Slide 1: NNIT Interim report 9M 2015
NNIT Interim report 9M 2015 17 November 2015
Slide 2: The NNIT Presenting Team
The NNIT Presenting Team Per Ove Kogut Chief Executive Officer Carsten Krogsgaard Thomsen Chief Financial Officer Jesper Wagener Head of Investor Relations 2
Slide 3: Agenda
Agenda Highlights for first nine month of 2015 Sales and backlog Financial performance Outlook for 2015 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: First nine months of 2015 at a glance
First nine months of 2015 at a glance Constant Reported vs. 9M 2014 vs. 9M 2014 currencies currencies (constant curr.) (reported curr.) Revenue DKK 1,862m DKK 1,877m +8.2% +9.0% Operating profits DKK 202m DKK 177m +15.3% +0.7% Operating profit margin 10.9% 9.4% +0.7pp -0.8pp Net profits DKK 144m +4.
Slide 6: Backlog development
Backlog development Backlog for 2015 increased 7.2% y-o-y to DKK 2,483m driven by: • New contracts in public and life sciences segments • Extension and expansion of infrastructure and support agreements with Novo Nordisk • Mainly add-on sales to existing clients 9M 2015 order backlog intake for deli
Slide 7: Market update
Market update The Danish IT service market grew 1.2% in 2014 • Project services grew by 1.4% to DKK 12.4 billion in 2014 • Outsourcing services grew by 1.2% to 18.5 billion • Support services grew by 0.8% • to DKK 4.0 billion The expected CAGR 2014-2017 for the Danish IT service market is 1.3% • Pro
Slide 8: Market update
Market update • NNIT continues to gain market shares and now has 6.7% share in the Danish IT service market • This in an increase of 0.5pp compared to 2013 • The Danish IT service market grew by 1.2% in 2014 and has grown CAGR 1.5% since 2011 • Since 2011 NNIT has increased its market share from 5.2
Slide 9: Financial statement first nine month
Financial statement first nine month Pct/pp Pct/pp 9M 2015 9M 2015 DKK million 9M 2014* Change Change (reported) (constant*) (reported) (constant) Revenue 1,877.4 1,862.1 1,721.6 9.0% 8.2% Cost of goods sold 1,518.4 1,481.9 1,389.3 9.3% 6.7% Gross profit 358.9 380.2 332.3 8.0% 14.4% Gross profit mar
Slide 10: Segment development
Segment development Revenue Revenue Revenue Pct Change Pct Change DKKm 9M 2015 9M 2015 9M 2014* (reported) (constant) (reported) (constant*) Life Sciences 1,170.3 1,155.6 1,084.3 7.9% 6.6% Hereof Novo Nordisk Group 923.9 915.9 882.6 4.7% 3.8% Hereof other Life Sciences 246.4 239.7 201.7 22.2% 18.8%
Slide 11: Costs
Costs Total costs DKK 1,701m (10.0%) Currency headwinds influence costs of NNIT’s offshore delivery centers • 9M 2015 impact DKK 41m In constant currencies costs increased 7.4% • Increased employee costs caused by revenue growth • IPO launch program (starting March 2015) • Expanded office facilities
Slide 12: IT Operations
IT Operations Pct/pp Pct/pp 9M 2015 9M 2015 9M 2014* Change Change (reported) (constant*) DKK million (reported) (constant*) Revenue Novo Nordisk Group 619.0 612.3 607.0 2.0% 0.9% Non-Novo Nordisk Group 630.7 629.1 594.8 6.0% 5.8% Total 1,249.7 1,241.4 1,201.7 4.0% 3.3% Costs 1,137.4 1,108.0 1,064.3
Slide 13: IT Solutions
IT Solutions Pct/pp Pct/pp 9M 2015 9M 2015 9M 2014* Change Change (reported) (constant*) DKK million (reported) (constant*) Revenue Novo Nordisk Group 304.9 303.6 275.6 10.6% 10.2% Non-Novo Nordisk Group 322.8 317.1 244.3 32.1% 29.8% Total 627.7 620.7 519.9 20.7% 19.4% Costs 563.3 551.9 481.9 16.9%
Slide 14: Net Financials
Net Financials Net financials 9M 9M Net financials for 9M 2015 are DKKm 2015 2014 Change Net gains on Novo Nordisk shares* 3.9 0.2 3.7 DKK 3.6m primarily due to: Dividends received from Novo Nordisk shares 0.7 1.1 -0.4 • Net gains on Novo Nordisk shares held Total Novo Nordisk share related items 4.
