Highlights
OutlookCEO review
Financial performance
TablesHalf year report
1 January – 30 June 2022

Cloud revenue in
steady growth,
demerger ofConsumer security
into F-Securecompletedsuccessfully

02

WithSecure half year report 1 Jan – 30 Jun 2022

CONTENTS
03 Highlights
05 Outlook
06 CEO review

WithSecure completed the separation of its Consumer
security business into an independent company F-Securethrough a partial demerger on 30 June 2022, according to
the plan first announced on 17 February 2022 by the Boardof Directors. In this half-year report, WithSecure is presenting
consumer security business as Discontinued operations
under IFRS 5. Previous quarters’ income statements arerestated accordingly.

Figures in this report are unaudited. Figures in brackets refer to the corresponding period in the previous year, unless otherwise stated. Comparative period
figures related to income statement have been restated due to the application of IFRS 5. Percentages and figures presented herein may include rounding
differences and therefore may not add up precisely to the totals presented.

07 Financial
performance
20 Key ratios andother key figures
22 Tables

03

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights ofApril–June 2022 (Q2)

Highlights ofJanuary–June 2022 (H1)

Continuing operations

Continuing operations• Revenue of WithSecure increased by 2% to EUR 32.5 million (EUR 31.9

• Revenue of WithSecure increased by 2% to EUR 64.8 million (EUR 63.4

ɚ Revenue from cloud-native corporate security solutions increased by
32% to EUR 16.8 million (EUR 12.7 million)

ɚ Revenue from cloud-native corporate security solutions increased by
31% to EUR 32.1 million (EUR 24.6 million)

ɚ Revenue from on-premise corporate security solutions decreased by
10% to EUR 6.7 million (EUR 7.5 million)

ɚ Revenue from on-premise corporate security solutions decreased by
9% to EUR 13.9 million (EUR 15.2 million)

ɚ Revenue from cyber security consulting decreased by 24% EUR to
8.9 million (EUR 11.6 million). On a comparable basis, the revenue
decreased by 13%

ɚ Revenue from cyber security consulting decreased by 20% EUR to18.9 million (EUR 23.6 million). On a comparable basis, the revenue
decreased by 5%

million)1)• On a comparable basis, the revenue growth was 7%• Annual recurring revenue (ARR) of cloud-native corporate security

million)1)• On a comparable basis, the revenue growth was 9%• Estimated comparable EBITDA of WithSecure decreased to EUR –13.2
solutions grew by 31% to EUR 67.5 million (EUR 51.5 million). ARR growth
million (EUR –5.6 million)
from previous quarter was 5%• Items affecting comparability (IAC) for Adjusted EBITDA were EUR –5.2
Estimatedcomparable
EBITDAof
WithSecure
decreased
to
EUR
–8.0
million (EUR 0.0 million)•
million (EUR –4.0 million)• Cash flow from operating activities before financial items and taxes was
EUR 1.1 million (EUR 19.2 million). Cash flow includes both continuing and• Items affecting comparability (IAC) for Adjusted EBITDA were EUR –0.8
million (EUR 0.0)
discontinued operations. It was impacted by high demerger related costs.
• Cash flow from operating activities before financial items and taxes was
2)

3)

EUR –0.0 million (EUR 12.9 million). Cash flow includes both continuingand discontinued operations. It was impacted by high demerger related
costs.

1)

 orporate security products excluding on-premise (Business Suite). Cloud PortfolioCincludes Elements Cloud, Cloud Protection for Salesforce and Countercept.

2)

Annual recurring revenue (ARR) of corporate security products is calculated by multiplying
monthly recurring revenue of last month of quarter by twelve. Monthly recurring revenue
includes recognized revenue within the month excluding non-recurring revenues.

3)For explanation of the Estimated comparable EBITDA, see paragraph in the end ofHighlights section.

3)

Highlights
OutlookCEO review
Financial performance
Tables04

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights
OutlookCEO review

Discontinued operations

Financial performance• Result of the discontinued operations includes the revenue and expenses
directly derived from the Consumer security (F-Secure) business,
demerged on 30 June 2022.

Tables• In addition, a distribution gain of EUR 450.5 million for the fair value ofthe transferring business, net of transferred assets and liabilities at bookvalues, has been recognized in the result of the discontinued operations.
The recognition of the liability for the fair value of the transferring businessoffsets the impact in the company equity.

Starting from the first quarter of 2022, Consumer security (new F-Secure)financials are presented as Discontinued operations according to IFRS 5
standard. The operating expenses are split according to actual ownershipof assets, liabilities and resources after the demerger. The resulting figures
do not fully reflect the profitability of either business on a stand-alone basis.
WithSecure (Continuing operations) expenses include the cost of resources
allocated to supporting F-Secure during the transition period. WithSecure
will receive compensation for such expenses under the Transitional Service
Agreements (“TSA”). Estimated comparable EBITDA is presented asalternative performance measure (“APM”) for profitability to improvecomparability between periods. It excludes (for Discontinued operations:
includes) activities related to research and development, and cost of facilities
held by WithSecure. Comparative periods are adjusted accordingly. For a fullbridge between the different performance measures, please refer to Note 6
Reconciliation of alternative performance measures.
EUR million,
Adjusted EBITDA(calculated on the basis of IFRS 5)
Research and development
Facilities held by WithSecure
Estimated comparable EBITDA

4–6/2022

4–6/2021

1–6/2022

1–6/2021

1–12/2021

–9.7
1.3
0.4
–8.0

–5.5
1.1
0.4
–4.0

–16.6
2.5
0.8
–13.2

–8.7
2.3
0.8
–5.6

–17.2
4.4
1.6
–11.3

05

WithSecure half year report 1 Jan – 30 Jun 2022

Outlook
WithSecure’s financial outlook for 2022 was issued by the Board of Directors
on 3 June 2022.
Revenue from cloud-native products will grow by approximately 30% fromprevious year, accelerating in the second half of 2022. Previous year revenue
from cloud-native products was EUR 51.8 million.
Comparable revenue of the group will grow at a low double-digit rate fromprevious year. Previous year’s comparable revenue, adjusted for divested
consulting businesses, was EUR 122.8 million.
Estimated comparable EBITDA will decrease from previous year. The
decrease is mainly due to increased investments in new product areas, as well
as sales and marketing efforts including brand renewal related to company
demerger. The Estimated comparable EBITDA will improve in second half of2022 compared to the first half.

Medium term financial
targets (unchanged)
Medium term financial targets for WithSecure:• Growth Target: To double revenue organically by the end of 2025 (fromyear 2021 comparable revenue of EUR 122.8 million)• Profitability Target: Adjusted EBITDA break-even by the end of 2023 andadjusted EBITDA margin of some 20% by 2025

Highlights
OutlookCEO review
Financial performance
Tables06

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights

CEO Juhani Hintikka

OutlookCEO review

WithSecure’s second quarter of 2022 was marked by the strong growth ofcloud-native revenue. Annual recurring revenue (ARR) for the cloud-native
corporate security products grew by 31% from the previous year to EUR 67.5
million (EUR 51.5 million). Revenue for the cloud-native products grew by
32% to EUR 16.8 million (EUR 12.7 million) in the second quarter.
We continue to support our customers’ cloud transition by providing acomprehensive portfolio of cyber security solutions through the WithSecure
Elements platform. The growth of orders and revenue was particularly strong
in the Elements portfolio that complements the traditional endpoint protection
products.
In Managed Detection and Response (MDR), significant growth of revenue
continued, while after an exceptionally strong Q1, the order intake in Q2 wasslightly below expectations. The average contract size is increasing, and someof the large customers remaining in legacy platforms have been migrated to
WithSecure’s aligned technology platform. This is creating synergies for bothcustomers and WithSecure.
The growth of the cloud revenue was complemented by the Cloud Protection
for Salesforce, with steady revenue growth rates extending to all geographic
areas.
Revenue from the on-premise corporate security products continued to
decline by 10% to EUR 6.7 million (EUR 7.5 million). This is in line with ourstrategy of rapidly increasing our Security-as-a-Service (SaaS) offering and its
share of company revenue.
Revenue from our cyber security consulting decreased from previous year
and was EUR 8.9 million (EUR 11.6 million). Comparability is impacted by
the divestment of the UK public sector consulting in December 2021, as wellas the divestment of our subsidiary in South Africa in February 2022. On a
comparable basis, the revenue from cyber security consulting decreased
by approximately 13% to EUR 8.9 million (EUR 10.2 million excluding
divestments). The decrease is mainly resulting from the attrition that hascontinued at a high level. We have been quite successful in recruitment but
there is a delay before new consultants become fully operational.

