EVRY ASA · Fourth-quarter adjusted operating margin 15% driven byIndustry Software andDigital Consulting · Fourth-quarter revenue down by 6% organically - affected by Covid-19 and anticipated short-term decline in Cloud & Infra · Run-rate ofEUR 80 million achieved in merger synergies - integration fully on schedule · Strong operative cash flow ofEUR 355 million in the full year - good cash conversion · Dividend ofEUR 1.32 per share proposed The full interim report with tables is available at the end of this release. About financial reporting Tieto's andEVRY's merger was concluded on5 December 2019 . This report is based on the official financial figures ofTietoEVRY , withEVRY being consolidated as from5 December 2019 . COMPARABLE FINANCIAL INFORMATION for illustrative purposes The new operating model became effective on1 January 2020 and financial reporting has been prepared in accordance with the new structure as from the second-quarter interim report. As additional information, the report includes comparable financial information forTietoEVRY with figures for 2019 restated to account for the current segments. [][][][] 10-12/2020 10-12/2019 1-12/2020 1-12/2019 Revenue, EUR million 712.0 778.1 2 786.4 2 950.9 Change, % -8.5 - -5.6 - Organic growth[1)], % -6.3 - -2.2 - Operating profit (EBIT), 77.8 56.7 146.7230.5 EUR million Operating margin (EBIT), 10.9 7.3 5.3 7.8 % Adjusted[2)] operating 106.4 105.2 355.0 341.7 profit (EBIT), EUR million Adjusted[2)] operating 14.9 13.5 12.7 11.6 margin (EBIT), % One-time items,EUR 28 .5 48.5 208.3 111.2 million Order backlog, EUR 3 350 3 640 3 350 3 640.0 million Net debt/EBITDA[3)] 2.5 - 2.5 - [1)] Adjusted for currency effects and impact from acquisitions and divestments [2)] Adjusted for amortization of acquisition-related intangible assets, restructuring costs, capital gains/losses, goodwill impairment charges and other items affecting comparability Full-year outlook for 2021TietoEVRY expects its organic[1)] 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)] High dependency on the Covid-19 pandemic development. Assuming normal business environment from the third quarter of 2021. [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 fourth-quarter report byKimmo Alkio , President and CEO: "We are pleased with the continued strong progress ofTietoEVRY's integration and good business momentum in the fourth quarter. We are seeing positive development in terms of both customer and employee experience, while the impact of the pandemic has created challenges during the year. Thanks to the commitment of our 24 000 digital professionals, we were able to shift 96% of our employees to remote work, drive large-scale integration and ensure business continuity to our customers throughout 2020. Our fourth quarter is characterized by strong profitability and several large customer wins. During the quarter, we delivered adjusted operating profit of 15% and strong operative cash flow ofEUR 125 million . Profitability improvement was driven by continued synergy realization and healthy profitability inIndustry Software as well as inDigital Consulting . OurIndustry Software business reached an adjusted operating margin of 26% andDigital Consulting 17%. For the Group, fourth-quarter revenue was down by 6%, significantly impacted by Covid -19. We begin our 2021 company agenda with energy and a focus on growth in our core businesses - with opportunities in areas such as cloud, data and analytics, next generation automation, Financial Services software and Healthcare solutions. Currently we estimate the overall business to return to growth during the second half of 2021. Our financial guidance has been updated both for 2021 and the longer-term view up to 2023. Guidance for 2021 consists of revenue growth of -1% to +2% and an increase in the adjusted profit margin (adjusted EBITA) to between 13% and 14%. As announced at our Capital Markets Day on 3 December, our new financial targets include revenue growth of 5% by 2023, profitability (adjusted EBITA) of 15% by 2023 as well as annual increase in dividends. Based on strong profitability and cash flow in 2020, the dividend proposal for the Annual General Meeting isEUR 1.32 per share - continuing the longer-term dividend attractiveness of the company. AsTietoEVRY , we are energized by the opportunity to guide and support our customers on their digital and data-rich journeys - and contribute to the advancement of the societies we live in. Our path forward is supported by the recently launched Sustainability Game Plan 2023 - including ambitions for gender balance and climate actions in our operations. This supports us in developing our highly talented professionals and attracting future talent to join us in this exciting and meaningful journey." Comparable financial information for illustrative purposes These tables include comparable financial information with comparison figures restated to account for the new segment structure. Financial performance in October-December [][][][][] Revenue, Revenue, Growth, Organic Adjusted[1)] Adjusted[1)] Adjusted[1)] Adjusted[1)] EUR EUR % growth, operating operating operating operating million million %[2)] profit, EUR profit, EUR margin, % margin % million million 10-12/ 10-12/ 10-12/20 10-12/ 10-12/ 10-12/ 2020 2019 20 2019 2020 2 019 Digital 172.8 188.7 -8 -6 29.9 24.0 17.3 12.7 Consulting Cloud & Infra 227.3 264.8 -14 -13 19.3 34.7 8.5 13.1 Industry 134.3 136.6 -2 -1 35.1 25.8 26.2 18.9 Software Financial 108.8 116.8 -7 -3 15.2 17.2 14.0 14.7 Services Solutions Product 36.0 39.1 -8 -10 5.0 4.4 13.8 11.1 Development Services Other 32.8 32.0 2 16 1.9 -0.9 - - Total 712.0 778.1 -9 -6 106.4 105.2 14.9 13.5 [1)] Adjusted for amortization of acquisition-related intangible assets, restructuring costs, capital gains/losses, goodwill impairment charges and other items affecting comparability [2)] Adjusted for currency effects and impact from acquisitions and divestments Financial performance in January-December [][][][][] Revenue, Revenue, Growth, Organic growth, Adjusted[1)] Adjusted[1)] Adjusted[1)] Adjusted[1)] EUR EUR % %[2)] operating operating operating operating million million profit, profit, margin, % margin % EUR million EUR million 1-12/ 1-12/ 1-12/ 1-12/ 1-12/ 1-12/ 2020 2019 2020 2019 2019 2020 Digital 662.0 736.2 -10 92.8 87.5 14.0 11.9 Consulting -6 Cloud & Infra 931.6 1005.0 -7 -5 93.5 112.5 10.0 11.2 Industry 501.1 509.2 -2 2 91.5 74.4 18.3 14.6 Software Financial 418.8 434.0 -4 2 54.4 58.9 13.0 13.6 Services Solutions Product 142.4 146.6 -3 -3 18.0 14.8 12.7 10.1 Development Services Other 130.5 119.9 8 13 4.8 -6.4 - - Total 2 786.4 2 950.9 -6 -2 355.0 341.7 12.7 11.6 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 Wednesday 17 February 2021 10.00 am EET (9.00 am CET, 8.00 am UK time). Kimmo Alkio, President and CEO, and Tomi Hyryläinen, CFO, will present the results online in English. The presentation (https://tieto.videosync.fi/2020-q4-results) can be followed onTietoEVRY's website (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 Conference code: 11869732# 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 NASDAQHelsinki Oslo Børs Principal MediaTietoEVRY 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 inFinland ,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 approximatelyEUR 3 billion and its shares are listed on the NASDAQ inHelsinki andStockholm as well as on theOslo Børs. www.tietoevry.com
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