Tieto's Interim Report 4/2016 - Year of Increased Investments Ends With Solid Performance

News provided by

Tieto

02 Feb, 2017, 10:40 GMT

HELSINKI, Feb 02, 2017 /PRNewswire/ --

  • Strong order intake with fourth-quarter book-to-bill 1.5
  • Sales growth 2% in the fourth quarter, IT services up by 3%
  • Adjusted operating margin over 12%
  • Increased competitiveness driven by investments, continued automation and efficiency programme
  • Dividend of EUR 1.37 proposed

The full interim report with tables is available at the end of this release

Key figures for the fourth quarter

IT services

  • Sales growth totalled 2.7%, sales in local currencies up by 3.9%
  • Adjusted operating profit amounted to EUR 45.9 (48.6) million, 12.3% (13.4) of sales

The Group

  • Sales growth totalled 2.0%, sales in local currencies up by 3.5%
  • Adjusted operating profit amounted to EUR 49.5 (51.4) million, 12.3% (13.0) of sales
  • Order intake (Total Contract Value) at EUR 613 (641) million, order backlog at EUR 1 847 (2 030) million – book-to-bill 1.5

Key figures for the full year

IT services

  • Sales growth totalled 4.3%, sales in local currencies up by 5.3%
  • Adjusted operating profit amounted to EUR 141.1 (136.4) million, 10.3% (10.3) of sales

The Group

  • Sales growth totalled 2.2%, sales in local currencies up by 3.2%
  • Adjusted operating profit amounted to EUR 152.2 (150.8) million, 10.2% (10.3) of sales
  • Proposed dividend EUR 1.37 per share, including base dividend of EUR 1.15 (1.10) and an additional dividend of EUR 0.22 (0.25), representing dividend yield of 5.3%

10–12/
2016

10–12/
2015

1–12/
2016

1–12/
2015



 

Net sales, EUR million

403.6

395.6

1 492.6

1 460.1



Change, %

2.0

-1.8

2.2

-4.1



 

Change in local currencies, %

3.5

-2.9

3.2

-2.6



 

Operating profit (EBITA), EUR million(1)

49.0

50.1

154.9

138.0



 

Operating margin (EBITA), %

12.1

12.7

10.4

9.5



 

Operating profit (EBIT), EUR million(2)

45.1

46.8

140.8

125.2



 

Operating margin (EBIT), %

11.2

11.8

9.4

8.6



 

Adjusted(2) (3) operating profit (EBIT), EUR million

49.5

51.4

152.2

150.8



 

Adjusted(2) operating margin (EBIT), %

12.3

13.0

10.2

10.3



 

Profit after taxes, EUR million

34.2

34.4

107.2

90.5



 

EPS, EUR

0.46

0.47

1.46

1.23



 

Net cash flow from operations, EUR million

50.2

67.1

97.2

132.6



 

Return on equity, 12-month rolling, %

22.1

19.0

22.1

19.0



 

Return on capital employed, 12-month rolling, %

21.6

20.4

21.6

20.4



 

Capital expenditure and acquisitions, EUR million

24.7

32.7

99.2

136.7



 

Interest-bearing net debt, EUR million

109.7

13.2

109.7

13.2



 

Net debt/EBITDA

0.6

0.1

0.6

0.1



 

Book-to-bill

1.5

1.6

1.1

1.3



 

Order backlog

1 847

2 030

1 847

2 030



 

Personnel on 31 December  

13 876

13 083

13 876

13 083

1) amortization of all intangible items; previously, only acquisition-related intangible items
2) includes EUR 3.3 (1.2) million in allocated acquisition-based amortization in the full year, EUR 1.1 (0.6) million in the fourth quarter
3) adjusted for restructuring costs, capital gains/losses, goodwill impairment charges and other items

Full-year outlook for 2017

Tieto expects its adjusted(1) full-year operating profit (EBIT) to increase from the previous year's level (EUR 152.2 million in 2016).

1) adjusted for restructuring costs, capital gains/losses, goodwill impairment charges and other items

CEO's comment

Comment regarding the interim report by Kimmo Alkio, President and CEO:
"We are pleased to be back to growth and to have ended the year with solid performance also in terms of order intake and profitability. While our total revenues for the full year grew by 2% – and by 4% in IT services – our aim is to grow faster, which is supported by our investments in new services and technologies.

The IT software and services industry is continuing to undergo significant change globally, which requires a simultaneous focus on future innovation and constant productivity improvement in our operations. For example, we have increased investments in our software products, start-ups and new data-driven businesses based on artificial intelligence. To enable continued investments in innovation and growth, we have also decided to take further actions to drive our competitiveness by continuing to step up automation and growing our less labour-intensive solutions.

