2013-02-01 08:00:04 CET
2013-02-01 08:00:12 CET
REGULATED INFORMATION
F-Secure Oyj - Financial Statement Release
F-Secure Corporation - Interim report January 1 - December 31, 2012
F-Secure Corporation
Financial statement release
February 1, 2013 at 9.00 a.m.
F-Secre Corporation - Interim Report January 1-December 31, 2012
Healthy cashflow and profitability, good operative progress
Highlights in Q4
-- Total revenues grew by 0.4%, reaching 40.1 million (Q42011: 40.0m).
-- Revenue in the operator channel grew by 1%, reaching 24.5 million (24.3m).
Revenue growth came from PC and mobile Internet Security sales and Content
Cloud license sales; decrease in Content Cloud project delivery revenues.
-- EBIT was 7.4 million, representing 19% of revenues (6.5m,16% of revenues)
without one-off costs of approximately 7 million due to restructuring in
France
-- EBIT including one-offs was 0.4 million, representing 1% of revenues
(6.5m, 16% of revenues)
-- Earnings per share was EUR 0.00 (0.03).
-- Cash flow from operations was 7.8 million positive (7.1m)
-- Negotiations related to restructuring in French subsidiary were concluded.
-- In January 2013, F-Secure's corporate business strategy was recognized as
top-ranked by The Forrester Wave™, Endpoint Security report
-- In January 2013, the award from AV-Test for Best Protection in the Home
User category
Highlights in 2012
-- Total revenues grew by 8%, reaching 157.2 million (2011:146m).
-- Revenue in the operator channel grew by 12%, reaching 95.2 million (84.8m).
-- EBIT was 27.3 million, representing 17% of revenues (23.6,16% of revenues)
without one-off costs of approximately 7million due to restructuring in
France
-- EBIT including all one-offs was 20.3 million, representing 13% of revenues
(23.6m,16% of revenues)
-- Earnings per share was EUR 0.09 (0.11).
-- Cash flow from operations was 25.6 million positive (20.8m).
-- New CEO Christian Fredrikson started on January 16, 2012
-- F-Secure has revised its organizational structure as of July 1, 2012
-- Financial performance was in line with management's revised estimation for
the year (i.e. revenue growth 5-10% from previous year; EBIT around 15%
excluding one-offs in France)
Outlook for 2013 - management's estimation for the year:
-- Revenue growth is estimated to be over 5% compared to 2012.
-- Profitability is estimated to be over 15% of revenues.
(This report is unaudited. Unless otherwise stated the comparisons refer to the
corresponding period a year ago. The currency is euro. The Content Cloud
business is included in the Operator channel figures.)
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Key figures 2012 2011 Change 2012 2011 Change
(EUR Million) 10-12 10-12 % 1-12 1-12 %
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Revenue 40.1 40.0 0 157.2 146.0 8
EBIT excl. one-offs 7.4 6.5 14 27.3 23.6 16
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% of revenue 19 16 17 16
EBIT 0.4 6.5 -94 20.3 23.6 -14
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% of revenue 1 16 13 16
Profit before taxes 0.5 6.6 19.9 23.5
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Earnings per share (EUR) 0.00 0.03 0.09 0.11
At the end of period: 37.7 38.3 37.7 38.3
Deferred revenue
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Equity ratio, % 72.7 68 72.7 68
Debt-to-equity ratio, % -50.9 -47 -50.9 -47
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Personnel 931 942 931 942
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President and CEO Christian Fredrikson:
“Our financial performance in Q4 proved to be better than anticipated. Growth
was flat due to exceptional Q411 but profitability excluding one-time expenses
continued to improve, leading to a strong financial performance. Also, our
annual financial performance was good though the revenue growth was behind our
ambition.
We are very pleased with the progress in the Content Cloud business; one of
Europe's major operators is now taking the final steps towards the launch of
their F-Secure-powered Content Cloud service recognizing its huge market
opportunity. The major rollout of the offering, which makes storing, syncing
and sharing of content seamless, is expected in Q1. AT&T's F-Secure-powered
Content Cloud offering has also gained traction and is progressing well.