“On 30 June,
our journey ofseparating theconsumer security
business to anindependentcompany wascompleted”

WithSecure’s profitability (measured as Estimated comparable EBITDA) was
EUR –8.0 million (EUR –4.0 million). This is in line with our expectations.
As previously communicated, we expect our growth in the second half toaccelerate and profitability to improve.
In June, we had the pleasure of inviting our partners to the first post-pandemic
event Sphere 2022 in Helsinki. The two days were filled with introductions,
reunions, excellent presentations and discussions on the future of cybersecurity.
On 30 June, our journey of separating the consumer security business toan independent company was completed. New F-Secure started trading
successfully on Nasdaq Helsinki on 1 July, after the two teams had cometogether to ring the opening bell. I would like to thank our team and advisors fortheir work in making the demerger happen in a very short time. I also wish all
the best for the new F-Secure in creating their own success story – we will stayclose but operate independently from now on.
CEO Juhani Hintikka

Financial performance
Tables07

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights

Financial performance

Outlook

EUR m
WithSecure (Continuing operations)
Revenue
Cloud-native corporate security solutions
On-premise corporate security solutions
Cyber security consulting
Cost of revenue
Gross Marginof revenue %Other operating income 1)
Operating expenses 1)
Sales & Marketing
Research & Development
Administration
Adjusted EBITDA 2)
of revenue. %Items affecting comparability (IAC)
Divestments
Demerger
EBITDAof revenue %Depreciation & amortization. excluding PPA 3)
Impairment
PPA amortization
EBIT
of revenue %4–6/2022

4–6/2021

Change %1–6/2022

1–6/2021

Change %1–12/2021

32.5
16.8
6.7
8.9
–11.7
20.7
63.9%
0.5
–30.9
–20,5
–8,0
–2,5
–9.7
–29.9%

31.9
12.7
7.5
11.6
–10.2
21.7
68.1%
0.4
–27.6
–17.4
–6.9
–3.3
–5.5
–17.3%

2%
32%
–10%
–24%
15%
–4%

64.8
32.1
13.9
18.9
–22.8
42.0
64.9%
0.9
–59.6
–39,3
–15,9
–4,5
–16.6
–25.6%

63.4
24.6
15.2
23.6
–20.2
43.1
68.0%
0.8
–52.5
–36.1
–15.0
–7.6
–8.7
–13.7%

2%
31%
–9%
–20%
13%
–2%

130.0
52.7
30.0
47.2
–41.5
88.5
68.1%
2.5
–107.6
–68.0
–28.5
–12.7
–17.2
–13.3%

12%
18%
15%
–26%
76%

14%
9%
6%
–41%
91%

–3.1
–2.1
–21.9
–33.8%
–4.9

0.5
–8.7
–13.7%
–4.7

152%

–0.8
–10.5
–32.4%
2.4

0.0
–5.5
–17.3%
2.4

n/a
91%

0.6
–13.5
–41.7%

0.7–8.6–26.9%

–16%
58%

–1.3
–28.1
–43.4%–1.5–14.9–23.5%–13%
89%

Estimated comparable EBITDA
of revenue %Adjusted EBIT 2)of revenue %–8.0–24.7%–12.1–37.3%–4.0–12.6%–7.8–24.6%

99%–13.2–20.4%–21.6–33.3%

–5.6
–8.8%
–13.4
–21.1%

136%

Result for the period (Discontinued operations)

459.2

8.9

468.5

18.9

n/a

1%

54%

n/a

5%

61%

–16.7
–12.8%
–9.6
–1.0
–2.8
–30.1
–23.2%
–11.3
–8.7%
–26.8
–20.6%

Excluding Items Affecting Comparability (IAC) and depreciation and amortization
Adjustments are material items outside normal course of business associated with acquisitions, integration, restructuring, gains or losses from sales of businesses and other items
affecting comparability. Reconciliation and a breakdown of adjusted costs is in note 6 of the Table Section of this report.
3)
Amortization of intangible assets from business combinations (PPA, purchase price allocation, related amortizations).

1)

2)

38.2

CEO review
Financial performance
Tables08

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights
Outlook
EUR m
Performance indicators 5)
Earnings per share,(EUR) (continuing operations) 4)
Deferred revenue (continuing operations)
Cash flow from operations before financial items and taxes
Cash and financial assets at fair value through P&L
ROI, %
Equity ratio, %Gearing, %Personnel, end of period
4)5)

4–6/2022

4–6/2021

Change %1–6/2022

1–6/2021

Change %1–12/2021

–0.07

–0.04

65%

–0.15
67.7

–0.08
63.5

101%
7%

–0.15
66.4

1.1
92.2
–37.4%
74.7%–50.7%
1,264

19.2
44.3
15.2%
57.3%
–14.4%
1,694

–94%
108%
–346%
30%
252%
–25%

38.7
52.9
15.6%
59.5%
–25.8%
1,656

0.0

12.9

–100%

–35.2%

7.8%

–550%

Based on the weighted average number of outstanding shares during the period 167,992,694 (1–6/2022).
Unless otherwise indicated, the comparative periods include both Continuing operations (WithSecure) and Discontinued operations (F-Secure)CEO review
Financial performance
Tables09

WithSecure half year report 1 Jan – 30 Jun 2022

Market overview

April–June 2022
(second quarter)

Highlights
OutlookCEO review

Digital networks are becoming an essential component of society that must
always work. Disruptions of the digital network can cause serious damage tothe society and well-being of its members.

Continuing operations

Financial performance

Revenue

The war in Ukraine has caused some exceptional consequences to the cybersecurity landscape, such as highly visible governmental activities, as wellas organized civilian response to the war efforts. New situations can lead touncontrolled cyber security threats that can be difficult to predict.

WithSecure revenue in April–June increased by 2% to EUR 32.5 million (EUR
31.9 million).

Tables

While advanced cyber-attacks on visible targets are becoming more common
and persistent, criminals are also targeting companies of all sizes along with
consumers by taking advantage of vulnerabilities in popular software, bothtraditional and new connected devices as well as online services. Apart frompure criminal activity, governments can use vulnerabilities and malware forsurveillance purposes.
Attacks against corporations can go undetected for months. It is estimatedthat the demand for both Endpoint Detection and Response (EDR) solutionsand WithSecure Managed Detection and Response, (MDR) product willcontinue to increase rapidly. The new detection and response capabilities
are supplementing existing endpoint protection solutions (EPP). Overall, asorganizations are increasingly adopting cloud services, they seek managed
security services and cloud-based delivery to help them maintain control of
their security.

On a comparable basis, the revenue growth was 7%
Cloud-native corporate security
Revenue from cloud-native corporate security products increased by 32% to
EUR 16.8 million (EUR 12.7 million).
Annual recurring revenue (ARR)1) of cloud-native corporate security products
grew by 31% to EUR 67.5 million (EUR 51.5 million). ARR growth fromprevious quarter was 5%.
1)

 nnual recurring revenue (ARR) of corporate security products is calculated by multiplyingA
monthly recurring revenue by twelve. Monthly recurring revenue includes recognizedrevenue within the month excluding non-recurring revenues.

