Withsecure — Investor Day (June 2022)
61 slides from Withsecure's investor day presentation, Jun 3, 2022
Slide 1: Fast-growing Security as a Service company
Fast-growing Security as a Service company Capital Markets Day 3 June, 2022 Helsinki
Slide 2: Disclaimer: Forward looking statements
Disclaimer: Forward looking statements This presentation contains forward-looking statements that reflect the current views of WithSecure Corporation (“WithSecure”). These forward-looking statements include statements with regard to the expected development of business, results of operations and fin
Slide 3: Today's presenters
Today’s presenters Juhani Hintikka Antti Koskela Ashley Clark Janne Pirttilahti Tom Jansson Vice President, VP, Cloud Protection President and CEO Chief Product Officer Chief Financial Officer Commercial - Solutions 3
Slide 4: Agenda
Agenda 09:00 - 09:05 Opening of the day Laura Viita 09:05 - 09:25 Introduction to WithSecure Juhani Hintikka 09:25 - 09:50 Uniquely positioned to capture growth opportunity Antti Koskela 09:50 - 10:15 Customers and go to market model Ashley Clark COFFEE BREAK 10:35 - 10:55 Cloud content protection J
Slide 5: Introduction to WithSecure
Introduction to WithSecure Juhani Hintikka President & CEO
Slide 6: Key objectives of today
Key objectives of today Share our vision for Demonstrate how Explain why we are Security as a Service WithSecure is uniquely entering a new era of positioned in a large and profitable growth with fast-growing market our cloud-native portfolio as our main growth driver 6
Slide 7: WithSecure at a glance
WithSecure at a glance Revenue splits LTM Q1/’22 35% Cloud Native 43% Product split On-Premise 30+ 131m ~1,250 7,000+ Consulting Year history Revenue Employees1) Partners1) LTM Q1/’22 23% 8% 113% 64m 36% 72 Rest of Europe Net Revenue Cloud solutions Cloud solutions ARR Net promoter 19% Retention2) A
Slide 8: SaaS business growing at scale
SaaS business growing at scale 36% 113% Cloud solutions ARR growth1) Net Revenue Retention2) 8 Note: 1) LTM Q1/’22; 2) Last 3-month average. Monthly recurring Revenue for cloud-native products from current customers, compared to same period previous year
Slide 9: Cloud native portfolio delivering growth
Cloud native portfolio delivering growth 2025 2019 LTM Q1/’22 target 30% EUR EUR 43% 122m 131m Cloud Native On-Premise Consulting 9
Slide 10: Increasing security challenge for Enterprises
Increasing security challenge for Enterprises CYBER THREATS COMPLEXITY COMPETENCE GAP Threat landscape Legacy solutions complicating Lack of expertise to understand continues to expand the transformation to cloud and implement cloud security OUTCOME-BASED CO-SECURITY SIMPLICITY SECURITY APPROACH 10
Slide 11: Large and growing market opportunity
Large and growing market opportunity ElementsTM CounterceptTM Consulting B2B cyber security products Managed detection & response Cyber security consulting 38 +10% 34 +20% 26 +17% 2.2 16 1.2 2021 2025 2021 2025 2021 2025 % CAGR 11 Note: Global market sizes in USDbn. Market size for Cloud content pro
Slide 12: Growth strategy in place to deliver shareholder value
Growth strategy in place to deliver shareholder value 1 2 3 Leverage category Deepen Role as Grow ElementsTM leadership position Strategic Security product platform in Cloud Content Partner for Protection Enterprises USAGE- ANNUAL MONTHLY BASED LICENSE SUBSCRIPTION SECURITY ENDPOINT PRICING MODELS E
Slide 13: A strong diverse talent pool requires commitment to culture and values
A strong diverse talent pool requires commitment to culture and values 18% R&D 28% Consulting 5% Split by Sales 7% function IT ~1,250 +90% 4.1/5 Customer Services Employees University degree Glassdoor rating1) 18% 19% Other 8% 1% 27% ~70 … ~15 ~25% 30 and under 31 - 40 Nationalities in… Countries Wo
Slide 14: Leadership team
Leadership team Juhani Tom Jansson Christine Ari Vänttinen Antti Koskela Tiina Juha Tim Orchard Charlotte Hintikka Bejerasco Sarhimaa Kivikoski Guillou President and CEO Chief Financial Officer Chief Technology Chief Marketing Chief Product Officer Chief Legal Officer EVP, Business EVP, Solutions Ch
Slide 15: Medium-term financial targets
