Tieto Q2 Report Progress in difficult markets © 2009 Tieto Corporation

Hannu Syrjälä – President and CEO Seppo Haapalainen – CFO Reeta Kaukiainen – EVP, Comms&IR

Challenging market conditions continue Markets − weakness in demand • • • •

Project and consulting demand soft Application management and infrastructure services stable Outsourcing market offers growth opportunities Competition intense and price pressure remains hard

Customers − cost savings and efficiency in focus

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1

Telecom under pressure, move to offshore continues Financial services still weak, regulatory changes create new demand Manufacturing suffering from global recession, recovery not yet in sight Public sector stable, uncertainty in future demand, but plenty of opportunities

© 2009 Tieto Corporation

© 2009 Tieto Corporation

• • • •

Tieto’s transformation progresses according to the plans Tieto’s key focus areas • Capacity cut to current demand – reduction of ~500 employees since Jan/09 • Internal productivity actions – organisational model, cost cuts and process investments • Investments in quality and GDM – offshoring rate now at 26% • Offering development geared towards productivity and efficiency – outsourcing and advanced IT solutions: healthcare, financial services and energy EquaTerra outsourcing survey 2009: Tieto ranked as the best partner for application management outsourcing in the Nordics 3

© 2009 Tieto Corporation

Performance highlights • Sales down 7% to EUR 448.8 million. In local currencies down 3%. • EBIT, excluding OTI, EUR 24.6 million. • One time items: • Sale of TietoSaab EUR 5.2 million • Revenue recognition EUR 5.5 million • Cost of streamlining actions EUR -24.9 million

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2

© 2009 Tieto Corporation

© 2009 Tieto Corporation

• EPS EUR 0.14 • Negative cash EUR -12.1 million due to increase in working capital. • Strong liquidity EUR 101.7 million.

Q2 financials – progress from Q1 Q2/2009

Q2/2008

H1/2009

H1/2008

444.8

480.1

882.8

948.4

10.4

29.6

15.3

54.2

2.3

6.2

1.7

5.7

Operating profit excl. one-off items, EUR million

24.6

33.2

39.4

70.9

EPS, EUR

0.14

0.26

0.15

0.48

Gearing, %

30.1

29.3

30.1

29.3

Net sales, EUR million Operating profit, EUR million EBIT, %

Net cash flow from operations Personnel on 30 June

5

-12.1

59.3

29.9

118.5

16 195

16 301

16 195

16 301

© 2009 Tieto Corporation

Quarterly development Operating profit and margin

Net sales MEUR

MEUR

600 400 200 0 Q3/08

Q4/08

Q1/09

4

10

2 0 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09

Gearing

%

80

40

60

30

40

20

20

10 0

Q2/08

Q3/08

© 2009 Tieto Corporation

Q4/08

Q1/09

Q2/09

Q2/08

Q3/08

Q4/08

Q1/09

Q2/09

© 2009 Tieto Corporation

3

6

20

50

0

6

8

30

Q2/09

Net cash flow from operations

10

40

100

-20

%

0

Q2/08

MEUR

(excl. one-time items)

50

Streamlining actions progressing well • Savings target EUR 100 million • EUR 70 million expected to materialize in 2009, mainly in Q3 and Q4

• Estimated one-off costs approximately EUR 35 million in 2009 • EUR 24.9 million booked in Q2 • • • •

Finland EUR 7.3 million Sweden EUR 7.4 million International EUR 9.9 million Group EUR 0.3 million

• Actions • • • •

7

Personnel adjustments Decreasing the number of subcontractors Consolidation of offices Cutting down business expenses

© 2009 Tieto Corporation

Offshoring target 30% in 2009 – Q2 actual at 26% 5000 4500

30 % 25 %

4000 3500 3000

20 %

2500

15 %

2000 1500

10 %

1000

5%

500

4

09 Q 1

08

08 Q 3

Q 1

07

07 Q 3

Q 1

06

06 Q 3

Q 1

05

05 Q 3

Q 1

04

Czech and Poland

Baltics, Russia and Belarus

India, China, Malaysia and Indonesia

Offshore of total, %

© 2009 Tieto Corporation

© 2009 Tieto Corporation

8

0% Q 3

Q 1

04

0

Country sales by quarter EUR million

600 500

152

144

400

141

143

141

119

116

140 144

300

123

200 100

230

199

239

227

230

Q2/08

Q3/08

Q4/08

Q1/09

Q2/09

Sweden

International

0

Finland 9

© 2009 Tieto Corporation

Finland Sales flat, but outsourcing market strong Profitability down 20% due to restructuring and other costs Public and healthcare and welfare continue to grow Sound development in financial services Personnel negotiations completed in May

