Slide 1: First six months 2020
First six months 2020 August 13, 2020
Slide 2: The NNIT Presenting Team
The NNIT Presenting Team PER OVE KOGUT PERNILLE FABRICIUS CARSTEN KROGSGAARD JENS BINGER THOMSEN Chief Executive Officer Chief Financial Officer Former Chief Financial Officer Head of Investor Relations 2
Slide 3: Agenda
Agenda 01 COVID-19 & highlights for the first six month of 2020 02 Financial performance and cost restructuring plan 03 Balance sheet and cash flow 04 Outlook for 2020 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: COVID-19 and NNIT
COVID-19 and NNIT • Stable IT operations for NNIT’s customers globally despite local lockdowns and continued uncertainty • NNIT has handled the COVID-19 situation since February 2020. NNIT has a robust global delivery model and is prepared if a second wave should hit • NNIT follows health procedures
Slide 6: Q2 2020 at a glance
Q2 2020 at a glance Revenue Operating profit* Operating profit margin* DKK 701m DKK 38m 5.4% -5.7% -14% -0.5pp +0.2pp F/X +1.4pp F/X +0.1pp F/X Net profit Free cash flow DKK 14m DKK 194m -60% DKK +233m *Before special items 6
Slide 7: First six month 2020 at a glance
First six month 2020 at a glance Revenue Operating profit* Operating profit margin* DKK 1,423m DKK 85m 6.0% -4.7% -5.1% +0.0pp +0.2pp F/X -0.6pp F/X 0.0pp F/X Net profit Free cash flow DKK 49m DKK 177m -34% DKK +244m *Before special items 7
Slide 8: Major wins
Major wins Am ount Lengt h Cont ract Segm ent Client (DKK m illion) (years) Operat ions of t he Danish Defence’s IT-infrast ruct ure Public Danish Defence Low t riple-digit 7+3 and SAP basis Framework agreement relat ed t o SAP applicat ion Framework Public Danish Defence 5+2 maint enance and develo
Slide 9: Financial statement Q2 and 6M 2020
Financial statement Q2 and 6M 2020 • Revenue decreased by 5.7% in Q2 2020 DKK m illion Q2 2020 Q2 2019 Change 6M 2020 6M 2019 Change compared to Q2 2019 due to a 26% decline in Revenue 700.9 743.7 -5.7% 1,423.0 1,493.7 -4.7% business from Novo Nordisk Group and a 10% Cost of goods sold 608.1 643.7 -
Slide 10: Status on implementation of cost restructuring plan
Status on implementation of cost restructuring plan Cost reductions Accumulated cost reductions DKKm Description of main initiatives Progress Q2 2020 achieved in 2019 2020 2021 Project utilization impacted by - Increase billable utilization by 4pp Utilization 10 55 75 COVID-19 with an effect of - In
Slide 11: Life Sciences
• Total life sciences revenue decreased by Life Sciences 8.3% in Q2 2020 compared to the same period last year due to a 26% decline in business from the Novo Nordisk Group • Life Science international and life sciences Denmark both showed strong growth of DKKm Q2 2020 Q2 2019 Change 6M 2020 6M 2019
Slide 12: Private & Public
Private & Public • Revenue from Private & Public customers decreased by 3.1% in Q2 2020 compared to the same period last DKKm Q2 2020 Q2 2019 Change 6M 2020 6M 2019 Change year Ent erprise 169.7 189.5 -10.4% 376.2 387.8 -3.0% Public 107.4 96.0 11.9% 212.5 185.5 14.6% • Revenue on projects in the Pri
Slide 13: Currency development and hedging
Currency development and hedging Estimated annual impact on NNIT’s operating profit of a 10% increase Hedging period in the outlined currencies against DKK* (months) EUR DKK 28 million - CNY DKK -16 million 14 CZK DKK -10 million 14 PHP DKK -7 million 14 USD DKK 5 million - CHF DKK -1 million - 13
Slide 14: Net Financials
Net Financials • Net financials in Q2 2020 were negative N et financials Q2 2020 Q2 2019 Change 6M 2020 6M 2019 Change with DKK 6.1m, which is a decrease of DKKm DKK 5.3m compared to Q2 2019 Currency hedge gains 2 5 -2 8 11 -4 Currency gains (losses) -5 -2 -3 -1 1 -1 Tot al currency relat ed it em s
Slide 15: Employee development
Employee development • As a consequence of the cost restructuring program and the loss of business with the Novo Nordisk Group and Pandora, the number of employees decreased by 204 FTEs corresponding to -6.2% compared to the same time last year • The decrease was driven by China (-123 FTEs), Denmark
Slide 16: Balance sheet
Balance sheet Equity and liabilities DKK million June 30, 2020 June 30, 2019 Dec 31, 2019 Assets Note June 30, 2020 June 30, 2019 Dec 31, 2019 Share capital 250 250 250 DKK million Treasury shares -3 -4 -4 Retained earnings 877 788 860 Intangible assets 527 516 524 Other reserves 3 14 14 Tangible as
Slide 17: Cash flows
Cash flows DKK million Q2 2020 Q2 2019 6M 2020 6M 2019 12M 2019 Net profit for the period 14 34 49 75 183 • The free cash flow for Q2 2020 was positive Reversal of non-cash items 94 85 204 167 439 DKK 194m, which was DKK 233m above Q2 Interest received 0 0 0 0 0 Interest paid -5 -4 -8 -7 -16 2019. T
Slide 18: Interim dividends
Interim dividends • Due to the underlying cash flow generation and strong financial position of NNIT, the Board of DKKm 2016 2017 2018 2019 Interim 2020 Directors has decided to pay an interim dividend Dividends 102 105 113 98 49 for 2020 of DKK 2.00 per share corresponding to Dividend per share 4.0
Slide 19: Backlog development, current year
Backlog development, current year Beginning of quarter • At the beginning of Q3 2020, NNIT’s order entry backlog for 2020 amounted to DKK 2,507 million, which was a decrease of 8.1% compared to last year • The backlog from life sciences clients, excluding the Novo Nordisk Group, increased by 20% dri
Slide 20: Outlook
Outlook • The financial performance for the first six months was in line with expectations despite COVID-19 and 2020 declining revenue from the Novo Nordisk Group and Pandora Constant currencies: -4% to -8% Revenue • COVID-19 was seen to mainly impact NNIT’s project growth Around 0.2pp higher busine
Slide 21: Closing remarks
Closing remarks • NNIT’s financial performance for the first six months of 2020 was in line with our expectations despite the COVID-19 situation • Continued solid growth in life sciences international and life sciences Denmark • Continued order intake of important contracts globally • The guidance f
Slide 22: Investor contact information
Investor contact information Upcoming events Investor contact August 17, 2020 • Interim dividend ex dividend date August 18, 2020 • Interim dividend record date August 19, 2020 • Interim dividend payment date Jens Binger October 29, 2020: Head of Investor Relations • Interim report for the first nin