2016-02-18 07:00:20 CET
2016-02-18 07:00:20 CET
REGULATED INFORMATION
Bittium Oyj - Financial Statement Release
Bittium Corporation Financial Statement Bulletin 2015
Stock exchange release
Free for publication on February 18, 2016 at 8.00 am (CET+1)
Bittium Corporation Financial Statement Bulletin 2015
Net sales of 2015 grew and operating profit improved from the previous year
In this Financial Statement Bulletin reported continuing operations include
previously reported Wireless business and corporate functions, and the
Automotive business, sold on July 1, 2015, is reported as discontinuing
operations. Cash flow includes both continuing and discontinuing operations.
Changing the name from Elektrobit Corporation to Bittium Corporation came into
force on July 1, 2015. In this Financial Statement Bulletin the name Bittium is
also used in the events before the change of the company name.
Summary October-December 2015, continuing operations
· Net sales was EUR 15.2 million (EUR 16.1 million, 4Q 2014), representing
decrease of 5.5 % year-on-year.
· Operating result was EUR 0.8 million (EUR 1.8 million, 4Q 2014, including
non-recurring costs of EUR 0.6 million resulting from Wireless Business
Segment’s personnel layoffs and from the acquisition costs of SafeMove
business).
· Net cash flow was EUR -494.7 million (EUR 2.5 million, 4Q 2014, including
both continuing and discontinuing operations). Net cash flow included the
voluntary public tender offer for the company’s own shares and stock options and
costs resulted from it and the company’s cash decreased by a total of EUR 493.5
million.
· Earnings per share were EUR 0.018 (EUR 0.018, 4Q 2014).
· During the fourth quarter the number of Bittium’s shares increased by
altogether 26,800 new shares subscribed by virtue of the stock option rights
2008C. At the end of the period, the number of shares in Bittium Corporation
totaled 35,600,168.
· The voluntary public tender offer for company’s own shares and stock options
that began during the third quarter, on September 25, and was completed on
October 21, as the company announced that according to the final result of the
offer, 97,244,662 shares were tendered in the offer, representing approximately
73.2 percent of all the shares and votes in the company. In addition, 166,694
stock options were tendered in the offer, representing approximately 62.0
percent of all the stock options in the company. As a result of completing the
offer the cash balance and equity of the company decreased by a total of EUR
493.5 million, including costs resulting from the process.
· On October 22, the company announced to have received flagging announcements
pursuant to chapter 9, section 5 of the Finnish Securities Market Act, according
to which the holdings of Kai Hildén, Eero Halonen, Erkki Veikkolainen and Juha
Hulkko in Bittium decreased below the threshold of 5 percent of the voting
rights and total number of shares of the company.
· On October 27, the company announced to have cancelled its own shares and
stock options 2008C as a result of the completion of a voluntary public tender
offer for the company's own shares and stock options. In accordance with the
terms and conditions of the offer, the shares and stock options transferred in
the offer became null and void as part of the settlement of the completion
trades of the offer. As a result of the shares and stock options becoming null
and void, the number of company's remaining shares was 35,578,835, and the
number of company's all remaining stock options was 102,300. Settlement of 5,467
shares to be transferred in the offer was not completed within the same
timetable as the settlement of the other shares transferred, and such shares did
not become null and void.
· On October 28, the company announced that as the voluntary public tender
offer for its own shares and stock options 2008C, decided by the Extraordinary
General Meeting of the company on September 14, 2015, resulted in changes in the
ownership of the company, and the company announced the changes with regards to
its ten largest shareholders resulting from completing the offer.
· On October 28, the company announced to have received a flagging
announcement pursuant to chapter 9, section 5 of the Finnish Securities Market
Act, according to which the holdings of Jukka Harju in Bittium decreased below
the threshold of 5 percent of the voting rights and total number of shares of
the company.
· On November 4, the company announced to have cancelled 5,467 own shares
transferred in the offer, that didn’t became null and void on October 27, 2015
in connection with the completion of the offer. After these shares became null
and void, the number of company's remaining shares was 35,598,368, and the
number of company's all remaining stock options was 102,300.
· On November 5, Bittium Corporation's new Board of Directors commenced its
term that will continue until the close of the next Annual General Meeting. In
the assembly meeting on the same day, the Board of Directors elected Erkki
Veikkolainen as the Chairman of the Board. Further, the Board of Directors
resolved to elect Staffan Simberg (Chairman of the committee) and Kirsi Komi as
members of the Audit and Financial Committee and to invite to the Audit and
Financial Committee the former Chairman of the Board of Directors Seppo Laine as
external advisor of the Board of Directors.
· On December 7, Bittium announced to have received a purchase order from the
Finnish Defence Forces for the Bittium Tactical Wireless IP Network (TAC WIN)
system products, which are meant for tactical communication. The value of the
received purchase order was EUR 5.1 million (excl. VAT). The order had no
significant impact on Bittium's net sales, operating result or financial
standing, and it did not change Bittium's financial outlook for the year 2015.
· On December 23, Bittium Technologies Ltd and NCC Rakennus Oy signed a
contract to build new facilities for Bittium in Oulu, Finland. The agreement is
a design and construct contract in nature and the cost will be approximately EUR
13 million. The new facilities will be ready for use by the end of 2017 and will
consist of approximately 8,600 square meters. It will be located at the
intersection of Ritaharjuntie and Tietolinja in Oulu. The total cost of the
project is approximately EUR 15 million including land property and fittings.
The project will be financed from the company's existing financing structure as
the project moves forward. The company expects to streamline its operations and
save costs from 2018 onwards once the project has been completed.
GROUP (MEUR)Continuing operations 10-12/2015 10-12/2014
3 months 3 months
NET SALES 15.2 16.1
Change of net sales, % -5.5 % -12.1 %
OPERATING PROFIT / LOSS 0.8 1.8
Operating profit / loss, % of net sales 5.2 % 11.0 %
Operating profit / loss without non-recurring items 0.8 2.4
EBITDA 1.6 2.3
CASH AND OTHER LIQUID ASSETS 122.8 43.3
EQUITY RATIO (%) 90.5 % 62.3 %
EARNINGS PER SHARE (EUR) 0.018 0.018
Summary January-December 2015, continuing operations
· Net sales grew to EUR 56.8 million (EUR 52.7 million, in 2014), representing
an increase of 7.8 percent year-on-year.
· Operating profit was EUR 2.3 million (EUR 0.8 million, in 2014, including
the non-recurring income of EUR 1.1 million resulting from the reorganization
cases of the TerreStar Companies, EUR 0.6 million non-recurring costs resulting
from Wireless Business Segment’s personnel layoffs and from the acquisition
costs of SafeMove business). The operating result includes EUR 0.4 million costs
related to the change of the company name.
· Net cash flow was EUR 79.5 million (EUR 0.3 million, in 2014). Net cash
flow includes the dividend payment of EUR 5.3 million in April, the cash flow of
the Automotive business until June 30, 2015, and the cash flows related to the
sale of the Automotive business and the cancelled demerger process, as well as
cash flows resulting from the voluntary public tender offer for company’s own
shares and stock options and from the costs resulting from the process.
· Earnings per share were EUR 0.020 (EUR 0.010, in 2014).
· The number of Bittium’s shares decreased by 97,244,662 shares in total as a
result of cancelling its own shares and stock options following the voluntary
public tender offer.
· The number of Bittium’s shares increased by 1,351,686 new shares in total
subscribed by virtue of the stock option rights 2008B and 2008C.
· At the end of the reporting period, the number of shares in Bittium
Corporation was 35,600,168.
