Bittium Oyj — Interim / Quarterly Report 2021

Oct 22, 2021

Bittium Corporation Business Review January-September 2021

Bittium Corporation Business Review January-September 2021

Stock exchange release

Free for publication on October 22, 2021 at 8.00 am (CEST +1)

Bittium Corporation Business Review January-September 2021

Third Quarter Net Sales Grew and Operating Result Was Positive

Unless otherwise mentioned, the figures in brackets refer to the corresponding
period in the previous year.

Summary January-September 2021

· The net sales grew by 0.4 percent year-on-year to EUR 56.8 million (EUR 56.6
million).
· The share of product-based net sales was EUR 40.1 million (EUR 38.6
million), representing 70.5 percent of the net sales. The share of Medical
Technologies products was EUR 20.3 million (EUR 13.6 million) and the share of
Defense & Security products was EUR 19.7 million (EUR 25.0 million).
· The share of services-based net sales was EUR 16.8 million (EUR 18.0
million), representing 29.5 percent of the net sales.
· EBITDA was EUR 7.1 million (EUR 10.2 million).
· Operating result was EUR -0.5 million (EUR 1.8 million).

Summary July-September 2021

· The net sales grew by 22.2 percent year-on-year to EUR 17.1 million (EUR
14.0 million).
· The share of product-based net sales was EUR 12.2 million (EUR 8.5 million),
representing 71.0 percent of the net sales. The share of Medical Technologies
products was EUR 6.9 million (EUR 4.1 million) and the share of Defense &
Security products was EUR 5.3 million (EUR 4.4 million).
· The share of services-based net sales was EUR 5.0 million (EUR 5.5 million),
representing 29.0 percent of the net sales.
· EBITDA was EUR 2.9 million (EUR 1.8 million).
· Operating result was EUR 0.2 million (EUR -1.0 million).

Bittium’s CEO Hannu Huttunen

The net sales of the third quarter grew compared to previous year and was EUR
17.1 million. Due to the global shortage of components, net sales and operating
result fell short of targets due to the postponement of some product deliveries
to the next year. Third quarter product sales consisted primarily of sales of
secure Bittium Tough Mobile™ smartphones, tactical communication systems and
products, and Bittium Faros™ devices that measure cardiac electrical activity.
Sales of product development services decreased slightly from the previous year.
This was caused by a fixed-price service project whose schedule was extended
causing longer-term recognition of revenue. The operating result of the third
quarter improved from the previous year and was positive.

The net sales of January-September 2021 grew by 0.4 percent year-on-year. The
operating result remained slightly negative due to the weak first quarter of the
year. The net sales grew in product business from previous year and decreased
slightly in service business.

During the third quarter, we continued the development of the tactical wireless
network system used by the Finnish Defense Forces and the deliveries of the
products related to the system continued in accordance with the Defense Forces'
equipment plan. Field testing, further development, and planning of operational
usage of Bittium Tough SDR™ vehicle radios progressed forward. The declining
availability of components makes the deliveries more difficult, and some
deliveries have been postponed to next year.

Our strategic target is to grow our business in the international defense market
with the help of local integrators. We made progress towards the target as
tactical communication projects that were at a standstill due to the corona
pandemic are slowly opening. The international defense market projects are very
long by their nature and it can take several years to progress to the actual
competition.

Together with our important customer Austrian Defense Forces, we continued the
integration and testing of the tactical communication system products. In
Estonia, our partner signed a framework agreement with the Estonian Defense
Forces for the next four years. The framework agreement concerns a reform aimed
at developing the IP data transmission of the Estonian Army, which will also
include third-party products, such as Bittium TAC WIN system products used by
the Estonian Defense Forces.

