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2017-08-09 07:00:12 CEST

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2017-08-09 07:00:12 CEST

REGLERAD INFORMATION

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Bittium Oyj - Half Year financial report

Bittium Corporation Half Year Financial Report January-June 2017

Stock exchange release

Free for publication on August 9, 2017 at 8am (CET+1)

Bittium Corporation Half Year Financial Report January-June 2017

Net sales in January-June 2017 decreased by 12.8 percent year-on-year and
operating result was negative

Summary January-June 2017

·
The net sales decreased by 12.8 percent year-on-year to EUR 27.1 million (EUR
31.1 million, 1H 2016).

·
The share of the product-based net sales was EUR 7.2 million (EUR 5.3 million,
1H 2016) and the share of the services-based net sales was EUR 19.7 million (EUR
25.6 million, 1H 2016).

·
Operating loss was EUR -2.8 million (operating profit of EUR 0.7 million, 1H
2016).

·
Net cash flow was EUR -21.5 million (EUR -15.1 million, 1H 2016).

·
Result for the period was EUR -2.4 million and earnings per share were EUR
-0.067 (result for the period EUR 0.9 million and earnings per share EUR 0.026,
1H 2016).

GROUP (MEUR) 1-6/2017 1-6/2016 2016
6 months 6 months 12 months
NET SALES 27.1 31.1 64.2
Change of net sales, % -12.8% 2.3% 13.0 %
EBITDA -0.9 2.1 5.8
EBITDA, % of net sales -3.3% 6.7% 9.0%
OPERATING PROFIT / LOSS -2.8 0.7 2.5
Operating profit / loss, % of net sales -10.2% 2.2% 4.0 %
RESULT OF THE PERIOD FROM CONTINUING OPERATIONS -2.4 0.9 3.5

CASH AND OTHER LIQUID ASSETS 73.4 107.7 94.9
EQUITY RATIO (%) 87.8% 88.5% 87.0 %
EARNINGS PER SHARE (EUR) -0.067 0.026 0.098

In this report, Bittium uses alternative performance measures in accordance with
the guidelines issued by the European Securities and Markets Authority (ESMA).
Alternative performance measures are derived from performance measures reported
in accordance to International Financial Reporting Standards (IFRS). Alternative
performance measures are used to better reflect the operational business
performance and to enhance comparability between financial periods. They are
reported in addition to, but not substituting, the performance measures reported
in accordance with the IFRS.

Bittium’s CEO Hannu Huttunen

The net sales of the first half of the year decreased by 12.8 percent from
previous year and was EUR 27.1 million. The net sales of service business
decreased as expected and was EUR 19.7 million being EUR 5.9 million less than
in the corresponding period last year. The decrease in the services business net
sales was caused by the termination of significant customer cooperation with a
global network equipment manufacturer. Despite of the termination of the
cooperation the demand for Bittium’s R&D services developed positively during
the first half of the year. It was, however, not able to replace the decrease in
the service-based net sales.

In line with our strategy we continued investments into our product business and
the product-based net sales turned to growth. The share of the product-based net
sales was EUR 7.2 million which was EUR 1.9 million more than in the
corresponding period last year. The increase in the net sales resulted from the
product portfolio extension to medical remote diagnostics as well as from the
increased deliveries of Bittium Tough Mobile™ LTE smartphones.

The R&D investments in own products and product platforms were 23.7 percent of
net sales. The investments focused mainly on extending the tactical
communication product offering targeted for defense industry as well as on
different terminal products and their related software development targeted for
mobile security and public safety markets. We started to develop new software
-defined radio based Bittium Touch SDR™ product family that includes tactical
handheld and vehicle radios and we continued to develop Bittium Tough Mobile
smartphone and its next generation research. We aim growth especially in the
international defense and public safety, and mobile security markets.

The operating loss was EUR -2.8 million. The loss was caused by the decrease in
the net sales and significant investments in R&D to enable long-term future
growth.

Outlook for 2017

Bittium will continue to look for inorganic growth opportunities in all its
product and service areas and is prepared to invest in acquisitions that support
its growth strategy. 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. In a long term
Bittium still has good conditions to grow profitably. Bittium aims further at
growing net sales based on its products and product platforms.

Bittium has announced earlier that it targets 10 percent annual growth in net
sales and to reach EBIT level 10 percent of net sales in the year 2017 at the
latest. The company believes that in the coming years it is able to grow its net
sales even more than the earlier announced target, and therefore sets up a
target to exceed the annual 10 percent growth target of the net sales. However,
Bittium believes, that during the year 2017 it is not yet able to reach the
targets set for the growth in the net sales and EBIT level. The reason for this
is the termination of significant customer cooperation with a global network
equipment manufacturer. To this extent this kind of extensive and rapid decrease
in the services business net sales is impossible to be replaced with other
projects in a short term, which effects directly the development of net sales
and operating result in 2017. In addition, the operating profit level of the
year 2017 is also affected by the investments started to enable future growth.

Bittium expects that the net sales in 2017 will be at the same level as in the
previous year (EUR 64.2 million, in 2016). The operating result is expected to
be negative (EUR 2.5 million, in 2016).

More information about Bittium’s market outlook is presented in the section
“Market outlook” in this Half Year Financial Report.

More information about other uncertainties regarding the outlook is presented in
this Half Year Financial Report 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 Half Year Financial Report January
-June 2017 for media, analysts and institutional investors in Restaurant Savoy,
Eteläesplanadi 14, Helsinki, Finland, on Wednesday, August 9, 2017 at 9.00am
(CEST+1). The press conference will be held in Finnish.

Bittium will also hold a telephone conference on the same day at 10.00am. The
dial-in number for the conference call is +44 203 059 8125. The 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 year legacy of expertise in advanced
radio communication technologies. Bittium provides innovative products and
services, 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.
Starting from November 2016, Bittium offers its customers also healthcare
technology products and services in biosignal measuring in the areas of
cardiology, neurology, rehabilitation, occupational health and sports medicine.
Net sales in 2016 were EUR 64.2 million and operating profit was EUR 2.5
million. Bittium is listed on Nasdaq Helsinki. www.bittium.com

Bittium Corporation’s Half Year Financial Report January-June 2017

Financial performance in January-June 2017

Bittium’s net sales during January-June 2017 decreased by 12.8 percent year-on
-year to EUR 27.1 million (EUR 31.1 million, in 1-6 2016).

