Nnit A/s · OMXCOP:NNIT
Nnit A/s — Q2 2024 Earnings Presentation
31 slides from Nnit A/s's earnings presentation, Aug 27, 2024
Slide 1: Second Quarter Results 2024
Second Quarter Results 2024 August 27 2024 1
Slide 2: Agenda
Agenda Q2 2024 highlights incl. regional performance Q2 2024 group financial performance & outlook Closing remarks and Q&A FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements, which include estimates of financial performance and targets. These statements are not guarante
Slide 3: Solid strategic progress continues
Solid strategic progress continues BUSINESS IMPROVING ON KEY SIGNIFICANT WINS SUPPORTING IMPORTANT STRATEGIC PARAMETERS THE STRATEGIC CHOICES MADE MILESTONES REACHED AUG 2024 | NNIT | Q2 2024 RESULTS | INVESTOR PRESENTATION 3
Slide 4: Continued organic growth and increased profitability
Continued organic growth and increased profitability Revenue Organic growth Operating profit Operating profit margin DKKm % excl. special items, DKKm excl. special items, % 474.0 11.0% 32.0 6.7% (11.8% growth vs LY) (10.9% Q2 23) (DKK 25.0m Q2 23) (5.9% Q2 23) AUG 2024 | NNIT | Q2 2024 RESULTS | INV
Slide 5: Gaining market share whilst profitability is increasing
Region Europe Gaining market share whilst profitability is increasing Q2 2024 Financial highlights Overall highlights REVENUE DKKm 135.0 Revenue & commercial highlights (13.3% vs Q2 23) • Solid growth despite a challenging macroenvironment and temporary decline in the data ORGANIC GROWTH migration b
Slide 6: Growth materially impacted by the data migration business
Region US Growth materially impacted by the data migration business Q2 2024 Financial highlights Key highlights REVENUE DKKm 88.1 (-14.5% vs Q2 23) • Despite recovery plan being on track, the temporary decline in the data migration business ORGANIC GROWTH more than offset the growth in the two other
Slide 7: Back to growth and profitability
Region Asia Back to growth and profitability Q2 2024 Financial highlights Key highlights REVENUE DKKm 37.3 (3.3% vs Q2 23) • Early signs show that the turnaround plan is working ORGANIC GROWTH • Growth has regained on back of the organizational initiative of making the sales functions a 6.4 % part o
Slide 8: Continued strong growth leading to higher market share
Region Denmark Continued strong growth leading to higher market share Q2 2024 Financial highlights Key highlights REVENUE DKKm 213.6 (28.8% vs Q2 23) • Growth driven by the strong backlog and pipeline Region DK had coming into the year ORGANIC GROWTH • New contracts have been signed and existing eng
Slide 9: Agenda
Agenda Q2 2024 highlights incl. regional performance Q2 2024 group financial performance & outlook Closing remarks and Q&A AUG 2024 | NNIT | Q2 2024 RESULTS | INVESTOR PRESENTATION 9
Slide 10: Improved business performance leading to solid growth
Improved business performance leading to solid growth Q2 2024 Financial highlights Key highlights REVENUE DKKm 474.0 (11.8% vs Q2 23) • Market share was captured in Region Denmark and Region Europe, and growth returning in ORGANIC GROWTH Region Asia 11.0 % • Region US significantly challenged by the
Slide 11: Cash flow impacted by non-recurring payments
Cash flow impacted by non-recurring payments Key metrics Changes in working capital mainly driven by several non-recurring factors Changes in working capital NET CASH FLOW, DKKm -91 (-50m in Q2 23) -95 Breakdown of Other liabilities 10 -6 -40 -15 FREE CASH FLOW, DKKm -15 -262 -8 -44 (676m in Q2 23)
Slide 12: Full-year 2024 financial outlook confirmed
Full-year 2024 financial outlook confirmed FY 24 OUTLOOK 5 KEY LEVERS HAVE BEEN EFFECTUATED TO ACCELERATE PROFITABILITY ~10% Restructuring of Important Full effect from Completion of ORGANIC GROWTH the data migration Relocation of strategic wins in the turnaround in crucial internal business in both
Slide 13: Agenda
Agenda Q2 2024 highlights incl. regional performance Q2 2024 group financial performance & outlook Closing remarks and Q&A AUG 2024 | NNIT | Q2 2024 RESULTS | INVESTOR PRESENTATION 13
Slide 14: Closing remarks
Closing remarks GOOD STRATEGIC PERFORMANCE IS GRADUALLY FY 2024 OUTLOOK MOMENTUM IMPROVING AS PLANNED CONFIRMED AUG 2024 | NNIT | Q2 2024 RESULTS | INVESTOR PRESENTATION 14
Slide 15: Q&A
Q&A AUG 2024 | NNIT | Q2 2024 RESULTS | INVESTOR PRESENTATION 15
Slide 16: Contact information
Contact information Carsten Ringius CFO carr@nnit.com AUG 2024 | NNIT | Q2 2024 RESULTS | INVESTOR PRESENTATION 16
Slide 17: Appendix
