Tieto Corporation · OMXHEX:TIETO
Tieto — TietoEVRY — Q1 2024 Earnings Presentation
23 slides from Tieto's earnings presentation, Apr 25, 2024
Slide 1: Q1 performance as anticipated — Tietoevry Banking strategic review concluded
Q12024 °: Q1 performance as anticipated — Tietoevry Banking strategic review concluded Kimmo Alkio, President and CEO Tomi Hyrylainen, CFO Wiz tietoeucy
Slide 2: Q1 performance as anticipated — Tietoevry Banking strategic review concluded
- Q1 performance as anticipated — Tietoevry Banking Strategic review concluded Growth of -2% impacted by soft macroeconomic environment, high comparison figures and fewer working days Healthy growth of 8% in Tietoevry Banking and 4% in Tietoevry Industry Resilient profitability of over 12% supported
Slide 3: Continued market softness — AI accelerating
Continued market softness — Al accelerating Continued softness in IT market demand especially impacting short-term consulting engagements Customer attention on resilience reflected in the spend — stable demand for software and technology services Further fragility in geopolitical environment— contin
Slide 4: Recent exciting customer engagements — increased AI centricity
Recent exciting customer engagements — increased Al centricity modern KARTON Modern Karton AS selected Tietoevry Industry's mill execution system to modernize operations, prioritize sustainable products, and support growth and profitability. Satakunnan hyvinvointialue Tietoevry Care harmonizing and
Slide 5: Strategic reviews
Strategic reviews ee
Slide 6: Strategic review of Tietoevry Banking concluded — timing currently not optimal
Strategic review of Tietoevry Banking concluded —timing currently not optimal to maximize shareholder value through a listing or sale Strategic review Demerger plan announced 22 filed 15" Today: Strategic review Jul'22 Feb'24 process conclusions Vv v 4 * Current capital market conditions do not supp
Slide 7: Tietoevry Tech Services strategic review progressing as planned
Tietoevry Tech Services strategic review progressing as planned TIETOEVRY TECH SERVICES STRATEGIC REVIEW Strategic review Go-live with announced 30 Nov'22 _ integrated business Strategic review 4 Vv conclusions ae (01239223 gaas 823 rad gaat T T T T T TT T > Integration & transition Operational simp
Slide 8: Business highlights
Business highlights ee
Slide 9: Tietoevry Group
Tietoevry Group Q1 performance as anticipated — Tietoevry Banking strategic review concluded Organic growth! Adj. EBITA2 12.1% (12.3%) €89m (92) -2% “3 (8%) Cash flow from operations ; €72m Q1V/23 Q2/23 Q3/23 Q4/23 Q1/24 (€104m) m Revenue, €m Adj. EBITA 11) Adjusted for currency effects, acquisition
Slide 10: Tietoevry Create
Tietoevry Create Growth headwind, healthy profit margin 223 15.4% Q1/23 4, tietoery 205 11.9% Q2/23 196 229 11.0% 15.0% Q3/23 Q4/23 Revenue, €m Adj. EBITA 224 13.1% Q1/24 Organic growth -D% (8%) j. EBITA 13.1% (15.3%) €29m (34) Highlights * Growth impacted by weaker economic environment, fewer worki
Slide 11: Tietoevry Banking
Tietoevry Banking Continued healthy performance 142 140 135 150 149 10.3% 10.6% 13.3% 14.3% 11.9% Q1/23 — Q2/23,-Q3/23. Q4/23— 1/24 Revenue, €m Adj. EBITA 4, tietoery Organic growth 8% (14%) j. EBITA 11. 9% (10.3%) €18m (15) Highlights * Strong growth in Banking as a Service and Financial Crime Prev
Slide 12: Tietoevry Care
Tietoevry Care Continued solid profitability 62 58 52 61 By 30.7% 29.1% 30.6% 30.1% 28.2% Q1/23 — Q2/23,-Q3/23. Q4/23— 1/24 Revenue, €m Adj. EBITA 4, tietoery Organic growth -D% (15%) j. EBITA 28. 2° (30.2%) €17m (19) Highlights * Growth impacted by health and social care reform in Finland — Q1’23 i
Slide 13: Tietoevry Industry
Tietoevry Industry Consistent healthy performance Organic growth Highlights Education 4 % * Strong growth in Data Platforms and fe) ) (4% * Profitability supported by growth — impacted by cost inflation and temporarily elevated subcontracting costs Adj. EBITA 16.3% . (e} ) Q1/23 -Q2/23,-Q3/23 04/23.
Slide 14: Tietoevry Tech Services
Tietoevry Tech Services Growth headwind, improved profit margin Organic growth Highlights / % * Market weakness continued impacting especially 7 fe) Data & Application Services (2%) * Growth impacted by fewer working days, high comparable and volatility in HW/SW sales Cloud platforms & Security +10%
Slide 15: CFO report
CFO report oe a
Slide 16: Q1 performance as anticipated — impacted by soft macroeconomic environment
Q1 performance as anticipated — impacted by soft macroeconomic environment 124 highliehts oz Revenue and growth * Organic growth -2.0%, impacted by soft macroeconomic REED 734 744 environment, high comparison figures and fewer working Organic growth, % 2% 8% days. Growth adjusted for working days -0
Slide 17: Healthy cash flow from operations of €72 million
Healthy cash flow from operations of €72 million Cash flow from operations €72m (104) + Net working capital decrease of €3m (- € 14m in Q1'23) — quarter ended during weekend increasing accounts receivable balance * Net financials increase of €9m - higher net debt, interest rates and timing of intere
Slide 18: Personnel development impacted by capacity management
Personnel development impacted by capacity management + LTM attrition decreased to 9.4%. Quarterly attrition stable from Q4’23. + Net personnel decrease of ca. 270 from Q4’23 to Q1'24 mainly driven by capacity management in Tietoevry Create to reflect market conditions + Recruitment pace accounting
Slide 19: Performance drivers — Q2'24
Performance drivers — Q2’24 Returning to growth in Q2 * Continued weaker economic environment impacting demand in Tietoevry Create and Tietoevry Tech Services due to customers’ cost saving actions and postponed investments Growth drivers * Continued good momentum in Banking and Industry * Care retur
Slide 20: Q2 profitability outlook
Q2 profitability outlook Q2'23 Business adj. EBITA % Profitability outlook At or below Q2’23 level Tietoevry Create Tietoevry Banking 10.6% At or above Q2’23 level Tietoevry Care 29.1% At or below Q2’23 level Tietoevry Industry 14.7% At or above Q2’23 level Tietoevry Tech Services 4.9% Above Q2’23 l
Slide 21: Our way forward
Our way forward oe ee
Slide 22: Tietoevry's sustainability pledge
Tietoevry’s sustainability pledge Reinventing the world for good TIETOEVRY'S THREE COMMITMENTS Climate action Ethical conduct Social impact ® Carbon neutral in own operations by 2026 @ Zero tolerance for corruption %® Respect human rights & Zero major privacy violations, respecting individuals’ righ
Slide 23: Way forward — Advancing specialization and AI driven value
Way forward — Advancing specialization and Al driven value Performance Enable Banking to Conclude Tech Expand Al resilience in all pursue Fintech Services strategic capabilities and businesses software leadership review solutions with high operationa independence