Capital Market Day Realizing the data-driven world

Transcription

1 Capital Market Day 2018 Realizing the data-driven world

2 Customers first choice realizing the data-driven world Kimmo Alkio Attracting and retaining talent Katariina Kravi Leading the transformation in our industry Christian Segersven Shaping a smarter society Cristina Petrescu Taking Nordic industries to a data-driven digital world Satu Kiiskinen Strong position in traditional consulting step-change growth in digital services Ari Järvelä Efficiency and speed through modernization and transformation Håkan Dahlström Solid performance ready to expand Tom Leskinen Well positioned to consistently increase shareholder value Janne Salminen Speakers IR contacts

3 Customers first choice in realizing the data-driven world Kimmo Alkio, President and CEO

4 Our team and presenters Kimmo Alkio President and CEO Financial Services Public, Healthcare and Welfare Industrial and Consumer Services Data-driven businesses Christian Segersven Cristina Petrescu Satu Kiiskinen Industry solutions Business Consulting and Implementation Ari Järvelä Technology Services and Modernization Håkan Dahlström Product Development Services Tom Leskinen Support Functions Katariina Kravi HR Janne Salminen acting CFO Markus Suomi CTO 2

5 Realizing the data-driven world Cyber security Unlimited capacity Autonomous Digital supply chains Virtual reality Artificial intelligence Blockchain Machine learning, robotics Natural language processing Personalized for every individual Available on-demand Accelerates businesses and society

6 Active transition to the data-driven world New experiences and business models Omnichannel Industry 4.0 TOTAL IT SERVICES AVERAGE MARKET GROWTH EXPECTED TO BE IN THE RANGE OF 2-3% Servitization Predictive healthcare 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 Smart cities IoT Sustainability Connected vehicles Realtime payments Digital citizen services Connected consumer products Industry clouds TIME

7 Business-led renewal involves redefining enterprise architectures and applications, deriving value from data CURRENT Identify and build data assets FUTURE Mature business models Solid processes Design experiences and business models Agile ways of working Renew enterprise architecture (e.g. microservices, insights) Agile business models Personalized experiences Business intelligence Data-driven insights Monolithic applications and integrations Legacy infrastructure Renew/Refactor /Rewrite applications Manage Hybrid Infrastructure Heterogeneous applications Hybrid infrastructure Data-driven world

8 Actively renewing portfolio and capabilities Value to all stakeholders Co-innovation, data-platform, use-cases and skills Identify and build data assets Consulting capacity, Security, SIAM, cloud 15-20% of competence base renewed annually Investments into CEM, active M&A Design experiences and business models Agile ways of working Renew/Refactor /Rewrite applications Renew enterprise architecture (e.g. microservices, insights) Manage Hybrid Infrastructure Architectural renewal in SW businesses Application modernization Investments into new services and technologies grown by 85% during

9 Renew for a digital future New skills and continuous learning Strategies and leadership Smart use of data the core

10 Re-defining data-rich Nordic retail Accelerating global real-time payments Advanced healthcare analytics for preventive care OEM software for autonomous traffic Renewing Nordic pension insurance processes Digitalizing public sector with case management Realizing openehr and innovation through ecosystems Hybrid infrastructure support across public, private and on-premise technologies Intelligent transportation Succeeding with customers - across all industries utilizing full Tieto services and competencies

11 Proactive execution anticipating the industry shift Market development as envisaged TIETO'S GROWTH AMBITION FOR IT SERVICES FASTER THAN THE MARKET** (CAGR ) ~ 50% ~ 50% Up by 10%-20% Down by 5%-10% Industry platforms and software Cloud and modernization services Data-driven services Digital consulting and integration services Traditional infrastructure and application services GROWTH DRIVERS AND CAPABILITIES Customer Experience Management Enterprise Cloud borne applications Integration services Case Management Security Data-driven businesses Application modernization ONE Cloud RPA Software R&D services Payments Hydrocarbon management Emerging services - software & digital* Traditional services Credit solutions Production Excellence SmartUtilities Lifecare *Includes current high-growth businesses and internal start-ups which represented ~20% of IT services sales in 2015 **Market growth expectation (CAGR) for the Nordics at 1.5 3% 9

12 Strategy progress accelerating innovation and growth BUSINESSES AND GROWTH Above market growth as of /2018 growth in local currencies 7% PDS expansion Acceleration in growth INNOVATION AND INVESTMENTS Software technology renewal Data science and engineering since 2016 Automation Proven and important investments for future CULTURE AND TALENT CX! OpenSource! Sustainability Significant cultural renewal and talent acquisition 10

13 Strategy Progress Accelerating innovation and growth BUSINESSES AND GROWTH Industry Solutions TSM DDB BCI PDS Sweden Progress slightly behind ambition, investments in place Solid biz progress, AM and Cloud as strong drivers Important innovation engine opportunity to accelerate Design and CEM led innovation, active M&A Strong turnaround with new growth opportunities Good growth path including M&A INNOVATION AND INVESTMENTS Software renewal M&A Data science/ai Cloud Automation/RPA Major investment, necessary technology upgrades Strong progress with 7 transactions completed Rapid capability acceleration Private Cloud with good progress, Public accelerated Important activities initiated to be scaled CULTURE AND TALENT Employee engagement Learning as a Lifestyle New talent Leadership as a Service Solid and sustainable progress New innovative skill development program good success High recruitment pace and talent acquisition Attention both to culture for caring and performance 11

14 Accelerating value to all stakeholders CUSTOMER EXPERIENCE / NPS EMPLOYEE ENGAGEMENT SCORE REVENUE GROWTH, % OPERATING MARGIN, % / /2018* *rolling 12 months 12

15 Reiterating financial objectives, while performance drivers adapting to the market and customer Ambition 2020 IT services revenue growth above the market (CAGR) Focus on new businesses, consulting led services, product development services along with Industry solutions expansion increased investments and reprioritization Organic growth at least at market rate 10% reported operating margin (EBIT) Aim is to increase base dividends annually in absolute terms Adjusted *) margin sustainably above 10% Offering development below 5% of sales (OPEX) Strong cash-flow driving attractive dividend profile Consistent performance and progress towards ambition Net debt / EBITDA 1.5 as an upper limit in the long run Investment capacity for organic and inorganic growth CAPEX expected to remain below 4% of sales 13 *) Adjusted for restructuring costs, capital gains/losses, impairment charges and other one-off items

16 Ambitions by Service Line Technology Services and Modernization Growth Profitability Industry Solutions Business Consulting and Implementation Product Development Services Average market growth (Tieto s addressable market) Target profitability for Tieto 14

17 Industry solutions continue to drive our competitiveness Ongoing technology renewal in multiple businesses KEY SOFTWARE BUSINESSES CREDIT SOLUTIONS EDUCATION CAPITAL MARKETS PUBLIC SECTOR CASE MANAGEMENT HYDROCARBON MANAGEMENT PRODUCTION EXCELLENCE PAYMENTS TIETO SMART UTILITIES LIFECARE Competitive differentiation Customer base: strong and expanding Growth and expansion opportunity Selective investments for technology renewal Lifecare - Healthcare Tieto SmartUtilities Payments (concluded during 2018) Investment level stabilizing during 2019

18 Healthy growth potential, supported by investments Growth >10% Investment proportion 70% Growth 0-1% Investment proportion 10% Infrastructure services Legacy software products Traditional application services Growth 3-5% Investment proportion 20% Industry solutions and software Application modernization Product development services Enterprise applications B2B integration services Customer Experience Management Payments Lifecare Tieto SmartUtilities Public cloud and microservices Cloud borne applications Data-driven businesses Security Multicloud 16