Revenue split(WithSecure), MEUR
31.9 32.1

34.5

32.4 32.5

12.7 13.5 14.7 15.2 16.8
7.5

7.4

7.4

Annual Recurring Revenue(WithSecure), MEUR
80.1 83.5

95.1
91.1 91.2

51.5 55.5 60.9 64.1 67.5

7.1

6.7

11.6 11.2 12.4 10.0

8.9

28.6 28.0 30.2 27.1 27.6

Q2 Q3 Q4 Q1 Q22021 2021 2021 2022 2022

Q2 Q3 Q4 Q1 Q22021 2021 2021 2022 2022

Cloud-native corporate security solutions

Cloud-native corporate security solutions

On-premise corporate security solutions

On-premise corporate security solutions

Cyber security consulting

10

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights
OutlookCEO review
Growth of the corporate security products is driven by customers expanding
their EPP (Endpoint Protection) to cover other products available throughthe Elements platform, most typically the EDR (Endpoint Detection andResponse). Cloud Protection for Salesforce revenue has grown at a steadyrate year-on-year, due to both new customers and high retention rates.
Revenue is growing in all major geographic areas.
Revenue from Managed Detection and Response (MDR) continued a strong
growth year-on-year. Finland, Germany and the US have been the strongest
drivers of growth in the second quarter.
On-premise corporate security
Revenue from on-premise corporate security products decreased by 10% to
EUR 6.7 million (EUR 7.5 million).
ARR related to the on-premise products decreased by 3% to EUR 27.6 million(EUR 28.6 million). ARR change from the previous quarter was an increase of
2%.
The overall decrease of on-premise products is part of the WithSecure’s
strategic transitioning to cloud-based environments. Our customers are
increasingly switching to the cloud-native Elements products, leading to a
decline over time of the on-premise solutions revenue.
Cyber security consulting
Revenue from cyber security consulting decreased by 24% to EUR 8.9 million(EUR 11.6 million). The decrease is partly explained by the divestment of
the UK public sector consulting in December 2021, and the divestment of
the South African subsidiary in February 2022. On a comparable basis, therevenue decreased by 13% (previous year comparable revenue was EUR
10.2 million).
Partly driven by the geo-political tensions, the demand for advanced cybersecurity consulting services is currently very strong. There are shortagesof highly specialized experts on the market, especially in areas with highdigitalization rates. The increased demand for cyber security services is
in many cases increasing in-housing of the critical services and creating
additional pressure in the market. WithSecure has been successful inrecruitment but there is a delay before new consultants become fully
operational.

Gross margin
Gross margin decreased by EUR 1.0 million to 20.7 million (EUR 21.7 million)
and was 63.9% of revenue (68.1%). The decrease is caused by increasing
volume of Endpoint Detection and Response causing slightly higher hosting
cost, and onboarding of new consultants resulting in a lower gross margin in
consulting.

Operating expenses
Operating expenses excluding depreciation and amortization, and items
affecting comparability (IAC) increased by EUR 3.3 million to EUR 30.9
million (EUR 27.6 million). Cost increases were due to research anddevelopment as well as sales and marketing, where the brand renewal had
an impact on costs. In addition, COVID-19 pandemic decreased operating
expenses during the comparative period. Items affecting comparability (IAC)
totaled EUR 0.8 million and consisted of costs related to the execution of thecompany’s strategy in preparation for the planned demerger and impacts of
the actual demerger.
Depreciation and amortization were EUR 3.0 million (3.1 million), where PPA
amortization from acquisitions was EUR 0.6 million (0.7 million).

Profitability
Estimated comparable EBITDA of WithSecure was EUR –8.0 million and–24.7% of revenue (EUR –4.0 million, –12.6%).
Adjusted EBITDA was EUR –9.7 million and –29.9% of revenue (EUR –5.5
million, –17.3%). Adjusted EBIT was EUR –12.1 million and –37.3% ofrevenue (EUR –7.8 million, –24.6%).
EBITDA was EUR –10.5 million and –32.4% of revenue (EUR –5.5 million,–17.3%). EBIT was EUR –13.5 million and –41.7% of revenue (EUR –8.6
million, –26.9%), including EUR 0.6 million of PPA amortization (EUR 0.7
million) and EUR 0.8 million of IAC items.
In IAC items, costs related to demerger were EUR –1.1 million and the impactof the sub-leased premises through P&L was EUR 0.3 million.

Financial performance
Tables11

WithSecure half year report 1 Jan – 30 Jun 2022

January–June 2022
(first half)
Cash flow
Cash flow from operating activities before financial items and taxes was
EUR –0.0 million (12.9 million). The group cash flow statement includes bothContinuing operations (WithSecure) and Discontinued operations (F-Secure)until the demerger effective day of 30 June 2022. Operative cash flow was
impacted by demerger related costs. The impact of cash transferred to
F-Secure as part of the demerger is presented separately as a change in Cashand cash equivalents. Cash of the parent company belonging to F-Secure
Corporation will be transferred during Q3.

Highlights
OutlookCEO review

Continuing operations

Financial performance

Revenue

Tables

Revenue for WithSecure in January–June increased by 2% to EUR 64.8
million (EUR 63.4 million).
On a comparable basis, the revenue growth was 9%.
Cloud-native corporate security
Revenue from cloud-native corporate security products increased by 31% to
EUR 32.1 million (EUR 24.6 million)
On-premise corporate security
Revenue from on-premise corporate security products decreased by 9% to
EUR 13.9 million (EUR 15.2 million).
Cyber security consulting
Revenue from cyber security consulting decreased by 20% to EUR 18.9
million (EUR 23.6 million). The decrease is partly explained by the divestmentof the UK public sector consulting in December 2021, and the divestment of
the South African subsidiary in February 2022. On a comparable basis, therevenue decreased by 5% (previous year first half comparable revenue was
EUR 19.9 million).

Gross margin
Gross margin decreased by EUR 1.1 million to 42.0 million (EUR 43.1 million)
and was 64.9% of revenue (68.0%).

Operating expenses
Operating expenses excluding depreciation and amortization, and items
affecting comparability (IAC) increased by EUR 7.1 million to EUR 59.6 million(EUR 52.5 million). Cost increases were due to research and development
as well as sales and marketing, where the brand renewal had an impact on
costs. In addition, COVID-19 pandemic decreased operating expenses during
the comparative period. Items affecting comparability (IAC) totaled EUR
5.2 million and consisted of costs related to the execution of the company’s
strategy in preparation for the planned demerger, impact of the actual
demerger and impacts of divestment of the South African subsidiary.

12

WithSecure half year report 1 Jan – 30 Jun 2022

Discontinued operations

Highlights
OutlookCEO review

Depreciation and amortization were EUR 6.2 million (EUR 6.2 million), where
PPA amortization from acquisitions was EUR 1.3 million (EUR 1.5 million).

Profitability
Estimated comparable EBITDA of WithSecure was EUR –13.2 million and–20.4% of revenue (EUR –5.6 million, –8.8%).
Adjusted EBITDA was EUR –16.6 million and –25.6% of revenue (EUR
–8.7 million, –13.7%). Adjusted EBIT was EUR –21.6 million and –33.3% ofrevenue (EUR –13.4 million, –21.1%).
EBITDA was EUR –21.9 million and –33.8% of revenue (EUR –8.7 million,
13.7%). EBIT was EUR –28.1 million and –43.4% of revenue (EUR –14.9
million, –23.5%), including EUR 1.3 million of PPA amortization (EUR 1.5
million) and EUR 5.2 million of IAC items.
In IAC items, costs related to the company’s strategy execution were EUR–2.4 million, the impact of the sub-leased premises was EUR 0.3 million andimpacts of divestment of the Group’s South African subsidiary were EUR –3.1
million including recognition of translation difference of EUR –2.1 million. The
estimated capital loss from the divestment was EUR 0.7 million. The final
result of the divestment is dependent on deferred consideration based on the
future business performance and will be measured at fair value quarterly.

Cash flow
Cash flow from operating activities before financial items and taxes was EUR
1.1 million (EUR 19.2 million). The group cash flow statement includes bothContinuing activities (WithSecure) and Discontinued operations (F-Secure)until the demerger effective day of 30 June 2022. The impact of cashtransferred to F-Secure as part of the demerger is presented separately as achange in Cash and cash equivalents. Cash of the parent company belonging
to F-Secure Corporation will be transferred during Q3.

Result of the discontinued operations includes the revenue and expenses
directly derived from the Consumer security (F-Secure) business, demergedon 30 June 2022.
In addition, a distribution gain of EUR 450.5 million for the fair value of thetransferring business, net of transferred assets and liabilities at book values,
has been recognized in the result of the discontinued operations. The
recognition of the liability for the fair value of the transferring business offsets
the impact in the company equity.
Full disclosure of the discontinued operations result is provided in the Note 3of this report.

