Bittium Oyj — Interim / Quarterly Report 2021

Apr 29, 2021

Bittium Corporation Business Review January-March 2021

Bittium Corporation Business Review January-March 2021

Stock exchange release

Free for publication on April 29, 2021 at 8.00 am (CEST +1)

Bittium Corporation Business Review January-March 2021

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

Summary January-March 2021

· The net sales decreased by 1.5 percent year-on-year to EUR 17.0 million (EUR
17.3 million).
· The share of the product-based net sales was EUR 11.2 million (EUR 11.7
million), representing 65.7 percent of the net sales. The share of Medical
Technologies products was EUR 7.9 million.
· The share of the services-based net sales was EUR 5.9 million (EUR 5.6
million), representing 34.3 percent of the net sales.
· EBITDA was EUR 1.0 million (EUR 2.7 million).
· Operating result was EUR -1.5 million (EUR 0.2 million).

Bittium’s CEO Hannu Huttunen

The year 2021 started as expected. The net sales of the first quarter decreased
slightly compared to previous year and was EUR 17.0 million. The level of net
sales was affected especially by the timing of product deliveries. Due to the
cyclical nature of product deliveries, the first quarter of the year is
typically weaker than the other quarters.

Product sales in the first quarter consisted primarily of sales of secure
Bittium Tough Mobile™ smartphones and Bittium Faros™ ECG devices that measure
cardiac electrical activity. Sales of tactical communication systems and
products did not materialize significantly in the first quarter. The volume of
product deliveries is also affected by the challenges related to the
availability of components due to the coronavirus pandemic.

Sales of R&D services continued to grow slightly. The growth was enabled by the
release of our experts from our own product development projects for the
customer projects. Until last year, we were not able to fully meet the demand
for R&D services due to our own development projects, which required our
experts’ focus.

Operating result of the first quarter decreased from previous year and was
negative. The result of the first quarter of last year was improved by a non
-recurring license income of EUR 1.4 million, which was obtained when Germany
joined the ESSOR consortium.

In the domestic defense market, cooperation with the Finnish Defence Forces has
remained strong. We received orders under framework agreements for Bittium
Tactical Wireless IP Network™ (TAC WIN) software radio system products and
Bittium Tough Comnode™ devices. In the early part of the year, we continued to
supply Bittium Tough SDR™ vehicle radios for pilot use for the Defence Forces.
Product development of the vehicle radios will be finalized based on pilot user
experience. We aim to start volume deliveries of the products this year.

In the international defense and governmental markets, we continued the
integration and testing of our tactical communications system products with our
Austrian, Estonian, and other international customers. Travel restrictions due
to the coronavirus pandemic are delaying the progress of customer projects,
especially in the international markets.

Demand for secure Bittium Tough Mobile™ smartphones increased in the early part
of the year. We gained new customers and several pilot projects were launched.
Bittium Tough Mobile™ 2 C has received excellent feedback from customers,
especially regarding the unique data security and phone usability. To some
extent, the global shortage of components has become a challenge, due to high
demand for capacity from semiconductor suppliers. The shortage of components has
shifted some product orders and it is possible that it will even lead to
cancellations of some orders.

After the review period, we signed a distributor agreement with Mexican
telecommunications solutions provider Inmosat, which exclusively covers the sale
of Bittium’s Mexsat satellite phones to Mexican state authorities and national
security organizations. The Android™-based Mexsat phones that we developed for
the Mexican state, was designed for the Mexsat satellite communications system
of the Mexican state. The development of the devices was completed in 2017 and
several small batches have been delivered since to our customers in Mexico. As a
local company, Inmosat has an excellent and extensive support network that
covers the territories of individual Mexican states. In addition, they have
their own certified laboratory in Mexico, where the maintenance of the devices
can be taken care of locally, if necessary. We believe that with this agreement,
we will be able to serve our customers in Mexico more comprehensively, which
will strengthen the growth potential of our Mexsat business.

Alongside an aging population, the global coronavirus pandemic has provided a
strong incentive to streamline and digitize primary health care and specialist
care functions. In addition, avoiding physical contact has accelerated the
transition to remote diagnostics and remote care. Together, these factors are
driving demand in the medical technology market for both device and total
service solutions. We are responding to this growth by expanding our product and
solution portfolio. We have introduced a new home-based sleep apnea testing
solution as a follow-up to our remote diagnostic solutions that measure the
electrical activity of the heart and brain. Bittium Respiro™ is a modern sleep
apnea screening device and analysis service solution for service providers,
hospitals, clinics, and health centers. The solution focuses on Home Sleep Apnea
Testing (HSAT) and is intended to record PG-level data and analyze typical sleep
-related breathing disorders. The service is estimated to be on the market in
the third quarter of 2021. In addition to a recording device, the total solution
for measuring sleep apnea includes Respiro Analyst™ analysis software, which
utilizes artificial intelligence and significantly speeds up the work of
doctors. The total solution is also included in Bittium's cloud based and secure
Bittium MedicalSuite™ service platform, which enables analyzes to be performed
regardless of time and place. The MedicalSuite service platform now includes all
Bittium's neurophysiology and cardiology solutions, enabling service operators
to further digitize remote diagnostic service processes.

