F-Secure Oyj · OMXHEX:FSECURE
F-Secure Oyj — Q2 2011 Earnings Presentation
32 slides from F-Secure Oyj's earnings presentation, Jul 27, 2011
Slide 1: F-Secure Corporation - Interim report Q2 2011
F-Secure Corporation - Interim report Q2 2011 (Unaudited) July 27, 2011 Kimmo Alkio, President & CEO Protecting the irreplaceable | f-secure.com
Slide 2: Q2 highlights
Q2 highlights • Operator channel performed strongly showing accelerating revenue growth to 24%, total revenue growth close to 10% • Continue to increase investments to drive future growth and competitiveness of services • Security subscription growth continues strong; storage related business suppor
Slide 3: Contents
Contents 1. Financial performance in Q2 2011 2. Operator business 3. Q2 key service & product launches 4. Market review 5. Long term objectives & Outlook for 2011 3
Slide 4: 1. Financial performance in Q2 2011
1. Financial performance in Q2 2011 4
Slide 5: Q2 Revenue and EBIT
Q2 Revenue and EBIT • Revenue growth accelerated in EURm Q2 driven by operator channel • Total quarterly revenues 35.3m; 40 growth of 9% (Q210: 32.3m) 35 • Operator revenues (incl. Storage 30 and Digital Content business) 20.3m, growth of 24% compared 25 to Q210 and 9 % from Q111 (Q110: 15.6m) 20 •
Slide 6: Q2 Costs – investing to accelerate operator growth
Q2 Costs – investing to accelerate operator growth EURm • Total costs 29.1m +13%; (Q210: 25.8m) 35 • Capitalization of research & 30 development costs; during Q211 impact ~1.6m (0.8m) 25 • Cost increases targeted in 20 • Geographical expansion; Latin America 15 • R&D resources; portfolio expansion t
Slide 7: Q2 Operating profit
Q2 Operating profit • Operating profit level at a fair EURm EBIT level 8 • EBIT 4.6m , 13% of revenues 7 (Q210: 4.9m, 15%). 6 • Equity ratio: 5 • June 30, 2011 68% 4 • Mar. 31, 2011 60%* • Dec. 30, 2010 3 69% 2 • Sep. 30, 2010 71% 1 *69% if dividend paid in March 0 EBIT Q410 excluding restructuring
Slide 8: Development of EBIT margin
Development of EBIT margin • Prioritising growth over short 30 % term profitability, currently investing in Storage business 25 % • Seeking to improve profitability 20 % longer term towards 25% EBIT level 15 % The graph shows the EBIT excluding the non-recurring 10 % impairment loss of Network Contr
Slide 9: Q2 Cash position
Q2 Cash position EURm • Cash flow from operations was 0.8m 120 Steek positive (Q210: 5.6m) Capital acquisition repayment • Increased CAPEX 100 • Negatively impacted by change of net working capital (timing of payables and receivables) 80 • Cash position remained at a good level 60 • Market value of
Slide 10: Q2 Deferred Revenues
Q2 Deferred Revenues EURm 40 • Deferred revenues were at 36.8m (37.2m) ; healthy renewal license sales in 35 the channel business • Japan, as one of the key countries for 30 corporate business, impacted by earthquake 25 • Deferred revenues accrued in the balance 20 sheet • June 30, 2011 36.8m 15 • M
Slide 11: Q2 2011 Regional Revenue Split
Q2 2011 Regional Revenue Split 1-6/2011 1-12/2010 Rest of World Nordic Rest of Ctries World 12 % 12 % 33% North Nordic North America 33 % America 9% 10 % Rest of Rest of Europe Europe 46 % 45 % 11
Slide 12: Number of personnel
Number of personnel • At the end of Q2: 873 (Q111: 851; Q410: 812) 1000 900 • During Q2 new recruitments: supporting growth 800 businesses, mainly in the storage 700 business and R&D 600 • Re-skilling on-going; operator 500 sales roles, Storage related 400 development, project 300 management and ser
Slide 13: 2. Operator business: Strong global partner network
2. Operator business: Strong global partner network
Slide 14: Q2 Operator business
Q2 Operator business EURm • Q2 revenues of 20.3m (16.4m); growth 22 of +24% YoY ; +9% QoQ 20 • Healthy security subscriber growth continued; increase in take up rates 18 • Storage related project revenues (i.e. AT&T) and 16 subscriber sales 14 • Increasing number of existing 12 Operators launching c
Slide 15: More than 200 operator partners globally
More than 200 operator partners globally and over 250 m broadband subscribers 15
Slide 16: 3. Products and Services
3. Products and Services Products and services 16
