Stock exchange release
Free for publication on August 4, 2016 at 8.00 a.m. (CEST+1)
Bittium Corporation’s half year financial report January-June 2016
Services business continued its positive development in January-June 2016 and
product-based net sales were lower compared to last year
Summary April-June 2016
·
The net sales were EUR 16.4 million (EUR 15.3 million, 2Q 2015), representing an
increase of 7.1 percent year-on-year.
·
The share of the product-based net sales was EUR 2.9 million (EUR 4.3 million,
2Q 2015) and the share of the services-based net sales was EUR 13.3 million (EUR
10.9 million, 2Q 2015).
·
Operating profit was EUR 0.8 million (EUR 1.0 million, 2Q 2015).
·
Net cash flow was EUR -18.3 million (EUR -8.6 million, 2Q 2015, including both
continuing and discontinuing operations). Net cash flow includes the dividend
payment of EUR 10.7 million in April.
·
Earnings per share were EUR 0.029 (EUR 0.006, 2Q 2015).
·
During the second quarter the number of Bittium’s shares increased by altogether
50,498 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 35,693,166. The share subscription period for stock options 2008C ended
on March 31, 2016.
·
Bittium appointed M.Sc. Sami Kotkajuuri (b. 1967) as Vice President, Business
Development and M.Sc. Klaus Mäntysaari (b. 1966) as Vice President, Connectivity
Solutions as of May 1, 2016.
GROUP (MEUR) 4-6/2016 4-6/2015
3 months 3 months
NET SALES 16.4 15.3
Change of net sales, % 7.1 % 23.2 %
OPERATING PROFIT / LOSS 0.8 1.0
Operating profit / loss, % of net sales 4.9 % 6.6 %
EBITDA 1.5 1.6
CASH AND OTHER LIQUID ASSETS 107.7 42.0
EQUITY RATIO (%) 88.5 % 59.9 %
EARNINGS PER SHARE (EUR) 0.029 0.006
Summary January-June 2016
·
The net sales grew to EUR 31.1 million (EUR 30.4 million, 1-6 2015),
representing an increase of 2.3 percent year-on-year.
·
The share of the product-based net sales was EUR 5.3 million (EUR 8.8 million, 1
-6 2015) and the share of the services-based net sales was EUR 25.6 million (EUR
21.5 million, 1-6 2015).
·
Operating profit was EUR 0.7 million (EUR 1.5 million, 1-6 2015).
·
Net cash flow was EUR -15.1 million (EUR -1.3 million, 1-6 2015, including both
continuing and discontinuing operations). Net cash flow includes the dividend
payment of EUR 10.7 million in April.
·
Earnings per share were EUR 0.026 (EUR 0.009, 1-6 2015).
·
During the first half the number of Bittium’s shares increased by altogether
55,498 new shares subscribed by virtue of the stock option rights 2008C, and by
37,500 new shares implemented in a directed share issue without consideration as
reward payments to the key persons of the company. After the registration of the
new shares, the number of shares in Bittium Corporation totaled 35,693,166. The
share subscription period for stock options 2008C ended on March 31, 2016.
GROUP (MEUR) 1-6/2016 1-6/2015 2015
6 months 6 months 12 months
NET SALES 31.1 30.4 56.8
Change of net sales, % 2.3 % 14.4 % 7.8 %
OPERATING PROFIT / LOSS 0.7 1.5 2.3
Operating profit / loss, % of net sales 2.2 % 4.9 % 4.1 %
EBITDA 2.1 2.6 4.8
CASH AND OTHER LIQUID ASSETS 107.7 42.0 122.8
EQUITY RATIO (%) 88.5 % 59.9 % 90.5 %
EARNINGS PER SHARE (EUR) 0.026 0.009 0.020
Bittium’s CEO Hannu Huttunen
The net sales of the second quarter in 2016 were EUR 16.4 million, representing
an increase of 7.1 percent year-on-year. The share of the product-based net
sales was EUR 2.9 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 13.3 million. The service business developed positively thanks to
the increased demand in R&D services for special terminal products. Operating
result in the second quarter was 0.8 million. Cash flow was EUR -18.3 million,
mainly due to the dividend payment of EUR 10.7 million, investments made into
our new office building and growth in the net working capital.
Net sales in January-June were EUR 31.1 million, representing a growth of 2.3
percent year-on-year. The share of the product-based net sales was EUR 5.3
million (17.1 percent of net sales) 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 25.6 million. Operating profit decreased year
-on-year and was EUR 0.7 million.
