TIETO's interim report 1/2010 (January-March): Profitability improves, sales slightly down
(Thomson Reuters ONE) -
Tieto Corporation Interim Report 27 April 2010, 8.00 am EET
To download the PDF file, please use this link:
http://hugin.info/3114/R/1408428/361156.pdf
Highlights: January-March
* Net sales totalled EUR 422.9 (438.0) million, down 3%.
* Operating profit amounted to EUR 18.8 (4.9) million, representing an
operating margin of 4.5% (1.1).
* Operating profit excluding one-off items was EUR 26.6 (14.8) million,
representing an operating margin of 6.3% (3.4).
* Profit after taxes was EUR 12.0 (1.0) million.
* Net cash flow from operations amounted to EUR 27.9 (38.7) million.
* The company's outlook remains unchanged.
Q1/2010 Q1/2009
Net sales, EUR million 422.9 438.0
Change in net sales, % -3 -6
Operating profit, EUR million 18.8 4.9
Operating margin, % 4.5 1.1
Operating profit excluding one-off items, EUR million 26.6 14.8
Operating margin excluding one-off items, % 6.3 3.4
Profit after taxes, EUR million 12.0 1.0
Net cash flow from operations, EUR million 27.9 38.7
EPS, EUR 0.17 0.01
Hannu Syrjälä, President and CEO:
"Our business environment has continued to improve and our execution was solid
in the first quarter of 2010. Sales were slightly down, and profitability
improved as a result of successful cost savings actions implemented in 2009.
Operating margin excluding one-off items almost doubled to 6.3% from last year.
The turnaround in Tieto Sweden is well on its way. The good profitability
development that started in the latter part of 2009 has continued. In Finland,
sales were down a bit but profitability remained at the 10% level. Tieto
International's profitability was strained by few divestments, but excluding
these, profitability was up substantially.
The first half of 2010 is still characterized by sluggish market, and modest
growth is expected in the latter half of the year. Our volumes have developed
favourably, but our sales are affected by lower price levels due to increased
use of offshore resources. Tieto is investing in growth initiatives, but at the
same time, we continue to manage our cost base tightly. We have achieved
excellent results from our increased offshore capabilities and this will have a
positive impact on our performance."
MARKET DEVELOPMENT
The IT services market in the Nordic countries has stabilized at the beginning
of 2010. Activity in the market has picked up, and companies' efforts to achieve
cost savings and improve productivity have opened up new business opportunities.
These have not yet translated to growth, except in the service sectors, such as
public, healthcare, retail and logistics.
In 2010, IT spending in Europe is driven by replacement investments in hardware
and software as well as growing spending on cloud services, such as Software as
a Service.
The Nordic IT services market is expected to start growing in the second half of
2010. Growth estimates for the full year provided by market analysts vary from
0% to 2%. The market for the telecom sector is expected to remain challenging
during 2010. The market development is twofold; volumes are going up but at the
same time, offshoring will continue to lower market prices. The outsourcing
market and the demand for new service models are expected to remain robust,
whereas the project services market continues to slide in the first half of
2010.
Price pressure persists, especially in agreement renewals. The changing delivery
mix - which makes greater use of offshore resources - is leading to lower
average unit prices.
In the telecom sector, the transformation towards offshore-based operations has
accelerated. It is expected that transfers will curbe market growth in euros,
although volumes in terms of manhours are on the rise. The network equipment
manufacturers segment has continued to be challenging. The mobile device
manufacturers segment has picked up, boosted by new technologies, and the
operator segment is expected to follow suit later in 2010. Decision-making
cycles have remained relatively long.
In the finance sector, the market has stabilized, but competition is fierce and
decisions-making processes are slow. Outsourcing is the main source of growth,
especially in Sweden, but activity in the products area has also picked up. In
the Finnish finance sector, the pension insurance segment has slowed down after
a long investment cycle, whereas the banking segment is expected to grow. In the
UK, the finance sector has remained challenging.
Market development by country
In Finland, the outsourcing market continues to grow, but project business is
expected to remain at a modest level. Demand for IT services is expected to
continue at a good level in the utilities, healthcare and welfare sectors. In
the public sector, IT budgets will be cut and the plan is to re-allocate parts
of the budget from ministries to centralized IT procurement units in 2010.
In Sweden, the IT market is picking up. New outsourcing-related opportunities
have opened up, especially in the finance and public sectors. The number of
customer leads is growing. Price competition remains hard in agreement renewals.
In the manufacturing industry, there are no signs of recovery yet.
Outside Finland and Sweden, the development of the IT markets varies country by
country. In general, telecom is the most challenging sector.
Germany is expected to recover slowly in 2010. The markets for local automotive
and telecom R&D have continued to deteriorate and demand for IT services in
these sectors has been weak. In 2010, outsourcing remains the growth area, as
the economic situation is forcing companies to improve the efficiency of their
operations. The healthcare sector is expected to see positive development.
In Norway, demand is gradually picking up. Interest in restarting IT projects
has increased in the oil & gas segment, thanks to higher oil prices. The
utilities segment is stable, automatic meter reading being one of the future
drivers. The finance market in Norway follows the common industry trends,
capital market solutions being the strongest area.
BUSINESS TRANSACTIONS AND MAJOR AGREEMENTS IN JANUARY-MARCH
In January, Legal, Financial and Administrative Services Agency in Sweden,
Kammarkollegiet, chose Tieto as one of its ten IT-suppliers. The framework
agreements with the chosen suppliers cover IT management services in the public
sector and will affect all government agencies, 232 municipalities as well as
19 county councils and regions.
