Slide 1: NNIT Full year 2017
NNIT Full year 2017 January 25, 2018
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 2017 Sales and backlog Financial performance Outlook for 2018 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 2017 at a glance
Q4 2017 at a glance Revenue Operating profit Operating profit margin DKK 812m DKK 113m 13.9% +5.6% +16.9% +1.3pp 0.9% organic* +6.7% organic* +0.7pp organic* +5.2% acquisition +5.4% acquisition +0.0pp acquisition -0.5% F/X +4.8% F/X +0.6pp F/X Net profit Order backlog addition Free cash flow DKK 86m
Slide 6: 2017 at a glance
2017 at a glance Revenue Operating profit Operating profit margin DKK 2,892m DKK 277m 9.6% +4.6% -5.5% -1.0pp +1.8% organic* -11.9% organic* -1.4pp organic* -0.9pp due to settlement -8.9pp due to settlement -0.8pp due to settlement +3.0% acquisition +3.1% acquisition +0.0pp acquisition -0.2% F/X +3.
Slide 7: Major wins
Major wins Amount Length Contract Segment Client (DKK million) (years) Extension of infrastructure outsourcing contract Enterprise Arla Foods Mid-size triple-digit 5 (Press release January 5, 2018) Extension of regional infrastructure outsourcing contracts Novo Nordisk Novo Nordisk Minor triple-digi
Slide 8: Backlog development
Backlog development Backlog for 2018 is DKK 2,213m, which is an increase of 4.0% compared to same time in 2017. • The backlog at the beginning of both 2017 and 2018 has been restated according to IFRS 15 which takes effect as from January 1, 2018. For 2017 this means a restated backlog of DKK 2,127m
Slide 9: Data center completed – on time and budget
Data center completed – on time and budget Data center facts • Investments in 2017: DKK 181 million • Tier III certified • State-of-the-art data center • Completed on time and on budget Data center overview NNIT now owns and operates two tier III data centers and has external capacity in a third dat
Slide 10: Financial statement Q4 2017
Financial statement Q4 2017 SCALES Q4 2017 Q4 2017 Change impact DKK million Revenue 812.2 768.9 5.6% 5.2pp Cost of goods sold 631.5 606.4 4.1% 5.8pp Gross profit 180.7 162.5 11.2% 3.2pp Gross profit margin 22.3% 21.1% 1.1pp -0.5pp Sales and marketing costs 35.9 36.7 -2.1% 0pp Administrative expense
Slide 11: Financial statement 2017
Financial statement 2017 Settlement SCALES 2017 2016 Change impact impact DKK million Revenue 2,891.9 2,764.6 4.6% -0.9pp 3.0pp Cost of goods sold 2,362.5 2,223.0 6.3% 0pp 3.3pp Gross profit 529.4 541.6 -2.3% -4.8pp 1.7pp Gross profit margin 18.3% 19.6% -1.3pp -0.7pp -0.2pp Sales and marketing costs
Slide 12: Segment development
Segment development Q4 2017 Q4 2016 Change 2017 2016 Change DKKm Life Sciences 446.9 431.2 3.6% 1,612.3 1,597.0 1.0% Hereof Novo Nordisk Group 351.6 328.7 7.0% 1,233.8 1,238.4 -0.4% Hereof other Life Sciences 95.3 102.5 -7.1% 378.5 358.6 5.6% Enterprise 193.0 170.5 13.2% 689.2 545.6 26.3% Public 114
Slide 13: IT Operations
IT Operations DKKm Q4 2017 Q4 2016 Change 2017 2016 Change Revenue Novo Nordisk Group 251.8 225.9 11.5% 862.1 841.4 2.5% Non-Novo Nordisk Group 255.1 289.7 -12.0% 998.4 982.3 1.6% Total 506.9 515.6 -1.7% 1,860.6 1,823.7 2.0% Costs 432.6 447.9 -3.4% 1,642.5 1,616.9 1.6% Operating profit 74.3 67.7 9.7
Slide 14: IT Solutions
