Slide 1: F-Secure Corporation Investor Presentation
F-Secure Corporation Investor Presentation October – December 2024
Slide 2: F-Secure in 2023
F-Secure in 2023 Revenue by channel, %* Revenue by geography, %* 6% 19% 31% Nordic countries 25% Partner Rest of Europe channel North America Direct channel Rest of World 81% 38% 2
Slide 3: Our purpose, vision and mission
Our purpose We exist to make every digital moment more secure, for everyone Our vision To become the #1 security experience company in the world Our mission Continuously deliver brilliantly simple, frictionless security experiences to our customers and partners 3
Slide 4: Our #1 security experience vision
Our #1 security experience vision Consumer Partner Trusted companion Security business as-a-service Holistic Contextual & Business Flexibility Protection Personalized Outcomes Empowered Engagement 4
Slide 5: F-Secure consumer security portfolio
F-Secure consumer security portfolio Protecting your customers’ digital moments in a holistic way. Internet Privacy Browsing & Privacy Protection Security Phishing Protection Protection Trusted Device companion Identity Monitoring Protection & Breach alerts Identity Protection Family Password Rules
Slide 6: Comprehensive portfolio across platforms, devices & networks
Comprehensive portfolio across platforms, devices & networks All-in-one security and privacy app Embedded security SDK and API based security and privacy protection F-Secure Total capabilities AT&T Active Armor Fintech Carrier apps with mobile app Superapp router management Device Security Scam Prot
Slide 7: F-Secure transforming to a customer centric business model
F-Secure transforming to a customer centric business model Strategic Partners Major Partners Commercial Partners Direct Business BUSINESS SEGMENT World’s largest Service Providers Leading regional Service Providers Large volume of popular Service (SP’s) Providers Increase Total adoption among partne
Slide 8: Consumer cyber security is a large, growing market
Consumer cyber security is a large, growing market Several market drivers accelerating growth Global cyber security market (EURbn)* 22-26E CAGR ➢ Increasing digitalization affects 10.3 6.8% consumer behavior 1.6 9.5% 7.9 ➢ Consumers’ increasing willingness 1.1 2.4 3.8% to pay is increasing 2.0 ➢ Cyb
Slide 9: F-Secure strategy journey
F-Secure strategy journey To become the #1 security experience company in the world 2025+ 2024 2023 CSP Leadership Be the undisputed leader among world’s leading Communications Service Providers 2022 Tier 1 ramp-up Total Embedded Security portfolio Total New Tier 1 partnerships Year of Total Lookout
Slide 10: January−September 2024: Revenue +16.9%, organic growth +2.4%
January−September 2024: Revenue +16.9%, organic growth +2.4% Revenue by geography Revenue by channel Adjusted EBITA EURm EURm EURm +16.9% +16.9% 109.2 109.2 +23.1% 93.5 93.5 7.7 +36.1% 40.5 21.0 37.1% 32.9 5.7 +14.2% 35.2% 34.1 +59.2%* 18.4 21.4 14.6 12.8 -1.0%* 36.4 36.1 88.2 +17.5% 13.2 75.1 9.9 +
Slide 11: Gross margin and adjusted EBITA development
Gross margin and adjusted EBITA development Gross margin Adjusted EBITA and adjusted EBITA margin EURm EURm 45.0 93.6% 20 45.0% 92.0% 40.3% 89.4% 89.4% 40.0 85.7% 85.9% 86.4% 90.0% 18 36.7% 40.0% 36.4% 36.1% 34.9% 33.0 16 32.4% 14.6 35.0% 35.0 31.4 31.4 31.4 31.7% 31.2 80.0% 14 12.8 12.7 13.2 30.0 2
Slide 12: Outlook for 2024
Outlook for 2024 (specified on October 24, 2024) Background for the outlook (specified) Growth • F-Secure expects the consumer cyber security market to grow mid-single digit CAGR F-Secure estimates that revenue for 2024 will between 2024-2026*. The growth may be moderated due to uncertainties we see
Slide 13: Delivering sustainable security experiences
Delivering sustainable security experiences Our ESG Commitments 2024 sustainability priorities 1 Legislative compliance 2 Transparency and value to stakeholders 3 Talent development, retention and acquisition 4 DEI and Fellow wellbeing 13
Slide 14: Focus areas in 2024
Focus areas in 2024 A leading security experience Accelerate profitable Deliver on #1 Security Stronger focus on Partner Optimize Direct Business growth to fund further Experience vision on Business and Tier 1 revenue and profit growth investments product and service offering partnerships as a new f
Slide 15: Thank you!
Thank you! Next up: F-Secure Investor Day 2024: Wednesday 20 November 2024 at 12:00 EET F-Secure headquarters in Helsinki, Finland Welcome!
