F-Secure Oyj · OMXHEX:FSECURE
F-Secure Oyj — Q4 2015 Earnings Presentation
26 slides from F-Secure Oyj's earnings presentation, Feb 5, 2016
Slide 1: High demand for cyber security services, corporate security growth continues
F-Secure Corporation Interim Report Q4/2015 HIGH DEMAND FOR CYBER SECURITY SERVICES, CORPORATE SECURITY GROWTH CONTINUES Christian Fredrikson, CEO 5 February 2015 1
Slide 2: Agenda
AGENDA Highlights from Q4 and FY2015 Market review Business updates Outlook Financials 2
Slide 3: We've changed the way we report our revenue split
WE’VE CHANGED THE WAY WE REPORT OUR REVENUE SPLIT CONSUMER CORPORATE SECURITY SECURITY OPERATORS DIRECT SALES RESELLERS CYBER SECURITY SERVICES Old way Operators 49% Other channels (Direct-to-consumer and Corporate security) 51% New way Consumer security 61% Corporate security 39% 3
Slide 4: Financial highlights
FINANCIAL HIGHLIGHTS October-December Full year 2015 Revenues 38.9M (+13%) Revenues 147.6M (+7%) Consumer revenue 23.9M (+3.5%) Consumer revenue 93.8M (+2%) Corporate revenue 15.0M (+31%), Corporate revenue 53.8M (+18%), organic and acquired organic and acquired EBIT (non-IFRS) 5.9M, 1
Slide 5: Other highlights
OTHER HIGHLIGHTS Strategy F-Secure amended its strategy and confirmed becoming the leading European cyber security company as its key target Plan for dividend proposal The Board plans to propose to the Annual General Meeting the distribution of a EUR 0.06 dividend and a EUR 0.06 extra dividend p
Slide 6: Key figures
KEY FIGURES Revenues Deferred revenues Eur million Eur million 45 60 40 38,9 37,2 48,1 35,9 35,5 50 34,5 44,9 44,8 35 43,0 43,5 30 40 25 30 20 15 20 10 7,3 6,2 5,9 10 5,0 4,1 5 0 0 Q414 Q115 Q215 Q315 Q415 Q414 Q115 Q215 Q315 Q415 Revenues EBIT (non-IFRS) Deferred revenue EBIT (non-IFRS) calculated
Slide 7: Key figures
KEY FIGURES Eur million Costs Eur million Net cash 40 120 110,2 35 0,9 0,1 0,6 100 94,4 4,3 30 35,2 2,5 2,8 0,8 0,6 2,6 80,5 1,9 6,8 80 25 7,4 6,2 6,5 6,3 61,3 20 60 15 40 76,3 22,0 22,6 10 20,8 20,2 18,8 20 5 0 0 Q414 Q115 Q215 Q315 Q415 Q414 Q115 Q215 Q315 Q415 nSense transaction related items Non
Slide 8: Advanced attacks are driving the security technology
ADVANCED ATTACKS ARE DRIVING THE SECURITY TECHNOLOGY Top breaches Enterprises in 2015 Anthem (80 million people affected) Ashley Madison (37m) Mid-Size Business Office of Personnel Management (25m) Experian/T-Mobile (15m) Premera (11m) Consumer LastPass (7m) CareFirst (1,1m) The hacking team (1m) Sl
Slide 9: The amount of connected devices is expected to explode
THE AMOUNT OF CONNECTED DEVICES IS EXPECTED TO EXPLODE 2015 2020 2030 Number of connected 13B 33B devices ? Number of 2,6B smartphones 6B ? Number of PCs 2B 2B ? Source: Juniper research, IDC research, Gartner 9
Slide 10: Security services and consulting are driving the future growth
SECURITY SERVICES AND CONSULTING ARE DRIVING THE FUTURE GROWTH USD Bn 70 20% 60 50 40 5% 30 20 10 2% 0 Source: Gartner 2014 2015 2016 2017 2018 2019 1 IT security services and consulting IT security products Consumer Security 0
Slide 11: We aim to become the leading European cyber security company
WE AIM TO BECOME THE LEADING EUROPEAN CYBER SECURITY COMPANY “We are recruiting over a hundred Maximize the commercial impact of F-Secure’s new employees technical expertise and multiple sales channels this year.” Overall corporate security focus in selected European markets and Japan Cyber Security
Slide 12: Corporate security in Q4
CORPORATE SECURITY IN Q4 GOOD QUARTER FOR DEMAND FOR CYBER INVESTING IN THE RESELLER BUSINESS SECURITY SERVICES HIGH GROWTH CONTINUES Germany, Japan and North Strong growth both year-on- Recruiting sales people, America developed particularly year (pro forma) and quarter- developers and cyber
Slide 13: Advanced Threat Protection a solution under development