Despite of the decrease in the demand for R&D services for mobile network
equipment manufacturers, the demand for Bittium’s R&D services has developed
positively during the second quarter. The product development project that
started in May 2015 with the Mexican Ministry of 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.
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™ secure LTE smartphone targeted for the
mobile security and public safety markets and in May we launched a new Bittium
Tough Mobile B28 frequency variant, which is targeted for public safety networks
requiring this band B28. The awareness of information security risks is growing
and the interest towards secure mobile devices is increasing, and we continued
pilot deliveries of Bittium Tough Mobile during the second quarter. However, the
development of the public safety and information security markets has been
somewhat slower than expected.
We continued R&D investments also to Bittium SafeMove® product family and
announced Bittium SafeMove® Analytics™ software as a standalone software product
for enterprises for monitoring and analyzing the performance of wireless
networks and mobile devices. We also released a new software version of Bittium
SafeMove® Mobile VPN™ remote access solution. We established a partnership with
Getac by offering Bittium SafeMove Mobile VPN and Analytics software to all
Getac’s rugged tablets and notebooks as an option across Europe from May 2016
onwards.
The development of the tactical communication system Bittium Tactical Wireless
IP Network™ (TAC WIN), used by the Finnish Defence Forces, continued. Also
product deliveries related to that system were continued during the second
quarter. We broadened our tactical communication product portfolio by launching
Bittium Tough VoIP Service™ software product that connects both fixed data
network users and wireless tactical data network users to the same voice service
network. This significantly improves the capability to lead troops and maintain
situational awareness in the quickly changing conditions of the battlefield.
Bittium demonstrated the first European cross-platform military radio technology
for effective joint operations enabled by the ESSOR (European Secure Software
defined Radio) waveform with both Leonardo-Finmeccanica from Italy and with
Thales from France at Eurosatory exhibition in Paris. Bittium has been part of
developing the ESSOR programme since it started in 2009.
We will continue to look for inorganic growth opportunities according to our
strategic guidelines and our focus in this year will be on the
internationalization and enabling growth. We strengthened the development of our
business by appointing Mr. Sami Kotkajuuri as Vice President, Business
Development as of May 1, 2016. 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 to grow 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 still 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 Half Year Financial 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 Half Year Financial Report January
-June 2016 for media, analysts and institutional investors in Restaurant Savoy,
Eteläesplanadi 14, Helsinki, Finland, on Thursday August 4, 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 were EUR 56.8 million and operating
profit was EUR 2.3 million. Bittium is listed on Nasdaq Helsinki.
www.bittium.com
Bittium Corporation’s Half Year Financial Report January-June 2016
Financial performance in January-June 2016
Bittium’s net sales during January-June 2016 increased by 2.3 percent year-on
-year to EUR 31.1 million (EUR 30.4 million, in 1-6 2015).
The share of the product-based net sales was EUR 5.3 million (EUR 8.8 million,
in 1-6 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. The product-based net sales
decreased year-on-year mainly because of 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 25.6 million (EUR 21.5
million, in 1-6 2015). Despite of the decrease in the demand for the services
business in the mobile infrastructure 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 0.7 million (EUR 1.5 million, in 1-6 2015).
CONSOLIDATED STATEMENT OF 1-6/2016 1-6/2015 2015
COMPREHENSIVE INCOME, MEUR
6 months 6 months 12 months
Net sales 31.1 30.4 56.8
Operating profit / loss 0.7 1.5 2.3
Financial income and 0.3 -0.3 -0.2
expenses
Result before tax 0.9 1.1 2.1
RESULT FOR THE PERIOD FROM 0.9 1.1 2.3
CONTINUING OPERATIONS
RESULT FOR THE PERIOD FROM 3.8 539.0
DISCONTINUING OPERATIONS
RESULT FOR THE PERIOD 0.9 4.9 541.3
TOTAL COMPREHENSIVE INCOME 0.9 5.7 541.5
FOR THE PERIOD
Result for the period
attributable to:
Equity holders of the 0.9 4.9 541.3
parent
Total comprehensive income
for the period attributable
to:
Equity holders of the 0.9 5.7 541.5
parent
Earnings per share from 0.026 0.009 0.020
continuing operations, EUR
·
Cash flow from operating activities was EUR 0.1 million (EUR -1.2 million, in 1
-6 2015, including both continuing and discontinuing operations).
