F-Secure Oyj · OMXHEX:FSECURE
F-Secure Oyj — Q1 2016 Earnings Presentation
25 slides from F-Secure Oyj's earnings presentation, 2016
Slide 1: High Demand for Corporate Security
HIGH DEMAND FOR CORPORATE SECURITY Interim Report Q1/2016 Christian Fredrikson, CEO 1
Slide 2: Agenda
AGENDA Highlights from Q1 Market review Business updates Outlook Financials 2
Slide 3: Highlights Q1
All figures for continuing operations, HIGHLIGHTS Q1 Investments in growth continued Total revenues increased by 5% to EUR 37.8 million; corporate security increased by 27% to EUR 14.6 million consumer security decreased by 5% to EUR 23.2 million Organic revenue growth was flat, but organic
Slide 4: Key Figures
KEY FIGURES Revenues and EBIT Deferred revenues Eur million Eur million 45 50,0 40 38,9 45,0 37,2 37,8 35,9 35,5 35 40,0 30 35,0 30,0 36,0 38,2 25 30,9 33,5 32,5 25,0 20 20,0 15 15,0 10 6,0 10,0 5,0 5,0 5 4,0 3,2 13,9 11,3 11,1 12,1 11,6 5,0 0 Q115 Q215 Q315 Q415 Q116 0,0 Q115 Q215 Q315 Q415 Q116 Re
Slide 5: Key Figures
Cash position reflects the KEY FIGURES repayment of foreign tax credits on withholding taxes from 2009- 2011 based on debit decisions by the Finnish tax authority Eur million Costs Eur million Net cash 40 120 35 3,0 100 4,3 35,2 30 2,5 2,8 3,2 7,4 80 6,8 25 7,4 6,2 6,5 20 60 110,2 15 94,3 93 40 76,3
Slide 6: Corporate Security Driving the Market
CORPORATE SECURITY DRIVING THE MARKET USD billion Average annual growth 120 8-15% 100 CORPORATE SECURITY SERVICES AND CONSULTATION 80 60 7% CORPORATE SECURITY 40 PRODUCTS 20 3% 0 CONSUMER SECURITY 2014 2015 2016 2017 2018 2019 6 Source: Gartner, March 2016
Slide 7: Advanced Attacks and the Need for Comprehensive Solutions Are Driving the Security Market
ADVANCED ATTACKS AND THE NEED FOR COMPREHENSIVE SOLUTIONS ARE DRIVING THE SECURITY MARKET Enterprises Mid-size Business Consumers 8
Slide 8: Corporate Security Increases Its Share of F-Secure Revenues
CORPORATE SECURITY INCREASES ITS SHARE OF F-SECURE REVENUES 25,0 24,4 24,3 23,3 23,6 23,5 23,3 23,6 23,2 20,0 14,6 14,6 15,0 13,7 12,2 11,1 11,0 11,6 10,9 10,0 5,0 0,0 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 Corporate Total Consumer Total Note: Some minor re-allocation of rev
Slide 9: Corporate Reseller Business
CORPORATE RESELLER BUSINESS HIGHLIGHTS FROM Q1 GOING FORWARD Revenues from the corporate Continued investment in sales reseller channel were the Investments now cover Europe more highest ever for the first broadly quarter First cyber security product introduced to the reseller channel: Revenue
Slide 10: F-Secure Radar Officially Part of the Corporate Offering
F-SECURE RADAR OFFICIALLY PART OF THE CORPORATE OFFERING THE PRODUCT THE PRODUCT WHAT DOES IT DO? FEATURES THE CHANNEL F-Secure Radar Allows companies to easily control and manage IT security risks. A sophisticated vulnerability scanning, management and reporting service Helps companies to ident
Slide 11: Cyber Security Services
CYBER SECURITY SERVICES HIGHLIGHTS FROM Q1 GOING FORWARD Revenues in strong double- Continued sales expansion and digit growth product development Significant new customers, some in new markets New solution to be launched for enterprises in Q2: Recruited tens of new cyber Rapid Detection Ser
Slide 12: Rapid Detection Service Launch in Q2
RAPID DETECTION SERVICE LAUNCH IN Q2 12
Slide 13: Operator Business
OPERATOR BUSINESS HIGHLIGHTS FROM Q1 GOING FORWARD Decline in operator revenue largely Broadening of offering to caused by currency fluctuations operators: and one client in Latin America Freedome and F-Secure Key increasingly part of the partner Revenue decline anticipated to be offering tempor
