Tietoevry (Stockholm SEK line; same ISIN as Helsinki TIETO.HE) is a Nordic IT services and software group reshaped over 2025-2026: Tech Services, Bekk, Edlevo and HR&Payroll divested, leaving a ~EUR 1.8bn higher-margin software-plus-consulting core across Banktech, Caretech, Indtech and Tech Consulting. Adjusted ROIC of 13.0% against an 8% WACC produces positive economic profit of +EUR 83m — real, if mid-band, value creation on a goodwill-heavy capital base.
The investable edge sits in the software segments — Banktech payment platforms and Caretech health/social-care records carry high switching costs and serve sticky Nordic public-sector and financial clients — while a large Tech Consulting book (~40% of revenue, shrinking -15% YoY) is commodity work exposed to weak demand. Profitability, not growth, is the current story: the cost-out programme lifted adjusted EBITA margin to 14.9% (+5.5pp YoY) despite a falling topline.
The reverse-DCF is the reason to own it: capitalising adjusted NOPAT of EUR 216.5m at WACC gives a zero-growth fair value ~20% above the 192.9 SEK price before crediting any recovery, and the balance sheet has de-levered from 2.2x to 1.0x net debt/EBITDA on divestment proceeds, funding two buyback programmes.
Capitalising adjusted NOPAT of EUR 216.5m at the 8% WACC and bridging through ~EUR 378m net debt across 113.85m shares gives a zero-growth equity value near 231 SEK and a GDP-growth value well above — i.e. the SEK line trades below its reverse-DCF fair value across scenarios. The model rewards the 13% > 8% return spread; the discount is the market pricing the negative organic growth, not a balance-sheet problem.
Base 220 SEK (+14%) — a deliberate haircut to the zero-growth DCF for a shrinking topline; bull 255 SEK (+32%) as the software mix and cost-out re-rate the group toward GDP-growth economics; bear 158 SEK (-18%) if Tech Consulting's decline deepens and the recent margin gains give back. Reverse-DCF derived from the SEK price and the company's own EUR NOPAT, not FX-converted from Helsinki.
At today’s enterprise value the constant-ROIC reverse-DCF maxes out: even at its sustainable-growth ceiling (~12.3%, limited by ROIC 13% ≈ WACC 8%) it cannot reach the current EV. No-growth value is €-11/share (-6% of price); the market prices in growth and/or a higher ROIC than booked — richly valued on this lens. Read the sensitivity grid.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | €255 | ≥12% | +32% | 30% | Software mix + cost-out re-rate toward GDP-growth DCF |
| Base | €220 | ≥12% | +14% | 45% | Haircut to zero-growth DCF for shrinking topline |
| Bear | €158 | ≥12% | -18% | 25% | Tech Consulting decline deepens; margin gains give back |
| Prob-weighted | €215 | — | +11% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | -1 | 2 | 4 | 8 | 11 | 18 |
| 7.25% | -7 | -4 | -3 | 0 | 2 | 7 |
| 8.00% (base) | -11 | -9 | -8 | -6 | -4 | -0 |
| 8.75% | -14 | -12 | -11 | -10 | -9 | -6 |
| 9.50% | -16 | -15 | -14 | -13 | -13 | -11 |
Green = fair value above the current price of €192.90. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.
Adjusted ROIC 13.0% vs 8% WACC, EP +EUR 83m — genuine value creation at a discounted price.
Zero-growth fair value ~231 SEK vs 192.9 price (~+20%) before any topline recovery — a real margin of safety.
Adjusted EBITA margin 14.9% (+5.5pp YoY); FY margin outlook 14.8-15.8% — profitability improving in every segment despite falling revenue.
Banktech payments and Caretech public-sector records carry switching costs and recurring revenue — the durable part of the mix.
Net debt/EBITDA cut to 1.0x from 2.2x on divestments; EUR 150m buyback executed + new EUR 90m programme.
Tietoevry's SEK line is a value_creator trading below its reverse-DCF fair value: ROIC 13% > WACC 8%, positive economic profit, a de-levered balance sheet and active buybacks. BUY, medium conviction; base target 220 SEK (+14%). Conviction is held at medium — not high — by the shrinking topline and the goodwill-heavy roll-up profile.
The thesis is consistent with the Helsinki listing (TIETO.HE); only the price and targets differ (SEK vs EUR). The upgrade trigger is a return to organic-growth stabilisation in Tech Consulting; sustained margin at 15%+ with flat-to-positive organic growth would support a conviction upgrade.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Source reports archived locally.
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| LTM revenue 1793.3 (FY2025 1852.3 - H1'25 933.9 + H1'26 874.9) | 1,793 | Income statement p.18 + Quarterly figures p.34 | Continuing-operations revenue; LTM bridged over the Tech Services / Bekk / Edlevo divestments using restated columns. |
| LTM reported EBIT 306.5 | 306 | Income statement p.18 / Quarterly EBIT p.34 | Sum of quarterly EBIT Q3'25 56.5 + Q4'25 58.8 + Q1'26 79.6 + Q2'26 111.6; inflated by 77.2m divestment gains. |
| Company adjusted EBITA (LTM) 292.3 | 292 | Reconciliation of adjusted operating profit (EBITA) p.32 | FY 256.5 - H1'25 93.5 + H1'26 129.3; strips capital gains, restructuring, impairment, PPA amort. |
| PPA amortization add-back we reject (LTM) 18.3 | 18.3 | Amortization of intangibles recognized at fair value from acquisitions p.32 | Acquisition-intangible amort; mttssn keeps in opex as a real cost of the roll-up. |
| Divestment capital gains stripped (LTM) 77.2 | 77.2 | Capital gains p.32 + Acquisitions and divestments p.28-30 | Edlevo/HR&Payroll 57.1m + Bekk 20.1m; one-off, removed from operating profit. |
| Total equity 30 Jun 2026 1088.1 | 1,088 | Statement of financial position p.19 | Continuing-group equity, snapshot for IC. |
| Cumulative translation differences (OCI) -196.8 | -197 | Statement of changes in equity p.20 | Stripped from equity for IC (equity_ex_oci = 1284.9). |
| Interest-bearing debt 621.8 (loans 608.4 + 13.4) | 622 | Statement of financial position p.19 | Non-current + current loans; leases excluded from IC (office ROU peripheral). |
| Cash & equivalents 301.5 (incl 25.1 restricted Ukraine) | 302 | Statement of financial position p.19 note 1 | op cash floored at 2% revenue; excess 265.6 removed from IC. |
| Goodwill 1318.5 | 1,318 | Statement of financial position p.19 | 121% of equity — roll-up profile flag. |