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CEO's Review

ToimitusjohtajaYear 2020 turned out to be an unprecedented year due to Covid-19. The pandemic reshaped the world and also forced the telecommunication industry to reposition itself in a changed market environment. While the slowdown of the global economy was evident, we at Tecnotree, persistently continued to serve our customers and enhance the product offering, leading to new record high profit levels and highest order book position in last five years and overall a strong financial position. The net profit margin was a record 25.7 % and the EBIT margin 35.3 %, being at a remarkably satisfactory level. This performance in 2020 helped Tecnotree establish a strong footing, as we start the new year 2021.

Revenue
Full year revenue was EUR 52.8 million, 12.4 % higher than last year. Middle-East and Africa region represented 74.6 % of the total revenue and witnessed 27.5 % growth from last year. Asia and Pacific region demonstrated very promising development and outlook by doubling the revenue from last year from EUR 1.2 million to EUR 2.4 million. Europe and Americas regions faced decline in revenue, mainly due to the implications of COVID-19, however their outlook for 2021 seems positive. It is worthwhile to note that the Company was able to demonstrate this growth despite the headwind caused by unfavorable EUR/USD exchange rate movement.

Profitability
Operating profit and net profit improved in all four quarters of 2020 compared to same quarters last year. The full year improvement in operating profit was EUR 4.3 million and in net profit EUR 5.9 million. The fourth quarter net profit was EUR 4.3 million being 54% higher than the same quarter last year. Earnings per share (EPS) was 0.02 euros in the fourth quarter and 0.05 euros for the full year 2020. 

Order intake
Value of new orders recorded during financial period amounted to EUR 59.5 million, providing a solid EUR 32.1 million year-end order book compared to EUR 25.5 million in end of last year. The full year order intake was 16% higher compared to previous year. During the fourth quarter, Tecnotree recorded an order intake of EUR 19.7 million. 

Financial situation
Net cash flow after investments in the fourth quarter was EUR 2.3 million positive and for the full year EUR 7.0 million positive. Cash and cash equivalents in the end of the year were EUR 8.0 million. Liquidity wise the company is well-positioned to meet its operating expense, investment and debt repayment requirements.

Other Business Updates
Tecnotree continues robust growth in its business across global markets by increasing the presence of our brand and taking advantage of the onset of 5G implementations and the digital transformation requirements of our customers. In 2020, Tecnotree released a range of new products and solutions, including a Fintech offering, Tecnotree Surge platform for Dual speed transformation and a 5G convergent charging platform, BSS Edge. We also acquired new customers for our product suites in all geographies including Latin America (Altice), Middle East (STC) and APAC (TRAI).

In 2021, we hope to synergize new partnerships with Digital Service Providers, eco-system players and internet of things (IOT) providers, to introduce new revenue models and API frameworks to take advantage of the 5G roll-outs world-wide and forge new frontiers to empower digitally connected communities in the sectors of Education, Health, E-commerce, Gaming, Sports and Entertainment.

Padma Ravichander,  Chief Executive Officer