TietoEVRY (TIETOS) Q4 2024 earnings summary

Executive summary

• Q4 revenue declined 7% year-over-year and full-year revenue fell 2%, reflecting broad-based weaker demand across all business segments in a challenging macroeconomic environment.

• Profitability remained healthy with a Q4 adjusted EBITA margin of 12.8% and full-year margin of 12.3%, supported by efficiency measures and improved performance in Care and Banking.

• Strong operating cash flow of EUR 128 million in Q4 and EUR 326 million for the year enabled a proposed dividend increase to EUR 1.50 per share.

• A EUR 200 million goodwill impairment in Tech Services led to a Q4 operating loss; adjusted results exclude this non-cash charge.

• Strategic review and planned sale of Tech Services is in its final stages, with a sale expected to conclude in March.

Financial highlights

• Q4 revenue was EUR 698.7 million, down from EUR 752 million in Q4 2023; full-year revenue was EUR 2,802.6 million, down from EUR 2,851 million.

• Q4 adjusted EBITA was EUR 89.3 million (12.8% margin); full-year adjusted EBITA was EUR 344.7 million (12.3% margin).

• Free cash flow reached EUR 108 million in Q4, aided by a EUR 13 million asset disposal.

• Order backlog increased by 2% year-over-year to EUR 3,261 million.

• Net debt/EBITDA was 2.2x at year-end, above the target range.

Outlook and guidance

• 2025 organic growth guidance is -3% to +1%, with adjusted EBITA margin expected between 12.0% and 13.0%.

• Market softness is expected to persist into H1 2025, with gradual recovery anticipated in H2.

• Q1 2025 is expected to be soft, with negative revenue growth and margin pressure from salary inflation and mainframe software license costs.

• Margin-dilutive mainframe services contract ending in Q3 will impact full-year growth by -0.4 percentage points.

• Salary inflation estimated at 4–5% for 2025, with continued focus on cost efficiency.