·
Net cash flow was EUR -15.1 million (EUR -1.3 million, in 1-6 2015, including
both continuing and discontinuing operations). Net cash flow includes the
dividend payment of EUR 10.7 million in April.
·
Equity ratio was 88.5 percent (59.9 percent, June 30, 2015).
·
Net gearing was -83.0 percent (-23.8 percent, June 30, 2015).
Quarterly figures
GROUP’S NET SALES AND OPERATING RESULT, MEUR 2Q/16 1Q/16 4Q/15 3Q/15 2Q/15
Net sales 16.4 14.7 15.2 11.1 15.3
Operating profit (loss) 0.8 -0.1 0.8 0.0 1.0
Result before taxes 1.0 -0.1 0.9 0.1 0.8
Result for the period 1.0 -0.1 1.1 0.1 0.8
DISTRIBUTION OF NET 2Q/16 1Q/16 4Q/15 3Q/15 2Q/15
SALES BY MARKET
AREAS,
MEUR AND %
Asia 0.4 0.0 0.0 0.1 0.1
2.7 % 0.2 % 0.0 % 0.6 % 0.6 %
Americas 3.2 2.3 2.9 1.0 2.2
19.8 % 15.3 % 19.2. % 9.1 % 14.6 %
Europe 12.7 12.5 12.3 10.1 13.0
77.5 % 84.5 % 80.7 % 90.4 % 84.9 %
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 1-6/2016 1-6/2015 2015
6 months 6 months 12 months
Total R&D investments 3.6 3.9 7.3
Capitalized R&D investments -0.7 -2.0 -3.4
Depreciations and impairment of R&D investments 0.1 0.1 0.2
Cost impact on income statement 3.0 2.0 4.2
R&D investments, % of net sales 11.5 % 12.8 % 12.9 %
CAPITALIZED R&D 1-6/2016 1-6/2015 2015
INVESTMENTS IN BALANCE
SHEET, MEUR
6 months 6 months 12 months
Balance sheet value in 5.6 2.2 2.2
the beginning of the
period
Additions during the 0.7 2.0 3.4
period
Acquisitions of the 0.0 0.3 0.3
business
Depreciations and -0.1 -0.1 -0.2
impairment of R&D
investments
Balance sheet value at 6.2 4.4 5.6
the end of the period
Business development in April-June 2016
Bittium’s net sales during April-June 2016 grew to EUR 16.4 million (EUR 15.3
million, 2Q 2015), representing an increase of 7.1 percent year-on-year. The
share of the product-based net sales was EUR 2.9 million (EUR 4.3 million, 2Q
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. The decrease in the product-based
net sales year-on-year was caused by the ending of product deliveries of a
special terminal project for a US-based customer in the corresponding period,
and by the quarterly variations in product delivery timings for the Finnish
Defence Forces.
The share of the services-based net sales was EUR 13.3 million (EUR 10.9
million, 2Q 2015). 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 profit was EUR 0.8 million (EUR 1.0 million, 2Q 2015).
Despite of 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 second quarter of 2016. The product development project started in
May 2015 with the Mexican Ministry of 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.
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. The investments focused mainly in the further
development of the Bittium Tough Mobile™ secure LTE smartphone targeted for the
mobile security and public safety markets. The smartphone was presented at the
Critical Communications World event in Amsterdam, where Bittium launched a new
Bittium Tough Mobile B28 frequency variant, which is targeted for public safety
networks requiring this band 28. In addition, Bittium and Air-Lynx demonstrated
the first public safety LTE evolved Multimedia Broadcast Multicast Solution
(eMBMS) that enables efficient use of the whole LTE radio spectrum, delivering
huge amounts of data even in a congested network environment. This is
particularly important in public safety, security and other mission-critical
communications, which require fast data speeds, low latencies and reliable
connections.
The awareness of information security risks is growing and the interest towards
secure mobile devices is increasing. Bittium continued pilot deliveries of
Bittium Tough Mobile during the second quarter. However, the development of the
public safety and information security markets has been somewhat slower than
expected.
In April, Bittium participated in the Hannover Messe industrial fair in Germany
and presented its customized, secure IoT solutions and engineering services. At
the display were Bittium Smart Watch and IoT gateway reference designs, which
can be easily customized according to customer needs and industry specific
requirements.
