2017-02-20 07:00:13 CET
2017-02-20 07:00:13 CET
REGULATED INFORMATION
Bittium Oyj - Financial Statement Release
Bittium Corporation Financial Statement Bulletin 2016
Stock exchange release
Free for publication on February 20, 2017 at 8am (CET+1)
Bittium Corporation Financial Statement Bulletin 2016
Net sales in 2016 grew by 13 percent year-on-year and operating result improved
slightly
Summary October-December 2016
· The net sales grew by 24.7 percent year-on-year to EUR 19.0 million (EUR
15.2 million, 4Q 2015).
· The share of the product-based net sales was EUR 4.5 million (EUR 1.8
million, 4Q 2015) and the share of the services-based net sales was EUR 14.5
million (EUR 13.3 million, 4Q 2015).
· Operating profit was EUR 0.9 million (EUR 0.8 million, 4Q 2015).
· Net cash flow was EUR -11.0 million (EUR -494.7 million, 4Q 2015, including
the cash flows of the voluntary public tender offer of own shares).
· Result for the period was EUR 1.4 million and earnings per share were EUR
0.040 (result for the period from continuing operations EUR 1.1 million and
earnings per share EUR 0.018, 4Q 2015).
GROUP (MEUR) 10-12/2016 10-12/2015
3 months 3 months
NET SALES 19.0 15.2
Change of net sales, % 24.7 % -5.5 %
OPERATING PROFIT / LOSS 0.9 0.8
Operating profit / loss, % of net sales 5.0 % 5.2 %
EBITDA 2.1 1.6
CASH AND OTHER LIQUID ASSETS 94.9 122.8
EQUITY RATIO (%) 87.0 % 90.5 %
EARNINGS PER SHARE (EUR) 0.040 0.018
Summary January-December 2016
· The net sales grew by 13.0 percent year-on-year to EUR 64.2 million (EUR
56.8 million, 1-12 2015).
· The share of the product-based net sales was EUR 11.9 million (EUR 13.1
million, 1-12 2015) and the share of the services-based net sales was EUR 51.8
million (EUR 43.4 million, 1-12 2015).
· Operating profit was EUR 2.5 million (EUR 2.3 million, 1-12 2015).
· Net cash flow was EUR -27.9 million (EUR 79.5 million, 1-12 2015, including
the cash flow resulted from the sale of the Automotive business and the cash
flow of the cancelled demerger process, and the cash flows of the voluntary
public tender offer of own shares).
· Result for the period was EUR 3.5 million and earnings per share were EUR
0.098 (result for the period from continuing operations EUR 2.3 million and
earnings per share EUR 0.020, 1-12 2015).
GROUP (MEUR) 2016 2015
12 months 12 months
NET SALES 64.2 56.8
Change of net sales, % 13.0 % 7.8 %
OPERATING PROFIT / LOSS 2.5 2.3
Operating profit / loss, % of net sales 4.0 % 4.1 %
EBITDA 5.8 4.8
CASH AND OTHER LIQUID ASSETS 94.9 122.8
EQUITY RATIO (%) 87.0 % 90.5 %
EARNINGS PER SHARE (EUR) 0.098 0.020
Bittium’s CEO Hannu Huttunen
Bittium’s main focus areas in 2016 were internationalization and enabling
growth. We succeeded well in reaching the growth target and the net sales grew
by 13 percent from previous year and was EUR 64.2 million. Especially service
business developed positively thanks to the demand for R&D services related to
special terminal products. In the product business we made lots of efforts to
enter the international markets, which have created a good base to grow the
product business in the coming years. Due to the market nature and slow
development pace we were not able to reach our product business growth targets.
The share of the product-based net sales was EUR 11.9 million which is EUR 1.2
million less than in the corresponding period last year. The decline in the
product-based net sales was mainly caused by the ending of product deliveries of
a special terminal project for a US-based customer during the corresponding
period. The share of the services-based net sales was EUR 51.8 million which was
EUR 8.4 million more than in the corresponding period last year. The services
-based net sales developed positively thanks to the increased demand for R&D
services related to special terminal products. The operating profit slightly
grew and was EUR 2.5 million.
The net sales of the fourth quarter in 2016 grew by 24.7 percent from last year
and was EUR 19.0 million. The share of the product-based net sales was EUR 4.5
million, which was EUR 2.7 million more than during the corresponding period
last year. The positive development of the product-based business resulted from
the sale of tactical communication products and healthcare technology products.
The share of the services-based net sales was EUR 14.5 million. The service
business developed positively thanks to the increased demand in R&D services for
special terminal products. Operating result of the fourth quarter was EUR 0.9
million.
We continued the R&D investments in our products and product platforms aiming
for growth especially in the international defense and public safety, and mobile
security markets. The R&D investments were 10.8 percent of net sales and focused
mainly on products targeted for mobile security and public safety markets, such
as further development of Bittium Tough Mobile™ secure LTE smartphone. R&D
investments were also continued in the Bittium SafeMove® product family.
Bittium Tough Mobile and device management and encryption software Bittium
Secure Suite™ have created lots of interest in the mobile security and public
safety markets and we delivered many systems for several customer trials for
several countries during the last year. We also closed many distributorship
contracts and got good partners that have taken Bittium Tough Mobile as part of
their own product portfolio and solutions for their customers. Despite the
increased awareness of the information security threats and existence of secure
mobile devices, the development of the mobile security and public safety markets
has been slightly slower than estimated.
The development of the tactical communication system Bittium Tactical Wireless
IP Network™ (TAC WIN), used by the Finnish Defence Forces, continued and we made
product deliveries related to that system. We also continued our efforts to
bring our product portfolio targeted for defense market to the international
markets. We received a small order for TAC WIN system to Asia and an order for
TAC WIN system and related integration work to be delivered to the Estonian
Defence Forces. We extended our tactical communication product portfolio and
brought a new software product Bittium Tough VoIP Service™ (Voice over Internet
Protocol) to the markets. The new software significantly improves the capability
to lead troops and maintain situational awareness in the quickly changing
conditions of the battlefield.
