2007-10-26 07:02:07 CEST
2007-10-26 07:02:07 CEST
REGULATED INFORMATION
TietoEnator Oyj - Quarterly report
TietoEnator s interim report 3/2007 (January - September 2007)
TietoEnator Corporation Quarterly Report 26 October 2007, 8.00 am EET
To download the PDF file, please use this link:
http://hugin.info/3114/R/1162341/226488.pdf
Highlights
* Revised strategy, new profitability guidance and change of
President and CEO announced on 16 October
* Third-quarter net sales grew by 10% to EUR 404.7 (369.4) million.
Nine-month net sales totalled EUR 1 281.1 (1 191.0) million, up
8%.
* Third-quarter operating profit amounted to EUR 20.7 (27.7)
million. Operating margin excluding capital gains was 5.1% (7.5).
Nine-month operating profit totalled EUR 65.1 (83.8) million.
* Operating profit excluding capital gains or losses and
restructuring expenses totalled EUR 25.3 (28.4) million for the
third quarter and EUR 76.2 (87.4) million for the nine-month
period.
* Profit after taxes was EUR 11.0 (19.5) million for the third
quarter, EUR 40.1 (58.3) million for the nine-month period.
* Third-quarter EPS amounted to EUR 0.15 (0.26), nine-month EPS to
EUR 0.54 (0.78).
Market development and TietoEnator's business transactions
The market situation was positive in most of TietoEnator's customer
industries. In most areas prices are either stable or slightly higher
than the year before. Price pressure persists in some segments, such
as infrastructure services. Labour market mobility is at a high
level. Pressure on personnel costs is increased not only by annual
salary raises, but also by high personnel turnover. To compensate for
the rise in personnel costs TietoEnator has started an internal
improvement programme and reviewed its pricing policies. In addition
to these, the company has started price negotiations with most of its
customers.
Banking and insurance
Overall demand in the financial services sector is strong, but very
competitive in certain areas e.g. in solution business. Regulatory
changes in the European Union are creating new demand in the payments
and capital markets areas.
In January, TietoEnator agreed to acquire the Swedish company Abaris
AB, which specializes in securities processing solutions. Abaris
employs some 90 people in Sweden, Finland and Norway and its net
sales in 2007 are expected to amount to EUR 10 million. The
acquisition took effect on 1 January 2007.
In the third quarter, three major Nordic banks selected TietoEnator's
SEPA Credit Transfers solution (Single Euro Payments Area) in order
to achieve full compliance with the requirements for SEPA Credit
Transfers and the European Bank Association's clearing service by
January 2008.
Telecom and media
The overall market situation in the telecom and media sectors is good
and TietoEnator's prospects for further growth are promising. The
accelerating convergence in telecom services is driving up demand for
IT services. Operators are also looking for new IT solutions to boost
their competitiveness. The R&D market is being restructured and
relocated as customers increase their presence in countries with
favourable cost-structures. R&D responsibilities are outsourced to
strong partners to secure continuity, and R&D spending in low-cost
countries is on the rise due to cost-efficiency considerations and
the importance of new markets.
In January, TietoEnator recruited 140 people who had formerly worked
for the Taiwan-based BenQ's R&D centre in Wroclaw, southern Poland.
At the beginning of February, TietoEnator assumed responsibility for
Ericsson's design centre in Aarhus, Denmark, with 86 employees. The
design centre supplies IP software building blocks for Ericsson
products.
In April, TietoEnator signed an agreement with Siemens IT Solutions
and Services in Italy regarding the streamlining of business-critical
and customer-related processes and services for mobile telephony. The
value of the contract is expected to be EUR 40 million and the
contract period is three years. In June, TietoEnator agreed on
further co-operation with Nokia Siemens Networks. TietoEnator
incorporated parts of Nokia Siemens Networks' Finnish R&D operations
for mobile networks and took on the R&D responsibilities for certain
parts of Nokia Siemens Networks' product portfolio. Approximately 230
employees were transferred to TietoEnator Telecom & Media at the
beginning of July.
In the third quarter, TietoEnator agreed on an extension of a
partnership deal with Blyk that was announced in April. TietoEnator
is providing Blyk, the new ad-funded mobile network for young people,
with Mobile Virtual Network Operator (MVNO) services. The new
services encompass extended application and business process
management services and a scalable, cost-efficient IT infrastructure.
In September, TietoEnator signed an agreement to acquire Fortuna
Technologies Pvt. Ltd. in India. The company has approximately 300
employees and provides R&D services and develops turnkey software
solutions for major European and Asian mobile device manufacturers of
3G handsets. The purchase price was approximately EUR 21 million. The
impact on TietoEnator's net sales for 2008 is expected to be
approximately EUR 11 million. The profitability of the acquired
company is higher than TietoEnator's average level. The company will
be consolidated as from October.
Government, manufacturing and retail
Overall demand is solid in all of these areas as customers are
seeking to improve performance and productivity. Demand in the
Finnish government sector is good. Government customers plan to start
several large development projects in the coming years. The positive
trend in the manufacturing industry is also expected to continue.
Retail customers are in the market for IT systems to help them
provide new ways to manage customer needs and changes in customer
behaviour towards multichannel buying.
In September, TietoEnator divested its holding in the Swedish company
TietoEnator GM&R AB, which provides application management and
project services to customers within the retail and logistics
industries. The company has 23 employees. The divestment will not
have any material impact on the business area's net sales or
operating profit.
Healthcare and welfare
The Finnish healthcare market is favourable for solution-based
business. Demand is good but the market is competitive. In Sweden and
Norway the market is fragmented and develops slowly. Many projects
have been postponed and some projects have been scaled down to
smaller deliveries. In Germany, the finances of healthcare service
providers are in a squeeze, which has made the market very
challenging.
Forest and energy
In the forest sector, there is steady demand for investments to
harmonize IT systems and infrastructure. TietoEnator also sees good
business opportunities arising from structural changes in the
industry.
In the energy sector, the market situation remains favourable for the
oil and gas segment as well as for the utility segment. Larger
investments in finding new oil reservoirs and utilizing old ones,
growing demand for energy and the good economic situation of energy
companies ensure IT investments in the coming years.
Infrastructure outsourcing
The market for infrastructure outsourcing is good with a continuous
flow of mid-sized tender requests. Customers are looking for more
flexible solutions and request broader service agreements that
provide coverage for entire business processes. Prices
for traditional infrastructure services are under continuous
pressure.
In June, the Swedish state-owned pharmacy chain Apoteket AB chose
TietoEnator as its new supplier of ICT operations management,
applications integration, applications management and workstation
management and support. The average term of the contracts is close to
4 years. According to TietoEnator estimates, the total value of the
order will be around EUR 57 million.
In September, TietoEnator opened a service centre in St Petersburg
with a view to expanding operations in Russia and serving its current
customers that operate in the country.
Net sales
Third-quarter net sales grew by 10% to EUR 404.7 (369.4) million or
by 9% in local currencies. Organic growth remained at a healthy
level, 12%. For the Group as a whole, average prices remained roughly
at the same level as the year before.
