Tieto Strategy 2019 Kimmo Alkio

Transcription

1 Tieto Strategy 2019 Kimmo Alkio President and CEO, Tieto Corporation

2 Consistently creating value to all stakeholders 2018 Accelerate innovation and growth Accelerate growth portfolio and M&A Build capabilities in Sweden and industry solutions expansion Customer Experience and Learning as a lifestyle Long term positive development in CX and EX Healthy investments including internal startups Healthy multi-year financial performance Acquisitions x 9 in software and consulting 2 Reorienting for growth

3 Living the data-rich world Re-fabricated industries 5G Autonomous vehicles Cyber security Hyperscale Blockchain On-demand, autonomous Hyper personalized Digital identity Platform economy Artificial intelligence Smart lifestyles Wellbeing and longevity Design Machine learning, robotics Natural language processing Circular and sustainable society Privacy and ethics Virtual reality 3

4 Changing industry paradigm with new data-driven experiences and business models Omnichannel Customer agenda for driving competitiveness Industry 4.0 VALUE CREATION Make my product / service better, faster and cheaper Definite products, processes and technologies TODAY Designed experiences and data-driven services Agile business models, services and ways of working TIME Smart cities IoT Servitization Sustainability Connected vehicles Realtime payments Digital citizen services Connected consumer products Predictive healthcare Industry clouds Personalized experiences Data-driven value Cross-industry ecosystems Agile and adaptive 4

5 Data at the core of innovation and value creation Active innovation agenda in the market Design and data led Agility driving both innovation and efficiency Faster time to market Renew applications Adapt enterprise architecture Agile Design and experience Data and insights Agile sprints co-creating business outcomes for customers 5 Cloud first Connected products Agile AI Ecosystems Platforms Hybrid Infrastructure Automation ML/NLP/RPA Cyber security Microservices

6 Creating great everyday experiences Making customers more competitive 6

7 We aim to make customers more competitive Strategy 2019 choices and ambition Services enabling customers competitiveness Leading CX in the market Networked ways of working and leadership Most engaging workplace Context-rich customer engagement Upgraded financial ambition 7

8 Services enabling customers competitiveness 8

9 Services enabling customers competitiveness Tieto Service portfolio Digital Experience Enable new business models and experiences for customers. Capability uplift Agile at scale Hybrid Infra Ensure customer s business continuity, efficiency and unified service experience. Multi-cloud and scale Automation and quality Industry Software Drive customer s business critical processes and functions. Common R&D practices Expansion Product Development Services Making customers products connected with world-class engineering. New industry segments Global expansion 9

10 Digital Experience is the spearhead enabling customer s business agility and innovation Cloud native development and system integration Design, business consulting and CX Renew applications Design and experience Strong foundation with existing businesses and investments Agile Agenda to expand capabilities (with people) Technology advisory incl. architecture Adapt enterprise architecture Data and insights Data science, analytics and platforms Centers of Excellence to incubate future services 10 Digital Experience

11 Hybrid Infra to drive best service experience, quality and 24x7 business continuity Multicloud orchestration Hybrid Infra Global technology partners Robotics and automation High availability and 24x7 Best service experience across heterogenous environments Leading service integrator in the Nordics End-user services 11 Global partnerships OneCloud Automation Nordic data-centers High security Government cloud Tieto dynamic landscape Service Integration & Hosted workspace Management

12 Differentiating Industry Software to focus on functional upgrade and selective business expansion OIL & GAS SMART UTILITY PRODUCTION EXCELLENCE Industrial CREDIT PAYMENTS Strong industry fit and knowledge base Drive synergies and common best practices Financial WEALTH Operate as a Software company WELFARE HEALTHCARE Public BANKING Look for expansion opportunities and partnerships 12 CASE MANAGEMENT EDUCATION

13 PDS continues to expand its global customer base and capabilities in software R&D services Strengthen customer base and expand to new industries beyond Telecom, Automotive, Consumer Electronics and Semiconductor Ambition Customer s first choice for software R&D services Excel in SW R&D services in selected industry domains with leading edge technologies such as 5G, Cloud, Positioning, etc. Accelerate growth focusing on expanding global capabilities and customer base Strengthen global scale expanding delivery centers 13 V2X - Connected car Virtualisation SDN NB-IoT Android Automotive 5G Network Slicing TensorFlow IoS Apps

14 Secret Nordic focus, serving customers globally with a global Tieto team Building on strong global delivery capabilities and long term off-shore development Focus on Nordic enterprises and the public sector Selective international expansion of Industry Software Longer term ambition for broader Tieto expansion in European markets Key markets: Finland, Sweden and Norway Global delivery capabilities: China, Czech, India and Poland PDS continues to grow its global customer base - focusing on software R&D 14 Tieto Corporation Serving customers in over 90 countries world-wide Employing experts globally

15 Context-rich customer engagement 15

16 Context-rich customer engagement co-creating business value with customers Customer s renewal agenda Renew applications Design and experience Partners with domain knowledge to co-create customer solutions and ensure fulfillment. Agile Client Partners Adapt enterprise architecture Data and insights Business Partners Agile experience teams led by the partner to realize the solutions and utilizing all Tieto capabilities. Experience teams Hybrid Infrastructure Experience teams Experience teams Expert teams and service practices to provide people and capabilities to Experience teams. Expert teams and services 16

17 Networked ways of working and leadership 17

18 Tieto structures, go-to-market and management system enabling networked ways of working Context-rich partners and experience teams co-creating customer value Customer engagement Business structure Fully-accountable businesses with minimal internal coordination Employee Fit-for purpose measures and steering per business Management system Leadership Leadership through network of teams with a purpose (vs control) 18

