F-secure Oyj · OMXHEX:FSECURE
F-secure Oyj — Q3 2019 Earnings Presentation
18 slides from F-secure Oyj's earnings presentation, 2019
Slide 1: Corporate security revenue grew 14% organically in third quarter
CORPORATESECURITY REVENUEGREW14% ORGANICALLYINTHIRD QUARTER Q3/2019 Samu Konttinen, President & CEO 1
Slide 2: Key takeaways from Q3
KEY TAKEAWAYS FROM Q3 Corporate cyber security continued to grow • Corporate security grew 14% from previous year • Endpoint protection on stable growth track • Managed Detection and Response (MDR) solutions had a strong quarter, won significant deals against top competitors • Cyber security consult
Slide 3: Key financial highlights
KEY FINANCIAL HIGHLIGHTS EUR m 7-9/2019 7-9/2018 Change 1-9/2019 1-9/2018 Change 1–12/2018 Revenue 53.8 50.5 7% 161.2 137.0 18 % 190.7 Consumer security 23.4 23.8 -1 % 71.4 70.9 1% 94.9 Corporate security 30.3 26.7 14 % 89.8 66.1 36 % 95.9 Adjusted EBITDA1 6.8 6.0 15 % 16.6 12.6 32 % 17.4 % of reven
Slide 4: Corporate security products revenue grew 11% in Q3
CORPORATE SECURITY PRODUCTS REVENUE GREW 11% IN Q3 (1-9/2019, EUR m) Revenue comparison Revenue from endpoint security remains on stable growth track Q3 +11% Q2 • Good renewal performance in EPP and growing volumes of EDR +17% Q1 sold as integrated to EPP 54.2 • New customer acquisition soft in Finl
Slide 5: F-Secure detection and response capabilities outshone competitors in 3rd party evaluation
F-SECURE DETECTION AND RESPONSE CAPABILITIES OUTSHONE COMPETITORS IN 3RD PARTY EVALUATION MITRE ATT&CK evaluation, Simple Scores by Forrester Research1 376 • Clear first place in MITRE ATT&CK evaluations for MDR 329 EDR solutions • Evaluation tool developed 288 285 independently by third party Ø 284
Slide 6: Cyber security consulting revenue grew 18% in Q3
CYBER SECURITY CONSULTING REVENUE GREW 18% IN Q3 (1-9/2019, EUR m) Revenue comparison Cyber security consulting revenue continued to grow strongly Q3 +18% • Cyber security consulting revenues continued to grow well in our Q2 largest markets UK and Nordics +81% Q1 • Singapore performance particularly
Slide 7: Globally operating multi-disciplinary consulting organization
GLOBALLY OPERATING MULTI-DISCIPLINARY CONSULTING ORGANIZATION Consulting capability: example customer cases GEOGRAPHY LOCATION CUSTOMER VERTICAL CASE TYPE LOCATION CUSTOMER VERTICAL CASE TYPE UK Multi-National Insurance Group Defence Practice Enhacements FIN, DK Maritime Assessments 11 4 UK Critical
Slide 8: Consumer security – Q3 at previous year's level
CONSUMER SECURITY – Q3 AT PREVIOUS YEAR’S LEVEL (1-9/2019, EUR m) Revenue comparison Revenue from the operator channel on previous years’ level Q3 -1% • Moderate increase of product activation rates Q2 • Positive sentiment around F-Secure Sense and upcoming +1% Q1 product launch of Identity Protecti
Slide 9: Restructuring to better serve different customer segments in various channels
RESTRUCTURING TO BETTER SERVE DIFFERENT CUSTOMER SEGMENTS IN VARIOUS CHANNELS (1-9/2019 Revenue, EUR m) CORPORATE SECURITY CYBER SECURITY CONSUMER SECURITY PRODUCTS CONSULTING PRODUCTS 54,2M€ 35,6M€ 71,4M€ 22% 34% 44% Suite of endpoint products F-Secure Global multi-disciplinary organization Operato
Slide 10: New organization enables further growth and better customer focus
NEW ORGANIZATION ENABLES FURTHER GROWTH AND BETTER CUSTOMER FOCUS (New organization structure) Corporate Cyber Security • MWR integration finalization Consumer Security Business Managed Detection and Consulting • New organization for Security Response clearer customer focus • Simplify organization t
Slide 11: New leadership team and responsibilities
NEW LEADERSHIP TEAM AND RESPONSIBILITIES (Leadership team as of 7th October 2019) Samu Konttinen Kristian Järnefelt Eva Tuominen President and CEO EVP, Consumer Cyber Security EVP, People Operations & Business Unit Culture Member of the Leadership Team Member of the Leadership Team Member of the Lea
Slide 12: Future outlook unchanged
FUTURE OUTLOOK UNCHANGED Outlook for 2019 Outlook for 2018-2021 • Revenue from corporate security is expected to • The demand for corporate cyber security products grow by over 30% compared to 2018 and services is expected to grow strongly. F-Secure • Revenue from consumer security is expected to ai
Slide 13: Appendix
APPENDIX 13
Slide 14: F-Secure's 1-9/2019 in brief
F-SECURE’S 1-9/2019 IN BRIEF (1-9/2019, EUR m) Revenue split by business Revenue split by geography Adj. EBITDA (incl. IFRS 16) Cyber Security Consulting +81% Nordics +10% North America +14% Q3 Corporate Products +17% Rest of Europe +19% Other Regions +41% Q2 Consumer Security +1% Q1 16.6 +18% +18%
Slide 15: Adjusted EBITDA development
ADJUSTED EBITDA DEVELOPMENT (Q1/2018 – Q3/2019, EUR m) Adjusted EBITDA M&A costs Reported EBIT (excl. one-offs) IFRS 16 Depreciation D&A (excl. IFRS 16) Adjusted EBITDA margin, % 13% 12% In Q2/19 positive EBIT impact of EUR 3.1m from revision of acquisition valuation excluded 9% 9% 9% 9% 6.8 6.0 1.6
Slide 16: Deferred revenue grew by 2%
DEFERRED REVENUE GREW BY 2% (1-9/2019, EUR m) Deferred revenue, non-current (EUR m) Deferred revenue, current (EUR m) +2% 72.9 71.4 71.0 69.0 70.2 17.6 17.5 18.2 17.6 18.6 55.3 53.9 52.8 52.6 50.5 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 16
Slide 17: Good cash flow from operating activities in Q3/19
GOOD CASH FLOW FROM OPERATING ACTIVITIES IN Q3/19 (Cash flows from operating activities, 1-9/2019, EUR m) 9.6 • Cash flow from operations increased by EUR 4.9 million and was EUR 2.3 million 8.3 (-2.6m) • Group result excluding non-cash flow impacting adjustments such as PPA amortizations improved g
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