Slide 1: Annual report 2019
Annual report 2019 NNIT A/S, Oestmarken 3A, DK-2860 Soeborg • CVR no. 21 09 31 06
Slide 2: Contents
2 Annual report 2019 Management Review Contents Management’s review Financial statements 2019 NNIT in brief Statements At a glance 3 Management's statement 46 Equity story 4 Independent auditor's report 47 Letter from Management 5 Main highlights 2019 7 Performance highlights 9 Consolidated financia
Slide 3: At a glance
3 Annual report 2019 Management Review At a glance Revenue, Operating profit margin DKK million before special items Headquartered in Denmark, NNIT has subsidiaries throughout Europe, North America and Asia. 3,058 7.8% NNIT revenue in 2019. A growth of Operating profit margin before 1.7% special ite
Slide 4: Equity story
4 Annual report 2019 Management Review Equity story Leading Danish IT services >20% historical organic Top two Danish IT company with potential to revenue growth outside market leader(1) further utilize life sciences Denmark(2) DNA internationally. High dividend pay-out Strong domain knowledge ratio
Slide 5: 2019 leaves a mixed picture
5 Annual report 2019 Management Review 2019 leaves a mixed picture 2019 was a year that represented a very mixed picture for NNIT. Growth in international life sciences continued to be very strong, while changes in buying patterns from some of NNIT’s largest clients and a decrease in project revenue
Slide 6: Letter from Management (continued)
6 Annual report 2019 Management Review to mitigate this we announced a business new entrants as well as disappointing results Key elements in this plan are standardiza- and cost reduction plan including reduction with the infrastructure outsourcing area, the tion, continuous automation, higher billa
Slide 7: Main highlights 2019
7 Annual report 2019 Management Review Main highlights 2019 Revenue Operating profit margin Free cash flow 3,058 242 DKK million 3,007 % DKK million 10.6 211 10.3 10.2 188 2,851 9.2 2,765 7.8 2,600 116 3,058 2015 2016 2017 2018 2019 7.8% 2015 2016 2017 2018 2019 242 2015 2016 -13 2017 2018 2019 • Re
Slide 8: Protecting your assets with IT security
8 Annual report 2019 Management Review Protecting your assets with IT security In an increasingly complex world of IT, the protection of business assets becomes progressively more important and more sophisticated. As more and more random and targeted cyberattacks continue to threaten businesses glob
Slide 9: Five-year performance highlights
9 Annual report 2019 Management Review Five-year performance highlights 2018 2018 DKK million 2019 2018 2017 2016 2015 -2019 DKK million 2019 2018 2017 2016 2015 -2019 Financial performance Financial ratios Revenue: Change Revenue growth 1.7% 5.5% 3.1% 6.3% 7.9% Novo Nordisk Group 955 1,124 1,185 1,
Slide 10: 2019 financial performance
10 Annual report 2019 Management Review 2019 financial performance NNIT delivered revenue growth of 1.7% and an operating corresponding to an operating profit margin Novo Nordisk Group profit margin before special items of 7.8%. of 7.8%, which was 2.4pp lower than in 2018 Revenue from the Novo Nordi
Slide 11: Life sciences Denmark and Private & Public
11 Annual report 2019 Management Review Life sciences Denmark operating profit margin of 13.1% compared Revenue from clients in life sciences Den- to 18.0% in 2018. Income statement mark increased by 3.8% in 2019 mainly due Private & Public, revenue and DKK million 2019 2018 Change to higher project
Slide 12: Revenue growth, backlog and cash flow
12 Annual report 2019 Management Review price reductions and lower scope on large backlog numbers less useful as a predictor compared to a free cash flow of DKK 116.1 outsourcing agreements. for revenue growth than in previous years. million in 2018. 2018 was impacted by the Revenue growth acquisiti
Slide 13: Outlook
13 Annual report 2019 Management Review Outlook The order entry backlog for 2020 at the Summary of current expectations Currency sensitivities beginning of Q1 2020 declined by DKK 131.9 Estimated annual impact on NNIT’s Hedging million to DKK 2,039 million, or by 6.1%, Current operating profit of a
Slide 14: Market trends
14 Annual report 2019 Management Review Market trends NNIT's new focused go-to market strategy is supported by key market trends. Due to NNIT's prominence as a digital transforma- tion partner and IT services company in Customer experience Next generation ERP Integration Denmark and internationally
Slide 15: NNIT strategy
