WithSecure publishes restated financial information for its continuing operations for 2021

·11 min read

WithSecure Corporation, Stock Exchange Release, 16 May 2022, at 8:00 EEST

WithSecure publishes restated financial information for its continuing operations for 2021

As announced in a stock exchange release on 17 February 2022, the Board of Directors of WithSecure Corporation (“WithSecure”) decided to pursue towards the separation of the Consumer Security business through a partial demerger (the “Demerger”), whereby WithSecure’s Consumer Security business would be transferred into a new independent company, to be named F-Secure Corporation (“F-Secure”), whereas the renamed WithSecure Corporation would carry on the Corporate Security business. The demerger is subject to an approval by an Extraordinary General Meeting of 31 May. The planned completion date of the demerger is 30 June 2022.

Reflecting the progress of the demerger plans, WithSecure presents consumer security business as Discontinued operations under IFRS 5 from first quarter of 2022.

WithSecure publishes restated quarterly financial information on its 2021 financials. These financials constitute comparative information for WithSecure Corporation when Consumer Security business ("F-Secure") is presented as discontinued operations. Financial information for discontinued operations does not reflect future F-Secure's profitability on a stand-alone basis.

Under IFRS 5, the result from discontinued operations is reported separately from continuing operations’ income and expenses in the consolidated income statement. Comparative periods are restated accordingly. The statement of financial position is not restated.

Discontinued operations include revenue and operating expenses directly related to Consumer Security business and discontinued for continuing business after the demerger. Certain costs related to supporting F-Secure during transition period and costs of premises which will be sub-leased to F-Secure are not included in Discontinued operations. To improve comparability between periods, Estimated comparable EBITDA has been added as alternative performance measure. Presentation of WithSecure and F-Secure in accordance with IFRS 5 does not reflect profitability of either continuing or discontinued business on a stand-alone basis prior to the demerger.

The restated financial information is unaudited.

Restated income statement, continuing operations (WithSecure)

Restated

Income statement

1-3/2021


4-6/2021


7-9/2021


10-12/2021


1-12/2021

Revenue

31,5

31,9

32,1

34,5

130,0

Cost of revenue

-10,1

-10,2

-10,1

-11,1

-41,5

Gross margin

21,4

21,7

22,0

23,4

88,5

Other operating income

0,4

0,4

0,3

1,3

2,5

Sales and marketing

-17,4

-18,7

-17,6

-19,6

-73,3

Research and development

-7,3

-7,7

-7,7

-9,3

-32,1

Administration

-3,3

-4,3

-3,1

-5,0

-15,7

EBIT

-6,3

-8,6

-6,1

-9,2

-30,1

Financial net

0,3

-0,4

-0,2

0,0

-0,3

Result before taxes

-6,0

-9,0

-6,3

-9,2

-30,5

Income taxes

0,9

1,6

1,3

1,3

5,0

Result for the period

-5,1

-7,5

-5,0

-7,9

-25,5

Other comprehensive income

Exchange differences on translating foreign operations

4,4

-0,1

-1,0

0,6

3,9

Total comprehensive income (parent company owners)

-0,7

-7,6

-6,0

-7,3

-21,6

Restated income statement, discontinued operations (F-Secure)

Restated

Income statement

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

-2,1

-2,3

-2,6

-9,1

Gross margin

24,1

24,3

24,3

24,5

97,2

Other operating income

0,0

0,1

0,1

0,2

0,3

Sales and marketing

-6,3

-6,7

-6,2

-6,8

-25,9

Research and development

-3,7

-3,5

-3,3

-4,0

-14,5

Administration

-1,8

-3,2

-1,6

-2,6

-9,3

EBIT

12,4

10,9

13,3

11,2

47,8

Financial net

0,0

0,1

0,0

0,0

0,1

Result before taxes

12,4

11,1

13,2

11,2

47,9

Income taxes

-2,4

-2,2

-2,6

-2,5

-9,8

Result for the period

10,0

8,9

10,6

8,7

38,2

Other comprehensive income

Exchange differences on translating foreign operations

0,0

0,0

-0,1

0,1

0,1

Total comprehensive income (parent company owners)

10,0

8,9

10,5

8,8

38,3

Restated cash flows, discontinued operations (F-Secure)