Jan-Sept
Q3 net Q3 net Jan-Sept
sales organic sales organic
growth, % growth, % growth, % growth, %
Banking & Insurance -1 -2 3 1
Telecom & Media 28 28 22 22
Government, Manufacturing & -21 4 -23 2
Retail
Healthcare & Welfare 4 2 0 -1
Forest & Energy 18 12 15 10
Processing & Network 12 12 8 8
In the third quarter, Telecom & Media saw further strong development
thanks to the good market situation and several new contracts.
TietoEnator bolstered its position among its key customers as well.
In addition, Processing & Network performed strongly and signed
several deals. Processing & Network's overhauled capacity
services were particularly successful.
Good market conditions in the energy sector were the main driver of
Forest & Energy's healthy growth. Demand for both solutions and
services has been solid in the oil and gas sector.
Net sales of Government, Manufacturing & Retail were reduced by the
divestment of government businesses in Denmark, Norway and Sweden in
2006. The business area grew organically by 4%. Government was the
strongest sector.
Third-quarter net sales of the Banking & Insurance business area
declined mainly due to the unfavourable development in the solution
business, especially in the core banking area.
In the Healtcare & Welfare business area net sales growth was
negatively impacted by challenges in the solution business in
Scandinavia and Germany.
Nine-month net sales grew by 8% to EUR 1 281.1 (1 191.0) million, or
by 7% in local currencies. Organic growth totalled 10%.
TietoEnator's nine-month growth was 10% in Sweden and 5% in Finland.
Net sales in Germany benefited from new outsourcing contracts and
grew by 38%. Net sales in Denmark declined by 43% and in Norway by 3%
mainly due to the divestment of government businesses in late 2006.
In the UK, growth was strong at 23%.
Telecom and media posted strong growth, increasing its share of
consolidated net sales to 36% (31). The banking and insurance sector
generated 22% (23), whereas the public sector's contribution declined
to 16% (18).
The order backlog, which only comprises services ordered with binding
contracts, amounted to EUR 1 194.9 million (1 181.1) at the end of
the period, on a par with the previous year. Processing & Network's
share of the order backlog is about 31%. Approximately 27% (26) of
the backlog is expected to be invoiced in 2007.
Profitability
Third-quarter operating profit declined to EUR 20.7 (27.7) million.
Operating profit includes capital gains of EUR 0.1 (0.2) million.
Excluding capital gains the operating margin totalled 5.1% (7.5).
Restructuring expenses amounted to EUR 4.7 (0.9) million, of which
EUR 2.6 million was attributable to Processing & Network. The
underlying operating profit (excluding capital gains and losses and
restructuring expenses) totalled EUR 25.3 (28.4) million.
Q3 EBIT excl. Q3 EBIT% Jan - Sept
capital gains excl. capital EBIT% excl.
and losses, gains and capital gains EUR million losses and losses
Banking & Insurance -3.3 (4.7) -5.2 (7.4) -0.7 (6.8)
Telecom & Media 12.6 (8.5) 8.2 (7.1) 8.4 (6.5)
Government, Manufacturing 0.6 (2.3) 1.6 (4.5) 6.0 (6.9)& Retail
Healthcare & Welfare -0.6 (1.4) -1.8 (4.6) -1.4 (4.6)
Forest & Energy 3.4 (1.6) 8.1 (4.3) 7.8 (4.9)
Processing & Network 12.4 (12.3) 12.5 (13.8) 9.1 (11.0)
Banking & Insurance's operating loss was due to a few delivery
projects, especially in the core banking area. The negative impact of
these projects was over EUR 5 million in the third quarter.
Additionally, solution development costs were higher than normal,
impacting the margin. The partnership and services businesses
performed steadily underpinned by healthy demand in the main markets,
Finland and Sweden. Project overruns, mainly from one underperforming
project, burdened Government, Manufacturing & Retail's operating
profit by nearly EUR 3 million.
Healthcare & Welfare's profitability was still strained by the
challenges it faces in the solution business, especially in Norway,
Sweden and Germany. A significant amount of resources is committed to
development projects fulfilling old contracts whose costs have been
higher than planned. In Scandinavia, TietoEnator is shifting its
focus from a solution-based business model towards a service-oriented
model. Under this model, deliveries may be based on solutions,
but the proportion of related services will be higher than before.
The welfare business in the Nordic countries and the solution
business in Finland have continued to generate good profits.
Telecom & Media's operating margin rose to 8.2% (7.1), mainly due to
strong sales growth. Processing & Network's third-quarter operating
profit, excluding restructuring costs, amounted to EUR 15.0 (12.9)
million. Operating margin of the underlying business remained at the
previous year's level at 15.1% (14.5). The third quarter is the
strongest season for Processing & Network. Forest & Energy's
third-quarter operating margin rose to 8.1% (4.3) due to improvements
in low-performing areas.
Due to the vacation period, the second and third quarters are weaker
than the other two quarters of the year for TietoEnator. This
seasonality is most evident in business areas with a high proportion
of professional services like Telecom & Media and Government,
Manufacturing & Retail.
Net financial expenses stood at EUR 2.9 (0.3) million in the third
quarter. Net interest expenses were EUR 2.2 (0.3) million and
one-time net losses from foreign exchange transactions EUR 0.4
(positive 0.1) million.
Third-quarter earnings per share (EPS) totalled EUR 0.15 (0.26). EPS
was affected by amortization on intangibles of EUR 0.03 (0.03) per
share and stock option expenses of EUR 0.02 (0.02) per share. EPS was
not affected by capital gains in the third quarters of 2007 and 2006.
Nine-month operating profit amounted to EUR 65.1 (83.8) million. Net
capital losses were EUR 3.1 million. Excluding capital losses and
gains operating profit totalled EUR 68.2 (75.5) million, representing
a margin of 5.3% (6.3).
Nine-month restructuring expenses amounted to EUR 8.0 (11.9) million.
The underlying operating profit for the nine-month period totalled
EUR 76.2 (87.4) million.
Nine-month net financial expenses stood at EUR 6.0 (1.5) million. Net
interest expenses were EUR 5.6 (0.5) million and one-time net gains
from foreign exchange transactions EUR 0.1 (losses 0.5) million.
Nine-month earnings per share totalled EUR 0.54 (0.77). EPS was
affected by net capital losses of EUR 0.04 (gains 0.11) per share,
amortization on intangibles of EUR 0.10 (0.08) per share and stock
option expenses of EUR 0.04 (0.04) per share.
Operating profit (EBIT) included EUR 2.4 (2.2) million from
amortization on allocated intangible assets in the third quarter and
EUR 7.3 (6.4) million in the nine-month period. The costs arising
from share-based payments of EUR 1.2 (1.3) million in the third
quarter and EUR 3.2 (3.2) million in the nine-month period were
included in employee benefit expenses.
The 12-month rolling return on capital employed (ROCE) was 18.9% and
the return on shareholders' equity (ROE) 13.6%.