GROUP (MEUR)Continuing operations 1-12/2015 1-12/2014
12 months 12 months
NET SALES 56.8 52.7*
Change of net sales, % 7.8 % -13.7 %
OPERATING PROFIT / LOSS 2.3 0.8
Operating profit / loss, % of net sales 4.1 % 1.5 %
Operating profit / loss without non-recurring items 2.3 0.3
EBITDA 4.8 3.1
CASH AND OTHER LIQUID ASSETS 122.8 43.3
EQUITY RATIO (%) 90.5 % 62.3 %
EARNINGS PER SHARE (EUR) 0.020 0.010
*) 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 to the Automotive Business Segment.
Bittium’s CEO Hannu Huttunen
The year 2015 was marked with big structural changes in Bittium: the sale of the
Automotive business and the new company name. The distribution of the proceeds
from the sale was executed during the third and fourth quarters of the year
through a voluntary public tender offer for the company’s own shares and stock
options. The offer was executed in October resulting to a decrease of EUR 493.5
million in total in the company’s cash balance and equity. The total number of
shares decreased and was 35,600,168 at the end of the year.
In 2015, the net sales grew by 7.8 percent from the previous year and was EUR
56.8 million. The share of the product-based net sales was EUR 13.1 million.
Operating profit grew and was EUR 2.3 million.
In the fourth quarter of 2015, the net sales decreased by 5.5 percent from the
previous year and was EUR 15.2 million. The share of the product-based net sales
was EUR 1.8 million, which was due to the timing of the product deliveries
significantly lower than in the previous year. Operating profit was EUR 0.8
million.
In 2015 we continued our R&D investments in our own products and product
platforms aiming at growth especially in the international defense, information
security and public safety markets. The R&D phase of secure Bittium Tough
Mobile™ LTE smartphone, targeted for the mobile security and public safety
markets was finalized and the first product deliveries were made at the end of
the year. We also launched Bittium Secure Suite ™, certified device management
and encryption software that complements the Bittium Tough Mobile smartphone by
improving the security of the device with new software and services, such as
secure data transfer and remote management.
Bittium Tough Mobile and related management system and VPN encryption, Bittium
Secure Suite, was the first mobile solution to receive official encryption
product classification in Finland. With this mobile solution classified material
can be transferred between Bittium Tough Mobile smartphone and connected back
-end solutions on top of creating and processing of classified information.
Bittium Tough Mobile has generated lots of interest in the markets; however, the
sale of the device is expected to develop moderately according to the pace of
the authorities markets.
Bittium Secure Suite is based on the Bittium SafeMove® high-end security
solutions that we acquired in January 2015. SafeMove products and services have
strengthened Bittium’s competitiveness as a provider of secure communication
solutions. Bittium SafeMove software is being used also in securing the
connections in our own IoT (Internet of Things) services and solutions.
The demand for Bittium’s R&D services has remained stable. In the beginning of
May we announced a major deal with the Ministry of Mexican Communication and
Transportation to develop Android-based mobile devices that use both terrestrial
and satellite connection for their MEXSAT system. Due to the failed launch of
the customer’s first satellite the overall project schedule was delayed,
nevertheless the development work of the devices has continued well during the
year.
The development of the tactical communication system Bittium Tactical Wireless
IP Network™ (TAC WIN), used by the Finnish Defence Forces, continued. We also
continued the product deliveries for the communication system during 2015, and
at the end of the year we received an order for a new system product delivery
for 2016. In the fourth quarter we received an order from the Finnish Defence
Forces for the further development of the TAC WIN waveform, and an order to
productize the European high data rate radio waveform developed in the ESSOR
program to the Bittium TAC WIN system used by the Finnish Defence Forces.
We continued our efforts to bring our defense market targeted product portfolio
to the international defense markets, and delivered our first pilot delivery of
our Tactical Wireless IP Network system to a customer abroad. We aim for similar
international openings during this year. The sales cycles in the defense markets
are long by their nature and winning significant deals take several years.
At the end of the year we made a decision to build new facilities for Bittium in
Oulu. The plans for the new facilities are based on centralizing the operations
to improve efficiency and to achieve cost savings. The agreement signed with NCC
Rakennus Oy is a design and construct contract by nature. The facilities will be
ready for use by the end of the year 2017 and will be located at the
intersection of Ritaharjuntie and Tietolinja in Oulu. The new facilities will
consist of approximately 8,600 square meters, and the total cost of the project
is approximately EUR 15 million including land property and fittings.
We have been able to turn Bittium to growth path. We are pleased with increase
of our net sales as well as with the improvement in the operating result during
the last year. This year, the focus will be at the internationalization and
enabling growth. We will be investing in developing our operations further for
long-term growth, which affects also to the operating result outlook for the
year 2016. We will also continue to look for inorganic growth opportunities
according to our strategic guidelines.
The growing need for wireless connectivity, increasingly growing amount of data
transfer and the need for secure data transfer create demand for Bittium’s
competence, products and product platforms, and Bittium has good conditions to
continue its success also in the future.
Outlook for 2016
Bittium expects that the net sales in 2016 will grow from the previous year (net
sales of EUR 56.8 million, in 2015). The development of the operating result
includes currently many uncertainties and therefore the company has now decided
not to give guidance on the development of the operating result. These
uncertainties include possible non-recurring investments in building long-term
growth and significant variations in the operating result between the quarters
due to the timing of product deliveries.
More information about Bittium’s market outlook is presented in the section
“Market outlook” in this Financial Statement Bulletin.
More information about other uncertainties regarding the outlook is presented in
this Financial Statement Bulletin, in the section "Risks and uncertainties" and
on the company's internet pages at www.bittium.com.
Invitation to a press conference
Bittium will hold a press conference on the Financial Statement Bulletin 2015
for media, analysts and institutional investors in Restaurant Savoy,
Eteläesplanadi 14, Helsinki, Finland, on Thursday February 18, 2016 at 9.30 am
(CET+1). The press conference will be held in Finnish.
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 8125, confirmation code is
"Bittium". The conference can also be followed live as an audiocast, accessible
at www.bittium.com/investors. The conference call will be held in English.
A recording of the audiocast and the presentation will be available after the
conference on Bittium's website at www.bittium.com/investors.
Bittium
Bittium specializes in the development of reliable, secure communications and
connectivity solutions leveraging its 30 years legacy of expertise in advanced
radio communication technologies. Bittium provides innovative products and
customized solutions based on its product platforms and R&D services
complementing its communications and connectivity solutions. Bittium offers
proven information security solutions for mobile devices and portable computers.
Net sales of continuing operations in 2015 was EUR 56.8 million and operating
profit was EUR 2.3 million. Bittium is listed on Nasdaq Helsinki.
www.bittium.com
Bittium Corporation’s Financial Statement Bulletin 2015
In this Financial Statement Bulletin reported continuing operations include
previously reported Wireless business and corporate functions, and the
Automotive business, sold on July 1, 2015, is reported as discontinuing
operations. Cash flow includes both continuing and discontinuing operations.
Changing the name from Elektrobit Corporation to Bittium Corporation came into
force on July 1, 2015. In this Financial Statement Bulletin report the name
Bittium is also used in the events before the change of the company name.
Financial performance in January-December 2015
Bittium’s net sales from continuing operations during January-December 2015 grew
by 7.8 percent year-on-year to EUR 56.8 million (EUR 52.7 million, in 2014). The
growth in net sales was mainly driven by the deliveries of special terminal
products and related R&D services, as well as other products for authorities
use.
The share of the product-based net sales was EUR 13.1 million (EUR 14.1 million,
in 2014), which resulted mainly from the product deliveries of the tactical
communication system to the Finnish Defence Forces and from a similar but small
pilot system delivery for a customer abroad, as well as from the delivery of
other terminal products for the authority use. The decrease in the product-based
net sales was caused by the decrease in the amount of product deliveries to the
Finnish Defence Forces compared to the previous year.
