CORPORATE SECURITY GROWTH CONTINUES Christian Fredrikson, CEO 5 - - PowerPoint PPT Presentation

▶
corporate security
SMART_READER_LITE
LIVE PREVIEW

CORPORATE SECURITY GROWTH CONTINUES Christian Fredrikson, CEO 5 - - PowerPoint PPT Presentation

Aug 22, 2023 365 likes •646 views

F-Secure Corporation Interim Report Q4/2015 HIGH DEMAND FOR CYBER SECURITY SERVICES, CORPORATE SECURITY GROWTH CONTINUES Christian Fredrikson, CEO 5 February 2015 1 AGENDA Highlights from Q4 and FY2015 Market review Business

slide-1
SLIDE 1

HIGH DEMAND FOR CYBER SECURITY SERVICES, CORPORATE SECURITY GROWTH CONTINUES

F-Secure Corporation Interim Report Q4/2015 Christian Fredrikson, CEO 5 February 2015

1

slide-2
SLIDE 2

AGENDA

  • Highlights from Q4 and FY2015
  • Market review
  • Business updates
  • Outlook
  • Financials

2

slide-3
SLIDE 3

WE’VE CHANGED THE WAY WE REPORT OUR REVENUE SPLIT

CONSUMER SECURITY CORPORATE SECURITY

OPERATORS DIRECT SALES RESELLERS CYBER SECURITY SERVICES

Operators 49% Other channels (Direct-to-consumer and Corporate security) 51%

Consumer security 61% Corporate security 39%

Old way New way

3

slide-4
SLIDE 4

FINANCIAL HIGHLIGHTS

October-December

  • Revenues 38.9M (+13%)
  • Consumer revenue 23.9M (+3.5%)
  • Corporate revenue 15.0M (+31%),
  • rganic and acquired
  • EBIT (non-IFRS) 5.9M, 15% of revenues

(6.2 M, 18%)

Full year 2015

  • Revenues 147.6M (+7%)
  • Consumer revenue 93.8M (+2%)
  • Corporate revenue 53.8M (+18%),
  • rganic and acquired
  • EBIT (non-IFRS) 22.3M, 15% of

revenues (23.3 M, 17%)

All figures for continuing operations, All figures in Euros 4

slide-5
SLIDE 5

OTHER HIGHLIGHTS

Strategy

  • F-Secure amended its strategy and confirmed becoming the leading European

cyber security company as its key target

Plan for dividend proposal

  • The Board plans to propose to the Annual General Meeting the distribution of a EUR

0.06 dividend and a EUR 0.06 extra dividend per share for 2015

Taxation

  • F-Secure has received debit decisions relating to foreign tax credits on withholding

taxes from 2009-2011 amounting to EUR 3.0 million added with late payment interest of EUR 0.9 million; F-Secure will appeal the decisions with the Tax Administration’s Board of Adjustment

5

slide-6
SLIDE 6

KEY FIGURES

Revenues

Eur million Eur million

Deferred revenues

EBIT (non-IFRS) calculated for continuing operations excluding costs associated with the deferred payment and earn-out of the nSense acquisition and non-recurring items

6 34,5 35,9 35,5 37,2 38,9 6,2 5,0 4,1 7,3 5,9 5 10 15 20 25 30 35 40 45 Q414 Q115 Q215 Q315 Q415

Revenues EBIT (non-IFRS)

43,0 44,9 44,8 43,5 48,1 10 20 30 40 50 60 Q414 Q115 Q215 Q315 Q415

Deferred revenue

slide-7
SLIDE 7

KEY FIGURES

Costs Net cash

Eur million Eur million 7 18,8 20,8 22,0 20,2 22,6 6,3 7,4 6,2 6,5 6,8 1,9 2,5 2,8 2,6 4,3 0,6 0,8 0,1 0,6 0,9 5 10 15 20 25 30 35 40 Q414 Q115 Q215 Q315 Q415

nSense transaction related items Non-recurring items Administration Reseach & Development Sales & Marketing

