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Avast Plc

Avast PLC First half performance underpins strong full year outlook

Avast PLC (LON:AVST), together with its subsidiaries, a leading global cybersecurity provider, today announced its results for the six-months ended 30 June 2019.

FINANCIAL HIGHLIGHTS

· Strong overall performance in line with expectations

· Adjusted Billings excluding FX1, Discontinued Business2 and disposal of the Managed Workplace business3 up 12.5%, 9.2% in actual rates to $454.6m

· Adjusted Revenue excluding FX, Discontinued Business and disposal of the Managed Workplace business up 9.2%, 8.3% in actual rates to $421.7m

· Adjusted Revenue in Consumer Direct Desktop excluding FX up 10.5%, 9.5% in actual rates to $307.6m

· Adjusted EBITDA up 6.5% to $236.5m; Adjusted EBITDA margin4 at 55.4%, up 36bps

· Adjusted fully diluted earnings per share (‘EPS’) $0.15 (versus $0.14 at HY 2018)

· Proposed interim dividend payable in October 2019 of 4.4 cents per share

· Continued strong cash generation with Unlevered Free Cash Flow up 20.0% to $230.4m and Levered Free Cash Flow up 29.9% to $200.2m

· Net debt / LTM (‘last twelve months’) Adjusted EBITDA at 2.4x at half year

· On a statutory basis, Revenue up from $388.6m to $425.4m, Operating profit up from $109.7m to $161.9m, fully diluted EPS at $0.11.

OPERATIONAL AND STRATEGIC HIGHLIGHTS

· Desktop operating KPI’s tracked positively, with customers5 up 1.8% to 12.41m, APPC6 up 2.3% to 1.43 and ARPC7 2.3% to $50.38

· The core Consumer Direct Desktop business continued to power the Group’s performance. Strong growth was driven from the cross-selling of Privacy products such as VPN and AntiTrack, and Performance products such as Cleanup and Driver Updater

· Growth to customer numbers and penetration has been delivered in both traditional territories and new target countries, with localisation of more products, sales flows and partnerships

· Traditional AV has benefited from the further optimisation of comprehensive Smart Scans to support up-selling

· Avast’s Internet of Things (‘IoT’) project reached two important milestones: in the period, the carrier-based solution went live with the operator WindTre in Italy; in July, the direct-to-consumer product ‘Omni’ was released to Avast users in the US market

· A strategic partnership for the analytics business Jumpshot was announced in July to help capture additional growth opportunities

Ondrej Vlcek, Chief Executive of Avast, said:

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

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

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

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

PRESENTATION OF RESULTS

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