Board of Directors’ report
and financial statements
Board of Directors’ report .......................... 10
Key gures ............................................... 18
Calculation of key ratios ............................... 19
WithSecure consolidated nancial statements 22
Statement of comprehensive income ............... 22
Statement of nancial position ....................... 23
Statement of cash ows .............................. 24
Statement of changes in equity ...................... 25
Notes to the Financial Statements ................... 26
WithSecure Corporation nancial statements . 49
Income statement ...................................... 49
Balance sheet ........................................... 50
Cash ow statement ................................... 51
Notes to the parent company
Financial
Statements ................................... 52
Auditor’s Report ........................................ 62
WithSecure
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With the pandemic slowly receding in early 2022, the world faced new turmoil of
the geopolitical landscape with the start of the war in Ukraine. Both crises have,
in addition to a multitude of impacts on the society, had fundamental impacts on
shaping the cyber security landscape. WithSecure is offering a portfolio of cyber
security products and services, to participate in protecting the companies from
the increasingly complicated cyber security risks.
On 30 June 2022, WithSecure completed the separation of its Consumer
security business into an independent company F-Secure through a partial
demerger, according to the plan first announced on 17 February 2022 by the
Board of Directors. In this Annual Report, WithSecure is presenting consumer
security business until its demerger as Discontinued operations under IFRS
5. Previous income statements are restated accordingly. Balance sheet
before demerger and the related key figures are not restated, unless otherwise
mentioned. For further information regarding the presentation of the demerger-
related financials, see Accounting principles for the consolidated financial
statements and Note 11 (Discontinued operations).
WithSecure revenue for 2022 was EUR 134.7 million, representing a total
growth of comparable revenue by 9.7% from previous year. The growth in
2022 was driven by the cloud-based security products, with a 33% growth of
comparable revenue. On-premise revenue declined according to expectations.
Cyber security consulting revenue of the fourth quarter of 2022 grew slightly,
after a challenging year.
Market overview
Digital networks are becoming an essential component of society that must
always work. Disruptions of the digital network can cause serious damage to
society and well-being of its members.
The war in Ukraine caused some exceptional consequences to the cyber
security landscape, such as highly visible governmental activities, as well
as organized civilian response. New situations can lead to uncontrolled
cyber security threats that can be difficult to predict. In the new era of greater
uncertainty, adaptability and resilience of cyber security solutions become more
relevant than ever.
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, both
traditional and new connected devices as well as online services. Apart from
pure criminal activity, governments can use vulnerabilities and malware for
surveillance purposes.
With the increasingly complex IT environments and new ways of working, such
as bring-your-own-device, the attacks are evolving towards difficult-to-detect
identity thefts, rather than malware deployment. Attacks against corporations
can go undetected for months. It is estimated that these trends will continue to
drive the increasing demand for Detection and response products and services.
As part of improved cyber resilience, the work on Incident readiness is becoming
more important than before.
As organizations are adopting cloud solutions, they seek managed security
services and cloud-based delivery to help them maintain control of their
cyber security. It is also becoming increasingly important that the selected
cyber security solutions are working well together with other vendors’ security
solutions through API integrations, to ensure seamless best-in-class solutions
for the entire IT environment.
More organizations (particularly in Europe) are taking a stricter position on
data protection laws, meaning that globally delivered services are accepted
less frequently. This will increase the need for proven services from established
vendors, who can respect the data restrictions to a particular region, even to a
particular country.
Financial performance and key figures
Revenue and ARR
The company’s total comparable revenue grew by 9.7% to EUR 134.7 million
from previous year (EUR 122.8 million). The adjustment for comparability
includes EUR 7.2 million of consulting revenue, related to the divestments of the
UK public sector consulting in December 2021, as well as the divestment of the
subsidiary in South Africa in February 2022.
In 2022, WithSecure started to report its revenues split into three categories.
Cloud revenue includes the Elements platform cloud-based products, Managed
Detection and Response (MDR) and Cloud Protection for Salesforce (CPSF)
revenue. On-premise revenue includes the Elements portfolio on-premise
product (Endpoint protection). Consulting revenue includes the cyber security
consulting services.
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Cloud revenue
Cloud-based security products’ comparable revenue grew by 33% to EUR
68.7 million (EUR 51.8 million). The adjustment of comparability includes
EUR 0.9 million of cloud revenue related to a product that was discontinued at
the end of 2021. The growth was driven by both new customer acquisition as
well as expansion of existing customers to new products, especially Endpoint
Detection and Response (EDR). Elements platform is also updated regularly
with new features, to provide a comprehensive selection of cyber security
products to the customers.
For cloud and on-premise products, WithSecure started reporting the Annual
Recurring Revenue (ARR) on a regular basis, to reflect the latest status of
recurring revenue sales. The ARR 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. In
2022, cloud ARR grew by 32% from previous year.
On-premise revenue
On-premise security products’ revenue declined by 10% to EUR 27.2 million
(EUR 30.0 million). This development is in line with our expectations when the
customers are moving their data processing to cloud environments.
Cyber security consulting
Cyber security consulting comparable revenue declined by 3% to EUR 38.8
million (EUR 40.0 million). Cyber security consulting industry has experienced
high demand, leading to a lack of qualified workforce and high attrition rates,
especially at the end of 2021 and first half of 2022. WithSecure has been
successful in improving recruitment and retention in the second half of 2022,
which was proven by a small year-on-year growth of the last quarter consulting
revenue. However, the sales performance for the full year will remain slightly
below previous year’s level.
Gross margin
WithSecure Gross margin for 2022 decreased to EUR 87.7 million (EUR 88.5
million) and was 65.1% (68.1%) of sales. Main reason for the decrease in gross
margin is the recruitment of new consultants, requiring an onboarding period
before becoming fully operative.
Operating expenses
Operating expenses, excluding items affecting comparability (IAC) as well as
depreciation and amortization, increased to EUR 116.4 million (EUR 107.6
million). The increase is driven by Sales and marketing expense that increased
by 16% from the previous year. This is mainly due to increased investments in
new product areas in the first half of the year, as well as sales and marketing
efforts including brand renewal related to company demerger. Research and
development expense remained at previous year level, while administration
expenses decreased by 20% from previous year.
Items affecting comparability (IAC) related to previous divestments were EUR
–2.8 million. In addition, EUR –1.8 million of IAC was incurred as part of the
demerger process.
Profitability
Estimated Comparable EBITDA (from Q3 2022 onwards same as Adjusted
EBITDA) was EUR –23.2 million for 2022. Profitability improved in the second
half of the year. Becoming profitable by the end of the year in line with the
medium-term financial targets is a key priority for WithSecure in 2023.
Cash flow
Cash flow from operating activities before financial items and taxes was EUR
–14.1 million (EUR 38.7 million). Cash flow for comparative period includes both
continuing and discontinued operations. Negative operative cash flow was
driven by operative result as well as significant demerger related costs.
Acquisitions and financial arrangements
WithSecure did not carry out acquisitions during 2022.
WithSecure raised new capital through a share issue on 23 March 2022 and
made an early repayment of a bank loan of EUR 19.0 million on 30 June. The
committed credit facility was also cancelled. At the end of the year WithSecure
did not have external financing. Until repayment, the Group complied with the
covenants of its financing agreement.
Changes in the group structure
In February 2022, WithSecure sold its shares of the South African subsidiary
F-Secure Cyber Security (PTY) Limited through a local management buy-out
(MBO).
In the demerger, shares in following subsidiaries were transferred to F-Secure:
DF-Data Oy (Finland), F-Secure Inc (United States), F-Secure (UK) Ltd (UK),
F-Secure eStore GmbH (Germany), F-Secure Pvt Ltd (India), F-Secure Iberia
SL (Spain) and F-Secure do Brasil Tecnol. da Informãcao Ltda (Brazil).
In preparation for the demerger, the Group carried out asset transfers in
various countries where Consumer security business was separated into
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newly established companies. Shares in these companies were transferred to
F-Secure in the demerger.
WithSecure’s subsidiary in Hong Kong, F-Secure Limited, was liquidated in
2022.
Capital structure
WithSecure strengthened its financial position by raising EUR 76.8 million
of new capital through a share issue on 23 March 2022. The Group’s liquid
assets of EUR 69.1 million consisted of cash and cash equivalents (EUR 55.1
million) and financial assets at amortized cost (EUR 14.0 million). Cash and
cash equivalents include bank deposits with maturity of less than three months.
Financial assets at amortized cost consist of corporate commercial papers with
maturity of less than three months.
Research and development
WithSecure’s research and development expenditure in 2022 was EUR 39.1
million (EUR 32.1 million), representing 29% (25%) of revenue. Capitalized
development expenses were EUR 2.4 million (EUR 5.6 million). WithSecure is
a cyber security technology company for which the ability to innovate is crucial.
WithSecure has consistently excelled in third party technology evaluations
for providing the best protection, advanced detection & effective response
capabilities and high customer satisfaction. During 2022, WithSecure achieved
top marks in the scoring for Protection and Usability in AV-TEST Institute’s
continuous evaluation of Elements portfolio. This is a strong statement to the
value of our solution that protects our customers effectively without sacrificing
its precision. In addition, the Elements portfolio was again put through the
MITRE Engenuity Enterprise evaluation, this time facing Sandworm and
WizardSpider. Elements showed its efficacy in revealing most of the threat
actors’ TTPs (Tactics, Techniques and Procedures) efficiently.
In the cyber security research front, WithSecure discovered and tracked a new
threat actor, codenamed DuckTails. In addition to contributing to the safety of
the digital world by exposing this threat actor, extra business was generated
in form of additional Incident Response engagements from companies that
were subject to the breach. WithSecure research contributed to the safety of
the COP27 summit in Egypt by analyzing the event’s mobile application. The
cyber security risks were published by the Politico newspaper on their website.
WithSecure also published a wide report on AI-powered cyber attackers
together with the Finnish Transport and Communications Agency Traficom.
Results of our research are regularly shared through the WithSecure™ Labs
website.
Building on the 2021 launch of WithSecure Elements, WithSecure continued its
efforts to unify the underlying technology architecture to allow rapid creation of
new capabilities. As an example, comprehensive protection for Microsoft 365
collaboration protection covering Teams, OneDrive, SharePoint and Exchange
was unveiled during the year. Unification of portfolio, beyond increased speed
of product, is also an enabler for WithSecure to introduce cross-product data
intelligence functionality for full situational awareness. In 2022 WithSecure
also introduced a unified API with first native connector to Azure Sentinel
platform. Another key focus area in R&D during 2022 was sustainability, and we
introduced several underlying technology innovations which resulted in much
more energy efficient use of cloud computing. We also implemented technology
for benchmarking energy efficiency of our agent software.
In order to support future-facing innovations, WithSecure also looked into
Safeguarding Machine Learning as Horizon 3 area of innovation.
Safeguarding Machine Learning is at its infancy. With the accelerating evolution
of Machine Learning and AI, organizations that rely on these models for their
business processes are better served if they can trust that these models and the
dataset that they have been trained against are untampered. For experiments
such as Safeguarding Machine Learning, WithSecure engages directly with
potential customers to co-create the solution based on their use cases.
Part of the development effort in 2022 was focused on demerging consumer
security into F-Secure. WithSecure continues to provide support on the
technical platform until F-Secure reaches full independence.
Non-financial information
In 2022, WithSecure re-assessed its ways of working on sustainability. A new
sustainability program was created to host the initiatives around environmental,
social and governance matters, and to ensure coherent and transparent
reporting on them.
WithSecure’s role of protecting the digital society and preventing damages
and losses caused by cybercrime is its most important contribution to a more
sustainable world. In addition to this important purpose, WithSecure wants
to ensure that its activities are carried out in the best possible way regarding
planet, people and society around us. It could mean sharing the knowledge
and supporting the parties who cannot always defend themselves. The carbon
footprint of a software and services company is not high, but every company
must do their part in minimizing the environmental impacts of their activities
and products. WithSecure employs highly skilled experts around the world
and wants to support their wellbeing and growth opportunities. The company’s
internal operations must always follow highest ethical standards.
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Leading guideline of W/Sustainability program will be Maximizing Net Impact
– on the planet, people, and society. The objective of the sustainability program
is to ensure that sustainability is embedded in all company decisions. Another
objective is to ensure full transparency of sustainability activities to users of
the company reports. WithSecure’s intention is to closely follow European
legislation on the sustainability reporting and to be well prepared for full
compliance.
Based on our analysis of the EU Taxonomy Regulation (2020/852), and related
guidance from the European Commission, WithSecure activities are not eligible
with the current taxonomy. New activities, however, with new environmental
targets in the future might be more relevant for WithSecure and trigger a need of
re-assessing both eligibility and alignment.
WithSecure has quantified its carbon footprint of 2022, in accordance with the
Greenhouse Gas (GHG) Protocol. The results will be used as a baseline to
define further reduction targets during 2023.
The results of taxonomy analysis, carbon footprint and other sustainability work
of WithSecure are described more in detail in the Sustainability Report 2022,
published as part of the annual reporting of 2022.
Organization and management
Personnel
At the end of 2022, WithSecure had 1,295 employees. The reduction of 361
employees from the previous year-end (1,656 employees) is mainly explained
by the demerger of 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.
Leadership team
On January 1, 2022, WithSecure (then F-Secure) changed its management
structure and combined its Managed Detection and Response unit and Cyber
Security Consulting unit under one Solutions unit, led by Tim Orchard as EVP,
Solutions. Consequently, Edward Parsons (EVP, Cyber Security Consulting)
ceased being a member of the Global Leadership Team.
On 30 June 2022, following the demerger of Consumer security business into
a separate company F-Secure, Timo Laaksonen became the CEO of F-Secure
and ceased being a member of the WithSecure Global Leadership Team.
In October 2022, WithSecure decided on a new operating model for the
company. As part of the new model, sales teams were combined into one
unified Customer Operations organization, led by Juha Kivikoski. Research
and development teams were combined into one unified product organization,
led by Antti Koskela. Chief Information Security Officer (CISO) became part
of the leadership team, former CTO Christine Bejerasco assumed the role of
CISO. Tim Orchard assumed the role of CTO. In addition, Cloud Protection for
Salesforce became an independent unit, reporting directly to the President &
CEO. All changes became applicable on 1 January 2023.
On 1 December 2022, Scott Reininga joined WithSecure as the new EVP,
Solutions.
At the end of the year, the composition of the Leadership Team was the
