F-Secure Oyj · OMXHEX:FSECURE
F-Secure Oyj — Investor Day (August 2021)
27 slides from F-Secure Oyj's investor day presentation, Aug 31, 2021
Slide 1: Capital Markets Day
CAPITAL MARKETS DAY 31 August 2021
Slide 2: Outcome-based security through the fusion of technology, human expertise and partnership
Outcome-based security through the fusion of technology, human expertise and partnership Juhani Hintikka CEO & President 2
Slide 3: After successful transformation F-Secure has two strong businesses and is growing profitably
AFTER SUCCESSFUL TRANSFORMATION F-SECURE HAS TWO STRONG BUSINESSES AND IS GROWING PROFITABLY 2015-2020 growth driven by corporate security Profitability improving after investment cycle Corporate security revenue 228 Adjusted EBITDA 217 220 Consumer security revenue Adjusted EBITDA-% 18% 191 16% 16%
Slide 4: The fast-changing digitalized world creates new opportunities
THE FAST-CHANGING DIGITALIZED WORLD CREATES NEW OPPORTUNITIES DATA-DRIVEN ALGORITHMIC WORLD CLOUD IS MAINSTREAM 50% Of top management list data analytics or artificial intelligence 85% Cloud services account for 85% of all enterprise web as key priority in game-changing technologies 1 traffic 2 DIST
Slide 5: F-Secure serves three growing markets
69 F-SECURE SERVES 22 Corporate Security Products +15% CAGR THREE GROWING 41 MARKETS 11 Cyber Security Consulting 39 +10% CAGR 24 Consumer Security 7 8 (EUR billion) +4% CAGR 2020 2025 Source: 5 Management estimation based on various sources
Slide 6: Moonshot goals
MOONSHOT GOALS NO ONE SHOULD EXPERIENCE A SERIOUS LOSS THE MOST LOVED FROM A CYBER ATTACK PLACE OF WORK IN CYBER SECURITY GOOD PARTNERSHIP THE MOST DESIRED SECURITY-AS-A- PARTNER IN CYBER SERVICE COMPANY SECURITY 6
Slide 7: How will we win?
HOW WILL WE WIN? Two distinctive Combining Monetizing through brands for b2c and technology and real- software and b2b to pursue world expertise solutions growth One data-powered Expanding into Flexible subscriptions platform countering chosen verticals and to monetize active attacks ecosystems rela
Slide 8: Monetizing through software and solutions – two businesses and three playbooks
MONETIZING THROUGH SOFTWARE AND SOLUTIONS – TWO BUSINESSES AND THREE PLAYBOOKS NEW DISTINCTIVE BRAND FOR CORPORATE SECURITY SOFTWARE TO CONSUMERS SOFTWARE TO MIDMARKET SOLUTIONS TO ENTERPRISES MAINLY VIA CHANNEL BUSINESSES VIA CHANNEL DIRECTLY INNOVATIONS | THREAT INSIGHTS | RESEARCH | AI | MACHINE
Slide 9: Combining technology and real-world expertise
COMBINING TECHNOLOGY AND REAL-WORLD EXPERTISE Leading technology proven by third party assessments Hands-on experience from the latest threats lead and continuous innovations innovation FIGHTING CYBER ATTACKS IN THE FRONT LINE Recognized as Gartner Peer Insights Most Best Protection AV-TEST Customer
Slide 10: Transformed leadership team to deliver the wins
TRANSFORMED LEADERSHIP TEAM TO DELIVER THE WINS – STARTING SEPTEMBER 1ST Juhani Hintikka Tom Jansson Christine Juha Kivikoski Tim Orchard Edward Parsons Timo Laaksonen President and CEO CFO Bejerasco EVP, Business EVP, Managed EVP, Cyber Security EVP, Consumer CTO Security Detection and Consulting S
Slide 11: Corporate Security - monetizing through software and solutions
Corporate Security - monetizing through software and solutions Juhani Hintikka CEO & president 11
Slide 12: Two customer segments with slightly different needs
TWO CUSTOMER SEGMENTS WITH SLIGHTLY DIFFERENT NEEDS Mid-market Enterprise Serviced mostly by providers like MSPs, MSSPs and VARs Ensuring compliance with industry standards and regulations Need to complement very limited internal cyber security capabilities Increasing complexity forces to augment in
Slide 13: We follow the customer and sell according to the need
WE FOLLOW THE CUSTOMER AND SELL ACCORDING TO THE NEED SOFTWARE SOLUTIONS BUSINESS SECURITY PRODUCTS MANAGED BUSINESS SECURITY DETECTION PRODUCTS & RESPONSE CONSULTING DIRECT SALES CHANNEL SALES ENTERPRISES MID-MARKET Reported as: Corporate Security Products Cyber Security Consulting 13
Slide 14: Our portfolio
