Bittium Corporation’s interim report January-March 2016


Stock exchange release

Free for publication on April 27, 2016 at 8.00 a.m. (CEST+1)

Bittium Corporation’s interim report January-March 2016

Services business developed positively in January-March 2016 and product-based
net sales was lower compared to last year

Summary January-March 2016

  ·
The net sales were EUR 14.7 million (EUR 15.1 million, 1Q 2015), representing a
decrease of 2.6 % year-on-year.

  ·
The share of the product-based net sales was EUR 2.4 million (EUR 4.5 million,
1Q 2015) and the share of the services-based net sales was EUR 12.2 million (EUR
10.5 million, 1Q 2015).

  ·
Operating result was EUR -0.1 million (EUR 0.5 million, 1Q 2015).

  ·
Net cash flow was EUR 3.2 million (EUR 7.3 million, 1Q 2015, including both
continuing and discontinuing operations).

  ·
Earnings per share were EUR -0.002 (EUR 0.003, 1Q 2015).

  ·
During the first quarter the number of Bittium’s shares increased by altogether
5,000 new shares subscribed by virtue of the stock option rights 2008C. After
the registration of the new shares, the number of shares in Bittium Corporation
totaled 35,605,168.

  ·
The Board of Directors of Bittium Corporation decided on March 22, 2016 to
implement a directed share issue without consideration as reward payments to the
key persons of the company. Of the maximum of 58,000 shares offered, 37,500
shares were subscribed. The 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 total number of shares in Bittium Corporation totaled
35,642,668.

GROUP (MEUR)                             1-3/2016  1-3/2015
                                         3 months  3 months
NET SALES                                    14.7      15.1
Change of net sales, %                     -2.6 %     6.7 %
OPERATING PROFIT / LOSS                      -0.1       0.5
Operating profit / loss, % of net sales    -0.8 %     3.2 %
EBITDA                                        0.6       1.1
CASH AND OTHER LIQUID ASSETS                126.0      50.6
EQUITY RATIO (%)                           90.5 %    65.0 %
EARNINGS PER SHARE (EUR)                   -0.002     0.003

Bittium’s CEO Hannu Huttunen

The net sales of the first quarter in 2016 were EUR 14.7 million, representing a
decrease of 2.6 percent year-on-year. The share of the product-based net sales
was EUR 2.4 million, which was lower than in the corresponding period last year
due to the product delivery schedules. The share of the services-based net sales
was EUR 12.2 million. The service business developed positively thanks to the
increased demand in R&D services for special terminal products. Operating result
in the first quarter was -0.1 million and cash flow EUR 3.2 million.

We continued the R&D investments in our products and product platforms aiming
for growth especially in the international defense, information security and
public safety markets. The investments still focused mainly in the further
development of the Bittium Tough Mobile™ LTE smartphone targeted for the mobile
security and public safety markets. The Bittium Tough Mobile and related
management system and VPN encryption Bittium Secure Suite™ have generated lots
of interest in the information security and public safety markets. We continued
pilot deliveries of the products during the first quarter. We have been actively
seeking for, and have found few suitable partners and resellers who have taken
Bittium Tough Mobile as part of their own product portfolio and solution for
their customers. The sale of the Bittium Tough Mobile is expected to develop
moderately according to the pace of the authorities markets.

The product development project started in May 2015 with the Ministry of Mexican
Communication and Transportation to develop Android-based mobile devices that
use both terrestrial and satellite connection for their MEXSAT system has
continued according to plans during the first quarter.

The development of the tactical communication system Bittium Tactical Wireless
IP Network™ (TAC WIN), used by the Finnish Defence Forces, continued. The
product deliveries for the communication system were continued and we also
received a new order for a new software package for the system. We continued our
efforts to bring our defense market targeted product portfolio to the
international defense markets, and received our first small order of our
Tactical Wireless IP Network system from a customer in Asia. The sales cycles in
the defense markets are long by their nature and winning significant deals take
several years.

This year, the focus will be on the internationalization and enabling growth. We
will be investing in developing our operations further for long-term growth. We
will also continue to look for inorganic growth opportunities according to our
strategic guidelines. The growing need for wireless connectivity, increasingly
growing amount of data transfer and the need for secure data transfer create
demand for Bittium’s competence, products and product platforms, and therefore
Bittium has good conditions to continue its success also in the future.

Outlook for 2016

Bittium expects that the net sales in 2016 will grow from the previous year (net
sales of EUR 56.8 million, in 2015). The development of the operating result
includes currently many uncertainties and therefore the company has decided not
to give guidance on the development of the operating result. These uncertainties
include possible non-recurring investments in building long-term growth and
significant variations in the operating result between the quarters due to the
timing of product deliveries.

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

More information about other uncertainties regarding the outlook is presented in
the Report by the Board of Directors 2015, 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 Interim Report January-March 2016
for media, analysts and institutional investors in Bank, Unioninkatu 20,
Helsinki, Finland, on Wednesday April 27, 2016 at 9.30 am (CEST+1). The press
conference will be held in Finnish.

