F-secure Oyj · OMXHEX:FSECURE
F-secure Oyj — Investor Day (November 2024)
69 slides from F-secure Oyj's investor day presentation, Nov 20, 2024
Slide 1: Unlocking growth
Unlocking growth Investor Day 2024 20 November 2024
Slide 2: Today’s agenda
Today’s agenda 13:00 14:30 15:00 15:50 Strategy Financials Break Portfolio and growth and closing Introduction | Strategic direction | Market 30 min Portfolio | Products | AI landscape Financials | Sustainability Timo Laaksonen TL Viswanathan Sari Somerkallio President and Chief Executive Chief Prod
Slide 3: Presenting today
Timo Laaksonen Bruno Rodriguez TL Viswanathan Laura Kankaala President and Chief Revenue Chief Product Head of Threat Presenting Chief Executive Officer Officer Business Officer Intelligence today Eero Kukko Niko Kiukkonen Sari Somerkallio Director, Product Director, Product Chief Financial Officer
Slide 4: Disclaimer
Disclaimer This presentation contains forward-looking statements (such as, by way of example only, expressions “believes”, “expects”, “foresees” or similar) that reflect the current views and assumptions of F-Secure Corporation (“F-Secure”). These forward-looking statements include (but may not be l
Slide 5: A few words about practicalities
A few words about practicalities 5
Slide 6: Unlocking growth
Unlocking growth Timo Laaksonen President & CEO
Slide 7: Growth fundamentals established 2023
Growth fundamentals established 2023 Addressable Value Aspirational market increase culture Tier 1 and new verticals Scam protection Growth mindset Best partner experience Total conversion Agility Embedded experiences 7
Slide 8: Undisputed leader among world’s largest communication service providers
Undisputed leader among world’s largest communication service providers Chosen by 6-out-of-10 world’s Addressable market largest CSPs Security becoming a core service Value increase Allows reaching hundreds of millions of consumers Aspirational culture New Verticals primary focus now major financial
Slide 9: Putting a stop to scams
Putting a stop to scams Addressable market Prevented tens of millions of potential Value increase shopping scams Aspirational culture F-Secure management estimate based on F-Secure “Shopping Protection” and protection cloud events, and Global Anti-Scam Association average shopping scam loss 9
Slide 10: Scam protection: Right time, right place
Scam protection Right time, right place Broadest embedded portfolio in the industry Addressable market Award-winning, AI powered messaging scam protection Value Need for scam protection and related business opportunity increase resonates with partners Commitment among top 50 partners Roll-out status
Slide 11: New culture empowering growth mindset
New culture empowering growth mindset Addressable market Drive adoption Increase scale Industry leading Value increase and reach innovation Aspirational culture New culture and leadership principles foundational for our win plan 11
Slide 12: F-Secure confronts the biggest issues facing cyber security
F-Secure confronts the biggest issues facing cyber security The scam pandemic is Complexity is Our unique approach combines destroying trust #1 challenge to adoption security & experience • 80% of people live in fear of • 69% of consumers feel • Research driven, holistic scam scams while 85% have se
Slide 13: Only F-Secure is exclusively engineered for Partner Success
Only F-Secure is exclusively engineered for Partner Success Partner 1st We make it yours Undisputed leader with CSPs • End-to-end optimized • Driving differentiation with • Trusted cyber security partner to operating model – for each Embedded and Total offerings the world’s biggest partner segment •
Slide 14: Boosting growth in all market segments
Boosting growth in all market segments Bruno Rodriguez Chief Revenue Officer
Slide 15: The importance of implementing a comprehensive consumer cyber security solution
The importance of implementing a comprehensive consumer cyber security solution Michael Philpott Research Director, Service Provider – Consumer
Slide 16: Consumer cyber security total addressable market (TAM)
Consumer cyber security total addressable market (TAM)
Slide 17: Consumer cyber security TAM
Consumer cyber security TAM Consumer spend on cyber security (BUSD) +6% 12 11 11 10 According to market analysts, the consumer cyber security market is estimated to grow 6-7% over the next 3 years 2024 2025 2026 2027 Gartner, IDC, F-Secure market intelligence and management estimates 17
Slide 18: Consumer cyber security TAM according to F-Secure
Consumer cyber security TAM according to F-Secure Channel partners expanding TAM (BUSD, consumer spend) • B2C cyber security will grow in the CAGR 14.5 mid single digits Via partner +10% Direct Embedded Security $1.5B • B2B2C cyber security will grow at 11.0 more than 3x $6.5B 17% Scam $4B Protectio
Slide 19: Why B2B2C model is ideal to penetrate the consumer cyber security market
Why B2B2C model is ideal to penetrate the consumer cyber security market Most consumers see CSPs or Need a trusted companion insurance companies as their provider of choice for cyber security 81% OMDIA: 53% of consumers chose their expecting their Internet Provider to provide CSP as their provider f
Slide 20: Why B2B2C model is ideal to penetrate the consumer cyber security market
Why B2B2C model is ideal to penetrate the consumer cyber security market And consumers are willing to pay for cyber security 56% paying for all/some part of their security solutions in 2024 71% willing to pay for scam protection* Source: Global consumer market survey by F-Secure, Jan 2024, N=7,000;
Slide 21: CSP market trends
CSP market trends
Slide 22: CSPs realize they need to change…
CSPs realize they need to change… https://www.pwc.com/gx/en/issues/c-suite-insights/ceo-survey.html 22
Slide 23: CSP market trends
CSP market trends Extending the Building Router Convergence CSP apps standardization Core 23
Slide 24: Extending the Core
Extending the Core Why cyber security vs other VAS? Market growth VAS market is expected to grow 13.4% during 2024-2032* More profitable than other VAS Cyber security provides up to 75% GM compared to <10% from other VAS Demand from consumers “57% of consumers are willing to add security to their mo
Slide 25: Convergence between broadband and mobile
Convergence between broadband and mobile 25
Slide 26: Two examples
Two examples AT&T vs. Verizon: Who's leading the convergence race? Verizon this week outlined its approach to wireless-wireline convergence. But some see the company's new strategy as a poor imitation of the story AT&T has already begun telling, f S ater verizon AT&T in a ‘race to convergence, CEO s
Slide 27: In a converged world, CSPs need to deliver a unified user experience
In a converged world, CSPs need to deliver a unified user experience How will they achieve this?
