Tietoevry (AO) | Hold | Organic growth, still the missing piece

研报英文原文证据摘录

Tietoevry (AO) | Hold | Organic growth, still the missing piece

rom software. Banktech declined 6% organically versus our -4% estimate, while Indtech was flat

compared with our +2% forecast. Management pointed to softer market conditions affecting parts of both Indtech and Banktech,

compounding the already well-known legacy contract headwinds.

The implication is less reassuring: the growth slowdown is broadening beyond consulting, suggesting demand weakness is

becoming more pervasive rather than remaining confined to a single business.

Clean beat on margin, confirming the structural reset

The margin beat was unequivocal. Adjusted EBITA margin expanded 5.5ppt to 14.9%, driven primarily by the cost optimisation

programme, with profitability improving across every business.

All four segments exceeded our margin estimates by 0.8-2.7ppt, led by Banktech (15.6% versus 13.0% KECH) and Indtech (16.2%

versus 13.5% KECH).

The pattern is consistent with Q1: earnings quality continues to improve through cost actions and mix, largely independent of the

demand backdrop. It remains the only pillar of the investment case that is working, but it is continuing to deliver with impressive

consistency.

Now shooting for -5% to -3% this year, consensus still has room to fall

The full-year guidance cut announced on 17 July reflected weaker market conditions, with organic growth now expected at -5%

to -3% while the adjusted EBITA margin guidance remains unchanged at 14.8-15.8%.

Today's results simply validate that reset. H1 organic growth of -4% sits comfortably within the revised range, and nothing in the

Q2 print suggests another guidance cut is imminent.

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