Bittium has been part of the development of the European ESSOR wave form
(European Secure Software defined Radio) since it started in 2009. In 2016 the
communication of land forces of different European countries enabled by ESSOR
wave form was demonstrated both during the Eurosatory exhibition in Paris as
well as in battlefield conditions in Finland organized by the Finnish Defence
Forces. The demonstrations were carried out jointly with Leonardo from Italy and
Thales from France. These demonstrations showcased how the land forces of
different European countries can communicate seamlessly with each other in joint
operations, linking up via a common waveform regardless of the radio platforms
they use.
The product development project for the Mexican Ministry of Communication and
Transportation started in May 2015, where Bittium develops for their MEXSAT
system Android-based mobile devices that use both terrestrial and satellite
connection, has continued according to plans.
The demand for Bittium’s R&D services developed positively during 2016. In the
beginning of October we received information according to which significant
customer cooperation with a global network equipment manufacturer will reduce
during 2017. According to the current information the cooperation with the
aforementioned customer will end completely during the second quarter of 2017.
This kind of decrease in the service-based net sales that happens this fast and
in this extend, is impossible to be replaced with other projects in a short
term.
In November, we expanded our technology competence to medical technology, where
the solutions for patient monitoring are using increasingly wireless
technologies. We acquired companies specialized in medical technology and
services and our product portfolio expanded to measuring and monitoring of
biosignals for cardiology, neurology, rehabilitation, occupational health and
sports medicine. Together we are able to provide for the healthcare market
global leading advanced solutions for patient care both in the hospitals as well
as in home care.
In November, we updated our strategy and financial targets. We plan to make
significant investments in our future by increasing the R&D investments
remarkably for own products and solutions. In line with the nature of the
defense and public safety markets, the investments will pay back in a longer
time period and therefore most of the R&D investments are being planned to be
capitalized to the balance sheet. The company has a strong balance sheet and
financial position. We decided to establish a new product and service area
around medical technology. By combining medical technologies with our long-term
experience and knowhow in wireless and security technologies give us good
conditions to serve our customers in healthcare sector by offering them new
kinds of products and services. The first step to build the competencies around
medical technology was the acquisition made in November.
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 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. According to the information received by Bittium, the net sales
from this customer cooperation will end completely during the second quarter of
the year 2017. To this extend 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 planned investments to enable the future growth.
Bittium expects that the net sales in 2017 will be at the same level than 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 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 2016 for media,
analysts and institutional investors in Restaurant Savoy, Eteläesplanadi 14,
Helsinki, Finland, on Monday, February 20, 2017 at 9.30am (CET+1). The press
conference will be held in Finnish.
Bittium will also hold a telephone conference on the same day at 10.30am. 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 Financial Statement Bulletin 2016
Financial performance in January-December 2016
Bittium’s net sales during January-December 2016 increased by 13.0 percent year
-on-year to EUR 64.2 million (EUR 56.8 million, in 1-12 2015).
The share of the product-based net sales was EUR 11.9 million (EUR 13.1 million,
in 1-12 2015), which resulted mainly from the product deliveries of the tactical
communication system, product deliveries of Bittium Tough Mobile LTE smartphones
and related security software, the deliveries of other terminal products for
authorities use, and deliveries of products for measuring and monitoring
biosignals. The decrease in the product-based net sales year-on-year was mainly
caused by the ending of product deliveries of a special terminal project for a
US-based customer during the corresponding period.
The share of the services-based net sales was EUR 51.8 million (EUR 43.4
million, in 1-12 2015). Despite the decrease in the demand for the services
business in the network equipment market, the services-based net sales increased
year-on-year due to the increased demand for the R&D services related to the
special terminal products.
Operating result was EUR 2.5 million (EUR 2.3 million, in 1-12 2015).
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, MEUR 2016 2015
12 months 12 months
Net sales 64.2 56.8
Operating profit / loss 2.5 2.3
Financial income and expenses 0.6 -0.2
Result before tax 3.1 2.1
RESULT FOR THE PERIOD FROM CONTINUING OPERATIONS 3.5 2.3
RESULT FOR THE PERIOD FROM DISCONTINUING OPERATIONS 539.0
RESULT FOR THE PERIOD 3.5 541.3
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 3.5 541.5
Result for the period attributable to:
Equity holders of the parent 3.5 541.3
Total comprehensive income for the period attributable to:
Equity holders of the parent 3.5 541.5
Earnings per share from continuing operations, EUR 0.098 0.020
· Cash flow from operating activities was EUR -1.7 million (EUR 2.1 million,
in 1-12 2015, including both continuing and discontinuing operations).
· Net cash flow was EUR -27.9 million, including the dividend payment in
April, the investments made into the company’s new office building in Oulu,
Finland, and the acquisition made in November (EUR 79.5 million, in 1-12 2015,
including the cash flow resulted from the sale of the Automotive business and
the cash flow of the cancelled demerger process and the cash flows of the
voluntary public tender offer of own shares).
· Equity ratio was 87.0 percent (90.5 percent, December 31, 2015).
· Net gearing was -70.3 percent (-88.2 percent, December 31, 2015).
Quarterly figures
GROUP’S NET SALES AND OPERATING RESULT, MEUR 4Q/16 3Q/16 2Q/16 1Q/16 4Q/15
Net sales 19.0 14.1 16.4 14.7 15.2
Operating profit (loss) 0.9 0.9 0.8 -0.1 0.8
Result before taxes 1.1 1.1 1.0 -0.1 0.9
Result for the period 1.4 1.1 1.0 -0.1 1.1
DISTRIBUTION OF 4Q/16 3Q/16 2Q/16 1Q/16 4Q/15
NET SALES BY MARKET
AREAS,
MEUR AND %
Asia 0.2 0.0 0.4 0.0 0.0
1.1 % 0.1 % 2.7 % 0.2 % 0.0 %
Americas 3.8 2.9 3.2 2.3 2.9
19.9 % 20.7 % 19.8 % 15.3 % 19.2. %
Europe 15.0 11.2 12.7 12.5 12.3
79.0 % 79.3 % 77.5 % 84.5 % 80.7 %
Research and development
Bittium continued its R&D investments in products and product platforms targeted
for the mobile security, defense and public safety markets. R&D investments
mainly focused on developing the Bittium Tough Mobile secure 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 further
development of the Bittium Tough Mobile and the related security software.
