Bittium Oyj (BITTI) Earnings Call Transcript & Summary

All right. Let's start again. So warm welcome, everybody, to this Capital Markets Day 2023. My name is Karoliina Malmi, and I'm the Head of Communications and Sustainability at Bittium. I'm quite excited to see so many friendly faces here today. We have also a lot of people participating online. So welcome to you, too. Bittium has been going through a lot of changes during the last years, and one of which being as we have transformed the company from service-based business to a house with own strong products. During the last years, we have developed these businesses further more to what -- we are going to talk about the updated strategy, which we have announced today in the morning. And -- but we will also take a bit of time to go through the journey from the past years. And also, we made few very exciting announcements last week, and we are going to address them as well. So some practicality, just raise your hand and a mic will be brought to you. And those online, you have this box -- chat box, where you can just type your question, and I'll make sure we address them here as well. We have reserved quite many time for Q&A. So after each presentation, you will have the opportunity to ask questions regarding the presentation. If you have any other questions regarding the practicalities here, there is Haiti. You met her at the entrance registration and her colleague, just ask them if you -- if there's something that they can assist you with. I think that's it. We also have our products presented in the room here next to you. And after the show our presentations, you can stick around and talk with our executives as well. Into the agenda, I'd like to start with our brand new company video, which we launch now. [Presentation]

Okay. Then next, I would like to invite our CEO, Mr. Johan Westermarck on stage, please.

So welcome to Capital Market Day. And today, we're going to go through the updated strategy. We saw the agenda here earlier, really to give you a better picture of what's happening in the company at the moment. But before we go into those, listen to a few words about myself. So I have been now with Bittium, since April this year. And before joining Bittium, look at my history, work history. So I started my work at Astra Machinery. And really, the key there was what is a strong product process equipment company nowadays know as Andritz. Pulp and Paper, and my job in the later part was there to build the service business along the -- around the product portfolio. Then I have continued. I've been in [ Alcotex ] and that's really been interesting, when we can see the supply chain management, when you go into production of electronics and products, how do you have to be understand really the whole processes, estimates, everything has to work fluently. And then I had working -- been working with Eltel Networks of pickups. There is a few things. That's also in Germany, that was a turnaround case. Loss making unit had to get some growth and some profitability in place. We're able to do that. Then Maintpartner in Sweden and Finland, turnaround cases and growth. And in my last -- before joining Bittium, I worked for Citec Group, and that was owned by private equity, and there as well was starting from a little bit challenging profitability levels not seeing the growth and was able to support with a good team in place to reach these targets. But that's a few words about myself and my background. But let's have a look at our team here. So this is the team that we have been working with to update the strategy. Business segments, the heads of business segments, we have Tommi Kangas here; we have Antti Naykki, on the Medical; and Jari Inget, on the Engineering Services. Here, we have really strong know-how and experience of how Bittium is working. Then we have the rest of my team here. And we have Karoliina, we all met her here, Communications and Sustainability. Kari Jokela, not here with us today, but he's the Legal Officer. And then we have 2 new persons that joined during the summer, Laura Kauppinen over there. And Laura has been working with several companies to build up efficient, lean organizations, managing the change. And then we have, Antti Keränen, CFO. And Antti Keränen has a strong background in the private equity and has been working with companies to change companies towards profitable growth. So this is the team working on. And I would also like to introduce here, we have the Chairman of the Board, Erkki Veikkolainen. So let's have a look at the journey. Before we go into the strategy update, a little bit look into the past. See, since 2015, where the company has been, we call it, R&D phase, really strong focus on developing new competitive products. Then we're going to look at the current stage where are we today? And then we will look into the next 2 years, what we will focus on. So the R&D phase. Here, we had R&D in the center of our business, and we have developed strong development in tactical combination products, which you will also see there in the room next to us, and we will have it in the presentations a bit later here and then also developing med-tech products. So we are in a good position there. And let's have a look at the history. So we can see here from 2015, we will call before that, we will call Elektrobit. We sold the automotive business. And with that, also the name was changed. In 2015, we got the new name Bittium. And a lot of this sale of the automotive business money were used to develop the products that we have today, changing the company to a product house. And here, we can see that 2016, we have entered the medical business. We acquired the mega companies. So we got the product portfolio in the Medical business. And also, we had a significant -- we lost 1 significant customers [indiscernible]. And also, we got the first TAC WIN in Estonia. Then 2017, we can see several frame agreements working with Finnish defense forces, Loy, and also we got the shareholding in cornonarium. And here, 2018, purchase agreement, Finnish defense forces, frame agreement, Finnish defense forces mix-up delivery started and also cooperation with Austria with a TAC WIN. At the same time, on the medical side, we've got several approvals, FDA approvals, CE approvals for our medical equipment. And this was also the stage, when we had the first frame agreement in place with Preventice, which now is known as Boston Scientific. Tough Mobile, '19 was launched, Tough Mobile 2. Frame agreement continued working with Finnish defense forces. So we have a really strong history with Finnish defense forces. Here for TAK WIN EUR 30 million. And then we had also frame agreement again with Preventice. '21, we launched the Respiro, sleep apnea equipment. '22 first half, SDR deliveries, the Finnish defense started through those. MDR approvals for Respiro and also then a new frame agreement with Boston Scientific. So we can see in the history, systematically growing the company towards a product house. Challenges, what we have had. We can see the net sales development during the years has been modest. And also the profitability has not been on the level that we should have it. So let's have a look, where are we today. Today, we have really top-notch expertise and know-how in the company. We have really competitive good products. We have a strong customer base, and we have Mega Trends supporting our business. These are the strengths. Challenges, we are still in the R&D mode of operation, and this is something that we have to change the culture. And that is what we are doing now. We have a heavy cost structure and then growth and profitability is a challenge. So let's look at the challenges. Here, we can see the last 12 months, if you look at the turnaround, turnover. And on the right-hand side, we can see how the first 9 months have been developing this year. And it's clear, growth and profitability is not on the level it should be. So this is the thing that we are now addressing. Let's go to the strengths what we have. Excellent know-how in the company, we have products and services. And this we have in the 3 business segments that we have. We have Defense Security. We have Medical and Engineering services. In addition to that, really good customers, of which we can highlight there is 1 new there is ResMed that we just came out with the press release. Look at the Mega Trends that's supporting our business. If you look at the geopolitical uncertainty, what's happening in Ukraine, what's happening in Middle East. It's clearly something that countries are now focusing on defense, increasing their defense spending. First wave is consumables, ammunition for this to have in place. But at the same time, we see that the situation in Ukraine, how important it is to have mobile troops, good communication and not just speaking or discussing, we're talking about communication is streaming pictures, videos, everything, having their mobile. Information security. So happening in the world, cyber attacks increasing, how do we ensure secure communication. Accelerating technology development IoT. Whatever you can do wireless embedded get information from your devices around the world is increasing. Digitalization of health care and aging population. So we are challenging with hospital, overloaded hospitals. So whatever we can do to increase the diagnostics, home remote diagnostics is growing. So we can see, these are mega trends that clearly support Bittium business. And where are we so far? What have we done so far in this strategy? So we have updated the strategy. It's not a new strategy. There is a good strategy that has been set a year ago. Now we have updated. Now we are implementing it towards more independent business segments, bringing transparency into what we do. Defense, medical, defense security, medical and engineering services. We have chosen the products that we will focus on. We have a good product portfolio. And at the moment, we will focus on the existing product portfolio. We will continue to invest we'll invest in the current products, making them more competitive, better quality and continued development in this area. So products and services, the existing ones are the ones we can invest. Focus on key accounts that we have set up. And that is something that we have a strong relationship, good customers, making sure that we get really the share of wallet there to build a partnership. And then lean segment organization put that in place. Also what we have looked into and taking actions is to make sure that we get a healthcare cost structure, streamlined organization, the processes, efficient way of working, and we will continue to have additional cost savings. One action we have taken here is the change in negotiations with, I guess you have all prep. So what are we going to do in the next 2 years, focus on profitability, growth, cash flow. Focus on managing customers, existing customers and also acquiring new customers. Focus on selected products and services, and really focus on develop these products and services to continue to make sure they are best in the world and then efficient way of working the organization. So here is -- here you can see our core competencies, our mission and vision. And you can all read what's in there. I want to highlight something that you can see in all 3 of these. This is where we are the best. Secure embedded technology and at the same time, strategic intent tend to grow from an R&D house to a growth-oriented technology company. That's the change with strong product portfolio. And here, we see focus areas, key focus areas in the strategy what we're going to do, focus on in the next 2 years. We have product services, we have sales, operations, processes and lean segment organization. But let's start with the products and services. Here, we have product families, defense security, Tough SDR, you have the TAC WIN, Tough VoIP. And also what we have here is this the Tough Mobile 2. The Medical side, you have the sleep apnea. Cardiac, Faros. And NeurOne, neurology and analysis. Engineering Services, focus on telecom. Telecom customers working closely with them, what we have done in the past and also industry IoT. So these are the areas we will focus next 2 years. And regarding sales. We will focus on key accounts. We have really good, strong customers that will bring -- can bring us -- have brought us opportunities so far, but has additional opportunities for us. So make sure we take good care of the existing customers, and that's the best reference for us for marketing as well. Additional to that, we have to get new customers, and we will do that, focus on new customers. So we will have both new customers and key account management. We will put in a systematic way of working. How do we manage key accounts? How do we make sure we can win the new customers. And here as well, have to make sure that we have the right persons in the right places to do this. Last thing here is the high forecast accuracy. This is something we have to by having a really close cooperation with the existing customers, new customers to get a better accuracy in the estimates, understanding what's coming. That we will focus really strongly. Then operations. Focus on efficiency, efficient production and delivery processes. And here, I want to highlight, one, there are several processes that we are focusing on making sure that we worked efficiently, but one that is really the key for us in the change, the sales and operations process. Making sure that the sales estimates, everything throughout the whole supply chain that we get in there is efficient and top quality. This will help us to make efficient and material handling, and we will also build use ecosystem partners to help us ensure flexibility and scalability and making sure the product quality is best possible. Then lean segment organization. This is the organization that will be in place first of November. And here, we have a strong, more independent business segments. We have the medical, defense security, engineering services. Supported by the enabling functions, finance, legal, risk security, development, business solutions, communication and sustainability. So we will have stronger independent business segments, and we will streamline the group organization. Group organization, before the change, we had a group organization of 120 persons plus. After the change, we have a group organization of approximately 50-plus. Many of these persons will be also moved into the business segments. At the same time, you have read about the change negotiations with 61 layoffs, 8 termination -- temporary -- sorry, temporary layoffs and temporary layoffs this 8 persons. So this is lean organization, the process is behind it. Our targets. Financial outlook for this year, we came out with our updated outlook. September 15, that has not changed. Long-term financial targets has not changed either. The average annual net sales growth, more than 10% and an operating profit level of 10% is something that we estimate to achieve these goals in '24. And these are the actions that we have taken in the strategy, healthier cost structure support us to reach these targets.

