Source - RNS
RNS Number : 4088B
Avast PLC
30 January 2020
 

30 January 2020

 

Avast plc - Business and Trading Update

 

Avast plc ("Avast", together with its subsidiaries, the "Group") today provides a business and trading update.

 

Summary

 

·    Avast has decided to terminate the provision of data to its data analytics business, Jumpshot, with immediate effect

·    This decision does not impact the Group's FY 2019 results, which are in line with expectations

·    Guidance of mid-single digit growth in Organic Revenue in FY 2020, excluding Jumpshot

·    The company will be hosting a conference call today at 7.30am GMT, further details of which are provided below

 

Ondrej Vlcek, Avast CEO said:

 

"Today we are announcing the immediate termination of the provision of data to Jumpshot. People have become increasingly sensitive to data privacy matters. Avast has always been committed to doing the right thing for its users and customers, and this is the overarching principle that has guided our decisions in response to recent developments. While we have always acted with integrity, our respect for people's privacy concerns must take precedence over everything else.

 

"The core of the Avast business and our fundamental strengths remain unchanged. Trading in 2019 was in line with our expectations. We continue to expect healthy growth during 2020 and remain confident in the long-term prospects for the business."

 

A letter from Ondrej Vlcek, Group CEO can be viewed at https://blog.avast.com/a-message-from-ceo-ondrej-vlcek  

 

FY 2019 trading update

 

As previously announced, Avast expects to release its final results for the year ended 31 December 2019 on 26 February 2020. These results1 are in line with expectations and at a headline level Avast expects to report:

 

-      Organic2 Billings up 10.2%3 to $900.7m

-      Organic Revenue up 9.1% to $862.8m

-      Adjusted EBITDA up 7.9% to $483.0m; Adjusted EBITDA margin at 55.3%, up 119bps

 

Recent business developments

 

Jumpshot

 

Avast has terminated the provision of data to its data analytics business 'Jumpshot' with immediate effect.  Jumpshot may not use any existing data provided by Avast and no further data will be provided by Avast.

 

The decision to terminate the provision of data to Jumpshot has been made in the best long-term interest of the Group and its shareholders. Users put their faith in Avast to keep their data safe online and to give them control over their privacy. While Avast believes it has always acted in full accordance with privacy regulations and strived to implement best practices, this action seeks to mitigate any perceived conflict of interest with our core security mission that might exist with our users. Investment resources budgeted for Jumpshot will be reassigned to other areas of the Group to support long-term organic growth initiatives.

 

The decision to terminate the provision of data to Jumpshot does not affect the Group's FY 2019 results. Jumpshot's past results have been included as part of the Group's Consumer Indirect segment. Jumpshot is to be classified as a Discontinued Business in the Group's reporting going forward.

 

Jumpshot's FY 2019 Adjusted Revenue was $36m, equating to approximately 200 basis points of the Group's FY 2019 Adjusted Revenue growth, while Adjusted EBITDA in FY 2019 was $7m. As noted above, this compares to Group FY 2019 Organic Revenue of $862.8m and Group Adjusted EBITDA of $483.0m.

 

Today's decision has no impact on the operations of any of Avast's other businesses.

 

FY 2020 outlook

 

Fuller guidance for FY 2020 will be provided as part of Avast's FY 2019 earnings announcement, scheduled for 26 February 2020.

 

Excluding Jumpshot, the Group expects to deliver healthy growth during FY 2020 with Organic Revenue growth of mid-single digit (which reflects the high single digit run-rate adjusted for the Jumpshot impact noted above). Organic Billings growth for the FY 2020 will be broadly in line with revenue growth, albeit weighted towards the second half of the financial year because of the Group's deferral of product releases in the first half of the year. This is due to the rebuild of the product environment that we decided to undertake to proactively harden and further secure it after the attempted attack late last year.

 

Adjusted Group EBITDA margin is expected to be broadly flat versus FY 2019 as operating costs released from Jumpshot will be re-invested into the business to support growth initiatives.

 

The Group expects to incur a one-time exceptional cash cost of in the range of $15m-$25m in the current financial year to cover closure costs, asset write-down and employee restructuring. As part of the termination arrangements Avast has agreed with Ascential plc that it will return the investments made by Ascential plc into the business, along with associated exit costs.

 

Avast expects to recommend the payment of the final FY 2019 dividend in line with the Group's dividend policy and expects to continue to observe its dividend policy in FY 2020.

 

Conference call details

 

07:30 GMT on Thursday, 30 January 2020

 

Standard international access: +44 (0)330 336 9126

France: +33 (0)1 70 72 25 50

US: +1 323 794 2597

 

Code: 9598761

 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014.

 

 

Enquiries:

 

Peter Russell, Director of Investor Relations

[email protected]

 

Stephanie Kane, VP PR and Corporate Communications

[email protected]

 

Lulu Bridges / Jos SImson / Heather Armstrong / Tim Pearson

Tavistock

 

Tel: 020 7920 3150

 

 

Notes:

 

1 All figures in this announcement are unaudited

2 Organic numbers exclude FX, Discontinued Business, disposal of the Managed Workplace business and Acquisitions

3 Growth rates exclude currency impact, Discontinued Business, disposal of the Managed Workplace business and Acquisitions

 

 

About Avast

 

Avast (LSE:AVST) is a global leader in digital security products. With over 400 million users online, Avast offers products under the Avast and AVG brands that protect people from threats on the internet and the evolving IoT threat landscape. The company's threat detection network is among the most advanced in the world, using machine learning and artificial intelligence technologies to detect and stop threats in real time. Avast digital security products for Mobile, PC or Mac are top-ranked and certified by VB100, AV-Comparatives, AV-Test, West Coast Labs and others. Visit: www.avast.com.

 

 

 

 


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