R&D INVESTMENTS, MEUR 2016 2015
12 months 12 months
Total R&D investments 6.9 7.3
Capitalized R&D investments -0.9 -3.4
Depreciations and impairment of R&D investments 0.3 0.2
Cost impact on income statement 6.3 4.2
R&D investments, % of net sales 10.8 % 12.9 %
CAPITALIZED R&D INVESTMENTS IN BALANCE SHEET, MEUR 2016 2015
12 months 12 months
Balance sheet value in the beginning of the period 5.6 2.2
Additions during the period 0.9 3.4
Acquisitions of the business 0.2 0.3
Depreciations and impairment of R&D investments -0.3 -0.2
Balance sheet value at the end of the period 6.4 5.6
Business development in October-December 2016
Bittium’s net sales during October-December 2016 grew to EUR 19.0 million (EUR
15.2 million, 4Q 2015), representing an increase of 24.7 percent year-on-year.
The share of the product-based net sales was EUR 4.5 million (EUR 1.8 million,
4Q 2015), which resulted mainly from the product deliveries of the tactical
communication system, from the product deliveries of Bittium Tough Mobile LTE
smartphones and related security software, and from products deliveries related
to biosignal measuring and monitoring. The share of the services-based net sales
was EUR 14.5 million (EUR 13.3 million, 4Q 2015). The services-based net sales
grew during the quarter due to the increased demand for the R&D services related
to the special terminal products. Operating profit was EUR 0.9 million (EUR 0.8
million, 4Q 2015).
Despite the decrease in the demand for R&D services for the mobile network
manufacturers, the demand for Bittium’s R&D services has developed positively
during the fourth quarter. Also the demand for R&D services in the IoT markets
developed positively. 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.
In October, Bittium announced to have received information according to which
significant customer cooperation with a global network equipment manufacturer
will reduce during 2017. At that time, according to the information received, if
the planned actions of the customer will materialize in full, Bittium estimated
that these actions might have a negative effect to Bittium’s net sales and
operating result in 2017.
During the fourth quarter Bittium continued the R&D investments in its own
products and product platforms aiming for growth especially in the international
mobile security, defense and public safety markets. The investments focused
mainly in the products for the mobile security and public safety markets. The
development of the public safety and mobile security markets has been somewhat
slower than expected.
The development of the Bittium Tough Mobile secure LTE smartphone was continued
and the product deliveries were carried on during the fourth quarter. In October
the company announced to have conducted the first ever Voice over LTE (VoLTE)
call with Bittium Tough Mobile on the Public Safety Band 14 LTE Network in the
United States.
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
fourth quarter. Bittium continued efforts to bring its products and services,
targeted to defense industry, to the international defense markets. In November
the company announced to have received a purchase order for a tactical
communications system and related integration work to be delivered to the
Estonian Defence Forces.
In November, Bittium presented its tactical communication products and solutions
at the Indo Defence 2016 exhibition in Jakarta, Indonesia. In December the
company announced to have demonstrated with Leonardo and Thales and with the
Finnish Defence Forces the capabilities and functionalities of the High Data
Rate Waveform (HDRWF) developed in the European ESSOR programme (European Secure
Software defined Radio) in battlefield conditions. The demonstration showcased
how the land forces of different European countries can communicate seamlessly
with each other in joint operations, linking up via a common waveform regardless
of the radio platforms they use.
In November, Bittium announced to have acquired Mega Electronics Ltd and
MegaKoto Ltd, companies specialized in healthcare technology and services, by
purchasing 100 percent of the shares in Remega Ltd. Mega Electronics Ltd (now
Bittium Biosignals Ltd.), founded in 1983, is a Finnish ISO13485 certified
medical device manufacturing company. The company is specialized in biosignal
measuring for cardiology, neurology, rehabilitation, occupational health and
sports medicine. MegaKoto Ltd (now Bittium Medanalytics Ltd) provides
comprehensive arrhythmia monitoring services for its customers such as primary
care centers, private clinics and hospitals. With this acquisition Bittium got
the ownership of Faros product family, focused on heart remote monitoring,
NeurOne product focusing on measuring the electrical activity of brain, and
BrainStatus, a disposable quick analysis headband used in emergency and
intensive primary care to diagnose for example epileptic seizures and brain
stroke, and other healthcare technology products. Faros devices are EU medical
device directive class CE class IIa and USA FDA 510 (k) registered medical
devices. Bittium Medanalytics Ltd is a private provider of healthcare services
approved by the Finnish National Supervisory Authority for Welfare and Health
having more than 70 health centers and private clinics using its heart
monitoring Kardiolog.fi service. This acquisition was part of Bittium’s strategy
announced later in November.
On November 24 Bittium announced its updated strategy and financial targets.
According to the updated strategy Bittium established a new product and service
area around healthcare technology. By combining healthcare technologies with
Bittium’s long-term experience and knowhow in wireless and security technologies
give the company good conditions to serve its customers in healthcare sector by
offering them new kinds of products and services. Bittium has now three product
and service areas supporting each other: Defense & Security, Connectivity
Solutions and Medical Technologies. In addition Bittium also announced
investments to strengthen company’s position in the global markets and to speed
up its growth.
In November, Bittium exhibited its latest innovative products and solutions for
cardiology and neurology at Medica 2016 exhibition on in Dusseldorf, Germany.
The products and solutions exhibited were Faros ECG Event and Faros ECG Mobile
software solutions focused on remote heart monitoring, Faros Cardiac Rehab
monitoring solution, BrainStatus module and the full Faros ECG product line.