15 Annual report 2019 Management Review NNIT strategy The strategy presented in January 2019 was based on a thorough review of the direction set at the IPO and included At NNIT, we still stand firmly on our three core values and greater customer centricity and a new organization. we strongly believe
Slide 16: Go-to-market strategy dimensions
16 Annual report 2019 Management Review To ensure client success through fast and sustainable value creation, three dimensions apply to the go-to market strategy covering all the selected winning solutions. Value creation Customer Centricity Proven concept Fit for purpose First time right Clients ne
Slide 17: Ten winning solutions
17 Annual report 2019 Management Review As part of the new strategic direction, ten winning solutions have been identified. These solutions are characterized by existing NNIT capabilities and market potential. The winning solutions are: SAP Solutions Veeva Solutions Employee experience Cybersecurity
Slide 18: Halfmann Goetsch Partner AG – an NNIT Group Company
18 Annual report 2019 Management Review Halfmann Goetsch Partner AG – an NNIT Group Company In April 2019, NNIT A/S announced the acquisition of bine deep domain knowledge about pro- as Merck, Novartis and Hoffmann La-Roche. cesses, IT and business requirements with With more than 10 years of busine
Slide 19: Our business model
19 Annual report 2019 Management Review Our business model NNIT resources This is how we bring digital transformation to life Benefits Strategy, vision and culture People: We advise: We build: On clients: NNIT’s business Combined with aresults strongrely company on highly culture As digital solution
Slide 20: The clients we serve
20 Annual report 2019 Management Review The clients we serve NNIT offers a broad range of Life sciences winning solutions to serve International life sciences Denmark life sciences Novo Nordisk Group client groups in Denmark and With more than 20 years’ experience, NNIT Originating from the Danish l
Slide 21: Client segments and market size
21 Annual report 2019 Management Review Life Sciences Private & Public International Denmark Novo Nordisk life sciences life sciences Group Enterprise Finance Public Market size 2019E1: 82.5bn Market size 2019E1: 3.7bn External IT spend Market size 2019E1: 16.7bn Market size 2019E1: 8.8bn Market siz
Slide 22: Customer experience and satisfaction
22 Annual report 2019 Management Review Customer experience and satisfaction NNIT’s clients include some of the most prestigious brands; international life sciences companies, enterprises and financial services firms as well as public sector organizations. A common denominator for all of NNIT’s To f
Slide 23: Customer experience
23 Annual report 2019 Management Review Customer experience NNIT runs an extensive customer feedback Customer satisfaction EvalGo End-user survey program in order to chart the customer 3.6 4.3 4.4 experience and improve it systematically. The numbers are consistently addressed in all areas of the or
Slide 24: New partnerships
24 Annual report 2019 Management Review New partnerships In addition to already well established partnerships such as SAP, Microsoft and Veeva NNIT in 2019 introduced a number of new partnerships. By focusing on what our clients can achieve by using the latest technology rather than on the technical
Slide 25: Cloud – how high will you go
25 Annual report 2019 Management Review Cloud – how high will you go Moving to the cloud has long been a goal for many businesses. However, for some, meeting regulatory compliance requirements prove to be a strong challenge. With NNIT’s hybrid cloud, clients benefit from the best of two worlds; the
Slide 26: Business and company overview
26 Annual report 2019 Management Review Business and company overview Revenue in Denmark, 2019, DKK million Headquartered in Denmark, NNIT has subsidiaries throughout Europe, North America and Asia. 2,493 Based on location of clients UK Norway Established: Established: Revenue outside 2015 2017 Denm
Slide 27: Company overview by region
27 Annual report 2019 Management Review Company overview Denmark Switzerland, UK, North America China NNIT headquarters, located in Soeborg, Ireland, Germany, Norway The Princeton and Basking Ridge-based NNIT’s China office in Tianjin is the company’s Copenhagen is responsible for delivery and The Z
Slide 28: Novo Nordisk, major customer
28 Annual report 2019 Management Review Novo Nordisk, major customer An important part of NNIT’s business is its relationship and cooperation with Novo Nordisk. Approximately one third of NNIT’s revenue stems from this single client, hence any changes in the relationship will affect NNIT's business.