Restated

Cash flow

1-3/2021


4-6/2021


7-9/2021


10-12/2021


1-12/2021

Net cash flow from operating activities

5,5

13,2

7,0

14,4

40,2

Net cash flow from investing activities

-0,2

-0,5

-0,4

-0,6

-1,6

Net cash flow from financing activities

0,0

0,0

-0,1

0,0

-0,2

Restated disaggregation of revenue, continuing operations (WithSecure)

Restated

By sales channels

1-3/2021


4-6/2021


7-9/2021


10-12/2021


1-12/2021

Corporate security

Cloud-native solutions

11,8

12,7

13,5

14,7

52,7

On-premise solutions

7,7

7,5

7,4

7,4

30,0

Cyber security consulting

12,0

11,6

11,2

12,4

47,2

Total revenue

31,5

31,9

32,1

34,5

130,0




Restated

By geographical area

1-3/2021


4-6/2021


7-9/2021


10-12/2021


1-12/2021

Nordic countries

10,2

10,2

8,9

11,0

40,3

Rest of Europe

13,4

13,8

13,7

14,2

55,1

North America

2,2

2,1

3,0

2,7

10,0

Rest of the world

5,6

5,7

6,7

6,6

24,6

Total revenue

31,5

31,9

32,1

34,5

130,0

Restated disaggregation of revenue, discontinued operations (F-Secure)

Restated

By sales channels

1-3/2021


4-6/2021


7-9/2021


10-12/2021


1-12/2021

Consumer security

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 revenue

26,3

26,3

26,5

27,1

106,3

Restated

By geographical area

1-3/2021


4-6/2021


7-9/2021


10-12/2021


1-12/2021

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

Alternative performance measures

WithSecure has included certain non-IFRS based alternative performance measures (APM). Alternative performance measures are provided to reflect the underlying business performance, and to exclude certain non-operational or non-cash valuation items affecting comparability (IAC). The aim is to improve comparability, and alternative performance measures should not be regarded as substitutes for IFRS based measures. Alternative performance measures include EBITDA, adjusted EBITDA, estimated comparable EBITDA and adjusted EBIT. Depreciations, amortization and impairments are excluded from EBITDA. Also, the adjusted EBITDA and adjusted EBIT exclude IACs which are material items outside the normal course of business. These items are associated with acquisitions, integration costs, gains and losses from the sale of businesses and other items affecting comparability.

Presentation of WithSecure and F-Secure in accordance with IFRS 5 standard does not reflect profitability of either business on a stand-alone basis. Estimated comparable EBITDA is presented as APM for profitability to improve comparability between periods. Estimated comparable EBITDA excludes (for Discontinued operations: includes) activities related to research and development, and cost of facilities held by WithSecure.

Restated reconciliation of alternative performance measures, continuing operations (WithSecure)

Restated

EBITDA

1-3/2021


4-6/2021


7-9/2021


10-12/2021


1-12/2021

Estimated comparable EBITDA

-1,5

-4,0

-1,6

-4,1

-11,3

Adjustments to adjusted EBITDA

Research and development

-1,2

-1,1

-1,1

-0,9

-4,4

Facilities held by WithSecure

-0,4

-0,4

-0,4

-0,4

-1,6

Adjusted EBITDA

-3,2

-5,5

-3,1

-5,5

-17,2

Adjustments to EBITDA

Divestments

0,5

0,5

Strategy

EBITDA

-3,2

-5,5

-3,1

-4,9

-16,7

Depreciation, amortization and impairment losses

-3,1

-3,1

-3,0

-4,3

-13,4

EBIT

-6,3

-8,6

-6,1

-9,2

-30,1

Restated

EBIT

1-3/2021


4-6/2021


7-9/2021


10-12/2021


1-12/2021

Adjusted EBIT

-5,5

-7,8

-5,4

-8,0

-26,8

Adjustments to EBIT

PPA amortization

-0,8

-0,7

-0,7

-0,7

-2,8

Impairment

-1,0

-1,0

Divestments

0,5

0,5

Strategy

EBIT

-6,3

-8,6

-6,1

-9,2

-30,1

Restated reconciliation of alternative performance measures, discontinued operations (F-Secure)