Okay. I think it's time for Q&A. And I'd like to give you the opportunity to ask the questions first here in the audience. If you have any questions regarding this.

Yes, this is Juha Kinnunen from Inderes. A couple of questions. First of all, I think there's a kind of consensus that you have high-quality products. But so far, the growth and the sales vehicles have not been exactly great. So how are you going to win new customers? Do you have some kind of new idea about how to go to market and find those clients that are helping you grow?

I think if you look at our products, what we have out there in service as well, is something that is clearly in our strategy is now let's focus on the key accounts, the customers that we have. There is room to grow with these already. And at the same time, what we need to have is good references. So we have got good references in the market. Existing customers goes out there, tell our products are great. They work as they should. And this is something that we will then use as reference, as marketing to win new customers. So we will focus on existing customers, but addition to that, also look for new customers and have this systematically managed how do we manage this. These are, you could say, farmers and hunters.

All right. Fair enough. Another question about the group function. I guess you said over 120 persons for very -- you need before and now something like 50. What actually was going on in the group before because it seems like a really high figure, even though I understand that the whole structure was different then, but what kind of people are leaving the company now? Could you tell -- are they in sales? Or are they in R&D of our own products or what is being got?

I think I will not go into details there, but what we are doing now is going through the processes. What we have changed this, as I said. I'm not saying that we have gone through an R&D phase. We have built a company, the product portfolio that we have today, and this is the solid foundation from where we can take the next step and take the growth, profitable growth. So I don't want to look backwards saying what's done and so forth. A lot of good things have been done. Now we are here. Now we have the opportunity. When it's coming to this, at what kind of people when we had the layoffs, so it's more like when we go through the processes, how do we make sure we work efficiently from one into another. And this is what we went through, and there we got this that this is how we can really streamline the organization. And as I said, the layoffs, this is unfortunate. This is not something that we would like to do, but we have to do it.

Yes, I don't want the layoffs either, but I'm just hoping to understand what was going on before and what has changed. But anyway, a final question for me. Could you give us some kind of idea what are the R&D costs going to be in the coming years? Because, of course, there have been this phase is over and you are continuing to develop your current products, but it's kind of difficult to say how much they actually need and how much has been done in some other areas that are now got.

At the moment, my -- what I can say is that we will continue to develop. We will continue to have R&D to make sure our products are today and tomorrow, competitive. So we will do that. Saying exactly what's going to be the level from here for what, it's too early. We are now in the phase of going through. We will see that exactly these product families, how much are we going to develop them, how are we going to do this. We are in the budgeting phase going through, so we will have more information later on this one. But at the moment, we do not have this information available.

Okay. Any other questions here. I can take 1 question here online. So what do you think -- what is the main reason for company situation -- financial situation and lack of sales?

