549300EW2KM4KROKQV31-2022-12-31-en


Report by the Board of Directors1)		Consolidated Financial Statements (IFRS)		FINANCIAL RISK MANAGEMENT AND CAPITAL STRUCTURE		8. Intangible assets	108
About Tietoevry	2	Income statement	43	18. Management of financial risks and capital structure	79	9. Tangible assets	108
Highlights of 2022	2	Statement of other comprehensive income	43	19. Interest-bearing loans and borrowings	84	10. Investments	109
Five-year key figures	3	Statement of financial position	44	20. Leases	86	11. Long-term receivables	109
IT market development	4	Statement of cash flows	45	21.Financial income and expenses	89	12. Current receivables	109
Strategy	5	Statement of changes in shareholders' equity	46	22. Financial assets and liabilities - carrying amount and fair value and fair value hierarchy	90	13. Prepaid expenses and accrued income	110
Performance in 2023	7	Notes to the consolidated financial statements (IFRS)		23. Derivatives	92	14. Changes in shareholders' equity	110
Financial performance	7	Notes to the consolidated financial statements (IFRS)		24. Cash and cash equivalents	93	15. Provisions	111
Cash flow and financing	9	1. Corporate information	48	25. Share capital and reserves	93	16. Non-Current liabilities	111
Investments and development	12	BASIS OF PREPARATION		OTHER INFORMATION		17. Current liabilities	111
Order backlog	12	2. Principal accounting policies	48	26. Changes in Group structure	95	18. Accrued liabilities and deferred income	112
Major agreements	13	3. Adoption of new and amended IFRS standards and interpretations	49	27. Subsidiaries	97	19. Deferred tax assets and liabilities	112
Changes in Group structure	16	4. Use of judgements and estimates	49	28. Interests in joint ventures	99	20. Contingent liabilities	112
Branches	16	PERFORMANCE FOR THE YEAR		29. Related party transactions	101	21. Derivatives	113
Personnel	17	5. Segment information	50	30. Commitments and contingencies	101	22. Management of financial risks	113
Non-financial information	18	6. Revenue	53	31. Events after the reporting period	101
Shareholders' meeting	29	7. Other operating income and expenses	54	Parent company's financial statements
Shareholders’ Nomination Board	29	8. Employee expenses	56	Income statement	102	Dividend proposal, signatures for the Board of Directors' report and Financial Statements and Auditor's Report	114
The Board of Directors	30	9. Income taxes	59	Balance sheet	103
The President and CEO and operative management	31	10. Earnings per share	63	Statement of cash flows	104
Auditors	32	INVESTED CAPITAL AND WORKING CAPITAL ITEMS		Notes to the Parent Company's Financial Statements (FAS)	105
Major risks	32	INVESTED CAPITAL AND WORKING CAPITAL ITEMS		Notes to the Parent Company's Financial Statements (FAS)	105
Shares and shareholders	35	11. Intangible assets and impairment testing of goodwill	64	1. Net sales	106
Dividend	39	12. Property, plant and equipment	69	2. Other operating income	106
Events after the period	40	13. Inventories	71	3. Personnel expenses	106
Full-year outlook for 2023	40	14. Trade and other receivables	72	4. Other operating expenses	106
Financial reporting 2023	40	15. Defined benefit plans	74	5. Management remuneration	106
Key figures	41	16. Provisions	77	6. Financial income and expenses	107
		17. Trade and other payables	78	7. Income taxes	107

1) Unaudited

About Tietoevry

TietoEVRY Corporation ("Tietoevry") is a Finnish public limited liability company. Headquartered in Finland,

Tietoevry is a leading Nordic digital services and software company that employs around 24 000 experts

globally. Tietoevry serves thousands of enterprise and public sector customers in more than 90 countries.

The company's shares are listed on the NASDAQ in Helsinki and Stockholm and the Oslo Børs.

The company’s services comprise software, data and digital engineering as well as managed services and

transformation, and related capabilities to support customers’ business renewal, innovation and efficient

operations. Tietoevry’s role varies from consulting and advisory, designing and building solutions to

running IT operations. Competitiveness is based on solutions combining best-of-breed technologies with

consulting and integration capabilities, industrialized service delivery and strong global delivery capability.

To capture the momentum of the cloud-native and software market, Tietoevry’s six specialized end-to-end

businesses have full operational responsibility, including go-to-market, service portfolio as well as

investments and partnerships to drive scale and expansion.

The Group's segments effective as from 1 January 2022 are described in the Strategy section.

Highlights of 2022

•The new structure based on six specialized businesses took effect on 1 January.

•Tietoevry saw accelerated growth driven by Tietoevry Create, Tietoevry Banking and Tietoevry

Care, and profitability remained solid even as inflation increased during the year.

•In July, the company announced a strategic review of Tietoevry Banking with a view to

separating the business as an independent company that would be listed on a stock exchange.

•In November, Tietoevry initiated a process to evaluate strategic opportunities for the combined

Tietoevry Transform and Tietoevry Connect businesses, including a potential sale or listing as a

spin-off.

•The company upgraded its long-term financial targets in November.

•In the full year, revenue was up by 3.7%, organically1) up by 6.4%. Adjusted operating profit2)

(EBITA) was up to EUR 379.2 (367.8) million, representing a margin of 13.0% (13.0). Profitability

was somewhat affected by higher inflation.

•Operating profit (EBIT) amounted to EUR 266.5 (382.0) million. In 2021, operating profit

included capital gains of EUR 104.0 million.

1) Adjusted for currency effects and impact from acquisitions and divestments.

2) Adjustment items include restructuring costs, capital gains/losses, impairment charges and other items affecting comparability.

Five-year key figures


	2022	2021	2020	2019	2018
Revenue, EUR million	2 928.1	2 823.4	2 786.4	1 734.0	1 599.5
Operating profit (EBIT), EUR million	266.5	382.0	146.7	126,8	154.7
Operating margin (EBIT), %	9.1	13.5	5.3	7.3	9.7
Adjusted1) operating profit (EBITA2)), EUR million	379.2	367.8	355.0	199.4	168.0
Adjusted1) operating margin (EBITA2)), %	13.0	13.0	12.7	11.5	10.5
Profit before taxes, EUR million	242.8	353.8	122.4	100.8	152.8
Earnings per share, EUR
Basic	1.59	2.46	0.80	1.02	1.67
Diluted	1.59	2.46	0.80	1.02	1.66
Equity per share, EUR	14.52	15.38	13.73	14.27	6.54
Dividend per share, EUR	1.45	1.40	1.32	0.64	1.45
Capital expenditure, EUR million	92.9	80.8	83.5	51.4	45.0
Acquisitions, EUR million	—	—	0.6	175.7	14.5
Return on equity, 12-month rolling, %	10.7	16.9	5.7	7.3	25.7
Return on capital employed, 12-month rolling, %	9.9	13.7	5.2	6.9	20.9
Gearing, %	39.5	33.5	54.3	63.4	28.5
Interest-bearing net debt, EUR million	679.1	610.6	883.3	1 070.0	137.4
Equity ratio, %	51.5	51.6	45.9	44.5	41.3
Personnel on average	24 401	23 824	23 788	15 950	14 907
Personnel on 31 Dec	24 320	24 389	23 632	24 322	15 190

1) Adjustment items include restructuring costs, capital gains/losses, impairment charges and other items affecting comparability.

2) Profit before interests, taxes and amortization of acquisition-related intangible assets.

See calculation of key figures on page Alternative performance measures.

IT market development

The market is expected to be dynamic in 2023 with continued macroeconomic uncertainty. Technology

will continue to drive resilience and productivity improvement during uncertain times, while customer

priorities are expected to adapt along evolving market conditions.

The shift to cloud native technologies continues to be at the core of customers’ drive for agility,

productivity and competitiveness. Cloud continues to be the foundation for business agility and data at the

core of competitive products and operations. Demand for cloud native and data services is expected to

remain high and to result in over 10% market growth in this area.

At the same time, the focus will be on productivity and customer experience. Customers continue to

emphasize data sovereignty, security and business continuity as they adopt cloud technologies, with multi-

cloud becoming a default. In the current high-inflation market, outsourcing demand with embedded

transformation to cloud is expected to slightly increase, resulting in further acceleration of price erosion

and anticipated decline of around 10% in traditional services. Considering the inflation across the supply

chain, service providers need to balance between inflation in supplier and employee costs and customer

demands for price reductions, limiting their ability to increase prices and margins.

The talent market is expected to remain active, with customers continuing to build their digital capabilities.

Attrition levels were slowly declining towards the end of 2022 and are likely to be slightly lower in 2023.

Strategy to drive value creation through specialized

businesses

Tietoevry aims to drive value creation through specialization. Investments will be focused on businesses

where the company sees competitive advantages and sustainable growth:

•cloud-native services

•data and software engineering

•scalable software businesses, including their global expansion potential.

Six specialized businesses

Tietoevry's specialized businesses have full operational responsibility, including go-to-market, service

portfolio, delivery capabilities, compensation models, investments and partnerships. Reflecting the distinct

market dynamics of each, the individual businesses have optionality to build scale and prioritize

investments. The businesses forming the reportable segments are:

Tietoevry Create accelerates customers' digital agenda to create competitive products and data-driven

businesses utilizing design, data and cloud technologies. This is a global business with software and data

engineering at its core.

Tietoevry Banking is a provider of scalable Banking-as-a-Service platform and leading software products

to drive digital transformation and efficiency for financial institutions.

Tietoevry Care provides modular and interoperable software, reinventing Nordic health and social care

for enhanced care personnel and citizen experience.

Tietoevry Industry is a portfolio of distinct competitive software and data solutions across a wide variety

of industry domains. These domains include the public sector, pulp & paper and utilities.

Tietoevry Transform drives enterprise-wide transformation across customers’ business processes,

applications and infrastructure. Deep customer knowledge, global cloud & data competencies and

automated operations form its foundation.

Tietoevry Connect is a multi-cloud platform provider with a full range of infrastructure choices at scale –

ensuring security, resilience and compliance for the customer’s business.

Scalable common functions, such as Finance, Strategy and HR, continue to support the businesses in

driving portfolio development, performance management and efficiency across the company.

Investment priorities to support scale in distinct businesses

The following investment priorities will drive competitiveness and value creation in each business:

•Invest to expand in Tietoevry Create, Tietoevry Care and Tietoevry Banking – invest to

accelerate products, services and capabilities; prioritize M&A.

•Partner to scale in Tietoevry Transform and Tietoevry Connect – invest in capabilities to drive

scale and automated managed services; seek partners to jointly invest and build scale.

•Focus for value in Tietoevry Industry – optimize investments in selected businesses and develop

portfolio to increase focus.

Long-term financial ambition

Uplifted financial ambition for Tietoevry Group is to reach annual revenue growth of 8–10% and adjusted

operating margin (EBITA) of 15–16% by 2025. The revenue growth and profitability ambition of Tietoevry

Group is aggregated from the businesses' ambitions.

Aggregated growth ambition for software and digital engineering businesses is 12–14% and adjusted

operating margin (EBITA) 17–19%, consisting of the following:


	Annual revenue growth1) by 2025	Adjusted2) operating margin (EBITA) by 2025
Tietoevry Create	14–16%	14–16%
Tietoevry Banking	10–12%	16–18%
Tietoevry Care	12–14%	28–30%
Tietoevry Industry	8–10%	20–22%

Aggregated growth ambition for managed services and transformation businesses is 1–3% and adjusted

operating margin (EBITA) 9–11%, consisting of the following:


	Annual revenue growth1) by 2025	Adjusted2) operating margin (EBITA) by 2025
Tietoevry Transform	2–4%	10–12%
Tietoevry Connect	1–3%	8–10%

1) Mainly organic, adjusted for currency effects

2) Adjustment items include restructuring costs, capital gains/losses, impairment charges and other

items affecting comparability

Tietoevry's financial ambitions also include:

•maintaining net debt/EBITDA between 1–2

•continuing to increase dividends annually.

Strategic reviews proceeding according to plan – aiming to accelerate value

creation

In July 2022, the company announced that it has initiated a strategic review of the Tietoevry Banking

business, including a process to study its potential separation into an independent company that would be

listed on a stock exchange. The aim is to accelerate the growth profile, scale and profitability of Tietoevry

Banking, and enhance its strategic and financial flexibility to drive value creation for all stakeholders. The

strategic review process is proceeding according to plan and is expected to be completed in the second

half of 2023. Should the listing assessment proceed favourably, the company aims to subsequently list

Tietoevry Banking in the second half of 2023.

In November 2022, Tietoevry initiated a strategic review of its Tietoevry Transform and Tietoevry Connect

as a combined business. The company aims to evaluate strategic opportunities, including a potential sale

or listing as a spin-off. The review and the subsequent potential sale or listing is expected to take 12–18

months.

The intended actions will accelerate Tietoevry’s strategy implementation, positioning the company as a

high-growth and -margin software and digital engineering business.

Performance in 2023

Tietoevry estimates that the good business momentum will continue and expects its organic growth to be

5–7% in the full year. Growth will be supported by strong order backlog for the year. Adjusted for the

impact of exchange rates and divestments, the amount to be invoiced in 2023 is up by 6% from 2022.The

company expects price increases to contribute positively while the lead time for higher customer price

increases is several quarters due to the long-term nature of contracts. On the other hand, the business mix

of the company and long-term contracts provide resilience in uncertain times.

Full-year adjusted operating profit margin is expected to be in the range of 13.0–13.5% (2022: 13.0). The

combination of continued healthy growth and the performance improvement programmes is expected to

support full-year performance while continued high inflation is anticipated to constrain profitability

improvement.

Mitigating high inflation

The company estimates salary inflation to be 4–5% on average in 2023. Tietoevry is also impacted by an

increase in cost inflation, visible in items such as subcontracting, premises, electricity and software

licences. The negative impact is mitigated by a number of actions including further offshoring, automation,

management of the competence pyramid and overall cost efficiency across businesses. Furthermore, price

increases are expected to gradually help mitigate high inflation.

Performance improvement programmes continue to contribute to profitability

The performance improvement programmes in Tietoevry Connect and Tietoevry Banking, initiated in 2022,

started to contribute to profitability in the second half of the year. In the case of Tietoevry Connect, around

half of the targeted savings of EUR 50 million from the programme was visible in the cost base for 2022.

Tietoevry Transform's efficiency measures started to accelerate performance towards the end of the third

quarter of 2022. These measures are expected to support profitability in 2023. In 2023, one-time costs are

expected to be around 1% of revenue, excluding costs for strategic reviews.

1) Adjusted for currency effects, acquisitions and divestments.

Financial performance

Full-year revenue increased by 3.7% to EUR 2 928.1 (2 823.4) million. Divestments had a negative impact of

EUR 38 million and exchange rates a negative impact of EUR 36 million. Organically, revenue was up by 6%.

Full-year operating profit (EBIT) amounted to EUR 266.5 (382.0) million, representing a margin of 9.1%

(13.5). In 2021, operating profit included capital gains of EUR 104.0 million.

Operating profit includes EUR -66.0 (61.5) million in adjustment items, Adjusted1) operating profit (EBITA)

stood at EUR 379.2 (367.8) million, or 13.0% (13.0) of revenue. Further details on adjusted items are

available in the Alternative Performance Measures paragraph.

Depreciation and amortization amounted to EUR 162.3 (170.1) million, including EUR 66.4 (71.2) million in

depreciation of right of use assets (IFRS 16 impact) and EUR 46.7 (47.3) million in amortization of

acquisition-related intangible assets. Net financial expenses stood at EUR 23.7 (28.1) million. Net interest

expenses were EUR 19.2 (21.1) million and net losses from foreign exchange transactions EUR 1.4 (losses

4.8) million. Other financial income and expenses amounted to EUR -3.1 (-2.3) million.

Earnings per share (EPS) totalled EUR 1.59 (2.46). Adjusted1) earnings per share amounted to EUR 2.36

(2.20).

1) Adjustment items include restructuring costs, capital gains/losses, impairment charges and other items affecting comparability.

Financial performance by segment


	Revenue	Revenue	Change	Operating profit	Operating profit
EUR million	1–12/2022	1–12/2021	%	1–12/2022	1–12/2021
Tietoevry Create	847.9	756.3	12	90.2	88.6
Tietoevry Banking	521.3	475.8	10	39.8	38.1
Tietoevry Care	231.4	221.9	4	72.2	68.3
Tietoevry Industry	272.6	303.4	-10	51.9	149.8
Tietoevry Transform	470.6	467.9	1	31.6	40.8
Tietoevry Connect	879.9	907.5	-3	21.1	38.5
Eliminations and non- allocated costs	-295.6	-309.5	—	-40.2	-42.1
Group total	2 928.1	2 823.4	4	266.5	382.0

Operating margin by segment


	Operating margin	Operating margin	Adjusted2) operating margin	Adjusted2) operating margin
%	1–12/2022	1–12/2021	1–12/2022	1–12/2021
Tietoevry Create	10.6	11.7	13.7	13.2
Tietoevry Banking	7.6	8.0	13.8	12.7
Tietoevry Care	31.2	30.8	31.3	31.4
Tietoevry Industry	19.0	49.4	16.9	16.7
Tietoevry Transform	6.7	8.7	7.8	9.4
Tietoevry Connect	2.4	4.2	7.1	7.3
Total	9.1	13.5	13.0	13.0

2) Adjustment items include restructuring costs, capital gains/losses, impairment charges and other items affecting comparability.

In Tietoevry Create, revenue was organically up by 14%. The market for cloud native services and

software engineering remained active. Create saw high growth in international business with the new

Nanjing R&D centre contributing to growth. The impact of the war in Ukraine on business was limited.

While inflation had a negative impact on profitability, adjusted operating margin improved from the

previous year's level, supported by price increases during the year.

In Tietoevry Banking, revenue was organically up by 10%. Healthy growth was driven by the Cards,

Financial Crime Prevention and Payments and businesses. Adjusted operating margin was above the

previous year's level, supported by measures to drive competitiveness and efficiency.

In Tietoevry Care, revenue was organically up by 6%. Growth was driven by the Healthcare and Welfare

businesses. Profitability remained at a strong level throughout the year while investments focusing on

software roadmap acceleration and reinforced go-to-market continued.

In Tietoevry Industry, revenue was organically up by 3%, driven by Tietoevry's case management and

education software businesses as well as pulp and paper software. A large customer contract ending in

Data Platform Services had a negative impact on growth. Profitability was healthy, somewhat above the

previous year's level.

In Tietoevry Transform, revenue was organically up by 2%. The Industry & Forest unit saw healthy growth

while revenue was declining in the Telecom & Consumer unit. Profitability was impacted by the

combination of slow growth and high inflation. Profitability was below the previous year's level while

measures to drive improved performance started to contribute to profitability in the second half of the

year.

In Tietoevry Connect, revenue was organically down by 2%. Cloud platforms and security services grew

by 11% and traditional infrastructure services' revenue was down by 8%. Profitability was down while the

performance improvement programme started to contribute to profitability in the second half of the year.

Reportable segments are described in the tables section.

Cash flow

Full-year net cash flow from operations amounted to EUR 276.9 (367.5) million, including an increase of

EUR 82.1 (increase of 26.9) million in net working capital.

Full-year tax payments were EUR 59.8 (40.6) million. Effective tax rate was 22.3% (17.6%).

Financial position at the end of the period

The equity ratio was 51.5% (51.6). Gearing was 39.5% (33.5). Interest-bearing net debt totalled EUR 679.1

(610.6) million, including EUR 750.0 (763.1) million in interest-bearing debt, EUR 210.0 (206.5) million in

lease liabilities, EUR 2.6 (5.6) million in finance lease receivables, EUR 28.6 (29.5) million in other interest-

bearing receivables and EUR 249.7 (323.8) million in cash and cash equivalents.

Interest-bearing long-term liabilities amounted to EUR 795.3 (875.6) million at the end of December. The

company has two bonds outstanding, EUR 100 million maturing in September 2024 and EUR 300 million in

June 2025. Additionally, interest-bearing long-term liabilities primarily consist of a syndicated term loan, a

loan from the European Investment Bank and lease liabilities of EUR 155.9 million.

Interest-bearing short-term liabilities amounted to EUR 164.7 (94.0) million, mainly related to leasing

liabilities and the short-term part of the term loans.

Tietoevry's sustainability-linked revolving credit facility of EUR 250 million was not in use at the end of

December. The revolving credit facility matures in 2027 and has two one-year extension options. It is

linked to selected sustainability targets of Tietoevry and hence supports the company’s commitments to

Science Based Targets.

Investments and

development

Tietoevry is seeking to accelerate growth. A significant part of the company’s investments will be made in

areas such as its own industry-specific software, data & analytics and cloud services. Tietoevry’s

development costs amounted to around EUR 124 (2021: 127 and 2020: 135) million, representing 4.2%

(2021: 4.5% and 2020: 4.8%) of the Group's revenue, including capitalized costs.

Capital expenditure totalled EUR 92.9 (80.8) million, mainly consisting of business-related software

licences, investments in data centres and the capitalized costs for the development of software.

Capitalized costs for industry-specific software amounted to EUR 37.2 (42.6) million. Capital expenditure

represented 3.2% (2.9) of revenue.

Order backlog

Tietoevry's order backlog amounted to EUR 3 327 (3 513) million at the end of December. Of the backlog,

54% (50) is expected to be invoiced during 2023. Adjusted for the impact of exchange rates and

divestments, the amount to be invoiced in 2023 is up by 6% from 2022. The order backlog includes all

signed customer orders that have not been recognized as revenue, including estimates of the value of

consumption-based contracts.

The significance of traditional measures for the order backlog is impacted by the shift from traditional large

outsourcing agreements towards agile methods and consumption-based business models. Additionally,

traditional development programmes are cut into smaller projects.

Major agreements

Tietoevry has signed a number of new agreements during the period with customers across all the

businesses. However, according to the terms and conditions of these agreements, Tietoevry is not able to

disclose most of the contracts.

In February, S Group, one of the largest retail groups in Finland, chose Tietoevry Transform as its partner to

speed up the modernization of its IT functions and to support changes in its operating model. This co-

operation will increase automation and the utilization of data in S Group’s business operations. The five-

year agreement covers co-operation in the management and development of services for next-generation

applications.

In February, International Card Services and Tietoevry Connect prolonged the contract for the

infrastructure carrying Tietoevry Banking cards software for a minimum of five additional years with an

option of two more years. The agreement covers transformation of a private cloud infrastructure to a top of

class hybrid cloud solution and the enablement of cloud transformation (One Cloud Platinum) including

PCI/DSS compliance. The contract value is EUR 24 million.

In February, Kammarkollegiet, a central procurement function for governmental agencies in Sweden, and

Tietoevry Create signed a frame agreement, securing two out of the five tender areas: Security in IT and IT

projects, and IT consultancy solutions. Tietoevry has also been awarded two additional areas while appeal

processes related to these areas are ongoing. These are part of one of the most extensive procurement

initiatives in Sweden, providing access to purchases from all governmental agencies in Sweden.

In February, Huddinge municipality signed an agreement with Tietoevry on a delivery of a digital student

administration system handling administrative processes for preschools, compulsory schools and upper

secondary schools. The solution will be delivered as a cloud service including consulting and system

support. The total value of the ten-year agreement is estimated to be SEK 20 million.

In February, the Swedish Central Bank (Riksbanken) chose Tietoevry as one of three vendors for a two-

year frame agreement on banking and finance consultancy services that will be provided in collaboration

by Tietoevry Banking and Tietoevry Create. The frame agreement, following Tietoevry’s participation in

Riksbankens E-krona Pilot, covers areas such as payments, financial infrastructure, financial standards and

securities settlements.

In February, Tietoevry Create renewed its agreement with Goodyear, a leading automotive tire

manufacturer, and will enhance co-operation in software development for tire management digital

platforms during 2022. By leveraging Goodyear’s patented predictive algorithms, Tietoevry continues to

further develop and enrich the set of features and services the digital platform can provide, from

geolocated real-time predictive tire pressure monitoring (TPMS) for fleets of trucks, to automated tire-

condition control with advanced sensors (tread depth). The digital platform helps prevent tire-related

accidents, reduce fuel consumption for lower CO2 emissions and increase the overall productivity of a fleet

of trucks.

In March, Butterfield Bank chose Tietoevry Banking to provide a state-of-the-art credit card processing

platform as well as card production and personalization services based on sustainable payment cards

produced from recycled ocean plastic. Tietoevry Banking’s credit ledger will enable Butterfield Bank to

reimagine credit cards for the digital era. Deployed as software-as-a-service (SaaS), Tietoevry’s credit

ledger offers end-to-end credit card transaction processing, dispute handling, financial crime prevention,

customer support and mobile and wallet-based payments.

In March, Worldline and Tietoevry Banking extended their strategic partnership for card acquiring

processing services. The three-year agreement with a contract value of EUR 17 million includes all of

Worldline’s authorization processing services in the Nordic market. The agreement includes an option for

two additional years.

In March, Tietoevry Create and Sydved extended their partnership to create a data platform for the forest

industry under the working title “Forest Data Market”. This initiative’s main goal is to help the forest industry

become truly data driven by establishing a data platform containing business information. The platform will

be flexible and adapted to the forest industry’s common business processes, and customers will be able to

combine data sources to gain valuable insights.

In April, Reno de Medici (RDM Group) selected Tietoevry Industry to modernize their core business

processes and enable digitalization at their nine mills. RDM Group is the leading producer in the recycled

carton board business and the largest producer in Italy, France, the Netherlands and the Iberian Peninsula.

The renewal is based on Tietoevry’s Sales and Manufacturing Execution System (MES) – TIPS Industry

Solutions and Services. It will increase overall efficiency, reduce waste and improve customer service.

In April, Vattenfall Nuclear decided to continue its collaboration with Tietoevry Create. Tietoevry is helping

to build an enterprise search solution called Supersök, based on the company’s Findwise i3 software and

Elasticsearch. Supersök is a set of search-driven tools helping maintenance personnel plan and follow up

on maintenance- and facility-related activities at Forsmark nuclear plant. This is the first out of two planned

steps to modernize the architecture and findability tools around Forsmark's maintenance process. The first

part of this project, to be implemented during 2022, is worth SEK 5 million, on top of licences for SEK 2

million for the first three years.

In April, Tietoevry Connect concluded an agreement on cloud services with Kemira. In May, Bodø

Kommune chose Tietoevry Connect as a partner for cloud services.

In May, Tietoevry Create concluded a new agreement with a leading global semiconductor company – as a

continuation to over ten years’ partnership in the area of specialized software engineering. With the new

agreement, representing total contract value of EUR 2.9 million for 2022, Tietoevry was chosen as the go-

to-market partner for new telecom products in the virtual radio access networks (vRAN) market. This takes

the partnership to the next level, with Tietoevry helping the customer to gain market share in both Europe

and Asia. Tietoevry’s deep domain expertise in telecom software engineering will shorten time-to-market

and improve the quality of the customers’ products.

In May, Region Stockholm awarded Tietoevry Transform an outsourcing agreement to accelerate its digital

transformation by transforming its entire IT infrastructure and application environment. As part of the

agreement, Tietoevry will provide leading hybrid-cloud and AI-ops capabilities based on a cost-efficient,

future-proof and cohesive delivery model. The contract is valid for five years, with an option for an

extension of a maximum of seven additional years. The total contract value, including the additional years,

is approximately SEK 1 billion.

In June, Lassila & Tikanoja and Tietoevry Transform decided to strengthen their strategic partnership with

a new agreement with a view to speeding up digitalization at Lassila & Tikanoja and make more efficient

use of data in its business operations. The five-year agreement covers end-user services, application

management, service integration and management, hybrid infrastructure and transformation-related

services.

In August, Tietoevry Create and Bose, a global audio company, signed a new agreement to significantly

expand their collaboration in the development of consumer electronics products and automotive sound

systems. As part of this initiative, the companies decided to establish a joint centre of excellence in

Warsaw, Poland. Tietoevry’s and Bose’s co-operation in software engineering for consumer electronics is

now expanding, and additionally, it will include capabilities for automotive sound system development as

well.

In August, Statens vegvesen (The Norwegian Public Roads Administration) chose Tietoevry in partnership

with Bouvet as the exclusive supplier within the Microsoft Office 365 field. Based on the agreement,

Tietoevry is Statens vegvesen’s collaboration partner for product development of the Microsoft Office 365

portfolio over time, ensuring access to the necessary capacity and expertise. The total scope over the

initial two-year agreement period and four more optional years is estimated to be up to 65 consultants,

including experts from Tietoevry Create, Tietoevry Connect and Bouvet, and representing a maximum

contract value of up to NOK 590 million.

In August, Tietoevry prolonged its agreement with Socialstyrelsen, the National Board of Health and

Welfare of Sweden. The agreement covers maintenance and support for Public 360, Tietoevry’s case

management solution, as well as application management. Public 360, integrated with multiple external e-

Services, continues to be the key operating system for Socialstyrelsen, helping the customer to make the

core processes more efficient, automated, and streamlined. Examples of activities covered by Public 360

include case handling of applications for medical staff certification and handling of government grants

within the healthcare sector. It is also the document register (Public Journal) for Socialstyrelsen. The

estimated value of the agreement, which has an initial period of two years with two optional years, is EUR

1.5 million.

In August, Yleisradio, the Finnish Broadcasting Company, chose Tietoevry Transform to implement a world-

leading cloud-born solution enabling modern and user-friendly employee and manager self-services

across key employment and talent processes. It is planned that the solution will go live in the third quarter

of 2023.

In September, Skatteetaten and Tietoevry signed a new agreement related to infrastructure services.

Tietoevry will deliver mainframe operation services as well as optional application and database operation

services. The contract value of the five-year agreement is NOK 100 million.

In October, Region Skåne, responsible for medical care and public transportation in southern Sweden,

prolonged their frame agreement with Tietoevry Connect for three more years. The frame agreement

covers infrastructure, operations, storage and application management. With the prolongation, Tietoevry

will continue to support Region Skåne’s digitization journey with a clear focus on providing safe and secure

healthcare for the citizens of Region Skåne.

In November, Tietoevry Create signed a frame agreement with the State Office of Construction Control in

Latvia on the development of a national-level Construction Information System. Tietoevry has been a

partner to the Latvian state for more than fifteen years in digital development and innovation

implementation. The new system will allow all administrative processes to be handled digitally and ensures

the circulation of all construction documentation, ranging from plans through to buildings’ entry into

service, amongst construction process participants. The system also provides the opportunity to manage

risks related to construction processes more efficiently. The total estimated contract value is over EUR 9

million.

In December, Aker BP, a Norwegian oil exploration and production company, selected Tietoevry Transform

as a new digital services partner to accelerate its transformation to become fully data-driven. The new

partnership is significant in scope in terms of both the volume and breadth of services. Tietoevry will

deliver a broad set of next-generation digital services, focused on systematic modernization of Aker BP’s

application management and core operations as well as their cloud and infrastructure environment. The

co-operation will drive flexibility and agility in the client’s business operations, and pave the way for

enhancing automation, enabling cloud management and driving data-driven operations. Aker BP also has

an ambitious sustainability roadmap and milestones, including a decarbonization plan to be net zero

across all operations by 2030 and the new partnership also contributes to these agendas.

In December, Wiener Netze chose Tietoevry Create as a vendor for SAP consultancy services as part of an

ongoing six-year frame agreement. Furthermore, WienIT, the IT company of Vienna's public energy

supplier, chose Tietoevry as a vendor for SAP S/4HANA consultancy services in December. The frame

agreement, covering areas such as smart meters, logistics, financial and securities settlements, was

contracted between WienIT and Tietoevry in 2020 and is the basis for the company-wide SAP S/4HANA

transition programme.

In December, Utdanningsdirektoratet (The Norwegian Directorate for Education and Training) chose

Tietoevry Create to develop a new technical solution for collecting data from primary schools and

kindergartens. The development started in December and the new solution is planned to be ready for

production during autumn 2024. The agreement also includes an agreement on assistance for

maintenance and further development of the solution. The value of the agreement is estimated to be

approximately EUR 4 million.

In December, Ystad municipality chose Tietoevry Industry as the vendor for a student administration

system covering preschool, compulsory school, upper secondary school and adult school. Ystad

municipality is a new customer for Tietoevry within the school area and the co-operation begins with the

delivery of the Edlevo school system. The Edlevo student administration solution will support school

management, system administrators, teachers, students and guardians in their daily work. The agreement

initially covers six years, with planned start to go live during spring 2024. Furthermore, the client has an

option to prolong the agreement with three additional plus three years.

In December, Posti Group chose to continue with Tietoevry Connect as its main partner for IT infrastructure

services. The long-lasting co-operation will be fortified with a customer-centric service delivery team

harnessing Tietoevry’s state-of-the-art artificial intelligence operations platform and sovereign cloud

services. These will enable Posti to achieve higher agility, availability, and performance.

In December, Euronext Securities Oslo – the central securities depository of Norway, which provides an

efficient infrastructure and services for the settlement of transactions in securities – chose Tietoevry

Connect as their sourcing partner for the next five years. The agreement covers the operation of critical IT

infrastructure services delivered from Tietoevry’s modern data centres.

In December, the Norwegian Tax Authorities (Skatteetaten) prolonged their contract for end-user services

for an additional year. The contract with Tietoevry Connect includes delivery and lifecycle management of

18 000 devices as a service, operation of self-service PCs at Tax Offices, operation of Macs for developers

and end-user support for more than 9 000 users. The contract is of crucial importance for the Norwegian

Tax Authorities in order to ensure high-quality services for society.