Slide 29: Risk management
29 Annual report 2019 Management Review Risk management Operating in a highly competitive and rapidly changing In NNIT, risk management consists of four Below an overview of the key risks identified global marketplace, a structured approach to risk elements; risk identification, risk assess- as part
Slide 30: Risks and mitigating actions
30 Annual report 2019 Management Review Risk Risk description Mitigating actions In 2019, NNIT generated revenue of DKK reduce its dependency on Novo Nordisk As the Novo Nordisk Group remains an Simultaneously, NNIT will focus on the 955 from its largest client, the Novo Nor- business, it constitute
Slide 31: Risks and mitigating actions
31 Annual report 2019 Management Review Risk Risk description Mitigating actions NNIT must continue to generate new and Intensifying competition from both new NNIT has formulated a new strategy focus- leading knowledge and competencies as more business. Operating in a competi- and existing competito
Slide 32: Great people make the difference
32 Annual report 2019 Management Review Great people make the difference Headquartered in Denmark, NNIT has subsidiaries throughout Europe, North America and Asia. In 2019, the company had a total headcount of 3,259 employees (3,237 FTE). To succeed as an IT company, NNIT must to develop individual
Slide 33: One world, One NNIT
33 Annual report 2019 Management Review ‘stay interviews’, investigating and clarify- company. We therefore operate a com- One world, One NNIT ing the reasons for staying as well as the prehensive leadership training program to threats of leaving. We further believe that a ensure that NNIT’s managem
Slide 34: Integration
34 Annual report 2019 Management Review Integration In a constantly evolving world of technology, the need for system integration becomes increasingly apparent. As the ability for all systems to connect, ‘talk to each other’, and share data across to improve value, system integration is at the core
Slide 35: Corporate governance
35 Annual report 2019 Management Review Corporate governance The Board of Directors of NNIT has a continuous focus Governance Structure and both are regarded as representing the on good governance practices. NNIT is in full compliance interests of a controlling shareholder. The Annual general meetin
Slide 36: Corporate governance documentation and diversity
36 Annual report 2019 Management Review Read more about the members of the Board The Remuneration Committee Board of Directors and the Executive Man- of Directors on pages 41-43. The Remuneration Committee consists of agement, Board composition and dynamics, Corporate Governance three members, the m
Slide 37: Corporate Social Responsibility
37 Annual report 2019 Management Review tional members of the Board. Currently, 2019 at https://media.nnit.com/Governance/ one shareholder-elected Board member is Corporate-Governance-Statement-2019.pdf Corporate Social Responsibility of non-Danish nationality. NNIT’s statutory Today, NNIT adheres t
Slide 38: Remuneration
38 Annual report 2019 Management Review Remuneration NNIT has adopted a Remuneration Policy remuneration policy, making proposals on strengthen focus and promotion of the long- covering Executive Management and the remuneration for members of the Board of term interests and sustainability of NNIT an
Slide 39: Shareholder information
39 Annual report 2019 Management Review Shareholder information NNIT had 21,835 registered shareholders at December 31, reported holding of more than 5% of NNIT’s tries, while the outstanding 3% of the shares 2019, representing 97% of the company’s share capital. share capital in pursuance of sectio
Slide 40: Dividend policy and shareholder communication
40 Annual report 2019 Management Review a total payout ratio of at least 45%, while the new requirements under sections 139 remaining cash and debt neutral. and 139a of the Danish Companies Act. Due to the strong underlying cash flow Communication with shareholders generation, the Board of Directors
Slide 41: Board of Directors