I think it's -- maybe you can -- as I said it, it's -- we are going through the R&D phase. We have done this. We have now the product, everything. And I would like to put more in the phase that what are we going to do next. And not focusing on what we should have been doing. So now we have a solid foundation for growth and now we're taking the steps and actions to get the growth and have a healthier cost structure to make a healthy company.

All right. Yes. Okay. Then here is another question regarding the component shortage, which we have also disclosed has eased during this year. But however, there are some geopolitical changes in the world, especially in Taiwan region. Is the company tending now to increase the stock value to cope with the possible component shortage to come?

I think it's components or first, we talked about the COVID, what's happening in that area. And I think that there, we can see that the reason for this one is now -- we are getting back to normal during this year. But component shortage is something we don't know what's the uncertainty in the world, what's happening there. And we have to secure that we get the critical components. But if somebody asked that are we going to start to increase our inventory to this, that's not the solution. It's a solution to do to negotiate and make sure we get the components on the right time in the right place.

Okay. Thank you. In the meantime, any questions from the audience is raised? There are quite many questions here online regarding financial figures, also financial targets, EBITDA, capital structure and so forth, but these are not things that we are able to disclose at the moment. And I will skip them now. And if something comes, we will address them later. Yes. There are a couple of products related questions, but I will address them later, when our business segment heads are presenting. So I'll come back to that. But now if there aren't any questions at this moment, we will take the next step. And thank you, Johan. And I would kindly like to invite Mr. Antti Naykki, the Head of our Medical Business segment, to stage. Thank you.

Good afternoon, everyone, also on my behalf, and welcome to this Capital Markets Day of Bittium. First, I would like to introduce myself. I have a long experience in different product-related roles being as a product manager, being -- selling different products and solutions to market, managing sales team and being general management positions throughout my career internationally and globally. I've been working with Bittium a bit over 4 years and with 2 last years working as Senior Vice President of our Medical business segment. I will also, after Johan's presentation, go a bit more into the details of medical segments focus areas. What are our key targets there, what are our focus markets, focus customers, kind of more into the go-to-market strategy. And then also talk about a bit more in details about market trends that do address our business in Medical segment. In medical technology market, in overall, significant developments have been taking place how to diagnose patients remotely. And this is something also that drives us forward in our daily operations, when we enhance our product and develop them and bring them into the markets. A few words about our key competencies. We can probably say that we already have today a very strong position with some of our solution, namely Foros device in the market. We have proven our verticals technology know-how, working with 1 of the leading companies in the world, Boston Scientific, on that front. We want to make a difference in the market with our advanced technology, with our quality and innovative products combined with economic competitiveness. So we want to combine all of them to make products and solutions that can really make a difference. In Medical Business segment, I would say that biosignal know-how is our foundation. What is our strength point and this is something that we will continue to build our offering and growth within the business segment. Then a few words about market trends and how they -- how we see them affecting our businesses. Overall, the aging population makes the remote monitoring services critical. That's 1 part. The second thing is, nevertheless, what your age is, the early detection of any symptoms is critical if and when we want to decrease the overall expenditure in health care globally. So those are really driving the change towards home-based monitoring. Then, of course, Johan already mentioned in his presentation, the importance of digitalization also in medical. So this is made to help that everyone or we can help the health care professionals in terms of resource outages, but also helped in the decreased rising costs and also bring into the market more efficient and also better available services for everyone. There are, of course, certain technical aspects that also are needed and which are driving the market. One is then, of course, the assistance of artificial intelligence. So we want to improve the time used in the process, when diagnosing different symptoms. The second thing is that goes very closely to our core competencies is secure IoT. So we want to have built a robust device that can really capture high-quality biosignals. But at the same time, we want to make sure that biosignal that we do capture is secured in the device and secured on the way -- all the way during the diagnosis process and after that. Remote marketing -- remote monitoring market is in double-digit growth globally. And based on the recent studies, it will be in the growth mode for years to come. We work here at Bittium in 3 different areas of expertise: Cardiology; EEG neurology; and home sleep apnea testing. On the left-hand side, EEG monitoring has been developed the most from our businesses. Then on the right-hand side, home sleep apnea testing, where we are starting our market efforts. And both of these really go that we can assist our customers to be more efficient in the daily lives and also provide the monitoring of biosignals in home environment. This, of course, impacts the costs related to the health care sector, but also improves the patient capability that they can do the measurement in their own environments. With our cardiology portfolio and home sleep apnea testing. There, our key customer segments are value-added resellers, meaning that our customers can utilize our technology as part of the offering and enrich that in the past that they want. In many cases, they have international or global reach. For example, Boston Scientific being a good example here. Then also service providers that can be more local, and they offer the dedicated service in their countries and the same key customer groups are also in home sleep apnea testing, where we target also value-added resellers that can have a global reach and also, at the same time, service providers that offer that service in individual countries. Then our brain status product for EEG monitoring. That's targeted mainly on intensive care units, ICUs, where our key customer groups also are value-added resellers, but also individual hospitals in selected countries. But I will go a bit more in details about this in a second. So in ECG, we have accessed the market already in 2015. And the first major deal was done a couple of years later with Preventice at that time. We have also developed our market throughout Europe, in selected Middle East African countries and latest also additions into certain Asian countries where we are present. We are very well known about the high quality of the biosignal. And also, we can offer full end-to-end offering to our customers or then our customers can select different parts from our portfolio. Then measuring home sleep apnea. Our latest addition to our portfolio is Respiro product family. And as Johan said, we were probably to present the cooperation we just launched with ResMed to selected European countries, and that gives a kind of good reference that one of the world-leading sleep domain brand is trusting Bittium technology. Sleep apnea is a sleep disorder that often goes undiagnosed for many people. There are studies that almost 1 billion people are having some obstructive sleep apnea symptoms. It's, at the same time, a very undiagnosed sleep disorder, and there is definitely room for growth. But how Bittium can really help here. So we have taken consideration that we have a small device with latest technology with the accessories that are needed to conduct the measurement. At the same time, we have one of the first cloud-based -- fully cloud-based analysis tools and platforms, together with the traditional measurement type. So combining this, we are in a good position to enter the market. We are one of the first ones to have a MDR or CE Mark device for European market, and we are in a process to get the FDA approval done also. The global sleep domain business is more than EUR 4 billion. The diagnostic part of that is a bit short of USD 1 billion. Also this front is highly in rise. At the same time, there's also a lot of outdated technology used. So together, this offer growth possibilities for Bittium. Then our brain status tool solution that is targeted for intensive care units. First of all, it's a very easily and rapidly applicable. It can be set up in minutes rather than the traditional ones that will take several tens of minutes or more than an hour. This is very critical, especially in the early part of the diagnosis that the medical experts can then make the right diagnostics and start the right treatment processes that they will need. Of course, combining this with high signal quality and location interpreted data analysis. This is the last one is also very important. So they are not that many experts in individual countries, and we can offer the data for them remotely and securely. We were -- during the COVID, we were not able to access any of the ICU units for a reason. And that took 2 years from the business development stage, and we are now reentering this market and doing market development. We have done first deals and deliveries with university hospitals, both here in Finland and in certain Central European countries. It is estimated that this market will grow significantly during the next years and Bittium targets to be part of this. A few words about our key strengths. So we have already proven world-class PR signal quality. And we are 1 of the leading Holter device manufacturers in the world. We also have gained credibility with our customer base with to mention Boston Scientific and ResMed, but also with our local partners, way of working. We want to be a trusted and transparent partner, both for our customers, but also for our ecosystem partners. We can deliver from devices to accessories to analyze a full end-to-end solutions in these selected segments. And then ecosystem network, we are utilizing that in different parts of the design, manufacturing and development and maintaining of our tools to gain also better market access and improve our competitiveness. Then how we're going to do the growth. So I think there are certainly things that are favoring us from the market needs point of view, and we are addressing those points very well. We are in a good position with our tools -- sorry, with our products that are ready for the market. There are certain things that we will continue to invest. There are certain things that we need to have additional regulatory approvals, but we will address all of them. Of course, remote monitoring and the methods around that is in rise, and we will, together with our partners and customers, address them. We will have a clear focus on selected services. We will further develop our know-how, and we will focus on those 3 segments: cardiology; home sleep apnea; and neuro EEG, and really build our foundation on top of them. Then also as in Johan's presentation, we want to grow with our key customers. We want to maintain long and strategic partnerships as we have already done with the Preventice and then after that, Boston Scientific. Of course, we are seeking continuously new customers, new key customers and addressing the markets that we see that is our potential for us in short and long term. Well, thank you. I think we can then have a couple of questions.