In December, the municipality of Vellinge and Tietoevry Connect prolonged their contract for IT services.

The full stack delivery includes all parts of IT services, including application, server and network

operations, workplace management as well as service desk and on-site support. Tietoevry will continue to

run the services until the end of 2024 with a possibility to prolong with one more year.

In the fourth quarter, several agencies under the Ministry of Agriculture and Forestry signed frame

agreements with Tietoevry Create, covering areas such as application development and maintenance,

cloud DevOps and testing. The frame agreements, involving several vendors, are estimated to be worth a

total of EUR 190 million and are valid for a minimum of four years. Tietoevry is a high-ranked vendor and

among the prioritized providers, e.g. in application development and testing.

Changes in Group structure

Tietoevry sold its Russian operations through a local management buy-out in 2022. With this transaction,

completed on 18 April, Tietoevry has ended all its local operations in Russia and transitioned all its

responsibilities including employees, customers, suppliers, legal and regulatory to the new owners.

As part of a new partnership agreement with Ilmarinen, a change in the service delivery model resulted in a

decision to ramp down TietoIlmarinen Oy. Related to these changes, Tietoevry agreed to acquire the 30%

share of the joint venture from Ilmarinen on 22 December, turning the entity into a wholly owned

subsidiary..

Related to the strategic reviews of the Banking business as well as the Connect and Transform businesses,

Tietoevry has established companies in countries such as the Czech Republic, Finland, Slovakia and India

during the year.

Branches

The Group has branches in France, Latvia, Norway, Ukraine and Sweden.

Personnel

The number of full-time employees amounted to 24 320 (24 389) at the end of December. The number of

full-time employees in the global delivery centres totalled 12 633 (12 197), or 51.9% (50.0) of all personnel.

The 12-month rolling employee turnover stood at 14.4% (14.6) at the end of December.

Group-level salary inflation is expected to be 4–5% on average in 2023. It is offset by a number of actions

including price increases, further offshoring, automation, management of the competence pyramid and

overall cost efficiency across businesses.

Group personnel and remuneration


	2022	2021	2020
Number of full-time employees, 31 December	24 320	24 389	23 632
Average number of full-time employees	24 401	23 824	23 788
12-month rolling employee turnover, %	14.4	14.6	9.7
Employee benefit expenses, EUR million	1 597	1 527	1 486

Tietoevry’s Human Resources (HR) function is facilitating and enabling the development of the company's

workforce. It also ensures that the company’s practices and employee experience improve in line with

market change. The function is led by the Head of HR, while the six business HR leads are responsible for

business-specific HR operations and agendas.

The company supports freedom of association and collective bargaining as defined in the International

Labour Organization’s Declaration on Fundamental Principles and Rights at Work and stated in Tietoevry’s

Code of Conduct. European Works Councils (EWC) are bodies representing European employees.

Tietoevry’s management works constructively with the employee organizations through both the EWC and

local works councils and unions to consult on any significant decision at a European level.

Tietoevry invests in the competence development of its employees. Curiosity and lifelong learning are

crucial aspects of the company’s culture and success. The company’s development and performance

management framework, MyGrowth, drives personal and professional growth by focusing on dynamic goal

setting, regular assessment of training needs and continuous feedback.

Employee engagement activities are followed up through OurVoice, an employee engagement survey,

three times a year. The employee engagement score was 82/100, up from 78 in 2021. The improvement

seen during a year with the new structure taking effect was encouraging. Understanding the direction for

the company and opportunities for professional growth are examples of categories with improvement.

Diversity and inclusion is a key area in Tietoevry’s long-term sustainability plan. The Code of Conduct and

the Diversity and Inclusion Charter outline the principles for diversity and inclusion at Tietoevry. The

company’s six end-to-end businesses implement diversity and inclusion in their respective units and

teams. The overall responsibility for ensuring a diverse workforce where people feel included lies with the

CEO and the Group Executive Management.

More about the company’s sustainable practices and achievements in the section Non-financial

information.

Non-financial information

This section describes Tietoevry’s sustainability activities as required by Chapter 3a of the Finnish

Accounting Act on non-financial information (NFI). The linkages between NFI areas and Tietoevry's

sustainability focus areas are identified in the chart describing policies and processes. More information is

available in the Sustainability Report, which is partly assured by an external partner.

Tietoevry's business model

The company’s services comprise software and digital engineering as well as managed services and

transformation, and related capabilities to support customers’ business renewal, innovation and efficient

operations. Tietoevry’s role varies from consulting and advisory, designing and building solutions to

running IT operations. Competitiveness is based on solutions combining best-of-breed technologies with

consulting and integration capabilities, industrialized service delivery and strong global delivery capability.

To capture the momentum of the cloud-native and software market, Tietoevry’s six specialized end-to-end

businesses have full operational responsibility, including go-to-market, service portfolio as well as

investments and partnerships to drive scale and expansion.

Management of NFI topics

Tietoevry’s highest governance body, the Board of Directors, is accountable for guiding the company

strategy on environmental, social and governance issues. Decision-making on and oversight of the

management of Tietoevry's impact is delegated to Tietoevry's Sustainability Steering Group (SSG), which

reports on a regular interval to the Group Executive Management and the Board. The SSG is chaired by the

Vice President, Communications, Sustainability, Brand and Marketing, and represents different Tietoevry

functions and units, with many members from the Group Executive Management.

The SSG is responsible for preparing the sustainability section of Tietoevry’s combined annual report. The

Audit and Risk Committee (ARC) of the Board of Directors reviews the NFI on an annual basis, including

reviewing performance against sustainability goals and the management of sustainability-related risks.

Operational sustainability work is facilitated by the company’s Sustainability Team led by the Head of

Sustainability, who is also responsible for Tietoevry’s sustainability policies and processes.

During 2022, Tietoevry’s management and the Board of Directors formally reviewed sustainability-related

topics on three occasions. These topics included, for example, the sustainability strategy 2023, the NFI and

sustainability-related risks, and the company’s societal engagements in 2022. Review of operational and

business-oriented sustainability topics is delegated to the SSG, which meets at a minimum every second

month.

In 2020, Tietoevry launched its Sustainability Strategy 2023, supported by a materiality analysis to identify

and prioritize the most important sustainability topics. This analysis continues to form the basis for the

company’s sustainability strategy and reporting in accordance with GRI Standards. During 2022, the work

towards the goals defined in the sustainability strategy continued according to plan.

The strategy is twofold: it focuses both on the continuous development of Tietoevry’s responsible

operations, and on the business-impact opportunities that the company has together with its customers.

Responsible operations consist of three key themes: climate action, ethical conduct, and an exciting place

to work. Each theme includes publicly-stated goals, and the related action plans, implementation and

reporting are managed by the designated responsibility area owners and data partners. The goals and

results for responsible operations in 2022 are presented further down in this section. The business-impact

opportunities include a range of solutions and services that can improve customers’ sustainability

performance and create a positive impact on society. These opportunities are driven by each of Tietoevry’s

six businesses and supported by a cross-business network.

The Sustainability Strategy 2023 is managed according to Tietoevry’s sustainability management process,

which follows the United Nations (UN) Global Compact Management Model and the GRI Standards.

Linkages to the UN Sustainable Development Goals, which are considered a strategic tool in enabling

corporations to contribute to a more sustainable society, are established by applying principled

prioritization. The management of the responsibility areas, as defined in the strategy – including policies,

processes, due diligence and escalation channels – is illustrated in the chart in this section.

Tietoevry’s ethical guidelines are summarized in the Code of Conduct Policy, which applies to all

employees and company representatives of Tietoevry, and in a separate Supplier Code of Conduct Rule

applied to any third party contributing to the company’s services, products, and other business activities.

Both documents were updated in 2022, and are based on the UN Global Compact, the Science Based

Target Initiative (SBTi), the UN Guiding Principles on Business and Human Rights, OECD Guidelines for

Multinational Enterprises, and ISO 14001. The policies cover all responsibility areas, which are also linked

to other topic-specific policies and more detailed rules. The policies cover the relevant legal, certification

and other best-practice requirements, and are reviewed annually. In 2022, Tietoevry also developed a

Human Rights Policy, which is to be implemented across the Group during 2023 and beyond.

Tietoevry has a group-wide internal whistleblowing channel, which is also available to external parties

such as customers and suppliers. The Tietoevry Whistleblowing Channel is operated by an external service

provider. Whistleblowing notifications concerning matters such as possible Code of Conduct violations are

investigated confidentially through a predefined process by the Group Compliance Officer or, if requested

by the whistleblower, by a designated point of contact at certain subsidiary companies. Cases of a severe

or sensitive nature are also referred to the Escalation Committee, which consists of the Group Compliance

Officer, Head of Corporate Governance, Compliance and M&A, Head of Legal and Compliance, Head of

Risk Management and Internal Audit, and Head of HR. If a whistleblower notification relates to managers

who are members of the Group Executive Management – including the CEO – then the Chair of the Audit

and Risk Committee of the Board of Directors will be informed. If a whistleblower notification involves

managers who directly report to Group Executive Management, the CEO will be informed.

In the case of serious or especially sensitive whistleblowing cases, the Group Compliance Officer will

prepare a report for submission to the Audit and Risk Committee. For each such case, the Escalation

Committee will consider whether the CEO or Board of Directors should also be informed. Biannual reports

are prepared for the Audit and Risk Committee, covering aggregated information about notifications

received through the whistleblowing channel, cases under investigation, cases closed, and rectifying

measures taken. In addition, responsibility areas have separate channels for incident reporting and

continuous improvement.

Main risks for negative impacts in the operating environment

The aim of Tietoevry’s internal control framework is to ensure that operations are effective and well

aligned with the company’s strategic goals. This includes identifying potential negative impacts that

Tietoevry might have on its operating environment, and escalating the company’s mitigation measures if

necessary. The internal control framework is intended to ensure correct, reliable, complete and timely

financial reporting and management information. The framework endorses ethical values, good corporate

governance, and risk management practices. Risk management and major risks are described in detail in

the Corporate Governance Statement.

Tietoevry applies a systematic risk management approach to improve the efficiency and control of

business operations, as well as to manage business continuity and profitability. The risk management

framework consists of the risk management organization and related policies, processes, tools and

common ways of working. The risk management organization develops and maintains the company’s risk

management framework, including risk reporting, risk management governance and follow-up of risk

exposures consisting of strategic, financial, operational, compliance and people risks. During 2022,

Tietoevry continued its efforts to improve the corporate risk management framework related to

sustainability risks, including human rights and environmental risks.

The risk management organization consists of the Corporate Risk Management Unit and nominated Risk

Managers in the businesses. A group-wide Risk Manager Forum has been established for information

sharing, setting direction for risk management, collaboration between units, and reviewing steering

documents. In addition, the forum coordinates group-wide risk management activities and ensures

company-wide deployment of the risk management framework.

Tietoevry defines its sustainability risks as negative impacts on people and planet that might be caused by

the company’s own activities across the value chain. Sustainability risks also include a reputational factor,

in that negative publicity could lead to lower scores in sustainability indices or to deviations in audits

conducted by independent parties. Severe breaches in these areas could also lead to loss of customer

trust and the imposition of penalties.

Failing to comply with regulations, such as the GDPR, may subject the company to regulatory interventions,

penalties, or sanctions imposed by customers. Fraudulent, unethical, or even illegal actions by individuals

in areas such as corruption or conflict of interest can occur if company controls are not adequate,

anticorruption awareness is not at a sufficient level, or organizational culture does not support appropriate

behaviour. Such situations can have negative consequences, ranging from disqualification from public

tenders to sanctions. Compliance training, improvements of controls, audits and follow-ups are used to

mitigate these risks.

Stress-related health issues as well as discrimination and harassment are material human and labour

rights-related risks at Tietoevry. The company has a systematic approach towards mitigating these types of

risks, including regular employee surveys to monitor employee satisfaction and engagement, as well as a

whistleblowing channel. From an operational perspective, deliveries could be compromised if key

resources are not available due to personnel taking long sick leaves. Employee health, safety and well-

being have been a particular focus due to the prolonged pandemic. Global and local hybrid-working

guidelines continue to provide clarity on matters such as access to support for maintaining good working

conditions.

Health issues, discrimination and harassment can lead to a working environment in which employees are

unable to reach their full potential. Tietoevry believes that diversity in personnel – whether in terms of

gender, age or cultural background – is crucial in order to stay competitive in the fast-paced technology

industry. Diversity and inclusion are therefore an integral part of the company culture, and a strategic focus

area aimed at ensuring innovation and delivery capabilities as well as employee engagement.

Tietoevry’s supplier base consists of direct and indirect suppliers. The supply chain can include risks

related to the environment, human and labour rights, and corruption. Tietoevry strives for a fair and green

supply chain in which the company neither causes nor contributes to negative impacts on people and the

planet. Severe breaches against international conventions in the supply chain could lead to customers

deciding to terminate contracts, or to authorities implementing sanctions. Tietoevry mitigates these risks

through its responsible sourcing programme and its onboarding practices. Both of these areas are covered

by compliance and audit activities. Post pandemic, there have been limited possibilities to carry out on-

premises audits of Tietoevry’s suppliers. However, the company is actively investigating opportunities to

continue these audits.

Environmental risks are identified and mitigated within Tietoevry’s Environmental Management System and

include, for example, risks related to our offices, equipment, waste handling, and business travel. The

environmental aspects and associated impacts are assessed once a year and in connection with any

significant change, such as new business areas or products. Environmental risk analysis includes

identifying, evaluating and summarizing significant environmental aspects in the environmental aspect

performance. Proper handling of these aspects is a prerequisite for the ISO certificate (ISO14001,

Environmental Management) and our attractiveness as a supplier, partner and employer.

Tietoevry strives to mitigate the contribution to climate change by reducing own carbon emissions,

increasing energy efficiency, and helping customers to reduce their carbon emissions through the

company's technology solutions. During 2022, Tietoevry aligned its emission reduction ambitions with the

1.5-degree targets and had these approved by the Science Based Targets initiative.

Physical climate change impacts, such as changes in precipitation, volumes of snow and ice, rise in sea

level, hurricanes, and cyclones as well as access to natural resources, may have an impact on Tietoevry or

on strategic partners in our supply chain. Geotechnical assessments are part of our preliminary work prior

to any new construction of offices or datacentres. Back-up centres ensure continuity of customer

operations even in cases of severe consequences from climate change.

Policies and processes on NFI matters


Sustainability areas	Ethical conduct	Climate action	Exciting place to work

	1. Business ethics and anti-corruption	5. Energy usage and greenhouse gas emissions	7. Diversity and inclusion

	2. Human rights	6. Circular economy practices	8. Employee experience

	3. Cyber security and privacy

	4. Responsible sourcing

Policies	Policies, rules and guidelines
Policies	Code of Conduct (1, 2), Internal audit policy (2, 3), Anti-corruption rule (2), Whistleblowing rule (1, 2, 3, 7, 8), Competition rule (2), Procurement policy (4), Supplier Code of Conduct (1, 2, 4, 5), Environmental rule (4, 5, 6), Information classification rule (3), Data transfer rule (3), Security policy (3), Security rule (3), User Security rule (3), Privacy policy (3), AI policy and AI rule (1, 3), Occupational Health and Safety policy (1, 8), HR policy (1, 7, 8), Insider rule (2), Public Authority Request rule (1,3), Human rights policy (1, 2, 3, 4), Travel rule (6)

Due diligence processes	Internal and external audits (1, 2), Governance, risk and compliance management (2, 3), Sourcing to pay (4), Supplier self assessment (4), Environmental management process (EMS) ISO14001 (4, 5, 6), ISO27001 (3), ISO31000 (3), ISAE3402 audits in Data Centers (3), ISAE 3000 Assurance over non-financial information (1, 2, 3, 4, 5, 7, 8), Information and cyber security audits and assessments (3), CDP Climate Change program (4, 5, 6), HR processes (1, 7, 8), Employee engagement survey (8), Human rights impact assessments
	Sustainability management processes, sustainability materiality assessment for Sustainability Game Plan 2023

	Whistleblowing channel

Goals and results for each sustainability area


Responsibility area	Goal	Result 2020	Result 2021	Result 2022	Trend	UN Sustainable development goal
ETHICAL CONDUCT
Human rights	2021: Conduct a formal Human Rights Impact Assessment for a business entity	Assessment to be conducted in 2021	Group-wide human rights risk screening conducted in 2021 with completion in 2022	In progress
Cybersecurity and privacy	2023: Zero substantiated complaints concerning breaches of customer privacy and losses of customer data1)	Zero	Zero	Zero
Business ethics and anti-corruption	2023: 90% completion of ethics training (CoC e- learning)2)	91%	93%	96%
Business ethics and anti-corruption	2023: 100% confirmation of receipt of a whistleblowing notification within four business days of receipt	100%	100%	100%
Responsible sourcing	2023: 100% of new or renewed suppliers agreeing to Tietoevry’s Supplier Code of Conduct3)	100%	99%	100%
CLIMATE ACTION
Energy usage and GHG emissions	2023: 80% reduction of scope 1 and 2 GHG emissions by 2023	Baseline	44% reduction	70% reduction
Energy usage and GHG emissions	2023: 100% carbon-free electricity in all data centres and offices	80%	92%	95%
Circular economy practices	2023: 100% reuse and recycling of hardware4)	Not measured	Internal: 70%, Customer: 86%	Internal: 93%, Customer: 95%
EXCITING PLACE TO WORK
Diversity and inclusion	2026: 40% female employees by 2026, 2030: 50% female employees by 20305)	29% female employees	29% female employees	31% female employees
Employee experience	2023: Employee engagement score >75	76/100	78/100	82/100

1) Substantiated complaints regarding customer privacy and losses of customer personal data is defined as security incidents where national authorities have issued financial fines to Tietoevry related to the topic.

2) Measured on an annual basis

3) Scope: Agreements made through Procurement function. Note that scope also includes supplier’s versions of Code of Conducts agreed by our Head of Sustainability.

4) Scope: Result based on reuse of returned devices (mainly laptops). Data accuracy: data is based on our main hardware supplier’s reports. This supplier provides close to 70% of Tietoevry’s devices. Baseline for measurement is FY2021.

5) Permanent employees (headcount)

EU Taxonomy reporting

Mobilizing sustainable investments towards a low-carbon and resilient economy

The European Union has set a clear target of becoming the world’s first climate-neutral continent by 2050.

The digital transition as well as smarter and greener use of technologies are described as key enablers for

achieving this. To support investment into sustainable projects, the EU has launched a classification system

for sustainable business activities, the EU Taxonomy.

The European Commission adopted the Climate Delegated Act in 2021, containing the two first

environmental objectives: climate change mitigation and climate change adaptation. The remaining four

objectives are expected to follow in 2023.

Companies that fall under the EU’s Non-Financial Reporting Directive must report how well their operations

match the EU Taxonomy. For reporting on the financial year 2022, companies report both taxonomy-

eligible and taxonomy-aligned KPIs: revenue as well as capital and operating expenditure.

In order for an activity to be classified as aligned, it should comply with technical screening criteria defined

by the EU. According to technical screening criteria, an activity should ‘substantially contribute’ to at least

one environmental objective and avoid causing ‘significant harm’ to any of the other five objectives.

Furthermore, the company should comply with minimum safeguards.

Proportion of revenue from products or services associated with taxonomy-aligned economic activities


				Substantial Contribution Criteria						DNSH criteria ('Does Not Significantly Harm')
Economic activities (1)	Code (2)	Absolute revenue (3)	Proportion of turnover (4)	Climate Change Mitigation (5)	Climate Change Adaptation (6)	Water (7)	Circular economy (8)	Pollution (9)	Biodiversity and ecosystems (10)	Climate Change Mitigation (11)	Climate Change Adaptation (12)	Water (13)	Pollution (14)	Circular Economy (15)	Biodiversity (10)	Minimum safeguards (17)	Taxonomy aligned proportion of turnover, year N (18)	Taxonomy aligned proportion of turnover, year N-1 (19)	Category (enabling activity) (20)	Category (transitional activity) (21)
Text		EUR million	%	%	%	%	%	%	%	Y/N	Y/N	Y/N	Y/N	Y/N	Y/N	Y/N	%	%	E	T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Revenue of environmentally sustainable activities (Taxonomy-aligned) (A.1)		0.0	0%	—	—	—	—	—	—								0%	—
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Data processing, hosting and related activities	8.1	544.2	19%
Revenue of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2)		544.2	19%														—	—
Total (A.1+A.2)		544.2	19%														0%	—
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Revenue of Taxonomy-non-eligible activities (B)		2 383.9	81%
Total (A+B)		2 928.1	100%

Revenue

Tietoevry’s revenue amounted to a total of EUR 2 928.1 (2 823.4) million in 2022 (Notes 5 and 6 to the

Financial Statements), of which EUR 544.2 (570,2) million, or 19% (20%) was eligible. The decline of the

proportion was mainly due to a change in the taxonomy interpretation, following new guidelines from the

EU1). Tietoevry’s eligible revenue comes from data platform services, falling under activity 8.1 ‘Data

processing and hosting and related activities’ in Annex I (climate change mitigation).

While the company’s products and services have positive effects on environmental sustainability, revenue

associated with economic activity 8.2 ‘Data-driven solutions for GHG emissions reductions’ described in

Annex I (climate change mitigation) to the Climate Delegated Act is not deemed eligible. This is due to the

fact that climate change mitigation is not the predominant aim of offerings in the manner described in

economic activity 8.2.

1) Based on the European Commission’s notice draft on the interpretation, published on 2 February 2022, Tietoevry conducted a reassessment

of the 2021 reporting. The company's conclusion is that activity 3.6 ‘Manufacture of other low carbon technologies’ is no longer deemed

eligible in 2022 reporting.

Tietoevry does not report any eligible revenue or investments for offerings contributing to the objective

climate change adaptation. According to Annex II (climate change adaptation) to the Climate Delegated

Act, the objective of increasing customers' resilience to physical climate risks is to be at the core of the

activity. None of the offerings meet the criteria in the manner expected in the taxonomy regulation.

Alignment assessment was carried out for eligible offerings at the data centre level through technical

screening criteria for ‘substantial contribution’ to climate change mitigation and criteria ensuring that each

activity ‘does not significantly harm’ any other applicable environmental objective. Tietoevry concluded

that the eligible offerings for economic activity 8.1 ‘Data processing and hosting and related

activities’ (climate change mitigation) to a large degree met the technical screening criteria for substantial

contribution, except for technical screening criteria 3: the Global Warming Potential of refrigerants used in

the data centre cooling system does not exceed 675. Following this, the company does not deem any of its

revenue as aligned. Furthermore, criteria for ‘does not significantly harm’ was met to a large degree.

Proportion of capital expenditure from products or services associated with taxonomy-aligned economic activities


				Substantial Contribution Criteria						DNSH criteria ('Does Not Significantly Harm')
Economic activities (1)	Code (2)	Absolute capex (3)	Proportion of capex (4)	Climate Change Mitigation (5)	Climate Change Adaptation (6)	Water (7)	Circular economy (8)	Pollution (9)	Biodiversity and ecosystems (10)	Climate Change Mitigation (11)	Climate Change Adaptation (12)	Water (13)	Pollution (14)	Circular Economy (15)	Biodiversity (10)	Minimum safeguards (17)	Taxonomy aligned proportion of capex, year N (18)	Taxonomy aligned proportion of capex, year N-1 (19)	Category (enabling activity) (20)	Category (transitional activity) (21)
Text		EUR million	%	%	%	%	%	%	%	Y/N	Y/N	Y/N	Y/N	Y/N	Y/N	Y/N	%	%	E	T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
CapEx of environmentally sustainable activities (taxonomy-aligned) (A.1)		0.0	0%		—	—	—	—	—								0%	—
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Data processing, hosting and related activities	8.1	43.3	29%
Acquisition and ownership of buildings	7.7	46.3	31%
Transport by motorbikes, passenger cars and light commercial vehicles	6.5	8.0	5%
CapEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2)		97.6	66%														—	—
Total (A.1+A.2)		97.6	66%														0%	—
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible activities (B)		50.3	34%
Total (A+B)		147.9	100%

Capital expenditure

Capital expenditure amounted to a total of EUR 147.9 (128.1) million, comprising EUR 92.9 million in

additions to tangible and intangible assets (see Notes 11 and 12 to the Financial Statements) and EUR 55.0

million in additions to right-of-use assets, mainly related to the company’s premises and vehicles (in Note

20 to the Financial Statements, total additions of EUR 105.3 million include remeasurements and lease

modifications which are excluded from the amount used in this capital expenditure calculation).

Taxonomy-eligible capital expenditure was EUR 97.6 (126.4) million, or 66% (99%) of the total amount..

The decline of the proportion was mainly due to a change in the taxonomy interpretation, following new

guidelines from the EU.1) Taxonomy-eligible capital expenditure fell under the following categories, defined

in the EU Taxonomy regulation:

a) ‘investments in assets or processes associated with taxonomy-eligible or taxonomy-aligned economic

activities’

30%: taxonomy-eligible capital expenditure in this category comprises expenditure for data centres.

c) ‘purchases of output from taxonomy-eligible or taxonomy-aligned economic activities’. At Tietoevry,

these purchases fall under activity 7.7 ‘Acquisition and ownership of buildings’ and activity 6.5 ‘Transport

by motorbikes, passenger cars and light commercial vehicles’.

36%: taxonomy-eligible capital expenditure in this category includes additions to right-of-use assets. In

the c) category, the taxonomy criteria comprise several components with measurement not yet a market

practice.

Tietoevry did not include any capital expenditure under capex category b) ‘part of a plan to expand

taxonomy-aligned economic activities or to allow taxonomy eligible economic activities to become

taxonomy-aligned’. This category was assessed while the following taxonomy requirements create an

obstacle to the company to deem its investments in category b) taxonomy eligible:

•climate change mitigation being the pre-dominant aim, described in economic activity 8.2 of

Annex I (climate change mitigation) to the Climate Delegated Act, and

•climate change adaptation being at the core of the solution, described in Annex II (climate

change adaptation) to the Climate Delegated Act

The company did not identify any of its capital expenditure as aligned.

1) Based on the European Commission’s notice draft on the interpretation, published on 2 February 2022, Tietoevry reassessed its

interpretation on capital expenditure in relation to Annex II to the Climate Delegated Act (climate change adaptation). Associated capital

expenditure is no longer deemed eligible.

Proportion of operating expenditure from products or services associated with taxonomy-aligned economic activities


				Substantial Contribution Criteria						DNSH criteria ('Does Not Significantly Harm')
Economic activities (1)	Code (2)	Absolute opex (3)	Proportion of opex (4)	Climate Change Mitigation (5)	Climate Change Adaptation (6)	Water (7)	Circular economy (8)	Pollution (9)	Biodiversity and ecosystems (10)	Climate Change Mitigation (11)	Climate Change Adaptation (12)	Water (13)	Pollution (14)	Circular Economy (15)	Biodiversity (10)	Minimum safeguards (17)	Taxonomy aligned proportion of opex, year N (18)	Taxonomy aligned proportion of opex, year N-1 (19)	Category (enabling activity) (20)	Category (transitional activity) (21)
Text		EUR million	%	%	%	%	%	%	%	Y/N	Y/N	Y/N	Y/N	Y/N	Y/N	Y/N	%	%	E	T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
OpEx of environmentally sustainable activities (taxonomy-aligned) (A.1)		0.0	0%	—	—	—	—	—	—								0%	—
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Data processing, hosting and related activities	8.1	16.4	18%
Acquisition and ownership of buildings	7.7	5.8	6%
OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2)		22.2	24%														—	—
Total (A.1+A.2)		22.2	24%														0%	—
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible activities (B)		70.7	76%
Total (A+B)		92.9	100%

Operating expenditure

Operating expenditure as defined in the EU Taxonomy amounted to a total of EUR 92.9 (90.0) million,

comprising EUR 87.1 million in offering and internal development and EUR 5.8 million in maintenance of

premises and short-term leases. Taxonomy-eligible operating expenditure was EUR 22.2 (89.2) million, or

24% (close to 100%) of the total amount. The decline of the proportion was mainly due to a change in the

taxonomy interpretation, following new guidelines from the EU1) Eligible operating expenditure fell under

the categories below, defined in the EU Taxonomy regulation:

a) ‘expenditure related to assets or processes associated with taxonomy-eligible or taxonomy-aligned

economic activities’

18%: taxonomy-eligible operating expenditure in this category includes offering and internal development

related to data platform services.

c) ‘purchases of output from taxonomy-aligned economic activities’

6%: taxonomy-eligible operating expenditure in this category relates to maintenance of premises and

short-term leases.

Operating expenditure category b) ‘part of a plan to expand taxonomy-aligned economic activities or to

allow taxonomy-eligible economic activities to become taxonomy-aligned’ was assessed but Tietoevry did

not include any development costs under this category.

None of the company’s eligible operating expenditure was identified as aligned.

1) Based on the European Commission’s notice draft on the interpretation, published on 2 February 2022, Tietoevry reassessed its

interpretation on operating expenditure in relation to Annex II to the Climate Delegated Act (climate change adaptation). Associated operating

expenditure is no longer deemed eligible.

Compliance with Minimum Safeguards

Compliance with Minimum Safeguards was evaluated on a Group level. The evaluation included policy

reviews and focused on the alignment of existing due diligence processes with the UNGPs and OECD

Guidelines for Multinational Enterprises across the company. In order to become fully aligned with

Minimum Safeguards requirements, the company continues carrying out risk and impact assessments

related to human rights and anti-corruption as well as related documentation.


ACCOUNTING POLICIES FOR EU TAXONOMY REPORTING
The required key performance indicators have been determined based on the company’s financial reporting prepared in accordance with IFRS. Further details about the Group’s accounting policies are described in the notes to the consolidated financial statements.
Revenue
At Group level, revenue comprises reportable segments’ total revenue and eliminations for internal revenue. Tietoevry’s eligibility assessment is primarily based on Group-level aggregated lead offerings, which is a key dimension in the company’s internal operative accounting. Approaching the reporting through the assessment of lead offerings, and contributing to only one objective, climate change mitigation, means that there is no risk of double counting.
Capital expenditure
Capital expenditure is defined as additions to tangible and intangible assets during the financial year considered before depreciation, amortization and any remeasurements (including those resulting from revaluations and impairments) and excluding fair value changes. It also includes additions to tangible and intangible assets resulting from business combinations and additions to right-of-use assets from lease contracts.
Capital expenditure in this taxonomy reporting section includes additions to right-of-use assets, reported in Note 20 in the Financial Statements, while this is excluded from capital expenditure presented in the Group’s key figures in this Report by the Board of Directors. Identification of eligible capital expenditure was made based on Group-level reporting and thus there was no risk of double counting.
Operating expenditure
Operating expenditure is defined as expenditure related to research and development, building renovation measures, short-term lease, maintenance and repair, and any other direct expenditures relating to the servicing of assets of property, plant and equipment by Tietoevry or a third party to
Tietoevry’s operating expenditure consists of the following items
•costs for offering and internal development related to data platform services. In the financial reporting, these costs are included in employee benefit expenses.
•costs for maintenance and short-term lease. In the financial reporting, related costs are included in other operating expenses.

Shareholders' Meeting

Tietoevy Corporation's Annual General Meeting (AGM) held on 24 March approved the financial

statements 2021 and discharged the company's officers from liability for the financial year 2021. The

meeting also approved the Remuneration Report. The AGM decided on a total dividend of EUR 1.40 per

share, paid in two instalments.

The meeting reelected Timo Ahopelto, Tomas Franzén, Liselotte Hägertz Engstam, Harri-Pekka Kaukonen,

Angela Mazza Teufer, Katharina Mosheim, Niko Pakalén and Endre Rangnes. Tomas Franzén was reelected

as the Chairperson of the Board of Directors.

Shareholders' Nomination

Board

The composition of the Shareholders’ Nomination Board was determined based on holdings on 31 August

2022. The Shareholders’ Nomination Board comprises the following persons:

•Petter Söderström, Investment Director, Solidium Oy

•Alexander Kopp, Investment Manager, Incentive AS

•Gustav Moss, Vice President, Cevian Capital AB

•Mikko Mursula, Deputy CEO, Ilmarinen Mutual Pension Insurance Company and

•Tomas Franzén, Chairperson of the Board of Directors, Tietoevry Corporation.

The Board of Directors

Board of Directors as at 31 December 20221)


Name	Born	Nationality	Education	Main occupation
Tomas Franzén (Board and RC Chairperson)	1962	Swedish	MSc. (Eng.)	Professional Board member
Timo Ahopelto (Deputy Chairperson)	1975	Finnish	MSc. (Tech.)	Entrepreneur, investor and professional Board member
Harri-Pekka Kaukonen (ARC Chairperson)	1963	Finnish	DSc. (Tech.)	Professional Board member
Liselotte Hägertz Engstam	1960	Swedish	MSc. (Civ. Eng.)	Expert advisor, professional Board member
Angela Mazza Teufer	1973	Italian and Swiss	Master of Business Adm.	Managing Director, Ambulatory Information Systems DACH
Katharina Mosheim	1976	Austrian	Ph.D. (Econ.)	CEO, Alpha Pianos AS
Niko Pakalén	1986	Finnish and Swedish	MSc. (Econ.)	Partner, Cevian Capital AB
Endre Rangnes	1959	Norwegian	BBA (Econ.)	CEO, Zolva Group, professional Board member
Robert Spinelli (personnel representative)2)	1957	Swedish	General data processing	Customer Executive
Ilpo Waljus (personnel representative)	1974	Finnish	BBA	Test Manager

1) Leif Teksum and personnel representatives Tommy Sander Aldrin, Ola Hugo Jordhøy and Anders Palklint served as Board members until the AGM on 24 March 2022.

