Tieto Corporation · OMXHEX:TIETO
Tieto — Q3 2019 Earnings Presentation
20 slides from Tieto's earnings presentation, 2019
Slide 1: Q3 2019 Strong growth and profitability
Q3 2019 Strong growth and profitability Kimmo Alkio, President and CEO Tomi Hyryläinen, CFO Tanja Lounevirta, Head of IR
Slide 2: Q3 2019 in brief
Q3 2019 in brief Strong growth and profitability › Record-high third-quarter adjusted profit of EUR 50 million, margin at 13% › Growth of 5% in local currencies › Third-quarter profit driven by strong performance in all businesses, execution of efficiency improvement programme and positive working d
Slide 3: The Nordic IT market remains dynamic
The Nordic IT market remains dynamic Increasing investments for new Hybrid infrastructure and cloud as data-rich services and a foundation in customers’ differentiating experiences business continuity and renewal Uncertainty in macroeconomic Tieto expects the Nordic IT trends continue services marke
Slide 4: Q3 2019 key figures
Q3 2019 key figures Internal MEUR % Net sales up by 3.4% › EUR 379.6 (367.1) million 500 15 13,2 › Growth in local currencies 5% › Organic growth in local currencies 4% 400 9,3 12,1 10,0 9,0 8,4 10 300 11,7 Adjusted EBIT margin 13.2% (11.7%) 200 › EBIT EUR 37.8 (40.4) million, 10.0% (11.0%) 5 › Incl
Slide 5: Quarterly development
Quarterly development 2 Net debt/EBITDA MEUR Net sales 1,5 1,5 1,4 500 1,1 400 1,0 1,0 300 1 0,7 200 0,5 100 406 404 367 422 408 403 380 0,5 0 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 0 Customer sales Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Employees Number of full-time employees and offshore rat
Slide 6: Healthy development in a number of growth businesses
Healthy development in a number of growth businesses Growth1) in Q3 (YTD) Annual sales in 2018 Digital Experience › Customer Experience Management +9% (19%) ~ EUR 60 million Hybrid Infra › Cloud services +23% (11%) ~ EUR 125 million › Security services +14% (31%) ~ EUR 12 million Industry Software ›
Slide 7: Reporting segments
Reporting segments Primary reporting segments Internal Digital Industry Hybrid Infra Product Experience Software Development Services Finland Sweden Norway Other countries 7 © Tieto Corporation
Slide 8: Digital Experience
Digital Experience Internal Customer sales Q3 MEUR % › EUR 108 (106) million › Up by 2%, or 3% in local currencies 150 20 EBIT 13,7 14,5 › Adjusted1) EBIT EUR 15.6 (11.6) million, 14.5% (10.9) 12,8 15 100 10,9 Q3 highlights 14,6 14,9 › CEM growth 9% in local currencies 8,6 10 › Application Services
Slide 9: Hybrid Infra
Hybrid Infra Internal Customer sales in Q3 MEUR % › EUR 131 (124) million › Up by 6%, or 7% in local currencies 150 20 15,5 EBIT › Adjusted1) EBIT EUR 20.4 (15.5) million, 15.5% (12.5) 12,5 15 100 10,8 10,8 9,7 Q3 highlights 7,5 10 › Infrastructure cloud growth 23%, Security Services 14% in local cu
Slide 10: Industry Software
Industry Software Internal Customer sales Q3 MEUR % › EUR 107 (105) million › Up by 2%, 4% in local currencies 150 18,0 20 16,9 15,2 EBIT › Adjusted1) EBIT EUR 16.3 (17.7) million, 15.2% (16.9) 12,5 15 100 10,9 10,3 Q3 highlights › Strong growth in Payments and oil&gas solutions, up 7,5 10 by 9% and
Slide 11: Product Development Services
Product Development Services Internal Customer sales Q3 MEUR % › EUR 34 (32) million › Up by 5%, or 7% in local currencies 50 15 12,7 12,3 EBIT 9,9 10,1 › Adjusted1) EBIT EUR 3.2 (3.2) million, 9.6% (9.9) 9,6 8,7 10 7,9 Q3 highlights › Strong volume development with the largest key 25 customers with
Slide 12: Customer sales by country
Customer sales by country1) Finland country growth 3% Internal › Industry Software growth of 11% driven by Healthcare solutions › Strong demand for cloud services continued › Digital Experience affected by a large customer insourcing Sweden country growth 3% in local currencies › Growth driven by Hy
Slide 13: Performance drivers in 2019
Performance drivers in 2019 › Aim to grow faster than the market in local currencies › Productivity improvement measures, incl. automation, optimized subcontracting, offshoring, management of competence pyramid › Salary inflation over EUR 30 million › Operational simplification anticipated to result
Slide 14: Guidance for 2019 unchanged
Guidance for 2019 unchanged Internal › Tieto expects its full-year adjusted operating profit (EBIT) to 1) increase from the previous year’s level (EUR 168.0 million in 2018) added by the impact of IFRS 16 2) to maintain the comparability after the adoption of the new standard 1) adjusted for amortiz
Slide 15: Q3 2019 in brief
Q3 2019 in brief Strong growth and profitability › Record-high third-quarter adjusted profit of EUR 50 million, margin at 13% › Growth of 5% in local currencies › Third-quarter profit driven by strong performance in all businesses, execution of efficiency improvement programme and positive working d
Slide 16: Digital Advantage for Nordic Enterprises and Societies
Digital Advantage for Nordic Enterprises and Societies © Tieto Corporation
Slide 17: TietoEVRY merger drives significant value for shareholders
TietoEVRY merger drives significant value for shareholders Combined market opportunity larger than stand alone and combination positioned to grow Synergies provide attractive profit expansion – significant part materializing already within first twelve months Healthy cash flow anticipated to drive a
Slide 18: The new joint TietoEVRY Group Leadership
The new joint TietoEVRY Group Leadership Managing Partner Managing Partner Managing Partner Head of Digital Head of Head of Industry Head of Financial Norway Sweden Finland Consulting Cloud & Infra Software Services Christian Pedersen Karin Schreil Satu Kiiskinen Thomas Nordås Johan Torstensson Chri
Slide 19: Timeline for the merger
Timeline for the merger Integration planning started in August EVRY’s and Tieto’s EGM approved the merger on 2 and 3 September Group Leadership appointed on 16 October Closing expected in Q4 2019 or Q1 2020 at the latest (subject to obtaining necessary approvals by competition authorities) © Tieto C
Slide 20: - tieto
- tieto