Slide 1: Full year 2018
Full year 2018
Slide 2: The NNIT Presenting Team
The NNIT Presenting Team PER OVE KOGUT CARSTEN KROGSGAARD KLAUS HOSBOND SKOVRUP Chief Executive Officer THOMSEN Head of Investor Relations Chief Financial Officer 2
Slide 3: Agenda
Agenda 01 Highlights for 2018 and new strategy 02 Sales and backlog 03 Financial performance 04 Outlook for 2019
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 2018 at a glance
Q4 2018 at a glance Revenue Operating profit Operating profit margin DKK 823m DKK 106m 12.9% +5.5% +8.1% +0.3pp +0.0pp F/X +1.0pp F/X +0.1pp F/X Net profit Order backlog addition Free cash flow DKK 85m DKK 161m DKK 0m +16% +13% DKK -2m 5
Slide 6: 2018 at a glance
2018 at a glance Revenue Operating profit Operating profit margin DKK 3,007m DKK 307m 10.2% +5.5% +17% +1.0pp -0.3pp F/X +3.2pp F/X +0.2pp F/X Net profit Order backlog for 2018 Free cash flow DKK 236m DKK 2,171m DKK 116m +19% -1.9% DKK +129m 6
Slide 7: Major wins
Major wins Amount Length Contract Segment Client (DKK million) (years) Infrastructure and application outsourcing agreement Finance AP Pension Lower three-digit 5 (Press release December 12, 2018) Q4 Agreement handling the IT work stations and citrix Finance SDC Not disclosed 5 2018 (Press release J
Slide 8: Backlog development, current year
Backlog development, current year Beginning of quarter -1.9% DKKm (-42) 3,000 2,846 2,682 2,487 2,500 2,213 2,171 2,000 1,779 1,659 1,543 1,362 -0.9% 1,500 1,350 (-13) 1,000 500 944 1,024 1,067 -3.4% 851 821 (-29) 0 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Non-Novo Nordisk Novo Nordisk 8
Slide 9: Backlog development, following two calendar years
Backlog development, following two calendar years Beginning of quarter DKKm +3.5% (+80) 3,500 3,102 3,000 2,742 2,564 2,500 2,324 2,404 1,814 2,000 1,566 1,448 +19.6% 1,235 1,477 1,500 (+242) 1,000 1,089 1,116 1,176 1,288 -14.8% 500 928 (-162) 0 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Non-No
Slide 10: New strategy
New strategy 6-8% organic revenue Operating profit margin NNIT 2022 growth excluding the of at Novo Nordisk Group least 10% Grow revenue through Grow revenue through Maintain and develop International life Grow NNIT core revenue increased level of strong Novo Nordisk sciences innovation relationship
Slide 11: Equity Story
Equity Story Life sciences growth Business model fit for Attractive financial strategy growth results • Solid track record of >20% • Full scale service offering in • Organic revenue growth of 6-8% organic growth in international life Advisory, Development, Operations excluding business from Novo sci
Slide 12: New organization
New organization NNIT A/S Chief Executive O' Per Kogut Finance, Legal, Investor People, Communication, Relations Marketing, IT& Quality Executive Vice President Senior Vice President Carsten Krogsgaard Thomsen Brit Kannegaard Johannessen Life Sciences Private & Public Projects & Consulting Infrastru
Slide 13: New reporting structure from Q1 2019
New reporting structure from Q1 2019* Revenue and Life sciences Private & Public operating profit International life sciences Enterprise Revenue reporting Life sciences Denmark Public Novo Nordisk Group Finance *Comparison figures will also be provided for 2018 13
Slide 14: Financial statement Q4 and 2018
Financial statement Q4 and 2018 DKK million Q4 2018 Q4 2017 Change 2018 2017 Change Revenue 822.9 779.7 5.5% 3,007.2 2,851.4 5.5% Cost of goods sold 657.6 614.9 6.9% 2,465.9 2,338.4 5.5% Gross profit 165.3 164.8 0.3% 541.2 512.9 5.5% Gross profit margin 20.1% 21.1% -1pp 18.0% 18.0% 0pp Sales and mar
Slide 15: Segment development