These launches, together with growing interest among service providers, fuel
our excitement for our next-generation, productized Content Cloud offering. We
see this as a growth opportunity for years to come. Already we are a
significant player in the content cloud business, with millions of users
globally and several petabytes of data securely stored in our cloud.
Our Internet Security portfolio continues to impress and evolve. At the end of
2012, our corporate business strategy was recognized as top-ranked by The
Forrester Wave™, Endpoint Security report. In January, we received the award
from AV-Test for Best Protection in the Home User category. Our PC and Mobile
Internet Security business via operators continues to achieve healthy
subscriber growth in Europe, as always, but also in Latin America.
This past year has shown good operative progress. We have renewed our
organizational structure and leadership team to improve operational efficiency
as well as time-to-market and market-centricity. We also have restructured our
R&D sites for maximum productivity and we won new major customers. Our main
goal is to seek revenue growth while gradually improving our profitability and
continuing to improve our cost structure. I am confident that our
transformation has positioned us to reach our goal in coming years.”
F-Secure's financial performance in 2012
Total revenues in 2012 were 157.2 million, representing a growth of 8% (146m).
Revenue growth through the operator channel remained solid, with a growth of
12%from the previous year and reaching revenues of 95.2million (84.8m).
Revenues through the other channels grew over 1%, totaling 61.9 million
(61.2m).EBIT was 20.3million (23.6m), representing 13% of revenues (16%). EBIT
excluding one-offs due to restructuring in the French subsidiary were 27.3
million, representing 17% of revenues. Earnings per share were EUR 0.09 (EUR
0.11). Cash flow from operations was 25.6 million positive(20.8m positive).
Deferred revenues were 37.7 million at the end of December (38.3m).
Total fixed costs were 131.2 million (115.9m),13% higher than in the previous
year. The operational cost increases were allocated to geographic expansion in
Latin America and to R&D to increase the competitiveness of the products. The
cost level was impacted by increased depreciations from past capitalized
expenses (R&D activations, software, and hardware); 7.9 million (6.5m) in
total. F-Secure capitalized less development costs than in the previous year,
4.9million (7.8m) in total. The one-offs due to restructuring of the French
subsidiary were approximately 7 million. These were based on redundancies of 41
employees and related costs, 2.5 million (final costs were a bit higher than
2.1m estimated in November) and write-offs of 4.5 million from the related
technology and customer assets. The negotiations related to restructuring at
F-Secure SDC (France) were concluded in November.
In addition, there was a write-off of 0.8 million from the obsolete Content
Cloud development, booked in Q4, and a write-off of 0.8 million from the
obsolete sales tool, booked in Q2. All one-off costs, including restructuring
costs and all write-offs, during the year were 8.6million in total. Total fixed
costs excluding these one-offs were 122.6 million (114.9m), 7% higher than in
the previous year.
At the end of the year, the geographical breakdown of revenues was as follow:
Finland and Scandinavia 31% (32%), rest of Europe 45% (45%), North America 10%
(11%) and rest of the World 14% (12%).
Operator channel in Q4
The Operator channel, which includes Internet service providers, mobile
operators and cable operators, is the main channel through which F-Secure
services are delivered. F-Secure has more than 200 partners in over 40
countries, with an addressable market of over 250 million fixed and mobile
broadband customers. The total number of F-Secure's operator partners is
significantly larger than that of any other security service vendor. F-Secure
provides, through operators, Internet security and Content Cloud products for
computers and mobile devices that are easy and intuitive to use for consumers.
F-Secure securely stores billions of photos, videos, documents, and other files
for millions of consumers globally. Located in five data centers on three
continents, F-Secure's ever-increasing cloud content currently makes up several
petabytes of data. F-Secure Cloud Services, online back- up and synch & share,
are trusted by many of the world's largest telecom companies and serve more
than 100 operators around the world.
The Company has developed a new productized, highly-scalable Content Cloud
offering and streamlined its project delivery to provide a shorter time to
market. This new product strengthens the competitive position in the emerging
Content Cloud business. The development of the previous version of the Content
Cloud product has been stopped in France and this will improve the Company's
financial performance.
