Annual Report • Mar 12, 2009
Annual Report
Open in ViewerOpens in native device viewer
| Information for Investors | 2 |
|---|---|
| About F-Secure Corporation | 3 |
| CEO's Letter 2008 | 4 |
| Board of Directors' Report 2008 | 5 |
| Stock Exchange Releases 2008 | 9 |
| Financial Statements | 10 |
| F-Secure Consolidated | |
| Income statement | 11 |
| Balance sheet | 12 |
| Cash fl ow statement | 13 |
| Statement of changes in shareholders' equity | 14 |
| Notes to the fi nancial statements | 14 |
| F-Secure Corporation | |
| Income statement | 32 |
| Balance sheet | 32 |
| Cash fl ow statement | 33 |
| Notes to the fi nancial statements | 33 |
| Auditors' Report | 42 |
| Corporate Governance | 43 |
| Board of Directors | 45 |
| Executive Team | 46 |
| Contact Information | 47 |
The Annual General Meeting of F-Secure Corporation will be held on Thursday, March 26, 2009 at 5.00 p.m. (Finnish time) at High Tech Center (Ruoholahti), Tammasaarenkatu 3, 00180 Helsinki. In order to attend the meeting, please fi nd more instructions on the Group's Investor webpages www.f-secure.com.
More investor information is available on the Group's website at www.f-secure.com. The website also includes annual reports, interim reports, as well as stock exchange and press releases. Alternatively fi nancial reports can be ordered from the e-mail address [email protected]. Subscriptions to the emailing list for stock exchange releases can be made via the same e-mail address.
| Listing | NASDAQ OMX Helsinki Ltd. |
|---|---|
| Trading symbol | FSC1V |
| Number of shares | 156 770 407 |
F-Secure observes a three-week silent period prior to the publication of fi nancial statements and interim reports.
| Financial Statements Bulletin | January 29 |
|---|---|
| Annual Report | on mid-March |
| Q1 Interim Report | April 23 |
| Q2 Interim Report | July 28 |
| Q3 Interim Report | October 22 |
Innovation, reliability and speed of response – these are the qualities that have made F-Secure one of the world's leading IT security providers since the company was founded in 1988. Today F-Secure's award-winning and easy-to-use products are trusted in millions of homes and businesses around the world. We provide powerful real-time protection that works quietly and smoothly in the background, so computer and smartphone users can enjoy the benefi ts of connected life to the full.
F-Secure's solutions are available as a service subscription through more than 180 Internet service providers and mobile operator partners around the world, making F-Secure the global leader in this market. F-Secure has been listed on the NASDAQ OMX Helsinki Ltd since 1999. The company has consistently been one of the fastest growing publicly listed companies in the industry.
Dear F-Secure customers, shareholders, partners and employees, 2008 was a good year for F-Secure. We celebrated our 20 year history as a provider for reliable security services and our revenue grew over the 100 million euro milestone. From this solid basis we look forward to our third decade of protecting the connected lives of our customers with a fair deal of optimism.
The use of the Internet keeps growing globally, both in user numbers as well as in the variety and signifi cance of services used. The continued expansion of the Internet and the increase of cyber-criminality anticipate the ever more important role of security services. As an example, the amount of malware samples in our collections tripled during 2008.
We as F-Secure should be satisfi ed with our fi nancial performance. The global IT security industry grew at approximately 10% annual rate and with our 17% annual growth F-Secure grew signifi cantly faster than the industry. Our profi tability was also at a healthy level. The IT security industry remains attractive and is expected to grow twice the speed of the overall software industry. However, our ambitions are clearly set higher compared to what we achieved in 2008. Our recent track record gives us a fair deal of optimism to continue expanding our market presence and market share.
2008 also saw much more widespread Internet browsing using smartphones which exposes the users to similar Internet threats as with PCs. As awareness of these risks increases we expect to protect these mobile internet experiences as well for the years to come. Our good partnerships with handset manufacturers like Nokia and with major mobile operators like Vodafone give us a good position in this high-growth market.
The worldwide recession is a factor that no company can afford to disregard. Nevertheless, during late 2008 F-Secure could not yet see any direct negative impact from the downturn, while we remain alert of the future. At the same time, the company's strong fi nancial position provides a good basis for continued innovation and strengthening competitiveness – even in this diffi cult economic environment.
F-Secure's customers will see us expanding our service offering beyond the traditional security services. We have conducted extensive consumer research during 2008 and have studied what matters to our existing and potential customers in the context of IT and the Internet. To address the emerging needs F-Secure is tuning its strategy. In our customer segmentation we have selected the consumer segments that are most relevant for our growth. In our solution development and marketing communications we will seek for themes that are emotionally engaging to our consumer customers. The themes can deal with piece of mind in on-line interactions or with prevention of loss of personal content to viruses, hardware failures or user mistakes. Security solutions will remain a core part of our offering, while new services like Online Backup are viewed with increasing importance.
Our customers and partners have seen us continue our good track record of innovation. In May we launched the Online Backup service as our fi rst new service offering. In September we introduced yet another industry fi rst, the Real-time Protection Network concept used by F-Secure DeepGuard 2.0 technology. This innovation directly addresses one of the key needs in modern malware protection: responding ever faster to new, unknown threats.
Partnering has been, and remains a central part of how F-Secure operates. Through our license resellers we reach a wide customer base in dozens of countries, and this business continues to provide healthy growth and a committed customer base. However, the strongest growth continues to come from our Service Provider ecosystem. With more than 180 Internet Service Provider (ISP) and mobile operator partners F-Secure is clearly the global leader in this segment. Through the service providers' large subscriber base our solutions can reach tens of millions of customers.
Our co-operation with our ISP partners nowadays works as a true ecosystem. We systematically bring our partners together to enable them to learn from each other. This was well visible in the recent ISP partner conference we arranged for nearly 100 marketing professionals from our ISP partners. The participants networked and shared learnings on topics like service marketing, provisioning and new service innovation. For F-Secure this strong ecosystem has already become a clear competitive advantage that nicely complements the strength of the actual service offering.
Our modern lives continue to become more connected; to each other, to online social networks, to various services on the Web, and to massive amounts of digital content. We will connect using a growing variety of digital devices.
F-Secure feels passionate about protecting and enhancing the connected lives of our customers, whether they are consumers or small businesses. And our strong portfolio of enterprise solutions gives us a good basis for continuing to serve our larger customers well.
This passion gives a purpose for every employee of F-Secure. I am convinced that excellence in fulfi lling our purpose of protecting and enhancing the connected lives of our customers will continue to offer interesting long term growth opportunities to our partners and to F-Secure.
Looking forward to an exciting third decade of reliable and innovative services!
Kimmo Alkio CEO
The markets for Internet Security remained strong during the year. The demand for Internet Security and other related services increased, along with the growing number of Internet broadband connections and the expansion of Internet.
For January-December 2008, the Group's total revenues were 113 million (2007: 96.8m), representing a growth of 17%. This growth was especially strong in the Group's Internet Service Provider business. The Group deferred revenues were 37.2 million at the end of December 2008 (31.9). EBIT was 24.3 million (19.5m), 22% of revenues, which represents an increase of 25% from the previous year. The EBIT for 2008 includes the 0.8 million gain from the sales of network control technology in October. Earnings per share were EUR 0.13 (EUR 0.10). Cash fl ow from operations was 23.5 million positive (20.7m) excluding the dividends of 10.9 million paid in April (3.1m) and a capital repayment of a total of 35.7 million paid in November.
The Group total costs were 81 million (70.5m), 15% higher than in 2007. The Group also capitalized some of its R&D expenses according to accounting rules, totaling approximately 0.5 million in 2008.
The 2008 fi nancial performance met well the guidance set at the beginning of the year; revenues 110–120 million and EBIT the range of 19–23%. In the Q3 interim report, the ranges were narrowed down as follows; revenues 112–114 and EBIT 20–23%
The geographical breakdown of the revenues was as follows: Nordic Countries 39% (39%), Rest of Europe 43% (43%), North America 9% (9%) and Rest of the World 9% (9%). Anti-virus and intrusion prevention products represented close to 100% of the total revenues.
The solid development in Internet Service Provider (ISP) business continued well, as anticipated. For January–December 2008, the revenues through the ISP business partners totaled 48.4 million (2007: 35.9m), representing 43% of the total revenues (37%) and a growth of 35% compared to 2007. The revenue growth accelerated towards the year-end. The Group's guidance of the annual growth rate at the beginning of the year was 35–40%; revised in the Q3 interim report to 34–37%.
The total number of ISP partners at the end of 2008 was 183 operating in 43 countries. A total of 17 new service provider partnerships were signed during 2008.
The growth of Online Backup services, complementing the F-Secure existing portfolio of data security services, progressed well and it is expected to continue. The Online Backup services are expected to further strengthen the company's strategy of offering value-added services through Internet Service Providers.
The total number of the Group's ISP partners is signifi cantly larger than that of any other security service vendor. At the end of 2008, the Group's ISP partners held approximately 39% (37%) market share of total broadband consumer connections in Europe, approximately 10% (10%) in North America and approximately 13% (9%) in APAC excluding China (Source: estimates by Dataxis and F-Secure).
The traditional sales channels, including Value Added Resellers, IT Service Providers, Managed Security Service Providers, e-Store and Retail channels continued to perform well as anticipated. The channel revitalization program for delivering solid growth in sales through the traditional channels has progressed well.
Revenues through these channels in 2008 were 64.6 million (2007: 60.8m), which represents 57% of the Group total revenues (63%), growth of 6% from the previous year.
Close co-operation with major handset manufacturers, including Nokia, progressed well throughout the year. The Group announced several new mobile operator partnerships during 2008 including Global Frame Agreement with Vodafone Global. Operator announcements included KPN, TDC, Netia, Vodafone UK and CSL. Co-operation with the operators T-Mobile International, TeliaSonera Group, Orange, Swisscom and Elisa continued.
The Group also launched its fi rst non-anti malware mobile security functionality, adding lock & wipe capabilities to its Mobile Security product.
In 2008, the revenues generated by the mobile security services were at the level of approximately 3% of the Group's total revenues (2% in 2007), while the number of trial customers continues to increase consistently. Revenues by the mobile business are included in the channel revenues mentioned above and the percentage fi gure is shown as an indicator only.
F-Secure continued to launch new products and services during the year. The key announcements were both for consumer and business customer segments.
F-Secure Internet Security 2009 (for consumers) is for protection against new online threats using the DeepGuard™ 2.0 technology, which recognizes both safe and malicious software instantaneously using a real-time protection network. The Wellbeing 2009 product family includes F-Secure Internet Security 2009, F-Secure Anti-Virus 2009, F-Secure Home Server Security 2009 and F-Secure Health Check.
F-Secure Client Security 8 (for businesses) provides highly effective protection for corporate workstations and laptops by using the F-Secure DeepGuard™ 2.0 technology.
F-Secure launched a new version of its security solution for smartphones, Mobile Security 5, which has an anti-theft feature including easy remote lock and wipe of confi dential data if the phone is lost or stolen.
F-Secure's Online Backup solution features unlimited online backup services for broadband users on a subscription basis. The Online Backup is initially available through ISP partners.
For 2008, the research and development expenses totaled 25.5 million (21.2m). The Group also capitalized some of the research and development expenses according to accounting rules, totaling approximately 0.5 million in 2008.
There were no signifi cant changes in the competitive landscape or in the pricing levels during the year. However, there have been occasional signs of increasing price competition in some countries. The Group's competitive position in the ISP channel has remained strong.
F-Secure updated its annual customer satisfaction survey. The survey was updated to cover customer and product satisfaction in more detail and it was extended to new areas such as user experience. The new survey and methodology provides F-Secure with more accurate and detailed information in the following areas: customer demographics, overall satisfaction, purchasing experience, support services, the web, detailed product satisfaction, and user experience. The overall satisfaction remained at a good level of 4.1 (4.1) on a scale from 1 to 5.
The Group's fi nancial position continued strong in 2008. The Group's equity ratio after the capital repayment at the end of the year was 71% (82%), which refl ects the Group's healthy capital structure. The gearing ratio was 148% negative (125% negative). Cash fl ow for 2008 was 23.5 million positive (20.7m) excluding the dividend of EUR 10.9 million (3.1m) paid in April and the returning of equity of 35.7 million paid in November. The fi nancial income for 2008 was 2 million (1.9m). The market value of the liquid assets of the Group on December 31, 2008 was 61 million (84.1 m). The change in the USD-EUR exchange rate has not had a material effect on revenues and results for 2008.
The Group's capital expenditure for 2008 was 3.1 million (2.2m), consisting mainly of IT hardware and software as well as capitalization of some research & development expenses.
F-Secure has one class of shares, and each share entitles to one vote.
During the year, a total of 139 555 F-Secure shares were subscribed for with the A1/A2 warrants and a total of 121 200 F-Secure shares were subscribed for with the B1/ B2/B3 warrants attached to the F-Secure 2002 Warrant Plan and a total of 760 068 F-Secure shares were subscribed for with the C1/C2/C3 warrants attached to the F-Secure 2002 Warrant Plan. In aggregate the number of shares was increased by 1 020 823.
For subscriptions in January, the increase in share capital was in total EUR 747.80 registered in the Finnish Trade Register on January 7, 2008 and F-Secure received as additional shareholders' equity a total of EUR 46 638. The AGM 2008 decided that the total amount of the subscription prices paid for new shares issued after the date of the Annual General Meeting, based on stock options under the F-Secure Stock Option Plans 2002 and 2005, be recorded in company's distributable equity. Thus, F-Secure received as subscription price a total amount of EUR 1 183 907.50, which was recorded in the fund for company's distributable equity.
After the reporting period, a total of 3 333 F-Secure shares were subscribed for with the A3 warrants, total of 171 340 F-Secure shares with the A1/A2 warrants, a total of 162 650 F-Secure shares with the B1/B2/B3 warrants and a total of 355 923 F-Secure shares with the C1/C2/C3 warrants attached to the F-Secure 2002 Warrant Plan. In aggregate the number of shares was increased by 693 246. The corresponding increase in the share capital was registered in the Finnish Trade Register on January 7, 2009. The Group received as a subscription price a total amount of EUR 661 219.02, which was recorded in the fund for company's distributable equity.
Trading with the A-warrants of F-Secure Corporation 2005 Stock Option Plan commenced on March 3, 2008. The entire F-Secure 2002 warrant plan expired December 31, 2008.
The Group's registered share capital was EUR 1 551 311.18 at the end of December. Equity per share was 0.26 (0.44). The total number of shares at the end of December was 156 077 161. The corresponding number of shares at the end of the year fully diluted would be 161 270 407 including all option programs. The total number of shares is currently 156 770 407 shares.
Further information on the Group's option programs and shares can be found in the note 17 to the fi nancial statements.
The objective of the Group's capital management is to aim at an effi cient capital structure that ensures the functioning of business operations and promotes the increase of shareholder value. The Group has a goal to improve its current capital structure. The review if the Group's capital structure belongs to the standard follow-up indicators of the Group's fi nancial performance.
The decision of the Annual General Meeting 2007, to decrease the share premium and transfer the decreased amount to distributable equity, enables actions to be taken to improve the effi ciency of equity and/or to return equity to shareholders. The year 2008 saw several steps taken towards the targeted capital structure. The Group made a capital repayment of EUR 0.23 per share to shareholders and started the share buy- back program.
The dividend policy of F-Secure Corporation is to pay approximately half of its annual profi ts as dividend. Subject to circumstances, the company may deviate from this policy.
The Board called an Extraordinary General Meeting on October 28 to decide on the return of equity from the Company's invested unrestricted equity and on the consequent changes affecting the subscription price of the Company's existing option programs. The proposal was approved and the capital repayment of total EUR 35.7 million or EUR 0.23 per share was paid to shareholders in November. In addition, the subscription price of the stock options, which can be subscribed for and which belong to the option programs 2002 and 2005, were lowered by EUR 0.23 per stock option.
