TIETO’s interim report 2/2012 (January–June) – Performance according to plan, strategy implementation and cost reductions on schedule

Published on: 
20.07.2012
This article is about: 
Stock exchange release

April–June highlights

  • Net sales totalled EUR 456.1 (462.3) million, down by 1%. Organically, net sales were flat.
  • Book-to-bill at 1.1. Order intake amounted to EUR 505 (600) million.
  • Operating profit (EBIT) amounted to EUR -3.7 (19.2) million, including one-off items of EUR 31.9 million. Operating margin stood at -0.8% (4.2).
  • Operating profit excluding one-off items stood at EUR 28.2 (24.5) million, representing an operating margin of 6.2% (5.3).
  • Profit after taxes was EUR -6.8 (11.4) million.
  • Net cash flow from operations amounted to EUR -2.5 (0.0) million.
  • Strategy implementation and personnel negotiations proceeded according to plan.

 January–June highlights

  • Net sales remained at the previous year’s level at EUR 923.2 (923.9) million.
  • Book-to-bill at 1.1. Order intake amounted to EUR 973 (1 132) million.
  • Operating profit (EBIT) amounted to EUR 38.0 (42.8) million, representing an operating margin of 4.1% (4.6).
  • Operating profit, excluding one-off items, amounted to EUR 56.2 (48.5) million, 6.1% (5.2) of net sales.
  • Profit after taxes was EUR 25.2 (24.9) million.
  • Net cash flow from operations amounted to EUR 66.8 (38.8) million.

 Full-year outlook for 2012 unchanged

The outlook for 2012 remains unchanged. Tieto expects its net sales to develop in line with the anticipated growth rate for the Western European IT services market, i.e. 0–2%. Full-year operating profit (EBIT) excluding one-off items is expected to be above the previous year’s level (EUR 117.1 million in 2011).

 In the second quarter, Tieto booked EUR 31.9 million in costs related to the streamlining actions. The remaining part of the estimated total one-off costs of EUR 50 million, close to EUR 20 million, are expected to be booked during the second half of 2012 as announced earlier.

   

  Q2/2012 Q2/2011 H1/2012 H1/2011
Net sales, EUR million 456.1 462.3 923.2 923.9
Change in net sales, % -1 7 0 8
Operating profit (EBITA), EUR million -2.3 21.0 40.9 46.5
Operating margin (EBITA), % -0.5 5.0 4.4 4.9
Operating profit (EBIT), EUR million -3.7 19.2 38.0 42.8
Operating margin (EBIT), % -0.8 4.2 4.1 4.6
Operating profit (EBIT) excl. one-off items, EUR million 28.2 24.5 56.2 48.5
Operating margin (EBIT) excl. one-off items, % 6.2 5.3 6.1 5.2
Profit after taxes, EUR million -6.8 11.4 25.2 24.9
Net cash flow from operations, EUR million -2.5 0.0 66.8 38.8
EPS, EUR -0.10 0.16 0.35 0.35
Return on equity, 12-month rolling, % 11.2 9.6 11.2 9.6
Return on capital employed, 12-month rolling, % 17.4 14.9 17.4 14.9
Investments, EUR million 13.6 13.3 28.0 78.6
Interest-bearing net debt, EUR million 80.0 136.4 80.0 136.4
Gearing, % 14.7 25.8 14.7 25.8
Net debt/EBITDA 0.5 0.9 0.5 0.9
Personnel on 30 June 17 723 18 071 17 723 18 071
           

Comment regarding the interim report by Kimmo Alkio, President and CEO:

“During the second quarter, we focused on the implementation of a competitive cost structure and profitability improvement as essential elements in our strategy. The first steps in achieving a competitive cost structure have been concluded as planned and second-quarter profitability was in line with our expectations. 

On a day-by-day basis, quality assurance has been elevated as the number one priority across our management teams. During the second quarter, we concluded several important customer agreements and our book-to-bill was at a healthy level. I also want to thank our employees for keeping a high degree of attention on customer priorities at a time when we have carried out substantial redundancies in the company.

I am pleased to see that our current development is consistent with our objectives. This gives us a good base for longer-term strategy implementation. During the second half, we will continue to focus on our operational objectives and prepare ourselves for the gradual implementation of the new operating model effective as from the beginning of 2013.”

FINANCIAL PERFORMANCE IN APRIL–JUNE

Financial performance by market unit

  

  Net sales
Q2/2012,
EUR million		 Net sales Q2/2011, EUR million Change, % Operating margin Q2/2012, % Operating margin Q2/2011,
%
Finland and the Baltic countries 190 178 7 4.2 2.4
Scandinavia 135 140 -4 -1.9 3.7
Central Europe & Russia 31 33 -6 -31.1 -17.1
Global Accounts 170 193 -12 3.0 9.6
Group elimination -69 -80      
Total 456 462 -1 -0.8 4.2
               

Operating profit excluding one-off items by market unit  

  Operating
profit excl.
one-off items
Q2/2012,
EUR million		 Operating profit excl. one-off items Q2/2011,
EUR million		 Operating margin excl. one-off items Q2/2012,
%		 Operating margin excl. one-off items Q2/2011,
%
Finland and the Baltic countries 15.6 4.1 8.2 2.3
Scandinavia 7.7 9.2 5.7 6.6
Central Europe & Russia -3.7 -5.4 -11.9 -16.5
Global Accounts 9.8 18.5 5.7 9.6
Steering Functions and Group
Management		  
-1.3		  
-2.1		    
Total 28.2 24.5 6.2 5.3
           

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 6745257, pellervo.hamalainen(at)tieto.com

Tanja Lounevirta, Head of Financial Communications, 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 9.30 pm EET (8.30 pm CET, 7.30 pm UK time). The results will be presented in English by Kimmo Alkio, President and CEO.

The conference will be  webcasted   and published live on Tieto's website www.tieto.com 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. All releases are posted in full on Tieto's website as soon as they are published.

TIETO CORPORATION

DISTRIBUTION
NASDAQ OMX Helsinki
NASDAQ OMX Stockholm
Principal Media


Tieto is the leading IT service company in Northern Europe providing IT and product engineering services. Our highly specialized IT solutions and services complemented by a strong technology platform create tangible business benefits for our local and global customers. As a trusted transformation partner, we are close to our customers and understand their unique needs. With about 18 000 experts, we aim to become a leading service integrator creating the best service experience in IT, www.tieto.com
 

Tieto Corporation

Business ID: 0101138-5

Aku Korhosen tie 2−6
PO Box 38
FI-00441 HELSINKI, FINLAND
Tel +358 207 2010
Fax +358 2072 68898
Registered office: Helsinki

E-mail: info@tieto.com
www.tieto.com

 

 

Attachments:
Tieto Interim Report 22012.pdf