Bittium will also hold a telephone conference on the same day at 10.30 am. The
dial-in number for the conference call is +44 203 059 8125, confirmation code is
"Bittium". The conference can also be followed live as an audiocast, accessible
at www.bittium.com/investors. The conference call will be held in English.

A recording of the audiocast and the presentation will be available after the
conference on Bittium's website at www.bittium.com/investors.

Bittium

Bittium specializes in the development of reliable, secure communications and
connectivity solutions leveraging its 30 years legacy of expertise in advanced
radio communication technologies. Bittium provides innovative products and
customized solutions based on its product platforms and R&D services
complementing its communications and connectivity solutions. Bittium offers
proven information security solutions for mobile devices and portable computers.
Net sales of continuing operations in 2015 was EUR 56.8 million and operating
profit was EUR 2.3 million. Bittium is listed on Nasdaq Helsinki.
www.bittium.com

Bittium Corporation’s Interim Report January-March 2016

Financial performance in January-March 2016

Bittium’s net sales during January-March 2016 decreased by 2.6 percent year-on
-year to EUR 14.7 million (EUR 15.1 million, in 1Q 2015).

The share of the product-based net sales was EUR 2.4 million (EUR 4.5 million,
in 1Q 2015), which resulted mainly from the product deliveries of the tactical
communication system to the Finnish Defence Forces and from the delivery of
other terminal products for authorities use. Due to the ending of product
deliveries of a special terminal project for a US-based customer during the
corresponding period, the product-based net sales decreased.

The share of the services-based net sales was EUR 12.2 million (EUR 10.5
million, in 1Q 2015). Despite of the decrease in the demand for the services
business in the mobile infrastructure equipment market, the services-based net
sales increased during the quarter due to the increased demand for the R&D
services related to the special terminal products.

Operating result was EUR -0.1 million (EUR 0.5 million, in 1Q 2015).

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, MEUR        1-3/2016  1-3/2015
                                                            3 months  3 months
   Net sales                                                    14.7      15.1
   Operating profit / loss                                      -0.1       0.5
   Financial income and expenses                                 0.0      -0.1
   Result before tax                                            -0.1       0.4
RESULT FOR THE PERIOD FROM CONTINUING OPERATIONS                -0.1       0.4
RESULT FOR THE PERIOD FROM DISCONTINUING OPERATIONS                        1.5
RESULT FOR THE PERIOD                                           -0.1       1.8
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD                       -0.2       3.1

Result for the period attributable to:
   Equity holders of the parent                                 -0.1       1.8
Total comprehensive income for the period attributable to:
    Equity holders of the parent                                -0.2       3.1

Earnings per share from continuing operations, EUR            -0.002     0.003

  ·
Cash flow from operating activities was EUR 5.0 million (EUR 10.9 million, in 1Q
2015, including both continuing and discontinuing operations).

  ·
Net cash flow was EUR 3.2 million (EUR 7.3 million, in 1Q 2015, including both
continuing and discontinuing operations).

  ·
Equity ratio was 90.5 percent (65.0 percent, March 31, 2015).

  ·
Net gearing was -90.4 percent (-43.2 percent, March 31, 2015).

Quarterly figures

GROUP’S NET SALES AND OPERATING RESULT, MEUR  1Q/16  4Q/15  3Q/15  2Q/15  1Q/15
Net sales                                      14.7   15.2   11.1   15.3   15.1
Operating profit (loss)                        -0.1    0.8    0.0    1.0    0.5
Result before taxes                            -0.1    0.9    0.1    0.8    0.4
Result for the period                          -0.1    1.1    0.1    0.8    0.4

DISTRIBUTION OF NET   1Q/16    4Q/15   3Q/15   2Q/15   1Q/15
SALES BY MARKET
AREAS,
MEUR AND %
Asia                    0.0      0.0     0.1     0.1     0.0
                      0.2 %    0.0 %   0.6 %   0.6 %   0.2 %
Americas                2.3      2.9     1.0     2.2     2.1
                     15.3 %  19.2. %   9.1 %  14.6 %  14.2 %
Europe                 12.5     12.3    10.1    13.0    13.0
                     84.5 %   80.7 %  90.4 %  84.9 %  85.6 %

Research and development

Bittium continued its R&D investments in products and product platforms targeted
for the defense and public safety markets. R&D investments mainly focused on
developing the Bittium Tough Mobile, a high security level LTE smartphone,
targeted mainly for the demanding information 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 information security
software.

