2008-10-28 07:00:00 CET
2008-10-28 07:03:32 CET
REGULATED INFORMATION
TietoEnator Oyj - Interim report (Q1 and Q3)
TietoEnator's interim report 3/2008 (January - September 2008) - Profitability improved throughout the company in the third quarter
TietoEnator Corporation Quarterly Report 28 October 2008, 8.00 am EET
To download the PDF file, please use this link:
http://hugin.info/3114/R/1262011/277498.pdf
Highlights - the third quarter
* Net sales grew by 5% to EUR 425.3 (404.7) million.
* Operating profit, excluding one-off items mainly related to the
Performance Improvement Programme, amounted to EUR 36.7 (20.7)
million, representing an operating margin of 8.6% (5.1).
* Operating profit, including one-off items of EUR 2.8 million,
amounted to EUR 33.8 (20.7) million.
* Profit after taxes was EUR 23.7 (11.0) million.
* EPS amounted to EUR 0.33 (0.15).
* Net cash flow from operations amounted to EUR -5.7 (19.9)
million.
* New strategy and operating model launched and new Leadership Team
appointed.
* The Performance Improvement Programme progressed well.
Highlights - January-September
* Net sales totalled EUR 1 373.7 (1 281.1) million, up 7%.
* Operating profit, excluding one-off items mainly related to the
Performance Improvement Programme, totalled EUR 107.5 (68.2)
million, representing an operating margin of 7.8% (5.3).
* Operating profit including one-off items amounted to EUR 88.0
(65.1) million.
* Profit after taxes was EUR 58.7 (40.1) million.
* EPS amounted to EUR 0.81 (0.54).
* Net cash flow from operations amounted to EUR 112.8 (54.7)
million.
Hannu Syrjälä, President and CEO:"In the third quarter, we performed well and were again able to
improve our profitability. Thanks to the Performance Improvement
Programme, we have increased our utilization rate and substantially
improved quality in deliveries. In line with our strategy, we have
also increased our resources in the global centres of excellence,
where the number of our personnel has increased by almost 50% from
last year.
Now that the times are tougher, it is important that we are able to
support our customers as they seek to improve their performance. Our
new operating model, based on industries, countries and service
lines, helps us do this, as it will make us more sensitive in
recognizing customer-specific needs and developing our offering to
meet the demand. This, coupled with our investments in developing
sharper competencies and more productized offerings, will result in
more added value for our customers."
Market development
In most sectors, the market situation remained fairly positive in the
third quarter. However, there are signs of cautiousness regarding
future IT investments in new solutions. Customers seek to rationalize
their operations and this maintains healthy demand for application
and ICT infrastructure management as well as maintenance in most
sectors. These services account for approximately half of
TietoEnator's net sales.
The anticipated effects of the economic slowdown on IT investments
vary by customer segment. As the finance sector is in the core of the
turmoil, banking is expected to be affected the most. The impact on
the manufacturing industry is expected to be less negative. Since the
continuity of IT systems is of utmost importance in these industries,
demand for application and ICT infrastructure management is not
expected to change. Rationalization measures have been ongoing for a
long time in some areas, such as the public sector, i.e. government,
healthcare and welfare, and TietoEnator anticipates that steady
demand will continue.
Banking and insurance
The overall market situation has changed rapidly in the finance
sector. Due to the credit crisis, customers have adopted a cautious
attitude towards IT investments and may thus delay some of their
investment decisions. The weakened market conditions have not yet
affected the market in Russia, where demand is still strong in
certain product areas, such as Cards.
Telecom and media
The first signs of a slowdown in the telecom sector appeared during
the second quarter. As anticipated, overall IT demand in the telecom
and media sectors weakened in the third quarter.
During the long and strong growth cycle in the sector, the industry
has made big investments in new technologies, such as 3G and wireless
IP access. Investments by operators and telecom equipment
manufacturers will thus be lower for some time. Additionally, many
customers have launched cost-saving initiatives. Due to these
factors, demand for network R&D has levelled off in Europe.
In the telecom sector, there is an ongoing trend to consolidate
service purchases in the hands of a few key contractors. The upshot
is that the volumes of each selected contractor will most likely
grow. As the leading R&D service provider, TietoEnator has been a key
partner to many of its customers. The company expects this trend to
favour TietoEnator in the future as well.
Government, manufacturing and retail
Overall demand has remained solid in all of these areas as customers
are seeking to improve performance and productivity. Government
customers plan to start several development projects in the coming
years. For example, the Finnish government sector will reorganize its
regional administration and this will open up new opportunities.
The positive trend in the manufacturing industry has continued.
Although uncertainty in the global markets has increased,
manufacturing companies have continued to invest in IT, but may
tighten their IT budgets in future. Retail customers are in the
market for IT systems to help them provide new ways to manage
customer demand more accurately. The economic slowdown has not yet
impacted on retail business in Finland, unlike in the Baltic
countries where the first signs of weakening demand are already
visible.
Healthcare and welfare
Demand in the Finnish healthcare market has been steady. The national
patient archive is one of the market drivers in Finland. The general
trend in Sweden and Norway is to consolidate regional systems, but
market development is slow. The Nordic welfare market, however, is
active in all countries. The economic slowdown might even increase
the demand for IT services as customers seek to boost efficiency,
especially in the public sector. The private sector generates only a
small share of TietoEnator's sales.
Forest and energy
In the forest sector, restructuring in the industry, customers'
cost-saving initiatives and the tight finance market may increase
uncertainty in the short term, but on the other hand, restructuring
opens up new opportunities. Nordic customers are closing down excess
capacity in the Nordic countries, but are expanding business in
Russia and Asia, especially China.
In the energy sector, the market situation is good for both the oil
and gas segment and the utilities sector. The worldwide long-term
trend is that demand for energy is growing fast, especially in
countries like China, India, Russia and Brazil. Despite great
fluctuations in the price of oil, investments in finding new oil
reservoirs and utilizing old ones also serve to maintain IT
investments at a healthy level. In the utility segment, both the
rising demand for energy and the deregulation of the sector in Europe
ensure IT investments in the coming years.
Infrastructure outsourcing
The market for infrastructure outsourcing in the Nordic countries has
remained active and is growing steadily. The need to rationalize
operations may speed up customers' new outsourcing decisions.
Customers are looking for more flexible solutions and request broader
service agreements that provide end-to-end business process coverage.
Price pressure persists in new outsourcing contracts and contract
renewals.
