1. Basis of preparation  

1.1 Summary

of significant accounting policies  

The consolidated financial statements are prepared  

in accordance with International Financial Reporting  

Standards (IFRS) as adopted by the European Union,  

and further requirements of the Danish financial  

statements Act. The Consolidated Financial State-  

ments are prepared in accordance with IFRS stand-  

ards and interpretations applicable to the 2022  

financial year.  

Restatement  

NNIT has issued a restatement of the annual finan-  

cial statement for 2021, following the Danish Busi-  

ness Authority's final decision on NNIT’s accounting  

treatment of earn-out payments related to acqui-  

sitions. Complete

restated primary statements  

including the balance sheet as of 31 December 2020  

are included in company announcement 4/2023  

the ability to direct the use and obtain the benefit  

from the service.  

NNIT has two different types of businesses –  

'projects' and 'Service Level agreements' (SLA)  

where revenue recognition is treated differently.  

Measurement basis  

The consolidated financial statements have been  

prepared under the historical cost convention, as  

modified by the measurement of derivative financial  

instruments at fair value through profit or loss.  

The accounting policies set out below have been  

applied consistently in the preparation of the  

consolidated financial statements for all the years  

presented.  

Projects  

The project business is characterized by being  

deliveries which in nature are negotiated contracts  

based on consumption and typically comprise advi-  

sory, design and development activities. Revenue  

will be recognized over time, as the 'no alternative  

use' criteria's are met, using 'the percentage of  

completion method'.  

For fixed priced projects the proportion of revenue  

to be recognized in a particular period is calcu-  

lated according to the percentage of completion  

of the project. For most contracts this is meas-  

ured by reference to the costs of performing the  

contract incurred up to the relevant balance sheet  

date as a percentage of the total estimated costs  

of performing the contract. Reference to cost is  

assessed to be the most appropriate method as  

incurred hours are the value driver for the projects.  

The sales value agreed in the contract is recognized  

over the contract period using above method.  

For time-and material contracts, we recognize  

revenue as performance takes place based on  

actual hours incurred.  

Overview of restatement adjustments:  

2021  

2020  

As  

Adjust-  

As  

Adjust-  

DKK million  

reported  

ments Restated  

reported  

ments Restated  

Income statement  

Operation profit before special items  

142  

2

144  

165  

2

167  

Operation profil  

(11)  

(53)  

(64)  

122  

(45)  

77  

Profit before income taxes  

(25)  

(51)  

(76)  

102  

(32)  

70  

Net Profit for the year  

(7)  

(42)  

(49)  

76  

(29)  

47  

Balance  

Intangible assets  

945  

(242)  

703  

781  

(203)  

578  

Deferred tax  

13  

13  

26  

32  

8

40  

Tax receivables  

36  

6

42  

30  

1

31  

Equity  

1,142  

(149)  

993  

1,134  

(104)  

1,030  

Total non-current liabilities  

784  

(75)  

709  

661  

(94)  

567  

Total current liabilities  

871  

1

872  

867  

4

871  

Earnings per share  

Earnings per share (DKK)  

(0.3)  

(1.68)  

(1.98)  

3.07  

(1.17)  

1.90  

Diluted earnings per share (DKK)  

(0.3)  

(1.68)  

(1.98)  

3.04  

(1.15)  

1.89  

Accounting policies  

Considering all the accounting policies applied,  

Management regards the following as the most  

significant accounting policies for the recognition  

and measurement of reported amounts:  

Recognition of revenue  

Revenue is the fair value of the transaction price  

or receivable from the sale of our services and  

customized IT applications and is the gross sales  

price less VAT and any price reductions in the form  

of discounts and rebates.  

Revenue can be recognized over time or at a point  

in time.  

Revenue is recognized over time when an asset on  

behalf of a customer is created with no alternative  

use and NNIT has an enforceable right to payment  

for performance completed year to date, or the  

customer obtains control of a service and thus has  

Contracts where the recognized revenue from  

the work performed exceeds progress billings are  

recognized as 'work in progress' in the balance  

sheet under assets.  

Contracts for which progress billings exceed the  

revenue are recognized as 'prepayments received'  

under liabilities.  

If it is likely that the total costs in relation to a  

construction contract will exceed the total revenue  

on a specific project, the expected loss is recog-  

nized immediately in the income statement in the  

current period.  

Transition  

Transition is:  

•

Basic transfer of services and responsibilities  

•

The minimum activities required that enable the  

delivery organization to take over operation of  

the current or similar services for the customer.  

The transition phase takes place in the period between  

contract signing and service start up (operation).  

Activities performed in the transition phase do not  

transfer services to the customer as they are seen as  

‘start-up’ costs and therefore revenue cannot be recog-  

nized as the activities are performed but will be recog-  

nized over the operation period. Cost regarding the  

transition projects is capitalized and depreciated over  

the contract period. Please refer to ‘Transition cost’.  

Any prepayments received regarding transition  

projects will be recognized as revenue over the  

operation period.  

phase will take place in parallel with the transition  

phase.  

Revenue regarding transformation projects is  

recognized over time as an asset is created with no  

alternative use and NNIT has an enforceable right  

to payment and revenue recognition in nature is  

similar to the project business.  

or loss recognized in the hedging reserve for the  

period in which the criteria were met remains in  

equity and will be recognized in the income state-  

ment when the forecasted transaction is ultimately  

recognized in the income statement.  

When a forecast transaction is no longer expected  

to occur, the cumulative gain or loss that was recog-  

nized in equity is immediately transferred to the  

income statement under financial income or finan-  

cial expenses.  

Operation  

Revenue from the operation of IT systems is  

recognized in the period in which the outsourcing  

services are provided based on amounts billable  

to a customer (for fixed price components in the  

contract, revenue is typically recognized on a  

straight-line basis over the course of a year, while for  

variable components revenue is recognized based  

on usage of units, and price lists according to the  

contract).  

Service Level Agreements (SLA)  

The SLA business comprise infrastructure and appli-  

cation outsourcing services and requires the perfor-  

mance of certain performance obligations typically  

defined as service levels. As described below under  

“Outsourcing contracts”, the revenue under an  

outsourcing contract will be recognized over time.  