In October, the Group announced the repurchase of its own shares. The shares are repurchased through public trading on NASDAQ OMX Helsinki in accordance with its rules and at market price. The total number of own shares repurchased at the end of December was 717 000 shares, corresponding to 0.5% of the company's shares and voting rights. Currently, the number of own shares owned by the Group totals 1 000 000 shares, corresponding to 0.6% of the company's shares and voting rights. Based on the authorization, the maximum amount to be repurchased is 2 500 000 shares, representing 1.6% of all the shares issued by the Company. The buy-back of own shares is based on the authorization of the Annual General Meeting 2008 and is valid until the next Annual General Meeting.
Further information on the Group's share repurchases can be found in the note 16 to the fi nancial statements.
The Group's personnel totaled 718 at the end of the year (566). The average number of personnel was 652 (528). The Group's number of personnel increased compared to the previous year driven by the business growth in mainly the global Sales and Marketing and in the R&D organizations. Given the rapid recruitment in the fi rst 9 months of 2008 (144 persons), the Group slowed down its personnel growth in the fourth quarter, with an increase of 8 persons.
The Group's Executive Team consists of the following persons: Ari Alakiuttu (Vice President, Human Resources), Kimmo Alkio (President and CEO), Pirkka Palomäki, (Chief Technology Offi cer), Antti Reijonen, (Vice President, Strategy), Seppo Ruotsalainen (Senior Vice President, Sales and Geographical Operations) and Taneli Virtanen (Chief Financial Offi cer).
Despite the current economic conditions, the Group saw no material changes to the risks and uncertainties during the reporting period. The current situation in the global economy did not have a major impact on F-Secure's businesses during the fourth quarter. However, as the uncertainty in the economic environment has increased, the Group is closely monitoring the developments in the economic and fi nancial markets.
The Group's risks and uncertainties are related to, among other things, the competitiveness of the Group's product portfolio, competitive dynamics in the industry, impact of changes in technology, timely and successful commercialization of complex technologies as new products and solutions, the ability to protect own intellectual property (IPR) in the Group's solutions as well as the use of third party technologies on reasonable commercial terms, subcontracting relationships, regional development in new growth markets, sustainability of partner relationships, service quality level requirements and the overall development of value added security solutions in the Service Provider and mobile operator market.
In December 2008, F-Secure Inc. the U.S. subsidiary of F-Secure Corporation, was named as a defendant in a patent infringement lawsuit fi led in a state court in the U.S. F-Secure is investigating the claims and will defend itself accordingly. The Group does not expect any material impact on its fi nancials from this lawsuit.
The dispute process with SRV Viitoset Oy is closed. F-Secure was sentenced to pay by the Helsinki District Court and did not receive a leave to appeal for Supreme Court. F-Secure has paid and periodied the costs over the period of the lease contract.
F-Secure divested some of its network control technology in October. The sale improved the operating profi t for 2008 by 0.8 million.
The group complies with the Corporate Governance recommendations for public listed companies published in October 2008 by the Securities Market Association, a body established by the Confederation of Finnish Industries EK, the Central Chamber of Commerce, and NASDAQ OMX Helsinki Ltd., as explained on the Group's web pages.
According to the Euroclear Finland Ltd., F-Secure's largest shareholders at the end of 2008 were Finnish private households (60.0%), Finnish public sector institutions (11.3%), Finnish fi nancial and insurance institutions (24.7%), foreign investors (0.3%), Finnish corporations (2.4%) and Finnish non-profi t organizations (1.4%). Shareholders that have more than 5% of the shares and votes in F-Secure are Risto Siilasmaa (40.4%) and Ilmarinen mutual pension insurance company (6.8%).
At the year-end, F-Secure's share price was 1.88 (2.45), lowest price 1.73 and highest price 3.05. At the end of December, the market capitalization of F-Secure Corporation shares was 293 million (380). Trading volume in 2008 was 64 million shares (80) or EUR 154 million (186) on the NASDAQ OMX Helsinki Ltd. P/E ratio was 14.9 (24.6).
Further information on shares, shareholders and the share ownership of the Board of Directors and the Executive team can be found on note 26 to the fi nancial statements.
In January, the Group announced a subscription of shares based on the option programs F-Secure 2002 Warrant plan. The details of this subscription are explained under the section shares, shareholders' equity, and option programs.
No material changes regarding the Group's business or fi nancial position have materialized after the end of December 31, 2008.
The Annual General Meeting on March 26, 2008 confi rmed the fi nancial statements for the fi scal year 2007. The members of the Board and the President and CEO were granted a discharge from liability. The AGM approved the dividend of EUR 0.07 per share to be paid to registered shareholders on the record date of March 31, 2008. The dividend was paid on April 8, 2008.
It was decided that the number of Board members is six. The following members were re-elected to the Board of Directors: Marko Ahtisaari, Sari Baldauf, Pertti Ervi, Risto Siilasmaa, and Alex Sozonoff. Juho Malmberg was elected as a new member. Ernst & Young Oy was elected the Group's auditor.
In the fi rst meeting of the Board Mr. Siilasmaa was elected Chairman. The Board nominated Ms. Baldauf as the chairman of the Executive Committee. The members are Mr. Alex Sozonoff and Mr. Risto Siilasmaa. The Board nominated Mr. Ervi as the chairman of the Audit Committee. The members are Mr. Marko Ahtisaari and Mr. Juho Malmberg. It was decided that the annual compensation for the chairman is EUR 55 000, for the chairmen of Executive and Audit Committee EUR 40 000 and for members EUR 30 000. Approximately 40% of the annual remuneration will be paid as company shares.
The AGM authorized the Board to decide on directed share issues and their terms. The authorization is valid for the period of one year. The maximum cumulative number of issued new shares is 40 000 000. The authorization is unused. The AGM decided that the total amount of the subscription prices paid for new shares issued after the date of the Annual General Meeting, based on stock options under the F-Secure Stock Option Plans 2002 and 2005, be recorded in company's distributable equity.
The AGM also decided that the Board may pass a resolution to purchase a maximum of 15 513 111 shares of the Company. The amount represents approximately 10% of all the shares issued by the Company. The authorization is valid for one year. It was decided that the Board may decide on a transfer of a maximum of 15 513 111 own shares of the Company either against consideration or without payment. The authorization is valid for one year. The Board of Directors is authorized to transfer the shares in deviation from the shareholders' pre-emptive rights (directed transfer) subject to the provisions of the applicable law.
The demand for internet security and other related services continues to increase, along with the growing number of Internet broadband connections and the expansion of Internet. The long term endpoint security market compound annual growth rate is expected to be around 10% between 2007–2012. Furthermore in 2009 the endpoint security market growth is anticipated to be around 8% over the prior year. (Source: IDC, Worldwide Security Products 2008–2012 Forecast: Postcrisis, Doc # 215745, December 2008).
The Group's fi rst priority is to drive strong growth. The core growth driver is the ISP channel where the Group has a strong foothold globally. The Group's target is to be the leader in providing security and other related services to consumers through Service Providers. In addition, the Group is developing its operations in other channels, e.g. electronic sales, to drive long term growth.
The Group pursues investments in new value-added services for both PC and mobile users to augment the existing security services. The Group continues to drive innovation also in the traditional IT security, enabling the secure use of internet.
During the next three years, the Group aims to continue to exceed the average market growth rates in revenues. The company seeks the EBIT level to be around 25%.
In Q408, the prevailing economic conditions had little, if any, impact on the Group's business. During the year 2009 the Group seeks to continue to exceed the average market growth.
The Group revenues for the fi rst quarter of 2009 are estimated to be between 29.5 million and 31.5 million. Costs level is estimated to be below 22.5 million.
The revenue estimate is based on the sales pipeline at the time of publishing, existing subscriptions and support contracts and current EUR/USD exchange rate of 1.35.
The Board of Directors is proposing to the Annual General Meeting to be held on March 26, 2009 a dividend of EUR 0.07 per share to be paid from the distributable shareholders' equity on December 31, 2008. The suggested dividend record date is March 31, 2009 and the payment date April 7, 2009. The dividend payout ratio is 56%.
According to the fi nancial statements on December 31, 2008, the parent company distributable equity totaled 37.6 million. No material changes have taken place in the company's fi nancial position after the balance sheet date and the proposed dividend does not compromise the company's fi nancial standing.
In Helsinki, 11th February 2009 F-Secure Corporation Board of Directors
Risto Siilasmaa Marko Ahtisaari Sari Baldauf Pertti Ervi Juho Malmberg Alexis Sozonoff
| Nov 17, 2008 | Subscription of F-Secure shares with F-Secure 2002 warrants |
|---|---|
| Oct 29, 2008 | F-Secure to start repurchase of own shares |
| Oct 28, 2008 | Resolutions of the F-Secure's Extraordinary General Meeting |
| Oct 21, 2008 | F-Secure Group Interim Report January 1 - September 30, 2008 |
| Oct 15, 2008 | Ilmarinen Mutual Pension Insurance Company's holding in F-Secure exceeds 5% |
| Oct 8, 2008 | Invitation to the Extraordinary General Meeting of shareholders |
| Aug 27, 2008 | Subscription of F-Secure shares with F-Secure 2002 warrants |
| Jul 29, 2008 | F-Secure Group January 1 - June 30, 2008 Financial Results |
| May 20, 2008 | Subscription of F-Secure shares with F-Secure 2002 warrants |
| May 5, 2008 | Announcement pursuant to Securities Act Chapter 2, Section 10 |
| Apr 23, 2008 | F-Secure Group Financial Results January 1 - March 31, 2008 |
| Apr 4, 2008 | Announcement pursuant to Securities Act Chapter 2, Section 10 |
| Mar 26, 2008 | Annual General Meeting of F-Secure Corporation |
| Mar 6, 2008 | Invitation to the Annual General Shareholders' Meeting |
| Mar 6, 2008 | Decision of Helsinki Court of Appeal on dispute between F-Secure and SRV Viitoset Oy favorable to SRV |
| Feb 29, 2008 | 2005 A-warrants of F-Secure Corporation listed on March 3, 2008 |
| Feb 14, 2008 | F-Secure Corporation's fi nancial statement 2007 and board's proposals to the AGM |
| Jan 30, 2008 | F-Secure Group January 1 - December 31, 2007, Financial Results |
| Jan 7, 2008 | Subscription of F-Secure shares with F-Secure 2002 warrants |
| F-Secure Consolidated | |
|---|---|
| Income statement | 11 |
| Balance sheet | 12 |
| Cash fl ow statement | 13 |
| Statement of changes in shareholders' equity | 14 |
| Notes to the fi nancial statements | 14 |
| F-Secure Corporation | |
| Income statement | 32 |
| Balance sheet | 32 |
| Cash fl ow statement | 33 |
| Notes to the fi nancial statements | 33 |
| Auditors' report | 42 |
| Equity ratio, % | Shareholders' equity + minority interest |
|---|---|
| Balance total - received advance payments | |
| ROI, % | Result before taxes + fi nancial expenses |
| Balance total - non-interest bearing liabilities (average) | |
| ROE, % | Result before taxes - taxes |
| Shareholders' equity + minority items (average) | |
| Gearing, % | Interest bearing liabilities - cash and bank accounts, liquid fi nancial assets |
| Shareholders' equity + minority items | |
| Earnings per share, euro | Result before taxes - taxes +/- minority interest |
| Adjusted number of shares (average) | |
| Shareholders' equity per share, euro | Shareholders' equity |
| Adjusted number of shares, Dec 31 | |
| P/E ratio | Share price closing, Dec 31 |
| Earnings per share | |
| Dividend per earnings, % | Dividend per share |
| Earnings per share | |
| Effective dividends, % | Dividend per share |
| Share price closing, Dec 31 |
| Consolidated IFRS 2008 |
Consolidated IFRS 2007 |
||
|---|---|---|---|
| NET SALES Material and service |
(1) | 112 974 -10 269 |
96 761 -7 547 |
| GROSS MARGIN Other operating income Sales and marketing Research and development Administration |
(2) (3,4) (3,4) (3,4) |
102 705 2 631 -48 646 -25 522 -6 828 |
89 214 808 -43 168 -21 213 -6 169 |
| OPERATING RESULT Financial income and expenses Share of profi t of associate |
(6) (10) |
24 340 1 979 85 |
19 473 1 886 20 |
| PROFIT BEFORE TAXES Income taxes |
(7) | 26 403 -6 851 |
21 379 -5 934 |
| RESULT FOR THE FINANCIAL YEAR | 19 553 | 15 445 | |
| Earnings per share - basic - diluted |
(8) | 0,13 0,12 |
0,10 0,10 |
| ASSETS | Consolidated IFRS 2008 |
Consolidated IFRS 2007 |
|
|---|---|---|---|
| NON-CURRENT ASSETS Tangible assets Intangible assets Investments in associated companies Deferred tax assets Other fi nancial assets |
(9) (9) (10) (11) (13) |
3 483 3 505 113 791 194 |
3 769 3 302 42 779 148 |
| Total non-current assets | 8 086 | 8 040 | |
| CURRENT ASSETS Inventories Trade and other receivables Income tax receivables Available-for-sale fi nancial assets Cash and bank accounts |
(12) (13) (13) (14) (15) |
127 25 413 43 47 087 14 098 |
277 22 038 55 71 569 12 700 |
| Total current assets | 86 768 | 106 639 | |
| TOTAL ASSETS | 94 854 | 114 679 |
| SHAREHOLDERS' EQUITY | (16) | ||
|---|---|---|---|
| Share capital | 1 551 | 1 551 | |
| Unregistered share issues | 661 | 47 | |
| Share premium | 165 | 123 | |
| Treasury shares | -1 453 | ||
| Fair value reserve | -71 | 40 | |
| Translation differences | -350 | -3 | |
| Reserve for invested unrestricted equity | 1 465 | 33 582 | |
| Retained earnings | 39 142 | 32 198 | |
| Total shareholders' equity | 41 110 | 67 538 | |
| NON-CURRENT LIABILITIES | |||
| Deferred tax liabilities | (11) | 14 | 96 |
| Provisions | (18) | 1 286 | |
| Other non-current liabilities | (19) | 7 509 | 4 847 |
| Total non-current liabilities | 7 524 | 6 229 | |
| CURRENT LIABILITIES | (19) | ||
| Trade and other payables | 15 525 | 12 432 | |
| Income tax liabilities | 1 007 | 1 406 | |
| Other current liabilities | 29 688 | 27 075 | |
| Total current liabilities | 46 220 | 40 912 | |
| TOTAL SHAREHOLDERS' | 94 854 | 114 679 |
EQUITY AND LIABILITIES
(EUR 1000)
| Consolidated IFRS 2008 |
Consolidated IFRS 2007 |
|
|---|---|---|
| CASH FLOW FROM OPERATIONS Result for the fi nancial year Adjustments Cash fl ow from operations before change in working capital |
19 553 12 469 32 022 |
15 445 12 118 27 563 |
| Change in net working capital Current receivables, increase (-), decrease (+) Inventories, increase (-), decrease (+) Non-interest bearing debt, increase (+), decrease (-) Provisions, increase (+), decrease (-) Cash fl ow from operations before fi nancial items and taxes |
-3 012 153 2 698 -6 31 855 |
-2 572 -100 769 98 25 758 |
| Interest expenses paid Interest income received Other fi nancial income and expenses Income taxes paid Cash fl ow from operations |
-469 1 440 726 -7 269 26 284 |
-3 772 1 030 -4 890 22 667 |
| CASH FLOW FROM INVESTMENTS Investments in intangible and tangible assets Proceeds from sale of intangible and tangible assets Cash fl ow from investments |
-3 920 701 -3 219 |
-2 078 -2 078 |
| CASH FLOW FROM FINANCING ACTIVITIES Increase in share capital Treasury shares Dividends paid Capital repayment |
1 846 -1 453 -10 859 -35 719 |
64 -3 101 |
| Cash fl ow from fi nancing activities | -46 185 | -3 036 |
| Change in cash | -23 120 | 17 553 |
| Translation difference Cash and bank at the beginning of the period |
188 84 124 |
-282 66 730 |
| Cash and bank at period end | 61 192 | 84 001 |
| Change in net fair value of current available-for-sale assets | -151 | 123 |
| Cash and bank at period end | 61 041 | 84 124 |
| Consolidated IFRS |
Share capital |
Share issue |
Share premium fund |
Treasury shares |
Fair value reserve |
diff. | Transl. Unrestricted equity reserve |
Retained earnings |
Total equity |
|---|---|---|---|---|---|---|---|---|---|
| Equity Dec 31, 2006 Available-for-sale fi nancial assets, net Translation difference |
1 549 | 69 | 33 619 | -51 91 |
31 -34 |
18 955 | 54 171 91 -34 |
||
| Total income and expense for the year recognised directly in equity Result of the fi nancial year |
91 | -34 | 15 445 | 57 15 445 |
|||||
| Total income and expense for the year | 91 | -34 | 15 445 | 15 502 | |||||
| Dividends Registration of share issue Exercise of options Cost of share based payments |
1 0 |
-69 47 |
68 17 |
-3 101 902 |
-3 101 64 902 |
||||
| Other changes | -33 581 | 33 582 | -1 | ||||||
| 1 | -22 | -33 496 | 33 582 | -2 199 | -2 134 | ||||
| Equity Dec 31, 2007 | 1 550 | 47 | 123 | 40 | -3 | 33 582 | 32 200 | 67 539 | |
| Available-for-sale fi nancial assets, net Translation difference |
-112 | -350 | -112 -350 |
||||||
| Total income and expense for the year recognised directly in equity Result of the fi nancial year |
-112 | -350 | 19 553 | -461 19 553 |
|||||
| Total income and expense for the year | -112 | -350 | 19 553 | 19 091 | |||||
| Dividends Capital repayment Other changes ref capital repayment Acquisition of treasury shares |
-1 453 | -35 719 2 418 |
-10 859 -2 418 |
10 859 -35 719 -1 453 |
|||||
| Registration of share issue Exercise of options Cost of share based payments |
1 | -47 661 |
46 | 1 184 | 666 | 1 845 666 |
|||
| 1 | 615 | 46 | -1 453 | -32 118 | -12 611 | -45 520 | |||
| Equity Dec 31, 2008 | 1 551 | 661 | 169 | -1 453 | -71 | -353 | 1 465 | 39 142 | 41 111 |
F-Secure produces services and software protection for individuals and businesses against computer viruses and other threats coming through the Internet or mobile networks.