TietoEnator's business transactions and major agreements in
January-September
Following the consolidation of Sampo Bank and Danske Bank,
TietoEnator's business volumes to these customers have decreased. For
this reason, Primasoft Oy's operations and ownership have been
reorganized. In April, TietoEnator acquired the entire share capital
of Primasoft Oy, a joint venture previously owned by TietoEnator
(60%) and other parties (40%). In connection with the agreement,
parts of Primasoft's application management business were sold. These
transactions will have a negative impact of around EUR 20 million on
the full-year net sales of Banking & Insurance and Processing &
Network in 2008.
In January, TietoEnator opened a new office in Chengdu to expand its
operations in China. The Chengdu centre serves TietoEnator's telecom
customers and offers services for mobile devices and network
manufacturers as well as for operators.
In March, Sjukvårdsrådgivningen SVR AB (the Swedish Healthcare
Advisory Organization) chose TietoEnator as a supplier of a solution
for a national patient overview (NPO). The agreement will run for
five years and the total value of the agreement is at least EUR 12
million.
In May, TietoEnator, OP-Pohjola Group Central Cooperative (OPK) and
Ilmarinen Mutual Pension Insurance Company concluded an agreement on
the delivery of ICT operations management services for the OP Pohjola
Group and Ilmarinen for the next seven years starting on 1 June 2008.
The services are produced by the joint venture FD Finanssidata, of
which TietoEnator owns 60%, OPK 36% and Ilmarinen 4%.This is one of
the largest agreements TietoEnator has made in recent years. In June,
TietoEnator concluded another major agreement when TeliaSonera
renewed its IT and application operations agreement.
In September, the City of Stockholm and TietoEnator extended their
agreement on the end-to-end provision of IT and telephony. The
extended agreement comes into effect on 1 August 2010 and runs until
31 July 2012. The delivery to the City of Stockholm will be made in
co-operation with SYSteam, SiriusIT, Aditro and TeliaSonera. The
order is valued at approximately EUR 41 million, of which
TietoEnator's share is approximately EUR 26 million.
Net sales
Net sales in the third quarter
Third-quarter net sales grew by 5% to EUR 425.3 (404.7) million or by
7% in local currencies. Organic growth totalled 5%.
Net sales Organic
Q3 net sales Q3 organic growth in growth in
growth, % growth, % Jan-Sep, % Jan-Sep, %
Banking & Insurance 4 6 3 5
Telecom & Media -1 -1 6 5
Government, 7 8 5 6
Manufacturing & Retail
Healthcare & Welfare 21 21 17 17
Forest & Energy 0 0 1 1
Processing & Network 12 12 15 15
Total incl. Group 5 5 7 8
eliminations
In Banking & Insurance, net sales grew by 4%. The sale of parts of
Primasoft's application management business as well as the winding
down of German operations in 2007 had a negative impact on the net
sales. The trend in net sales was particularly good in certain
product areas, such as Cards and Capital Markets, and the partnership
business.
Telecom & Media held on to its strong market position in the third
quarter. Due to weak market development in the telecom sector,
especially in network R&D, the net sales of the business area
remained at the same level as in the third quarter of 2007.
Processing & Network's net sales grew by 12%, clearly outpacing the
relevant market. The business area concluded several major agreements
in the second half of 2007 and the first half of 2008. The most
significant of these agreements were made with TeliaSonera,
Op-Pohjola Group and Ilmarinen.
In Government, Manufacturing & Retail, steady demand has continued in
all sectors. In Healthcare & Welfare, growth was good in all market
areas and units, although the progress in the healthcare business in
Finland has been slower than expected in some projects. The business
area concluded several mid-sized and large new agreements in the
second half of 2007 and the first half of 2008. Sweden was the
strongest growing market for Healthcare & Welfare.
Forest & Energy's sales growth remained weak partly due to lower
sales to one major customer in the utilities sector. The energy
market remained active, but a shortage of resources hampered growth
in some areas. Despite the challenging market in the forest sector,
the business segment grew its net sales.
Net sales in January-September
TietoEnator's nine-month net sales grew by 7% to EUR 1 373.7
(1.281.1) million or 8% in local currencies. Organic growth totalled
8%.
The most solid performance has been seen in Healthcare & Welfare and
Processing & Network. In Telecom & Media, the modest increase in net
sales reflects the cautious stance on investments in the telecom
sector.
Net sales grew by 8% in Finland and by 5% in Sweden. In Norway, net
sales grew by 10% thanks to Banking & Insurance's strong performance.
In Germany, net sales declined by 5%, mainly due to the closure of
Banking & Insurance's operations in 2007.
The telecom and media sector's share of consolidated net sales
amounted to 35% (36). The banking and insurance sector generated 22%
(22) of net sales, whereas the public sector's contribution was 15%
(16). The forest sector's contribution was 5% (5) and the energy
sector's 6% (5).
The order backlog, which only comprises services ordered with binding
contracts, amounted to EUR 1 140.9 (1 194.9) million at the end of
the period. Processing & Network's share of the order backlog is 45%.
In total, 26% (27) of the backlog is expected to be invoiced in 2008.
Performance Improvement Programme
The Performance Improvement Programme is expected to generate annual
cost savings of EUR 130 million as from the end of 2009. A major part
of the actions related to this programme will be implemented in 2008.
The benefits are expected to materialize with an over 50% run-rate
effect from the end of 2008 and in full from the end of 2009.
The programme has progressed well. The actions taken by the end of
September amount to annualized savings of EUR 86 million, of which
close to EUR 30 million has already impacted 2008 performance. The
savings reached to date will come into full effect in 2009. Almost
two thirds of this improvement is employee related. The rest comes
from transferring production to the global centres of excellence as
well as better procurement conditions.
The costs related to these actions have impacted and will continue to
impact TietoEnator's profitability during 2008. The restructuring
costs, provisions and impairments related to the programme are
expected to amount to approximately EUR 160 million of which one-off
costs of EUR 104.7 million materialized in 2007. In January-September
2008, TietoEnator booked EUR 20.8 million in one-off items. The
company will book EUR 15-20 million in costs related to the programme
in the fourth quarter of 2008, and the rest during 2009.
Profitability
Profitability in the third quarter
All business areas improved their profitability in the third quarter
and the operating margin has now risen to a higher level. Operating
profit, excluding one-off items related to the Performance
Improvement Programme, improved substantially in the third quarter
and amounted to EUR 36.7 (20.7) million, representing a margin of
8.6% (5.1). The actions related to the Performance Improvement
Programme were the main contributor to the rise in margin.
In the third quarter of 2008, TietoEnator booked EUR 2.8 million in
one-off costs related to the programme. There were no capital gains
(capital gain of EUR 0.1 million in 2007) in the quarter.
Third-quarter operating profit, including one-off items, amounted to
EUR 33.8 (20.7) million.
