F-Secure Oyj · OMXHEX:FSECURE
F-Secure Oyj — Q3 2016 Earnings Presentation
32 slides from F-Secure Oyj's earnings presentation, Nov 3, 2016
Slide 1: Strong order intake in corporate security
Samu Konttinen, CEO Interim Results Q3/2016 3 November, 2016 STRONG ORDER INTAKE IN CORPORATE SECURITY
Slide 2: Agenda
AGENDA Highlights from Q3 Market update Business update Outlook Financials
Slide 3: Key takeaways from Q3
KEY TAKEAWAYS FROM Q3 Corporate security continued to show good growth, outpacing the market Consumer security business in slight growth in a flat market 3
Slide 4: Financial highlights
FINANCIAL HIGHLIGHTS July-September (Q3) January-September (Q1–Q3) Total revenue increased by 4% to EUR 38.8 Total revenue increased by 7% to EUR million (37.2m); 115.9 million (108.7m); corporate security increased by 10% to corporate security increased by 21% to EUR 15.1 million (13.7m) EU
Slide 5: Revenue and EBIT
Revenue EBIT EUR million EUR million % of revenue 5
Slide 6: Deferred revenue in robust growth
DEFERRED REVENUE IN ROBUST GROWTH EURm Deferred revenue* *figure shows 4-qtr rolling average deferred revenue 6
Slide 7: Fixed costs and cash and available-for-sale assets
Fixed costs Cash and available-for-sale assets EUR million EUR million 94,3 7
Slide 8: Comprehensive cyber security offering
COMPREHENSIVE CYBER SECURITY OFFERING 8
Slide 9: Corporate security shows above market growth
CORPORATE SECURITY SHOWS ABOVE MARKET GROWTH Endpoint security product revenue continues in good, above market growth Especially strong growth in Finland, Japan and Germany Number of active resellers increased by 14% to nearly 4,000 New sales resources across Europe, new teams established in
Slide 10: Direct sales drive growth in consumer security
DIRECT SALES DRIVE GROWTH IN CONSUMER SECURITY Revenue from operator channel remained at previous year’s levels Continued focus on increasing cross and upselling portfolio New tools introduced for partners to improve customer journey Outlook remains stable Direct online and retailer sales
Slide 11: Total security and privacy
TOTAL SECURITY AND PRIVACY Internet security and VPN for all devices Starting from EUR 79.99 / year for 3 devices CUSTOMER BENEFITS PARTNER BENEFITS F-SECURE BENEFITS • Total security and privacy with • Supports the combined marketing • Increased average revenue per one easy subscription: includes F
Slide 12: Outlook for 2016 is unchanged
OUTLOOK FOR 2016 IS UNCHANGED REVENUE PROFITABILITY F-Secure anticipates its revenue EBIT for continuing to grow in 2016 compared to operations is estimated to be the year before (2015: EUR 148 EUR 17–21 million (2015: million) EUR 20 million) Description Revenue growth is expected to continue espe
Slide 13: Financials Q3 / 2016
FINANCIALS Q3 / 2016 = F-Secure. &
Slide 14: Interim report unaudited, IAS 34 basis of preparation
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 15: Revenue
REVENUE July–September EURm Revenue increased by 4% y-o-y Total quarterly revenue 38.8m (Q315: 37.2m) January–September Revenue increased by 7% y-o-y For the period overall revenue grew by 7% y-o-y, totalling EUR 115.9 million (108.7m) Organic revenue grew by 5% y-o-y Note: due to nSense h
Slide 16: Revenue split
REVENUE SPLIT July–September EURm Revenue from corporate security increased by 10% totalling EUR 15.1 million (13.7m) Revenue from consumer security increased by 1% and was EUR 23.7 million (23.6m) Corporate and consumer security represented 39% (37%) and 61% (63%) of total revenue respectivel
Slide 17: Profitability
PROFITABILITY July–September EURm Operating profit EBIT 4.5m, 12% of revenues (Q315: 6.0m, 16%) Earnings per share (EPS) for continuing operations EUR 0.02 (EUR 0.03) EPS EUR 0.02 (EUR 0.02) January–September Operating profit EBIT including the nSense acquisition-related costs (earn-out and
Slide 18: Fixed costs
