using 100% renewableenergy and improving the energy efficiency of theirinfrastructure. By transitioning to flexible cloud-based
infrastructure, we anticipate significant reductions in both ourown and our clients’ energy use. This shift is expected to leadto higher utilization rates compared to the inefficiencies often
seen in on-premise data centers operating below capacity.
Migrating to cloud also means less infrastructure, and hence
less e-waste. Thus, our clients who adopt the Temenos
Banking Cloud will also accrue the inherent business benefitsof this technology compared to an on-premise deployment.
B Read more here: Achieving Business Excellence

3. Suppliers
Objective:
engage with our focus suppliers towards a net-zero economy
As part of our ongoing plan to integrate ESG into our value
chain and achieve our science-based target, we are committed
to developing a supplier engagement strategy in line with the
1.5oC Business Ambition. This requirement is part of the critical(focus) suppliers’ initial assessment rating, guided by our
procurement selection process, aimed to be incorporated in all
the related contracts by 2030. As part of the Temenos Supplier
Code of Conduct, we engage with our suppliers, contractors
and Partners by setting standards for their environmental
performance and by ensuring their compliance. Since 2021 wehave implemented a supplier risk management software toproactively map risks using external data to enable predictive
risk management and planning.

Integrated Report77

We are in the process of implementing a global procedure tomonitor information regarding our focus suppliers’ climatechange targets consistent with the Paris Agreement, encouragethem to commit to the SBTi and measure their success to
reduce emissions through absolute energy reduction and/or
use of renewable energy. Our focus, being a software company,
is on the selection of data center/cloud providers, as well as IT
manufacturers, as we recognize that these suppliers can makea substantial contribution to climate change mitigation, if
implementing a comprehensive set of energy efficiency
practices. Hence, we partner with cloud hyperscalers andprocure IT equipment compliant with internationallyacknowledged standards, such as Energy Star, EPEAT and TCO.

4. Clients
Objective:
transform our clients into smart, inclusive andsustainable organizations
Temenos is committed to integrating ESG in its productoffering, by combining digital transformation and innovation
with sustainability. Through the composable platform of theTemenos Banking Cloud powered by the hyperscalers, ourCarbon Emissions Calculator, the use of XAI and the integrated
apps in the Temenos Partners Exchange Ecosystem, we areable to provide our clients with the tools to measure theiremissions, reduce their or their clients’ carbon footprint,
improve their environmental performance, reduce operationalcosts, comply with regulation and reporting, reach theirsustainability targets and eventually enable them through their
net-zero journey. Temenos recognizes the importance of client
engagement and innovation to address the adverse impacts ofclimate change. Therefore, we annually honor selected clientsat the Temenos Community Forum (TCF) for their contribution
to their communities, innovation and commitment to making
banking better. In 2023, EQ Bank was the winner of theprestigious Sustainability Banking Award, in recognition forbeing the first bank in Canada to use a core infrastructure fully
hosted in a public cloud environment, by leveraging theTemenos Banking Cloud.
B Read more here: Achieving Business Excellence and EQ Bank Success Story

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SUSTAINABILITY continued

Caring for the Planet continued

Advocacy
Engaging in international conferences

In order to contribute to discussions, share insights andadvocate for stronger international commitments to address
climate change, Temenos continuously seeks opportunities toengage in international conferences.
SIBOS: This year’s conference was in Toronto where more than
9,000 banking and financial technology professionals anddecision makers from across the global financial ecosystem,
including Temenos, gathered to talk, network and dream up
the future. Through engagement with such industry leaders,Temenos is actively shaping the future of sustainable financeand empowering banks to play a leading role in addressing theworld’s most pressing challenges. By actively engaging inindustry events like SIBOS, Temenos seeks to amplify its voice
and influence, inspiring banks to adopt sustainable practices
and embrace the power of technology to drive positive change.

Task Force on Nature-related Financial Disclosures (TNFD)
early adoption: Temenos is an early adopter of TNFD, joining
320 global organizations dedicated to developing frameworks
for assessing and managing climate and biodiversity risks.

Participating in tree planting initiatives

Temenos supports and participates in tree planting campaigns
to combat deforestation, enhance carbon sequestration andcontribute to overall environmental conservation, in
collaboration with Plantăm fapte bune în România and Grow
Trees in India.

Singapore FinTech Festival: During this festival Temenos hasannounced a partnership with Gprnt, the Monetary Authority ofSingapore’s (MAS) new integrated digital platform. Through thiscollaboration, Temenos and MAS aim to cooperate on
technology solutions, explore data integration and encourage
product development to advance sustainable finance. Temenos
participation further reinforced the crucial role that banks
can play in environmental stewardship, particularly throughcloud deployments.
B Read more here: Achieving Business Excellence

Supporting international cooperation

Through our active involvement in global initiatives,
commitment to global frameworks and engagement with
communities, Temenos is playing a pivotal role in international
cooperation for environmental sustainability. We believe thatby working together, we can overcome the challenges ofclimate change and build a more sustainable world for
future generations.
UN Global Compact (UNGC) endorsement: As proud
signatories of the UNGC, Temenos aligns with its ten principles,submitting an annual Communication on Progress and actively
participating in the Global Compact Network Switzerland initiatives.
World Economic Forum (WEF) engagement: Temenos, as amember of the World Economic Forum (WEF), actively
contributes to key events like the Sustainable Development
Impact Summit. Our involvement underscores our dedication
to advancing sustainability and supporting the UN SDGs.
Task Force on Climate-related Financial Disclosures (TCFD)
endorsement: Temenos proudly stands among 5,000
organizations endorsing TCFD’s recommendations, demonstrating
our commitment to transparency on climate-related risks
and opportunities.
UN International Days support: Temenos actively supports
UN International Days, organizing educational campaigns
globally to raise awareness about climate change impacts,sustainable practices and environmental conservation.
Our goal is to educate and empower local communities,
fostering a collective commitment to global causes.

Case study

Seeds of Change:
Planting a greener future
For the second consecutive year, Temenos Romania is
extending its collaboration with “Plantăm fapte bune
în România.” In March 2023, a dedicated group of 50
Temenosians and their family members joined forces
to plant approximately 800 acacia trees, covering
0.16 hectares in Moara Domneasca, Ilfov County, Romania.
Additionally, an extra 3,700 spruce seedlings found their
new home in Rasinari, Sibiu, Romania. We will continue
this tree-planting initiative in 2024 aiming to further
expand forested areas and uphold the ongoing wellbeingof the previously planted trees. The planting of these trees
will help enhance biodiversity and air quality in theseregions, further supporting our decarbonization efforts.

Integrated Report

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Accountability
Environmental monitoring and reporting

Objective:
digital transformation to facilitate transparent real-timedata collection and analytics, to monitor and report on ourenvironmental performance

90.7%

reduction of absolute Scope 1 and 2 GHG emissions vs SBT 2019baseline year

31.3%

reduction of absolute Scope 1, 2 and 3 GHG emissions vs SBT 2019baseline year

44%

of water withdrawn is being treated and recycled

73%

of waste is diverted away from landfill
In order to be transparent, we have invested in a sustainability
software platform and we are working towards establishing areal-time BI system for environmental data disclosures andreporting insights to measure, monitor and report ourenvironmental footprint, reduce our carbon emissions andguide our journey towards net-zero, across the whole value
chain, as appropriate. In line with our officially validated
science-based target, we are also committed to annuallyreporting on our progress, including Scope 1, 2 and 3 GHG
emissions. We are continuously working to improve ourmethodology to evaluate all relevant Scope 3 categories.

EnergyObjective:
increase the energy efficiency and the use of renewableenergy in Temenos internal operations
The total energy consumption (use of electricity, natural gas
and diesel) during 2023 was 8,240MWh, with 7,060MWh derived
from renewable energy sources, accounting for 86% of totalenergy use, and 1,180MWh from non-renewable energy sources.
The direct energy consumption by primary energy source was
1,150MWh, with natural gas consumption accounting for 11% of
the total energy use and diesel consumption for 3% of the totalenergy use. The indirect energy consumption (grid electricity)
was 7,090MWh, accounting for 86% of total energy consumption.
The total electricity load of all our offices in India was 3,103kW,
from the operation of HVAC systems, UPS and lighting.
We have set internal targets on energy consumption per
location, to align our performance with our climate change
strategy and be able to monitor our progress towards ourscience-based target.
During 2023, as a result of our energy efficiency initiatives,
we have reduced the use of energy by 1,435MWh.

79

Water

Objective:
use water in a sustainable way focusing on water consumption,water risk management, water efficiency and water protection
from contamination, while preserving biodiversity
Climate change and a growing population are putting increasingpressure on the global water supply. We follow all legal
requirements, standards and regulations related to water
quality and quantity permits with zero incidents of noncompliance to report.
Water consumption: Since 2019, we have been measuring andreporting on our water consumption at our offices, although
we use water only as part of our offices’ operations. We
collaborate with the building owners, analyze data andimplement efficiency measures. To prevent unnecessary wateruse, we have fit water pedestal, tapping and motion sensor
systems on water fixtures and we follow a preventive
maintenance schedule to fix dripping taps in our offices.
Water risk management: As climate change intensifies,
water stress and effective water risk management are gaining
momentum and software companies need to ensure
responsible water usage in water-stressed regions, both intheir facilities and their collocated data centers. Using the
WRI’s Water Risk Atlas tool, Aqueduct, we have identified that
66.6% of our water use from our office facilities is withdrawn
and consumed in locations with extremely high (>80%) and13.6% in locations with high (40–80%) baseline water stress.
We have also strategically selected most of our collocateddata centers to be in regions with low water stress.
Water efficiency: Our offices in India operate in IT businessparks, where all wastewater is being treated in a sewage
treatment plant (STP). It is then reused for toilet flushing andhorticulture, in accordance with all legal requirements: Chennai
Metropolitan Water Supply and Sewage Board and Chennai
Metropolitan Development Authority. As a result, in 2023, wereused 44% of treated domestic wastewater and managed toreduce the consumption of fresh water by 9,394,502L.
Water protection: We have put in place several measures toprevent water pollution and protect marine and coastal
ecosystems while preserving biodiversity:⚫

in locations where diesel generators are under our control,
we have implemented Spill Prevention Plans, including
specific training of responsible personnel and the provisionof spill kits, as well as adequate secondary containers incase of a spillage of diesel;⚫

we monitor the quality of the effluent from the Sewage
Treatment Plant (STP) in Chennai and Bangalore, on a regularbasis through accredited laboratories, preventing potential
contamination of water and land that would have resulted
from untreated wastewater; and⚫

to further minimize any adverse impact on the quality of thewater we also opt for ecological detergents for the cleaningof our offices.

B Read more here: Environmental Dashboard

80

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Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

Caring for the Planet continued

Accountability continued
Environmental monitoring and reporting
continued
Waste and e-waste
Objective:
create zero-waste workplace

Case study

Breaking the plastic habit – again!

As an IT software company, our waste generation is limited tomunicipal solid waste and a reasonable amount of e-wastefrom our internal operations and IT infrastructure, including
computers, printers, monitors and phones. Used batteries,
lamps and hazardous waste from India’s diesel generators
make up the rest of the waste. Our waste management andprevention Program is monitored by ISO 14001. We work withauthorized waste management vendors to reduce landfill
disposal. Used IT equipment is cleaned of all data andsoftware and donated to non-governmental organizations or
disposed of by an authorized and certified recycler, which
dismantles and removes all hazardous materials according tolocal and international electronic waste disposal guidelines. In
India, where 100% of our hazardous waste is generated, we
have implemented a hazardous waste disposal Program toensure that authorized vendors dispose of such waste
according to international guidelines and regulations. Our
Luxembourg and UK offices also undergo external waste audits
to identify opportunities to reuse, recycle, recover or eliminate
waste produced on site. Finally, all offices have environmental
champions who implement environmental initiatives.
B Read more here: Environmental Dashboard

The Temenos Taipei office has embraced a single-use
plastic-free lifestyle, mirroring the Luxembourg office2022 success. This accomplishment reflects Temenos’commitment to environmental sustainability and our
dedication to minimizing our environmental impact.

Carbon footprint

The office’s transformation was driven by a plan that
included a ban on single-use plastics, rigorous screeningof purchased plastic items and a switch to glass
alternatives for bottles and cups. Moreover, the Temenos
Taipei office proactively encouraged eco-conscious dining
choices, promoted waste reduction practices andincentivized sustainable commuting, with over 80% of
employees now utilizing public transportation.

Scope 1 and 2

These collective efforts have resulted in a notablereduction in the office’s environmental footprint,
demonstrating the transformative power of combined
action and the importance of everyday choices in shaping
a more sustainable future.

Objective:
reduce all GHG emissions by increasing the energy
efficiency and the use of renewable energy, across theentire value chain, reaching net-zero by 2050 at a ratecompatible with the SBTi methodology
Offices and own data centers
The primary sources of our emissions are natural gas, on-site
electricity generation, purchased electricity and fugitive emissions.
For 2023, the fugitive emissions from HCFCs, HFCs and Ozone
Depleting Substances were 288.86 tCO2e. These emissions
resulted from the use of the air conditioning systems and were
calculated using the methodology provided by the sustainability
software we have implemented1. Regarding NOx, SOx, VOCs,
PM and HAPs emissions, we do not consider them as being
significant to our operation, as we are a software company.

Scope 3Purchased goods and services and capital goods
These two Scope 3 categories account for 85% of our total
Scope 3 emissions1. We are in the process of establishing amore sophisticated methodology, to enable us to get moreaccurate primary data. Especially regarding collocated data
centers and public cloud hyperscalers, being a software
company and relying mainly on their services, we continuously
improve our data gathering process of energy consumption
and GHG emissions from these operations.
1 For more information, please refer to About this Report.

Integrated Report

Temenos AG Annual Report and Accounts 2023

81

The energy consumption from our collocated data centers in
2023 was 1,309MWh, accounting for 14% of Temenos’ totalenergy use. The emissions from the use of cloud, based on theMicrosoft Azure Emission Impact Dashboard calculator, were
estimated as 20.02 tCO2e.
Other fuel and energy-related activities and waste
generated in operations
These two Scope 3 categories account for approximately 5% of
our total Scope 3 emissions1. They are directly impacted by the
initiatives we already have in place regarding energy efficiency
and waste management.
Business travel
As an IT software company, we rely on our people who travel
to deliver our services, so business travel by air constitutes anenvironmental impact that cannot be easily reduced. We
measure our environmental footprint in relation to business
air travel, trains and taxis for all the countries we operate in,representing 100% of the total employee concentration1. We
implement internally carbon emission reduction initiatives,
such as travel and global mobility policies, internal carbon
pricing, increased internal communication and environmental
training, efficient meeting management that requires travel
around big corporate events, use of other lower-carbon modesof transport for travel within Europe and further investment in
virtual collaboration and communication technologies.
Employee commute
As of September 2021, we have adopted a hybrid working
model to facilitate the return to the offices and to strengthen
our work-life balance. In addition, since 2022, Temenos has
introduced in Hyderabad, India, shuttle services from Metro
Station to the office, in order to encourage employees to stopusing owned vehicles. In 2023, we noted 11% reduction in the
GHG emissions from employee commute1 vs 2022.

The journey towards net-zero

Our annual absolute GHG Scope 1 and 2 (market-based)emissions were 532 tCO2e. There has been a 90% decrease inabsolute GHG Scope 1 and 2 emissions vs previous year 2022
and a 91% decrease vs SBT baseline year 2019. This reduction isa result of a combination of energy efficiency measures and anincrease in renewable energy consumption, through purchaseof renewable energy certificates. During 2023, 0.07 tCO2e were
emitted per MWh, 87% less than 2022. In 2023, our annual
absolute GHG Scope 3 emissions were 61,399 tCO2e, including
all relevant Scope 3 categories (purchased goods and services,
capital goods, other fuel and energy-related activities, waste
generated in operations, business travel and employee
commute), and our total Scope 1, 2 and 3 GHG emissions were
61,931 tCO2e. In terms of monitoring progress against ournear-term science-based target, Temenos managed to achievea 31.3% reduction vs SBT 2019 baseline year – including Scope
1, 2 and 3 GHG emissions. The GHG Scope 3 emissions
reduction was driven by strategic efforts in supply chain
management and procurement practices.
B Read more here: Environmental Dashboard
1 For more information, please refer to About this Report.

Case study

Carbon removal projectAs part of our continued commitment to achieving
net-zero, Temenos has taken an additional step this year
by acquiring 1,000 tons of carbon credits from the
Pakistan Mangrove project, a certified initiative that
supports the restoration and conservation of the Indus
River Delta mangrove ecosystem. The Indus River
Delta–Arabian Sea mangroves, a vital part of theregion’s biodiversity, are particularly vulnerable to theincreasing salinity of the river due to the influx of salts
from the Thar Desert. These mangroves are like nature’s
superheroes, as they provide a home for different
plants, fish and crustaceans while also being excellent
at capturing and storing carbon, helping fightclimate change.

Integrated Report82

Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

Caring for the Planet continued
Environmental dashboard
Energy and GHG emissions
2023 electricity use by region

2023 renewable energy use

2023 total energy profile% by region% renewable energy use% by activity

Asia Pacific

78%

Europe10%Middle East and Africa

Renewable

86%

On-site generation

3%

Non-renewable

14%

Natural gas11%

Grid electricity

86%

3%

Americas9%

Scope 3

Scope 3 GHG emissions

Scope 3 carbon footprint 2023

Monthly average tCO2e per capita
0.05 0.03

2023

0.03 0.03

2022
2021

0.02 0.04

2020

0.03 0.02
0.17

2019

0.10
0.36

2018

 at. 1 Purchased goods andCservices

78.5%

Business travel

Cat. 2 Capital goods

6.9%

 at. 3 Fuel andCenergy‑related emissions

GHG emission (% per Scope)

1.6%

 at. 5 Waste generated inC
operations3.2%
Cat. 6 Business travel

6.6%

Cat. 7 Employee commute

3.2%

0.13

Employee commute

2018

2019

2020

2021

2022 1

2023

2

2

7

5

1

0.83

Scope 2

14

22

52

46

5

0.03

Scope 3 1

84

76

41

49

94

99.14

Scope 1

1	As of 2022, Scope 3 includes all relevant categories. For previous years 2018–2021,
Scope 3 included only business travel and employee commute.

Water and waste
2023 water withdrawal

2023 baseline water stress2023 waste profile% by region% baseline water stress% wasteAsia Pacific

69%>80% extremely high67%

Diverted from disposal 73%
Directed to disposal

Europe16%

40–80% high14%Middle East and Africa

<40% low

19%

3%

Americas12%27%Integrated Report

Temenos AG Annual Report and Accounts 2023

83

Energy consumption and GHG emissions
Total annual
electricity use(kWh)Total electricity(renewableenergy sources)(kWh)

Total annual
natural gas use(kWh)On-siteelectricity
generation(kWh)

Scope 2 –electricity(tCO2e)Scope 1 –natural gas(tCO2e)Scope 1 –diesel(tCO2e)5,527,409

5,500,612

0242,965

14.9

0

61.2

Europe744,092

744,092

524,507

0

0.9

96.0

0

Americas630,683

628,243

382,781

0

0

70.0

0

Middle East and Africa

187,910

187,910

0

0

0

0

0

7,090,094

7,060,857

907,288242,965

15.8

166.0

61.2

2023
Region1

Asia PacificTemenos
Energy 2

2019

2020

2021

2022

2023

9,163

9,125

9,017

9,675

8,240

SASB TC-SI-130a.1 Total energy consumption (GJ)

32,986.4

32,849.8

32,461.4

34,831.2 29,665.2

Natural gas consumption (GJ)

1,501.5

2,476.4

2,954.0

3,998.9

3,266.2

On-site electricity (GJ)

1,317.9

557.9

331.8

446.7

874.7

30,167.0

29,815.5

29,175.5

SASB TC-SI-130a.1 % of total energy consumption that is grid electricity

91.4

90.8

89.9

87.2

86.0

SASB TC-SI-130a.1 % of total energy consumption that is renewable energy

3.2

4.2

4.0

18.2

85.7

GHG emissions(tCO2e)

2018

2019

2020

2021

2022

2023

–

78.1

135.6

148.7

201.3

166.0

607

304.4

41.7

23.3

31.4

61.2

–

–

529.1

364.4

345.6

288.8

607

382.5

706.4

536.4

578.3

516.0

GRI 302-1

Total energy consumption (MWh)Purchased electricity (GJ)

30,385.6 25,524.3

GRI 305-1

Scope 1: natural gas consumption

GRI 305-1

Scope 1: on-site electricity generation

GRI 305-1

Scope 1: fugitive emissions (HCFCs, HFCs, ODS)GRI 305-1

Scope 1: total

GRI 305-2

Scope 2: purchased electricity (location-based)

4,985

5,738

4,991

4,756

5,127

4,273

GRI 305-2

Scope 2: purchased electricity (market-based)

–

–

–

4,732

4,144

15.8

GRI 305-3

Scope 3: employee commute

7,620

6,655

1,465

3,106

2,179

1,938

GRI 305-3

Scope 3: business travel

21,443

11,527

2,492

1,863

2,179

4,060

GRI 305-3

Scope 3: purchased goods and services

–

–

–

–

63,96048,221

GRI 305-3

Scope 3: capital goods

–

–

–

–

11,7094,209

GRI 305-3

Scope 3: other fuel and energy-related activities

–

–

–

–

1,873

1,003

GRI 305-3

Scope 3: waste generated in operations

–

–

–

–

210

1,968

GRI 305-3

Scope 3: total

29,06318,182

3,957

4,969

82,11061,399

GRI 305-3

Scope 1, 2 (market-based) and 3: total

34,65524,302

9,654

10,261

86,832

61,931

GRI 305-5

Emissions offset (carbon removal as of 2023)

21,442

14,587

1,287

–

–

1,000

3

GRI 305-5

Reduction of Scope 1 GHG emissions

–

–

–

–

–

62.3

GRI 305-5

Reduction of Scope 2 GHG emissions

–

–

–

–

–

4,128

GRI 305-5

Reduction of Scope 3 GHG emissions

–

–

–

–

–

20,710

SBTi target

Scope 1, 2 (market-based) and 3–

62,085––61,05042,6522

1 Including offices and owned data centers.
2	For more information, please refer to About this Report.
3 As of 2022, Scope 3 includes all relevant categories. For previous years 2018–2021, Scope 3 includes only business travel and employee commute.

Integrated Report

84

Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

Caring for the Planet continued

Environmental dashboard continued
Energy and GHG emissions continued
Normalized metrics (per capita)1

2017

2018

2019

2020

2021

2022

2023

GRI 302-3

Energy consumption (kWh)2

164

146

132

108

108

108

104

GRI 305-4

Scope 1 and 2 emissions

0.105

0.095

0.088

0.067

0.064

0.053

0.007

GRI 305-4

Scope 3 emissions (business travel andemployee commute)

0.347

0.492

0.262

0.047

0.060

0.048

0.075

GRI 305-4

Scope 3 emissions (business travel)

–

0.363

0.166

0.030

0.023

0.024

0.051

GRI 305-4

Scope 3 emissions (employee commute)

–

0.129

0.096

0.017

0.037

0.024

0.024

GRI 305-4

Scope 3 emissions (including all relevant
categories)

–

–

–

–

–

0.92

0.77

Water consumption (KL)

–

0.67

0.71

0.22

0.17

0.26

0.31

Waste generation (t)

–

0.043

0.046

0.020

0.017

0.016

0.025

3

1	Average monthly performance for the period December to November per headcount. For more information on the calculation, please refer to
About this Report.
2 Includes all types of energy (grid electricity, natural gas and on-site generation).
3	Annual waste generated for the period December to November per headcount. For more information on the calculation, please refer to
About this Report.
Emission activities

Scope

Emission source

Natural gas consumption

Direct (Scope 1)

Natural gas supply

On-site electricity generation – diesel fuelDirect (Scope 1)

Diesel-operated generator sets

Fugitive emissions (HCFCs, HFCs, ODS)

Direct (Scope 1)

Air-conditioning equipment

Purchased electricity

Indirect (Scope 2)

Electricity grid

Purchased goods and services

Other indirect (Scope 3)

Upstream use of natural resources

Capital goods

Other indirect (Scope 3)

Upstream use of natural resources

Other fuel and energy-related activities

Other indirect (Scope 3)

Electricity grid

Waste generated in operations

Other indirect (Scope 3)

Waste generated in the offices

Employee commute

Other indirect (Scope 3)

Employees’ private vehicles

Business travel

Other indirect (Scope 3)

Commercial airlines, trains and taxis

Temenos AG Annual Report and Accounts 2023

Integrated Report

Sources of water 1

85

Volume (m3)Purchased water

Municipality water

18,512.515

Purchased water (non-potable)

2,207.211

Ground water

Ground water

Surface water

Surface water (river/lake/sea)

Harvested rain water

Rainwater collected and stored (water consumed from RWH tanks)804.125––

Recycled water

9,394.502

Total water withdrawal(SASB TC-SI-130a.2) (GRI 303-3)

21,523.851

Total wastewater discharge

20,447.658

Total water consumption

1,076.193

Water withdrawal per region

Volume (m3)Asia Pacific

14,836.750

Europe3,424.082

Americas2,703.909

Middle East and Africa
Water profile1

559.110Percentage (%)% recycled water (SASB TC-SI-130a.2)

43.6% water in regions with high baseline water stress (SASB TC-SI-130a.2)

13.6% water in regions with extremely high baseline water stress (SASB TC-SI-130a.2)

66.6

Waste profile

Quantity (t)Total waste generated (GRI 306-3)

166.04

Total waste diverted from disposal (GRI 306-4)

120.90Total waste directed to disposal (GRI 306-5)

45.14

Waste per category

Quantity (t)Food waste (compost)

24.30

Paper/carton/plastic/tin (recycle)

85.29

Domestic (landfill)

42.31

Domestic (incinerated with energy recovery)

2.83

Hazardous waste (recycle)

0.05

2

Hazardous waste (incinerated without energy recovery)
2

E-waste (recycle)
1 For more information on the calculations, please refer to About this Report.
2 Hazardous waste is generated from operation and maintenance of diesel generators in India.

–
11.26

86

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Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

4 Investing in Our People
2023 key highlights

6,773

46%

56

38%

employees

offices39

countries

86

gender diversity under 30

gender diversity in the Boardof Directors

5Great Place to Work recognitions

nationalities

Contributing to the UN SDGs

We strive to create
an open, fair, equal
opportunity andhonest work
environment for ourpeople and for thepeople who we
impact throughour work.

Integrated Report

Temenos AG Annual Report and Accounts 2023

We believe our people are the key, as they make things happen
and define our destiny. Our people are the most important andvaluable Company asset constituting the Temenos culture andhelping the Company reach its business targets and bring
exceptional value to our stakeholders. Temenos aims to create
an open, fair, equal opportunity and honest work environment
where all employees are treated with respect and courtesy in an
inclusive, productive and safe work environment. All employees
and contractors are responsible for upholding this principle andwork towards making Temenos a great place to work. Ourcommitments to communicate openly and respectfully witheach other, to provide for diversity and equal employment
opportunity at all levels of our organization and to protect thehealth and safety of our employees are an integral part of theTemenos Business Code of Conduct.
At the end of 2023, Temenos employed 6,773 people
worldwide, including both full-time employees, business
partners and contractors of Temenos. Our partnerships
increasingly allow us to deliver a complete range of
implementation and support services to our clients andcomplement our growth strategies. Most of our employees
work as full-time, permanent employees. In 2023, we had 58
part-time employees (37 women and 21 men) and 150 fixedterm* employees (121 men and 29 women). All employee
benefits are provided to full-time as well as temporary or
part-time employees based on the requirements mandated by
the laws in the countries where we operate and the locations
where we recruit.
*	142 employees were moved onto a fixed-term contract, the majority
in Dubai in line with changes to the UAE labor law. The amendment
to fixed-term employment contracts in UAE is mandatory for all
private sector companies.

Diversity, inclusion and equal opportunity

Temenos is a truly global and diverse team of 86 nationalitiesin 56 offices across 39 countries. Our differences are our strengths.
At Temenos we Care, we Collaborate, we Challenge and we
Commit to implementing a Diversity, Equity and Inclusion (DEI)
strategy, starting with our own people, ending with our clientsin over 150 countries and their customers, driving collaborationand enabling all our colleagues to succeed.

87

We are committed to knocking down barriers so everyone canbe themselves and thrive. That starts with our own teams. We
know this is the right thing to do, and we also know that having
different viewpoints fuels our innovation. It provides different
perspectives and better collaboration to serve our clients andenables us to find and keep the best people in our industry to
make better solutions.
We are committed to an inclusive workforce that fully
represents the many different cultures and backgrounds
within our organization, and that of our clients, our Partners
and our communities.
Our business philosophy and our organizational structure arebased on cultural diversity, as we operate using a matrix ofregional and global business functions. We encourage
decentralized work processes and cooperation between ourpeople across countries and regions or anywhere in the world
when traveling, while maintaining a central process approachon core activities and decision making.
In addition, thanks to the diversity model we support,
Temenos’ software has multiple country model platforms,
tailored to the individual language, currency, regulatory andreporting requirements of each country. This enables oursoftware to be seamlessly integrated into banks around theworld, adding incremental value from the very beginning ofeach project.

People experience

We aim to foster a unique and inclusive people experience
where everyone feels valued, regardless of their background,
identity or personal situation. We are constantly learning andevolving to create the best possible work environment for ourpeople. This means listening closely to what our employees
have to say about their Temenos experience, analyzing dataand internal surveys and staying on top of industry bestpractices. We are committed to empowering every Temenos
employee to thrive and be their authentic selves at work.

Integrated Report88

Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

Investing in Our People continued

Diversity dashboard

We monitor the effectiveness of our strategy towards diversity through the Temenos diversity dashboard. Our dashboard data
is a very important aspect of our diversity and inclusion efforts, but cannot present the full picture. We are always looking for
new ways to capture the information, despite legal and country limitations, and in such a way that would help us shape andcommunicate the Temenos experience the best way possible. This ongoing process is helping us understand better thediversity of our people and make more inclusive decisions.
B For more details on methodology, assumptions, contextual information and potential fluctuations, please refer to About this Report

Non-employees

Temenos employees by region and genderAsia Pacific

Board ofDirectors

129 254384 728

Europe

1,557

India
Middle East
and Africa

2,720

190 422
Female

1,557

2,720

189 421

1,557

Middle East
and Africa

2,720

190 422
FemaleAmericas

1 1

Asia Pacific

1 0Europe

2 3

India

Male

0 0

Middle East
and Africa

23 65

Americas

1 0

Temporary employees by region and gender382 725

India

19

0 0

Female128 254

EuropeIndia
Middle East
and Africa

Male

Permanent employees by region and genderAsia Pacific30

Europe48 183

FemaleMale

5 1Asia Pacific354 709

Americas31Part-time employees by region and gender124 253

India

20

60

Male

EuropeMiddle East
and Africa

38

FemaleFull-time employees by region and genderAsia Pacific

Business
partners
External
contractors

49 183

Americas

3 5

Male

Americas

26

118

0 0
FemaleMale

Total headcount*
6,773

2023

7,566

2022

8,661

2021
2020

7,828

2019

7,854
* Including both Temenos employees and non-employees.

Integrated Report

Temenos AG Annual Report and Accounts 2023

89

Workforce gender diversity% of women in the total Temenos workforce% of women less than 30 years old

40

50

35

40
35

30

30

25

25

20

20

15

15

10

10

0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

02014 2015 2016 2017 2018 2019 2020 2021 2022 2023

By gender in certain regions

By gender and nationality*

FemaleMale

United States

32%

68%

IndianFemaleLuxembourg

26%

74%

British

Male

25.1%

46.5%
0.8%

2.9%

Romania

66%

34%

American

1.1%

2.1%

Switzerland

28%

72%

Romanian

2.0%

1.1%

UK

25%

75%

French

0.4%

1.3%

India

36%

64%

*	Top five nationalities in terms of headcount as per
DJSI requirements.

By gender and employee category
FemaleBy gender and employee level
Male

FemaleMale

Non-tech

34.2%

65.8%

Management

19.7%

80.3%

Tech

35.6%

64.4%

Mid-level
management

28.6%

71.4%

Individual
contributor

37.1%

62.9%

90

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Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

Investing in Our People continued

Diversity dashboard continued
Leadership diversity

Workforce race diversity (US only)

Board of Directors by gender and age*

By race (US only)

Grand total

37.5%

62.5%

50+

37.5%

62.5%

30–50

0% 0%

<30

0% 0%
FemaleAsian
25.4%
Black or African American 3.6%
Hispanic or Latino
12.2%
White
54.8%
Other
1.7%
Not disclosed/available
2.3%

Male

Executive Committee by gender and age*

By race and employee level

Grand total

40%

60%

Asian

50+

0%

60%

30–50

40% 0%<30

0%Black or African
AmericanHispanic or
LatinoFemale

0%

White

Male

10 9 58
0 0 11
10 5 22
17

27

Other

0 1 4

Not disclosed/
available

0 1 6

122

Management
Mid-level management
Individual contributor

Management Board by gender and age*Grand total
50+
30–50
<30

% by race and employee level

30%
20%

70%
20%

10%

50%
0% 0%

FemaleMale*	Board of Directors, Executive Committee and Management Board
as of 31 December 2023.

3.3 3.0 19.1

AsianBlack or African
AmericanHispanic or
LatinoWhite

0 0 3.6
3.3 1.7 7.2
5.6

8.9

Other

0 0.4 1.3

Not disclosed/
available

0 0.3 2.0
Management
Mid-level management
Individual contributor

40.3

Integrated Report

Temenos AG Annual Report and Accounts 2023

91

Temenos employees
By gender and age

By gender and employee category
Non-tech

175 481

50+
30–50

1,053

<30

1,081
Female1,283

Services

2,089

1,224
Female

2,218

Male

Male

By gender and employee level

By gender and function
104 327

Cloud

1,085

Tech

2,543

Management564

Mid-level
management
Individual
contributor

1,257

Sales andMarketing258 473

R&D

1,120

GeneralAdministration

263 359
Female68 277292 730
1,949
Female

1,891

3,300

Male

Male

By function and age
200 209 22

Cloud
Services

580

995

Sales andMarketing246

105 452 174
1,367

R&D
GeneralAdministration

1,490

154

112 450 60
<30

30–50

50+

New employee hires

By gender and region

By gender

26 46

AmericasFemale33%
Male

67%

Middle East
and Africa

16 25
118

India

35 55

EuropeAsia Pacific

268

10 25
FemaleMale92

Integrated Report

Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

Investing in Our People continued

Diversity dashboard continued
New employee hires continued
By gender and age

By gender and employee level

50+

11 24

30–50

80

171
114

<30
Female3 16Management
224

Male

Mid-level
management
Individual
contributor

4 10
198
FemaleBy region*

393
Male

By race (US only)
Asian
11.8%
Black or African American 8.8%
Hispanic or Latino
5.9%White
64.7%
Other0%
Not disclosed/available 8.8%

Asia Pacific
6%Europe14%
India62%
Middle East and Africa
7%
Americas11%*	New employee hires from a region/total number of new
employee hires.

Rate by gender and age

Rate by gender and region
0.4% 0.7%

AmericasMiddle East
and Africa
India

30–50

0.2% 0.4%
1.8%

4.1%

0.2% 0.4%
FemaleMale

Open positions filled by internal candidates(internal hires)*
59%

2023
53%

2022
47%

2021
2020

31%

2019
* Internal hires as per DJSI requirements.

<30

0.2% 0.4%
1.2%

45%

2.6%

1.7%
Female0.5% 0.8%

EuropeAsia Pacific

50+

Male

3.4%

Integrated Report

Temenos AG Annual Report and Accounts 2023

93

Employee turnoverBy gender

By gender and region
27 54

AmericasMiddle East
and Africa

Female38%
Male62%

5 20
392

India

38 95

Europe13 28

Asia PacificFemale

30–50

Male

By gender and employee level

By gender and age
50+

581

21 66

4 29

Management

136

357
318

<30
Female355

MaleMid-level
management
Individual
contributor

41 85
430
FemaleBy region*

664

Male

By race (US only)
Asian
14.9%
Black or African American 0%
Hispanic or Latino
6.4%
White
65.9%
Other
4.3%
Not disclosed/available
8.5%

Asia Pacific
3%Europe11%
India
78%
Middle East and Africa
2%
Americas6%*	Leavers at a region/total number of leavers.

Female0.2% 0.4%

Male

9.3%

Asia Pacific0.6% 1.4%

19.5%

Europe

8.8%

19.8%

5.9%

India

18.9%

0.1% 0.3%

21.5%

0.4% 0.8%
17.9%

Middle East
and Africa

9.9%

Americas23.6%

Turnover rate

Rate by gender and region

FY-20*

FY-21

FY-22

FY-23

Total employee turnover rate
Voluntary employee turnover rate

Rate by gender and age
50+
30–50

*	Includes employees turned to external contractors (HCL Project).

0.3% 1.0%
2.1%
4.8%

<30
FemaleTurnover rate by gender*

5.4%

Male

5.3%

7.2%

Total
Voluntary

3.6%

5.7%

FemaleMale*	As per GRI, turnover rate refers to the proportion of
employees who leave over a set period (often a year),
expressed as a percentage of the total workforce.

11.7%

94

Integrated Report

Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

Investing in Our People continued

Equal pay and gender pay parity

As part of our long-term DEI strategy, we are committed tomaking sure everyone is given an equal chance in opportunities,
growth and compensation. Our pay practices are reviewed
annually to address any gaps among the 39 different countries
we operate in, based on the role performed and factors suchas skills, tenure, gender and race. Our compensation structure
is set to be competitive in the market and equitable internally.
Temenos currently has a mean gender pay gap of around 32%,
which represents a 4pp decrease compared to 2022. We arecommitted to reducing further the gender pay gap throughtransparent and effective action plans and global initiatives.
In order to ensure that employees performing the same work
receive consistent compensation opportunities, we evaluate
and refine our compensation Programs annually across various
talent segments (e.g. gender, race and ethnicity). As a result of
these reviews, we are proactively identifying and addressing
factors that may contribute to pay gaps.

Salaries are reviewed annually, taking into consideration
the cost of living per country so as to ensure all Temenos
employees are paid above the applicable jurisdiction’s
minimum wage, but also above the living wage*.
Temenos complies with the various statutory pay gap reporting
obligations at country level, using the methodology required by
local governing law. Temenos publishes the UK Gender Pay Gap
Report which analyzes the difference between the mean andmedian earnings of men and women across our UK operations.
In Australia, Temenos submits the annual compliance report,
under the Workplace Gender Equality Act.
*	For the UK, it refers to the living wage as determined by the Living
Wage Foundation. For Ireland, it refers to the living wage as
determined by the Living Wage Technical Group. In all otherjurisdictions, it refers to a wage which is higher than the legal
minimum and takes into consideration all relevant living costs.

Women per pay quartile (%)*
Pay quartile

Management Mid-level management

Individual contributor

Women distribution

Top

21%

27%

26%

17%

Upper middle

17%

23%

36%

23%

Lower middle

16%

25%

44%

30%

Lower

24%

40%

43%

31%

Women distribution

3%

13%

84%

*	Pay quartiles are calculated per employee level. In 2023, we decided to add on the table the women distribution per pay quartile and employee
level to get more comprehensive insights. The percentage of women per employee category can be found in the respective chart in the
Diversity Dashboard.

Mean gender pay gap
32%

Global workforce

29%

Individual contributors
12%

Mid-level management
Management

7%Temenos AG Annual Report and Accounts 2023

Inclusive culture
Accelerating our diversity journey forward

The technology industry, among others, faces a gender diversity
problem. As a global company with presence in many countries,
we are committed to advancing gender diversity in ouroperations, value chain and community investment Programs.
As part of our diversity and inclusion strategy, we are actively
recruiting and retaining qualified women, while supporting themin their career development, with the aim of achieving an equal
representation of male and female employees in our Company.
The principles and goals of the Universal Declaration of Human
Rights are at the center of our diversity initiatives.
According to the latest Global Gender Gap Report 2023 by theWorld Economic Forum, it will take another 131 years tocompletely close the global gender gap, which has been closed
by 68.6% in 2023. Women have not been hired at equal rates
across industries, despite an increase in the proportion of
women in leadership positions over time. In particular, only 28%
of leadership roles are held by women in the technology
industry. At Temenos, we have achieved 50% gender diversity
in top management positions (one level away from CEO).
Although the science, technology, engineering andmathematics (STEM) workforce has grown rapidly in recent
decades, the share of women is uneven across STEM job types.
In particular, women make up almost half (49.3%) of total
employment across non-STEM occupations, but just 29.2% of
all STEM employees. In the technology industry, the share of
STEM occupations stands at 23.4% for women. While thepercentage of female STEM graduates entering into STEM
employment is increasing with every cohort, the numberson the integration of STEM university graduates into the labormarket show that the retention of women in STEM even one
year after graduating sees a significant drop. In school, STEM
subjects tend to be marketed heavily towards boys rather than
girls, according to European Women in Tech. Therefore, theinterventions have to start from school all the way up to
women’s career development.
At Temenos, the female representation in STEM-related
positions is at 35% (as of the end of 2023). We have developed
a strategy to attract and retain women in STEM-related roles,
focusing on the following directions:⚫

through our detailed diversity dashboard, we monitor closely
and understand gender diversity in our Company;⚫

based on the insights and coupled with the Company’sbusiness directions, we draft diversity policies internally,
focusing on five areas: Recruitment, Retention, Pay,
Advancement and Representation, for a more genderbalanced work environment;⚫

we work with schools and universities to fund girls throughtargeted scholarships to study STEM and motivate them toeventually join the tech industry;⚫

we also provide job opportunities to build work experiences,internships and mentoring Programs that would encourage
women towards tech after graduation; and⚫

we walk the talk and lead by example, by showcasing womenin managerial positions as Temenos female role models,offering women the opportunity to progress and succeed
in senior roles.

Integrated Report95

At Temenos, we are committed to increasing gender diversity
globally to 36% by 2025 and 40% by 2030, as well as toincreasing racial diversity in the US to 40% by 2025, and we are
extremely satisfied to see that with our diversity strategy put
in place as early as 2014, today we have almost reached ourtargets. At the Company level, the female representation in the
total Temenos headcount is at 35%, while the racial diversity in
the US is at 43% (as of the end of 2023).
We have focused as early as 2014 on gender diversity in
the IT workplace and have fostered an equal opportunity
environment for both men and women. Our CEO has theexecutive oversight for diversity issues throughout theCompany, signaling the importance of gender diversity andleading by example. DEI is such an important part of our talent
agenda and as such we have dedicated resources who manage
DEI. At Group level, it is led by our Head of Global Attraction
and DEI who reports to our Chief People Officer (member ofthe Executive Committee).
Our DEI strategy consists of five areas: Recruitment, Retention,
Pay, Advancement and Representation. Our global, regional andlocal people & culture teams use quarterly analysis to identify
and address challenges, reviewing gender balance anddiscussing key initiatives to increase the proportion of female
employees. The CSR and Ethics Committee is updated
regularly on progress and approves the directions.
Achieving gender equity in the workplace, at all levels, remains
a significant challenge for most businesses. We understandthat change takes time, particularly for the initiatives thatencourage women to choose a career in IT, which will
ultimately improve gender diversity. We are committed tocommunicating internally and externally the importance aswell as the benefits of gender diversity, designing targetedinterventions and monitoring progress over time.

Empowering our people

All employees have a role to play in building and maintaining
a diverse and inclusive culture. By sharing their backgrounds,
interests or concerns, they can connect, embrace theirdifferences and make them forces for positive social andcultural change. By forming employee-led and run groups, they
ensure that Temenos is a “safe” place, where everyone canbring their true selves to work every day and work to leverage
our diversity as a catalyst for innovation.
In 2023, we launched two important partnerships to support
our DEI efforts and demonstrate our commitment towards our
vision and strategy.

96Integrated Report

Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

Investing in Our People continued

Inclusive culture continued
Empowering our people continued

Powered by Diversity was one of our major Partners in 2023.
We ran an Ambassador Program for our employees in Europe
with its experienced team of trainers and provided open
access to all Temenosians to its DEI events and workshops
as part of its Cultural Calendar Club.
1. T
 he Diversity Ambassador Certification was obtained by agroup of 46 Temenosians who completed a nine-week
Program that included the following themes:⚫

Recruiting inclusively – Everything you need to know aboutfinding, appealing to and hiring diverse talent.

⚫

Disability and chronic illness – Rethinking disability, illness
and the limits placed on these communities.

⚫

Religious inclusion – The importance of religion to your peers
and colleagues, and how to value it.

⚫

Sex and gender equality – What you need to know about sex
and gender equality today.

⚫

Talking about race – How to have productive conversations
about race, ethnicity and anti-racism.

⚫

Neurodiversity – Introducing neurodiversity and how to
attract and include neurodiverse talent.

⚫

Gender diversity – What you need to know about gender
identity and how to talk about it.

⚫

LGBTQIA+ acceptance – We’re here, we’re queer and all wewant is your understanding.

⚫

Age inclusivity and ageism – Why age inclusion is importantsocially and commercially.

2. All year long, the Cultural Calendar Club hosts DEI events
and workshops where professionals in the field come tospeak about the month’s DEI events. Cultural Calendar Club
provided Temenosians with the opportunity to learn more
about their areas of interest, including mental health,parenting, LGBTQIA+ communities, health, religions andcultures and many others.
At the end of 2023 we also partnered with Code First Girls,
one of the largest providers of free coding courses for women
globally. Code First Girls is a social impact organization
dedicated to transforming tech by providing the skills, space
and inspiration for women to become developers, data
scientists and future leaders across a range of industries.
By partnering with them, we have taken another vital step
towards fostering a diverse and inclusive workplace.

Employee communities

Employee communities are networks of employees that form
based on shared characteristics or background, sponsored by
the organization they work for. Usually, EC members sharecommon needs in the workplace. The groups advocate forthemselves, and in addition to fostering their own professional
development, often become a valuable resource to theiremployers, providing information about their identities,
performing community outreach, opening new networks forrecruiting, supporting business objectives and serving as avisible sign of their employers’ commitment to a diverse andinclusive workplace. All of these communities will reflect theunique culture, mission and strategic objectives of Temenos.
Below you may learn more about our long-standing
communities, as well as the newly launched ones, and about
their achievement so far.

Women@Temenos

We continue to be committed to increasing the representationof women in Temenos at all levels, functions and locations, aswell as to creating a strong network of women and allies tosupport one another across the organization.
Over the past 12 months, our online community has grown toover 800 women and allies; the Career Fireside Chat hascontinued, and this year we’ve expanded beyond the senior
female employees sharing career advice to include other topics
for male colleagues as well, such as “Allyship”; from August
2023, we launched “Women@Temenos Monthly” to include avariety of women’s career topics and discussions; and this year,
we once again joined thousands of people around the world to
support Breast Cancer Awareness Month; over 30 cities and
400 Temenosians participated, running, walking, cycling andraising funds and awareness for this important cause.

Parents@Temenos

Parents@Temenos, which started in the summer of 2023, is a
rapidly growing employee community that has quickly gained
popularity among Temenosians.
The group has over 230 members from all around the world
and aims to provide Temenosians with a safe place to discussand tackle parenting and family-related topics.

Temenos AG Annual Report and Accounts 2023

Integrated Report

97

The community is open to everyone interested in the topic ofparenting and family care: people who are parents, aspiring
parents, soon-to-be parents, grandparents, primary carers forfamily members, managers supporting team members who
have become parents, and anyone else interested in familyrelated topics!
The community organizes live events for all employees,
actively debates various topics on the community channel
and blogs about matters of interest to the group.

¡ALMA!

¡ALMA! is another employee community that was founded in
2023 with the objective of sharing, educating and embracing
various Latin American traditions.
This group is accessible to everyone who wishes to learn more
about the Latin America region and culture.
The community has over 100 members, publishes once a week
(Viernes con ¡ALMA!) and has over 200 attendees during eachof its live events.
¡ALMA! is exploring themes like:⚫

history;⚫

culture;⚫

relevant content;⚫

art/music/dance;⚫

architecture;⚫

places to visit;⚫

recipes;⚫

traditional clothing; and⚫

customs.

The Souls by Temenos

This is our music employee community/band located in
Chennai and Bangalore, with the goal of promoting music, thepositive effects of music and the vast Indian musical culture.
Temenosians who sing and play various instruments compose
the community. In 2023 The Souls performed on stage atseveral Temenos events across India and planned a large eventto celebrate International Music Day.
In 2024, the group aims to play for CSR initiatives, develop
partnerships with other communities and promote otherdiverse groups through its traditional music.

LGBTQIA+ employee community

Before the end of 2023, we launched the LGBTQIA+ employee
community, a dynamic and inclusive space within Temenos,
dedicated to fostering a workplace where everyone, regardlessof sexual orientation, gender identity or expression, can thrive.
We plan to create a supportive network that champions diversity
and empowers our LGBTQIA+ employees through professional
development, community engagement and advocacy.

Elimination of discrimination and preventionof harassment

Temenos is proud of the diversity of its people and believes inan equal employment opportunity for all. The work
environment at Temenos is free of any type of harassment
based on race, religion, national origin, ethnicity, color, gender,
age, marital status, sexual orientation, gender identity or
disability or any other personal traits or characteristics that are
not work related. Any behavior contrary to this principle will
not be tolerated.
This forms a part of our Business Code of Conduct, which is
publicly available and all employees have to read andacknowledge this when joining the Company and annually after
that. All employees are required to complete anti-harassment
training annually, as part of the Business Code of Conduct
mandatory training. Through the respective communication
channels, as communicated in the Code as well as through ourPeople department, employees are encouraged to report any
concern of discrimination and harassment. Any retaliation withregard to any such report is strictly forbidden. In case a concern
is raised or detected, an internal independent investigation will
be launched as quickly as possible, which will be conductedcarefully and with full discretion, and any corrective or punitive
action taken, if appropriate, will be subsequently reported
directly to the Board of Directors. Our anti-discrimination andanti-harassment policies apply to employees and contractors,
as well as suppliers, Partners and clients. In 2022, we launched
our Working with Integrity Principles Policy that covers bullying
or harassment of or by anyone engaged to work at Temenos,
and also by third parties such as clients or suppliers. The policy
encompasses bullying or harassment that occurs in theworkplace, and also out of the workplace, such as on businesstrips or at work-related social events.

98

Integrated Report

Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

Investing in Our People continued

Inclusive culture continued
Freedom of expression and privacy

Supporting our employees during transitions

We believe that access to information technology can support
greater freedom of expression, which in turn depends upon theright to privacy if it is to be exercised effectively. We respect
people’s right to freedom of expression and their right tofreedom from arbitrary and unlawful interference with privacy
online. We ensure this through our Code and the respective
privacy policies.

Against forced and child labor

At Temenos, we condemn forced or compulsory labor
practices. We comply fully with local minimum age laws andrequirements and do not employ children. We ensure thisthrough our global and local People & Culture andrecruitment policies.

Freedom of association and collective bargaining

As stated in our Business Code of Conduct, we respect theright of our employees to join or not to join trade unions orsimilar external representative organizations as defined in the
ILO Declaration on Fundamental Principles and Rights at Work,
while we engage in a constructive dialogue with employee
representatives. Local employment laws and practices,collective bargaining agreements and individual contract terms
are followed. Where mandated by local law, we have 100%
employees covered by collective bargaining agreements. We
provide policies and communication channels for hearing andaddressing the concerns of our employees and resolving theirissues in an open, fair and transparent manner. Freedom of
association and collective bargaining is a fundamental
principle, which is respected and valued by the Company for
all of its employees. We comply with all relevant collective
bargaining agreements in countries where we operate. We
follow as a minimum the local law requirement; we also
require subcontractors to comply with all relevant collective
bargaining agreements and to provide documentation ofcompliance. All Temenos employees based in Brazil, France,
Spain and Romania are covered by collective bargaining
agreements that cover various topics such as health andsafety, working conditions, talent and development,
discrimination and harassment. In France, Germany andLuxembourg, employees maintain work councils and healthand safety committees. The local People & Culture
departments work as an enabler to make sure that all
agreements are followed through as agreed. Working
conditions and employment terms are not influenced ordetermined based on collective bargaining agreements for
Temenos employees based in countries except for Brazil,
France, Spain or Romania.
Employees covered undercollective bargaining agreements
CountryNo.

% oftotal headcountBrazil

16

0.24%
0.86%

France

57

Spain

23

0.35%

Romania

197

2.98%

Total no. of employees

293

4.43%

Temenos partnered with Randstad RiseSmart, which provides
a range of career transition Programs to accompany theemployees terminated or close to retirement and offers themtools for a successful transition out of the Company. Participantsin this Program benefit from personalized one-to-one coachingsessions and access to a wealth of live and on-demand
resources, empowering them to explore and navigate theirdiverse career options. This Program is designed to facilitate aseamless move to the next chapter of their professional journey,
whether it involves other career opportunities, retirement
planning, entrepreneurial pursuits or board appointments, and it
is a testament to our commitment to employee growth beyond
our corporate walls.

People experience
Learning and development

In 2023, our learning initiatives remain closely aligned with theinsights gathered from engagement surveys, talent discussions
with managers and Directors, performance reviews, and thelatest industry and market trends. The cornerstone resources
for information, learning and knowledge dissemination are theTemenos Learning Hub, Seismic for our Sales and Marketing(S&M) employees and the Temenos Learning Community.
Within our learning ecosystem, we integrate internal content
developed in house through both instructor-led training andon-demand modules. Additionally, we leverage external
content collaboratively created with Partners, learning vendors
and sales tools providers, such as Articulate, LinkedIn Sales
Navigator, Redhat, etc.
Our approach to learning is strategically crafted to align with
global trends in employee education, emphasizing bothon-the-job training (OJT) and on-demand learning. OJT is
immersive, practical and directly linked to job tasks or
outcomes. A notable example is the enablement strategy
devised for the global implementation of the new Cash-PriceQuote module. On the other hand, on-demand training offers
flexibility, allowing learners to access resources, courses ormaterials at their own pace and convenience. An illustrative
instance from this year is the provision of SaaS certifications–
SaaS Fundamentals and SaaS Practitioners–for our Sales andBusiness Solutions Group (BSG) employees.
While we still offer some “traditional” forms of learning, suchas formal in-class information transfer, our goal is for thismode to constitute only 10% of our offerings. This aligns withthe 70-20-10 rule embedded in our Global Learning Framework.
The positive response from employees to this approach isevident in the results of the employee engagement survey,
underscoring the success of our dynamic and adaptive
learning strategies.
As we embark on the new year, our L&D vision is confided toembrace several key enhancements. Our foremost objective isto fortify the onboarding process across diverse functions. To
address evolving learning needs, we are introducing innovative
L&D strategies, such as microlearning. This approach is tailoredto accommodate shorter attention spans and satisfies thedesire for immediate learning outcomes, leveraging theconcept of instant gratification in learning performance.
Additionally, we recognize the transformative impact ofgenerative AI in making AI more accessible for swift andefficient learning experiences.

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99

In our ongoing commitment to L&D, we are in tune with theescalating demand for soft skills across various functions.
Our focus encompasses vital skills such as negotiations,presentation techniques, effective communication and criticalthinking. Furthermore, we are aligning our offerings with thegrowing emphasis on ESG principles. In response to the highsignificance of diversity, equality, a sense of belonging and theimperative commitment to address climate issues, our L&D
initiatives aim to inspire these values in our learners.

Additionally, our Women Leadership Programs addressed thespecific needs of female leaders, fostering skill development
and confidence to thrive on their leadership journey. In parallel,a Presentation Skills Training Program was introduced for ourtalents, enhancing their abilities in impactful businesspresentations. These Programs collectively exemplify our
dedication to providing diverse and accessible training
opportunities, fostering growth and success throughout
our organization.

In the pursuit of continuous learning, we acknowledge theparamount importance of self-directed learning. Our approachprioritizes autonomy, flexibility and a robust emphasis on
applicability. Learners can ascertain the practical relevance of
their acquired knowledge to their day-to-day responsibilities,
ensuring that the learning experience is not only enriching but
also directly impactful in the context of their daily roles
and tasks.

By December 2023, we achieved 75 hours or 9.4 days ofaverage training per employee, excluding on-site coaching andfeedback by people managers and other development
activities not recorded in our systems. The average training
cost for the same period was USD 5,830.

Leadership development training

In 2023, we partnered with Randstad RiseSmart to deliver acomprehensive leadership development Program. This initiative
enhanced coaching skills for our people managers,
empowering them to conduct effective career conversations.
Workshops facilitated by external coaches and global webinars
focused on coaching and objective-setting skills for all people
managers. To ensure sustainability, a “train the trainer”
workshop by Randstad RiseSmart developed 15 internal
trainers for ongoing leadership development globally.
Additionally, we launched two leadership development
Programs tailored for female talents. The first Program targets
emerging leaders, offering a 12-month experience developed incollaboration with Actuate Global. It focuses on fostering
confidence, expanding skills, identifying opportunities andachieving career advancement through classroom training,e-learning and personalized coaching sessions.

The annual recorded average training hours by gender,function, age group and employee level are shown in the
figures below.

Average training hours
By gender
Female



Male

71

By function and age
Cloud



Services

Sales andMarketingR&D

By age group

Upskilling and reskilling

40
79
6



GeneralAdministration

The second Program supports senior female leaders at
Temenos, enhancing their skills and confidence on theleadership path. Developed in partnership with Diafora, it
offers intensive face-to-face training through full-day
workshops. These initiatives underscore our commitment toempowering women within Temenos to thrive and excel inleadership roles.
Career development is a key element of our talentmanagement strategy, and in 2023, our commitment toemployee career development led to various tailored initiatives.
Internally curated e-learnings cover essential soft skills from
communication skills and time management, to unconscious
bias and receiving feedback, enabling employees to build andelevate these skills at their own pace. What is more, we built
and delivered with internal and external trainers dedicatedworkshops to our people managers promoting the culture of“acting as coaches” by promoting the two-day dialogue for
effective objective setting, empowering them to guide theirteams proactively.

82

107
10

<30



30–50



50+



122
50
39

By employee level
Individual
contributor
Mid-level
management
Management



90



22
6

100

Integrated Report

Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

Investing in Our People continued

People experience continued
Performance management

Building on best practices from the market and learnings
based on employee feedback as part of the annual employee
engagement survey, we continued to enhance our performance
management process by providing the means and tools for
employees to be empowered in driving their performance andgrowth. In 2023, we promoted a continuous feedback culture
by introducing ongoing check-ins on performance conversations,
growth plans and wellbeing needs on a quarterly basis andupdating our HRIS accordingly to record and capture all theseexchanges. In parallel, during the annual end of year
performance review process, we added the self-rating option,
as a way for employees to do a self-review and assessment of
their own contributions and value delivered. In all theseenhancements, change management was key and therefore wehave hosted in 2023 several enablement sessions for people
managers and individual contributors to take them through thenew processes, explain their role in it and communicate on
timeline and next steps. On top of that, we have run 12
webinars and 12 workshops on how people managers can act
as coaches, to ensure we support them in having targeted,successful and meaningful discussions with their teams. Last
but not least, we have developed dedicated e-learnings,
available to all staff, on objective setting, giving and receiving
feedback and unconscious bias along with limiting beliefs, inorder to ensure our people are supported along the way,
throughout the year.
This way, performance management at Temenos not only
enables an open and two-way dialogue, but also plays a pivotal
role in establishing trustful and reliable relationships as afoundation for employee growth and high performance.
To accommodate business changes, in 2023, we held theperformance management process in Q2 and 5,477 eligible
employees participated in it.
The number of employees who received career progression
during the performance management process as well as thenumber of employees whose performance has been reviewed
is reported by gender and by function, while Temenos offered
the remaining people with career developmental feedback andlearning opportunities. In addition, throughout 2023, there wereout of cycle career progressions as shown on the next page,
which reflect our investment in our employees’ career growth.

During talent review cycle – 2023
Talent review communication
By gender
Female



Male



1,861
3,465

By function
361

Cloud
Services

1,482

Sales andMarketing

511

R&D



2,480

General 492
Administration
Career progress
By gender
Female



Male



1,849
3,401

By function
360

Cloud
Services

Sales andMarketing

 506

R&D



General 492
Administration

1,470

2,422

Integrated Report

Temenos AG Annual Report and Accounts 2023

Out of talent review cycle – 2023

Talent Cards and growth plans

Talent review communication
By gender
Female



Male



407
695

By function
Cloud



Services

Sales andMarketing

144

R&D



General
Administration

121
305

410
122

Career progress
By gender
Female



Male

646

382

By function
Cloud



Services

Sales andMarketing



R&D



96
289
143

General116
Administration

384

101

In 2023, we further expanded our commitment to employee
growth and development through the introduction of “Talent
Cards” by developing a seamless, fully digital and Companywide process. Building upon the success of a pilot Program
initiated in 2022, we fully redesigned the global talentmanagement framework and created a brand-new module
within our internal HRIS called “growth”. Launched in
December 2023, this novel approach encompasses all
employees, ensuring a consistent, global and common
framework when referring to growth and development
across Temenos.
Rooted in an employee-centric philosophy, the process
empowers individuals to proactively manage their career andindividual development plans, fostering a self-driven approachto professional growth. Simultaneously, managers areequipped with robust tools and frameworks, allowing them tostrategically navigate their teams’ development, by assessing
growth potential and determining appropriate development
needs, addressing retention through informed and targeted
actions, implementing thoughtful succession planning andassessing the flight risk. This holistic initiative reflects ourunwavering commitment to nurturing talent, fostering a cultureof continuous development and elevating the overall successof our organization.

Josh Bersin Academy

As at Temenos we believe in the power of continuous growthand development, in 2023 we offered to our whole People &Culture team access to a best-in-class learning experience,featuring a global community of HR practitioners for acollaborative learning experience. Josh Bersin Academy is avirtual hub for HR upskilling giving access to a carefully curated
library of learning resources, and the opportunity to shareideas and best practices in a global HR community.
Through the academy, our People & Culture experts can accesslearning courses including, but not limited to, the latest andfuture HR trends, talent attraction and retention, equal pay,
performance management, team-centric leadership, people
experience, hybrid work, employee wellbeing and the role of AI
and other technologies in people jobs.

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SUSTAINABILITY continued

Investing in Our People continued

People experience continued
Mentoring

In 2023, our Mentoring Program has evolved into a dynamic,
year-round initiative open to all employees. With over 600
mentoring sessions conducted throughout the year and aremarkable mentee satisfaction rate of 3.95 out of 4, the Program
continues to thrive. Emphasizing a mentee-led approach,Temenos employees have the flexibility to engage as mentors,
mentees or both at any point of time. This unique framework
empowers mentees to selectively choose mentors based ondesired skills, developmental goals and functional expertise,providing a tailored people experience. Beyond skills
development, mentoring provides a platform for mentors togive back by sharing experiences and knowledge, while
mentees receive valuable career support, inspiration anddiverse perspectives to navigate their professional journey.
The Mentoring Program forms the cornerstone of ourcommitment to employees’ growth and development.

Coaching

Under the umbrella of coaching, our offerings are extremely
diverse as employees wish to be supported in various ways
and forms, to accommodate their different needs. “Executive
Coaching” is offered to our emerging and senior leaders when
they need guidance on how to navigate transformative change
and build further on their leadership skills. On top of that, we
support employees with “Returner Coaching” when they return
to work from long-term absence, including parental, sabbaticalor sick leave in case they need guidance during this transition,
while dealing with personal or professional challenges. We alsooffer “Transition Coaching” services to employees who move toanother chapter in their personal journey and grow beyond our
corporate walls, whether it involves retirement planning,
entrepreneurial pursuits or other plans. These coachingendeavors showcase our dedication to fostering employee
growth within and beyond our organization’s boundaries.

Dual career path in technology

Emphasizing our commitment to individualized employee
growth, we further promoted and invested in the dual career
path for our technology talent. This initiative allows top
engineers and subject matter experts to progress theircareers to the highest levels of the organization as
individual contributors.
The career path starts with the Curated Technology Talents,
individuals with exceptional technical skills, who espouse
Temenos values and influence Temenos broadly, outside of
their own department. The Curated Technology Talents forma pipeline which feeds into the appointment of DistinguishedEngineers, who are subject matter experts in technology andinnovation. Finally, from these groups are selected theTemenos Fellows, people who have made an outstanding
contribution to the Company. This Program accelerates
collective learning, fostering collaboration and knowledge
sharing across business lines, ensuring sustained growth forour technical talent.
A pivotal moment for our technology talents was the inaugural
Temenos Technology Symposium in October 2023, dedicatedto celebrating engineering and subject matter excellence.
During this event, we acknowledged the appointment of 24
Distinguished Engineers and 27 Curated Technology Talents,
and we intend to make it an annual tradition to unite top
technical talents from across the organization to keep
nurturing technical expertise and providing access to thought
leadership opportunities.

Integrated Report

Temenos AG Annual Report and Accounts 2023

360° feedback survey

360° feedback serves as a developmental tool wherein
employees receive confidential and anonymous feedback
from colleagues. In 2022, we developed a comprehensive 360°
feedback questionnaire by aligning Temenos values with 15
leadership competencies. To enhance user experience, we
seamlessly integrated 360° feedback into the Qualtrics cloud
platform, ensuring confidentiality while utilizing a familiar toolfor employees. Feedback is consolidated into a report andshared through one-on-one coaching debriefing sessions
facilitated by both internal and external coaches. Our goal
is to empower employees and their managers to create
personalized, targeted and informed development plans,aligning with individual growth needs and career aspirations.
This initiative embodies our commitment to fosteringcontinuous professional development and ensuring a
supportive and enriching workplace environment.

Talent Mobility

The global Talent Mobility guidelines outline the eligibility
criteria for talent mobility and the roles and responsibilitiesof those involved, and they provide a step-by-step guide tosupport our employees through every stage of the process.
We believe that through talent mobility, we can support ourpeople career progression, help them achieve their goals anddrive our business forward.
In 2023, we launched Career Talks, our new internal career site,
the Talent Attraction Newsletter and other articles and support
materials to assist internal candidates in navigating the Internal
Mobility journey.

Employee engagement

Listening to our employees helps us drive our strategy,
shape our initiatives, improve processes and create a better
people experience.
Our CEO and the executive team share regularcommunications at a global level, while employees receive
regional and functional communications covering both
strategic and operational topics. We use Microsoft 365 tools
and other channels to communicate and engage with
employees, including a SharePoint intranet, Viva Engage, video
updates, targeted newsletters, townhalls and live-streamed
events with leaders and internal surveys. In 2023 we also
launched a “Bright Ideas” feedback platform (which can beaccessed anonymously).
To ensure that we are offering our employees a seamlesspeople experience, we have partnered with Qualtrics since2021 to better measure employee engagement. Scores fromour 2022 survey were used to inform positive change across

Unit

103

our business, such as the development of our Wellbeing andCulture Program with more employee events and wellbeing
initiatives, the launch of our T-Stars employee award andrecognition platform, our new onboarding process to support
new joiners and their managers, our new mentoring Program,establishment of our Female Leaders Program, creation of our
new internal microsite with links to SaaS-related resources
and a “SaaS Explained” webinar series and many more.

2023 key highlights

One global cloud-based platform: Qualtrics
Frequency: Annually2023 survey design: 49 questions in 16 categories offered in
5 languages
2023 analysis and reporting: Received 5,898 responses(65% from male and 35% from female employees)
Confidentiality and anonymity commitment: Survey responses
are stored in third party Qualtrics servers, in alignment with
GDPR and industry standard security policies. This ensures that
all responses remain anonymous and confidential to continue
with our commitment under the Safe Harbor certification.
Our strong communication and engagement plan delivered
great results with an increase of our response rates in 2023
which were 8% higher than in 2022 and above average for ourindustry and the global norm.
Temenos leaders are committed to listening to and actioning
on our employees’ feedback. That is why we conducted several
enablement sessions in partnership with an external third
party, to analyze and explain the results, share best practices
and support people managers in developing and registering
action plans.
Our employees’ feedback showed a growing confidence in thesurvey, with 79% of respondents believing positive action will
come as a result of it, which is far above the global norm andthe industry standards. Some of our top performing categories,
as per our employees’ inputs, are around inclusion, job
enablement, work processes, wellbeing and survey follow-up.
Moving forward, we will be focusing on the creation of actionplans to address our areas of opportunity. For example, weneed to do more to focus on our compensation and benefits
policies, really prioritize our transition to SaaS-first and review
our Company policies regarding performance, accountability
and the implementation of those policies.

FY-19

FY-20 *

FY-21 **

FY-22 **

FY-23 **

Employee engagement% of actively engaged employees

62

67

68

71

72

Data coverage% of total employees

85

51

73

82

90

*	Data coverage is not comparable due to survey format change from annual to always-on in 2020. Average response rate confirmed by Gartner is 50%.
**	In 2021 we implemented Qualtrics and moved our employee survey to an annual basis.

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SUSTAINABILITY continued

Investing in Our People continued

Wellbeing at work
Promoting health and wellbeing

At Temenos, we are committed to supporting our employees’
wellbeing and creating a healthy and safe work environment.
The significance of a health and wellbeing focus at work was
highly important in 2023, following on from challenging global
events. In 2023, we continued to raise awareness on mental,
physical, financial and social health.
In 2023, we launched a new global wellbeing and culture teamto ensure that there is an increased focus on supporting thehealth and wellbeing of our employees, as well as building theculture that we need to be successful at Temenos.
Our wellbeing initiatives include:⚫

recharge days;⚫

hybrid work model, in order to balance work and personal life;⚫

international travel and medical insurance, including
health screening;⚫

on-site and online team bonding and recreation opportunities;⚫

on-site recreational rooms and stress management Programs;⚫

energy corners with healthy office snacks;⚫

learning and development Programs focusing on mental
health and wellbeing at work;⚫

multiple channels of internal communication and engagementwith our employees across countries and at all levels;⚫

recognition of their work and contribution, opportunities
to learn more about Temenos and spend time with theleadership team; and⚫

employee engagement in community service and on-siteand online volunteering projects.

Financial wellbeing webinar series
In 2023, we launched our first dedicated financial wellbeing
webinar series, with 500 participants. We are committed tocontinuing this Program to ensure that we are providing an
opportunity for Temenosians to enhance their financial literacy
and improve their economic stability.
Wellbeing weeks
In 2023 we hosted four wellbeing weeks. During thesewellbeing weeks we hosted over 100 local office events,
including yoga, meditation, sound baths, padel tennis andmany more.
Educational virtual webinars based on our pillars of
wellbeing and led by external experts (on subjects such as
personal finance and team wellbeing)
In 2023, we launched sport and physical fitness initiatives suchas the establishment of weekly sports teams like the Dubai
badminton team; sports tournaments like the Chennai Sports
League including cricket, throwball and many other sports;
one-off events designed to get employees active like a Body
Combat session in Shanghai; and fitness challenges like theTemenos “Mind and Muscle” challenge via the GoJoe app.