The demand for secure Bittium Tough Mobile™ smartphones increased from the
previous year. The information security market is strongly country-specific, and
the states typically have their own operators who take care of the state’s
information security. We are working to establish collaboration with these local
operators, with the goal of building mobile security for local authorities on
top of Bittium’s secure smartphone. Since the market has opened, we have been
able to continue piloting our products for the customers. The global shortage of
components has caused delays in the deliveries of the phones as well as in
receiving orders. If the shortage of components continues, the quantities of
products to be delivered will be lower than anticipated for the whole year.

The distribution cooperation of Mexsat satellite phones with the Mexican
telecommunications solutions’ provider Inmosat has progressed well. In addition
to the actual product deliveries, we will also provide the customer with
security software solutions.

With regards to Bittium's medical technology products, the business relies
strongly on cooperation with service providers in the market. One of the goals
of our medical business is to acquire more minority holdings in European
companies providing remote cardiology services. In the third quarter, we signed
an agreement with Technomed Ltd in the United Kingdom under which Bittium will
acquire a 25 percent stake in Technomed. The company is one of the largest ECG
service providers in the UK and has been using Bittium Faros™ ECG measuring
devices in its service offering for several years. Cooperation will also be
strengthened with the introduction of other Bittium medical technologies.
Bittium also has minority holdings in Evismo, a Swiss provider of remote medical
diagnostic services, and Coronaria Analyysipalvelut Oy, a Finnish provider of
analysis services for cardiac arrhythmias, sleep apnea and hypertension.

We continued to develop our own products. In cardiac product line we released a
new version of the Bittium Cardiac Navigator ™ cardiac analysis software with
features that take the software in an even more efficient and user-friendly
direction. Cardiac Navigator is used by numerous customers of our Faros ECG
measuring devices that measure the electrical activity of the heart. We also
launched new ECG electrodes that support both single, dual, and three-channel
ECG measurements with the Faros device. According to several medical studies,
the diagnostic yield is significantly higher in long-term ECG measurements than
in short-term measurements. The quality and properties of the ECG electrodes in
our Bittium OmegaSnap™ product family of electrodes make long-term measurements
more reliable, cost-effective, and easier for both patients and healthcare
professionals.

The demand for our Faros devices continued to grow during the review period. The
growth was driven in particular by the cooperation with Preventice, a leading
U.S. remote monitoring service provider in the U.S. ECG market. Product sales
also increased in the European ECG markets. The global shortage of components is
also slowing down Faros' product deliveries and we will not be able to deliver
all orders this year.

The medical device approvals of Bittium Respiro™, which focus on research and
analysis of sleep apnea at home, are progressing. In the third quarter, we
received medical device approval for the first customer variant of a sleep apnea
device, targeted to the Finnish market, and its deliveries began. The sleep
apnea device version for international sales is expected to be more widely on
the market in early 2022.

All in all, the demand for our medical technology products and services grew
well and our strategic goal to grow into an international manufacturer of
outside-hospital medical devices and a provider of platform technology is
progressing steadily. The global streamlining and digitalization of primary
healthcare and specialist care functions continues, and the transition to remote
diagnostics and care is taking place all the time. Together, these factors are
driving the demand in the medical technology market for both device and end-to
-end service solutions.

We continued to provide product development services to our customers in the
markets for wireless telecommunications, medical technology, automotive and
manufacturing industry, and gained new international customers from various
industries. The demand for product development services in the areas of wireless
communications, especially in O-RAN (Open Radio Access Network) is growing and
we are increasing our expertise in this area. Our goal is to further increase
the product development service projects and expand the customer base as the
number of the Bittium’s own product development projects decreases.

The biggest risk in achieving this year's targets is the availability of
electronic components related to product deliveries. It seems that the shortage
of components will continue until the next year and will significantly affect
our ability to deliver products during 2022 as well. We will continue our
efforts to acquire components needed for the product deliveries. However, given
the prevailing global circumstances, we have made good progress towards our
strategic goals.

Outlook for 2021

The spread of new variants of the coronavirus and the global disruption in the
availability of electronic components have a significant impact on the global
market, also causing uncertainty for the development of Bittium's business
towards the end of the year.