The share of the product-based net sales was EUR 7.2 million (EUR 5.3 million,
in 1-6 2016), which resulted mainly from the product deliveries of the tactical
communication system, product deliveries of Bittium Tough Mobile LTE smartphones
and related security software, and deliveries of products for measuring and
monitoring biosignals. The increase in the product-based net sales year-on-year
resulted mainly from product sales in the medical business acquired at the end
of 2016 and increased deliveries of Bittium Tough Mobile LTE smartphones.

The share of the services-based net sales was EUR 19.7 million (EUR 25.6
million, in 1-6 2016). The decrease in the services business net sales was
caused by the termination of significant customer cooperation with a global
network equipment manufacturer. Bittium has won new R&D services projects for
wireless products, however, it has not been able to replace the decrease in the
net sales in total.

Operating loss was EUR -2.8 million (operating profit of EUR 0.7 million, in 1-6
2016). The loss was caused by the decrease in the net sales and significant R&D
investments.

CONSOLIDATED STATEMENT OF 1-6/2017 1-6/2016 2016
COMPREHENSIVE INCOME, MEUR
6 months 6 months 12 months
Net sales 27.1 31.1 64.2
Operating profit / loss -2.8 0.7 2.5
Financial income and 0.3 0.3 0.6
expenses
Result before tax -2.4 0.9 3.1
RESULT FOR THE PERIOD FROM -2.4 0.9 3.5
CONTINUING OPERATIONS
RESULT FOR THE PERIOD FROM 1.3
DISCONTINUING OPERATIONS
RESULT FOR THE PERIOD -1.1 0.9 3.5
TOTAL COMPREHENSIVE INCOME -1.2 0.9 3.5
FOR THE PERIOD

Result for the period
attributable to:
Equity holders of the -1.1 0.9 3.5
parent
Total comprehensive income
for the period attributable
to:
Equity holders of the -1.2 0.9 3.5
parent

Earnings per share from -0.067 0.026 0.098
continuing operations, EUR

·
Cash flow from operating activities was EUR 0.4 million (EUR 0.1 million, in 1-6
2016).

·
Net cash flow was EUR -21.5 million, including the EUR 10.7 million dividend
payment in April and the investments made into the company’s new office building
in Oulu, Finland (EUR -15.1 million, in 1-6 2016, including the EUR 10.7 million
dividend payment and the investments made into the company’s new office building
in Oulu, Finland).

·
Equity ratio was 87.8 percent (88.5 percent, June 30, 2016).

·
Net gearing was -60.6 percent (-83.0 percent, June 30, 2016).

Half year figures

GROUP’S NET SALES AND OPERATING RESULT, MEUR 1H/17 2H/16 1H/16
Net sales 27.1 33.1 31.1
Operating profit (loss) -2.8 1.9 0.7
Result before taxes -2.4 2.2 0.9
Result for the period -2.4 2.6 0.9

DISTRIBUTION OF NET SALES BY MARKET AREAS, 1H/17 2H/16 1H/16
MEUR AND %
Asia 0.3 0.2 0.5
1.1% 0.7% 1.5%
Americas 4.5 6.7 5.5
16.4% 20.2% 17.6%
Europe 22.4 26.2 25.1
82.5% 79.1% 80.8%

Research and development

Bittium continued its R&D investments in own products and product platforms. The
investments increased significantly during January-June 2017 and were 23.7
percent of net sales. The investments focused mainly on expanding the tactical
communication product portfolio targeted to defense industry and on the
development of different terminal products and their related software targeted
for mobile security and public safety markets. Bittium started to develop new
software-defined radio based Bittium Touch SDR™ product family that includes
tactical Bittium Tough SDR handheld and Bittium Tough SDR vehicle radios. In
addition Bittium continued to develop Bittium Tough Mobile smartphone and its
next generation research. The company aims growth especially in the
international defense and public safety, and mobile security markets.

A significant part of these capitalized R&D investments is related to the
further development of the Bittium Tough Mobile smartphone and the related
security software and investments related to developing tactical communication
handheld and vehicle radios.

R&D INVESTMENTS, MEUR 1-6 2017 1-6/2016 2016
6 months 6 months 12 months
Total R&D investments 6.4 3.6 6.9
Capitalized R&D investments -2.3 -0.7 -0.9
Depreciations and impairment of R&D investments 0.2 0.1 0.3
Cost impact on income statement 4.3 3.0 6.3
R&D investments, % of net sales 23.7% 11.5% 10.8 %

CAPITALIZED R&D 1-6 2017 1-6/2016 2016
INVESTMENTS IN BALANCE
SHEET, MEUR
6 months 6 months 12 months
Balance sheet value in 6.4 5.6 5.6
the beginning of the
period
Additions during the 2.3 0.7 0.9
period
Acquisitions of the 0.2
business
Depreciations and -0.2 -0.1 -0.3
impairment of R&D
investments
Balance sheet value at 8.5 6.2 6.4
the end of the period

Business development in January-June 2017

The share of the services-based net sales decreased as expected caused by the
termination of significant customer cooperation with a global network equipment
manufacturer during the first half of the year. Despite of decreased net sales
caused by the termination of the cooperation, the demand for Bittium’s R&D
services developed positively, however, it wasn’t able to replace the decrease
in the net sales in total.

The product development project for the Mexican Ministry of Communication and
Transportation, started in May 2015, has continued according to plans. Bittium
develops Android-based mobile devices that use both terrestrial and satellite
connection for their MEXSAT system. The R&D phase was completed during summer
2017 and the first product orders are expected to come shortly.

Bittium aims at growth in international defense, public safety and mobile
security markets. The company continued R&D investments to develop product
business and the product-based net sales turned to growth. The investments
focused mainly on expanding the tactical communication product portfolio
targeted to defense industry and on the development of different terminal
products and their related software targeted for mobile security and public
safety markets, such as the development of Bittium Tough Mobile smartphone and
its next generation research.

On August 8, 2017 Bittium announced to expand its tactical communication product
portfolio with new software-defined radio based Bittium Touch SDR™ product
family that includes tactical Bittium Tough SDR handheld and Bittium Tough SDR
vehicle radios. The new product family expands Bittium’s tactical communication
product portfolio to radios that bring broadband data transfer and voice to all
mobile troops; from combat vehicles to all the way to an individual soldier.

