Bittium Oyj

Good morning, everyone, and welcome to this press conference on Bittium Corporation's half-year financial report. My name is Karolina Malmi. I'm head of the communications and investor relations at Bittium. Today, I'm here with our CEO, Johan Westermark, who will soon give you the presentation. If you have any questions, please use the chat box, and the questions will be answered at the end of the presentations. Thank you. So now I will hand over to Johan.

Thank you, Carolina. Let's start the presentation and let's first have a look at some forward-looking statements. Just to remind everybody that by nature, forward-looking statements involve risk uncertainty and there is always a risk related to these statements. Today we will go through first the summary of the first half this year. Then we will look at the financial review. Second quarter, first half, we will have the business segments reviews. And then we will look at the outlook for this year. And in the end, we will have possibility for questions and answers. Summary. First half. 24 net sales grew and operating results improved. Net sales first half was 37.9 million euros, which is an increase of 6.5% year on year. Net sales for Q2 was 19.8 million euros, which is a decrease of of 4.4% operating results. First half was 2.9 million euros representing 7.7% of net sales and operating results in Q2 was 1.9 million euros representing 9.6% of net sales. And last year, we updated our strategy. The strategy was building the company from an R&D house to a company towards profitable growth. And we can say, and we are on this path. Implementation is going forward systematically, and we are on the path. We can see the defense and security business grew 36.6% year on year. However, Medical business was affected by the extended schedules of regulatory approval process, and engineering services was affected by the challenging market situation. We can also see that the results from the cost-saving measures are starting to kick in. R&D investments decreased as we are focusing on continuing strongly developing existing products and services to be even more competitive. Order book was 33.8 million, which is an increase of 46.3% year on year. And then group half yearly financial developments. First half, see year on year growth was 6.5%, ending up in 37.9 million euros. And keeping in mind as well that we can see that, let's go forward to this operating results. And the operating result was 2.9 million euros. And comparing to last year, we can see a significant improvement. And then group quarterly financial developments. Second quarter decreased significantly. Year on year, 4.4%, minus 4.4%. And here, keeping in mind that Q2 last year was affected by the improved component availability, which boosted the sales. And also we can see the nature of the quarters here. Traditionally, we can see that we have Q1, Q3 are quite slow, as Q4 has been the strongest quarter. Then, at the operating profit, operating result ended up in 1.9 million euros, which is 9.6% of net sales. R&D investments, level of R&D investments decreased, being 7.9 million euros. Capitalized was 3.9 million euros compared to last year, lower than last year. Depreciations, 2.8 million euros, same level as last year. And the total R&D costs and depreciations in the P&L was 8. 6.9 million euros. And here we can see in the first half this year, the main focus of R&D investment was in improving the competitiveness of existing products and services in medical technology and software and tactical communication systems and radios. Cash flow. Net profit impacted 7.7. We have change in net working capital minus 3.9. Interest in taxes minus 0.8. And net cash from operating activities was 3.0 compared to last year minus 4.6. Net cash from investing activities, minus 4.1. Net cash from financing activities, minus 1.7. And change in cash and cash equivalents, minus 2.8 compared to last year, same time, minus 12.2. Then the balance sheet. Non-current assets, 84.3 million euros, which included property, plants, equipment, capitalized development, and other assets. Current assets, inventories, 28.3, trade and other receivables, 39.4, cash and liquid assets, 5.5 million euros. Liabilities, 48.6 million euros, where we have trade and other payables, 21.6, interest-bearing debt, 22.3, other liabilities, 4.7, and net gearing of 15%. On a good level. Equity ratio, 70.3%. And then let's have a look at the development of the business segments. And let's start with the defense and security business. Here we see the significant growth, 36.6% year-on-year. ended up in a net sales of 21 million euros and an operating result of 2.4 million euros. Significant improvement from last year. The megatrend of geopolitical uncertainty, which has led the states to increase their budgets and modernize their defense forces, we see that will continue. Good cooperation with Finnish Defence Forces continues. We have the partnership agreement under work. We have received new orders, tough SDRs, tough wind products and other products. The internationalisation strategy is proceeding, progressing as planned. We signed frame agreements with Lockheed Martin and BAE Systems. And also Croatian Armed Forces ordered Bitium Tactical Communication products and systems. We also received NATO approval for the TUF Mobile 2 mobile phone. TUF Mobile 2C. Medical business segment. Here we see a decrease year on year, minus 14.8%, ended up in 9.7 million euros. Operating result, however, improved, being 0.2 million euros. What is really impacting our medical business at the moment is the stricter requirements in the regulatory approvals for medical devices, And this subsequently lengthens the schedules for the approval. And this has an impact on our growth strategy. What we have done is we have to speed up this process. We are strengthening our organization in regulatory affairs. And we have also received positive feedback from from clinical trials regarding the respiro device. For us, very important is the cooperation with Boston Scientific, and that is continuing well. And remote diagnostic markets, the underlying remote diagnostic market continues to grow. Then engineering services business segment. Had a decrease of 18.1% year-on-year on net sales, ending up in 7.3 million euros. Operating result positive 0.5. Here we see a challenging market situation at the moment. Customers are really cautious to start new development projects, postponing existing projects. And this market situation we expect to continue for the end of this year. Despite the current challenges, 5G implementation creates demand in the market and also different IoT solutions. We want new customers in telecom and construction during this period. a new project started to design test terminal for satellite communication system testing. Outlook for this year. Despite some challenges with what I mentioned in the medical and engineering services, we are on track towards the profitable growth. And the strategy, implementation of strategy is ongoing systematically. Megatrends are supporting our growth. Strong customer base. And we are really focusing in the strategy on taking good care of existing customers, acquiring new customers. So there's a good base for growth. World-class products and services, the products that we have, and we will continue to focus to increase their competitiveness. And our people, committed, high-skilled people, the organization, what we have is really good. And we have strengthened the organization. Like I mentioned, for instance, the regulatory affairs, we are strengthened to speed up the approval process in the medical. So strategy forward is in full swing. Financial outlook for this year. Net sales, 85.95 million euros. Operating results, between seven and 9.5 million euros. So these are the financial outlook. This is the financial outlook for this year. Investor calendar. Today, we are meeting here for the Q2 results, first half, and the next one will be 18th of October for Q3. And then we have questions and answers. Carolina.

Thank you, Johan. So there are a few questions here online. And the first one is about the second half of the dividend. So what was the schedule for that? Do we have already date approved?