Operating Operating Operating
profit Operating profit margin of
of the margin of of the the
underlying the underlying underlying
business (1) underlying business (1) business (1)
in business (1) in in
Q3/2008, in Jan-Sep, Jan-Sep, %
EUR million Q3/2008, % EUR million
Banking & 5.7 8.8 20.3 9.4
Insurance
Telecom & Media 14.1 9.3 42.2 8.4
Government, 4.4 10.2 14.3 9.9
Manufacturing &
Retail
Healthcare & 2.7 7.1 5.0 4.3
Welfare
Forest & Energy 3.6 8.6 9.3 7.0
Processing & 15.0 13.4 40.6 12.0
Network
Group operations -8.8 -24.2
Total 36.7 8.6 107.5 7.8
1) Excl. one-off items related to the Performance Improvement
Programme, capital gains/losses, badwill and impairment losses
In Banking & Insurance, the operating margin of the underlying
business improved to 8.8% (-5.2). In the third quarter of 2007, the
business area suffered from a few loss-making projects. The margin
improvement is also attributable to decreased use of subcontractors
and lower personnel and other costs.
In Telecom & Media, the operating margin improved to 9.3% (8.3). Due
to the summer vacations, the second and third quarters are usually
weaker for Telecom & Media. Despite the negative impact of fewer
working days, the margin has improved from the previous quarter's
levels. The margin improvement is mainly attributable to the actions
related to the Performance Improvement Programme.
In Processing & Network, the operating profit amounted to EUR 15.0
(12.6) million, representing an operating margin of 13.4% (12.7). The
third quarter is the strongest season for the business area.
In Government, Manufacturing & Retail, strong performance was
achieved thanks to a higher utilization rate and cost savings related
to the Performance Improvement Programme. In Healthcare & Welfare,
the positive trend continued, driven primarily by a higher
utilization rate and better management of deliveries in the
solution-based business. The healthcare business in Scandinavia and
Central Europe has improved but continues to struggle with
unsatisfactory profitability.
Profitability improved somewhat in the Forest & Energy business area.
The improvement was attributable mainly to better performance in the
utilities sector.
Net financial expenses stood at EUR 3.5 (2.9) million in the third
quarter. Net interest expenses were EUR 2.3 (2.2) million and
one-time net losses from foreign exchange transactions EUR 2.2 (0.4)
million. Other financial income and expenses amounted to EUR positive
1.0 (negative 0.3) million.
Third-quarter earnings per share (EPS) totalled EUR 0.33 (0.15).
Operating profit (EBIT) includes EUR 2.7 (2.4) million from
amortization on allocated intangible assets. The costs arising from
share-based payments of EUR 1.7 (1.2) million are included in
employee benefit expenses.
Profitability in January-September
Operating profit, excluding one-off items mainly related to the
Performance Improvement Programme, amounted to EUR 107.5 (68.5)
million, representing a margin of 7.8% (5.3). Substantial improvement
in Banking & Insurance's profitability and Processing & Networks'
excellent performance had a significant impact on the margin
development.
In the nine-month period, TietoEnator booked EUR 20.8 million in
one-off items related to the Performance Improvement Programme. Out
of these items, costs from personnel restructuring totalled around
EUR 13 million. Additionally, the company booked an income of EUR 1.3
million from badwill recognition. Nine-month operating profit,
including one-off items, amounted to EUR 88.0 (65.1) million.
Nine-month net financial expenses stood at EUR 12.2 (6.0) million.
Net interest expenses were EUR 6.8 (5.6) million and one-time net
losses from foreign exchange transactions EUR 4.5 (positive 0.1)
million. Other financial income and expenses amounted to EUR -0.9
(-0.5) million.
Nine-month earnings per share totalled EUR 0.81 (0.54).
Operating profit (EBIT) for the nine-month period includes EUR 7.6
(7.3) million from amortization on allocated intangible assets. The
costs arising from share-based payments of EUR 4.4 (3.2) million are
included in employee benefit expenses.
The 12-month rolling return on capital employed (ROCE) was 8.9% and
the return on shareholders' equity (ROE) -2.4%.
Financing and investments
Third-quarter net cash flow from operations amounted to EUR -5.7
million (positive 19.9). Operating profit contributed EUR 51.8
million (38.3) and the increase in net working capital consumed EUR
46.5 million (11.2). The increase in net working capital of EUR 46.5
million was mainly due to payment of vacation pay and related social
costs and payroll tax.
In the nine-month period, net cash flow from operations amounted to
EUR 112.8 (54.7) million. Operating profit contributed EUR 139.4
(119.3) million and the increase in net working capital consumed EUR
5.3 (47.9) million. Tax payments amounted to EUR 16.3 (13.5) million.
Dividends of EUR 35.8 million were paid in April.
Acquisitions totalled EUR 6.6 million in the nine-month period.
The equity ratio was 42.0% (43.0). Gearing improved to 34.3% (39.2).
Net debt totalled EUR 169.7 (215.4) million, including EUR 223.5
million in interest-bearing debt, EUR 14.7 million in finance lease
liabilities, EUR 10.1 million in finance lease receivables and EUR
58.2 million in cash and cash equivalents.
The interest-bearing debt consists of one seven-year bond at EUR 100
million (maturing in December 2013) and one seven-year private
placement at EUR 50 million (maturing in July 2012) and usage of EUR
55 million from the short-term EUR 250 million commercial paper
programme and EUR 15 million from the five-year 250 million committed
syndicated loan facility (maturing in December 2011).
Accrual-based investments totalled EUR 85.1 (65.4) million for the
period. Capital expenditure, including financial leasing, accounted
for EUR 70.4 (37.5) million and investments in subsidiary and
associated company shares for EUR 14.5 (28.0) million.
Personnel
The number of full-time employees totalled 16 392 (15 823) at the end
of September. Acquisitions and new outsourcing contracts added 56
employees in the nine-month period.
The 12-month rolling employee turnover stood at 13.5% (10.5) at the
end of September. The average number of full-time employees was 16
355 (15 359) in the nine-month period.
As a result of the national salary raises agreed in the collective
labour agreements in Finland and Sweden, wage inflation in Finland
and Sweden is expected to be about 4-5% in 2008.
At the end of September, the number of employees in global centres of
excellence had increased by close to 50% from last year and totalled
about 3 950 (2 700), or 23% (16) of the total headcount. According to
the company strategy, operations in India and China grew fast and
personnel in these countries more than doubled.
Board of Directors
In September, TietoEnator's Board of Directors decided on changes in
the composition of its Compensation and Nomination Committee and
Audit and Risk Committee. Anders Ullberg was elected the new Chairman
of the Compensation and Nomination Committee replacing Kalevi
Kontinen, who will continue as a member of the Board of Directors.