In March, Tieto Russia acquired T&T Telecom, an IT and consultancy company
specializing in services for telecom operators. The company employs
approximately 70 people and has offices in St. Petersburg and Moscow.
In March, Tieto divested the shares of TietoEnator Majiq, previously responsible
for the company's pulp and paper operations in North America. The company
employed close to 60 people. In the forest sector, Tieto now focuses on Europe
and the growth markets in China and Russia.
In March, Tieto and Yleisradio (YLE) agreed that Tieto will acquire 20% of Tieto
Broadcasting IT Oy's share capital. Tieto Broadcasting IT was previously owned
by Tieto (80%) and YLE (20%). In 2009, Tieto Broadcasting IT's net sales
amounted to EUR 22.7 million.
Tieto also concluded several other important agreements during the quarter, such
as for global communication and collaboration services with Cargotec, IT
operations with the municipality of Sollentuna and the outsourcing of the
majority of IT activities with the Swedish Motor Vehicle Inspection Company.
ORDER BACKLOG
The order backlog, which only comprises services ordered with binding contracts,
amounted to EUR 1 208 (1 084) million at the end of the period. In total, 60%
(59) of the backlog is expected to be invoiced during the current year. Order
intake in the first quarter saw the strongest growth in Telecom Sweden and in
all industry segments in Tieto International.
FINANCIAL PERFORMANCE IN JANUARY-MARCH
First-quarter net sales declined by 3% and amounted to EUR 422.9 (438.0)
million. The stronger currencies, especially the Swedish krona, had a positive
EUR 13 million impact on net sales. First-quarter net sales in 2009 included
one-off income of EUR 7.7 million. Excluding one-off income and currency
impacts, net sales declined by 5%.
In most industries, good outsourcing activity in the IT market and the strong
sales pipeline did not translate to growth yet. Net sales in the healthcare,
public, retail and logistics sectors are growing, but the telecom and
manufacturing sectors saw a decline in net sales. Outsourcing-related sales grew
during the first quarter, but that did not compensate for the decline in
project-based business.
Business transfers to offshore countries are straining net sales, but at the
same time they contribute to improved profitability. On one hand, the changing
delivery mix - which makes greater use of offshore resources - is leading to
lower average unit prices. On the other, average unit costs are declining as
well.
Thanks to to improved efficiency and the positive impacts of the streamlining
actions that were implemented during 2009, Tieto's profitability improved from
the first quarter of 2009. In the first quarter, the company achieved EUR 28
million in cost savings, exclusive of currency effects. Tieto booked EUR 1.7
million in restructuring costs. The company continues to drive its structural
improvements and transfer of operations to offshore countries. These actions are
expected to result in EUR 10-15 million in one-off costs in 2010.
First-quarter operating profit amounted to EUR 18.8 (4.9) million, representing
a margin of 4.5% (1.1). Operating profit includes one-off costs of EUR 1.7
million related to the streamlining actions, mainly in Sweden, impairment losses
of EUR 6.6 million related to the divestment of the pulp and paper operations in
North America and assets held for sale in connection with the divestment of
Tieto's French subsidiary, and a capital gain of EUR 0.5 million. Operating
profit excluding one-off items amounted to EUR 26.6 (14.8) million, or 6.3%
(3.4) of net sales.
Net financial expenses stood at EUR 1.1 (2.8) million in the first quarter. Net
interest expenses were EUR 1.7 (1.8) million and net gains from foreign exchange
transactions EUR 0.7 (negative 1.3) million, of which EUR 1.7 million were
unrealized net losses. Other financial income and expenses amounted to EUR 0.1
(positive 0.3) million.
First-quarter earnings per share (EPS) totalled EUR 0.17 (0.01).
The 12-month rolling return on capital employed (ROCE) was 19.6% and the return
on shareholders' equity (ROE) 13.6%.
Financial performance by country
Net sales in Net sales in EBIT margin EBIT margin
Q1/2010, Q1/2009, in Q1/2010, in Q1/2009,
EUR million EUR million Change, % % %
Finland 222 227 -2 10.2 10.0
Sweden 119 119 0 4.9 -7.4
International 135 141 -4 -1.0 -2.6
Group elimination -52 -48
Total 423 438 -3 4.5 1.1
In Finland, net sales were down by 2%. The manufacturing, telecom and finance
sectors were challenging, whereas the energy, public, healthcare, retail and
logistics sectors saw healthy growth. Net sales were also strained by lower
prices. Due to the improved utilization rate, operating profit remained at the
previous year's level. First-quarter operating profit amounted to EUR 22.6
(22.7) million and the operating margin was 10.2% (10.0).
In Sweden, net sales remained flat. In local currency, the decline was 9%. The
finance, public, healthcare, retail and logistics sectors performed strongly.
Net sales in the telecom sector declined, partly due to ongoing offshore
transitions with some key customers. Thanks to the implementation of
streamlining actions, operating profit improved to EUR 5.8 (-8.8) million, or
EUR 6.8 (0.8) million excluding one-off items. Operating margin was 4.9% (-7.4),
or 5.7% (0.7) excluding one-off items.
In International, net sales declined by 4%. First-quarter net sales in 2009
included an one-off income of EUR 7.7 million. Excluding currency effects and
one-off income, net sales remained flat. Net sales in Germany and France were
dropping off due to their large exposure in the telecom sector, whereas sales in
Asian and Eastern European countries were rising. First-quarter operating profit
amounted to EUR -1.4 (-3.7) million and included EUR 6.6 million in impairment
losses and a net amount of EUR 0.2 million (negative) in other one-off items.