Significant events during the reporting period
A total of 55,498 new shares in Bittium Corporation were subscribed for between
December 1, 2015 and March 31, 2016 by virtue of the option rights 2008C. The
share subscription price, EUR 30,523.90 was recorded in the company's invested
non-restricted equity fund. The corresponding increases in the number of the
company's shares were entered into the Finnish Trade Register on February 10,
2016 and April 14, 2016. 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 11, 2016 and April 15, 2016 as an
additional lot of Bittium Corporation's shares in Nasdaq Helsinki Ltd. The share
subscription period for stock options 2008C ended on March 31, 2016.
The Board of Directors of Bittium Corporation decided on March 22, 2016 on a
directed share issue without consideration as reward payments to the key persons
of the company. In the share issue a maximum of 58,000 new shares was issued
without consideration to the key persons entitled to share rewards according to
the terms and conditions relating to the share rewards. A total of 9 people
belonging to the management and personnel of the company were in the target
group of the payment. Of the maximum of 58,000 shares offered in the share
issue, 37,500 shares were subscribed. The 37,500 shares issued in the share
issue were registered with the Trade Register and registered on the book-entry
accounts of the recipients of the shares on March 24, 2016 and became subject to
trading on the trading list of Nasdaq Helsinki on March 29, 2016. After the
registration of the new shares, the number of shares in Bittium Corporation's
totaled to 35,693,166.
On April 27, 2016 Bittium appointed M.Sc. Sami Kotkajuuri (b. 1967) as Vice
President, Business Development as of May 1, 2016. Mr. Kotkajuuri had been
working for Bittium since 2009. M.Sc. Klaus Mäntysaari (b. 1966) was appointed
as Vice President, Connectivity Solutions as of May 1, 2016. Mr. Mäntysaari has
been working for Bittium since 2004. In the Connectivity Solutions product and
service area Bittium offers R&D services and customized solutions for the
wireless communications market as well as for other companies needing wireless
connectivity in their devices.
On October 5, Bittium announced to have received information according to which
significant customer cooperation with a global network equipment manufacturer
will reduce during 2017. According to the information received, if the planned
actions of the customer will materialize in full, these actions might have a
negative effect to Bittium’s net sales and operating result in 2017. The
reduction of the cooperation will not have an effect on the Bittium’s outlook
for the year 2016.
Bittium told that as part of the strategy work, it will evaluate the effects of
the reduction of the cooperation on the financial targets given on July 1, 2015
in connection with company’s strategic guidelines. These financial targets
published were as follows: The target during 2015 - 2017 is to grow the net
sales at least 10 percent annually and reach EBIT level 10 percent of net sales
at the latest in 2017. Bittium targets, by the year 2017, to clearly increase
the share of net sales generated from own products and product platforms, from
the 26.7 percent level of net sales in 2014.
On November 10, Bittium announced to expand its technology competence by
acquiring Mega Electronics Ltd and MegaKoto Ltd specialized in healthcare
technology and services. Mega Electronics Ltd (now Bittium Biosignals Ltd),
founded in 1983, is a Finnish ISO13485 certified medical device manufacturing
company. The company is specialized in biosignal measuring for cardiology,
neurology, rehabilitation, occupational health and sports medicine. MegaKoto Ltd
(now Bittium Medanalytics Ltd) provides comprehensive arrhythmia monitoring
services for its customers such as primary care centers, private clinics and
hospitals.
The pro forma net sales of Remega group and MegaKoto Ltd was approximately EUR
3.1 million in 2015 and pro forma operating profit was approximately EUR 0.2
million. The companies employ altogether 28 persons and are located in Kuopio,
Finland.
The debt free cash purchase price of the share acquisition, including the
purchase price of MegaKoto shares, was EUR 8.0 million, which was adjusted based
on the level of cash, debt and networking capital of the acquired companies as
of completion of the acquisition. In addition to the aforementioned purchase
price, an additional purchase price, capped at EUR 1.0 million, is payable upon
the achievement of certain financial performance targets for the acquired
business between January 1, 2017 and December 31, 2018. The potential additional
purchase price will be paid in cash after achieving the goals.
On November 23, Bittium announced to change its financial reporting practice and
will publish half year and annual financial reports and will no longer publish
interim reports for the first three and nine months of the year.
On November 24, Bittium updated its strategy and financial targets. The strategy
was updated to strengthen company’s position in the global markets and to speed
up its growth. The company plans to make significant investments in the future
by increasing significantly the R&D investments in its own products and
solutions in the year 2017. In line with the nature of the defense and public
safety markets, the investments will pay back in a longer time period and
therefore Bittium plans to capitalize the most of the R&D investments to its
balance sheet. The company has a strong balance sheet and financial position.
Bittium also told to have decided to establish a new product and service area
around healthcare technology. By combining healthcare technologies with
Bittium’s long-term experience and knowhow in wireless and security technologies
give the company good conditions to serve its customers in healthcare sector by
offering them new kinds of products and services. As the first step to build the
competencies in healthcare technology on November 10, 2016 Bittium acquired Mega
Electronics Ltd, a company specialized in measuring and monitoring biosignals.
According to the updated strategy Bittium has three product and service areas
supporting each other: Defense & Security, Connectivity Solutions and Medical
Technologies. Bittium also told to continue to search for inorganic growth
opportunities in all its product and service areas and is prepared to invest in
acquisitions that strengthen the company’s growth strategy.
About the financial targets Bittium announced on November 24 as follows: 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 believed,
that during the year 2017 it is not yet able 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, of which Bittium announced earlier, that is expected to
materialize faster and more extensively than the company estimated earlier.
According to the information received by Bittium, the net sales from this
customer cooperation will end completely in the beginning of the second quarter
of the year 2017. To this extend this kind of extensive and rapid decrease in
the services business net sales is most likely difficult to be replaced in a
short term. In addition, the operating profit level of the year 2017 is also
affected by the planned investments to enable the future growth.
Bittium targets further to increase the share of net sales generated from own
products and product platforms. According to the targets Bittium announced
earlier, in the year 2017 the share of net sales generated from own products and
product platforms is clearly higher than in the year 2014, when the product
based net sales was 26.7 percent of the net sales.
