NNIT (NNIT) Q2 2024 earnings summary

Executive summary

• Achieved 11.8% total revenue growth and 11% organic growth year-over-year for Q2 2024, reaching DKK 474 million, with improved profitability and strategic progress across key regions despite macroeconomic headwinds.

• Market share gains in Denmark and Europe, with Asia returning to growth and profitability; US region faced headwinds from data migration business.

• Strategic transformation to a pure-play IT consultancy in life sciences and public-private sectors is progressing, with improved billability, low attrition, and major internal milestones such as new ERP/HR systems and nearing completion of IT separation from Aeven.

• Important strategic contracts secured with both existing and new clients, including the largest-ever US deal (DKK 130 million, 3-year term) with a major pharma customer.

• Full-year outlook for ~10% organic revenue growth and 8–9% operating profit margin (excluding special items) confirmed.

Financial highlights

• Q2 2024 revenue: DKK 474 million, up 11.8% year-over-year; organic growth at 11.0%.

• Group operating profit (excluding special items): DKK 32 million (Q2 2023: DKK 25 million); margin rose to 6.7% from 5.9%.

• Gross margin improved to 29.4% from 24.3% in Q2 2023.

• Free cash flow was negative at DKK -262 million, impacted by non-recurring payments and working capital changes; net cash flow at DKK -91 million.

• Net profit for H1 2024: DKK 34 million (H1 2023: DKK 96 million, including discontinued operations); earnings per share from continuing operations: DKK 1.41.

Outlook and guidance

• Full-year 2024 outlook confirmed: organic revenue growth of ~10% and operating profit margin (excluding special items) between 8% and 9%.

• Growth expected to be single-digit in Q3 and double-digit in Q4, with profitability improving quarter by quarter.

• Five key levers for H2 include contract wins, Asia turnaround, data migration business rightsizing, completion of internal projects, and office relocations.