Tieto Oyj (HEL:TIETO)

CMD 2020

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Dec 3, 2020

Ladies and gentlemen, welcome to Tieto Every's first ever Capital Market Day. My name is Kjell Arne Hansen. I am the Head of Investor Relations for the company and I will be your moderator and host during the afternoon. We have planned this day for a long time and we have a very rich and interesting program ahead of us during the afternoon and we are doing this program and hosting this event under exceptional circumstances And I would just like to point out that we are, of course, hosting a safe event and complying with all local restrictions and regulations related to the COVID-nineteen pandemic. Now, Tietuevery is a fully and truly Nordic company. That means that the Management Group that you see on the screen in front of you are situated in several different locations. So during the afternoon, we will broadcast live from 4 different locations. I am speaking to you from our offices in Oslo, Norway. During the afternoon, we will have presentations from Helsinki in Finland, Stockholm in Sweden, and we will even visit Berlin, where we will hear from our head of product development services. So today, like every other day in Tier 2 Every, we trust the technology and we hope that everyone will enjoy the day. Now, before we start the program, I would like to go through the agenda and some practical information. Our first presenter of the day is our President and CEO Kimo Allkiyo. And Kimo is on stage in Helsinki and eager to share our ambitions with you today. When Kim is done presenting, we will go back to Oslo where Thomas Noras, our Head of Digital Consulting will present. Then we will return back to Helsinki for a presentation from Christian Segeschwend, our Head of Industry Software and Financial Services Solution. When we are done with Christian's presentation, we will have a short break, stretch our legs. And when we join each other online again, Johan Tochinson will be ready on stage in Stockholm to present Cloud and Infrastructure. After Johan's presentation, we will visit Harri in Berlin, where he will present product development services. After Harri's presentation, we have also a very interesting little bit for you. Then Arie Jervela our Head of International Operations will host a roundtable discussion with all our country managers. So he will be joined on our virtual stage by Christian Pedersen in Norway, Karin Schrail in Stockholm in Sweden and Sato Kieskeren in Helsinki. And of course, as the final speaker of the day, we will hear a presentation from our CFO, Tommy Herleinen. Now some practicalities. You will have a chance to ask a question after each presentation, except for the round table discussion with the country managers. The Q and A sessions will be moderated by our excellent Head of Communication and Sustainability Kia Harding from our main control center in Helsinki. Now, if you would like to ask a question, you need to join the event via the Teams link on the event page. That link should be very clearly visible on the lower part of the event page you are currently watching. If you'd like to ask a question, join the Teams link, raise your hand by clicking the hand icon and then our moderator will put you in the queue. When it's ready for your turn, Kia will state your name, Remember to unmute your phone and state your question. You will also have the chance to raise questions via the teams chat function and we encourage you to do so, but be aware that we will prioritize those who would like to ask questions via the live audio. And also be aware that if you are watching the event via the Teams link, you will only be able to see the presenter and not the slides being shown. So that I think was all the practicalities. Now we are ready to start the show. And as a first presenter for the day, I invite our President and CEO Kimo Allkew to the stage in Helsinki. Kimo, please the stage is yours. A very warm welcome also on my behalf to our very first Capital Markets Day as Tieto Evry. This is a very important day to be able to share with you, after 11 months of integration, the progress we have made to provide views to our businesses, hear from members of our leadership team and to paint a picture of our future ambition, views of the future and actually our ways to get there. Our future view relates extensively to the data rich world within which we have lived for quite some time and are, to begin with, very, very active in. During the past couple of years, significant progress has been made as we've been realizing many of the opportunities in creating more personalized and intelligent solutions all across the world, while much more in the very rich data oriented world is possible. I believe we are still at an early stage on what is truly possible. This technology and data driven intelligent world is visible at an accelerating pace in many of our or all of our day to day lives. Whether we think of the reality of the data oriented intelligent world realizing through devices such as the intelligent wearables that are becoming more and more popular all around the world, servicing ourselves from an individual health standpoint. Whether we think about our customers extending their businesses based on consumer insight, as an example, retailers extending into banking or some of our customers extending their value propositions and business models from product orientation as a totally new business model and actually creating new growth opportunities and new revenue streams. All these examples are based on smart use of data, which is being enriched continuously every second all across the world. This stride towards a data driven world is very meaningful for all of us in Tieto Every, and we are in full support of the ambitions and interest of all of our main constituents in creating highly advanced, sustainable and competitive societies. The opportunities moving forward from a societal standpoint, from a business standpoint, I claim will be very, very attractive once very smart adoption of new technologies are properly applied. As this phenomenon is already underway, it is fair to recognize that a fundamental change on how value is created is actually proceeding at a very rapid pace. We are shifting from the era of aiming to produce goods and services faster and better to experiences enabled by data. The acceleration of the digital world is also being elevated during the pandemic through new type of practical needs, as an example, around digital and preventive healthcare. There are also, by nature, number of technology led advancements that create the opportunity for businesses and the societies to move to the data oriented intelligent world even faster. Some of the main technological drivers have to do with areas such as cloud, data and analytics and overall software development across the world, including areas such as open APIs, which also enable much more ecosystem ways of working. This development, naturally, we also see as being good opportunities in terms of theater every's interests. Furthermore, I would like to also highlight before I go into the views of exactly what will we do in the future, let us also pay attention to how our customers are changing in their ways of working. There is a fundamental shift underway already into which we are adopting also very fast. Customers, enterprises are shifting from the traditional large systemic approaches running larger scale design, build, run types of development stages into what I would call highly adaptive and rapid development cycle based ways of working where the concepts like DevOps are becoming the absolute norm on how we shall function in the industry. And with this in mind, we also recognize certain very specific market growth drivers in combination of the industry drivers, the changes in the ways of working towards more agile, the main industry wide growth elements we'd like to be highlighting have to do with cloud services, data and analytics, core software and automation and DevOps. I continue to be highly optimistic, as we've seen in prior years, throughout the new types of technology cycles, new innovation and new growth opportunities are indeed prevailing. When we think about the in a very fast pacing environment, we provide value in 3 distinct categories in terms of what's very important from a standpoint of our customers. We support the creation of digital products and services towards the end consumers, towards the end citizens. We provide ample amount of capabilities, technologies to support our customers becoming the fast moving, agile or digital enterprises, all in support of helping our societies to continue to be some of the most advanced societies in the world through the type of digitally oriented citizen services. We also have a very strong foundation to begin with and a history of being very active in driving the type of a modernization of our customers' businesses, the industries where we operate and the regions in the world. As an example, we have in the Nordics over 10,000,000 citizens being served through our health and care solutions. We actually deliver some of the most competitive, some of the most advanced cloud services, both for the enterprises and the public sector. We have been recognized for pioneering roles in areas such as IoT and 5 gs. And as an example, we have actually we are running billions of transactions through Tieto Every Financial Services Software on a global basis supporting the type of a fintech developments in the world markets, specifically through Financial Services. And furthermore, we bring to our main markets 50 years of experience in realizing complex enterprise and public sector transformations across practically all significant technology cycles. So as the combined theater every already today, we are clearly stronger than either company would have been before the merger. Through the years and through the merger, we have also built a strong proposition in the markets and businesses within which we operate. We have the largest reach of any player in this industry in the Nordic countries. We have approximately 80% of our revenues residing within the Nordic markets, while our software businesses and product development services is embarking on a much more global expansion path and globally oriented growth opportunities. 2nd of all, our services reach has a great fit in terms of what's required in today's and tomorrow's digital society, covering capabilities from digital consulting, advanced analytics, data platforms, cloud native apps development, big role from a cloud and infrastructure standpoint, supporting the modernization from legacy environments into multi cloud with some of the world leading partnerships in the public cloud domain. And actually, we have our software businesses, combination of financial services and industry software, making up over 30% of our close to €3,000,000,000 revenues. And extremely importantly, the kind of power of the company naturally resides with our 24,000 colleagues around the world, whereby we have 12,000 colleagues feet on the street with our customers, predominantly in the Nordic countries on a day by day basis. And we are seeing clearly that the competitiveness of Theatoevery has already been augmented by the integration underway. I would also like to now turn the thinking a bit towards the future. Based on the market outlook and the solid foundation of our businesses, which you'll be hearing much more during the afternoon, we have a number of choices to build from. If I first begin with the combination of Nordics and then Nordics and then we go towards the international. In the Nordic countries, we believe there are ample growth opportunities in the combination of cloud and infrastructure. Digital consulting have a lot to do with the areas around cloud, data and analytics as well as the software businesses within the Nordics as well. And very specifically, the software businesses, which make up about 30% of the company, combination of industry software and financial services solutions, have already been working in international markets, and the years to come will be very exciting as we look at further growth and expansion opportunities. With this in mind, our ambition is very clear to be reshaping the growth profile of Tieto Evri in the years to come based on the global capabilities, existing business knowledge for footprint we have and naturally aiming to be very well performing in terms of also financials. With this in mind, we have prioritized already for the year 2021 onwards the main elements we believe we shall be investing into that will be the first drivers of elevating the growth profile of the company, all based on our belief and feedback from customers, reading the market signals, how to best support the advancement of our customers' businesses, building on our capabilities that we have, and we have 2 categories of growth choices. First one has to do with the areas very relevant to the larger enterprise customers and the public sector have to do with public cloud services, data and analytics, as well as DevOps and automation, in the range of 20% likely over CAGR growth we are looking for from these domains. The second category have to do a lot with our software businesses, including more of the international expansion potential, have to do with payment software, card services, our Nordic Healthcare Citizen Services as well as the continued good performance and growth potential of our Product Development Services business aiming at over 10% growth. So we believe these are highly important and a very good fit to specific interest that and the types of dialogues we have of investor priorities with our customers as well. With these growth drivers in mind, we naturally continue to see favorable views into our business mix development in support of aiming to improve our competitiveness and scale. Quite practically, the category of digital have a lot to do with the topics I've talked about so far, cloud, data and analytics, DevOps, automation and our high growth software businesses. This part of the revenue mix growing to about 60% by 2023 and deserving vast majority of our investments, around 70% of it, while as we have predicted for many years in a row, the traditional legacy type of infrastructure, legacy type of application services shall diminish and by with that in mind, naturally deserving significantly lower proportion of our investment capacity. I would also like to confirm we fully anticipate our investment level to be between 4% 5% of revenues. We believe with this level, we have ample investment capacity to be very competitive and look at the type of new technologies, new type of software architectures that will accelerate our competitiveness and give even greater scale in the years to come. And now it is time to move to one of the most interesting parts of today's Capital Markets Day, our financial targets. We have 5 categories, what we call financial targets by 2023, and I'd like to naturally go through in each one of these carefully. From a growth standpoint, our target is to accelerate growth to 5% by 2023. This is very specifically driven by the topics, solution domains I have a lot referred to earlier, cloud, data, DevOps and software. Furthermore, on the profitability side, EBITA adjusted 15% by 2023, main drivers being synergy realization, the developments in the business mix and support from the growth ambition by 2023. I would also like to confirm the definition of EBITA. This is only a technical change. It does not impact the profit level compared to EBIT adjusted. The technical change relates to where PPA amortization is practically accounted for. Furthermore, given the nature of our business and the exceptional 2020, we are highlighting the level of onetime items to be approximately 1% of revenues by 2022 and onwards, and we absolutely believe the one time items to be normalizing after 2020. Furthermore, the importance of increased dividends annually, this has been the tradition for several years, and this is based on the starting point of 1.27 as the original dividend proposal from 2019. And we naturally fully anticipate to systemically improve the dividends annually as has been our historical track record. And finally, on the leverage side, net debt to EBITDA less than 2 by the end of 2022, and this is naturally based on our belief on the strong cash flow generation for the years to come. Naturally, very importantly, to highlight the background to our conviction and belief that these are the type of targets we will be seeking for and to be achieving the important background from a business mix standpoint and main assumptions for by service line for which you'll be getting quite a bit more insight during the latter sessions of today. Digital consulting by 2023, 7% to 9% growth profitability between 15% 17%, main drivers on revenue to be scaling, growing revenues from the data and cloud capabilities across the Nordics and being supported by very important capacity capabilities by our global operations and delivery centers from a capacity standpoint. And we naturally expect to be driving benchmark productivity and automation, which is a must do in the type of a consulting business. Cloud and infrastructure by 23%, between 0% and 2% on a growth side and profitability 11% to 13%, drivers from a top line standpoint, the potential from the multi cloud services, while, as anticipated, the reduction of the legacy footprint, which is an industry wide phenomenon. And furthermore, profitability drivers, accelerating AI ops, automation and overall global delivery. Industry software, 6% to 8% growth profitability, 20% to 22% level drivers being software as a service continue to enhance functionality through enhanced functionality, increased competitiveness, and naturally, we look forward to the potential market expansion. And we continue to harmonize software R and D practices that have already beared fruit in the recent quarters with positive progress. Financial Services Solutions, between 6% 8% growth profitability, 18% to 20%, looking forward to expanding our core banking, payments and cards businesses, and we expect to be realizing the scale from the existing investments in support of, again, competitiveness, market expansion, better scale and elevating from a profitability standpoint. And furthermore, Product Development Services expected to grow in the range of 8% to 10%, profitability 12% to 14%, Here, expansion to adjacent industries and looking forward and continuing the expansion of market reach based on a very strong foothold and the recognition for high quality services in our PDS business and by nature in this business to continue drive for efficiency and smart investments for scale, as an example, around potential repeatable assets. With this business profile in mind, I would like to clarify furthermore our path to the 5% by 2023. Currently, we are, I think we would likely all agree, in an exceptional era due to the pandemic. And naturally, in the case of Tier 2 Efri, we are also in the heaviest period of integration the year 2020. We expect to be back to solid growth second half of twenty twenty one, and we do believe we will be impacted during the first half based on what is currently known, understood around the impact of the pandemic. And we'd like to be open, as we commented in the Q3 report, that the impact of lost customers pre merger in cloud and infra will likely continue to impact us until the summer of 2021. And very importantly, we believe that the accelerated growth potential, growth drivers, the related investments that are being activated, meaning being put in place across the organization, will start to deliver positive development second half of twenty twenty one. 2022 clearly accelerated growth and then as we move towards 'twenty three towards the 5% growth. To me, this, by the way, reminds the type of a growth trajectory we implemented between years 2015 to 2018, where we achieved in a 3 year time frame growth up to approximately 7%, whereby about 2 percentage points were contributed by bolt on M and A. So we feel comfortable on how to read the market signals and driving this type of a growth profile forward. Naturally, and given that we are in the era and the year of the integration, it's probably good to take a minute just to summarize the big picture on how far have we gone I would like to confirm that this very interesting integration process, we are well on schedule. By nature, it's a demanding one. It is a good integration program. I'd like to split my summary into 3 categories. First, around the drive for the common set of operations, common processes and looking after the cost structure of the company, which we have shared in our quarterly reports extensively, we continue to be well on schedule, and we uplifted the synergy ambition to €100,000,000 level at the end of the second quarter. And we stand very firmly behind that we shall be achieving this. 2nd point I would like to mention, so the fintech value proposition, we have been expecting pre merger during the merger that the capabilities in financial services from both ex companies were very strong, and this is becoming even stronger. And I believe we are already starting to gain market share and interesting wins in the marketplace within financial services. The 3 remaining parts of growth from complementary customer base, Nordic digital consulting scale and accelerated cloud adoption, accelerated multi cloud competitiveness, these type of benefits, I believe, will become realizable and visible as we move on into the upcoming quarters. And naturally, now we are shifting as we'll be entering 2021 to the whole growth ambition, growth agenda and then seeking for the services, the solutions, especially software side, which do have expansion potential even internationally. I would also like to confirm the total staging, phasing how we believe we will reach all five elements of our financial ambition and financial targets. This year, year integration characterized as low growth while continuing to expand profits based on very rudimentary and detailed cost based management. 