IT services firm Tieto (OMXH: TIE1V, OMXS: TIEN) announced its new strategy for 2012-2016. The company aims to focus and simplify its operations. The company states becoming preferred partner in business and IT transformation with a strong position in Nordic countries as its objective. The focus will be on industry-based tailored solutions.
Tieto will continue operations on markets where it feels a top 3 position is attainable. Markets that fail to live up to that goal plus the 10% target for EBIT outlook will be optimized or left. Operations in Russia will be focused on Nordic customers and locally on financial services and oil and gas industries. The German operations are currently under review.
A planned reduction of 50 million Euros in the cost base will come from simplified operations, efficiency improvements, growth in high-margin services and personnel adjustments affecting some 1300 employees. Tieto says that planned redundancies are close to 500 in Finland, close to 300 in Sweden and close to 500 in other countries.
The company worded job cuts pretty much as a done deal, despite saying that negotiations with unions will now start, which is sure to ruffle some feathers. The measures will be implemented in 2012 with one-off costs estimated at around 50 million Euros. President and CEO Kimmo Alkio says that in addition to shareholders, customers and employees have given such feedback, that the company needs to refocus.
Investments will be made in Consulting and System Integration to cover the full IT lifecycle. Product Engineering Services aims to go global. In addition to the EBIT margin target, Tieto aims for EPS growth of over 15% as a long term incentive target. A minimum dividend payout ratio should be 50% of net results and debt/EBITDA below 1.5. The stock has climbed 5% in an otherwise weak market.
Showing posts with label Tieto. Show all posts
Showing posts with label Tieto. Show all posts
Tuesday, 20 March 2012
Tuesday, 6 March 2012
Nokia Siemens Networks outsources to Tieto
Nokia Siemens Networks and Tieto (OMXH: TIE1V, OMXS: TIEN) have signed an outsourcing agreement for a part of NSN’s mobile network operation support Subscriber Data Management systems maintenance, technical support and R&D. Approximately 240 employees in Tampere and Espoo will transfer to Tieto as existing employees. Tieto is working towards becoming a large outsourcing provider in R&D and IT services.
NSN’s decision is in line with its ongoing global strategy review to focus on core business areas and increase efficiency. Tieto and NSN have already been working together in various things. It is implied, that the workers who are switching to Tieto would not have sufficient amount of work in their old tasks but can help Tieto by working for various company arms in R&D, software architecture and project management. The agreement is subject to Finnish competition authorities’ approval.
NSN’s decision is in line with its ongoing global strategy review to focus on core business areas and increase efficiency. Tieto and NSN have already been working together in various things. It is implied, that the workers who are switching to Tieto would not have sufficient amount of work in their old tasks but can help Tieto by working for various company arms in R&D, software architecture and project management. The agreement is subject to Finnish competition authorities’ approval.
Thursday, 29 December 2011
Tieto complains IBM offer to Kela too cheap
According to an article in Tietoviikko magazine, Tieto Oyj (OMXH: TIE1V, OMXS: TIEN) has complained to Finnish Market Court on Finnish Social Insurance Institution Kela’s acquisition decision on maintenance of its enterprise data centre mainframe IBM “System z10”. Kela has previously handled the maintenance of its computer systems internally, but feels it is exceedingly difficult to keep doing so. After a public procurement process Kela decided to order the maintenance from IBM Corporation, the maker of the mainframe computer.
Tieto now complains to Market Court against said decision. Tieto’s offer was nearly 50% more expensive than the winning bid by IBM according to Kela’s calculations. Tieto had requested information from IBM on the license fees and equipment rental required to perform the machine maintenance and said that IBM’s offer represented up to 80% of the costs that Tieto would have incurred had it won the project, meaning it would have been making a loss if it bid the same amount as IBM did.
In October 2010 The European Commission initiated formal antitrust investigations against IBM related to the abuse of a dominant market position in mainframe computers market. The second of the cases that was under investigation at that point was about alleged discriminatory behaviour towards competing suppliers of mainframe maintenance services. Upon receiving an offer from IBM to settle the matter towards the end of 2010, EU commission made the offer terms legally binding. IBM committed to making spare parts & technical information swiftly available to other maintenance providers under “commercially reasonable and non-discriminatory terms”.