The parent company of the Group is F-Secure Corporation incorporated in Finland and domiciled in Helsinki. Company's registrant address is Tammasaarenkatu 7, 00180 Helsinki. A copy of consolidated fi nancial statement can be received from Internet address www.f-secure.com or parent company's registrant address.
In their meeting on 11 February 2009 the Board of Directors of F-Secure Corporation have agreed to permit the publication of the consolidated fi nancial statements of F-Secure Corporation for the year 2008. According to the Finnish Companies Act, the Annual General Meeting can confi rm or reject the consolidated fi nancial statement after publication. The General Annual Meeting can also decide to change the fi nancial statement.
The consolidated fi nancial statements of F-Secure Corporation have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. The disclosures also conform to Finnish Accounting legislation. The Group has adopted the following new or amended Standards and Interpretations during the year.
IFRIC 11: IFRS 2 – Group and Treasury Share Transactions. The interpretation clarifi es those regulations which concern equity-settled payments and requires revaluation on subsidiary level. The interpretation had no impact on the fi nancial statement.
IFRIC 14: IAS 19 – The Limit on a Defi ned Benefi t Asset, Minimum Funding Requirements and the Interaction. As the Group had no such arrangement mentioned in the interpretation, the interpretation had no impact on the fi nancial statements.
IAS 39 amendment – Recognition and measurement and IFRS 7 Financial Instruments – Disclosure. Reclassifi cation of Financial assets issued in October 2008 due to the international fi nancial crises and covers the reclassifi cation of certain fi nancial assets. As the Group had no such fi nancial assets, which need regrouping, the revised standard had no impact on the fi nancial statements. Amended standards became effective for fi nancial years beginning on 1 July 2008 and are adopted by the EU.
The preparation of fi nancial statements in accordance with IFRS requires the use of estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the fi nancial statements, and the reported amounts of revenues and expenses during reporting periods. Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from those estimates. The key assumptions concerning the future and other key sources of estimation, that have a signifi cant risk of causing an adjustment to the carrying amounts of assets and liabilities, are impairment of assets and development expenditures carried forward.
Subsidiaries in which F-Secure Corporation's holding exceeds 50 percent are consolidated in the fi nancial statements. Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. The Company's holding in the associated companies is also consolidated. The Group's investment in its associate is accounted for under the equity method of accounting. The income statement refl ects the share of the results of operations of the associate. Equity accounting is discontinued when the carrying amount of the investment in an associated company reaches zero, unless the Group has incurred or guaranteed obligations in respect of the associated company.
All intra-group transactions and balances, including unrealized profi ts arising from intra-group transactions, have been eliminated on consolidation. Where necessary, the accounting policies of subsidiaries have been adjusted to ensure consistency with the policies adopted by the Group.
The presentation currency of F-Secure Group is the euro, which is the measurement currency of the parent. For purposes of inclusion in the consolidated fi nancial statements, the balance sheet of each foreign entity is translated into euros at the exchange rates prevailing at the balance sheet date. The income statement of each foreign entity is translated at the average exchange rates for the fi nancial year. The resulting net translation difference is recorded in the shareholders' equity.
The Consolidated Cash Flow Statement has been prepared by translating each subsidiary's individual cash fl ow statements at the average exchange rates for the fi nancial year.
Foreign currencies are translated into the local currency using fi xed monthly exchange rates. At the balance sheet date, assets and liabilities denominated in foreign currencies are translated at the rates of exchange prevailing at that date. Exchange rate gains and losses of fi nancial transactions are recognized in the income statement under fi nancial items.
Other tangible assets include renovation costs of rented offi ce space. Intangible assets include software licenses. Intangible assets recognized separately from goodwill in acquisitions consist of technology-based intangible assets. Tangible and intangible assets are recorded at historical cost less accumulated depreciation. Depreciation is recorded on a straight-line basis over the estimated useful life of an asset. The estimated useful lives of tangible and intangible assets are as follows:
| Machinery and equipment | 3–8 years |
|---|---|
| Other tangible assets | 5–10 years |
| Capitalized development costs | 3 years |
| Intangible assets | 5–10 years |
Ordinary repairs and maintenance costs are charged to the income statement during the fi nancial period in which they are incurred. The cost of major renovations is included in the assets' carrying amount when it is probable that the Group will derive future economic benefi ts in excess of the originally assessed standard or performance of the existing asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset is derecognized.
Government grants are recognized at their fair value where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. When the grant relates to an expense item, it is recognized as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate. These grants are recognized as other operating income in the income statement. Government grants related to an asset are deducted from the acquisition cost of the asset and recognized as income by reducing the depreciation charge of the asset they relate to.
Research costs are expensed as incurred. Development expenditures incurred on individual projects of totally new products or product versions with signifi cant new features are carried forward when they are technically feasible and their future recoverability can reasonably be regarded as assured.
Inventories are valued at the lower of cost and net realizable value with cost being determined by fi rst-in fi rst-out method. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
Leases where the lessor retains substantially all the risks and benefi ts of ownership of the asset are classifi ed as operating leases. The Group has only operating leases. Operating lease payments are recognized as an expense in the income statement on a straight-line basis over the lease term. Leases of unused offi ce space are recognized as other operating income in the income statement on straight-line basis over the lease term.
At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and written down to its recoverable amount. Recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash infl ows that are largely independent of those from other assets or groups of assets. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognized. The increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Impairment losses relating to Goodwill cannot be reversed in future periods.
All of F-Secure Group's pension arrangements are in accordance with local statutory arrangements and defi ned contribution plans. Contributions to defi ned contribution plans are recognized in the income statement in the period to which the contributions relate. The Group recognizes disability commitment of Finnish TYEL pension plan when disability appears.
In the Company's industry it is common practice internationally that incentives are provided to employees in the form of equity-settled sharebased instruments. Company has two kinds of incentive programs; warrant-based programs and a share-based program.
The Company's warrant programs cover key personnel. The cost of equity-settled transactions with employees is measured by reference to the fair value at the date on which they are granted. The fair value is determined by using the Binomial model. The cost of equity-settled transactions is recognized, together with a corresponding entry in equity, over the period in which the performance conditions are fulfi lled, ending on the date on which the relevant employees become fully entitled to the award (vesting date). If the holder of the warrant leaves company before vesting the warrant is forfeited. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date refl ects the extent to which the vesting period has expired and the number of awards that, in the opinion of the directors of the Group at that date, based on the best available estimate of the number of equity instruments that will ultimately vest. The Group has two warrant programs in force, which were issued before the new Company Act, September 1, 2006. Proceeds from exercised warrants concerning these programs are recognized in shareholders' equity under share capital and share premium fund. After the Shareholders' meeting on 26th March 2008 the proceeds from exercised warrants attached to these programs are recognized in the unrestricted equity reserve.
The share-based incentive program has been established as part of the key employee incentive and retention system inside F-Secure Group. Reward will be settled in two phases so that one part is settled as equitysettled payment and one part as cash-settled payment. Cost of equitysettled transactions is measured by reference to the fair value by using market price of F-Secure Corporation share at the date on which they are granted and cost of cash-settled by using market price of F-Secure Corporation on the date of balance sheet. The cost is recognized over the period in which the performance conditions are fulfi lled, ending on the date on which the relevant employees become fully entitled to the reward (end of lock-up period).
The cost of equity-settle corresponding entry is recognized in equity and cost of cash-settle in liabilities. If relevant employee leaves company before fully entitled to the reward, the reward is forfeited. The cumulative expense recognized for share-based incentive program transactions at each reporting date is based on the best available estimate of the number of equity instruments that will ultimately fulfi ll.
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outfl ow of resources embodying economic benefi ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
As the market price of the Company's share rises, the value of the warrant program rises accordingly. This will generate taxable income to the personnel when the warrants are realized. In certain countries the employer must pay social charges based on the taxable income triggered by the realization of the warrants. The provision has been matched against the realized social costs. The provision is measured based on the fair value of the options, and the amount of provision is adjusted to refl ect the change in the share price. The market price of the Company's share as of December 31, 2008 was 1.88 euro.
In September 2005, by the decision of Helsinki District Court, F-Secure was sentenced to pay additional construction and refurbishment work done at the Group's headquarter premises and litigation costs plus interest to SRV Viitoset Oy. F-Secure decided to recognize the obligation. Construction costs were allocated over the rental period until the year 2010 starting September 2005. After the decision made by the Helsinki Court of Appeal in March 2008 the obligation was paid and the provision was reversed. The Group did not receive a leave to appeal from the Supreme Court.
Direct current taxes are calculated on the results of all Group companies in accordance with the local tax and accounting rules in each country. Deferred taxes, resulting from temporary differences between the fi nancial statement and the income tax basis of assets and liabilities, use the enacted tax rates in effect in the years in which the differences are expected to reverse. Deferred tax assets are recognized to the extent that it is probable that future taxable profi t will be available.
Revenue is primarily derived from software license agreement sales and monthly content security service sales. License agreements consist of initial license agreements and periodic maintenance agreements covering product updates and customer support. The revenue recognition policy of F-Secure Group recognizes the license fee revenues as the product is delivered, and the maintenance revenues are recognized ratably over the period covered by the maintenance contract, and the service revenue is recognized at the time of delivery. Indirect taxes, discounts granted and exchange rate differences are excluded from net sales.
Other operating income includes profi ts from the sales of fi xed assets, rental revenue, and government grants received for research and development projects.
Classifi cation of the functionally presented expenses has been made as follows: various types of expenses in different geographical locations have been allocated to the various functions by allocating to directly allocable expenses to the respective function, and other operating expenses have been allocated to functions on the basis of average headcount in each location.
Parent company has acquired treasury shares. The cost of acquisition is recognized as a deduction in the shareholders' equity.
According to IAS 39 standard, fi nancial assets have been classifi ed into fi nancial assets at fair value through profi t or loss, held-to-maturity, loans and receivables originated by the enterprise and available-forsale fi nancial assets. The classifi cation is dependent on the purpose for which the assets were acquired. Purchases and sales of fi nancial assets are recognized on the trade date i.e. the date that the Group commits to purchase the asset. The cost of purchase includes transaction costs. Financial assets are currently classifi ed as loans and receivables and available-for-sale fi nancial asset.
Loans and receivables originated by the enterprise are measured at amortized cost. Trade receivables are carried at the original invoice amount to customers less an estimate made for doubtful receivables. Outstanding receivables are reviewed periodically and bad debts are written off when identifi ed.
Available-for-sale fi nancial assets consist of interest-bearing debt securities and shares in mutual funds invested in similar instruments. For assets that are actively traded in organized fi nancial markets, fair value is determined by reference to Stock Exchange quoted market bid prices at the close of business on the balance sheet date. Assets, the fair value of which cannot be measured reliably, are recognized at cost less impairment. The fair value changes of available-for-sale fi nancial assets are recognized in shareholders' equity under fair value reserve. When fi nancial assets recognized as available-for-sale is sold, the accumulated fair value changes are released from equity and recognized in the income statement.
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and other highly liquid short-term investments.
For the purpose of the consolidated cash fl ow statement, cash and cash equivalents consist of cash and cash equivalents as defi ned above.
The Group uses derivative fi nancial instruments such as forward currency contracts to hedge its risks associated with foreign currency fl uctuations. Such derivative fi nancial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently recognized at fair value. Any gains and losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken directly to net profi t or loss for the year. The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profi les.
The Group has not applied the following new or revised Standards and Interpretations that have been issued, but are not yet effective.
IFRIC 12: Service Concession Arrangements. As the Group had no such arrangement mentioned in the interpretation, the interpretation has no impact on the Group's fi nancial statements. Interpretation becomes effective for fi nancial years beginning on or after 1 January 2008 and is not adopted by the EU.
IFRIC 13: Customer Loyalty Programmes. As the Group had no such programmes mention in the interpretation, the interpretation will have no impact on the Group's fi nancial statements in the period of initial application. Interpretation becomes effective for fi nancial years beginning on or after 1 July 2008 and is adopted by the EU.
IFRS 8 Operating Segments. According to the standard the segment information represented is based on the management reporting and the accounting principles used in it. The adopting of the new standard will not change the segment reporting in the Group. The Group expects that it will have impact on the disclosures of Group's fi nancial statements in the period of initial application. Standard becomes effective for fi nancial years beginning on or after 1 January 2009 and is adopted by the EU.
IAS 23 Amendment: Borrowing costs. The revised standard requires capitalization of borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets. The Group expects that adoption of the revised Standard will have no impact on the on the Group's fi nancial statements in the period of initial application. Amended standard becomes effective for fi nancial years beginning on or after 1 January 2009 and is adopted by the EU.
IAS 1 Amendment: Presentation of Financial Statements. The Group expects that adoption of the revised Standard will have impact on Group's fi nancial statements in the period of initial application. Amended standard becomes effective for fi nancial years beginning on or after 1 January 2009 and is adopted by the EU.
IFRS 3 Business Combinations – revised. The Group expects that adoption of the revised Standard will have impact on Group's fi nancial statements in the period of initial application. Amended standard becomes effective for fi nancial years beginning on or after 1 July 2009 and is not adopted by the EU.
IAS 27 Amendment: Consolidated and Separate Financial Statements. The Group expects that adoption of the revised Standard will have impact on Group's fi nancial statements in the period of initial application. Amended standard becomes effective for fi nancial years beginning on or after 1 July 2009 and is not adopted by the EU.
IFRS 2 Amendment: Vesting Conditions and Cancellations. The Group expects that adoption of the revised Standard will have no impact on the Group's fi nancial statements in the period of initial application. Amended standard becomes effective for fi nancial years beginning on or after 1 January 2009 and is adopted by the EU.
