2014-07-18 07:00:00 CEST
2014-07-18 07:00:04 CEST
REGULATED INFORMATION
Tieto Oyj - Interim report (Q1 and Q3)
Interim Report 2/2014 – Positive development in IT services continues
Tieto Corporation INTERIM REPORT 18 July 2014, 8.00 am EET
-- IT services organic growth in local currencies close to 3%
-- Profitability continued to improve despite costs related to exceptional
project termination
-- Customer insourcing results in lower volumes in Product Development
Services
The full interim report with tables is available at the end of this release
Key figures
-- Net sales in local currencies were organically down by 1.3%
-- In IT services, organic growth in local currencies was 2.6%
-- Second-quarter operating profit excl. one-off items amounted to EUR 30.0
(30.6) million, margin increased to 7.8% (7.3)
4-6/ 4-6/ 1-6/ 1-6/
2014 20132) 2014 20132)
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Net sales, EUR million 386.4 416.7 773.4 840.6
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Change, % -7.3 n/a -8.0 n/a
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Organic change in local currencies, % -1.3 n/a -1.3 n/a
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Operating profit (EBITA), EUR million 21.7 15.6 56.1 45.9
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Operating margin (EBITA), % 5.6 3.7 7.3 5.5
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Operating profit (EBIT), EUR million 21.5 14.8 55.5 44.1
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Operating margin (EBIT), % 5.6 3.5 7.2 5.2
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Operating profit (EBIT) excl. one-off items1), 30.0 30.6 64.5 61.7
EUR million
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Operating margin (EBIT) excl. one-off items1), % 7.8 7.3 8.3 7.3
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Profit after taxes, EUR million 16.5 7.4 41.1 28.8
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EPS, EUR 0.23 0.10 0.56 0.40
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Net cash flow from operations, EUR million 16.6 10.7 66.6 60.7
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Return on equity, 12-month rolling, % 15.3 6.6 15.3 6.6
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Return on capital employed, 12-month rolling, % 14.8 10.3 14.8 10.3
3)
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Investments, EUR million 7.1 15.3 20.5 32.6
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Interest-bearing net debt, EUR million 30.3 81.1 30.3 81.1
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Net debt/EBITDA 0.2 0.4 0.2 0.4
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Book-to-bill 1.0 1.4 1.1 1.1
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Order backlog 1 550 1 469 1 550 1 469
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Personnel on 30 June 14 126 14 933 14 126 14 933
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1) Excl. capital gains, impairments and restructuring costs
2) Figures restated according to IFRS 11 ‘Joint arrangements'
3) The figure for 2013 has been restated
Full-year outlook for 2014 unchanged
Tieto expects its full-year operating profit (EBIT) excluding one-off items to
increase from the previous year's level (EUR 141.2 million in 2013).
CEO's comment
Comment regarding the interim report by Kimmo Alkio, President and CEO:
“Our second quarter demonstrated continued good performance in our IT services
business as a result of longer-term improvement in businesses across the
company. The market remains attractive, providing a combination of
opportunities for new growth investments and for modernization of old IT
systems. Our position as the leader in Nordic Enterprise Cloud services has
further strengthened in the second quarter, as proven by our accelerated growth
in this business. I'm also glad to see continued improvement in customer
confidence towards Tieto - demonstrated by multiple wins for new contracts
across the financial services, public and manufacturing sectors.
We continue to take actions in our Product Development Services business where
volumes are negatively impacted by customer insourcing and the market
environment is changing. We will drive renewal of competencies and swiftly
manage capacity to improve the business' competitiveness and profitability.
Tieto has experienced an extended period of strategy and culture renewal and I
want to express my gratitude to our employees for achieving the improved level
of competitiveness and performance. I expect the speed of change in the market
to remain high and continue to provide attractive new opportunities for Tieto.”
Financial performance by service line
EUR million Custome Custome Change, Operatin Operatin
r r % g g
sales sales profit profit
4-6/201 4-6/201 4-6/2014 4-6/2013
4 3
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Managed Services 132 125 5 7.6 5.4
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Consulting and System Integration 97 108 -10 6.1 2.8
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Industry Products 97 105 -7 15.0 15.4
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Product Development Services 60 79 -24 -2.3 -2.6
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Support Functions and Global -4.8 -6.1
Management
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Total 386 417 -7 21.5 14.8
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Operating margin by service line
% Operatin Operatin Operating Operating
g g margin excl. margin excl.
margin margin one-off one-off
4-6/2014 4-6/2013 items1) items1)
4-6/2014 4-6/2013
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Managed Services 5.8 4.3 5.8 4.6
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Consulting and System 6.3 2.6 7.4 8.9
Integration
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Industry Products 15.3 14.7 15.6 15.8
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Product Development Services -3.8 -3.4 6.1 2.6
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Total 5.6 3.5 7.8 7.3
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1) Excl. capital gains, impairments and
restructuring costs
Organic change in local currency by service line
EUR million Customer Customer Change,
sales adj. for sales adj. for %
acquisitions and divestments
currency 4-6/2013
4-6/2014
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Managed Services 136 125 9
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Consulting and System 97 101 -4
Integration
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Industry Products 102 100 2
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IT services 335 327 3
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Product Development 57 71 -19
Services
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Total 393 398 -1
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The following divestments affected second-quarter sales: local businesses in
Germany and the Netherlands and the security solutions business in Denmark.
Additionally, the acquisitions of Canvisa Consulting and part of Siemens
Convergence Creators' business are eliminated.
Customer sales by industry group
EUR million Customer sales Customer sales Change, %
4-6/2014 4-6/2013
------------------------------------------------------------------------------
Financial Services 84 84 0
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Manufacturing, Retail and Logistics 78 78 0
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Public, Healthcare and Welfare 104 102 3
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Telecom, Media and Energy 60 74 -19
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Product Development Services 60 79 -24
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Total 386 417 -7
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Organic change in local currency by industry group
EUR million Customer Customer Change,
sales adj. for sales adj. for %
acquisitions and currency divestments
4-6/2014 4-6/2013
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Financial Services 86 83 3
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Manufacturing, Retail 79 76 3
and Logistics
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Public, Healthcare and 108 97 11
Welfare
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Telecom, Media and 63 70 -10
Energy
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IT services 335 327 3
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Product Development 57 71 -19
Services
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Total 393 398 -1
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For further information, please contact:
Lasse Heinonen, CFO, tel. +358 2072 66329, +358 50 393 4950, lasse.heinonen
(at) tieto.com
Tanja Lounevirta, Head of Investor Relations, tel +358 2072 71725, +358 50 321
7510, tanja.lounevirta (at) tieto.com
Press conference for analysts and media will be held at Tieto's premises in
Helsinki, address: Aku Korhosen tie 2-6, on 18 July 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. As
from the second-quarter conference, Tieto provides only Adobe Flash -based
webcast. To join the conference, attendees need Adobe Flash plugin version
10.1.0 or newer. In order to ensure access, attendees are requested to test
compatibility beforehand. In case problems exist, please contact
tieto@reloadmedia.fi.
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 6539
UK: +44 (0)20 3427 0503
US: +1212 444 0895
Conference code: 7353033
To ensure that you are connected to the conference call, please dial in a few
minutes before the start of the press and analyst conference. An on-demand
video will be available after the conference.
Tieto publishes financial information in English, Finnish and Swedish. 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 14 000
experts, the company operates in over 20 countries with net sales of
approximately EUR 1.6 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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