Due to cost savings and good performance in delivery countries, operating profit
excluding one-off items rose to EUR 5.4 (-5.6) million. Operating margin was
-1.0% (-2.6), or 4.0% (-4.0) excluding one-off items.
Net sales by customer sector
Net sales in Q1/2010, Net sales in Q1/2009,
EUR million EUR million Change, %
Telecom 142 153 -7
Finance 88 89 0
Industry sectors 193 197 -2
Total 423 438 -3
In the telecom sector, Tieto's net sales fell by 7%. The drop was mainly
attributable to customers' delayed investment decisions and a strong offshore
transition trend, especially in the network equipment manufacturers segment.
Ongoing transitions to offshore countries account for more than half of the
drop. Due to lower costs and improved efficiency, however, profitability
improved.
In the finance sector, net sales remained flat. Excluding the positive currency
effect, net sales declined around 4% due to the drop in Finland and the UK. In
Finland, net sales in the pension insurance segment shrunk after a relatively
long and strong investment cycle. All other major markets saw positive change in
net sales. Profitability improved substantially due to cost savings and the
downsizing of underperforming businesses.
In the industry sectors, net sales declined by 2%. Excluding currency effects
and one-off income in 2009, net sales remained at the same level as in the first
quarter of 2009. Profitability remained at a healthy level. In Tieto's
reporting, the industry sectors cover customers in healthcare and welfare,
forest, energy, manufacturing, automotive, public, retail and logistics.
CASH FLOW AND FINANCING
First-quarter net cash flow from operations, including the increase of EUR 9.9
(decrease 24.8) million in net working capital, amounted to EUR 27.9 million
(38.7).
Tax payments amounted to EUR 6.6 (6.4) million.
Payments for acquisitions totalled EUR 0.4 (2.4) million in the first quarter.
Divestments amounted to EUR 5.3 (none) million.
The equity ratio was 45.8% (40.0). Gearing decreased to 10.2% (17.5). Net debt
totalled EUR 51.9 (79.2) million, including EUR 150.3 million in
interest-bearing debt, EUR 8.2 million in finance lease liabilities, EUR 8.2
million in finance lease receivables and EUR 98.4 million in cash and cash
equivalents.
The interest-bearing long-term debt consists of EUR 150 million in bonds, of
which EUR 100 million will mature in December 2013 and EUR 50 million (private
placement) in July 2012. The EUR 250 million syndicated revolving credit
facility maturing in November 2011 was not in use and there were no commercial
papers issued under the EUR 250 million Commercial Paper Programme at the end of
March. Other short-term credit lines were utilized for EUR 0.3 million.
INVESTMENTS
Investments totalled EUR 23.3 (16.1) million for the period. This comprises EUR
21.6 (15.9) million in capital expenditure including financial leasing, and EUR
1.7 (0.2) million in investments in shares.
PERSONNEL
The number of full-time employees rose to 16 880 (16 638) at the end of March.
The rise has resulted from twofold development. To boost its offshore ratio,
Tieto has actively been ramping up its capacity in global delivery centres. At
the end of March, the number of full-time employees in the global delivery
centres had increased by 27% year on year and totalled 5 431 (4 293), or 32%
(26) of personnel. In onshore locations, the number of personnel has decreased,
mainly due to terminations. Starting in 2010, the company uses full-time
employees as the basis for reporting of offshore resources. In previous reports,
Tieto has reported total headcount.
During the first quarter, Tieto accelerated competence transformation with a
view to better meeting needs in growing specialist areas. The company has also
invested in building more effective tools for project staffing.
Based on the national salary raises agreed in collective labour agreements in
Finland and Sweden, wages are expected to increase by 1-2%. In some specialist
areas, the first signs of a lack of resources and growing attrition rates can be
seen, and therefore the rise in personnel expenses might be higher.
The 12-month rolling employee turnover stood at 6.7% at the end of March. The
average number of full-time employees was 16 799 (16 718) in the first quarter.
ANNUAL GENERAL MEETING
Tieto's Annual General Meeting on 26 March re-elected the Board's former
members: Kimmo Alkio, Risto Perttunen, Markku Pohjola and Olli Riikkala. In
addition, the meeting elected Christer Gardell, Kurt Jofs, Eva Lindqvist and
Teuvo Salminen as new members. In addition, the company's personnel shall
appoint two members, each with a personal deputy, to the Board of Directors. The
personnel representatives on the Board are Anders Eriksson (deputy: Bo Persson)
and Jari Länsivuori (deputy: Esa Koskinen).
The Board of Directors elected Markku Pohjola as its Chairman and Olli Riikkala
as its Vice Chairman. The Board also appointed a Remuneration and Nomination
Committee comprising Markku Pohjola (Chairman), Kimmo Alkio, Christer Gardell
and Eva Lindqvist, and an Audit and Risk Committee comprising Olli Riikkala
(Chairman), Kurt Jofs, Risto Perttunen and Teuvo Salminen.
The meeting re-elected the firm of authorized public accountants
PricewaterhouseCoopers Ltd. as the company's auditor for the financial year
2010.
The meeting authorized the Board to repurchase the company's own shares. Under
the authorization, up to 7 200 000 shares, corresponding to approximately 10% of
the aggregate number of shares, may be purchased.
The meeting decided to establish a Shareholders' Nomination Committee to prepare
proposals for the election and remuneration of the members of the Board of
Directors to the next Annual General Meeting and to adopt a charter for the
Shareholders' Nomination Committee.
DIVIDEND
The Annual General Meeting resolved to distribute a dividend of EUR 0.50 (0.50)
per share. Dividends totalling EUR 35.7 million were paid out on 14 April.
