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Bittium Corporation Half Year Financial Report January-
Net sales and operating result grew in January-
Unless otherwise mentioned, the figures in brackets refer to the corresponding period in the previous year.
Summary April-
· The net sales increased by 6.8 percent year-on-year to
· The share of the product-based net sales grew to
· EBITDA was
· Operating profit was
· Cash flow from operating activities was
· Net cash flow was
· Result for the period was
GROUP (MEUR) 4-6/2020 4-6/2019
3 months 3 months
Change of net sales, % 6.8 % 28.2 %
EBITDA 5.6 6.8
EBITDA, % of net sales 22.3 % 29.0 %
OPERATING PROFIT / LOSS 2.7 5.2
Operating profit / loss, % of net sales 10.7 % 22.0 %
RESULT OF THE PERIOD FROM CONTINUING OPERATIONS 2.7 5.0
CASH AND OTHER LIQUID ASSETS 26.3 33.4
EQUITY RATIO (%) 71.8 % 71.7 %
EARNINGS PER SHARE (EUR) 0.076 0.141
Summary January-
·
The net sales increased by 28.7 percent year-on-year to
· The share of the product-based net sales was
· EBITDA was
· Operating profit was
· Cash flow from operating activities was
· Net cash flow was
· Result for the period was
GROUP (MEUR) 1-6/2020 1-6/2019
6 months 6 months
Change of net sales, % 28.7 % 16.8 %
EBITDA 8.4 4.7
EBITDA, % of net sales 19.7 % 14.3 %
OPERATING PROFIT / LOSS 2.9 1.7
Operating profit / loss, % of net sales 6.7 % 5.0 %
RESULT OF THE PERIOD FROM CONTINUING OPERATIONS 2.5 1.5
CASH AND OTHER LIQUID ASSETS 26.3 33.4
EQUITY RATIO (%) 71.8 % 71.7 %
EARNINGS PER SHARE (EUR) 0.071 0.042
Outlook for 2020
The world-wide new coronavirus (SARS-CoV-2) pandemic significantly affects the global economy and market situation. The prevailing uncertainties in the markets cause week visibility to the market situation.
Despite the delays in the business development in general and the significant increase of the risks and uncertainties, the effects of the pandemic have not significantly affected Bittium's business operations yet. However, the prolongation of the situation may affect Bittium's financial development negatively, which is currently difficult to evaluate.
Based on the current information the company sees no reason to change the financial outlook for 2020, published in the company's Financial Statement Bulletin 2019. The company monitors the development of the market situation constantly and if the outlook should weaken, the company may need to re-evaluate the situation.
Bittium expects that the net sales in 2020 will grow from the previous year (
More information about Bittium's market outlook is presented in the section "Market outlook" in this report.
More information about other uncertainties regarding the outlook is presented in this report in the section "Risks and uncertainties" and on the company's internet pages at www.bittium.com.
Bittium's CEO
The net sales in the second quarter of 2020 as well as in the whole first half of the year developed according to our plans well. The net sales in the second quarter grew by 6.8 percent year-on-year and in the whole first half by 28.7 percent. The increase in net sales was due to the growth in product sales, which accounted for more than 70 percent of net sales. The product sales include the sale of the tactical communication systems and products, secure Bittium Tough Mobile™ smartphones and Bittium Faros™ ECG devices.
Our significant customer projects and cooperation continued successfully despite the exceptional circumstances caused by the coronavirus pandemic. The development work of tactical communication system for Austrian Defense Forces continued according to our plans. The deliveries of tactical Bittium Tough SDR™ handheld radios to Finnish Defence Forces were started in April, and the deliveries of tactical Bittium Tough SDR™ vehicle radios are expected to start by the end of this year. The cooperation with Preventice, the leading provider of remote medical monitoring services in the US, continued as planned in the US cardiac market. The development of the sales channel for Bittium's Faros ECG products and related software also developed well outside the
The active negotiations with the State of the
During the first half of 2020 the sale of product development services decreased by 14 percent year-on-year. The decrease in the net sales was caused by the company's own significant large R&D projects that tie experts into internal product development. Also the restrictions due to the coronavirus pandemic have reflected acquiring new customers. As the demand for 5G technology development leveled off, we have continued to invest in new customers and application areas. As a new application area for product development services, we have introduced our own OEM application management and security solutions implemented on the
Measures to ensure the health and safety of staff and to ensure business continuity were started already in March as the coronavirus pandemic reached
Financial Performance in January-
Bittium's net sales in January-
The share of the product-based net sales increased to 70.7 percent and was
The share of the services-based net sales decreased to 29.3 percent and was
Operating profit was
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, MEUR 1-6 2020 1-6 2019
6 months 6 months
Net sales 42.5 33.1
Operating profit / loss 2.9 1.7
Financial income and expenses -0.3 -0.2
Result before tax 2.5 1.5
RESULT FOR THE PERIOD 2.5 1.5
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 2.5 1.5
Result for the period attributable to:
Equity holders of the parent 2.5 1.5
Total comprehensive income for the period attributable to:
Equity holders of the parent 2.5 1.5
Earnings per share from continuing operations, EUR 0.071 0.042
·
Cash flow from operating activities was
· Net cash flow during the period was
· Equity ratio was 71.8 percent (71.1 percent).
· Net gearing was -3.5 percent (-10.1 percent).
