F-secure Oyj · OMXHEX:FSECURE
F-secure Oyj — Investor Day (September 2023)
72 slides from F-secure Oyj's investor day presentation, Sep 20, 2023
Slide 1: Stronger Together
Stronger Together Investor Day 2023 20 September 2023
Slide 2: Agenda
Agenda 13:00–13:30 Sense of security for all Timo Laaksonen, President and CEO 13:30–14:10 Creating the #1 security experience TL Viswanathan, Chief Product Business Officer Steven Offerein, Vice President, Portfolio Management 14:10–14:35 Technology research and development Toby White, Chief Techno
Slide 3: F-Secure Investor Day – our speakers today
F-Secure Investor Day – our speakers today President & CEO Chief Product Business Officer Vice President, Portfolio Chief Financial Officer Chief Technology 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: Sense of security for all
Sense of security for all Timo Laaksonen President and CEO Investor Day 2023 6
Slide 7: Bringing sense of security ubiquitously to digital moments
Bringing sense of security ubiquitously to digital moments
Slide 8: Megatrends driving our vision
Megatrends driving our vision Vulnerable digital moments Complexity overload Rise of Generative AI 8
Slide 9: Sense of security for all
Sense of security for all 20-Sep-23 Classification 9
Slide 10: Growth fundamentals
Growth fundamentals Addressable Market 1) Tier 1 and new vertical partnerships 2) Best partner experience Value Increase 1) Total conversion 2) Embedded experiences Aspirational Culture 1) Global growth mindset 2) Agility 10
Slide 11: Expanding market reach
Expanding market reach 1 Billion+ Partner Business Addressable Consumers by 2026 Communication Service Providers Tier 1 Tier 2 + New Verticals Fintech and Banking and Insurtech Insurance Direct Business eCom AppStores 11
Slide 12: Substantial value potential in Total conversion
Substantial value potential in Total conversion Partner Business revenue – security apps Other 18% 24% ARPU 1x Total ready 64% 76% ARPU 1.2x – 2x Total 18% 2023* 2026 aspiration * Current indicative view 12
Slide 13: Partner testimonial: Embedded Security
Partner testimonial: Embedded Security Danny Chua, Touch 'n Go Digital 13
Slide 14: Superapps
Superapps Removing friction and expanding market reach By 2027, more than 50% of the global population will be daily active users of multiple superapps* * Gartner’s Top Tech Trends for 2023, Sep 28, 2022 14
Slide 15: Best partner experience
Best partner experience Expanding partner engagement models Segment size Partner specific solution Tier 1 sales, delivery and operations Tier 1s Tens Tier 2 Hundreds Configurable standard offering Tier 3+ Thousands Automated integration, delivery and go-to-market support 15
Slide 16: Stronger together with Lookout Life
Stronger together with Lookout Life Right to win Agility and growth Rapid product mobile centric and mindset convergence Tier 1 partners 16
Slide 17: A global company
A global company 525 fellows 46 nationalities Half of the Fellows in 17 leadership team countries from outside Finland Significant presence in Customers in Finland, USA, >100 countries Malaysia and India 17
Slide 18: Journey to becoming the security experience leader
Journey to becoming the security experience leader 2023 2024 2025 2026 Total Agility No.1 Security Experience Tier 1 Partner Excellence 18
Slide 19: Q&A
f F-Secure. Q&A
Slide 20: Creating the #1 security experience
Creating the #1 security experience TL Viswanathan Chief Product Business Officer Investor Day 2023 20
Slide 21: What are we solving?
