Company announcement 21/2023, August 31, 2023
1 of 17 NNIT A/S Østmarken 3A Telephone: +45 7024 4242
Financial report for Q2 and 6M of 2023
NNIT completed the transformative divestment of its infrastructure operations to become
a highly specialized IT services provider and generated growth and improved earnings
entailing an upgrade of the 2023 outlook on August 26.
Financial highlights
• Group revenue increased by 15% to DKK 424 million in Q2 and by 16% to DKK 837
million for 6M 2023.
• The operating profit before special items increased to DKK 25 million for Q2 from
DKK -18 million in Q2 2022 and increased to DKK 45 million for 6M 2023 from DKK
-34 million for 6M 2022. The increase is driven by improved business performance,
better utilization and lower costs. As a result, the operating profit margin before
special items increased to 5.9% for Q2 2023 from -4.8% in Q2 2022 and to 5.4% for
6M 2023 from -4.7% for 6M 2022.
• Special items amounted to DKK 30 million for Q2 and DKK 44 million for 6M 2023
mainly related to the change in accounting treatment of earn-outs following a
decision by the Danish Business Authority. The decision has been appealed by NNIT.
Business highlights
• NNIT continued to organically grow its current business by expanding its engagement
with several clients and growing through group companies such as SCALES and
Excellis Health Solutions.
• To support strategy execution, focusing on the life science industry internationally
and on the public sector in Denmark, NNIT introduced a new regional organizational
structure aiming to increase customer proximity and enhance global coordination
across regions. The Group’s financial reporting format was subsequently changed to
reflect the new organizational structure, cf. company announcement no. 20/2023
released on August 30, 2023.
Outlook
• NNIT upgraded its full-year outlook for 2023 on August 26, cf. company
announcement no. 19/2023. Revenue growth is expected to be around 15%
(previously around 10%) with an operating profit margin before special items of
around 6% (previously around 5%).
• Special items are still expected up to DKK 70 million in 2023 relating to earn out
payments connected to acquisitions and restructuring costs to right-size the
organization after completion of the divestment of the infrastructure operations.
Pär Fors, CEO of NNIT, comments: “Having launched our new strategy to become a highly
specialized IT services provider, after the successful divestment of our infrastructure
business, we saw further positive results in Q2, supporting our choice of direction for the
future. NNIT delivered strong performance and organic growth based on solid business
performance, improved utilization, and adjusted costs, which led to an upgrade of our
2023 outlook on August 26."
Conference call
On August 31, 2023, at 14:00 CEST, NNIT hosts a teleconference, which can be accessed
here or at www.nnit.com under ‘Investors – Events & Presentations’.
Contacts for further information
Carsten Ringius, Tina Joanne Hindsbo,
EVP & CFO Media Relations Manager
Tel: +45 3077 8888 Tel: +45 3077 9578
carr@nnit.com tnjh@nnit.com
Company announcement 21/2023, August 31, 2023
2 of 17 NNIT A/S Østmarken 3A Telephone: +45 7024 4242
2860 Søborg www.nnit.com
Denmark CVR No: 21 09 31 06
Business performance
In Q2, NNIT generated 15% revenue growth (11% organic) compared to Q2 2022 coming
from region US and Denmark.
The operating profit margin before special items increased to 5.9% in Q2 2023 from
-4.8% in Q2 2022 driven by a high revenue growth and utilization level combined with
cost reductions.
For 6M 2023, NNIT generated a 16% increase in revenue to DKK 837 million (12%
organic). Operating profit margin before special items increased to 5.4% from -4.7%.
Region Denmark
Region Denmark (excluding life sciences customers in Denmark served by Region Europe)
generated revenue of DKK 166 million in Q2, corresponding to a growth of 22%. Progress
was primarily driven by a contract with the Danish National Bank awarded in late Q2 2022
and projects related to The Association of Danish Pharmacies, Aura Energy and Norlys.
SCALES Group delivered continued strong growth in Q2 and contributed strongly to Group
performance with around 30% organic growth, also adding a new contract with 3shape.
On June 29, the Danish Agency for Higher Education and Science unexpectedly withdrew
from the development project of a new Student Grants & Loans system after the
clarification phase. NNIT is well positioned for the expected retender later in 2023.
NNIT was awarded solid expansions of engagements on Danish National Bank, ATP,
Norlys and HusCompagniet during Q2. As a result of strong performance, NNIT was
furthermore awarded with two ‘Microsoft Partner of the year’ awards in the categories
‘Low Code’ and ‘Life Sciences & Healthcare’.
