2013-10-23 07:00:00 CEST
2013-10-23 07:00:09 CEST
REGULATED INFORMATION
Tieto Oyj - Interim report (Q1 and Q3)
Interim Report 3/2013 – Tieto’s renewal continues – improvement in efficiency and underlying profitability
Tieto Corporation INTERIM REPORT 23 October 2013, 8.00 am EET
-- Third-quarter EBIT margin of the underlying business rose to 10.1% (8.9)
despite continued weakness in the telecom sector
-- Cloud services and IT legacy modernization enable more efficient delivery
of IT services
-- Additional efficiency measures with the target of achieving over EUR 50
million in savings ongoing
The full interim report with tables is available at the end of this release
Key figures
-- Organically, net sales were down by 4% in the third quarter
-- Outside the telecom sector, net sales excluding divestments were down by
1%, excluding divestments and currency effect up by 1%
-- Third-quarter operating profit excl. one-off items rose to EUR 37.9 (37.5)
million, margin increased to 10.1% (8.9)
EUR million 7-9/201 7-9/201 1-9/201 1-9/201
3 2 3 2
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Net sales, EUR million 373.3 423.5 1 254.3 1 346.7
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Change, % -12 2 -7 1
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Organic change, % -4 4 -3 2
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Operating profit (EBITA), EUR million 25.6 33.4 73.2 75.1
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Operating margin (EBITA), % 6.9 7.9 5.8 5.6
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Operating profit (EBIT), EUR million 24.8 32.0 70.4 70.8
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Operating margin (EBIT), % 6.6 7.6 5.6 5.3
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Operating profit (EBIT) excl. one-off 37.9 37.5 101.1 94.5
items1), EUR million
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Operating margin (EBIT) excl. one-off 10.1 8.9 8.1 7.0
items1), %
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Profit after taxes, EUR million 18.4 22.7 47.2 47.9
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EPS, EUR 0.25 0.32 0.65 0.67
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Net cash flow from operations, EUR million 38.9 36.3 90.1 101.3
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Return on equity, 12-month rolling, % 5.4 11.2 5.4 11.2
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Return on capital employed, 12-month 12.4 18.5 12.4 18.5
rolling, %
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Investments, EUR million 15.5 15.6 48.1 43.6
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Interest-bearing net debt, EUR million 45.0 59.0 45.0 59.0
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Net debt/EBITDA 0.2 0.3 0.2 0.3
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Book-to-bill 0.8 0.7 1.0 1.0
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Order backlog 1 513 1 652 1 513 1 652
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Personnel on 30 September 15 161 17 404 15 161 17 404
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1) Excl. capital gains, impairments and restructuring costs
Full-year outlook for 2013 unchanged - sales guidance specified
Outside the telecom sector, Tieto expects its organic net sales development to
be at the lower end of the forecast market growth range (Nordic IT services
market: 0-2%). Net sales development in the telecom sector is expected to be
weaker than in Tieto's other sectors.
Tieto expects its profitability to continue to improve and full-year operating
profit (EBIT) excluding one-off items to increase from the previous year's
level (EUR 138.8 million in 2012).
Previous sales guidance:
Tieto expects its organic net sales to develop in line with the growth in the
market for IT services, with the exception of the weaker outlook in the telecom
sector. (Tieto's expectations for the market growth: 0-2%)
CEO's comment
Comment regarding the interim report by Kimmo Alkio, President and CEO:
“We are pleased to see that our focus and drive for efficiency resulted in
continued profitability improvement in our underlying business, while we
continued to see challenges in the telecom sector volume development.
Additionally, customer satisfaction and quality especially in continuous
services show improving trends.
The IT industry is in the midst of rapid changes. New technologies, such as
cloud services, coupled with customer requirements to increase efficiency,
accelerate modernization of old IT systems. In line with this development,
demand is increasingly focusing on standardized and less labour-intensive
solutions, defining new industry norms for efficiency in the whole IT services
sector. Accordingly, we have to take further actions to strengthen the
competitiveness of our operations. With the actions initiated during this year,
we aim to achieve annual savings of over EUR 50 million.
We continue to renew our services and competences in order to seek new business
opportunities both in IT services and Product Development Services. Through
selective forward-looking investments we will be better positioned to meet
continuously changing customer needs and drive future growth.”
Financial performance by service line
EUR million Customer Customer Change, Operating Operati
sales sales % profit ng
7-9/2013 7-9/2012 7-9/2013 profit
7-9/201
2
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Managed Services 120 125 -4 3.6 7.5
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Consulting and System 92 109 -15 4.0 13.0
Integration
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Industry Products 101 115 -12 20.7 13.0
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Product Development 60 75 -19 3.0 0.4
Services
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Support Functions and -6.6 -1.8
Global Management
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Total 373 424 -12 24.8 32.0
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Operating margin by service line
% Operati Operati Operating Operating
ng ng margin excl. one-off margin excl.
margin margin items1) one-off
7-9/201 7-9/201 7-9/2013 items1)
3 2 7-9/2012
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Managed Services 3.0 6.0 4.9 7.5
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Consulting and System 4.4 11.9 10.5 12.4
Integration
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Industry Products 20.5 11.3 20.7 12.3
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Product Development 5.0 0.6 7.9 2.2
Services
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Total 6.6 7.6 10.1 8.9
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1) Excl. capital gains, impairments and restructuring costs
Customer sales by industry group
EUR million Customer sales Customer sales Change, %
7-9/2013 7-9/2012
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Financial Services 84 85 -2
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Manufacturing, Retail and Logistics 70 78 -10
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Public, Healthcare and Welfare 96 100 -4
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Telecom, Media and Energy 63 86 -26
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Product Development Services 60 75 -19
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Total 373 424 -12
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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, +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, 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 and can be viewed live on Tieto's website:
www.tieto.com/investors. 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 9543
Sweden: +46 (0)8 5033 6538
UK: +44 (0)20 3427 1918
US: +1 646 254 3362
Conference code: 9250076
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. There will also
be a possibility to present questions online. An on-demand video will be
available after the conference.
Tieto publishes financial information in English, Finnish and Swedish. As from
the first quarter of 2013, the full interim report with tables is available
only in English and Finnish.
TIETO CORPORATION
DISTRIBUTION
NASDAQ OMX Helsinki
NASDAQ OMX Stockholm
Principal Media
Tieto is the largest Nordic IT services company providing full life-cycle
services for both the private and public sectors and product development
services in the field of communications and embedded technologies. The company
has global presence through its product development business and global
delivery centres. Tieto is committed to developing enterprises and society
through IT by realizing new opportunities in customers' business
transformation. At Tieto, we believe in professional development and results.
Founded 1968, headquartered in Helsinki, Finland and with approximately 15 000
experts, the company operates in over 20 countries with net sales of
approximately EUR 1.8 billion. Tieto's shares are listed on NASDAQ OMX in
Helsinki and Stockholm. Please visit www.tieto.com for more information.
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