19 Our renewal continues with a higher management ambition in becoming customers first choice in business renewal 40% OF SW AND SOLUTIONS Accelerated investments, incl. acquisitions New product launches in 2018 ~5% OF REVENUES AS OFFERING INVESTMENTS Investments increased to 5% of sales TIETO 2020 MANAGEMENT AMBITION (STRATEGY ) 100M+ FROM DATA-DRIVEN BUSINESSES Further scale and consulting Multi-cloud acceleration Consulting led acceleration >5% IT SERVICES REVENUE GROWTH P.A.* 80% SHARED MANAGED SERVICES Promising innovation pipeline Consistent growth of industrialized Application Services Consistent growth of ~4%, above market 10 12% SG&A OF REVENUE Down from ~15% to a range of 13 14% 1 2% INCREASE IN NORDIC MARKET SHARE Consistent growth and M&A 10% MARGIN** Adj EBIT 10.5% (10.2) Restructuring down to less than 2% of sales Maintain investment levels Consulting led acceleration Automation emphasis Business mix and productivity Customers first choice! Great place for innovation and growth Above industry average TSR To be accelerated On schedule *Formal guidance: IT services revenue growth above the market (CAGR) **Formal guidance: 10% reported operating margin (EBIT) 17

20 What next - accelerating innovation and growth BUSINESSES AND GROWTH INNOVATION AND INVESTMENTS CULTURE AND TALENT Data-driven services, platforms and cloud Digital consulting and renewal Software and PDS Co-innovation with customers data Simplifying legacy Software renewal Open Source culture Active talent acquisition to accelerate digital skills Leadership as a Service and re-skilling Attractive data-rich market Right investments for growth Active renewal to gain share 18

21

22 All information in this material is for informational purposes only. The opinions and viewpoints regarding, inter alia, the future of the company and markets are of Tieto and may not actually materialize. This information should not be construed as an investment recommendation or investment advice. All information expressed herein is subject to change without notice. Neither Tieto nor its officers nor employees shall have any liability for any loss sustained by anyone who has relied on the information provided.

23

24 Attracting and retaining talent Katariina Kravi, Human Resources 1

25 Key facts Personnel by Service Line Recruitments by profile in 2018 Industry Groups PDS IS Other Support functions BCI TSM Developers KEY FIGURES Full-time employees (30 September) Headcount (30 September) Employees in 24 countries Average age 40 28% female, 72% male Recruitment (Gross 1 9/2018) Acquired Avega 300 Attrition rate (voluntary) 12.8% Consultants Architects 2

26 Market trends affecting us 1 Every company is a technology company Industries are merging New skills needed constantly 2 Competition over talent Job seeker s market Employer Branding 3 Roles and job opportunities to reflect market reality Adapt to new employment landscape Re-skilling and up-skilling 3

27 Happy employees happy customers We see a clear correlation between employee engagement and customer experience. EMPLOYEE ENGAGEMENT SCORE VS CUSTOM ER EXPERIENCE 2018 Customers: Average of Customer Experience KPI Employees: Average of employee engagement score We aim to be our customers first choice for business renewal Customer Experience Laggards Customer Experience Neutrals Customer Experience Leaders 4

28 Internal Employee Experience at Tieto Purpose driven work Learning as a lifestyle Team work and inclusion Empathic workspace Leadership as a service Data and digitalization Open Source Culture

29 Internal We have succeeded #tietolife TIETO S ENGAGEMENT SCORE GROWTH OUT SIDE ACCOM PLISHM ENT S 76% 74% Glassdoor 72% 70% 68% 66% 64% Engagement Score OPEN SOURCE CULTURE

30 Our success in recruiting Critical profiles 61% Of all hires in % Of all hires in 2018 Developers Architects Consultants Consultative Experts in sales strategic areas 43% 10% 8% +Avega Young professionals Thought leaders + Meridium 7

31 Towards purpose-driven winning teams AGE GENDER ETHNICITY GLOBAL TEAM From traditional hierarchies to...diverse and agile teams of teams. 8

32 Providing the tools for building a smarter society DATA DRIVEN HR GIG ECONOMY FUTURE ROLES: Data Engineer, Data Scientist, Cyber Security Engineer FLUID ROLES EMPLOYER BRANDING PURPOSE DRIVEN PROJECTS 2020 EMPLOYEE EXPERIENCE LEARNING AS A LIFESTYLE 9

33

34 Shaping a smarter society Cristina Petrescu, Public, Healthcare and Welfare

35 Key facts 33% of Tieto s sales Industry Solutions Business Consulting and Implementation Technology Services and Modernization Product Development Services Financial Services Public, Healthcare and Welfare Industrial and Consumer Services CUSTOMERS AND MARKETS Nordic governments, regions, municipalities and private care providers funded by the public sector SERVICES End-to-end industry solutions and software in Healthcare, Welfare, Education and Case management Support Functions Consulting services supporting the customers business and operation transformation Technology modernization services for customer IT renewal Sales by Service Line IS TSM MARKET POSITION #1 in Finland #1 in Sweden #5 in Norway BCI 2

36 Successfully delivering solutions to shape a smarter society

37 High-quality, innovative and cost-effective healthcare HELSINKI AND UUSIMAA HOSPITAL DISTRICT - DATALAKE On the individual level, we can help people prevent the onset of medical conditions by identifying potential risks. For the elderly, we can provide longer and safer residencies at their own private homes. On a societal level, we can make predictions of the risks affecting whole populations for example risks of epidemics enabling forecasts of healthcare service needs, describes Visa Honkanen, Director of Strategic Development department at HUS 4

38 Digitalized work process, reduced waiting times, unlocked resources TRELLEBORG MUNICIPALITY Our cooperation with Tieto has provided us with a good basis for meeting citizens' expectations for increased availability and service, for example through new citizen services. We are working differently than before, and with the help of Tieto we have introduced modern e-services, says Eleonore Schlyter, Service Provider, Trelleborg Municipality 5

39 Proper care at the right time, simplified & better home care services, cost-effective use of resources FREDRIKSTAD MUNICIPALITY In the past, there was a lot that had to be done manually. For example, telephone calls would be received by the alarm centre, then the duty doctor was informed and the home care service was contacted all this happened by telephone. We wanted to simplify these processes for the home care service and provide a better service for every single resident", says Tonje Myrvold, Systems Manager in the ehealth Department, Health and Welfare in Fredrikstad Municipality 6

40 Challenges for the society Growing elderly population Demand to digitalize processes and services Ever increasing citizen expectations for citizen-centric services SOCIETY Public IT need more interoperability & open ecosystems Technology trends and enablers: artificial intelligence, machine learning, blockchain, robotics etc. PUBLIC ORGANIZATION Technical debt and legacy systems Lack of resources Increasing operating costs of the public sector 7

41 Fundamentally transforming healthcare and welfare Connectivity enables citizens co-management and gives individual patients the opportunity to choose between remote or in-person care methods. Automation improves access to care, quality of care and consistency of care and supports clinical staff through an increase of their productivity. Big data and advanced analytics provide clinical decision support and changes the way in which healthcare conducts clinical treatment.

