Tieto Corporation · OMXHEX:TIETO
Tieto — TietoEVRY — Q4 2024 Earnings Presentation
24 slides from Tieto's earnings presentation, Feb 14, 2025
Slide 1: Soft market continued — strong cash flow
Q4 2024 Soft market continued — strong cash flow Kimmo Alkio, President and CEO Tomi Hyrylainen, CFO wiz tietoeucy
Slide 2: Q4 2024 key messages
Organic growth -7% — weaker market demand impacting all businesses Adjusted EBITA Strong operating of 12.8% — cash flow of EUR improved 128 million profitability in Tietoevry Care and Tietoevry Banking Resilient full-year profitability — increased dividend of EUR 1.50 (1.47) per share proposed Tieto
Slide 3: Market softness continues into 2025 = accelerating AI adoption
Market softness continues into 2025 = accelerating Aladoption- ~ <= ~~~ .> Market demand for IT Customer focus on Al market adoption Continued high services continues to efficiency — higher accelerating — most attention on be weak, lower emphasis on short- visible in demand for cybersecurity demand
Slide 4: Resilient overall performance and healthy cash flow in 2024
Resilient overall performance and healthy cash flow in 2024 ; orean * Adj. EBITA evenue rganic grow €345m €2 803m -2% 12.3% ’ (€2851) (+4%) 70 (€359m, 12.6%) Operating cash flow Oyelei betelslers Net debt / EBITDA €326m €3 261m 2.2x (€266m) aaron (2.2x) § Revenue impacted by soft market Solid profit
Slide 5: Our Sustainability Pledge — areas where we aim for significant impact
Our Sustainability Pledge — areas where we aim for significant impact Climate action Circular economy Diversity Responsible Al 87% reduction in GHG 96% (93) reuse and 34% (32) of female hires 97% completion rate of emissions since 2020 — recycling of devices for in 2024 — aim for 37% annual Responsi
Slide 6: Actively advancing with customers in data, cloud and AI-GenAI
Actively advancing with customers in data, cloud and Al-GenAl — Ah By gps Tietoevry Banking supports Bank Norwegian’s, a branch of NOBA Bank Group, strong growth in the Nordics and Europe with a comprehensive range of card services, including 24/7 fraud prevention and support services. Tactile MEDIC
Slide 7: AI adoption accelerating — most visible in data services and AI embedded software
Al adoption accelerating — most visible in data services and Al embedded software {} Key benefits of Al to businesses ENHANCE PRODUCTIVITY NEW PRODUCTS For Tietoevry Create intinue to expand - new contracts won in Europe and US, with significant customer business imps Framework for Al curity and Tie
Slide 8: Business highlights
Business highlights
Slide 9: Tietoevry Group
Tietoevry Group Soft market continued — strong cash flow Organic growth! Adj. EBITA2 fiers -7% "ont oo" 12. 8% “ond bao" (1%) (14.4%) €89m (108) Cash flow from operations ; Order backlog ft: €128m er | $2%' TE a Q4/23 Q1/24 Q2/24 Q3/24 Q4/24 (€153m) €3,261m (3,236) m Revenue, €m Adj. EBITA 4) Adjust
Slide 10: Tietoevry Create
Tietoevry Create Soft market impacting performance 229 15.0% Q4/23 4, tietoeuy 224 214 191 208 13.1% N4% 12.1% 11.2% Q1/24 Q2/24 Q3/24 Q4/24 Revenue, €m Adj. EBITA Organic growth “8% (1%) j. EBITA 11. 2*fo (15.0%) €23m (34) Highlights Soft market impacting overall demand - weak performance in Sweden
Slide 11: Tietoevry Banking
Tietoevry Banking High revenue comparable — stable profitability 150 14.3% Q4/23 4, tietoeuy 149 148 138 146 N9% 9.9% 13.3% 14.6% Q1/24 Q2/24 Q3/24 Q4/24 Revenue, €m Adj. EBITA Organic growth Highlights _ ? % * Norwegian bank merger impacting growth — (eo) impact ca. -4 pp. (5%) * Growth continued i
Slide 12: Tietoevry Care
