TietoEVRY Oyj — Earnings Release 2019

Feb 14, 2020

TietoEVRY's Interim Report 4/2019: Strong fourth-quarter performance - integration of TietoEVRY progressing well

TietoEVRY's Interim Report 4/2019: Strong fourth-quarter performance - integration of TietoEVRY progressing well

· Merger to create a leading Nordic digital services company completed in the

fourth quarter

· Tieto stand-alone: revenue growth 2%, adjusted operating margin over 13% -

healthy performance driven by Hybrid Infra

· EVRY stand-alone: revenue growth 4%, adjusted operating margin over 13% and

strong order backlog in Financial Services

· Dividend proposal EUR 1.27 per share

The full interim report with tables is available at the end of this release

About this report

To give an understanding of performance comparable with prior reporting of both

Tieto and EVRY, this report includes the following sections:

· Stand-alone financial information for illustrative purposes on pages 6-10 in

the attached Financial Statements Release

· In stand-alone financial information for EVRY, the full year and fourth

quarter of 2019 are reported in accordance with EVRY's accounting policies,

except for the period subsequent to the merger, which has been reported in

accordance with TietoEVRY's accounting policies. There are no material

differences between EVRY's and TietoEVRY's accounting policies.

· All other sections in this report are based on the official financial

figures of TietoEVRY with EVRY being consolidated to TietoEVRY as from 5

December. Comparison figures have not been restated for the merger.

[][]

10-12/2019 10-12/2018 1-12/2019 1-12/2018

Net sales, EUR million 542.8   421.9   1 734.0   1 599.5

Change, % 28.7   3.0   8.4   3.6

Operating profit (EBIT), 31.5   45.7   124.2   154.7

EUR million

Operating margin (EBIT), 5.8   10.8   7.2   9.7

%

Adjusted[1)] operating 71.4   51.0   196.4   168.0

profit (EBIT), EUR

million

Adjusted[1)] operating 13.1   12.1   11.3   10.5

margin (EBIT), %

Profit after taxes, EUR 12.0   35.6   79.1   123.2

million

EPS, EUR 0.14   0.48   1.02   1.67

Net cash flow from 128.3   81.7   278.4   174.2

operations, EUR million

Return on equity, 12 7.3   25.7   7.3   25.7

-month rolling, %

Return on capital 6.8   20.9   6.8   20.9

employed, 12-month

rolling, %

Capital expenditure, EUR 17.9   16.7   51.4   45.0

million

Acquisitions, EUR 175.0   4.3   175.7   14.5

million

Interest-bearing net 1 070.0   137.4   1 070.0   137.4

debt, EUR million

Personnel on 31 December 23 996   15 190   23 996   15 190

[1)] Adjusted for amortization of acquisition-related intangible assets,

restructuring costs, capital gains/losses, goodwill impairment charges and other

items affecting comparability.

Full-year outlook for 2020

TietoEVRY expects its comparable full-year adjusted[1) ]operating profit (EBIT)

to increase from the previous year's level (Tieto's and EVRY's adjusted

operating profit combined amounted to a total of EUR 343.1 million in 2019).

[1) ]Adjusted for amortization of acquisition-related intangible assets,

restructuring costs, capital gains/losses, goodwill impairment charges and other

items affecting comparability

CEO's comment

Comment regarding the interim report by Kimmo Alkio, President and CEO:

"I am proud of the good performance TietoEVRY delivered in the fourth quarter -

ending this year of major transformation with a strong operating margin. The

major event of the year was the merger between EVRY and Tieto, which was

completed on 5 December 2019. The merger yields attractive benefits and the

integration programme is well on schedule.

In 2019, EVRY delivered solid performance with growth in strategic areas. During

the year, EVRY implemented a number of strategic initiatives to improve

profitable organic growth and I am happy to see that the choices have turned out

to be successful. The year ended with a strong order backlog, especially in the

Financial Services area.

Tieto's performance accelerated throughout the second half of 2019 with strong

profit contribution in the fourth quarter. Tieto's strategic and operational

renewal during the second quarter of 2019 was successfully carried out, enabling

good performance at the Group level and especially in the Hybrid Infra business.

We are also pleased with improved growth in the Industry Software business.

As TietoEVRY, we were able to accelerate the integration process during the

fourth quarter with leadership nominations taking place in October. As

anticipated, the pace of integration accelerated in December after the formal

merger approvals. Implementation of the integrated TietoEVRY operating model and

structures began in January 2020. We expect that we will complete the majority

of the structural integrations during the first half of the new year.

We continue to be committed to delivering the anticipated synergy benefits of

EUR 75 million and expect the synergy run-rate to be EUR 35-40 million at the

year end. Our joint innovation capabilities and combined solution portfolio

provide us with a strong position at the forefront of digitalization and in

improving our customers' competitiveness. This also provides TietoEVRY with

stronger growth potential in the longer term.