Dedicated wellbeing survey
In May 2023 we conducted a global wellbeing survey for the
first time and had 1,918 respondents. Our global wellbeing andculture team also traveled to the Company’s biggest office in
Chennai to run wellbeing focus groups. The results of these
initiatives are helping to inform the coming year’s wellbeing
Program. We want to ensure that the Temenos people
experience is a positive one. For more details on our 2023
wellbeing activities, please refer to our corporate website.
On top of the dedicated wellbeing survey, we also use otherlistening channels to inform our wellbeing strategy; thisincludes our annual, internal employee engagement survey andfeedback we gather at our events, during focus groups and in
our one-to-one conversations with our employees.
Promoting mental health
We created a page on our SharePoint intranet Uni-T summarizing
what mental health platforms and support are available toemployees in each Temenos location. We currently havemental health platforms and support offerings in 17 countries,
covering 85% of employees. For any locations where we do notcurrently have an offering in place, we have advised employees
to reach out to their local Human Resource Business Partner
for support, or to comment on our “Bright Ideas” feedback
form (which can be done anonymously). Our intention for early2024 is to engage a mental health platform provider to service
all locations not currently covered. We also provide resources
to promote mental health and wellbeing via Uni-T including
links to online meditations and articles (with topics including
stress management).
Another initiative we commenced in 2023 is a pilot with Quan,a science-based platform designed to measure and improveteam wellbeing and enable sustainable high performance. The
year-long 60-person pilot is scheduled to commence in Q1-24.
In May 2023 we held a Mental Health Wellbeing Week, which
included 40 local office activities (some examples include yoganidra, mindfulness exercises, a webinar on stress and apositive psychology presentation) and six global activities(including meditations guided by a clinical psychologist, avirtual team “Mind and Muscle” challenge via the GoJoe app,and a webinar on wellbeing at work by Quan). Because weunderstand the importance of leaders setting an example andhelping promote a company culture that prioritizes wellbeing,as part of Mental Health Wellbeing Week we also had fourCompany leaders share how they relax and recharge in awell-received Uni-T article.
Wellbeing Hub
In 2023 we further developed our Wellbeing Hub on Uni-T.
The page has links to wellbeing-related resources,
acknowledgment of Wellbeing Award Winners (who receive a
T-Stars award for their commitment to wellbeing at Temenos),promotion of wellbeing weeks and other wellbeing events, andresources and tips for local offices planning wellbeing events.

Temenos AG Annual Report and Accounts 2023

Building a strong community
At Temenos, we know that people are the key, so we prioritize
creating opportunities for people to come together. In 2023 weheld 316 events for our employees – a combination of global
and local office events. This included (but was not limited to)
wellbeing weeks, family days, end of year celebrations, volunteeringand fundraising events, cultural celebrations and annual
Temenos birthday celebrations. For more details on our 2023
wellbeing and culture events, please refer to our corporatewebsite. In 2023 the global wellbeing and culture teamcontinued to hold regular meetings for the people responsible
for organizing local office events (including Human Resources,
Office Managers and Wellbeing Captains) to ensure consistency
globally, create efficiencies and promote information sharing
for the organization of local office events.
An important element of our Temenos culture is bringing
people together who might not typically cross paths in their
day-to-day work. Creating opportunities to bond means ourTemenosians feel valued and have greater creativity andinnovation, better work outcomes and more effective problem
solving. Employees are encouraged to create employee
resource groups (such as Women at Temenos, Parents at
Temenos, ¡ALMA!, The Souls by Temenos and the LGBTQIA+
employee community). These groups are designed to drive
collaboration and bring attention to topics that our staff are
passionate about.
Workplace health and safety
In Q4-23, we began the process of seeking an external
consultant to advise on the requirements for ISO 45001
certification with a view to engaging a service provider in
Q1-24 and actioning their recommendations later in 2024.

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Supporting our employees as their families growTo accelerate representation and improve experience foreveryone, our policies, benefits and leave Programs contributeto an inclusive work environment where all employees feelthey are valued and have equal opportunities.

We believe that supporting our employees’ health and happinessis crucial to their success and to Temenos’ future so we have arange of benefits in place to support Temenosians in the goodtimes and the bad. These benefits apply as a minimum global
standard, but where local statutory allowance exceeds these,
they still apply.
In 2023 we created a page in our SharePoint intranet where
employees can find information on the benefits that Temenos
offers on top of local statutory requirements, both global
policies (detailed below) and region-specific insurances andlocal benefits.
Supporting professional development
Supporting our employees in developing their professional
skills and advancing towards their career goals is critical toTemenos. We understand that it can be challenging to findtime to dedicate to this, while managing the demands of their
day-to-day work. This is why we give the option to our employees
to take up to two weeks of paid leave each year for study or
personal development to support them in their current roleand help them gain the skills they need to grow. This includes
higher education and any relevant skill-based courses.
Recharge days
In order for employees to perform at their best, it is importantto take some time to “recharge” their batteries and rebalance
their bodies and minds. Temenosians are encouraged to takefour days per year to use as recharge days when physically or
mentally needed.
Marriage and civil partnership leave allowance
We grant one week of paid leave for marriages and civil
partnerships, including same-sex/civil partnerships.
Giving time when our family needs us most
We appreciate that there will be times when our employees’
personal needs and those of their families far outweigh thedemands of their work life. So, we have extended our Family
Care Leave Policy to support them to take time off when either
they or their family needs it the most. We support our people
to take up to four weeks of paid family care leave, in the caseof bereavement or critical illness of their immediate dependent(spouse or child) or a parent or anybody for whom you are a
primary caregiver. This leave is also available to mothers
following a miscarriage, abortion or pregnancy loss. Our
employees can also take up to two weeks of paid family careleave to focus on fertility treatment or surrogacy. Women going
through menopause can take up to two weeks of additional
paid leave per year.

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Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

Investing in Our People continued

Wellbeing at work continued
Supporting our employees as their families growcontinued
Maternity Policy
Minimum paid maternity leave comprises 20 calendar weeks atfull pay, with no minimum tenure required. We allow a gradual
return to work (from the date the employee decides to return),
starting at three days per week for the first month then fourdays per week for the second month and returning to five days
per week from the third month onwards, unless the employee
is returning part time. These benefits apply to all mothers,
including adoptive and foster mothers. We currently haveprivate rooms/medical rooms where breastfeeding mothers
can express milk in our Dubai, Singapore, Sydney, Chennai,
Bangalore, Hyderabad and Malvern offices and are working tooffer this in more offices moving forward.
Paternity Policy
Minimum paid paternity leave comprises two calendar weeks
at full pay, with no minimum tenure required. We also allow a
gradual return to work for new fathers, starting at four days
per week for the first month after their return and returning tofive days from the second month onwards. These benefits
apply to all fathers, including adoptive and foster fathers.
Parental leave
Employees on parental leave in 2022
Male

Female

267
237

Employees who returned to work after parental leave endedMaleFemale

267
209

Employees who returned to work after parental leave ended
and were still employed 12 months after their return to work
Male

Female161

226

Return to work rate of employees on parental leave
Total



96%

Male



100%

Female

91%

Retention rate of employees on parental leave
Total



81%

Male



85%

Female77%

Sabbaticals
At Temenos, we value tenure and loyalty. We also understandthat our employees have personal goals and commitments
outside of work and might enjoy the opportunity to take some
additional time off. Therefore, employees are encouraged totake up to two months of unpaid sabbatical leave after five
years of service, up to four months after ten years, and up to
twelve months after twenty years of working with us.
Rewarding for attracting new talent
We believe that our people are the most effective recruiters.
We encourage our employees to invite new talent into ourbusiness through their personal network. According to ourReferral Award Policy our employees are eligible to receive amonetary reward between USD 500–8,000 for referring a new
Temenosian. The value of the reward will vary depending on
the candidate’s band and location, as specified in our Referral
Award Policy. The time scale for payment is one-monthtenure of the new recruit.
Hybrid working
The flexibility of working from home can enhance work-lifebalance. At the same time, we believe that we are stronger
together at Temenos. Working from the office supports ourability to collaborate, build connections and learn from eachother. The hybrid working model we introduced in 2021 isdesigned to bring the best of both worlds. In addition, it is amajor step towards creating a more inclusive organization,
as the “ability to travel daily to an office” is not the mostimportant qualification for employment.
Temenosians can opt to work from home up to two days per
week. This policy is applicable to all permanent Temenos
employees. Any unutilized days cannot be carried forward to
the following week or month. Some roles may not be considered
eligible to work from home due to the nature of the job or thestage of learning someone is in. Such examples include but are
not limited to employees whose role require a physical presencein the office or face-to-face contact at clients’ premises.

Temenos AG Annual Report and Accounts 2023

Working from anywhere
Temenos encourages flexibility; therefore, we provide our
employees with two weeks per annum to work remotely fromanywhere. Temenosians are able to extend a holiday orbusiness trip or choose to work from a different location thanthey normally work. We also encourage them to visit the local
office, network, meet new people and get a taste of another
Temenos office if they work in the same city.
Part-time options
In some roles, Temenos allows employees to work part time toprovide an additional working option for those who prefer not
to work full time. We have part-time employees in 28% of thecountries in which we operate.
A meaningful gift for new parents: From Babies with Love
In 2023 we expanded our partnership with the organization“From Babies with Love” to provide gifts to Temenosians who
become parents, get married or lose an immediate family
member (bereavement) to be there for employees at times
that matter. From Babies with Love is a social enterprise and apurpose-led brand. Its vision is that every child grows up in aloving family. Thus, it donates 100% of its profit to vulnerable
children and Temenos has contributed more than 8,000 USD
towards this cause in 2023. Together with From Babies with
Love, we can help provide family homes, education, healthcare
and support to overcome trauma. This enables children who
would otherwise be left to fend for themselves to have asecond chance in life.

Supporting global mobility

As a global software company, we rely heavily on our global
workforce and leverage their talent to drive business success.
Our global mobility Program forms an integral part of ourservice delivery model to clients. It enables us to meetbusiness objectives while providing our employees with
opportunities to develop their skills and advance their careers.
Our dedicated team of regional experts supports mobility to
any of the 39 countries in which we operate in coherence with
our robust policies and processes that address the complex
challenges of managing an international workforce. Our teamsupports strategic assignment planning, budgeting and costmanagement, global compliance and advisory services.
We stay abreast of ever-changing global tax and immigration
legislative statutes to build and execute an effective, compliant
and cost-efficient International Mobility Program. We work withthe world-class relocation agents, tax and immigration
counsels to facilitate personal income tax consulting,immigration and shipping services.
We leverage our global mobility Program to tap into asignificantly larger talent pool and address the skill shortage
through the infusion of diverse talent pools fostering diversity
and inclusion to boost innovation and productivity. This is aproven employee retention mechanism to curb attrition tosome extent by enabling the assignees to gain on-siteexperience, professional development, flexible work
arrangements and career path visibility. We are committed toprotecting top-tier talent by strategically deploying them fromstagnant markets to active markets with sought after projects.

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107

Awards and recognition
Employee recognition

Our people and culture are what propels us forward as we
continue to deliver on our vision to transform the banking
industry. Our recognition Programs are an opportunity tocelebrate the contributions of Temenosians from across thebusiness, not only for performance excellence, but also for theachievement of our social, environmental and climate-related
targets. The nominations are related to our Temenosity values
Care, Commit, Challenge and Collaborate, reaching key milestones
or going above and beyond the role requirements. Everyone isinvited to nominate their colleagues and peers. Our employees
are highly encouraged to be inclusive and consider those inroles that are less visible but still make valuable contributions.
Temenosian Award
The annual Temenosian Award celebrates Temenosians who
have made an exceptional contribution to our business andhelped us to achieve our ambition to be Everyone’s Banking
Platform. These Temenosians exemplify everything it means towork at Temenos. They are passionate about making banking
better and they use their skills and influence to have an
impact. These individuals also act as role models and embody
our key values. Exceptionally in 2023, 30 winners enjoyed thisaward, aligning the number of winners with Temenos’ 30th
anniversary. The award includes both monetary and nonmonetary recognition, such as an invitation to our Temenos
Kick Off (TKO) event, special celebrations with senior leadersand global announcements.
The Club
The Club celebrates our top performing Sales and Business
Solutions colleagues from around the world in a unique way– a trip with our Chief Executive Officer. In previous years, theClub awardees traveled with their partners to Scotland,
Iceland, Vietnam, Barbados, Capri, Kenya, India, Morocco
and Zambia.

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Temenos AG Annual Report and Accounts 2023

SUSTAINABILITY continued

Investing in Our People continued

Awards and recognition continued
Employee recognition continued

Temenos KEY
The Temenos KEY Program was designed to emphasize
Temenos values and celebrate our motto that people are thekey. The KEY represents a reminder to all of us that in ourbusiness what counts is people, human endeavor and respectfor each other. We are a team; we are proud to be part ofTemenos and wearing the key embodies our philosophy. For
more details, please refer to our dedicated page on our
corporate website.
T-Stars
In 2023, we collaborated with Workhuman, a leading cloudprovider, to launch T-Stars, our new recognition Program.
T-Stars is an easy-to-use online platform allowing employees
to acknowledge peers seamlessly. It operates on an inclusive“everyone-to-everyone” basis, enabling all employees to giveand receive recognition, irrespective of role or location. Linked
to our values, T-Stars offers five award levels for employees tochoose from when recognizing contributions. An Award Advisor
assists in this process, recommending suitable award levels.
Some awards have monetary value (exchangeable for goods),
and others do not, since we wish to promote our recognition
culture to the next level, no matter if this results in a monetary
outcome or not. T-Stars also encourages inclusivity through its“Inclusion Advisory”, helping employees craft unbiased
messages. In 2023, over 7,500 awards were distributed, with
51% of employees receiving recognition from their peers acrossthe organization. The platform fosters interaction, with over
5,143 congratulations shared alongside recognition moments.
Specialized awards, like the “Wellbeing Award” for wellness
activities and “Hackathon Awards” supporting the 2023
winners, contribute to the Program’s success. T-Stars not only
enhances recognition but also fosters a culture of engagement
and collaboration within our organization.

Employee value proposition/social media

Temenos promotes its culture, people and lifestyle via
LinkedIn, Instagram and Facebook.
Instagram was our preferred channel for EVP material in 2023,
and we saw an 11% growth in our number of followers. The 66
posts covered a variety of themes, including CSR and wellbeing
activities, office festivities and DEI initiatives.
30-year anniversary campaign
On our 30th anniversary, we ran a record-breaking campaign
over five weeks (October–November). The developed
content was used both internally and externally. Most of thematerials are long lasting (agnostic to the campaign) andwill keep supporting us in promoting Temenos culture after
the campaign.
Three of the campaign’s social posts set 2023 highs: Campaign
launch (93 reposts); Leaders in Bangalore (21,000 engagements);
and our COO and President Product video explaining whatmakes Temenos special (40,000 views).
November was the month with the highest number of visitors
to the website in 2023 – 34,590 total visitors to the anniversary
landing page over the five weeks.
Furthermore, we engaged our people locally to gather to chatabout innovation and showcase Temenosity in:⚫

45 office celebrations in all major locations;⚫

our internal event page which received 6,410 views; and⚫

30+ videos and posts on Yammer.

Alumni group
The aim of the page is to stay in contact with former
colleagues and keep them up to date on what is happening at
Temenos, as well as to continue to learn from each other andkeep connected to each other after leaving Temenos. We liketo say, “once a Temenosian, always a Temenosian” and sincelast year, the group has grown by about 20%. This group keeps
growing and we have plans in 2024 to focus more on expanding
it even further.

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109

Empowering Our Local
5 Economies and Communities
Enabling access to financial services

Credit unions, savings banks, microfinance, community
banks and other non-bank financial institutions are thefoundation of sustainable financial inclusion and thedevelopment of healthy, sustainable local financial markets.
At Temenos, we understand the need to strengthen andsupport community-based banking, through the provision ofmodern digital technology and services to strengthen ourbusiness to serve our communities and expand our outreachto the unbanked. We offer solutions that are appropriate to
the market, transparent and inclusive, while facilitating
emerging markets that are still cash dependent.

Investing in our communities

The innovative spirit driving our business successes alsofuels our commitment to fostering positive change in thecommunities we serve. Motivated by a strong desire forpositive transformation, Temenos goes beyond financial
contributions and leverages our assets, expertise andpartnerships to empower communities. We align ourinvestments with our mission and business goals to createshared value and foster sustainable development that lasts
beyond our involvement. Furthermore, we collaborate with
Partners in promoting local development and creating
long-term benefits.

Contributing to the UN SDGs

Our goal is to foster innovation and sustainable economic
growth, promote gender equality, economic inclusion, andempower women through the use of technology. Our
Adopt-iT Program not only benefits communities outside
our business, it reinforces our core values of operating
responsibly and uses our technology, expertise andresources for good within Temenos, inspiring many todedicate their time to helping others.

2023 key highlights

13

computer labs in India since 2017

1

solar-powered innovation lab and green
data center

1,370+
volunteers

36,694students reached through the Adopt-iT CSR
India Program, since the Program was launched

We empower communities throughthe power of digital technology
and financial inclusion, forging
a more equitable world for all.

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SUSTAINABILITY continued

Empowering Our Local Economies and Communities continued

Enabling access to financial services

Temenos Financial Inclusion

Unfortunately, many countries are still far from achieving thattarget. To eliminate global extreme poverty by 2030, which isinterpreted as reaching a poverty rate of less than 3%, thesecountries will need to grow their economies substantially toeliminate poverty.

It is used by clients starting up with no customers or accounts, up
to as many as 7 million accounts, all with the same configuration.
Many NGOs went on to obtain full banking licenses because of thesoftware and no changes were required.

Current projections suggest that in 2030, 574 million people,
equivalent to nearly 7% of the world’s population, will remain in
extreme poverty. The World Bank calls for ending poverty by
setting a revised goal to reduce at least by half the proportionof men, women and children of all ages living in poverty in allits dimensions according to national definitions by 2030.

Past economic growth was accompanied by increased
pressure on the climate through use of oil, coal and gas. If thispressure continues, achieving future growth could create atension between the poverty goal and the climate goal. In
general, a country’s GDP per capita is highly predictive of its
extreme poverty rate. As countries grow, their extreme poverty
rates tend to fall.
Developing countries will need to grow to end extreme poverty
and it can be done without significantly contributing to global
emissions. It is possible to limit the impact on climate while
making strides in poverty reduction. If the incomes of the poor
grow faster than the rich, less growth is needed to lift thepoorest above the poverty line, and less greenhouse gases will
be emitted to reach the poverty target. With the right policies,
it is possible to achieve the goal of eliminating extreme poverty
without severely degrading the environment. But it is critical toact fast as climate change is already pushing millions of people
into poverty.
In 2023, 691 million people were estimated to live on less than
USD 2.15 a day, the international extreme poverty line. As global
temperatures continue to rise, leading to worse living
conditions for millions of people worldwide, the poorest are
the most vulnerable and will be the most severely impacted.
Great progress has been made towards financial inclusion and
71% of adults in developing countries have obtained access toan account between 2011 and 2021. Digital financial services– including those involving the use of mobile phones – havenow been launched in more than 80 countries, with somereaching significant scale. As a result, millions of formerly
excluded and underserved poor customers are moving fromexclusively cash-based transactions to formal financial
services using a mobile phone or other digital technology toaccess these services.
However, 1.4 billion of the 5 billion adults are still unbanked in
2023. About half of unbanked people included women, poor
households in rural areas, or out of the workforce.
While the gender gap in account ownership reduced from 9 to
6 percentage points in developing countries, women are stillhindered from being able to effectively control their financial
lives. Countries with high mobile money account ownership
had less gender inequality. The impact of Covid-19 on thisgender gap remains to be seen.
Since 2010, more than 55 countries have made commitments
to financial inclusion and more than 60 have either launched or
are developing a national strategy.

Temenos Financial Inclusion is focused on financial institutions
which provide banking services to people who are often
excluded from mainstream financial services. It is used at over
300 client sites in 53 countries and offers a mature packaged
version of Temenos software which offers extremely fast
implementation times.

Our solution is specifically aimed at the following
financial sectors:
1.

microfinance institutions;

2. credit unions;
3. community banks;
4. non-bank financial institutions;5. small banks;
6. start-up banks; and7.

banks with financial inclusion initiatives.

Our Financial Inclusion strategy is to provide the same
technology infrastructure used by modern digital banks inestablished financial markets to empower small financial
institutions in emerging markets to compete and exponentiallygrow their customer base, providing quality, affordable, digitalfinancial services to the poor. Temenos provides thetechnology and expertise to build services to compete with themobile network operators and fintech and commercial banks
that are after the very valuable membership base that
community banks and credit unions have developed overdecades. It is essential that these community banks keep theircustomer spend within their own community banking network,
generate new revenue and build on their greatest asset – thetrusted customer relationship. We do this as part of ourmainstream business. We bundle our latest release Temenos
core banking technology in a mature model bank forcommunity and cooperative banking and provide access tointegration and digital channels via cloud-based Software as aService (or to be deployed locally). This gives smaller financial
institutions subscription-based access to the same
technology utilized by some of the world’s largest and mostadvanced banks.
In 2000, Temenos committed to microfinance and constructeda microfinance model bank as a “bank-in-a-box” for easy andaffordable deployment. It served the various non-bankfinancial institutions that were providing financial services tothe disadvantaged. Banks could not serve this market due tocost, culture and focus. With the expansion of terrestrial 2G
and 3G mobile networks in most of the developing world,transaction processing costs began to plummet.

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The mobile phone for voice and data transformed banking.
Transactions and payments for the mass market opened.
Over the past decade, mainstream banking, driven by Kenya’s
Mpesa and the huge commercial microfinance networks, hasdiscovered transactional banking’s promise for the poor.
Throughout this journey, Temenos has led fintech discovery.
Temenos is proud of being the first to transfer mainstream
core banking technology to the cloud with Microsoft in Mexico,with five microfinance banks in 2011.
Temenos technology has helped every major microfinancenetwork and most of the large mainstream microfinanceinstitutions produce leading financial inclusion solutions. The
inclusive banking industry no longer defines inclusion just as
having a transaction account. Financial inclusion is “individuals
and enterprises having access to usable and affordable
financial goods and services that fit their requirements –transactions, payments, savings, credit and insurance –delivered in a responsible and sustainable way”, according to
the World Bank. The only fintech in the Group that combinescore banking and payments in a portfolio of solutions for thesector is Temenos. Temenos Financial Inclusion has developed
beyond the typical microfinance end-to-end “bank-in-a-box”
solution strategy to a larger digital transformation on
payments. Payment digitization reduces market friction,
especially in emerging nations where cost affects productivity
and investment. Millions are excluded and businessdevelopment is inhibited in high-density disadvantaged urban
and peri-urban regions due to cost and risk of cash. In
Sub-Saharan Africa (SSA), the World Bank estimates that small
businesses represent 90% of all businesses, and according toMastercard, Sub-Saharan Africa alone has 44 million micro,
small and medium enterprises (MSMEs). Small businesses playa crucial role in global and local economic development. They
create jobs, stimulate innovation and provide essential goods
and services to communities. The World Bank says the sector’s
growth is mainly limited by access to credit and quality
financial services.

111

Extending financial inclusion

The pandemic stressed the continuing financial inequality. At
the same time, it offered a real opportunity towards investingin a fairer and more inclusive global economy. The rewards fordoing so go way beyond those directly affected, fromincreasing political stability to helping address climate change
and from global GDP growth to contributing strong returns
from a well-balanced portfolio.
People need a safe place to save and a source of financial
services to finance the various stages of their life and to haveaccess to investment for provident and productive purposes. It
is said the best police officer is a homeowner. The same
applies to the market economy. If the majority of people areexcluded from the market economy, there is no foundation to
the economy. People who have no stake in the economy haveno reason to care about the success of the economy. Financial
inclusion is fundamental to the social and economic stabilityof our global economy. Unlocking the potential of the individual
to have meaningful participation and giving people a stake inthe market economy provided a foundation for development.
Fintech is central to this process. To bank, the poor have to bea market. Banking the poor has to be profitable and achieving
this conversion from demand into effective demand forfinancial services requires very sophisticated use of data andICT to drop the costs of high-volume, low-value transactions
to create a competitive market for the business of the poor.
The Temenos experience has been a journey of discovery withour clients and Partners in a common mission to make ameaningful contribution to our community, our global
economy and the lives of tens of millions of women and menthat our technology has helped to serve. In many parts of theworld, internet, cloud and mobile banking are unlocking thisfinancial inclusion. Temenos will continue to lead with financial
technology to continue this mission. Our solution is capable ofoperating on a 24/7 continuous basis and is fully multicurrency
and provides support for multiple languages according to user
and customer records. It has in-built digital channel
capabilities which can be delivered either using Temenos’
solutions or by integration to specialized third party offerings.

Case study

Scaling to serve the needsof low‑income households
CreditAccess Grameen is India’s largest microfinanceinstitution. It has 4.6 million customers and manages
assets of over $2.7 billion. It employs 19,200 people acrossnearly 1,900 branches nationwide. Its mission is to be thepreferred financial partner for low-income, rural
households which lack access to traditional credit, withwomen making up more than 99.99% of its customer
base. It offers a range of microfinance loan products,
including for business capital, home improvements, family
welfare and emergencies.
B Read more here:
Scaling to serve the needs of low-income households

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SUSTAINABILITY continued

Empowering Our Local Economies and Communities continued

Investing in our communities

In an increasingly demanding world, we have a responsibility toaddress the challenges and help all communities succeed. Thismeans promoting responsible business practices, expanding
accessibility and connectivity, advancing fair and inclusive
societies, and empowering communities. By strategicallyleveraging technology, resources, financial support andbusiness expertise, along with the dedication and talent of ouremployees, we collaborate with clients and Partners to provide
communities with access to opportunities technology createsand support, particularly during times of need.

Our goal is to empower communities to harness thetransformative power of technology and equip them with theskills to fully utilize its benefits and opportunities.

2024 goals⚫

To expand the Adopt-iT School Program to more schools anduniversities in India.

⚫

To increase access to education and technology forunderserved communities.

⚫

To continue awarding need and merit-based scholarships toqualifying students of our partner educational institutions
for the next three years.

⚫

To create more volunteering opportunities for our employees
in line with our CSR strategic priorities.

Our approach

As a global leader, we are committed to supporting andenhancing the quality of life in the communities where our
employees, Partners and clients live and work. To support thiscommitment, we actively engage with these communities
through a multi-faceted approach:⚫

corporate monetary contributions;⚫

corporate monetary contributions that complement the
donations or volunteer efforts of our employees;⚫

in-kind contributions of used IT equipment;⚫

employee fundraising (volunteering their time and/or money);and⚫

volunteering (donation of professional service, management
expertise, skills and time to non-profit organizations or
local communities).

Our community investment is aligned with our mission, businessstrategy, employee concentration and CSR strategic priorities,
ranging from long-term Programs to short-term initiatives.
The key priority areas on which we focus our community
investment are:⚫

poverty alleviation and financial inclusion;⚫

digital inclusion and innovation;⚫

diversity, equity and inclusion; and⚫

employee volunteering and community service.

During the period of 2017–2023, we allocated more than USD
2.8 million to community development projects. Temenos
continuously evaluates the effectiveness and impact of its
community investment through ongoing engagement withsupported organizations and employee volunteer initiatives,
aimed at enhancing project management and identifying newopportunities for positive impact.

Enabling social change through technology

Temenos is committed to finding ways to use technology toenable social change by supporting disadvantaged local
communities. We are focusing our actions on transforming the
lives of individuals in these communities by improving theirwork skills and capabilities, promoting gender equality andinclusive education for all, and helping them gain access tofinance, healthcare and jobs.
The necessity of technology has evolved into a fundamental
human need, yet approximately one-third of the global
population still lacks online access. Communities are
struggling to keep up with the fast pace of change driven bydigital transformation and the shift to a digital economy. In
India, where Temenos employs a substantial 65% of its global
workforce, the Company has recognized the urgent need todrive social change through technology.
Through our CSR Program in India “Adopt-iT”, we arecommitted to raising awareness about quality and inclusive
education, digital skills, gender equality and empowering girls
and women to enter STEM fields of study and careers. We
work with schools and universities to provide hygiene andsanitation, fund scholarships to study STEM and provide job
opportunities to build work experiences, internships andmentoring Programs. Our Programs aim to provide today’s
youth with the tools they need to shape the futureof technology.
B Read more here: The real impact of our Adopt-iT CSR Program

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113

India CSR School Program
Through the Temenos Adopt-iT School Program in India, wehave built 13 solar-powered computer labs and smart
classrooms in schools and charitable organizations in needbetween 2017 and 2023. We focused our actions on
encouraging gender equality and inclusive education for all, bybuilding girls’ restrooms in government schools in India, helping
girls stay in school and providing them with access to thebenefits and opportunities technology creates and the skills to
deploy it and subsequently equal access to more opportunities
in life.
Temenos Adopt-iT

2017

MCN school in Chennai

Computer lab

2018

Government Kannada Higher Primary School in Bangalore

Computer lab and girls’ restrooms

2018

St Columbus Higher Secondary School in Chennai

Computer lab, training room and girls’ restrooms

2019

RBANC School in Chennai

Solar-powered computer lab and training room

2019

Prakash Nagar Government High School in Bangalore

Solar-powered computer lab

2020

Madras Progressive Higher Secondary School in Chennai

Solar-powered computer lab and training room

2020

Mary Clubwala Jadhav Girls Higher Secondary School in Chennai

Solar-powered computer lab and training room

2021

MCN School in Chennai

Solar-powered computer lab and training room

2021

Kumaran Special School for children and youth withspecial needs

Sensory lab to support the individual learning
requirements

2021

Lady Willingdon Higher Secondary School in Chennai

Solar-powered computer lab and training room2022

Chennai Higher Secondary School in Maduvankarai, Chennai

Solar-powered computer lab and training room

2022

SOS Children’s Villages in Chennai

Solar-powered computer lab and training room

2023

SOS Children’s Villages in Bangalore*

Solar-powered computer lab and training room

2023

Government Higher Secondary School in Tamil Nadu*

Girls’ restrooms*	In 2023, we built one more solar-powered computer lab and training room at SOS Children’s Villages in Bangalore and girls’ restrooms at theGovernment Higher Secondary School in Tamil Nadu.

India CSR University Program
In 2019, we expanded our Adopt-iT Program to further promote
innovation and digital skills among university students while
creating employment opportunities. As part of the Program,
Temenos built a fully equipped and sustainably powered
Innovation Lab at Anna University, College of Engineering, in
Chennai. This cutting-edge facility provided students with aunique opportunity to become fully engaged in the financetechnology sector, partner with Temenos employee volunteers
and gain valuable hands-on experience.
Furthermore, we offered our Temenos Learning Community
online platform and sandbox environments, customizing themto create a curriculum specifically tailored to the needs of theTemenos Innovation Lab users.
Building upon this success, we expanded our collaboration
with universities and colleges across India, expanding our
engagement to include R&D, hackathons, training, scholarships,
recruitment and green data centers.

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SUSTAINABILITY continued

Empowering Our Local Economies and Communities continued
Investing in our communities continued
Case study

Temenos drives innovation: SRM
University’s Hack Summit and
GraVITas Hackathon at VIT University

In 2023, Temenos continued its commitment tofostering innovation by sponsoring two major
hackathons with leading Indian universities. These
collaborations showcase our dedication to nurturing
the next generation of tech leaders. Participants
explored diverse themes, developing brilliant solutions
for a sustainable future.

Hack Summit 4.0 at SRM University

60+

4

200+

3

teams

participants

judgeswinning teams

Building on the success of last year, students fromdifferent colleges participated in a 36-hour hackathon
where they were challenged to develop digital andsustainable solutions, especially in the fields offintech, generative AI and green development. This
Hack Summit marked the first-ever winning teamconsisting solely of female students, showcasing thetransformative power of diversity in driving innovation.

GraVITas Hackathon at VIT University

70+
teams

300+ 3
participants

winning teams

Temenos actively co-sponsored GraVITas, a hackathon
at VIT University in India. Beyond being a hub for
innovation, the event facilitated knowledge sharing,
featuring a tech talk on “Cloud Security” by Temenos’
Product Security Head in India. The hackathon drew
participation from over 15,000 students representing
various colleges globally.
The outstanding outcomes of Hack Summit 4.0 and
GraVITas underscore Temenos’ transformative impact
on the tech community, fostering a culture ofinnovation and social responsibility.

Case study

Temenos CSR initiative:
Sustainability and Inclusive Mobility
Temenos has been at the forefront of using
technology to create a positive impact on the world
for the past 30 years. Every year, we strategicallyinvest in projects that embrace sustainableapproaches, exploring diverse ways to make ameaningful difference. Recently, Temenos
collaborated with the Government of Karnataka to
donate ten retrofitted electric vehicles to people withphysical disabilities. The vehicles were presented by
Temenos Chief Executive Officer Andreas Andreades,
along with the Temenos leadership team. By
empowering people in rural India with eco-friendly
mobility solutions, Temenos is moving towards a moresustainable and inclusive society.

Integrated Report

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Supporting local communities

Temenos Adopt-iT Scholarship Program 2023
Since 2019, Temenos has been awarding need and merit-based
scholarships to qualifying second, third and fourth year
students of Engineering and IT departments of universities andcolleges in India and subsequently provides employment
opportunities to outstanding performance graduates.
As part of our gender diversity Program, Temenos is allocating
60% of the scholarships to young women, encouraging themto choose a career in the IT industry. During 2023, Temenos’
Adopt-iT Scholarship Program continued to provide scholarships
to six educational institutions in Tamil Nadu, including four
Universities and two Colleges. A total of 196 additional need andmerit-based scholarships were awarded to students attending
the following educational institutions and departments:⚫

Information Technology;⚫

Computer Science Engineering;⚫

Electronics and Communications Engineering;⚫

Electrical and Electronics Engineering; and⚫

Electrical and Instrumentation.

Temenos Adopt-iT scholarships, since the Program
was launched
Unit

Total number ofscholarships toqualifying second,
third and fourth year
students

2019

2020

2021

2022

2023

46

92

141

196

196

Number of scholarships awarded per University/College
Educational institutions

2023 numberof scholarships

Anna University

46

Sastra University

30

VIT University

30

SRM University

30

SVCE College

30

SKCET College

30

Total

196

By providing scholarships to qualifying students in engineering
and IT departments of universities and colleges in India,
Temenos is empowering young minds to pursue careers in thedigital economy. Through this initiative, Temenos is not only
investing in the future of technology but also fostering a morediverse and inclusive IT workforce. The scholarship Program
will continue and expand to other universities and colleges in
Chennai, Bangalore and Hyderabad, over the next two years.

671

need and merit-based scholarships for students
of six educational institutions (2019–2023)

96%of the students have a family income less than
USD 2,000 per year

115

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SUSTAINABILITY continued

Empowering Our Local Economies and Communities continued
Investing in our communities continued
Donations

Corporate monetary contributions
We believe that those with the means to make a difference
should act, acknowledging that complex challenges demand
united action. In collaboration with our local offices, we
carefully evaluate and select projects based on their alignment
with local community needs and our strategic priorities, which
encompass poverty alleviation, child welfare, youth
development, technological advancement, environmental
sustainability and emergency relief.
Community
investment
in USD

2020

2021

2022

2023

Monetary
donations

269,752.26

417,367.44

452,543.18

697,391.61

Employeefundraising

31,181.83

20,122.90

77,325.00

52,165.60

Employeevolunteeringcost

67,561.00

62,411.00

109,918.00

136,938.00

In-kinddonations40,872.00

107,300.00

99,121.65

9,243.01

47,630.00

68,881.00

78,456.00

101,705

409,367.09 607,201.34 817,363.68

997,443.22

Management
overheads
Total

Type of philanthropic activities (2023)

Charitable donations
Community investments
Commercial initiatives
Total

Emergency relief
In times of disaster or unexpected events, Temenos does notjust stand by – we leap into action, offering a helping hand tocommunities in need and empowering non-profit organizations
and emergency relief agencies for a lasting impact. As every
year, we are grateful to the hundreds of Temenosians who havecontributed and continue to support urgent causes by forgoing
pay or through our volunteer Programs.

Percentage of
total costs

7.2%
92.8%
0%
100%

As per our Anti-Corruption and Bribery Policy as well as theCharitable Donations and Non-Commercial Sponsorships
Policy, Temenos does not make any contributions to political,
religious or legislative parties.
In addition, the Temenos internal audit team conducts yearly
independent, objective audits of the Company’s corporate
monetary contributions, in relation to the Anti-Corruption
and Bribery and Conflict of Interest policies. The results ofthese audits are shared with the CSR and Ethics Committee
and the Audit Committee. All donations and non-commercial
sponsorship requests are submitted online through theTemenos intranet for review and evaluation by the CSR
and Ethics Committee during its regular meetings.

Corporate monetary contributions and employee
fundraising in 2023
We foster a culture of community service among our
employees, encouraging their participation in fundraising
activities for non-profit organizations in the countries where
we operate, with the opportunity to amplify their efforts
through corporate matching of raised funds. The activities tobe considered for the corporate matching need to be alignedwith the corporate CSR priorities. In 2023, employees
enthusiastically embraced a diverse range ofimpactful initiatives.
B Read more here: Poverty Alleviation and Economic Development

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117

Case study

Employee fundraising
for Adopt a Kid –India

Number of children supported/year
Year

Supported by

Boys

Girls

Total

2017

Temenos India
employees

8

4

12

2018

Temenos India
employees

10

18

28

2019

Temenos India
employees

18

29

47

2020

Temenos India
employees

38

31

69

2021

Temenos India
employees

11

20

31

Temenos

42

37

79

2022

Temenos India
employees

17

39

56

Temenos

63

54

117

2023

Temenos India
employees

20

39

59

Temenos

45

55

100

Employees andTemenos

272

326

598

Temenos India
employees

Corporate
match

Grand total

Total

True Temenosity in action!
In 2017, we established “Adopt a
Kid – India”, a long-term
Education Support Program (ESP)in which Temenos employees
support the education of children
from low-income households.
This Program enables access to
education for children with single
or no parents and children below
the poverty line, who could notafford a decent education. In
2023 alone, the Program’s impact
extended to 59 additionalchildren, demonstrating theunwavering commitment of
Temenos India employees.
Even though it is an initiative led
and funded by Temenos India
employees, the Company
recognizes the importance of
these efforts and the social
impact of the Program and has
begun to financially support thisaction with the goal of matching
all donations by 2025. Notably,
the Company has alreadymatched 89% of the funds raisedby employees since theProgram’s launch. Over the pastseven years, the Program has
benefited 598 children (272 boys
and 326 girls) and raised aremarkable USD 123,389 throughfundraising activities. As theProgram expands, it will impact
the lives of more children,
granting them the fundamental
right to education–one of themost significant human rights.

Funds raised in USD

2017

2,727

–

2,727

2018

6,545

–

6,545

2019

8,061

–

8,061

2020

9,375

–

9,375

2021

7,170

12,87020,0402022

15,126

22,69637,8222023

16,30922,511

38,820

Boys

5,334

9,864

15,198

Girls

10,975

12,647

23,622Grand total

65,312

58,077

123,389598

children were able to go to schooland pursue their dreams (2017–2023)

USD 123,389
raised by employees and matchedby Temenos (2017–2023)

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SUSTAINABILITY continued

Empowering Our Local Economies and Communities continued

Case study

Empowering human rights
through technology:
Temenos and HURIDOCS
partnership (2023)
Temenos is excited to highlight our collaboration with
HURIDOCS, reflecting our commitment to positive socialchange. Central to this partnership is Temenos’ contribution:a USD 250,000 donation made in 2023, fortifying HURIDOCS
foundation and advancing its crucial mission. This alliancesymbolizes more than a financial investment; it represents ashared dedication to championing human rights andpromoting a world defined by justice and equality.
HURIDOCS mission and services
HURIDOCS is a non-profit organization dedicated toempowering human rights defenders and organizations
worldwide, to document and effectively use information to
advocate for justice and accountability. The organization’s
tools and resources are used by thousands of activists inover 130 countries to document human rights violations,build human rights repositories and archive collective
memories. It delivers two complementary services: building
essential technology which provides information
infrastructure for human rights organizations andmovements, and co-developing strategic standards andapproaches for the sector.

Temenos empowerment: Key outcomes of HURIDOCS
2023 technological development
HURIDOCS made significant strides in technologicaldevelopment in 2023, empowering human rights defenders
and advancing the cause of human rights worldwide. Its
flagship open-source tool, Uwazi, received substantial
updates, enhancing its user friendliness, scalability and data
security. The relaunched African Human Rights Case Law
Analyzer (CLA) now offers a comprehensive multilingualcollection of human rights decisions, accessible todefenders, researchers and activists worldwide. HURIDOCS
also developed Rapid Response Documentation Principles,
guiding the development of context-specific tools andmethodologies for rapid response documentation (RDD).
These principles emerged from the experiences of 12 partner
community organizations across South and Southeast Asia.
Finally, HURIDOCS initiated a research project to gain adeeper understanding of documentation practices among
human rights groups in the Middle East and North Africa(MENA) region. This research will inform HURIDOCS’s regional
work and enhance the impact of human rights
documentation initiatives.
Temenos is honored to be part of HURIDOCS journey tomake a meaningful and lasting difference in the realm of
human rights landscape.

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Temenos AG Annual Report and Accounts 2023

Temenos Adopt-iT volunteers.

Investing in our communities continued
Employee volunteering and community service

At Temenos, we believe in the transformative power ofvolunteering. We actively encourage and support the efforts ofour employees as well as our management to offer their timeand expertise to help local communities or non-governmentalorganizations during paid working hours in activities organizedby the Company and in line with our CSR strategic priorities.
Since 2019, we have set a target to evaluate our volunteering
Program and the impact of our volunteers.

4,854+

50+

35+

39

volunteering hours in 2023

organizations supported
in 2023

119

projects in 2023

countries where we havesupported local communities
in 2023

Our key aims were:⚫

to measure the social impact on the local communities;⚫

to explore new ways to give back to the local communities;

Employee volunteering by
CSR strategic priority areas⚫

to identify areas for improvement;

Environment

34,517

1,165⚫

to uncover, through volunteering, new skills or talents in
our people;

Poverty alleviation and local
economic development

28,197

1,378⚫

to identify the impact that volunteers have on Temenos,
in terms of their contribution and economic value; andTechnology and innovation

70,0072,042⚫

to have documentation for audit and third party verification.

Children

3,986

263

231

6

136,938

4,854

To be able to better monitor, track and report the numberof volunteers, volunteering hours and the impact of these
activities not only to the community, but also to Temenos,
we have created an Employee Volunteering Tracking form forvolunteering activities. The Program was initially rolled out
in India, focusing on the Adopt-iT Program and the work weare doing in the schools and universities. Gradually, it was
expanded to the rest of the Company’s offices globally.
In the spirit of giving, we believe that volunteering is theheartbeat of positive change. Embracing the power of collective
action, Temenos employees around the world passionately leadand participate in diverse projects, dedicating their time andskills to make a meaningful impact. In 2023 alone, a remarkable
1,372 Temenosians generously contributed 4,854 hours to awide range of initiatives focused on fostering community,
educating youth, protecting the environment, and more.

Emergency relief
Total

Employee time Employee timein USD *in hours*	To calculate the cost, base salary and social charges were used foreach employee.
Employee volunteering by CSR
strategic priority areas

Employee timein USD

Employee timein hours

Americas16,929315

Middle East and Africa

6,328

81

India

52,383

3,040

Europe38,994880

Asia Pacific

22,304538

Total

136,938

4,854

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SUSTAINABILITY continued

Empowering Our Local Economies and Communities continued
Temenos Adopt-iT volunteering
for digital inclusion

Since 2017, our employees in India havevolunteered their time and expertisethrough the Adopt-iT Program to educate
students from underprivileged
backgrounds. In 2023, Temenosians, bothon site and virtually, invested 2,510 hours
crafting STEM education Programs that
equip students with essential technology
skills. From mastering software testing
and cloud computing to refining
presentation abilities and honing
communication skills, Temenos Adopt-iT
empowers young people to become
leaders, creators and problem solvers.

Integrated Report

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121

Appendix
About this report

Unless otherwise indicated, the information provided in thisreport reflects the situation as of 31 December 2023 andcovers all Temenos operations as well as all financiallyconsolidated activities globally during FY-23. The report is
prepared in accordance with Art. 964b of the Swiss Code ofObligations, which became mandatory for Swiss companies ofpublic interest from 2023, in alignment with recommendations
and standards issued by the Integrated Reporting Framework,in accordance with the Global Reporting Initiative (GRI)
Standards and mapped to the Sustainability AccountingStandards Board (SASB) Software and IT Services
Sustainability Accounting Standard. Our Board of Directors
acknowledges responsibilities and has approved and signed off
the 2023 Temenos Sustainability Report according to the Swiss
Code of Obligations. We also adhere to the requirements ofArt. 964j-l of the Swiss Code of Obligations (Ordinance on Due
Diligence and Transparency in relation to Minerals and Metals
from Conflict-Affected Areas and Child Labour). We havedetermined that we are exempt from the obligations of due
diligence and reporting obligations on minerals and metals
from conflict-affected and high-risk areas and in relation tochild labor (read more on page 57).
Please see our online GRI content index on page 131 fordetailed data and additional information. On page 138 wesummarize how this report complies with the requirementsof Art. 964b of the Swiss Code of Obligations. In addition, it
serves as Temenos’ annual Communication on Progress under
the United Nations (UN) Global Compact. This is our eighth
Sustainability Report. No restatements were done. We haveassured the content through an internal review process,including Board of Directors and executive oversight of reviews
and validation. Apart from the internal review process, an
independent third party, Grant Thornton S.A., has provided its
assurance on Temenos’ Sustainability Report 2023. The scopeof the assured information is indicated in the independentpractitioner’s assurance report. Our first report with GRI was
published in 2017.
Temenos operates 56 offices in large, leased, multi-tenantbuildings in 39 countries (including acquisitions). Temenos’ energy
reporting and corresponding Scope 1 and 2 emissions cover thetime period from 1 December 2022 to 30 November 2023. In
2023, we measured and reported 99% of the total energy
consumption and GHG emissions, excluding only a few
individual small offices with limited headcount (ten people orless). The energy consumption of these offices includes all
types of energy (renewable and non-renewable purchased gridelectricity, natural gas and on-site generation) and represents
consumption as reported on invoices from utility providers andmanagement companies.
Energy and emissions calculations follow the Greenhouse Gas
Protocol with reference to ISO 14064:2018–“Greenhouse gases,
Part 1: Specification with guidance at the organization level for
quantification and reporting of greenhouse gas emissions andremovals”. All greenhouse gases are included in the calculations.
The consolidation approach used to calculate the GHG inventory
is operational control, since Temenos has full authority over
the operations, and accounts for all the emissions resulting
from all operations across all offices in all countries. In thereport, the metric ton/UK ton equivalent to 1,000 kilograms isstated solely as ton. Scope 1 and 2 emissions were calculatedusing IEA and DEFRA emission factors. Emissions frombusiness travel were calculated based on the distance traveledusing DEFRA emission factors. All GHG emissions figures are intons of carbon dioxide equivalents (tCO2e). Renewable energy
is valid only with an official certificate (Energy AttributeCertificate), following the RE100 initiative requirements, or
written confirmation from the electricity supplier. Our water
withdrawal covers 87.1% of total headcount. Water discharge
was estimated based on a 95% discharge factor, taken fromthe Sydney water utility provider. The generated waste covers
100% (estimation based on extrapolation from actual data
received from 78.2%) of the total Temenos population(excluding population working in serviced offices with less thanten employees). The intensity ratios were calculated, based onmonthly average consumptions of energy/water per averagemonthly employee headcount for the period December 2022 toNovember 2023.

Scope 1 and 2

Our Scope 1 emissions are due to direct natural gas
consumption for heating, from diesel fuel consumption for
on-site electricity generation and from fugitive emissions fromthe air-conditioning equipment. The Scope 1 fugitive emissions
were calculated using our sustainability software tool, taking
into account the surface area of each office and assuming
R407a as the type of refrigerant for all offices. Vehicle
combustion Scope 1 is excluded because it is below the 5%
threshold of our total Scope 1 and 2. Our Scope 2 locationbased emissions are a result of the consumption of purchased
electricity from local grids. Our Scope 2 market-based
emissions were calculated taking into account the green
energy products from local utility providers, the Energy
Attribute Certificates, as well as the residual mix values foreach location where available. Temenos does not generate any
biogenic CO2 emissions from the combustion or biodegradationof biomass. Calculation is based on building electricity invoices
and includes offices, common areas and owned data centers.

Scope 3

Our Scope 3 business travel-related emissions from flights,
trains and taxis cover FY-23 and all the countries where
Temenos operates, representing 100% of the total employee
concentration. The data was collected from the Company
travel management system as well as travel agency providers.
For the taxi-related emissions, we have assumed a 40km taxi
ride–to and from the airport–for each flight.
The 2023 GHG emissions from employee commute were
calculated based on integrated information from Geocoding
Automation with Google Maps and from our internal employee
information platform. This methodology covered 95% of total
headcount. For cases where the information platform system
exceeded 60-mile office to home distance (due to different tax
and permanent address), an average 13.14-mile distance was
assigned. The remaining 5% was estimated based on
extrapolation, taking into consideration the hybrid model
frequency. The information platform covered various aspects
such as distance between home and the office, modes oftransport–private vehicles, mass transit, cycling, carpooling,
walking, fuel efficiencies of private vehicles used, and averagemonthly office presence. The data gathered covers private
vehicles owned by our employees. The emissions have been
calculated based on fuel efficiency, total distance traveled, fueltypes and characteristics and emission factor for the fuel used.

122

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APPENDIX continued

About this report continued
Scope 3 continued

Our Scope 3 categories purchased goods and services and capital
goods have been estimated based on input-output analysis(WRI Scope 3 Screening Tool from Quantis) using the best-fit
category, including consideration of inflation development from2015 to 2023, as 2015 has been the last year of inflation
adjustment made by the WRI Scope 3 Screening Tool. We arein process of improving the methodology used to calculate
Scopes 3.1 and 3.2 (moving from spend based to supplierspecific or hybrid method), for more accurate data as ofnext year.
In order to calculate upstream emissions of the Scope 3
category of other fuel and energy-related activities frompurchased electricity (e.g. due to T&D losses for every unit ofgrid electricity procured) we used actual energy consumption
as reported on invoices from utility providers and managementcompanies and emission factors from IEA.
In order to calculate upstream emissions of our Scope 3
category of waste generated in our offices, we used our 2023
office collection data for hazardous and non-hazardous waste,e-waste and wastewater treatment, taking into account thedisposal methods and emission factors from DEFRA, specificfor each disposal method.
Our Scope 3 science-based target boundary covers 68.6% of
Scope 3 emissions, in line with the SBTi criteria, representing
56,345 tCO2e for 2019. Overall, our Scope 3 GHG emissions
are a focus area of improvement for the next years. As themethodology continues to improve, a re-assessment of thebaseline may be necessary.
Although our current science-based target does not coveremissions from on-premise software usage – Scope 3 use ofsold products – we acknowledge the increasing demand of ourcloud and web-based offerings. In response to this evolving
landscape we intend to report on emissions from the use of
our web-based software products going forward.

Diversity dashboard

Our headcount-related figures and diversity dashboard are
based on the GRI and SASB Standards, S&P Global CSA andBloomberg GEI requirements and cover all Temenos operations
globally, in full alignment with the Annual Report and Financial
Statements. The data sources are the corporate internal IT and
HR systems, which provide data on full-time and part-time
employees as well as permanent and temporary employees.
When referring to governance bodies, we include: Board of
Directors, Executive Committee and Management Board.
All references to currency are in USD unless otherwise stated.
Methodology and assumptions⚫ Data used to compile the dashboard represent actual
headcount (not FTE) as per 31 December 2023, unlessspecified otherwise.
⚫

All charts refer to Temenos employees, unlessspecified otherwise.

⚫

Temporary employees are employees on a fixed-term contract.

⚫

Part-time employees are employees at less than 100% FTE.

⚫

Employee level: Considers Temenos internal ranking system(employee bands) and number of reporting lines. Individual
contributors are junior/mid-level employees and have noreporting lines. Mid-level managers are mid/senior-level
employees with at least one reporting line. Senior managers
are senior-level executives regardless of reporting lines.

⚫

Employee category: “tech” includes employees working in
R&D or Cloud functions; “non-tech” includes employees
working in G&A, S&M or Services.

⚫

Employee function: Internal employee classification system
based on employee department.

⚫

Employee turnover rates calculated by comparing actual
headcount as at 31 December 2023 to actual headcountas at 31 December 2022 as per GRI definitions.

⚫

Business partners: Consultants of Temenos Certified
companies have been considered as Temenos
staff augmentation.

⚫

External contractors: Consultants of third party companies(not approved as Temenos Certified Partner) or freelancers
that get paid directly from Temenos have been consideredas Temenos staff augmentation.

Contextual information⚫ As a rule, the vast majority of our global headcount is madeup of permanent, full-time employees. Fixed-term employee
contracts, not resulting from legal or statutory requirements,
represent a negligible percentage of our global workforce.
⚫

All Temenos employees are guaranteed a fixed number ofworking hours per day, week or month, except for one internin the US (male) paid on hourly rates.

⚫

Part-time employees represent below 1% of global workforce(e.g. employees returned from parental leave and employees
opted to work part-time instead of full-time).

Fluctuations in headcount⚫ Fluctuations in number of employees or workers who are not
employees are considered significant if higher than 20%.
⚫

In 2023, 142 employees moved onto a fixed-term contract,
the majority in Dubai in line with changes to the UAE laborlaw. The amendment to fixed-term employment contracts
in UAE is mandatory for all private sector companies.

Contact

The 2023 Temenos Sustainability Report explains our policies,
procedures, Programs and performance on our material
environmental, social and governance (ESG) issue areas as well
as how we address other important CSR issues. We welcome
your feedback on the activities and Programs described in thereport, as well as the issues you expect to see addressed in
the future. Please email your comments to the below address.

Kalliopi Chioti
Chief Marketing and ESG Officer
Tel.: +41 22 708 11 50
csr@temenos.com

Integrated Report

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123

Independent assurance report
To the Board of Directors of Temenosԉ

GRI 403-6 Promotion of worker health;ԉGRI 404-1 Average hours of training per year per employee;ԉ RI 404-3 Percentage of employees receiving regularG
performance and career development reviews;
ԉ

GRI 405-1 Diversity of governance bodies and employees;
ԉ RI 414-1 New suppliers that were screened usingGsocial criteria;ԉ ASB TC-SI-130a.1 “(1) Total energy consumed, (2)Spercentage grid electricity, (3) percentage renewable”;

We performed our engagement in accordance with theprovisions of “International Standard on Assurance
Engagements 3000 (Revised) – Assurance Engagements otherthan Audits or Reviews of Historical Financial Information”(ISAE 3000), in order to provide limited assurance opinion on
selected data of the “Sustainability” section of the “Integrated
Report” of the Temenos Annual Report 2023, with regard to:ԉ ASB TC-SI-130a.2 “(1) Total water withdrawn, (2) total
Swater consumed, percentage of each in regions withHigh or Extremely High Baseline Water Stress”;
ԉ ASB TC-SI-330a.2 Employee engagement asSa percentage;
ԉ

SASB TC-SI-330a.3 Gender and racial/ethnic group;

the completeness and accuracy of quantitative data includedin the Sustainability section of the Integrated Report of theTemenos Annual Report 2023 in accordance with GRI
Standards 2021, including GRI 2: General Disclosures 2021;
ԉTemenos KPI 1: % of revenue spend on R&D; andԉ emenos KPI 2: Client satisfaction: improvement by %Tpoints and Client Voice: Number of participants annually
and Net Promoter Score.

The Board of Directors of “TEMENOS AG” (“Temenos”) engaged“GRANT THORNTON S.A. CHARTERED ACCOUNTANTS MANAGEMENTCONSULTANTS” (“Grant Thornton”) to review selected data
included in the “Sustainability” section of the “Integrated
Report” of the Temenos Annual Report 2023 for the fiscal year
ended on 31 December 2023 (the selected data), in accordancewith the Global Reporting Initiative (GRI) Standards (“GRIStandards”) version 2021 and the Sustainability AccountingStandards Board (SASB) for selected disclosures.

Scope

⚫

determine and report material topics, responding to GRI 3:
Material Topics and the double materiality assessment inaccordance with the requirements of the EU Corporate
Sustainability Reporting Directive (CSRD); and⚫

⚫

the completeness and accuracy of quantitative data and theplausibility of qualitative information against the requirementsof the respective GRI Standards for the Topic Specific Disclosures
meeting the GRI Standards “In accordance” option requirements,of the below selected indicators, which are linked to thematerial issues of the Company:
ԉGRI 201-1 Direct economic value generated and distributed;
ԉGRI 203-1 Infrastructure investments and services supported;ԉ

GRI 204-1 Proportion of spending on local suppliers;ԉ RI 205-2 Communication and training about antiG
corruption policies and procedures;ԉ

GRI 302-1 Energy consumption within the organization;
ԉ

GRI 302-3 Energy intensity;
ԉ

GRI 303-1 Interactions with water as a shared resource;ԉ

GRI 303-3 Water withdrawal;
ԉ

GRI 305-1 Direct (Scope 1) GHG emissions;ԉ

GRI 305-2 Energy indirect (Scope 2) GHG emissions;ԉ

GRI 305-3 Other indirect (Scope 3) GHG emissions;ԉ

GRI 305-4 GHG emissions intensity;
ԉ

GRI 305-5 Reduction of GHG emissions;ԉ

GRI 306-3 Waste generated;ԉ RI 308-1 New suppliers that were screened usingG
environmental criteria;ԉ

GRI 401-1 New employee hires and employee turnover;ԉ

GRI 401-3 Employees’ parental leave;

Management responsibility

The Management of Temenos is responsible for the preparationand presentation, completeness and accuracy of the selected
data provided to us, as incorporated in the “Sustainability”
section of the “Integrated Report” of the Temenos Annual
Report 2023. Furthermore, the Management is responsible formaintaining records and adequate internal controls that aredesigned to support the reporting process.

Grant Thornton responsibility

Our responsibility is to carry out a limited assurance
engagement and to express our conclusions based on theprocedures carried out for the selected data, as describedin the “Scope” section.
The procedures we carried out were designed to provide
limited assurance, as specified by ISAE 3000, based on which
we shaped the conclusion to our engagement. These procedures
are not as extensive as those required for providing reasonableassurance; consequently, a lower level of assurance is obtained.
Our responsibility is limited to the information related to thefiscal year that ended on 31 December, as these were includedin the “Sustainability” section of the “Integrated Report” of theTemenos Annual Report 2023.
To the extent it is permitted by the legislation in force, weneither accept nor assume any responsibility for our
engagement or this report towards anyone other than the
Company, unless the terms have been agreed explicitly in
writing, with our prior consent.

124

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APPENDIX continued

Independent assurance report continued
Limitations⚫

To conduct our work, we relied exclusively on theinformation provided to us by the Company’s executives,
which we accepted in good faith as being complete,accurate, real and not misleading. Therefore, we did not
submit it to any verification procedures, apart from theprocedures explicitly stated in our Report and which arise
from our mutually agreed methodology.

⚫

Our engagement was limited to the English version of the“Sustainability” section of the “Integrated Report” of theTemenos Annual Report 2023.

⚫

No work has been conducted on data for previous reporting
periods, as well as on data related to forecasts and targets.

⚫

No work has been conducted on anything other than theagreed scope and consequently, our opinion is limited tothat scope.

Work conducted

We conducted our work so as to collect all the data, relevant
documentation, information and explanations we considerednecessary as to the selected data described in the “Scope”
section. The procedures followed with regard to the selected
data included:⚫

interviews performed with key personnel of the Company
responsible for the preparation of the Sustainability sectionof the Integrated Report of the Annual Report 2023 in orderto understand key governance structures, systems,
processes, controls and their level of understanding of theinformation included in the Temenos Annual Report 2023;⚫

identification of existing internal processes related toapplication of ESG policies;⚫

application of assurance procedures on a sample basis
in order to collect and review audit evidence; and⚫

review of the GRI Content Index, as well as the relevant
references included therein, against our scope of work.

Independence

Grant Thornton implements the requirements of International
Standard on Quality Control 1. Based on this, it maintains an
integrated quality control system that includes policies andprocedures for compliance with ethical principles, professional
standards and relevant legal and regulatory requirements. We
comply with the independence requirements and other ethicalstandards of the IFAC Code of Ethics for Professional
Accountants of the International Ethics Standards Board for
Accountants (IESBA), which is based on the fundamental
principles of integrity, impartiality, professional adequacy,
confidentiality and professional conduct. In this context, theassurance team is independent from the Company and has notparticipated in the preparation of the “Sustainability” section of
the “Integrated Report” of the Temenos Annual Report 2023.

Conclusions

We report the following conclusions based on the scope andthe limitations of our engagement. Our conclusions are basedon the procedures we carried out, as described in the “Work
Conducted” section:⚫

Nothing has come to our attention that causes us to believethat the “Sustainability” section of the “Integrated Report”
of the Temenos Annual Report 2023 does not meet therequirements of General and Topic Specific Disclosuresof GRI Standards 2021.

⚫

Nothing has come to our attention that causes us to believethat the Company-specific key performance indicators
included in the Sustainability section of the Integrated
Report of the Temenos Annual Report 2023, as describedin the section “Scope”, are materially misstated.

Restricted use

This report is intended solely for the information and useof the Company in accordance with the terms of referenceagreed between us and is not intended to be and should
not be used by anyone other than the Company.

Athina Moustaki
Athens, 14 February 2024
The Chartered Accountant
CPA (GR) Reg. No. 28871
Grant Thornton

Integrated Report

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125

Stakeholder groups
Stakeholder groups

Examples of engagement

Employees
Frequency: daily

⚫

⚫

⚫

⚫

⚫

Clients
Frequency: daily

Employee surveys: employee engagement
survey, dedicated wellbeing survey
Performance management: talent review, talentcards and growth plans, 360° feedback survey,
mentoring Program, coaching Program, dual
career path in technology, talent mobility
Learning and development: Temenos Learning
Hub (TLH), Temenos Learning Community (TLC),
Temenos Seismic, Upskilling & Reskilling, leadershipdevelopment training, Josh Bersin Academy
Internal communications: SharePoint intranet,
Viva Engage, video updates, targeted
newsletters, townhalls and live-streamed eventswith leaders and internal surveys, “Bright Ideas”
feedback platform
Wellbeing: Wellbeing hub, wellbeing webinar
series, wellbeing weeks, health and safety,
special leaves, referral bonus, hybrid working,working from anywhere⚫

Global mobility⚫

Employee recognition: T-Stars, TemenosianAwards, the Club, Hackathons, Temenos KEY,
Temenos fellows⚫

Employee communities: Mission Earth Team,
Women@Temenos, Parents@Temenos, ¡ALMA!,The Souls by Temenos, LGBTQIA+ community⚫

Temenos Business Code of Conduct andlinked policies⚫

Compliance training⚫

Anonymous reporting mechanism⚫

Employee CSR volunteering and fundraising
matching scheme⚫

Client surveys: Client Voice and Client
Satisfaction

Stakeholder key concerns

Location in report⚫

People experience

Investing in Our People⚫

Learning anddevelopment⚫

Internal
communications

Empowering Local
Economies andCommunities⚫

Employee pay
and benefits⚫

Employeeengagement⚫

Employee recognition⚫

Diversity, equity
and inclusion⚫

Talent mobility⚫

Wellbeing at work⚫

Purpose-driven talentmanagement⚫

Environmental
management andawareness⚫

Information security,
cybersecurity, data
privacy and business
continuity⚫
⚫

Client communication Achieving Business
Excellence
Client satisfaction

Caring for the Planet
Operating Responsibly⚫

Product Innovation Board and Steering Committees⚫

Annual Temenos Community Forum (TCF)

Customer support

Operating Responsibly

⚫

⚫

⚫

Annual Temenos Kick Off Meeting (TKO)

Caring for the Planet⚫

Annual Partners’ Meeting⚫

Temenos Learning Community (TLC)

Quality, security andresponsibility indelivery andimplementation⚫

Temenos Exchange⚫

⚫

Temenos Ambassador Program⚫

Newsletters, marketing updates and social media

Cybersecurity, data
privacy and business
continuity⚫

Customer support portal⚫

Internal and external audits⚫

Temenos Security and Privacy Committee⚫

Business Code of Conduct, data privacy andprotection and corporate security policies⚫

Temenos Carbon Emissions Calculator⚫

Corporate website⚫

ESG indices and ratings

126

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APPENDIX continued

Stakeholder groups continued
Stakeholder groups

Examples of engagement

Investors –research analysts
Frequency: weekly⚫

Annual General Meeting of Shareholders (AGM)⚫

Annual Capital Markets Day (CMD)⚫

Roadshows, investor and analyst visits,
meetings, calls⚫

Financial press releases, videos, webcasts andsocial media⚫

Annual Report⚫

Corporate website⚫

Business Code of Conduct and linked policies⚫

ESG indices and ratings⚫

Annual Temenos Community Forum (TCF)⚫

Annual Temenos Kick Off Meeting (TKO)⚫

Annual Partners’ Meeting⚫

Responsible procurement framework⚫

Supplier diversity framework⚫

Temenos Learning Community (TLC)⚫

Temenos exchange⚫

Trainings and seminars⚫

Procurement policies⚫

Audits and risk assessments⚫

Event sustainability management system⚫

Cooperation with NGOs⚫

Community service and employee volunteering⚫

Employee fundraising⚫

Community investment projects⚫

Scholarships⚫

Internships⚫

Social media⚫

Temenos Financial Inclusion⚫

Services Incubation Center⚫

Temenos Services Masterclass⚫

Temenos Innovation Labs⚫

Temenos developer community⚫

Hackathons⚫

Scholarships⚫

Collaboration in research Programs⚫

Lectures, presentations, company visits⚫

Career days⚫

Social media⚫

Temenos events⚫

Roadshows, visits, meetings, calls⚫

Press releases, videos, webcasts, blogs andsocial media⚫

Annual Report⚫

Corporate website

Suppliers and Partners
Frequency: daily

Local communities
and NGOs
Frequency: monthly

Academic community
Frequency: daily

Media andindustry analysts
Frequency: daily

Stakeholder key concerns⚫

Economic
performance⚫

Transparent andethical corporate
governance⚫

Accurate, timely
and responsible
communication⚫

Ethical andresponsible businessconduct⚫

Long-term
partnership⚫

Access to educationand jobs⚫

Improve local
living conditions⚫

Support in emergency
situations⚫

Collaboration andjob opportunities⚫

Joint research anddevelopment projects⚫

Accurate, timely
and responsible
communication

Location in report

Annual Report

Operating Responsibly
Caring for the Planet

Empowering Local
Economies andCommunities

Investing in Our People
Empowering Local
Economies andCommunities

Annual ReportIntegrated Report

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127

Contribution to the UN Sustainable Development Goals
SDG

Target: 1.4
Material topics: 1,
7, 8

How we contribute

We foster secure, inclusive
100%of employees jobs, promote financial
inclusion and advance humanearn above
rights in our operations andthe living
supply chain.
wage

SDG

Targets: 3.4, 3.8
Material topics: 2,7, 8

How we contribute

Temenos prioritizes employee
99.9%
of employees wellbeing, providing supportand resources to help
covered by
Temenosians maintain ahealthcarebalanced lifestyle, enhancing
their personal and professional
development.

SDG

Target: 4.3, 4.4,
4.5, 4.7, 4.aMaterial topics: 7,
8

How we contribute

Temenos Learning99%of employees Communities offer lifelong
learning and vocational training
completedfor employees and clients. We
Ethicalfocus on disadvantaged groups
Businessthrough inclusive education
Code ofinitiatives.

Conduct andmandatorycompliancetrainings

SDG

35%
women in
workforce
Targets: 5.1, 5.4,
5.5, 5.cMaterial topics: 1,
7, 8

SDG

Targets: 6.2, 6.3,
6.4
Material topics: 1,
6

73%
workforce inISO 14001
certified
offices

Governance framework⚫

Business Code of Conduct⚫

Living Wage Policy⚫

Slavery and Trafficking
Statement⚫

UK gender pay gap⚫

Adopt a Kid scholarships
awarded⚫

CSR Adopt-iT Program

Governance framework

Description⚫

USD 38,820 raised in “Adopt a Kid”
fundraising and matched by
Temenos⚫

USD 697,391 donated in 2023⚫

1,378 employee hours dedicated topoverty alleviation

Description⚫

Business Code of Conduct⚫

⚫

Global Health and Safety
Policy400 employees participated in Racefor the Cure Walks around the globe⚫

⚫

Maternity Policy⚫

Paternity Policy

40 local and 6 global activities
during Mental Health Wellbeing
Week in 17 countries⚫

Family Care Leave Policy⚫

20.7% of employees volunteered⚫

Health and Safety
Committees⚫

Zero health and safety incidents⚫

85% of employees coveredby mental health platforms in 17
countries⚫

316 events for wellbeing initiatives

Governance framework

Description⚫

Business Code of Conduct⚫

⚫

Learning Hub (Learning &Development)

75 average training hours per
employee⚫

⚫

Temenos Learning
Community (TLC)

USD 5,830 expenditure on employee
training per employee⚫

⚫

Mentoring Program

13 Temenos Innovation computerlabs in India since 2017⚫

CSR Adopt-iT Program⚫

36,694 students reached via
Adopt-iT CSR Program⚫

159 Adopt a Kid scholarships
awarded⚫

196 Adopt-iT scholarships awarded⚫

9 training rooms in India since 2017⚫

3 Hackathons with over
500 participants

How we contribute

Governance framework

We promote gender equality
through robust policies,
industry standards and expert
advice, while also advocating
for women’s rights andempowerment globally
through social initiatives.

⚫

Business Code of Conduct⚫

Gender Pay Gap Report⚫

Maternity Policy⚫

Paternity Policy⚫

Family Care Leave Policy⚫

Supplier Diversity Framework⚫

Employee communities:¡ALMA!, LGBTQIA+, Women@
Temenos

Description⚫

46% gender diversity under 30 years
old⚫

45 Diversity Ambassadors certified⚫

40% gender diversity in Executive
Committee⚫

38% women on Board of Directors⚫

35% women in STEM-related
positions⚫

50% gender diversity in top
management⚫

2,309 female employees

How we contribute

Governance framework

Through strategic
collaborations and community
initiatives, we are dedicated to
improving water management
and sanitation infrastructure.

⚫

Global Environment Policy⚫

Description⚫

Global Environmental
Management System

44% of water withdrawn is being
treated and recycled⚫

⚫

ISO 14001:2015⚫

ISO 20121:2012

1 new girls’ restroom built in
Government Higher Secondary
School in Tamil Nadu⚫

9,394,502L reduction in freshwateruse⚫

66.6% water use in areas of >80%
baseline water stress128

Integrated Report

Temenos AG Annual Report and Accounts 2023

APPENDIX continued
Contribution to the UN Sustainable Development Goals continued
SDG

Targets: 7.2, 7.3
Material topics: 1,
4, 5, 6

How we contribute

We are actively reducing our
86%
carbon footprint, focusing on
renewable
electricity use energy efficiency, renewableenergy sourcing and annuallyin Temenos
reporting on our progress.
internal
operations

SDG

How we contribute

Governance framework⚫

Global Environment Policy⚫

Temenos TCFD Report

⚫

CDP

⚫

ISO 14064:2006⚫

ISO 20121:2012⚫

ISO 14001:2015

Governance framework

We are continuously enhancing ⚫ Business Code of Conduct
97.7%
of permanent our operational practices and ⚫ Gender Pay Gap Report
fostering innovation to ensure ⚫
employees
Slavery and Humansustained, inclusive economic
growth and productive
employment for all. We
prioritize lifelong learning,skill development and fair
remuneration, reinforcing
our dedication to promoting
sustainable economic
growth, full and productive
employment, and decent
work for all.

