Tieto Corporation · OMXHEX:TIETO
Tieto — TietoEVRY — Q2 2021 Earnings Presentation
23 slides from Tieto's earnings presentation, 2021
Slide 1: Q2 2021 Turning to growth – solid profitability
Q2 2021 Turning to growth – solid profitability Kimmo Alkio, President and CEO Tomi Hyryläinen, CFO
Slide 2: Q2 in brief
2 Q2 in brief Turning to growth – solid profitability Organic growth Strong Significant wins Objective for 2% – adjusted performance in demonstrating leverage operating software competitiveness achieved – net margin 12.2% businesses – – top 5 contracts debt/EBITDA growth of 13% in represent EUR belo
Slide 3: Market dynamics and growth momentum
3 Market dynamics and growth momentum High activity Digital Dynamic talent Future of Work level – accelerating – market – – refining business impact growth captured increasing employee from the in cloud & data recruitment engagement pandemic and industry capacity to and flexible reducing specific su
Slide 4: Significant wins in the quarter
4 Significant wins in the quarter • Healthy order intake, backlog growth Extends infrastructure and Financial Services 3%* from Q1’21 partnership – TCV EUR 200 million • Top 5 wins representing EUR 300 million • Strong book to bill 1.4 in Cloud & Infra Modern end-user and workplace services for with
Slide 5: TietoEVRY Q2'21
5 TietoEVRY Q2’21 Business highlights Organic growth* 2% Revenue EUR 722 million, organic growth* 2% Adj. EBITA** • Reported growth 5%, currency impact EUR 30 million 800 12.2% (up 0.5%) Adjusted EBITA** EUR 88.3 (80.4) million, 12.2% (11.7) 686 712 722 600 712 644 Growth profile in all businesses i
Slide 6: Digital Consulting
6 Digital Consulting Business highlights Organic growth* 1% Revenue EUR 172 million, organic growth* 1% Adj. EBITA** Adjusted EBITA** EUR 23.0 (17.8) million, 13.4% (11.0) 200 13.4% (up 2.4%) Growth accelerating in cloud and technology consulting and data & analytics 150 Margin improvement driven by
Slide 7: Cloud & Infra
7 Cloud & Infra Business highlights Organic growth* -10% Revenue EUR 219 million, organic growth* -10% Adj. EBITA** Adjusted EBITA** EUR 13.2 (26.6) million, 6.0% (11.5) 300 6.0% (down 5.5%) Pre-merger lost customer impact of appr. 10% on revenue 250 Turnaround programme on schedule: 200 • Continued
Slide 8: Industry Software
8 Industry Software Business highlights Organic growth* 13% Revenue EUR 139 million, organic growth* 13% Adj. EBITA** Adjusted EBITA** EUR 32.2 (18.4) million, 23.1% (15.0) 150 23.1% (up 8.1%) Continued strong growth in healthcare and welfare business 100 Profit development driven by revenue growth
Slide 9: Financial Services Solutions
9 Financial Services Solutions Business highlights Organic growth* 9% Revenue EUR 119 million, organic growth* 9% Adj. EBITA** Adjusted EBITA** EUR 16.3 (12.0) million, 13.7% (11.8) 13.7% (up 1.9%) Growth driven by strong performance in core banking, 100 payments and cards businesses Profit developm
Slide 10: Product Development Services
10 Product Development Services Business highlights Organic growth* 2% Revenue EUR 36 million, organic growth* 2% Adj. EBITA** Adjusted EBITA** EUR 3.7 (4.0) million, 10.4% (11.5) 50 10.4% (down 1.1%) Market activity and demand increasing in all key industries 40 Additional recruitment activities in
Slide 11: International Operations – strong capabilities in digitalization and cloud
11 International Operations – strong capabilities in digitalization and cloud Capturing demand for transformation Q2 revenue Organic growth in Q2 and future digital services EUR 37 19% • Enhancement of digital customer and citizen million experiences • Digitalization of business processes e.g., supp
Slide 12: Advancing in our sustainability agenda
12 Advancing in our sustainability agenda
Slide 13: CFO report
13 CFO report
Slide 14: CFO highlights: Q2 financials – continued solid profitability
14 CFO highlights Q2 financials – continued solid Other Q2 items profitability • Organic growth 2% – adjusted operating margin • Synergy impact EUR 21 million in Q2’21. Not fully 12.2% visible in the P&L due to temporary profit decline in Cloud & Infra • Strong reported operating profit at EUR 139.7
Slide 15: Leverage target achieved
15 Leverage target achieved MEUR 125 108 90 95 EUR 11 (90) million cash flow from operations 116 86 impacted by increase in working capital. 51 76 Cash generation foundations remains healthy – no 31 56 structural changes 11 6 Free cash flow of EUR 116 million, impacted positively by Oil & Gas divest
Slide 16: Synergy realization on track
16 Synergy realization on track Q2’21 operating profit includes EUR 21 million of EUR 100 million merger efficiencies achieved within synergies three years Run-rate of EUR 85 million executed by end of 120 Q2’21 5 100 100 15 Run-rate of EUR 90-95 million expected by end of 80 80 2021 60 Accumulated
Slide 17: One-time items in line with estimates
17 One-time items in line with estimates H1 FY2021 One-time items (MEUR) Q1 2021 Q2 2021 2021 estimate Oil & Gas divestment -2 73 71 71 (net gain) • Oil & Gas divestment resulted in Integration cost -6 -3 -9 -(26-30) positive one-time items effect of EUR 71 million IBM transition of services -5 -1 -
Slide 18: Other finance related topics
18 Other finance related topics Oil & Gas divestment Capex Closing completed on 7 June – minor part of asset transfers will Capex in % of revenue be completed during autumn 2.5% 3.4% 2.7% 2.5% 3.1% Enterprise value (EV) EUR 155 million 23 22 18 18 18 P&L impact from divestment EUR 71 million • EV ad
Slide 19: Performance drivers – Q3'21
19 Performance drivers – Q3’21 Revenue drivers • Cloud & Infra pre-merger lost customer impact on the Group’s growth ~2% • Synergy impact slightly above EUR 21 million Profit drivers • Capacity reduction in legacy services and automation driving profit improvement in H2’21 • Estimated positive FX im
Slide 20: Growth momentum
Growth momentum
Slide 21: Growth dynamics 2021
21 Growth dynamics 2021 H1 2021 H2 2021 Industry Software Growth agenda materializing as planned Financial Services Solutions Group growth of 2% in Q2’21 Product Development Services H2’21 all service lines except Cloud & Infra Digital Consulting positively contributing to growth ambition Cloud & In
Slide 22: Solid foundation for H2 2021
22 Solid foundation for H2 2021 Cloud & Infra Foundation for Healthy market Continued growth turnaround solid financial sentiment Market opportunity, business objectives agenda and drivers of competitiveness on schedule returns
Slide 23: tieto fizy
tieto fizy