41 Annual report 2019 Management Review Board of Directors Carsten Dilling Peter Haahr Anne Broeng Chairman of the Board Deputy Chairman of the Board Chairman of the Audit committee Member of the Remuneration Member of the Remuneration Committee Committee Personal and educational Personal and educat
Slide 42: Board of Directors
42 Annual report 2019 Management Review Christian Kanstrup Anders Vidstrup Brankica Markovic Member of the Audit Committee Employee-elected Employee-elected representative representative Personal and educational Personal and educational Personal and educational background background background Born
Slide 43: Board of Directors
43 Annual report 2019 Management Review Eivind Kolding Caroline Serfass Trine Io Bjerregaard Chairman of the Board Member Employee-elected Remuneration Committee representative Member of the Audit Committee Personal and educational Personal and educational Personal and educational background backgro
Slide 44: Group Management
44 Annual report 2019 Management Review Group Management Jacob Hahn Brit Kannegaard Carsten Krogsgaard Per Kogut Claus Middelboe Ricco Larsen Søren Østergaard Michelsen Johannessen Thomsen Andersen Senior Vice President, Senior Vice President, Executive Vice President President and CEO, Senior Vice
Slide 45: Financial statements 2019
45 Annual report 2019 Financial statements 2019 Statements Consolidated financial statements Parent company financial statements Management's statement 46 Income statement and statement of Income statement 93 Independent auditor's Report 47 comprehensive income 51 Balance sheet 94 Balance sheet 52 S
Slide 46: Management's statement
46 Annual report 2019 Management's statement The Board of Directors and the Executive dated financial statements and the parent Soeborg, January 29, 2020 Management (the “Management”) have company financial statements give a true today discussed and approved the annual and fair view of the Group’s a
Slide 47: Independent auditor's report
47 Annual report 2019 Independent auditor's report To the Shareholders of NNIT A/S Our opinion In our opinion, the Consolidated Financial Moreover, in our opinion, the Parent Com- What we have audited to 31 December 2019, pp. 92-104, comprise Statements give a true and fair view of the pany Financia
Slide 48: Key Audit Matter
48 Annual report 2019 Key Audit Matter How our audit addressed the Key Audit Matter Revenue recognition percentage of completion as of the date Our audit procedures in regard of revenue We assessed the accuracy of the stage of We focused on revenue recognition related of review. Such re-assessments
Slide 49: Auditor's responsibilities
49 Annual report 2019 Auditor’s responsibilities for the Audit of the financial statements Our objectives are to obtain reasonable design audit procedures that are appropri- • Obtain sufficient appropriate audit evi- independence, and to communicate with assurance about whether the Financial ate in
Slide 50: Consolidated financial statements
50 Annual report 2019 Consolidated financial statements Consolidated financial statements
Slide 51: Income statement and statement of comprehensive income
51 Annual report 2019 Consolidated financial statements Income Statement of statement comprehensive income for the year ended December 31 for the year ended December 31 DKK million Note 2019 2018 DKK million Note 2019 2018 Revenue 2.1 3,058 3,007 Net profit for the year 183 236 Cost of goods sold 2.
Slide 52: Balance sheet
52 Annual report 2019 Consolidated financial statements Balance sheet at December 31 ASSETS EQUITY AND LIABILITIES DKK million Note 2019 2018 DKK million Note 2019 2018 Intangible assets 3.1, 5.6 524 432 Share capital 4.2 250 250 Tangible assets 3.3 576 594 Treasury shares 4.2 (4) (5) Lease assets 4
Slide 53: Statement of cash flows
53 Annual report 2019 Consolidated financial statements Statement of cash flows for the year ended December 31 DKK million Note 2019 2018 The changes in cash flow cannot all be derived Net profit for the year 183 236 directly from the income statement and balance sheet due to the acquisition of subs
Slide 54: Statement of changes in equity 2019
