2015-08-06 07:00:00 CEST
2015-08-06 07:00:45 CEST
REGULATED INFORMATION
Bittium Oyj - Interim report (Q1 and Q3)
Bittium Corporation's interim report January-June 2015
Stock exchange release
Free for publication on August 6, 2015 at 8.00 a.m. (CEST+1)
Bittium Corporation's interim report January-June 2015
Net sales of January-June 2015 grew and operating profit improved from the
previous year
In this interim report the Wireless business and corporate functions are
reported as continuing operations and the Automotive business, sold on July
1, 2015, as discontinuing operations. Cash flow includes both continuing and
discontinuing operations.
Changing the name from Elektrobit Corporation to Bittium Corporation became in
force on July 1, 2015. In this interim report the name Bittium is also used in
the events before the name change.
Summary April-June 2015, continuing operations
* Net sales grew to EUR 15.3 million (EUR 12.4 million, 2Q 2014), representing
an increase of 23.2 % year-on-year.
* Operating profit was EUR 1.0 million (operating loss of EUR -1.1 million,
2Q 2014).
* Net cash flow was EUR -8.6 million (EUR -11.6 million, 2Q 2014). Net cash
flow includes the dividend payment of EUR 5.3 million in April and the cash
flow of the Automotive business until June 30, 2015.
* Earnings per share were EUR 0.006 (EUR -0.010, 2Q 2014).
* The number of Bittium's shares increased by altogether 952 515 new shares
subscribed by virtue of the stock option rights 2008B and 2008C. At the end
of the period, the number of shares in Bittium Corporation totaled
132 541 025.
* In April, a subsidiary of Bittium and the Ministry of Mexican Communication
and Transportation (Secreteria de Comunicaciones y Transportes, SCT) signed
an agreement regarding the development of three types of Android-based L-
band mobile devices for the SCT's Mexsat program. The value of this
development agreement is approximately USD 21.9 million.
* On May 19 the company announced to have signed a share purchase agreement
with Continental AG, under the terms of which it sells its Automotive
business to Continental AG. Simultaneously the company announced to have
cancelled the planned demerger of the company. The sale of the Automotive
business was closed on July 1, 2015, as the customary closing conditions,
such as the approval of Bittium Corporation's Extraordinary General Meeting,
receipt of the required authority approvals and other customary closing
conditions were fulfilled. The purchase price of the transaction was EUR
600 million, which was fully paid in cash upon the closing of the
transaction.
* As the transaction has been closed, the name of the Company has been changed
to Bittium Corporation, Bittium Oyj in Finnish, and the name change was
registered in the trade register on July 1, 2015. Bittium's new trading code
in the stock exchange is from July 2, 2015 onwards BITTI.
* The strategic guidelines and outlook for 2015 of continuing operations were
updated on July 1, 2015 due to the sale of the Automotive business and the
change of the company name.
GROUP (MEUR) 4-6 2015 4-6 2014 2014
Continuing operations 3 months 3 months 12 months
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NET SALES 15.3 12.4 52.7*
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Change of net sales, % 23.2 % -19.5 % -13.7 %
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OPERATING PROFIT / LOSS 1.0 -1.1 0.8
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Operating profit / loss, % of net sales 6.6 % -8.7% 1.5 %
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Operating profit / loss without non-recurring 1.0 -1.1 0.3
items
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EBITDA 1.6 -0.5 3.1
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CASH AND OTHER LIQUID ASSETS 42.0 30.9 43.3
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EQUITY RATIO (%) 59.9 % 61.7 % 62.3 %
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EARNINGS PER SHARE (EUR) 0.006 -0.010 0.010
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*) Continuing operations include the previously reported Wireless business and
corporate functions. Net sales from the continuing operations does not include
the previously reported net sales of the Wireless Business Segment resulting
from the internal sales from Wireless Business Segment to Automotive Business
Segment.
Summary January-June 2015, continuing operations
* Net sales grew to EUR 30.4 million (EUR 26.6 million, 1-6 2014), an increase
of 14.4 % year-on-year.
* Operating profit was EUR 1.5 million (operating loss of EUR -2.1 million,
1-6 2014).
* Net cash flow was EUR -1.3 million (EUR -12.1 million, 1-6 2014). Net cash
flow includes the dividend payment of EUR 5.3 million in April and the cash
flow of the Automotive business until June 30, 2015.
* Earnings per share were EUR 0.009 (EUR -0.017, 1-6 2014).
* The number of Bittium's shares increased by altogether 1 047 881 new shares
subscribed by virtue of the stock option rights 2008B and 2008C. At the end
of the period, the number of shares in Bittium Corporation totaled
132 541 025.
* In January Bittium strengthened its competences in safety technologies in
its Wireless Business Segment by acquiring the SafeMove business from
Birdstep Technology ASA.
* The Board of Directors of the company approved a plan for partial demerger
of the company and intends to list Bittium Corporation as a separate entity
at Nasdaq Helsinki on February 18, 2015. The Board of Directors of the also
updated the strategic guidelines and financial targets of its Business
Segments for the years 2015 -2017. The partial demerger needed to be
approved by an extraordinary general meeting, convened to be held on June
11, 2015. The planned effective date for the demerger was June 30, 2015.
* The Annual General Meeting held on April 15, 2015 decided in accordance with
the proposal of the Board of Directors to pay EUR 0.04 per share as dividend
based on the balance sheet adopted for the financial period January 1, 2014
- December 31, 2014.
* In April a subsidiary of Bittium and the Ministry of Mexican Communication
and Transportation (Secreteria de Comunicaciones y Transportes, SCT) signed
an agreement regarding the development of three types of Android-based L-
band mobile devices for the SCT's Mexsat program. The value of this
development agreement is approximately USD 21.9 million.
* On May 19 the company announced to have signed a share purchase agreement
with Continental AG, under the terms of which it sells its Automotive
business to Continental AG. Simultaneously the company announced to have
cancelled the planned demerger of the company. The sale of the Automotive
business was closed on July 1, 2015, as the customary closing conditions,
such as the approval of Bittium Corporation's Extraordinary General Meeting,
receipt of the required authority approvals and other customary closing
conditions were fulfilled. The purchase price of the transaction was EUR
600 million, which was fully paid in cash upon the closing of the
transaction.
* As the transaction has been closed, the name of the Company was changed to
Bittium Corporation, Bittium Oyj in Finnish, and the name change was
registered in the trade register on July 1, 2015. Bittium's new trading code
in the stock exchange is from July 2, 2015 onwards BITTI.
* The strategic guidelines and outlook for 2015 of continuing operations were
updated on July 1, 2015 due to the sale of the Automotive business and the
change of the company name.
GROUP (MEUR) 1-6 2015 1-6 2014 2014
Continuing operations 6 months 6 months 12 months
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NET SALES 30.4 26.6 52.7*
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Change of net sales, % 14.4 % -14.7 % -13.7 %
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OPERATING PROFIT / LOSS 1.5 -2.1 0.8
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Operating profit / loss, % of net sales 4.9 % -7.7 % 1.5 %
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Operating profit / loss without non-recurring 1.5 -2.1 0.3
items
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EBITDA 2.6 -0.8 3.1
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CASH AND OTHER LIQUID ASSETS 42.0 30.9 43.3
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EQUITY RATIO (%) 59.9 % 61.7 % 62.3 %
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EARNINGS PER SHARE (EUR) 0.009 -0.017 0.010
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*) Continuing operations include the previously reported Wireless business and
corporate functions. Net sales from the continuing operations does not include
the previously reported net sales of the Wireless Business Segment resulting
from the internal sales from Wireless Business Segment to Automotive Business
Segment.
Bittium's CEO Jukka Harju"The most significant event during the second quarter was the sale of the
Automotive business to Continental AG, which was signed in May and closed at the
beginning of July. Resulting from the transaction, the company name was changed
to Bittium Corporation as of July 1, 2015. The transaction has a very
significant non-recurring positive effect on Bittium's operating result and cash
flow, and the company plans to distribute a major part or all of the net
proceeds from the transaction to its shareholders in 2015.
The company continues with focus on its Wireless business. The divested
Automotive business was three times the size of the Wireless business, so the
net sales of Bittium after the transaction is clearly less than before. Wireless
business is growing and in January-June 2015 the net sales grew and operating
result improved from the previous year. The company also aims at growing both
net sales and operating profit in the next coming years, as announced in the
strategic guidelines.