Segment development DKKm Q4 2018 Q4 2017 Change 2018 2017 Change Novo Nordisk Group 323.0 318.5 1.4% 1,124.2 1,185.4 -5.2% Life sciences excl. NNG 132.8 95.4 39.2% 433.4 374.6 15.7% Enterprise 202.1 191.3 5.6% 793.8 684.3 16.0% Public 92.6 115.0 -19.5% 399.2 353.9 12.8% Finance 72.4 59.6 21.5% 256.6
Slide 16: IT Operation Services
IT Operation Services DKKm Q4 2018 Q4 2017 Change 2018 2017 Change Revenue Novo Nordisk Group 229.8 220.9 4.0% 770.3 818.7 -5.9% Non-Novo Nordisk Group 273.3 259.6 5.3% 1,071.9 1,013.1 5.8% Total 503.1 480.5 4.7% 1,842.3 1,831.9 0.6% Costs 440.8 418.8 5.3% 1,663.7 1,627.8 2.2% Operating profit 62.3
Slide 17: IT Solution Services
IT Solution Services DKKm Q4 2018 Q4 2017 Change 2018 2017 Change Revenue Novo Nordisk Group 93.3 97.5 -4.4% 353.8 366.7 -3.5% Non-Novo Nordisk Group 226.5 201.7 12.3% 811.1 652.8 24.2% Total 319.8 299.2 6.9% 1,164.9 1,019.5 14.3% Costs 275.9 262.7 5.0% 1,036.0 961.3 7.8% Operating profit 43.9 36.5
Slide 18: Currency development and hedging
Currency development and hedging CNY/DKK CNY PHP/DKK PHP CZK/DKK CZK 105 16.0 30 15.5 29 CNY, PHP, USD and EUR have 100 15.0 14.5 28 appreciated slightly versus DKK in Q4 95 14.0 13.5 27 2018, whereas CHF is fairly stable. 90 13.0 26 12.5 85 12.0 25 In 2018, our operating profit margin tailwind was
Slide 19: Net Financials
Net Financials Net financials 2018 2017 Change DKKm Net financials for 2018 were DKK -2.3m, Net loss on Novo Nordisk shares* 0.0 -0.3 0.2 which was an improvement of DKK 6.8m Dividends received from Novo Nordisk shares 0.0 0.3 -0.3 compared to 2017. Total Novo Nordisk share related items 0.0 0.1 -0.
Slide 20: Employee development
Employee development +6.1% Number of employees increased by 6.1% FTEs (+184) to 3,214 FTE end of 2018. This increase was 3,500 3,214 primarily driven by Philippines (87 FTEs) and 3,101 3,122 3,155 2,868 2,965 2,999 3,030 China (52 FTEs) in-line with the long-term 3,000 offshoring strategy. 2,500 +12
Slide 21: Balance sheet
Balance sheet Assets Equity and liabilities 2018 2017 2018 2017 DKKm DKKm Intangible assets 1 432.2 212.1 Share capital 250.0 250.0 Tangible assets 593.6 574.0 Treasury shares -4.6 -6.6 Lease assets 371.7 369.6 Retained earnings 764.3 665.4 Contract assets 111.1 110.0 Other reserves 11.5 8.7 Deferre
Slide 22: Cash flows
Cash flows Cash flow Cash flow from operating activities was DKK 439m, 2018 2017 Change DKKm which was DKK 14m higher than 2017 due to higher Net profit for the period 235.6 198.8 36.8 Reversal of non-cash items 341.4 329.8 11.6 net profits and lower payment of taxes partly Net interest and taxes pa
Slide 23: Proposed dividends
Proposed dividends • It is suggested to propose dividends for 2018 of DKK 63.8m equal to DKK 2.60 per share • This brings NNIT’s total dividends for financial year 2018 to DKK 113.0m equal to DKK 4.60 per share and corresponding to a dividend pay-out ratio of 48.3% and dividend yield of 2.5% • Finan
Slide 24: Outlook
Outlook 2019 Long-term targets Revenue Constant currencies: 3-6% 6-8% organic excl. Novo Nordisk Group growth Reported currencies: 0.3pp higher At least 10% Operating Constant currencies: 10-10.5% It is expected that the margins in the life sciences profit margin Reported currencies: 0.1pp lower seg
Slide 25: Closing remarks
Closing remarks • Revenue growth of 5.5% in Q4 2018, and 5.5% for the full year 2018, hereof 13% growth from clients outside the Novo Nordisk Group • Operating profit margin of 12.9% in Q4 2018 and 10.2% for the full year 2018 • Strong growth within international life sciences and finance customer g
Slide 26: Investor contact information
Investor contact information Upcoming events Investor contact March 7, 2019: • Annual General Meeting May 14, 2019: • Interim report for the first three months of 2019 August 14, 2019: • Interim report for the first six months of 2019 October 24, 2019: KLAUS HOSBOND SKOVRUP Head of Investor Relation