Half Year Figures
GROUP'S NET SALES AND OPERATING RESULT, MEUR 1H/20 2H/19 1H/19 2H/18
Net sales 42.5 42.2 33.1 34.5
Operating profit (loss) 2.9 4.7 1.7 3.7
Result before taxes 2.5 4.4 1.5 3.5
Result for the period 2.5 6.1 1.5 4.8
DISTRIBUTION OF NET SALES BY 1H/20 2H/19 1H/19 2H/18
PRODUCT AND SERVICES, MEUR aND
%
Product based net sales 30.1 30.8 18.6 19.0
70.7 % 73.1 % 56.1 % 54.9 %
Services based net sales 12.5 11.4 14.5 15.6
29.3 % 27.1 % 43.9 % 45.1 %
Other net sales
DISTRIBUTION OF NET SALES BY MARKET AREAS, 1H/20 2H/19 1H/19 2H/18
MEUR AND %
0.4 % 0.3 % 0.5 % 1.1 %
16.7 % 30.2 % 17.5 % 14.6 %
82.8 % 69.6 % 82.0 % 84.3 %
Quarterly Figures
GROUP'S NET SALES AND OPERATING RESULT, MEUR 2Q/20 1Q/20 4Q/19 3Q/19 2Q/19
Net sales 25.3 17.3 26.9 15.2 23.6
Operating profit (loss) 2.7 0.2 4.1 0.6 5.2
Result before taxes 2.7 -0.2 3.9 0.6 5.0
Result for the period 2.7 -0.2 5.6 0.6 5.0
DISTRIBUTION OF NET SALES BY 2Q/20 1Q/20 4Q/19 3Q/19 2Q/19
PRODUCT AND SERVICES, MEUR aND
%
Product based net sales 18.4 11.7 20.1 10.7 16.7
73.0 % 67.4 % 74.5 % 70.6 % 70.6 %
Services based net sales 6.8 5.6 6.8 4.6 7.0
27.0 % 32.6 % 25.5 % 29.4 % 29.4 %
Other net sales
DISTRIBUTION OF
BY MARKET AREAS, MEUR aND
%
0.4 % 0.4 % 0.3 % 0.3 % 0.5 %
America 2.2 4.9 5.0 7.7 5.4
8.8 % 28.3 % 18.7 % 50.5 % 22.7 %
90.8 % 71.3 % 81.0 % 49.3 % 76.8 %
Research and Development
Bittium continued to make significant investments to develop its own products and product platforms. In January-
The investments focused mainly on expanding the defense market targeted product portfolio in tactical communication and on the development of authorities' and special terminal products and their related software. In 2017, Bittium started to develop the new software-defined radio based Bittium Tough SDR™ product family that includes tactical Bittium Tough SDR handheld and Bittium Tough SDR vehicle radios. In addition, Bittium continued to develop secure smartphones and the related security software and medical technology products.
A significant part of the capitalized R&D investments is related to developing software defined radio based tactical communication handheld and vehicle radios, development of the secure smartphones and related security software, as well as development of medical technology products.
1-6 2020 1-6 2019
6 months 6 months
Total R&D investments 12.0 12.8
Capitalized R&D investments -7.4 -8.6
Depreciations and impairment of R&D investments 2.9 0.7
Cost impact on income statement 7.6 4.9
R&D investments, % of net sales 28.3 % 38.8 %
CAPITALIZED R&D INVESTMENTS IN BALANCE SHEET, MEUR 1-6 2020 1-6 2019
6 months 6 months
Balance sheet value in the beginning of the period 39.1 26.6
Additions during the period 7.4 8.6
Acquisitions of the business
Depreciations and impairment of R&D investments -2.9 -0.7
Balance sheet value at the end of the period 43.6 34.5
Business Development in January-
During the first half of 2020, the net sales grew by 28.7 percent and was
Cooperation with the Finnish Defence Forces continued strong during the first half. Despite of the exceptional circumstances caused by the coronavirus pandemic, the volume deliveries of the new Bittium Tough SDR hand held radios started in April. The development of Bittium Tough SDR vehicle radios is nearing completion, and the first deliveries to the customers are aimed at the end of this year. The development work of the radios has taken slightly longer than expected because of their unique frequency range and because they have been designed to operate under extreme conditions.
In February Bittium received a purchase order from Finnish Defence Forces to continue porting the European ESSOR (European Secure SOftware-defined Radio) programme's OC1 (Operational Capability 1) wideband waveform to the Bittium Tough SDR radios that will be delivered to the Finnish Defence Forces. A significant European player in the defense industry,
During the reporting period Bittium also announced to be a part of the iMUGS (integrated Modular Unmanned Ground System) project that is operating under the European Defence Industrial Development Programme (EDIDP). The iMUGS project is developing new capabilities for European defense forces based on autonomous systems. In the project, Bittium is responsible for the execution of resilient and networked data transfer, including both tactical communications and data transfer over commercial 4G and 5G cellular networks.
The demand for Bittium Tough Mobile™ smartphones remained stable in the beginning of the year. In June Bittium launched a new, even more secure variant of its smartphone: Bittium Tough Mobile™ 2 C. The unique new variant is based on the previously launched Bittium Tough Mobile 2 and is meant for CONFIDENTIAL level authority communication. The new smartphone variant is complemented with Bittium Secure Suite™ management software, enabling remote management of devices and applications, as well as encrypted IP-based data transfer.