One of Europe's major operators is now taking the final steps towards the
launch its Content Cloud service is planning to make it publicly available
during Q1 2013. Powered by F-Secure's latest Content Cloud technology,
operator's consumer customers will now get more out of their digital content
while safely accessing and sharing it from virtually anywhere.
The Company's co-operation with AT&T is also progressing well. F-Secure has
delivered the digital content and cloud storage platform for AT&T's mobile
device users to let them sync and share data in one safe, convenient location.
AT&T launched their Content Cloud service in Q3 2012 and has invested into
various marketing campaigns to push the service in the market. AT&T Locker's
user base is steadily gaining traction.
During the quarter, PC and mobile Internet Security business performed very
well and the Operator channel again achieved a double-digit subscriber growth
overall. Latin America continued strong performance through Vivo's (Brazil)
subscriber growth in both PC and mobile security. F-Secure also launched
Telefonica Movistar operators in Chile, Mexico and Panama and expects to launch
other Telefonica group operators during 1H 2013. In addition, some partners
expanded their existing PC security offering to also support mobile security;
these operators include i.e. TDC (Den) and PCCW (Hong Kong). This demonstrates
that the competitiveness of our comprehensive Internet Security offering is
meeting the requirements of converging online life.
In the fourth quarter of 2012, sales through operator business partners was
24.5million (24.3m), currently representing 61% (61%) of F-Secure's total
revenues. Revenue growth was 1% compared to the corresponding quarter in 2011
and 3% to the previous quarter. Q4 financials include some revenue recognition
from Content Cloud delivery and other projects. The Content Cloud revenues,
like the initial commitment from AT&T, backup services and project revenues,
support operator business. The revenue growth rate was impacted by contractual
changes and by decreased Content Cloud project revenues.
Annual revenues showed growth of 12% and totaled 95.2 million (84.8m), and 61%
(58%) of the Company's total revenues.
Corporate and Direct to Consumer channels in Q4
These channels provide mainly new license and renewal sales of a wide range of
Internet security and Content Cloud services for PC and mobile devices. The
Corporate channel serves customers globally mainly through the reseller and
Managed Services Partner network. Consumer channels works globally through the
eStore, AppStores and retailers in selected markets.
F-Secure's corporate products have received the highest score in strategy among
top endpoint security vendors in an independent study (The Forrester Wave™;
January 2013). Forrester Research acknowledged F-Secure's service-enabling
business approach as it is well aligned with a greater shift in the software
industry towards services. Additionally, F-Secure's score was among the highest
in the antimalware category demonstrating once again the strength of the
Company's protection features .In January, F-Secure received an award from
AV-Test for Best Protection in the Home User category.
Sales in traditional channels continued slightly better than anticipated.
Customer satisfaction in security services remained high, which was visible in
healthy license and renewal sales. The new version of company's flagship
consumer product, Internet Security 2013 was selling very well.
During the fourth quarter, revenues from other channels were flat; 15.6 million
(15.7m) in total. These other channels represented 39% (39%) of F-Secure's
total revenues. Deferred revenues were at the end of the quarter 37.7 million
(Q312: 36.3m, Q411:38.3m)
Annual revenues showed growth over 1% and totaled 61.9 million (61.2m), and 39%
(42%) of the Company's total revenues.
Product announcements in Q4
F-Secure develops and sells Internet Security and Content Cloud products that
support personal computers, servers and an increasing set of major smartphone,
tablet and other mobile device operating systems. Services include a wide range
of Internet Security products like anti-virus, anti-theft, browsing protection
and parental control as well as Content Cloud products like online backup,
synchronization and sharing.
During Q4 2012 the key product announcements were as follows:
In November, F-Secure introduced Banking Protection, a new feature of
F-Secure's Internet Security product. Banking Protection is designed especially
to protect consumers' online banking sessions from malicious attacks and to
protect online banking sessions against Trojans by adding an extra layer of
security. It works unobtrusively without interrupting the banking session,
while still allowing access to sites that are verified safe by F-Secure.
In October, F-Secure introduced patch management as a business security
feature. The debut of Software Updater breaks new ground for small and medium
sized businesses as proactive patch management software that is part of a
comprehensive SMB security solution. Software Updater ensures that an
organization's operating systems and third-party applications are up-to-date.