61,3 110,2 76,3 80,5 94,4 35,2 20 40 60 80 100 120 Q414 Q115 Q215 Q315 Q415

Cash position Dividend/ Other

slide-8
SLIDE 8

Enterprises Mid-Size Business Consumer

ADVANCED ATTACKS ARE DRIVING THE SECURITY TECHNOLOGY

Anthem (80 million people affected) Ashley Madison (37m) Office of Personnel Management (25m) Experian/T-Mobile (15m) Premera (11m) LastPass (7m) CareFirst (1,1m) The hacking team (1m) Slack (0,5m) Source: Forbes

Top breaches in 2015

8

slide-9
SLIDE 9

THE AMOUNT OF CONNECTED DEVICES IS EXPECTED TO EXPLODE

Number of connected devices Number of smartphones Number

  • f PCs

2015 2020 13B

2B

33B

2B

2,6B

6B

?

?

?

2030

Source: Juniper research, IDC research, Gartner

9

slide-10
SLIDE 10

SECURITY SERVICES AND CONSULTING ARE DRIVING THE FUTURE GROWTH

10 20 30 40 50 60 70 2014 2015 2016 2017 2018 2019 IT security services and consulting IT security products Consumer Security

20% 2% 5%

Source: Gartner

USD Bn 1

slide-11
SLIDE 11

Maximize the commercial impact of F-Secure’s technical expertise and multiple sales channels Overall corporate security focus in selected European markets and Japan

WE AIM TO BECOME THE LEADING EUROPEAN CYBER SECURITY COMPANY

Cyber Security Services focus in Northern Europe and selected verticals Consumer security aims for profitable growth

“We are recruiting

  • ver a hundred

new employees this year.”

11

slide-12
SLIDE 12

CORPORATE SECURITY IN Q4

GOOD QUARTER FOR THE RESELLER BUSINESS

  • Germany, Japan and North

America developed particularly well

  • Customer and seller satisfaction

(NPS) exceed or at par with levels of best competitors

  • All-time-high revenue in Q4

DEMAND FOR CYBER SECURITY SERVICES HIGH

  • Strong growth both year-on-

year (pro forma) and quarter-

  • n-quarter
  • Last quarter is typically

seasonally the strongest

  • Sales of Karhu, vulnerability

management tool, progressing well

INVESTING IN GROWTH CONTINUES

  • Recruiting sales people,

developers and cyber security consultants

  • Investments in sales in focus

countries continued

  • Advanced Threat Protection

product in development (see next slide)

12

slide-13
SLIDE 13

PREDICT PREVENT DETECT RESPOND

END-POINT & NETWORK SECURITY SUITES

Protection Service for Business

  • Device & server security
  • Mobile security
  • Central management
  • As a service

Business Suite

  • Device & server security
  • Virtual Security
  • Central management
  • On-premise

VULNERABILITY & PATCH MGMT

Karhu

  • Vulnerability scanning
  • Vulnerability management

Software Updater

  • Automatic patch management

ATTACK SURFACE ASSESSMENT

  • Threat level assessment
  • Attack surface mapping

SERVICES

  • Professional services
  • Consulting & coaching
  • For all areas of the security strategy

ADVANCED THREAT PROTECTION

[Expected in H1 / 2016] Incident detection & response service platform

  • Security monitoring & alerting
  • Incident response

ADVANCED THREAT PROTECTION A SOLUTION UNDER DEVELOPMENT

13

slide-14
SLIDE 14

CONSUMER SECURITY IN Q4

DIRECT-TO-CONSUMER DELIVERED GROWTH

  • Direct-to-consumer continues

to deliver growth driven by SAFE

  • Operator revenue flat, SAFE

roll-out continues with several

  • perators
  • New products (Freedome)

increase share of revenue

NEW SIGNIFICANT PARTNERSHIPS SIGNED

  • Global device manufacturers

ACER and TCL/Alcatel to preinstall Freedome in 2016

  • New retailer deals signed in

Nordics(Expert, Mediamarkt)

