Financials

Q4 2019

Revenue decreased by 2.7% in Q4 2019 (3.1% in constant currencies) due to a decline in revenue from the Novo Nordisk Group of 27% partly countered by strong growth from clients in international life sciences (35%), finance (24%), public (18%) and Danish life sciences (5.9%).. Total revenue for Q4 2019 declined by 5.0% compared to Q4 2018 when adjusting for the acquisitions while organic revenue growth excluding business from the Novo Nordisk Group was 8.4%. Revenue increased by 1.7% (1.2% in constant currencies) in 2019 driven by a 70% and 24% growth from the international life sciences and finance clients, respectively. Clients from life sciences Denmark increased by 3.6% and enterprise clients by 1.0%. This was partly countered by a decline in revenue from the Novo Nordisk Group of 15.0% and public clients of 1.7%. Revenue from clients outside the Novo Nordisk Group increased by 11.7%. Adjusted for acquisitions, organic growth was negative 1.5% including the Novo Nordisk Group and positive 6.2% excluding the Novo Nordisk Group.

Operating profit before restructuring costs in Q4 2019 decreased by DKK 25.7m corresponding to an operating profit margin of 10.1% which was below the operating profit margin in Q4 2018 of 12.9% due to the above-mentioned developments. In 2019 operating profit before special items decreased by 22% to DKK 238.7m, corresponding to an operating profit margin of 7.8%, which was 2.4pp lower than in 2018 due to the above-mentioned developments.

The order entry backlog for 2020 at the beginning of Q1 2020 declined by DKK 131.9m to DKK 2,039m, or by 6.1%, compared to the order entry backlog for 2019 at the beginning of Q1 2019. The declining order entry backlog is primarily due to the earlier announced termination of the application maintenance agreement with the Novo Nordisk Group (effect from January 1, 2020) and the termination of the business with PANDORA (expected revenue of around one quarter of the revenue in 2019).The high growth in NNIT’s project business with low backlog visibility and a declining multiyear outsourcing business makes the backlog numbers less useful as a predictor for revenue growth than in previous years. The large operations maintenance agreement with the Novo Nordisk Group expires at the end of 2020, see company announcement 10/2019. However, in the following guidance it is assumed that the agreement is renegotiated and prolonged during the first half of 2020 with an impact from the time of signing. NNIT’s guides a revenue decline of 4-8% in constant currencies for 2020 excluding potential new acquisitions in 2020. The operating profit margin before special items in constant currencies is expected to be in the range of 6-8%. As in 2019, the operating profit margin is expected to be considerably higher in the second half of the year than in the first half of the year. Investments are expected to be 5-7% of revenue.

   

Regarding Q4 2019, it is encouraging that we ended a challenging year on a strong note with revenue growth of 13% outside Novo Nordisk Group driven by life sciences, finance and public clients. This partly mitigated the decline in revenue from the Novo Nordisk Group of 27% and ensured results in line with the most recent guidance. I expect 2020 to be a tough transition year with a declining revenue due to loss of business from our two largest clients as earlier announced. For other clients we expect to see strong growth and with our new focused go-to market strategy I am confident that we are well positioned for the future.” 

Per Kogut, Chief Executive Officer (CEO)

Investor relations contact

Jens Binger
Head of Investor Relations

Email
+45 3079 92 22

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