R&D INVESTMENTS, MEUR             1-3/2016  1-3/2015
                                  3 months  3 months
Total R&D investments                  1.6       2.0
Capitalized R&D investments            0.3       1.0
Depreciations of R&D investments       0.1       0.1
Cost impact on income statement        1.4       1.1
R&D investments, % of net sales     10.7 %    13.3 %

CAPITALIZED R&D INVESTMENTS IN BALANCE SHEET, MEUR  1-3/2016  1-3/2015
                                                    3 months  3 months
Balance sheet value in the beginning of the period       5.6       2.2
Additions during the period                              0.3       1.0
Acquisitions of the business                                       0.3
Depreciations of R&D investments                        -0.1      -0.1
Balance sheet value at the end of the period             5.8       3.4

Business development in January-March 2016

The demand for Bittium’s R&D services has developed positively during the first
quarter. The product development project started in May 2015 with the Ministry
of Mexican Communication and Transportation for the development of Android-based
mobile devices that use both terrestrial and satellite connection for their
MEXSAT system has continued according to plans during the first quarter.

Bittium continued the R&D investments in its own products and product platforms
aiming for growth especially in the international defense, information security
and public safety markets. In February the company presented its Bittium Tough
Mobile LTE smartphone and related management and VPN encryption software at the
Mobile World Congress 2016 exhibition in Barcelona. Bittium Tough Mobile and
related management system and VPN encryption Bittium Secure Suite™ have
generated lots of interest in the information security and public safety
markets. The pilot deliveries of the product were continued during the first
quarter. Bittium has been actively seeking for, and has found a few suitable
partners and resellers who have taken Bittium Tough Mobile as part of their own
product portfolio and/or solution for their customers. The sale of the Bittium
Tough Mobile is expected to develop moderately according to the pace of the
authorities markets.

Bittium exhibited its secure and easy-to-use Bittium SafeMove remote access
solutions for managers working in the healthcare sector at Long-Term Conditions
Conference 2016 that was held in QUEII Centre, London, in January. SafeMove VPN
encryption software is also been used to secure connections in Bittium’s IoT
(Internet of Things) services and solutions. Bittium presented its IoT solutions
and services at Wearable Technology Show 2016 in ExCeL, London in March.

The development of the tactical communication system Bittium Tactical Wireless
IP Network™ (TAC WIN), used by the Finnish Defence Forces, continued. The
product deliveries for the communication system were continued during the first
quarter. Bittium received a new order for a new software package for the system.
The main objective for the development work of the new software package is to
continue enhancing the performance, data transfer capacity and survivability of
the software and the related radio platform. The value of the received purchase
order is EUR 2.8 million (excl. VAT) and it has no significant impact on
Bittium's net sales, operating result or financial standing, or on Bittium's
financial outlook for the year 2016. The company continued its efforts to bring
its defense market targeted product portfolio to the international defense
markets, and received the first small order for its TAC WIN system from a
customer in Asia.

Significant events during the reporting period

A total of 5,000 new shares in Bittium Corporation were subscribed between
December 1, 2015 and January 26, 2016 by virtue of the option rights 2008C. The
share subscription price, EUR 2,750.00 was recorded in the company's invested
non-restricted equity fund. The corresponding increase in the number of the
company's shares was entered into the Finnish Trade Register on February 10,
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 as an additional lot of Bittium Corporation's
shares in Nasdaq Helsinki Ltd. After the registration of the new shares, the
number of shares in Bittium Corporation's totaled to 35,605,168.

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. On March 31,
2016, after the registration of the new shares, the total number of shares in
Bittium Corporation’s totaled to 35,642,668.

Outlook for 2016

Bittium expects that the net sales in 2016 will grow from the previous year (net
sales of EUR 56.8 million, in 2015). The development of the operating result
includes currently many uncertainties and therefore the company has decided not
to give guidance on the development of the operating result. These uncertainties
include possible non-recurring investments in building long-term growth and
significant variations in the operating result between the quarters due to the
timing of product deliveries.

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

More information about other uncertainties regarding the outlook is presented in
the Report by the Board of Directors 2015, in the section "Risks and
uncertainties" and on the company's internet pages at www.bittium.com.

Market outlook

Bittium's customers operate in various industries, each of them having their own
industry specific factors driving the demand. A common factor creating demand
among the whole customer base is the growing need for higher speed, higher
quality and secure data transfer. Due to the technology competence accrued over
time and long history in developing mobile communication solutions, Bittium is
in a good position to offer customized solutions for its customers.

The following factors are expected to create demand for Bittium's products and
services in 2016 and beyond:

  ·
In the mobile infrastructure equipment market the implementation of LTE
technology continues to create demand for services in the LTE base station
development. There is a wide range of frequencies allocated for LTE globally
thus creating the need to develop multiple products to cover the market and
creating demand for the R&D services for development of product variants. Also
the growing amount of data transfer creates need for smaller base stations for
increasing the data transfer capacity of a LTE network. The general cost savings
of the mobile infrastructure equipment companies is reflected as increasing
price competition in the R&D services. Despite of Bittium's R&D services being
competitive, the demand is expected to slightly decrease during the year 2016.