Tieto now asks for price information in IBM’s offer used for comparison in Kela’s calculations and asks the procurement decision to be overturned. Of course what is commercially reasonable is also commercially reasonable when offering to an end-customer. Thus IBM would be able to bid somewhat lower all things being equal. One can also naturally easily think of reasons why Tieto would be interested in the information it now asks. However, should the entire large difference in offers come from the license fees & equipment rental costs, commercially viable may be debatable.
Acquisitions decisions of Finnish State and municipal authorities and other contracting authorities with value above pre-determined (national and EU directive) thresholds are based on Finnish law on public procurement. The decisions are subject to mandatory publication rules. The Market Court may overturn public procurement decisions, adjust the process or order compensatory payments. EU Commission could impose a fine of up to 10 per cent of IBM's total turnover without having to prove a violation of EU competition rules, should IBM be in breach its commitments.
Tieto now complains to Market Court against said decision. Tieto’s offer was nearly 50% more expensive than the winning bid by IBM according to Kela’s calculations. Tieto had requested information from IBM on the license fees and equipment rental required to perform the machine maintenance and said that IBM’s offer represented up to 80% of the costs that Tieto would have incurred had it won the project, meaning it would have been making a loss if it bid the same amount as IBM did.
In October 2010 The European Commission initiated formal antitrust investigations against IBM related to the abuse of a dominant market position in mainframe computers market. The second of the cases that was under investigation at that point was about alleged discriminatory behaviour towards competing suppliers of mainframe maintenance services. Upon receiving an offer from IBM to settle the matter towards the end of 2010, EU commission made the offer terms legally binding. IBM committed to making spare parts & technical information swiftly available to other maintenance providers under “commercially reasonable and non-discriminatory terms”.
Tieto now asks for price information in IBM’s offer used for comparison in Kela’s calculations and asks the procurement decision to be overturned. Of course what is commercially reasonable is also commercially reasonable when offering to an end-customer. Thus IBM would be able to bid somewhat lower all things being equal. One can also naturally easily think of reasons why Tieto would be interested in the information it now asks. However, should the entire large difference in offers come from the license fees & equipment rental costs, commercially viable may be debatable.
Acquisitions decisions of Finnish State and municipal authorities and other contracting authorities with value above pre-determined (national and EU directive) thresholds are based on Finnish law on public procurement. The decisions are subject to mandatory publication rules. The Market Court may overturn public procurement decisions, adjust the process or order compensatory payments. EU Commission could impose a fine of up to 10 per cent of IBM's total turnover without having to prove a violation of EU competition rules, should IBM be in breach its commitments.
Saturday, 10 December 2011
Other week 49 2011 news from Nordic companies
Here are some additional newsworthy events in brief:
Financial Times is reporting that Nokia is coaxing interest of potential buyers to divest its luxury phone brand Vertu. Some private equity firms seem interested and the sales price should be several hundred million Euros.
Eu/Norway fish talks for 2012 North Sea fisheries resulted in increases for herring, haddock and whiting quotas (with North Sea herring quota more than doubled to 405,000 tons), with cod and saithe quotas down a notch. Further talks will be made for mackerel total allowed catch as a solution in the mackerel war with Faroe Islands and Iceland is sought after.
Christmas demand has raised Norwegian salmon spot prices some 20% within a few weeks. While still far away from 45 NOK per kilo levels of this summer, this breaks a lengthy trend straight down and farmed salmon companies have responded positively.
Vestas turbine in Ayrshire wind farm, Scotland caught fire in hurricane Bawbag.
Maersk Drilling received LOA from Det Norske Oljeselskab (OSE: DETNOR) to Draupne license in the North Sea for newbuild jack-up rig, XL Enhanced 2, which is designed for use in ultra harsh environment and is currently under construction in Singapore scheduled to be delivered in 2014. The total value of the three year contract is over 400 million USD.
Outotec has acquires furnace refractory demolition business Kiln Services Australia. The company envisions doubling Kiln’s annual sales over the next three years.