Bittium continued R&D investments also in Bittium SafeMove product family and
announced Bittium SafeMove Analytics software as a standalone software product
for enterprises for monitoring and analyzing the performance of wireless
networks and mobile devices. Organizations that use Analytics will get real-time
and historical data on the location of mobile devices and the performance of
wireless networks and thus are able to enhance the efficiency and user
experience of mobile workers.
In May, Bittium released a new software version of Bittium SafeMove Mobile VPN
remote access solution. The new software version enhances the information
security of mobile workers by supporting performance-improving encryption
methods. Moreover, the new management user interface and support for mobile
Android devices make the work of IT departments significantly easier.
In May, Bittium established a partnership with Getac to improve the
productivity, security and user experience for field workers in challenging
conditions. Bittium offers its SafeMove Mobile VPN and Analytics software to all
Getac’s rugged tablets and notebooks as an option across Europe from May 2016
onwards. Bittium exhibited its secure and easy-to-use Bittium SafeMove remote
access solutions at Terveydenhuollon ATK päivät (information technology days for
healthcare industry) in Lahti, Finland.
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 second
quarter.
In April, Bittium expanded its product portfolio in tactical communications by
introducing Bittium Tough VoIP Service (Voice over Internet Protocol) software
product. With the product both fixed data network users and wireless tactical
data network users can be connected to the same voice service network. This
significantly improves the capability to lead troops and maintain situational
awareness in the quickly changing conditions of the battlefield.
In June, Bittium participated in the Eurosatory exhibition in Paris targeted for
defense markets and presented its tactical communication products and solutions.
In addition, Bittium presented together with both Italian company Leonardo
-Finmeccanica and French company Thales how the land forces of different
European countries will be able to communicate with each other in joint
operations, linking up via a common waveform regardless of the actual radio
platforms they use. This waveform has been developed in the European ESSOR
programme (European Secure SOftware defined Radio), where Bittium has been part
of since it started in 2009.
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. 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.
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 April 27, 2016 Bittium appointed M.Sc. Sami Kotkajuuri (b. 1967) as Vice
President, Business Development as of May 1, 2016. Mr. Kotkajuuri has 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.
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 still 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 Half Year Financial 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 network equipment market the 4G technology has reached its
maturity level that causes a decrease in the overall mobile network market in
short term. Technology development towards 5G continues generating the demand
for Bittium’s R&D services. Despite of Bittium's R&D services being highly
competitive, the demand is expected to slightly decrease during the year 2016.
·
The trend of using 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 awareness of information security risks is growing and the
interest towards secure mobile devices increases. However, the development of
the public safety and information security markets has been somewhat slower than
expected. 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
consumers and to demanding industrial usage. Such devices collect information
through the device sensors and connect the device securely to the internet and
cloud services.
·
In the defense sector’s tactical communication market 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.
Short-term 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 June 30, 2016,
are compared with the statement of the financial position of December 31, 2015
(MEUR).
30.6.2016 31.12.2015
Non-current assets 17.6 14.4
Current assets 129.4 145.0
Total assets 147.0 159.4
Share capital 12.9 12.9
Other capital 115.1 124.6
Total equity 128.0 137.6
Non-current liabilities 2.1 2.0
Current liabilities 16.9 19.8
Total equity and liabilities 147.0 159.4
Cash flow of the review period 1-6/2016 1-12/2015
:
+ profit of the period +/- 2.1 12.2
Adjustment of accrual basis
items
+/- Change in net working -2.2 -6.2
capital
- interest, taxes and 0.2 -3.9
dividends
= net cash from operating 0.1 2.1
activities
- net cash from investing -4.0 579.6
activities
- net cash from financing -11.2 -502.2
activities
= net change in cash and cash -15.1 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 4.6 million.
Net investments for the review period totaled to EUR 4.6 million. The total
amount of depreciation during the period under review was EUR 1.4 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 88.5 percent (90.5
percent on December 31, 2015).
Cash and other liquid assets at the end of the reporting period were EUR 107.7
million (EUR 122.8 million on December 31, 2015).
Bittium has a total of EUR 20.0 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 543 people in between January and June
2016. At the end of June, the company had 570 employees (516 employees at the
end of June 2015). A significant part of Bittium's personnel are R&D engineers.
Changes in the management
M.Sc. Sami Kotkajuuri (b. 1967) was appointed as Vice President, Business
Development as of May 1, 2016. Mr. Kotkajuuri has been working for 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. Mr. Kotkajuuri will continue as a member of the company’s management
group reporting to Hannu Huttunen, CEO.
