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05.11.2024 18:00:00
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NNIT A/S: A CHALLENGING THIRD QUARTER. NECESSARY ACTIONS TAKEN TO IMPROVE PERFORMANCE IN 2024 AND LONG-TERM
Q3 2024 key highlights
- Financial performance for the third quarter was unsatisfactory. Some areas of the business did not perform as initially planned in Region US and Region Europe which negatively impacted the performance. Organic growth was negative by 1.6% and total revenue growth was negative by 1.7%. In Q3 2023, Region DK revenue was impacted by a positive technical one-off due to the carve-out of around DKK 15m as a revenue accrual was released in the quarter despite being related to previous quarters. Adjusted for this, the underlying organic growth for the Group would have been 1.7% and total growth of 1.6%
- Group operating profit margin excl. special items was 3.9% for the quarter. The unfavorable development in the profit margin was due to lower topline performance and as a consequence of NNIT having too much capacity
- To improve business performance, necessary actions were taken to reduce capacity in the relevant areas in Region Europe and Region US on top of the initiatives carried out in the first half of the year
- Full-year financial outlook was adjusted on 22 Oct 2024 cf. company announcement 7. The adjusted full-year outlook is an organic growth around 6 to 7% (previously around 10%) and group operating profit margin excl. special items between 6 to 7% (previously between 8 to 9%)
The third quarter was more challenging than anticipated. Despite positive momentum in the first half of the year, including several levers initiated in Q2 to accelerate profitability, organic growth and group operating profit margin excl. special items decreased in Q3 2024 compared with last year. A moderate slowdown in the Life Science market caused projects to be postponed or paused and resulted in lower growth than anticipated for Region US and Region Europe. In addition, recovery in the data migration business progressed at a slower pace than anticipated.
Although the performance in the third quarter was unsatisfactory, a pick-up in growth and profitability is expected in Q4 driven by a high backlog coverage, the effects of the profitability levers initiated in the second and third quarter, improvement in utilization of billable employees, and additional adjustments made to align internal capacity with market demand carried out in the beginning of Q4.
Financial overview - Selected key figures
| NNIT GROUP, DKK million | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 | FY 2023 |
| Revenue | 444.7 | 452.6 | 1,382.1 | 1,289 | 1,728 |
| Revenue growth, % | -1.7% | 19.1% | 7.2% | 16.8% | 15.2% |
| Revenue growth, organic % | -1.6% | 11.1% | 5.6% | 11.3% | 10.8% |
| Group operating profit excl. special items | 17.5 | 26.5 | 73.4 | 72 | 116 |
| Group operating profit margin excl. special items, % | 3.9% | 5.8% | 5.3% | 5.6% | 6.7% |
| Special items | 9.4 | 16.0 | 13.3 | 61.0 | 69 |
| Group operating profit incl. special items | 8.1 | 10.5 | 60.1 | 11 | 47 |
| Group operating profit margin incl. special items, % | 1.8% | 2.3% | 4.3% | 0.8% | 2.7% |
CONFERENCE CALL
November 6, 2024, at 9:30 AM CET:
Dial in information:
DK: +45 7876 8490
SE: +46 8 1241 0952
UK: +44 203 769 6819
US: +1 646-787-0157
Participant Access code: 472855
CONTACT
For more information, please contact:
Investor Relations
Carsten Ringius
EVP & CFO
Tel: +45 3077 8888
carr@nnit.com
Media Relations
Tina Joanne Hindsbo
Media Relations Manager
Tel: +45 3077 9578
tnjh@nnit.com
ABOUT NNIT
NNIT is a leading provider of IT solutions to life sciences internationally, and to the public and private sectors in Denmark.
We focus on high complexity industries and thrive in environments where regulatory demands and complexity are high.
We advise on and build sustainable digital solutions that work for the patients, citizens, employees, end users or customers.
We strive to build unmatched excellence in the industries we serve, and we use our domain expertise to represent a business first approach – strongly supported by a selection of partner technologies, but always driven by business needs rather than technology.
NNIT consists of group company NNIT A/S and subsidiaries SCALES, Excellis Health Solutions and SL Controls. Together, these companies employ more than 1,700 people in Europe, Asia, and USA. Read more at www.nnit.com.
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