SHARES AND SHARE-BASED INCENTIVES
At the end of March, the total number of shares amounted to 72 023 173 and the
share capital to EUR 75 841 523.
On 31 March, a total of 4 400 Tieto's shares were returned free of consideration
to the company. The transaction is related to the company's Share Ownership Plan
2006-2008. At the end of the quarter, the number of shares in the company's
possession totalled 545 900, representing 0.8% of the total number of shares and
voting rights. The outstanding number of shares, excluding the shares in the
company's possession, was 71 477 273.
FLAGGING ANNOUNCEMENTS
On 26 January, OP-Pohjola Group announced that its group holding in Tieto had
fallen to 4.14%. On 23 March, Goldman Sachs announced that its group holding had
increased to 5.05%.
EVENTS AFTER THE PERIOD
On 8 April, Goldman Sachs announced that it no longer has a notifiable interest
in Tieto shares, and Solidium announced that its holding has increased to 5.02%.
In April, Tieto announced that the share subscription price for Tieto Stock
Option 2009 B is EUR 16.87 per share (the trade volume weighted average
quotation of the share on NASDAQ OMX Helsinki during 11 February-9 April 2010).
In April, Tieto decided to focus its business in India on two main sites: Pune
and Bangalore. The operations of the Hyderabad site will be moved to the other
locations by the end of June.
In April, Tieto agreed to sell its French subsidiary to the French IT company
Devoteam. In 2009, net sales from the sold entity were EUR 28.5 million. Tieto
booked EUR 5.2 million in impairment loss and EUR 0.4 million in restructuring
costs related to the divestment in its first-quarter results.
NEAR-TERM RISKS AND UNCERTAINTIES
In some specialist areas, the first signs of a lack of resources and rising
attrition can be seen. Therefore, the rise in personnel expenses might be higher
than agreed in the collective labour agreements. In Asia, salaries are on the
rise, in some areas even at a double-digit rate.
Weak demand for IT services might lead to lower utilization of resources and
hence lower profitability if the company is not able to adjust its cost base
fast enough to new negative changes in the market.
The ongoing transformation of the IT sector towards offshore production might
create uncertainty among the company's personnel and poses risks related to the
company's market position, prices and quality of deliveries. On the other hand,
Tieto has steadily increased its offshore resources during the past several
years, and is currently the leading European based company providing substantial
offshore capabilities. The company expects the growing offshore operations to
lead to lower average costs as well, offsetting negative price effects. Special
attention has been placed on ensuring the quality of deliveries.
A comprehensive description of the major long-term risks is available on the
company's website.
OUTLOOK FOR 2010
Tieto anticipates that the IT markets have bottomed out. In 2010, Tieto expects
its net sales to develop in line with the IT services market relevant to Tieto
and its operating profit to be higher than in 2009.
Financial calendar
Second-quarter interim report on 21 July 2010
Third-quarter interim report on 27 October 2010
Fourth-quarter interim report and financial statements bulletin for 2010 on 10
February 2011
Accounting policies in 2010
The interim report has been prepared in accordance with International Accounting
Standard (IAS) 34, Interim Financial Reporting, as adopted by the EU.
Tieto has started to apply hedge accounting for selected hedging transactions,
such as foreign exchange hedging transactions between EUR and CZK after 1 March
2010. Excluding this change, the accounting policies adopted are consistent with
those used in the annual financial statements for the year ended on 31 December
2009. The accounting policies as well as the effect of changes required by the
adoption of standards, interpretations and amendments taken into use in 2010 are
described in the annual financial statements.
The figures in this report are unaudited.
Key figures
2010 2009 2009
1-3 1-3 1-12
Earnings per share, EUR
- basic 0.17 0.01 0.77
- diluted 0.17 0.01 0.77
Equity per share, EUR 7.10 6.31 7.25
Return on equity rolling 12 month, % 13.6 10.2 11.0
Return on capital employed rolling 12 month, % 19.6 25.3 16.8
Equity ratio % 45.8 40.0 46.0
Net interest-bearing liabilities, EUR million 51.9 79.2 66.0
Gearing, % 10.2 17.5 12.7
Investments, EUR million 23.3 16.1 58.9
Number of shares
2010 2009 2009
1-3 1-3 1-12
Outstanding shares, end of period
Basic 71 408 913 71 661 523 71 408 913
Diluted 71 691 433 71 739 083 71 481 673
Outstanding shares, average
Basic *) 71 408 913 71 661 523 71 499 888
Diluted 71 691 433 71 739 083 71 574 507
Company's possession of its own shares,
End of period 545 900 361 650 541 500
Average 541 549 361 650 473 315
*) Number of shares included in the calculation of basic Earnings per share.
Shares conveyed in 2009 are excluded as they can be returned until end of 2010.