The deliveries of the Bittium Tough Mobile secure LTE smartphone were carried on
and Bittium participated in several security and public safety exhibitions
abroad in order to extend its customer base abroad. At the Critical
Communications Europe exhibition in February Bittium launched a new Confidential
classification level version of the Bittium Tough Mobile with its back-end
system. Bittium Tough Mobiles unique dual-boot functionality for the
Confidential classification level makes it possible to operate the device with
two completely separate operating systems: Public and Confidential. The
operating system classified as Public is meant for personal communications with
access to e.g. social media applications. The operating system classified as
Confidential is completely isolated and hardened for secure authority and
information security use. The entity enables the user to have only one device
for calls and messaging for both personal and for demanding information security
needs, thus eliminating the need to carry two separate devices. Although the
awareness of security threats thereafter secure mobile devices has increased,
the development of security and public safety markets has been somewhat slower
than expected. Bittium estimates that the amount of product sales of Bittium
Tough Mobile will remain slightly less than expected.

The cooperation with the Finnish Defense Forces continued. In January, Bittium
signed a contract with the Finnish Defence Forces for the delivery of Bittium
Tough Mobile LTE smartphones and related Bittium Secure Suite back-end system
classified for Confidential level. The contract signifies a strategic decision
to reinforce the information security of the wireless communications of the
Finnish Defence Forces. Bittium Tough Mobile smartphones and the related back
-end system will be used in different and diverse functions within the Finnish
Defence Forces. In order for a phone and a related back-end system to achieve
the Confidential level classification, there are specific information security
requirements regarding the processing of classified information, secure wireless
transfer of files, and other possible communication, which need to be met.
Bittium Tough Mobile and its back-end system are currently being tested by the
National Cyber Security Centre Finland, operating under the Finnish
Communications Regulatory Authority, for getting the approval for the national
classification level Confidential.

The development of the tactical communication system Bittium Tactical Wireless
IP Network™ (TAC WIN), used by the Finnish Defence Forces, continued and the
product deliveries for this communication system were continued also during the
first half of the year. In March, Bittium received a purchase order from the
Finnish Defence Forces for further development of the software package
(waveform) for the Bittium TAC WIN system. Bittium also received a purchase
order from the Finnish Defence Forces for the Bittium TAC WIN system products,
which are meant for tactical communications. Both orders are part of the renewal
of the Finnish Army’s M18 command, control and communications system, where the
Software-Defined Radio based Bittium TAC WIN system forms the core of the Army’s
tactical wireless IP network.

In June, Bittium received a purchase order for supplying the Finnish Air Force
with Bittium TAC WIN system. The order is part of the modernization of the radio
network performance of the Air Force’s bases with a Software-Defined Radio based
IP radio system. With the order the use of the Bittium TAC WIN system within the
Finnish Defence Forces’ branches expands to the Air Force.

The long-standing cooperation between Bittium and Finnish Defense Forces is
about to get continuation as on July 6, 2017 the Finnish Minister of Defence
Jussi Niinistö authorized Finnish Defence Forces to purchase Bittium TAC WIN
system products. Bittium and Finnish Defence Forces plan to sign a Framework
Agreement for the delivery of Bittium TAC WIN products, that covers years 2018
-2020, with the total value of the agreement being EUR 30 million (excl. VAT) if
materialized in full.

In addition on August 8, 2017 Bittium and Finnish Defence Forces signed a letter
of intent concerning the purchase of new software defined radio (SDR) based
tactical radios and the preparations of the purchase. The letter of intent
encompasses products belonging to the new Bittium Tough SDR product family:
tactical handheld radio Bittium Tough SDR Handheld™ and tactical vehicular radio
Bittium Tough SDR Vehicular™. The products are intended for renewing the Finnish
Defence Forces’ existing stock of field radios with modern, SDR based broadband
data transfer radios to support the reformed combat doctrine. According to the
letter of intent, Bittium will develop the products with their own R&D
investments and the Finnish Defence Forces will support the development work by
ensuring that the products are suitable for their purposes and by making
preparations for the purchase of the products.

Bittium continued efforts to bring its products and services, targeted to
defense industry, to the international defense markets and Bittium received a
purchase orders for a tactical communications system from its customer in Asia
and Europe.

The development of the medical technology business was continued and in June,
Bittium Medanalytics Oy, part of Bittium group, and Coronaria Hoitoketju’s
subsidiary Coronaria Analyysipalvelut Oy, signed agreements according to which
Bittium Medanalytics Oy sold its remote diagnostic service business to Coronaria
Analyysipalvelut Oy. According to the agreement Bittium supplies its web-based
service kardiolog.fi used in monitoring cardiac abnormalities to Coronaria’s
use. Kardiolog.fi service is used by more than 70 Finnish health centers and
private medical centers. The net sales of Bittium Medanalytics Ltd in 2016 was
EUR 0.4 million.

Further, Bittium Technologies Ltd, part of Bittium group, acquired 25 percent of
the shares in Coronaria Analyysipalvelut Oy. Through this joint ownership
Bittium and Coronaria aim at gaining synergies from Bittium’s device and system
development and the interfaces formed by Coronaria’s clinical medicine and
services.

In May, Bittium Faros ECG-measuring devices’ built-in algorithms for detection
of arrhythmias have received medical device approval in Europe. The algorithms
can be used to automatically identify sequences from the heart measurement data.
Early detection of atrial fibrillation can be used to predict the risk of brain
stroke and to prevent its emergence with timely treatment initiation.

Significant events during the reporting period

The company has no significant events during the reporting period.

Significant events after the reporting period

On July 6, 2017 Bittium announced that the Finnish Minister of Defence Jussi
Niinistö had authorized Finnish Defence Forces to purchase Bittium Tactical
Wireless IP Network™ (TAC WIN) system products. Bittium and Finnish Defence
Forces plan to sign a Framework Agreement for the delivery of Bittium TAC WIN
products, that covers years 2018-2020, with the total value of the agreement
being EUR 30 million (excl. VAT) if materialized in full. According to the
Framework Agreement, Finnish Defence Forces would issue separate purchase orders
for the products each year. The Framework Agreement will not have an effect on
Bittium's financial outlook for the year 2017.

The Framework Agreement will be a continuation to the long cooperation between
Finnish Defence Forces and Bittium. It will continue the renewal of the Finnish
Defence Forces’ command, control and communications system, where the Software
-Defined Radio based Bittium TAC WIN system acts as the backbone for tactical
data transfer.