Targets: 8.2, 8.3,
8.4, 8.5, 8.6, 8.7,
8.8, 8.10
Material topics: 1,
3, 7, 8, 11

SDG

Targets: 9.1, 9.3,
9.4, 9.5, 9.a, 9.b,
9.cMaterial topics: 1,
2, 3, 9, 11

20%
of revenue
investedin R&D
every year

SDG

Targets: 10.2, 10.4,
10.6
Material topics: 1,
7, 8, 1286
nationalities
represented
in theworkforce

Description⚫

USD 89,040 green investments(investments related to energy
reduction)⚫

37% reduction of per capita energy
consumption for certified ISO 14001
offices vs 2018⚫

15% energy reduction vs 2022

Description⚫

4.43% of employees coveredby collective agreements⚫

99.1% of employees work full time

Trafficking Statement⚫

Zero health and safety incidents⚫

Global Health and Safety Policy⚫

⚫

Working With Integrity
Principles Policy

100% of focus suppliers underwent
sustainability assessments⚫

USD 1,000.2 million revenue⚫

Living Wage Policy⚫

⚫

Global Mobility Policy

USD 487.7 million employees’ wages
and benefits⚫

Anonymous Reporting Policy⚫

⚫

Travel and Expenses Policy

100% employees are paid above
living wage⚫

Referral Award Policy⚫

Health and Safety
Committees⚫

ISO 22301:2019

How we contribute

Governance framework

We provide innovative banking
software for sustainableeconomic growth, financial
inclusion and job creation,
empowering MSMEs globallyand promoting resilient
financial infrastructures.

⚫

EU Cloud Code of Conduct⚫

Information Systems
Security Policy⚫

Acceptable Usage Policy⚫

IT policies⚫

ISO/IEC 27001:2022⚫

ISO 27017⚫

ISO 27018⚫

ISO 22301:2019⚫

ISO 9001:2015⚫

AICPA SOC⚫

Service Provider Security⚫

ISO 20000-1:2018

How we contribute

Governance framework

Diversity, equity and inclusion(DEI) are at the core of ourvision, mission and values, andhow we operate, innovate andengage with our employees,
clients, Partners, suppliers
and local communities.

⚫
⚫
⚫

Gender Pay Gap Report⚫

Working with Integrity
Principles Policy⚫

Employee communities:¡ALMA!, LGBTQIA+, Women@
Temenos

Description⚫

12,753 participants in Client Voice
Program, up from 2016 baselineof 4,000⚫

+90 percentage points improvementin Net Promoter Score since launch⚫

USD 277.9 million total expenditure
in research and development⚫

USD 215 million revenue fromenvironmental and social impact
products⚫

USD 3.1 billion cumulative R&D
investment since 1990

Description

Supplier diversity framework⚫

39 countries with 56 offices

Business Code of Conduct⚫

43% racial diversity within the
US workforce⚫

USD 7.9 million spend with diverse
suppliers globally⚫

48.7% employee wages and benefits
as a proportion of revenue⚫

Clients in over 150 countries⚫

Over 950 core banking clients⚫

Over 600 digital clients

Integrated Report

Temenos AG Annual Report and Accounts 2023

SDG

Targets: 11.4, 11.6,
11.7
Material topics: 1,
3, 5, 6

34.5%
Green
Building
Certifications

SDG

Targets: 12.4, 12.5,
12.6, 12.7, 12.8, 12.aMaterial topics: 1,
3, 4, 12

SDG

73%
waste
diversionfrom landfill

How we contribute

Governance framework

We have developed acomprehensive facilities
management strategy to fully
utilize natural resources,
respecting legally designatedprotected areas.

⚫

ISO 20121⚫

Plastic Free Policy

SDG

SDG

Targets: 17.3, 17.8,
17.16, 17.17
Material topics: 1,
2, 3, 4, 5, 6, 7, 11,
12

1 new solar-powered computer lab
at SOS Children’s Villages in
Bangalore⚫

10 retrofitted electric vehicles
donated to individuals withdisabilities⚫

2 main corporate events (TKO, TCF)
ISO 20121 certified⚫

2 offices banned single-use plastics

How we contribute

Governance framework⚫

Sustainability reporting⚫

100% of e-waste responsibly treated⚫

Environmental training⚫

⚫

Global Supplier Code of
Conduct

100% of focused suppliers
underwent sustainability
assessments⚫

Global Environmental Policy⚫

⚫

ISO 14001:2015

9 educational sessions by Mission
Earth Team⚫

ISO 20121:2012⚫

Employee resource group“Mission Earth Team”

How we contribute

Governance framework

operations. Through ouralignment with the Science
Based Targets initiative, we are
driving meaningful progress
towards a net-zero world.

How we contribute99%
of employees framework and acomprehensive Business Codecompletedof Conduct that guides ourannualoperations and relationships.
AntiOur supply chain management
Corruption
is governed by stringent
training
policies, ensuring transparency⚫

Temenos TCFD Report⚫

CDP Report⚫

SBT initiative

Governance framework

We uphold a robust governance ⚫

Targets: 16.3, 16.5,
16.6, 16.7, 16.10,
16.b
Material topics: 1,
10, 11

Description⚫

Our commitment tosustainability is evident inour operations, focusing on
optimizing resource use andfostering transparency to
reduce our ecological footprint
and promote a resilient
global economy.

⚫ Global Environmental Policy
We are actively reducing our
SBTcarbon footprint and enhancing ⚫ ISO 14001:2015
near-term⚫ ISO 20121:2012
commitment energy efficiency across all

Targets: 13.1, 13.3,
13.3, 13.bMaterial topics: 1,
3, 4, 5, 6, 11, 12

129

and ethical practices across alllevels. We take pride in doing
things the right way, building
our capacity through solid
governance and management
systems.

How we contribute

Description

Description⚫

90.7% reduction in Scope 1 and 2
GHG emissions since 2019 baseline⚫

31.3% reduction in Scope 1, 2 and 3
GHG emissions since 2019 baseline⚫

73% coverage of ISO 14001:2015
certification

Description

99% of employees completed
Business Code of Conduct training

Business Code of Conduct⚫

⚫

Anti-Corruption andBribery Policy⚫

⚫

Anti-Trust Policy

Zero violations of the Temenos
Business Code of Conduct⚫

Insider Information Policy⚫

⚫

Export Controls andSanctions Policy

7 Board meetings and 91%
attendance rate⚫

⚫

Conflict of Interest Policy

USD 1,872,169 total Board of
Directors compensation⚫

Social Media Governance
Policy⚫

5 Audit Committee meetings and100% attendance rate⚫

Data Protection andPrivacy Policy⚫

Zero payable corruption-related
fines

⚫

ISO 22301:2019⚫

UNGC participant

Governance framework⚫
We focus on building a35
organizations collaborative and sustainable
future. We prioritize a “Partner ⚫
supported
First” model. Our commitment
extends to community⚫
engagement, with active⚫
involvement in social initiatives.
⚫
We strive to blend
technological advancementwith societal growth, ensuring ⚫
our partnerships contributemeaningfully to sustainable⚫
development.

Description⚫

USD 697,392 in monetary donations⚫

Global and Non-Commercial
Sponsorships Policy

USD 997,443 total community
investment⚫

Business Code of Conduct

Partnership with Code First Girls⚫

Temenos Carbon
Emissions Calculator

89% of funds for “Adopt a Kid”
raised by employees in India,
matched by the Company⚫

Temenos Developer
Community

4 universities and 2 colleges(scholarships/events)⚫

4,854 total volunteering hours

Sustainable Event
Planning Policy

Temenos Exchange

UNGC participant⚫

WEF member⚫

Women’s Empowerment
Principles signatory

Integrated Report

130

Temenos AG Annual Report and Accounts 2023

APPENDIX continued

UN Global Compact Index

The table below describes the location of relevant report content for each of the UN Global Compact’s ten principles.
Principle Description

Report section

GRI Standards/SASB metrics

Human rights
1

Businesses should support and respect the protectionof internationally proclaimed human rights.

Investing in Our People

2-23, 2-24, 2-25, 2-27, 2-28,
203-1, 205-2

2Make sure they are not complicit in human rights abuses.

Investing in Our People

2-16, 2-26, 406-1, 414-1

3

Businesses should uphold the freedom of association andthe effective recognition of the right to collective bargaining.

Investing in Our People

2-30

4

The elimination of all forms of forced and compulsory labor.

Investing in Our People

409-1

5

The effective abolition of child labor.

Investing in Our People

408-1

6

The elimination of discrimination in respect of employment
and occupation.

Investing in Our People

401-1, 404-1, 404-3, 405-1,
406-1/TC-SI-330a.3

Labor

Environment
7

Businesses should support a precautionary approachto environmental challenges.

Caring for the Planet

302-1, 302-3, 303-3, 305-1,
305-2, 305-3, 305-4, 305-5,
306-3, 306-4, 306-5/
TC-SI-130a.1, TC-SI-130a.2,
TC-SI-130a.3

8Undertake initiatives to promote greater
environmental responsibility.

Caring for the Planet

302-1, 302-3, 303-3, 305-1,
305-2, 305-3, 305-4, 305-5,
306-3, 306-4, 306-5, 308-1/
TC-SI-130a.1, TC-SI-130a.2,
TC-SI-130a.3

9Encourage the development and diffusion of environmentallyfriendly technologies.

Caring for the Planet

302-1, 302-3, 303-3, 305-1,
305-2, 305-3, 305-4, 305-5,
306-3, 306-4, 306-5, 308-1/
TC-SI-130a.3

Operating Responsibly

2-23, 2-26, 205-2, 205-3,
206-1

Anti-corruption
10

Businesses should work against corruption in all its forms,
including extortion and bribery.

Integrated Report

Temenos AG Annual Report and Accounts 2023

131

GRI content index
GRI 1: Foundation

GRI 1: Foundation statement of use

Unless otherwise indicated, the information provided in thisreport reflects the situation as of 31 December 2023 and covers
all Temenos operations globally during FY-23. The report is
prepared in accordance with the Global Reporting Initiative (GRI)
Standards and is mapped to the Sustainability AccountingStandards Board (SASB) Software and IT Services Sustainability
Accounting Standard.

GRI 1 used

GRI 1: Foundation 2021

Applicable GRI sector standards

No applicable GRI Sector Standard(s)GRI 2: General Disclosures 2021

Reference

Notes and omissions

External
assurance

1. The organization and its reporting practices
2-1 Organizational details

About this Report; Group Structure andShareholders; Temenos World Offices

V

2-2 Entities included in
the organization’ssustainability reporting

Temenos World Offices

V

2-3 Reporting period,
frequency andcontact point

About this ReportV

2-4 Restatements of
information

About this ReportV

2-5 External assurance

Independent Assurance ReportV

2. Activities and workers
2-6 Activities, value chain About this Report; Annual Report: Overview;
and other business
Our Solutions; Group Structure and Shareholders;
relationships
Group Companies; Business Combinations;
Responsible ProcurementV

2-7 Employees
About this Report; Diversity Dashboard
TC-SI-330a.3 (gender only)V

2-8 Workers who are not
employees
TC-SI-330a.3

V

About this Report; Diversity Dashboard

3. Governance
2-9 Governance structure Our Governance Framework;and composition
Sustainability GovernanceV

2-10 Nominating andselecting the highest
governance body

Our Governance Framework; WebsiteV

2-11 Chair of the highest
governance body

Chairman’s Statement; Our Governance
Framework; Internal Organizational StructureV

2-12 Role of the highest
governance body inoverseeing themanagement of impacts

Sustainability Governance; Our Governance
Framework; Responsible Risk Management

V

132

Integrated Report

Temenos AG Annual Report and Accounts 2023

APPENDIX continued

GRI content index continued
GRI 2: General Disclosures 2021

Reference

Notes and omissions

External
assurance

3. Governance continued
2-13 Delegation of
responsibility for
managing impacts

Sustainability Governance; Business Codeof ConductV

2-14 Role of the highest
governance body insustainability reporting

Sustainability GovernanceV

2-15 Conflicts of Interest

Conflict of Interest and Related Party TransactionsV

2-16 Communication ofcritical concerns

Ethical Business Conduct Monitoring and ReportingV

2-17 Collective
knowledge of the highest
governance body

Sustainability GovernanceV

2-18 Evaluation of theperformance of thehighest governance body
2-19 Remuneration
policies

We have planned toincorporate ESG targets
in executive
compensation.
Compensation Report

Partially reported thisyear. We have planned toincorporate ESG targets
in executive
compensation.

2-20 Process to
Audit Committee; Compensation Committee
determining remuneration

Partially reported thisyear. Currently, we do not
publicly disclose theresults of votes of
stakeholders.
Confidential information.

2-21 Annual totalcompensation ratio

Median annual totalcompensation notdisclosed.
Confidential information.

4. Strategy, policies and practices
2-22 Statement onsustainable
development strategy

Message from the Chairman and CEOV

2-23 Policy commitments Ethical Business; Due Diligence and Risk
Assessment; Human Rights; Responsible Risk
Management; Website;
Environmental ResponsibilityV

2-24 Embedding policy
commitments

Ethical Business; Ethical Business Conduct
Monitoring and Reporting; Anti-Corruption
and Bribery; Responsible Risk ManagementV

2-25 Processes toremediate negative
impacts

Ethical Business Conduct Monitoring andReporting; Human RightsV

2-26 Mechanisms forseeking advice andraising concerns

Ethical Business Conduct Monitoring and ReportingV

2-27 Compliance withlaws and regulations

Environmental Responsibility; Anti-Corruption
and BriberyV

2-28 Membershipof associations

Progress and Targets; Human Rights

VTemenos AG Annual Report and Accounts 2023

GRI 2: General Disclosures 2021

Reference

Integrated Report

133

Notes and omissions

External
assurance

5. Stakeholder engagement
2-29 Approach to
stakeholder engagement

Our Stakeholders; Stakeholder GroupsV

2-30 Collective
bargaining agreements

Freedom of Association and Collective Bargaining

V

GRI 3: Material Topics 2021

Reference

Notes and omissions

External
assurance

3-1 Process to determine material topics About this Report; ESG Double Materiality
Assessment

V

3-2 List of material topics

V

About this Report; ESG Double Materiality
Assessment

3-3 Management of material topics
Topics standards

V
Reference

Notes and omissions

External
assurance

Business performance
GRI 3:
Material
Topics 2021

3-3 Management ofmaterial topics

GRI 201:
201-1 Direct economic value
Economic
generated and distributed
Performance
201-3 Defined benefit
2016
plan obligations and otherretirement plans
201-4 Financial assistancereceived from government

Annual Report: Financial Statements

V

Economic Impact; Annual Report:
Financial Statements

V

Annual Report: Governance,
Financial Statements
Economic Impact

Social responsibility and community investment
GRI 3:
Material
Topics 2021

3-3 Management ofmaterial topics

Community Investment;
Responsible Procurement

V

GRI 203:203-1 Infrastructure investments
Indirectand services supported
Economic
Impacts 2016

Community Investment

V

GRI 204:
204-1 Proportion of spending
Procurement on local suppliers
Practices
2016

Responsible ProcurementV

3-3 Management ofmaterial topics

Compliance Program; Compliance Training;
Elimination of Discrimination andPrevention of Harassment; Ethical BusinessConduct Monitoring and ReportingV

205-2 Communication andtraining about anti-corruption
policies and proceduresCompliance TrainingV

205-3 Confirmed incidents ofcorruption and actions taken

Ethical Business Conduct
Monitoring and Reporting

Ethical business conduct and governance
GRI 3:
Material
Topics 2021

GRI 205:
AntiCorruption
2016

No confirmed incidents.

Integrated Report

134

Temenos AG Annual Report and Accounts 2023

APPENDIX continued

GRI content index continued
Topics standards

Reference

Notes and omissions

External
assurance

Ethical business conduct and governance continued
GRI 206:
AntiCompetitive
Behavior
2016

206-1 Legal actions for anticompetitive behavior, anti-trust
and monopoly practices
TC-SI-520a.1

Compliance Program

SASB:
Intellectual
Property
Protection
andCompetitive
Behavior
GRI 406:
406-1 Incidents of nonNondiscrimination and corrective
Discrimination actions taken
2016

Elimination of Discrimination
and Prevention of Harassment;
Ethical Business Conduct
Monitoring and Reporting

Tax strategy and governance
GRI 3:
Material
Topics 2021

GRI 207:
Tax 2019

3-3 Management ofmaterial topics

Corporate Website: Tax Strategy
and Governance207-1 Approach to tax

Corporate Website: Tax Strategy
and Governance207-2 Tax governance, control and Corporate Website: Tax Strategy
risk management
and Governance207-3 Stakeholder engagement
and management of concerns
related to tax

Corporate Website: Tax Strategy
and Governance

GRI 3:
Material
Topics 2021

3-3 Management ofmaterial topics

Environmental Responsibility;
Environmental Monitoring and Reporting;
Energy; Environmental Dashboard; Climate
Change Strategy

V

GRI 302:
Energy2016

302-1 Energy consumption
within the organization
TC-SI-130a.1

Environmental Responsibility;
Environmental Monitoring and Reporting;
Energy; Environmental Dashboard

V

302-3 Energy intensity

Environmental Dashboard

V

EnergySASB:
Environmental
Footprint ofHardware
Infrastructure
Water
GRI 3:
Material
Topics 2021

3-3 Management of material topics Environmental Responsibility;
Environmental Monitoring andReporting; WaterV

GRI 303:
Water
2018

303-1 Interactions with water asa shared resource

Environmental Monitoring and Reporting;
Water

V

303-3 Water withdrawal
TC-SI-130a.2

Environmental Monitoring and Reporting;Water; Environmental Dashboard

V

SASB:
Environmental 303-5 Water consumption
Footprint ofHardware
Infrastructure

Environmental Monitoring and Reporting;Water; Environmental Dashboard

Temenos AG Annual Report and Accounts 2023

Topics standards

Reference

Integrated Report

135

Notes and omissions

External
assurance

Waste
GRI 3:
Material
Topics 2021

GRI 306:
Waste
2020

3-3 Management ofmaterial topics

Environmental Responsibility;
Environmental Monitoring andReporting; Waste

306-3 Waste generated

Environmental Monitoring and Reporting;Waste; Environmental Dashboard

V

306-4 Waste diverted from disposal Environmental Monitoring and Reporting;Waste; Environmental Dashboard
306-5 Waste directed to disposal

Environmental Monitoring and Reporting;Waste; Environmental Dashboard

3-3 Management ofmaterial topics

Environmental Responsibility;
Environmental Monitoring and Reporting;
Carbon Footprint; Climate Change StrategyV

305-1 Direct (Scope 1)
GHG emissions

Environmental Monitoring and Reporting;
Carbon Footprint; Environmental
DashboardV

305-2 Energy indirect (Scope 2)
GHG emissions

Environmental Monitoring and Reporting;
Carbon Footprint; Environmental
DashboardV

305-3 Other indirect (Scope 3)
GHG emissions

Environmental Monitoring and Reporting;
Carbon Footprint; Environmental
DashboardV

305-4 GHG emissions intensity

Environmental Monitoring and Reporting;
Carbon Footprint; Environmental
DashboardV

305-5 Reduction of GHG
emissions

Environmental Monitoring and Reporting;
Carbon Footprint; Environmental
Dashboard

V

Responsible Procurement

V

GRI 308:308-1 Percentage of new
Supplier
suppliers that were screened
Environmental using environmental criteria
Assessment
2016

Responsible Procurement

V

GRI 414:
Supplier
SocialAssessment
2016

Responsible Procurement

V

Emissions
GRI 3:
Material
Topics 2021

GRI 305:
Emissions
2016

Responsible procurement
GRI 3:
Material
Topics 2021

3-3 Management ofmaterial topics

414-1 New suppliers that werescreened using social criteria

Integrated Report

136

Temenos AG Annual Report and Accounts 2023

APPENDIX continued

GRI content index continued
Topics standards

Reference

Notes and omissions

External
assurance

Equal treatment and equal opportunities for all: Talent and development
GRI 3:
Material
Topics 2021

3-3 Management of material topics People Experience: Learning andDevelopment; People Experience:
Performance Management

V

GRI 404:
Training and
Education
2016404-1 Average hours of training
per year per employee

People Experience: Learning andDevelopment

V404-3 Percentage of employees
receiving regular performanceand career development reviews
TC-SI-330a.2

People Experience: Performance
Management

V

SASB:
Recruiting
and Managing
a Global,Diverse andSkilledWorkforce

Equal treatment and equal opportunities for all: Diversity and inclusion
GRI 3:
Material
Topics 2021

3-3 Management ofmaterial topics

401-1 New employee hires and
GRI 401:
Employment employee turnover2016
401-3 Employee parental leave
GRI 405:
Diversity and
Equal
Opportunity
2016

405-1 Diversity of governancebodies and employees
TC-SI-330a.3 (gender and racial/ethnic group)

Diversity Dashboard; Diversity, Inclusion
and Equal Opportunity; Inclusive Culture;
Wellbeing at WorkV

Diversity Dashboard

V

Wellbeing at WorkV

Diversity Dashboard

V

SASB:
Recruiting
and Managing
a Global,Diverse andSkilledWorkforce
Equal treatment and equal opportunities for all: Human rights
GRI 3:
Material
Topics 2021

3-3 Management ofmaterial topics

Human Rights; Against Forced andChild Labor; Business Code of Conduct;
Corporate Policies; Responsible
Procurement

GRI 408:
Child Labor
2016408-1 Operations and suppliers
at significant risk for incidents
of child labor

Human Rights; Inclusive Culture: Against
Forced and Child Labor; Responsible
Procurement

GRI 409:
Forced orCompulsory
Labor
2016

409-1 Operations and suppliers at Human Rights; Inclusive Culture: Against
significant risk for incidents ofForced and Child Labor; Responsible
forced or compulsory labor
Procurement

Temenos AG Annual Report and Accounts 2023

Topics standards

Reference

Integrated Report

137

Notes and omissions

External
assurance

Working conditions: Health and safety
GRI 3:
Material
Topics 2021

3-3 Management of material topics Wellbeing at WorkGRI 403:403-6 Promotion of worker healthOccupational
Health and
Safety 2018Wellbeing at WorkV

V

Information security and data privacy
GRI 3:
Material
Topics 2021

3-3 Management of material topics Information Security, Cybersecurity,
Data Privacy and Business Continuity;
International Standards and Certifications

GRI 418:
CustomerPrivacy
2016418-1 Substantiated complaints
concerning breaches of customer
privacy and losses of customer
data TC-SI-230a.1

Information Security, Cybersecurity, Data
Privacy and Business Continuity: Privacy

Description of policies andpractices relating to behavioral
advertising and user privacy
TC-SI-220a.1

Information Security, Cybersecurity, Data
Privacy and Business Continuity: Privacy

SASB: Data
Security

Number of users whose information Information Security, Cybersecurity, Data
is used for secondary purposes
Privacy and Business Continuity: Privacy
TC-SI-220a.2

SASB: Data
Privacy andFreedom ofExpression

Total amount of monetary losses
as a result of legal proceedings
associated with user privacy
TC-SI-220a.3

Information Security, Cybersecurity, Data
Privacy and Business Continuity: Privacy(1) N umber of law enforcement
Information Security, Cybersecurity, Data
requests for user information, Privacy and Business Continuity: Privacy(2) N umber of users whose
information was requested,(3) Percentage resulting in disclosure
TC-SI-220a.4
List of countries where coreproducts or services are subject
to government-required
monitoring, blocking, content
filtering or censoring
TC-SI-220a.5

Information Security, Cybersecurity, Data
Privacy and Business Continuity: Privacy

Technology and product innovation
Temenos
KPI 1% of revenue spend on R&D

Annual Report: Overview; Technology
and Product Innovation: Goals and Targets:
Technology and Product Innovation

V

Client satisfaction: improvement
by % points

Focus on Client Satisfaction andEngagement; Goals and Targets: Client
Satisfaction and Engagement

V

Client voice: Number ofparticipants annually and
Net Promoter Score

Focus on Client Satisfaction andEngagement; Goals and Targets: Client
Satisfaction and Engagement

V

Client satisfaction and engagement
Temenos
KPI 2

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APPENDIX continued

Disclosures in accordance with Art. 964b Swiss Code of Obligations
Art. 964b requirement

Reference

General information required tounderstand our businessAnnual Report: Overview; Our Solutions; Group Structure and Shareholders;
Responsible Procurement

Description of the business model

Key Strategic Initiatives to Drive Growth; Our Solutions; Our Governance Framework;
Sustainability Governance

Environmental matters (incl. CO2 goals) Caring for the PlanetSocial issues

Investing in Our People; Empowering Our Local Economies and Communities

Employee-related issues

Investing in Our People; Operating Responsibly

Respect for human rights

Ethical Business; Ethical Business Conduct Monitoring and Reporting; Responsible
Risk Management

Combating corruption

Ethical Business; Ethical Business Conduct Monitoring and Reporting; Anti-Corruption
and Bribery; Operating Responsibly: Human Rights

Material risks

ESG Double Materiality Assessment; Responsible Risk Management

Main performance indicators

Goals and Targets; Investing in Our People: Diversity Dashboard; Caring for the Planet:
Environmental Dashboard

References to national, European orinternational regulations

Preparing for CSRD; EU Taxonomy; Operating Responsibly: Human Rights;
About this Report

Coverage of subsidiaries

Group Companies; Business Combinations

Integrated Report

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139

International standards and certifications
2023 goals

Progress against 2023 goals

2024 goals

2025 goals

ISO/IEC 27001:2022
Information Security
Management Systemwith extensions

The certification will
be upgraded to ISO
27001:2022 standards
by the end of 2023.

The certification has
been upgraded to
ISO 27001:2022
standards, as per theplans.

To sustain the existingcertification and expand
the scope based on
business needs.

To continue to expand
the scope in order toinclude new locations/acquisitions based on
the business needs anddirectives frommanagement.

ISO 27017:2015
Cloud Information
Security

To certify LATAM (Mexico ISO 27017 and ISO 27018 To sustain the existingand Ecuador) and NAM
certification Program
certification and expand(US) locations forextended for LATAM
the scope based on
ISO 27017 and ISO 27018 (Mexico and Ecuador)business needs.
compliance by Q1-23.
and NAM (US). Reports
and certificates have
To include LATAM –been issued in January
Costa Rica locations in2023.
the ISO 27017 and ISO
27018 certification
Surveillance audit for
Program scope.
2023 was also completed
in November 2023.
Certificate validity forthree years (until 2026).

To continue to integrate
newly acquiredcompanies, if any, andcertify new locations
as required.

ISO 27018:2019
Protection of PersonallyIdentifiable Information(PII) in Public Clouds

Compliance wasmaintained for thepreviously certified
locations.
ISO 22301:2019
Business Continuity
Management

Surveillance audit andChange to Approval toinclude Paris andMississauga locations in
scope of ISO 22301:2019.

Successful completionof surveillance audit andinclusion of Paris andMississauga locations in
scope of the ISO
22301:2019 certificate.

To maintain the ISO
22301:2019 certificate
and complete
successfully the annual
surveillance audit.

To renew the ISO
22310:2109 certificate
and include in scope
additional locations.

ISO 9001:2015
Quality Management

To include Hyderabad
location during therecertification audits
in 2023.

Hyderabad location
has now been includedin the scope of
certification, as per
the plans.

To sustain the existingcertification and expand
the scope based on
business needs.

To extend ISO 9001
and CMMI certifications
to new locations andremove locations fromscope, as deemed
appropriate for
product reasons.

ISO 20121:2012
Sustainable EventManagement System

To extend thecertification to thecorporate eventsplanned for 2024.

To aim for ISO 20121
External certification and To organize sustainable
certification external
validation by an
and carbon-neutralverification of our annual independent certification events.
corporate events.
body of the two largest
Temenos events:
Temenos Kick Off (TKO)and the Community
Forum (TCF).

ISO 14001:2015
Environmental
Management System

To sustain the existingcertification.

To maintain compliance To sustain the existingwith ISO 14001:2015 and certification andcontinuous improvement consider introducingof the Environmental
new locations in theManagement Systemscope based on(EMS).
business needs.

To obtain certification
for a total of eight
Temenos offices basedon headcount.

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APPENDIX continued
International standards and certifications continued
2023 goals

AICPA SOC
To maintain ongoing
Service Provider Security SOC 1, SOC 2 and SOC 3
SOC 1 Type 2
attestation reports for
SOC 2 Type 2
all Temenos cloud
CSA-CCMdelivery centers.

Progress against 2023 goals

2024 goals

SOC and CSA-CCM
To maintain ongoingcompliance
SOC 1, SOC 2 and SOC 3
attestations maintained. attestation reports for
SOC 2 report includes
all Temenos cloud
five trust service criteria. delivery centers.

2025 goals

To continue the global
SOC 2 Type 2 and SOC 1
Type 2 reporting.

To integrate andalign newly acquired
To continue inclusioncompanies to theof CSA-CCM compliance Temenos standard
attestation into theset of security and
SOC 2 report.
privacy controls.

To continue inclusionof CSA-CCM compliance
attestation into the
SOC 2 report.

To expand the scope tomeet new regulatory andbusiness requirements.
CSA-STAR Certificate/ To maintain compliance
Cloud Security Alliance with CSA-STAR– Cloud Controls Matrix Certificate Level 2.

CSA-STAR certificate
Level 2 audit was
obtained in Q1-23 andwas maintained
throughout the year.

To maintain compliancewith CSA-STAR Level 2.

To obtain CSA-Star
Certificate Level 3 forTemenos and newly
acquired companies.

PCI-DSS certificate forTemenos Cloud
Americas, Azure
platform obtained.

To maintain existingcertificates andcompliance with
PCI-DSS standards.

To further extend the
PCI-DSS certificate.

Temenos AWS
platform certification
also achieved.

To extend as applicable
the PCI-DSS Program.

Temenos achieved the
CSA “Trusted Cloud
Provider” mark.
PCI-DSS level 1
To maintain existing
Payment Card Industry
certificates and– Data Security Standard compliance with
PCI-DSS standards.
To extend as applicable
the PCI-DSS Program.
To certify the Temenos
Cloud AWS platform with
PCI-DSS.

To complete thereadiness assessment
against PCI—Secure
Software Framework
and PCI—Secure
Software standards.
Prepare to attainindustry certification.

ISO 20000-1:2018
IT Service Management
certification

To sustain and expand
the scope based on
business needs.

The certification has
been sustained throughthe surveillance
audits conducted in
October 2023.

To continue tosustain and expand
the scope based on
business needs.

To sustain and expand
the scope based on
business needs.

EU Cloud Code of
Conduct

To obtain Level 2
compliance with the EU
Cloud of Conduct.

Temenos achieved
Level 2 compliancewith the EU Cloud
Code of Conduct.

To maintain Program
compliance.

To maintain Program
compliance.

EU-US Data Privacy
Framework (DPF)
Program

To expedite the selfcertification process ofcompliance with the
EU-US DPF framework
benefiting from the setsof reliable mechanisms
and strengthened
safeguards for personal
data transfers to the US
in compliance with the
EU privacy principles
and law.

To maintain Program
compliance.

CMMI CL 3 (Capability
Level 3) for Support(PACS)To retain the CMMI CL3
certification for Support,
through the scheduled
re-appraisal in 2024.

Report to be issued
January 2024.

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141

FINANCIAL REVIEWMoving toa recurring
revenuebusiness model
Introduction
Opening thoughts

After the challenges of 2022, we had a much more stable
operating environment throughout 2023, despite ongoingmacroeconomic uncertainty and various events through theyear including the US regional banking crises, the emergency
takeover of Credit Suisse and the conflict in the Middle East
that threatened to cause further destabilization.
In this context, we focused on execution and delivered a strong
set of results for the year. Our subscription transition
continued at pace and was substantially complete by year end.
Our SaaS revenue also grew 25% in the year which, combinedwith the growth in subscription, delivered ARR growth of 17%.
ARR was USD730m by the end of the year, which represented
84% of our product revenue, demonstrating we are welladvanced on our move to a recurring revenue business model.
Non-IFRS total revenue was up 5% for the year, and non-IFRS
costs were up 1%, as we benefited from a significant reductionin the services cost base early in the year with a number ofprojects going live, which offset increased costs, in particularfrom investments in Sales and Marketing and R&D. Our
non-IFRS EBIT increased 15% for the year.
Our DSOs were at 141 days by year end, largely driven by thesubscription transition, and we closed the year with USD 107
million of cash on our balance sheet and leverage of 1.6x net
debt to non-IFRS EBITDA.

Panagiotis “Takis” Spiliopoulos
Chief Financial Officer

Highlights
Full year highlights (non-IFRS) include:
⚫

⚫

⚫
⚫

⚫

IFRS vs non-IFRS

To ensure that the presentation of results reflects theunderlying operating performance of the business, Temenos
publishes its key metrics on a non-IFRS basis as well as on
an IFRS basis. For key metrics on a non-IFRS basis, wherecomparable IFRS measures are presented in the consolidated
financial statements, a full reconciliation is published between
IFRS and non-IFRS measures which highlights the adjustments.
Non-IFRS adjustment definitions and reconciliations can befound on pages 142 to 145.

⚫

Annual Recurring Revenue (ARR)
growth of 17% in FY-23
Total software licensing increaseby 10% in FY-23
EBIT growth of 15% in FY-23
Free cash flow (FCF) grew 26%
in FY‑23
Received investment grade Long-TermIssuer Default Rating (IDR) of “BBB”
with a stable outlook, and a seniorunsecured rating of “BBB”, from
Fitch Ratings
Proposed dividend of CHF 1.20 for
FY-23 to be voted on at the AGM

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FINANCIAL REVIEW continued

ARR was USD 730 million by the end of the year,
which represented 84% of our product revenue,
demonstrating we are well advanced on our
move to a recurring revenue business model.
Key figures 31 December
USDm, except EPS

Non-IFRS revenue

2023

2022

1,000.2

949.6

Non-IFRS EBIT

313.0

272.4

Non-IFRS EBIT margin

31.3%

28.7%

Cash generated from operations
Total assets
Non-IFRS earnings per share (USD)

RevenuesIFRS

IFRS Group revenues were USD 1,000.2 million for 2023, an
increase of 5% versus 2022 on a reported basis.
IFRS total software licensing increased 10% in the year, as we
benefited from a stable sales environment through the year
despite ongoing macroeconomic uncertainty. We saw continued
strong growth in demand for SaaS, resulting in IFRS SaaS revenue
growth of 25%. This was driven by a combination of new logos aswell as increased consumption from existing SaaS clients.
IFRS maintenance revenues grew 5% on a reported basis and
IFRS services revenues declined 7%.

Non-IFRS

Total non-IFRS Group revenue in 2023 was USD 1,000.2 million,
an increase of 5% compared to 2022 on a reported basis.

Cost base
IFRS

Full year costs on an IFRS basis were USD 800.8 million, up
from USD 786.2 million in 2022. The increase in cost was
driven by a combination of investments in the business, inparticular Sales and Marketing and Research and Development,
as well as ongoing wage inflation. After seeing a significant
increase in services costs in 2022 around a number of
implementations, we benefited from a reduction in theservices cost base in 2023 as these implementations went live,
offsetting some of the cost increases in other parts of thebusiness. Share-based payment charges were USD 53.9 million
and in line with expectations.

Non-IFRS

Full year costs on a non-IFRS basis were USD 687.3 million,
up from USD 677.3 million in 2022. Of the USD 113.6 million
difference between the IFRS and non-IFRS cost base, USD
45.0 million is due to adjustments made for the amortizationof acquired intangibles costs, USD 53.9 million is due toshare-based payment charges and USD 14.7 million is dueto the net adjustments made for restructuring costs andM&A-related costs and charges.

391.5

316.6

2,326.8

2,231.8

3.19

2.82

EBIT (operating profit) and Earnings Per Share
(EPS)
IFRS
Full year IFRS EBIT was USD 199.4 million compared to USD
163.4 million in 2022. IFRS EPS for 2023 was USD 1.85,
compared to USD 1.59 in 2022.

Non-IFRSEBIT on a non-IFRS basis was USD 313.0 million, up from USD
272.4 million in 2022, an increase of 15% on a reported basis.
EPS was USD 3.19, up from USD 2.82 in 2022, an increase of 13%.
Non-IFRS EBIT margin was 31.3%, up from 28.7% in 2022.

Cash flows

We generated USD 391.5 million of operating cash in 2023, up
24% from 2022 and representing a cash conversion of 118%
of EBITDA.
We generated free cash flow of USD 242.6 million in the year,
up 26% from 2022. Having already reached the low point of our
free cash flow generation in 2022 due to the transition to
subscription, we saw strong growth in free cash flow in 2023,
in particular benefiting from the positive working capital
impact of SaaS which more than offset any remaining negative
impact from the move to subscription. We have guided for a
growth of at least 16% in free cash flow in 2024 and for free
cash flow to reach at least USD 700 million in the mid-term.
DSOs ended the year at 141 days, an increase of 12 days from2022 largely driven by the transitioned to a subscription modelthroughout the year.

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Temenos AG Annual Report and Accounts 2023

Non-IFRS
USDm, except EPS

2023

143

IFRS

2022

Change2023

2022

ChangeSubscription

160.4

105.7

52%

160.4

105.7

52%

Term license

78.1

135.4

-42%

78.1

135.4

-42%

SaaS

205.1

163.7

25%

205.1

163.7

25%

Total software licensing

443.6

404.8

10%

443.6

404.8

10%

Maintenance

423.7

401.9

5%

423.7

401.9

5%

Services

132.9

142.9

-7%

132.9

142.9

-7%

1,000.2949.6

5%1,000.2

949.6

5%

EBIT

313.0

272.4

15%

199.4

163.4

22%

EBIT margin

31.3%

28.7%

3% pts

19.9%

17.2%

3% ptsEPS (USD)

3.19

2.82

13%

1.85

1.59

16%

Total revenues

Balance sheet and financing

Temenos is highly cash generative with a strong balance sheet
which enables:⚫

investment in the business, including industry-leading
R&D spend;⚫

the servicing of our debt obligations;⚫

funding for targeted acquisitions;⚫

the payment of an annual dividend; and⚫

delivering of value to shareholders through share buybacks.

We continue to actively pursue acquisition opportunities as adriver of shareholder value creation, as well as investing in thebusiness to position ourselves for the market opportunity.
We ended 2023 with a leverage ratio of 1.6x net debt to
non-IFRS EBITDA and have capacity to pursue inorganic growth
opportunities to accelerate our organic growth in line with our
M&A strategy if they arise.

Dividend

We have announced a proposed dividend of CHF 1.20 per sharefor 2023, representing an increase of 9% over last year. This issubject to shareholder approval at the AGM on 7 May 2024. The
shares will trade ex-dividend on 10 May 2024 and the dividend
record date will be set on 13 May 2024. The dividend will be
paid on 14 May 2024. The dividend will be taken from theretained earnings (cash dividend) and is therefore taxable(WHT 35%). Temenos’ policy is to distribute a growing dividend.

Looking forward
Medium-term guidanceEngines of growth

Temenos continues to benefit from multiple drivers of growth,which will enable us to meet our medium-term targets.
The serviceable addressable market of banking spend on third
party software is estimated to be USD 26 billion in 2023,
growing at around 10% CAGR to reach USD 37 billion in 2027,
as banks continue to face structural challenges both in theirown operation and IT real estate as well as in their end market,
with multiple new competitive threats and rapid changes incustomer expectations and product innovation. Within thismarket, SaaS and cloud demand is growing significantly fasterthan on-premise demand, at around 30% CAGR. This drives
growth in both our subscription revenue, with many clientschoosing to implement in the cloud, and our SaaS revenue,
where our cloud operations teams run the applications onbehalf of our clients on public cloud infrastructure.
We continue to expect a significant contribution from tier 1
and 2 clients, which have contributed 43% of total software
licensing revenues in 2023. Lastly, with the move to a subscription
model and the acceleration in our SaaS business, we expect
our ARR to reach at least USD 1.3 billion in the mid-term.

Final remarks

We made excellent progress in 2023, with our subscription
transition substantially complete and strong growth in ARR as
we move to a recurring revenue business model. Our clientsstill faced macroeconomic uncertainty; however, we focusedon executing our strategic plan and delivered a strong set ofresults. We made critical investments in both our sales andR&D organizations which put us a strong position to continue
driving our growth in 2024 and the mid-term.

We have announced medium-term targets as follows:⚫

Annual Recurring Revenue (ARR) to reach at least USD
1.3 billion;⚫

non-IFRS EBIT to reach at least USD 570 million; and⚫

free cash flow to reach at least USD 700 million.

Panagiotis “Takis” Spiliopoulos
Chief Financial Officer

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FINANCIAL REVIEW continued

Alternative performance measures (APM)

The performance of the Group is assessed using a variety ofalternative performance measures that are not defined under
IFRS and are therefore classified as non-IFRS. The alternative
performance measures used by the Group are explained
as follows:

Annual Contract Value (ACV)Annual value of incremental business taken in year. Includes new
customers and up-sell/cross-sell. Only includes the recurring
element of the contract and excludes variable elements.

Annual Recurring Revenue (ARR)

Annualized contract value committed at the end of thereporting period from active contracts with recurring revenue
streams. Includes new customers, up-sell/cross-sell andattrition. Excludes variable elements.

Days sales outstanding (DSO)

Days sales outstanding is the average number of days thatreceivables remain outstanding. It has been calculated as theclosing net trade receivables and contract assets at year-end
divided by total annual revenue multiplied by 365 days.
2023

USDm

Trade receivables and contract
assets – net

2022

387.4

334.9

Leverage

Net debt divided by non-IFRS EBITDA.
2023

2022

Net debt(623.4)(737.6)

Non-IFRS EBITDA

398.8

364.6

Leverage (ratio)

1.6

2.0

USDm

EBITDA*

Earnings before interest, tax, depreciation and amortization(EBITDA) is defined as operating profit excluding depreciationof property, plant and equipment and amortization of
intangible assets.
* Reconciled with comparable IFRS measures.

Reconciliation from IFRS to non-IFRS – EBIT/
EBITDA
USDm

2023

2022

IFRS EBIT

199.4

163.4

Amortization of acquired
intangibles

45.0

45.8

Restructuring

14.7

14.4

M&A-related charges/(credits)

0.0

1.0

Share-based payment

53.9

47.8

1,000.2

949.6

Number of days per year

365

365

Non-IFRS EBIT

313.0

272.4

Days sales outstanding (DSO)(days)

141

129

IFRS EBIT

199.4

163.4

Depreciation and amortization

131.2

138.6

Non-IFRS revenue

Free cash flow

Net cash flows from operating activities and cash flows frominvesting activities associated with capital expenditure on
non-current assets (property, plant and equipment, intangible
assets and capitalized development costs).
2023

2022

331.0

297.9

(Purchase)/disposal of property,
plant and equipment(9.6)(16.4)

Purchase of intangible assets

(2.2)

(2.3)

Capitalized development costs(76.6)(86.3)

Free cash flow

242.6

192.9

USDm

Net cash generated fromoperating activities

330.5

302.0

14.4

13.8

M&A-related charges/(credits)

0.0

1.0

Share-based payment

53.9

47.8

Non-IFRS EBITDA

398.8

364.6

Reconciliation from IFRS earnings to
non‑IFRS earnings
USDm

Cash generated from operations divided by adjusted IFRSEBITDA (adjusted to exclude non-recurring specific items).
2023

2022

Cash generated from operations

391.5

316.6

IFRS EBITDA

330.5

302.0

Adjusted IFRS EBITDA

330.5

302.0

Operating cash flow conversion
(%)

118%

105%

2023

2022

163.4

IFRS EBIT

199.4

Finance cost – net(26.5)(17.4)

Taxation(38.2)(31.5)IFRS net earnings (Profit)

134.7

114.4

72,633

71,957IFRS EPS (USD)

1.85

1.59

IFRS net earnings (Profit)

134.7

114.4

Amortization of acquired
intangibles

45.0

45.8

Restructuring

14.7

14.4

M&A-related charges / (credits)

0.0

1.0

Share-based payment

53.9

47.8

Number of shares – diluted (000)Operating cash flow conversion

USDm

IFRS EBITDA
Restructuring

Acquisition/investment-related
finance cost
Taxation

4.9

(4.4)

(21.5)(15.9)

Non-IFRS net earnings (Profit)

231.7

203.1

Number of shares – diluted (000)72,633

71,957

3.19

2.82

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145

DEFINITIONS
Non-IFRS adjustments

Share-based payment charges
Adjustment made for share-based payments and social
charges, applicable only to non-IFRS numbers.

Discontinued activities
Discontinued operations at Temenos that do not qualify as
such under IFRS.

Taxation
Adjustments made to reflect the associated tax charge mainly
on deferred revenue write-down, amortization of acquired
intangibles, fair value changes on investments and sharebased payments, on the basis of Temenos’ expected effective
tax rate.

Deferred revenue write-down
Adjustments made resulting from acquisitions.

Acquisition/investment-related finance cost
Mainly relates to acquisition and investment-related financing
expenses and fair value changes on investments.
Amortization of acquired intangibles
Amortization charges as a result of acquired intangible assets.
M&A-related charges
Mainly relates to advisory fees, integration costs and earn out
credits or charges.
Restructuring
Costs incurred in connection with a restructuring program orother organizational transformation activities planned andcontrolled by management. Severance charges, for example,
would only qualify under this expense category if incurred aspart of a Company-wide restructuring plan.

Other definitions

Constant currencies
Prior year results adjusted for currency movement.
Like for like (LFL)
Adjusted prior year for acquisitions and movements in currencies.
SaaS
Revenues generated from SaaS licenses.
Net debt
Total borrowings (current and non-current) and cross-currency
swaps less cash and cash equivalents.

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PRINCIPAL RISKS AND UNCERTAINTIES

Responsible
risk management
Risk management

Risk management provides independent oversight over the
portfolio of key risks impacting Temenos and manages
emerging risks with a potential business impact.
We have a Group Risk Management function in place to monitor
and manage enterprise risks including the implementation andoperation of the Group level Risk Management Framework whichis aligned with ISO 31000: Risk management and COSO ERM
methodology. We also have in place a defined enterprise risk
appetite and monitor aggregated risk exposure against thisquarterly. The framework defines governance and oversight at
the Board and management levels and defines risk management
roles and responsibilities for all Temenos employees. The Group
Risk Management function is overseen and managed by the
Chief Risk Officer, who reports to the Chief Security and
Risk Officer, a member of the Executive Committee.
The Audit Committee of the Board of Directors is responsible
for oversight of the risk appetite for the organization factoring
opportunities for business growth and development andmaintaining our status as a trusted partner to clients that
operate in highly regulated environments that are dependent
on Temenos products and services to meet the needs of theirclients to deliver best-in-class financial services to the markets
they serve. The Audit Committee of the Board of Directors has
approved a risk appetite for the key enterprise risks defined.
We have implemented an enterprise risk management program
to monitor risk exposure against agreed upon risk appetite

levels and implement risk mitigation strategies when assessedrisks exceed approved risk appetite levels.
Risks are regularly assessed and monitored against risk appetite
levels to ensure the business is operating within the defined risk
appetite and management action plans are developed when adeviation from the defined risk appetite is detected.
A top-down approach has been adopted to ensure alignment
between enterprise objectives and risk management program
capabilities to ensure enterprise risks are effectively identified,assessed, monitored and managed to support the achievementof strategic objectives.

Risk Management Framework

The Group level Risk Management Framework (GRMF)
establishes the vision, mission, objectives, scope and approachfor managing enterprise level risks within Temenos. A threelines of defense risk management structure has been adopted
which includes clearly defined risk management roles andresponsibilities within Temenos for the Board, management
and all Temenos employees.
The Group level Risk Management Framework establishes
key program components including the following:⚫

risk aware culture;⚫

governance, roles and responsibilities; and⚫

risk management program activities.

Three lines of defense capital Risk Management Model
Board and Audit Committee
Executive Management and Governance Committees
1st line – Risk Ownership(Functional Risk Owners)

2nd line – Facilitation,
oversight and challenge

3rd line –Independent assurance

Independent Group risk
management team that designs,
develops, implements and manages
the GRMF and provides an
independent review and challengeof first line risk management efforts

Independent review of the GRMF
and first line risk management
efforts and the Group Risk
Management Function; provides
assurance to the Audit Committee
and senior management that GRMF
objectives are met(Group Risk Management Function)

Risk Owners within the organization
responsible for managing the risks
within agreed upon appetite
and implementing risk
management strategies(Internal Audit)

Policies, operating standards, procedures
Processes and control activities

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Temenos AG Annual Report and Accounts 2023

Risk management processes

The following diagram highlights the risk management
processes used to identify, assess, monitor, mitigate andreport on key risks. These processes are aligned to the
ISO 31000 risk management standards.
⚫

Business objectives – The basis for developing the Group
Risk Management Framework involves aligning strategic
business objectives with risk management strategies, tools,
capabilities and priorities. Risk management identification
will start by understanding business objectives and context
within which risks exist.

⚫

Risk identification – We have a process to identify anddefine key enterprise level risks, aggregate risks within theGroup risk taxonomy to ensure alignment between risk
management program activities, risk monitoring and reporting
and assessing risk exposure against defined risk appetite.

⚫

Risk appetite – We have risk appetite statements thatdefine qualitative risk levels agreed to by management andthe Board within which Temenos operates in the pursuit of
key business activities.

⚫

Risk assessment – Risk assessments are conducted
regularly across the organization at various levels of detailand granularity to assess inherent risk levels, map risks tocontrols and assess residual risk levels within Temenos.

The risk management culture within Temenos is supported by
the following mechanisms:⚫

tone at the top, including management support over the risk
management program and effective governance and oversight;⚫

clearly defined roles and responsibilities;⚫

training and awareness; and⚫

establishment of a business risk champions network.

Governance, roles and responsibilities

We have a governance and oversight structure in place whichis aligned with defined roles and responsibilities and threelines of defense principles to ensure transparency andaccountability within the organization for risk management
activities and reporting. Key elements of this include:
Audit Committee of the Board
The Audit Committee of the Board is responsible for reviewing
and approving the Group level Risk Management Framework
and risk appetite annually as well as reviewing risk reportingand monitoring the Group risk appetite against assessed
exposure levels.
Group Risk Management Committee
The Group Risk Management Committee is chaired by the
Chief Risk Officer and is comprised of a cross section of senior
management members and is responsible for establishing
the tone at the top within Temenos related to the Group risk
management program, monitoring risk exposure levels against
the defined and approved risk appetite and developing andoverseeing risk management plans to ensure the organization
can operate within approved risk levels.
Group risk management team
The Group risk management team reports to the Chief Risk
Officer and is responsible for the design, development,
implementation and management of the Group level Risk
Management Program including developing enterprise risktaxonomies, facilitating various risk assessments, monitoring
and aggregating risk exposure levels, preparing Group level risk
reporting and risk appetite monitoring to management and theBoard and facilitating key risk management program activities.
The Group risk management team represents the second lineof defense within the three lines of defense risk management
structure and is responsible to perform an independent
challenge over risk management activities taken by various
risk owners.
Risk Owners
Risk Owners are defined within the Group risk taxonomy andare accountable for managing risks within their areas of
responsibility as the first line of defense. Risk Owners are
responsible for risk identification, risk assessment and risk
management activities, including the development andimplementation of risk management plans and strategies
where assessed risk levels are outside of the defined Grouplevel risk appetite.

Business
objectives

Risk
identification

Risk
appetite

Risk
assessment

Risk
response

Recording and reporting

Monitoring and review

Integrating risk management within organizational culture is
key to ensuring the effectiveness of risk management program
objectives. Culture and awareness are key elements in ensuringthat risk taking activities are performed in a measured andcalculated manner and do not expose the organization tosituations that could impact shareholder value or introduce
unwanted risks, exposure or legal liability.

Communication and consultation

Risk aware culture

147

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PRINCIPAL RISKS AND UNCERTAINTIES continued

Risk management continued
Risk management processes continued⚫

Risk response – Risk management response strategies
involve risk mitigation, risk transfer, risk avoidance andrisk acceptance.

⚫

Risk monitoring and review – We aggregate and monitor
risks on a quarterly basis against the defined risk appetite todetermine if the organization is operating within the definedrisk appetite. To the extent that risks are identified andassessed that are outside of the defined risk appetite levels,
action plans are developed, monitored and tracked to ensure
residual risk levels remain aligned with the Group levelrisk appetite.

⚫

Risk reporting – Risks are reported regularly to the Audit
Committee of the Board and the Group Risk Management
Committee. Risk reporting includes aggregated Group levelrisks, risk heatmaps and monitoring aggregated risk exposurelevels against risk appetite to ensure effective awarenessand oversight of risk impact for Temenos. Management
action plans are included within risk reporting as needed
to ensure effective oversight over risk mitigation activities.

Internal controls

In addition to the Group Risk Management Framework, there
is also a robust internal control system in place for financial
reporting and key operational and fraud risks that goes beyond
statutory requirements. All relevant risks are identified,formally assessed and documented. For each risk, we have
implemented specific controls and mitigation plans and theseare documented in formal risk and control matrices. The
effectiveness of the controls is regularly evaluated througha formal self-assessment process which is independently
reviewed and tested by both internal and external audit.
While it is management’s responsibility to design, implement
and operate effective risk management practices and controls,
it is the role of Group Internal Audit to evaluate theeffectiveness of risk management and internal controls, assess
compliance with policies and procedures and provide
assurance to senior management and the Board of Directors
on their overall effectiveness.
To ensure the independence and objectivity of Internal Audit,
the Group Head of Internal Audit reports functionally to the
Audit Committee. The role, responsibilities and authority of
the Head of Internal Audit and the function are set out in
the Internal Audit Charter, which is reviewed and approved
annually by the Committee. All Temenos employees,
contractors, Partners and suppliers are required to cooperate
fully with Group Internal Audit when requested and to provide
access to all records, property and personnel, as required.
The following sections outline the key risks that we haveidentified and track. They represent an aggregated view.

Economic, political and social environment

Temenos derives most of its licensing, SaaS, maintenance andservices revenues from banks and other financial institutions.
The banking industry is sensitive to changes in global economic
conditions and financial markets and is highly susceptible tounforeseen external events, such as political instability, terrorist
attacks, recession, inflation, currency fluctuations, interest ratechanges, or environmental, public health or other adverse
occurrences that may result in a significant decline in the use
and/or profitability of financial services. Any event that resultsin decreased consumer or corporate use of financial services,or cost-cutting measures by financial services companies, may
negatively affect the level of demand for Temenos products
and services. Any reduction in the demand for the Group’s
products in the banking and finance industries, or decrease in
success in marketing the Group’s products to financial sector
clients and prospective clients, could have a material adverse
effect on the Group’s operations and financial condition andresults. Furthermore, if any of the above factors affect thefinancial stability of our clients, there may be an adverse
impact on our ability to recover fees for the services provided
to them.
Temenos’ sustainable global presence, strategic planning,organizational structure, internal controls, business continuity
management program, international mobility and working fromanywhere service delivery to clients, comprehensive productoffering and market leadership help to mitigate this risk.

Law and litigation

Temenos operates in various legal jurisdictions and as such is
subject to various legal and regulatory requirements. Temenos
may have legal proceedings or litigious actions brought against
it. The outcome of these proceedings or actions is intrinsicallyuncertain and the actual outcomes could differ from theassessments made by management in prior periods, resulting inincreases in provisions for litigation in the accounts of Temenos.
Adverse outcomes to legal proceedings or litigious actions
could result in the award of significant damages or injunctive
measures that could hinder Temenos’ ability to conductbusiness and could have a material adverse effect on its
reputation, business, operating results and financial condition.
Litigation of intellectual property infringement claims may
increase as a result of Temenos acquiring companies which
rely on third party code, including open-source code, Temenos
expanding into new areas of the banking industry resulting in
greater overlap in the functional scope of products andincreasing assertion of intellectual property infringement
claims by non-practicing entities that do not design,
manufacture or distribute products.
Although Temenos has implemented controls and believes thatits products do not infringe upon the intellectual property
rights of others and that Temenos has all the rights necessary
to utilize the intellectual property employed in its business,
Temenos is still subject to the risk of claims alleging
infringement of third party intellectual property rights,
including in respect of intellectual property that has beenTemenos AG Annual Report and Accounts 2023

developed by third parties and acquired by Temenos inbusiness or asset purchase transactions. Responding to suchclaims, regardless of whether they are with or without merit,and negotiations or litigation relating to such claims could
require Temenos to spend significant sums in litigation costs
and payment of damages and expend significant management
resources. In addition, such claims could lead to delivery
delays or require the Group to enter into royalty or licensing
agreements on unfavorable terms, discontinue the use ofchallenged trade names or technology, or develop noninfringing intellectual property. The Group’s liability insurance
does not protect it against the risk that its own or licensed
third party technology infringes the intellectual property ofothers. Therefore, any such claims could have a material
adverse effect on the Group’s reputation, business, operating
results and financial condition.
Temenos’ legal teams are aligned to business operations andare involved early in any decisions which may incur legal
implications. The legal team reviews and provides guidanceon complex client contracts to ensure contractual agreementsalign to local commerce laws and regulations. Wheneverpossible, Temenos tries to contractually limit its liabilities.
This is covered further in “Foreign operations”.
More broadly, the risk of potential breach of legislative or
regulatory requirements through general operations, suchas breach of listing requirements or Group level legal
requirements, is managed through Group level controls,
compliance policies and procedures.
Policy compliance requirements are periodically assessed
through Risk Management processes and reviewed by Internal
Audit to provide comfort over adequacy of policies, processes
and compliance.

IP protection

Temenos relies upon a combination of copyright, trademark
and trade secrecy laws, trade secrets, confidentiality
procedures, contractual provisions and license arrangements
to establish and protect its proprietary rights and Temenos’ability to do so effectively is crucial to its success. Temenos
enters into agreements with its employees, Partners,
distributors and clients that seek to limit the distribution of,and otherwise protect, its proprietary information. However,Temenos cannot give full assurances that the steps taken will
be adequate to prevent misappropriation of its proprietary
information as all of the protection measures afford only
limited protection. Temenos’ proprietary rights could bechallenged, invalidated, held unenforceable or otherwise
affected. Certain proprietary technology may be vulnerable todisclosure or misappropriation by employees, Partners or otherthird parties, and third parties might reverse-engineer orotherwise obtain and use technology and information that
Temenos regards as proprietary.
Accordingly, Temenos might not be able to protect its
proprietary rights against unauthorized third party copying or
utilization, which may undermine Temenos’ market positionand deprive it of revenues.

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Temenos may not be able to detect unauthorized use of its
intellectual property, or take appropriate steps to enforce
Temenos’ intellectual property rights. Temenos’ products
are used globally and are therefore subject to varying laws
governing the protection of software and intellectual property
in each of these jurisdictions. Temenos cannot guarantee thatits software and intellectual property will be afforded the samelevel of protection in each jurisdiction, as some jurisdictions
may offer no effective means to enforce Temenos’ rights to
its proprietary information, which could result in competitors
offering products that incorporate features equivalent toTemenos’ most technologically advanced features, which
could have a material adverse effect on Temenos’ business,
results of operations and financial condition.
Any legal action that Temenos may bring to enforce its
proprietary rights could involve enforcement against a Partner
or other third party, which may have a material adverse effecton its ability, and its clients’ ability, to use that Partner’s orother third parties’ products. Moreover, litigation, which could
involve significant financial and management resources, may
be necessary to enforce Temenos’ proprietary rights. Any
material infringement of Temenos’ proprietary technology
could have an adverse effect on its reputation, business,financial position, profit and cash flows. Our Partner contracts
are designed in a manner which provides clarity andunderstanding of both parties with regard to the protection
and safeguarding of their IP.

Regulatory compliance

Temenos is a technology service provider for financial services
institutions which are regulated and overseen by a diverse setof regulatory authorities based on the various jurisdictions
Temenos operates within. As such, Temenos is subject todirect and indirect financial regulatory supervision based on
the portfolio of products and services offer to clients in a
global client ecosystem. A failure to comply with regulatory
requirements and expectations could result in enforcement
actions, sanctions and administrative orders that can be
judicially enforced and result in monetary penalties and otheradverse scenarios.
As the utilization of cloud and SaaS products grows, there isincreased dependence on Temenos as a material outsourced
technology service provider, regulatory scrutiny and oversightalso increases and the degree of exposure to regulatory
examinations, sanctions and fines also increases.
We have a Regulatory Change Management Framework inplace to monitor, assess, identify and implement applicableregulatory requirements in order to manage compliance witha diverse set of regulatory expectations and requirements.
This framework continues to be enhanced as the degree of
regulatory scrutiny increases with new requirements, forexample, related to operational resilience, cybersecurity
and new technologies such as AI. Regulatory compliancecapabilities continue to mature as the legislative and regulatory
landscape evolves and new requirements are implemented.

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PRINCIPAL RISKS AND UNCERTAINTIES continued

Undetected defects or security vulnerabilities

Temenos’ products and offerings may contain defects or
security vulnerabilities that Temenos has not been able todetect and that could adversely affect the performance of the
products and negatively impact Temenos’ relationship with its
clients. It is not always possible to identify and rectify all errors
or defects during a product or services developmental phaseand more commonly Temenos has discovered minor software
defects in certain new versions and enhancements of its
products after they have been introduced. The detection andsubsequent correction of any errors or defects can be expensive
and time consuming and it is not always possible to meet the
expectations of clients regarding the timeliness and the qualityof the defect resolution process. In a worst-case scenario, it
might not be possible to wholly rectify certain defects or
entirely meet client expectations. In such circumstances it ispossible that clients may pursue claims for refunds ordamages, attempt to terminate existing arrangements, request
replacement software or seek other concessions.
A defect or error in any newly developed software of Temenos
could result in adverse client reactions and negative publicity,
as Temenos’ clients and potential clients are highly sensitive todefects in the software they use. Any negative publicity could
hinder the successful marketing of the new software, reducing
demand for the software. A defect or error in new versions or
enhancements of Temenos’ existing products could result in theloss of orders or a delay in the receipt of orders and could result
in reduced revenues, delays in market acceptance, diversion ofdevelopment resources, product liability claims or increased
service and warranty costs, any of which may have a material
adverse effect on Temenos’ business, results of operations
and financial condition. Any claim brought against Temenos
in connection with defective software, regardless of its merits,
could entail substantial expense and require a significant
amount of time and attention by management personnel.

Compensation, incentive and recognition programs are utilized
to align staff efforts to organizational objectives and to enableeffective recruitment and retention; these are reviewed
regularly and adjusted as necessary. Employees receive a
range of training and development to ensure they have thenecessary skills to perform their duties and to develop theircareers within Temenos. Various CSR initiatives are in place
to demonstrate our commitment to a purposeful workplace.
Career and succession planning is reviewed regularly to provide
for continuity of operations and mitigate key person risk.

Foreign operations

Temenos has over 950 core banking clients, over 600 digitalclients, and clients in over 150 countries and it has sales andsupport offices in 39 countries. Temenos’ future revenue
growth depends on the continued successful expansion of
itsAdevelopment, sales, marketing, support and service
organizations, through direct or indirect channels, in thevarious countries around the world where its current andpotential clients are located, including in many developing
countries. Such expansion may require the opening of new
offices, hiring new personnel and managing operations inwidely disparate locations with different economies, legal
systems, languages and cultures, and may require significant
management attention and financial resources. Temenos’operations are also affected by other factors inherent ininternational business activities, such as:⚫

differing or even conflicting laws and regulation of risk andcompliance in the banking sector;⚫

difficulties in staffing including works councils, labor unions
and immigration laws, changing work practices (e.g. flexible
working, working from home and part-time working) andforeign operations;⚫

the complexity of managing competing and overlapping
tax regimes;⚫

differing import and export licensing requirements;⚫

operational difficulties in countries with a high-corruption
perception index;⚫

protectionist trade policies such as tariffs;⚫

limited protection for intellectual property rights insome countries;

New vulnerabilities are monitored as they emerge, and analysis
performed to measure the impact on Temenos products, ifany. Products are patched and updates provided as priority to
mitigate security risk in case of new vulnerabilities.

⚫

difficulties enforcing intellectual property and contractual
rights in certain jurisdictions;⚫

differing data protection and privacy laws; andKey personnel⚫

political and economic instability, outbreaks of hostilities,
terrorism, mass immigration, international embargoes,sanctions and boycotts.

Temenos has implemented a robust Secure Software
Development Lifecycle (SSDLC) and has a program which
drives strong security culture across development andoperations teams. Quality and product security assurance
teams which are independent functions test adherence tosecure practices. Temenos products undergo comprehensive
security testing both internally and using external reputed third
party firms at least annually.

Temenos operates in an industry in which there is intensecompetition for experienced and highly qualified individuals
and this may be exacerbated by longer-term demographic
and geopolitical changes. The success of Temenos is partly
dependent on its ability to identify, attract, develop, motivate,
compensate and retain highly skilled and qualified management
and other personnel, particularly those with expertise inbanking software, cyber and information security and cloudand SaaS operations. There is intense competition forexperienced and highly skilled personnel globally and if
Temenos fails to recruit and retain the numbers and typesof employees that it requires, its business, operating results
and financial condition may be adversely affected.

The risks associated with the factors stated above will
intensify as Temenos expands further into new countries andmarkets through organic growth or acquisitions. Additionally,laws and regulations and governments’ approaches to theirenforcement, as well as Temenos’ products and services, arecontinuing to change and evolve. Compliance with the laws
and regulations in the various jurisdictions may involve
significant management time and costs and require costly
changes to products and/or business practices.

Temenos AG Annual Report and Accounts 2023

Risks related to foreign operations are regularly assessed andmitigated as needed. Specific policies and procedures are inplace to ensure compliance with export control and sanctions,anti-bribery and corruption, anti-money laundering, dataprotection and privacy and other legislation.

Foreign exchange and/or interest
rate fluctuations

Temenos’ financial statements are expressed in US dollars andTemenos generates the majority of its revenues in US dollars.
However, a significant portion of its operating expenses are
incurred in currencies other than the US dollar, particularly
in Euros, Swiss francs, Rupees and Pounds sterling.
Temenos is exposed to the fluctuation in exchange rates ofeach of these currencies. Temenos makes efforts to mitigate
its foreign exchange risk by aligning its revenue streams tocurrencies that match its cost base and hedges most of thematerial residual exposure by the use of derivative instruments.
However, such hedging may not be sufficient protection against
significant fluctuations in the exchange rate of the US dollar
to other currencies, in particular those currencies in which
Temenos incurs operating expenses, generates revenues orholds assets. Such fluctuations may impose additional costs
on Temenos and may have a material adverse effect on
Temenos’ financial condition and results of operations and on
the comparability of its results between financial periods.
Furthermore, the Group is exposed to the fluctuation ininterest rates. Some of the Group’s financing arrangements
bear interest at floating rates of interest plus a margin and are
adjusted periodically. These interest rates could rise significantlyin the future. To the extent that interest rates were to increase,
the Group’s interest expense would correspondingly increase,
reducing Group cash flow. This could have a material adverse
effect on the Group’s business, financial condition and resultsof operations.
Temenos uses a combination of various techniques to protect
against currency and interest rate fluctuations including using
derivatives to mitigate the risk when it is deemed to besignificant in compliance with the terms of Temenos
credit facilities.

Compliance with the terms of Temenos
credit facilities

Temenos has credit facilities in place with a syndicate ofbanks. The facilities contain financial covenants, undertakingsand event of default provisions. Moreover, the facilities containcross-default provisions such that a default under anotherdebt instrument, such as bonds, could result in a default under
the credit facilities and acceleration of the debt thereunder.
The inability of Temenos to draw down the credit facilities tosatisfy its financing requirements could have an adverse effecton Temenos’ growth. Compliance with the terms is monitored
on a monthly basis.

Integrated Report151

Managing client relationships

Temenos enters into long-term relationships with its clients.
The contractual arrangements supporting these relationships
are often varied and diverse to reflect the nature of therequirements of the client factoring in specific legal andcultural requirements of the client’s operating environment
as well as the multiple stages of the relationship.
Temenos regularly assesses client satisfaction and proactively
seeks and responds to client feedback via the Client Voice
program and monitoring of our Net Promoter Score (NPS).
Temenos aims to build long-term strategic relationships withclients in order to maximize the value provided to both parties.
Through strong relationships, Temenos is able to further develop
products according to industry needs and requirements. The
Temenos Ambassador Program and CEO Navigator tool support
this goal.
Furthermore, mechanisms for tracking and oversight ofcontract clauses are utilized by the global contract team toprovide additional comfort over the effective managementof client contractual arrangements.

Strategic partnerships

Temenos delivers its products to clients directly and indirectly
through distributors and through strategic alliances with IT
service providers. Temenos’ strategic partners sell to clientsand provide implementation services through a contract withthe client, rather than with Temenos. These relationships withIT service providers and strategic partners help to drive
co-innovation of Temenos’ products, profitably expand
Temenos’ routes-to-market to enhance market coverage andprovide high-quality services in connection with Temenos’
product offerings. Any failure to maintain and expand these
relationships could adversely affect Temenos’ products andservices which, in turn, would have an adverse effect on
Temenos’ ability to compete successfully with its competitors,
and therefore negatively affect the results of operations andfinancial condition.

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PRINCIPAL RISKS AND UNCERTAINTIES continued

Cloud and SaaS solutions

Cloud and SaaS technology is inherently complex and, as such,
Temenos may be subject to changing regulatory requirements,
evolving client attitudes and technical complexities in developing
new business offerings and support services. Temenos may failto achieve desired operating profit results in this market due toregulatory changes and an inability to develop a competitive
product which appeals to its clients.
In delivering its SaaS and cloud services, Temenos is highly
dependent on the availability and security of underlying
infrastructure provided by various suppliers including, forexample, Microsoft Azure and Amazon Web Services (AWS).
By providing cloud and SaaS technology to clients, Temenos
will handle client data. Hardware, software, network or data
center failures, product defects or system errors could resultin data loss or corruption, or cause the information held to beincomplete or contain inaccuracies. The availability of Temenos’application suite could be interrupted by a number of factors,
such as the failure of a key supplier, its network or softwaresystems due to human or other error and security breaches.
Although Temenos employs strict security, data protection
and privacy measures, there is a risk that such measures
could be breached as a result of malicious third party action,
employee error and malfeasance, or otherwise, and if as aresult unauthorized access is obtained to client data, which
may include personally identifiable information about users,
Temenos could suffer significant reputational damage and be
exposed to significant liabilities.
Temenos continues to enhance its cloud and SaaS offeringand associated security controls though a range of complianceprograms. Temenos holds an annually renewed SSAE18 – SOC 1
Type 2, SOC 2 Type 2 and SOC 3 along with a CSA-CCM (Cloud
Security Alliance – Cloud Control Matrix) Star Level 2
compliance attestation. During the year we have also achieved
adherence to the EU Cloud Code of Conduct Level 2. ISO 9001,
ISO 27001, ISO 27017, ISO 27018, ISO 20000-1 and ISO 22301
certifications also provide a greater degree of assurance toclients. Temenos also includes in its independent compliancevalidation program the certification of the Azure, AWS andKony Infrastructure against PCI-DSS standards.

Software implementation project management
The implementation of Temenos’ software and integration ofvarious product components is a complex process requiring
skilled and experienced personnel. The implementation of
Temenos’ software is often performed in part or wholly byservice delivery partners as well as committed resources of
the client. The complex nature of the solutions makes it
necessary to provide training and education on the operationof the product.

The reliance on third party capabilities and the complex natureof product customization and installation requirements maylead to unforeseen events occurring which may delay the
progress of implementations.
Temenos focuses heavily on training the staff and Partners
responsible for implementation of software to ensure a strong
mix of qualified project managers and technical productexpertise. Temenos ensures the adequacy of skills throughrequiring certification of staff and Partners in Temenos
Implementation Methodology and products. Our provision of
the Temenos Learning Community (TLC) shows our ongoingcommitment to this area.
Implementation teams are also trained to identify andeffectively manage any unforeseen events and a suite of risk
management tools is used to monitor and track potential

issues which may adversely impact the successful installationof software. Project governance boards are held regularly tooversee the delivery of the implementation against milestones.
Temenos Implementation Methodology is periodically reviewed
and updated in order to maintain high standards for Temenos
staff and Partners. Identified initial project risks receive an
increased level of review and analysis in order to more
effectively mitigate and monitor them throughout the lifeof the implementation project.
To further enhance the operational oversight for SaaS project
implementation, Temenos has formed a Cloud “Architecture
Board” (CAB) and a Cloud “Operational Readiness Board” (ORB).
The Board’s mission is to provide early guidance on SaaS
project implementation work, monitor and review client
deployment readiness, oversee and approve the operational
solutions introduced to cloud environment and make sure
such solutions will not impact Temenos’ ability to meet clients’security, resilience, support and service level expectations.

