Q2 2026 NNIT A/S Earnings Call Transcript
Key Points
- Sequential improvement in constant currency revenue growth from -7.3% in Q1 to -4.4% in Q2, driven by growth initiatives and improved order entry.
- Group EBIT margin of 4.8% was broadly stable year-over-year despite a significant revenue decline, reflecting successful cost savings and capacity adjustments.
- Region U.S. returned to strong profitability with an EBIT margin of 29.5% in Q2, up from 21.7% in the prior year and 2.9% in Q1, driven by cost reductions and improved utilization.
- Public Denmark segment delivered strong growth of 10% in Q2, driven by ramping up on projects won in late 2025, with increased tender activity post-government formation.
- SCALES continued its growth momentum with constant currency growth of 10.9%, driven by existing customer engagements and successful integration of the Microsoft service offering.
- Free cash flow improved significantly to DKK8 million in Q2 from negative DKK61 million in the prior year, driven by stronger operating cash flow and better trade receivables collections.
- AI platforms Lumina and Alira have been deployed to selected customers, showing tangible efficiency gains and enabling NNIT to bid on projects previously considered out of scope.
- Order entry picked up across all regions towards the end of Q2, providing improved visibility and confidence in a better revenue trajectory for the second half.
- The strategic review confirmed NNIT's core strengths, including a strong position with Big Pharma, high customer loyalty, and deep domain expertise.
- The divestment of Singapore allows NNIT to focus on other Life Sciences areas with growth opportunities, as concluded by the strategic analysis.
- Group revenue declined by 4.5% in constant currency in Q2, reflecting lower order entry from Q1 and continued customer hesitation among Tier 1 customers.
- Region Europe revenue declined by 11.9% in constant currency, impacted by lower order entry and continued customer hesitation, leading to a decline in regional EBIT.
- Region Asia continued to be significantly impacted by a decline in revenue from an existing large Tier 1 customer, with constant currency growth of -10.6%.
- SCALES EBIT margin slightly declined year-over-year due to increased use of subcontractors from internal capacity constraints and newer projects carrying lower margins.
- Special items in Q2 were DKK18.5 million, primarily related to restructuring costs as NNIT continues to rightsize the organization.
- The company expects full-year constant currency revenue growth to be single-digit negative, indicating continued revenue challenges.
- The transformation program is still in early stages, and the full roadmap and updated strategy have not yet been shared, creating uncertainty.
- The Novo Nordisk business is expected to contract slightly in 2026, in line with initial assumptions, which could impact revenue.
- The use of subcontractors in SCALES due to capacity constraints is a temporary measure that may pressure margins if not addressed.
- The company faces ongoing challenges in balancing delivery capacity with demand, as seen in the need for external resources in SCALES.
At this time, I would like to welcome everyone to NNIT's Q2 2026 results. Today's call is being recorded. If you have any objections, please disconnect at this time. (Operator Instructions)
I now turn the call over to speakers. You may now begin.
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Thank you very much, operator and everybody. Please turn to slide number 2.
Good morning, and thank you for joining NNIT's webcast. My name is Lars Petersen. I'm heading up the Communication department at NNIT. With me today at the headquarter in Copenhagen, I have the pleasure of our CEO, Claus Rydkjaer; and CFO, Carsten Ringius. In a minute, they will present the business highlights and second quarter results for 2026, which we released yesterday afternoon.
Please turn to slide number 3. Claus will go through the key highlights, including the regional performance, and then Carsten will follow with the group financial highlights and
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