'Profit 2007' programme
TietoEnator launched a programme called 'Profit 2007' at the
beginning of February to improve its business performance. The
programme includes plans to cut costs and divest or restructure
loss-making businesses.
Turnarounds of underperforming units included in the programme have
proceeded as planned, whereas divestments have turned out to be more
time-consuming than anticipated. The company is forging ahead with
its efforts to achieve results in this area. Restructuring resulted
in total expenses of EUR 8.0 million in the last nine months. The
cost savings have developed according to plan.
Financing and investments
Cash flow from operations amounted to EUR 54.7 (42.7) million in the
nine-month period. Operating profit contributed EUR 119.3 (121.4)
million and the increase in working capital consumed EUR 47.9 (55.7)
million. Tax payments amounted to EUR 13.5 million.
Dividends amounting to EUR 88.3 million were paid in April and
altogether EUR 32.1 million was used for the share repurchase
programme in August and September of which EUR 2.1 million was paid
in October.
Payments for new acquisitions totalled EUR 12.3 million in the
nine-month period. Divestments generated EUR 4.2 million.
The equity ratio was 43.0% (33.3). Gearing decreased to 39.2% (80.4)
as Personec Group, which had a substantial amount of debt, was
divested in December 2006. Net debt totalled EUR 215.4 (354.6)
million, including EUR 276.2 million in interest-bearing debt, EUR
5.2 million in finance lease liabilities, EUR 8.1 million in finance
lease receivables and EUR 57.7 million in cash and cash equivalents.
The interest-bearing debt consists of two seven-year private
placement bonds, at EUR 100 million and at EUR 50 million, and usage
of EUR 126 million from the short-term EUR 250 million commercial
paper programme. At the end of the quarter unused credit facilities
totalled about EUR 250 million.
Accrual-based investments totalled EUR 65.4 (50.6) million for the
period. Capital expenditure including financial leasing accounted for
EUR 37.5 (34.1) million, investments in business activities for EUR
0.0 (4.4) million, and investments in subsidiary and associated
company shares for EUR 28.0 (12.1) million.
Personnel
The number of full-time employees totalled 15 823 (14 710) at the end
of September. Acquisitions and new outsourcing contracts added 519
employees during the nine-month period.
In total 161 employees were affected by personnel adjustments during
the nine-month period, mostly in Telecom & Media and Processing &
Network.
Employee turnover has continued to increase due to the very brisk
labour market. The 12-month rolling figure stood at 10.5% (8.4) at
the end of September. The average number of full-time employees was
15 359 (14 300) in the nine-month period.
As a result of the national salary raises agreed in the collective
labour agreements in Finland and Sweden, the fourth-quarter personnel
costs will increase by 3-4% compared to the corresponding quarter of
2006. In 2008, the salaries in Finland and in Sweden will increase on
average by 4-5% year on year.
At the end of September the number of people in software centres in
near-shore and off-shore countries totalled about 2 700 (1 830), or
16% (12) of the total headcount. The acquisition of the Indian
company Fortuna Technologies will increase this number by
approximately 300 people from October onwards.
Global sourcing actions
The acquisition of the Indian company Fortuna Technologies gives
Telecom & Media a solid basis for future growth in India and other
parts of Asia and is a strategic addition to Telecom & Media's global
delivery model. The acquisition supports Telecom & Media's strategy
to build highly qualified spearhead competence for telecom R&D and
provides an excellent complement to its current customer base and
services portfolio.
TietoEnator has decided to centralize its internal ICT support in
Ostrava, the Czech Republic. ICT support currently operates in
Sweden, Finland, Norway and Belgium. The decision will affect the
work of around 40 service desk employees in these countries.
Management
On 16 October TietoEnator's Board of Directors and Pentti Heikkinen,
President and CEO of TietoEnator agreed on a change of leadership at
the company, effective immediately. The Board is in the process of
selecting a new President and CEO from outside of TietoEnator in the
near future. Åke Plyhm, Deputy CEO, will act as interim CEO until the
new President and CEO has been appointed. For the time being, Pentti
Heikkinen continues in special assignments specified by the Board of
Directors.
In August, Carl-Johan Lindfors, Executive Vice President and
President of Healthcare & Welfare decided to resign from TietoEnator
to take a new position outside the company. Juhani Kaisanlahti was
appointed acting President of the Healthcare & Welfare business area
effective 17 August.
Transactions with related parties
The related parties of TietoEnator are its Board of Directors,
President and CEO, the Corporate Management Team and the Group's
associated companies.
Chairman of the Board of Directors Matti Lehti's service contract
with TietoEnator ended on 30 June 2007 when he reached his retirement
age of 60 years. He has stayed on with the company as non-executive
Chairman of the Board of Directors.
Transactions with associated companies are not considered to be
material.
Shares and options
On 26 June 2007, TietoEnator's Board of Directors decided to cancel
138 350 own shares held by the company. The cancellation of these
shares was registered in the Trade Register on 30 July. The
cancellation has no effect on the share capital of the company.
A total of 61 shares were subscribed for with the stock options 2002
A/B during the quarter. The increase in the share capital was
registered in the Finnish Trade Register on 8 August 2007. At the end
of September, the share capital amounts to EUR 75 841 523 and the
total number of shares to 73 958 173.
The outstanding number of shares excluding the shares in the
company's possession was 71 661 523 at the end of September.
TietoEnator's Annual General Meeting 2007 approved authorizations to
issue share and option rights or raise convertible bond loans. The
Board has not exercised these authorizations.
Share repurchase programme on hold
In July, TietoEnator's Board of Directors decided to start a new
share repurchase programme. The maximum amount to be used under this
new programme is EUR 80 million to purchase a maximum of 3.50 million
shares.
A total of 1 935 000 shares were repurchased in August and September
at an average price of EUR 16.60. At the end of the quarter,
TietoEnator held a total of 2 296 650 of its own shares representing
3.1% of all the shares and voting power. The Board of Directors plans
to cancel the repurchased shares.
On 25 October, the Board of Directors decided to put the repurchase
programme on hold.
Events after the period
TietoEnator has entered into an agreement to sell its reinsurance and
leasing operations in Germany to the current management under an MBO
(management buyout) arrangement. Approximately 20 employees working
for TietoEnator's Banking & Insurance business area in Hamburg,
Germany will move to the new company. In 2006, the net sales of the
divested operations amounted to approximately EUR 3 million.
In the fourth quarter, TietoEnator will book gains of EUR 2.9 million
from the sale of a real estate option contract.
A more focused strategy
On 16 October TietoEnator published its revised strategy, which aims
to restore the company's profitability and secure a sustainable basis
for future growth. Under the strategy, the company will implement
several changes related to the sources of future growth, operational
efficiency and organization. The basic elements of the new strategy
are the following:
- focused growth path, i.e. separate global and regional strategies
- repositioning of repeatable solutions by refocusing product and
service portfolios, mainly in the Banking & Insurance and Healthcare& Welfare business areas, and
- accelerating quality and productivity improvement
Through its global growth strategy, TietoEnator plans to invest in
expanding its leading position as a Telecom R&D partner, as well as
strengthening its strong market position in Forest and Oil & Gas
businesses. The regional strategy is based on the company's strong
position in the Nordic countries. The aim is to even further
strengthen the company's leading position as a full-scale IT service
provider to Nordic-based core customers in their main markets,
including Russia.