Slide 16: F-Secure
¢: F-Secure
Slide 17: Scam Protection takes off
Scam Protection takes off Interim Report 1 January–30 September 2024 Timo Laaksonen CEO Sari Somerkallio CFO
Slide 18: Q3/2024: Scam Protection takes off
Q3/2024: Scam Protection takes off Revenue growth 3.5%, growth supported by good performance in the Direct Business while Partner Business continued to develop at a similar pace as in the previous quarter. Strong profitability in the third quarter, benefiting from the typically lower cost levels ass
Slide 19: Q3/2024: Partner Business focus continued
Q3/2024: Partner Business focus continued Increase average revenue Developing current offering Expand into new channels per user (ARPU) and new products and partners Strategic focus: Accelerate the roll-out Compelling portfolio expanding market Replicate our proven business model of F-Secure Total c
Slide 20: F-Secure strategy journey
F-Secure strategy journey To become the #1 security experience company in the world 2025+ 2024 2023 CSP Leadership Be the undisputed leader among world’s leading Communications 2022 Service Providers Tier 1 ramp-up Total Embedded Security portfolio Total New Tier 1 partnerships Year of Total Lookout
Slide 21: Transforming to a customer centric business model
Transforming to a customer centric business model Strategic Partners Major Partners Commercial Partners Direct Business SEGMENT BUSINESS World’s largest Service Providers Leading regional Service Providers Large volume of popular Service (SP’s) Providers Increase Total adoption among partners’ user
Slide 22: Scam Protection module
Shopping Protection Mobile Desktop Scam Protection module Shopping Protection works in the browser showing trust rating of online stores while browsing. Available on all platforms, now also in native mobile browsers. Banking Protection Mobile Desktop Banking Protection works in the browser showing t
Slide 23: SMS Scam Protection
SMS Scam Protection Supported on both iOS and Android Press release Oct 23, 2024 23
Slide 24: Recent changes in the F-Secure leadership team
Recent changes in the F-Secure leadership team Bruno Rodriguez Nina Lehto Kaisa Tikka-Mustonen Chief Revenue Officer Senior Vice President, Services Chief People Officer 24
Slide 25: Financials
Financials Sari Somerkallio, CFO
Slide 26: Revenue up by 3.5%, organic growth 1.9%
Revenue up by 3.5%, organic growth 1.9% Currency neutral organic growth 3.6% Revenue by geography • Partner Channel: Revenue increased by 3.0% to EUR 29.3 million EURm (EUR 28.5 million). Organic revenue growth 2.3%. Currency neutral +3.5% Change % % • Subscriber numbers and average revenue per user
Slide 27: Q3 2024: Group revenue up by 3.5%
Q3 2024: Group revenue up by 3.5% Growth supported by Direct Business while Partner Business on a similar pace as in the previous quarter Partner channel revenue Direct channel revenue Deferred revenue* EURm EURm EURm -2.5% +3.0% 27.9 30.1 29.4 29.4 29.3 25.6 25.9 28.5 25.2 22.8 7.4 6.6 5.8 6.4 6.5
Slide 28: Operating expenses in Q3/2024
Operating expenses in Q3/2024 OPEX* development in Q3 EURm • Operating expenses decreased – the -10.7% OPEX, lower cost structure typical for the third % of revenue quarter was reflected in the operating 18.6 expenses. 16.6 • Sales and marketing expenses 3.3 9% (9%) decreased following lower marketi
Slide 29: Gross margin and adjusted EBITA development
Gross margin and adjusted EBITA development Q3 profitability strong, benefiting from the typically lower cost levels associated with this period Gross margin Adjusted EBITA and adjusted EBITA margin EURm EURm 45.0 20 45.0% 40.3% 89.4% 89.4% 40.0 85.7% 85.9% 86.4% 90.0% 18 40.0% 36.4% 36.1% 34.9% 33.
Slide 30: January−September 2024: Revenue +16.9%, organic growth +2.4%
January−September 2024: Revenue +16.9%, organic growth +2.4% Revenue by geography Revenue by channel Adjusted EBITA EURm EURm EURm +16.9% +16.9% 109.2 109.2 +23.1% 93.5 93.5 7.7 +36.1% 40.5 21.0 37.1% 32.9 5.7 +14.2% 35.2% 34.1 +59.2%* 18.4 21.4 14.6 12.8 -1.0%* 36.4 36.1 88.2 +17.5% 13.2 75.1 9.9 +
Slide 31: Year-to-date cash conversion stronger than previous year
Year-to-date cash conersion stronger than previous year Operating cash flow and cash conversion (QTD) 141.2% 150.0% 20.0 124.5% • Third quarter cash conversion rate was 108.1% 16.8 40.5% (66.1%), mirroring the strong 100.0% 82.5% 78.8% 63.3% cash conversion in the second quarter 66.1% 15.0 of 2024.
Slide 32: Deleveraging continues
Deleveraging continues Net Debt / Net cash and Leverage1) Equity ratio, % 14.4% 12.0% 12.6% 11.7% 325 3.6 3.8 10.0% 3.5 3.5 3.6 275 3.2 3.4 3.1 3.2 Leverage target: 2.5x 3.0 225 187.7 179.6 2.8 177.4 175 166.6 165.4 2.6 Q3/23 Q4/23 Q1/24 Q2/24 Q3/24 2.4 125 2.2 2.0 1.8 Earnings per share, EUR1) 75 1
Slide 33: Outlook for 2024
Outlook for 2024 (specified on October 24, 2024) Background for the outlook (specified) Growth • F-Secure expects the consumer cyber security market to grow mid-single digit CAGR between F-Secure estimates that revenue for 2024 will be 2024-2026*. The growth may be moderated due to uncertainties we
Slide 34: Financial calendar
Financial calendar F-Secure Investor Day 2024: Wednesday 20 November 2024 at 12:00 EET F-Secure headquarters in Helsinki, Finland Welcome!
Slide 35: Q&A
[\2 F-Secure. Q&A