Højgaard Industri, a part of Højgaard Holding (CPH: HOEJ B) won a new management contract with Banedanmark for the production of concrete sleepers at the Fredericia facility. The previous contract with between the companies was coming to a close and Højgaard Industri won out in the contract award procedure.
There have been wild swings in Frontline (OSE: FRO) stock after its creative restructuring plan was made public this week.
Kone Corporation will supply elevators and escalators to Lishui Wandi Plaza. The large eight building complex in the city of Lishui in Zhejiang province should be completed in 2013.
Clas Ohlson (STO: CLAS B) missed expectations for 1.5.2011-31.10.2011 period.
TTS Group ASA won two contracts from Hyundai Mipo Dockyard co. Ltd worth around 117,5 million NOK in total.
Purchase-to-pay and Financial Management solutions software provider. Basware Corporation lowers 2011 estimates.
Cevian keeps buying into Tieto ((OMXH: TIE1V, OMXS: TIEN).
Neste Oil is selling its 50% portion of iso-octane, a gasoline component produced from Butane, plant in Edmonton, Canada to Keyera Corp for 99 million USD.
Financial Times is reporting that Nokia is coaxing interest of potential buyers to divest its luxury phone brand Vertu. Some private equity firms seem interested and the sales price should be several hundred million Euros.
Eu/Norway fish talks for 2012 North Sea fisheries resulted in increases for herring, haddock and whiting quotas (with North Sea herring quota more than doubled to 405,000 tons), with cod and saithe quotas down a notch. Further talks will be made for mackerel total allowed catch as a solution in the mackerel war with Faroe Islands and Iceland is sought after.
Christmas demand has raised Norwegian salmon spot prices some 20% within a few weeks. While still far away from 45 NOK per kilo levels of this summer, this breaks a lengthy trend straight down and farmed salmon companies have responded positively.
Vestas turbine in Ayrshire wind farm, Scotland caught fire in hurricane Bawbag.
Maersk Drilling received LOA from Det Norske Oljeselskab (OSE: DETNOR) to Draupne license in the North Sea for newbuild jack-up rig, XL Enhanced 2, which is designed for use in ultra harsh environment and is currently under construction in Singapore scheduled to be delivered in 2014. The total value of the three year contract is over 400 million USD.
Outotec has acquires furnace refractory demolition business Kiln Services Australia. The company envisions doubling Kiln’s annual sales over the next three years.
Højgaard Industri, a part of Højgaard Holding (CPH: HOEJ B) won a new management contract with Banedanmark for the production of concrete sleepers at the Fredericia facility. The previous contract with between the companies was coming to a close and Højgaard Industri won out in the contract award procedure.
There have been wild swings in Frontline (OSE: FRO) stock after its creative restructuring plan was made public this week.
Kone Corporation will supply elevators and escalators to Lishui Wandi Plaza. The large eight building complex in the city of Lishui in Zhejiang province should be completed in 2013.
Clas Ohlson (STO: CLAS B) missed expectations for 1.5.2011-31.10.2011 period.
TTS Group ASA won two contracts from Hyundai Mipo Dockyard co. Ltd worth around 117,5 million NOK in total.
Purchase-to-pay and Financial Management solutions software provider. Basware Corporation lowers 2011 estimates.
Cevian keeps buying into Tieto ((OMXH: TIE1V, OMXS: TIEN).
Neste Oil is selling its 50% portion of iso-octane, a gasoline component produced from Butane, plant in Edmonton, Canada to Keyera Corp for 99 million USD.
Tuesday, 26 July 2011
Tieto appoints new President & CEO
IT service company Tieto (OMXH: TIE1V, OMXS: TIEN) has been searching for a new President & CEO for quite some time. Finally today they could announce the selection of Kimmo Alkio, current President and CEO of anti-virus and computer security software firm F-Secure Corporation (OMX: FSC1V), to the job. Alkio has been serving on Tieto’s Board Of Directors for two years.