IT Solutions Settle- Settle- DKKm Q4 2017 Q4 2016 Change Scales 2017 2016 Change Scales ment ment Revenue Novo Nordisk Group 99.8 102.7 -2.8% 0pp n.a. 371.6 397.0 -6.4% n.a. n.a. Non-Novo Nordisk Group 205.6 150.5 36.6% 4.6pp 26.7pp 659.7 543.9 21.3% -4.8pp 15.3pp Total 305.4 253.2 20.6% 2.7pp 15.9p
Slide 15: Currency development and hedging
Currency development and hedging Major currencies except USD and CHF have all been appreciating lately versus the DKK. We see currency tailwind from the CNY and PHP compared to 2016, while we have currency headwind from CZK compared to 2016. In 2017 our operating profit margin headwind was 0.2pp com
Slide 16: Net Financials
Net Financials Net financials Net financials for 2017 were DKK - DKKm 2017 2016 Change Net gains on Novo Nordisk shares* -0.3 -5.4 5.2 0.9m, which was DKK 11.6m better Dividends received from Novo Nordisk shares 0.3 0.7 -0.4 than 2016. Total Novo Nordisk share related items 0.1 -4.7 4.7 Currency hed
Slide 17: Employee development
Employee development Number of employees increased by 7.9% to 3,030 FTE end of December 2017. This increase was primarily driven by the acquisition of SCALES, which increased Western manning by 121 FTE. Excluding SCALES, the number of employees increased 3.5%. The increase was solely outside Denmark
Slide 18: Balance sheet
Balance sheet Assets Equity and liabilities DKKm 2017 2016 DKKm 2017 2016 Intangible assets1 212.1 33.3 Share capital 250.0 250.0 Tangible assets2 574.0 412.9 Treasury shares -6.6 -7.5 Deferred tax 52.5 52.4 Retained earnings 697.4 542.8 Other financial assets 32.6 28.7 Other reserves 8.5 7.8 Propos
Slide 19: Cash flows
Cash flows Cash flow Cash flow from operating activities was DKKm 2017 2016 Change Net profit for the period 216.5 215.7 0.8 DKK 347.6m, which was DKK 15.6m lower Reversal of non-cash items 247.1 270.7 -23.6 due to fewer reversal of non-cash items on Net interest and taxes paid -83.8 -54.9 -28.9 a s
Slide 20: IFRS implementation
IFRS implementation 2017 impact DKKm 2017 IFRS 15 & 16 2017 (reported currencies) Adjusted impact Revenue 2,891.9 2,851.4 -1.4% EBITDA 429.1 491.2 14.5% EBIT 276.8 259.2 -6.4% EBIT margin 9.6% 9.1% -0.5pp EBITDA margin 14.8% 17.2% 2.4pp Solvency ratio 55.0% 41.5% -13.5% ROIC 26.1% 16.9% -9.2pp 2018
Slide 21: Outlook
Outlook 2018 Long-term targets Revenue Constant currencies: 4 - 7% At least 5% growth Reported currencies: 0.4pp lower The expectations for growth in revenue is based on the restated IFRS 15 revenue of DKK 2,851m. Operating Constant currencies: 10 – 10.5% At least 10% margin Reported currencies: 0.4
Slide 22: Closing remarks
Closing remarks • Strong Q4 to finish 2017 • Strong positive impact from the acquisition of SCALES • The strong underlying cash flow generation allows us to raise dividend even in a year, where we build a new data center and acquired SCALES • For 2018 we expect revenue growth of 4-7% and an operatin
Slide 23: Investor contact information
Investor contact information Upcoming events March 8, 2018: Annual General Meeting 2018 May 16, 2018: Interim report for the first three months of 2018 August 17, 2018: Interim report for the first six months of 2018 October 25, 2018: Interim report for the first nine months of 2018 Investor contact