F-Secure Oyj · OMXHEX:FSECURE

F-Secure Oyj — Q2 2016 Earnings Presentation

26 slides from F-Secure Oyj's earnings presentation, 2016

  1. Slide 1: Interim Report Q2/2016

    Interim Report Q2/2016 Samu Konttinen, CEO SECOND QUARTER REVENUES INCREASE BY 11% FROM PREVIOUS YEAR

  2. Slide 2: Agenda

    AGENDA  New CEO  Highlights from Q2  Market update  Business update  Outlook  Financials 2

  3. Slide 3: Samu Konttinen starts as the new CEO

    SAMU KONTTINEN STARTS AS THE NEW CEO The F-Secure Board of Directors has appointed Samu Konttinen as new President and CEO, effective 1 August 2016  Joined F-Secure in 2005  Member of the Leadership Team since 2009  Previous positions held: o Executive Vice President Corporate Security Business o

  4. Slide 4: Financial highlights

    All figures for continuing operations, except cash flow FINANCIAL HIGHLIGHTS April-June (Q2) January-June (H1)  Total revenues increased by 11% to EUR  Total revenues increased by 8% to EUR 39.3 million; 77.1 million;  corporate security increased by 26% to  corporate security increased by 26% t

  5. Slide 5: Key figures

    KEY FIGURES Revenues and EBIT Deferred revenues Eur million Eur million 45 60 38,9 39,3 40 37,8 37,2 35,5 50 35 30 40 25 38,2 38,8 30 30,9 36,0 20 32,5 15 20 10 6,0 10 5,0 4,6 5 4,0 3,2 13,9 11,1 12,1 11,6 12,3 0 0 Q215 Q315 Q415 Q116 Q216 Q215 Q315 Q415 Q116 Q216 Revenues EBIT (IFRS) Deferred reven

  6. Slide 6: Key figures

    KEY FIGURES Eur million Costs Eur million Liquid assets* 40 120 35 3,3 100 3,0 4,3 35,2 30 2,8 18,7 3,2 7,4 6,6 6,8 80 25 6,2 6,5 20 60 15 94,3 93,0 94,3 40 76,3 80,5 80,9 23,5 24,4 22,0 22,6 10 20,9 20 5 0 0 Q215 Q315 Q415 Q116 Q216 Q215 Q315 Q415 Q116 Q216 Sales & Marketing Reseach & Development A

  7. Slide 7: Corporate security the largest market and growing

    CORPORATE SECURITY THE LARGEST MARKET AND GROWING USD billion Forecast Information Security 2014-2020 120 100 80 10% annually 60 40 6% annually 20 0 3% annually 2014 2015 2016 2017 2018 2019 2020 IT security services and consulting IT security products Consumer Security 7 Source: Gartner, May 2016

  8. Slide 8: We are growing faster than the market

    WE ARE GROWING FASTER THAN THE MARKET F-Secure vs. Market % growth y-o-y nSense acquired in 35 June 2015 33 30 26 27 26 25 20 15 Corporate security 10 10 market growth 3-16% 5 3 3 Consumer security software 0 0 0 market growth 1-3% -5 -5 -10 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 F-Secure CORPORATE security

  9. Slide 9: Investments in growth producing first results

    INVESTMENTS IN GROWTH PRODUCING FIRST RESULTS Short-term: Increased investments Long-term: Increased revenues & profitability RESEARCH & DEVELOPMENT PROFITABLE GROWTH BY UTILIZING F-SECURE’S SCALABLE BUSINESS MODEL SALES & MARKETING 9

  10. Slide 10: We are expanding our product & service offering

    WE ARE EXPANDING OUR PRODUCT & SERVICE OFFERING VULNERABILITY & PATCH MGMT ATTACK SURFACE ASSESSMENT  Vulnerability scanning  Threat level assessment  Vulnerability management  Attack surface mapping  Automatic patch management SERVICES END-POINT & NETWORK PREDICT PREVENT SECURITY SUITES  Prof

  11. Slide 11: Scalability through strong go-to-market channels

    SCALABILITY THROUGH STRONG GO-TO-MARKET CHANNELS TECHNOLOGY: BEST-IN-CLASS CYBER SECURITY TECHNOLOGY PLATFORM OFFERING: CORPORATE SECURITY CONSUMER SECURITY GO-TO-MARKET: 3500+ IT RESELLERS & SERVICE PARTNERS 200+ OPERATOR PARTNERS DIRECT SALES ONLINE AND TRADITIONAL RETAILERS CUSTOMERS: 100 000 COM

  12. Slide 12: Corporate security in strong above-market growth

    CORPORATE SECURITY IN STRONG ABOVE-MARKET GROWTH Q2 HIGHLIGHTS  End point protection sales showed strong growth, significantly outpacing the market  Especially strong growth in Germany, France and Japan.  Good progress in North America and several countries in Europe  Cyber security services in