2) Board member as of the AGM on 24 March 2022..

The President and CEO and operative management

Members of the Group management as at 31 December 20221)

Kimmo Alkio

President and CEO

Born: 1963

Nationality: Finnish

Education: BBA and Executive MBA

Joined Tietoevry in 2011

Kishore Ghadiyaram

Head of Strategy

Born: 1972

Nationality: Indian

Education: BSc. (Tech.)

Joined Tietoevry in 2008

Tomi Hyryläinen

Chief Financial Officer

Born: 1970

Nationality: Finnish

Education: MSc. (Econ.)

Joined Tietoevry in 2018

Ari Järvelä

Managing Director, Tietoevry Care and Tietoevry Industry

Born: 1969

Nationality: Finnish

Education: MSc. (Eng.)

Joined Tietoevry in 2001

Satu Kiiskinen

Managing Director, Tietoevry Transform

Born: 1965

Nationality: Finnish

Education: MSc. (Econ.)

Joined Tietoevry in 2013

Christian Pedersen

Managing Director, Tietoevry Create

Born: 1974

Nationality: Norwegian

Education: MSc. (Tech.)

Joined Tietoevry in 2014

Christian Segersven

Managing Director, Tietoevry Banking

Born: 1975

Nationality: Finnish

Education: MSc. (Tech.)

Joined Tietoevry in 2013

Johan Torstensson

Managing Director, Tietoevry Connect

Born: 1969

Nationality: Swedish

Education: MBA in Finance and Management

Joined Tietoevry in 2019

Trond Vinje

Head of HR

Born: 1968

Nationality: Norwegian

Education: MSc. (Pol. Sci.)

Joined Tietoevry in 2015

The remuneration and more detailed background information, such as full CVs of the Group Management,

are presented on the company’s website.

1) Malin Fors-Skjæveland acted as Head of Operations until 31 December 2022..

Auditors

The AGM 2022 elected the firm of authorized public accountants Deloitte Oy as the company’s auditor for

the financial year 2022. Deloitte Oy notified the company that Authorized Public Accountant Jukka

Vattulainen acts as principal auditor.

Auditing

The AGM 2022 elected the firm of authorized public accountants Deloitte Oy as the company’s auditor for

the financial year 2022. Deloitte Oy notified the company that Authorized Public Accountant Jukka

Vattulainen acts as principal auditor.

In 2022, Tietoevry Group paid the auditors a total of EUR 1.3 (1.3) million in audit fees, and a total of EUR

0.6 (0.5) million for other services.

Major risks

Tietoevry utilizes five risk categories within Risk Management: strategic, operational, financial, people, and

compliance risks.

Strategic risks are related to market volatility, IT market transformation to new technologies (including the

rapid digitalization and automatization of society), change management, reskilling ability and speed, ability

to respond to competition and new entrants in the market, dependencies on few big customers in some

business areas and ensuring delivery quality in the dynamic business environment.

Operational risks refer e.g. to changing the business model in business units, risk and continuity

management, cybersecurity, climate change, customer bidding and requirement analysis, and maintaining

a high professional standard in delivery management and quality assurance.

Financial risks mainly consist of credit risks, currency risks, interest rate risks, inflation and funding and

liquidity risks.

Compliance risks are connected to the organization failing to recognize or meet the requirements in the

areas of legislation or other mandatory regulation (e.g. General Data Protection Regulation (GDPR),

Schrems II, anti-corruption, anti-bribery, insider matters, sanctions and trade compliance), internal policies

and rules or ethics and integrity.

People risks can be driven by Tietoevry's needs to build a market-leading workforce for high performance

in terms of delivering projects and customer services; people risks are also related to quality of life, human

rights, and the safety of people.

Risks are registered, managed, followed-up and aggregated by utilizing the corporate GRC platform,

resulting in risk maps and Risk KPIs that are reviewed by leadership teams in the units and the ARC.

Tietoevry’s major risks and the measures for their mitigation are described below.

Market volatility

Changes in the Nordic core markets have a direct effect on market conditions and result in volatility that

might have a negative impact on Nordic market growth. Changes in the economic environment and

customer demand can affect both business volumes and price levels, which might result in lower revenue

or slower revenue growth than expected.

These potential risks are mitigated through multi-year contracts for continuous services. Tietoevry also

aims to maintain long-term business relations and to be a preferred supplier to its customers. The company

executes tight cost and investment control with continuous investment performance monitoring,

accompanied with a clear structure for decision rights, which are defined in the Decision Making Authority

(DMA) Policy.

Global service capabilities, cross-selling and tough price competition are the main drivers in the IT sector

for the development of the global delivery model. Tietoevry’s position as a leading IT service provider in the

Nordics is supported by existing and enhanced competencies, and by the choice of right partners.

Change and transformation

Tietoevry announced its new strategy to drive customer value and growth through specialization. The

technology industry is being reshaped with cloud as the foundation, providing expansion opportunities for

the company. Expansion will focus on cloud-native services, data & software engineering and scalable

software businesses. In managed application and infrastructure services, the company will seek

partnerships to invest and build scale. Strategic review of the Tietoevry Banking Business and combined

Tietoevry Connect and Transform businesses will result in changes requiring careful change management.

In large-scale adaptation to the market by organizational transformation and right-sizing, resistance to

change can prolong the transition, which may affect operational efficiency.

Change management is steered by the company-wide or project-specific Program Management Office,

which provides standard tools and systems for the change, including communication, target setting and

training for the implementation of the new strategy.

The Group Project Excellence unit sets common standards for project management to ensure proper

project risk management and compliance in project financials management and follow-up.

Sudden changes in the market environment, customer demand and customer strategies or the competitive

landscape in these areas might harm Tietoevry’s operations and profitability.

To diversify the business, Tietoevry provides services to several different industries and markets. The

company develops its business mix to provide new industry software solutions, digital consulting, new

hybrid cloud solutions and broader R&D capabilities to strengthen its position amongst both current and

new customers. An industrialized and standardized way of providing services and solutions, employing

automated processes, improves competitiveness and reduces risk.

Service continuity

Close to 100% availability of the services is the basis of trust among customers, stakeholders and society.

A service continuity disruption can be caused, for instance, by hardware or software failures, power

outages, natural disasters and different types of intentional or unintentional actions by people.

Risks related to malfunctions of systems could seriously affect Tietoevry’s ability to provide its services and

have an adverse impact on the company’s financials and reputation.Thus, business continuity planning is a

high priority in Tietoevry’s operational management in order to ensure that redundancy and fault tolerance

are at the appropriate level.

To reduce the service continuity risk and to better understand the interdependencies in solutions and data

centres, Tietoevry constantly reviews, maintains and improves its IT asset management, configuration

management and monitoring systems. In addition to a balanced global portfolio, Tietoevry has recovery

procedures and backup systems in place to handle potential service interruptions. Root cause analysis,

best practices and experiences from previous incidents help in preparing for and mitigating the service

continuity risk.

Also, a comprehensive and robust major incident & escalation process and crisis management process

reduce service interruptions.

Cybersecurity

Tietoevry’s business operations involve processing and storing large amounts of confidential data of public

and private sector customers, business partners and own data, including sensitive personal data.

The threat landscape is constantly growing and evolving – e.g. criminal hackers, hacktivists, human errors

or misconduct, and state-sponsored organizations – and may cause malfunctions or cybersecurity

breaches of information against Tietoevry, its customers, subcontractors or other third parties.

At least the following threats are risk factors that could lead to loss, misuse, destruction of data or system

malfunction, compromising Tietoevry’s ability to support, manage or develop services:

•Enterprise ransomware

•Supply chain attacks

•Critical vulnerabilities

•Targeted attacks

•Digital fraud

•Denial of service attacks

•Data breaches and data leaks

•Insider threats

Such events could have an adverse impact on the company’s financials and reputation.

To detect and investigate cybersecurity incidents, Tietoevry has implemented a comprehensive and robust

major incident & escalation process, a crisis management process as well as efficient cybersecurity

defence with high-class detection and response capabilities to reduce service interruptions.

We regularly review our risk management and cybersecurity framework, train our employees to increase

their awareness of cyber threats and continuously measure our cybersecurity maturity.

Quality costs related to customer bidding and delivery management

Inability to appropriately understand and analyse customers’ changing needs, their business processes

and the exact requirements can lead to misjudgements in setting the scope of projects or services and,

consequently, difficulties in meeting the specifications of customer agreements.

Tietoevry is committed to actively verifying that business processes from sales to delivery are designed,

implemented and embedded to deliver customer value and actively mitigate end-to-end risk exposure

along full contract life cycles. Internal and external quality assessments and audits are used to verify the

effectiveness and efficiency of ways of working as well as to control the quality of outcomes through

measurable and actionable KPIs (Key Performance Indicators) and key controls. At the same time,

customer feedback management is an integral part of how we drive performance and safeguard quality

assurance at both the operational and strategic level. As part of this, we actively ask customers for

feedback to understand how well we perform individual deliveries. In addition, we engage with customers

to understand how well we support them in meeting their changing business objectives through our

portfolio of deliveries. Insights and actions resulting from customer feedback are prioritized and followed

up regularly at all levels of the organization and integrated into change management efforts.

Retention and attrition of employees

The competition in the market and demand for new services require ability and speed to reskill, attract

new and retain existing competences and business knowledge for new services, new service models and

offerings. Tietoevry’s success builds on attracting talent, skills renewal, business knowledge and the

maturity of the organization.

Inability to retain key employees and to recruit new talent with the required competence might have a

negative impact on the company’s performance. High employee turnover might also cause delays in

customer projects, leading to penalties or loss of customers.

To reduce these risks, Tietoevry implements unified delivery models across sites and offers its employees

challenging jobs, diverse development possibilities, social recognition and training opportunities as well as

interesting career paths through job rotation. Furthermore, the company has competitive compensation

packages, including a company-wide incentive system. Attractive recruitment tools, strategies, talent

management and competence development have a high strategic priority at Tietoevry. The company also

focuses on employer branding to build and strengthen Tietoevry’s image as an attractive employer both

internally and externally.

Credit risks

Changes in the general market environment and global economy can result in additional financial risks.

Credit risks might arise if customers or financial counterparties are unable to fulfil their commitments

towards Tietoevry.

Tietoevry's Credit Policy defines the principles for customer credit risk management to be applied in all

lines of business and controlled by a centralized credit management team. The risk assessment utilizes

external risk databases and past experience as a reference. Credit risk regarding financial counterparties

is managed through counterparty limits, as set out in the Tietoevry Treasury Policy.

Currency risks

Tietoevry’s currency transaction exposure arises from foreign trade, cash management and internal

funding in foreign currencies. Translating the balance sheets and income statements of Group companies

into euros creates a translation exposure.

Tietoevry’s Treasury Policy defines the principles for managing currency risks within the Group.

Interest rate risks

Tietoevry's interest rate risk consists mainly of short- and long-term loans, cash positions and derivative

contracts. Fluctuations in interest rates can impact Tietoevry's financial result or economic situation.

Tietoevry's Treasury Policy defines the principles for managing interest rate risks within the Group.

Funding and liquidity risks

Exceptional market conditions in the financial market might impose temporary limitations on raising new

funding and/or lead to an increase in funding costs.

Group Treasury monitors and manages Tietoevry’s funding structure and liquidity by maintaining a

sufficiently diversified loan portfolio and liquidity position. Analyses of alternative financing sources,

maturities and pricing for the company are continuously updated. Tietoevry’s financial risks are described

in full in the notes to the consolidated financial statements.

Tietoevry's Treasury Policy defines the principles for managing funding an liquidity risks within the Group.

Legal, regulatory and compliance risks

Tietoevry operates in multiple jurisdictions and is required to comply with a wide range of laws and

regulations enacted both at the European and national level, e.g. data protection and privacy laws, public

procurement, anti-corruption, anti-bribery, regulations restricting competitive trading conditions, health

and safety regulations, environmental regulations, labour regulations, competition regulations as well as

securities markets, corporate and tax laws. Failing to comply with the regulations may subject the

company to regulatory interventions or penalties, or a slowing or even halting of the development of its

activities.

Tietoevry functions as a data processor for customers and as a data controller for its internal personal

data. Failing to comply with the EU General Data Protection Regulation (GDPR) and its related judgement

on data transfers, Schrems II, might result in negative reputation, significant fines or other expenses if a

solution or service needs to be redesigned or redeveloped.

The risk is mitigated by company-wide privacy work. Tietoevry has a privacy governance model, which

ensures that a privacy organization and resources, continuous follow up and reporting, proactive privacy

development and active employee communication and training are in place. Privacy governance also

ensures that the GDPR requirements are appropriately embedded as practical rules and instructions into

corporate core business processes such as offering and software development, sales and marketing,

programme and project delivery, continuous service delivery and Tietoevry’s internal service.

Supply chain risk

Tietoevry's ability to perform its obligations to customers can be affected by a failure by any significant

supplier or partner to fulfil its obligations. Such failure may expose Tietoevry to liabilities and impact the

profitability of the company. The company has, for example, outsourced certain infrastructure operations,

and a potential failure in deliveries by a supplier could cause disturbances to customers. These risks are

managed by partner contract management, contract renewal negotiations and continuous evaluation of

partners' delivery quality.

Global pandemic: COVID-19

The COVID-19 pandemic still creates uncertainty in the market and for the company. During the year,

Tietoevry continued to identify, evaluate, and manage risks that could have significant financial, operating,

or reputational impact on the company both on a short- and long-term basis. Enterprise risk management,

crisis management and business continuity have been vital in handling the effect of the pandemic on our

employees, portfolio and customers. Tietoevry follows country-specific government and healthcare

guidelines for personal health and the prevention of the spread of COVID-19.

Geopolitical instability

Geopolitical instability might result in disruption in areas where Tietoevry operates. This instability might

impact the company's operations, despite careful scenario planning and mitigation plans to ensure

business continuity. Russia's war against Ukraine has impacted our business in Ukraine, and its status is

monitored with regular business continuity and crisis management meetings to help our employees and

ensure business continuity.

Climate change

Physical climate change impacts may pose a risk for both Tietoevry and its customers. Tietoevry strives to

mitigate its contribution to climate change by reducing carbon emissions and increasing energy efficiency

in its own operations. Assessments concerning proximity of hazards such as rivers, rail lines and airports,

are part of the prospecting prior to any new construction of offices or datacentres, and back-up centres

ensure continuity of customer operations also in case of severe climate change implications. The ability to

mitigate the impacts and adapt to climate change is becoming an increasingly important factor impacting

customers’ decision making. Tietoevry can help its customers to reduce their carbon emissions through its

technology solutions and facilitate customers’ transition to a low-carbon and circular economy.

Shares and shareholders

Tietoevry’s issued and registered share capital amounts to EUR 76 555 412.00 and on 31 December, the

number of shares totalled 118 425 771. Tietoevry’s shares have no par value and their book counter value

is one euro. The company's shares are listed on NASDAQ in Helsinki and Stockholm and Oslo Børs. The

company has one class of shares, with each share conferring equal dividend rights and one vote.

The company had around 61 750 registered shareholders at the end of 2022 based on the ownership

records of the Finnish, Swedish and Norwegian central securities depositories. Tietoevry received the

following flagging announcements during the year:

On 10 February, Silchester International Investors LLP announced that its holding had increased to 5 939

679 shares, representing 5.02% of the total number of shares.

On 31 December, Tietoevry had one shareholder holding 10% or more of the shares: Solidium Oy.

In February, Tietoevry purchased 145 000 own shares (0.12% of the total number of shares) in trading

organized by Nasdaq Helsinki Ltd. The average purchase price was EUR 25.3516 per share. Related to the

company’s share-based reward plans, a total of 140 119 shares held by Tietoevry (0.12% of the total

number of shares) were transferred to the participants of the plan during the second quarter. At the end of

the year, the number of shares in the company’s or its subsidiaries’ possession totalled 12 468,

representing 0.01% of the total number of shares and voting rights. The number of outstanding shares,

excluding the treasury shares, was 118 413 303.

The members of the Board of Directors, the President and CEO and their close associates together held

0.10% of the shares and votes registered in the book-entry system on 31 December 2022. The President

and CEO is also participating in the company’s long-term share-based incentive plans and potential

rewards will be paid partly in Tietoevry shares. As the number of additional shares related to these

incentives is dependent on the company’s performance, these are not included in this aggregate number.

The company’s Articles of Association include a restriction on voting at the Annual General Meeting, where

no-one is allowed to vote with more than one-fifth of the votes represented at the meeting. The Articles of

Association are available at www.tietoevry.com/investors.

Share-based incentive plans

Tietoevry has the following active share-based incentive plans: a Performance Share Plan 2020, 2021 and

2022 and a Restricted Share Plan 2020, 2021 and 2022. The potential rewards will be paid partly in the

company’s shares and partly in cash in 2023, 2024 and 2025, respectively. The share rewards to be

delivered to the participants will consist of shares to be acquired from the market and treasury shares.

Thus, no new shares will be issued in connection with the plans. The rewards to be paid on the basis of the

plans correspond to the value of an approximate maximum total of 3 060 000 Tietoevry shares (including

the proportion to be paid in cash). On 31 December, the value of granted and unvested share plans

corresponded to 2 466 208 shares. The company has not issued any bonds with warrants and does not

have any stock option programmes.

Board authorizations

The 2022 Annual General Meeting authorized the Board of Directors to decide on the repurchase of the

company's own shares. The amount of own shares to be repurchased shall not exceed 11 800 000 shares,

which currently corresponds to approximately 10% of all the shares in the company. The authorization is

intended to be used to develop the company’s capital structure. The Board of Directors was also

authorized to decide on the issuance of shares as well as on the issuance of option rights and other special

rights. The amount of shares to be issued based on the authorization (including shares to be issued based

on the special rights) shall not exceed 11 800 000 shares, which currently corresponds to approximately

10% of all the shares in the company.


	2022	2021	2020	2019	2018
Number of shares
Number of shares	118 425 771	118 425 771	118 425 771	118 425 771	74 109 252
Outstanding shares
At year end	118 413 303	118 418 184	118 414 793	118 253 526	73 826 349
Average	118 405 657	118 408 223	118 378 269	77 193 387	73 809 855

Share capital at year end, EUR	76 555 412	76 555 412	76 555 412	76 555 412	76 555 412

Per share data
Earnings per share, EUR
Basic	1.59	2.46	0.8	1.02	1.67
Diluted	1.59	2.46	0.8	1.02	1.66
Equity per share, EUR	14.52	15.38	13.73	14.27	6.54

Share price performance and trading volumes
NASDAQ Helsinki
Highest price of share, EUR	27.94	30.46	31.32	29.06	30.74
Lowest price of share, EUR	21.06	25.42	17.26	21.40	22.86
Average price of share, EUR	24.86	27.26	24.42	25.37	27.56
Turnover, number of shares	62 036 948	78 772 407	77 150 210	31 439 512	29 333 439
Turnover, %	52.4	66.5	65.1	26.5	39.6


	2022	2021	2020	2019	2018
Market capitalization, EUR million	3 140.7	3 254.3	3 180.9	3 282.8	1 747.5

Dividends
Dividend, EUR 1 000	171 699	165 785	156 308	75 190	103 465
Dividend per share, EUR	1.45	1.40	1.32	0.64	1.45
Payout ratio, %	91.0	56.8	165.3	62.3	86.8

Price-weighted ratios
NASDAQ Helsinki
Price per earnings ratio (P/E)	17	11	34	27	14
Dividend yield, %	5.5	5.1	4.9	4.6	6.1

Major shareholders on 31 December 2022


	Shares	%
1 Solidium Oy	12 857 918	10.9
2 Cevian Capital Partners Ltd1)	9 381 731	7.9
3 Incentive Investment Funds ICAV2)	6 041 221	5.1
4 Silchester International Investors LLP3)	5 939 679	5.0
5 Ilmarinen Mutual Pension Insurance Company	1 927 095	1.6
6 Elo Mutual Pension Insurance Company	1 484 000	1.3
7 The State Pension fund	1 100 000	0.9
8 Nordea funds	1 081 997	0.9
9 Evli funds	938 231	0.8
10 Swedbank Robur fonder	685 000	0.6
Top 10 shareholders total	41 436 872	35.0
- of which nominee registered	22 047 631	18.6

Nominee registered other	49 103 791	41.5
Others	27 885 108	23.5
Total	118 425 771	100.0

Based on the ownership records of Euroclear Finland Oy, Euroclear Sweden AB and Norwegian Central

Securities Depository (VPS).

1) Based on the ownership records of Euroclear Finland Oy, Cevian Capital Partners Ltd's holding on 31 August 2022 was 9 381 731 shares,

representing 7.9% of shares and voting rights.

2) On 21 September 2021, Incentive AS announced that the holding of Incentive Investment Funds ICAV was 6 041 221 shares, representing

5.1% of the shares.

3) On 10 February 2022, Silchester International Investors LLP has announced that its holding has increased to 5 939 679 shares, representing

5.02% of the total number of shares.

Number of shares


	Shareholders		Shares
	No	%	No	%
1–100	25 628	53.2	1 159 657	1.0
101–500	15 550	32.3	3 858 554	3.3
501–1 000	3 588	7.4	2 726 903	2.3
1 001–5 000	2 821	5.9	5 847 478	4.9
5 001–10 000	282	0.6	2 010 825	1.7
10 001–50 000	177	0.4	3 680 668	3.1
50 001–100 000	29	0.1	2 122 166	1.8
100 001–500 000	26	0.1	5 616 630	4.7
500 001–	14	0.0	91 392 330	77.2

Based on the ownership records of Euroclear Finland Oy.

Dividend

The distributable funds of the parent company amount to EUR 1 479.5 million, of which net profit for 2022

amounts to EUR 21.1 million. The Board of Directors proposes to the Annual General Meeting that for the

financial year ended on 31 December 2022, a dividend of EUR 1.45 per share be paid from the

distributable profits of the company. The Board of Directors proposes that the dividend shall be paid in

two instalments:

•The first dividend instalment of EUR 0.725 per share shall be paid to shareholders who on the

record date for the dividend payment on 27 March 2023 are recorded in the shareholders’

Verdipapirsentralen ASA (VPS).

•The second dividend instalment of EUR 0.725 per share shall be paid to shareholders who on

the record date for the dividend payment on 5 October 2023 are recorded in the shareholders’

registers.

The proposed dividend payout does not endanger the solvency of the company.

Events after the period

On 12 January, Tietoevry announced that Klaus Andersen has been appointed as CEO of Tietoevry Banking

effective 1 February 2023. Klaus Andersen will have the overall responsibility for the Banking business at

Tietoevry, including driving a successful outcome for the ongoing strategic review. In his role as CEO of

Tietoevry Banking, Klaus Andersen will report to Kimmo Alkio, CEO of Tietoevry Group, and will become a

member of the Group Executive Management Team.

On 31 January, Tietoevry published the proposals of the Shareholders’ Nomination Board to the Annual

General Meeting 2023, including election and remuneration of the members of the Board of Directors. The

Shareholders’ Nomination Board proposes that the current members of the Board of Directors Tomas

Franzén, Liselotte Hägertz Engstam, Harri-Pekka Kaukonen, Katharina Mosheim, and Endre Rangnes be

reelected and Bertil Carlsén, Elisabetta Castiglioni, Gustav Moss and Petter Söderström be elected as new

members. Timo Ahopelto, Angela Mazza Teufer and Niko Pakalén have informed that they are not available

for re-election.

In November 2022, Tietoevry announced that the company is conducting a strategic review of its Tietoevry

Transform and Tietoevry Connect as a combined business, including a potential sale or listing as a spin-off.

On 13 February, Tietoevry announced that Satu Kiiskinen has been appointed as Managing Director of the

businesses to be called Tietoevry Tech Services. Tietoevry Tech Services is planned to be operational and

report its financials, as a new reportable segment, from the second quarter of 2023. Tietoevry Tech

Services’ Managing Director appointment becomes effective 1 April.

Full-year outlook for 2023

Tietoevry expects its organic1) growth to be 5% to 7% (revenue in 2022: EUR 2 928.1 million).

The company estimates its full-year adjusted operating margin2) (adjusted EBITA) to be 13.0–13.5% (13.0%

in 2022).

1) Adjusted for currency effects, acquisitions and divestments.

2) Adjustment items include restructuring costs, capital gains/losses, impairment charges and other items affecting comparability.

Financial calendar 2023

23 MarchAnnual General Meeting

Tietoevry will publish three interim reports in 2023:

4 MayInterim report 1/2023 (8.00 a.m. EET)

21 JulyInterim report 2/2023 (8.00 a.m. EET)

26 October Interim report 3/2023 (8.00 a.m. EET)

Key figures

Calculation of key figures and alternative performance measures

Tietoevry presents certain financial measures, which, in accordance with the “Alternative Performance

Measures” guidance issued by the European Securities and Markets Authority, are not accounting

measures defined or specified in IFRS and are, therefore, considered alternative performance measures.

Tietoevry believes that alternative performance measures provide meaningful supplemental information to

the financial measures presented in the consolidated financial statements prepared in accordance with

IFRS and increase the understanding of the profitability of Tietoevry’s operations. In addition, they are seen

as useful indicators of the Group's financial position and ability to obtain funding. Alternative performance

measures are not accounting measures defined or specified in IFRS and, therefore, they are considered

non-IFRS measures, which should not be viewed in isolation or as a substitute to the IFRS financial

measures.


Adjusted earnings per share	=	Net profit for the period excluding adjustment items, amortization of acquisition-related intangible assets and related tax impact per country
Adjusted earnings per share	=	Weighted average number of shares

Adjustment items	=	Restructuring costs + capital gains/losses + impairment charges + other items affecting comparability


Operating profit (EBIT)	=	Net profit + interests + taxes

Operating margin (EBIT), %	=	Operating profit (EBIT)
Operating margin (EBIT), %	=	Revenue

Adjusted operating profit (EBITA)	=	Operating profit (EBITA) + adjustment items

Adjusted operating margin (EBITA), %	=	Adjusted operating profit (EBITA)
Adjusted operating margin (EBITA), %	=	Revenue




Equity per share	=	Total equity
Equity per share	=	Number of shares at the year-end

Capital expenditure	=	Acquisitions of intangible assets and property, plant and equipment

Acquisitions	=	Acquisitions of subsidiaries and business operations, net of cash acquired

Return on equity, 12-month rolling, %	=	Profit before taxes and non-controlling interests – income taxes	* 100
Return on equity, 12-month rolling, %	=	Total equity (12-month average)

Return on capital employed, 12-month rolling, %	=	Profit before taxes + interest and other financial expenses	* 100
Return on capital employed, 12-month rolling, %	=	Total assets – non-interest-bearing liabilities (12-month average)

Equity ratio, %	=	Total equity	* 100
Equity ratio, %	=	Total assets – advance payments

Interest-bearing net debt	=	Interest-bearing liabilities – interest-bearing receivables – cash and cash equivalents
Interest-bearing net debt	=

Net debt/EBITDA	=	Interest-bearing net debt
Net debt/EBITDA	=	EBITDA (12-month average)

Gearing, %	=	Interest-bearing net debt	* 100
Gearing, %	=	Total equity

Adjusted operating profit (EBITA) by segment


EUR million	2022	2021	Change %
Tietoevry Create	116.3	99.6	17
Tietoevry Banking	72.0	60.3	19
Tietoevry Care	72.5	69.6	4
Tietoevry Industry	46.0	50.8	-9
Tietoevry Transform	36.8	43.9	-16
Tietoevry Connect	62.4	66.3	-6
Non-allocated costs	-26.8	-22.8	18
Adjusted operating profit (EBITA)	379.2	367.8	3

Adjusted operating margin (EBITA) by segment


%	2022	2021	Change pp
Tietoevry Create	13.7	13.2	1
Tietoevry Banking	13.8	12.7	1
Tietoevry Care	31.3	31.4	0
Tietoevry Industry	16.9	16.7	0
Tietoevry Transform	7.8	9.4	-2
Tietoevry Connect	7.1	7.3	0
Adjusted operating margin (EBITA)	13.0	13.0	0

Reconciliation of adjusted operating profit (EBITA)


EUR million	2022	2021
Operating profit (EBIT)	266.5	382.0
+ Amortization on intangible assets recognized at fair value from acquisitions	46.7	47.3
Adjustment items:
+ Restructuring costs	12.6	7.1
- Capital gains	-1.1	-104.0
+ Strategic reviews	2.6	—
+/- Other M&A related items	1.7	1.0
+ Tietoevry Connect performance improvement programme	31.0	—
+ War in Ukraine and exit from Russia	13.3	—
+ Tietoevry Integration	9.2	25.8
+/- Other items1)	-3.3	8.6
Adjusted operating profit (EBITA)	379.2	367.8

1) Costs related to new strategy implementation, insurance compensation, settlement compensation and an impairment loss related to a

terminated customer project in Tietoevry Banking, and other minor non-recurring items. See also notes 5, 6 and 7.

CONSOLIDATED FINANCIAL STATEMENTS (IFRS)

Income statement


EUR million	Note	2022	2021
Revenue	5, 6	2 928.1	2 823.4
Other operating income	7	50.2	125.1
Materials and services1)		-546.5	-513.5
Employee benefit expenses	8	-1 597.2	-1 527.0
Depreciation and amortization	11, 12, 20	-162.3	-170.1
Impairment losses	11, 12, 20, 28	-20.2	-5.3
Other operating expenses1)	7	-386.7	-352.0
Share of results in joint ventures	28	1.0	1.5
Operating profit (EBIT)		266.5	382.0

Interest and other financial income	21	3.9	1.9
Interest and other financial expenses	21	-26.2	-25.3
Net foreign exchange gains/losses	21	-1.4	-4.8
Profit before taxes		242.8	353.8

Income taxes	9	-54.2	-62.2
Net profit for the financial year		188.6	291.6

Net profit for the financial year attributable to
Owners of the Parent company		188.6	291.6
Non-controlling interest		—	0.0
		188.6	291.6
Earnings per share attributable to owners of the Parent company, EUR per share	10
Basic		1.59	2.46
Diluted		1.59	2.46

1) Tietoevry has clarified its accounting policy for costs related to shared platforms in infrastructure services. See note 7.

Statement of other

comprehensive income


EUR million	Note	2022	2021
Net profit for the financial year		188.6	291.6
Items that may be reclassified subsequently to profit or loss
Translation differences	25	-126.7	60.2
Items that will not be reclassified subsequently to profit or loss
Remeasurements of the defined benefit plans	15	2.0	-1.9
Income tax related to remeasurements	9	-0.4	0.4
Total comprehensive income		63.5	350.3

Total comprehensive income attributable to
Owners of the Parent company		63.5	350.3
Non-controlling interest		—	0.0
		63.5	350.3

Notes are an integral part of these consolidated financial statements.

Statement of financial position

Assets


EUR million	Note	31 Dec 2022	31 Dec 2021
Non-current assets
Goodwill	11, 28	1 846.5	1 943.7
Other intangible assets	11	336.7	387.9
Property, plant and equipment	12	97.2	87.4
Right-of-use assets	20	201.9	192.4
Interests in joint ventures	28	14.2	16.7
Deferred tax assets	9	14.6	19.1
Defined benefit plan assets	15	0.6	0.7
Finance lease receivables	20, 22	0.2	2.7
Other financial assets at amortized cost	22	15.0	15.7
Other financial assets at fair value	22	0.6	0.6
Other non-current receivables	14	20.4	35.4
Total non-current assets		2 548.0	2 702.3
Current assets
Inventories	13	5.6	7.2
Trade and other receivables	14	547.8	517.0
Financial assets at fair value	22	23.6	23.3
Finance lease receivables	20	2.4	2.9
Current tax assets		16.8	10.8
Cash and cash equivalents	24	249.7	323.8
Total current assets		845.8	884.9

Total assets		3 393.8	3 587.2

Equity and liabilities


EUR million	Note	31 Dec 2022	31 Dec 2021
Equity
Share capital	25	76.6	76.6
Share premium and other reserves	25	39.3	41.5
Invested unrestricted equity reserve	25	1 203.5	1 203.5
Retained earnings	25	399.9	499.6
Total equity		1 719.2	1 821.1
Non-current liabilities
Loans	19, 22	639.4	731.6
Lease liabilities	19, 20, 22	155.9	144.0
Deferred tax liabilities	9	10.7	9.1
Provisions	16	2.6	2.8
Defined benefit obligations	15	28.4	38.7
Other non-current liabilities	17	21.0	34.7
Total non-current liabilities		858.0	960.8
Current liabilities
Trade and other payables	17	616.7	672.3
Financial liabilities at fair value	22	2.0	0.8
Current tax liabilities		13.9	18.5
Loans	19, 22	110.6	31.5
Lease liabilities	19, 20, 22	54.1	62.5
Provisions	16	19.1	19.6
Total current liabilities		816.5	805.3

Total equity and liabilities		3 393.8	3 587.2

Notes are an integral part of these consolidated financial statements.

