Avast Plc Half Year Results for the six-months Ended 30 June 2019

LONDON, Aug. 14, 2019 /PRNewswire/ -- Avast (LSE:AVST), 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 2019.

Ondrej Vlcek, Chief Executive of Avast, said, "We are pleased to report a strong set of group results for the first half of 2019, in line with the Board's expectations. Group Adjusted Revenue increased by 9.2% on a like-for-like basis, driven by double-digit growth in our Consumer Direct Desktop business. We also sustained high levels of profitability with Adjusted EBITDA margin at 55.4%.

"The strategic advantage of our global consumer platform model shows clearly in these results, with strong revenue growth driven by cross-sell promotions within the installed user base. I am delighted to see Avast reap the benefit of its investment in innovation and the customer experience. Strong demand for Avast's value-added solutions, such as VPN, Utilities and AntiTrack, has been accompanied by a resilient performance from our traditional anti-virus products. While the mobile carrier channel was below our expectations, elsewhere in the consumer business there was good momentum in both customer conversion and retention rates.

"Avast reached an important strategic milestone in the first half of 2019 with the release of direct-to-consumer and carrier-based IoT solutions. Using cutting-edge technology, these products will protect users' entire digital lives. We are very excited about the opportunity ahead.

"The Group's first half performance underpins a strong full year outlook. We now expect like-for-like FY2019 revenue growth to be at the upper end of the previously stated high single-digit percentage range."

FINANCIAL HIGHLIGHTS

• Strong overall performance in line with expectations
• Adjusted Billings excluding FX¹, Discontinued Business² and disposal of the Managed Workplace business³ up 12.5%, 9.2% in actual rates to $454.6m
• Adjusted Revenue excluding FX, Discontinued Business and disposal of the Managed Workplace business up 9.2%, 8.3% in actual rates to $421.7m
• Adjusted Revenue in Consumer Direct Desktop excluding FX up 10.5%, 9.5% in actual rates to $307.6m
• Adjusted EBITDA up 6.5% to $236.5m; Adjusted EBITDA margin⁴ at 55.4%, up 36bps
• Adjusted fully diluted earnings per share ('EPS') $0.15 (versus $0.14 at HY 2018)
• Proposed interim dividend payable in October 2019 of 4.4 cents per share
• Continued strong cash generation with Unlevered Free Cash Flow up 20.0% to $230.4m and Levered Free Cash Flow up 29.9% to $200.2m
• Net debt / LTM ('last twelve months') Adjusted EBITDA at 2.4x at half year
• On a statutory basis, Revenue up from $388.6m to $425.4m, Operating profit up from $109.7m to $161.9m, fully diluted EPS at $0.11.

OPERATIONAL AND STRATEGIC HIGHLIGHTS

• Desktop operating KPI's tracked positively, with customers⁵ up 1.8% to 12.41m, APPC⁶ up 2.3% to 1.43 and ARPC⁷ 2.3% to $50.38
• The core Consumer Direct Desktop business continued to power the Group's performance. Strong growth was driven from the cross-selling of Privacy products such as VPN and AntiTrack, and Performance products such as Cleanup and Driver Updater
• Growth to customer numbers and penetration has been delivered in both traditional territories and new target countries, with localisation of more products, sales flows and partnerships
• Traditional AV has benefited from the further optimisation of comprehensive Smart Scans to support up-selling 
• Avast's Internet of Things ('IoT') project reached two important milestones: in the period, the carrier-based solution went live with the operator WindTre in Italy; in July, the direct-to-consumer product 'Omni' was released to Avast users in the US market
• A strategic partnership for the analytics business Jumpshot was announced in July to help capture additional growth opportunities

PRESENTATION OF RESULTS

There will be a live webcast presentation and conference call of the results to analysts and investors at 9:00 AM BST today (14 August 2019). Please register to participation at the Company website https://investors.avast.com. A Q&A facility will be available for conference call participants.

ENQUIRIES

Investors and analysts:
Peter Russell, Director of IR
[email protected]

Media:
Stephanie Kane, VP PR and Corporate Communications                                    
[email protected]

Tavistock
+44 20 7920 3150

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This announcement contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the Company's business. Whilst the Company believes the expectations reflected herein to be reasonable in the light of the information available to them at this time, the actual outcome may be materially different owing to factors beyond the Company's control or within the Company's control where, for example, the Company decides on a change of plan or strategy. Accordingly, no reliance may be placed on the figures contained in such forward-looking statements.

Notes:

Throughout the Half Year Report a number of alternative performance measures are used to provide users with a clearer picture of the performance of the business. This is in line with how management monitor and manage the business day-to-day. Definitions and details are provided below. Further definitions (see 'PRESENTATION OF RESULTS AND DEFINITIONS') and reconciliations (see 'FINANCIAL REVIEW') of non-GAAP measures are included in the notes to the financial statements.

All dollar figures throughout the report are at actual currency rates unless otherwise indicated.

¹ Growth rate excluding currency impact calculated by restating H1 2019 actual to H1 2018 FX rates (see "Principal exchange rates applied"). Deferred revenue is translated to USD at date of invoice and is therefore excluded when calculating the impact of FX on revenue.

² As the company is exiting its toolbar-related search distribution business, which had previously been an important contributor to AVG's revenues (referred to above and throughout the Half Year Report, with the Group's browser clean-up business, as 'Discontinued Business'), the growth figures exclude Discontinued Business, which the Group expects to be negligible by the end of 2020. The Discontinued Business does not represent a discontinued operation as defined by IFRS 5 since it has not been disposed of but rather it is being continuously scaled down and is considered to be neither a separate major line of business, nor geographical area of operations.

³ On 1 February 2019 Avast plc sold the non-core asset of Managed Workplace, its remote monitoring and management product, to Barracuda Networks, Inc. ('Barracuda'). Managed Workplace was Avast's solution in the Remote Monitoring and Management ('RMM') space, which is sold to Managed Service Providers ('MSPs'). This business was not core to our SMB strategy, which focuses on securing the workplace. Barracuda, which has a large existing MSP base but did not offer an RMM solution, provides a better long-term solution for this business. In addition, Barracuda has signed a reseller agreement with Avast under which it now resells Avast's business security solutions to MSPs. In the year ended 31 December 2018 the asset generated low teen revenue (USD million) with a materially lower margin profile than the Group.

⁴ Adjusted EBITDA margin percentage is defined as Adjusted EBITDA divided by Adjusted Revenue.

⁵ Users who have at least one valid paid Consumer Direct Desktop subscription (or licence) at the end of the period.

⁶ APPC defined as the Consumer Direct Desktop simple average valid licences or subscriptions for the financial period presented divided by the simple average number of Customers during the same period.

⁷ ARPC defined as the Consumer Direct Desktop revenue for the financial period divided by the simple average number of Customers during the same period.

⁸ The Group applied the IFRS 16 standard as of 1 January 2019 using the modified retrospective approach and did not restate comparative amounts for the year prior to first adoption. Net Debt as of 30 June 2019 includes the balance of IFRS 16 lease liabilities. No lease liabilities are included in the Net Debt as of 30 June 2018.

⁹ 'Fav' in change % represents favorable growth rate figure over 100 per cent, 'Unf' represents unfavorable decline greater than negative 100 per cent.

SOURCE Avast

Related Links

http://www.avast.com

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