following:
Juhani Hintikka (President and CEO), Christine Bejerasco (CTO, became CISO
on 1 January 2023), Charlotte Guillou (Chief People Officer), Tom Jansson
(Chief Financial Officer), Juha Kivikoski (EVP, Business Security, became EVP,
Customer Operations on 1 January 2023), Antti Koskela (CPO), Tim Orchard
(EVP, Solutions until 30 November 2022, became CTO on 1 January 2023),
Scott Reininga (EVP, Solutions), Tiina Sarhimaa (CLO) and Ari Vänttinen
(CMO).
Shares, Shareholders’ equity, Own shares
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 financial year.
The company holds its own shares to be used in the incentive compensation
plans, for making acquisitions or implementing other arrangements related to
the company’s business, to improve the company’s financial structure or to be
otherwise assigned or cancelled.
In January–December, 67,096,454 (20,164,500) of WithSecure’s shares were
traded on the Helsinki Stock Exchange. The highest trading price was EUR 5.65
(5.53) and the lowest price was EUR 1.27 (3.66). The volume weighted average
price of WithSecure’s shares in 2022 was EUR 2.75 (4.39). The share’s closing
price on the last trading day of the year, 30 December 2022, was EUR 1.37
(4.97). Based on that closing price, the market value of the company’s shares,
excluding the treasury shares held by the company, was EUR 240 million (787
million). Large fluctuations are partly explained by the F-Secure demerger on 30
June 2022.
The company currently has share-based incentive plans covering management
and key personnel of the Group, as well as a share savings plan available to
all employees. Information on the programs is provided in the Note 18 of the
Financial Statements, as well as the Remuneration Report 2022. As part of the
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new Performance Matching Share Plan, WithSecure leadership team members
have made personal investments of over EUR 1.7 million to acquire company
shares.
Risks and uncertainties
WithSecure operations are subject to risks and uncertainties that can impact
the company’s sales, profitability, financial position, market share, reputation,
share price or the achievement of its short- and long-term objectives. The
matters described here should not be considered as an exhaustive list.
The objective of WithSecure risk management is to identify various risks
that could have an impact on the business, and to implement appropriate
measures to mitigate the risks. In assessing risks, WithSecure considers both
the likelihood and the potential impact of each risk, as well as the resources
required to manage and mitigate the risk. Ensuring business continuity in any
situations of risks materializing is an essential part of the risk management.
WithSecure risk management principles and process are described in the
Corporate Governance Statement of 2022.
Risks related to cyber security market
Market consolidation
The cyber security market is scattered to many providers of software and
services. Also, the large market participants are investing more in the
development of embedded security and winning market share. Further
consolidation to larger units is considered as a likely development. WithSecure
must succeed in finding the right acquisition targets, as well as in integrating
the acquired companies into its operations. As one of the smaller players in
the market, the company must always keep itself relevant to the customers, by
ensuring both up to date technology and good quality, timely services.
Geopolitical risks
WithSecure operates in different countries and is therefore exposed to the
country risks of each location. Local regulation is exposing the company to risks,
such as unfavorable tax matters or export controls. Changes in regulations or
their application, applicable to current or new technologies or services, may
adversely affect WithSecure’s business operations.
Ukraine war
The war in Ukraine has significantly increased the uncertainty in the world and
the risk of unexpected disruptions of the world economy and security stability.
Any such events would also impact the WithSecure business. The war has
increased the awareness of the importance of cyber security, especially for
companies, and it will continue impacting the corporate cyber security market.
For corporate responsibility reasons, WithSecure is not conducting business
with any Russian or Belarussian parties, even in cases where it would be
permitted by the export control regulations.
Environmental risks
As part of the sustainability materiality analysis, WithSecure has assessed
the impact of the environmental risks, especially climate change, on its
business. The company is a provider of software and services, and as such not
significantly impacted by the environmental risks. Business continuity planning
covers scenarios related to unavailability of resources due to natural disasters or
other hazards.
Risks related to WithSecure operations and products
Attracting and retaining talent
Unavailability of skilled personnel may result in inability of providing consulting
or other services to customers, which could have a direct impact on the
company revenue. Competition for skilled personnel is increasing and there
is structural undersupply of talent in the cyber security industry. WithSecure
is continuously developing and adopting new ways of recruitment, building its
own talent and knowledge pools, and investing in training and development of
personnel.
Product risks
WithSecure operates in a highly competitive market. Cybercrime is growing
fast and becoming more innovative and professional. Large vendors make
significant investments in their development and marketing activities, while new
vendors are emerging in the market, and the operating system manufacturers
are increasing their focus on built-in security features. WithSecure must
succeed in maintaining in-depth understanding of cyber security threat
landscape, following the hacker techniques and technologies, as well as
continuing to innovate in defensive technologies.
Cyber security incident
Cyber security attacks threaten the confidentiality, integrity, and availability
of WithSecure products and services and their mitigation is considered as
high priority in all parts of the company. WithSecure builds cyber resilience by
continuously improving its capability to identify, protect, detect, and respond to
relevant threats.
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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.
Financial risks
Inflation and interest rates
Rising inflation is increasing the risk for negative development of the cost
structure. This is monitored very closely, and inflation will also most likely require
mitigation actions to retain workforce in the company. Increasing interest rates
could limit the possibilities of external funding in the future.
Liquidity risk
After the demerger of cash-positive consumer business, WithSecure must focus
on accurate cash planning and prompt collections to ensure liquidity of all group
companies and to avoid needs of short-term financing.
Currency fluctuations
Increasing volume of operations outside the Euro zone in different currencies
exposes WithSecure to an increased risk related to currency fluctuations.
Annual General Meeting
Annual General Meeting (AGM) of WithSecure (then 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 for governing bodies. The members of the Board and the President and
CEO were discharged from liability.
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 the
company’s consumer security business.
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 WithSecure (then F-Secure) Corporation, was
elected as a new member of the Board of Directors. The Board elected Risto
Siilasmaa as the Chair of the Board. Tuomas Syrjänen was nominated as the
Chair of the Personnel Committee and Risto Siilasmaa and Päivi Rekonen as
members of the Personnel Committee. Pertti Ervi was nominated as the Chair
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 the
company. Mr. Janne Rajalahti, APA, acts as the Responsible Auditor.
The AGM authorized the Board of Directors to decide upon the repurchase of 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 by
issuing 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 the
Company’s registered number of shares. 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 also decided to change the company’s business name to WithSecure
Corporation.
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.
Extraordinary General Meeting
Extraordinary General Meeting (EGM) of WithSecure Corporation was held
on 31 May 2022. The EGM resolved, among other things, to approve the
demerger plan and the 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, to
authorize the Board of Directors of F-Secure to decide upon the repurchase
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of 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 the
conclusion of the first Annual General Meeting of F-Secure following the
effective 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 of a
maximum of 15,000,000 shares in total through a share issue as well as by
issuing 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, that
the 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.
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.
In addition, the EGM amended WithSecure’s Articles of Association.
Full disclosure of the EGM resolutions has been provided in the Stock
Exchange release of 31 May 2022.
Change in the Board committee after the AGM
On 1 August 2022, Kirsi Sormunen was nominated as Chair of the Audit
Committee, replacing Pertti Ervi in this role. Pertti Ervi, Keith Bannister and Tony
Smith remain as members of the Audit Committee.
Outlook for 2023
Annual recurring revenue (ARR) for cloud products will grow by 28–34% from
the end of 2022. At the end of 2022, cloud ARR was EUR 80.2 million.
Revenue from cloud products will grow by 28–34% from previous year. Previous
year revenue from cloud products was EUR 68.7 million.
Total revenue of the group will grow by 12–20% from previous year. Previous
year revenue was EUR 134.7 million.
Adjusted EBITDA will improve from previous year. Previous year’s Adjusted
EBITDA (Estimated comparable EBITDA for two first quarters) was EUR –23.2
million. Adjusted EBITDA of fourth quarter of 2023 will be positive.
Medium term financial targets (unchanged)
Medium term financial targets for WithSecure, announced on 17 February 2022:
Growth Target: To double revenue organically by the end of 2025 (from year
2021 comparable revenue of EUR 122.8 million)
Profitability Target: Adjusted EBITDA break-even by the end of 2023 and
adjusted EBITDA margin of some 20% by 2025
Board of Directors’ proposal for disposal of distributable funds
WithSecure’s dividend policy is to pay approximately half of its profits as
dividends. Subject to circumstances, the company may deviate from this
policy. On 31 December 2022, WithSecure Corporation’s distributable funds
totaled EUR 143.3 million of which net result for the financial year was EUR
–13.7 million. No material changes have taken place in the company’s financial
position after the balance sheet date.
WithSecure’s Board of Directors proposes that no dividend will be paid for 2022
due to the loss-making result of the year. Company will focus on funding its
growth and developing the business.
Net loss for the year is retained in the shareholders’ equity.
16
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Events after period-end
On 9 February 2023, WithSecure announced that it will start change
negotiations to improve its profitability and competitiveness. The negotiations
could result in the reduction of approximately 120 positions globally, of which
at most 34 are expected to be in Finland. Global personnel of WithSecure
is approximately 1,300. Through the planned changes, as well as other cost
saving measures, the company estimates it can reach annual cost savings of
approximately EUR 14 million. Negotiations are expected to be completed by
end of March 2023.
Helsinki, 8 February 2023
WithSecure Corporation
Board of Directors
Risto Siilasmaa, Chair
Pertti Ervi
Päivi Rekonen
Tuomas Syrjänen
Keith Bannister
Kirsi Sormunen
Tony Smith
President and CEO
Juhani Hintikka
17
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row 12 pt
Economic indicators
IFRS
2022
IFRS
2021
IFRS
2020
IFRS
2019
IFRS
2018
Revenue (MEUR)
1)
134.7 130.0 220.2 217.3 190.7
Revenue growth % 3.6% n/a 1.3% 14.0% 12.0%
EBIT (MEUR)
1)
–42.6 –30.1 19.7 7.2 4.5
% of revenue –31.6% –23.1% 8.9% 3.3% 2.4%
Result before taxes
1)
–44.2 –30.4 16.5 4.2 1.7
% of revenue –32.8% –23.4% 7.5% 2.0% 0.9%
ROE (%) –32.5% 14.3% 16.2% 4.7% 1.2%
ROI (%) –30.5% 15.6% 18.5% 4.5% 7.9%
Equity ratio (%) 79.0% 59.5% 52.5% 49.0% 42.7%
Investments (MEUR)
2)
4.8 6.6 14.3 12.8 99.8
% of revenue 3.6% 5.1% 6.5% 5.9% 52.3%
R&D costs (MEUR) 39.1 32.1 41.9 39.6 35.7
% of revenue 29.1% 24.7% 19.0% 18.2% 18.7%
Capitalized development (MEUR) 2.4 5.6 5.5 6.2 4.7
Gearing % –39.9% –25.8% –14.1% 20.8% 13.9%
Wages and salaries (MEUR)
1)
93.8 87.3 103.7 104.4 84.9
Personnel on average 1,438 1,678 1,691 1,701 1,364
Personnel on Dec 31 1,295 1,656 1,678 1,696 1,666
1)
For years 2022 and 2021, the figures have been restated to reflect continuing operations
only according to IFRS 5.
2)
From 2021 onwards, the figure is presented without investments to leased assets.
Key figures
WithSecure has applied new IFRS16 standard from January 1, 2019 onwards with modified approach and comparatives are not restated.
Key ratios
IFRS
2022
IFRS
2021
IFRS
2020
IFRS
2019
IFRS
2018
Earnings per share (EUR),
combined operations 2.51 0.07 0.08 0.02 0.01
Earnings per share (EUR),
continuing operations –0.22 –0.15
Earnings per share (EUR),
discontinued operations 2.74 0.22
Earnings per share (EUR), diluted,
combined operations 2.51 0.07 0.08 0.02 0.01
Earnings per share (EUR), diluted,
continuing operations –0.22 –0.15
Earnings per share (EUR), diluted,
discontinued operations 2.74 0.22
Shareholders’ equity per share 0.80 0.60 0.52 0.48 0.42
Dividend per share
3)
0.00 0.00 0.04 0.00 0.00
Dividend per earnings (%) 0.0% 0.0% 50.0% 0.0% 0.0%
Effective dividends (%) 0.0% 0.0% 1.0% 0.0% 0.0%
P/E ratio –6.2 62.0 47.1 142.7 431.4
Share price, lowest (EUR) 1.27 3.66 2.04 2.19 2.18
Share price, highest (EUR) 5.65 5.53 4.14 3.40 4.24
Share price, average (EUR) 2.75 4.39 3.10 2.68 3.03
Share price Dec 31 1.37 4.97 3.84 3.05 2.32
Market capitalization (MEUR) 239.6 786.4 606.7 483.5 367.6
Trading volume (millions) 67.1 20.2 22.8 26.5 33.7
Trading volume (%) 38.4% 12.7% 14.3% 16.7% 21.2%
3)
Board proposal
Adjusted number of shares
IFRS
2022
IFRS
2021
IFRS
2020
IFRS
2019
IFRS
2018
average during the period 171,295,721 158,354,073 158,082,324 157,719,368 157,224,137
average during the period, diluted 171,295,721 158,354,073 158,082,324 157,719,368 157,224,137
Dec 31 174,598,739 158,798,739 158,798,739 158,798,739 158,798,739
Dec 31, diluted 174,598,739 158,798,739 158,798,739 158,798,739 158,798,739
18
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Equity ratio, %
Total equity
× 100
Total assets – deferred revenue
ROI, %
Result before taxes + financial expenses
× 100
Total assets – non-interest bearing liabilities (average)
ROE, %
Result for the period
× 100
Total equity (average)
Gearing, %
Interest bearing liabilities – cash and cash equivalents and liquid financial assets
× 100
Total equity
Earnings per share, EUR
Profit attributable to equity holders of the company
Weighted average number of outstanding shares
Shareholders’ equity
per share, EUR
Equity attributable to equity holders of the company
Number
of outstanding shares at the end of period
P/E ratio
Closing price of the share, end of period
Earnings per share
Dividend per earnings, %
Dividend per share
× 100
Earnings per share
Effective dividends, %
Dividend per share
× 100
Closing price of the share, end of period
Operating expenses
Sales and marketing, research and development and administration costs
EBITDA
EBIT + depreciation, amortization and impairment
Calculation of key ratios
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EUR 1,000
Consolidated
2022
Restated
Consolidated
2021
Estimated comparable EBITDA –23.2 –11.3
Adjustments to adjusted EBITDA
Research and development –2.6 –4.4
Facilities held by WithSecure –0.9 –1.6
Adjusted EBITDA –26.7 –17.2
Adjustments to EBITDA
Divestments –1.5 0.5
Demerger –1.8
Income for costs under TSA 8.7
Costs of services under TSA –8.7
EBITDA –29.9 –16.7
Depreciation, amortization and impairment losses –12.6 –13.4
EBIT –42.6 –30.1
EUR 1,000
Consolidated
2022
Restated
Consolidated
2021
Adjusted EBIT –36.8 –26.8
Adjustments to EBIT
Divestments –1.5 0.5
Demerger –1.8
PPA amortization –2.5 –2.8
Impairment 0.0 –1.0
Income for costs under TSA 8.7
Costs of services under TSA –8.7
EBIT –42.6 –30.1
Operating
Expenses 2022
Costs under
TSA Demerger Divestments
Expenses for
adjusted EBIT Depreciation
PPA
amortization
Operating
Expenses
for Adjusted
EBITDA 2022
Sales and marketing –83.1 –83.1 4.0 –79.1
Research and development –39.1 5.4 –33.7 5.3 –28.4
Administration –20.3 3.3 1.8 2.8 –12.5 0.7 2.5 –9.2
Operating expenses –142.6 8.7 1.8 2.8 –129.3 10.1 2.5 –116.7
Operating
Expenses 2021
Expenses for
adjusted EBIT Depreciation Impairment
PPA
amortization
Operating
Expenses
for Adjusted
EBITDA 2021
Sales and marketing –73.3 –73.3 5.3 –68.0
Research and development –32.1 –32.1 3.6 –28.5
Administration –15.7 –15.7 0.8 1.0 2.8 –11.1
Operating expenses –121.0 –121.0 9.7 1.0 2.8 –107.6
Classification of adjusted income in other operating income
Other operating
income 2022
Income for costs
under TSA Divestments
Other income
for adjusted
EBITDA 2022
Other operating income 12.3 –8.7 –1.3 2.3
Other operating
income 2021 Divestments
Other income
for adjusted
EBITDA 2021
Other operating income 2.5 –0.5 1.9
Reconciliation of alternative performance measures
Classification of adjusted costs in operating expenses
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EUR 1,000
Consolidated
2022
Restated
Consolidated
2021
Estimated comparable EBITDA –23.2 –11.3