Mergers and acquisitions

Temenos pursues a strategy of making targeted investments,
which may include acquisitions, minority stakes, strategic
alliances and partnerships. Risks associated with such a
strategy include the availability of suitable targets, thedifficulty in evaluating potential transactions, including therisk that our due diligence does not fully assess valuationconsiderations, and successful integration. Risk of failure
to assimilate operations and personnel may materialize.
The process of integrating an acquired company or businessmay create unforeseen operating difficulties and expenditures.
It may take longer than expected to realize the full benefits
from transactions.
Minority investments in new ventures may involve further
challenges, including more limited financial and non-financial
information on the business, less frequent and complete
reporting that would typically be available for more maturebusinesses, and difficulty in periodically assessing a valuationof an investment.
Further consolidation in Temenos’ industry may decrease thenumber of potential desirable acquisition targets. Failure toacquire, integrate and derive the desired value of any businesses
or assets in the future could materially adversely affect Temenos’business, results of operations and financial condition.
In addition, businesses that Temenos acquires or in which
Temenos invests might not perform as anticipated, resulting
in possible impairment or losses, consequently impacting
Temenos’ statement of financial position.

Security, business continuity and resiliency

As a software technology vendor and SaaS provider, we facevarious cyber and other security threats, including:⚫

attempts to gain unauthorized access to sensitive
information and data;⚫

threats to the safe and secure operation of our software
solutions and services;⚫

threats to the safety of our Directors, officers and employees;⚫

threats to the security of our facilities and infrastructure; and⚫

threats from terrorist acts or other acts of aggression.

Our clients and Partners (including subcontractors) facesimilar threats.
Although we utilize various procedures and controls to monitor
and mitigate the risk of these threats, there cannot be fullassurance that these procedures and controls will beTemenos AG Annual Report and Accounts 2023

sufficient. These threats could lead to losses of sensitive
information or capabilities, harm to personnel, infrastructure
or products and/or damage to our reputation as well as ourPartners’ ability to perform on our contracts.
Cyber threats are evolving and include, but are not limited to:⚫

attempts to gain unauthorized access to data, information
or intellectual property;⚫

disruption to or denial of service; and⚫

other malicious or criminal activities.

These threats could lead to disruptions in mission-criticalsystems, unauthorized release of confidential, personal orotherwise protected information (ours or that of our employees,
clients or Partners) and corruption of data, networks or
systems. In addition, we could be impacted by cyber threats orother disruptions or vulnerabilities found in products we use orin our Partners’ or clients’ systems that are used in connection
with our business. These events, if not prevented or effectively
mitigated, could damage our reputation, require remedialactions and lead to loss of business, regulatory actions,potential liability and other financial losses.
We provide software products and services to various clients
who also face cyber threats. Our software products andservices may themselves be subject to cyber threats and/or
they may not be able to detect or deter threats, or effectively
to mitigate resulting losses. These losses could adversely
affect our clients and our Group. The impact of these factors
is difficult to predict, but one or more of them could resultin the loss of information or capabilities, harm to individuals
or property, damage to our reputation, loss of business,regulatory actions and potential liability, any one of which
could have a material adverse effect on our financial position,
results of operations and/or cash flows.
From an organizational perspective, the Security and Privacy
Committee provides the Group level oversight. This Committee
is chaired by the Chief Security Officer, who reports to theChief Security and Risk Officer – a member of the Executive
Committee. Board level oversight is exercised by the
Audit Committee.
In terms of business processes, security assurance isintegrated into all business processes related to R&D, thesupply chain, sales and marketing, delivery and technicalservices. In addition, Temenos reinforces the implementationof the cybersecurity assurance system by conducting internal
audits and receiving external certification and auditing fromvarious independent third party organizations.
In connection with personnel management, our employees,
Partners and consultants are required to comply with security
policies and requirements established by Temenos and receive
appropriate training so that the concept of security is deeply
rooted throughout Temenos. To promote cybersecurity,
Temenos will take appropriate action against those who violate
cyber assurance policies. Employees may also incur personal
legal liability for violation of relevant laws and regulations. If
Temenos security measures are breached and unauthorizedaccess is obtained to Temenos’ IT systems, Temenos’ businesscould be disrupted and Temenos may suffer financial losses
as a result of the loss of confidential client informationor otherwise.
Temenos’ insurance coverage might not cover claims against
it for loss or security breach of data or other indirect orconsequential damages. If Temenos experiences interruptionsin the availability of its application suite, Temenos’ reputation

Integrated Report153

could be harmed, which may have a material adverse effecton Temenos’ business and financial condition.
As part of the periodic risk assessment of IT infrastructure,potential physical and security vulnerabilities are factored into
the process for developing a resilient and robust IT infrastructure.
The physical security of IT infrastructure and personnel is
kept secure through standardized general IT controls acrossTemenos in line with best practice standards.
Temenos has implemented a Business Continuity Management
System (BCMS) to cover Business Continuity and Resilience
requirements and this is certified to ISO 22301:19. The framework
touches on all aspects of Business Continuity and Resilienceand is tested and audited regularly.
Information systems are regularly audited internally andexternally (e.g. SOC 1, SOC 2, SOC 3, ISO 27001, ISO 27017
and ISO 27018) to provide assurance over the managementof these risks.

Supply chain complexity

As we continue our transition to a cloud/SaaS services anddelivery model, there is an increased business need to leverage
specialized products and services to meet the demands of adiverse set of customers and their business requirements forresilient scale cloud/SaaS solutions. As such, there is increased
risk related to third party service providers that support thedelivery of cloud/SaaS products and services to Temenos
customers in addition to cloud platform service providers AWS
and Azure. Leveraging an ecosystem of specialized third party
service providers to deliver Temenos cloud/SaaS products andservices increases the complexity of managing and overseeing
these third party relationships from an operations, legal,
regulatory, compliance and risk management perspective.
Additionally, there is increased focus and pressure from clientsand the marketplace around ESG program requirements with afocus around moving to net-zero carbon emissions and a heavy
focus on Scope 3 emissions. As the ecosystem and complexityof third and fourth parties within the Temenos cloud supply
chain increases, these risks become more challenging toeffectively manage.
The inability to ensure and manage trust and transparency inthe supply chain utilized to deliver cloud/SaaS products andservices to customers could result in legal liability, increased
regulatory scrutiny, challenges delivering products and services
in line with contractual requirements and security incidents
and data leakage/theft which could have a negative impact on
Temenos’ ability to gain efficiencies and effectively augment
current enterprise capabilities in a manner that delivers value
to customers.
We are proactively increasing the degree of rigor and enhancing
standardized programs and processes to manage critical cloudservices providers that compose the Temenos cloud ecosystem
in order to ensure these relationships can effectively be managed
to deliver anticipated business benefits to customers andshareholders. Examples of actions taken include standardizing
legal, regulatory, compliance business continuity and ESG
contractual schedules as well as other actions to enableeffective management of critical cloud supplier relationships.

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Temenos AG Annual Report and Accounts 2023

PRINCIPAL RISKS AND UNCERTAINTIES continued

Insurance

Temenos’ corporate insurance team manages all global
policies. The main global policies provide coverage across corebusiness areas such as Professional Indemnity Liability (errors
and omissions), Cyber Liability Insurance, Crime Insurance,
Global Travel and Directors’ and Officers’ Insurance.
As with any large organization, Temenos strives to secure thatits activity, offices and employees are adequately covered, given
the liability exposure and the insurance market capacities.
Temenos counts on reliable insurance partners; hence, mostof Temenos’ insurance providers are A or A+ AM Bestrated companies.
Across the various legal jurisdictions in which Temenos
operates, compliance with the local legal requirements isensured by holding certain insurance policies such as workers’
compensation policies and third party liability, employees’
health and accident benefits protection.
Temenos’ local offices manage their legally required policies
with oversight and review by Group management. Each office/Temenos entity is insured against property damage, businessinterruption and public liability risks. Information and IT
infrastructure is also covered by regional and/or local policies.

Environment and sustainability

As a company, we recognize that climate change is a global
challenge with financial implications. We also recognize theimportance of understanding and taking action on our material
environmental impacts, risks and opportunities. As an IT
company, to serve our clients, we rely heavily on people,
computing resources and business travel. We are aware of
the environmental impacts of our business and support aprecautionary approach to environmental challenges on ourown initiative and an environmentally responsible way of
conducting our business operations and serving our clients.

Climate change

In response to increasing concern about the impact and risk
associated with climate change, Temenos has aligned theclimate risk assessment with the recommendations of the
Task Force on Climate-Related Financial Disclosures (TCFD).
As part of this, we have conducted a qualitative andquantitative scenario-based climate assessment to identify
both climate-related risks and opportunities, in order toinform Temenos’ medium- and long-term business strategy.
Governmental actions to mitigate climate change could
increase operating costs. Increased frequency of extreme
weather (storms, floods, heat waves) could cause disruptionof our operations. Failure to meet client, Partner, investor
or other stakeholder expectations or globally recognized
standards on sustainability and climate change strategy
could have an impact on the demand for our products, ourratings in sustainable investment indices and our corporate
reputation, resulting in reduced growth and profitability.

Biodiversity

Temenos recognizes the indispensable role biodiversity plays
in a sustainable world and has included such risks in its
environmental risk assessment registry: operational risks
associated with resource dependency; regulatory risks asregulatory changes are anticipated and must be addressedin a timely manner as policymakers ramp up policy action on
biodiversity; and market risks as consumers’ preferences
towards products with reduced biodiversity impacts cancreate a shift on the product demand.

Our strategy

As part of our environmental responsibility and climate change
strategy, we have set up an internal Company-wide mechanism,in order to measure, monitor and report on our global impact.
Our ISO 14001 certified Environmental Management Systemprovides a solid framework to address such risks and drives
continual improvement. We also implement mitigation,
adaptation, energy reduction and emissions avoidance
initiatives, by putting in place policies and management systems
and setting internal targets to improve energy efficiency, reduce
emissions and invest in carbon removal and/or offset projects
for the carbon we cannot reduce or avoid. We have incorporated
environmental requirements into our corporate facilities
management practices. Our near-term target has been officiallyvalidated by the SBTi and is aligned with the Business Ambitionof 1.5˚C. We work with like-minded business partners andsuppliers to ensure continued availability of our business
operations and products and sustainable options for ourclients. We monitor environmental regulations, trends andother related governmental developments in the countries we
operate in and take proactive actions. Where environmental
legislation is not clear or enforced, we ensure that allnecessary environmental practices are in place. We
communicate our environmental responsibility strategy to all
our stakeholders and raise awareness internally and externally.
Through our cloud and SaaS product offering, we help ourclients integrate environmental sustainability into their businessstrategies, by enabling them to reduce their environmental
impact, as well as helping their customers track theirenvironmental footprint. We are an environmentally responsibleneighbor and support environmental projects in the communities
where we operate. We engage in initiatives focused onnature-based solutions, such as tree-planting andearth‑restoring activities, to tackle climate change and improvebiodiversity. We participate in global efforts to improve
environmental protection and understanding and align with
the United Nations’ global agenda for sustainable development.
We ensure that our clients, suppliers, Partners and contractors
are committed to following our environmental policies andsetting environmental targets, by conducting sustainability
risk assessments as well as audits and reporting annuallyto the Board of Directors.

Temenos AG Annual Report and Accounts 2023

Internal controls failures

Although Temenos considers the controls and procedures it
currently has in place to minimize the financial reporting, legal,
disclosure and other regulatory, compliance, non-financial andoperational risks associated with its business to be adequate,
Temenos recognizes that the efficacy of some of thesecontrols and procedures depends significantly on employees
and contractors and on input from external parties and all ofthese controls and procedures need to be kept under regularreview, particularly given the pace at which Temenos’ businesshas developed and generally increasing regulatory scrutiny.
There is no guarantee that Temenos will not be targeted bythose willing to commit fraud against Temenos. Such an action
could come from either an internal or external source andcould result in a significant adverse impact on Temenos’business, results of operations and financial condition.
Internal controls are regularly reviewed, updated and tested
in accordance with our Internal Control System process andadditionally by Internal Audit which serves as a third line ofdefense to provide assurance on the effectiveness of risk
management and internal control systems.
In addition to the assurance provided by Internal Audit,
Temenos engages a range of external assurance providers toprovide industry standard certifications, e.g. ISO accreditations
and Systems and Organization Control (SOC) reports.

Emerging risks

Anticipating potential risks is a critical component to effective
risk management. Understanding the potential business impact
of macro level and environmental conditions and factors is key
to minimizing adverse business impact of these risks frommaterializing in a manner that negatively impacts value toshareholders, clients, business partners and employees.
Temenos has designed, developed and implemented as partof the Group Risk Management function an emerging risk
identification and management program. Identification of
emerging risks involves taking a broader approach to risk
identification where potential risks are identified that have thepossibility of impacting Temenos in the three to five-year range
and developing proactive risk management strategies tominimize potential business impact.
We have capabilities to survey the broader risk landscape,review and assess risk trends, macro-environmental
considerations and thought leadership to outline emerging
risks and develop a proactive strategy and approach to
managing those potential risks. Several sources of information
include the annual World Economic Forum Global Risk Report,
publications from various industry groups (e.g. CRO Forum– Emerging Risk Initiative) and various pieces of thought
leadership. The following were considered important indeveloping a forward-looking approach to manage risks that
could impact Temenos.

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155

Risks associated with Artificial Intelligence (AI)

There is an increased concern about the adverse outcomesthat AI can have impacting individuals, businesses, ecosystems
and/or economies. AI technology can lead to: unfair anddiscriminatory outcomes given that the system can inherit
biases present in data input; lack of transparency on how
decisions have been taken, eroding trust and hindering
accountability; job displacement in certain professions; newsecurity risks where malicious actors can manipulate input
data to deceive the system; increased privacy concerns giventhat AI requires high volumes of data for training; andenvironmental impact as significant computational resources
may be needed to support the system, increasing energy
consumption. While this is identified as a risk impacting thebusiness, this risk is expected to further materialize within thenext three to five years and potentially impact Temenos’position within the marketplace and possibly impact strategic
growth plans.
Potential business impact
The use of AI in our product offerings will offer numerous
benefits to our clients; however, the inability to effectively
manage the risks associated during its development anddeployment could result in legal liability, increased regulatory
scrutiny, challenges in selling products and services andreputational damage.
Mitigation measures
We will review and enhance as appropriate our AI management
processes and product offerings. This includes developing
appropriately focused risk management activities around thedevelopment, deployment and use of AI both internally andwithin our product suite; regulatory horizon scanning andanalysis of emerging regulation and legislation to ensure
effective compliance; reviewing and updating our contract
documentation as needed; and developing appropriately
detailed product documentation to support client needs
and expectations.

Frontier technologies integration challenges

As new technologies such as Augmented and Virtual Reality,
Quantum Computing or others emerge, we may face
integration challenges. Keeping up with these technologies andseamlessly integrating them into existing platforms may becomplex, expensive and time consuming. While not identified
as an immediate risk impacting the business, this risk is
expected to further materialize within the next three to five
years and potentially impact Temenos’ position within themarketplace and possibly impact strategic growth plans.
Potential business impact
The inability for Temenos to successfully integrate newtechnologies into its offerings may lead to client erosion
and loss of market share.
Mitigation measures
We will continue to invest in R&D to ensure that we caneffectively integrate new technologies into our offerings
where it is believed to be beneficial for our clients to ensure
they can benefit from the latest technological developments.

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BOARD OF DIRECTORS

1

1 – Thibault de Tersant

2

Chairman, Independent and Non-Executive Director
Nationality and age
French, born in 1957

Experience

Thibault de Tersant has been the Chairman of the Board of
Directors since May 2023.

A N

3

4

A C

C N

During his tenure at Dassault Systèmes, Thibault, who, as CFO,
managed an organization in charge of Finance, Legal, Sales
Administration, Pricing, Contracts Negotiations, Internal Control
and M&A, conducted more than 80 successful acquisitions totalingaround USD 5 billion. He oversaw Dassault Systèmes’ successful
initial public offering on the Paris and Nasdaq stock exchanges in
1996, as well as a secondary offering in 1997. Thibault, in his
capacity as General Secretary, is responsible for corporate
structure and governance, compliance and overviews various
Dassault Systèmes businesses. He is also Co-Chair of the Dassault
Systèmes Sustainability Committee and Chairman of the Dassault
Systèmes Foundation. He is also member of the Board and bureauof the Semaines Sociales de France, a non-profit association. He
has more than 30 years of experience in the software industry.
Thibault is also member of the Board and Executive Committeeof Numeum, the French syndicate of companies working in thedigital domain.

6

5

He was a member of the Board of Dassault Systèmes from 1993
until July 2020 and he was CFO from 1988 until 2018. He wasnamed Senior Executive Vice President and General Secretaryin January 2018.

Thibault is a graduate of the ESSEC Business School and of theInstitut d’Etudes Politiques de Paris.

2 – Ian Cookson

Vice-Chairman, Independent and Non-Executive Director
Nationality and age
Swiss, born in 1947

C N

7

C N

Ian Cookson has been active in the financial services sector
for over 45 years and has built one of the most efficient IT
operations in Private Banking worldwide.
Ian was Chief Operating Officer of EFG International and memberof the Executive Committee until 2007. He was previously amember of the Executive Committee of EFG Bank (since 2002).
Prior to this, Ian was the Deputy Chief Executive Officer of EFG
Bank (1997-2002), Chief Operating Officer of Banque de Dépôts,
Geneva (1991-1997) and Head of Management Services of CBI-TDB
Union Bancaire Privée (1986-1991).

8

A

Experience

A C

Acknowledging the importance of the sustainability and CSR
strategy (ESG matters), Ian is chairing the Nomination & ESG
Committee which is also considering the strategy and targets
for the ESG matters and overseeing the ESG reporting.

3 – Peter Spenser

Independent and Non-Executive Director
Nationality and age

Key
A Audit Committee
N Nomination & ESG Committee
C Compensation Committee
Chair of the Committee

British and American, born in 1954

Experience

Dr. Peter Spenser has over 40 years of experience in the financial
services sector and technology including an in-depth understandingof Information and Cyber security, and as such is acting as theBoard executive sponsor for these matters.
Until June 2016 he was a senior Partner at Deloitte Consulting in
the US where in addition to serving a number of major clients(Global Banks, Brokerages and Wealth and Asset Managers), he led
a number of practice areas including the Investment Management
practice and also the Global Financial Services IT and Data Analytics
practices. Prior to this, he was Director of Engineering at AcquiData,
Inc. which he co-founded (1985-1990), Director of Software Systems
at Magnaflux, Inc. (1982-1985) and a developer/analyst at Logica(1979-1982).
Peter holds a BA and MA in Theoretical Physics from Cambridge
University and a Ph.D. in Astrophysics from University
College London.

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Temenos AG Annual Report and Accounts 2023

4 – Maurizio Carli

Independent and Non-Executive Director
Nationality and age
Italian, born in 1958

Experience

Maurizio Carli served as strategy advisor to VMware until July 2020,
a position he has held since stepping down as Executive Vice
President, Worldwide Sales and Services for VMware early in 2020.
Prior to this global role, Maurizio served as Corporate Senior Vice
President and General Manager for two of VMware’s three sales
regions between 2008 and 2015. He was Senior Vice President andGeneral Manager, EMEA at Business Objects prior to joining VMware.
In his early career, Maurizio served in a number of leadership positions
in sales, marketing and global strategy at IBM between 1984 and 2002.
Maurizio currently serves as a board Director for Board
International and as an independent board member of Telecom
Italia. He previously served as an independent board member forBlue Prism from 2021 to 2022, Telecity Group from 2011 to 2016 andas a board member for the newly launched European Software
Association from 2005 to 2006.
Maurizio holds a Bachelor of Science in Electronic Engineering from
Politecnico di Milano, Italy, where he graduated with honors.

5 – Deborah Forster

Independent and Non-Executive Director
Nationality and age
British, born in 1966

Experience

Debbie Forster is CEO of the Tech Talent Charter, an industry
collective which aims to deliver greater inclusion and diversity in
the UK technology workforce.
Debbie brings a unique skill set and in-depth understanding acrossthe areas of ESG, technology, innovation, diversity and education,
and was awarded an MBE in the Queen’s New Year’s Honour List in
January 2017 for “Services to Digital Technology and Tech
Development” as well as being named the “Most Influential Womenin UK IT” by Computer Weekly in 2019. She currently serves on the
UK government’s Digital Economy Board, its National Cyber
Advisory Board and is a Non-Executive Director for the LendingStandards Board.
Previously, Debbie was CEO of education charity Apps for Good,taking the organization through a period of exponential growth,and worked for e-skills, the UK’s national IT sector skills council.
Prior to this, she had a two-decade career in education.
Debbie holds an MA from the University of Leeds.
Acknowledging the importance of ESG matters, Debbie is also
acting as the Board executive sponsor for ESG matters and isa member of the Nomination & ESG Committee.

6 – Cecilia Hultén

Independent and Non-Executive Director
Nationality and age
Swedish, born in 1968

Experience

Cecilia Hultén is an accomplished business professional with overtwo decades of experience in the financial industry for institutions
such as UBS and Nordea and brings strong financial skills with an
in-depth understanding of risk management and capital markets.
She has transitioned from a global banking executive to a recognizedentrepreneur, investor and board member, focusing on transformative
businesses that solve real-world problems in the fintech andhealth-tech sectors. Through strategic investments and partnerships,
Cecilia has established a reputation as a thought leader.

157

She is working with companies including Kompasbank, a European
challenger bank for SMEs, Konsolidator and a SaaS company
providing a cloud-based consolidation tool. In 2023, she exited hercommitment to Hejdoktor, a digital healthcare provider, that was
sold to a strategic investor. She has co‑founded two companies: abiotech company, Cbio, focusing on cell-based therapies to enable
cancer cure, and a data management company commercializing a
project from MIT’s Fintech program, where she has taken the roleof CFO.
Cecilia holds a BSc from the Gothenburg School of Economics
and studied at the Stern School of Business MBA program at NYU.
Additionally, Cecilia spent five years as an executive coach at
Stanford Graduate School of Business in Corporate Innovationin its LEAD program, where she graduated.

7 – Xavier Cauchois

Independent and Non-Executive Director
Nationality and age
French, born in 1957

Experience
Xavier Cauchois has over 40 years of experience in thetechnology sector.
Until May 2018 he was a senior Partner at PwC in France where hestarted and spent over 35 years, combining auditing and advisory
activities. There, he supported French and international clients,
start-ups, mid-sized companies and large groups in their growth,
specializing in the technology, telecommunication and media sector
and as such brings a deep knowledge of accounting, auditing andassociated regulatory aspects to the Board of Directors.
Xavier held several management responsibilities and was Head of
PwC Europe and France in the Technology sector until 2009 andmember of the Global Strategic Committee for Audit from 2005
to 2008. He was a member of the France Executive Committee
in charge of Partners and Strategy from 2013 to 2016 and an
independent Director of Technicolor Creative Services until 2023.
He is currently an independent Director of Dassault Systèmes.
Xavier is a graduate from the ESCP Business School and is a French
chartered accountant.

8 – Dorothee Deuring

Independent and Non-Executive Director
Nationality and age
Austrian, born in 1968

Experience

Dorothee Deuring is a corporate finance specialist, with deep
knowledge of the banking, pharmaceutical, chemical andutilities sectors.
She has been a non-executive member of the Board of Directors
and Audit and Remuneration Committees of Elementis plc (UKlisted company, FTSE 250) since 2017.
Former mandates include PolyPeptide AG (Swiss listed company,
2023-2024), Axpo Holding AG (Switzerland, 2017-2023), Lonza
Group AG (Swiss SMI listed company, 2020-2022), Immofinanz AG(Austria, 2021-2022), Bilfinger SE (Germany, 2016-2021), Piqur
Therapeutics AG (Switzerland, 2019-2021), Selecta Group AG(Switzerland, 2020) and Röchling SE & Co. KG (Germany, 2016-2019).
Between 2011 and 2014, Dorothee led the European Corporate
Finance Advisory Group of UBS AG Wealth Management as
Managing Director. Prior to UBS, she served the Investment Banking
arm of Bank Sal. Oppenheim Jr & Cie as Managing Director andHead Healthcare M&A. In 2003, she had joined Roche Diagnostics
as a Vice-Director of Business Development and served Roche
Corporate Finance Development until 2007. Dorothee started hercareer at McKinsey & Company in Switzerland in 1997.
Dorothee holds a Master’s degree in Chemistry from UniversitéLouis Pasteur, Strasbourg, and a Master of Business Administrationfrom INSEAD, Fontainebleau.

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EXECUTIVE COMMITTEEAB

A – Andreas Andreades

Chief Executive Officer
Nationality and age
Cypriot, born in 1965

Experience

C

D

Andreas Andreades has been Chief Executive Officer since
May 2023. After early careers with KPMG in London and PepsiCo,
Andreas Andreades joined Temenos in 1999, initially in the positionof Chief Financial Officer, before assuming the responsibilities of
the Deputy Chief Executive Officer in 2001 and then the Chief
Executive Officer’s role from 2003 until 2011, when he was appointed
Chairman of the Board of Directors. He was Executive Chairmanof the Board of Directors (2012-2023) and acting CEO from January
until May 2023. Since he joined Temenos, the Company has grownfrom less than 150 employees to over 6,700, generating approx.
USD 1 billion in annual revenues and achieving a market capitalizationof circa USD 7 billion (end 2023), establishing it as the global leader
in banking software. Since 2003 the market capitalization of
Temenos has grown by approximately 186 times or a compound
average of 28% per annum.
Andreas holds a Master’s Engineering degree from the University ofCambridge and is a United Kingdom qualified chartered accountant.

B – Panagiotis “Takis” Spiliopoulos
Chief Financial Officer
Nationality and age
Greek, born in 1970

E

G

F

Experience

Panagiotis “Takis” Spiliopoulos has been Chief Financial Officer
since 2019. Before this appointment, he was Head of Research andmember of the Investment Banking management team at leading
Swiss bank Vontobel, where he successfully built the #1 franchisein Swiss equities over the last ten years, as recognized by Thomson
Extel. Over the course of this employment he advised clients on
capital market transactions including the successful execution ofseveral IPOs. He advised institutional clients as key opinion leader
on technology investments. Before that, he led the technology
research practice at the same bank and had the lead on numerous
capital market transactions. Before joining Vontobel in 2001, Takis
was Head of Investments and member of the Executive Management
Board at a venture capital technology company where he was
responsible for due diligence, company valuation, investment
proposals, deal negotiations and setup of deal structure.
Before switching to the investment side in 1999, Takis worked as
management and technology consultant for leading international
players, including, among others, Accenture (formerly Andersen
Consulting, where he started his career in 1995), advising financial
institutions on strategy and information technology matters,
including the implementation of new processes and applications.
Takis holds a Master’s degree in Computer Science and BusinessEconomics from the Swiss Federal Institute of Technology (ETH
Zürich), Switzerland. He also holds an Executive MBA and a degree
in Financial Analysis (CEFA/EFFAS).

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Temenos AG Annual Report and Accounts 2023

C – Prema Varadhan

E – Jayde Tipper

Nationality and age

Nationality and age

Experience

Experience

President Product and Chief Operating Officer
British, born in 1975

As President Product and Chief Operating Officer, Prema Varadhan
is responsible for leading the Product and Technology organizations
to bring the innovation of the Temenos platform to our global
customer base, working directly with customers to identify theirchallenges and matching our product roadmap to market demands.
Prema also leads Temenos’ Global Services and SaaS Engineeringorganizations, driving operational excellence and accelerating
speed of delivery globally. With this combined responsibility, Prema
unifies delivery across Product, SaaS engineering, implementationand global support, which is a pre-requisite for customer successin the SaaS world. Prema also works closely with our clients’C-suite, bringing her leadership and technology expertise tosupport complex sales campaigns from product perspective.
Prema joined Temenos in 1999 and previously held the rolesof Chief Product and Technology Officer and Head of Artificial
Intelligence. In these roles, Prema was responsible for analyzing
emerging technologies and architectural trends and practices fromacross the banking industry and incorporating the findings into
Temenos’ product strategy and development. Prema has been with
Temenos for more than 24 years and is a highly experienced leader
in financial services and technology. She is passionate about putting
customers first and focuses on technology initiatives to improvethe client experience with faster, effortless software delivery.
Prema holds a Bachelor of Engineering, Electronics andCommunications from Anna University, Chennai.

D – Colin Jarrett

Chief Security and Risk Officer
Nationality and age
British, born in 1969

Experience

Dr. Colin Jarrett is Chief Security and Risk Officer. He is responsible
for managing all aspects of our cyber and physical security acrossboth our corporate and SaaS systems. In addition, he is responsible
for risk identification and management across the Company.
Prior to this role, Colin has built extensive leadership experience
across our organization delivering key strategic objectives in theAmericas, as our Chief Operations Officer, Americas, and earlier
as our Chief Client Delivery Officer leading our Global Services
business. Before that, he was responsible for driving the rapid
expansion in the Global SaaS business as our Chief Cloud Officer.
Previous roles include Managing Director of Global Client Services
and Support and, earlier, Global Head of Product Development.
Colin joined Temenos in 2016 from Accenture, where he wasManaging Director. He spent 20 years working in large-scaletechnology delivery projects across the financial services industry
with Accenture and has extensive experience of global delivery.
Colin spent five years working in India, building Accenture’s
Financial Services Delivery Excellence practice. He also spent
five years in the Philippines leading the Company’s Banking andPayments Technology Delivery group.
Colin holds a Ph.D. from Cambridge University where he studied
Condensed Matter Physics and was elected as a bye-fellow of
Magdalene College. He is also a named inventor holding patents
both with Accenture and Philips.

159

Chief People Officer
British, born in 1983

Jayde Tipper is Chief People Officer, responsible for leading the
all-important people-related functions, including Talent Acquisition,
Talent Development, Total Rewards, Diversity, Equity and Inclusion.
Jayde joined Temenos in 2015, initially in HR business partnering,then led Talent Acquisition and executive hiring globally before
moving to own our end-to-end people strategy. Jayde is passionate
about helping to make Temenos a place where all our Temenosians
can feel proud, happy and fulfilled with the work they do.
Jayde holds an MSc in International Human Resource Management
and an MBA from London Business School.

F – William Moroney
President International
Nationality and age
Irish, born in 1975

Experience

William Moroney is President International at Temenos, where heis responsible for the strategy, growth and P&L across Europe, theMiddle East & Africa (MEA) and Asia Pacific. Leading a large team of
Temenos professionals across these diverse regions, he plays a keyrole in ensuring customer success and advancing business growth.
A member of the Executive Committee, William also has
responsibility for Partners, with a focus on generating new revenue
streams through partnerships as well as increasing the Company’spresence in large tier 1 and 2 banks.
William is a seasoned professional, with over 20 years of sales andleadership experience. He joined Temenos in 2020, initially as Regional
Sales Director before becoming Managing Director for MEA a year
later and then President of International in January 2024. Prior toTemenos, William held senior positions at a number of internationalbanking systems, technology and outsourcing businesses.
William holds a Bachelor’s degree in Business Studies from the
University of Limerick, with a major in Accounting and Financeand a minor in Information Technology.

G – Philip Barnett
President Americas
Nationality and age
Irish, born in 1963

Experience

Philip Barnett is President Americas. As part of his role, he drives
the region’s growth and is responsible for strategy and success ofTemenos clients in North and Latin America. He also develops andleverages Partner relationships with technology, business and IT
services companies to generate new revenue streams and market
opportunities in the region.
Philip is also accelerating Temenos’ growth by playing an integralrole in the origination of mergers and acquisitions and the leadershipof Temenos in the Banking as a Service landscape, bringing his
deep knowledge of the banking technology industry and expertiseto these areas.
Philip joined the Company in 2003 and held a number of seniorleadership positions in sales and business development acrossall major territories. He has also developed strong relationships
with major clients and supported the success of their technology
projects. Philip is a senior leader with over 30 years of experience.
Prior to Temenos, he held leadership positions with internationalbanking systems providers.

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CORPORATE GOVERNANCE REPORT

Governing the GroupOur governance framework
General Meeting of Shareholders
Main responsibilities:⚫

approves the annual financial statements;⚫

elects the members of the Board of Directors and of the Compensation Committee;⚫

approves the report on non-financial matters (Sustainability Report);⚫

approves the prospective compensation of the members of the Board of Directors and of the Executive Committee; and⚫

adopts and amends the Articles of Association.

Board of Directors
Main responsibilities:

Chief Executive Officer
Main responsibilities:⚫

chaired by the Chairman whose roleis defined on page 166;⚫

is responsible for managing the
day-to-day business of the Group; and⚫

chairs the Executive Committee.

⚫

approves the strategy of the Group;⚫

appoints and oversees the membersof the Executive Committee; and⚫

approves acquisitions andmajor investments.

Compensation Committee
Main responsibilities:

Audit Committee
Main responsibilities:

recommends to the Board of
Directors compensation
practices and policies that are
equitable, performance based
and in line with market norms;⚫

⚫

reviews the competitiveness ofthe executive compensation
programs;⚫

reviews the internal controls
environment and risk
management framework;⚫

submits to the Board of
Directors proposals for approvalby the Annual General Meetingof Shareholders of the total
prospective compensation of
the Board of Directors and of
the Executive Committee
members; and⚫

oversees ESG reporting;⚫

monitors the performance andeffectiveness of the Internal
Audit function; and⚫

⚫

prepares the Compensation
Report to be submitted to theBoard of Directors for approval
and to the Annual General
Meeting of Shareholders for
consultative vote.

⚫

reviews and challenges, where
necessary, the actions andjudgments of management, in
relation to the financial
statements;

reviews the findings of theexternal audit reports andmonitors their implementation.

Executive Committee
Main responsibilities:⚫

develops the three-year strategicplan of the Group and monitors
performance against it;⚫

submits to the Board of Directors
proposed acquisitions, divestments
and product capex investments; and⚫

deals with any other matters as
assigned by the Board of Directors.

Nomination & ESG
Committee
Main responsibilities:⚫

reviews the structure, size andcomposition of the Board of
Directors;⚫

establishes the qualification
criteria for Board of Directors
membership;⚫

reviews and proposes to theBoard of Directors candidates tobe recommended for election;⚫

considers succession planningfor both Board of Directors andExecutive Committee members;and⚫

considers the strategy andtargets for the sustainability,
climate and CSR strategy (“ESGmatters”), monitors progress
and achievements, oversees
ESG and climate reporting, stays
abreast of trends in ESG
matters and reports accordingly
to the Board of Directors.

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Temenos AG Annual Report and Accounts 2023

Introduction

This report has been prepared in compliance with the Directive
on Information Relating to Corporate Governance (DCG)
available at https://www.ser-ag.com/dam/downloads/
regulation/listing/directives/dcg-en.pdf, its Guidelines available
at https://www.ser-ag.com/dam/downloads/publication/
obligations/guidelines/guideline-dcg-en.pdf and the Swiss
Code of Obligations (CO) available at https://www.fedlex.admin.
ch/eli/cc/27/317_321_377/fr.

161

1. Group structure and shareholders
1.1 Group structure

The ultimate holding company, Temenos AG, is registered in
Geneva, where the Group is also headquartered.
1.1.1 Description of the issuer’s operational group structure
The Temenos Group is organized and managed by the
Chief Executive Officer who heads and is supported by
the Executive Committee.
As of the publication date of this Annual Report, the Executive
Committee is composed of the following members:

In the present Annual Report, the corporate governanceinformation has been summarized in a separate section, andreferences to other parts of the Annual Report have been
included in an effort to avoid duplication.

Andreas Andreades
Chief Executive Officer

In order to enhance readability, the present corporate
governance section follows the suggested structure as
described in the annex of the DCG.
There are some references to the Articles of Association and to
the Organization bylaws of the Company; both documents areavailable at https://www.temenos.com/about-us/investorrelations/corporate-governance/.
Unless otherwise indicated, the information provided in thisreport reflects the situation as of 31 December 2023.
Temenos AG is hereinafter referred to as “the Company”.
Temenos AG and its affiliated companies are hereinafterreferred to as “Temenos Group”, “Temenos” or “the Group”.

Panagiotis “Takis”
Spiliopoulos
Chief Financial Officer

Colin Jarrett
Chief Security and
Risk Officer

Prema VaradhanPresident Product andChief Operating Officer

Jayde Tipper
Chief People Officer

William Moroney
President International

Philip Barnett
President Americas

The executive management of the Group is hereinafter referred
to as “the Executive Committee”.

Governance dashboard
2023 Executive Committee
remuneration mix at grant
Fixed salary

12%

Other compensation

1%

Variable short-term incentives

13%

LTI (SARs and PSUs)

68%

LTI (RSUs)

6%

5

Europe;⚫

Middle East & Africa;⚫

Asia Pacific;⚫

North America; and7⚫

Latin America.

Audit Committee

5Compensation Committee

6Nomination & ESG Committee

4Temenos, being a truly global multi-product company,
leverages skills from around the world, having its principal
software development facilities in Chennai, Bangalore andHyderabad (India). The Group has additional softwaredevelopment facilities in the United States, Canada, the United
Kingdom, Ireland, Switzerland, Denmark, Netherlands, France,
Romania, Belgium, Luxembourg, Australia, Ecuador, Greece,
Poland, Spain, Germany and Singapore.

81%

Meetings held in 2023

6
4

The Group’s product sales and services operations are divided
into the following main geographic regions:⚫

At-risk compensation(performance based) 	
7

The Group is managed using a matrix of regional and global
business functions incorporating activities of sales, service
operations, product development, product management,
services management, marketing, key client relationshipmanagement and product support functions.

Board of Directors

162

Corporate Governance

Temenos AG Annual Report and Accounts 2023

CORPORATE GOVERNANCE REPORT continued

1. Group structure and shareholders continued
1.1 Group structure continued

1.1.2 All listed companies belonging to the issuer’s group, including the company names, their registered offices, where they arelisted, their market capitalization, the percentage of shares held by subsidiaries and the security or ISIN numbers of the securities
Temenos AG is the sole listed company of the Group.
Name

Temenos AG

Domicile

2 Rue de l’Ecole-de-Chimie, 1205 Geneva, Switzerland

Listed at

SIX Swiss ExchangeFirst listing date

26 June 2001

Market capitalization

CHF 5,879,882,190*

Security number

1245391

ISIN number

CH0012453913

Symbol

TEMN

Reuters

TEMN.S

Bloomberg

TEMN SW*	Based on the issued share capital as of 31 December 2023 composed of 75,171,084 shares.

Please refer to the Information for Investors section on page 273 for statistics on Temenos shares.
1.1.3 The non-listed companies belonging to the issuer’s group, including the company names, their registered offices,
their share capital and the percentage of shares held by subsidiaries
Please find below the main non-listed companies belonging to the Group as of 31 December 2023:(All companies are directly or indirectly wholly owned subsidiaries of Temenos AG, unless otherwise indicated. A complete list of
all companies belonging to the Group is available in note 5 to the consolidated financial statements.)
Name

Avoka (Germany) GmbH
Avoka (USA), Inc.
Avoka Europe Limited

DomicileCountry of incorporation

Share capitalFrankfurt am Main

Germany

25,000 EUR

Sacramento

USA

0.10 USD

LondonUnited Kingdom

1,900,199 GBP
43,737,975.23 AUD

Avoka Technologies Pty Limited

SydneyAustralia

Edge IPK Limited

LondonUnited Kingdom

2,764.11 GBPFinancial Objects (UK) Limited

LondonUnited Kingdom

466,666.70 GBP

Igefi France Sàrl

Paris

France7,500 EUR

Igefi Group Sàrl

Bertrange

Luxembourg

31,000 EUR
100 EUR

Igefi Ireland Limited

DublinIreland

Kony, Inc.

Wilmington

USA

1 USD

Kony India Private Limited

HyderabadIndia

33,368,980 INR
6,000,000 INR

Kony Services India LLP

Hyderabad

India

Kony Solutions BV

Amsterdam

Netherlands

18,000 EUR

Kony Solutions Limited

Port-Louis

Mauritius

676,466 USD

Logical Glue Limited

LondonUnited Kingdom

623.63 GBP

Odyssey Financial Technologies Limited

LondonUnited Kingdom

50,000 GBP

Odyssey Financial Technologies SA

La Hulpe

Belgium

62,000 EUR

Odyssey Group SA

Bertrange

Luxembourg

500,000 EUR

Rubik ESOP Trusco Pty Limited

SydneyAustralia

100 AUD

Rubik IP Holdings Pty Limited

SydneyAustralia

100 AUD

Rubik Mortgages Pty Limited

SydneyAustralia

100 AUDSky Technologies Pty Limited

SydneyAustralia

12 AUDSky Technologies Consulting Pty Limited

SydneyAustralia

10 AUDSky Technologies Holdings Pty Limited

SydneyAustralia

1,344,293.80 AUD

Temenos Australia Symmetry Pty Limited

SydneyAustralia

261 AUD

Temenos (Malaysia) Sdn Bhd

Shah Alam

Malaysia

19,591,400 MYR

Temenos (NL) BV

Amsterdam

Netherlands

18,152 EUR

Temenos (Thailand) Co. Limited

BangkokThailand

100,000,000 THB

Temenos Africa (Pty) Limited

SandtonSouth Africa

100 ZAR

Temenos Australia Pty Limited

SydneyAustralia

2 AUD

Corporate Governance

Temenos AG Annual Report and Accounts 2023

Name

Domicile

163

Country of incorporation

Share capital

Temenos Australia Financial Pty Limited

SydneyAustralia

85,977,680.23 AUD

Temenos Australia Operations Pty Limited

SydneyAustralia

7,500,181 AUD

Temenos Australia Services Pty Limited

SydneyAustralia

100 AUD

Temenos Australia Messaging Pty Limited

SydneyAustralia

100 AUD

Temenos Australia Technology Solutions Pty Limited

SydneyAustralia

1 AUD

La Hulpe

Belgium

200,000 EUR

Temenos Belgium SA
Temenos Bulgaria EOOD

Sofia

Bulgaria

10,000 BGNTemenos Canada Inc.

Vancouver

Canada560,586 shares(no par value)

Temenos Cloud Americas LLC

Wilmington

USA

100 units (no par value)

Temenos Cloud Switzerland SA

GenevaSwitzerland

100,000 CHF

Temenos Colombo (Pvt) Limited

Colombo

Sri Lanka

1 share (no par value)

Temenos Costa Rica SA

San Jose

Costa Rica

500,000 CRC

Temenos Denmark ApS

Copenhagen

Denmark

50,000 DKKTemenos Deutschland GmbH

Frankfurt am Main

Germany

25,000 EUR

Temenos East Africa Limited

NairobiKenya

10,000 KES

Quito

Ecuador

672,000 USD

Temenos Ecuador SA

Cairo

Egypt

200 EGP

Temenos Finance Hong Kong Limited

Temenos Egypt LLC

Hong Kong

Hong Kong

4,767,600,001 HKD

Temenos Finance Luxembourg Sàrl

Bertrange

Luxembourg

37,500 EUR

Paris

France500,000 EUR

Temenos France SAS
Temenos Headquarters SA

GenevaSwitzerland

100,000 CHF

Temenos Hellas SA

AthensGreece105,000 EUR

Temenos Hispania SL

MadridSpain

10,000 EUR

Paris

France500,000 EUR

Temenos Holdings France SAS
Temenos Holdings USA, Inc.

Wilmington

USA

1 USD

Temenos Holland BV

Amsterdam

Netherlands

19,000 EUR

Temenos Hong Kong Limited

Hong Kong

Hong Kong

2 HKD

Temenos India Private Limited

ChennaiIndia

2,962,000 INR

Temenos Investments BV

Amsterdam

Netherlands

18,000 EUR

Temenos Israel Limited

Ramat Gan

Israel100 ILS

Tokyo

Japan

10,000,000 JPY
50,000,000 KRW

Temenos Japan KK

Seoul

Republic of Korea

Temenos Luxembourg SA

Temenos Korea Limited

Bertrange

Luxembourg

1,181,250 EUR

Temenos Mexico SA de CV

Mexico City

Mexico234,820,098 MXN

Temenos Middle East Limited

Nicosia

Cyprus17,103.42 EUR

Temenos New Zealand Limited

Auckland

New Zealand

1,000 shares (no par value)

Temenos North Africa LLC

Casablanca

Morocco10,000 MAD

Temenos Philippines, Inc.

Makati City

Philippines

10,000,000 PHP

Temenos Polska Sp. z o. o.

Warsaw

Poland100,000 PLN

Temenos Romania SRL

Bucharest

Romania

120,000 RON

Temenos Singapore Pte Limited

Singapore

Singapore

65,010,000 SGD

Temenos Singapore FT Pte Limited

Singapore

Singapore

1 SGD

Temenos Software Brasil LimitadaSão Paulo

Brazil

150,000 BRL

Temenos Software Luxembourg SA

Bertrange

Luxembourg

500,000 EUR

Temenos Software (Shanghai) Co. Limited

Shanghai

China

140,000 USD

Temenos Solutions Australia Pty Limited

SydneyAustralia

245,057,936 AUD

Temenos Systems Ireland Limited

DublinIreland

4 EUR

Temenos UK Limited

LondonUnited Kingdom

2,198,843.60 GBP

Temenos USA, Inc.

Wilmington

USA

1 USD

Temenos Vietnam Company Limited

Hanoi

Vietnam

890,000,000 VND

Viveo France SAS

ParisFrance500,000 EUR

Viveo Group SAS

ParisFrance500,000 EUR

164

Corporate Governance

Temenos AG Annual Report and Accounts 2023

CORPORATE GOVERNANCE REPORT continued

1. Group structure and shareholders continued
1.2 Significant shareholders

Please find below the list of shareholders who hold 3% or moreof the voting rights as of 31 December 2023 as per informationthat has been published on the reporting and publication
platform of the Disclosure Office of SIX Swiss Exchange
pursuant to Art. 120 ff. of the Financial Market Infrastructure Act.
Significant shareholders

Number of
voting rights

Percentage ofshare capital

Martin and Rosemarie Ebner

9,730,000

12.98%BNP Paribas SA

8,390,247

11.19%

BlackRock Inc.1

4,141,849

5.53%

Baillie Gifford & Co2

3,485,355

4.65%

UBS Fund Management(Switzerland) AG

2,292,935

3.06%

1	Out of this number, 573,903 voting rights are delegated bya third party and can be exercised at one’s own discretion.
2 Out of this number, 3,485,355 voting rights are delegated bya third party and can be exercised at one’s own discretion.

Based on the registered capital as of 31 December 2023
composed of 74,947,402 shares.
For more recent information on major shareholders, pleaserefer to page 273.
Disclosure notifications made in accordance with Article 120 ff.
of the Financial Market Infrastructure Act are publicly available
on the SIX website at https://www.ser-ag.com/en/resources/
notifications-market-participants/significant-shareholders.
html?companyId=TEMENOS#/.

1.3 Cross-shareholdings
Nothing to report.

2. Capital structure
2.1 Capital

On 31 December 2023, the registered ordinary share capitalamounted to CHF 374,737,010 consisting of 74,947,402
registered shares, each with a par value of CHF 5. All theshares are fully paid-up. Each recorded share with voting rights
entitles its holder to one vote.
The Company has a conditional capital totaling CHF 14,512,610
for shares that may be issued on the exercising of shareoptions granted to employees of the Group. Additional
conditional capital totaling CHF 33,039,520 exists for sharesthat may be issued in conjunction with financial instruments.

2.2 Capital band and conditional capitalin particular

Authorized capital
Pursuant to the Articles of Association (Article 3ter), the Boardof Directors was authorized to increase the share capital by
20 May 2023, by an amount not exceeding CHF 35,500,000
by issuing up to 7,100,000 fully paid-in registered shares witha nominal value of CHF 5 each. An increase in partial amounts
is permitted. This clause is no longer in force.
Conditional capital for employee participation
Pursuant to the Articles of Association (Article 3 quater (1)) as
at 31 December 2023, the share capital may be increased by anamount not exceeding CHF 14,512,610 by issuing up to 2,902,522
new registered shares to be fully paid-in with a nominal valueof CHF 5 each through the exercise of the rights that the direct

or indirect subsidiaries of the Company (the “Subsidiaries”)
or the Company itself may grant to officers, Directors andemployees at all levels of the Company and the Subsidiaries.
The pre-emptive rights as well as the right for advancesubscription of existing shareholders are precluded.
The issue of shares or respective option rights through theSubsidiaries or through the Company to officers, Directors andemployees of the Company and the Subsidiaries, is subject toone or more regulations to be issued by the Board of Directors
on the basis of the following general rules: (i) new shares may
only be issued to the Subsidiaries or to the Company for
purposes of distribution to Directors, officers or employees of
the Company and the Subsidiaries; (ii) new shares to be issued
through the Subsidiaries or through the Company to employeesof the Company or the Subsidiaries shall be issued against
paying-in the nominal value of CHF 5 per each share in cash.
Conditional capital for financial instruments
Pursuant to the Articles of Association (Article 3 quater (2)), theshare capital may be increased by an amount not exceeding
CHF 33,039,520, by issuing up to 6,607,904 new registeredshares to be fully paid-in with a nominal value of CHF 5 each,to be divided as follows: first, for the amount of CHF 8,386,120,
that corresponds to 1,677,224 new registered shares, throughexercise of conversion and/or option rights, which are granted
in connection with bonds or similar obligations or otherfinancial instruments of the Company or one of its Group
companies; and second, for the amount of CHF 24,653,400,
that corresponds to 4,930,680 new registered shares, by theexercise of option rights which are granted by the Company or
one of its Group companies to existing shareholders or third
parties. In the case of the issuance of bonds, similar
obligations, or other financial instruments linked withconversion and/or option rights, and in the case of theissuance of option rights, the pre-emptive rights ofshareholders are excluded. The owners of conversion or option
rights from time to time are entitled to the new shares.
The conditions of the option rights, including the exercise
period and exercise price, are to be determined by the Board of
Directors, whereby the exercise price may be fixed at a pricelower than the market or intrinsic value.
The Board of Directors shall be authorized to restrict or
exclude the advance subscription rights of shareholders: (1) if
debt issues in connection with conversion rights or warrants orother financial instruments or options issues are for the
purpose of financing or refinancing the acquisition of anenterprise, parts of an enterprise, or participations or new
investments; or (2) if such debt or other financial instruments
or options are issued on the international capital markets andfor the purpose of a firm underwriting by a banking institution
or a consortium of banks with a subsequent offering to the
public; or (3) if such debt or other financial market instruments
or options are issued for the purpose of the participation ofstrategic partners. In such cases, the following shall apply: theterms and conditions of the convertible bonds or warrants orother financial instruments or options shall correspond tomarket conditions (including dilution protection provisions inaccordance with market practice), taking into account the
specific situation, and the new shares shall be issued pursuant
to the relevant conversion or exercise rights in connection withbond or warrant or options issuance conditions. Conversion
rights may be exercised during a maximum ten (10)-year period
and warrants or options may be exercised during a maximum
seven (7)-year period, in each case from the date of therespective issuance.

Corporate Governance

Temenos AG Annual Report and Accounts 2023

2.3 Changes in capital
31.12.23
CHF 000

31.12.22
CHF 000

31.12.21
CHF 000

Issued ordinary
share capital

375,855

374,679

373,711

Remaining
conditional sharecapital46,43447,61048,578

Authorized sharecapital—35,50035,500As at 31 December 2021, the registered share capitalamounted to CHF 371,031,330 consisting of 74,206,266
registered shares, each with a par value of CHF 5 further to theregistration on 23 February 2021 of 1,448,800 shares that werecreated out of conditional capital during 2020 (for Employee
Share Option Schemes).
As at 31 December 2022, the registered share capitalamounted to CHF 373,711,340 consisting of 74,742,268
registered shares, each with a par value of CHF 5 further to theregistration on 15 February 2022 of 536,002 shares that werecreated out of conditional capital during 2021 (for Employee
Share Option Schemes).
As at 31 December 2023, the registered share capitalamounted to CHF 374,737,010 consisting of 74,947,402
registered shares, each with a par value of CHF 5 further tothe registration on 14 February 2023 of 205,134 shares thatwere created out of conditional capital during the period
from 1 January 2022 to 31 January 2023 (for Employee Share
Option Schemes).
Further to the registration on 14 February 2024 of 223,682
shares that were created out of conditional capital from
1 February 2023 to 31 December 2023 (for Employee Share
Option Schemes), the registered share capital currently
amounts to CHF 375,855,420 consisting of 75,171,084
registered shares, each with a par value of CHF 5.

2.4 Shares and participation certificates

All equity securities of Temenos are in the form of registeredshares, each with a par value of CHF 5. Each share confers theright to one vote at the Annual General Meeting of Shareholders
and all shares are fully entitled to receive dividends. The Articles
of Association do not provide for privileged voting rights shares.
The Company does not issue participation certificates.
In compliance with Temenos policy to distribute a growing
dividend and taking into account the growing maturity of theGroup and the strength of future cash flows, the Company
intends to pay an annual dividend of CHF 1.20 per share on
14 May 2024, subject to shareholders’ approval at the Annual
General Meeting of Shareholders on 7 May 2024. The dividend
record date will be set on 13 May 2024 with the shares trading
ex-dividend on 10 May 2024.

2.5 Dividend-right certificates
Nothing to report.

2.6 Limitations on transferability andnominee registrations

2.6.1 Limitations on transferability for each share category,along with an indication of group clauses in the Articles of
Association, if any, and rules for granting exceptions
Not applicable.
2.6.2 Reasons for granting exceptions in the year under review
Not applicable.

165

2.6.3 Admissibility of nominee registrations, alongwith an indication of percent clauses, if any, andregistration conditions
According to Article 6 of the Articles of Association, every entryof an acquirer of shares is subject to the Board of Directors’
consent. The Board of Directors may refuse its consent if, at its
request, the acquirer does not explicitly declare to acquire andto hold the shares in his own name and for his own account or
if the form filed by the acquirer to request registration contains
untrue information or statements.
2.6.4 Procedure and conditions for cancelling privileges
and limitations on transferability laid down in the Articles
of Association
Not applicable.

2.7 Convertible bonds and options

Regarding options please refer to note 27 of the consolidated
financial statements.
There are no outstanding convertible bonds.
In April 2017, the Company issued a senior unsecured bondwith a nominal value of CHF 150 million and a coupon rate of
1.75% paid annually on 5 April. The bond will mature on 5 April 2024
at a redemption price of 100% of the principal amount.
In November 2019, the Company issued a senior unsecured
bond with a nominal value of CHF 220 million and a coupon
rate of 1.50% paid annually on 28 November. The bond will
mature on 28 November 2025 at a redemption price of 100%of the principal amount.
In October 2023, the Company issued a senior unsecured
bond with a nominal value of CHF 200 million and a coupon
rate of 2.85% paid annually on 11 October. The bond will matureon 11 October 2028 at a redemption price of 100% of theprincipal amount.

3. Board of Directors
3.1 Members of the Board of Directors

As at 31 December 2023, the Board of Directors comprised thefollowing members:Name

Position

Thibault de Tersant

Chairman, Independent
and Non-Executive Director

Ian Cookson

Vice-Chairman, Independent
and Non-Executive Director

Peter Spenser

Independent and Non-Executive Director

Maurizio Carli

Independent and Non-Executive Director

Debbie Forster

Independent and Non-Executive Director

Cecilia Hultén

Independent and Non-Executive Director

Xavier Cauchois

Independent and Non-Executive Director

Dorothee Deuring

Independent and Non-Executive Director

Mr. Andreas Andreades, Ms. Homaira Akbari, Mr. James Benson
and Mr. Erik Hansen did not stand for re-election at the Annual
General Meeting held on 3 May 2023.
Mr. Thibault de Tersant was elected as Non-Executive
Chairman at the Annual General Meeting held on 3 May 2023.
Mr. Xavier Cauchois and Ms. Dorothee Deuring were elected as
new members of the Board of Directors at the Annual General
Meeting held on 3 May 2023.

166

Corporate Governance

Temenos AG Annual Report and Accounts 2023

CORPORATE GOVERNANCE REPORT continued

3. Board of Directors continued
3.1 Members of the Board of Directors continued
Please refer to pages 156 and 157 for the biographies of thecurrent members of the Board of Directors.

None of the Non-Executive members of the Board of Directors
has or has had any senior management position within theGroup, nor any significant business connections with
the Group.
All the members of the Board of Directors have explicitly
confirmed their independence by formally stating they meet
all the independence criteria as listed in section 3.1 of theCompany’s bylaws (https://www.temenos.com/wp-content/
uploads/2023/12/BOD-Bylaws-20230503.pdf).

3.2 Other activities and vested interests

Except those mentioned in the biographies section of thisAnnual Report, no member of the Board of Directors has any:⚫

activities in governing and supervisory bodies of important
Swiss and foreign organizations, institutions and foundations
under private and public law;⚫

permanent management and consultancy functions forimportant Swiss and foreign interest groups; or⚫

official functions and political posts.

3.3 Number of permitted activities

According to Article 29 of the Articles of Association, no
member of the Board of Directors may hold more than four
additional mandates in listed companies and ten additional
mandates in non-listed companies.
The following mandates are not subject to these limitations:a.	mandates in companies which are controlled by theCompany or which control the Company;b.	mandates held at the request of the Company or any
companies controlled by it. No member of the Board of
Directors or of the executive management shall hold morethan ten of such mandates; andc.	“mandates” in associations, charitable organizations,foundations, trusts and employee welfare foundations.
No member of the Board of Directors or executive
management shall hold more than ten of such mandates.
‘mandates’ shall mean mandates in the supreme governing
body of a legal entity which is required to be registered in thecommercial register or a comparable foreign register. Mandates
in different legal entities that are under joint control are
deemed one mandate.
All members of the Board of Directors comply withthese provisions.

3.4 Elections and terms of office
NameFirst elected

Ian Cookson

2012

Thibault de Tersant

2012Peter Spenser

2017

Maurizio Carli

2020

Debbie Forster

2022

Cecilia Hultén

2022

Xavier Cauchois

2023

Dorothee Deuring2023

Additionally for issuers subject to the provisions of thecompany law pursuant to Art. 620-762 CO:
Any rules in the Articles of Association that differ from thestatutory legal provisions with regard to the appointmentof the Chairman, the members of the Compensation
Committee and the independent proxyNot applicable.

3.5 Internal organizational structure

3.5.1 Allocation of tasks within the Board of Directors
The Board of Directors shall elect a Vice-Chairman fromamongst its members and a secretary. It may also appoint one
or more committees from amongst its members.
Chairman
The Chairman is responsible for preparing and convening
the meetings of the Board of Directors as well as for the
implementation of the resolutions of the Board of Directors. In
case of his absence, the Vice-Chairman shall call the meetingsof the Board of Directors. The Chairman monitors the
preparation of the General Meeting of Shareholders.
Vice-Chairman
In case the Chairman is unavailable or absent, the ViceChairman calls meetings of the Board of Directors; also, incase the Chairman is unavailable or absent, the Vice-Chairman
chairs meetings of the Board of Directors.
3.5.2 Members list, tasks and area of responsibility for eachCommittee of the Board of Directors
The Audit, Compensation and Nomination & ESG Committees
are governed by terms of reference defining their duties andcompositions, which are available at https://www.temenos.
com/about-us/investor-relations/corporate-governance/. These
Committees report regularly and make recommendations to
the Board of Directors which is empowered to make decisions.
Name

Audit
Committee

Compensation
Nomination &Committee ESG Committee

Ian Cookson

MemberChair

Thibault de TersantPeter Spenser

MemberChair

Maurizio Carli

MemberMember

Debbie Forster

MemberMemberCecilia Hultén

MemberMemberXavier Cauchois
Dorothee Deuring

Chair
MemberMemberAudit Committee
The Audit Committee is currently composed of four members,
each of whom being independent and holding relevant financial
expertise and understanding of the IFRS accounting standards.
The Audit Committee reviews the Group’s financial reports,
internal controls, oversees ESG reporting, and any othermatters that may be brought to its attention by the internal
and/or the external auditors. The Chair of the Audit Committee
regularly reports to the Board of Directors on the Audit
Committee’s findings and recommendations; the Board of
Directors is responsible for approving the annual financial
statements before submission to the Annual General Meetingfor approval. Please also refer to paragraph 8.4 below.
Compensation Committee
The Compensation Committee shall support the Boardof Directors in reviewing and making recommendations
on compensation practices, guidelines and procedures
and in preparing the proposals to the General Meeting of
Shareholders regarding compensation of the members of theBoard of Directors and of the Executive Committee. It may
submit proposals and recommendations to the Board of
Directors in other compensation-related issues.

Corporate Governance

Temenos AG Annual Report and Accounts 2023

Nomination & ESG Committee
The main duties of the Nomination & ESG Committee are: (i) toannually review the structure, size and composition of the Boardof Directors with a view to establish a Board of Directors that can
provide effective governance and perform all Board of Directors
duties taking into account expertise, experience and skills needed
and work towards achieving a balance in terms of diversity,
including gender and origin, and make recommendations to theBoard of Directors with regard to any changes, (ii) to review andpropose to the Board of Directors candidates for membership on
the Board of Directors to be recommended for election at theAnnual General Meeting, (iii) to give full consideration to
succession planning for both members of the Board of Directors
and Executive Committee and (iv) to consider the strategy andtargets for the ESG matters set by the Chief Executive Officer tomonitor progress and achievements, to oversee ESG and climate
reporting, to stay abreast of trends in ESG matters and to reportaccordingly to the Board of Directors.
3.5.3 Working methods of the Board of Directors and
its Committees
The Board of Directors meets as often as business requires,but at least four times a year. The Audit Committee meets atleast four times a year. The Compensation and Nomination &ESG Committees meet at least three times a year.
In 2023, the following meetings were held:
Numberof meetings

Attendance Average duration

Board of Directors

7

92%

3.6h

Audit Committee

5

100%

3.2h

Compensation
Committee

6

97%

1.3h

Nomination & ESG
Committee

4

100%

1h

Name

Nomination
Audit Compensation& ESG Board ofCommittee
Committee Committee Directors

Ian Cookson

100%

Thibault de Tersant¹

100%

Peter Spenser

100%

100%

100%
100%

83%

100%

Maurizio Carli

100%

100%

100%

Debbie Forster

100%

100%

86%

Cecilia Hultén

100%

100%

Xavier Cauchois²

100%

Dorothee Deuring²

100%

100%

Andreas Andreades³

100%
100%

Homaira Akbari³
James Benson³

100%

86%
100%
100%

100%

50%

100%

50%

Erik Hansen³

100%

100%

1 Member of the Audit Committee until the Annual General Meeting
held on 3 May 2023.
2 Member of the Board of Directors and of one or more Committees
from the Annual General Meeting held on 3 May 2023.
3 Member of the Board of Directors and of one or more Committees
until the Annual General Meeting held on 3 May 2023.

All physical meetings were held in Geneva.
Both the external and internal auditors attended all the Audit
Committee meetings in 2023.

167

At the meetings of the Board of Directors and of its
Committees, those members of the Executive Committee whohave the relevant information and expertise required for therespective body to perform its duties are present. However,these persons do not take part in any resolutions.
At each Board of Directors meeting, a business report ispresented by the Chief Executive Officer. Together with thefinancial report presented by the Chief Financial Officer, thisinformation enables the members of the Board of Directors toassess the course of the Company’s business activities on aregular basis. The President Product and Chief Operating
Officer also attends each Board of Directors meeting.
The Board of Directors conducts an annual evaluation of its
performance. Such process is carried out by way of ananonymous self-evaluation questionnaire on the performanceand effectiveness of the Board of Directors to be completed
by each of its members. The results and comments areconsolidated by the Company Secretary and then discussed
at the next meeting during which proposed improvements areagreed. The 2023 evaluation results were discussed at themeeting held in November 2023.

3.6 Definition of areas of responsibility

The Board of Directors is the ultimate governing body of theCompany. Together with its Committees, it exercises
inalienable and non-transferable functions as provided by law,by the Company’s Articles of Association and by its bylaws.
The Board of Directors decides in particular on significant
acquisitions, disposals, strategic partnerships, changes in theGroup’s structure and share repurchase programs though its
responsibilities are not limited to this. The Board of Directors is
responsible for all aspects of security, risk management andsystem of internal controls.
Based on Article 17 of the Articles of Association and Article 3.6of the bylaws of the Company, the Board of Directors hasdelegated the day-to-day operational management andconduct of business operations of the Company to the Chief
Executive Officer who heads and is supported by the Executive
Committee, except where the law or the Articles of Association
provide differently.
The Executive Committee is responsible for execution ofstrategy and monitoring performance against it. The Executive
Committee also sets targets for Group organic and acquisitions
growth on a three-year basis, i.e. a strategic plan to be thenformally approved by the Board of Directors. Finally, theExecutive Committee approves all product investments as wellas acquisitions to be proposed to the Board of Directors.

3.7 Information and control instrumentsvis‑à‑vis the Executive Committee

The Board of Directors is responsible for the Group’s risk
management, security and system of internal controls.
Overseeing the risk management process, effectiveness andefficiency of operations, accurate reporting, compliance withlaws and regulations and safeguarding the interests of theGroup are some of the main responsibilities of the Boardof Directors.
Prior to each meeting, members of the Board of Directors
receive reports that allow them to discharge their above
duties. The Chief Executive Officer, Chief Financial Officer
and President Product and Chief Operating Officer report ateach meeting of the Board of Directors.

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CORPORATE GOVERNANCE REPORT continued

3. Board of Directors continued
3.7 Information and control instrumentsvis‑à‑vis the Executive Committee continued

The performance management process ensures that theCompany’s targets, as agreed with the Board of Directors,
are delegated to senior management during the first quarterof every financial year.
The Internal Audit function provides an independent assurance
to the Board of Directors and Audit Committee on thecontinuing appropriateness and effectiveness of Temenos’systems of governance, risk management and internal
controls. The Group Head of Internal Audit reports functionallyto the Chair of the Audit Committee.
Findings and related action plans from internal audit reviews
and/or internal control self-assessments are reported to senior
management; summary reports are provided to the Audit
Committee at every meeting. Implementation of action plans
is monitored on a regular basis and status is reported to the
Audit Committee.
Risk management is an integral part of the business process.
Key risks are reviewed by the Audit Committee and then by the
Board of Directors itself at least once a year.
The organizational structure ensures that specialized functions
such as Quality, Security and IT continuously support the
management of risks.

3.8 Gender guidelines

4.2 Other activities and vested interests

Except those mentioned in the biographies section of theAnnual Report, no member of the Executive Committee
has any:⚫

activities in governing and supervisory bodies of important
Swiss and foreign organizations, institutions and foundations
under private and public law;⚫

permanent management and consultancy functions forimportant Swiss and foreign interest groups; or⚫

official functions and political posts.

4.3 Number of permitted activities

According to Article 29 of the Articles of Association, no
member of the executive management may hold more than
one additional mandate in a listed company and five additional
mandates in non-listed companies.
The following mandates are not subject to these limitations:a.	mandates in companies which are controlled by theCompany or which control the Company;b.	mandates held at the request of the Company or any
companies controlled by it. No member of the Board of
Directors or of the executive management shall hold morethan ten of such mandates; andc.	mandates in associations, charitable organizations,foundations, trusts and employee welfare foundations.
No member of the Board of Directors or executive
management shall hold more than ten of such mandates.

Not applicable.

4. Executive Committee
4.1 Members of the Executive Committee

As at 31 December 2023, the Executive Committee comprised
the following members:
Name

Please refer to pages 158 and 159 for the biographies of thecurrent members of the Executive Committee.

Position

Andreas Andreades

Chief Executive Officer

Panagiotis “Takis”
Spiliopoulos

Chief Financial Officer

Prema VaradhanPresident Product andChief Operating Officer

Colin Jarrett

Chief Security and Risk Officer

Jayde Tipper

Chief People Officer

Mr. Max Chuard resigned as Chief Executive Officer effective
12 January 2023.
Mr. Andreas Andreades was appointed, in addition to his role as
Executive Chairman, as a member of the Executive Committee(acting Chief Executive Officer) effective 13 January 2023.
Ms. Prema Varadhan was appointed as President Product andChief Operating Officer effective 16 January 2023.
Mr. Colin Jarrett was appointed as Chief Operating Officer,
Americas effective 16 January 2023.
Mr. Andreas Andreades was appointed as Chief Executive
Officer effective 3 May 2023.
Mr. Colin Jarrett was appointed as Chief Security and Risk
Officer effective 8 May 2023.
Mr. William Moroney was appointed as a member of the
Executive Committee (President International) effective
15 January 2024.
Mr. Philip Barnett was appointed as a member of the Executive
Committee (President Americas) effective 15 January 2024.

“mandates” shall mean mandates in the supreme governing
body of a legal entity which is required to be registered in thecommercial register or a comparable foreign register. Mandates
in different legal entities that are under joint control are
deemed one mandate.
All members of the Executive Committee comply withthese provisions.

4.4 Management contracts
Nothing to report.

4.5 Gender guidelines
Not applicable.

5. Compensation, shareholdings and loans
5.1 Content and method of determining thecompensation and the shareholding programs

The executive management compensation plans seek to alignexecutive management and shareholders’ interests by making
a significant portion of compensation depend on achieving
increased shareholder value for the long term and to enforce
a performance-oriented environment that rewards superiorvalue creation and the achievement of outstanding results.
Compensation of the Non-Executive members of the Boardof Directors comprises fixed compensation only.
The executive members of the Board of Directors and theexecutive management may be paid fixed and variable
compensation. Variable compensation is dependent on theachievement of certain performance criteria.
Temenos applies a policy for share ownership and retention
that is applicable to both the members of the Board of
Directors and of the Executive Committee. Further information
is available in the Compensation Report on page 172.

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Temenos AG Annual Report and Accounts 2023

5.2 Additionally for issuers subject to theprovisions of the company law pursuant to Art.
620-762 CO:

5.2.1 Rules in the Articles of Association on the principles
applicable to performance-related pay and to theallocation of equity securities, conversion rights andoptions, as well as the additional amount for payments
to members of the Executive Committee appointed after
the vote on pay at the General Meeting of Shareholders
According to Article 27 of the Articles of Association,
performance criteria shall be determined by the Boardof Directors or, where delegated to it, the Compensation
Committee and may include criteria relating to individual
performance, performance of the Company or parts thereof
as well as performance in relation to the market or othercompanies, taking into account the position and level of
responsibility of the employee. The Board of Directors or,where delegated to it, the Compensation Committee, shalldetermine the performance criteria impact on variable
compensation, including actual achievement and potential
maximum achievement, the relative weight of the performance
criteria and the respective target levels.
Compensation may be paid or granted in cash, shares or in
the form of other types of benefits. Compensation of executive
members of the Board of Directors or members of theexecutive management may also be granted in the form of
options and similar financial instruments or units. The Boardof Directors or, where delegated to it, the Compensation
Committee, shall determine grant, vesting, blocking, exercise
and forfeiture terms and conditions of these kinds ofcompensation; in particular, it may provide for continuation,
acceleration or removal of vesting and exercise conditions, forpayment or grant of compensation based upon assumed target
achievement, or for forfeiture, in each case in the event of
pre-determined events such as a change-of-control or
termination of an employment or mandate agreement.
The Company may procure the required shares through treasury
shares or upon creation of shares out of conditional capital.
Compensation may be paid by the Company or companies
controlled by it.
According to Article 26 of the Articles of Association, if the
maximum aggregate amount of compensation alreadyapproved by the General Meeting of Shareholders is not
sufficient to also cover compensation of one or more members
who become members of or are being promoted within theexecutive management during a compensation period forwhich the General Meeting of Shareholders has alreadyapproved the compensation, the Company or companies
controlled by it shall be authorized to pay to such member(s)a supplementary amount during the compensation period(s)already approved. The total supplementary amount percompensation period shall not exceed 40% of the aggregate
amount of compensation of the executive management lastapproved by the General Meeting of Shareholders.
5.2.2 Rules in the Articles of Association on loans, credit
facilities and post-employment benefits for members of
the Board of Directors and Executive Committee
Nothing to report.