Region Denmark improved group operating profit by DKK 17 million on the back of higher
revenue and improved capacity utilization.
DKK million
Q2 2023 Q2 2022 6M 2023 6M 2022 FY 2022
Financial performance
Revenue
Region Denmark 166 136 329 277 564
Region Europe 119 119 232 231 468
Region US 103 76 202 147 312
Region Asia 36 37 74 69 157
Total revenue 424 368 837 724 1,500
Production cost 307 274 602 534 1,080
Gross profit 117 94 235 190 420
Gross margin 27.6% 25.6% 28.1% 26.3% 28.0%
Operating profit (EBIT) before special items 25 -18 45 -34 -7
Operating profit margin before special items 5.9% -4.8% 5.4% -4.7% -0.5%
Special items
30 57 44 104 278
Operating profit (EBIT) incl. special items
-5 -75 1 -138 -285
Region DK, DKK million Q2 2023 Q2 2022 6M 2023 6M 2022 FY 22
Revenue 166 136 329
277 564
Production cost 118 97 226
191 368
Gross profit 48 39 103
86 195
Gross margin 29.1% 28.9% 31.3%
31.0% 34.7%
Regional operating profit 37 26 81
59 138
Regional operating profit margin 22.2%
19.2%
24.5%
21.2% 24.5%
Group operating profit 18 1 40
10 49
Group operating profit margin 10.9%
0.8%
12.2%
3.4% 8.7%
Company announcement 21/2023, August 31, 2023
3 of 17 NNIT A/S Østmarken 3A Telephone: +45 7024 4242
2860 Søborg www.nnit.com
Denmark CVR No: 21 09 31 06
Region Europe
The region’s revenue (including life sciences customers in Denmark) was flat in Q2 2023
as we several customers were reluctant to invest due to the challenging macroeconomic
environment. The current trajectory on performance following the divestment is positive
though into the second half of the year.
During the second quarter, the region secured extensions and expansions of several long-
term customer engagements with our international life science customers in Region
Europe, including extension of significant Veeva engagements – e.g. the Boehringer
Ingelheim Veeva Quality program – and continuous growth within our Manufacturing
Solutions.
Region Europe’s Group operating profit improved in Q2 2023 with DKK 6 million compared
to Q2 2022.
Region US
During the second quarter, Region US continued its strong performance delivering 36%
revenue growth. The performance was driven by extension of contracts, expansion of
engagements with existing clients and adding several new logos to the business.
Excellis Health Solutions and Valiance also contributed very positively to the growth,
underlining NNIT’s ability to successfully integrate acquired companies.
The Group operating profit increased by DKK 23 million from Q2 2022 to Q2 2023. The
improvement in profitability of 15%-pt. to a Group operating profit margin of 13.6% was
driven by the increase in the utilization rate and maintaining costs at the same level as
in the same quarter last year.
Region Europe, DKK million Q2 2023 Q2 2022 6M 2023 6M 2022 FY 22
Revenue 119 119 232
231 468
Production cost 91 90 174
173 365
Gross profit 28 29 57
57 103
Gross margin 23.7% 24.4% 24.8%
24.8% 22.1%
Regional operating profit 14 15 31
26 40
Regional operating profit margin 11.9%
12.3%
13.5%
11.2% 8.6%
Group operating profit 0 -6 -1
-15 -33
Group operating profit margin 0.0%
-5.2%
-0.2%
-6.5% -7.1%
Region US, DKK million Q2 2023 Q2 2022 6M 2023 6M 2022 FY 2022
Revenue 103 76 202
147 312
Cost of goods sold 64 56 130
107 213
Gross profit 39 20 72
40 98
Gross margin 38.2% 26.7% 35.4%
27.3% 31.5%
Regional operating profit 25 5 44
11 40
Regional operating profit margin 24.4%
7.0%
21.7%
7.5% 12.9%
Group operating profit 14 -9 20
-16 -9
Group operating profit margin 13.6%
-11.2%
9.9%
-11.0% -2.9%
Company announcement 21/2023, August 31, 2023
4 of 17 NNIT A/S Østmarken 3A Telephone: +45 7024 4242
2860 Søborg www.nnit.com
Denmark CVR No: 21 09 31 06
Region Asia
The performance in Region Asia reflects the ongoing transformation of the business. The
decline in revenue of 2% is not satisfactory but in line with internal expectations.