On August 8, 2017 Bittium announced that Bittium Wireless Ltd, a subsidiary of
Bittium Corporation, and the Finnish Defence Forces have signed a letter of
intent concerning the purchase of new software defined radio (SDR) based
tactical radios and the preparations of the purchase. The letter of intent
encompasses products belonging to the new Bittium Tough SDR product family:
tactical handheld radio Bittium Tough SDR Handheld™ and tactical vehicular radio
Bittium Tough SDR Vehicular™. The products are intended for renewing the Finnish
Defence Forces’ existing stock of field radios with modern, SDR based broadband
data transfer radios to support the reformed combat doctrine. The tactical
radios are compatible with Bittium Tactical Wireless IP Network™ (TAC WIN) SDR
based system already used by the Finnish Defence Forces.

According to the letter of intent, Bittium will develop the products with their
own R&D investments and the Finnish Defence Forces will support the development
work by ensuring that the products are suitable for their purposes and by making
preparations for the purchase of the products.

The letter of intent does not bind the parties into making a purchase agreement.
Making the purchase agreement requires that the Finnish Ministry of Defence
first authorizes the purchase, based on which Bittium and the Finnish Defence
Forces would then make a separate purchase agreement. Based on the letter of
intent, if materialized in full, the total value of the purchase agreement would
be approximately EUR 130 million distributed over about 10 years. The letter of
intent is in force until the binding purchase agreement comes into effect or
until December 31, 2019. Should the purchase materialize in full, it would have
a significant impact on Bittium’s net sales from the year 2019 onward. The
letter of intent does not have an effect on Bittium’s financial outlook for the
year 2017.

Outlook for 2017

Bittium expects that the net sales in 2017 will be at the same level as in the
previous year (EUR 64.2 million, in 2016). The operating result is expected to
be negative (EUR 2.5 million, in 2016).

More information about Bittium’s market outlook is presented in the section
“Market outlook” in this Half Year Financial Report.

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 quality and secure
data transfer. Due to the technology and measuring competences 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 2017 and beyond:

·
In the mobile telecommunications, the 4G technology development work has
decreased significantly. However, the development of 5G technology has started
very well creating demand for Bittium’s R&D services. The development of 5G
technology is just at its early phase, and will not replace the amount of the 4G
development work yet. In the long term the demand for R&D service for the
network equipment manufacturers is expected to grow, however, to remain at a
lower level than in previous years.

·
As the digitalization evolves, the secure IoT (Internet of Things) has become a
significant development area in many industries. The increasing need of
companies to digitalize their operations, collect data wirelessly and transfer
it to the internet and cloud services generate need for Bittium’s services and
customized solutions. For this there is a need for secure connected devices for
consumers’ free-time applications and demanding industrial usage that collect
information through their sensors and connect the devices securely to the
internet and cloud services. Also the integration of different systems and
technologies play an important role in enabling the complete digitalization
service. To ease and speed up the processing of large data amounts there are
different kinds of learning systems and devices under development that use
different kinds of artificial intelligence (AI) technologies.

·
The use of LTE technology, smartphones and applications continues to increase in
special verticals such as public safety creating demand for Bittium Tough Mobile
secure LTE smartphone and other customized special terminals based on Bittium’s
own product platform. The awareness of mobile security risks is growing and the
interest towards secure mobile devices is increasing. Also the interest towards
LTE-SAT-hybrid devices with terrestrial and satellite connections has grown to
further improve the functionality of authorities’ critical connections. The
implementation of LTE-based devices in Public Safety markets has been slower
than expected due to the delay of the device processor functionalities required
by the authorities. The sale of the secure terminal products is expected to
develop moderately according to the nature of public safety markets.

·
Using public network connections in portable devices is increasing also in
demanding professional use, such as in the public sector. This creates
requirements for network connections to be easy to use and secure. The products
in the Bittium SafeMove product family enable the ease of use of the devices and
security in demanding use.

·
In the defense sector’s tactical communication market the governments’ defense
forces and other authorities need networks that troops, who are more and more
constantly on the move, can use for transferring growing amounts of data
securely. This creates demand for Bittium Tactical Wireless IP Network (TAC WIN)
broadband network and for other Bittium’s IP-based (Internet Protocol) tactical
communications solutions, as well as for Bittium’s new tactical communication
handheld and vehicle radios that fulfill the needs of data transfer of moving
troops or individual soldiers. Bittium continues its efforts to bring its
defense market targeted products and services also to the international defense
markets and aims to get new international customers for its tactical
communication system in 2017. Due to the long sales cycles driven by purchasing
programs of national governments, it takes time to receive significant purchase
orders.

·
Heart problems and brain strokes are among the most frequent causes of death.
Recognizing the symptoms early on, based on information gathered by measuring,
enable the start of the effective treatment fast. Also the prevention of
diseases and health problems are being increasingly invested in. In the
healthcare technology market there is ongoing a significant change in the
patient care both inside the hospitals as well as in homecare. The repatriation
of patients is being pursued earlier than before which may enable significant
cost savings in the healthcare. One of the growing application areas in the IoT
segment is healthcare technology that enables implementing these changes for its
part. A perquisite for early repatriation is the enabling of accurate and
precise follow-up and measurement in home conditions through remote monitoring.
For this purpose Bittium offers its Faros product family for heart remote
monitoring and NeurOne product family for measuring the electrical activity of
brain.

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.
Growing political uncertainty may also affect the demand for Bittium’s services,
solutions and products and the price competitiveness in the different
geographical areas.

Bittium's customer base includes, among others, companies operating in the field
of telecommunication, defense and other authorities, as well as companies
delivering products to them, the company is exposed to market changes in these
industries.

In October 2016, Bittium has received information according to which significant
customer cooperation with a global mobile network equipment manufacturer will
reduce during the year 2017. A significant part of Bittium’s net sales has
accumulated from selling R&D services to this mobile communications equipment
manufacturer. The termination of customer cooperation will have a negative
effect on Bittium’s net sales and operating result in 2017. A significant part
of Bittium´s net sales still accumulates from selling products and R&D services
to defense and other authorities, as well as companies delivering products to
them. Deviation in anticipated business development with such customer
concentrations may translate as a significant deviation in 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 would thereby be mainly affected
by the general business climate in the industries of the companies belonging to
Bittium’s customer base instead of the development of individual customer
relationships. The more specific market outlook has been presented in this Half
Year Financial Report in the "Market outlook" section.