Research and development  
Facilities held by WithSecure  
Adjusted EBITDA –26.7 –17.2

  
 
 
Costs of services under TSA 
EBITDA –29.9 –16.7
  
EBIT –42.6 –30.1
EUR 1,000
Consolidated
2022
Restated
Consolidated
2021
Adjusted EBIT –36.8 –26.8

  
 
PPA amortization  
 0.0 
 
Costs of services under TSA 
EBIT –42.6 –30.1
Operating
Expenses 2022
Costs under
TSA Demerger Divestments
Expenses for
adjusted EBIT Depreciation
PPA
amortization
Operating
Expenses
for Adjusted
EBITDA 2022
Sales and marketing   4.0 
Research and development     
Administration      0.7  
Operating expenses –142.6 8.7 1.8 2.8 –129.3 10.1 2.5 –116.7
Operating
Expenses 2021
Expenses for
adjusted EBIT Depreciation Impairment
PPA
amortization
Operating
Expenses
for Adjusted
EBITDA 2021
Sales and marketing    
Research and development    
Administration    1.0  
Operating expenses –121.0 –121.0 9.7 1.0 2.8 –107.6
Classification of adjusted income in other operating income
Other operating
income 2022
Income for costs
under TSA Divestments
Other income
for adjusted
EBITDA 2022
    
Other operating
income 2021 Divestments
Other income
for adjusted
EBITDA 2021
   1.9
Reconciliation of alternative performance measures
Classification of adjusted costs in operating expenses
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
Shares
Number
of
shareholders
% of
shareholders Total shares % of shares
    
    
    
    
    
Total    
Shareholders by category, 31 Dec 2022 Total shares % of shares
Corporations  
Financial and insurance institutions  
General government  
Non-profit organizations  
Households  
  
Nominee registered  
Total  
Largest shareholders and administrative register
Owner Shares % of shares % of votes
Risto Siilasmaa   
Skandinaviska Enskilda Banken AB   
Nordea Nordic Small Cap Fund   
   
   
   
The State Pension Fund   
Citibank Europe Plc   
   
Nordea Finnish Stars Fund   
Euroclear Bank Sa/Nv   
Administrative register Shares % of shares % of votes
Skandinaviska Enskilda Banken AB   
Citibank Europe Plc   
Euroclear Bank Sa/Nv   
   
   
Total   
  
Total  
Shares and shareholders
Ownership of management
Board of Directors Shares % of shares
Risto Siilasmaa  
Pertti Ervi  
  
  
 12,272 
  
Tony Smith 1,002 
Total  
Global Leadership team Shares % of shares
Juhani Hintikka  
  
Scott Reininga  
Christine Bejerasco  
  
Charlotte Guillou  
Tom Jansson  
  
Tiina Sarhimaa  
  
Total  
Ownership of management
Members of the Board and Leadership team owned a


percent of votes.
21
WithSecure Annual Report 2022
WithSecure 2022
Board of Directors’ Report
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Financial Statements
/ Key gures
/ Calculation of key ratios
Statement of comprehensive income
January 1 – December 31, 2022
EUR 1,000 Note
Consolidated,
IFRS 2022
Restated
Consolidated,
IFRS 2021
REVENUE  134,700 130,015
Cost of revenue -46,972 -41,472
GROSS MARGIN 87,728 88,543
  12,325 2,466
Sales and marketing  -83,118 -73,299
Research and development  -39,143 -32,094
Administration  -20,344 -15,691
EBIT -42,552 -30,075
Financial income  1,149 1,198
Financial expenses  -2,768 -1,543
PROFIT (LOSS) BEFORE TAXES -44,171 -30,421
  5,961 4,950
Result for the financial year,
 -38,210 -25,472
Result for the financial year, discontinued
operations  468,526 38,157
RESULT FOR THE FINANCIAL YEAR,
GROUP TOTAL 430,316 12,686
Other comprehensive income
Exchange difference on translation of
foreign operations, continuing operations -1,066 3,915
Exchange difference on translation
of foreign operations, discontinued
operations -934 75
Comprehensive income for the year,
continuing operations -39,276 -21,557
Comprehensive income for the year,
discontinued operations 467,592 38,232
COMPREHENSIVE INCOME FOR THE
YEAR, GROUP 428,316 16,676
EUR 1,000 Note
Consolidated,
IFRS 2022
Restated
Consolidated,
IFRS 2021
Result of the financial year is attributable
to:
Equity holders of the parent,
continuingoperations -38,210 -25,472
Equity holders of the parent,
discontinuedoperations 468,526 38,157
Equity holders of the parent,
combinedoperations 430,316 12,686
Comprehensive income for the year is
attributable to:
Equity holders of the parent,
continuingoperations -39,276 -21,557
Equity holders of the parent,
discontinuedoperations 467,592 38,232
Equity holders of the parent,
combinedoperations 428,316 16,676
Earnings per share: 
Basic and diluted, continuing
operations -0.22 -0.15
Basic and diluted, discontinued
operations 2.74 0.22
Basic and diluted, combined operations 2.51 0.07

