Notes to the consolidated financial statements (IFRS)

1. SEGMENT INFORMATION
             
The operating segments constitute the structure in which the Leadership Team makes strategic decisions and whose reports are regularly reviewed by the Leadership Team.
     
The Leadership Team considers and evaluates the business as a matrix structure comprising service lines and industry groups. In a matrix organisation, the company shall determine the reportable operating segments so that the company can provide sufficient information to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates. In Tieto the service line dimension constitutes the main operating segments in which the strategic decisions are made and thus form a basis for defining the reportable segments according to IFRS 8.
     
The reportable operating segments in the service line dimension are Managed Services, Consulting and System Integration, Industry Products and Product Development Services. The reportable service line segments constitute the structure for cash-generating units, to which the goodwill acquired in business combinations has been reallocated.
     
Group level costs like the costs related to Global management, Group's share of support functions and other non-allocated costs are not included in the service line segments but are reported under Support Functions and Global Management in the segment reporting.
     
The customer sales of service lines also present the reporting of products and services of Tieto.
     
The Leadership Team assesses the performance of the operating segments based on operating profit (EBIT) which corresponds to the operating profit in the Income statement according to IFRS.
             
Customer sales by service line
EUR million       2014
1–12
2013
1–12
Change
%
Managed Services       512 492 4
Consulting and System Integration       387 410 -6
Industry Products       395 416 -5
Product Development Services       229 289 -21
Group total       1 522 1 607 -5
 
No internal sales occur between service lines as in the management accounting, revenue and costs are booked directly to the respective customer projects in the service lines.
 
             
Net sales by country
EUR million       2014
1–12
2013
1–12
Change
%
Finland       711 729 -3
Sweden       548 555 -1
Other       264 322 -18
Group total       1 522 1 607 -5
             
In Finland, IT services sales grew by 2% in 2014.
             
In Sweden, growth in local currencies was 4%. IT services grew by 6% in local currencies.
             
In Norway, growth in local currencies was 5%.
             
             
Customer sales by industry group
EUR million       2014
1–12
2013
1–12
Change
%
Financial Services       335 331 1
Manufacturing, Retail and Logistics       311 305 2
Public, Healthcare and Welfare       410 403 2
Telecom, Media and Energy       238 279 -15
Product Development Services       229 289 -21
Group total       1 522 1 607 -5
 
Customer sales to the telecom sector were EUR 370 (445) million.  
 
Revenues derived from any single external customer during 2014 or 2013 did not exceed the 10 % level of the total net sales of the Group.
 
             
Operating profit (EBIT) by service line
EUR million       2014
1–12
2013
1–12
Change
%
Managed Services       37.6 10.2 269.9
Consulting and System Integration       34.9 9.0 289.3
Industry Products       68.1 81.2 -16.1
Product Development Services       -42.9 8.4 -613.0
Support Functions and Global Management       -36.5 -23.0 -58.5
Operating profit (EBIT)       61.1 85.7 -28.7
             
             
Operating margin (EBIT) by service line
%       2014
1–12
2013
1–12
Change
Managed Services       7.3 2.1 5.3
Consulting and System Integration       9.0 2.2 6.8
Industry Products       17.3 19.5 -2.3
Product Development Services       -18.7 2.9 -21.6
Operating margin (EBIT)       4.0 5.3 -1.3
             
             
Operating profit (EBIT) excl. one-off items by service line
EUR million       2014
1–12
2013
1–12
Change
%
Managed Services       38.4 21.0 82.8
Consulting and System Integration       38.3 32.0 19.4
Industry Products       70.3 82.8 -15.1
Product Development Services       21.7 19.4 11.6
Support Functions and Global Management       -18.5 -14.2 -30.6
Operating profit (EBIT)       150.2 141.2 6.4
             
             
Operating margin (EBIT) excl. one-off items by service line
%       2014
1–12
2013
1–12
Change
Managed Services       7.5 4.3 3.2
Consulting and System Integration       9.9 7.8 2.1
Industry Products       17.8 19.9 -2.1
Product Development Services       9.5 6.7 2.7
Operating margin (EBIT)       9.9 8.8 1.1
             
             
Personnel by service line
  End of period
2014
1–12
Change
%
Share
%
2013
1–12
Average
2014
1–12
2013
1–12
Managed Services 3 321 7 24 3 090 3 162 3 112
Consulting and System Integration 3 953 -1 29 3 986 3 903 4 192
Industry Products 3 181 9 23 2 919 3 033 2 996
Product Development Services 2 114 -34 15 3 193 2 761 3 673
Service Lines total 12 568 -5 92 13 188 12 859 13 973
Industry Groups 415 6 3 390 408 418
Support Functions and Global Management 738 -0 5 740 740 780
Group total 13 720 -4 100 14 318 14 007 15 170
 
             
Personnel by country
  End of period
2014
1–12
Change
%
Share
%
2013
1–12
Average
2014
1–12
2013
1–12
Finland 4 122 -7 30 4 409 4 265 4 678
Sweden 2 548 -6 19 2 701 2 586 2 811
Czech Republic 2 077 7 15 1 940 2 002 1 920
India 1 979 24 14 1 591 1 752 1 579
China 379 -60 3 949 694 1 041
Latvia 680 -1 5 689 687 671
Poland 507 -30 4 722 606 884
Norway 417 -5 3 438 424 444
Philippines 227 -2 2 231 235 197
Lithuania 122 -5 1 129 127 132
Other 662 28 5 519 630 813
Group total 13 720 -4 100 14 318 14 007 15 170
Onshore countries 7 386 -6 54 7 835 7 574 8 513
Offshore countries 6 334 -2 46 6 483 6 433 6 657
Group total 13 720 -4 100 14 318 14 007 15 170
             
             
Non-current assets by country
EUR million       2014
31 Dec
2013
31 Dec
Change
%
Finland       84.6 101.5 -17
Sweden       24.6 28.0 -12
Other       5.8 9.2 -37
Total non-current assets       115.0 138.7 -17
 
Goodwill is allocated to the Cash Generating Units, which include several countries and therefore goodwill is not included in the country specific non-current assets shown above.
 
             
 Depreciation by service line
EUR million       2014
1–12
2013
1–12
Change
%
Managed Services       50.8 67.1 -24
Consulting and System Integration       0.7 1.0 -31
Industry Products       0.4 0.5 -19
Product Development Services       1.0 0.7 41
Support Functions and Global Management       10.7 8.8 21
Group total       63.5 78.1 -19
 
 
Amortization on allocated intangible assets from acquisitions by service line
EUR million       2014
1–12
2013
1–12
Change
%
Managed Services       0.2 1.8 -88
Consulting and System Integration       0.5 0.6 -21
Industry Products       0.3 0.9 -66
Product Development Services       - 0.4 -100
Support Functions and Global Management       - - -
Group total       1.0 3.7 -74
             
             
Impairment losses by service line
EUR million       2014
1–12
2013
1–12
Change
%
Managed Services       - 0.1 -100
Consulting and System Integration       - 2.6 -100
Industry Products       - 1.3 -100
Product Development Services       39.6 3.6 1 014
Support Functions and Global Management       - 0.4 -100
Group total       39.6 8.0 398