Yes. Thank you, Antti. And questions from the audience first.

Yes. This is Juha Kinnunen again. I have questions about the ResMed cooperation. Is there some kind of a minimum commitment that they are going to purchase some amount of devices? Or is it just a cooperation now and hopefully, sales will follow?

I think as in the press release was stated, it's non-exclusive agreement that they will start to utilize our technology in certain or, let's say, in selected European countries. And I cannot address any more details about the -- a structure of the frame agreement.

And I suppose you won't comment on your targets about the cooperations?

In general level, I can comment that, of course, we want to build Respiro product family in general as a strong addition to our market access.

All right. I have one more question about this cooperation. Is it going to be a Bittium Respiro that they are going to be selling? Or is it going to be some white label like as far as I remember, it was a bit Preventice?

It will be a Bittium Respiro brand.

All right. And you were talking about recurring revenue. And as far as I remember, you haven't published any figures regarding it. But could you give some kind of amount? What is the medical business recurring revenue level? And how are you going to -- how are you thinking about growing it? I suppose it's coming from software, at least.

I think as we haven't disclosed the numbers, I cannot comment, but I can -- in generally, what I can say, there are a couple of things that are in the recurring revenue area. One is that when we sell our physical devices, we sell them with accessories, which generates recurring revenue with every measurement that has been done. And then the second aspect is the software. So these are the components that the recovery in [ revenue ] comes. But as we haven't disclosed the numbers, I cannot comment the percentage on that one.

But I will just make sure, more units you will sell and they are being used more and more, you will get more and more revenue. It's not tied to the...

Correct. If they are using our accessories in the measurement phase. That's correct.

Okay. Any other questions here? Okay. But I have quite many online. So there are a lot of questions regarding ResMed and the deal. And I think you covered them all, but 1 question related to U.S. market. Do you think that there could be a help from ResMed for our FDI approval for Respiro?

I think it's very early to say about that part. So I would not probably comment on that.

Okay. However, about the FDA, how is it going there are many questions related to that. Can you tell us the latest update on that?

Yes. So we have been in communication with the FDA regulatory authorities, and we have received their feedback, and it will look certainly that we need to do additional clinical trials in U.S. We are using also external partners to conduct those clinical trials. Together with the clinical trials needed with the FDA process, I think we are currently looking something 12 months or upwards that the process will take before we have an FDA approval for U.S. market.

Okay. So can you tell us more about how the physicians have reacted or how they have been commenting our Respiro, when they have been trying it?

Yes. So overall, the feedback has been very positive. And yes, that's true that we have done a lot of commercial pilots throughout Europe. And the feedback has been good both from the health care professionals, but also from the business people.

Okay. That's great. What about competition? Who are your competitors in each segment?

Okay. I can mention a few of them. So of course, in cardiology, the biggest competitors [ AyuRythm ] and BioTelemetry. That is a subsidiary of Philips. Then there are a number of others more local, but those are the biggest one. Then in home sleep apnea, there are NOx Medical, Itarmar, SOMNOmedics to mention a few. Then in -- with our brain status in neuro EEG, there are Cerebral from U.S. Nihon Kohden, and that's at least a good picture of our competitive landscape. So there is a good mix of well-established public companies and also scale-up phase companies that are strongly financed.

Okay. Can you tell us where the best possible growth is in? From our perspective, cardiac, sleep or neuro or in which stages we are in?

Yes, as I mentioned in my presentation that we are in different stages of all of the 3 business segments. Of course, there's still a lot of room to grow in the cardiology, and we have a good position to continue that growth internationally. That's for sure. Then of course, the home sleep apnea market is something that we are entering. So we are looking. That will be one of our key drivers for future. And with BrainStatus, I think before it's starting to generate significant revenues, it will take still some kind of business development work and strong references from the Medical segment that we are there also in the right path.

So what are challenges that you are facing in growing this business?

Of course, there are challenges like in any business. One of the challenges has been that not always all the regulatory work goes as planned in an Excel sheet, but that's very typical in our industry. Also, other companies face the same challenges, regulatory authorities, also the regulatory approval processes, develop constantly. And we need to develop also ourselves. That's definitely one thing. Then, of course, we were very unfortunate during past 2 years that we did suffer quite a bit about component shortage. And also, as Johan said, we are now in a much better position there, but that was definitely something. And also that it takes time, especially to develop a strategic partnership. It will take a lot of time and also effort. That's also something that we are very willing to work with.

Okay. And the final question, it's about AI. So what does it mean in your business? And what's your strategy in it?

Yes. So we are utilizing AI in our home sleep apnea solution. Our Respiro analysis is utilizing AI in applet analysis. Also, in cardiology, we are developing algorithms to be more efficient, to be more accurate in the analysis part. And also in BrainStatus part, we also are using ecosystem partners, and they are using AI in their final analysis. So AI has definitely a big role currently already with our products. It will continue to have even more in the future. And I think there will be a combination of AI, both in the device level and also on the analysis level, so definitely plays a critical role now and in the future.

Okay. I will ask just one more question as they keep coming up. I know that time is running. But about the ResMed case, one more question. Why exactly those countries -- does it have something behind like from the market perspective? Or why did you choose these specific countries?