  ·
The trend of using new commercial technologies, such as LTE, smartphones and
applications, is expected to continue in special verticals such as public safety
and cyber security creating demand for Bittium Tough Mobile secure LTE
smartphone and customized special terminals based on Bittium’s own product
platform. The sale of the terminal products is expected to develop moderately
according to the nature of authorities markets.

  ·
Secure IoT (Internet of Things) has become a significant development area in
many industries. The need for Bittium’s IoT services and customized solutions is
generated by the increasing need of companies to bring connected devices to
demanding industrial or consumer usage, such as various devices, that collect
information through the device sensors and connect the device securely to the
internet and cloud services.

  ·
In the tactical communication market in the defense sector the governments’
defense forces and other authorities need networks that increasingly moving
troops can use for transferring growing amounts of data securely. This creates
demand for Bittium’s TAC WIN broadband network and for other Bittium’s IP-based
(Internet Protocol) tactical communications solutions. Due to the long sales
cycles driven by purchasing programs of national governments, it takes years to
receive significant purchase orders. Bittium continues its efforts to bring its
defense market targeted products and services also to the international defense
markets and aims at pilot deliveries of its tactical communication system for
customers abroad during 2016.

  ·
Using public network connections in portable devices is 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.

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.

More about short-term description of the risks and uncertainties are described
in the Report by the Board of Directors 2015. More information about risks and
uncertainties are presented at the Company’s internet pages at www.bittium.com.

Statement of financial position and financing

The figures presented in the statement of financial position of March 31, 2016,
are compared with the statement of the financial position of December 31, 2015
(MEUR).

                                31.3.2016  31.12.2015
Non-current assets                   15.6        14.4
Current assets                      141.3       145.0
Total assets                        156.9       159.4
Share capital                        12.9        12.9
Other capital                       124.7       124.6
Total equity                        137.7       137.6
Non-current liabilities               2.0         2.0
Current liabilities                  17.1        19.8
Total equity and liabilities        156.9       159.4

Cash flow of the review period   1-3/2016   1-12/2015
:
+ profit of the period +/-            0.6        12.2
Adjustment of accrual basis
items
+/- Change in net working             4.4        -6.2
capital
- interest, taxes and                -0.0        -3.9
dividends
= net cash from operating             5.0         2.1
activities
- net cash from investing            -1.5       579.6
activities
- net cash from financing            -0.2      -502.2
activities
= net change in cash and cash         3.2        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 1.9 million.
Net investments for the reporting period totaled EUR 1.9 million. The total
amount of depreciation during the period under review was EUR 0.7 million. The
amount of interest-bearing debt, including finance lease liabilities, was at the
end of the reporting period EUR 1.5 million (EUR 1.4 million on December 31,
2015). Bittium's equity ratio at the end of the period was 90.5 percent (90.5
percent on December 31, 2015).

Cash and other liquid assets at the end of the reporting period were EUR 126.0
million (EUR 122.8 million on December 31, 2015).

Bittium has a total of EUR 20 million credit facility agreements which are valid
until June 30, 2017. At the end of the review period, none 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 531 people in between January and March
2016. At the end of March, the company had 537 employees (501 employees in at
the end of 2015). 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.

Events after the review period

On April 14, 2016, Bittium announced that a total of 50,498 new shares in
Bittium Corporation were subscribed for between January 28, 2016 and March 31,
2016, pursuant to series 2008C stock options. The share subscription price, EUR
27,773.90 has been recorded in the company's invested non-restricted equity
fund. The corresponding increase in the number of the company's shares has been
entered into the Finnish Trade Register on April 14, 2016. Trading with the
newly registered shares started on April 15, 2016 as an additional lot of
Bittium Corporation's shares in Nasdaq Helsinki Ltd. After the registration of
the new shares, the number of shares in Bittium Corporation's totaled to
35,693,166. The share subscription period for stock options 2008C ended on March
31, 2016.

Decisions of the Annual General Meeting of Bittium Corporation

The Annual General Meeting of Bittium Corporation, held on April 19, 2016,
approved the annual accounts for the financial year 2015 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 based on the adopted balance
sheet for the financial period January 1, 2015 – December 31, 2015 and EUR 0.25
per share as additional dividend. The dividend will be paid to the shareholders
who are registered as shareholders in the company's register of shareholders as
maintained by Euroclear Finland Ltd on the dividend record date Thursday, April
21, 2016. The dividend will be paid on Thursday, April 28, 2016.

Election and remuneration of the members of the Board of Directors

The Annual General Meeting decided that the Board of Directors shall comprise
five (5) members. Ms. Kirsi Komi, Mr. Seppo Mäkinen, Mr. Juha Putkiranta, Mr.
Staffan Simberg and Mr. Erkki Veikkolainen were elected members of the Board of
Directors for a term of office expiring at the end of the next Annual General
Meeting.

