Financials

Q2 2019

Revenue in reported currencies decreased by 1.2% in Q2 2019 (-1.6% in constant currencies) driven by a 16% decline from the Novo Nordisk Group and a decline of 8.1% and 7.6% from the enterprise and public customer groups, respectively. This was partly countered by a 24% growth from clients in the finance customer group and a 99% growth from international life sciences clients of which 78pp came from the acquisitions of Valiance Partners and HGP. Adjusting for the acquisitions of Valiance Partners and HGP organic revenue declined by 4.9% in reported currencies in Q2 2019 mainly due to the decline from the Novo Nordisk Group. Operating profit in Q2 2019 decreased by DKK 30.4m corresponding to an operating profit margin of 5.9% compared to 9.9% in Q2 2018 due to the above-mentioned developments. In 6M 2019, operating profit decreased by DKK 45.6m corresponding to an operating profit margin of 6.0% compared to 9.3% in 6M 2018. This decline in margin is not satisfactory and NNIT will through the business and cost restructuring plan strive to improve these margins in the next two years.

The order backlog for 2019 at the beginning of Q2 2019 increased by DKK 45.9 million to DKK 2,728 million, or by 1.7%, compared to the order backlog one year earlier. The backlog development is impacted by a decline in multiyear outsourcing agreements, while business coming from projects with low backlog visibility increases.

Based on the result for the first six months and the current backlog, NNIT expects a low single-digit revenue growth for 2019 (previously 3-6% in constant currencies). The operating profit margin in constant currencies is maintained to be in the interval 8-9% excluding restructuring costs for 2019. The restructuring costs were mentioned in company announcement 09, July 3, 2019 and are now quantified to be DKK 15-25m. Investments / revenue is expected to be 5-7% of revenue.

   

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 ” 

Per Kogut, Chief Executive Officer (CEO)

Investor relations contact

Klaus Hosbond Skovrup
Head of Investor Relations

Email
+45 3079 5355

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