IAS 1 and IAS 32 Amendment: Puttable Financial Instruments and Obligations Arising on Liquidation. The Group expects that adoption of the revised Standards will have no impact on the Group's fi nancial statements in the period of initial application. Amended standards become effective for fi nancial years beginning on or after 1 January 2009 and are adopted by the EU.
Improvements to IFRSs. There are separate transitional provisions for several standards, but the Group expects that adoption of the improvements will have no signifi cant impact on the Group's fi nancial statements in the period of initial application. Improvements become effective for fi nancial years beginning on or after 1 January 2009 and are adopted by the EU.
IFRS 1 and IAS 27 amendments: Cost of an Investment in a subsidiary, Jointly Controlled Entity or Associate. The new requirements affect only those companies, which will fi rst time apply IFRS and have no impact on the Group's fi nancial statements in the period of initial application. Amended standards become effective for fi nancial years beginning on or after 1 January 2009 and are adopted by the EU.
IAS 39 Amendment: Eligible Hedged Items. The Group expects that adoption of the revised Standard will have no impact on the Group's fi nancial statements in the period of initial application. Amended standard becomes effective for fi nancial years beginning on or after 1 July 2009 and is not adopted by the EU.
IFRIC 15 Agreements for the Construction of Real Estate. Group does not conduct Real Estate Business so the interpretation will have no impact on the Group's fi nancial statements in the period of initial application. Interpretation becomes effective for fi nancial years beginning on or after 1 January 2009 and is not adopted by the EU.
IFRIC 16 Hedges and Net Investment in a Foreign Operation. The Group expects that interpretation will have impact on the disclosures of Group's fi nancial statements in the period of initial application. Interpretation becomes effective for fi nancial years beginning on or after 1 October 2008 and is not adopted by the EU.
IFRIC 17 Distribution of Non-cash Assets to Owners. The Group expects that interpretation will have impact on the disclosures of Group's fi nancial statements in the period of initial application. Interpretation becomes effective for fi nancial years beginning on or after 1 July 2009 and is not adopted by the EU.
The Group's primary reporting format is business segment and its secondary format is geographical segment. The Group has one business segment; data security. The Group's geographical segments are determined by the location of the Group's assets and operations.
| Consolidated | Finland and | Rest of | North | Rest of | Group |
|---|---|---|---|---|---|
| Dec 31, 2008 | Scandinavia | Europe | America | the world | |
| Sales to external customers | 43 719 | 48 955 | 9 808 | 10 492 | 112 974 |
| Segment assets | 86 058 | 836 | 2 977 | 4 983 | 94 854 |
| Capital expenditures | 2 519 | 129 | 15 | 414 | 3 078 |
| Consolidated | Finland and | Rest of | North | Rest of | Group |
| Dec 31, 2007 | Scandinavia | Europe | America | the world | |
| Sales to external customers | 38 078 | 41 816 | 8 946 | 7 921 | 96 761 |
| Consolidated 2008 |
Consolidated 2007 |
|
|---|---|---|
| Rental revenue Goverment grants Sale of technology |
297 1 276 825 |
417 328 |
| Other | 234 | 64 |
| Total | 2 631 | 808 |
| Depreciations from non-current assets | ||
|---|---|---|
| Other capitalized expenditure Capitalized development |
-695 -561 |
-714 -540 |
| Intangible assets | -1 256 | -1 255 |
| Machinery & equipment Other tangible assets |
-1 454 -304 |
-1 247 -257 |
| Tangible assets | -1 757 | -1 504 |
| Total depreciation | -3 013 | -2 759 |
| Depreciations by function | ||
| Sales and marketing Research and development |
-1 195 -1 681 |
-1 272 -1 368 |
Administration -137 -119
Total depreciation -3 013 -2 759
(EUR 1000)
| Personnel expenses | Consolidated 2008 |
Consolidated 2007 |
|---|---|---|
| Wages and salaries | -35 828 | -29 857 |
| Pension expenses - defi ned contribution plan | -4 909 | -3 954 |
| Share-based payments | -744 | -902 |
| Other social expenses | -2 775 | -2 554 |
| Total | -44 256 | -37 267 |
| Employee benefi ts of Management are stated in disclosure 25. Related party transactions. Share-based payments are stated in disclosure 17. Share-based payment transactions. |
||
| Average number of personnel | 652 | 528 |
| Personnel by function Dec 31 | ||
| Sales and marketing | 328 | 264 |
| Research and development | 340 | 261 |
| Administration | 50 | 41 |
| Total | 718 | 566 |
| 5. AUDIT FEES | ||
| Audit fees | -99 | -108 |
| Tax consulting | -36 | -66 |
| Other consulting | -67 | -6 |
| -202 | -180 | |
| 6. FINANCIAL INCOME AND EXPENSES | ||
| Interest income | 1 269 | 818 |
| Interest expense | -25 | -99 |
| Other fi nancial income | 1 187 | 1 087 |
| Exchange gains and losses | -288 | 158 |
| Other fi nancial expenses | -165 | -78 |
| Total fi nancial income and expenses | 1 979 | 1 886 |
| Financial income and expenses from loans and receivables | ||
| Interest income | 342 | 299 |
| Interest expense | -5 | -3 |
| Exchange gains and losses | -35 | -113 |
| Total | 302 | 183 |
| Financial income and expenses from Available-for-sale fi nancial assets | ||
| Interest income | 927 | 519 |
| Other fi nancial income | 1 184 | 1 084 |
| Total | 2 112 | 1 603 |
| Consolidated 2008 |
Consolidated 2007 |
|
|---|---|---|
| Income taxes of the business activity Income taxes from previous years Deferred tax |
-6 943 37 56 |
-6 008 47 27 |
| Total | -6 851 | -5 934 |
A reconciliation of income tax expense applicable to accounting profi t before income tax at the statutory income tax rate to income tax expense at the Groups' effective income tax rate for the years ended 31 December 2008 and 2007 is as follows:
| Result before taxes | 26 403 | 21 379 |
|---|---|---|
| Income taxes at statutory rate of 26% Taxes on foreign subsidiaries' net income in |
-6 865 | -5 559 |
| excess of income taxes at statutory rates | -88 | -33 |
| Non-deductible expenses | 51 | -389 |
| Unrecognised tax losses | -5 | |
| Income taxes from previous years | 37 | 47 |
| Other | 15 | 4 |
| Total taxes | -6 851 | -5 934 |
Basic earnings per share amounts are calculated by dividing net profi t for the year attributable on ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share amounts are calculated by dividing the net profi t attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year adjusted for the effects of dilutive options.
| Net profi t attributable to equity holders from continuing operations | 19 553 | 15 445 |
|---|---|---|
| Weighted average number of ordinary shares (1 000) | 155 302 | 155 041 |
| Effect of dilution: share options | 5 969 | 6 424 |
| Adjusted weighted average number of ordinary shares for diluted earning per share |
161 270 | 161 464 |
| Basic earnings per share (EUR/share) | 0.13 | 0.10 |
| Diluted earnings per share (EUR/share) | 0.12 | 0.10 |
| Consolidated | INTANGIBLE ASSETS Other cap. expenditure |
Capitalized development |
Total | TANGIBLE ASSETS Machinery & equip. |
Other Tangible |
Total |
|---|---|---|---|---|---|---|
| Acquisition cost Jan 1, 2007 Translation difference Additions Disposals |
10 235 -10 392 |
2 033 125 |
12 268 -10 517 |
9 312 -147 1 380 -8 |
1 960 -51 263 -42 |
11 272 -198 1 643 -50 |
| Acquisition cost Dec 31, 2007 Translation difference Additions Disposals |
10 617 62 625 -4 392 |
2 159 533 |
12 775 62 1 158 -4 392 |
10 537 63 1 794 -91 |
2 130 20 126 |
12 668 83 1 920 -91 |
| Acquisition cost Dec 31, 2008 | 6 911 | 2 692 | 9 603 | 12 303 | 2 277 | 14 580 |
| Acc. depreciations Jan 1, 2007 Translation difference Depreciation of the fi nancial year Depreciation of decreases |
-7 069 13 -714 |
-700 -540 |
-7 769 13 -1 254 |
-7 137 125 -1 237 3 |
-908 22 -254 21 |
-8 045 147 -1 491 24 |
| Acc. depreciations Dec 31, 2007 Translation difference Depreciation of the fi nancial year Depreciation of decreases |
-7 770 -44 -704 4 220 |
-1 240 -561 |
-9 010 -44 -1 265 4 220 |
-8 246 -37 -1 467 87 |
-1 119 -8 -306 |
-9 365 -45 -1 773 87 |
| Acc. depreciations Dec 31, 2008 | -4 298 | -1 801 | -6 099 | -9 663 | -1 433 | -11 097 |
| Book value as at Dec 31, 2007 Book value as at Dec 31, 2008 |
2 847 2 612 |
919 891 |
3 766 3 503 |
2 291 2 640 |
1 011 843 |
3 302 3 483 |
| Consolidated 2008 |
Consolidated 2007 |
|
|---|---|---|
| Book value as at Jan 1 Share of associated companies' results |
41 72 |
21 20 |
| Book value as at Dec 31 | 113 | 41 |
| Associate's balance sheet, revenue and profi t | ||
| Assets | 898 | 813 |
| Liablities | 554 | 669 |
| Revenue | 1 857 | 1 600 |
| Profi t | 240 | 79 |
| Associated companies | Group (%) | |
| Vineyard International Ltd, Helsinki Finland | 32.9 | |
| Deferred tax assets | ||
|---|---|---|
| Other temporary differences | 766 | 566 |
| From provisions | 213 | |
| Tax charged to shareholders' equity | ||
| Change in fair value, available-for-sale | 25 | |
| Total | 791 | 779 |
| Deferred tax liability | ||
| Fair value adjustments on acquisition | 14 | 82 |
| Tax charged to shareholders' equity Change in fair value, available-for-sale |
14 | |
| Total | 14 | 96 |
At December 31, 2008 the Group had no losses carried forward.
| 12. INVENTORIES | ||
|---|---|---|
| Consolidated 2008 |
Consolidated 2007 |
|
| Other inventories | 127 | 277 |
No impairment was recognized from inventories in years 2008 and 2007.
As at 31 December 2008, trade receivables at nominal value of 581 thousand eur (2007: 458 thousand eur) were collectively impaired and fully provided for.
| Book value as at Jan 1 charge for the year Utilised |
458 349 -226 |
377 354 -273 |
||||
|---|---|---|---|---|---|---|
| Book value as at Dec 31 | 581 | 458 | ||||
| Ageing analysis of trade receivables | total | not due | past due < 90 days |
past due > 90 days |
||
| As at 31 Dec, 2008 As at 31 Dec, 2007 |
20 121 17 958 |
15 085 13 268 |
4 995 4 650 |
41 40 |
||
| Material items included in prepaid expenses and accrued income | ||||||
| Prepaid expenses Prepaid expenses, royalty Accrued interest |
1 821 2 536 10 |
1 263 1 941 216 |
||||
| Total | 4 367 | 3 419 |
Available-for-sale fi nancial assets consist of interest-bearing debt securities and shares in funds invested in similar instruments. For assets that are actively traded in organized fi nancial markets, fair value is determined by reference to Stock Exchange quoted market bid prices at the close of business on the balance sheet date. Assets, which fair value cannot be measured reliably, are recognized at cost less impairment. The fair value changes of available-for-sale fi nancial assets are recognized in shareholders' equity under fair value reserve.
| Fair value as at Jan 1 | 71 568 | 54 662 |
|---|---|---|
| Additions/deductions, net | -24 385 | 16 784 |
| Change in fair value | -96 | 123 |
| Fair value as at Dec 31 | 47 086 | 71 569 |
| Shares - unlisted Maturity date more than 3 months Maturity date less than 3 months |
143 46 943 |
144 5 702 65 723 |
| Fair value as at Dec 31 | 47 086 | 71 569 |
| Acquisition value as at Dec 31 | 47 183 | 71 514 |
| 15. CASH AND SHORT-TERM DEPOSITS | ||
|---|---|---|
| Consolidated 2008 |
Consolidated 2007 |
|
| Cash at bank and in hand | 14 098 | 12 700 |
Available-for-sale fi nancial assets are recognized as liquid short-term investments and are held as part of the Group's ongoing cash management activities. See note 21. Financial risk management objectives and policies.
For the purposes of the consolidated cash fl ow statement, cash and cash equivalents comprise the following at December 31:
| Cash at bank and in hand | 14 098 | 12 700 |
|---|---|---|
| Available-for-sale | 46 943 | 71 425 |
| Total | 61 041 | 84 124 |
During the year, ordinary shares were subscibed with warrants attached to F-Secure option programs and converted as follows.
| Issued and fully paid | Number of shares |
Share capital |
Share premium fund |
Unrestricted equity reserve |
Total |
|---|---|---|---|---|---|
| 31.12.2006 Registration of share issue Exercise of options Premium fund transfer to unrestricted equity |
154 936 468 93 600 26 270 |
1 549 1 0 |
33 617 68 17 -33 582 |
33 582 | 35 166 69 18 |
| 31.12.2007 Registration of share issue Exercise of options Capital repayment Other change ref capital repayment |
155 056 338 74 780 946 043 |
1 550 1 |
120 46 |
33 582 1 184 -35 719 2 418 |
35 253 47 1 184 -35 719 2 418 |
| 31.12.2008 | 156 077 161 | 1 551 | 166 | 1 465 | 3 182 |
The share capital amounted to 1 551 311 euro and the number of shares was 156 077 161 at the end of the year 2008. A share has no nominal value. Accountable par value is EUR 0.01.
Proceeds from exercised warrants are recognized under the share capital and share premium fund until March 26, 2008.
On March 20, 2007, the shareholders' meeting decided to decrease the share premium fund. The decreased amount of 33 582 thousand euro was transferred to unrestricted equity reserve. On March 26, 2008, the shareholders' meeting decided that the total amount of the subscription prices paid for new shares issued after the date of the meeting, based on stock options under the F-Secure Stock Option Plans 2002 and 2005, be recorded in companys' unrestricted equity reserve. On October 28, 2008, the extraordinary shareholders' meeting decided that assets from the invested unrestrictedequity will be distributed to shareholders EUR 0.23 per share. The amount of the distribution was in total 35 719 thousand euro for all outstanding shares, altogether 155 301 612 shares.
The translation difference is used to record exchange difference arising from the translation of the fi nancial statements of foreign subsidiaries.
Proposed for approval at AGM for year 2008 0.07 euro per share. Final dividend for year 2007 0.07 euro per share, paid during the year 2008: 10 859 178 euro. Final dividend for year 2006 0.02 euro per share, paid during the year 2007: 3 101 601 euro.
The cost of acquistion is recognised as a deduction in the shareholders' equity. The shares were acquired through public trading on NASDAQ OMX Helsinki in accordance with its rules and at market price.
Based on authorization of the shareholders' meeting on March 26, 2008 parent company has acquired treasury shares during the period as follows.
| Time | number of shares |
acquisition cost |
average price € |
range of acquisition price € |
|---|---|---|---|---|
| November 2008 December 2008 |
286 000 431 000 |
607 846 |
2.13 1.97 |
2.00 - 2.23 1.76 - 2.12 |
| 717 000 | 1 453 |
The total number of acquired treasury shares during the period represent 0.46 percent of the Company's voting power on December 31, 2008.
The reserve is used to record increments and decrements in the fair value of available-for-sale fi nancial assets.
| FAIR VALUE, AVAILABLE-FOR-SALE | TOTAL | |||
|---|---|---|---|---|
| before tax | tax | after tax | ||
| Equity Dec 31, 2006 Available-for-sale, net Fair value gains/losses to PL |
-69 88 35 |
18 -23 -9 |
-51 65 26 |
-51 65 26 |
| Equity Dec 31, 2007 Available-for-sale, net Fair value gains/losses to PL |
54 -123 -28 |
-15 32 7 |
40 -91 -21 |
40 -91 -21 |
| Equity Dec 31, 2008 | -97 | 25 | -72 | -72 |
During the period the Group have had two different incentive plans which cover the key personnel.