The active negotiations with the State of the
Bittium and
Bittium and Virve Tuotteet ja Palvelut, a long-term operator of sales and maintenance of equipment suitable for Tetra networks, started a cooperation covering the resale of secure Bittium Tough Mobile 2 smartphones complemented with Bittium Secure Suite management software to critical communications organizations in
Demand for Bittium's medical technology products for remote monitoring and remote diagnostics remained steady. Based on the delivery agreement signed in 2018, during the first half Bittium continued to deliver tailored ECG measuring devices to the major US remote monitoring provider as planned.
In May Bittium BrainStatus™ product family received medical device approval in
In May Bittium launched an advanced remote monitoring service platform that utilizes wireless data transfer to enhance medical remote diagnostics services. Bittium MedicalSuite™ web-based service platform is mainly aimed at service providers to facilitate secure information sharing and workflow management between service providers, clinics and specialists. Currently the system supports cardiac monitoring services, but the same technology can be applied to any biosignal measurements, such as brain monitoring and home sleep apnea testing services. Data transfer is secured with Bittium SafeMove® VPN software, which uses strong encryption algorithms to guarantee the confidentiality, privacy, and integrity of communications.
The sales of product development services decreased in the beginning of the year. The decrease in the net sales was caused by the company's own significant large R&D projects that tie experts into internal product development. Also the restrictions due to the coronavirus pandemic have reflected acquiring new customers.
As the demand for 5G technology development leveled off, Bittium has continued to invest in new customers and application areas. The company also continued to deliver different kind of connectivity solutions to its customers and aims at growing the amount of product development projects and widening its customer base. As a new application area for product development services, Bittium joined
Other Significant Events during the Reporting Period
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Significant Events after the Reporting Period
There were no significant events after the reporting period.
Market Outlook and the Implications of the Coronavirus Pandemic to Bittium
Bittium's customers operate in various industries, each of them having their own industry specific factors driving the demand. A common factor creating demand among the whole customer base is the growing need for higher quality and secure data transfer. Due to the technology competences accrued over time and the long history in developing mobile communication solutions, Bittium is in a good position to offer customized solutions for its customers. Over thirty years of experience and extensive competence in measuring of biosignals also act as a basis for medical technology solutions.
In 2020, the global coronavirus pandemic significantly affects the global economy by weakening the visibility of the market situation. The general delay in business development caused by the pandemic and the significant increase in risks and uncertainties cause poor visibility into the market situation. Bittium's business sales cycles are long by their nature, and so far, the negative impacts caused by the pandemic have not significantly affected Bittium's business operations yet. However, the outlook towards the end of the year includes significant uncertainties.
The factors affecting the demand for Bittium's products and services and the effects of the coronavirus pandemic on them are described below:
Defense and Public Safety Market
· In the defense sector's tactical communication market the governments' defense forces and other authorities need networks that troops, who are more and more constantly on the move, can use to transfer growing amounts of data securely. This creates demand for Bittium Tactical Wireless IP Network (
· The financial difficulties caused by the coronavirus pandemic may affect the budgets of public finances such as states and public authorities and may require postponing of procurement. This may delay receiving new orders. Especially in the defense and authorities markets testing and piloting of products and systems are typical phases before receiving orders of larger entities. Current circumstances may postpone the materialization of some orders from their planned schedule. In addition, due to the travelling restrictions, the acceptance tests may need to be rescheduled, which may affect the final product acceptances and thereby the actual product deliveries. The coronavirus pandemic may also somewhat affect the availability of some components used in the products, which may affect the company's capability to deliver products to its customers.
· The use of LTE technology, smartphones, and applications continue to increase in special verticals such as public safety creating demand for Bittium Tough Mobile secure LTE smartphone and other customized special terminals based on Bittium's own product platform. The awareness of mobile security risks is growing and the interest towards secure mobile devices is increasing. The implementation of LTE-based devices in Public Safety markets has been slower than expected because of the delay in the device functionalities required by the authorities and because of the slow progress of the market. The sales of the secure terminal products are expected to develop moderately according to the nature of public safety markets.
· The smartphone sales process often involves testing and piloting systems and equipment, possibly integrating third-party technologies, and possible local regulatory approvals, which are typically long-lasting. Exceptional circumstances due to the coronavirus pandemic have a significant impact on the progress of projects, which slows down the completion of larger transactions.
· Using public network connections in portable devices is increasing also in demanding professional use, such as in the public sector. This creates requirements for network connections to be easy to use and secure. The products in the Bittium SafeMove product family enable the ease of use of the devices and security in demanding use. Demand for the Bittium SafeMove product family has not been affected by the coronavirus pandemic.
Telecommunication and Digitalization
· In the mobile telecommunications, the demand for 5G technology development work has stabilized and the implementation of 5G is accelerating in pace. Investments in developing new features continue and the importance of software development in the 5G network development expands. This creates demand for Bittium's R&D services. There is a wide range of frequencies allocated for the 5G technology thus creating the need to develop multiple products to cover the market and creating demand for R&D services for development of product variants. Also the development of new devices utilizing 5G technology increases the demand for Bittium's services.
