Tieto Corporation · OMXHEX:TIETO
Tieto — TietoEVRY — Q1 2025 Earnings Presentation
29 slides from Tieto's earnings presentation, Apr 29, 2025
Slide 1: Performance as anticipated — major step taken in strategic renewal
Q1 2025 Performance as anticipated — major step taken in strategic renewal Kimmo Alkio, President and CEO Tomi Hyrylainen, CFO wiz tietoeucy
Slide 2: Today's agenda
|. Firm strategy execution Today's agenda 2. Q1 performance 3. Way forward
Slide 3: Firm strategy execution
1. Firm strategy tne execution
Slide 4: Repositioning Tietoevry as a leading software and digital engineering company
Repositioning Tietoevry as a leading software and digital engineering company 2022-23 Specialized end-to- end businesses Create #@; tietoeucy 2024+ Software and digital engineering company @y tietoeucy @.8 Tech Services coon MULTI-YEAR STRATEGIC TRANSFORMATION 4, tietoeuy High expansion and value cr
Slide 5: Each business aims to be among the best in their respective markets
Each business aims to be among the best in their respective markets Tietoevry Create Tietoevry Banking Tietoevry Care Tietoevry Industry Build global scale and customer base focusing on design, software engineering, data and Al expertise Drive European expansion with competitive fintech software- ba
Slide 6: Q1 performance
2.Q1 performance oe ee
Slide 7: Organic growth of -4% impacted by weak demand environment
Organic growth of -4% impacted by weak demand environment All figures for continuing operations IFRS5 unless otherwise stated Adjusted EBITA of 10.6% impacted by IFRS 5-related temporary cost burden of 1.8 pp. ik Strong cash flow and strengthened order backlog - important customer contracts in Banki
Slide 8: Market continues to be soft with limited visibility
Market continues to be soft with limited visibility te S pe Vee i K ia \ Wi y Market demand for Increased Higher customer focus Al market adoption software and digital macroeconomic on efficiency and accelerating across all engineering remains uncertainty impacting short-term results software busine
Slide 9: Regaining trust in the Norwegian finance sector driving impact with software and digital engineering
Regaining trust in the Norwegian finance sector driving impact with software and digital engineering P| sparc lorge Fana Sparebank tyres6 konmumn @ NATO Communications. A Sndtmormation agency SCE Tietoevry Banking entered a long-term strategic partnership with the largest savings bank in Norway, Spa
Slide 10: Advancing with AI/GenAI
Advancing with Al/GenAl 4, tietoeuy 000 om Tietoevry Care introduced Lifecare Al Search for Care Measures — the first Al solution in municipal health care in Sweden, available to 100+ municipalities and their professionals. As an embedded functionality for elderly care software, it significantly red
Slide 11: Business highlights
Business highlights
Slide 12: Tietoevry Group
Tietoevry Group Performance as anticipated — major step taken in strategic renewal Organic growth! Adj. EBITA2 -4% “Be 10.6% (0%) (12.2%) €50m (60) Cash flow from operation’ Order backlog y-y / q-q €98m "bo +18%/+4%" Q1/24 Q2/24 03/24 Q4/24 91/25 (72m) : €2047m mRevenue,€m (Q1'24: 1725 / 04'24: 1926
Slide 13: Tietoevry Create
Tietoevry Create Continued soft market impacting performance 224 214 191 208 211 13.1% 1.4% 12.1% 11.2% 11.8% Q1/24 Q2/24 Q3/24 Q4/24 Q1/25 Revenue, €m Adj. EBITA 4, tietoeuy Organic growth -6% (-5%) Adj. EBITA 11.8% (13.1%) €25m (29) Highlights * Low demand environment continues in all markets * Lo
Slide 14: Tietoevry Banking
Tietoevry Banking Stable profitability and significant new core banking contracts in Norway 149 148 138 146 141 N9% 9.9% 13.3% 14.6% 11.4% Q1/24 Q2/24 Q3/24 Q4/24 Q1/25 Revenue, €m Adj. EBITA 4, tietoeuy Organic growth “4% (8%) Adj. EBITA 11.4% (11.9%) €16m (18) Highlights Growth impacted by Norwegi
Slide 15: Tietoevry Care
Tietoevry Care Healthy underlying performance 59 59 53 61 57 28.2% 26.2% 31.6% 32.1% 24.7% Q1/24 Q2/24 Q3/24 Q4/24 Q1/25 Revenue, €m Adj. EBITA 4, tietoeuy Organic growth -2% (-5%) j. EBITA 24.7% (28.2%) €14m (16) Highlights * Growth impacted by decline of legacy product business (-4 pp.) and lower
Slide 16: Tietoevry Industry