What are we solving? Complexity overload Vulnerable digital moments Sense of security 75% worry about online 66% 57% safety find cyber willing to pay security too for more simple complex experiences 40% value all-in-one online protection for all devices Simplicity Protecting from Scams Holistic Sour
Slide 22: Holistic scam protection for digital moments
Holistic scam protection for digital moments At home & on-the move, across connected device Scams are the most common form of cyber crime Example of holistic scam protection SMS scams 12% Targeted phishing messages ✓ ✓ Call scam 11% ID monitoring, SMishing Cyber help protection Malware and viruses 8
Slide 23: Comprehensive portfolio with flexible delivery models
Comprehensive portfolio with flexible delivery models Total Embedded Security Protection delivered through F-Secure experience F Secure assets built in to applications, routers* and networks as SDKs or APIs F-Secure Co-branded for branded Partners AT&T Active Armor Superapp with ID Operator/WiFi app
Slide 24: Executing on growth strategy
Executing on growth strategy Value Completeness of protection Total Embedded Security* • Total launched in February 23 • Positive ARPU development • 18% of Partner revenue – security apps** • Converging the best of Lookout Life with Total Access to Scale Consumers 24 * Includes Sense & DNS ** Curren
Slide 25: Executing on growth strategy
Executing on growth strategy Value Completeness of protection Total Embedded Security* • Embedded portfolio accelerated with Lookout Life • Active Tier 1 CSP engagements • Breakthrough with Fintech (Superapps) • Expanding partner ecosystem with access to > 150Mn routers Access to Scale Consumers * I
Slide 26: Delivering on the experience promise
Delivering on the experience promise Steven Offerein Vice President, Portfolio Management Investor Day 2023 26
Slide 27: Trusted companion led consumer security experience
Trusted companion led consumer security experience Consumer experience vision Vision Goal #1 Security Become the Experience Trusted Companion Value Protect Engage Empower elements 27
Slide 28: Stronger together: delivering the #1 security experience
Stronger together: delivering the #1 security experience F-Secure Total Trusted security Lookout Life companion Modularity & partner-centricity Customer engagement 28
Slide 29: Delivering the #1 Customer Experience
Delivering the #1 Customer Experience Example: Trusted Shopping 29
Slide 30: Delivering proven business outcomes
Delivering proven business outcomes
Slide 31: Security business-as-a-service
Security business-as-a-service Partner experience vision Products Go-To-Market models Vision Goal #1 Security Become the Experience Trusted Companion Business Support Platform Value Flexible solutions Customer Security Business elements and GTM models Engagement Expertise 31
Slide 32: Partnering models deliver economies of scale
Partnering models deliver economies of scale Off-the-shelf Solutions Partnership model Engagement A B C D Partner Customer F-Secure Business Platform F-Secure lead Partner lead customer experience customer experience 32
Slide 33: Delivering the #1 Partner Experience
Delivering the #1 Partner Experience Example: App Builder 33
Slide 34: Q&A
f F-Secure. Q&A
Slide 35: Technology Research and Development
Technology Research and Development Toby White Chief Technology Officer Investor Day 2023 35
Slide 36: Focused research activities
Focused research activities ✓ ✓ 1. Mapping the 4. Contextual scam landscape holistic protection 2. Defense in depth ✓ ✓ 3. Personalized threat profile 36
Slide 37: Three primary development themes
Three primary development themes Convergence and capabilities F-Secure Lookout Converged portfolio Partner experience Customer experience Modular configuration Product instrumentation Product and SDKs F-Secure Resilience and Flexible architecture Lookout cost efficiency Tier-1 SLA expectations Partn
Slide 38: Transitional service agreement cost development
Transitional service agreement cost development WithSecure Technology 2022 2023 Temporary Services Agreement: Support and development help to migrate knowhow and IP Lookout Platform Services Agreement: 2023 2024 Support and development help to migrate knowhow and IP Lookout Security Services 2023 20
Slide 39: Q&A
f F-Secure. Q&A
Slide 40: Break
Break Presentation continue at 14:50
Slide 41: Positioning for growth
Positioning for growth Timo Laaksonen President and CEO Investor Day 2023 41
Slide 42: Demand for sense of security
Demand for sense of security Complex threat landscape Opportunity to capitalize on sense of security Source: https://www.washingtonpost.com/technology/2023/03/05/ai-voice-scam/ 42
Slide 43: News from the field
News from the field What do our customers and partners ask for As Seen Through Consumer Eyes As Seen Through Partner Eyes 1. Simple and easy to use 1. Security provider that protects and delights customers 2. Complete protection 2. Differentiated solutions 3. Sense of security 3. Business outcomes 4
Slide 44: Macroeconomics impacting Direct Business
Macroeconomics impacting Direct Business Consumer confidence 2023 Direct Business current state US 54 • Investments adjusted to reflect consumer confidence Netherlands 51 • ARPU positively impacted by price changes leading Belgium 48 to higher subscription tiers Germany 47 UK 47 • New subscription s
Slide 45: Partner testimonial: Telia Group
Partner testimonial: Telia Group Timothy Boyd, Telia Group 45
Slide 46: Partner Business Total conversion status
Partner Business Total conversion status Total roll-out status Factors impacting conversion 62 • Partners receptive to enhanced value proposition and upside opportunity In Deployment • Proven business outcomes based on global best practices • Technically easy to roll-out Live • Partner reticence to
Slide 47: Partner testimonial: Tier 1 Partner
Partner testimonial: Tier 1 Partner Matt Bailey, AT&T 47
Slide 48: Capturing the Tier 1 opportunity
Capturing the Tier 1 opportunity Massive increase to our consumer reach Major brands Assets and “right to win” Scaling with Tier 1 seek competitive after Lookout Life acquisition references differentiation Market making power Reference value in new partner acquisition 48
Slide 49: Complementing physical well-being with digital security – Allianz Cyber Care
Complementing physical well-being with digital security – Allyz Cyber Care © Copyright Allianz Partners 52
Slide 50: New vertical partnerships
New vertical partnerships Value proposition validated, gaining traction, generating revenue 2023 progress as planned Channel insights Future outlook • Big brands seeking cyber security • Lookout Life acquisition strengthens to complement offering offering • Long time-to-market • Insurtech and Fintec
Slide 51: Partner testimonial: Sense ecosystem partner
Partner testimonial: Sense ecosystem partner Justin Doucette, Nokia 51
Slide 52: Building scale with Embedded Security
Building scale with Embedded Security Holistic value proposition Value High Total • Cross selling Embedded Security to existing Lookout Life partners Cross- Embedded Security selling SDKs/APIs embedded partner’s • Ecosystem partnerships like Nokia customer experience provide scale and fast time-to-
Slide 53: Why we win
Why we win 1 billion+ servings per container Serving size 1 Value per serving Sense of Security % of Daily Value Complete portfolio 100% Solution delivery 100% Partner DNA 100% Business outcomes 100% Multi-channel 100% All organic, no preservatives 53
Slide 54: Q&A
f F-Secure. Q&A
Slide 55: Towards 2026
Towards 2026 Sari Somerkallio Chief Financial Officer Investor Day 2023 55
Slide 56: Why invest in F-Secure?
