Tietoevry's Interim Report 4/2021: Solid organic growth of 3% and strong cash flow
- Growth driven by software businesses and over 20% growth in Product Development Services and International Operations
- Strong wins during the quarter – order backlog up by 5% YoY and 11% QoQ
- Healthy adjusted operating margin of 13.9% – strong cash flow
- Dividend proposal EUR 1.40 per share
- Performance acceleration in Cloud & Infra to drive cloud growth and achieve adjusted EBITA margin of over 10% by 2023 – annual savings target of EUR 50 million announced
TietoEVRY Corporation’s ("Tietoevry") full interim report with tables is available as an attachment at the end of this release.
|
|
10–12/2021 |
10–12/2020 |
|
Revenue, EUR million |
742.0 |
712.0 |
|
Change, % |
4.2 |
31.2 |
|
Organic growth1), % |
2.7 |
-6.3 |
|
Operating profit (EBIT), EUR million |
113.4 |
77.8 |
|
Operating margin (EBIT), % |
15.3 |
10.9 |
|
Operating profit (EBITA3)), EUR million |
125.3 |
89.2 |
|
Operating margin (EBITA3)), % |
16.9 |
12.5 |
|
Adjusted2) operating profit (EBITA3)), EUR million |
103.3 |
106.4 |
|
Adjusted2) operating margin (EBITA3)), % |
13.9 |
14.9 |
|
Adjustment items2), EUR million |
22.0 |
-17.2 |
|
Order backlog, EUR million |
3 513 |
3 350 |
|
Net debt/EBITDA |
1.1 |
2.5 |
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 2022
Tietoevry expects its organic1) growth to be 2% to 4% (revenue in 2021: EUR 2 823.4 million). The company estimates its full-year adjusted operating margin2) (adjusted EBITA) to be 13.1–13.6% (13.0% in 2021).
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:
"In the fourth quarter, we had good momentum with a combination of 3% organic growth, strong order intake in key businesses, consistent profitability and strong cash flow. The Industry Software, Financial Services Solutions, Product Development Services and International Operations businesses continued to see strong growth. In our Digital Consulting business, order intake was very strong, while fourth-quarter revenue was still slightly declining. In Cloud and Infra, performance continued to improve, while not to desired levels. Hence, we have initiated performance acceleration to drive cloud growth and achieve further profit improvement. During the past quarter, the talent market remained dynamic, while attrition levels stabilized and we continued our high recruitment pace across all main markets with over 1 700 new hires.
For the full year 2021, overall business dynamics and performance development was favourable with the second half of the year turning to growth. Integration synergies have materialized well on schedule and contributed accordingly to our profitability improvement. The total performance of the company was driven especially by its strong software businesses, Product Development Services and International Operations – forming a solid ground for our future focus in cloud, data and software engineering. Full-year operating cash flow was at a record level, enabling continued attractive dividends, as proposed by the Board of Directors.
We see increasing interest from our customers for sustainability driven co-innovation. Digitalization is bringing new opportunities to significantly reduce emissions and environmental burden for our customers and society at large. During the year, we continued advancing our ESG agenda and aligned our CO2 reduction targets with the Science Based Targets initiative while our ambition for carbon neutrality in own operations by 2025 remains the next key milestone. Our long-term work towards gender balance ambitions continued, with progress in the share of women among new recruits up by 4 percentage points. Close to 80 different nationalities are represented amongst our personnel, well demonstrating that diversity is one of our core values.
During the year, we took a big step forward with the announcement of our new strategy – expected to benefit from the higher cloud-native, data and software-centric market opportunities. Through our six specialized end-to-end businesses and new investment priorities, we also expect to reach higher growth and realize further profitability expansion. The new structure of the company became effective on schedule on 1 January 2022.
Following our new strategy and to complete our two-year integration programme we kicked off the year by unveiling a renewed brand and identity as well as new names for the specialized businesses. In the core of the brand and identity is our new purpose: Creating purposeful technology to reinvent the world for good. This purpose reflects the company values of trust and openness, as well as the direction the world around us is taking. Now more than ever it matters for companies to be active on societal issues. We want to be the company that develops digital futures with humanity at the core.”
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), % |
|
| 10–12/2021 | 10–12/2020 | 10–12/2021 | 10–12/2020 | 10–12/2021 | 10–12/2020 | |||
| Digital Consulting | 176.3 | 172.8 | 2 | -1 | 24.8 | 29.9 | 14.1 | 17.3 |
| Cloud & Infra | 217.9 | 227.3 | -4 | -7 | 20.8 | 19.3 | 9.5 | 8.5 |
| Industry Software | 131.4 | 134.3 | -2 | 7 | 33.9 | 35.1 | 25.8 | 26.1 |
| Financial Services Solutions | 128.9 | 108.8 | 18 | 12 | 18.5 | 15.2 | 14.4 | 14.0 |
| Product Development Services | 44.0 | 36.0 | 22 | 20 | 5.3 | 5.0 | 12.0 | 13.8 |
| Other4) | 43.4 | 32.8 | 33 | 26 | 0.1 | 1.9 | — | — |
| Total | 742.0 | 712.0 | 4 | 3 | 103.3 | 106.4 | 13.9 | 14.9 |
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.
4) "Other" consists of International Operations, including digital consulting services for markets outside the Nordics. "Other" also includes unallocated Group costs.
For further information, please contact:
Tomi Hyryläinen, Chief Financial Officer, tel. +358 50 555 0363, tomi.hyrylainen (at) tietoevry.com
Kjell Arne Hansen, Head of Investor Relations, tel. +47 9504 0372, kjell.hansen (at) tietoevry.com
A teleconference for analysts and media will be held on Thursday 17 February 2022 at 10.00 am EET (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.
Teleconference numbers
Finland: +358 981 710 310
Sweden: +46 856 642 651
Norway: +47 235 002 43
United Kingdom: +44 333 300 0804
United States: +1 631 913 1422
PIN: 84678461#
To ensure that you are connected to the conference call, please dial in a few minutes before the start of the press and analyst conference. The teleconference 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
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