During the second quarter, Bittium's continuing operations developed well. Net
sales grew by 23.2 per cent and operating result improved clearly from the
previous year and was 6.6 per cent of net sales. In the beginning of May we
announced a significant agreement with Ministry of Mexican Communication and
Transportation regarding the development of three types of Android-based L-band
mobile devices for the SCT's Mexsat program. These mobile devices will be based
on Bittium's Specialized Device Platform, a customized Android-based platform
designed especially for public safety and cyber security markets. The value of
this development agreement is approximately USD 21.9 million with revenues
recognized gradually in 2015 and 2016 depending on the progress of the
development work.
Net sales from continuing operations in January-June was EUR 30.4 million,
growing 14.4 per cent from previous year. The growth in net sales was driven
mainly by the delivery of special terminal products and related sales of R&D
services. Product based net sales grew from the previous year and was EUR 8.8
million (28.9 per cent of net sales). The product-based net sales was generated
mainly from the deliveries of tactical communication systems to Finnish Defence
Forces and from the deliveries of special terminal products for the authority
use to international customers. Operating result in January-June improved
clearly from the previous year and was EUR 1.5 million positive, which
improvement resulted mainly from the growth in net sales and improved gross
margin.
R&D investments were increased for products for the use by authorities, and the
biggest R&D investments were made in the new Bittium Tough Mobile LTE smart
phone and the specialized terminal product platform. The SafeMove business that
was acquired in January 2015 provides high-quality information security
solutions for mobile devices and portable computers, and strengthens Bittium's
competitiveness as a provider of secure communication solutions for defense,
public safety and other authority markets. During the first half of the year the
SafeMove business developed according to our plans.
Our objective in 2015 is to grow our net sales and achieve an operating profit
that is at the same level or higher than in the previous year in continuing
operations."
Outlook for 2015
In this interim report the Wireless business and corporate functions are
reported as continuing operations and the Automotive business, sold on July
1, 2015, is reported as discontinuing operations.
For the year 2015 Bittium expects that from continuing operations the net sales
will grow and operating profit will be at the same level or higher than in the
previous year for the Wireless business (net sales of EUR 53.0 million and
operating profit of EUR 1.0 million in 2014).
The 2015 business outlook for the Wireless business remains unchanged. In the
Wireless business, the demand for R&D services and products is expected to
develop positively especially in the authority markets and in various
applications where wireless connectivity is needed.
Due to the sale of the Automotive business, the continuing operations of Bittium
will carry approximately EUR 1.0 million more of the costs of the corporate
functions during the second half of year 2015, since these costs will no longer
be shared with the Automotive business.
The operating profit outlook above does not include non-recurring profits and
costs related to the sale of the Automotive business or the demerger process
that has been cancelled. The non-recurring costs related to these events are
included in the estimate of non-recurring items below resulting from the sale of
the Automotive business.
Non-recurring items
The company specifies that the transaction is estimated to have approximately
EUR 532 million positive non-recurring effect on Bittium's net profit for the
full year 2015. This estimation includes both the proceeds from the sale of
Automotive business and the costs related to this transaction and the costs
related to the cancelled demerger process.
Risks and uncertainties regarding the outlook
More information about Bittium's market outlook is presented in the section"market outlook" in this interim report.
More information about other uncertainties regarding the outlook is presented in
this interim report sections "Risks and uncertainties" and "Events after the
review period", as well as on the company's internet pages at www.bittium.com .
Invitation to a press conference
Bittium will hold a press conference on the interim report January-June 2015 for
media, analysts and institutional investors in Restaurant Savoy, Eteläesplanadi
14, Helsinki, Finland, on Thursday August 6, 2015 at 9.30 am (CEST+1).
Bittium will also hold a telephone conference on the same day at 10.30 am. The
dial-in number for the conference call is +44 203 059 5861, confirmation code is"Bittium". The conference can be followed also live as an audio webcast,
accessible at www.bittium.com/investors. The conference call will be held in
English.
A recording of the audio webcast and the presentation will be available after
the conference on Bittium's website at www.bittium.com/investors.
Bittium
Bittium is specialized in developing reliable and secure communications and
connectivity solutions using the latest technologies and deep knowledge on radio
technology. Bittium provides innovative products and customized solutions based
on its product platforms, and R&D services for customers in various industries.
Bittium also offers high quality information security solutions for mobile
devices and portable computers. Net sales of continuing operations in 2014 was
EUR 52.7 million and operating profit was EUR 0.8 million. Bittium is listed on
Nasdaq Helsinki. www.bittium.com
Bittium Corporation Interim Report January-June 2015
In this interim report the Wireless business and corporate functions are
reported as continuing operations and the Automotive business, sold on July
1, 2015, as discontinuing operations. Cash flow includes both continuing and
discontinuing operations.
Changing the name from Elektrobit Corporation to Bittium Corporation became in
force on July 1, 2015. In this interim report the name Bittium is also used in
the events before the name change.
Financial performance in January-June 2015
Bittium's net sales during January-June 2015 grew by 14.4 per cent year-on-year
to EUR 30.4 million (EUR 26.6 million, 1-6 2014). The growth in net sales was
mainly driven by the deliveries of special terminal products and related sales
of R&D services.
The share of the product-based net sales was EUR 8.8 million (EUR 5.9 million,
1-6 2014), which resulted mainly from the product deliveries of the tactical
communication system to the Finnish Defence Forces and from the delivery of
special terminal products for the authority use to international customers.
Operating profit was EUR 1.5 million, including the costs of EUR 0.4 million
resulting from the name change of the company (operating loss of EUR -2.1
million, 1-6 2014). The operating result improved from the previous year due to
the growth in net sales and improved gross margin.
consolidated statement of comprehensive income, meur 1-6 2015 1-6 2014
6 kk 6 kk
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CONTINUING OPERATIONS
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Net sales 30.4 26.6
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Operating profit / loss 1.5 -2.1
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Financial income and expenses -0.3 -0.2
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Result before tax 1.1 -2.2
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RESULT FOR THE PERIOD FROM CONTINUING OPERATIONS 1.1 -2.3
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RESULT FOR THE PERIOD FROM DISCONTINUING OPERATIONS 3.8 5.8
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RESULT FOR THE PERIOD 4.9 3.6
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TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 5.7 3.8
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Result for the period attributable to:
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Equity holders of the parent 4.9 3.6
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Non-controlling interests
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Total comprehensive income for the period attributable to:
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Equity holders of the parent 5.7 3.8
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Non-controlling interests
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Earnings per share from continuing operations, EUR 0.009 -0.017
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* Cash flow from operating activities was EUR -1.2 million (EUR -15.4 million,
1-6 2014). The cash flow includes the operating cash flow of the Automotive
business until June 30, 2015.
* Net cash flow was EUR -1.3 million (EUR -12.1 million, 1-6 2014). Net cash
flow includes the dividend payment of EUR 5.3 million in April and the cash
flow of Automotive business until June 30, 2015.
* Equity ratio was 59.9 % (61.7 %, June 30, 2014).
* Net gearing was -23.8 % (-20.6 %, June 30, 2014).
Quarterly figures
GROUPS NET SALES AND OPERATING RESULT, 2Q 15 1Q 15 4Q 14 3Q 14 2Q 14
CONTINUING OPERATIONS, MEUR
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Net sales 15.3 15.1 16.1 10.0 12.4
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Operating profit (loss) 1.0 0.5 1.8 1.1 -1.1
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Operating profit (loss) without non-recurring 1.0 0.5 2.4 -0.1 -1.1
costs
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Result before taxes 0.8 0.4 1.6 1.2 -1.3
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Result for the period 0.8 0.4 2.4 1.2 -1.3
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Non-recurring items
Non-recurring items are exceptional gains and losses that are not related to
normal business operations and occur only seldom. These items include capital
gains or losses, significant changes in asset values such as write-downs or
reversals of write-downs, significant restructuring costs, or other items that
the management considers to be non-recurring. When evaluating a non-recurring
item, the euro translation value of the item is considered, and in case of a
change in an asset value, it is measured against the total value of the asset.