Income statement, EUR million
2010 2009 Change 2009
1-3 1-3 % 1-12
Net sales 422.9 438.0 -3 1 706.3
Other operating income 7.0 2.9 141 17.5
Employee benefit expenses 254.5 266.9 -5 986.7
Depreciation, amortization and impairment charges 23.0 17.3 33 70.7
Other operating expenses 133.6 151.8 -12 591.1
Operating profit (EBIT) 18.8 4.9 284 75.3
Interest and other financial income 3.8 0.8 375 5.8
Interest and other financial expenses -5.6 -2.3 143 -13.7
Net exchange losses/gains 0.7 -1.3 - 2.9
Profit before taxes 17.7 2.1 743 70.3
Income taxes -5.7 -1.1 418 -15.2
Net profit for the period 12.0 1.0 1 100 55.1
Net profit for the period attributable to
Shareholders of the Parent company 11.9 0.8 1 388 54.8
Minority interest 0.1 0.2 -50 0.3
12.0 1.0 1 100 55.1
Earnings attributable to the shareholders of the
Parent company per share, EUR
Basic 0.17 0.01 1 600 0.77
Diluted 0.17 0.01 1 600 0.77
Statement of comprehensive income, EUR million
Net profit for the period 12.0 1.0 1 100 55.1
Translation difference from the net investment in
Swedish subsidiaries (net of tax) 8.0 8.8 -9 8.2
Translation differences 3.7 -6.4 - 7.2
Total comprehensive income 23.7 3.4 597 70.5
Total comprehensive income attributable to
Shareholders of the Parent company 23.6 3.2 638 70.2
Minority interest 0.1 0.2 -50 0.3
23.7 3.4 597 70.5
Balance sheet, EUR million
2010 2009 Change 2009
31 Mar 31 Mar % 31 Dec
Goodwill 411.5 391.4 5 402.0
Other intangible assets 45.0 49.2 -9 42.8
Property, plant and equipment 104.7 103.2 1 100.1
Deferred tax assets 60.3 67.3 -10 66.9
Loan receivables 5.0 5.0 0 5.0
Other non-current assets 0.8 1.4 -43 0.8
Total non-current assets 627.3 617.5 2 617.6
Trade and other receivables 450.5 488.3 -8 444.1
Loan receivables 3.2 4.5 -29 3.9
Current income tax receivables 7.7 16.3 -53 6.4
Cash and cash equivalents 98.4 94.6 4 123.3
Total current assets 559.8 603.7 -7 577.7
Assets classified as held for
sale 4.4 - - -
Total assets 1 191.5 1 221.2 -2 1 195.3
Share capital, share issue
premiums and other reserves 112.2 108.9 3 110.6
Retained earnings 394.5 341.5 16 407.0
Parent shareholders' equity 506.7 450.4 13 517.6
Minority interest 0.5 1.7 -71 0.7
Total equity 507.2 452.1 12 518.3
Finance lease liability 8.2 13.2 -38 9.5
Loans 150.0 150.0 0 150.0
Deferred tax liabilities 35.0 22.6 55 33.6
Pension obligations 20.4 18.3 11 18.9
Other non-current liabilities 2.6 1.6 63 1.4
Total non-current liabilities 216.2 205.7 5 213.4
Trade and other payables 420.2 486.9 -14 370.1
Current income tax liabilities 7.3 19.2 -62 8.2
Provisions 36.6 37.2 -2 46.5
Loans 0.3 20.1 -99 38.8
Total current liabilities 464.4 563.4 -18 463.6
Liabilities classified as held
for sale 3.7 - - -
Total equity and liabilities 1 191.5 1 221.2 -2 1 195.3
Trade and other payables at the end of March include EUR 35.7 (35.8) million in
unpaid dividends.
Net working capital in the balance sheet, EUR million
2010 2009 Change 2009
31 Mar 31 Mar % 31 Dec
Accounts receivable 296.5 336.4 -12 313.9
Other working capital receivables 149.7 151.3 -1 129.4
Working capital receivables included in assets 446.2 487.7 -9 443.3
Operative accruals 154.3 197.1 -22 149.1
Other working capital liabilities 224.9 250.5 -10 219.6
Pension obligations and provisions 57.0 55.5 3 65.4
Working capital liabilities included in current
liabilities 436.2 503.1 -13 434.1
Net working capital in the balance sheet 10.0 -15.4 -165 9.2
Cash flow, EUR million
2010 2009 2009
1-3 1-3 1-12
Cash flow from operations
Net profit 12.0 1.0 55.1
Adjustments
Depreciation, amortization and impairment charges 23.0 17.3 70.7
Share-based payments 1.2 1.0 3.8
Profit/loss on sale of fixed assets and shares -0.5 0.0 -6.1
Other adjustments 0.0 0.1 0.2
Net financial expenses 1.1 2.8 5.0
Income taxes 5.7 1.1 15.2
Change in net working capital -9.9 24.8 -3.9
Cash generated from operations 32.6 48.1 140.0
Net financial expenses paid 1.9 -3.0 0.8
Income taxes paid -6.6 -6.4 -14.4
Net cash flow from operations 27.9 38.7 126.4
Cash flow from investing activities
Acquisition of Group companies and business
operations, net of cash acquired -0.4 -2.4 -4.6
Capital expenditures -21.4 -15.9 -58.0
Disposal of business operations 5.1 - 5.7
Sales of fixed assets 0.3 0.0 2.9
Change in loan receivables 0.7 0.1 0.8
Net cash used in investing activities from operations -15.7 -18.2 -53.2
Cash flow from financing activities
Dividends paid -0.3 - -36.3
Repurchase of own shares - - -2.6
