Morning, everyone. Welcome to Bittium Corporation Financial Statement 2022 Review Meeting. My name is Hannu Huttunen. I'm the Bittium CEO. With me here today, I have Mr. Pekka Kunnari, the CFO. Okay. Agenda for today's discussion is as shown here. First, I'll go through the main highlights of the businesses from the last year. Pekka will go through the numbers in the more detailed level. Then we'll get back to outlook for this ongoing year. Okay. If we start from the tactical communications business area of Bittium. Naturally, the market for this business was changing quite a lot during the last year.
The unfortunate Russian's invasion to Ukraine changed the thinking of how to defense budgets are thought in the many Western countries. Of course, that will have an impact to our market as well in the long run. First increases of these defense budgets typically has gone to the equipments and the, for example, ammunition that's in use already in these countries. Then in the second wave, we expect this kind of investments to new capabilities like a modern tactical communication networks enabling more efficient situational awareness and battle management systems.
That we have seen in our operations in such a way that we have got a lot of request for information during the, let's say, mainly autumn of last year. Clearly we see that these kind of a projects to improve the capabilities of the armed forces in the different countries are starting. Also important for us, especially for this business area, is that Finland decided to apply the NATO membership during the last year. If and when that will happen, that will open us as a Finnish company. Also access to, for example, NATO cryptos and NATO finance research programs, et cetera.
We believe that that will have a clearly positive impact to our competitiveness to sell our solutions and products, namely to the NATO countries and to the NATO market. If you look the challenges that we faced in our defense business during the last year, clearly it is a difficult situation or discontinuity in the component market, namely semiconductor market. Had an impact to our capabilities to manufacture and deliver our products during the last year. That situation still remains challenging, although we think that it will start to normalize or ease towards the end of this ongoing year.
In the product offering side, we brought to the market this most modern tactical voice or IP field phone based on our Comnode solution, thus expanding or modernizing our product offering in that side of the business. We continued our long run very good cooperation with the Finnish Defence Forces. Important area for us for the future is of course this new products, this Tough SDR radios and related software. The trials and field usage of those products continued during the last year. We also received an order for the next lot of the trialing devices and also an order to the narrowband waveform development. That will take several years from now.
And in a way, we think that that shows a strong commitment that Finnish Defence Forces has to our brand-new Tough SDR radios. In the core network side, the business continued pretty much as it has been already quite a few years. We got an order and orders and delivered the radios to the customer and also got orders to the next versions of the waveforms and the software capabilities. The software radio-based system capability was constantly improved and developed through those orders. Very pretty good year with our long-run cooperation with the Finnish Defence Forces. Outside of Finland, we continued our deliveries to our current two most important markets, Austria and Estonia.
Cooperation with those customers continued well. We also, as said, started several new trials and got several new requests for information from the many countries to our new Tough SDR radios and thus we're generating the sales funnel for the coming years quite nicely. In the international cooperation area, this ESSOR cooperation, which is the common European waveform development, the important milestone was received, and this next phase of the ESSOR software or waveform was accepted. We are well-positioned in this ESSOR community. We have typically been the even the first company to implement and integrate these waveforms to our products.
We strongly believe that ESSOR will have remarkable role in the future among the Western countries' armed forces providing the interoperability in the tactical communications as well as we believe that ESSOR will have important role in the NATO waveform family in the future. The secure communication side of the business, meaning the secure and reliable communications happening over the commercial mobile network. How can you be sure that your data is secure even though you are using like normal operators, mobile operators' networks? First, if we take a look about the market, also in that market we saw growing interest towards this kind of high security solutions that we are providing.
There were several examples last year that data was leaked and there were different kind of malware found from the devices and valuable data was lost or stolen from those. We have seen the growing interest from the many countries to such a high secure systems that we are providing. We started several new like small implementations in many countries. We delivered some tens of phones and then the first server implementation of the secure software, et cetera. We expect that those implementations will continue to grow to the bigger scale, like production use during this year.
These trial phases took a bit longer time in many countries that we originally thought. We didn't exactly all re-reach the total volume target that we had for the phone sales in the last year, but believe that we have a good opportunity to grow that sales during this year. We had a good opening in Sweden, we delivered quite the good volumes of our phones to Swedish authorities. In the new product introduction site, we introduced to the market this tactical pack around our Bittium Tough Mobile 2 device, meaning that the device is on the other hand integrated to the tactical radios.
In the areas or environment where commercial or normal mobile networks are not available, the data transfer will happen over the tactical networks and tactical radios. On the other hand, the integration of the situational awareness and battle management systems to the device, so that the user or soldier can get full access to the data and features of these systems. We also started to apply the NATO approval for our solutions during the last year and expect that we will get that approval during this year or even, let's hope, during the first half of the year. The medical technology side of the business.
If we first take a look about the market, we see that this kind of remote diagnostics need for such solutions is constantly growing in the medical technology side. There was like a step development happening during the pandemic times when, for example, heart diagnostics was more and more happening in the homes instead of in the hospitals. That trend seems to continue, we see a good demand in there. Our target, one of our strategic targets has been to increase our sales in the cardiac area, namely in Europe. That was proceeding.