Tietoevry Industry Market headwinds continued 70 67 62 65 68 16.3% 15.1% 16.3% 12.1% 12.4% Q1/24 Q2/24 Q3/24 Q4/24 Q1/25 Revenue, €m Adj. EBITA 4, tietoeuy Organic growth -2% (4%) Adj. EBITA 12.4% (16.3%) €8m (11) Highlights Significant decline in pulp, paper & fibre industry continued — customers p
Slide 17: CFO report
CFO report
Slide 18: Continued soft market and macroeconomic uncertainty
Continued soft market and macroeconomic uncertainty | Continuingoperations | t'25] at'24| Q1'25 financial update - continuing operations Revenue and growth Revenue 471 492 * Tech Services classified as discontinued operations Organic growth, % 4 0 Acquisitions & divestments, % 0 3 * Organic growth -
Slide 19: Improved financial profile on comparable basis
Improved financial profile on comparable basis — reported figures not reflecting underlying profitability Revenue and organic growth 4% 702 4% 18 471 = 250) Combined Tech Services Change in Reported Q1 segment eliminations Q1 Adjusted EBITA Tech Services’ share Management Tech Services of Group oper
Slide 20: Q1 strong operating cash flow of €97m
Q1 strong operating cash flow of €97m Cash flow and leverage metrics include both the continuing and the discontinued operations * Strong cash flow from operations’ €97m (72) Operating cash flow (€m) Ml Free cash flow? (€m) + Net working capital decrease of €31m, supported by seasonal working capita
Slide 21: Capacity optimization ongoing — LTM attrition reflecting soft market environment
Capacity optimization ongoing — LTM attrition reflecting soft market environment + LTMattrition at 7.9%, reflecting soft market environment Attrition 8.5 8.4 8.2 79 79 % last twelve a Ann aah P Ps months * Cost optimization ongoing in all businesses in response (voluntary) to weak market environment
Slide 22: Performance drivers — Q2'25
Performance drivers — Q2’25 Q2 growth expected to be negative while improving from Q1—market softness continues * Tietoevry Create impacted by continued weak demand across all markets and reducing internal revenue with negative ~2 pp. on growth * Tietoevry Banking impacted by Norwegian bank merger —
Slide 23: Q2 profitability outlook
Q2 profitability outlook Q2'24 Business adj. EBITA% Profitability outlook Tietoevry Create 11.4% Below Q2’24 level Tietoevry Banking 9.9% At or above Q2’24 level Tietoevry Care 26.2% Below Q2’24 level Tietoevry Industry 15.1% Below Q2'24 level
Slide 24: 2025 outlook
2025 outlook updated to reflect continuing operations Market continues to be soft with limited visibility into H2'25 Organic growth -2to+1% (2024: €1 880m / -1%) Guidance range reflects macroeconomic uncertainty Adjusted EBITA 12.0-—13.0% (2024: €225m / 12.0%) Negative net impact of ~1.4 pp. on adj.
Slide 25: Strategic transformation towards software and digital engineering future
Strategic transformation towards software and digital engineering future 3 4 :) { r 3 ° ' | . 4 Market continues to be We continue to focus We plan to host CMD in soft with limited on resilience in all Q4 — more details to visibility businesses, while follow investing into future growth
Slide 26: Way forward
3. Way forward oe ee
Slide 27: Kimmo Alkio
O AIKIo do dre-Ra appDO CQO ad C President and CEO Kimmo Alkio has decided to step down after 14 years in the position The Board of Directors has appointed Endre Rangnes as interim CEO effective 5 May, 2025 Tietoevry's Board of Directors will initiate a global search for the permanent CEO position
Slide 28: Endre Rangnes has gained over two decades extensive leadership experience
Endre Rangnes has gained over two decades extensive leadership experience, including C-suite positions, in the technology sector 4, tietoeuy Endre Rangnes Born 1959 Nationality Norwegian Education Bachelor of Business Administration, Oslo Business School, and IBM Management & Executive Education (Br
Slide 29: Organic growth of -4% impacted by weak demand environment
Organic growth of -4% impacted by weak demand environment All figures for continuing operations IFRS5 unless otherwise stated Adjusted EBITA of 10.6% impacted by IFRS 5-related temporary cost burden of 1.8 pp. ik Strong cash flow and strengthened order backlog - important customer contracts in Banki