22
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
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Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
Statement of financial position
December 31, 2022
EUR 1,000 Note
Consolidated,
IFRS 2022
Consolidated,
IFRS 2021
ASSETS
NON-CURRENT ASSETS
Tangible assets  10,749 12,712
  23,519 33,034
Goodwill  82,998 85,143
  6,767 4,124

non-current  7,865

  1,271 1,860
Total non-current assets 133,169 136,874
CURRENT ASSETS
  51
  2,220
Accrued income  5,497 4,714
Trade and other receivables  34,875 49,856
  932 1,740
Financial assets at amortized cost  13,977
Financial assets at FVTPL  26 61
Cash and cash equivalents  55,129 52,940
Total current assets 112,658 109,361
TOTAL ASSETS 245,827 246,235
EUR 1,000 Note
Consolidated,
IFRS 2022
Consolidated,
IFRS 2021
SHAREHOLDERS’ EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY 
Share capital 80 1,551
Share premium 165
Treasury shares -155 -849
Translation differences -2,124 -124
Reserve for invested unrestricted
equity 83,638 6,789
Retained earnings 58,649 87,831
Equity attributable to equity holders of the parent 140,089 95,363
NON-CURRENT LIABILITIES
  8,369 17,577
  1,623 1,880
  22,470 26,335
Total non-current liabilities 32,462 45,792
CURRENT LIABILITIES
  4,839 10,824
Trade and other payables  19,868 29,990
  2,126 4,182
  46,446 60,084
Total current liabilities 73,279 105,080
TOTAL SHAREHOLDERS’ EQUITY AND
LIABILITIES 245,827 246,235
23
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
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Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
Statement of cash flows
January 1 – December 31, 2022
EUR 1,000
Consolidated,
IFRS 2022
Consolidated,
IFRS 2021
Cash flow from operations
Result for the financial year 430,316 12,703
Adjustments
 13,025 15,066
Non-cash adjustments related to demerger -451,431
Loss from divestments 2,755
Change in fair value of deferred consideration
from divestments -1,084
Profit / loss on sale of fixed assets -52 142
Financial income and expenses 1,418 278
 144 4,726
 1,933 2,504
Cash flow from operations before change in
working capital -2,977 35,420
Change in net working capital
 -8,944 -4,138
 6 23

 -2,233 7,371
Cash flow from operations before financial items
and taxes -14,148 38,675
 -225 -451
 233 11
 -2,474 -843
 -3,630 -6,652
Cash flow from operations -20,244 30,741
EUR 1,000
Consolidated,
IFRS 2022
Consolidated,
IFRS 2021
Cash flow from investments
 -4,770 -6,569
Proceeds from sale of intangible and tangible
assets 0 433
 -734

1)
-13,979
Cash flow from investments -19,483 -6,135
Cash flow from financing activities
 75,988
Repayments of interest-bearing liabilities -19,000 -11,000
Repayments of lease liabilities -5,989 -5,963
 -6,334
Cash flow from financing activities 50,999 -23,298
Change in cash 11,273 1,309
Cash and bank at the beginning of the period 52,940 51,380
Effects of exchange rate changes -129 252

2)
-8,955
Cash and bank at period end
1)
55,129 52,940

1)


money market instruments with maturity less than three months are presented as Cash
and cash equivalents.
2)
Cash held by parent company at completion of the demerger was divided between




24
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
Statement of changes in equity
Attributable to the equity holders of the parent
EUR 1,000 IFRS Share capital
Share
premium fund
Treasury
shares
Translation
differences
Unrestricted
equity reserve
Retained
earnings Total equity
 1,551 165 -1,288 -4,116 6,464 79,554 82,330
Result of the financial year 12,703 12,703
Translation difference 3,992 3,992
Total comprehensive income for the year 3,992 12,703 16,695
 -6,334 -6,334
Cost of share based payments 439 325 1,913 2,678
 1,551 165 -849 -124 6,789 87,831 95,363
Result of the financial year, continuing operations -38,210 -38,210
Result of the financial year, discontinued operations 468,526 468,526
Translation difference -2,000 -2,000
Total comprehensive income for the year -2,000 430,316 428,316
Share issue 75,988 75,988
 20 20
Reduction of share capital and share premium reserve -1,471 -165 1,636
Cost of share based payments 694 861 1,854 3,410
Assets transferred in the demerger at fair value -463,020 -463,020
 80 -155 -2,124 83,638 58,649 140,089

25
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
ACCOUNTING PRINCIPLES FOR THE
CONSOLIDATED FINANCIAL STATEMENTS
Basic information
WithSecure provides cyber security products and services globally for
businesses.
The parent company of the Group is WithSecure Corporation incorporated




downloaded on www.withsecure.com or can be received from the parent



General Meeting can confirm or reject the consolidated financial statements
after publication. The Annual General Meeting can also decide to change the
financial statements.
Accounting principles
The consolidated financial statements of WithSecure Corporation of 2022







primary statements of the consolidated financial statements have been labelled
with XBRL tags, and the notes to the financial statements with XBRL block tags.
XBRL tags are not audited.
Principles of consolidation
The consolidated financial statements incorporate the financial statements of
WithSecure Corporation and entities controlled by WithSecure Corporation.
Consolidation is done using the acquisition method and begins when control
over the subsidiary is obtained. The consolidation stops when the control
ceases. The Group does not have any associated companies nor is there any
non-controlling interest in the Group.
All intra-group transactions and balances, including unrealized profits arising
from intra-group transactions, have been eliminated on consolidation. Where
necessary, accounting policies of the subsidiaries have been adjusted to ensure
consistency with the policies adopted by the Group.
Discontinued operations
WithSecure completed the separation of its Consumer security business into

2022, according to the plan first announced on 17 February 2022 by the Board




for the demerger in financial reporting. Result from discontinued operations

the consolidated income statement. Comparative periods have been restated

liabilities related to the discontinued operations were distributed to F-Secure.
Balance sheet before demerger has not been restated.


distribution gain was calculated based on the difference of the fair value of
consumer security business and the book value of the distributed assets and
liabilities in consolidated statement of financial position. The distribution gain


by multiplying the average share price of F-Secure on the first trading day,



second quarter.

operations. According to the demerger plan, WithSecure recharged majority of
the demerger related costs from F-Secure. The recharge was recognized on the
demerger date and reduced the total amount of demerger costs in discontinued
Notes to the Financial Statements
26
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report

EUR 1.4 million related to discontinued operations was recognized as income at
completion of the demerger in second quarter.


of financial position and cash flow. Statement of financial position represents
assets and liabilities related to Consumer security business right before the

revenue and operating expenses which directly derived from Consumer
security business and discontinued for continuing business after the demerger.
Certain costs related to supporting F-Secure during transition period and
costs of premises sub-leased to F-Secure after demerger are not included in

Transactions in foreign currency
The consolidated financial statements are presented in euros, which is

purpose of presenting consolidated financial statements the income statements
of foreign Group companies are translated at the average exchange rates for
the reporting period and the balance sheets are translated using the European


comprehensive income.
Foreign currency transactions are translated using the exchange rates

liabilities denominated in foreign currencies are translated using the European

losses are recognized in financial items in the income statement.
New and amended IFRS Standards that are effective for 2022

COVID-19 impacts on financial reporting during 2022


financial reporting are very limited in 2022.
Management judgment on significant accounting
principles and use of estimates
The preparation of consolidated financial statements requires the use of
estimates and assumptions as well as the use of judgment when applying
accounting principles. These affect the contents of the financial statements, and
it is possible that actual results may differ from estimates.
Estimates made in connection with the preparation of financial statements are

upon past experience as well as assumptions of the future development of the
economic environment of the Group. Revisions in estimates and assumptions
are recognized in the period they occur and in future periods if the revision
affects both current and future periods.

•
Impairment testing: Recoverable amount of goodwill from acquisitions is
based on estimated future cash flows which are subject to management


amount of these assets is based on estimated future cash flows from sales
and/or use of the asset.
•
Deferred considerations from divestments: 

sales price of the South African subsidiary divested in February 2022 include
deferred considerations which are measured at discounted fair value on
each reporting date. Management judgment is used to forecast the future
performances of the divested businesses which are the basis for determining
the deferred consideration.
•
Deferred tax assets from tax losses: The Group has recognized deferred
tax assets from tax losses. The amount of deferred tax assets is based
on management estimation about future profits and the recoverability
of these tax losses. Majority of the deferred tax assets is booked from


•
Expected credit losses:

the expected credit losses taking into account also the potential impacts of

•
Share-based payments:
are mainly tied to market-based conditions. Management uses external
valuations in determining the fair value of the shares granted under these
incentive programs. The method for the valuation is Monte Carlo Simulation.
•
After demerger, existing share-based incentive programs were converted

27
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
share-based payments under the existing programs were converted into new


determine the fair value of the plans after the modification. Management has
used external valuations in determining the fair value. The method for the
valuations is Monte Carlo Simulation.
Revenue recognition
Revenue for continuing operations is derived from corporate business.
Corporate security business revenue includes cyber security products,

started to classify revenue in three categories: Cloud-based security products,





consulting services.

security products are sold by granting the customer access to use the
intellectual property during the license period. WithSecure delivers the product
and provides continuous automated updates against new threats. The software
and the accompanied services are highly interdependent and therefore treated
as one performance obligation for which revenue is recognized over time on a
straight-line basis for the license period. Cyber security consulting services are
recognized as revenue based on the delivery of the work.
Until demerger, consumer security business revenue came through operator
and direct consumer channels, and the main products included F-Secure


a Service and revenue was recognized over time on a straight-line basis for
the contract period. When there was a hardware component to the solution

obligation and revenue for hardware was recognized separately at point in
time of delivery. Revenue from Consumer security business is presented as
discontinued operations.
Presentation of receivables and liabilities from contracts with customers
Receivables from contracts with customers are presented in the balance sheet
as Accrued income. Liabilities from contracts with customers are presented
in the balance sheet as Deferred revenue and included in Total non-current
liabilities or Total current liabilities depending on the duration of the liability.
Pensions

plans in accordance with local statutory requirements. Contributions to defined
contribution plans are recognized in the income statement in the period to which
the contributions relate.
Leases
Group as lessee

as right-of-use asset with corresponding lease liability. Right-of-use assets and
lease liabilities are initially valued at the present value of the remaining lease



and guarantees.


low value assets are excluded from leases and lease expense is recognized on



lease contract is negotiated individually, and the contracts may contain wide

leased with on-going contracts where the ending date is not defined. The
management assesses the probable duration for these contracts case-by-case
and the lease liability is calculated accordingly. Changes to the estimates are
accounted for at each reporting date. Estimated duration for on-going contracts




do not contain residual value guarantees or purchase options.
Group as lessor
After the demerger, Group acts as a lessor in sub-lease agreements signed with
F-Secure. The sub-lease arrangements have been accounted for as finance

