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Company announcement 08/2021: Financial report for the first six months of 2021
Revenue increase of 1.3% and an operating profit margin before special items of 5.1%
Performance highlights for the second quarter of 2021
New CEO Pär Fors took office as CEO of NNIT on June 14, 2021
Revenue increased to DKK 710m, up 1.3% (-1.8% organic) from Q2 2020, driven by:
Life Sciences (excluding Novo Nordisk Group) grew to DKK 234m, up 35% (22% organic). The increase was related to the continued significant growth of the Life Sciences International business, where revenues increased by 56% (36% organic) to DKK 165m, while revenue from Life Sciences Denmark increased by 1.5% to DKK 69m.
Novo Nordisk Group revenue declined 13.7% to DKK 151m. On June 29, 2021 NNIT secured the extension of the Novo Nordisk Group global IT infrastructure contract for five years. While the agreement was an important win, it will reduce NNIT’s yearly revenue and profitability within the contract’s service areas.
Private & Public business revenue declined by 7.7% to DKK 325m, reductions mainly driven by Infrastructure Operations.
Winning Solutions now constitute 52% of total revenue, up from 44% in Q2 2020.
Operating profit margin before special items was 5.1%, down from 5.4% in Q2 2020.
Efficiency within especially the NNIT Infrastructure operations is key to margin improvements. To further improve visibility and to accelerated cost reductions, a process of separating the NNIT Infrastructure area into a dedicated business unit has been initiated.
Special items of DKK 63m stem mainly from impairment of the headquarter lease, change of members in the Executive Management as well as restructuring costs.
Net result is a loss of DKK 30m, compared to a profit of DKK 14m in Q2 2020, significantly impacted by special items of DKK 63m.
Order backlog for 2021 at the beginning of Q3 2021 amounted to DKK 2,643m, an increase of 5.4% compared to the same time last year.
To facilitate the M&A journey within International Life Sciences, recently substantiated by the acquisition of SL Controls, no interim dividends will be paid.
Outlook for 2021:
Reaffirming the guidance on June 29, 2021:
Revenue growth of 1-4%
Operating profit margin before special items of around 5%
Investment level of 5-7% of total revenue excluding acquisitions
Pär Fors, CEO of NNIT, comments: “In Q2, we experienced a continued strong growth within the Life Sciences International business, further highlighted by the subsequent acquisition of SL Controls in July. In addition, we announced the extension of the Novo Nordisk Infrastructure agreement - an important win for NNIT despite lower margins. While our Private & Public business was impacted by the competitive environment within the Infrastructure business, resulting in margin pressure, positively our Winning Solutions now constitute 52% of NNIT’s total revenue. I am excited to head up NNIT in the pursuit of further value creation”.
Conference call details
NNIT will host a teleconference on August 12, 2021 at 9:30 CET to present the financial report for the first six months of 2021. Please visit the NNIT website www.nnit.com to access the teleconference, which can be found under ‘Investors – Events & Presentations’. Presentation material will be available on the website approximately one hour prior to the start of the presentation.
Conference call details
Participant telephone numbers:
Denmark: +45 78150107
United Kingdom: +44 333 300 9273
Sweden: +46 856 642 693
United States: +1 6319131422 (PIN for the US number only: 10496233#)
Financial calendar 2021
November 3, 2021 Interim report for the first nine months of 2021
This announcement contains forward-looking statements. Words such as ‘believe’, ‘expect’, ‘may’, ‘will’, ‘plan’, ‘strategy’, ‘prospect’, ‘foresee’, ‘estimate’, ‘project’, ‘anticipate’, ‘can’, ‘intend’, ‘outlook’, ‘guidance’, ‘target’ and other words and terms of similar meaning in connection with any discussion of future operating or financial performance identify forward-looking statements. Statements regarding the future are subject to risks and uncertainties that may result in considerable deviations from the outlook set forth. Furthermore, some of these expectations are based on assumptions regarding future events which may prove incorrect.
Please also refer to the overview of risk factors in the ‘risk management’ section on page 41-43 of the Annual Report 2020.
The NNIT Group provides a wide range of IT and consulting services worldwide. Supporting the entire supply chain, we help optimize internal company processes, production, sales and delivery to customers. We are experts in supporting the world’s most regulated industries subject to strict governance of processes, quality and data management and documentation – and in guiding customers on their digital journeys.
The Group consists of NNIT A/S and subsidiaries Valiance, SCALES, Excellis Health Solutions and from July 1, 2021 SL Controls. Within these companies, we employ over 3,000 people, primarily in Europe, Asia and the US.
In Denmark, home to Group HQ, we are one of the leading IT consultancies, servicing both private and public sector customers across all industries. In other parts of Europe and in USA and Asia, we solely focus on Life Sciences.
Read more at www.nnit.com