Statement of cash flows


EUR million	Note	2022	2021
Cash flow from operating activities
Net profit for the financial year		188.6	291.6
Adjustments
Depreciation, amortization and impairment losses	11, 12, 20, 28	182.5	175.5
Profit/loss on sale of property, plant and equipment, subsidiaries and business operations		7.8	-104.1
Share of results in joint ventures	28	-1.0	-1.5
Other adjustments		-7.5	0.2
Net financial expenses	21	23.7	28.1
Income taxes	9	54.2	62.2
Change in net working capital
Change in current receivables		-41.7	-8.2
Change in current non-interest-bearing liabilities		-40.4	-18.7
Cash generated from operating activities before interests and taxes		366.2	425.2
Interests received		3.7	1.8
Interests paid		-22.1	-23.2
Other financial income received		25.3	24.0
Other financial expenses paid		-37.7	-21.9
Dividends received	28	1.4	2.1
Income taxes paid		-59.8	-40.6
Cash flow from operating activities		276.9	367.5

Notes are an integral part of these consolidated financial statements.


EUR million	Note	2022	2021
Cash flow from investing activities
Capital expenditure	11, 12	-95.4	-80.8
Disposal of subsidiaries and business operations, net of cash disposed	26	-0.3	179.5
Proceeds from sale of property, plant and equipment		0.5	0.8
Change in loan receivables		3.2	0.3
Cash flow used in/from investing activities		-92.0	99.8

Cash flow from financing activities
Dividends paid		-165.8	-156.3
Repurchase of own shares		-3.7	-3.8
Repayments of lease liabilities	19, 20	-66.3	-73.1
Other short-term financing, net	19	-1.5	-19.7
Repayments of long-term borrowings	19	-13.1	-145.8
Cash flow used in financing activities		-250.4	-398.8

Change in cash and cash equivalents		-65.4	68.5

Cash and cash equivalents at the beginning of period	24	323.8	252.3
Foreign exchange differences		-8.6	3.0
Change in cash and cash equivalents		-65.4	68.5
Cash and cash equivalents at the end of period		249.7	323.8

Statement of changes in shareholders' equity


		Owners of the Parent company
EUR million	Note	Share capital	Share premium and other reserves	Own shares	Cumulative translation differences	Invested unrestricted equity reserve	Retained earnings	Total equity
31 Dec 2021		76.6	41.5	-0.2	-66.0	1 203.5	565.8	1 821.1

Comprehensive income
Net profit for the period		—	—	—	—	—	188.6	188.6
Other comprehensive income, net of tax
Remeasurements of the defined benefit plans, net of tax		—	—	—	—	—	1.6	1.6
Translation differences		—	-2.2	—	-127.5	—	2.9	-126.7
Total comprehensive income		—	-2.2	—	-127.5	—	193.2	63.5

Transactions with owners
Contributions and distributions
Share-based incentive plans	8	—	—	3.6	—	—	0.5	4.1
Dividends		—	—	—	—	—	-165.8	-165.8
Repurchase of own shares		—	—	-3.7	—	—	—	-3.7
Total transactions with owners		—	—	-0.1	—	—	-165.3	-165.4

31 Dec 2022		76.6	39.3	-0.3	-193.5	1 203.5	593.7	1 719.2


		Owners of the Parent company
EUR million	Note	Share capital	Share premium and other reserves	Own shares	Cumulative translation differences	Invested unrestricted equity reserve	Retained earnings	Total	Non- controlling interest	Total equity
31 Dec 2020		76.6	42.1	-0.3	-133.8	1 203.5	438.2	1 626.2	0.0	1 626.2

Comprehensive income
Net profit for the financial year		—	—	—	—	—	291.6	291.6	0.0	291.6
Other comprehensive income, net of tax
Remeasurements of the defined benefit plans, net of tax		—	—	—	—	—	-1.6	-1.6	—	-1.6
Translation differences		—	-0.6	—	67.8	—	-7.0	60.2	—	60.2
Total comprehensive income		—	-0.6	—	67.8	—	283.0	350.3	0.0	350.3

Transactions with owners
Contributions and distributions
Share-based incentive plans	8	—	—	3.9	—	—	1.1	5.0	—	5.0
Dividends		—	—	—	—	—	-156.3	-156.3	0.0	-156.3
Repurchase of own shares		—	—	-3.8	—	—	—	-3.8	—	-3.8
Changes in ownership interests
Acquisition of non-controlling interest without change in control		—	—	—	—	—	-0.3	-0.3	0.0	-0.3
Total transactions with owners		—	—	0.1	—	—	-155.4	-155.3	0.0	-155.4

31 Dec 2021		76.6	41.5	-0.2	-66.0	1 203.5	565.8	1 821.1	—	1 821.1

Notes are an integral part of these consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(IFRS)

1. Corporate information

Tietoevry Corporation (business identity code 0101138-5) is a Finnish public limited liability company

organized under the laws of Finland. It is domiciled in Espoo and the address of the Group head office is

Keilalahdentie 2-4, 02101 Espoo, Finland. The company is listed on NASDAQ in Helsinki and Stockholm and

the Oslo Stock Exchange.

Tietoevry is a leading Nordic digital services company serving clients across Sweden, Norway and Finland

and offering software, IT solutions and consulting services, as well as operations of IT systems. In addition,

the Group offers outsourcing services and services related to data communication and data security.

The Board of Directors approved these consolidated financial statements on 14 February 2023. According

to the Limited Liability Companies Act, the shareholders have the right at the Annual General Meeting to

either approve, amend or reject the consolidated financial statements after the publication.

BASIS OF PREPARATION

The accounting policies applied to the consolidated financial statements as a whole are described

below. A more detailed description of accounting policies and significant estimates related to specific

disclosures are presented in conjunction with each note with the aim of providing understanding of

each accounting area.

2. Principal accounting policies

These consolidated financial statements of Tietoevry have been prepared in accordance with International

Financial Reporting Standards (IFRS) and IFRIC interpretations as adopted by the European Union. The

financial statements also comply with Finnish accounting principles and corporate legislation

complementing IFRS. The consolidated financial statements are presented in millions of euros and have

been prepared under the historical cost convention, unless otherwise stated in these accounting policies.

All figures presented have been rounded, and consequently the sum of individual figures can deviate from

the presented sum figure. Key figures have been calculated using exact figures.

Consolidation principles

The consolidated financial statements include the Parent company Tietoevry Corporation and all

subsidiaries over which the Parent company has directly or indirectly more than one half of the voting

rights, or the Parent company is otherwise in control of the company. Control exists when the company is

exposed to, or has rights to, variable returns from its involvement with the entity and can affect those

returns through its power over the entity.

Subsidiaries are consolidated from the date on which control is achieved until the date on which control

ceases by using the acquisition method. Intra-group receivables, payables and transactions including

dividends and internal profit are eliminated on consolidation. When necessary, subsidiaries’ accounting

policies have been aligned to correspond to the Group’s accounting policies. The result for the period and

items of other comprehensive income are allocated to the equity holders of the company and non-

controlling interests and presented in the income statement and statement of other comprehensive

income. Non-controlling interests are shown separately under shareholders' equity.

Foreign currency transactions

Items included in the financial statements of each of the Group's entities are measured using the currency

of the primary economic environment in which the entity operates (the functional currency). The

consolidated financial statements are presented in euros, which is the Parent company’s functional and

presentation currency.

Foreign currency transactions are translated into local functional currencies using the exchange rates

prevailing on the transaction date. The foreign currency monetary items are translated using period-end

exchange rates. The foreign currency non-monetary items held at fair value are translated into the

functional currency using the exchange rate prevailing at the date when the fair value was determined or

remeasured. Other non-monetary items are recognized at the exchange rate prevailing on the transaction

date.

For internal, long-term loans to subsidiaries, when classified as net investment in foreign operation, all

related unrealized foreign exchange gains and losses are recognized in profit or loss in the separate

financial statements. In the consolidated financial statements, such exchange differences are recognized

initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net

investment.

Other foreign exchange gains and losses related to business operations are included in operating profit.

Foreign exchange gains and losses associated with financing are recognized in finance income and

expenses.

For Group entities whose functional and presentation currency is other than the euro, the income

statements and statements of financial position are translated into the Group presentation currency as

follows:

•assets and liabilities for each statement of financial position presented are translated using the

exchange rates prevailing at the reporting date;

•income and expenses for each income statement are translated using the average exchange

rates of the reporting period;

•all resulting translation differences are recognized in other comprehensive income.

When a subsidiary is sold, any translation differences are recognized in the consolidated income

statement as part of the gain or loss on the sale.

Goodwill and fair value adjustments to the carrying amounts of assets and liabilities arising on the

acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated into

euro using the exchange rates prevailing at the reporting date. Translation differences arising are

recognized in other comprehensive income.

3. Adoption of new and amended IFRS standards and interpretations

The following amendments to IFRS standards became effective on 1 January 2022. They have not had any

material impact on the disclosures or on the amounts reported in these financial statements.

•Amendments to IFRS 3 Reference to the Conceptual Framework

•Amendments to IAS 16 Property, Plant and Equipment—Proceeds before Intended Use

•Amendments to IAS 37 Onerous Contracts – Cost of Fulfilling a Contract

•Annual Improvements to IFRS Standards 2018–2020 Cycle Amendments to IFRS 1, IFRS 9, IFRS

16 and IAS 41

New and revised IFRS standards in issue but not yet effective

At the date of authorization of these financial statements, the Group has not applied the following new and

revised IFRS standards that have been issued but are not yet effective and had not yet been adopted by

the EU (marked with *). Management do not expect the adoption of these to have a material impact on the

Group's financial statements in the future reporting periods. Those will be adopted as of their effective

date.

•Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its

Associate or Joint Venture

•Amendments to IAS 1 Classification of Liabilities as Current or Non-current*

•IFRS 17 Insurance Contracts

•Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting Policies*

•Amendments to IAS 8 – Definition of Accounting Estimates*

•Amendments to IAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single

Transaction*

•Amendments to IFRS 16 – Definition of lease liability in a sale-and-leaseback agreement*

4. Use of judgements and estimates

The preparation of the financial statements in accordance with IFRS requires management to make

estimates and assumptions that affect the amounts reported and disclosed at the reporting date. Although

these estimates are based on management's best knowledge of current events and actions, actual results

may differ from the estimates. In addition, management judgement is required in the application of

accounting policies, especially when IFRS standard has alternative accounting, valuation and presentation

methods.

Management believes that the following accounting principles represent those matters, where

management judgement has the most significant effect on the amounts recognised or where different

estimate could result in significant adjustment to reported carrying amounts within the next financial year.

These are described in more detail in the related notes.


Accounting principle	Estimates made	Judgement applied	Note
Valuation of goodwill	X	X	11
Provisions	X		16
Deferred taxes	X		9

PERFORMANCE FOR THE YEAR

This section comprises disclosures related to the performance of the Group, including segment

information, sources of revenue, other operating income and expenses, as well as information on

employee benefits, taxes and earnings per share.

5. Segment information

Tietoevry has established six specialized end-to-end businesses which form the operating segments

from 1 January 2022: Tietoevry Create, Tietoevry Banking, Tietoevry Care, Tietoevry Industry, Tietoevry

Transform and Tietoevry Connect. The comparative segment information for 2021 has been restated

accordingly. As part of Tietoevry’s new strategy, the group introduced internal trade at market terms

between the businesses (segments).


ACCOUNTING POLICIES
The operating segments are reported in a manner consistent with the internal reporting provided to the Group Executive Management, which has been identified as Tietoevry’s chief operating decision maker being responsible for allocating resources and assessing performance of the operating segments as well as deciding on strategy.
The Group Executive Management assesses the profitability of segments principally on the basis of adjusted operating profit (EBITA). Operating profit (EBIT) is, however, also an essential measure and is disclosed in this segment note as it is most consistent with the result reported in accordance with IFRS. Transactions between the segments are made on a market-terms basis.
Eliminations include internal revenue between operating segments and Group function sales of internal services to the business. Non-allocated costs relate to Global management and Support functions and are shown separately in the operating profit (EBIT).

Tietoevry Create

Tietoevry Create is a leading accelerator for digital innovation and cloud-native development, providing

business advisory and design, data engineering and specialized software R&D services across a range of

industry sectors. It is a high-growth, market-leading vendor in the Nordics and expanding in international

markets, which currently represent over 40% of Tietoevry Create revenue. Tietoevry Create has almost

9 000 employees in competence centres in Europe, India and China – they leverage their expertise and

the latest technologies to support clients from nearly 20 countries.

Tietoevry Banking

Tietoevry Banking is modernizing the financial sector in the Nordics and globally with modular, pre-

integrated Banking-as-a-Service and a full suite of market-leading, scalable software and services within

domains such as payments, cards, wealth management, financial crime prevention and credit. Built by

unmatched industry expertise, the solutions help accelerate growth through digital customer engagement,

real-time operational efficiency and regulatory compliance. Tietoevry banking's team consists of around

3 500 specialists.

Tietoevry Care

Tietoevry Care offers modular, open and interoperable software for customers in the health and social

care sectors to enhance the care experience across the Nordics. Using advanced analytics and embedded

AI, it provides decision support and process automation. Demand for software and services in healthcare

segments such as hospitals, primary and secondary care, as well as elderly, home and family care is

increasing rapidly on the back of the growing demand for better care outcomes, improved citizen

experience, higher staff satisfaction and increased efficiency. Tietoevry Care employs over 1 400

specialists.

Tietoevry Industry

Tietoevry Industry provides industry-specific software and data platform services for customers looking to

enhance their critical processes – with software increasingly delivered as a service. Product areas include

software for case management, pulp & paper, education, and energy and utilities. Furthermore, data

platform services deliver data in processes such as billing & invoicing and industry messaging. Its team

consists of close to 1 700 specialists with extensive industry knowledge and in-depth expertise of utilizing

data to create insights and add value across core business and operational processes.

Tietoevry Transform

Tietoevry Transform drives enterprise-wide transformation for customers across their business processes

and applications by means of automation, cloud and data capabilities. It helps customers improve

enterprise agility and reduce time to market. Its team of over 3 000 experts provides full stack IT services

across modernizing existing IT infrastructure, the renewal of core business applications, next-generation

services as well as data and AI services for selected large and mid-sized customers in both public and

private enterprises in the Nordics.

Tietoevry Connect

Tietoevry Connect is a multi-cloud platform provider with a full range of infrastructure choices at scale –

aiming to ensure resilience, security, and compliance for customers' business. Its business comprises cloud

platforms and security services, traditional infrastructure services, end-user services and hardware/

software reselling. It is the leading provider of managed services in the Nordics, and the partner of choice

for businesses looking to drive and achieve cloud adoption at scale. Its team of almost 5 000 experts

delivers services to customer operations in more than 90 countries.

Disaggregation of revenue by segment


EUR million	2022	2021	Change %
Tietoevry Create	847.9	756.3	12
Tietoevry Banking	521.3	475.8	10
Tietoevry Care	231.4	221.9	4
Tietoevry Industry	272.6	303.4	-10
Tietoevry Transform	470.6	467.9	1
Tietoevry Connect	879.9	907.5	-3
Eliminations	-295.6	-309.5	-4
Group total	2 928.1	2 823.4	4

Operating profit (EBIT) by segment


EUR million	2022	2021	Change %
Tietoevry Create	90.2	88.6	2
Tietoevry Banking	39.8	38.1	5
Tietoevry Care	72.2	68.3	6
Tietoevry Industry	51.9	149.8	-65
Tietoevry Transform	31.6	40.8	-23
Tietoevry Connect	21.1	38.5	-45
Non-allocated costs	-40.2	-42.1	-5
Group total	266.5	382.0	-30

For more information, see notes 6 and 11.

Operating margin (EBIT) by segment


%	2022	2021	Change pp
Tietoevry Create	10.6	11.7	-1
Tietoevry Banking	7.6	8.0	0
Tietoevry Care	31.2	30.8	0
Tietoevry Industry	19.0	49.4	-30
Tietoevry Transform	6.7	8.7	-2
Tietoevry Connect	2.4	4.2	-2
Operating margin (EBIT)	9.1	13.5	-4

Customer revenue from fixed-price contracts by segment


EUR million	2022	2021
Tietoevry Create	18.3	16.0
Tietoevry Banking	21.8	25.2
Tietoevry Care	3.5	1.0
Tietoevry Industry	2.5	5.0
Tietoevry Transform	13.8	7.1
Tietoevry Connect	1.8	6.1
Group total	61.6	60.5

No single customer represents 10% or more of revenue.

Customer revenue by country


EUR million	2022	2021	Change %
Finland	640.2	639.2	0
Sweden	947.3	947.2	0
Norway	1 016.7	981.3	4
Other	323.9	255.7	27
Group total	2 928.1	2 823.4	4

The distribution of revenue by country is based on the invoicing country.

Non-current assets by country


EUR million	31 Dec 2022	31 Dec 2021	Change %
Finland	119.0	85.2	40
Sweden	120.1	117.6	2
Norway	368.4	433.5	-15
Other	28.3	31.3	-10
Group total	635.8	667.7	-5

Non-current assets include property, plant and equipment, right of use assets and intangible assets

excluding goodwill.

Personnel by segment


	End of period				Average1)
	2022	2021	Change %	Share %	2022
Tietoevry Create	8 989	8 653	4	37	8 871
Tietoevry Banking	3 454	3 495	-1	14	3 500
Tietoevry Care	1 480	1 346	10	6	1 425
Tietoevry Industry	1 682	1 819	-8	7	1 703
Tietoevry Transform	3 271	3 395	-4	13	3 381
Tietoevry Connect	4 766	4 994	-5	20	4 832
Group functions	678	687	-1	3	689
Group total	24 320	24 389	0	100	24 401

1) 2021 comparative information for the average number of personnel by segment is not available due to the implementation of the group's new

organization structure as of 1 January 2022.

Personnel by country


	End of period				Average
	2022	2021	Change %	Share %	2022	2021
Sweden	4 029	4 286	-6	17	4 097	4 321
Norway	3 990	4 274	-7	16	4 102	4 373
Finland	3 134	3 130	0	13	3 151	3 102
India	4 499	4 592	-2	18	4 601	4 362
Czech Republic	2 694	2 505	8	11	2 631	2 478
Ukraine	2 037	2 123	-4	8	2 135	1 996
Latvia	1 072	999	7	4	1 041	970
China	1 066	842	27	4	978	503
Poland	776	710	9	3	720	734
Other	1 023	928	10	4	947	985
Group total	24 320	24 389	0	100	24 401	23 824
Onshore countries	11 687	12 192	-4	48	11 869	12 296
Offshore countries	12 633	12 197	4	52	12 533	11 528
Group total	24 320	24 389	0	100	24 401	23 824

Depreciation by segment


EUR million	2022	2021	Change %
Tietoevry Create	6.7	8.0	-16
Tietoevry Banking	4.8	4.1	15
Tietoevry Care	0.9	0.7	31
Tietoevry Industry	0.6	1.0	-40
Tietoevry Transform	1.6	0.5	> 100
Tietoevry Connect	40.9	43.4	-6
Group functions	48.4	53.5	-10
Group total	103.8	111.2	-7

Amortization on other intangible assets by segment


EUR million	2022	2021	Change %
Tietoevry Create	0.1	0.3	-56
Tietoevry Banking	2.8	3.3	-17
Tietoevry Care	1.6	0.9	85
Tietoevry Industry	0.3	1.1	-73
Tietoevry Transform	0.2	0.1	70
Tietoevry Connect	6.4	4.1	54
Group functions	0.4	1.8	-79
Group total	11.7	11.6	1

Amortization of acquisition-related intangible assets by segment


EUR million	2022	2021	Change %
Tietoevry Create	10.1	10.5	-4
Tietoevry Banking	21.6	21.7	-1
Tietoevry Care	0.2	0.2	-4
Tietoevry Industry	6.2	6.3	-1
Tietoevry Transform	—	—	—
Tietoevry Connect	8.7	8.7	0
Group functions	—	—	—
Group total	46.7	47.3	-1

Impairment losses

In 2022, Tietoevry Banking reached a settlement with a customer following their decision to exit a Nordic

market and therefore to terminate an implementation project. Capitalized development work specific for

this customer was written-off resulting in an impairment loss of EUR 18.7 million. See also note 6.

In addition, Tietoevry Transform recognized an impairment loss of EUR 1.4 million for the joint venture

TietoIlmarinen, and bought the remaining 30% share of the company. As at 31 December, TietoIlmarinen is

consolidated as a 100% owned subsidiary. See also note 28.

6. Revenue

The business models of the Group consist of continuous services, software solutions, projects and

consulting. Revenue comprises the fair value for the sale of IT services and software licenses, net of

discounts and exchange rate differences.


ACCOUNTING POLICIES
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes consideration collected on behalf of third parties. The Group recognizes revenue when it transfers control of a good or service to a customer.
The Group typically provides customers with a variety of comprehensive services. The individual service delivery contracts are often structured under a common frame contract where general terms for the service delivery to the customer are defined. The content of the delivery, performance obligations and pricing, are defined in the service delivery contracts. Management judgement is used to determine the basis for the revenue recognition; either an individual service delivery contract or a group of combined contracts.
Revenue from service contracts is based on service volumes or time and materials and the performance obligations are recognized over the accounting period in which the services are rendered or project is delivered. The services are generally satisfied and the control transferred to the customer over time given that either the customer simultaneously receives and consumes the benefits provided by the Group, or the Group’s performance does not create an asset with an alternative use for the Group, in which case there is an enforceable right to payment for work completed to date.


In the majority of the businesses providing continuous services, time and material projects and consulting, the performance obligations satisfied are invoiced on a monthly basis. At the time of invoicing, a receivable is recognized by the Group as this represents the point in time at which the right to consideration becomes unconditional, as only the passage of time is required before payment is due. The standard payment term is 30 days according to the Group’s Credit Policy.
Goods, typically distinct licenses, that provide a right to use the software, are invoiced on delivery. The license revenue is recognized at a point in time when the license is delivered, the legal title has passed, the customer has accepted the license and has access to the licensed software. Distinct licenses, that provide a right to access the software, are recognized over the contract period. Contract assets or liabilities do not typically arise in the businesses described above.
For contracts comprising fixed-price projects, revenue is recognized based on the actual service provided by the reporting date as a proportion of the total services to be provided. This is determined based on the cost of actual labour hours spent relative to the total expected cost of labour hours, as it best reflects the transfer of control to the customer. Estimates of revenues, costs or progress towards completion are revised if circumstances change and any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known by the management. Invoicing and customer payments in the fixed-price projects follow the payment schedule defined in the customer contract. If the services rendered by the Group exceed the payment, a contract asset is recognized, and if the payments exceed the services rendered, a contract liability is recognized.
The customer contracts of the Group typically comprise several of the business models described above. The most appropriate presentation on how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors is considered to be the disaggregation of revenue by segment, presented in the segment information note 5. The disaggregation of customer sales from long-term fixed-price contracts by segment represents the revenue from contracts for which the risks are different compared to other contracts with customers.
Some contracts include delivery of hardware together with a variety of services from the Group. Hardware is usually provided by another service provider. The installation of hardware is simple, does not include an integration service from the Group and could be performed by another party. It is, therefore, accounted for as a separate performance obligation. In these contracts, Tietoevry acts as an agent, if the Group does not obtain control of the hardware provided by another party before it is transferred to the customer, or as a principal if the control is obtained.


Where the contracts include multiple performance obligations, the transaction price is allocated to each performance obligation based on the stand-alone selling prices, which are observable from the contracts and represent prices for services rendered in similar circumstances to similar customers. Revenue from contracts granting a discount retrospectively to the customer is recognized based on the price specified in the contract, net of the estimated discounts. Discounts are estimated based on management's experience of the earlier purchases of the customers under similar contracts. This estimation is regularly updated during the contract period. Revenue is only recognized to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
In settlement agreement cases, consideration paid to customers is reduced from revenue when a settlement agreement is signed with the customer. Consideration received from customers is recognized as revenue or other operating income depending on the facts and circumstances.
The Group grants assurance type of warranties which guarantee that the delivery complies with agreed specifications. These are accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
The Group does not have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. Consequently, the Group does not adjust any of the transaction prices for the time value of money.
The Group capitalizes material costs of set-up activities related to transition or implementation projects in the initial phase of continuous operating service contracts, when the criteria for capitalization according to IFRS 15 are met. Management judgement has been used when developing an internal guidance on what kind of tasks are defined as set-up activities in the Group. The set-up activities do not result in the transfer of a promised good or service and are not identified as a performance obligation to the customer. The capitalized costs of a contract are amortized during the period when the revenue for related continuous operating service contract is recognized.

Assets and liabilities related to contracts with customers


EUR million	Note	31 Dec 2022	31 Dec 2021	1 Jan 2021
Trade receivables	14	408.9	372.8	358.9
Contract assets	14	52.0	52.5	50.1
Contract liabilities, non-current1)	17	16.9	29.2	29.4
Contract liabilities, current1)	17	67.2	73.5	74.7

1) Tietoevry has aligned its presentation of contract liabilities by including advance payments and certain accruals related to customer

contracts. The comparative periods have been reclassified accordingly.

Decreases due to business disposals were EUR 1.7 (1.6) million in trade receivables, EUR 0.5 (6.1) million in

contract assets and EUR 1.1 (5.8) million in contract liabilities.

Revenue recognised from the opening value of contract liabilities was EUR 62.7 (67.1) million. This includes

the impact from the presentation alignment of contract liabilities as noted above.

In 2022, Tietoevry Banking reached a settlement with a customer following their decision to exit a Nordic

market and therefore to terminate an implementation project. Tietoevry received compensation of EUR

29.4 million, of which EUR 13.5 million was realized against unbilled revenue within contract assets and

EUR 15.9 million was recognized as Other operating income.

Order backlog

Transaction price allocated to all fully or partially unsatisfied performance obligations (order backlog)

amounted to EUR 3 327 (3 513) million at the end of the year. Of the backlog, 54% is expected to be

recognized as revenue during 2023. The order backlog includes all signed customer orders that have not

been recognized as revenue, including estimates of the value of consumption-based contracts.

Assets recognized from costs to fulfil a contract


EUR million	2022	2021
Capitalized set-up costs on 31 Dec	11.8	21.2
Amortization of capitalized set-up costs	8.4	6.6

In the statement of financial position, capitalized set-up costs of EUR 6.8 (15.9) million are presented within

other non-current receivables and the current portion of EUR 4.9 (5.3) million in trade and other

receivables.

7. Other operating income and expenses

Other operating income includes income other than that associated with the principal activities of

Tietoevry, such as capital gains and foreign exchange gains on derivatives. Other operating expenses

mainly relates to information and communication technology and premises related costs as well as

professional services such as consulting and marketing. Costs related to shared platforms in infrastructure

services are recognized in other operating expenses when they are not directly linked to any specific

customer.


ACCOUNTING POLICIES
Government grants
Government grants are recognized as other operating income on a systematic basis over the periods necessary to match them with the related costs that they are intended to compensate.
Research and development costs
Research costs are expensed when incurred. Development costs related to major new software products are capitalized as intangible assets when it is probable that the development will generate future economic benefits for the Group, and certain criteria related to commercial and technological feasibility are met. Development costs comprise service and solution development focusing on, for example, industry-specific software, customer experience management and security services, as well as cloud services. Additionally, the costs for related internal development, e.g. automation in infrastructure services, are included in development costs.

Other operating income


EUR million	2022	2021
Gain on sale of tangible assets, subsidiaries and business operations	1.4	104.1
Change in fair value of derivatives	9.2	7.4
Joint venture management fees	1.3	1.6
Other1)	38.3	11.9
Total	50.2	125.1

1) In 2022,Tietoevry Banking reached a settlement with a customer following their decision to exit a Nordic market and therefore to terminate

an implementation project. Tietoevry received compensation of EUR 29.4 million, of which EUR 15.9 million was recognized as Other operating

income. See note 6. In addition, Tietoevry Industry received insurance compensation of EUR 12.3 million related to the ending of Tietoevry’s

SmartUtilities platform in 2020.

Other operating expenses


EUR million	2022	2021
Information and communication technology1)	231.1	238.0
Premises related costs	51.3	44.4
Professional services and marketing	43.0	42.5
Other operating expenses	61.1	27.0
Total	386.7	352.0

1) Tietoevry has clarified its accounting policy for costs related to shared platforms in infrastructure services. These costs are recognized in

other operating expenses when they are not directly linked to any specific customer. Due to the clarification, Tietoevry reclassified costs

between Materials and Services and Other operating expenses in the comparative periods.

Development costs

Tietoevry’s development costs amounted to approximately EUR 125 (127) million, representing 4.3% (4.5)

of the Group's revenue. Of these costs, EUR 37.2 (42.6) were capitalized. In 2022, the focus was on

Industry Software, especially solutions for Financial Services and Health & Care.

Fees to auditors


EUR million	2022	2021
Audit fees	1.3	1.3
Audit related	0.1	0.2
Tax advisory	0.1	0.1
Other services	0.4	0.2
Total	1.9	1.8

8. Employee expenses

Employee expenses consist of wages and salaries and related social costs. Tietoevry has also post-

employment benefit plans as well as share-based incentive plans for key employees. Termination benefits

refer to benefits arising from termination of employment, not performance of work.


ACCOUNTING POLICIES
Employee benefits are recognised in the period in which services are rendered by the employees. Termination benefits are recognised at the time an agreement between the Group and the employee is made and no future service is rendered by the employee in exchange for the benefits.
Share-based incentive plans
Tietoevry has share-based incentive plans for its key employees which are accounted for as equity- settled. The plans are valued at fair value based on the market price of Tietoevry shares at the grant date and recognized as an employee benefit expense during the vesting period with a corresponding entry in equity. At each reporting date, the number of shares that are expected to vest from the Group’s share-based incentive plans is revised. As part of this evaluation, the changes in the forecasted performance of the Group, the expected turnover of the personnel participating in the plans and other information impacting the number of shares to vest, is taken into consideration. Any adjustments to the initial estimates is recognized in profit or loss and a corresponding adjustment is made to equity.

Employee expenses


EUR million	2022	20212)
Wages and salaries1)	1 247.9	1 174.3
Post-employment benefits
Defined contribution plans	100.1	104.5
Defined benefit plans	-2.1	1.5
Other benefits	23.8	20.2
Other pay-related statutory social costs	219.7	217.8
Share-based payments	6.9	8.7
Other personnel expenses	0.8	0.0
Total	1 597.2	1 527.0

1) Includes termination benefits

2) Employee expenses have been reclassified between the above line items and comparative figures were updated accordingly.

Management remuneration


	2022		2021
EUR thousand	President and CEO	Leadership team	President and CEO	Leadership team
Salaries and benefits	853.5	3 079.9	842.3	3 938.1
Bonuses1)	698.5	1 053.4	484.4	1 224.6
Share-based payments	514.4	906.2	922.2	1 808.4
Statutory pensions	136.5	356.6	250.3	483.4
Supplementary pensions	205.1	286.3	205.1	354.1
Total	2 408.0	5 682.4	2 704.3	7 808.6

1) 2022 based on estimated amount. Comparative figure updated with the actual amount paid.

The President and CEO, Kimmo Alkio is entitled to a bonus corresponding to a maximum of 150% of the

annual base salary based on the Group's external revenue, profit, cash-flow and achievement of strategic

goals when achievements exceed the targets set. The annual contribution for the President and CEO's

supplementary pension arrangement is 23% of the annual base salary. The President and CEO's retirement

age is 63. In case his assignment is terminated, the period of notice is 12 months and the severance

payment is equivalent to the base salary and the short-term target incentive for six months, in addition to

the salary for the notice period. The President and CEO participates in the Long-term incentive

programmes according to respective terms and conditions decided by the Board of Directors. In 2022,

after deductions for applicable taxes, a total of 15 472 (9 729) shares were delivered to the President and

CEO.

The other Leadership team members are entitled to a bonus corresponding to a maximum of 100% of the

annual base salary based on their individual goals when achievements exceed the targets set. The annual

contribution for the Leadership team members' supplementary pension arrangement is 15% of the annual

base salary. The retirement age of the Leadership team members is according to national legislation. The

termination terms vary and the amounts correspond to the periods of notice. The Leadership team

members participate in the Long-term incentive programmes according to respective terms and conditions

decided by the Board of Directors. In 2022, after deductions for applicable taxes, a total of 22 201 (20 797)

shares were delivered to the Leadership team members.

