F-Secure Corporation, Stock Exchange Release 5 July 2022 at 18:00 EEST
F-Secure Corporation publishes historical financial information for 2021
As announced in a stock exchange release on 30 June 2022, F-Secure Corporation (“F-Secure”) was formed as a result of the demerger from WithSecure Corporation (“WithSecure”), which was completed on 30 June 2022. Trading in F-Secure's shares on the main market of Nasdaq Helsinki started on 1 July 2022.
The historical financial information of F-Secure for the interim periods 1 January – 31 March 2021, 1 April – 30 June 2021, 1 July – 30 September 2021 and 1 October – 31 December 2021 is presented herein on a carve-out basis. The carve-out principles and accounting principles applied are consistent with those followed in the preparation of the carve-out financial statements as at and for the years ended 31 December 2021, 2020 and 2019.
The carve-out financial information of F-Secure has been prepared on a carve-out basis from WithSecure’s audited consolidated financial statements using the historical income and expenses, assets and liabilities and cash flows attributable to F-Secure business. The carve-out financial information also includes the allocation of income, expense, assets, liabilities and cash flows which are based on management judgement, assumptions and estimates. The most significant estimates, judgements and assumptions relate to the allocation of the costs of certain centrally provided shared services, leasing arrangements, shared tangible and intangible assets, cash management and financing, determination on current and deferred income taxes and invested equity.
The carve-out financial information may not necessarily represent F-Secure’s combined results of operations, financial position and cash flows that would have been had F-Secure been managed as a stand-alone consolidated group, preparing consolidated financial information for the periods presented, separate from WithSecure. Further, the carve-out financial information may not be indicative of F-Secure’s future performance, financial position or cash flows.
The information of interim periods is unaudited. The carve-out financial information is presented in millions of euros unless otherwise stated. All figures have been rounded and consequently, the sum of individual figures may deviate from the sum totals presented.
Combined Statement of Comprehensive Income
| Carve-out basis |
EURm | 1-3/2021 | 4-6/2021 | 7-9/2021 | 10-12/2021 | 1-12/2021 |
Revenue | 26.3 | 26.3 | 26.5 | 27.1 | 106.3 |
Cost of revenue | -2.1 | -2.0 | -2.2 | -2.5 | -8.8 |
Gross margin | 24.2 | 24.3 | 24.3 | 24.6 | 97.4 |
Other operating income | 0.1 | 0.1 | 0.1 | 0.2 | 0.5 |
Sales and marketing | -6.7 | -7.3 | -7.1 | -7.6 | -28.7 |
Research and development | -4.3 | -4.1 | -4.0 | -4.6 | -16.9 |
Administration | -1.7 | -4.0 | -1.4 | -1.7 | -8.8 |
EBIT | 11.6 | 9.1 | 12.0 | 10.9 | 43.5 |
Financial income | 0.1 | -0.1 | 0.1 | 0.1 | 0.3 |
Financial expenses | -0.1 | 0.2 | -0.2 | -0.1 | -0.2 |
Profit before taxes | 11.5 | 9.2 | 11.9 | 10.9 | 43.6 |
Income tax | -2.4 | -1.9 | -2.4 | -2.4 | -9.1 |
Result for the period | 9.1 | 7.4 | 9.5 | 8.5 | 34.4 |
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Other comprehensive income |
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Items that may be reclassified to profit or loss: |
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Exchange difference on translation of foreign operations | 0.0 | 0.0 | -0.1 | 0.1 | 0.1 |
Comprehensive Income for the period | 9.1 | 7.4 | 9.4 | 8.6 | 34.5 |
Combined Statement of Financial Position
| Carve-out basis |
EURm | 31.3.2021 | 30.6.2021 | 30.9.2021 | 31.12.2021 |
ASSETS | | | | |
NON-CURRENT ASSETS | | | | |
