CCR World Magazine

Tieto's interim report 4/2009 (January–December) and financial statements bulletin 2009 showed that the profitability improvement continued in the fourth quarter.

October–December highlights

Net sales totalled EUR 440.6 (492.0) million, down 10%. Changes in exchange rates had only a minor impact on net sales. Operating profit amounted to EUR 33.7 (23.6) million, representing an operating margin of 7.6% (4.8). Operating profit excluding one-off items amounted to EUR 38.5 (42.4) million, 8.7% (8.6) of net sales.

Profit after taxes was EUR 25.7 (1.8) million. Net cash flow from operations amounted to EUR 71.7 (78.2) million.Streamlining actions progressed according to plan during the quarter. The company met its cost base reduction target of EUR 70 million for the full year.

January–December highlights

Net sales totalled EUR 1 706.3 (1 865.7) million, down 9%. In local currencies, net sales declined by 6%. Operating profit amounted to EUR 75.3 (111.6) million, representing an operating margin of 4.4% (6.0). Operating profit, excluding one-off items, amounted to EUR 108.0 (149.9) million, 6.3% (8.0) of net sales.

Profit after taxes was EUR 55.1 (60.5) million. Net cash flow from operations amounted to EUR 126.4 (191.0) million. Dividend proposal: EUR 0.50 (0.50) per share.

In 2010, Tieto expects its net sales to develop in line with the IT services market relevant to Tieto and its operating profit to be higher than in 2009.

Hannu Syrjälä, President and CEO:

“The final quarter of 2009 was two-folded for Tieto – we improved our profitability from the previous three quarters, but at the same time our net sales continued to decline as a result of lower volumes and price pressure. We achieved an EBIT margin of 7.6% in the fourth quarter due to disciplined implementation of planned streamlining measures. Going forward, profitability improvement will continue to be high on our agenda, but we are starting to focus more on growth.

"On the whole, year 2009 was exceptionally challenging. We implemented a new operating model and business structure and at the same time we tackled the impacts of lower demand for our services. Despite the tough market environment, we reached many of the goals set for 2009. In addition to cutting costs and improving the efficiency of our onshore operations, we increased our offshoring according to our plans. By the end of 2009, we had achieved the EUR 70 million savings target and our offshoring rate i.e. share of personnel in global delivery centres was at 30%. As a result of the work done in the past two years, Tieto is now a much stronger company and well positioned for the future.”

(Source - Tieto’s Interim Report)