WithSecure publishes restated financial information for its continuing operations for 2021
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
[email protected]
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