Operating profit from continuing operations was EUR 2.3 million (EUR 0.8
million, in 2014, including the non-recurring income of EUR 1.1 million
resulting from the reorganization cases of the TerreStar Companies, EUR 0.6
million non-recurring costs resulting from Wireless Business Segment’s personnel
layoffs and from the acquisition costs of SafeMove business). The operating
result includes EUR 0.4 million costs related to the change of the company name.
The improvement in the operating result was due to the growth in net sales and
slightly higher gross margin than quarterly periods usually.
CONSOLIDATED STATEMENT OF COMPREHENSIVE 1-12/2015 1-12/2014
INCOME, MEUR 12 months 12 months
CONTINUING OPERATIONS
Net sales 56.8 52.7
Operating profit / loss 2.3 0.8
Financial income and expenses -0.2 -0.2
Result before tax 2.1 0.6
RESULT FOR THE PERIOD FROM CONTINUING OPERATIONS 2.3 1.3
RESULT FOR THE PERIOD FROM DISCONTINUING OPERATIONS 539.0 11.2
RESULT FOR THE PERIOD 541.3 12.5
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 541.5 12.9
Result for the period attributable to:
Equity holders of the parent 541.3 12.5
Non-controlling interests
Total comprehensive income for the period attributable to:
Equity holders of the parent 541.5 12.9
Non-controlling interests
Earnings per share from continuing operations, EUR 0.020 0.010
· Cash flow from operating activities was EUR 2.1 million (EUR 10.5 million,
in 2014). The cash flow includes the operating cash flow of the Automotive
business until June 30, 2015.
· Net cash flow was EUR 79.5 million (EUR 0.3 million, in 2014). Net cash flow
includes the dividend payment of EUR 5.3 million in April, the cash flow of the
Automotive business until June 30, 2015, and the cash flows related to the sale
of the Automotive business and cancelled demerger process, as well as cash flows
resulting from the voluntary public tender offer for the company’s own shares
and stock options and from the costs resulting from the process.
· Equity ratio was 90.5 % (62.3 %, December 31, 2014).
· Net gearing was -88.2 % (-37.4 %, December 31, 2014).
· The key figures January-December 2015 mentioned above are essentially
affected by the sale of the Automotive business and thereof received net
proceeds.
Quarterly figures
GROUP’S NET SALES AND 4Q 3Q 2Q 1Q 4Q
OPERATING RESULT, /15 /15 /15 /15 /14
CONTINUING OPERATIONS,
MEUR
Net sales 15.2 11.1 15.3 15.1 16.1
Operating profit (loss) 0.8 0.0 1.0 0.5 1.8
Operating profit (loss) 0.8 0.0 1.0 0.5 2.4
without non-recurring
costs
Result before taxes 0.9 0.1 0.8 0.4 1.6
Result for the period 1.1 0.1 0.8 0.4 2.4
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 the 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 the
Wireless Business Segment’s personnel layoffs and from the acquisition costs of
SafeMove during the last quarter of 2014.
DISTRIBUTION OF NET SALES 4Q/15 3Q/15 2Q/15 1Q/15 4Q/14
BY MARKET AREAS,
MEUR AND %
Asia 0.0 0.1 0.1 0.0 0.2
0.0 % 0.6 % 0.6 % 0.2 % 1.5 %
Americas 2.9 1.0 2.2 2.1 0.6
19.2 % 9.1 % 14.6 % 14.2 % 3.5 %
Europe 12.3 10.1 13.0 13.0 15.3
80.7 % 90.4 % 84.9 % 85.6 % 94.9 %
The relative share of the distribution of the net sales between Europe and
Americas has been specified for 2Q/15 and 3Q/15.
Research and development
Bittium continued its R&D investments in products and product platforms mainly
for the defense and public safety markets. R&D investments mainly focused on
developing the Bittium Tough Mobile, a high security level LTE smartphone,
targeted mainly for the demanding mobile security and public safety use. A
significant part of these capitalized R&D investments is related to the
development of the Bittium Tough Mobile product.
R&D INVESTMENTS, MEUR 10-12/2015 10-12/2014 1-12/2015 1-12/2014
3 months 3 months 12 months 12 months
Total R&D investments 1.9 2.0 7.3 6.9
Capitalized R&D -0.6 -0.8 -3.4 -2.1
investments
Depreciations of R&D 0.1 0.0 0.2 0.1
investments
Cost impact on income 1.4 1.3 4.2 4.9
statement
R&D investments, % of 12.7 % 12.2 % 12.9 % 13.0 %
net sales
CAPITALIZED R&D 10-12/2015 10-12/2014 1-12/2015 1-12/2014
INVESTMENTS
IN BALANCE SHEET, MEUR
3 months 3 months 12 months 12 months
Balance sheet value in 5.1 1.5 2.2 0.3
the beginning
of the period
Additions during the 0.6 0.8 3.4 2.1
period
Acquisitions of the 0.3
business
Depreciations of R&D -0.1 -0.0 -0.2 -0.1
investments
Balance sheet value at 5.6 2.2 5.6 2.2
the end of the period
Business development in October-December 2015
Bittium’s net sales during October-December 2015 decreased by 5.5 percent year
-on-year to EUR 15.2 million (EUR 16.1 million, 4Q 2014). The decrease in the
net sales, compared to the corresponding period of the previous year, was caused
by the variation in the amount of product deliveries between the quarters to the
Finnish Defence Forces. The share of the product-based net sales was EUR 1.8
million (EUR 6.3 million, 4Q 2014), which resulted mainly from the product
deliveries of terminal products for the authority use.
Operating profit during October-December 2015 was EUR 0.8 million (EUR 1.8
million, 4Q 2014, including non-recurring costs of EUR 0.6 million resulting
from Wireless Business Segment’s personnel layoffs and from the acquisition
costs of SafeMove business).
In the fourth quarter Bittium launched Bittium Secure Suite device management
and encryption software that complements Bittium Tough Mobile smartphone with
new software and services. Bittium Secure Suite enables the most effective usage
of the device security features, secure remote management, remote attestation
and securing the data network connections of the device. Bittium Tough Mobile
smartphone together with Bittium Secure Suite form a unique, complete, reliable
system for processing and transferring sensitive and classified material and
securing critical communication.
In December the Finnish Communications Regulatory Authority granted approval for
the Mobile Security and Public Safety targeted Bittium Tough Mobile LTE
smartphone and related device management and information security management
system to process National classification level IV (ST IV, national restricted)
material. Bittium's mobile solution is the first product to receive an official
encryption product classification in Finland, which can on top of creating and
processing of classified information also transfer material between a smartphone
and connected back-end solutions.
Towards the end of the year the R&D phase of Bittium Tough Mobile was finalized
and the product deliveries started in a form of small pilot orders, mainly for
customers abroad. In November Bittium exhibited the phone at the British APCO
exhibition in Newcastle, UK, targeted for Public Safety officials. The
authorities markets are slowly developing markets by nature and the sale of
Bittium Tough Mobile is expected to develop steadily along the market
development pace.
The development of the tactical communication system Bittium Tactical Wireless
IP Network (TAC WIN), was continued during the fourth quarter and Bittium
received from the Finnish Defence Forces a new order for system product
deliveries for 2016. During the quarter Bittium also received an order from the
Finnish Defence Forces for further development of the TAC WIN waveform to
enhance the system with additional features and optimized performance. The
Finnish Defence Forces also ordered a productization of the European high data
rate radio waveform developed in the ESSOR program to the Bittium TAC WIN system
used by the Finnish Defence Forces.
Bittium also continued its efforts to bring the defense market targeted product
portfolio to the international defense markets, and delivered the first pilot
delivery of its Tactical Wireless IP Network system for a customer abroad. The
company aims at other similar international openings during this year as well.