Hedge accounting  

All currency derivative instruments are initially  

recognized at fair value and subsequently remeas-  

ured at fair value at the end of the reporting period.  

Value adjustments of currency derivative financial  

instruments classified as cash flow hedges are  

recognized directly in other comprehensive income,  

given hedge effectiveness, and recognized in a  

hedging reserve in equity. The cumulative value  

adjustment of these instruments is transferred from  

the hedging reserve to the income statement as a  

reclassification adjustment under financial income  

or financial expenses, when the hedged transaction  

is recognized in the Income statement.  

When a hedging instrument no longer meets the  

criteria for hedge accounting, any cumulative gain  

Transformation  

Transformation is:  

•

A significant change to future state of the subject.  

•

The full set of activities required for the delivery  

organization to provide the future state operation  

of services to the customer.  

These activities transfer services to the customer as  

performed.  

The transformation phase typically starts after the  

successful completion of transition and ends when  

the environment has reached the agreed future  

state. In some circumstances the transformation  

Outsourcing contracts  

Outsourcing contracts consist of two activities,  

preparatory project (such as transition and transfor-  

mation) and operation of the IT systems e.g. applica-  

tion, servers and infrastructure. These identifiable  

components are accounted for differently to reflect  

the substance of the transaction.  

The total contract value of the outsourcing  

contracts will be split into the different perfor-  

mance obligations depending on the activities to be  

delivered. NNIT will profit align between the perfor-  

mance obligations within the contract (expected  

cost plus margin approach).  

1.2 Summary

of key accounting estimates  

1.3 Changes

in accounting policies, estimates and disclosures  

The preparation of financial statements under IFRS  

requires the use of certain key accounting esti-  

mates.  

Determination of the carrying amount of some  

assets and liabilities requires Management to make  

judgements, estimates and assumptions about  

future circumstances.  

Estimates and assumptions are based on historical  

experience and other factors and are regarded by  

Management as reasonable in the circumstances  

but are inherently uncertain and unpredictable and  

therefore the actual outcome may differ from these  

estimates.  

Management considers judgements and estimates  

under the following items as significant to these  

consolidated financial statements:  

•

Discontinued operations (note 3.9)  

•

Impairment test, goodwill (note 3.2)  

•

Contract balances (note 3.4)  

as well as the legal carveout and organizational  

split are now just awaiting formal approvals. Clas-  

sification of discontinued operations is subject to  

accounting estimates with regards to allocating  

revenue and costs.  

NNIT has applied relevant new or amended stand-  

ards (IFRS) and interpretations (IFRIC) as applied by  

the EU and which are effective for the financial year 1  

January – 31 December 2022. NNIT has assessed that  

the new or amended standards and interpretations  

have not had any material impact on NNIT’s Annual  

Report in 2022  

of Excellis Health Solutions. The decision was that  

earn-out payments should not be included in the  

cost price of the acquisition and consequently good-  

will, but instead expensed as remuneration over a  

period of time in accordance with IFRS 3, section  

B55(a), as the earn-out is in part subject to the selling  

shareholders’ continued employment during a spec-  

ified period of time according to the Danish Business  

Authority. Other acquisitions, including SCALES,  

Valiance Partner, HGP Group and SL Controls  

comprise similar terms as Excellis Health Solutions  

earn-out and are consequently subject to the same  

amendment of the accounting treatment.  

Impairment test  

For the goodwill impairment test, a number of esti-  

mates are made on the development in revenues,  

gross profits, operating margins, future capital  

expenditures, discount rates and growth expecta-  

tions in the terminal period. These estimates are  

based on assessments of the current and future  

development in the subsidiary and are based on  

historical data and assumptions of future expected  

market developments, including expected long-term  

average market growth rates.  

Contingent consideration (earn-out)  

The Danish Business Authority required NNIT A/S  

to change the applied accounting treatment of  

the earn-out payment related to the acquisition  

Work in progress  

The determination of the percentage of completion  

of work in progress related to fixed price projects is  

based on estimates of future costs, hours and mate-  

rials. Each project is unique in their design. Manage-  

ment makes judgements on individual assessments  

of specific projects and their associated risk from  

the on-going monitoring, to identify any deviations  

from estimates.  

Adjustments to cost estimates may be made peri-  

odically following management review, which may  

result in a re-assessment of the percentage of  

completion as of the date of review. Such changes  

result in revisions to revenue attributable to work  

performed up until the date of revision. The effect  

of such changes in estimates is recognized as a  

change to revenue in the period in which the revi-  

sions are determined.  

Discontinued operations  

The announced divestment of infrastructure oper-  

ations (Hybrid Cloud Solutions and selected parts  

of Cloud & Digital Solutions) on June 22, 2022,  

has been assessed in respect of IFRS 5 Discon-  

tinued operations, and it represents a significant  

accounting judgement. It has been concluded that  

business qualify for disclosure as discontinuing  

operations as of end December 2022 as it is now  

available for immediate sale in the present condi-  

tion.  

The changed assessment compared to previous  

periods is due to the development in Client consent  

1.4 General

accounting policies  

Principles of consolidation  

The consolidated financial statements include the  

financial statements of NNIT A/S (parent company)

and entities over which the Group has control.  

The Group controls an entity when the Group is  

exposed to, or has rights to, variable returns from  

its involve- ment with the entity and has the ability  

to affect those returns through its power over the  

entity. NNIT A/S and its subsidiaries are collectively  

referred to as the Group.  

The consolidated financial statements are based on  

the financial statements of the Parent Company and  

the subsidiaries, and are prepared by combining  

items of a similar nature and eliminating intercom-  

pany transactions, shareholdings, balances and  

unrealized intercompany profits and losses. The  

consolidated financial statements are based on  

financial statements of Group companies prepared  

in accordance with the Group’s accounting policies.  

NNIT completed a major organizational change to  

create three distinct business units as disclosed in  

company announcement from April 29 2022:  

•

Life Sciences Solutions (LSS)  

•

Cloud & Digital Solutions (CDS)  

No operating segments have been aggregated to  

form the reported business segments.  

There are no sales or other transactions between  

the business segments. Costs have been split  

between the business segments according to a  

specific allocation with the addition of a minor  

number of corporate overhead costs allocated  

systematically between segments. Other operating  

income has been allocated to the two segments  

based on the same principle.  

