Slide 1: Tieto Q1 2016
Tieto Q1 2016 Healthy growth in IT services and continued profitability improvement 26 April 2016 Kimmo Alkio – President and CEO Lasse Heinonen – CFO Tanja Lounevirta – Head of IR
Slide 2: Q1 2016 in brief
Q1 2016 in brief Healthy growth in IT services and continued profitability improvement • Industry Products driving growth – in line with the ambition to expand software businesses • Product Development Services performing well • New strategy to accelerate innovation and growth launched 2 © Tieto Cor
Slide 3: Business mix shifting towards high-growth services
Business mix shifting towards high-growth services Tieto's growth ambition for IT services: Sales growth in Faster that the market** (CAGR) 2016–2020 (CAGR) Development in Q1 2016 Current high-growth businesses Industry solutions • ~EUR 75 million, 23% of Cloud and modernization IT services sales UP
Slide 4: Defined growth businesses drive growth
Defined growth businesses drive growth Additionally investments in a dynamic portfolio of over ten industry solutions Cloud Services Lifecare CEM Industrial Security Internet Services • Strong 72% growth • Growth of 6% • Sales up by 31% • Focus on several • Focus on • Investments in outpace the mark
Slide 5: Financial development
Financial development tieto
Slide 6: Q1 2016 key figures
Q1 2016 key figures MEUR % Net sales 13,0 500 14 • EUR 367 (366) million, +0.5%, growth of 1.4% in local currencies 11,5 • Acquisitions added EUR 16 million 12 400 13 • Divestments impacted EUR 2 million 3 1 16 10 • Currency EUR -3 million 8,4 5 8,6 • In IT services, sales growth 6.0%, or 7.0% in lo
Slide 7: Quarterly development
Quarterly development MEUR Net debt/EBITDA 1 500 400 3 1 13 0,4 5 16 0,5 300 0,1 200 0,0 100 362 363 330 382 352 0 0 -0,1 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 -0,5 -0,6 Net of divestement and acquisitions -1 Customer sales adjusted Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Employees Number of full-time employees and o
Slide 8: Growth in local currencies by Service Line and Industry Group
Growth in local currencies by Service Line and Industry Group 150 2% 3%/ -1%* 16%/ 6%* 125 -38% 100 Service 75 Q1/15 Lines 50 Q1/16 25 126 129 99 102 94 109 47 29 0 Managed Services Consulting and System Industry Products Product Development Integration Services 150 18%/ 7%* 125 6% 2% 100 -4% 75 Q1/
Slide 9: Service Lines
Service Lines Financial Manufacturing, Public, Telecom, Product Services Retail and Healthcare Media and Development Logistics and Welfare Energy Services Industry Products Consulting and System Integration Managed Services 9 © Tieto Corporation
Slide 10: Managed Services
Managed Services Customer sales in Q1 • EUR 129 (126) million, +2%, growth of 2% in local MEUR % currencies 150 16 13,8 13,0 EBIT 14 • EBIT EUR 10.8 (-8.3) million, 8.4% (-6.6) 12 • Adjusted EBIT* EUR 11.3 (4.6) million, 8.7% (3.6) 100 8,7 10 7,6 Q1 highlights 8 50 6 • Cloud sales up by 72% in Q1, r
Slide 11: Consulting and System Integration
Consulting and System Integration MEUR % Customer sales Q1 • EUR 102 (99) million, +3%, growth of 3% in local 150 10,8 12 10,3 currencies • Ogranic growth in local currencies -1% 8,6 10 1 EBIT 100 4 8 • EBIT EUR 5.6 (8.2) million, 5.5% (8.3) 5,9 6,8 • Adjusted EBIT* EUR 7.0 (10.8) million, 6.8% (10.