Bittium exhibited its tactical communications products at the AUSA (Association
of the United States Army) Annual Meeting & Exposition in October in Washington
D.C., USA. The sales cycles in the defense markets are long by their nature and
winning significant deals take several years.
The demand for Bittium’s R&D services for mobile infrastructure customers
continued stable during the fourth quarter. The demand was driven by the use of
LTE technology and the need to develop smaller LTE base stations. The
development of the mobile devices for Mexican government authority continued
well during the fourth quarter.
Significant events during the reporting period
A total of 1,351,686 new shares in Bittium Corporation were subscribed between
December 15, 2014 and November 30, 2015 by virtue of the option rights 2008B and
2008C. The share subscription price, EUR 823,438.10 was recorded in the
company's invested non-restricted equity fund. The corresponding increase in the
number of the company's shares were entered into the Finnish Trade Register on
February 6, April 14, June 24, September 1, October 29,and December 11, 2015.
Shareholder rights by virtue of the new shares commenced as of the
abovementioned registration entry date. Trading with the newly registered shares
started on February 9, April 15, June 25, September 2, October 30 and December
14 as an additional lot of Bittium Corporation's shares in NASDAQ OMX Helsinki
Ltd. On December 31, 2015, after the registration of the new shares, and
cancelling the shares acquired through the voluntary public tender offer, the
number of shares in Bittium Corporation's totaled to 35,600,168.
On January 2 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
defense, safety and other authorities markets. At the time of the acquirement,
Birdstep Technology Oy's (currently Bittium SafeMove Oy) net sales was EUR 2.5
million in 2013 and EUR 2.9 million in 2014. The company employed 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
then Elektrobit Corporation's Wireless Business Segment would have been
transferred to Bittium Corporation, a new entity that would have been listed at
Nasdaq Helsinki. The Automotive Business Segment would have remained as a part
of the then Elektrobit Corporation, which would have continued its listing at
Nasdaq Helsinki. The partial demerger would have been set for an approval by an
extraordinary general meeting, which was planned to be held on June 11, 2015.
The planned effective date for the demerger would have been June 30, 2015. The
partial demerger process was cancelled on May 19, 2015 as the company announced
its plans to sell the Automotive business to Continental AG.
On April 29, a notice was given to the shareholders of Bittium Corporation to an
Extraordinary General Meeting that was planned to be held on June 11, 2015.
On May 2, Bittium Corporation announced that its subsidiary Bittium Wireless Ltd
and the Ministry of Mexican Communication and Transportation (Secreteria de
Comunicaciones y Transportes, SCT) had 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). More than half of the contract value is
expected to be recognized as revenue during 2016.
The Extraordinary General Meeting held on September 14, 2015 decided on the
election of new members of the Board of Directors. Kirsi Komi, Juha Putkiranta
and Seppo Mäkinen were elected as new members of the Board of Directors for a
term commencing on November 5, 2015 and continuing until the close of the next
Annual General Meeting. The new members of the Board of Directors replaced the
previous members of the Board of Directors Jorma Halonen, Juha Hulkko and Seppo
Laine, who had notified that they will leave the Board of Directors when the
term of the new members commences.
On November 5, Bittium Corporation's new Board of Directors commenced its term
that will continue until the close of the next Annual General Meeting. In the
assembly meeting on the same day, the Board of Directors elected Erkki
Veikkolainen as the Chairman of the Board. Further, the Board of Directors
resolved to elect Staffan Simberg (Chairman of the committee) and Kirsi Komi as
members of the Audit and Financial Committee and to invite to the Audit and
Financial Committee the former Chairman of the Board of Directors Seppo Laine as
the external advisor of the Board of Directors.
On December 7, Bittium announced to have received a purchase order from the
Finnish Defence Forces for the Bittium Tactical Wireless IP Network (TAC WIN)
system products, which are meant for tactical communications. The value of the
received purchase order was EUR 5.1 million (excl. VAT). The order has no
significant impact on Bittium's net sales, operating result or financial
standing, and it did not change Bittium's financial outlook for the year 2015,
published on November 5, 2015 in the Interim Report January-September 2015.
On December 23, Bittium Technologies Ltd and NCC Rakennus Oy signed a contract
to build new facilities for Bittium in Oulu, Finland. The agreement is a design
and construct contract in nature and the cost will be approximately EUR 13
million. The new facilities will be ready for use by the end of 2017 and will
consist of approximately 8,600 square meters. It will be located at the
intersection of Ritaharjuntie and Tietolinja in Oulu. The total cost of the
project is approximately EUR 15 million including land property and fittings.
The project will be financed from the company's existing financing structure as
the project moves forward. The company expects to streamline its operations and
save costs from 2018 onwards once the project has been completed.
The sale of the Automotive business to Continental AG and the related changes
On May 19, Bittium Corporation announced that 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 percent
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 would 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 the Automotive business will materialize in the
beginning of July.
The Extraordinary General Meeting of Bittium Corporation, which was held on June
11, 2015, approved the sale of the 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 Corporation'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 continued to carry on its Wireless
business and continued 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
onwards.
On July 1, Bittium stated that the outlook for 2015 had been updated 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 of the continuing
operations remained the same as given in the outlook in the stock exchange
release published on May 19, 2015. It was estimated that the transaction had 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.
On July 1, Bittium updated its strategic guidelines and outlook for 2015 due to
the sale of the Automotive business and the change of the company name. Bittium
carried on its Wireless business according to the announcements made on February
19, 2015, and according to the strategic guidelines and financial targets for
2015-2017.
On August 6, as a result from the sale of the Automotive business on July 1,
2015, the Board of Directors of Bittium Corporation decided upon nominations and
changes in the company's management. Hannu Huttunen, M.Sc. (Econ.) was appointed
CEO of Bittium Corporation as of August 7, 2015. The contract of Bittium's then
current CEO Jukka Harju terminated on August 6, 2015 by mutual consent, and he
did not continue at Bittium after August 2015.
The company also announced, that 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 decided to move to another company in November 2015 and resigned from
Bittium. He continued as Bittium's CFO until November 2015. M.Sc. (econ.) LL.M.
Pekka Kunnari was appointed as CFO of Bittium Corporation as of beginning of
November 2015. It was also decided that the Board of Directors of the Wireless
Business Segment will be discontinued, since Bittium focused on one business and
there was no need for another board in addition to the Board of Directors of
Bittium Corporation.
On August 6, Bittium also told that it plans 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. The technical
analyses regarding the execution of the possible public tender offer was
continued and also other possible ways to carry out the distribution of funds
were being evaluated simultaneously, and at that moment there was no certainty
on which distribution method the Board of Directors would propose to the
Extraordinary General Meeting. The planned distribution of funds required
preparation of separate interim accounts, after the completion of which the
Board of Directors was 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.
On August 24, Bittium told that it is planning to repurchase its own shares and
stock options for a total purchase price of approximately EUR 595 million in a
voluntary public tender offer directed to all shareholders and holders of stock
options 2008C of the company. The offer would be made at market price and the
consideration offered would be determined as the volume weighted average price
of the share based on transactions in NASDAQ OMX Helsinki Ltd over the five days
preceding the acceptance of the offer document rounded to the nearest full euro
cent. The offer would be made for a maximum of 124,747,351 shares, corresponding
approximately to 94.1 per cent of all the shares in the company on the date of
the release. The offer would also be made for a maximum of 252,648 stock
options. The offer would be executed only for the part of the consideration
payable for the shares amounting up to EUR 593,797,392.67 in the aggregate and
for the stock options amounting up to EUR 1,202,607.33 in the aggregate. A
shareholder or a holder of stock options had the option to accept the offer for
all the shares and/or stock options owned by him/her or for a number of shares
and/or stock options of his/her choosing per each book-entry account.