In 2014 the following non-recurring items were included:
* Non-recurring income of approximately EUR 1.1 million in Wireless Business
Segment resulting from the reorganization cases of TerreStar companies
during the third quarter of 2014; and
* A total of EUR 0.6 million of non-recurring costs resulting from Wireless
Business Segment's personnel layoffs and from the acquisition costs of
SafeMove during the last quarter of 2014;
DISTRIBUTION OF NET SALES BY MARKET AREAS, 2Q 15 1Q 15 4Q 14 3Q 14 2Q 14
MEUR AND %
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Asia 0.1 0.0 0.2 0.0 0.0
0.6 % 0.2 % 1.5 % 0.0 % 0.3 %
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Americas 0.8 2.1 0.6 0.7 0.2
5.2 % 14.2 % 3.5 % 6.6 % 1.5 %
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Europe 14.4 13.0 15.3 9.3 12.2
94.2 % 85.6 % 94.9 % 93.3 % 98.2 %
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Research and development
Bittium continued its R&D investments in products and product platforms mainly
for the defense and public safety markets.
The total R&D investments during January-June 2015 were EUR 3.9 million (EUR
3.4 million, 1-6 2014), equaling to 12.8% of the net sales (12.7%, 1-6 2014).
EUR 2.0 million of R&D investments were capitalized (EUR 0.7 million,
1-6 2014). The amount of capitalized R&D investments at the end of June 2015 was
EUR 4.4 million (EUR 0.9 million, June 30, 2014). A significant part of these
capitalized R&D investments is related to the development of the Bittium Tough
Mobile product. Depreciations of R&D investments were EUR 0.1 million during the
reporting period (EUR 0.1 million, 1-6 2014).
The total negative effect, caused by the research and development investments,
their capitalizations and depreciation, on Bittium's income statement in
January-June 2015, was EUR -2.0 million (EUR -2.7 million, 1-6 2014).
Business development in April-June 2015
Bittium's net sales during April-June 2015 grew by 23.2 per cent year-on-year to
EUR 15.3 million (EUR 12.4 million, 4-6 2014). The share of the product-based
net sales was EUR 4.3 million (EUR 2.3 million, 4-6 2014), which resulted mainly
from the product deliveries of the tactical communication system to the Finnish
Defence Forces and from the delivery of special terminal products for the
authority use to customers abroad.
Operating profit was EUR 1.0 million, including the costs of EUR 0.4 million
resulting from the name change of the company (operating loss of EUR -1.1
million, 4-6 2014). Operating result improved from the previous year due to the
growth in net sales and improved gross margin.
R&D investments in the second quarter were EUR 1.9 million (EUR 1.8 million,
4-6 2014). R&D investments were focused mainly on developing the Bittium Tough
Mobile product that is targeted for cyber security and other demanding use of
public safety authorities. The product is planned to be ready for deliveries to
customers during the second half of this year.
The demand for Bittium's R&D services for mobile infrastructure customers
continued as stable during the second quarter of the year. The demand was driven
by the use of LTE technology and the need to develop low power and micro base
stations. Also the demand for Bittium's R&D services in IoT (Internet of Things)
markets remained as stable.
In April, subsidiary of Bittium Corporation and Ministry of Mexican
Communication and Transportation (Secreteria de Comunicaciones y Transportes,
SCT) have signed an agreement regarding the development of three types of
android-based L-band mobile devices for their Mexsat program. The value of this
development agreement is approximately USD 21.9 million. The development work of
the products was started during the second quarter of the year which also
increased the net sales of the quarter.
Significant events during the reporting period
A total of 1 047 881 new shares in Bittium Corporation (former Elektrobit
Corporation) were subscribed between December 15, 2014 and June 6, 2015 by
virtue of the option rights 2008B and 2008C. The share subscription price, EUR
656,345.35, was recorded in the Company's invested non-restricted equity fund.
The corresponding increase in the number of the Company's shares was entered
into the Finnish Trade Register on February 6, April 14, and June 24, 2015.
Trading with the newly registered shares started on February 9, April 15, and
June 25, 2015 in NASDAQ OMX Helsinki Ltd. After the registration of the new
shares, the number of shares in Elektrobit Corporation's totals 132,541,025.
On January 2, 2015 a subsidiary of Bittium Corporation acquired 100 per cent of
the shares of Birdstep Technology Oy, which was a fully owned Finnish subsidiary
of Birdstep Technology ASA, based in Norway. The acquired company's SafeMove
business provides its customers high quality information security solutions for
mobile devices and portable computers. The acquisition strengthened the
competitiveness of Bittium as a provider of secure communication solutions for
defence, safety and other authorities markets. Birdstep Technology Oy's
(SafeMove Oy from 2nd of January 2015 onwards) net sales was EUR 2.5 million in
2013 and in January-September 2014 EUR 2.1 million. The company employs 19
persons located in Espoo, Finland. The debt free cash purchase price was EUR
1.8 million. The acquisition had no significant impact on Bittium's balance
sheet, net sales and financial position.
The Board of Directors of Bittium Corporation approved on February 18, 2015 a
plan for partial demerger of the company and the listing of the new Bittium
Corporation as a separate entity at Nasdaq Helsinki. Simultaneously the Board of
Directors updated the strategic guidelines and financial targets for the years
2015 -2017. Based on the demerger plan, the assets and liabilities related to
Elektrobit Corporation's Wireless Business Segment will be transferred to
Bittium Corporation, a new entity to be that will be listed at Nasdaq Helsinki.
The Automotive Business Segment remains as a part of the then Elektrobit
Corporation, which will continue its listing at Nasdaq Helsinki. The partial
demerger will need to be approved by an extraordinary general meeting, which was
planned to be held on June 11, 2015. The planned effective date for the demerger
was June 30, 2015.
On April 29, 2015 a notice has been given to the shareholders of Bittium
Corporation to an Extraordinary General Meeting to be held on Thursday, 11 June
2015 at 1 pm. at the University of Oulu, Saalastinsali, at the address Pentti
Kaiteran katu 1, 90570 Oulu, Finland.
On May 2, 2015 Bittium Corporation announced that its subsidiary and the
Ministry of Mexican Communication and Transportation (Secreteria de
Comunicaciones y Transportes, SCT) signed an agreement regarding the development
of three types of Android-based L-band mobile devices for the SCT's Mexsat
program. These mobile devices will be based on Bittium's Specialized Device
Platform, a customized Android-based platform designed especially for public
safety and cyber security markets. The value of this development agreement was
approximately USD 21.9 million (approximately EUR 19.5 million as per exchange
rate of April 30, 2015) with revenues will be recognized gradually in 2015 and
2016 depending on the progress of the development work. More than half of the
contract value is expected to be recognized as revenue during 2016.
The sale of the Automotive business to Continental AG and the related changes
On May 19, Bittium Corporation (former Elektrobit Corporation) announced it will
sell its Automotive business to Continental AG for a purchase price of EUR 600
million. The share purchase agreement was signed on May 18, 2015. The
transaction was expected to close in the beginning of July 2015. The Transaction
comprised the sale of Elektrobit Automotive GmbH and its subsidiaries, including
its 51 per cent ownership in e.solutions GmbH, a jointly owned company between
Elektrobit Automotive GmbH and Audi Electronics Venture GmbH. Simultaneously the
company cancelled the ongoing demerger process, and announced it will continue
to carry on its Wireless business within its existing Elektrobit Corporation
(currently Bittium Corporation). The company also announced to change its name
to Bittium Corporation, as the Elektrobit brand will be included as a part of
the transaction. In addition the company updated its outlook for 2015 based on
the assumption that the sale of Automotive business will materialize in the
beginning of July.
The Extraordinary General Meeting of Bittium Corporation (former Elektrobit
Corporation), which was held on June 11, 2015, approved the sale of Automotive
business to Continental AG according to Board of Director's proposal and
recommendation. The Extraordinary General Meeting also resolved to change
section 1 of the Company's Articles of Association and the name of the company.
The transaction was closed on July 1, 2015 as the closing conditions of the
transaction, such as the approval of Bittium's Extraordinary General Meeting,
receipt of the required authority approvals and other customary closing
conditions were fulfilled. The purchase price of the transaction, EUR 600
million, was fully paid in cash upon the closing of the transaction.
As the transaction was closed, the name of the company was changed to Bittium
Corporation, Bittium Oyj in Finnish, and the name change was registered in the
trade register on July 1, 2015. The company will continue to carry on its
Wireless business and will continue to be listed on NASDAQ Helsinki with its new
name. Bittium's new trading code in the stock exchange is BITTI from July
2, 2015 on. It was estimated that the transaction has a non-recurring positive
effect of approximately EUR 530 million on net profit and approximately EUR 575
million positive effect on net cash flow of the Bittium group in the year 2015.
