Tieto Corporation INTERIM REPORT 28 April 2015, 8.00 am EET
· Modest growth in IT services – continued strong order intake
· In IT services, investments in offering development and the Managed Services
automation programme affect first-half profitability
· Efficiency measures improve profitability in Product Development Services
· Full-year outlook remains unchanged
The full interim report with tables is available at the end of this release
Key figures for the first quarter
· Organic growth in local currencies was -3.2%
· In IT services, organic growth in local currencies was 0.5%
· Order intake (Total Contract Value) amounted to EUR 430 (402) million and
order backlog was EUR 1 819 (1 582) million
· First-quarter operating profit excl. one-off items amounted to EUR 30.7
(34.5) million, 8.4% (8.9) of sales
· Operating profit includes a negative currency effect of around EUR 4 million
1–3/2015 1–3/2014
Net sales, EUR million 365.6 387.0
Change, % -5.5 -8.7
Organic change in local currencies, % -3.2 -1.4
Operating profit (EBITA), EUR million 14.0 34.4
Operating margin (EBITA), % 3.8 8.9
Operating profit (EBIT), EUR million 13.9 34.0
Operating margin (EBIT), % 3.8 8.8
Operating profit (EBIT) excl. one-off items1), EUR million 30.7 34.5
Operating margin (EBIT) excl. one-off items1), % 8.4 8.9
Profit after taxes, EUR million 9.1 24.6
EPS, EUR 0.12 0.34
Net cash flow from operations, EUR million 36.7 50.0
Return on equity, 12-month rolling, % 4.5 13.5
Return on capital employed, 12-month rolling, % 7.7 15.3
Investments, EUR million 11.6 13.4
Interest-bearing net debt, EUR million -85.9 -20.5
Net debt/EBITDA -0.6 -0.1
Book-to-bill 1.2 1.0
Order backlog 1 819 1 582
Personnel on 31 March 13 456 14 102
1) Excl. capital gains, goodwill impairment charges and restructuring costs
Full-year outlook for 2015 unchanged
Tieto expects its full-year operating profit (EBIT) excluding one-off items to
increase from the previous year’s level (EUR 150.2 million in 2014).
CEO’s comment
Comment regarding the interim report by Kimmo Alkio, President and CEO:
“The current era of digitalization, which impacts all industries and societies
worldwide, continues to provide attractive business opportunities for Tieto.
With the aim of becoming the thought leader and advisor for enterprise customers
in the Nordic countries, we have accelerated our investments in areas with
promising future business opportunities.
Currently, we have increased our focus on digitalizing our own services. As an
example, additional investments have been made in the Managed Services
automation programme. This is expected to deliver a superior service experience
to our customers and improved profitability levels towards the year end. In
addition, we are continuing to actively invest in growth businesses such as
Industrial Internet, Customer Experience Management, Healthcare and Cloud
Computing. I’m pleased to see that our cloud business continued to grow in the
first quarter at a year-on-year rate of over 100%.
While investments for future growth and competitiveness will somewhat strain our
first-half profitability, the underlying business continues to develop
favourably.”
Financial performance by service line
EUR million Customer Customer Change, % Operating Operating
sales sales profit profit
1–3/2015 1–3/2014 1–3/2015 1–3/2014
Managed Services 126 127 -1 -8.3 10.9
Consulting and 99 100 -1 8.2 11.1
System Integration
Industry Products 94 100 -6 12.6 15.5
Product Development 47 60 -22 6.5 1.1
Services
Support Functions -5.0 -4.6
and Global
Management
Total 366 387 -6 13.9 34.0
Operating margin by service line
% Operating Operating Operating Operating
margin margin margin excl. margin excl.
1–3/2015 1–3/2014 one-off items1) one-off items1)
1–3/2015 1–3/2014
Managed Services -6.6 8.5 3.6 8.4
Consulting and 8.3 11.1 10.8 11.2
System
Integration
Industry 13.3 15.4 13.4 15.4
Products
Product 14.0 1.9 14.0 2.6
Development
Services
Total 3.8 8.8 8.4 8.9
1) Excl. capital gains, impairments and restructuring costs
Organic change in local currency by service line
EUR million Customer Customer Change, %
sales adj. sales adj. for divestments
for 1–3/2014
acquisitions
and currency
1–3/2015
Managed Services 130 127 2
Consulting and 101 100 1
System
Integration
Industry 99 100 -1
Products
IT services 329 327 1
Product 46 60 -24
Development
Services
Total 375 387 -3
Customer sales by industry group
EUR million Customer sales Customer sales Change, %
1–3/2015 1–3/2014
Financial Services 84 83 0
Manufacturing, Retail and Logistics 78 79 -2
Public, Healthcare and Welfare 101 100 1
Telecom, Media and Energy 57 65 -12
IT services 319 327 -2
Product Development Services 47 60 -22
Total 366 387 -6
Organic change in local currency by industry group
EUR million Customer Customer Change, %
sales adj. for sales adj. for divestments
acquisitions and 1-3/2014
currency
1-3/2015
Financial 87 83 5
Services
Manufacturing, 79 79 0
Retail and
Logistics
Public, 104 100 4
Healthcare and
Welfare
Telecom, Media 59 65 -9
and Energy
IT services 329 327 1
Product 46 60 -24
Development
Services
Total 375 387 -3
For further information, please contact:
Lasse Heinonen,
CFO, tel.+358 2072 66329, +358 50 393 4950, lasse.heinonen (at) tieto.com
Tanja Lounevirta,
Head of Investor Relations, tel.+358 2072 71725 (http://calltotel+358207271725),
+358 50 321 7510, tanja.lounevirta (at) tieto.com
Press conference for analysts and media will be held at Tieto’s premises in
Stockholm, address: Fjärde Bassängvägen 15, on Tuesday 28 April 2015 at 11.00 am
EET (10.00 am CET, 9.00 am UK time). The results will be presented in English by
Kimmo Alkio, President and CEO, and Lasse Heinonen, CFO.
The conference will be
webcasted (http://webcast.tieto.com/quarterlyreport/?q=280415) and can be viewed
live on Tieto's website (http://www.tieto.com/investors). To join the
conference, attendees need Adobe Flash plugin version 10.1.0 or newer. The
meeting participants can also join a telephone conference that will be held at
the same time. The telephone conference details can be found below.
Telephone conference numbers
Finland: +358 (0)9 6937 9590
Sweden: +46 (0)8 5065 3937
UK: +44 (0)20 3427 1909
US: +1212 444 0896
Conference code: 8765732
To ensure that you are connected to the conference call, please dial in a few
minutes before the start of the press and analyst conference. An on-demand video
will be available after the conference.
Tieto publishes financial information in English and Finnish.
TIETO CORPORATION
DISTRIBUTION
NASDAQ Helsinki
NASDAQ Stockholm
Principal Media
Tieto is the largest IT services company in the Nordics providing full lifecycle
IT services. We also provide global product development services for companies
in the communications and embedded technologies arena. Through industry insight,
technology vision, and innovative thinking, Tieto proactively strives to inspire
and engage our customers in finding new ways of accelerating their business.
Building on a strong Nordic heritage, Tieto combines global capabilities with
local presence. Headquartered in Helsinki, Finland, Tieto has over 13 000
experts in more than 20 countries. Turnover is approximately EUR 1.5 billion.
Tieto’s shares are listed on NASDAQ in Helsinki and Stockholm. www.tieto.com
