TietoEnator Achieved Double Digit Growth

Summary of results: - Operating profit (EBITA) improved by 31% to EUR 38.4 (29.2) million in Q2 and by 29% to EUR 80.4 (62.5) million in the first half of 2004. Profit after tax for the first half year EUR 156.1 (25.3) million. Operating margin (EBITA) increased to 10.0% (8.5) in Q2 and to 10.5% (9.0) in the first half of 2004. - Earnings per share excluding goodwill amortisation and one-time deferred tax income were EUR 0.36 (0.25) for Q2 and EUR 0.72 (0.54) for the first half. - Earnings per share including goodwill amortisation and one-time deferred tax income were EUR 1.65 (0.13) for Q2 and EUR 1.88 (0.30) for the first half. General market overview The digitalisation needs are creating constant demand for IT services, while in the short term customers investment constraints prevailed. Towards the end of the period there were increasing signs that the resulting pent-up demand had begun to ease slowly. The strict cost control mode is over, even though customers are still hesitant to start big projects. Competition has remained intense and is maintaining price pressure. The offshore alternative is preventing price increases but also supporting profit margins in many areas. The labour market continues to be favourable but there are early signs that labour mobility is starting to increase. Wage inflation is moderate and the availability of skilled professionals is still good. TietoEnators development For TietoEnator the improved customer market sentiments were reflected in different ways depending on the industry and even specific customers. Some areas are now seeing positive organic growth while in other areas the signs of the recovery, such as a higher number of requests for proposal and increased sales activity, are still tentative. Overall, sales cycles are still long. The general market situation in the banking and insurance sectors is unchanged. Customers are pursuing their cost-saving programmes, which affected TietoEnators organic growth during the first half of the year. The Finnish pension insurance sector is providing a number of opportunities due to regulatory changes. TietoEnator is engaged in partnership negotiations with Ilmarinen. Additionally, the Group acquired several Finnish pension insurance providers shared IT company, Octel and made a simultaneous service contract with its previous owners. In Estonia TietoEnator established a support services joint venture with Hansapank, the largest financial group in the Baltic countries. Market activity in banking solutions is promising. TietoEnator extended its relationship with The Royal Bank of Scotland in the payments area and concluded a new payment system deal with the Norwegian DNB Nor. Due to DNB Nors focus on merger integration, the core banking implementation project started in early 2003 was put on hold. To improve local solution delivery capabilities in Germany TietoEnator acquired the German Inveos at the beginning of the year. The telecom market is recovering. R&D operations continued to grow and perform strongly and operators tend to view investments more positively. The acquisition of Ki Consulting was concluded at the beginning of the year and the company has been fully integrated. Financially the acquired unit is generating planned net sales, and profitability is in line with the Group average. The public sector is also slowly recovering, but customers budget deficits and competition are maintaining price pressure. Customer collaboration and cooperation in purchase processes in both the government and healthcare sectors has led to larger tender processes. TietoEnator continued smaller acquisitions in the healthcare area by acquiring the imaging business from Jons-Medical in Finland, taking a minority holding in the Norwegian Helsekomponenter and acquiring Norwegian Respons AS. TietoEnators Fo