2021, the start of the growth agenda, back to growth while continuing to expand profits, further selections, targeting of investments to high growth areas, and we'll begin the portfolio optimization that will elevate in its importance during 20222023. We believe 2022, 2023 will see strong growth and continued systemic improvement in profitability. In our type of a business, nothing great happens without great people. It is very important, and we are highly encouraged by the developments of the value base of Tieto Evri. We were hopeful at the point of the merger announcement that Nordic heritage can work in our favor. We have had very positive experience from a customer side, employees that the whole Nordic heritage can be a very decisive, very compelling factor in the best workplaces of the future, whereby we begin our thinking and we begin and end our value proposition to employees by thinking about that everything begins and end with utmost respect at the individual level. With this in mind, we build on the Nordic values of openness, trust and diversity. We have also co created a new hackathon internally in defining the culture code of the company released about 1.5 months ago. We encourage the lifelong learning for all of us. The industry is fast moving. We have great learning opportunities on a daily basis. We offer highly purposeful work supporting the development of the societies within which we live, and we should be aiming to make our societies some of the most advanced digital societies in the world. And we offer our employees also highly demanding projects, which tend to be a very high motivational factor for technology professionals. And the considerations for highly inclusive workplace, drive for equality, drive for diversity tends to be very important for the company. With this in mind, I wanted to confirm that our belief at the early stages of the merger is being confirmed by for all of us in the company that the Nordic value base can be a differentiating factor also in terms of winning market share. Sustainability is naturally becoming continuously more and more important in the minds of all of our constituents. Sustainability is in the core of our engagement, is core in our operations. And to highlight a couple of the priorities, we have already, from a diversity standpoint, released our gender balanced target by 2,030 to be at the 50%, 50% level, highly positively ambitious. We pay a lot of attention by nature on the satisfaction of employees through employee engagement. We have we are already close to 75% based on our latest voice surveys. Naturally, this will always continue to be super important given the nature of our business. I also wanted to make a couple of points from a carbon emission standpoint. We have a very clear target of 80% reduction of CO2 emissions in our own operations between 2020 2023 and an objective for net 0 on carbon emissions by 2025 and also very active dialogue with our customers, how we co create solutions in the market that we enable reduction of emissions also in our customers' businesses. To conclude my perspective of today's Capital Markets Day, I would like to summarize the main takeaways and the strong belief we have in Tieto Evri. We have a fantastic opportunity of elevating the digital awareness, the competitiveness of our societies, very specifically, the Nordic Enterprises and Public Sector, and our role in it is very big. We have an opportunity to further unlock the value of our software businesses with higher scale and international expansion. We are starting to realize the value potential of the merger, and I look forward to expanding the potential based on the continuous learnings we have, the combination of synergies, growth and scale. And to confirm the main financial targets, 5 in total, here highlighting 5% growth by 2023 as well as the 15% EBITA adjusted. And we have a very firm belief that we will be providing highly attractive shareholder returns systemically in the years to come. Thank you very much. This would conclude this part, and I believe it is time to go to a Q and A. Yes. Thank you, Kimmo. And now it is time for your questions. So please raise your hand on Teams. We'll start or we prioritize first the audio questions. I will be allocating the turns for you. Waiting for the hands to come up here. Okay. We have a couple of questions here through the chat. This is a question from Daniel Durbari. Your financial target net debt to EBITDA by 2022, will this stay on long term or will you return to 1.5? I guess, too open for mergers and acquisitions and higher dividends and could be considered positive in current low interest rate environment? Thank you for the question. So very practically, at this point in time, this is the level of the target regarding net debt EBITDA we are providing. And naturally, when we get to the below 2% level, we believe there will be ample room for, let's say, further maneuvering and flexibility. We fully aim to be highly mindful on the leverage level, looking also into the background and historical trends from a former theater side. So we'll be balancing naturally the leveraging and the dividend potential. And to be fair, our CFO, Tommy, will also be addressing this in his presentation as well. Thank you, Kimo. We'll continue. Software business makes up 30% of the total theater every. Is this only software related revenues such as SaaS licenses and support? Or is also software triggered services included? Could you please repeat the last sentence? Is this only software related revenues such as SaaS licenses and support? Or is also software triggered services included? Okay. So thank you. That was the software triggered services. I was looking for that word. So this is predominantly software centric. As Christian will be going through Financial Services, we also have a utility business model in Financial Services. But maybe to clarify, let's say, the big picture of the 30%, this is to a huge extent software oriented, predominant the proportion being SaaS revenues and overall on a or kind of a multiyear contract basis and part of maintenance, part of implementation? And to answer, it does not have any large degree of associated professional services. Those would be in our digital consulting business. Thank you, Kimmo. You can also ask your questions directly from Kimmo through the audio. Please raise your hand on teams, and I will be allocating the turns. But in the meantime, we'll take another question here from the chat. It is Michael Brest from USB asking, can you say what your organic growth ambition is? You mentioned 2% or so of acquired growth. So are you really targeting 3% organic growth in 2023? So to clarify, as commented earlier, here we are setting our target at target to reach 5% growth level by 2023. My example on bolt on had to do with years we very much believe in the appetite and importance of organic growth. Thank you, Kimo. There's one more question from Daniel Diorbari. Ballpark, how large part of the software business would you say is updated to cloud native or at least cloud supportive? And how much is traditional legacy on premise? You mentioned 22% for the full group earlier on. So the more SASified is around 30%, 34%. And to be fair, Christian will describe this also a little bit more in detail manner per business, but the answer would be 30% to 35%. And the advancement of SaaS readiness continues systematically, and we have very good readiness and a lot of the investments have been made to continue to accelerate LFI, the SaaS part of the business. Thank you. We have 2 hands up here, Sami Sarkamez. Please unmute your mic and state your question, please. Hi, thanks, Teck. My question. I would actually like to discuss CapEx to sales. I think you said in the presentation that you're expecting 4% to 5% level going forward. Can you please explain why the investments will increase from earlier levels of around 2.5% at Teetho and around 4% at Avery? Is this because of the in sourcing decision at Cloud and Infra? I believe our investment level is staying at a very similar level as we have had at the 4% to 5% level, and that is where we plan to be, and that's from the former theater side we were as well. We do not anticipate any significant increase in CapEx. Tommy will talk about the investments, both from the OpEx and CapEx standpoints a bit later as well. But no significant increase in CapEx and total level to remain at 4% to 5% level. Okay. Can I ask another question, Baumann? On Financial Services, when I look at one of the earlier slides where you had the 2 buckets of growth, one with potential for more than 20% growth and the other one with potential for more than 10% growth, I didn't see Financial Services there. So does it mean that you're not expecting that area of the business to be able to grow at more than 10% rate. So I could go back to the slide if some of you would like to. The item number 4, payment software and card services. So that is one of the very specific ones that was highlighted, and we very much believe that in Financial Services, the growth potential we can well also discover in the quarters years to come that the global market expansion potential can also be, I would say, becoming continuously more and more attractive. We've already discovered good opportunities after only 11 months into the merger. But just to confirm the point, it is highlighted as 1 of the 6. Next in turn, Michael Priest. Please unmute and state your question. Yes. Hi, Kimo. In terms of the margin progression, do you expect it to be pretty linear because I guess the synergies are quite front end loaded regarding the 60% to 70% this year. So the margin development, as you noted, we have not kind of done an external modeling here at the CMD. It will be dependent on how rapidly we actually start to deliver growth and as you well know, the impact of the pandemic and the impact of the pre merger lost customers. So the faster we start to grow, we will actually be kind of getting into what I would like to see is the what I call the systemic trajectory, how it is how it should develop like we've done and as, Mikael, you've seen in the last 5 to 8 year time frame. So that's what we would be looking for, but we are not giving detailed guidance, as you noted. But if I look on Slide 13, I mean 2021 looks a little bit better than flat and then 2022 probably somewhere between 2% 3% growth. Is that suggesting that next year there's not a lot of margin expansion because you're not getting the growth? Or maybe the synergies allow you to get that margin up? So we'll we are trying to stay away from giving now 2021 guidance. Now our financial ambition, this is a reflection financial ambition has been for many years and will very likely continue that we expect to improve on profitability also on an annual basis. Okay. That's fine. Thank you. And our next question comes from Matti Riconen. Please unmute and state your question. Hi, it's Matte Riikonnen, Carnegie. One question related to the one time items. Now we seem to have lost Matti Riikonen. Let's wait a few moments. Maybe we get him back on board. Matti, please continue. We lost the connection, but I can see that you are back. Just go ahead and continue. Matri Konen, go ahead and continue. You are unmuted currently. We welcome your questions. We still have time for a couple of them. So please raise your hand, and I will be allocating the turns. It seems that there's no more question from our online audience. Now let me see one more coming up here. So, Kia, we heard half of Matti, so maybe I answer it. I can likely, with 80% probability, feel the rest of his question. So if I comment Matti's question started around the onetime items. And just to confirm what we have commented before, 2020 is truly an exceptional year of onetime items. These we opened up at actually line item level at the end of Q2 report. Have also commented and we stand behind that 2021 will be significantly lower, approximately half the level of year 2020. And once the integration process is completed, we expect to be getting then to the very normalized onetime item level that we have shared today at the target level. Thank you, Kimo. We have one more request here for Jacob Turveinen. Go ahead, unmute and ask your question. Yes. Hello, it's Jakob from SEB. In terms of growth potential on the digital consulting side, how easy it is actually you to attract talents in the, let's say, new growth areas, I. E, data science, DevOps and automations? Or do you already hold enough large talent pool in those areas? Thank you for the question. So in our all the businesses all across the company, I think we need to always be very humble of taking care of talent and seeking for new talent into the company. So this continues every day. It's very important part of our working. And now to answer your question, we are able to recruit very good talent into the company. It is very important we encourage 24,000 colleagues. We train ourselves into new technologies, and we have also seen some quite encouraging signals and dialogues regarding new growth domains, such as the public cloud program, where the type of full capabilities we have in the type of a DevOp cycle can create additional benefits to our customers when we have a more significant history of running high availability environments and managing complexity than, as an example, start ups have. So we will continue to work on this very hard. The signals are currently absolutely fine. Excellent. Thank you. Thank you for your questions. Now there seems to be no more questions from our online audience at this time. So handing back to Oslo and over to you, Kjell Arne. Thank you, Kia, and thank you, Kimo, for a very good presentation. And also thank you for the to the analysts raising questions online. That is very appreciated. I understood that we have had some technical issues in the team setup, but that should be fixed now. Continue to raise your hand if you want to ask a question. And if that doesn't work, raise a question during the chat function on Teams. We really appreciate the questions coming in. Now we continue to the next part of our program. And next to me in the studio here in Oslo, I have Thomas Nowuraz, our Head of Digito Consulting. So Thomas, please go ahead. The stage is yours. Thank you, Kjell Arne. And I'm honored here to present the service line, Digital Consulting. I will present how we see the market, the market opportunity and how we are fitting our services to grasp this, these both traditional services, but also more digital advanced services. And also a bit about the merger and how we are able now to grasp the opportunities with a combination of Tioto and Ebury. I would finish off with saying something on the financial element on how we are driving the growth both on revenue and of course on profit. We are We are seeing that there is a fundamental shift in consulting and application services in the market. There is a shift from a more traditional thinking where we have the thinking of the IT as underpinning processes to a more shift where technology is driving the business outcomes through also new thinking on delivery models and business models. We see that there's a shift from making engineer thinking, combining this to actually have a new thinking of the technology in the way of changing this technology as a driving part of being competitive. There's a shift also from building application and getting data to collect data, utilizing data, building the application landscape, and also utilizing the data in order to become predictive in the decision making, making the, right analysts in order to become even more competitive. As a shift from the managed application element to have this, working well together to involving the application, being cost efficient also on the application landscape to drive the competitiveness. You can say that there's a shift from the big fish is eating the small fish to the fast fish, eating the slow fish. We see that the Nordic is highly advanced in this. There's a very high digital maturity among every citizens in the Nordics. The COVID situation is accelerating this now, this shift, this transformation, more and more businesses are looking for this transformation because they see that the world is changing rapidly in this phase. Digital consulting is in the heart of both serving the traditional, the transformation into the new advanced services. And these are in the heart of digital consulting. If I'm looking more into what we are today, we are now have merged 2 large consultancy units, one from theater, one from ExEvery. We see that we have a long history with our customers. We have been trusted for many, many years. We have more than 3,000 customers in the Nordics. Quite, balanced between the different countries, but also of course, serving all industries And of course, public sector. We see that this base is a fundamental element for our future growth. We also see that the merger now between X Every and X Tieto is creating us even more capabilities, stronger capabilities, making us able to have a full spectrum of all the requirements that is needed to drive both the traditional, the transformational and the digital advanced services. We are the largest consultancy in the Nordics by far. We have also global capabilities designed to serve the Nordic customers. 