Financial income and expenses and income taxes  

are managed at Group level and are not allocated to  

business segments.  

Realized and unrealized exchange rate adjustments  

are recognized in the income statement under  

“financial income and expenses”.  

Currency translation for foreign operations in the  

financial statements of foreign subsidiaries' balance  

sheet items are translated to Danish kroner (DKK)  

at the exchange rate at the balance sheet date, and  

income statement items are translated using the  

average exchange rate.  

Exchange differences arising from:  

•

the translation of subsidiaries’ net assets at the  

beginning of the financial year at exchange rates  

at the balance sheet date and  

•

the translation of subsidiaries’ income statements  

at exchange rates at the balance sheet date  

•

exchange rate adjustments of loans, which are  

seen as part of the net investment in foreign  

subsidiaries  

are recognized in ‘exchange rate adjustments’ in  

other comprehensive income and presented in a  

separate reserve within equity.  

Identifiable intangible assets are recognized if they  

can be separated, and the fair value can be reliably  

measured. Deferred tax on revaluations is recog-  

nized.  

Any positive differences between fair value of  

consideration transferred and fair value of net  

assets acquired on acquisition of subsidiaries are  

recognized as goodwill. Consideration transferred  

consists of shares, contingent consideration as well  

as cash and cash equivalents.  

Goodwill is not amortized but is tested annually for  

impairment.  

Transactions costs are recognized as operating  

costs as they have incurred.  

If the initial accounting for business combination  

can be determined only preliminary by the end of  

the period in which the combination is affected,  

adjustments made to the provisional fair value of  

acquired net assets or cost of the acquisition within  

12 months of the acquisition date are adjusted to  

the initial goodwill.  

Acquired entities are recognized in the consoli-  

dated financial statements at the date control was  

achieved.  

Other accounting policies  

Continuing and Discontinued operations  

Separation of operations into continuing and  

discontinued operations is based on an identifica-  

tion of contracts and revenues, direct employees  

and costs as well as identification of time spend  

by employees in one category related to the other.  

Shared costs are split based on allocation between  

the two categories based on estimates future split.  

Translation of foreign currency  

Functional currency and presentation currency  

The financial statement items for each of the  

Group’s entities are measured in the currency used  

in the economic environment in which the entity  

operates (functional currency).  

The consolidated financial statements are  

presented in Danish kroner (DKK).  

Transactions and balance sheet  

Transactions in foreign currencies within the year  

are translated into the functional currency at the  

exchange rate at the transaction date. Receivables  

and liabilities in foreign currencies that have not  

been settled at the balance sheet date are trans-  

lated at the exchange rate at the balance sheet date.  

Costs  

Cost of goods sold  

The cost of goods sold comprises costs paid in  

order to generate revenue for the year, including  

amortization and depreciation, share-based  

compensation and salaries.  

Sales and marketing costs  

Sales and marketing costs comprise costs in the  

form of salaries and share-based compensation for  

sales and marketing staff, advertising costs, and  

amortization and depreciation.  

Segment reporting  

Segment performance is evaluated on the basis  

of the operating profit consistent with the consoli-  

dated financial statements.  

Operating segments are reported in a manner  

consistent with the internal reporting provided to  

Group Management and the Board of Directors.  

Acquisition of subsidiaries  

On acquisition of subsidiaries, the acquisition  

method is applied, and identifiable assets and liabil-  

ities are recognized and generally measured at fair  

value at the date control was achieved.  

Administrative expenses  

Administrative expenses comprise costs in the  

form of share-based compensation and salaries for  

administrative staff and amortization and depreci-  

ation.  

amount that can be allocated to the net profit for  

the year is recognized in the income statement, and  

the amount that relates to items recognized in other  

comprehensive income and/or equity respectively  

is recognized in other comprehensive income and/  

or equity.  

Deferred tax is measured according to the balance  

sheet-based liability method on all temporary differ-  

ences between the carrying amount and tax base of  

assets and liabilities.  

Deferred tax assets are recognized in the balance  

sheet under non-current assets.  

Deferred tax liabilities are recognized in the balance  

sheet under non-current liabilities.  

Deferred tax is measured on the basis of the tax  

rules and tax rates that according to current legis-  

lation at the balance sheet date will apply at the  

time of the expected realization of the deferred  

tax asset or settlement of the deferred tax liability.  

Any changes to deferred tax caused by changes in  

statutory tax rates are recognized in the income  

statement.  

For Danish tax purposes, NNIT A/S and SCALES A/S  

is assessed jointly with the Novo Group. Income tax  

is allocated between the companies in proportion to  

their taxable incomes (full allocation with compen-  

sation concerning tax losses). The jointly assessed  

companies are included in the Tax Prepayment  

Scheme.  

Intangible assets  

Goodwill  

Goodwill arising from business combinations  

is recognized and measured as the difference  

between the total of the fair value of the considera-  

tion transferred compared to the fair value of identi-  

fiable net assets on the date of acquisition.  

Goodwill is not amortized, but the carrying amount  

is tested at relevant cash generating unit level  

(CGU-level) for impairment once a year.  

Goodwill is written down to its recoverable amount  

through the income statement if lower than the  

carrying amount.  

The recoverable amount is determined as the  

present value of the discounted future net cash  

flow from the activities goodwill relates to. In calcu-  

lating the present value, discount rates are applied  

reflecting the riskfree interest rate with the addition  

of risks relating to the individual CGU.  

costs include salaries, amortization and deprecia-  

tion and other costs that can be directly attributed  

to NNIT development activities.  

Development costs recognized in the balance sheet  

are amortized from completion of the development  

using the straight-line method, over the period the  

asset is expected to generate economic benefits.  

Straight-line amortization over the expected useful  

life of the asset:  

•

IT projects: 5-10 years  

Intangible assets that are in use and subject to  

amortization are tested for impairment whenever  

events or changes in circumstances indicate that the  

carrying amount may not be recoverable. Factors  

that could trigger an impairment test include  

changes in the economic lifes of similar assets or  

the relationship with other intangible assets or  

tangible assets.  

