Slide 1: NNIT Interim report Q1 2015 Roadshow presentation
NNIT Interim report Q1 2015 Roadshow presentation
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 Q1 2015 Sales and backlog Financial performance Outlook for 2015 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 2015 at a glance
Q1 2015 at a glance Constant currencies vs. Q1 2014 Revenue DKK 609.6m +10.4% Operating profits DKK 70.9m +24.5% Operating profit margin 11.6% +1.3pp Net profits DKK 60.7m +37.0% Order backlog DKK 2,138m +8.0% Free cash flow DKK 35m +DKK 46m Currency impact revenue and profits Revenue growth 11.5%,
Slide 6: Market update – life sciences trends
Market update – life sciences trends Continued trend of client cost focus • Driving AO & IO Outsourcing • Cost reduction focus at Tier 1 pharma Identification of Medicinal Products (IDMP) • Deadline for submitting IDMP data is still July 1, 2016 in EU • No changes to overall IDMP data scope • The LS
Slide 7: Market update – technology trends
Market update – technology trends SAP pushes new Hana technology • NNIT is a leading vendor in the Danish market with currently 4 running installations Hybrid cloud is the preferred way to utilize the cloud opportunities • NNIT is launching a hybrid cloud solution to orchestrate workloads across NNI
Slide 8: Backlog development
Backlog development Backlog for 2015 increased 8.0% y-o-y to DKK 2,138m driven by: • New contracts in public and life sciences segments • Extension and expansion of infrastructure and support agreements with Novo Nordisk • Extension and expansion of infrastructure and support agreements in finance s
Slide 9: Investments
Investments • Investments level in Q1 2015 was DKK 56.5m which is DKK 20.7m higher than Q1 2014 • Hardware investments on outsourcing agreements with major clients • NNIT is still investigating whether to build a second datacenter or to rent additional external capacity 9
Slide 10: Currency development
Currency development avg Q1 ’15 rate vs. +23% +21% +25% +x% avg Q1 ’14 rate +15% -0% -1% +21% 10
Slide 11: Hedging and currency impact
Hedging and currency impact Note PHP is proxy hedged in USD Pct/pp Pct/pp Q1 2015 Q1 2015 Q1 2014 DKK million Change Change (reported) (constant*) (Avg 14*) (reported) (constant) Revenue 615.3 609.6 552.0 11.5% 10.4% Revenue impact Cost of goods sold 494.5 482.4 443.0 11.6% 8.9% Gross profit 120.8 1
Slide 12: Financial statement
Financial statement Pct/pp Pct/pp Q1 2015 Q1 2015 Q1 2014 DKK million Change Change (reported) (constant*) (Avg 14*) (reported) (constant) Revenue 615.3 609.6 552.0 11.5% 10.4% Cost of goods sold 494.5 482.4 443.0 11.6% 8.9% Gross profit 120.8 127.2 109.0 10.8% 16.7% Gross profit margin 19.6% 20.9%
Slide 13: Segment development
Segment development Q1 2015 Q1 2015 Q1 2014 Pct Change Pct Change DKKm (reported) (constant*) (Avg 14*) (reported) (constant) Life Sciences 378.2 372.4 360.5 4.9% 3.3% Hereof Novo Nordisk Group 296.6 291.9 297.0 -0.1% -1.7% Hereof other Life Sciences 81.6 80.5 63.5 28.4% 26.7% Public 101.1 101.1 55.
Slide 14: IT Operations
IT Operations Pct/pp Pct/pp Q1 2015 Q1 2015 Q1 2014 Change Change (reported) (constant*) (Avg 14*) (reported) (constant) DKK million Revenue Novo Nordisk Group 196.6 192.9 205.4 -4.3% -6.1% Non-Novo Nordisk Group 210.9 210.8 190.7 10.6% 10.6% Total 407.6 403.7 396.1 2.9% 1.9% Costs 367.3 357.6 341.3
Slide 15: IT Solutions
IT Solutions Pct/pp Pct/pp Q1 2015 Q1 2015 Q1 2014 Change Change (reported) (constant*) (Avg 14*) (reported) (constant) DKK million Revenue Novo Nordisk Group 100.0 99.0 91.6 9.1% 8.1% Non-Novo Nordisk Group 107.8 106.8 64.3 67.6% 66.1% Total 207.8 205.9 155.9 33.2% 32.0% Costs 184.7 181.1 153.8 20.
Slide 16: Costs
Costs Total costs DKK 552m (11.5%) Currency headwinds influence costs of NNIT’s offshore delivery centers • Q1 2015 impact DKK 13m In constant currencies costs increased 8.8% • IPO launch program • Expanded office facilities • Strengthened international life sciences sale force Administration costs
Slide 17: Employee development
Employee development Number of employees grew by 12% to 2,443 FTE by the end of Q1 2015 Largest growth came in low cost countries • Increase of 181 FTE (27.1%) compared to Q1 2014 Number of employees in Denmark grew 87 FTE (5.9%) Share of employees in low cost countries grew from 31% in Q1 2014 to 3
Slide 18: Net Financials
Net Financials Net financials 31 Mar DKKm 2015 Net financials is DKK 10.2m primarily due to: Gains on Novo Nordisk shares 6.6 • Gains on Novo Nordisk shares held for long-term Dividends received from Novo Nordisk shares 0.7 incentive program for management of DKK 6.6m Total Novo Nordisk share relate
Slide 19: Balance sheet
Balance sheet Assets 31 Mar 31 Mar Equity and liabilities 31 Mar 31 Mar DKKm 2015 2014 DKKm 2015 2014 Intangible assets 33.5 41.3 Share capital 250.0 1.0 Tangible assets 426.0 373.8 Other reserves 15.6 2.4 Deferred tax 24.1 4.1 Retained earnings 407.3 665.9 Other financial assets 28.3 24.3 Treasury
Slide 20: Cash flows
Cash flows Net cash flows are negative due to payment of dividends and purchase of treasury shares of DKK 178m. Cash flow from operating activities improved DKK 63m due to higher profit for the period and improvement in working capital. Cash flow from investing activities was DKK 17m lower due to hi
Slide 21: Outlook
Outlook Current guidance Previous guidance Revenue 5-8% at constant currencies 5-8% at constant currencies growth Around 0.8pp higher as reported Around 0.6pp higher as reported Operating Around 11% at constant currencies Around 11% at constant currencies margin Around 1.4pp lower as reported Around
Slide 22: Closing remarks
Closing remarks • Solid revenue growth in Q1 2015 • Solid backlog supporting year-end targets • Maintain year-end expectations in constant currencies • Currency headwinds impacts offshore delivery center cost base • Outlook in reported currencies impacted by strong CNY and USD 22
Slide 23: Investor contact information
Investor contact information Upcoming events 21 August 2015: Interim report for first six months of 2015 17 November 2015: Interim report for first nine months of 2015 Investor contact NNIT A/S Østmarken 3A 2860 Søborg Denmark Jesper Wagener +45 3075 5392 jvwa@nnit.com 23