68% of our consultants are situated in the Nordics. We are big, but we can also be very fast. The reason for this is that we are also local, understanding the local requirements, the local situation to our customers being adaptive to their situation and of course can bring the knowledge of a global organization to their doorstep, creating a good competitive and value creation for them. We have a strong financial situation, foundation, and why I'm saying this is that we have all the possibilities also to be a very vital player for the future. We can do the right investment. We have the right, profile in driving this investment. The momentum of the COVID-nineteen has been impacted during 2020. We have also used the merger now to become much more fitter to grasp the new potential of this digital consulting unit. So we are not only in a combination, we are far better than just 2 companies joining forces. We have now in-depth customer knowledge, domain knowledge on the industry, and of course, a lot of technical expertise. We have now capabilities to create a unique market position. What are our, customers, looking at? They want to have knowledge. They want to have the knowledge and the new thinking that the technology is driving into, to do, to the world. We see that we have now capabilities of a strong advisory practice, not only making plans on slide, slideware, but actually making realistic plans. How are they going to grasp the new, traditional, more, digital advantage, of the businesses and make this, make realistic plans and how they're going to develop this further. It's also about capturing the customer. Our customer are obsessed by how can they capture the customer value. We are helping them in doing that, both with being highly digital, how they can use digital and also how they can create new business models to develop this. Also employees are very obsessed with how can they become more digital. And of course, this is creating a lot of new opportunities for our customers. Application is still at the core. We have a huge, unit working with application, both those with those who want to have a more traditional approach, but of course also into the new world of managed service and trying to do this more with automated services And of course, driving the cost efficiency. As I said, it's all about the data, creating the data, having now, a strong unit where we can have a good, how our customers can capture data and also how they can excel on this for the future is a very strong key that we are having. I talked earlier about being fast. Of course, we also have to work being fast. So being DevOps agile and with automation, we are also speeding up how we are driving our customer engagement, and that is both expected from us, but also expected that we want to push this into the market. I heard a question earlier today about people. Many companies are today saying that, yeah, we are a bank, but we are really a digital business. We are a digital business, but we really are people business. In the core of the services of 6,500 people is about how we are attracting the right talent, how we are keeping the talent, how we developing the talent. It's all about knowledge. And our customers are extremely obsessed about how can we create not that knowledge to them. To attract these talents, we really need to work with meaningful work, working with complex projects and also showing that this is creating value either in public sector or in business outcomes. It's about also creating the career development inside our organization, making this exciting every day and also use how they can be, listening into and learning from the tech leaders of the world and how we can bridge this to the customers. Because it's now during this COVID, the global teams can come much closer with another way of working being to the knowledge quite close to the customer, bringing the global teams to the customers, but also with the local proximity that I just described. So it's about now how we are creating that knowledge and we are doing it. It's about creating this engagement workplace where people are doing the extra effort into becoming the best consultants in the market. Our value foundation of the Nordic values of openness, trust and diversity is of course a very important foundation for our business. This is just about how we can create a learning environment, creating the best people to be there and how we can utilize this in creating growth to our customers. And of course, for theatre every. We are now, and I might now repeat myself also in some of the growth drivers, but if you look at the revenue growth, we have been in ex tier to ex every quite flattish on the revenue growth. We are now looking at a 2023 target of 7% to 9% of revenue growth. And I will come back and comment in I will comment that in a second. And of course, also on the adjusted EBITDA, it's important also to see that we have, development here from around 12% to 15% to 17% of adjusted EBIT. On the growth drivers, it's really important for us now to continue the journey of scaling the digital capabilities, with new and digital advanced services because the market is more and more into this area. We are grasping that one and winning projects in that space. Cloud adoption, data and insight, managed services with automation. It's also about transforming some of the managed service and how we're doing it, helping our customer in the transformation into new ways of thinking in the application managed service. And of course, with a customer base of more than 3,000 customers, We have a unique position to use our more capabilities to even expand the total share of wallet to many customers, especially in Sweden and in Norway. On profitability, of course, automation and managed service is of course something that is also on the growth drivers, but it also helps our profit level. It's making us even, and of course this, now we're talking about this in how we're doing the application managed services. It's also about attracting, the right talent and it's a war and battle every day of winning the right projects. So then we really need to have learning programs. We really need to have re skilling because we are also educating the market and what is coming the next drivers. So that is extremely important. And of course we are adaptable to different price models, both how that is done locally, but also then we can use the price models in order to how we can be more profitable. It's about the global capability development also how we are strong in our near and offshore capabilities, competence centers there and how we are pushing that into the Norwegian the Nordic market to create the good momentum and the knowledge in the doorstep to our customers. As a consultancy, we always really need to look at productivity such as utilization, hourly rates, the development of the FTEs and that is a given being a consultancy. We see also that on the short term, we have some very concrete business drivers. The COVID will still be carrying on over Christmas. And of course, we really need to then work on how we are mitigating the COVID impact and turning into a growth during 2021. It's of course high emphasis on how we are being productive, how we are using our workforce in the best possible matter. When it comes to our business mix. Now the our business mix is also in a constant change. If we look back 1 year, we probably wouldn't discuss, see the same business mix as we're seeing today. In 2022, probably the business mix will also be a bit different. We really need to be at the edge on what is the requirements of the customers, but we see that the current business mix will expand with the digital advanced services will expand heavily into the future. We also see that there's a slowdown on more traditional services, more and more going more to cloud, more to managed services and driving a completely different cost efficiency gain on businesses. And of course there is always a transformation part that will be a part of this. We are driving our investment more heavily into the digital advanced services and also building the digital capabilities, fast. Of course we have to be fast. We have to be quick, reactive, and driving the digital agenda for our customers and not only be, reactive in that. And of course, it's about also driving our own way of working with our many services. Also changing the current outsourced engagement to more DevOps. And of course then have a high focus on automation and the levels and the maturity of automation for the future to drive their full stack managed service. I'm very proud when I look at our customer base. We have extremely many fantastic customers. These customers are leading customers within their industries And also, a heavily proportion of this is leading in the public sector, being driving the strong citizen agenda on digitalization. If I just mention a few from this list here, for instance, Rolls Royce, how we are helping Rolls Royce to utilizing data to do more predictive maintenance on the machine, the marine engines that they are driving. Helping Rolls Royce to be even more on the quality and creating value for their customers. Also want to mention IMO Park, a leading car parking company in the Nordics. We have also been working how they can be utilizing digital to drive the new business models in becoming more advanced in how they can use technology, and also helping the customer experience, in the parking lots. We have many, many good examples. We have a unique platform of driving that growth. To sum up, our winning formula is that we have a market momentum. We have some traditional services. We have the transformation into more digital advanced. The merger is not only a combination of 2 companies is actually accelerating us as digital consultants, being that 1 plus 1 equals 3 or more. And we have a proven record with many, many customers and we can of course accelerate in, in our capabilities at the customer and the services. Critical success factors for the future is of course, how we can drive DevOps automation, DevOps adoption and automation in a more managed service, how we can speed up the cloud and data capability, both on services that we have solutions that we have provided, but also attracting the right talents. This will create, and accelerate our growth and profitability. I'm very proud of the unit today. I'm looking forward to how this can be in the future and looking at a very brighter future together with the team in digital consulting. Thank you for your attention. And now, I'm ready for some questions. Thank you, Thomas. And now the floor is open for your questions again. And I see Sami Sarkami is raising her hand. Go ahead, Sami. Thanks, Sami. My first question would be just on the general promises. I think you're accountable for probably the biggest improvement thinking of 2023 targets, be it growth or margins. Looking at past performance, your development may have been held back by both market demand and your ability to recruit talented consultants, how will you address these challenges going forward? If I start with recruiting talents, I think that already we have, we have a unique position working and what consultants really want is work with where they can excel the most on the knowledge. I think that we are very attractive for talents because they can utilize their skill. And also they are part of a bigger environment, bigger team where they actually are on continuous learning curve. This is for many, many consultants, the most attractive part to be. Also, I think that we have high ambitions for the future. Yes, we have it. But we really need to also say that, we have the potential of driving this stronger into the market, both with the services at current state, but we are already doing it. So it's not just a wishful thinking that we are now from the traditional and now moving into the more advanced services. We see that we have to do more into the advanced services. Is this answering your question or do you want to have a follow-up? Yeah. I can maybe ask another question. I mean, if we look back, it's been difficult for you to grow the consulting business profitably with high utilization ratios. Now you're promising both rapid growth and margin expansion. How can you achieve these 2 goals simultaneously? Yeah, of course, this is a challenging task. It's not an easy task, but we have, I think, a potential now with the new merger to grow on the customer base. So the share of wallet at the customer base, we know the customer, we know the requirements of our customers, we can sell more to each customer that we are serving. And of course, then attracting more people and also, to do more time and material, Ex Every had a lot of time and material business, and we can expand on that and also transform some of the, more traditional time and material business more into also managed service. So I think that we have a fantastic, potential now to drive it. But this, of course, as a consultant, we really need also need to how can we do more or better utilization of our workforce is also of course on the agenda every day. So it's, this is work that we have to do or facing every day on utilization, how we are driving this and how we are winning in the market every day, but we also want to have bigger assignments driving this profitability and revenue for the future. Okay. Thank you very much. Thank you. And the next question goes to Jacob Turveinen. Please state your question. Hi. A bit of a general question from my side. How would you describe your key competitive advantage in the digital consulting side? And in which kind of projects do you think you hold a strongest position in relative terms? Thank you for your question. I think it's a very good question and I have to make this clear because we have extremely, unique position, in the Nordic. We are, our competitiveness is of course that we have these local consultants being very close to customers, understanding what is happening in the market of some of the customers in Malmo, in Stockholm, in Oslo, in Helsinki, Tampere and so forth. It's very important to have the local proximity into it. And there's no local company that can bring the global capability to the doorstep. We will of course fight hard to win local businesses and work with them in the transformation also to do more managed service. And also we are, having a huge and good portfolio for driving managed services, big projects. We can utilize this much, much more in Sweden and Norway. Okay. Very well. Thanks. Thank you. I have a question here from Chad regarding DevOps. Is this megatrend creating a better stickiness to clients on back of the integrated way of working with the upside of things? Being working with this is it's of course I think that it's a fact, it's a new way of working. It's a way that we're working integrated together with the customer. And I think that being, having also, local people in the Nordics, we are very trustworthy in both how we can work DevOps together with the customers. And of course we are internally also, being DevOps agile where you're working, how we are developing more managed services to our customers. Being sticky with this, of course, I think that it's still a profession where the people matters extremely much in how we are working together with customers in this one. Thank you. We take the next question from Michael Priest here. What is attrition like in consulting? And what would you like it to be by 2023? Attrition level now, of course we have, it varies between units and attrition is something that we always are monitoring. And we are very, we have a very good system, so we can, we can, do mitigating actions, rapidly when we see, that we are too high attrition. The norm of us is that we always have attrition because we are educating the market. So it's not like attrition should be 0, because we are now educating the ambassadors of TL2 every in the market. So some attrition, it will always be there, but we see that around, around 15% or less 12% to 15% is a normal attrition level that we will be at and we are currently within. We have time for one more question here before moving on. So George Webb is asking, on utilization rates and that being a clear area of focus, can you talk about where you were on utilization pre pandemic and what levels you need to achieve or sustain to be able to hit 2023 margin targets? Utilization rates is the most volatile rate or component in consulting time and material world. And we are having many, many units in digital consulting. Some of these units are of course with very high utilization rate, some will lower. And for us, it's important that we have this scale of different, utilization rates because we should be able to take shorter assignments to, with that naturally drives the utilization rate lower. And of course in longer assignments that naturally increase the utilization rate. Utilization rate is that on a top agenda of how we're driving the productivity. But I won't comment the utilization level that we are aiming at for the time being. Thank you, Thomas. And now we need to move forward in our program. So back to Oslo and over to you, Kjell Arne. Thank you, Kia, and thank you, Thomas, for a very solid presentation. I'm also happy to see and hear that the technology in the Teams link also seems to be working. Many good questions, and I'm very glad to hear that we are able to have some interactions between the presenters and the audience. So keep that up. Now we continue with our program. And our next presenter is ready on stage in Helsinki. You will now be hearing from our Head of Industry Software and Financial Services Solution, Christian Seggeschven. Christian please go ahead the stage is yours. So good afternoon, everyone, also for my part. I have the pleasure of introducing you to our software centric businesses being Financial Services and Industry Software. I really hope that I'm able to bring live the strength of our software businesses and the impact they have for the society. My presentation will have 4 sections. It will have an introduction, 2 business deep dives into the business units, FSS and IS, and a very short closing. So software is changing the world we live in, and it's in the core of the digitalization of the society. Softwares of today have to be user friendly, real time and automated, actually making choices based on advanced analytics and AI, or at least guiding the users to make the right decisions. It needs naturally to be accessible anywhere and secure and compliant. This is extra important, of course, in the financial services and health and care industries. And as we have seen during this year of pandemic, COVID is actually accelerating the digital agenda across many industries globally. Tiago Every Software Businesses operates across 3 main domains: the fintech, the government tech and the industrial tech. Fintech, the Financial Services being roughly half of the business volumes, Government Tech being 35% and Industrial Tech 15%. The combined revenue of these businesses is close to €1,000,000,000 of which 75% is recurring. I'm privileged to be working with my teams in these highly interesting markets where the pace of digitalization and investments continue being substantially high, both in the Nordics and globally. Let me now give you a couple of real life examples of how our software actually impacts our everyday lives. So when you visit the hospital, the staff will use multiple of our software to treat you, like our hospital information system, our lab and digital diagnostics, clinical systems and imaging tools. When you apply for a building permission in your hometown, the process is managed by our P360 software utilizing state of the art analytics. If you then need a loan to build that house, our lending software is utilizing AI to automate the process and actually gives recommendation to the bank on what terms the loan can be issued at. When you receive an invoice in any of the channels, digital or physical, there is a fair chance that it is produced by our billing and invoicing platform. When you use a credit card, it is most likely produced in 1 of our card production factories and issued via our issuing platform. If fraudulent behavior involving your card is detective, it is our fraud detection software detecting it And by utilizing machine learning, the platform actually now got smarter. When you make an investment and you buy your share in Tieto Abry, the transaction is processed by our trading platform. And while everything is happening, our global customers in oil and gas and forest industries continues to run their operations powered by our software. This was just a sneak peek of what our softwares are doing in the society and how it affects our everyday life. When it comes to developing these softwares, these state of the art modern softwares, we have built global capabilities and functions that work across all our business units. So we have a design lab working with user group communities, creating superior user experience across all our softwares. All our softwares are available on SaaS, and our cloud team has an ambition to have 60% of the software ready for public cloud by 2023. Our data and AI team make sure that our softwares get AI powered automation and utilizes all modern analytics technologies available. We have an innovation factory that creates new innovative technologies such as speech and face recognition that can be utilized all across the portfolio. We are daily working with modernizing our engineering operations that create huge efficiency across our businesses. Our biggest investment areas of today is actually our banking platform, our payment suite, health and care portfolio and data and AI. Here I will take a short pause, and now we will switch into the second part of my presentation, being the financial services. I will start by sharing with you a short video that hopefully will give you a perspective of how impactful our softwares are in the society. The future of banking and financial services is digital and fast moving with software