42 Strong industry solution portfolio ensuring market leading position VALUE PROPOSITION GEOGRAPHICAL PRESENCE Lifecare Nordic software business aiming for digitalizing healthcare and welfare services through joined up information systems that are patientcentric, improving care while driving organizational efficiencies. HEALTHCARE WELFARE Healthcare: market leader in Finland (11/18) counties) Welfare: market leader in Finland, Sweden and Norway, 400+ customers Case management Nordic software business that stores all project or case records in one place, making it easy to find, share and update information as well as tracking progress. Strong market position in Sweden and Norway, 500+ customers Education Nordic software business that covers the full range of administrative work tasks. It opens up communication with both parents or guardians and students to make sure everybody has a full view on learning and progression. Market leader in Sweden (school/ preschool) Market leader in Finland (preschool) Industry Solutions

43 A number of emerging and established solutions driving our growth GAME PLAN FOR GROWTH TODAY AMBITION Lifecare Market leader in Finland for EHR. Strong market demand for interoperability, AIassisted clinical treatment and integrated clinical pathways Market leader in business systems in Welfare, strong demand for resource optimization, automation, analytics, AI and integrated care Nordic leadership in EHR and selected specialist systems. AI-powered solutions. Expansion to new geographical markets with selected offerings. Protect market leadership, broaden offering portfolio and achieve the leading position in integrated care. Important deliveries in healthcare in 2019 healthy growth to continue Case Management License market diminishing and increasing demand for online solutions Strong growth expected in the new product areas 360 Online, ebyggesak 360 and earchive Strong growth in welfare Investments stabilizing towards the end of 2019 Education Strong position in Student Management. Increasing customer demand to utilize data and provide citizen services Nordic leader, expand to learning environment. Automatization and AI with open ecosystem utilizing advanced analytics. Industry Solutions

44 Solid execution towards strategic ambition Pre-packaged industry solutions and software products driving growth in the Nordics ACHIEVED GROWTH o Increased market share in Nordics USER EXPERIENCE AMBITION o Pre-packaged industry solutions and industry consulting o Initiatives for improved user experience o Design as an integrated part of product development PRE-PACKAGED INDUSTRY SOLUTIONS o Investments in software accelerated o Modernize product portfolio 11

45 Uniquely positioned and aiming for the #1 position in all Nordic countries HEALTHCARE #1 in Finland #4 in Sweden #4 in Norway Opportunities in EHR and specialist systems WELFARE #1 in Finland #1 in Norway #1 in Sweden Opportunities in integrated care and new markets EDUCATION #1 in Finland (preschool) #1 in Sweden #3 in Norway Opportunities in broaden portfolio CASE MANAGEMENT #1 in Norway #3 in Sweden Challenger in Finland Opportunities in cloud and the Finnish government 12

46 We provide life-long value for the entire society 13

47 All information in this material is for informational purposes only. The opinions and viewpoints regarding, inter alia, the future of the company and markets are of Tieto and may not actually materialize. This information should not be construed as an investment recommendation or investment advice. All information expressed herein is subject to change without notice. Neither Tieto nor its officers nor employees shall have any liability for any loss sustained by anyone who has relied on the information provided.

48

49 Taking Nordic industries to a data-driven digital world Satu Kiiskinen, Industrial and Consumer Services

50 Key facts 34% of Tieto s sales Industry Solutions Business Consulting and Implementation Technology Services and Modernization Product Development Services Support Functions Financial Services Public, Healthcare and Welfare Industrial and Consumer Services CUSTOMERS AND MARKETS Large enterprises in Forest, Manufacturing, Retail, Logistics, Energy and Telecom Full portfolio of services for Nordic-based customers Global expansion for selected own solutions SERVICES End-to-end industry solutions and software in production excellence, smart utility and hydrocarbon accounting Established Nordic partner in industry consulting, customer experience solutions and implementations for enterprise applications Technology modernization services for ICS focus industries Sales by Service Line BCI IS TSM MARKET POSITION #1 in Finland. # 2 in Sweden, overall # 2 in the Nordics Leading position in production excellence in forest industry globally #1 supplier of customer information systems in the Nordic energy utilities Nordic market leader in customer experience solutions World-wide leader in Hydrocarbon Accounting software 2

51 Today s agenda 1 ICS opportunity We look at the opportunities in the Nordic industries to enable a data driven digital enterprise 2 ICS future bets We open up on how we are getting ready for capturing these opportunities 3 ICS ambition We share our ambition to the Nordic Industries and society 3

52 Taking Nordic industries to a data-driven digital world Industry 4.0 Data platforms CLOUD ROBOTICS AGILE ENTERPRISE Automated services Security and compliance BUILD THE DIGITAL FOUNDATION Intelligent everything CUSTOMER EXPERIENCE INCREASE BETWEEN CUSTOMER EXPERIENCE INCREASE BETWEEN CUSTOMER EXPERIENCE INCREASE BETWEEN UNLOCK BUSINESS POTENTIAL THROUGH DATA Sustainability SERVITIZATION Sufficiency CIRCULAR ECONOMY Retail sharing economy CONSUMER EXPERIENCE 4

53 Helping Lyse build a digital foundation About the co operation Tieto selected to deliver cloud solutions, infrastructure operations and data centre services to the leading Norwegian energy and technology group Lyse About Lyse Lyse is a Norwegian industrial group operating within the fields of energy, fibre-based broadband and smart homes. The Lyse Group was established following the merger of several energy companies in 1998, being operational from CUSTOMER BUSINESS OPPORTUNITY Reduced IT costs, optimized business processes and strengthened ability to develop and deploy new services faster Utilization of automation, speed and innovation to succeed in the digital world TIETO S ROLE Delivery of unified multi-cloud management platform and a true hybrid cloud that includes a set of dedicated private cloud services from Tieto s Norwegian data centre combined with global public cloud solutions from leading suppliers CUSTOMER BENEFITS Ability to deal with changing technology, user requirements and IT requirements Faster innovation and flexibility, and cost control where Lyse pays for actual consumption of services 5

54 Supporting Metso s servitization journey About the co operation Tieto helped Metso solve real-world customer problems and enhance digital customer experience for distributors and end users About Metso Metso is a world-leading industrial company offering equipment and services for the sustainable processing and flow of natural resources in the mining, aggregates, recycling and process industries CUSTOMER BUSINESS OPPORTUNITY Metso wanted to significantly improve the daily work of its distributors and end customers that use their aggregates, not only now, but years into the future TIETO S ROLE Tieto and Metso jointly designed and built My.metso.com, a new digital channel for easy ordering of Metso spare and wear parts providing uninterrupted, real-time access to Metso s digital services CUSTOMER BENEFITS Makes work easier and more efficient for distributors and direct end customers, as it enables working while on the go or in a remote quarry 6

55 Digitalizing the forest with Metsä Group About the co operation Tieto and Metsä Group are digitalizing the forestry ecosystem with help of Artificial Intelligence, drones and Virtual Reality About Metsä Group Metsä Group is a forerunner in sustainable bio economy utilizing renewable wood from sustainably managed northern forests. Metsä Group focuses on wood supply and forest services, wood products, pulp, fresh fiber paperboards and tissue and cooking papers. CUSTOMER BUSINESS OPPORTUNITY Digitalize the forestry ecosystem and develop highly innovative services for timber trading and forestry services TIETO S ROLE Built a management system for forest assets using Digital Forest Twin Digital and reliable information revolutionizes forest planning Forest management made easier and damage from bark beetles reduced CUSTOMER BENEFITS Possibility to apply virtual reality on digitized forest assets to further strengthen Metso Group s leading position Further expand the portfolio of digital services for the wood and fiber supply chain 7

56 Helping Nordic industries to move to a data driven digital enterprise VISIBLE OPPORTUNITIES GROWTH POTENTIAL (next 5 years) CO OPERATION PARTNERS Post modern enterprise transition in Nordic forest and manufacturing industry Multiple change drivers in Nordic utilities driving core software renewal and emerging business models 100+ M 50+ M Hydrocarbon management for Oil and Gas for driving efficiency from assets ~10% CAGR 5G is opening new frontiers for telecom manufacturing, logistics and retail ~10% CAGR Application modernization demand with new age robotics, artificial intelligence, DevOps and Agile +500M 8

57 Our industry solutions portfolio is sharpened to capture this opportunity VALUE PROPOSITION GEOGRAPHICAL PRESENCE Production Excellence Handling the management of the whole order-to-cash value chain in the forest Industry Enables building excellence in production where it matters most for the paper industry. Global Tieto Smart Utility Enabling utility retailers and distributors to optimize business processes for improved reliability and customer satisfaction with efficient distribution, easy network management, meter automation and smart services to their customer Europe Hydrocarbon Management The suite offers Oil and Gas industry with unprecedented support for the whole upstream value chain, including onshore and offshore operations, with dedicated support for production operations, terminals, gas plants, LNG facilities, and pipeline Global Industry Solutions