INVESTING IN NEW PRODUCTS

  • F-Secure Sense announced

in November at Slush

  • First deliveries expected in

the summer

14

slide-15
SLIDE 15

At home, traffic is routed through F-Secure SENSE…

Own or operator provided router Ethernet or Wi-Fi connection Ethernet or Wi-Fi connection F-Secure SENSE

… and outside the home, the Sense app provides security and privacy

15

slide-16
SLIDE 16

OUTLOOK FOR 2016

 F-Secure anticipates its

  • verall security revenues

to grow in 2016 compared to the year before (2015: EUR 148 million).  EBIT for continuing

  • perations is estimated to

be EUR 17-21 million (2015: EUR 20 million).

16 FURTHER DESCRIPTIONS In 2015 F-Secure gave its profitability guidance as EBIT (non-IFRS), in which the cost impact of the deferred payment and earn-out elements of the nSense acquisition were excluded. In 2016, the EBIT guidance includes an estimated EUR 3 million cost impact from these elements, hence the guided figure is not directly comparable to that given in 2015. Revenue growth is expected to continue especially in the Company's cyber security services, corporate security products (in particular Protection Service for Business) sold through the reseller channel, and direct-to- consumer sales of F-Secure’s multi-device security offering SAFE and the privacy product Freedome. Sales of consumer security through the operator channel are expected to remain largely flat. The revenue outlook is based on the sales pipeline at the time of this outlook, existing subscriptions and contracts, as well as current exchange rates. F-Secure is actively investing in the development and commercialization of several new products. The cost of development as well as expenses relating to commercial launches are likely to have an impact on the Company’s

  • verall profitability in the short to medium term while the revenues from the new products, including Sense for

the protection of smart homes and an advanced threat protection solution for enterprises, are difficult to estimate and may remain low. This cost impact has been taken into account in the Company’s profitability guidance and is in line with the Company’s principle to prioritize growth over short-term profitability.

slide-17
SLIDE 17

FINANCIALS Q4 / 2015

slide-18
SLIDE 18

As of the beginning of 2015 the personal cloud storage business (younited), which was sold to Synchronoss Technologies in February, is reported as discontinued operations. Consequently, comparison figures related to the statement of income have been restated. Comparison figures in the text refer to continuing operations only and the corresponding period of the previous year, unless otherwise stated. As of 2 June 2015 the acquired cyber security services business (nSense) has been consolidated into the F-Secure Group accounts.

18

slide-19
SLIDE 19

REVENUES

19 EURm

Q4 Revenues increased by 13% y-o-y

  • Total quarterly revenues 38.9m (Q414: 34.5 m)
  • Revenues from consumer security increased by

3.5% and were EUR 23.9 million (23.1 m)

  • Revenues from corporate security increased by

31% totaling EUR 15.0 million (11.5 m) 2015 Full year revenues increased by 7% y-o-y

  • Total annual revenues 147.6m (137.4 m)
  • Revenues from consumer security increased by

2% and were EUR 93.8 million (91.9 m)

  • Revenues from corporate security increased by

18% totaling EUR 53.8 million (45.5 m)

34,5 35,9 35,5 37,2 38,9 6,2 5,0 4,1 7,3 5,9 5 10 15 20 25 30 35 40 45 Q414 Q115 Q215 Q315 Q415

Revenues EBIT (non-IFRS)

slide-20
SLIDE 20

REVENUE SPLIT

20 11,5 12,0 12,7 14,0 15,1 23,1 23,9 22,8 23,2 23,9 0,0 5,0 10,0 15,0 20,0 25,0 30,0

2014 Q4 2015 Q1 2015 Q2 2015 Q3 2015 Q4

New revenue split

Corporate Total Consumer Total

18,8 19,6 18,6 18,7 19,2 15,7 16,4 16,9 18,6 19,8 0,0 5,0 10,0 15,0 20,0 25,0 2014 Q4 2015 Q1 2015 Q2 2015 Q3 2015 Q4

Old revenue split

Operator Other channels

EURm EURm

F-Secure has decided to change its reporting on revenue. As of Q4 2015, the revenue split will be reported between consumer security revenue (including operator and direct-to-consumer businesses) and corporate security revenue (including corporate reseller and cyber security services business). The previous split between operator and non-operator businesses is used in parallel with the new revenue reporting in this Q4 2015 interim report, but will be discontinued thereafter.

