TietoEVRY (TIETOS) Q2 2024 earnings summary

Executive summary

• Achieved 1% organic growth and 11% adjusted profitability in Q2, driven by software businesses and Tech Services, despite a mixed market environment.

• Strong order intake with a book-to-bill ratio of 1.3 and record-high order backlog, supported by major customer wins across segments.

• Strategic review and active sales process for Tech Services ongoing, with updates expected by Q3 report; efficiency measures implemented across businesses.

• Recognized for sustainability by Financial Times and Time Magazine, with ongoing commitment to diversity and inclusion.

• Ransomware attack in Q1 had limited financial impact; customer claims under evaluation, maximum liability below EUR 10 million.

Financial highlights

• Q2 2024 revenue reached EUR 715 million, up 3% year-over-year; organic growth was 1%.

• Adjusted EBITA margin improved to 11.0% (EUR 78m), up from 10.5% (EUR 73m) in Q2 2023.

• Net profit for Q2 was EUR 28.3 million, EPS at EUR 0.24.

• Operating cash flow was EUR 68 million, with free cash flow of EUR 30 million.

• Order backlog increased 2% to EUR 3,440 million.

Outlook and guidance

• Full-year 2024 outlook unchanged: organic growth expected at 0–3%, adjusted EBITA margin at 12.0–13.0%.

• IT services market expected to remain soft in H2 2024; software market more stable.

• Efficiency measures to support Q3 profitability; salary inflation expected at 4.5% for 2024.

• Q3 profitability: Banking and Tech Services at or above prior year, Create and Care at or below, Industry stable.

• FX impact expected to be positive EUR 9 million on revenue in Q3.