Header - hero image Report by the Board of Directors
Report by the Board of Directors 2023

Year 2023 in Short

Net Sales and Operating Profit in 2023 Decreased Year-on-Year. Actions Taken to Improve the Financial Performance Will Be Effective from 2024 onwards.

Bittium’s net sales in January-December 2023 decreased by 8,8 percent year-on-year to EUR 75.2 million (EUR 82.5 million).

The share of product-based net sales was EUR 45.8 million (EUR 57.4 million), representing 60.9 percent of the net sales. The share of Medical products was EUR 21.8 million (EUR 22.6 million), and the share of Defense & Security products and systems was EUR 24.0 million (EUR 34.8 million). The decline in the product-based net sales was mainly caused by the delays in Medical technology product deliveries resulting from the component shortage in the beginning of the year, weaker than expected development of product sales outside of the US, and delays in regulatory approvals of medical devices. In addition, the slower-than-estimated progress of multi-year projects in the Defense business and thus the timing of orders and product deliveries affected negatively to the development of net sales.

The share of services-based net sales was EUR 29.5 million (EUR 25.1 million), representing 39.1 percent of the net sales. The share of Engineering Services’ R&D services was EUR 17.0 million (EUR 15.2 million), resulting from the progressing digitalization in our customers’ businesses and the new customers won last year.

R&D investments were EUR 20.2 million (EUR 22.3 million), representing 26.9 percent of net sales (27.0 percent), of which EUR 7.2 million were capitalized in the balance sheet (EUR 6.6 million).

In the fourth quarter, there were non-recurring items of EUR 3.2 million in total, including non-recurring costs of EUR 0.7 million due to changes negotiations and non-recurring write-down of EUR 2.5 million due to the impairment of inventory. The inventory write-down was aimed, in accordance with the principle of prudence, at those components of the Defense & Security and Medical Business Segments whose minimum order quantity has been too large compared to the current demand forecast or the turnover rate has been very low.

EBITDA was EUR 5.2 million (EUR 11.0 million), including above-mentioned EUR 3.2 million non-recurring costs.

The operating result was EUR -4.3 million (EUR 0.3 million). In addition to the decline in the net sales, the operating result was affected by the above-mentioned non-recurring costs of EUR 3.2 million.

Result for the period was EUR -5.4 million, and earnings per share were EUR -0.153, including above-mentioned non-recurring items of EUR 3.2 million (result for the period EUR 0.3 million and earnings per share EUR 0.007).

Resulting from the change negotiations and other cost measures taken, Bittium will achieve approximately EUR 6.0 million annual cost savings in total, from which EUR 0.8 million realized during 2023. The total cost savings the company estimates to achieve in 2024 in full.

Cash flow from operating activities was EUR 1.2 million (EUR 8.0 million). Net cash flow during the period was EUR -10.7 million, including EUR -4.3 million operating loss, EUR 7.2 million R&D investments into own products, EUR 3.0 million increase in the net working capital, and EUR 1.8 million dividend payment as the most significant items weakening the cash flow (EUR -3.0 million, including EUR 6.6 million R&D investments into own products, and EUR 1.4 million dividend payment as the most significant items).

The equity ratio was 69.6 percent (69.7 percent). Net gearing was 13.2 percent (3.0 percent).

The order backlog at the end of the year was EUR 27.6 million (EUR 28.1 million).

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