169

5.2.3 Rules in the Articles of Association on the vote on pay
at the General Meeting of Shareholders
According to Article 25 of the Articles of Association, theGeneral Meeting of Shareholders shall approve annually andseparately the proposals of the Board of Directors in relation
to the maximum aggregate amount of:⚫

compensation of the Board of Directors for the next fiscal
year; and⚫

compensation of the executive management for the next
fiscal year.

The Board of Directors may submit for approval by the General
Meeting of Shareholders proposals in relation to maximum
aggregate amounts of compensation relating to different
periods, in relation to amounts for specific compensation
elements for the same or different periods.
In the event a proposal of the Board of Directors has not been
approved by the General Meeting of Shareholders, the Board of
Directors shall determine, taking into account all relevant
factors, the respective maximum aggregate amount ofcompensation or partial maximum amounts for specificcompensation elements, and submit the amount(s) so
determined for approval by a General Meeting of Shareholders.
Notwithstanding the above provisions, the Company orcompanies controlled by it may pay out compensation prior
to approval by the General Meeting of Shareholders subject tosubsequent approval by a General Meeting of Shareholders.

6. Shareholders’ participation rights
6.1 Voting-rights restrictions and representation
6.1.1 Rules in the Articles of Association on restrictions tovoting rights, along with an indication of group clauses andrules on granting exceptions, as well as exceptions actually
granted during the year under review
According to the Company’s Articles of Association, only
shareholders entered in the share register as shareholders or
as usufructuaries may exercise the voting rights linked to theshares or the other rights connected with these voting rights.
The Articles of Association do not contain any restrictions tovoting rights.
6.1.2 Disclosures on restrictions to voting rights and rules
on granting exceptions for institutional proxies, as well as
exceptions actually granted during the year under review
Not applicable.
6.1.3 Reasons for granting exceptions in the year under review
Nothing to report.
6.1.4 Procedure and conditions for abolishing voting rights
restrictions laid down in the Articles of Association
Nothing to report.
6.1.5 Rules in the Articles of Association on participation in
the General Meeting of Shareholders, if they differ from thestatutory legal provisions
Shareholders registered in the share register with voting rights
on a determined date are entitled to attend the General
Meeting of Shareholders and to exercise their votes. Eachshareholder may be represented at the General Meeting of
Shareholders by any other person who is authorized by awritten proxy, by a legal representative or by the independent
proxy holder.

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CORPORATE GOVERNANCE REPORT continued

6. Shareholders’ participation rights continued
6.1 Voting-rights restrictions and representation
continued

6.1.6 Additionally for issuers subject to the provisions of thecompany law pursuant to Art. 620-762 CO:Information on any rules which might be laid down in the
Articles of Association on the issue of instructions to the
independent proxy and any rules in the Articles of
Association on the electronic participation in the General
Meeting of Shareholders
There are no rules in the Articles of Association about
electronic participation to the General Meeting of Shareholders
or instructions to the independent proxy holder. However,the shareholders may provide electronically their voting
instructions to the independent proxy holder.

6.2 Quorums required by the Articles
of Association

There are no statutory quorums. The General Meeting of
Shareholders shall pass its resolutions and carry out its
elections by a simple majority, unless a qualified majority
is required by law for a specific agenda item.

6.3 Convocation of the General Meetingof Shareholders

The General Meeting of Shareholders is convened bypublication of the invitation and the agenda, at least 20 days
before the date of the meeting, in the Swiss Official Gazetteof Commerce (Schweizerische Handelsamtsblatt, Feuille
Officielle Suisse du Commerce). Shareholders representing atleast 10% of the share capital may convene an Extraordinary
General Meeting of Shareholders.

6.4 Inclusion of items on the agenda

One or more shareholders representing shares of an aggregate
nominal value of at least CHF 1 million may, up to 45 days
before the date of the General Meeting of Shareholders,request an item to be included on the agenda. Such request
must be in writing and shall specify the items and the
proposals of these shareholders.

6.5 Entries in the share register

Pursuant to Article 13 paragraph 1 of the Articles of Association,
shareholders entered in the share register as shareholders withvoting rights on a specific date determined by the Board of
Directors are entitled to attend and vote at the General
Meeting of Shareholders.

7. Changes of control and defense measures
7.1 Duty to make an offer

There is no “opting out” or “opting up” clause in the Articles
of Association.

7.2 Clauses on changes of control

In case of change of control in Temenos, all outstanding
restricted shares units (RSUs), performance shares units (PSUs)
and stock appreciation rights (SARs) will become immediately
vested and exercisable.
RSUs, PSUs and SARs are considered to be outstanding only if
the corresponding/relevant service period has started (wheresuch relevant service period is specified as part of the grant
documentation). If not specified, they will be considered as
outstanding automatically.

7a. Transparency on non-financial matters
Not applicable.

8. Auditors
8.1 Duration of the mandate and term of officeof the lead auditor

8.1.1 Date of assumption of the current audit mandate
PricewaterhouseCoopers SA was re-elected as the statutory
and Group auditors at the Annual General Meeting of
Shareholders held on 3 May 2023 for a period of one year
(first elected in 2003).
8.1.2 Date on which the lead auditor responsible for thecurrent audit mandate took up officeSince 2019 the lead auditor for the Group audit has been Mr. Yazen
Jamjum.

8.2 Auditing fees

Included in general and administrative expenses is an amountof USD 3,297,505 representing audit fees charged to theCompany by PricewaterhouseCoopers for:(i) the audit of the Group consolidated financial statements
and of statutory accounts in various jurisdictions (USD
2,403,506); and(ii) other audit fees related to work that can only be performedby the Group auditors (total of USD 894,000).

8.3 Additional fees

In addition, other fees of USD 413,393 have been incurred byPricewaterhouseCoopers through the provision of tax advisoryand other professional services. Please find below a
breakdown of the additional fees:
Actual 2023

USD 000

Tax compliance

6

Transactions/other audit-related

19

Non-audit fees – audit-related

25

Tax advisory

27

Other advisory28

Non-audit-related fees

55

Total recurring non-audit fees

80

Non-audit assurance engagements

334

Total non-audit fees

413

Total audit fees
Total non-audit fees as a % of total audit fees

3,298
13%

8.4 Information instruments pertaining to theexternal audit

The Audit Committee is responsible for monitoring theperformance of the external auditors, checking its
independence, approving its annual audit plan and fees andreviewing its findings on internal control procedures as well as
ensuring relevant actions are taken by the external auditors tomeet any new applicable regulatory audit standards and otherrequirements. At least once a year, the Audit Committee
members are meeting with the external auditors without thepresence of management. The external auditors formallyreports to the Audit Committee during Audit Committee
meetings and has direct access to its Chair when necessary.
The Chair then reports each Audit Committee meeting to theBoard of Directors. Please also refer to paragraphs 3.5.2 and3.5.3 above.

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Temenos AG Annual Report and Accounts 2023

171

At the beginning of the year, the Audit Committee pre-approves
a budget amount of permitted services that may be performedby the external auditors. Such services are then reviewed on aregular basis at Audit Committee meetings. The Audit
Committee reviews annually the policy on non-audit services,which reflects the updates in the external auditors’
independence guidelines, documents a robust framework forthe scope of non-audit services which the external auditors are
permitted to provide as well as an appropriate approval process
for the level of services provided, including certain types ofpre-approved non-audit services. Prior to committing to a pieceof work beyond a certain limit, authorization must be given by
the Audit Committee Chair on proposal of the CFO.

10. Quiet periods

9. Information policy

For members of the Company’s Board of Directors, membersof executive management, members of Group financeconsolidation, financial planning, analysis group and any otherperson who have access to information related to thequarterly, interim and full-year financial results, the quiet
periods are as follows:

Temenos is committed to open and transparent
communication with its shareholders and wider stakeholders.

UpdatesTemenos publishes an audited Annual Report for the year to
31 December and an unaudited Interim Report for the six months
to 30 June. Temenos also reports figures on a quarterly basis.
All of this information and additional Company-specificinformation is available at https://www.temenos.com/aboutus/investor-relations/.
Those interested to receive financial news, information onclient signings and all press releases issued in accordance withthe ad hoc publicity rules can sign up for press releases on the
Temenos website by clicking on the Subscribe button athttps://www.temenos.com/about-us/investor-relations/investor-news/; moreover, all ad hoc press releases areavailable at https://www.temenos.com/
news/?page=1&category=ad-hoc-announcements.
Dates of the publication of quarterly results, Annual andInterim Reports, General Meeting of Shareholders andTemenos conferences are published on the Company’s website
and updated regularly at https://www.temenos.com/about-us/
investor-relations/#financial-calendar.

Contacting Temenos

For any investor relations enquiries please contact theCompany at TemenosIR@temenos.com and for management
dealings enquiries/disclosures of shareholdings notifications
contact companysecretarial@temenos.com.
The Company’s headquarters are located at:
Esplanade de Pont-Rouge 9C
1212 Grand-Lancy
Switzerland
Tel: +41 22 708 11 50
Contact details of our offices worldwide are available athttps://www.temenos.com/contact-us/.

Meeting Temenos

On 7 May 2024, Temenos will hold its Annual General Meeting.
The General Meeting of Shareholders is convened bypublication of the invitation and the agenda, at least 20 days
before the date of the meeting, in the Swiss Official Gazette ofCommerce (Schweizerische Handelsamtsblatt, Feuille
Officielle Suisse du Commerce).
Meetings between Directors, institutional shareholders andother market professionals are held regularly as a part ofTemenos’ investor relations program. Furthermore, all
Directors are available to meet shareholders if requested.

According to the Temenos Insider Information Policy and in
addition to the general prohibition of insider trading (i.e. ad hoc
blackout periods related to special projects), no purchase orsale of Temenos AG securities shall be made during thefollowing quiet periods irrespective of holding or not any
insider information:⚫

⚫

during the period beginning the first day of the monthfollowing the end of the quarter (i.e. 1 January inclusive,
1 April inclusive, 1 July inclusive, 1 October inclusive) andending on the day of public announcement of the related
quarterly financial results, once published.

during the period beginning 15 days prior to the end of thequarter (i.e. 17 March inclusive, 16 June inclusive, 16 September
inclusive and 17 December inclusive) and ending on the dayof public announcement of the related quarterly financial
results, once published.

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Temenos AG Annual Report and Accounts 2023

COMPENSATION REPORT

Dear Shareholders,
Our compensation policy is critical to attracting and retaining thebest industry talent and rewarding them based on the Company’s
performance and shareholder returns. Our compensation
programs create a strong link between pay and performance,with the success of management aligned with outcomes thatcreate value for our long-term shareholders. Specifically, over
80% of target compensation for the members of the Executive
Committee is variable, based on the achievement of rigorous
financial goals and share price performance.
2023 was a very successful year for Temenos, with Annual
Recurring Revenue (ARR) growth of 17% and revenues reaching
USD 1 billion for the first time. Temenos saw further markets
adopting more and more Software-as-a-Service (SaaS)
products as SaaS becomes more mainstream in the banking
sector. The rise of cloud continues to benefit the subscription
business also, as banks, especially tier 1 and 2, but also others,
start to implement cloud-native solutions that they run
themselves on public or private cloud.

Shareholder engagement

Ongoing shareholder dialogue is a key priority of theCompensation Committee, as it provides Temenos withvaluable insights. Engagement has been ongoing throughout
the year. The Chairman of the Board of Directors has spent ameaningful part of his time discussing Temenos strategy andsuccession with shareholders this year. In early 2024,
shareholders were encouraged to discuss their views oncompensation with the Chair of the Compensation Committee.
The discussions focused on the Temenos peer group, how the
KPIs are used to promote growth of the SaaS business in theform of ARR and addressing the compensation strategy for2025. See further details in section A.4.

Pay for performance and at-risk
compensation explained

The Long-Term Incentive (LTI) plans for Executives, granted in
2021, vested in February 2024 at 76.7%, impacted largely by theperformance in 2022 where growth was slower and cash wasaffected by the move to subscription. The grant price for the2021 plan was USD 143.54; as a result this is the fourth year
the LTI is vesting out of the money.
With the mix of instruments implemented in 2023, i.e. 35% SARs,
35% PSUs and 30% RSUs, we believe we now have the right toolsthat address our drive for growth. The SAR plan encourages thismost, RSUs which spread the vesting over year 2 and 3 address
retention, and the PSU’s driving performance. For the LTI plans todeliver returns to the Executives, they must deliver not only on
the operating metrics, but also drive improvement in the shareprice. KPI targets are set at challenging levels of long-term
performance, creating a strong link between pay and performance.

At Temenos, our people play a crucial role in many economies
around the world by providing mission-critical enterprisesoftware to banks in more than 150 countries. As a global
specialist, vertically focused company, Temenos competes
internationally for talent in the highly competitive software
sector with horizontal software companies that are muchlarger in size. Temenos software is regularly used by the world’s
largest banks to run significant parts of their businesses.
The mix of instruments, 35% Stock Appreciation Rights (SARs),
35% Performance Stock Units (PSUs) and 30% Restricted
Stock Units (RSUs), making up the LTI plan ensures we arecompetitive in the market for recruitment, guarantees a greaterlevel of certainty in the form of PSUs and RSUs but leaves
room for greater incentives through use of SARs. The planaligns strongly to shareholder value whilst encouraging
some level of ongoing entrepreneurialism as we navigate theever-changing regulatory environment of Financial Services.

Corporate Governance

Temenos AG Annual Report and Accounts 2023

Section C provides historical data on returns from the LTI
plans showing there is a strong link between the LTI returns,
share price growth and Earnings Per Share (EPS) growth. The
Company delivered exceptional performance and very strong
shareholder returns for over six years through to 2018, 2019
being slightly lower. In 2020, due to the pandemic and theimpact that it had on the Company’s customers and banks
around the world, the performance of the Company wasaffected. The lower than target performance in 2020 impacted
all LTI plans that included 2020 performance (i.e. grants madein 2018, 2019 and 2020). The 2018 LTI plan vested in February
2021 at 87% of target, the 2019 LTI plan vested in February
2022 at 60%, the 2020 LTI plan vested in February 2023 at
46.67%, and now the 2021 LTI plan vested in February 2024
at 76.7%, all with value of zero on the vesting date.

Dilution

The cost of the LTI program in the profit and loss account is thefair value at grant and is disclosed under IFRS rules. Temenos
SAR programs of 2020, 2021 and 2022 are out of the money, soeven though the non-cash charge included in the profit and loss
account is high, the expected dilution, which is the true cost to
the business, is minimal. The target set by the Compensation
Committee is for the cumulative average growth in dilution fromall stock-based compensation to remain at less than 2% perannum. The CAGR growth for the last three years is 0.5%. Froma balance sheet perspective, based on closing share price on
31 December 2023, potential dilution from all outstanding equity
awards equals 1.8% of total shares outstanding. The dilutive
impact of our LTI programs may increase if the programs thatare still active are earned at above-target levels and if the shareprice grows, but it cannot exceed 6.7%. This topic is discussed in
more detail in section B.7.

173

OutlookTemenos’ pay for performance philosophy remains a core
operating principle. The Compensation Committee believes
that our compensation structure should support the Company’s
long-term business objectives and human capital strategies.
In conclusion, our compensation program reflects a worldclass company that is a leader in the global banking software
market, which targets to deliver superior returns to its
shareholders, customers and other stakeholders. In order toachieve this, the program is designed to build and retain aworld-class management team and align their interests withthose of our shareholders and drive strong short-term andlong-term operating results. The Compensation Committee
remains committed more than ever to our dialogue withshareholders and we welcome regular feedback on ourcompensation policies.
Finally, after a long and thorough selection process, we are
hopeful to be able to introduce our new CEO to you at our
upcoming AGM on 7 May. I would like to thank Andreas Andreades,
for stepping in and extending his time at Temenos as CEO toenable this transition and more importantly for the enormous
contribution he has made in his 25 years with Temenos.
Temenos is a first class company with an exciting future aheaddelivering value and innovation to our clients and achieving our
mid-term objectives, leveraging the strong Temenos teams
and culture.
On behalf of the Compensation Committee, I wish to thank you
for your trust, support and valuable feedback. We look forward
to receiving your support at the AGM.

Thibault de Tersant
Non-Executive Chairman

Dr. Peter Spenser
Chair of the Compensation
Committee

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Temenos AG Annual Report and Accounts 2023

COMPENSATION REPORT continued

Contents

A. Compensation policy and principles

A. Compensation policy and principles

A.1. Compensation objectives

A.1. Compensation objectives
A.2. Organization and competencies
A.3. External mandates – audited
A.4. The role of the Compensation Committee

This Compensation Report has been prepared in accordancewith Art. 732 et seqq. Of the Swiss Code of Obligations (CO)related to the remuneration in listed companies, the SIX
Exchange regulations, the Swiss Code of Best Practiceand the Articles of Association of Temenos.

B.1. Summary of compensation elements for employees

The report describes the compensation system, the criteriathat apply to the compensation of Temenos’ Executive
Committee and the Board of Directors; and discloses theamount of compensation paid in 2023. It also details changes
to the compensation system for 2024.

B.2.	Compensation elements for the Executive Chairman
and Executive Committee members

Temenos’ executive compensation programs are designed withtwo main goals in mind:

A.5. Votes on compensation
B.

Compensation components

B.3. S ummary of key organization and compensation
changes in 2023
B.4. Variable short-term incentive
B.5. Long-term equity incentive
B.6. Share ownership⚫

fostering a performance-based corporate culture through avariable pay for performance compensation structure; and⚫

making the largest portion of executive compensation
dependent on delivering shareholder returns through theachievement of rigorous long-term performance goals andshare price appreciation.

B.7. Dilution and capital requirements

Executive compensation consists of three primary components:

B.8. Contract terms for the Executive Committee members(i) fixed cash compensation and benefits;

B.9. Compensation elements for Non-Executive Directors(ii)	variable cash linked to short-term performance targets(i.e. current financial year); andC.

Pay for performance appraisal

D.

Compensation for financial year under review – audited

D.1. Board of Directors
D.2. Executive Committee
D.3. Highest paid member of the Executive Committee
D.4. Compensation in CHF
D.5. Loans granted to members of governing bodies
E.	The year ahead: compensation of the Board of Directors
and Executive Committee for fiscal year 2024
E.1.	Changes that affect 2024 Board of
Directors compensation
E.2. C hanges that affect 2024 Executive
Committee compensation
E.3. 2024 Variable short-term incentive for Executives
E.4. 2
 024 Long-Term Incentive/Equity Plan awards
for Executives
F.

Other information – audited

F.1. Shareholdings and equity incentives
F.2. Equity instruments outstanding(iii)	equity-based variable compensation that is linked tolong-term performance targets.
Compensation of the Non-Executive members of the Board of
Directors comprises fixed compensation only.
Performance criteria are set by the Board of Directors and may
include criteria relating to the performance of the Company orparts thereof, performance in relation to the market or othercompanies, as well as individual performance. The Board of
Directors determines the extent to which the performance
criteria impact variable compensation, including maximum
pay opportunities, and the relative weight of the performance
criteria. The Board of Directors also oversees the conditions
linked to the grant, vesting, exercise and forfeiture of equitybased incentive programs.

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175

A.2. Organization and competencies

The Executive Chairman (until 3 May 2023) and the Executive Committee members are hereinafter referred to as the “Executives”.
The Executives who served in the 2023 financial year are:Board of Directors:⚫

Andreas Andreades, Executive Chairman until 3 May 2023. Mr. Andreades’ compensation for 2023 is fully reported in the
Executive Committee compensation and not in the Board of Directors since he was acting CEO effective from 13 January 2023.

Executive Committee:⚫

Andreas Andreades, acting Chief Executive Officer (acting CEO) from 13 January 2023 until 3 May 2023 and Chief Executive
Officer (CEO) from 3 May 2023;⚫

Panagiotis “Takis” Spiliopoulos, Chief Financial Officer (CFO);⚫

Prema Varadhan, Chief Product and Technology Officer (CPTO) until 15 January 2023 and thereafter President Product and Chief
Operating Officer (PPCOO);⚫

Colin Jarrett, Chief Client Delivery Officer (CCDO) until 15 January 2023, Chief Operating Officer, Americas (COO Americas) until
7 May 2023 and thereafter Chief Security and Risk Officer (CSRO);⚫

Jayde Tipper, Chief People Officer (CPO); and⚫

Max Chuard, Chief Executive Officer (CEO) until 12 January 2023.

Executive Committee gender ratio as at 31 December 2023
Male

60%

Female40%

The Non-Executive Directors who served in the 2023 financial year are:⚫

Thibault de Tersant, Vice-Chairman until 3 May 2023 and Chairman from 3 May 2023;⚫

Ian Cookson, Vice-Chairman from 3 May 2023;⚫

Maurizio Carli;⚫

Peter Spenser;⚫

Deborah Forster;⚫

Cecilia Hultén;⚫

Xavier Cauchois, from 3 May 2023;⚫

Dorothee Deuring, from 3 May 2023;⚫

Homaira Akbari, until 3 May 2023;⚫

James Benson, until 3 May 2023; and⚫

Erik Hansen, until 3 May 2023.

Board of Directors gender ratio as at 31 December 2023
Male

62%

Female38%

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COMPENSATION REPORT continued

A. Compensation policy and principles continued
A.3. External mandates – auditedThis section (section A.3.) has been audited by Temenos’ auditors, PricewaterhouseCoopers SA.
As of 31 December 2023, the members of the Executive and Board of Directors held the following comparable positions inother organizations:Executives
MemberCompany

Position

Andreas Andreades––

Panagiotis “Takis” Spiliopoulos

Blueberg Management AG (Switzerland)Blueberg Assets AG (Switzerland)Member of the Board of Directors
Member of the Board of Directors

Jayde Tipper

Sixty Learn Ltd (UK)

Member of the Board of Directors

Prema Varadhan––Colin Jarrett––

MemberCompany

Position

Thibault de Tersant

Numeum (France)

Member of the Board of Directors andExecutive Committee
Member of the Board of Directors

Board of Directors

Semaines Sociales de France, non-profit
association (France)
La Fondation Dassault Systèmes (France)

Chairman of the Board of Directors and
Deputy Chief Executive Officer

Ian Cookson––Peter Spenser––

Maurizio Carli

Telecom Italia (Italia)

Member of the Board of Directors

Board International (Switzerland)Member of the Board of Directors

Tech Talent Charter (UK)

Chief Executive Officer

The Lending Standards Board (UK)

Member of the Board of Directors

Konsolidator (Denmark)Member of the Board of Directors

Kompasbank (Denmark)Member of the Board of Directors

Cbio A/S (Denmark)Chief Financial Officer

Debbie Forster
Cecilia Hultén

CIP Executive Search AB (Denmark)Member of the Board of Directors

Xavier Cauchois

Dassault Systèmes (France)

Member of the Board of Directors and Chairof Audit Committee

Dorothee Deuring

Elementis plc (UK)

Member of the Board of Directors

PolyPeptide AG (Switzerland)Member of the Board of Directors

A.4. The role of the Compensation Committee

The Compensation Committee is authorized by the Board of Directors:⚫

to approve compensation practices, policies and procedures that relate to the Executive Committee and other employeesof the Company;⚫

to review and recommend to the Board of Directors the applicable performance targets and the compensation levels;⚫

to review the competitiveness of the Company’s executive compensation programs;⚫

to ensure the attraction and retention of members of the Executive Committee to achieve the Company’s business objectives;⚫

to align the interests of key management to the long-term interests of the Company;⚫

to review and approve recommendations from the CEO on compensation packages for members of the Executive Committee; and⚫

to make recommendations to the Board of Directors on total compensation for Executive Directors and members of the
Executive Committee.

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177

To fulfill its duties, the Compensation Committee typically aims to meet four to five times during the year. The compensation
structure and benchmarking are reviewed annually. Other topics such as peer group and share ownership programs are reviewed
as required. The table below shows the meetings held in financial year 2023:
Month

No. of meetings

Topics discussed

January

2

Executive reorganization.
Approval of LTI grant for Executives and employees.

February

1

Approval of previous fiscal year performance achievements and payouts.
Approval of the current fiscal year performance targets for variable short-term incentives.
Approval of the long-term variable compensation grant performance targets.

July

1

Review of the Compensation Committee terms of reference.
Review of the executive compensation structure.
Review of the Swiss regulations on compensation.

October

1

Review of the comparator group.
Review of the Executives and Non-Executives benchmark.

November1

Review of expected outcome for 2023 Short-Term Incentive (STI) and 2021-2023 LTI plans.
Review of compensation practices and policies for the forthcoming financial years.

The agenda and conclusions of each Committee meeting are shared with the full Board of Directors.
The Compensation Committee comprised five Independent and Non-Executive Directors:⚫

Peter Spenser, Chair from 3 May 2023;⚫

Maurizio Carli;⚫

Deborah Forster;⚫

Cecilia Hultén, from 3 May 2023;⚫

Dorothee Deuring, from 3 May 2023;⚫

Homaira Akbari, Chair until 3 May 2023; and⚫

James Benson, until 3 May 2023.

The Compensation Committee members are elected annually by shareholders. Other members of the Board of Directors have theright to attend the relevant meetings and members of the Executive Committee attend upon request. The Chief People Officer
attended four of the meetings (out of the six held in 2023) including where her own compensation was discussed. No othermembers of the Executive Committee attended any of the Compensation Committee meetings held in 2023. Attendees that are
not Compensation Committee members do not have voting rights.

Approval process

The recommendation of compensation packages for Board of Directors and Executive Committee members is governed as follows:
Compensation of

Recommended byEndorsed byApproved by

Members of the Board of Directors
including its Chairman

Compensation
Committee

Board of Directors

Shareholders at AGM

Members of the Executive Committee

Compensation
Committee

Board of Directors

Shareholders at AGM

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COMPENSATION REPORT continued

A. Compensation policy and principles continued
A.4. The role of the Compensation Committee continued
Benchmarking process and external consultants

To ensure executive compensation is set competitively to attract and retain talented professionals over the long term, theCompensation Committee reviews benchmark data collated from a range of organizations in the technology sector every year.
Benchmarks are performed on total compensation and on compensation structure, such as proportion of variable compensation,
proportion of performance-linked compensation, performance metrics and thresholds for variable compensation. For Non-Executive
Directors, the Company reviews benchmarks with the SMIM and with the peer group used for executive compensation described below.
In 2023, the Compensation Committee continued its engagement with FW Cook as its independent compensation consultant toassist with the benchmarking process. FW Cook attended all Compensation Committee meetings. FW Cook holds no othermandates with Temenos and no other external advisors were consulted.
No change was made to the comparator group in 2023. The same selection criteria remain:⚫

focus on software/SaaS companies, with a business-to-business focus, prioritizing those working with or within the financial
services sector;⚫

other software companies that have similar operating characteristics to Temenos in terms of global reach, target markets,competitive dynamics, growth and complexity;⚫

they are of similar size, measured by market capitalization of between 0.33 and 3.0 x of Temenos. Revenue is tracked within aslightly larger range (up to approximately 5.0x). FIS and Fiserv are exceptions to the rule, given that they are direct competitors ofTemenos; and⚫

a combination of European-headquartered and US-headquartered companies.

The peer group of 16 companies reflects key competitors for business and senior executive talent:
Organization

Country

Organization

Country

ACI Worldwide

USA

Q2 Holdings

Broadridge Financial Solutions

USA

Simcorp2

Denmark

Fidelity National Information Services (FIS)1

USA

Software AG

Germany

Fiserv 1

USA

SS&C

USA

Guidewire Software, Inc.

USA

Suse2

Luxembourg

Jack Henry and Associates

USA

Teamviewer

Logitech International
NCINO, INC.

Switzerland
USA

USA

Germany

The Sage GroupWorldline

UK
France1 FIS and Fiserv remain outliers from a size perspective but are retained as they are key business competitors.
2 Since the benchmark exercise was completed, Simcorp was acquired and Suse was delisted. They will be replaced in 2024.

Shareholder engagement and outlook for fiscal years 2023 and 2024

Ongoing shareholder dialogue is a key priority of our management and the Board of Directors and therefore we routinely engage
with shareholders to discuss business, performance, compensation and governance matters.
The Company moved to a continuous dialogue with shareholders throughout the year. Additionally, in early 2024, the Company
invited its major shareholders, representing approximately 60% of outstanding shares to a meeting with the Chair of theCompensation Committee with active follow-up thereafter. The Chair of the Compensation Committee engaged in multiple
meetings with shareholders and proxy advisors. The major topics discussed were the current design of Temenos’ incentive
compensation programs, Temenos’ peer group, performance metrics and goal setting for both STI and LTI plans, and a
proposed increase for the Board of Directors retainer fee.

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179

A.5. Votes on compensation

As set out in the Articles of Association, the General Meeting of Shareholders shall approve annually and separately the proposalsof the Board of Directors in relation to the maximum aggregate amount of:⚫

compensation of the Board of Directors for the next fiscal year; and⚫

compensation of the Executive Committee for the next fiscal year.

The Articles of Association can be found on the Temenos website under Corporate Documents:
https://www.temenos.com/about-us/investor-relations/corporate-governance/.
Section V and VI, Articles 25 to 28, relate to compensation.
The compensation that will be approved at the AGM covers the elements below with the respective timing:
2024

2025

2026

2027

STI cash payment

STI
share vesting (ifelected to receive
partially in shares)

2028

2028–2035

SalarySTI performance
period
AGM vote

50% of RSUs
service period

50% of RSUs
vesting

50% of RSUs/100% of PSUs
Service/performance period

50% of RSUs/100% of
PSUs vesting

SARs performance period

SARs vesting

SARs exercise period

The Board of Directors may submit for approval by the General Meeting of Shareholders proposals in relation to maximum
aggregate amounts of compensation relating to different periods, or in relation to amounts for specific compensation elements forthe same or different periods.
In the event a proposal of the Board of Directors has not been approved by the General Meeting of Shareholders, the Board of
Directors shall determine, taking into account all relevant factors, the respective maximum aggregate amount of compensation or
partial maximum amounts for specific compensation elements and submit the amount(s) so determined for approval by a newly
scheduled General Meeting of Shareholders. The Company may pay out compensation prior to approval by the General Meeting of
Shareholders subject to subsequent approval by the General Meeting of Shareholders.
As stated in the Articles of Association, if the maximum aggregate amount of compensation already approved by the General
Meeting of Shareholders is not sufficient to also cover compensation of one or more members who become members of the
Executive Committee during a compensation period for which the General Meeting of Shareholders has already approved thecompensation, the Company is authorized to pay the member or members a supplementary amount during the compensation
period already approved. The total supplementary amount per compensation period shall not exceed 40% of the aggregate
amount of compensation of the Executive Committee last approved for the corresponding compensation period by the General
Meeting of Shareholders, i.e. for the compensation of the financial year 2023 the supplementary amount that may be utilized
would be 40% of the amount approved by shareholders for 2023 at the AGM 2022.

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Temenos AG Annual Report and Accounts 2023

COMPENSATION REPORT continued

B. Compensation components
B.1. Summary of compensation elements for employees

The table below explains the compensation elements for the fiscal year 2023:
Fixed salary and benefits

Variable short-term incentive(bonus or commission)

Eligibility

All employees

All employees

Executive Chairman, Executive
Committee members andsenior managers

Basis for funding

Continuity of service, role andexperience

Role and experience plus
achievement of fiscal year
operating metrics targets

Continuity of service overthree years plus achievementof three fiscal year operating
metric targets

PayoutMonthly or bi-weekly
depending on jurisdiction

After performance for the
On Board of Directors’ approval
financial year has been audited of the results for the final yearof the LTI plan

Variable long-term equity incentive

Payout subject Forfeiture rules No
to
KPIs
No

Yes
Yes

Yes

Performance range for
Executive Chairman, Executive
Committee members andsenior managers

90%1 target threshold at which
50% is paid (80% forregional results)

Up to 33% of target LTIs canbe funded in each of the three
years covered if all annual
targets are achieved at 100%

Settlement
Malus and clawback clauses

2

None

Linear payout between 90%
and 100% and 2 to 1 ratio
performance above 100%: 125%of target performance isrequired for maximum 150% of
target payout

Yes

Up to 175% of target LTIs canbe earned if cumulative
three-year performance is
at 137.5% of target for all
measures, with 50% of target
LTIs funding if cumulative
three-year performance isbelow 85%1 of target

Cash

Cash and deferred shares

SharesNot applicable

Yes

Yes

1 Exceptional threshold of 80% for CEO at which he receives zero payout. See section D.3 for further details on CEO compensation.
2	Malus and clawback clauses for both STI and LTI withhold or recover funds for any cases where fraudulent behavior results in numbers being
restated for external reporting purposes.

B.2. Compensation elements for the Executive Chairman and Executive Committee members
The elements of the above table, together with their objectives, are as follows:

Fixed salary⚫

To compensate Executives for their expected day-to-day responsibilities, leadership and contribution to the business.

Benefits⚫

To provide a level of security in health and retirement and, should it be required, in disability and death.

Variable short-term incentive⚫

To make a significant portion of Executive overall annual compensation variable and dependent on delivery of the Company’s annual
key targets, which for 2023 included non-IFRS Product Revenues, ARR, Net Operating Cash Flow, and non-IFRS Operating Profit.

⚫

The Executives are given the choice to receive the bonus 100% in cash or to receive 50% in cash and 50% in deferred shares. The
share element is eligible for a 20% premium in return for a vesting period until 1 March 2025 for the STI for 2023. The President
Product and Chief Operating Officer elected to receive 50% in cash and 50% in shares. The other Executives elected to receive
100% in cash.

Variable long-term equity incentive⚫

To emphasize long-term performance, with earnout that is variable and linked directly to achievement of key long-term financial
performance results, with value delivery also contingent on share price appreciation to support alignment with shareholders.

⚫

To retain Executives for the long term.

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181

B.3. Summary of key organization and compensation changes in 2023
Executive Committee members changed roles early 2023:⚫

Andreas Andreades was appointed, in addition to his role as Executive Chairman, as a member of the Executive Committee(acting Chief Executive Officer) (acting CEO) effective 13 January 2023. On 3 May 2023, Andreas Andreades did not stand for
re-election at the Annual General Meeting and was appointed as Chief Executive Officer (CEO).

⚫

Max Chuard resigned from his position as CEO effective 12 January 2023.

⚫

Prema Varadhan, who was Chief Product and Technology Officer (CPTO) until 15 January 2023 was appointed President Productand Chief Operating Officer (PPCOO) on 16 January 2023.

⚫

Colin Jarrett, who was Chief Client Delivery Officer (CCDO) until 15 January 2023 and then Chief Operating Officer Americas(COO Americas) until 7 May 2023 was appointed Chief Security and Risk Officer (CSRO) on 8 May 2023.

Points to note for 2023 compensation with respect to vesting of instruments during 2023:⚫

The 2021 SAR plan vested in February 2024 with a final payout of 76.7%. The grant price for the 2021 grant was set at USD 143.54
and the closing price on vesting date (19 February 2024) was USD 74.9. As a result, the portion of the SARs earned were out of
the money as of the vesting date. However, the Executives have seven years from February 2024 to exercise their earned SARs
and realize value when the share price increases above USD 143.54. The standard rule as per the SAR plan is that if participants
leave Temenos they must exercise within 60 days of termination date.

⚫

The CEO PSU 2023 plan vested on 31 December 2023 at 103.4%.

B.4. Variable short-term incentive
Performance criteria

Annual targets for Executives are set by the Board of Directors based on recommendations by the Compensation Committee.
The 2023 short-term incentive plan for the Executives rewards on-target performance at 100% of fixed salary. The KPI weighting,global targets and respective achievements for the Executives in 2023 are set out in the table below. All targets were exceeded forthis financial year:
2023 target 1

Percentage
of bonus

TargetUSD

ActualUSD

Threshold%Achievement%

To be paid%

104.2%

ARR

30%

715m

730m

90%

102.1%

Non-IFRS Product Revenues

30%

862.8m867.3m90%

100.5%

101.0%

Non-IFRS Operating Profit

20%

307.5m313m

90%

101.8%

103.6%Net Operating Cash Flow

20%

351.3m391.5m90%

111.4%

122.9%

Total

106.9%

1	Due to the exceptional circumstances in January 2023, the CEO, Andreas Andreades, was given a special STI plan resulting in payout of 103.4%;
see section D.3 for further details.

B.5. Long-term equity incentive

The instruments used in 2023 for the long-term incentive scheme consisted of a mix of SARs, PSUs and RSUs.
The Executive Committee members have a mix of 35% SARs, 35% PSUs, and 30% RSUs as discussed in the shareholder
engagement meetings in early 2022. Management with a grant of over USD 250,000 was given a mix of 50% PSUs and 50% RSUs.
All other members of the senior management were given solely RSUs. The Company grants SARs and PSUs to Executives andsenior managers with performance and vesting criteria. The Board of Directors believes the performance-based LTI plan aligns
strongly with the interests of long-term shareholders, as they are required to achieve rigorous operating metrics (defined below),
and for SARs, additionally there must be growth in the share price for these to generate any value to the recipient. In this way, theCompany incentivizes the management team to deliver strong revenue growth and profitability over the long term. The RSU whichvests in two and three years is a retention tool and is a simpler instrument for the wider group of participants. Additionally, alimited number of RSUs were issued on joining to compensate them for financial disadvantage as a result of leaving their previous
employer and retention (other senior management).
Grant conditions are linked to the achievement of annual and three-year cumulative targets, with SARs and PSUs vesting on thethird-year anniversary of the grant.
Due to the exceptional circumstances in January 2023, the CEO was given a special LTI plan; see section D.3 for further details.
The CFO elected, similar to 2022, to receive his LTI fully in SARs in 2023. In 2024, he is aligned with the other Executives.
SARs are valued on a fair value basis by an independent organization, Algofin AG, using the Enhanced American Model, asophisticated binomial model, to comply with IFRS 2. Algofin AG is a consulting company domiciled in St. Gallen, Switzerland,
specializing in Quantitative Finance, Modern Financial Instruments and Consulting in Asset Management. To ensure pricing integrity,
long-term equity awards are not issued at a discount to market price; they are priced at the closing market price on the grant date.
The fair value at time of grant is expensed over the vesting period based on the latest probable outcome of the final number ofSARs to be granted. PSUs and SARs are valued by deducting the net present value of expected dividend payments over thevesting period.

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COMPENSATION REPORT continued

B. Compensation components continued
B.5. Long-term equity incentive continued

Temenos’ LTI program is stock settled. For SARs, employees are given the shares at the time of exercise, the number of shares
given being calculated as the appreciation of the share price from grant date multiplied by number of SARs and divided by thestock price at the time of exercise. The participants can choose to exercise and sell or exercise and hold. If the share price is lower
than the price at grant, then no gain is realized; however, participants have seven years from the vesting date in which to exercise.
For PSUs and RSUs, employees receive the shares (1 PSU/RSU results in 1 share) on the vesting date and they can choose to hold(net of taxes) or sell the shares.
Temenos ensures it can meet its demand for shares through available conditional capital or treasury shares. Conditional capitalincreases are approved by shareholders at the AGM. Conditional capital was used for all SAR exercises and share vestings until
1 November 2023 after which treasury shares were used. UBS holds the treasury shares and administers the conditional capitalissuance when required in relation to the share scheme.
The tables below provide an overview of the LTI schemes in place together with their performance criteria and pricing. The leveland value of awards are commensurate with an Executive’s contribution to the business.

Overview of Executive LTI schemes

The schemes that are not vested as at 31 December 2023 are outlined in the table below, including the 2023 scheme granted inthis compensation year:

SchemeNo. awarded
for
Executives1

No. of
Executives
awardedExercise price

Fair value USD2

Grant date

Vesting date

2023

RSUs

21,971

3

–

64.81

16 January 2023

50% on 1 March2025 and 50% on
1 March 2026

2023

PSUs

25,632

3

–

74.34

16 January 2023

1 March 2026
subject to Board of
Directors’ approvalof the results forthe year ending
31 December 2025

2023

PSUs3

84,621

1

–

76.59

16 January 2023

31 December 2023

2023

SARs

264,106

4

66.91

26.07

16 January 2023

On Board of
Directors’ approvalof the results forthe year ending
31 December 2025

2022

PSUs

15,560

1

–

96.40

1 March 2022

1 March 2025

2022

SARs

60,756

1

96.40

24.03

1 March 2022

1 March 2025

2022

PSUs

17,8504

107.6515 February 2022

1 March 2025
subject to Board of
Directors’ approvalof the results forthe year ending
31 December 2024

2022

SARs

590,0007

107.65

27.57

15 February 2022

On Board of
Directors’ approvalof the results forthe year ending
31 December 2024

2021

SARs

5,000

1

156.81

36.14

21 July 2021

20 July 2024

2021

SARs

37,5001

160.2037.00

1 July 2021

30 June 2024

2021

SARs

741,500

12

143.5435.57

18 February 2021

On Board of
Directors’ approvalof the results forthe year ending
31 December 2023

Year of grant1	The number of instruments granted includes the number of instruments granted to those who were Executives at the time of grant; this is notequal to the current members.
2 The fair value of SARs and PSUs in 2023 was assessed on 21 February 2023 when the targets were issued to participants.
3 Due to the exceptional circumstances in January 2023, the CEO was given a special PSU plan; see section D.3 for further details.

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183

Vesting conditions for SARs, PSUs and RSUs

Vesting of the SAR and PSU awards occurs after three years, subject to continued employment and the achievementof performance targets described below.
The targets for the SAR schemes outstanding on 31 December 2023 are outlined below:
KPIs1

ARR

Weighting SARs

60%

2

Non-IFRS EPS

20%Free Cash Flow

20%

1 Due to the exceptional circumstances in January 2023, the CEO received a special LTI plan; see section D.3 for further details.
2	Total Bookings, as used in the 2022 plan, has been amended to ARR which is the key metric now shown in our external reporting and aligns withthe shift of the model to recurring revenue.

Rigorous performance goals underline the 2023 LTI plan, with the target three-year CAGR set for ARR at 15%, for non-IFRS EPS
at 12% and for Free Cash Flow at 30%.
Vesting of the RSUs is 50% after two years and 50% after three years.

Vesting outcome for SARs and PSUs

The vesting outcome for the SARs and PSUs granted is the greater of:i.	the sum of the result of each of the three individual years, where one-third is based on achievement of annual results for each year.
There is no overachievement element on the awards linked to annual targets, where funding is binary at either 0 or 100%; andii.	three-year cumulative goals, which requires achievement being greater than 85% of the sum of the annual targets, with thepotential for funding at up to 175% of the target SARs as explained below.
Over/underachievement for the cumulative performance of SAR and PSU schemes
For achievement between 85% and 100% of target a pro-rated reduced amount will vest. Above 100% achievement, for every 1%
overachievement of the three years cumulative for each KPI target, an additional 2% of SARs may be granted up to a maximum of
175% of the total grant. Below 100% achievement, for every 1% underachievement, 3.33% of the number of SARs is forfeited so thatfunding equals 50% at 85% of target. Intermediate performance is pro-rated on a straight-line basis between the data points shown.
Cumulative achievement for each KPI:
Achieved as % of cumulative target 1

85%

92.5%

100%

110%

120%

137.5%

Proportion vesting

50%

75%

100%

120%

140%

175%

100

120

140

160

1 CEO has zero payout at 80% achievement and 50% payout at 90% achievement.

Below the vesting shown pictorially:
Annual and cumulative vesting of SARs and PSUs
200

Vesting %

150

100

50

0

0

20

40

60

80
Achievement %Payout cumulative 2023  

Payout annualCorporate Governance184

Temenos AG Annual Report and Accounts 2023

COMPENSATION REPORT continued

B. Compensation components continued
B.5. Long-term equity incentive continued
Achievement of the 2021 LTI SAR scheme

Under the 2021 LTI SAR scheme, which vested on 19 February 2024, the performance targets at grant had been set as 60%
Bookings, 20% non-IFRS EPS, and 20% Free Cash Flow.
The payout for the 2021 LTI SAR plan is as follows:
Payout for 2021 SAR plan

Bookings

WeightingAchievement/
vesting

Funding60%

108.4%

116.8%

2

20%

75.8%

–

Free Cash Flow

20%

1

Non-IFRS EPS

Weighted average achievement/combined payout

71.8%

33.3%

94.9%

76.7%

1	The Bookings achievement was subject to a non-audit assurance engagement performed by PricewaterhouseCoopers SA, our external auditors tovalidate the Bookings in line with the Basis of Preparation agreed with the Compensation Committee. A discretionary adjustment was approved by
the Compensation Committee without which the combined payout would have been 73.5%.
2	The Company’s non-IFRS figures exclude share-based payments and related social charge costs, any deferred revenue write-down resulting fromacquisitions, discontinued activities that do not qualify as such under IFRS, acquisition-related charges such as financing costs, advisory fees andintegration costs, charges as a result of the amortization of acquired intangibles, costs incurred in connection with a restructuring program orother organizational transformation activities planned and controlled by management, and adjustments made to reflect the associated tax charge
relating to the above items.

On 19 February 2024, the vesting date, the closing share price of USD 74.9 meant that realized pay from the earned SARs was zero
given the exercise price of USD 143.54. However, the Executives have an additional seven years during which time they can exercise
the SARs supporting go-forward shareholder alignment.

B.6. Share ownership
Executives

The following minimum amounts of shares must be held:
CEO			

5 times annual fixed salary

CFO			

2 times annual fixed salary

Other Executives		

1 times annual fixed salary

Members must satisfy the requirement by the later of three years after appointment to the Executive Committee or as soon as thefirst SARs received for a new joiner deliver the required number of shares to cover the above-mentioned minimum.
The number of shares to be held is calculated based on the closing stock price of 31 December of the prior year and the fixedsalary for the year. For example, the number of shares required to be held on 31 December 2024 is calculated based on the shareprice of 31 December 2023 and fixed salary for the year 2024 as at 1 January 2024. This allows the Executives sufficient time totake any required actions. Only owned Temenos shares (including in the form of ADRs) are counted when evaluating compliancewith the guideline. Unexercised SARs do not count.

Non-Executive Directors

Non-Executive Directors must hold shares with a value equivalent to the annual retainer fee. This must be effective by May 2024
for Non-Executive Directors elected prior to May 2021. New Non-Executive Directors must adhere to this guideline within three
years of election at the AGM.
The shareholdings for both Executives and Non-Executive Directors are shown in section F.1.

B.7. Dilution and capital requirements

A SAR is an incentive given to employees that aligns their interest with shareholders, with realized pay equal to the appreciation ofCompany stock over an established time period. Similar to employee stock options, SARs are beneficial to the employee when the
Company stock price rises; the difference with SARs is that employees do not pay the exercise price but only receive the sum of
the increase in stock or cash. The dilution on outstanding SARs is only known at the time of exercise as it is dependent on theshare price at that time. As an example, if 1,000 SARs at a grant price of USD 100 are exercised when the share price is USD 150,
then the gain is USD 50,000, equivalent to a 333 share dilution (USD 50,000 divided by USD 150).
When issuing LTIs, the Compensation Committee reviews the potential dilution to ensure that it remains within our target of no
more than 2% per annum (pa) increase on a CAGR basis. The dilution for the period 2021-2023, the period over which the 2021 LTI
SAR scheme vested on a CAGR basis, was negative since the 2021, 2022 and 2023 LTI grants are out of the money.

Corporate Governance

Temenos AG Annual Report and Accounts 2023

185

The total cumulative dilution as of 31 December 2023 from all outstanding SARs, PSUs and RSUs has been calculated at thebalance sheet date and subsequently based on various simulations in the table below. 0.7 million of the LTIs are included alreadyin the EPS dilution. Of the 4.2 million instruments below, 3.2 million are SARs and 1.0 million are shares

Simulations

No. of shares
millionNo. of LTI
instruments
millionWeighted
average exercise
price
USD

No. of LTI
instruments
included indiluted EPS
millionAssumedshare priceon exercise
USD

No. of shares
to be createdmillion(SARs in themoney)

Dilution

Closing share price

72.5

4.2

84.44

0.7

92.9

1.3

1.8%

15% growth

72.5

4.2

84.44

0.7

141.3

1.7

2.4%

30% growth

72.5

4.2

84.44

0.7

204.2

2.5

3.3%

Maximum dilution withfull overachievement(infinite share price)

72.5

5.2

84.44

0.7

n/a

5.2

6.7%

The conditional capital of 2.7 million shares that is available at 31 December 2023 covers this requirement and our dilution cannot
exceed 6.7% no matter how much the price increases. The maximum is calculated as the number of instruments outstanding
including maximum overachievement divided by this plus the number of outstanding shares, i.e. (4.2 million + 1.0 million)/(4.2 million + 1.0 million + 72.5 million). A more realistic estimate is a dilution of 1.7 million shares based on a CAGR share pricegrowth of 15% over the next three years, which would translate into dilution of 2.4%.

B.8. Contract terms for the Executive Committee members

The contractual notice periods of the members of the Executive Committee do not exceed 12 months; there are no non-statutory
severance payment clauses.
In case of a change of control of Temenos AG, all LTI instruments granted will become immediately vested and exercisable
provided that their respective vesting period has started. A case of change of control occurs when a third party acquires thecontrol of more than 50% ownership in Temenos AG.
In case of termination by Temenos for cause, all unvested LTI instruments are forfeited. In other termination scenarios thetreatment of the unvested LTI instruments varies by role and is described in each plan and, as the case may be, in thecorresponding grant letter(s).

B.9. Compensation elements for Non-Executive Directors

The Non-Executive Directors were compensated in 2023 with a fee for their Board duties, together with a supplementary fee for
their role as Chair of the Audit, Compensation, and Nomination & ESG Committee respectively. Directors traveling long-haulreceived an additional fee.
The detail by person is provided in section D.1.

C. Pay for performance appraisal
To align with shareholders’ interests, Temenos’ executive compensation program is designed to foster a pay for performance culture.
The chart below shows a percentage split of aggregate compensation of the Executives for 2023.

2023 Executive Committee (includes Executives as at 31 December 2023 only)
Compensation at grant
Fixed salary		

12%

Other compensation		

1%

Variable short-term incentives		

13%

LTI (SARs and PSUs)		

68%

LTI (RSUs)		

6%

At-risk compensation (performance-based)

81%

The fixed salary and benefits are the only unconditional (i.e. non-risk) components; short-term variable (STI) compensation isdependent on the achievement of the results for 2023. Long-term incentives taking the form of SARs and PSUs are dependent on
the achievement of the results for the three-year period 2023 to 2025 inclusive. RSUs are time based.
In 2023, 81% of total compensation at grant was variable and conditional upon performance targets and therefore at risk.
SARs are subject to both performance and time vesting criteria and will not vest until February 2026. The PSUs will not vest until
March 2026.

Corporate Governance186

Temenos AG Annual Report and Accounts 2023

COMPENSATION REPORT continued

C. Pay for performance appraisal continued
SAR payout vs EPS and share price growthWith regard to the LTI plan, the chart below shows the long-term alignment of LTI funding vs the annual growth of our non-IFRS
EPS and share price performance.
Weighted averageachievement

PayoutExercise price
USD

Price at vesting
USD

2013

101%

101%

10.96

43.69

2014

100%

100%

35.33

70.87

2015

105%

110%

35.45

127.00

2016

111%

121%

43.69

136.94

2017

110%

121%

70.87

168.81

2018

99%

87%

127.00120.3112019

n/a as different targets by year

60%

136.94106.5212020

n/a as different targets by year47%

168.8173.83 1

2021

95%

77%

143.5474.91

SAR plan

1 All these SAR plans were out of the money on vesting.

EPS growth vs SAR payout and share price growth
300%

30%

250%

25%
20%

200%

15%

150%

10%

100%

5%

50%

0%

0%

-5%

-50%
-100%

-10%
2008
plan

2009
plan

2010
plan

SAR payout %  

2011
plan

2012
plan

2013
plan

2014
plan

2015
plan

Share price growth grant to vesting  

2016
plan

2017
plan

2018
plan

2019
plan

2020
plan

2021
plan

-15%

EPS 3-year CAGR growth

KPI targets are set at challenging levels of long-term performance, creating a direct link between pay and performance. The
Company had an exceptional performance with very strong shareholder returns for over six years through 2018. After that period,
average SAR funding was at below-target levels, highlighting the rigor of the underlying performance goals. In 2020, due to thepandemic and the impact that it had on the Company’s customers and banks around the world, the performance of the Company
was affected. This impacted shareholder returns which in turn led to a reduction in management’s realized pay, even though thedriving events were outside of management’s control. The lower than target performance in 2020 impacted the LTI plans of 2018,2019 and 2020 with vesting respectively in February 2021, 2022 and 2023.

Corporate Governance

Temenos AG Annual Report and Accounts 2023

187

D. Compensation for financial year under review – auditedThis section (section D) has been audited by Temenos’ auditors, PricewaterhouseCoopers SA.
As individuals are paid in currencies other than US dollars, the amounts in the tables below are converted into US dollars using the
average exchange rate for 2023 and the average exchange rate for 2022 respectively. Comparison between these two years may be
distorted through the exchange rate fluctuations.
The LTI value included in the compensation tables below represents the full fair value of the on-target achievement at the time of
grant, i.e. for 2023 the LTI includes the fair value of the SARs, PSUs and RSUs. With respect to SARs, it includes 100% of the fairvalue of the 2023 grant calculated by a third party using the binomial method. The PSUs and RSUs fair value is the share price at
grant adjusted by deducting the net present value of expected dividend payments over the vesting period. The valuation method,
conditions and grant details are explained in the paragraph titled Compensation components, B.5.

D.1. Board of Directors

The total compensation for the Board of Directors including social security charges totals USD 1.9 million compared to a total maximum
compensation of USD 9.3 million approved by the shareholders at the AGM on 25 May 2022. Since the Executive Chairman was acting
CEO effective from 12 January his entire compensation has been included with the Executive Committee for 2023.
All numbers
are grossin USD
Name
Board function

Year

T. de Tersant

2023

598,333––

598,333

Chairman from3 May 2023
(previously
Vice-Chairman) 2022

195,000––

195,000

4

Total
Variable
All other compensation
Fixed fee/ short-term
1
2
before LTI
salaryincentive compensation

Total
LTI value compensation

Employersocialsecurity
charges 3

Total
compensation
includingsocialsecurity
charges–598,333

44,237642,570–

195,000

15,492

210,492

I. Cookson52023

175,000––

175,000–

175,000

12,180187,180

Vice-Chairman

2022

175,000––

175,000–

175,000

12,294

187,294

M. Carli

2023

140,000––

140,000–

140,000

11,465

151,465

Member2022

140,000––

140,000–

140,000

12,474

152,474

P. Spenser6

2023

170,000–

10,000180,000–

180,000–

180,000

Member2022

140,000–

10,000150,000–

150,000–

150,000

D. Forster
Member from25 May 2022

2023

140,000––

140,000–

140,000

12,450152,4502022

85,806––85,806–85,806

7,568

93,374

Maximumshareholder
approval

C. Hultén
Member from25 May 2022

2023

140,000––

140,000–

140,000

12,450152,4502022

85,806––85,806–85,806

7,658

93,374

X. Cauchois
Member from3 May 2023

2023

128,917––

128,917–

128,917

8,862

137,778

D. Deuring
Member from3 May 2023

2023

92,556––92,556–92,556

8,056

100,612

A. Andreades
Executive
Chairman until
3 May 2023

2022

688,162–

165,621853,782

5,147,319

6,001,101

12,487

6,013,588

2023

63,208–3,389

66,597–

66,597–

66,5972022

185,000–

10,000

195,000–

195,000–

195,000

2023

47,833–

3,389

51,222–

51,222–

51,2222022

140,000–

10,000150,000–

150,000–

150,000

2023

51,136––

51,136–

51,136–

51,1362022

152,294––

152,294–

152,294–

152,2942023

1,746,983–

16,778

1,763,761–

1,763,761

109,700

1,873,461

9,300,000

2022 1,987,069–

195,6212,182,689

5,147,319

7,330,008

67,883

7,397,891

8,200,000

7

8

H. Akbari9
Member until
3 May 2023
J. Benson
Member until
3 May 2023
E. Hansen
Member until
3 May 2023
Total Boardof Directors

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Temenos AG Annual Report and Accounts 2023

COMPENSATION REPORT continued

D. Compensation for financial year under review – audited continued
D.1. Board of Directors continued1	The variable short-term incentive target for 2022 was not met and did not pay out in February 2023 as planned. The variable short-term incentive
for 2023 for Andreas Andreades is included in the Executive Committee.
2 	All other compensation includes life, medical, disability, accident insurances, pension and car allowance for Andreas Andreades in 2022. Peter
Spenser has an additional fee of USD 10,000 for traveling long-haul. Homaira Akbari and James Benson benefited from this fee during the period
they were members.
3	Social security charges comprise actual charges on base salary and other compensation and estimated social security charges to be paid forbonus and LTIs (based on the fair value) granted in the year of compensation.
4	Thibault de Tersant’s fees comprise a basic fee of USD 800,000 annually for his duties as Chair of Temenos AG effective from 3 May 2023. Prior tothat his fees comprised a basic fee of USD 140,00 annually plus USD 55,000 annually for his duties as Chair of the Audit Committee.
5	Ian Cookson’s fees comprise a basic fee of USD 140,000 annually plus USD 35,000 annually for his duties as Chair of the Nomination & ESG Committee.
6	Peter Spenser’s fees comprise a basic fee of USD 140,000 annually. Effective from 3 May 2023, his fees include USD 45,000 annually for his duties
as Chair of the Compensation Committee. It comprised an additional USD 10,000 annually for traveling long haul.
7	Xavier Cauchois’ fees comprise a basic fee of USD 140,000 annually effective from 3 May 2023. Additionally, his fees include USD 55,000 annuallyfor his duties as Chair of the Audit Committee.
8	Andreas Andreades’ total compensation for 2023 is recorded under the Executive Committee since he acted as CEO for the full year.
9	Homaira Akbari’s fees comprised a basic fee of USD 140,000 annually plus USD 45,000 annually for her duties as Chair of the Compensation
Committee until 3 May 2023. It comprised an additional USD 10,000 annually for traveling long-haul.

D.2. Executive Committee

The total compensation for the five members and three former members of the Executive Committee including social security
charges totals USD 27.4 million. This includes USD 24 million for the five current members and USD 3.4 million for former members.
Shareholders approved USD 30 million at the AGM on 25 May 2022 for seven members.

All numbers
are grossin USDBasesalaryVariable
All other
short-term
incentive1 compensation2

Total
compensation
before LTI

LTI value3

Total
compensation

16,695,780

25,647,098

2023

2,642,057 2,851,577

3,457,684

8,951,318

2022

3,424,082

1,525,089

4,949,171 21,000,460–

Employersocialsecurity
charges 4

Total
compensation
includingsocialsecurity
charges

Maximumshareholder
approval

1,727,802 27,374,900

30,000,000

25,949,631 1,986,583

27,936,214

40,000,000

1	The variable short-term incentive targets were achieved at a weighted average of 103.4% and hence paid out at 106.9%. In 2022 the targets were
not met.
2	All other compensation includes life, medical, disability, accident insurance, pension and car allowance. This category also includes termination
benefits for the former CEO, CRO and CMO.
3 The LTI for the Executive Committee consists of:• 264,106 SARs which were granted on 16 January 2023 at a grant price of USD 66.91. The fair value, assessed on 21 February 2023, the date when
the final targets were issued to the participants, was USD 26.07. The accounting charge included in the LTI value above was 40% higher than thevaluation on the date of grant;• 110,253 PSUs which were granted on 16 January 2023. The share price on date of grant was USD 66.91. The fair value, assessed on 21 February 2023,
the date when the final targets were issued to the participants, was USD 76.59 for the CEO whose PSUs vested on 31 December 2023 (see section B.5
for further explanation) and USD 74.34 for the other members. The accounting charge was 11% higher than the valuation on the date of grant; and• 21,971 RSUs which were granted on 16 January 2023 at a fair value of USD 64,81.
4	Social security charges comprise actual charges on base salary and other compensation and estimated social security charges to be paid forbonus and LTIPs (based on the fair value) granted in the year of compensation.

Average compensation per member for five current members in 2023 was USD 4.8 million (2022: USD 4.0 million). 2022 included
several members for a short period of time who did not receive any LTI in their capacity as Executive Committee members,
bringing the average down.

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Temenos AG Annual Report and Accounts 2023

189

D.3 Highest paid member of the Executive Committee

Mr. Andreas Andreades, CEO, was the highest paid member of the Executive Committee in 2023. 88% of his total compensation in
2023 at grant was variable and conditional upon the 2023 performance targets to be achieved.
Following the resignation of Mr. Max Chuard in January 2023, the Board of Directors requested Mr. Andreades to assume the role of“acting CEO”, in addition to his Executive Chairman duties, until such time as the Temenos Group engaged a permanent CEO. Mr.
Andreades accepted to take on the role for a limited period of time. He elected not to stand for re-election as Executive Chairman
with effect from May 2023. Under the arrangement agreed, the Board had absolute discretion regarding timing of the departureof Mr. Andreades and hence the compensation arrangements reflected the expectation that the contract would likely not be
extended beyond 31 December 2023, assuming a new CEO was found within this timeframe. Mr. Andreades agreed to retain
his compensation package at the value of the Executive Chairman role (approximately 80% of CEO role) for this period of time
(USD 7.4 million), and the terms for his STI and LTI plans, as described below, reflected the expected short-term nature of his
appointment to the CEO role.
Mr. Andreades was given an STI plan consisting of an ARR target only, where the target was based on guidance for ARR, i.e. USD
703 million. ARR represented the single key revenue performance indicator for 2023 as Mr. Andreades lead the Company througha complex transition to subscription software as well as an ongoing acceleration in SaaS revenue. Since Mr. Andreades’ contract
was not expected to extend beyond 31 December 2023, the agreement was for payment of the bonus to be made no later than
31 December 2023. The achievement was therefore based on the ARR forecast of USD 715 million, an achievement of 101.7%,
approved by the Board of Directors in November 2023. The resulting payout of 103.4% was made to Mr. Andreades in December
2023. The other Executives were paid based on the final achievement of ARR of USD 730 million versus a target of USD 715 million,
i.e. achievement of 102.1% and payout of 104.2%, and weighted average achievement across all KPIs included in their plan of 103.4%
and final payout of 106.9%. Therefore both the final ARR achieved used to calculate STI payout, and the overall final bonus payout
for other Executives were higher than the payout of Mr. Andreades.
Mr. Andreades’ LTI plan consisted of a PSU plan with a shorter vesting period to reflect the expected tenure of Mr. Andreades as
CEO, that is the earlier of the appointment date of a new CEO or 31 December 2023. The target was based on ARR, the same as for
the STI plan as detailed above. The grant was issued on 16 January 2023, the date of Mr. Andreades’ appointment as acting CEO.
The final target of USD 703 million was approved by the Board of Directors in February and issued to Mr. Andreades on 21 February 2023,
resulting in a revaluation of the grant as required by IFRS 2 accounting standards. This higher value is included in the compensationtable in D.2. Both values are shown in the table below for clarity.
Mr. Andreades’ compensation, in US dollars, is shown below.

Total
LTI value 3 compensation4

Employersocialsecurity
charges

Total
compensation
includingsocialsecurity
charges

6,481,122

8,271,474

4,366

8,275,840

1,790,352

5,662,051

7,452,403

4,366

7,456,769

94,384

921,944

6,241,848

7,163,792

606,845

7,770,637

448,293805,1857,959,929

8,765,114

710,8899,476,003

Basesalary 1

Variableshort-term
incentive 2

All other
compensation

Total
compensation
before LTI

2023 CEO– aftertargets
issued783,448

811,243

195,661

1,790,352

2023 CEO– at grant783,448

811,243

195,661

827,560–

356,892–

All numbers
are grossin USD2022 CEO2022 CRO

5

1	Andreas Andreades and Max Chuard’s salaries are denominated in CHF. The exchange rate used in 2023 was 0.8988 (2022: 0.9546), giving rise to a
5% higher USD salary in 2023. The salary includes USD 46,667 for Board of Directors fees for Andreas Andreades’ role while Executive Chairman.
2 The variable short-term incentive target was achieved at 101.7% and hence paid out at 103.4%. In 2022 the targets were not met.
3	The LTI for the CEO consists of 84,621 PSUs which were granted on 16 January 2023 at a value of USD 5,662,051, the value on 16 January 2023. The
fair value on 21 February 2023, the date on which the targets were issued was USD 76.59 giving rise to the charge of USD 6,481,122. This is thevalue that has been included in D2. The PSUs vested at 103.4% payout on 31 December 2023.
4	The approved package for the CEO for 2023 was a 10% increase on 2022; however, Mr. Andreades accepted the role with the package approved for
Executive Chairman, albeit with the amendments to the STI and LTI terms as explained above.
5	The Chief Revenue Officer was the highest paid Executive Committee member in 2022 due to the replacement award of USD 5 million that hereceived. The replacement award consisted of 51,867 RSUs at fair value of USD 96.40 which was to compensate him for a financial advantage thathis previous employer would have awarded him, but which he forewent to join Temenos.

190

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Temenos AG Annual Report and Accounts 2023

COMPENSATION REPORT continued

D. Compensation for financial year under review – audited continued
D.4. Compensation in CHF

Pursuant to Article 958d alinea 3 of the Swiss Code of Obligations, compensation amounts may be quoted in the most significant
currency of the business activity; in Temenos’ case it is USD, but it must also be quoted in CHF. The amounts quoted below in CHF
for the Board of Directors, Executive Committee and highest paid Executive Committee member respectively are calculated taking
the USD amount converted at the average exchange rate for the year. The exchange rate used in 2023 was 0.8988 (2022: 0.9546).

Fixed fee/salaryVariableshort-term
All other
incentive compensation

Total
compensation
before LTI

Total
compensation

Employersocialsecurity
charges

Total
compensation
includingsocialsecurity
charges

Function
CHF

Year

Board ofDirectors

2023

1,570,201–

15,0801,585,281–

1,585,281

98,5991,683,880

2022

1,896,883–

186,7422,083,625

4,913,702

6,997,327

64,802

7,062,129

Employersocialsecurity
charges

Total
compensation
includingsocialsecurity
chargesBasesalaryVariableshort-term
All other
incentive compensation

LTI value

Total
compensation
before LTI

LTI value

Total
compensation

Function
CHF

Year

Executive
Committee

2023

2,374,700 2,563,018

3,107,791

8,045,509

15,006,287

23,051,796 1,552,960

24,604,755

2022

3,268,676

1,455,871

4,724,547 20,047,330

24,771,877 1,896,420

26,668,297

Variableshort-term
All other
incentive compensation

Total
compensation
before LTI

LTI value
includingreplacement
award
for CRO

Total
compensation
includingreplacement
award
for CRO

Employersocialsecurity
charges

Total
compensation
includingsocialsecurity
chargesBasesalary–Function
CHF

Year

CEO

2023

704,168

729,151

175,862

1,609,181

5,825,279

7,434,460

3,924

7,438,384

CEO

2023 atgrant

704,168

729,151

175,862

1,609,181

5,089,092

6,698,273

3,924

6,702,197

CEO

2022

790,000–

90,101880,101

5,958,554

6,838,655

579,3037,417,958

CRO

2022

340,694–

427,947

768,6417,598,658

8,367,299

678,624

9,045,293

D.5. Loans granted to members of governing bodies

As of 31 December 2023 and 31 December 2022 the Company has no outstanding loans to members of the Board of Directors andExecutive Committee. No loans were granted to persons related to the Board of Directors or Executive Committee.

Temenos AG Annual Report and Accounts 2023

Corporate Governance

191

E. The year ahead: compensation of the Board of Directors and Executive Committee
for fiscal year 2024
At the AGM in 2023, the shareholders approved total compensation including social charges for fiscal year 2024 for the Board of
Directors of USD 2.3 million and for the Executive Committee of five members of USD 30 million.

E.1. Changes that affect 2024 Board of Directors compensation
The Board of Directors consists of the following members as of February 2024:⚫

Thibault de Tersant, Chairman;⚫

Ian Cookson, Vice-Chairman;⚫

Maurizio Carli;⚫

Debbie Forster;⚫

Cecilia Hultén;⚫

Peter Spenser;⚫

Xavier Cauchois; and⚫

Dorothee Deuring.

The fees for the Board positions will be the same as 2023.

E.2. Changes that affect 2024 Executive Committee compensation

Effective 15 January 2024, William Moroney and Philip Barnett have been promoted to Temenos’ Executive Committee as the mostsenior executives with operational executive responsibilities.
The Executive Committee, whose remuneration falls under the 2024 Executive Committee compensation, consists of the following
members as at February 2024:⚫

Andreas Andreades, Chief Executive Officer;⚫

Panagiotis “Takis” Spiliopoulos, Chief Financial Officer;⚫

Prema Varadhan, President Product and Chief Operating Officer;⚫

Colin Jarrett, Chief Security and Risk Officer;⚫

Jayde Tipper, Chief People Officer;⚫

William Moroney, President International from 15 January 2024; and⚫

Philip Barnett, President Americas from 15 January 2024.

E.3. 2024 Variable short-term incentive for Executives

For 2024, the weighting of ARR and Non-IFRS Product Revenues has been reviewed and will be revised as shown below:
KPIs for STI 2024

Weighting 2023

Weighting 2024

ARR (Annual Recurring Revenue)123

30%

40%

Non-IFRS Product Revenues12

30%–

Non-IFRS EBIT

20%

20%

20%

20%

–

20%

1

Net Operating Cash Flow1

Individual Operational Objectives

41	The targets are considered commercially sensitive and are not disclosed in advance. The minimum threshold remains at 90%, where funding will be
set at 50%, which is informed by practices at our peers, other than mentioned below. Maximum performance is set at 125% of target and results in
150% funding.
2	The weighting of ARR will be increased to 40% to reflect the conclusion of the transition of our term license to subscription business with ARR
representing the most appropriate revenue metric to incentivize growth in recurring revenues. Product Revenues favor subscription over SaaS hence
has been removed.
3 Exceptionally, the CEO has an ARR target only, see section D.3 for further details, with minimum threshold at 80% where funding is 0%.
4	In 2024 we have introduced Individual Operational Objectives to ensure that, in addition to the Company’s objectives that they share as a team, eachmember of the Executive Committee focuses on their respective critical areas to ensure that the Company strategy for this financial year is met.

