Slide 1: Full year 2019
Full year 2019 NNIT
Slide 2: The NNIT Presenting Team
The NNIT Presenting Team PER OVE KOGUT CARSTEN KROGSGAARD JENS BLÜITGEN BINGER THOMSEN Chief Executive Officer Chief Financial Officer Head of Investor Relations 2
Slide 3: Agenda
Agenda 01 Highlights for Q4 and full year 2019 02 Strategy update Financial performance and cost 03 restructuring plan 04 Balance sheet and cash flow 05 Outlook for 2020 3
Slide 4: Forward looking statements
Forward looking statements This presentation contains forward-looking statements. Words such as ‘believe’, ‘expect’, ‘may’, ‘will’, ‘plan’, ‘strategy’, ‘prospect’, ‘foresee’, ‘estimate’, ‘project’, ‘anticipate’, ‘can’, ‘intend’, ‘outlook’, ‘guidance’, ‘target’ and other words and terms of similar me
Slide 5: Q4 2019 at a glance
Q4 2019 at a glance Revenue Operating profit* Operating profit margin* DKK 801m DKK 81m 10.1% -2.7% -24% -2.9pp +0.4pp F/X -1.0pp F/X -0.2pp F/X Net profit Free cash flow DKK 58m DKK 311m -31% DKK +311m *Before special items 5
Slide 6: 2019 at a glance
2019 at a glance Revenue Operating profit* Operating profit margin* DKK 3,058m DKK 239m 7.8% +1.7% -22% -2.4pp +0.5pp F/X -1.0pp F/X -0.1pp F/X Net profit Order backlog for 2020 Free cash flow DKK 183m DKK 2,039m DKK 242m -23% -6.1% DKK +126m *Before special items 6
Slide 7: Major wins
Major wins Amount Length Contract Segment Client (DKK million) (years) Extension and expansion of an operation and Int. Life Association of Around DKK 200m 4 development agreement Sciences Danish Pharmacies Cloud-enabling IT-infrastructure operations Enterprise Radius Elnet Low triple-digit 5 Q4 agr
Slide 8: Adjustment of strategy
Adjustment of strategy Strategy 2019 Adjusted strategy 2020 • New customer centric organization and • Continue successful international life Unexpected loss of business with reporting structure sciences strategy with organic growth of the Novo Nordisk Group • Increased focus on customer around 20% p
Slide 9: New go-to market strategy
New go-to market strategy High growth areas leveraging NNIT’s Winning solutions Focus in new go- existing strong capabilities to market • Built on proven standardized concepts strategy Delivered fit for High growth areas where NNIT has the • potential to build strong capabilities purpose first time
Slide 10: Example of area where NNIT already has a competitive edge and traction
Example of area where NNIT already has a competitive edge and traction are SCALES with Microsoft D365 offerings and Valiance and Veeva offerings in international life sciences DKKm SCALES Percent Veeva Revenue & OE 2018 - 2019 250 235 30 Second Veeva 90,000,000 Summit US 80,000,000 Second 25 200 26%
Slide 11: Status on implementation of cost restructuring plan
Status on implementation of cost restructuring plan Cost reductions Accumulated cost reductions DKKm Description of main initiatives achieved in 2019 2020 2021 - Increase billable utilization by 4pp Utilization 10 55 75 - Increase focus on ressource management and capacity planning - Further impleme
Slide 12: Financial statement Q4 and full year 2019
Financial statement Q4 and full year 2019 DKK million Q4 2019 Q4 2018 Change 2019 2018 Change Revenue 801.0 822.9 -2.7% 3,057.9 3,007.2 1.7% Cost of goods sold 656.8 657.6 -0.1% 2,582.6 2,465.9 4.7% Gross profit 144.2 165.3 -12.8% 475.3 541.2 -12.2% Gross profit margin 18.0% 20.1% -2.1pp 15.5% 18.0%
Slide 13: Life Sciences
Life Sciences DKKm Q4 2019 Q4 2018 Change 2019 2018 Change Novo Nordisk Group 237.4 323.0 -26.5% 954.9 1,124.2 -15.1% Life sciences international 98.8 73.1 35.1% 360.9 211.7 70.5% Life sciences Denmark 63.2 59.7 5.9% 230.0 221.7 3.8% Revenue 399.4 455.8 -12.4% 1,545.8 1,557.6 -0.8% Cost of goods sol
Slide 14: Private & Public