at its core. And that's our business. Every day, millions of people use our banking and financial services. Every hour, our experts work with some of our 400 clients in more than 50 countries. And every second, our software powers fast, stable and secure services that ensure everyday life keeps on moving. When you get a loan, apply for a credit card, buy groceries, withdraw cash, make a bank transfer, shop online or pay with your phone. Meet Tietoevri Financial Services Solutions, a new powerhouse for financial services. We help banks innovate to better serve you today and tomorrow. So now let's deep dive into the world of financial services. I will go a bit deeper into our offerings in a minute, but in general, you can say that we have a full software suite that run any financial institution in the world. We serve both Nordic and Global Tier 1 clients as well as local players in the Nordics. We also work with the central banks around the world to enable them to run instant payment services. This is truly the leading FS powerhouse in the Nordics, and I'm very happy to say that we are also among the leaders globally in the areas of payment, cards and ATM. The characteristics for the financial services market of today is everything needs to be real time. It's all about real time transactions. An ever increasing pressure from regulators and central banks. Unfortunately, increasing fraudulent behavior and as we have seen for quite some time already, an increased cost pressure. The market growth remains very attractive in the domains we operate in, as can be seen here. Let's go back a little bit in time. So pre merger, both Tiato and EVRI had a strong position in the FSS industry. This is, however, a very good match with only limited overlaps. I see significant opportunities to scale and grow both in the Nordic market and internationally. In Q3, we launched the new organization, the Tieto Every Financial Services. We have now 5 distinct software units that is developing our softwares. We have our payment unit that has capabilities going all the way from the payment infrastructure on the national level up to the instant payment mobile applications that we use in our daily life. Our credit softwares are actually enabling loans and the portfolio also goes all the way into the collection system, so a full credit suite. Core banking, I already addressed. We have a full suite of core banking capabilities. In Wealth Management, we are actually the backbone of both the stock markets and fund markets in the Nordics and Financial Crime Prevention is about KYC, anti money laundering and crime prevention. These products are actually independently implementable into any existing architecture, and they can be deployed on premise or as a SaaS. In cards and banking, we can onboard customers also onto our comprehensive standardized platforms, providing them with pre integrated solution stacks. The demand for these type of platforms and services are actually rapidly growing and enables the banks to focus more on the core business and less on the IT challenges. This is a visualization of our full portfolio. As said, all deployable as SaaS, all our products are leaders in their respective domains in the Nordics. A differentiating factor is really our high level of sophisticated localization layers and interfaces for the Nordic markets. Our cards and payment software suites, already global leaders, and I would like to highlight our ambition to further expand geographically in the credit and financial crime prevention. Now allow me to deep dive into our banking platform. Our banking platform is a full scale end to end digital platform. We run both the digital front end services like we consume, the cards, the loans, the payments, the deposits, as well as the back end services like reporting, risk management, security and authentication. On this platform, we are currently running over 50 Nordic banks and growing as fast as we can onboard. We are fully localized for Norway, Sweden and Finland that gives us a huge benefit in competing against the global giants like Temenos and TCS, who struggles to adapt to local functionalities and requirements. We have a proven track record in outperforming the competition, calculated in cost and income ratios for the banks running on our platform, and our customer satisfaction is actually very high. They appreciate our expertise of the Nordic market and that we have over 3,000 experts available to support them. We have a strong pipeline and a backlog and that gives us a very solid growth profile going forward for this business. I hope by now I have been able to increase your understanding of the strength of our portfolio and what lies behind our growth and profitability ambition. We have an ambition to be growing at 6 percent to 8% by 2023 and produce a profit around 20%, even up to 22%. Our growth drivers are, as explained, an aggressive expansion in the Nordic banking platform, new Tier 1 customers in the payments area, expansion of credit market footprint, significant market expansion in cards and high growth in Financial Crime Prevention. The profitability drivers are the normal ones we see in software businesses with scale of global delivery, R and D efficiency and technology harmonization. Also, SaaS adoption is picking up and is improving our profits. I would like to end this part of the presentation with some recent wins. With SCB, we are, as we speak, implementing virtual account management solutions, transaction monitoring to prevent card fraud being implemented for DNB, an extremely interesting new win in the Maldives with Maldives monetary authority, where we are implementing instant payment solution, actually enables nomadic deviants to switch, as they would say in Sweden. With OP, we are piloting biometrical payment cards that could actually be the first deployment in the world. Very recently, this week, on the 1st December, we actually announced our partnership with Nordea, providing Nordea with a state of the art card service that includes card issuing and processing as well as dispute process for Norway and Sweden. This is only the beginning of a very fruitful partnership with the largest Nordic bank, Nordea. Here I would like to end my presentation of Financial Services and switch into Industry Software. In industry software, as said, we provide services primarily within 2 domains, the government tech and the industrial tech. This is the other half of the portfolio, representing over €500,000,000 of revenues. Here we work with customers such as central governments, municipalities, hospital and health care providers, energy industry and the global pulp and paper industry. We can proudly state that we are number 1 in the Nordic healthcare and well recognized globally in oil and gas as well as the forest industry. In addition to the obvious global market trends, I would like to highlight the public sector in the Nordics. We see large national initiatives in health and care, a huge pressure to improve efficiency and automation and a rapid acceptance of cloud deployments. Very promising above market average growth also to be expected in our core domains for industry software. Again, a snapshot of our full portfolio. Energy components and production excellence are well recognized leaders globally in their respective domains already. While we have embedded while we are embedded into the fabric of the Nordic society in health and care as well as the public sector. This is an extremely sticky business for us. Given the success we have in the Nordics, we have an ambition to push for international expansion in health and care as well as with our Public 360 software. I will now try to go a bit into details explaining our softwares in each of these domains. So health and care, here we work with private university and regional hospitals, primary care centers and municipalities. We provide them with hospital information systems, primary care solutions, And we are actually the leader in the Nordics, serving over 1500 public and private caregivers. In the public sectors, the customers are naturally the governments, the regions, the municipalities, and we provide them with digitalization services. Information services. We also work with government, regions and municipalities to provide them with data platforms, data analytics, we are actually number 1 in Norway with our Infortori. No service. In billing and invoicing, industrial messaging, we work with customers like Klarna, DNB and Swiss. We have multichannel billing and invoicing services and business to business integration platforms. We are the leading provider of messaging services in the Nordics. In Pulp, Paper and Fiber, we work with the global giants like Metza, UPM and Alstern Kummer to provide them with wood purchasing, production planning and our state of the art mill execution system. Our mesh solution is running over 300 paper mills worldwide. In energy sector, we work with the real global giants, the Enrons, the Shells to provide them with our state of the art hydrocarbon accounting solution that has over 100 global customers. Looking at the full potential for the industry software business, we will be able to grow at a pace of 6% to 8% by the year of 2023, reaching a profit level of over 20%. And here again, the growth drivers, health and care domain, rapid expansion in the digitalization of public sector, consistent demand that we see from the industrial sector and the profitability drivers being the same as in FSS, typical for the software business, scale of global delivery, R and D efficiency, technology harmonization and a very rapid SaaS adoption. Also with this business, I would like to end with a little bit of bragging. We are with Alstern Munich digitalizing and modernizing over 40 plants globally. Digitalizing case and document management with P360 for Innovation Norway across 30 countries. During 2020, our welfare unit secured 14 new Swedish municipalities, 50 new municipalities in Norway, and onboarded 40 municipalities to the Finnish National Service Kanda. This is digitalization of the society in the Nordics. Last but not least, in India, we were able to close our very first deal in the oil and gas industry with Reliance Industry implementing our hydrocarbon management software. Here my industry software presentation ends and very shortly I would like to give you the takeaways. So we have great industry know how and we are the leader across Fintech, GovTech and Industrial Tech in the Nordics, and in some domains even globally. We have very competitive software products beating the global competition in our core industries. We have a solid financial trajectory and a proven impact in the society. We have a very stable and growing pipeline and solid backlog across all of our businesses to support our growth and expansion ambitions. I thank you for your patience, and now I can open up for questions. Thank you, Christian. Now we welcome your questions to Christian, and you can ask questions through the audio. Just raise your hand at Teams, and I will be allocating the turns. While we are waiting for the hands, there's one question already coming in through the chat. So George Webb is asking, we saw the Smart Utilities product be wound down this year. Can you talk about the health of the rest of the industry software product portfolio? And how can you prevent a rerun of the problems you saw with Smart Utilities? Thank you for the question. Yes, naturally, our TSU product was a huge problem for us, and we have now luckily been able to overcome it. The rest of our portfolio is extremely healthy, and of course, we will make sure that we are not running into those kinds of problems anymore. It is of course with strict governance of what kind of engagement we go into and accept. Thank you. We have a hand up here. So Michael Priest, stage is yours. Thank you. If I look at the margin ambitions, the biggest expansion is expected in your business, both the general industry software and the financial services. What's driving that? Because I'm assuming it's getting the most investments. Is it mix improving? Is it the R and D coming down in the later years? What are you expecting? Thank you for the question. Very relevant one. Actually, it is a mix of many things. It is when we are able to drive scale in our R and D that absolutely drives efficiency, where we are harmonizing the ways we are working, the technology stacks that we have absolutely driving efficiency. So it is a mix of many things. Then of course, when we are able to provide growth and produce growth, that is also helping the scale. But this is all about software development, developing super software in a very efficient way that drives scales. We have been, both in Tiatto and in EVRI having too much siloed operations in our software industries and now we are able to harmonize them. Okay. And can I just ask about SaaS? I'm not I missed some of the presentation, unfortunately. But have you got a target or a proportion of the products today that are SaaS enabled or cloud delivered? Yes. The question was about SaaS, I guess. Could you confirm? Sorry, I said what proportion of your portfolio is SaaS enabled? Or what is your ambition? So first of all, I think you really missed some of the presentation. I was trying to highlight that. But our full portfolio across both software businesses is SaaS enabled. We can deploy as SaaS any of our softwares today if the customers so want. Or from our business mix, if you look at the €1,000,000,000 of revenue, roughly 35% are SaaSified. We have an ambition to be 60% public cloud native in 2023. That was a couple of data points related to SaaSification and even public cloud. I see a hand here from Daniel Gerberry. Please unmute and state your question. Was that the old hand? It might have been an old one. The next question goes to Sami Sarkamies. Please go ahead, Sami. Thanks. Can you elaborate on the split between software product revenue and product related services revenue for both Financial Services Solutions and Industry Software separately? Yes. Thanks for the question, Sami. Yes, I will answer as a combination of both of the businesses. So as I said, around 35% coming from SaaSified revenue, 40% from license and maintenance and around 25% from professional services related to our softwares. Okay, thanks. You're welcome. We have a question here from Daniel Jurbari. Some 70% of all Nordic payments pass a tier to every solution today. But on payment software, there is a what is this J Way among Nordic banks called P27, aiming to build a common instant payment platform also for fintech to use. In your view, will this risk to make your payment solution obsolete? Or is this project company instead an opportunity? There is a fair amount of NDAs actually around that program, but I would say that that's a huge opportunity for a vendor like us. We have basically what it takes to power a P27 service from beginning to end. We have room for some more questions to Christian regarding our software business. Please raise your hand or post your questions through the chat. We have a hand up here. So Michael Priest, welcome. Michael Priest, do you have a question to Christian? Stage is yours. Sorry, I was muted. Just in terms of international, what countries are you considering would be appropriate? I know you have a lot of Baltics presence on the payment side, but I mean, hydrocarbons you sell into Brazil and places like that, how international do you want to be? I need to answer that question. This is very separate between our businesses. So we don't have an ambition to go international with all our full portfolio. We are picking and choosing, and I highlighted a couple of examples in my presentation. So we will take it step by step, and naturally, Europe is the natural first steps. But as said or as you stated yourselves, we are providing services already to 50 countries globally. Okay. And acquisitions in software, would they be part of the road map? Naturally, when we expand our business, that's an opportunity that we have, of course. Thank you. Michael, will continue from online here. Daniel Diorber is asking, again, in FSS International Market expansion, in Credit and Financial Crime Prevention, mergers and acquisitions opportunity or organic greenfield expansion, go to market strategy, Could you please elaborate on those? Yes. So naturally, it can be a mix of both inorganic and organic growth. I was referring more to organic. But of course, every company has an inorganic opportunity to grow as well. So both, I would say. Was there another part of the question or could you repeat? I missed it. Yes. It was about the go to market strategies. Yes. Basically, when we are in the software centric businesses, there is not that much required if you have the portfolio in place, if you have the standardized software solutions and public cloud enabled, that doesn't actually require that much of a go to market strategy, but we are able to deploy from cloud anywhere. So I wouldn't emphasize on the go to market strategy as Saks. If you have attractive softwares and you are public cloud native, anyone can take them, partners or yourself. That is not the trick anymore. The trick is to develop the software. Thank you. And let's continue with Daniel. There's a question regarding AI and machine learning, both in FSS and IS. How is your business model looking? Yes. Our business model in the software centric businesses is to create the functionality and capability and embed it in our softwares, and then we sell it as part of our software. That's definitely the business model. In some engagement, we do co create with our customers. We have use cases that we test and pilot with our customers that then become features in our softwares. But the go to market model and earning logic is to create the functionality in our softwares. Thank you, Christian, and thank you for all the good questions. And I think it is time for us now to go back to Oslo and Kjell Arne. Thank you, Kia, and thank you, Christian, for sharing your insight into our software units in Industry Software and Financial Services Solution. Now, we are a little bit ahead of schedule, so we will go into our break for the day. Now it's time to stretch your legs, get some coffee. You've gotten a lot of information, so let that sink in. And we will join up again in roughly 30 minutes at 3:30 CET, 4:30 ET. So see you soon. Welcome back, everyone. I hope you all have had a chance to relax and stretch your legs a little bit and are ready for the 2nd part of the program. Now before we move into the next part of our program, I would just like to repeat and encourage you all again to keep raising questions. And if you would like to ask a question, you have join the event via the Teams link that is available on the lower part of the event page. You will then be joined you will then join the Teams link and if you want to ask a question click the hand symbol and you will put in the queue and our moderator Kia will then state your name when it's time for you to ask the question. And again be aware that if you are watching the event from the team's line you will not be able to see the slides being shown only the presenter. I would also just like to clarify that after the final presentation of the day from our CFO, Tommy Hirschleinen, there would be a final Q and A session where you are, where you have the chance to raise questions to all the presenters that have presented during the day. And now we move on to the program. Our next presenter is in Stockholm. And I know Johan Tosthenson, our Head of Cloud and Infra is on stage and raring to go. So please Johan, go ahead. The stage is yours. Hi. And first, I want to say a warm welcome to Stockholm. My name is Johan Torstensson, and I'm heading up our Cloud and Infrastructure Unit or as we want to call ourselves, the digital heartbeat of the Nordic society. We are very strong believers is that the companies who can harness the new data coming from the digital business using cloud technology and hyperconnectivity of new devices will be the industry leaders. And I hope that during these 20 minutes that I will share with you how we will help those company to succeed with digital advantage. But first, let me talk a little bit about cloud and infra. We are a unit which have services all the way from the connectivity, meaning the digital touch points, the connected devices via the edge compute into private and public cloud and all the way to what we sometimes call traditional infrastructure like a