Tangible assets | 0.3 | 0.2 | 0.2 | 0.3 |
Intangible assets | 5.4 | 5.6 | 5.6 | 5.9 |
Deferred tax assets | 0.4 | 0.4 | 0.4 | 0.2 |
Total non-current assets | 6.1 | 6.3 | 6.3 | 6.4 |
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CURRENT ASSETS | | | | |
Inventories | 0.1 | 0.1 | 0.1 | 0.1 |
Accrued income | 0.7 | 1.5 | 1.4 | 1.3 |
Trade and other receivables | 22.2 | 20.9 | 21.1 | 19.1 |
Related party receivable from WithSecure 1) | 11.5 | 10.5 | 10.2 | 12.1 |
Total current assets | 34.4 | 32.9 | 32.8 | 32.5 |
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TOTAL ASSETS | 40.5 | 39.1 | 39.1 | 38.9 |
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INVESTED EQUITY AND LIABILITIES | | | | |
TOTAL INVESTED EQUITY | 11.7 | 9.7 | 12.0 | 9.5 |
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NON-CURRENT LIABILITIES | | | | |
Interest bearing liabilities, non-current | 0.1 | 0.1 | 0.1 | 0.1 |
Deferred tax liabilities | 0.3 | 0.3 | 0.3 | 0.2 |
Other non-current liabilities | 3.5 | 3.2 | 3.1 | 3.2 |
Total non-current liabilities | 3.9 | 3.6 | 3.5 | 3.5 |
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CURRENT LIABILITIES | | | | |
Interest bearing liabilities, current | 0.1 | 0.1 | 0.1 | 0.1 |
Trade and other payables | 7.7 | 9.2 | 7.6 | 9.2 |
Other current liabilities | 17.1 | 16.5 | 15.9 | 16.6 |
Total current liabilities | 24.9 | 25.8 | 23.6 | 25.9 |
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TOTAL INVESTED EQUITY AND LIABILITIES | 40.5 | 39.1 | 39.1 | 38.9 |
1) Historically, WithSecure managed the financing of F-Secure through centralized cash management and therefore there are no cash balances directly attributable to F-Secure in the carve-out financial information.
Combined Statement of Cash Flows
| Carve-out basis |
EURm | 1-3/2021 | 4-6/2021 | 7-9/2021 | 10-12/2021 | 1-12/2021 |
Cash flow from operations | | | | | |
Result for the period | 9.1 | 7.4 | 9.5 | 8.5 | 34.4 |
Adjustments | 2.8 | 2.2 | 3.2 | 2.9 | 11.1 |
Cash flow from operations before change in working capital | 11.9 | 9.5 | 12.7 | 11.3 | 45.5 |
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Change in net working capital | -3.6 | 1.4 | -2.7 | 4.5 | -0.4 |
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Cash flow from operations before financial items and taxes | 8.3 | 10.9 | 10.0 | 15.9 | 45.1 |
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Net financial items and taxes | -2.4 | -1.9 | -2.4 | -2.3 | -9.0 |
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Cash flow from operations | 5.9 | 9.0 | 7.6 | 13.6 | 36.1 |
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Cash flow from investments | | | | | |
Investments in intangible and tangible assets | -0.2 | -0.5 | -0.4 | -0.6 | -1.7 |
Proceeds from sale of intangible and tangible assets | - | 0.0 | - | 0.0 | 0.0 |
Cash flow from investments | -0.2 | -0.5 | -0.4 | -0.6 | -1.6 |
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Cash flow from financing activities | | | | | |
Repayments of lease liabilities | 0.0 | 0.0 | -0.1 | 0.0 | -0.2 |
Equity financing with WithSecure, net | -5.7 | -8.5 | -7.1 | -13.0 | -34.3 |
Cash flow from financing activities | -5.8 | -8.5 | -7.2 | -13.0 | -34.5 |
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Change in balance 1) | - | - | - | - | - |
Cash and cash equivalents at the beginning of the period 1) | - | - | - | - | - |
Cash and cash equivalents at the end of the period 1) | - | - | - | - | - |
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1) Historically, WithSecure managed the financing of F-Secure through centralized cash management and therefore there are no cash balances directly attributable to F-Secure in the cash flow statement.
