Tieto Corporation FINANCIAL STATEMENT RELEASE 6 February 2014, 8.00 am EET
The full interim report with tables is available at the end of this release
- A year of challenging demand closes with strong order intake
- Efficiency programme on track, causing high restructuring costs
- Increasing investments in selected growth businesses
Key figures for the fourth quarter
- Organically, net sales were down by 6.6%
- Outside the telecom sector, net sales were organically down by 3.5% (excluding currency effect -1.4%)
- Fourth-quarter operating profit excl. one-off items decreased to EUR 42.7 (44.2) million, margin increased to 10.2% (9.2)
Key figures for the full year
- Organically, net sales were down by 3.7%
- Outside the telecom sector, net sales were organically down by 0.7% (excluding currency effect -0.4%)
- Full-year operating profit excl. one-off items rose to EUR 143.8 (138.8) million, margin increased to 8.6% (7.6)
- Proposed dividend up by 8% to EUR 0.90 (0.83) per share, representing dividend yield of over 5%
| EUR million | 10–12/2013 | 10–12/2012 | 1–12/2013 | 1–12/2012 |
| Net sales, EUR million | 417.0 | 478.6 | 1 671.3 | 1 825.3 |
| Change, % | -12.9 | -2.3 | -8.4 | -0.2 |
| Organic change, % | -6.6 | -0.1 | -3.7 | 1.3 |
| Operating profit (EBITA), EUR million | 18.7 | -6.8 | 91.9 | 68.3 |
| Operating margin (EBITA), % | 4.5 | -1.4 | 5.5 | 3.8 |
| Operating profit (EBIT), EUR million | 17.8 | -7.8 | 88.2 | 63.0 |
| Operating margin (EBIT), % | 4.3 | -1.6 | 5.3 | 3.5 |
| Operating profit (EBIT) excl. one-off items1), EUR million | 42.7 | 44.2 | 143.8 | 138.8 |
| Operating margin (EBIT) excl. one-off items1), % | 10.2 | 9.2 | 8.6 | 7.6 |
| Profit after taxes, EUR million | 15.0 | -18.5 | 62.2 | 29.4 |
| EPS, EUR | 0.21 | -0.26 | 0.86 | 0.41 |
| Net cash flow from operations, EUR million | 63.7 | 60.6 | 153.8 | 161.9 |
| Return on equity, 12-month rolling, % | 12.0 | 5.5 | 12.0 | 5.5 |
| Return on capital employed, 12-month rolling, % | 17.3 | 13.2 | 17.3 | 13.2 |
| Investments, EUR million | 23.6 | 19.3 | 71.7 | 62.9 |
| Interest-bearing net debt, EUR million | 1.9 | 23.9 | 1.9 | 23.9 |
| Net debt/EBITDA | 0.0 | 0.2 | 0.0 | 0.2 |
| Book-to-bill | 1.4 | 1.5 | 1.1 | 1.1 |
| Order backlog | 1 624 | 1 703 | 1 624 | 1 703 |
| Personnel on 31 December | 14 699 | 16 537 | 14 699 | 16 537 |
1) Excl. capital gains, impairments and restructuring costs
Full-year outlook for 2014
Tieto expects its full-year operating profit (EBIT) excluding one-off items to increase from the previous year’s level (EUR 143.8 million in 2013).
CEO’s comment
Comment regarding the interim report by Kimmo Alkio, President and CEO:
"2013 was a challenging year, but our fourth-quarter order book was strong and profitability continued to improve. In the low-demand environment we decided to invest in our longer-term competitiveness in terms of both new service innovations and cost efficiency. This led to high restructuring costs but has strengthened Tieto’s position in the globally competitive environment.
We now look forward to focusing on higher-growth business opportunities. We will increase our investments in selected services, including customer experience management, healthcare solutions, early-stage investments in the industrial internet, and next generation cloud services. With these investments, we expect to increase the speed of our customers’ business transformation. Through our investments in growth businesses I look forward for Tieto to play a big role in new innovative services.”
