CEO's Review

The worldwide Covid-19 pandemic significantly affects the global economy and market situation. Despite the exceptional circumstances caused by the Covid-19 pandemic, we continued on the growth path in 2020 in line with our strategy. Net sales grew 4.2 percent, which was good performance given last year´s exceptional circumstances. Our business and projects are long-term in nature, which is why the effects of the pandemic on Bittium´s business were visible towards the end of the year, including slowdowns in customer projects and transitions to 2021 and difficulties in acquiring new customers.

In line with our strategy, our goal is to be a major international provider of secure and reliable communication solutions to the defense and government markets, a leading provider of industrial connectivity solutions and R&D services, and a major provider of measurement and remote diagnostics solutions for measuring and analyzing biosignals. In line with the strategy, our long-term financial target is an average annual net sales growth of more than 10 percent and an operating profit level of 10 percent.

We have made significant investments in the future by continuing our product development investments in our own products and solutions. Investments create a good foundation for future growth. The level of R&D investments in relation to net sales started to decline as planned last year, and our goal is to further reduce the amount of investments this year. At the beginning of the year, the focus of investments was on finalizing the development of Bittium Tough SDR™ handheld radios. In the spring, we started volume deliveries of handheldradios to the customer. In the second half of the year, the focus of product development investments was on the development of the Bittium Tough SDR™ vehicle radios, and the first batches were delivered to the customer for pilot use at the end of the year. Product development will continue before the actual volume deliveries begin.

In line with our strategy, investments in internationalization in the tactical communications market continued in 2020. We delivered tactical communications system products to Austrian Defense Forces, Estonian Defense Forces and other international customers.

We are involved in the iMUGS (integrated Modular Unmanned Ground System) project of the European Defense Industrial Development Program (EDIDP), which is developing new capabilities for European defense forces based on autonomous systems. The next phase of the joint European software-defined radio ESSOR software project was launched and the porting of the ESSOR waveform to tactical Bittium Tough SDR radios for the Finnish Defense Forces began.

In Finland, cooperation regarding the renewal of the Finnish Defense Forces command control and communication system continued, and a new framework agreement for the delivery of tactical communication products during the next four years is currently being prepared.

In the governmental market, the interest in mobile security and secure BittiumTough Mobile™ 2 phones has clearly increased. Continuous security attacks raise awareness of the importance of security. We launched a new, even more secure variant of our smartphone: Bittium Tough Mobile™ 2 C is meant for CONFIDENTIAL level authority communication. We broadened our partnership network and started cooperation with Virve Tuotteet ja Palvelut, a long-term operator of sales and maintenance of equipment suitable for Tetra network. We also partnered with the Swedish cryptography technology development company Tutus Data Ab to develop a common secure mobile solution.

We developed further our security software program technology and released a new streams feature for Bittium SafeMove® Mobile VPN security software. It enables the protecting of several applications and their different connections. Encryption and security adapt to the changing needs of different applications, and the special needs of real-time voice and video applications, for example, are taken into account.

The active negotiations with the State of the Mexico about the Mexsat phones to enable a wider use of the Mexsat system continued. Deliveries of mobile satellite phones developed for the Mexican state authorities fell short of target last year. However, the delivery volumes are expected to grow during this year.

In the medical technology market, digitalization continues and the demand for remote diagnostic products and services is growing. We launched an advanced remote monitoring service platform that utilizes wireless data transfer to enhance medical remote diagnostics services. Bittium MedicalSuite™ web-based service platform is mainly aimed at service providers to facilitate secure information sharing and workflow management between service providers, clinics and specialists.

We continued to develop our international distribution network and to apply for regulatory approvals for our products in various countries. Bittium BrainStatus™, which measures and monitors the electrical activity of the brain, and Cerenion´s C-Trend® analysis software were granted medical device approvals in the European Union. Cooperation with Preventice, a leading US provider of remote monitoring services, continued and in September we entered into an extension agreement for the next four years, under which we will supply the BodyGuardian® MINI devices meant for monitoring cardiac arrhythmias.

Demand for R&D services remained stable. We have developed our R&D service offering to better meet the market needs, including the telecommunications, medical technology, automotive software, and Industrial Internet markets. We continued to develop our operating methods and organization, which has brought more efficiency in our operations.

We will continue to invest in the company´s international growth in line with our strategy, both in product development and in the development of our own operations. Currently, the Covid-19 pandemic is affecting the global economy and building order backlog is still challenging. However, we believe that the effects of the pandemic are temporary and in the long run the company has excellent potential for international growth.

I would like to thank our customers and partners for the past year. The year has been exceptional, but with resilience and confident attitude towards future, we have together succeeded in continuing our projects despite the challenging circumstances. I would like to thank our employees, both those who work remote and those who are at the office, for their commitment and hard work to achieve our common goals. I would also like to thank our owners for their perseverance and trust in our company. I believe that 2021 will be better than the previous one, and by working together we can enable our future success.

Hannu Huttunen,
CEO