Interim In terim re repo port rt 1Q 1Q 20 2008 April 23rd, - - PowerPoint PPT Presentation

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April 23rd, 2008 Kimmo Alkio, President and CEO

Interim Report 1Q08 – April 23rd , 2008 Page 2

Q1 Revenues

• Solid overall growth of 15% to 26.6m
• Strong ISP growth to 10.9m
• +8% quarter over quarter
• +41% from 1Q07 (YoY)
• Mobile security advances
• New mobile operator and device

manufacturer partnerships

• Traditional channel sales grew +2% to

15.7m

5 10 15 20 25 30

Revenues

Interim Report 1Q08 – April 23rd , 2008 Page 3

Q1 Costs

• Q1 Costs ~19.5m
• Continuously investing into future

growth

• Costs include
• Capitalization of Development costs

marginal

• Granted stock options ~0.2m
• Gross margin 92% (92%)

5 10 15 20 25 Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Q4´06 Q1´07 Q2'07 Q3'07 Q4'07 Q1'08 S&M R&D G&A write-off

Interim Report 1Q08 – April 23rd , 2008 Page 4

Q1 Operating Result

• EBIT 5.3m
• 20% of revenues
• +31% EBIT growth from 1Q07
• Equity ratio strong
• Mar 31, 2008

71%*

• Dec 31, 2007

82%

• Sep 30, 2007

81%

• 2
• 1

1 2 3 4 5 6 7

Without impairment loss of Network Control * If dividends were paid in March equity ratio 81% - was paid in April

Interim Report 1Q08 – April 23rd , 2008 Page 5

Development of EBIT margin

• Continue to prioritise growth over short

term profitability

• Average EBIT has improved gradually
• The 2-4 year goal is to reach 25% EBIT

level

0 % 5 % 10 % 15 % 20 % 25 % 30 %

Q3'03 01'04 Q3'04 Q1'05 Q3'05 Q1'06 Q3'06 Q1'07 Q3'07 Q1'08 EBIT% Ave (4 qrts) Graph shows EBIT without the non-recurring impairment loss of Network Control in 4Q06

Interim Report 1Q08 – April 23rd , 2008 Page 6

Q1 Cash flow

• Positive cash flow 6.1m
• Cash flow includes:
• SRV payment over 1m
• Prepaid corporate taxes
• Liquid assets 90.3m (72.4m)
• Market value on Mar 31st, 2008

50 55 60 65 70 75 80 85 90 95

Dividend Cash position

Dividend pay-out

Interim Report 1Q08 – April 23rd , 2008 Page 7

Q1 Deferred Revenues

• Deferred revenues accrued in balance

sheet

• Mar 31, 2008

33.7m

• Dec 31, 2007

31.9m

• Sep 30, 2007

29.1m

• Development following an annual pattern

10 15 20 25 30 35

Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Q4 Q4´06 06 Q1'07 Q2'07 Q3'07 Q4'07 Q1'08

Deferred Revenues

Interim Report 1Q08 – April 23rd , 2008 Page 8

Regional Revenue Split

2007Q1 2008Q1

40 % 43 % 8 % 9 %

Nordic Countries RoE North America RoW

39 % 44 % 8 %9 %

Interim Report 1Q08 – April 23rd , 2008 Page 9

ISP Business – continued strong growth

• 10.9m of revenues
• +41% of total Q1 revenues
• Strong growth
• +8% from 4Q07, +41% from 1Q07
• Growth accelerating activities continued

2000 4000 6000 8000 10000 12000

Q1/01 Q1/02 Q1/03 Q1/04 Q1'05 Q1'06 Q1'07 Q1'08

kEUR

Interim Report 1Q08 – April 23rd , 2008 Page 10

Growing number of ISP partners

• 169 partners in 38 countries
• 6 new partners in Q1
• Strong competitiveness in signing new

partners continues

• Q1 significant partner announcements
• Cabovisao, Portugal
• Comstar-Direct, Russia
• Ziggo, the Netherlands

20 40 60 80 100 120 140 160 180

Cumulative

Interim Report 1Q08 – April 23rd , 2008 Page 11

F-Secure Partners’ annual market share of residential broadband

0 % 5 % 10 % 15 % 20 % 25 % 30 % 35 % 40 %

2006 2007 2006 2007 2006 2007

F-Secure

Partners’ market share of residential broadband

• 37% (34%) in Europe
• 10% (10%) in NA
• 9% (n/a) in Asia

(estimates by Dataxis & F- Secure)

Europe NA ASIA

Interim Report 1Q08 – April 23rd , 2008 Page 12

F-Secure Service Provider partners in the Americas

Interim Report 1Q08 – April 23rd , 2008 Page 13

F-Secure Service Provider partners in EMEA part1

Interim Report 1Q08 – April 23rd , 2008 Page 14

F-Secure Service Provider partners in EMEA part 2

Interim Report 1Q08 – April 23rd , 2008 Page 15

F-Secure Service Provider partners in APAC

Interim Report 1Q08 – April 23rd , 2008 Page 16

Q1 Mobile Security Business

• Device manufacturers
• Partnership announcement (Q1) with

Sony Ericsson and Toshiba Information Systems

• Available for a majority of the

currently shipping or upcoming Nokia S60 3rd edition devices

• Continued strong growth in trial usage
• Slow steady growth in revenues
• Ca 3% of total revenues (Q1)
• Sony Ericsson integration project

revenues affecting Q1

• Operators key for awareness &

availability

• T-Mobile UK & Germany
• Orange UK & Switzerland
• Swisscom
• TeliaSonera
• Elisa
• CSL (Hong Kong)

Interim Report 1Q08 – April 23rd , 2008 Page 17

Recent mobile partner in APAC

• The biggest mobile operator in Hong Kong
• Symbian S60, UIQ and WinMobile phones

Interim Report 1Q08 – April 23rd , 2008 Page 18

Key product announcements in Q1

• F-Secure Health Check
• Pre-release in Q4, official launch Q1
• F-Secure Mobile Security for Windows

Mobile (Apr 08)

Interim Report 1Q08 – April 23rd , 2008 Page 19

Number of Personnel 602 at the end of quarter

100 200 300 400 500 600 700

Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108

S&M R&D G&A

Interim Report 1Q08 – April 23rd , 2008 Page 20

Future Outlook

• Strategy in a nutshell

(1) Continue to drive growth (2) Capitalize on industry leadership in Security as a Service (3) Develop leadership in mobile security

• Investing in growth
• New sales & marketing activities for

scalability in ISP& mobile

• Pursue security related technologies and

new services related to the online wellbeing

• Mobile business
• Revenues continue to grow gradually
• Remaining a small part of total revenues in

2008

Based on the sales pipeline at the time of publishing, existing subscriptions and support contracts, previous experience

• Q2 2008 outlook
• Revenues 26.5-28.5m
• Costs below 21m
• FY 2008 outlook
• Expected revenues 110-120m
• EBIT% for the full year 19-23%
• ISP growth c. 40% during 2008