Slide 1: Tieto Q2 2017
Public Tieto Q2 2017 Solid business performance continues 21 July 2017 Kimmo Alkio – President and CEO Lasse Heinonen – CFO Tanja Lounevirta – Head of IR © Tieto Corporation
Slide 2: Q2 2017 in brief
Q2 2017 in brief Solid business performance continues • Encouraging order intake with new customer wins in all businesses, especially in Sweden • Healthy profitability driven by Technology Services and Modernization • Automation programme and targeted investments in software businesses support furth
Slide 3: Outlook in the Nordic IT market remains solid
Outlook in the Nordic IT market remains solid Improved outlook gradually supporting IT market in Finland IT market affected by economic outlook 5% GDP growth, % 4% • Positive outlook in Sweden continues • Improved outlook in Finland 3% Tieto expects the Nordic IT services market 2% to grow by 2–3% i
Slide 4: High-growth businesses driving growth
High-growth businesses driving growth Application Services supporting traditional services TIETO'S GROWTH AMBITION FOR IT SERVICES: SALES GROWTH SHARE OF IT SERVICES GROWTH FASTER THAN THE MARKET* (CAGR 2015-2020) 2016–2020 (CAGR) H1/2017 H1/2017 36% High-growth businesses** 10% Selected industry so
Slide 5: High-growth businesses up by 10% in H1
High-growth businesses up by 10% in H1 SERVICE LINE SERVICE LINE HIGH-GROWTH Annual sales 2016 Growth H1/2017 BUSINESSES Annual sales 2016 Growth H1/2017 Selected high-growth Selected solutions*: 8% Industry industry solutions 7% EUR ~ 320 million 8% Solutions**) DDB: EUR 475 million Data-Driven Bus
Slide 6: Industry Solutions in our investment focus
Industry Solutions in our investment focus Revenue growth 7% in H1 – Industry Solutions’ investments up by EUR 5 million, geared towards HCW and FS Selected high-growth industry solutions Global footprint – annual sales 2016 ~ 320 mEUR – annual sales 2016 ~ 75 mEUR Healthcare: Public sector: Case
Slide 7: Infrastructure cloud market driven by multi-cloud solutions
Infrastructure cloud market driven by multi-cloud solutions We recently expanded our public cloud portfolio through OneCloud Annual market growth (CAGR 2016–2021) in the Nordics*) Our growth in H1/2017 Way forward Total infrastructure cloud services 15–20% Incubation of cloud- Market expansion throu
Slide 8: Q2 2017 key figures
Q2 2017 key figures Net sales MEUR % • EUR 386 (381) million, +1.2%, growth in local currencies +2.8% 12,3 • Acquisitions added EUR 5 million 500 14 • Currency impact EUR -6 million • Two working days less 12 400 10,4 • In IT services, sales growth 1.0%, or 2.5% in local currencies 5 5 9,0 9,2 10 •
Slide 9: Quarterly development
Quarterly development Net sales 1,5 Net debt/EBITDA MEUR 500 0,9 400 5 5 1,0 300 0,7 200 0,5 0,6 100 367 381 341 404 388 381 0,5 0 0,2 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 0,0 Net of divestment and acquisitions Customer sales adjusted -0,1 -0,5 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Employees Number of
Slide 10: Growth in local currencies by Service Line and Industry Group
Growth in local currencies by Service Line and Industry Group MEUR 0% 225 200 6% / 2%* 175 150 Service 125 Q2/16 100 3% 6% Lines 75 Q2/17 50 25 196 197 37 38 117 124 31 33 0 Technology Services Business Consulting and Industry Solutions Product Development and Modernization Integration Services MEUR
Slide 11: Service Lines
Service Lines New Financial Services Public, Healthcare Industrial and data-driven and Welfare Consumer Services businesses *) Business consulting & implementation Industry solutions Technology Services and Modernization Product Development Services 11 © Tieto Corporation *)Reported in Industry Solu
Slide 12: Technology Services and Modernization
