Tietoevry CorporationINTERIM REPORT 26 October 2023, 8.00 a.m. EEST
. Growth 2% - solid performance in software businesses, weaker demand in
Tietoevry Create and Tech Services
. Profitability of 13% despite softer market and continued high
inflation - improved profitability in Tietoevry Industry and Tech Services
. MentorMate acquisition closed in the third quarter - business
performance and integration progressing as planned
. Strategic reviews of Tietoevry Banking and Tech Services on track with
earlier announced schedules
The full interim report with tables is available at the end of this release.
7-9/2023 7-9/2022
Revenue, EUR million 659.7 690.4
Change, % -4 7
Organic growth, % 2 8
Operating profit (EBIT), EUR million 61.6 77.5
Operating margin (EBIT), % 9.3 11.2
Adjusted operating profit (EBITA), EUR million 85.6 97.9
Adjusted operating margin (EBITA), % 13.0 14.2
EPS, EUR 0.37 0.50
Net cash flow from operations, EUR million -2.0 40.2
Capital expenditure, EUR million 17.7 23.6
Full-year outlook for 2023
The company updated its full-year outlook on 19 September:
Tietoevry expects its organic1) growth to be approximately 4% (revenue in 2022:
EUR 2 928.1 million).
The company estimates its full-year adjusted operating margin2) (adjusted
EBITA3)) to be 12.6-13.0% (13.0% in 2022)
1) Adjusted for currency effects, acquisitions and divestments
2) Adjustment items include restructuring costs, capital gains/losses,
impairment charges and other items affecting comparability
3) Profit before interests, taxes and amortization of acquisition-related
intangible assets
CEO's comment
Comment regarding the interim report by Kimmo Alkio, President and CEO:
"In the third quarter, we had mixed performance reflecting weaker market demand.
Organic growth of 2% was driven by our software businesses, especially Tietoevry
Banking with revenue up by 11%. On the other hand, Tietoevry Create and Tech
Services were impacted by macroeconomic uncertainty, which has resulted in
weaker demand. Furthermore, Tietoevry Create is impacted by the prolonged war,
materializing as a decline in our Ukrainian business.
Our profitability was healthy at 13.0% despite the changes in the market
environment and continued high inflation. I am pleased to see the improvement in
Tietoevry Tech Services' profitability, resulting from the solid execution of
the efficiency measures initiated before the summer. Also, Tietoevry Industry
improved its performance as planned and Tietoevry Care continued to post strong
profitability in the third quarter. Our third-quarter order intake reflects
seasonality and the changed market sentiment.
We continue to make progress with our strategy execution with a focus on
improving the competitiveness and performance of our specialized businesses and
to reposition Tietoevry as a leading software and digital engineering player
globally. The strategic reviews of Tietoevry Banking and Tech Services and the
acquisition of MentorMate play an important role in the strategy execution. In
Tietoevry Banking, we continue to make good progress in building the management
team, finalizing strategy and establishing operations as a fully independent
company. Conclusions from the Tietoevry Banking strategic review are expected
during early 2024, as announced in July. In Tietoevry Tech Services, operational
simplification and performance uplift is ongoing, and the overall timeline is in
line with the original plan.
The acquisition of MentorMate, a US-based digital engineering company, advances
Tietoevry Create's strategic ambition to become a leading digital engineering
player globally. The acquisition significantly strengthens Tietoevry Create's
North American customer base and digital engineering capabilities across design,
data, cloud and AI. With business based on the latest technologies, large
customers and long engagements, MentorMate is performing as planned, despite
softer market conditions.
Our hearts and minds remain with our colleagues in Ukraine as the devastating
situation in the country continues. We are proud of our Ukrainian colleagues and
will keep supporting them and their families with all possible measures.
We continue to believe in the foundation new technologies such as cloud, data
and artificial intelligence will bring to our customers - also enabling
productivity improvements in our operations. With this evolution, we actively
drive our strategic agenda and renewal towards scalable software and digital
engineering businesses. In light of the uncertainties in the current
macroeconomic and geopolitical environment, we continue to focus on operational
and financial resilience across the company."
Financial performance by segment
Revenue, Revenue, Growth, Organic Adjusted Adjusted
Adjusted Adjusted
% growth, operating operating
operating operating
EUR EUR %
million million profit, profit,
margin, % margin, %
EUR EUR
million million
7-9/2023 7-9/2022 7-9/2023 7-9/2022 7-9/2023 7-9/2022
Tietoevry 195.5 203.8 -4 -4 21.5 27.1 11.0
13.3
Create
Tietoevry 135.4 135.6 0 11 18.0 21.2 13.3
15.6
Banking
Tietoevry 52.3 53.6 -2 3 15.9 18.2 30.4
33.9
Care
Tietoevry 61.4 64.1 -4 6 10.9 10.8 17.7
16.8
Industry
Tietoevry 242.9 272.6 -11 -4 23.0 25.3 9.5
9.3
Tech
Services
Eliminations -27.8 -39.4 - - -3.7 -4.6 -
-
and
non
-allocated
costs
Group total 659.7 690.4 -4 2 85.6 97.9 13.0
14.2
For further information, please contact:
Tomi Hyryläinen, Chief Financial Officer, tel. +358 50 555 0363, tomi.hyrylainen
(at) tietoevry.com
Tommi Järvenpää, Head of Investor Relations, tel. +358 40 576 0288,
tommi.jarvenpaa (at) tietoevry.com
A teleconference for analysts and media will be held on Thursday 26 October 2023
at 10.00 a.m. EEST (09.00 am CET, 08.00 am. UK time). Kimmo Alkio, President and
CEO, and Tomi Hyryläinen, CFO, will present the results online in English. The
presentation (https://tieto.videosync.fi/q3-2023-results) can be followed on
Tietoevry's website (http://www.tietoevry.com/investors).
To take part in the questions and answers session after the presentation you
will need to dial in by phone. You can access the teleconference by registering
on this link (https://palvelu.flik.fi/teleconference/?id=10010587). After the
registration you will be provided phone numbers and a conference ID to access
the conference.
The event is recorded and it will be available on demand later during the day.
Tietoevry publishes its financial information in English and Finnish.
Tietoevry Corporation
DISTRIBUTION
Nasdaq Helsinki
Nasdaq Stockholm
Oslo Børs
Principal Media
Tietoevry creates purposeful technology that reinvents the world for good. We
are a leading technology company with a strong Nordic heritage and global
capabilities. Based on our core values of openness, trust and diversity, we work
with our customers to develop digital futures where businesses, societies, and
humanity thrive.
Our 24 000 experts globally specialize in cloud, data, and software, serving
thousands of enterprise and public-sector customers in more than 90 countries.
Tietoevry's annual turnover is approximately EUR 3 billion and the company's
shares are listed on the NASDAQ exchange in Helsinki and Stockholm, as well as
on Oslo Børs. www.tietoevry.com