If we were to describe 2021 in one sentence, we can certainly say that this year was a year of contrasts. On the one hand, for the entire (local but also global) business environment, 2021 was a year of hope – to overcome the health crisis, to stop / overcome its effects and, why not, to start a new normality – respectively increasing the stability and business predictability.
On the other hand, this hope was doubled by a much more “indecisive”, more unpredictable reality, in which successive pandemic waves, local political instability but also much deeper effects of the global crisis continued to show their presence.
In this context of low predictability, the technology division of the Bittnet group managed to capitalize on certain trends in order to obtain both a significant increase in the gross margin generated: from RON 13.7 to 17.3 million but also a significant increase in operating profits generated (an 167% increase), in the conditions of a marginal increase of the turnover.
|
31.Dec.21 |
31.Dec.20 |
||
| Revenues |
98,434,367 |
96,397,656 |
2.1% |
| Service providing |
24,477,417 |
19,270,712 |
27% |
| Sale of goods |
73,956,950 |
77,126,944 |
-4.1% |
| Cost of sales | 81,128,573 |
82,701,173 |
-1.9% |
| Goods/materials |
63,705,398 |
68,303,617 |
-6.7% |
| Cloud services |
5,491,123 |
5,178,219 |
6.0% |
| Hours/worker |
11,932,052 |
9,219,337 |
29.4% |
| Gross margin |
17,305,794 |
13,696,483 |
26.4% |
| Other revenues |
2,824,219 |
148.284 |
1804.6% |
| Sales/distribution expenses |
5,624,408 |
5,203,157 |
8.1% |
| Hours/worker |
4,878,758 |
4,636,923 |
5.2% |
| Advertisement |
745.650 |
566.234 |
31.7% |
| Administrative expenses |
6,836,056 |
5,773,911 |
18.4% |
| Hours/worker |
3,259,951 |
3,332,564 |
-2.2% |
| Amortization |
1,073,068 |
1,436,348 |
-25.3% |
| Other third party services |
1,200,910 |
551.355 |
117.8% |
| Other expenditures |
403,299 |
200,409 |
101.2% |
| EBIT |
7,669,549 |
2,867,698 |
167.4% |
A major advantage of the way the technology division is structured is the coverage of a wide range of IT products and services, with a high degree of resilience to prolonged crises. In this sense, the fact that we include in the technology division both the implementation of platforms and hardware products, strongly affected by the semiconductor crisis (details below), but also significant components of high value-added services, such as audit services and infrastructure consulting Complex IT or services in the area of business applications and artificial intelligence, has led to greater stability of the entire business model.
We can note the following trends that created in 2021 and will create in 2022 a significant impact on the activity of the technology division:
We can even say that at the moment, global technology companies, such as hardware manufacturers in particular, are facing significant difficulties in meeting this demand. In the short term, pressure is created on the entire chain – from component production to delivery / implementation / system operation, but in the long run this demand will be met by companies that will have the right combination of expertise and specialized resources for both “on-premise” projects and for “cloud” or hybrid architectures). This trend can be seen in the very large volume of projects generated in 2021 by companies in the technology division, projects that for reasons of supply / resources were moved (backlog) in 2022.
Although in the first quarter and even the first 6 months of 2021 there were moments of return of supply flows with components (processors / chips), since May 2021 this trend has entered a downward spiral (more information: https://www.bloomberg.com/news/articles/2021-05-18/wait-for-chip-deliveries-increased-in-sign-shortage-persists and here: https://www.bloomberg.com/news/articles/2021-08-23/chip-shortage-set-to-worsen-as-covid-rampages-through-malaysia). When can we consider this situation was overcome? Certainly in the near future: https://www.bloomberg.com/graphics/2021-chip-production-why-hard-to-make-semiconductors/.
The global pandemic has introduced a relaxation of the way companies contract and interact with employees and collaborators. More and more global projects are being delivered with relocated resources, the geographical location currently has only a purely fiscal significance. As a result, Romanian IT companies, including companies in the group’s technology division, face extremely aggressive global competition in a market where highly skilled labour is scarce and increasingly mobile.
Has led to a significant increase in the demand for expertise in the Cybersecurity space. Given that Dendrio offers a wide range of solutions and services in the area of cybersecurity, but also the fact that since August 2021 the technology division has begun to include other companies with exceptional cyber expertise, such as: IT Prepared, Global Resolution Experts (GRX), or iSec Associates (iSec) – we can consider that at this moment the technology division and the Bittnet group are in an extremely favourable position for the next period.
From the point of view of the structure of the technology division, with the entry into the group, in the second half of 2021, of the new companies (IT Prepared, Nenos, Nonlinear, iSec and GRX) a structuring of the activities on two distinct technology segments occurs:
- Dendrio Solutions – specialising in (on premise and/or cloud) hybrid IT system design and implementation;
- IT Prepared – a company specialized in optimizing and operating IT infrastructures (recurring, subscription-based services, managed services);
- GRX and iSec – companies specialising in audit and consulting projects in the field of cybersecurity.
- Elian Solutions – company specialized in implementing Enterprise Resource Planning (ERP – Microsoft Business Central) solutions and data analysis and visualization systems (Microsoft Power BI)
- Nenos and Nonlinear – companies specialising in developing Artificial Intelligence-based platforms.