05 February 2015
Tieto Corporation INTERIM REPORT 5 February 2015, 8.00 am EET
The full interim report with tables is available at the end of this release
Key figures for the fourth quarter
Key figures for the full year
| 10-12/ 2014 |
10-12/ 20132) |
1-12/ 2014 |
1–12/ 20132) |
|
| Net sales, EUR million | 402.9 | 405.1 | 1 522.5 | 1 606.8 |
| Change, % | -0.6 | n/a |
-5.3 | n/a |
| Organic change in local currencies, % | 0.9 | n/a | -1.1 | n/a |
| Operating profit (EBITA), EUR million | 9.7 | 18.2 | 62.1 | 89.4 |
| Operating margin (EBITA), % | 2.4 | 4.5 | 4.1 | 5.6 |
| Operating profit (EBIT), EUR million | 9.5 | 17.3 | 61.1 | 85.7 |
| Operating margin (EBIT), % | 2.4 | 4.3 | 4.0 | 5.3 |
| Operating profit (EBIT) excl. one-off items1), EUR million | 44.4 | 42.0 | 150.2 | 141.2 |
| Operating margin (EBIT) excl. one-off items1), % | 11.0 | 10.4 | 9.9 | 8.8 |
| Profit after taxes, EUR million | 6.7 | 15.0 | 35.0 | 62.2 |
| EPS, EUR | 0.09 | 0.21 | 0.48 | 0.86 |
| Net cash flow from operations, EUR million | 90.2 | 57.5 | 167.9 | 159.0 |
| Return on equity, 12-month rolling, % | 7.1 | 12.0 | 7.1 | 12.0 |
| Return on capital employed, 12-month rolling, % 3) | 9.8 | 13.5 | 9.8 | 13.5 |
| Investments, EUR million | 12.9 | 23.6 | 43.5 | 71.7 |
| Interest-bearing net debt, EUR million | -59.2 | 15.5 | -59.2 | 15.5 |
| Net debt/EBITDA | -0.4 | 0.1 | -0.4 | 0.1 |
| Book-to-bill | 1.7 | 1.4 | 1.2 | 1.1 |
| Order backlog | 1 784 |
1 540 |
1 784 |
1 540 |
| Personnel on 31 Dec | 13 720 |
14 318 |
13 720 |
14 318 |
1) Excl. capital gains, goodwill impairment charges and restructuring costs
2) Figures restated according to IFRS 11 ‘Joint arrangements’
3) The figure for 2013 has been restated.
Full-year outlook for 2015
Tieto expects its full-year operating profit (EBIT) excluding one-off items to increase from the previous year’s level (EUR 150.2 million in 2014).
CEO’s comment
Comment regarding the interim report by Kimmo Alkio, President and CEO:
“We are pleased with the performance improvement of our IT services business throughout 2014. Our quality and efficiency measures progressed well during the year and supported the improvement in underlying margins, which was also visible in our fourth-quarter performance.
During 2014, our IT services business grew by nearly 3% in local currencies while order intake growth was 5% and further accelerated in the fourth quarter. Underlying profitability of IT services continued to improve despite increased investments in new services. Simultaneously, our Product Development Services underwent significant changes due to external market conditions. I’m also pleased with the progress of our start-up operations – they drive innovation with our customers and provide highly agile ways of working. These serve as good role models to reinvent the culture within Tieto.
The global IT services market continues to change at a fast pace, driven primarily by our customers’ digitalization agenda. This rapid pace of change provides ample new business opportunities, while requiring us to continuously renew our own operations. The actions that we announced in early January 2015 regarding our service portfolio and competence renewal are proactive measures to take Tieto into a market leading position. It has been exciting to shift our attention towards new services and growth acceleration, as visible in increased investments towards the year end. The next stage of our strategy combines efficiency, innovation and growth, which I expect to be highly beneficial and inspiring to our customers and employees."