The region expanded its engagement with existing clients in China, but it was not enough
to offset the decline in revenue. This is a result of a slow recovery in the Chinese economy
meaning new clients holding back on the usage of external support for IT-related projects.
Singapore, which is approximately 20% of the Asia revenue, saw improved performance
during the quarter partly driven by new engagements, and partly driven by expansion of
existing engagement with larger clients.
The Group operating profit decreased from DKK -4 million in Q2 2022 to DKK -7 million
in Q2 2023.
Due to high uncertainty of the macroeconomy in China, NNIT has chosen to take
mitigating actions by reducing cost, optimize utilization and reassessing the pipeline.
Specifically, the labor force will be adjusted to a level matching the current backlog which
will have positive implications on the profitability in Q4 this year.
Region Asia, DKK million Q2 2023 Q2 2022 6M 2023 6M 2022 FY 22
Revenue 36 37 74
69 157
Production cost 35 32 71
63 134
Gross profit 1 5 3
7 23
Gross margin 3.6% 14.6% 3.9%
9.9% 14.7%
Regional operating profit -2 3 -4
2 11
Regional operating profit margin -6.5%
7.6%
-4.8%
2.2% 7.1%
Group operating profit -7 -4 -14
-12 -14
Group operating profit margin -19.9%
-11.2%
-19.6%
-17.5% -8.7%
Company announcement 21/2023, August 31, 2023
5 of 17 NNIT A/S Østmarken 3A Telephone: +45 7024 4242
2860 Søborg www.nnit.com
Denmark CVR No: 21 09 31 06
Group financial review
Financial key figures and highlights
DKK million
6M 2023 6M 2022 FY 2022
Financial performance
Revenue
Region Denmark 329 277 564
Region Europe 232 231 468
Region US 202 147 312
Region Asia 74 69 157
Total revenue 837 724 1,500
Production cost 602 534 1,080
Gross profit 235 190 420
Gross margin 28.1% 26.3% 28.0%
EBITDA before special items 65 7 57
Depreciations, amortizations and impairment 20 41 64
Group operating profit before special items
1
45 -34 -7
Special items, costs
1
44 104 278
EBITDA incl. special items 21 -97 -221
Operating profit/loss (EBIT) 1 -138 -285
Net financials -34 -3 -9
Net profit/loss from continuing operations -33 -116 -258
Net profit/loss from discontinued operations 129 19 56
Total net profit/loss for the period 96 -97 -202
Investments in tangible assets -7 0 0
-4 -78 -78
Total assets 2,004 2,630 2,755
Equity 897 933 814
Dividends paid 0 0 0
Interest-bearing debt, net
2
-90 -730 -805
Free cash flow from continuing operations -201 -216 -292
Total free cash flow for the period 676 -256 -303
Earnings per share
Earnings per share (DKK) -1.31 -4.67 -10.39
Diluted earnings per share (DKK) -1.31 -4.67 -10.39
Employees
Average number of full-time employees, continuing 1,763 1,820 1,809
Financial ratios
Revenue growth 15.6% n/a n/a
Organic growth 11.5% n/a n/a
Gross margin 28.1% 26.3% 28.0%
EBITDA margin before special items 7.8% 1.0% 3.8%
EBITDA margin incl. special items 2.5% -13.4% -14.7%
Group operating profit margin before special items 5.4% -4.7% -0.5%
Group operating profit margin 0.1% -19.0% -19.0%
Effective tax rate 1.3% 17.8% 12.2%
Investments/Revenue -1.3% -10.8% -5.2%
Return on equity
3
-1.0% -11.2% -24.8%
Solvency ratio 44.8% 35.5% 29.5%
Return on invested capital (ROIC)
3,4
-1.0% -6.3% -12.5%
3) Financial metrics are moving annual total cost (MAT) relative to ultimo balance
Investments in intangible assets incl. acquisition of
subsidiaries
2) Net interest bearing debt defined as Cash and cash equivalents, Derivative financial instruments, Bank overdraft, leasing
Liabilities
4) Net profit (MAT) / ultimo invested capital
1) Special items comprise costs that cannot be attributed directly to NNIT's ordinary activities and are non-recurring of nature
Company announcement 21/2023, August 31, 2023
6 of 17 NNIT A/S Østmarken 3A Telephone: +45 7024 4242
2860 Søborg www.nnit.com
Denmark CVR No: 21 09 31 06
P&L
Total revenue increased by 15% to DKK 424 million in Q2 and by 16% to DKK 837 million
for 6M 2023. For Q2, production cost increased by 12% to DKK 307 million. In 6M 2023,
production cost increased by 13% to DKK 602 million.