It proactively scans computers for missing security updates and patches and
deploys them automatically, displaying the results.
Awards
F-Secure scored higher than eight other vendors in the strategy category in
Forrester Research's evaluation of top enterprise client endpoint security
vendors. The report, The Forrester Wave™: Endpoint Security, Q1 2013 by
Forrester Research Inc., featured F-Secure as a strong performer. The top
strategy rating was based on evaluation of F-Secure's product roadmap, cost and
licensing models, and go-to-market strategies. F-Secure was cited by the
research firm for actively developing a service-enabling platform, a vision
that “closely aligns with the bigger climate change happening in enterprise IT
today, in which organizations are moving to procuring services rather than
products,” according to the report.
F-Secure's products and services performed outstandingly well in tests run by
various test organizations and magazines around the globe. Among others
F-Secure Internet Security 2013 won the award “BEST PROTECTION 2012 - Home
User” by AV-Test Org which was announced in January. Additionally, F-Secure
Internet Security received AV-Comparatives' Top Rated product-award, Bronze
award in On Demand Malware Detection and Silver award in Proactive Malware
Detection published in AV-Comparatives' Summary report in December.
Risks and uncertainties
Uncertainty in the economic environment may impact the growth of broadband
connections, operators' willingness to invest in new services and may create
pricing pressure. These may have a negative impact on F-Secure's security and
Content Cloud sales.
F-Secure's risks and uncertainties are related to, among other things, the
competitiveness of F-Secure's product portfolio, competitive dynamics in the
industry, pricing models (e.g. free services, cost of Content Cloud services),
impact of changes in technology, timely and successful commercialization of
complex technologies and new products and solutions, the ability to protect
intellectual property (IPR) in F-Secure's solutions as well as the use of third
party technologies on reasonable commercial terms, subcontracting
relationships, regional development in new growth markets, sustainability of
partner relationships, compromising stored personal data, service quality
related penalties, risk exposure from increasing contractual liability
requirements and forming of the new business areas.
The Content Cloud project completion timelines and related revenues are more
unpredictable by nature than in the traditional security services business.
This may cause risks for delivery delay penalties and may cause more
variability in revenue forecasts.
Events after period-end
No material changes regarding the Company's business or financial position have
materialized after the end of December 2012.
Personnel and organization
F-Secure's personnel totaled 931 at the end ofQ4 (942). In the fourth quarter,
the number of personnel has decreased, especially in the R&D function, due to
reductions of 41 employees in the French subsidiary.
F-Secure has revised its organizational structure as of July 1, 2012. With this
organizational change, F-Secure aims to improve its operational efficiency as
well as time-to-market and market-centricity. The main sales channels are the
operator channel with Internet Security and Content Cloud services, and other
channels with traditional license sales to businesses and consumers.
Currently, the Leadership Team consists of the following persons: Christian
Fredrikson (President and CEO), Ari Alakiuttu (Human Resources & Facilities),
Samu Konttinen (Customer and Market Operations), Timo Laaksonen (Content Cloud
Business), Maria Nordgren (Consumer Security Business), Pirkka Palomäki (Chief
Strategy Office), Jari Still (R&D Operations), Pekka Usva (Corporate Security
Business) and Taneli Virtanen (Chief Financial Officer).
Finance and capital structure
Cash flow from operations in 2012 was 25.6 million positive (20.8m positive).
The net financial income was slightly negative at 0.3 million, impacted by low
interest income and exchange rates losses (negative 0.1m).
The Company's cash position has developed according to the longer term
efficient capital management objectives. The market value of F-Secure's liquid
assets on December 31, 2012 was 33.1 million (28.1m). Dividends of 9.3m were
paid in April. Changes in exchange rates had alight positive impact on
profitability.
F-Secure's capital expenditure in 2012 was 10.3million (18.7m), consisting
mainly of IT hardware and software as well as capitalization of development
expenses amounting to 4.9 million (7.8m).
F-Secure's financial position remained solid. F-Secure's equity ratio at the
end of December was 73% (68%) and the gearing ratio was 51% negative (47%
negative).
The objective of F-Secure's capital management is to achieve an efficient
capital structure that ensures the functioning of business operations and
promotes the increase of shareholder value.