In the assembly meeting held on April 19, 2016 the Board of Directors elected
Erkki Veikkolainen as the Chairman of the Board. Further, the Board resolved to
keep the Audit and Financial Committee. Staffan Simberg (Chairman of the
committee) and Kirsi Komi were elected as members of the Audit and Financial
Committee and Seppo Laine, Authorized Public Accountant was invited to the Audit
and Financial 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. 40 percent of the total amount of the monthly
remuneration will be paid as a lump sum in Bittium Corporation's shares acquired
at a price formed in public trading, and the shares will be acquired according
to a share purchase program prepared by 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 has 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 Annual 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 9.83 percent of all of the shares in the
company. Only the unrestricted equity of the company can be used to repurchase
own shares on the basis of the authorization. Own shares can be repurchased at a
price formed in public trading on the date of the repurchase or otherwise at a
price formed on the market. The Board of Directors decides how own shares will
be repurchased. Own shares can be repurchased using, inter alia, derivatives.
Own shares can be repurchased otherwise than in proportion to the shareholdings
of the shareholders (directed repurchase).

The authorization cancels the authorization given by the General Meeting on
April 15, 2015 to decide on the repurchase of the company's own shares. The
authorization is effective until June 30, 2017.

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

The Annual 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 19.66 percent of all of the shares in the company.
The Board of Directors decides on all the conditions of the issuance of shares
and of special rights entitling to shares. The authorization concerns both the
issuance of new shares as well as the transfer of treasury shares. The issuance
of shares and of special rights entitling to shares may be carried out in
deviation from the shareholders' pre-emptive rights (directed issue).

The authorization cancels the authorization given by the General Meeting on
April 15, 2015 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, 2017.

Oulu, April 27, 2016

Bittium Corporation

The Board of Directors

Further Information:

Hannu Huttunen

CEO

Tel. +358 40 344 5466

Pekka Kunnari

CFO

Tel. +358 40 344 2229

Distribution:

Nasdaq Helsinki

Major media

Bittium Corporation Condensed Financial Statements and Notes January – March
2016

(unaudited)

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

CONSOLIDATED STATEMENT OF            1-3/2016  1-3/2015  1-12/2015
COMPREHENSIVE INCOME (MEUR)
                                     3 months  3 months  12 months
NET SALES                                14.7      15.1       56.8
Other operating income                    0.4       0.3        1.4
Change in work in progress and
finished goods
Work performed by the undertaking         0.1       0.1        0.2
for its own purpose and capitalized
Raw materials                            -0.9      -2.4       -5.5
Personnel expenses                       -8.9      -7.7      -30.3
Depreciation                             -0.7      -0.6       -2.5
Other operating expenses                 -4.8      -4.4      -17.8
OPERATING PROFIT (LOSS)                  -0.1       0.5        2.3
Financial income and expenses             0.0      -0.1       -0.2
PROFIT BEFORE TAX                        -0.1       0.4        2.1
Income tax                                0.0      -0.0        0.2
PROFIT FOR THE PERIOD FROM               -0.1       0.4        2.3
CONTINUING OPERATIONS
Discontinued operations
Profit for the year from                            1.5      539.0
discontinued operations
PROFIT FOR THE PERIOD                    -0.1       1.8      541.3

Other comprehensive income:
Items that may be reclassified
subsequently to the statement of
income
  Exchange differences on                -0.1       1.2        0.1
translating foreign operations
Other comprehensive income for the       -0.1       1.2        0.1
period total
TOTAL COMPREHENSIVE INCOME FOR THE       -0.2       3.1      541.5
PERIOD

Profit for the year attributable to
  Equity holders of the parent           -0.1       1.8      541.3

Total comprehensive income for the
period attributable to
  Equity holders of the parent           -0.2       3.1      541.5

Earnings per share from continuing
operations, EUR
  Basic earnings per share             -0.002     0.003      0.020
  Diluted earnings per share           -0.002     0.003      0.020

Earnings per share from
discontinued operations, EUR
  Basic earnings per share                        0.011      4.687
  Diluted earnings per share                      0.011      4.685

Earnings per share from continuing
and discontinued operations, EUR
  Basic earnings per share             -0.002     0.014      4.708
  Diluted earnings per share           -0.002     0.014      4.706

Average number of shares, 1000 pcs     35 606   131 549    114 983
Average number of shares, diluted,     35 656   132 252    115 037
1000 pcs

CONSOLIDATED STATEMENT OF       March 31, 2016  March 31, 2015  Dec. 31, 2015
FINANCIAL POSITION (MEUR)
ASSETS
Non-current assets
  Property, plant and                      5.2            10.8            4.1
equipment
  Goodwill                                 1.4            20.6            1.4
  Intangible assets                        7.7            18.2            7.6
  Other financial assets                   0.1             0.1            0.1
  Deferred tax assets                      1.2             1.5            1.2
Non-current assets total                  15.6            51.3           14.4
Current assets
  Inventories                              1.9             1.6            2.2
  Trade and other receivables             13.4            69.0           20.0
  Financial assets at fair                66.2            21.1           66.1
value through profit or loss
  Cash and short term deposits            59.8            29.4           56.8
Current assets total                     141.3           121.1          145.0
TOTAL ASSETS                             156.9           172.4          159.4