The position of President & CEO had been vacated for three months with Aki Karppinen working as interim President & CEO since the end of April. Tieto’s Chairman of the Board Markku Pohjola said that the company wanted someone from the computer business, adjacent to IT service. F-Secure said Alkio will continue to lead the company until 31 October 2011 and that F-Secure aims to find a new CEO within H2 of 2011.
The position of President & CEO had been vacated for three months with Aki Karppinen working as interim President & CEO since the end of April. Tieto’s Chairman of the Board Markku Pohjola said that the company wanted someone from the computer business, adjacent to IT service. F-Secure said Alkio will continue to lead the company until 31 October 2011 and that F-Secure aims to find a new CEO within H2 of 2011.
Friday, 22 July 2011
Tieto grows sales but growing expenses hurt bottom line
Tieto’s (OMXH: TIE1V, OMXS: TIEN) net sales grew to 462 million Euro, up 7% from the comparison period but variable costs from use of subcontractors grew faster than sales and operating profit was down slightly to 19.2 million. Operating profit does however include a 5 million plus restructuring cost from Danish operations.
ICT infrastructure development and subsequent demand for applications is picking up and the company foresees outsourcing of ICT infrastructure, application management and business processes to remain brisk. Tieto says that offshore competitions has led to continued price pressure in basic services and although Tieto still enjoys some benefits from being a local supplier, Nordic customers are becoming more receptive to the use of offshore resources. Skilled workers are also in short supply in the Nordic countries.
The firm maintains its 2011 outlook of 2-4% growth in Western European IT services market and expects its own sales to develop in line with that. Tieto expects full-year EBIT to be above 2010 level of 110 million Euro. The share is trading close to even par 30 minutes in. More information is here.
ICT infrastructure development and subsequent demand for applications is picking up and the company foresees outsourcing of ICT infrastructure, application management and business processes to remain brisk. Tieto says that offshore competitions has led to continued price pressure in basic services and although Tieto still enjoys some benefits from being a local supplier, Nordic customers are becoming more receptive to the use of offshore resources. Skilled workers are also in short supply in the Nordic countries.
The firm maintains its 2011 outlook of 2-4% growth in Western European IT services market and expects its own sales to develop in line with that. Tieto expects full-year EBIT to be above 2010 level of 110 million Euro. The share is trading close to even par 30 minutes in. More information is here.
Thursday, 14 July 2011
Some Finnish heavy industry news in brief
Talvivaara Mining Company (OMX: TLV1V, LSE:TALV) will replace IT service company Tieto (HEL: TIE1V, OMXS: TIEN) in OMXH25 list on August 1, 2011.
Outotec (OMXH: OTE1V) received an order worth roughly 50 million Euros from Maaden Bauxite Alumina Company (JV of Saudi Arabian Mining Company (Maaden) and Alcoa) in Saudi Arabia. It will deliver alumina calcination technology, precisely two calciners to integrated aluminum complex at Ras Al Khair.
Metso (OMX: MEO1V) has received numerous large orders in last few days. Today the company said it is to provide mill maintenance to Amcor in Australia. Yesterday the company said it will supply minerals processing equipment to Taigang Group Lanxian Mining Co. Ltd. (TISCO) in China. On Tuesday Metso said it will deliver CHP boiler plants to Fortum (OMX: FUM1V) in Finland and in Latvia. And finally on Monday the company said it will perform replacement of chemical recovery boiler of UBE chemicals in Thailand.
Outotec (OMXH: OTE1V) received an order worth roughly 50 million Euros from Maaden Bauxite Alumina Company (JV of Saudi Arabian Mining Company (Maaden) and Alcoa) in Saudi Arabia. It will deliver alumina calcination technology, precisely two calciners to integrated aluminum complex at Ras Al Khair.
Metso (OMX: MEO1V) has received numerous large orders in last few days. Today the company said it is to provide mill maintenance to Amcor in Australia. Yesterday the company said it will supply minerals processing equipment to Taigang Group Lanxian Mining Co. Ltd. (TISCO) in China. On Tuesday Metso said it will deliver CHP boiler plants to Fortum (OMX: FUM1V) in Finland and in Latvia. And finally on Monday the company said it will perform replacement of chemical recovery boiler of UBE chemicals in Thailand.
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