58 We are renewing our portfolio to capture the new opportunities GAME PLAN FOR GROWTH Production Excellence The solution for the forest Industry will transition out of its current legacy software business and move towards more pre-packaged System integration, driven by post modern enterprise renewal in Forest industry. The portfolio will widen to include high growth segments in tissue, non woven and packaging and is expected to see moderate growth in Tieto Smart Utility Entering a crucial phase where it will need to deliver its current backlog and stabilize. Growth potential in next two years minimal, followed by accelerated growth in Europe Strong order book, focus on deliveries in 2019, performance improving in 2020 Hydrocarbon Management Tieto Hydrocarbon Accounting for Oil and Gas industry is in a very health maturity and will sustain healthy profitability in coming years. Tieto Hydrocarbon management (HCM) has high growth potential starting 2019 Industry Solutions

59 Tieto Distributed Energy Solution is ready to capture the new energy service opportunities and fight climate change TRADITIONAL ENERGY INDUSTRY ENERGY DATA HUBS RETAIL AND TELECOM Energy Markets Energy Management Asset Management Service Integrations Tieto Distributed Energy Solution Demand Response & Demand Side Management Real time data HOMES Connected Services Controllable loads & Efficiency Micro-production and storage EV charging ASSETS ENERGY SERVICE PROVIDERS Smart Energy Management Reduction in CO 2 emissions OFFICES & INDUSTRY - Energy Efficiency - Load control - Electric Vehicles 11

60 We aim for the pole position to accelerate our customers business renewal using data In digital customer experience solutions in Nordics Today in top 3 (by size) in production excellence solutions across forest industry globally Today in top 3 in hydrocarbon management solutions globally Today #1 in Hydrocarbon Accounting Nordic advisor of business renewal using industrial and consumer data Journey started #1 in customer information systems (Smart Utility) in the Nordic energy utilities Today in top 3 Nordic advisor for post modern enterprise renewal in design, Implementation and management of business systems Journey started 12

61 #include <iostream> void teaser(string data) { return 0; } If (data == new oil ) { cout ( data of oil is the new? ); } else { cout ( ); } Million barrels/day 2 Do you know that Energy Components from Tieto is the system of records for 30-40% of all crude oil & gas production in the world, handling all volumes and ownerships on daily basis? This equals the total volume of OPEC. 50% of LNG Do you know that half of natural liquefied gas production are using Tieto systems to manage their hydrocarbons? 3 All Oil majors Do you know that ExxonMobil, Shell, BP, Chevron, Total, ConocoPhillips & 70 other customers account their oil & gas production using Tieto systems? 13

62 All information in this material is for informational purposes only. The opinions and viewpoints regarding, inter alia, the future of the company and markets are of Tieto and may not actually materialize. This information should not be construed as an investment recommendation or investment advice. All information expressed herein is subject to change without notice. Neither Tieto nor its officers nor employees shall have any liability for any loss sustained by anyone who has relied on the information provided.

63

64 1 Strong position in Nordic consulting and digital services Ari Järvelä, Business Consulting and Implementation

65 Key facts 13% of Tieto s sales Industry Solutions Business Consulting and Implementation Technology Services and Modernization Product Development Services Financial Services Public, Healthcare and Welfare Industrial and Consumer Services SERVICES Business, technology and process advisory Software development and integration in both on-premise and cloud environment Customer experience, content management, customer care and commerce solutions Analytics and cloud integration Prepacked enterprise application solutions, e.g. SAP, Microsoft, Oracle, Salesforce and Workday Support Functions CUSTOMERS AND MARKETS Serving enterprises headquartered in the Nordics Manufacturing, Finance, Retail and Telco the largest segments Sales by Industry Group ICS FS PHCW MARKET POSITION #1 in Finland #2 in Sweden Niche in Norway 2

66 Attractive Nordic market with strong growth of over 10% Matching business renewal needs with digital and traditional consulting services BUSINESS RENEWAL NEEDS meet TECHNOLOGY Omni-channel experience 24/7 on-demand services Personalization Digital supply networks INNOVATION INSIGHT COMPETENCE EXPERIENCE Customer experience Data and insight Core renewals Cloud and integration Service desing, Microservice, Automation, Robotics, Blockchain, SaaS, Cloud, IoT, Artificial Intelligence ADVISORY THOUGHT LEADERSHIP CAPABILITIES PARTNERS REFERENCES 88% of Nordic executives expect change in their value chain in coming years 30% annual growth for advanced data-driven solutions in % growth in system integration services for SaaS in 2018* +5B investments in Nordics for core platform renewals during the next five years * Forrester: European Tech Market Outlook for 2018 to 2019

67 Where business renewal meets technology GUIDING THE WAY THROUGH DIGITAL JOURNEY MOVING TO SAAS AND CLOUD NATIVE ARCHI- TECTURES ENABLING SPEED AND AGILITY WITH CLOUD BASED DEVELOPMENT VALUE CREATION WITH DATA AND INSIGHT We help our customers in their business renewal transformation with business-, process-, and technology consulting We simplify processes and technologies by modernizing architectures and platforms into SaaS environments We enable speed and agility by advising and implementing Cloud-based solutions with agile and design led approach We help our customers to create insightful view and value of their consumerand enterprise data. Advisory and thought leadership advisory Partners and ecosystems References

68 Accelerated demand in design-led consulting services Dual agenda Digital and traditional consulting services Opportunities with design, data and cloud services, mainly driven by businesses Opportunities with traditional process and IT consulting, mainly driven by IT Growth opportunity >15% Growth opportunity >5% OUR GROWTH OPPORTUNITY FOCUS Digital business, technology and process consulting Data Insight and Intelligence Customer Experience solutions Core process and business platform renewal Cloud integration and cloud native development 5

69 Unique Nordic position to accelerate customers business renewal Examples of success Engaging with strong customer base comprising +150 Tier1 and clients Forerunner in Time-to-data and Artificial Intelligence Unique combination of capabilities for advisory and implementation of digital solutions combining e2e-technology, industry expertise and business Acquisitions of Avega (2017) and Meridium (2018) Employing 600+ experts in Customer Experience employees with leading edge competences covering full set of traditional and digital consulting capabilities Market-leading cloud-integrator partner 6

70 The leading digital advisory and implementation partner for Nordic enterprises by 2020 FOCUS AREAS TODAY BY 2020 Service portfolio Strong in traditional consulting, growing rapidly in digital services Scalable, seamless digital and traditional consulting and advisory services Employee attractiveness Good scale along with offshore good traction in selected growth domains. The cool place to work with inspiring career opportunities Ecosystem Geography Leading Nordic partnerships with global software firms Equally strong in Sweden and Finland, sub-scale in Norway Most attractive partner in software, cloud and digital ecosystems Nordic leader in all three countries (Fin, Swe, Nor) with organic growth and bolt-on acquisitions MARKET POSITION RECOGNIZED E2E CONSULTING SERVICES PROVIDER LEADING NORDIC PARTNER FOR OUR CUSTOMERS BUSINESS RENEWAL 7

71 Renewing customers business across industries We create business networks with blockchain technology 25% of Finnish household s financial assets are in non-listed company shares. We make the trading process easier with blockchain technologies, providing a new reliable, simple and entirely digital way for non-listed company share trading. We help consumers to reduce their climate impact "My Climate Goal" enables consumers to follow the climate impact from their food purchases with the help of a digital tool. When consumers use their ICA card for food purchases, the climate impact of the food is calculated, using modern technology and scientific calculations. We enhance customer experience with our digital insurance services Tieto develops new agile digital services for Ilmarinen s business clients to enhance their customer experience. The insurance processes, as well as the systems supporting them, are renewed to achieve increased efficiency and speed. 8

72 Growth and profit drivers Growth Profitability Business Consulting and Implementation Average Market Growth (Tieto s addressable market) Target profitability for Tieto GROWTH DRIVERS Expansion in Sweden and Finland, Market entry into Norway New services Data Insight, Native cloud apps, SaaS-based solutions Ecosystem partnerships in SaaS- and Cloud-domains PROFIT DRIVERS Best mixture of local and global delivery Consulting culture with high accountability on utilization Solution accelerators for improved profitability Employee attractiveness 9

73 Where business renewal meets technology We aim to be #1 advising and implementing insightful solutions based on consumer and enterprise data #1 most trusted partner in customer experience solutions and enterprise core process renewal #1 cloud integration and cloud native development partner in Nordics

74 All information in this material is for informational purposes only. The opinions and viewpoints regarding, inter alia, the future of the company and markets are of Tieto and may not actually materialize. This information should not be construed as an investment recommendation or investment advice. All information expressed herein is subject to change without notice. Neither Tieto nor its officers nor employees shall have any liability for any loss sustained by anyone who has relied on the information provided.