Intangible assets under construction are tested for  

impairment once a year.  

If the carrying amount of intangible assets exceeds  

the recoverable amount based upon the above indi-  

cators of impairment, any impairment loss is meas-  

ured based on discounted future cash flows.  

Special Items  

Special items comprise costs or income that cannot  

be attributed directly to the Group’s ordinary activ-  

ities and are non-recurring of nature. Such costs  

and income include the cost related to significant  

restructuring of the cost base and processes as  

well as restructuring costs related to resignation of  

employees. Further special items include significant  

cost related to M&A activities, redundancy cost  

related to members of Group Management, impair-  

ment of assets and gains and losses regarding  

disposal of activities or subsidiaries.  

Special items are shown separately from the  

Group’s ordinary operations to facilitate a better  

understanding of the Group’s financial perfor-  

mance.  

IT development projects  

IT development projects are clearly specified and  

identifiable projects under development for internal  

and external use for which the technical feasibility  

of completing the development project has been  

demonstrated and resources are available within  

NNIT.  

Any development projects that do not meet the  

criteria for capitalization in the balance sheet are  

recognized as costs.  

Development costs meeting the criteria for capital-  

iztion are measured at cost less accumulated amor-  

tization and any impairment losses. Development  

Financial items  

Financial income and expenses comprise interest,  

realized and unrealized gains and losses from  

exchange rate adjustments, fair value adjustments  

on forward contracts and the cumulative value  

adjustment of these instruments transferred from  

the hedging reserve within equity.  

Interest income is recognized on an accrual basis  

according to the effective interest rate method.  

Tax  

Income tax comprises current tax and deferred  

tax for the year, and is recognized as follows: The  

ment under cost of goods sold, sale and marketing  

costs and administrative expenses respectively.  

Inventories  

Goods for resale are measured at the lower of cost  

and net realizable value.  

“held for sale”. Assets held for sale are not depre-  

ciated. Impairment losses arising on first classifi-  

cation as “held for sale” and gains and losses from  

the subsequent measurement is recognized in the  

income statement under the items they concern.  

On 22 June 2022 the Board of Directors announced  

its decision to divest its Hybrid Cloud Solutions busi-  

ness unit as well as select parts of its Cloud & Digital  

Solutions business unit to funds advised by Agilitas  

Private Equity LLP. The associated assets and liabil-  

ities have been evaluated at year end and found  

eligible for the carve out and presented as held for  

sale in the 2022 financial statements.  

asset or recognized as a separate asset, where  

there are likely future economic benefits for the  

Group and the value of the asset can be reliably  

measured.  

The depreciable amount of the assets is depreciated  

on a straight-line basis over the following estimated  

useful life periods:  

•

Other equipment: 3-10 years  

•

Leasehold improvements: 5-10 years  

•

Buildings: 10-50 years  

Major components of buildings which are expected  

to be replaced with regular intervals during the life  

of the building are treated as separated compo-  

nents of the building and are depreciated over the  

period until expected replacement.  

Asset residual values and useful life's are assessed  

and, where required, adjusted on each balance  

sheet date.  

Tangible assets are tested for impairment if  

there are indications of impairment. The carrying  

amount of an asset is written down to its recover-  

able amount if the carrying amount exceeds the  

estimated recoverable amount. The recoverable  

amount for the asset is determined as the higher  

of fair value less costs to sell and net present value  

of future net cash flows from continued use. If the  

recoverable amount of an individual asset cannot  

be determined, value in use is determined for the  

smallest group of assets for which it is possible to  

determine a recoverable amount. Impairment losses  

are recognized in the income statement under the  

relevant functional areas.  

Depreciation and gains or losses from disposal of  

tangible assets are recognized in the income state-  

Lease assets  

Lease assets are 'right-of-use assets' arising  

from a lease agreement. Lease assets are initially  

measured at cost consisting of the amount of the  

initial measurement of the lease liability, plus any  

lease payments made to the lessor at or before  

the commencement date less any lease incentives  

received and the initial estimate of refurbishment  

costs and any initial directs costs incurred by NNIT  

as the lessee.  

NNIT has three different types of leases:  

•

Rental of premises  

•

IT equipment  

•

Company cars  

The lease assets are depreciated on a straight-line  

basis over the lease term. The lease asset can be  

adjusted due to modifications to the lease agree-  

ment or reassessment of lease term.  

Payments associated with short-term leases and  

leases of low-value assets are recognized on a  

straight-line basis as an expense in profit or loss.  

Short-term leases are leases with a term of 12  

months or less. Low-value assets comprise IT-equip-  

ment and small items of office furniture with a value  

below DKK 100 thousand.  

Trade receivables  

Trade receivables are initially recognized at fair value  

and subsequently measured at amortized cost using  

the effective interest method, less allowance for  

doubtful trade receivables.  

Allowance for doubtful trade receivables is made  

using the expected credit loss model, which uses a  

lifetime expected loss allowance for all trade receiv-  

ables.  

The allowance is deducted from the carrying  

amount of trade receivables and the amount of the  

loss is recognized in the income statement under  

cost of goods sold.  

Equity  

Treasury shares  

Treasury shares are deducted from equity. Acqui-  

sition/disposal of treasury shares are recognized  

directly in equity.  

Other receivables and prepayments  

Current receivables  

Current receivables are measured at amortized cost  

less potential write-downs for impairment losses.  

Write-downs are based on individual assessments  

of each debtor.  

Prepayments  

Prepayments comprise costs incurred for the next  

financial year. These are usually prepayments for  

maintenance of hardware and software licenses.  

Dividend  

Dividend distribution to the shareholders of NNIT  

is recognized as a liability when dividends are  

declared. Proposed dividends are disclosed in the  

statement of changes in equity.  

Assets classified as held for sale  

Assets classified as held for sale comprise assets  

and liabilities for which it is highly likely that the  

value will be recovered through a sale within 12  

months rather than through continued use. Assets  

and liabilities classified as held for sale are meas-  

ured at the lower of the carrying amount and fair  

value less cost to sell at the classification date as  

Transition cost  

Transition cost consists of cost regarding transition  

projects, which has been capitalized until operation  

begins. The cost mainly relates to employee cost  

and will be amortized over the operation period.  