EQUITY AND LIABILITIES
Equity attributable to equity
holders of the parent
  Share capital                           12.9            12.9           12.9
  Invested non-restricted                 26.0            25.6           25.9
equity fund
  Translation difference                   1.1             2.8            1.2
  Retained earnings                       97.7            55.7           97.5
Total equity                             137.7            97.0          137.6

Non-current liabilities
  Deferred tax liabilities                 0.1             0.8            0.1
  Pension obligations                                      3.0
  Provisions                               1.1             0.2            1.1
  Interest-bearing liabilities             0.8             4.1            0.7
Non-current liabilities total              2.0             8.1            2.0
Current liabilities
  Trade and other payables                15.4            59.9           17.9
  Financial liabilities at                                 0.2
fair value through profit or
loss
  Provisions                               1.0             2.7            1.2
  Interest-bearing loans and               0.7             4.6            0.7
borrowings
Current liabilities total                 17.1            67.4           19.8
Total liabilities                         19.2            75.4           21.8
TOTAL EQUITY AND LIABILITIES             156.9           172.4          159.4

CONSOLIDATED STATEMENT OF   1-3/2016  1-3/2015  1-12/2015
CASH FLOWS (MEUR)
                            3 months  3 months  12 months
CASH FLOW FROM OPERATING
ACTIVITIES
Profit for the year from        -0.1       0.4        2.3
continuing operations
Profit for the year from                   1.5      539.0
discontinued operations
Adjustment of accrual            0.6       3.8     -529.1
basis items
Change in net working            4.4       6.7       -6.2
capital
Interest paid on operating      -0.1      -0.6       -1.6
activities
Interest received from           0.1       0.2        0.9
operating activities
Other financial income and                            0.0
expenses, net received
Income taxes paid                0.0      -1.0       -3.2
NET CASH FROM OPERATING          5.0      10.9        2.1
ACTIVITIES

CASH FLOW FROM INVESTING
ACTIVITIES
Proceeds from sale of                               588.2
business unit, net of cash
sold
Acquisition of business         -1.0      -1.8       -1.8
unit, net of cash acquired
Purchase of property,           -0.2      -0.9       -2.5
plant and equipment
Purchase of intangible          -0.3      -1.4       -4.3
assets
Sale of property, plant                    0.0        0.0
and equipment
Sale of intangible assets                             0.1
NET CASH FROM INVESTING         -1.5      -4.1      579.6
ACTIVITIES

CASH FLOW FROM FINANCING
ACTIVITIES
Share-option plans               0.0       0.5        0.8
exercised
Proceeds from borrowing                    3.4       14.6
Repayment of borrowing          -0.1      -3.0      -17.5
Payment of finance              -0.2      -0.5       -1.3
liabilities
Dividend paid and                                    -5.3
repayment of capital
Purchase of own shares                             -493.5
incl. transaction costs
NET CASH FROM FINANCING         -0.2       0.4     -502.2
ACTIVITIES

NET CHANGE IN CASH AND           3.2       7.3       79.5
CASH EQUIVALENTS
Cash and cash equivalents      122.8      43.3       43.3
at beginning of period
Cash and cash equivalents      126.0      50.6      122.8
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  25.1  1.5  53.8     93.4
1, 2015
Comprehensive income for the
period
  Profit for the period                         1.8      1.8
  Exchange differences on                 1.2            1.2
translating foreign
operations
Total comprehensive income                1.2   1.8      3.1
for the period
Transactions between the
shareholders
  Share option plans                 0.5                 0.5
exercised
Total transactions between           0.5                 0.5
the shareholders
Other changes                                  -0.0     -0.0
Shareholders equity on March  12.9  25.6  2.8  55.7     97.0
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                         -0.1      -0.1
  Exchange differences on                 -0.1            -0.1
translating foreign
operations
Total comprehensive income                -0.1  -0.1      -0.2
for the period
Transactions between the
shareholders
  Share option plans                 0.0                   0.0
exercised
  Share-related compensation                     0.2       0.2
Total transactions between           0.0         0.2       0.3
the shareholders
Other changes                                   -0.0      -0.0
Shareholders equity on March  12.9  26.0   1.1  97.7     137.7
31, 2016

NOTES TO THE INTERIM FINANCIAL REPORTING

ACCOUNTING PRINCIPLES FOR THE INTERIM FINANCIAL REPORTING:

The Interim Report has been prepared in accordance with IAS 34 Interim Financial
Reporting. Bittium Corporation has applied the same accounting principles in the
preparation of this Interim Report as in its Financial Statements for 2015,
except for the adoption of new standards and interpretations effective during
2016. The changes did not have material impact on the Interim Report.