On August 24, the company gave a notice to its shareholders to an Extraordinary
General Meeting on the repurchase of the company's own shares and stock options
2008C entitling to shares by means of a voluntary public tender offer made to
all shareholders and holders of stock options 2008C. As part of the arrangement
to distribute the net proceeds from the sale of its Automotive business to its
shareholders, Bittium Corporation also prepared its interim financial statements
from the period of January 1 - July 1, 2015.
The Extraordinary General Meeting of Bittium Corporation, held on September 14,
2015, decided in accordance with the proposal of the Board of Directors that the
company repurchases its own shares and stock options 2008C entitling to shares
by means of a voluntary public tender offer made to all shareholders and holders
of stock options.
On September 22, the company announced that its public tender offer for own
shares and stock options will commence on September 25, 2015 and expire on
October 16, 2015. The offer price for a share was EUR 5.06 and for a stock
option EUR 4.51. The share offer price was, in accordance with the decision of
the company's Extraordinary General Meeting held on September 14, 2015, the
volume weighted average price per share based on transactions in the official
list of NASDAQ OMX Helsinki Ltd during the five trading days preceding the
acceptance of the offer document (between September, 15 - September 21, 2015),
rounded to the nearest full euro cent. The offer document, accepted by the
Finnish Financial Supervisory Authority, was available from September 23, 2015
onwards on the company’s internet pages.
On October 19, 2015 Bittium announced that according to the preliminary result
of the offer, the shares tendered in the offer represented approximately 73.2
percent of all the shares and votes in the company. In addition, according to
the preliminary result of the offer, approximately 62.0 percent of all the stock
options in the company had been tendered in the offer.
On October 21, the company announced that according to the final result of the
offer, 97,244,662 shares were tendered in the offer, representing approximately
73.2 percent of all the shares and votes in the company. In addition, 166,694
stock options were tendered in the offer, representing approximately 62.0
percent of all the stock options in the company. As a result of completing the
offer the cash balance and equity of the company will decrease by approximately
EUR 493 million. Completing the offer did not have effect on the guidance for
result of operations concerning the year 2015 previously published by the
company.
On October 22, the company announced to have received a flagging announcement
pursuant to chapter 9, section 5 of the Finnish Securities Market Act, according
to which the holdings of Kai Hildén in Bittium will decrease below the threshold
of 5 percent of the voting rights and total number of shares of the company.
On October 22, the company announced to have received a flagging announcement
pursuant to chapter 9, section 5 of the Finnish Securities Market Act, according
to which the holdings of Eero Halonen in Bittium will decrease below the
threshold of 5 percent of the voting rights and total number of shares of the
company.
On October 22, the company announced to have received a flagging announcement
pursuant to chapter 9, section 5 of the Finnish Securities Market Act, according
to which the holdings of Erkki Veikkolainen in Bittium will decrease below the
threshold of 5 percent of the voting rights and total number of shares of the
company.
On October 22, the company announced to have received a flagging announcement
pursuant to chapter 9, section 5 of the Finnish Securities Market Act, according
to which the holdings of Juha Hulkko in Bittium will decrease below the
threshold of 5 percent of the voting rights and total number of shares of the
company.
On October 27, the company announced to have cancelled its own shares and stock
options 2008C as a result of the completion of a voluntary public tender offer
for the company's own shares and stock options. In accordance with the terms and
conditions of the offer, the shares and stock options transferred in the offer
became null and void as part of the settlement of the completion trades of the
offer. As a result of the shares and stock options becoming null and void, the
number of company's remaining shares was 35,578,835, and the number of company's
all remaining stock options was 102,300. Settlement of 5,467 shares to be
transferred in the offer was not completed within the same timetable as the
settlement of the other shares transferred, and such shares had not yet become
null and void.
On October 28, the company announced that as the voluntary public tender offer
for its own shares and stock options 2008C, decided by the Extraordinary General
Meeting of the company on September 14, 2015, resulted in changes in the
ownership of the company, the company published the changes with regards to its
ten largest shareholders resulting from completing the offer.
On October 28, the company announced to have received a flagging announcement
pursuant to chapter 9, section 5 of the Finnish Securities Market Act, according
to which the holdings of Jukka Harju in Bittium will decrease below the
threshold of 5 percent of the voting rights and total number of shares of the
company.
On November 4, the company announced to have cancelled 5,467 of its own shares
transferred in the offer, that didn't became null and void on October 27, 2015
in connection with the completion of the offer. After these shares became null
and void, the number of company's remaining shares was 35,598,368, and the
number of company's all remaining stock options, as of November 4, was 102,300.
Outlook for 2016
Bittium expects that the net sales in 2016 will grow from the previous year (net
sales of EUR 56.8 million, in 2015). The development of the operating result
includes currently many uncertainties and therefore the company has now decided
not to give guidance on the development of the operating result. These
uncertainties include possible non-recurring investments in building long-term
growth and significant variations in the operating result between the quarters
due to the timing of product deliveries.
More information about Bittium’s market outlook is presented in the section
“Market outlook” in this Financial Statement Bulletin.
More information about other uncertainties regarding the outlook is presented in
this Financial Statement Bulletin, in the section "Risks and uncertainties" and
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 higher speed, higher
quality and secure data transfer. Due to the technology competence accrued over
time and long history in developing mobile communication solutions, Bittium is
in a good position to offer customized solutions for its customers.
The following factors are expected to create demand for Bittium's products and
services in 2016 and beyond:
· In the mobile infrastructure equipment market the implementation of LTE
technology continues to create demand for services in the 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 the R&D services for development of product variants. Also
the growing amount of data transfer creates need for smaller base stations for
increasing the data transfer capacity of a LTE network. The general cost savings
of the mobile infrastructure equipment companies is reflected as increasing
price competition in the R&D services. Despite of Bittium's R&D services being
competitive, the demand is expected to slightly decrease during 2016.
· The trend of using new commercial technologies, such as LTE, smartphones and
applications, is expected to continue in special verticals such as public safety
and cyber security creating demand for Bittium Tough Mobile secure LTE
smartphone and customized special terminals based on Bittium’s own product
platform. The sale of the terminal products is expected to develop moderately
according to the nature of authorities markets.
· Secure IoT (Internet of Things) has become a significant development area in
many industries. The need for Bittium’s IoT services and customized solutions is
generated by the increasing need of companies to bring connected devices for
demanding industrial or consumer usage, such as various devices, that collect
information through the device sensors and connect the device securely to the
internet and cloud services.
· In the tactical communication market in the defense sector the government’s
defense forces and other authorities need networks that increasingly moving
troops can use for transferring growing amounts of data securely. This creates
demand for Bittium’s TAC WIN broadband network and other Bittium’s IP-based
(Internet Protocol) tactical communications solutions. Due to the long sales
cycles driven by purchasing programs of national governments, it takes years to
receive significant purchase orders. Bittium continues its efforts to bring its
defense market targeted products and services also to the international defense
markets and aims at pilot deliveries of its tactical communication system for
customers abroad during 2016.
· Using public network connections in portable devices is growing 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.
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.
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 other 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
Financial Statement Bulletin 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 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 be also 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 Bittium Corporation as of July 1, 2015 and started using the new trademark.
The registration and the use of the new trademark can include customary risks
involved in taking in use a new trademark.
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 December 31,
2015, are compared with the statement of the financial position of December 31,
2014 (MEUR).