We were able to grow in our sales in our Europe. We were able to get the new partners into new countries and thus continue to develop the market access and the distribution network. The challenge is that the market is really scattered in the Europe. There are a lot of small clinics, hospitals, service providers that you need to reach to get the volumes up in the Europe, which is not the case, for example, in the U.S. where you have a few big companies providing the big majority of such studies and diagnosis in the whole U.S. Area.
Anyway, the main volume that we delivered last year in the cardiac area went to the Preventice, our most important customer in the... Preventice as we know is nowadays part of the Boston Scientific group. We finally got the European Medical Device MDR approval to our new Respiro solution. This remote sleep apnea diagnosis solution in the very late last year. This changing regulation in Europe for the medical device approval has caused this certificate houses to be overloaded and processes of getting the certificates has been quite slow. It took a bit longer time that we originally planned to get the approval for also for our Respiro solution.
We got it in the late last year, but it was too late to really to get any sales during the last year. Now we are in a good position to start the open the market and sell the devices. The initial feedback from the trials that we have had in the many countries has been really positive. Product seems to be good and competitive. Again, as we have done there in the cardiac side, very modern wireless technology used in this diagnosis area also. We also started the process to get the FDA approval, so approval for the U.S. market for the sleep apnea solution.
It's still ongoing, but we believe that we will get that during the first half of the year and thus be able to start the sales and marketing also in the U.S. Also in this business area, or even namely in this business area, we suffered quite a lot about this component market challenges during the last year. We were not able to get all the components that we would have needed to fulfill all the needs in the market and enable us to grow. Actually, our sales went down in somewhat compared to last year because of this component access problems. That situation still continues. We still have challenges with some components in there.
Our material team has been working hard to get the situation improved, and we believe that it will start to ease during this year and it will get better and enable us to start to produce and grow our sales also. In the new product side, we launched the Bittium Faros 180L device, which means that this device is capable for full recording of your heart electronic activity during two weeks. For example, arrhythmias that happen very rarely, it's an excellent device to identify these health issues.
Although they are rare, they can be really severe of the, what they can cause to people and thus be able to identify even those by providing very long monitoring time with the single device. We also introduced the clinical advisory board for our medical business area. We were happy to get the very talented doctors from the different countries to help us to develop our products and solutions even better and further and of course also help us to market our products in the different markets. Right. The R&D services market.
Also in that market, as in the Defence market, we were able to go back to normal what comes to sales and customer work. Now from a long time during the last year, we were able to travel and meet the customers, and customers were able to travel here and see our competencies and talented engineers and thus start to do business as normal. We also see in this market area, market opportunity for us, as quite interesting in that sense that we start to see the true implementation of 5G technology happening.
So far, 5G mainly has meant it to for the normal consumers that you have again a bit faster data connection in your smartphone. Which is of course nice, but it's not the thing that will change the world. The true 5G promise where it lies is that the everything will be connected around us. That means that everything will be digitalized and everything will be automatized around us. That will change the world. To be able to do that, you need to have these radios integrated to everything. That we are seeing in the market nowadays that we have more and more customers that have a nice solutions, products that they need.
They have a need to integrate this wireless connectivity and we have a long history and excellent competencies of providing such a technology and solutions to those customers. Several new customers were acquired during the last year. Of course, some old projects were ending, which is normal in this kind of service business that we do. We believe that we have a good opportunity to grow our international customer base in this business area also in the future. In the offering side, we were able to have a technology from our other business areas that will speed up and help customers to provide this kind of IoT connectivity integration to whatever devices or systems.
We have like a ready platform that we can use to speed up the projects and do it more, in a more cost-efficient manner and help our competitiveness with those service cases. In the challenges side, the competition of the talent has been tough during the last couple of years, and it seems that market continues to be in such a way. Of course, If we want, if and when we want to grow this business, it means that we have to get more this kind of very capable best engineers that we have in the Bittium. Competition of the talent is tough.
We have been doing quite a lot of work to improve our attractiveness in the employee market during the last year, and also seeing some results. I guess that they, there are quite a few talented engineers out there nowadays who think that Bittium would maybe be the nice place to work in the future. Okay, thanks. I will now hand over to Pekka.
Thank you, Hannu. Hello also behalf of me. Let's look to numbers, as Hannu explained the business news from the last year. Now we look same bit through the numbers. First, we would look the net sales by quarters. The last quarter was strong, as it was also 2021. Especially in the product side, we had good quarter in that sense. Total net sales for last quarter was roughly EUR 28 million. Anyhow, the quarter was strong, but the total net sales decreased by roughly 8%. That happened in product-based net sales, which declined from EUR 23 million to roughly EUR 21 million.
Actually, as Hannu explained, the main reason there was the shortage of components in medical business side. As we see here, the medical technologies net sales decreased. It was roughly EUR 5 million, as it was roughly EUR 7 million in comparable period. The product sales in defense and security business remained quite substantially at the same level as 2021. The service-based net sales were also EUR 6.7 million, and it declined a bit, but that happened in Connectivity Solutions R&D business. At the same time, the defense and security business, the service business a bit increased. Let's look the net sales for all the year 2022.