Shares, shareholders' equity, own shares and option programs
The total number of Company shares is currently 158,798,739. The corresponding
number of shares diluted is 159,115,294. The Company's registered shareholders'
equity is EUR 1,551,311.18. The total number of own shares held at the end of
December 2012 was 3,732,390 shares, corresponding to approximately 2.4% of the
Company's shares and voting rights. Own shares will be purchased to be used in
the incentive compensation plans, to improve the Company's financial structure,
to be used for making acquisitions or implementing other arrangements related
to the Company's business, or otherwise assigning or cancelling the shares.
During the fourth quarter, there were no shares subscribed with options. The
subscription period of F-Secure shares with F-Secure 2005 warrant program ended
on November 30, 2012. Currently, the Company does not have any warrant program.
in November 2012, the Board of Directors established a new synthetic
option-based incentive program, earning period 2012-2014, for its key employees
excluding the management. The purpose of the program is to increase the value
of the company and to commit the key employees to the company.
In January 2013, the company assigned a total of 316,555 shares to 19
participants of the F-Secure share-based incentive program as a reward payment
based on the 2009 earning period (share-based incentive program 2011-13). After
the transfer, F-Secure Corporation holds a total of 3,415,835of its own shares.
Corporate Governance
F-Secure complies with the Corporate Governance recommendations for public
listed companies published by the Securities Market Association, a body
established by the Confederation of Finnish Industries EK, the Central Chamber
of Commerce and NASDAQ OMX Helsinki Ltd., as explained on F-Secure's web pages.
F-Secure published its corporate governance statement for 2011 in the annual
report and on the Company website in March 2012.
Market view
The long term market opportunities are attractive for F-Secure. Malware threats
and targeted attacks to private users and businesses in both PC and mobile
operating environments are still evolving. Every day, F-Secure's Labs
automation handles and makes decisions on hundreds of thousands of executables
and handles many millions of queries to the backend about URLs and binaries.
The security software revenues in 2012 are estimated to be $19.2 billion,
growing 8.4% from the previous year (Gartner, August 2012).The forecasted
growth for the overall global security software market remains solid at around
8.2% until 2016 (CAGR). The growth of the security market is mostly organic and
is derived from emerging markets, such as APAC, China and Latin America
(Gartner, August 2012).
At the same time as threats are emerging the number of Internet users is
growing and is close to 2.5 billion reaching a global Internet penetration of
close to 35%; in Asia close to 30%, in Europe over 60%, and in North America
close to 80% (source: Internet World Stats, U.S. Census Bureau, estimated in
June 2012). The growth of smartphones and other Internet connected devices is
expected to accelerate to tens of billions during next 10 years (source:gigaom/
Ericson).By 2016, the total installed base of mobile devices will grow
threefold to 3.7 billion, whereas desktops and notebooks will see a drastic
slowdown growing only 30% from 1.5 billion to 2 billion devices (Gartner,
October 2012).
People have become multi-screeners who use smartphones, tablets, computers or
even TVs to get online. According to F-Secure's Consumer Broadband Survey 2012
(6,400 broadband subscribers from France, the UK, Germany, Sweden, Finland,
Italy, Spain, the Netherlands, Belgium, USA, Canada, Brazil, India and Japan)
65% of people have more than one device. The choice of device depends on the
place, context and time people have on their hands. Many activities are
performed either sequentially or in parallel on various devices which defines
new requirements for software.
Users create and share content 24/7.The volume of user generated digital
content is expected to continue to increase rapidly during coming years, driven
by digital photos, videos and music. 89% of people (F-Secure Broadband Consumer
Survey, 2012) want all their content on all their devices and look for services
to share, store and control their personal data. Parks Associates forecasts
that operators providing security, storage and sharing value-added services
have a revenue opportunity of $1.03b 2012, increasing to $4.82b during 2015.
The majority of people do not trust the safety of cloud services according to
F-Secure's Broadband Consumer Survey. However, the need for Internet security
and different kinds of safe Content Cloud servicesis increasing. It opens new
opportunities for security and safe Content Cloud service providers who have
built trust over years and have a solid track record.