Global leader in the Communication Service Provider (CSP) channel Consumer cyber security Positioned for growth in is a large and growing North America – the largest market opportunity consumer security market Why invest in F-Secure? Scalable, highly profitable SaaS business Expanding market reach t
Slide 57: Strong cash flow creates shareholder value
Strong cash flow creates shareholder value Leverage Strengthen balance Net debt/Adjusted EBITDA ratio below 2.5x, excluding temporary sheet through focus impact from acquisitions on de-leveraging • Leverage in H1/2023 3.5x due to the acquisition of Lookout Life • Interest payments due to the debt ta
Slide 58: Lookout Life synergies and integration status
Lookout Life synergies and integration status Synergies are as communicated previously, good progress on integration Enhanced revenue Integration status growth potential • Rapid product portfolio integration, already in motion Growth • Technology transfer and integration proceeding as per plan EUR 1
Slide 59: Outlook 2023
Outlook 2023 Updated September 8, 2023 Growth F-Secure estimates that revenue for 2023 will be in the range of EUR 128–132 million. Background for the outlook • F-Secure expects the cyber security market to grow in 2023, although we see Profitability strong price sensitivity among the consumers, in
Slide 60: We’re committed to keeping people and society safe
We’re committed to keeping people and society safe Protecting digital moments Responsible business Fellow experience 60
Slide 61: Increasing visibility to ESG related activities
Increasing visibility to ESG related activities F-Secure carbon emissions 2022 4,268t CO2 = ~ 200 X Average sized Finnish family’s emissions *Illustrative, F-Secure management estimate based on family characteristics in Finland 61
Slide 62: Future reporting intentions to promote transparency
Future reporting intentions to promote transparency • Historical illustrative financial information for Q3/2022–Q2/2023 • Organic growth: will continue to report as long as it is relevant for comparison purposes, i.e. Q2/2024 • In case cross-selling becomes significant before that, might need to rec
Slide 63: Geographical revenue split: revenue by country
Geographical revenue split: revenue by country Indicative revenue split from external customers, based on situation after Lookout Life integration Nordic Countries Rest of Europe 3.5 MEUR Others 6% Denmark 6% Germany Others 12% 23% 30% 28% 19.9 MEUR Sweden 17% 64% Finland 10% 22% 24.1 MEUR Netherlan
Slide 64: Comprehensive portfolio with flexible delivery models
Comprehensive portfolio with flexible delivery models Total Embedded Security Protection delivered through F-Secure experience F Secure assets built in to applications, routers* 16% and networks as SDKs or APIs Others (Embedded) App Based (Security Suite) F-Secure Co-branded for branded Partners 84%
Slide 65: Channel specific revenue data
Channel specific revenue data Indicative split, based on situation after Lookout Life integration Direct Business revenue Partner Business revenue Deferred revenue by channel, end of Q2/2023* 22% 24% 21% 20% 59% 76% 78% Renewal sales New sales Revenue from the period Direct Partner excl. Retail Reta
Slide 66: Towards medium-term financial targets 2026
Towards medium-term financial targets 2026 Key growth levers Evolving go-to-market Total conversion Best partner experience channels and offering Net debt / adjusted Total revenue of more After initial growth Dividend yield EBITDA ratio below Targets 2026 than investments, adjusted around or above 5
Slide 67: Q&A
f F-Secure. Q&A
Slide 68: Closing words
Closing words Timo Laaksonen President and CEO Investor Day 2023 68
Slide 69: Highlights of our message today
Highlights of our message today F-Secure to become the #1 security experience company in the world Strategy remains valid Increased focus on Tier 1 Accelerating delivery partnerships on experience promise 69
Slide 70: Q&A
t F-Secure. Q&A
Slide 71: Thank you for joining us today!
Thank you for joining us today! Next up:
Slide 72: Slide 72