26 April 2016
Tieto Corporation INTERIM REPORT 26 April 2016, 8.00 am EET
The full interim report with tables is available at the end of this release
Key figures for the first quarter
IT services
The Group
| 1–3/2016 | 1–3/2015 | |
| Net sales, EUR million | 367.5 | 365.6 |
| Change, % | 0.5 | -5.5 |
| Change in local currencies, % | 1.4 | -3.2 |
| Operating profit (EBITA), EUR million 1) | 31.6 | 17.2 |
| Operating margin (EBITA), % | 8.6 | 4.7 |
| Operating profit (EBIT), EUR million | 28.3 | 13.9 |
| Operating margin (EBIT), % | 7.7 | 3.8 |
| Adjusted 2) operating profit (EBIT), EUR million | 31.5 | 30.7 |
| Adjusted 2) operating margin (EBIT), % | 8.6 | 8.4 |
| Profit after taxes, EUR million | 21.5 | 9.1 |
| EPS, EUR | 0.29 | 0.12 |
| Net cash flow from operations, EUR million | 46.9 | 36.7 |
| Return on equity, 12-month rolling, % | 25.7 | 4.5 |
| Return on capital employed, 12-month rolling, % | 27.2 | 7.7 |
| Capital expenditure and acquisitions, EUR million | 9.4 | 11.6 |
| Interest-bearing net debt, EUR million | -21.3 | -85.9 |
| Net debt/EBITDA | -0.1 | -0.6 |
| Book-to-bill | 0.9 | 1.2 |
| Order backlog | 1 907 | 1 819 |
| Personnel on 31 March | 13 200 | 13 456 |
1) includes amortization of all intangible items; previously, only acquisition-related intangible items included
2) adjusted for restructuring costs, capital gains/losses, goodwill impairment charges and other items
Full-year outlook for 2016
Tieto expects its adjusted 1) full-year operating profit (EBIT) to increase from the previous year’s level (EUR 150.8 million in 2015).
1) adjusted for restructuring costs, capital gains/losses, goodwill impairment charges and other items
CEO’s comment
Comment regarding the interim report by Kimmo Alkio, President and CEO:
“We had a good start for the year with accelerated growth and improved profitability in IT services – with growth supported by our recent acquisitions. It is very encouraging to see a number of our businesses outperforming the market. Of the industries, Financial Services and Public, Healthcare and Welfare had a really strong quarter. This success was also visible in Industry Products, which delivered strong growth of 13%. In addition, our cloud services’ competitiveness is demonstrated by revenue growth of 72%.
I’m pleased to see that our performance in the past quarter is well in line with the main choices made in our recently launched strategy. Our ambition is to be customers’ first choice in their business renewal – the dynamic marketplace with its digitalization initiatives opens up new opportunities for both our customers and us. The combination of software-centric industry solutions with our growth investments and high availability cloud services provides us with attractive growth opportunities. While continuing to invest in new technologies and new growth opportunities, we maintain our commitment to continued profitability improvement and an attractive dividend policy.
While we aim to be customers’ first choice for business renewal, it is highly inspiring for all of us at Tieto to take an active role in the creation of open ecosystems in pursuit of new sources of innovation and growth.”
Financial performance by service line
| EUR million | Customer sales 1–3 /2016 |
Customer sales 1–3/2015 |
Change, % | Operating profit 1–3/2016 |
Operating profit 1–3/2015 |
| Managed Services | 129 | 126 | 2 | 10.8 | -8.3 |
| Consulting and System Integration | 102 | 99 | 3 | 5.6 | 8.2 |
| Industry Products | 107 | 94 | 13 | 13.8 | 12.6 |
| Product Development Services | 29 | 47 | -37 | 2.6 | 6.5 |
| Support Functions and Global Management | -4.7 | -5.0 | |||
| Total | 367 | 366 | 1 | 28.3 | 13.9 |
Operating margin by service line
| % | Operating margin 1–3 /2016 |
Operating margin 1–3/2015 |
Adjusted1) operating margin 1–3 /2016 |
Adjusted1) operating margin 1–3/2015 |
| Managed Services | 8.4 | -6.6 | 8.7 | 3.6 |
| Consulting and System Integration | 5.5 | 8.3 | 6.8 | 10.8 |
| Industry Products | 13.0 | 13.3 | 13.3 | 13.4 |
| Product Development Services | 9.0 | 14.0 | 8.4 | 14.0 |
| Total | 7.7 | 3.8 | 8.6 | 8.4 |
1) adjusted for restructuring costs, capital gains/losses, goodwill impairment charges and other items
Customer sales by industry group
| EUR million | Customer sales 1–3 /2016 |
Customer sales 1–3 /2015 |
Change, % |
| Financial Services | 88 | 84 | 5 |
| Manufacturing, Retail and Logistics | 79 | 78 | 2 |
| Public, Healthcare and Welfare | 118 | 101 | 17 |
| Telecom, Media and Energy | 53 | 57 | -7 |
| IT services | 338 | 319 | 6 |
| Product Development Services | 29 | 47 | -37 |
| Total | 367 | 366 | 1 |
M&A impact by service line
| Growth, % (in local currencies) 1–3 /2016 |
Organic growth, % (in local currencies) 1–3 /2016 |
|
| Managed Services | 2.4 | 2.4 |
| Consulting and System Integration | 3.2 | -1.3 |
| Industry Products | 15.8 | 5.8 |
| IT services | 7.0 | 2.6 |
| Product Development Services | 37.5 | 37.5 |
| Total | 1.4 | -2.5 |
M&A impact by industry group
| Growth, % (in local currencies) 1–3 /2016 |
Organic growth, % (in local currencies) 1–3 /2016 |
|
| Financial Services | 6.3 | 6.3 |
| Manufacturing, Retail and Logistics | 1.8 | 0.1 |
| Public, Healthcare and Welfare | 17.7 | 6.5 |
| Telecom, Media and Energy | -4.4 | -6.8 |
| IT services | 7.0 | 2.6 |
| Product Development Services | -37.5 | -37.5 |
| Total | 1.4 | -2.5 |
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 on Tuesday, April 26, 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. To join the conference, attendees need Adobe Flash plugin version 10.1.0 or newer. 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 7479 0361
Sweden: +46 (0)8 5033 6574
UK: +44 (0)203 043 2002
US: +1 719 325 2131
Conference code: 6304748
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 and Finnish.
TIETO CORPORATION
DISTRIBUTION
NASDAQ Helsinki
NASDAQ Stockholm
Principal Media
Tieto aims to capture the significant opportunities of the data-driven world and turn them into lifelong value for people, business and society. We aim to be customers’ first choice for business renewal by combining our software and services capabilities with a strong drive for co-innovation and ecosystems.
Headquartered in Finland, Tieto has over 13,000 experts in close to 20 countries. Tieto’s turnover is approximately EUR 1.5 billion and shares listed on NASDAQ in Helsinki and Stockholm. www.tieto.com
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