Revenue decrease of 3.7% and an operating profit margin before special items of 6.5% (6.7% in constant currencies)
Performance highlights for the first three months of 2020
- Revenue decreased by 3.7% in Q1 2020 compared to Q1 2019 due to a 29% decline from the Novo Nordisk Group while revenue from other customers increased by 9.4%. The share of NNIT’s revenue from clients outside the Novo Nordisk Group increased to 74% in Q1 2020 from 65% in Q1 2019
- Revenue from life sciences Denmark and life sciences international increased with 26% and 18% respectively while the enterprise and public segments also had strong growth rates of 14% and 5.9%. Revenue from the finance segment declined with 8.1%
- Revenue developed as expected in January and February while COVID-19 had some impact on project business in the last two weeks of March
- Gross profit margin increased by 0.4pp in Q1 2020 due to healthy development in private & public and other life sciences supported by the cost restructuring program
- Operating profit margin before special items increased to 6.5% in Q1 2020 from 6.1% in Q1 2019. Operating profit margin after special items was 5.6%
- Net profit was DKK 35m in Q1 2020 compared to DKK 40m in Q1 2019
- Order backlog for 2020 at the beginning of Q2 2020 was DKK 2.287m, a decrease of 9.1% compared to the same time last year. The backlog is negatively impacted by a decline of 33% from the Novo Nordisk Group and a decline of 1.8% from Private & Public partly countered by a growth of 19% in other life sciences
- Outlook for 2020:
The guidance for 2020 is maintained:
- Revenue growth of -4% to -8% in constant currencies
- Operating profit margin of 6-8% in constant currencies
- Level of investments (CAPEX) is 5-7% of total revenue
Due to the uncertainty regarding the COVID-19 situation there is an increased likelihood that revenue growth and operating profit margin will end in the lower end of the guidance intervals
- Given the COVID-19 situation the Board has decided that it is not prudent at this point in time to indicate whether to pay interim dividends in 2020.
Per Kogut, CEO at NNIT comments: “Our results for the first three months of 2020 are in line with our expectations. Especially two developments counter the significant decline in revenue from the Novo Nordisk Group and its impact on our results: First, we continue to deliver a strong revenue growth of 9.4% from customers outside the Novo Nordisk Group, especially from the life sciences segment. Second, we have reduced our production costs by implementing the initiatives announced in August 2020. However, due to the uncertainty regarding the COVID-19 situation there is an increased likelihood that revenue growth and operating profit margin will end in the lower end of the guidance intervals”
Conference call details
NNIT will host a teleconference May 6, 2020 at 10:00 CET about the financial report for the first three months of 2020. 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
https://nnit.eventcdn.net/2020q1/
Participant telephone numbers:
Denmark: +45 8233 3194
United Kingdom: +44 33 3300 9030
Sweden: +46 8 5055 8354
United States: +1 646 722 4957
Financial Calendar 2020
August 13, 2020 Interim report for the first six months of 2020
October 29, 2020 Interim report for the first nine months of 2020
Contacts for further information
Investor relations: Media relations:
Jens Binger Helga Heyn
Head of Investor Relations NNIT Communications
Tel: +45 3079 9222 Tel: +45 3077 8141
jblb@nnit.com hhey@nnit.com
About NNIT
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 March 31, 2020, NNIT A/S had 3,086 employees. NNIT has approximately 400 clients of which around 150 are located outside Denmark. Some 25% are international life sciences clients (March 2020). For more information please visit www.nnit.com.
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