  13. Slide 13: First Rapid Detection Service deals signed soon after launch

    FIRST RAPID DETECTION SERVICE DEALS SIGNED SOON AFTER LAUNCH SENSORS IN THE NETWORK AND END-POINTS ALERT THREAT BIG INTELLIGENCE DATA BEHAVIOURAL RAPID ANALYSIS DETECTION CENTER ANOMALY 13

  14. Slide 14: Corporate security's share of total revenues increased to 39%

    CORPORATE SECURITY’S SHARE OF TOTAL REVENUES INCREASED TO 39% 30 25 24,4 24,3 23,9 23,6 23,5 23,3 23,6 23,2 20 15,4 15 14,6 14,6 13,7 11,6 12,2 10,9 11 10 5 0 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 14 Corporate Total Consumer Total

  15. Slide 15: Consumer security sales improved compared to Q1 in all regions

    CONSUMER SECURITY SALES IMPROVED COMPARED TO Q1 IN ALL REGIONS Q2 HIGHLIGHTS  Operator revenues remained at previous year’s levels  Sales improved in all regions, especially in North America  The roll-out of the F-Secure SAFE continued  Elisa/Appelsin (Finland), XS4ALL (Netherlands) and Voo (Bel

  16. Slide 16: Outlook for 2016 is unchanged

    OUTLOOK FOR 2016 IS UNCHANGED  F-Secure anticipates its overall  EBIT for continuing operations is security revenues to grow in 2016 estimated to be EUR 17-21 million compared to the year before (2015: EUR 20 million). (2015: EUR 148 million). 16

  17. Slide 17: Financials Q2 / 2016

    FINANCIALS Q2 / 2016 = F-Secure. &

  18. Slide 18: Interim report unaudited, prepared under IAS 34

    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

  19. Slide 19: Revenues

    REVENUES EURm 45 Q2 Revenues increased by 11% y-o-y 40 38,9 39,3  Total quarterly revenues 39.3m 37,2 37,8 (Q215: 35.5m) 35,5 35 Organic revenues grew by 7% year-on-year 30 25 20 15 10 6,0 5,0 4,0 4,6 5 3,2 0 Q215 Q315 Q415 Q116 Q216 Revenues EBIT (IFRS) 19

  20. Slide 20: Revenue split

    REVENUE SPLIT EURm Revenues from corporate security 30 increased by 26% totaling EUR 15.4 million (12.2m) 24,4 25 24,3 23,9 23,6 23,5 23,6  Corporate security represented 39 % 23,3 23,2 (Q215: 34%) of F-Secure’s total revenues 20 Revenues from consumer security increased by 3% and were EUR 23.9 mil

  21. Slide 21: Profitability

    PROFITABILITY EURm 7 18% Q2 Operating Profit 16%  EBIT (IFRS) 4.6m, 12% of revenues (Q215: 6 6,0 4.0m, 11%) 14%  Earnings per share for continuing operations 5 5,0 12% EUR 0.03 (EUR 0.02) 4,6  Earnings per share EUR 0.03 (EUR 0.02) 4 10% 4,0 3 8% 3,2 6% 2 4% 1 2% 0 0% Q215 Q315 Q415 Q116 Q216 EBI

  22. Slide 22: Costs

    COSTS EURm Q2 costs 40 Costs 34.3m (Q215: 31.0m), +11% y-o-y 35  The increase largely reflects costs incurred by 3,0 3,3 corporate security as a result of successful 4,3 30 2,8 recruiting as well as expenses relating to 3,2 7,4 6,6 product development and marketing 6,8 25 6,2 6,5  In the compariso

  23. Slide 23: Deferred revenues

    DEFERRED REVENUES Q2 Deferred revenues increased by 14% to 51.1m (44.8m) EURm 60 50 40 30 36,0 38,2 38,8 33,5 30,9 32,0 32,5 33,4 31,0 20 10 11,0 11,3 13,9 11,1 12,1 11,6 12,3 6,5 7,3 0 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Deferred revenue, non-current Deferred revenue, current 23

  24. Slide 24: Solid cash position

    SOLID CASH POSITION EURm Q2 Cash flow from operations 6.6m* (Q215: 120 4.3m)  Cash flow impacted partly by the release of the 100 EUR 4.5 million escrow account relating to the 35,2 sale of the personal cloud storage business to 18,7 Synchronoss and the residual tax payment of 80 EUR 6.1 million re

  25. Slide 25: Number of personnel

    NUMBER OF PERSONNEL  F-Secure stated as its target to recruit over a hundred new employees in 2016 to support the Company growth  Number of personnel 982 (Q116: 950; Q415: 926) at the end of the quarter 1000 900 139 147 137 135 144 800 700 308 279 303 600 273 279 500 400 300 493 490 500 510 535 20

  26. Slide 26: Regional revenue

    REGIONAL REVENUE EUR million 18 16,3 15,7 16 14,1 14 12 11,6 10 8 6 4,9 5,3 3,3 3,7 4 2 0 Nordic Rest of Europe North America Rest Q215 Q216 26 26

F-Secure — Q2 2016 Earnings Presentation on 6ix