Slide 15: Currency development and hedging
Currency development and hedging Avg. Rates Spot rates 9M y-o-y Currencies that NNIT is exposed vs. DKK 9M 2015 6M 2015 3M 2015 30 Sep '15 30 Jun '15 31 Mar '15 change CHF 702.66 706.19 705.44 683.44 716.45 713.92 14.7% to are still significantly higher CNY 106.26 107.51 107.22 104.76 107.55 111.97
Slide 16: Investments
Investments • Investments level in first nine month of 2015 was DKK 106.0m, which is DKK 23.7m lower than first nine months of 2014 • Unchanged expectations to investments for normal operation for full-year 2015 • NNIT is still investigating whether to build a second datacenter or whether to rent ad
Slide 17: Employee development
Employee development Number of employees increased by 9% to 2,539 FTE end of September 2015 • Since 30 June 2015 manning increased net 25 FTE, 20 of these in low cost countries Largest growth came in low cost countries • Increase of 142 FTE (20.4%) compared to end of September 2014 Number of employe
Slide 18: Manning Development
Manning Development • Offshore ratio increase by approx. 1% per quarter • Western manning increase due to client demands • Combined, China and Philippines have grown +20% per year, but recent growth has shifted to Czech Republic • Czech Republic benefited from being within EU 18
Slide 19: Balance sheet
Balance sheet Assets Equity and liabilities DKKm 9M 2015 9M 2014 DKKm 9M 2015 9M 2014 Intangible assets 29.5 37.4 Share capital 250.0 250.0 Tangible assets 406.9 408.0 Treasury shares -7.5 0.0 Deferred tax 33.7 2.2 Retained earnings 418.5 358.1 Other financial assets 28.2 21.6 Other reserves 4.6 5.7
Slide 20: Cash flows
Cash flows Cash flow Net cash flow is negative due to payment of DKKm 9M 2015 9M 2014 dividends and purchase of treasury shares of Net profit for the period 144.3 137.8 DKK 178m, however DKK 132m higher than Reversal of non-cash items 160.1 132.9 Net interest and taxes paid -20.3 -19.5 9M 2014. Chan
Slide 21: Outlook
Outlook Current guidance Previous guidance Revenue 6-8% at constant currencies 6-8% at constant currencies growth Around 0.8pp higher as reported Around 0.7pp higher as reported Operating Around 11% at constant currencies Around 11% at constant currencies margin Around 1.3pp lower as reported Around
Slide 22: Closing remarks
Closing remarks • Solid overall development in-line with expectations • Revenue growth for first 9 months is in-line with expectations • Backlog development continues to support year-end targets • Currency headwinds continue to impact offshore cost base • We maintain expectations for year-end 22
Slide 23: Investor contact information
Investor contact information Upcoming events 24 November 2015: Presentation at ABG Sundal IT seminar, Copenhagen 3 December 2015: Presentation at Danske Bank Markets' Copenhagen Winter Seminar 7 January 2015: Presentation at SEB Nordic Seminar, Copenhagen Investor contact NNIT A/S Østmarken 3A 2860
Slide 24: Appendix
Appendix Q3 2015 NNIT
Slide 25: Financial statement Q3 2015
Financial statement Q3 2015 Pct/pp Pct/pp Q3 2015 Q3 2015 DKK million Q3 2014* Change Change (reported) (constant*) (reported) (constant) Revenue 633.0 627.7 587.1 7.8% 6.9% Cost of goods sold 505.8 494.8 465.4 8.7% 6.3% Gross profit 127.2 132.9 121.7 4.5% 9.2% Gross profit margin 20.1% 21.2% 20.7%
Slide 26: Segment development Q3 2015
Segment development Q3 2015 Revenue Revenue Revenue Pct Change Pct Change DKKm Q3 2015 Q3 2015 Q3 2014* (reported) (constant) (reported) (constant*) Life Sciences 400.1 395.0 363.2 10.1% 8.7% Hereof Novo Nordisk Group 319.8 318.2 297.6 7.5% 6.9% Hereof other Life Sciences 80.3 76.8 65.7 22.3% 17.0%
Slide 27: IT Operations Q3 2015
IT Operations Q3 2015 Pct/pp Pct/pp Q3 2015 Q3 2015 Q3 2014* Change Change (reported) (constant*) DKK million (reported) (constant*) Revenue Novo Nordisk Group 216.0 214.5 206.0 4.8% 4.1% Non-Novo Nordisk Group 210.3 209.5 201.5 4.4% 4.0% Total 426.3 424.0 407.5 4.6% 4.1% Costs 381.7 372.5 361.0 5.7
Slide 28: IT Solutions Q3 2015
IT Solutions Q3 2015 Pct/pp Pct/pp Q3 2015 Q3 2015 Q3 2014* Change Change (reported) (constant*) DKK million (reported) (constant*) Revenue Novo Nordisk Group 103.8 103.6 91.5 13.4% 13.2% Non-Novo Nordisk Group 102.9 100.1 88.0 16.9% 13.7% Total 206.7 203.7 179.6 15.1% 13.4% Costs 188.9 185.3 160.8