Tieto Corporation · OMXHEX:TIETO
Tieto — Tietoevry — Q4 2023 Earnings Presentation
32 slides from Tieto's earnings presentation, February 2024
Slide 1: Resilient performance in a mixed market
Q4 2023 Resilient performance inamixed market Kimmo Alkio, President and CEO Tomi Hyrylainen, CFO ws tietoeucy .
Slide 2: Resilient performance in a mixed market
ina mixed + Growth 1% — solid underlying performance in software businesses continued Marke Healthy profitability of over 14% - supported by efficiency measures Strategic review of Banking — demerger proposed to list the business, retaining optionality for other alternatives - sales process ongoing
Slide 3: Firm execution of strategy continues — specialization in the core
Firm execution of strategy continues — specialization in the core Cloud, data and software Shareholder value acceleration Specialized Strategic businesses reviews -ssceege All businesses continue their path to aim to be amongst the best in the market Repositioning Tietoevry as a leading software and
Slide 4: Continued soft macroeconomic environment
Continued soft macroeconomic “ environment — e an Sve Continued softness High attention on Geopolitical Cloud and Al in IT market demand resilience — both for environment enabled into 2024 our customers and continues to be technologies in our own fragile -continued continue to advance operations sup
Slide 5: Solid year in a weakening economic environment
Solid year in a weakening economic environment Adj. EBITA . . Revenue Organic growth * Solid performance in €2851 4% €359m, software businesses, m 9 12.6% while Create and Tech (€2928m) (6%) . Services impacted by (€379m, 13.0%) “s softer market aaet * Performance resilience Operating cash flow Orde
Slide 6: Recent exciting customer engagements
Recent exciting customer engagements Digital engineering > GASSCO Tietoevry Create developing the next generation of solutions essential for handling the European energy supply intel Tietoevry Create and Intel advanced Al demo proving energy savings in Telecom Mobile Networks - introducing 1% time A
Slide 7: Tietoevry Sustainability Game Plan 2020–2023 – sustainable performance delivered
Tietoevry Sustainability Game Plan 2020–2023 – sustainable performance delivered 84% emission reduction in 99% carbon-free electricity 31% of women in the High employee engagement scope 1 and 2 GHG emissions in all data centres and offices workforce globally score: 82 for two consecutive compared to
Slide 8: Criminal ransomware attack on datacenter in Sweden
he crimi en night All hands on the deck recovering fr attack on one of our datacenters in S Customer impact + Attack impacted customers across industries and consequently more broadly the Swedish society * Tietoevry sincerely regrets the inconvenience caused by the ransomware attack * 24/7 restorati
Slide 9: Business highlights
Business highlights ee
Slide 10: Tietoevry Group
Tietoevry Group Resilient performance in a mixed market Organic growth! Adj. EBITA2 1% “abe 14% | (9%) (15.4%) €108m (118) Cash flow from operations : Order backlog . €153m er | O%' Q4/22 Q1/23 Q2/23 Q3/23 Q4/23 (€166m) €3 236m (3 327) m Revenue, €m Adj. EBITA 1) Adjusted for currency effects, acqui
Slide 11: Tietoevry Create
Tietoevry Create Growth impacted by lower demand 220 223 205 196 16.0% 15.3% 11.8% 11.1% Q4/22 Q1/23.—-Q2/23.-Q3/23 Revenue, €m Adj. EBITA 229 15.0% Q4/23 Organic growth 1% (1%) j. EBITA 15. 0% (16.0%) €34m (35) Highlights * Growth impacted by weak economic environment and low demand, particularly f
Slide 12: Tietoevry Banking
Tietoevry Banking Continued strong underlying growth 156 142 140 135 17.8% 10.3% 10.6% 13.3% Q4/22 = Q1/23 = Q2/23. 3/23 Revenue, €m Adj. EBITA 150 14.3% Q4/23 Organic growth Do j. EBITA 14. Sh (17.8%) €21m (28) Highlights Strong growth in Cards, Wealth and Financial Crime Prevention Underlying grow
Slide 13: Tietoevry Care
Tietoevry Care Consistent strong profitability 63 63 59 52 32.2% 30.2% 28.9% 30.4% Q4/22 Q1/23.—-Q2/23.-Q3/23 Revenue, €m Adj. EBITA 62 30.1% Q4/23 Organic growth 2% (14%) j. EBITA 30.1% (32.2%) €19m (20) Highlights * Continued solid growth in Welfare and Data & Analytics * Temporary demand reductio
Slide 14: Tietoevry Industry
Tietoevry Industry Healthy performance continued Organic growth Highlights 6 % * Strong growth in Pulp & Paper and Data ° Platforms ) (3% * Healthy profitability supported by strong growth — lower year-end licence sales impacting profitability * Carsten Henke started as Managing Director Adj. EBITA
Slide 15: Tietoevry Tech Services
Tietoevry Tech Services Solid profitability Organic growth Highlights _ 3 % * Market slowdown visible in short-cycle time (eo) and material work, impacting especially Data & Application Services Cloud platform & Security +2% 298 289 266 243 277 Data & Application Services -8% Traditional infrastruct
Slide 16: CFO report
CFO report oe a
Slide 17: Q4'23 financials — lower growth while healthy profitability