M.Sc. Klaus Mäntysaari (b. 1966) has been appointed as Vice President,
Connectivity Solutions as of May 1, 2016. Mr. Mäntysaari has been working for
Bittium since 2004. Previously he has been responsible for Telecom product and
service area, where Bittium offers R&D services for wireless telecommunication
market. Mr. Mäntysaari will continue as a member of the company’s management
group reporting to Hannu Huttunen, CEO. Connectivity Solutions product and
service area combines company’s former Telecom and IoT Solutions product and
service areas. By merging these product and service areas Bittium prepares for
the 5G mobile network technology development, where IoT (Internet of Things)
plays a major role.
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
The company has no significant event after the review period.
Oulu, August 4, 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 – June 2016
(unaudited)
The Half Year Financial Report has been prepared in accordance with IAS 34
Interim Financial Reporting.
CONSOLIDATED STATEMENT OF 1-6/2016 1-6/2015 1-12/2015
COMPREHENSIVE INCOME (MEUR)
Continuing operations 6 months 6 months 12 months
NET SALES 31.1 30.4 56.8
Other operating income 0.9 0.7 1.4
Change in work in progress and
finished goods
Work performed by the undertaking 0.2 0.1 0.2
for its own purpose and capitalized
Raw materials -2.3 -3.8 -5.5
Personnel expenses -17.7 -15.4 -30.3
Depreciation -1.4 -1.2 -2.5
Other operating expenses -10.0 -9.4 -17.8
OPERATING PROFIT (LOSS) 0.7 1.5 2.3
Financial income and expenses 0.3 -0.3 -0.2
PROFIT BEFORE TAX 0.9 1.1 2.1
Income tax 0.0 -0.0 0.2
PROFIT FOR THE PERIOD FROM 0.9 1.1 2.3
CONTINUING OPERATIONS
Discontinued operations
Profit for the year from 3.8 539.0
discontinued operations
PROFIT FOR THE PERIOD 0.9 4.9 541.3
Other comprehensive income:
Items that may be reclassified
subsequently to the statement of
income
Exchange differences on -0.1 0.8 0.1
translating foreign operations
Other comprehensive income for the -0.1 0.8 0.1
period total
TOTAL COMPREHENSIVE INCOME FOR THE 0.9 5.7 541.5
PERIOD
Profit for the year attributable to
Equity holders of the parent 0.9 4.9 541.3
Total comprehensive income for the
period attributable to
Equity holders of the parent 0.9 5.7 541.5
Earnings per share from continuing
operations, EUR
Basic earnings per share 0.026 0.009 0.020
Diluted earnings per share 0.026 0.009 0.020
Earnings per share from
discontinued operations, EUR
Basic earnings per share 0.029 4.687
Diluted earnings per share 0.029 4.685
Earnings per share from continuing
and discontinued operations, EUR
Basic earnings per share 0.026 0.037 4.708
Diluted earnings per share 0.026 0.037 4.706
Average number of shares, 1000 pcs 35 646 131 862 114 983
Average number of shares, diluted, 35 646 132 054 115 037
1000 pcs
CONSOLIDATED STATEMENT OF June 30, 2016 June 30, 2015 Dec. 31, 2015
FINANCIAL POSITION (MEUR)
ASSETS
Non-current assets
Property, plant and 6.9 3.9 4.1
equipment
Goodwill 1.4 1.4 1.4
Intangible assets 8.0 6.7 7.6
Other financial assets 0.1 0.1 0.1
Deferred tax assets 1.2 0.9 1.2
Non-current assets total 17.6 13.1 14.4
Current assets
Inventories 2.3 1.8 2.2
Trade and other receivables 19.4 22.0 20.0
Financial assets at fair 66.5 15.9 66.1
value through profit or loss
Cash and short term deposits 41.2 6.2 56.8
Current assets total 129.4 45.8 145.0
Assets held for sale 117.3
TOTAL ASSETS 147.0 176.2 159.4
EQUITY AND LIABILITIES
Equity attributable to equity
holders of the parent
Share capital 12.9 12.9 12.9
