Tietoevry Corporation HALF-YEAR REPORT 22 July 2025, 9:00 a.m. (EEST)
- Soft market conditions continued - organic growth of -4%
- Profitability of 9.4% includes 1.3 pp negative impact of IFRS 5-related temporary cost burden
- Driving a rapid step change in execution and performance - actions aiming for EUR 115 million run-rate savings by the end of 2026
- Non-cash impairment of EUR 80 million related to capitalized development costs mainly for the Banking Platform in Norway
- Endre Rangnes appointed as President and CEO of Tietoevry - new leadership team to focus on customers and growth
On 23 March 2025, Tietoevry announced that it had entered into an agreement to divest its Tietoevry Tech Services business. Starting from the first quarter of 2025, Tietoevry has presented its Tech Services business as a discontinued operation. The financial information presented in this report concerns continuing operations, unless otherwise stated. The comparative information has been restated accordingly. Tietoevry published restated financial information for 2024 on 15 April 2025.
The full interim report with tables is available at the end of this release.
Continuing operations | 4-6/2025 | 4-6/2024 | 1-6/2025 | 1-6/2024 |
Revenue, EUR million | 463.1 | 478.9 | 933.9 | 971.4 |
Organic growth1), % | -4 | 1 | -4 | 1 |
Acquisitions and divestments, % | 0 | 3 | 0 | 3 |
Foreign exchange rates, % | 0 | 0 | 0 | -1 |
Total growth, % | -3 | 5 | -4 | 3 |
Organic growth adjusted for working days4), % | -3 | 0 | -3 | 1 |
Operating profit/loss (EBIT), EUR million | -66.1 | 30.7 | -40.1 | 72.8 |
Operating margin (EBIT), % | -14.3 | 6.4 | -4.3 | 7.5 |
Adjusted2) operating profit (EBITA3)), EUR million | 43.7 | 51.1 | 93.5 | 111.1 |
Adjusted2) operating margin (EBITA3)), % | 9.4 | 10.7 | 10.0 | 11.4 |
Continuing and discontinued operations combined | 4-6/2025 | 4-6/2024 | 1-6/2025 | 1-6/2024 |
Cash flow from operating activities, EUR million | 51.3 | 68.1 | 148.7 | 139.9 |
Interest-bearing net debt, EUR million | 875.4 | 932.3 | 875.4 | 932.3 |
Full-year outlook for 2025 unchanged
Tietoevry Tech Services is reported as a discontinued operation as from the first quarter and, consequently, Tietoevry's guidance reflects continuing operations.
Tietoevry expects its organic1) growth to be in the range of -2% to +1% (revenue in 2024: EUR 1 879.5 million). The company estimates its full-year adjusted operating margin2) (adjusted EBITA3)) to be 12.0-13.0% (12.0% in 2024).
The profitability outlook assumes a negative impact of approx. 1.1 percentage points on the adjusted operating margin (EBITA) related to IFRS 5. The impact includes an estimate of the costs that cannot be allocated to continuing operations and transition services income after the closing of the divestment of Tietoevry Tech Services.
1) Adjusted for currency effects, acquisitions and divestments
2) Adjustment items include restructuring costs, capital gains/losses, impairment charges and other items affecting comparability
3) Profit before interests, taxes, amortization of acquisition-related intangible assets, goodwill and other intangible asset impairment
4) Company estimate
Comment regarding the interim report by Endre Rangnes, President and CEO
A step change in execution and performance
"I am honored and excited to enter the CEO position of Tietoevry. During my nearly three months as the interim CEO of Tietoevry, I have spent a lot of time engaging with our people, customers and partners across the businesses. Focusing on areas that constitute the cornerstones of our future success, it has become clear that our company stands on a solid foundation. Today, we have a strong customer base with active innovation agendas in place. We also have a portfolio of leading-edge vertical software and digital consulting capabilities - and we see that we can unlock even more potential in these areas going forward. Furthermore, we have a global team of highly talented people who have been building the leading market positions of our businesses in the Nordics.
While we can recognize our strengths and achievements, we have not succeeded in delivering adequate financial performance and have suffered from lack of growth over an extended period of time. Based on our dialogue with several key stakeholders, we need to restore customer trust by strengthening our focus on clients and sales. Considering the highly competitive industry we operate in, our performance in these areas needs to be clearly improved.
Focus on customers, growth and cost base
We now need to take immediate action to get back on track and drive a step change in execution and performance. To drive a step change in strategy execution, we have launched the following near-term focus areas:
- Customer first
- Restore growth
- Competitive cost base.
