Slide 1: Q2 2018 Strong growth – profit at the previous year's level
Public Q2 2018 Strong growth – profit at the previous year’s level Kimmo Alkio, President and CEO Janne Salminen, Acting CFO Tanja Lounevirta, Head of IR © Tieto Corporation
Slide 2: Q2 2018 in brief
Q2 2018 in brief Strong growth – profit at the previous year’s level › Growth in local currencies 8%, organically 5% › Profitability development good in Technology Services and Modernization, Business Consulting and Product Development Services › Higher investments in technology renewals in Industry
Slide 3: The Nordic IT market continues to provide growth opportunities
The Nordic IT market continues to provide with growth opportunities › Solid economic outlook continues to support IT market › Good demand for software-based solutions, consulting and IT outsourcing › Current currency trend unfavorable for Tieto › Tieto expects the Nordic IT services market to grow b
Slide 4: Q2 2018 key figures
Q2 2018 key figures MEUR % 500 14 Net sales up by 4.8% 12,0 11,6 › EUR 404.1 (385.6) million 12 2 › Growth in local currencies 8% 400 1 2 13 12 › Organic growth in local currencies 5% 9,0 9,2 1 9,0 8,6 10 300 8 EBIT margin 7.7% (7.3%) 200 6 › EBIT EUR 31.3 (28.1) million › Adjusted* EBIT EUR 34.8 (3
Slide 5: Steady progress towards strategic ambition
Steady progress towards strategic ambition Significant technology renewal in many industry solutions Customers’ 1st choice Q2 dynamics • We believe in investing in Industry for business renewal Solutions software businesses – Attractive market with high demand for digital strategic choice and strong
Slide 6: 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 YTD 2018 40% Growth 8% businesses** EMERGING SERVICES Other services and 18% solutions*** 24% TRADITIONAL SERVICES 2015 2020 42% Traditional services
Slide 7: Investments supporting continuous renewal and growth
Investments supporting continuous renewal and growth Up by 8% in local currencies in H1/2018 Customer Experience Data-Driven Businesses Cloud services Security services Management +11% +110% +21% -6% Selected industry solutions +4% Hydrocarbon Lifecare Credit solutions Production excellence manageme
Slide 8: Quarterly development
Quarterly development Net sales 1,5 Net debt/EBITDA MEUR 500 12 400 1 2 2 13 1,0 300 1 1 0,9 200 0,8 0,8 100 392 384 354 408 393 392 0 0,5 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 0,5 0,2 Net of divestment and acquisitions Customer sales adjusted 0 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Employees Number of
Slide 9: Growth in local currencies by Service Line and Industry Group
Growth in local currencies by Service Line and Industry Group MEUR 3% 225 200 3% / 4%* 175 150 Service 125 Q2/17 100 35% / 10%* 13% Lines 75 Q2/18 50 66 25 186 191 49 120 123 31 35 0 Technology Services Business Consulting and Industry Solutions Product Development and Modernization Implementation S
Slide 10: 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 10 © Tieto Corporation *) Repo
Slide 11: Technology Services and Modernization
Technology Services and Modernization Customer sales in Q2 MEUR % › EUR 187 (186) million, +1%, or +3% in local currencies 200 16 13,5 12,8 12,3 14 EBIT 11,7 11,0 › Adjusted* EBIT EUR 22.9 (21.6) million, 12.3% (11.7) 150 10,4 12 10 Q2 highlights 100 8 › Growth (in local currencies) driven by infras
Slide 12: Business Consulting and Implementation
Business Consulting and Implementation Customer sales Q2 MEUR › EUR 64 (49) million, +31%, or +35% in local currencies % › Organic growth in local currencies +10% 70 12 EBIT 60 9,2 12 10 › Adjusted* EBIT EUR 6.3 (3.8) million, 9.8% (7.7) 8,2 8,1 13 50 7,7 9,8 8,7 8 Q2 highlights 40 › Organic growth
Slide 13: Industry Solutions
Industry Solutions Customer sales Q2 MEUR % › EUR 119 (120) million, at Q2/2017 level, or +3% in 150 18 15,7 local currencies 16 › Organic growth in local currencies 4% 14,1 1 1 2 14 1 EBIT 100 12 › Adjusted* EBIT EUR 5.9 (11.2) million, 4.9% (9.4) 9,4 8,1 10 7,5 Q2 highlights 8 50 4,9 6 › Good grow
Slide 14: Product Development Services
Product Development Services Customer sales Q2 MEUR % › EUR 34 (31) million, +8%, or +13% in local 40 16 currencies 13,4 35 12,7 14 EBIT 30 12 › Adjusted* EBIT EUR 2.9 (2.5) million, 8.7% (8.0) 10,1 25 8,7 10 8,0 Q2 highlights 7,2 20 8 › Strong volume development with the largest key customers and g
Slide 15: 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 15 © Tieto Corporation *) Reported in Industry S
Slide 16: Financial Services
Financial Services Customer sales Q2 MEUR › EUR 95 (96) million, -1%, or +2% in local currencies 100 1 1 Sales split by service line Q2/2018 Q2/2017 75 TSM 56% 57% BCI 11% 10% IS 33% 33% 50 Q2 highlights › In Payments, continued expansion of customer base, 25 including a major win with a large Nordi
Slide 17: Public, Healthcare and Welfare
Public, Healthcare and Welfare Customer sales Q2 › EUR 133 (126) million, +5%, or +8% in local currencies MEUR 150 Sales split by service line 2 2 125 Q2/2018 Q2/2017 TSM 44% 45% 100 BCI 13% 11% IS 43% 44% 75 Q2 highlights 50 › Development strongest in TSM, driven by cloud and application services 2
Slide 18: Industrial and Consumer Services
Industrial and Consumer Services Customer sales Q2 MEUR › EUR 142 (131) million, +8%, or +11% in local currencies 175 › Organic growth in local currencies 5% 150 1 1 10 9 Sales split by service line 125 1 1 Q2/2018 Q2/2017 100 TSM 52% 56% BCI 26% 20% 75 IS 22% 24% 50 Q2 highlights 25 › Several new a
Slide 19: Way forward
Way forward tieto
Slide 20: Performance drivers in 2018
Performance drivers in 2018 › Growth above the market › Based on current rates, currency impact on sales ~EUR 43 million and on profit ~EUR 8 million › Favorable offshoring development › New productivity programmes and savings measures initiated › to address currency impact and salary inflation › ef
Slide 21: 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 **) Restated due to the adopt
Slide 22: Q2 2018 in brief
Q2 2018 in brief Strong growth – profit at the previous year’s level › Growth in local currencies 8%, organically 5% › Profitability development good in Technology Services and Modernization, Business Consulting and Product Development Services › Higher investments in technology renewals in Industry
Slide 23: Tieto
- tieto