Invested non-restricted 26.0 25.8 25.9
equity fund
Translation difference 1.1 2.3 1.2
Retained earnings 88.0 53.5 97.5
Total equity 128.0 94.5 137.6
Non-current liabilities
Deferred tax liabilities 0.1 0.1 0.1
Provisions 1.1 0.2 1.1
Interest-bearing liabilities 0.8 0.7 0.7
Non-current liabilities total 2.1 1.0 2.0
Current liabilities
Trade and other payables 15.0 16.4 17.9
Financial liabilities at
fair value through profit or
loss
Provisions 1.1 2.2 1.2
Interest-bearing loans and 0.8 6.7 0.7
borrowings
Current liabilities total 16.9 25.2 19.8
Total liabilities 19.0 26.2 21.8
Liabilities classified as held 55.4
for sale
TOTAL EQUITY AND LIABILITIES 147.0 176.2 159.4
CONSOLIDATED STATEMENT OF 1-6/2016 1-6/2015 1-12/2015
CASH FLOWS (MEUR)
6 months 6 months 12 months
CASH FLOW FROM OPERATING
ACTIVITIES
Profit for the year from 0.9 1.1 2.3
continuing operations
Profit for the year from 3.8 539.0
discontinued operations
Adjustment of accrual 1.2 8.1 -529.1
basis items
Change in net working -2.2 -10.6 -6.2
capital
Interest paid on operating -0.3 -1.2 -1.6
activities
Interest received from 0.5 0.2 0.9
operating activities
Other financial income and 0.0 0.0 0.0
expenses, net received
Income taxes paid 0.0 -2.6 -3.2
NET CASH FROM OPERATING 0.1 -1.2 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, -2.2 -1.9 -2.5
plant and equipment
Purchase of intangible -0.8 -2.9 -4.3
assets
Sale of property, plant 0.0 0.0
and equipment
Sale of intangible assets 0.1 0.1
NET CASH FROM INVESTING -4.0 -6.5 579.6
ACTIVITIES
CASH FLOW FROM FINANCING
ACTIVITIES
Share-option plans 0.0 0.7 0.8
exercised
Proceeds from borrowing 15.3 14.6
Repayment of borrowing -0.1 -3.3 -17.5
Payment of finance -0.4 -0.9 -1.3
liabilities
Dividend paid and -10.7 -5.3 -5.3
repayment of capital
Purchase of own shares -493.5
incl. transaction costs
NET CASH FROM FINANCING -11.2 6.5 -502.2
ACTIVITIES
NET CHANGE IN CASH AND -15.1 -1.3 79.5
CASH EQUIVALENTS
Cash and cash equivalents 122.8 43.3 43.3
at beginning of period
Cash and cash equivalents 107.7 42.0 122.8
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 4.9 4.9
Exchange differences on 0.8 0.8
translating foreign
operations
Total comprehensive income 0.8 4.9 5.7
for the period
Transactions between the
shareholders
Distribution of dividends -5.3 -5.3
Share option plans 0.7 0.7
exercised
Share-based payments 0.1 0.1
awards
Total transactions between 0.7 -5.2 -4.6
the shareholders
Other changes -0.0 -0.0
Shareholders equity on March 12.9 25.8 2.3 53.5 94.5
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 0.9 0.9
Exchange differences on -0.1 -0.1
translating foreign
operations
Total comprehensive income -0.1 0.9 -0.9
for the period
Transactions between the
shareholders
Distribution of dividends -10.7 -10.7
Share option plans 0.0 0.0
exercised
Share-related compensation 0.2 0.2
Total transactions between 0.0 -10.5 -10.4
the shareholders
Other changes -0.0 -0.0
Shareholders equity on March 12.9 26.0 1.1 88.0 128.0
31, 2016
NOTES TO THE HALF YEAR FINANCIAL REPORTING
ACCOUNTING PRINCIPLES FOR THE HALF YEAR FINANCIAL REPORTING:
The Half Year Financial Report has been prepared in accordance with IAS 34
Interim Financial Reporting. Bittium Corporation has applied the same accounting
principles in the preparation of this Half Year Financial 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 Half Year Report.
SEGMENT-INFORMATION (MEUR)
Bittium Corporation does not have segments that require reporting according to
IFRS 8 standard.
