Classification of NuWays AG to Bittium Oyj

Company Name:	Bittium Oyj
ISIN:	FI0009007264
Reason for the research:	Update
Recommendation:	BUY
Target price:	EUR 40
Target price on sight of:	12 months
Last rating change:
Analyst:	Julius Neittamo

Bittium's tech edge widens while competitors falter

The Bundeswehr's D-LBO debacle continues. A leaked confidential report paints a damning picture of the Bundeswehr's flagship program to modernise radio communications. First reported by Der Spiegel and Welt am Sonntag, the classified report reveals that a second operational test of the system was aborted in late 2025 due to severe deficiencies; (i) the radios posed a 'danger to life and limb' during regular exercises, (ii) simple voice communications were found to be unreliable, (iii) soldiers could not reliably track the position of friendly units, and (iv) the system's radio range fell short of minimum transmission distance requirements. The verdict: the systems “cannot be recommended for use by the troops in its current state of development”.

Rohde & Schwarz, one of D-LBO's key partners, is in the eye of the storm. We had already flagged Rohde & Schwarz’s cumbersome integration of tactical comms as a reason to discount their UK tender prospects. Noteworthy, the D-LBO contract for tactical communications was never put out to tender (in the name of fighting bureaucracy); rather, Rohde & Schwarz was awarded the contract directly. Drawing on the Indra precedent, we would not rule out a similar technology transfer arrangement between Rohde & Schwarz and Bittium, one that could meaningfully accelerate the D-LBO integration while allowing Germany to retain sovereignty over military communications tech.

Meanwhile, Bittium's already mature systems are making leaps forwards. In two notable press releases this month, the company announced (i) a collaboration with Sensofusion to ensure interoperability between Bittium's tactical radios and anti-drone jamming systems, and (ii) the launch of FUSOR, a next-generation software router enabling flexible and cost-efficient expansion of defense networks.

The partnership with Sensofusion, a manufacturer of advanced anti-drone systems, is particularly notable. Anti-drone systems create dense jamming environments that typically degrade or jam own radio communications. Joint testing has confirmed that Bittium's radios and backbone networks can operate alongside Sensofusion's systems without performance degradation. This is a critical capability, as both anti-drone systems and robust tactical communications are a must-have on the modern battlefield.

With FUSOR, the battlefield just got more connected. FUSOR (Flexible Unifying Software Router) enables Bittium's tactical battlefield networks to connect seamlessly with broader infrastructure (e.g. fixed networks or 5G), allowing forces to operate across a single, unified network regardless of the underlying technology. Being software-based, it is easy to deploy and scale. FUSOR is a further illustration of what we’ve previously flagged: the software layer keeps growing, and we see this as a structural tailwind for operating margins, with long-term EBIT margins seen at 24% (eNuW).

We remain firmly convinced of the Bittium story. At the last earnings call, it was highlighted that Bittium is currently in discussions with more than ten militaries regarding tactical communications renewals. With the potential for further tender wins and thanks to compressed sales cycles due to the war in Ukraine, we see a reasonable possibility for a top-line beat. We also see M&A as increasingly plausible given the strong balance sheet. Logical targets could include tactical headset manufacturers, a natural adjacency to Bittium's existing portfolio, or drone systems, where resilient communications are a battlefield necessity (eNuW). We reiterate our BUY rating on continued momentum, with our DCF-based PT of € 40 unchanged.

You can download the research here: bittium-oyj-2026-03-31-update-en-ca35a
For additional information visit our website: https://www.nuways-ag.com/research-feed

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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