When calculating the net present value NNIT has  

used a discount rate corresponding to the incre-  

mental borrowing rate.  

The lease liability is remeasured when changes  

occur due to modifications to the contract (exten-  

sion, termination etc.) or indexation.  

statement. Actuarial gains and losses are recog-  

nized in other comprehensive income in the period  

in which they occur. Settlements are immediately  

recognized in the income statement.  

Jubilee benefits  

This comprises liabilities for the cost of employee  

anniversaries. The liability is based on a Net Present  

Value calculation. Gains and losses are recognized in  

the income statement.  

following which the RSU’s are released if certain  

vesting targets are met.  

NNIT has the obligation to deliver treasury shares,  

and accordingly, the arrangement is classified as an  

equity-settled arrangement and will be charged to  

the income statement over the three-year vesting  

period based on the market price at the grant date.  

During that period the shares are administered as  

part of the Company’s treasury shares. No dividends  

are paid on such shares and the participants are not  

able to exercise any voting rights during the lock-up  

period.  

Cash flow statement  

The cash flow statement is prepared using the  

indirect method. The cash flow statement shows  

the cash flows for the year, divided into operating,  

investing and financing activities, and how these  

cash flows have affected the cash position for  

the year.  

Cash flow from operating activities  

Cash flows from operating activities are calculated  

as the net profit for the year, adjusted for non-cash  

operating items. These include amortization, depre-  

ciation and write-downs, share-based compen-  

sation, change in net working capital and interest  

received and paid.  

Cash flow from investing activities  

Cash flows from investing activities comprise cash  

flows from the purchase and sale of intangible,  

tangible and financial non-current assets and the  

purchase and sale of securities. Further including  

aqusition of subsidaries.  

Cash flow from financing activities  

Cash flows from financing activities comprise cash  

flows from raising and repaying long-term debt,  

dividend payments to shareholders, instalments on  

lease liabilities and credit facilities.  

Cash and cash equivalents  

Cash and cash equivalents include cash and  

deposits.  

The cash flow statement cannot be derived from the  

annual report alone.  

Employee benefits  

Wages, salaries, social security contributions, paid  

annual leave and sick leave, bonuses and non-mon-  

etary benefits are recognized in the financial year in  

which the NNIT employee provided the related work  

service.  

Earn-out  

The earn-out for Excellis Health Solutions, SCALES,  

Valiance Partner, HGP Group and SL Controls  

is accrued over the period from the acquisition  

date until the payment is based on expected  

achieved performance conditioned on employment  

(projected unit credit method). The cost is recog-  

nized as wages and salaries under special items in  

the income statement.  

Pensions  

NNIT operates a number of defined-contribution  

pension plans. The costs of these pension plans are  

recognized in the financial year in which the relevant  

NNIT employees provided the related service.  

In some countries NNIT operates defined-benefit  

plans. Such liabilities are measured at the present  

value of the expected payments related to benefits  

accrued at the balance sheet date less the fair value  

of plan assets by applying the projected unit credit  

method. Plan assets, if any, are measured at fair  

value and offset against the defined benefit obli-  

gation in the balance sheet. Service costs and the  

interest component are recognized in the income  

Long-term incentive and retention programs  

NNIT has two different share-based incentive  

programs; long-term incentive program (LTIP) and  

retention program (RP)  

Long-term incentive program (LTIP)  

Group Management and the Vice President Group  

are part of a long-term share-based incentive  

program (LTIP).  

Under the program, NNIT allocates shares based on  

operating profit and free cash flow.  

LTIP  

The participants receive NNIT shares. The shares  

are subject to a lock-up period of four years.  

NNIT has the obligation to deliver treasury shares,  

and accordingly, the arrangement is classified as  

an equitysettled arrangement and will be charged  

to the income statement over the four-year vesting  

period based on the market price at the grant date.  

Retention program (RP)  

Key Vice Presidents are part of the retention  

program. This program comprises an accustomed  

self-investment and for each share invested they  

will be eligible to be granted up to one (1) RSU. The  

shares are subject to a lock up period of three years,  

Provisions  

Provisions are recognized when NNIT has a legal or  

constructive obligation arising from past events, it  

is probable that the Company will have to draw on  

its financial resources to settle the liability, and the  

liability can be reliably estimated.  

Provisions in the case of NNIT consist of provisions  

for losses on construction projects and refurbish-  

ment obligations.  

Provision for onerous contracts/projects  

This refers to projects that NNIT is obliged to  

complete and for which the total project costs  

exceed the total project income.  

Provision for refurbishment obligation  

This refers to refurbishment obligations regarding  

NNIT's lease agreements for rental of premises.  

Trade payables  

Trade payables are measured at amortized cost.  

Other current liabilities  

Other current liabilities comprise accrued expenses  

and VAT.  

1.5 Financial

definitions  

Operating profit margin  

=

Operating profit x 100  

Revenue  

Gross profit margin  

=

Gross profit x 100  

Revenue  

Return on assets  

=

Operating profit x 100  

Average operating assets  

Return on equity  

=

Net profit after tax x 100  

Average equity  

Dividend per share for the year  

=

Proposed dividend  

The number of outstanding shares  

Return on invested capital (ROIC)  

=

Net profit ex. financials x 100  

Average invested capital ¹  

EBITDA margin  

=

Operating profit + depreciation and amortization  

Revenue  

Solvency ratio  

=

Equity  

Total assets  

Effective tax rate  

=

Tax  

Profit before tax  

¹ꢀAverageꢁinvestedꢁcapitalꢁisꢁcalculatedꢁexcludingꢁcashꢁandꢁcashꢁequivalents,ꢁsharesꢁandꢁnon-interestꢁbearingꢁdebt.  

The above key ratios have been prepared in accordance with the guidelines issued by the Danish Finance  

Society.  

Non-IFRS financial measures  

In the Annual Report, NNIT discloses certain finan-  

cial measures of the Group's financial performance,  

financial position and cash flows that reflect adjust-  

ments to the most directly comparable measures  

calculated and presented in accordance with IFRS.  

These non-IFRS financial measures may not be  

defined and calculated by other companies in the  

same manner and may thus not be comparable with  

such measures.  

