TietoEnator's Q4 net sales grew 8%, profit improved

Highlights for the fourth quarter

- Net sales growth 8% to EUR 464.1 million
- Comparable operating profit improved to EUR 52.8 (51.7) million
- Profit before taxes EUR 53.6 (44.5) million
- EPS clearly higher at EUR 0.64 (0.30)
- Proposed dividend EUR 0.85 per share

TietoEnator's President and CEO Pentti Heikkinen comments on performance in 2005:

"For TietoEnator 2005 was a year of changes and investing for the future. We were busy with the consolidation process in the Processing & Network, expanding global sourcing, building new service offerings and many other initiatives that cost us time and money in the past year. As a result TietoEnator is a much more competitive company today. 2005 ended with a good level of profitability and gives us a great start for 2006. This year we will turn our attention to improving organic growth and profits, and introducing our networked economy service offering in Europe."

TietoEnator's net sales grew 10% in 2005 to EUR 1 681.6 (1 525.1) million. Most of the growth came from acquisitions and organic growth totalled 1.4%. Operating profit improved 13% to EUR 183.3 (162.7) million due to higher capital gains and no goodwill impairments in 2005. On a comparable basis the operating profit almost reached last year's level. Operating margin excluding capital gains and impairment losses totalled 9.8% (11.0). Profit before taxes increased to EUR 173.6 (158.1) million. On a comparable basis profit before taxes was 5% lower due mostly to higher interest expenses in 2005. Reported net profit and EPS in 2005 were clearly lower than the year before as 2004 included substantial deferred tax income. On a comparable basis TietoEnator reached earnings per share of EUR 1.66 (1.42) in 2005.

TietoEnator's good profitability and consequent strong cash flow enable the company to pay dividends at a level that is not common in its industry. For 2005 TietoEnator's Board of Directors proposes a dividend of EUR 0.85 per share, which represents a payout ratio of 49 %.

For 2006 TietoEnator expects organic growth to improve from the level of 2005. This is based on an improving market environment and TietoEnator's own investments in sales processes, service offering development and strengthening of the marketing messages. Besides investing for the future TietoEnator continues to work with initiatives to improve its profitability. For the full year 2006 TietoEnator expects operating margin to range between 9% and 11%.

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