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The Danish Operations Authority has conducted a compliance review of the annual report of NNIT A/S, as described in the December 2022 company announcement. After dialogue with NNIT, the Danish business authority said that the earnout payments related to the acquisition of Excellis Health Solutions should not be included in capitalized acquisition costs and goodwill, and that the earnings should be expensed as remuneration. made the final decision to confirm the Some are subject to the continued employment of selling shareholders during the accrual period.
As a result, NNIT is required to update the accounting treatment of earn-out payments from goodwill to special items in its annual report, as outlined below. A similar approach applies to recognizing earn-out payments for other acquisitions such as SCALES, Valiance Partner, HGP Group, SL Controls and prime4services.
Technical changes to historical accounting policies will not affect total cash flow or the planned sale of NNIT’s infrastructure operations business.
Impact on accumulated pre-tax income
Cumulative profit before provisional tax impact for the period 2017-2021 is approximately DKK 165 million, mainly due to an increase in special items. The future impact for 2022-2025 related to the earn-out payments related to the acquisition of Excellis Health Solutions and other acquired companies is estimated in the range of DKK 100-150 million, depending on performance, with a special Only items are incremented, no impact. About total cash flow.
NNIT A/S will publish supplemental/corrected information to the 2021 Annual Report, including comparative figures for 2020, as soon as possible.
NNIT A/S disagrees with this decision and believes it is based on the principle of strategic acquisitions in the Danish IT services industry and will appeal this decision to the Danish Commercial and Corporate Appeal Board. .
Contact us for more information
Kirsten Ringius
Executive Vice President & CFO
Phone: +45 3077 8888
carr@nnit.com
Media contact point
Tina Joanne Hinsbow
media relations manager
Phone: +45 3077 9578
tnjh@nnit.com
NNIT group We provide a wide range of IT and consulting services internationally.
In Denmark, where the group is headquartered, we are one of the leading IT companies, serving both private and public sector customers across all industries. Elsewhere in Europe, Asia and the United States, Life focuses exclusively on science sector companies.
We support your entire supply chain and help you optimize your internal processes, production, sales and customer experience.
We advise, build, operate and support digital transformation and enable our customers to realize the full potential of their organizations. Our role is to foster innovation and achieve our customers’ and our own goals. The NNIT Group consists of group company NNIT A/S and subsidiaries SCALES, Excellis Health Solutions and SL Controls. For more information, please visit www.nnit.com.
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