TietoEVRY Oyj — Earnings Release 2021

Oct 26, 2021

TietoEVRY's Interim Report 3/2021: Solid profitability - strong performance in software businesses

TietoEVRY's Interim Report 3/2021: Solid profitability - strong performance in software businesses

TietoEVRY Corporation INTERIM REPORT 26 October 2021, 8.00 a.m. EET

· Adjusted operating margin 14.5% - organic growth 1%

· Strong growth and profitability in software businesses - growth of 10% in

Industry Software and 7% in Financial Services Solutions

· Over 1 600 new recruitments demonstrating strong employer attractiveness

· New strategy announced - specialized businesses driving growth and expansion

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

7-9/2021 7-9/2020

Revenue, EUR million 648.1 643.8

Change, % 0.7 69.6

Organic growth1), % 0.6 -4.3

Operating profit (EBIT), EUR million 72.2 28.6

Operating margin (EBIT), % 11.1 4.4

Operating profit (EBITA3)), EUR million 84.0 40.0

Operating margin (EBITA3)), % 13.0 6.2

Adjusted2) operating profit (EBITA3)), EUR million 94.0 90.2

Adjusted2) operating margin (EBITA3)), % 14.5 14.0

Adjustment items2), EUR million 10.1 50.1

Order backlog, EUR million 3153 3197

Net debt/EBITDA 1.4 2.9

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 2021 unchanged

TietoEVRY expects its organic1) growth to be -1% to +2%2) (revenue in 2020: EUR

2 786.4 million). The company estimates its full-year adjusted operating margin

(adjusted EBITA)3) to increase to 13-14% (12.7% in 2020).

1) Adjusted for currency effects, acquisitions and divestments.

2) Highly dependent on the development of the Covid-19 pandemic. Assumes that

the business environment will return to normal as from the third quarter of

3) Adjusted EBITA is fully comparable with the previous definition of adjusted

EBIT. According to both definitions, amortization of acquisition-related

intangible assets, restructuring costs, capital gains/losses, impairment charges

and other items affecting comparability are excluded - whereas amortization of

other intangible assets is included.

CEO's comment

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

"Our third quarter was a very dynamic and exciting one, with continued

performance improvement - and the announcement of a very transformative future

direction for the company. We delivered strong profitability of over 14%, while

organic revenue growth was 1%. Our software businesses had good overall

performance, especially Industry Software with organic growth of 10% and a 28%

margin. We also saw strong growth in the consulting-driven International and

Product Development Services businesses, with organic growth of 22% and 7%,

respectively. In Cloud & Infra, activities to drive performance improvement

continued, with adjusted operating margin increasing to 9% from 6% in the second

quarter. Digital Consulting revenue was down by 1%, impacted by traditional

application services and continued high attrition.

We are pleased to have over 1 600 new professionals joining the company during

the past quarter to support our growth

agenda. We provide highly attractive and meaningful career opportunities across

our businesses to continuously elevate our attractiveness as a global employer.

I strongly believe our recently announced strategy effectively addresses the

future opportunities in our rapidly changing global industry and is timely

considering our integration programme is coming to its end. In our growth and

expansion-oriented strategy, we expect to become more competitive and faster in

the era of cloud and data-enabled services, and in parallel drive active

enterprise renewal for our current and new customers. The new strategy, business

choices and structure will allow our specialized businesses to explore

alternative means to accelerate growth and expansion. We expect our prioritized

investments to drive growth and profit improvement in line with our long-term

financial ambitions. Performance improvement coupled with continued attractive

dividend levels is anticipated to provide a solid foundation for improved

shareholder returns.

I trust that this new era will offer inspiring opportunities for our employees

through enhanced learning and a sense of personal contribution to customer

success and achievements for sustainable societies. The commitment of our

employees was demonstrated by the latest engagement scores, which continued to

develop favourably during the autumn. With our global team of 24 000

professionals and their advanced skills and creativity, we will continue to

deliver greater value for the benefit of people, businesses and society."

Financial performance by segment

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

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

Adjusted[1)] Adjusted[1)] Adjusted[1)]

EUR EUR % growth, operating

operating operating operating

million million %[3)] profit[2)],

profit[2)], margin[2)], margin[2)],

EUR million EUR

million % %

7-9/2021 7-9/2020 7-9/2021 7-9/2020 7-9/20

7-9/2020

21

Digital 144.0  143.0 1  -1  18.7

21.1 13.0  14.7

Consulting

Cloud & Infra 201.3  219.3 -8  -10  18.5

24.0 9.2  10.9

Industry 116.1  115.1 1  10  32.2

25.0 27.8  21.7

Software

Financial 111.2  101.2 10  7  18.1

15.4 16.3  15.2

Services

Solutions

Product 36.4  33.3 9  7  4.1

4.1 11.3  12.3

Development

Services

Other[4)] 39.1  31.9 23  22  2.2

0.6 -  -

Total 648.1  643.8 1  1  94.0

90.2 14.5  14.0

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 (tomi.hyrylainen%40tietoevry.com)

Kjell Arne Hansen, Head of Investor Relations, tel. +47 9504 0372, kjell.hansen

(at) tietoevry.com (kjell.hansen%40tietoevry.com)

A teleconference for analysts and media will be held on Tuesday 26 October 2021

at 10.00 am EEST (09.00 am CEST, 08.00 am UK time). Kimmo Alkio, President and

CEO, and Tomi Hyryläinen, CFO, will present the results online in English.

The (https://tieto.videosync.fi/2021-q3

-results) (https://tieto.videosync.fi/2021-q3

-results)presentati (https://tieto.videosync.fi/2021-q3

-results)o (https://tieto.videosync.fi/2021-q3

-results)n (https://tieto.videosync.fi/2021-q3-results) can be followed on

TietoEVRY's webs (https://www.tietoevry.com/en/investor

-relations/)it (https://www.tietoevry.com/en/investor

-relations/)e (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 0804

United States: +1 631 913 1422

PIN: 62840414#

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

Oslo Børs

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

Børs.  www.tietoevry.com (https://www.tietoevry.com/en)