NNIT A/S: Solid Organic Growth Of 11%, Profitability Continued To Improve, And Important Strategic Milestones Reached

Q2 2024 key highlights

• Financial performance continued to improve during the second quarter with organic growth at 11.0% meaning NNIT is capturing market share, specifically in Denmark and Europe. Growth was seen across all regions, with the exception of Region US, which continued to be negatively impacted by the temporary decline in the data migration business, despite gradual improvements.
• Group operating profit margin excluding special items ended at 6.7%, which is an 0.8%-point increase compared with last year. The improvement in profitability was partly driven by leveraging the cost base due to the top line increase, and partly due to the tight cost control and efforts made in Region Asia during the first quarter.
• Important steps on our transformative journey continued with the new global ERP and HR systems going live, on-track completion of the IT separation of the infrastructure business, and re-location of offices in Czech Republic and China and our headquarters in Denmark.
• Confirming full-year financial outlook for organic revenue growth of around 10% and group operating profit margin excl. special items of between 8 to 9%.

In the second quarter, NNIT captured market share despite still being impacted by the macroeconomic headwind especially in Europe and China. Growth was mainly driven by NNIT continuing to expand its business within its existing customer portfolio whilst also bringing in new customers, and partly due to the timing of Easter.

During Q2 2024, NNIT delivered on several important milestones as part of the new strategic direction initiated last year. The more focused NNIT has also resulted in improved customer relationships being reflected by continued high customer satisfaction scores, and with NNIT also being recognized by Everest Group, an independent consultancy firm, in terms of highest value delivered.

NNIT expects the rest of the year to be back-end loaded in terms of revenue growth and profitability to gradually increase quarter over quarter. The backlog and pipeline are intact, leading to the full-year financial outlook being confirmed.

Pär Fors, President and CEO of NNIT, comments "We are pleased to see that our key strategic choice of becoming a pure-play IT consulting business is paying off. Significant wins in early Q3 underlines that we are on the right path. As a whole, the business continued to grow, and profitability increased whilst we continue to take important steps on the transformational journey, we initiated last year."

Financial overview - Selected key figures

NNIT A/S, DKK million	Q2 2024	Q2 2023	6M 2024	6M 2023	FY 2023
Revenue	474.0	424.1	937.4	836.8	1,728
Revenue growth, %	11.8%	15.3%	12.0%	15.6%	15.2%
Revenue growth, organic %	11.0%	10.9%	9.5%	11.5%	10.8%
Group operating profit excl. special items	32.0	25.0	55.9	45.0	116
Group operating profit margin excl. special items, %	6.7%	5.9%	6.0%	5.4%	6.7%
Special items	15.2	30.0	3.9	44.0	69
Group operating profit incl. special items	16.8	-5.0	52.0	1.0	47
Group operating profit margin incl. special items, %	3.5%	-1.2%	5.5%	0.1%	2.7%

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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.