New Tieto Knowledge. Passion. Results.

Transcription

1 New Tieto Knowledge. Passion. Results. Hannu Syrjälä President and CEO Annual General Meeting 26 March 2009

2 Tieto in brief Leading IT services provider in Northern Europe #1 IT services provider in Finland #1 in project services in the Nordic countries #1 in telecom R%D in Europe; strong position globally Net sales EUR million employees in close to 30 countries Founded in 1968 Listed on the Nasdaq OMX Helsinki and Stockholm

3 Tieto in 2008 Net sales grew by 5% Weakened Swedish krona and soft demand in the telecom and banking sectors slowed down growth towards the end of the year Profitability improved clearly from 2007 Launch of the new strategy in summer 2008 Clear focus New Leadership Team Values-based leadership New structure and operating model as of 2009 Performance Improvement Programme EUR 120 million cost savings reached at the end of % of employees in global delivery centres aim is 40 % in 2011 Significant agreements: TeliaSonera, OP-Pohjola Renewed brand: TietoEnator Tieto

4 Key figures 2008 Financials Net sales, EUR million % Operating profit, EUR million including one-off items Operating profit, EUR million excluding one-off items* % EBIT*, % EPS, EUR Gearing, % Net cash flow % Personnel at the end of the year Dividend proposal EUR 0.50 per share * Excl. one-off items related to the Performance Improvement Programme, capital gains/losses, badwill and impairment losses

5 Net sales and operating profit MEUR Net sales Net sales by country in % 8% 14% Finland 27% 46% Sweden Germany Norway Other Operating profit and margin Personnel by country MEUR % % 4% 5% 7% 9% 20% 36% Finland Sweden Czech Germany India Norway Other

6 Business Area EBIT* (%) in 2008 % Banking & Telecom & Media Government, Healthcare & Forest & Energy Processing & Insurance Manufacturing & Retail * Excl. one-off items related to the Performance Improvement Programme, capital gains/losses, badwill and impairment losses Welfare Network

7 25% of employees in global delivery centres Offshoring ratio Global delivery centres % 25 % 20 % 15 % Lithuania Vilnius Latvia Riga Belarus Minsk China Beijing, Chengdu % % 0 0 % Czech and Poland Baltics, Russia and Belarus India, Chicna, Malaysia and Indonesia Total % Czech Ostrava Poland Wroclaw, Stettin India Pune, Hyderabad Malaysia Kuala Lumpur

8 Top 10 customers in 2008 Top 10 customers account for around 32% of net sales Apoteket Healthcare & Welfare Ericsson Telecom & Media If insurance Banking & Insurance Kesko Government, Manufacturing & Retail The National Board of Taxes (FI) Nokia Telecom & Media Nokia Siemens Network Telecom & Media Government, Manufacturing & Retail Nordea Banking & Insurance Stora Enso Forest & Energy TeliaSonera Telecom & Media No customer exceeds 10% in net sales

9 New strategy

10 Mission, vision and long-term financial targets Values We work together We care for our people & customers We are committed to quality We learn and grow Mission Turning knowledge and passion into sustainable results for our customers. Customer centricity Long-term financial targets Organic growth outpacing the relevant market. Growth strategy is supported by acquisitions. Operating profit (EBIT) more than 10% of net sales Gearing 40% Dividend payout ratio of around 50% of net income including one-time items. However, the annual dividend payout ratio will depend on the financial position and the major investment needs of the company. 10

11 Sharper business scope Tieto is an IT services company focusing on serving large and medium-sized organisations Geographical focus Growth focus Service focus Northern Europe Germany Russia Telecom Sweden Russia IT R&D Consulting Better service Higher productivity New opportunities Improved profitability 11

12 Business mix Project services Application management ICT infrastructure services Products Other Share ~ 30% ~ 30% ~ 25% 10 15% <10% Demand during downturn Some impact Good Good Some impact Mixed Project services Application management ICT infrastructure services Products Other

13 New operating model drives customer value Industries Telecom Financial Services Forest Energy Healthcare & Welfare Manufacturing Public Retail Media Service lines IT Services R&D Services Digital Transformation & Consulting (DTC) Countries Finland Sweden Norway Denmark Germany Russia International countries CUSTOMER VALUE & PROMISE 13

14 The new Leadership Team Hannu Syrjälä President and CEO Eva Gidlöf Country Head, Sweden Kavilesh Gupta Service Lines Seppo Haapalainen CFO Ari Karppinen Country Head, Finland Bengt Möller Telecom and Media J. Pyykönen-Walker Human Resources Ari Vanhanen Industry group Pekka Viljakainen CMO; International Per Johanson will start as head of Financial Services as of 16 May.

15 Tieto Turnaround Programme

16 Tieto Turnaround Q4/07 Q1/08 Start actions Q2 Q3 /08 Form detail strategy & organisation Performance Organization Strategy Quality Q4/08 Q1/09 Implement strategy & organisation Transformation to New Tieto 2009 Create sustainable performance 16

17 Tieto Turnaround Q4/07 Q1/08 Start actions Launch performance improvement Appoint new CEO Set detailed strategic direction Clean up risk projects Q2 Q3 /08 Form detail strategy & organisation Design new organization Detail strategy Q4/08 Q1/09 Implement strategy & organisation Execute on performance improvement plans New organization and people in place Start portfolio changes Continue risk management and quality improvements Transformation to New Tieto 2009 Create sustainable performance Complete performance improvement plan Operational excellence Complete portfolio changes New culture of quality and high performance 17

18 Tieto Turnaround Q4/07 Q1/08 Start actions COMPLETED Launch performance improvement COMPLETED Appoint new CEO COMPLETED Set detailed strategic direction Clean up risk projects COMPLETED Q2 Q3 /08 Form detail strategy & organisation COMPLETED Design new organization COMPLETED Detail strategy Q4/08 Q1/09 Implement strategy & organisation Execute on performance improvement plans New organization and people in place Start portfolio changes Continue risk management and quality improvements Transformation to New Tieto 2009 Create sustainable performance Complete performance improvement plan Operational excellence Complete portfolio changes New culture of quality and high performance 18

19 Year 2009 outlook and ongoing actions

20 2009 highlights Increased collaboration with many customers including Fonecta: infrastructure services Nokia Siemens Networks: R&D Ruukki: continuation of service agreement New data centre opened in St Petersburg Per Johansson appointed as head of Financial Services and member of teh Leadership Team Personnle adjustments redcution need 350 Sweden: 170 Norway, Denmark, Germany, Latvia, India and Great-Britain: in total 190

21 Outlook for 2009 updated 23 March Tieto arvioi, että sen koko vuoden liikevaihto laskee vuodesta The impacts of the economic downturn have hit the IT sector harder and faster than earlier expected, and uncertainty prevails over the future development of the IT market. Decline in demand, especially in the telecom and banking sectors, has continued. Tieto's January-February net sales amounted to EUR 275 million representing a 12% decline from the corresponding period in Approximately half of this decline is due to the weakened currencies. The decline in net sales will have a negative impact on Tieto's profitability. New streamlining actions started to reach additional cost savings in the amount of EUR 100 million euros. Decreased use of subcontractors Consolidation of offices Cutting business expenses Personnel adjustments Tieto expects the IT services market to decline and tough market conditions to continue.

22 Summary Tieto s sales and profitability improved in Significant changes in Tieto s structure and operations to support Tieto s future success. Relentless execution of strategy continues in accordance with the strategy approved by the Board of Directors. Market environment is challenging, and Tieto will adjust its operations according to the current demand.

23 Knowledge. Passion. Results.