Financial performance
Tables13

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights

Financing, Capital Structure
and Capital Expenditure

OutlookCEO review
Financial performance

Unless otherwise indicated, the comparative periods include both continuing operations (WithSecure) and discontinued operations (F-Secure)
EUR mCash and financial assets at fair value through P&L
Bank loans, non-current
Lease liabilities, non-current
Other loans, non-current
Bank loans, current
Lease liabilities, current
Capital expenditure
Capitalized development expenses
ROI, %
Equity ratio, %Gearing, %4–6/2022

4–6/2021

Change %1–6/2022
92.2
6.1
3.7

1.8
1.4
–35.2%

3.3
1.7
7.8%

–46%
–17%

4.5
6.2
2.6
–37.4%
74.7%–50.7%

1–6/2021
44.3
16.0
5.6

Change %
108%
–100%
9%

1–12/2021
52.9
13.0
4.6

6.0
4.1
7.1
3.0
15.2%
57.3%
–14.4%

–100%
9%
–12%
–14%

6.0
4.8
12.7
5.6
15.6%
59.5%
–25.8%

On 23 March, WithSecure strengthened its financial position with a directed share issue where EUR 76.8 million of new capital was raised.
On 30 June, WithSecure made an early repayment of the bank loan (EUR 19.0 million). The committed revolving credit facility was also cancelled.
At the end of the quarter, the company had liquid assets of EUR 92.2 million (44.3m). Cash of the parent company belonging to F-Secure Corporation will betransferred during Q3. Gearing was negative –50.7% due to strong liquidity.

Tables14

WithSecure half year report 1 Jan – 30 Jun 2022

Status of announced
demergerOrganization andleadership

Following the announcement of 17 February 2022 to pursue towards theseparation of the Consumer Security business through a partial demerger, thedemerger was completed on 30 June 2022. Trading of F-Secure Corporation
at Nasdaq Helsinki began on 1 July 2022.

Personnel

F-Secure and WithSecure have agreed on certain services that will be
provided on a transitional basis by WithSecure to support continuous
operations of F-Secure (as described in more detail in the demerger plan
approved by WithSecure’s board of directors and announced by WithSecureon 17 February 2022), and to perform development and migration tasks
towards ensuring that both companies’ businesses are operationallyseparated at the termination of the Transitional Services Agreement (“TSA”).
The services are related to jointly used technology, as well as transitional
services that are general in nature, covering for example IT, HR, finance andother areas. The parties’ intention is to replace the services latest by the end of
the transition period with similar services procured or provided independently
by F-Secure.

At the end of the quarter, WithSecure had 1,264 employees, which shows a
net decrease of 325 employees (20%) since the previous quarter-end (1,589
on 31 March 2022), and a net decrease of 430 employees (25%) compared tothe end of June 2021 (1,694). Majority of the decrease is due to the demergerof 30 June 2022 where 366 employees transferred to F-Secure group. The
decrease is also affected by the divestment of the Group’s South African
subsidiary in February 2022, as well as the divestment of UK public sector
consulting in December 2021.

Leadership team
As a consequence of the demerger of Consumer security business into aseparate company, Timo Laaksonen became the CEO of F-Secure and is nolonger a member of the Leadership Team.
At the end of the quarter, the composition of the Leadership Team was thefollowing:
Juhani Hintikka (CEO & President), Christine Bejerasco (CTO), Charlotte
Guillou (EVP, People Operations & Culture), Tom Jansson (CFO), Juha
Kivikoski (EVP, Business Security), Antti Koskela (CPO), Tim Orchard (EVP,
Solutions), Tiina Sarhimaa (CLO) and Ari Vänttinen (CMO).

Highlights
OutlookCEO review
Financial performance
Tables15

WithSecure half year report 1 Jan – 30 Jun 2022

Shares, Shareholders’Equity, Own Shares

Annual General Meeting

On 23 March 2022, WithSecure issued 15,800,000 new shares in an
accelerated book-built offering deviating from the shareholders’ pre-emptive
subscription rights. The total number of company shares is currently
174,598,739. The company’s registered shareholders’ equity is EUR 80,000.
The company held 71,795 of its own shares at the end of the quarter.

Annual General Meeting (AGM) of F-Secure Corporation was held on 16
March 2022. The meeting confirmed the financial statements for the financial
year 2021 and reviewed the remuneration policy and remuneration report forgoverning bodies. The members of the Board and the President and CEO
were discharged from liability.

Based on resolution of the Extraordinary General Meeting, WithSecure
Corporation reduced its share capital by EUR 1,417,311.18 to EUR 80,000 in
relation to the demerger. Share premium reserve of EUR 164,543.23 was also
dissolved.

The AGM approved the proposal of the Board of Directors that no dividend will
be paid for the financial year 2021 due to the contemplated separation of thecompany’s consumer security business.

The company holds its own shares to be used in the incentive compensationplans, for making acquisitions or implementing other arrangements related tothe company’s business, to improve the company’s financial structure or to beotherwise assigned or cancelled.
In April–June, 11,424,891 (4,257,862) of WithSecure’s shares were tradedon Nasdaq Helsinki. The highest trading price was EUR 5.57 (4.34) and thelowest price was EUR 4.49 (3.90). The volume weighted average price of
WithSecure shares in second quarter of 2022 was EUR 4.95 (4.07).
The share’s closing price on the last trading day of the quarter, 30 June 2022,
was EUR 5.00 (4.03). Based on that closing price, the market value of thecompany’s shares, excluding the treasury shares held by the company, was
EUR 873 million (EUR 638 million).
The separation of WithSecure’s Consumer security business into anindependent listed company named F-Secure Corporation took place on 30
June 2022. At the end of the first trading day of the two separate companies(1 July 2022), WithSecure’s share price was EUR 2.53 and F-Secure’s shareprice EUR 2.70.
The company currently has market-based long-term share-based incentive
programs for key employees.

Highlights
OutlookCEO review

The AGM decided that the number of Board members shall be seven. The
following current Board members were re-elected: Risto Siilasmaa, Keith
Bannister, Pertti Ervi, Päivi Rekonen and Tuomas Syrjänen. Kirsi Sormunen
was elected as a new member to the Board of Directors. Tony Smith, who
belongs to the personnel of F-Secure Corporation, was elected as a newmember of the Board of Directors.
The Board elected Risto Siilasmaa as the Chairman of the Board. Tuomas
Syrjänen was nominated as the Chairman of the Personnel Committee andRisto Siilasmaa and Päivi Rekonen as members of the Personnel Committee.
Pertti Ervi was nominated as the Chairman of the Audit Committee and Keith
Bannister, Kirsi Sormunen and Tony Smith were nominated as members of
the Audit Committee.
Audit firm PricewaterhouseCoopers Oy was re-elected as Auditor of thecompany. Mr. Janne Rajalahti, APA, acts as the Responsible Auditor.
The AGM authorized the Board of Directors to decide upon the repurchaseof a maximum of 10,000,000 of the company’s own shares in total in
one or several tranches and with the company’s unrestricted equity. The
authorization is valid until the conclusion of the next Annual General Meeting,in any case until no later than 30 June 2023.
The AGM authorized the Board of Directors to decide on the issuance of a
maximum of 31,759,748 shares in total through a share issue as well as byissuing options and other special rights entitling to shares pursuant to Chapter
10, Section 1 of the Limited Liability Companies Act in one or several tranches.
The proposed maximum number of the shares corresponds to 20% of theCompany’s registered number of shares. The authorization is valid until theconclusion of the next Annual General Meeting, in any case until no later than
30 June 2023.

Financial performance
Tables16

WithSecure half year report 1 Jan – 30 Jun 2022

Extraordinary General
Meeting
The AGM also decided to change the company’s business name to
WithSecure Corporation.

Extraordinary General Meeting (EGM) of WithSecure Corporation was heldon 31 May 2022.

Full disclosure of the AGM resolutions, as well as the organizing meeting of
the Board of Directors held on the same day, has been provided in the Stock
Exchange release of 16 March 2022.

