Tieto's profitability improves, sales slightly down
(Thomson Reuters ONE) -
Tieto Corporation Press Release 27 April 2010 at 08.05 am EET
This is a press release without tables. You can download the complete version
using this link (pdf):
http://hugin.info/3114/R/1408428/361156.pdf
First-quarter net sales declined by 3% and amounted to EUR 422.9 (438.0)
million. In most industries, outsourcing activity was at a good level and the
sales pipeline is strong, but that did not translate to growth yet.
Outsourcing-related sales grew during the first quarter, but that did not
compensate for the decline in project-based business.
Thanks 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. First-quarter operating
profit amounted to EUR 18.8 (4.9) million. Operating profit excluding one-off
items amounted to EUR 26.6 (14.8) million, or 6.3% (3.4) of net sales. Profit
before taxes totalled EUR 17.7 (2.1) million and earnings per share amounted to
EUR 0.17 (0.01) in the first quarter.
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. At Tieto, the share of employees in the global delivery centres stood at
32% at the end of March.
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.
President and CEO Hannu Syrjälä:
"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."
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,seppo.haapalainen(at)tieto.com
Reeta Kaukiainen, VP, Communications and Investor Relations, tel. +358
2072 68711,
+358 50 522 0924,reeta.kaukiainen(at)tieto.com
Pasi Hiedanpää, Manager, Investor Relations, tel. +358 2072 68088, +358
50 3782228, pasi.hiedanpaa(at)tieto.com
TIETO CORPORATION
DISTRIBUTION
Principal media
Tieto is an IT service company providing IT, R&D and consulting services. With
approximately 17 000 experts, we are among the leading IT service companies in
Northern Europe and the global leader in selected segments. We specialize in
areas where we have the deepest understanding of our customers' businesses and
needs. Our superior customer centricity and expertise in digital services set us
apart from our competitors.
www.tieto.com
[HUG#1408459]
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Datum: 27.04.2010 - 07:05 Uhr
Sprache: Deutsch
News-ID 19699
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