Private & Public DKKm Q4 2019 Q4 2018 Change 2019 2018 Change Enterprise 202.9 202.1 0.4% 802.3 793.8 1.1% Public 108.7 92.6 17.5% 392.2 399.2 -1.7% Finance 90.0 72.4 24.3% 317.6 256.6 23.7% Revenue 401.6 367.0 9.4% 1,512.1 1,449.6 4.3% Cost of goods sold 354.0 324.1 9.2% 1,370.7 1,317.3 4.1% Gross
Slide 15: Currency development and hedging
Currency development and hedging 15
Slide 16: Net Financials
Net Financials Net financials Net financials for 2019 were DKK 12m, 2019 2018 Change which was an improvement of DKK 16m DKKm Currency hedge gains 21 9 12 compared to 2018. Currency gains (losses) 1 0 1 This was due to: Total currency related items 22 9 13 Interest expense from leases -9 -9 0 • Gain
Slide 17: Employee development
Employee development Number of employees decreased by 0.2% to 3,207 FTEs at the end of 2019. -0.2% FTEs (-8) This decrease was primarily driven by 3,500 reductions in Denmark (52 FTEs). 3,214 3,267 3,222 3,221 3,207 3,101 3,122 3,155 3,000 Growth outside Denmark was 44 FTEs (2.8%) mainly driven by t
Slide 18: Balance sheet
Balance sheet Assets 31 Dec 31 Dec Equity and liabilities 31 Dec 31 Dec DKKm 2019 2018 DKKm 2019 2018 Intangible assets 524 432 Share capital 250 250 Tangible assets 576 594 Treasury shares -4 -5 Lease assets 316 372 Retained earnings 860 764 Contract assets 69 111 Other reserves 14 12 Deferred tax
Slide 19: Optimizing net working capital
Optimizing net working capital • In 2019 NNIT has entered into a commercial use of factoring (Receivable Purchase Agreements) where a financial institution purchases outstanding invoices on some of the larger customers with a strong credit profile • The benefits of this program include improved liqu
Slide 20: Cash flows
Cash flows Cash flow 2019 2018 Change The free cash flow for 2019 was DKK 242m compared to DKKm Net profit for the period 183 236 -53 a free cash flow of DKK 116 million in 2018. Reversal of non-cash items 438 340 98 Net interest and taxes paid -65 -76 11 Changes in working capital -91 -62 -29 The i
Slide 21: Proposed dividend
Proposed dividend • Proposed dividend for 2019 of DKK 49m equal to DKK 2.00 per share DKKm 2016 2017 2018 2019 Dividends 102 105 113 98 • This brings NNIT’s total dividend for the financial Dividend per share 4.00 4.30 4.60 4.00 year 2019 to DKK 98m equal to DKK 4.00 per Payout ratio 47.2% 48.4% 48.
Slide 22: Backlog development, current year
Backlog development, current year Beginning of quarter -6.1% (-132) DKKm 3,000 2,923 2,728 2,517 538 2,500 488 2,171 410 2,039 2,000 319 12.3% 934 358 904 (+39) 871 1,500 821 -26.4% 605 (-217) 1,000 1,336 1,451 +4.4% 1,235 1,076 500 1,031 (+46) 0 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Life
Slide 23: Key assumtions in outlook 2020
Key assumtions in outlook 2020 The outlook for 2020 is based on the following important assumptions: • The backlog for 2020 at the beginning of 2020 includes the termination of the application maintenance agreement with Novo Nordisk with effect from January 1, 2020 and the termination of the busines
Slide 24: Outlook
Outlook 2020 Constant currencies: -4% to -8% Revenue growth Reported currencies: Around 0.2pp higher 6-8% before special items Constant currencies: Operating profit of DKK 15-25m margin Reported currencies: 0.2pp lower Capex Share of revenue: 5-7%1 1CAPEX investments and re- investments are in 2020
Slide 25: Closing remarks
Closing remarks • Revenue growth of 1.7% and operating profit margin before special items of 8.0% in constant currencies – in line with our latest outlook for 2019 • Strong growth within international life sciences (+71%) and finance (+24%), while the Novo Nordisk Group declined by 15% • Adjustment
Slide 26: Investor contact information
Investor contact information Upcoming events Investor contact regarding Q4 2019 March 5, 2020: • Annual General Meeting May 6, 2020 • Interim report for the first three months of 2020 August 13, 2020 • Interim report for the first six months of CARSTEN KROGSGAARD 2020 THOMSEN Chief Financial Officer