Tietoevry Care Strong profitability — significant wins in Finnish healthcare market 61 30.1% Q4/23 4, tietoeuy 59 59 53 61 28.2% 26.2% 31.6% 32.1% Q1/24 Q2/24 Q3/24 Q4/24 Revenue, €m Adj. EBITA Organic growth O% (2%) j. EBITA 32.1% (30.1%) €20m (18) Highlights * Growth impacted by decline of legacy
Slide 13: Tietoevry Industry
Tietoevry Industry Weak quarter - one-time headwinds and pockets of market softness 69 16.6% Q4/23 4, tietoeuy 70 67 62 65 16.3% 15.1% 16.3% 12.1% Q1/24 Q2/24 Q3/24 Q4/24 Revenue, €m Adj. EBITA Organic growth 5% j. EBITA 12.1% (16.6%) €8m (11) Highlights Significant decline in pulp, paper & fibre in
Slide 14: Tietoevry Tech Services
Tietoevry Tech Services Resilient profitability in a soft market — healthy Cloud platforms and Security growth Organic growth Highlights -1 1 % + Negative revenue development impacted by (eo) volatility in HW/SW sales, impact-3 pp., and (-2%) by overall market softness — Cloud platforms & Security +
Slide 15: CFO report
CFO report
Slide 16: Soft market continued in Q4 — strong cash flow
Soft market continued in Q4 — strong cash flow ee |] Q4’24 financial update Revenue and growth * Organic growth of -7% impacted by soft market Revenue 699 752 Organic growth, % Th 1% — Ransomware-event related customer settlements impacting growth and profitability ~1 pp. as expected Acquisitions &
Slide 17: Q4 strong operating cash flow of €128m
Q4 strong operating cash flow of €128m * Cash flow from operations €128m (153) — Net working capital decrease of €44m, driven by seasonal increase in vacation accruals and accounts payable + Free cash flow* of €108m (125), supported by €13m from Buypass disposal + Healthy cash generation foundation
Slide 18: Active capacity management — LTM attrition continues to decline
Active capacity management — LTM attrition continues to decline * Continued decline of LTM attrition to 8.3% - reflecting soft market conditions * Cost management measures driving capacity reduction from Q3'24 Tietoevry Create capacity reduced by 200 FTEs Tietoevry Banking capacity reduced by 100 FT
Slide 19: Performance drivers — Q1'25
Performance drivers — Q1’'25 Growth drivers Q1 growth expected to be negative — driven by continued market softness * Tietoevry Create impacted by continued weak demand and reducing internal revenue with negative ~2 pp. on growth * Tietoevry Banking impacted by Norwegian bank merger — negative ~4 pp
Slide 20: Q1 profitability outlook
Q1 profitability outlook Q124 Business adj. EBITA% Profitability outlook Tietoevry Create 13.1% Below Q1'24 level Tietoevry Banking 11.9% Below Q1'24 level Tietoevry Care 28.2% Below Q1'24 level Tietoevry Industry 16.3% Below Q1'24 level Tietoevry Tech Services. 7.6% At Q124 level
Slide 21: Our way forward
Our way forward
Slide 22: Guidance for 2025
Guidance for 2025 Organic growth Adjusted EBITA -3to+1% | 12.0-—13.0% (2024: €2 803m / -2%) (2024: €345m / 12.3%) Weak market Guidance range High emphasis on Significant margin- conditions to reflects business resilience and dilutive mainframe continue into 2025 macroeconomic cost efficiency in alow
Slide 23: Growth dynamics 2025 — market recovery expected H2
Growth dynamics 2025 — market recovery expected H2 H1'25 H2'25 Dynamics to support H2 growth + US: indications of market recovery, new wins and increased order intake + Europe: 12% pipeline increase driven by Financial Services and Energy in the Nordics + H2 growth dependent on market conditions Cre
Slide 24: Exciting agenda to build the future in the AI enabled software and digital world
Exciting agenda to build the future in the Al enabled software and digital world Strategic transformation towards software and digital engineering future Continue to focus on resilience in all businesses, while investing into future growth Accelerate Al adoption towards all customer engagements, Al