Olli Riikkala was elected the Chairman of the Audit and Risk
Committee replacing the current Chairman Anders Ullberg, who will
continue as a member of the committee.
New strategy, operating model and Leadership Team
According to its new strategy published in July, TietoEnator seeks to
be the leading IT service company in Northern Europe by 2011. The
company has special growth initiatives planned for the global telecom
industry as well as for Sweden and Russia. The main markets for
TietoEnator will be the Nordic countries, Germany and Russia.
TietoEnator differentiates itself from its competitors through
superior customer centricity resulting from a deep understanding of
its customers' businesses and needs. In order to maximize customer
value, TietoEnator combines its country- and industry-level resources
and thereby further strengthens the company's sales and customer
service organization.
In September, TietoEnator announced its new operating model and
appointed the new Leadership Team as of 1 January 2009. The new
Leadership Team will comprise:
Hannu Syrjälä, President and CEO
Eva Gidlöf, Executive Vice President, Country Head of Sweden
Kavilesh Gupta, Executive Vice President, Head of Service lines
Seppo Haapalainen, Executive Vice President, Chief Financial Officer
(CFO)
Ari Karppinen, Executive Vice President, Country Head of Finland
Bengt Möller, Executive Vice President, Head of Telecom and Media
industries
Johanna Pyykönen-Walker, Executive Vice President, Head of HR
Ari Vanhanen, Executive Vice President, Head of Industries
Pekka Viljakainen, Executive Vice President, Head of International
and Head of Customer and Marketing Operations (CMO)
The Head of Financial Services will be recruited during the coming
months and will be a member of the Leadership Team as well.
Transactions with related parties
The related parties of TietoEnator are its Board of Directors,
President and CEO, the Corporate Management Team (CMT) and the
Group's associated companies.
The bonus levels of the President and CEO and CMT members were
reviewed with effect from the beginning of 2008. The President and
CEO's bonus is a maximum of 100% of his annual base salary and is
based on the Group's net sales and operating profit. The reward
factors for the CMT members are based on the financial performance of
the Group and their own units. In addition, the Board has implemented
a retention plan for the CEO and CMT members connected to the public
tender offer that was on-going during the second quarter of 2008.
Two Board members, Olli Riikkala and Risto Perttunen, were given a
special assignment by the Board during the public tender offer that
was on-going in the second quarter. For this work they were paid a
special compensation totalling approximately EUR 80 000.
Transactions with associated companies are not considered to be
material.
Shares and options
At the end of September, the total number of shares amounted to
72 023 173 and the share capital to EUR 75 841 523. The number of
shares in TietoEnator's possession totalled 361 650, representing
0.5% of the total number of shares and voting rights. The accounting
countervalue of the shares in the company's possession amounts to EUR
383 349. The outstanding number of shares, excluding the shares in
the company's possession, was 71 661 523 at the end of September.
In the third quarter, JPMorgan Chase & Co. announced that its holding
in TietoEnator had increased to 5.1%. OP-Pohjola Group Central
Cooperative (OPK) flagged its ownership twice. According to the
latest information, it held 4.7% of the company shares in August.
Some items affecting 2008
The total costs related to the public tender offer are estimated to
amount to EUR 12 million in 2008. This estimate includes the
retention compensation for a number of key managers and the President
and CEO.
TietoEnator receives a discount for occupational pension premiums in
Sweden in 2008. The total impact of the discount on TietoEnator's
operating profit in 2008 is around EUR 6 million. The effect is
evenly spread over the year.
The company will book EUR 15-20 million in costs related to the
Performance Improvement Programme in the fourth quarter of 2008. In
January-September this year, TietoEnator has booked EUR 20.8 million
in one-off items related to this programme.
Risks and uncertainties
The economic slowdown might have a negative impact on volume growth
and increase price pressure towards the year-end. On top of this,
high personnel turnover, the availability of competent employees and
the cost of resources remain among the main risks in 2008.
Implementing the new strategy and company structure may create
uncertainty within the company in the short term. The ability to
control ever more complex multinational deliveries also poses a
continuous risk. Due to a more commoditized market and fierce
competition, price pressures continue.
A comprehensive description of the long-term risks is available in
the Report by the Board of Directors 2007.
Prospects for 2008
TietoEnator anticipates the overall IT market to grow at a modest
rate during the rest of 2008 due to the economic slowdown. Price
pressure exists, but on average, prices are expected to either stay
approximately at the same level or be higher than in 2007.
TietoEnator expects the labour market to cool down towards the end of
2008.
A major part of the actions related to TietoEnator's Performance
Improvement Programme will be implemented in 2008. The costs related
to these actions have impacted and will continue to impact
TietoEnator's profitability during 2008. The positive impacts of the
programme have started to materialize in 2008.
TietoEnator expects its full-year revenue growth in 2008 to follow
the overall development in the relevant market. The estimate does not
include business acquisitions, divestments or closures.
Accounting policies
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 2007 and as described in the annual financial statements.
The figures in this report are unaudited.
Financial calendar in 2009
Interim report for January-December 2008 and Financial Statement
Bulletin for 2008 on 10 February 2009
Financial Review and Annual Review 2008 on TietoEnator's website in
week 10
Annual General Meeting on 26 March 2009
Interim report for January-March 2009 on 24 April
Interim report for January-June 2009 on 17 July
Interim report for January-September 2009 on 21 October
Key figures 2008 2007 2008 2008 2008 2007 2007
7-9 7-9 4-6 1-3 1-9 1-9 1-12
Earnings per share, EUR
- basic 0.33 0.15 0.26 0.23 0.81 0.54 -0.44
- diluted 0.33 0.15 0.26 0.23 0.81 0.54 -0.44
Earnings per share, EUR *) 0.36 0.20 0.29 0.36 1.00 0.72 0.77
Equity per share, EUR 6.90 7.66 6.58 6.29 6.90 7.66 6.67
Return on equity rolling 12
months, % -2.4 13.6 -4.9 -7.7 -2.4 13.6 -5.7
Return on capital employed
rolling 12 months,
% 8.9 18.9 8.8 7.2 8.9 18.9 7.8
Equity ratio % 42.0 43.0 38.8 38.0 42.0 43.0 40.2
Net interest-bearing
liabilities, EUR million 169.7 215.4 138.1 139.7 169.7 215.4 164.5
Gearing, % 34.3 39.2 29.3 31.0 34.3 39.2 34.4
Investments, EUR million 25.7 25.2 23.2 36.2 85.1 65.4 87.7
*) Excluding one-off items related to the Performance Improvement
Programme, goodwill impairment, badwill and capital gains and losses.