75

76 1 Strong position in Nordic consulting and digital services Ari Järvelä, Business Consulting and Implementation

77 Key facts 13% of Tieto s sales Industry Solutions Business Consulting and Implementation Technology Services and Modernization Product Development Services Financial Services Public, Healthcare and Welfare Industrial and Consumer Services SERVICES Business, technology and process advisory Software development and integration in both on-premise and cloud environment Customer experience, content management, customer care and commerce solutions Analytics and cloud integration Prepacked enterprise application solutions, e.g. SAP, Microsoft, Oracle, Salesforce and Workday Support Functions CUSTOMERS AND MARKETS Serving enterprises headquartered in the Nordics Manufacturing, Finance, Retail and Telco the largest segments Sales by Industry Group ICS FS PHCW MARKET POSITION #1 in Finland #2 in Sweden Niche in Norway 2

78 Attractive Nordic market with strong growth of over 10% Matching business renewal needs with digital and traditional consulting services BUSINESS RENEWAL NEEDS meet TECHNOLOGY Omni-channel experience 24/7 on-demand services Personalization Digital supply networks INNOVATION INSIGHT COMPETENCE EXPERIENCE Customer experience Data and insight Core renewals Cloud and integration Service desing, Microservice, Automation, Robotics, Blockchain, SaaS, Cloud, IoT, Artificial Intelligence ADVISORY THOUGHT LEADERSHIP CAPABILITIES PARTNERS REFERENCES 88% of Nordic executives expect change in their value chain in coming years 30% annual growth for advanced data-driven solutions in % growth in system integration services for SaaS in 2018* +5B investments in Nordics for core platform renewals during the next five years * Forrester: European Tech Market Outlook for 2018 to 2019

79 Where business renewal meets technology GUIDING THE WAY THROUGH DIGITAL JOURNEY MOVING TO SAAS AND CLOUD NATIVE ARCHI- TECTURES ENABLING SPEED AND AGILITY WITH CLOUD BASED DEVELOPMENT VALUE CREATION WITH DATA AND INSIGHT We help our customers in their business renewal transformation with business-, process-, and technology consulting We simplify processes and technologies by modernizing architectures and platforms into SaaS environments We enable speed and agility by advising and implementing Cloud-based solutions with agile and design led approach We help our customers to create insightful view and value of their consumerand enterprise data. Advisory and thought leadership advisory Partners and ecosystems References

80 Accelerated demand in design-led consulting services Dual agenda Digital and traditional consulting services Opportunities with design, data and cloud services, mainly driven by businesses Opportunities with traditional process and IT consulting, mainly driven by IT Growth opportunity >15% Growth opportunity >5% OUR GROWTH OPPORTUNITY FOCUS Digital business, technology and process consulting Data Insight and Intelligence Customer Experience solutions Core process and business platform renewal Cloud integration and cloud native development 5

81 Unique Nordic position to accelerate customers business renewal Examples of success Engaging with strong customer base comprising +150 Tier1 and clients Forerunner in Time-to-data and Artificial Intelligence Unique combination of capabilities for advisory and implementation of digital solutions combining e2e-technology, industry expertise and business Acquisitions of Avega (2017) and Meridium (2018) Employing 600+ experts in Customer Experience employees with leading edge competences covering full set of traditional and digital consulting capabilities Market-leading cloud-integrator partner 6

82 The leading digital advisory and implementation partner for Nordic enterprises by 2020 FOCUS AREAS TODAY BY 2020 Service portfolio Strong in traditional consulting, growing rapidly in digital services Scalable, seamless digital and traditional consulting and advisory services Employee attractiveness Good scale along with offshore good traction in selected growth domains. The cool place to work with inspiring career opportunities Ecosystem Geography Leading Nordic partnerships with global software firms Equally strong in Sweden and Finland, sub-scale in Norway Most attractive partner in software, cloud and digital ecosystems Nordic leader in all three countries (Fin, Swe, Nor) with organic growth and bolt-on acquisitions MARKET POSITION RECOGNIZED E2E CONSULTING SERVICES PROVIDER LEADING NORDIC PARTNER FOR OUR CUSTOMERS BUSINESS RENEWAL 7

83 Renewing customers business across industries We create business networks with blockchain technology 25% of Finnish household s financial assets are in non-listed company shares. We make the trading process easier with blockchain technologies, providing a new reliable, simple and entirely digital way for non-listed company share trading. We help consumers to reduce their climate impact "My Climate Goal" enables consumers to follow the climate impact from their food purchases with the help of a digital tool. When consumers use their ICA card for food purchases, the climate impact of the food is calculated, using modern technology and scientific calculations. We enhance customer experience with our digital insurance services Tieto develops new agile digital services for Ilmarinen s business clients to enhance their customer experience. The insurance processes, as well as the systems supporting them, are renewed to achieve increased efficiency and speed. 8

84 Growth and profit drivers Growth Profitability Business Consulting and Implementation Average Market Growth (Tieto s addressable market) Target profitability for Tieto GROWTH DRIVERS Expansion in Sweden and Finland, Market entry into Norway New services Data Insight, Native cloud apps, SaaS-based solutions Ecosystem partnerships in SaaS- and Cloud-domains PROFIT DRIVERS Best mixture of local and global delivery Consulting culture with high accountability on utilization Solution accelerators for improved profitability Employee attractiveness 9

85 Where business renewal meets technology We aim to be #1 advising and implementing insightful solutions based on consumer and enterprise data #1 most trusted partner in customer experience solutions and enterprise core process renewal #1 cloud integration and cloud native development partner in Nordics

86 All information in this material is for informational purposes only. The opinions and viewpoints regarding, inter alia, the future of the company and markets are of Tieto and may not actually materialize. This information should not be construed as an investment recommendation or investment advice. All information expressed herein is subject to change without notice. Neither Tieto nor its officers nor employees shall have any liability for any loss sustained by anyone who has relied on the information provided.

87

88 Modernizing enterprises for efficiency and agility Håkan Dahlström, Technology Services and Modernization 1

89 Key facts 48% of Tieto s sales Industry Solutions Business Consulting and Implementation Technology Services and Modernization Product Development Services Support Functions Financial Services Public, Healthcare and Welfare Industrial and Consumer Services SERVICES Technology advisory Managed services - applications, integration, application platforms, infrastructure, workplace and security Enterprise cloud solutions CUSTOMERS AND MARKETS Enterprises headquartered in the Nordics Example of customers: City of Stockholm, Region Skåne, Telia, IF, Nordea, SSAB, OP Group, Kesko, Lähtapiola, Cargotec, Arek, City of Helsinki, Outokumpu, Ilmarinen, Metsä Group Sales by Industry Group ICS FS MARKET POSITION #1 in Finland #2 in Sweden Expansion in Norway Leader in Nordic enterprise cloud PHCW 2

90 Steady execution towards 2020 ambition TECHNOLOGY MODERNIZATION AND BUSINESS CONTINUITY GOOD GROWTH IN CLOUD SERVICES STRONG FINANCIAL PERFORMANCE 3