There's no specific reason for those markets. But I think if you look kind of from the reimbursement point of view, those countries do offer good reimbursement. So that's one of the things that kind of drives also the market, not only in the home sleep apnea but also in the cardiology and short-, long-term Holter measurement business that the countries that have the best reimbursement also have the most lucrative business models for service providers in those countries.

Exactly. Thank you, Antti.

Thank you.

Okay. I think it's time to move forward, and I would like to invite here now Tommi Kangas, Head of our Defense & Security business.

Okay. Hello, everyone, and welcome to this Capital Markets Day. From my behalf also, my name is Tommi Kangas. And I have over 25 years experience, and I have been working for 25 years for Bittium, previously for Elektrobit. I have a strong experience in R&D, projects and sales and business management. I have, for example, been in sales over 10 years, selling our R&D services and also our products. In the previous task, which I had, I was leading this engineering services business unit for 4 years. And now I'm leading -- I started as Head of Defense & Security business unit in mid of August this year, so 2.5 months. Okay. So I will give you a strategy update, which is in a nutshell so that we will focus on our existing products and system sales. And then we will focus on our customers, key customers. And also, we will target and we'll go to the profitable growth. I will go through why we are the best in the world; what are our market trends; and also what is our offering; and what are our strengths; and then finally, what are the growth drivers, which we expect that we can get this final target which we have set for our whole company. So this is where we are the best in the world. Our competitive advantage is top-level defense communications, architecture and product portfolio. We have superior waveform quality. We have also ability to integrate our solutions for our customer systems. And then also, we support for sovereignty. It means that end users can maintain their systems in crisis situations by themselves. Okay. Let's talk about market trends, which are supporting our growth. I will give you some examples. Digitalization of the troops, there is an increasing data throughput and growing demand for mobility all the time. That will help us also sell our products and systems. Air defense systems and sensors, modernization is needed. There will be high-quality video and data stream capability needs all the time, and they will increase all the time. And then active NATO membership, we will believe and we are already going to the new forums. We will get the new opportunities for the product sales and also for the programs, R&D programs, where we can develop new technologies. And we will get there business growth in the long term. We have analyzed also market sizes. So total market of tactical networks and radios is expected to be USD 16 billion by 2027. And this is from MarketsandMarkets Report 2022. And then total market of ultra-secure smartphones is expected to be USD 4.9 billion by 2025. It's from Allied Market Research 2019. Okay. I will show you our product offering about our tactical communication systems. You can see here the illustrated picture about the battlefield. There are these command posts, then there are vehicles and also soldiers. The broadband backbone is needed to be built for the whole network so that the communication can be done. This will be done by Bittium TAC WIN broadband IP network. And then we will need also radio communication between the command posts, vehiculars and also the soldiers. And this can be done by Bittium Tough software-defined radios, which are both vehicular and handheld devices. And this connects solders and enables mobility of the troops. And finally, we also have this kind of routing possibility, automatic routing possibility, for voice over IP and routing in tactical networks, done by Bittium Tough VoIP phones. I will talk something about waveforms also. Waveform is a software that takes care -- that the data and voice gets through from one place to another. And I would like to emphasize also the importance of waveform development. The waveforms are at the core of the performance in tactical communication systems. Those are the core of the high-level voice and data performance. And those are also the core for security and reliability of the network. And this all, this hardware and software, creates our tactical communications hardware and software architecture and we will continue to develop and maintain these products by quality, by functions and to meet the evolution of electronic warfare. Then I will give you some strengths in our tactical communications. So Bittium TAC WIN for military use and peer-to-peer warfare. There's wide bandwidth with high data rates and automatic network configuration, low information latency, it's less than 20 milliseconds and mobile and quickly self-healing for mobile ad hoc network routing. Then Bittium Tough SDR radios for connecting mobile troops to commands centers, versatile RF performance; as it is software, it can be easily upgraded and it is easy to add up to different situations; superior IP MANET, mobile ad hoc network, connecting vehicles and dismounted soldiers; and uncompromised security. Waveforms are at the core of high-level data performance, security and reliability of the network, as I said in the previous slide already. Then I would like to show you also our high-security product offering Bittium Tough Mobile 2 is here in my hands. Bittium has a strong know-how and unique product portfolio in the secure communications area. We have high secure products and systems. We have 3 product families in this area: Bittium Tough Mobile 2 with 3 separate variants in the same platform, those are used, for example, by governmental high-level officers but also for tactical communications device with HDR radios; Bittium Secure Suite, used for device management and encryption of the data; Bittium Secure Call, secure voice, video and messaging application with end-to-end encryption. The highest level of security can be done with Bittium Tough Mobile 2, included with the Secure Suite and Secure Call, which creates a confidential-level certification. And then our tactical communications and security system provides following strengths: superior situational awareness from frontline troops to brigade level; next level performance; effectiveness of tactical troops, leading the troops is easier based on the up-to-date situational awareness and more reliable connections; routing excellence, dynamic routing capabilities improve network reliability; and the highest level of security for mobile communications. Tough Mobile is a system of security in the device itself and its software. And then let's go through these factors, which are accelerating our growth and which are helping us to get this target, which we have set [ to ours ]. So there are market need for modern tactical communication systems, increasing demand of situational awareness and command of mobile groups, it's increasing all the time. Active NATO membership, we expect to have a positive effect on the demand for Bittium products and systems. Growth with key customers. We have strong key customers, which we are developing all the time, and we will have a strategic long-term cooperation with them, but we also seek for new customers. There are some examples about our key customers, Finnish defense forces, Estonian defense forces and Austrian armed forces. Then growth with the partners. We have several partners for different purposes. We have integrators who are the companies who integrate third-party solutions and devices to the end system, which they provide for the defense forces. And then we have the system providers who are having some own system, for example, [ R&D ] defense system where they need some kind of tactical communication to be integrated. And we can help them to provide our tactical communication system to them. And they will then provide that whole system to, for example, our defense system for some army. Then we have international cooperation with NATO and Association of Finnish Defense & Aerospace Industries, AFDA, which is called PIA in Finnish. And then we have R&D cooperation with ESSOR and a couple of -- and several actually, several European defense industrial associations: European Defence Industrial Development Programme, European Defence Fund, European Defence Agency and then also with Business Finland. I think that was all about my presentation. It might be the time to poll for questions then.

Yes. Thank you, Tommi, very much. And first, the questions from the audience, please.

This is Juha again. First of all, this is kind of a broad question, but could you give us an overview of the tenders that are currently ongoing in tactical communication? I suppose Europe is the area that we are focused on.

I think that I am not able to do that.

Yes. I think you are referring to tenders after now the Russian's innovation to Ukraine and the tenders?

Yes. Any update on the countries that are possibly going to update their tactical communication equipment and are tendering for that.

Yes. I actually looked at it before this event, and we are not currently able to disclose those, some of which may become official later. And as soon as there is something we can tell, we will obviously let everybody then know.