The total net sales was roughly EUR 83 million. It declined by 5%, and there is the same reason as said about what happened in the last quarter. This medical technology products declined and was roughly EUR 23 million, as it was roughly EUR 28 million in 2021. Defence and security again remained substantially at the same level as 2021. The service-based net sales increased. It was roughly EUR 25 million as it was roughly EUR 24 million in comparable period. The share of product-based net sales was roughly 70% of total net sales, and service-based was roughly 25%, or roughly EUR 30 million, 30% of total net sales.
This operating result development, if we look first in this left side, there is by quarters. As I said, last quarter, last year was strong, and also the operating result was good, EUR 3 million positive and roughly 11% of net sales, total net sales. Here we can see the same development or situation where 2021. This right side, operating result for all year, that was roughly a bit more, actually it was EUR 0.3 million. That was less than 2021, and also that was less than we planned to have. In that sense, it was bit disappointed of that year, the last year.
What impacted to low profitability was, of course, the declined net sales as explained earlier. Also we invested more or increased the activities of sales and marketing activities in medical business, and also increased the development activities for new products in medical side as well. Those were the major issues which impacted the lower profitability in 2022. Our R&D investments, the total amount or investment was roughly EUR 22 million. It increased from 2021 when it was roughly EUR 20 million, and that increase happened mainly in medical business side. The share of total R&D investments was roughly 27% of net sales and it also increased compared to 2021.
Of that total EUR 22 million we capitalized to the balance sheet, EUR 6.6 million. It was bit less than what we did at 2021. At same time, we depreciated earlier capitalized development expenses by EUR 5.9 million. Net increase in balance sheet in capitalized assets was EUR 0.7 million. Total impact in profit and loss statement was roughly EUR 22 million. It was bit higher than what was 2021. We invested to new products in medical side, ECG measurements, measurement tools and monitoring devices.
Also in this Respiro sleep apnea device as Hannu explained it, that was developed, and also this Bittium MedicalSuite platform was one target what we developed during 2022. The cash flow operating activities produced EUR 8 million cash flow. There is, there happened with net working capital that it increased by EUR 2.9 million. Main reason the increased net working capital was our inventory. Our inventory increased roughly by EUR 5 million. The reason for that was this shortage of components. We intentionally increased our inventory to keep our capability to manufacture and deliver products.
That was secure in that process side and also at the same time, we prepared to deliver the products during this year. Investing activities was minus EUR 8 million. It include capitalized assets by EUR 6.6 million and financing activities was minus EUR 3 million, and it include dividend payment, EUR 1.4 million, which was paid in April last year. Total cash flow was minus EUR 3 million, but we expect that it will be positive during this year. The asset and liabilities. The total amount of assets and liabilities is roughly EUR 170 million. If we look first at the asset side, we see that there are roughly 50/50.
There is, divided by non-current and current assets. Non-current assets, EUR 85 million, roughly 60% of that is capitalized development costs. That was, EUR 49 million in the end of last year. In current asset side, roughly, again, roughly EUR 85 million in total. It includes inventory, EUR 24 million, and as I said earlier, it increased roughly by EUR 5 million compared to 2021. Trade and other receivables total was EUR 41 million and accounts receivables, part of that was roughly EUR 37 million. We had a lot of deliveries in December and those invoices were sitting in accounts receivables at the end of year.
The total cash was EUR 19 million. Another side of assets and liabilities is this equity and liabilities, still equity ratio strong, roughly 70%. Total liabilities, EUR 54 million of which our interest bearing debt is about EUR 22 million, net gearing ratio is still low, so 3%. All in all, our balance sheet is strong position and is good to continue to this year with this balance sheet. Okay, that was brief summary of our numbers and next Hannu will tell about our outlook for the current year. Thank you very much.
Okay. Thanks, Pekka. Few words about the outlook for this ongoing year. Clearly our business as discussed in this presentation has been impacted by this global situation or challenges in the component market. Anyway, as also discussed in this presentation, we see that the market demand for our products and solutions will be positive in the coming years. Naturally, namely this defense area, this tactical communications area is as such that the sales processes typically take quite a long time. Although we are seeing good demand at the moment and our sales funnel is developing well, it will take some time before these projects are in the volume delivery phase.
Roughly 70% of our business during the last couple of years has been coming from the product business. As said, there are still remarkable uncertainties in the component availability also for this started year 2023. That of course generates some uncertainty to our outlook for the year also. The best understanding about the outlook for this started year for us is as such that we believe that our sales will grow from the last year and our operating result will be better than we had in the last year. Developing to the right direction. Also, it looks that our total cash flow will be positive from this started year 2023.
We have already quite some time had these long-run strategic targets that our sales should grow over 10% annually and we should reach at least 10% operating profit level. As we said in the late last year, believe that we have a good opportunity to achieve these targets in 2024. Next year should be a year that we have a good opportunity to get to that targeted level. All in all, improved or better year this year than the last year and next year we believe that we have a good chance to reach to those strategic or long-term financial targets. Thank you. I guess that we have time for questions if we have any.
No.
No? Okay. Thank you.