Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NNIT AS (OCSE:NNIT, Financial) secured important contracts with new customers in Region U.S. and Region Denmark, indicating strong positioning within its core areas.
- Region Asia experienced significant growth with a 12.6% organic increase, attributed to capacity right-sizing and enhanced commercial focus.
- Region Denmark showed positive organic growth of 4%, driven by solid results in the Public segment.
- The company is well-positioned in the life sciences and public sector in Denmark, with strong customer traction and feedback.
- NNIT AS (OCSE:NNIT) has taken proactive measures to adjust capacity and reduce costs, including a reduction of around 100 employees, to protect profitability.
Negative Points
- Overall organic growth was negative at 0.8%, with flat total revenue growth compared to last year.
- Region Europe faced significant challenges due to geopolitical uncertainty, resulting in a 5.9% decline in organic growth.
- Region U.S. experienced a negative 9.5% organic growth, impacted by a decline in the data migration business and a moderate market slowdown.
- The company had to lower its financial outlook for 2025, adjusting expected organic growth from 7%-10% to 0%-5% due to market uncertainties.
- NNIT AS (OCSE:NNIT) anticipates increased restructuring costs for the rest of the year, potentially reaching last year's level of DKK69 million.
Q & A Highlights
Q: Now that you have lowered the guidance to 0% to 5%, does the zero reflect confidence that this is the low end, or could there be further deterioration?
A: Carsten Ringius, CFO: This range reflects our current assessment, assuming no further market deterioration. We hope for clarity that could reduce uncertainty, but the environment remains uncertain. Par Fors, CEO: The outcome of the tariff war is still unknown, and our guidance reflects a middle-ground scenario. However, there is increased uncertainty.
Q: Are pharma customers more affected by the current turmoil compared to other sectors?
A: Par Fors, CEO: Yes, pharma companies, especially large global ones, are more hesitant due to supply chain disruptions and global uncertainties. In contrast, the Danish public sector and private clients have shown more stability.
Q: Regarding restructuring costs, is the DKK25 million increase expected in Q2?
A: Carsten Ringius, CFO: Yes, the main part of our restructuring activities, which could reach last year's levels, is expected to occur in Q2.
Q: Can you explain the reallocation of costs to the Danish region?
A: Carsten Ringius, CFO: The increase in Denmark is due to costs from Aarhus and a share of our headquarter costs. The U.S. reduction is from closing an office and reducing overhead, not related to Denmark's increase.
Q: How significant is the pass-through revenue from the Danish operation?
A: Carsten Ringius, CFO: It's not a main driver but affects year-over-year growth positively. Without this headwind, growth could have been between 6% and 8%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