· As the digitalization evolves, the secure IoT (Internet of Things) has become a significant development area in almost every industry. The increasing need of companies to digitalize their operations, collect data wirelessly, and transfer it to the internet and cloud services generate need for Bittium's services and customized solutions. The new radio systems customized to IoT are being used all over the world, and the amount of digitalized devices increases continuously. Along with the 5G technology being used, there will also be new features in the IoT that enable i.e. remote control of machines. Therefore the integration of different systems and technologies play an important role in enabling the complete digitalization service. There are several learning systems and devices under development that use different kinds of artificial intelligence (AI) technologies to ease and speed up the processing of large data amounts.
· Changes in the digitalization of the automotive industry and new business models and the automation of automotive operations create need for technological development. Most significant technology trends such as intelligent mobility, self-driving cars, electric cars and connectivity are guiding need for innovative software development. The share of software in cars is increasing in speed and software is becoming a major enabler and a differentiator. The use of Android™ Automotive operating system in the In-Vehicle Infotainment (IVI) systems is strongly entering the market. Several carmakers have announced the launch of cars with
· The coronavirus pandemic has not significantly affected the overall development of the telecommunications market or digitalization. Travel and other restrictions due to the pandemic have somewhat slowed down the progress of projects and gaining new customers.
· Possible illnesses of own personnel due to the coronavirus could have a significant impact on Bittium's business, especially with regard to product development services. The company began taking measures to ensure the health and safety of its personnel and to ensure business continuity as soon as the coronavirus pandemic reached
Medical ECG and EEG Remote Monitoring Market
· The medical technology market is undergoing significant developments in patient care, especially outside hospitals. There is an increasing focus on the prevention of diseases and health problems through early diagnosis and the repatriation of patients at an earlier stage in order to reduce hospital and treatment days. These actions significantly increase efficiency in health care processes and lower costs.
· A perquisite for early repatriation is the enabling of accurate and precise follow-up and measurement in home conditions through remote monitoring. Remote monitoring and remote diagnostics also enable specialist diagnoses regardless of time and place. Also evolving artificial intelligence-based algorithms are increasing to support physicians in making diagnoses. Remote monitoring and remote diagnostics make it possible and faster to obtain more accurate diagnoses, which, in turn, speeds up the start of the right kind of treatment. The market change will also enable several new providers to join the overall care service chain, offering greater accessibility to medicine for the clientele, without compromising the quality of specialist services in areas such as cardiology and neurophysiology.
· For remote monitoring and remote diagnostics Bittium provides its Bittium Faros product family for remote heart monitoring and Bittium BrainStatus for measuring the electrical activity of the brain, as well as different kind of software for diagnostics.
· As the coronavirus pandemic spread the number of non-emergency patients going to treatments and tests to healthcare providers decreased. Several hospitals and medical care facilities have postponed their non-emergency tests and examinations and focused on the treatment of the pandemic patients as well as on actions preventing the virus from spreading. However, several countries have already returned to normal treatment and research, and emergency measures due to the coronavirus in hospitals and health care facilities have been discontinued. In a long term the pandemic will accelerate the use of remote services in hospitals and medical care facilities, and thus creates positive development on the demand of the remote monitoring products and services.
Risks and Uncertainties
Bittium has identified a number of business, market and finance related risk factors and uncertainties that can affect the level of sales and profits.
The coronavirus pandemic has caused fast changes in the company's operating environment. The company management has been actively following and anticipating the development of the pandemic, and taken measures to prevent and remedy the impacts of the pandemic. It is impossible to estimate the length of the situation or its impacts on business operations and financial results.
Market Risks
The global economic uncertainty may affect the demand for Bittium's services, solutions, and products and provide pressure on e.g. pricing. In the short term such uncertainty may affect, in particular, the utilization and chargeability levels and average hourly prices of R&D services. Growing political uncertainty may also affect the demand for Bittium's services, solutions, and products and the price competitiveness in the different geographical areas. Bittium is also increasingly exposed to legal, economic, political and regulatory risks related to the countries in which its suppliers and other cooperation partners are located. Such risks may result in delays in deliveries or that there will be no orders in the forecast quantities, currency losses, elevated costs, or litigations and related costs. In particular, these aforementioned risks apply to Bittium currently in
As Bittium's customer base includes, among others, companies operating in the field of telecommunication, defense and other authorities, as well as companies delivering products to them, and companies operating in the healthcare sector, the company is exposed to market changes in these industries.
A significant part of Bittium's net sales accumulates from selling products and R&D services to defense and other authorities, as well as companies delivering products to them. Deviation in anticipated business development with such customer concentrations may translate as a significant deviation in Bittium's outlook, both in terms of net sales and operating result, during the ongoing financial period and thereafter.
Bittium seeks to expand its customer base on a longer term and reduce dependence on individual companies and hence the company would thereby be mainly affected by the general business climate in the industries of the companies belonging to Bittium's customer base instead of the development of individual customer relationships. The more specific market outlook has been presented in this report in the "Market outlook" section.
Business Related Risks
Bittium's operative business risks are mainly related to following items: uncertainties and short visibility on customers' product program decisions, their make or buy decisions and on the other hand, their decisions to continue, downsize or terminate current product programs, execution and management of large customer projects, ramping up and down project resources, availability of personnel in labor markets, accessibility on commercially acceptable terms and on the other hand successful utilization of the most important technologies and components, competitive situation and potential delays in the markets, timely closing of customer and supplier contracts with reasonable commercial terms, delays in R&D projects, realization of expected return on capitalized R&D investments, obsolescence of inventories and technology risks in product development causing higher than planned R&D costs, and risks related to the ramp-up of product manufacturing. Revenues expected to come from either existing or new products and customers include normal timing risks. Bittium has certain significant customer projects and deviation in their expected continuation could also result significant deviations in the company's outlook. In addition, there are typical industry warranty and liability risks involved in selling Bittium's services, solutions and products.