Demand for Bittium Faros™ ECG measuring devices increased during the review
period. Demand growth was accelerated in particular by the cooperation with our
customer Preventice, a leading U.S. provider of remote monitoring services in
the U.S. ECG market, as product deliveries of BodyGuardian® MINI devices that
monitor cardiac arrhythmias continued as planned. We launched a new disposable
Bittium OmegaSnap™ patch electrode for our Faros devices, specifically designed
for long-term ECG measurements. The new electrode is based on the popular
Bittium FastFix™ electrode, which has been further developed into an even more
user-friendly shape based on feedback from users, without compromising the
excellent signal quality.

We were able to proceed in the market for medical neurophysiology products in
the early part of the year and delivered several Bittium BrainStatus™ EEG
measuring devices to our customers for pilot use. Demand for new technology
devices such as BrainStatus has been slowed down by the exceptional
circumstances caused by the coronavirus pandemic. Hospitals have focused on
pandemic management and postponed testing and deployment of new equipment to a
later future. However, it seems at the moment, that demand and interest are
starting to wake up again and the first devices have been sold for clinical use.

We continued to provide connectivity solutions to our customers in the wireless
telecommunications, medical technology, and industrial markets. With the gradual
completion of the company's own product development projects, we have been able
to free up our experts for these new customer projects and even more will be
freed up in the future, which will enable an increase in the amount of customer
projects. We have also succeeded in recruiting more skilled staff with strengths
in wireless technologies. Our goal is to further increase the number of product
development service projects and expand the customer base.

In the automotive software market, we have received the first pilot project
related to 5G wireless connection. Early in the year, we joined the global
GENIVI Alliance, which aims to develop vehicles faster and more cost-effectively
by promoting standardized approaches to interoperability, integration, and
connectivity across different operating systems. We bring strong security
expertise and experience to both the Android and Linux operating systems to the
community. With these competencies we contribute to the goal of integrating
different vehicle systems in the centralized, digital cockpit.

The coronavirus pandemic continues to have some impact on our operating
environment. The prevailing restrictions affect the progress of international
projects in particular and there have been delays in the availability of
components in all our business areas. However, given the prevailing global
circumstances, we have made good progress towards our strategic goals. The first
quarter of the year was weak, as expected, but we believe the second quarter to
be clearly better than the first quarter.

Outlook for 2021

The world-wide coronavirus (SARS-CoV-2) pandemic significantly affects the
global economy and market situation. The prevailing uncertainties in the markets
cause weak visibility to the market situation.

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). The net sales and operating result of the second quarter
2021 are expected to be clearly better than in the first quarter.

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

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.

The coronavirus pandemic has caused fast changes in the company’s operating
environment. The company's management monitors the development of the pandemic
and has taken measures to prevent and correct the effects of the pandemic. It is
difficult to estimate the length of the situation or its impacts on business
operations and financial results. In particular, the potential challenges in the
global availability of components can affect the progress of customer projects
and the delivery capacity of products.

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

Key Figures

GROUP (MEUR) 1-3/2021 1-3/2020
3 months 3 months
NET SALES 17.0 17.3
Change of the net sales, % -1.5 % 83.8 %
EBITDA 1.0 2.7
EBITDA, % of net sales 5.8 % 15.9 %
OPERATING PROFIT / LOSS -1.5 0.2
Operating profit / loss, % of net sales -8.6 % 0.9 %
RESULT OF THE PERIOD FROM CONTINUING OPERATIONS -1.6 -0.2
EARNINGS PER SHARE (EUR) -0.044 -0.005

TOTAL R&D INVESTMENTS 5.6 6.1
R&D INVESTMENTS, % FROM NET SALES 32.7 % 35.2 %
CAPITALIZED R&D INVESTMENTS 2.5 3.7

NET CASH FROM OPERATING ACTIVITIES -1.4 1.2
NET CASH FROM INVESTING ACTIVITIES -2.9 -4.5
NET CASH FROM FINANCING ACTIVITIES -0.3 -0.4
NET CHANGE IN CASH AND CASH EQUIVALENTS -4.6 -3.7
CASH AND OTHER LIQUID ASSETS 20.0 31.5

NET GEARING (%) 2.2 % -8.0 %
EQUITY RATIO (%) 72.7 % 73.0 %
AVERAGE PERSONNEL DURING THE PERIOD 675 657
PERSONNEL AT THE END OF THE PERIOD 673 665

Oulu, April 29, 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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