Tieto Corporation INTERIM REPORT 25 April 2013, 8.00 am EET
Interim Report 1/2013 (January–March) – Business focus and efficiency drive profitability
The full interim report with tables is available at the end of this release
- Execution of the competitive cost structure programme continued well – mitigating the anticipated weakness in the telecom sector
- New operating model in place, taking the strategy forward
- Cost savings in Product Development Services paying off, strategy defined
Key figures
| EUR million | 1-3/2013 | 1-3/2012 | 1-12/2012 |
| Net sales, EUR million | 444.8 | 467.1 | 1 825.3 |
| Change, % | -5 | 1 | 0 |
| Organic change, % | -2 | ||
| Operating profit (EBITA), EUR million | 31.1 | 43.6 | 68.3 |
| Operating margin (EBITA), % | 7.0 | 9.3 | 3.7 |
| Operating profit (EBIT), EUR million | 30.1 | 42.1 | 63.0 |
| Operating margin (EBIT), % | 6.8 | 9.0 | 3.5 |
| Operating profit (EBIT) excl. one-off items, EUR million | 32.0 | 28.4 | 138.8 |
| Operating margin (EBIT) excl. one-off items, % | 7.2 | 6.1 | 7.6 |
| Profit after taxes, EUR million | 21.4 | 32.0 | 29.4 |
| EPS, EUR | 0.30 | 0.45 | 0.41 |
| Net cash flow from operations, EUR million | 41.2 | 68.8 | 161.9 |
| Return on equity, 12-month rolling, % | 3.7 | 15.4 | 5.5 |
| Return on capital employed, 12-month rolling, % | 11.7 | 21.7 | 13.2 |
| Investments, EUR million | 17.3 | 14.4 | 62.9 |
| Interest-bearing net debt, EUR million | 6.9 | 11.7 | 23.9 |
| Net debt/EBITDA | 0.0 | 0.1 | 0.2 |
| Book-to-bill | 0.8 | 1.0 | 1.0 |
| Order backlog | 1 627 | 1 719 | 1 703 |
| Personnel on 31 March | 16 354 | 18 121 | 16 537 |
Full-year outlook for 2013 unchanged
Tieto expects its organic net sales to develop in line with the growth in the market for IT services, with the exception of the weaker outlook in the telecom sector.
Tieto expects its profitability to continue to improve and full-year operating profit (EBIT) excluding one-off items to increase from the previous year’s level (EUR 138.8 million in 2012).
CEO’s comment
Comment regarding the interim report by Kimmo Alkio, President and CEO:
“I’m pleased to see the continued improvement in our profitability, driven primarily by the cost-efficiency measures we initiated last year. We expected the first quarter to be challenging, as we implemented a major structural change in our operations. Now that the structural changes are behind us and the transparency of our businesses has improved, we can concentrate on the implementation of our chosen strategy. Price competitiveness has become increasingly important as customers actively drive transformation programmes to improve cost-efficiency.
The Nordic IT services market continues to be dynamic with enterprises actively adopting new technologies. This transformation-centric customer agenda fits well with our priorities. Our focus remains on innovation, solution packaging and a global delivery scale – all of which improve competitiveness. As an example, our recently launched cloud services have received a positive response during the first quarter with customers signing up to this highly efficient and flexible service concept.
I’m also pleased that our Product Development Services is ready to begin implementation of its recently decided strategy, which focuses on global customers in the communications and embedded technologies segment. Implementation of the refined strategy enhances our ability to become the number one product development partner to our targeted customers.”
Financial performance by service line
| EUR million |
Customer sales 1–3/2013 |
Customer sales 1–3/2012 |
Change, % |
Operating profit 1–3/2013 |
Operating profit 1–3/2012 |
| Managed Services | 125 | 124 | 1 | 1.3 | -2.5 |
| Consulting and System Integration | 108 | 127 | -15 | 3.8 | 12.7 |
| Industry Products | 126 | 130 | -3 | 18.5 | 32.4 |
| Product Development Services | 86 | 86 | 1 | 9.3 | 2.5 |
| Steering Functions and Global Management | -2.7 | -3.0 | |||
| Total | 445 | 467 | -5 | 30.1 | 42.1 |
Operating margin by service line
| % |
Operating margin 1–3/2013 |
Operating margin 1–3/2012 |
Operating margin excl. one-off items 1–3/2013 |
Operating margin excl. one-off items 1–3/2012 |
| Managed Services | 1.0 | -2.0 | 0.7 | -1.7 |
| Consulting and System Integration | 3.5 | 9.9 | 4.7 | 10.0 |
| Industry Products | 14.6 | 24.9 | 14.8 | 13.1 |
| Product Development Services | 10.8 | 3.0 | 11.6 | 4.1 |
| Total | 6.8 | 9.0 | 7.2 | 6.1 |
Customer sales by industry group
| EUR million |
Customer sales 1-3/2013 |
Customer sales 1-3/2012 |
Change, % |
| Financial Services | 94 | 94 | 0 |
| Manufacturing, Retail and Logistics | 76 | 82 | -7 |
| Public, Healthcare and Welfare | 114 | 112 | 1 |
| Telecom, Media and Energy | 74 | 93 | -20 |
| Product Development Services | 86 | 86 | 1 |
| Total | 445 | 467 | -5 |
For further information, please contact:
Lasse Heinonen, CFO, tel. +358 2072 66329, +358 50 393 4950, lasse.heinonen (at) tieto.com
Pellervo Hämäläinen, Vice President, Communications and IR, tel. +358 2072 52729, +358 4067 45257, pellervo.hamalainen(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 11.30 am EET (10.30 am CET, 9.30 am UK time). The results will be presented in English by Kimmo Alkio, President and CEO.
The conference will be webcasted and published live on Tieto's website www.tieto.com and there will 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. As from the first quarter of 2013, the full interim report with tables will be available only in English and Finnish.
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 17 000 experts, the company operates in over 20 countries with net sales of approximately EUR 1.8 billion. Tieto’s shares are listed on NASDAQ OMX in Helsinki and Stockholm. Please visit www.tieto.com for more information.
Tieto Corporation
Business ID: 0101138-5
Aku Korhosen tie 2−6
PO Box 38
FI-00441 HELSINKI, FINLAND
Tel +358 207 2010
Registered office: Helsinki
E-mail: ir@tieto.com
www.tieto.com