I am excited about the commitment and hard work of our employees in making this

merger a success. During the integration process we have already experienced the

strength of our common values, which promote openness, transparency, diversity

and continuous learning. Several recognitions testify to our ability to attract

and retain the best talent. Our recognitions in the Nordics include Tieto's

ranking in the top three global tech companies in Equileap's Global Gender

Equality Ranking, Tieto Sweden's EDGE Assessment Certificate, and EVRY's listing

as Norway's best technology company for women by the SHE Index.

Based on the combination of good business performance in the past quarter

coupled with Tieto and EVRY joining forces, we look forward to a very exciting

2020 - we will realize digital advantage for businesses and society."

Stand-alone financial information for illustrative purposes - Tieto

Tieto posted revenue growth of 2% in local currencies.

Financial performance of Tieto in October-December

[][][][]

Revenue, Revenue, Growth, Adjusted[1) Adjusted[1)]

Adjusted[1)]  Adjusted[1)]

EUR EUR % ]operating operating

operating operating

million million profit, EUR profit, EUR

margin, % margin, %

million million

10-12/201 10-12/201 10-12/20 10-12/2018 10-12/2019

10-12/2018

9 8 19

Digital 122.6   129.8   -6   15.5   19.0   12.7

14.6

Experience

Hybrid Infra 137.5   132.8   3   21.8   12.9   15.8

9.7

Industry 124.6   122.2   2   20.6   22.0   16.5

18.0

Software

Product 37.9   36.2   4   3.8   3.7   10.1

10.1

Development

Services

Segments total 422.5   421.1   0   61.7   57.5   14.6

13.6

Other 0.4   0.8   -48   -4.4   -6.5   -

-

operations

Total 423.0   421.9   0   57.2   51.0   13.5

12.1

Stand-alone financial information for illustrative purposes - EVRY

Figures for EVRY's key performance measures include the full period.

Financial performance of EVRY in October-December

[][][][][][]

Revenue, Revenue, Organic Adjusted[3)]  Adjusted[3)]

Adjusted[3)]  Adjusted[3)]

EUR EUR growth[2 operating operating

operating operating

million[1)] million )], % profit, EUR profit, EUR

margin, % margin

million million

%

10-12/2019 10-12/201 10-12/201 10-12/2018 10-12/2019

10-12/2018

8 9

EVRY 97.5   94.7 7.3 13.0 12.7

13.4 13.4

Financial

Services

EVRY 82.6   91.9 -4.6 5.9 5.7

7.1 6.3

Sweden

EVRY 139.5   134.6 8.3 16.0 16.3

11.4 12.1

Norway

Other 35.6   33.2 - 12.8 14.5

35.9 43.6

Total 355.2 354.5 3.9 47.7 49.2

13.4 13.9

[2)] Adjusted for currency effects and impacts from acquisitions and divestments

to provide figures comparable with EVRY's prior reporting

For further information, please contact:

Tomi Hyryläinen, Chief Financial Officer, tel. +358 50 555 0363, tomi.hyrylainen

(at)

tieto.com (http://file:///C:/Users/lounetan/Downloads/tomi.hyrylainen@tieto.com)

Kjell Arne Hansen, Investor Relations, tel. +47 9504 0372, kjell.hansen (at)

evry.com (http://file:///C:/Users/lounetan/Downloads/kjell.hansen@evry.com)

A teleconference for analysts and media will be held on Friday 14 February 2020

at 10.00 am EET (9.00 am CET, 8.00 am UK time). Kimmo Alkio, President and CEO,

Per Hove, former CEO of EVRY, and Tomi Hyryläinen, CFO, will present the results

online in English. The presentation (https://tieto.videosync.fi/q4-results-2019)

can be followed on TietoEVRY's website (https://www.tietoevry.com/en/investor

-relations/).

Teleconference numbers

Finland: +358 981 710 310

Sweden: +46 856 642 651

Norway: +47 235 002 43

United Kingdom: +44 333 300 08 04

United States: +1 631 913 14 22

Conference code: 69530517#

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.

Tieto publishes its financial information in English and Finnish.

TIETOEVRY CORPORATION

DISTRIBUTION

NASDAQ Helsinki

Oslo Börs

Principal Media

TietoEVRY creates digital advantage for businesses and society. We are a leading

digital services and software company with local presence and global

capabilities. Our Nordic values and heritage steer our success.

Headquartered in Finland, TietoEVRY employs around 24 000 experts globally. The

company serves thousands of enterprise and public sector customers in more than

90 countries. TietoEVRY's annual turnover is approximately EUR 3 billion and its

shares are listed on the NASDAQ in Helsinki and Stockholm as well as on the Oslo

Börs, www.tieto.com.