Bittium's product delivery business model faces such risks as high dependency on actual product volumes, timing risks and potential delays in the markets. The above-mentioned risks may manifest themselves as lower amounts of products delivered or higher costs of production, and ultimately, as lower profit. Bringing Bittium's products to international defense and other authorities markets may take longer than anticipated because the projects are typically long and the purchasing programs are prepared in the lead of national governments and within the available financing. Once a supplier has been selected, product deliveries are typically executed over several years.
Some of Bittium's businesses operate in industries that are heavily reliant on patent protection and therefore face risks related to management of intellectual property rights, on the one hand related to accessibility on commercially acceptable terms of certain technologies in the Bittium's products and services, and on the other hand related to an ability to protect technologies that Bittium develops or licenses from others from claims that third parties' intellectual property rights are infringed. Additionally, parties outside of the industries operate actively in order to protect and commercialize their patents and therefore in their part increase the risks related to the management of intellectual property rights. At worst, claims that third parties' intellectual property rights are infringed, could lead to substantial liabilities for damages. In addition, the progress of the customer projects and delivery capability may also be affected by potential challenges in global accessibility of key technologies and components on commercially acceptable terms, as well as by the acceptance of the necessary export licenses. The company changed its name to
Financing Risks
Global economic uncertainty may lead to payment delays, increase the risk for credit losses and weaken the availability and terms of financing. To fund its operations, Bittium relies mainly on income from its operative business and may from time to time seek additional financing from selected financial institutions. In
Statement of Financial Position and Financing
The figures presented in the statement of financial position of
Non-current assets 83.6 80.5
Current assets 78.7 73.8
Total assets 162.3 154.2
Share capital 12.9 12.9
Other capital 101.9 99.4
Total equity 114.9 112.3
Non-current liabilities 21.8 22.1
Current liabilities 25.6 19.9
Total equity and liabilities 162.3 154.2
Cash flow of the review period 1-6/2020 1-12/2019
:
+ profit of the period +/- 8.7 14.3
Adjustment of accrual basis
items
+/- Change in net working -8.0 -4.2
capital
- interest, taxes and -0.4 -0.4
dividends
= net cash from operating 0.3 9.6
activities
- net cash from investing -8.4 -18.6
activities
- net cash from financing -0.7 13.2
activities
= net change in cash and cash -8.8 4.3
equivalents
The amount of gross investments in the period under review was
The Group's liquidity remained good in the first half of the year despite the uncertainty caused by the coronavirus pandemic. Securing cash flow has not required any special adjustment measures and no significant changes have been identified in the credit risks of trade receivables.
Cash and other liquid assets at the end of the reporting period were
Bittium has a
Bittium follows a hedging strategy that has an objective to ensure the business margins in changing market circumstances by minimizing the influence of exchange rates. According to the hedging strategy principles, the net position in the currency is hedged when it exceeds the euro limit defined in the hedging strategy. The net position is determined on the basis of accounts receivable, accounts payable, order book, and budgeted net currency cash flow.
Personnel
The Bittium group employed an average of 666 people in January-
Flagging Notifications
There were no changes in the ownership during the period under review that would have caused flagging notifications which are obligations for disclosure in accordance with Chapter 2, section 9 of the Securities Market Act.
Notifications of Managers' Transactions
Decisions of the Annual General Meeting of
Bittium's Annual General Meeting was held on
The Annual General Meeting adopted the financial statements for the financial year 2019, discharged the company's management from liability and resolved to support the remuneration policy for governing bodies.
Use of the Profits Shown on the Balance Sheet and Authorizing the Board of Directors to Decide on Distribution of Dividend
The Annual General Meeting decided in accordance with the proposal of the Board of Directors that no dividend will be distributed by the General Meeting and to authorize the Board of Directors to decide at a later stage and in its discretion on dividend distribution not exceeding the aggregate maximum amount of
Election and remuneration of the Members of the Board of Directors
The Annual General Meeting decided that the Board of Directors shall comprise six (6) members. Ms.
At its assembly meeting held on
The following monthly remuneration shall be paid to the members of the Board of Directors: to the chairman of the Board of Directors
Election and Remuneration of the Auditor
Authorizing the Board of Directors to Decide on the Repurchase of the Company's own Shares
The General Meeting authorized the Board of Directors to decide on the repurchase of the Company's own shares as follows.
The amount of own shares to be repurchased shall not exceed 3,500,000 shares, which corresponds to approximately 9.81 percent of all of the shares in the company. Only the unrestricted equity of the company can be used to repurchase own shares on the basis of the authorization.
Own shares can be repurchased at a price formed in public trading on the date of the repurchase or otherwise at a price formed on the market.
The Board of Directors decides how own shares will be repurchased. Own shares can be repurchased using, inter alia, derivatives. Own shares can be repurchased otherwise than in proportion to the shareholdings of the shareholders (directed repurchase).