TietoEnator will step up its performance improvement programmes with
the aim of gaining substantially bigger efficiency improvements than
with the current "Profit 2007" programme. The improvement potential
and restructuring costs will be quantified during the final quarter
of 2007.
Special emphasis is placed on improving customer intimacy and the
quality of services and operations. Strategy implementation and
quality improvements might require changes in organizational
structures, which are currently under review.
Some items affecting 2007
The net impact on net sales of the acquisitions and divestments
finalized to date is expected to be about -2% for the full year 2007.
TietoEnator expects amortization of intangible assets to total about
EUR 10 (8.8) million and stock option expenses around EUR 2 (4.0)
million. Costs related to the share-based incentive programme depend
on the company's performance in 2007 and are currently expected to
amount to a maximum of about EUR 5 (0) million.
Risks and uncertainties
The main risks TietoEnator is facing and actively managing are: a
more commoditized market, price pressure, new low-cost competition,
customers' demands for tighter contract terms, the availability and
cost of resources, and the ability to control challenging deliveries.
Prospects for 2007
TietoEnator expects the general IT market to remain active. On
average prices are expected to stay roughly in line with 2006 levels.
The turnaround of underperforming units will take time and there are
some deliveries with low margins. Higher personnel turnover and
active labour market will result in higher subcontracting costs than
in 2006. As a part of its new strategy published on 16 October,
TietoEnator decided to speed up performance improvement programmes to
gain substantially bigger efficiency improvements than with the
current "Profit 2007" programme. The improvement potential and
restructuring costs will be quantified during the final quarter of
2007.
TietoEnator expects its full-year organic growth in 2007 to exceed
the earlier forecast of more than 2%.
On 16 October, TietoEnator changed its profitability guidance and
stated that full-year underlying operating profit will not reach the
2006 level of EUR 124 million. This is mainly due to the development
in product-based businesses in Banking & Insurance and Healthcare &
Welfare business areas. The underlying operating profit does not
include potential capital gains, capital losses and restructuring
expenses.
Financial calendar in 2008
Interim report for January-December 2007 and Financial Statement
Bulletin for 2007 on 6 February
Financial Review and Annual Review 2007 on website in week beginning
11 February
Financial Review and Annual Review 2007 printed on 5 March
Interim report for January-March 2008 on 24 April
Interim report for January-June 2008 on 18 July
Interim report for January-September 2008 on 28 October
The figures in this report are for continuing operations. The
Personec Group business divested in December 2006 is treated as a
discontinued operation for the whole of 2006.
The interim report has been prepared in accordance with International
Accounting Standard (IAS) 34, Interim Financial Reporting, as adopted
by the EU. The accounting policies adopted are consistent with those
used in the annual financial statements for the year ended 31
December 2006 and as described in the annual financial statements. In
addition IFRS 7 "Financial Instruments: Disclosures" has been applied
as from the beginning of 2007, but will not have any major impact on
the Group. The required information will be disclosed in the annual
financial statements for the year ending 31 December 2007.
The figures in this report are unaudited.
Key figures 2007 2006 2007 2007 2007 2006 2006
7-9 7-9 4-6 1-3 1-9 1-9 1-12
Earnings per share, EUR
- basic 0.15 0.26 0.07 0.33 0.54 0.78 3.25
- diluted 0.15 0.26 0.07 0.33 0.54 0.78 3.25
- basic from continuing
operations 0.15 0.26 0.07 0.33 0.54 0.77 1.15
- basic from discontinued
operations - 0.00 - - - 0.01 2.10
Earnings per share from
continuing operations, EUR
a) 0.20 0.31 0.18 0.34 0.72 0.78 1.18
Equity per share, EUR 5.98 7.75 7.70 7.66 5.98 8.51
Return on equity rolling 12
month, % 13.6 24.0 14.8 17.5 13.6 24.0 15.5
Return on capital employed
rolling 12 month, % 18.9 20.9 18.7 21.8 18.9 20.9 18.7
Equity ratio % 43.0 33.3 44.4 44.5 43.0 33.3 48.4
Net interest-bearing
liabilities, EUR million 215.4 354.6 177.7 72.6 215.4 354.6 93.4
Gearing, % 39.2 80.4 31.2 12.9 39.2 80.4 14.9
Investments in continuing
operations, EUR million 25.2 6.1 12.9 27.3 65.4 50.6 77.9
a) Excluding goodwill impairments, amortization on allocated
intangible assets from acquisitions, stock option expenses and
one-time capital gains.
Income statement, EUR
million 2007 2006 2007 2006 change 2006
7-9 7-9 1-9 1-9 % 1-12
Continuing operations
Net sales 404.7 369.4 1 281.1 1191.0 8 1 646.5
Other operating income 1.8 2.8 9.2 14.8 -38 25.1
Employee benefit expenses 223.1 207.8 734.3 689.8 6 938.5
Depreciation and
amortization 17.1 14.4 49.3 43.6 13 59.4
Impairment of goodwill - - - - - -
Other operating expenses 145.7 122.4 441.7 388.9 14 546.2
Share of associated
companies' result 0.1 0.1 0.1 0.3 -67 0.2
Operating profit (EBIT) 20.7 27.7 65.1 83.8 -22 127.7
Net interest expenses -2.2 -0.3 -5.6 -0.5 1 020 -2.1
Net exchange losses/gains -0.4 0.1 0.1 -0.5 -120 -0.6
Other financial income and
expenses -0.3 -0.1 -0.5 -0.5 0 -0.5
Profit before taxes 17.8 27.4 59.1 82.3 -28 124.5
Income taxes -6.8 -7.9 -19.0 -24.0 -21 -37.2
Net profit for the period
from continuing operations 11.0 19.5 40.1 58.3 -31 87.3
Discontinued operations
Net profit for the period
from discontinued
operations - 0.6 - 1.8 159.7
Net profit for the period 11.0 20.1 40.1 60.1 -33 247.0
Net profit for the period
attributable to
Shareholders of the
parent company 10.8 19.7 39.6 58.4 -32 243.9
Minority interest in
continuing operations 0.2 0.1 0.5 0.8 -38 1.0
Minority interest in
discontinued operations - 0.3 - 0.9 2.1
11.0 20.1 40.1 60.1 -33 247.0
Earnings attributable to
the
shareholders
of the parent company per
share, EUR
Basic 0.15 0.26 0.54 0.78 -31 3.25
Diluted 0.15 0.26 0.54 0.78 -31 3.25
Basic from continuing
operations 0.15 0.26 0.54 0.77 -30 1.15
Basic from discontinued
operations - 0.00 - 0.01 2.10
Employee benefit expenses include rental payments on company cars and
non-statutory employee benefits, such as meals, healthcare and
leisure time activities.