Slide 12: Industry Products
Industry Products Customer sales Q1 • EUR 107 (94) million, +13%, growth of 16% in local MEUR % currencies • Ogranic growth in local currencies 6% 150 25 21,4 18,7 20 EBIT 12 • EBIT EUR 13.8 (12.6) million, 13.0% (13.3) 13,4 • Adjusted EBIT* EUR 14.1 (12.7) million, 13.3% (13.4) 100 1 11 1 5 13,3 15
Slide 13: Product Development Services
Product Development Services Customer sales Q1 • EUR 29 (47) million, -37%, decline of 37% in local MEUR % currencies 100 16,0 14,0 EBIT 14,0 • EBIT EUR 2.6 (6.5) million, 9.0% (14.0) 12,0 • Adjusted EBIT* EUR 2.4 (6.5) million, 8.4% (14.0) 9,6 9,4 8,4 10,0 Q1 highlights 50 6,2 8,0 • Increased deman
Slide 14: Industry Groups
Industry Groups Product Financial Manufacturing, Public, Telecom, Development Services Retail and Healthcare Media and Services Logistics and Welfare Energy Industry Products Consulting and System Integration Managed Services 14 © Tieto Corporation
Slide 15: Financial Services
Financial Services Customer sales Q1 MEUR • EUR 88 (84) million, +5%, growth of 6% in local currencies 100 Sales split by service line 75 Q1/2016 Q1/2015 MS 45% 48% CSI 22% 21% 50 IP 33% 31% Q1 highlights 25 • Strong growth in Industry Products 84 88 83 92 88 • Strong performance in a number of solu
Slide 16: Manufacturing, Retail and Logistics
Manufacturing, Retail and Logistics Customer sales Q1 • EUR 79 (78) million, +2%, growth of 2 % in local MEUR currencies 100 Sales split by service line 75 2 1 1 3 Q1/2016 Q1/2015 1 MS 51% 51% CSI 41% 40% IP 8% 9% 50 Q1 highlights 25 • Sales affected by the acquisition of Smilehouse and Imano and th
Slide 17: Public, Healthcare and Welfare
Public, Healthcare and Welfare Customer sales Q1 MEUR • EUR 118(101) million, +17%, growth of 18% in local currencies 135 • Organic growth in local currencies 7% 12 120 11 Sales split by service line 105 4 90 Q1/2016 Q1/2015 75 MS 34% 36% CSI 22% 25% 60 IP 44% 39% 45 30 Q1 highlights 15 • Strong gro
Slide 18: Telecom, Media and Energy
Telecom, Media and Energy Customer sales Q1 MEUR • EUR 53 (57) million, -7%, decline of 4% in local currencies 100 Sales split by service line 75 Q1/2016 Q1/2015 MS 16% 17% CSI 49% 45% 50 1 IP 35% 38% Q1 highlights 25 • Sales were down as anticipated due to the expiry of some outsourcing contracts i
Slide 19: Performance drivers in 2016
Performance drivers in 2016 IT services • We aim to grow faster than the market, supported by acquisitions • Productivity gains carry to 2016 • Growth initiatives supported by recruitments and higher offering development • Anticipated restructuring less than 2% of sales Product Development Services
Slide 20: Strategy 2016–2020
Strategy 2016—2020 tieto
Slide 21: We are now positioned to accelerate innovation and growth
We are now positioned to accelerate innovation and growth Vertical industry insight, consulting, software and solutions 2016+ Expand businesses Full life-cycle IT services 2015 Growth businesses and Accelerate growth portfolio internal start-ups 2014 Reorienting the growth Industrialized ser
Slide 22: The market provides great opportunities for renewing our customers' business
The market provides great opportunities for renewing our customers’ business Key trends Co-innovate data- driven businesses Consumer expectations for on- demand, personalized services Demand for new services Ageing population and workforce imbalance Data-driven economy AGILE WORLD OF ENTERPRISES Opp
Slide 23: We aim to be our customers' first choice for business renewal
Tieto strategy 2016–2020 We aim to be our customers’ first choice for business renewal Services to accelerate Nordic leadership and Openness and customer value international expansion co-innovation Build solutions and capabilities Further accelerate our strong Co-innovate with customers to accelerat
Slide 24: Upgraded growth ambition while maintaining profitability focus and attractive dividend policy
Upgraded growth ambition – while maintaining profitability focus and attractive dividend policy Ambition 2020 IT services revenue growth above the market (CAGR) 10% reported operating The leading Nordic margin (EBIT) software and services company with the aim to Aim is to increase dividends be custo
Slide 25: Guidance for 2016
Guidance for 2016 Tieto expects its full-year adjusted operating profit*) (EBIT) to increase from the previous year’s level (EUR 150.8 million in 2015). Based on European Securities and Markets Authority (ESMA) regulation, Tieto will report adjusted operating profit in 2016 *) Adjusted for restructu
Slide 26: Q1 2016 in brief
Q1 2016 in brief Healthy growth in IT services and continued profitability improvement • Industry Products driving growth – in line with the ambition to expand software businesses • Product Development Services performing well • New strategy to accelerate innovation and growth launched 26 © Tieto Co
Slide 27: - tieto
- tieto