Slide 28: CSPs supercharging their apps with security services
CSPs supercharging their apps with security services 28
Slide 29: What about the smart home?
What about the smart home? The challenge has been to find an easy way to deploy services on the router 29
Slide 30: Home routers (CPE) having their “Android Moment”
Home routers (CPE) having their “Android Moment” Biggest telcos in the world have deployed, or will be deploying next year a standard operating system in their routers 30
Slide 31: Security is the killer app for routers
Security is the killer app for routers Top router apps demanded by consumers are WiFi management and security Importance of factors when choosing your home gateway / WiFi router Good Wi-Fi coverage 83% Online security 79% Online privacy 77% High Speed 77% Wi-Fi automatic performance adjustment 72% L
Slide 32: F-Secure: The trusted partner for CSP transformation
F-Secure: The trusted partner for CSP transformation
Slide 33: Not all service providers are created equal
Not all service providers are created equal Understanding and service the needs of each partner segment Strategic partners Major partners Commercial partners Direct Business Top 20 Service Providers Top 100 Service Providers Other service providers Consumers • Large base, high • High ARPU • Distribu
Slide 34: Strategy to grow in each partner segment
Strategy to grow in each partner segment Win new partners by fueling their apps with smart SDKs and home routers with Increase ARPU by boosting Sense Total adoption. Grow the base. New wins especially in North America and Asia Better serve the smaller partners with our SaaS platform. Set the stage f
Slide 35: Why we win
Why we win Partner first, always Optimized to make Service Providers successful in security business Scam focused
Slide 36: Q&A
F-Secure. Q&A
Slide 37: Break
Break Presentation continues approximately at 15:00
Slide 38: Holistic & innovative portfolio fueling growth
Holistic & innovative portfolio fueling growth TL Viswanathan Chief Product Business Officer
Slide 39: Key challenges we are tackling
Key challenges we are tackling Scam pandemic Complexity Quantum $1 Trn reported lost to scams in ’24* AI 80% worry about their online Scams security Data breaches Malware 69% find security complex 2000 2010 2020 2024 2030 *Source: GASA Global Anti-Scam Alliance - Global State of Scams survey 2024, n
Slide 40: Solving the scam pandemic
Solving the scam pandemic Laura Kankaala Head of Threat Intelligence
Slide 41: Good morning,
Good morning, Please are you Signle or Married woman,| am interested in building a long term relationship with an honest and faithful woman,waiting for your response. Regards, Sgt.David Moran. fF F-secure.
