Tieto Corporation · OMXHEX:TIETO
Tieto — TietoEVRY — Q2 2024 Earnings Presentation
22 slides from Tieto's earnings presentation, Jul 23, 2024
Slide 1: Steady performance in a mixed market
022024 «7°. Steady performance inamixed market Kimmo Alkio, President and CEO Tomi Hyrylainen, CFO Wiz tietoeucy
Slide 2: Organic growth of 1%
Organic growth of 1% driven by software businesses Improved profitability of 11% supported by Tietoevry Tech Services Strong customer wins and order intake — book-to-bill 1.3 Strategic review of Tietoevry Tech Services progressing — active sales process ongoing
Slide 3: Continued mixed market environment
Continued mixed market environment __ Soft IT services market expected to continue in H2 — while software market more stable #, tietoevry zs Customer attention focuses on resilience — impacting digital engineering investments Continued instability inthe geopolitical environment Al and cloud continue
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 tHetoeucy @.8 Tech Services Scalable managed services and transformation player ~ MULTI-YEAR STRATEGIC TRANSF
Slide 5: Exciting contract wins
Exciting contract wins visible as. st Handelsbanken BUSINESS FINLAND KAROLINSKA Handelsbanken Norway extends agreement for 5 years with Tietoevry Banking. Central to the new agreementis the migration to anew and modern core banking solution that is modular and based on high-level APIs that make it e
Slide 6: Continued focus on climate action, ethical conduct and social impact
Continued focus on climate action, ethical conduct and social impact — Tietoevry’s sustainability pledge FINANCIAL TIMES TIME ae @ fated. Cabinet tee aa at Tietoevry was recognized as one of The Unified Portal for Draft Legal Acts, created by Diversity and inclusion in focus: Europe’s Climate Leader
Slide 7: Business highlights
Business highlights
Slide 8: Tietoevry Group
Tietoevry Group Steady performance in a mixed market Organic growth! 1% “abe 17.0% (3%) (10.5%) €78m (73) Cash flow from operations Order backlog €68m “f° +2%' Q2/23 Q3/23. Q4/23 Q1/24 Q2/24 Adj. EBITA2 (€11m) ; €3,440m (3,350) m Revenue, €m Adj. EBITA 4) Adjusted for currency effects, acquisitions
Slide 9: Tietoevry Create
Tietoevry Create New operating model implemented enabling global scale 205 11.9% Q2/23 4, tietoery 196 11.0% Q3/23 229 224 15.0% 13.1% 04/23 Q1/24 Revenue, €m Adj. EBITA 214 1.4% Q2/24 Organic growth -2% (5%) j. EBITA 11. A% (11.9%) €24m (24) Highlights Mixed revenue development with growth in Finla
Slide 10: Tietoevry Banking
Tietoevry Banking Strong order intake 140 135 150 149 148 10.6% 13.3% 14.3% 11.9% 9.9% Q2/23, Q3/23, Q4/23.— Q1/24 = Q2/24 Revenue, €m Adj. EBITA 4, tietoery Organic growth 5% (1%) j. EBITA 9.9% (10.5%) €15m (15) Highlights * Solid growth in Cards, Financial Crime Prevention, Credit and Wealth * Sig
Slide 11: Tietoevry Care
Tietoevry Care Landmark win in Sweden with Lifecare Open Platform 58 29.1% Q2/23 4, tietoery 52 30.6% Q3/23 61 59 30.1% 28.2% 04/23 Q1/24 Revenue, €m Adj. EBITA By 26.2% Q2/24 Organic growth 1% (7%) j. EBITA 26. 2*o (29.1%) €15m (17) Highlights Growth continued to be impacted by health and social ca
Slide 12: Tietoevry Industry
Tietoevry Industry Consistent healthy performance Organic growth Highlights 5 % * Strong growth in Data Platforms 0 * New release of case management solution ) (4% Public 360° Online with embedded Al — significant win of Norwegian Labour and Welfare Administration * Healthy profitability Adj. EBITA
Slide 13: Tietoevry Tech Services
Tietoevry Tech Services Profitability improvement continued — solid order intake Organic growth Highlights _ 4 % * Growth impacted by continued market Oo softness and volatility in HW/SW sales (-5%) Cloud platforms & Security +17% Data & Application Services +1% Traditional infrastructure -5% End-us
Slide 14: CFO report
CFO report
Slide 15: Q2 return to growth with improved profitability
Q2 return to growth with improved profitability Q2'24 highlights Organic growth of 1% in a continued soft macroeconomic environment. Growth adjusted for working days -0.7% Strong order intake with 1.3 book-to-bill Healthy profitability of 11% supported by Tietoevry Tech Services profitability improv
Slide 16: Healthy Q2 cash generation of €68 million
Healthy Q2 cash generation of €68 million * Cash flow from operations €68m (11) + Net working capital decrease of €1m — seasonal headwind in working capital, offset by decrease in accounts receivable * Free cash flow* of €30m (-23) * Overall cash generation foundation remains healthy * Interest bear
Slide 17: Stable attrition — efficiency measures initiated in Q2
Stable attrition — efficiency measures initiated in Q2 + LTM attrition decreased to 9.0%. Quarterly attrition stable from Q1'24 to Q2’24. * Stable personnel capacity from Q1'24 to Q2’24 * Efficiency measures initiated to address current market environment * On8t May 2024 Tietoevry Tech Services anno
Slide 18: Increased visibility to financial impact of ransomware attack
Increased visibility to financial impact of ransomware attack On the night of January 19-20 one of Tietoevry's data centers in Sweden was partially hit by aransomware attack. Tietoevry sincerely regrets the challenges this criminal attack has caused to our customers, and to many entities and individ
Slide 19: Performance drivers — Q3'24
Performance drivers — Q3’24 Growth drivers Profit drivers Other drivers Continued soft economic environment impacting demand in Tietoevry Create and Tietoevry Tech Services Continued good momentum in Banking and Industry Accelerated growth in Care — while healthcare reform in Finland continues to im
Slide 20: Business Profitability outlook
Q3'23 Business Profitability outlook adj. EBITA % Tietoevry Create 1% At or below Q3'23 level Tietoevry Banking 13.3% At or above Q3'23 level Tietoevry Care 30.6% At or below Q3'23 level Tietoevry Industry 17.7% At Q3'23 level Tietoevry Tech Services 9.5% At or above Q3'23 level 4; tietoeuy
Slide 21: Our way forward
Our way forward
Slide 22: Way forward — Advancing specialization and AI driven value
Way forward — Advancing specialization and Al driven value Active strategic High focus on Conclude Be at the forefront of transformation resilience in the Tech Services delivering value towards software current market strategic review from Al and digital environment engineering future