Medium-term financial targets 2021 Actuals GROWTH “To double revenue organically EUR 130m TARGET by the end of 2025” Revenue 2021 PROFITABILITY “Adj. EBITDA breakeven by the end of 2023 and (8%) TARGET Adj. EBITDA margin of some 20% by 2025” Adj. EBITDA margin 20211) 15 Note: 1) EBITDA adjusted for
Slide 16: WithSecure as an investment
WithSecure as an investment 1 Operating in a large and fast-growing market 2 Strong customer value proposition generating high retention 3 Fast-growing cloud solutions powered by world-class consulting 4 Growth strategy in place to deliver shareholder value 16
Slide 17: Uniquely positioned to capture growth opportunity
Uniquely positioned to capture growth opportunity Antti Koskela Chief Product Officer
Slide 18: Key messages
Key messages Broad and unique Customer-centric Cloud-native security operations security outcomes autonomous software offering 18
Slide 19: Broad and unique security operations offering
Broad and unique security operations offering A major European cyber security software and services provider Software and consulting SCOPE Selected competitors Mainly software or mainly consulting Non-European GEOGRAPHY European 19 Note: Consulting is defined as time & materials based consulting, su
Slide 20: Productizing frontline insights and data
Productizing frontline insights and data Enhanced consulting Frontline insights from Consulting intelligence ... SaaS platforms... Cloud Content Protection ... drives productization into ... Frontline expertise and insights ... Countercept™ Elements™ (Managed Detection (Software) & Response) ... ena
Slide 21: Customer-centric security outcomes
Customer-centric security outcomes Elements™ Managed services™ Countercept™ Consulting Attack surface management™ Cloud Content Protection TECHNOLOGY FOUNDATION Data Knowledge Intelligence 21
Slide 22: Day in the life - Developing and operating scalable software
Day in the life - Developing and operating scalable software SEND TELEMETRY LIVING SERVICES ENCRYPT EVERYTHING Committed to data-driven autonomous decision AWS based microservices and Software security is a primary driver in all making and fast response to incidents endpoint technology platforms dec
Slide 23: Cloud-native autonomous software
Cloud-native autonomous software Software used by our customers ...makes end point detections ...and handles an increasing number of is updated multiple times per day... in real-time… incidents 20 500,000 8,000 Average amount of engine updates Amount of end point detections Amount of incidents per d
Slide 24: Key competitive advantages
Key competitive advantages Trusted European Cloud-Native Platform Category Leader in Market Defining Proven Expertise to Leader for Security as a Cloud Content Detection and Solve the Most Service Protection Response Solution Complex Cyber Security Challenges +30 years of experience in 1 of only 9 N
Slide 25: Summary
Summary ✓ ✓ ✓ Broad and unique Customer-centric Cloud-native security operations security outcomes autonomous software offering 25
Slide 26: Customers and go to market model
Customers and go to market model Ashley Clark Vice President, Commercial - Solutions
Slide 27: Key messages
Key messages Broad customer base Scalable go to market Partnership model to with significant growth model to win new scale operations customers 27
Slide 28: Scalable go to market model
Scalable go to market model CUSTOMER PORTFOLIO GO TO MARKET ENTERPRISE Cyber Security Consultancy Services Direct Cloud MID–MARKET Content <5k employees Protection Managed Services Channel SMALL BUSINESS Elements Portfolio1) <0.5k employees 28 Note: 1) Endpoint Protection, EDR, Collaboration Protect
Slide 29: Broad customer base with significant growth
Broad customer base with significant growth End customers ✓ Thousands, as of May each year >140,000 active customers1) 140.7 ✓ 136.8 Top 6 134.4 global banks 132.7 130.3 ✓ 40+ Fortune 500 companies 2018 2019 2020 2021 2022 29 Note: 1) Served through partners
Slide 30: Growing the share of wallet of existing customers
Growing the share of wallet of existing customers Share-% with more than 1 solution1) As of Q1 each year 16% 14% 9% 6% 2% 2018 2019 2020 2021 2022 30 Note: 1) End Customers with 50+ seats