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Slide 43: 20-Nov-24 Classification
20-Nov-24 Classification 43
Slide 44: 20-Nov-24
If you purchase HP FORUM OR WARRANTIES OF THE FORUM 20% DISCOUNT FOR ALL KINDS OF SERVICES REOLINE REDGlade Q Product Solutions Resources Open Source Enterprise Pricing phishing Local Feb 1. Filter by 17.4k results (241 ms) Sort by: Best match ~ ++" <> Code . . gophish/gophish WY Star {1 Repositorie
Slide 45: Understanding the scammers’ view
Understanding the scammers’ view F-Secure Scam Research Threat Intelligence “Scam Tactics & Techniques Framework” Scammer’s steps Create the scam front Monetize Hide your Manipulation Define Contact identity target group victim Access victim data Spread the scam Scam Protection Research & Developmen
Slide 46: Committed to industry leading innovation
Committed to industry leading innovation Massive shift from point solutions to more holistic offering Split of R&D investments 25% Industry leading security excellence and research 65% Point Solutions 70% Differentiation and unique IPR in scam protection as well as consumer experience 75% Use of dat
Slide 47: Comprehensive portfolio across platforms, devices & networks
Comprehensive portfolio across platforms, devices & networks Total Embedded Security Protection delivered through F-Secure experience F-Secure assets built into applications, routers* & networks F-Secure or co-branded for partner look and feel AT&T Active Armor Super app Operator/WiFi app New Resear
Slide 48: Total
Total Eero Kukko Director, Product Management Security Suite
Slide 49: Total “one app” with new scam protection and experience
Total “one app” with new scam protection and experience Total Protecting you in the moment Award winning AI-powered Industry leading unique approach SMS Scam protection partner flexibility App name Background color Corner radius Logo Image color Background color Partner Quick Partner Quick Action Ac
Slide 50: Embedded Security
Embedded Security Niko Kiukkonen Director, Product Management Embedded Security
Slide 51: Broadest & smartest Embedded Security portfolio
Broadest & smartest Embedded Security portfolio Embedded Security Embedded ‘Experience’ Fastest time to value through the Integrated Go-to-market unique Embedded ‘Experience’ Developer support CX journey success Embedded ‘Capabilities’ The highest degree of flexibility with a broad & modular portfol
Slide 52: Delivering on growth strategy – Total
Delivering on growth strategy – Total Total Value Completeness of protection 9% YoY increase 24% of users and 42% of partners on AARPU multimodule Total Total Embedded Security* Access to consumers Scale * Includes Sense Router Security & Network Security ** Current indicative view for 2024 52
Slide 53: Delivering on growth strategy – Embedded Security
Delivering on growth strategy – Embedded Security Embedded Security Value Completeness Delivering Embedded to 4 of 10 Tier 1’s of protection Total globally, with more in the pipeline AARPU Well positioned on router standardization Embedded with the biggest partner ecosystem Security** accessing ~50%
Slide 54: Trusted Companion Scam protection
Trusted Companion Our unique AI-powered approach re-imagining consumer security experience Protect Prevent Recover Scam protection In the moment Personalized Contextual Browsing Messaging Social Media Payments Impersonation Social engineering 54
Slide 55: F-Secure
iF F-Secure.
Slide 56: Investing for growth
Investing for growth Sari Somerkallio Chief Financial Officer
Slide 57: Updated medium term financial targets
Updated medium term financial targets 2025 is still a business ramp-up year, after which the journey towards achieving the financial targets is expected to accelerate Growth Profitability Dividend yield Leverage High single digit Adjusted EBITA Around or above 50% Net debt / adjusted growth (CAGR) m
Slide 58: Towards the updated medium-term financial targets
Towards the updated medium-term financial targets Previous mid-term Updated mid-term targets (by 2026) targets Strong Tier 1 pipeline More than High single digit growth (CAGR) with additional significant upside Long lead times in Tier 1 Growth EUR 200 million from major Tier 1 deals Some declining p
Slide 59: Revenue dynamics in the Partner Business
Revenue dynamics in the Partner Business Revenue recognition of typical business components 1) Non-recurring engineering 59
Slide 60: Substantial value potential in Total conversion
Substantial value potential in Total conversion Partner Business revenue – security apps Other 13% 18% 22% 40% ARPU 1x Total ready 64% 78% 47% 18% ARPU 1.2x – 2x Total 2023* 2024* 2027 What we said Aspiration last year * Indicative view 60
Slide 61: Understanding F-Secure topline reporting
Understanding F-Secure topline reporting Lookout post-acquisition related deferred revenue fair valued according to IFRS reporting 1.1 0.3 1.4 0.7 0.2 • Lookout post-acquisition related deferred revenue is fair 0.6 valued according to IFRS reporting • The negative revenue impact for 2024 is estimate
Slide 62: Solid deleveraging continues
Solid deleveraging continues Shareholder returns combined with growth investments and deleveraging 1. Fund growth 325.0 3.5 3.6 3.5 3.5 3.8 3.6 ✓ Value-enhancing CAPEX and OPEX investments 3.2 3.1 3.4 275.0 3.2 3.0 2.8 225.0 2.6 191.3 187.7 2.4 2. Deleverage through debt repayment 177.4 179.6 175.0
Slide 63: Building programmatic M&A capabilities within medium term financial framework
Building programmatic M&A capabilities within medium term financial framework Acquisitions Balance against existing debt level Options for larger moves improve over time, including use of equity Synergies tracking as per plan Mergers Originally estimated annual synergies Can be considered if deal si
Slide 64: Expanding sustainability reporting scope and transparency
Expanding sustainability reporting scope and transparency In tandem with CSRD regulation, ESG assessment and 2024 annual reporting Protecting digital moments • Building trust in digitality remains most material impact to society • Sustainability part of incentives thru financial metrics and employee
Slide 65: Key takeaways – why to invest in F-Secure?
Key takeaways – why to invest in F-Secure? Solid foundation to achieve the growth targets Scalable, highly profitable SaaS business model Strong operative cash flow Global leader in the Communication Service Provider (CSP) channel Well positioned to grow through strategic partnerships 65
Slide 66: Closing words
Closing words Timo Laaksonen President and CEO
Slide 67: Q&A
Q&A
Slide 68: Thank you for joining us today!
Thank you for joining us today!
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