28
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
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Corporate Governance
Sustainability Report
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/ Statement of nancial
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/ Statement of cash ows
/ Statement of
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/ Notes to the
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/ WithSecure Corporation
nancial statements
/ Auditor’s Report
assets related to the sub-lease arrangements and recognized a receivable for
the net investment in the lease. Net investment in the lease is calculated as the
net present value of the future payments under the sub-lease. The Group does
not have operating lease arrangements.
Income taxes
The income tax expense in income statement represents the sum of current
taxes and deferred taxes. Current taxes are calculated on the taxable income

resulting from temporary differences between the financial statement and the
income tax basis of assets and liabilities, use the enacted tax rates in effect in

are recognized to the extent that it is probable that future taxable profit will be


right to set off current tax assets against current tax liabilities and when they
relate to the same taxation authority and the Group intends to settle the assets
and liabilities on a net basis.
Business combinations
Acquisition method is used for accounting the acquisitions of businesses.
The consideration transferred in a business combination is measured at fair
value, which is calculated as the sum of the acquisition-date fair values of
assets transferred by the Group and liabilities incurred by the Group to the
former owners of the acquiree. Contingent considerations related to business
combinations are measured at fair value at acquisition date and included as part
of the consideration transferred. Costs related to the acquisition are recognized
in profit and loss statement.
The identifiable assets acquired, and the liabilities assumed are recognized at
fair value at the acquisition date except for deferred tax assets or liabilities which

as the excess of the transferred consideration over the net amount of the
acquired identifiable assets and assumed liabilities.
Changes in fair value of the contingent consideration that do not arise within
one year from the acquisition from facts and circumstances that existed at the
acquisition date are recognized in profit or loss.
Goodwill
Goodwill is initially recognized and measured in business combinations as
set out above. Goodwill is not amortized but is instead tested for impairment
at least annually and whenever there is an indication that it may be impaired.
For the purpose of impairment testing goodwill has been allocated to cash

the recoverable amount of the cash generating unit is less than the carrying
amount of the unit, the impairment loss is allocated first to reduce the carrying
amount of any goodwill allocated to the unit and then to the other assets of the

subsequent periods. Goodwill is recorded at historical cost less accumulated
impairment losses.
Intangible assets
Research and development expenditure
Research expenditure is recognized as an expense at the time it is incurred.

new features are recognized as intangible assets when they fulfill the


Intangible assets acquired in business combinations

from goodwill are initially recognized at fair value on the acquisition date.
Subsequent to initial recognition these assets are reported at initial value less
accumulated amortization and accumulated impairment losses.


valuation for technology and trademarks is done based on Relief from royalty
method and for customer relationships based on Excess earnings method. The
estimated useful lives for intangible assets acquired in business combinations
are:
Technology 10 years
Trademark 2 years
 
Other intangible assets


accumulated amortization and possible impairment. Amortization is recorded
on a straight-line basis over the estimated useful life of an asset. The estimated
useful lives of other intangible assets are as follows:
 
 
29
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
Tangible assets
Tangible assets are recorded at historical cost less accumulated depreciation

over the estimated useful life of an asset. The estimated useful lives of tangible
assets are as follows:
 
 

Gains or losses on disposal of tangible assets are shown in other operating
income or expense.
Impairment of assets
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. The recoverable amount of
goodwill and intangible assets that are not ready for use are estimated annually
for regardless of whether any indication of impairment exists.
Where the carrying amount of an asset exceeds its recoverable amount
the asset is considered impaired and the carrying amount is reduced to its
recoverable amount. The recoverable amount is the fair value of an asset less
costs of disposal or value in use, whichever is higher. An impairment loss is
recorded in the income statement.
A previously recognized impairment loss is reversed only if there has been a

since the last impairment loss was recognized. The maximum reversal of an
impairment loss amounts to no more than the carrying amount of the asset if no

relating to goodwill cannot be reversed in future periods.
Inventories
After the demerger, the Group does not have inventories.
Financial instruments
Financial assets
Financial assets are originally valued at fair value. Trade receivables are
originally valued with transaction price and later with amortized cost reduced
by expected credit loss for trade receivable. Trade receivables and other
receivables are written off from the balance sheet as the rights to associated
cash flows end or become transferred to the counterpart. An expected credit

of expected credit loss is updated at each reporting date to reflect changes
in credit risk since initial recognition of the respective financial instrument.
The expected credit loss is estimated using a provision matrix where trade
receivables are grouped based on historical credit loss experience and


Financial liabilities
WithSecure classifies loans from financial institutions, trade payables and other
payables as other financial liabilities which are measured at amortized cost.
Transaction costs, such as arrangement fees, are deferred over the maturity of

institutions. Contingent considerations arising from acquisitions are classified
as financial liabilities measured at fair value and changes in fair value are
accounted through profit and loss. Contingent considerations are measured at
fair value at the end of each reporting period. Financial liabilities are classified as
current unless WithSecure has unconditional right to postpone their repayment
by at least 12 months from the end date of the reporting period.
Derivative financial instruments and hedging
The Group uses derivative financial instruments such as forward currency
contracts to hedge its risks associated with foreign currency fluctuations.

is calculated based on current forward exchange rates at the reporting date for
contracts with similar maturity profiles. The gains and losses arising from the
change of fair value are booked through the income statement as the Group
does apply hedge accounting.
Provisions


and a reliable estimate of the amount of the obligation can be made. The
amount recognized is a best estimate of the consideration required to settle the
obligation at each reporting date. Risks and uncertainties are taken into account
when making the estimate.
Treasury shares

price of the shares has been deducted from equity.
30
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
Share-based payment transactions
WithSecure provides incentives to employees in the form of equity-settled
share-based instruments. Currently the Company has share-based programs.

personnel. The programs are equity-settled and valued at fair value at grant
date. The expense is recognized evenly in the income statement over the
vesting period with the counter-entry in retained earnings.
All current programs are based on market-based conditions, and the fair value
is determined by utilizing commonly used valuation techniques. The cumulative


person leaves the company before vesting, the reward is forfeited. The Group
updates its estimate of the ultimate number of shares at each reporting date.
These changes in the estimate are recorded in the income statement.
Presentation of expenses
Classification of the functionally presented expenses has been made by
presenting direct expenses in their respective functions and by allocating other
expenses to operations on the basis of average headcount in each function.
Operating result



operating income less cost of revenue, sales and marketing, research and
development, and administration.
New standards and interpretations not yet effective
New or amended standards or interpretations are not expected to have an
impact on the consolidated financial statements.
31
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
1. Segment information
The Group has one segment, data security. Segment reporting is consistent
with the internal reporting submitted to the chief operating decision-maker.
The Leadership Team has been appointed the chief operating decision-maker,
responsible for allocating resources and assessing performance as well as
making strategic decisions. For the geographical information revenue is
presented based on the location of the customer and the long-term assets
based on the location of the assets. The Consumer security business,

classified as discontinued operations and thus, excluded from the segment
reporting for 2022. Comparative information for assets is presented on a

Geographical information
Geographical information about revenue is presented in note 2.
EUR 1,000
Consolidated
2022
Consolidated
2021
Long-term assets
Nordic countries  
Europe excl. Nordics  
North America  
Rest of world  
Total  
Geographical information
Revenue from external customers
Nordic countries  40,272
Europe excl. Nordics  
North America  
Rest of world  
Total  
Assets and liabilities from contracts with customers
Satisfied performance obligations from contracts with customers that have not
yet been invoiced on the reporting date are presented in the balance sheet as
Accrued income included in trade and other receivables. The balances relate to
products and services which have been delivered to customers and recognized
as revenue but not invoiced. Liabilities from contracts with customers are
presented in the balance sheet as Deferred revenue and included in Total
non-current liabilities or Total current liabilities depending on the duration of
the liability. Prior year current deferred revenue is recognized as revenue in
the current period. Remaining performance obligations from contracts with
customers represent contracted revenue that has not yet been recognized.
These balances are presented as Deferred revenue and relate to obligations to
provide software subscription services or managed services in contracts with a
duration of multiple years.
EUR 1,000
Consolidated
2022
Consolidated
2021
Accrued income  4,714
  
  



operations.
2. Revenue
Principles of revenue recognition are stated in accounting principles to
consolidated financial statements, section Revenue recognition

Consumer security business is treated as discontinued operations. For contract
assets and liabilities, comparative information is presented on a historical basis

Disaggregation of revenue
EUR 1,000
Consolidated
2022
Restated
Consolidated
2021
Sales channels
Revenue from external customers
Cloud-based security products  
  
Cyber security consulting  47,242
Total  
32
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
3. Other operating income
EUR 1,000
Consolidated
2022
Restated
Consolidated
2021
Service fees charged from F-Secure under TSA 
Capital gains from sales of operations 1,272 
Government grants  
Gain from sublease arrangements 
  491
Total  
Capital gains from sales of operations includes revision of fair value of deferred

2021. Government grants are recognized as income over those periods in which
the corresponding expenses arise.


4. Leases
EUR 1,000
Consolidated
2022
Restated
Consolidated
2021
  
  
  
  219
  
Profit / Loss for the period  
Short-term leases booked as rent expense  
Right of use assets and liabilities

Right of use assets
Buildings  
Cars  1,111
Total  9,241
Lease liabilities
Buildings  
Cars  1,122
Total  9,401
Repayments of lease liabilities  

assets.


Financial income and expenses.

Lease related income statement effect is presented for continuing operations

discontinued operations. For right of use assets and lease liabilities,
comparative information is presented on a historical basis for combined

Some office premises were subleased to F-Secure on the demerger date.


continuing operations.
33
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
5. Depreciation, amortization, and impairment
EUR 1,000
Consolidated
2022
Restated
Consolidated
2021

  
Capitalized development  
  
Machinery and equipment  
Right of use assets  
  
Tangible assets  

Capitalized development 
Total impairment 
Total depreciation and amortization  

Sales and marketing  
Research and development  
Administration  
Total depreciation and amortization  



operations.
6. Personnel expenses
EUR 1,000
Consolidated
2022
Restated
Consolidated
2021
Personnel expenses
Wages and salaries  
  
Share-based payments  
  
Total  
Employee benefits of the management are stated in disclosure 24. Related
party transactions.

transactions.
Average number of personnel  

Consulting and delivery  
Sales and marketing  
Research and development  
Administration  
Total  


34
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
7. Audit fees
EUR 1,000
Consolidated
2022
Consolidated
2021
Gr
oup auditor
Audit fees, PricewaterhouseCoopers  
  
Total  


services provided during demerger process.

Audit fees  
Total  




8. Financial income and expenses
EUR 1,000
Consolidated
2022
Restated
Consolidated
2021
Financial income
  4
Exchange gains  
 7
Total 1,149 1,197
Financial expenses
  
  
Exchange losses  
  
Total  
Financial income and expenses are presented for continuing operations only

operations.
35
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
10. Earnings per share
Basic earnings per share amounts are calculated by dividing net profit for
the year attributable to ordinary equity holders of the parent by the weighted

earnings per share amounts are calculated by dividing the net profit attributable
to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year adjusted for the effects of dilutive options.
EUR 1,000
Consolidated
2022
Consolidated
2021
Net profit attributable to equity holders of the

Continuing operations  
  
Combined operations  
  
Adjusted weighted average number of ordinary
  

continuing operations  

discontinued operations 2.74 0.22

combined operations  0.07
Earnings per share has been recalculated for comparative period using average
weighted share amount after share issue in first quarter of 2022.
The weighted average number of shares takes into account the effect of change
in treasury shares.
9. Income tax
EUR 1,000
Consolidated
2022
Restated
Consolidated
2021
Current income tax for the year  
Adjustments for current tax of prior periods  
Change in deferred tax  
Total  
A reconciliation of income tax expense in the income statement and income tax

Result before taxes  
  
Effect of overseas tax rates 97 
Non-deductible expenses/tax-exempt revenue  
Unrecognised tax losses  
Adjustments for prior period tax  
  
Total  
36
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
11. Discontinued operations



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

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 and costs of premises which will

Income statement for discontinued operations
EUR 1,000
Consolidated
2022
Consolidated
2021
Revenue  
Cost of revenue  
Gross margin 50,468 97,172
  
Sales and marketing  
Research and development  
Administration  
EBIT 18,774 47,840
Financial net 201 
Result before taxes 18,975 47,908
  
Profit after taxes of the operations transferred to
F-Secure 13,574
Fair value gain recognised from valuation of
 
 
Taxes related to demerger expenses 
Translation difference 
Result for the period  
Statement of financial position for discontinued operations
EUR 1,000
Consolidated
30 June 2022
Assets
Tangible assets 900
 
 102
 
Total non-current assets 7,332
 44
Accrued income 2,090
Trade and other receivables 
Cash and bank accounts 
Total non-current assets 33,882
Total assets 41,214
EUR 1,000
Consolidated
30 June 2022
Liabilities
 
 
 
Total non-current liabilities 3,699
Current interest bearing liabilities 
Trade and other payables 4,912
 
