Tieto Corporation · OMXHEX:TIETO
Tieto — TietoEVRY — Q1 2021 Earnings Presentation
25 slides from Tieto's earnings presentation, 2021
Slide 1: Q1 2021 Solid profitability driven by Industry Software and Digital Consulting
Q1 2021 Solid profitability driven by Industry Software and Digital Consulting Kimmo Alkio, President and CEO Tomi Hyryläinen, CFO
Slide 2: Q1 in brief
2 Q1 in brief Solid profitability driven by Industry Software and Digital Consulting Revenue Adjusted Cloud & Infra Continued organically operating margin transformation healthy cash down by 6% as of 11.5% continues – flow anticipated – efficiency growth outlook measures for H2 2021 initiated mainta
Slide 3: Market showing signs of recovery
3 Market showing signs of recovery Key wins in a Covid-19 impact on Future of Work – Integration on market driven by customer activity refining employee schedule – 2021 customers’ digital gradually reducing, engagement, focus emphasizing agenda – focus on normalized business learning and growth agen
Slide 4: Significant wins in multi-cloud and enterprise transformation services
4 Significant wins in multi-cloud and enterprise transformation services Lyse extends its relationship with LocalTapiola expands the use of cloud TietoEVRY services • Transforming Lyse to new multi-cloud • Infrastructure and multi-cloud services environment • End-user services and application • Secu
Slide 5: TietoEVRY's active climate agenda recognized with top rankings
5 TietoEVRY’s active climate agenda recognized with top rankings Amongst top 1% - platinum level on CDP ‘A List’ ranking for tackling climate Ecovadis rating change Ecovadis has rated 75 000 companies in 160 The Carbon Disclosure Project (CDP) is a non- countries and 200 industries with focus on ove
Slide 6: TietoEVRY Q1'21
6 TietoEVRY Q1’21 Business highlights Organic growth* -6% Revenue EUR 712 million, organic growth* -6% Adj. EBITA** • Reported growth -4%, currency impact EUR 12 million 800 11.5% (up 1.0%) Adjusted EBITA** EUR 82.1 (78.2) million, 11.5% (10.5) Covid-19 impact appr. -3% on revenue 744 712 712 600 68
Slide 7: Digital Consulting
7 Digital Consulting Business highlights Organic growth* -5% Revenue EUR 175 million, organic growth* -5% Adj. EBITA** Adjusted EBITA** EUR 26.5 (23.9) million, 15.1% (13.0) 200 15.1% (up 2.1%) Covid-19 impact appr. 5% on revenues, negative working day impact around 1.5% 150 Profitability developmen
Slide 8: Cloud & Infra
8 Cloud & Infra Business highlights Organic growth* Revenue EUR 216 million, organic growth* -17% -17% Adjusted EBITA** EUR 8.6 (23.7) million, 4.0% (9.4) Adj. EBITA** Revenue decline caused by: 300 4.0% (down 5.4%) • Customers lost during 2019 – impact appr. 10% • High comparative in Q1’20 - impact
Slide 9: Industry Software
9 Industry Software Business highlights Organic growth* 3% Revenue EUR 136 million, organic growth* 3% Adj. EBITA** Adjusted EBITA** EUR 27.3 (13.1) million, 20.1% (10.1) 150 20.1% (up 10%) Covid-19 impact appr. -2% Strong growth in Welfare (16%) and Healthcare (10%) Profit development driven by sys
Slide 10: Financial Services Solutions
10 Financial Services Solutions Business highlights Organic growth* 3% Revenue EUR 112 million, organic growth* 3% Adj. EBITA** Adjusted EBITA** EUR 12.3 (11.7) million, 10.9% (11.0) 12.3% (down 0.1%) Covid-19 impact appr. -3% Growth primarily driven by Cards services 100 Investment level maintained
Slide 11: Product Development Services
11 Product Development Services Business highlights Organic growth* -8% Revenue EUR 37 million, organic growth* -8% Adj. EBITA** Adjusted EBITA** EUR 4.4 (5.0) million, 12.0% (12.9) 50 12% (down 0.9%) Covid-19 impact appr. -5% mostly affecting automotive industry 40 Healthy profitability maintained
Slide 12: International Operations – serving European and US customers