54 Annual report 2019 Consolidated financial statements Statement of changes in equity at December 31 DKK million Other reserves Exchange Total Share Treasury Retained rate ad- Cash flow other Proposed 2019 Note capital shares earnings justments hedges Tax reserves dividends Total Balance at the beg
Slide 55: Statement of changes in equity 2018
55 Annual report 2019 Consolidated financial statements Statement of changes in equity at December 31 DKK million Other reserves Exchange Total Share Treasury Retained rate ad- Cash flow other Proposed 2018 Note capital shares earnings justments hedges Tax reserves dividends Total Balance at the beg
Slide 56: Notes to the consolidated financial statements
56 Annual report 2019 Consolidated financial statements Notes to the consolidated financial statements 1. Basis of preparation 3. Operating assets and liabilities 5. Other disclosures 1.1 Summary of significant accounting policies 57 3.1 Intangible assets 70 5.1 Long-term incentives 84 1.2 Summary o
Slide 57: 1. Basis of preparation
57 Annual report 2019 Consolidated financial statements 1. Basis of preparation 1.1 Summary of significant accounting policies The consolidated financial statements are pre- Revenue is recognized over time when an as- ments from customers are recognized under period. Cost regarding the transition pr
Slide 58: 1.1 Accounting policies – continued; 1.2; 1.3
58 Annual report 2019 Consolidated financial statements 1.1 Summary of significant accounting policies – continued 1.3 Changes in accounting policies and disclosures Hedge accounting When a hedging instrument no longer meets the Adoption of new or amended IFRSs Changes in disclosures All currency de
Slide 59: 1.4 General accounting policies
59 Annual report 2019 Consolidated financial statements 1.4 General accounting policies Principles of consolidation If the initial accounting for business combination bles and liabilities in foreign currencies that have activities and are non-recurring of nature. Such can be determined only prelimin
Slide 60: 1.4 General accounting policies – continued
60 Annual report 2019 Consolidated financial statements 1.4 General accounting policies – continued Deferred tax is measured on the basis of the Any development projects that do not meet the The depreciable amount of the assets is depreci- NNIT has three different types of leases: tax rules and tax
Slide 61: 1.4 General accounting policies – continued
61 Annual report 2019 Consolidated financial statements 1.4 General accounting policies – continued Prepayments relevant NNIT employees provided the related self-investment with reference to the IPO Launch Other current liabilities Prepayments comprise costs incurred for the next service. Incentive
Slide 62: 1.5 Financial definitions
62 Annual report 2019 Consolidated financial statements 1.5 Financial definitions Operating profit margin = Operating profit x 100 Non-IFRS financial measures Revenue In the Annual Report, NNIT discloses certain Backlog Gross profit margin = Gross profit x 100 financial measures of the Group's finan
Slide 63: 2.1 Segment information
63 Annual report 2019 Consolidated financial statements 2. Results for the year 2.1 Segment information NNIT delivers services and solutions through two business units, Life sciences and Private & Public, each responsible for delivering a number of services to customers. The Life sciences unit deliv
Slide 64: 2.2 Employee costs
64 Annual report 2019 Consolidated financial statements 2.2 Employee costs DKK million 2019 2018 Average number of Employee costs 2019 (2018) employees 2019 (2018) DKK million Employee costs comprise: FTE Wages and salaries 1,629 1,447 4.4% 0.2% 8.2% 0.5% Share-based payments 13 16 8.3% 4.9% Pension
Slide 65: 2.2 Employee costs – continued
65 Annual report 2019 Consolidated financial statements 2.2 Employee costs – continued Board of Directors Fixed Fee for Travel DKK million base fee committee work allowance Total 2019 Carsten Dilling (Chairman of the Board of Directors and member of the Remuneration Committee) 0.8 - - 0.8 Peter H.J.