The authorization canceled the authorization given by the General Meeting on
The authorization is effective until
Authorizing the Board of Directors to Decide on the Issuance of Shares as well as the Issuance of Special Rights Entitling to Shares
The General Meeting authorized the Board of Directors to decide on the issuance of shares and special rights entitling to shares referred to in Chapter 10 Section 1 of the Companies Act as follows.
The amount of shares to be issued shall not exceed 3,500,000 shares, which corresponds to approximately 9.81 percent of all of the shares in the company.
The Board of Directors decides on all the conditions of the issuance of shares and of special rights entitling to shares. The authorization concerns both the issuance of new shares as well as the transfer of treasury shares. The issuance of shares and of special rights entitling to shares may be carried out in deviation from the shareholders' pre-emptive rights (directed issue).
The authorization canceled the authorization given by the General Meeting on
The authorization is effective until
Annual Report, Sustainability Report, Corporate Governance Statement and Salary and Remuneration Report 2019, and Remuneration Policy 2020
On
The reports are available at the company's internet pages at https://www.bittium.com both in Finnish and in English. The Annual Report and Sustainability Report are available also at https://annualreport.bittium.com.
Invitation to a Press Conference
Bittium will hold a webcast regarding the Half Year Financial Report 2020 for media, analysts and institutional investors on
Link to the Finnish webcast: https://bittium.videosync.fi/2020-q2-tulokset
Link to the English webcast: https://bittium.videosync.fi/2020-q2-results
Recordings of the both webcasts and the presentation will be available after the conference on Bittium's website at www.bittium.com/investors.
Oulu,
The Board of Directors
Further Information:
CEO
Tel. +358 40 344 5466
CFO
Tel. +358 40 344 2229
Distribution:
Nasdaq
Major media
Bittium Corporation Condensed Financial Statements and Notes January -
(unaudited)
The Half-year Financial Report has been prepared in accordance with IAS 34 Interim Financial Reporting.
CONSOLIDATED STATEMENT OF 1-6/2020 1-6/2019 1-12/2019
COMPREHENSIVE INCOME (MEUR) 6 months 6 months 12 months
Continuing operations
NET SALES 42.5 33.1 75.2
Other operating income 0.3 0.4 0.9
Work performed by the undertaking 0.1 0.1 0.2
for its own purpose and capitalized
Raw materials -11.2 -6.1 -17.1
Personnel expenses -17.2 -16.1 -31.5
Depreciation -5.5 -3.0 -8.0
Other operating expenses -6.1 -6.7 -13.4
Share of profits in associated 0.0 0.1 0.1
companies
OPERATING PROFIT (LOSS) 2.9 1.7 6.3
Financial income and expenses -0.3 -0.2 -0.4
PROFIT BEFORE TAX 2.5 1.5 5.9
Income tax 0.0 0.0 1.7
PROFIT FOR THE PERIOD FROM 2.5 1.5 7.6
CONTINUING OPERATIONS
Discontinued operations
Profit for the year from
discontinued operations
PROFIT FOR THE PERIOD 2.5 1.5 7.6
Other comprehensive income:
Items that may be reclassified
subsequently to the statement of
income
Exchange differences on 0.0 0.0 0.0
translating foreign operations
Other comprehensive income for the 0.0 0.0 0.0
period total
TOTAL COMPREHENSIVE INCOME FOR THE 2.5 1.5 7.7
PERIOD
Profit for the year attributable to
Equity holders of the parent 2.5 1.5 7.6
Total comprehensive income for the
period attributable to
Equity holders of the parent 2.5 1.5 7.7
Earnings per share from continuing
operations, EUR
Basic earnings per share 0.071 0.042 0.214
Diluted earnings per share 0.071 0.042 0.214
Earnings per share from
discontinued operations, EUR
Basic earnings per share
Diluted earnings per share
Earnings per share from continuing
and discontinued operations, EUR
Basic earnings per share 0.071 0.042 0.214
Diluted earnings per share 0.071 0.042 0.214
Average number of shares, 1000 pcs 35 693 35 693 35 693
Average number of shares, diluted, 35 693 35 693 35 693
1000 pcs
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION (MEUR)
ASSETS
Non-current assets
Property, plant and 23.0 24.6 24.2
equipment
Intangible assets 46.3 37.3 41.8
Other financial assets 1.6 1.8 1.8
Other non-current 1.3 1.4 1.4
receivables
Deferred tax assets 5.5 3.7 5.5
Non-current assets total 83.6 74.6 80.5
Current assets
Inventories 21.4 17.7 18.2
Trade and other receivables 30.9 24.5 20.4
Financial assets at fair 5.6 5.7 5.7