Operating profit before special items increased to DKK 25 million for Q2 from DKK -18
million in Q2 2022 and increased to DKK 45 million for 6M 2023 from DKK -34 million for
6M 2022. The operating profit margin before special items increased to 5.9% for Q2 2023
from -4.8% in Q2 2022 and to 5.4% for 6M 2023 from -4.7% for 6M 2022.
Net financials were negative with DKK -34 for 6M 2023 compared with negative net
financials of DKK -3 million for 6M 2022.
The net result was a loss of DKK -33 for 6M 2023 for the continuing operations compared
with a loss of DKK -116 million for 6M 2022.
Balance sheet
Total assets decreased to DKK 2,004 million on June 30, 2023, from DKK 2,630 million
on June 30, 2022. The decrease was driven by the divestment of the infrastructure
business. The increase in non-current other receivables is caused by a vendor loan note
of DKK 200 million received as part of the purchase price from the divestment. The high
level of current trade receivables on June 30, 2023, is caused by trade receivables
generated prior to closing of the divestment from customers in the divested business,
remaining for collection with NNIT.
The change in non-current credit facilities is due to the repayment of a revolving credit
facility. The credit facilities under current liabilities have increased as an interim credit
facility is in place until a new long-term credit facility is established.
Free cash flow
The Group’s free cash flow for 6M 2023 was DKK 676 million, compared to DKK -256
million for 6M 2022. The free cash flow has been allocated to repayment of the revolving
credit facility and factoring agreements.
Gain on discontinued operations
In the interim report, the result of the business classified within discontinued operations
is a profit of DKK 129 million. Profits from discontinued operations include gain on sale of
discontinued operations after tax of DKK 138 million. Carveout and separation costs
related to the divestment of DKK 81 million are recognized in special items under
discontinued operations.
Events after balance sheet date
The outlook for 2023 was upgraded on August 26. There have been no other events
after the balance sheet date that would have a significant impact on an assessment of
NNIT’s financial position as of June 30, 2023.
Outlook
On August 26, 2023, NNIT upgraded its financial outlook for the full-year 2023. Following
improved business performance in Q2 and H1 2023, NNIT expects to generate revenue
growth of around 15% and an operating profit margin before special items of around 6%
Company announcement 21/2023, August 31, 2023
7 of 17 NNIT A/S Østmarken 3A Telephone: +45 7024 4242
2860 Søborg www.nnit.com
Denmark CVR No: 21 09 31 06
in 2023 against the previous expectations for revenue growth around 10% and an
operating profit margin before special items of around 5%.
Special items are still expected to amount to up to DKK 70 million in 2023 primarily
relating to earn out payments connected to acquisitions following a decision by the Danish
Business Authority concerning accounting treatment, which has been appealed by NNIT.
Guidance
2023 outlook
(26 August)
Previous 2023
outlook
2022
Revenue growth
Around 15%
Around 10%
9.6*%
Operating profit margin bf.
special items
Around 6%
Around 5%
-0.5%
Special items
Up to DKK 70
million
Up to DKK 70 million
DKK 278
million
*Organic growth of -1%.
The 2023 outlook is based on several key assumptions, including that the divestment
separation activities continues to progress as planned and that current market
performance continues and do not deteriorate further.
Forward-looking statements
This announcement 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 meaning in connection with any discussion of future operating or financial
performance identify forward-looking statements. Statements regarding the future are
subject to risks and uncertainties that may result in considerable deviations from the
outlook set forth. Furthermore, some of these expectations are based on assumptions
regarding future events which may prove incorrect.
Please also refer to the overview of risk factors in the ‘risk management’ section on page
27-28 of the Annual Report 2022.