As the first steps, we are taking decisive actions to strengthen customer-focused sales capabilities and processes to drive growth. Ensuring a continued competence shift to lead innovation for the benefit of our customers is of utmost importance. We are also launching a new cost optimization programme aiming to build a lean cost structure and adapting our cost level to account for the divestment of Tech Services. With the new programme, we seek to achieve savings of EUR 75 million by the end of 2026, in addition to those related to the initiatives decided in the first half of 2025. Altogether, these measures are estimated to result in run-rate savings of EUR 115 million by the end of 2026. Meeting these significant targets will also mean making some difficult decisions in the coming months.
Through the next phase with new leadership team
During the summer we have onboarded new members to our Group Executive Team. This team is well equipped to steer the company through the next phase, which will be demanding but should also be rewarding to all stakeholders.
Going forward, our strategic priority is clear - we aim to create sustainable value by focusing on customers and profitable growth. We foresee accelerated international growth for selected software products and AI-driven digital development, and we also strive to enter new geographic markets. As an example, Tietoevry Care is already making strides in expanding its European market presence through a collaboration project at Basel University Hospital in Switzerland. The inclusion of Tietoevry in the Gartner® Hype Cycle for Healthcare 2025 demonstrates our readiness to introduce our open modular data-driven care software beyond the Nordics. In addition, Tietoevry Banking has demonstrated good progress in Norway throughout the year, building confidence in our aspirations beyond the Nordics.
We will be presenting our strategic priorities in further detail for each business at the Capital Markets Day in November, focusing on how we will seize the growth and expansion opportunities, and we look forward to what the months ahead will bring.
Challenging quarter - while encouraging order backlog
As to the second quarter, we are not satisfied with our performance, with organic growth of -4% and a profit margin of 9.4%. The continued softness of the IT market impacted us, especially our Create business. The quarter ended, however, with a strong order backlog, organically up by 14% year-on-year, creating confidence in positive future development. In the second half of the year, one of the key milestones will be the closing of the Tech Services divestment, expected to take place during the third quarter. The market remains challenging, but we anticipate that our growth will improve during the second half. Revenue development coupled with progress in cost optimization measures and the ending of the negative IFRS 5 impact is anticipated to contribute to our profitability as well.
In line with our values, we have demonstrated and been recognized for our strong commitment to sustainability. Tietoevry was again selected as one of Europe's Climate Leaders for 2025 by the Financial Times and Statista. We were also named by Newsweek as one of the World's Greenest Companies 2025, which recognizes the top 750 publicly listed companies for their environmental sustainability performance. We can truly be proud of our company and our work for the world around us."
Financial performance by segment
Revenue, EUR million | Revenue, EUR million | Growth, % | Organic growth, % | Adjusted operating profit, EUR million | Adjusted operating profit, EUR million | Adjusted operating margin, % | Adjusted operating margin, % | |
4-6/2025 | 4-6/2024 | 4-6/2025 | 4-6/2024 | 4-6/2025 | 4-6/2024 | |||
Tietoevry Create | 198.7 | 213.9 | -7 | -7 | 19.0 | 24.3 | 9.6 | 11.4 |
Tietoevry Banking | 145.0 | 148.2 | -2 | -2 | 15.5 | 14.7 | 10.7 | 9.9 |
Tietoevry Care | 58.0 | 58.6 | -1 | -3 | 14.1 | 15.3 | 24.4 | 26.2 |
Tietoevry Industry | 67.8 | 67.3 | 1 | -1 | 7.4 | 10.1 | 10.9 | 15.1 |
Eliminations and non-allocated costs | -6.4 | -9.1 | - | - | -12.3 | -13.4 | - | - |
Group total | 463.1 | 478.9 | -3 | -4 | 43.7 | 51.1 | 9.4 | 10.7 |
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 22 July at 10.00 a.m. EEST (9.00 a.m. CEST, 8.00 a.m. UK time). Endre Rangnes, 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, user ID 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 is a leading software and digital engineering services company with global market reach and capabilities. We provide customers across different industries with mission-critical solutions through our specialized software businesses* Tietoevry Care, Tietoevry Banking and Tietoevry Industry, as well as our digital engineering business Tietoevry Create. Our 16 000* talented vertical software, design, cloud and AI experts are dedicated to empowering our customers to succeed and innovate with latest technology.
Tietoevry's annual revenue for the continuing businesses* is approximately EUR 2 billion. The company's shares are listed on the NASDAQ exchange in Helsinki and Stockholm, as well as on Oslo Børs. www.tietoevry.com
* Tietoevry Tech Services is excluded due to the divestment signed in March 2025. The transaction is expected to close during Q3 2025.
