Bittium CEO Comments on half year financial report January-June 2020

Bittium's CEO Hannu Huttunen

The net sales in the second quarter of 2020 as well as in the whole first half of the year developed according to our plans well. The net sales in the second quarter grew by 6.8 percent year-on-year and in the whole first half by 28.7 percent. The increase in net sales was due to the growth in product sales, which accounted for more than 70 percent of net sales. The product sales include the sale of the tactical communication systems and products, secure Bittium Tough Mobile™ smartphones and Bittium Faros™ ECG devices.

Our significant customer projects and cooperation continued successfully despite the exceptional circumstances caused by the coronavirus pandemic. The development work of tactical communication system for Austrian Defense Forces continued according to our plans. The deliveries of tactical Bittium Tough SDR™ handheld radios to Finnish Defence Forces were started in April, and the deliveries of tactical Bittium Tough SDR™ vehicle radios are expected to start by the end of this year. The cooperation with Preventice, the leading provider of remote medical monitoring services in the US, continued as planned in the US cardiac market. The development of the sales channel for Bittium's Faros ECG products and related software also developed well outside the USA. The advanced Bittium BrainStatus™ EEG measuring device, a new type of technology measuring the electrical activity of the brain, received medical device approval in Europe.

The active negotiations with the State of the Mexico about the Mexsat phones to enable a wider use of the Mexsat system continued. The prevailing exceptional circumstances due to the coronavirus pandemic in the Middle America have slowed down the progress of the negotiations significantly, and we have no information on how the coronavirus pandemic will affect the budgets of the State of Mexico yet.

During the first half of 2020 the sale of product development services decreased by 14 percent year-on-year. The decrease in the net sales was caused by the company's own significant large R&D projects that tie experts into internal product development. Also the restrictions due to the coronavirus pandemic have reflected acquiring new customers. As the demand for 5G technology development leveled off, we have continued to invest in new customers and application areas. As a new application area for product development services, we have introduced our own OEM application management and security solutions implemented on the Android Automotive platform.

Measures to ensure the health and safety of staff and to ensure business continuity were started already in March as the coronavirus pandemic reached Europe. We are happy to be able to say that the coronavirus pandemic has so far not affected the health of our employees and that work has continued as planned. The first half of the year has materialized according to our plans and we believe that the effects of the coronavirus pandemic are temporary and that in the long run the company has excellent opportunities for international growth.