slide-21
SLIDE 21

6,2 5,0 4,1 7,3 5,9 0% 5% 10% 15% 20% 25% 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 Q414 Q115 Q215 Q315 Q415

EBIT (non-IFRS) EBIT (non-IFRS) %

PROFITABILITY

21

Q4 Operating Profit

  • EBIT (non-IFRS) 5.9m, 15% of revenues (Q414:

6.2m, 18%)

  • EBIT (IFRS) 5.0m, 13% (Q414: 5.6m, 16%)
  • Earnings per share for continuing operations

EUR 0.00 (EUR 0.03)

  • Earnings per share EUR 0.00 (EUR 0.03)

2015 Full year Operating Profit

  • EBIT (non-IFRS) 22.3m, 15% of revenues

(23.3m, 17%)

  • EBIT (IFRS) 20.0m, 14% (22.3m, 16%)
  • Earnings per share for continuing operations

EUR 0.08 (EUR 0.12)

  • Earnings per share EUR 0.14 (EUR 0.10)

EURm

slide-22
SLIDE 22

COSTS

Q4 costs Costs 33.8m (Q414: 27.6m), +22% y-o-y

  • The increase is mainly related to personnel

related expenses, external services and costs incurred by the acquired nSense business

  • Depreciations from past capitalized expenses

decreased to 1.4m (Q414: 2.0m)

  • Capitalized R&D expenses were 0.8m (Q414:

0.7m) 2015 Full year costs Costs 126.0m (109.7m), +15% y-o-y

  • The increase is mainly related to personnel

related expenses, external services, costs incurred by the acquired nSense business and investments in sales and marketing activities

  • Depreciations from past capitalized expenses

decreased to 5.9m (7.9m)

  • Capitalized R&D expenses were 2.3m (2.3m)

EURm 22 18,8 20,8 22,0 20,2 22,6 6,3 7,4 6,2 6,5 6,8 1,9 2,5 2,8 2,6 4,3 0,6 0,8 0,1 0,6 0,9 5 10 15 20 25 30 35 40 Q414 Q115 Q215 Q315 Q415

nSense transaction related items Non-recurring items Administration Reseach & Development Sales & Marketing

slide-23
SLIDE 23

DEFERRED REVENUES

  • Q4 Deferred revenues increased to 48.1m (43.0m)

EURm 23 30,1 29,1 27,7 29,6 35,2 33,4 31,0 32,0 33,5 30,9 32,5 36,0 8,8 8,7 8,5 9,2 4,7 6,5 7,3 11,0 11,3 13,9 11,1 12,1 10 20 30 40 50 60 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415

Deferred revenue, current Deferred revenue, non-current

slide-24
SLIDE 24

SOLID CASH POSITION

  • Solid operational cash flow in Q4
  • Cash flow from operations 14.3m* (Q414:

11.6m)

  • Market value of liquid assets on

31 December 94.3m (Q414 : 61.3m)

EURm

* Including discontinued business

24 61,3 110,2 76,3 80,5 94,4 35,2 20 40 60 80 100 120 Q414 Q115 Q215 Q315 Q415

Cash position Dividend/ Other

slide-25
SLIDE 25

NUMBER OF PERSONNEL

  • Number of personnel 926 (Q414: 921) at the end of the quarter

25 469 434 493 490 500 325 274 273 279 279 127 133 135 144 147 100 200 300 400 500 600 700 800 900 1000 Q414 Q115 Q215 Q315 Q415

Sales and Marketing Research and Development Administration

slide-26
SLIDE 26

REGIONAL REVENUE

% of revenue 26 34% 46% 8% 12% 36% 40% 9% 15% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Nordic Rest of Europe North America Rest

10-12/2014 10-12/2015