Income statement, EUR
million 2008 2007 2008 2007 change 2007
7-9 7-9 1-9 1-9 % 1-12
Net sales 425.3 404.7 1 373.7 1 281.1 7 1 772.4
Other operating income 2.2 1.8 8.4 9.2 -9 13.3
Employee benefit expenses 227.1 223.1 777.2 734.3 6 1 021.3
Depreciation and
amortization 16.7 17.1 49.3 49.3 0 77.0
Impairment of goodwill - - - - 40.0
Other operating expenses 149.9 145.7 467.6 441.7 6 646.2
Share of associated
companies' result 0.0 0.1 0.0 0.1 0.1
Operating profit (EBIT) *) 33.8 20.7 88.0 65.1 35 1.3
Net interest expenses -2.3 -2.2 -6.8 -5.6 21 -7.1
Net exchange losses/gains -2.2 -0.4 -4.5 0.1 Neg. -0.7
Other financial income and
expenses 1.0 -0.3 -0.9 -0.5 80 -2.1
Profit before taxes 30.3 17.8 75.8 59.1 28 -8.6
Income taxes -6.6 -6.8 -17.1 -19.0 -10 -22.6
Net profit for the period 23.7 11.0 58.7 40.1 46 -31.2
Net profit for the period
attributable to
Shareholders of the
parent company 23.7 10.8 58.3 39.6 47 -32.3
Minority interest 0.0 0.2 0.4 0.5 -20 1.1
23.7 11.0 58.7 40.1 46 -31.2
Earnings attributable to
the shareholders
of the parent company per
share, EUR
Basic 0.33 0.15 0.81 0.54 50 -0.44
Diluted 0.33 0.15 0.81 0.54 50 -0.44
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 22.3 million (17.6 previous year)
and stock option expenses (share based payments) were EUR 4.4 million
(3.2).
*) Operating profit 2008 includes one-off items of EUR 20.8 million
related to the Performance Improvement Programme in the nine-month
period and EUR 2.8 million in the third-quarter. In addition, the
nine-month profit is negatively impacted by the cost of EUR 9.7
million related to the occurred public tender offer and by EUR 2.4
million in the third quarter.
Number of
shares 2008 2008 2008 2008 2007
7-9 4-6 1-3 1-9 7-9
Outstanding
shares, end of
period
Basic 71 661 523 71 661 523 71 661 523 71 661 523 71 661 523
Diluted 71 661 523 71 661 523 71 661 523 71 661 523 71 661 523
Outstanding
shares,
average
Basic 71 661 523 71 661 523 71 661 523 71 661 523 72 931 280
Diluted 71 661 523 71 661 523 71 661 523 71 661 523 72 931 280
Company's
possession of
its own
shares
End of
period 361 650 361 650 361 650 361 650 2 296 650
Average 361 650 361 650 531 760 418 146 1 063 229
Balance Sheet, EUR million 2008 2007 change 2007
30 Sep 30 Sep % 31 Dec
Goodwill 412.9 450.5 -8 415.7
Other intangible assets 59.3 89.0 -33 66.4
Property, plant and equipment 102.2 82.4 24 76.8
Deferred tax assets 66.3 66.6 0 66.4
Investments in associated
companies 0.0 1.6 -100 1.6
Other non-current assets 1.6 1.4 14 1.5
Total non-current assets 642.3 691.5 -7 628.4
Trade and other receivables 549.4 586.1 -6 560.2
Current income tax receivables 19.7 28.1 -30 9.9
Interest-bearing current assets 10.2 8.2 24 11.3
Cash and cash equivalents 58.2 57.7 1 72.9
Total current assets 637.5 680.1 -6 654.3
Total assets 1 279.8 1 371.6 -7 1 282.7
Share capital, share issue
premiums and other reserves 111.9 143.5 -22 115.4
Retained earnings 381.2 402.0 -5 358.2
Parent shareholders' equity 493.1 545.5 -10 473.6
Minority interest 1.4 3.4 -59 4.0
Total Equity 494.5 548.9 -10 477.6
Finance lease liability 14.7 5.2 183 1.4
Other interest-bearing loans 150.1 150.9 -1 150.5
Deferred tax liabilities 29.6 26.2 13 23.4
Pension obligations 22.4 39.9 -44 22.0
Provisions 27.5 5.2 429 35.9
Other non-current liabilities 1.7 3.3 -48 1.7
Total non-current liabilities 246.0 230.7 7 234.9
Trade and other payables 451.7 450.9 0 461.7
Current income tax liabilities 14.2 15.8 -10 11.6
Interest-bearing loans 73.4 125.3 -41 96.9
Total current liabilities 539.3 592.0 -9 570.2
Total equity and liabilities 1 279.8 1 371.6 -7 1 282.7
Net working capital in the balance sheet,
EUR million 2008 2007 change 2007
30 Sep 30 Sep % 31 Dec
Accounts receivable 317.2 336.2 -6 391.2
Other working capital receivables 231.5 248.6 -7 168.4
Working capital receivables included in
assets 548.7 584.8 -6 559.6
Operative accruals 217.5 209.2 4 225.4
Other working capital liabilities 225.1 233.3 -4 228.6
Pension obligations and provisions 50.0 45.2 11 57.9
Working capital liabilities included in
current liabilities 492.6 487.7 1 511.9
Net working capital in the balance sheet 56.1 97.1 -42 47.7
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 2008 2007 2008 2008 2008 2007 2007
7-9 7-9 4-6 1-3 1-9 1-9 1-12
Cash flow from operations
Net profit 23.7 11.0 18.7 16.3 58.7 40.1 -31.2
Adjustments
Depreciation,
amortization and
impairment 16.7 17.1 16.3 16.3 49.3 49.3 117.0
Share of associated
companies' result 0.0 -0.1 0.0 0.0 0.0 -0.1 -0.1
Share-based payments 1.3 0.8 1.1 0.8 3.2 2.1 2.3
Profit/loss on sale of
fixed assets and shares 0.0 -0.2 0.2 0.0 0.2 2.9 0.0
Other adjustments 0.0 0.0 -1.3 0.0 -1.3 0.0 1.3
Net financial expenses 3.5 2.9 5.8 2.9 12.2 6.0 9.9
Income taxes 6.6 6.8 5.1 5.4 17.1 19.0 22.6
Change in net working
capital -46.5 -11.2 19.5 21.7 -5.3 -47.9 8.4