 
Total current liabilities 23,148
Total liabilities 26,847
Cash flows for discontinued operations
EUR 1,000
Consolidated
2022
Consolidated
2021
Net cash flow from operating activities  40,200
Net cash flow from investing activities  
Net cash flow from financing activities 0 
37
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
12. Goodwill


CGUs:
EUR 1,000
Consolidated
2022
Consolidated
2021
Consulting  
  
 
Goodwill is tested for impairment annually, or more frequently if there are
indications that goodwill might be impaired. The recoverable amount for each
CGU is determined based on a value in use calculation which uses cash flows
for the period determined for the CGU. Cash flows are based on financial




annum growth rate for both CGUs. Markets where CGUs operate are expected
to grow significantly faster than the terminal growth rate used in impairment


Sensitivity analysis
The Group has prepared a sensitivity analysis of the impairment tests to
changes in the key assumptions which are revenue, profitability and discount
rate. The table below shows the required change in a single assumption that the
recoverable amount would fall below the carrying amounts.
EUR 1,000 2022 2021
Variable
Revenue growth during forecast period
Consulting  
  

period
Consulting  
  

Consulting  
  
Sensitivity analyses assume a change in only one key variable while all other

sensitivity is tested by assuming a similar change in the tested assumption

in the cash flows would occur as the management has means to react in case
there is a change to the expected business performance.

in forecasted profitability and increase in WACC due to economic uncertainty.
Management considers the headroom for Consulting goodwill to be adequate
despite the increased sensitivity during the financial year.

reasonably possible change in any of the key variables would lead to the
recoverable amount to fall below the carrying amount.
COVID-19 impacts on goodwill

potential impairment of goodwill through frequent forecasting processes.

management does not consider the pandemic to have significant impact on the
valuation of goodwill. Forecasting processes implemented during the pandemic
will be continued, and additional impairment testings will be carried out as usual
if indications of impairment arise.
38
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
13. Non-current assets
INTANGIBLE ASSETS TANGIBLE ASSETS
EUR 1,000
Other
intangible
Capitalized
development Goodwill
Advance
payments &
incomplete
development Total
Machinery &
equipment
Right of
use assets
Other
tangible Total
Acquisition cost Jan 1, 2021    7,499     41,407
Translation difference  1,214  0    111 
Additions       
Transfers 9,941 
       
         
Translation difference        
Additions      
Transfers     7 7
Acquisitions and divestments      

1)
      
      
    1,441    2,971 
Acc. depreciation Jan 1, 2021       
Translation difference       
Transfers 10 10
       
       
       
Translation difference 124    274  
Transfers
Acquisitions and divestments      1,270

1)
  10  
       
   724   
       
         
    1,441     

1)

39
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
14. Inventories
EUR 1,000
Consolidated
2022
Consolidated
2021
 

Financial assets at FVTPL
EUR 1,000
Consolidated
2022
Consolidated
2021
Fair value as at Jan 1  
 
  
  
Funds 
  
15. Financial assets
EUR 1,000
Consolidated
2022
Consolidated
2021
Cash and cash equivalents  
 
Trade receivables  
Loan receivables 40 
Financial assets at amortized cost 
Financial assets at FVTPL  
Total  


the balance for Cash and cash equivalents, and their fair value is equivalent to their
carrying value.

F-Secure and receivables related to asset transfers in Group subsidiaries in relation to
demerger.
Trade receivables
Aging of trade receivables
Not fallen due  
  
  
Less provision for expected credit losses  
Total  
Movements in the provision for expected credit losses
Book value as at Jan 1  
Change for the year  
Receivables written off during the year  
  


16. Other receivables
EUR 1,000
Consolidated
2022
Consolidated
2021
Non-current receivables
 1,271 
Total 1,271 
Current receivables
 217 
Prepaid expenses  10,197
Accrued income  4,714
Accrued income tax  
Total  
Material items included in prepaid expenses
Prepaid royalty 2,072 2,991
Grant receivables  
  
Total  10,197
40
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
17. Shareholders’ Equity
Issued and fully paid
EUR 1,000 Number of shares Share capital Share premium fundUnrestricted equity reserve Treasury shares
     
Share based payments   
     
Share issue  
  
Share based payments   
    


subscription rights. Based on resolution of the Extraordinary General Meeting,


the demerger at fair value was recognized after resolution of the Extraordinary



end of 2022. A share has no nominal value.
Share premium fund
Based on resolution of the Extraordinary General Meeting, WithSecure
Corporation dissolved the share premium fund in relation to the demerger.
Unrestricted equity reserve



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


equity reserve according to the resolution of the Extraordinary General Meeting.
Translation differences
The translation difference is used to record exchange difference arising from the
translation of the financial statements of foreign subsidiaries.
Dividends proposed and paid
Proposed for approval at AGM for financial year 2022 is that no dividend will be
paid.
For financial year 2021 company decided to not pay any dividend.
Final dividend for financial year 2020 was 0.04 euro per share, paid during 2021

Treasury shares
Treasury shares contains the purchase value of own shares owned by the





for incentive programs and for deferred payment of the 2017 acquisition.


41
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
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/ Auditor’s Report
18. Share-based payment transactions

management and the key personnel of the Group and a share savings plan
available to all employees as described below. The programs have been
established as part of incentive and retention system within WithSecure. The
programs offer the participants a possibility to receive WithSecure shares
as an incentive reward if the financial targets set for the earning period have
been achieved. No reward can be given to a participating employee whose
employment has terminated before the end of the lock-up period.
Share-based incentive program 2020–2022








settled. The original maximum total of shares to be given as reward were as








the metrics, targets and participants on annual basis for each earning period.

into new WithSecure shares by updating total amount of shares to be granted
and the performance criteria. The Board has approved the new metrics, targets


value of the new reward was calculated to modification date August 12, 2022.

earning period. The converted maximum total of shares to be given as reward





expense from forfeiture of F-Secure participants.
Restricted share plan

duration is five years. The restricted share plan complements the incentive



June 2022 and September 2022. The original maximum total shares to be given




conditional on the participant remaining in service of WithSecure. The Board
has approved the participants for each earning period.
After the demerger, Restricted share plan was converted into new WithSecure
shares by updating total amount of shares to be granted. The Board has


reward and the fair value of the new reward was calculated to modification date

for the remaining earning period. The converted maximum total shares to be


The expenses arising from the Restricted share plan in financial statements for

F-Secure participants.
Performance Matching Share Plan
Performance Matching Share Plan was established in September 2022.
The program consists of one 4-year performance period which started on

were given an opportunity to invest in WithSecure shares and earn WithSecure
shares through a matching reward. The Board has approved participations in




continues without termination at the time of the payment.
42
WithSecure Annual Report 2022
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/ Auditor’s Report



reward and the fair value of the new reward was calculated to the modification
date September 9, 2022. Expense from the original reward is booked as cost for
the original earning period and the incremental expense from the modification is
booked as cost for the performance period of the new reward.
The expenses arising from the Performance Matching Share Plan in financial

Employee Share Savings Plan
Employee share savings plan was established in August 2022. The plan
consists of a 12-month savings period that is followed by a 2-year restriction

shares through monthly savings and earn WithSecure shares through a
matching reward. After the restriction period, the participants will receive one
guaranteed matching share for every two shares saved within the plan given
that their employment continues without termination at the time of the reward
payment.
The expenses arising from the Employee Share Savings Plan in financial
statements for 2022 are EUR 2 thousand.
Impacts of share-based payment transactions on financial statements
EUR 1,000
Consolidated
2022
Consolidated
2021
Booked as expense during the period  
Booked in retained earnings during the period  
Balance sheet liability at the end of the period 
19. Interest-bearing liabilities
Interest-bearing liabilities
EUR 1,000
Consolidated
2021
Consolidated
2020
Unsecured liabilities at amortized cost
Bank loans 19,000
 
Lease liabilities  9,401
Total  
Total interest-bearing liabilities 13,208 28,401
Amount due for settlement within 12 months  
Amount due for settlement after 12 months  
Borrowings by currency EUR EUR
Bank loans 19,000
19,000

bank loan. The committed revolving credit facility was also cancelled.
The bank loans carried variable interest rates. The weighted average interest
rates paid during the year were as follows:
Bank loans  
43
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
Other financial liabilities
Contractual maturities of financial liabilities
Less than
1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years
Total
contractual
cash flows
Carrying
amount
Lease liabilities    204   
   
Total financial liabilities    204   


20. Financial assets and liabilities
Classes and categories of financial assets and liabilities and their fair values

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 to trading in active and liquid markets. The fair values of financial instruments can be determined
based on quoted market prices and deduced valuation.
Level 3: Measurement of financial instruments is not based on verifiable market information, and information on other circumstances affecting
the value of the instruments is not available or verifiable.
Carrying value Fair value
Financial assets
Financial
liabilities Hierarchy level
EUR 1,000 Note FVTPL
Amortized
cost
Amortized
cost Total 1 2 3 Total
Cash and cash equivalents (15)  
Financial assets at amortized cost (15)    
Financial assets at FVTPL (15)    
 (15)  
Trade receivables (15)  
 (19)    
Trade and other payables (22) 4,409 4,409
General
The goal of risk management is to identify risks that may hinder the Group from achieving its business objectives. The responsibility for the


cost are also subject to market risk.
44
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
Credit risk
The Group trades only with recognized, creditworthy third parties. Receivable
balances are monitored and collected on an ongoing basis. The maximum
exposure to credit risk at the reporting date is the carrying value of trade
receivables. There are no significant concentrations of credit risk within the

Liquidity risk

available additional financing are not sufficient to cover commitments falling

management of cash and liquid assets and thereby optimizing the use of liquid
funds for operational and refinancing needs. Group Treasury is responsible
for monitoring cash balances and cash forecasts to keep liquidity risk at
manageable level. The Group has not identified any significant concentrations
of liquidity risks in sources of available financing.
The Group improved its cash position with a directed share issue in March 2022

was divided between F-Secure and WithSecure based on principles set out in
the demerger plan. Capital raised in the share issue was not subject to division
in demerger.
Cash and bank balance was at solid level throughout 2022, and at the end of





repayment, the remaining bank loan of EUR 19 million was fully paid. The



forecast on a monthly basis.
Market risk
The Group invests liquidity in excess of operative requirement according to

investing are determined based on cash and liquidity forecasts. The objective
is to generate stable positive returns and at minimum ensure that the invested
nominal amounts can be redeemed. Market risk arising from investments
is managed by defining neutral allocation per asset class complemented by


Foreign currency risk
The Group operates globally and is exposed to a currency risk arising from
exchange rate fluctuations against its reporting currency euro. Transaction risk
is related to foreign currency transactions in sales and expenses. Translation

Transaction risk


diminished by operational expenses arising in same currencies as the sales

rates, the Group can use forward currency contracts to eliminate the currency
exposure of the estimated cash flow of these currencies. At the end of the
reporting period the Group did not have any open currency forward contracts.
Sales in different currencies
Comparative data includes continuing and
discontinued operations
Consolidated
2022
Consolidated
2021
% %
EUR  
GBP 19 
 11 11
JPY 11
 4

100 100

reporting date are as follows:
Comparative data includes continuing and discontinued operations
Financial
assets
Consolidated
2022 %
Consolidated
2021 %
EUR    
JPY    9
GBP 9,742 9  9
   11
 7,994  
 100  100
45
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
Financial
liabilities
Consolidated
2021 %
Consolidated
2020 %
EUR    
  27  7
GBP   1,102
  970
 100  100

to foreign exchange rate fluctuations when all other variables are held constant.



exchange rate against the functional currencies the Group operates in.
EUR million
Consolidated
2022
Consolidated
2021
  
GBP  
JPY  
Translation risk

Most significant translation risks arise from goodwill generated in MWR

the divestment of the South African subsidiary, ZAR based goodwill was
reallocated to GBP and EUR. Translation differences also arise from translating


currencies. According to current policy WithSecure does not hedge equity
investments made in its subsidiaries.

exchange rate fluctuations when all other variables are held constant. The

against the main functional currencies exposing the Group to translation risk.
EUR million
Consolidated
2022
Consolidated
2021
GBP  
ZAR 
  