Slide 66: 2.2–2.4 Employee costs, development costs, amortization
66 Annual report 2019 Consolidated financial statements 2.2 Employee costs – continued 2.3 Development costs Short-term incentive program (STIP) DKK million 2019 2018 Group Management and certain other employees participate in a STIP program, which entitles each participant to receive an annual perf
Slide 67: 2.6 Income taxes
67 Annual report 2019 Consolidated financial statements 2.6 Income taxes DKK million 2019 2018 Current tax 47 51 Deferred tax 4 16 Adjustments recognized for current tax of prior periods (3) 1 Adjustments recognized for deferred tax of prior periods - 1 Income taxes in the income statement 48 69 Com
Slide 68: 2.6 Income taxes – continued
68 Annual report 2019 Consolidated financial statements 2.6 Income taxes – continued Deferred taxes Lease receivables Share Cash Intangible Tangible Current and based flow DKK million assets assets assets liabilities programs hedges Provisions Total 2019 Deferred tax asset At the beginning of the ye
Slide 69: 2.6 Income taxes – continued
69 Annual report 2019 Consolidated financial statements 2.6 Income taxes – continued DKK million 2019 2018 Tax payable/receivable Tax payable/receivable at the beginning of the year (6) (18) Adjustment hereto 2 - Income tax paid during the year 47 41 Tax paid related to previous years (1) 17 Withhol
Slide 70: 3.1 Intangible assets
70 Annual report 2019 Consolidated financial statements 3. Operating assets and liabilities 3.1 Intangible assets IT Other IT development intangible development projects under DKK million Goodwill assets projects construction 2019 2019 Cost at the beginning of the year 367 30 85 15 497 Adjustment to
Slide 71: 3.1 Intangible assets – continued
71 Annual report 2019 Consolidated financial statements 3.1 Intangible assets – continued IT Other IT development intangible development projects under DKK million Goodwill assets projects construction 2018 2018 Cost at the beginning of the year 168 9 79 7 263 Adjustment - - 4 (4) - Additions from b
Slide 72: 3.2 Impairment test
72 Annual report 2019 Consolidated financial statements 3.2 Impairment test A sensitivity analysis has not been carried out, as negative changes in the fundamental assumption Goodwill that will result in impairment of goodwill, are considered unlikely to become a reality. The carrying amount of good
Slide 73: 3.3 Tangible assets
73 Annual report 2019 Consolidated financial statements 3.3 Tangible assets Payments on account and Land and Other Leasehold assets under DKK million buildings equipment improvements construction 2019 2019 Cost at the beginning of the year 373 1,025 67 21 1,486 Adjustment (2) 2 - - - Additions 2 86
Slide 74: 3.3 Tangible assets – continued
74 Annual report 2019 Consolidated financial statements 3.3 Tangible assets – continued Payments on account and Land and Other Leasehold assets under DKK million buildings equipment improvements construction 2018 2018 Cost at the beginning of the year 163 876 66 230 1,335 Additions 25 117 1 21 164 D
Slide 75: 3.4 Contract balances; 3.5 Deposits
75 Annual report 2019 Consolidated financial statements 3.4 Contract balances 3.4 Contract balances – continued Contract balances consist of customer-related assets and liabilities regarding service level agreements. Future contract obligations Below table shows performance obligations resulting fro
Slide 76: 3.6 Trade receivables; 3.7; 3.8
76 Annual report 2019 Consolidated financial statements 3.6 Trade receivables – continued 3.8 Employee benefit obligations NNIT applies the IFRS 9 simplified approach to measure expected credit losses, which uses a lifetime Defined benefit pension obligations expected loss allowance for all trade re
Slide 77: 3.8–3.10 Employee benefits, contingent consideration, provisions
77 Annual report 2019 Consolidated financial statements 3.8 Employee benefit obligations – continued 3.9 Contingent consideration – continued 2019 2018 Valiance Partner The period for the earn-out target for Valiance Partners ends 2021 and the yearly earn-out payments Assumptions used for valuation
Slide 78: 4. Capital structure and financing items
78 Annual report 2019 Consolidated financial statements 4. Capital structure and financing items 4.1 Financial income and expenses 4.2 Share capital, distribution to shareholder and earnings per share – continued DKK million 2019 2018 Earnings per share and diluted earnings per share are calculated
Slide 79: 4.3 Leases