91 Being our customers modernization partner HOW WE CAN HELP BUSINESS NEEDS Drive the digital strategy and superior customer experience across all channels Modernize IT to enable innovations, growth and data-driven value Decrease time to market Drive efficiency and reduce total cost of ownership Run business in dual mode efficiency from legacy operations and invest into a digital future Application modernization Modernize and rationalize the application landscape Multicloud orchestration and cloud migration Increase capacity flexibility and time to market Cyber security Ensure data protection, privacy, and right location for data storage Automation Increased efficiency and cost savings in IT operations IT ecosystem management Service integration and management across IT services ecosystem 4

92 Nordic leader in modernizing customers application landscape Application modernization CUSTOMER PRIORITY OUR VALUE PROPOSITION EXAMPLES OF SUCCESS Total Cost of Ownership (TCO) Current state Develop (Digitalize and modernize) Operate (RUN/Keep lights ON) Future state Innovate and develop Initial cost Operate Room for increased innovation Transition cost Operations cost reduced Deep customer knowledge to manage the business change Industrialized services for efficient business continuity Co-creation with customers Managing hybrid environments and ecosystem 5

93 Cloud migration as an enabler for business agility Multicloud orchestration and cloud migration CUSTOMER PRIORITY Agile business models Ecosystem orchestration Faster time to market Insights with data Flexible capacity and pay-as-you-go Reduced operational costs OUR VALUE PROPOSITION Leading private cloud solutions in the Nordics Multicloud orchestration across major public clouds AWS and Azure Well positioned to manage customers heterogenous environments Strong enterprise architecture and application modernization The Prime Minister's Office one of Finland's most significant digitalization projects Nordic energy giant Vattenfall takes a digital leap forward Norwegian Railway Directorate the first in public sector to go 100 percent cloud-based 6

94 Our leading-edge solution combining public and private cloud driving future growth Multicloud orchestration and cloud migration Tieto OneCloud Tieto OneCloud combines the best from key ecosystems in public and private clouds into one portfolio, integrated and easy to manage Multi-cloud management SIMPLE SECURE Investments Accelerated investments to drive multicloud orchestration Partnerships Leading cloud players, such as AWS, Azure, VMware, Google Market leading partners Public, Private and Hybrid cloud services Workload flexibility Cloud advisory AGILE & EFFICIENT Customers include Outokumpu, Stora Enso, Metsä Group, Region Skåne Market 40 50% of infra services delivered through private and public cloud by

95 Customer Success Story Telia Norway Agile development in public cloud Cloud migration Scope Turning traditional release cycles into continuous delivery model and accelerate development from months to days. Moving and re-platforming microservices components to public cloud for scalability, faster product innovation and cost transparency. Customer benefits Time to market from nine yearly releases to daily releases Significant quality and stability improvements Cost reduction 8

96 Increased demand for security services Cyber security CUSTOMER PRIORITY OUR VALUE PROPOSITION HOW WE SCALE Customers need to gather, process, and store critical data Cloud migration requires a completely new approach to security CAGR 10-15% until 2022 Combining customer intimacy and infrastructure services to protect sensitive customer data with 24/7 security operations Tieto s Cloud presence Tieto s Datacenter footprint Recent acquisition of NSEC THREAT AND VULNERABILITY MANAGEMENT CLOUD SECURITY AND EMERGING TECHNOLOGIES MONITORING AND OPS APPLICATIONS AND DATA SECURITY NETWORK SECURITY SECURITY TEAM ENDPOINT AND MOBILE SECURITY 9

97 Automation driving efficiency, quality and profitability Automation CUSTOMER PRIORITY Master Data Management Cash collection process automation Finance operations automation IT Monitoring automation Incident notifications and work note updates Service Desk incident resolution automation OUR VALUE PROPOSITION IN RPA End to end services from advisory, development and continuous services to manage complete robot lifecycle Expertise in robotics technology platforms Saving up to 30% of cost for operations Quick set-up time by reusable components and pre-defined set of use cases Pay as you use Robot as a service Blended Nordics and offshore team for attractive pricing Success in RPA 35+ use cases in commercial contracts Customers include Kesko, SSAB, Valmet, City of Stockholm, City of Tampere Active use cases in Machine Learning Predictive analytics being commercialized 10

98 Solving data migration challenge for a healthcare service provider Customer Success Story Automation Scope A large healthcare provider in Finland needed to migrate 18 years of customer health records data from 4 legacy systems to a new IT system on a strict schedule. Customer benefits using Robotic Process Automation Data migration of over records within 2 weeks by 8 robots 1 600% increased efficiency, reducing 4 FTE work for 3 months to 15 days 100% data accuracy of migrated data No business disruption during migration 11

99 Leading the change in outsourcing with SIAM* Capacity to manage ecosystems becomes increasingly important IT ecosystem management Heading for #1 position : From 0 to 15 of our top 50 customers covering a wide mix of industries Today: SIAM is an essential part in new outsourcing contracts and deliveries Tomorrow: Ambition to be # 1 SIAM Services provider in the Nordics MULTI-PLAYER ECOSYSTEM ORCHESTRATION Drivers for service integration Ensure Business Continuity Ensure E2E Performance Cost Savings Secure Competences Manage Multivendor Managing multi-vendor ecosystems, including SaaS and multicloud orchestration SIAM as a Service with SLA/KPIs Cost efficient delivery models Certified and experienced SIAM professionals Flexible and easy to scale services Managing multicloud environments Tieto SIAM value proposition Customer benefits Less downtimes and incidents Reduction of E2E resolution time 20 25% annual cost savings Flexible resourcing Efficient governance 12 *SIAM Service Integration and Management

100 Cargotec - Efficiency by Tieto SIAM Customer Success Story IT ecosystem management Realized Benefits CONTROL INNOVATION Customer benefits Cost decreased by 20% Better control and transparency New service transition and Set up Operations Synergies and best practice sharing We are impressed about the speed of transition: it s been 6 months after agreement was signed, and now we are live with our SIAM services. One of the success factor was that Tieto had a clear concept for SIAM, and they led the show. Jan Alakoski, Cargotec IM Director 13

101 Attractive service portfolio driving growth above the market THE AMBITION WE SET IN 2016 OUR GROWTH IN 1 9/2018 TSM s ambition is to grow at least at the market rate *) Sales growth in (CAGR) UP 5 20% Cloud apps and Security Solutions Eco-system solutions Hybrid Cloud and Cloud solutions Sales growth (CAGR) UP 19% Infrastructure cloud UP 2 5% Renewal and modernization of traditional Infra & Apps Service integration and experience UP 8% Application services New services Renewal and modernization Traditional services DOWN 5% Traditional infrastructure and application services DOWN 4% Traditional Infra 14 *) Market growth expectation (CAGR) for the Nordics at 1.5 3%

102 Progress summary on the right track Achieved Plan Our mission Actively advice and modernize customers IT across applications and infrastructure Value for customers Business agility and continuity Faster technology adoption and return on investments High-quality and cost-efficient operations Access to global capacity and resources Cloud share of infra revenue is 40 % 25% achieved Accelerated adoption of multicloud Balanced deliveries, 60% global delivery 50% achieved Active global delivery staffing and recruitments Automation 500 digital full-time employees 200 DFTEs achieved Automation acceleration 15

103 Growth and profit drivers Growth Profitability Technology Services and Modernization Average market growth (Tieto s addressable market) Target profitability for Tieto GROWTH DRIVERS Increased demand for managing the complex IT landscape Tieto is well equipped to manage duality and transform Attractive offering portfolio meeting business needs Expansion in Sweden, Finland and Norway in close co-operation with Industry Groups PROFIT DRIVERS Industrialized, next generation managed services and methods Robotics and cognitive automation for increased efficiency Digital channels for service access and delivery and support Balanced deliveries with off-shoring and near-shoring 16

104 Our winning formula We are big enough to be competitive and small enough to care Long customer relationships and knowledge of their business We have what it takes to manage the duality Capable of managing the legacy while modernizing the IT landscape, with Security by design principles We are our customers digital transformation partner The competence and services needed to be the advisor and guide for the CXO

105 All information in this material is for informational purposes only. The opinions and viewpoints regarding, inter alia, the future of the company and markets are of Tieto and may not actually materialize. This information should not be construed as an investment recommendation or investment advice. All information expressed herein is subject to change without notice. Neither Tieto nor its officers nor employees shall have any liability for any loss sustained by anyone who has relied on the information provided.

