Tietoevry's Interim Report 4/2022: Strong growth and profitability

Tietoevry Corporation FINANCIAL STATEMENT RELEASE 15 February 2023   8.00 a.m. (EET)

 

• Growth of 9% driven by Tietoevry Create, Tietoevry Banking and Tietoevry Care
• Adjusted operating margin 15.4% driven by strong growth and performance improvement programmes
• Strategic reviews of Tietoevry Banking and Tietoevry Transform & Connect progressing according to the plans
• Increased dividend of EUR 1.45 (1.40) per share proposed

The full Financial Statement Release with tables is available at the end of this release.

	10–12/2022	10–12/2021	1–12/2022	1–12/2021
Revenue, EUR million	767.7	742.0	2 928.1	2 823.4
Change, %	3	4	4	1
Organic growth1), %	9	3	6	0
Operating profit (EBIT), EUR million	103.2	113.4	266.5	382.0
Operating margin (EBIT), %	13.4	15.3	9.1	13.5
Adjusted2) operating profit (EBITA3)), EUR million	118.0	103.3	379.2	367.8
Adjusted2) operating margin (EBITA3)), %	15.4	13.9	13.0	13.0
Adjustment items2), EUR million	-3.5	22.0	-66.0	61.5
Order backlog, EUR million	3 327	3 513	3 327	3 513
Net debt/EBITDA	1.5	1.1	1.5	1.1

 

1) Adjusted for currency effects and impact from 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.

 

Full-year outlook for 2023

 

Tietoevry expects its organic1) growth to be 5% to 7% (revenue in 2022: EUR 2 928.1 million).

 

The company estimates its full-year adjusted operating margin2) (adjusted EBITA) to be 13.0–13.5% (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.

 

CEO’s comment

 

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

 

"I’m excited by our very strong fourth-quarter performance as we achieved 9% growth and profitability of over 15%. The main business contributors for the quarter were our Banking and Care software businesses, as well as the globally expanding digital engineering -focused Create business. In the full year 2022, we were able to deliver healthy performance with 6% growth and 13.0% profitability – despite the challenging macroeconomic and geopolitical conditions. This favourable financial development enables us to continue on an attractive dividend path as proposed by the Board of Directors.

 

Overall, 2022 was a highly transformational year for Tietoevry as we began the execution of our new specialization-based strategy, including a fundamental change in the way we operate as a company. I thank all our employees for embracing this change and for their contributions across our operations globally. During the past year we have made solid progress in enhancing the competitiveness of our specialized businesses, identifying future avenues for profitable growth and expansion. On this note, our earlier announced strategic reviews for the Banking and Transform & Connect businesses continue to be on schedule.

 

We expect market conditions to remain encouraging for technology investments as customers across markets and industries are placing high emphasis on new technologies and skills to drive innovation and competitiveness in their core businesses. We expect demand for our software and digital engineering businesses to remain strong while we recognize the potential impact of macroeconomic development and the continued effects of inflation. In light of the shift in the business mix towards software and digital engineering, we anticipate favourable growth and profit development to continue towards our long-term financial ambition.

 

We are also delighted by the progress in both employee engagement and our sustainability agenda for the year 2022. Our employee engagement reached all-time high levels in a change-intensive era, underlining the importance of company values and support for employee well-being. It was also encouraging to see the positive trend in our reputation and employer image in several Nordic surveys. While we experienced a number of important and favourable developments in 2022 for the company, we wish to highlight our commitment to our Ukrainian colleagues and continue to take all possible measures to support their safety and well-being. 

 

In light of the continued increase in the importance of companies' social and environmental responsibility, we have progressed significantly in key areas of our sustainability agenda. During the year, we advanced in our three-year Sustainability Plan with commitments to the Science Based Targets with the highest ambition level and achieved the highest rankings on Ecovadis (Platinum) and CDP (A) evaluations.

 

Looking ahead, we are seizing the opportunities digitalization is bringing for our customers and for the society at large and are committed to continued sustainable development. As a company, we continuously strive for increased impact and value for the benefit of our customers, employees and shareholders.”

 

Financial performance by segment

	Revenue, EUR million	Revenue, EUR million	Growth, %	Organic growth, %3)	Adjusted1) operating profit2), EUR million	Adjusted1) operating profit2), EUR million	Adjusted1) operating margin2), %	Adjusted1) operating margin2), %
	10–12/2022	10–12/2021			10–12/2022	10–12/2021	10–12/2022	10–12/2021
Tietoevry Create	219.3	207.3	6	11	34.8	27.9	15.9	13.4
Tietoevry Banking	144.3	130.3	11	15	25.6	17.7	17.8	13.6
Tietoevry Care	63.0	57.1	10	14	20.3	19.0	32.2	33.4
Tietoevry Industry	69.7	74.6	-7	3	12.6	13.2	18.1	17.7
Tietoevry Transform	125.7	122.3	3	6	14.4	9.6	11.5	7.9
Tietoevry Connect	216.4	233.3	-7	-3	18.3	22.1	8.4	9.5
Eliminations and non-allocated costs	-70.7	-82.9	—	—	-7.9	-6.2	—	—
Group total	767.7	742.0	3	9	118.0	103.3	15.4	13.9

1) Adjustment items include restructuring costs, capital gains/losses, impairment charges and other items affecting comparability.

2) Profit before interests, taxes and amortization of acquisition-related intangible assets.

3) Adjusted for currency effects and impact from acquisitions and divestments.  

 

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 Wednesday 15 February 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 can be followed on Tietoevry's website.

 

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. 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