mainframe and other type of servers. We work with customers in all industries and both in the private and the public sectors, and we're proud to say that we are the market leader in the Nordics for the cloud and infrastructure services. And when we do that, we see also that we are already the leaders when it comes to private cloud, and we are gaining a lot of market share and recognitions when it comes to the public cloud. In the market today, we see that the data growth is exploding. In the between 2018 2025, there will be a growth of data of over 500%. And that is fueled by digital technologies, like for example, all the automation, analytics and AI, where companies are using the data to become an autonomous enterprise. They get a lot of this data not only from the traditional enterprise environment, but actually from the digital business where you have connected devices powered by 5 gs being rolled out all around the world. That means also that companies are becoming a software company. They are software driven business models. And we see that over 500,000,000 new apps and digital services are going to be developed on cloud with the cloud native approach. So the foundation for this transformation in the companies is the multi cloud, and companies are now going multi cloud at scale. But there is some things also stopping these trends or not maybe stopping, but hindering the speed, And that is all about the cybersecurity area, where companies are more and more being aware of the threats coming from state sponsored hackers or also other areas in the world. But it's not only about cybersecurity. It's also about the compliance and demands from the countries, EUs. And we're seeing that 80% of all companies worldwide would have some kind of compliance demands for their industry, which they need to meet. So if the companies are going to then succeed using the data and drive towards digital advantage, they need to have an underlying platform for them which are enabling this. That platform needs to be a stable platform, an always up platform so they get the full value of the business. It needs to be resilient in case of an emergency or something happening. But it also needs to be scalable, not only for Black Friday, but for many other events, like for example COVID-nineteen. You need to be able to scale up and scale down in order to be flexible. This platform can also need also to be connected. It's a big risk when companies are going into different kind of clouds that instead of having the benefit of a multi cloud, they're creating multi silos and the data will not be connected. The data is also the new gold, so it's so important that it's protected and also that it's, like we say, compliant to the industry specific regulations. And finally, the speed is of essence. So this platform needs to be highly automated, both from getting the speed needed but also, of course, to be fit for purpose when it comes to cost. So we in cloud and infra believe that we will enable the customers to focus on the transformation, focus on their customer in that journey by having a partner which can help them with this platform and taking care of it. So we are building these kind of services for our customers which are based on our 3s. It's built in security, they are stable and they are scalable. And we will do that to make sure that we can support the customers' journey to the cloud from the traditional environment, building a multi cloud environment with both private and public to meet the demands. We also are providing the edge technology and supporting the connected devices in order for the customer to make sure that the data is transported all the way in a cost efficient and secure way. We will also have specific services, like for example, private clouds in the country to meet the regulatory demands which our the different industries are having. And finally, it's about connecting the digital business data with the enterprise data. When the company makes that happen, that's when they get the full benefit of the insights of data. And we see that we can help our customers as we have 300 large enterprises already working with their enterprise IT, and we're now getting requests to actually help them with their digital business part of the company. So when we do that, we believe that our growth areas are going to be in 4 specific areas. We are changing our way of working for more traditional outsourcing to be much more advisory led services, connecting, protecting and managing the data for companies. That means we have a full multi cloud service portfolio, all the way from cloud migrations and transformations to cloud management of a multi cloud environment and the specific public, private and hybrid cloud services. We're also providing our customers with connected devices at edge. That means compute power close to where the data is created in order to make things like latest issues but also cost be as good as possible. We will have compliance and security services like in areas that we will manage identities across the portfolio not only for people but also for devices. We also have security operation centers in a traditional way but also managed by AI and automation in order to be much more proactive. And finally, we will deliver services, as we call them, in an enterprise IT as a service. You can also call it the next generation outsourcing, where we manage the stack from the applications and downwards through the whole compute power for our customers so they can focus on transforming their business and helping their customers. But why should they use us in Cloud and Infra for that? Why should they use Tier 2 Every? Well, we believe we have a winning formula, which is a unique combination of Fortex. We are a full scale service integrator, as I talked about before. We can help our customer from end to end so they have one partner and simplify that environment, all the way again from the connected devices via edge into private public cloud and also including the traditional and help them with that. So of course, as other companies can do that, but we also have the Nordic presence, the presence of talent and experts close to our customers, which is very important, as you heard my colleague Thomas talking about in a DevOps environment, where customer wants to be close to their partners and work fiscally close to solve new problems or new possibilities. But when we have these people close to our customers, we also have the possibility to give them a flexibility on how they want us to operate. We can operate for industries like in the telecom, finance and the public sector, operate the data in the country to meet all the legislations there. But we can also do it in EU if that is the way the customer prefer. But finally, we have our global capabilities in India to do it in a very smart, automated and cost efficient way. The 4th component is about a strong partner ecosystem, where we as a tech companies to actually partner up with us and helping them in this market. That means that we can actually get the new technology first and provide it to our customers in order to be very proactive on what the next step is for them. So the combination of this is our winning formula. So when we're now changing, evolving to an integrating integrator of cloud businesses and data driven digital business, we would see a change of our portfolio. We see that the traditional infrastructure are decreasing rapidly, meaning services which are very dedicated, customized and asset heavy for our customers. And in the same time, we're seeing our new part of the portfolio, talking about the multi cloud, the connected devices, cybersecurity and all our advisory led services are growing, and it's going to take a much larger part. Here's where we see growth up to 20% to 30% over the next coming years. And this is in a space where the digital business is driving the demand. It's much more about higher customer values, co creation with the customers and also co creation with partner ecosystems. And that type of business will be more asset light. There will be assets in the hybrid cloud solutions, but it's compared to the others much more asset light. In the middle, you have more you can call it the technology driven demand part. It's where the CIO was buying a lot of services and is still buying a lot of services. That market is a very mature market. It's all about scale. It's all about standardization, and we're seeing that market still going up at about 1% to 3% for us, and we see growth opportunities. In the future, in the next 5 years, our portfolio will look totally different. The digital business part of our customers is going to be the dominant part of this. We are still working and supporting our enterprise IT customers because it is the combination of those 2 which will make these our customers the leaders in their industry. So when we do this, we of course need to drive our profit in the right direction, and we need to stay cost competitive in this market. And we do that from a number of things where 2 things are dominating. 1 is the scale. Going putting Tieto and EVRI together means that we, for example, in what we call sometimes mid range workloads, went from 28,000 in Evri to 35,000 plus in Tieto, now together 70,000. Moving those workloads to more consolidated platforms drives profitability as such. AI automation, the whole part where, of course, we do certain parts of offshoring and going to increase our off near shoring compared to today, but that's not the name of the game anymore. The name of the game is automation and actually having fewer people servicing our customers in operations. That will lead to, of course, cost efficient operations, but even more importantly for our customers, a much higher quality. We will also move to an advisory led service portfolio. Our adviser led part today is about 3%, and we see it's going up to between 5% 10%, which will both mean that we lead our customers into the preferred solutions, but also that's a higher value and higher margins from our side. We will do service consolidations, especially when it comes to our private cloud solutions. We will consolidate that in our data center by about 50%. And finally, by having the right technology partners, we will make sure that we don't have to invent the wheel ourselves. We will co create with our partners, and they will come with the full stack so we can focus on integrating that with our customers instead of developing it ourselves. And also with size gets procurement power. We already seen it this year, but we see in the future bigger volumes, bigger discounts, which help us with our profitability. So we are going through transformation as a cloud and infra. We have done 2020, which is the year of merging capabilities. But for cloud and infra, it was more than just merging Tieto and Evri. It was also about in sourcing the IBM delivery. That has gone according to plan and actually better than planned. So we are we took over all the services and all the people in the beginning of September, and we're now trimming it and integrating it into our portfolio with the same tools and processes to drive more automation, which would lead into 2021 where we start transforming that workload to cloud together with our customers. 2021 will be the year of transformation and growth. Here's where we start transforming even more our environment to cloud with our customers. You will see edge and connected devices services coming together and coming out to the market, co created with some of our customers. And the whole security compliance portfolio will have a major enhancement in order to meet the new demands. We also see an acceleration in the AI ops. We have some customers we've been now going full bloody edge to edge end to end, sorry, automated AI operations. And finally, you will have a major constellation of tooling and data centers coming up here in 2021. This will lead into that we have a portfolio and we're going to see growth acceleration in 2022, 2023. We're talking about multi cloud at scale, we're talking about AIOps automation at scale and the edge and the connected services will take off even more. We will have a spend of investment about 4% to 7% of our revenue, where about 1 part 4% to 6% of that has to do with CapEx, both in our transformation and also into our existing platform new platforms. So this leads to our financial ambitions. Cloud and infrastructure is an area where the public cloud plays a big, big role, But we see that as a great benefit not only for our customers but also for us to go up the value chain. We see that we will have a growth of about 0% to 2% depending on how fast the public cloud growth is going. It is the whole multi cloud transformation. It's the big data and the digital business data which will make us grow and actually compensate for the traditional infrastructure going down. And we see joint go to market with many of our important technology partners in order to deliver new services to new parts of our customers. This will this, together with the profitability drivers, will lead that we will move up to about 11% to 13% EBITDA coming to 2023. We have first one thing we need to walk over, and that is H1 of 2021, where we see due to temporary lower profitability we see a temporary lower profitability due to certain customers we lost before the merge and also COVID impact and the IBM transformation. But we have a high focus on driving efficiency and automation across the portfolio, and we will see both a growth and EBITDA turnaround in the second half of twenty twenty one. So I finally just want to give you some evidence that actually our growth bets are taken off. We're seeing that our capabilities in the multi cloud is being requested. It's being requested by customers like Ilmarinen, where we are helping them on the transformation journey, And we are also seeing that actually from new employees who want to join us to see that we have a lot of really fun public cloud projects happening. We also see customers like Digdir in Norway, which is like responsible for the whole digitization of the Norwegian public sector, asking us to come and support them on their cloud journey when it comes to security and compliance. They want expertise, and they want to have people close to them working with them. Then we have a customer like Keesco who comes to us and say we want to work with you because you have the end to end portfolio, including cloud and infra, but also we did consulting. So they have somebody that can give their enterprise IT to automate that using AIOps. And finally, we have customers like in the retail, like the Stenblad in Sweden, who wants us and who we work with to help them with the digital touch points and the connected devices, to use that data to make give them more insights and actually to compute that data for them on a regular basis. So with that, I hope you've seen how we are helping our customers, taking advantage of digital by being the platform provider for them and how that also will help us in making us a better business with high profitability and how we're transforming from a traditional outsourcer into actually advisory led company supporting with the digital platform. So with that, I'm ready to take on some of the questions from you. Thank you, Johan. So the line is now open for your questions. And please raise your hand on teams, and I will be allocating the turns. And as the first question, let's give that to Sami Sarkamies. Please go ahead, Sami. Thanks. I have actually two questions. Firstly, on the contract losses that have taken place at every side more recently than that drove you to the in sourcing decision from IBM. Why are these customers leaving? And are we talking about a few large contracts or a larger number of smaller contracts? And have you been able to stop the bleeding already? Thank you. Very good question. So we in sourced the IBM services so we could get control of the end to end quality. And the type of questions customers we lost was more medium to smaller customers, some a little bit larger, but it was more in the medium to small. What we're seeing now when we bring this in is that we are getting our quality up. We see that in our services when it comes to cost of poor quality. We see that in the number of we measure something we call customer downtime is going in the right directions. So we're starting to get that recognition back from our customers saying, we see that, that was a good thing, you took it back, and now we will see the strength of Tiete Ebury. We can also see it in actually that we're now seeing when it comes to new deals, both in Finland but also in Sweden, Norway, that we now are getting tractions and are winning deals, especially actually in the public cloud area, but also in the private cloud area. So we have stopped that and we haven't seen any customer leaving us for these reasons in the last 9 months, I would say. Okay. Thanks. And then I would also have a second question. You will at least partially be competing against the global cloud hyperscalers going forward as they will try to sell to larger customers directly. How do you see your ability to compete and remain relevant as a smaller regional player? Yes. And I assume when you say hyperscalers, is we're talking about the AWS, the Azure and the Google. And I could see them as a competitor as they are taking a lot of the infrastructure, but I don't see them as a competitor. I actually see them as a partner. And it's us together with them which gets the benefit for our customers. So our customers are looking for someone to help them integrate because a number of customers wants the best of different public cloud providers together with private cloud. So for us, it is the multi cloud which is the future. And when we go there, we need to hook arms with hyperscalers, which we are doing right now. Ilmarin was an example where we do with Google. You have seen how we are working very closely with Microsoft Azure, and we also have big dialogues with AWS. Okay. Thanks. Thank you. And we have a question here from Daniel Jurbari. A lot of fuss around mobile edge compute, both on private and public networks. Can you tell us more on this possible opportunity and tell us more on your go to market strategy? How can you make sure to utilize and optimize your end to end competence across the company? Thank you. I mean this, I would call it, one of our new big bets. If you talked about a couple of years ago, the cloud was the big bet. Now the cloud the multi cloud is just at scale. So with 5 gs happening, companies are now moving from more proof of concept, well, we have self driving cars, up to more scale when it comes to edge and connected devices. And that has to do a lot to do with the rollout of 5 gs. You see an industry 4.0 happening where companies are now automating their whole manufacturing sites and supply chain. So what is the benefit from our side then? Well, we in Tieto Efri and in cloud and infra, when we talk to our customers, what we can do is scale our private cloud and our hybrid infrastructure services into the edge to take care of that and move that compute close to it. So we can benefit from that type of development already. The second part, a number of these devices, not all, but a number of them are running the same operating systems as some of our digital workspace environments: Linux, Windows and so on, which means that we can use that platform to actually help our customers managing those devices and by that protecting the data. It doesn't mean that we will be a provider of connected devices or that we will do installation of them. What we will do are the services which are you can manage centrally. So we come from our central site, help the customers managing those devices and also handling the compute power. So when we go to market, a number of our customers, which are in the where we are the enterprise IT provider and partner, are now going digital. So it's easy for us to have that dialogue where we have built the trust to move into their digital business and help them. We see that, for example, in the forest industry in Finland. We see that with some retails like Sustinbolaget, where we move into that direction. So that's our go to market as we talk about right now. Then again, we will co develop with a number of customers these solutions for different types Thank you, Johan. There's a question from Michael Priest. What is the pipeline for renewals like? Are there any larger ones still to come? Where are the customers