The EGM resolved, among other things, to approve the demerger plan andthe according partial demerger, in which all assets and liabilities relating to
the company’s consumer security business transfer without a liquidation
procedure to F-Secure Corporation, which shall be established in connection
with the registration of the completion of the demerger. The General Meeting
resolved that the shareholders of WithSecure will receive as demerger
consideration one (1) new share in F-Secure for each share they hold in
WithSecure on the effective date. The effective date of the Demerger was 30
June 2022.
The EGM resolved, conditionally upon the completion of the demerger,
to reduce WithSecure’s share capital to EUR 80,000, and to dissolve
WithSecure’s share premium reserve.
The EGM resolved, conditionally upon the completion of the demerger, toauthorize the Board of Directors of F-Secure to decide upon the repurchaseof a maximum of 15,000,000 of F-Secure’s own shares with F-Secure’s
own unrestricted equity. The authorization is proposed to be valid until theconclusion of the first Annual General Meeting of F-Secure following theeffective date, in any case until no later than 30 June 2023.
The EGM resolved, conditionally upon the implementation of the demerger,
to authorize the Board of Directors of F-Secure to decide on the issuance ofa maximum of 15,000,000 shares in total through a share issue as well as byissuing options and other special rights entitling to shares. The authorization
will be valid until the conclusion of the first Annual General Meeting of
F-Secure following the Effective Date as set forth in the Demerger Plan, in any
case until no later than 30 June 2023.
The EGM resolved, conditionally upon the completion of the demerger, thatthe number of members of the Board of Directors of F-Secure shall be six(6). Pertti Ervi, Thomas Jul, Madeleine Lassoued, Risto Siilasmaa, Petra
Teräsaho and Calvin Gan, who belongs to the personnel of F-Secure, were
elected as members of the Board of Directors of F-Secure.

Highlights
OutlookCEO review
Financial performance
Tables17

WithSecure half year report 1 Jan – 30 Jun 2022

Risks and uncertainties

Highlights
OutlookCEO review

The EGM resolved, conditionally upon the implementation of the
demerger and in accordance with the Board of Directors’ recommendation,
to elect PricewaterhouseCoopers Oy as auditor of F-Secure.
PricewaterhouseCoopers Oy has stated that Mr Janne Rajalahti, APA, will act
as the Responsible Auditor.

The following risks and uncertainties can adversely impact WithSecure’s sales,
profitability, financial condition, market share, reputation, share price or theachievement of the company’s short- and long-term objectives. The mattersdescribed here should not be construed as an exhaustive list. The mostsignificant risks are:

In addition, the EGM amended WithSecure’s Articles of Association.

Ukraine War

Full disclosure of the EGM resolutions has been provided in the Stock
Exchange release of 31 May 2022.

The Ukraine war has significantly increased the uncertainty in the world andthe risk of unexpected disruptions of the world economy. Any such eventswould also impact the WithSecure business. The war has increased theawareness of the importance of cyber security, especially for companies, andit will continue impacting the corporate cyber security market.
For corporate responsibility reasons, WithSecure is not conducting businesswith any Russian or Belarussian parties, even in cases where it would bepermitted by the export control regulations.

Inflation
Inflation has increased the risk for negative development of the cost structure.
This is monitored very closely, and inflation will also most likely require
mitigation actions during the year to retain workforce in the company.

COVID-19 pandemic
The impact of COVID-19 pandemic is decreasing to WithSecure business as
the restrictions are being reduced around the world. There are still pockets ofmarkets in Asia and elsewhere that have restrictions in place, However, therisk of large impacts to WithSecure business has reduced significantly.

Cyber security incident
Cyber security attacks threaten the confidentiality, integrity and availability of
WithSecure products, services and the enterprise. WithSecure builds cyber
resilience by continuously improving its capability to identify, protect, detect
and respond to relevant threats.

Financial performance
Tables18

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights
OutlookCEO review

Endpoint protection market disruption

Geopolitical risks

Endpoint security market is highly competitive. Operating systemmanufacturers have increased their focus to built-in security features and at
the same time new vendors and technologies have emerged. WithSecuremust succeed in maintaining in-depth understanding of cyber security threat
landscape, hacker techniques and technologies used as well as continue toinnovate in defense technologies.

WithSecure operates globally in different countries, and local regulation
is exposing the company to geopolitical risks, including, for instance,
unfavorable tax matters or export controls. Changes in regulations or theirapplication, applicable to current or new technologies or services, may
adversely affect WithSecure’s business operations.

Market consolidation
The cyber security market is consolidating due to economies of scale.
WithSecure must succeed in finding the right acquisition targets, as well as
successfully integrating the target companies.

Risks relating to launch of new technologies
In a rapidly evolving industry, it is vital to keep products and services relevant
to customers while introducing new technologies to the market on-time.
WithSecure is driving technology simplification and R&D effectivization
initiatives as well as investments in artificial intelligence to ensure acompetitive product portfolio.

Intellectual property rights (IPR)
WithSecure protects its technologies and innovations through copyrights,
patents, trademarks and technology partnerships. While WithSecure uses all
available protection mechanisms, the businesses are exposed to risks relating
intellectual property claims, particularly in the US markets.

Attracting and retaining talentCompetition for capable personnel is increasing and there is structural
undersupply of talent in the cyber security industry. WithSecure iscontinuously developing and adopting new ways of recruitment, building its
own talent and knowledge pools, and investing in training and development of
personnel.

Currency fluctuations
Increased number of operations and sites outside the Euro zone in different
currencies exposes WithSecure to an increased risk related to currency
fluctuations.

Financial performance
Tables19

WithSecure half year report 1 Jan – 30 Jun 2022

Events after period-end

Additional information

Highlights
OutlookCEO review

No material changes regarding the company’s business or financial position
have taken place after the end of the quarter.

Financial calendar
During the year 2022, WithSecure Corporation will publish financial
information as follows:• Interim Report for January–September 2022, October 27, 2022
Contact information

Tom Jansson, CFO

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

Financial performance
Tables20

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights

Key ratios and other key figures
Profitability
Continuing operations
Revenue
Cloud-native corporate security solutions
On-premise corporate security solutions
Cyber security consulting
Gross margin
Gross margin, % of revenue
Operating expenses
Operating expenses for adjusted EBITDA
Adjustment to other income
Adjusted EBITDA
Adjusted EBITDA, % of revenue
EBITDAEBITDA, % of revenue
Adjusted EBIT
Adjusted EBIT, % of revenue
EBIT
EBIT, % of revenue
Estimated combarable EBITDA
Estimated combarable EBITDA, % of revenue
ROI, %
ROE, %
Discontinued operations
Profit after taxes of the operations transferred to F-Secure
Fair value gain recognised from valuation of discontinued
operations’ net assets
Demerger expenses, net of taxes
Translation difference
Result for the period

Outlook

4–6/2022

4–6/2021

1–6/2022

1–6/2021

1–12/2021

32.5
16.8
6.7
8.9
20.7
63.9%
–34.8
–30.9

31.9
12.7
7.5
11.6
21.7
68.1%
–30.7
–27.6

64.8
32.1
13.9
18.9
42.0
64.9%
–71.1
–59.6

63.4
24.6
15.2
23.6
43.1
68.1%
–58.7
–52.5

–9.7
–29.9%–10.5–32.4%–12.1–37.3%–13.5–41.7%–8.0–24.7%–35.2%–30.3%–5.5–17.3%–5.5–17.3%–7.8–24.6%–8.6–26.9%–4.0–12.6%
7.8%
6.4%

–16.6
–25.6%–21.9–33.8%–21.6–33.3%–28.1–43.4%–13.2–20.4%–37.4%–40.6%–8.7–13.7%–8.7–13.7%–13.4–21.1%–14.9–23.5%
–5.6
–8.8%
15.2%
14.8%

130.0
52.7
30.0
47.2
88.5
68.1%
–121.0–107.60.5–17.2–13.3%–16.7–12.8%–26.8–20.6%–30.1–23.2%
–11.3
–8.7%
15.6%
14.3%

18.9

38.2

4.3

13.6

450.5
3.1
1.4
459.2

450.5
3.1
1.4
468.5

8.9

CEO review
Financial performance
Tables21

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights
Outlook
Capital structureContinuing operations 1)
Equity ratio, %Gearing, %Interest bearing liabilities
Cash and financial assets at FVTPL
Share related
Continuing operations
Earnings per share, basic and diluted
Shareholders’ equity per share, EUR1)
Other
Continuing operations
Capital expenditure, MEUR excl. Acquisition 1)
Capitalized development expenses, MEUR 1)
Depreciation and amortization excl. PPA amortization, MEUR
Depreciation and amortization, MEUR
Personnel, average 1)
Personnel, period end 1)
1)