Cash generated from
operations 5.3 27.1 65.4 63.4 134.1 71.4 130.2
Net financial expenses
paid -4.2 -2.5 -0.6 -0.2 -5.0 -3.2 -4.6
Income taxes paid -6.8 -4.7 -10.9 1.4 -16.3 -13.5 -9.9
Net cash flow from
operations -5.7 19.9 53.9 64.6 112.8 54.7 115.7
Cash flow from investing
activities
Acquisition of Group
companies and business
Operations, net of cash
acquired -3.8 0.2 5.2 -8.0 -6.6 -12.3 -28.3
Capital expenditures -21.7 -12.8 -17.0 -14.5 -53.2 -37.5 -48.6
Disposal of business
operations and associated
company 0.0 0.7 0.0 0.0 0.0 0.9 4.6
Other investing
activities 0.2 -15.4 1.2 0.1 1.5 -11.0 8.0
Net cash used in
investing activities from
operations -25.3 -27.3 -10.6 -22.4 -58.3 -59.9 -64.3
Cash flow from financing
activites
Dividends 0.0 0.0 -36.0 0.0 -36.0 -88.5 -88.5
Repurchase of own
shares - -30.0 - - - -30.0 -32.1
Payment of finance
lease liabilities -0.9 -2.9 -0.8 -0.9 -2.6 -8.6 -12.1
Change in
interest-bearing
liabilities -3.1 26.9 2.5 -27.5 -28.1 46.3 17.1
Change in loan
receivables -0.1 0.4 -2.2 0.0 -2.3 4.5 -1.2
Net cash used in other
financing activities -0.1 0.1 1.4 -1.4 -0.1 0.7 0.5
Net cash used in
financing activities from
operations -4.2 -5.5 -35.1 -29.8 -69.1 -75.6 -116.3
Change in cash and cash
equivalents -35.2 -12.9 8.2 12.4 -14.6 -80.8 -64.9
Cash and cash equivalents
at beginning of period -93.4 -70.9 -85.0 -72.9 -72.9 -138.9 -138.9
Foreign exchange
differences 0.0 0.3 -0.2 0.3 0.1 0.4 1.1
Cash and cash equivalents
at end of period 58.2 57.7 93.4 85.0 58.2 57.7 72.9
-35.2 -12.9 8.2 12.4 -14.6 -80.8 -64.9
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 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
recognized
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
Balance at 31
Dec 2007 75.8 39.6 -41.1 -12.5 411.8 4.0 477.6
Translation
difference -1.3 -16.0 13.3 -4.0
Translation
difference on
net
investment,
net of tax -3.2 0.8 -2.4
Minority
interest 0.3 -3.0 -2.7
Cancellation
of own shares 32.1 -32.1 0.0
Transfer
between
restricted
and
non-restricted
equity -2.2 2.2 0.0
Share based
payments
recognized
against equity 3.1 3.1
Dividend -35.8 -35.8
Net profit for
the period 58.3 0.4 58.7
At 30
September 2008 75.8 36.1 -9.0 -31.7 421.9 1.4 494.5
Net sales by business area, EUR million (primary segment)
2008 2007 Change 2008 2007 Change 2007
7-9 7-9 % 1-9 1-9 % 1-12
Banking & Insurance 65 62 4 217 211 3 293
Telecom & Media 152 153 -1 503 476 6 664
Government, Manufacturing &
Retail 43 40 7 144 138 5 184
Healthcare & Welfare 37 31 21 116 99 17 141
Forest & Energy 42 42 0 133 132 1 177
Processing & Network 112 100 12 339 294 15 409
Group elimination incl.
other -25 -23 7 -77 -68 13 -96
Group total 425 405 5 1 374 1 281 7 1 772
Country sales, EUR million (secondary segment)
2008 Change Share 2007 Share 2007 Change
1-9 % % 1-9 % 1-12 %
Finland 624 8 45 578 45 802 7
Sweden 375 5 27 356 28 495 9
Germany 107 -5 8 113 9 152 23
Norway 67 10 5 61 5 88 8
Great Britain 39 -7 3 42 3 55 15
Denmark 36 67 3 22 2 26 -49
Italy 25 18 2 21 2 31 84
France 20 16 1 17 1 24 32
Netherlands 19 31 1 15 1 23 -7
Other 62 10 4 56 4 78 1
Group total 1 374 7 100 1 281 100 1 772 8
Net sales by industry
segment, EUR million
2008 Change Share 2007 Share 2007 Change
1-9 % % 1-9 % 1-12 %
Banking and insurance 298 5 22 282 22 390 4
Public 212 6 15 200 16 273 -7
Telecom and media 486 5 35 464 36 650 26
Forest 66 4 5 64 5 84 -4
Energy 82 16 6 70 5 100 27
Manufacturing 75 5 5 71 6 99 11
Retail & Logistics 91 50 7 61 5 89 1
Other 63 -7 5 68 5 87 -29
Group total 1 374 7 100 1 281 100 1 772 8
Operating profit
(EBIT), EUR million
2008 2007 Change 2008 2007 Change 2007
7-9 7-9 % 1-9 1-9 % 1-12
Banking & Insurance 5.3 -3.3 Pos. 19.6 -5.3 Pos. -53.3
Telecom & Media 13.4 12.6 6.5 34.4 39.9 -13.8 53.2
Government,
Manufacturing & Retail 4.3 0.8 458.4 11.6 7.5 54.1 -6.1
Healthcare & Welfare 2.5 -0.6 Pos. 4.3 0.1 3 538.0 -5.2
Forest & Energy 3.5 3.3 4.0 9.5 10.2 -7.0 8.5
Processing & Network 15.2 12.4 22.3 38.0 26.8 41.6 32.8
Business areas 44.2 25.3 74.6 117.4 79.3 48.0 29.9
Group operations incl.
other -10.3 -4.7 -121.9 -29.4 -14.3 -105.7 - 31.5
Group capital gain 0.0 0.0 -11.4 0.0 0.1 -92.6 2.9
Operating profit (EBIT) 33.9 20.7 63.9 88.0 65.1 35.2 1.3
Operating profit, EUR million excl. capital gains/losses, impairment
losses,
badwill and Performance Improvement Programme related costs
2008 2007 Change 2008 2007 Change 2007
7-9 7-9 % 1-9 1-9 % 1-12
Banking & Insurance 5.7 -3.3 Pos. 20.3 -1.5 Pos. 1.7
Telecom & Media 14.1 12.7 11.3 42.2 40.1 5.5 58.9
Government, Manufacturing& Retail 4.4 0.7 550.0 14.3 8.4 71.5 11.2
Healthcare & Welfare 2.7 -0.6 Pos. 5.0 -1.4 Pos. 3.2
Forest & Energy 3.6 3.3 8.2 9.3 10.2 -8.8 13.2
Processing & Network 15.0 12.6 18.7 40.6 27.0 50.4 38.8
Business areas 45.5 25.5 78.2 131.8 82.8 59.2 126.9
Group operations incl.