79 Annual report 2019 Consolidated financial statements 4.3 Leases 4.3 Leases – continued Lease assets Lease liabilities Rental of IT- Lease liabilities expiring within the following periods from the balance sheet date: DKK million premises equipment Company cars 2019 2019 DKK million 2019 2018 Cost
Slide 80: 4.4 Financial assets and liabilities
80 Annual report 2019 Consolidated financial statements 4.4 Financial assets and liabilities Depending on the purpose of each asset and liability, NNIT classifies these into the following categories: • Cash and cash equivalents • Cash flow hedging instruments at fair value • Financial assets at fair
Slide 81: 4.4 Financial assets and liabilities – continued
81 Annual report 2019 Consolidated financial statements 4.4 Financial assets and liabilities – continued 4.4 Financial assets and liabilities – continued Financial liabilities Financial liabilities Bank at fair value through measured at over- Lease Contingent DKK million Profit and loss amortized co
Slide 82: 4.4 Financial assets and liabilities – continued
82 Annual report 2019 Consolidated financial statements 4.4 Financial assets and liabilities – continued 4.4 Financial assets and liabilities – continued Financial risks NNIT's objective at all times is to limit the Company's financial risks. Trade Trade Net balance Transaction 10% DKK million Recei
Slide 83: 4.4 Financial assets and liabilities – continued
83 Annual report 2019 Consolidated financial statements 4.4 Financial assets and liabilities – continued 4.4 Financial assets and liabilities – continued At December 31, 2019 NNIT A/S' hedge contracts covered the period from January 2020 to February Capital management 2021. Taking into account contr
Slide 84: 5. Other disclosures
84 Annual report 2019 Consolidated financial statements 5. Other disclosures 5.1 Long-term incentives Long-term share-based incentive program Group Management and the Vice Presidents are included in a long-term share-based incentive program. For more information regarding the long-term share-based i
Slide 85: 5.1 Long-term incentives – continued
85 Annual report 2019 Consolidated financial statements 5.1 Long-term incentives - continued Outstanding restricted stock units (in NNIT shares) At the Value at beginning Forfeiture/ launch date Vesting Number '000 of the year Issued transferred Outstanding (DKK'000) year 2019 Shares allocated to Gr
Slide 86: 5.1 Long-term incentives – continued
86 Annual report 2019 Consolidated financial statements 5.1 Long-term incentives - continued Outstanding restricted stock units (in NNIT shares) At the Value at beginning Cancelled/ launch date Vesting Number '000 of the year Issued transferred Outstanding (DKK'000) year 2018 Outstanding restricted
Slide 87: 5.2 Board and Management holdings of NNIT shares
87 Annual report 2019 Consolidated financial statements 5.2 The Board of Directors and Group Management's holdings of NNIT shares Sold/ At the Additions transferred At the Market beginning of during during end of value Number the year 1 the year the year the year (DKK'000) 2019 Carsten Dilling 2,740
Slide 88: 5.3 Fee to statutory auditors; 5.4; 5.5
88 Annual report 2019 Consolidated financial statements 5.3 Fee to statutory auditors 5.5 Statement of cash flows - specifications DKK million 2019 2018 DKK million 2019 2018 Statutory audit 2.0 1.8 Changes in working capital Audit-related services 0.2 0.3 Increase/(decrease) in current receivables
Slide 89: 5.6 Acquisition of subsidiaries
89 Annual report 2019 Consolidated financial statements 5.6 Acquisition of subsidiaries The fair value of net assets acquired and goodwill at the date of acquisition is Acquisitions during 2019 summarized below: On April 24, 2019, NNIT acquired full ownership and control of Halfmann Goetsch Partner
Slide 90: 5.7 Contingent liabilities; 5.8 Related party transactions
90 Annual report 2019 Consolidated financial statements 5.7 Contingent liabilities, other contractual obligations and legal proceedings 5.8 Related party transactions and ownership DKK million 2019 2018 Ownership NNIT A/S is controlled by Novo Holdings A/S, of which the Novo N ordisk Foundation is
Slide 91: 5.8 Related party transactions – continued; 5.9
91 Annual report 2019 Consolidated financial statements 5.8 Related party transactions and ownership – continued 5.9 Events after the balance sheet date DKK million 2019 2018 There have been no other events after the balance sheet date which would have a significant impact on an assessment of NNIT's
Slide 92: Parent company financial statements