Q4'23 financials — lower growth while healthy profitability 04'23 highlights Organic growth of 1% in a mixed market. Underlying growth 2% - 0.3 fewer working days compared to Q4’22. Reported growth impacted by significant FX headwind of €43m, mainly due to depreciation of NOK and SEK Profitability h
Slide 18: Seasonally strong Q4 cash flow
Seasonally strong Q4 cash flow * Cash flow from operations €153m (166) — Supported by healthy profitability — Seasonal net working capital decrease of €28m ° Free cash flow* of €125m (127) * Cash generation foundation remains healthy * Interest bearing net debt €912m, down from €954m in Q3'23 + Net
Slide 19: Personnel decrease driven by efficiency measures
Personnel decrease driven by efficiency measures Attrition 14.4 13.5 12.5, 10.8 104 % last twelve : + LTMattrition further decreasing to 10.1% - normal months ° (voluntary) level 10-12% Q4 22 Q123 Q2 23 Q3 23 Q4 23 + Net personnel decrease of ca. 400 from Q3’23 — 34539 mainly driven by efficiency me
Slide 20: Performance drivers — Q1'24
Performance drivers — Q1'24 Q1 growth rate expected to be the lowest of the quarters in 2024: * Continued weaker economic environment impacting demand in Tietoevry Create and Tech Services Growth drivers * Tietoevry Create growth impacted by strong comparable and negative working day impact * Contin
Slide 21: Q1 profitability outlook
Q1 profitability outlook Q123 Business adj. EBITA % Profitability outlook Tietoevry Create 15.3% Below Q1’23 level Tietoevry Banking 10.3% Above Q1’'23 level Tietoevry Care 30.4% Below the Q1'23 level Tietoevry Industry 17.2% At the Q123 level Tietoevry Tech Services 7.3% At the Q123 level
Slide 22: Our way forward
Our way forward oe ee
Slide 23: Guidance for 2024
Guidance for 2024 Organic growth Adjusted EBITA 0-3% 12.0-13.0% (2023: € 2 851m / 4%) (2023: 12.6%) We expect our Overall market Organic growth Guidance range addressable market softness expected normalizing after Q1 - reflecting to grow 0-2% in to continue in H1— Q1 impacted by high macroeconomic 2
Slide 24: Way forward — Advance strategic agenda and drive for business resilience
Way forward — Advance strategic agenda and drive for business resilience All businesses continue to drive their specialization agenda to be among the best in the market Tietoevry Banking and Tietoevry Tech Services strategic reviews continue with high momentum Actively capture opportunities in the A
Slide 25: Strategic review update
Strategic review ge update
Slide 26: Disclaimer
Disclaimer This presentation does not constitute a notice to convene a general meeting of shareholders nor does it constitute a demerger or listing prospectus. Any decision with respect to the proposed partial demerger of Tietoevry Corporation should be made solely on the basis of information to be
Slide 27: Tietoevry Banking demerger proposed in Feb 2024 — Tech Services review progressing
Tietoevry Banking demerger proposed on 15 Feb 2024 — Tietoevry Tech Services strategic review progressing as planned TIETOEVRY BANKING STRATEGIC REVIEW Strategic review announced 22 Jul'22 TIETOEVRY TECH SERVICES STRATEGIC REVIEW Strategic review announced 30 Nov'22 Go-live with integrated business
Slide 28: Tietoevry's Board proposes to separate Tietoevry Banking through a demerger
Tietoevry'’s Board proposes to separate Tietoevry Banking through a demerger + Following the strategic review of the Banking business announced on 22 July 2022, the Board of Directors of Tietoevry has decided to continue the separation process of Tietoevry Banking and has approved a demerger plan *
Slide 29: Clear rationale for Tietoevry Banking to operate standalone
Clear rationale for Tietoevry Banking to operate standalone and focus on its strategic priorities Positioning with , Global fintech specific customers as a fintech talent attraction software company 8 Valued in line with Build own investments fintech peer group for growth and scale @) Accelerating p
Slide 30: Tietoevry Banking is a leading SaaS provider for the financial services sector
Tietoevry Banking is a leading SaaS provider for the financial services sector in the Nordics and beyond Strong market presence = RO 000 cnn 400+ #1 Customers in 3,500 Aleading Nordic banking software 64 Employees globally provider across the value chain (FTEs Dec 2023) countries Accomplished scale
Slide 31: Competitive and comprehensive product portfolio
Competitive and comprehensive product portfolio addressing customer needs across markets Products. description and share or revenues Market presence Key facts Pa 3 Full suite of payments software to enable real-time ©) >200 economy Customers Global Full value chain of modern card services and ATM il
Slide 32: Timeline to complete the demerger and listing
Timeline to complete the demerger and listing Preliminary timeline Target 15 Feb 2024 March 2024 May 2024 Jun 2024 30 Jun 2024 Demerger plan Bond consent solicitation Prospectus with more Extraordinary Demerger announced launched — supplementary detailed information General Meeting effective financi