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2016-07-22

Tieto Oyj: Tieto's Interim Report 2/2016 - Growth of 5% - profit improvement continues

Tieto Corporation INTERIM REPORT 22 July 2016, 8.00 am EET

· Group sales growing by 5% driven by 12% growth in software-based
Industry Products

· Adjusted operating margin improves to above 9%
· Healthy profitability in Product Development Services
The full interim report with tables is available at the end of this
release

Key figures for the second quarter

IT services

· Sales growth totalled 6.1%, sales in local currencies up by 7.3%
· Adjusted operating profit amounted to EUR 32.4 (26.9) million,
9.3% (8.1) of sales

The Group

· Sales growth totalled 4.7%, sales in local currencies up by 5.9%
· Adjusted operating profit amounted to EUR 35.8 (30.1) million,
9.4% (8.3) of sales

· Order intake (Total Contract Value) at EUR 326 (340) million,
order backlog at EUR 1 757 (1 737) million - stronger order intake
expected for the second half

+------------------------+--------+--------+--------+--------+
| |4-6/2016|4-6/2015|1-6/2016|1-6/2015|
+------------------------+--------+--------+--------+--------+
|Net sales, EUR million | 381.0 | 363.8 | 748.5 | 729.4 |
+------------------------+--------+--------+--------+--------+
| Change, % | 4.7 | -5.8 | 2.6 | -5.7 |
+------------------------+--------+--------+--------+--------+
| Change in local | 5.9 | -4.5 | 3.6 | -3.6 |
|currencies, % | | | | |
+------------------------+--------+--------+--------+--------+
|Operating profit | 35.7 | 26.2 | 67.3 | 43.4 |
|(EBITA), EUR million 1) | | | | |
+------------------------+--------+--------+--------+--------+
|Operating margin | 9.4 | 7.2 | 9.0 | 5.9 |
|(EBITA), % | | | | |
+------------------------+--------+--------+--------+--------+
|Operating profit (EBIT),| 32.3 | 23.1 | 60.6 | 37.0 |
|EUR million | | | | |
+------------------------+--------+--------+--------+--------+
|Operating margin (EBIT),| 8.5 | 6.3 | 8.1 | 5.1 |
|% | | | | |
+------------------------+--------+--------+--------+--------+
|Adjusted 2) operating | 35.8 | 30.1 | 67.3 | 60.8 |
|profit (EBIT), EUR | | | | |
|million | | | | |
+------------------------+--------+--------+--------+--------+
|Adjusted 2) operating | 9.4 | 8.3 | 9.0 | 8.3 |
|margin (EBIT), % | | | | |
+------------------------+--------+--------+--------+--------+
|Profit after taxes, EUR | 24.2 | 17.4 | 45.7 | 26.5 |
|million | | | | |
+------------------------+--------+--------+--------+--------+
|EPS, EUR | 0.33 | 0.24 | 0.62 | 0.36 |
+------------------------+--------+--------+--------+--------+
|Net cash flow from |-13.7 | 12.4 | 33.2 | 49.1 |
|operations, EUR million | | | | |
+------------------------+--------+--------+--------+--------+
|Return on equity, 12 | 26.2 | 4.5 | 26.2 | 4.5 |
|-month rolling, % | | | | |
+------------------------+--------+--------+--------+--------+
|Return on capital | 25.9 | 7.5 | 25.9 | 7.5 |
|employed, 12-month | | | | |
|rolling, % | | | | |
+------------------------+--------+--------+--------+--------+
|Capital expenditure and | 11.8 | 10.6 | 21.2 | 22.2 |
|acquisitions, EUR | | | | |
|million | | | | |
+------------------------+--------+--------+--------+--------+
|Interest-bearing net | 103.3 | 5.3 | 103.3 | 5.3 |
|debt, EUR million | | | | |
+------------------------+--------+--------+--------+--------+
|Net debt/EBITDA | 0.5 | 0.0 | 0.5 | 0.0 |
+------------------------+--------+--------+--------+--------+
|Book-to-bill | 0.9 | 0.9 | 0.9 | 1.1 |
+------------------------+--------+--------+--------+--------+
|Order backlog | 1 757| 1 737 | 1 757| 1 737 |
+------------------------+--------+--------+--------+--------+
|Personnel on 30 June | 13 381 | 12 949| 13 381| 12 949|
+------------------------+--------+--------+--------+--------+

1) includes amortization of all intangible items; previously, only
acquisition-related intangible items included

2) adjusted for restructuring costs, capital gains/losses, goodwill
impairment charges and other items

Full-year outlook for 2016 unchanged

Tieto expects its adjusted1) full-year operating profit (EBIT) to
increase from the previous year's level (EUR 150.8 million in 2015).