The result-based bonuses were EUR 17.6 million (11.1 previous year)
and the stock option expenses (share based payments) were EUR 3.2
million (3.2).
Other operating expenses include EUR 4.9 million of capital losses.
Number of
shares 2007 2007 2007 2007 2006
7-9 4-6 1-3 1-9 7-9
Outstanding
shares, end of
period
Basic 71 661 523 73 596 462 73 596 462 71 661 523 73 596 462
Diluted 71 661 523 73 842 024 73 654 512 71 661 523 73 596 462
Outstanding
shares,
average
Basic 72 931 280 73 596 462 73 596 462 73 372 298 74 910 484
Diluted 72 931 280 73 787 320 73 654 512 73 372 298 74 910 484
Company's
possession of
its own
shares,
End of
period 2 296 650 500 000 500 000 2 296 650 2 245 000
Average 1 063 229 500 000 965 333 841 589 930 978
Balance Sheet, EUR million 2007 2006 change 2006
30 Sep 30 Sep % 31 Dec
Goodwill 450.5 473.9 -5 448.4
Other intangible assets 89.0 84.0 6 82.6
Property, plant and equipment 82.4 86.1 -4 87.9
Deferred tax assets 66.6 82.7 -19 75.2
Investments in associated
companies 1.6 3.3 -52 2.3
Other non-current assets 1.4 1.9 -26 1.4
Total non-current assets 691.5 731.9 -6 697.8
Trade and other receivables 586.1 535.7 9 503.0
Current income tax receivables 28.1 19.6 43 22.3
Interest-bearing current assets 8.2 15.2 -46 12.7
Cash and cash equivalents 57.7 84.6 -32 138.9
Total current assets 680.1 655.1 4 676.9
Total assets 1 371.6 1 387.0 -1 1 374.7
Share capital, share issue
premiums and other reserves 143.5 142.5 1 144.6
Retained earnings 402.0 287.8 40 477.8
Parent shareholders equity 545.5 430.3 27 622.4
Minority interest 3.4 9.8 -65 4.0
Total Equity 548.9 440.1 25 626.4
Finance lease liability 5.2 15.0 -65 13.5
Shareholders' loan - 44.6 0.8
Other interest-bearing loans 150.9 127.6 18 153.6
Deferred tax liabilities 26.2 22.4 17 20.0
Pension obligations 39.9 51.2 -22 46.4
Provisions 5.2 5.7 -9 3.4
Other non-current liabilities 3.3 1.1 200 3.2
Total non-current liabilities 230.7 267.6 -14 240.9
Trade and other payables 450.9 404.0 12 410.6
Current income tax liabilities 15.8 8.8 80 19.7
Interest-bearing loans 125.3 266.5 -53 77.1
Total current liabilities 592.0 679.3 -13 507.4
Total equity and liabilities 1 371.6 1 387.0 -1 1 374.7
Other intangible assets end of September 2007 includes the
pre-payment for shares in Fortuna Technologies Pvt. Ltd EUR 15.2
million.
Deferred tax assets end of September 2007 include the remaining EUR
21 million, which rose from the loss incurred in the parent company
related to the intra-group transaction carried out in April 2004.
Net working capital in the
balance sheet, EUR
million 2007 2006 change 2006
30 Sep 30 Sep % 31 Dec
Accounts receivable 336.2 310.6 8 321.3
Other working capital
receivables 248.6 225.1 10 181.7
Working capital receivables
included in assets 584.8 535.7 9 503.0
Operative accruals 209.2 211.8 -1 215.6
Other working capital
liabilities 233.3 181.8 28 192.2
Pension obligations and
provisions 45.2 56.9 -21 49.7
Working capital liabilities
included in current
liabilities 487.7 450.5 8 457.5
Net working capital in the
balance sheet 97.1 85.2 14 45.5
The change in net working capital in the balance sheet does not
equal to that in the cash flow due to acquisitions and disposals.
Cash Flow, EUR million 2007 2006 2007 2007 2007 2006 2006
7-9 7-9 4-6 1-3 1-9 1-9 1-12
Cash flow from operations
Operating profit 20.7 27.7 9.9 34.5 65.1 83.8 127.7
Adjustments to operating
profit
Depreciation and
amortization 17.1 14.3 16.2 16.0 49.3 43.5 59.4
Profit/loss on sale of
fixed assets and shares -0.2 -0.3 4.8 -1.7 2.9 -8.6 -15.7
Share of associated
companies' result -0.1 -0.1 0.0 0.0 -0.1 -0.3 -0.2
Other adjustments 0.8 1.0 1.0 0.3 2.1 3.0 3.5
Change in net working
capital -11.2 -50.8 -29.9 -6.8 -47.9 -55.7 -37.8
Cash generated from
continuing operations 27.1 -8.2 2.0 42.3 71.4 65.7 136.9
Net financial items -2.5 -2.4 1.0 -1.7 -3.2 -3.7 -2.8
Income taxes paid -4.7 -5.0 -7.0 -1.8 -13.5 -21.0 -24.8
Net cash flow from
continuing operations 19.9 -15.6 -4.0 38.8 54.7 41.0 109.3
Net cash flow from
discontinued operations - -6.7 - - - 1.7 3.7
Total net cash flow from
operations 19.9 -22.3 -4.0 38.8 54.7 42.7 113.0
Cash flow from investing
activities
Acquisition of Group
companies and business
operations, net of cash
acquired 0.2 -3.9 -3.2 -9.3 -12.3 -16.8 -24.6
Capital expenditures -12.8 -3.2 -12.6 -12.1 -37.5 -34.0 -50.6
Disposal of business
operations
and associated companies 0.7 0.0 -1.7 1.9 0.9 9.4 30.4
Other investing activities -15.4 -0.5 4.0 0.4 -11.0 -0.1 1.6
Net cash used in investing
activities from
- continuing operations -27.3 -7.6 -13.5 -19.1 -59.9 -41.5 -43.2
- discontinued operations - -0.4 - - - -25.2 -4.2
Total net cash used in
investing activities -27.3 -8.0 -13.5 -19.1 -59.9 -66.7 -47.4
Cash flow from financing
activites
Dividends 0.0 0.0 -88.3 -0.2 -88.5 -65.9 -65.8
Repurchase of own
shares -30.0 -39.9 0.0 0.0 -30.0 -52.3 -52.3
Proceeds from finance
lease liabilities 0.1 0.1 0.2 0.0 0.3 0.1 0.6
Payment of finance
lease liabilities -2.9 -2.2 -3.5 -2.2 -8.6 -7.3 -9.3
Change in
interest-bearing
liabilities 26.9 56.4 88.6 -69.2 46.3 115.8 41.6
Net cash used in other
financing activities 0.4 -7.0 1.6 2.9 4.9 -6.4 -4.3
Net cash used in
financing activities
from
- continuing operations -5.5 7.4 -1.4 -68.7 -75.6 -16.0 -89.5
- discontinued
operations - 0.0 - - - 24.9 63.0
Total net cash used in
financing activities -5.5 7.4 -1.4 -68.7 -75.6 8.9 -26.5
Change in cash and cash
equivalents -12.9 -22.9 -18.9 -49.0 -80.8 -15.1 39.1
Cash and cash
equivalents at beginning
of period -70.9 -107.3 -89.6 -138.9 -138.9 -99.8 -99.8
Foreign exchange
differences 0.3 -0.2 -0.2 0.3 0.4 0.1 0.0
Cash and cash
equivalents at end of
period 57.7 84.6 70.9 89.6 57.7 84.6 138.9
-12.9 -22.9 -18.9 -49.0 -80.8 -15.1 39.1
Other investing activities include the pre-payment for Fortuna
Technologies Pvt. Ltd shares EUR 15.2 million.
