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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”.