New players in the Internet security area are entering the market, especially
focused on mobile operating systems. In the emerging Content Cloud business,
there are a lot of new vendors. However, during the quarter there were no
significant changes in the competitive landscape or pricing levels for Internet
Security. F-Secure's competitive position in general and especially in the
Operator channel has remained strong based on innovative products with a great
user experience and awarded technical performance.
Based on several industry analyst estimates, the Software as a Service (SaaS)
business model is expected to continue to grow strongly and to gain more market
share over traditional license sales. For Operators the Software as a Service
model is a natural expansion to their other service offerings. The SaaS
business offers operators the opportunity to replace revenues lost from the
provision of commoditized services and to increase loyalty in the face of
competitive threats from over-the-top providers and third parties.
Long-term objectives and strategy summary for 2012 -14
F-Secure's first priority is to drive growth and market expansion. Based on the
company's strong technology assets in security products, cloud computing and
Content Cloud services, F-Secure continues to create new innovative offerings
to augment traditional security services, especially in the Content Cloud
space.
The Company sells its products globally through three channels; Direct to
consumer channel (eStore, App Stores, retail), Corporate channel (reseller
network) and Operator channel (SaaS).
Operators, including Internet service providers, mobile operators and cable
operators, are the main channel for F-Secure services. F-Secure provides,
through operators, awarded security and Content Cloud services and utilizes the
local presence and brand of operators to reach millions of consumers in a
cost-efficient and scalable way.
F-Secure's competitive advantage derives from existing operator network and
relationships built over the years. Key assets include security research,
scalable products optimized for the mass-market, experience in service
provisioning in the operator network environment and the ever growing user base
of operators. F-Secure stands out in its ability to combine security with safe
Content Cloud services for both computers and mobile devices and its
understanding of the Operator channel as a whole.
During the strategy period, the Company is aiming for double-digit revenue
growth, driven by the Operator channel and supported by the Corporate and
Direct to Consumer channels. The growth is expected to come from the western
hemisphere and some emerging markets like Latin America and APAC.
The Company will continue its investments in new services around the Content
Cloud and Internet security products with emphasis on end-customer focus. These
investments ensure the scalability and competiveness of the services and drive
F-Secure service ramp-up, both PC and mobile, in a wide subscriber base.
Profitability is targeted to develop towards the 25% level at the end of the
strategy period. F-Secure's longer-term profitability level continues to be
driven by revenue growth and scalable operations.
Outlook for 2013
The long-term business opportunity with Internet Security and Content Cloud
products for multiple devices and platforms is attractive. The Company is
looking for ways to increase its revenue growth and to improve its profit
margin.
The Operator channel is expected to continue to drive the revenue growth
powered by Internet security sales and supported by a productized,
highly-scalable Content Cloud service. However, the short-term revenue growth
remains at lower level due to contractual changes and decreased Content Cloud
project revenues as the project sizes are smaller. The Company also estimates
good progress from the Corporate and Direct to Consumer channels. To meet the
evolving threat level and to open new business opportunities for Internet
Security services, F-Secure will continuously launch new security features with
a shorter time to market over the upcoming quarters.
The actual operational cost increase is fairly limited, and is targeted at
driving product portfolio competitiveness and supporting geographical
expansion.
Management's estimation for the year; the annual revenue growth is estimated to
be over 5% compared to 2012. The annual profitability is estimated to be over
15% of revenues.
The revenue estimate is based on the sales pipeline at the time of publishing,
existing subscriptions and support contracts as well as current exchange rates.
The Company continues to prioritize growth over short-term profitability and
plans to invest the majority of the improved earnings in growth opportunities
in its core business while aiming at improving profitability.
Signing of the annual report and proposals to the Annual General Meeting
The Board of Directors will sign the annual report on February 14. The Company
will on that date publish the proposals to the AGM. The Company's dividend
policy is to pay approximately half of its profits as dividends. Subject to
circumstances, the company may deviate from this policy.