Statement of changes in
Shareholders equity
Parent shareholders equity Minority Total
interest equity
Share
issue Trans-
premiums lation
and
Share other Own diffe- Retained
EUR million capital reserves shares rences earnings
Balance at 31
Dec 2005 78.7 62.7 -80.0 -8.2 435.5 12.2 500.9
Translation
difference 1.2 -4.3 -1.4 -4.5
Minority
interest -4.1 -4.1
Cancellation
of own shares -2.9 2.9 0.0
Transfer
between
restricted
and
non-restricted
equity 0.1 -0.1 0.0
Share based
payments
recognised
against equity 3.1 3.1
Dividend -64.5 -64.5
Own shares
purchased -52.3 -52.3
Other changes 1.5 1.5
Net profit for
the period 58.3 1.7 60.0
At 30
September 2006 75.8 66.9 -80.0 -12.5 380.1 9.8 440.1
Balance at 31
Dec 2006 75.8 68.8 -52.3 -6.6 536.7 4.0 626.4
Translation
difference -1.1 0.4 2.5 1.8
Minority
interest -1.1 -1.1
Cancellation
of own shares 43.3 -43.3 0.0
Share based
payments
recognised
against equity 2.1 2.1
Dividend -88.3 -88.3
Own shares
purchased -32.1 -32.1
Exercise of
share options 0.0 0.0 0.0
Net profit for
the period 39.6 0.5 40.1
At 30
September 2007 75.8 67.7 -41.1 -6.2 449.3 3.4 548.9
SEGMENT INFORMATION
Net sales by business area, EUR
million (primary segment)
2007 2006 Change 2007 2006 Change 2006
Continuing operations 7-9 7-9 % 1-9 1-9 % 1-12
Banking & Insurance 62 63 -1 211 206 3 284
Telecom & Media 153 119 28 476 389 22 542
Government, Manufacturing& Retail 40 51 -21 137 178 -23 236
Healthcare & Welfare 31 30 4 99 100 0 144
Forest & Energy 42 36 18 132 116 14 161
Processing & Network 100 89 12 294 274 8 374
Group elimination incl
other -23 -19 28 -68 -69 -2 -95
Group total 405 369 10 1 281 1 191 8 1 646
Country Sales, EUR
million
(secondary segment)
2007 Change Share 2006 Share 2006 Change
Continuing operations 1-9 % % 1-9 % 1-12 %
Finland 578 5 45 550 46 751 3
Sweden 356 10 28 325 27 454 -3
Germany 113 38 9 82 7 124 21
Norway 61 -3 5 63 5 81 4
Great Britain 42 23 3 34 3 48 48
Denmark 22 -43 2 38 3 51 -1
Italy 21 77 2 12 1 17 -
France 17 28 1 13 1 18 -14
Netherlands 15 -15 1 17 1 25 61
Other 56 -1 4 57 5 77 11
Group total 1 281 8 100 1 191 100 1 646 5
In the third quarter the net sales in Denmark has been decreased with
EUR 5 million, due to sales that in the previous quarters has been
reported as external.
Net sales by industry
segment, EUR million
2007 Change Share 2006 Share 2006 Change
Continuing operations 1-9 % % 1-9 % 1-12 %
Banking and insurance 282 5 22 270 23 374 23
Public 200 -5 16 212 18 292 4
Telecom and media 464 25 36 371 31 515 -6
Forest 64 0 5 64 5 88 -1
Energy 70 26 5 56 5 79 6
Manufacturing 71 9 6 65 5 89 11
Retail & Logistics 61 -5 5 64 5 88 -9
Other 68 -24 5 90 8 122 21
Group total 1 281 8 100 1 191 100 1 646 5
Operating profit (EBIT),
EUR million
2007 2006 Change 2007 2006 Change 2006
Continuing operations 7-9 7-9 % 1-9 1-9 % 1-12
Banking & Insurance - 3.3 4.7 -169.9 -5.3 14.0 -137.6 20.1
Telecom & Media 12.6 8.5 48.8 39.9 25.3 57.7 37.5
Government,
Manufacturing & Retail 0.7 2.3 -68.7 7.4 17.0 -56.7 31.2
Healthcare & Welfare -0.6 1.4 -141.6 0.1 4.6 -97.4 12.5
Forest & Energy 3.4 1.6 118.4 10.3 5.6 83.9 7.8
Processing & Network 12.4 12.3 1.0 26.8 30.4 -11.7 39.7
Business areas 25.3 30.6 -17.3 79.3 97.0 -18.2 148.9
Group Operations incl
other -4.7 -3.1 -52.1 -14.3 -16.8 15.3 - 24.7
Associated companies
outside BA 0.0 0.0 - 0.0 0.0 - 0.0
Group capital gain 0.0 0.2 -100.0 0.1 3.5 -98.5 3.5
Operating profit (EBIT) 20.7 27.7 -25.4 65.1 83.8 -22.4 127.7
Operating profit, EUR
million
excl capital gains and
impairment losses 2007 2006 Change 2007 2006 Change 2006
Continuing operations 7-9 7-9 % 1-9 1-9 % 1-12
Banking & Insurance - 3.3 4.7 -169.9 -1.5 14.0 -110.7 20.1
Telecom & Media 12.6 8.5 48.9 40.0 25.3 57.8 38.7
Government,
Manufacturing & Retail 0.6 2.3 -72.9 8.2 12.3 -33.0 18.0
Healthcare & Welfare -0.6 1.4 -141.6 -1.4 4.6 -130.5 12.5
Forest & Energy 3.4 1.6 118.4 10.3 5.6 83.9 7.8
Processing & Network 12.4 12.3 1.0 26.8 30.2 -11.2 39.5
Business areas 25.2 30.6 -17.6 82.5 92.0 -10.4 136.6
Group Operations incl
other -4.7 -3.1 -52.1 - 14.3 -16.8 15.3 - 24.7
Associated companies
outside BA 0.0 0.0 - 0.0 0.0 - 0.0
Operating profit (EBIT
excl cap gain) 20.6 27.5 -25.3 68.2 75.5 -9.7 112.0
Operating margin (EBIT), %
2007 2006 Change 2007 2006 Change 2006
Continuing operations 7-9 7-9 % 1-9 1-9 % 1-12
Banking & Insurance -5.2 7.4 -12.6 -2.5 6.8 -9.3 7.1
Telecom & Media 8.2 7.1 1.1 8.4 6.5 1.9 6.9
Government, Manufacturing &
Retail 1.8 4.5 -2.7 5.4 9.6 -4.2 13.2
Healthcare & Welfare -1.8 4.6 -6.4 0.1 4.6 -4.5 8.7
Forest & Energy 8.1 4.3 3.7 7.8 4.9 2.9 4.9
Processing & Network 12.5 13.8 -1.4 9.1 11.1 -2.0 10.6
Business areas 6.3 8.3 -2.0 6.2 8.1 -2.0 9.0
Operating margin (EBIT) 5.1 7.5 -2.4 5.1 7.0 -2.0 7.8
Operating margin (EBIT) excl
capital gains and impairment