NET SALES OF GEOGRAPHICAL AREAS (MEUR) 1-6/2016 1-6/2015 1-12/2015
6 months 6 months 12 months
Net sales
Europe 25.1 25.9 48.3
Americas 5.5 4.4 8.3
Asia 0.5 0.1 0.2
Net sales total 31.1 30.4 56.8
RELATED PARTY TRANSACTIONS 1-6/2016 1-6/2015 1-12/2015
6 months 6 months 12 months
Employee benefits for key 0.7 0.7 1.6
management and stock options
expenses total
CONSOLIDATED 4-6/201 1-3/201 10 7-9/2015 4-6/2015
STATEMENT OF 6 6 -12/201
COMPREHENSIVE 5
INCOME BY QUARTER
(MEUR)
3 month 3 month 3 month 3 months 3 months
s s s
NET SALES 16.4 14.7 15.2 11.1 15.3
Other operating 0.5 0.4 0.4 0.3 0.4
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 0.1 0.0 0.0
the undertaking
for its own
purpose and
capitalized
Raw materials -1.5 -0.9 -0.9 -0.8 -1.4
Personnel -8.8 -8.9 -8.4 -6.5 -7.8
expenses
Depreciation -0.7 -0.7 -0.8 -0.6 -0.6
Other operating -5.2 -4.8 -4.8 -3.6 -5.0
expenses
OPERATING PROFIT 0.8 -0.1 0.8 0.0 1.0
(LOSS)
Financial income 0.2 0.0 0.1 0.1 -0.2
and expenses
PROFIT BEFORE TAX 1.0 -0.1 0.9 0.1 0.8
Income tax 0.0 0.0 0.2 0.0 -0.0
PROFIT FOR THE 1.0 -0.1 1.1 0.1 0.8
PERIOD FROM
CONTINUING
OPERATIONS
Discontinued
operations
Profit for the 0.6 534.6 2.3
period from
discontinued
operations
PROFIT FOR THE 1.0 -0.1 1.7 534.7 3.1
PERIOD
Other -0.0 -0.1 0.0 -0.7 -0.5
comprehensive
income
TOTAL 1.0 -0.2 1.7 534.0 2.6
COMPREHENSIVE
INCOME FOR THE
PERIOD
Profit for the
period
attributable
to:
Equity holders 1.0 -0.1 1.7 534.7 3.1
of the parent
Total
comprehensive
income for the
period
attributable to:
Equity holders 1.0 -0.2 1.7 534.0 2.6
of the parent
CONSOLIDATED STATEMENT OF Jun. Mar. Dec. Sept. Jun. 30, 2015
FINANCIAL POSITION (MEUR) 30, 31, 31, 30,
2016 2016 2015 2015
ASSETS
Non-current assets
Property, plant and 6.9 5.2 4.1 3.8 3.9
equipment
Goodwill 1.4 1.4 1.4 1.4 1.4
Intangible assets 8.0 7.7 7.6 7.2 6.7
Other financial assets 0.1 0.1 0.1 0.1 0.1
Deferred tax assets 1.2 1.2 1.2 0.9 0.9
Non-current assets total 17.6 15.6 14.4 13.5 13.1
Current assets
Inventories 2.3 1.9 2.2 1.4 1.8
Trade and other receivables 19.4 13.4 20.0 15.1 22.0
Financial assets at fair 66.5 66.2 66.1 65.8 15.9
value through profit or loss
Cash and short term deposits 41.2 59.8 56.8 551.7 6.2
Current assets total 129.4 141.3 145.0 634.0 45.8
Assets classified as held for 117.3
sale
TOTAL ASSETS 147.0 156.9 159.4 647.5 176.2
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 26.0 25.9 25.9 25.8
equity fund
Translation difference 1.1 1.1 1.2 1.2 2.3
Retained earnings 88.0 97.7 97.5 589.3 53.5
Non-controlling interests
Total equity 128.0 137.7 137.6 629.3 94.5
Non-current liabilities
Deferred tax liabilities 0.1 0.1 0.1 0.1 0.1
Provisions 1.1 1.1 1.1 1.2 0.2
Interest-bearing liabilities 0.8 0.8 0.7 0.7 3.7
Other non-current 0.1 0.0
liabilities, non-interest
-bearing
Non-current liabilities total 2.1 2.0 2.0 2.0 1.0
Current liabilities
Trade and other payables 15.0 15.4 17.9 13.5 16.4
Financial liabilities at 0.0 0.0
fair value through profit or
loss
Provisions 1.1 1.0 1.2 2.0 2.2
Interest-bearing loans and 0.8 0.7 0.7 0.7 6.7
borrowings
Current liabilities total 16.9 17.1 19.8 16.2 25.2
Total liabilities 19.0 19.2 21.8 18.2 26.2
Liabilities classified as held 55.4
for sale
TOTAL EQUITY AND LIABILITIES 147.0 156.9 159.4 647.5 176.2
CONSOLIDATED STATEMENT 4-6/2016 1-3/2015 10-12/2015 7-9/2015 4-6/2015