Technology Services and Modernization Customer sales in Q2 • EUR 194 (196) million, -1%, sales in local currencies MEUR % at Q2/2016 level 250 14,1 16 13,4 11,9 14 EBIT 200 • EBIT EUR 20.5 (20.9) million, 10.5% (10.6) 10,8 10,9 12 10,2 • Adjusted* EBIT EUR 23.1 (21.3) million, 11.9% (10.8) 10 150 Q2
Slide 13: Business Consulting & Implementation
Business Consulting & Implementation Customer sales Q2 MEUR • EUR 38 (37) million, +2%, growth of 3% in local currencies % 50 7,1 8 EBIT • EBIT EUR 2.6 (1.2) million, 7.0% (3.3) 6 40 3,7 3,3 4,0 • Adjusted* EBIT EUR 1.5 (1.2) million, 4.0% (3.3) 4 1,8 Q2 highlights 30 2 • Healthy growth in consultin
Slide 14: Industry Solutions
Industry Solutions Customer sales Q2 • EUR 122 (117) million, +4%, growth of 6% in local MEUR % currencies 150 18 • Organic growth in local currencies 2% 15,5 16 EBIT 12,5 5 5 14 • EBIT EUR 9.3 (11.1) million, 7.6% (9.5) 100 12 • Adjusted* EBIT EUR 11.0 (12.8) million, 9.0% (10.9) 9,0 8,0 10 10,4 10
Slide 15: Product Development Services
Product Development Services Customer sales Q2 MEUR % • EUR 31 (31) million, +3%, growth of 6% in local 35 16 currencies 13,6 30 14 EBIT 11,1 11,3 25 12 • EBIT EUR 2.4 (3.3) million, 7.6% (10.7) • Adjusted* EBIT EUR 2.6 (3.4) million, 8.3% (11.1) 8,4 8,3 10 20 6,5 8 Q2 highlights 15 • Strong volume
Slide 16: Industry Groups
Industry Groups New Public, Healthcare Industrial and data-driven Financial Services and Welfare Consumer Services businesses *) Business consulting & implementation Industry solutions Technology Services and Modernization Product Development Services 16 © Tieto Corporation *)Reported in Industry So
Slide 17: Financial Services
Financial Services Customer sales Q2 MEUR • EUR 97 (93) million, +4%, growth of 6% in local currencies 100 • Organic growth in local currencies 1% 5 5 Sales split by service line 75 Q2/2017 Q2/2016 TSM 58% 60% 50 BCI 6% 5% IS 36% 35% 25 Q2 highlights • Acquisition of Emric and projects driving IT ef
Slide 18: Public, Healthcare and Welfare
Public, Healthcare and Welfare Customer sales Q2 MEUR • EUR 127 (120) million, +5%, growth of 7% in local 135 currencies 120 Sales split by service line 105 90 Q2/2017 Q2/2016 75 TSM 47% 47% BCI 8% 8% 60 IS 45% 45% 45 30 Q2 highlights • Healthy growth across all service lines 15 118 120 106 135 128
Slide 19: Industrial and Consumer Services
Industrial and Consumer Services Customer sales Q2 MEUR • EUR 132 (138) million, -5%, -3% in local currencies 150 Sales split by service line 125 Q2/2017 Q2/2016 TSM 60% 62% 100 BCI 17% 16% IS 23% 22% 75 Q2 highlights 50 • Q2 affected by expiring contracts, price erosion and lower number of working
Slide 20: Outlook
Outlook a tieto
Slide 21: Performance drivers in 2017
Performance drivers in 2017 IT services Q2 H2 Full year Negative working day and currency Continue to grow faster than the market – We aim to grow faster than the market, growth effects supported by license sales supported by acquisitions Efficiency programme affecting cost base Efficiency programme
Slide 22: Guidance for 2017 unchanged
Guidance for 2017 unchanged Tieto expects its full-year adjusted*) operating profit (EBIT) to increase from the previous year’s level (EUR 152.2 million in 2016). *) Adjusted for restructuring costs, capital gains/losses, goodwill impairment charges and other items © Tieto Corporation
Slide 23: Q2 2017 in brief
Q2 2017 in brief Solid business performance continues • Encouraging order intake with new customer wins in all businesses, especially in Sweden • Healthy profitability driven by Technology Services and Modernization • Automation programme and targeted investments in software businesses support furth
Slide 24: - tieto
- tieto