Financial results for Q3 2021 just released: Group revenue increase of 6.1% countered by lower profit margin

In Q3, we saw continued strong growth within the Life Sciences International business, and we strengthened this business further with the addition of SL Controls. Once again, our Winning Solutions strategy gained traction, as it now constitutes 54% of NNIT’s revenue compared to 46% in the same period last year.

Please refer to investor.nnit.com for the full company announcement re the financial results for Q3 2021.

CEO Pär Fors comments:

"Q3 performed below previous quarters, which was in line with expectations and previous years. International Life Sciences continued at high growth rates and is now the largest segment in the Group, and Winning Solutions performed satisfactorily. P&P was impacted by a weaker performance within the infrastructure business and focus is now on separation of the infrastructure operations into a dedicated business unit to enhance efficiencies and reduce costs. We are confident in our strategy and maintain our guidance for the year".

• Group revenue increased to DKK 698m, up 6.1% (-1.5% organic) from Q3 2020.
• Life Sciences (excluding Novo Nordisk Group) grew to DKK 246m, up 36% (13% organic).
• Winning Solutions now constitutes 54% of the total revenue (46% in Q3 2020).
• Net result is a loss of DKK 10m (DKK 9m in Q3 2020), primarily due to a 12.9% decline in revenue from the Novo Nordisk Group, a 1.3% revenue decline in revenue from the Private & Public segment, low profitability within our infrastructure operations and special items costs of DKK 23m.

Financial overview

Selected business highlights

• The organic growth within International Life Sciences is continuously supplemented through acquisitions; on July 5, 2021, NNIT acquired SL Controls. SL Controls is headquartered in Ireland and is internationally recognized as an industry leader in equipment systems integration and system support. The acquisition will expand the NNIT portfolio of services, competences and manpower to the International Life Sciences market, specifically within the strategic production IT Winning Solution. In addition, SL Controls’ production equipment integration services are complementary to NNIT’s offerings, providing a full end-to-end service model.
• Winning Solutions is another area of growth, and it is now at 54% of total revenue, up from 46% in Q3 2020. Tailwind was most notable within the solutions areas Dynamics 365, Hybrid Cloud and Cybersecurity (for Private & Public) and within Veeva Powerhouse and Production IT (for Life Sciences).
• In Q3, NNIT secured a large number of contracts with both new and existing customers. For some time, the market trend has been many, smaller transactions relating to shorter engagements rather than big, lump transactions relating to long-term engagements. And that is very much the case for NNIT’s Q3.
• The improvement of visibility to accelerate tangible cost reductions is key to the business. To facilitate this, the process of gathering all NNIT Infrastructure activities into a dedicated business unit was initiated in July 2021, and execution has started in Q3.

Outlook for 2021

Guidance for 2021 is maintained:

• Revenue growth of 1-4%
• Operating profit margin before special items of around 5%
• Investment level of 5-7% of total revenue excluding acquisitions

Read the full announcement here