NNIT A/S: Business performance impacted by market undercetainty expected to continue. Mitigating actions taken to protect profitability
Q1 2025 key highlights
- Financial performance for the first quarter was expected to be moderate, but macroeconomic and geopolitical uncertainty increased, which impacted NNIT. The uncertainty has influenced customer behavior, especially in the three regions focusing on IT Life Science solutions, where several projects have been postponed, most predominantly in Region Europe. Group revenue amounted to DKK 464.1m, entailing flat revenue growth compared with last year.
- Despite improving utilization and capacity adjustments made across regions during the quarter as well as tight cost focus across business areas, the group operating profit excl. special items declined to DKK 18.0m in Q1 2025 compared with DKK 23.9m in the same quarter last year. The decline was due to the lower profit generation in Region Europe and Region Denmark, partly offset by improved profitability performance in Region US and Region Asia. Group operating profit margin excl. special items was 3.9% in Q1 2025 compared with 5.2% in the same quarter last year.
- Region Denmark growth around 4% where selected solution areas focusing on the Public sector in Denmark, is showing growth upwards at 8%. SCALES also contributed to the growth in region Denmark solidifying its position as a leader within D365 solutions.
- Special items amounted to DKK 25.3m in Q1 2025 covering restructuring costs of DKK 20m impacting all regions, earn-out payments of DKK 3m, and IT systems and integration costs amounting to around DKK 2m.
- The financial outlook for 2025 was adjusted on May 5, 2025 cf. company announcement 04/2025 as the current macroeconomic and geopolitical landscape has deteriorated materially since the full-year outlook communicated in February. NNIT expects to be further affected by current uncertainty why the organic growth range was adjusted to 0% to 5% (previously 7% to 10%). Group operating profit margin excl. special items was maintained at 7% to 9% due to significant cost reducing initiatives with most already having been executed. As a result of lower revenue generation caused mainly by external factors, NNIT expects to incur additional restructuring costs as special items. Special items are expected to be at up to last year’s level of DKK 69m (previously expected to be significantly below the 2024 level).
The first quarter was more severely affected by uncertainty than expected at the beginning of the year. Hesitance among several customers of NNIT has resulted in less revenue and sales as projects are being postponed. In general, NNIT has taken action to adjust capacity to fit the current demand with several reductions completed in 2024 and leaving NNIT in a stronger position going into 2025. However, it has been necessary to take further actions to mitigate the business impact from lower revenue generation with a reduction of around 100 employees in Q1 2025. Furthermore, NNIT has carried out several cost-reducing initiatives such as putting new employments on hold and limiting all discretionary spending to a minimum with full impact from the second quarter.
Given the current macroeconomic environment and geopolitical unrest, NNIT continues to expect that its customers will be affected, which is reflected in the adjusted full-year financial outlook.
Pär Fors, CEO of NNIT, comments: “The business environment of NNIT has deteriorated in the first quarter of the year as especially our Life Science customers are being negatively impacted by the macroeconomic unrest. Customers are hesitant to engage in new contracts before things are stabilizing, and we are navigating this environment to continue our strategic journey at NNIT. However, the impact from the uncertainty is more severe than initially expected, why the full-year outlook has been adjusted.”
Financial overview – Selected key figures
| NNIT A/S, DKK million | Q1 2025 | Q1 2024 | FY 2024 |
| Revenue | 464.1 | 463.4 | 1,851 |
| Revenue growth, % | 0.2% | 12.2% | 23.4% |
| Revenue growth, organic % | -0.8% | 8.0% | 10.8% |
| Group operating profit excl. special items | 18.0 | 23.9 | 117 |
| Group operating profit margin excl. special items, % | 3.9% | 5.2% | 6.3% |
| Special items | .25.3 | 11.3 | -69 |
| Group operating profit incl. special items | -7.3 | 35.2 | 48 |
| Group operating profit margin incl. special items, % | -1.6% | 7.6% | 2.6% |
| Free cash flow | -73 | -166 | -40 |
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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 the subsidiary SCALES. Together, these companies employ more than 1,700 people in Europe, Asia and the USA.
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