Slide 31: High customer retention rates
High customer retention rates Long customer relations Top 10 customers Vertical Years as customer Customer 1 Financial Services 10 years Customer 2 Customer 3 Financial Services Media 6 years 4 years 113% Customer 4 Financial Services 7 years Net Revenue Retention1) Customer 5 Financial Services 7 y
Slide 32: Key messages
Key messages Broad customer base Scalable go to market Partnership model to with significant growth model to win new scale operations customers ✓ ✓ Accelerating customer Increasing share of wallet growth 32
Slide 33: Direct sales approach
Direct sales approach Enterprise and larger Strategic account Simple Customer mid market profile ownership and engagement to focused expansion WithSecure 33
Slide 34: Strong value proposition for >7,000 partners globally
Strong value proposition for >7,000 partners globally MANAGED SERVICE PROVIDERS VALUE ADDED RESELLERS TRADITIONAL RESELLER +5,000 local companies in tens of countries Selected examples Selected examples 17 Avg. partnership years with top 10 resellers 72 Net Promoter Score 1) 34 Note: 1) Measured at
Slide 35: Key messages
Key messages Broad customer base Scalable go to market Partnership model to with significant growth model to win new scale operations customers ✓ ✓ ✓ Accelerating customer Increasing share of wallet Proven partnership model growth 35
Slide 36: Cloud content protection
Cloud content protection Janne Pirttilahti VP, Cloud Protection
Slide 37: Key messages
Key messages Security as a Broad global customer Roadmap in place for partnership - profound base rapid growth need 37
Slide 38: Cloud security
Cloud security SECURITY “OF” THE CLOUD Application-Level Control & Security I Physical Security I Host Infrastructure Network Level Control & Security I Storage Level Control & Security 38
Slide 39: Cloud security – shared responsibility
Cloud security – shared responsibility SECURITY “OF” THE CLOUD Application-Level Control & Security I Physical Security I Host Infrastructure Network Level Control & Security I Storage Level Control & Security Customers Responsibility Content Security Identity Management Data Backup Access Control A
Slide 40: The Salesforce environment
The Salesforce environment Communities 150,000+ Customers USD 26.5Bn Salesforce revenue in FY20221) USD 24Bn Estimated market size of system software ecosystem (including app and software related services) and related add-on apps 40 Note: 1) Fiscal year ending January 31, 2022 Source: The Salesforce
Slide 41: Security threats we prevent in Salesforce
Security threats we prevent in Salesforce • Malicious content uploaded to community Communities • Infection of company personnel, environment or community users Communities • Significant brand damage caused by security threats • Malicious content uploaded via support case • Customer service not awar
Slide 42: Co-selling with Salesforce
Co-selling with Salesforce Global demand, with Dedicated sales and Salesforce Salesforce Collaboration with largest share from marketing teams implementation Appexchange Salesforce large enterprises partners 42
Slide 43: Wide customer base with global demand
Wide customer base with global demand By Sector By Geography APAC (excl. Japan, Australia Media/Comms Professional Services and New Zealand) Other Japan Utilities/Energy 4% 3% 3% Financial Services 1% 7% 11% 24% Manufacturing 8% Australia & New Zealand 12% 43% North America Pharma/Healthcare 8% 18%
Slide 44: Proven customer success
Proven customer success ”Many people believe that Salesforce is responsible for all security. However, aspects of security are left to ourselves e.g., when files change hands. Therefore, we must make sure to security scan everything that comes in and out of the system” - Customer A, Program Director
Slide 45: Roadmap for rapid growth
Roadmap for rapid growth Expand product functionality and expand Expand into other ecosystems within Salesforce (e.g. Slack) Technology expansion Focus on growth after Geographic expansion on the back of Additional growth from initial investments best in class Salesforce partnership groupwide synerg
