Slide 1: Q3 2018 Strong growth – solid profitability
Public Q3 2018 Strong growth – solid profitability Kimmo Alkio, President and CEO Janne Salminen, Acting CFO Tanja Lounevirta, Head of IR © Tieto Corporation
Slide 2: Q3 2018 in brief
Q3 2018 in brief Strong growth – solid profitability › Growth in local currencies 7%, organically 5% › Strong performance continues in Technology Services and Modernization and Product Development Services › Efficiency improvements compensate negative currency impact 2 © Tieto Corporation
Slide 3: The Nordic IT market remains dynamic
The Nordic IT market remains dynamic › Solid economic outlook continues to support IT market › Good demand for software-based solutions, consulting and IT outsourcing › Data-driven opportunities driving innovation and growth › Tieto expects the Nordic IT services market to grow by ~2% in 2018
Slide 4: Q3 2018 key figures
Q3 2018 key figures MEUR % 500 14 Net sales up by 3.4% 12,0 11,6 › EUR 367.1 (355.0) million 11,3 12 2 › Growth in local currencies 7% 400 1 2 13 12 9 › Organic growth in local currencies 5% 9,0 9,2 2 9,0 8,6 10 300 8 EBIT margin 11.0% (11.6%) 200 6 › EBIT EUR 40.4 (41.1) million › Adjusted* EBIT EU
Slide 5: Business mix change driven by growth businesses and application services
Business mix change driven by growth businesses and application services* WE AIM TO GROW FASTER THAN THE MARKET* SHARE OF IT SERVICES YTD/2018 GROWTH 1-9/2018 41% Growth 8% businesses** EMERGING SERVICES Other services and 17% solutions*** 21% TRADITIONAL SERVICES 2015 2020 42% Traditional services
Slide 6: Investments supporting continuous renewal and growth
Investments supporting continuous renewal and growth Up by 8% in local currencies in 1–9/2018 Customer Experience Data-Driven Businesses Cloud services Security services Management +12% +145% +19% +4% Selected industry solutions +4% Hydrocarbon Lifecare Credit solutions Production excellence managem
Slide 7: Quarterly development
Quarterly development Net sales 1,5 Net debt/EBITDA MEUR 500 1,0 1,0 400 1 2 2 13 12 9 0,9 300 2 1 0,8 0,8 200 100 392 384 353 408 393 392 358 0,5 0 0,5 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 0,2 Net of divestment and acquisitions Customer sales adjusted 0 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/1
Slide 8: Growth by Service Line and Industry Group
Growth in local currencies by Service Line and Industry Group MEUR 4% 200 175 2% / 4%* 150 125 Service 100 26% / 5%* Q3/17 18% Lines 75 Q3/18 50 25 172 179 42 54 112 114 29 34 0 Technology Services Business Consulting and Industry Solutions Product Development and Modernization Implementation Servic
Slide 9: Service Lines
Service Lines New Financial Services Public, Healthcare Industrial and data-driven and Welfare Consumer Services businesses *) Industry Solutions Business Consulting and Implementation Technology Services and Modernization Product Development Services Support Functions 9 © Tieto Corporation *) Repor
Slide 10: Technology Services and Modernization
Technology Services and Modernization Customer sales in Q3 MEUR % › EUR 173 (172) million, +1%, or +4% in local currencies 200 16 13,5 13,8 12,8 12,3 14 EBIT 11,7 11,0 › Adjusted* EBIT EUR 23.9 (23.1) million, 13.8% (13.5) 150 10,4 12 10 Q3 highlights 100 8 › Growth (in local currencies) driven by i
Slide 11: Business Consulting and Implementation
Business Consulting and Implementation Customer sales Q3 MEUR › EUR 52 (42) million, +22%, or +26% in local currencies % › Organic growth in local currencies +5% 70 12 EBIT 60 9,2 12 10 › Adjusted* EBIT EUR 1.5 (3.5) million, 2.8% (8.2) 8,2 8,1 13 50 7,7 9,8 8 8 8,7 Q3 highlights 40 › Organic growth
Slide 12: Industry Solutions
Industry Solutions Customer sales Q3 MEUR % › EUR 110 (112) million, -2%, or +2% in local 150 18 15,7 currencies 14,3 16 › Organic growth in local currencies 4% 14,1 2 1 2 14 2 EBIT 100 12 › Adjusted* EBIT EUR 15.8 (15.8) million, 14.3% (14.1) 9,4 8,1 10 7,5 Q3 highlights 8 50 4,9 6 › Strong growth
Slide 13: Product Development Services
Product Development Services Customer sales Q3 MEUR % › EUR 32 (29) million, +11%, or +18% in local 40 16 currencies 13,4 35 12,7 14 EBIT 30 12 › Adjusted* EBIT EUR 3.2 (2.1) million, 9.9% (7.2) 10,1 9,9 25 8,7 10 8,0 Q3 highlights 7,2 20 8 › Strong volume development with the largest key customers
Slide 14: Industry Groups
Industry Groups New Public, Healthcare Industrial and data-driven Financial Services and Welfare Consumer Services businesses *) Industry Solutions Business Consulting & Implementation Technology Services and Modernization Product Development Services 14 © Tieto Corporation *) Reported in Industry S
Slide 15: Financial Services
Financial Services Customer sales Q3 MEUR › EUR 88 (92) million, -4%, or -1% in local currencies 100 1 1 Sales split by service line 1 Q3/2018 Q3/2017 75 TSM 57% 55% BCI 9% 9% IS 34% 36% 50 Q3 highlights › In Industry Solutions, sales affected by the timing of 25 license sales – Q3/2017 included a s
Slide 16: Public, Healthcare and Welfare
Public, Healthcare and Welfare Customer sales Q3 MEUR › EUR 121 (112) million, +8%, or +12% in local currencies 150 2 2 Sales split by service line 125 1 Q3/2018 Q3/2017 100 TSM 46% 45% BCI 12% 10% 75 IS 42% 45% 50 Q3 highlights › Healthy development across the markets and 25 businesses 127 126 112
Slide 17: Industrial and Consumer Services
Industrial and Consumer Services Customer sales Q3 MEUR › EUR 126 (122) million, +4%, or +7% in local currencies 175 › Organic growth in local currencies 2% 150 1 1 10 9 Sales split by service line 125 1 1 7 Q3/2018 Q3/2017 100 TSM 54% 57% BCI 23% 19% 75 IS 23% 24% 50 Q3 highlights 25 › Several new
Slide 18: Way forward
Way forward tieto
Slide 19: Performance drivers in 2018
Performance drivers in 2018 › Growth above the market › Favorable offshoring development › Productivity programmes and savings measures ongoing › Salary inflation close to EUR 30 million › Restructuring costs expected to be 1–2% of Group sales: at the lower end of the range › Offering development co
Slide 20: Guidance for 2018 unchanged
Guidance for 2018 unchanged › Tieto expects its full-year adjusted *) operating profit (EBIT) to increase from the previous year’s level (EUR 161.4 million in 2017) *) Adjusted for restructuring costs, capital gains/losses, goodwill impairment charges and other items
Slide 21: Q3 2018 in brief
Q3 2018 in brief Strong growth – solid profitability › Growth in local currencies 7%, organically 5% › Strong performance continues in Technology Services and Modernization and Product Development Services › Efficiency improvements compensate negative currency impact 21 © Tieto Corporation
Slide 22: —< TOP100 ==
—< TOP100 == CW cot TECH LEADER ——
Slide 23: - tieto
- tieto