In this rapidly changing world of digitalization, the required skills and competences are evolving fast. We encourage all our employees to pursue personal development and actively support everyone to acquire new skills that fit the market demands. With this in mind we have recently launched a "Learning as a Lifestyle" initiative for all employees to provide insights on emerging skills and technologies in the areas of Advanced Analytics, Design Thinking and DevOps for agile development.

We are excited about the opportunities the world of digitalization brings to society and our customers, business and employees. With this in mind, we are looking forward to another exciting year in our continuous renewal and expansion."  

Financial performance by service line




 

EUR million

Customer
sales
10–12/
2016

Customer
sales
10–12/
2015

Change, %

Operating
profit
10–12/
2016

Operating
profit
10–12/
2015



 

Technology Services and Modernization

197

196

1

26.2

30.3



 

Business Consulting and Implementation

38

34

10

2.0

1.3



 

Industry Solutions

138

132

4

19.7

20.8



 

Product Development Services

31

33

-5

3.3

2.8



 

Support Functions and Global Management


-6.2

-8.3



 

Total

404

396

2

45.1

46.8

Operating margin by service line

 

%

 

Operating
margin
10–12/
2016

Operating
margin
10–12/
2015

Adjusted(1)
operating
margin
10–12/
2016

Adjusted(1)
operating
margin
10–12/
2015



 

Technology Services and Modernization

13.3

15.5

14.1

15.8



 

Business Consulting and Implementation

5.3

3.7

1.8

5.7



 

Industry Solutions

14.3

15.7

15.5

16.2



 

Product Development Services

10.6

8.4

11.3

9.4



 

Total

11.2

11.8

12.3

13.0

1) adjusted for restructuring costs, capital gains/losses, goodwill impairment charges and other items

Customer sales by industry group




 

EUR million

Customer sales
10–12/
2016

Customer sales
10–12/
2015

Change, %



 

Financial Services

101

92

10



 

Public, Healthcare and Welfare

135

133

1



 

Industrial and Consumer Services

137

137

0



 

IT services

373

363

3



 

Product Development Services

31

33

-5



 

Total

404

396

2

M&A impact by service line

Growth, %
(in local currencies)
10–12/
2016

Organic growth, %
(in local currencies)
10–12/
2016



 

Technology Services and Modernization

2.2

2.2



 

Business Consulting and Implementation

11.9

2.0



 

Industry Solutions

5.0

1.2



 

IT services

3.9

1.6



 

Product Development Services

-0.9

-0.9



 

Total

3.5

1.4

M&A impact by industry group

Growth, %
(in local currencies)
10–12/
2016

Organic growth, %
(in local currencies)
10–12/
2016



 

Financial Services

11.0

5.6



 

Public, Healthcare and Welfare

2.6

2.4



 

Industrial and Consumer Services

0.2

-2.0



 

IT services

3.9

1.6



 

Product Development Services

-0.9

-0.9



 

Total

3.5

1.4

For further information, please contact:

Lasse Heinonen,
CFO, 
tel.+358-2072-66329 or +358-50-393-4950, 
E-mail: lasse.heinonen (at) tieto.com

Tanja Lounevirta,
Head of Investor Relations, 
Tel.+358-2072-71725 or +358-50-321-7510,
E-mail: tanja.lounevirta (at) tieto.com

Press conference for analysts and media will be held at Tieto's premises in Espoo, address: Keilalahdentie 2, on 2 February 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 can be viewed live on Tieto's website. To join the conference, attendees need Adobe Flash plugin version 10.1.0 or newer. 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 7479-0361
Sweden: +46 (0)8 5033-6574
UK: +44 (0)330 336-9105
US: +1 719 457-1036
Conference code: 4404154

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. An on-demand video will be available after the conference.

Tieto publishes financial information in English and Finnish.

TIETO CORPORATION

DISTRIBUTION

NASDAQ Helsinki

NASDAQ Stockholm

Principal Media

Tietoaims to capture the significant opportunities of the data-driven world and turn them into lifelong value for people, business and society. We aim to be customers' first choice for business renewal by combining our software and services capabilities with a strong drive for co-innovation and ecosystems.

Headquartered in Finland, Tieto has over 13 000 experts in close to 20 countries. Tieto's turnover is approximately EUR 1.5 billion and shares listed on NASDAQ in Helsinki and Stockholm. www.tieto.com

This information was brought to you by Cision http://news.cision.com
http://news.cision.com/tieto/r/tieto-s-interim-report-4-2016---year-of-increased-investments-ends-with-solid-performance,c2178937

The following files are available for download:

http://mb.cision.com/Main/7922/2178937/622602.pdf

Tieto Interim Report Q4 2016 (PDF)