Disaggregation of revenue
| Carve-out basis |
EURm | 1-3/2021 | 4-6/2021 | 7-9/2021 | 10-12/2021 | 1-12/2021 |
Sales channels | | | | | |
Revenue from external customers |
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Partner channel | 20.8 | 20.8 | 21.0 | 21.6 | 84.2 |
Direct channel (E-commerce) | 5.5 | 5.5 | 5.5 | 5.5 | 22.1 |
Total | 26.3 | 26.3 | 26.5 | 27.1 | 106.3 |
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Geographical information | | | | | |
Revenue from external customers | | | | | |
Nordic countries | 9.1 | 9.1 | 9.3 | 9.4 | 36.9 |
Rest of Europe | 12.6 | 12.4 | 12.3 | 12.5 | 49.6 |
North America | 3.4 | 3.6 | 3.7 | 3.8 | 14.6 |
Rest of the world | 1.2 | 1.2 | 1.3 | 1.4 | 5.2 |
Total revenue | 26.3 | 26.3 | 26.5 | 27.1 | 106.3 |
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Customer contract related balances | Carve-out basis | |
EURm | 31.3.2021 | 30.6.2021 | 30.9.2021 | 31.12.2021 | |
Accrued income | 0.7 | 1.5 | 1.4 | 1.3 | |
Deferred revenue, non-current | 3.4 | 3.2 | 3.1 | 3.1 | |
Deferred revenue, current | 17.1 | 16.5 | 15.9 | 16.6 | |
ALTERNATIVE PERFORMANCE MEASURES
In addition to EBIT, F-Secure uses Adjusted EBIT, Adjusted EBITA and Adjusted EBITDA as key performance indicators when measuring performance between periods. Adjusted EBIT, Adjusted EBITA and Adjusted EBITDA exclude items that affect comparability. Items affecting comparability are associated with strategic reviews in 2021. Adjusted EBIT, Adjusted EBITA and Adjusted EBITDA are presented in addition to EBIT to reflect the underlying business performance and to enhance comparability between periods. F-Secure believes that these comparable alternative performance measures provide meaningful supplemental information by excluding items outside normal business operations, which reduce comparability between the periods.
Key Figures
| Carve-out basis |
EURm, unless otherwise stated | 1-3/2021 | 4-6/2021 | 7-9/2021 | 10-12/2021 | 1-12/2021 |
Revenue | 26.3 | 26.3 | 26.5 | 27.1 | 106.3 |
Revenue growth % | - | - | - | - | 6.1% |
Gross margin | 24.2 | 24.3 | 24.3 | 24.6 | 97.4 |
% of revenue | 91.9% | 92.3% | 91.8% | 90.8% | 91.7% |
Adjusted EBITDA | 11.9 | 11.8 | 12.4 | 11.3 | 47.4 |
% of revenue | 45.2% | 45.0% | 46.7% | 41.7% | 44.6% |
Adjusted EBITA | 11.8 | 11.8 | 12.3 | 11.2 | 47.2 |
% of revenue | 45.0% | 44.8% | 46.4% | 41.5% | 44.4% |
EBIT | 11.6 | 9.1 | 12.0 | 10.9 | 43.5 |
% of revenue | 43.9% | 34.5% | 45.1% | 40.2% | 40.9% |
Adjusted EBIT | 11.6 | 11.5 | 12.0 | 10.9 | 45.9 |
% of revenue | 43.9% | 43.5% | 45.1% | 40.2% | 43.2% |
Profit before taxes | 11.5 | 9.2 | 11.9 | 10.9 | 43.6 |
% of revenue | 43.9% | 35.0% | 44.9% | 40.2% | 41.0% |
Capital expenditure | 0.2 | 0.5 | 0.4 | 0.6 | 1.7 |
% of revenue | 0.6% | 2.0% | 1.4% | 2.2% | 1.6% |
Deferred revenue | 20.5 | 19.7 | 19.0 | 19.7 | 19.7 |
Operating cash flow | 5.9 | 9.0 | 7.6 | 13.6 | 36.1 |
Net debt 1) | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 |
Equity ratio % | 28.8% | 24.9% | 30.8% | 24.5% | 24.5% |
Cash conversion % | 68.2% | 107.3% | 75.0% | 134.9% | 95.6% |
Personnel at the end of the period 2) | 244 | 245 | 246 | 248 | 248 |
1) In the Carve-out financial statements, no cash or certain lease liabilities, such as lease liabilities related to business premises, were allocated to F-Secure. As a result, the Net debt derived from the carve-out financial statements does not reflect F-Secure's Net debt after the Demerger when the Company operates as a separate entity.
2) Comprises the personnel directly employed by the consumer security business. The figure does not include the share of personnel in shared group functions.
