Slide 1: NNIT full-year report 2016
NNIT full-year report 2016 January 25, 2017
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 2016 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: 2016 at a glance
2016 at a glance Revenue Operating profit Operating profit margin DKK 2,765m DKK 293m 10.6% +6.3% +8.8% +0.2pp +6.4% organic* +4.0% organic* -0.2pp organic* Net profit Order backlog Free cash flow DKK 216m DKK 2,093m DKK 188m +1.5% +3.6% -DKK 22m *Organic is growth in constant currencies using Q4 20
Slide 6: Q4 2016 at a glance
Q4 2016 at a glance Revenue Operating profit Operating profit margin DKK 769m DKK 97m 12.6% +6.4% +4.7% -0.2pp +6.4% organic* +0.8% organic* -0.7pp organic* Net profit Order backlog addition Free cash flow DKK 72m DKK 103m DKK 70m +6.0% -12.0% DKK -18m *Organic is growth in constant currencies using
Slide 7: Major wins
Major wins Amount Length Contract Segment Client (DKK million) (years) Application support Agreement Enterprise PANDORA High-double-digit 4.5 (Announced in press release 29 December) Prolongation of Application Outsourcing agreement Life sciences Lundbeck High-double-digit 4 (Announced in press rele
Slide 8: Backlog development
Backlog development Backlog for 2017 is DKK 2,093m, which is an increase of 3.6% compared to the start of 2016: • New customers in the enterprise and finance customer groups • Expansion of contracts with existing customers in the enterprise and finance customer groups • Partly countered by a lower b
Slide 9: The Danish ERP Market
The Danish ERP Market Estimated growth in sale of ERP licenses in Denmark Estimated ERP service market in Denmark DKKm 5.576 4.552 1.791 1.859 1.651 1.724 1.517 1.571 2015 2016e 2017e 2018e 2019e 2020e 2015 2020e ERP license sales market share in Denmark (2015) DKKm • NNIT is a Top 2 SAP IT service
Slide 10: Financial statement
Financial statement DKK million Q4 2016 Q4 2015 Change 2016 2015 Change Revenue 768,9 722,9 6,4% 2.764,6 2.600,3 6,3% Cost of goods sold 606,4 564,6 7,4% 2.223,0 2.083,0 6,7% Gross profit 162,5 158,3 2,6% 541,6 517,3 4,7% Gross profit margin 21,1% 21,9% -0.8pp 19,6% 19,9% -0.3pp Sales and marketing
Slide 11: Segment development
Segment development DKKm Q4 2016 Q4 2015 Change 2016 2015 Change Life Sciences 431,2 479,4 -10,1% 1.597,0 1.649,7 -3,2% Hereof Novo Nordisk Group 328,7 391,9 -16,1% 1.238,4 1.315,8 -5,9% Hereof other Life Sciences 102,5 87,5 17,1% 358,6 334,0 7,4% Enterprise 170,5 97,9 74,1% 545,6 384,7 41,8% Public
Slide 12: Revenue development last 5 years
Revenue development last 5 years Significant change in segmental revenue during 2016. 2012-2015 Novo Nordisk revenue CAGR was 4% while 2016 revenue declined 6%. 2012-2015 other segments revenue CAGR was 14% while 2016 revenue grew 19%. Change in revenue development from Novo Nordisk after Q1 2016. O
Slide 13: IT Operations
IT Operations DKKm Q4 2016 Q4 2015 Change 2016 2015 Change Revenue Novo Nordisk Group 225,9 270,9 -16,6% 841,4 889,9 -5,4% Non-Novo Nordisk Group 289,7 219,8 31,8% 982,3 850,5 15,5% Total 515,6 490,7 5,1% 1.823,7 1.740,4 4,8% Costs 447,9 430,7 4,0% 1.616,9 1.568,2 3,1% Operating profit 67,7 60,0 12,
Slide 14: IT Solutions
IT Solutions DKKm Q4 2016 Q4 2015 Change 2016 2015 Change Revenue Novo Nordisk Group 102,7 121,0 -15,1% 397,0 425,9 -6,8% Non-Novo Nordisk Group 150,5 111,2 35,3% 543,9 434,0 25,3% Total 253,2 232,2 9,1% 940,9 859,9 9,4% Costs 224,1 199,7 12,2% 854,8 763,0 12,0% Operating profit 29,1 32,5 -10,5% 86,
Slide 15: Currency development and hedging
Currency development and hedging After the depreciation of the CNY in H1 2016 vs. DKK, the CNY has been appreciating in Q4. USD, PHP and CHF have all been appreciating lately against the DKK, while EUR and CZK have all been relative flat vs. DKK. Despite the recent appreciations we continued to have
Slide 16: Net Financials
Net Financials Net financials Net financials for 2016 were DKK -12.6m, DKKm 2016 2015 Change Net gains on Novo Nordisk shares* -5,4 4,1 -9,5 which was DKK 15.8m lower than 2015. Dividends received from Novo Nordisk shares 0,7 0,7 0,1 Total Novo Nordisk share related items -4,7 4,8 -9,5 • Q4 net fina
Slide 17: Employee development
Employee development Number of employees increased by 10.7% to 2,809 FTE end of December 2016 due to large contract wins impacting the number of FTEs in H2 2016. The growth in average FTEs from 2015 to 2016 was 7.3% Growth came primarily in China, the Czech Republic and the Philippines: • Increase o
Slide 18: Balance sheet
Balance sheet Assets Equity and liabilities DKKm 2016 2015 DKKm 2016 2015 Intangible assets 33,3 27,6 Share capital 250,0 250,0 Tangible assets 412,9 402,2 Treasury shares -7,5 -7,5 Deferred tax 52,4 43,9 Retained earnings 542,8 396,0 Other financial assets 28,7 28,3 Other reserves 7,8 5,3 Total non
Slide 19: Cash flows
Cash flows Cash flow Cash flow from operating activities was DKKm 2016 2015 Change DKK 363m, which was DKK 10m higher Net profit for the period 215,7 212,4 3,3 Reversal of non-cash items 270,7 235,2 35,5 than 2015 due to non-cash items, lower Net interest and taxes paid -54,9 -80,4 25,5 payment of i
Slide 20: Outlook for 2017
Outlook for 2017 2017 1-5% in constant currencies Revenue Around 0.1pp higher growth in reported currencies Around 10% in constant currencies Operating No currency impact margin in reported currencies 12-14% of revenue Of which around 7pp relates to the new data center investment Capex of around DKK
Slide 21: Long-term targets
Long-term targets Long-term target The long-term target for revenue growth of at least Revenue At least 5% 5% is maintained as the lower level of revenue growth in constant currencies from the Novo Nordisk Group is expected to be compensated by revenue growth from other customer groups from 2018 and
Slide 22: Closing remarks
Closing remarks • Solid financial results in line with expectations • Strong growth in non-Novo Nordisk revenue • Revenue from Novo Nordisk declined but fully mitigated by other customer groups • Operating profit in line with expectations • 2017 guidance of 1-5% revenue growth being impacted by decl
Slide 23: Investor contact information
Investor contact information Upcoming events March 8, 2017: Annual General Meeting May 18, 2017: Interim report for the first three months of 2017 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