31.12.2015 31.12.2014
Non-current assets 14.4 48.8
Current assets 145.0 118.0
Total assets 159.4 166.8
Share capital 12.9 12.9
Other capital 124.6 80.5
Total equity 137.6 93.4
Non-current liabilities 2.0 7.6
Current liabilities 19.8 65.8
Total equity and liabilities 159.4 166.8
Cash flow of the review 1-12/2015 1-12/2014
period:
+ profit of the period +/- 12.2 27.4
Adjustment of accrual basis
items
+/- Change in net working -6.2 -12.1
capital
- interest, taxes and -3.9 -4.7
dividends
= net cash from operating 2.1 10.5
activities
- net cash from investing 579.6 -9.2
activities
- net cash from financing -502.2 -1.0
activities
= net change in cash and cash 79.5 0.3
equivalents
Net cash from operating activities includes operative cash flows generated by
the Automotive business during first half of the year. Net cash from investing
activities includes cash flows related to the sale of the Automotive business on
the third quarter of the year. The net cash flow from financing activities
includes the cash flow of EUR -493.5 million resulting from the repurchasing of
own shares in the voluntary public tender offer during fourth quarter.
Altogether the proceeds and costs resulting from the sale of the Automotive
business have approximately EUR 585.2 million positive effect on the cash flows
of the review period.
The amount of gross investments in the period under review was EUR 7.4 million
including EUR 1.8 million investments related to acquisitions. Net investments
for the reporting period totaled EUR 7.4 million. The total amount of
depreciation during the period under review was EUR 2.5 million. The amount of
interest-bearing debt of continuing operations, including finance lease
liabilities, was at the end of the reporting period EUR 1.4 million (EUR 8.3
million on December 31, 2014). Bittium's equity ratio at the end of the period
was 90.5 % (62.3 % on December 31, 2014). The high equity ratio is significantly
affected by the proceeds generated from the sale of the Automotive business.
Cash and other liquid assets at the end of the reporting period were EUR 122.8
million (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 are intended for general financing purposes and they are valid until
June 30, 2017. These agreements include conventional covenants and covenants
related to transfer of assets were breached at the sale of the Automotive
business on July 1, 2017. The banks have informed Bittium that they will not use
their rights to terminate credit facility agreements related to the sale of the
Automotive business. At the end of the review period, EUR 0.0 million of these
facilities were in use.
Bittium follows a hedging strategy that objective is to ensure the business
margins in changing market circumstances by minimizing the influence of exchange
rates. According to hedging strategy principles, the agreed customer
commitments’ net cash flow in the currency is hedged. The net cash flow is
determined on the basis of accounts receivable, accounts payable, order book and
budgeted net currency cash flow. The hedged foreign currency exposure was
equivalent to EUR 2.5 million at the end of the review period.
Personnel
The Bittium group employed an average of 511 people in continuing operations
between January and December 2015. At the end of December, the company had 517
employees (474 employees in continuing operations at the end of 2014). A
significant part of Bittium's personnel are R&D engineers.
Changes in the company’s management
On August 6, as a result from the sale of the Automotive business on July 1,
2015, the Board of Directors of Bittium Corporation decided upon nominations and
changes in the company's management. Hannu Huttunen, M.Sc. (Econ.) was appointed
CEO of Bittium Corporation as of August 7, 2015. The contract of Bittium's then
current CEO Jukka Harju terminated on August 6, 2015 by mutual consent, and he
did not continue at Bittium after August 2015.
The corporate functions and Wireless Business Segment's functions were also
merged and the following persons made the company's new management team as of
August 7: 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 decided to move to another company in November 2015 and
resigned from Bittium. He continued as Bittium's CFO until November 2015.
M.Sc.(econ.) LL.M. Pekka Kunnari was appointed as CFO of Bittium Corporation as
of beginning of November 2015.
It was also decided that the Board of Directors of the Wireless Business Segment
is discontinued, since Bittium focuses on one business and there was no need for
another board in addition to the Board of Directors of Bittium Corporation.
Flagging notifications
On October 22, the company announced to have received a flagging announcement
pursuant to chapter 9, section 5 of the Finnish Securities Market Act, according
to which the holdings of Kai Hilden in Bittium will decrease below the threshold
of 5 percent of the voting rights and total number of shares of the company.
On October 22, the company announced to have received a flagging announcement
pursuant to chapter 9, section 5 of the Finnish Securities Market Act, according
to which the holdings of Eero Halonen in Bittium will decrease below the
threshold of 5 percent of the voting rights and total number of shares of the
company.
On October 22, the company announced to have received a flagging announcement
pursuant to chapter 9, section 5 of the Finnish Securities Market Act, according
to which the holdings of Erkki Veikkolainen in Bittium will decrease below the
threshold of 5 percent of the voting rights and total number of shares of the
company.
On October 22, the company announced to have received a flagging announcement
pursuant to chapter 9, section 5 of the Finnish Securities Market Act, according
to which the holdings of Juha Hulkko in Bittium will decrease below the
threshold of 5 percent of the voting rights and total number of shares of the
company.
On October 28, the company announced to have received a flagging announcement
pursuant to chapter 9, section 5 of the Finnish Securities Market Act, according
to which the holdings of Jukka Harju in Bittium will decrease below the
threshold of 5 percent of the voting rights and total number of shares of the
company.
Events after the review period
The company does not have any significant events after the review period.
Proposal by the Board of Directors on the use of the profit shown on the balance
sheet and the payment of the dividend
According to the parent company’s balance sheet at December 31, 2015, the
distributable assets of the parent company are EUR 138,114,372.94 of which the
profit of the financial year is EUR 545,603,673.88.
The Board of Directors proposes that the Annual General Meeting to be held on
April 19, 2016 resolve to pay EUR 0.05 per share as dividend from the profit of
the financial period based on the adopted balance sheet for the financial period
of January 1, 2015 – December 31, 2015 and EUR 0.25 per share as additional
dividend. The dividend will be paid to the shareholders who are registered as
shareholders in the company's register of shareholders as maintained by
Euroclear Finland Ltd on the dividend record date, April 21, 2016. The Board of
Directors proposes that the dividend be paid on April 28, 2016.
There have not been any substantial changes in the company’s financial position
after the financial year. Company has good liquidity and according to the Board
of Directors, the proposed distribution of profits does not danger company’s
solvency.
Annual General Meeting and Annual Report
Bittium Corporation’s Annual General Meeting will be held on Tuesday, April 19,
2016, at 1 pm (CET+1) at the University of Oulu, Saalastinsali, Pentti Kaiteran
katu 1, 90570 Oulu, Finland. Bittium Corporation’s Annual Report, including the
Annual Accounts, the report by the Board of Directors and the Auditor’s report
as well as Corporate Governance Statement, is available on the company’s website
no later than on Wednesday, March 23, 2016.
Oulu, February 18, 2016
Bittium Corporation
The Board of Directors
Further Information:
Hannu Huttunen
CEO
Tel. +358 40 344 5466
Pekka Kunnari
CFO
Tel. +358 40 344 2229
Distribution:
NASDAQ OMX Helsinki
Major media
Bittium Corporation Condensed Financial Statements and Notes January – December
2015
The consolidated financial statement has been prepared in accordance with
International Financial Reporting Standards (IFRS). The Financial Statement of
2015 has been audited and the auditing report has been dated on February 17,
2016.