FIXED COSTS July-September fixed costs 33.7m (Q315: EURm 30.6m), +10% y-o-y The increase was largely driven by costs incurred as a result of corporate and cyber security recruitments and long-term incentive plan accruals reflecting the increase in F-Secure’s share price during July-September Dep
Slide 19: Deferred revenue
DEFERRED REVENUE July–September Deferred revenue increased by 16% to EUR 50.4m (EUR 43.5m), continuing positive development* EURm 19 *figure shows 4-qtr rolling average deferred revenue
Slide 20: Solid cash position
SOLID CASH POSITION EURm July–September Q3 Cash flow from operations 6.8m (Q315: 5.7m) F-Secure’s financial position remained solid. Restated gearing ratio was 38% negative (36% negative). Gearing has been restated to reflect the reclassification of available-for-sale investments away from liqui
Slide 21: Number of personnel
2 1 NUMBER OF PERSONNEL 1,000th employee hired! F-Secure stated as its target to recruit over a hundred new employees in 2016 to support the Company growth. Through Q1-Q3, number of employees has increased by 90 Number of personnel at end of Q3 was 1016 (Q216: 982; Q415: 926) 21
Slide 22: Regional revenue
2 2 REGIONAL REVENUE Growth in most regions in Q3 EURm Nordic region ensured growth in Europe as a whole with strong performance Other regional revenue grew during the quarter January-September Nordic region revenue reached EUR 41.7m (36.0 m) Revenue in Rest of Europe decreased marginally to
Slide 23: Additional information
ADDITIONAL INFORMATION = F-Secure. &
Slide 24: A need for comprehensive solutions
A NEED FOR COMPREHENSIVE SOLUTIONS PREDICT PREVENT RESPOND DETECT
Slide 25: Corporate security market in strong growth, consumer market stable
CORPORATE SECURITY MARKET IN STRONG GROWTH, CONSUMER MARKET STABLE REVENUE USD billion 140 120 100 ~9% annually 80 60 40 ~7% annually 20 0 ~1% annually 2014 2015 2016 2017 2018 2019 2020 Consumer security software Corporate security products Corporate security services 25
Slide 26: Why F-Secure?
WHY F-SECURE? AMBITIOUS STRATEGY STRONG PERFORMANCE (1-9/2016) STRONG FUNDAMENTALS Strong growth is expected to continue especially CORPORATE SECURITY in the corporate security market in coming REVENUE UP BY 21%: CORPORATE SECURITY years. There are also new opportunities WINNING MARKET MARKET IN STR
Slide 27: Proven sales channels
PROVEN SALES CHANNELS Scalability through strong go-to-market channels 39 % of F-Secure total revenue* 61 % of F-Secure total revenue* * Q2 / 2016 TECHNOLOGY: BEST-IN-CLASS CYBER SECURITY TECHNOLOGY PLATFORM OFFERING: CORPORATE SECURITY CONSUMER SECURITY SECURITY PRODUCTS, MANAGED SECURITY SERVICES,
Slide 28: Best-in-class technology and know-how
BEST-IN-CLASS TECHNOLOGY AND KNOW-HOW Cyber security is a process PREDICT VULNERABILITY Security assessments MANAGEMENT Threat analysis and attack surface Vulnerability scanning enumeration Vulnerability management Automated patching F-Secure Radar CONSULTING SERVICES Technical assessmen
Slide 29: Key offering for businesses and consumers
Key offering for businesses Key offering for consumers Protection Service for Business F-Secure Radar vulnerability scanning and F-Secure SAFE is F-Secure's new security service Freedome is a privacy and security is a cloud-based endpoint management consists of sophisticated platform for both PC and
Slide 30: How does Rapid Detection Service work?
HOW DOES RAPID DETECTION SERVICE WORK? SENSORS IN THE NETWORK AND END-POINTS ALERT THREAT BIG INTELLIGENCE DATA BEHAVIOURAL RAPID ANALYSIS DETECTION CENTER ANOMALY 30
Slide 31: How does F-Secure SENSE work?
HOW DOES F-SECURE SENSE WORK? PC’s and mobile devices All other connected devices Own or operator Ethernet or Wi-Fi F-Secure Ethernet or Wi-Fi provided router connection SENSE connection 31
Slide 32: Contact details
CONTACT DETAILS WEBSITE EMAIL ADDRESS www.f-secure.com/investors investor-relations@f-secure.com Samu Konttinen Saila Miettinen-Lähde CEO Chief Financial Officer (CFO) Tapio Pesola IR Manager +358 44 3734693 tapio.Pesola@f-secure.com 32