Slide 17: Products, Services and Technologies
Products, Services and Technologies • F-Secure develops and sells security and storage related services that support personal computers, servers and an increasing set of major smartphone and tablet operating systems • F-Secure is increasing the investment to extend the products and services to new m
Slide 18: Q2 key product & service announcements
Q2 key product & service announcements • F-Secure Mobile Security 7. F-Secure Mobile Security 7 is a complete security solution for smartphones and tablet computers • F-Secure Anti-Virus for Mac for home users and businesses. The product has been designed with performance in mind, making it easy and
Slide 19: F-Secure key consumer products
F-Secure key consumer products Full PC protection Better way for online backup 19
Slide 20: 4. Market review
4. Market review Internet expansion, new devices and increasing use of social media strengthen the demand for value added services 20
Slide 21: The number of Internet users increasing - more potential customers
The number of Internet users increasing - more potential customers Milllion Internet users* Internet in 2015: • >500m new users • >2.5B users altogether • Mobile Internet > traditional broadband Source: *eTForecasts, **Morgan Stanley Research, 2010 21
Slide 22: The number of new devices increasing - more devices to offer services
The number of new devices increasing - more devices to offer services 10b+ Video in mobile devices Elektronics in cars (GPS, ABS, A/V) Games Wiresless home devices 1b+ Mobile Smartphones devices Electric books 100mi Mobile Tablets phone MP3 Mobile phone / PDA PC Home entertainment Number of devices
Slide 23: Social media increase the use of Internet
Social media increase the use of Internet - protecting identity more and more important 23
Slide 24: Security is needed in Internet
Security is needed in Internet Estimateof increasingmalware 18 000 000 16 000 000 14 000 000 12 000 000 10 000 000 8 000 000 6 000 000 4 000 000 2 000 000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: F-Secure 24
Slide 25: Market trends – summary
Market trends – summary • Internet growth continues globally • Mobile internet driving growth • Role of internet security significant for Internet business over the Internet • Smartphones and tablets growing in number • New devices connected to the Internet are coming to the markets New devices • Ne
Slide 26: 5. Long-term objectives & future outlook
5. Long-term objectives & future outlook 26
Slide 27: Operators drive Internet expansion. Long-term market opportunities are attractive for F-Secure.
Operators drive Internet expansion. Long-term market opportunities are attractive for F-Secure. 27
Slide 28: Long-term objectives
Long-term objectives Growth • Continue to exceed average market growth • Geographic expansion • New large operator partnerships Software as a Service • Highly competitive internet security • Combined internet security and online backup services aiming for higher number of subscribers • Room for inno
Slide 29: Outlook for 2011 is unchanged
Outlook for 2011 is unchanged • The growth is driven by Software as a Service business; security sales, storage related project deliveries and storage service sales • The management estimates annual revenue growth to accelerate to around 10% from 2010 • Annual profitability is expected to improve fr
Slide 30: CEO transition
CEO transition F-Secure President and CEO Kimmo Alkio has decided to pursue a leadership opportunity in an adjacent industry sector. He will continue to lead F-Secure until 31 October, 2011. Search for the new CEO has been initiated and is planned to be completed during the second half of 2011. 30 J
Slide 31: Thank you!
Thank you! Forward-looking statements: Certain statements in this presentation are forward-looking, and the actual outcome could be materially different. Such forward-looking statements are based on F- Secure’s present plans, estimates, assumptions, projections and expectations and are subject to ri
Slide 32: Protecting the irreplaceable
Protecting the irreplaceable F-Secure.