92 Annual report 2019 Parent company financial statements Parent company financial statements
Slide 93: Income statement
93 Annual report 2019 Parent company financial statements Income statement for the year ended December 31 DKK million Note 2019 2018 Revenue 2,521 2,661 Cost of goods sold 2.1 2,218 2,237 Gross profit 303 424 Sales and marketing costs 2.1 113 108 Administrative expenses 2.1 90 85 Operating profit be
Slide 94: Balance sheet
94 Annual report 2019 Parent company financial statements Balance sheet at December 31 ASSETS EQUITY AND LIABILITIES DKK million Note 2019 2018 DKK million Note 2019 2018 Intangible assets 3.1 63 42 Share capital 250 250 Tangible assets 3.2 571 587 Retained earnings 678 668 Lease assets 4.3 247 289
Slide 95: Statement of changes in equity 2019
95 Annual report 2019 Parent company financial statements Statement of changes in equity at December 31 DKK million Reserve IT- Cash Share Treasury Retained development flow Proposed 2019 capital share earnings projects hedges dividends Total Balance at the beginning of the year 250 (5) 668 26 5 64
Slide 96: Statement of changes in equity 2018
96 Annual report 2019 Parent company financial statements Statement of changes in equity at December 31 DKK million Reserve IT- Cash Share Treasury Retained development flow Proposed 2018 capital share earnings projects hedges dividends Total Balance at the beginning of the year 250 (7) 619 18 2 56
Slide 97: Notes to the parent company financial statements
97 Annual report 2019 Parent company financial statements Notes to the parent company financial statements 1. Basis of preparation 4. Capital structure and financing items 1.1 Accounting policies 98 4.1 Financial income 102 4.2 Financial expenses 102 4.3 Leases 102 2. Results for the year 4.4 Deriva
Slide 98: 1. Basis of preparation; 2. Results for the year
98 Annual report 2019 Parent company financial statements 1. Basis of preparation 2. Results for the year 1.1 Accounting policies 2.1 Employee cost The parent company financial statements are presented in accordance with The Danish Financial DKK million 2019 2018 Statements Act (class D) and other a
Slide 99: 3.1 Intangible assets
99 Annual report 2019 Parent company financial statements 3. Operating assets and liabilities 3.1 Intangible assets IT development IT development projects under DKK million projects construction 2019 2018 Cost at the beginning of the year 85 15 100 86 Additions 6 27 33 14 Transfer 14 (14) - - Cost a
Slide 100: 3.2 Tangible assets
100 Annual report 2019 Parent company financial statements 3.2 Tangible assets Payments on account and Land and Other Leasehold assets under DKK million buildings equipment improvements construction 2019 2018 Cost at the beginning of the year 373 1,019 51 21 1,464 1,314 Adjustment (2) 2 - - - - Addi
Slide 101: 3.3 Financial assets; 3.4 Provisions
101 Annual report 2019 Parent company financial statements 3.3 Financial assets Investment in DKK million Deposits subsidiaries 2019 2018 Cost Cost at the beginning of the year 26 272 298 243 Additions - 92 92 55 Cost at the end of the year 26 364 390 298 Carrying amount at the end of the year 26 36
Slide 102: 4. Capital structure and financing items
102 Annual report 2019 Parent company financial statements 4. Capital structure and financing items 4.1 Financial income 4.3 Leases DKK million 2019 2018 Lease assets Rental of IT- Interest income from related parties 5 1 DKK million premises equipment Company cars 2019 Fair value adjustments of fin
Slide 103: 4.3 Leases – continued; 4.4 Derivative financial instruments
103 Annual report 2019 Parent company financial statements 4.3 Leases – continued Lease liabilities Lease liabilities expiring within the following periods from the balance sheet date: DKK million 2019 2018 Within 1 year 74 65 Between 1 and 5 years 194 196 After 5 years 1 47 Total lease liability, n
Slide 104: 5. Other disclosures
104 Annual report 2019 Parent company financial statements 5. Other disclosures 5.1 Fee to statutory auditors 5.2 Contingent liabilities, other contractual obligations and legal proceedings – continued DKK million 2019 2018 DKK million 2019 2018 Statutory audit 1.4 1.3 Other assurance engagements 0.
Slide 105: Headquarters and international offices
Headquarters International Design and production: MeyerBukdahl . Photography: Pernille Greve, Morten Jerichau NNIT A/S NNIT Switzerland AG NNIT (Tianjin) Valiance Partners Europe, Ltd. Oestmarken 3A St. Alban-Vorstadt 94 Technology Co. Ltd. 22, Northumberland Road DK-2860 Soeborg CH-4052 Basel 20th