APPENDIX AUG 2024 | NNIT | Q2 2024 RESULTS | INVESTOR PRESENTATION 17
Slide 18: The NNIT investment case
The NNIT investment case NNIT will grow its existing business utilizing its core assets alongside increasing profitability. Further opportunities to grow through M&A supported by robust balance sheet 01 | GROWTH 02 | PROFITABILITY 03 | BALANCE SHEET 04 | M&A Well-positioned in Leveraging existing Po
Slide 19: Key assumptions
Key assumptions The financial aspirations for 2026 are based on assumptions of relatively stable market conditions and supplemented by annual guidance TIME HORIZON BASELINE COST INFLATION INDUSTRY DEVELOPMENT MACROECONOMY The aspirations cover The baseline for the Able to alleviate impact Our market
Slide 20: Financial aspirations towards 2026
Financial aspirations towards 2026 ~10% ~10-13% CAGR YEARLY AVERAGE GROUP OPERATING ORGANIC REVENUE GROWTH PROFIT MARGIN BEFORE SPECIAL ITEMS AUG 2024 NNIT | Q2 2024 RESULTS | INVESTOR PRESENTATION 20
Slide 21: Opportunities for profitable growth
Opportunities for profitable growth NNIT operates in globally attractive markets with opportunities to grow within existing playing field Mid-term revenue aspiration, % >10% CAGR ASPIRATION Mid ~10% CAGR single to low double-digit Mid single-digit Mid to high single- digit 1,725 FY 23 outlook @ 15%
Slide 22: Margin expansion driven by leverage on cost base
Margin expansion driven by leverage on cost base Leveraging existing assets and reducing cost base will lead to margin expansion Mid-term Group operating profit margin excl. special items aspiration, % ASPIRATION Low single-digit Yearly average ~10-13% Low to mid Single-digit Low single-digit ~ 6% F
Slide 23: Our future state
Our future state In 2026, we are an industry leading employer and solution provider specialized in international life science and the Danish Public market Industry-leading employer A truly international A commercially savvy with strong attraction, retention company driven by strong company where eve
Slide 24: Business approach
Business approach Together with our customers and partners, we bring digital transformation to life and make a mark. We target industries where regulatory demands, high complexity and quality of life is at play Our solutions portfolio delivers a strong value proposition to specific customer needs wi
Slide 25: Focus towards 2026
Focus towards 2026 OUTGROWING THE MARKET DOMAIN FOCUS REPEATABILITY INTERNATIONAL MINDSET ACQUISITIONS We aspire to grow Building domain Continued New organization Focused M&A faster than the and tech investments in catering to approach to market i.e. take competencies in bringing new regional suppo
Slide 26: Group P&L
Group P&L NNIT A/S Quarterly performance FY performance DKKm Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 FY23 FY22 Revenue 474 463 438 453 424 1,728 1,500 Production cost 353 338 330 329 321 1,283 1,092 Gross profit 121 126 108 124 103 445 408 Gross margin 25.5% 27.1% 24.6% 27.3% 24.3% 25.8% 27.2% Regio
Slide 27: Region Europe P&L
Region Europe P&L Region Europe Quarterly performance FY performance DKKm Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 FY23 FY22 Revenue 135 126 109 125 119 465 468 Production cost 101 97 65 88 93 330 365 Gross profit 34 29 44 38 26 135 103 Gross margin 25.1% 23.1% 40.4% 30.1% 21.8% 29.0% 22.1% Regional
Slide 28: Region US P&L
Region US P&L Region US Quarterly performance FY performance DKKm Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 FY23 FY22 Revenue 88 93 91 94 103 387 312 Production cost 61 57 61 58 66 252 213 Gross profit 27 35 30 36 37 135 98 Gross margin 30.8% 38.2% 33.1% 38.5% 36.3% 34.9% 31.5% Regional overhead cost
Slide 29: Region Asia P&L
Region Asia P&L Region Asia Quarterly performance FY performance DKKm Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 FY23 FY22 Revenue 37 32 32 37 36 144 157 Production cost 27 28 31 33 35 135 134 Gross profit 11 3 2 4 1 9 23 Gross margin 28.4% 11.0% 5.5% 11.2% 2.8% 6.3% 14.7% Regional overhead cost 6 5 3
Slide 30: Region Denmark P&L
Region Denmark P&L Region DK Quarterly performance FY performance DKKm Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 FY23 FY22 Revenue 214 212 206 196 166 732 564 Production cost 164 155 174 150 127 566 369 Gross profit 49 58 32 46 39 166 195 Gross margin 23.0% 27.1% 15.5% 23.3% 23.3% 22.7% 34.6% Regional
Slide 31: | NNIT | Q2 2024 RESULTS | INVESTOR PRESENTATION
AUG 2024 | NNIT | Q2 2024 RESULTS | INVESTOR PRESENTATION 31