Payment of finance lease liabilities -1.3 1.3 -5.1
Change in interest-bearing liabilities -38.4 -46.6 -27.9
Net cash used in financing activities from operations -40.0 -45.3 -71.9
Change in cash and cash equivalents -27.8 -24.8 1.3
Cash and cash equivalents at beginning of period -123.3 -120.2 -120.2
Foreign exchange differences -2.9 0.8 -1.8
Cash and cash equivalents at end of period 98.4 94.6 123.3
-27.8 -24.8 1.3
Statement of changes in shareholders'
equity, EUR million
Parent shareholders' equity Minority Total
interest equity
Share Share Own Trans- Retained Total
issue
capital premiums shares lation earnings
and other diffe-
reserves rencies
Balance at 31
Dec 2008 75.8 33.2 -9.0 -76.1 458.1 482.0 1.6 483.6
Comprehensive
income
Net profit for
the period 0.8 0.8 0.1 0.9
Other comprehensive
income
Translation
difference from
the
net investment
in Swedish
subsidiaries
(net of tax) 8.8 8.8 8.8
Translation
difference -0.1 -4.5 -1.8 -6.4 -6.4
Total comprehensive
income -0.1 -4.5 7.8 3.2 0.1 3.3
Transactions
with owners
Share-based
payments
recognized
against equity 1.0 1.0 1.0
Dividend -35.8 -35.8 -35.8
Minority
interest 0.0
Total transactions with
owners 0.0 0.0 -34.8 -34.8 0.0 -34.8
At 31 March
2009 75.8 33.1 -9.0 -80.6 431.1 450.4 1.7 452.1
Balance at 31
Dec 2009 75.8 34.8 -11.6 -44.8 463.4 517.6 0.7 518.3
Comprehensive
income
Net profit for
the period 11.9 11.9 0.1 12.0
Other comprehensive
income
Translation
difference from
the
net investment
in Swedish
subsidiaries
(net of tax) 8.0 8.0 8.0
Translation
difference 1.5 27.5 -25.3 3.7 3.7
Total comprehensive
income 1.5 27.5 -5.4 23.6 0.1 23.7
Transactions
with owners
Share-based
payments
recognized
against equity 1.2 1.2 1.2
Dividend -35.7 -35.7 -35.7
Minority
interest -0.3 -0.3
Total transactions with
owners 0.0 0.0 -34.5 -34.5 -0.3 -34.8
At 31 March
2010 75.8 36.3 -11.6 -17.3 423.5 506.7 0.5 507.2
Net sales by country, EUR million
2010 2009 Change 2009
1-3 1-3 % 1-12
Finland 222 227 -2 888
Sweden 119 119 0 462
International 135 141 -4 553
Group elimination -52 -48 9 -197
Group total 423 438 -3 1 706
Internal sales by country, EUR million
2010 2009 Change 2009
1-3 1-3 % 1-12
Finland 17 18 -4 73
Sweden 6 10 -39 27
International 29 21 42 96
Group total 52 48 9 197
Sales between segments are carried out at arm's length.
Net sales according to customer location, EUR
million
2010 Change Share 2009 Share 2009
1-3 % % 1-3 % 1-12
Finland 199 -4 47 207 47 806
Sweden 112 4 26 107 24 431
Other 113 -9 27 124 28 470
Group total 423 -3 100 438 100 1 706
Net sales by customer sector, EUR million
2010 2009 Change 2009
1-3 1-3 % 1-12
Telecom 142 153 -7 582
Finance 88 89 0 359
Industry sectors 193 197 -2 766
Group total 423 438 -3 1 706
Revenues of approximately EUR 56.5 million (EUR 57.4 million in 2009) are
derived from a single external customer. These revenues are attributable to all
reportable segments.
Operating profit (EBIT) by country, EUR million
2010 2009 Change 2009
1-3 1-3 % 1-12
Finland 22.6 22.7 -0.4 110.3
Sweden 5.8 -8.8 pos -3.0
International -1.4 -3.7 61.6 -6.7
Group operations -8.2 -5.3 -53.2 -25.4
Operating profit (EBIT) 18.8 4.9 284.1 75.3
Operating margin (EBIT) by country, %
2010 2009 Change 2009
1-3 1-3 1-12
Finland 10.2 10.0 0.2 12.4
Sweden 4.9 -7.4 12.3 -0.6
International -1.0 -2.6 1.6 -1.2
Operating margin (EBIT) 4.5 1.1 3.3 4.4
Personnel by country
End of period Average
2010 Change Share 2009 2009 2010 2009
1-3 % % 1-3 1-12 1-3 1-3
Finland 5 773 -4 34 6 036 5 757 5 783 6 034
Sweden 2 988 -8 18 3 257 3 103 2 995 3 284
Czech 1 717 15 10 1 494 1 656 1 699 1 541
Germany 1 040 -6 6 1 104 1 047 1 037 1 110
India 1 112 45 7 769 1 009 1 078 771
Latvia 591 -6 4 629 588 590 633
Poland 720 26 4 570 676 708 567
Norway 532 -16 3 634 561 533 634
China 727 107 4 352 590 686 345
Great Britain 265 -11 2 299 274 270 328
Italy 270 3 2 263 266 269 262
Denmark 213 -29 1 299 226 219 297
Lithuania 180 -5 1 189 177 176 189
Netherlands 131 -12 1 148 133 131 148
France 132 -6 1 140 134 130 142
Estonia 120 -3 1 123 118 119 120
Other 370 11 2 332 349 379 312
Group total 16 880 1 100 16 638 16 663 16 799 16 718
Total assets by country, EUR million
2010 2009 Change 2009
31 Mar 31 Mar % 31 Dec
Finland 454.2 444.6 2 442.1
Sweden 261.3 265.9 -2 261.3
International 320.3 363.8 -12 310.8
Country elimination -18.0 -15.4 17 -21.4
Countries total 1 017.8 1 059.0 -4 992.7
Group Operations 173.7 162.3 7 202.5
Total assets 1 191.5 1 221.2 -2 1 195.3