All right. Perhaps in a couple of quarters.

Let's hope so.

This is another -- well, I'm hoping that you can comment at least something, but what is going on in Austria? Are they happy with the TAC WIN order that you have delivered? Have they done trials with Tough SDR? Or anything that you could comment or give color, is the client happy?

Yes, in general level, I can comment that we are doing integration with them already, and we have ongoing projects. And I think that the customer is happy already about the quality of our products and our performance.

And I'm afraid that you are going to say you cannot comment, but I'm going to ask anyway. Is Austria going to -- can they actually buy from you -- if they decide to buy from you the Tough SDR handheld radios for TAC WIN, can they do it without a public tender offer that all the competitors can't apply on? Or is it going to be...

Unfortunately, that's a process that, from a customer's behalf, we can't comment that.

All right. Another hard question coming up, maybe you can comment. I just noticed that -- these are English terms, so I'm sorry if they are pronounced horribly. But there is a purchase agreement with additional option for Tough SDR radios with the Finnish armed forces. But for example, every order, like TAC WIN, there was a frame agreement in the first slide that was regarding to this. I'm just wondering what is the difference between a purchase agreement with optionality and a frame agreement. And are we going to see possibly a frame agreement before actual purchases?

I will try to explain. So the frame agreement is the basis for hold purchases. So under the frame agreement, customer will order and will make those purchase agreements.

But there is no frame agreement for the over EUR 2 billion from the Finnish defense forces currently. It's just additional option.

I'm not sure of that.

Yes. There is an addition to the purchase order, which was around, I think, 2022.

A long time ago already.

Yes. No, that -- yes, okay. But yes, there is an option and they can use that option. It doesn't require, on my understanding, any new frame agreement behind that.

All right. I'm just trying to -- I'm just wondering if there's -- because all the frame agreements have been used. Like, full amount always has been bought. But I'm just wondering if there is risk with Tough SDR with the Finnish defense forces that this is not going to be used and that there is some kind of a delay after delay.

That's hard to comment from the customers, yes.

Yes, we are not able to comment on the detailed project order or purchase order level.

All right. I'm sorry about the difficult questions, and I will shut up now.

Okay. No worries, I'm going to continue from here. We have a couple of questions of mine as well. Okay. There is a long question about the drones and air defense. Is this an interest area for Bittium?

Yes, it is. We are, of course, targeting to get this air defense customers in the defense sector, of course.

Okay. Can you explain a little bit more like what does it mean? What kind of products they could use from us?

For the different systems, our customers can use our TAC WIN and also these SDR products for the air defense systems' commanding and controlling. So they can -- how to say it, they can they implement those devices and products to their own air defense systems and they can then command these air defense systems.

Throughout that, okay. Thank you. Also related to that, do you see that Bittium is a relatively small-sized company, that it is a challenge? And if so, how -- what do you do to mitigate that?

Okay. So we have world top class products, which we can have a very competitive advantage in that sense. And we also collaborate and cooperate with our partners. For example, those integrators and also these system providers.

Okay. Thank you. Can you tell us more specifics what is the situation in [ HX Hawks ] projects? Is there anything that we can disclose?

I don't think so, that we can.

Yes. I believe so, too. We are in several projects, correct me if I'm wrong. And we are also even leading one of those or two of those. But at this stage, they are not public, and we cannot comment on them yet. So this is something we have disclosed already earlier. Unmanned systems, what's Bittium role in those? Do we see any interest in unmanned systems?

Yes. So we have participated in the R&D programs targeting these unmanned systems. And we are also searching and researching this kind of opportunities in the market at the moment. And this is a very good example how to create more growth in our business because that's one key future thing what they will do in these armies.

Okay. Finland joined NATO lately. So what possibilities that have given or will give you?

Yes. So of course, those are very long term. But as I said already in my presentation, we will see that there will be opportunities for the collaboration with the NATO and NATO countries. And also, we will see these opportunities to get product sales and system sales for the NATO countries.

Okay. Then also a question for you about AI. Do we use AI in our defense and security product portfolio?

Yes. So I would say so that we are researching that AI item. And for example, these unmanned systems are one of the key area for AI.

Okay. I think we have covered all the questions. One last maybe, I think you almost already answered this, but how do you plan to enter or elaborate in the market in the defense side? Also from current customers, you have been talking a lot about current customers and existing key customers, so how do you try to get new customers?

So we have also -- in addition to these key customers, we have also organization and sales organization to acquire new customers in all over the world. So they are searching and acquiring all the time new customers and having discussions and having demos with the new customers. That's the way how we can acquire those.

And those processes are extremely, extremely long.

Yes.

Okay. A final question. Actually, there are a bunch of questions related to satellite terminals. Is Mexsat satellite project still running?

Yes, it is.

So how do you sell those products there?

We have there a partner who will sell the products for the local customers, and we will help them all the time to sell those products.

Okay. So it's ongoing business.

It's ongoing sales project, I would say so.

Okay. Well, thank you, Tommi, for these.

Thank you, Karoliina.

And I think it is time for us now to move forward to our last, but not least, part of the presentations before going to summary and closing. I would like to introduce Jari Inget, the Head of our Engineering Services business, and welcome him on the stage.