Business related risks

Bittium's operative business risks are mainly related to following items:
uncertainties and short visibility on customers' product program decisions,
their make or buy decisions and on the other hand, their decisions to continue,
downsize or terminate current product programs, execution and management of
large customer projects, ramping up and down project resources, availability of
personnel in labor markets, accessibility on commercially acceptable terms and
on the other hand successful utilization of the most important technologies and
components, competitive situation and potential delays in the markets, timely
closing of customer and supplier contracts with reasonable commercial terms,
delays in R&D projects, realization of expected return on capitalized R&D
investments, obsolescence of inventories and technology risks in product
development causing higher than planned R&D costs, and risks related to the ramp
-up of product manufacturing. Revenues expected to come from either existing or
new products and customers include normal timing risks. Bittium has certain
significant customer projects and deviation in their expected continuation could
result also significant deviations in the company's outlook. The information
received by Bittium about the termination of significant customer cooperation
with a global mobile network equipment manufacturer during 2017 will have a
negative effect on Bittium’s net sales and operating result in 2017. 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.
From these agreements intended for general financing purposes, EUR 10.0 million
are valid until December 31, 2018 and EUR 10.0 million until December 31, 2019.
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, 2017,
are compared with the statement of the financial position of December 31, 2016
(MEUR).

30.6.2017 31.12.2016
Non-current assets 38.3 30.3
Current assets 100.4 123.0
Total assets 138.7 153.3
Share capital 12.9 12.9
Other capital 105.8 117.7
Total equity 118.7 130.6
Non-current liabilities 2.0 3.1
Current liabilities 18.0 19.6
Total equity and liabilities 138.7 153.3

Cash flow of the review period 1-6/2017 1-12/2016
:
+ profit of the period +/- -1.2 5.0
Adjustment of accrual basis
items
+/- Change in net working 1.4 -7.6
capital
- interest, taxes and 0.2 0.9
dividends
= net cash from operating 0.4 -1.7
activities
- net cash from investing -9.0 -14.5
activities
- net cash from financing -12.9 -11.6
activities
= net change in cash and cash -21.5 -27.9
equivalents

Net cash from operating activities in January-June 2017 includes operative cash
flows from both continuing and discontinuing operations.

The amount of gross investments in the period under review was EUR 10.3 million.
Net investments for the review period totaled to EUR 9.8 million. The total
amount of depreciation during the period under review was EUR 1.9 million. The
amount of interest-bearing debt, including finance lease liabilities, was at the
end of the reporting period EUR 1.5 million (EUR 3.2 million on December 31,
2016). Bittium's equity ratio at the end of the period was 87.8 percent (87.0
percent on December 31, 2016).

Cash and other liquid assets at the end of the reporting period were EUR 73.4
million (EUR 94.9 million on December 31, 2016).

In March 2017, Bittium renewed a total of EUR 20.0 million binding credit
facility agreements essentially on the old terms from which EUR 10.0 million are
valid until December 31, 2018 and EUR 10.0 million until December 31, 2019. At
the end of the review period, EUR 0.0 million of these facilities were in use.

Bittium follows a hedging strategy that has an objective to ensure the business
margins in changing market circumstances by minimizing the influence of exchange
rates. According to the hedging strategy principles, the net position in the
currency is hedged when it exceeds the euro limit defined in the hedging
strategy. The net position is determined on the basis of accounts receivable,
accounts payable, order book and budgeted net currency cash flow.

Personnel

The Bittium group employed an average of 605 people in between January and June
2017. At the end of June 2017, the company had 619 employees (623 employees at
the end of 2016). A significant part of Bittium's personnel are R&D engineers.

Flagging notifications

There were no changes in the ownership during the period under review that would
have caused flagging notifications which are obligations for disclosure in
accordance with Chapter 2, section 9 of the Securities Market Act.

Notifications of managers’ transactions

May 9, 2017: Name of the person subject to the notification requirement: Erkki
Veikkolainen, member of the Board of Directors. Notification type: initial
notification. Nature of transaction: Receipt of a Share-Based Incentive.
Transaction date: May 5, 2017. Aggregated transactions: volume 2 625 shares,
volume weighted average price: EUR 6.39000.

May 9, 2017: Name of the person subject to the notification requirement: Staffan
Simberg, member of the Board of Directors. Notification type: initial
notification. Nature of transaction: Receipt of a Share-Based Incentive.
Transaction date: May 5, 2017. Aggregated transactions: volume 1 500 shares,
volume weighted average price: EUR 6.39000.

May 9, 2017: Name of the person subject to the notification requirement: Seppo
Mäkinen, member of the Board of Directors. Notification type: initial
notification. Nature of transaction: Receipt of a Share-Based Incentive.
Transaction date: May 5, 2017. Aggregated transactions: volume 1 500 shares,
volume weighted average price: EUR 6.39000.

May 9, 2017: Name of the person subject to the notification requirement: Juha
Putkiranta, member of the Board of Directors. Notification type: initial
notification. Nature of transaction: Receipt of a Share-Based Incentive.
Transaction date: May 5, 2017. Aggregated transactions: volume 1 500 shares,
volume weighted average price: EUR 6.39000.

May 9, 2017: Name of the person subject to the notification requirement: Kirsi
Komi, member of the Board of Directors. Notification type: initial notification.
Nature of transaction: Receipt of a Share-Based Incentive. Transaction date: May
5, 2017. Aggregated transactions: volume 1 500 shares, volume weighted average
price: EUR 6.39000.

May 9, 2017: Name of the person subject to the notification requirement: Tero
Ojanperä, member of the Board of Directors. Notification type: initial
notification. Nature of transaction: Receipt of a Share-Based Incentive.
Transaction date: May 5, 2017. Aggregated transactions: volume 1 500 shares,
volume weighted average price: EUR 6.39000.

Decisions of the Annual General Meeting of Bittium Corporation

The Annual General Meeting of Bittium Corporation, held on April 12, 2017 at the
address the University of Oulu, Saalastinsali, Pentti Kaiteran katu 1, 90590
Oulu, Finland. The Annual General Meeting approved the annual accounts for the
financial year 2016 and discharged the company's management from liability.

Use of the profits shown on the balance sheet and payment of dividend

The Annual General Meeting decided in accordance with the proposal of the Board
of Directors to pay EUR 0.05 per share as dividend and EUR 0.25 per share as
additional dividend based on the adopted balance sheet for the financial period
January 1, 2016 – December 31, 2016. The dividend was 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 Tuesday, April
18, 2017. The dividend was paid on Tuesday, April 25, 2017.