Remuneration for the Board of Directors


EUR thousand	2022	2021
Board members at 31 Dec 2022
Tomas Franzén, Chairperson Board and RC	169.3	168.2
Timo Ahopelto, Deputy Chairperson	99.6	98.4
Liselotte Hägertz Engstam	79.7	85.4
Harri-Pekka Kaukonen, Chairperson ARC	102.9	109.4
Angela Mazza Teufer	64.1	61.8
Katharina Mosheim	78.9	70.6
Niko Pakalén	86.1	82.2
Endre Rangnes	78.1	79.8
Leif Teksum1)	2.4	78.2
Rohan Haldea2)	—	60.2
Salim Nathoo3)	—	70.2
Tommy Sander Aldrin, personnel rep.1)	—	15.0
Ola Hugo Jordhøy, personnel rep.1)	—	15.0
Anders Palklint, personnel rep.1)	—	15.0
Robert Spinelli, personnel rep.4)	15.0	—
Ilpo Waljus, personnel rep.	15.0	15.0
Total	791.1	1 024.4

1) Until 24 March 2022

2) Until 8 September 2021

3) Until 20 July 2021

4) As of 24 March 2022

Each member of the Board of Directors receives a fixed annual remuneration and additional meeting based

remuneration. According to the decision by the Annual General Meeting, the yearly remuneration is as

follows: Chairperson EUR 128 500, Deputy Chairperson EUR 72 000, and ordinary member EUR 54 500. In

addition to these fees, the Chairperson of a permanent Board Committee receives an annual fee of

EUR 20 000 and a member of a permanent Board Committee receives an annual fee of EUR 10 000. In

addition, remuneration of EUR 800 is paid to the Board members elected by the Annual General Meeting

for each Board of Director's meeting, permanent committee or temporary subgroup meeting. Further,

remuneration for employee representatives elected as ordinary members of the Board of Directors is an

annual fee of EUR 15 000, which is paid in cash only.

The Annual General Meeting also approved that part of the fixed annual remuneration may be paid in the

company’s shares purchased from the market. An elected member of the Board of Directors may, at his/

her discretion, choose to receive the fee from the following five alternatives:

1.No cash, 100% in shares

2.25% in cash, 75% in shares

3.50% in cash, 50% in shares

4.75% in cash, 25% in shares, or

5.100% in cash, no shares.

The shares will be purchased in accordance with an acquisition programme prepared by the company. If

the remuneration cannot be paid in shares due to insider regulation, termination of the Board member’s

term of office or other reason relating to the member of the Board, the remuneration shall be paid fully in

cash. In addition to the share remuneration, the Board members do not belong to or are not compensated

with other share-based arrangements, nor do the members have any pension plans at Tietoevry except the

employee representatives.

The Shareholders' Nomination Board based on shareholdings as at 31 August 2022 consisted of the

following representatives announced by Tietoevry’s shareholders:

•Petter Söderström, Investment Director, Solidium Oy

•Gustav Moss, Vice President, Cevian Capital AB

•Alexander Kopp, Investment Manager, Incentive AS

•Mikko Mursula, Deputy CEO, Ilmarinen Mutual Pension Insurance Company

•Tomas Franzén, Chairperson of the Board of Directors, Tietoevry Corporation.

Share-based incentive plans

The aim of Tietoevry's share-based incentive plans is to align the objectives of shareholders and key

employees in order to increase the value of the company in the long-term. At the end of 2022, Tietoevry's

share-based incentive plans included Performance Share Plans 2020–2022, 2021–2023 and 2022–2024

as well as Restricted Share Plans 2020–2022, 2021–2023 and 2022–2024. The rewards from the plans

will be paid partly in the company’s shares and partly in cash. The cash proportion is intended to cover

taxes and tax-related costs arising from the reward.

As a rule, no reward will be paid, if a participant´s employment or service ends before the reward payment.

The Board of Directors anticipates that share rewards to be delivered to the participants under the plans

will consist of shares to be acquired from the market. Thus, no new shares will be issued in connection

with the plans.

The Performance Share Plan 2019–2021 and the Restricted Share Plan 2019–2021 ended in 2022. Based

on the achievements of the targets, a total of 211 277 gross shares were earned and of these 113 677 net

shares were delivered to the participants. Tietoevry used its treasury shares for the reward payments.

Future cash payment to be made to the tax authorities from share-based payments is estimated at the end

of the period at EUR 18.5 million.

Main terms and conditions of the share-based incentive plans


	Performance Share Plan
	2020–2022	2021–2023	2022–2024
Plan launched	18 December 2019	16 February 2021	16 February 2022
Performance period	2020–2022	2021–2023	2022–2024
Vesting conditions	Total Shareholder Return of Tietoevry share (TSR) and Tietoevry's Earnings per Share (EPS). Valid employment or director agreement of a key employee upon the reward payment.	Total Shareholder Return of Tietoevry share (TSR), strategic target related to Tietoevry's growth and Tietoevry's Earnings per Share (EPS). Valid employment or director agreement of a key employee upon the reward payment.	Relative and absolute Total Shareholder Return of Tietoevry share (TSR), Revenue growth and ESG target. Valid employment or director agreement of a key employee upon the reward payment.
Exercised	In shares and cash in 2023	In shares and cash in 2024	In shares and cash in 2025
Number of participants on 31 Dec 2022	156	99	523
Other	On 31 Dec 2022, rewards to be paid correspond to the value of approximate number of 521 292 Tietoevry gross shares.	On 31 Dec 2022, rewards to be paid correspond to the value of approximate number of 464 180 Tietoevry gross shares.	On 31 Dec 2022, rewards to be paid correspond to the value of approximate number of 980 904 Tietoevry gross shares.


	Restricted Share Plan
	2020–2022	2021–2023	2022–2024
Plan launched	18 December 2019	16 February 2021	16 February 2022
Vesting period	2020–2022	2021–2023	2022–2024
Vesting conditions	Valid employment or director agreement of a key employee upon the reward payment.
Exercised	In shares and cash in 2023	In shares and cash in 2024	In shares and cash in 2025
Number of participants on 31 Dec 2022	371	421	157
Other	On 31 Dec 2022, rewards to be paid correspond to the value of approximate number of 221 352 Tietoevry gross shares.	On 31 Dec 2022, rewards to be paid correspond to the value of approximate number of 216 680 Tietoevry gross shares.	On 31 Dec 2022, rewards to be paid correspond to the value of approximate number of 61 800 Tietoevry gross shares.

Assumptions made in determining the fair value of Tietoevry's Share-based incentive

plans

For Performance Share Plans and Restricted Share Plans, the fair value has been determined at grant using

the fair value of the company share as of the grant date and expected dividends, market-based

performance metric outcome probability is estimated using Monte-Carlo simulation.

The fair value of social costs settled in cash are remeasured at each reporting date until settlement.

For share plan grants made in 2022, the fair value of the part recognised into equity has been determined

at grant date using the following assumptions. The part recognised into liability is based on the share price

at the end of the reporting period:

•Share price at grant: EUR 24.86

•Expected dividends: EUR 4.32

•Risk-free interest rate: 0.52%

•Expected volatility (historical daily observations over corresponding maturity): 26.0%

•Contractual life: 2.7 years

•Fair value at grant: EUR 13.97

•Share price at year-end: EUR 26.52

Share option programme transferred from EVRY

As part of the Merger plan, it was agreed that EVRY's incentive plans will continue and will be transformed

in a value neutral way into restricted stock units or performance shares in the combined company, with

equivalency on all material respects with regards to economic value, vesting conditions and other terms

and conditions, taking into account the strike price of the options and by applying an option conversion

ratio of 1:0.1423. Any existing right for EVRY to settle options and/or restricted stock units under the plans

in cash, will continue as a right for the combined company.

The final reward instalment from Long-Term Incentive Plan 2018 was paid in 2022. Based on the

achievements of the targets, a total of 54 061 gross shares were earned and of these, 26 442 net shares

were delivered to the participants. Tietoevry used its treasury shares for the reward payments.

Share-based payments included in employee benefit expenses


EUR million	2022	2021
Equity-settled share-based incentive plans	6.9	8.7
Social costs settled in cash1)	1.3	1.4
Total	8.2	10.1

1) Tietoevry's share-based incentive plans are accounted for as equity-settled. Social costs from the plans are reported as cash-settled.

9. Income taxes

Income tax expenses comprise current and deferred tax. Deferred tax assets and liabilities charged by the

same tax authority are netted and, therefore, shown net on the statement of financial position.


ACCOUNTING POLICIES
Tax expense for the period includes current taxes of the Group companies based on taxable profit for the year, together with tax adjustments for previous years and changes in deferred taxes. Tax is recognized in the income statement, except to the extent that it relates to items recognized in other comprehensive income or directly in equity, in which case the related income tax is also recognized in other comprehensive income or directly in equity, respectively. The share of results in joint ventures is reported in the income statement based on the net result and thus, including the income tax effect.
Deferred income tax is recognized, using the liability method, on temporary differences between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements as well as on tax loss carry forwards. Deferred income tax is determined using the tax rates and laws which have been enacted or substantively enacted at the reporting date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. Deferred taxes are not recognized on temporary differences related to investments in subsidiaries to the extent that they will probably not be reversed in the foreseeable future.
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. The deferred tax assets and liabilities arising from consolidation are recognized in the consolidated statement of financial position if it is probable that the related tax effects will occur.


ACCOUNTING ESTIMATES AND JUDGEMENTS
At each reporting date, management estimates the amount of probable future taxable profits against which unused tax losses can be utilized. As the actual profits may differ from the forecasts, the change will affect the taxes in future periods.
The group operates globally and is, therefore subject to changing tax laws in multiple jurisdictions. The interpretation of tax legislation requires management judgement, and the applied interpretations may include uncertainties.

Income tax expense in income statement


EUR million	2022	2021
Current taxes	43.7	48.9
Change of deferred taxes	5.8	7.3
Taxes for prior years	4.7	6.0
Total	54.2	62.2

Reconciliation of income tax expense

Profit before taxes	242.8	353.8
Tax calculated at the domestic corporation tax rate of 20%	48.6	70.8
Effect of different tax rates in foreign subsidiaries	2.4	3.8
Taxes for prior years	4.7	6.0
Deferred taxes from previous year	-4.9	-4.2
Tax effect of non-deductible expenses and tax exempt income	2.3	-16.3
Tax on foreign dividend distribution	2.9	4.1
Other items	-1.8	-2.0
Total	54.2	62.2

Effective tax rate, %	22.3	17.6

Deferred tax assets and deferred tax liabilities


EUR million	31 Dec 2022	31 Dec 2021
Deferred tax assets	14.6	19.1
Deferred tax liabilities	10.7	9.1
Net deferred tax asset	3.9	10.0

The majority of the deferred tax assets and liabilities is expected to be recovered after more than 12

months.

Movements in deferred tax assets and liabilities during the year


EUR million	1 Jan 2022	Charged to income statement	Charged to other comprehensive income	Other changes	31 Dec 2022
Deferred tax asset
Provisions	3.6	-0.4	—	-0.2	3.0
Employee benefits	11.8	-0.7	-0.4	-0.5	10.2
Depreciation difference	7.7	3.2	—	-0.1	10.8
Other temporary difference	9.8	-1.6	—	-0.1	8.1
Revenue recognition	9.5	-2.8	—	-0.4	6.3
Tax losses carried forward	49.6	-9.8	—	-0.8	39.0
Total gross	92.0	-12.1	-0.4	-2.1	77.4
Offset against deferred tax liabilities	-72.9				-62.8
Total net	19.1				14.6

Deferred tax liability
Intangible assets	64.1	-14.4	—	-1.3	48.4
Untaxed reserves	9.5	2.0	—	-0.8	10.7
Other temporary difference	8.4	6.1	—	-0.1	14.4
Total gross	82.0	-6.3	—	-2.2	73.5
Offset against deferred tax assets	-72.9				-62.8
Total net	9.1				10.7

Net deferred tax asset	10.0	-5.8	-0.4	0.1	3.9

On 31 December 2022, the Group´s unused tax loss carry forwards amounted to EUR 177.4 (239.3) million pertaining to deferred tax assets of EUR 39.0 (49.6) million. These losses relate mainly to Norway and Sweden and

have no expiry date. Based on profit forecasts, it is probable that there will be sufficient future taxable profits available against which these tax losses can be utilized.

On 31 December 2022, the Group had tax loss carry forwards amounting to EUR 0.7 (0.8) million pertaining to deferred tax assets of EUR 0.1 (0.2) million, which were not recognized due to uncertainty of utilization.

The Group does not have any material uncertain tax positions in accordance with IFRIC 23 Uncertainty over Income Tax Treatments.


EUR million	1 Jan 2021	Charged to income statement	Charged to other comprehensive income	Acquisitions and disposals	Other changes	31 Dec 2021
Deferred tax asset
Provisions	4.8	-0.9	—	-0.6	0.3	3.6
Employee benefits	12.1	-1.6	0.4	—	0.9	11.8
Depreciation difference	11.4	-3.8	—	—	0.1	7.7
Other temporary difference	8.4	1.2	—	—	0.2	9.8
Revenue recognition	9.5	-0.4	—	—	0.4	9.5
Tax losses carried forward	57.4	-9.7	—	—	1.9	49.6
Total gross	103.6	-15.2	0.4	-0.6	3.8	92.0
Offset against deferred tax liabilities	-68.0					-72.9
Total net	35.6					19.1

Deferred tax liability
Intangible assets	72.1	-10.8	—	—	2.8	64.1
Untaxed reserves	13.0	3.4	—	—	-6.9	9.5
Other temporary difference	2.7	-0.5	—	-1.0	7.2	8.4
Total gross	87.8	-7.9	—	-1.0	3.1	82.0
Offset against deferred tax assets	-68.0					-72.9
Total net	19.8					9.1

Net deferred tax asset	15.8	-7.3	0.4	0.4	0.7	10.0

10. Earnings per share

The total number of Tietoevry's shares on 31 December 2022 amounted to 118 425 771. At the end of the

reporting period, the number of own shares totalled 12 468, representing 0.01% of the total number of

shares and voting rights.


ACCOUNTING POLICIES
Basic Earnings per share (EPS) is calculated by dividing the net profit attributable to the shareholders of the Parent company by the weighted average number of shares in issue during the year, excluding shares purchased by Tietoevry and held as own shares.
Diluted earnings per share is calculated by adjusting the weighted average number of shares outstanding during the year with the shares estimated to be delivered based on the share-based incentive plans.


	2022	2021
Net profit for the financial year attributable to owners of the Parent company (EUR million)	188.6	291.6

Earnings per share (EUR)
Basic	1.59	2.46
Diluted	1.59	2.46

Weighted average number of shares during the year
Basic	118 405 657	118 408 223
Effect of dilutive share-based incentive plans	203 952	276 585
Diluted	118 609 609	118 684 808

INVESTED CAPITAL AND WORKING CAPITAL ITEMS

This section includes disclosures describing the assets that form the basis for the activities of Tietoevry

and the related liabilities.

11. Intangible assets and impairment testing of goodwill

Tietoevry's intangible assets comprise mainly of goodwill, internally developed software (capitalized

development costs), and intangible assets acquired in business combinations, such as technology,

trademarks and customer relationships. Intangible assets also include software licenses. Tietoevry does

not have any intangible assets with indefinite useful lives other than goodwill.


ACCOUNTING POLICIES
Intangible assets other than goodwill are recognized initially at cost. An intangible asset is recognized only if it is probable that the future economic benefits attributable to the asset will flow to the Group and the cost of the asset can be measured reliably. All other costs are expensed as incurred.
After initial recognition, intangible assets are measured at cost less amortizations and accumulated impairment losses. Intangible assets are amortized over their useful lives with the straight-line method. Assets that are subject to amortization are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount of the intangible asset exceeds its recoverable amount, an impairment loss equal to the difference is recognized in profit or loss.
Internally developed software
Development costs related to major new software products are capitalized as intangible assets when it is probable that the development will generate future economic benefits for the Group, and certain criteria related to commercial and technological feasibility are met. Development projects are analysed individually to determine the moment when the project has reached a milestone after which capitalization of development costs can start. Capitalization is subject to CFO's approval. Only costs which are directly attributable to the development are capitalised.


Subsequent to initial recognition, these costs are measured at cost less accumulated amortization and impairment losses. The amortization period for internally developed software depends on the technology renewal cycle and contract duration. Internally developed software for which amortization has not yet started are tested for impairment on an annual basis by comparing the asset's carrying amount with its recoverable amount. If the carrying amount exceeds the recoverable amount, an impairment loss equal to the difference is recognized in profit or loss.
Intangible assets recognised from acquisitions
Intangible assets acquired in business combinations are measured at fair value at the acquisition date. These are usually customer or technology related and have finite useful lives.
Gains and losses on disposal of intangible assets are included in other operating income and expenses.
The Group applies the following useful lives:


	Years
Software acquired separately	3
Other intangible assets	3–10
Technology related intangible assets recognized at fair value from acquisitions	3–15
Customer related intangible assets recognized at fair value from acquisitions	2–10
Trademark recognized at fair value from acquisitions	6
Internally developed software (capitalized development costs)	5–15


Goodwill
Goodwill arising on a business combination represents the excess of the aggregate of the consideration transferred, the amount of non-controlling interests in the acquiree and previously held equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired. Goodwill is measured at cost less accumulated impairment losses. It is not amortized, but tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. For the purpose of impairment testing, goodwill is allocated to the operating segments of the Group, which are the cash generating units (CGU) expected to benefit from the synergies of the business combination. If the carrying amount of goodwill allocated to the operating segments exceeds its recoverable amount, an impairment loss equal to the difference is recognized in profit or loss. The recoverable amount is the higher of the value in use represented by the net present value of future cash flows and the fair value less costs to sell. Impairment losses on goodwill are not reversed.
In respect of joint ventures, goodwill is included in the carrying amount of the investment.


ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates are made when determining the fair values of assets acquired in a business combination. The valuation requires management to determine the appropriate valuation technique and inputs for fair value measurements, such as discount rate.
Determining whether goodwill is impaired requires an estimation of the value-in-use of the cash- generating units (CGU) to which goodwill has been allocated. The value-in-use calculation requires management to estimate the future cash flows expected to arise from the CGUs and an appropriate discount rate to calculate present value.
While management believes that the used estimates and assumptions are sufficiently reasonable, there are uncertainties which could materially affect the valuations.
Tietoevry has reorganized its reporting structure in 2022 and reallocated the goodwill to the new CGUs which are the operating segments of the Group. The reallocation of the goodwill has required management judgement.

Intangible assets


EUR million	Goodwill	Software acquired separately	Intangible assets recognized from acquisitions1)	Internally developed software2)	Other	Advance payments	Total
Acquisition cost 1 Jan 2022	1 943.7	49.6	308.6	285.3	38.2	3.5	2 628.9
Additions	—	2.7	—	37.2	0.9	2.7	43.5
Disposals	—	-25.2	—	—	-9.7	-0.7	-35.7
Reclassifications	—	3.6	—	-1.9	0.1	-2.2	-0.5
Translation differences	-97.1	-1.1	-17.3	-12.2	-0.1	-0.0	-128.0
Acquisition cost 31 Dec 2022	1 846.5	29.5	291.3	308.3	29.3	3.3	2 508.2

Accumulated amortization and impairments 1 Jan 2022	—	-42.5	-115.4	-103.3	-35.3	-0.7	-297.3
Disposals	—	25.2	—	—	9.7	0.7	35.7
Amortization	—	-6.0	-46.7	-4.8	-0.9	—	-58.5
Impairments	—	—	—	-18.7	—	—	-18.7
Reclassifications	—	-0.4	—	—	0.3	—	0.0
Translation differences	—	1.0	8.5	4.3	0.1	—	13.9
Accumulated amortization and impairments 31 Dec 2022	—	-22.6	-153.6	-122.6	-26.1	0.0	-324.9

Carrying value 1 Jan 2022	1 943.7	7.1	193.2	182.0	2.8	2.8	2 331.6
Carrying value 31 Dec 2022	1 846.5	6.9	137.7	185.7	3.2	3.3	2 183.3

1) Includes technology and customer related intangible assets as well as trademark recognized at fair value from acquisitions.

2) Comprises mainly the development of Tietoevry's Lifecare and Core banking & Payment solutions. In 2022, Tietoevry Banking reached a settlement with a customer following their decision to exit a Nordic market and therefore to terminate an implementation project. Capitalized development work

specific for this customer was written-off resulting in an impairment loss of EUR 18.7 million. See also note 5.


EUR million	Goodwill	Software acquired separately	Intangible assets recognized from acquisitions1)	Internally developed software2)	Other	Advance payments	Total
Acquisition cost 1 Jan 2021	1 974.4	48.2	301.7	240.0	40.3	1.3	2 605.9
Additions	—	5.0	—	42.6	1.3	2.7	51.7
Disposals	-77.6	-5.0	-2.7	-6.0	-3.8	—	-95.1
Reclassifications	—	1.2	—	-0.9	0.0	-0.4	-0.1
Translation differences	46.9	0.2	9.6	9.6	0.3	-0.0	66.6
Acquisition cost 31 Dec 2021	1 943.7	49.6	308.6	285.3	38.2	3.5	2 628.9

Accumulated amortization and impairments 1 Jan 2021	—	-42.4	-67.8	-97.3	-38.3	-0.7	-246.6
Disposals	—	5.0	2.1	3.8	3.7	—	14.6
Amortization	—	-4.5	-47.3	-6.6	-0.4	—	-58.9
Reclassifications	—	-0.4	—	0.5	0.0	—	0.1
Translation differences	—	-0.2	-2.4	-3.7	-0.3	0.0	-6.5
Accumulated amortization and impairments 31 Dec 2021	—	-42.5	-115.4	-103.3	-35.3	-0.7	-297.3

Carrying value 1 Jan 2021	1 974.4	5.8	233.9	142.7	1.9	0.5	2 359.3
Carrying value 31 Dec 2021	1 943.7	7.1	193.2	182.0	2.8	2.8	2 331.6

1) Includes technology and customer related intangible assets as well as trademark recognized at fair value from acquisitions.

2) Comprises mainly the development of Tietoevry's Lifecare and Core banking & Payment solutions.

Impairment testing of goodwill

The annual impairment testing was carried out in the fourth quarter of 2022 in line with Group accounting

policy. The Group implemented a new reporting structure on 1 January 2022 and is now organized into six

businesses which are Tietoevry Create, Tietoevry Banking, Tietoevry Care, Tietoevry Industry, Tietoevry

Transform and Tietoevry Connect. These six businesses form the Group's operating segments, see note 5

for more information on the segments. The businesses form the cash-generating units (CGU) providing

services to selected customers in their market segments, and represent the lowest level at which goodwill

is monitored for internal management purposes.

Allocation of goodwill

The Group goodwill has been reallocated to the CGUs of the new reporting structure in 2022. The goodwill

was reallocated proportionally based on the estimated fair value of each CGU, reflecting the business

moves in the reorganization. The comparative information has been restated accordingly.

Carrying amount of goodwill by CGU


EUR million	31 Dec 2022	31 Dec 2021
Tietoevry Create	575.5	600.8
Tietoevry Banking	325.9	344.6
Tietoevry Care	273.5	289.1
Tietoevry Industry	197.5	208.8
Tietoevry Transform	171.1	180.5
Tietoevry Connect	303.0	319.9
Total	1 846.5	1 943.7

Compared to 31 December 2021, the goodwill decreased by EUR 97.1 million due to exchange rate

fluctuations.

As a result of the impairment testing, no impairment was identified.

Recoverable amounts

The recoverable amounts of the CGUs of Tietoevry are determined based on value-in-use calculations

which are prepared using discounted cash flow projections. Annually, management of the Group defines

the long-term ambitions and strategic objectives for the next years taking into account for example industry

growth forecasts obtained from external sources as well as salary increase assumptions. The strategic

objectives serve as basis for the businesses' long-term plans which are reviewed and approved by the

Group's top management.

The planning horizon covers a five-year period including key assumptions for sales growth rate,

development of EBITDA, capital expenditure including investments for right-of-use assets, tax payments

and changes in net working capital. Forecasted EBITDA margins are adjusted for expected efficiency

improvements. The key assumptions used are based on past experience and reflects management's

expectations of future development of sales prices, business mix, costs, market shares and volumes.

Subsequent to the five-year projection period, the growth rate used is 1%, which does not exceed the

expectations of growth in real terms.

Discount rate

The discount rate applied to the cash flow projections is the weighted average pre-tax cost of capital

(WACC). The components of the WACC rates are risk-free rate, market risk premium, country risk premium,

industry specific beta, cost of debt and debt equity ratio. The risk-free rate is based on 30-year German

government bond adjusted by the weighted average inflation differential between Germany and the

countries where each CGU has operations. The discount rates are also adjusted for the additional business

risk of the CGUs. The pre-tax discount rates for the CGUs vary between 8.7% and 11.8%.

Assumptions used in discounting the cash flow projections by the CGUs:


2022	Five-year period 2023–2027
	Terminal growth rate %	Pre-tax WACC %
Tietoevry Create	1.0	11.8
Tietoevry Banking	1.0	9.0
Tietoevry Care	1.0	8.7
Tietoevry Industry	1.0	8.8
Tietoevry Transform	1.0	8.9
Tietoevry Connect	1.0	8.7

Sensitivity analysis

The value-in-use calculation for each CGU is most sensitive to changes in WACC and EBITDA margin

assumptions. No reasonable change in key assumptions would result in recognition of an impairment loss in

any of the CGUs. In Tietoevry Connect, a decrease of 3–4 percentage points in the long-term EBITDA

margin would cause the recoverable amount of this CGU to equal the carrying amount.

12. Property, plant and equipment

Tietoevry's property, plant and equipment comprise mainly information and communication technology

(ICT) equipment.


ACCOUNTING POLICIES
Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
Land is not depreciated. Property, plant and equipment acquired in business combinations are measured at fair value at the acquisition date. Depreciation is recognized according to plan based on the estimated economic lives of the individual assets and accounted for in accordance with the straight-line method. The assets' residual useful lives are reviewed, and adjusted if appropriate, at each reporting date.
Assets that are subject to depreciation are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss equal to the difference is recognized in profit or loss.
The group applies the following useful lives:


	Years
Buildings and structures	25–40
Data processing equipment1)	1–5
Other machinery and equipment	5
Other tangible assets	5

1) Purchases of personal computers are expensed immediately.

Property, plant and equipment


EUR million	Land	Buildings and structures	Machinery and equipment	Other tangible assets	Advance payments and work in progress	Total
Acquisition cost 1 Jan 2022	1.2	3.8	408.3	61.5	12.7	487.5
Additions	—	—	29.4	4.5	16.2	50.0
Disposals	—	—	-50.3	-1.5	-1.1	-52.9
Reclassifications	—	—	10.6	1.9	-8.3	4.1
Translation differences	—	—	-12.3	-1.7	-0.3	-14.3
Acquisition cost 31 Dec 2022	1.2	3.8	385.6	64.7	19.1	474.4

Accumulated depreciation and impairments 1 Jan 2022	—	-2.0	-356.9	-40.3	-0.9	-400.1
Disposals	—	—	49.1	1.5	0.9	51.6
Depreciation	—	-0.1	-29.9	-7.4	—	-37.4
Impairments	—	—	—	—	—	—
Reclassifications	—	—	-3.5	-0.1	0.0	-3.6
Translation differences	—	—	10.9	1.4	—	12.3
Accumulated depreciation and impairments 31 Dec 2022	—	-2.1	-330.3	-44.9	0.0	-377.2

Carrying value 1 Jan 2022	1.2	1.8	51.4	21.2	11.8	87.4
Carrying value 31 Dec 2022	1.2	1.7	55.4	19.8	19.1	97.2


EUR million	Land	Buildings and structures	Machinery and equipment	Other tangible assets	Advance payments and work in progress	Total
Acquisition cost 1 Jan 2021	1.2	3.8	398.8	72.5	8.0	484.3
Additions	—	—	19.1	0.7	10.4	30.2
Disposals	—	—	-30.0	-1.4	-0.1	-31.5
Reclassifications	—	—	17.2	-10.7	-5.7	0.8
Translation differences	—	—	3.3	0.4	0.0	3.6
Acquisition cost 31 Dec 2021	1.2	3.8	408.3	61.5	12.7	487.5

Accumulated depreciation and impairments 1 Jan 2021	—	-1.9	-340.3	-44.3	-0.9	-387.4
Disposals	—	—	29.6	1.4	—	31.0
Depreciation	—	-0.1	-33.3	-6.7	—	-40.0
Impairments	—	—	0.0	—	—	0.0
Reclassifications	—	—	-10.3	9.5	0.0	-0.8
Translation differences	—	—	-2.6	-0.3	—	-2.8
Accumulated depreciation and impairments 31 Dec 2021	—	-2.0	-356.9	-40.3	-0.9	-400.1

Carrying value 1 Jan 2021	1.2	1.9	58.4	28.2	7.1	96.9
Carrying value 31 Dec 2021	1.2	1.8	51.4	21.2	11.8	87.4

13. Inventories

Inventories comprise mainly cards and chips for sale to customers.


ACCOUNTING POLICIES
Inventories are measured at the lower of cost and net realisable value. Cost is determined based on average cost and net realisable value represents the estimated selling price under normal commercial conditions less estimated costs of sale.

No impairments have been booked on the inventories in 2022 or in 2021.

14. Trade and other receivables

Trade receivables represent amounts that Tietoevry expects to collect from other parties in the ordinary

course of business. Trade receivables are non-interest bearing and the standard payment term is 30 days,

according to the Group’s Credit Policy. Contract assets relate to fixed-price projects where the customer

invoicing is based on agreed milestones and the services rendered by the reporting date exceeds the

payment received. License fees relate to prepaid license costs that will be realized on an accrual basis in

the future periods. Other interest-bearing receivables relate to assets that are financed as part of customer

deliveries and where the contracts are treated as service contracts.

Trade receivables to be sold via non-recourse factoring arrangements, but not yet derecognized as of the

reporting date, are classified as Financial assets at fair value. More information in note 22.


ACCOUNTING POLICIES
Trade receivables are initially recognised at fair value and subsequently at amortized cost less expected credit loss allowance (ECL). Tietoevry has elected to use the practical expedient and calculate lifetime ECL based on a pre-defined allowance matrix with customer segment specific credit characteristics, based on the following criteria: •Country Group (Finland, Sweden, Norway, Other European Union countries, Other countries) •Customer Industry Group (Financial Services, Public Healthcare & Welfare, Industrial customer Services) •Balance due status (Not yet due, overdue 1–7 days, 8–30 days, 31–60 days, 61–90 days, over 90 days)
Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. Default is defined as 90 days past due or a write off event, due to inability to collect debt.
For each segment, the ECL rate (expressed as a percentage) indicates the historical average defaults identified during the past three years and also the Group’s assessment of the possible impact from changes in the overall economic environment in which its customers operate. These collective allowances can be increased if the customer has filed for bankruptcy but has not yet registered the fact or if there are any facts or circumstances indicating that the customer’s credit risk is above industry/country average.


No ECL is calculated for the portion of trade receivables, where the credit risk is covered by collateral, such as credit insurance. When calculating ECL for contract assets, Tietoevry uses the ECL rate set for “not yet due” invoices in the allowance matrix. Trade receivables under business model sell are accounted at fair value through profit or loss (FVTPL) and, therefore, those are not subject to ECL provisions.
Trade receivables are permanently written off when there is no reasonable expectation to recovery. Subsequent recoveries of amounts previously written off are credited to income statement. Other interest-bearing receivables are initially recognized at fair value and subsequently at amortized cost during the contract period. The carrying amount of the trade and other receivables approximate to their fair values due to their short-term nature.

Trade and other receivables


EUR million	31 Dec 2022	31 Dec 2021
Non-current
Prepaid expenses and accrued income	9.0	12.7
Other	11.4	22.6
Total	20.4	35.4

Current
Trade receivables at amortized cost	408.9	372.8
Prepaid expenses and accrued income
Contract assets	52.0	52.5
Licence fees	30.6	30.6
Other prepaid expenses	28.2	34.2
Other interest-bearing receivables	13.6	13.8
Other	14.4	13.0
Total	547.8	517.0

Group trade receivables maturity and expected credit losses


31 Dec 2022	Not yet due	Overdue 1–7 days	Overdue 8–30 days	Overdue 31–60 days	Overdue 61–90 days	Overdue over 90 days	Grand Total
EUR million	Not yet due	Overdue 1–7 days	Overdue 8–30 days	Overdue 31–60 days	Overdue 61–90 days	Overdue over 90 days	Grand Total
Gross trade receivables subject to impairment	227.9	16.4	1.4	3.2	0.5	2.3	251.7
Average expected credit loss rate applied	-0.12 %	-0.62 %	-1.49 %	-1.82 %	-3.71 %	-51.61 %	-0.66 %
Collective loss allowance	-0.3	-0.1	-0.0	-0.1	-0.0	-1.2	-1.7
Individual loss allowance	-0.4	-0.0	—	-0.4	-0.1	-0.2	-1.1
Total loss allowance	-0.6	-0.1	-0.0	-0.4	-0.1	-1.4	-2.7
Trade receivables net of ECL	227.3	16.2	1.4	2.7	0.4	1.0	248.9
Trade receivables covered by collateral	142.2	15.0	0.6	1.3	0.5	0.4	160.0
Total trade receivables at amortized cost	369.5	31.2	2.0	4.0	0.9	1.4	408.9

There are no major concentrations of credit risk in the Group, whether through exposure to individual customers, specific industry sectors and/or regions. The maximum exposure to customer related credit risk at the

reporting date is the carrying value of trade receivables.


