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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 profitabilityTieto 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 -------------------------------------------------------------------------------- Net sales, EUR million 373.3 423.5 1 254.3 1 346.7 -------------------------------------------------------------------------------- Change, % -12 2 -7 1 -------------------------------------------------------------------------------- Organic change, % -4 4 -3 2 -------------------------------------------------------------------------------- Operating profit (EBITA), EUR million 25.6 33.4 73.2 75.1 -------------------------------------------------------------------------------- Operating margin (EBITA), % 6.9 7.9 5.8 5.6 -------------------------------------------------------------------------------- Operating profit (EBIT), EUR million 24.8 32.0 70.4 70.8 -------------------------------------------------------------------------------- Operating margin (EBIT), % 6.6 7.6 5.6 5.3 -------------------------------------------------------------------------------- Operating profit (EBIT) excl. one-off 37.9 37.5 101.1 94.5 items1), EUR million -------------------------------------------------------------------------------- Operating margin (EBIT) excl. one-off 10.1 8.9 8.1 7.0 items1), % -------------------------------------------------------------------------------- Profit after taxes, EUR million 18.4 22.7 47.2 47.9 -------------------------------------------------------------------------------- EPS, EUR 0.25 0.32 0.65 0.67 -------------------------------------------------------------------------------- Net cash flow from operations, EUR million 38.9 36.3 90.1 101.3 -------------------------------------------------------------------------------- Return on equity, 12-month rolling, % 5.4 11.2 5.4 11.2 -------------------------------------------------------------------------------- Return on capital employed, 12-month 12.4 18.5 12.4 18.5 rolling, % -------------------------------------------------------------------------------- Investments, EUR million 15.5 15.6 48.1 43.6 -------------------------------------------------------------------------------- Interest-bearing net debt, EUR million 45.0 59.0 45.0 59.0 -------------------------------------------------------------------------------- Net debt/EBITDA 0.2 0.3 0.2 0.3 -------------------------------------------------------------------------------- Book-to-bill 0.8 0.7 1.0 1.0 -------------------------------------------------------------------------------- Order backlog 1 513 1 652 1 513 1 652 -------------------------------------------------------------------------------- Personnel on 30 September 15 161 17 404 15 161 17 404 -------------------------------------------------------------------------------- 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 -------------------------------------------------------------------------------- Managed Services 120 125 -4 3.6 7.5 -------------------------------------------------------------------------------- Consulting and System 92 109 -15 4.0 13.0 Integration -------------------------------------------------------------------------------- Industry Products 101 115 -12 20.7 13.0 -------------------------------------------------------------------------------- Product Development 60 75 -19 3.0 0.4 Services -------------------------------------------------------------------------------- Support Functions and -6.6 -1.8 Global Management -------------------------------------------------------------------------------- Total 373 424 -12 24.8 32.0 -------------------------------------------------------------------------------- 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 -------------------------------------------------------------------------------- Managed Services 3.0 6.0 4.9 7.5 -------------------------------------------------------------------------------- Consulting and System 4.4 11.9 10.5 12.4 Integration -------------------------------------------------------------------------------- Industry Products 20.5 11.3 20.7 12.3 -------------------------------------------------------------------------------- Product Development 5.0 0.6 7.9 2.2 Services -------------------------------------------------------------------------------- Total 6.6 7.6 10.1 8.9 -------------------------------------------------------------------------------- 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 ------------------------------------------------------------------------------ Financial Services 84 85 -2 ------------------------------------------------------------------------------ Manufacturing, Retail and Logistics 70 78 -10 ------------------------------------------------------------------------------ Public, Healthcare and Welfare 96 100 -4 ------------------------------------------------------------------------------ Telecom, Media and Energy 63 86 -26 ------------------------------------------------------------------------------ Product Development Services 60 75 -19 ------------------------------------------------------------------------------ Total 373 424 -12 ------------------------------------------------------------------------------ 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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