The full interim report with tables is available at the end of this release
- Healthy order flow – significant contracts won in key industries
- Weak telecom sector and divestments result in revenue decline – small organic growth in the rest of the business
- Delivering on earlier announced cost savings, additional actions initiated in Consulting and System Integration
Key figures
- Organically, net sales were down by 3% in the second quarter – outside the telecom sector net sales were up by 1%
- Operating profit excl. one-off items rose by 9% to EUR 31.3 (28.6) million
| EUR million | 4-6/2013 | 4-6/2012 | 1-6/2013 | 1-6/2012 |
| Net sales, EUR million | 436.2 | 456.1 | 881.0 | 923.2 |
| Change, % | -4 | -1 | -5 | 0 |
| Organic change, % | -3 | 0 | -2 | 1 |
| Operating profit (EBITA), EUR million | 16.3 | -1.9 | 47.4 | 41.7 |
| Operating margin (EBITA), % | 3.7 | -0.4 | 5.4 | 4.5 |
| Operating profit (EBIT), EUR million | 15.5 | -3.3 | 45.6 | 38.8 |
| Operating margin (EBIT), % | 3.6 | -0.7 | 5.2 | 4.2 |
| Operating profit (EBIT) excl. one-off items 1) , EUR million | 31.3 | 28.6 | 63.3 | 57.0 |
| Operating margin (EBIT) excl. one-off items 1) , % | 7.2 | 6.3 | 7.2 | 6.2 |
| Profit after taxes, EUR million | 7.4 | -6.8 | 28.8 | 25.2 |
| EPS, EUR | 0.10 | -0.10 | 0.40 | 0.35 |
| Net cash flow from operations, EUR million | 10.0 | -3.8 | 51.2 | 65.0 |
| Return on equity, 12-month rolling, % | 6.6 | 11.7 | 6.6 | 11.7 |
| Return on capital employed, 12-month rolling, % | 13.9 | 18.2 | 13.9 | 18.2 |
| Investments, EUR million | 15.3 | 13.6 | 32.6 | 28.0 |
| Interest-bearing net debt, EUR million | 71.5 | 80.0 | 71.5 | 80.0 |
| Net debt/EBITDA | 0.4 | 0.5 | 0.4 | 0.5 |
| Book-to-bill | 1.2 | 1.2 | 1.0 | 1.1 |
| Order backlog | 1 584 | 1 769 | 1 584 | 1 769 |
| Personnel on 30 June | 15 447 | 17 723 | 15 447 | 17 723 |
1) Excl. capital gains, impairments and restructuring costs
Full-year outlook for 2013 unchanged
Tieto expects its organic net sales to develop in line with the growth in the market for IT services, with the exception of the weaker outlook in the telecom sector.
Tieto expects its profitability to continue to improve and full-year operating profit (EBIT) excluding one-off items to increase from the previous year’s level (EUR 138.8 million in 2012).
CEO’s comment
Comment regarding the interim report by Kimmo Alkio, President and CEO:
“Despite the challenging macroeconomic environment, we are pleased to have delivered a 9% improvement in underlying profit and won a number of significant contracts during the second quarter.
Tieto is in a good position to support both large enterprises and the public sector in achieving their rapidly changing business needs. We are actively contributing to our customers’ success by applying new technologies such as cloud services which have now delivered double-digit growth through engagements concluded this year.
During the quarter, we completed our divestment in Germany and the Netherlands, driving a more focused and simplified company as defined in our strategy. In IT services, our focus is on the Nordic region to support our customers’ business transformations, while Product Development Services pursues global customer expansion in accordance with its renewed strategy.
In addition to innovation, price competitiveness continues to be a high priority. Streamlining of the company has proceeded as planned and improved Tieto’s cost position. However, efficiency improvements will remain on our agenda to ensure competitiveness and profitability.”
Financial performance by service line
| EUR million | Customer sales 4–6/2013 | Customer sales 4–6/2012 | Change, % | Operating profit 4–6/2013 | Operating profit 4–6/2012 |
| Managed Services | 128 | 121 | 6 | 5.2 | -3.7 |
| Consulting and System Integration | 107 | 125 | -14 | 2.8 | 3.9 |
| Industry Products | 121 | 127 | -5 | 15.8 | 8.4 |
| Product Development Services | 79 | 83 | -5 | -2.6 | -3.9 |
| Steering Functions and Global Management | -5.6 | -8.0 | |||
| Total | 436 | 456 | -4 | 15.5 | -3.3 |
Operating margin by service line
| % | Operating margin 4–6/2013 | Operating margin 4–6/2012 | Operating margin excl. one-off items 1) 4–6/2013 | Operating margin excl. one-off items 1) 4–6/2012 |
| Managed Services | 4.0 | -3.1 | 4.3 | 5.9 |
| Consulting and System Integration | 2.6 | 3.1 | 8.9 | 9.0 |
| Industry Products | 13.0 | 6.6 | 14.0 | 9.9 |
| Product Development Services | -3.4 | -4.7 | 2.6 | 2.6 |
| Total | 3.6 | -0.7 | 7.2 | 6.3 |
1) Excl. capital gains, impairments and restructuring costs
Customer sales by industry group
| EUR million | Customer sales 4–6/2013 | Customer sales 4–6/2012 | Change, % |
| Financial Services | 97 | 92 | 5 |
| Manufacturing, Retail and Logistics | 78 | 81 | -3 |
| Public, Healthcare and Welfare | 109 | 110 | -1 |
| Telecom, Media and Energy | 74 | 91 | -19 |
| Product Development Services | 79 | 83 | -5 |
| Total | 436 | 456 | -4 |
For further information, please contact: Lasse Heinonen, CFO, tel. +358 2072 66329, +358 50 393 4950, lasse.heinonen (at) tieto.com Pellervo Hämäläinen, Vice President, Communications and IR, tel. +358 2072 52729 , +358 40 674 5257 , pellervo.hamalainen (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, at 11.00 am EET (10.00 am CET, 9.00 am 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 published live on Tieto's website www.tieto.com /investors and there will 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. As from the first quarter of 2013, 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 private and public sectors. The company has global presence through its product engineering business and the global delivery centers. Tieto is committed to develop 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 at approximately EUR 1.8 billion. Tieto's shares are listed on NASDAQ OMX in Helsinki and Stockholm. Please visit www.tieto.com for more information.
Tieto Corporation Business ID: 0101138-5
Aku Korhosen tie 2?6 PO Box 38 FI-00441 HELSINKI, FINLAND Tel +358 207 2010 Registered office: Helsinki
E-mail: ir (at) tieto.com www.tieto.com