Slide 46: Summary
Summary ✓ ✓ ✓ Security as a Broad global customer Roadmap in place for partnership - profound base rapid growth need 46
Slide 47: Financial overview – growing at scale
Financial overview – growing at scale Tom Jansson Chief Financial Officer
Slide 48: Key messages
Key messages Strong financial Strong momentum in Clear path to foundation to continue cloud portfolio profitability growing from successful share issue 48
Slide 49: Recurring revenue business models
Recurring revenue business models ElementsTM Cloud Content Cyber Security CounterceptTM Portfolio1) Protection Consultancy Services Subscription Subscription Subscription Project based or day rate & Usage-based Recurring annual or monthly fees 49 Note: 1) Endpoint, Protection, EDR, Collaboration Pro
Slide 50: Shift to cloud-native products going according to plan
Shift to cloud-native products going according to plan EUR million 130.0 122.5 120.1 47.2 50.0 45.8 30.0 36.2 31.8 52.7 36.3 42.4 2019 2020 2021 Consulting On-Premise Cloud Native 50
Slide 51: Strong momentum in cloud portfolio
Strong momentum in cloud portfolio ANNUAL CLOUD-NATIVE RECURRING REVENUE1) EUR million +36% 64.1 60.9 55.5 51.5 45.5 47.0 41.7 42.5 43.2 Q1/’20 Q2/’20 Q3/’20 Q4/’20 Q1/’21 Q2/’21 Q3/’21 Q4/’21 Q1/’22 51 Note: FY2022 financial information is preliminary and unaudited; 1) Corporate security products e
Slide 52: Strategically important consulting remains stable
Strategically important consulting remains stable QUARTERLY LTM CONSULTING REVENUE EUR million Divestments in Q4/’21 and Q1/’22 will impact revenue by EUR ~7m on an annual level 50.3 48.0 47.8 48.1 47.0 45.8 45.9 47.2 45.2 Q1/’20 Q2/’20 Q3/’20 Q4/’20 Q1/’21 Q2/’21 Q3/’21 Q4/’21 Q1/’22 52 Note: FY202
Slide 53: Scalable product businesses to drive profitability
Scalable product businesses to drive profitability REVENUE PRODUCTS CONSULTING REPORTING BUSINESS AREA Elements™ Cloud Content Protection Countercept™ >90% >85% >70% GROSS MARGIN 50-55% AMBITIONS SCALABILITY Software Software Software & Service Service 53
Slide 54: Path to profitability through scaling
Path to profitability through scaling Today1) Break even point Mid-term Revenue EUR 131m Gross margin (WithSecure) 68% Sales & Marketing of sales 57% R&D of sales 25% Admin costs of sales 11% Adjusted EBITDA (11%)2) ~0% ~20% 54 Note: 1) LTM Q1/’22; 2) Estimated comparable EBITDA
Slide 55: Strong financial foundation to continue growing
Strong financial foundation to continue growing EUR 92m Develop existing portfolio Net cash position Q1/’221) 73% Room to catch short-term Equity ratio Q1/’22 market opportunities 55 Note: 1) Cash and financial assets at FVTPL – Bank loans - Lease liabilities
Slide 56: Medium-term financial targets
Medium-term financial targets 2021 Financials GROWTH “To double revenue organically EUR 130m TARGET by the end of 2025” Revenue 2021 PROFITABILITY “Adj. EBITDA breakeven by the end of 2023 and (8%) TARGET Adj. EBITDA margin of some 20% by 2025” Adj. EBITDA margin 20211) 56 Note: 1) EBITDA adjusted f
Slide 57: Outlook 2022
Outlook 2022 “Revenue from cloud-native products will grow by approximately 30% from previous year, CLOUD-NATIVE accelerating in the second half of 2022. Previous year revenue from cloud-native products PRODUCTS was EUR 51.8 million.” “Comparable revenue of the group will grow at a low double-digit
Slide 58: Concluding remarks
Concluding remarks Juhani Hintikka President & CEO
Slide 59: Growth strategy in place to deliver shareholder value
Growth strategy in place to deliver shareholder value 1 2 3 Leverage category Deepen Role as Grow ElementsTM leadership position Strategic Security product platform in Cloud Content Partner for Protection Enterprises USAGE- ANNUAL MONTHLY BASED LICENSE SUBSCRIPTION SECURITY ENDPOINT PRICING MODELS E
Slide 60: Key objectives of today
Key objectives of today ✓ ✓ ✓ Share our vision for Demonstrate how Explain why we are Security as a Service WithSecure is uniquely entering a new era of positioned in a large and profitable growth with fast-growing market our cloud-native portfolio as our main growth driver 60
Slide 61: secure
secure