Bittium updated its strategic guidelines and outlook for 2015 due to the sale of
the Automotive business and the change of the company name on July 1, 2015.
Outlook for 2015
In this interim report the Wireless business and corporate functions are
reported as continuing operations and the Automotive business, sold on July
1, 2015, is reported as discontinuing operations.
For the year 2015 Bittium expects that from continuing operations the net sales
will grow and operating profit will be at the same level or higher than in the
previous year for the Wireless business (net sales of EUR 53.0 million and
operating profit of EUR 1.0 million in 2014).
The 2015 business outlook for the Wireless business remains unchanged. In the
Wireless business, the demand for R&D services and products is expected to
develop positively especially in the authority markets and in various
applications where wireless connectivity is needed.
Due to the sale of the Automotive business, the continuing operations of Bittium
will carry approximately EUR 1.0 million more of the costs of the corporate
functions during the second half of year 2015, since these costs will no longer
be shared with the Automotive business.
The operating profit outlook above does not include non-recurring profits and
costs related to the sale of the Automotive business or the demerger process
that has been cancelled. The non-recurring costs related to these events are
included in the estimate of non-recurring items below resulting from the sale of
the Automotive business.
Non-recurring items
The company specifies that the transaction is estimated to have approximately
EUR 532 million positive non-recurring effect on Bittium's net profit for the
full year 2015. This estimation includes both the proceeds from the sale of
Automotive business and the costs related to this transaction and the costs
related to the cancelled demerger process.
Risks and uncertainties regarding the outlook
More information about Bittium's market outlook is presented in the section"market outlook" in this interim report.
More information about other uncertainties regarding the outlook is presented in
this interim report sections "Risks and uncertainties" and "Events after the
review period", as well as on the company's internet pages at www.bittium.com .
Market outlook
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 even higher speed and
higher quality communications.
The following factors are expected to create demand for Bittium's products and
services in 2015 and beyond:
* In the mobile infrastructure equipment market the use of LTE technology is
expected to continue strong. This creates the need for services for LTE base
station development. There is a wide range of frequencies allocated for LTE
globally thus creating the need to develop multiple products to cover the
market and creating demand for R&D services for development of product
variants.
* The trend of using new commercial technologies, such as LTE, smart phones
and applications, is expected to continue in special verticals such as
public safety. The specific LTE frequency band allocations for authorities
create demand for customized LTE devices, such as Bittium's specialized
terminals, tablets and communication modules. Bittium Tough Mobile LTE smart
phone creates the basis for new customer orders in the markets for public
authorities and mobile safety phones.
* Due to the long history in developing smart phones and mobile communication
devices, Bittium is in a good position to offer solutions, where e.g.
mastering of multi-radio technologies and end-to-end system architectures
covering both terminals and networks is needed.
* The demand for safety devices is expected to grow in the near future.
Bittium SafeMove product family is expected to increase the performance and
suitability in information security markets.
* IoT (Internet of Things) has become a significant development area in many
industries. The need for R&D services for connected devices for business or
consumer use, such as various wearable devices and solutions, implementing
mobile applications and connected devices both with internet services as
well as with other devices.
* In the tactical defense communication market the need for larger amounts of
information data grows, generating demand for broadband networks, such as
Bittium's IP (Internet Protocol) based tactical communications solutions.
The general cost savings of the mobile telecommunications network equipment
companies is reflected as increasing price competition in the R&D services.
Despite of that the demand for Bittium's R&D services is expected to remain
steady during 2015. Bittium continues the product development related to the
Finnish Defence Forces' management system in 2015, and expects to get initial
sales from the global defense markets.
The defense, national security and other authority markets are slowly developing
markets by their nature. They are characterized by long sales cycles driven by
purchasing programs of national governments, and the purchases of the selected
products take place over several years.
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.
Bittium Corporation announced in its stock exchange release on May 2, 2015 that
a subsidiary of Bittium Corporation and the Ministry of Mexican Communication
and Transportation (Secreteria de Comunicaciones y Transportes, SCT) have signed
an agreement regarding the development of three types of android-based L-band
mobile devices for the SCT's Mexsat program. The development agreement contains
termination conditions customarily applied in the industry, providing for
example, SCT a possibility to terminate the agreement with a short notice by
paying a ramp down fee. The development work comprises also typical risks
related to fixed price projects, such as execution and management of the project
in the agreed schedule and with the planned resources.
Bittium Corporation announced in its stock exchange release on May 19, 2005 that
Bittium Corporation and Continental AG ("Continental") have signed a share
purchase agreement, under which the company sold its Automotive business to
Continental AG for EUR 600 million. On June 1, 2015, the Company announced that
the transaction has been closed. The share purchase agreement contains customary
representations and warranties by Bittium concerning its organization and
business and includes e.g. a non-competition undertaking. At worst, breaches of
the representations and warranties or undertakings could lead to considerable
liabilities for damages towards Continental.
Market risks
In the ongoing financial period, 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.
As Bittium's customer base consists mainly of companies operating in the field
of telecommunication and defense and public safety authorities, the company is
exposed to market changes in these industries. A significant part of Bittium's
net sales accumulates from selling R&D services to a certain mobile
communications equipment manufacturer and from selling products and R&D services
to the Finnish Defence Forces. Deviation in anticipated business development
with such customer concentrations may translate as a significant deviation in
the 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 will thereby be mainly affected by the general business
climate in these industries. The more specific market outlook has been presented
in this interim report in "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. 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 result also 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 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 be also affected by potential challenges in global accessibility
of key technologies and components on commercially acceptable terms.
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. Currently Bittium has a committed overdraft credit facility
agreement of EUR 10.0 million with Nordea Bank Finland Plc and a committed
overdraft credit facility agreement of EUR 10.0 million with Pohjola Bank Plc.
These agreements meant for general financing needs are valid until June
30, 2017. These agreements include customary covenants related to, among other
things, equity ratio, transferring property and pledging. There is no assurance
that additional financing will not be needed in case of clearly weaker than
expected development of Bittium's businesses. Customer dependency in some parts
of Bittium's business may translate as an accumulation of risk with respect to
outstanding receivables and ultimately with respect to credit losses.
Statement of financial position and financing
The figures presented in the statement of financial position of June 30, 2015,
are compared with the statement of the financial position of December 31, 2014
(MEUR).
30.06.2015 31.12.2014
-------------------------------------------------------------------------------
Non-current assets 13.1 48.8
-------------------------------------------------------------------------------
Current assets 45.8 118.0
-------------------------------------------------------------------------------
Assets classified as held for sale 117.3
---------------------------------------------------------------------
Total assets 176.2 166.8
-------------------------------------------------------------------------------
Share capital 12.9 12.9
-------------------------------------------------------------------------------
Other capital 81.6 80.5
-------------------------------------------------------------------------------
Total equity 94.5 93.4
-------------------------------------------------------------------------------
Non-current liabilities 1.0 7.6
-------------------------------------------------------------------------------
Current liabilities 25.2 65.8
-------------------------------------------------------------------------------
Liabilities classified as held for sale 55.4
-------------------------------------------------------------------------------
Total equity and liabilities 176.2 166.8
-------------------------------------------------------------------------------
Cash flow of the review period : 1-6/2015 1-12/2014
-------------------------------------------------------------------------------
+ profit of the period +/- Adjustment of accrual basis 13.0 27.4
items
-------------------------------------------------------------------------------
+/- Change in net working capital -10.6 -12.1
-------------------------------------------------------------------------------
- interest, taxes and dividends -3.7 -4.7
-------------------------------------------------------------------------------
= net cash from operating activities -1.2 10.5
-------------------------------------------------------------------------------
- net cash from investing activities -6.5 -9.2
-------------------------------------------------------------------------------
- net cash from financing activities 6.5 -1.0
-------------------------------------------------------------------------------
= net change in cash and cash equivalents -1.3 0.3
-------------------------------------------------------------------------------
The increase in net working capital during the review period resulted mainly
from the increase in non-interest bearing receivables in the Automotive
business.
The amount of gross investments in the period under review was EUR 5.2 million
including EUR 1.7 million investments related to acquisitions. Net investments
for the reporting period totaled EUR 5.2 million. The total amount of
depreciation during the period under review was EUR 1.2 million. The amount of
interest-bearing debt, including finance lease liabilities, at the end of the
reporting period was EUR 19.5 million (EUR 8.3 million on December 31, 2014).
