Profitability improved further, revenue at the previous year’s level
Highlights of July-September (Q3)
- Revenue remained at previous year’s level, and was
EUR 54.5 million (53.8m) - Revenue from corporate security decreased by 3% to
EUR 29.5 million (30.3m) - Revenue from consumer security increased by 7% to
EUR 25.0 million (23.4m) - Adjusted EBITDA was
EUR 11.0 million (6.8m), 20.2% of revenue (12.7%) - EBIT was
EUR 6.9 million (2.5m), 12.7% of revenue (4.7%) - Earnings per share (EPS) was
EUR 0.03 (EUR 0.01 ) - Cash flow from operating activities before financial items and taxes was
EUR 7.9 million (3.7m) F-Secure issued a new financial outlook for 2020 on15 October 2020
Highlights of January- September
- Revenue remained at previous year’s level, and was
EUR 162.3 million (161.2m) - Revenue from corporate security remained at previous year’s level, and was
EUR 88.1 million (89.8m) - Revenue from consumer security increased by 4% to
EUR 74.2 million (71.4m) - Adjusted EBITDA was
EUR 28.4 million (16.6m), 17.5% of revenue (10.3%) - EBIT was 16.5 million (6.4m), 10.2% of revenue (4.0%)
- Earnings per share (EPS) was
EUR 0.06 (EUR 0.02 ) - Cash flow from operating activities before financial items and taxes was
EUR 28.9 million (10.3m) F-Secure issued a new financial outlook for 2020 on15 October 2020
In 2020 there are no changes to accounting principles impacting comparability to the previous year.
Figures in this report are unaudited. Figures in brackets refer to the corresponding period in the previous year, unless otherwise stated.
Outlook
F-Secure’s outlook for 2020
- Revenue from corporate security products is expected to grow compared to 2019
- Revenue from cyber security consulting is expected to decrease compared to 2019
- Revenue from consumer security is expected to grow compared to 2019
- Adjusted EBITDA is expected to be above
EUR 33 million
CEO
During the third quarter F-Secure’s revenue remained at the previous year’s level and reached
In Q3, the growth with the Managed Detection and Response (MDR) solutions continued as we won several new deals in
The endpoint security business continued to grow slightly excluding the impact from discontinued products. I am delighted that the positive new sales performance stems from all of our main markets in
Cyber security consulting was still impacted by the COVID-19 pandemic, which led to a reduction in revenue from the previous year’s level. Significant regional variations in revenue continued, while the overall sentiment has improved from the spring as clients are increasingly getting accustomed to the new remote ways of working. The pandemic still casts a shadow on the short term predictability of the business, however in the long term we find the market attractive for profitable growth.
Consumer security grew from the previous year, which was driven by both the operator channel and direct business. The growth in consumer security derives from our core solutions F-Secure SAFE and TOTAL and also from the new deals signed in US and
On a personal level, the third quarter closes a chapter in my life as I will pass on the torch to F-Secure’s next CEO. I am proud to leave behind a great company that has transformed from an endpoint protection vendor to a cyber security specialist with a broad set of products and services. As a result, the company of today stands tall and protects our consumer and business customers better than ever before. Lastly, I want to thank all the Fellows from the past 15 years that I have been a part of
