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TietoEnator Oyj TietoEnator Corporation Press Release 18 July 2008 at 08.05 am EET
This is a press release without tables. You can download the complete version using this link (pdf). Interim report 2/2008
TietoEnator's second-quarter net sales grew by 11% to EUR 480.1 (434.2) million. Organic growth was 11%. Operating profit excluding one-off items improved substantially and amounted to EUR 33.2 (14.8) million. One-off items were mainly attributable to the Performance Improvement Programme the company announced in October 2007.
The Performance Improvement Programme has progressed well. By the end of June, the actions taken amount to annualized savings of EUR 71 million. Almost two thirds of this improvement is employee related. A major part of the positive impact will start to materialize in the second half of 2008 and in 2009. TietoEnator estimates that the plan will generate annualized cost savings of EUR 130 million as from the end of 2009.
In the second quarter, strongest development was seen in Processing & Network and Healthcare & Welfare. Processing & Network's net sales saw organic growth of 16%, clearly outpacing the relevant market. In Healthcare & Welfare, growth was very strong at 25% in all market areas and units, except the healthcare business in Finland, where the comparison figures are high due to exceptionally high license revenue in 2007. Both business areas concluded several major agreements in 2007 and the first half of 2008. For Processing & Network the most significant agreements were made with Apoteket and TeliaSonera as well as Op-Pohjola Group and Ilmarinen. Thanks to the Apoteket agreement that was signed in June 2007, Sweden was the strongest growing market for Healthcare & Welfare.
Profit before taxes totalled EUR 23.8 (8.9) million and earnings per share amounted to EUR 0.26 (0.07) in the second quarter.
TietoEnator's President and CEO Hannu Syrjälä comments on the second-quarter performance: "We have just defined our strategy and we started the implementation of the Performance Improvement Programme at the beginning of this year. The second-quarter results strengthen our view that we are on the right track in turning the company around. We have concluded several major agreements in 2008 and succeeded in outpacing our market in many areas. This reflects our customers' trust in us as well as the good momentum within the company."
TietoEnator expects its full-year revenue growth to follow the overall development in the relevant market. TietoEnator is pursuing the full turnaround of the company by the end of 2009. The revised strategy, the Performance Improvement Programme and the actions taken so far will have a positive impact on the company's profitability in the future.
TietoEnator is among the leading architects in building a more efficient information society and one of the largest IT services providers in Europe. TietoEnator specializes in consulting, developing and hosting its customers' business operations in the digital economy. The Group's services are based on a combination of deep industry-specific expertise and the latest information technology. TietoEnator has about 16 000 experts in close to 30 countries. www.tietoenator.com