Company announcement 21/2023, August 31, 2023
8 of 17 NNIT A/S Østmarken 3A Telephone: +45 7024 4242
2860 Søborg www.nnit.com
Denmark CVR No: 21 09 31 06
Executive Management
Board of Directors
Company announcement 21/2023, August 31, 2023
9 of 17 NNIT A/S Østmarken 3A Telephone: +45 7024 4242
2860 Søborg www.nnit.com
Denmark CVR No: 21 09 31 06
Consolidated financial statement
Income statement and Statement of comprehensive income
DKK million Note
Jun 30,
2023
Jun 30,
2022
Dec 31,
2022
INCOME STATEMENT
1
Mar 31,
2022
Revenue 837 724 1,500
Production cost 602 534 1,080
Gross profit 235 190 420
Sales and marketing costs 37 48 94
Administrative expenses 153 176 334
Operating profit before special items 45 -34 -7
Special items, costs 4 44 104 278
Operation profit / loss 1 -138 -285
Financial income 3 11 21
Financial expenses 37 14 30
Profit/(loss) before income taxes -33 -141 -294
Income Taxes 0 -25 -36
Profit/(loss) from continuing operations -33 -116 -258
Profit/(loss) from discontinuing operations 3 129 19 56
Net profit/(loss) for the period 96 -97 -202
Earnings per share from continuing operations DKK DKK DKK
Earning per share -1.31 -4.67 -10.39
Diluted earnings per share -1.31 -4.67 -10.39
Earnings per share from total operations DKK DKK DKK
Earning per share 3.87 -3.91 -8.13
Diluted earnings per share 3.85 -3.91 -8.13
DKK million Note
Jun 30,
2023
Jun 30,
2022
Dec 31,
2022
STATEMENT OF COMPREHENSIVE INCOME
Net profit/(loss) for the period 96 -97 -202
Other comprehensive income:
Items that will not subsequently be rec lassified to the
income statement:
Remeasurement related to defined benefit pension
obligations
Tax on other comprehensive income defined benefit
pension obligations
Items that may be rec lassified subsequently to the
income statement, when specific conditions are met:
Exchange rate adjustments related to subsidaries (net) -14 31 22
Tax related to exchange rate adjustments related to
subsidaries (net)
Recycled to financial items 0 12 21
Unrealized value adjutments 0 -15 -32
Cash flow hedges 0 -3 -11
Tax on other comprehensive income related to cash flow
hedges
Other comprehensive income, net of tax -13 36 22
Total comprehensive income 83 -61 -180
Total comprehensive income arises from:
Discontinued operations
Continuing operations
-46 -80 -236
Company announcement 21/2023, August 31, 2023
10 of 17 NNIT A/S Østmarken 3A Telephone: +45 7024 4242
2860 Søborg www.nnit.com
Denmark CVR No: 21 09 31 06
Balance sheet
DKK million Note
Jun 30,
2023
Jun 30,
2022
Dec 31,
2022
ASSETS
Mar 31,
2022
Intangible assets 694 790 706
Tangible assets 18 478 17
Lease assets 34 117 108
Transition cost 12 32 7
Deferred tax 93 34 7
Deposits 27 34 27
Trade receivables 58 87 1
Other receivables 5 213 6 9
Total non-current assets 1,149 1,578 882
Ínventories 3 3 4
Transition cost 2 30 2
Trade receivables 5 433 456 383
Work in progress 5 124 151 54
Other receivables 23 28 26
Pre-payments 93 115 32
Tax receivable 19 81 113
Deriative financial instruments - 10 0
Cash and cash equivalents 158 178 208
Total current assets 855 1,052 822
Assets classified as held for sale 0 0 1,051
Total assets 2,004 2,630 2,755
EQUITY AND LIABILITIES
Jun 30,
2023
Jun 30,
2022
Dec 31,
2022
Share capital
Treasury shares
Retained earnings
Other reserves
Total equity
Leasing liability
Deferred tax
Employee benefit obligation
Provisions
Trade payables
Other non-current liabilities
Credit facilities
Total non-current liabilities
Prepayments received, transition cost
Prepayments received, WIP 5 60 82 55
Leasing liability 56 79 73
Trade payables 56 145 118
Employee cost payable 160 206 131
Tax payables 151 11 33
Other current liabilities 315 212 248
Employee benefit obligations 38 31 50
Credit facilities 158 0 857
Total current liabilities
Liabilities classified as held for sale 0 0 199
Total liabilities
Contigent liabilities and legal procedings
6
Company announcement 21/2023, August 31, 2023
11 of 17 NNIT A/S Østmarken 3A Telephone: +45 7024 4242
2860 Søborg www.nnit.com
Denmark CVR No: 21 09 31 06
Statement of cash flow
DKK million Note
Jun 30,
