(Updated October 30, 2023)
Bittium's key objectives are an average annual net sales growth of more than 10 percent and an operating profit level of 10 percent. The company has published its updated strategy on October 30, 2023, which will enable it to achieve the goals set for it. The updated strategy will focus on the next two-year period, 2024 - 2025.
The company's updated strategy has three main focus areas. The first one is a change from a product development organization to a customer-centric, growth-oriented operating model through its segment organizations. Secondly, the company focuses strongly on its current products and increasing their market shares. The development work is mainly concentrated on further improving the competitiveness and productivity of these products. Thirdly, the company seeks to increase efficiency in its own operating methods and has notably streamlined its cost structure, which is expected to significantly improve the company's profitability and cash flow.
Bittium's three business segments are Medical, which focuses on measuring biosignals and remote monitoring, Defense & Security, which offers products and services to the defense and authorities' markets, and Engineering Services, which offers embedded wireless solutions for its customers. These above mentioned three focus areas will apply to all three business segments during the next two years strategy period.
At the beginning of 2022, Bittium started developing its operations towards more independent businesses. The technological know-how needed in the businesses is similar, but their customers and market dynamics are very different. Stronger independence of the businesses strengthens Bittium's ability to serve its customers in a more customer-oriented manner and improves the decision-making speed of each business, strengthening the company's position in each market. It also speeds up the responsiveness of business operations to the surrounding market situations, enabling the production of ever-increasing added value for customers.
Corporate operations that were previously centralized are now largely divided into the company's three business segments, best meeting the needs of each segment. This is an essential change to optimize the operation of more independent businesses.
Between 2016 and 2023, the company's two business segments, Defense & Security and Medical, have invested strongly in the development of their own products, which has maintained the company's high average annual R&D investment level of around EUR 20 million, corresponding to an average of approximately 25 percent of the company's annual net sales. In both product-oriented business segments, new product development projects have been completed and moved into a commercial phase of the products. In the next two years, product development in these segments will focus on continuous improvement of the quality of existing products and development of features. Continuous product improvement is the highly important to competitiveness in both business segments. In addition, the company will use development cooperation with other companies in its product development in the future.
In the previous operating model focusing on product development, the company's cost structure has been considerable due to development projects. In accordance with the updated strategy, the company will focus on significantly reducing its cost structure. This is also supported by the change negotiations that took place in the company this autumn, which led to the dismissal of 61 people and the layoff of 8 people until further notice. The company has also started other measures to make its operations more efficient, and the annual savings effects of the measures identified so far and partially already implemented are estimated to be around EUR 6 million, which the company estimates to achieve in 2024 in full.
"Bittium has excellent products and services, as well as unique expertise. The company's customers are industry leaders, each in their own field. In addition, future growth is supported by global megatrends, such as geopolitical instability, the continuous development of technology, digitalization, and the aging of the population. With the strategy announced today focusing on the period of the next two years, we aim to guide the company on the path of profitable growth," says Johan Westermarck, CEO of Bittium Corporation.
Bittium's goal is to start segment-based reporting based on the new structure by the beginning of 2024 at the latest. The company will provide more information about this later this year.