On November 24, Bittium announced changes in the management group and in its
organizational structure. These changes support the updated strategy that was
announced on the same day. According to its strategy Bittium’s business will
focus on three product and service areas: Defense & Security, Connectivity
Solutions and Medical Technologies. Mr. Jari Sankala (M.Sc. Electrical
Engineering, Digital Communications) has been appointed as Senior Vice
President, Defense & Security product and service area. Mr. Klaus Mäntysaari
(M.Sc.) continues as Vice President, Connectivity product and service area. Mr.
Arto Pietilä M.Sc.(Applied Electronics) has been appointed as Senior Vice
President, Medical Technologies product and service area. Mr. Sami Kotkajuuri,
head of business development, decided to move on to new challenges outside of
Bittium and resigned from the company’s service. Mr. Kotkajuuri continued his
duties until the end of the year 2016.
As of December 1, 2016 Bittium management group consists of following persons:
Mr. Hannu Huttunen, CEO (chairman); Mr. Pekka Kunnari, CFO; Mr. Kari Jokela,
CLO; Ms. Karoliina Fyrstén, Director, Corporate Communications and Marketing,
heads of product and service areas: Mr. Jari Sankala, Senior Vice President,
Defense & Security; Mr. Klaus Mäntysaari, Vice President, Connectivity; and Mr.
Arto Pietilä, Senior Vice President, Medical Technologies; and Mr. Jari-Pekka
Innanen, Vice President, Engineering.
Significant events after the reporting period
The company has no significant events after the reporting period.
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 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. According to the information received by Bittium, the net sales
from this customer cooperation will end completely during the second quarter of
the year 2017. To this extend 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 planned investments to enable the future growth.
Bittium expects that the net sales in 2017 will be at the same level than in
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 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 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 affecting declining to the mobile network markets in the
near future. The development of 5G technology has started very well creating
demand for Bittium’s R&D services increasingly. However, the development of 5G
technology has just begun, and it will not replace the amount of the 4G
development work within the next few years. Therefore in future the demand for
R&D service for the network equipment manufacturers is expected to be
significantly lower 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 connected devices for
consumers 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 is expected to
continue increasing 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 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
increasingly 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. 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 years 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 reduction of the cooperation did not have an effect on
Bittium’s outlook for the year 2016, but if the planned actions of the customer
will materialize in full, these actions might 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
Financial Statement Bulletin 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 reduction of significant customer cooperation with
a global mobile network equipment manufacturer during 2017 may have a negative
effect on Bittium’s net sales and operating result in 2017, but it has not had
an effect on the Bittium’s outlook for the year 2016. 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 10.2 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 20,0 million
are valid until June 30, 2017 and EUR 0.2 million until September 29, 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,
2016, are compared with the statement of the financial position of December 31,
2015 (MEUR).
31.12.2016 31.12.2015
Non-current assets 30.3 14.4
Current assets 123.0 145.0
Total assets 153.3 159.4
Share capital 12.9 12.9
Other capital 117.7 124.6
Total equity 130.6 137.6
Non-current liabilities 3.1 2.0
Current liabilities 19.6 19.8
Total equity and liabilities 153.3 159.4
Cash flow of the review period 1-12/2016 1-12/2015
:
+ profit of the period +/ 5.0 12.2
- Adjustment of accrual basis
items
+/- Change in net working -7.6 -6.2
capital
- interest, taxes and dividends 0.9 -3.9
= net cash from operating -1.7 2.1
activities
- net cash from investing -14.5 579.6
activities
- net cash from financing -11.6 -502.2
activities
= net change in cash and cash -27.9 79.5
equivalents
Net cash from operating activities in 2015 includes operative cash flows from
both continuing and discontinuing operations.
The amount of gross investments in the period under review was EUR 18.5 million.
Net investments for the review period totaled to EUR 18.4 million. The total
amount of depreciation during the period under review was EUR 3.3 million. The
amount of interest-bearing debt, including finance lease liabilities, was at the
end of the reporting period EUR 3.2 million (EUR 1.4 million on December 31,
2015). Bittium's equity ratio at the end of the period was 87.0 percent (90.5
percent on December 31, 2015).
Cash and other liquid assets at the end of the reporting period were EUR 94.9
million (EUR 122.8 million on December 31, 2015).
Bittium has a total of EUR 20.2 million credit facility agreements from which
EUR 20 million are valid until June 30, 2017 and EUR 0.2 million until September
29, 2017. At the end of the review period, EUR 0.1 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 569 people in between January and
December 2016. At the end of December, the company had 623 employees (517
employees at the end of 2015). A significant part of Bittium's personnel are R&D
engineers.
Changes in the company’s management
Appointments in the company’s management
On April 27, 2016 Bittium announced following appointments in the company’s
management group:
M.Sc. Sami Kotkajuuri (b. 1967) was appointed as Vice President, Business
Development as of May 1, 2016. Kotkajuuri had been working at Bittium since
2009. As his latest task, he was responsible for the IoT (Internet of Things)
Solutions product and service area, where Bittium offers R&D services and
customized solutions for companies needing wireless connectivity for their
devices. Kotkajuuri continued as a member of the company’s management group
reporting to Hannu Huttunen, CEO.
M.Sc. Klaus Mäntysaari (b. 1966) was appointed as Vice President, Connectivity
Solutions as of May 1, 2016. Mäntysaari has been working at Bittium since 2004.
Previously he has been responsible for Telecom product and service area, where
Bittium offers R&D services for wireless telecommunication market. Mäntysaari
continued as a member of the company’s management group reporting to Hannu
Huttunen, CEO.
Changes in Bittium Corporation’s organizational structure and management group
The Board of Directors of Bittium Corporation decided on changes in the
company’s organizational structure and management group to support the company’s
updated strategy that was announced on November 24, 2016. According to its
strategy Bittium’s business focuses on three product and service areas: Defense
& Security, Connectivity and Medical Technologies.
Mr. Jari Sankala (M.Sc. Electrical Engineering, Digital Communications) was
appointed as Senior Vice President, Defense & Security product and service area.