losses, %
2007 2006 Change 2007 2006 Change 2006
Continuing operations 7-9 7-9 % 1-9 1-9 % 1-12
Banking & Insurance -5.2 7.4 -12.6 -0.7 6.8 -7.6 7.1
Telecom & Media 8.2 7.1 1.1 8.4 6.5 1.9 7.2
Government, Manufacturing &
Retail 1.6 4.5 -2.9 6.0 6.9 -0.9 7.6
Healthcare & Welfare -1.8 4.6 -6.4 -1.4 4.6 -6.0 8.7
Forest & Energy 8.1 4.3 3.7 7.8 4.9 2.9 4.9
Processing & Network 12.5 13.8 -1.4 9.1 11.0 -1.9 10.5
Business areas 6.2 8.3 -2.1 6.4 7.7 -1.3 8.3
Operating margin (EBIT), excl
capital gains and
impairment losses 5.1 7.5 -2.4 5.3 6.3 -1.0 6.8
Personnel
End of period Average
Continuing operations 2007 Change Share 2006 2006 2007 2006
By business area
(primary
segment) 1-9 % % 1-9 1-12 1-9 1-9
Banking & Insurance 2 234 1 14 2 204 2 193 2 237 2 184
Telecom & Media 5 651 13 36 5 006 5 107 5 425 4 781
Government,
Manufacturing &
Retail 1 560 - 20 10 1 954 1 532 1 572 1 974
Healthcare & Welfare 1 112 9 7 1 022 1 079 1 090 1 002
Forest & Energy 1 285 4 8 1 236 1 286 1 286 1 238
Processing & Network 2 104 7 13 1 965 1 966 2 073 1 984
Software Centres 1 326 62 8 818 925 1 119 640
Other Group
Operations 551 9 3 502 507 557 493
Group total 15 823 8 100 14 710 14 597 15 359 14 300
From Jan 2007, 216 persons in India were moved from BA Healthcare &
Welfare to Software Centre in Group Operations. Figures for 2006 have
been restated. The change had a positive effect of 0.3 MEUR on EBIT
2006 in Group Operations and a corresponding negative effect in
Healthcare & Welfare.
End of period Average
Continuing operations 2007 Change Share 2006 2006 2007 2006
By country (secondary
segment) 1-9 % % 1-9 1-12 1-9 1-9
Finland 6 409 3 41 6 217 6 163 6 263 6 309
Sweden 3 358 0 21 3 348 3 239 3 341 3 415
Germany 1 346 15 9 1 166 1 342 1 351 977
Czech 1 069 57 7 681 769 909 550
Norway 738 - 18 5 899 742 749 871
Latvia 558 12 4 497 521 550 453
Poland 364 145 2 149 153 307 46
Denmark 326 - 10 2 364 221 311 360
Great Britain 321 2 2 316 314 319 322
India 271 27 2 213 231 266 179
Italy 233 32 1 176 176 223 171
France 125 17 1 107 114 121 105
Estonia 118 23 1 96 116 112 89
Lithuania 122 19 1 102 102 104 91
Netherlands 115 52 1 76 85 103 73
Other 352 16 2 303 310 329 288
Group total 15 823 8 100 14 710 14 597 15 359 14 300
The personnel figures for the associated companies under
TietoEnator's management responsiblity are reported according to our
holding. Personnel figures including these associated companies to
100% give a total of 16 215 (15 108) at the end of the period.
Total assets by business area, EUR million (primary
segment)
2007 2006 Change 2006
Continuing operations 30 Sep 30 Sep % 31 Dec
Banking & Insurance 260.4 237.5 9 256.0
Telecom & Media 458.1 414.2 16 414.7
Government, Manufacturing & Retail 61.2 80.8 -25 64.1
Healthcare & Welfare 86.2 75.4 13 93.5
Forest & Energy 117.4 104.3 12 112.1
Processing & Network 176.7 170.5 -3 187.3
Group elimination -23.7 -24.6 -4 -34.0
Business areas 1 136.3 1 058.0 8 1 093.9
Group Operations 235.2 319.0 -29 280.9
Group total 1 371.6 1 377.0 -1 1 374.7
Discontinued operations, net impact 0.0 10.0 -100 -
Total assets 1 371.6 1 387.0 -1 1 374.7
Total liabilities by business area, EUR million (primary
segment)
2007 2006 Change 2006
Continuing operations 30 Sep 30 Sep % 31 Dec
Banking & Insurance 113.5 84.8 34 93.2
Telecom & Media 189.5 151.6 25 166.6
Government, Manufacturing & Retail 37.3 43.2 -14 39.2
Healthcare & Welfare 36.5 28.5 28 32.0
Forest & Energy 72.2 50.1 44 52.3
Processing & Network 68.7 78.8 -13 76.3
Group elimination -21.3 - 49.2 -57 -31.0
Business areas 496.4 387.8 28 428.6
Group Operations 326.3 396.6 -18 319.7
Group total 820.6 784.4 5 748.3
Discontinued operations, net impact - 162.5 -100 -
Total liabilities 822.7 946.9 -13 748.3
Segment assets by country, EUR million (secondary
segment)
2007 2006 Change 2006
Continuing operations 30 Sep 30 Sep % 31 Dec
Finland 338.2 334.1 1 329.0
Sweden 323.2 293.0 10 317.4
Norway 96.6 90.5 7 97.5
Germany 174.5 139.0 26 174.6
Great Britain 90.1 88.1 2 99.1
Other 113.7 113.4 0 76.2
Business areas 1 136.3 1 058.0 7 1 093.9
Depreciation, EUR million
2007 2006 Change 2007 2006 Change 2006
Continuing operations 7-9 7-9 % 1-9 1-9 % 1-12
Processing & Network 9.4 7.4 27 27.4 22.9 20 31.5
whereof Finland 8.0 6.0 33 23.1 20.1 15 27.0
Sweden 1.3 1.5 -14 3.8 2.6 45 3.8
Other countries 0.2 - 0.1 -263 0.6 0.2 179 0.7
Other 5.3 4.8 11 14.6 14.4 1 19.2
Group total 14.7 12.2 21 42.0 37.2 13 50.7
Amortization on allocated
intangible assets
from acquisitions, EUR million
2007 2006 Change 2007 2006 Change 2006
Continuing operations 7-9 7-9 % 1-9 1-9 % 1-12
Telecom & Media 1.3 1.2 6 3.8 3.6 5 4.9
Other 1.1 1.0 13 3.5 2.8 27 3.8
Group total 2.4 2.2 9 7.3 6.4 15 8.7
No impairment losses have been recognised during 2007 and 2006.