106

107 Solid performance ready to expand Tom Leskinen, Product Development Services 1

108 Key facts 8% of Tieto s sales Industry Solutions Business Consulting and Implementation Technology Services and Modernization Product Development Services Support Functions Sales by segment Financial Services Semiconductor Smart Devices Automotive Public, Healthcare and Welfare Other Industrial and Consumer Services Telecom SERVICES Focused high-end Software R&D services with healthy offshoring/nearshoring ratio Strengthening portfolio of own products and solutions in the areas of networking CUSTOMERS AND MARKETS Global Tier-1 OEMs in telecom, consumer electronics, semiconductor and automotive industries Widening customer base with over 60 international customers MARKET POSITION One of the globally leading Software R&D services and solutions suppliers in connectivity and networking technologies Strong presence in Europe, North America and China Growing market position in the Automotive domain with several key customers 2

109 Building the Connected world Autonomous Mobility Smart Living Cloud Born Dynamic Connected Safe Mobile Fun Hybrid & Multi vendor, NFVi, Cloud Native Software defined Infrastructure, Zero Touch Telematics, V2X, Connected car ADAS, ISO Platforms, Apps, AI, Multimedia Multimedia, Multiroom Audio, Smart TV apps Ever reaching Autonomous Aware As a service Cozy Healthy 5G NR, HetNet, NB-IoT, Cloud RAN Orchestration, Automation, Slicing, Open source HERE technologies, Location based services Fleet management, Mobility Services, Use based insurance Smart Home, Homekit, Alexa, Google Home Wearable, DevOPS, Automated

110 Acceleration in 5G and automotive market growth drive demand for PDS services TELECOM, 5G ADOPTION ACCELERATION Mobile Connections* ~9 Bn AUTOMOTIVE SOFTWARE GROWTH in -Vehicle Software ~ 2.4Bn NEW CONSUMER IOT DEVICES, INTELLIGENCE IoT Revenue by segment ~$3000 Bn ~7.8Bn 29% 31% 40% CAGR 2% 14% 53% 29% 4% 5G 4G 3G 2G ~ 1.7Bn CAGR 11% 22% 22% 26% 28% Chassis Powertrain Infotainment, Telematics Safety Systems ~$2150 Bn 53% 47% CAGR 21% 49% 51% Industrial consumer CAGR 14% CAGR 34% Accelerated 5G adoption, NEP & Semiconductor vendor R&D follows 4G driving most revenue for NEPs, but cost optimization required Opportunities for large 4G programs as well as spearhead 5G projects Increase of software & complexity in vehicle Connected car and Digital services driving new revenue Autonomous driving Opportunities in vehicle SW, Connectivity, Cloud and industry transformation towards software High growth devices: Smart Speakers, Wearables and Smart Home New interaction and automation enabled by AI (Voice, Vision, NLP) Opportunities in wearable, smart home and innovation through AI 4 Sources: GSMA intelligence, Technavio, IoT Advisory Group, Nasscom *Excluding IoT Connections

111 Automotive market dynamics, our key opportunity VALUE OF VEHICLE: TODAY VS TOMORROW CHALLENGES FOR OEMS AND SUPPLIERS OPPORTUNITIES FOR TIETO 90% 10% Today 20% 40% Tomorrow 40% Stagnation of vehicle sales Acceleration of Technology adoption, Growing Complexity Connected car TODAY ADAS & Safety Digital Cockpit Telematics and fleet TOMORROW Hardware Software Content & Services Software as differentiator Leading OEM Existing customers Connected Vehicle Forecast %of vehicles sold Active safety and Autonomy 4 & 5 Multiple Tier % 57% 95% Connectivity in vehicle, between vehicles, to infrastructure Location Services Leader Leading Tire Manufacturer Multiple OEMS Multiple Tier Mobility as a services, move towards services. etc Leading semiconductor Multiple Semiconductors 5

112 Unique position with optimal closeness to customers, strong capabilities and proven delivery World-class solutions and expertise provider in emerging communications and digitalization technologies Well positioned to capture the market opportunity combining cutting edge technology competences, advance software development practices and a proven global delivery model OUR STRENGTHS Close to our global customers Strong closeness to our customers in their home base and offshoring locations Delivering on the promise High Customer satisfaction and capability to always deliver what we promise. High level expertise and professionals 20+ years expertise on delivering complex and large SW programs Growth capability Proven organic growth capability in key delivery sites in China, Poland and Czech High employee satisfaction Lean and transparent operations to ensure high motivation and professionalism in the teams 6

113 Solid performance and stable progress in key strategic elements Achieved Plan Grow beyond telecom Success in 4G/5G technology services Growth in product business Positive growth in Automotive Further Grow in Automotive, Emerging Industries 4G/5G strong position established Share in Next generation Comms (4G/5G) Product Renewal for 4G/5G done Accelerate Product business sales 7

114 Further strengthening our position as a global and European top SW R&D services provider GROWTH STRATEGY ENABLERS FOR GROWTH Strengthen customer base Build scale globally Expand new capabilities Accelerate growth through M&A Expand with existing customers New Automotive customers Acquire new big customers Grow delivery centers in Pol, Cz, Chi Strengthen presence in CEE Build wider capability in Automotive Expand to new industries Excel in Agile, Devops, Microservices Bolt on acquisitions to accelerate growth Faster expansion to new industries and customers Continued strong growth + Sustained profitability 8

115 Growth and profit drivers Growth Profitability Product Development Services Average market growth (Tieto s addressable market) Target profitability for Tieto GROWTH DRIVERS Growing demand in key industries, especially 5G and Automotive Meet the demand with the scale globally and in CEE Expand into new growth industries for further scale Accelerate through acquisitions PROFIT DRIVERS Focused in the higher value added services areas Solid, proven and lean operations Good mix of high offshoring ratio (+70%) and customer closeness Mix of business models contributing to stable profit margins 9

116 Timely launch of a new brand Anima needed to speed up the development to secure the timely launch of a new brand Kronaby, the hybrid smartwatch enabling you to stay connected. Not distracted. Challenge Pressure to succeed in the market launch of a new brand marrying traditional watchmaking with the latest technology of smartwatches How Tieto helped Accelerated time to market through agile SW engineering team with responsibility combining cutting edge technologies and best SW practices Customer value Timely launch of the Kronaby watch, while Tieto handled ios app implementation Great end-user experience for Kronaby watch and ios app Cost-efficient SW R&D Anima specializes in designed smart, connected products. Kronaby is the hybrid, connected smartwatch brand owned by Anima. Case: Software Development Services, IoT 10

117 Enabling the autonomous world HERE Technologies needed a partner to both support their own product development as well as adding value for end customers Challenge Accelerating development and market growth of Here platforms and Solutions Finding a partner capable of both product development and creating customer and industry specific solutions How Tieto helped Establishment of a Center of Excellence for HERE solutions Strategic R&D cooperation in Product development Joint go to market for location based services and map content Customer value Accelerated time to market and scale product development for HERE Single stop shop for location based solutions for Tieto and HERE customers in multiple Industries Global support and reach Here specializes in Location based solutions to enable the Autonomous World for everyone Case: Automotive, Location based Services, partnership 11

118 Ready to expand further Product Development Services Great market opportunity, especially in 5G and Automotive Right competences, global delivery and high performing operations to capture the opportunity Proven growth capability in new industries beyond telecom Solid baseline for higher growth ambition and expansion through acquisitions 12

119 All information in this material is for informational purposes only. The opinions and viewpoints regarding, inter alia, the future of the company and markets are of Tieto and may not actually materialize. This information should not be construed as an investment recommendation or investment advice. All information expressed herein is subject to change without notice. Neither Tieto nor its officers nor employees shall have any liability for any loss sustained by anyone who has relied on the information provided.