Interest bearing debt includes EUR 8.2 million debt from a temporary financing
arrangement related to the sale of the Automotive business.
Bittium's equity ratio at the end of the period was 59.9% (62.3 % on December
31, 2014).
Cash and other liquid assets at the end of the reporting period were EUR 42.0
million, including EUR 11.8 million cash and other liquid assets of the
operations to be sold (EUR 43.3 million on December 31, 2014).
Bittium has a EUR 10 million credit facility agreement with Nordea Bank Finland
Plc. and a EUR 10 million credit facility agreement with Pohjola Bank Plc. These
agreements, intended for general financing purposes, are valid until June
30, 2017. At the end of the review period, EUR 6.0 million of these facilities
was in use.
Bittium follows a hedging strategy, the objective of which is to ensure the
margins of business operations in changing market circumstances by minimizing
the influence of exchange rates. In accordance with the hedging strategy, the
agreed customer commitments net cash flow of the currency in question is hedged.
The net cash flow is determined on the basis of sales receivables, payables, the
order book and the budgeted net currency cash flow. The hedged foreign currency
exposure at the end of the review period was equivalent to EUR 3.0 million.
Personnel
The Bittium group employed an average of 509 people in continuing operations
between January and June 2015. At the end of June, the company had 516 employees
(474 employees in continuing operations at the end of 2014). A significant part
of Bittium's personnel are R&D engineers.
Flagging notifications
There were no changes in ownership during the period under review that would
have caused flagging notifications in accordance with the obligations for
disclosure in Chapter 2, section 9 of the Securities Market Act.
Events after the review period
On July 1, 2015 the company closed the sale of its Automotive business to
Continental AG ("Continental"). The closing conditions, such as the approval of
Bittium Corporation's (former Elektrobit Corporation) Extraordinary General
Meeting, receipt of the required authority approvals and other customary closing
conditions were fulfilled. The purchase price of the transaction EUR 600 million
was fully paid in cash upon the closing of the transaction.
As the transaction was closed, the name of the Company was changed to Bittium
Corporation, Bittium Oyj in Finnish, and the name change was registered in the
trade register on July 1, 2015. The Company continues to carry on its Wireless
business and continues to be listed on NASDAQ Helsinki with its new name.
Bittium's new trading code in the stock exchange will be BITTI, and it was
entered into force on July 2, 2015.
On July 1, 2015 Bittium updated its outlook for 2015 due to the sale of the
Automotive business and the change of the company name on July 1, 2015. Outlook
regarding the net sales and operating result remained the same as given in the
outlook in the stock exchange release published on May 19, 2015. The Company
estimated that the transaction has a non-recurring positive effect of
approximately EUR 530 million on net profit and approximately EUR 575 million
positive effect on net cash flow of Bittium group in the year 2015.
On July 1, 2015 the Board of Directors of Bittium updated the company's
strategic guidelines after the sale of the Automotive business and the change of
the company name on July 1, 2015. Bittium carries on its Wireless business
according to the announcements made on February 19, 2015, and according to the
strategic guidelines.
On August 6, 2015 the Board of Directors of Bittium Corporation has decided upon
nominations and changes in the company's management. Hannu Huttunen, M.Sc.
(Econ.) has been appointed CEO of Bittium Corporation as of August 7, 2015. The
contract of Bittium's current CEO Jukka Harju terminates on August 6, 2015 by
mutual consent, and he will not continue at Bittium after August 2015.
As of August 7, 2015 the corporate functions and Wireless Business Segment's
functions will be merged and the following persons will make the company's new
management team: Hannu Huttunen, CEO (chairman); Veli-Pekka Paloranta, CFO; Kari
Jokela, CLO; Jari Sankala, Senior Vice President, Sales; Karoliina Fyrstén,
Director, Corporate Communications and Marketing, heads of product and services
areas: Harri Romppainen, Vice President, Defense; Klaus Mäntysaari, Vice
President, Telecom; and Sami Kotkajuuri, Vice President, Connectivity; Jari-
Pekka Innanen, Vice President, Engineering and Arto Pietilä, Senior Vice
President, Operations. CFO Veli-Pekka Paloranta has decided to move to another
company in November 2015 and has resigned from Bittium. He will continue as
Bittium's CFO until November 2015. M.Sc. (econ.) LL.M. Pekka Kunnari has been
appointed as CFO of Bittium Corporation as of beginning of November 2015. The
Board of Directors of the Wireless Business Segment will be discontinued, since
Bittium now focuses on one business and there is no need for another board in
addition to the Board of Directors of Bittium Corporation.
On August 6, 2015 Bittium Corporation announced that it is planning to
distribute the net proceeds from the sale of its Automotive business, a maximum
of EUR 595 million, to its shareholders in the first instance by repurchasing
own shares in a voluntary public tender offer directed to all shareholders of
the company. Technical analyses regarding the execution of the possible public
tender offer are being continued and also other possible ways to carry out the
distribution of funds are also being evaluated simultaneously, and at the moment
there is no certainty on which distribution method the Board of Directors will
propose to the Extraordinary General Meeting. The planned distribution of funds
requires preparation of separate interim accounts, after the completion of which
the Board of Directors is expected to decide on the proposal to the
Extraordinary General Meeting regarding the distribution method and the amount
of funds to be distributed during the second half of August 2015.
Decisions of the Extraordinary General Meeting
The Extraordinary General Meeting of Bittium Corporation (former Elektrobit
Corporation), held on 11 June 2015, approved the sale of the company's
Automotive Business to Continental AG in accordance with the proposal and
recommendation of the Board of Directors. The Transaction would comprise the
sale of Elektrobit Automotive GmbH and its subsidiaries, including its 51 per
cent ownership in e.solutions GmbH, a jointly owned company between Elektrobit
Automotive GmbH and Audi Electronics Venture GmbH. In addition, the rights to
the name Elektrobit would transfer to Continental. The purchase price for the
acquisition is EUR 600 million payable in cash and it was to be paid in full
upon the closing of the Transaction.
The Extraordinary General Meeting also resolved to change section 1 of the
company's Articles of Association and the name of the company. The
implementation of the change of the name and the Articles of Association was
subject to the completion of the sale of the Automotive Business. Upon the
completion of the transaction, the new name of the company will be Bittium Oyj,
in English Bittium Corporation.
