F-Secure (FSC1V) Investor Day 2024 summary

Strategy and Market Dynamics

• Focus on unlocking growth through expanded addressable markets, especially after the Lookout Life acquisition, with a shift toward tier 1 partnerships and new verticals like insurance and banking.

• Expansion in the consumer cyber security market is driven by B2B2C partnerships, especially with CSPs, leveraging a partner-first model and embedded security solutions.

• Six of the top 10 global communication service providers are now served, with security becoming a core differentiator for these partners.

• The company is leveraging a B2B2C model, expecting the addressable market to grow three times faster than traditional B2C, driven by CSP and telco trends.

• Company restructuring aims to drive growth across all partner segments, from strategic Tier 1s to smaller commercial partners.

Portfolio and Product Development

• The portfolio has shifted from point solutions to holistic, seamless offerings, with Total and Embedded Security as core products.

• Significant R&D shift from point solutions to holistic, multi-module offerings, with 75% of 2024 investments focused on scam, embedded, and multi-module security.

• AI-driven Scam Protection is a major investment area, addressing the growing sophistication and scale of scams, with a focus on user experience and seamless integration.

• Embedded Security SDKs allow partners to build differentiated apps, with flexibility and cross-SDK experiences, supporting a wide range of use cases from fintech to smart home.

• "Total" one-app solution offers comprehensive, contextual protection across devices, networks, and platforms, with a unique trusted companion model.

Financial Guidance and Growth Outlook

• Updated medium-term targets include high single-digit CAGR growth, with significant upside from major tier 1 deals, and an adjusted EBITDA margin approaching 40% as revenue reaches €200 million.

• Dividend policy remains at or above 50%, with flexibility while leverage exceeds the 2.5x target.

• Growth is expected from expanding within existing partners, winning new partners, and ramping up tier 1 relationships, with substantial untapped potential in current tier 1s.

• 2025 is a ramp-up year, with acceleration toward targets expected thereafter; previous profitability target was above 42% EBITA margin.

• Building M&A capabilities within the financial framework, focusing on scam protection, AI technology, and partner business differentiation.