2023
Jun 30,
2022
Dec 31,
2022
STATEMENT OF CASH FLOW
Net profit / loss for the period 96 -97 -202
Reversal of non-cash items -74 142 250
Interest received/paid -34 -13 -30
Income taxes paid 59 -20 4
Cash flow before change in working capital 47 12 22
Changes in working capital -337 -137 -123
Cash flow from operating activities -290 -125 -101
Cash flow from operating activities, discontinued -94 14 106
Cash flow from operating activities, continuing -196 -139 -207
Capitalization of intangible assets -9 -13 -23
Purchase of tangible assets -46 -44 -103
Sale of tangible assets 0 0 2
Divestment of instrastructure business 1,021 0 0
Adjustment acquisition cost 0 0 -1
Acquisition of subsidiary 0 -74 -68
Loan related to aquisition of subsidaries 0 0 -9
Cash flow from investing activities 966 -131 -202
Cash flow from investing activities, discontinued 971 -54 -117
Cash flow from investing activities, continuing -5 -77 -85
Deposit (paid)/received 8 0 3
Installments on lease liabilities -36 -41 -83
Drawn on credit facilities -698 245 361
Cash flow from financing activities -726 204 281
Cash flow from financing activities, discontinued 0 0 0
Cash flow from financing activities, continuing -726 204 281
Net cash flow -50 -52 -22
Cash and cash equivalents at the beginning of the period 208 230 230
Cash and cash equivalents at the end of the period 158 178 208
Additional information
1
:
1. Additional non-IFRS measures
Financial resources at the end of the period’ is defined as the sum of cash and cash equivalents at the end of the period and
undrawn commited credit facilities. Free cash flow is defined as ‘cash flow from operating activities’ less ‘cash flow from
investing activities’.
Company announcement 21/2023, August 31, 2023
12 of 17 NNIT A/S Østmarken 3A Telephone: +45 7024 4242
2860 Søborg www.nnit.com
Denmark CVR No: 21 09 31 06
Statement of changes in equity
DKK million
Share
capital
Treasury
shares
Retained
earnings
Currency
revaluation
Cash
flow
hedges
Tax
Total
other
reserves
Proposed
dividends
Total
EQUITY - June 30, 2023
Mar 31,
2022
Balance at the beginning of the
period
Net profit/loss for the period 0 0 96 0 0 0 0 0 96
Other comprehensive income for the
period
Total comprehensive income for
the period
Transactions with owners:
Transfer of treasury shares 0 4 -4 0 0 0 0 0 0
Share-based payments 0 0 0 0 0 0 0 0 0
Dividends paid 0 0 0 0 0 0 0 0 0
Balance at the end of the period 250 2 619 32 0 -6 26 0 897
DKK million
Share
capital
Treasury
shares
Retained
earnings
Currency
revaluation
Cash
flow
hedges
Tax
Total
other
reserves
Proposed
dividends
Total
EQUITY - December 31, 2022
Mar 31,
2022
Balance at the beginning of the
period
Net profit/loss for the period 0 0 -202 0 0 0 0 0 -202
Other comprehensive income for the
period
Total comprehensive income for
the period
Transactions with owners:
Purchase of treasury shares 0 1 -1 0 0 0 0 0 0
Share-based payments 0 0 1 0 0 0 0 0 1
Dividends paid 0 0 0 0 0 0 0 0 0
Balance at the end of the period 250 -1 526 46 0 -7 39 0 814
DKK million
Share
capital
Treasury
shares
Retained
earnings
Currency
revaluation
Cash
flow
hedges
Tax
Total
other
reserves
Proposed
dividends
Total
EQUITY - June 30, 2022
Mar 31,
2022
Balance at the beginning of the
period
Net profit for the period 0 0 -97 0 0 0 0 0 -97
Other comprehensive income for the
period
Total comprehensive income for
the period
Transactions with owners:
Transfer of treasury shares 0 1 -2 0 0 0 0 0 -1
Share-based payments 0 0 2 0 0 0 0 0 2
Dividends paid 0 0 0 0 0 0 0 0 0
Balance at the end of the period 250 -1 621.2 62 8 -7 63 0 933
Other reserves
Other reserves
Other reserves
Company announcement 21/2023, August 31, 2023
13 of 17 NNIT A/S Østmarken 3A Telephone: +45 7024 4242
2860 Søborg www.nnit.com
Denmark CVR No: 21 09 31 06
Notes
Note 1
Accounting policies
The consolidated financial statements for the first six months of 2023 are prepared in
accordance with IAS 34 ‘Interim Financial Reporting’ and based on the same accounting
policies for recognition and measurement as were applied in the Annual Report 2022.