Slide 14: Direct Consumer Business
DIRECT CONSUMER BUSINESS HIGHLIGHTS FROM Q1 GOING FORWARD Revenue continues to grow and Partnerships with global device outpace market growth manufacturers: Now in execution phase; 2016 will show how pre-installations convert to Increasing contribution from Freedome customers Partnerships with
Slide 15: Outlook for 2016 Is Unchanged
OUTLOOK FOR 2016 IS UNCHANGED F-Secure anticipates its overall EBIT for continuing operations is security revenues to grow in 2016 estimated to be EUR 17-21 million compared to the year before (2015: EUR 20 million). (2015: EUR 148 million). 15
Slide 16: Financials Q1 / 2016
FINANCIALS Q1 / 2016
Slide 17: Interim report unaudited, prepared under IAS 34
This interim report is unaudited and prepared in accordance with IAS 34 standard Interim Financial Reporting and with accounting principles stated in the annual report 2015. As of the first quarter of 2015, the personal cloud business is reported as discontinued operations. Consequently, comparison
Slide 18: Revenues
REVENUES EURm 45 Q1 Revenues increased by 5% y-o-y Total quarterly revenues 37.8m 40 38,9 37,8 37,2 (Q115: 35.9m) 35,9 35,5 35 Organic revenues were flat year-on-year, 30 but organic order intake showed healthy growth. 25 20 15 10 6,0 5,0 5,0 5 4,0 3,2 0 Q115 Q215 Q315 Q415 Q116 Revenues EBIT (IFR
Slide 19: Revenue Split
REVENUE SPLIT EURm Revenues from corporate security 25,0 23,6 23,5 24,4 23,6 24,3 23,3 23,3 23,2 increased by 27% totaling EUR 14.6 million (11.6m) Corporate security represented 39 % 20,0 EURm (Q115: 32%) of F-Secure’s total revenues 14,6 14,6 15,0 Revenues from consumer security 13,7 decreased b
Slide 20: Profitability
PROFITABILITY EURm 7,0 18% Q1 Operating Profit 6,0 16% EBIT (IFRS) 3.2m, 8% of revenues (Q115: 5.0m, 6,0 14%) 14% 5,0 5,0 Earnings per share for continuing operations 5,0 EUR 0.01 (EUR 0.04) 12% 4,0 Earnings per share EUR 0.02 (EUR 0.11) 4,0 10% 3,2 3,0 8% 6% 2,0 4% 1,0 2% 0,0 0% Q115 Q215 Q31
Slide 21: Costs
COSTS EURm Q1 costs 40 Costs 33.9m (Q115: 30.7m), +10% y-o-y 35 The increase is mainly related to personnel 3,0 4,3 related expenses, external services and costs 30 2,5 2,8 3,2 incurred by the acquired nSense business 7,4 Depreciations from past capitalized expenses 25 7,4 6,2 6,8 6,5 decreased
Slide 22: Deferred Revenues
DEFERRED REVENUES Q1 Deferred revenues increased by 11% to 49.7m (44.9m) EURm 60,0 50,0 40,0 30,0 30,9 36,0 38,2 32,0 33,5 32,5 35,2 33,4 31,0 20,0 10,0 11,0 11,3 13,9 11,1 12,1 11,6 4,7 6,5 7,3 0,0 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Deferred revenue, non-current Deferred revenue, current
Slide 23: Solid Cash Position
SOLID CASH POSITION EURm Q1 Cash flow from operations -1.1m* (Q115: 4.6m) 120 Cash flow reflected the repayment of foreign tax credits on withholding taxes from 2009-2011 100 based on debit decisions by the Finnish tax 35,2 authority 80 Market value of liquid assets on 31 March 93.0m (31 Dec 201
Slide 24: Number of Personnel
NUMBER OF PERSONNEL Number of personnel 950 (Q415: 926; Q115: 841) at the end of the quarter 1000 900 137 135 144 147 800 133 700 279 303 273 279 600 274 500 400 300 493 490 500 510 200 434 100 0 Q115 Q215 Q315 Q415 Q116 Sales and Marketing Research and Development Administration 24
Slide 25: Regional Revenue
REGIONAL REVENUE EUR million 40,0 37,8 35,9 35,0 30,0 25,0 20,0 16,2 15,4 15,0 13,9 11,5 10,0 5,2 4,9 5,0 3,1 3,6 0,0 Nordic Rest of Europe North America Rest Total Q115 Q116 25