going that you lost, to cloud companies directly or other IT service companies? So let me see. So actually this year in Finland was the year of renewals, I can call it. And I'm so proud of my colleagues in Finland that every renewal they worked on, they actually won. It's a combination of trust and also new good solutions in the cloud space and also good people. So that was the year of renewals in Finland. We always have renewals every year. They are coming, but that was a big part in Finland. We have some renewals coming in Sweden and Norway the next couple of years, too. And we believe that we right now have turned this around and have a very good traction when it comes to renewals. When we lose customers, it can be sometimes because of competition. There is a fierce price competition on the more traditional part, and we believe that we should have a price which is the right both for our customers and ourselves. So that's a couple of deals we have lost because of that, which is kind of natural. You have some churn on that happening. And then we had when it comes to the customers, which we talked about because of IBM, they went to well, some of them went public cloud, but most of them went to another provider. We have time for one more question, and I take it here from online chat. Daniel Durbari is asking, you comment a second wave service consolidation, tools and data centers. Will this trigger substantial nonrecurring costs in 2021? If so, can you help us out some in your modeling in our modeling and give any ballpark numbers on when and how costly this might become? No. I think this has to do with when it comes to consolidation of services, partly it is that we still have some overlapping portfolio. That's no major onetime recurring items. And then we have already talked about the IBM consolidation and that part, and that has been in our onetime events onetime items before, which Tom can talk more about. When it comes to our data center consolidation and more even more important, our consolidation from our call it sometimes 1st generation public cloud private cloud into our new hybrid cloud, that will be a journey together with the customers. So we see that as a part of the normal kind of work. So with that saying, no new major items compared to the ones I was presenting before here. Thank you, Johan, and thank you for your excellent questions. And now it's time to move on in our program and handing back to Oslo and over to you, Kjell Arne. Thank you, Kia. And thank you, Johan, for a very good presentation. And I'm glad to see that there is a lot of interest for Cloud and Infra out there. And just to repeat, you will have the possibility to ask questions to all the presenters at the end of the day when we have our final Q and A session. But now we move forward to the program. We're trying to stick to the schedule. Now we will visit our man in Berlin and we will have a presentation from Hari Salomah, the Head of Product Development Services. So Hari, please go ahead. Good afternoon, ladies and gentlemen. My name is Harri Salomar calling from Perling, which is the headquarters of PDS Product Development Services. We have some important clients here, so good to be very close to them. I'll give you today an introduction to the exciting world of product development services, which is sometimes also called R and D, research and development. Our role as part of the Theaterry family is to build digital technologies and digital products for our clients. These products are used to carry network traffic and data whether wireless or wired as well as devices to consume or use these digital services or even to produce the data when they are part of the Internet of Things. We have a fantastic capabilities to support Workplace product companies and we complement yet every offer in the most compelling way. So we are in a very strong position to help our clients. We do things that are really, really hard to do. I actually wanted to show you a digital board. Hopefully, you can see this. Basically, these kind of devices are being used in the networks we are developing together with our customers. We, for example, develop software called Baseband. It converts the data from the radio signal to data to radio signal and vice versa. Quite interesting, very, very hard to do. We reached nowadays peak of 20 gigabytes in the second, amazing. And we are very good at it doing this. That's why companies are hiring us. 5 gs networks are still evolving including data infrastructure, more scale, robustness and services are being added to these networks. We also are helping other industries to use 5 gs, not only telecom but various enterprises, vehicles at the edge of the network, typically the mobile network. This is the intelligence enabled by data and software innovation. More companies differentiate by using software, more data rates, enabling new product categories such as robotics, autonomous vehicles, augmented reality VR devices, just few to mention. Speed of innovation is in Greece. So who we are? We are a software design house serving top technology companies in the world. We are already a strategic supplier for many of them and we aim to extend this position. Our focus is in telecom, automotive and intelligent electronics. These companies need our help. It is actually very hard for them to find such a talent doing these hard things, especially finding talent in scale, having experience in building such a complex mission critical system for very long time, delivering with high quality and scale. In Europe, I believe we are the best and number 1 in telecom. We are also very well 1 in telecom. We also very well recognized software leader in connectivity and networking in the whole world, so very good position. When looking at the market, actually telecom is a huge industry. Operators are investing massively $1,100,000,000,000 by 2025. Typically that goes half the network here, half the digital services and we are very good at both. Automotive industry is still in this early phase. We call it case, connected, autonomous, shared and electric where the software is the key differentiation. Also intelligent electronics industry, for example, smart homes, smart cities, smart transportation, you name it, it's booming. You could say that today smarties are tomorrow's dump devices. So digital engineering outsourcing continues to grow. More software gurus are needed. That's good for us. So looking at our offering, our services portfolio is well aligned what I just described as a market demand and our growth opportunities. We are very strong in providing end to end software development services. End to end means that we can design the software, we can develop it, we can test it, we can deliver in a very fast paced continuous integration way and continuous deliveries using modern DevOps and Agile methods. This is also supporting our strategic position with the customer. Actually during the past 5 years, we have sort of transformed ourselves from being more focusing on outsourcing and maintaining the old stuff to become a partner in the leading edge technology development. We process all these highly required skills. We understand the industries. We understand the use cases. We understand how to adapt into our customer processes. We have the needed certifications which allow us to differentiate from many other companies. All this translates into an increasing diverse business mix in both industries and customers. This contributes to our sustainability and our financial performance in long run. So thinking about the winning formula, how do we reach our wanted position? When I meet my customer who is by the way typically Vice President of R and D, few things really matter the most. I must know my stuff very well. I have to be very good what I'm doing. I need to be trustworthy, no nonsense. I have to be predictable and I need to deliver what I promise. And also there is a player of confidentiality. Many of our clients are worried about the intellectual property. They are worried about the vendor leaking too early to the market. We are the most trustworthy company. We give the confidentiality and we protect the IP. This is who we are. We use our domain expertise and ability to run large development programs to win new business. We know how to adapt ourselves into customer development, culture and processes. That is very important. When you are leading to R and D like I have done most of my career, I want to use people who adapt into my processes and understand my culture, super important. Our excellent customer satisfaction helps in recurring business but also finding new customers. A lot of people are moving between the companies, they refer to companies, they refer our services to other new clients. This is very important. So we are world class player and leader today in our very focused areas and we aim beating competition in these new growth areas where we are ahead. So looking at our financial ambition and objectives. So we aim by 2023 8% to 10% growth and 12% to 14% 8%. And how can we do this? The industry culture is quite clear. We aim for scale, repeatability and having some assets to help with that. We are working on all these frontiers to make us even more compelling partner to our customers. We continue to focus on the sustainable growth, not any growth. We are not going to sacrifice the profit that we have. Growth driven by our new accounts. Naturally, we will take care of our existing accounts and renewing our business with them, but majority of the growth has to come from the new customer mix. We drive our profitability improvements through more diverse clients and services mix, but also improved operations and we want to increase offshoring and nearshore. Traditionally, our business has been time and material based and some fixed price projects. However, we are now looking for increase in the share of outcome based business models where we can shine and prove our capability to deliver some upside into the business. We are already piloting this with some of our customers. So then I wanted to show a couple of examples of our work with our customers. The first showcase example is about software that enables this amazing drone light show in the sky. You may have seen it on the TV, 1,000 drones in the air, such a beautiful scene. We help our client by developing software tool to handle and automate all these drones. Fantastic. It's super cool and we are having a quite broad and deep collaboration with this client already for many years. Another example is a good year where we have developed this predictive maintenance solutions for operators managing a large fleet of vehicles. And the idea is really about the safety, efficiency and predictability, what comes through the system, monitoring the conditions of the tire, doing machine learning and predicting issues in advance. It's all about the safety, efficiency for them and money. So we have very large responsibility, big team developing this. We already delivered this successfully and continuously developing new features, very, very important showcase. Both of these clients are large international companies having 100 of 1,000,000 investments in R and D and there we can shine. So I wanted to summarize my presentation, short presentation. Here are the key takeaways from my presentation. Market is fantastic. It's growing. Engineering services are needed more and more. And we are very good at what we do in our selected areas, telecom, automotive and intelligent electronics. We are also shifting gears in 5 gs. 5 gs has already been there for a while, but there are new things coming more and more. More cloud infrastructure is needed for more modern IT type of services and we are very good at. We have very ambitious targets to be number 1 in our focus markets. And our Finning formula, as already mentioned, is based on our amazing track record, customer satisfaction, deep domain expertise and deep cultural integration with the customer environment, customer practices. And final but not least is that we also work with our customers in our ecosystems of devices and platforms because their customers would be our customers in the future and we have already succeeded in that. So thank you all. Now we can go to Q and A. Thank you, Hari. And the line is open for your questions. Please raise your hand on teams, and I will be allocating the terms. And the first question, Sami Sarkam, yes. Please go ahead. Hi, thanks. Your customer base has been heavily concentrated with 2 large telecom equipment vendors representing bulk of revenues in the past. Both these names have been forced to hike their R and D spend. Can you elaborate on how you've been able to benefit from increases in R and D spend at some of your key customers? And do you think this will be a material opportunity going forward? Well, first of all, it's a very good question and we don't, of course, comment on specific clients per se, but the foundation what we've been able to build by supporting some of these larger telecom vendors have been enabled us to build our brand in other industries by being able to deliver and develop very complex mission critical systems in scale and high quality attracts also other industries. Naturally, we have to learn also domain expertise in automotive, in various IoT and smart devices space, but the same foundation has been helping us what we already built on top of this telecom experience. So it's been actually very, very good. So there is a learning curve to learn these new industries, but the foundation has been solid and that's how we've been able to win. A lot of these companies who are hiring us said looking for reliable companies who have excellent track record and not necessarily we are not competing against the most cheap one. We are competing with our own value proposition being reliable and highly skilled in our specific focus areas. Okay, thanks. Thank you. We have a question from online from Daniel Lerberi. Can you please comment on your view on open vRAN? And if you can reach out to the smaller vendors in the market such as NECK, AltioStar, Mavenir, etcetera, with our proven competence or would that hurt existing client relationships? That's a very good question. And often, we have kind of discussed internally what would be our position. We want to be enabler and supporting new technologies. But we have to be, of course, very careful. I know that some of the big telecom vendors are moving from traditional radio access network to the cloud based networks. And they are not necessarily going strong towards the open run yet, but I think that will be coming anyhow. And let's put it that way that we are getting quite many requests, actually more than we can handle in terms of Open RAN and those technologies. For those who don't understand what it means, it means that in this new telecom architecture, it's been splitted so that you can use more easily hardware independent solutions and not tied to the specific hardware vendor in this various network solutions. So we believe that we can benefit from that, but we are also very carefully evaluating each case. We don't want to hurt our major customers. Thank you, Hari. Let's continue. So which industries outside telecom are most attractive to you? Well, this year has been, of course, automotive very tough. People aren't buying cars that many. Now in September, 1st time we saw here in Germany that electric cars were selling more than in the previous year. So there is a light at the end of the tunnel and it looks kind of good going forward and we are very optimistic. So automotive for sure and as already mentioned, there is thing called connected, autonomous, shared and electric. We are working for some companies with the electric charging. A lot of the work is in the in vehicle infotainment systems. We are building Wi Fi receivers for some of our clients. So certainly, I see automotive one of the most prominent ones. But also there are areas in the intelligent electronics where we could play a bigger role and we already see that we have very strong background in Android, embedded Android development. And some of my clients told me that Harry, there aren't that many companies in the world who have this kind of system level understanding, building this complex, customizing these Android devices and getting them into the market with the high quality. So we are talking various companies who are building custom made devices based on an Android platform. Those 2 are in the most kind of interesting at the moment. Thank you, Hari. As there seems to be no more questions from our audience, so thank you for your questions. Thank you, Hari. Sorry, we have one more question. So please go ahead, Jaakko Turveinen. You elaborate a bit more why do you see why Teot Every will be winning the market, the automotive market, which must be rather toughly competed at the moment? You are right. It's definitely competed. And so far, as mentioned, what I was describing in our winning formula, the customers have been won so far. They really trust on us that we do what we promise. And we have very high level expertise around like embedded Android for automotive building very complex systems. So we are, of course, competing against some tough players. But I could strongly believe that our ability to deliver with a high quality and with our domain expertise, that's very compelling package. But of course, there will be competition, but I must believe in that I'm very proud of our team, what they've been able to do. This year was tough because many of the automotive companies, they postponed their investments. They were looking at the ways to save and but now they are back. So, of course, I have to believe it and I am very proud of my team and I am expecting that we will be successful. But we are mindful about the competence. Okay, very well. Thank you. Thank you for your questions. It's time for us to continue. So thank you, Hari, Auf Wieders in Berlin. And moving back to Kjell Arne and Oslo. Thank you, Hardi. Thank you, Kia. That was a very good presentation. And I'm very relieved to see that the technology was made also from Berlin. Now for the next part of the program today, we have a little golden nugget for you all. The Country Manager Roundtable Discussion. Now that will be hosted and facilitated by our Head of International and Operation, Ari Jarvela. But before we start the roundtable discussion, Ari will give you a short introduction into our activities outside of the Nordics. And I hope we have all the participants with us on the virtual stage. Christian Pedersen, the country manager in Norway is right beside me in the studio and ready to go. And hopefully also Cardenstrail in Sweden and Sato Kiskiren in Helsinki are ready. So Ari, please go ahead. So good afternoon. And before entering to the roundtable itself, like Giovanni mentioned, I will have a short overview of the markets and especially the international operations. So we serve our customers in 90 countries worldwide. In the international markets, overall, the revenue is somewhat €300,000,000 by BDS, FSS, Industry Software and International Operations. International Operations is our markets in Austria, Baltic Countries and Russia as well as Infopulse and every India and their business, mainly in the U. S. And in the Central Europe. We have 24,000 professionals globally, worldwide. Some 50% of them are in the Nordics, 1500 in Russian and Baltic countries, 500 in Central Europe, a bit over 5,000 in Eastern Europe, namely in Czech, Poland and Ukraine, 4,200 in India and then we have 500 in China and Far East. And then to our core markets and to the Nordics. So in Norway, we have a revenue of €900,000,000 in Sweden, a bit over €1,000,000,000 and in Finland, €720,000,000 And now with this very, very short brief overview, it's time to warmly welcome our managing partners, Sato, Karim and Christian, and let's have a few questions on your core markets. Excellent. So let's start from markets and market opportunities and especially the demand development. And let's start from Finland and Sato. So how do you see the growth potential and main growth drivers? So we see a continued move towards digital services, and this move has only accelerated during the pandemic. There is a greater adoption of cloud based services, both in private sector as well as in public sector. Companies currently are looking for ways to run their operations and business remotely. So in practice, this means that they are thinking how to interact with their customers, suppliers