SEGMENT-INFORMATION (MEUR)

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

NET SALES OF GEOGRAPHICAL AREAS (MEUR)  1-3/2016  1-3/2015  1-12/2015
                                        3 months  3 months  12 months
Net sales
  Europe                                    12.5      13.0       48.3
Americas                                     2.3       2.1        8.3
  Asia                                       0.0       0.0        0.2
Net sales total                             14.7      15.1       56.8

RELATED PARTY TRANSACTIONS    1-3/2016  1-3/2015  1-12/2015
                              3 months  3 months  12 months
Employee benefits for key          0.3       0.4        1.6
management and stock options
expenses total

CONSOLIDATED       1-3/201       10  7-9/201  4-6/2015  1-3/2015
STATEMENT OF             6  -12/201        5
COMPREHENSIVE                     5
INCOME BY QUARTER
(MEUR)
                   3 month  3 month  3 month  3 months  3 months
                         s        s        s
NET SALES             14.7     15.2     11.1      15.3      15.1
Other operating        0.4      0.4      0.3       0.4       0.3
income
Change in work in      0.0      0.0      0.0       0.0       0.0
progress and
finished goods
Work performed by      0.1      0.1      0.0       0.0       0.1
the undertaking
for its own
purpose and
capitalized
Raw materials         -0.9     -0.9     -0.8      -1.4      -2.4
Personnel             -8.9     -8.4     -6.5      -7.8      -7.7
expenses
Depreciation          -0.7     -0.8     -0.6      -0.6      -0.6
Other operating       -4.8     -4.8     -3.6      -5.0      -4.4
expenses
OPERATING PROFIT      -0.1      0.8      0.0       1.0       0.5
(LOSS)
Financial income       0.0      0.1      0.1      -0.2      -0.1
and expenses
PROFIT BEFORE TAX     -0.1      0.9      0.1       0.8       0.4
Income tax             0.0      0.2      0.0      -0.0      -0.0
PROFIT FOR THE        -0.1      1.1      0.1       0.8       0.4
PERIOD FROM
CONTINUING
OPERATIONS
Discontinued
operations
Profit for the                  0.6    534.6       2.3       1.5
period from
discontinued
operations
PROFIT FOR THE        -0.1      1.7    534.7       3.1       1.8
PERIOD
Other                 -0.1      0.0     -0.7      -0.5       1.2
comprehensive
income
TOTAL                 -0.2      1.7    534.0       2.6       3.1
COMPREHENSIVE
INCOME FOR THE
PERIOD

Profit for the
period
attributable
to:
  Equity holders      -0.1      1.7    534.7       3.1       1.8
of the parent
Total
comprehensive
income for the
period
attributable to:
  Equity holders      -0.2      1.7    534.0       2.6       3.1
of the parent

CONSOLIDATED STATEMENT OF        Mar.   Dec.  Sept.   Jun.  Mar. 31, 2015
FINANCIAL POSITION (MEUR)         31,    31,    30,    30,
                                 2016   2015   2015   2015
ASSETS
Non-current assets
  Property, plant and             5.2    4.1    3.8    3.9           10.8
equipment
  Goodwill                        1.4    1.4    1.4    1.4           20.6
  Intangible assets               7.7    7.6    7.2    6.7           18.2
  Other financial assets          0.1    0.1    0.1    0.1            0.1
  Deferred tax assets             1.2    1.2    0.9    0.9            1.5
Non-current assets total         15.6   14.4   13.5   13.1           51.3
Current assets
  Inventories                     1.9    2.2    1.4    1.8            1.6
  Trade and other receivables    13.4   20.0   15.1   22.0           69.0
  Financial assets at fair       66.2   66.1   65.8   15.9           21.1
value through profit or loss
  Cash and short term deposits   59.8   56.8  551.7    6.2           29.4
Current assets total            141.3  145.0  634.0   45.8          121.1
Assets classified as held for                        117.3
sale
TOTAL ASSETS                    156.9  159.4  647.5  176.2          172.4

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        26.0   25.9   25.9   25.8           25.6
equity fund
  Translation difference          1.1    1.2    1.2    2.3            2.8
  Retained earnings              97.7   97.5  589.3   53.5           55.7
  Non-controlling interests
Total equity                    137.7  137.6  629.3   94.5           97.0
Non-current liabilities
  Deferred tax liabilities        0.1    0.1    0.1    0.1            0.8
  Pension obligations                                                 3.0
  Provisions                      1.1    1.1    1.2    0.2            0.2
  Interest-bearing liabilities    0.8    0.7    0.7    3.7            4.1
Non-current liabilities total     2.0    2.0    2.0    1.0            8.1
Current liabilities
  Trade and other payables       15.4   17.9   13.5   16.4           59.9
  Financial liabilities at                             0.0            0.2
fair value through profit or
loss
  Provisions                      1.0    1.2    2.0    2.2            2.7
  Interest-bearing loans and      0.7    0.7    0.7    6.7            4.6
borrowings
Current liabilities total        17.1   19.8   16.2   25.2           67.4
Total liabilities                19.2   21.8   18.2   26.2           75.4
Liabilities classified as held                        55.4
for sale
TOTAL EQUITY AND LIABILITIES    156.9  159.4  647.5  176.2          172.4