Mr. Sankala has been working at Bittium since 2011 and transfers to his new
position from the head of sales. In Bittium’s new organizational structure, the
sales operations are managed by the product and service areas. Mr. Klaus
Mäntysaari (M.Sc.) continued as Vice President, Connectivity product and service
area. He has been working at Bittium since 2004. Mr. Arto Pietilä M.Sc.(Applied
Electronics) was appointed as Senior Vice President, Medical Technologies
product and service area. Mr. Pietilä has been working at Bittium since 2001,
among others as head of operations, head of Contract R&D business and as head of
Wireless Solutions business. Prior to Bittium, Mr. Pietilä acted as the managing
director of Polar Electro Oy.
Mr. Sami Kotkajuuri, head of business development, decided to move on to new
challenges outside of Bittium and resigned from the company’s service. Mr.
Kotkajuuri continued his duties until the end of the year 2016.
As of December 1, 2016 Bittium management group consisted of following persons:
Mr. Hannu Huttunen, CEO (chairman); Mr. Pekka Kunnari, CFO; Mr. Kari Jokela,
CLO; Ms. Karoliina Fyrstén, Director, Corporate Communications and Marketing,
heads of product and service areas: Mr. Jari Sankala, Mr. Klaus Mäntysaari, and
Mr. Arto Pietilä; and Mr. Jari-Pekka Innanen, Vice President, Engineering.
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
August 11, 2016: Name of the person subject to the notification requirement:
Seppo Laine, other senior manager. Notification type: initial notification.
Nature of transaction: disposal. Executed under portfolio or asset management.
Transaction date: August 8, 2016 Aggregated transactions: volume 20 000 shares,
volume weighted average price: EUR 5.90100.
August 22, 2016: Name of the person subject to the notification requirement:
Jari Sankala, other senior manager. Notification type: initial notification.
Nature of transaction: Acquisition. Executed under portfolio or asset
management. Transaction date: August 17, 2016. Aggregated transactions: volume
2 408 shares, volume weighted average price: EUR 5.90000.
August 22, 2016: Name of the person subject to the notification requirement:
Jari Sankala, other senior manager. Notification type: initial notification.
Nature of transaction: Acquisition. Executed under portfolio or asset
management. Transaction date: August 19, 2016. Aggregated transactions: volume
15 092 shares, volume weighted average price: EUR 6.020000.
September 22, 2016: 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: September 19, 2016. Aggregated transactions: volume 2 400
shares, volume weighted average price: EUR 6.79253.
September 22, 2016: 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: September 19, 2016. Aggregated transactions: volume 1 371
shares, volume weighted average price: EUR 6.79248.
September 22, 2016: 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: September 19, 2016. Aggregated transactions: volume 1 371
shares, volume weighted average price: EUR 6.79247.
September 22, 2016: 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: September 19, 2016. Aggregated transactions: volume 1 371
shares, volume weighted average price: EUR 6.79243.
September 22, 2016: 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: September 19, 2016. Aggregated transactions: volume 1 371
shares, volume weighted average price: EUR 6.79238.
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, 2016, the
distributable assets of the parent company are EUR 130,898,268.85 of which the
profit of the financial year is EUR 3,461,321.81.
The Board of Directors proposes that the Annual General Meeting to be held on
April 12, 2017 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, 2016 – December 31, 2016 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 18, 2017. The Board of
Directors proposes that the dividend be paid on April 25, 2017.
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 Wednesday, April
12, 2017, at 1.00pm (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 22, 2017.
Oulu, February 20, 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 – December
2016
The consolidated financial statement has been prepared in accordance with
International Financial Reporting Standards (IFRS). The Financial Statement of
2016 has been audited and the auditing report has been dated on February 19,
2017.
CONSOLIDATED STATEMENT OF 1-12/2016 1-12/2015
COMPREHENSIVE INCOME (MEUR) 12 months 12 months
Continuing operations
NET SALES 64.2 56.8
Other operating income 1.9 1.4
Change in work in progress and
finished goods
Work performed by the undertaking 0.4 0.2
for its own purpose and capitalized
Raw materials -5.1 -5.5
Personnel expenses -35.5 -30.3
Depreciation -3.3 -2.5
Other operating expenses -20.1 -17.8
OPERATING PROFIT (LOSS) 2.5 2.3
Financial income and expenses 0.6 -0.2
PROFIT BEFORE TAX 3.1 2.1
Income tax 0.4 0.2
PROFIT FOR THE PERIOD FROM 3.5 2.3
CONTINUING OPERATIONS
Discontinued operations
Profit for the year from 539.0
discontinued operations
PROFIT FOR THE PERIOD 3.5 541.3
Other comprehensive income:
Items that will not be reclassified
to statement of income
Re-measurement gains (losses) on
defined benefit plans
Income tax effect