Reconciliation of certain alternative performance measures
Reconciliation of Adjusted EBITDA to EBITDA and EBIT | |
| Carve-out basis |
EURm | 1-3/2021 | 4-6/2021 | 7-9/2021 | 10-12/2021 | 1-12/2021 |
Adjusted EBITDA | 11.9 | 11.8 | 12.4 | 11.3 | 47.4 |
Adjustments to EBITDA | | | | | |
Costs related to strategic review | - | -2.4 | - | - | -2.4 |
EBITDA | 11.9 | 9.5 | 12.4 | 11.3 | 45.0 |
Depreciation and amortization | -0.3 | -0.4 | -0.4 | -0.4 | -1.5 |
EBIT | 11.6 | 9.1 | 12.0 | 10.9 | 43.5 |
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Reconciliation of Adjusted EBITA to EBITA and EBIT | | |
| Carve-out basis |
EURm | 1-3/2021 | 4-6/2021 | 7-9/2021 | 10-12/2021 | 1-12/2021 |
Adjusted EBITA | 11.8 | 11.8 | 12.3 | 11.2 | 47.2 |
Adjustments to EBITA | | | | | |
Costs related to strategic review | - | -2.4 | - | - | -2.4 |
EBITA | 11.8 | 9.4 | 12.3 | 11.2 | 44.8 |
Amortization | -0.3 | -0.3 | -0.3 | -0.3 | -1.3 |
EBIT | 11.6 | 9.1 | 12.0 | 10.9 | 43.5 |
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Reconciliation of Adjusted EBIT and EBIT | | | |
| Carve-out basis |
EURm | 1-3/2021 | 4-6/2021 | 7-9/2021 | 10-12/2021 | 1-12/2021 |
Adjusted EBIT | 11.6 | 11.5 | 12.0 | 10.9 | 45.9 |
Adjustments to EBIT | | | | | |
Costs related to strategic review | - | -2.4 | - | - | -2.4 |
EBIT | 11.6 | 9.1 | 12.0 | 10.9 | 43.5 |
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Classification of adjusted costs in operating expenses | | |
| Carve-out basis |
EURm | 1-3/2021 | 4-6/2021 | 7-9/2021 | 10-12/2021 | 1-12/2021 |
Operating expenses | | | | | |
Sales and marketing | -6.7 | -7.3 | -7.1 | -7.6 | -28.7 |
Research and development | -4.3 | -4.1 | -4.0 | -4.6 | -16.9 |
Administration | -1.7 | -4.0 | -1.4 | -1.7 | -8.8 |
Total | -12.7 | -15.4 | -12.5 | -13.9 | -54.5 |
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Depreciation and amortization by function | | | | | |
Sales and marketing | 0.0 | 0.0 | -0.1 | -0.1 | -0.2 |
Research and development | -0.3 | -0.3 | -0.3 | -0.3 | -1.3 |
Total | -0.3 | -0.4 | -0.4 | -0.4 | -1.5 |
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Items affecting Comparability (IAC) by function | | | | | |
Administration | -1.7 | -4.0 | -1.4 | -1.7 | -8.8 |
Less: Costs related to strategic review | - | -2.4 | - | - | -2.4 |
Administration excluding IAC | -1.7 | -1.6 | -1.4 | -1.7 | -6.5 |
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Operating expenses excluding depreciation, amortization and IAC | | | | | |
Sales and marketing | -6.7 | -7.2 | -7.0 | -7.6 | -28.5 |
Research and development | -4.0 | -3.7 | -3.6 | -4.2 | -15.6 |
Administration | -1.7 | -1.6 | -1.4 | -1.7 | -6.5 |
Total | -12.4 | -12.6 | -12.1 | -13.5 | -50.6 |
Calculation of key figures
Key figure | Definition |
EBITDA | EBIT + Depreciation, amortization and impairment |
EBITA | EBIT + Amortization and impairment |
EBIT | Result before taxes and net financial items |
Adjusted EBITDA | EBITDA before items affecting comparability |
Adjusted EBITA | EBITA before items affecting comparability |
Adjusted EBIT | EBIT before items affecting comparability |
Items affecting comparability | Items affecting comparability are associated with strategic reviews. |
Capital expenditure | Corresponds to the Combined Statement of Cash Flows line item Investments in intangible and tangible assets |
Operating cash flow | Corresponds to the Combined Statement of Cash Flows line item Cash flow from operations |
Net debt | Interest bearing liabilities – Cash and cash equivalents |
Equity ratio, % | Total invested equity/Total assets |
Cash conversion, % | (Adjusted EBITDA –Capital expenditure– Change in net working capital) / Adjusted EBITDA |
The demerger prospectus and an unofficial English language translation thereof are available at https://investors.f-secure.com/.
F-Secure Corporation
For more information:
Sari Somerkallio, CFO
tel. +358 40 3569251
investor.relations@f-secure.com
F-Secure in brief
F-Secure is Finland headquartered and globally operating consumer cyber security company. F-Secure offers award-winning security and privacy products and services that make every digital moment more secure, for everyone. F-Secure operates in over 100 countries, has ~170 Service Provider partners and is the global leader providing security through Communication Service Providers. F-Secure Corporation is listed on Nasdaq Helsinki Ltd. Read more: www.f-secure.com