The financial reporting including the consolidated financial statements for the first six
months of 2023 and Management’s review have been prepared in accordance with
additional Danish disclosure requirements for interim reports of listed companies.
See pages 43 to 51 of the Annual Report 2022 for a comprehensive description of the
accounting policies applied for recognition and measurement.
Following NNIT’s completion of the transformative divestment of the Group’s
infrastructure operations, NNIT changed its financial reporting format to reflect a new
regional organizational structure and ensure consistency with internal management
reporting.
The 2022 quarterly figures were restated to align with the new organizational structure
and were disclosed in company announcement no. 20, 2023.
Note 2
On April 28, 2023, the transformative divestment of the Group’s Infrastructure
Operations business was successfully completed, and a new NNIT strategy was
subsequently launched. The new strategy includes a new organizational structure
moving away from a business unit set-up to a regional set-up, with focus on NNIT’s
core strengths within Life Sciences internationally and the public sector in Denmark.
NNIT completed an organizational change to create four regions:
• Region Denmark
• Region Europe
• Region US
• Region Asia
The four regions report on P&L level to the Chief Operating Decision Maker each month.
No reporting is made on assets. NNIT’s Chief Operating Decision Maker is comprised of
the Executive Management and the Board of Directors.
Company announcement 21/2023, August 31, 2023
14 of 17 NNIT A/S Østmarken 3A Telephone: +45 7024 4242
2860 Søborg www.nnit.com
Denmark CVR No: 21 09 31 06
Note 3
Discontinued operations
In June 2022, it was announced that NNIT was divesting the Infrastructure Operations
business (Hybrid Cloud Solutions and selected parts of Cloud & Digital Solutions). In
December 2022, it was concluded that business qualified for disclosure as discontinuing
operations as of end December 2022 as it was now available for immediate sale in the
present condition. The changed assessment compared to previous periods was due to the
positive development in securing client consent.
In 2022, all costs related to carveout were included in special items in the continuing
operations as the costs were related to general preparation of the business for sale. In
2023, all costs related to the divestment are considered separation costs related to
negotiations with the buyer and are recognized in special items in the discontinued
operations, and all costs regarding the transaction are recognized in the gain statement.
In the financial report for the first six months of 2023, the discontinued operations include
the period from January to April 2023 and gain from sale of the discontinued operations.
DKK million
Region
Denmark
Region
Europe
Region
Asia
Region
US
Total
6M 2023
Revenue
329 232 74 202
837
Production cost
226 174 71 130
602
Gross profit
103 57 3 72
235
Gross margin
31.3% 24.8% 3.9% 35.4%
28.1%
Regional operating profit
81 31 -4 44
152
Regional operating profit margin
24.5% 13.5% -4.8% 21.7%
18.2%
Group operating profit
40 -1 -14 20
45
Group operating profit margin
12.2% -0.2% -19.6% 9.9%
5.4%
6M 2022
Revenue
277 231 69 147
724
Production cost
191 173 63 107
534
Gross profit
86 57 7 40
190
Gross margin
31.0% 24.8% 9.9% 27.3%
26.3%
Regional operating profit
59 26 2 11
97
Regional operating profit margin
21.2% 11.2% 2.2% 7.5%
13.4%
Group operating profit
10 -15 -12 -16
-34
Group operating profit margin
3.4% -6.5% -17.5% -11.0%
-4.7%
FY 2022
Revenue
564 468 157 312
1,500
Production cost
368 365 134 213
1,080
Gross profit
195 103 23 98
420
Gross margin
34.7% 22.1% 14.7% 31.5%
28.0%
Regional operating profit
138 40 11 40
230
Regional operating profit margin
24.5% 8.6% 7.1% 12.9%
15.3%
Group operating profit
49 -33 -14 -9
-7
Group operating profit margin
8.7% -7.1% -8.7% -2.9%
-0.5%
Company announcement 21/2023, August 31, 2023
15 of 17 NNIT A/S Østmarken 3A Telephone: +45 7024 4242
2860 Søborg www.nnit.com
Denmark CVR No: 21 09 31 06
Details on the sale of discontinued operations
In the interim report, the result of the business classified within discontinued operations
is a profit of DKK 129 million. Profits from discontinued operations include gain on sale
of discontinued operations after tax of DKK 138 million (please see details in the table
below). Carveout and separation costs related to the divestment of DKK 81 million are
recognized in special items.