OUR PORTFOLIO ELEMENTS ENDPOINT CLOUD MANAGED ENDPOINT DETECTION COLLABORATION VULNERABILITY PROTECTION DETECTION CYBER SECURITY PROTECTION AND RESPONSE PROTECTION MANAGEMENT FOR SALESFORCE AND RESPONSE CONSULTING SERVITIZE PRODUCTIZE ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING BLACKFIN RESEARCH AN
Slide 15: Flexible subscriptions to monetize relationships over time
FLEXIBLE SUBSCRIPTIONS TO MONETIZE RELATIONSHIPS OVER TIME We combine commercial models and create business Results in increasing number of corporate customers opportunities for our partners purchasing several F-Secure solutions1 Share-% with more than 2 solutions (End Customers with 50+ seats) 14%
Slide 16: Expanding into chosen verticals and ecosystems
EXPANDING INTO CHOSEN VERTICALS AND ECOSYSTEMS Solutions to chosen enterprise verticals Latest software products to external ecosystems FINANCIAL SERVICES CLOUD PROTECTION TECHNOLOGY FOR SALESFORCE COMMUNICATIONS COLLABORATION MANUFACTURING PROTECTION 16
Slide 17: SaaS company metrics in focus – annual recurring revenue growth picking up
SAAS COMPANY METRICS IN FOCUS– ANNUAL RECURRING REVENUE GROWTH PICKING UP (Corporate Security Products, Annual Recurring Revenue1, EUR million) +7% 80 77 76 75 75 74 Q1/2020 Q2/2020 Q3/2020 Q4/2020 Q1/2021 Q2/2021 17 1Management accounts at the end of June 2021
Slide 18: Which is driven by strong orderbook development
… WHICH IS DRIVEN BY STRONG ORDERBOOK DEVELOPMENT (Corporate Security Products, Orderbook1, EUR million) 73 Managed Detection and Response 68 Business Security Software 16 15 56 53 52 50 9 5 6 4 57 53 48 46 46 47 H2/2018 H1/2019 H2/2019 H1/2020 H2/2020 H1/2021 18 1Management accounts at the end of J
Slide 19: Resulting in increasing deferred revenue
RESULTING IN INCREASING DEFERRED REVENUE (F-Secure Group, Deferred Revenue, EUR million) Non-current Current 83 81 73 74 72 71 24 26 18 18 18 19 55 56 57 57 53 53 H2/2018 H1/2019 H2/2019 H1/2020 H2/2020 H1/2021 19
Slide 20: We aim to grow all our businesses while improving profitability
We aim to grow all our businesses while improving profitability Juhani Hintikka CEO & President 20
Slide 21: After successful transformation F-Secure is growing across all businesses
AFTER SUCCESSFUL TRANSFORMATION F-SECURE IS GROWING ACROSS ALL BUSINESSES (F-Secure Group, Revenue, EUR million) 228 Corporate security products 217 220 Cyber security consulting Corporate security2 191 77 Consumer security 73 74 170 158 64 148 72 63 46 48 52 50 32 96 96 98 95 95 100 104 2015 2016 2
Slide 22: Profitability on the rise
PROFITABILITY ON THE RISE (F-Secure Group, EUR million) Gross Margin Adjusted EBITDA Gross Margin Gross Margin-% Adjusted EBITDA Adjusted EBITDA-% 85% 79% 78% 79% 16% 16% 77% 36 36 180 172 167 11% 11% 151 9% 145 23 18 17 2017 2018 2019 2020 LTM1 2017 2018 2019 2020 LTM1 22 1LTM = Last 12 months as o
Slide 23: Scalable businesses enable profitability improvement
SCALABLE BUSINESSES ENABLE PROFITABILITY IMPROVEMENT (F-Secure Group, Gross Margin profile, EUR million) REVENUE CORPORATE SECURITY REPORTING PRODUCTS CYBER SECURITY CONSULTING CONSUMER SECURITY BUSINESS Business security software Managed Detection and Response AREA >85% >85% >65% GROSS >50% MARGIN
Slide 24: Cost levels normalizing - further leverage potential from sales & marketing
COST LEVELS NORMALIZING -FURTHER LEVERAGE POTENTIAL FROM SALES & MARKETING (F-Secure Group, EUR million) Operating expenses2 Operating expenses2, % of revenue Administration Research & Development Sales & Marketing Administration Research & Development Sales & Marketing 145 146 136 138 12 15 49% 128
Slide 25: Financial targets – growth across all business while improving profitability
FINANCIAL TARGETS – GROWTH ACROSS ALL BUSINESS WHILE IMPROVING PROFITABILITY (F-Secure Group, EUR million) 2021 Outlook (unchanged) Mid-term financial targets Corporate security products, Expected to grow at a high single-digit rate. Grow at a double-digit rate revenue Cyber security consulting, Exp
Slide 26: Key takeaways
KEY TAKEAWAYS • GOOD PARTNERSHIP AT THE CORE OF F-SECURE • TWO STRONG BUSINESSES WITH THREE DIFFERENT PLAYBOOKS • Elements – cloud-native and modular cyber security platform • Consulting and MDR serve enterprises and bring hands-on experience from latest attacks • Consumer security back on growth tr
Slide 27: F-Secure.
—_ od F-Secure.