Translation: Original comment published in Finnish on 5/28/2024 at 7:48 am EEST. The strengthening of the general economic situation in Finland and Europe and the expected decline in interest rates provide some light at the end of the tunnel and, in our opinion, create the conditions for a gradually improving demand outlook also for the IT services sector next year. However, the timing and magnitude of the recovery in demand are difficult to estimate, which keeps uncertainty high. Our main concern in the sector is fierce price competition. With the Q1 reports, our revenue forecasts fell slightly in the big picture, while profitability expectations remained unchanged. In 2024, we expect the sector's revenue to be flat year-on-year and profitability to improve slightly, driven by cost savings, but still below potential. We continue to note that there are large differences between companies.  In 2024, we expect revenue to be at the level of the comparison period In 2024, we estimate that companies will continue to develop in different categories based on their different profiles. We expect companies with a software development profile and a stronger private sector focus to continue to underperform relatively this year (Silicon, Vincit, Witted), and their revenue forecasts also fell the most after Q1 (3-4 percentage points). In contrast, we expect companies operating in the public sector and in the more traditional IT service areas to perform relatively better this year (Gofore, Innofactor, Digia, Tietoevry, Netum), although the forecasts for these companies are also significantly more moderate than last year. For these companies, a clearly higher share of revenue is recurring or based on long-term contracts, which is true also for Digital Workforce. There is still considerable uncertainty about the market situation and customer demand, although there is light at the end of the tunnel. Of course, this also means that there is still considerable uncertainty in our forecasts. Source: Inderes In the talent market, turnover will remain low and the availability of talent is better than it has been in years. In other words, for those companies where sales are working, the conditions for growth are good. We anticipate that managing billing rates will continue to be challenging due to market sensitivities and changes. In addition, we expect customer pricing to remain under pressure in a highly competitive environment. In our view, price competition is currently the biggest risk in the sector. The longer the pressure on prices continues, the weaker the structure of companies' order books will become and the slower the turnaround will be. We expect organic growth in the IT services sector to be broadly in line with the comparison period and slightly higher due to acquisitions. However, M&A activity has been record low in 2023, so acquisitions will not provide much growth support. In future quarters, comparison figures will be easier as Q1 was the last good comparison period. In addition, the number of working days will be a tailwind in the coming quarters, having been a headwind in recent quarters. We forecast the median development in revenue for the companies in our coverage to be +3.0% and the average +1.3%. We estimate the median and average of our closely monitored organic growth to be +1.0% and -0.8%, respectively. We thus forecast organic growth to be significantly slower than in the 6 years before 2023 (2023: 0 % and 2018-2022: 8-16 %). The historical comparability of the mean and median is affected relatively clearly by the fact that Witted and Digital Workforce have changed their focus from growth to profitability in the last 1-2 years and that this transition journey is still ongoing. We expect profitability to improve slightly driven by cost savings Following the Q1 reports, we left our earnings expectations broadly unchanged (average +0.1% and median -0.8 percentage points). We expect the median EBITA margin of the companies in our coverage to decrease slightly to 6.6% (2023: 7.1% and 2018-2022 7.6%), but the average to be 7.2%, improving clearly in 2024 (2023: 4.9%). We expect that profitability challenges will continue to arise from the difficulty of managing bill rates, with projects on hold and growth under pressure. We expect wage inflation to be more moderate than in recent years, but fierce price competition makes the equation of wage inflation and customer prices negative for companies, putting pressure on profitability. Several companies have adjusted their cost structures over the past year, leading to a slight improvement in profitability trends, although we expect profitability levels to remain below potential. If the market improves, we could see profitability levels return to much better levels, at least temporarily. Source: Inderes A comprehensive summary of the IT services sector and company-by-company comments on the Q1 results can be found here.

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