Tieto Corporation · OMXHEX:TIETO
Tieto — Q1 2019 Earnings Presentation
26 slides from Tieto's earnings presentation, 2019
Slide 1: Q1 2019 Good start for the year
Q1 2019 Good start for the year Kimmo Alkio, President and CEO Tomi Hyryläinen, CFO Tanja Lounevirta, Head of IR
Slide 2: Q1 2019 in brief
Q1 2019 in brief Good start for the year › Adjusted operating margin of 10% supported by healthy performance in Industry Solutions › Strong growth and profitability in Product Development Services › Growth in local currencies 2% – strong order intake › Strategy implementation progressing as planned,
Slide 3: The Nordic IT market remains highly dynamic
The Nordic IT market remains highly dynamic Increasing investments for new Hybrid infrastructure as a data-rich services and foundation in customers’ business differentiating experiences continuity and renewal Uncertainty in macroeconomic Tieto expects the Nordic IT trends continues services market
Slide 4: Q1 2019 key figures
Q1 2019 key figures Net sales up by 1% › EUR 408.4 (406.3) million MEUR % › Growth in local currencies 2% 500 14 › Organic growth in local currencies 2% 11,7 12,1 1 12 400 1 1 2 EBIT margin 9.0% (9.2%) 9,3 1 10,0 9,0 10 › EBIT EUR 36.8 (37.3) million › Adjusted1) EBIT EUR 40.9 (37.9) million, 300 8
Slide 5: Healthy development in a number of growth businesses
Healthy development in a number of growth businesses Growth in local currencies Annual sales in 2018 Internal Business Consulting and Implementation (growth 7%) › Customer Experience Management +33% ~ EUR 60 million Technology Services and Modernization (growth 0%) › Cloud services +8% ~ EUR 125 mil
Slide 6: Quarterly development
Quarterly development Net sales 1,5 Net debt/EBITDA MEUR 500 1,1 1 1,0 1,0 400 1 1 1 2 1 300 0,7 200 100 0,5 405 403 366 421 406 0,5 0 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Net of divestment and acquisitions 0 Customer sales adjusted Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Employees Number of full-time employees and
Slide 7: Growth in local currencies by Service Line and Industry Group
Growth in local currencies by Service Line and Industry Group MEUR 0% 200 175 1% / 2%* 150 125 Service 100 7% / 4%* Q1/18 12% Lines 75 Q1/19 50 62 66 25 190 190 121 122 34 38 0 Technology Services Business Consulting and Industry Solutions Product Development and Modernization Implementation Service
Slide 8: 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 8 *) Reported in Industry Solutions
Slide 9: Technology Services and Modernization
Technology Services and Modernization Customer sales in Q1 MEUR % › EUR 187 (189) million, -1%, or in local currencies at 250 16 Q1/2018 level 13,8 13,0 14 12,3 EBIT 200 11,0 1 1 12 › Adjusted1) EBIT EUR 19.5 (20.8) million, 10.4% 1 (11.0) 150 10 10,4 8 100 6 Q1 highlights › Annual price discounts a
Slide 10: Business Consulting and Implementation
Business Consulting and Implementation Customer sales Q1 MEUR % › EUR 65 (62) million, +5%, or +7% in local currencies 80 12 › Organic growth in local currencies +4% 10,4 10,4 70 9,4 1 2 10 EBIT › Adjusted1) EBIT EUR 6.8 (5.8) million, 10.4% (9.4) 60 8 50 8,8 Q1 highlights 40 6 › Growth supported by
Slide 11: Industry Solutions
Industry Solutions Customer sales Q1 MEUR % › EUR 119 (121) million, -1%, or +1% in local 150 16,4 18 currencies 15,2 › Organic growth in local currencies 2% 16 1 1 14 EBIT 1 11,1 100 12 › Adjusted1) EBIT EUR 13.3 (9.9) million, 11.1% (8.2) 8,2 10 Q1 highlights 5,7 8 › Strong growth in Hydrocarbon M
Slide 12: Product Development Services
Product Development Services Customer sales Q1 MEUR % › EUR 37 (34) million, +8%, or +12% in local 40 12,7 14 12,3 currencies 35 12 9,9 10,1 EBIT 30 8,7 10 › Adjusted1) EBIT EUR 4.5 (4.3) million, 12.3% (12.7) 25 8 20 Q1 highlights 6 15 › Strong volume development with the largest key 10 4 customers
