2014-03-03 08:00:02 CET
2014-03-03 08:00:08 CET
REGULATED INFORMATION
Tieto Oyj - Company Announcement
Tieto's comparison figures for 2013 based on IFRS 11
Tieto Corporation STOCK EXCHANGE RELEASE 3 March 2014, 9.00 am EET
Tieto will adopt the new IFRS 11, ‘Joint arrangements' as of 1 January 2014.
Proportional consolidation of joint ventures is no longer allowed and the
results will be reported as one line above operating profit (EBIT). The first
interim report for 2014 to be published on 25 April will be prepared in
accordance with the new standard.
Equity accounting will decrease the Group's annual net sales by around 4%. The
change mainly affects the Industry Products (around 12% negative) and Managed
Services (around 2% negative) service lines. Of industry groups, the change
mainly affects Financial Services (around 10% negative) and Public Healthcare
and Welfare (around 7% negative). EBIT is affected by the amount corresponding
to Tieto's share of joint ventures' financial items and taxes, and there might
be a slightly positive impact, if any, on EBIT margin. The company's net profit
for the period is not affected.
Tieto's financial reporting for 2013 has been adjusted to account for the
changes. The tables below are also available in Excel format at
www.tieto.com/Investors.
Changed key figures
2013 2013 2013 2013 2013 1-3 4-6 7-9 10-12 1-12
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Return on 11.5 13.6 12.1 16.8 16.8
capital
employed,
12-month
rolling, % *)
--------------------------------------------------------------------------------
Equity ratio, 43.2 44.0 46.7 49.3 49.3
%
--------------------------------------------------------------------------------
Interest-beari 18.3 81.1 52.6 15.5 15.5
ng net debt,
EUR million
--------------------------------------------------------------------------------
Gearing, % 3.7 16.8 10.2 3.0 3.0
--------------------------------------------------------------------------------
*) When calculating Return on capital employed for the year 2013, the balance
sheet items concerning year 2012 in the 12-month average denominator are not
restated according to the IFRS 11 Joint arrangements.
Income statement, EUR million
2013 2013 2013 2013 2013
1-3 4-6 7-9 10-12 1-12
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--------------------------------------------------------------------------------
Net sales 423.9 416.7 361.1 405.1 1 606.8
--------------------------------------------------------------------------------
Other operating income 4.0 3.1 4.5 6.5 18.1
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Employee benefit expenses 248.5 244.7 199.8 230.7 923.7
--------------------------------------------------------------------------------
Depreciation, amortization and impairment 21.2 28.6 19.3 20.6 89.7
charges
--------------------------------------------------------------------------------
Other operating expenses 131.4 133.8 123.5 144.4 533.1
--------------------------------------------------------------------------------
Share of profit from investments accounted 2.5 2.1 1.3 1.4 7.3
for using the equity method
--------------------------------------------------------------------------------
Operating profit (EBIT) 29.3 14.8 24.3 17.3 85.7
--------------------------------------------------------------------------------
Financial income and expenses -1.5 -1.8 -1.7 -1.6 -6.6
--------------------------------------------------------------------------------
Profit before taxes 27.8 13.0 22.6 15.7 79.1
--------------------------------------------------------------------------------
Income taxes -6.4 -5.6 -4.2 -0.7 -16.9
--------------------------------------------------------------------------------
Net profit for the period 21.4 7.4 18.4 15.0 62.2
--------------------------------------------------------------------------------
Balance sheet, EUR million
2013 2013 2013 2013
31 Mar 30 Jun 30 Sep 31 Dec
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Goodwill 383.9 374.8 376.7 372.3
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Other intangible assets 51.1 45.9 40.3 44.1
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Property, plant and equipment 100.3 98.1 96.4 94.6
--------------------------------------------------------------------------------
Investments accounted for using the equity 18.1 20.2 20.2 21.5
method
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Other non-current assets 36.6 38.1 34.6 31.5
--------------------------------------------------------------------------------
Total non-current assets 590.0 577.1 568.2 564.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Trade receivables and other current assets 482.6 463.1 439.8 416.5
--------------------------------------------------------------------------------
Cash and cash equivalents 93.1 126.4 150.6 114.1
--------------------------------------------------------------------------------
Total current assets 575.7 589.5 590.4 530.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Assets classified as held for sale 47.3 - 2.0 -
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total assets 1 213.0 1 166.6 1 160.6 1 094.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity 488.7 483.9 513.5 514.2
--------------------------------------------------------------------------------
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Non-current loans 3.8 102.1 101.0 103.1
--------------------------------------------------------------------------------
Other non-current liabilities 61.2 58.0 58.5 56.8
--------------------------------------------------------------------------------
Total non-current liabilities 65.0 160.1 159.5 159.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Trade payables and other current liabilities 468.6 379.8 343.9 341.8