The Company has had warrant programs since April 1998. During the period the Group had two warrant programs.The Company's warrant programs cover the key personnel. Warrants entitle the holder to subscribe for company shares with subscription price and time defi ned on each warrant program. If the holder of the warrant leaves the company before vesting, the warrant is forfeited. The Group has applied IFRS 2 to equitysettled awards granted after November 7, 2002 that had not vestedon or before January 1, 2005.
On March 27, 2002, the shareholders' meeting decided to issue a total of 5 500 000 warrants. Each warrant entitles the holder to subscribe for one share. On March 23, 2005, the shareholders' meeting decided to cancel a total of3 089 275 unallocated warrants. The subscription period expired on December 31, 2008 for each series. The subscription in full would have increased the capital stock by 24 107 euro. A total of 2 216 689 shares were subscribed, which represent 1.4 percent of the Company's voting power on December 31, 2008. The subscription price of a share in each series is the weighted average price of the Company's shares quoted on the Helsinki Exchanges during the following periods: 2002 A-series: July 1, 2002 – September 30, 2002; 2002 B-series: July 1, 2003 - September 30 2003; 2002 C-series: July 1, 2004 – September 30, 2004. During the fi nancial period, a total of 1 020 823 shares were subscribed with the warrants attached to this warrant program and consequently share capital was raised by 748 euro. The registration process of 693 246 sharesconverted through the program was pending as of December 31, 2008.
| Plan | Issued | Category | Start | End | Exercise price |
|---|---|---|---|---|---|
| 2002A 2002B 2002C |
1.11.2003 1.11.2004 1.11.2005 |
31.12.2008 31.12.2008 31.12.2008 |
0.60 0.90 1.60 |
||
| 2002 | 2 410 725 |
On March 23, 2005, the shareholders' meeting decided to issue a total of 4 500 000 warrants. Each warrant entitles the holder to subscribe for one share. The subscription in full would increase the capital stock by 45 000 euro, which represents 2.9 percent of the Company's share capital and voting power on December 31, 2008. The subscription price of a share in each series shall be the trade volume weighted average price of the Company's share quoted on the NASDAQ OMX Helsinki Ltd. as follows: 2005A on March 2005; 2005B on March 2006; 2005C on March 2007 and 2005D on March 2008, rounded off to the nearest cent. The subscription price of the stock options shall, as per the dividend recorded date, be reduced by the amount of dividend per share. However, only such dividends whose distribution has been agreed upon after of the period for determination of the share subscription price and which have been distributed prior to the share subscription are deducted from the subscription price. Pursuant to the Companies Act, the share subscription price shall, nevertheless, always be at least the accounting equivalent value per share.
| Plan | Issued | Category | Start | End | Exercise price |
|---|---|---|---|---|---|
| 2005A | 1.3.2008 | 30.11.2009 | 1.43 | ||
| 2005B | 1.3.2009 | 30.11.2010 | 2.85 | ||
| 2005C | 1.3.2010 | 30.11.2011 | 1.67 | ||
| 2005D | 1.3.2011 | 30.11.2012 | 2.22 | ||
| 2005 | 4 500 000 |
The shares subscribed for on the basis of the warrants shall entitle the holder to dividend for the fi nancial period in which the subscription takes place. Other shareholder rights shall commence upon the entry into the Trade Register of increase of the share capital.
The maximum dilution effect of the issuance of the warrants is 5 193 246 shares on aggregate or 3.2 percent of the Company's share capital after dilution. 5.1 million warrants have been issued from current warrant programs (22.0 million totally) as of December 31, 2008. 3.8 million warrants are held by the subsidiary company DF-Data Oy.
Options outstanding and weighted average exercise price
| Jan 01 - Dec 31, 2008 | Jan 01 - Dec 31, 2007 | |||
|---|---|---|---|---|
| Number of options | Weighted average exercise price € |
Number of options | Weighted average exercise price € |
|
| Outstanding Jan 01 Granted Forfeited Exercised Expired Outstanding Dec 31 |
4 905 812 200 000 475 200 1 714 069 13 152 2 903 391 |
1.85 2.22 2.01 1.00 1.19 1.82 |
4 619 172 585 000 178 490 119 870 4 905 812 |
1.85 1.97 2.33 0.72 1.83 |
| Exercisable Dec 31 | 699 631 | 1.43 | 1 801 242 | 1.30 |
Pending registration process of 693 246 shares related to expired warrant program 2002 on December 31, 2008 are included on the number of options exercised. For options exercised during the period the weighted average share price was 2.14 euro(2.41 euro in year 2007). Options were execised on a regular basis throughout the period. The Group received 1 845thousand euro for exercised option, from which 1 184 thousand euro was recorded to unrestricted equity reserve and the rest to unregistered share issues (1 thousand euro to share capital and 17 thousand euro to share premium in year 2007).
The options outstanding by range of exercise prices
| December 31, 2008 | December 31, 2007 | ||||||
|---|---|---|---|---|---|---|---|
| Exercise price € Number of options | Weighted average remaining contractual life in years |
Weighted average exercise price € |
Exercise price € Number of options | Weighted average remaining contractual life in years |
Weighted average exercise price € |
||
| 1.43 - 1.67 1.67 - 2.85 |
2 134 631 768 760 |
2.26 3.19 |
1.59 2.45 |
0.60 - 1.00 1.10 - 3.17 |
603 430 4 302 382 |
1.00 2.86 |
0.74 1.98 |
| 2 903 391 | 4 905 812 |
Expense arising from share-based payment transactions during the period was 554 thousand euro (920 thousand euro in year 2007). The weighted fair value of options granted at the date of grant date was 0,60 euro (0,72 euro in year 2007). The fair value of options granted during the period was determined at the date of grant by using the Binomial model. Used arguments:
| 2008 | 2007 | |
|---|---|---|
| Weighted average share price € | 2.2 | 2.09 |
| Weighted average exercise price € | 2.14 | 2.41 |
| Expected volatility | 31.04% | 25.59% |
| Option life in years | 4.1 | 4.8 |
| Risk-free interest rate | 4.27% | 4.08% |
| Expected dividends | - | - |
Expected volatility refl ects the assumption that the historical volatility is indicative of future trends, which may also notnecessarily be the actual outcome. Based on previous years, the company has estimated that 2–3% of granted options will be forfeited.
The share-based incentive program has been established as part of the key employee incentive and retention system within F-Secure Group. The program will offer for the participants a possibility to receive shares of F-Secure Corporationas an incentive reward if the Company's fi nancial targets set for the earning period have been achieved. No reward can be given to any participating employee, whose employment has terminated before the end of the lock-up period.
The share-based incentive program will last six years. It comprises three earning and lock-up periods. The participating employee may not sell or transfer the shares received before the end of the lock-up period on each earnings period. The program ends onDecember 31, 2013. The rewards will be settled in two phases so that one part is settled as equity-settled payment and one part as cash-settled payment. Within the framework of the program, the aggregate number of shares to be given as reward cannot exceed 5 million shares.
The participating employee shall be entitled to the shareholder rights of to the reward shares from the moment the shares havebeen entered into the participating employee's book-entry account.
Expense arising from the share-based payment transactions during the period was 189 thousand euro. The costs of theequity-settled transactions are measured by reference to the fair value of the F-Secure Corporation share at the date on whichthey are granted. The costs of cash-settled transactions are measured by reference to the fair value of the F-Secure Corporationshare on the date of balance sheet.
A provision is recognized for the employer's liability for social security contributions on share option gains, which will arise on exercise of the relevant share options, by employees. The provision is calculated basedon the number of options outstanding at the balance sheet date outside Finland that are expected to be exercised, and using the market price of the share at the balance sheet date as the best estimate of market price at the date of exercise. It is expected that the costs will be incurred during the exercise period of 1 January 2009 to 30 November 2012.
By decision of Helsinki District Court on September 2005 a provision was recognized for the Group's liability for payment of additional construction work done by SRV for headquarter premises. By decision of Helsinki Court of Appeal a payment was made on 2008 concerning dispute betweenF-Secure Corporation and SRV Viitoset Oy.
| Consolidated 2008 |
Consolidated 2007 |
|
|---|---|---|
| Book value as at Jan 1 Arising during the year Utilised |
1 286 -1 286 |
1 187 98 |
| Book value as at Dec 31 Social costs SRV |
1 286 6 1 279 |
| Consolidated 2008 |
Consolidated 2007 |
|
|---|---|---|
| Non-current liabilities | ||
| Deferred revenues | 7 509 | 4 847 |
| Total non-current liabilities | 7 509 | 4 847 |
| Current liabilities | ||
| Deferred revenues Trade payables Other liabilities Accrued expenses Income tax liabilities |
29 688 3 172 1 914 10 439 1 007 |
27 075 2 286 1 687 8 459 1 406 |
| Total current liabilities | 46 220 | 40 912 |
| Material amounts shown under accruals and deferred income | ||
| Accrued personnel expenses Deferred royalty Accrued expenses |
5 858 2 429 2 152 |
5 414 1 180 1 866 |
| Total | 10 439 | 8 460 |
| Loans and other receivables | 204 | 154 |
|---|---|---|
| Trade receivables | 20 121 | 17 958 |
| Available-for-sale fi nancial assets | 47 086 | 71 569 |
| Cash and bank accounts | 14 098 | 12 700 |
| Trade payables | -3 172 | -2 286 |
| Total | 78 337 | 100 094 |
The carrying amounts of the Group's fi nancial instruments are equivalent to fair values.
The goal of risk management is to identify risks that may hinder the group from achieving its business objectives. The responsibility for the company's risk management lies with CEO, the management and fi nally with the Board of Directors. The risks related to the Group's fi nancial instruments are mainly related to credit risks and foreign currency fl uctuations. The Group's available-for-sale assets are also exposed to interest rate fl uctuations.
The Group trades only with recognized, creditworthy third parties. Receivable balances are monitored and collected on an ongoing basis with the result that the Group's exposure to bad debts is not signifi cant. There are no signifi cant concentrations of credit risk within the Group. See note 13. Receivables.
The Group invoices mainly in Euros. However, there are some transactional currency exposures that arise from sales or purchasing in other currencies. The other main measurement currencies are USD, JPY, SEK and GBP. In order to minimize the impact of the fl uctuation of the exchange rates, the goal is to use forward currency contracts to eliminate the currency exposure of the estimated cash fl ow of these currencies for a period of six months.
| Derivatives Currency instruments – Currency forward contract |
EUR | EUR |
|---|---|---|
| Nominal value | 4 726 | 4 846 |
| Fair value | -202 | 105 |
F-Secure Corporation has hedged receivables denominated in USD, JPY, SEK and GBP with a forward rate contract. The forward rate contract expires on January 20 and April 20, 2009. The company does not have other derivatives.
F-Secure Corporation does not hedge investements made in its subsidiaries because the impact of changes of exchange rates would not be relevant in the Group's balance sheet.
| Sales in different currencies | % | % |
|---|---|---|
| EUR | 74 | 72 |
| SEK, GBP | 10 | 12 |
| USD, JPY | 14 | 13 |
| Other currencies | 2 | 3 |
| 100 | 100 |
The risk involved in the sales in foreign currency is notabaly diminished by the operational expenses in subsidiaries that use the same currency.
| Financial assets and liablilities in different currencies | Consolidated 2008 % |
Consolidated 2007 % |
|---|---|---|
| EUR | 85 | 87 |
| SEK, GBP | 5 | 6 |
| USD, JPY | 10 | 7 |
| 100 | 100 |
The table below demonstrates how sensitive the Group's profi t before taxes is to reasonably possible changes in the USD, JPY, SEK and GBP exchange rate, assuming that all other variables are held constant. The analysis is based on trade receivables and includes forward currency contracts.
| As at Dec 31, 2008 | ||
|---|---|---|
| USD, JPY | -10% | -130 |
| GBP, SEK | +10% | 217 |
| As at Dec 31, 2007 | ||
| USD, GBP | +10% | -20 |
| JPY, SEK | +5% | 22 |
The Group does not have any interest bearing liabilities. Based on the Group's conservative investment policy, it invests its cash mainly in short term and low risk funds. Investments are made in creditworthy funds. These available-for-sale investments are exposed to market risk for changes in interest risks. The Group's objective is to maintain a balance between continuity of funding and fl exibility through the use of cash and available-for-sale fi nancial assets. See note 14. Available-for-sale fi nancial assets.
The objective of the Group's capital management is to maintain an effi cient capital structure that ensures the functioning of business operations and promotes the increase of shareholder value. Reviewing the capital structure of the Group is part of the process for monitoring fi nancial performance. The objective of the Group is to improve its current capital structure.
AGM 2007 made a decision to decrease the share premium to distributable equity. This enables the Group to employ various actions to improve the effi ciency of the equity; and/or to return the equity to shareholders. EGM 2008 made a decision that assets from the distributable equity will be distributed to shareholders EUR 0.23 per share totalling 35 719 thousand euro.
According to the dividend policy of F-Secure Corporation, approximately half of its annual profi t is paid as dividend. Subject to circumstances, the company may deviate from this policy.
The Group has entered into commercial leases on offi ce space and on motor vechicles. Motor vechicle leases have an average life of three years and offi ce space between two and fi ve years with renewal terms included in the contracts. Future minimum rentals payable under non-cancellable operating leases as at 31 December are as follows:
| Within one year | 3 710 | 3 425 |
|---|---|---|
| After one year but not more than fi ve years | 3 780 | 5 500 |
| Total | 7 490 | 8 925 |
| 24. CONTINGENT LIABILITIES | ||
|---|---|---|
| Consolidated 2008 |
Consolidated 2007 |
|
| Other liabilities Others |
188 | 238 |
In December 2008, F-Secure Inc, subsidiary of F-Secure Corporation has been named as a defendant in apatent infringement lawsuit fi led in a state court in the U.S. F-Secure is investigating the claims and willdefend itself accordingly. The Group does not expect any material impact on its fi nancials from this lawsuit.No provision for any liability has been made in these fi nancial statements.
| 25. RELATED PARTY DISCLOSURES | ||||
|---|---|---|---|---|
| Compensation of key management personnel of the Group | ||||
| Wages and other short-term employee benefi ts Share-based payments |
-1 880 -343 |
-2 140 -474 |
||
| Total | -2 223 | -2 614 | ||
| Wages and other short-term employee benefi ts | ||||
| Managing directors Members of the boards of directors |
-732 -258 |
-832 -209 |
||
| Board of directors 2008 and managing director | Wages | Fees | Incentive reward |
|
| Kimmo Alkio, managing director | 541 | - | 101 |
| Risto Siilasmaa, chairman of the board | - | 65 | - |
|---|---|---|---|
| Marko Ahtisaari | - | 35 | - |
| Sari Baldauf | - | 45 | - |
| Pertti Ervi | - | 48 | - |
| Juho Malmberg | - | 30 | - |
| Alexis Sozonoff | - | 35 | - |
| Total | 541 | 258 | 101 |
Incentive reward granted to managing director is measured to the fair value at the date which it was granted and thecost is recognized over the period in which the performance conditions are fullfi lled 22.5.2008–31.12.2011.
The CEO's retirement age and the determination of his pension conform to the standard rules specifi edby Finland's Employee Pension Act (TYEL). The period of notice for the CEO is twelve (12) months both ways and there are no separate compensations for dismissal.
