Income statement (IFRS)

INCOME STATEMENT (IFRS)
 
EUR million Note 1 Jan–
31 Dec 2015
1 Jan–
31 Dec 2014
Net sales   1 1 460.1 1 522.5
         
Other operating income   3 30.5 18.1
         
Cost of sales     -230.2 -247.4
Employee benefit expenses 6, 7 -828.3 -846.0
Depreciation and amortization 11, 12 -56.6 -64.4
Impairment loss   1 - -39.6
Other operating expenses   4 -254.5 -287.4
Share of profit from investments accounted for using the equity method   16 4.2 5.3
Operating profit     125.2 61.1
         
Interest and other financial income   8 1.9 1.2
Interest and other financial expenses   8 -5.4 -4.9
Net exchange losses and gains   8 -2.4 -0.8
Profit before taxes     119.3 56.6
         
Income taxes   9 -28.8 -21.6
Net profit for the period     90.5 35.0
         
Net profit for the period attributable to        
Shareholders of the Parent company     90.5 35.0
Non-controlling interest     0.0 0.0
      90.5 35.0
Earnings per share attributable to the shareholders of the Parent company, EUR 10    
Basic     1.23 0.48
Diluted     1.23 0.48
         
Statement of comprehensive income, EUR million        
         
Net profit for the period     90.5 35.0
Items that may be reclassified subsequently to profit or loss        
Translation difference     2.3 -10.1
Cash flow hedges (net of tax)     0.5 1.4
Items that will not be reclassified subsequently to profit or loss        
Actuarial gain/loss on post employment benefit obligations (net of tax)     9.5 -10.3
Total comprehensive income     102.8 16.0
         
Total comprehensive income attributable to        
Shareholders of the Parent company     102.8 16.0
Non-controlling interest     0.0 0.0
      102.8 16.0
 
Notes are an integral part of these consolidated financial statements.

Comments to the income statement

Full-year net sales amounted to EUR 1 460.1 (1 522.5) million, down by 4.1%. Organically, net sales in local currencies were down by 2.6%. The decline was attributable to large projects that were concluded in Product Development Services, as announced in October 2014. Currency fluctuations had a negative impact of EUR 28 million on sales. The acquisitions added EUR 17 million in sales and divestments had a negative impact of EUR 15 million. In IT services, net sales in local currencies were organically up by 2.7%. 

Full-year operating profit (EBIT) amounted to EUR 125.2 (61.1) million, representing a margin of 8.6% (4.0). Operating profit included EUR 31.7 million in restructuring costs and EUR 6.2 million in capital gains and EUR -0.1 million in adjustment for the UK forest business divestment in 2013. Operating profit excl. one-off items1) stood at EUR 150.8 (150.2) million, or 10.3% (9.9) of net sales.

Tieto increased its investments in growth businesses and profitability was also affected by costs related to automation programme in Managed Services. Related costs increased by EUR 15 million in the full year. Currency changes had a negative impact of EUR 9 million on operating profit. Efficiency measures had a positive effect of around EUR 30 million on IT services’ operating profit while the positive impact of gross savings was curbed by salary inflation of around EUR 20 million and recruitments in new service areas.

Employee benefit expenses declined by 2.1% and represented 56.7% (55.6) of net sales. Employee benefit expenses include costs from personnel restructuring of EUR 30.9 (30.4) million. The result-based bonus accruals were EUR 29.7 (27.5) million. The average number of full-time employees was 13 184 (14 007).

Net financial expenses stood at EUR 5.9 (4.5) million in the full year. Net interest expenses were EUR 2.2 (2.8) million and net losses from foreign exchange transactions EUR 2.4 (0.8) million. Other financial income and expenses amounted to EUR -1.3 (-0.9) million.

Tax expenses reported for the year include EUR 22.6 million payable on the profit for the year and EUR 6.5 million negative from the change in deferred taxes. Tax rate was 20.0% in Finland and 22.0% in Sweden.

Cost structure, % 2015 2014
Cost of sales 16.8 16.7
Employee benefit expenses 60.5 57.0
Other operating expenses 18.6 19.3
Impairment loss - 2.7
Depreciation and amortization 4.1 4.3
Total 100.0 100.0