other -8.8 -4.7 -88.9 -24.2 -14.3 -69.9 - 19.3
Operating profit (EBIT),
excl. capital
gains/losses, impairment
losses,
badwill and Performance
Improvement
Programme related costs 36.7 20.9 75.8 107.5 68.5 57.0 107.6
Operating margin (EBIT), %
2008 2007 Change 2008 2007 Change 2007
7-9 7-9 1-9 1-9 1-12
Banking & Insurance 8.2 -5.2 13.4 9.0 -2.5 11.5 -18.2
Telecom & Media 8.9 8.2 0.6 6.8 8.4 -1.6 8.0
Government, Manufacturing &
Retail 10.0 1.9 8.1 8.0 5.4 2.6 -3.3
Healthcare & Welfare 6.7 -1.8 8.5 3.8 0.1 3.6 -3.7
Forest & Energy 8.3 8.0 0.3 7.2 7.7 -0.6 4.8
Processing & Network 13.6 12.5 1.1 11.2 9.1 2.1 8.0
Business areas 10.4 6.3 4.1 8.5 6.2 2.4 1.7
Operating margin (EBIT) 8.0 5.1 2.9 6.4 5.1 1.3 0.1
Operating margin (EBIT), % excl. capital gains/losses, impairment
losses, badwill
and Performance Improvement Programme related costs
2008 2007 Change 2008 2007 Change 2007
7-9 7-9 1-9 1-9 1-12
Banking & Insurance 8.8 -5.2 14.0 9.4 -0.7 10.1 0.6
Telecom & Media 9.3 8.3 1.0 8.4 8.4 0.0 8.9
Government, Manufacturing &
Retail 10.2 1.7 8.5 9.9 6.1 3.9 6.1
Healthcare & Welfare 7.1 -1.8 8.9 4.3 -1.4 5.7 2.3
Forest & Energy 8.6 8.0 0.7 7.0 7.7 -0.7 7.4
Processing & Network 13.4 12.7 0.7 12.0 9.2 2.8 9.5
Business areas 10.7 6.3 4.4 9.6 6.5 3.1 7.2
Operating margin (EBIT), excl.
capital
gains/losses, impairment
losses,
badwill and Performance
Improvement
Programme related costs 8.6 5.2 3.5 7.8 5.3 2.5 6.1
Personnel by business area
(primary segment)
End of period Average
2008 Change Share 2007 2007 2008 2007
1-9 % % 1-9 1-12 1-9 1-9
Banking & Insurance 2 071 - 7 13 2 234 2 180 2 123 2 237
Telecom & Media 5 824 3 36 5 651 5 990 5 905 5 425
Government,
Manufacturing &
Retail 1 444 - 8 9 1 572 1 542 1 487 1 586
Healthcare & Welfare 1 126 1 7 1 112 1 114 1 113 1 090
Forest & Energy 1 222 - 4 7 1 273 1 274 1 254 1 273
Processing & Network 2 176 3 13 2 104 2 124 2 145 2 073
Software Centres 1 910 44 12 1 326 1 548 1 746 1 119
Other Group
Operations 620 13 4 551 553 583 557
Group total 16 392 4 100 15 823 16 324 16 355 15 359
From Jan 2008, 12 persons were moved from Government, Manufacturing &
Retail to Forest & Energy. Figures for 2007 have been restated. The
change had minor effect on Net sales and EBIT 2007 in the business
areas.
Personnel by country
(secondary segment)
End of period Average
2008 Change Share 2007 2007 2008 2007
1-9 % % 1-9 1-12 1-9 1-9
Finland 6 048 - 6 37 6 409 6 357 6 175 6 263
Sweden 3 298 - 2 20 3 358 3 381 3 330 3 341
Czech 1 417 33 9 1 069 1 186 1 318 909
Germany 1 178 - 12 7 1 346 1 325 1 252 1 351
India 656 142 4 271 594 622 266
Norway 655 - 11 4 738 720 674 749
Latvia 621 11 4 558 551 584 550
Poland 517 42 3 364 393 475 307
Great Britain 350 9 2 321 327 343 319
Denmark 293 - 10 2 326 344 314 311
Italy 255 10 2 233 233 246 223
China 239 125 1 106 124 184 83
Lithuania 173 42 1 122 125 148 104
Netherlands 135 18 1 115 137 134 103
France 133 6 1 125 129 130 121
Estonia 125 6 1 118 119 121 112
Other 301 22 2 246 280 304 246
Group total 16 392 4 100 15 823 16 324 16 355 15 359
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 16 662 (16 215) at the end of the
period.