ADVANCED THREAT PROTECTION A SOLUTION UNDER DEVELOPMENT VULNERABILITY & PATCH MGMT ATTACK SURFACE ASSESSMENT Karhu Threat level assessment Vulnerability scanning Attack surface mapping Vulnerability management Software Updater Automatic patch management SERVICES END-POINT & NETWORK PREDICT
Slide 14: Consumer security in Q4
CONSUMER SECURITY IN Q4 DIRECT-TO-CONSUMER NEW SIGNIFICANT INVESTING IN NEW DELIVERED GROWTH PARTNERSHIPS SIGNED PRODUCTS Direct-to-consumer continues Global device manufacturers F-Secure Sense announced to deliver growth driven by ACER and TCL/Alcatel to in November at Slush SAFE preinstall F
Slide 15: At home, traffic is routed through F-Secure SENSE
At home, traffic is routed through F-Secure SENSE… Own or operator provided router Ethernet or Wi-Fi connection F-Secure Ethernet or Wi-Fi connection SENSE … and outside the home, the Sense app provides security and privacy 15
Slide 16: Outlook for 2016
OUTLOOK FURTHER DESCRIPTIONS FOR 2016 In 2015 F-Secure gave its profitability guidance as EBIT (non-IFRS), in which the cost impact of the deferred payment and earn-out elements of the nSense acquisition were excluded. In 2016, the EBIT guidance includes an estimated EUR 3 million cost impact from t
Slide 17: Financials Q4 / 2015
FINANCIALS Q4 / 2015
Slide 18: Reporting basis: discontinued operations and nSense consolidation
As of the beginning of 2015 the personal cloud storage business (younited), which was sold to Synchronoss Technologies in February, is reported as discontinued operations. Consequently, comparison figures related to the statement of income have been restated. Comparison figures in the text refer to
Slide 19: Revenues
REVENUES EURm 45 Q4 Revenues increased by 13% y-o-y 38,9 Total quarterly revenues 38.9m (Q414: 34.5 m) 40 37,2 35,9 35,5 Revenues from consumer security increased by 35 34,5 3.5% and were EUR 23.9 million (23.1 m) 30 Revenues from corporate security increased by 31% totaling EUR 15.0 million (
Slide 20: Revenue split
REVENUE SPLIT F-Secure has decided to change its reporting on revenue. As of Q4 2015, the revenue split will be reported between consumer security revenue (including operator and direct-to-consumer businesses) and corporate security revenue (including corporate reseller and cyber security services b
Slide 21: Profitability
PROFITABILITY EURm Q4 Operating Profit 8,0 25% EBIT (non-IFRS) 5.9m, 15% of revenues (Q414: 7,3 6.2m, 18%) 7,0 EBIT (IFRS) 5.0m, 13% (Q414: 5.6m, 16%) 6,2 20% 5,9 Earnings per share for continuing operations 6,0 EUR 0.00 (EUR 0.03) 5,0 5,0 Earnings per share EUR 0.00 (EUR 0.03) 4,1 15% 4,0 2
Slide 22: Costs
COSTS EURm 40 Q4 costs 35 0,9 Costs 33.8m (Q414: 27.6m), +22% y-o-y 0,1 0,6 4,3 The increase is mainly related to personnel 30 2,8 0,8 2,5 related expenses, external services and costs 0,6 2,6 incurred by the acquired nSense business 25 1,9 6,2 6,8 7,4 Depreciations from past capitalized expense
Slide 23: Deferred revenues
DEFERRED REVENUES Q4 Deferred revenues increased to 48.1m (43.0m) EURm 60 50 12,1 40 11,3 4,7 11,0 13,9 11,1 6,5 8,8 8,7 9,2 7,3 8,5 30 20 35,2 33,4 33,5 36,0 30,1 31,0 32,0 30,9 32,5 29,1 27,7 29,6 10 0 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Deferred revenue, current Deferred
Slide 24: Solid cash position
SOLID CASH POSITION EURm 120 Solid operational cash flow in Q4 110,2 Cash flow from operations 14.3m* (Q414: 11.6m) 100 94,4 35,2 Market value of liquid assets on 31 December 94.3m (Q414 : 61.3m) 80,5 80 61,3 * Including discontinued business 60 40 76,3 20 0 Q414 Q115 Q215 Q315 Q415 Cash posit
Slide 25: Number of personnel
NUMBER OF PERSONNEL Number of personnel 926 (Q414: 921) at the end of the quarter 1000 900 127 135 144 147 800 133 700 325 273 279 279 600 274 500 400 300 469 493 490 500 200 434 100 0 Q414 Q115 Q215 Q315 Q415 Sales and Marketing Research and Development Administration 25
Slide 26: Regional revenue
REGIONAL REVENUE % of revenue 50% 46% 45% 40% 40% 36% 35% 34% 30% 25% 20% 15% 15% 12% 10% 9% 8% 5% 0% Nordic Rest of Europe North America Rest 10-12/2014 10-12/2015 26