Slide 1: NNIT Q1 2017
NNIT Q1 2017 May 18, 2017 NANIT
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 quarter 2017 Sales and backlog Financial performance Outlook for 2017 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: Q1 2017 at a glance
Q1 2017 at a glance Revenue Operating profit Operating profit margin DKK 715m DKK 73m 10.2% +8.0% +4.3% -0.4pp +7.9% organic* +3.4% organic* -0.4pp organic* Net profit Order backlog Free cash flow DKK 56m DKK 2,385m DKK 142m +8.9% +4.8% +DKK 11m *Organic is growth in constant currencies using Q1 201
Slide 6: Backlog development
Backlog development Backlog for 2017 is DKK 2,385m, which is an increase of 4.8% compared to same time in 2016: • New customers in the enterprise and life sciences 12.7% customer groups • Expansion of contracts with existing customers -3.8% in the enterprise customer group • Partly countered by a lo
Slide 7: Major wins
Major wins Amount Length Contract Segment Client (DKK million) (years) Existing Q1 Onsite support contract Enterprise Medium-double-digit 4 customer 2017 Existing Prolongation of operation outsourcing Enterprise Small-double-digit 4 customer Global infrastructure agreement Q2 2017 Life sciences Novo
Slide 8: Novo Nordisk Infrastructure agreement
Novo Nordisk Infrastructure agreement The agreement covers Novo Nordisk's global IT infrastructure and further supports the pharmaceutical company's cloud strategy. Contract size is around DKK 1 billion over 6 years starting January 1, 2017. The contract replaces the former contract covering January
Slide 9: SCALES acquisition – in overview
SCALES acquisition – in overview Transaction Acquisition price consists of: details An upfront payment of DKK 122m of which 85% is in cash and 15% in NNIT shares An earnout target of DKK 52m with an earnout range of 0-130% of target depending on performance in EBITDA, additional revenue in appli
Slide 10: SCALES Group – an overview
SCALES Group – an overview • Founded in 2011 • One of the largest Dynamics AX 11 Dynamics AX 365 consultancies in Denmark – a recognized Microsoft partner platform implementations • The leading Dynamics 365 completed or ongoing consultancy in the Nordic Also nominated in top 3 in 2014+2015 (most in
Slide 11: How does the transaction create value
How does the transaction create value • Create a full stack offering for Dynamics AX from advisory, to implementation and operations (application and infrastructure) • Will create an unmatched ERP power house in Denmark with a full stack value proposition for the two market leading platforms - Micro
Slide 12: Dynamics AX – an attractive market
Dynamics AX – an attractive market • AX is increasingly being accepted as an attractive option for larger enterprises • Traditionally, Microsoft has had a strong market position in the Danish ERP market due to C5, Navision and AX • Gartner predicts the Danish ERP software market to grow plus 4% p.a.
Slide 13: Financial statement
Financial statement DKK million Q1 2017 Q1 2016 Change Revenue 715.3 662.6 8.0% Cost of goods sold 581.7 532.1 9.3% Gross profit 133.6 130.5 2.4% Gross profit margin 18.7% 19.7% -1.1pp Sales and marketing costs 32.9 32.9 -0.1% Administrative expenses 27.9 27.7 0.5% Operating profit 72.8 69.8 4.3% Op
Slide 14: Segment development
Segment development DKKm Q1 2017 Q1 2016 Change Life Sciences 414.4 392.6 5.6% Hereof Novo Nordisk Group 322.2 310.7 3.7% Hereof other Life Sciences 92.1 81.8 12.6% Enterprise 150.5 109.6 37.4% Public 84.2 100.7 -16.4% Finance 66.3 59.8 10.8% Total 715.3 662.6 8.0% Novo Nordisk revenue increased by
Slide 15: IT Operations
IT Operations DKKm Q1 2017 Q1 2016 Change Revenue Novo Nordisk Group 226.0 212.6 6.3% Non-Novo Nordisk Group 242.6 226.0 7.4% Total 468.7 438.6 6.9% Costs 419.3 385.7 8.7% Operating profit 49.3 53.0 -6.8% Operating profit margin 10.5% 12.1% -1.5pp Q1 revenue growth of 6.9%: Q1 operating profit margi
Slide 16: IT Solutions
IT Solutions DKKm Q1 2017 Q1 2016 Change Revenue Novo Nordisk Group 96,2 98,1 -1,9% Non-Novo Nordisk Group 150,5 125,9 19,5% Total 246,6 224,0 10,1% Costs 223,2 207,1 7,7% Operating profit 23,5 16,8 39,4% Operating profit margin 9,5% 7,5% 2pp Q1 revenue growth of 10.1% compared to Q1 2016 Q1 operati
Slide 17: Currency development and hedging
Currency development and hedging USD and PHP have been depreciating lately against the DKK, while CNY, EUR and CZK all have been relative flat vs. DKK. CHF has continued the appreciation against DKK. We continued to have currency tailwind from the CNY and PHP compared to 2016. EUR and CZK and are st
Slide 18: Net Financials
Net Financials Net financials Net financials for Q1 2017 were DKK - DKKm Q1 2017 Q1 2016 Change Net gains on Novo Nordisk shares* -0,6 -2,2 1,6 1.6m, which was DKK 2.7m better than Dividends received from Novo Nordisk shares 0,2 0,5 -0,3 Q1 2016. Total Novo Nordisk share related items -0,4 -1,7 1,3
Slide 19: Employee development
Employee development Number of employees increased by 11.4% to 2,868 FTE end of March 2017 due to large contract wins in H2 2016 such as PANDORA and Widex. Growth came primarily in China, the Czech Republic and the Philippines: • Increase of 224 FTE (22.9%) compared to end of March 2016 Number of em
Slide 20: Balance sheet
Balance sheet Assets Equity and liabilities DKKm Q1 2017 Q1 2016 DKKm Q1 2017 Q1 2016 Intangible assets 32.9 25.6 Share capital 250.0 250.0 Tangible assets 444.2 404.5 Treasury shares -7.5 -7.5 Deferred tax 44.8 51.1 Retained earnings 603.7 452.1 Other financial assets 29.0 28.4 Other reserves 14.4
Slide 21: Cash flows
Cash flows Cash flow Cash flow from operating activities was DKKm Q1 2017 Q1 2016 Change Net profit for the period 55.8 51.3 4.5 DKK 210m, which was DKK 33m higher due Reversal of non-cash items 48.1 57.3 -9.1 to positive development in working capital. Net interest and taxes paid -44.0 -32.0 -12.0
Slide 22: Outlook
Outlook 2017 Previous guidance Constant currencies: 4-8% Constant currencies: 1-5% Revenue Constant currencies (organic): 1-5% Constant currencies (organic): 1-5% growth Reported currencies: No impact Reported currencies: 0.1pp higher Constant currencies: Around 10% Constant currencies: Around 10% O
Slide 23: Closing remarks
Closing remarks • A solid financial performance in Q1 in-line with our expectations • Strong growth in non-Novo Nordisk revenue • Uncertainty in full-year Novo Nordisk revenue • Renewal of major infrastructure agreement with Novo Nordisk serving as a platform for the continued strategic cooperation
Slide 24: Investor contact information
Investor contact information Upcoming events August 16, 2017: Interim report for the first six months of 2017 October 26, 2017: Interim report for the first nine months of 2017 Investor contact NNIT A/S Østmarken 3A 2860 Søborg Denmark Jesper Wagener +45 3075 5392 jvwa@nnit.com 24