Financial performance
EUR m | 7-9/2020 | 7-9/2019 | Change % | 1-9/2020 | 1-9/2019 | Change % | 1-12/2019 |
Revenue | 54.5 | 53.8 | 1 % | 162.3 | 161.2 | 1 % | 217.3 |
Consumer security | 25.0 | 23.4 | 7 % | 74.2 | 71.4 | 4 % | 94.8 |
Corporate security | 29.5 | 30.3 | -3 % | 88.1 | 89.8 | -2 % | 122.5 |
Products | 18.5 | 18.4 | 1 % | 55.5 | 54.2 | 2 % | 72.5 |
Consulting | 10.9 | 11.9 | -8 % | 32.6 | 35.6 | -9 % | 50.0 |
Cost of revenue | -11.8 | -12.6 | -6 % | -35.8 | -37.7 | -5 % | -50.5 |
Gross Margin | 42.7 | 41.2 | 4 % | 126.5 | 123.6 | 2 % | 166.8 |
Other operating income 1) | 0.4 | 0.4 | -12 % | 1.7 | 1.1 | 50 % | 1.5 |
Operating expenses 1) | -32.0 | -34.8 | -8 % | -99.6 | -108.0 | -8 % | -145.1 |
Sales & Marketing | -20.9 | -23.3 | -10 % | -64.7 | -73.9 | -12 % | -99.4 |
Research & Development | -8.0 | -8.1 | -2 % | -25.5 | -24.6 | 4 % | -33.2 |
Administration | -3.1 | -3.3 | -5 % | -9.3 | -9.5 | -2 % | -12.4 |
Adjusted EBITDA 2) | 11.0 | 6.8 | 62 % | 28.4 | 16.6 | 71 % | 23.2 |
of revenue, % | 20.2 % | 12.7 % | 17.5 % | 10.3 % | 10.7 % | ||
Adjustment to operating income | 9.1 | 12.5 | |||||
Restructuring | 0.4 | -4.6 | |||||
EBITDA | 11.0 | 6.8 | 62 % | 28.8 | 25.7 | 12 % | 31.1 |
of revenue, % | 20.2 % | 12.7 % | 17.8 % | 16.0 % | 14.3 % | ||
Depreciation & amortization | -3.1 | -3.5 | -11 % | -9.6 | -11.0 | -13 % | -13.6 |
Impairment | -0.3 | -0.3 | -6.0 | -95% | -6.3 | ||
PPA amortization | -0.7 | -0.9 | -15 % | -2.4 | -2.3 | 5 % | -4.1 |
EBIT | 6.9 | 2.5 | 177 % | 16.5 | 6.4 | 160 % | 7.2 |
of revenue, % | 12.7 % | 4.7 % | 10.2 % | 4.0 % | 3.3 % | ||
Adjusted EBIT 2) | 7.7 | 3.4 | 126 % | 18.6 | 6.5 | 186 % | 9.6 |
of revenue, % | 14.0 % | 6.3 % | 11.4 % | 4.0 % | 4.4 % | ||
Earnings per share, (EUR) 3) | 0.03 | 0.01 | 494 % | 0.06 | 0.02 | 255 % | 0.02 |
Deferred revenue | 72.0 | 70.2 | 3 % | 73.9 | |||
Cash flow from operations before financial items and taxes | 7.9 | 3.7 | 112 % | 28.9 | 10.3 | 180 % | 19.0 |
Cash and financial assets at fair value through P&L | 42.8 | 24.9 | 72 % | 25.5 | |||
ROI, % | 24.2 % | 10.6 % | 128 % | 20.3 % | 8.9 % | 128 % | 7.8 % |
Equity ratio, % | 49.2 % | 45.9 % | 7 % | 49.0 % | |||
Gearing, % | 8.4 % | 28.3 % | -70 % | 20.8 % | |||
Personnel, end of period | 1,693 | 1,727 | -2 % | 1,696 |
- Excluding Items Affecting Comparability (IAC) and depreciation and amortization
- Adjustments are material items outside normal course of business associated with acquisitions, integration, restructuring, gains or losses from sales of businesses and other items affecting comparability. Reconciliation and a breakdown of adjusted costs is in note 5 of the Table Section of this report.
- Based on the weighted average number of outstanding shares during the period 158,051,995 (1-9/2020).
Events after period-end
Webcast
F-Secure’s CEO
The presentation material and the webcast recording will be available on the company’s website.
Additional information
This is a summary of F-Secure’s Interim Report January -
Financial calendar
During the year 2021,
- Financial Statement Release 2020 and Annual Report 2020,
February 10, 2021 - Interim report January-
March 2021 ,April 29, 2021 - Half year financial report January-
June 2021 ,July 15, 2021 - Interim report January-
September 2021 ,October 21, 2021
The Annual General Meeting is scheduled for
Contact information
Eriikka Söderström, CFO,
+358 40 6691844
+358 40 8405450
investor-relations@f-secure.com
Attachment
- F-Secure_Q3_2020_eng_FINAL
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