Q3 2024 Tietoevry Oyj Earnings Call Transcript
Key Points
- Improved profitability in a weakening market environment, with profitability reaching 13.5%.
- Strong customer wins across all business segments, particularly in modern technologies like cloudification and AI.
- Healthy cash flow of 58 million euros and a backlog increase of 8%, driven by record high backlog in the banking sector.
- Continued investment in AI and next-generation technologies, including the launch of a new AI lab.
- Stable profitability in the banking sector with 4% organic growth, driven by credit, cards, and financial crime prevention.
- Revenue decline of 1% due to a weakening market environment, with organic growth guidance revised to around -2%.
- Challenges in the Swedish market and a decrease in internal revenues impacting growth.
- Softening demand in certain markets, particularly in the public sector in Finland and Sweden, affecting growth.
- Impact of the Norwegian Bank merger negatively affecting revenue, expected to continue for a few quarters.
- Ransomware customer settlement impacting growth, with a full impact expected to be below 10 million euros.
This morning, we will go through our earnings development and outlook with me here today are our President and CEO K A and CFO to Leen who will next go through the highlights and results of the quarter. Kimo. Please go ahead.
Thank you very much, Tommy. A warm welcome. Also mine, mine and Tommy's behalf. To our third quarter results announcement, our third quarter performance characterized as a bit provided insight already a week ago. Given that we did the guidance change. Let us go through the main drivers of the current environment and and third quarter performance. Our main message being that improved profitability in a weakening market environment, the weakening market environment contributing to our revenue development, revenue decline of 1%.
Furthermore, high degree of attention on the resilience of the company resilience of all the businesses. A lot of attention on the cost based management enabling us to improve profitability to 13.5% level. Today, we are also confirming that the strategic review
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