Revenue increase of 2.9% and an operating profit margin of 6.0% in 6M 2019
Performance highlights for the second quarter of 2019 and guidance
- Revenue decreased by 1.2% in Q2 2019 compared to Q2 2018 driven by a decline of 16% from the Novo Nordisk Group. International life sciences increased by 99% (organic 21%)
- Revenue growth was 7.2% (1.0% organic) excluding business from Novo Nordisk Group in Q2 2019
- Gross profit decreased by 26% in Q2 2019 primarily due to a significant decline in revenue and margins from the Novo Nordisk Group. This led to an operating profit decrease of 41% and an operating profit margin of 5.9% compared to 9.9% in Q2 2018
- Net profit of DKK 34m in Q2 2019 compared to DKK 57m in Q2 2018
- Free cash flow was negative DKK 39m in Q2 2019 being impacted by the acquisition of HGP compared to negative DKK 85m in Q2 2018
- Order backlog for 2019 at the beginning of Q3 2019 was DKK 2,728m, an increase of 1.7% compared to the same time last year negatively impacted by a decline of 12% from the Novo Nordisk Group
- Outlook for 2019:
- Low single-digit revenue growth (previously 3-6% in constant currencies)
- Operating profit margin of 8-9% excluding restructuring costs in constant currencies is maintained
- Level of investments (CAPEX) is 5-7% of total revenue is maintained
- The Board of Directors has approved a business and cost restructuring plan with an impact of DKK 150m in 2020 and a full-year impact of minimum DKK 200m in 2021
- NNIT will not publish long-term targets primarily due to the current uncertainty related to sales to the Novo Nordisk Group, lost business on a few key accounts and the implementation of the business and cost restructuring plan
- The Board of Directors has decided to pay an interim dividend for 2019 of DKK 2.00 per share corresponding to DKK 49.2m
Per Kogut, CEO at NNIT comments: “The results for the first six months of 2019 are very disappointing and largely due to a decline in revenue and margins related to the Novo Nordisk Group.
In order to accommodate these challenges, we have initiated a business and cost restructuring plan with savings of DKK 150m in 2020 and minimum DKK 200m in 2021.
At the same time, we have doubled our business within international life sciences at attractive margins. Growing revenue through life sciences remains a key element in our strategy and we will continuously combine a strong organic growth with acquisitions. The successful acquisitions of SCALES, Valiance and HGP have confirmed the relevance of strategic acquisitions to strengthen our core competences.
In line with previous years, it has been decided to pay an interim dividend for 2019 of DKK 2.00 per share.”
Conference call details
NNIT will host a teleconference August 14, 2019 at 10:30 CET about the financial report for the first six months of 2019. Please visit the NNIT webpage at 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 3544 5583
United Kingdom: +44 20 3194 0544
Sweden: +46 8 5664 2661
United States: +1 855 269 2604
Financial Calendar 2019
August 19, 2019 Interim dividend ex dividend date
August 20, 2019 Interim dividend record date
August 21, 2019 Interim dividend payment date
October 24, 2019 Interim report for the first nine months of 2019
Contacts for further information
Klaus Hosbond Skovrup
Head of Investor Relations
Tel: +45 3079 5355
Tel: +45 3077 8141
NNIT A/S is one of Denmark’s leading IT service providers and consultancies. NNIT A/S offers a wide range of IT services and solutions to its customers, primarily in the life sciences sector in Denmark and internationally and to customers in the public, enterprise and finance sectors in Denmark. As of June 30, 2019, NNIT A/S had 3,215 employees. NNIT has approximately 400 clients of which around 150 are located outside Denmark. Some 20% are international life sciences clients (June 2019). For more information please visit www.nnit.com.