The consolidated fi nancial statements include the fi nancial statements of corporations listed in the following table.
| Name | Country of incorporation | Group (%) |
|---|---|---|
| Parent F-Secure Corporation, Helsinki | Finland | |
| DF-Data Oy, Helsinki | Finland | 100 |
| F-Secure Inc., San Jose | United States | 100 |
| F-Secure (UK) Ltd, London | Great-Britain | 100 |
| F-Secure KK, Yokohama | Japan | 100 |
| F-Secure GmbH, München | Germany | 100 |
| DF-Mobile GmbH, München | Germany | 100 |
| F-Secure SARL, Poissy | France | 100 |
| F-Secure AB, Stockholm | Sweden | 100 |
| F-Secure Srl, Milano | Italy | 100 |
| F-Secure SP z.o.o.,Warsaw | Poland | 100 |
| F-Secure Corporation (M) Sdn Bhd, Kuala Lumpur | Malaysia | 100 |
| F-Secure Pvt Ltd, Mumbai | India | 100 |
| F-Secure Pte Ltd, Singapore | Singapore | 100 |
| F-Secure B.V., Utrecht | The Netherlands | 100 |
| F-Secure Limited, HongKong | HongKong | 100 |
| F-Secure Pty Limited, Sydney | Australia | 100 |
| Shares | Number of shareholders |
Percentage of shareholders |
Total shares | Percentage of shares |
|---|---|---|---|---|
| 1–100 101–1 000 1 001–10 000 10 001–50 000 50 001–100 000 100 001– |
2 909 14 197 3 780 235 22 48 |
13.73% 67.00% 17.84% 1.11% 0.10% 0.23% |
189 966 4 902 898 10 853 029 4 875 062 1 579 944 133 676 262 |
0.12% 3.14% 6.95% 3.12% 1.01% 85.65% |
| Total | 21 191 | 100.00% | 156 077 161 | 100.00% |
| Shareholder category, December 31, 2008 | Total shares | Percentage of shares |
||
| Corporations Financial and insurance institutions General goverment Non-profi t organizations Households Other countries and international organizations |
3 718 347 38 563 945 17 596 068 2 132 241 93 641 897 424 663 |
2.38% 24.71% 11.27% 1.37% 60.00% 0.27% |
||
| Total | 156 077 161 | 100.00% | ||
| Largest shareholders and administrative register Owner |
Shares | Percentage of shares |
||
| Risto Siilasmaa Keskinäinen henkivakuutusyhtiö Ilmarinen Keskinäinen henkivakuutusyhtiö Suomi Ari Hyppönen Valtion eläkerahasto Bergroth Ismo Alfred Berg Finland sijoitusrahasto OP-Suomi pienyhtiöt Sijoitusrahasto Nordea Nordic small cap FIM Fenno sijoitusrahasto |
63 039 761 10 680 326 7 700 000 6 079 460 5 000 000 4 502 752 1 471 127 1 356 586 1 183 613 991 862 |
40.39% 6.84% 4.93% 3.90% 3.20% 2.88% 0.94% 0.87% 0.76% 0.64% |
||
| Administrative register Nordea Pankki Suomi Oyj Skandinaviska Enskilda Banken Pohjola Pankki Oyj Other registers |
13 104 038 7 024 999 1 541 529 975 005 |
8.40% 4.50% 0.99% 0.62% |
||
| Other shareholders | 31 426 103 | 20.13% | ||
| Total | 156 077 161 | 100.00% | ||
| Ownership of management |
| Board of Directors | Shares | % shares | Warrants | % shares |
|---|---|---|---|---|
| Risto Siilasmaa | 63 039 761 | 40.39% | 367 648 | 0.24% |
| Marko Ahtisaari | 4 800 | 0.00% | ||
| Sari Baldauf | 60 400 | 0.04% | 10 000 | 0.01% |
| Pertti Ervi | 36 400 | 0.02% | 15 000 | 0.01% |
| Juho Malmberg | 14 800 | 0.01% | ||
| Alexis Sozonoff | 14 800 | 0.01% | 10 000 | 0.01% |
| Total | 63 170 961 | 40.47% | 402 648 | 0.26% |
| Executive team | Shares | % shares | Warrants | % shares |
| Kimmo Alkio | 14 051 | 0.01% | 10 000 | 0.01% |
| Ari Alakiuttu | 5 000 | 0.00% | ||
| Pirkka Palomäki | 1 964 | 0.00% | 15 000 | 0.01% |
| Antti Reijonen | ||||
| Seppo Ruotsalainen Taneli Virtanen |
38 000 | 0.02% | 15 000 | 0.01% |
| Total | 54 015 | 0.03% | 45 000 | 0.03% |
The Board of Directors and CEO owned a total of 63 185 012 shares on December 31, 2008. This represents 40.5 percent of the Company's shares and votes. In addition, the warrants of the management accounted for 0.29 percent of the total amount of F-Secure shares. With these stock options 447 648 new shares can be issued.
| Economic indicators | IFRS 2008 |
IFRS 2007 |
IFRS 2006 |
IFRS 2005 |
IFRS 2004 |
FAS 2004 |
|---|---|---|---|---|---|---|
| Net sales (MEUR) | 113.0 | 96.8 | 80.7 | 61.8 | 47.3 | 47.3 |
| Net sales growth % | 17% | 20% | 31% | 31% | 21% | 21% |
| Operating result (MEUR) | 24.3 | 19.5 | 8.9 | 7.4 | 6.5 | 6.8 |
| % of net sales | 21.5% | 20.1% | 11.0% | 11.9% | 13.8% | 14.4% |
| Result before taxes | 26.4 | 21.4 | 10.4 | 9.3 | 7.7 | 7.4 |
| % of net sales | 23.4% | 22.1% | 12.8% | 15.0% | 16.3% | 15.7% |
| ROE (%) | 36.0% | 25.4% | 13.1% | 12.9% | 35.9% | 36.7% |
| ROI (%) | 51.5% | 36.3% | 19.3% | 19.0% | 21.3% | 22.1% |
| Equity ratio (%) | 71.3% | 81.6% | 80.2% | 80.6% | 84.2% | 84.4% |
| Investments (MEUR) | 3.1 | 2.2 | 3.7 | 8.3 | 2.9 | 2.9 |
| % of net sales | 2.7% | 2.3% | 4.6% | 13.4% | 6.1% | 6.1% |
| R&D costs (MEUR) *) | 25.5 | 21.2 | 17.7 | 14.7 | 10.7 | 10.7 |
| % of net sales | 22.6% | 21.9% | 21.9% | 23.8% | 22.6% | 22.5% |
| Capitalized development (MEUR) | 0.5 | 0.1 | 0.9 | 0.8 | 0.3 | |
| Gearing % | -148.5% | -124.6% | -123.2% | -108.2% | -110.7% | -110.3% |
| Personnel on average | 652 | 528 | 439 | 354 | 291 | 291 |
| Personnel on Dec 31 | 718 | 566 | 479 | 390 | 306 | 306 |
*) Excluding impairment loss of 4,8 MEUR in year 2006.
| Earnings / share (EUR) | 0.13 | 0.10 | 0.05 | 0.04 | 0.09 | 0.09 |
|---|---|---|---|---|---|---|
| Earnings / share diluted | 0.12 | 0.10 | 0.05 | 0.04 | 0.09 | 0.09 |
| Shareholders' equity per share | 0.26 | 0.44 | 0.35 | 0.37 | 0.30 | 0.30 |
| Dividend per share **) | 0.07 | 0.07 | 0.02 | 0.07 | - | - |
| Dividend per earnings (%) | 53.8% | 70.0% | 40.0% | 175.0% | - | - |
| Effective dividends (%) | 3.7% | 2.9% | 0.9% | 3.4% | - | - |
| P/E ratio | 14.9 | 24.6 | 47.6 | 46.9 | 19.8 | 19.5 |
| Share price, lowest (EUR) | 1.73 | 1.83 | 2.05 | 1.55 | 1.22 | 1.22 |
| Share price, highest (EUR) | 3.05 | 2.79 | 3.48 | 2.14 | 1.98 | 1.98 |
| Mean share price (EUR) | 2.39 | 2.32 | 2.54 | 1.82 | 1.67 | 1.67 |
| Share price Dec 31 | 1.88 | 2.45 | 2.25 | 2.04 | 1.81 | 1.81 |
| Market capitalization (MEUR) | 293.4 | 379.9 | 348.6 | 317.2 | 270.6 | 270.6 |
| Trading volume (millions) | 64.5 | 80.3 | 93.8 | 69.3 | 60.1 | 60.1 |
| Trading volume (%) | 41.5% | 51.8% | 60.6% | 45.7% | 40.6% | 40.6% |
| Adjusted number of shares | ||||||
| Average during the period | 155 301 688 | 155 040 771 | 154 859 859 | 151 759 785 147 973 590 147 973 590 | ||
| Average during the period, diluted | 161 464 443 | 161 464 443 161 464 443 | 162 394 953 163 197 747 163 197 747 |
| Average during the period, diluted | 161 464 443 | 161 464 443 161 464 443 | 162 394 953 163 197 747 163 197 747 | |
|---|---|---|---|---|
| Dec 31 | 156 077 161 | 155 056 338 154 936 468 | 154 711 818 149 509 650 149 509 650 | |
| Dec 31, diluted | 161 270 407 | 161 464 443 161 464 443 | 161 464 443 163 185 050 | 163 185 050 |
**) Board proposal
Capital repayment from unrestricted equity was made in year 2008 EUR 0.23 per share.
| FAS 2008 |
FAS 2007 |
||
|---|---|---|---|
| NET SALES Material and service GROSS MARGIN |
(1) | 100 427 -10 076 90 351 |
85 483 -7 215 78 268 |
| Other operating income Sales and marketing Research and development Administration |
(2) (3,4) (3,4) (3,4) |
3 041 -41 283 -22 685 -5 856 |
1 806 -35 264 -19 930 -5 293 |
| OPERATING RESULT | 23 568 | 19 588 | |
| Financial income and expenses | (6) | 2 008 | 1 728 |
| PROFIT (LOSS) BEFORE TAXES Income taxes |
(7) | 25 576 -6 505 |
21 316 -5 636 |
| RESULT FOR THE FINANCIAL YEAR | 19 071 | 15 680 |
| ASSETS | FAS 2008 |
FAS 2007 |
|
|---|---|---|---|
| NON-CURRENT ASSETS Intangible Tangible Investments in associated companies Investments in group companies |
(8) (8) (9) (9) |
3 830 1 835 41 242 |
4 254 1 566 41 241 |
| Total non-current assets | 5 948 | 6 102 | |
| CURRENT ASSETS Inventories Long-term receivables Short-term receivables Deferred tax assets Short-term investments Cash and bank accounts |
(11) (12) (12) (10) (13) |
77 590 26 314 25 47 086 10 100 |
230 679 23 264 71 568 7 220 |
| Total current assets | 84 193 | 102 961 | |
| TOTAL ASSETS | 90 141 | 109 063 |
| SHAREHOLDERS' EQUITY | (15,16) | ||
|---|---|---|---|
| Share capital | 1 551 | 1 551 | |
| Unregistered share issues | 661 | 47 | |
| Share premium | 165 | 119 | |
| Treasury shares | -1 453 | ||
| Fair value reserve | -71 | 40 | |
| Reserve for invested unrestricted equity | 1 465 | 36 000 | |
| Retained earnings | 17 104 | 12 283 | |
| Profi t for the fi nancial year | 19 071 | 15 680 | |
| Total shareholders' equity | 38 493 | 65 720 | |
| MANDATORY PROVISIONS | (18) | 1 279 | |
| LIABILITIES | |||
| Deferred tax liabilities | (10) | 14 | |
| Long-term liabilities | (19) | 6 120 | 3 907 |
| Short-term liabilities | (19) | 45 528 | 38 143 |
| Total liabilities | 51 648 | 42 063 | |
| TOTAL SHAREHOLDERS' | 90 141 | 109 063 |
EQUITY AND LIABILITIES
| FAS 2008 |
FAS 2007 |
|
|---|---|---|
| CASH FLOW FROM OPERATIONS Result for the fi nancial year Adjustments Cash fl ow from operations before change in working capital |
19 071 10 821 29 892 |
15 680 10 239 25 920 |
| Change in net working capital Current receivables, increase (-), decrease (+) Inventories, increase (-), decrease (+) Non-interest bearing debt, increase (+), decrease (-) Provisions, increase (+), decrease (-) |
-2 692 153 5 264 |
-2 905 -82 110 96 |
| Cash fl ow from operations before fi nancial items and taxes Interest expenses paid Interest income received Other fi nancial income and expenses Income taxes paid |
32 617 -465 1 378 821 -6 967 |
23 139 -2 696 1 059 -4 527 |
| Cash fl ow from operations | 27 382 | 20 365 |
| CASH FLOW FROM INVESTMENTS Investments in intangible and tangible assets Investments in subsidiary shares Proceeds from sale of intangible and tangible assets Dividends received |
-3 359 -1 700 13 |
-1 195 -18 |
| Cash fl ow from investments | -2 647 | -1 213 |
| CASH FLOW FROM FINANCING ACTIVITIES Increase in share capital Treasury shares Dividends paid Capital repayment |
1 845 -1 453 -10 859 -35 719 |
64 -3 101 |
| Cash fl ow from fi nancing activities | -46 186 | -3 036 |
| Change in cash Cash and bank at the beginning of the period Cash and bank at period end |
-21 451 78 645 57 195 |
16 116 62 406 78 522 |
| Change in net fair value of current available-for-sale assets Cash and bank at period end |
-151 57 044 |
123 78 645 |
F-Secure produces services and software protection to individuals and businesses against computer viruses and other threats coming through the Internet or mobile networks.
The parent company of the Group is F-Secure Corporation incorporated in Finland and domiciled in Helsinki. Company's registrant address is Tammasaarenkatu 7, 00180 Helsinki. Copy of consolidated fi nancial statement can be received from Internet address www.f-secure.com or the parent company's registrant address.
The fi nancial statement of F-Secure Corporation has been prepared in accordance with Finnish Accounting Standards (FAS).
Foreign currencies are translated into the local currency using fi xed
monthly exchange rates. At the balance sheet date, assets and liabilities denominated in foreign currencies are translated at the rates of exchange prevailing at that date. Exchange rate gains and losses of fi nancial transactions are recognized in the income statement under fi nancial items. Forward rate contracts for hedging purposes are recorded using the exchange rate prevailing at the balance sheet date.
Intangible assets include software licenses. Intangible assets recognized on merger consist of technology-based intangible assets. Tangible and intangible assets are recorded at historical cost less accumulated depreciation. Depreciation is recorded on a straight-line basis over the estimated useful life of an asset. The estimated useful lives of tangible and intangible assets are as follows:
| Machinery and equipment | 3–8 years |
|---|---|
| Capitalized development costs | 3 years |
| Intangible assets | 5–10 years |
Ordinary repairs and maintenance costs are charged to the income statement during the fi nancial period in which they are incurred. The cost of major renovations is included in the assets' carrying amount when it is probable that the Company will derive future economic benefi ts in excess of the originally assessed standard or performance of the existing asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset is derecognized.
Research costs are expensed as incurred. Development expenditures incurred on individual projects of totally new products or product versions with signifi cant new features are carried forward when they are technically feasible and their future recoverability can reasonably be regarded as assured.
Inventories are valued at the lower of cost and net realizable value with cost being determined by method fi rst-in fi rst-out method. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
Leases where the lessor retains substantially all the risks and benefi ts of ownership of the asset are classifi ed as operating leases. The Company has only operating leases. Operating lease payments are recognized as an expense in the income statement on a straight-line basis over the lease term. Leases of unused offi ce space are recognized as other operating income in the income statement on a straight-line basis over the lease term.
Pension arrangement is of local statutory arrangement and defi ned contribution plans. Contributions to defi ned contribution plans are recognized in income statement in the period to which the contributions relate. The Company recognizes the disability commitment of TYEL pension plan when disability appears.
The share-based incentive program has been established as part of the key employee incentive and retention system inside F Secure. Reward will be settled in two phases so that one part is settled as equity-settled payment and one part as cash-settled payment. Cost of cash-settled transactions is measured by reference to the fair value by using market price of F Secure Corporation share on the date of balance sheet. The cost is recognized over the period in which the performance conditions are fulfi lled, ending on the date on which the relevant employees become fully entitled to the reward (end of lock-up period).
The cost of cash-settle corresponding entry is recognized in liabilities. If relevant employee leaves company before fully entitled to the reward, the reward is forfeited. The cumulative expense recognized for sharebased incentive program transactions at each reporting date is based on the best available estimate of the number of equity instruments that will ultimately fulfi ll.