CONSOLIDATED STATEMENT   1-3/2016  10-12/2015  7-9/2015  4-6/2015  1-3/2015
OF CASH FLOWS BY
QUARTER
                         3 months    3 months  3 months  3 months  3 months
Net cash from operating       5.0         0.3       3.1     -12.2      10.9
activities
Net cash from investing      -1.5        -1.2     587.4      -2.5      -4.1
activities
Net cash from financing      -0.2      -493.8     -14.9       6.1       0.4
activities
Net change in cash and        3.2      -494.7     575.5      -8.6       7.3
cash equivalents

FINANCIAL PERFORMANCE RELATED RATIOS        1-3/2016  1-3/2015  1-12/2015
                                            3 months  3 months  12 months
STATEMENT OF COMPREHENSIVE INCOME (MEUR)
Net sales                                       14.7      15.1       56.8
Operating profit (loss)                         -0.1       0.5        2.3
Operating profit (loss), % of net sales         -0.8       3.2        4.1
Profit before taxes                             -0.1       0.4        2.1
Profit before taxes, % of net sales             -0.6       2.4        3.7
Profit for the period from continuing           -0.1       0.4        2.3
operations

PROFITABILITY AND OTHER KEY FIGURES
Interest-bearing net liabilities, (MEUR)      -124.5     -41.9     -121.4
Net gearing, -%                                -90.4     -43.2      -88.2
Equity ratio, %                                 90.5      65.0       90.5
Gross investments, (MEUR)                        1.9       3.4        7.4
Average personnel during the period,             531       498        511
continuing operations
Personnel at the period end, continuing          537       501        517
operations
Average personnel during the period,                      1361
discontinued operations
Personnel at the period end, discontinued                 1367
operations
Average personnel during the period,                       451
jointly owned company - discontinued
operations
Personnel at the period end, jointly owned                 459
company - discontinued operations

AMOUNT OF SHARE ISSUE   Mar. 31, 2016  Mar. 31, 2015  Dec. 31, 2015
ADJUSTMENT (1,000 pcs)
At the end of period           35 643        131 589         35 600
Average for the period         35 606        131 549        114 983
Average for the period         35 656        132 252        115 015
diluted with stock
options

STOCK-RELATED FINANCIAL RATIOS    1-3/2016  1-3/2015  1-12/2015
(EUR)
                                  3 months  3 months  12 months
Earnings per share from
continuing operations, EUR
Basic earnings per share            -0.002     0.003      0.020
Diluted earnings per share          -0.002     0.003      0.020

Earnings per share from
discontinued operations, EUR
Basic earnings per share                       0.011      4.687
Diluted earnings per share                     0.011      4.685

Earnings per share from
continuing and discontinued
operations, EUR
Basic earnings per share            -0.002     0.014      4.708
Diluted earnings per share          -0.002     0.014      4.706

Equity *) per share                   3.86      0.74       3.86

*) Equity attributable to equity
holders of the parent

MARKET VALUES OF SHARES (EUR)          1-3/2016  1-3/2015  1-12/2015
                                       3 months  3 months  12 months
Highest                                    7.14      5.03       7.80
Lowest                                     5.15      3.27       3.27
Average                                    6.06      4.18       4.92
At the end of period                       6.41      3.90       7.01

Market value of the stock, (MEUR)         228.5     513.2      249.6
Trading value of shares, (MEUR)            59.8      93.8      837.1
Number of shares traded, (1,000 pcs)      9 863    22 441    169 993
Related to average number of shares %      27.7      17.1      147.8

SECURITIES AND          Mar. 31, 2016  Mar. 31, 2015  Dec. 31, 2015
CONTINGENT LIABILITIES
(MEUR)
AGAINST OWN
LIABILITIES
Floating charges                  2.9            1.0            3.0
Guarantees                        3.5            6.7            3.7
Rental liabilities
Falling due in the                2.3            7.1            2.3
next year
Falling due after one             1.8           12.6            2.3
year
Other contractual
liabilities
Falling due in the                2.2            2.6            2.2
next year
Falling due after one             0.3            0.5            0.4
year

Mortgages are pledged             0.0            2.6            0.0
for liabilities
totaled

NOMINAL VALUE OF       Mar. 31, 2016  Mar. 31, 2015  Dec. 31, 2015
CURRENCY DERIVATIVES
(MEUR)
Foreign exchange
forward contracts
  Market value                                 -0.0            0.1
  Nominal value                                 2.0            2.5

Purchased currency
options
  Market value                                  0.1
  Nominal value                                 6.0

Sold currency options
  Market value                                 -0.2
  Nominal value                                12.0

Attachments

04265480.pdf