Total assets by business area, EUR million (primary
segment)
2008 2007 Change 2007
30 Sep 30 Sep % 31 Dec
Banking & Insurance 219.0 260.4 -16 215.8
Telecom & Media 452.3 458.1 -1 474.9
Government, Manufacturing &
Retail 55.4 61.2 -9 51.2
Healthcare & Welfare 80.4 86.2 -7 96.0
Forest & Energy 110.0 117.4 -6 116.8
Processing & Network 212.0 176.7 20 178.1
Group elimination -19.3 -23.7 -18 -21.9
Business areas 1 109.8 1 136.3 -2 1 110.9
Group Operations 170.0 235.2 -28 171.8
Total assets 1 279.8 1 371.6 -7 1 282.7
Total liabilities by business area, EUR million (primary
segment)
2008 2007 Change 2007
30 Sep 30 Sep % 31 Dec
Banking & Insurance 144.0 113.5 27 127.6
Telecom & Media 171.1 189.5 -10 187.5
Government, Manufacturing & Retail 37.8 37.3 1 49.4
Healthcare & Welfare 36.1 36.5 -1 44.3
Forest & Energy 74.3 72.2 3 72.1
Processing & Network 69.6 68.7 1 64.4
Group elimination - 14.8 -21.3 -31 -17.3
Business areas 518.1 496.4 4 528.1
Group Operations 267.3 326.3 -18 277.0
Total liabilities 785.3 822.7 -5 805.1
Segment assets by country, EUR million (secondary segment)
2008 2007 Change 2007
30 Sep 30 Sep % 31 Dec
Finland 387.0 338.2 14 348.4
Sweden 289.1 323.2 -11 333.8
Norway 77.8 96.6 -20 94.7
Germany 172.3 174.5 -1 160.9
Great Britain 41.2 90.1 -54 45.7
Other 142.6 113.7 25 127.5
Business areas 1 109.8 1 136.3 -2 1 110.9
Depreciation, EUR
million
2008 2007 Changes 2008 2007 Changes 2007
7-9 7-9 % 1-9 1-9 % 1-12
Processing & Network 10.5 9.4 12 30.9 27.4 12 40.0
whereof Finland 8.7 8.0 8 25.4 23.1 10 34.1
Sweden 1.7 1.3 29 4.9 3.8 29 4.9
Other countries 0.2 0.2 39 0.6 0.6 10 0.9
Other 3.5 5.3 -34 10.8 14.6 -25 27.2
Group total 14.0 14.7 -5 41.7 42.0 -1 67.2
Amortization on allocated intangible assets from acquisitions, EUR
million
2008 2007 Changes 2008 2007 Changes 2007
7-9 7-9 % 1-9 1-9 % 1-12
Telecom & Media 1.5 1.3 15 4.4 3.8 16 5.3
Other 1.3 1.1 10 3.2 3.5 -9 4.5
Group total 2.7 2.4 13 7.6 7.3 4 9.8
Impairment losses, EUR million
2008 2007 Change 2008 2007 Change 2007
7-9 7-9 % 1-9 1-9 % 1-12
Banking & Insurance 0.0 0.0 - 0.0 0.0 - 40.0
Group total 0.0 0.0 - 0.0 0.0 - 40.0
Capital expenditure by business area, EUR million
2008 2007 Change 2008 2007 Change 2007
7-9 7-9 % 1-9 1-9 % 1-12
Processing & Network 19.1 9.3 104 56.2 26.0 116 36.1
whereof Finland 17.6 7.4 138 48.0 21.5 123 29.7
Sweden 1.5 1.9 -21 8.2 4.5 82 6.4
Other countries 0.0 0.0 - 0.0 0.0 - 0.0
Other 4.1 3.5 17 14.2 11.5 23 16.8
Group total 23.2 12.8 81 70.4 37.5 88 52.9
2008 2007
Commitments and contingencies, EUR million 30 Sep 31 Dec change %
For TietoEnator obligations
Pledges - -
On behalf of joint ventures
Guarantees 1.8 1.8 0
Other TietoEnator obligations
Rent commitments due in one year 54.9 56.0 -2
Rent commitments due in 1-5 years 109.9 129.4 -15
Rent commitments due after 5 years 20.9 25.6 -19
Operating lease commitments due in one year 13.9 9.3 50
Operating lease commitments due in 1-5 years 14.2 15.0 -5
Operating lease commitments due after 5
years 0.0 0.0
Other commitments *) 15.6 53.7 -71
Operating lease commitments are principally three-year lease
agreements that do not include buyout clauses.
*) Including in 2007 commitment mainly for purchase of hardware and
software. In 2008 the commitment is presented in finance lease
liabilities and operating lease
commitments.
Notional amounts of derivative financial 2008 2007
instruments, EUR million 30 Sep 31 Dec
Foreign exchange contracts 156.8 249.1
Interest rate swaps 100.0 100.0
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 2008 2007
balance sheet date were: 30 Sep 31 Dec
Foreign exchange contracts 1.2 2.8
Interest rate swaps -2.4 -2.0
Derivatives are used for hedging purposes only.
On-going legal disputes
TietoEnator has an ongoing VAT disupute with the Finnish tax
authorities concerning a sum of EUR 5.3 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 additonal loss EUR 41.0
million (of which a deferred tax asset EUR 10.7 million could be
recognized) on the loss incurred by the parent company in connection
with the intra-group transaction carried out in April 2004, but the
decision has been contested.
Major shareholders 30 September 2008
Shares %
1 Pohjola Asset Management Ltd. 3 386 482 4.7%
2 Didner & Gerge Aktiefond 2 405 000 3.3%
3 OP-Keskus Osk. 2 160 000 3.0%
4 Swedbank Robur fonder 1 904 136 2.6%
5 Svenska Litteratursällskapet i Finland 1 504 000 2.1%
6 The State Pension Fund 1 401 000 1.9%
7 Varma Mutual Pension Insurance Co. 1 349 749 1.9%
8 Ilmarinen Mutual Pension Insurance Co. 905 751 1.3%
9 Tapiola Pension 710 000 1.0%
10 OP funds 664 484 0.9%
Nominee registered 50 722 926 70.4%
Others 4 909 645 6.8%
Total 72 023 173 100.0%
Based on ownership records of the Finnish and Swedish central
security depositories.
In August, JPMorgan Chase & Co. announced that its holding in
TietoEnator Corporation was
3 670 254 shares, which represents 5.10% of the shares and voting
rights.
TIETOENATOR CORPORATION
For further information:
Hannu Syrjälä, President and CEO, tel. +358 2072 68729,
hannu.syrjala@tietoenator.com
Åke Plyhm, Deputy CEO, tel. +46 10 481 3321, +46 705 65 86 31,
ake.plyhm@tietoenator.com
Reeta Kaukiainen, EVP, Communications and Investor Relations, tel.
+358 2072 68711,
+358 50 522 0924, reeta.kaukiainen@tietoenator.com
Press conference for analysts and media will be held in Stockholm,
Scandic Anglais Hotel, Humlegårdsgatan 23, cabinet Birk, at 9.00 am
CET (10.00 am EET, 8.00 am UK time). The results will be presented in
English by Hannu Syrjälä, President and CEO. Notification of
attendance to sirpa.salo@tietoenator.com, tel. +358 2072 68714.
The conference will be webcast and published live on TietoEnator's
website www.tietoenator.com 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 the management starting at 2.15 pm CET,
(3.15 pm EET, 1.15 pm UK time) will also be available as live audio
webcast on www.tietoenator.com. 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 are 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 4 November 2008 in the following numbers: US callers:
+1 866 583 1035, non-US callers: +44 20 8196 1998, access code:
141833#.
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 a professional service company providing IT, R&D and
consulting services. With approximately 16 000 experts, we are among
the leading IT service companies in Northern Europe and the global
leader in selected segments. We specialize in areas where we have the
deepest understanding of our customers' businesses and needs. Our
superior customer centricity and Nordic expertise set us apart from
our competitors.
www.tietoenator.com
DISTRIBUTION
Helsinki Stock Exchange
Stockholmsbörsen
Principal Media
TietoEnator Corporation
Business ID: 0101138-5
Aku Korhosentie 2-6
PO Box 38
FI-00441 HELSINKI, FINLAND
Tel +358 2072010
Fax +358 207268898
Registered office: Espoo
Kronborgsgränd 1
SE-164 87 KISTA, SWEDEN
Tel +46 8 632 1400
Fax +46 8 632 1420
mail: info@tietoenator.com
www.tietoenator.com
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