2014-04-25 07:00:01 CEST
2014-04-25 07:00:06 CEST
REGULATED INFORMATION
Tieto Oyj - Interim report (Q1 and Q3)
Interim Report 1/2014 – Continued profitability improvement – encouraging growth in IT services
Tieto Corporation INTERIM REPORT 25 April 2014, 8.00 am
EET
• In IT services, organic growth in local currencies at 3%
• Improved performance in Consulting and System Integration and
Managed Services
• Volatility in Product Development Services continues
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 1.4%
• In IT services, organic growth in local currencies up at 3.3%
• First-quarter operating profit excl. one-off items rose to EUR 34.5
(31.0) million,
margin increased to 8.9% (7.3)
1-3/2014 1-3/20132)
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Net sales, EUR million 387.0 423.9
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Change, % -8.7 n/a
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Organic change in local currencies, % -1.4 n/a
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Operating profit (EBITA), EUR million 34.4 30.3
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Operating margin (EBITA), % 8.9 7.2
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Operating profit (EBIT), EUR million 34.0 29.3
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Operating margin (EBIT), % 8.8 6.9
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Operating profit (EBIT) excl. one-off items1), EUR million 34.5 31.0
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Operating margin (EBIT) excl. one-off items1), % 8.9 7.3
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Profit after taxes, EUR million 24.6 21.4
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EPS, EUR 0.34 0.30
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Net cash flow from operations, EUR million 50.0 50.0
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Return on equity, 12-month rolling, % 13.5 3.7
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Return on capital employed, 12-month rolling, % 3) 15.3 8.1
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Investments, EUR million 13.4 17.3
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Interest-bearing net debt, EUR million -20.5 18.3
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Net debt/EBITDA -0.1 0.1
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Book-to-bill 1.0 0.9
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Order backlog 1 582 1 468
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Personnel on 31 March 14 102 15 845
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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 restated according to the new calculation of the figure
Full-year outlook for 2014
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:
“I'm pleased with the strong execution across many of our businesses in the
first quarter. The combination of our strong order book and profitability of
close to 9% reflects both our improved competitiveness in IT services and
potential for sustainable profit improvement. The efficiency measures we have
taken are visible in most of our businesses. However, we continue to face
challenges in Product Development Services.
This was the first quarter during which the Consulting and System Integration
service line demonstrated clear performance improvement. In Managed Services,
the positive development in both cloud services and profitability continued.
Our longer-term growth investments in areas such as Customer Experience
Management, Industrial Internet, Lifecare and cloud services are well
positioned to help us take advantage of current market demand.
While the first-quarter profitability performance reflects clear improvement in
utilization rates, both competitiveness and profitability will remain high on
our agenda. New technologies, such as cloud services, will continue to play a
big role in driving efficiency and supporting renewal of our customers'
business. This, coupled with simplification and automation enable continuous
efficiency improvement. At Tieto, we are well positioned to harness new
technologies in driving our competitiveness.”
Financial performance by service line
EUR million Customer Customer Change, Operating Operati
sales sales % profit ng
1-3/2014 1-3/2013 1-3/2014 profit
1-3/201
3
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Managed Services 127 120 6 10.9 0.7
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Consulting and System 100 108 -8 11.1 3.8
Integration
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Industry Products 100 109 -8 15.5 17.6
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Product Development 60 86 -30 1.1 9.3
Services
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Support Functions and -4.6 -2.1
Global Management
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Total 387 424 -9 34.0 29.3
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Operating margin by service line
% Operati Operati Operating Operating
ng ng margin excl. one-off margin excl.
margin margin items1) one-off
1-3/201 1-3/201 1-3/2014 items1)
4 3 1-3/2013
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Managed Services 8.5 0.6 8.4 0.3
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Consulting and System 11.1 3.5 11.2 4.7
Integration
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Industry Products 15.4 16.1 15.4 16.1
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Product Development 1.9 10.8 2.6 11.6
Services
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Total 8.8 6.9 8.9 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 sales adj. for Customer sales adj. Change
acquisitions and currency for divestments , %
1-3/2014 1-3/2013 --------------------------------------------------------------------------------
Managed Services 130 120 9
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Consulting and 100 101 -1
System Integration
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Industry Products 106 104 1
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IT services 336 325 3
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Product Development 61 78 -21
Services
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Total 397 403 -1
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The following divestments affected first-quarter sales: local businesses in
Germany and the Netherlands, the forest business in the UK and the security
solutions business in Denmark. Additionally, the acquisition of Canvisa
Consulting is eliminated.
Customer sales by industry group
EUR million Customer sales Customer sales Change, %
1-3/2014 1-3/2013
------------------------------------------------------------------------------
Financial Services 83 80 4
------------------------------------------------------------------------------
Manufacturing, Retail and Logistics 79 76 3
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Public, Healthcare and Welfare 100 107 -6
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Telecom, Media and Energy 65 74 -12
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Product Development Services 60 86 -30
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Total 387 424 -9
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Organic change in local currency by industry group
EUR million Customer sales adj. for Customer sales adj. Change
acquisitions and currency for divestments , %
1-3/2014 1-3/2013
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Financial Services 85 79 8
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Manufacturing, Retail 80 75 6
and Logistics
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Public, Healthcare 103 101 1
and Welfare
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Telecom, Media and 69 70 -2
Energy
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IT services 336 325 3
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Product Development 61 78 -21
Services
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Total 397 403 -1
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The following divestments affected first-quarter sales: local businesses in
Germany and the Netherlands, the forest business in the UK and the security
solutions business in Denmark. Additionally, the acquisition of Canvisa
Consulting is eliminated.
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. 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 1903
US: +1646 254 3364
Conference code: 1579669
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. The full
interim report with tables is available only in English and Finnish.
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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