Items that may be reclassified
subsequently to the statement of
income
Exchange differences on translating -0.0 0.1
foreign operations
Other comprehensive income for the -0.0 0.1
period total
TOTAL COMPREHENSIVE INCOME FOR THE 3.5 541.5
PERIOD
Profit for the year attributable to
Equity holders of the parent 3.5 541.3
Non-controlling interests
Total comprehensive income for the
period attributable to
Equity holders of the parent 3.5 541.5
Non-controlling interests
Earnings per share from continuing
operations, EUR
Basic earnings per share 0.098 0.020
Diluted earnings per share 0.098 0.020
Earnings per share from
discontinued operations, EUR
Basic earnings per share 0.000 4.687
Diluted earnings per share 0.000 4.685
Earnings per share from continuing
and discontinued operations, EUR
Basic earnings per share 0.098 4.708
Diluted earnings per share 0.098 4.706
Average number of shares, 1000 pcs 35 670 114 983
Average number of shares, diluted, 35 670 115 037
1000 pcs
CONSOLIDATED STATEMENT OF Dec. 31, 2016 Dec. 31, 2015
FINANCIAL POSITION (MEUR)
ASSETS
Non-current assets
Property, plant and equipment 12.6 4.1
Goodwill 6.7 1.4
Intangible assets 9.3 7.6
Other financial assets 0.1 0.1
Deferred tax assets 1.5 1.2
Non-current assets total 30.3 14.4
Current assets
Inventories 4.1 2.2
Trade and other receivables 24.0 20.0
Financial assets at fair 66.9 66.1
value through profit or loss
Cash and short term deposits 28.0 56.8
Current assets total 123.0 145.0
TOTAL ASSETS 153.3 159.4
EQUITY AND LIABILITIES
Equity attributable to equity
holders of the parent
Share capital 12.9 12.9
Invested non-restricted 26.0 25.9
equity fund
Translation difference 1.2 1.2
Retained earnings 90.6 97.5
Non-controlling interests
Total equity 130.6 137.6
Non-current liabilities
Deferred tax liabilities 0.5 0.1
Pension obligations
Provisions 0.0 1.1
Interest-bearing liabilities 2.0 0.7
Other non-interest 0.5 0
-bearing liabilities
Non-current liabilities total 3.1 2.0
Current liabilities
Trade and other payables 16.2 17.9
Financial liabilities at
fair value through profit or
loss
Provisions 2.2 1.2
Interest-bearing loans 1.2 0.7
and borrowings
Current liabilities total 19.6 19.8
Total liabilities 22.7 21.8
TOTAL EQUITY AND LIABILITIES 153.3 159.4
CONSOLIDATED STATEMENT OF CASH FLOWS (MEUR) 1-12/2016 1-12/2015
12 months 12 months
CASH FLOW FROM OPERATING ACTIVITIES
Profit for the year from continuing operations 3.5 2.3
Profit for the year from discontinued operations 0 539.0
Adjustment of accrual basis items 1.5 -529.1
Change in net working capital -7.6 -6.2
Interest paid on operating activities -0.4 -1.6
Interest received from operating activities 0.9 0.9
Income taxes paid 0.4 -3.2
NET CASH FROM OPERATING ACTIVITIES -1.7 2.1
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of business unit, net of cash sold 0.0 588.2
Acquisition of business unit, net of cash acquired -6.4 -1.8
Purchase of property, plant and equipment -7.0 -2.5
Purchase of intangible assets -1.2 -4.3
Sale of intangible assets 0.0 0.1
NET CASH FROM INVESTING ACTIVITIES -14.5 579.6
CASH FLOW FROM FINANCING ACTIVITIES
Share-option plans exercised 0.0 0.8
Proceeds from borrowing 0.0 14.6
Repayment of borrowing -0.1 -17.5
Payment of finance liabilities -0.9 -1.3
Dividend paid and repayment of capital -10.7 -5.3
Purchase of own shares incl. transaction costs 0.0 -493.5
NET CASH FROM FINANCING ACTIVITIES -11.6 -502.2
NET CHANGE IN CASH AND CASH EQUIVALENTS -27.9 79.5
Cash and cash equivalents at beginning of period 122.8 43.3
Cash and cash equivalents at end of period 94.9 122.8
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 25.1 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 0.1 0.1
compensation
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
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 3.5 3.5
Exchange differences on -0.0 -0.0
translating foreign
operations
Total comprehensive income -0.0 3.5 3.5
for the period
Transactions between the
shareholders
Distribution of dividend -10.7 -10.7
Share option plans 0.0 0.0
exercised
Share-related 0.2 0.2
compensation
Purchase of own shares
incl. transaction costs
Total transactions between 0.0 -10.5 -10.4
the shareholders
Other changes -0.0 -0.0
Shareholders equity on Dec. 12.9 26.0 1.2 90.6 130.6
31, 2016
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) 1-12/2016 1-12/2015
12 months 12 months
Net sales
Europe 51.3 48.3
Americas 12.2 8.3
Asia 0.7 0.2
Net sales total 64.2 56.8
RELATED PARTY TRANSACTIONS 1-12/2016 1-12/2015
12 months 12 months
Employee benefits for key management and stock 1.6 1.6
options expenses total, continuing operations
CONSOLIDATED STATEMENT OF 10 7-9/201 4-6/201 1-3/201 10
COMPREHENSIVE INCOME BY QUARTER -12/201 6 6 6 -12/201
(MEUR) 6 3 month 3 month 3 month 5
Continuing operations 3 month s s s 3 month
s s
NET SALES 19.0 14.1 16.4 14.7 15.2
Other operating income 0.6 0.4 0.5 0.4 0.4
Change in work in progress and 0.0 0.0 0.0 0.0 0.0
finished goods
Work performed by the undertaking 0.2 0.1 0.1 0.1 0.1
for its own purpose and capitalized
Raw materials -1.8 -0.9 -1.5 -0.9 -0.9
Personnel expenses -10.1 -7.7 -8.8 -8.9 -8.4
Depreciation -1.2 -0.7 -0.7 -0.7 -0.8
Other operating expenses -5.8 -4.3 -5.2 -4.8 -4.8
OPERATING PROFIT (LOSS) 0.9 0.9 0.8 -0.1 0.8
