TietoEnator Corporation STOCK EXCHANGE RELEASE 18 January 2007, 8.30 am
EET 1 (2)
TietoEnator's preliminary operating margin for 2006 lower than expected
According to preliminary information TietoEnator's 2006 net sales for
continuing operations totalled EUR 1 646 million, representing total
growth of around 5%. Organic growth is expected to be 2%. TietoEnator's
operating profit (EBIT) excluding capital gains for continuing operations
amounted to around EUR 112 million, corresponding to a margin of 6.8%.
TietoEnator guided for around 5% net sales growth and around 8% EBIT
margin excluding capital gains in its third-quarter 2006 interim report
on 20 October 2006.
TietoEnators net sales for 2006 were well in line with the companys
expectations. Profitability, however, was lower than expected in the
fourth quarter due to higher costs and higher proportion of low-margin
revenue, like subcontracting and third-party licence sales.
TietoEnator's President and CEO Pentti Heikkinen comments:
The year did not end as we expected. We invested heavily in
internationalization, in the development of offerings, marketing and
brand building. At the same time we faced tough price competition, which
we responded to by investing in our own low-cost competence centres.
Preliminary net sales by business area
EUR million Q4 net Q4 net Q4 2006 2006 2006
sales sales organic net net organic
growth growth sales sales growth
% % growth %
%
Banking & 78 17 18 284 20 13
Insurance
Telecom & Media 152 1 -2 542 0 -5
Government, 58 -10 6 236 -1 4
Manufacturing &
Retail
Healthcare & 44 6 3 144 10 6
Welfare
Forest & Energy 45 6 3 161 0 -1
Processing & 101 12 12 374 9 9
Network
Eliminations -24 -95
incl other
Group total 455 5 6 1 646 5 2
Preliminary operating profit (EBIT) and operating margin % by business
area excluding capital gains
EUR million Q4 EBIT Q4 EBIT % 2006 EBIT 2006 EBIT %
Banking & 6 7.7 20 7.1
Insurance
Telecom & Media 13 8.8 39 7.2
Government, 6 9.9 18 7.6
Manufacturing &
Retail
Healthcare & 8 18.2 13 8.9
Welfare
Forest & Energy 2 4.9 8 4.9
Processing & 9 9.2 40 10.5
Network
Business areas 45 9.8 137 8.3
Group operation -8 -25
incl other
Operating 37 8.0 112 6.8
margin (EBIT),
excl capital
gains
A Conference call regarding the preannouncement will be held on 18
January at 9.00 am CET (10 am EET, 8 am UK time). The conference will be
hosted by Timo Salmela and Päivi Lindqvist and there will be an
opportunity to pose questions. The call will also be available as live
audio webcast on www.tietoenator.com/presentations. Callers may access
the conference directly at the following telephone numbers: US callers:
+1 617 614 3450, non-US callers: +44 20 7365 8426, code 'TietoEnator'.
Lines to be reserved ten minutes before start of conference call.
A replay will be available until 25 January 2007 in the following
numbers: US callers: +1 617 801 6888, non-US callers: +44 20 7365 8427,
access code: 5284 6410. An on-demand audiocast of the conference will
also be published at TietoEnator's website later during the same day.
TietoEnator will publish further information in its fourth quarter and
full year 2006 statement on 6 February 2007 at 8.00 am EET/ 7.00 am CET.
For more information, please contact
Timo Salmela, CFO, tel. +358 8626 2213, +358 400 434 974,
timo.salmela@tietoenator.com
Päivi Lindqvist, Executive Vice President, Communications and IR, tel.
+358 8626 3276, +358 40 708 5351, paivi.lindqvist@tietoenator.com
TIETOENATOR CORPORATION
DISTRIBUTION
Helsinki Stock Exchange
Stockholmsbörsen
Principal Media
TietoEnator is among the leading architects in building a more efficient
information society and one of the largest IT services providers in
Europe. TietoEnator specializes in consulting, developing and hosting its
customers business operations in the digital economy. The Groups
services are based on a combination of deep industry-specific expertise
and the latest information technology. TietoEnator has over 15 000
experts in more than 25 countries.
www.tietoenator.com