Financial performance by service line
| EUR million | Customer sales 10-12/2014 |
Customer sales 10–12/2013 |
Change, % | Operating profit 10–12/2014 |
Operating profit 10–12/2013 |
| Managed Services | 131 | 129 | 1 | 8.2 | 0.4 |
| Consulting and System Integration | 107 | 102 | 5 | 10.4 | -1.6 |
| Industry Products | 107 | 111 | -4 | 17.4 | 28.3 |
| Product Development Services | 58 | 63 | -8 | -4.4 | -1.3 |
| Support Functions and Global Management | -22.1 | -8.5 | |||
| Total | 403 | 405 | -1 | 9.5 | 17.3 |
Operating margin by service line
| % | Operating margin 10–12/2014 | Operating margin 10–12/2013 | Operating margin excl. one-off items1) 10–12/2014 | Operating margin excl. one-off items1) 10–12/2013 |
| Managed Services | 6.2 | 0.3 | 6.9 | 6.9 |
| Consulting and System Integration | 9.8 | -1.6 | 9.5 | 7.6 |
| Industry Products | 16.3 | 25.5 | 18.3 | 25.7 |
| Product Development Services | -7.5 | -2.0 | 20.5 | 4.2 |
| Total | 2.4 | 4.3 | 11.0 | 10.4 |
| 1) Excl. capital gains, impairments and restructuring costs | ||||
Organic change in local currency by service line
| EUR million | Customer sales adj. for acquisitions and currency 10–12/2014 | Customer sales adj. for divestments 10–12/2013 | Change, % |
| Managed Services | 134 | 130 | 4 |
| Consulting and System Integration | 108 | 101 | 8 |
| Industry Products | 110 | 111 | -1 |
| IT services | 353 | 341 | 4 |
| Product Development Services | 55 | 63 | -13 |
| Total | 408 | 404 | 1 |
| Fourth-quarter sales were affected by the divestment of the security solutions business in Denmark. Additionally, the acquisitions of part of Siemens Convergence Creators' business are eliminated. | |||
Customer sales by industry group
| EUR million | Customer sales 10–12/2014 | Customer sales 10–12/2013 | Change, % |
| Financial Services | 90 | 89 | 2 |
| Manufacturing, Retail and Logistics | 82 | 81 | 1 |
| Public, Healthcare and Welfare | 115 | 105 | 9 |
| Telecom, Media and Energy | 59 | 68 | -14 |
| IT services | 345 | 342 | 1 |
| Product Development Services | 58 | 63 | -8 |
| Total | 403 | 405 | -1 |
Organic change in local currency by industry group
| EUR million | Customer sales adj. for acquisitions and currency 10–12/2014 | Customer sales adj. for divestments 10–12/2013 | Change, % |
| Financial Services | 92 | 89 | 4 |
| Manufacturing, Retail and Logistics | 83 | 80 | 3 |
| Public, Healthcare and Welfare | 118 | 105 | 12 |
| Telecom, Media and Energy | 60 | 68 | -11 |
| IT services | 353 | 341 | 4 |
| Product Development Services | 55 | 63 | -13 |
| Total | 408 | 404 | 1 |
| Fourth-quarter sales were affected by the divestment of the security solutions business in Denmark. Additionally, the acquisitions of part of Siemens Convergence Creators' business are 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 Helsinki, address: Aku Korhosen tie 2–6, on Thursday 5 February 2015 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 6937 9590
Sweden: +46 (0)8 5065 3937
UK: +44 (0)20 3427 1909
US: +1212 444 0896
Conference code: 8765732
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 is the largest IT services company in the Nordics providing full lifecycle IT services. We also provide global product development services for companies in the communications and embedded technologies arena. Through industry insight, technology vision, and innovative thinking, Tieto proactively strives to inspire and engage our customers in finding new ways of accelerating their business.
Building on a strong Nordic heritage, Tieto combines global capabilities with local presence. Headquartered in Helsinki, Finland, Tieto has over 13 000 experts in more than 20 countries. Turnover is approximately EUR 1.5 billion. Tieto’s shares are listed on NASDAQ in Helsinki and Stockholm. www.tieto.com
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