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We invite you to send us your opinion about this reporting format to the email address investors@bittnet.ro

A message from the CEO

Today we present, for the first time, the results for the 9-month period ended on September 30. We are happy to showcase our shareholders a solid performance recorded in this volatile environment: a consolidated turnover of RON 75.8 million, which represents an increase of over 36% compared to the same period of last year, well above the pace of the IT industry in Romania or other companies from the BET-XT index. 

The operating profit for the period is RON 1.8 million, RON 7.3 million higher than in the same period of last year. The Education Division of our Group registered operating result improved by RON 600K compared to the same period of 2019, going from an operational loss of approximately RON 300K to an operating profit of RON 300K, while the operating result of the Technology Division increased by 6.7 million RON, from operating loss of RON 5.2 million to RON 1.5 million operating profit.

This positive evolution of the financial results is due to the increase by RON 7.7 million of the gross margin, an increase that is divided into RON 900K growth for the Education Division and RON 6.9 million growth for the Technology Division, amid the RON 665K reduction of fixed expenses and of the increase by RON 1.3 million of the sales costs.

Historically, given the seasonality of budgets and spending patterns in the IT&C sector in Romania and globally, Bittnet’s most significant results have always been recorded in the last months of the year, more precisely in Q4 of each year. We would like to mention this beacause until now, being listed on AeRO, we have only published the half yearly results and the investors did not have a chance to understand entirely how our perfomance differs from one quarter to another.

As a guideline, historically, the results for the first nine months represented approximately 60% of the turnover for the year, while Q4 contributed approximately 40% to the total revenue. This is due to the specifics of our client: large, very large and even giant companies, which operate with annual budgets.

Below we provide a graphic that captures the historical quarterly evolution of turnover. The same trend highlighted in the period 2015-2019 was observed also in 2007-2014.

Benefitting from the opportunity, we would like to mention that in Q3 our group recorded a turnover similar in size to the individual turnovers of Bittnet and Dendrio in 2017, and even higher than the amount of 2016 and 2015 combined.

Over the years, along with many other global investors and managers, we have expressed our concern and questioned whether the quarterly results really bring value to investors. Our view is that quarterly reports risk shifting the focus of both management and shareholders from long-term vision to short-term vision and achieving quarterly goals.

We hope that all our stakeholders will understand that for a fast-growing company like Bittnet, quarterly reports can come with new information but, at the same time, they could actually bring more “noise” than “signal”.

The rest of the analyzes and presentations, starting with this report, will be built by analyzing as much as possible 12-month periods, trailing 12 months – on the principle of the moving average – to give a better measure of the direction in which the company is headed, but also of how it should be analyzed by shareholders.

Under this model, of analysing periods of at least 12 months, we can see that in the last 12 months we have already reached the proposed 2020 indicators. Thus, we enter the Q4 with the idea that, if we record only the same quarterly results as in 2019 (without any increase), we will end 2020 in line with the budget approved in the GMS in April. Yet, as in all previous years, “the match is played until the 90th minute”.

As always, we are at your disposal for questions, at investors@bittnet.ro. 

Mihai Logofătu,  
Founder & CEO Bittnet Group 

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