F-Secure Group’s Financial Results January 1 – June 30, 2002

Steady anti-virus sales growth in a challenging environment, continued positive cash flow

For the 2nd quarter of 2002, F-Secure reported revenues of 9.1 million euros. This represents a decrease of 15% from the second quarter of 2001 and a decrease of 9% from the previous quarter. For the first six months of 2002 revenue was 19.0 million euros, representing a decline of 8% from the first six months of 2001. The decline was due to an unprecedented low level of corporate software demand. This affected especially the group’s encryption sales to the corporate sector.

The operating result for the second quarter was EUR 1.4 million negative (0.7m negative in 1Q2002 and 4.0m negative in 2Q2001). For the first six months of 2002 the operating result was EUR 2.1 million negative (8.9m negative in the first six months of 2001). Cash flow remained positive for the third quarter in a row and was 1.0 million in 2Q2002.

The anti-virus business continued stable with moderate annual growth, 9% for the first six months of 2002, compared to the same period a year ago. Steady progress was made in all geographical regions. Also the number of anti-virus service subscriptions grew steadily. The overall business climate continued to deteriorate and was tougher than ever witnessed by the Group. The encryption business continued to face long lead times resulting from extremely cautious IT spending, especially in the North American market, and declined overall by 18% in the first six months.

During the second quarter of 2002, the Group continued to leverage its key partnerships in the handheld and wireless content security space (Compaq, Fujitsu-Siemens, Hewlett-Packard and Nokia). However, according to recent market studies the market for handheld devices has declined in Q2 and the impact can be seen from a slow ramp-up of revenues in this business area.

“We believe the data security markets will grow in the long term and we are focusing particularly on the handheld and anti-virus areas,” says Risto Siilasmaa, President and CEO of F-Secure Corporation. “The licensing and distribution agreements we have signed with leading manufacturers of handheld devices strengthen our position, and we believe that the anti-virus business will continue to grow moderately.”

A press and analyst conference will be arranged today, August 6, at 11 am Finnish time at the Group’s Headquarters, Tammasaarenkatu 7, Helsinki. Full stock exchange release can be read at: http://www.europe.f-secure.com/investor-relations/

Additional information:
F-Secure Corporation
Risto Siilasmaa, President and CEO tel.358 9 2520 5510
Markku Pirskanen, CFO tel.358 9 2520 5606




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