OF CASH FLOWS BY
QUARTER
3 months 3 months 3 months 3 months 3 months
Net cash from operating -4.9 5.0 0.3 3.1 -12.2
activities
Net cash from investing -2.5 -1.5 -1.2 587.4 -2.5
activities
Net cash from financing -10.9 -0.2 -493.8 -14.9 6.1
activities
Net change in cash and -18.3 3.2 -494.7 575.5 -8.6
cash equivalents
FINANCIAL PERFORMANCE RELATED RATIOS 1-6/2016 1-6/2015 1-12/2015
6 months 6 months 12 months
STATEMENT OF COMPREHENSIVE INCOME (MEUR)
Net sales 31.1 30.4 56.8
Operating profit (loss) 0.7 1.5 2.3
Operating profit (loss), % of net sales 2.2 4.9 4.1
Profit before taxes 0.9 1.1 2.1
Profit before taxes, % of net sales 3.0 3.8 3.7
Profit for the period from continuing 0.9 1.1 2.3
operations
PROFITABILITY AND OTHER KEY FIGURES
Interest-bearing net liabilities, (MEUR) -106.2 -22.5 -121.4
Net gearing, -% -83.0 -23.8 -88.2
Equity ratio, % 88.5 59.9 90.5
Gross investments, (MEUR) 4.6 5.2 7.4
Average personnel during the period, 543 509 511
continuing operations
Personnel at the period end, continuing 570 516 517
operations
Average personnel during the period, 1375
discontinued operations
Personnel at the period end, discontinued 1406
operations
Average personnel during the period, 465
jointly owned company - discontinued
operations
Personnel at the period end, jointly owned 491
company - discontinued operations
AMOUNT OF SHARE ISSUE Jun. 30, 2016 Jun. 30, 2015 Dec. 31, 2015
ADJUSTMENT (1,000 pcs)
At the end of period 35 643 132 541 35 600
Average for the period 35 646 131 862 114 983
Average for the period 35 646 132 054 115 015
diluted with stock
options
STOCK-RELATED FINANCIAL RATIOS 1-6/2016 1-6/2015 1-12/2015
(EUR)
6 months 6 months 12 months
Earnings per share from
continuing operations, EUR
Basic earnings per share 0.026 0.009 0.020
Diluted earnings per share 0.026 0.009 0.020
Earnings per share from
discontinued operations, EUR
Basic earnings per share 0.029 4.687
Diluted earnings per share 0.029 4.685
Earnings per share from
continuing and discontinued
operations, EUR
Basic earnings per share 0.026 0.037 4.708
Diluted earnings per share 0.026 0.037 4.706
Equity *) per share 3.59 0.71 3.86
*) Equity attributable to equity
holders of the parent
MARKET VALUES OF SHARES (EUR) 1-6/2016 1-6/2015 1-12/2015
6 months 6 months 12 months
Highest 7.14 5.30 7.80
Lowest 5.15 3.27 3.27
Average 6.04 4.37 4.92
At the end of period 5.55 4.70 7.01
Market value of the stock, (MEUR) 198.1 622.9 249.6
Trading value of shares, (MEUR) 81.1 193.8 837.1
Number of shares traded, (1,000 pcs) 13 425 44 365 169 993
Related to average number of shares % 37.7 33.6 147.8
SECURITIES AND Jun. 30, 2016 Jun. 30, 2015 Dec. 31, 2015
CONTINGENT LIABILITIES
(MEUR)
AGAINST OWN
LIABILITIES
Floating charges 3.0 3.0 3.0
Guarantees 3.6 6.6 3.7
Rental liabilities
Falling due in the 2.3 7.3 2.3
next year
Falling due after one 1.3 13.5 2.3
year
Other contractual
liabilities
Falling due in the 2.2 2.5 2.2
next year
Falling due after one 0.3 0.5 0.4
year
Mortgages are pledged 0.0 3.0 0.0
for liabilities
totaled
NOMINAL VALUE OF Jun. 30, 2016 Jun. 30, 2015 Dec. 31, 2015
CURRENCY DERIVATIVES
(MEUR)
Foreign exchange
forward contracts
Market value -0.0 -0.0 0.1
Nominal value 3.0 1.5 2.5
Purchased currency
options
Market value 0.0
Nominal value 1.5
Sold currency options
Market value -0.0
Nominal value 3.0