value through profit or loss
Cash and short term deposits 20.7 27.8 29.5
Current assets total 78.7 75.7 73.8
TOTAL ASSETS 162.3 150.3 154.2
EQUITY AND LIABILITIES
Equity attributable to equity
holders of the parent
Share capital 12.9 12.9 12.9
Invested non-restricted 26.0 26.0 26.0
equity fund
Translation difference 1.1 1.1 1.1
Retained earnings 74.9 66.2 72.3
Total equity 114.9 106.2 112.3
Non-current liabilities
Deferred tax liabilities 0.3 0.4 0.3
Provisions
Interest-bearing liabilities 21.2 21.5 21.4
Other non-current 0.3 0.4 0.4
liabilities
Advances received 0.1
Non-current liabilities total 21.8 22.3 22.1
Current liabilities
Trade and other payables 22.3 18.9 16.9
Financial liabilities at
fair value through profit or
loss
Provisions 2.2 1.7 1.8
Interest-bearing loans and 1.2 1.2 1.2
borrowings
Current liabilities total 25.6 21.8 19.9
Total liabilities 47.4 44.1 41.9
TOTAL EQUITY AND LIABILITIES 162.3 150.3 154.2
CONSOLIDATED STATEMENT OF CASH FLOWS (MEUR) 1-6/2020 1-6/2019 1-12/2019
6 months 6 months 12 months
CASH FLOW FROM OPERATING ACTIVITIES
Profit for the year from continuing operations 2.5 1.5 7.6
Profit for the year from discontinued operations
Adjustment of accrual basis items 6.1 3.2 6.7
Change in net working capital -8.0 -5.7 -4.2
Interest paid on operating activities -0.4 -0.5 -0.7
Interest received from operating activities 0.1 0.3 0.4
Income taxes paid -0.0 -0.0 -0.0
NET CASH FROM OPERATING ACTIVITIES 0.3 -1.2 9.6
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment -0.4 -1.2 -2.3
Purchase of intangible assets -8.0 -8.8 -16.1
Purchase of investments/associated companies -0.0 -0.3 -0.4
Sale of investments/associated companies 0.0 0.1 0.2
Sale of property, plant and equipment 0.0
Sale of intangible assets 0.0 0.0 0.0
NET CASH FROM INVESTING ACTIVITIES -8.4 -10.1 -18.6
CASH FLOW FROM FINANCING ACTIVITIES
Borrowings 20.0 20.0
Repayment of borrowing
Payment of finance liabilities -0.7 -0.7 -1.4
Dividend paid -5.4 -5.4
NET CASH FROM FINANCING ACTIVITIES -0.7 13.9 13.2
NET CHANGE IN CASH AND CASH EQUIVALENTS -8.8 2.6 4.3
Cash and cash equivalents at beginning of period 35.2 30.9 30.9
Cash and cash equivalents at end of period 26.3 33.4 35.2
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (MEUR)
A = Share capital
B = Invested non-restricted equity fund
C = Translation difference
D = Retained earnings
E = Non-controlling interests
F = Total equity
A B C D E F
Shareholders equity on Jan. 12.9 26.0 1.1 70.1 110.0
1, 2019
Comprehensive income for the
period
Profit/loss for the period 1.5 1.5
Exchange differences on 0.0 0.0
translating foreign
operations
Total comprehensive income 0.0 1.5 1.5
for the period
Transactions between the
shareholders
Distribution of dividends -5.4 -5.4
Total transactions between -5.4 -5.4
the shareholders
Other changes -0.0 -0.0
Shareholders equity on June 12.9 26.0 1.1 66.2 106.2
30, 2019
A B C D E F
Shareholders equity on Jan. 12.9 26.0 1.1 72.3 112.3
1, 2020
Comprehensive income for the
period
Profit/loss for the period 2.5 2.5
Exchange differences on 0.0 0.0
translating foreign
operations
Total comprehensive income 0.0 2.5 2.5
for the period
Transactions between the
shareholders
Distribution of dividends
Share-related compensation 0.0 0.0
Total transactions between 0.0 0.0
the shareholders
Other changes -0.0 -0.0
Shareholders equity on June 12.9 26.0 1.1 74.9 114.9
30, 2020
NOTES TO THE HALF YEAR FINANCIAL REPORTING
ACCOUNTING PRINCIPLES FOR THE HALF YEAR FINANCIAL REPORTING:
The Half Year Financial Report has been prepared in accordance with IAS 34 Interim Financial Reporting.
ALTERNATIVE PERFORMANCE MEASURES
In this report, Bittium uses alternative performance measures in accordance with the guidelines issued by the
EBITDA = Operating profit + depreciations
Net gearing % = Interest-bearing liabilities - cash and deposits and short-term investments x 100
Total equity
Equity per share = Equity attributable to equity holders of the parent
Share issue adjusted number of the shares at the end of the period
SEGMENT-INFORMATION (MEUR)
NET SALES OF GEOGRAPHICAL AREAS (MEUR) 1-6/2020 1-6/2019 1-12/2019
6 months 6 months 12 months
Net sales
Americas 7.1 5.8 18,5
Net sales total 42.5 33.1 75.2
RELATED PARTY TRANSACTIONS 1-6/2020 1-6/2019 1-12/2019
6 months 6 months 12 months
Employee benefits for key management and stock 0.8 0.6 1.5
options expenses total. continuing operations