12 International Operations – serving European and US customers Consistent revenue growth and solid business opportunities within future digital 2020 revenue Organic growth in Q1 services EUR 130 22% million Focus on digital and data • cloud transformation • cloud-native software development About I
Slide 13: CFO report
13 CFO report
Slide 14: CFO highlights Q1
14 CFO highlights Q1 • Improved profitability driven by strong performance in Industry Software and Digital Consulting - synergy contribution supporting overall profitability • Temporary lower profitability in Cloud & Infra • Continued cost discipline to offset Covid-19 impact • One-time items estim
Slide 15: Cloud & Infra temporary profit decline diluting synergy realization
15 Cloud & Infra temporary profit decline diluting synergy realization Adj. EBITA (MEUR) 10.5% 11.5% + 4 MEUR (up 1.0%) 5 1 6 20 15 78 82 Q120 Synergies Operational FX and Working day C&I temporary Q121 improvement M&A impact impact profit decline Sensitivity: Internal
Slide 16: Continued healthy cash flow contributing to fast deleveraging
16 Continued healthy cash flow contributing to fast deleveraging MEUR 125 108 90 95 EUR 95 (31) million cash flow from operations 86 driven by improved profitability and stable 76 working capital development 31 51 56 Free cash flow of EUR 56 million, representing 6 cash conversion of 1.5 from net pr
Slide 17: Well on track to achieve EUR 100 million synergies by 2022
17 Well on track to achieve EUR 100 million synergies by 2022 Target merger efficiencies unchanged at EUR 100 EUR 100 million merger efficiencies achieved within million, with merger efficiency run-rate of EUR 82 three years million executed by end of Q1 2021 120 Q1 operating profit includes EUR 20
Slide 18: One-time items positively impacted by Oil & Gas divestment
18 One-time items positively impacted by Oil & Gas divestment One-time items (MEUR) Q1 2021 actual FY2021 estimate • Oil & Gas divestment results in Oil & Gas divestment (net gain) -2 ~70 positive one-time items effect of appr. EUR 70 million Integration cost 6 26-36 • Integration cost estimate for
Slide 19: Other finance related topics
19 Other finance related topics Oil & Gas divestment Capex Expected closing during Q2´21 Capex in % of revenue 3.3% 3.4% 2.7% 2.5% 3.1% Oil & Gas business classified as assets held for sale in Q1´21 25 23 Enterprise value (EV) EUR 155 million 22 17 18 Estimated P&L impact from divestment appr. EUR 7
Slide 20: Performance drivers – Q2'21
20 Performance drivers – Q2’21 • Impact from Covid-19 estimated to be less than Q1 Revenue drivers • Cloud & Infra pre-merger lost customer impact on the Group’s growth ~3.5% • Synergy impact slightly above EUR 20 million Profit drivers • In Cloud & Infra, temporarily lower profitability – adjusted
Slide 21: Positioned for growth acceleration
21 Positioned for growth acceleration
Slide 22: Software and cloud leading growth recovery
22 Software and cloud leading growth recovery Market growth driver • Cloud and data-driven services growth accelerating Digital • International operations organic growth ~22% solutions* • High activity in DevOps embedded services Accelerating digital 1 – cloud and data Renewing technology Industry •
Slide 23: Growth dynamics 2021 – back to growth H2
23 Growth dynamics 2021 – back to growth H2 H1 2021 H2 2021 Industry Software Industry Software: High activity and wins in welfare, healthcare and public Financial Services Solutions Financial Services Solution: Growth outlook supported by order backlog and strong momentum in BaaS and Cards Product
Slide 24: Q1 in brief
24 Q1 in brief Solid profitability driven by Industry Software and Digital Consulting Revenue Adjusted Cloud & Infra Continued organically operating margin transformation healthy cash down by 6% as of 11.5% continues – flow anticipated – efficiency growth outlook measures for H2 2021 initiated maint
Slide 25: tieto fizy
tieto fizy