Election and remuneration of the members of the Board of Directors

The Annual General Meeting decided that the Board of Directors shall comprise
six (6) members. Ms. Kirsi Komi, Mr. Seppo Mäkinen, Mr. Juha Putkiranta, Mr.
Staffan Simberg and Mr. Erkki Veikkolainen were re-elected as members of the
Board of Directors for a term of office expiring at the end of the next Annual
General Meeting. Further, Mr. Tero Ojanperä was elected as a new member of the
Board of Directors for a corresponding term of office.

At its assembly meeting held on April 12, 2017, the Board of Directors elected
Mr. Erkki Veikkolainen Chairman of the Board. Further, the Board resolved to
keep the Audit Committee. Staffan Simberg (Chairman of the committee) and Kirsi
Komi were elected as members of the Audit Committee and authorized public
accountant Seppo Laine was invited to the Audit Committee as external advisor of
the Board of Directors.

The following monthly remuneration shall be paid to the members of the Board of
Directors: to the chairman of the Board of Directors EUR 3,500 and to the other
members of the Board of Directors EUR 2,000 each. In addition, the members of
the Board of Directors are entitled to compensation for attending Board
Committee meetings as follows: the chairman of the Committee EUR 600 for each
meeting and other Committee members EUR 400 for each meeting. Travel expenses of
the members of the Board of Directors shall be reimbursed in accordance with the
Company's travel policy. The General Meeting also decided that 40 per cent of
the total amount of the monthly remuneration will be paid at once as Bittium
Corporation's shares acquired for the price formed in public trading, and the
shares will be acquired according to the share purchase program of the company.

Election and remuneration of the auditor

Ernst & Young Oy, authorized public accountants, was re-elected auditor of the
Company for a term of office ending at the end of the next Annual General
Meeting. Ernst & Young Oy notified that Mr. Juhani Rönkkö, authorized public
accountant, will act as responsible auditor. It was decided that the
remuneration to the auditor shall be paid against the auditor's reasonable
invoice.

Authorizing the Board of Directors to decide on the repurchase of the company’s
own shares

The General Meeting authorized the Board of Directors to decide on the
repurchase of the Company's own shares as follows.

The amount of own shares to be repurchased shall not exceed 3,500,000 shares,
which corresponds to approximately 9.81 per cent of all of the shares in the
company. Only the unrestricted equity of the company can be used to repurchase
own shares on the basis of the authorization. Own shares can be repurchased at a
price formed in public trading on the date of the repurchase or otherwise at a
price formed on the market. The Board of Directors decides how own shares will
be repurchased. Own shares can be repurchased using, inter alia, derivatives.
Own shares can be repurchased otherwise than in proportion to the shareholdings
of the shareholders (directed repurchase).

The authorization cancels the authorization given by the General Meeting on
April 19, 2016 to decide on the repurchase of the company's own shares. The
authorization is effective until June 30, 2018.

Authorizing the Board of Directors to decide on the issuance of shares as well
as the issuance of special rights entitling to shares

The General Meeting authorized the Board of Directors to decide on the issuance
of shares and special rights entitling to shares referred to in Chapter 10
Section 1 of the Companies Act as follows.

The amount of shares to be issued shall not exceed 7,000,000 shares, which
corresponds to approximately 19.61 per cent of all of the shares in the company.
The Board of Directors decides on all the conditions of the issuance of shares
and of special rights entitling to shares. The authorization concerns both the
issuance of new shares as well as the transfer of treasury shares. The issuance
of shares and of special rights entitling to shares may be carried out in
deviation from the shareholders' pre-emptive rights (directed issue).

The authorization cancels the authorization given by the General Meeting on
April 19, 2016 to decide on the issuance of shares as well as the issuance of
special rights entitling to shares referred to in Chapter 10 Section 1 of the
Companies Act. The authorization is effective until June 30, 2018.

Oulu, August 9, 2017

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 Helsinki

Major media

Bittium Corporation Condensed Financial Statements and Notes January – June 2017

(unaudited)

The Half-year Financial Report has been prepared in accordance with IAS 34
Interim Financial Reporting.

CONSOLIDATED STATEMENT OF 1-6/2017 1-6/2016 1-12/2016 12 months
COMPREHENSIVE INCOME (MEUR) 6 months 6 months
Continuing operations
NET SALES 27.1 31.1 64.2
Other operating income 1.0 0.9 1.9
Change in work in progress and
finished goods
Work performed by the undertaking for 0.1 0.2 0.4
its own purpose and capitalized
Raw materials -2.2 -2.3 -5.1
Personnel expenses -18.0 -17.7 -35.5
Depreciation -1.9 -1.4 -3.3
Other operating expenses -9.0 -10.0 -20.1
OPERATING PROFIT (LOSS) -2.8 0.7 2.5
Financial income and expenses 0.3 0.3 0.6
PROFIT BEFORE TAX -2.4 0.9 3.1
Income tax 0.0 0.0 0.4
PROFIT FOR THE PERIOD FROM CONTINUING -2.4 0.9 3.5
OPERATIONS
Discontinued operations
Profit for the year from discontinued 1.3
operations
PROFIT FOR THE PERIOD -1.1 0.9 3.5

Other comprehensive income:
Items that may be reclassified
subsequently to the statement of
income
Exchange differences on translating -0.0 -0.1 -0.0
foreign operations
Other comprehensive income for the -0.0 -0.1 -0.0
period total
TOTAL COMPREHENSIVE INCOME FOR THE -1.2 0.9 3.5
PERIOD

Profit for the year attributable to
Equity holders of the parent -1.1 0.9 3.5

Total comprehensive income for the
period attributable to
Equity holders of the parent -1.2 0.9 3.5

Earnings per share from continuing
operations, EUR
Basic earnings per share -0.067 0.026 0.098
Diluted earnings per share -0.067 0.026 0.098

Earnings per share from discontinued
operations, EUR
Basic earnings per share 0.035
Diluted earnings per share 0.035

Earnings per share from continuing
and discontinued operations, EUR
Basic earnings per share -0.032 0.026 0.098
Diluted earnings per share -0.032 0.026 0.098

Average number of shares, 1000 pcs 35 693 35 646 35 670
Average number of shares, diluted, 35 693 35 646 35 670
1000 pcs

