Tieto Corporation · OMXHEX:TIETO
Tieto — Q1 2018 Earnings Presentation
22 slides from Tieto's earnings presentation, Apr 26, 2018
Slide 1: Q1 2018 Strong start for 2018
Public Q1 2018 Strong start for 2018 Kimmo Alkio, President and CEO Lasse Heinonen, CFO Tanja Lounevirta, Head of IR 26 April 2018 © Tieto Corporation
Slide 2: Q1 2018 in brief
Q1 2018 in brief Strong start for 2018 › Growth in local currencies 6%, organically 3% › Strong profitability in Technology Services and Modernization and Product Development Services › Industry Solutions renewal progressing – investments continue › Order backlog supports the growth ambitions for 20
Slide 3: Outlook in the Nordic IT market remains healthy
Outlook in the Nordic IT market remains healthy › Solid economic outlook continues to support IT market › Current currency trend unfavorable for Tieto › Tieto expects the Nordic IT services market to grow by ~2% in 2018
Slide 4: Market drivers in the data-driven world
Market drivers in the data-driven world › Design-led services › Advanced analytics/AI New › Software driven › Ecosystems businesses and innovation Mahdollisuuksia › Cyber security, DevOps, SIAM Agility and efficiency › Cloud › Business process optimization › Technology modernization › Robotics proce
Slide 5: Business mix change driven by growth businesses and application services
Business mix change driven by growth businesses and application services* Public WE AIM TO GROW FASTER THAN THE MARKET* SHARE OF IT SERVICES Q1/2018 GROWTH Q1/2018 39% Growth 9% businesses** EMERGING SERVICES Other services and 19% solutions*** 17% TRADITIONAL SERVICES 2015 2020 42% Traditional serv
Slide 6: Enhanced solution portfolio to drive growth
Enhanced solution portfolio to drive growth Up by 9% in local currencies Customer Experience Data-Driven Businesses Cloud services Security services Management +12% +34% +23% -2% Selected industry solutions +5% Hydrocarbon Lifecare Credit solutions Production excellence management Payments Case mana
Slide 7: Q1 2018 key figures
Q1 2018 key figures MEUR % 500 14 Net sales up by 3.4% 12,0 11,6 › EUR 406.3 (393.1) million 12 2 › Growth in local currencies 6% 400 1 2 13 › Organic growth in local currencies 3% 9,0 9,2 1 9,0 10 300 8 EBIT margin 9.2% (5.6%) 200 6 › EBIT EUR 37.3 (22.0) million › Adjusted* EBIT EUR 36.6 (35.6) mi
Slide 8: Quarterly development
Quarterly development Net sales 1,5 Net debt/EBITDA MEUR 500 13 400 1 2 1 2 300 1 0,9 200 0,8 0,8 100 392 384 354 408 393 0 0,5 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 0,5 0,2 Net of divestment and acquisitions Customer sales adjusted 0 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Employees Number of full-time employees and
Slide 9: 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 10: Technology Services and Modernization
Technology Services and Modernization Customer sales in Q1 MEUR % › EUR 199 (198) million, +1%, or +3% in local currencies 250 16 13,8 13,2 11,9 11,6 14 EBIT 200 10,9 › Adjusted* EBIT EUR 23.1 (21.6) million, 11.6% (10.9) 12 150 10 Q1 highlights 8 › Growth (in local currencies) driven by infrastruct
Slide 11: Business Consulting and Implementation
Business Consulting and Implementation Customer sales Q1 MEUR › EUR 50 (39) million, +28%, or +31% in local currencies % › Organic growth in local currencies -3% 50 7,1 8 13 7 EBIT 40 4 › Adjusted* EBIT EUR 2.8 (2.8) million, 5.5% (7.1) 5,5 6 4,8 30 4,0 5 Q1 highlights › Growth supported by the acqu
Slide 12: Industry Solutions
Industry Solutions Customer sales Q1 MEUR % › EUR 123 (124) million, -1%, or +3% in local currencies 150 15,8 18 EBIT 14,4 1 16 › Adjusted* EBIT EUR 9.4 (9.9) million, 7.6% (8.0) 1 1 14 1 Q1 highlights 100 12 › Good growth in SmartUtilities, Production Excellence and 9,0 10 8,0 7,6 Case Management 8
Slide 13: Product Development Services
Product Development Services Customer sales Q1 MEUR % › EUR 34 (32) million, +7%, or +11% in local 40 16 currencies 13,6 35 12,7 14 EBIT 30 12 10,3 › Adjusted* EBIT EUR 4.3 (4.3) million, 12.7% (13.6) 25 8,3 10 Q1 highlights 7,5 20 8 › Strong volume development with the largest key customers and goo
Slide 14: 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 15: Financial Services
Financial Services Customer sales Q1 MEUR › EUR 96 (96) million, at Q1/2017 level, +3% in local currencies 100 1 Sales split by service line 75 Q1/2018 Q1/2017 TSM 58% 57% BCI 6% 5% 50 IS 36% 38% Q1 highlights 25 › Good development in TSM, especially in cloud-based platform services, volume growth a
Slide 16: Public, Healthcare and Welfare
Public, Healthcare and Welfare Customer sales Q1 › EUR 133 (128) million, +4%, or +7% in local currencies MEUR 150 Sales split by service line 2 125 Q1/2018 Q1/2017 TSM 47% 47% 100 BCI 9% 8% IS 44% 45% 75 Q1 highlights 50 › Development strongest in Technology Services and Modernization, driven by cl
Slide 17: Industrial and Consumer Services
Industrial and Consumer Services Customer sales Q1 MEUR › EUR 143 (138) million, +4%, or +6% in local currencies 175 › Organically, sales in local currencies at Q1/2017 level 150 1 1 10 Sales split by service line 125 2 1 Q1/2018 Q1/2017 100 TSM 56% 60% BCI 22% 17% 75 IS 22% 23% 50 Q1 highlights 25
Slide 18: Way forward
Way forward tieto
Slide 19: Performance drivers
Performance drivers 2018 – IT services › We aim to grow faster than the market › Based on current rates, currency impact on is ~EUR 37 million and on profit ~EUR 8 million › Efficiency programme: drive for productivity continues › Offering development costs around 5% of Group sales › Restructuring c
Slide 20: 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 21: 2018 – strong start for the year
2018 – strong start for the year Public Market Employees Shareholders Dynamic Celebrating Value creation and data-driven world Tieto50 sustainability © Tieto Corporation
Slide 22: - tieto
- tieto