31 Dec 2021	Not yet due	Overdue 1–7 days	Overdue 8–30 days	Overdue 31–60 days	Overdue 61–90 days	Overdue over 90 days	Grand Total
EUR million	Not yet due	Overdue 1–7 days	Overdue 8–30 days	Overdue 31–60 days	Overdue 61–90 days	Overdue over 90 days	Grand Total
Gross trade receivables subject to impairment	195.8	12.8	3.8	3.4	1.4	3.7	220.9
Average expected credit loss rate applied	-0.18%	-0.27%	-1.40%	-6.11%	-7.64%	-63.29%	-1.40%
Collective loss allowance	-0.3	—	-0.1	-0.2	-0.1	-2.3	-3.1
Individual loss allowance	—	—	0.0	0.0	0.0	0.3	0.2
Total loss allowance	-0.4	-0.1	-0.1	-0.2	-0.1	-2.1	-2.9
Trade receivables net of ECL	195.4	12.7	3.8	3.2	1.3	1.6	218.0
Trade receivables covered by collateral	131.8	17.0	0.2	0.8	0.6	4.3	154.7
Total trade receivables at amortized cost	327.3	29.8	4.0	4.0	1.8	5.9	372.8

Net contract assets


	Not yet due	Not yet due
EUR million	2022	2021
Contract assets	52.1	52.6
Average ECL applied	-0.25%	-0.06%
Collective loss allowance	-0.1	—
Net contract assets	52.0	52.5

Movement of expected credit loss allowances


	Trade receivables		Contract assets
EUR million	2022	2021	2022	2021
1 Jan	2.9	4.2	0.0	0.0
Translation differences	-0.1	0.1	—	—
Impairment losses recognized	3.7	3.2	0.1	—
Amounts written off this year as uncollectible	—	-0.2	—	—
Impairment losses reversed	-3.7	-4.3	—	—
Disposed companies	-0.1	-0.1	—	—
31 Dec	2.7	2.9	0.1	0.0

Impairment losses recognized on trade receivables and contract assets are included in other operating

expenses in the income statement.

15. Defined benefit plans

Group companies in different countries have a number of different post-employment benefit plans in

accordance with local requirements and practices. The majority of the plans are classified as defined

contribution plans. Post-employment benefit plans other than defined contribution plans are classified as

defined benefit plans.


ACCOUNTING POLICIES
The fixed contributions to defined contribution plans are recognized as employee benefit expenses in the period to which they relate. The Group has no further legal or constructive payment obligations once the contributions have been paid.
Defined benefit plans typically define an amount of post-employment benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. Defined benefit plans are funded with payments to insurance companies.
For defined benefit plans, the net liability recognized in the statement of financial position equals the present value of the defined benefit obligation at the closing date less the fair value of the plan assets. The present value of the defined benefit obligation is determined separately for each plan by independent actuaries using the projected unit credit method. The actuarial calculations include several financial and demographic assumptions and any change in these will impact the carrying amount and future expense of the defined benefit obligation.
Current service costs, past service costs and gains or losses on settlements are recognized in employee benefit expenses. Net interest expense or income is recognized in financial items under interest expense or interest income. All remeasurements of the defined benefit liability or asset arising from experience adjustments and changes in actuarial assumptions are recognized directly in other comprehensive income.

The Group manages defined benefit plans through insurance companies. The employer has guaranteed to

the members of the plans a certain level of benefit after their retirement, which depends on the length of

service and salary base. The salary base is an average of last years’ salaries indexed with common salary

index. After the retirement, the benefit payable is indexed yearly.

In Sweden, the Group’s risk is only on active employees, but in Finland the Group’s risk covers also

approximately 170 non-active employees. When the pensioner who has a vested pension retires, the final

amount of the pension is revised in the Finnish pension plan and as a result, the employer may incur

additional costs. In addition, in the Finnish pension plan, the index increases that are borne by the

employer during the period between the grant date of the vested pension and the beginning of the pension

are charged only in the year when the pension is granted. In some insurance contracts, under certain

conditions, the insured person has the right to retire earlier than at the normal retirement age. These

additional expenses are charged at the beginning of the retirement.

In 2022, the majority of the defined benefit plans in Finland have been converted to defined contribution

plans, resulting in costs of EUR 2.1 million and a settlement gain of EUR 7.5 million as well as a reduction of

defined benefit obligations of EUR 8.4 million.

In Sweden, the plan covers 63 active employees. As the Group does not have actuarial or investment risk

for those plan members whose employment has ceased, the plan members are removed from the pension

plan and a settlement is recognized annually. In 2022, a settlement loss of EUR 0.6 million was recognized

in personnel expenses and the net defined benefit liability increased by the corresponding amount.

In Norway, the collective defined benefit pension scheme is closed and the Group has instead established

an unfunded compensation scheme for the employees. The size of the compensation and the profile for its

accrual are calculated based on parameters at the time of the change and are accounted for as a defined

benefit pension scheme in the financial statements. The accrual formula and profile of the compensation

scheme are used as the basis to make provisions in the accounts so that the total compensation earned to

date by employees at any time is provided for as a liability in the consolidated statement of financial

position. The plan covers 785 employees and pensioners. In addition, there are various other closed and

unfunded pension plans in Norway covering 334 employees and pensioners.

Defined benefit cost recognized in income statement and in other comprehensive income


EUR million	2022	2021
Service cost
Current service cost	2.7	3.4
Settlement gains	-6.9	-1.9
Conversion costs	2.1	—
Net interest	-0.2	-0.3
Total	-2.3	1.1

Amounts recognized in other comprehensive income
Remeasurement
Gains (-)/losses (+) from change in demographic assumptions	0.0	0.1
Gains (-)/losses (+) from change in financial assumptions	-4.5	-1.4
Gains (-)/losses (+) from experience adjustments	-0.5	0.5
Gains (-)/losses (+) on plan assets	3.0	2.7
Total	-2.0	1.9

Amounts recognized in the statement of financial position


	Present value of defined benefit obligaton1)		Fair value of plan assets2)		Net liability
EUR million	2022	2021	2022	2021	2022	2021
1 Jan	74.2	103.7	-36.4	-65.5	38.0	38.2
Current service cost	2.7	3.3	—	—	2.7	3.3
Interest expense/income	0.5	0.8	-0.2	-0.5	0.2	0.3
Employer contribution	—	—	-2.9	-5.2	-2.9	-5.2
Benefits paid	-2.4	-4.5	2.4	4.5	—	—
Curtailment and settlement	-35.2	-28.9	28.4	27.0	-6.9	-1.9
Actuarial gains/losses	-5.1	-0.7	3.1	2.7	-2.0	2.0
Businesses acquired/divested	0.2	—	-0.1	—	0.1	—
Exchange rate differences	-1.9	0.6	0.6	0.7	-1.4	1.3
31 Dec	33.0	74.2	-5.2	-36.4	27.8	38.0

1) Of which EUR 6.1 (39.0) million in Finland, EUR 0.7 (7.2) million in Sweden and EUR 26.2 (28.1) million in Norway.

2) Of which EUR 3.9 (28.5) million in Finland and EUR 1.2 (7.9) million in Sweden.


EUR million	2022	2021
Defined benefit obligations	28.4	38.7
Defined benefit plan assets	-0.6	-0.7
Net liability	27.8	38.0

Allocation of plan assets


	2022		2021
	EUR million	%	EUR million	%
In Sweden, plan assets are comprised as follows
Equity instruments	0.2	19.8	2.1	26.6
Debt instruments	0.5	41.8	3.2	40.8
Property	0.1	9.8	0.7	8.9
Other	0.4	28.6	1.9	23.7
Total	1.2	100.0	7.9	100.0

In Finland, the plan assets are accrued from the insurance premiums paid to the insurance company and

accumulated up to the reporting date. The assets are part of the insurance company's investment assets

and they are responsible for reporting the assets. A specification of the plan assets is not available.

Actuarial assumptions


%	2022	2021
Finland
Discount rate	3.1	1.0
Future salary increases	4.3	3.7
Future pension increases	2.8	2.3
Inflation rate	2.6	2.0

Sweden
Discount rate	3.7	1.9
Future salary increases	2.0	2.2
Future pension increases	2.0	2.2
Inflation rate	2.0	2.2

Norway
Discount rate	3.0	1.9
Future salary increases	3.5	2.8
Growth in the basic state pension (G)	3.3	2.5

Sensitivity analysis of actuarial assumptions

The following table shows how a change in one assumption, while holding all other assumptions constant,

would affect the defined benefit obligation.


	Change in assumption	Increase in assumption	Decrease in assumption
Impact on defined benefit obligation in Finland
Discount rate	0.5%	-7.3%	8.1%
Future pension increase	0.5%	7.6%	-6.9%
Life expectancy	+1 year	4.9%

Impact on defined benefit obligation in Sweden
Discount rate	0.5%	-11.9%	13.4%
Future salary increase	0.5%	15.5%	-14.4%
Future pension increase	0.5%	9.9%	-9.2%
Life expectancy	+1 year	4.3%

Impact on defined benefit obligation in Norway
Discount rate	0.5%	-1.8%	2.1%
Future salary increase	0.5%	0.2%	-0.2%
Future pension increase	0.5%	1.6%	—%
Life expectancy	+1 year	1.1%

Maturity profile of the defined benefit obligation

The weighted average duration of the defined benefit obligation is 16 years in Finland, 18 years in Sweden

and 15 years in Norway. The following table shows the maturity profile of the future benefit payments

which are the basis for the calculated undiscounted defined benefit obligation.


EUR million	2022
Maturity under 1 year	1.8
Maturity 1–5 years	8.9
Maturity 5–10 years	11.9
Maturity 10–30 years	30.2
Maturity over 30 years	2.6
Total future benefit payments	55.5

Expected contributions in 2023

Expected contributions to post-employment benefit plans for the year ending 31 December 2023 are EUR

0.9 million.

Multi-employer plans

The ITP pension plans operated by Alecta and Collectum in Sweden are multi-employer defined benefit

pension plans which pool the assets contributed by various entities that are not under common control

and the assets provide benefits to employees of more than one entity. It has not been possible to get

sufficient information for the calculation of obligations and assets by employer from Alecta and Collectum

and, therefore, these plans have been accounted for as defined contribution plans in the consolidated

financial statements. In Tietoevry, 4 567 employees are included in these pension plans. The yearly

contributions to the plans are around EUR 25 million.

3 643 employees in the Group’s Norwegian companies are members of an early retirement scheme (AFP),

which is a multi-company defined benefit scheme, and is financed by premium payments determined as a

percentage of salary. There is no reliable measurement and allocation of liabilities and assets between the

companies that participate in the scheme. The scheme is, therefore, treated for accounting purposes as a

defined contribution plan and the premiums paid are recognized as costs through profit or loss. The

premium rate for 2022 was 2.6% (2.5) corresponding to EUR 4.8 (4.5) million. The scheme is underfunded,

and the administrator (Fellesordningen for AFP) assumes that premiums will have to increase over time in

order to ensure sufficient buffer capital to cope with increased payments. Companies that participate in

the AFP scheme are jointly and severally liable for two-thirds of the pension payments due to employees

who satisfy the terms and conditions at any time. The liability applies both to shortfalls in premium

payments and if the premium rate applied proves insufficient to meet the liabilities. In the event that the

scheme is terminated, the participating companies have a duty to continue to make premium payments to

provide for pension payments to employees who are members of the scheme or who satisfy the

requirements of collective agreements for such pension arrangements at the date of termination.

16. Provisions

Provisions at Tietoevry Group mostly comprise restructuring and contract-related provisions.


ACCOUNTING POLICIES
A provision is a liability of uncertain timing or amount which is recognized when the entity has a present legal or constructive obligation as a result of a past event and it is more likely than not that an outflow of economic benefits will be required to settle the obligation and the amount of the obligation can be measured reliably. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation and are split between amounts expected to be settled within 12 months at the end of the reporting period and amounts expected to be settled later (non-current).
Provisions for restructuring
Restructuring provision is only recognized when a formal plan has been approved and the implementation of it has either commenced or the plan has been announced.
Provisions for loss-making contracts
Provision is recognised for any unavoidable net loss arising from the contract.
Other provisions
Other provisions include employee related provisions other than restructuring as well as warranty provisions.


ACCOUNTING ESTIMATES AND JUDGEMENTS
Provisions require management to assess the best estimate of the future costs needed to settle the present obligation at the reporting date. The actual costs may differ from the estimated costs.


EUR million	Provisions for restructuring	Provisions for loss-making contracts	Other provisions	Total
1 Jan 2022	11.3	3.4	7.7	22.4
Translation differences	-0.7	-0.2	-0.2	-1.0
Increases in provisions	33.4	0.6	3.5	37.6
Use of provisions	-21.7	-3.0	-1.7	-26.4
Reversal of provisions	-8.5	-0.2	-2.1	-10.8
31 Dec 2022	13.9	0.6	7.2	21.7

of which
Non-current	0.6	—	2.0	2.6
Current	13.3	0.6	5.2	19.1
Total	13.9	0.6	7.2	21.7

In 2022, restructuring measures were taken in Tietoevry Connect, Tietoevry Transform and Tietoevry

Banking.


EUR million	Provisions for restructuring	Provisions for loss-making contracts	Other provisions	Total
1 Jan 2021	24.4	12.9	11.5	48.8
Translation differences	0.0	-0.2	0.1	-0.1
Increases in provisions	10.1	0.7	2.1	13.0
Use of provisions	-21.1	-9.3	-3.9	-34.2
Reversal of provisions	-2.2	-0.7	-2.1	-5.0
31 Dec 2021	11.3	3.4	7.7	22.4

of which
Non-current	0.8	0.0	2.0	2.8
Current	10.6	3.4	5.7	19.6
Total	11.3	3.4	7.7	22.4

In 2021, restructuring provisions related to Tietoevry Connect.

17. Trade and other payables

Trade and other payables represent unpaid, non-interest bearing liabilities at the end of the reporting

period. Contract liabilities represent where a customer has paid consideration or payment is due, but

Tietoevry has not yet transferred goods or services to the customer.


ACCOUNTING POLICIES
Trade and other payables are presented as current liabilities if they are due to be settled within 12 months from the end of the reporting period. They are recognized at their fair value and subsequently measured at amortized cost using the effective interest method.
The carrying amount of the trade and other payables approximate their fair values due to their short- term nature.


EUR million	31 Dec 2022	31 Dec 2021
Non-current
Contract liabilities1)	16.9	29.2
Accruals	4.2	5.5
Total	21.0	34.7

Current
Trade payables	233.9	260.8
Contract liabilities1)	67.2	73.5
Accrued liabilities
Employee-related accruals	193.2	210.5
Interest	4.3	3.8
Other accrued expenses1)	32.7	40.6
Value added tax liabilities	54.5	51.0
Payroll tax liabilities	30.9	32.1
Total	616.7	672.3

1) Tietoevry has aligned its presentation of contract liabilities by including advance payments and certain accruals related to customer

contracts. The comparative periods have been reclassified accordingly. See also note 6.

FINANCIAL RISK MANAGEMENT AND CAPITAL STRUCTURE

This section includes notes related to Tietoevry's financial risk and capital structure management. The

financial risks are monitored and managed via Tietoevry's Group Treasury.

18. Management of financial risks and capital structure

The group's activities expose it to a variety of financial risks: market risk (including currency risk, interest

rate risk and commodity risk), credit risk and liquidity risk. The operative management of the treasury

activities of Tietoevry is centralized into Group Treasury. The Group Treasury is responsible for managing

the Group’s financial risk position and maintaining adequate liquidity. The Treasury Policy, which has been

approved by the Board of Directors, defines the principles for measuring and managing liquidity risk,

interest rate risk, foreign exchange risks and counter-party risk of the Group. The Treasury Policy also

defines the division of responsibilities with regard to financial risk management. The Group reviews and

monitors financial risks on a regular basis.

Market risk

Currency risk management

Transaction risk

Currency risk means the risk that the result or economic situation of the Group changes due to changes in

exchange rates. Foreign trade, Group internal transactions and liquidity management in non-euro

countries generate transaction exposure to the Group. The objective of the Group's currency risk policy is

to secure the profitability of operative business by managing recognized exposures while maintaining

sufficient flexibility to adjust to changing currency markets. The underlying exposure includes financial

items denominated in the non-functional currencies of operating companies, such as internal funding,

foreign currency bank account balances, and estimated cash flows such as firm commitments and future

trade transactions.

Swedish krona, Norwegian krone, Czech koruna, Indian rupee, Polish zloty and US dollar are the main

currencies with this exposure. Other currencies, which do not have material impact on group exposure

individually, are the Ukraine hryvnia and the Russian rouble. During 2022, currency forward contracts were

used to mitigate the risks. Gains and losses from foreign exchange contracts are recognized in the

consolidated income statement.

Group Companies must hedge their identified currency risks with the Group Treasury unless there are legal

restrictions preventing this. The benchmark for the Group’s currency position is a situation where all the

identified currency risks are eliminated. A deviation from this benchmark is defined as an open position.

The following deviations can be made based on the total size of the Group’s gross currency position

(identified currency risks, excluding the hedging transactions):

•+/- 15 %: Group Treasury

•+/- 25 %: Treasury Committee

•Greater deviation: Board of Directors

The overall operational hedging ratio at the end of December 2022 was 98% (101%).

Identified currency transaction risk exposure and sensitivity analysis


EUR million	Loans and Cash	Estimated cash flows	Leases	Total foreign exchange exposure	External foreign exchange hedges	Transaction exposure sensitivity1)	Foreign exchange hedge sensitivity1)	Net effect gain/(loss)
SEK
31 Dec 2022	-96.2	24.0	—	-72.2	72.7	9.6	-7.3	2.3
31 Dec 2021	-125.6	23.4	—	-102.2	103.6	12.6	-10.4	2.2

NOK
31 Dec 2022	-25.5	16.8	—	-8.7	5.0	2.6	-0.5	2.1
31 Dec 2021	17.1	10.8	—	27.9	-31.0	-1.7	3.1	1.4

PLN
31 Dec 2022	-1.1	-23.6	1.4	-23.3	23.5	—	-2.4	-2.4
31 Dec 2021	-0.7	-8.8	0.7	-8.8	8.9	—	-0.9	-0.9

CZK
31 Dec 2022	-1.6	-52.6	2.6	-51.6	54.2	-0.1	-5.4	-5.5
31 Dec 2021	-0.2	-47.6	5.9	-41.9	48.4	-0.6	-4.8	-5.4

INR
31 Dec 2022	—	-34.9	—	-34.9	34.7	—	-3.5	-3.5
31 Dec 2021	—	-31.1	—	-31.1	31.0	—	-3.1	-3.1

USD
31 Dec 2022	-1.1	2.8	—	1.7	-3.0	0.1	0.3	0.4
31 Dec 2021	-0.6	0.5	—	-0.1	-0.5	0.1	0.1	0.1

Other
31 Dec 2022	-1.1	—	—	-1.1	—	0.1	—	0.1
31 Dec 2021	-1.9	—	—	-1.9	—	0.2	—	0.2

1) The maximum pre-tax effect (EUR million) of 10% negative change in exchange rates on the Group's foreign exchange position over the

following year.

Translation risk

According to the Treasury Policy, hedging translation exposure is subject to the Board of Directors'

decision. Exposure includes the acquisition price, share capital and restricted and non-restricted reserves

of subsidiaries in non-euro countries, as well as the result of the period. NOK 16 369 and SEK 6 673 million

exposure forms the majority of the translation risk. The translation position was unhedged at the end of

2022. See also note 25.

Interest rate risk management

The most significant part of the Group's interest rate risk arises from its borrowings and financial

investments. The objective of interest rate risk management is to minimize the effect of interest rate

fluctuations on Tietoevry’s annual results and economic positions. Group Treasury is responsible for the

monitoring and operative management of the Group’s interest rate position. The interest rate position

includes loans, financial investments and interest rate derivative contracts. According to the Treasury

Policy, 30 months is defined as a benchmark for the Group's interest rate position, in terms of weighted

average time to re-pricing. At the end of 2022, the ratio was at 19 months (24 months in 2021).


31 Dec 2022 EUR million	Amount	Average rate, %	Rate sensitivity1)
Capital markets2)	-398.4	1.8	—
Money markets	244.6	0.4	0.1
Other loans	-348.0	2.9	-3.2
Other receivables	28.0	3.1	—
Leasing	-207.4	6.0	2.1


31 Dec 2021 EUR million	Amount	Average rate, %	Rate sensitivity1)
Capital markets2)	-397.8	1.8	—
Money markets	318.7	0.2	0.1
Other loans	-360.2	0.9	-3.3
Other receivables	28.8	3.5	—
Leasing	-200.9	4.3	-2.0

1) The maximum pre-tax effect (EUR million) of 1% rise in interest rates on the Group's net interest expenses over the following year.

2) The duration of underlying instruments was 2.2 years (3.2 in 2021).

Commodity risk management

The majority of electricity procurement has been centralized to selected suppliers and under the selected

model, the Group does not enter into any new electricity derivative agreements in its own name.

Credit risk management

Credit risk is managed on Group level. Credit risk derives from financial investments, derivative contracts

and customer-related risks, such as accounts receivable. Group Treasury maintains a list of approved

counterparts for commercial paper investments and other financial transactions. Core banks of the Group

should have a minimum long-term rating of Baa3 or BBB-.

Customer-related credit risks are assessed based on payment history and financial strength in accordance

with the Credit Policy. The Credit Policy defines the limits for the acceptable level of customer credit risk in

terms of invoicing schedules and payment terms. In addition, the Group uses customer credit insurance,

given by global credit insurer, as a collateral. Excluded from credit insurance cover are all Public Sector

customers and some other selected customers. In case of default by a customer under insurance, the

credit insurer covers 90% of the open accounts receivable, or up to customer specific limit received from

credit insurer. The maximum exposure to customer related credit risk at the reporting date is the carrying

value of trade receivables. There are no major concentrations of credit risk in the Group, whether through

exposure to individual customers, specific industry sectors and/or regions.

Liquidity risk management and funding

Liquidity risk management and funding principles are defined in the Treasury Policy. One of the key tasks of

Group Treasury is to secure adequate funding for the Group. The Group has a committed EUR 250 million

revolving credit facility, which matures in 2027 with 2 optional extension years. The Group has also

overdraft facilities and an uncommitted EUR 250 million commercial paper programme available to

maintain flexibility in funding. In addition, the Group has two facilities for the sale of receivables, EUR 50

million and SEK 500 million.

Debt structure


31 Dec 2022		Amount drawn	Amount available	Maturity structure
EUR million		Amount drawn	Amount available	2023	2024	2025	2026	2027	2028–
Loans	Bonds	400.0	—	—	100.0	300.0	—	—	—
	Commercial paper programme	—	—	—	—	—	—	—	—
	Revolving credit facility	—	250.0	—	—	—	—	—	—
	Liabilities towards joint ventures	3.5	—	3.5	—	—	—	—	—
	European Investment Bank	65.4	—	13.1	13.1	13.1	13.1	13.1	—
	Syndicated term loan	254.2	—	80.0	174.2	—	—	—	—
	Other loans	28.7	—	14.1	8.6	4.7	1.2	0.1	—
		751.8	250.0	110.7	295.9	317.7	14.2	13.2	—

	Interest payments	—	—	17.1	13.2	7.5	1.0	0.5	—

Trade payables	Outflow	233.9	—	233.9	—	—	—	—	—

Other liabilities	Lease liabilities	241.2	—	61.8	47.1	32.7	23.7	19.1	56.8

Total		1 226.9	250.0	423.4	356.2	357.9	38.9	32.8	56.8


31 Dec 2021		Amount drawn	Amount available	Maturity structure
EUR million		Amount drawn	Amount available	2022	2023	2024	2025	2026	2027–
Loans	Bond	400.0	—	—	—	100.0	300.0	—	—
	Commercial paper programme	—	—	—	—	—	—	—	—
	Revolving credit facility	—	250.0	—	—	—	—	—	—
	Liabilities towards joint ventures	5.1	—	5.1	—	—	—	—	—
	European Investment Bank	78.5	—	13.1	13.1	13.1	13.1	13.1	13.1
	Syndicated term loan	254.2	—	—	80.0	174.2	—	—	—
	Other loans	29.0	—	13.3	8.8	3.9	1.9	0.4	—
		766.8	250.0	31.4	101.9	291.2	315.0	13.5	13.1

	Interest payments	—	—	10.6	9.8	8.6	6.1	—	—

Trade payables	Outflow	260.8	—	260.8	—	—	—	—	—

Other liabilities	Lease liabilities	242.3	—	69.2	47.2	33.2	20.4	13.2	59.0

Total		1 269.8	250.0	372.1	158.9	333.0	341.5	26.8	72.1

Capital management

The objective is to keep the capital structure on a level securing adequate financial flexibility for the

operations. The capital structure of the Group is being continuously monitored through Net debt/EBITDA

ratio. The ratio is calculated by dividing interest-bearing net debt with the last 12 months' EBITDA of the

Group. Net debt/EBITDA ratio is a covenant used in certain funding arrangements. Tietoevry Group is

within limits for this covenant as at the reporting date and comparative period.


	31 Dec 2022	31 Dec 2021
Net debt	679.1	610.6
12 months EBITDA	449.0	557.4
Net debt/EBITDA	1.5	1.1

19. Interest-bearing loans and borrowings

The Group's interest-bearing liabilities consist of bonds, other loans, lease liabilities and cash pool

liabilities towards joint ventures.


ACCOUNTING POLICIES
Interest-bearing loans and borrowings are initially recognized at fair value, net of transaction costs which are recognized in the income statement as interest expenses over the loan term. Debt is classified as short term if it is payable within 12 months, otherwise it is classified as non-current.


EUR million	31 Dec 2022	31 Dec 2021
Non-current
Bonds	398.4	397.8
Other loans	241.0	333.8
Lease liabilities	155.9	144.0
Total	795.3	875.6

Current
Other loans	107.1	26.4
Cash pool liabilities towards joint ventures	3.5	5.1
Lease liabilities	54.1	62.5
Total	164.7	94.0
Total Interest bearing loans and borrowings	960.1	969.6

More information on debt structure and carrying interest rates is disclosed in note 18.

Change in liabilities arising from financing activities


			Non-cash changes
EUR million	31 Dec 2021	Cash flows	Foreign exchange gains and losses	Reclassification	Acquisitions and disposals	New lease contracts	De-recognized contracts	Other	31 Dec 2022
Non-current interest-bearing loans	731.6	-13.1	—	-80.0	—	-0.3	—	1.2	639.4
Current interest-bearing loans	31.5	-1.5	—	80.0	—	0.7	—	—	110.6
Lease liabilities	206.5	-66.3	-7.9	—	-0.1	104.7	-27.0	0.2	210.0
Total	969.6	-81.0	-7.9	—	-0.1	105.0	-27.0	1.4	960.1


			Non-cash changes
EUR million	31 Dec 2020	Cash flows	Foreign exchange gains and losses	Reclassification	New lease contracts	De-recognized contracts	Other	31 Dec 2021
Non-current interest-bearing loans	885.9	-145.8	0.1	-13.1	3.3	—	1.2	731.6
Current interest-bearing loans	39.7	-19.7	—	13.1	—	—	-1.4	31.5
Lease liabilities	243.1	-73.1	4.5	—	46.5	-14.1	0.5	206.5
Total	1 168.7	-238.6	4.6	—	49.8	-14.1	0.3	969.6

20. Leases

Tietoevry Group mainly acts as a lessee and leases premises, IT equipment and cars. In monetary terms,

the highest portion of the Group's lease portfolio is for leasing premises. Tietoevry Group also leases

equipment for data centres to support continuous service delivery to its customers. Leasing a company car

is part of employees' benefit package, the portion of employee share in payment being subject to local HR

policies and varies between 0% to 100%.


ACCOUNTING POLICIES
The Group as a lessee
Initially, lease liabilities are measured at the commencement date at the present value of the lease payments, discounted using the interest rate implicit in the lease, if it can be readily determined. If the rate cannot be readily determined, such as in real estate leases, the incremental borrowing rate is used.
The incremental borrowing rate is defined for each legal entity, differentiated based on lease contract length and updated on a yearly basis, which impacts the value of right-of-use assets, lease liabilities in the statement of financial position, and split between depreciations and interest expenses. Management judgement has been used in determining the incremental borrowing rate that would reflect the rate of interest that Tietoevry group would pay to borrow over similar term, and with similar security, the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment. The average annual incremental borrowing rate applied to discounting future cash flows for existing lease agreements at year-end is 4.7%.
The lease term includes the non-cancellable period for which the Group has the right to use the underlying asset, together with both enforceable: •Periods covered by an option to extend the lease, if the Group is reasonably certain to exercise that option; and •Periods covered by an option to terminate the lease, if the Group is reasonably certain not to exercise that option.
The decision if extension or termination options of lease contracts would be used, is made by the organisation responsible for the underlying asset management and is in line with overall strategy and business development plans.


In determining if either lessor or lessee would incur more than insignificant penalties by using or not using either of the options, the Group considers not only penalties directly defined in contracts, but also wider economic costs, such as, reallocation costs or finding new tenants.
Lease payments include fixed payments, in substance fixed payments, lease payments that depend on index or rate and exercise price of purchase option, if it is reasonably certain to be exercised.
Subsequently, lease liabilities are measured at amortized cost, by increasing or reducing the carrying amount to reflect interest on the lease liability and the lease payments made, respectively. Lease liabilities are remeasured for lease reassessments done or modified to reflect revised in-substance fixed lease payments.
Interest expenses are recognized in profit or loss.
Right-of-use assets are initially measured at the amount equal to lease liability: •less payments made at or before commencement date and lease incentives received adding initial direct costs; and •adjusting by estimated dismantling or site restoration costs.
Subsequently, right-of-use assets are measured applying a cost model, where asset cost is reduced by accumulated depreciation and impairment losses and adjusted by remeasurement of a respective lease liability.
Right-of use assets are depreciated over the shorter period of lease term and useful life of the underlying asset.
Tietoevry has applied the recognition exemptions allowed by the standard not to capitalize short- term leases (lease term less than 1 year at commencement, where there is no purchase option) and leases of low value assets. Typically, such assets would include lease of individual IT equipment and office furniture. Payments for such assets are recognized in profit or loss on a straight-line basis during the lease term.
The Group has also elected to separate the service component of a lease for all asset types, except for cars, where only variable lease payments are excluded from the measurement of lease liability. Non-lease components are separated from lease payments on a fair market value basis. If such information is not readily available, management judgement has been applied in estimating the value.


The Group presents cash payments for the principal portion of lease liabilities as cash flows from financing activities and interest portion within cash flows from operating activities. Short-term lease payments, payments for leases of low-value assets and variable lease payments not included in the measurement of the lease liability are presented as part of operating activities.
The Group as a lessor
If an arrangement conveys a right to use a specific asset to a purchaser, often together with related services, the assets, mainly technical equipment, are classified as embedded finance leases. Further the lease is classified either as Operating lease or Finance lease. As of 31 December 2022, all such cases have been classified as Finance leases. Sales derived from these embedded finance leases are recognized at the beginning of the agreement period. The annual payments are disclosed as amortization of the finance lease loan receivable and interest income.


ACCOUNTING ESTIMATES AND JUDGEMENTS
Lease term, use of extension and termination options
Management judgement has been applied in determining the lease term, where there are either extension or termination options included in lease contracts. Lease terms are negotiated on an individual basis and contain a wide range of renewal and termination options. As of 31 December 2022, weighted average residual lease term for lease contracts is 5.4 years (residual terms vary between 0.1–17.3 years). The lease term for premises leases referred to as "evergreen leases" or "rolling" leases has been determined based on the internally defined site categories. Those take into consideration the number of full time employees and strategic importance of the site, allowing a longer lease term for larger Level 1 sites (5 years and more) and recognizing more flexibility for smallest Level 1 sites (1 year, short-term lease exemption from balance sheet treatment not applied). Total annual leasing expenses (depreciation and interest) for such leases amounted to EUR 7.0 million during year 2022, weighted average remaining lease term being 2.3 years.

Leases impact on income statement


EUR million		31 Dec 2022	31 Dec 2021
Tietoevry as a Lessee	Buildings	-54.2	-57.7
Tietoevry as a Lessee	Equipment and machinery	-12.3	-13.5
	Depreciation expenses of right-of-use assets	-66.4	-71.2

Tietoevry as a Lessee	Impairment losses	—	-5.3

Tietoevry as a Lessee	Variable lease payments	-7.9	-6.6
Tietoevry as a Lessee	Short-term leases and low value leases	-5.2	-4.0
	Other income and expenses	-13.1	-10.6

Tietoevry as a Lessor	Revenue	0.8	2.0
Tietoevry as a Lessor	Materials and services	-0.7	-1.8

Tietoevry as a Lessor	Finance income on the net investment in lease	0.1	0.1
Tietoevry as a Lessee	Interest expense on lease liabilities	-9.7	-9.5
	Expenses reported in financial items	-9.6	-9.4

	Total impact on income statement from leasing contracts	-89.0	-96.2

Leases impact on statement of cash flows


EUR million		31 Dec 2022	31 Dec 2021
Tietoevry as a Lessee	Interest paid (cash flow from operating activities)	-9.4	-9.0
	Principal paid (cash flow from financing activities)	-66.3	-73.1

Leases impact on the statement of financial position

Right-of-use assets


EUR million		Buildings	Machinery and Equipment	Total
Tietoevry as a Lessee	31 Dec 2021	171.5	21.0	192.4
	Divestment of subsidiary	-0.1	—	-0.1
	Additions1)	95.7	9.6	105.3
	Terminations	-19.9	-1.8	-21.7
	Depreciation	-54.2	-12.3	-66.4
	Currency translation differences	-7.1	-0.5	-7.6
	31 Dec 2022	185.9	16.0	201.9


EUR million		Buildings	Machinery and Equipment	Total
Tietoevry as a Lessee	31 Dec 2020	208.6	23.1	231.7
	Additions1)	33.2	14.1	47.3
	Terminations	-11.0	-2.9	-13.8
	Depreciation	-57.7	-13.5	-71.2
	Impairment	-5.3	—	-5.3
	Subleased	1.4	-1.2	0.2
	Currency translation differences	4.3	0.2	4.4
	31 Dec 2021	171.5	21.0	192.4

1) Additions represent increase in right-of-use assets both due to new lease contracts, as well as remeasurements and lease modifications.