News conference today at 11 am
A news conference for analysts and press is arranged today, February 1, at 11
a.m. Finnish time at
F-Secure's Headquarters, address: Tammasaarenkatu 7, Ruoholahti, Helsinki. At
the news conference, President & CEO Christian Fredrikson will present the
Q4financial results. A conference call for international investors and analysts
is arranged at 1.00 p.m. Finnish time (EET) (12.00 CET, 11.00 UK time). To
participate in the call, please dial in and register 5-10 minutes prior to the
event through the following number: +44 20 7162 0077, password: F-Secure. The
Q4 financial results presentation material will be available on our Investors
web pages at www.f-secure.com under About F-Secure, Investors before the call
begins.
Financial calendar for 2013
F-Secure will publish the interim report on April 26 (Q1), July 26 (Q2) and
October 25 (Q3). On the publication date a stock exchange release will be sent
at 9 a.m. Finnish time to the NASDAQ OMX Helsinki Ltd., a press and analyst
conference will be arranged at 11 a.m. Finnish time in Helsinki, and an
international conference call will be arranged in the afternoon. The Annual
General Meeting is scheduled to be held on April 3, 2013 and the annual report
will be published in the beginning of March, latest on week 11.
F-Secure Corporation
Additional information
F-Secure Corporation
Christian Fredrikson, President and CEO
tel. +358 9 2520 0700
Taneli Virtanen, CFO
tel. +358 9 2520 5655
Katariina Kataja, IR
tel. +358 40 6616884
This interim report is prepared in accordance with IAS 34 standard Interim
Financial Reporting and with accounting principles stated in the annual report
2011.
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Key figures (unaudited):
Euro million
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INCOME STATEMENT 2012 2011 2012 2011 Chge
10-12 10-12 1-12 1-12 %
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Revenues 40.1 40.0 157.2 146.0 8
Cost of revenues 1.8 2.2 7.4 8.0 -7
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Gross margin 38.3 37.8 149.7 138.1 8
Other operating income 0.3 0.4 1.8 1.4 25
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Sales and marketing 19.6 18.0 70.9 64.7 10
Research and development 15.8 10.5 49.3 39.3 25
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Administration 2.7 3.1 11.0 11.9 -8
Operating result 0.4 6.5 20.3 23.6 -14
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Financial net 0.1 0.1 -0.3 -0.1
Result before taxes 0.5 6.6 19.9 23.5
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Income taxes -0.8 -2.0 -5.8 -7.1
Result for the period -0.3 4.6 14.1 16.4
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Other comprehensive income: 2012 2011 2012 2011
10-12 10-12 1-12 1-12
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Exchange diff. on translating 0.1 0.0 0.2 0.0
foreign operations
Available-for-sale fin.assets -0.1 0.1 0.1 0.1
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Income tax rel. to components of other comprehensive 0.0 0.0 0.0 0.0
income
Total compr.income (owners) -0.3 4.7 14.3 16.4
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Earnings per share. e 0.00 0.03 0.09 0.11
EPS diluted. e 0.00 0.03 0.09 0.10
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BALANCE SHEET 31/12/2012 31/12/2011
ASSETS
Intangible assets 20.8 25.3
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Tangible assets 9.8 9.1
Goodwill 19.4 19.4
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Other financial assets 5.4 5.5
Non-current assets total 55.4 59.2
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Inventories 0.2 0.4
Other receivables 38.4 37.9
-----------------------------------------------------------
Available-for-sale financial assets 16.8 16.0
Cash and bank accounts 16.5 12.2
-----------------------------------------------------------
Current asset total 71.9 66.4
Total 127.3 125.7
-----------------------------------------------------------
-----------------------------------------------------SHAREHOLDERS' EQUITY 31/12/2012 31/12/2011
AND LIABILITIES
Equity 65.1 59.6
-----------------------------------------------------
Other non-current 0.4 1.6
Provisions 0.1 0.0
-----------------------------------------------------
Deferred revenues 8.5 8.4
Non-current liabilities total 9.1 10.1
-----------------------------------------------------
Other current 23.9 26.2
Deferred revenues 29.3 29.8
-----------------------------------------------------
Current liabilities total 53.2 56.1
Total 127.3 125.7
-----------------------------------------------------
----------------------------------------------------------------------
CASH FLOW STATEMENT 31/12/2012 31/12/2011
Cash flow from operations 25.6 20.8
----------------------------------------------------------------------
Cash flow from investments -11.1 -16.7
Cash flow from financing -9.3 -9.1
activities 1)
----------------------------------------------------------------------
Change in cash 5.2 -5.0
Cash and bank at 1 Jan 27.8 32.9
----------------------------------------------------------------------
Change in net fair value of Available-for-sale 0.1 0.1
Cash and bank at end of period 33.1 28.1
----------------------------------------------------------------------
Statement of changes in shareholders' equity
--------------------------------------------------------------------------------
Share Share Un- Treasur Retained Assets Transl Total
capita premiu restricted y earnings avail. .