192

Corporate Governance

Temenos AG Annual Report and Accounts 2023

COMPENSATION REPORT continued

E. The year ahead: compensation of the Board of Directors and Executive Committee
for fiscal year 2024 continued
E.4. 2024 Long-Term Incentive/Equity Plan awards for Executives

The LTI award for 2024 was issued in February 2024. The Board of Directors has elected to grant the members of the Executive
Committee 35% of 2023 LTI equity in the form of SARs, 35% in the form of PSUs and the remaining 30% in the form of RSUs. The
CEO, Mr. Andreades, has once again agreed to continue in his role until a new CEO has been appointed. His LTI award consists of
PSUs (72%) and RSUs (28%). Performance is ARR based and the vesting period covers his services until the earlier of a new CEO
being appointed or 31 December 2024, which gives the Company the flexibility to proceed with the right appointment at the righttime.
The SARs and PSUs for 2024 are subject to the same performance conditions, minimum and maximum performance thresholds,
funding schedule and the three-year vesting period as for 2023 and are described below.
The KPIs for fiscal year 2024 for the Executive Committee and senior management are as below:
KPIs for LTI 2024–2026

Weighting

ARR

60%

Non-IFRS EPS

20%Free Cash Flow

20%

Vesting curve
The vesting curve for all of the above KPI metrics will be as follows:
The vesting outcome for the number of SARs to be granted is the greater of:i.	the sum of the result of each of the individual years, where one-third of the three-year plan is based on achievement of annual
results for each year of the three-year plan. There is no overachievement element on the awards linked to annual targets andachievement is binary, either 0 or 100%.
ii.	the cumulative target achievement being greater than 85% of the sum of the annual targets. On the cumulative target the overor underachievement vests as per the chart below.
Achievement as % of cumulative target

85%

92.5%

100%

110%

120%

137.5%

Proportion vesting

50%

75%

100%

120%

140%

175%

For the 2024 LTI plan, the target CAGR growth for ARR is set at 12%, for non-IFRS EPS is set at 11% and for Free Cash Flow is set at 20%.

F. Other information – auditedThis section (section F), has been audited by Temenos’ auditors, PricewaterhouseCoopers SA

F.1. Shareholdings and equity incentives
Non-Executive Directors
Number ofshares31 December
2023

Number ofshares31 December
2022

Name

Position

T. de Tersant

Chairman

9,000

9,000

I. Cookson

Vice-Chairman

17,40017,400P. Spenser 1

Member

1,800

1,800

M. Carli

Member

1,000

1,000

D. Forster

Member60–

C. Hultén

Member

1,200–

X. Cauchois

Member from 3 May 2023

600

n/a

D. Deuring

Member from 3 May 2023–

n/a

H. Akbari1

Member until 3 May 2023

n/a

1,460

E. Hansen

Member until 3 May 2023

n/a

2,500

J. Benson1

Member until 3 May 2023

n/a

360

1 Peter Spenser, Homaira Akbari and James Benson held shares in the form of American depositary receipts (ADRs).

Corporate Governance

Temenos AG Annual Report and Accounts 2023

193

Executive Committee members
Number ofshares31 December
2023

Number ofvestedPSUs
31 December
2023

Number ofunvested
RSUs/PSUs
31 December
2023

Number ofshares31 December
2022

846,752

87,4981–

846,752

–

n/a

–

–

75,0008,284

Number ofunvested
RSUs/PSUs
31 December
2022

Name

Position as at 31 December 2023

A. Andreades

CEO

M. Chuard

CEO, until 12 January 2023

P. Spiliopoulos

CFO

–

–

–

–

–

P. VaradhanPresident Product and COO––

38,470

1,448

5,319

J. Tipper

CPO

–

–

9,101

–

3,082

C. Jarrett

CSRO

2,138

–

14,365

2,138

4,650

1	Andreas Andreades’ PSUs granted on 16 January 2023 vested on 31 December 2023 and resulting shares were transferred on the first working
day thereafter.

Name

Position as at 31 December 2023

A. Andreades

CEO

M. Chuard

4

CEO, until 12 January 2023

P. Spiliopoulos CFO

C. Jarrett

P. Varadhan
J. Tipper

CSRO

President Product and COO
CPO

Grant
year 1Plan

Exercise
price
USD

Number ofvestedSARs
31 December
2023

Number ofunvested
SARs
31 December
2023

Number ofvestedSARs
31 December
2022

Number ofunvested
SARs
31 December
2022

–

2018

2018 scheme

127.00135,203–

135,20320192019 scheme

136.94

83,160–83,160–2020 2020 scheme 2

168.81

61,507––

131,800

2021

2021 scheme 3

143.54–

144,700–

144,700

2022

2022 scheme

107.65–

186,700–

186,700–20182018 scheme

127.00––117,79320192019 scheme

136.94––

100,851–2020 2020 scheme 2

168.81–––

159,8502021

2021 scheme 3

143.54–––

175,500

2022

2022 scheme

107.65–––

226,40020192019 scheme

147.4342,000–42,000–2020 2020 scheme 2

168.8133,600––72,0002021

2021 scheme 3

143.54–79,000–79,0002022

2022 scheme

107.65–

107,100–

107,100

2023

2023 scheme

66.91

–

171,951––2020 2020 scheme 2

168.81

11,667––25,0002021

2021 scheme 3

143.54–15,000–15,0002022

2022 scheme

107.65–

18,150–18,1502023

2023 scheme

66.91

–

18,807––2022

2022 scheme

107.65–

15,400–15,4002023

2023 scheme

66.91

–

60,183––2022

2022 scheme

107.65

–

9,050

–

9,050

2023

2023 scheme

66.91

–

13,165––

1 The SARs shown above only include SARs granted during membership of the Executive Committee.
2	The SARs granted under the 2020 scheme vested on 20 February 2023. The final vesting was at 46.67%. The 2022 numbers were reduced by
53.33% in 2023.
3	The SARs granted under the 2021 scheme vested on 19 February 2024. The final vesting was at 76.7%. The numbers above will be reduced by
23.3% in 2024.
4 	Max Chuard is not a member of the Executive Committee on 31 December 2023, he was on garden leave. The SARs that were vested on his
termination were paid at fair value and hence all outstanding SARs canceled.
No options and/or shares were held on 31 December 2023 and 2022 by persons related to the members of the Board of Directors or the
Executive Committee.

Corporate Governance

194

Temenos AG Annual Report and Accounts 2023

COMPENSATION REPORT continued

F. Other information – audited continued
F.2. Equity instruments outstanding

The following table lists all employee equity instruments outstanding as at 31 December 2023. This includes the instruments
outstanding for Executive Committee members shown in the tables in section F.1 and all other staff eligible.
Total number ofoutstanding
LTI instruments

Number ofunvested
SARs2

Numberof vested
SARs

Numberof unvested
PSUs

Numberof unvested
RSUs

Grant year

Plan

Exercise price
USD 1

2014

2015

35.15

22,908–22,908

–

–

2014

2015

35.45

38,126–38,126

–

–

2016

2016

43.69

52,598–52,598

–

–

2016

2016

57.07

40,427–40,427

–

–

2016

2016

65.92

3,634

–

3,634

–

–

2017

2017

70.87

111,781–

111,781

–

–

2017

2017

80.86

2,394

–

2,394

–

–

2018

2018

127.00

335

–

335

–

–

2018

2018

127.00261,020–

261,020

–

–

2018

2018

127.68

1,305

–

1,305

–

–

2018

2018

138.63

868

–

868

–

–

2018

2018

164.00

4,349

–

4,349

–

–

2018

2019

113.64

4,000

–

4,000

–

–

2019

2019

136.94

8,000

–

8,000

–

–

2019

2019

136.94

239,740–

239,740

–

–

2019

2019

146.46

600

–

600

–

–

2019

2019

147.4342,000–42,000

–

–

2019

2019

149.37

2,400

–

2,400

–

–

2019

2019

151.75

1,200

–

1,200

–

–

2019

2019

160.90

4,500

–

4,500

–

–

2019

2019

164.57

1,200

–

1,200

–

–

2019

2019

144.09

6,200

–

6,200

–

–

2019

2020

144.77

784

–

784

–

–

20193

2019

136.9440,00040,000

–

–

–

2020

2

2020

115.91

41,867–41,867

–

–

2020

2

2020

142.68

453

–

453

–

–

2020

2

2020

143.97

934

–

934

–

–

2020

2

2020

160.35

234

–

234

–

–

2020

2

2020

168.81

210,353–

210,353

–

–

20202

2020

135.00

944

–

944

–

–

20202

2020

153.57

32

–

32

–

–

20203

2020

168.81

22,00022,000

–

–

–

2020

2020

124.5019,162–

19,162

–

–

2021

2021

136.61

2,000

2,000

–

–

–

2021

2021

143.54

7,716

–

7,716

–

–

2021

2021

143.54

601,600

601,600

–

–

–

2021

2021

144.36

3,500

3,500

–

–

–

Corporate Governance

Temenos AG Annual Report and Accounts 2023

195

Total number ofoutstanding
LTI instruments

Number ofunvested
SARs2

Numberof vested
SARs

Numberof unvested
PSUs

Numberof unvested
RSUs

Grant year

Plan

Exercise price
USD 1

2021

2021

156.81

10,00010,000

–

–

–

2021

2021

157.66

1,000

1,000

–

–

–

2021

2021

157.69

1,600

1,600

–

–

–

2021

2021

158.87

4,000

4,000

–

–

–

2021

2021

163.70

1,000

1,000

–

–

–

20213

2021

143.5422,00022,000

–

–

–

2021

2021

156.81

22,00022,000

–

–

–

2021

2021

156.81

22,00022,000

–

–

–

2021

2021

n/a

83,231–––

83,231

2022

2022

94.72

5,750

5,750

–

–

–

2022

2022

96.00

8,650

8,650

–

–

–

2022

2022

96.40

30,37830,378

–

–

–

2022

2022

107.65589,850

589,850

–

–

–

2022

2022

54.90

91,002–91,002

–

–

2022

2022

54.9

309,998

309,998

–

–

–

2022

2022

n/a

46,031–––

46,031

2022

2022

n/a

205,300––

205,300

–

2023

2023

66.91

264,106

264,106

–

–

–

2023

2023

n/a

487,585–––

487,585

2023

2023

n/a

177,464––

177,464–

4,184,109

1,961,432

1,223,066

382,764

616,847

1 The weighted average exercise price considering all instruments is USD 84.44, and taking only SARs is USD 110.95.
2 The SARs from the 2021 plan vested on 19 February 2023 at 76.7% achievement, the numbers will be reduced by 23.3% in 2024.
3 SARs with specific targets which were not achieved and will be forfeited in 2024.

Corporate Governance196

Temenos AG Annual Report and Accounts 2023

Report of the statutory auditor
to the General Meeting of Temenos AG
GenevaReport on the audit of the compensation report
OpinionWe have audited the compensation report of Temenos AG (the Company) for the year ended 31 December 2023. The
audit was limited to the information pursuant to article 734a-734f CO in the tables marked 'audited' on section A.3 on
page 176, section D on page 187 to 190 and section F on page 192 to 195 of the compensation report.
In our opinion, the information pursuant to article 734a-734f CO in the accompanying compensation report complies with
Swiss law and the Company’s articles of incorporation.
Basis for opinion
We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities
under those provisions and standards are further described in the 'Auditor’s responsibilities for the audit of thecompensation report' section of our report. We are independent of the Company in accordance with the provisions of
Swiss law and the requirements of the Swiss audit profession, and we have fulfilled our other ethical responsibilities inaccordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other information
The Board of Directors is responsible for the other information. The other information comprises the information includedin the annual report, but does not include the tables marked 'audited' in the compensation report, the consolidated
financial statements, the financial statements and our auditor’s reports thereon.
Our opinion on the compensation report does not cover the other information and we do not express any form ofassurance conclusion thereon.
In connection with our audit of the compensation report, our responsibility is to read the other information and, in doingso, consider whether the other information is materially inconsistent with the audited financial information in thecompensation report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, weare required to report that fact. We have nothing to report in this regard.
Board of Directors' responsibilities for the compensation report
The Board of Directors is responsible for the preparation of a compensation report in accordance with the provisions of
Swiss law and the Company's articles of incorporation, and for such internal control as the Board of Directors determines
is necessary to enable the preparation of a compensation report that is free from material misstatement, whether due tofraud or error. It is also responsible for designing the remuneration system and defining individual remuneration
packages.
Auditor’s responsibilities for the audit of the compensation report
Our objectives are to obtain reasonable assurance about whether the information pursuant to article 734a-734f CO isfree from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
Swiss law and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud orPricewaterhouseCoopers SA, avenue Giuseppe-Motta 50, case postale, 1211 Genève 2, Switzerland
Téléphone: +41 58 792 91 00, www.pwc.ch
PricewaterhouseCoopers SA is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity.

Corporate Governance

Temenos AG Annual Report and Accounts 2023

error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of this compensation report.
As part of an audit in accordance with Swiss law and SA-CH, we exercise professional judgement and maintainprofessional scepticism throughout the audit. We also:• Identify and assess the risks of material misstatement in the compensation report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theCompany's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made.
We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied.
PricewaterhouseCoopers SA

Yazen Jamjum

Hamza Benhlal

Licensed audit expert
Auditor in charge
Geneva, 15 April 2024
Enclosure:• Compensation report

3 Temenos AG | Report of the statutory auditor to the General Meeting197

Financial Statements

198

Temenos AG Annual Report and Accounts 2023

Report of the statutory auditor
to the General Meeting of Temenos AG
GenevaReport on the audit of the consolidated financial statements
OpinionWe have audited the consolidated financial statements of Temenos AG and its subsidiaries (the Group), which comprisethe consolidated statement of profit or loss and the consolidated statement of other comprehensive income for the year
ended 31 December 2023, and the consolidated statement of financial position as at 31 December 2023, theconsolidated statement of cash flows and the consolidated statement of changes in equity for the year then ended, andnotes to the consolidated financial statements, including material accounting policy information.
In our opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial
position of the Group as at 31 December 2023 and its consolidated financial performance and its consolidated cash
flows for the year then ended in accordance with IFRS Accounting Standards and comply with Swiss law.
Basis for opinion
We conducted our audit in accordance with Swiss law, International Standards on Auditing (ISAs) and Swiss Standards
on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the 'Auditor’s
responsibilities for the audit of the consolidated financial statements' section of our report. We are independent of theGroup in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, as well as theInternational Code of Ethics for Professional Accountants (including International Independence Standards) issued by
the International Ethics Standards Board for Accountants (IESBA Code), and we have fulfilled our other ethicalresponsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our audit approach
Overview

Overall Group materiality: USD 8'900'000
The group audit team performed the audit over selected financial statement
line items such as revenue, trade receivables, contract assets and contract
liabilities, cash balances, capitalized development costs and property, plantand equipment in addition to auditing the consolidation which includes pension
and share based compensation. We performed audit of selected financial
statement line items on thirteen entities located in eight different countries.
Our audit scope addressed all of the Group’s revenue, approximately 99% of
the Group’s total assets and approximately 84% of the Group’s total expenses.
As key audit matters the following areas of focus have been identified:-

Subscription and Term license revenue recognition-

Recoverability of trade receivables and contract assets-

Investigation of public allegations

PricewaterhouseCoopers SA, avenue Giuseppe-Motta 50, case postale, 1211 Genève 2, Switzerland
Téléphone: +41 58 792 91 00, www.pwc.ch
PricewaterhouseCoopers SA is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity.

Financial Statements

Temenos AG Annual Report and Accounts 2023

Materiality
The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reasonableassurance that the consolidated financial statements are free from material misstatement. Misstatements may arise due
to fraud or error. They are considered material if, individually or in aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall
Group materiality for the consolidated financial statements as a whole as set out in the table below. These, together withqualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit
procedures and to evaluate the effect of misstatements, both individually and in aggregate, on the consolidated financial
statements as a whole.
Overall Group materiality

USD 8'900'000

Benchmark appliedThree-year average profit before tax

Rationale for the materiality
benchmark applied

We chose profit before tax as the relevant benchmark because, in our view, itis the measure against which the performance of the Group is the mostcommonly assessed and is a generally accepted benchmark. We used a threeyear average to address the impact of the volatility in the benchmark applied.

We agreed with the Audit Committee that we would report to them misstatements above USD 500'000 identified during
our audit as well as any misstatements below that amount which, in our view, warranted reporting for qualitative reasons.
Audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the
consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes
and controls, and the industry in which the Group operates.
The group audit team performed the audit over selected financial statement line items such as revenue, tradereceivables, contract assets and contract liabilities, cash balances, capitalized development costs and property, plantand equipment, in addition to auditing the consolidation, which includes pension and share based compensation. We
also considered where subjective judgements were made; for example, in respect of significant accounting estimatesthat involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we
also addressed the risk of management override of internal controls, including, among other matters, consideration ofwhether there was evidence of bias that represented a risk of material misstatement due to fraud.
Furthermore, we performed audit of selected financial statement line items on thirteen entities located in eight different
countries.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of theconsolidated financial statements of the current period. These matters were addressed in the context of our audit of theconsolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.

3 Temenos AG | Report of the statutory auditor to the General Meeting

199

200

Financial Statements

Temenos AG Annual Report and Accounts 2023

Subscription and Term license revenue recognition
Key audit matter

How our audit addressed the key audit matter

For the year ended 31 December 2023, revenue fromSubscription was USD 160.4 million and revenue from
Term license was USD 78.1 million (together referred tothereafter as “license revenue”).

Firstly, we evaluated the compliance of Temenos’s
accounting policies with IFRS 15 key considerations.

We focused on license revenue because of its significanceand the risks related to the numerous inherent complexities
and critical judgements involved in the measurement,
timing and presentation of revenues from multi-element
contracts found in the software industry.
Transactions with customers often are multiple element
arrangements that typically include license, implementation
and/or development services and maintenance elements.
The identification and the allocation of the transaction priceto the different performance obligations require
management to use significant estimates in relation to thedetermination of the standalone selling price of eachcomponent. In addition, there are critical judgements indetermining whether existing uncertainties andcontingencies preclude license revenue from being
recognised.
In addition, reseller and partner deals may add further
complexities with respect to the nature of the licensing
right, ability and intent to pay, and measurement of thetransaction price.
There is a risk that license revenue is overstated orrecognised prematurely due to either the inappropriate
assessment of the risks and uncertainties involved and/or
inappropriate allocation between the various components.
There is also a risk that judgements or estimates in relation
to license revenue are not free from bias or that license
revenue booked is manipulated to achieve financial targets.
Refer to note 2.17 (accounting policies) and note 4 (criticalaccounting estimates and judgements) of the consolidated
financial statements.

For all license deals that we considered to be individuallysignificant and for a sample of the remaining licensing
arrangements, we performed the following:•

Inspected the existence of a signed version of thecustomer contract together with evidence ofsoftware delivery.

•

Assessed whether the license deal meets thedefinition of subscription or term license
according to the definition in note 2.17.

•

Reviewed the contracts and assessed potential
impact of any unusual clause on revenue
recognition. When necessary, we also discussedwith internal legal counsel their interpretation ofcertain contractual terms to assess their impact
on revenue recognition.

•

Reviewed and evaluated the fair value allocations
between the various performance obligations
identified in accordance with Temenos’s revenue
recognition policy and IFRS 15.

•

With respect to reseller and partner deals, we
also reviewed the commercial nature of thelicensing right and agreed it to the contract terms,
assessed the customers intent and ability to pay
and verified that the transaction price reflects therequirement of IFRS 15.

We also performed cut-off testing procedures to ensurethat revenue is recognised in the correct reporting period
by reference to the contract and evidence of delivery.
In addition, we looked for evidence to validate theauthenticity of a sample of customer contracts.
We presented the results of our testing to the Audit
Committee and highlighted deals involving significant
judgements and estimates together with our view on thosejudgements and estimates made.
Based on the work performed, we concluded that thecritical judgements and estimates made by management
were reasonable and the accounting for license revenue
appropriate.

4 Temenos AG | Report of the statutory auditor to the General Meeting

Financial Statements

Temenos AG Annual Report and Accounts 2023

Recoverability of trade receivables and contract assets
Key audit matter

How our audit addressed the key audit matter

As at 31 December 2023, trade receivables and contract
assets amounted to USD 335.6 million and USD 56.6
million, respectively.

We reviewed management’s analysis for all projects withpotential exposure at risk. This analysis includes
background information of the customer, existing
contractual relationships, balance outstanding, delays incollection, and operational issues together with a detailed
legal analysis, where required.

We focused on this risk as the balances are material andthere are many significant judgements involved inassessing recoverability of trade receivables and contract
assets in the software industry. This is especially the caseas some of these balances could be significant or overdue.
There are many factors that need to be considered whenconcluding that a balance needs to be impaired including
default or delinquency in payments, length of theoutstanding balances and implementation difficulties that
could result in future concessions. In addition, some of thecustomers might also be undergoing restructuring, achange in strategy or management, or facing liquidity
issues that undermine their intent or ability to pay theamounts due.
Given the complexity, the size and the length of certain
implementation projects, there is a risk that an impairment
charge or a revenue reversal is not recognised timely
and/or accurately.
Refer to note 2.5 (accounting policies) and note 14 (tradeand other receivables) of the consolidated financial
statements.

In addition, we challenged management’s assessment of
the recoverability of selected trade receivables andcontract assets balances (significant and randomly
selected). When deemed necessary, we also discussed
certain potential exposures with the internal legal counsel
and agreed it to available confirmations from externallawyers.
We evaluated management's assessment of whether the
resulting impact of the recoverability of the receivable is a
result of a credit default and therefore bad debt expense oralternatively a concession, in the form of variableconsideration, that reduces revenue under IFRS 15.
We confirmed selected material customer balances toverify their intention to settle the outstanding balances in
the future. We also reviewed the ageing of tradereceivables and obtained external market evidence
confirming the lack of significant doubt about the financial
stability for selected customers.
We presented the results of our procedures to the Audit
Committee.
The level of the provision made against trade receivables
and contract assets was deemed appropriate andcorresponds to the risks identified.

Investigation of public allegations
Key audit matter

How our audit addressed the key audit matter

As described in Note 31 “Events after the reporting period”
of the consolidated financial statements, Temenos
launched an investigation conducted by independent third
parties to address the allegations published on 15 February2024.

We assessed the competence, capability and objectivity ofthe external advisors used by Temenos.

Temenos provided the independent third parties access to
documents and dedicated personnel in relation to thismatter. These allegations could have had an impact on the
consolidated financial statements of Temenos ifsubstantiated.
Whilst the investigation concluded that there was no impact
on the consolidated financial statements, we consider theevaluation of the work of Temenos’s experts to be a key
audit matter since significant audit effort was necessary to

We obtained relevant information to understand the scope,
work performed, and outcome of the various investigations
performed by the independent third parties.
We involved our own forensic specialists and assessed thework of Temenos’s experts with the objective of being able
to rely on their work with respect to assessing the validity of
the allegations raised.
We considered whether management’s conclusions were
supportable.

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Financial Statements

evaluate the procedures performed and confirm theconclusions reached.

Temenos AG Annual Report and Accounts 2023

Based on the work performed, we concluded that reliancecan be placed on the work performed by Temenos’s
external advisors and satisfied ourselves on the positions
taken by the management. We presented the results of ourprocedures and our conclusions to the Audit Committee.

Other information
The Board of Directors is responsible for the other information. The other information comprises the information includedin the annual report, but does not include the financial statements, the consolidated financial statements, theremuneration report and our auditor’s reports thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial
statements, or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, weare required to report that fact. We have nothing to report in this regard.
Board of Directors' responsibilities for the consolidated financial statements
The Board of Directors is responsible for the preparation of consolidated financial statements that give a true and fairview in accordance with IFRS Accounting Standards and the provisions of Swiss law, and for such internal control as theBoard of Directors determines is necessary to enable the preparation of consolidated financial statements that are freefrom material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group's ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
Swiss law, ISAs and SA-CH will always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Swiss law, ISAs and SA-CH, we exercise professional judgement and maintainprofessional scepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's
internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made.

6 Temenos AG | Report of the statutory auditor to the General Meeting

Financial Statements

Temenos AG Annual Report and Accounts 2023

• Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Groupto cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including thedisclosures, and whether the consolidated financial statements represent the underlying transactions and events in amanner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities

within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them regarding all relationships and other mattersthat may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threatsor safeguards applied.
From the matters communicated with the Board of Directors or its relevant committee, we determine those matters thatwere of most significance in the audit of the consolidated financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated inour report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.

Report on other legal and regulatory requirements
In accordance with article 728a para. 1 item 3 CO and PS-CH 890, we confirm the existence of an internal control
system that has been designed, pursuant to the instructions of the Board of Directors, for the preparation of theconsolidated financial statements.
We recommend that the consolidated financial statements submitted to you be approved.
PricewaterhouseCoopers SA

Yazen Jamjum

Hamza Benhlal

Licensed audit expert
Auditor in charge
Geneva, 15 April 2024
Enclosure:• Consolidated financial statements (consolidated statement of profit or loss, consolidated statement of othercomprehensive income, consolidated statement of financial position, consolidated statement of cash flows,
consolidated statement of changes in equity and notes)

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Temenos AG Annual Report and Accounts 2023

CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the year ended 31 December
2023
USD 000

2022
USD 000

Revenues
Subscription

160,378

105,703

Term license

78,145

135,372

SaaS

205,108

163,745

Total software licensing

443,631404,820

Maintenance423,697

401,946

Services

132,896

142,862

1,000,224

949,628

Total revenues (note 7)
Operating expenses
Cost of sales(291,135)(318,425)

Sales and marketing(222,104)(202,765)

General and administrative(94,347)(86,814)

Other operating expenses(193,261)(178,239)

Total operating expenses (note 9)(800,847)(786,243)

Operating profit

199,377

163,385

Finance income

10,50017,790Finance costs(36,994)(35,212)Finance costs – net (note 11)(26,494)(17,422)

Profit before taxation

172,883

145,963

Taxation (note 21)(38,206)(31,543)

Profit for the year

134,677

114,420

134,677

114,420

Basic

1.87

1.60

Diluted

1.85

1.59

Attributable to:Equity holders of the Company
Earnings per share (in USD) (note 12):

Notes on pages 209 to 259 are an integral part of these consolidated financial statements.

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205

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
For the year ended 31 December
2023
USD 000

2022
USD 000

134,677

114,420(5,063)

1,941(5,063)

1,941

Cash flow hedge reserve (note 26)(3,037)

10,308

Cost of hedging reserve (note 26)

(800)

(460)

Net investment hedge reserve (note 26)

17,783

10,013Currency translation differences (note 26)(39,929)(29,120)

Profit for the year
Other comprehensive income:Items that will not be reclassified to profit or loss
Remeasurements of post-employment defined benefit plans (note 23)
Items that may be subsequently reclassified to profit or loss

(25,983)(9,259)Other comprehensive loss for the year, net of tax(31,046)(7,318)

Total comprehensive income for the year

103,631

107,102103,631

107,102

Attributable to:Equity holders of the Company
Notes on pages 209 to 259 are an integral part of these consolidated financial statements.

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Temenos AG Annual Report and Accounts 2023

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December
2023
USD 000

2022 *
USD 000

AssetsCurrent assets
Cash and cash equivalents (note 13)

106,885

89,923

Trade and other receivables (note 14)

286,249

313,473

69,78635,112462,920

438,508

Other financial assets (note 15)
Total current assets
Non–current assets
Property, plant and equipment (note 16)
Intangible assets (note 17)

58,017

63,102

1,523,602

1,538,750

188,604

104,410

Other financial assets (note 15)

21,75242,850

Deferred tax assets (note 21)

71,94644,195

Total non-current assets

1,863,921

1,793,307

Total assets

2,326,841

2,231,815

Trade and other payables (note 18)

188,993

171,886

Other financial liabilities (note 15)

11,3398,293

460,829

411,060

Income tax liabilities

83,533

121,031

Borrowings (note 19)

194,990

204,137

3,695

3,085

943,379

919,492

Trade and other receivables (note 14)

Liabilities and equity
Current liabilities

Deferred revenue (note 8)

Provisions for other liabilities and charges (note 22)
Total current liabilities
Non–current liabilities
Other financial liabilities (note 15)
Deferred revenue (note 8)
Borrowings (note 19)

679

1,578

21,003

12,657569,686

636,666

1,504

1,168

Deferred tax liabilities (note 21)

90,68569,654

Employee defined benefit obligations (note 23)

17,925

12,217

701,482

733,940

1,644,861

1,653,432

Provisions for other liabilities and charges (note 22)

Total non-current liabilities
Total liabilities
Shareholders’ equity
Share capital

254,764

253,466

Treasury shares(402,006)(464,778)

Share premium and other reserves (note 25)(144,560)(166,637)

Other equity (note 26)(206,023)(181,160)

Retained earnings

1,179,805

1,137,492

Total equity

681,980

578,383

2,326,841

2,231,815

Total liabilities and equity* Refer to note 2.26.

Notes on pages 209 to 259 are an integral part of these consolidated financial statements.

Temenos AG Annual Report and Accounts 2023

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207

CONSOLIDATED STATEMENT OF CASH FLOWSFor the year ended 31 December
2023
USD 000

2022
USD 000

172,883

145,963

132,172

141,790

Cash flows from operating activities
Profit before taxation
Adjustments:
Property, plant and equipment depreciation, intangible asset amortization and impairmentof intangible and financial assets

130

160

52,91452,701

Foreign exchange gain on non-operating activities(1,136)(8,877)

Interest expenses, net (note 11)18,87918,931

Loss on retirement/disposal of property, plant and equipment
Cost of share options (note 27)

Net loss on derivatives not designated as hedging instruments and movement in fair value fromfinancial instruments (note 11)

8,155

36

Other finance costs

3,511

4,185

Other non-cash items

4,261

2,722

Changes in:Trade and other receivables(61,182)(58,753)

Trade and other payables, provisions and retirement benefit obligations

7,068(16,062)

Deferred revenues

53,87933,829Cash generated from operations

391,534

316,625

Income taxes paid

(60,503)(18,718)

Net cash generated from operating activities

331,031

297,907

Purchase of property, plant and equipment(9,739)(16,360)

Disposal of property, plant and equipment

165

77

Purchase of intangible assets(2,227)(2,331)

Capitalized development costs (note 17)(76,617)(86,341)–(1,000)Cash flows from investing activities

Earn out settlement related to acquisitions
Repayments/(investments) for long-term loans/debt instruments

3,000(25,778)

Settlement of financial instruments(674)(5,775)Interest received

1,900

384

(84,192)(137,124)(74,405)

Net cash used in investing activities
Cash flows from financing activities
Dividend paid (note 28)(88,273)

Disposal of treasury shares

34,713–

Proceeds from borrowings

147,087405,294

Repayments of borrowings(311,893)(321,902)

Proceeds from issuance of bond

220,840–

Repayment of bond

(200,192)(180,723)

Payment of lease liabilities (note 13)(15,372)(15,992)

Interest payments(22,626)(22,581)Settlement of financial instruments

3,318

6,104

Payment of other financing costs(3,226)(3,767)(235,624)(207,972)

Net cash used in financing activities
Effect of exchange rate changes

5,747(2,210)Net increase/(decrease) in cash and cash equivalents in the year

16,962(49,399)

Cash and cash equivalents at the beginning of the year

89,923

139,322

Cash and cash equivalents at the end of the year

106,885

89,923

Notes on pages 209 to 259 are an integral part of these consolidated financial statements.

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Temenos AG Annual Report and Accounts 2023

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Sharecapital
USD 000

TreasurysharesUSD 000

Share
premium andother reserves(note 25)
USD 000

252,467(464,778)(218,330)(175,387)

1,080,816

474,788–––

11,105

14,23425,339252,467(464,778)(218,330)(164,282)

1,095,050

500,127

Profit for the year

–

–

–

–

114,420

114,420

Other comprehensive income for the year,
net of tax

–

–

–

(9,259)1,941(7,318)

Total comprehensive income

–

–

–

(9,259)116,361

107,102

Dividend paid (note 28)

–

–

–

–

(74,405)(74,405)

Hedging gain transferred to deferred
revenues (note 26)

–

–

–

(7,619)–(7,619)

Cost of share options (note 27)––

52,701––

52,701

Exercise of share-based paymenttransactions (note 25)

(999)

–

–

–

Balance at 1 January 2022, as reported
Impact of deferred tax liability adjustment*
Balance at 1 January 2022

Other equity(note 26)
USD 000

Retainedearnings
USD 000

Total
USD 000

999–

Tax impact on share-based payments(note 21)

–

–

–

–

486

486

Costs associated with equity transactions

–

–

(9)

–

–

(9)

999

–

51,693(16,878)

42,442

78,256

253,466(464,778)(166,637)(181,160)

1,137,492

578,383

Profit for the year

–

–

–

–

134,677

134,677

Other comprehensive income for the year,
net of tax

–

–

–

(25,983)(5,063)(31,046)

Total comprehensive income

–

–

–

(25,983)

129,614103,631

Dividend paid (note 28)

–

–

–

–

(88,273)(88,273)

Hedging loss transferred to deferred
revenues (note 26)

–

–

–

1,120

–

1,120

Cost of share options (note 27)––

52,914––52,914

1,298

3,742

(6,505)––(1,465)

Balance at 31 December 2022

Exercise/cash settlement of share-based
payments (note 25)
Tax impact on items taken to equity(note 21)

–

–

–

–

972

972

Disposal of treasury shares–

59,030(24,317)––34,713

Costs associated with equity transactions

–

–

(15)

–

–

(15)

1,298

62,772

22,077(24,863)

42,313

103,597

254,764(402,006)(144,560)(206,023)

1,179,805

681,980

Balance at 31 December 2023
* Refer to note 2.26.

Notes on pages 209 to 259 are an integral part of these consolidated financial statements.

Temenos AG Annual Report and Accounts 2023

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209

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 December 2023
1. General information

Temenos AG (the “Company”) was incorporated in Glarus, Switzerland, on 7 June 2001 as a stock corporation (Aktiengesellschaft).
Since 26 June 2001, the shares of Temenos AG have been publicly traded on the SIX Swiss Exchange. The registered office islocated at 2 Rue de l’Ecole-de-Chimie, 1205 Geneva, Switzerland.
The Company and its subsidiaries (the “Temenos Group” or the “Group”) are engaged in the development, marketing and sale ofintegrated banking software systems. The Group is also involved in supporting the implementation of the systems at various
customer locations around the world and the implementation and running of systems in cloud environments, as well as in offering
help desk support services to existing users of Temenos software systems. The customer base consists of mostly banking andother financial services institutions.
These consolidated financial statements have been approved for issue by the Board of Directors on 14 April 2024.

2. Accounting policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS)
Accounting Standards. The consolidated financial statements have been prepared under the historical cost convention, except
where IFRS explicitly requires use of other measurement principles.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also
requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving ahigher degree of judgment or complexity, or areas where assumptions and estimates are material to the consolidated financial
statements, are disclosed in note 4.
Standards, amendments and interpretations relevant to the Group’s operation and adopted by the Group as at 1 January 2023
Amendments to IAS 1 ‘Presentation of Financial Statements’ and IFRS Practice Statement 2 ‘Making Materiality Judgements’,effective for accounting periods beginning on or after 1 January 2023. The amendments replace the requirement for entities todisclose their “significant” accounting policies with a requirement to disclose their “material” accounting policies and provide
guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures. The Group has
reviewed its accounting policies to ensure they are in line with the amendments with no impact on recognition, measurement andpresentation of any items on the Group’s financial statements.
Amendments to IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’, effective for accounting periods beginningon or after 1 January 2023. The amendments clarify how to distinguish between changes in accounting policies and accounting
estimates. These amendments have not had any impact on the Group’s financial statements.
Amendments to IAS 12 ‘Income Taxes’, effective for accounting periods beginning on or after 1 January 2023. The amendments
require the recognition of deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable anddeductible temporary differences. These amendments have not had any impact on the Group’s financial statements.
International Tax Reform – Pillar Two Model Rules (Amendments to IAS 12), effective immediately from issue in May 2023. Under
the amendments, an entity shall disclose information about its exposure to Pillar Two income taxes at the end of the reporting
period. The amendments provide a temporary mandatory exemption from deferred tax accounting for the top-up tax, which iseffective immediately. The expected impact of these amendments are disclosed in note 21.
Standards, amendments and interpretations relevant to the Group’s operation that are not yet effective
The following amendments have been published and are mandatory for the Group’s accounting periods beginning on or after
1 January 2024. Unless otherwise indicated, these publications are not expected to have any material impact on the Group’s
financial statements:n

Amendments to IAS 1 ‘Presentation of Financial Statements’, effective for accounting periods beginning on or after 1 January 2024.
The amendments clarify that liabilities are classified as either current or non-current depending on the rights that exist at theend of the reporting period. In addition, a requirement has been introduced to require disclosure when a liability arising from aloan agreement is classified as non-current and the entity’s right to defer settlement is contingent on compliance with future
covenants within 12 months.

nAmendments to IFRS 16 ‘Leases’, effective for accounting periods beginning on or after 1 January 2024. The amendments specify
the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure
the seller-lessee does not recognize any amount of the gain or loss that relates to the right of use it retains.

n

Amendments to IAS 7 ‘Statement of Cash Flows’ and IFRS 7 ‘Financial Instruments: Disclosures’, effective for accounting periods
beginning on or after 1 January 2024. The amendments clarify the characteristics of supplier finance arrangements and require
additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users offinancial statements in understanding the effects of supplier finance arrangements on an entity’s liabilities, cash flows andexposure to liquidity risk. The Group does not have any such arrangements in place.

nAmendments to IAS 21 ‘The Effects of Changes in Foreign Exchange Rates’, effective for accounting periods beginning on or after
1 January 2025. The amendments add requirements to help entities to determine whether a currency is exchangeable intoanother currency, and the spot exchange rate to use when it is not.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
2. Accounting policies continued
2.2 Basis of consolidation

The consolidated financial statements include the financial statements of the Company as well as its subsidiaries.
Subsidiaries
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over theentity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated fromthe date when control ceases.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The considerationtransferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity
interest issued by the Group. The consideration transferred also includes the fair value of any asset or liability resulting froma contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired andliabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition
date. On an acquisition-by-acquisition basis, the Group recognizes any non-controlling interest in the acquiree either at fair value
or at the non-controlling interest’s proportionate share of the acquiree’s net assets.
Goodwill is measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest
over the fair value of the identifiable assets acquired and liabilities and contingent liabilities assumed. If the consideration is lower
than the fair value of the net assets acquired, the difference is recognized in profit or loss.
Any contingent consideration is recognized at fair value at the acquisition date. Subsequent changes to the fair value of thecontingent consideration is recognized in profit or loss in accordance with IFRS 9 ‘Financial Instruments’. Contingent considerationthat is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.
Changes in ownership interests in subsidiaries without loss of control
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions.
The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets
is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
Disposal of subsidiaries
When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value, with the change incarrying amount recognized in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently
accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognizedin other comprehensive income are reclassified to profit or loss.

2.3 Foreign currency

Items included in the financial statements of each of the Group’s subsidiaries are measured using the currency of the primaryeconomic environment in which the entity operates (the “functional currency”). The consolidated financial statements arepresented in US dollars, which is the currency in which the majority of the Group’s transactions are denominated. The Company’sfunctional currency is Swiss francs.
Transactions in foreign currencies are translated into the respective functional currencies using the exchange rates prevailing at
the dates of the transactions. When the Group pays or receives consideration in advance, the date of the transaction is the datewhen the consideration is realized. Monetary assets and liabilities denominated in foreign currencies are translated into therespective entity’s currency at the exchange rate at the reporting date.
Foreign exchange differences are recognized in the profit or loss within net finance costs, except when deferred in othercomprehensive income as qualifying cash flow hedges or qualifying net investment hedges.
The financial statements of the Group’s subsidiaries (none of which has the currency of a hyperinflationary economy) aretranslated into the Group’s presentation currency as follows:nassets and liabilities, including goodwill and fair value adjustment on acquisition, are translated using the closing rate at the dateof the reporting date;n

income and expenses for each statement presenting profit or loss and other comprehensive income are translated on a monthly
basis at the average exchange rates of the month (unless the average is not a reasonable approximation of the cumulative effectof the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of
the transactions); andnall resulting exchange differences are recognized in other comprehensive income.

When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognized in profit
or loss as part of the gain or loss on sale.

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211

2. Accounting policies continued
2.3 Foreign currency continued

Gains or losses resulting from long-term intragroup balances for which settlement is neither planned nor likely to occur in theforeseeable future are treated as a net investment in foreign operations (i.e. quasi-equity loans). The gains or losses recognized in
the separate financial statements of the subsidiary are reclassified as cumulative translation adjustment to other comprehensive
income in the Group’s consolidated financial statements.
Goodwill and fair value adjustments arising on acquisition are considered as assets and liabilities of the acquired entity. They arerecognized in the functional currency of the acquired entity.

2.4 Cash and cash equivalents

Cash and cash equivalents include cash on hand, bank current accounts, time deposits and short-term highly liquid investmentswith original maturities of three months or less that are readily convertible to known amounts of cash and subject to negligible
risks of change in value.
As the Group’s objective and business model are to hold this asset to collect the contractual cash flows, cash and cash
equivalents are carried at amortized cost.
Cash that does not meet the definition of “cash and cash equivalents” as per IAS 7 ‘Statement of Cash Flows’ is reclassified toother receivables and subject to impairment review in accordance with IFRS 9.

2.5 Trade and other receivables

Trade receivables and contract assets
Trade receivables are recognized initially at the transaction price or at fair value if they contain significant financing components.
They are subsequently measured at amortized cost using the effective interest method as the Group’s objective and businessmodel are to hold this asset to collect the contractual cash flows.
Contract assets represent consideration which is conditional upon factors other than passage of time.
The Group applies the IFRS 9 simplified approach to measure expected credit losses which uses the lifetime expected credit loss
allowance for all trade receivables including trade receivables with significant financing components and contract assets. The
Group exercises judgment in determining the expected credit loss allowance. In this judgment, the Group identifies the default rateby analyzing historical experience with credit losses, considering it to represent a reasonable approximation for future expected
defaults, and applies to current receivables. The Group also takes into consideration forward-looking factors, including changes in
the overall economic environment, changes in regulation and customer country credit risk, and if material, reflects these in the
expected credit loss allowance.
A credit impairment is recognized when there is objective evidence that the Group will not be able to collect all amounts due
according to the original terms of the receivable. Evidence of impairment includes significant financial difficulties of the debtor,
probability that the debtor will enter bankruptcy or financial reorganization.
The carrying amount of the asset is either reduced through the use of an allowance account or directly written off when there is
no expectation of future recovery. The expense from the expected credit loss allowance as well as from credit impaired debtors is
recognized in the profit or loss within “Sales and marketing”. Subsequent recoveries are credited in the same account previously
used to recognize the impairment charge.
Non-current trade receivables represent balances to be recovered after 12 months.
Other receivables
Other receivables include other receivables (financial assets) and other assets (non-financial assets).
Other receivables (financial assets) represent receivables raised from transactions outside the ordinary activities of the Group.
As the Group’s objective and business model are to hold this type of asset to collect the contractual cash flows, they are initiallymeasured at fair value and subsequently measured at amortized cost. Interest income, foreign exchange gain or loss, andimpairment are recognized in the profit or loss within “Finance costs – net”.
When the impact of applying the effective interest method is not significant, the gross carrying amount equals the contractual
amount or the fair value at initial recognition.
Balances to be collected after 12 months after the reporting period are presented as non-current.
The Group applies the same impairment policy that is used to measure the expected credit loss for its trade receivables.
Other assets (non-financial assets) primarily represent prepayments and contract costs according to IFRS 15. Contract costs
expected to be recognized in profit or loss after more than 12 months are reported as non-current assets. All other amounts
are reported as current assets.

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2. Accounting policies continued
2.6 Property, plant and equipment

Property, plant and equipment is stated at historical cost less accumulated depreciation. Historical cost includes expenditure thatis directly attributable to the acquisition of the item. Depreciation on assets is calculated using the straight-line method to allocate
their cost over their estimated useful lives, as follows (in years):
Buildings

50

Furniture and fixtures

10

Office equipment

5

IT equipment

4

Vehicles4

Leasehold improvements are depreciated over the shorter of the remaining lease term and useful life (ten years).
Asset residual values and useful lives are reviewed and adjusted if necessary at each reporting date. An asset’s carrying amount iswritten down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.
Repairs and maintenance costs are charged to profit or loss as incurred.
Gains or losses on disposals are determined by comparing the consideration received or receivable with the carrying amountand are recognized within “General and administrative” in the profit or loss unless otherwise specified.

2.7 Intangible assets

Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred and the amount of
any non-controlling interest in the acquiree over the fair value of the identifiable assets acquired and liabilities and contingent
liabilities assumed. Goodwill on acquisitions of subsidiaries is included in intangible assets.
Goodwill is tested annually for impairment, or more frequently if events or changes in circumstances indicate a potential impairment.
The carrying amount is allocated to the cash-generating unit (CGU) that is expected to benefit from the synergies of the businesscombination. The CGU to which the goodwill is allocated represents the lowest level at which the goodwill is monitored for internalmanagement purposes. The carrying value of the CGU is then compared to the higher of its fair value less costs of disposal and its
value in use. Any impairment attributed to goodwill is recognized immediately as an expense and is not subsequently reversed.
Computer software
Software licenses separately acquired are capitalized when the Group can demonstrate that:nit controls the asset;n

it is probable that the expected future economic benefits that are attributable to the asset will flow to the Group; andnthe cost of the asset can be reliably measured.

The cost of the asset comprises its purchase price (including non-refundable purchase taxes) and any directly attributable costsof preparing the asset for its intended use. The cost of the asset is amortized using the straight-line method over its estimateduseful life.
Computer software separately acquired is amortized over the shorter of the license term and four years, except for software
considered to be a significant technology which is amortized over seven years.
Software technologies acquired through business combinations are initially measured at fair value and then amortized using thestraight-line method over their estimated useful lives. Currently reported technologies acquired through business combination
have useful lives between five and eight years.
Customer-related intangible asset
Customer-related intangible assets are assets acquired through business combinations. They are initially measured at fair value
and then amortized using the straight-line method over their estimated useful lives. The assessment of useful life is set out at thetime of acquisition, specific for each acquisition. Currently reported customer related intangible assets are amortized over a period
between five and sixteen years.

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2. Accounting policies continued
2.7 Intangible assets continued

Internally-generated software development
The Group follows a strategy of investing a substantial part of its revenue in research and development which is directed towards
the enhancement of its product platforms.
The costs associated with the development of new or substantially improved products or modules are capitalized when thefollowing criteria are met:ntechnical feasibility to complete the development;nmanagement intent and ability to complete the product and use or sell it;nthe likelihood of success is probable;navailability of technical and financial resources to complete the development phase;ncosts can be reliably measured; andnprobable future economic benefits can be demonstrated.

Directly attributable development costs that are capitalized include employee costs and an appropriate portion of relevant overheads.
Directly attributable development costs previously recognized as an expense are not recognized as an asset in a subsequent period.
Development expenditures that are not directly attributable are recognized as an expense when incurred.
Internally generated software development costs are amortized using the straight-line method after the product is available for
distribution. In previous years, development costs related to architecture developments were amortized over a five-year period
and development costs related to functional developments were amortized over a three-year period.
The Group assesses the need to revisit its estimated useful lives annually in line with IFRS and would adjust the estimated useful
lives in case it identifies shifts in its business model or other internal or external factors impacting this estimate. Given the stabilityof the Group’s business model in the past, being predominantly focused on term licenses, the distinction between functional vsarchitectural was deemed to be the appropriate driving factor in determining useful lives for its capitalized development costs.
However, in recent years, the Group’s business model has been shifting towards SaaS and Cloud which impacts the way software
products are developed, deployed and maintained. As a result, the Group has undertaken a review of the useful economic lives of
its internally generated software development assets and concluded that Product business segment would better reflect theGroup’s expected usage of the related development assets.
Following this review, the Group has amended its estimate of useful economic lives for certain of its capitalized development
assets effective from 1 January 2023. Internally generated software development costs are now amortized on a straight-line basis
over three to seven years (previously three to five years) depending on Product business segment. The impact of this amendment
on assets capitalized as at 31 December 2022 was USD 19.2 million in the year ended 31 December 2023.

2.8 Impairment of non-financial assets

Assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment. Assets that are
subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds
its recoverable amount, which is the higher of an asset’s fair value less costs to sell and value in use. For the purpose of assessing
impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows. Non-financial assets
other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

2.9 Taxation

The tax expense for the period comprises current and deferred tax. Current income tax and deferred income tax is recognizedunder IAS 12 ‘Income Tax’ and IFRIC 23 ‘Uncertainty over Income Tax Treatments’.
Tax is recognized in the profit or loss, except to the extent that it relates to items recognized in Other comprehensive income
or directly in equity. In this case, the tax is also recognized in Other comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the reporting datein the countries where the Group’s subsidiaries and associates operate and generate taxable income. Management periodicallyevaluates positions taken or expected to be taken in tax returns with respect to situations in which applicable tax regulation
is subject to interpretation or uncertainty. It establishes provisions for uncertain tax positions where appropriate on the basisof amounts expected to be paid to the tax authorities, taking into account any discussions with these authorities.
Deferred tax is recognized on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts
in the Group’s financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of anasset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor
taxable profit or loss and does not give rise to equal taxable and deductible temporary differences. Deferred income tax is determinedusing tax rates (and laws) that have been enacted or substantively enacted by the reporting date and are expected to apply when therelated deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized to the extent that it is probable that future taxable profit will be available against which
the temporary differences can be utilized.

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2. Accounting policies continued
2.9 Taxation continued

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where thetiming of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will
not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
current tax liabilities, and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation
authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
The Group incurs withholding tax in various jurisdictions. An assessment is made to assess the ability to recover these withholding
taxes against the normal tax liabilities occurring within the Group, and a provision is made to the extent that withholding tax is
not recoverable.

2.10 Provisions

Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is more likely
than not that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made.
Where the Group expects a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized
as a separate asset but only when the reimbursement is virtually certain.
When the effect of the time value is material, provisions are measured at the present value of the expenditures expected to berequired to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and therisks specific to the obligation. The increase in the provision due to passage of time is recognized as an interest expense within“Finance costs”.
A provision for restructuring is recognized when the Group has approved a detailed and formal restructuring plan and therestructuring has either commenced or has been announced to those affected by it.

2.11 Borrowings

Borrowings are initially recognized at fair value, net of transaction costs incurred, and they are subsequently measured at amortizedcost. Effective interest costs are recognized within “Finance costs” in the profit or loss over the period of the relevant instrument.
Fees directly attributable to the establishment of a financing facility are recognized as a prepayment for liquidity services and they
are subsequently amortized within “Finance costs” over the life of the instrument.
Accrued interest for loans under a revolving facility and accrued commitment fees for the unutilized portion of credit facility arereported as other payables within trade and other payables in the Statement of financial position and within “Finance costs”
in the Statement of profit or loss.
Roll-over of a loan under the same revolving facility agreement is reported net in the statement of cash flows.
Borrowings are classified as non-current liabilities unless the Group does not have the right at the end of the period to defer
the settlement for at least 12 months after the reporting period.

2.12 Leases

Identification of a lease
The Group assesses whether a contract is or contains a lease based on the definition of a lease under IFRS 16. Under IFRS 16,
a contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of timein exchange for consideration.
To apply this definition the Group assesses whether the contract meets these evaluations:nthe contract contains an identified asset that is either explicitly specified or implicitly specified at the time that the asset ismade available for use by the Group;nthe Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout theperiod of use; andnthe Group has the right to direct the use of the identified asset throughout the period of use or the Group has the right tooperate the asset throughout the period of use, without the supplier having the right to change those operating instructions.

The Group has elected to separate the non-lease components and they are accounted as an expense in the profit or loss.
If the Group acts as an intermediate lessor, it classifies the sub-lease either as operating or a finance lease based on the leaseterm and the right-of-use-asset being sub-leased. If the sub-lease is classified as a finance lease the future discounted cash flowis recognized as a receivable with a corresponding decrease in the right-of-use asset.
Recognition and measurement of a lease
At the lease commencement date, the Group recognizes a right-of-use asset and a lease liability on the balance sheet. Assets
and liabilities arising from a lease are initially measured on a present value basis.
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with thediscount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable,
in which case the Group uses the incremental borrowing rate which consists of the risk-free rate of currency of the lease plus thepremium arising from the Group’s credit risk. Lease payments included in the measurement comprise fixed payments, variable
lease payments that depend on an index or a rate and amounts to be paid under a residual value guarantee (if any).

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2. Accounting policies continued
2.12 Leases continued

Recognition and measurement of a lease continued
The right-of-use asset is initially measured at cost, which is made up of the initial measurement of the lease liability, any initial
direct costs incurred by the Group, an estimate of any costs to restore the asset to the condition required at the end of the leaseand any lease payments made in advance of the lease commencement date (net of any incentives received).
The Group depreciates the right-of-use assets on a straight-line basis over the lease term.
The lease term determined at the commencement of lease represents the non-cancellable period of a lease and includes theperiod covered by an option to extend, where exercising such option is reasonably certain, and option to terminate, where notexercising such option is reasonably certain.
Leases of low-value and short-term
Short-term leases are leases with a lease term of 12 months or less. The Group defines assets with an estimated market value of
USD 5 thousand when new as low-value assets. The payments in relation to these leases are recognized as an expense in profit
or loss on a straight-line basis over the lease term and treated as an outflow from operating activities in the statement of cash flows.
Remeasurement of a lease
The lease liability and right-of-use assets initially recognized are remeasured on occurrence of the below events:nchange in lease term (renewal or termination options taken into consideration) – remeasured using discount rate at the timeof remeasurement; andnchange in index rate affecting future lease payments – discount rate is unchanged (initial recognition).

2.13 Share capital

Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares are reported as a reduction of the share premium (note 25).
Where any subsidiary of the Group purchases the Company’s shares (treasury shares), the consideration paid (including any
directly attributable incremental costs) is presented as a deduction from equity. Where such shares are subsequently sold orreissued, any consideration received (net of any directly attributable incremental transaction costs and the related income tax
effects) is recognized as an increase in equity and the resulting gains or losses are presented within share premium (note 25).

2.14 Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business fromsuppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest
method. The related interest expense is recognized in profit or loss within “Finance costs”.

2.15 Employee share-based payments

The Group operates a number of equity-settled, share-based compensation plans, under which the entity receives services from
employees as consideration for equity instruments of the Group. The instruments are in the form of restricted shares,
performance shares or stock appreciation rights (SARs). The fair value of employee services received in exchange for the grant of
the instruments is recognized as an expense. The total amount to be expensed is determined by reference to the fair value of the
instrument granted:
nincluding any market performance conditions; andnexcluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales growthtargets and remaining an employee of the entity over a specified time period).

Non-market vesting conditions are included in assumptions about the number of instruments that are expected to vest. The total
expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are to besatisfied. At the end of each reporting period, the Group revises its estimates of the number of instruments that are expected tovest based on the non-market vesting conditions. It recognizes the impact of the revision to original estimates, if any, in profit orloss, with a corresponding adjustment to equity.
When the share instruments vest or SARs are exercised, the Group either issues new shares or may use treasury shares. The
consideration received net of any directly attributable transaction costs are credited to share capital (nominal value) and sharepremium and capital reserves.

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2. Accounting policies continued
2.16 Employee benefits

Post-employment obligations
The Group operates various pensions and post-employment benefit schemes including both defined benefit and defined
contribution plans.
Defined contribution plan is a scheme under which the Group pays fixed contributions into a separate entity. The Group has nolegal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay the benefits relating
to the employee’s service in the current and prior periods. The relevant contributions are recognized as personnel costs when they
are due. On realization of the liability, the Group has no further payment obligations. Prepaid contributions are recognized as an
asset within trade and other receivables to the extent that a cash refund or a reduction in the future payments is available. Unpaid
contributions are reported within trade and other payables.
Defined benefit plan is a scheme that is not a defined contribution plan (e.g. pension plan, gratuities). It defines the benefit payable
to the employee after the completion of their employment, principally dependent on age, years of service and remuneration.
The liability recognized in respect of such plans is the present value of the defined benefit obligations at the end of the reporting
period less the fair value of any plan assets when the plan is funded. The defined benefit obligations are calculated annually byindependent actuaries using the projected unit credit method. The present value of the defined benefit obligations is determinedby discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in
the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related pension
liability. For currencies where there is no deep market in such high-quality corporate bonds, the market yields on government
bonds that are consistent with the currency and the estimated terms of the post-employment benefit obligations shall be used.
When a surplus in a plan exists, the Group measures the net benefit asset at the lower of the surplus and the present value of the
future economic benefits available to the Group in the form of a reduction in future contributions or a cash refund.
Actuarial gains and losses arising from experience and demographic adjustments as well as changes in financial assumptions arecharged or credited to equity in other comprehensive income in the period in which they arise. Past-service costs are recognized
immediately in profit or loss.
Termination benefits
Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or wheneveran employee accepts voluntary redundancy in exchange for these benefits. The Group recognizes termination benefits at the earlierof the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity recognizes
costs for a restructuring that is within IAS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’ and involves the paymentof termination benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured
based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of thereporting period are discounted to their present value.

2.17 Revenue recognition

The Group derives revenue from the following key sources:
Software license
Software license revenue represents all fees earned from granting customers a right-to-use license of the Group’s software, either
through an initial license or through the purchase of additional modules or user rights. For software license arrangements that do
not require significant modification or customization of the underlying software, revenue is recognized at a point in time when thesoftware is made available to the customer and the performance obligation is satisfied.
Software license revenue includes software sold either on a term basis, a perpetual basis or a subscription basis. Softwaredevelopments are included within this revenue line and are recognized when they meet the same criteria as the licensed software.
Subscription revenue represents all fees earned from granting customers a right-to-use license of the Group’s software billed on a
subscription basis over the contract term. Revenue recognized exceeding the billed amount is recognized as an unbilled receivable
within “Trade and other receivables” in the Statement of financial position.
Revenue on subscription contracts is recognized at a point-in-time when the software is made available to the customer and theperformance obligation is satisfied. Where applicable, maintenance included within the bundled subscription fee is allocatedbased upon the established standalone selling price and recognized rateably on a straight-line basis over the term of thearrangement as the performance obligation is satisfied.
Subscriptions accounting policy reflects revenue arising from contracts where a customer obtains a right-to-use software license, andtypically also ongoing maintenance of that software, for a fixed term which may vary depending on the facts and circumstances. The
associated consideration payable to Temenos (which in most cases would represent a single fee combining license and maintenance)is due over time, in contrast to a term license where a majority of the license cash flows are typically expected to be earned upfront orwithin a short period after delivering the license (typically within 12 months). Subscriptions contracts may also include payments whichsignificantly vary over time, with examples including entitlement changes over a term or general variability in payment terms.
Subscription contracts are assessed to determine whether these contain a significant financing component. Where this isdetermined to be the case, the significant financing component is recognized over the term of the contract and disclosed
separately from revenue from contracts with customers, within “Finance Income” in the statement of profit or loss.
In instances of software license renewals with existing customers where the licensed software is consistent with that initiallypurchased and delivered to the customer, license revenue is recognized at a point-in-time when the renewal is signed and an
enforceable contract deemed to exist.

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2. Accounting policies continued
2.17 Revenue recognition continued

SaaS
Software as a Service (SaaS) revenue is earned through the use of the Group’s software to provide a service to the customer,
whereby the customer does not have the ability to take possession of the software under a license arrangement without significant
penalty. This includes the support and development of the software as well as the hosting infrastructure. This revenue stream also
includes hosting services for the Group’s license customers, who choose to have Temenos host their copy of the software. SaaSand hosting revenues are recognized over-time, commencing from the point the service is made available to the customer.
The Group has several contracts for which the customer has purchased both a right-to-use software license and hosting services.
In instances where the customer has the contractual right to take possession of the software at any time during the contract term
without significant penalty and could utilize another vendor to host the software during the contract term, the Group considers
that the software license and hosting services are separable performance obligations and allocates revenue accordingly. Where
this is not the case, the contract is determined to be a SaaS arrangement in its entirety.
The Group has entered into several arrangements with a fixed fee for a minimum amount of usage and variable fee for overages.
The Group has recognized revenue for the fixed fee over the contract term and has applied the variable consideration guidance
under IFRS 15 to determine whether the variable fee should be allocated to the period to which it relates. In situations where thevariable consideration conditions were not met, the overages were estimated and recognized over the term of the contract.
Customers are typically invoiced annually in advance for SaaS contracts.
Maintenance
Software maintenance is included in most software license arrangements. Within term license arrangements, maintenance is
priced as a percentage of the initial software license fees. Within subscription license arrangements, license and maintenance fees
are typically combined as a single fee, with maintenance revenue allocated based upon the established standalone selling price.
The standard maintenance offering is a stand-ready obligation to provide technical support and unspecified updates, upgrades
and enhancements on a when-and-if available basis. The customer simultaneously receives and consumes the benefits of thesemaintenance services as performed; hence, revenue is recognized rateably on a straight-line basis over the term of thearrangement as the performance obligation is satisfied.
Services
Services revenue represents income from consulting, training and implementation services sold to customers under services
contracts. Fixed-price arrangements are accounted for over time on a percentage-of-completion basis as determined by thepercentage of project costs incurred to date compared to the estimated total project costs. For time and material-based
contracts, revenue is recognized as services are rendered.
Professional Services projects are typically invoiced based on set project milestones with an initial portion invoiced upon contract signature.
IFRS 15 requires estimates and judgments to be made and consistently applied by the Group in accounting for the revenue fromcontracts with customers. The areas that require estimates and judgments by the Group are detailed below:
Identification of contract
The Group enters multiple contracts with a customer and will assess these for the need to combine if the contracts are negotiatedin and around the same time, are for the same economic purpose or are dependent upon one another.
Initial/master agreements often have additional purchases, addendum or terms modified throughout their term. At each point a
contract is modified, the Group assesses the contract under the standard to determine if modifications are treated as a contract
modification or a separate contract.
The Group makes an assessment initially to determine if the customer has the ability and intent to pay the consideration in
the contract. In instances where the Group determines that the customer does not meet either of these criteria, it is deemed thata contract does not exist and no revenue is recognized until such a time as the customer has both the ability and intent to pay,or the Group has received non-refundable payment.
Determining the transaction priceJudgment is required in assessing the total consideration that will be paid in exchange for the satisfied performance obligations.
This includes not only assessing the variable amounts which may be included in the consideration but also assessing if any
concessions, discounts or other variable factors may reduce the fixed fees in the contract, applying IFRS 15 variable consideration
rules where required. Temenos assesses internal historical experiences as well as external factors in making the necessary estimates.

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2. Accounting policies continued
2.17 Revenue recognition continued

Services continued
Allocating the transaction price to the performance obligation
The Group allocates consideration to each performance obligation in a contract on a relative standalone selling price (SSP) basis,
maximizing the use of observable inputs to do so.
The exercise of determining the appropriate method with which to estimate the SSP for each performance obligation requires
judgment. The Group utilizes available data points such as renewal rates, relevant historical transactions, available market dataand cost inputs to establish the SSP for each revenue stream. The pricing of software licenses is highly variable and therefore theresidual approach is used to allocate the transaction price to the software license performance obligation.
Where identified within a contract, the SSP of material rights is determined by factoring in the likelihood of the customer exercising
the option by utilizing relevant historical data and considering the nature of the material right.
Incremental costs of obtaining customer contracts
Incremental costs to obtain a contract are made up of sales commissions earned by the Group’s sales teams which can be directly
linked to an individual sale, primarily relating to revenues earned from maintenance and SaaS. The asset is included within “Tradeand other receivables” in the statement of financial position.
The asset is amortized over the life of the contract committed for by the customer on a straight-line basis. The asset is also
periodically reviewed for impairment.
Costs to fulfill a contract
The costs to fulfill a contract with a customer that are associated with customization developments are deferred on the Balance
sheet as work-in-progress until the development performance obligation is met, at which point the costs are recognized in linewith the revenue. The costs to fulfill a contract associated with set up of SaaS contracts are deferred on the Balance sheet until
the go-live milestone, and amortized over the period from the go-live date until the end of the committed contract period withthe customer in line with the revenue.
Contract balances – assets and receivables
The Group classifies the right to consideration in exchange for products or services transferred to a customer as either areceivable or a contract asset. A receivable is a right to consideration that is unconditional on factors other than passage of time
whereas a contract asset is a right to consideration that is conditional upon other factors.
Contract assets represent revenue where the right to consideration is subject to future performance being satisfied suchas the completion of milestones on services contracts or satisfaction of maintenance for future periods.
Deferred revenue
Deferred revenue (referred to as “contract liabilities” as per IFRS 15) represents prepayments from customers for wholly‑unsatisfied
or partially-satisfied performance obligations mainly in relation to annual in advanced billing on maintenance and SaaS contracts.

2.18 Earnings per share

Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company by the weighted
average number of ordinary shares outstanding during the year.
Diluted earnings per share are determined by dividing the profit or loss attributable to equity holders of the Company, adjusted forthe effect that would result from the conversion of dilutive ordinary shares, by the weighted average number of ordinary sharesplus the weighted average of number of ordinary shares that would be issued on the conversion of all the dilutive potential
ordinary shares.

2.19 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision
Maker (CODM). The Chief Operating Decision Maker, who is responsible for allocating resources and assessing performanceof the operating segments, has been identified as the Group’s Chief Executive Officer (CEO).

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2. Accounting policies continued
2.20 Other financial assets

Other financial assets include derivatives held with positive value and convertible notes.
Other financial assets are initially recorded at fair value. Any transaction costs are expensed in the Statement of profit or loss.
Regular-way purchases and sales of financial assets are recognized on the trade-date, being the date on which the Group commits
to purchase or sell the asset. Financial assets are de-recognized when the rights to receive cash flows from the financial instruments
have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.
Derivative assets held for trading
A derivative is held-for-trading if it is:nacquired or incurred principally for the purpose of selling or repurchasing it in the near term; and/orn

not designated and effective hedging instrument.

While the objective of holding these assets is to provide effective economic hedges under the Group’s risk management strategy,
these derivatives are not designated as hedging instruments according to IFRS 9 since all relevant conditions are not met.
Therefore, subsequent changes in the fair value are immediately recognized within “Finance costs – net”. Related cash flows
are reported as cash flows from investing activities.
Derivatives held-for-trading are reported as current assets.
Derivative assets used for hedging
Derivative assets used for hedging are subsequently measured at fair value with changes accounted for according to the provisions
for hedge accounting under IFRS 9. They are reported as non-current assets when they are expected to be settled more than 12
months after the reporting period.
Convertible notes
Convertible notes are subsequently measured at fair value through profit or loss. They are reported as non-current assets when the
final redemption date is more than 12 months after the reporting period and the Group intends to hold the asset until maturity.

2.21 Other financial liabilities

Other financial liabilities include derivatives held with negative value.
At initial recognition, other financial liabilities are measured at fair value. Any transaction costs are expensed in the Statementof profit or loss.
Derivative liabilities held-for-trading
A derivative is held-for-trading if it is:nacquired or incurred principally for the purpose of selling or repurchasing it in the near term; and/orn

not designated and effective hedging instrument.

While the objective of holding these liabilities is to provide effective economic hedges under the Group’s risk management
strategy, these derivatives are not designated as hedging instruments according to IFRS 9 since all relevant conditions are not met.
Therefore, subsequent changes in the fair value are immediately recognized within “Finance costs – net”. Related cash flows arereported as cash flows from investing activities.
Derivatives held for trading are reported as current liabilities.
Derivative liabilities used for hedging
Derivative liabilities used for hedging are subsequently measured at fair value with changes accounted according to the provisions
for hedge accounting under IFRS 9. They are reported as non-current liabilities when they are expected to be settled more than 12
months after the reporting period.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
2. Accounting policies continued
2.22 Hedging activities

At inception of the hedge relationship, the Group documents the economic relationship between the hedging instrument and thehedged item, the risk management objective and strategy as well as the methodology to assess the hedge effectiveness requirements.
The Group does not currently apply fair value hedge designations.
Cash flow hedge and hedge of a net investment
The effective portion of change in fair value of the hedging instrument is recognized in other comprehensive income. The ineffective
portion is immediately recognized in profit or loss.
Accumulated amounts deferred in other comprehensive income are reclassified to profit or loss in the periods when the hedged
item affects profit or loss to the extent that it does not result in the recognition of a non-financial asset or a non-financial liability(e.g. fixed assets, deferred revenue), in which case the gains and losses are removed to the initial cost of the asset or the carrying
amount of the liability.
When the Group separates the time value of an option, the forward element of a forward contract or the currency basis spreadof a swap instrument from the designation of the hedging instrument, the movement in fair value of these elements is recognizedin other comprehensive income as “cost of hedging” to the extent it relates to the hedge item. It is subsequently recognized in
profit or loss or included in the initial cost or carrying amount of a non-financial asset or liability either over the period of thehedging relationship for a “time-period related” hedge or when the hedge item occurs for a “transaction-related” hedge. The fairvalue change of any unaligned portion of the time value of an option is recognized in profit or loss.
Hedge accounting is discontinued when the hedging instrument expires, or is sold or terminated, or when the risk management
objective is no longer met. The amount accumulated in other comprehensive income remains in equity until the hedge item
occurs. If there is no longer expectation that the forecast transaction will realize, the amount is immediately reclassified to profit
or loss.
Hedge effectiveness is tested every quarter or upon a significant change in the assumptions. The existence of an economic
relationship between the hedge item and the hedging instrument is assessed using either the “critical term match” method or the“dollar offset” method when the terms of the hedging instrument do not closely match the terms of the hedged item. Possible
source of ineffectiveness may arise from: an increase in credit risk for the derivative counterparty or a significant change in thetiming of the cash flow realization.

2.23 Fair value measurement

The Group measures certain financial instruments at fair value. Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value is basedon the presumption that the transaction to sell the asset or transfer the liability takes place either:nin the principal market for the asset or liability; ornin the absence of a principal market, in the most advantageous market for the asset or liability.

The principal market or the most advantageous market must be accessible to or by the Group.
The fair value of an asset or a liability is measured using similar inputs that the market participants would use when pricing
the asset or liability and assuming that market participants act in their economic best interest.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available
to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the Group’s consolidated financial statements are
categorized within the fair value hierarchy, as follows:nlevel 1 inputs: quoted prices (unadjusted) in active markets for identical assets or liabilities;nlevel 2 inputs: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly
or indirectly; ornlevel 3 inputs: inputs for the asset or liability that are not based on observable market data.

The Group’s policy is to recognize transfers into and out of fair value hierarchy levels as at the end of the reporting period whenthe event or change in circumstances occurred.
For items categorized within level 3, the Group’s finance team reviews the estimates and assumptions on a regular basis but, in allcases, at each interim period. Any changes that may have a significant effect on the reported fair value are reported to management.
The Group has elected to use the exception provided by paragraph 48 of IFRS 13 ‘Fair Value Measurement’ to measure the credit
risk element attributable to the Group’s own credit risk (net short position) or the counterparty’s credit risk (net long position)
on a net basis for the financial assets and financial liabilities governed by a master netting agreement.

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Financial Statements

221

2. Accounting policies continued
2.24 Offsetting financial instruments

Financial assets and financial liabilities are offset in the statement of financial position when, and only when, the Group:ncurrently has a legally enforceable right to set-off the financial assets and financial liabilities; andnintends either to settle on a net basis, or to realize the financial assets and settle the financial liabilities simultaneously.

An enforceable right to offset financial assets and financial liabilities must not be contingent on future events and must be
currently legally enforceable in the normal course of business, in the event of default and in the event of insolvency or bankruptcy.

2.25 Dividend distribution

Dividend distribution to the Group’s shareholders is recognized as a liability in the Group’s financial statements in the period
in which the dividends are approved by the Company’s shareholders.

2.26 Comparative information

The Group has adjusted the tax impact for foreign exchanges gains and losses of quasi-equity loans that should have beenrecorded in retained earnings and other comprehensive income in previous periods. As a result, the deferred tax liabilities balance
as of 1st January 2022 was decreased by USD 25.3 million against retained earnings and other equity as shown in the consolidated
statement of changes in equity, with no impact on the consolidated statement of profit or loss and Consolidated statement ofother comprehensive income.