Slide 13: 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 13 *) Reported in Industry Solutions
Slide 14: Financial Services
Financial Services Customer sales Q1 MEUR › EUR 91 (96) million, -5%, or -3% in local currencies 100 Sales split by service line Q1/2019 Q1/2018 75 TSM 56% 56% BCI 9% 11% IS 35% 33% 50 Q1 highlights › Sales affected by volume and price development in 25 infrastructure services › Positive development
Slide 15: Public, Healthcare and Welfare
Public, Healthcare and Welfare Customer sales Q1 MEUR › EUR 139 (133) million, +5%, or +7% in local currencies 175 150 Sales split by service line 1 1 125 Q1/2019 Q1/2018 TSM 44% 45% 100 BCI 14% 12% 75 IS 42% 43% 50 Q1 highlights › Healthy development across the markets and 25 businesses 133 133 121
Slide 16: Industrial and Consumer Services
Industrial and Consumer Services Customer sales Q1 MEUR › EUR 141 (143) million, -1%, or in local currencies at Q1/2018 level 175 150 1 1 Sales split by service line 125 1 Q1/2019 Q1/2018 100 TSM 53% 53% 75 BCI 26% 26% IS 21% 21% 50 Q1 highlights 25 › Healthy growth especially in Hydrocarbon 142 142
Slide 17: Performance drivers in 2019
Performance drivers in 2019 › Growth above the market › Offering development costs around 5% of Group sales › Productivity improvement measures, incl. automation, optimized subcontracting, offshoring, management of competence pyramid › Salary inflation over EUR 30 million › Operational simplificatio
Slide 18: Guidance for 2019 unchanged
Guidance for 2019 unchanged Internal › Tieto expects its full-year adjusted operating profit (EBIT) to 1) increase from the previous year’s level (EUR 168.0 million in 2018) added by the impact of IFRS 16 2) to maintain the comparability after the adoption of the new standard 1) adjusted for amortiz
Slide 19: Q1 2019 in brief
Q1 2019 in brief Good start for the year › Adjusted operating margin of 10% supported by healthy performance in Industry Solutions › Strong growth and profitability in Product Development Services › Growth in local currencies 2% – strong order intake › Strategy implementation progressing as planned,
Slide 20: Market opportunity and strategy 2019
Market opportunity and strategy 2019
Slide 21: Digital experience and data driving customers' competitiveness
Digital experience and data driving customers’ competitiveness To be addressed by New business outcomes customers for customers Renew Design and applications experience Digital transformation accelerating Predictive How we healthcare Digital Agile development can help citizen services sprints a new
Slide 22: Services driving competitiveness
Services driving competitiveness Digital Experience Hybrid Infra Industry Software Product Development Services eCommerce and Hybrid cloud Industry-specific customer experience (private and public) software/solutions Telecom Data science 24/7 services Customers’ business critical Automotive and plat
Slide 23: Business potential and value drivers
Business potential and value drivers Capability / Performance uplift Today Ambition • Build scale for Design, Analytics and Cloud integration Digital • Increase customer impact by combining capabilities Experience from Design, Data and Application Modernization • Build multicloud platforms to enable
Slide 24: Strategy summary
Strategy summary Digital Experience as the main growth driver – all businesses expected to grow above market ✓ Investments in digital capabilities – addition of 2 500–3 000 people during the strategy period 2019–2022 ✓ Scalable Industry Software continues to drive global expansion Significant operat
Slide 25: Creating great everyday experiences, making customers more competitive
Creating great Making customers everyday experiences more competitive 25
Slide 26: - tieto
- tieto