Tieto Corporation STOCK EXCHANGE RELEASE 19 April 2013, 9.00 am EET
Tieto's new business structure and operating model took effect at the beginning of 2013. The new structure is based on service lines and industry groups. In line with the new operating model, Tieto changed its financial reporting at the beginning of 2013. The first interim report for 2013 to be published on 25 April will be prepared in accordance with the new reporting structure.
The service lines are:
- Managed Services
- Consulting and System Integration
- Industry Products
- Product Engineering Services.
They constitute the main operating segments. Tieto will disclose the customer sales and operating profit among others of the service lines.
Additionally, Tieto will disclose customer sales by industry groups, which are:
- Financial Services
- Manufacturing, Retail and Logistics
- Public, Healthcare and Welfare
- Telecom, Media and Energy.
Due to an amendment of IAS 19 ‘Employee benefits’, there will be a change in the calculation of pension liability. The related finance costs are calculated on a net funding basis and presented in financial items. This change has an impact of EUR 1.7 million on the company’s annual-level operating profit. On the other hand, this amount will increase finance costs. Based on the change, Tieto has restated its operating profit (EBIT) for 2012 as EUR 63.0 million (previously EUR 61.3 million) and operating profit (EBIT) excl. one-off items for 2012 as EUR 138.8 million (previously EUR 137.1 million). The net result remains unchanged.
Tieto's financial reporting for 2012 has been adjusted to account for the changes. The figures may still be subject to changes during the year. The tables below are also available in Excel format at www.tieto.com/Investors.
| Customer sales by service line, EUR million | |||||
| 2012 | 2012 | 2012 | 2012 | 2012 | |
| 1-3 | 4-6 | 7-9 | 10-12 | 1-12 | |
| Managed Services | 124 | 121 | 112 | 127 | 484 |
| Consulting and System Integration | 127 | 125 | 116 | 131 | 500 |
| Industry Products | 130 | 127 | 118 | 134 | 510 |
| Product Engineering Services | 86 | 83 | 77 | 87 | 331 |
| Group total | 467 | 456 | 424 | 479 | 1 825 |
| Customer sales by industry group, EUR million | |||||
| 2012 | 2012 | 2012 | 2012 | 2012 | |
| 1-3 | 4-6 | 7-9 | 10-12 | 1-12 | |
| Financial Services | 94 | 92 | 85 | 97 | 368 |
| Manufacturing, Retail and Logistics | 82 | 81 | 75 | 85 | 322 |
| Public, Healthcare and Welfare | 112 | 110 | 102 | 115 | 439 |
| Telecom, Media and Energy | 93 | 91 | 85 | 96 | 364 |
| Product Engineering Services | 86 | 83 | 77 | 87 | 331 |
| Group total | 467 | 456 | 424 | 479 | 1 825 |
The new operating model taken into use in 2013 is steered based on project performance and direct costs are linked to deliveries in the service lines. The calculation of operating margin percentages is based on customer sales by service lines as internal invoicing between legal entities based on transfer pricing requirements is reported within Steering Functions and Global Management.
| Operating profit (EBIT) by service line, EUR million | |||||
| 2012 | 2012 | 2012 | 2012 | 2012 | |
| 1-3 | 4-6 | 7-9 | 10-12 | 1-12 | |
| Managed Services | -2.5 | -3.7 | 7.5 | 5.1 | 6.4 |
| Consulting and System Integration | 12.7 | 3.9 | 13.0 | 4.5 | 34.0 |
| Industry Products | 32.4 | 8.4 | 13.0 | 11.4 | 65.2 |
| Product Engineering Services | 2.5 | -3.9 | 0.4 | -23.9 | -24.9 |
| Steering Functions and Global Management | -3.0 | -8.0 | -1.8 | -5.0 | -17.8 |
| Operating profit (EBIT) | 42.1 | -3.3 | 32.0 | -7.8 | 63.0 |
| Operating margin (EBIT) by service line, % | |||||
| 2012 | 2012 | 2012 | 2012 | 2012 | |
| 1-3 | 4-6 | 7-9 | 10-12 | 1-12 | |
| Managed Services | -2.0 | -3.1 | 6.6 | 4.1 | 1.3 |
| Consulting and System Integration | 9.9 | 3.1 | 11.2 | 3.4 | 6.8 |
| Industry Products | 24.9 | 6.6 | 11.0 | 8.5 | 12.8 |
| Product Engineering Services | 3.0 | -4.7 | 0.5 | -27.7 | -7.5 |
| Operating margin (EBIT) | 9.0 | -0.7 | 7.6 | -1.7 | 3.4 |
| Adjusted operating profit (EBIT) by service line, EUR million | ||||||||
| 2012 | 2012 | 2012 | 2012 | 2012 | ||||
| 1-3 | 4-6 | 7-9 | 10-12 | 1-12 | ||||
| Managed Services | -2.1 | 7.2 | 9.3 | 9.9 | 24.3 | |||
| Consulting and System Integration | 12.7 | 11.3 | 13.6 | 18.5 | 56.1 | |||
| Industry Products | 17.1 | 12.6 | 14.2 | 18.6 | 62.5 | |||
