NNIT completed the carve-out and divestment of its infrastructure business - the single most transformative event in company history - on April 28. The Group delivered solid business performance, generating revenue growth of 16% (11% organic) to DKK 413 million in Q1 2023 and improved the operating profit margin significantly to 4.9% on the back of higher revenue and utilization. NNIT maintains the financial outlook for growth and operating profit before special items for 2023.
Pär Fors, CEO of NNIT, comments: "We are pleased to report solid business performance and stronger financials in the first quarter of 2023 as Life Sciences Solutions and Cloud and Digital Solutions lifted the activity level and improved utilization. We won several new contracts and renewals and remain on track to deliver our 2023 guidance. Equally important, we are thrilled that the divestment of our infrastructure business was completed on April 28, 2023, paving the road for the development of NNIT as a highly specialized IT services provider with two strongly positioned business units".
Highlights Q1 2023
Financial highlights
- Revenue increased YoY by 16% (11% organic) to DKK 413 million in Q1 2023, driven by strong contributions from both business units with particularly solid growth in the two areas Production IT and Custom Application Development.
- The operating result before special items increased to DKK 20 million from DKK -16 million positively impacted by growth and improved utilization. The operating profit margin increased to 4.9% compared to -4.5% in Q1 2022.
- Special items amounted to DKK 14 million, mainly attributable to earn out payments related to acquisitions following a decision by the Danish Business Authority.
Business highlights
- NNIT successfully completed the divestment of the Group's infrastructure business on April 28, 2023, at a purchase price of DKK 1,350 million (Enterprise Value on a debt free basis) after EBIDTA adjustments. In line with expectations, the estimated cash impact of the transaction, adjusted for net debt and working capital, carve-out and separation costs as well as estimated tax, amounts to DKK 1,288 million including a vendor note of DKK 200 million, which will be repaid no later than six years after closing.
- Significant new contracts and renewals secured across Life Sciences Solutions and Cloud & Digital Solutions, including two public contracts and several long-term engagements with international life science customers impacting 2023-2025.
Outlook
- NNIT maintains the outlook for growth and operating profit before special items for 2023 with revenue growth of around 10% and operating profit margin before special items expected to increase to around 5% through higher revenue and improved utilization.
- NNIT still expects costs of up to DKK 180 million in 2023 relating to carve-out and separation activities as well as earn out payments connected to acquisitions (following a decision by the Business Authority) and restructuring costs to right-size the organization after completion of the strategic divestment of the infrastructure operations. Following closing, NNIT expects to book up to DKK 70 million of these costs as special items with the remaining amount being re-classified as part of discontinued activities.
Conference call
On May 4, 2023 at 15:00 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, EVP & CFO
Tel: +45 3077 8888
carr@nnit.com
Media relations:
Tina Joanne Hindsbo, Media Relations Manager
Tel: +45 3077 9578
tnjh@nnit.com