Financial performance by service line
| EUR million | Customer sales 10–12/2013 | Customer sales 10–12/2012 | Change, % | Operating profit 10–12/2013 | Operating profit 10–12/2012 |
| Managed Services | 129 | 127 | 2 | -1.7 | 5.1 |
| Consulting and System Integration | 101 | 131 | -22 | -1.6 | 4.5 |
| Industry Products | 123 | 137 | -10 | 29.3 | 11.4 |
| Product Development Services | 63 | 84 | -24 | -1.3 | -23.9 |
| Support Functions and Global Management | -6.9 | -5.0 | |||
| Total | 417 | 479 | -13 | 17.8 | -7.8 |
Operating margin by service line
| % | Operating margin 10–12/2013 | Operating margin 10–12/2012 | Operating margin excl. one-off items1) 10–12/2013 | Operating margin excl. one-off items1) 10–12/2012 |
| Managed Services | -1.3 | 4.1 | 5.4 | 7.8 |
| Consulting and System Integration | -1.6 | 3.4 | 7.6 | 14.1 |
| Industry Products | 23.8 | 8.3 | 24.0 | 13.5 |
| Product Development Services | -2.0 | -28.6 | 4.2 | 2.8 |
| Total | 4.3 | -1.6 | 10.2 | 9.2 |
1) Excl. capital gains, impairments and restructuring costs
Customer sales by industry group
| EUR million | Customer sales 10–12/2013 | Customer sales 10–12/2012 | Change, % |
| Financial Services | 93 | 94 | -1 |
| Manufacturing, Retail and Logistics | 81 | 85 | -5 |
| Public, Healthcare and Welfare | 113 | 127 | -11 |
| Telecom, Media and Energy | 68 | 89 | -24 |
| Product Development Services | 63 | 84 | -24 |
| Total | 417 | 479 | -13 |
For further information, please contact:
Lasse Heinonen, CFO, tel. +358 2072 66329, +358 50 393 4950, lasse.heinonen (at) tieto.com
Tanja Lounevirta, Head of Investor Relations, tel +358 2072 71725, +358 50 321 7510, tanja.lounevirta (at) tieto.com
Press conference for analysts and media will be held at Tieto’s premises in Helsinki, address: Aku Korhosen tie 2-6, at 11.00 a.m. EET (10.00 a.m. CET, 9.00 a.m. UK time). The results will be presented in English by Kimmo Alkio, President and CEO, and Lasse Heinonen, CFO.
The conference will be webcasted and can be viewed live on Tieto's website. The meeting participants can also join a telephone conference that will be held at the same time. The telephone conference details can be found below.
Telephone conference numbers:
Finland: +358 (0)9 6937 9590
Sweden: +46 (0)8 5033 6538
UK: +44 (0)20 3427 1909
US: +1 212 444 0412
Conference code: 6359552
To ensure that you are connected to the conference call, please dial in a few minutes before the start of the press and analyst conference. There will also be a possibility to present questions online. An on-demand video will be available after the conference.
Tieto publishes financial information in English, Finnish and Swedish. The full interim report with tables is available only in English and Finnish.
TIETO CORPORATION
DISTRIBUTION
NASDAQ OMX Helsinki
NASDAQ OMX Stockholm
Principal Media
Tieto is the largest Nordic IT services company providing full life-cycle services for both the private and public sectors and product development services in the field of communications and embedded technologies. The company has global presence through its product development business and global delivery centres. Tieto is committed to developing enterprises and society through IT by realizing new opportunities in customers’ business transformation. At Tieto, we believe in professional development and results.
Founded 1968, headquartered in Helsinki, Finland and with approximately 15 000 experts, the company operates in over 20 countries with net sales of approximately EUR 1.7 billion. Tieto’s shares are listed on NASDAQ OMX in Helsinki and Stockholm. Please visit www.tieto.com for more information.