| Product Engineering Services | 3.5 | 2.2 | 1.6 | 2.3 | 9.7 | |||
| Steering Functions and Global Management | -2.9 | -4.7 | -1.2 | -5.1 | -13.8 | |||
| Operating profit (EBIT) | 28.4 | 28.6 | 37.5 | 44.2 | 138.8 | |||
| Excl. capital gains, impairments and restructuring costs | ||||||||
| Adjusted operating margin (EBIT) by service line, % | ||||||||
| 2012 | 2012 | 2012 | 2012 | 2012 | ||||
| 1-3 | 4-6 | 7-9 | 10-12 | 1-12 | ||||
| Managed Services | -1.7 | 5.9 | 8.3 | 7.8 | 5.0 | |||
| Consulting and System Integration | 10.0 | 9.0 | 11.6 | 14.0 | 11.2 | |||
| Industry Products | 13.1 | 9.9 | 12.0 | 13.9 | 12.3 | |||
| Product Engineering Services | 4.1 | 2.6 | 2.1 | 2.7 | 2.9 | |||
| Operating margin (EBIT) | 6.1 | 6.3 | 8.9 | 9.2 | 7.6 | |||
| Excl. capital gains, impairments and restructuring costs | ||||||||
| Personnel by service line, end of period | ||||
| 2012 | 2012 | 2012 | 2012 | |
| 1-3 | 4-6 | 7-9 | 10-12 | |
| Managed Services | 3 448 | 3 369 | 3 340 | 3 228 |
| Consulting and System Integration | 4 800 | 4 675 | 4 596 | 4 104 |
| Industry Products | 3 621 | 3 572 | 3 579 | 3 550 |
| Product Engineering Services | 4 694 | 4 615 | 4 481 | 4 310 |
| Service Lines total | 16 564 | 16 232 | 15 996 | 15 192 |
| Industry Groups | 722 | 697 | 640 | 607 |
| Steering Functions and Global Management | 835 | 794 | 768 | 738 |
| Group total | 18 121 | 17 723 | 17 404 | 16 537 |
| Depreciation by service line, EUR million | |||||||||||||||||
| 2012 | 2012 | 2012 | 2012 | 2012 | |||||||||||||
| 1-3 | 4-6 | 7-9 | 10-12 | 1-12 | |||||||||||||
| Managed Services | 16.2 | 16.3 | 17.2 | 17.4 | 67.0 | ||||||||||||
| Consulting and System Integration | 0.2 | 0.2 | 0.3 | 0.2 | 1.0 | ||||||||||||
| Industry Products | 0.2 | 0.3 | 0.3 | 0.3 | 1.1 | ||||||||||||
| Product Engineering Services | 0.2 | 0.2 | 0.2 | 0.2 | 0.9 | ||||||||||||
| Steering Functions and Global Management | 2.4 | 2.5 | 2.4 | 2.4 | 9.6 | ||||||||||||
| Group total | 19.2 | 19.5 | 20.4 | 20.5 | 79.7 | ||||||||||||
| Amortization on allocated intangible assets from acquisitions by service line, EUR million | |||||||||||||||||
| 2012 | 2012 | 2012 | 2012 | 2012 | |||||||||||||
| 1-3 | 4-6 | 7-9 | 10-12 | 1-12 | |||||||||||||
| Managed Services | 0.7 | 0.7 | 0.7 | 0.6 | 2.6 | ||||||||||||
| Consulting and System Integration | 0.2 | 0.2 | 0.2 | 0.2 | 0.6 | ||||||||||||
| Industry Products | 0.5 | 0.4 | 0.3 | 0.3 | 1.5 | ||||||||||||
| Product Engineering Services | 0.2 | 0.2 | 0.2 | 0.0 | 0.6 | ||||||||||||
| Steering Functions and Global Management | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||
| Group total | 1.5 | 1.4 | 1.4 | 1.0 | 5.3 | ||||||||||||
| Impairment losses by service line, EUR million | |||||||||||||||||
| 2012 | 2012 | 2012 | 2012 | 2012 | |||||||||||||
| 1-3 | 4-6 | 7-9 | 10-12 | 1-12 | |||||||||||||
| Managed Services | 0.5 | 0.0 | 0.0 | 0.5 | 1.0 | ||||||||||||
| Consulting and System Integration | 0.0 | 0.0 | 0.0 | 11.5 | 11.5 | ||||||||||||
| Industry Products | 0.0 | 0.0 | 0.0 | 6.5 | 6.5 | ||||||||||||
| Product Engineering Services | 0.0 | 0.0 | 0.0 | 15.1 | 15.1 | ||||||||||||
| Steering Functions and Global Management | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||
| Group total | 0.5 | 0.0 | 0.0 | 33.6 | 34.1 | ||||||||||||
For further information, please contact:
Lasse Heinonen, CFO, tel. +358 2072 66329, +358 50 393 4950, lasse.heinonen(at)tieto.com
Tanja Lounevirta, Head of Investor Relations, tel. +358 2072 71725, +358 50 321 7510, tanja.lounevirta(at)tieto.com
TIETO CORPORATION
DISTRIBUTION
NASDAQ OMX Helsinki
NASDAQ OMX Stockholm
Principal Media
Tieto is the largest Nordic IT services company providing full life-cycle services for both the private and public sectors. The company has global presence through its product engineering business and global delivery centres. Tieto is committed to developing enterprises and society through IT by realizing new opportunities in customers’ business transformation. At Tieto, we believe in professional development and results.
Founded 1968, headquartered in Helsinki, Finland and with approximately 17 000 experts, the company operates in over 20 countries with net sales of approximately EUR 1.8 billion. Tieto’s shares are listed on NASDAQ OMX in Helsinki and Stockholm. Please visit www.tieto.com for more information.