NNIT delivers organic revenue growth of 2.1% and an operating profit margin of 7.9% in the first nine months of 2017.
Performance highlights for the first nine months of 2017
- Revenue increased by 4.2% in reported currencies being impacted by a one-off revenue reversal of DKK 33m regarding a settlement with a customer in the public customer group, see company announcement 8/2017
- Excluding this one-off reversal, revenue increased by 5.9%, hereof 3.7% organic, to DKK 2,113m. Revenue increased by 13% from customers outside the Novo Nordisk Group while revenue from the Novo Nordisk Group decreased by 3.0%
- Operating profit margin was 7.9% in reported currencies compared to 9.8% in 9M 2016. Excluding the one-off revenue reversal operating profit margin was 9.3%
- Net profit decreased by 9.3% to DKK 130m due to the one-off revenue reversal. Excluding the revenue reversal net profit increased by 8.6% to DKK 156m
- Underlying free cash flow for 9M 2017 improved by DKK 37m to DKK 155m compared to 9M 2016. Including the acquisition of SCALES and investment in a new data center the free cash flow was DKK -78m in 9M 2017. The one-off revenue reversal did not impact the free cash flow in 9M 2017
- Order backlog for 2017 at the beginning of Q4 2017 was DKK 2,750m, an increase of 3.3% compared to the same time last year. The negative impact of the one-off revenue reversal was 1.2pp
- Outlook for 2017 is maintained compared to company announcement 8/2017:
- Revenue growth of 4-6% in constant currencies with expected organic revenue growth of 1-3%. The settlement has a one-off negative impact of around 1.2pp
- Expected operating profit margin of around 9% in constant currencies. The settlement has a one-off negative impact of around 1.0pp
- The expected level of investments in 2017 is maintained at 15-17% with an expected organic investment level of 12-14% of total revenue as the majority of investments related to an additional data center will impact 2017
- NNIT believes the long-term target of growing revenue by at least 5% is still achievable. However, continued low visibility in terms of sales of services to Novo Nordisk for 2018 makes it uncertain at this point of time whether NNIT will be able to meet this long-term target in 2018
Per Kogut, CEO at NNIT says about the financial statement: "Generating 2% organic growth and an operating profit margin of 7.9% in the first nine months of the year due to a DKK 33m revenue reversal in a settlement of a three-year old arbitration with a client is not satisfactory. The settlement has a one-off impact and we can now continue our strategic journey. It is thus comforting to see several recent contract wins and promising growth within the international life sciences customer group, however we have hard work in front of us."
Conference call details
NNIT will host a teleconference October 26, 2017 at 10:30 CET about the financial report for Q3 2017. Please visit the NNIT webpage at www.nnit.com to access the teleconference, which can be found under ‘Investors – Events & presentations’. Presentation material will be available on the website approximately one hour prior to the start of the presentation.
Contacts for further information
Jesper Vesterbæk Wagener
Head of Investor Relations
Phone: +45 3075 5392
Phone: +45 3077 8141