3. Financial instruments
3.1 Accounting classifications

The Group holds the following financial instruments to which the accounting policies under IFRS 7 ‘Financial Instruments:
Disclosures’, IFRS 9 ‘Financial Instruments’ and IAS 32 ‘Financial Instruments: Presentation’ apply:
2023
USD 000

2022
USD 000

Financial assets
Financial assets measured at fair value through profit or loss (FVTPL)

53,78853,863

Derivative instruments used for hedging

37,75024,099Financial assets measured at amortized cost

516,597450,254

Total

608,135

528,216

Financial liabilities
Financial liabilities measured at fair value through profit or loss (FVTPL)

5,743

1,506

Derivative instruments used for hedging

6,275

8,365

Financial liabilities measured at amortized cost

945,271

1,001,328

Total

957,289

1,011,199

3.2 Financial risk factors

The Group is exposed to a variety of financial risks: market risk (including currency risk, fair value interest rate risk and cash flowinterest rate risk), credit risk and liquidity risk. The Group’s risk management policies and guidelines focus on the unpredictabilityof financial markets and seek to minimize potential adverse effects on the Group’s financial statements.
Market risk
Market risk management is carried out by a central treasury team under policies and procedures approved by management.
These policies are primarily set out to identify, evaluate and hedge when deemed necessary, the related financial risks. The Group’s
policies and implementation procedures are regularly updated to reflect changes in market conditions, the Group’s activities andemergence of new risks. They are also regularly overseen by the Group’s internal audit team for compliance as well as detectionof control deficiencies.
(i) Foreign exchange risk
By operating internationally, the Group is exposed to risks associated with fluctuations in foreign currencies. Foreign exchange riskarises from:nforecast transactions denominated in foreign currency; and/ornmonetary assets and liabilities denominated in foreign currency.

The Group’s strategy is to make efforts in order to mitigate the effect of the variability in cash flows that is attributable to the
movement in foreign currencies. This is implemented by: 1) aligning the revenue streams to currencies that match the cost base;and 2) to offset the change in value of the material residual exposures by the use of derivative instruments.
The Group hedges exposures from currencies for which the combination of the market volatility and the size of the exposure could
have a material effect on the financial statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
3. Financial instruments continued
3.2 Financial risk factors continued

Market risk continued(i) Foreign exchange risk continued
Forecast transactions
The Group seeks to lock its 12–18 month projection of future cash transactions in foreign currencies within specific “coverage”
parameters with a higher hedging ratio for front-loaded quarters. The strategy is executed in layers and derivatives used are
currency forward contracts as well as currency options.
The Group applies hedge accounting when applicable and, except for maintenance and SaaS revenues for which the effective
portion of the hedge becomes part of the carrying amount reported in the “Deferred revenues” line, forecasted transactions
are expected to be recognized in profit or loss during the same period as the hedging instrument.

Monetary assets and liabilities
Foreign currency risks arising from monetary positions (e.g. trade receivables, trade payables, intercompany balances) are hedgedusing rolling-currency forward contracts or cross-currency swaps for duration exceeding one year. Except for relationships
involving cross-currency swaps, hedge accounting is not applied as the fair value change of both the instruments and theunderlying items are recognized in the same period and within the same line in the profit or loss statement. For hedging
relationship involving a cross-currency swap, the Group applies cash flow hedging when the underlying risk could affect profit
or loss or net investment hedge when it affects the other comprehensive income.
The table below illustrates the Group’s most sensitive currency exposures:
Net exposure2023
FCY* 000

2023
USD 000

2022
FCY* 000

2022
USD 000(5,352)

Euros

26,53529,285(5,003)UK pounds(7,965)(10,140)

3,116

3,767

Swiss francs

27,17032,277

14,03015,171

Indian rupees

219,386

2,633(493,183)(5,955)* Foreign currency.

A negative value represents a liability exposure.
These exposures represent monetary assets and liabilities, including derivatives held-for-trading, that are either:ndenominated in one of the currencies above and measured in an entity with a different functional currency; orndenominated in any foreign currency and measured in an entity whose functional currency is one of the above and that are notpart of an IFRS 9 existing hedging relationship.

Sensitivity analysis
The following table represents the effect of a reasonable shift in the currencies above against the US dollar.
2023

Sensitivity assumption

Euros
USD 000

UK pounds
USD 000

Swiss francs
USD 000

Indian rupees
USD 000

+10%

+10%

+10%

+10%

Profit or (loss)

2,929(1,014)

3,227

264

Other components of equity*(7,820)1,701

24,5417,363

Equity(4,891)687

27,768

7,627

Sensitivity assumption

-10%

-10%

-10%

-10%

Profit or (loss)(2,929)1,014(3,227)(264)

Other components of equity*

7,820(1,701)(24,541)(7,363)Equity

4,891

(687)

(27,768)(7,627)* Arises from hedging relationships designated as cash flow hedge and net investment hedge.

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223

3. Financial instruments continued
3.2 Financial risk factors continued
Market risk continued(i) Foreign exchange risk continued
Sensitivity analysis continued

2022
Euros
USD 000

UK pounds
USD 000

Swiss francs
USD 000

Indian rupees
USD 000

Sensitivity assumption

+10%

+10%

+10%

+10%

Profit or (loss)

(535)

377

1,517

(595)

Other components of equity*(8,764)

2,241

23,176

5,582

Equity(9,299)2,618

24,693

4,987

Sensitivity assumption

-10%

-10%

-10%

-10%

Profit or (loss)

535

(377)

(1,517)595

Other components of equity*

8,764(2,241)(23,176)(5,582)Equity9,299(2,618)(24,693)(4,987)* Arises from hedging relationships designated as cash flow hedge and net investment hedge.

Given the volatility of these currencies, the current economic environment and the foreign exchange market conditions, the sensitivity
assumption represents management’s assessment of reasonably possible changes in spot rates.
(ii) Cash flow and fair value interest risk
Except for the convertible note asset (note 3.4), the Group is not exposed to fair value risk as it has no “non-derivative” interestbearing financial instruments measured at fair value.
The Group is exposed to cash flow interest rate risk arising from cash and cash equivalents and borrowings at variable rates.
The Group’s policy is to set the limit for the “fixed-floating” mix of interest risk exposure in order to minimize the effect from
unfavorable move in the interest curve while optimizing the opportunity from a favorable shift. The Group may use interest
derivatives to achieve this objective. At the reporting dates, the portion of borrowings at variable rates was negligible.
The Group may hedge the cash flow risk on coupon payments from future issuance of interest-bearing liabilities arising from thevariability in the forward interest curve. Such strategy is conducted under specific policies that depict the size limitation, thehedge horizon as well as the quantitative and qualitative factors to demonstrate the “highly probable” criteria so that hedge
accounting can be applied. At 31 December 2023, the Group holds a portfolio of interest rate derivatives for a net nominal of CHF
70 million (2022: CHF 205 million) and the effect in other comprehensive income for a shift of 1 basis point in the interest curve
would be a USD 42 thousand (2022: USD 102 thousand) gain for a positive shift and the opposite for a negative shift.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer to a financial instrument fails to meet its contractual obligations,and arises principally from the Group’s trade receivables.
The carrying amount of the financial assets, as reported in section 3.1 above, represents the maximum credit exposure.
Trade receivables and contract assets
The Group determines the creditworthiness of any prospective or existing customer at the initial phase of each bid process.
Assessment of credit risk is mainly based on assessing the creditworthiness of customers through external ratings, and in the caseof existing customers, also assessing our past experience.
If a company is not rated, then historical payment experience, if available, together with country stability, is taken into
consideration to assess the credit risk.
Every credit check performed on prospective or existing customers at the initial phase of the negotiation goes through an approval
process. The credit rating is taken into account during the revenue recognition process once contracts are signed.
Credit quality and past experience are considered when determining payment terms and financial security requirements. At present,
the Group does not hold any collateral security.
The Group assesses the credit risk for customers with significant balances on a regular basis.
In cases when delinquency in payments occurs, the Group may withhold services delivery under current implementation or limit
the right to use its software.
As at 31 December 2023 and 2022, there is no geographical concentration of credit risk as the Group’s customer base is internationallydispersed. At 31 December 2023, there is no concentration of credit risk at individual customer level. At 31 December 2022, there wasno concentration of credit risk at individual customer level, with the exception of one customer that represented around 10% of the
trade receivables and contract assets with respect of a balance not due yet.
The Group performs impairment analysis using a default rate to measure expected credit loss for all trade receivables including
those with significant financing components and contract assets. The Group identifies the default rate by analyzing the historicaland current experience with credit losses, considering it to represent a reasonable approximation for future expected defaults andapplicable to its current receivables. The Group also takes into consideration forward-looking factors, including changes in theeconomic environment or changes in regulation, and if material reflects these in the expected credit loss allowance.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
3. Financial instruments continued
3.2 Financial risk factors continued

Credit risk continued
Trade receivables and contract assets continued
A credit impairment is recognized when there is objective evidence that the Group will not be able to collect all amounts due
according to the original terms of the receivable. Evidence of impairment includes severe financial difficulties of the debtor,
probability that the debtor will enter bankruptcy or financial reorganization.
At 31 December 2023, the credit risk exposure on the Group’s trade receivables and contract assets is as follows:
2023
USD 000

1.22%

1.69%

392,220

340,646

4,774

5,771

Expected credit loss rate
Gross carrying amount for trade receivables and contract assets

2022
USD 000

Provision for credit losses

The Group’s exposure to credit risk from balances due from its customers is limited. Therefore, the Group has applied the
expected credit loss rate calculated above to the overall receivable and contract asset balances without using a grouping criteria
and hence a provision matrix is not presented for disclosure purposes.
Refer to note 14 for the movement in the loss allowance in respect of trade receivables and contract assets.
Cash and cash equivalents and financial instruments
To the extent possible, the Group mitigates counterparty risk by:nholding balances with reputable or “investment grade” rated institutions based in high-rated countries; andncarrying out a policy for diversification and limitation of cash concentration by counterparty and country.

Derivatives are entered into with reputable or “investment grade” counterparties and are governed by enforceable “ISDA”
agreements or equivalent.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. This risk is managed byholding sufficient cash balances and availability of committed banking facilities.
The Group’s policy aims to guarantee a level of liquidity that meets the Group’s present and near-term financial obligations underboth normal and stressed conditions. This is monitored weekly on the basis of actual liabilities in the accounting ledger as wellas rolling forecasts for future transactions. Excess of cash is primarily used to repay any drawn borrowing facilities (note 19).
The following table details the remaining contractual maturity of the Group’s non-derivative financial liabilities. The amounts
disclosed in the table are the contractual undiscounted cash flows.
Less than
6 months
USD 000

Between 6 and12 months
USD 000

Between 1 and2 years
USD 000

Between 2 and5 years
USD 000

More than
5 years
USD 000

159,032

21,563–––

At 31 December 2023
Trade and other payables
Borrowings
Lease liabilities

7,238

6,513

16,395

3,326

2,427

Other borrowings

231,993

10,741

272,122

258,004–

Total non-derivative financial liabilities

398,263

38,817

288,517

261,330

2,427

Less than
6 months
USD 000

Between 6 and12 months
USD 000

Between 1 and2 years
USD 000

Between 2 and5 years
USD 000

More than
5 years
USD 000

141,945

17,412

–

–

–

–

–

492

676

–

Lease liabilities

6,535

6,377

19,349

5,887

1,353

Other borrowings

213,443

196,427

168,670

241,513–

Total non-derivative financial liabilities

361,923

220,216

188,511

248,076

1,353

At 31 December 2022
Trade and other payables
Property provision
Borrowings

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225

3. Financial instruments continued
3.2 Financial risk factors continued

Liquidity risk continued
The following table details the Group’s liquidity analysis for its derivative financial liabilities. These amounts represent thecontractual undiscounted net cash inflows and outflows on derivative instruments that settle on a net basis, and the undiscounted
gross inflows and outflows on those derivatives that require gross settlement. When the amount payable or receivable is not fixed
or in foreign currency, the amount disclosed has been determined or converted by reference to quoted prices in active markets for
identical instruments.
Less than
3 months
USD 000

Between 3 and6 months
USD 000

Between 6 and12 months
USD 000

Between 1 and2 years
USD 000

Between 2 and5 years
USD 000

More than
5 years
USD 000

At 31 December 2023
Gross settlement of cross-currency swaps(interest only)*– Outflows

–

3,412

–

2,874

2,470

–

– Inflows–(1,456)–(2,317)

(980)

–

–

1,956

–

557

1,490

–

Gross settled foreign exchange derivatives– Outflows

189,831

17,23034,682–––– Inflows(183,415)(16,571)(33,312)

–

–

–

6,416

659

1,370

–

–

–

45

45

90

1

–

–

6,461

2,660

1,460

558

1,490

–

Less than
3 months
USD 000

Between 3 and6 months
USD 000

Between 6 and12 months
USD 000

Between 1 and2 years
USD 000

Between 2 and5 years
USD 000

More than
5 years
USD 000

Net settled foreign exchange derivatives
Total derivatives

At 31 December 2022
Gross settlement of cross-currency swaps(interest only)*– Outflows

–

3,412

5,178

8,590

5,178

–

– Inflows–(1,325)(2,109)(3,434)(2,109)

–

–

2,087

3,069

5,156

3,069

–

Gross settled foreign exchange derivatives– Outflows

168,677

31,001

71,92954,679––– Inflows(166,209)(29,561)(69,617)(53,095)

–

–

2,468

1,440

2,312

1,584

–

–

Net settled foreign exchange derivatives

664

627

466

90

–

–

Total derivatives

3,132

4,154

5,847

6,830

3,069

–

* It only represents the contractual liability arising from the interest payments for instruments reported as an asset.

3.3 Capital risk management

The Group’s principal objective when managing capital is to safeguard the Group’s ability to continue as a going concern, so that it
can continue to provide returns for shareholders and benefits for other stakeholders. The Group is also subject to financial
covenants under its facility agreement that are Debt Leverage and Interest Cover Ratio.
The capital structure of the Group consists of the net debt (note 13) and the capital and reserves attributable to equity holdersof the parent.
The capital risk management policy remains unchanged from the previous period.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
3. Financial instruments continued
3.4 Fair value measurement

The following table provides the level of the fair value hierarchy within which the carrying amounts of the financial assets andliabilities measured at fair value are categorized.
Level 1
USD 000

Level 2
USD 000

Level 3
USD 000

Total
USD 000

Foreign currency forwards (note 15)

–

4,510

–

4,510

Convertible notes (note 15)––

49,27849,2782,279

Year ended 31 December 2023

Financial assets at FVTPL

Derivatives used for hedging
Foreign currency forwards (note 15)

–

2,279

–

Foreign currency options (note 15)

–

763

–

763

Cross-currency swaps (note 15)–

34,372–

34,372

Interest rate swaps (note 15)

–

336

–

336

Total

–

42,26049,27891,538

Level 1
USD 000

Level 2
USD 000

Level 3
USD 000

Total
USD 000

–

5,743

–

5,743
2,618

Financial liabilities at FVTPL
Foreign currency forwards (note 15)
Derivatives used for hedging
Foreign currency forwards (note 15)

–

2,618

–

Foreign currency options (note 15)

–

466

–

466

Interest rate swaps (note 15)

–

3,191

–

3,191

Total

–

12,018–12,018

Level 1
USD 000

Level 2
USD 000

Level 3
USD 000

Total
USD 000

Foreign currency forwards (note 15)

–

2,234

–

2,234

Convertible notes (note 15)––

51,62951,629Foreign currency forwards (note 15)

–

1,385

–

1,385

Foreign currency options (note 15)

–

1,162

–

1,162

Cross-currency swaps (note 15)–

13,329–13,329Interest rate swaps (note 15)

–

8,223

–

8,223

Total

–

26,33351,62977,962

Level 1
USD 000

Level 2
USD 000

Level 3
USD 000

Total
USD 000

–

1,506

–

1,506

Foreign currency forwards (note 15)

–

6,526

–

6,526

Foreign currency options (note 15)

–

1,839

–

1,839

Total

–

9,871

–

9,871

Year ended 31 December 2022

Financial assets at FVTPL

Derivatives used for hedging

Financial liabilities at FVTPL
Foreign currency forwards (note 15)
Derivatives used for hedging

Valuation techniques and key inputs
Foreign currency forwards
Discounted future cash flows (based on the forward exchange rate) using observable yield curves adjusted for credit risk.
Foreign currency options
Garman-Kohlhagen model (an adaptation of the Black-Scholes model for currency option).
Cross-currency swaps
Discounted future cash flows using observable yield curves (including currency basis spreads). The fair value of the leg measured
in foreign currency is translated using the spot exchange rate.

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227

3. Financial instruments continued
3.4 Fair value measurement continued

Valuation techniques and key inputs continued
Interest rate swaps
Discounted cash flow method using observable yield curves adjusted for credit risk.
There were no changes in valuation techniques during the period.
Assets and liabilities in level 3
Convertible notes
Investments in convertible notes contain embedded derivatives and are hence designated at fair value through profit and loss inentirety as the embedded derivatives are not separated. These convertible notes are classified as either current or non-current
assets depending on their maturities.
The Group entered into agreements in an early-stage business to purchase convertible notes with equity conversion features, fortotal investment entitlement of USD 59.9 million. The Group recognized the investment on its balance sheet for the amounts paidof USD 19.9 million in 2021 and USD 22.8 million in 2022, being the fair value of these investments at inception. The fair value at
31 December 2023 was USD 49.3 million (2022: USD 51.6 million).
The Group has determined the fair value of these instruments assuming a scenario of conversion in the future. The valuation adopted
a discounted cash flow approach relying on unobservable inputs relating to the equity value of the company and the most significant
assumptions were: discount rate of 20% (2022: 20%), long-term growth rate of 3% (2022: 3%), cumulative average growth rate forrevenue of 31.5% (2022: 36.9%) and an EBITDA margin of 35% (2022: 35%). The valuation at 31 December 2023 resulted in a fair value
loss of USD 4.9 million (2022: USD 6.8 million gain) recognized in the profit or loss statement in the net finance costs line item.
Given the nature of the investment, which is a level 3 financial asset in an early-stage business, there are inherent uncertainties
with respect to the fair value assigned to these instruments. The fair value determination requires significant judgments andincludes a degree of uncertainty as it relies on company specific data and unobservable inputs based on information currently
available. In addition, early-stage businesses are typically exposed to uncertainties associated with raising additional funding toenable them to deliver on their growth plans. There can be no assurance that such financing will be available on acceptable terms,
or at all.
The Group performed the following sensitivities with respect to the impact of a reasonable change in these significant
assumptions individually keeping other inputs unchanged on the fair value of the investment:
Unobservable inputs
2023

2022

Impact on profit or (loss)

Impact on profit or (loss)

Change inassumption

Increase
USD 000

Decrease
USD 000

Increase
USD 000

Decrease
USD 000

6,700

Discount rate (WACC)

2.00%(7,000)8,900(4,500)Long-term growth rate

0.50%

800

(800)

1,000

(200)

EBITDA margin

2.50%

4,000

(4,200)3,000(2,200)

Cumulative average growth rate of revenue (CAGR)

5.00%

4,200

(4,400)9,500(6,300)Contingent consideration
Contingent consideration payable in 2022 related to the acquisition of Htrunk Software Solutions Private Limited. The earn out
period ended 31 March 2022, and final settlement of USD 3.2 million was paid in 2022.
Reconciliation from opening to closing balances:
Convertiblenote
USD 000

Contingent
consideration
USD 000

At 1 January 2022

20,4022,400

Purchase

22,779––776Interest

1,648–

Net change in fair value (FVTPL)

6,800

–

Unwinding of discount to “Finance costs”–

67

Settlement–(3,243)51,629–Interest

2,549–

Net change in fair value (FVTPL)(4,900)–At 31 December 2023

49,278–Amount true up to “Cost of sales”

At 31 December 2022

228

Financial Statements

Temenos AG Annual Report and Accounts 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
3. Financial instruments continued
3.5 Hedging

At 31 December, the Group held the following derivatives as hedging instruments:
Year ended 31 December 2023
Time band
1–6 months

6–12 months

More than
one year

15,865

Foreign currency risk
Purchase of foreign currency forwards:
46,44534,170USD/CHF VWAP

0.936

0.920

–

GBP/USD VWAP

1.154

1.207

1.240

USD/INR VWAP

84.34885.33885.463Nominal amount expressed in USD equivalent (in thousands)

44,16733,312–

EUR/USD VWAP

1.077

1.075

–

Nominal amount expressed in USD equivalent (in thousands)

Sale of foreign currency forwards:

Purchase of foreign currency options:
Call
Nominal amount expressed in USD equivalent (in thousands)

19,993

20,7994,444

VWAP USD/CHF strike

0.849

0.842

–

VWAP GBP/USD strike

1.265

1.265

–

VWAP USD/INR strike

78.66578.94981.000Nominal amount expressed in USD equivalent (in thousands)

5,693

8,280

10,450VWAP EUR/USD strike

1.035

1.035

1.045

Nominal amount expressed in USD equivalent (in thousands)

6,320

9,192

11,991

VWAP EUR/USD strike

1.149

1.149

1.199

Put

Sale of foreign currency options:
Call

Put
Nominal amount expressed in USD equivalent (in thousands)

13,675

14,371

4,179

VWAP USD/CHF strike

0.835

0.835

–

VWAP GBP/USD strike

1.196

1.196

–

VWAP USD/INR strike

82.94983.33686.15070,000–130,000

0.992

–

0.963

Cross-currency swaps
Nominal amount in CHF (in thousands)
USD/CHF VWAPInterest rate derivatives
Nominal amount in CHF (in thousands)

60,000–10,000

Average fixed rate

1.67%

–

2.05%

Since the critical terms of the hedging instrument closely match those of the hedge items, the Group applies a hedge ratio of 1:1.

Financial Statements

Temenos AG Annual Report and Accounts 2023

229

3. Financial instruments continued
3.5 Hedging continued
Year ended 31 December 2022

Time band
1–6 months

6–12 months

More than
one year

Foreign currency risk
Purchase of forward currency forwards:
46,92730,22533,054

USD/CHF VWAP

Nominal amount expressed in USD equivalent (in thousands)

0.917

0.917

0.930

GBP/USD VWAP

1.277

1.229

1.175

USD/INR VWAP

80.36282.70385.419EUR/USD VWAP

1.141

1.152

–

Nominal amount expressed in USD equivalent (in thousands)

19,212

29,20653,096

EUR/USD VWAP

1.038

1.043

1.062

Nominal amount expressed in USD equivalent (in thousands)

34,87728,7397,137

VWAP USD/CHF strike

0.935

0.935

–

VWAP GBP/USD strike

1.269

1.253

1.190

VWAP USD/INR strike

76.64577.414–

VWAP EUR/USD strike

1.173

1.173

–

Nominal amount expressed in USD equivalent (in thousands)

5,725

–

–

VWAP EUR/USD strike

1.145

–

–

Nominal amount expressed in USD equivalent (in thousands)

5,977

–

–

VWAP EUR/USD strike

1.195

–

–

Nominal amount expressed in USD equivalent (in thousands)

33,13327,336

6,719

VWAP USD/CHF strike

1.001

1.001

–

VWAP GBP/USD strike

1.219

1.199

1.120

VWAP USD/INR strike

80.92581.502–

VWAP EUR/USD strike

1.085

1.085

–

Nominal amount in CHF (in thousands)––

200,000

USD/CHF VWAP

–

–

0.973

Nominal amount in CHF (in thousands)–

85,000120,000

Average fixed rate

–

0.72%

1.58%

Sale of foreign currency forwards:

Purchase of foreign currency options:
Call

Put

Sale of foreign currency options:
Call

Put

Cross-currency swaps

Interest rate derivatives

Since the critical terms of the hedging instrument closely match those of the hedge items, the Group applies a hedge ratio of 1:1.

230

Financial Statements

Temenos AG Annual Report and Accounts 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
3. Financial instruments continued
3.5 Hedging continued

The effect of hedge accounting on the financial position and performance
The table below shows the effect on the financial statements from the items designated as hedged items and hedging instruments.
Items designated as hedging instrument
Carrying amount
Period change in value
used to determine
hedge ineffectiveness
USD 000

AssetsUSD 000

Liabilities
USD 000

Line item in the statementof financial position

Foreign currency forwards – cash flow hedge

2,279

2,618

Other financial assets
and liabilities (note 15)628

Foreign currency options – cash flow hedge

763

466

Other financial assets
and liabilities (note 15)237

34,372–Other financial assets
and liabilities (note 15)

25,069336

3,191

Other financial assets
and liabilities (note 15)(5,672)

Cash flow hedge reserve()= cumulative loss
USD 000

Costs of hedging reserve()= cumulative loss
USD 000

Year ended 31 December 2023

Foreign exchange risk

Cross-currency swaps – net investment hedge
Interest rate risk
Interest rate swaps – cash flow hedge
Items designated as a hedge item

Year ended 31 December 2023

Period change in value
used to determine hedge
ineffectiveness
USD 000

Foreign exchange risk
865

(105)

(78)

25,06928,574(1,193)(5,672)4,180–

Forecast transactions – cash flow hedge
Investment in foreign operations – net investment hedge
Interest rate risk
Forecasted issuance of interest-bearing liabilities– cash flow hedge

Included in the cash flow hedge reserve is USD 6.9 million (2022: USD 3.5 million) representing the remaining balance for which
hedge accounting is no longer applied. This balance relates to the effective portion of the matured/terminated interest rate swaps
entered into for the purpose of hedging the interest rate risk related to future issuance of debts. This balance is being recycled tothe profit or loss over the period of the related debt and will be fully consumed within the next five years.
Items designated as hedging instrument
Carrying amount
Period change in value
used to determine
hedge ineffectiveness
USD 000

AssetsUSD 000

Liabilities
USD 000

Line item in the statementof financial position

Foreign currency forwards – cash flow hedge

1,385

6,526

Other financial assets
and liabilities (note 15)(5,240)Foreign currency options – cash flow hedge

1,162

1,839

Other financial assets
and liabilities (note 15)(765)

13,329–Other financial assets
and liabilities (note 15)

12,783

8,223–

Other financial assets
and liabilities (note 15)

8,223Year ended 31 December 2022

Foreign exchange risk

Cross-currency swaps – net investment hedge
Interest rate risk
Interest rate swaps – cash flow hedge

Financial Statements

Temenos AG Annual Report and Accounts 2023

231

3. Financial instruments continued
3.5 Hedging continued
Items designated as a hedge item

Year ended 31 December 2022

Period change in value
used to determine hedge
ineffectiveness
USD 000

Cash flow hedge reserve()= cumulative loss
USD 000

Costs of hedge reserve()= cumulative loss
USD 000

Foreign exchange risk
Forecast transactions – cash flow hedge

6,005(5,735)(81)

Investment in foreign operations –net investment hedge

12,783

10,800(389)(8,223)8,223–

Interest rate risk
Forecasted issuance of interest-bearing
liabilities – cash flow hedge

Note 26 provides details on changes in fair value and amounts reclassified to profit or loss by risk category.
There was no ineffectiveness recognized during the period (2022: USD nil).
The Group does not have any forecast transactions for which cash flow hedge accounting has been used in previous periods but
which are no longer expected to occur.

3.6 Offsetting financial assets and financial liabilities

Derivative transactions are governed by “ISDA” master agreements. Such agreements may permit the Group to use net settlement
in respect of multiple transactions in the normal course of business and more importantly provide the right to close out netting
when the agreement is terminated as a result of an event of default or a termination event.
The Group has a set-off agreement with one of its partners. Under the terms of this agreement, all amounts payable are offset
against receivables and the net amount are settled between the parties.
Grossamount
USD 000

Amountset-off
USD 000

Amountreported
USD 000

Amount not
set-off
USD 000

Net amount
USD 000

Trade receivables (note 14)388,594(1,148)Derivative financial assets (note 15)42,260–387,446–

387,446

42,260(3,424)

38,836

Total

430,854(1,148)429,706(3,424)426,282

Trade payables (note 18)
Derivative financial liabilities (note 15)

25,023(1,148)23,875–23,87512,018–12,018(3,424)

8,594

Total

37,041(1,148)35,893(3,424)32,469Year ended 31 December 2022

Grossamount
USD 000

Amountset-off
USD 000

Amountreported
USD 000

Amount not
set-off
USD 000

Net amount
USD 000

Trade receivables (note 14)

336,757(1,882)334,875–

334,875

Derivative financial assets (note 15)

26,333–

26,333(4,497)

21,836

363,090(1,882)361,208(4,497)356,711

44,096(1,882)

42,214–42,214

9,871

–

9,871

(4,497)

5,374

53,967(1,882)

52,085(4,497)47,588Year ended 31 December 2023

Financial assets

Financial liabilities

Financial assets

Total
Financial liabilities
Trade payables (note 18)
Derivative financial liabilities (note 15)
Total

232

Financial Statements

Temenos AG Annual Report and Accounts 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
4. Critical accounting estimates and judgments

Estimates and judgments are continually evaluated and based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances.
The resulting accounting estimates may differ from actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Impairment of goodwill

The Group tests annually whether goodwill has suffered any impairment in accordance with the accounting policy stated in note
2.8. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These
calculations require the use of estimates (see note 17).
If future sales and size of market opportunities are significantly lower than management’s estimates, the carrying value of goodwill
may need to be reduced accordingly. However, unless any downturn is particularly severe and pervasive, it is unlikely to have amaterial impact on the carrying value of goodwill.
At 31 December 2023, the carrying amount of goodwill amounted to USD 1,066.4 million (2022: USD 1,052.6 million).

Revenue recognition

Under IFRS 15, the ability and intent of customers to pay the consideration per the contract is addressed from the outset. If
Temenos does not consider the customer to have the necessary ability or intent to pay the consideration promised for the
performance obligations, then Temenos is not in possession of a contract and revenue recognition cannot commence. If there isdoubt about the total amount of consideration to be paid, then this is assessed under the variable consideration rules, requiring
judgment to be applied by Temenos.
There is estimation required in identifying the performance obligations within contracts and then allocating the transaction pricebetween these performance obligations. Many contracts signed by Temenos are multi-element arrangements which require
allocation of the transaction price between multiple performance obligations, requiring an estimation of effort to be incurred withregards to implementation and/or development services to identify the standalone selling price of these obligations, andestimation of the standalone selling price of other identified performance obligations.
Management also exercises judgment with respect to the determination of the appropriate method to estimate the standalone
selling price for the various performance obligations in a contract, which ultimately impacts the amount of revenue recognized in
the consolidated financial statements for each performance obligation.

Internally-generated software development

As detailed in note 2.7, the Group is required to make an assessment for each ongoing project in order to determine the stage aproject meets the criteria outlined in the Group’s accounting policies. Such an assessment may, in certain circumstances, requiresignificant judgment. In making this judgment, the Group evaluates, amongst other factors, the stage at which technical feasibility
has been achieved, management’s intention to complete and use or sell the product, likelihood of success, availability of technicaland financial resources to complete the development phase and management’s ability to reliably measure the expenditure
attributable to the project. Total development expenses for the period were USD 277.9 million (2022: USD 279.8 million) and total
capitalized development costs were USD 76.6 million (2022: USD 86.3 million).
The Group also applies judgment to the estimate of useful economic lives for its capitalized software development – see note 2.7
for further details.

Level 3 financial assets

The Group makes investments in unlisted businesses which are classified as level 3 in the IFRS fair value hierarchy. Given thenature of these investments, the fair value determination requires significant levels of judgments and estimates over the inputs
used in the fair value model, particularly those that are unobservable. To the extent these investments are classified as financial
instruments measured through profit or loss, the Group’s future results may be impacted due to significant fluctuations in fairvalue which could be driven by changes in market or company specific data.
See note 3.4 for further details on level 3 financial assets.

5. Group companies

The consolidated financial statements include the accounts of TEMENOS AG and the following entities as at 31 December 2023:
Country ofincorporation

2023
Ownership
interest

2022
Ownership
interest

AVOKA TECHNOLOGIES PTY LIMITED

Australia

100%

100%

INFINITIVE PTY LIMITED

Australia

100%

100%

RUBIK ESOP TRUSCO PTY LIMITED

Australia

100%

100%

RUBIK IP HOLDINGS PTY LIMITED

Australia

100%

100%

RUBIK MORTGAGES PTY LIMITED

Australia

100%

100%

SKY TECHNOLOGIES CONSULTING PTY LIMITED

Australia

100%

100%

SKY TECHNOLOGIES HOLDINGS PTY LIMITED

Australia

100%

100%

SKY TECHNOLOGIES PTY LIMITED

Australia

100%

100%

TEMENOS AUSTRALIA FINANCIAL PTY LIMITED

Australia

100%

100%

Company nameFinancial Statements

Temenos AG Annual Report and Accounts 2023

233

5. Group companies continued
Country ofincorporation

2023
Ownership
interest

2022
Ownership
interest

TEMENOS AUSTRALIA MESSAGING PTY LIMITED

Australia

100%

100%

TEMENOS AUSTRALIA OPERATIONS PTY LIMITED

Australia

100%

100%

TEMENOS AUSTRALIA PTY LIMITED

Australia

100%

100%

TEMENOS AUSTRALIA SERVICES PTY LIMITED

Australia

100%

100%

TEMENOS AUSTRALIA SYMMETRY PTY LIMITED

Australia

100%

100%

TEMENOS AUSTRALIA TECHNOLOGY SOLUTIONS PTY LIMITED

Australia

100%

100%

TEMENOS SOLUTIONS AUSTRALIA PTY LIMITED

Australia

100%

100%

ODYSSEY FINANCIAL TECHNOLOGIES SA

Belgium

100%

100%

TEMENOS BELGIUM SA

Belgium

100%

100%

Brazil100%

100%

British Virgin Islands

100%

100%

TEMENOS BULGARIA EOOD

Bulgaria

100%

100%

TEMENOS CANADA INC.

Canada100%

100%Company nameTEMENOS SOFTWARE BRASIL LIMITADATEMENOS HOLDINGS LIMITED

China

100%

100%

TEMENOS COLOMBIA SAS

Colombia

100%

100%

TEMENOS COSTA RICA SA

Costa Rica

100%

100%

Cyprus100%

100%

TEMENOS DENMARK APS

Denmark

100%

100%

TEMENOS ECUADOR SA

Ecuador

100%

100%

TEMENOS EGYPT LLC

Egypt

100%

100%

IGEFI FRANCE SARLFrance100%

100%

TEMENOS FRANCE SAS

France100%

100%

TEMENOS HOLDINGS FRANCE SAS

France100%

100%

VIVEO FRANCE SAS

France100%

100%

VIVEO GROUP SAS

France100%

100%

AVOKA (GERMANY) GmbHGermany

100%

100%

TEMENOS DEUTSCHLAND GmbHGermany

100%

100%

Greece100%

100%

TEMENOS FINANCE HONG KONG LIMITED

Hong Kong

100%

100%

TEMENOS HONG KONG LIMITED

Hong Kong

100%

100%

TEMENOS INDIA PVT LIMITED

India

100%

100%

KONY INDIA PVT LIMITED

India

100%

100%

KONY SERVICES INDIA LLP

India

100%

100%

IGEFI IRELAND LIMITED

Ireland

100%

100%

TEMENOS SYSTEMS IRELAND LIMITED

Ireland

100%

100%

TEMENOS ISRAEL LIMITED

Israel100%

100%

TEMENOS JAPAN KK

Japan

100%

100%

Kazakhstan

100%

100%

TEMENOS EAST AFRICA LIMITED

Kenya

100%

100%

TEMENOS KOREA LIMITED

Korea

100%

100%

IGEFI GROUP SARL

Luxembourg

100%

100%

ODYSSEY GROUP SA

Luxembourg

100%

100%

TEMENOS FINANCE LUXEMBOURG SARL

Luxembourg

100%

100%

TEMENOS LUXEMBOURG SA

Luxembourg

100%

100%

TEMENOS SOFTWARE LUXEMBOURG SA

Luxembourg

100%

100%

Malaysia

100%

100%

TEMENOS MEXICO SA DE CV

Mexico100%

100%

TEMENOS NORTH AFRICA LLC

Morocco

100%

100%

TEMENOS SOFTWARE (SHANGHAI) CO. LIMITEDTEMENOS MIDDLE EAST LIMITEDTEMENOS HELLAS SATEMENOS KAZAKHSTAN LLPTEMENOS (MALAYSIA) SDN BHD

234

Financial Statements

Temenos AG Annual Report and Accounts 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
5. Group companies continued
Country ofincorporation

2023
Ownership
interest

2022
Ownership
interest

KONY SOLUTIONS BVNetherlands

100%

100%

TEMENOS (NL) BV

Netherlands

100%

100%

TEMENOS HOLLAND BVNetherlands

100%

100%

TEMENOS INVESTMENTS BVNetherlands

100%

100%

TEMENOS NEW ZEALAND LIMITEDNew Zealand

100%

100%

Panama100%

100%

TEMENOS PHILIPPINES INC.

Philippines

100%

100%

TEMENOS POLSKA SP. Z.O.O.

Poland100%

100%

Republic of Mauritius

100%

100%

TEMENOS ROMANIA SRL

Romania

100%

100%

TEMENOS SINGAPORE FT PTE LIMITED

Singapore

100%

100%

TEMENOS SINGAPORE PTE LIMITED

Singapore

100%

100%

South Africa

100%

100%

Spain

100%

100%

TEMENOS COLOMBO (PVT) LIMITEDSri Lanka

100%

100%

TEMENOS CLOUD SWITZERLAND SA

Switzerland

100%

100%

TEMENOS HEADQUARTERS SA

Switzerland

100%

100%

Thailand

100%

100%

Turkey100%

100%

AVOKA EUROPE LIMITED

United Kingdom

100%

100%

EDGE IPK LIMITED

United Kingdom

100%

100%

FE MOBILE LIMITED*

United Kingdom

0%

100%

FINANCIAL OBJECTS (UK) LIMITED

United Kingdom

100%

100%

FINANCIAL OBJECTS INTERNATIONAL LIMITED*

United Kingdom

0%

100%

FINANCIAL OBJECTS LIMITED

United Kingdom

100%

100%

IGEFI UK LIMITED

United Kingdom

100%

100%

LOGICAL GLUE LIMITED

United Kingdom

100%

100%

ODYSSEY FINANCIAL TECHNOLOGIES LIMITED

United Kingdom

100%

100%

TEMENOS FOFL LIMITED*

United Kingdom

0%

100%

TEMENOS FOGT LIMITED

United Kingdom

100%

100%

TEMENOS UK LIMITED

United Kingdom

100%

100%

WEALTH MANAGEMENT SYSTEMS LIMITED

United Kingdom

100%

100%

AVOKA (USA), INC.

U.S.A.

100%

100%

KONY, INC.

U.S.A.

100%

100%

TEMENOS CLOUD AMERICAS LLC

U.S.A.

100%

100%

TEMENOS HOLDINGS USA, INC.

U.S.A.

100%

100%

TEMENOS U.S.A., INC.

U.S.A.

100%

100%

Vietnam

100%

100%

Company nameTEMENOS PANAMA SA

KONY SOLUTIONS LIMITEDTEMENOS AFRICA (PTY) LIMITEDTEMENOS HISPANIA SLTEMENOS (THAILAND) CO. LIMITEDTEMENOS EURASIA BANKA YAZILIMLARI LTD SIRKETITEMENOS VIETNAM COMPANY LIMITED* Company struck-off in 2023.

In addition to the Group companies listed above, some Group subsidiaries maintain branches or representative offices at thefollowing locations: Beirut (Lebanon), Dubai (United Arab Emirates), Riyadh (Saudi Arabia), Milan (Italy), Moscow (Russia), Taipei(Taiwan), Islamabad (Pakistan), Jakarta (Indonesia), Tunis (Tunisia), Helsinki (Finland), Malmo (Sweden) and Renens (Switzerland).

Significant restrictions

Other than those described in note 13, there is no significant restriction on the Group’s ability to access or use assets and settle
liabilities of the above entities.

Financial Statements

Temenos AG Annual Report and Accounts 2023

235

6. Business combinations

There were no acquisitions during the years ended 31 December 2023 and 31 December 2022.

7. Segment information

The Chief Operating Decision Maker (CODM) has been identified as the Group’s Chief Executive Officer (CEO). He regularly reviews
the Group’s operating segments in order to assess performance and to allocate resources.
The CODM considers the business from a product perspective and, therefore, recognizes the reporting segments as: “Product” and“Services”. Other representations of the Group’s activity such as regional information is also presented to the CODM, but it is notprimarily used to review the Group’s performance and to make decisions as to how to allocate resources. These two reporting
segments are the Group’s only operating segments; hence, there is no segmental aggregation.
The “Product” segment is primarily engaged in marketing, licensing and maintaining the Group’s software solutions, including
software development fees for requested functionality, as well as providing hosting and subscription arrangements. The “Services”
segment represents various implementation tasks such as consulting and training.
The CODM assesses the performance of the operating segments based on the operating contribution. This measure includes theoperating expenses that are directly or reasonably attributable to the reporting segments. Unallocated expenses mainly comprise
restructuring costs, termination benefits, acquisition-related costs, share-based payment expenses, office-related expenses andany other administrative or corporate overheads that cannot be directly attributable to the operating segments. Segment revenues
provided to the CODM exclude the fair value adjustment recognized on deferred income liabilities acquired in businesscombinations, if any.
Assets attributed to the reporting segments represent net trade receivables and contract assets (note 14).
The table below summarizes the primary information provided to the CODM:
Product
2023
USD 000

Services

Total

2022
USD 000

2023
USD 000

2022
USD 000

2023
USD 000

2022
USD 000

Revenues

867,328

806,766

132,896

142,862

1,000,224

949,628

Operating contribution

383,479

348,268

12,9482,608

396,427

350,876

Total assets

301,639

248,691

85,807

86,184387,446

334,875

All revenues are generated from contracts with external customers. The Group has a large number of customers and no individual
customer contributed more than 10% of the Group’s total revenue in the current or prior year.
The accounting policies applied to the reportable segments are the same as the Group’s accounting policies described in note 2,
with the exception of the fair value adjustment on deferred income liabilities acquired in business combinations, if any.
Intersegment transactions are recognized as part of allocated expenses, and are based on internal cost rates that exclude any
profit margin.
For goodwill impairment testing purposes, goodwill of USD 1,066.4 million (2022: USD 1,052.6 million) was allocated to the
Product segment.
Reconciliation to Group’s consolidated financial statements

2023
USD 000

Total operating contribution from the reportable segments

396,427

350,876

Depreciation and amortization (notes 16 and 17)(131,167)(138,597)

2022
USD 000

Unallocated expenses(65,883)(48,894)

Finance costs – net (note 11)(26,494)(17,422)

Profit before taxation

172,883

145,963

236

Financial Statements

Temenos AG Annual Report and Accounts 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
7. Segment information continued
Total assets

2023
USD 000

2022
USD 000

Total assets allocated to the reportable segments

387,446

334,875

Other receivables

87,40783,008Cash and cash equivalents

106,885

89,923

Other financial assets

91,53877,962

Property, plant and equipment

58,017

63,102

1,523,602

1,538,750

71,94644,1952,326,841

2,231,815

Unallocated items:

Intangible assets
Deferred tax assets
Total assets per the statement of financial position

Geographical information
Revenues from external customers

2023
USD 000

Switzerland (country of the Group’s domiciliation)

51,963

United States of America

185,023

Luxembourg

44,444

United Kingdom

44,404

Saudi Arabia

39,988Australia

31,945

Total – material countries

397,767

Rest of Middle East and Africa

202,208

Rest of Europe

162,854

Rest of Asia Pacific

142,839

Rest of Americas

94,556

Total revenues
Revenues from external customers

1,000,224
2022
USD 000

Switzerland (country of the Group’s domiciliation)

36,268

United States of America

196,855

Luxembourg

43,262

United Kingdom

41,426

Ireland35,040Australia

30,109Total – material countries

382,960

Middle East and Africa

207,903

Rest of Asia Pacific

162,764

Rest of Europe

120,338

Rest of Americas

75,663

Total revenues
Revenues are based on the location where the license and maintenance are sold or the service is provided.

949,628

Financial Statements

Temenos AG Annual Report and Accounts 2023

237

7. Segment information continued
Geographical information continued
Non-current assets other than financial instruments and deferred tax assets

2023
USD 000

Switzerland (country of the Group’s domiciliation)

270,378

United States of America

601,982

Luxembourg

253,649

Australia

231,018

United Kingdom

70,184

France60,982Other countries

93,426

Total

1,581,619

Non-current assets other than financial instruments and deferred tax assets

2022
USD 000

Switzerland (country of the Group’s domiciliation)

250,876

United States of America

631,439

Luxembourg

247,253

Australia

246,484

United Kingdom

68,528

France60,023

Other countries

97,249Total

1,601,852

8. Revenue from contracts with customers
Future performance obligations

The aggregate amount of the transaction price allocated to performance obligations that were partially unsatisfied or wholly
unsatisfied as at the reporting year end is as follows:
2023

Revenue expected to be recognized2022

Withinone year
USD 000

More than
one year
USD 000

Total
USD 000

Withinone year
USD 000

More than
one year
USD 000

Total
USD 000

639,253

1,422,829

2,062,082

542,866

1,433,463

1,976,329

The remaining performance obligations expected to be recognized within one year and more than one year mainly relate toongoing maintenance contracts.

Contract balances
2023
USD 000

2022
USD 000

Contract assets

56,62160,071

Deferred revenue

481,832

423,717

Revenue of USD 375.0 million (2022: USD 328.6 million) was recognized during the year ended 31 December 2023 from the deferred
revenue balance included at the beginning of the period.
Revenue of USD 5.9 million (2022: USD 6.8 million) was recognized during the year ended 31 December 2023 from performanceobligations satisfied (or partially satisfied) in previous periods.

238

Financial Statements

Temenos AG Annual Report and Accounts 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
8. Revenue from contracts with customers continued
Contract costs

The Group has recognized an asset in relation to the costs incurred to obtain and fulfill contracts, which is presented within “Other
receivables” on the balance sheet.
2023
USD 000

2022
USD 000

Current

4,916

3,678

Non-current

5,685

1,620

10,601

5,298

Assets recognized from costs incurred to fulfill a contract:

Costs associated with customization developments are recognized in the profit or loss when delivery is performed. Costs for set
up of SaaS contracts are recognized over the life of the committed contract with the customer. In 2023, the amount recognized in
the profit or loss was USD 1.7 million (2022: USD 1.5 million).
Assets recognized from costs to obtain the contract:

2023
USD 000

2022
USD 000

Current

10,4696,773

Non-current

19,707

17,11830,17623,891

Capitalized commission is amortized over the life of the contract committed with the customer, as commissions are driven by thecommitment period. In 2023, the amount recognized in the profit or loss was USD 11.3 million (2022: USD 8.9 million).
The Group applies the practical expedient in paragraph 94 of IFRS 15; the incremental costs of obtaining a contract are recognized
as an expense when incurred if the amortization period of the asset, which the Group otherwise would have recognized, is one
year or less.

9. Expenses by nature2023
USD 000

2022
USD 000

Third party licenses and commissions

69,82160,369Personnel costs and external consultants

551,684

560,319

Depreciation, amortization and impairment of intangible assets (notes 16 and 17)

131,167

138,597

Travel expenses

23,78018,398Rent and other occupancy costs

7,726

7,579

Marketing and other professional costs

41,001

31,990

Other costs

52,28555,332

Capitalized development costs (note 17)(76,617)(86,341)

800,847

786,2432023
USD 000

2022
USD 000

Wages and salaries

370,752

353,986

Termination benefits

7,531

9,629

42,04735,268

Defined contribution pension costs

9,214

8,072

Defined benefit pension costs (note 23)

5,303

5,249

Cost of employee share option scheme (note 27)

52,91452,701

487,761464,905

10. Employee benefit expenses

Social charges

Temenos AG Annual Report and Accounts 2023

Financial Statements

239

10. Employee benefit expenses continued

Included in employee benefit expenses is the remuneration of the key management personnel as illustrated below:
2023
USD 000

2022
USD 000

8,604

5,573

Key management personnel of Temenos AG– Short-term cash compensation and benefits– Post-employment benefits– Share-based payments

170

230

16,052

19,934

24,82625,737

1,764

1,329

Non-Executive Directors– Short-term benefits

Remuneration of the Board of Directors and the Executive Committee (together defined as “key management personnel”) in
accordance with the Swiss Code of Obligations can be found in the Compensation Report of the Annual Report.

11. Finance costs – net
2023
USD 000

2022
USD 000

Finance income:– Interest income on bank deposits and short-term investments

1,901

517

– Interest income on trade and other receivables measured at amortized cost

1,999

695

– Interest income on convertible notes

2,549

1,648

–

6,800

– Foreign exchange gain, net

4,051

8,130

Total finance income

10,50017,790(25,328)(21,724)– Net fair value gain on convertible notes

Finance costs:– Interest expense on financial instruments measured at amortized cost

–

(67)

– Other financing costs*(3,511)(6,585)– Net loss on derivatives not designated as hedging instruments(3,255)(6,836)– Unwinding on interest discount for contingent consideration– Net fair value loss on convertible notes(4,900)–Total finance costs(36,994)(35,212)Finance costs – net(26,494)(17,422)*	Other financing costs principally include commitment fees attributable to banking facilities and other expenses related to financing activities.

240

Financial Statements

Temenos AG Annual Report and Accounts 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
12. Earnings per share
Basic

Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company by the weighted
average number of ordinary shares outstanding during the year.
2023

2022

Profit attributable to equity holders of the Company (USD 000)

134,677

114,420

Weighted average of ordinary shares outstanding during the year (in thousands)

71,97071,6731.87

1.60

Basic earnings per share (USD per share)

Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. For the periods presented in these consolidated financial statements, theGroup has only one category with a potential dilutive effect: “Instrument granted to employee under share-based payment”.
For the periods ended 31 December 2022 and 31 December 2023, this category was fully dilutive.
2023

2022

Profit used to determine diluted earnings per share (USD 000)

134,677

114,420

Weighted average of ordinary shares outstanding during the year (in thousands)

71,97071,673663

284

72,633

71,957

1.85

1.59

2023
USD 000

2022
USD 000

Adjustments for:– Share options and restricted shares (in thousands)
Weighted average number of ordinary shares for diluted earnings per share (in thousands)
Diluted earnings per share (USD per share)

13. Net debt analysis
Cash at bank and in hand (note 2.4)

96,712

69,825

Short-term deposits (note 2.4)

10,17320,098Cash and cash equivalents*

106,885

89,923

Borrowings – repayable within one year (note 19)(194,990)(204,137)

Borrowings – repayable after one year (note 19)(569,686)(636,666)

34,372

13,329Gross debt

(730,304)(827,474)

Net debt(623,419)(737,551)

Cross-currency swaps – hedging instruments (note 15)* Included in “cash and cash equivalents” is USD 3.2 million (2022: USD 2.4 million) held in jurisdictions where regulatory exchange controls exist
and therefore not available for general use by the Group outside of such jurisdiction at the reporting date.

The carrying value of cash and cash equivalents approximates their fair value.

Financial Statements

Temenos AG Annual Report and Accounts 2023

241

13. Net debt analysis continued
Changes in liabilities from financing activities
Cross-currency
swaps andinterest rate
swaps
USD 000

Lease
liabilities
USD 000

Other
borrowings
USD 000

Gross debt
USD 000

Otherliabilities *USD 000

Total
USD 000(586)(44,216)(915,642)(960,444)(2,326)(962,770)––(405,294)(405,294)–(405,294)

At 31 December 2021
Cash flows from financing activities– Proceeds– Repayments––

502,625

502,625–

502,625– Interest payments––

18,80918,8093,772

22,581– Other financing costs

–

–

–

–

3,767

3,767

– Payments of lease liabilities–

15,992–

15,992–

15,992– Settlement of financial instruments(2,298)––(2,298)(3,806)(6,104)

Fair value and foreign exchange movement

16,213

2,159

15,13833,51012,02945,539Interest on lease liabilities (note 20)–(1,000)–(1,000)–(1,000)Interest accruals––(17,522)(17,522)(4,265)(21,787)

Net (additions)/disposals of lease liabilities–(12,823)–(12,823)–(12,823)

Other movements

–

971

–

971

(3,801)(2,830)13,329(38,917)(801,886)(827,474)

5,370(822,104)– Proceeds––(367,927)(367,927)–(367,927)– Repayments––

512,085

512,085–

512,085– Interest payments––

17,886

17,886

4,740

22,626– Other financing costs

–

–

–

–

3,226

3,226

– Payments of lease liabilities–

15,372–

15,372–

15,372

At 31 December 2022
Cash flows from financing activities

–

–

–

–

(3,318)(3,318)21,043(681)(71,815)(51,453)(7,759)(59,212)Interest on lease liabilities (note 20)–(1,156)–(1,156)–(1,156)

Interest accruals––(19,259)(19,259)(8,638)(27,897)

Net (additions)/disposals of lease liabilities–(8,516)–(8,516)–(8,516)

Other movements

–

138

–

138

(252)

(114)

34,372(33,760)(730,916)(730,304)(6,631)(736,935)

2023
USD 000

2022
USD 000– Settlement of financial instruments
Fair value and foreign exchange movement

At 31 December 2023

* Included in “Other payables”, “Other financial liabilities” and “Other financial assets”.

14. Trade and other receivables
335,599

280,575

Contract assets (note 8)

56,62160,071

Loss allowance(4,774)(5,771)

Trade receivables

387,446

334,875

VAT and other taxation recoverable

16,905

16,607

Other receivables

5,361

8,849

Prepayments and capitalized contract cost

65,141

57,552

Trade receivables and contract assets – net

Total trade and other receivables

474,853

417,883

Less non-current portion(188,604)(104,410)

Total current trade and other receivables

286,249

313,473

242

Financial Statements

Temenos AG Annual Report and Accounts 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
14. Trade and other receivables continued

Trade and other receivables are recognized initially at the transaction price or at fair value if they contain a significant financing
component. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore
measures these subsequently at amortized cost using the effective interest method.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets mentioned above.
The Group’s exposure to credit and market risk is disclosed in note 3.2.

Fair values of trade and other receivables qualified as financial assets and measured at amortized cost
Carrying amountCurrent trade and other receivables
Non-current trade and other receivables

Fair value2023
USD 000

2022
USD 000

2023
USD 000

2022
USD 000

246,500

274,659

246,500

274,659

163,21285,672

161,743

76,489409,712360,331408,243

351,148

The carrying amount of current trade and other receivables approximates their fair value. The fair value measurement of noncurrent trade and other receivables is based on a discounted cash flow approach using a risk-free yield curve adjusted for customer
country credit risk, and is within level 2 of the fair value hierarchy. The majority of balances in non-current trade and otherreceivables relate to license subscriptions where carrying value equates to fair value as there has been no significant change in therisk-free rate since initial recognition.

Movements in the provision for impairment

The allowance account is used for impairment of trade receivables and contract assets.
Trade receivables andcontract assets
2023
USD 000

2022
USD 000

Balance at 1 January

5,771

3,231

Increase in loss allowance

1,005

3,196

Utilized(2,002)(656)

Balance at 31 December

4,774

5,771

Included in “Sales and marketing” is USD 1.9 million (2022: USD 3.2 million) impairment loss related to trade receivables
and contract assets.

15. Other financial assets and liabilities
2023

2022

AssetsUSD 000

Liabilities
USD 000

AssetsUSD 000

Liabilities
USD 000

Foreign currency forwards – hedging instruments

2,279

2,618

1,385

6,526

Foreign currency options – hedging instruments

763

466

1,162

1,839

Foreign currency forwards – held-for-trading

4,510

5,743

2,234

1,506

Cross-currency swaps – hedging instruments

34,372–

13,329

–

336

3,191

8,223

–

Convertible notes (note 3.4)

49,278–51,629–At 31 December

91,53812,01877,962

9,871

Current

69,786

11,33935,112

8,293

Non-current

21,752679

42,8501,578

At 31 December

91,53812,01877,962

9,871

Interest rate swaps – hedging instruments

Reported as follows:

The maximum exposure to credit risk at the reporting date is the fair value of the assets as reported in the statement of financial position.

Financial Statements

Temenos AG Annual Report and Accounts 2023

243

16. Property, plant and equipment
Year ended 31 December 2023

Vehicles
USD 000

Fixtures,fittings andequipment
USD 000

Land andbuildings
USD 000

Right-of-use
assetsUSD 000

Total
USD 000

17,250442

67,643

1,659

79,106

166,100

136

(1)

685

(11)

979

1,788

2,226

–

6,282

–

9,873

18,381

Leaseholdimprovements
USD 000

Cost
At 1 January 2023
Foreign currency exchange differences
Additions
Transfer*

–

–

–

–

(4,870)(4,870)Retirements/disposals(2,043)(97)(5,513)–(10,969)(18,622)

At 31 December 2023

17,569344

69,097

1,648

74,119

162,777

13,847391

47,351444

40,965102,998

46

(1)

574

(3)

499

1,115

1,132

28

8,074

29

14,31923,582

Depreciation and impairment
At 1 January 2023
Foreign currency exchange differences
Charge for the year
Transfer*

–

–

–

–

(4,870)(4,870)Retirements/disposals(1,900)(74)(5,306)–(10,785)(18,065)

At 31 December 2023

13,125344

50,693

470

40,128104,760

At 31 December 2023

4,444

–

18,404

1,178

33,99158,017

Year ended 31 December 2022

USD 000

USD 000

USD 000

USD 000

USD 000

USD 000

Net book value

Cost
16,213656

64,9601,848

77,677

161,354

Foreign currency exchange differences

At 1 January 2022

(812)

(39)

(4,136)(189)(4,179)(9,355)Additions

2,725

–

13,584–

17,87634,185

Transfer*

–

–

–

–

(6,481)(6,481)Retirements/disposals

(876)

(175)

(6,765)–(5,787)(13,603)

At 31 December 2022

17,250442

67,643

1,659

79,106

166,100
101,939

Depreciation and impairment
At 1 January 2022

14,223519

48,509462

38,226

Foreign currency exchange differences

(653)

(30)

(2,826)(48)(2,307)(5,864)Charge for the year

1,138

59

8,171

30

15,506

24,904

Transfer*

–

–

–

–

(6,481)(6,481)Retirements/disposals

(861)

(157)

(6,503)–(3,979)(11,500)

At 31 December 2022

13,847391

47,351444

40,965102,998

3,403

51

20,292

1,215

38,141

63,102Net book value
At 31 December 2022

* The transfer relates to the accumulated depreciation that was eliminated against the gross carrying amount of the remeasured asset
as at the modification date.

244

Financial Statements

Temenos AG Annual Report and Accounts 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
17. Intangible assets

Year ended 31 December 2023

Internallygenerated
softwaredevelopmentcosts
USD 000

Goodwill
USD 000

Computersoftware
USD 000

Customer
related
USD 000

Total
USD 000

Cost
At 1 January 2023

794,847

1,052,616

398,498

313,1392,559,100

Foreign currency exchange differences

3,026

13,757

3,389

3,388

23,560Additions

76,617

–

2,211

–

78,828874,490

1,066,373

404,098

316,527

2,661,488

559,685–

278,881

181,784

1,020,350

2,991

–

3,404

3,556

9,951

At 31 December 2023
Accumulated amortization and impairment
At 1 January 2023
Foreign currency exchange differences
Charge for the year

58,551–

33,48015,554

107,585

621,227–

315,765

200,894

1,137,886

At 31 December 2023

253,263

1,066,373

88,333

115,633

1,523,602

Year ended 31 December 2022

USD 000

USD 000

USD 000

USD 000

USD 000

2,525,262

At 31 December 2023
Net book value

Cost
714,830

1,086,394

400,569

323,469

Foreign currency exchange differences

At 1 January 2022

(6,324)(33,778)(9,669)(10,330)(60,101)

Additions

86,341

–

7,598

–

93,939794,847

1,052,616

398,498

313,1392,559,100
928,152

At 31 December 2022
Amortization
At 1 January 2022

501,563–

252,925

173,664

Foreign currency exchange differences(5,289)–(8,403)(7,803)(21,495)

Charge for the year

63,411–34,35915,923

113,693559,685–

278,881

181,784

1,020,350

235,162

1,052,616

119,617

131,355

1,538,750

At 31 December 2022
Net book value
At 31 December 2022

An amortization charge of USD 104.4 million (2022: USD 109.6 million) is included in “Cost of sales”; USD 0.5 million(2022: USD 0.7 million) in “Sales and marketing”; USD 0.5 million (2022: USD 0.8 million) in “Other operating expenses”;
and USD 2.2 million (2022: USD 2.6 million) in “General and administrative”.

Financial Statements

Temenos AG Annual Report and Accounts 2023

245

17. Intangible assets continued
Impairment tests for goodwill

Management has determined that there are two separate cash-generating units (CGUs), “Product” and “Services”. These CGUs havebeen determined to be the smallest group of assets which generate cash inflows largely independent of cash inflows from otherassets within the Group. Goodwill is allocated to the “Product” CGU, which is the same as the Product reportable segment.
2023“Product” CGU

2022

Carrying
amount
USD 000

Growth rate

1,066,373

1%

Discount rate

Carrying
amount
USD 000

Growth rate

Discount rate

10.91%

1,052,616

1%

11.10%The recoverable amount of the CGU is determined based on value-in-use calculations. These calculations use pre-tax cash
flow projections based on the most recent financial budget and plan approved by the management covering a four-year period(2022: a four-year period) and then extrapolated over a perpetual period using the estimated growth rate assigned to the countries
where the cash-generating unit operates. The growth rate does not exceed the long-term average growth rate for the software
industry in which the CGU performs its operations. The perpetuity growth rate and the pre-tax discount rate used in thecalculation are presented above.
Budgeted cash flow projections are determined based on the expectation of future client signings of the Group’s current pipeline.
Budgeted gross margin is in line with our history and takes into consideration market developments and efficiency leverage.
The Group is well positioned for growth in future years.
Management believes that any reasonable change in any of the key assumptions described above on which the recoverable
amount is based would not cause the reported carrying amount to exceed the recoverable amount of the cash-generating unit.
The discount rate represents the Group’s Weighted Average Cost of Capital adjusted for tax effect to determine the pre-tax rate
as required by IFRS.

18. Trade and other payables
2023
USD 000

2022
USD 000

Trade payables

23,87542,214

Accrued expenses

140,621106,174

Other payables

24,49723,498

Total trade and other payables

188,993

171,886

Trade and other payables are initially recorded at fair value and subsequently measured at amortized cost. As the total carrying
amount is due within the next 12 months from the balance sheet date, the impact of applying the effective interest method is not
significant and, therefore, the carrying amount equals the contractual amount or the fair value initially recognized.

Fair values of trade and other payables qualified as financial liabilities and measured at amortized cost
Carrying amountCurrent trade and other payables

Fair value2023
USD 000

2022
USD 000

2023
USD 000

2022
USD 000

180,595

159,357

180,595

159,357

The carrying amount of current trade and other payables is considered to be at fair value, due to their short-term nature.
The carrying amount of the items measured at fair value as well as their level in the fair value hierarchy is disclosed in note 3.4.

246

Financial Statements

Temenos AG Annual Report and Accounts 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
19. Borrowings
2023
USD 000

2022
USD 000

Current
4

26

Unsecured bonds

182,367

191,948

Lease liabilities

12,61912,163

194,990

204,137

Other loans

Non-current–

5Bank borrowings

50,639210,575

Unsecured bonds

497,906

399,332

Lease liabilities

21,141

26,754

569,686

636,666

Total borrowings

764,676

840,803

Other loans

Fair value of borrowings
Carrying amount2023
USD 000

Fair value2022
USD 000

2023
USD 000

2022
USD 000

4

31

4

27

Bank borrowings

50,639210,575

50,532

209,956

Unsecured bonds

680,273591,280

685,685

577,465

730,916

801,886

736,221787,448

Other loans

The fair value measurement of other loans and bank borrowings is based on a discounted cash flow method using observableinterest curve adjusted for credit risk and is within level 2 of the fair value hierarchy. The fair value measurement of the bonds
represents their dirty price that is derived from their quoted clean price on the SIX Swiss Exchange and is within level 1 of the fairvalue hierarchy.
The carrying amounts of borrowings are denominated in the following currencies:

Swiss francs

2023
USD 000

2022
USD 000

719,844734,556

US dollars

21,98979,451Other currencies

22,843

26,796764,676

840,803

Unsecured bonds

The Group holds the following unsecured bonds:n

CHF 150 million with a coupon of 1.75% paid annually on 5 April. The bond will mature on 5 April 2024 at par and was issued in 2017;n

CHF 220 million with a coupon of 1.50% paid annually on 28 November. The bond will mature on 28 November 2025 at par
and was issued in 2019; andn

CHF 200 million with a coupon of 2.85% paid annually on 11 October. The bond will mature on 11 October 2028 at par and wasissued in 2023.

In October 2023, the Group issued a senior unsecured bond with a nominal value of CHF 200 million and a coupon rate of 2.85%
paid annually on 11 October. The bond will mature on 11 November 2028 at a redemption price of 100% of the principal amount.
In November 2023, the Group repaid the senior unsecured bond issued in November 2018 with a nominal value of CHF 175 million
and a coupon rate of 1.875%. The redemption price was 100% of the principal amount.

Temenos AG Annual Report and Accounts 2023

Financial Statements

247

19. Borrowings continued
Bank facilities

The Group holds a multicurrency committed revolving facility of USD 660 million. The pertinent details are as follows:ninterest expense based on observable risk-free rate plus margin, which is calculated by reference to financial covenants;nthe facility terminates on 5 July 2026; andncommitment fees are due on the undrawn portion.

As at 31 December 2023, a total of USD 50.6 million (2022: USD 210.6 million) was drawn under this agreement.
The facility is subject to financial covenants which have been adhered to during the reported periods.

20. Leases

The Group primarily leases properties (office space) in the jurisdictions from which it operates. The Group also has leases
for equipment and vehicles.
Information about leases for which the Group is a lessee is presented below.

Amounts recognized in the statement of financial position
2023
USD 000

2022
USD 000

33,23337,450

Right-of-use asset
Property
Equipment

41

26

Vehicles

717

665

33,991

38,141

Total
Lease liabilities
Current

12,61912,163

Non-current

21,141

26,754

Total

33,76038,9172023
USD 000

2022
USD 000

13,944

15,12316

7

Amounts recognized in profit or loss
Leases under IFRS 16
Depreciation charge for right-of-use-assets
Property
Equipment
VehiclesTotal depreciation

359

376

14,31915,506

Interest on lease liabilities

1,156

1,000

Expenses relating to short-term leases

484

615

Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets

147

121

Amounts recognized in statement of cash flows

The total cash outflow for leases in 2023 was USD 15.4 million (2022: USD 16.0 million).
At 31 December 2023, the commitment on short-term leases was USD nil (2022: USD nil) which has not been includedin the measurement of lease liabilities.
At 31 December 2023, the Group had committed to leases which had not yet commenced. The total future cash outflows
for leases not reflected in lease liabilities is USD 8.3 million (2022: USD 0.3 million).

Extension and termination options

Some office property leases contain extension and termination options exercisable at a certain point in time of the contract
period. Where practicable, the Group seeks to include extension and termination options in new leases to provide operational
flexibility. The Group assesses at lease commencement whether it is reasonably certain to exercise the extension or termination
options. The Group reassesses the likelihood of the option to extend or terminate if a significant event or significant change incircumstances occurs which is within its control.

248

Financial Statements

Temenos AG Annual Report and Accounts 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
21. Taxation
Tax expense2023
USD 000

2022
USD 000

Current tax on profits for the year

37,66249,331

Adjustments in respect of prior years(10,566)

3,929

Total current tax

27,09653,260

Deferred tax – origination and reversal of temporary differences

11,110(21,717)

38,206

31,543

Total tax expense

Temenos AG is incorporated in Switzerland but the Group operates in various countries with various tax laws and rates.
Consequently, the effective tax rate may vary from period to period to reflect the generation of taxable income in tax jurisdictions.
A reconciliation between the reported income tax expense and the amount computed using the effective Swiss statutory
corporate tax rate for the Group of 14.0% (2022: 14.0%), is as follows:
2023
USD 000

2022
USD 000

Profit before tax

172,883

145,963

Tax at the domestic rate of 14.0% (2022: 14.0%)

24,204

20,435–(167)

Non-deductible expenses

628

1,509

Prior period adjustments(10,566)

3,929

Movement in temporary differences related to unprovided deferred tax 1

15,695(15,065)

Non-taxable income

Losses not recognized in period

9,331

3,505

Unprovided losses utilized(8,297)(4,303)

Effects of different tax rates

(564)

8,993

Overseas withholding tax

8,148

12,057

Other tax and credits
Total tax expense

(373)

650

38,206

31,543

Reconciliation notes:
1 In 2022, the ‘movement in temporary differences related to unprovided deferred tax’ relates mainly to the recognition of deferred tax assets frombrought forward losses which were not recognized prior to 2022. In 2023, it mainly relates to a deferred tax liability recognized on an outside basis
difference which is likely to reverse in the foreseeable future.

There is an income tax credit of USD 16.6 million (2022: USD nil) arising relating to components of other comprehensive income,specifically relating to the fair value of financial instruments, and USD 3.0 million income tax has been credited directly to equity(2022: USD 0.5 million) in relation to deferred remuneration and USD 2.0 million (2022: USD nil) has been debited to equity for thetax impact on movement ultimately arising from the Group’s investment in treasury shares.
The Group is within the scope of the OECD Pillar Two model rules. Switzerland, the jurisdiction in which Temenos AG is
incorporated, has introduced one element of Pillar 2, namely that the profits of Swiss companies be subject to a minimum
effective tax rate of 15%. This will come into effect from 1 January 2024. On other parts of Pillar 2, including Switzerland taxing the
profits of non-Swiss subsidiaries, Switzerland has said it will continue to monitor international developments and decide about
implementation at a later date.
Since the Pillar Two legislation was not effective at the reporting date, the Group has no related current tax exposure. The Groupapplies the exception to recognizing and disclosing information about deferred tax assets and liabilities related to Pillar Two
income taxes, as provided in the amendments to IAS 12 issued in May 2023.
Under the legislation, the Group is liable to pay a top-up tax for the difference between its GloBE effective tax rate per jurisdiction
and the 15% minimum rate. The majority of the entities within the Group have an effective tax rate that exceeds 15%. The only
significant jurisdiction where the recurring effective tax rate (calculated in accordance with paragraph 86 of IAS 12 and before
irrevocable WHT) is currently lower than 15% is Switzerland where the tax rate is 14% for year ended 31 December 2023.

Financial Statements

Temenos AG Annual Report and Accounts 2023

249

21. Taxation continued
Tax expense continued

The Group is in the process of assessing its exposure to the Pillar Two legislation for when it comes into effect. This assessment
indicates for Switzerland that the average effective tax rate based on accounting profit is 14% for the annual reporting period to
31 December 2023. However, although the average effective tax rate is below 15%, the Group might not be exposed to paying Pillar
Two income taxes in relation to Switzerland. This is due to the impact of specific adjustments envisaged in the Pillar Two
legislation which give rise to different effective tax rates compared to those calculated in accordance with paragraph 86 of IAS 12.
Due to the complexities in applying the legislation and calculating GloBE income, the quantitative impact of the enacted or
substantively enacted legislation is not yet reasonably estimable. Therefore, even for those entities with an accounting effective
tax rate above 15%, there may still be Pillar Two tax implications. The Group is currently engaged with tax specialists to assist themwith applying the legislation.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current
tax liabilities, and when the deferred income taxes relate to the same fiscal authority.
The movement in the deferred tax is as follows:
Tax
lossesUSD 000

Intangible
assetsUSD 000

Financial
instruments
USD 000

At 1 January 2022*

15,138(59,153)(5,520)1,536

Credited/(charged) to theincome statement

14,121

7,224

4,482

(5,985)Credited to equity

Accounting
provisions
USD 000

Retirement
benefits
USD 000

Other
STTDs
USD 000

Total
USD 000–

61(47,938)

646

1,229

21,717

–

–

–

–

–

486

486

163

569

(73)

(250)

26

(159)

276

At 31 December 2022*

29,422(51,360)(1,111)(4,699)

672

1,617

(25,459)(Charged)/credited to theincome statement(4,151)

8,514(13,404)

11,242737(14,048)(11,110)Foreign currency exchange
differences

Credited to othercomprehensive
income/equity
Foreign currency exchange
differences
At 31 December 2023

16,622

–

–

–

–

972

17,594

399

24

265

(1,161)

(10)

719

236

42,292(42,822)(14,250)

5,382

1,399

(10,740)(18,739)

Shown in the Balance sheet as within:
Deferred tax asset

29,929

3,355

7,997

20,000–

10,66571,946

Deferred tax liability

12,363(46,177)(22,247)(14,618)

1,399(21,405)(90,685)

Net asset/(liability)

42,292(42,822)(14,250)

5,382

1,399

(10,740)(18,739)* Refer to note 2.26.