CONSOLIDATED STATEMENT OF June 30, 2017 June 30, 2016 Dec. 31, 2016
FINANCIAL POSITION (MEUR)
ASSETS
Non-current assets
Property, plant and 17.9 6.9 12.6
equipment
Goodwill 6.3 1.4 6.7
Intangible assets 11.1 8.0 9.3
Other financial assets 1.4 0.1 0.1
Deferred tax assets 1.5 1.2 1.5
Non-current assets total 38.3 17.6 30.3
Current assets
Inventories 5.9 2.3 4.1
Trade and other 21.1 19.4 24.0
receivables
Financial assets at fair 67.2 66.5 66.9
value through profit or
loss
Cash and short term 6.2 41.2 28.0
deposits
Current assets total 100.4 129.4 123.0
TOTAL ASSETS 138.7 147.0 153.3

EQUITY AND LIABILITIES
Equity attributable to
equity holders of the
parent
Share capital 12.9 12.9 12.9
Invested non-restricted 26.0 26.0 26.0
equity fund
Translation difference 1.1 1.1 1.2
Retained earnings 78.7 88.0 90.6
Total equity 118.7 128.0 130.6

Non-current liabilities
Deferred tax liabilities 0.4 0.1 0.5
Provisions 0.0 1.1 0.0
Interest-bearing 0.6 0.8 2.0
liabilities
Other non-current 0.9 0.5
liabilities
Non-current liabilities 2.0 2.1 3.1
total
Current liabilities
Trade and other payables 16.0 15.0 16.2
Provisions 1.2 1.1 2.2
Interest-bearing loans 0.9 0.8 1.2
and borrowings
Current liabilities total 18.0 16.9 19.6
Total liabilities 20.0 19.0 22.7
TOTAL EQUITY AND 138.7 147.0 153.3
LIABILITIES

CONSOLIDATED STATEMENT OF 1-6/2017 1-6/2016 6 months 1-12/2016 12 months
CASH FLOWS (MEUR) 6 months
CASH FLOW FROM OPERATING
ACTIVITIES
Profit for the year from -2.4 0.9 3.5
continuing operations
Profit for the year from 1.3
discontinued operations
Adjustment of accrual -0.1 1.2 1.5
basis items
Change in net working 1.4 -2.2 -7.6
capital
Interest paid on 0.0 -0.3 -0.4
operating activities
Interest received from 0.2 0.5 0.9
operating activities
Other financial income 0.0 0.0 0.0
and expenses, net
received
Income taxes paid -0.0 -0.0 0.4
NET CASH FROM OPERATING 0.4 0.1 1.7
ACTIVITIES

CASH FLOW FROM INVESTING
ACTIVITIES
Acquisition of business -1.0 -6.4
unit, net of cash
acquired
Purchase of property, -6.2 -2.2 -7.0
plant and equipment
Purchase of intangible -2.4 -0.8 -1.2
assets
Sale of property, plant 0.1 0.0
and equipment
Sale of intangible assets 0.1
Purchase of -0.7
investments/affiliated
companies
NET CASH FROM INVESTING -9.0 -4.0 -14.5
ACTIVITIES

CASH FLOW FROM FINANCING
ACTIVITIES
Share-option plans 0.0 0.0
exercised
Repayment of borrowing -1.7 -0.1 -0.1
Payment of finance -0.5 -0.4 -0.9
liabilities
Dividend paid and -10.7 -10.7 -10.7
repayment of capital
NET CASH FROM FINANCING -12.9 -11.2 -11.6
ACTIVITIES

NET CHANGE IN CASH AND -21.5 -15.1 -27.9
CASH EQUIVALENTS
Cash and cash equivalents 94.9 122.8 122.8
at beginning of period
Cash and cash equivalents 73.4 107.7 94.9
at end of period

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 25.9 1.2 97.5 137.6
1, 2016
Comprehensive income for the
period
Profit for the period 0.9 0.9
Exchange differences on -0.1 -0.1
translating foreign
operations
Total comprehensive income -0.1 0.9 0.9
for the period
Transactions between the
shareholders
Distribution of dividends -10.7 -10.7
Share option plans 0.0 0.0
exercised
Share-related compensation 0.2 0.2
Total transactions between 0.0 -10.5 -10.4
the shareholders
Other changes -0.0 -0.0
Shareholders equity on June 12.9 26.0 1.1 88.0 128.0
30, 2016

A B C D E F
Shareholders equity on Jan. 12.9 26.0 1.2 90.6 130.6
1, 2017
Comprehensive income for the
period
Profit for the period -1.1 -1.1
Exchange differences on -0.0 -0.0
translating foreign
operations
Total comprehensive income -0.0 -1.1 -1.2
for the period
Transactions between the
shareholders
Distribution of dividends -10.7 -10.7
Total transactions between -10.7 -10.7
the shareholders
Other changes -0.0 -0.0
Shareholders equity on June 12.9 26.0 1.1 78.7 118.7
30, 2017

NOTES TO THE HALF YEAR FINANCIAL REPORTING

ACCOUNTING PRINCIPLES FOR THE HALF YEAR FINANCIAL REPORTING:

The Half Year Financial Report has been prepared in accordance with IAS 34
Interim Financial Reporting. Bittium Corporation has applied the same accounting
principles in the preparation of this Half Year Report as in its Financial
Statements for 2016, except for the adoption of new standards and
interpretations effective during 2017. The changes did not have material impact
on the Half Year Report.

THE APPLICATION OF IFRS 15 REVENUE FROM CONTRACTS WITH CUSTOMERS STANDARD

IFRS 15 Revenue from Contracts with Customers, coming in force on 1st of January
2018, will provide the frame for revenue recognition. IFRS 15 will cover the IAS
18 Revenue and IAS 11 Construction contracts standards currently in force.
Bittium Group has been working on estimating the impacts of the new standard
since the financial year 2015. The new standard provides more focus especially
to those contracts which include multiple elements of revenue. The revenue of
the various elements is recognized over a long-term period and possibly by
element basis. The Bittium Group has already applied multi-element principles as
presented in the new standard. Bittium continues to specify the impacts of the
revenue recognition standard in detail, and estimate impact on the notes of the
financial statement. Our current understanding is that the new standard does not
have any substantial impact on the timing principles of the revenue recognition
or on the revenue recognition process at Bittium.

ALTERNATIVE PERFORMANCE MEASURES

In addition to the key ratios defined in the IFRS standards, Bittium may use
some alternative performance measures in the financial reporting. The
definitions of the common alternative performance measures are listed below.