l m fund equity- shares f.sale diff.
reserve
Equity 1.6 0.2 5.1 -9.0 61.8 0.1 -0.2 59.6
on:
31.12.201
1
--------------------------------------------------------------------------------
Total 14.1 0.1 0.2 14.3
comprehen
sive
income
for the
year
Dividend -9.3 -9.3
--------------------------------------------------------------------------------
Other
change
Exercise
of
options
--------------------------------------------------------------------------------
Treasury 0.6 -0.6
shares
Cost of 0.5 0.5
share
based
payments
--------------------------------------------------------------------------------
Equity on 1.6 0.2 5.1 -8.4 66.5 0.2 0.0 65.1
31.12.201
2
--------------------------------------------------------------------------------
NOTES
1. Cash flow from financing
Dividend for year 2011 0.06 euro per share totaling 9.303.980.94 euro was paid
on 17th April 2012. In 2011 paid dividend totaled 9.253.915.80 euro.
---------------------------------------------
Key ratios 2012 2011
12 m 12 m
---------------------------------------------
Operating result. % of revenues 12.9 16.2
ROI % 34.9 44.3
---------------------------------------------
ROE % 22.6 29.5
Equity ratio. % 72.7 68.1
---------------------------------------------
Debt-to-equity ratio. % -50.9 -47.1
Earnings per share (EUR) 0.09 0.11
---------------------------------------------
Earnings per share diluted 0.09 0.10
Shareholders' equity 0.41 0.38
per share. e
---------------------------------------------
P/E ratio 17.1 19.0
Capitalized expenditures (Me) 10.3 18.7
---------------------------------------------
Contingent liabilities 15.6 18.7
Personnel. average 970 878
---------------------------------------------
Personnel. end of period 931 942
---------------------------------------------
Segment information
The Group has only one segment; data security.
----------------------------------------------------------------------
Quarterly development 1/11 2/11 3/11 4/11 1/12 2/12 3/12 4/12
Revenues 34.1 35.3 36.6 40.0 38.4 39.6 39.1 40.1
----------------------------------------------------------------------
Cost of revenues 1.8 1.9 2.0 2.2 1.9 2.1 1.7 1.8
Gross margin 32.3 33.4 34.6 37.8 36.5 37.5 37.4 38.3
----------------------------------------------------------------------
Other operating income 0.4 0.4 0.2 0.4 0.3 0.5 0.6 0.3
Sales and marketing 14.8 16.2 15.8 18.0 16.9 17.9 16.4 19.6
----------------------------------------------------------------------
Research and 9.4 9.9 9.4 10.5 11.5 11.4 10.6 15.8
development
Administration 3.0 3.0 2.8 3.1 3.0 2.9 2.3 2.7
----------------------------------------------------------------------
Operating result 5.5 4.6 6.9 6.5 5.4 5.8 8.6 0.4
Financial net -0.2 0.0 0.0 0.1 -0.2 -0.1 -0.1 0.1
----------------------------------------------------------------------
Result before taxes 5.3 4.6 7.0 6.6 5.2 5.7 8.5 0.5
----------------------------------------------------------------------
Geographical information
---------------------------------------------------------------
Revenue 10-12/2012 10-12/2011 1-12/2012 1-12/2011
Nordic countries 12.0 12.6 47.9 47.3
---------------------------------------------------------------
Rest of Europe 18.4 17.3 71.2 65.1
North America 4.2 5.2 15.9 16.4
---------------------------------------------------------------
Rest of the world 5.5 4.9 22.2 17.2
Total 40.1 40.0 157.2 146.0
---------------------------------------------------------------
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