Comparative information is presented for combined operations

4–6/2022

4–6/2021

1–6/2022

1–6/2021

1–12/2021

74.7%–50.7%
14.3
92.3

57.3%
–14.4%
31.7
44.4

59.5%
–25.8%
28.4
53.0

–0.07

–0.04

–0.15
0.88

–0.08
0.55

–0.15
0.60

1.8
1.4
–2.4
–3.0
1,490

3.3
1.7
–2.3
–3.1
1,678

6.2
2.6
–4.9
–6.2
1,570
1,264

7.1
3.0
–4.7
–6.2
1,674
1,694

12.7
5.6
–10.6
–13.4
1,678
1,656

CEO review
Financial performance
Tables22

WithSecure half year report 1 Jan – 30 Jun 2022

Half year report Q2 2022 table section

Highlights
OutlookCEO review

The Half Year Report has been prepared in accordance with IAS 34 Interim
Financial Reporting. COVID-19 impacts on the accounting principles of thisfinancial statement report are limited, and have been presented in the tablesection within relevant items.
On 17 February 2022 WithSecure announced a plan to pursue towards theseparation of the company’s consumer security business through a partial
demerger. The demerger was completed on June 30, 2022. Starting fromthe first quarter of 2022, WithSecure has applied the requirements of IFRS5
Non-current Assets Held for Sale and Discontinued Operations in classifying,presenting and accounting for the demerger financial reporting. Result fromdiscontinued operations is reported separately from continuing operations’income and expenses in the consolidated income statement. Comparative
periods have been restated accordingly. At the completion of the demerger onJune 30, the assets and liabilities related to the discontinued operations were
distributed to F-Secure. Statement of financial position as of 30 June includes
assets and liabilities after the demerger.
At completion, the demerger has been accounted for as a disposal to owners
in accordance with IFRIC 17 Distributions of non-cash assets to owners. A
distribution gain has been calculated based on the difference of the fair valueof consumer security business and the book value of the distributed assets
and liabilities in consolidated statement of financial position. The distribution
gain has been recorded in the discontinued operations’ profit for the period.
The fair value of the consumer security business (EUR 463.0 million) has
been determined by multiplying the average share price of F-Secure on thefirst trading day, July 1, (EUR 2,653) by the number of F-Secure shares given
as demerger consideration (174,526,944). Book value of the distributed asset
and liabilities was EUR 12.5 million resulting in distribution gain of EUR 450.5
million.

Demerger related costs (EUR 3.9 million) are presented under discontinued
operations. Based on the demerger plan, WithSecure has a right to recharge
majority of the demerger related costs from F-Secure. The recharge
recognized on the demerger date reduces the total amount of demerger
costs in discontinued operations by EUR 3.8 million. In addition, cumulativetranslation difference of EUR 1.4 million related to discontinued operations
was recognized as income at completion of the demerger.
Otherwise, the accounting principles are the same as in the annual report2021.
All comparative income statement figures in this Half Year Report havebeen adjusted according to a restatement. A stock exchange release on therestatement has been published on 16 May 2022.
All figures in the following tables are EUR million unless otherwise stated. This
half year report is unaudited.

Financial performance
Tables23

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights

Income statement
Continuing operations
Revenue
Cost of revenue
Gross margin
Other operating income
Sales and marketing
Research and development
Administration 1)
EBIT
Financial net
Result before taxes
Income taxes
Result for the period, continuing operations
Result for the period, discontinued operations 2)
Result for the period, group total
Other comprehensive income
Exchange differences on translating foreign operations,continuing operations
Exchange differences on translating foreign operations,discontinued operations
Total other comprehensive income, continuing operations
Total other comprehensive income,discontinued operations
Total comprehensive income (parent company owners)
Earnings per share 3)
Earnings per share, basic and diluted, EUR,
combined operations
Earnings per share, basic and diluted, EUR,
continuing operations
Earnings per share, basic and diluted, EUR,
discontinued operations

Outlook
4–6/2022

Restated
4–6/2021

Change %1–6/2022

Restated
1–6/2021

Change %Restated
1–12/2021

32.5
–11.7
20.7
0.5
–21.3
–9.4
–4.1
–13.5
–0.2
–13.7
1.4
–12.3
459.2
446.8

31.9
–10.2
21.7
0.4
–18.7
–7.7
–4.3
–8.6
–0.4
–9.0
1.6
–7.5
8.9
1.4

2%
15%
–4%
17%
14%
22%
–5%
58%
–66%
51%
–12%
65%
n/a
n/a

64.8
–22.8
42.0
0.9
–41.2
–18.6
–11.3
–28.1
–0.5
–28.6
3.2
–25.3
468.5
443.1

63.4
–20.2
43.1
0.8
–36.1
–15.0
–7.6
–14.9
–0.2
–15.0
2.5
–12.6
18.9
6.3

2%
13%
–3%
12%
14%
23%
50%
89%
175%
90%
30%
102%
n/a
n/a

130.0
–41.5
88.5
2.5
–73.3
–32.1
–15.7
–30.1
–0.3
–30.5
5.0
–25.5
38.2
12.7

–1.7

–0.1

n/a

0.7

4.3

–84%

3.9

–0.6
–14.0

0.0
–7.6

n/a
84%

0.9
–24.7

0.1
–8.3

n/a
199%

0.1
–21.5

458.5
444.5

8.9
1.3

n/a
n/a

467.6
442.9

18.9
10.7

n/a
n/a

38.2
16.7

4–6/2022

4–6/2021

Change %1–6/2022

1–6/2021

Change %1–12/2021

2.66

0.01

n/a

2.64

0.04

n/a

0.08

–0.07

–0.04

65%

–0.15

–0.08

101%

–0.15

2.73

0.05

n/a

2.79

0.11

n/a

0.23

Net impact of demerger related costs for continuing operations in second quarter is EUR 0.8 million.
Discontinued operations’ result for the period includes also the distribution gain, demerger expenses and cumulative translation difference related to disposed business.
3)
Earnings per share has been recalculated for comparative periods using average weighted share amount after share issue in first quarter of 2022.
1)
2)

CEO review
Financial performance
Tables24

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights

Statement of financial position

OutlookCEO review

Reported balance sheet figures include both continuing and discontinued operations for the comparative periods. At completion of the
demerger, assets and liabilities related to consumer security business were transferred to F-Secure. Thus, balance sheet 30 June 2022
includes only WithSecure’s assets and liabilities.
AssetsTangible assets
Intangible assets
Goodwill
Deferred tax assets
Interest bearing receivables, non-current
Other receivables
Total non-current assets
Inventories
Interest bearing receivables, current
Accrued income
Trade and other receivables 1)
Income tax receivables
Financial asset at fair value through profit and loss
Cash and bank accounts
Total current assets
Total assets

30 Jun 2022
10.7
26.1
85.0
4.7
6.4
3.1
135.9

Shareholders’ equity and liabilities
EquityInterest bearing liabilities, non-current
Deferred tax liability
Deferred revenue, non-current
Other non-current liabilities
Total non-current liabilities
Interest bearing liabilities, current
Trade and other payables
Income tax liabilities
Deferred revenue, current
Total current liabilities
Total liabilities and equity
1)

30 Jun 2021
13.9
34.5
85.8
4.1

31 Dec 2021
12.7
33.0
85.1
4.1

0.9
5.1
38.4
1.3
0.0
92.2
138.0
273.9

1.1
139.3
0.1

1.9
136.9
0.1

4.3
47.4
1.0
0.1
44.3
97.1
236.4

4.7
49.9
1.7
0.1
52.9
109.4
246.2

30 Jun 2022
154.0
9.8
2.3
23.3
0.3
35.7
4.5
33.8
1.6
44.4
84.3
273.9

30 Jun 2021
87.8
21.6
0.9
25.9
0.3
48.8
10.1
28.7
3.7
57.3
99.8
236.4

31 Dec 2021
95.4
17.6
1.9
26.0
0.3
45.8
10.8
30.0
4.2
60.1
105.1
246.2

Provision for expected credit losses continues to include a small increase due to the COVID-19 pandemic.

