Tieto Oyj: Tieto's Interim Report 1/2016 – Healthy growth in IT services and continued profitability improvement

Regulatory News:

• Industry Products driving growth – in line with the ambition to expand software businesses
• Product Development Services performing well
• New strategy to accelerate innovation and growth launched

The full interim report with tables is available at the end of this release

Key figures for the first quarter

IT services

• Sales growth totalled 6.0%, sales in local currencies up by 7.0%
• Adjusted operating profit amounted to EUR 29.1 (24.2) million, 8.6% (7.6) of sales

The Group

• Sales growth totalled 0.5%, sales in local currencies up by 1.4%
• Adjusted operating profit amounted to EUR 31.5 (30.7) million, 8.6% (8.4) of sales
• Order intake (Total Contract Value) at an anticipated level of EUR 325 (430) million, down due to the timing of new agreements – order backlog at EUR 1 907 (1 819) million

1) includes amortization of all intangible items; previously, only acquisition-related intangible items included

2) adjusted for restructuring costs, capital gains/losses, goodwill impairment charges and other items

Full-year outlook for 2016

Tieto expects its adjusted 1) full-year operating profit (EBIT) to increase from the previous year’s level (EUR 150.8 million in 2015).

1) adjusted for restructuring costs, capital gains/losses, goodwill impairment charges and other items

CEO’s comment

Comment regarding the interim report by Kimmo Alkio, President and CEO:

"We had a good start for the year with accelerated growth and improved profitability in IT services – with growth supported by our recent acquisitions. It is very encouraging to see a number of our businesses outperforming the market. Of the industries, Financial Services and Public, Healthcare and Welfare had a really strong quarter. This success was also visible in Industry Products, which delivered strong growth of 13%. In addition, our cloud services’ competitiveness is demonstrated by revenue growth of 72%.

I’m pleased to see that our performance in the past quarter is well in line with the main choices made in our recently launched strategy. Our ambition is to be customers’ first choice in their business renewal – the dynamic marketplace with its digitalization initiatives opens up new opportunities for both our customers and us. The combination of software-centric industry solutions with our growth investments and high availability cloud services provides us with attractive growth opportunities. While continuing to invest in new technologies and new growth opportunities, we maintain our commitment to continued profitability improvement and an attractive dividend policy.

While we aim to be customers’ first choice for business renewal, it is highly inspiring for all of us at Tieto to take an active role in the creation of open ecosystems in pursuit of new sources of innovation and growth.”

Financial performance by service line

Operating margin by service line

1) adjusted for restructuring costs, capital gains/losses, goodwill impairment charges and other items

Customer sales by industry group

M&A impact by service line

M&A impact by industry group

Press conference for analysts and media will be held on Tuesday, April 26, at Tieto’s premises in Stockholm, address: Fjärde Bassängvägen 15, at 11.00 am EET (10.00 am CET, 9.00 am UK time). The results will be presented in English by Kimmo Alkio, President and CEO, and Lasse Heinonen, CFO.

The conference will be webcasted (http://webcast.tieto.com/quarterlyreport/?q=260416) and can be viewed live on Tieto's website (http://www.tieto.com/investors). To join the conference, attendees need Adobe Flash plugin version 10.1.0 or newer. The meeting participants can also join a telephone conference that will be held at the same time. The telephone conference details can be found below.

Telephone conference numbers

Finland: +358 (0)9 7479 0361 Sweden: +46 (0)8 5033 6574 UK: +44 (0)203 043 2002 US: +1 719 325 2131 Conference code: 6304748

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. An on-demand video will be available after the conference.

Tieto publishes financial information in English and Finnish.

TIETO CORPORATION

DISTRIBUTION NASDAQ Helsinki NASDAQ Stockholm Principal Media

Tieto aims to capture the significant opportunities of the data-driven world and turn them into lifelong value for people, business and society. We aim to be customers’ first choice for business renewal by combining our software and services capabilities with a strong drive for co-innovation and ecosystems.

Headquartered in Finland, Tieto has over 13,000 experts in close to 20 countries. Tieto’s turnover is approximately EUR 1.5 billion and shares listed on NASDAQ in Helsinki and Stockholm. www.tieto.com

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