CONSOLIDATED STATEMENT OF 1-12/2015 1-12/2014
COMPREHENSIVE 12 months 12 months
INCOME (MEUR)
Continuing operations
NET SALES 56.8 52.7
Other operating income 1.4 1.6
Change in work in progress
and finished goods
Work performed by the 0.2 0.0
undertaking for its own
purpose
and capitalized
Raw materials -5.5 -6.8
Personnel expenses -30.3 -28.6
Depreciation -2.5 -2.3
Other operating expenses -17.8 -15.8
OPERATING PROFIT (LOSS) 2.3 0.8
Financial income and expenses -0.2 -0.2
PROFIT BEFORE TAX 2.1 0.6
Income tax 0.2 0.7
PROFIT FOR THE PERIOD FROM 2.3 1.3
CONTINUING OPERATIONS
Discontinued operations
Profit for the year from 539.0 11.2
discontinued operations
PROFIT FOR THE PERIOD 541.3 12.5
Other comprehensive income:
Items that will not be
reclassified to statement of
income
Re-measurement gains -0.8
(losses) on defined benefit
plans
Income tax effect 0.2
Items that may be
reclassified subsequently to
the
statement of income
Exchange differences on 0.1 0.9
translating foreign
operations
Other comprehensive income 0.1 0.4
for the period total
TOTAL COMPREHENSIVE INCOME 541.5 12.9
FOR THE PERIOD
Profit for the year
attributable to
Equity holders of the 541.3 12.5
parent
Non-controlling interests
Total comprehensive income
for the period attributable
to
Equity holders of the 541.5 12.9
parent
Non-controlling interests
Earnings per share from
continuing operations, EUR
Basic earnings per share 0.020 0.010
Diluted earnings per share 0.020 0.010
Earnings per share from
discontinued operations, EUR
Basic earnings per share 4.687 0.086
Diluted earnings per share 4.685 0.085
Earnings per share from
continuing and discontinued
operations, EUR
Basic earnings per share 4.708 0.096
Diluted earnings per share 4.706 0.095
Average number of shares, 114 983 130 975
1000 pcs
Average number of shares, 115 037 131 663
diluted, 1000 pcs
CONSOLIDATED STATEMENT OF Dec. 31, 2015 Dec. 31, 2014
FINANCIAL POSITION (MEUR)
ASSETS
Non-current assets
Property, plant and 4.1 10.7
equipment
Goodwill 1.4 19.3
Intangible assets 7.6 17.0
Other financial assets 0.1 0.1
Deferred tax assets 1.2 1.7
Non-current assets total 14.4 48.8
Current assets
Inventories 2.2 2.2
Trade and other receivables 20.0 72.5
Financial assets at fair 66.1 21.0
value through profit or loss
Cash and short term deposits 56.8 22.3
Current assets total 145.0 118.0
TOTAL ASSETS 159.4 166.8
EQUITY AND LIABILITIES
Equity attributable to equity
holders of the parent
Share capital 12.9 12.9
Invested non-restricted 25.9 25.1
equity fund
Translation difference 1.2 1.5
Retained earnings 97.5 53.8
Non-controlling interests
Total equity 137.6 93.4
Non-current liabilities
Deferred tax liabilities 0.1 0.5
Pension obligations 3.0
Provisions 1.1 0.2
Interest-bearing liabilities 0.7 3.8
Non-current liabilities total 2.0 7.6
Current liabilities
Trade and other payables 17.9 58.5
Financial liabilities at 0.2
fair value through profit or
loss
Provisions 1.2 2.6
Interest-bearing loans and 0.7 4.5
borrowings
Current liabilities total 19.8 65.8
Total liabilities 21.8 73.4
TOTAL EQUITY AND LIABILITIES 159.4 166.8
CONSOLIDATED STATEMENT OF CASH FLOWS (MEUR) 1-12/2015 1-12/2014
12 months 12 months
CASH FLOW FROM OPERATING ACTIVITIES
Profit for the year from continuing operations 2.3 1.3
Profit for the year from discontinued operations 539.0 11.2
Adjustment of accrual basis items -529.1 14.9
Change in net working capital -6.2 -12.1
Interest paid on operating activities -1.6 -1.3
Interest received from operating activities 0.9 0.4
Other financial income and expenses, net received 0.0 0.0
Income taxes paid -3.2 -3.8
NET CASH FROM OPERATING ACTIVITIES 2.1 10.5
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of business unit, net of cash sold 588.2
Acquisition of business unit, net of cash acquired -1.8
Purchase of property, plant and equipment -2.5 -3.6
Purchase of intangible assets -4.3 -5.7
Sale of property, plant and equipment 0.0 0.1
Sale of intangible assets 0.1
Proceeds from sale of investments 0.0
NET CASH FROM INVESTING ACTIVITIES 579.6 -9.2
CASH FLOW FROM FINANCING ACTIVITIES
Share-option plans exercised 0.8 0.6
Proceeds from borrowing 14.6 19.4
Repayment of borrowing -17.5 -16.6
Payment of finance liabilities -1.3 -1.8
Dividend paid and repayment of capital -5.3 -2.6
Purchase of own shares incl. transaction costs -493.5
NET CASH FROM FINANCING ACTIVITIES -502.2 -1.0
NET CHANGE IN CASH AND CASH EQUIVALENTS 79.5 0.3
Cash and cash equivalents at beginning of period 43.3 43.0
Cash and cash equivalents at end of period 122.8 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. 12.9 24.5 0.6 43.7 81.7
1, 2014
Comprehensive income for the
period
Profit for the period 12.5 12.5
Re-measurement gains -0.5 -0.5
(losses) on defined
benefit plans (IAS 19)
Exchange differences on 0.9 0.9
translating foreign
operations
Total comprehensive income 0.9 12.0 12.9
for the period
Transactions between the
shareholders
Distribution of dividend -2.6 -2.6
Share option plans 0.6 0.6
exercised
Share-related compensation 0.1 0.1
Total transactions between 0.6 -2.5 -2.0
the shareholders
Other changes 0.7 0.7
Shareholders equity on Dec. 12.9 25.1 1.5 53.8 93.4
31, 2014
A B C D E F
Shareholders equity on Jan. 12.9 25.1 1.5 53.8 93.4
1, 2015
Comprehensive income for the
period
Profit for the period 541.3 541.3
Exchange differences on 0.1 0.1
translating foreign
operations
Total comprehensive income 0.1 541.3 541.5
for the period
Transactions between the
shareholders
Distribution of dividend -5.3 -5.3
Share option plans 0.8 0.8
exercised
Share-related compensation 0.1 0.1
Purchase of own shares -493.5 -493.5
incl. transaction costs
Total transactions between 0.8 -498.8 -497.9
the shareholders
Other changes -0.5 1.1 0.6
Shareholders equity on Dec. 12.9 25.9 1.2 97.5 137.6
31, 2015
NOTES TO THE FINANCIAL STATEMENTS
ACCOUNTING PRINCIPLES FOR THE FINANCIAL STATEMENTS:
The consolidated financial statement has been prepared in accordance with
International Financial Reporting Standards (IFRS).
SEGMENT-INFORMATION (MEUR)
Bittium Corporation does not have segments that require reporting according to
IFRS 8 standard.
