Income statement (IFRS)

INCOME STATEMENT (IFRS)
 
EUR million Note 1 Jan–
31 Dec 2014
1 Jan–
31 Dec 2013
Before IFRS 11 restatement
1 Jan–31 Dec 2013
Net sales   1 1 522.5 1 606.8 1 671.3
           
Other operating income   3 18.1 18.1 12.4
           
Cost of sales     247.4 268.4 276.6
Employee benefit expenses 6, 7 846.0 923.7 957.9
Depreciation and amortization 11, 12 64.4 81.7 82.0
Impairment loss   1 39.6 8.0 8.0
Other operating expenses   4 287.4 264.7 271.0
Share of profit from investments accounted for using the equity method   16 5.3 7.3 -
Operating profit     61.1 85.7 88.2
           
Interest and other financial income   8 1.2 5.3 5.4
Interest and other financial expenses   8 -4.9 -12.7 -12.8
Net exchange losses and gains   8 -0.8 0.8 0.8
Profit before taxes     56.6 79.1 81.6
           
Income taxes   9 -21.6 -16.9 -19.4
Net profit for the period     35.0 62.2 62.2
           
Net profit for the period attributable to          
Shareholders of the Parent company     35.0 62.2 62.2
Non-controlling interest     0.0 0.0 0.0
      35.0 62.2 62.2
Earnings per share attributable to the shareholders of the Parent company, EUR 10      
Basic     0.48 0.86 0.86
Diluted     0.48 0.86 0.86
           
Statement of comprehensive income, EUR million          
           
Net profit for the period     35.0 62.2 62.2
Items that may be reclassified subsequently to profit or loss          
Translation difference     -10.1 -21.2 -21.2
Cash flow hedges (net of tax)     1.4 -1.8 -1.8
Items that will not be reclassified subsequently to profit or loss          
Actuarial gain/loss on post employment benefit obligations (net of tax)     -10.3 3.3 3.3
Total comprehensive income     16.0 42.5 42.5
           
Total comprehensive income attributable to          
Shareholders of the Parent company     16.0 42.5 42.5
Non-controlling interest     0.0 0.0 0.0
      16.0 42.5 42.5
 
Notes are an integral part of these consolidated financial statements.

 Comments to the income statement

Full-year net sales were down by 5.3% and amounted to EUR 1 522.5 (1 606.8) million. Divestments had a negative impact of EUR 43 million and acquisitions added EUR 17 million to sales. Currency fluctuations had a negative impact of EUR 42 million on sales. Organically, net sales in local currencies declined by 1.1%. In IT services, net sales in local currencies were organically up by 2.6%.

Operating profit (EBIT) amounted to EUR 61.1 (85.7) million, representing a margin of 4.0% (5.3). Operating profit included EUR 39.6 million in goodwill impairment charges, EUR 49.8 million in restructuring costs and EUR 0.3 million in capital gains. Operating profit excl. one-off items stood at EUR 150.2 (141.2) million, or 9.9% (8.8) of net sales. The efficiency measures taken in 2013 and 2014 had a positive effect of around EUR 47 million on operating profit compared with 2013. On the other hand, personnel expenses were strained by salary inflation of around EUR 21 million and the increase in bonus accruals of around EUR 18 million. Additionally, Tieto increased its investments in offering development by EUR 10 million. Currency changes had a negative of EUR 6 million on operating profit.

Employee benefit expenses declined by 8% and represented 56% (57) of net sales. Employee benefit expenses include costs from personnel restructuring of EUR 30.4 (46.9) million. The result-based bonuses were EUR 27.5 (9.8) million. The average number of full-time employees was 14 007 (15 170).

Net financial expenses stood at EUR 4.5 (6.6) million in the full year. Net interest expenses were EUR 2.8 (6.5) million and net losses from foreign exchange transactions EUR 0.8 (positive 0.8) million. Other financial income and expenses amounted to EUR -0.9 (-0.9) million.

Tax expenses reported for the year include EUR 18.9 million payable on the profit for the year and EUR 0.9 million negative from the change in deferred taxes. Tax rate was 20.0% in Finland and 22.0% in Sweden. High Group tax rate is mainly attributable to goodwill impairment charges which are not tax deductible. Net profit amounted to EUR 35.0 (62.2) million

 

Cost structure, % 2014 2013
Cost of sales 16.7 17.4
Employee benefit expenses 57.0 59.7
Other operating expenses 19.3 17.1
Impairment loss 2.7 0.5
Depreciation and amortization 4.3 5.3
Total 100.0 100.0