Net sales, MEUR

10

5

230

198

244

227

230

Q2/08

Q3/08

Q4/08

Q1/09

Q2/09

© 2009 Tieto Corporation

Q2/2009

Q2/2008

Net sales, MEUR

230

230

EBIT, MEUR

25.2

31.6

EBIT, %

10.9

13.7

5 863

6 111

EBIT, %

Employees

© 2009 Tieto Corporation

• • • • •

Sweden • • •

Sales fell by 19% due to weak telecom segment and currency impact; 7% decline in SEK Profitability burdened by low sales and exchange rates; lower costs insufficient to offset the negative impact Strong development in healthcare and welfare, public and retail and logistics

144

123

141

119

116

Q2/08

Q3/08

Q4/08

Q1/09

Q2/09

Q2/2009

Q2/2008

Net sales, MEUR

116

144

EBIT, MEUR

-6.7

7.4

EBIT, %

-5.8

5.2

3 122

3 331

Employees Net sales, MEUR

11

EBIT, %

© 2009 Tieto Corporation

International

• •

Flat sales of EUR 143 million Loss of EUR 6.6 million, including one-off EUR 9.9 million in restructuring costs Finance and telecom the most challenging areas Denmark and UK had a weak performance

144

140

152

141

143

Q2/08

Q3/08

Q4/08

Q1/09

Q2/09

Q2/2009

Q2/2008

Net sales, MEUR

143

144

EBIT, MEUR

-6.6

2.1

EBIT, %

-4.6

1.4

7 210

6 859

Employees Net sales, MEUR

12

6

© 2009 Tieto Corporation

EBIT, %

4 480 (>60%) in offshore countries

© 2009 Tieto Corporation

• •

Customer sectors Share of Group sales by customer sector

Top 10 customers account for 35% of sales •

Apoteket

Retail

•

Ericsson

Telecom

•

If Insurance

Finance

•

Kesko

Retail

•

The National Board of Taxes (FI)

Government

•

Nokia

Telecom

•

Nokia Siemens Networks

Telecom

•

Nordea

Finance

•

TeliaSonera

Telecom

•

Varma

Finance

45%

21%

None of the customers exceeds 10% in net sales on Group level

13

34%

Telecom Finance Industry sectors

© 2009 Tieto Corporation

• • • •

14

7

Net sales down by 13%, half of the drop from lower volumes 200 Operating profit declined due to lower 150 utilization rates and prices 100 Cost savings and supplier consolidation 50 continue, Tieto well-positioned Offshoring to Asia high on the agenda 0

© 2009 Tieto Corporation

172

147

162

153

149

Q2/08

Q3/08

Q4/08

Q1/09

Q2/09

© 2009 Tieto Corporation

Telecom

Finance •

• • •

15

Net sales down 8% •

More than half due to currency effect

•

Additional impact from two ending contracts

Operating profit remained on a relatively good level Products business suffering most Stable business in Finland, but more challenging in Sweden and International countries

120 100 80 60 40 20 0

102

92

104

89

94

Q2/08

Q3/08

Q4/08

Q1/09

Q2/09

© 2009 Tieto Corporation

Industry sectors*

• • •

Sales declined by 2% Net sales include EUR 5.5 million one-time income Manufacturing, forest and automotive weakest areas Healthcare and welfare and public continued to grow Profitability in most industry sectors at a healthy level

* Automotive, energy, forest, healthcare and welfare, manufacturing, public, retail and logistics 16

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© 2009 Tieto Corporation

250 200 150 100 50

206

186

226

197

201

Q2/08

Q3/08

Q4/08

Q1/09

Q2/09

0

© 2009 Tieto Corporation

• •

Outlook for 2009 • Uncertainty continues in the IT market. • Tieto expects the IT services market to decline and tough market conditions to continue in 2009. • Tieto expects full-year net sales and operating profit to decline from last year. • In the Nordic countries, the best prospects for growth in 2009 are seen in the outsourcing of application and ICT infrastructure management.

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© 2009 Tieto Corporation

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© 2009 Tieto Corporation

© 2009 Tieto Corporation

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