Okay. Good afternoon. My name is Jari Inget, and I'm leading our engineering service business unit. And I have a long history in Bittium, so over 20 years. And all the time, I have been working in our R&D service business, so where we are delivering projects to customers. So I started my career in RF design, which is designing radio hardware. Then I have almost 10 years experience in different management roles in our projects. And now last 6 years, I have been working in our business management. And I'm going to give you an update about our strategy of engineering service, and I will cover market trends, our offering, customer segments and growth drivers. And let me summarize engineering service in a nutshell. So our foundation lies in know-how. And I can proudly say that we are #1 in radio know-how in the world. And when we combine that with the life cycle design competence, we can help customers to design embedded and secure wireless products for various industries. And then shortly about market trends, which are supporting our growth. So more and more devices and sensors are connected to the cloud, which will enable new services and new business model. So instead of onetime fee you will get from the product, you can have a subscription model that you will get monthly recurring fee, and that requires connection to the cloud. And also technologies are evolving all the time, especially wireless technologies, and that brings us two types of opportunities. So the first one is that we could help our customers to develop the actual wireless technology. And then, secondly, of course, that technology could be utilized into new products. The products will be smaller. They will have a better operating time. It will enable new use cases. And customers are not having the required radio competence in-house to design such products, so it will take a lot of expertise to design LTE product for the global market. And then due to geopolitical situation, there are a lot of Western companies that are increasing their local R&D and manufacturing capacity and capability, which also brings opportunities to us because they need to seek the local partners instead of their partners from Asia. And about the market size, so there are several market researches that are predicting that, for the IoT device market, it will be double-digit growth year-to-year. So the market is heavily growing. And then about our services, and those are covering the entire product life cycle. And here, I will give you two type of examples about our typical project. So the first one is a bigger project where we are doing the whole product development, and a customer is typically having some of their own core competence, for example, certain sensor hardware and related embedded software algorithm expertise and related cloud software expertise. And what we bring to the table is that we can design other parts of the device, meaning the hardware, RF antenna mechanics and so on. And so at the end, the customer will have the final whole product. And we start our design in the analysis phase, so the customer is bringing the requirements and the use cases, and we are analyzing those. And then we are moving to the concept phase, which is the system design phase as well, where we are selecting the technologies, the main components based on the customer requirements. And then we are entering to the product development phase, which is, of course, the biggest one, where the actual design work is done, the software is written and the hardware and other schematics are done. And then when the design is ready, it will be tested, of course, during the development. But when the development is ready, it needs to be certified and the product needs to have country approvals for the global market. And there, we have good partners. And together, we can help customers so that their product is ready for the market. And of course, it's very important that our design can be produced, so we are helping our customers to transfer the device to the production. And the production facility could be the customer's own or some EMS company. And of course, we will help our customer to maintain the product on the market, so we provide support and maintenance service, which in practice is software -- new software features and, very important, security updates to the software. And in some cases, there will be hardware end-of-life component, so we need to do some redesign work and do some certification again for the customer. So that one was the bigger project. Then another example is smaller projects where we are, for example, providing RF and antenna expertise to the customer. And they are just doing, for example, the product concept and product development phase. And the customer is taking care of the remaining part there. And then in both of these projects, we are working closely with the customers' own R&D organization. So it's very important that we understand how to work with the customer in a transparent way. And then we have two, let's say, main customer segments. So the first one is industry IoT OEMs. And here, we have a clear core offering, which is embedded connected device design service. And this is applicable for a wide range of different industries, for example, logistics, construction, mobility, medical, well-being and sports. And here, what is common among customers is that they need to have a custom design product. They have certain requirements for the product. It's working in the harsh environment or regulated environment. And they cannot purchase the product from the market as is, so they need to have a custom design. And here, with our radio expertise, we are helping the customers to design this kind of device. And we are looking for a long-term partnership with the customers, so be a strategic partner, not just develop one project, so years and years and multiple projects. And here are some nice examples about our public customer references like KONE, iLOQ, Philips, GE Healthcare, so all world-class brands. And there are many more that I cannot, unfortunately, disclose due to NDA reasons. And certified systems are very important for us because those act as enablers. So without ISO 13485, we couldn't design medical-grade devices. So -- and also, we have a lot of expertise about different industry standards like locking industry standards, which affects the design. And then the another main customer segment is telecom. And here, our offering, again, is based on our radio and embedded know-how. And here, we help our customers in two ways. So we provide service to their technology development when they are designing their technology that they are using in the products and, of course, the normal product design. And here, what is common among the customers is that they are looking very specific expertise or know-how like certain operating software, operating system knowledge or certain protocol stack knowledge and our team of professionals can provide that to the customer. And the service we are providing to the network OEM customers is related to the radio unit platforms and variants and other proprietary radios. And for the mobile OEM customers, we are providing embedded software and hardware design for their chipset, ICs or modules. And what is important here is that we are not providing services to design those actual chips or ICs. We are providing service, so software that is running on those chips or hardware around those chips. And then about our strengths. So know-how is #1. We have our 30 years of experience in radio. So we have experience of any kind of radio starting from the short-range Bluetooth radios to the cellular LTE radios and all the way to the satellite radios. And there, we are #1 in the world. We have full design service coverage. We have all the competencies in-house, hardware, software, mechanics and so on. And our services are covering the full product life cycle. And we have a lot of expertise in our company. We have also our own products. Then way of working. So when we are developing together with the customers, so it's very important that we are having a transparent way of working. We are using the same design environment. We are using the same design tools, so we can adapt depending the customer needs. And then facilities. So these are very important in our business as well. So a customer is trusting us very sensitive, very business-critical information. So we need to have secure facilities, secure IT system to keep all the information safe. And also, we have very extensive in-house laboratories, which we are using, and that will shorten the project development time. So it will shorten the design and testing cycle because those are in-house. And finally, a few key points about our growth. So market really needs wireless devices, and we have such expertise. We have some knowledge to design those devices. We have a clear, focused offering, which will be developed constantly to be #1 in the world. And we are creating strategic and long-term partnership with the customers. We learn how the customer is operating. We learn the customer-specific know-how to accomplish projects with them. Then we are also creating systematic go-to-market plans and activities with partners to acquire new customers. And here, our partners are, for example, LTE radio module component suppliers, which are meeting a lot of customers. And those customers require wireless communication to their products. And in many cases, the customers are not having the expertise, so our partner can recommend that Bittium could be the design house. So it's a clear win-win to both parties. Thank you.

Thank you, Jari. And do we have questions from the audience?

It's Juha. I will keep this short this time. What are your main competitive advantages when it comes to this high-end space where you are as far as I understand? Because maybe -- okay, let me rephrase. Okay, what has changed from before? Because as far as I know, you had the expertise already for years and years. You had the history with radios, and you haven't been growing too much and that there is not a significant competitive advantage or there's a challenge. The challenge might be that you haven't been able to recruit, which has been significantly more difficult in the past years. So I was hoping to be brief, but I was very complex. Hopefully, you got what I was asking.

Yes. I think like Johan said that we have been kind of an R&D-oriented house and developed a lot of our own products, so I think that's one focus of the company has been. And of course, now we have, let's say, clear focused offering, and we know how to get more customers on that sense.

I will challenge a little bit. But how are you now getting the customers when you before didn't? I understand the focus helps, but I'm not quite sure if I believe in the growth story yet in your business.

I would say one very important is that, of course, the normal sales work that we are doing but also more like doing with the partners. So we know that we will get a lot of good references and recommendations through our customers and then also through the partners. So we are strengthening that part to get new opportunities that we could provide ourselves.

Okay. Thank you. Any further questions here? Or can -- I have also a few here. So AI strategy in your business, can you elaborate that a bit?

Yes. So because we are focusing to the embedded design, so we know that there is a certain -- this kind of tiny ML, tiny machine learning, that is coming. And like Antti also mentioned that in their products. So that's some area we are, let's say, looking for. And that's something that is, let's say, really matching with our offering. So that's something we will certainly look very closely. And if you think about, let's say, the AI that is running on the cloud based on that data, so there, we would use our partners for that one.

Okay. I think this also comes back to Juha's earlier question as well, about our focused strategy. Are there any services or any kind of business line that you have decided to stop or no longer offering customers?

I think we are more like focusing under these two main customer segments and focusing the same kind of offering for that one.

Okay. Then there is a question about automotive segment. It needs in the future, a lot of technology and security. Do you see that as one potential segment to Bittium again?

Yes. I think the automotive is something that is part of our strategy update, it's part of our industry IoT offering, and the mobility is one customer segment where we are providing actually service all the time.