1) adjusted for restructuring costs, capital gains/losses, goodwill
impairment charges and other items

CEO's comment

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

"It is gratifying to see good growth of 5% for the company, and
somewhat higher growth for our IT services business. Simultaneously,
our profitability development continued on a positive trend line and
we achieved an adjusted operating margin level of over 9%. During the
second quarter, our software-based industry solutions and Consulting
and System Integration delivered especially strong results. Also
Financial Services has consistently performed well.

I'm pleased to see our business strengthening based on continued
investments in future innovation and growth businesses. We are
maintaining our investment agenda in areas such as cloud computing,
Customer Experience Management, Industrial Internet, and new Security
Services. In addition, we invest in software-based industry solutions
to increase value for our customers and support our growth ambitions.

It is encouraging to see the good engagement we have been able to
create among our stakeholders after the launch of our new strategy.
We are building on this positive momentum and look forward to a good
second half of the year."

Financial performance by service line
+-------------------+---------+---------+---------+---------+---------+
|EUR million | Customer| Customer|Change, %|Operating|Operating|
| | sales| sales| | profit| profit|
| | 4-6/2016| 4-6/2015| | 4-6/2016| 4-6/2015|
+-------------------+---------+---------+---------+---------+---------+
|Managed Services | 134 | 131| 2 | 9.8| 3.1|
+-------------------+---------+---------+---------+---------+---------+
|Consulting and | 107| 101| 6| 10.9| 8.5|
|System Integration | | | | | |
+-------------------+---------+---------+---------+---------+---------+
|Industry Products | 110| 98| 12| 12.5| 10.8|
+-------------------+---------+---------+---------+---------+---------+
|Product Development| 31| 33| -9| 3.3| 5.7|
|Services | | | | | |
+-------------------+---------+---------+---------+---------+---------+
|Support Functions | | | | -4.2| -5.0|
|and Global | | | | | |
|Management | | | | | |
+-------------------+---------+---------+---------+---------+---------+
|Total | 381 | 364| 5 | 32.3| 23.1|
+-------------------+---------+---------+---------+---------+---------+

Operating margin by service line

+----------------+---------+---------+-----------+---------------------+
|% |Operating|Operating|Adjusted1) |Adjusted1) operating|
| | margin| margin| operating| margin|
| | 4-6/2016| 4-6/2015| margin| 4-6/2015|
| | | | 4-6/2016| |
+----------------+---------+---------+-----------+---------------------+
|Managed Services| 7.4 | 2.4| 7.4| 7.6|
+----------------+---------+---------+-----------+---------------------+
|Consulting and | 10.2| 8.4| 10.6| 8.6|
|System | | | | |
|Integration | | | | |
+----------------+---------+---------+-----------+---------------------+
|Industry | 11.4| 11.0| 12.9| 12.2|
|Products | | | | |
+----------------+---------+---------+-----------+---------------------+
|Product | 10.7| 17.1| 11.1| 9.6|
|Development | | | | |
|Services | | | | |
+----------------+---------+---------+-----------+---------------------+
|Total | 8.5| 6.3| 9.4| 8.3|
+----------------+---------+---------+-----------+---------------------+

1) adjusted for restructuring costs, capital gains/losses, goodwill
impairment charges and other items

Customer sales by industry group

+-----------------------------------+--------------+--------------+---------+
|EUR million |Customer sales|Customer sales|Change, %|
| | 4-6/2016| 4-6/2015| |
+-----------------------------------+--------------+--------------+---------+
|Financial Services | 93| 88| 5|
+-----------------------------------+--------------+--------------+---------+
|Manufacturing, Retail and Logistics| 82| 77| 6|
+-----------------------------------+--------------+--------------+---------+
|Public, Healthcare and Welfare | 120| 107| 13|
+-----------------------------------+--------------+--------------+---------+
|Telecom, Media and Energy | 56| 58| -3|
+-----------------------------------+--------------+--------------+---------+
|IT services | 350| 330| 6|
+-----------------------------------+--------------+--------------+---------+
|Product Development Services | 31 | 33| -9|
+-----------------------------------+--------------+--------------+---------+
|Total ...

Författare WKR

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