Avast plc, together with its subsidiaries (‘Avast’, ‘the Group’ or ‘the Company’), a leading global cybersecurity provider, announces its results for the six-months ended 30 June 2021.
Ondrej Vlcek, Chief Executive of Avast, said:
“In line with the Board’s expectations, we are pleased to report a resilient set of group results for the first half of 2021, against the backdrop of a strong prior year performance. The Group delivered double-digit organic revenue growth1 and sustained high levels of profitability with Adjusted EBITDA margin at 57.3%2.
“We are optimistic about Avast’s prospects for the second half of the year, and as comparator period trends start to normalise, we anticipate a reacceleration of billings growth. The launch of our new flagship Avast One product remains on track for later this year. Our focus remains on driving customer engagement, acquisition and retention, which will require higher levels of margin investment in R&D, innovation and marketing over the medium term.”
FINANCIAL HIGHLIGHTS
· Good overall performance in line with the Board’s expectations
· Billings at $482.7m up 2.9% at actual rates, with organic growth of 0.9%
· Revenue at $471.3m up 8.8% at actual rates, with organic growth of 10.4%
· Consumer Direct Revenue at $401.6m, up 15.0% at actual rates, with organic growth of 13.9%
· Adjusted EBITDA up 11.9% to $270.2m; Adjusted EBITDA margin at 57.3%, up 159bps
· Adjusted fully diluted earnings per share (‘EPS’) up 20.5% to $0.20 (versus $0.16 at HY 2020)
· Final dividend in respect of 2020 paid in June 2021 of 11.2 cents per share; total dividend for the year of 16.0 cents per share, up 8.8%. Declared interim dividend payable in October 2021 of 4.8 cents per share
· Continued strong cash generation with Unlevered Free Cash Flow up 9.0% to $263.1m and Levered Free Cash Flow up 12.6% to $248.8m
· Resilient balance sheet with $397.6m of cash and available liquidity3. Net debt / LTM (‘last twelve months’) Adjusted EBITDA at 1.0x at half year
· On a statutory basis, Operating profit up $92.2m from $134.5m to $226.7m, fully diluted EPS at $0.20 (versus $0.08 at HY 2020)
OPERATIONAL AND STRATEGIC HIGHLIGHTS
· Consumer Direct operating KPI’s tracked positively. In the six months to June, customers4 were up 1.5% to 16.72m, Average Products Per Customer5 increased 0.8% to 1.42 and Average Revenue Per Customer6 was up 4.4% to $47.61.
· As the competitive market becomes more dynamic, renewed investment focus has been placed on marketing and other top-of-the-funnel initiatives to drive customer engagement, acquisition and retention activities, which will require higher levels of margin investment over the medium term.
· Desktop customer retention rates at 69 percent, up 4 ppts since IPO, driven by Avast’s customer retention strategies. Renewals in H1 have remained resilient, with only minor degradation in the ‘Covid cohort’ and evidence of opportunity for further improvement.
· Avast’s privacy service offering was further enhanced. AntiTrack benefited from a user experience redesign. BreachGuard was upgraded with ‘Identity Assist’, offering ID theft resolution and scam assist.
· There was continued successful execution on the global growth strategy, with increases in desktop customer numbers in both established markets and target underpenetrated countries, including Ukraine up 17%, Russia up 7%, and Mexico up 5%.
· The market release of the company’s innovative integrated solution Avast One remains on track for the second half of the current year.
· Avast continued to enrich its SMB offering through product innovation, notably through the launch of the new Avast Business Hub, a state-of-the-art integrated security platform.
· To advance its business strategy in identity, Avast made two senior executive appointments: a new Senior Vice President and GM of Identity, Charles Walton and a Global Head of Development, Paul Carter.
· Post period end the Board established a new Security and Privacy Committee to provide oversight in relation to the group’s information security strategy, data security, data governance and privacy governance.
RECOMMENDED MERGER OF AVAST PLC WITH NORTONLIFELOCK INC.
On 10 August 2021, the Boards of NortonLifeLock, Inc. and the Company reached agreement on the terms of a recommended merger of Company with Norton, in the form of a recommended offer by Nitro Bidco Limited, a wholly owned subsidiary of Norton, for the entire issued and to be issued ordinary share capital of the Company. It is intended that the Merger will be affected by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act. Further details relating to the offer by Norton, including the offer price and conditionality, is set out in the announcement made by Norton on 10 August 2021 pursuant to Rule 2.7 of the City Code on Takeovers and Mergers.
RESULTS PRESENTATION RECORDING AND LIVE Q&A
A recording of the results webcast presentation will shortly be available on the Company website at https://investors.avast.com. Avast management will also hold a live Q&A session for analysts and investors at 9:00 AM BST today (11 August 2021), addressing both results and the recommended merger. Please register at the Company website to participate.