Bittium expects the net sales in 2021 to grow from the previous year (EUR 78.4
million in 2020) and the operating result to improve from the previous year (EUR
2.1 million in 2020).

More information about Bittium’s market outlook is presented on the company's
internet pages at www.bittium.com.

Risks and Uncertainties

Bittium has identified several business, market and finance related risk factors
and uncertainties that can affect the level of sales and profits.

The coronavirus pandemic has caused changes in the company’s operating
environment. The company management has been actively following and anticipating
the development of the pandemic and taken measures to prevent and remedy the
impacts of the pandemic. It is difficult to estimate the length of the situation
or its impacts on business operations and financial results.

The global disruption in the availability of electronic components and their
price development have caused fast changes in the company’s operating
environment. The company monitors the development of the situation and actively
strives to ensure the availability of components required for product
deliveries. Poor availability of components can have a detrimental effect on the
progress of customer projects and the ability to deliver products.

More information about uncertainties is presented on the company's internet
pages at www.bittium.com.

Key Figures

GROUP (MEUR) 7-9/2021 7-9/2020 1-9/2021 1-9/2020
3 months 3 months 9 months 9 months
NET SALES 17.1 14.0 56.8 56.6
Change of the net 22.2 % -7.8 % 0.4 % 17.2 %
sales, %
EBITDA 2.9 1.8 7.1 10.2
EBITDA, % of net sales 16.8 % 13.2 % 12.5 % 18.1 %
OPERATING PROFIT / LOSS 0.2 -1.0 -0.5 1.8
Operating profit / 1.4 % -7.4 % -0.9 % 3.2 %
loss, % of net sales
RESULT OF THE PERIOD 0.1 -1.0 -1.0 1.5
FROM CONTINUING
OPERATIONS
EARNINGS PER SHARE 0.002 -0.029 -0.027 0.042
(EUR)

TOTAL R&D INVESTMENTS 3.8 4.9 14.9 16.9
R&D INVESTMENTS, % FROM 22.4 % 34.7 % 26.2 % 29.9 %
NET SALES
CAPITALIZED R&D 1.2 2.8 5.6 10.1
INVESTMENTS

NET CASH FROM OPERATING 2.9 1.5 4.1 1.8
ACTIVITIES
NET CASH FROM INVESTING -1.6 -3.4 -6.8 -11.8
ACTIVITIES
NET CASH FROM FINANCING -0.3 -0.4 -2.1 -1.1
ACTIVITIES
NET CHANGE IN CASH AND 1.0 -2.3 -4.8 -11.1
CASH EQUIVALENTS
CASH AND OTHER LIQUID 19.8 24.1 19.8 24.1
ASSETS

NET GEARING (%) 2.2 % -1.4 % 2.2 % -1.4 %
EQUITY RATIO (%) 73.2 % 74.8 % 73.2 % 74.8 %
AVERAGE PERSONNEL 661 669 667 669
DURING THE PERIOD
PERSONNEL AT THE END OF 660 677 660 677
THE PERIOD

Oulu, October 22, 2021

Bittium Corporation
The Board of Directors

Further Information:

Hannu Huttunen
CEO
Tel. +358 40 344 3507

Pekka Kunnari
CFO
Tel. +358 40 344 2229

Distribution:

Nasdaq Helsinki
Major media

About Bittium

Bittium specializes in the development of reliable, secure communications and
connectivity solutions leveraging its over 35-year legacy of expertise in
advanced radio communication technologies. Bittium provides innovative products
and services, 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. Bittium also provides healthcare technology products and services for
biosignal measuring in the areas of cardiology, neurology, rehabilitation,
occupational health and sports medicine. Net sales in 2020 were EUR 78.4 million
and operating profit was EUR 2.1 million. Bittium is listed on Nasdaq Helsinki.
www.bittium.com

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