Interest rate risk
The Group repaid its bank loans in June 2022 which reduced exposure to


Capital management


ensures the functioning of business operations and promotes shareholder
value. After June 2022 the group has not had external financing. Capital
structure is reviewed regularly as a part of financial performance monitoring.
The capital structure can be adjusted among other things by distribution of
dividends, share repurchase or capital repayment. The dividend policy of
WithSecure is to pay approximately half of its annual profit as dividend. Subject
to circumstances, the Company may deviate from its policy
46
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
21. Deferred tax
EUR 1,000
Consolidated
2022
Consolidated
2021

Fixed assets 1,019 
Accruals and provisions  
Tax losses carried forward  
Total  
  
Net deferred tax assets  4,124
Change in deferred tax assets:
Recognized in profit or loss  

Fixed assets  
Accruals and provisions 2,799 2,799
Total  
  
Net deferred tax liabilities  
Change in deferred tax liabilities:
Recognized in profit or loss  

that are available to be offset against future taxable profits in the companies in


22. Other liabilities
EUR 1,000
Consolidated
2022
Consolidated
2021
Non-current liabilities
  
  
  
Total  
Current liabilities
  
Trade payables 4,409 
  
Accrued expenses 9,912 17,249
  
Total  
Material amounts shown under accrued expenses
Accrued personnel expenses  10,411
  
Total 9,912 17,249
23. Contingent liabilities
EUR 1,000
Consolidated
2022
Consolidated
2021
Guarantees for other group companies

 110 110
47
WithSecure Annual Report 2022
Financial Statements WithSecure consolidated
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
24. Related party disclosures


Compensation of key management personnel of the Group
EUR 1,000
Consolidated
2022
Consolidated
2021
Wages and other short-term employee benefits  
Share-based payments  
Total  
Wages and other short-term employee benefits incl. share-based payments
EUR 1,000
Consolidated
2022
Consolidated
2021
  
Leadership Team  
  
 
Board of Directors 2022 and Managing Director
EUR 1,000 Wages Fees
 
Risto Siilasmaa, Chairman of the Board 
Pertti Ervi 
 41
 
 41
 
Tony Smith 
Åsa Riisberg 1
Total  

expense of the share plans. The equity-settled part is measured at the fair value
of the WithSecure Corporation share on the date it was granted and cash-settled
part at the fair value of the share on the reporting date. The cost is recognized






25. Subsidiaries

of the Group.
Name
Country of
incorporation Group (%)
Parent WithSecure Corporation, Helsinki Finland
WithSecure A/S, Copenhagen  100.00
WithSecure AB, Stockholm Sweden 100.00
WithSecure B.V., Utrecht The Netherlands 100.00
WithSecure BV, Heverlee-Leuven Belgium 100.00
 Finland 100.00
WithSecure GmbH, Munich Germany 100.00
 United States 100.00
 Japan 100.00
WithSecure Limited, Basingstoke  100.00
 Norway 100.00
WithSecure Pte. Ltd., Singapore Singapore 100.00
WithSecure SARL, Maisons-Laffitte France 100.00
 Malaysia 100.00
WithSecure SP. z.o.o., Poznan Poland 100.00
WithSecure Srl, Milano  100.00
 Germany 100.00
 China 100.00
  100.00
 Mexico 99.41
F-Secure Argentina S.R.L., Buenos Aires Argentina 
48
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Financial Statements
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/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
EUR Note FAS 2022 FAS 2021
REVENUE   
Cost of revenue   
GROSS MARGIN  
   
Sales and marketing   
Research and development   
Administration   
EBIT  
Financial income and expenses   
PROFIT (LOSS) BEFORE APPROPRIATIONS AND TAXES  
Appropriations  
   
RESULT FOR THE FINANCIAL YEAR  
Income statement
January 1 – December 31, 2022
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WithSecure 2022
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Financial Statements
Remuneration Report
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Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
EUR FAS 2022 FAS 2021
ASSETS
NON-CURRENT ASSETS
 (9)  
Tangible assets (9)  
 (10)  
Long-term receivables (13)  
Total non-current assets  
CURRENT ASSETS
 (12) 
Trade and other receivables (13)  
 (11) 
Short-term investments (14)  
Cash and cash equivalents (15)  
Total current assets  
TOTAL ASSETS  
EUR FAS 2022 FAS 2021
SHAREHOLDERS’ EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY (16, 17)
Share capital  
Share premium 
Treasury shares  
Reserve for invested unrestricted equity  
Retained earnings  
Profit for the financial year  
  100,241,202.09
APPROPRIATIONS
  
CURRENT LIABILITIES 
Long-term liabilities   
Short-term liabilities   
Total liabilities  
TOTAL SHAREHOLDERS’ EQUITY AND
LIABILITIES  
Balance sheet December 31, 2022
50
WithSecure Annual Report 2022
Financial Statements WithSecure corporation
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
Cash flow statement
January 1 – December 31, 2022
EUR 1,000 FAS 2022 FAS 2021
Cash flow from operations
Result for the financial year  
Adjustments
  
Profit / loss on sale of fixed assets 0 
  
Financial income and expenses  
  
Cash flow from operations before change in
  
Change in net working capital
  
 


 
Cash flow from operations before
financial items and taxes
 
  
  
  
  
Cash flow from operations  
EUR 1,000 FAS 2022 FAS 2021
Cash flow from investments
  
 
Proceeds from sale of intangible and tangible assets 0 10
  
 1,271
 191 2,199

1)

Cash flow from investments  
Cash flow from financing activities
Share issue 
  
  
 
Group contributions 
Cash flow from financing activities  
Change in cash  
Effect of exchange rate changes on cash  

2)

Cash and bank at the beginning of the period  
Cash and bank at period end  
1)


money market instruments with maturity less than three months are presented as Cash
and cash equivalents.
2)
Cash held by parent company at completion of the demerger was divided between




51
WithSecure Annual Report 2022
Financial Statements WithSecure corporation
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
Basic information
WithSecure provides cyber security products and services globally for
businesses.

parent company of WithSecure Group, incorporated in Finland and domiciled

Helsinki. Copy of consolidated financial statements can be downloaded from
www.withsecure.com
address.
Accounting principles
The financial statement of WithSecure Corporation has been prepared in

Demerger
WithSecure completed the separation of its Consumer security business into

2022, according to the plan first announced on 17 February 2022 by the Board





Foreign currency translation
Foreign currency transactions are translated using the exchange rates

liabilities denominated in foreign currencies are translated using the European

losses are recognized in financial items in the income statement.
Revenue recognition
Revenue is derived from corporate business. Corporate security business

WithSecure started to classify revenue in three categories: Cloud-based

Cloud revenue includes the Elements platform cloud-based products, Managed




security products are sold by granting the customer access to use the
intellectual property during the license period. WithSecure delivers the product
and provides continuous automated updates against new threats. The software
and the accompanied services are highly interdependent and therefore treated
as one performance obligation for which revenue is recognized over time on a
straight-line basis for the license period.
Until demerger, consumer security business revenue came through operator
and direct consumer channels, and the main products included F-Secure


a Service and revenue was recognized over time on a straight-line basis for
the contract period. When there was a hardware component to the solution

obligation and revenue for hardware was recognized separately at point in time
of delivery.
Presentation of receivables and liabilities from contracts with customers
Receivables from contracts with customers are presented in the balance sheet
as Accrued income. Liabilities from contracts with customers are presented
in the balance sheet as Deferred revenue and included in Total non-current
liabilities or Total current liabilities depending on the duration of the liability.
Pensions

with local statutory requirements. Contributions to defined 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.
Leases
Leases where the lessor retains substantially all the risks and benefits of

Notes to the parent company
Financial Statements
52
WithSecure Annual Report 2022
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payments are recognized as an expense in the income statement on a
straight-line basis over the lease term. The Company has only operating leases.
Income taxes
Current income taxes are calculated in accordance with the local tax and

recognized to the extent that it is probable that future taxable profit will be
available.
Tangible and intangible assets

intangible assets are recorded at historical cost less accumulated depreciation,

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:
 
 
 
 

during the financial period in which they are incurred. The cost of major

the Company will derive future economic benefits in excess of the originally
assessed standard or performance of the existing asset. Any gain or loss


income statement in the year the asset is derecognized.
Research and development expenditure
Research expenditure is recognized as an expense at the time it is incurred.

Inventories
The company has not had inventories after the demerger.
Financial assets and liabilities
Cash and cash equivalents in the balance sheet comprise cash at bank and in
hand and other highly liquid short-term investments.
WithSecure classifies loans from financial institutions, trade payables and
other payables as other financial liabilities which are measured at amortized
cost. Financial liabilities are classified as current unless WithSecure has
unconditional right to postpone their repayment by at least 12 months from the
end date of the reporting period.
Treasury shares

of the shares has been deducted from equity.
Share-based payment transactions
WithSecure provides incentives to employees in the form of equity-settled
share-based instruments. Currently the Company has share-based programs.


was launched in 2022 for all employee. The programs are equity-settled, and

Presentation of expenses
Classification of the functionally presented expenses has been made by
presenting direct expenses in their respective functions and by allocating other
expenses to operations on the basis of average headcount in each function.
53
WithSecure Annual Report 2022
Financial Statements WithSecure corporation
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
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Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
1. Revenue
EUR 1,000 FAS 2022 FAS 2021
Geographical information
Nordic countries  
Europe excl. Nordics  
North America  
Rest of the world 12,192 
Total  

comparative information for 2021 is not comparable with 2022.
2. Other operating income
EUR 1,000 FAS 2022 FAS 2021
Service fees charged from F-Secure under TSA 
Rental revenue  170
Government grants  
  
Total  
Government grants are recognized as income over those periods in which the
corresponding expenses arise.

companies.
3. Depreciation, amortization and impairment
EUR 1,000 FAS 2022 FAS 2021
Depreciation and amortization of non-current
assets
  
Capitalized development  
  
Machinery and equipment  
Tangible assets  
Total depreciation and amortization  

Sales and marketing  
Research and development  
Administration  
Total depreciation and amortization  

comparative information for 2021 is not comparable with 2022.
54
WithSecure Annual Report 2022
Financial Statements WithSecure corporation
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
4. Personnel expenses
EUR 1,000 FAS 2022 FAS 2021
Personnel expenses
Wages and salaries  
Pension expenses  
  
Total  

comparative information for 2021 is not comparable with 2022.
Compensation of key management personnel
Wages and other short-term employee benefits  
Wages and other short-term employee benefits
  
  








FAS 2022 FAS 2021
Average number of personnel  
Personnel by function Dec 31
Consulting and delivery  
Sales and marketing  
Research and development  
Administration 79 
Total 492 
5. Audit fees
EUR 1,000 FAS 2022 FAS 2021
Audit fees, PricewaterhouseCoopers  
  
Total  
6. Financial income and expenses
EUR 1,000 FAS 2022 FAS 2021
  
  
 191 2,199
Exchange gains and losses  
 
  
Total  

shares have been written off during the financial year.
7. Appropriations
EUR 1,000 FAS 2022 FAS 2021
Change in depreciation reserve 
Group contribution 
Total 
8. Income taxes
EUR 1,000 FAS 2022 FAS 2021
  
Adjustments for income tax of prior periods  
 
Total 2,202 
Result before appropriations and tax  
55
WithSecure Annual Report 2022
Financial Statements WithSecure corporation
WithSecure 2022
Board of Directors’ Report
Financial Statements
Remuneration Report
go to previous view
Corporate Governance
Sustainability Report
/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
9. Non-current assets
INTANGIBLE ASSETS TANGIBLE ASSETS
Other
intangible
Capitaliz
ed
development
Incomplete
development
Advance
payments Total
Machinery &
equipment Other tangible Total
Acquisition cost Jan 1, 2020   7,077 422 47,911  
Additions      
Transfers 9,941 
    