Financial performance
Tables25

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights

Cash flow statement

OutlookCash flow statement includes continuing and discontinued operations.

CEO review
4–6/2022

4–6/2021

1–6/2022

1–6/2021

1–12/2021

446.8–445.43.0–451.8
3.4
1.4

1.4
5.5
3.5

6.3
10.7
7.0

12.7
22.7
15.1

2.0
6.9

443.1
–437.66.6–451.8
7.6
5.5

3.7
17.0

7.7
35.4

Change in net working capital

–1.4

6.0

–4.4

2.2

3.3

Cash flow from operating activities before financial items and taxes

0.0

12.9

1.1

19.2

38.7

Net financial items and taxes

–2.0

–2.7

–6.4

–5.5

–7.9

Cash flows from operating activities

–2.0

10.2

–5.3

13.8

30.7

Cash flow from investments
Net investments in tangible and intangible assets
Divestments of subsidiaries, net of cash

–1.2

–2.0

–2.5
–1.1

–3.4

–6.1

Cash flow from investments

–1.2

–2.0

–3.6

–3.4

–6.1

Cash flow from financing activities
Proceeds from issue of shares
Repayments of interest bearing liabilities
Repayments of lease liabilities
Dividends paid
Cash flow from financing activities

–19.0
–1.2
–20.2

–3.0
–1.5
–6.3
–10.9

54.1

–8.0
–3.0
–6.3
–17.4

–11.0
–6.0
–6.3
–23.3

Change in cash

–23.4

–2.6

45.2

–7.0

1.3

Cash and bank at the beginning of the period
Effect of exchange rate changes on cash
Demerger effect in cash 1)
Cash and bank at period end

121.5
0.0
–5.9
92.2

47.1
–0.1

52.9
0.0
–5.9
92.2

51.4
0.0

51.4
0.3

44.3

52.9

Cash flow from operations
Result for the financial year
Adjustments
Depreciation and amortization
Non-cash adjustments related to demerger
Other adjustments
Cash flow from operations before change in working capital

1)

44.3

76.0
–19.0
–2.9

 emerger effect in cash includes cash held by F-Secure’s subsidiaries at the time of demerger. Cash held by parent company at completion of the demerger will be divided between
D
WithSecure and F-Secure as determined in the demerger plan. F-Secure share of the cash remaining at WithSecure on 30 June is EUR 6.8 million and it has been recorded as a liability
towards F-Secure. Cash will be transferred in July.

Financial performance
Tables26

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights

Statement of changes in shareholders’ equity

OutlookCEO review

Equity 31 Dec 2020
Total comprehensive income for the year
Dividend
Cost of share based payments
Equity 30 Jun 2021

Equity 31 Dec 2021
Total comprehensive income for the year,
continuing operations
Total comprehensive income for the year,
discontinued operations
Share issue
Dividend
Reduction of share capital and sharepremium reserve
Cost of share based payments
Assets transferred in the demerger at fairvalue
Equity 30 Jun 2022

Share premium
Share capital
fund
1.6
0.2

Unrestrictedequity reserve
6.5

Treasuryshares–1.3

Financial performance

1.6

0.2

0.3
6.8

0.4
–0.8

Retainedearnings
79.6
6.3
–6.3
0.4
79.9

Share capital
1.6

Share premium
fund
0.2

Unrestrictedequity reserve
6.8

Treasuryshares–0.8

Retainedearnings
87.8

Translationdifference
–0.1

Total
95.4

–25.3

0.7

–24.7

468.5

–0.9

0.0

467.6
76.0
0.0
0.0
2.7

76.0
–1.5

–0.2

0.1

0.0

0.9

0.7

1.6
1.1

83.6

–0.2

–463.070.8

Translationdifference
–4.1
4.4

0.3

Total
82.3
10.7
–6.3
1.1
87.8

–0.4

–463.0154.0

Based on resolution of the Extraordinary General Meeting, WithSecure Corporation reduced share capital to EUR 80,000 and dissolved share premium fund in
relation to the demerger.
Liability for the assets transferring in the demerger at fair value was recognized after resolution of the Extraordinary General Meeting. Impact of the liability
recognition is offsetting the impact of distribution gain through income statement in Company’s equity.

Tables27

WithSecure half year report 1 Jan – 30 Jun 2022

1 Significant exchange rates and sensitivity
to exchange rate changes

Highlights
OutlookCEO review
Financial performance

One Euro is
USD
GBP
JPY

1–6/2022
1.10060.8406133.00

Average rates
1–6/2021
1.20890.8724129.62

1–12/2021
1.18940.8633130.00

1–6/2021–0.3/0.3+/–0.0–0.2/+0.2

1–12/2021–0.3/+0.3–0.2/+0.2–0.3/+0.3

Effect of changes in exchange rates on profit before taxes+/–10% FX rate change
USD
GBP
JPY

1–6/2022–0.7/+0.8–0.3/+0.3–0.2/+0.2

30 Jun 2022
1.03870.8582141.54

End rates
30 Jun 2021
1.18840.8581131.4331 Dec 2021
1.13260.8403130.38

Tables28

WithSecure half year report 1 Jan – 30 Jun 2022

2 Segment information

Highlights

The Group has only one segment (security).

CEO review

OutlookFinancial performance

Disaggregation of revenue
Continuing operations
By sales channels
Corporate security
Cloud-native solutions
On-premise solutions
Cyber security consulting
Total revenue
By geographical area
Nordic countries
Rest of Europe
North America
Rest of the world
Total revenue

Tables

4–6/2022

4–6/2021

1–6/2022

1–6/2021

1–12/2021

16.8
6.7
8.9
32.5

12.7
7.5
11.6
31.9

32.1
13.9
18.9
64.8

24.6
15.2
23.6
63.4

52.7
30.0
47.2
130.0

4–6/2022
10.3
14.4
2.8
4.9
32.5

4–6/2021
10.2
13.8
2.1
5.7
31.9

1–6/2022
20.4
28.2
5.4
10.9
64.8

1–6/2021
20.4
27.2
4.4
11.3
63.4

1–12/2021
40.3
55.1
10.0
24.6
130.0

29

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights

3 Discontinued operations

OutlookCEO review

On 17 February 2022 WithSecure announced a plan to pursue towards theseparation of the company’s consumer security business (F-Secure) througha partial demerger. Demerger was completed on June 30, 2022. Following
information includes impacts of discontinued operations on reported income
statement and cash flow. Statement of financial position represents assets
and liabilities related to Consumer security business right before the demerger
on 30 June. Income statement for discontinued operations include revenue
and operating expenses which directly derive from Consumer security
business and will discontinue for continuing business after the demerger.
Certain costs related to supporting F-Secure during transition period andcosts of premises which will be sub-leased to F-Secure are not included in
Discontinued operations.

Financial performance
TablesIncome statement for discontinued operations
Revenue
Cost of revenue
Gross margin
Other operating income
Sales and marketing
Research and development
Administration
EBIT
Financial net
Result before taxes
Income taxes
Profit after taxes of the operations transferred to F-Secure
Fair value gain recognised from valuation of discontinued
operations’ net assets
Demerger expenses
Taxes related to demerger expenses
Translation difference
Result for the period

4–6/2022
27.5
–2.2
25.2
0.2
–8.1
–4.2
–6.0
7.2
0.0
7.2
–2.9

4–6/2021
26.3
–2.1
24.3
0.1
–6.7
–3.5
–3.2
10.9
0.1
11.1
–2.2

1–6/2022
54.8
–4.4
50.5
0.3
–14.6
–7.9
–9.5
18.8
0.2
19.0
–5.4

4.3

13.6

450.5
3.8
–0.7
1.4
459.2

450.5
3.8
–0.7
1.4
468.5

8.9

1–6/2021
52.6
–4.2
48.4
0.1
–13.0
–7.2
–5.0
23.4
0.1
23.5
–4.6

1–12/2021
106.3
–9.1
97.2
0.3
–25.9
–14.5
–9.3
47.8
0.1
47.9
–9.8

18.9

38.2

30

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights
OutlookStatement of financial position for discontinued operations
AssetsTangible assets
Intangible assets
Deferred tax assets
Other long-term receivables
Total non-current assets
Inventories
Accrued income
Trade and other receivables
Cash and bank accounts
Total non-current assets
Total assets