USD 55.0 million of deferred tax assets are expected to be recovered after more than 12 months (2022: USD 43.7 million).
USD 78.4 million of deferred tax liabilities are expected to be recovered after more than 12 months (2022: USD 83.3 million).
An assessment of the realizability of deferred tax assets is made on a country by country basis, based on the weight of available
evidence including factors such as recent earnings history and expected future taxable income. Deferred tax assets are recognized
to the extent that realization of the related tax benefit through future taxable profits is probable.
The Group has not recognized deferred tax assets of USD 69.0 million (2022: USD 86.5 million) in respect of losses amounting to
USD 412.0 million (2022: USD 461.8 million) that can be carried forward against future taxable income. The expiry of these losses
is as follows:
2023
USD m

2022
USD m

Within 5 years

0.2

3.3

Between 5 years and 10 years

27.5

0.6

Between 10 years and 20 years

153.3

183.9

No expiry date

231.0

274.0

412.0

461.8

2022 comparatives for losses on which deferred tax is not recognized are represented, from amounts presented last year, to alignwith the basis applied for 2023.

250

Financial Statements

Temenos AG Annual Report and Accounts 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
21. Taxation continued
Tax expense continued

The Group has also not recognized deferred tax assets of USD 1.1 million (2022: USD 1.9 million) in relation to deferred compensation.
At the balance sheet date, the amount of temporary differences in relation to the investment in subsidiaries for which deferred tax
liabilities have been recognized was USD 136.9 million (2022: USD nil) resulting in a deferred liability of USD 19.9 million (within
Other STTDs above). The aggregate amount of such temporary difference for which deferred tax has not been recognized was USD
814.7 million (2022: USD 954.4 million). No liability has been recognized in respect of these differences because the Group is in aposition to control the timing of the reversal of temporary differences and the Group considers that it is probable that suchdifferences will not reverse in the foreseeable future.

22. Provisions for other liabilities and charges
Legalprovision
USD 000

Property
provision
USD 000

Termination
benefits
USD 000

Total
USD 000

At 1 January 2023

80

1,168

3,005

4,253

Foreign currency exchange differences

–

56

98

154

2,800

1,036

3,143

6,979

–

(22)

(3,376)(3,398)

Increase in provision recognized in profit or loss
Used during the year
Unused amounts reversed during the year
At 31 December 2023

(80)

(22)

(2,687)(2,789)

2,800

2,216

183

5,199

Legal
provision
USD 000

Property
provision
USD 000

Termination
benefits
USD 000

Total
USD 000

2,800

712

183

3,695

–

1,504

–

1,504

2,800

2,216

183

5,199

Reported as follows:

2023
Current
Non-current
At 31 December 2023
2022
Current

80

–

3,005

3,085

Non-current

–

1,168

–

1,168

At 31 December 2022

80

1,168

3,005

4,253

Legal provision

The amounts represent provisions for legal claims brought against the Group. The balance at 31 December 2023 is expected
to be utilized in 2024. Management believes that the outcome of these claims will not give rise to any significant loss beyond
the amounts provided at 31 December 2023.

Property provision

The property provision represents the net present value of estimated future costs associated with dilapidations. Provisions
for dilapidations represent the estimated costs to be incurred at the date of exit.
The non-current portion has not been discounted as the effect of the time value was not material.
The non-current portion of USD 1.5 million (2022: USD 1.2 million) relates to dilapidation costs that will be settled when the relatedleases are terminated, which is not expected to occur within the next 12 months.

Termination benefits

The termination benefits provision represents the benefits payable for the period with no future economic benefits to the Group.
The carrying amount has been treated as a non-cash item in the Cash flow statement and is expected to be fully utilized in 2024.

Temenos AG Annual Report and Accounts 2023

Financial Statements

251

23. Post-employment defined benefit obligations

The Group operates numerous defined benefit plans out of which the Swiss plans and one Indian plan are funded.
Swiss pension plans represent the majority of the Group’s total defined benefit obligations. They entitle retired employees toreceive either a capital or an annual pension payment. Final benefit is based on retirement savings accumulated over the working
life period of the employees. The plans are administrated by separate funds that are legally separated from the entity. Plans are
funded through institutional investments.
Swiss pension plans are governed by the Swiss Federal Law on Occupational Retirement, Survivors’ and Disability Pension Plans(LPP), which stipulates that pension plans are to be managed by independent and legally autonomous units. Plan participants are
insured against the financial consequences of old age, disability and death. The various insurance benefits are governed in regulations,with the LPP specifying the minimum benefits that are to be provided. The employer and employees pay contributions to thepension funds. In case the plan’s statutory funding falls below a certain level, various measures can be taken such as an increaseof the current contribution, lowering the interest rate on the retirement account balances or a reduction of the additional
prospective benefits. The Group can also make additional restructuring contributions.
The Swiss pension plans are managed and administrated by collective semi-autonomous foundations established by one of theleading insurance companies for pension plans based in Switzerland. The Board of Trustee of each foundation is composed ofequal numbers of employee and employer representatives.
One plan selected a foundation whereby the investment strategy and the appropriation of the return are delegated to the fundcommission, which is composed of Temenos’ representatives, and all within the framework set out by the LPP and the Board ofTrustee. In this model, the plan directly bears the investment risk. The other plan follows a solution where the investment strategy
and the allocation of return are established by the Trustees of the foundation. In this scheme, the investment risk, as well as thereturn, falls within all the affiliated participants of the foundation. In both plans the risk benefits of disability and death are fully
insured by an insurance company.
As all the plans within the Group are not exposed to materially different risks, management has decided not to present additional
disaggregation of the disclosures unless explicitly required by IAS 19 ‘Employee Benefits’.
The amounts recognized in the statement of financial position at 31 December are as follows:
2023
USD 000

2022
USD 000

Present value of funded obligations

66,81953,334

Fair value of plan assets(58,038)(51,319)

Deficit of funded plans

8,781

2,015

Present value of unfunded obligations

9,144

8,561

–

1,641

17,925

12,217

Impact of asset ceiling
Net liability

252

Financial Statements

Temenos AG Annual Report and Accounts 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
23. Post-employment defined benefit obligations continued
The movement in the net defined benefit liability over the year is as follows:

Balance at 1 January 2023

Present valueof obligation
USD 000

Fair valueof plan assets
USD 000

Total
USD 000

Effect ofasset ceiling
USD 000

Total
USD 000

61,895(51,319)

10,576

1,641

12,217

3,799

–

3,799

–

3,799

955

–

955

–

955

–

65

65

–

65

1,961

(1,516)

445

39

484

6,715

(1,451)

5,264

39

5,303

–

(542)

(542)

–

(542)

Items recognized in profit or loss:
Current service costs
Past service costs
Other costs
Interest expense/(income)Remeasurements included in OCI:
– Return on plan assets, excluding interest income
Actuarial loss/(gain) from:
314

–

314

–

314

– Financial assumptions

4,549

–

4,549

–

4,549

– Experience adjustments

2,539

–

2,539

–

2,539

– Change in asset ceiling

–

–

–

(1,797)(1,797)

7,402

(542)

6,860

(1,797)

5,063

4,215

(4,285)

(70)

117

47

– Demographic assumptions– Exchange differences
Contributions:–(2,766)(2,766)–(2,766)

1,079(1,079)–––(5,343)

3,404(1,939)–(1,939)(49)(4,726)(4,775)117(4,658)

Balance at 31 December 2023

75,963(58,038)

17,925–

17,925

Balance at 1 January 2022

66,925(53,103)

13,822-

13,822

4,047

–

4,047

–

4,047

777

–

777

–

777

–

56

56

–

56

- Employers– Plan participants
Payments:– Benefit paid

Items recognized in profit or loss:
Current service costs
Past service costs
Other costs
Interest expense/(income)

985

(616)

369

–

369

5,809

(560)

5,249

-

5,249

–

5,119

5,119

–

5,119

Remeasurements included in OCI:
– Return on plan assets, excluding interest income
Actuarial (gain)/loss from:
(279)

–

(279)

–

(279)

– Financial assumptions– Demographic assumptions(10,417)–(10,417)–(10,417)– Experience adjustments

2,009

–

2,009

–

2,009

– Change in asset ceiling

–

–

–

1,627

1,627

(8,687)

5,119(3,568)

1,627(1,941)(1,775)

1,350

(425)

14

(411)

– Exchange differences
Contributions:– Employers– Plan participants–(3,137)(3,137)–(3,137)

1,006(1,006)–––(1,383)18(1,365)–(1,365)(2,152)(2,775)(4,927)

14(4,913)

61,895(51,319)

10,576

1,641

12,217

Payments:– Benefit paid
Balance at 31 December 2022

Financial Statements

Temenos AG Annual Report and Accounts 2023

253

23. Post-employment defined benefit obligations continued

The defined benefit obligation is calculated using the projected unit credit method. This reflects service rendered by employees
to the date of valuation and incorporates actuarial assumptions primarily regarding discount rates and projected rates of
remuneration growth. The present value of the defined benefit obligation is determined by discounting the estimated future cash
outflows using interest rates of high-quality corporate bonds or government bonds in countries where there is not a deep market
in corporate bonds.

Plan assets comprise:
2023

2022

27%

27%

– Quoted

21%

23%

Real estate

25%

25%

Insurance contracts

21%

21%

Cash and cash equivalents

3%

1%

Other

3%

3%

100%

100%

Equity securities:– Quoted
Fixed income securities:

The governance of the plans annually performs an asset-liability assessment as well as a review of the investment strategies.
The objectives are to select an appropriate asset allocation to match future cash outflows, to ensure an appropriate diversificationof the invested assets as well as maximizing the return/risk profiles.

Actuarial assumptions

These defined benefit plans expose the Group to actuarial risks, such as currency risk, interest rate risk, demographic risk
and market risk (investment risk).
Actuarial assumptions are based on the requirement set out by IAS 19 ‘Employee Benefits’. They are unbiased and mutuallycompatible estimates of variables that determine the ultimate cost of providing post-employment benefits. They are based onmarket expectations at the reporting date for the period over which the obligations are to be settled. They are set on an annual
basis by independent actuaries.
Actuarial assumptions consist of demographic assumptions such as employee turnover, disability, mortality and financial
assumptions such as interest rates, salary growth and consumer price inflation. The actuarial assumptions vary based upon
local economic and social conditions.
The following are the principal actuarial assumptions at the reporting date (expressed as weighted averages):
2023

2022

Discount rate

3.17%

3.38%

Future salary growth

3.03%

2.75%

Sensitivity analysis

The sensitivity of the defined benefit obligation to changes in the principal assumptions is:
2023
Change in assumption
Increase
USD 000

Decrease
USD 000

Discount rate

50bps

(3,807)

4,213

Future salary growth

0.50%

905

(869)

2022
Change in assumption
Increase
USD 000

Decrease
USD 000

Discount rate

50bps

(2,829)3,099

Future salary growth

0.50%

701

(684)

The sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this isunlikely to occur since some of the assumptions are correlated. The sensitivity analysis has been calculated using the same
methodology as applied when determining the pension liability in the statement of financial position.

254

Financial Statements

Temenos AG Annual Report and Accounts 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
23. Post-employment defined benefit obligations continued
Sensitivity analysis continued

Expected contributions to funded post-employment defined benefit plans for the year ending 31 December 2024 are USD 3.2 million.
Expected benefit payments paid directly by the Group in respect of unfunded post-employment defined benefit plans for the year
ending 31 December 2024 are USD 1.0 million.
At 31 December 2023, the weighted average duration of the defined benefit obligation was eleven years (2022: ten years).

24. Share capital

As at 31 December 2023, the issued shares of Temenos AG comprised 75,171,084 ordinary shares with a nominal value of CHF 5 each. All
issued shares are fully paid.
The changes in the number of issued and outstanding shares in the year ended 31 December 2023 are summarized below:
NumberTotal number of shares issued as at 31 December 2022

74,935,760

Treasury shares(3,164,632)

Total number of shares outstanding as at 31 December 2022

71,771,128

Creation of new ordinary shares out of conditional capital for share-based payment transactions

235,324

Disposal of treasury shares

487,356

Total number of shares outstanding as at 31 December 2023

72,493,808

As at 31 December 2023 the number of treasury shares held by the Group amounted to 2,677,276 (2022: 3,164,632).
Temenos AG also has conditional capital, comprising:NumberConditional shares that may be issued on the exercise of share-based payment transactions

2,678,840

Conditional shares that may be issued in conjunction with financial instruments

6,607,904

25. Share premium and other reserves

Sharepremium
USD 000

Employeeshare
options
reserve
USD 000

Discounton shares
issued toemployees
USD 000

Negative
premiumarising on
creation of
Temenos
Group AGUSD 000

827,140

335,417(1,312,431)(68,456)(218,330)–

52,701––

52,701

15,822–(16,821)

–

(999)

(9)

–

–

–

(9)

Balance at 31 December 2022

842,953

388,118(1,329,252)(68,456)(166,637)

Cost of share options (note 27)–

52,914––52,914

Balance at 1 January 2022
Cost of share options (note 27)
Exercise of share-based payment transactions
Costs associated with equity transactions

Exercise/cash settlement of share-based payments

Total
USD 000

17,157(1,465)(22,197)–(6,505)

Loss on disposal of treasury shares––(24,317)–(24,317)

Costs associated with equity transactions

(15)

–

–

–

(15)

860,095

439,567(1,375,766)(68,456)(144,560)

Balance at 31 December 2023

Share premium

The share premium account comprises the following:npremium on issuance of new shares at a price above par value;nthe equity component determined at the issuance of the convertible bond in 2006 and the premium resulting from the early
redemption which occurred in 2010;n

expenses associated with equity transactions; andngains or losses on the sale, issuance or cancellation of treasury shares.

Financial Statements

Temenos AG Annual Report and Accounts 2023

255

25. Share premium and other reserves continued
Share options reserve

As detailed in note 27, the Group has issued instruments to employees. The fair value of these instruments are charged to the
profit or loss over the period that the related service is received, with a corresponding credit made to the share options reserve.

Discount on shares issued to employees

As detailed in note 27, the Group has issued instruments to employees. When the instruments are exercised, the Group fulfills its
obligations by issuing newly created shares out of conditional capital or by reissuing treasury shares purchased by the Group. To
the extent that the consideration received by the Group in respect of these shares issued or reissued is less than their fair value atthe time of exercise, this amount is allocated to the discount on shares issued to employees reserve.

Negative premium arising on creation of Temenos AG

Temenos AG was incorporated on 7 June 2001. The issued and outstanding shares of Temenos Holdings Limited (previously known
as Temenos Holdings NV) were exchanged shortly before the initial public offering for Temenos AG shares, thus rendering Temenos
Holdings Limited a wholly owned subsidiary of Temenos AG. The new shares in Temenos AG were issued at nominal value of CHF 5
which resulted in a negative premium. Expenses related to the initial public offering of Temenos AG and share premium items
arising prior to the creation of Temenos AG were recorded against this account.

26. Other equity

Balance at 1 January 2022*

Cumulativetranslation
adjustment *USD 000

Costs ofhedging
reserve
USD 000

Cash flow
hedge
reserve
USD 000

Total
USD 000(167,575)

(10)

3,303

(164,282)

Interest rate risk
Changes in fair value of hedging instruments––

11,633

11,633

Transfer to profit or loss within “Finance costs”

–

–

(380)

(380)

Foreign currency risk
Currency translation differences(29,120)––(29,120)

Transfer to profit or loss within “Personnel costs”

–

–

4,616

4,616

Transfer to profit or loss within “Software licensing revenue”

–

–

(786)

(786)

Transfer to “Deferred revenues”––(7,619)(7,619)Transfer to profit or loss within “Finance costs”––(2,899)(2,899)Interest payment from cross-currency swaps(1,714)––(1,714)

Changes in fair value of hedging instruments

11,727(460)(1,876)

9,391(186,682)

(470)

5,992

(181,160)

Balance at 31 December 2022
Interest rate risk
Changes in fair value of hedging instruments––(6,654)(6,654)

Transfer to profit or loss within “Finance costs”

–

–

(883)

(883)

Foreign currency risk
Currency translation differences(39,929)––(39,929)

Transfer to profit or loss within “Personnel costs”

–

–

413

413

Transfer to profit or loss within “Software licensing revenue”

–

–

49

49

Transfer to “Deferred revenues”

–

–

1,120

1,120

Interest payment from cross-currency swaps(3,840)––(3,840)Changes in fair value of hedging instruments

21,623

(800)

4,038

24,861(208,828)(1,270)4,075(206,023)

Balance at 31 December 2023
* Refer to note 2.26.

256

Financial Statements

Temenos AG Annual Report and Accounts 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
26. Other equity continued
Cumulative translation reserve

It includes the foreign currency differences arising from the translation of foreign operations’ financial statements into US dollars
as well as the effective portion of the hedging instruments in a net investment hedge.

Costs of hedging reserve

It includes the fair value change of the time value of options and the currency basis spreads of cross-currency swaps when they
are separated from the designation of the hedging instrument.

Cash flow hedge reserve

It includes the effective portion of the cumulative gain or loss from the hedging instrument that is not yet recognized either
in the profit or loss or as part of the carry amount of a non-financial asset or a non-financial liability.

27. Share-based payments
Share appreciation rights

Share appreciation rights (SARs) are granted to Executive Board members and selected employees. Share appreciation rights areconditional on the employee completing a specified period of service, and are only exercisable if the Group achieves specified
cumulative Annual Recurring Revenues (ARR), Bookings, non-IFRS earnings per share, and free cash flow targets. In case of
overachievement of targets, certain share appreciation right grants may be increased by a maximum of 75% of the original grant
for the SARs issued from 2021, a maximum of 40% for SARs issued prior. One individual had a special plan that vested at 250% in
2022 for delivery of specific KPIs. The vesting period for unvested share appreciation rights is a minimum of three years and theshare appreciation rights have a maximum contractual term of ten years. The Group has no legal or constructive obligation to
repurchase or settle the share appreciation rights in cash.
A summary of the movement in the number of share appreciation rights outstanding and their related weighted average exercise
prices are as follows:
2023

Outstanding at the beginning of the year
Granted during the year

2022

Number ofrights

Weighted
average
exercise
price

Number ofrights4,619,556$120.36

4,047,594$134.11

264,106$66.91

1,486,786$88.99Weighted
average
exerciseprice

Net over/(under) achievement relating to vesting of 2020 (2019) grants(300,005)$162.93(272,914)$138.49

Forfeited during the year

(1,255,881)$131.05(533,808)$144.56

Exercised during the year

(143,278)$44.54(108,102)$38.50

Outstanding at the end of the year

3,184,498$110.95

4,619,556$120.36

1,223,066 of the outstanding share appreciation rights (2022: 1,342,135) were exercisable at the balance sheet date with a weighted
average exercise price of USD 115.82 (2022: USD 112.72). The share appreciation rights exercised during the year had a weighted
average share price at the time of exercise of USD 60.95 (2022: USD 98.20).
As described above, in case of over achievement of targets, certain share appreciation rights granted in 2021 may be increased
by a maximum of 75% of the original grant. However, the achievement for the three years ended 31 December 2023 for the 2021
annual SAR plan was less than target: 76.7% of the SARs vested on 19 February 2024 resulting in 144,985 shares being forfeitedin 2024. There are 1,961,432 remaining share appreciation rights (2022: 1,317,180) that may be subject to the overachievement
provisions in the future with a weighted average exercise price of USD 107.91 (2022: USD 125.07).

Temenos AG Annual Report and Accounts 2023

Financial Statements

257

27. Share-based payments continued
Share appreciation rights continued

Share appreciation rights outstanding at the end of the year have exercise prices and weighted average remaining contractual lives
as follows:
2023

Exercise price

NumberRemaining
contractual
life (years)

0.92$30 – $39.99

61,034$40 – $49.99

52,5981.99$50 – $59.99

441,427

8.25$60 – $69.99

267,740

8.97$70 – $79.99

111,7812.89$80 – $89.99

2,394

3.24

$90 – $99.99

44,7784.15$100 – $109.99

589,850

7.86$110 – $119.99

45,8676.18$120 – $129.99

281,8224.05$130 – $139.99

291,552

4.86$140 – $149.99

688,187

6.93$150 – $159.99

61,8327.35$160 – $169.99

243,636

5.95

3,184,498

6.55

2022

Exercise price

NumberRemaining
contractual
life (years)$10 – $19.99

41,6360.16$30 – $39.99

68,023

1.93$40 – $49.99

52,622

3.13$50 – $59.99

545,541

9.21$60 – $69.99

3,634

3.95

$70 – $79.99

127,5024.50$80 – $89.99

11,458

8.41$90 – $99.99

126,634

5.56
9.13$100 – $109.99

843,450$110 – $119.99

48,0007.19$120 – $129.99

488,985

4.50$130 – $139.99

497,559

5.33$140 – $149.99

1,000,380

7.50$150 – $159.99

69,2008.51

694,932

7.06

4,619,556

7.06$160 – $169.99

Fair value of stock options and share appreciation rights

The fair value of options and share appreciation rights granted during the period is determined using an “Enhanced American
Pricing Model”.
The weighted average fair value of share appreciation rights granted during the period was USD 26.07 (2022: USD 22.47). The
significant inputs into the model were: weighted average share price at grant date of USD 66.91 (2022: USD 88.92), weighted
average exercise price of USD 66.91 (2022: USD 88.99), weighted average share price at valuation date (date targets were issued) of
USD 77.50 (targets issued on grant date in 2022), standard deviation of expected share price returns of 36% (2022: 35%), weighted
average option lives of 3.98 years (2022: 3.50 years), weighted average annual risk-free interest rate of 4.22% (2022: 2.89%) andweighted average expected dividend yield of 1.38% (2022: 1.31%). The volatility measured at the standard deviation of expectedshare price returns is based on statistical analysis of daily share prices over the relevant historical period.

258

Financial Statements

Temenos AG Annual Report and Accounts 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
27. Share-based payments continued
Restricted Shares (RSU and Short Term Incentive)
2023
Number ofshares2022
Number ofsharesOutstanding at the beginning of the year

362,959

281,376

Granted during the year

518,536

226,701

Forfeited during the year

(43,561)(16,956)

Vested/transferred during the year

(221,087)(128,162)

Outstanding at the end of the year

616,847

362,959

For the year ended 31 December 2023, a specific short-term incentive plan was in place for the Executive Committee (excluding
the CEO) and certain senior management. They were given specific bonus targets at the beginning of the year and offered a choiceof receiving the final bonus fully in cash or 50% in cash and 50% in deferred shares with a 20% uplift. In 2023, 6,258 (2022: 8,940)
deferred shares were committed under the scheme. Overachievement resulted in 432 additional shares being added following
the approval of 31 December 2023 results. 8,940 shares of the 2022 grant were forfeited in 2023 following the approval of the
31 December 2022 results. 5,396 shares relating to the year ended 31 December 2021 grant vested.
Other senior staff who fall under the Employee Short Term Variable Plan are paid 50% of their bonus in cash and 50% in shareswith a 20% uplift. In 2023, 32,927 deferred shares (2022: 54,862) were committed under a special bonus scheme granted during2023. 583 STI shares were forfeited in 2023 due to employees leaving prior to vesting. 52,651 shares relating to the year ended
31 December 2021 vested during 2023. The remaining 32,445 shares will vest in 2024, subject to continued service.
479,351 Restricted Share Units (RSUs) were granted as part of the annual LTI award. 30,194 shares granted in 2023 were forfeitedin 2023 due to employees leaving prior to vesting. 275 shares vested in 2023 following a retirement and a death. Of the remaining
shares granted in 2023, these will vest as follows: 1,765 shares in 2024, 224,404 shares in 2025, and a further 222,713 shares in
2026. Of the RSUs granted in 2021 for recognition and loyalty, 162,765 vested in 2023 and 3,844 were forfeited. Of the remaining
129,262, 106,762 will vest in 2024 and 22,500 in 2025.

Performance Share Units
2023
Number ofshares2022
Number ofsharesOutstanding at the beginning of the year259,263–Granted during the year

267,073

277,1132,877–

Forfeited during the year

(57,771)(17,850)

Vested/transferred during the year

(88,678)–

Outstanding at the end of the year

382,764

259,263

Net over/(under) achievement relating to vesting of 2023 grants

In 2022, we introduced Performance Share Units (PSUs). PSUs are granted to Executive Board members and selected employees.
They are conditional on the employee completing a specified period of service and are only vested if the Group achieves specified
cumulative Non-IFRS Bookings, Non-IFRS Earnings Per Share and Free Cash Flow targets. In case of overachievement of targets,certain PSU grants may be increased by a maximum of 75% of the original grant for the PSUs. The vesting period for unvested PSUs
is three years. 1,180 PSUs were transferred during the year as a result of retirement and death. 87,498 vested on 31 December 2023
and were transferred on 3 January 2024. The Group has no legal or constructive obligation to repurchase or settle the PSUs in cash.

Expense

The total expense recorded in the income statement in respect of share appreciation rights and the short-term incentive shareplan is USD 52.9 million (2022: USD 52.7 million).

28. Dividend per share

Dividends are proposed by the Board of Directors and must be approved by the Annual General Meeting of the Shareholders.
The dividend proposed for the 2023 financial year amounts to CHF 87.0 million (CHF 1.20 per share) and has not yet been recorded
as a liability. This amount may vary depending on the number of shares outstanding as of the ex-dividend date.
A dividend of CHF 79.1 million (USD 88.3 million, CHF 1.10 per share) was paid in 2023 relating to the 2022 financial year.

Temenos AG Annual Report and Accounts 2023

Financial Statements

259

29. Commitments and contingencies

The Group’s principal contingent liabilities arise from property rental guarantees, performance guarantees and bid bonds issued in
the normal course of business. The Group is also involved in various lawsuits, claims (including acceptance of mediation claims),
investigations and proceedings incidental to the normal conduct of its operations. These matters also include any ongoing tax
audits and assessments.
Although an estimate of the future financial effects cannot be reliably and precisely estimated at the reporting date, it is not
anticipated that any material liabilities will arise from these contingent liabilities other than those provided for in note 22.
As at 31 December 2023, total guarantees in issue were USD 9.1 million (2022: USD 8.9 million).

30. Related party transactions and balances

See note 10 for remuneration of Executive and Non-Executive Directors. See note 27 for equity compensation for Executive and
Non-Executive Directors granted in the form of options, SARs and shares.
There was no other significant transaction with related parties during the years ended 31 December 2023 and 31 December 2022.

31. Events after the reporting period

In February 2024, a report was published by Hindenburg Research, containing several allegations against Temenos. The Board
formed a Special Committee to oversee an independent examination of the allegations raised in this report. To assist in theexamination, the Board retained the services of a leading global professional services firm with expertise in forensic accounting
and investigations, a firm as Swiss counsel, and a firm as US counsel. Based on the results of the investigation, Temenos
concluded that there is no impact on its consolidated financial statements.
On 5 April 2024, the Group repaid the senior unsecured bond issued in April 2017 with a nominal value of CHF 150 million
and a coupon rate of 1.75%, the repayment was funded by drawing against the Group facility. The redemption price was 100%of the principal amount.
There are no other reportable events that occurred after the reporting period.

Financial Statements

260

Temenos AG Annual Report and Accounts 2023

Report of the statutory auditor
to the General Meeting of Temenos AG
GenevaReport on the audit of the financial statements
OpinionWe have audited the financial statements of Temenos AG (the Company), which comprise the balance sheet as at
31 December 2023, and the income statement for the year then ended, and notes to the financial statements, including
a summary of significant accounting policies.
In our opinion, the accompanying financial statements comply with Swiss law and the Company’s articles ofincorporation.
Basis for opinion
We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities
under those provisions and standards are further described in the 'Auditor’s responsibilities for the audit of the financial
statements' section of our report. We are independent of the Company in accordance with the provisions of Swiss law
and the requirements of the Swiss audit profession, and we have fulfilled our other ethical responsibilities in accordancewith these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our audit approach
Materiality
The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reasonableassurance that the financial statements are free from material misstatement. Misstatements may arise due to fraud or
error. They are considered material if, individually or in aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overallmateriality for the financial statements as a whole as set out in the table below. These, together with qualitative
considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures
and to evaluate the effect of misstatements, both individually and in aggregate, on the financial statements as a whole.
Overall materiality

CHF 13'285'000

Benchmark applied

Total assets

Rationale for the materiality
benchmark applied

We chose total assets as a benchmark to determine the overall materiality as
we consider total assets to be the most appropriate measure for a holding
company and is a generally accepted benchmark.

We agreed with the Audit Committee that we would report to them misstatements above CHF 660'000 identified during
our audit as well as any misstatements below that amount which, in our view, warranted reporting for qualitative reasons.

PricewaterhouseCoopers SA, avenue Giuseppe-Motta 50, case postale, 1211 Genève 2, Switzerland
Téléphone: +41 58 792 91 00, www.pwc.ch
PricewaterhouseCoopers SA is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity.

Temenos AG Annual Report and Accounts 2023

Financial Statements

Audit scope
We designed our audit by determining materiality and assessing the risks of material misstatement in the financial
statements. In particular, we considered where subjective judgements were made; for example, in respect of significant
accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As
in all of our audits, we also addressed the risk of management override of internal controls, including among othermatters consideration of whether there was evidence of bias that represented a risk of material misstatement due tofraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial
statements as a whole, taking into account the structure of the Company, the accounting processes and controls, andthe industry in which the Company operates.
Key audit matters
We have determined that there are no key audit matters to communicate in our report.
Other information
The Board of Directors is responsible for the other information. The other information comprises the information includedin the annual report, but does not include the financial statements, the consolidated financial statements, theremuneration report and our auditor’s reports thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form ofassurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doingso, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, weare required to report that fact. We have nothing to report in this regard.
Board of Directors' responsibilities for the financial statements
The Board of Directors is responsible for the preparation of financial statements in accordance with the provisions of
Swiss law and the Company’s articles of incorporation, and for such internal control as the Board of Directors determines
is necessary to enable the preparation of financial statements that are free from material misstatement, whether due tofraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the Company's ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
Swiss law and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with Swiss law and SA-CH, we exercise professional judgement and maintainprofessional scepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,

design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is3 Temenos AG | Report of the statutory auditor to the General Meeting

261

262

Financial Statements

Temenos AG Annual Report and Accounts 2023

higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theCompany's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made.

• Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company tocease to continue as a going concern.

We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them regarding all relationships and other mattersthat may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threatsor safeguards applied.
From the matters communicated with the Board of Directors or its relevant committee, we determine those matters thatwere of most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about thematter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our reportbecause the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefitsof such communication.

Report on other legal and regulatory requirements
In accordance with article 728a para. 1 item 3 CO and PS-CH 890, we confirm the existence of an internal control
system that has been designed, pursuant to the instructions of the Board of Directors, for the preparation of the financial
statements.
We further confirm that the proposed appropriation of available earnings complies with Swiss law and the Company’s
articles of incorporation. We recommend that the financial statements submitted to you be approved.

4 Temenos AG | Report of the statutory auditor to the General Meeting

Financial Statements

Temenos AG Annual Report and Accounts 2023

PricewaterhouseCoopers SA

Yazen Jamjum

Hamza Benhlal

Licensed audit expert
Auditor in charge
Geneva, 15 April 2024
Enclosures:• Financial statements (balance sheet, income statement and notes)• Proposed appropriation of available earnings

5 Temenos AG | Report of the statutory auditor to the General Meeting

263

264

Financial Statements

Temenos AG Annual Report and Accounts 2023

UNCONSOLIDATED BALANCE SHEETAs at 31 December
2023
CHF 000

2022
CHF 000

AssetsCurrent assets
Liquid funds
Receivables from other Group entities
Tax receivable
Other financial assets

186

209

29,77925,860–257

41,481

20,049551

682

71,99747,057Long-term receivables from other Group entities

1,169,481

1,273,764

Investments in subsidiaries (note 2)

1,415,522

1,415,522

Other financial assets (non-current)–

23,648Prepayments
Total current assets
Non-current assets

Total non-current assets

2,585,003

2,712,934

Total assets

2,657,000

2,759,991

Liabilities and shareholders’ equity
Current liabilities
443

3,043

Payables to other Group entities

243,096284,594

Short-term interest-bearing liabilities (note 7)

153,511

177,507

Other liabilities

4,008

4,135

173

551

401,231469,830

Long-term interest-bearing liabilities (note 7)

419,122369,291

Long-term interest-bearing payables to other Group entities

52,60052,600Total non-current liabilities

471,722421,891

375,855

374,679

Trade payables

Tax payable
Total current liabilities
Non-current liabilities

Shareholders’ equity
Share capital (note 3)

51,141

51,080Share premium (note 4)

834,872

819,334

Reserve for treasury shares (note 4)

242,615

358,135

Retained earnings (note 4)

351,747

328,902

Ordinary legal reserve (note 4)(72,183)(63,860)

Total shareholders’ equity

1,784,047

1,868,270

Total shareholders’ equity and liabilities

2,657,000

2,759,991

Treasury shares (note 5)

Temenos AG Annual Report and Accounts 2023

Financial Statements

265

UNCONSOLIDATED INCOME STATEMENT
For the year ended 31 December
2023
CHF 000

2022
CHF 000

10,000

–

114

5,134

Expenses associated with the maintenance of the Register of Shareholders and other expenses(4,462)(3,102)

Income from investments in subsidiaries (note 8)
Financial income
Profit before taxation

5,652

2,032

Taxation

(258)

(812)

Profit for the year

5,394

1,220

266

Financial Statements

Temenos AG Annual Report and Accounts 2023

NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS
31 December 2023
1. Legal status and principal activities

Temenos AG (the “Company”) was incorporated in Glarus, Switzerland, on 7 June 2001 as a stock corporation (Aktiengesellschaft).
Since 26 June 2001, the shares of Temenos AG have been publicly traded on the SIX Swiss Exchange. The registered office islocated at 2 Rue de l’Ecole-de-Chimie, 1205 Geneva, Switzerland.
Temenos AG is the ultimate holding company of the Group and is not otherwise engaged in trading, financing or investing activities,
except as the holder of all the issued and outstanding shares of the subsidiaries described in note 2.
The financial statements of Temenos AG comply with the requirements of the Swiss Accounting Legislation (Title 32 of the Swiss
Code of Obligations (SCO)).

Valuation principles

Assets are valued at no more than their acquisition cost.
Investments in subsidiaries are valued individually except when they are combined due to their similarity in terms of activities,
financial interconnection or grouped as an economic unit for valuation purposes.
Other investments are initially recognized at cost, then assessed annually and, in case of impairment, adjusted to theirrecoverable amount.
Treasury shares are valued at historical acquisition cost without subsequent valuation adjustment.
Upon disposal, the cost of treasury shares is determined using the FIFO method except if the specific identification method
represents more faithfully the cost of the disposed shares. This would only be the case in limited circumstances where thedisposed shares can be specifically identified (for example, if the shares are specifically purchased with the intention of being
disposed of shortly thereafter). The resulting gains and losses on all disposals of treasury shares are recorded directly in equity.
Liabilities are valued at nominal value.
All assets and liabilities denominated in foreign currencies are translated according to the exchange rates applicable at theBalance sheet date. Income and expenses denominated in foreign currencies and all foreign exchange transactions are translated
at the exchange rates prevailing on their respective transaction dates. Resulting foreign exchange differences are recognized in the
Income statement, except unrealized gains that are deferred on Balance sheet as per the Swiss Code of Obligations.

2. List of direct subsidiaries

The following are the direct subsidiaries of the Company, which are wholly owned unless otherwise indicated (percentage
of voting rights).
Voting rights

Temenos Holdings Limited, British Virgin Islands (holding company)
40,105 shares of a nominal value of USD 1 each100%

Temenos Headquarters SA, Switzerland (holding and licensing company)
1,000 shares of a nominal value of CHF 100 each100%

Temenos Investments BV, Netherlands (holding company)
180 shares of a nominal value of EUR 100 each100%

Temenos Egypt LLC, Egypt (operating company)
1 share of a nominal value of EGP 100

50%

Temenos Luxembourg SA, Luxembourg (operating company)
47,250 shares of a nominal value of EUR 25 each100%

Temenos Finance Luxembourg SARL, Luxembourg (financing company)
37,500 shares of a nominal value of EUR 1 each100%

Temenos USA Inc., USA (operating company)
100 shares of a nominal value of USD 0.01 each100%

Temenos Panama SA, Panama (dormant company)
100 shares of a nominal value of USD 100 each100%

Financial Statements

Temenos AG Annual Report and Accounts 2023

267

3. Share capital

As at 31 December 2023, the issued share capital amounts to CHF 375,855,420 and comprises 75,171,084 shares with a nominal
value of CHF 5.
The shares issued by the Company during the year are set out below:
2023
Value
in CHF

Quantity

Value
in CHF

74,935,760 374,678,800

74,742,268

373,711,340

Quantity

Total number of Temenos AG shares issued, as at 1 January
Shares issued and allotted under Employee Share Option Schemes
Total number of Temenos AG shares issued, as at 31 December

2022

1,176,620

193,492

967,460

75,171,084 375,855,420

235,324

74,935,760

374,678,800

Temenos AG also has conditional capital, comprising:2023

Conditional shares that may be issued on the exercise of employee share options

2,678,840

Conditional shares that may be issued in conjunction with financial instruments

6,607,904

The holdings of more than 3% of the voting rights of all registered shares, as at 31 December 2023, are as follows:
Voting rightpercentage

Martin and Rosmarie Ebner

12.98%BNP Paribas SA

11.19%

BlackRock Inc.

5.53%

Baillie Gifford & Co

4.65%

UBS Fund Management (Switzerland) AG

3.06%

268

Financial Statements

Temenos AG Annual Report and Accounts 2023

NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
4. Share premium and capital reserves
Sharecapital
CHF 000

Ordinary
legalreserve
CHF 000

Share
premium
CHF 000

Reservefor treasury
shares
CHF 000

Retainedearnings
CHF 000

Treasuryshares
CHF 000

373,71150,966804,011358,135

399,437(63,860) 1,922,400– to General legal reserve

–

115

–

–

(115)

–

–

Distribution of an ordinary dividend in cash as per
2022 Annual General Meeting (AGM) resolution

–

–

–

–

(71,641)–(71,641)

Share capital and share premium on creation of
conditional capital

967–

15,323–––

16,291–

1,220

Balance at 1 January 2022

Total
CHF 000

Appropriation of available earnings:

Profit for the year

–

–

–

–

1,220

374,679

51,080819,334

358,135

328,902– to General legal reserve

–

61

–

–

(61)

–

–

Distribution of an ordinary dividend in cash as per2023 Annual General Meeting (AGM) resolution

–

–

–

–

(79,068)–(79,068)

1,177–

15,538–––

16,715

Treasury shares used for Temenos Employee Share
Option Schemes

–

–

–

–

–

–

–

Acquisition of treasury shares

–

–

–

–

–

(60,316)(60,316)

Disposal of treasury shares

–

–

–

–

–

51,99351,993

Loss from disposal of treasury shares

–

–

–

–

(18,940)–(18,940)

Reserve for treasury shares movement of the year

–

–

–

(115,520)

115,520––

Profit for the year

–

–

–

–

5,394

–

5,394

375,855

51,141

834,872

242,615

351,747

Balance at 31 December 2022

(63,860) 1,868,270

Appropriation of available earnings:

Share capital and share premium on creation of
conditional capital

Balance at 31 December 2023

(72,183) 1,784,047

The reserve for treasury shares amounts to CHF 242,614,688 in line with the value of treasury shares held by Temenos AG througha subsidiary as at 31 December 2023 (2022: CHF 358,134,688).

5. Treasury shares, including shares held by subsidiaries (carrying value)

Temenos AG holds directly or through a subsidiary a total of 2,677,276 shares at 31 December 2023 (2022: 3,164,632) that entirely
may be used in conjunction with M&A, for resale or for allotting to members of the Temenos Employee Share Option Schemes.
2023

2022

Quantity

Value
in CHF 000

Quantity

Value
in CHF 000

January 1

600,000

63,860600,000

63,860Acquisitions

800,000

60,316––

Disposals(487,356)(51,993)––

December 31

912,644

72,183600,000

63,8602,564,632

358,135

2,564,632

358,135

Temenos AG

Other consolidated companies
January 1

–

–

–

–

(800,000)(115,520)––

December 31

1,764,632

242,615

2,564,632

358,135

Total balance as of 31 December

2,677,276

314,798

3,164,632

421,995

Acquisitions
DisposalsTemenos AG Annual Report and Accounts 2023

Financial Statements269

6. Contingent liabilities

Together with several of its subsidiaries, Temenos AG is a guarantor under the Group facility agreement concluded by Temenos
Finance Luxembourg Sarl as borrower, for a maximum total amount up to USD 660 million.

7. Bonds issued by Temenos AG

In April 2017, the Group issued a senior unsecured bond with a nominal value of CHF 150 million and a coupon rate of 1.75% paid
annually on 5 April. The bond will mature on 5 April 2024 at a redemption price of 100% of the principal amount.
In November 2019, the Group issued a senior unsecured bond with a nominal value of CHF 220 million and a coupon rate of 1.50%
paid annually on 28 November. The bond will mature on 28 November 2025 at a redemption price of 100% of the principal amount.
In October 2023, the Group issued a senior unsecured bond with a nominal value of CHF 200 million and a coupon rate of 2.85%
paid annually on 11 October. The bond will mature on 11 November 2028 at a redemption price of 100% of the principal amount.
In November 2023, the Group repaid the senior unsecured bond issued in November 2018 with a nominal value of CHF 175 million
and a coupon rate of 1.875%. The redemption price was 100% of the principal amount.
2023
CHF 000

2022
CHF 000–

149,868

Bond CHF 220,000,000 – 1.500% – 28 November 2019 – 28 November 2025

219,625

219,423

Bond CHF 200,000,000 – 2.850% – 11 October 2023 – 11 October 2028

199,497–

Long-term interest-bearing liabilities

419,122369,291–

171,407

151,935–

Bond CHF 150,000,000 – 1.750% – 5 April 2017 – 5 April 2024

Bond CHF 175,000,000 – 1.875% – 30 November 2018 – 30 November 2023
Bond CHF 150,000,000 – 1.750% – 5 April 2017 – 5 April 2024
Accrued bond interests at year end

1,576

6,100

Short-term interest-bearing liabilities

153,511

177,507

Total bonds issued by Temenos AG

572,633

546,798

8. Income from investments in subsidiaries

In 2023, Temenos AG recognized income from investments in subsidiaries of CHF 10 million following the decision of one of its
direct subsidiaries to distribute a dividend in relation to the 2023 fiscal year. No dividend was recognized in 2022.

9. Proposal for the appropriation of available earnings

Based on the approved and audited financial statements for the financial year 2023, the Board of Directors proposes to theGeneral Meeting to distribute an ordinary dividend in cash amounting to CHF 1.20 per share, for a total amount of CHF 87,000,000(this amount may vary depending on the number of treasury shares and of shares created out of the conditional capital as of the
ex-dividend date).
2023
CHF 000

2022
CHF 000

249,773

327,682

5,394

1,220

Loss from disposal of treasury shares(18,940)–

Retained earnings available to the general meeting

236,227

328,902

(270)

(61)

Retained earnings
Retained earnings carried forward
Net result for the year

Allocation to general legal reserve
Dissolution of reserve for treasury shares

115,520–

Dividend distributed to shareholders(87,000)(79,068)

Retained earnings to be carried forward

264,477

249,773* 2022 comparative has been updated from CHF 79,000,000 to CHF 79,068,072 to reflect the actual payment made in 2023. The dividend paid was
CHF 1.10 per share as approved by the General Meeting. The difference is explained by the amount of treasury shares as of the ex-dividend date.

Provided that the proposal of the Board of Directors is approved, the shares will be traded ex-dividend as of 10 May 2024 (Ex date).
The dividend record date will be set on 13 May 2024 (Record date). The dividend will be payable as of 14 May 2024 (Payment date).
Temenos treasury shares are not entitled to dividends.

10. Number of full-time equivalent

Temenos AG does not have any employees as of 31 December 2023 and 2022 and consequently no pension liabilities.

Financial Statements

270

Temenos AG Annual Report and Accounts 2023

NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS continued
31 December 2023
11. Additional information, cash flow statement and management report

According to article 961d paragraph 1 of the Swiss Code of Obligations, additional information, the cash flow statement
and the management report are not presented, as Temenos AG prepares the consolidated financial statements in accordancewith a recognized financial reporting standard.

12. Significant events after the balance sheet date

These financial statements were approved for issue by the Board of Directors on 14 April 2024 and will be submitted to the Annual
General Meeting of Shareholders for approval on 7 May 2024.
In February 2024, a report was published by Hindenburg Research, containing several allegations against Temenos. The Board
formed a Special Committee to oversee an independent examination of the allegations raised in this report. To assist in theexamination, the Board retained the services of a leading global professional services firm with expertise in forensic accounting
and investigations, a firm as Swiss counsel, and a firm as US counsel. Based on the results of the investigation, Temenos
concluded that there is no impact on its unconsolidated financial statements.
On 5 April 2024, the Group repaid the senior unsecured bond issued in April 2017 with a nominal value of CHF 150 million and acoupon rate of 1.75%. The repayment was funded by drawing against the Group facility agreement. The redemption price was 100%of the principal amount.
There were no other significant events after the balance sheet date.

13. Disclosure of participations held by Non-Executive Directors and Executive Committee members
Non-Executive Directors
Numberof shares
31 December
2023

Numberof shares
31 December
2022

Name

Position

T. de Tersant

Chairman

9,000

9,000

I. Cookson

Vice-Chairman

17,40017,400P. Spenser 1

Member

1,800

1,800

M. Carli

Member

1,000

1,000
–

D. Forster

Member60

C. Hultén

Member

1,200–

X. Cauchois

Member as from 3 May 2023

600

n/a

D. Deuring

Member as from 3 May 2023–

n/a

H. Akbari1

Member until 3 May 2023

n/a

1,460

E. Hansen

Member until 3 May 2023

n/a

2,500

J. Benson

Member until 3 May 2023

n/a

360

Numberof unvested
RSUs/PSUs
31 December
2022

1

1 Peter Spenser, Homaira Akbari and James Benson held shares in the form of American depositary receipts (ADRs).

Executive Committee members
Numberof shares
31 December
2023

Numberof vested PSUs
31 December
2023

Numberof unvested
RSUs/PSUs
31 December
2023

Numberof shares
31 December
2022

846,752

87,498 1–

846,752

–

n/a

–

–

75,000

8,284

Name

Position as at 31 December 2023

A. Andreades

CEO

M. Chuard

CEO, until 12 January 2023

P. Spiliopoulos

CFO

–

–

–

–

–

P. VaradhanPresident Product and COO––

38,470

1,448

5,319

J. Tipper

CPO

–

–

9,101

–

3,082

C. Jarrett

CSRO

2,138

–

14,365

2,138

4,650

1 Andreas Andreades’ PSUs granted on 16 January 2023 vested on 31 December 2023 and resulting shares were transferred on the first working
day thereafter.

Financial Statements

Temenos AG Annual Report and Accounts 2023

271

13. Disclosure of participations held by Non-Executive Directors and Executive Committee members
continued
Executive Committee members continued
Number of
Number ofvestedunvested
Exercise
SARs
SARs
price 31 December 31 December
USD
2023
2023

Number ofvestedSARs
31 December
2022

Number ofunvested
SARs
31 December
2022

Name

Position as at
31 December 2023

Grant
year 1Plan

A. Andreades

CEO

2018

2018 scheme

127.00135,203–

135,203–20192019 scheme

136.94

83,160–83,160–2020

2020 scheme2

168.81

61,507––

131,800

2021

2021 scheme3

143.54–

144,700–

144,700

M. Chuard4

P. Spiliopoulos

C. Jarrett

P. Varadhan
J. Tipper

2022

2022 scheme

107.65–

186,700–

186,700

CEO,

2018

2018 scheme

127.00––117,793–

until 12 January 2023

2019

2019 scheme

136.94––

100,851–2020

2020 scheme2

168.81–––

159,8502021

2021 scheme3

143.54–––

175,500

2022

2022 scheme

107.65–––

226,400

CFO

CSRO

2019

2019 scheme

147.4342,000–42,000–2020

2020 scheme2

168.8133,600––72,0002021

2021 scheme3

143.54–79,000–79,0002022

2022 scheme

107.65–

107,100–

107,100

2023

2023 scheme

66.91

–

171,951

–

–

2020

2020 scheme2

168.81

11,667––25,0002021

2021 scheme3

143.54–15,000–15,0002022

2022 scheme

107.65–

18,150–18,1502023

2023 scheme

66.91

–

18,807––

President Product2022

2022 scheme

107.65–

15,400–15,400and COO

2023

2023 scheme

66.91

–

60,183

–

–

CPO

2022

2022 scheme

107.65

–

9,050

–

9,050

2023

2023 scheme

66.91

–

13,165––

1 The SARs shown above only include SARs granted during membership of the Executive Committee.
2 The SARs granted under the 2020 scheme vested on 20 February 2023. The final vesting was at 46.67%. The 2022 numbers were reducedby 53.33% in 2023.
3 The SARs granted under the 2021 scheme vested on 19 February 2024. The final vesting was at 76.7%. The numbers above will be reduced
by 23.3% in 2024.
4 Max Chuard is not a member of the Executive Committee on 31 December 2023, he was on garden leave. The SARs that vested on his termination
were paid at fair value and hence all outstanding SARs canceled.

No options and/or shares were held on 31 December 2023 and 2022 by persons related to the members of the Board of Directors
or the Executive Committee.

272

Financial Statements

Temenos AG Annual Report and Accounts 2023

FINANCIAL HIGHLIGHTS(in millions of US dollars except earnings per share)
2023

2022

2021

2020

2019

Revenues

1,000.2

949.6

967.0

887.4

972.0

Operating expenses(800.8)(786.2)(728.9)(653.8)(736.6)

Operating profit

199.4

163.4

238.1

233.6

235.4

Profit before taxation

172.9

146.0

211.5

204.2

212.6

Net profit after tax

134.7

114.4

173.4

175.0

181.1

EBITDA

330.5

302.0

382.1

382.6

366.0

Diluted earnings per share (in USD)

1.85

1.59

2.40

2.39

2.46

Cash generated from operations

391.5

316.6

473.0

406.2

364.3

462.9

438.5

478.6

446.3

552.6

Non-current assets

1,863.9

1,793.3

1,755.5

1,769.4

1,779.0

Total assets

2,326.8

2,231.8

2,234.1

2,215.7

2,331.7

Current liabilities (excluding deferred revenues)

482.6

508.4

501.2

247.2

396.1

Deferred revenues

460.8

411.1

371.6

324.1

287.4

Total current liabilities

943.4

919.5

872.8

571.3

683.5

Non-current liabilities (excluding deferred revenues)*

680.5

721.3

835.0

1,088.3

1,203.1

21.0

12.7

26.1

32.7

–

Current assets

Deferred revenues

701.5

733.9

861.1

1,121.0

1,203.1

Total liabilities

1,644.9

1,653.4

1,734.0

1,692.3

1,886.6

Total equity*

682.0

578.4

500.1

523.4

445.1

2,326.8

2,231.8

2,234.1

2,215.7

2,331.7

Total non-current liabilities

Total equity and liabilities* Refer to note 2.26.

Financial Statements

Temenos AG Annual Report and Accounts 2023

273

INFORMATION FOR INVESTORSCapital structure

The registered share capital is divided into 75,171,084 shareswith a par value of CHF 5.

Appropriation of profits

Major shareholders of Temenos AG*(as of 4 April 2024)
Numberof votingrightsPercentageof the sharecapitalMartin and Rosmarie Ebner

9,730,000

12.94%

BlackRock Inc.

4,141,849

5.51%

Baillie Gifford & Co

3,485,355

4.64%

UBS Fund Management(Switzerland) AG

2,292,935

3.05%

Name

Temenos expects to pay a dividend of CHF 1.20 in 2024.

Register of shareholders
areg.ch ag
Fabrikstrasse 104614 Hägendorf
Switzerland
www.areg.ch* 	On the basis of Temenos AG registered capital of 75,171,084 sharesand based on the disclosure notifications received pursuant to Art.
120 ff. of the Financial Market Infrastructure Act (excluding Temenos
treasury shares).

Investor relations
Adam Snyder

Head of Investor Relations

Please refer to page 164 for the status as of 31 December 2023.

Panagiotis “Takis” Spiliopoulos

Development of Temenos share price

Chief Financial Officer

Temenos share price and volume data

Esplanade de Pont-Rouge 9C
1212 Grand-Lancy
Switzerland

100

Phone: +41 22 708 11 50
Email: TemenosIR@temenos.com

2,500,000

90

Annual General Meeting80

2,000,000

10

TEMN

0

75,171,084

Number of registered shares at 31.12.2023

74,947,402

Market price high/low (CHF)

78.98/53.16

Market price at 31.12.2022 (CHF)
Market price at 31.12.2023 (CHF)

50.74
78.22

Market capitalization high/low (CHFbn)*

5.918/3.984

Share capital nominal value at 31.12.2023(CHFm)*

375* Based on the number of registered shares at the time.
Key figures per share

2023

Basic earnings per share (USD)

1.87

Diluted earnings per share (USD)

1.85

Non-IFRS earnings per share (USD)

3.19

Consolidated shareholders’ equity (USDm)

682.0

Consolidated shareholders’ equity per share (USD)

9.07

0

Price  

VolumeDec 23CH0012453913

SymbolNov 23

ISIN no.
Number of issued shares at 31.12.2023

500,00020

Oct 23

124 5391

Sep 23Swiss security no.

30

Jul 23

SMIM/SPI/SLI

1,000,000

Aug 23

Index member40

Jun 23

SIX Main Market

May 23Market segment50

Apr 23

Technology/
software1,500,000

Feb 23

Sector60

Mar 232023

Jan 23

Registered shares of CHF 5 nominal

Price (CHF)70

Statistics on Temenos shares

Volume (no. of shares)

7 May 2024

274

Financial Statements

Temenos AG Annual Report and Accounts 2023

TEMENOS WORLD OFFICES

The following list is as of April 2024. For any updated information please visit our website: www.temenos.com/contact-us.

AmericasBrazilSão Paulo
Temenos Software Brasil Ltda
Av. Brig Faria Lima, 3144 – 3ro AndarSão Paulo, SP 01451-001
BrazilTel: +55 11 3568 2549

CanadaTorontoTemenos Canada Inc.
2425 Matheson Boulevard East
Suite 400
Mississauga, ON L4W 5K4
CanadaTel: +1 905 214 7600
VancouverTemenos Canada Inc.
15300 Croydon Drive
Suite 300
Surrey, BC V3Z 0Z5
CanadaTel: +1 604 501 0331
VancouverTemenos Canada Inc.
151 West Hastings Street
Suite 414, Gastown
Vancouver, BC V6B 1H4
CanadaTel: +1 604 501 0331

Colombia

Bogotá
Temenos Colombia S.A.S.
Regus Parque 93
Calle 93 A #13-24, 5o Piso
Edificio QBO
Bogotá, D.C. CP: 110221
Colombia

Ecuador

Quito
Temenos Ecuador S.A.
Edificio Orellana 500 Pisos 6 y 7
Avenida Orellana E4-430 (1349)
y Avenida Amazonas
Benalcázar, Quito
EcuadorTel: +593 2 400 8400

MexicoMexico City
Temenos Mexico S.A. de C.V.
Paseo de la Reforma No.505
Piso 15, Suite 15D
Colonia Cuauhtémoc
Alcaldía Cuauhtémoc
Ciudad de Mexico, 06500
MexicoTel: +52 55 3601 4400

USA

Miami
Temenos U.S.A., Inc.
200 South Biscayne Boulevard
Suite 2820
Miami, FL 33131
USA
Tel: +1 305 704 5100
New York
Temenos U.S.A., Inc.
230 Park Avenue
Suite 1550
New York, NY 10169
USA
Tel: +1 646 440 5002

Tel: +57 1 667 2500

NewarkTemenos U.S.A., Inc.
101 Crawfords Corner Road
Suite 3131
Holmdel, NJ 07733
USA

Costa Rica

Tel: +1 610 232 2800

San José
Temenos Costa Rica S.A.
Sabana Norte
Avenida 5, calles 42 y 44
Edificio Grupo Nueva, Segundo Piso
San José 10108
Costa Rica
Tel: +506 2543 1200

OrlandoTemenos U.S.A., Inc.
200 Colonial Center Parkway
Suite 340
Lake Mary, FL 32746
USA
Tel: +1 407 732 5200
Philadelphia
Temenos U.S.A., Inc.
40 General Warren Boulevard
Suite 160
Malvern, PA 19355
USA
Tel: +1 610 232 2800

Middle East/Africa
Egypt

Cairo
Temenos Egypt L.L.C.
Office Number L4 – D26 (L4-409)
Properties numbers (423, 422)
located in the third sector
Fifth Compound
Street 90 North – New Cairo
Trivium Business Complex project
Cairo
Egypt
Tel: +2 02 2306 7356

IsraelTel Aviv
Temenos Israel Ltd
Rothschild Boulevard 22
11th Floor
Tel Aviv 6688218
IsraelTel: +972 732 844 500

Kenya

NairobiTemenos East Africa Ltd
Kofisi 9, 7th Floor
9 West, Parklands Road
Westlands
Nairobi 00623
Kenya
Tel: +254 703 041 760+254 20 367 3760

LebanonBeirutTemenos Middle East Ltd(Lebanon Branch)Monte Libano Center, 11th Floor
Jdeidet El Metn
BeirutLebanonTel: +961 3 876 287

MoroccoCasablanca
Temenos North Africa L.L.C.
Twin Center, Tour Ouest, 6th Floor
20100, Casablanca
MoroccoTel: +212 520 505 604

Saudi Arabia

RiyadhTemenos Middle East Ltd(Saudi Arabia Branch)
Office No. 203
Cerecon Building No. 12
Olaya Street, P.O. Box 250821
Riyadh 11391
Kingdom of Saudi Arabia
Tel: +966 11 215 0511
+966 533 69 7548

Financial Statements

Temenos AG Annual Report and Accounts 2023

Middle East/Africa continued
South Africa
Johannesburg
Temenos Africa (Pty) Ltd
WeWork South Africa Building
173 Oxford Rd
Rosebank, Gauteng, 2196
Republic of South Africa
Tel: +27 11 513 3141

United Arab Emirates

Dubai
Temenos Middle East Ltd(UAE Branch)
DIC Building 4, 1st Floor
Office 102, Dubai Internet City
PO Box 500060
Dubai
United Arab Emirates
Tel: +971 4 391 3100

EuropeBelgium

La Hulpe
Temenos Belgium S.A.
Odyssey Financial Technologies S.A.
Parc du Nysdam
Avenue Reine Astrid 92
1310 La Hulpe
Belgium
Tel: +32 2 725 25 99

Denmark

Copenhagen
Temenos Denmark ApS
Kampmannsgade 21604 Copenhagen
Denmark
Tel: +45 89 88 13 21

FranceParis
Temenos France S.A.S.
Viveo France S.A.S.
112 Avenue Kléber
75116 Paris
FranceGrosswallstadt
Temenos Deutschland GmbH
Einsteinstrasse 2a63868 Grosswallstadt
Germany
Tel: +49 69 665 37 0

GreeceAthensTemenos Hellas S.A.
24B, Kifissias Avenue
Maroussi
151 25 Athens
GreeceTel: +30 211 1094 600/601/603

IrelandDublinTemenos Systems Ireland Ltd
No. 2 Custom House Plaza, Level 1
Harbourmaster Place
Dublin 1
IrelandTel: +353 1 518 7400

Luxembourg

Luxembourg
Temenos Luxembourg S.A.
Temenos Software Luxembourg S.A.
Igefi Group S.à r.l.
21 rue du Puits Romain
L-8070 Bertrange
Luxembourg
Tel: +352 42 60 801

The Netherlands

Amsterdam (until 31 May 2024)
Temenos Holland B.V.
World Trade Center, Tower B, Level 10
Strawinskylaan 1035
1077 XX Amsterdam
The Netherlands
Tel: +33 1 44 09 55 01

Tel: +33 1 44 09 55 00

Amsterdam (from 1 June 2024)
Temenos Holland B.V.
Westermarkt 2D, 1st Floor
1016 DK Amsterdam
The Netherlands

Germany

Tel: +33 1 44 09 55 01

Frankfurt am Main
Temenos Deutschland GmbH
Walther-von-Cronberg-Platz 2, Colosseo
60594 Frankfurt am Main
Germany
Tel: +49 69 665 37 0

PolandKraków
Temenos Polska Sp. z o. o.
Al. Bora-Komorowskiego 25B, 13 th Floor
31-476 Kraków
PolandTel: +48 12 3966 223

275

Romania

Bucharest
Temenos Romania S.R.L.
319G Splaiul Independentei
Atrium House
Ground Floor & 2nd Floor
6th District
Bucharest, 060044
Romania
Tel: +40 31 710 22 64

RussiaMoscow
Temenos Middle East Ltd(Russia Branch)
2nd Floor, 5 Sretenskiy Blvd
Moscow 107045
Russian Federation
Tel: +7 926 296 77 70

Spain

MadridTemenos Hispania S.L.
Paseo de la Castellana 79
8th Floor
28046 Madrid
Spain
Tel: +34 91 343 20 99

Switzerland

GenevaTemenos Headquarters S.A.
Esplanade de Pont-Rouge 9C
1212 Grand-Lancy
Switzerland
Tel: +41 22 708 11 50
Lausanne
Temenos Software Luxembourg S.A.
(Renens Branch)
Avenue des Baumettes 231020 Renens
Switzerland
Tel: +41 22 708 11 50
ZürichTemenos Headquarters S.A.
Uetlibergstrasse 132
10th Floor
8045 Zürich
Switzerland
Tel: +41 22 708 11 50

276

Financial Statements

Temenos AG Annual Report and Accounts 2023

TEMENOS WORLD OFFICES continued

Europe continued
United Kingdom

Reading
Temenos UK Ltd
450 Brook Drive Green Park
Reading RG2 6UU
United Kingdom
Tel: +44 2074 233 700
Hemel Hempstead
Temenos UK Ltd
4th Floor, The Maylands Building
Maylands Avenue
Hemel Hempstead HP2 7TG
United Kingdom
Tel: +44 2074 233 700
LondonTemenos UK Ltd
71 Fenchurch Street, 5th Floor
London EC3M 4TD
United Kingdom
Tel: +44 2074 233 700

Asia Pacific
Australia

Melbourne
Temenos Australia Financial Pty Ltd
Office 317-319, Level 3 – Spaces Two
Melbourne Quarter
697 Collins Street
Docklands, Victoria 3008
Australia

India

Bangalore
Temenos India Private Ltd(Bangalore Branch)
IBC Knowledge Park
Block C & D, 3rd, 10th & 11th Floor
4/1, Bannergatta Road
Near Dairy Circle
Bangalore – 560 029
India

Philippines

Tel: + 91 44 7133 1000

Tel: +63 2 885 8441

+ 91 44 6623 1000
Chennai
Temenos India Private Ltd(Perungudi Branch)
KG 360° – IT Business Park
1st, 2nd, 3rd, 4th, 5th & 6th Floor
No 232/1, Dr. MGR Salai
Perungudi
Chennai – 600 096
India
Tel: +91 44 7133 3000
+91 44 6623 3000

China

Tel: + 91 40 4499 1000

Shanghai
Temenos Software (Shanghai) Co. Ltd
Yue Xiu Tower, 10th Floor, Room 1008
No. 388, Fushan Road
Pudong New District
Shanghai, 200122
China

MumbaiTemenos India Private Ltd(Mumbai Branch)
123, Hubtown Solaris
N S Phadke Marg, Andheri East
Mumbai – 400 069
India

Tel: +86 21 6087 1380

Tel: +91 22 6894 3860

Hong Kong
Temenos Hong Kong Ltd
Unit No. 5504, 55th Floor, Central Plaza
18 Harbour Road
Wanchai, Hong Kong
China

Indonesia

Tel: +852 2866 2562

Tel: +81 3 5219 0655

Chennai
Temenos India Private Ltd
146, Sterling Road
Nungambakkam
Chennai – 600 034
India

Tel: +61 2 9488 4000

SydneyTemenos Australia Financial Pty Ltd
Level 8, Blue & William, 2-4 Blue Street
North Sydney, NSW 2060
Australia

Tokyo
Temenos Japan K.K.
21F Marunouchi Nijyubashi Building
3-2-3 Marunouchi, Chiyoda-ku
Tokyo 100-0005
Japan

ManilaTemenos Philippines Inc.
27th Floor, Tower 2, Room 2715
The Enterprise Centre
6766 Ayala Avenue corner
Paseo de Roxas
Makati City 1226
Philippines

Tel: +91 80 4137 6000/6010/6011

Hyderabad
Kony India Private Ltd
SEZ Unit II, Level 7, Building No. H06
Phoenix Infocity Pvt Ltd (SEZ)
Hitech City 2
MadhapurHyderabad – 500 081
India

Tel: +61 2 9488 4000

Japan

JakartaTemenos Singapore Pte Ltd(Indonesia Representative Office)
Revenue Tower, Level 19, District 8, SCBD
Lot 13Jl. Jenderal Sudirman Kav. 52-53
Jakarta 12190
Indonesia
Tel: +62 21 3952 5759

Singapore

Singapore
Temenos Singapore Pte Ltd
5 Shenton Way#18-01 UIC Building
Singapore 068808
Singapore
Tel: +65 6511 6388

TaiwanTaipeiTemenos Singapore Pte Ltd(Taiwan Branch)
A2, 38F, No. 68, Sec. 5, Zhongxiao E. Rd.
Cathay Landmark Building
Xinyi District, 11065
TaipeiTaiwanTel: +886 2 2723 3568

Thailand

BangkokTemenos (Thailand) Co. Ltd
319 Chamchuri Square Building
24th Floor, Unit No. 85
Phayathai Road, Pathumwan
Bangkok 10330
ThailandTel: +662 007 2131 2

Vietnam

Hanoi
Temenos Vietnam Company Ltd
9th Floor, Vinaconex Tower
34 Lang Ha Street
Dong Da District, Hanoi City
Vietnam
Tel: +844 3772 4328/4327/4326

Temenos AG Annual Report and Accounts 2023

Financial Statements

277

SOURCES

1.	Gartner, “Magic Quadrant for Global Retail Core Banking”, Vittorio
D’Orazio, Don Free, February 2022. (This report was previously titled“Magic Quadrant for International Retail Core Banking” from 2009–2014.
Temenos was recognized as Temenos Group from 2010–2013 andTemenos Group (T24) in 2009.)
	Gartner does not endorse any vendor, product or service depicted in its
research publications and does not advise technology users to select
only those vendors with the highest ratings or other designation.
Gartner research publications consist of the opinions of Gartner’s
research organization and should not be construed as statements
of fact. Gartner disclaims all warranties, expressed or implied, withrespect to this research, including any warranties of merchantability
or fitness for a particular purpose. Gartner and Magic Quadrant areregistered trademarks of Gartner, Inc. and/or its affiliates in the US
and internationally and is used herein with permission. All rights reserved.
2.	“ The Forrester Wave™: Digital Banking Processing Platforms For Retail
Banking, Q3 2022”, Jost Hoppermann, August 2022 and “The Forrester
Wave™: Digital Banking Processing Platforms For Corporate Banking,Q3 2022”, Jost Hoppermann, August 2022. “The Forrester Wave™:
Digital Banking Engagement Platforms, Q3 2021”, Jost Hoppermann,
September 2021 and “The Forrester Wave™: Digital Banking
Engagement Hubs, Q3 2021”, Jost Hoppermann, September 2021.
“Forrester’s Global Banking Platform Deals Survey 2022”, Forrester,
Jost Hoppermann, May 2022.
3.	Omdia Universe: Cloud-based Core Banking, 2023, Omdia (formerlyOvum), Philip Benton and Ouliana Smith, August 2023; Omdia Universe:
Digital Banking Platforms, 2023, Omdia (formerly Ovum), Philip Benton,
January 2023; and “Ovum Decision Matrix: Selecting a Core Banking
System in the European Market, 2016-17”, Ovum, Noora Haapajarvi,
March 2016. “Ovum Decision Matrix: Selecting an Anti-Financial Crime
Solution 2017-18”, Ovum, Matthew Heaslip, December 2017.
4. “Annual Sales League Table 2023”. IBS Intelligence, June 2023.
5.	Celent Model Bank 2021 – Varo Bank: Celent Model Bank of the Year
2021, Celent, Daniel Latimore, March 2021.

	Celent Model Bank 2020 Banking in the Cloud Award: “EQ Bank:
EQ Bank to the Cloud!”, Celent, Craig Focardi and Stephen Greer,
April 2020.
6.	“IDC MarketScape: North America SME Lending Decisioning Platforms
2023-2024 Vendor Assessment”, IDC, Raymond Pucci, Marc DeCastro,
November 2023; “IDC MarketScape: North America SME Customer
Experience Platforms 2023-2024 Vendor Assessment”, IDC, Raymond
Pucci, Marc DeCastro, November 2023; “IDC MarketScape: North
America Digital Banking Customer Experience Platforms 2022 Vendor
Assessment”, IDC, Marc DeCastro, March 2022. “IDC MarketScape:Worldwide Integrated Payment Systems 2019 Vendor Assessment”,
IDC, Aaron Press, February 2020. “IDC MarketScape: Worldwide
Know-Your-Customer Solutions in Financial Services 2018 Vendor
Assessment”, IDC, Stephen D’Alfonso, Karen Massey, September 2018
and “IDC MarketScape: Worldwide Anti-Money Laundering Solutionsin Financial Services 2018 Vendor Assessment”, IDC, Karen Massey,
Stephen D’Alfonso, September 2018. “IDC MarketScape: Worldwide
Core Banking Solutions 2015 Vendor Assessment”, IDC, Karen Massey,
Andrei Charniauski, Michael Araneta, Jerry Silva, January 2015,“Worldwide Wealth Management Front and Middle-Office Solutions
2014 Vendor Assessment”, IDC, Thomas Zink, January 2015 and “IDC
MarketScape: European Mobile Banking Software Solutions 2017
Vendor Assessment”, IDC, Lawrence Freeborn, May 2017.
7. Aperture: The Market Map for Wealth Management Software 2021.
8.	Datos (Aite Group), Aite Matrix Evaluation: Wealth ManagementFocused Core Banking Systems, July 2022; Aite Group, Aite Matrix
Evaluation: Investment and Fund Accounting Systems, April 2020;
Aite Group, Aite Matrix Evaluation: US Digital Banking Providers ofCore Vendors, September 2021.
9.	ACV: Annual value of incremental business taken in year (bookings).
Includes new customers and up-sell/cross-sell. Only includes therecurring element of the contract and excludes variable elements.

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