       
Additions      
Transfers    
      
   1,441   
Acc. depreciation Jan 1, 2020     
     
Acc. depreciation of disposals    
     
     
Acc. depreciation of disposals     
     
       
  9,242 1,441  770 
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/ WithSecure Corporation
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/ Auditor’s Report
10. Investments in group companies
EUR 1,000
Shares
in group
companies Total
Book value as at Jan 1  
Additions 141 141
  
  

during the financial year.
Name
Country of
incorporation
Share of
ownership
(%)
P
arent WithSecure Corporation, Helsinki Finland
WithSecure A/S, Copenhagen  100
WithSecure AB, Stockholm Sweden 100
WithSecure B.V., Utrecht The Netherlands 100
WithSecure BV, Heverlee-Leuven Belgium 100
WithSecure GmbH, Munich Germany 100
 Japan 100
WithSecure Limited, Basingstoke  100
WithSecure SARL, Maisons-Laffitte France 100
 Malaysia 100
WithSecure Sp. z o.o., Poznan Poland 100
WithSecure Srl, Milan  100
F-Secure Argentina SRL, Buenos Aires Argentina 
  100
 China 100
11. Deferred tax
EUR 1,000 F
AS 2022 FAS 2021
 
Total 
Parent company has recognized deferred tax asset from losses in financial year
2022.
12. Inventories
EUR 1,000 FAS 2022 FAS 2021
 
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/ Statement of nancial
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/ Statement of cash ows
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13. Receivables
EUR 1,000 FAS 2022 FAS 2021
Non-current receivables
 72
Total 72
Receivables from group companies
Loan receivables  
Total  
Non-current receivables total  
Current receivables
Trade receivables  22,299
Loan receivables 
  292
Prepaid expenses and accrued income  
Total  
Receivables from group companies
Trade receivables  
Loan receivables  
 22 
Total  
Current receivables total  
Material items included in prepaid expenses and
accrued income
Prepaid royalty 2,072 2,991
Grant receivables  
  
Accrued income  
Total  
14. Short-term investments
EUR 1,000 FAS 2022 FAS 2021
Fair value as at Jan 1  
  
  
  
  
15. Cash and short-term deposits
EUR 1,000 FAS 2022 FAS 2021
Cash at bank and in hand  
Cash at bank includes also investments in short term deposits with maturity of less

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16. Statement of changes in shareholders’ equity
Parent Company FAS
EUR 1,000 Share capital Share premium fund Treasury shares
Unrestricted equity
reserve Retained earnings Total equity
 1,551 165 –1,288 6,464 83,622 90,513
Result of the financial year  
  
Cost of share based payments  
   
      
Result of the financial year  
Cost of share based payments   
Share issue  
Reduction of share capital and
share premium reserve   
Assets transferred in the demerger  
     
17. Shareholders’ equity


subscription rights. Based on resolution of the Extraordinary General Meeting,




Treasury shares

Distributable shareholders’ equity on December 31, 2022
EUR 1,000
Unrestricted equity reserve 
Retained earnings 
Result of the financial year 
Less capitalized development expense 
 
18. Share-based payment transactions

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changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
19. Liabilities
EUR 1,000 FAS 2022 FAS 2021
Non-current liabilities
  17,712
 
Total  
Liabilities to the group companies
Cashpool  11,711
Total  11,711
Total non-current liabilities  42,424
Current liabilities
  
Trade payables  
 
  1,790
Accrued expenses  
Total  
Liabilities to the group companies
Advance payments  
Trade payables  
 
Total  
Total current liabilities  
Material amounts shown under accruals and
deferred income
Accrued personnel expenses  
Accrued expenses  
Accrued tax 
Total  
20. Financial risk management objectives and
policies
See Group disclosure 20. Financial assets and liabilities.
21. Operating lease commitments
The Group has entered into commercial leases on office space and on motor
vehicles. Motor vehicle leases have an average life of three years and office
space between two and five years with renewal terms included in the contracts.
Future minimum rentals payable under non-cancellable operating leases as at

As lessee
EUR 1,000 FAS 2022 FAS 2021
Within one year  2,929
After one year but not more than five years  977
Total  
22. Contingent liabilities
EUR 1,000 FAS 2022 FAS 2021
Guarantees for other group companies 110 110
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comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
Signatures of the Board of Directors

  
Chairman
  
Tony Smith
Juhani Hintikka
Managing director
Auditors’ note



Authorized Public Accountants
Janne Rajalahti
Authorized Public Accountant
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/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report

Report on the Audit of the Financial Statements
Opinion

•

financial position and financial performance and cash flows in accordance

EU
•

financial performance and financial position in accordance with the laws and
regulations governing the preparation of the financial statements in Finland
and comply with statutory requirements.

What we have audited


statements comprise:
•
statement of comprehensive income, statement of financial position,
statement of cash flows, statement of changes in equity and notes, including
a summary of significant accounting policies
•

and notes.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in Finland.


our report.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We are independent of the parent company and of the group companies in
accordance with the ethical requirements that are applicable in Finland and are
Auditor’s Report
relevant to our audit, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
To the best of our knowledge and belief, the non-audit services that we have
provided to the parent company and to the group companies are in accordance
with the applicable law and regulations in Finland and we have not provided


to the Financial Statements.
Our Audit Approach
Overview
•


•
Audit scope: We have audited parent company and
we have performed audit procedures related to the

have performed analytical procedures to assess
unusual movements across all entities.
•
Valuation of goodwill
•

•
Partial demerger
As part of designing our audit, we determined materiality and assessed the

considered where management made subjective judgements; for example, in
respect of significant accounting estimates that involved making assumptions
and considering future events that are inherently uncertain.
Materiality
The scope of our audit was influenced by our application of materiality. An audit
is designed to obtain reasonable assurance whether the financial statements
are free from material misstatement. Misstatements may arise due to fraud or
error. They are considered material if individually or in aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of the financial statements.
Materiality
Group
scoping
K
ey audit
matters
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Based on our professional judgement, we determined certain quantitative
thresholds for materiality, including the overall group materiality for the
consolidated financial statements as set out in the table below. These, together
with qualitative considerations, helped us to determine the scope of our audit
and the nature, timing and extent of our audit procedures and to evaluate the
effect of misstatements on the financial statements as a whole.
Overall group materiality

How we determined it

Rationale for the materiality
benchmark applied
The groups profitability has been volatile during
the last years due to business combinations
related integration costs and amortization,
significant investments in product development
and go-to-market strategy. Therefore, we chose
revenue as the benchmark because, in our view, it
is the benchmark against which the performance
of the Group is commonly measured by users and
is a generally accepted benchmark. We chose

quantitative materiality thresholds in auditing
standards.
How we tailored our group audit scope
We tailored the scope of our audit, taking into account the structure of the
Group, the accounting processes and controls, and the industry in which the
Group operates.

generated by the parent company and we have audited the parent company as

performed audit procedures related to the two most significant subsidiaries. We

risk of material misstatement for consolidated financial statements and thus our
procedures have been limited to analytical procedures performed at Group level.
By performing the procedures above at legal entities, combined with additional
procedures at the Group level, we have obtained sufficient and appropriate
evidence regarding the financial information of the Group as a whole to provide
a basis for our opinion on the consolidated financial statements.
Key Audit Matters

of most significance in our audit of the financial statements of the current
period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
As in all of our audits, we also addressed the risk of management override of
internal controls, including among other matters consideration of whether there
was evidence of bias that represented a risk of material misstatement due to
fraud.
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Key audit matter in the audit of the group
Valuation of goodwill
Refer to accounting principles and note 12 for the consolidated financial
statements.
Goodwill is one of the most significant balance sheet items and amounted

impairment charge is required involves significant management judgement,
including identifying on which cash generating unit level the goodwill is
tested and estimating the future performance of the business and the
discount rate applied to these future cash flows.

valuation of goodwill as key audit matter in the audit of the Group.
How our audit addressed the key audit matter

judgment and estimates used in the goodwill impairment analysis through
the following procedures:
We tested the methodology applied in the value in use calculation by

tested the mathematical accuracy of calculation;
We evaluated the process by which the future cash flow forecasts are
drawn up, including comparing them to the latest Board approved targets
and long-term plans
We tested the key underlying assumptions for the cash flow forecasts,
including sales and profitability forecasts, discount rate used and the implied
growth rates beyond the forecasted period
We compared the current year actual results included in the prior year
impairment model to consider whether forecasts included assumptions that,
with hindsight, had been optimistic
We tested whether the sensitivity analysis performed by the management
around key assumptions of the cash flow forecast are appropriate by
considering the likelihood of the movements of these key assumptions
Key audit matter in the audit of the group
Capitalization of R&D costs
Refer to accounting principles and note 13 for the consolidated financial
statements.

of new products and product amendments.

requires estimating technical and economical feasibility of the product


these intangible assets needs to be estimated.


audit of the Group.
How our audit addressed the key audit matter

We evaluated the design and operating effectiveness of controls over


We tested a sample of costs capitalized during the year.
We evaluated the relevant assumptions used in the impairment testing
of intangible assets, focusing on the reasonableness of the forecasted
economic information.
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Key audit matter in the audit of the group
Partial demerger
Refer to accounting principles and note 11 for the consolidated financial
statements.

consumer security business were demerged from WithSecure Group using

consumer security business was reported as a discontinued operation in the
consolidated financial statements.

demerger has been accounted for as a disposal to owners in accordance

gain was calculated based on the difference of the fair value of consumer
security business and the book value of the distributed assets and liabilities
in consolidated statement of financial position. The distribution gain

discontinued operations. The distribution gain did not have an impact on the
Group equity.

and the statement of financial position we have considered the accounting
for the partial demerger as key audit matter in the audit of the Group.
How our audit addressed the key audit matter
We evaluated the appropriateness of the transferred assets and liabilities
based on the demerger plan.
We tested the fair value determination of the transferred business.
We assessed the compliance of the accounting treatment of the partial
demerger based on the demerger plan.
We have no key audit matters to report with respect to our audit of the parent
company financial statements.
There are no significant risks of material misstatement referred to in Article

financial statements or the parent company financial statements.
Responsibilities of the Board of Directors and the Managing Director for the
Financial Statements

preparation of consolidated financial statements that give a true and fair view

adopted by the EU, and of financial statements that give a true and fair view in
accordance with the laws and regulations governing the preparation of financial
statements in Finland and comply with statutory requirements. The Board

control as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or
error.


ability to continue as a going concern, disclosing, as applicable, matters relating
to going concern and using the going concern basis of accounting. The financial
statements are prepared using the going concern basis of accounting unless
there is an intention to liquidate the parent company or the group or to
Auditor’s Responsibilities for the Audit of the Financial Statements

statements as a whole are free from material misstatement, whether due

Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with good auditing practice will always detect
a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
As part of an audit in accordance with good auditing practice, we exercise
professional judgment and maintain professional skepticism throughout the
audit. We also:
•

statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
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/ Statement of
comprehensive income
/ Statement of nancial
position
/ Statement of cash ows
/ Statement of
changes in equity
/ Notes to the
Financial Statements
/ WithSecure Corporation
nancial statements
/ Auditor’s Report
•

design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the parent

•
Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by
management.
•


based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the

conclude that a material uncertainty exists, we are required to draw attention



report. However, future events or conditions may cause the parent company
or the group to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial
statements, including the disclosures, and whether the financial statements
represent the underlying transactions and events so that the financial
statements give a true and fair view.
•

information of the entities or business activities within the group to express
an opinion on the consolidated financial statements. We are responsible for
the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during
our audit.
We also provide those charged with governance with a statement that we have
complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we
determine those matters that were of most significance in the audit of the
financial statements of the current period and are therefore the key audit

regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Other Reporting Requirements
Appointment
We were first appointed as auditors by the annual general meeting on 7 April

of seven years.
Other Information

other information. The other information comprises the report of the Board




to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially


prepared in accordance with the applicable laws and regulations.

•

information in the financial statements
•

applicable laws and regulations.

misstatement of the other information, we are required to report that fact. We
have nothing to report in this regard.

PricewaterhouseCoopers Oy
Authorised Public Accountants
Janne Rajalahti

66
WithSecure Annual Report 2022
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WithSecure 2022
Board of Directors’ Report
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