Financial income and expenses 0.1 0.2 0.2 0.0 0.1
PROFIT BEFORE TAX 1.1 1.1 1.0 -0.1 0.9
Income tax 0.4 0.0 0.0 0.0 0.2
PROFIT FOR THE PERIOD FROM 1.4 1.1 1.0 -0.1 1.1
CONTINUING OPERATIONS
Discontinued operations
Profit for the period from 0.0 0.0 0.0 0.0 0.6
discontinued operations
PROFIT FOR THE PERIOD 1.4 1.1 1.0 -0.1 1.7
Other comprehensive income 0.1 -0.0 -0.0 -0.1 0.0
TOTAL COMPREHENSIVE INCOME FOR THE 1.5 1.1 1.0 -0.2 1.7
PERIOD
Profit for the period attributable
to:
Equity holders of the parent 1.4 1.1 1.0 -0.1 1.7
Non-controlling interests
Total comprehensive income for the
period attributable to:
Equity holders of the parent 1.5 1.1 1.0 -0.2 1.7
Non-controlling interests
CONSOLIDATED STATEMENT OF Dec. Sept. Jun. Mar. Dec. 31, 2015
FINANCIAL POSITION (MEUR) 31, 30, 30, 31,
2016 2016 2016 2016
ASSETS
Non-current assets
Property, plant and equipment 12.6 8.9 6.9 5.2 4.1
Goodwill 6.7 1.4 1.4 1.4 1.4
Intangible assets 9.3 8.0 8.0 7.7 7.6
Other financial assets 0.1 0.1 0.1 0.1 0.1
Deferred tax assets 1.5 1.2 1.2 1.2 1.2
Non-current assets total 30.3 19.6 17.6 15.6 14.4
Current assets
Inventories 4.1 3.0 2.3 1.9 2.2
Trade and other receivables 24.0 16.1 19.4 13.4 20.0
Financial assets at fair value 66.9 66.8 66.5 66.2 66.1
through profit or loss
Cash and short term deposits 28.0 39.2 41.2 59.8 56.8
Current assets total 123.0 125.0 129.4 141.3 145.0
Assets classified as held for
sale
TOTAL ASSETS 153.3 144.6 147.0 156.9 159.4
EQUITY AND LIABILITIES
Equity attributable to equity
holders of the parent
Share capital 12.9 12.9 12.9 12.9 12.9
Invested non-restricted equity 26.0 26.0 26.0 26.0 25.9
fund
Translation difference 1.2 1.1 1.1 1.1 1.2
Retained earnings 90.6 89.1 88.0 97.7 97.5
Non-controlling interests
Total equity 130.6 129.1 128.0 137.7 137.6
Non-current liabilities
Deferred tax liabilities 0.5 0.1 0.1 0.1 0.1
Pension obligations
Provisions 0.0 1.1 1.1 1.1 1.1
Interest-bearing liabilities 2.0 0.7 0.8 0.8 0.7
Other non-interest-bearing 0.5 0.0 0.0 0.0 0.0
liabilities
Non-current liabilities total 3.1 2.0 2.1 2.0 2.0
Current liabilities
Trade and other payables 16.1 11.4 15.0 15.4 17.9
Financial liabilities at fair
value through profit or loss
Provisions 2.2 1.3 1.1 1.0 1.2
Interest-bearing loans and 1.2 0.8 0.8 0.7 0.7
borrowings
Current liabilities total 19.6 13.5 16.9 17.1 19.8
Total liabilities 22.7 15.5 19.0 19.2 21.8
Liabilities classified as held
for sale
TOTAL EQUITY AND LIABILITIES 153.3 144.6 147.0 156.9 159.4
CONSOLIDATED STATEMENT 10-12/2016 7-9/2016 4-6/2016 1-3/2016 10-12/2015
OF CASH FLOWS BY QUARTER 3 months 3 months 3 months 3 months 3 months
Net cash from operating -2.8 1.0 -4.9 5.0 0.3
activities
Net cash from investing -8.0 -2.6 -2.5 -1.5 -1.2
activities
Net cash from financing -0.3 -0.2 -10.9 -0.2 -493.8
activities
Net change in cash and -11.0 -1.8 -18.3 3.2 -494.7
cash equivalents
FINANCIAL PERFORMANCE RELATED 1-12/2016 1-12/2015
RATIOS 12 months 12 months
STATEMENT OF COMPREHENSIVE
INCOME (MEUR)
Net sales 64.2 56.8
Operating profit (loss) 2.5 2.3
Operating profit (loss), % of 4.0 4.1
net sales
Profit before taxes 3.1 2.1
Profit before taxes, % of net 4.9 3.7
sales
Profit for the period from 3.5 2.3
continuing operations
PROFITABILITY AND OTHER KEY
FIGURES
Interest-bearing net -91.8 -121.4
liabilities, (MEUR)
Net gearing, -% -70.3 -88.2
Equity ratio, % 87.0 90.5
Gross investments, (MEUR) 18.5 7.4
Average personnel during the 569 511
period, continuing operations
Personnel at the period end, 623 517
continuing operations
AMOUNT OF SHARE ISSUE Dec. 31, 2016 Dec. 31, 2015
ADJUSTMENT (1,000 pcs)
At the end of period 35 693 35 600
Average for the period 35 670 114 983
Average for the period 35 670 115 037
diluted with stock
options
STOCK-RELATED FINANCIAL RATIOS 1-12/2016 1-12/2015
(EUR) 12 months 12 months
Earnings per share from
continuing operations, EUR
Basic earnings per share 0.098 0.020
Diluted earnings per share 0.098 0.020
Earnings per share from
discontinued operations, EUR
Basic earnings per share 0.000 4.687
Diluted earnings per share 0.000 4.685
Earnings per share from
continuing and discontinued
operations, EUR
Basic earnings per share 0.098 4.708
Diluted earnings per share 0.098 4.706
Equity *) per share 3.66 3.86
*) Equity attributable to equity
holders of the parent
MARKET VALUES OF SHARES (EUR) 1-12/2016 1-12/2015
12 months 12 months
Highest 7.40 7.80
Lowest 5.15 3.27
Average 6.05 4.92
At the end of period 5.67 7.01
Market value of the stock, (MEUR) 202.4 249.6
Trading value of shares, (MEUR) 126.4 837.1
Number of shares traded, (1,000 pcs) 20 888 169 993
Related to average number of shares % 58.6 147.8
SECURITIES AND CONTINGENT LIABILITIES (MEUR) Dec. 31, 2016 Dec. 31, 2015
AGAINST OWN LIABILITIES
Floating charges 3.6 1.5
Guarantees 2.3 5.6
Rental liabilities
Falling due in the next year 2.2 2.3
Falling due after one year 0.2 2.3
Other contractual liabilities
Falling due in the next year 2.1 2.2
Falling due after one year 0.0 0.4
Mortgages are pledged for liabilities totaled 3.2 2.0
NOMINAL VALUE OF CURRENCY DERIVATIVES (MEUR) Dec. 31, 2016 Dec. 31, 2015
Foreign exchange forward contracts
Market value -0.0 0.1
Nominal value 5.0 2.5
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