Capital expenditure by
business area
EUR million
2007 2006 Change 2007 2006 Change 2006
Continuing operations 7-9 7-9 % 1-9 1-9 % 1-12
Processing & Network 9.3 0.0 - 26.0 25.2 3 35.3
whereof Finland 7.4 - 1.7 - 527 21.5 13.6 58 22.1
Sweden 1.9 1.5 30 4.5 11.3 - 60 13.2
Other
countries 0.0 0.3 - 0.0 0.3 - 0.0
Other 3.5 3.3 7 11.5 8.9 29 15.6
Group total 12.8 3.3 289 37.5 34.1 10 50.9
2007 2006
Commitments and contingencies, EUR million 30 Sep 31 Dec change %
For TietoEnator obligations
Pledges - -
On behalf of associated companies
Guarantees 1.4 1.4 0
Other TietoEnator obligations
Rent commitments due in one year 47.7 62.4 -24
Rent commitments due in 1-5 years 136.2 174.3 -22
Rent commitments due after 5 years 1.1 5.7 -81
Operating lease commitments due in one year 8.5 7.2 18
Operating lease commitments due in 1-5 years 15.1 7.0 116
Operating lease commitments due after 5
years 0.0 0.0
Other commitments *) 19.7 25.8 -24
Operating lease commitments are principally three-year lease
agreements that do not include buyout clauses.
*) Including EUR 3.3 (19.3 year 2006) million commitment mainly for
purchase of hardware.
Notional amounts of derivative financial 2007 2006
instruments, EUR million 30 Sep 31 Dec
Foreign exchange contracts 444.0 423.2
Interest rate swaps 102.0 2.0
Includes the gross amount of all notional values for contracts that
have not yet been settled or closed. The amount of notional value
outstanding is not necessarily a measure or indication of market
risk, as the exposure of certain contracts may be offset by that of
other contracts.
Fair values of derivatives, EUR million
The net fair values of derivative financial instruments
at
the 2007 2006
balance sheet date were: 30 Sep 31 Dec
Foreign exchange contracts 0.0 -0.9
Interest rate swaps -1.7 -0.2
Derivatives are used for hedging purposes only.
Ongoing legal disputes
TietoEnator has an ongoing VAT dispute with the Finnish tax
authorities concerning a sum of EUR 3.2 million. Certain other old
legal disputes are also ongoing; as these are minor and
insubstantial, no provisions have been made for them.
Contingent assets
The Finnish tax authorities have confirmed an additional loss of EUR
41.0 million on the loss incurred by the parent company in connection
with the intra-group transaction carried out in April 2004. If the
decision is not contested before the end of October 2007, thecorresponding deferred tax asset, amounting to EUR 10.7 million, will
be recognized in the fourth quarter of 2007.
Major shareholders 30 September 2007
Shares %
1 TietoEnator 2 296 650 3.1%
2 Didner & Gerge Aktiefond 2 116 000 2.9%
3 Roburs fonder 1 677 598 2.3%
4 Mutual Pension Insurance Company Ilmarinen 1 415 751 1.9%
5 Svenska Litteratursällskapet i Finland 1 298 000 1.8%
6 Alfred Berg funds 885 135 1.2%
7 The State Pension Funds 811 500 1.1%
8 Pekka Viljakainen 649 447 0.9%
9 Tapiola pension 600 000 0.8%
10 OP funds 581 274 0.8%
Remaining Nominee registered 46 661 488 63.1%
Others 14 965 330 20.2%
Total 73 958 173 100.0%
Based on ownership records of the Finnish and Swedish central
security depositories.
The number of shares in TietoEnator's possession includes 361 650
shares repurchased in May 2006 for the three-year share-based
incentive plan and 1 935 000 shares repurchased during the third
quarter of 2007.
In June Goldman Sachs Group, Inc. announced that its holding in
TietoEnator Corporation had increased to 3 905 502 shares, which
represents 5.27% of the share capital and voting rights.
TIETOENATOR CORPORATION
For further information:
Åke Plyhm, Interim CEO, TietoEnator, tel. +46 10 481 3321, +46 705 65
86 31, ake.plyhm@tietoenator.com,
Timo Salmela, CFO, TietoEnator, tel. +358 400 434 974,
timo.salmela@tietoenator.com,
Reeta Kaukiainen, EVP, Communications and Investor Relations,
TietoEnator, tel. +358 50 5220924, reeta.kaukiainen@tietoenator.com
or
Paula Liimatta, IR Manager, TietoEnator, tel. +358 40 580 3521,
paula.liimatta@tietoenator.com
Press conference for analysts and media will be held in Stockholm,
Scandic Hotel Anglais, cabinet Birk, Humlegårdsgatan 23, at 9.30 am
CET, (10.30 am EET, 8.30 am UK time).
The conference will be hosted in English by Interim CEO Åke Plyhm,
CFO Timo Salmela, EVP Communications and Investor Relations Reeta
Kaukiainen and Investor Relations Manager Paula Liimatta.
The conference will be webcast and published live on TietoEnator's
website
www.tietoenator.com/conference and materials and there will be a
possibility to present questions on-line. An on-demand video will be
available after the conference.
Conference call hosted by management starting at 4.00 pm EET, (3.00
pm CET, 2.00 pm UK time) will also be available as live audio webcast
on www.tietoenator.com/conference and materials . Callers may access
the conference directly at the following telephone numbers: US
callers: +1 866 966 5335, non-US callers: +44 20 3023 4402, no code.
Lines to be reserved ten minutes before start of conference call.
An on-demand audiocast of the conference will also be published on
TietoEnator's website later during the day. A replay will be
available until 2 November 2007 in the following numbers: US callers:
+1 866 583 1035, non-US callers: +44 20 8196 1998, access code 141
833#.
TietoEnator publishes financial information in English, Finnish and
Swedish. All releases are posted in full on TietoEnator's website
www.tietoenator.com as soon as they are published.
TietoEnator is among the leading architects in building a more
efficient information society and one of the largest IT services
providers in Europe. TietoEnator specializes in consulting,
developing and hosting its customers' business operations in the
digital economy. The Group's services are based on a combination of
deep industry-specific expertise and the latest information
technology. TietoEnator has about 16 000 experts in close to 30
countries.
www.tietoenator.com
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TietoEnator Corporation
Business ID: 0101138-5
Fax +358 9 862 63091
Registered office: Espoo
Kutojantie 10 PO Box 33
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SE-164 87 KISTA, SWEDEN
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FI-02631 ESPOO, FINLAND
Tel +358 9 862 6000
mail: info@tietoenator.com
www.tietoenator.com
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