Cash flow from investing activities from discontinued operations include cash
consideration from divestment of the infrastructure business of DKK 1,021 million in H1.
The cash consideration excludes a vendor note of DKK 200 million, which will be repaid
no later than six years after closing. The vendor note is included in other receivables
under non-current assets.
DKK million
Jun 30, 2023
(Jan-April)
Jun 30,
2022
Dec 31,
2022
Revenue 2 507 700 1,451
Production cost 388 606 1,244
Gross profit 119 94 207
Sales and marketing costs 14 37 71
Administrative expenses 35 35 68
Operating profit before special items 71 22 68
Gain from discontinuing operations 138 0 0
Special items, costs 4 81 0 0
Operation profit / loss 128 22 68
Financial income 0 2 2
Financial expenses 2 0 0
Profit/(loss) before income taxes 126 24 70
Income Taxes -3 5 14
Net profit/(loss) for the period 129 19 56
Earnings per share from discontinuing operations DKK DKK DKK
Earning per share 5.18 0.76 2.25
Diluted earnings per share 5.16 0.76 2.24
DKK million
Jun 30,
2023
Sales price (Enterprise value on a debt free basis)
1,350
Net working Capital/Net Interest bearing debt adj. and other adjustments
-239
Sales price for discontinued operations incl. adjustment 1,112
Transaction costs
-87
Sales price for discontinued operations, after transation costs 1,025
Carrying amount of net assets sold
-818
Gain on sale of discontinued operations before tax 207
Tax on divestment
69
Gain on sale of discontinued operations after tax 138
Company announcement 21/2023, August 31, 2023
16 of 17 NNIT A/S Østmarken 3A Telephone: +45 7024 4242
2860 Søborg www.nnit.com
Denmark CVR No: 21 09 31 06
Note 4
Special items
Special item costs regarding continuing operations are primarily cost attributable to earn
out payments related to acquisitions following a decision by the Danish Business
Authority.
Note 5
Related party transactions
Note 6
Contingent liabilities and legal proceedings
The Group is occasionally involved in legal, customer and tax disputes in certain countries.
Such disputes are by nature subject to considerable uncertainty. None of these cases are
expected to have a material impact on the financial position of NNIT.
DKK million
Jun 30,
2023
Jun 30,
2022
Dec 31,
2022
Special items related to:
Impairment of assets 0 0 13
Employee benefit cost (contingent consideration agreement) 32 25 56
Restructuring cost 12 49 126
Cost regarding acquisition and disposal of operations 81 30 83
Total special items 125 104 278
Total special items, discontinuing operations -81 0 0
Total special items, continuing operations 44 104 278
If special items had been recognized in operating profit before
special items, they would have been included in the following
items:
Cost of goods sold 5 71 206
Sales and marketing costs 0 0 0
Administratrive expenses 120 33 72
Cash flow from operating activities 125 104 278
Company announcement 21/2023, August 31, 2023
17 of 17 NNIT A/S Østmarken 3A Telephone: +45 7024 4242
2860 Søborg www.nnit.com
Denmark CVR No: 21 09 31 06
Note 7
Currency sensitivities
Currency development
NNIT has a net cost exposure in the Czech koruna and the Philippine peso. Therefore, a
depreciation of these currencies versus Danish kroner has a positive impact on reported
operating profit, whereas an increase will have the reverse effect.
For the other main currencies, NNIT has a net profit exposure. Therefore, an increase of
EUR, CNY, CHF, and USD versus Danish kroner has a positive impact on reported
operating profit, whereas a decrease will have the reverse effect.
The effect from currency development in H1 2023 gives a positive impact of DKK 1 million.
EUR 25
CNY 6
CZK -6
PHP -8
CHF 1
USD 17
Key currency assumptions
2021 average
exchange rates
2022 average
exchange rates
2023 average
exchange rates
CNY 97.55 104.44 99.61
EUR 743.70 744.08 744.61
CZK 29.00 30.21 31.43
PHP 12.76 12.87 12.49
CHF 687.94 717.56 754.92
USD 628.99 663.02 689.35
Estimated annual impact of NNIT’s operating profit of a 10% increase in the
outlined currencies against DKK
DKK per 100