30 Jun 2022
0.9
6.2
0.1
0.1
7.3
0.0
2.1
19.0
12.7
33.9
41.2

Equity and liabilities
Deferred tax liability
Deferred revenue, non-current
Other non-current liabilities
Total non-current liabilities
Current interest bearing liabilities
Trade and other payables
Deferred revenue, current
Income tax liabilities
Total current liabilities
Total liabilities

30 Jun 2022
0.3
3.3
0.1
3.7
0.1
4.9
17.3
0.9
23.1
26.8

4–6/2022
10.3
–0.1
0.0

Financial performance
TablesCash flows for discontinued operations
Net cash flow from operating activities
Net cash flow from investing activities
Net cash flow from financing activities

CEO review

4–6/2021
13.2
–0.5
0.0

1–6/2022
18.3
–0.6
0.0

1–6/2021
18.7
–0.7
–0.1

1–12/2021
40.2
–1.6
–0.2

31

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights

4 Intangible and tangible assets

OutlookCEO review

Book value at the beginning of the period
Acquisitions and divestments
Additions
Disposals
Depreciation and amortization
Impairment
Translation differences
Demerger impact 1)
Book value at the end of the period
1)30 Jun 2022
130.9
–0.6
7.4
–2.5
–6.2

30 Jun 2021
130.0

31 Dec 2021
130.0

7.1
–0.8
–7.0

–0.2
–7.1
121.7

4.8

12.7
–1.2
–14.2
–1.0
4.5

134.1

130.9

Demerger impact includes all WithSecure’s Consumer business related tangible and intangible assets which were transferred to F-Secure on June 30, 2022.

Financial performance
Tables32

WithSecure half year report 1 Jan – 30 Jun 2022

5 Fair value measurement offinancial assets and liabilities

Highlights

Fair value hierarchy levels 1 to 3 are based on the degree to which the fair value is observable:

Financial performance

Level 1: Fair values of financial instruments are
based on quoted prices in active markets for
identical assets and liabilities

Level 2: Financial instruments are not subject totrading in active and liquid markets. The fair valuesof financial instruments can be determined basedon quoted market prices and deduced valuation.

OutlookCEO review

Level 3: Measurement of financial instruments is
not based on verifiable market information, andinformation on other circumstances affecting
the value of the instruments is not available orverifiable.

Continuing operations

Cash and bankFinancial assets at FVTPL
Trade receivables
Trade and other payables

Carrying value
Financial
Financial assets
liabilities
Amortized
Amortized
cost
cost
FVTPL
92.2
0.0
33.8
9.3

Contractual maturities of financial liabilities
Lease liabilities
Other loans
Total financial liabilities

Less than
1 year
4.6

1 to 2 years
4.1

4.6

4.1

2 to 3 years
1.8
3.6
5.4

Fair value
Hierarchy level
Total
92.2
0.0

1

2

3

0.0

Total
0.0

9.3

3 to 4 years
0.1
0.1

4 to 5 years Over 5 years
0.1
0.0
0.1

0.0

Total
contractual
cash flows
10.7
3.6
14.3

On 30 June, WithSecure made an early repayment of EUR 19.0 million to the bank loan. The committed revolving credit facility was also cancelled.
Other loans are liabilities related to asset transfers in Group subsidiaries in relation to demerger.

Carrying
amount
10.7
3.6
14.3

Tables33

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights

6 Reconciliation of alternative performancemeasures

OutlookCEO review
Financial performance

WithSecure has included certain non-IFRS based alternative performancemeasures (APM). Alternative performance measures are provided to reflect
the underlying business performance, and to exclude certain non-operationalor non-cash valuation items affecting comparability (IAC). The aim is toimprove comparability, and alternative performance measures should not be
regarded as substitutes for IFRS based measures. Alternative performancemeasures include EBITDA, adjusted EBITDA, estimated comparable
EBITDA and adjusted EBIT. Depreciations, amortization and impairments are
excluded from EBITDA. Adjusted EBITDA and adjusted EBIT exclude also
IACs which are material items outside the normal course of business. These

Continuing operations
Estimated comparable EBITDA
Adjustments to adjusted EBITDA
Research and development
Facilities held by WithSecure
Adjusted EBITDA
Adjustments to EBITDA
Divestments
Demerger
EBITDA
Depreciation, amortization and impairment losses
EBIT

Continuing operations
Adjusted EBIT
Adjustments to EBIT
PPA amortization
Impairment
Divestments
Demerger
EBIT

items are associated with acquisitions, integration costs, gains and losses
from the sale of businesses and other items affecting comparability. Estimatedcomparable EBITDA has been added in Q1 2022 to improve comparability
as presentation of WithSecure and F-Secure in accordance with IFRS5 does
not reflect profitability of neither continuing or discontinued business on astand-alone basis prior to the demerger. Estimated comparable EBITDA
excludes costs related to research and development which will be provided by
WithSecure to F-Secure. It also excludes cost of premises held by WithSecurebut sub-leased to F-Secure.

4–6/2022

4–6/2021

1–6/2022

1–6/2021

1–12/2021

–8.0

–4.0

–13.2

–5.6

–11.3

–1.3
–0.4
–9.7

–1.1
–0.4
–5.5

–2.5
–0.8
–16.6

–2.3
–0.8
–8.7

–4.4
–1.6
–17.2

–0.8
–10.5
–3.0
–13.5

–5.5
–3.1
–8.6

–3.1
–2.1
–21.9
–6.2
–28.1

–8.7
–6.2
–14.9

–16.7
–13.4
–30.1

4–6/2022

4–6/2021

1–6/2022

1–6/2021

1–12/2021

–12.1

–7.8

–21.6

–13.4

–26.8

–0.6

–0.7

–1.3

–1.5

–8.6

–3.1
–2.1
–28.1

–2.8
–1.0
0.5

–14.9

–30.1

–0.8
–13.5

0.5

Tables34

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights
OutlookCEO review

Classification of adjusted costs in operating expenses

Continuing operations
Sales and marketing
Research and development
Administration
Operating expenses

Continuing operations
Sales and marketing
Research and development
Administration
Operating expenses

OperatingExpenses
Q2 2022

Demerger

Expenses foradjusted EBIT

Depreciation

0.8
0.8

–21.3
–9.4
–3.3
–34.0

0.8
1.5
0.1
2.4

–21.3
–9.4
–4.1
–34.8

OperatingExpenses
1–6/2022
–41.2
–18.6
–11.3
–71.1

Demerger

2.1
2.1

Financial performance

PPA
amortization

OperatingExpenses for
Adjusted EBITDA
Q2 2022

0.6
0.6

–20.5
–8.0
–2.5
–30.9

Divestments

Expenses foradjusted EBIT

Depreciation

OperatingExpenses for
PPA Adjusted EBITDA
amortization
1–6/2022

3.1
3.1

–41.2
–18.6
–6.1
–65.9

1.9
2.7
0.3
4.9

–39.3
–15.9
–4.5
–59.6

1.3
1.3

Tables35

WithSecure half year report 1 Jan – 30 Jun 2022

Highlights

Calculation of key figures

OutlookCEO review
Financial performance

Equity ratio, %ROI, %

ROE, %

Gearing, %Earnings per share, EUR

Shareholders’ equity per share, EUR

Total equity
Total assets – deferred revenue
Result before taxes + financial expenses (annualized)
Total assets – non-interest bearing liabilities (average)
Result for the period (annualized)
Total equity (average)
Interest bearing liabilities – cash and bank and financial asset through profit and loss
Total equity
Profit attributable to equity holders of the company
Weighted average number of outstanding shares
Equity attributable to equity holders of the company
Number of outstanding shares at the end of period

Operating expenses

Sales and marketing, research and development, and administration costs

EBITDAEBIT + Depreciation, amortization and impairment

× 100

× 100

× 100

× 100

TablesHighlights
OutlookCEO review
Financial performance
TablesWithSecure Corporation
Tammasaarenkatu 7
P.O. Box 24, 00181 Helsinki
Tel. +358 9 2520 0700
investor-relations@withsecure.com
withsecure.com/en/about-us/investor-relations