Okay. At this point, I think that was all the questions unless here are -- at the audience, any further? Then thank you very much, Jari.

Thank you.

And we can continue now to our next part, the summary and closing, and I would like Johan back to the stage to continue with this.

Last thing here is why to invest in Bittium. I think first is what we have gone through here today, we see the past where we have come from, where we are today and what we need to do the next 2 years. So we need to change, and we have done part of the change, and we will complete the change. And we have a committed and highly skilled management to do this and the personnel as well. We saw the solid foundation of growth. The products that we have today in defense & security, in medical and the services in engineering solutions, the customer base that we have, so we really have a good solid foundation where the growth has been built. The change is the updated strategy we have gone through today. This will take us towards profitable growth, being a healthy company. We have the world-class product and services, strong customer base, and we have the mega trends to support us. So a lot of challenge. The change is up to us, the management of the company, that we now complete the change the next 2 years and go forward. We know what to do. The final, so would you like to have the mic?

Yes. Thank you, Johan. We still have time for questions and answers here as well.

Yes, it's Juha. About the financial targets in 2024, of course, you have said that you expect to deliver this 10% growth and 10% EBIT margin. Now that we have gone through all these businesses, could you kind of give basic assumptions that you have behind this, the most important things that need to happen in order to achieve these targets?

Let's see. First, if we look at the profitability, one is, of course, to make a healthier cost structure. Actions have been taken. We expect to get the full EUR 6 million cost savings next year in this area, and we will continue to look for additional cost savings coming from efficient processes, ways of working and how we do things. On the growth, we have good products in the medical, what we had there. We have good customers there. And we have the defense. Unfortunately, defense side, so we were not able to answer a lot of questions, but confidentiality is really key in that sector. So we will stick clearly to that. But we see that there is opportunities, there is existing customers, which we need to focus on, and existing customers can provide us a significant part of the growth. So this is what we have in-house. And now it's up to us to do this.

I will just continue a little bit on the same topic. A lot of times when you have -- you announced that you have a new deal or something and it will say this is basically included in the guidance, so you have a lot more visibility than the outsiders, let's say, like that. How good is your visibility and, at the same time, confidence level to the next year already? Or is it like half a year? Or how much visibility do you have?

Of course, it depends. If you go into the different type of businesses, the visibility is different. One thing, what I mentioned here in the strategy, is the key account. It's really working closely with the existing customers, understanding what are their decision-making, what are their needs and align their needs with our plans, getting estimates that we believe in. And this is something that we have been working now since the summer. So with this information is that -- this is how we see it. So with this information, we stick to the guidance for next year.

And finally, maybe you will speculate a little bit. Let's go -- forget this period in 2024 and '25, and let's go 5 years ahead, so definitely not a financial guidance. But what are going to be the share of revenue in Bittium? Let's say, you have the same businesses still intact. What are the biggest businesses? And what are the most profitable businesses based on the outlook and the dynamics that you see right now?

I would say that we have good opportunities in all business areas, but I would say that I'm really positive towards defense, this part, and medical as well. But again, I want to -- at the moment, what I want to do in the company, well, is focused on the next 2 years. Now let's make the change. Of course, we will think about the future as well, so I understand your question. But this is really the message to the organization and the whole thing that now we have to change from R&D house to technology-oriented product house and really get the business up and running, make a healthy company, because that is the foundation where we then can go for the future. But I see now a good future for the company.

Okay. Thank you. Any further questions here? If not, then I will continue from online questions. Regarding the -- actually, the growth target, 10% year-on-year, do you consider it quite modest, considering the market segments, how they are working with double-digit market growth?

I will say that now, let's focus on -- we have the guidance, 10% operating profit over 10% growth. That's something that we now have to reach. Then we will look into the future, what's the next possibilities there. But now we are very focusing. We know what to do in the next month, next year, next 2 years, do the change, have this change done and go forward.

Thank you. There are quite many questions regarding next year's dividend, which I already know we can't disclose yet since it is the decision of the Board of Directors to present to shareholders meeting. And about the dividend policy, are there going to be any changes to that?

I think there is no -- to my knowledge, no changes there and it's defined on our investor sites also, you can read it from there.

Then there are questions also asking how do you think to change a technology-oriented company into a sales-oriented company?

I think we are changing towards a technology-oriented sales company. So first, we are technology, the products, the know-how, what we have, embedded secure technology. That's something that we have here. That's not -- we're not going to change that. That's the foundation for the future, to build the future. But really putting into the sales is something that now that is a big thing that we will focus in the coming -- we have been working now with it, we'll continue to work on it and continue the next 2 years and from there forward. And that is really understanding, first, focus on existing customers, make sure that you get the share of wallet you could make, grow significantly with existing customers, strengthen the partnership. And that is the cheapest way to grow. Getting the best references out there. Looking for new customers, there is different types of salespeople: the ones who are taking care of the key accounts, growing partnerships and then the hunters. This is what the change that we are doing at the moment in the company. So we are stepping up the sales efforts.

Okay. Thank you. Are you planning to sell some parts of Bittium?

I have no plans to sell anything soon.

Okay. Then there are questions concerning the same topics. What opportunities you have to -- do you have to make your organization more efficient, in order -- in other words, how to sell more with less work and costs? But again, I think...

I think it's said, this change that we're coming from, the history where we are today and what we're going to do next, it's a huge organization, it's a cultural change in the organization. We have started it, we have expertise in this area. The lady sitting over there, she's done it before several times. And above all, there is the will in the organization to change. Everybody understands it, so we want to change. We can do it.

Thank you. Then we have been talking about focusing in every step of the way. So what products or services are no longer in focus?

This is -- we have gone through now the products that we will focus on. Some products will be end of line when we're coming up with some new things, end of life. So we will not end anything, something, but we will not put the efforts in R&D in these products. So at the moment, let's focus on the products that we will build the future on in the next 2 years, and those are the ones we have gone through here.

Thank you. Do you see that our R&D projects that we make in our engineering services for other companies restrict the opportunities to develop our own products?

First, I would say that looking at the past, we haven't had any restrictions to develop own products. Today, we have excellent products, good products. We have done it. Now we will put the focus on further developing, making sure they stay competitive, making sure the quality is the best possible with these products. And engineering services, we'll work with customers, our partners in that area to utilize the core competence, the knowledge that we have to help them reach their targets.

Okay. Thank you. I think I have reached my target to present all questions here. And all presentations are available online at bittium.com already, so you'll find them here. Also the recording of this event will be there. And as said, we have our executives here today. And after this presentations now, you have the opportunity to discuss with us and also the products are presented in the room next to us. So we can continue the discussion also afterwards. I'd also like to thank our participants online who have joined us. There were quite many participants and a lot of good questions. So thank you very much for those. And thank you also, all our presenters from this day, and Flik for making it happen for us. Thank you.

Thank you.