120

121 Well positioned to consistently increase shareholder value Janne Salminen, Acting CFO

122 Renewal driving consistent value creation 1 Well positioned to gain 2 Successful acquisitions market share in the implemented M&A Nordics agenda continues 3 Growth as a key driver for improvement in operating profit 2

123 Steady progress towards 2020 ambition OBJECTIVES SET IN GROWTH 2.0% 3.0% / R12** 3.5% OBJECTIVE IT services revenue growth above the market (CAGR) EBIT MARGIN 8.6% 9.0% 9.3/10.3%** 10% ADJUSTED* EBIT MARGIN 10.3% 10.5% 9.6/10.6%** DIVIDENDS, EUR Base dividend to be increased annually NET DEBT/EBITDA <1.5 Positive trend in line with the financial objectives while investments increased *) adjusted for restructuring costs, capital gains/losses, goodwill impairment charges and other items **) Rolling 12 months

124 Positive trend while investments for growth increased MEUR 2000 NET SALES MEUR 200 NET CASH FLOW FROM OPERATIONS , ,9 132,6 97,2 151, MEUR 200 OPERATING PROFIT % 15,0 % MEUR 200 CAPEX AND ACQUISITIONS ,5 % 9,9 % 10,3 % 10,2 % 8,8 % 7,6 % 8,6 % 9,4 % 9,0 % 5,3 % 3,5 % 4,0 % 138,8 141,2 150,2 150,8 152,2 161, ,0 % 5,0 % 0,0 % Adjusted* operating profit (EBIT), EUR million Adjusted* operating profit (EBIT), % Operating profit (EBIT), % Acquisitions, EUR million Capital expenditure, EUR million 4 *) Adjusted for restructuring costs, capital gains/losses, impairment charges and other one-off items

125 Positive trend in key ratios % 50% 45% EQUITY RATIO % 1,5 NET DEBT / EBITDA** According to our financial targets Net debt/ebitda: upper limit 1.5 in the long run 40% 0,5 0,2 0,1 0,1 0,6 0,8 35% 46,9 49,3 47,8 46,2 47,3 42, ,5-0, CASH CONVERSION RATE (CCR) MEUR 120 DIVIDENDS 3 2 1,8 1,6 2,2 1,3 1,1 CCR Adjusted* CCR Additional dividends, EUR million 1 0 0,6 3,4 1,4 3,6 0,9 0,3 0, Dividends, EUR million 5 Cash conversion rate (CCR) = Free cashflow (FCF) / Net profit *) excluding M&A, divestments, restructuring and impairment **) estimated IFRS16 impact on EBITDA ~EUR +4 million and on Net debt ~EUR 154 million

126 Our ambition and value creation

127 Reiterating financial objectives Ambition 2020 IT services revenue growth above the market (CAGR) Focus on new businesses, consulting-led services, product development services along with Industry solutions expansion increased investments and reprioritization Organic growth at least at market rate Current performance 10% reported operating margin (EBIT) Adjusted *) margin sustainably above 10% Offering development below 5% of sales (OPEX) Aim is to increase base dividends annually in absolute terms Strong cash-flow driving attractive dividend profile Net debt / EBITDA 1.5 as an upper limit in the long run Investment capacity for organic and inorganic growth CAPEX expected to remain below 4% of sales 7 *) Adjusted for restructuring costs, capital gains/losses, impairment charges and other one-off items

128 Growth as a key driver for improvement in operating profit MEUR REVENUE GROWTH Market average Industry solutions and new data-driven opportunities driving growth 0 MEUR ADJUSTED* PROFIT GROWTH Strategic ambition Further potential from M&A Growth driving increased profits in absolute terms *) Adjusted for restructuring costs, capital gains/losses, impairment charges and other one-off items

129 We maintain 10% margin as the objective Adjusted* EBIT margin % Adjusted* EBIT margin % EBIT margin 10% 2017 Revenue increase Productivity improvement and offshoring Salary inflation/ other 2020 Annual restructuring 2020 Key drivers Revenue growth Improved SG&A ratio Automation and standardization Increasing Offshoring ratio Offering development expected to remain below 5% of sales Salary inflation ~4% annually 9 *) Adjusted for restructuring costs, capital gains/losses, impairment charges and other one-off items

130 Productivity gains driving margin improvement INDUSTRY SOLUTIONS DRIVING MARGIN IMPROVEMENT INCREASE IN PRODUCTIVITY SALES GROWTH Adjusted* EBIT, EUR million IS BCI TSM PDS Revenue per FTE Offshore ratio Divestments of non-core businesses Share of legacy started to decline PDS business volumes down IT services turned to growth in 2014 Growth bets defined Share of emerging services and industry solutions increasing New data-driven opportunities Selective acquisitions based on good M&A capability SG&A TO SALES RATIO IMPROVING ,00% Sales 21,00% SG&A 16,00% as % of Sales 11,00% INVESTMENTS IN OFFERINGS STABILIZING ,8 7,3 6,8 6,3 5,8 5,3 4,8 4,3 3,8 DDB Other IS TSM % of sales More focused and efficient operations Increased investment in growth: offering development and new competencies Offshoring ratio from 40% to 46% Transformation resulted in high restructuring costs PROFIT IMPROVEMENT Growth driving increased profits in absolute terms Continuous productivity improvement Offering development stabilizing to around 5% of sales Stabilized restructuring costs 10 *) Adjusted for restructuring costs, capital gains/losses, impairment charges and other one-off items

131 Ambitions by Service Line Growth Profitability Technology Services and Modernization Industry Solutions Business Consulting and Implementation Product Development Services Average market growth (Tieto s addressable market) Target profitability for Tieto 11 Tieto s objective: IT services revenue growth above the market (CAGR) Cost for Support Functions not visible in this view

132 Successful acquisitions accelerate our role as the preferred business renewal partner Our criteria: Canvisa Consulting Financial services consultancy in Sweden Sales ~ EUR 8 million Software Innovation Enterprise Content Management Sales ~ EUR 40 million Smilehouse ecommerce Sales ~ EUR 10 million Imano Consulting Sales ~ EUR 7 million Emric Credit processing in Nordics Sales ~ EUR 20 million Avega Consulting in Sweden Sales ~ EUR 45 million Petrostreamz Oil & Gas Sales ~ EUR 2 million NSEC Security services in Sweden Sales ~ EUR 3 million Meridium Digital customer experience Sales ~ EUR 7 million Strategic fit Business attractiveness stand alone Execution and integration asessment Valuation and expected returns Deal dynamics 12

133 Renewal driving consistent value creation Market opportunity based on customers agenda to accelerate innovation and efficiency Healthy company with strong balance sheet Focused investments, especially in data-driven opportunities and own industry solutions, to drive growth faster than the market Consistent profit improvement Attractive dividend policy 13

134 All information in this material is for informational purposes only. The opinions and viewpoints regarding, inter alia, the future of the company and markets are of Tieto and may not actually materialize. This information should not be construed as an investment recommendation or investment advice. All information expressed herein is subject to change without notice. Neither Tieto nor its officers nor employees shall have any liability for any loss sustained by anyone who has relied on the information provided.

135

136 Speakers in the Capital Market Day 2018 Kimmo Alkio President and CEO Håkan Dahlström Executive Vice President Technology Services and Modernization Ari Järvelä Executive Vice President Business Consulting and Implementation Satu Kiiskinen Executive Vice President Industrial and Consumer Services Katariina Kravi Executive Vice President Human Resources Tom Leskinen Executive Vice President Product Development Services

137 Speakers in the Capital Market Day 2018 Cristina Petrescu Executive Vice President Public, Healthcare and Welfare Janne Salminen Chief Financial Officer (acting) Christian Segersven Executive Vice President Financial Services Moderator Kia Haring Head of Global Communications

138 IR contacts Tanja Lounevirta Head of Investor Relations Phone Mobile Ilkka Palmén Finance Partner Mobile Tuija Silvennoinen Assistant Phone Mobile