EBITDA = Operating profit + depreciations

Net gearing % = Interest-bearing
liabilities - cash and deposits and short-term investments x 100

Total equity

Equity per share = Equity attributable to equity holders of
the parent

Share issue adjusted number of
the shares at the end of the period

SEGMENT-INFORMATION (MEUR)

Bittium Corporation does not have segments that require reporting according to
IFRS 8 standard.

NET SALES OF 1-6/2017 6 months 1-6/2016 6 months 1-12/2016 12 months
GEOGRAPHICAL AREAS
(MEUR)
Net sales
Europe 22.4 25.1 51.3
Americas 4.5 5.5 12.2
Asia 0.3 0.5 0.7
Net sales total 27.1 31.1 64.2

RELATED PARTY TRANSACTIONS 1-6/2017 1-6/2016 1-12/2016
6 months 6 months 12 months
Employee benefits for key management and stock 0.6 0.7 1.6
options expenses total, continuing operations

CONSOLIDATED STATEMENT OF COMPREHENSIVE 1-6/2017 7-12/2016 1-6/2016
INCOME BY QUARTER (MEUR) Continuing 6 months 6 months 6 months
operations
NET SALES 27.1 33.1 31.1
Other operating income 1.0 1.0 0.9
Change in work in progress and finished
goods
Work performed by the undertaking for its 0.1 0.2 0.2
own purpose and capitalized
Raw materials -2.2 -2.7 -2.3
Personnel expenses -18.0 -17.8 -17.7
Depreciation -1.9 -1.9 -1.4
Other operating expenses -9.0 -10.1 -10.0
OPERATING PROFIT (LOSS) -2.8 1.9 0.7
Financial income and expenses 0.3 0.4 0.3
PROFIT BEFORE TAX -2.4 2.2 0.9
Income tax 0.0 0.4 0.0
PROFIT FOR THE PERIOD FROM CONTINUING -2.4 2.6 0.9
OPERATIONS
Discontinued operations
Profit for the period from discontinued 1.3
operations
PROFIT FOR THE PERIOD -1.1 2.6 0.9
Other comprehensive income -0.0 0.0 -0.1
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD -1.2 2.6 0.9

Profit for the period attributable to:
Equity holders of the parent -1.1 2.6 0.9
Total comprehensive income for the period
attributable to:
Equity holders of the parent
-1.2 2.6 0.9

CONSOLIDATED STATEMENT 1-6/2017 7-12/2016 6 months 1-6/2016 6 months
OF CASH FLOWS BY 6 months
QUARTER
Net cash from operating 0.4 -1.8 0.1
activities
Net cash from investing -9.0 -10.5 -4.0
activities
Net cash from financing -12.9 -0.5 -11.2
activities
Net change in cash and -21.5 -12.8 -15.1
cash equivalents

FINANCIAL PERFORMANCE RELATED 1-6/2017 1-6/2016 1-12/2016 12 months
RATIOS 6 months 6 months
STATEMENT OF COMPREHENSIVE
INCOME (MEUR)
Net sales 27.1 31.1 64.2
Operating profit (loss) -2.8 0.7 2.5
Operating profit (loss). % of -10.2 2.2 4.0
net sales
Profit before taxes -2.4 0.9 3.1
Profit before taxes. % of net -9.0 3.0 4.9
sales
Profit for the period from -2.4 0.9 3.5
continuing operations
PROFITABILITY AND OTHER KEY
FIGURES
Interest-bearing net -72.0 -106.2 -91.8
liabilities. (MEUR)
Net gearing. -% -60.6 -83.0 -70.3
Equity ratio. % 87.8 88.5 87.0
Gross investments. (MEUR) 10.3 4.6 18.5
Average personnel during the 605 543 569
period. continuing operations
Personnel at the period end. 619 570 623
continuing operations

AMOUNT OF SHARE ISSUE Jun. 30. 2017 Jun. 30. 2016 Dec. 31. 2016
ADJUSTMENT (1.000 pcs)
At the end of period 35 693 35 693 35 693
Average for the period 35 693 35 646 35 670
Average for the period 35 693 35 646 35 670
diluted with stock
options

STOCK-RELATED FINANCIAL RATIOS 1-6/2017 1-6/2016 1-12/2016 12 months
(EUR) 6 months 6 months
Earnings per share from
continuing operations. EUR
Basic earnings per share -0.067 0.026 0.098
Diluted earnings per share -0.067 0.026 0.098

Earnings per share from
discontinued operations. EUR
Basic earnings per share 0.035
Diluted earnings per share 0.035

Earnings per share from
continuing and discontinued
operations. EUR
Basic earnings per share -0.032 0.026 0.098
Diluted earnings per share -0.032 0.026 0.098

Equity *) per share 3.33 3.59 3.66

*) Equity attributable to equity
holders of the parent

MARKET VALUES OF 1-6/2017 6 months 1-6/2016 6 months 1-12/2016 12 months
SHARES (EUR)
Highest 7.88 7.14 7.40
Lowest 5.67 5.15 5.15
Average 6.59 6.04 6.05
At the end of 7.28 5.55 5.67
period

Market value of 259.8 198.1 202.4
the stock. (MEUR)
Trading value of 37.4 81.1 126.4
shares. (MEUR)
Number of shares 5 666 13 425 20 888
traded. (1.000
pcs)
Related to average 15.9 37.7 58.6
number of shares %

SECURITIES AND Jun. 30. 2017 Jun. 30. 2016 Dec. 31. 2016
CONTINGENT LIABILITIES
(MEUR)
AGAINST OWN
LIABILITIES
Floating charges 2.9 3.0 3.6
Guarantees 5.4 5.6 2.3
Rental liabilities
Falling due in the 1.3 2.3 2.2
next year
Falling due after one 0.2 1.3 0.2
year
Other contractual
liabilities
Falling due in the 1.8 2.2 2.1
next year
Falling due after one 0.0 0.3 0.0
year

Mortgages are pledged 1.2 2.0 3.2
for liabilities
totaled
Material purchase 8.9 3.6
commitments

NOMINAL VALUE OF Jun. 30. 2017 Jun. 30. 2016 Dec. 31. 2016
CURRENCY DERIVATIVES
(MEUR)
Foreign exchange
forward contracts
Market value 0.1 -0.0 -0.0
Nominal value 5.0 3.0 5.0

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