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outfl ow of resources embodying economic benefi ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
In September 2005, by the decision of Helsinki District Court, F-Secure was sentenced to pay additional construction and refurbishment work done at the Group's headquarter premises and litigation costs plus interest to SRV Viitoset Oy. F-Secure decided to recognize the obligation. Construction costs were allocated over the rental period until the year 2010 starting September 2005. After the decision made by the Helsinki Court of Appeal in March 2008 the obligation was paid and the provision was reversed. The Group did not receive a leave to appeal from the Supreme Court.
Direct current taxes are calculated in accordance with the local tax and accounting rules. Deferred taxes, resulting from temporary differences between the fi nancial statement and the income tax basis of assets and liabilities, use the enacted tax rates in effect in the years in which the differences are expected to reverse. Deferred tax assets are recognized to the extent that it is probable that future taxable profi t will be available.
Revenue is primarily derived from software license agreement sales and monthly content security service sales. License agreements consist of initial license agreements and periodic maintenance agreements covering product updates and customer support. The revenue recognition policy of F-Secure recognizes the license fee revenues as the product is delivered, and the maintenance revenues are recognized ratably over the period covered by the maintenance contract, and the service revenue is recognized at the time of delivery. Indirect taxes, discounts granted and exchange rate differences are excluded from net sales.
Other operating income includes profi ts from the sales of fi xed assets, rental revenue, and government grants received for research and development projects.
Company has acquired treasury shares. The cost of acquisition is recognized as a deduction in the shareholders' equity
Classifi cation of the functionally presented expenses has been made as follows: various types of expenses in different geographical locations have been allocated to the various functions by allocating directly to allocable expenses to the respective function, and other operating expenses have been allocated to functions on the basis of average headcount in each location.
Short-term investments are measured at fair value. Short-term investments consist of interest-bearing debt securities and shares in mutual funds invested in similar instruments. For assets that are actively traded in organized fi nancial markets, fair value is determined by reference to Stock Exchange quoted market bid prices at the close of business on the balance sheet date. Assets, the fair value of which cannot be measured reliably, are recognized at cost less impairment. The fair value changes of short-term investments are recognized in shareholders' equity under fair value reserve. When fi nancial assets recognized as available-for-sale are sold, the accumulated fair value changes are released from equity and recognized in the income statement.
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and other highly liquid short-term investments.
| 1. NET SALES | ||
|---|---|---|
| Geographical segments | FAS 2008 |
FAS 2007 |
| Finland and Scandinavia Rest of Europe North America Rest of the world |
40 726 48 790 4 274 6 637 |
34 531 41 794 4 163 4 995 |
| Total | 100 427 | 85 483 |
| 2. OTHER OPERATING INCOME | ||
| Rental revenue Goverment grants Sale of technology Other |
297 605 825 1 314 |
417 49 1 340 |
| Total | 3 041 | 1 806 |
| 3. DEPRECIATION AND REDUCTION IN VALUE | ||
| Depreciations from non-current assets | ||
| Other cap.expenditure Capitalized development |
-833 -561 |
-840 -540 |
| Intangible assets | -1 394 | -1 380 |
| Machinery & equipment | -1 056 | -953 |
| Tangible assets | -1 056 | -953 |
| Total depreciation | -2 450 | -2 333 |
| Depreciations by function | ||
| Sales and marketing | -940 | -1 023 |
| Research and development | -1 373 | -1 191 |
| Administration Total Depreciation |
-137 -2 450 |
-119 -2 333 |
| 4. PERSONNEL EXPENSES | ||
| Personnel expenses | ||
| Wages and salaries | -23 338 | -19 729 |
| Pension expenses Other social expenses |
-4 033 -1 421 |
-3 257 -1 269 |
| Total | -28 792 | -24 255 |
| Compensation of key management personnel | ||
| Wages and other short-term employee benefi ts | -1 503 | -1 370 |
| Wages and other short-term employee benefi ts | ||
| Managing director | -541 | -427 |
Wages and other short-term employee benefi ts of the board of directors and managing director see group disclosure 25. Related party disclosure.
Members of the boards of directors -258 -209
The CEO's retirement age and the determination of his pension conform to the standard rules specifi ed by Finland's Employee Pension Act (TYEL). The period of notice for the CEO is twelve (12) months both ways and there are no separate compensations for dismissal.
| Average number of personnel Personnel by function Dec 31 |
FAS 2008 401 |
FAS 2007 355 |
|---|---|---|
| Sales and marketing Research and development Administration |
139 239 42 |
118 207 35 |
| Total | 420 | 360 |
| 5. AUDIT FEES | ||
|---|---|---|
| Audit fees Tax consulting Other consulting |
-76 -26 -67 |
-88 -43 -6 |
| -168 | -138 |
| 6. FINANCIAL INCOME AND EXPENSES | |||||
|---|---|---|---|---|---|
| Interest income Interest expense Other fi nancial income Dividends Exchange gains and losses Other fi nancial expenses |
1 172 -56 1 185 13 -258 -49 |
742 -98 1 085 0 48 -48 |
|||
| Total | 2 008 | 1 728 |
| 7. INCOME TAXES | ||
|---|---|---|
| Income taxes of the business activity Income taxes from previous years |
- 6 531 26 |
-5 695 59 |
| Total | -6 505 | -5 636 |
| Result before taxes | 25 576 | 21 316 |
| Income taxes at statutory rate of 26% Non-deductible expenses Income taxes from previous years Other |
-6 650 133 26 -14 |
-5 542 -147 59 -6 |
| Total taxes | -6 505 | -5 636 |
| INTANGIBLE ASSETS | TANGIBLE ASSETS | |||||
|---|---|---|---|---|---|---|
| Other cap. expenditure |
Capitalized development |
Total | Machinery & equip. |
Other Tangible |
Total | |
| Acquisition cost Jan 1, 2007 Additions |
11 275 347 |
2 033 125 |
13 308 472 |
7 428 797 |
5 | 7 433 797 |
| Acquisition cost Dec 31, 2007 Additions Decreases |
11 622 611 -4 392 |
2 159 533 |
13 781 1 144 -4 392 |
8 225 1 326 |
5 | 8 230 1 326 |
| Acquisition cost Dec 31, 2008 | 7 841 | 2 692 | 10 533 | 9 551 | 5 | 9 556 |
| Acc. depreciations Jan 1, 2007 Depreciation of the fi nancial year |
-7 448 -839 |
-700 -540 |
-8 148 -1 380 |
-5 711 -953 |
-5 711 -953 |
|
| Acc. depreciations Dec 31, 2007 Depreciation of the fi nancial year Acc. depreciations of decreases |
-8 288 -833 4 217 |
-1 240 -561 |
-9 528 -1 394 4 217 |
-6 665 -1 056 |
-6 665 -1 056 |
|
| Acc. depreciations Dec 31, 2008 | -4 904 | -1 801 | -6 705 | -7 721 | -7 721 | |
| Book value as at Dec 31, 2007 Book value as at Dec 31, 2008 |
3 335 2 937 |
918 891 |
4 253 3 828 |
1 561 1 830 |
5 5 |
1 565 1 835 |
| Group comp. shares |
Associated comp. shares |
Total | |
|---|---|---|---|
| Book value as at Jan 1 Additions |
241 1 |
41 | 282 1 |
| Book value as at Dec 31 | 242 | 41 | 283 |
| Name | Country of incorporation | Share of ownership (%) | |
| Parent F-Secure Corporation, Helsinki DF-Data Oy, Helsinki F-Secure Inc., San Jose F-Secure (UK) Ltd, London F-Secure KK, Yokohama F-Secure GmbH, München DF-Mobile GmbH, München F-Secure SARL, Poissy F-Secure AB, Stockholm F-Secure Srl, Milano F-Secure SP z.o.o.,Warsaw F-Secure Corporation (M) Sdn Bhd, Kuala Lumpur F-Secure Pvt Ltd, Mumbai F-Secure Pte Ltd, Singapore F-Secure B.V., Utrecht F-Secure Limited, Hong Kong F-Secure Pty Limited, Sydney |
Finland Finland United States Great-Britain Japan Germany Germany France Sweden Italy Poland Malaysia India Singapore The Netherlands Hong Kong Australia |
100 100 100 100 100 100 98 100 100 100 100 100 100 100 100 100 |
|
| Associated companies | Share of ownership (%) | ||
| Vineyard International Ltd, Helsinki | Finland | 32.9 |
| Deferred tax assets | FAS 2008 |
FAS 2007 |
|---|---|---|
| Tax charged to shareholders' equity Change in fair value, available-for-sale |
25 | |
| Total | 25 | |
| Deferred tax liability | ||
| Tax charged to shareholders' equity | ||
| Other temporary differences Change in fair value, available-for-sale |
14 | |
| Total | 14 | |
| 11. INVENTORIES | ||
| Other inventories | 77 | 230 |
| 12. RECEIVABLES | ||
|---|---|---|
| FAS 2008 |
FAS 2007 |
|
| Non-current | ||
| Receivables from group companies Other receivables |
590 | 679 |
| Total | 590 | 679 |
| Current receivables | ||
| Trade receivables Loan receivables Other receivables Prepaid expenses and accrued income |
16 034 11 327 3 766 |
14 434 5 41 2 833 |
| Total | 20 137 | 17 313 |
| Receivables from group companies | ||
| Trade receivables Other receivables |
5 332 845 |
5 183 768 |
| Total | 6 177 | 5 951 |
| Total current receivables Material items included in prepaid expenses and accrued income |
26 314 | 23 264 |
| Prepaid expenses Prepaid expenses, royalty Accrued interest |
1 220 2 536 10 |
677 1 941 216 |
| Total | 3 766 | 2 833 |
Short-term investments consist of interest-bearing debt securities and shares in funds invested in similar instruments. For assets that are actively traded in organized fi nancial markets, fair value is determined by reference to Stock Exchange quoted market bid prices at the close of business on the balance sheet date. Assets, which fair value cannot be measured reliably, are recognized at cost less impairment. The fair value changes of short-term investments are recognized in shareholders' equity under fair value reserve.
| Fair value as at Jan 1 | 71 568 | 54 662 |
|---|---|---|
| Additions/deductions, net | -24 385 | 16 783 |
| Change in fair value | -96 | 123 |
| Fair value as at Dec 31 | 47 086 | 71 568 |
| Shares – unlisted Maturity date more than 3 months Maturity date less than 3 months |
143 46 943 |
143 5 702 65 723 |
| Fair value as at Dec 31 | 47 086 | 71 568 |
| Acquisition value as at Dec 31 | 47 183 | 71 513 |
For the purposes of the cash fl ow statement, cash and cash equivalents comprise the following at December 31:
| Cash at bank and in hand | 10 100 | 7 220 |
|---|---|---|
| Available-for-sale | 46 943 | 71 425 |
| Total | 57 044 | 78 645 |
| Parent Company FAS |
Share capital |
Share issue |
Share premium fund |
Treasury shares |
value reserve |
Fair Unrestricted equity reserve |
Retained earnings |
Total equity |
|---|---|---|---|---|---|---|---|---|
| Equity Dec 31, 2006 Available-for-sale fi nancial assets, net Result of the fi nancial year |
1 549 | 68 | 36 034 | -51 91 |
15 385 15 680 |
52 985 91 15 680 |
||
| Dividend Registration of share issue Exercise of options Other change |
1 0 |
-69 47 |
68 17 -36 000 |
36 000 | -3 101 | -3 101 64 |
||
| Equity Dec 31, 2007 Available-for-sale fi nancial assets, net Result of the fi nancial year Dividend Capital repayment |
1 550 | 45 | 119 | 41 -112 |
36 000 -35 719 |
27 965 19 071 -10 859 |
65 720 -112 19 071 -10 859 -35 719 |
|
| Aquisition of treasury shares Registration of share issue Exercise of options |
1 | -47 661 |
46 | -1 453 | 1 184 | -1 453 1 845 |
||
| Equity Dec 31, 2008 | 1 551 | 660 | 165 | -1 453 | -70 | 1 465 | 36 176 | 38 493 |
On December 31, 2007, the Company had 155 056 338 shares issued and outstanding. The registration process of 74 780 shares converted through the use of warrants was pending as of December 31, 2007.
During the year, 1 020 823 ordinary shares were subscibed with warrants attached to F-Secure option programs.
The Company's share capital amounted to 1 551 311 euro and the number of shares was 156 077 161 at the end of the year 2008. The registration process of 693 246 shares converted through the use of warrants was pending as ofDecember 31, 2008. The registration will increase the Company's unrestricted equity reserve by 661 219 euro.See group disclosure 16. Shareholders' Equity.
See group disclosure 16. Shareholders' Equity.
| Unrestricted equity reserve | 1 465 |
|---|---|
| Retained earnings | 17 105 |
| Result of the fi nancial year | 19 071 |
| Distributable shareholders' equity on December 31, 2008 | 37 641 |
See group disclosure 17. Share-based payment transactions.
By decision of Helsinki District Court on September 2005 a provision was recognized for the Group's liability for payment of additional construction work done by SRV for headquarter premises. By decision of Helsinki Court of Appeal a payment was made on 2008 concerning dispute between F-Secure Corporation and SRV Viitoset Oy.
| FAS 2008 |
FAS 2007 |
|
|---|---|---|
| Book value as at Jan 1 Arising during the year Utilised |
1 279 -1 279 |
1 183 96 |
| Book value as at Dec 31 SRV |
1 279 1 279 |
|
| 19. LIABILITIES | ||
| Non-current liabilities | ||
| Deferred revenues | 6 120 | 3 907 |
| Total non-current liabilities | 6 120 | 3 907 |
| Current liabilities | ||
| Deferred revenues Trade payables Other liabilities Accrued expenses |
24 132 2 760 1 298 9 515 |
21 578 1 755 1 162 8 078 |
| Total | 37 705 | 32 573 |
| Liabilities to the group companies | ||
| Advance payments Trade payables Other liabilities |
3 472 2 187 2 164 |
3 219 4 2 348 |
| Total | 7 823 | 5 570 |
| Total current liabilities | 45 528 | 38 143 |
| Material amounts shown under accruals and deferred income | ||
| Accrued personnel expenses Deferred royalty Accrued expenses Accrued tax |
4 890 2 429 1 485 712 |
4 407 1 180 1 316 1 175 |
| Total | 9 515 | 8 078 |
See Group disclosure 21. Financial risk management objectives and policies.
| Adjustments | FAS 2008 |
FAS 2007 |
|---|---|---|
| Deferred income Depreciation and amortization Profi t / loss on sale of fi xed asset Other adjustments Financial income and expenses Income taxes |
4 506 2 450 -825 193 -2 008 6 505 |
3 977 2 333 21 -1 728 5 636 |
| Total | 10 821 | 10 239 |
The Group has entered into commercial leases on offi ce space and on motor vehicles. Motor vehicle leases have an average life of three years and offi ce space between two and fi ve years with renewal terms included in the contracts.
Future minimum rentals payable under non-cancellable operating leases as at 31 December are as follows.
| As lessee | ||
|---|---|---|
| Within one year | 2 740 | 2 542 |
| After one year but not more than fi ve years | 3 215 | 4 993 |
| Total | 5 955 | 7 535 |
| 23. CONTINGENT LIABILITIES |
| Guarantees for other group companies | 10 | 14 |
|---|---|---|
| Other liabilities Others |
188 | 238 |
Derivatives see Group disclosure 21. Financial risk management objectives and policies.
See Group disclosure 26. Shares and shareholders.
See Group disclosure 27. Key ratios.
We have audited the accounting records, the fi nancial statements, the report of the Board of Directors, and the administration of F-Secure Corporation for the fi nancial period 1.1.2008 - 31.12.2008. The fi nancial statements comprise the consolidated balance sheet, income statement, cash fl ow statement, statement of changes in equity and notes to the consolidated fi nancial statements, as well as the parent company's balance sheet, income statement, cash fl ow statement and notes to the fi nancial statements.