The non-IFRS financial measures presented in the  

Annual Report are:  

• Special items  

• Cash to earnings  

• Financial resources at the end of the year  

• Free cash flow  

• Organic growth  

related to members of Group Management, impair-  

ment of assets and gains and losses regarding  

disposal of activities or subsidiaries.  

Special items are shown separately from the  

Group’s ordinary operations to facilitate a better  

understanding of the Group’s financial perfor-  

mance.  

Cash to earnings  

Cash to earnings is defined as ‘free cash flow as a  

percentage of net profit’.  

Financial resources at the end of the year  

Financial resources at the end of the year are  

defined as the sum of cash and cash equivalents at  

the end of the year and undrawn committed credit  

facilities.  

Free cash flow  

NNIT defines free cash flow as ‘net cash generated  

from operating activities less net cash used in  

investing activities’.  

Organic growth  

Expansion of operations from own (internally gener-  

ated) resources, without growth from acquisition of  

other companies and without currency effect.  

Special items  

Special items comprise costs or income that cannot  

be attributed directly to the Group’s ordinary activ-  

ities and are non-recurring of nature. Such costs  

and income include the cost related to significant  

restructuring of the cost base and processes as  

well as restructuring costs related to resignation of  

employees. Further special items include significant  

cost related to M&A activities, redundancy cost  

1.6 Going

Concern  

Management has adopted the going concern basis  

for preparing these financial statements and has  

considered the Group and the Company’s cash flow,  

liquidity position and financial position in general,  

together with factors likely to affect development  

and performance.  

With the anticipated carve-out and divestment  

to Agilitas of the Infrastructure operations NNIT  

has triggered a repayment and refinancing of the  

Revolving Credit Facility. As the divestment of the  

Infrastructure operations will not reach closing as  

of 31 March 2023, NNIT is required, within 60 days  

from 31 March 2023 or such later date as may be  

agreed with the lendes,, to refinance the Revolving  

Credit Facility.  

NNITs credit draw as of 31 December 2022 is DKK  

857 million, which includes 3 months rolling facilities  

and utilization of bank overdraft. This credit draw  

has increased in Q1 2023 in connection with costs  

incurred in connection with the carve-out related  

to conducting the actual technical split and advisor  

costs, as well as repayment of COVID-19 aid pack-  

ages and earn-out payments to Excellis Health Solu-  

tions and SL Controls.  

Closing reached  

Current expectations indicate that NNIT will  

receive cash proceeds in connection with the  

transaction in excess of the amount due under the  

Revolving Credit Facility.  

Closing not reached  

In the unlikely event that closing will not take place,  

NNIT will refinance the current utilization of the  

Revolving Credit Facility within 60 days from 31  

March 2023 or such later date as may be agreed  

with the lenders.  

The need for future refinancing within 60 days in  

both scenarios indicates that a material uncertainty  

exists that may cast significant doubt on the entity’s  

ability to continue as a going concern.  

Management assesses that NNIT in both scenarios  

described above will be able to maintain adequate  

liquidity over the next 12 months and, given the  

underlying credit quality of the business, will be able  

to secure the necessary refinancing by negotiating  

new facilities with current lenders. After reviewing  

the current liquidity position, financial forecasts and  

potential risks regarding the committed funding  

facilities, it is management’s assessment that it  

is appropriate to adopt a going concern basis of  

preparation of the financial statements, and hence  

the financial statements have been prepared on a  

going concern basis.  

2.1 Segment

information  

NNIT completed a major organizational change to create three distinct business units as disclosed in company  

announcement from April 29 2022:  

•

Life Sciences Solutions (LSS)  

•

Cloud & Digital Solutions (CDS)  

•

Hybrid Cloud Solutions (HCS)  

In June it was decided to divest the infrastructure operations and focus on our core strengths in the Life  

Sciences Solutions and Cloud & Digital Solutions business units.  

Discontinued operations covers the HCS business unit as well as the SAP Basis and Cloud Native Solutions  

operations of the CDS business unit NNIT continues to delivers services and solutions through two business  

units, Life Sciences Solutions and Cloud & Digital Solutions (excluse SAP Basis and Cloud Native Solutions oper-  

ations), each responsible for delivering a number of services to customers.  

The Life Sciences Solutions business unit serves both international and Danish customers, with the main  

volume international. The unit focuses on delivering industry specific solutions catering to specific parts of the  

life Sciences value chain.  

The Cloud & Digital Solutions unit serves both Danish and international customers, with the main volume in  

Denmark. The unit focuses on consulting, developing and delivering the best digital solutions, enabling busi-  

nesscritical applications in the cloud and taking full advantage of the growing Microsoft ecosystem coupled  

with core services within custom application development and management consulting.  

It is the two above mentioned segments that are reportable segments to the chief operating decision makers  

each month. No reporting is made on assets. NNIT’s chief operating decision makers are Executive Manage-  

ment and the Board of Directors.  

Allocated to discontinued operations covers the SAP Basis and Cloud Native Solutions operations of the CDS  

business unit combined with some unallocated costs relative to LSS and CDS in connection to the carveout  

process, and furthermore the Gross profit includes a reclassification between Production cost and SG&A.  

Allocated to  

discontinued  

DKK million  

LSS  

CDS  

operations  

Total  

2022  

Revenue  

873  

853  

(226)  

1,500  

Production cost  

715  

716  

(82)  

1,349  

Gross profit  

158  

137  

(144)  

151  

Gross profit Margin  

18%  

16%  

10%  

Operating profit before special items ¹  

7

64  

(78)  

(7)  

Allocated to  

discontinued  

DKK million  

LSS  

CDS  

operations  

Total  

2021  

Revenue  

729  

848  

(208)  

1,369  

Production cost  

542  

725  

(25)  

1,242  

Gross profit  

187  

123  

(183)  

127  

Gross profit Margin  

26%  

15%  

9%  

Operating profit before special items ¹  

60  

46  

(121)  

(15)  

^1ꢀWhen deducting speciel items and net financials consolidated profit before income taxes is obtained.  

The Danish operations generated 40% of the revenue in the year ended December 31, 2022 (2021: 42%) and  

the United States of America 26% 2022 (2021:28%) based on the location of the customer.  