NET SALES OF GEOGRAPHICAL AREAS (MEUR) 1-12/2015 1-12/2014
12 months 12 months
Net sales
Europe 48.3 49.8
Americas 8.3 2.5
Asia 0.2 0.4
Net sales total 56.8 52.7
RELATED PARTY TRANSACTIONS 1-12/2015 1-12/2014
12 months 12 months
Employee benefits for key management and stock options 1.6 1.1
expenses total, continuing operations
CONSOLIDATED STATEMENT OF 10 7-9/201 4-6/2015 1-3/2015 10-12/2014
COMPREHENSIVE INCOME -12/201 5 3 months 3 months 3 months
BY QUARTER (MEUR) 5 3 month
Continuing operations 3 month s
s
NET SALES 15.2 11.1 15.3 15.1 16.1
Other operating income 0.4 0.3 0.4 0.3 0.5
Change in work in progress 0.0 0.0 0.0 0.0 0.0
and
finished goods
Work performed by the 0.1 0.0 0.0 0.1 0.0
undertaking for
its own purpose and
capitalized
Raw materials -0.9 -0.8 -1.4 -2.4 -2.1
Personnel expenses -8.4 -6.5 -7.8 -7.7 -7.5
Depreciation -0.8 -0.6 -0.6 -0.6 -0.5
Other operating expenses -4.8 -3.6 -5.0 -4.4 -4.8
OPERATING PROFIT (LOSS) 0.8 0.0 1.0 0.5 1.8
Financial income and expenses 0.1 0.1 -0.2 -0.1 -0.2
PROFIT BEFORE TAX 0.9 0.1 0.8 0.4 1.6
Income tax 0.2 0.0 -0.0 -0.0 0.7
PROFIT FOR THE PERIOD FROM 1.1 0.1 0.8 0.4 2.4
CONTINUING OPERATIONS
Discontinued operations
Profit for the period from 0.6 534.6 2.3 1.5 4.0
discontinued
operations
PROFIT FOR THE PERIOD 1.7 534.7 3.1 1.8 6.4
Other comprehensive income 0.0 -0.7 -0.5 1.2 -0.1
TOTAL COMPREHENSIVE INCOME 1.7 534.0 2.6 3.1 6.3
FOR THE PERIOD
Profit for the period
attributable to:
Equity holders of the 1.7 534.7 3.1 1.8 6.4
parent
Non-controlling interests
Total comprehensive income
for the period attributable
to:
Equity holders of the 1.7 534.0 2.6 3.1 6.3
parent
Non-controlling interests
CONSOLIDATED STATEMENT OF Dec. Sept. Jun. Mar. Dec. 31, 2014
FINANCIAL POSITION (MEUR) 31, 30, 30, 31,
2015 2015 2015 2015
ASSETS
Non-current assets
Property, plant and 4.1 3.8 3.9 10.8 10.7
equipment
Goodwill 1.4 1.4 1.4 20.6 19.3
Intangible assets 7.6 7.2 6.7 18.2 17.0
Other financial assets 0.1 0.1 0.1 0.1 0.1
Deferred tax assets 1.2 0.9 0.9 1.5 1.7
Non-current assets total 14.4 13.5 13.1 51.3 48.8
Current assets
Inventories 2.2 1.4 1.8 1.6 2.2
Trade and other receivables 20.0 15.1 22.0 69.0 72.5
Financial assets at fair 66.1 65.8 15.9 21.1 21.0
value through profit or loss
Cash and short term deposits 56.8 551.7 6.2 29.4 22.3
Current assets total 145.0 634.0 45.8 121.1 118.0
Assets classified as held for 117.3
sale
TOTAL ASSETS 159.4 647.5 176.2 172.4 166.8
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 25.9 25.9 25.8 25.6 25.1
equity fund
Translation difference 1.2 1.2 2.3 2.8 1.5
Retained earnings 97.5 589.3 53.5 55.7 53.8
Non-controlling interests
Total equity 137.6 629.3 94.5 97.0 93.4
Non-current liabilities
Deferred tax liabilities 0.1 0.1 0.1 0.8 0.5
Pension obligations 3.0 3.0
Provisions 1.1 1.2 0.2 0.2 0.2
Interest-bearing liabilities 0.7 0.7 3.7 4.1 3.8
Non-current liabilities total 2.0 2.0 1.0 8.1 7.6
Current liabilities
Trade and other payables 17.9 13.5 16.4 59.9 58.5
Financial liabilities at 0.0 0.2 0.2
fair value through profit or
loss
Provisions 1.2 2.0 2.2 2.7 2.6
Interest-bearing loans and 0.7 0.7 6.7 4.6 4.5
borrowings
Current liabilities total 19.8 16.2 25.2 67.4 65.8
Total liabilities 21.8 18.2 26.2 75.4 73.4
Liabilities classified as held 55.4
for sale
TOTAL EQUITY AND LIABILITIES 159.4 647.5 176.2 172.4 166.8
CONSOLIDATED 10-12/2015 7-9/2015 4-6/2015 1-3/2015 10-12/2014
STATEMENT OF 3 months 3 months 3 months 3 months 3 months
CASH FLOWS BY
QUARTER
Net cash from 0.3 3.1 -12.2 10.9 5.4
operating
activities
Net cash from -1.2 587.4 -2.5 -4.1 -2.6
investing
activities
Net cash from -493.8 -14.9 6.1 0.4 -0.2
financing
activities
Net change in cash -494.7 575.5 -8.6 7.3 2.5
and cash
equivalents
FINANCIAL PERFORMANCE RELATED 1-12/2015 1-12/2014
RATIOS 12 months 12 months
STATEMENT OF COMPREHENSIVE
INCOME (MEUR)
Net sales 56.8 52.7
Operating profit (loss) 2.3 0.8
Operating profit (loss), % 4.1 1.5
of net sales
Profit before taxes 2.1 0.6
Profit before taxes, % of 3.7 1.2
net sales
Profit for the period from 2.3 1.3
continuing operations
PROFITABILITY AND OTHER KEY
FIGURES
Interest-bearing net -121.4 -35.0
liabilities, (MEUR)
Net gearing, -% -88.2 -37.4
Equity ratio, % 90.5 62.3
Gross investments, (MEUR) 7.4 4.5
Average personnel during the 511 486
period, continuing operations
Personnel at the period end, 517 474
continuing operations
Average personnel during the 1222
period, discontinued
operations
Personnel at the period end, 1330
discontinued operations
Average personnel during the 380
period, jointly owned
company - discontinued
operations
Personnel at the period end, 431
jointly owned
company - discontinued
operations
AMOUNT OF SHARE ISSUE Dec. 31, 2015 Dec. 31, 2014
ADJUSTMENT (1,000 pcs)
At the end of period 35 600 131 493
Average for the period 114 983 130 975
Average for the period 115 015 131 663
diluted with stock
options
STOCK-RELATED FINANCIAL RATIOS (EUR) 1-12/2015 1-12/2014
12 months 12 months
Earnings per share from continuing operations, EUR
Basic earnings per share 0.020 0.010
Diluted earnings per share 0.020 0.010
Earnings per share from discontinued operations, EUR
Basic earnings per share 4.687 0.086
Diluted earnings per share 4.685 0.085
Earnings per share from continuing and
discontinued operations, EUR
Basic earnings per share 4.708 0.096
Diluted earnings per share 4.706 0.095
Equity *) per share 3.86 0.71
*) Equity attributable to equity holders of the parent
MARKET VALUES OF SHARES (EUR) 1-12/2015 1-12/2014
12 months 12 months
Highest 7.80 3.83
Lowest 3.27 2.30
Average 4.92 2.85
At the end of period 7.01 3.36
Market value of the stock, (MEUR) 249.6 441.8
Trading value of shares, (MEUR) 837.1 188.0
Number of shares traded, (1,000 pcs) 169 993 66 019
Related to average number of shares % 147.8 50.4
SECURITIES AND CONTINGENT LIABILITIES (MEUR) Dec. 31, 2015 Dec. 31, 2014
AGAINST OWN LIABILITIES
Floating charges 3.0 1.0
Guarantees 3.7 6.4
Rental liabilities
Falling due in the next year 2.3 7.2
Falling due after one year 2.3 13.0
Other contractual liabilities
Falling due in the next year 2.2 2.1
Falling due after one year 0.4 0.7
Mortgages are pledged for liabilities totaled 0.0 2.6
NOMINAL VALUE OF CURRENCY DERIVATIVES (MEUR) Dec. 31, 2015 Dec. 31, 2014
Foreign exchange forward contracts
Market value 0.1 -0.1
Nominal value 2.5 3.0
Purchased currency options
Market value 0.0
Nominal value 5.0
Sold currency options
Market value -0.1
Nominal value 10.0
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