--------------------------------------------------------------------------------
Provisions 26.6 28.3 32.5 44.2
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Current loans 118.5 114.5 111.0 34.5
--------------------------------------------------------------------------------
Total current liabilities 613.7 522.6 487.4 420.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liabilities classified as held for sale 45.6 - 0.2 -
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--------------------------------------------------------------------------------
Total equity and liabilities 1 213.0 1 166.6 1 160.6 1 094.6
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Cash flow, EUR million
2013 2013 2013 2013 2013
1-3 4-6 7-9 10-12 1-12
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--------------------------------------------------------------------------------
Cash flow from operations
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Net profit 21.4 7.4 18.4 15.0 62.2
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Adjustments
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Depreciation, amortization and 21.2 28.6 19.3 20.6 89.7
impairment charges
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Share-based payments 0.4 0.1 0.1 0.2 0.8
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Profit/loss on sale of fixed assets and 0.1 0.0 -1.3 -0.2 -1.4
shares
--------------------------------------------------------------------------------
Share of profit from investments -2.5 -2.1 -1.3 -1.4 -7.3
accounted for using the equity method
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Other adjustments 1.2 -4.9 -0.3 -5.2 -9.2
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Net financial expenses 1.5 1.8 1.7 1.6 6.6
--------------------------------------------------------------------------------
Income taxes 6.4 5.6 4.2 0.7 16.9
--------------------------------------------------------------------------------
Change in net working capital -0.2 -19.6 7.6 36.2 24.0
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Cash generated from operations 49.5 16.9 48.4 67.5 182.3
--------------------------------------------------------------------------------
Net financial expenses paid -3.0 -1.9 -1.1 -6.1 -12.1
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Dividends received from investments 7.6 - - - 7.6
accounted for using the equity method
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Income taxes paid -4.1 -4.3 -6.5 -3.9 -18.8
--------------------------------------------------------------------------------
Net cash flow from operations 50.0 10.7 40.8 57.5 159.0
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--------------------------------------------------------------------------------
Cash flow from investing activities
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Acquisition of Group companies and -0,0 - -1.7 - -1.7
business operations,
net of cash acquired
--------------------------------------------------------------------------------
Capital expenditures -13.3 -15.7 -11.7 -17.8 -58.5
--------------------------------------------------------------------------------
Disposal of Group companies and business -0,0 -19.5 0.5 1.7 -17.3
operations,
net of cash disposed
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Sales of fixed assets 0.0 0.0 0.3 0.9 1.2
--------------------------------------------------------------------------------
Change in loan receivables -0.4 1.4 0.3 0.8 2.1
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Net cash used in investing activities -13.7 -33.8 -12.3 -14.4 -74.2
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Cash flow from financing activities
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Dividends paid - -59.7 - - -59.7
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Exercise of stock options 1.2 5.7 0.0 0.2 7.1
--------------------------------------------------------------------------------
Payments of finance lease liabilities -2.8 -0.6 -1.1 -0.9 -5.4
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Change in interest-bearing liabilities -5.7 95.1 -3.5 -79.9 6.0
--------------------------------------------------------------------------------
Net cash used in financing activities -7.3 40.5 -4.6 -80.6 -52.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in cash and cash equivalents 29.0 17.4 23.9 -37.5 32.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of 75.8 93.1 126.4 150.6 75.8
period
--------------------------------------------------------------------------------
Foreign exchange differences 2.0 2.2 0.3 1.0 5.5
--------------------------------------------------------------------------------
Assets classified as held for sale -13.7 13.7 - - -
--------------------------------------------------------------------------------
Change in cash and cash equivalents 29.0 17.4 23.9 -37.5 32.8
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of 93.1 126.4 150.6 114.1 114.1
period
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Segment information
Customer sales by service line, EUR million
2013 2013 2013 2013 2013
1-3 4-6 7-9 10-12 1-12
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Managed Services 120 125 117 129 492
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Consulting and System Integration 108 108 92 102 410
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Industry Products 109 105 91 111 416
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Product Development Services 86 79 60 63 289
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Group total 424 417 361 405 1 607
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No internal sales occur between service lines as in the management accounting,
revenue and costs are booked directly to the respective customer projects in
the service lines.