Non-current assets according to asset location, EUR million
2010 2009 Change 2009
31 Mar 31 Mar % 31 Dec
Finland 256.3 241.9 6 252.0
Sweden 148.3 133.4 11 138.6
Other 156.7 168.5 -7 154.4
Total non-current assets 561.3 543.8 3 545.0
Capital expenditure by country, EUR million
2010 2009 Change 2009
1-3 1-3 % 1-12
Finland 13.6 12.8 6 41.2
Sweden 5.1 2.4 111 9.4
International 1.1 0.0 - 4.2
Group Operations 1.8 0.7 157 2.8
Group total 21.6 15.9 36 57.5
Depreciation by country, EUR million
2010 2009 Change 2009
1-3 1-3 % 1-12
Finland 10.6 10.4 1 41.7
Sweden 2.0 2.1 -1 8.3
International 1.5 1.7 -8 8.8
Group Operations 0.4 0.7 -44 2.6
Group total 14.5 14.9 -2 61.4
Amortization on allocated intangible assets from acquisitions, EUR million
2010 2009 Change 2009
1-3 1-3 % 1-12
Finland 0.1 0.1 -23 0.5
Sweden 0.7 0.8 -5 2.9
International 1.0 1.4 -32 5.9
Group Operations 0.0 0.0 0 0.0
Group total 1.8 2.3 -23 9.3
Impairment losses, EUR million
2010 2009 Change 2009
1-3 1-3 % 1-12
Finland 0.0 0.0 0 0.0
Sweden 0.0 0.0 0 0.0
International 6.6 0.0 - 0.0
Group Operations 0.0 0.0 0 0.0
Group total 6.6 0.0 - 0.0
Commitments and contingencies, EUR million
31 Mar 2010 31 Dec 2009 Change %
For Tieto obligations
Pledges 0.0 0.0 0
On behalf of joint ventures 0.5 0.0 0
Other Tieto obligations
Rent commitments due in one year 54.8 52.1 5
Rent commitments due in 1-5 years 86.0 86.9 -1
Rent commitments due after 5 years 19.6 21.4 -9
Operating lease commitments due in one year 11.1 11.3 -2
Operating lease commitments due in 1-5 years 8.0 8.8 -9
Operating lease commitments due after 5 years 0.0 0.0 0
Other commitments 1) 30.7 28.2 9
1) In addition, commitments of EUR 9.2 million (EUR 7.6 million in Dec 2009)
related to liabilities in the Group balance sheet
Operating lease commitments are principally three-year lease agreements that do
not include buyout clauses.
Derivatives, EUR million
Notional amounts of derivatives,
EUR million 31 Mar 2010 31 Dec 2009
Foreign exchange forward contracts 208.5 196.5
Interest rate swap 250.0 250.0
Includes the gross amount of all notional values for contracts that have not
yet been settled or closed. The amount of notional value outstanding is not
necessarily a measure or indication of market risk, as the exposure of certain
contracts may be offset by other contracts.
Fair values of derivatives
The net fair values of derivative
financial instruments at the
balance sheet date were: 31 Mar 2010 31 Dec 2009
Foreign exchange forward contracts 0.6 -0.6
Interest rate swaps -0.9 -1.4
Derivatives are used for economic hedging
purposes only.
QUARTERLY FIGURES
Key figures
2010 2009 2009 2009 2009
1-3 10-12 7-9 4-6 1-3
Earnings per share, EUR
- basic 0.17 0.36 0.25 0.14 0.01
- diluted 0.17 0.36 0.25 0.14 0.01
Equity per share, EUR 7.10 7.25 6.82 6.46 6.31
Return on equity rolling 12 month, % 13.6 11.0 6.3 7.8 10.2
Return on capital employed rolling 12 month, % 19.6 16.8 18.6 18.5 25.3
Equity ratio % 45.8 46.0 43.2 40.7 40.0
Net interest-bearing liabilities, EUR million 51.9 66.0 118.9 139.2 79.2
Gearing, % 10.2 12.7 24.4 30.1 17.5
Investments, EUR million 23.3 15.7 12.7 14.4 16.1
Income statement, EUR million
2010 2009 2009 2009 2009
1-3 10-12 7-9 4-6 1-3
Net sales 422.9 440.6 382.9 444.8 438.0
Other operating income 7.0 4.7 2.8 7.1 2.9
Employee benefit expenses 254.5 243.3 210.7 265.8 266.9
Depreciation, amortization and impairment charges 23.0 17.5 16.9 19.0 17.3
Other operating expenses 133.6 150.8 131.8 156.7 151.8
Operating profit (EBIT) 18.8 33.7 26.3 10.4 4.9
Financial income and expenses -1.1 -1.5 0.9 -1.6 -2.8
Profit before taxes 17.7 32.2 27.2 8.8 2.1
Income taxes -5.7 -6.5 -8.8 1.2 -1.1
Net profit for the period 12.0 25.7 18.4 10.0 1.0
Balance sheet, EUR million
2010 2009 2009 2009 2009
31 Mar 31 Dec 30 Sep 30 Jun 31 Mar
Goodwill 411.5 402.0 398.2 392.7 391.4
Other intangible assets 45.0 42.8 44.1 46.1 49.2
Property, plant and equipment 104.7 100.1 99.0 100.8 103.2
Other non-current assets 66.1 72.7 68.7 75.3 68.7
Total non-current assets 627.3 617.6 610.0 614.9 612.5
Trade receivables and other current
assets 461.4 454.4 495.0 495.5 514.1
Cash and cash equivalents 98.4 123.3 105.6 101.7 94.6
Total current assets 559.8 577.7 600.6 597.2 608.7
Assets classified as held for sale 4.4 - - - -
Total assets 1 191.5 1 195.3 1 210.6 1 212.1 1 221.2
Total equity 507.2 518.3 487.8 462.0 452.1
Non-current loans 158.2 159.5 160.6 161.9 163.2