and subcontractors as well as deliver services and products in a situation where physical travel is limited. Finland by default is a mature outsourcing country. So also we see renewed activity towards what we call next generation outsourcing services, in which companies are aiming at greater business agility as well as reducing their running costs, so great cost efficiency. So in a sense, the growth drivers in Finland are automated service delivery to cater for the next generation outsourcing as well as digital services, data and insight to support better decision making. And our recent contract with Keesko is a good example of how we see demand developing in Finland. Thank you, Sato. What about in Sweden? Karin, over to you. Yes. Thank you, Ari. So for Sweden, the trend is very similar to Finland. The pandemic has clearly brought about some changed behaviors with consumers and citizens, which drives new ways of operating, both in business as well as in IT. And for 2021, going forward, we see that the pandemic will continue and impact the IT services market, at least during the 1st 6 months of the year, while organizations gradually transition over to the new normal. We see, for instance, the public sector in Sweden gradually stabilizing after a very intense 2020, with high levels of activity and increased consumptions of IT services. We also see private businesses getting back to investing in new vertical digitalization and also continuing to respond to new consumer behaviors, global market trends and demands for increased returns. So our focus and our customers' focus across all sectors will be to support stable and sustainable and efficient operations while enabling business agility, innovations and also customer value creation. So we believe that growth in Sweden will come very much from cloud, cloud adoption, automation and data and insight based solutions. Thanks, Karin. And then, Christian, what about Norway? Thank you, Ari. And seeing very much the same development in Norway. Norway as a country, we have a national road map for maintained prosperity and well-being based around the 3 pillars. So green, digital and international, an agenda that fits very nicely in with what we do, meaning that digital is on top of the agenda for both the private and the public sector. Where our clients are seeking to drive efficiencies and also build better customer and citizens experiences. And we've only seen like in Sweden and Finland, we've seen this accelerating through the pandemic. Drivers of growth being very much the same around cloud, cloud adoption, automation and next generation application services and combined with data and insights. I'd also like to provide one concrete example coming out of the pandemic, and we see an increased willingness and interest in investing more into infrastructure in terms of hardening it, building out the capacity, making it more secure and more robust to support a new ways of working. So a few smaller examples from Norway there, Should we then go a bit to the merger itself? So Christian, what kind of benefits you see in Norway already now after 11 months? Yes, I guess it's 12 months coming up on Saturday or tomorrow actually. So the tagline for the merger was stronger together. And I'm adding to that on a little bit of personal flavor, more relevant together. And as a combined company, we are providing or we have a better opportunity to create value for and with our customers, our employees and our partners. I'll take you through a couple of examples that I've seen and experienced in Norway. For example, we now have a complete service portfolio for key customer segments, such as the Financial Services segment and the Public Services segment. And I'll give a small example. And back in the old days, we used to compete with each other over case management system for public sectors, making the case workers more efficient and providing a robust way of doing case management. As a new company, we can still provide world class case management. We can enhance it with robotic process automation to automate some of the steps. And we can also through digital consulting help our customers use the new solutions in the right way to actually realize the benefits. So in such, we have a much broader portfolio of solutions and products now. I'll give another example for our employees. We are now more employees. There's more people to learn from. There's bigger learning communities. There's more career paths for you to choose from and evolve your competency skills and so on. So I also give an example on the partner side. And we have 5 solid legs that we're standing on, the 5 service lines, and that's making us more relevant to partners. So for example, Microsoft, we are now doing consulting on Microsoft Technology. We are consuming Microsoft Technology when we're delivering cloud and infrastructure services. We're building, you know, world class software products, consuming Microsoft technology and so on. And by doing that, we are becoming much more relevant to Microsoft as a partner as well, also for employees that want to come and work with Microsoft Technology. And as an example, we were awarded the Partner of the Year Award from Microsoft this year in Norway. Few examples there, Ari. Christian, then to you, Sato, What is the current situation in Finland? And any benefits already visible here? Yes. I would highlight 3 different topics. So as merged Teot Oebri, we have been able to create the largest pool of digital services consultants. And that enables for us to be relevant in the large enterprises, and this has been a bit of a limitation for us earlier. I see the biggest benefits in financial services. So like Christian described, we have a rich portfolio of products. And this again enables us to position well in the software and services market that in financial services. And the last point that I want to raise up is our increased presence and capacity in nearshore and offshore. And again, this enables us to ramp up competencies at the short notice and with scale and, of course, answers towards the competitiveness of us being a relevant outsourcing partner for our customers. Thanks. Then Karin, over to you. So the merger and the integration is the biggest in Sweden. So how would you describe the progress currently? Yes. So I would say we are progressing well according to plan with our realization of synergies. So we are the result in Sweden of a merger to sizable organizations with a long history in the Swedish market with a strong customer base and a very comprehensive service portfolio, also a Nordic heritage, which makes us very similar. However, as we merged our companies, it was quite clear that we are complementing each other very well and thereby adding more value to existing customers as well as potential new customers. So our integration in our sales and go to market activities were very much led by the fact that we came together as new customer teams and could deliver more value to existing customers. In addition to that, we are, of course, also working our way now through common ways of working, common processes, common tools and also in parallel working our way through the cultural components of our new company, which is, of course, really, really important. So we are now implementing our new company culture underpinned by our common values and also our leadership framework. And on the benefits of the merger from a Sweden point of view, we now have a very strong and a leading position in the Swedish market in the public sector, in particular in health and care and also in the financial services sector. We have the largest consulting practice in our market, and we also have infrastructure and cloud services of scale that we can deliver both locally and with global capabilities. So we have a lot of strong assets, and clearly, our combined capabilities now gives us an ability to partner with organizations to really drive transformation as well as stable operation and continuous development and innovation together with them. We also do this, of course, together with our partners, which is another area where we have now strengthened and reinforced our capabilities. So reinforcing our ecosystem and working together with all the partners in the market is, of course, really, really key. Finally, we have also a very strong now geographical coverage across Sweden with a presence in 27 sites, which means that we are very close to both existing talent and future talent in all areas of expertise required to be able to deliver our services. So we have a coverage basically from Malmo in south to Carlix in north. And that makes me very proud as well because it means that we are an integrated part of the society we serve, and we are very close to the customers where things happen. Let's stay with you, Karin, for a while. So how would you describe your business priorities, ambitions, growth areas at the moment? So what are you after? Yes. That's a good question, Ari. So while 2020 for us in Sweden has been very much about integration and serving our customers well during the pandemic, we foresee that 2021 will be the year of the collaboration for growth and the year of collaboration for increased value for our customers. So that's really what we are striving for, that value creation. And our main priorities will really be to elevate our existing customer relationships as well as to develop new business opportunities to support our growth ambitions. So we will potentially and hopefully achieve significant growth in the areas of cloud services, in automation, in next generation managed services and in data and insight solutions. We also see great interest in the Swedish markets for our IPRs and software solutions in public and mainly in health and care and also financial services. So we believe we have a great opportunity, and we will make sure we collaborate again with our entire ecosystem to capture that opportunity. In order to support and facilitate our ambitions, we will, of course, continue to focus on customer quality, a learning and highly engaging environment for our employees and also agile and highly efficient operations. That's going to be really, really key. And we are going to leverage all the insight and capability that we need and have access to in our entire company. So all of that together will, for sure, be a very exciting journey for us in the Swedish market in 2021 and onwards. Absolutely, I'm sure. So what about Sato, ambition growth areas in Finland? Sure. So I think Karin actually described the growth areas really well, and they are very close to ours as well. Maybe back to 2020 sorry, 2020, our clear focus has also been in ensuring the business continuity of our customers. We run the business critical systems for the enterprises as well as for the society, and this has been a clear focus. Maybe if I elaborate a bit through a couple of customer cases. So the largest hospital district in Finland, Hus, we co created with them a solution that collects data from the different patient systems. We call it 360 patient. What we sort of who's achieved with this is that the doctors and nurses do not have to log into the different systems, but by one click, they see the complete view of the patient. And of course, therefore, it leaves more time for the actual patient care and makes their life easier, so to say. The second case I would love to highlight is case Ilmarinen, the largest pension company in Finland. And our recent migration cloud migration, modernization, transformation to Google Cloud. This fully supports their strategy. And also, there was a question earlier about talent attraction. I spoke to our new joiners. And these type of projects, which have a technology edge as well as a great societal impact are really talent attraction for the new joiners as well as for the talent market. What about you, Christian, and situation in Norway? Yes. I think my 2 brilliant colleagues have stolen most of the points now, but I'll try to recap some of all the things what's important for us Norway. So 2020, us in Sweden and Finland being a year of integration, added the complexity of the pandemic. So we've focused on completing the major parts of the integration together with a full focus on keeping the society up and running through the pandemic. And I'm proud to say that the Norwegian team has succeeded in doing that. And then I'll actually pick up on the last point from Sarto. I mean, being a and this is going to sound difficult, but I'll try it anyway. Being a knowledge company in what is the most knowledge intense industry in the world, All customers are turning towards us and asking for advice on how to make use of all the new technology to improve their business or services. And as such, I think the last point from Sarto is highly important. We need to continue focus on the employee experience and being an attractive employer. There's many components that goes into that, but meaningful and purposeful work and assignments being one key component as Sato alluded to. And then the drivers of growth, I think we've debated to some extent and Kari said this well in the So I'm not going to share more details on that, Ari. Okay. And by the way, when you said it purposeful, one purposeful thing is sustainability and especially environmental sustainability. So, Sato, can you tell us a bit that how do we help our customers to capture their environmental sustainability targets and ambitions? Yes. So we see a growing interest in the market towards sustainability, and many of our customers have environmental sustainability high on their agenda. And as theatre every, our role is twofolded. So we are part of our customers' value chain as well as part of society. So we have a responsibility to run sustainable operations. And Kimo shared our sustainability goals and ambition in his presentation. Secondly, we are an enabler. So we can provide and bring to the market services and solutions that help customers reach their sustainability goals. For example, e invoicing naturally is a long time used example and product that helps our customers or distributed energy solutions. One of the most exciting cases is our cooperation and pilot with the City of Basa that aims to be carbon neutral. So our data platform collects data from several sources and provides a comprehensive picture of the city's emissions as well as models different climate actions. And this naturally helps the city to reach their goals, but also provides a great tool in terms of transparency on which actions are the most cost efficient to do. And at the moment, we see that there are many there's a lot of interest into these sort of digital green initiatives. And for us, this is a requirement and responsibility, but I also see this as a great business opportunity. And we have a great example also from Norway with the city of Trondheim. So Christian, do you want to elaborate a bit more on that one? Thank you for the lead in, Sato. And yes, I mean, Trondheim municipality, like city of Vasa, has very ambitious goals when it comes to reducing greenhouse gas emissions. Actually, they're targeting an 80% reduction by 2,030. And they've got plenty of initiatives behind to reach that goal. What they also have is that they have a really forward leaning and forward thinking CIO. And his belief was that actually if we as citizens or their CIO, he believed that we as citizens, if we were equipped with the right data, when we're making decisions about greenhouse emissions, we will make the right choices. So basically what we did was to invite technology providers and data providers to work together with the municipality to come up with solutions that can help citizens to make the right decisions. So when we make a decision on the way we want to travel to work, we look at convenience, costs, maybe other factors. When we go shop, we maybe look at cost and convenience and so on, and the taste and what have you. He wanted greenhouse emissions and the footprint to be injected into the decision making. So what we ended up producing as a group of vendors and suppliers together with the municipality, was an very data rich application that helps people make the right decision, including factoring in the greenhouse emissions and the footprint, of the decisions you're making in your daily life. So one short example there. Okay. Thanks, Kristi, and thanks, Sato. Excellent cool examples from our customers. Year 2020 has been a year of integration for us in Tier 2, everybody. It has been also a year of COVID-nineteen, all with all the downsides, of course. But I firmly believe that this era will drive strong digitalization. So Karin, over to you. How would you say that how to ensure that we, as a company, we are on a driver's seat when the digitalization is even further forming? Yes. That's a very interesting and, of course, very important and highly relevant question, Ari. So as you said, the pandemic has certainly accelerated the adoption of digital tools, and it has fast tracked the digital agenda for many companies as well as organizations. And that's something we've certainly experienced, being a provider of many critical solutions to customers, but also a provider of services for retail customers, where I think this has been quite obvious that new consumer behaviors will put new requirements on customers and businesses and the whole supply chain. So certainly, a lot of impact. And also the fact that we've gotten used to collaborating, interacting and working basically from anywhere and expecting the digital solutions to be there to support us is, of course, also changing a lot for businesses and operations. Now having said all of that, at Tier 2, I believe we are very well prepared. I think this year has shown that we are there to provide stable, reliable operations to customers, but we're also able to scale, as Johan said before, scale up and down, and that's really important, while, of course, also ensuring very secure operations for customers. Now we're also there to help them transform, which I think is going to be much of the next step of this era, of the pandemic, transforming into new ways of working that are here to stay, transforming into new ways of operating, transforming businesses and IT. And with all the combined capabilities of our companies, I think we are very well prepared to support our customers, to show the way, to lead the way and to help and inspire them. Because I think as we come together in entire ecosystems and address these opportunities and also sometimes challenges, I think we are really strong and powerful. And all the solutions we've talked about here today, cloud and cloud adoption, as well as automation, solutions for data and insights, All of that will, of course, come into play as we help our customers, organizations and private businesses take the next step into the future. Definitely. And I still have one final question, and it is to you, Kristian. So how would you say our position towards the society and to drive superior citizen experience especially? Yeah, good question. And I think like many companies, we have deep and I say like many companies, like our global competitors, we have deep technical skills, we have platforms, we have tools, we have experiences and so on. What I think actually separates us from the rest is the fact that we have deep understanding of local laws, regulations, ways of working. We know the municipalities, I mean, we live in them, we understand how they function, We understand where they want to go. Same with the governmental bodies and also in the healthcare industry in the Nordics. So I mean, I think the fact that we have all the global capabilities we have combined with deep intimate local knowledge of the public services is actually a key differentiator for us to help them create superior digital superior experiences for their citizens and patients and so on, but also to help them drive efficiencies and do more with less. And I think I'm going to end with that from my side, Arne. Okay. So now it's time to start wrapping up this session. Thank you, hugely, Sato. Thank you, Karin. Thank you, Kristian. And back to you, Oslo and Cevarni. Thank you, Adi. And thank you, Sato, Christian and Karin. That was very well done. And I hope the audience also appreciated to hear the country perspective. And again I repeat that you will have the chance to ask questions also to the country managers in the final Q and A session at the end of the day. But now we move to the last presenter of the day then the man