Lease liabilities


EUR million	31 Dec 2022	31 Dec 2021
Current	54.1	62.5
Non-current	155.9	144.0
Total	210.0	206.5

The movement in lease liabilities over reporting period is presented in note 19.

The maturity structure of contractual undiscounted lease payments is presented in note 18.

Lease receivables

Net investment in lease


EUR million	31 Dec 2022	31 Dec 2021
Current	2.4	2.9
Non-current	0.2	2.7
Total	2.6	5.6

Maturity analysis - contractual undiscounted cash flows for finance leases


EUR million	31 Dec 2022	31 Dec 2021
Within one year	2.4	3.0
One to two years	0.2	2.2
Two to three years	—	0.5
Three to four years	—	—
Four to five years	—	—
Total undiscounted lease receivable	2.7	5.7
Unearned finance income	0.0	-0.1
Net investment in lease	2.6	5.6

21. Financial income and expenses

Finance income and expenses comprise interest, foreign exchange gains and losses and other financial income and expenses, such as fees to banks.


2022	Interest income	Interest expenses	Foreign exchange gains and losses	Other financial income	Other financial expenses	Total
EUR million	Interest income	Interest expenses	Foreign exchange gains and losses	Other financial income	Other financial expenses	Total
Financial assets at fair value through profit or loss	—	—	-7.8	—	—	-7.8
Financial assets at amortized cost	3.6	—	6.4	0.3	—	10.3
Financial liabilities measured at amortized cost	—	-22.6	—	—	-3.4	-25.9
Net defined benefit obligation	—	-0.2	—	—	—	-0.2
Total	3.6	-22.8	-1.4	0.3	-3.4	-23.7


2021	Interest income	Interest expenses	Foreign exchange gains and losses	Other financial income	Other financial expenses	Total
EUR million	Interest income	Interest expenses	Foreign exchange gains and losses	Other financial income	Other financial expenses	Total
Financial assets at fair value through profit or loss	—	—	-0.1	—	—	-0.1
Financial assets at amortized cost	1.8	—	-4.7	0.1	—	-2.7
Financial liabilities measured at amortized cost	—	-22.7	—	—	-2.3	-25.0
Net defined benefit obligation	—	-0.3	—	—	—	-0.3
Total	1.8	-23.0	-4.8	0.1	-2.3	-28.2

In addition, foreign exchange gains and losses included in the operating profit were EUR 9.9 (3.9) million in 2022.

22. Financial assets and liabilities - carrying amount and fair value and fair value

hierarchy

Financial assets and liabilities of the Group consist of trade receivables, cash and cash equivalents, lease

receivables and payables, trade payables, derivatives (see note 23), bonds and other interest-bearing

liabilities (see note 19).


ACCOUNTING POLICIES
All financial assets and liabilities are initially recognized at fair value, and subsequently classified either as financial assets at amortized cost or financial assets through profit or loss.
Financial assets at amortized cost
Financial assets are accounted at amortized cost only when the asset is held within a business model with the objective to collect contractual cash flows, which are solely payments of principal and interest.
This category of financial assets includes trade and other receivables, cash and cash equivalents, lease receivables and other interest-bearing receivables.
Financial assets in this category are carried at amortized cost in accordance with the effective interest method with interest income recognized in profit or loss under financial items, see note 21.
Financial liabilities at amortized cost
Financial liabilities under this category are initially recognized at fair value, net of transaction costs directly associated with the borrowing. For interest-bearing liabilities, after initial recognition, liabilities are measured using effective interest rate method, taking into account any issue costs and any discount or premium on settlement. Related interest expenses are recognized in profit or loss under financial items, see note 21.
Financial assets and liabilities at fair value through profit or loss
Financial assets and liabilities in this category are recognized on the statement of financial position at their fair value with gains or losses resulting from changes in the fair value, being recognized in income statement.
This category mostly consists of derivatives. Gains or losses from the revaluation of derivative contracts that relate to financial items (loans, cash, leases) are presented as financing costs, see note 21, whereas gains or losses from derivatives, mostly currency forward contracts that relate to operating activities are included in operating profit.


Fair value measurement is also applicable to trade receivables sold under non-recourse factoring agreements, which have not yet been de-recognized from the statement of financial position as of the reporting date.
Other investments include unlisted shares, where their fair value cannot be measured reliably and, therefore, the cost is considered to be a reasonable approximation of their fair value.
Determination of fair values
The classification of financial assets and liabilities measured at fair value in the statement of financial position, has been done on three hierarchy levels: •Level 1: quoted prices in active markets for given or identical assets or liabilities that the entity can access at the measurement date; •Level 2: inputs that are observable for the asset or liability, either directly or indirectly; •Level 3: unobservable inputs for the asset or liability.
The carrying amount of all financial assets and liabilities, carried at amortized cost is considered to provide a reasonable approximation of their fair value, due to the short maturity and liquid nature of these items, except for bonds which are traded on an active market.
The fair values of derivatives are determined based on prevailing marked quotes at the reporting date. Foreign exchange derivatives' fair values are calculated according to foreign exchange and interest rates on the closing date.

Financial assets


EUR million	Note	31 Dec 2022	31 Dec 2021	Fair value hierarchy
Financial assets at fair value through profit or loss
Non-current
Other financial assets at fair value through profit or loss		0.6	0.6	Level 3
Current
Trade receivables at fair value through profit or loss		20.2	19.1	Level 2
Current derivative receivables	23	3.4	4.2	Level 2
Financial assets at amortized cost
Non-current
Other loan receivables, interest- bearing		15.0	15.7	Level 2
Lease receivables	20	0.2	2.7	Level 2
Current
Other loan receivables, interest- bearing	14	13.6	13.8	Level 2
Lease receivables	20	2.4	2.9	Level 2
Trade receivables	14	408.9	372.8	Level 2
Accrued interest income	14	0.0	0.1	Level 2
Cash and cash equivalents	24	249.7	323.8	Level 2
Total		714.1	755.5

Financial liabilities


EUR million	Note	31 Dec 2022	31 Dec 2021	Fair value hierarchy
Financial liabilities at fair value through profit or loss
Current derivative liabilities	23	2.0	0.8	Level 2
Financial liabilities measured at amortized cost
Non-current
Lease liability	19, 20	155.9	144.0	Level 2
Bonds1)	19	398.4	397.8	Level 1
Other loans	19	241.0	333.8	Level 2
Current
Trade payables	17	233.9	260.8	Level 2
Accrued interest	17	4.3	3.8	Level 2
Lease liability	19, 20	54.1	62.5	Level 2
Loans	19	110.6	31.5	Level 2
Total		1 200.3	1 235.0

1) Fixed rate bond where carrying amount of EUR 398.4 million has not been adjusted to match the fair value of EUR 378.8 million. Fair value of

the bond has been calculated based on the prevailing market rate at the end of the reporting period.

There has been no movement between the fair value hierarchy levels during 2022.

23. Derivatives

Tietoevry Treasury uses currency forward and interest rate swap contracts to manage identified currency

and interest rate risks. More information on financial risk management is in note 18 and for the accounting

policies applied in note 22. Derivatives are used for economic purposes only.

Nominal amounts of derivatives

Includes the gross amount of all nominal values for contracts that have not yet been settled or closed. The

amount of nominal value outstanding is not necessarily a measure or indication of market risk, as the

exposure of certain contracts may be offset by other contracts.


EUR million	31 Dec 2022	31 Dec 2021
Foreign exchange forward contracts	406.5	479.7
Interest rate swaps	40.0	—

Fair values of derivatives


EUR million	31 Dec 2022	31 Dec 2021
Gross positive fair values, foreign exchange forward contracts	3.4	4.2
Gross negative fair values, foreign exchange forward contracts	-2.0	-0.8
Gross positive fair values, interest rate swaps	2.9	—
Gross negative fair values, interest rate swaps	-2.9	—
The net fair values at the reporting date	1.4	3.2

The fair values of foreign exchange derivatives are calculated according to foreign exchange and interest

rates on the closing date. All outstanding currency derivative contracts will expire within 12 months after

the reporting date.

The fair values of interest rate swaps are based on values of corresponding agreements confirmed by the

bank.

Offsetting financial assets and liabilities

Agreements with derivatives' counterparties are based on ISDA Master Agreements or on agreements with

similar content with regards to offsetting financial assets and liabilities.

Based on the terms of these agreements, offsetting is possible only under certain circumstances, such as,

default of either of the parties or other force majeure events. If any of those occur, then the net position

owing/receivable to a single counterparty will be taken as owing.


	Gross amounts of recognized financial instruments in the statement of financial position1)	Related amounts not set off in the statement of financial position
31 Dec 2022		Financial Instruments	Cash collateral received	Net amount
EUR million		Financial Instruments	Cash collateral received	Net amount
Derivative financial assets
Foreign exchange forward contracts	3.4	-1.6	—	1.7
Interest rate swaps	2.9	-2.9	—	—
Derivative financial liabilities
Foreign exchange forward contracts	-2.0	1.6	—	-0.4
Interest rate swaps	-2.9	2.9	—	—

1) No amounts have been set off in the statement of financial position


	Gross amounts of recognized financial instruments in the statement of financial position1)	Related amounts not set off in the statement of financial position
31 Dec 2021		Financial Instruments	Cash collateral received	Net amount
EUR million		Financial Instruments	Cash collateral received	Net amount
Derivative financial assets
Foreign exchange forward contracts	4.2	-0.8	—	3.4
Derivative financial liabilities
Foreign exchange forward contracts	-0.8	0.8	—	-0.1

1) No amounts have been set off in the statement of financial position

24. Cash and cash equivalents

Cash and cash equivalents comprise cash balances and cash deposits with banks and other liquid

investments that are readily convertible to a known amount of cash within three months and which are

subject to an insignificant risk of changes in value. Bank overdrafts are included in current liabilities in the

statement of financial position. Cash and cash equivalents are carried at nominal value, which corresponds

to their fair value.


EUR million	31 Dec 2022	31 Dec 2021
Cash in hand and at bank	233.4	309.1
Short-term deposits	16.3	14.6
Total	249.7	323.8

Cash and cash equivalents includes restricted cash of EUR 14.0 million held within bank accounts in

Ukraine.

25. Share capital and reserves

Tietoevry has one class of shares, and each share has one vote at the Annual General Meeting and equal

rights to dividend and other distribution of assets. The company’s Articles of Association includes a voting

constraint at the Annual General Meeting that no-one is entitled to vote on more than one-fifth of the votes

represented at the Annual General Meeting.

Tietoevry’s shares have no nominal value and their book value counter value is one euro. All issued shares

have been fully paid.


ACCOUNTING POLICIES
Dividends proposed by the Board of Directors are not deducted from distributable equity until approved by the Annual General Meeting of Shareholders.
When the company's own shares are repurchased, the amount of the consideration paid, including directly attributable costs, is recognized as a deduction in equity.


EUR million	Number of shares	Share capital	Share issue premiums and other reserves	Invested unrestricted equity reserve	Total
1 Jan 2021	118 414 793	76.6	42.1	1 203.5	1 322.2
Purchase of own shares	-140 000	—	—	—	—
Shares delivered from the share-based incentive plans1)	143 391	—	—	—	—
Translation difference	—	—	-0.6	—	-0.6
31 Dec 2021	118 418 184	76.6	41.5	1 203.5	1 321.6
Purchase of own shares	-145 000	—	—	—	—
Shares delivered from the share-based incentive plans1)	140 119	—	—	—	—
Translation difference	—	—	-2.2	—	-2.2
31 Dec 2022	118 413 303	76.6	39.3	1 203.5	1 319.4

Own shares2)	12 468
Total number of shares on 31 Dec 2022²⁾	118 425 771

1) Shares granted from own shares without impact on share capital.

2) On 31 Dec 2021, the number of shares in the company's possession totalled 7 587 and the total number of shares was 118 425 771.

Share capital

The share subscription price received in connection with the share issues is entered in share capital to the

extent that it has not been recorded in the invested unrestricted equity reserve according to the share

issue decision.

Share issue premiums and other reserves

Share issue premiums and other reserves include share issue premium of the parent company and the

statutory reserve fund of Tieto Sweden AB.

Invested unrestricted equity reserve

The invested unrestricted equity reserve includes the subscription price of shares to the extent that it has

not been recorded in share capital according to specific resolution.

Retained earnings

In addition to accumulated profits less dividends paid out, retained earnings include the following:

•Costs of share-based payments which are accounted for as equity-settled and recognized as an

employee benefit expense during the vesting period with a corresponding entry in equity. More

information is disclosed in note 8.

•Remeasurements of the defined benefit plans arising from experience adjustments and changes

in actuarial assumptions. More information is disclosed in note 15.

•Treasury shares. In 2022, Tietoevry repurchased 145 000 own shares which were further

delivered from the share-based incentive plans.

•Cumulative translation differences arising from the translation of foreign Group companies’

assets and liabilities into euro; and

•other retained earnings and losses.

The cumulative translation differences were EUR -193.5 (-66.0) million. The translation differences in Other

comprehensive income were EUR -126.7 (60.2) million.The majority of these arise on the NOK and SEK

foreign currency translation exposures. In 2022, both currencies weakened against the Euro, NOK by 5.3%

and SEK by 8.5%, resulting in negative translation differences in Other comprehensive income. In 2021,

NOK strengthened by 4.6% whereas SEK weakened by 2.2%, resulting in a positive net effect on the Other

comprehensive income.

Distributable funds

On 31 Dec 2022, the distributable funds of the parent company totalled EUR 1 479.5 million of which

retained earnings were EUR 250.8 million and net profit for the financial year EUR 21.1 million. The Board of

Directors proposes to the Annual General Meeting in 2023 that a dividend of EUR 1.45 per share will be

paid for 2022 (dividend of EUR 1.40 per share paid for 2021).

OTHER INFORMATION

This section includes information about the Group structure, joint ventures, related parties and

commitments.

26. Divestments

In 2022, Tietoevry sold its Russian operations through a local management buy-out. With this transaction,

Tietoevry ended all its local operations in Russia and transitioned all its responsibilities including

employees, customers, suppliers, legal and regulatory to the new owners. The loss recognized on the

disposal was EUR 9.1 million.

In 2021, Tietoevry sold its Oil & Gas software business as well as the software businesses Alystra, Jydacom

and TRYGG/2000. The businesses disposed of were reported as part of the Industry Software segment.

Both divestments were part of Tietoevry’s strategy to seek focus and scale.


ACCOUNTING POLICIES
Disposed operations are consolidated until the point in time when control is transferred. Where the disposed operation is part of a cash-generating unit (CGU) to which goodwill has been allocated, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash- generating unit retained.
Assets held for sale
Non-current assets are classified as held for sale if their carrying amounts are expected to be recovered principally through sale and the sale is highly probable. From the date of classification, the assets are measured at the lower of the carrying amount and the fair value less costs to sell, and the recognition of depreciation is discontinued.

Sale of Oil & Gas software business in 2021

In February 2021, Tietoevry announced an agreement with Aucerna, a Quorum Software affiliate, to sell its

Oil & Gas software business. The transaction was completed in June 2021, with a minor part of asset

transfers completed in early 2022. Through this transaction, the Oil & Gas software business will have

greater global market reach and growth opportunities. The Oil & Gas software business comprises

hydrocarbon management, personnel and material logistics software and related services with installations

in more than 50 countries. Revenue of the divested businesses amounted to around EUR 50 million in 2020

and the number of employees was around 430.

With a consideration of EUR 156.8 million including adjustments, a capital gain of EUR 73.3 million was

recognized. The cash payments in total amounted to EUR 154.7 million. In addition, Tietoevry received a

cash compensation of EUR 2.1 million subsequent to the completion of asset transfers taking place in early

2022. The following table summarizes the effects of the sale on the consolidated financial statements for

2021.


EUR million
Intangible and tangible assets	0.2
Right-of-use assets	0.8
Trade and other receivables	14.1
Cash and cash equivalents	7.0
Non-current liabilities	-0.7
Trade and other payables	-14.0
Fair value of net assets	7.4
Allocation of goodwill and intangible assets on disposal	71.3
Total net assets disposed	78.7

Consideration, including adjustments	156.8
Transaction costs	-6.1
Reclassification of foreign currency translation reserve to profit or loss	1.4
Total net assets disposed	-78.7
Gain on disposal, before income tax	73.3
Income tax expense on gain	-0.5
Gain on disposal, after income tax	72.8

Consideration received in cash	154.7
Transaction costs	-5.9
Cash and cash equivalents disposed of	-7.0
Net cash flow on disposal	141.8

Other divestments in 2021

In October 2021, Tietoevry announced an agreement to sell its software businesses Alystra, Jydacom and

TRYGG/2000 to a Nordic software company EG. The transaction was completed in December 2021. These

businesses focus on creating software products for construction, retail, and transport markets. They had

limited operational dependencies with the rest of Tietoevry. Revenue of the divested businesses amounted

to around EUR 13 million in 2020 and the number of employees was around 80 in Finland and Sweden.

With a consideration of EUR 40.6 million including adjustments and FX impact, a capital gain of EUR 30.6

million was recognized. The following table summarizes the effects of the sale on the consolidated financial

statements for 2021.


EUR million
Intangible assets	2.3
Trade and other receivables	0.7
Cash and cash equivalents	2.1
Non-current liabilities	-0.4
Trade and other payables	-2.0
Fair value of net assets	2.6
Allocation of goodwill on disposal	7.0
Total net assets disposed	9.7

Consideration, including adjustments and FX impact	40.6
Transaction costs	-0.1
Reclassification of foreign currency translation reserve to profit or loss	-0.2
Total net assets disposed	-9.7
Gain on disposal, before income tax	30.6
Income tax expense on gain	-2.6
Gain on disposal, after income tax	28.0

Consideration received in cash	39.8
Transaction costs	—
Cash and cash equivalents disposed of	-2.1
Net cash flow on disposal	37.7

27. Subsidiaries

Subsidiary shares owned by the Parent company


Company name	Domicile	Parent company's holding %	31 Dec 2022 Book value in the Parent company EUR million
EVRY Card Issuing AS	Norway	100.0	77.4
EVRY Card Payments AS	Norway	100.0	0.7
EVRY Card Services AS	Norway	100.0	84.0
Fellesdata AS	Norway	100.0	—
Infopulse Brasil Servicos Technologicos Ltda.	Brazil	1.0	0.0
Tieto Austria GmbH	Austria	100.0	0.8
Tieto (Beijing) Technology Co., Ltd.	China	100.0	0.8
Tieto China Co., Ltd.	China	100.0	4.3
Tieto Germany GmbH	Germany	100.0	0.5
Tieto Global Oy	Finland	100.0	1.1
Tieto Great Britain Ltd.	Great Britain	100.0	0.5
Tieto Latvia SIA	Latvia	100.0	15.2
Tieto Lietuva UAB	Lithuania	100.0	2.6
Tieto Netherlands Holding B.V.	Netherlands	100.0	24.5
Tieto Poland Sp. z o.o	Poland	100.0	3.3
Tieto Support Services Sp. z o.o.	Poland	100.0	0.4
Tieto Sweden AB	Sweden	100.0	919.3
TietoEnator Inc.	The United States	100.0	8.0
TietoEVRY Accounting AS	Norway	100.0	16.7
Tietoevry Banking Finland Oy	Finland	100.0	1.3
Tietoevry Connect Czechia s.r.o.	Czech Republic	100.0	7.5
Tietoevry Connect Finland Oy	Finland	100.0	48.9
Tietoevry Connect Slovakia s.r.o.	Slovakia	15.0	0.0
Tietoevry Czechia s.r.o.	Czech Republic	100.0	0.5
Tietoevry Czechia Support Services s.r.o.	Czech Republic	100.0	—
Tietoevry Denmark A/S	Denmark	100.0	6.5
Tietoevry DK A/S	Denmark	100.0	1.6
Tietoevry Estonia AS	Estonia	100.0	0.3
Tietoevry Finland Oy	Finland	100.0	87.1
Tietoevry Finland Support Services Oy	Finland	100.0	1.2


TietoEVRY Norway AS	Norway	100.0	1 007.9
Tietoevry Slovakia s.r.o.	Slovakia	100.0	0.0
TietoIlmarinen Oy	Finland	100.0	0.2
Dormant subsidiaries (3 in total)			0.0
Total			2 322.8

Shares in Group companies owned by subsidiaries


Company name	Domicile	Group holding %	31 Dec 2022 Book value in the Parent company EUR million
Avega Affero AB	Sweden	100.0	0.0
Avega Aqilo AB	Sweden	100.0	0.0
Avega Catalyst AB	Sweden	100.0	0.4
Avega Clarity AB	Sweden	100.0	0.8
Avega Complius AB	Sweden	100.0	0.0
Avega Dinamiko AB	Sweden	100.0	0.1
Avega Edge AB	Sweden	100.0	0.0
Avega Effectus AB	Sweden	100.0	0.8
Avega Group AB	Sweden	100.0	42.3
Avega Kipeo AB	Sweden	100.0	1.5
Avega Kite AB	Sweden	100.0	0.0
Avega Miundo AB	Sweden	100.0	0.0
Avega Mtoni AB	Sweden	100.0	0.1
Avega Nuvem AB	Sweden	100.0	0.0
Avega Primero AB	Sweden	100.0	0.0
Avega Qurio AB	Sweden	100.0	2.6
Avega Scire AB	Sweden	100.0	0.1
Avega Sempai AB	Sweden	100.0	0.5
Avega Senso AB	Sweden	100.0	0.0
Bekk Consulting AS	Norway	100.0	44.3
Emric d.o.o. Beograd	Serbia	100.0	0.0
EVRY Card Services AB	Sweden	100.0	24.1
EVRY Card Services Oy	Finland	100.0	6.1
EVRY Financial Service UK Ltd.	Great Britain	100.0	0.1
EVRY India Pvt. Ltd.	India	100.0	13.6


EVRY Sweden AB	Sweden	100.0	160.1
EVRY USA Corporation Inc.	The United States	100.0	0.4
Eye-share AS	Norway	100.0	2.3
Eye-share Singapore Pte. Ltd.	Singapore	100.0	—
Gjeldsregisteret AS	Norway	100.0	0.0
Infopulse Brasil Servicos Technologicos Ltda.	Brazil	99.0	0.1
Infopulse Bulgaria Ltd.	Bulgaria	100.0	0.1
Infopulse Europe GmbH	Germany	100.0	0.0
Infopulse Poland Sp. z o.o.	Poland	100.0	0.0
Infopulse Ukraine LLC	Ukraine	100.0	0.0
NUK Holding AB	Sweden	100.0	16.8
Tieto India Pvt. Ltd.	India	100.0	45.4
Tieto Ukraine Support Services LLC	Ukraine	100.0	0.8
Tieto U.S. Inc.	The United States	100.0	1.1
Tietoevry Connect Slovakia s.r.o.	Slovakia	85.0	0.0
Tietoevry Financing AB	Sweden	100.0	0.0
Tietoevry Financing AS	Norway	100.0	2.0
Tietoevry Sweden Support Services AB	Sweden	100.0	0.0
Dormant subsidiaries (5 in total)			0.0
Total			366.9

All subsidiaries are included in the Group consolidation. In India, the official reporting period is 1 April –31

March according to the Indian legislation.

28. Interests in joint ventures

Tietoevry has established a few joint ventures in order to be able to produce high quality IT services

required by customers. All other joint ventures are located in Finland except for BuyPass AS that is a

Norwegian company and joint venture of TietoEVRY Norway AS.


ACCOUNTING POLICIES
Companies, where Tietoevry has assumed management responsibility, has contractually based joint control with a third party and has right to the net assets of the company based on the contractual arrangement are included in the consolidated financial statements as joint ventures. Joint ventures are accounted by using the equity method under which the investments in joint ventures are initially recognized at cost and adjusted thereafter to recognize the Group's share of the post-acquisition profits or losses and movements in other comprehensive income. When the Group's share of joint venture’s losses exceeds the carrying amount of the investment, the investment is recognized at zero value in the statement of financial position and the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the joint venture.
Sales to and purchases from joint ventures are made on normal market terms and conditions and at market prices. The Group’s share of the joint ventures’ result for the period is separately disclosed in the income statement.

Joint ventures


	Number of shares		Parent company's share %		Voting right %		Carrying value EUR million
31 Dec	2022	2021	2022	2021	2022	2021	2022	2021
Tieto Esy Oy	7 300	7 300	80.0	80.0	34.0	34.0	5.1	5.1
TietoIlmarinen Oy	—	3 570	—	70.0	—	30.0	—	2.2
BuyPass AS	21 100	21 100	50.0	50.0	50.0	50.0	9.2	9.4
							14.2	16.7

Reconciliation to carrying value


EUR million	2022	2021
Acquisition cost, 1 Jan	11.6	11.2
Translation difference	-0.7	0.4
Acquisition cost, 31 Dec	10.9	11.6

Equity adjustments, 1 Jan	5.1	8.5
Share of results	1.0	1.5
Dividends received	-1.4	-2.1
TietoIlmarinen impairment	-1.4	—
Tietokarhu liquidation	—	-2.8
Equity adjustments, 31 Dec	3.3	5.1

Carrying value, 31 Dec	14.2	16.7

As part of a new partnership agreement with Ilmarinen and a change in the service delivery model, it was

decided to ramp down TietoIlmarinen Oy. In connection with these changes, Tietoevry agreed to acquire

the remaining 30% share of the joint venture from Ilmarinen. Tietoevry Transform recognized an

impairment loss of EUR 1.4 million for the joint venture and bought the remaining 30% share of the

company in December. TietoIlmarinen is consolidated as a 100% owned subsidiary as at 31 December

2022.

Equity adjustments include Group level goodwill of EUR 2.5 (4.5) million.

There are no commitments or contingencies related to joint ventures.

Financial and personnel information of joint ventures

The summarised financial information below represents amounts in joint ventures' financial statements

prepared in accordance with IFRS Standards.


31 Dec 2022	Tieto Esy Oy	TietoIlmarinen Oy	BuyPass AS
EUR million	Tieto Esy Oy	TietoIlmarinen Oy	BuyPass AS
Non-current assets	0.0	—	5.2
Current assets	4.0	—	45.5
Total	4.0	—	50.7

Non-current liabilities	0.0	—	—
Current liabilities	0.7	—	32.5
Total	0.7	—	32.5

Net sales	3.9	1.6	30.7
Expenses	-3.2	-2.4	-27.9
Result before taxes	0.7	-0.8	2.8
Income taxes	-0.2	0.0	-0.7
Net result for the financial year	0.6	-0.8	2.1

Dividends paid to Tietoevry	0.5	—	0.9

Average full-time personnel during the financial year	27	13	25


31 Dec 2021	Tieto Esy Oy	TietoIlmarinen Oy	BuyPass AS
EUR million	Tieto Esy Oy	TietoIlmarinen Oy	BuyPass AS
Non-current assets	0.0	0.0	3.5
Current assets	4.2	1.7	51.1
Total	4.2	1.7	54.5

Non-current liabilities	0.1	0.1	0.1
Current liabilities	0.8	0.5	35.6
Total	0.8	0.7	35.7

Net sales	4.6	3.4	27.9
Expenses	-3.8	-3.6	-24.9
Result before taxes	0.7	-0.2	3.0
Income taxes	-0.2	0.0	-0.8
Net result for the financial year	0.6	-0.2	2.3

Dividends paid to Tietoevry	0.6	0.7	0.9

Average full-time personnel during the financial year	34	25	76

100

29. Related party transactions

Related parties of Tietoevry include subsidiaries, joint ventures and key management of the company and

their close family members. Key management includes the members of the Board of Directors, Leadership

team and the President and CEO.


ACCOUNTING POLICIES
Sales to and purchases from related parties are made on normal market terms and conditions and at market prices. There are no commitments or contingencies on behalf of related parties.

The transactions with related parties are presented below. More information on joint ventures is disclosed

in note 28 and subsidiaries are listed in note 27. Information on management remuneration is disclosed in

note 8.

Transactions and balances with joint ventures


EUR million	31 Dec 2022	31 Dec 2021
Sales	2.9	2.9
Other operating income	1.3	1.6
Purchases	1.3	2.1
Receivables	0.1	0.2
Liabilities including cash pool	4.1	5.0

30. Commitments and contingencies

The Group's commitments and contingencies mostly relate to lease guarantees and performance

commitments.


ACCOUNTING POLICIES
Commitments are disclosed when the Group has a contract where the existence of an obligation will be only confirmed in the future.
Contingent liabilities are possible obligations whose existence will be confirmed by uncertain future events that are not wholly within the control of the entity. They can also include obligations that are not recognized in the statement of financial position because settlement is not probable or their amount cannot be measured reliably.


EUR million	31 Dec 2022	31 Dec 2021
For Tietoevry obligations
Mortgages	—	—
Guarantees
Performance guarantees	81.7	91.6
Payment guarantees	0.5	0.3
Other	0.1	0.2
Other Tietoevry obligations
Lease commitments, not yet commenced	22.3	67.4
Other	0.6	0.6
On behalf of third parties
Guarantees
Performance guarantees	23.4	25.4

In addition to the above, Tietoevry Oyj or other group companies have provided security on behalf of

delivering Group company relating to some major contracts.

31. Events after the reporting period

On 12 January, Tietoevry announced that Klaus Andersen has been appointed as CEO of Tietoevry Banking

effective 1 February 2023. Klaus Andersen will have the overall responsibility for the Banking business at

Tietoevry, including driving a successful outcome for the ongoing strategic review. In his role as CEO of

Tietoevry Banking, Klaus Andersen will report to Kimmo Alkio, CEO of Tietoevry Group, and will become a

member of the Group Executive Management Team.

On 31 January, Tietoevry published the proposals of the Shareholders’ Nomination Board to the Annual

General Meeting 2023, including election and remuneration of the members of the Board of Directors. The

Shareholders’ Nomination Board proposes that the current members of the Board of Directors Tomas

Franzén, Liselotte Hägertz Engstam, Harri-Pekka Kaukonen, Katharina Mosheim, and Endre Rangnes be

reelected and Bertil Carlsén, Elisabetta Castiglioni, Gustav Moss and Petter Söderström be elected as new

members. Timo Ahopelto, Angela Mazza Teufer and Niko Pakalén have informed that they are not available

for re-election.

In November 2022, Tietoevry announced that the company is conducting a strategic review of its Tietoevry

Transform and Tietoevry Connect as a combined business, including a potential sale or listing as a spin-off.

On 13 February, Tietoevry announced that Satu Kiiskinen has been appointed as Managing Director of the

businesses to be called Tietoevry Tech Services. Tietoevry Tech Services is planned to be operational and

report its financials, as a new reportable segment, from the second quarter of 2023. Tietoevry Tech

Services’ Managing Director appointment becomes effective 1 April.