Other non-current liabilities 58.0 53.9 48.9 46.9 42.5
Total non-current liabilities 216.2 213.4 209.5 208.8 205.7
Trade payables and other current
liabilities 427.5 378.3 390.0 396.3 506.1
Provisions 36.6 46.5 49.3 54.5 37.2
Current loans 0.3 38.8 74.0 90.5 20.1
Total current liabilities 464.4 463.6 513.3 541.3 563.4
Liabilities classified as held for sale 3.7 - - - -
Total equity and liabilities 1 191.5 1 195.3 1 210.6 1 212.1 1 221.2
Cash flow, EUR million
2009 2009 2009 2009 2009
1-3 10-12 7-9 4-6 1-3
Cash flow from operations
Net profit 12.0 25.7 18.4 10.0 1.0
Adjustments 30.5 25.4 25.9 15.2 22.3
Change in net working capital -9.9 24.0 -26.4 -26.3 24.8
Cash generated from operations 32.6 75.1 17.9 -1.1 48.1
Net financial expenses paid 1.9 0.1 5.0 -1.3 -3.0
Income taxes paid -6.6 -3.5 5.7 -10.2 -6.4
Net cash flow from operations 27.9 71.7 28.6 -12.6 38.7
Net cash used in investing activities from
operations -15.7 -17.9 -8.3 -8.8 -18.2
Net cash used in financing activities from
operations -40.0 -36.4 -17.8 27.6 -45.3
Change in cash and cash equivalents -27.8 17.4 2.5 6.2 -24.8
Cash and cash equivalents at beginning of
period -123.3 -105.6 -101.7 -94.6 -120.2
Foreign exchange differences -2.9 -0.3 -1.4 -0.9 0.8
Cash and cash equivalents at end of period 98.4 123.3 105.6 101.7 94.6
-27.8 17.4 2.5 6.2 -24.8
Tieto has made minor adjustments in the quarterly segment figures for 2009 in
the tables below.
For comparison with the figures announced earlier, visit Tieto's website
www.tieto.com/Investors/Financials
Net sales by country, EUR million
2010 2009 2009 2009 2009
1-3 10-12 7-9 4-6 1-3
Finland 222 233 199 230 227
Sweden 119 125 103 116 119
International 135 139 130 143 141
Group elimination -52 -56 -48 -45 -48
Group total 423 441 383 445 438
Net sales by customer sector, EUR million
2010 2009 2009 2009 2009
1-3 10-12 7-9 4-6 1-3
Telecom 142 149 132 149 153
Finance 88 89 87 94 89
Industry sectors 193 203 165 201 197
Group total 423 441 383 445 438
Operating profit (EBIT) by country, EUR million
2010 2009 2009 2009 2009
1-3 10-12 7-9 4-6 1-3
Finland 22.6 33.9 28.1 25.6 22.7
Sweden 5.8 7.9 4.1 - 6.2 - 8.8
International - 1.4 2.4 0.9 - 6.2 - 3.7
Group operations - 8.2 - 10.5 - 6.8 - 2.8 - 5.3
Operating profit (EBIT) 18.8 33.7 26.3 10.4 4.9
Operating margin (EBIT) by country, %
2010 2009 2009 2009 2009
1-3 10-12 7-9 4-6 1-3
Finland 10.2 14.6 14.1 11.1 10.0
Sweden 4.9 6.3 4.0 -5.3 -7.4
International -1.0 1.7 0.7 -4.3 -2.6
Operating margin (EBIT) 4.5 7.7 6.9 2.3 1.1
Major shareholders 31 March 2010
Shares %
1 Swedbank Robur fonder 3 689 284 5.1
2 Ilmarinen Mutual Pension Insurance Co. 2 972 367 4.1
3 OP-Pohjola Group 2 587 963 3.6
4 Svenska Litteratursällskapet i Finland 1 567 000 2.2
5 Tapiola Pension 1 530 000 2.1
6 Varma Mutual Pension Insurance Co. 1 249 749 1.7
7 The State Pension Fund 1 190 634 1.7
8 Didner & Gerge Aktiefond 971 296 1,3
9 Skandinaviska Enskilda Banken AB 870 000 1.2
10 SEB Investment Management 742 473 1.0
17 370 766 24.1
Nominee registered 43 705 921 60.7
Others 10 946 486 15.2
Total 72 023 173 100.0
Based on the ownership records of Euroclear Finland Oy and Euroclear Sweden AB.
Based on the latest information (15 March 2010), Cevian Capital´s holding was
4 969 385 shares, which represent 6.8% of the shares and voting rights.
On 23 March 2010, Goldman Sachs announced that its holding was 3 640 745 shares,
which represents 5.0% of the shares and voting rights.
On 8 April 2010, Solidium announced that its holding was 3 616 863 shares, which
represents 5.0% of the shares and voting rights.
On 8 April 2010, Goldman Sachs announced that its group holding has fallen below
5.0% threshold.
For further information, please contact:
Hannu Syrjälä, President and CEO, tel. +358 2072 68729, hannu.syrjala(at)tieto.com
Seppo Haapalainen, CFO, tel. +358 2072 63500, +358 400 455587,
seppo.haapalainen(at)tieto.com
Reeta Kaukiainen, VP, Communications and Investor Relations, tel. +358
20
Unternehmensinformation / Kurzprofil:
Datum: 27.04.2010 - 07:02 Uhr
Sprache: Deutsch
News-ID 19698
Anzahl Zeichen: 0
contact information:
Town:
Helsinki
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 216 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"TIETO's interim report 1/2010 (January-March): Profitability improves, sales slightly down"
steht unter der journalistisch-redaktionellen Verantwortung von
Tieto Oyj (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