Oulu, August 6, 2015
Bittium Corporation
The Board of Directors
Further Information:
Jukka Harju
CEO
Tel. +358 40 344 5466
Distribution:
NASDAQ OMX Helsinki
Major media
BITTIUM CORPORATION CONDENSED FINANCIAL STATEMENTS AND NOTES JANUARY - JUNE
2015
(unaudited)
The Interim Report has been prepared in accordance with IAS 34 Interim Financial
Reporting.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 1-6/2015 1-6/2014 1-12/2014
(MEUR)
Continuing operations 6 months 6 months 12 months
-------------------------------------------------------------------------------
NET SALES 30.4 26.6 52.7
-------------------------------------------------------------------------------
Other operating income 0.7 0.8 1.6
-------------------------------------------------------------------------------
Change in work in progress and finished goods
-------------------------------------------------------------------------------
Work performed by the undertaking for its own 0.1 0.0 0.0
purpose and capitalized
-------------------------------------------------------------------------------
Raw materials -3.8 -3.9 -6.8
-------------------------------------------------------------------------------
Personnel expenses -16.9 -15.8 -30.1
-------------------------------------------------------------------------------
Depreciation -1.2 -1.2 -2.3
-------------------------------------------------------------------------------
Other operating expenses -7.9 -8.5 -14.3
-------------------------------------------------------------------------------
OPERATING PROFIT (LOSS) 1.5 -2.1 0.8
-------------------------------------------------------------------------------
Financial income and expenses -0.3 -0.2 -0.2
-------------------------------------------------------------------------------
PROFIT BEFORE TAX 1.1 -2.2 0.6
-------------------------------------------------------------------------------
Income tax -0.0 -0.0 0.7
-------------------------------------------------------------------------------
PROFIT FOR THE PERIOD FROM CONTINUING OPERATIONS 1.1 -2.3 1.3
-------------------------------------------------------------------------------
Discontinued operations
-------------------------------------------------------------------------------
Profit for the year from discontinued operations 3.8 5.8 11.2
-------------------------------------------------------------------------------
PROFIT FOR THE PERIOD 4.9 3.6 12.5
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Other comprehensive income:
-------------------------------------------------------------------------------
Items that will not be reclassified to statement
of income
-------------------------------------------------------------------------------
Re-measurement gains (losses) on defined benefit -0.8
plans
-------------------------------------------------------------------------------
Income tax effect 0.2
-------------------------------------------------------------------------------
Items that may be reclassified subsequently to the
statement of income
-------------------------------------------------------------------------------
Exchange differences on translating foreign 0.8 0.2 0.9
operations
-------------------------------------------------------------------------------
Other comprehensive income for the period total 0.8 0.2 0.4
-------------------------------------------------------------------------------
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 5.7 3.8 12.9
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Profit for the year attributable to
-------------------------------------------------------------------------------
Equity holders of the parent 1.1 -2.3 1.3
-------------------------------------------------------------------------------
Non-controlling interests
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Total comprehensive income for the period
attributable to
-------------------------------------------------------------------------------
Equity holders of the parent 5.7 3.8 12.9
-------------------------------------------------------------------------------
Non-controlling interests
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Earnings per share from continuing operations, EUR
-------------------------------------------------------------------------------
Basic earnings per share 0.009 -0.017 0.010
-------------------------------------------------------------------------------
Diluted earnings per share 0.009 -0.017 0.010
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Earnings per share from discontinued operations,
EUR
-------------------------------------------------------------------------------
Basic earnings per share 0.029 0.044 0.086
-------------------------------------------------------------------------------
Diluted earnings per share 0.029 0.044 0.085
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Earnings per share from continuing and
discontinued operations, EUR
-------------------------------------------------------------------------------
Basic earnings per share 0.037 0.027 0.096
-------------------------------------------------------------------------------
Diluted earnings per share 0.037 0.027 0.095
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Average number of shares, 1000 pcs 131 862 130 693 130 975
-------------------------------------------------------------------------------
Average number of shares, diluted, 1000 pcs 132 054 131 462 131 663
-------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF FINANCIAL Jun. 30, 2015 Jun. 30, 2014 Dec. 31, 2014
POSITION (MEUR)
-------------------------------------------------------------------------------
ASSETS
-------------------------------------------------------------------------------
Non-current assets
-------------------------------------------------------------------------------
Property, plant and equipment 3.9 9.1 10.7
-------------------------------------------------------------------------------
Goodwill 1.4 19.4 19.3
-------------------------------------------------------------------------------
Intangible assets 6.7 14.7 17.0
-------------------------------------------------------------------------------
Other financial assets 0.1 0.1 0.1
-------------------------------------------------------------------------------
Deferred tax assets 0.9 1.5 1.7
-------------------------------------------------------------------------------
Non-current assets total 13.1 44.9 48.8
-------------------------------------------------------------------------------
Current assets
-------------------------------------------------------------------------------
Inventories 1.8 1.0 2.2
-------------------------------------------------------------------------------
Trade and other receivables 22.0 71.6 72.5
-------------------------------------------------------------------------------
Financial assets at fair value 15.9 20.9 21.0
through profit or loss
-------------------------------------------------------------------------------
Cash and short term deposits 6.2 10.0 22.3
-------------------------------------------------------------------------------
Current assets total 45.8 103.5 118.0
-------------------------------------------------------------------------------
Assets classified as held for sale 117.3
-------------------------------------------------------------------------------
TOTAL ASSETS 176.2 148.4 166.8
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
EQUITY AND LIABILITIES
-------------------------------------------------------------------------------
Equity attributable to equity
holders of the parent
-------------------------------------------------------------------------------
Share capital 12.9 12.9 12.9
-------------------------------------------------------------------------------
Invested non-restricted equity 25.8 24.9 25.1
fund
-------------------------------------------------------------------------------
Translation difference 2.3 0.8 1.5
-------------------------------------------------------------------------------
Retained earnings 53.5 44.7 53.8
-------------------------------------------------------------------------------
Non-controlling interests
-------------------------------------------------------------------------------
Total equity 94.5 83.3 93.4
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Non-current liabilities
-------------------------------------------------------------------------------
Deferred tax liabilities 0.1 0.5 0.5
-------------------------------------------------------------------------------
Pension obligations 2.1 3.0
-------------------------------------------------------------------------------
Provisions 0.2 0.3 0.2
-------------------------------------------------------------------------------
Interest-bearing liabilities 0.7 2.9 3.8
-------------------------------------------------------------------------------
Non-current liabilities total 1.0 5.8 7.6
-------------------------------------------------------------------------------
Current liabilities
-------------------------------------------------------------------------------
Trade and other payables 16.4 45.4 58.5
-------------------------------------------------------------------------------
Financial liabilities at fair 0.0 0.2
value through profit or loss
-------------------------------------------------------------------------------
Provisions 2.2 3.0 2.6
-------------------------------------------------------------------------------
Interest-bearing loans and 6.7 10.9 4.5
borrowings
-------------------------------------------------------------------------------
Current liabilities total 25.2 59.3 65.8
-------------------------------------------------------------------------------
Total liabilities 26.2 65.1 73.4
-------------------------------------------------------------------------------
Liabilities classified as held for 55.4
sale
-------------------------------------------------------------------------------
TOTAL EQUITY AND LIABILITIES 176.2 148.4 166.8
-------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS (MEUR) 1-6/2015 1-6/2014 1-12/2014
6 months 6 months 12 months
-------------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES
-------------------------------------------------------------------------------
Profit for the year from continuing operations 1.1 -2.3 1.3
-------------------------------------------------------------------------------
Profit for the year from discontinued operations 3,8 5,8 11.2
-------------------------------------------------------------------------------
Adjustment of accrual basis items 8.1 6.4 14.9
-------------------------------------------------------------------------------
Change in net working capital -10.6 -25.0 -12.1
-------------------------------------------------------------------------------
Interest paid on operating activities -1,2 -0,2 -1.3
-------------------------------------------------------------------------------
Interest received from operating activities 0,2 0,3 0.4
-------------------------------------------------------------------------------
Other financial income and expenses, net received 0.0 0.0 0.0
-------------------------------------------------------------------------------
Income taxes paid -2.6 -0.4 -3.8
-------------------------------------------------------------------------------
NET CASH FROM OPERATING ACTIVITIES -1.2 -15.4 10.5
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
CASH FLOW FROM INVESTING ACTIVITIES
-------------------------------------------------------------------------------
Acquisition of business unit, net of cash acquired -1.8
-------------------------------------------------------------------------------
Purchase of property, plant and equipment -1.9 -1.4 -3.6
-------------------------------------------------------------------------------
Purchase of intangible assets -2.9 -1.3 -5.7
-------------------------------------------------------------------------------
Sale of property, plant and equipment 0.0 0.0 0.1
-------------------------------------------------------------------------------
Sale of intangible assets 0.1 0.0
-------------------------------------------------------------------------------
Proceeds from sale of investments 0.0 0.0
-------------------------------------------------------------------------------
NET CASH FROM INVESTING ACTIVITIES -6.5 -2.7 -9.2
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES
-------------------------------------------------------------------------------
Share-option plans exercised 0.6 0.4 0.6
-------------------------------------------------------------------------------
Proceeds from borrowing 15.3 16.2 19.4
-------------------------------------------------------------------------------
Repayment of borrowing -3.3 -7.1 -16.6
-------------------------------------------------------------------------------
Payment of finance liabilities -0.9 -0.9 -1.8
-------------------------------------------------------------------------------
Dividend paid and repayment of capital -5.3 -2.6 -2.6
-------------------------------------------------------------------------------
NET CASH FROM FINANCING ACTIVITIES 6.5 5.9 -1.0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
NET CHANGE IN CASH AND CASH EQUIVALENTS -1.3 -12.1 0.3
-------------------------------------------------------------------------------
Cash and cash equivalents at beginning of period 43.3 43.0 43.0
-------------------------------------------------------------------------------
Cash and cash equivalents at end of period 42.0 30.9 43.3
-------------------------------------------------------------------------------
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. 1, 2014 12.9 24.5 0.6 43.7 81.7
-------------------------------------------------------------------------------
Comprehensive income for the period
-------------------------------------------------------------------------------
Profit for the period 3.6 3.6
-------------------------------------------------------------------------------
Exchange differences on translating foreign 0.2 0.2
operations
-------------------------------------------------------------------------------
Total comprehensive income for the period 0.2 3.6 3.8
-------------------------------------------------------------------------------
Transactions between the shareholders
-------------------------------------------------------------------------------
Distribution of dividend -2.6 -2.6
-------------------------------------------------------------------------------
Share option plans exercised 0.4 0.4
-------------------------------------------------------------------------------
Share-related compensation 0.1 0.1
-------------------------------------------------------------------------------
Total transactions between the shareholders 0.4 -2.5 -2.2
-------------------------------------------------------------------------------
Other changes 0.0 0.0
-------------------------------------------------------------------------------
Shareholders equity on June 30, 2014 12.9 24.9 0.8 44.7 83.3
-------------------------------------------------------------------------------
A B C D E F
-------------------------------------------------------------------------------
Shareholders equity on Jan. 1, 2015 12.9 25.1 1.5 53.8 93.4
-------------------------------------------------------------------------------
Comprehensive income for the period
-------------------------------------------------------------------------------
Profit for the period 4.9 4.9
-------------------------------------------------------------------------------
Exchange differences on translating foreign 0.8 0.8
operations
-------------------------------------------------------------------------------
Total comprehensive income for the period 0.8 4.9 5.7
-------------------------------------------------------------------------------
Transactions between the shareholders
-------------------------------------------------------------------------------
Distribution of dividend -5.3 -5.3
-------------------------------------------------------------------------------
Share option plans exercised 0.7 0.7
-------------------------------------------------------------------------------
Share-related compensation 0.1 0.1
-------------------------------------------------------------------------------
Total transactions between the shareholders 0.7 -5.2 -4.6
-------------------------------------------------------------------------------
Other changes -0.0 -0.0
-------------------------------------------------------------------------------
Shareholders equity on June 30, 2015 12.9 25.8 2.3 53.5 94.5
-------------------------------------------------------------------------------
NOTES TO THE INTERIM FINANCIAL REPORTING
ACCOUNTING PRINCIPLES FOR THE INTERIM FINANCIAL REPORTING:
The Interim Report has been prepared in accordance with IAS 34 Interim Financial
Reporting. Bittium Corporation has applied the same accounting principles in the
preparation of this Interim Report as in its Financial Statements for 2014,
except for the adoption of new standards and interpretations effective during
2015. The changes did not have material impact on the Interim Report.
SEGMENT-INFORMATION (MEUR)
Bittium Corporation does not have segments that require reporting according to
IFRS 8 standard.
NET SALES OF GEOGRAPHICAL AREAS (MEUR) 1-6/2015 1-6/2014 1-12/2014
6 months 6 months 12 months
-------------------------------------------------------------------
Net sales
-------------------------------------------------------------------
Europe 27.4 25.2 49.8
-------------------------------------------------------------------
Americas 2.9 1.3 2.5
-------------------------------------------------------------------
Asia 0.1 0.1 0.4
-------------------------------------------------------------------
Net sales total 30.4 26.6 52.7
-------------------------------------------------------------------
RELATED PARTY TRANSACTIONS 1-6/2015 1-6/2014 1-12/2014
6 months 6 months 12 months
-------------------------------------------------------------------------------
Employee benefits for key management and stock
options expenses total, including continuing and 1.2 0.7 1.9
discontinuing operations
-------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF 4-6/2015 1-3/2015 10-12/2014 7-9/2014 4-6/2014
COMPREHENSIVE INCOME BY QUARTER
(MEUR) 3 months 3 months 3 months 3 months 3 months
Continuing operations
-------------------------------------------------------------------------------
NET SALES 15.3 15.1 16.1 10.0 12.4
-------------------------------------------------------------------------------
Other operating income 0.4 0.3 0.5 0.3 0.4
-------------------------------------------------------------------------------
Change in work in progress and 0.0 0.0 0.0 0.0 0.0
finished goods
-------------------------------------------------------------------------------
Work performed by the
undertaking for its own purpose 0.0 0.1 0.0 0.0 0.0
and capitalized
-------------------------------------------------------------------------------
Raw materials -1.4 -2.4 -2.1 -0.9 -1.5
-------------------------------------------------------------------------------
Personnel expenses -8.5 -8.4 -8.2 -6.1 -7.8
-------------------------------------------------------------------------------
Depreciation -0.6 -0.6 -0.5 -0.6 -0.6
-------------------------------------------------------------------------------
Other operating expenses -4.2 -3.7 -4.0 -1.7 -4.0
-------------------------------------------------------------------------------
OPERATING PROFIT (LOSS) 1.0 0.5 1.8 1.1 -1.1
-------------------------------------------------------------------------------
Financial income and expenses -0.2 -0.1 -0.2 0.2 -0.2
-------------------------------------------------------------------------------
PROFIT BEFORE TAX 0.8 0.4 1.6 1.2 -1.3
-------------------------------------------------------------------------------
Income tax -0.0 -0.0 0.7 -0.1 -0.0
-------------------------------------------------------------------------------
PROFIT FOR THE PERIOD FROM 0.8 0.4 2.4 1.2 -1.3
CONTINUING OPERATIONS
-------------------------------------------------------------------------------
Discontinued operations
-------------------------------------------------------------------------------
Profit for the period from 2.3 1.5 4.0 1.4 3.1
discontinued operations
-------------------------------------------------------------------------------
PROFIT FOR THE PERIOD 3.1 1.8 6.4 2.6 1.8
-------------------------------------------------------------------------------
Other comprehensive income -0.5 1.2 -0.1 0.2 0.3
-------------------------------------------------------------------------------
TOTAL COMPREHENSIVE INCOME FOR 2.6 3.1 6.3 2.8 2.1
THE PERIOD
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Profit for the period
attributable to:
-------------------------------------------------------------------------------
Equity holders of the parent 3.1 1.8 6.4 2.6 1.8
-------------------------------------------------------------------------------
Non-controlling interests
-------------------------------------------------------------------------------
Total comprehensive income for
the period attributable to:
-------------------------------------------------------------------------------
Equity holders of the parent 2.6 3.1 6.3 2.8 2.1
-------------------------------------------------------------------------------
Non-controlling interests
-------------------------------------------------------------------------------
CONSOLIDATED Jun. Mar. Dec. Sept. Jun.
