{"id":1762,"date":"2017-03-24T08:27:54","date_gmt":"2017-03-24T08:27:54","guid":{"rendered":"https:\/\/investors.bittnet.ro\/?page_id=1762&#038;lang=ro"},"modified":"2019-06-19T10:21:07","modified_gmt":"2019-06-19T07:21:07","slug":"forecasts-policy","status":"publish","type":"page","link":"https:\/\/investors.bittnet.ro\/en\/forecasts-policy\/","title":{"rendered":"Forecasts Policy"},"content":{"rendered":"<section class=\"l-section wpb_row height_small\"><div class=\"l-section-h i-cf\"><div class=\"g-cols vc_row via_flex valign_top type_default stacking_default\"><div class=\"vc_col-sm-4 wpb_column vc_column_container\"><div class=\"vc_column-inner\"><div class=\"wpb_wrapper\"><div class=\"wpb_widgetised_column wpb_content_element\"><div class=\"wpb_wrapper\"><\/div><\/div><\/div><\/div><\/div><div class=\"vc_col-sm-8 wpb_column vc_column_container\"><div class=\"vc_column-inner\"><div class=\"wpb_wrapper\"><div class=\"wpb_text_column\"><div class=\"wpb_wrapper\"><h1>Forecasts Policy<\/h1>\n<p><span style=\"font-weight: 400;\">Every year the company submits to the shareholder\u2019s approval a revenue and expense budget. The Management designs\u00a0this &#8220;BVC&#8221; (Buget Venituri &amp; Cheltuieli) using an \u2018bottom-up\u2019 approach &#8211; beginning with the evaluation of the ongoing projects (of the available sales pipeline at the time of the production of the BVC), of the sales statistics of the previous years, of the marketing and sales already engaged \/ planned actions, and of the sales targets assumed by each member of the sales team. In other words, the BVC is realized in a prudent way.<\/span><\/p>\n<p>On the other hand, what we follow and measure in the relationship with the sales team and with any other partner is the commercial GROSS MARGIN and not the sales amount. This way, in every year, at the publishing of the BVC, the management has to answer to the \u201cIf we have a reasonable thrust that we will generate 100 RON gross margin, of how many RON we will obtain this margin?\u201d question. It must be taken into consideration that the sales organization\u00a0is\u00a0measured and appreciated EXCLUSIVELY by the generated gross margin volume. In other words, 100 Euro of gross margin generated by selling a 200 Euro course is as valuable to the company and is, therefore, rewarded the same like a\u00a0100 euro of gross margin from a\u00a0sale of 500 euro in \u00a0communication solutions.<\/p>\n<p>In order to answer to the question \u201cHow much do we have to sell in order\u00a0to produce the 100 RON gross margin?\u201d question, we must therefore intermediately answer to the \u201cwhich will be the average percentage of gross margin registered by the company?\u201d question. According to the prudence principle, the management applies small percentage decreases to the already registered gross margin, in order to find out the answer to this question.<\/p>\n<p>The counterintuitive\u00a0result of these cautious estimations is that, if we apply a smaller margin percentage, then we actually assume that we will have to \u2018work\u2019 more for the same RON gross margin, so the forecasts (the BVC) related to the company\u2019s revenues are HIGHER.<br \/>\n<span style=\"font-weight: 400;\">Although, the company follows only the gross margin, not the volume of sales, that is why during the budget exercise is more likely that the revenue forecasts (turnover) to be wrong, and the profitability ones to be more accurate. In other words, the management does not aim, does not follow, and does not reward the achievement of any revenue targets and, in consequence, the investors should not follow and evaluate the company\u2019s aim of the revenue indicators (turnover), but of the profitability indicators. <\/span><\/p>\n<p>We are a small but fast developing company. We work with projects, not with recurring sales. This means that sales and profitability results can vary from month to month. Our activity is somehow cyclical and concentrated in the 4th quarter.\u00a0We believe it is more important to produce a fair estimation of the profitability, and then follow that target instead of constantly\u00a0trying to revise estimates\u00a0regarding our ability to obtain the results. &#8220;The game is won by those who pay attention to the field not the scoreboard&#8221;.<\/p>\n<p>Therefore, we intend not to publish quarterly estimates or prognosis, or any other document besides the yearly Revenue and Expenditure Budget.<\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/section>\n","protected":false},"excerpt":{"rendered":"Forecasts Policy Every year the company submits to the shareholder\u2019s approval a revenue and expense budget. The Management designs\u00a0this &#8220;BVC&#8221; (Buget Venituri &amp; Cheltuieli) using an \u2018bottom-up\u2019 approach &#8211; beginning with the evaluation of the ongoing projects (of the available sales pipeline at the time of the production of the BVC), of the sales statistics...","protected":false},"author":5,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-1762","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Forecasts Policy - Bittnet Group - BNET Investor Relations<\/title>\n<meta name=\"description\" content=\"Forecasts Policy - Bittnet Group - BNET Investor Relations\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/investors.bittnet.ro\/en\/forecasts-policy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Forecasts Policy - Bittnet Group - BNET Investor Relations\" \/>\n<meta property=\"og:description\" content=\"Forecasts Policy - Bittnet Group - BNET Investor Relations\" \/>\n<meta property=\"og:url\" content=\"https:\/\/investors.bittnet.ro\/en\/forecasts-policy\/\" \/>\n<meta property=\"og:site_name\" content=\"Bittnet Investors Relations Site\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/BittnetSystems\/\" \/>\n<meta property=\"article:modified_time\" content=\"2019-06-19T07:21:07+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@NA\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/investors.bittnet.ro\/en\/forecasts-policy\/\",\"url\":\"https:\/\/investors.bittnet.ro\/en\/forecasts-policy\/\",\"name\":\"Forecasts Policy - Bittnet Group - BNET Investor Relations\",\"isPartOf\":{\"@id\":\"https:\/\/investors.bittnet.ro\/en\/#website\"},\"datePublished\":\"2017-03-24T08:27:54+00:00\",\"dateModified\":\"2019-06-19T07:21:07+00:00\",\"description\":\"Forecasts Policy - Bittnet Group - BNET Investor Relations\",\"breadcrumb\":{\"@id\":\"https:\/\/investors.bittnet.ro\/en\/forecasts-policy\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/investors.bittnet.ro\/en\/forecasts-policy\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/investors.bittnet.ro\/en\/forecasts-policy\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/investors.bittnet.ro\/en\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Forecasts Policy\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/investors.bittnet.ro\/en\/#website\",\"url\":\"https:\/\/investors.bittnet.ro\/en\/\",\"name\":\"Bittnet Investors Relations Site\",\"description\":\"Your Value. 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