19 Agile teams for customer needs, with fully accountable businesses Digital Experience Expert teams Industry software Software assets Each service choice as a distinct business (Digital Experience, Hybrid Infra, Industry Software and PDS). Global Delivery embedded into businesses and CoEs incubating future capabilities and services. Hybrid Infra Services Global Delivery Customer Partner-led experience teams Product Development Services Centers of Excellence (CoEs) Group management and Support Each business actively contributing to the success of Experience teams for maximum customer value. Nordic go-to-market for Digital Experience, Hybrid Infra and Industry Software, led through a country management network. Industry Software with own international go-to-market. Product Development Services with own global go-to-market. 19

20 Tieto s business and go-to-market structure Networked ways of working CUSTOMER Country market share CX, EX Resource prioritization Country Management Network FI SE NO Growth, P&L CX, EX and quality High customer activity Digital Experience FI SE NO Hybrid Infra Industry Software Product Development Services Centers of Excellence and Global Delivery centers Group management and Support 20 Four distinct businesses with full accountability: Digital Experience, Hybrid Infra, Industry Software and PDS Digital Experience businesses per country to maximize local consulting led market opportunity Go-to-market in the Nordics led through a country management network, represented by all relevant businesses Centers of Excellence to incubate new technologies, solutions and services

21 Introducing Tieto Leadership Network CUSTOMER Client and consulting partners Experience teams Customer and market impact Managing Partner Finland Managing Partner Sweden Managing Partner Norway Head of Hybrid Infra Head of Industry Software Head of PDS Performance Satu Kiiskinen Håkan Dahlström N.N. Petteri Uljas Christian Segersven Tom Leskinen Chief of Talent & Culture Chief of Tech & Quality Chief of Experience Head of CoEs* Capability and Experience Katariina Kravi Markus Suomi Julius Manni Ari Järvelä Chief of Strategy Kishore Ghadiyaram CFO Tomi Hyryläinen Strategy and group performance 21 *Centers of Excellence CEO Kimmo Alkio

22 Operational simplification and networked ways of working drive Tieto s agility and efficiency Benefits Impact Increased market activity more time with customers Growth, CX Expanding the scope within a customer engagement Reduced internal administration and coordination More relevant to customers with right contextual knowledge Growth, CX Efficiency CX, EX Operational simplification potentially impacting 700 roles globally, resulting in annualized savings of 30-35M Simplified management system and measures EX, Efficiency 22

23 Financial ambition 23

24 Higher growth and profit ambitions while maintaining attractive dividend policy Ambition 2022 Growth over 5% (CAGR ) Adjusted operating margin (EBIT) 13% 1) Continued active M&A in addition to organic growth Main drivers include growth, simplified operations and automation Net debt/ebitda below 2.0 Temporarily may exceed 2.0 during the period in the long term 2) CAPEX expected to remain below 4% of sales Aim is to increase base dividend annually in absolute terms Strong cash flow driving attractive dividend profile 1) Adjusted for amortization of acquisition-related intangible assets, restructuring costs, capital gains/losses, goodwill impairment charges and other items affecting comparability In accordance with IFRS 16, taking effect on 1 Jan ) In accordance with IFRS 16, taking effect on 1 Jan 2019 equals to around 1.5 prior to IFRS 16 24

25 All businesses contributing to Tieto s growth and profitability ambition by 2022 Businesses Share of sales Growth Profitability Performance drivers Digital Experience Consulting-led market demand Active investments into capabilities Agile ways of working Hybrid Infra.. Investments into service experience Customer base and partnerships Automation activities Businesses as the reportable segments Industry Software..... Best-in-class competitive software Software functionality and SaaS Common practices and knowledge Updated segment reporting effective as of Q Product Development Services.... Demand for connected products and 5G Knowledge in connectivity domain Global customer reach and delivery Low.... Contribution High 25

26 Investments focusing on accelerating digital capabilities and software business expansion Investment focus Investment drivers Digital Experience Industry Software Other Accelerate digital capabilities e.g. Design, AI, Public cloud Incubate future technologies e.g. Blockchain Solution accelerators, data assets and platforms Ongoing renewals in Healthcare, Utilities and Payments Expand functionality to drive competitiveness Selective international expansion and SaaS models Infra service experience and multi-cloud orchestration Enable PDS customer base expansion Skill renewal and learning as a Lifestyle 70-80% of investments Total investment level to be maintained at 5% of revenues 26

27 Agile implementation of strategy in annual sprints New businesses and market expansion Leading CX in the market Most engaging workplace >5% growth and 13% adj. operating margin 2018 Accelerate innovation and growth Transition and Digital Experience acceleration Operational transition and efficiency Renew customer engagement Investments into Digital Experience acceleration Continued focus on quality and automation PDS expansion continues 27 Long term positive development in CX and EX Growth 7% in local currencies Reached long-term profit ambition of 10% EBIT

28 Strategy 2019 summary Strategy to make customers more competitive focusing on Digital Experience Renewed customer engagement Simplified operations Digital Experience as the main growth driver, while all businesses expected to grow above market Investments to build data-driven services and capabilities - addition of people during the strategy period to drive growth Operational simplification potentially impacting 700 roles globally, resulting in annualized savings of 30-35M Upgraded financial ambition growth >5%, adjusted operating margin 13%, attractive dividend policy maintained Gradual transition to the new structures during Q

29 Creating unique differentiation for customers Open source culture creating engaging work environment Advancing Nordic wellbeing and sustainable societies Enabling digital democracy with smart use of technology Leading AI ethics Contributing to open source, communities and standards Learning as a lifestyle through global networks Creating great everyday experiences in the data-rich world

30