STATEMENT OF 30, 2015 31, 2015 31, 2014 30, 2014 30, 2014
FINANCIAL
POSITION (MEUR)
-------------------------------------------------------------------------------
ASSETS
-------------------------------------------------------------------------------
Non-current
assets
-------------------------------------------------------------------------------
Property,
plant and 3.9 10.8 10.7 9.2 9.1
equipment
-------------------------------------------------------------------------------
Goodwill 1.4 20.6 19.3 19.4 19.4
-------------------------------------------------------------------------------
Intangible 6.7 18.2 17.0 16.8 14.7
assets
-------------------------------------------------------------------------------
Other 0.1 0.1 0.1 0.1 0.1
financial assets
-------------------------------------------------------------------------------
Deferred tax 0.9 1.5 1.7 1.6 1.5
assets
-------------------------------------------------------------------------------
Non-current 13.1 51.3 48.8 47.1 44.9
assets total
-------------------------------------------------------------------------------
Current assets
-------------------------------------------------------------------------------
Inventories 1.8 1.6 2.2 1.5 1.0
-------------------------------------------------------------------------------
Trade and
other 22.0 69.0 72.5 60.9 71.6
receivables
-------------------------------------------------------------------------------
Financial
assets at fair 15.9 21.1 21.0 20.9 20.9
value through
profit or loss
-------------------------------------------------------------------------------
Cash and short 6.2 29.4 22.3 19.8 10.0
term deposits
-------------------------------------------------------------------------------
Current assets 45.8 121.1 118.0 103.1 103.5
total
-------------------------------------------------------------------------------
Assets
classified as 117.3
held for sale
-------------------------------------------------------------------------------
TOTAL ASSETS 176.2 172.4 166.8 150.2 148.4
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
EQUITY AND
LIABILITIES
-------------------------------------------------------------------------------
Equity
attributable to
equity holders
of the parent
-------------------------------------------------------------------------------
Share capital 12.9 12.9 12.9 12.9 12.9
-------------------------------------------------------------------------------
Invested non-
restricted 25.8 25.6 25.1 24.9 24.9
equity fund
-------------------------------------------------------------------------------
Translation 2.3 2.8 1.5 1.0 0.8
difference
-------------------------------------------------------------------------------
Retained 53.5 55.7 53.8 47.0 44.7
earnings
-------------------------------------------------------------------------------
Non-
controlling
interests
-------------------------------------------------------------------------------
Total equity 94.5 97.0 93.4 85.9 83.3
-------------------------------------------------------------------------------
Non-current
liabilities
-------------------------------------------------------------------------------
Deferred tax 0.1 0.8 0.5 0.5 0.5
liabilities
-------------------------------------------------------------------------------
Pension 3.0 3.0 2.2 2.1
obligations
-------------------------------------------------------------------------------
Provisions 0.2 0.2 0.2 0.2 0.3
-------------------------------------------------------------------------------
Interest-
bearing 0.7 4.1 3.8 3.0 2.9
liabilities
-------------------------------------------------------------------------------
Non-current
liabilities 1.0 8.1 7.6 5.9 5.8
total
-------------------------------------------------------------------------------
Current
liabilities
-------------------------------------------------------------------------------
Trade and 16.4 59.9 58.5 51.2 45.4
other payables
-------------------------------------------------------------------------------
Financial
liabilities at
fair value 0.0 0.2 0.2 0.4 0.0
through profit
or loss
-------------------------------------------------------------------------------
Provisions 2.2 2.7 2.6 2.5 3.0
-------------------------------------------------------------------------------
Interest-
bearing loans 6.7 4.6 4.5 4.3 10.9
and borrowings
-------------------------------------------------------------------------------
Current
liabilities 25.2 67.4 65.8 58.3 59.3
total
-------------------------------------------------------------------------------
Total 26.2 75.4 73.4 64.3 65.1
liabilities
-------------------------------------------------------------------------------
Liabilities
classified as 55.4
held for sale
-------------------------------------------------------------------------------
TOTAL EQUITY AND 176.2 172.4 166.8 150.2 148.4
LIABILITIES
-------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH 4-6/2015 1-3/2015 10-12/2014 7-9/2014 4-6/2014
FLOWS BY QUARTER
3 months 3 months 3 months 3 months 3 months
-------------------------------------------------------------------------------
Net cash from operating -12.2 10.9 5.4 20.5 -9.7
activities
-------------------------------------------------------------------------------
Net cash from investing -2.5 -4.1 -2.6 -3.9 -1.7
activities
-------------------------------------------------------------------------------
Net cash from financing 6.1 0.4 -0.2 -6.7 -0.3
activities
-------------------------------------------------------------------------------
Net change in cash and cash -8.6 7.3 2.5 9.8 -11.6
equivalents
-------------------------------------------------------------------------------
FINANCIAL PERFORMANCE RELATED RATIOS 1-6/2015 1-6/2014 1-12/2014
6 months 6 months 12 months
-------------------------------------------------------------------------------
STATEMENT OF COMPREHENSIVE INCOME (MEUR)
-------------------------------------------------------------------------------
Net sales 30.4 26.6 52.7
-------------------------------------------------------------------------------
Operating profit (loss) 1.5 -2.1 0.8
-------------------------------------------------------------------------------
Operating profit (loss), % of net sales 4.9 -7.7 1.5
-------------------------------------------------------------------------------
Profit before taxes 1.1 -2.2 0.6
-------------------------------------------------------------------------------
Profit before taxes, % of net sales 3.8 -8.4 1.2
-------------------------------------------------------------------------------
Profit for the period from continuing operations 1.1 -2.3 1.3
-------------------------------------------------------------------------------
PROFITABILITY AND OTHER KEY FIGURES
-------------------------------------------------------------------------------
Interest-bearing net liabilities, (MEUR) -22.5 -17.1 -35.0
-------------------------------------------------------------------------------
Net gearing, -% -23.8 -20.6 -37.4
-------------------------------------------------------------------------------
Equity ratio, % 59.9 61.7 62.3
-------------------------------------------------------------------------------
Gross investments, (MEUR) 5.2 1.4 4.5
-------------------------------------------------------------------------------
Average personnel during the period, continuing 509 495 486
operations
-------------------------------------------------------------------------------
Personnel at the period end, continuing operations 516 484 474
-------------------------------------------------------------------------------
Average personnel during the period, discontinued 1375 1165 1222
operations
-------------------------------------------------------------------------------
Personnel at the period end, discontinued 1406 1177 1330
operations
-------------------------------------------------------------------------------
Average personnel during the period, jointly owned 465 350 380
company - discontinued operations
-------------------------------------------------------------------------------
Personnel at the period end, jointly owned company 491 372 431
- discontinued operations
-------------------------------------------------------------------------------
AMOUNT OF SHARE ISSUE ADJUSTMENT Jun. 30, 2015 Jun. 30, 2014 Dec. 31, 2014
(1,000 pcs)
-------------------------------------------------------------------------------
At the end of period 132 541 131 191 131 493
-------------------------------------------------------------------------------
Average for the period 131 862 130 693 130 975
-------------------------------------------------------------------------------
Average for the period diluted with 132 054 131 462 131 663
stock options
-------------------------------------------------------------------------------
STOCK-RELATED FINANCIAL RATIOS (EUR) 1-6/2015 1-6/2014 1-12/2014
6 months 6 months 12 months
-------------------------------------------------------------------------------
Earnings per share from continuing operations, EUR
-------------------------------------------------------------------------------
Basic earnings per share 0.009 -0.017 0.010
-------------------------------------------------------------------------------
Diluted earnings per share 0.009 -0.017 0.010
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Earnings per share from discontinued operations,
EUR
-------------------------------------------------------------------------------
Basic earnings per share 0.029 0.044 0.086
-------------------------------------------------------------------------------
Diluted earnings per share 0.029 0.044 0.085
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Earnings per share from continuing and
discontinued operations, EUR
-------------------------------------------------------------------------------
Basic earnings per share 0.037 0.027 0.096
-------------------------------------------------------------------------------
Diluted earnings per share 0.037 0.027 0.095
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Equity *) per share 0.71 0.64 0.71
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
*) Equity attributable to equity holders of the
parent
-------------------------------------------------------------------------------
MARKET VALUES OF SHARES (EUR) 1-6/2015 1-6/2014 1-12/2014
6 months 6 months 12 months
------------------------------------------------------------------
Highest 5.30 3.23 3.83
------------------------------------------------------------------
Lowest 3.27 2.35 2.30
------------------------------------------------------------------
Average 4.37 2.71 2.85
------------------------------------------------------------------
At the end of period 4.70 2.69 3.36
------------------------------------------------------------------
------------------------------------------------------------------
Market value of the stock, (MEUR) 622.9 352.9 441.8
------------------------------------------------------------------
Trading value of shares, (MEUR) 193.8 112.1 188.0
------------------------------------------------------------------
Number of shares traded, (1,000 pcs) 44 365 41 335 66 019
------------------------------------------------------------------
Related to average number of shares % 33.6 31.6 50.4
------------------------------------------------------------------
SECURITIES AND CONTINGENT Jun. 30, 2015 Jun. 30, 2014 Dec. 31, 2014
LIABILITIES (MEUR)
-------------------------------------------------------------------------------
AGAINST OWN LIABILITIES
-------------------------------------------------------------------------------
Floating charges 3.0 18.0 1.0
-------------------------------------------------------------------------------
Guarantees 6.6 15.2 6.4
-------------------------------------------------------------------------------
Rental liabilities
-------------------------------------------------------------------------------
Falling due in the next year 7.3 7.5 7.2
-------------------------------------------------------------------------------
Falling due after one year 13.5 15.4 13.0
-------------------------------------------------------------------------------
Other contractual liabilities
-------------------------------------------------------------------------------
Falling due in the next year 2.5 0.7 2.1
-------------------------------------------------------------------------------
Falling due after one year 0.5 0.4 0.7
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Mortgages are pledged for 3.0 11.1 2.6
liabilities totaled
-------------------------------------------------------------------------------
NOMINAL VALUE OF CURRENCY Jun. 30, 2015 Jun. 30, 2014 Dec. 31, 2014
DERIVATIVES (MEUR)
-------------------------------------------------------------------------------
Foreign exchange forward contracts
-------------------------------------------------------------------------------
Market value 0.0 -0.0 -0.1
-------------------------------------------------------------------------------
Nominal value 1.5 6.0 3.0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Purchased currency options
-------------------------------------------------------------------------------
Market value 0.0 0.1 0.0
-------------------------------------------------------------------------------
Nominal value 1.5 5.0 5.0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Sold currency options
-------------------------------------------------------------------------------
Market value -0.0 -0.0 -0.1
-------------------------------------------------------------------------------
Nominal value 3.0 8.0 10.0
-------------------------------------------------------------------------------
[HUG#1943964]
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