100% of tangible assets are placed in Denmark (2021:99.0%). For intangible assets 56% are placed in Denmark  

and 44% in the US for both 2022 and 2021.  

The Novo Nordisk Group generated 9% of the continuing operations revenue in the year ended December 31,  

2022 (2021:12%)  

2.2 Employee costs  

DKK million  

2022  

2021  

Employee costs comprise:  

Wages and salaries  

1,701  

1,764  

Share-based payments  

2

8

Pensions – defined contribution plans  

128  

119  

Pensions – defined benefit obligations (note 3.7)  

4

17  

Other employee costs  

144  

133  

Total employee costs  

1,979  

2,041  

Total employee costs, discontinued operations  

794  

738  

Total employee costs, continuing operations  

1,185  

1,303  

Included in the income statement under the following headings:  

Cost of goods sold  

906  

1,080  

Sales and marketing costs  

57  

63  

Administrative expenses  

23  

32  

Special items  

199  

128  

Total employee costs  

1,185  

1,303  

Average number of full-time employees, total  

3,169  

3,162  

Average number of full-time employees, continuing  

1,482  

Group Management's remuneration and share-based payment  

2022  

Other members  

Executive  

of Group  

DKK million  

Management  

Management  

Total  

Base salary  

7.6  

6.5  

14.1  

Cash Bonus (STIP and one-off)  

1.9  

1.1  

3.0  

One off bonus  

2.1  

0.4  

2.5  

Remuneration in connection with redundancy,  

resignations and release from duty to work  

-

0.6  

0.6  

Pension  

0.5  

0.8  

1.3  

Benefits  

0.4  

0.3  

0.7  

Group Management total  

12.5  

9.7  

22.2  

2021  

Other members  

Executive  

of Group  

DKK million  

Management  

Management  

Total  

Base salary  

7.3  

9.7  

17.0  

Cash Bonus (STIP and one-off)  

2.0  

1.7  

3.7  

Remuneration in connection with redundancy,  

resignations and release from duty to work  

15.9  

5.8  

21.7  

Pension  

1.0  

1.8  

2.8  

Benefits  

0.4  

0.6  

1.0  

Share based incentives ¹  

6.8  

0.8  

7.6  

Group Management total  

33.4  

20.4  

53.8  

¹ Includes the annually recognized expense on granted share-based and launch incentive programs, which are not released.  

Remuneration of Board of Directors and Group Management  

The current policy for the remuneration of the Board of Directors and Executive Management was adopted in  

2022 and sets out the general guidelines for the remuneration of the Group’s management. The guidelines for  

the remuneration of the Board of Directors and Executive Management are available on NNIT’s website.  

In addition to the disclosures provided in this note, more details on the remuneration of Executive Management  

and Directors are provided in the separate Remuneration report, which is not a part of the audited financial  

statements. The report is also available on NNIT’s website.  

Board of Directors remuneration  

DKK million  

2022  

2021  

Ordinary board member fee  

3.5  

3.5  

Audit Committee  

0.3  

0.3  

Remuneration Committee  

0.2  

0.2  

Total fee to Board of Directors  

4.0  

4.0  

The shares allocated to the members of Group Management that are fully vested, will be released to the indi-  

vidual participants subsequent to the approval of the Annual Report 2022 by the Board of Directors. Based on  

the share price at the end of 2022, the value of the released shares is as follows:  

Number of  

DKK million  

shares  

Market value  

Values at December 31, 2022 of shares to be released  

February 1, 2023:  

Pär Fors  

-

-

Carsten Ringius  

-

-

Pernille Fabricius  

6,094  

0.4  

Executive Management  

6,094  

0.4  

Other members of Group Management  

573  

-

Group Management total  

6,667  

0.4  

Please refer to note 5.1 for an overview of outstanding RSU’s.  

Short-term incentive program (STIP)  

Group Management and certain other employees participate in a STIP program, which entitles each participant  

to receive an annual performance-based cash bonus, linked to the achievement of a number of predefined  

functional and individual business targets. Performance is measured for each financial year and the cash-based  

incentives, if any, are paid after announcement of the annual report for the subsequent year.  

Retention Program (RP)  

RP is a program for Vice Presidents designed to secure and enhance a strong retention incentive.  

The program is based on a self-investment in NNIT shares by the participants which makes the Vice Presidents  

eligible to receive up to one (1) RSU for each share invested. The number of RSU's is based on performance for  

a three-year period measured on revenue growth, operating profit margin and individual Objective targets.  

Long-term incentive program (LTIP)  

LTIP is designed to promote the collective performance of Group Management and Vice Presidents to align the  

interests of executives and shareholders.  

The program is based on earnings including hedge gains/losses, before interest and tax compared to the  

targeted level. In addition, the realized free cash flow compared to the targeted level is taken into considera-  

tion. NNIT's Board of Directors approves the financial targets for the coming year, ensuring that the short-term  

targets are aligned with NNIT's long-term targets and strategy.  

The allocation under LTIP for the CEO cannot exceed the equivalent of ten months’ fixed base salary including  

pension contribution, and the allocation for the CFO cannot exceed the equivalent of eight months of such  

person's fixed base salary including pension contribution. The allocation for the other members of Group  

Management cannot exceed the equivalent of six months fixed base salary including pension contribution. A  

fixed and predefined number of shares will be allocated to Vice Presidents.  