The Board of Directors and the Managing Director are responsible for the preparation of the fi nancial statements and the report of the Board of Directors and for the fair presentation of the consolidated fi nancial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, as well as for the fair presentation of the parent company's fi nancial statements and the report of the Board of Directors in accordance with laws and regulations governing the preparation of the fi nancial statements and the report of the Board of Directors in Finland. The Board of Directors is responsible for the appropriate arrangement of the control of the company's accounts and fi nances, and the Managing Director shall see to it that the accounts of the company are in compliance with the law and that its fi nancial affairs have been arranged in a reliable manner.
Our responsibility is to perform an audit in accordance with good auditing practice in Finland, and to express an opinion on the parent company's fi nancial statements, on the consolidated fi nancial statements and on the report of the Board of Directors based on our audit. Good auditing practice requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the fi nancial statements and the report of the Board of Directors are free from material misstatement and whether the members of the Board of Directors and the Managing Director have complied with the Limited Liability Companies Act.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements and the report of the Board of Directors. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the fi nancial statements and the report of the Board of Directors.
The audit was performed in accordance with good auditing practice in Finland. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.
In our opinion, the consolidated fi nancial statements give a true and fair view of the fi nancial position, fi nancial performance, and cash fl ows of the group in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
In our opinion, the fi nancial statements, together with the consolidated fi nancial statements included therein, and the report of the Board of Directors give a true and fair view of the fi nancial performance and fi nancial position of the company in accordance with the laws and regulations governing the preparation of the fi nancial statements and the report of the Board of Directors in Finland. The information in the report of the Board of Directors is consistent with the information in the fi nancial statements.
Helsinki, February 11, 2009
ERNST & YOUNG OY Authorized Public Accountant Firm
Erkka Talvinko Authorized Public Accountant
F-Secure applies principles of corporate governance and high ethical standards, complying with the Finnish Companies Act, Securities Market Act and other regulations on the administration of public companies issued by the authorities.
The company complies with, the Corporate Governance Code for the listed companies published in October 2008 by the Securities Market Association, a body established by the Confederation of Finnish Industries EK, the Central Chamber of Commerce, and NASDAQ OMX Helsinki Ltd., as explained below and the Group's web pages.
The key elements of the Group's Corporate Governance practices are briefl y described below. More detailed information on the Group's governance practices is available on the Group's website.
The Group's highest governing body is the Annual General Meeting of Shareholders. The Annual General Meeting (AGM) shall be held within a period from the end of the fi nancial year as convened by the Board of Directors and as defi ned by the law. The AGM shall confi rm remunerations to the Board members and auditors, decide the number of members on the Board of Directors, appoint Board members, approve the fi nancial statement, determine the amount of dividends and select the auditors and other issues as described in Article of Associations of F-Secure Corporation and in Finnish Companies Act. F-Secure has only one class of shares and all shares have therefore equal voting power at General Meetings of Shareholders.
The decisions of the AGM 2008 are presented in the Board of Directors' report on page 8.
The operation of the Board of Directors is governed by the Finnish Companies Act, the Articles of Association of the Company, decisions of the General Meetings of shareholders, legislation on accounting and the securities market, and the rules of the OMX Nordic Exchange Helsinki.
The objective of the Board of Directors is to direct the Company with the aim of achieving the best possible return on invested capital for shareholders in the long term. The Board of Directors represents all shareholders. The Board of Directors shall always work to the best advantage of the company and all of its shareholders.
The Board of Directors is responsible for making sure that supervision of the company's accounting and fi nancial management is duly organized. The meetings of the Board shall regularly discuss reports presented by the CEO of the Company on the fi nancial status and operations of the Company. Furthermore, it is the duty of the Board to prepare matters to be handled by the shareholders' meeting, to decide on the convening of the shareholders' meeting and to make sure that the decisions made at the shareholders' meeting are put into effect. Any matters that are signifi cant or far-reaching from the Company's point of view shall be dealt with by the Board.
The duties and responsibilities of the Board are more thoroughly defi ned in the Articles of Association of the Company, the Finnish Companies Act and other applicable laws and regulations. The charter of the Board including the main duties and tasks of the Board and its committees are presented in more detail on the Group's website.
The annual shareholders' meeting shall decide on the number of Board members in accordance with the Articles of Association and elect the Board members. The Board members shall elect Chairman for the Board from among its members. The Board members shall also elect a secretary, who may be a non-member of the Board. According to the Articles of Association, the Board of Directors of F-Secure Corporation shall contain a minimum of three and a maximum of seven permanent members.
The term of the Board members is one year. The term ends at the end of the next Annual General Meeting of Shareholders that follows the election of the Board members. The number of terms of the Board members is not limited. The distribution of tasks or areas of responsibility of the Board members is not specifi ed, except for the Committees set by the Board. The majority of Board members shall be independent from F-Secure Corporation and from major shareholders of the Corporation.
According to the decision of the Annual General Meeting, the Board has six (6) members. The members of the Board are: Risto Siilasmaa (Chairman), Marko Ahtisaari, Sari Baldauf, Pertti Ervi, Juho Malmberg and Alexis Sozonoff. The majority of F-Secure Corporation's Board of Directors, fi ve members out of six, has no dependence on the company. Mr. Siilasmaa is a major shareholder of the company.
The Board of Directors shall convene at least fi ve times during its term. During 2008 the Board has had 13 meetings and the attendance has been close to 100%. The Board shall conduct an annual self-assessment of its operations.
The Annual General Meeting decides on the remuneration to be paid to the members of the Board. The decisions of the Annual General Meeting are presented in the Board of Directors' report for 2008 on page 8.
The members of the Board of Directors and the Executive team are presented in this report on pages 45–46.
Since the beginning of 2008, the Board has Audit Committee and Executive Committee (nomination and remuneration issues). The Chairman of the Audit Committee is Pertti Ervi and the members are Marko Ahtisaari and Juho Malmberg. The Chairman of the Executive Committee is Sari Baldauf and the members are Risto Siilasmaa and Alexis Sozonoff. The Audit Committee prepares, instructs and evaluates risk management, internal supervision systems, fi nancial reporting, auditing of the accounts and internal auditing. The Executive Committee prepares material and instructs with issues related to the composition and compensation of the Board of Directors and remuneration of the other members of top management.
The Audit Committee met four times and the Executive Committee two times during 2008.
The Board of Director shall appoint the CEO and decide upon his/her remuneration and other benefi ts. CEO's duties include managing the business according to the instructions issued by the Board of Directors, present the matters to be dealt with in the Board of Directors' meeting, implement the matters resolved by the Board of Directors and other issues determined in the Companies Act. The Board of Directors confi rms the salary and other benefi ts of the CEO. The CEO's retirement age and the determination of his/her pension conform to the standard rules specifi ed by Finland's Employee Pension Act. The period of notice for the CEO is twelve (12) months both ways and there are no separate compensations for dismissal. During 2008, the CEO, Kimmo Alkio, was paid a total amount of EUR 541 110 including all bonuses. The CEO also belongs to the incentive reward program.
F-Secure Corporation's Executive Team assists the CEO in the management and development of the Group. The Executive Team consists of the following persons: Ari Alakiuttu (Vice President, Human Resources), Kimmo Alkio (President and CEO), Pirkka Palomäki, (Chief Technology Offi cer), Antti Reijonen, (Vice President, Strategy), Seppo Ruotsalainen (Senior Vice President, Sales and Geographical Operations) and Taneli Virtanen (Chief Financial Offi cer). The CEO appoints the Executive Team members and decides upon the terms and conditions of their employment. The Board of Directors approves the compensation for the executive teams. The bonuses and grant of stock options are based on the performance of the group and the individual. It assembles regularly once a month and separately as needed.
F-Secure Corporation's auditor is Ernst & Young Oy, a fi rm of Authorized Public Accountants. The auditor's term of service is one year. APA Erkka Talvinko acts as responsible partner and is responsible for the direction and coordination of the audit work. The auditor will report to the Board of Directors at least once a year. During 2008, the Group paid a total of EUR 98 923 for auditing services and EUR 102 763 for other services.
The Executive Team of F-Secure, Financial Management and Security Team are responsible for the internal control and instructions. Regular audits will be performed in the different business units as well as in the subsidiaries. The purpose is to ensure the compliance to the consistent administration, accounting practices and the information security in the Group.
The goal of risk management is to identify risks that may hinder the group to achieve its business objectives. The responsibility for the company's risk management lies with the CEO and the Executive Team. The Board of Directors and the committees approve and follow up the reporting procedures, and monitor the adequacy, appropriateness and effectiveness of the Group's business and administrative processes.
Weekly and monthly fi nancial reporting that covers the entire Group is used to monitor how well fi nancial targets are being met. The reports include actual fi gures, plans and up-to-date forecasts.
The company has sought to manage the risks relating to its business operations by developing its operating processes and control systems. F-Secure's risk management team is regularly monitoring and coordinating activities to mitigate threats.
F-Secure Corporation does not provide fi nancing outside industry standard payment terms. Invoicing is mainly done in Euros. There is exchange rate risk with some currencies. In order to minimize the impact of the fl uctuation of the exchange rates the goal is to hedge the estimated cash fl ow of these currencies.
The investment policy of the company for cash reserves is conservative. Cash is mainly invested in short-term funds and other low risk investments. The company's critical IT systems are reviewed externally to ensure their security. The company monitors these systems internally as well.
The company follows the insider regulations of the NASDAQ OMX Helsinki Ltd. Insiders are divided into three categories: (1) permanent insiders including the members of the Board, the auditors, and the Group's executive team, (2) permanent company-specifi c non-public insiders including persons who by virtue of their position or tasks learn inside information on a regular basis, and (3) project-based insiders.
Permanent public insiders and permanent company specifi c insiders are not entitled to trade shares, options or other securities 21 days prior to publication of interim fi nancial statements or company accounts. Up-to-date information on holdings by F-Secure's permanent insiders with a duty to declare can be found on the Group's website.
The Group has a silent period of 21 days before each quarterly fi nancial report announcement. During the silent period the company will neither arrange meetings nor conference calls with the investor community.
The aim of the Group's communications is to support the correct valuation of the Company by providing the markets with suffi cient information on F-Secure's fi nancial position, strategy and Group's objectives. The website of F-Secure contains all information made public based on the disclosure requirements for listed companies.
Board member since 2003, Chairman of The Audit Committee b. 1957, B.Sc. (Electronics)
Board member since 2005, Chairman of the Executive Committee b. 1955, M.Sc. (Bus. Adm.), D.Sc. (Tech.) h.c. ,
Festival Ltd. Serves also on Boards of Finnish Business and Policy Forum Eva, International Youth Foundation, Global Advisory Board of IE Business School in Madrid and Advisory Board of Helsinki School of Economics.
• Holdings: Number of shares 60 400, 2005 A option 10 000.
b. 1969, B.A. summa cum laude in Economics and Philosophy, M.A. Philosophy
President and CEO
• Main employment history: Joined F-Secure from Nokia where he was the Vice President for the Consulting & Integration business (April 2005 – Oct 2006) and served as a member of the Global Services Business Unit management team within Networks. Prior to Nokia Served as Chief Operating Offi cer in F-Secure years 2001-2005. Worked for 14 years with Digital Equipment Corporation and Compaq Computer in numerous management positions with both European and global responsibilities out of the headquarter operations in Switzerland, Germany and the United States.
Vice President, Human Resources
b. 1967, M.Sc. (Engineering)
• Main employment history: Joined F-Secure in 2000 and Served as Vice President, Products & Services and held positions in Product Management, Product Marketing and Channel Development until 2008. Prior to joining F-Secure worked for Tellabs and for Nokia in the fi eld of product management and product development for telecommunications network management.
Chief Technology Offi cer
• Main employment history: Joined F-Secure in 1997 and has previously held positions in Product Management and Marketing. Prior to F-Secure worked for Telecom Finland (currently TeliaSonera) in the fi eld of marketing, business development and development management for data communication services.
Vice President, Strategy
F-Secure Corporation PL 24, Tammasaarenkatu 7 00181 Helsinki, Finland Tel. +358 9 2520 0700 Fax +358 9 2520 5001 E-mail: [email protected] www.f-secure.com
F-Secure Pty Ltd Suite 09 Level 8 100 Walker Street North Sydney NSW 2060, Australia Tel: +61 2 8404 4192 Fax: +61 2 8404 4170 E-mail: [email protected]
F-Secure Corporation c/o Jo Van Winckel Interleuvenlaan 62, Zone 2, Bus 56 3001 Heverlee - Leuven, Belgium Tel: +32 1639 4735 Fax: +32 1639 4737 www.f-secure.be
F-Secure Corporation International House Center Boulevard 5 2300 København S, Denmark Tel. +45 3247 3347
F-Secure Corporation Elektroniikkatie 3 90570 Oulu, Finland Tel. +358 9 2520 0700 Fax +358 8 551 3701
F-Secure SARL 38/44 rue Jean Mermoz 78600 Maisons Laffi tte, France Tel. +33 (0) 820 000 759 Fax +33 (0) 820 025 508 E-mail: [email protected] www.f-secure.fr
F-Secure GmbH Zielstattstraße 44 81379 München, Germany Tel. +49 89 7874 6700 Fax +49 89 7874 6799 E-mail: [email protected] www.f-secure.de
F-Secure Ltd Cambridge House, Level 8 Taikoo Place, 979 King's Road Quarry Bay, Hong Kong Tel. +852 2293 2647 Fax. +852 2293 2622 E-mail: [email protected]
F-Secure Pvt Ltd No 603/2, Block 1 6th Floor, White House Begumpet Hyderabad - 500016, India Tel. +91 4040 1335 03 Tel. +91 4040 1335 04 Fax +91 4040 1335 06
F-Secure Pvt Ltd 410, Peninsula Plaza Veera Industrial Estate Off Andheri Link Road Andheri West Mumbai 400054, India Tel. +91 2226 7441 37 Tel. +91 2226 7441 47 Fax +91 2226 7443 47
F-Secure Srl Via Giorgio Stephenson, 43/A 20157 Milano, Italy Tel. +39 (0)2 3809 3590 Fax +39 (0)2 3809 3591 E-mail: [email protected] www.f-secure.it
F-Secure KK Sky Bldg. 23F 2-19-12 Takashima, Nishi-ku, Yokohama 220-0011 Japan Tel. +81 4544 06 610 Fax +81 4544 06 616 E-mail: [email protected] www.f-secure.co.jp
F-Secure Corporation (M) Sdn Bhd Suite 2A-5-2, Level 5, Block 2A Plaza Sentral Jalan Stesen Sentral 5 50470 Kuala Lumpur, Malaysia Tel. +603 2264 0200 Fax +603 2264 0299
F-Secure B.V. Newtonlaan 115 3584 BH Utrecht, The Netherlands Tel. +31 (0)30 2106 243 Fax +31 (0)30 2106 244 www.f-secure.nl
F-Secure Corporation Nydalsveien 33 0484 Oslo, Norway Tel: +47 21 52 00 62 Fax: +47 21 52 00 10
F-Secure Sp.z.o.o. ul. Hrubieszowska 6a 00-209 Warszawa, Poland Tel. +48 22 431 82 21 Fax +48 22 431 82 20 www.f-secure.pl
F-Secure Pte Ltd No. 9 Jurong Town Hall Road 02-06 The iHub Singapore 609431 Tel. +65 6255 3720 Fax +65 6255 5846 E-mail: [email protected]
F-Secure AB Box 717 (postal address) 16927 SOLNA, Sweden Gårdsvägen 18 (visiting address) 16970 SOLNA Sweden Tel. +46 8 507 440 00 Fax +46 8 507 440 01 E-mail: [email protected] www.f-secure.se
F-Secure (UK) Ltd. Mercury Park Wycombe Lane Wooburn Green High Wycombe Buckinghamshire HP10 0HH United Kingdom Tel. + 44 (0) 845 890 3300 Fax + 44 (0) 845 890 3301 E-mail: [email protected] www.f-secure.co.uk
F-Secure Inc. 100 Century Center Court, Suite 700 San Jose, CA 95112, USA Tel: (888) 432 8233 Fax: (408) 350 2339 [email protected] www.f-secureusa.com
www.f-secure.com http://support.f-secure.com E-mail: [email protected]
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.