New Share-Based Incentive Scheme for the Management of
SHARE-BASED REMUNARATION OF THE MANAGEMENT
Form of the reward Shares
Grant date
Total amount of the shares at the most 110 000
Share price at the grant date, EUR 5.63
Total expenses of the reward at the most, EUR million 0.6
Execution In shares
CONSOLIDATED 4-6/202 1-3/202 10 7-9/201 4-6/201
STATEMENT OF 0 0 -12/201 9 9
COMPREHENSIVE 3 month 3 month 9 3 month 3 month
INCOME BY QUARTER s s 3 month s s
(MEUR) s
Continuing
operations
Other operating 0.2 0.1 0.3 0.3 0.2
income
Work performed by 0.1 0.0 0.0 0.1 0.1
the undertaking
for its own
purpose and
capitalized
Raw materials -8.0 -3.3 -7.6 -3.4 -5.3
Personnel -8.8 -8.4 -8.2 -7.3 -8.2
expenses
Depreciation -3.0 -2.6 -2.8 -2.2 -1.6
Other operating -3.1 -3.0 -4.6 -2.1 -3.5
expenses
Share of profits 0.0 0.0 0.0 0.0 0.0
in associated
companies
OPERATING PROFIT 2.7 0.2 4.1 0.6 5.2
(LOSS)
Financial income 0.0 -0.3 -0.2 -0.0 -0.2
and expenses
PROFIT BEFORE TAX 2.7 -0.2 3.9 0.6 5.0
Income tax 0.0 0.0 1.7 0.0 0.0
PROFIT FOR THE 2.7 -0.2 5.6 0.6 5.0
PERIOD FROM
CONTINUING
OPERATIONS
Discontinued
operations
Profit for the
period from
discontinued
operations
PROFIT FOR THE 2.7 -0.2 5.6 0.6 5.0
PERIOD
Other -0.1 0.1 -0.1 0.1 0.0
comprehensive
income
TOTAL 2.6 -0.1 5.5 0.7 5.0
COMPREHENSIVE
INCOME FOR THE
PERIOD
Profit for the
period
attributable
to:
Equity holders 2.7 -0.2 5.6 0.6 5.0
of the parent
Total
comprehensive
income for the
period
attributable to:
Equity holders 2.6 -0.1 5.5 0.7 5.0
of the parent
CONSOLIDATED STATEMENT 4-6/2020 1-3/2020 10-12/2019 7-9/2019 4-6/2019
OF CASH FLOWS BY 3 months 3 months 3 months 3 months 3 months
QUARTER
Net cash from operating -0.8 1.2 9.8 1.1 4.5
activities
Net cash from investing -3.9 -4.5 -4.4 -4.1 -5.6
activities
Net cash from financing -0.4 -0.4 -0.4 -0.3 14.3
activities
Net change in cash and -5.1 -3.7 5.0 -3.3 13.2
cash equivalents
FINANCIAL PERFORMANCE RELATED 1-6/2020 1-6/2019 1-12/2019
RATIOS 6 months 6 months 12 months
STATEMENT OF COMPREHENSIVE
INCOME (MEUR)
Net sales 42.5 33.1 75.2
Operating profit (loss) 2.9 1.7 6.3
Operating profit (loss), % 6.7 5.0 8.4
of net sales
Profit before taxes 2.5 1.5 5.9
Profit before taxes, % of 5.9 4.5 7.9
net sales
Profit for the period from 2.5 1.5 7.6
continuing operations
PROFITABILITY AND OTHER KEY
FIGURES
Interest-bearing net -4.0 -10.7 -12.6
liabilities, (MEUR)
Net gearing, % -3.5 -10.1 -11.2
Equity ratio, % 71.8 71.7 73.4
Gross investments, (MEUR) 9.0 12.2 21.3
Average personnel during the 666 674 665
period, continuing operations
Personnel at the period end, 680 680 655
continuing operations
AMOUNT OF SHARE ISSUE
ADJUSTMENT (1.000 pcs)
At the end of period 35 693 35 693 35 693
Average for the period 35 693 35 693 35 693
Average for the period 35 693 35 693 35 693
diluted with stock
options
STOCK-RELATED FINANCIAL RATIOS 1-6/2020 1-6/2019 1-12/2019
(EUR) 6 months 6 months 12 months
Earnings per share from
continuing operations. EUR
Basic earnings per share 0.071 0.042 0.214
Diluted earnings per share 0.071 0.042 0.214
Earnings per share from
discontinued operations. EUR
Basic earnings per share
Diluted earnings per share
Earnings per share from
continuing and discontinued
operations. EUR
Basic earnings per share 0.071 0.042 0.214
Diluted earnings per share 0.071 0.042 0.214
Equity *) per share 3,22 2.97 3.15
*) Equity attributable to equity
holders of the parent
MARKET VALUES OF SHARES (EUR) 1-6/2020 1-6/2019 1-12/2019
6 months 6 months 12 months
Highest 7.47 8.03 8.03
Lowest 3.40 6.08 5.91
Average 5.40 6.98 6.70
At the end of period 6.22 6.24 6.50
Market value of the stock, (MEUR) 222.0 222.7 232.0
Trading value of shares, (MEUR) 63.5 31.0 51.5
Number of shares traded, (1.000 pcs) 11 750 4 448 7 689
Related to average number of shares % 32.9 12.5 21.5
SECURITIES AND
CONTINGENT LIABILITIES
(MEUR)
AGAINST OWN
LIABILITIES
Floating charges
Mortgages are pledged
for liabilities
totaled
Guarantees 0.1 0.1 0.1
Rental liabilities
Falling due in the 0.1 0.0 0,0
next year
Falling due after
one year
Other contractual
liabilities
Falling due in the 0.9 2.4 1.9
next year
Falling due after 1.1 1.6 0.8
one year
Material purchase 12.3 9.8 16.0
commitments
NOMINAL VALUE OF
CURRENCY DERIVATIVES
(MEUR)
Foreign exchange
forward contracts
Market value 0.0 0.0 0.0
Nominal value 1.0 1.5 1.5
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