101

PARENT COMPANY´S FINANCIAL STATEMENTS (According to Finnish Accounting Standards)

Income statement


EUR	Note	2022	2021
Net sales	1	179 909 870.30	189 578 776.56

Other operating income	2	32 856 634.87	71 785 655.83
Personnel expenses	3	-16 030 568.68	-15 031 276.18
Depreciation and impairment losses	8, 9	-25 098 781.42	-25 733 340.37
Other operating expenses	4	-226 355 490.51	-324 321 796.64
Operating profit		-54 718 335.44	-103 721 980.80

Financial income and expenses	6	2 411 659.49	18 401 547.19
Profit before appropriations and taxes		-52 306 675.95	-85 320 433.61

Appropriations
Group contribution		85 200 000.00	101 450 000.00
Profit before taxes		32 893 324.05	16 129 566.39

Income taxes	7	-11 803 303.60	-15 060 370.04
Net profit for the financial year		21 090 020.45	1 069 196.35

102

Balance Sheet

Assets


EUR	Note	31 Dec 2022	31 Dec 2021
Non-current assets
Intangible assets	8	155 481 271.96	179 764 483.57
Tangible assets	9	847 520.29	997 029.89
Investments	10	2 335 915 021.23	2 339 345 203.31
Total non-current assets		2 492 243 813.48	2 520 106 716.77

Current assets
Long-term receivables
Receivables from Group companies	11	2 507 111.29	49 963 581.34
Other receivables	11	1 272 407.23	3 076 212.06
		3 779 518.52	53 039 793.40
Current receivables
Accounts receivables	12	7 999.14	83 969.46
Receivables from Group companies	12, 13	235 250 688.44	265 292 666.11
Receivables from joint ventures	12, 13	11 757.06	34 158.12
Other receivables	12	11 410 838.76	4 053 197.00
Prepaid expenses and accrued income	13	9 768 124.26	8 892 784.56
		256 449 407.66	278 356 775.25

Cash and cash equivalents		155 006 594.94	216 229 117.95

Total current assets		415 235 521.12	547 625 686.60

Total assets		2 907 479 334.60	3 067 732 403.37

Shareholders' equity and liabilities


EUR	Note	31 Dec 2022	31 Dec 2021
Shareholders' equity	14
Share capital		76 555 412.00	76 555 412.00
Share issue premiums		13 791 579.51	13 791 579.51
Invested unrestricted equity reserve		1 207 617 299.52	1 207 617 299.52
Retained earnings		250 754 418.13	419 147 178.84
Net profit for the financial year		21 090 020.45	1 069 196.35
Total equity		1 569 808 729.61	1 718 180 666.22

Provisions	15	1 061 707.65	1 581 645.91

Liabilities
Non-current liabilities
Bonds	16	400 000 000.00	400 000 000.00
Loans	16	226 507 692.30	319 584 615.38
Accrued liabilities and deferred income	16	70 279.92	44 705.25
Total non-current liabilities		626 577 972.22	719 629 320.63

Current liabilities	17
Accounts payables		9 123 775.17	19 974 239.66
Liabilities to Group companies	17, 18	591 363 599.28	577 336 540.64
Liabilities to joint ventures	17, 18	4 132 506.81	5 096 656.74
Loans		93 076 923.08	13 076 923.08
Other current liabilities		2 328 410.56	1 757 969.91
Accrued liabilities and deferred income	18	10 005 710.22	11 098 440.58
Total current liabilities		710 030 925.12	628 340 770.61

Total liabilities		1 336 608 897.34	1 347 970 091.24

Total equity and liabilities		2 907 479 334.60	3 067 732 403.37

103

Statement of cash flow


EUR	2022	2021
Cash flow from operating activities
Net loss before appropriations and taxes	-52 306 675.95	-85 320 433.61
Adjustments
Depreciation, amortization and impairment losses	25 098 781.37	25 733 340.37
Net financial income	-2 411 659.49	-18 401 547.19
Profit on sale of subsidiaries	-198 743.08	-36 111 989.92
Other adjustments	—	-2 388 320.43
Other non-cash items	913 617.45	96 987 855.03
Cash generated from operating activities before net working capital	-28 904 679.70	-19 501 095.75

Change in net working capital
Change in current receivables	13 702 680.37	8 482 365.74
Change in current non-interest bearing liabilities	2 272 892.70	-9 232 690.47
Cash generated from operating activities	-12 929 106.63	-20 251 420.48

Interest expenses and other financial expenses paid	-51 054 704.73	-35 108 062.09
Interest income received	29 131 676.90	30 397 232.18
Dividend received and equity refund	14 877 787.08	31 419 280.17
Income taxes paid	-20 584 994.11	-12 352 795.45
Cash flow from operating activities	-40 559 341.49	-5 895 765.67


EUR	2022	2021
Cash flow from investing activities
Purchase of tangible and intangible assets	-666 060.16	-422 891.43
Acquisition of subsidiaries	-65 307.37	-3 057 822.20
Disposal of subsidiaries	2 366 224.68	154 094 585.51
Proceeds on liquidations of shares	—	3 040 447.58
Loans granted	-3 677 530.89	-14 332 556.52
Repayment of other loans	103 703 771.48	62 607 595.40
Cash flow from investing activities	101 661 097.74	201 929 358.34

Cash flow from financing activities
Dividends paid	-165 778 624.20	-156 312 002.88
Purchase of own shares	-3 683 332.86	-3 798 606.55
Repayments of long-term borrowings	-13 076 923.08	-145 800 000.00
Other short-term financing, net	1 902 695.51	-18 091 639.10
Change in intercompany cash pool, net	-43 138 094.63	98 333 829.79
Group contributions received	101 450 000.00	107 911 000.00
Cash flow from financing activities	-122 324 279.26	-117 757 418.74

Change in cash and cash equivalents	-61 222 523.01	78 276 173.93

Cash and cash equivalents at the beginning of period	216 229 117.95	137 952 944.02
Cash and cash equivalents at the end of period	155 006 594.94	216 229 117.95
	-61 222 523.01	78 276 173.93

104

Notes to the parent company´s financial statements (FAS)

Parent company accounting principles

The financial statements of the Parent company Tietoevry Corporation are prepared in accordance with

Finnish Accounting Standards (FAS).

Tietoevry Corporation (business identity code 0101138-5) is a Finnish public limited IT service and

software company organized under the laws of Finland and domiciled in Espoo: Keilalahdentie 2-4, 02101

Espoo, Finland. The company is listed on NASDAQ in Helsinki and Stockholm and the Oslo Stock Exchange.

The Board of Directors approved the financial statements on 14th February 2023. According to the Limited

Liability Companies Act the shareholders have at the Annual General Meeting the right to approve,

disapprove or change the financial statements after the publication.

Foreign currency items

Foreign currency transactions are initially translated at the exchange rate prevailing on the transaction

date. Foreign currency items at the end of the financial period are valued at the exchange rates on the

balance sheet date. Foreign currency items are hedged using derivative contracts.

Exchange gains and losses on net financial liabilities are reported in the income statement under financial

items, while other exchange gains or losses are included in operating profit. Gains and losses arising from

revaluation of derivative contracts are, depending on their nature, reported either under financial items or

operating profit.

Net sales

Net sales include internal service fees and exchange rate differences from accounts receivables, less

indirect taxes such as value added tax.

Other operating income

Other operating income includes gain on sale of subsidiaries, gain on liquidation of joint venture, rental

income and derivative exchange rate gains.

Pension arrangements

The company’s pension obligations are administered through pension insurance institutions. Pension

obligations are fully covered.

Financial instruments

The company applies the Finnish Accounting Act chapter 5 section 2a and records financial instruments

initially at fair value.

See financial instruments accounting policies in the consolidated financial statements note 22.

Appropriations

Group contributions are included in appropriations.

Valuation of fixed assets

Fixed assets are carried at cost less accumulated depreciation. Depreciation is charged according to plan

based on the estimated economic lives of the individual assets and accounted for in accordance with the

straight-line method.

The company applies the following economic lives:


	Years
Intangible assets (software)	3
Other capitalized expenditure	3–10
Trademark	6
Goodwill from operations	10
Buildings	25–40
Data processing equipment1)	3–5
Other machinery and equipment	5
Other tangible assets	5

1) Purchases of personal computers are expensed immediately.

Income taxes

The income statement includes the company’s income taxes based on taxable profit for the period

according to local tax regulations as well as adjustments to prior year taxes. The information related to

deferred tax items is included in the notes.

105

1. Net sales


EUR	2022	2021
Internal service fees	179 909 870.30	189 578 776.56
Total	179 909 870.30	189 578 776.56


Net sales by country	2022	2021
Finland	43 611 994.54	53 864 285.76
Sweden	49 808 301.70	64 833 984.09
Norway	57 735 574.94	45 177 186.76
Other	28 753 999.12	25 703 319.95
Total	179 909 870.30	189 578 776.56

2. Other operating income


EUR	2022	2021
Gain on sale of subsidiaries	199 693.61	36 111 989.92
Rental income	21 446 499.56	23 366 256.76
Gain on liquidation of joint venture	—	3 040 447.58
Other income	11 210 441.70	9 266 961.57
Total	32 856 634.87	71 785 655.83

Capital gain on sale of subsidiaries; see note 26 in Notes to the consolidated financial statements.

3. Personnel expenses


EUR	2022	2021
Wages and salaries	12 887 110.65	12 630 837.81
Pension expenses	2 662 639.49	1 818 608.30
Other pay-related statutory social costs	480 818.54	581 830.07
Total	16 030 568.68	15 031 276.18

The parent company had an average of 98 employees during 2022 and 105 employees in 2021.

4. Other operating expenses


EUR	2022	2021
Information and communication technology	28 141 635.67	26 785 819.96
Internal service fees	134 857 732.68	137 493 025.25
Premises related costs	21 710 264.92	21 941 052.88
Professional services and marketing	17 540 936.76	22 250 204.74
Derivative exchange rate losses on other expenses	11 438 526.19	7 208 200.31
Merger loss	—	98 084 192.05
Other operating expenses	12 666 394.29	10 559 301.45
Total	226 355 490.51	324 321 796.64

Fees to auditors


EUR	2022	2021
Audit fees	709 650.00	700 000.00
Audit related fees	84 080.00	100 000.00
Tax consultation	72 000.00	100 000.00
Other services	315 000.00	—
Total	1 180 730.00	900 000.00

5. Management remuneration

See note 8 in Notes to the consolidated financial statements.

106

6. Financial income and expenses


EUR	2022	2021
Dividend income
Dividend income from Group companies	13 895 416.25	27 160 474.47
Dividend income from joint ventures	532 924.57	1 255 125.92
Dividend income from other companies	256.26	98.18
	14 428 597.08	28 415 698.57

Other interest and financial income
From Group companies	6 423 300.72	7 263 893.65
From other companies	49 678 352.80	40 838 966.13
	56 101 653.52	48 102 859.78

Investment write-downs	-603 132.00	—

Interest and other financing expenses
To Group companies	-3 390 788.99	-880 201.89
To other companies	-64 124 670.12	-57 236 809.27
	-67 515 459.11	-58 117 011.16

Total	2 411 659.49	18 401 547.19

7. Income taxes


EUR	2022	2021
Taxes for the financial period / appropriations	17 040 000.00	20 290 000.00
Taxes for the financial period / regular operations	-9 474 378.78	-10 317 209.58
Taxes for the previous years	4 237 682.38	5 087 579.62
Total	11 803 303.60	15 060 370.04

107

8. Intangible assets


EUR	31 Dec 2022	31 Dec 2021
Intangible rights
Acquisition cost, 1 Jan	24 249 592.04	24 249 592.04
Acquisition cost, 31 Dec	24 249 592.04	24 249 592.04
Accumulated amortization, 1 Jan	16 387 290.14	14 369 529.35
Amortization for the period	2 017 760.79	2 017 760.79
Accumulated amortization, 31 Dec	18 405 050.93	16 387 290.14
Book value, 31 Dec	5 844 541.11	7 862 301.90

Goodwill
Acquisition cost, 1 Jan	212 149 583.27	212 149 583.27
Acquisition cost, 31 Dec	212 149 583.27	212 149 583.27
Accumulated amortization, 1 Jan	43 969 711.93	22 754 753.65
Amortization for the period	21 214 958.28	21 214 958.28
Accumulated amortization, 31 Dec	65 184 670.21	43 969 711.93
Book value, 31 Dec	146 964 913.06	168 179 871.34

Other capitalized expenditures
Acquisition cost, 1 Jan	19 825 670.96	19 668 704.41
Additions	389 225.93	161 498.79
Disposals	—	-4 532.24
Reclassifications	-484.50	—
Acquisition cost, 31 Dec	20 214 412.39	19 825 670.96
Accumulated amortization, 1 Jan	16 103 360.63	14 595 158.58
Amortization for the period	1 439 233.97	1 508 202.05
Accumulated amortization, 31 Dec	17 542 594.60	16 103 360.63
Book value, 31 Dec	2 671 817.79	3 722 310.33

Total	155 481 271.96	179 764 483.57

9. Tangible assets


EUR	31 Dec 2022	31 Dec 2021
Land
Acquisition cost, 1 Jan	60 270.13	60 270.13
Acquisition cost, 31 Dec	60 270.13	60 270.13

Machinery and equipment
Acquisition cost, 1 Jan	33 587 323.10	33 332 668.61
Additions	276 834.23	261 392.63
Disposals	—	-6 738.14
Reclassifications	484.50	—
Acquisition cost, 31 Dec	33 864 641.83	33 587 323.10
Accumulated depreciation, 1 Jan	32 687 933.64	31 695 514.40
Depreciation for the period	426 828.33	992 419.24
Accumulated depreciation, 31 Dec	33 114 761.97	32 687 933.64
Book value, 31 Dec	749 879.86	899 389.46

Other tangible assets
Acquisition cost, 1 Jan	37 370.30	37 370.30
Acquisition cost, 31 Dec	37 370.30	37 370.30
Book value, 31 Dec	37 370.30	37 370.30

Total	847 520.29	997 029.89

108

10. Investments


EUR	31 Dec 2022	31 Dec 2021
Subsidiary shares
Acquisition cost, 1 Jan	2 335 769 623.87	2 550 302 170.91
Additions	65 307.37	6 797 822.20
Disposals	-2 892 357.45	-221 330 369.24
Reclassifications	802 239.50	—
Impairment	-603 132.00	—
Acquisition cost, 31 Dec	2 333 141 681.29	2 335 769 623.87
Book value, 31 Dec	2 333 141 681.29	2 335 769 623.87

Shares in joint ventures
Acquisition cost, 1 Jan	3 422 133.10	3 422 133.10
Reclassifications	-802 239.50	—
Acquisition cost, 31 Dec	2 619 893.60	3 422 133.10
Book value, 31 Dec	2 619 893.60	3 422 133.10

Other shares and interests
Acquisition cost, 1 Jan	153 446.34	153 446.34
Acquisition cost, 31 Dec	153 446.34	153 446.34
Book value, 31 Dec	153 446.34	153 446.34

Total	2 335 915 021.23	2 339 345 203.31

Subsidiary shares

See note 27 in Notes to the consolidated financial statements.

Joint ventures owned and managed by the parent company

See note 28 in Notes to the consolidated financial statements.

11. Long-term receivables


EUR	31 Dec 2022	31 Dec 2021
Loan receivables from Group companies
Subordinated loan	—	41 267 084.88
Other loan receivables	2 507 111.29	8 696 496.46
Other receivables	1 272 407.23	3 076 212.06
Total	3 779 518.52	53 039 793.40

12. Current receivables


EUR	31 Dec 2022	31 Dec 2021
Receivables from Group companies
Accounts receivable	13 382 546.86	26 504 165.82
Loan receivables	101 516 969.93	130 837 889.40
Other receivables	930 644.34	98 089.66
Group contribution receivables	85 200 000.00	101 450 000.00
Prepaid expenses and accrued income	34 220 527.31	6 402 521.23
Total	235 250 688.44	265 292 666.11

Receivables from joint ventures
Accounts receivable	11 757.06	34 158.12
Total	11 757.06	34 158.12

Receivables from other companies
Accounts receivable	7 999.14	83 969.46
Tax receivable	7 038 202.02	—
Other receivables	4 372 636.74	4 053 197.00
Total	11 418 837.90	4 137 166.46

109

13. Prepaid expenses and accrued income


EUR	31 Dec 2022	31 Dec 2021
Prepaid expenses and accrued income from Group companies
Other	34 220 527.31	6 402 521.23

Prepaid expenses and accrued income from other companies
Licence fees	6 546 933.82	6 427 756.85
Rents	2 290.12	353.34
Social costs	23 393.88	29 464.42
Bond discount and issue costs	1 214 000.23	1 200 023.09
Other	1 981 506.21	1 235 186.86
	9 768 124.26	8 892 784.56

Total	43 988 651.57	15 295 305.79

14. Changes in shareholders' equity


EUR	31 Dec 2022	31 Dec 2021
Restricted equity
Share capital, 1 Jan	76 555 412.00	76 555 412.00
Share capital, 31 Dec	76 555 412.00	76 555 412.00

Share issue premiums, 1 Jan	13 791 579.51	13 791 579.51
Share issue premiums, 31 Dec	13 791 579.51	13 791 579.51

Restricted equity total	90 346 991.51	90 346 991.51

Unrestricted equity
Invested unrestricted equity reserve, 1 Jan	1 207 617 299.52	1 207 617 299.52
Invested unrestricted equity reserve, 31 Dec	1 207 617 299.52	1 207 617 299.52

Retained earnings, 1 Jan	420 216 375.19	579 257 788.271)
Purchase of own shares	-3 683 332.86	-3 798 606.55
Dividend distributions	-165 778 624.20	-156 312 002.88
Retained earnings, 31 Dec	250 754 418.13	419 147 178.84

Net profit for the financial year	21 090 020.45	1 069 196.35

Unrestricted equity total	1 479 461 738.10	1 627 833 674.71

Shareholders' equity, total	1 569 808 729.61	1 718 180 666.22

Distributable funds
Invested unrestricted equity reserve	1 207 617 299.52	1 207 617 299.52
Retained earnings	250 754 418.13	419 147 178.84
Net profit for the financial year	21 090 020.45	1 069 196.35
Total	1 479 461 738.10	1 627 833 674.71

Breakdown of the parent's share capital
Number of shares	118 425 771	118 425 771
Euros	76 555 412.00	76 555 412.00

1) The accrued cash liability 31 December 2021 (EUR 652 127.15) of the share-based incentive plans has been adjusted by crediting the

company's retained earnings.

110

15. Provisions


EUR	31 Dec 2022	31 Dec 2021
Restructuring commitments	205 029.46	710 030.73
Other provisions	856 678.19	871 615.18
Total	1 061 707.65	1 581 645.91

16. Non-Current liabilities


EUR	31 Dec 2022	31 Dec 2021
Bonds	400 000 000.00	400 000 000.00
Loans	226 507 692.30	319 584 615.38
Accrued liabilities and deferred income	70 279.92	44 705.25
Total	626 577 972.22	719 629 320.63

Fair value of bonds has been calculated based on prevailing market rate at the reporting date and as of

31 Dec 2022 it was EUR 378 785 000 (EUR 415 774 000 in 2021).

17. Current liabilities


EUR	31 Dec 2022	31 Dec 2021
Liabilities to Group companies
Accounts payable	12 300 548.01	11 058 522.50
Other liabilities including cash pool	544 713 253.93	561 039 176.06
Accrued liabilities and deferred income	34 349 797.34	5 238 842.08
	591 363 599.28	577 336 540.64
Liabilities to joint ventures
Accounts payable	745.49	1 397.17
Other liabilities including cash pool	4 131 761.32	5 095 259.57
	4 132 506.81	5 096 656.74
Liabilities to other companies
Accounts payable	9 123 775.17	19 974 239.66
Loans	93 076 923.08	13 076 923.08
Other current liabilities	2 328 410.56	1 757 969.91
Accrued liabilities and deferred income	10 005 710.22	11 098 440.58
	114 534 819.03	45 907 573.23

Total	710 030 925.12	628 340 770.61

Loans and receivables and financial liabilities are held at amortized cost using the effective interest rate

method. Their carrying amounts are considered to approximate their fair value, except for the fixed rate

bond where carrying amount has not been adjusted to match the fair value.

111

18. Accrued liabilities and deferred income


EUR	31 Dec 2022	31 Dec 2021
Accrued liabilities and deferred income from Group companies
Service fee	34 344 946.02	5 238 544.39
Interest	4 851.32	297.69
	34 349 797.34	5 238 842.08

Accrued liabilities and deferred income from other companies
Vacation pay and related social costs	1 678 748.85	1 661 185.12
Other accrued payroll and related social costs	2 446 083.06	1 835 728.76
Other social costs	267 297.55	276 832.09
Interest	4 317 255.86	3 800 204.34
Rents	325 673.16	604 315.56
Taxes	—	1 743 488.49
Other	970 651.74	1 176 686.22
	10 005 710.22	11 098 440.58

Total	44 355 507.56	16 337 282.66

19. Deferred tax assets and liabilities


EUR	31 Dec 2022	31 Dec 2021
Deferred tax assets
From temporary differences	755 604.48	1 934 798.45
From appropriations	90 401.43	425 507.64
Total	846 005.91	2 360 306.09

Deferred tax liabilities
From temporary differences	52 824.10	4 659 503.31
Total	52 824.10	4 659 503.31

Deferred tax items are not included in the balance sheet.

20. Contingent liabilities


EUR	31 Dec 2022	31 Dec 2021
On behalf of Group companies
Guarantees	127 985 836.34	135 514 842.90
Other Tietoevry obligations
Rent commitments due in 2023 (2022)	9 448 124.97	13 390 201.16
Rent commitments due later	25 415 631.32	34 872 741.37
Lease commitments due in 2023 (2022)1)	310 373.33	331 089.00
Lease commitments due later1)	359 277.65	418 196.00
On behalf of Third parties
Guarantees	23 377 510.83	25 381 206.19

1) Lease commitments are principally three-year lease agreements that do not include buyout clauses.

In addition to the above mentioned contingent liabilities, parent company has provided security on behalf

of delivering Group company relating to some major contracts

112

21. Derivatives

Nominal amounts of derivatives

Includes the gross amount of all nominal values for contracts that have not yet been settled or closed. The

amount of nominal value outstanding is not necessarily a measure or indication of market risk, as the

exposure of certain contracts may be offset by other contracts.


EUR	31 Dec 2022	31 Dec 2021
Foreign exchange forward contracts	555 880 076.06	559 538 204.20
Interest rate swaps	40 000 000.00	—

Fair values of derivatives

Foreign exchange derivatives' fair values are calculated according to foreign exchange and interest rates

on the closing date.


The net fair values of derivative financial instruments at the balance sheet date	31 Dec 2022	31 Dec 2021
Foreign exchange forward contracts	-601 987.54	234 108.04
Interest rate swaps	6 354.00	—

Derivatives are used for economic purposes only.


Gross positive fair values of derivatives	31 Dec 2022	31 Dec 2021
Foreign exchange forward contracts	4 458 629.36	4 138 215.08
Interest rate swaps	2 860 052.00	—


Gross negative fair values of derivatives	31 Dec 2022	31 Dec 2021
Foreign exchange forward contracts	-5 060 616.87	-3 904 106.99
Interest rate swaps	-2 853 698.00	—

Fair value measurement of financial assets and liabilities

See note 22 in Notes to the consolidated financial statements.

22. Management of financial risks

The operative management of the treasury activities of Tietoevry is centralized into Group Treasury, which

is operated from Parent company. The Group Treasury is responsible for managing the Group’s financial

risk position and maintaining adequate liquidity. The Treasury Policy, which has been approved by the

Board of Directors, defines the principles for measuring and managing liquidity risk, interest rate risk,

foreign exchange risks and counterparty risk of the Group. The Treasury Policy also defines the division of

responsibilities with regard to financial risk management. The Group reviews and monitors financial risks

on a regular basis.

Financial risks are assessed, measured and managed on a Group level. See note 18 in Notes to the

consolidated financial statements.

113

DIVIDEND PROPOSAL, SIGNATURES FOR THE BOARD OF DIRECTORS' REPORT AND FINANCIAL STATEMENTS AND AUDITOR'S NOTE


Dividend proposal				The Auditor's Note
Distributable funds in the parent company			1 479 461 738.10	Our auditors' report has been issued today.
of which net profit for the current year			21 090 020.45	Espoo, 14 February 2023

The Board of Directors proposes that the retained earnings of				Deloitte Oy
EUR 271 844 438.58 shall be used as follows:				Audit Firm
a total dividend of EUR 1.45 per share to be paid to shareholders			171 699 289.35
				Jukka Vattulainen
the remainder be carried forward			100 145 149.23	Authorised Public Accountant (KHT)

In the opinion of the Board of Directors the proposed dividend distribution does not endanger the solvency of the company.

Signatures for the Financial statements and Board of Directors' report
Espoo, 14 February 2023

	Tomas Franzén
	Chairperson



Timo Ahopelto	Liselotte Hägertz Engstam	Harri-Pekka Kaukonen
Deputy Chairperson


Angela Mazza Teufer	Katharina Mosheim	Niko Pakalén


Endre Rangnes	Robert Spinelli	Ilpo Waljus


	Kimmo Alkio
	President and CEO

114

AUDITOR’S REPORT (Unofficial translation of the Finnish original)

To the Annual General Meeting of Tietoevry Oyj

Report on the Audit of Financial Statements

Opinion

We have audited the financial statements of Tietoevry Oyj (business identity code 0101138-5) for the year ended 31 December, 2022. The financial statements comprise the consolidated income statement, statement of

comprehensive income, financial position, statement of cash flows, statement of changes in equity and notes, including a summary of significant accounting policies, as well as the parent company’s income statement, balance

sheet, statement of cash flows and notes.

In our opinion

•the consolidated financial statements give a true and fair view of the group’s financial position, financial performance and cash flows in accordance with International Financial Reporting Standards (IFRS) as

adopted by the EU,

•the financial statements give a true and fair view of the parent company’s financial performance and financial position in accordance with the laws and regulations governing the preparation of financial statements

in Finland and comply with statutory requirements.

Our opinion is consistent with the additional report submitted to the Audit Committee.

Basis for opinion

We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good auditing practice are further described in the Auditor’s Responsibilities for the Audit of Financial Statements

section of our report.

We are independent of the parent company and of the group companies in accordance with the ethical requirements that are applicable in Finland and are relevant to our audit, and we have fulfilled our other ethical

responsibilities in accordance with these requirements.

In our best knowledge and understanding, the non-audit services that we have provided to the parent company and group companies are in compliance with laws and regulations applicable in Finland regarding these

services, and we have not provided any prohibited non-audit services referred to in Article 5(1) of regulation (EU) 537/2014.

The non-audit services that we have provided have been disclosed in note 7 to the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

115

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the

financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have also addressed the risk of management override of internal controls. This includes consideration of whether there was evidence of management bias that represented a risk of material misstatement due to fraud.


Key audit matter	How our audit addressed the key audit matter
Revenue recognition	We evaluated the IT systems used for recognizing revenue by testing access and change management controls. We also evaluated process level controls by performing walkthroughs of each significant class of revenue transactions, assessed the design of key controls and tested the operating effectiveness of those controls.
Refer to accounting policies for the consolidated financial statements and notes 5 and 6.
Consolidated Net Sales of Tietoevry Oyj amounted to EUR 2 928,1 (2 823,4) million. The Net Sales consist mostly of continuous services, software solutions and consulting. In addition to this, the Company has fixed-price projects.
Revenue from service contracts, software solutions and consulting is based on service volumes or time and materials; and the performance obligations are recognized over the accounting period in which the services are rendered. For contracts comprising fixed-price projects, revenue is recognized based on the actual service provided by the reporting date as a proportion of the total services to be provided. We identified as a specific risk of error and fraud in respect of improper revenue recognition given the nature of the Group’s services, as follows: –Improper revenue recognition in manually recorded exceptional revenue transactions. Revenue recognition due to its significance require specific attention both from the accounting and the auditing perspective. In addition, management applies judgement when considering revenue recognition for fixed-price projects.	Our substantive audit procedures to address the identified risk relating to revenue from services consisted among others, performing transactional testing procedures to validate the recognition of revenue throughout the year as well as year-end. Our substantive audit procedures to address the risk of inappropriate accounting for projects were focused on judgements used by management in project estimates. We selected a sample of contracts based on quantitative and qualitative criteria and performed the following: –We performed interviews with project managers and financial controllers to assess the estimates on projects' status and estimated costs and income; –Ensured that the revenue recognition method applied was appropriate based on the terms of the arrangement; –Agreed project revenue estimate against the sales agreement, including contract amendments; –Tested the accuracy of the cost estimate by taking a sample of cost components and traced those to supporting documentation; and –Recalculated the revenue based on percentage of completion of the fixed price projects. We assessed the appropriateness of the percentage of completion by comparing actual costs from the Company’s accounting records to the estimated total costs of the project.

116


Key audit matter	How our audit addressed the key audit matter
Impairment testing of Goodwill
Refer to Note 11 in the consolidated financial statements.	We have performed audit procedures on impairment testing prepared by management relating to material cash generating units and assessed key controls over management’s goodwill impairment testing. The recoverable amounts of the cash-generating units are determined based on value-in-use calculations. Cash flows used in these calculations are based on five-year financial plans defined by group management. We have assessed the key assumptions used by management in the impairment test for cash generating units: •comparing the growth and profitability estimates to historical performance. •comparing the estimates with the latest approved budgets and strategic plans. •involving our valuation specialists to verify that the discount rates and the long-term growth rates are consistent with observable market data. •validated the mathematical accuracy of the impairment calculations. We have also assessed the related disclosure information.
Consolidated financial statements includes goodwill of EUR 1 846,5 (1 943,7 million) million. Goodwill is measured at cost less accumulated impairment losses.
Goodwill is subject to annual impairment test. For testing purposes goodwill is allocated to cash-generating units. As a result of management’s goodwill impairment test, no impairment was identified.
Goodwill impairment testing requires substantial management judgment over the projected future business performance, cash flows and applied discount rate.
Note 11 in the consolidated financial statements describes key assumptions used by management in the impairment test and related sensitivity analysis.
We have no key audit matters to report with respect to our audit of the parent company financial statements. There are no significant risks of material misstatement referred to in Article 10(2c) of Regulation (EU) No 537/2014 with respect to the group financial statements and the parent company financial statements.

Responsibilities of the Board of Directors and the President and CEO for the financial statements

The Board of Directors and the President and CEO are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as

adopted by the EU, and of financial statements that give a true and fair view in accordance with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory requirements.

The Board of Directors and CEO are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or

error.

In preparing the financial statements, the Board of Directors and CEO are responsible for assessing the parent company’s and the group’s ability to continue as going concern, disclosing, as applicable, matters relating to going

concern and using the going concern basis of accounting. The financial statements are prepared using the going concern basis of accounting unless there is an intention to liquidate the parent company or the group or cease

operations, or there is no realistic alternative but to do so.

Auditor’s responsibilities in the audit of financial statements

Our objectives are to obtain reasonable assurance on whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with good auditing practice will always detect a material misstatement when it exists. Misstatements can arise

from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

117

As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

•Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is

sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,

intentional omissions, misrepresentations, or the override of internal control.

•Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness

of the parent company’s or the group’s internal control.

•Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

•Conclude on the appropriateness of the Board of Directors’ and the President and CEO’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty

exists related to events or conditions that may cast significant doubt on the parent company’s or the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required

to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained

up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.

•Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events so that the

financial statements give a true and fair view.

•Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are

responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we

identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may

reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit

matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be

communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

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Other Reporting Requirements

Information on our audit engagement

We have been acting as Tietoevry’s auditors a total period of uninterrupted engagement of 5 years since 2018.

Other information

The Board of Directors and CEO are responsible for the other information. The other information comprises the report of the Board of Directors and the information included in the Annual Report, but does not include the

financial statements and our report thereon. We have obtained the report of the Board of Directors prior to the date of the auditor’s report, and the Annual Report is expected to be made available to us after that date.

Our opinion on the financial statements does not cover the other information.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial

statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect to report of the Board of Directors, our responsibility also includes considering whether the report of the Board

of Directors has been prepared in accordance with the applicable laws and regulations.

In our opinion, the information in the report of the Board of Directors is consistent with the information in the financial statements and the report of the Board of Directors has been prepared in accordance with the applicable

laws and regulations.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to

report this fact. We have nothing to report in this regard.

Espoo, 14 February 2023

Deloitte Oy

Audit Firm

Jukka Vattulainen

Authorised Public Accountant (KHT)

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(Translation of the Finnish Original)

Independent auditor’s report on the ESEF consolidated financial statements of Tietoevry Oyj

To the Board of Directors of Tietoevry Oyj

We have performed a reasonable assurance engagement on whether the iXBRL tagging of the consolidated financial statements in the ESEF consolidated financial statements (549300EW2KM4KROKQV31-2022-12-31-en.zip)

of Tietoevry Oyj (0101138-5) for the financial year 1.1.-31.12.2022 has been prepared in accordance with the requirements of Article 4 of Commission Delegated Regulation (EU) 2018/815 (ESEF RTS).

Responsibilities of the board of directors and the Group CEO

The Board of Directors and the Group CEO are responsible for the preparation of the report of the Board of Directors and financial statements (ESEF financial statements) that comply with the requirements of ESEF RTS. This

responsibility includes:

•preparation of ESEF financial statements in XHTML format in accordance with Article 3 of ESEF RTS

•tagging the consolidated financial statements’ primary statements, disclosures and identifying information in the ESEF financial statements with iXBRL tags in accordance with Article 4 of ESEF RTS, and

•ensuring consistency between ESEF financial statements and audited financial statements.

The Board of Directors and the Group CEO are also responsible for such internal control as they determine is necessary to enable the preparation of ESEF financial statements in accordance with the requirements of ESEF RTS.

Auditor’s independence and quality control

We are independent of the company in accordance with the ethical requirements that are applicable in Finland and are relevant to the engagement we have performed, and we have fulfilled our other ethical responsibilities in

accordance with these requirements.

The auditor applies International Standard on Quality Management 1 and, accordingly, an audit firm shall design, implement, and maintain a system of quality control including policies and procedures regarding compliance

with ethical requirements, professional standards, and applicable legal and regulatory requirements.

Auditor’s responsibilities

In accordance with the engagement letter, we express an opinion on whether the tagging of the consolidated financial statements in the ESEF financial statements has been prepared in all material respects in accordance with

the requirements of Article 4 of ESEF RTS. We conducted a reasonable assurance engagement in accordance with International Standard on Assurance Engagements ISAE 3000.

The engagement includes procedures to obtain evidence on:

•whether the tagging of the consolidated financial statements’ primary statements in the ESEF financial statements has been prepared in all material respects in accordance with the requirements of Article 4 of ESEF

RTS

•whether the tagging of the consolidated financial statements’ disclosures and identifying information in the ESEF financial statements has been prepared in all material respects in accordance with the requirements

of Article 4 of ESEF RTS, and

•whether the ESEF financial statements are consistent with the audited financial statements.

The nature timing and extent of the procedures selected depend on the auditor’s judgment. This includes the assessment of risk of material departures from the requirements set out in ESEF RTS, whether due to fraud or error.

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