we have all been waiting to hear from our CFO Tommy Herrleinen. But before I put over to Helsinki, I would just like to explain what will be happening now in the last section of the day. Tommy will have his presentation and then Kim will say some words for a closing remark and then we will go into the final Q and A session. So with that, I hand it over to you, Tommy. The floor is yours. The audience is, I'm sure is impatient. So please, Tommy, go ahead. Good afternoon, and welcome. I will begin by recapping our financial targets as introduced today. Accelerating growth to 5% by 2023. This will be achieved by our focused investments and our growth choices, as explained by our service line leaders today, focusing on public cloud services, data and insight and the growth in our software businesses. EBITA increased to 50% by 2023. The drivers for profit improvement, primarily the synergy delivery of €100,000,000 and our profitable growth from the improved business mix. Onetime items around 1% of revenues post 2021. We will achieve this target level after we have booked all our integration related onetime costs, so starting from 2022. Our increased profitability and cash flow will allow us to increase dividends annually and reach our deleveraged target of net debt EBITDA below 2 by the end of 2022. Next, I'll talk through the key headwinds and tailwinds on our road to 15% profitability. Our main headwind relates to salary inflation, as twothree of our cost base is employee related costs. The salary inflation has been around 2% to 4% annually. And during 2020, it has been on the lower end of that range. In 2021, it's slightly higher depending on the development of the COVID situation. Other inflammatory cost components relate to software and subcontractor prices price increases. And then we have some price erosion component impacting us as well, mainly visible in our traditional infrastructure business. We mitigate against these cost increases through productivity improvement actions, which we do annually. Those relate to workforce productivity improvements, offshoring, automation and standardization as well as we're able to push through some price increases. Our main headwind tailwind, sorry, relates to the delivery of the synergies of €100,000,000 from the merger and then the profitable growth through the improved business mix supports us reaching our 15% profit target by 2023. I'll continue on the topic of productivity improvement. On offshoring, Tieto has increased its offshoring percentage from 46% to 51% during the past 5 years. We have well functioning offshore centers in India, in Czech and in Latvia. Latvia is our for our internal operations service center. We do not have a specific offshoring target for the company, but we basically move with our customers and how they see the value from the offshoring. On automation and standardization, one source of productivity has been the IT service management tools development. And in the future, the focus will be more on driving AI ops across applications and infrastructure services. Naturally, we focus a lot on workforce productivity. There, we track the basic metrics of utilization and billing, as mentioned already today, as well as cost per FTE metrics. We are relatively good in this area already, but there is room for improvement. As last component, the price increases, this relates to our existing contracts and the price indexation clauses in those. Annually, we are able to increase the prices approximately from 0.5% to 1%. And then on the right hand side of the slide, there is the proof of the success for the past 3 years. Our main profit driver over the coming few years is the delivery of the merger synergies. In Q2 this year, we were able to increase the merger synergy target from €75,000,000 to €100,000,000 Today, we are well on our way to achieving the full €100,000,000 with a €70,000,000 to 80 €1,000,000 of run rate being executed by the end of 2020. The total estimated onetime integration costs amount to €110,000,000 to €120,000,000 which we reduced from €120,000,000 to €140,000,000 in the prior quarter, and we will be booking €80,000,000 to €85,000,000 of this cost already in 2020. So majority of this cost will be booked during 2020. On the onetime cost development, the picture illustrates the trend, which I have also referred to earlier. So 2020, we start with a large amount of onetime items, €160,000,000 to €165,000,000 of which €80,000,000 to €85,000,000 relates to integration costs and €80,000,000 of non integration costs, as we have discussed before, renewal of the IBM partnership costs and end of lifing of 1 of our software products. In 2021, we will be at significantly lower levels with €30,000,000 to €40,000,000 of integration costs and in total €40,000,000 to €55,000,000 of onetime costs. As mentioned, we will reach the around 1% level during 2022 when our integration costs are booked. We aim to significantly improve our free cash flow during the coming 3 years. The main drivers being the profitability improvement and the profitable growth from our improved business mix. With profitability improvement, I refer to reported profitability drivers being the synergy contribution of €100,000,000 and the significant reduction of the one time items. As a foundation to deliver this cash flow profile, we continue with our disciplined working capital management, focusing on ARAP payment terms as well as efficient dunning. We also utilize capital financing tools. For us, it means factoring. And we use factoring for some of our largest customers selectively when they have good credit rating. And we all of our factoring is done on a nonrecourse basis. And our level of factoring at the end of Q3 was €35,000,000 We intend to keep it at those levels going forward as well. In addition to investing into our people and capabilities, we invest into our offering and offering development as well as fixed assets. Our offering development investments support our growth ambition and bring us competitiveness. 2 categories of offering development investments are software and services and solutions. In our software, we currently our key investments are in the banking platform, payment suite and health and care portfolio. In the services and solutions, the primary areas are solution accelerators in the public cloud, data and insight and DevOps as well as multi cloud AIOps and cybersecurity solutions. The total investment level in the offering development category is between 4% to 5% of revenue, of which 1% to 2% is CapEx. On fixed asset, we invest into infrastructure assets and data centers as well as our facilities. The total investment level in here, 1.5 percent to 2% of revenue, and it's all CapEx. In our infrastructure investments, we always try to look at the asset light alternatives as they are available. When they are financially accretive, we utilize them. Quite practically, the longer the technological life cycle of the asset is, we tend to end up buying those assets. The shorter technological life cycle of the asset, we utilize or buy them as a service or lease them or some other rental arrangement. That's how it practically works. Always try to maximize the value of a euro. On capital allocation priorities, we first and foremost invest back into our business to support our growth ambition and the competitiveness of the company. On the free cash flow side, we first paid dividends to our shareholders with the target of increasing dividends annually. Then we deleveraged the company, so below 2 net debt to EBITDA by 2022 with a good balance of potential M and A, smaller M and A, bolt on M and A, but not sacrificing the deleverage target. We don't rule out any distribution of excess capital either. Thieto Evri offers an attractive investment opportunity. In the total shareholder return terms, we offer an attractive dividend level and dividend yield. We offer strong share price appreciation drivers of improved growth profile to 5%, improved profitability to 15%, improved free cash flow and realization of the full value potential from our software businesses. Thank you. So now for final remarks, I'll hand over to Kimo. And then after Kimo's remarks, we will have our final Q and A. Thank you very much, Tommy, for the CFO insights and confirming some of our very important drivers of our future returns. Dear attendees of the Capital Markets Day, I'll do now, prior to the final Q and A, a short summary of what we've covered today. First of all, we sincerely hope you have enjoyed today and have gotten new insights regarding the depth of Tieto Every, depth of our leadership and the leadership team as well as further insights to the businesses. I believe you have noticed that we are taking significant strides towards a data driven world. We have identified clear opportunities related primarily to cloud, data and analytics and overall regarding the world of software. As mentioned, I hope you enjoyed and value the views of the businesses by our leadership team and getting to know more of the management of our company and of our fantastic team. And naturally, the new financial targets are very meaningful and very important to all of us. I hope you will feel afterwards the key takeaways being that we have a significant role in actually enabling and accelerating the digital adoption of the society, very specifically for the Nordic enterprises and the public sector, the opportunities in unlocking further value of our software businesses and not just meeting, but as management aiming to expand the value potential of the merger in terms of synergies, growth and scale and naturally, the importance of our financial targets, specifically reaching revenue 5% and profitability 15% EBITA by 2023 and our strong belief for attractive shareholder returns for the quarters years to come. With that this in mind, I believe it is time for the final Q and A. Thank you. So let's open the floor for the audience questions. Please raise your hand and wait for me to allocate your return. And we have a few hands up here, and let's start with Sami Sarkamis. Welcome, Sami. Okay. Thanks. I have 2 quite simple questions. First one is on the definition for the margin target. So can you confirm that even though you're now calling it adjusted EBITA margin, it is the same as the previous adjusted EBIT, excluding PPA amortizations? That is the case. Okay. And my second question would be on the investment level going forward. In Tommy's presentation on slide number 8, you were trying to address this, but I'm at least a bit confused. So what will be the total investment level relative to sales going forward? So let us have Tommy maybe to confirm as presented in his last section. Yes. So thank you, Sami, for the question. And once and for all, let's try to be really clear. 4% to 5% of revenues is the investment level. Now only, obviously, part of that is being recognized as CapEx, which I mentioned 1% to 2%. That's the number. Okay. And if we were to compare that 4% to 5% against current level, I think you've been at a bit lower level, maybe at 3.5%. We're actually at the right the same levels between 4% to 5%. So there is no fundamental change in here. Okay. Thanks. And the next question comes from Christophe Bjornsson. Please unmute and state your question. Good afternoon, guys. Can you hear me? Thank you, Ronald. Yes. So my question is on a bit of the more near term. I mean, it seems like the stock market today has been a bit more near term oriented and focused on your indications on a slower start to the first half. I don't think this is news, but just for now that we have the opportunity to get your sense on how the kind of the pace of the different service lines have been developing into Q4 and then are looking into the first half, it will be very helpful. I know you won't give any guidance, but then if you just compare to Q3, where have you seen already improvements in the momentum and where have you seen potentially a flattish development or deterioration? I know that cloud and infra will be hit still by the loss of the big contract, but then on the other areas, where are you seeing improvements, for instance, in Q4 and into next year? Thank you for the question. And I would like to confirm the three messages that we also shared as part of our Q3 report. So just to confirm for the sake of clarity that the impact of the pandemic, approximately 4% for the company, and we commented similar level anticipated in the 4th quarter. We have furthermore commented very openly the impact was has been the greatest and expected to continue in digital consulting in the minus 7% level. 3rd factor that as a result of the impact of the pre merger lost customers and additional IBM related short term investments that the return to kind of a more normal levels of profitability, what we expect in cloud and infra, will be summer 2021. So just to confirm, this has we have only today confirmed this perspective as shared as part of Q3. Furthermore, what we have today for the sake of openness offered a perspective, we do believe that the pandemic to the level of information that exists in the public eye as of today, that the pandemic will continue to impact very likely in similar manners in the first half, that's one factor. And then what we are bringing as new information today is the full growth agenda of the company being driven primarily through, we believe, well qualified perspectives and views on opportunities on cloud, data and analytics and software businesses. Thank you. That's helpful. And then my next one and last one is on is more on the strategic part. And my apology if it's so long as I already asked this question, but you already divested some businesses and closed down some efforts following the merger with EBRY. But are there still other elements or assets that you are potentially looking to split out on their own or sell off given that there are potentially set businesses that are quite separate from the rest of the group and that might be better as stand alone basis, both from a kind of profitability point of view, but also from a cultural standpoint as well, there are some businesses that are better off as standalone businesses. Thank you for that question as well. I'll be glad to address this one. So in our industry, independent of the merger, portfolio planning is a normal part of company's strategic thinking. And that would be the case also for the years to come for theatre every. So the considerations on future portfolio optimization in terms of optimizing our growth potential, optimizing our scale potential, so that is one element we have highlighted on couple of the occasions during this afternoon. And naturally, we don't have any other parts of that to comment for the time being. All right. Thanks a lot. I'll listen in the back of the queue. Thank you. And our next question comes from Michael Priest. Michael, welcome. Michael, you can unmute and state your question, please. Okay. Then we'll pause and take the next question from online, and this goes to Kimmo. It is from Daniel Joberi and goes like this. I guess there's some signs is a balance between automation and use of offshoring. Do you see a risk that the market value of your extensive offshoring capabilities will be less on back of the increased automation? If so, should we expect offshoring percentage reversal in the coming years? Thank you for that question as well. So our philosophy has been for actually several years that we have not seen a need to predefine an offshoring target level. We adjust our offshoring capacity based on customer requirements, and we've done actually really well on this front. The type of a global operations network we have is highly valued by our customers. It adds to our overall competitiveness and reach for greater capabilities and skills in the world as well. Then the other factor of automation across to be fair, in the future across all operations will be very relevant. So I do not believe these are intended to be working against each other, but rather providing opportunities for optimizing the way we can support efficient deliveries for our customers and maximizing automation also for the benefit of our customers. So these should not be working against each other, given the levels of offshoring where we are today. While we are taking the next question, I would kindly ask you to lower your hands unless you have new drives digital consulting growth and competitiveness? Yes, thank you for that question as well. So that's one important topic and good discussion earlier in the session. The growth and competitiveness for digital consulting has really 3 main factors. One is that as Tieto Evri, we do have That's one factor. 2nd, we do have a large customer base and we have a scale of capabilities with presence both in the Nordics and also our global operations network. Now we have a question from Michael Priest here. His mic is not working, so I will read it out loud for you. Can you talk about the 2021 profits? In Slide 7 of Tommy's presentation, it shows synergies increasing from €25,000,000 to €30,000,000 to €75,000,000 to €80,000,000 Why shouldn't we assume that 2021 EBIT doesn't increase by that amount? So Tommy, would you like to comment that potentially? Yes. So Slide 8, that's the cash flow slide. So that is the cash impact of the synergy contribution, just to be clear of those numbers. So of course, as we have stated, we will be delivering the €100,000,000 fully through P and L, and that is visible at the 2023 ambition as well. So to answer that question, yes, it will be visible. There's a continuation from Michael. What will your adjusted tax rate be in 2023? Since I can, yes, take the question. So our effective tax rate currently is around 22%. I can't foresee how it would be different, at least with the current if the current tax rules in the countries that we operate stay at the same levels. So one should assume the same level of effective tax rate at that point in time as well. We'll continue still with Michael. So when you talk of adjusted EBITA margins, are you also excluding amortization expense related to R and D amortization, not just acquired intangibles? So no, we are not only the PPA related amortization. Thank you. And we have a next question. This goes to Kimo. How do you attract and retain talent? Very good question and something that is very near and dear to our hearts by nature. First of all, we do recruit over 2,500 new colleagues on an annual basis. So we tend to have a good experience also for attracting and recruiting, onboarding and making new colleagues feel at home. I was just hosting the new joiner session actually yesterday morning for about 1.5 hours, which is always a pleasure. 2nd factor that I think as was addressed by my colleagues also throughout the afternoon, that the cultural element is advantageous, even a differentiating factor. We have a highly engaging culture, and we do provide highly meaningful work in all the geographies where we operate and working very closely with very significant customers and industries. We see a hand up here from Jacob Tureveinen. Jacob, please unmute and state your question. Sorry, my questions were already asked. Prior previously. Okay. Apologies. We still have room for a few questions. No more questions from our audience. So, Guillermo, any final words from you before we move back to Oslo? Yes. Thank you very much for the questions and reflections throughout the day. As commented a bit earlier, we sincerely hope that this has been a very valuable day for everybody. It's been a good day for us. We think it's been a wonderful opportunity to share the breadth and depth of Theatre every and having more of the management of the company visible to you all. Sincere thank you, and we look forward to a great continued collaboration and high level of interaction. And the world is full of great opportunities, and our sector should be one of the better ones, and so will the theater every case be. Thank you very much. Day for Tieto Eri. I hope you have all enjoyed it. And on behalf of the IR team, I would just like to say thank you to all the presenters, the audience and all of you who have pitched in with questions during the day. Don't hesitate, of course, to reach out to any of us in the IR team if you have any follow-up or We will also publish a recording of the event and that would be available on our IR pages during tomorrow. So that was it. I hope you enjoyed it and I wish you all a great evening. Thank you.

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