2.3 Development costs  

DKK million  

2022  

2021  

Costs for development of new projects, not eligible for  

recognition in the balance sheet are charged immediately  

to the income statement:  

Cost of goods sold  

8

7

Total development costs  

8

7

Total development costs, discontinued operations  

-

-

Total development costs, continuing operations  

8

7

2.4 Amortization, depreciation and impairment losses  

DKK million  

2022  

2021  

Amortization  

29  

25  

Depreciation  

180  

194  

Impairment losses  

13  

56  

Total amortization, depreciation, and impairment losses  

222  

275  

Total amortization, depreciation, and impairment losses,  

discontinued operations  

154  

146  

Total amortization, depreciation, and impairment losses,  

continuing operations  

68  

129  

Amortization, depreciation and impairment losses are  

recognized in the income statement:  

Cost of goods sold  

51  

69  

Sales and marketing costs  

1

1

Administrative expenses  

2

3

Special items  

14  

56  

Total amortization, depreciation, and impairment losses  

68  

129  

2.5 Special items  

DKK million  

2022  

2021  

Special items relates to:  

Impairment of assets  

13  

56  

Redundancy cost related to Group Management  

-

25  

Employee benefit cost (contingent consideration agreement)  

56  

55  

Restructuring cost  

126  

65  

Cost regarding acquisition and disposal of operations  

83  

7

Total special items  

278  

208  

Total special items, discontinued operations  

-

-

Total special items, continuing operations  

278  

208  

If special items had been recognized in operating profit  

before special items, they would have been included in  

the following line items:  

– Cost of goods sold  

206  

173  

– Sales and marketing costs  

-

2

– Administrative expenses  

72  

33  

Total special items  

278  

208  

Impairment of asset comprise impairment of the Soeborg headquarter building and impairment of developed  

assets. Please refer to note 3.2.  

Redundancy cost related to Group Management in 2021 mainly relates to Per Kogut.  

Restructuring costs mainly comprise redundancies as part of moving offshore capabilities from China to Philip-  

pines.  

Cost regarding acqusition and disposal of operations mainly relates to the carve-out and divestment of infra-  

structure business.  

2.6 Income taxes  

DKK million  

2022  

2021  

Current tax  

(47)  

(3)  

Deferred tax  

12  

(22)  

Adjustments recognized for current tax of prior periods  

10  

(29)  

Adjustments recognized for deferred tax of prior periods  

(4)  

20  

Withholding tax not deductible  

-

-

Income taxes in the income statement  

(29)  

(34)  

Income taxes in the income statement, discontinued operations  

14  

33  

Income taxes in the income statement, continuing operations  

(43)  

(67)  

Computation of effective tax rate:  

Statutory corporate income tax rate in Denmark  

22.0%  

22.0%  

Deviation in foreign subsidiaries' tax rates compared to Danish tax  

rate (net)  

(0.2%)  

0.9%  

Adjustment of current and deferred tax regarding previous years  

(1.8%)  

3.3%  

Other adjustments to taxable income  

(6.9%)  

(1.3%)  

Effective tax rate  

13.1%  

24.9%  

Tax on other comprehensive income for the year  

3

8

Tax on other comprehensive income for the year relates to tax on exchange rate adjustments, deferred tax of  

cash flow hedges and deferred tax on share-based payments.  

DKK million  

2022  

2021  

Tax (payable)/receivable  

Tax (payable)/receivable at the beginning of the year  

45  

23  

Additions through business combinations  

1

-

Income tax paid during the year  

18  

39  

Tax paid related to previous years  

(21)  

(44)  

Withholding taxes paid during the year  

(1)  

1

Current tax on profit for the year  

33  

(3)  

Adjustments related to previous years  

(10)  

29  

Tax (payable)/receivable at the end of the year  

65  

45  

Tax (payable)/receivables, discontinued operations  

(22)  

Tax (payable)/receivables, continuing operations  

87  

Tax payable/receivables are recognized in  

the balance sheet as follows:  

Tax receivables  

113  

Tax payable  

(33)  

Tax on other comprehensive income  

7

Total tax  

87  

Net taxes paid in 2022 accounted to DKK 4 million and were paid as follows:  

DKK million  

China Czech

Republic  

Germany  

Denmark  

Great Britain  

Ireland  

Italy  

Philippines  

United States  

Total  

Income tax paid during the year  

3

2

3

2

1

2

1

1

3

18  

Tax paid related to previous years  

1

0

0

(31)  

1

0

0

0

8

(21)  

Withholding taxes paid during the year  

0

0

0

(1)  

0

0

0

0

0

(1)  

Total  

4

2

3

(30)  

2

2

1

1

11  

(4)  

Lease  

Intangible  

Tangible  

Current  

receivables  

Share based  

Cash flow  

DKK million  

assets  

assets  

assets  

and liabilities  

programs  

hedges  

Provisions  

Tax losses  

Total  

2022  

Deferred tax asset  

At the beginning of the year  

(27)  

40  

(30)  

10  

(1)  

(2)  

36  

-

26  

Adjustments related to previous years  

5

-

-

2

-

-

(3)  

-

4

Movements within the year  

(5)  

(7)  

(1)  

-

(5)  

6

(12)  

Movements in other comprehensive income  

-

-

-

-

-

2

(1)  

-

1

Transfered to taxes directly associated with assets and  

liabilities held for sale  

15  

(33)  

12  

-

(6)  

(12)  

At the end of the year  

(12)  

-

(19)  

12  

(1)  

-

21  

6

7

Lease  

Intangible  

Tangible  

Current  

receivables  

Share based  

Cash flow  

DKK million  

assets  

assets  

assets  

and liabilities  

programs  

hedges  

Provisions  

Tax losses  

Total  

2021  

Deferred tax asset  

At the beginning of the year  

(19)  

52  

(44)  

8

(3)  

1

45  

-

40  

Adjustments related to previous years  

(1)  

(8)  

6

-

-

-

(17)  

-

(20)  

Adjustments related to previous years booked on equity¹  

-

-

(10)  

(3)  

-

-

-

-

(13)  

Movements within the year  

(7)  

(4)  

18  

5

2

-

8

-

22  

Movements in other comprehensive income  

-

-

-

-

-

(3)  

-

-

(3)  

At the end of the year  

(27)  

40  

(30)  

10  

(1)  

(2)  

36  

-

26  

¹ꢀꢁAdjustmentsꢁrelatedꢁtoꢁpreviousꢁyearsꢁisꢁregardingꢁanꢁadjustmentꢁofꢁtheꢁopeningꢁbalanceꢁinꢁconnectionꢁwithꢁtheꢁimplementationꢁofꢁIFRSꢁ15ꢁandꢁIFRSꢁ16.ꢁTheꢁadjustmentꢁregardingꢁIFRSꢁ15ꢁisꢁregardingꢁprepaymentsꢁforꢁtransitionꢁcost.ꢁTheꢁadjustmentꢁregardingꢁIFRSꢁ16ꢁisꢁregardingꢁ  

the refurbishment obligation. Both were overstated.