Customer sales by country, EUR million
2013 2013 2013 2013 2013
1-3 4-6 7-9 10-12 1-12
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Finland 190 184 168 188 729
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Sweden 143 141 126 146 555
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Other 91 92 67 71 322
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Group total 424 417 361 405 1 607
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Customer sales by industry group, EUR million
2013 2013 2013 2013 2013
1-3 4-6 7-9 10-12 1-12
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Financial Services 80 84 77 89 331
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Manufacturing, Retail and Logistics 76 78 70 81 305
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Public, Healthcare and Welfare 107 102 90 105 403
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Telecom, Media and Energy 74 74 63 68 279
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Product Development Services 86 79 60 63 289
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Group total 424 417 361 405 1 607
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Operating profit (EBIT) by service line, EUR million
2013 2013 2013 2013 2013
1-3 4-6 7-9 10-12 1-12
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Managed Services 0.7 5.4 3.7 0.4 10.2
--------------------------------------------------------------------------------
Consulting and System Integration 3.8 2.8 4.0 -1.6 9.0
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Industry Products 17.6 15.4 19.9 28.3 81.2
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Product Development Services 9.3 -2.6 3.0 -1.3 8.4
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Support Functions and Global Management -2.1 -6.1 -6.3 -8.5 -23.0
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Operating profit (EBIT) 29.3 14.8 24.3 17.3 85.7
--------------------------------------------------------------------------------
Operating margin (EBIT) by service line, %
2013 2013 2013 2013 2013
1-3 4-6 7-9 10-12 1-12
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--------------------------------------------------------------------------------
Managed Services 0.6 4.3 3.2 0.3 2.1
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Consulting and System Integration 3.5 2.6 4.3 -1.6 2.2
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Industry Products 16.1 14.7 21.9 25.5 19.5
--------------------------------------------------------------------------------
Product Development Services 10.8 -3.4 5.0 -2.0 2.9
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Operating margin (EBIT) 6.9 3.5 6.7 4.3 5.3
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The new operating model taken into use 2013 is steered based on project
performance and direct costs are linked to the deliveries in the service lines.
The calculation of operating margin percentages is based on only customer sales
by service lines as the internal invoicing between the legal entities based on
transfer pricing requirements is reported within Support Functions and Global
Management.
