Markets and customers: Stabilized market with good outsourcing demand

Transcription

1 Tieto Q2 10 Sales still slightly down; strong order intake 21 July 2010 Helsinki, Finland Corporation Hannu Syrjälä President and CEO Seppo Haapalainen CFO Reeta Kaukiainen VP, Comms&IR Markets and customers: Stabilized market with good outsourcing demand IT market in the Nordic countries stabilized during the first half of 2010 Cost savings and productivity are key demand drivers for IT services Demand for cloud services is accelerating Growth expected in the second half of 2010 Market estimates for the full year vary from 0% to 2% Some price pressure still exists in the market Telecom: transformation towards offshore has accelerated Volumes are going up, but average unit prices are lower Finance: market has stabilized, but competition is fierce Recent customer wins: Aktia Group, BancABC, City of Stockholm, Delovoy Peterburg, Finnish State Treasury, If P&C Insurance, Jämtland County Council, Nordnet, Skåne Regional Council, Vacon and VR Group 2 Corporation 1

2 Q2 highlights Strong order intake, additional spending in development programmes Sales down by 3% to EUR (444.8) million Order intake EUR 590 (483) million Operating profit EUR 19.5 (10.4) million EBIT margin was 4.5% (2.3%) 4.9% (5.6%) excluding one-off items The company carried out additional spending of EUR 7 million in offerings, Russia and global delivery model Order backlog EUR (1 122) million EPS 0.17 (0.14) euros Net sales EBIT % 7.7% 6.9% 4.5% 4.5% 2.3% Q2/09 Q3/09 Q4/09 Q1/10 Q2/ Corporation Quarterly development MEUR Net sales Cash flow Gross margin and expenses/ FTE Trailing 12 months, keur Margin Expenses 75 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Gearing 4 MEUR % Corporation 2

3 Second quarter in brief Q2/2010 Q2/2009 H1/2010 H1/2009 Net sales, EUR million Operating profit, EUR million EBIT, % Profit after taxes, EUR million EPS, EUR Net cash flow from operations Gearing, % Personnel at the end of period Corporation Income statement EUR million Q2/2010 Q2/2009 H1/2010 H1/2009 Change % Net sales Other operating income Employee benefit expenses Depreciation and amortization Other operating expenses Operating profit (EBIT) Interest and other financial income Interest and other financial expenses Net exchange losses/gains Profit before taxes Income taxes Net profit for the period Corporation 3

4 Offshoring ratio at 34% Headcount in China up 120% y/y Target for 2010 Snapshot of Czech Started in employees One of the biggest delivery centres in Czech Project services, IT operations management and R&D services 7 Corporation Share of net sales Country sales by quarter Corporation Note: Internal sales included 4

5 Finland Growth in forest and manufacturing Sales down by 1%, organically flat Operating profit EUR 25.9 (25.6) million i.e. 11.4% (11.1) 1) Sales in the telecom sector were flat Forest and manufacturing started to grow Public sector slightly down Employees (5 863) 9 Corporation Sweden Good demand in the public and finance sectors Sales up by 9%; in SEK 2% decline Operating profit EUR 7.7 (-6.2) million i.e. 6.1% (-5.3) Tight cost control is paying off Market activity clearly up, pricing remains tight Good demand in public and finance sectors Employees (3 122) - 10 Corporation 5

6 International Sales growth driven by China Sales down by 5%, but the underlying sales* were up 4% Operating profit EUR 0.3 (-6.2) million i.e. 0.2% (-4.3) A data centre investment of EUR 3 million in Moscow was concluded Excellent sales development in China Employees (7 210) * Excluding the impacts of divestments, currency changes and other one-off items 11 Corporation Top 10 customers account for 38% of net sales Apoteket Ericsson IF Insurance Kesko The National Board of Taxes (FI) Nokia Nordea Nokia Siemens Networks OP-Pohjola Group TeliaSonera Healthcare&Welfare/Retail Telecom Finance Retail Government Telecom Finance Telecom Finance Telecom 34% 45% 21% Telecom Finance Industry sectors 12 Customers are listed in alphabethical order. Corporation 6

7 Telecom & Media Modest growth Net sales down by 2%, but the underlying sales* grew modestly Business with large strategic t customers developing positively Profitability improved due to lower costs and improved efficiency Net sales, MEUR * Excluding the impacts of divestments, currency changes and other one-off items 13 Corporation Financial Services Profitability improved Net sales fell by 4%; excl. positive currency effects the decline was 8% Decline mainly attributable to the Finnish pension insurance segment Profitability improved due to cost savings and downsizing of underperforming businesses Net sales, MEUR 14 Corporation 7

8 Industry sectors* Profitability at a healthy level Sales down by 3%; the underlying sales** were down by 2% Profitability remained at a healthy level l Slow recovery in forest and manufacturing has started High activity in the oil&gas sector Net sales, MEUR * Automotive, energy, forest, healthcare and welfare, manufacturing, public, retail and logistics ** Excluding the impacts of divestments, currency changes and other one-off items 15 Corporation Actions for Increase offshore capacity; target 35% of people in offshore countries at the end of Improve Tieto s competitiveness and profitability in the telecom business 3. Invest in growth in Russia and new offerings such as cloud services 4. Complete Finnish, Swedish and Russian data centres infrastructure 5. Continue with tight cost control 16 Corporation 8

9 Outlook for 2010 The IT markets have bottomed out Tieto expects its net sales to develop in line with the IT services market relevant to the company Operating profit is expected to be higher than in Corporation Knowledge. Passion. Results. Corporation 9