Restated

EBITDA

1-3/2021


4-6/2021


7-9/2021


10-12/2021


1-12/2021

Estimated comparable EBITDA

11,2

12,2

12,6

11,9

47,8

Adjustments to adjusted EBITDA

Research and development

1,2

1,1

1,1

0,9

4,4

Facilities held by WithSecure

0,4

0,4

0,4

0,4

1,6

Adjusted EBITDA

12,8

13,7

14,1

13,2

53,7

Adjustments to EBITDA

Strategy

-2,3

-0,4

-1,5

-4,3

EBITDA

12,8

11,4

13,7

11,6

49,5

Depreciation, amortization and impairment losses

-0,4

-0,4

-0,4

-0,4

-1,6

EBIT

12,4

10,9

13,3

11,2

47,8



Restated

EBIT

1-3/2021


4-6/2021


7-9/2021


10-12/2021


1-12/2021

Adjusted EBIT

12,4

13,2

13,7

12,7

52,1

Adjustments to EBIT

Strategy

-2,3

-0,4

-1,5

-4,3

EBIT

12,4

10,9

13,3

11,2

47,8

Restated key ratios and other key figures, continuing operations (WithSecure)

Restated

Profitability

1-3/2021


4-6/2021


7-9/2021


10-12/2021


1-12/2021

Revenue

31,5

31,9

32,1

34,5

130,0

Cloud-native corporate security solutions

11,8

12,7

13,5

14,7

52,7

On-premise corporate security solutions

7,7

7,5

7,4

7,4

30,0

Cyber security consulting

12,0

11,6

11,2

12,4

47,2

Gross margin

21,4

21,7

22,0

23,4

88,5

Gross margin, % of revenue

68,0%

68,1%

68,5%

67,8%

68,1%

Operating expenses

-28,0

-30,7

-28,4

-33,9

-121,0

Operating expenses for adjusted EBITDA

-24,9

-27,6

-25,4

-29,6

-107,6

Adjustment to other income

0,5

0,5

Adjusted EBITDA

-3,2

-5,5

-3,1

-5,5

-17,2

Adjusted EBITDA, % of revenue

-10,1%

-17,3%

-9,6%

-15,8%

-13,3%

EBITDA

-3,2

-5,5

-3,1

-4,9

-16,7

EBITDA, % of revenue

-10,1%

-17,3%

-9,6%

-14,2%

-12,8%

Adjusted EBIT

-5,5

-7,8

-5,4

-8,0

-26,8

Adjusted EBIT, % of revenue

-17,6%

-24,6%

-16,8%

-23,2%

-20,6%

EBIT

-6,3

-8,6

-6,1

-9,2

-30,1

EBIT, % of revenue

-20,0%

-26,9%

-18,9%

-26,6%

-23,2%

Estimated combarable EBITDA

-1,5

-4,0

-1,6

-4,1

-11,3

Estimated combarable EBITDA, % of revenue

-4,9%

-12,6%

-5,0%

-12,0%

-8,7%

Restated key ratios and other key figures, discontinued operations (F-Secure)

Restated

Profitability

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

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

Adjusted EBITDA

12,8

13,7

14,1

13,2

53,7

% of revenue

48,7 %

51,9 %

53,0 %

48,6 %

50,6 %

EBIT

12,4

10,9

13,3

11,2

47,8

EBIT, % of revenue

47,3 %

41,6 %

50,0 %

41,3 %

45,0 %

Estimated combarable EBITDA

11,2

12,2

12,6

11,9

47,8

Estimated combarable EBITDA, % of revenue

42,6 %

46,2 %

47,5 %

43,7 %

45,0 %

Calculation of key figures

Equity ratio, %

Total equity

Total assets – deferred revenue

ROI, %

Result before taxes + financial expenses (annualized)

Total assets - non-interest bearing liabilities (average)

ROE, %

Result for the period (annualized)

Total equity (average)

Gearing, %

Interest bearing liabilities - cash and bank and financial asset through profit and loss

Total equity

Earnings per share, EUR

Profit attributable to equity holders of the company

Weighted average number of outstanding shares

Shareholders' equity per share, EUR

Equity attributable to equity holders of the company

Number of outstanding shares at the end of period

Operating Expenses

Sales and marketing, research and development, and administration costs

EBITDA

EBIT + Depreciation, amortization and impairment

EBITA

EBIT + Amortization and impairment

Contact information:

Laura Viita, Investor Relations Director, WithSecure Corporation
+358 50 487 1044
investor-relations@withsecure.com

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