Operating profit (EBIT) excl. one-off items by service line, EUR million
2013 2013 2013 2013 2013
1-3 4-6 7-9 10-12 1-12
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Managed Services 0.3 5.7 6.0 9.0 21.0
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Consulting and System Integration 5.1 9.6 9.6 7.7 32.0
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Industry Products 17.6 16.6 20.1 28.5 82.8
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Product Development Services 10.0 2.0 4.8 2.7 19.4
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Support Functions and Global Management -2.0 -3.3 -3.0 -5.8 -14.2
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Operating profit (EBIT) 31.0 30.6 37.5 42.0 141.2
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Operating margin (EBIT) excl. one-off items by service line, %
2013 2013 2013 2013 2013
1-3 4-6 7-9 10-12 1-12
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Managed Services 0.3 4.6 5.1 6.9 4.3
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Consulting and System Integration 4.7 8.9 10.4 7.6 7.8
------------------------------------------------------------------------
Industry Products 16.1 15.8 22.1 25.7 19.9
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Product Development Services 11.6 2.6 7.9 4.2 6.7
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Operating margin (EBIT) 7.3 7.3 10.4 10.4 8.8
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Personnel by service line, end of period
2013 2013 2013 2013
1-3 4-6 7-9 10-12
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Managed Services 3 088 3 138 3 147 3 090
-----------------------------------------------------------------------
Consulting and System Integration 4 289 4 136 4 152 3 986
-----------------------------------------------------------------------
Industry Products 3 108 2 923 2 928 2 919
-----------------------------------------------------------------------
Product Development Services 4 113 3 543 3 360 3 193
-----------------------------------------------------------------------
Service Lines total 14 598 13 739 13 588 13 188
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Industry Groups 430 415 408 390
-----------------------------------------------------------------------
Support Functions and Global Management 817 778 782 740
-----------------------------------------------------------------------
Group total 15 845 14 933 14 778 14 318
-----------------------------------------------------------------------
Personnel by service line, average
2013 2013 2013 2013
1-3 4-6 7-9 10-12
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Managed Services 3 094 3 104 3 115 3 112
-----------------------------------------------------------------------
Consulting and System Integration 4 297 4 280 4 238 4 192
-----------------------------------------------------------------------
Industry Products 3 089 3 076 3 022 2 996
-----------------------------------------------------------------------
Product Development Services 4 200 4 034 3 827 3 673
-----------------------------------------------------------------------
Service Lines total 14 680 14 494 14 201 13 973
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Industry Groups 440 432 426 418
-----------------------------------------------------------------------
Support Functions and Global Management 792 795 789 780
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Group total 15 911 15 720 15 416 15 170
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Non-current assets by country, EUR million
2013 2013 2013 2013
31 Mar 30 Jun 30 Sep 31 Dec
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Finland 104.5 101.1 96.9 101.5
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Sweden 35.0 31.9 29.7 28.0
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Other 11.9 11.0 10.0 9.2
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Total countries 151.4 144.0 136.7 138.7
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Non-current assets classified as held for sale 47.3 0.0 2.0 0.0
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Total non-current assets 198.7 144.0 138.7 138.7
--------------------------------------------------------------------------------
Goodwill is allocated to the Cash Generating Units, which include several
countries and therefore goodwill is not included in the country specific
non-current assets shown above.
Depreciation by service line, EUR million
2013 2013 2013 2013 2013
1-3 4-6 7-9 10-12 1-12
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Managed Services 17.3 17.0 15.9 16.9 67.1
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Consulting and System Integration 0.2 0.3 0.3 0.3 1.0
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Industry Products 0.2 0.1 0.1 0.1 0.5
--------------------------------------------------------------------------------
Product Development Services 0.2 0.2 0.2 0.1 0.7
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Support Functions and Global Management 2.3 2.2 2.0 2.3 8.8
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Group total 20.1 19.8 18.4 19.7 78.1
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Amortization on allocated intangible assets from acquisitions by service line,
EUR million
2013 2013 2013 2013 2013
1-3 4-6 7-9 10-12 1-12
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Managed Services 0.5 0.4 0.5 0.4 1.8
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Consulting and System Integration 0.2 0.1 0.1 0.2 0.6
--------------------------------------------------------------------------------
Industry Products 0.2 0.2 0.2 0.2 0.9
--------------------------------------------------------------------------------
Product Development Services 0.1 0.1 0.1 0.1 0.4
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Support Functions and Global Management 0.0 0.0 0.0 0.0 0.0
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Group total 1.0 0.8 0.9 0.9 3.7
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Impairment losses by service line, EUR million
2013 2013 2013 2013 2013
1-3 4-6 7-9 10-12 1-12
----------------------------------------------------------------------
----------------------------------------------------------------------
Managed Services 0.0 0.1 0.0 0.0 0.1
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Consulting and System Integration 0.0 2.6 0.0 0.0 2.6
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Industry Products 0.0 1.3 0.0 0.0 1.3
----------------------------------------------------------------------
Product Development Services 0.0 3.6 0.0 0.0 3.6
----------------------------------------------------------------------
Support Functions and Global Management 0.0 0.4 0.0 0.0 0.4
----------------------------------------------------------------------
Group total 0.0 8.0 0.0 0.0 8.0
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For further information, please contact:
Tanja Lounevirta, Head of Investor Relations, tel. +358 50 321 7510,
tanja.lounevirta (at) tieto.com
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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