SSH COMMUNICATIONS SECURITY CORPORATION’S SUBSIDIARY KYBERLEIJONA ACQUIRES DELTAGON, A COMPANY SPECIALIZING IN SECURE MESSAGING - Seite 3

SSH’s CFO and manager of the encryption business line, Mr. Niklas Nordström, comments:

”The acquisition helps SSH become a one-stop-shop for encryption solutions for our customers, creating an excellent base for future growth. Deltagon’s customer retention is excellent, which also attests to the high quality of the products.”

The acquisition of Deltagon complements SSH’s strategy of moving towards a subscription-based business model. This makes the business more predictable as the relative importance of the more volatile license sales decreases. After the transaction, approximately 70 percent of the revenue of the SSH group will come from recurring maintenance charges and recurring subscription revenue, and this proportion is expected to grow further in line with our strategy.

SSH will consolidate Deltagon into its balance sheet after the expected closing of the transaction during the first half of 2021. The acquisition is estimated to accelerate the revenue growth of SSH, and it is also estimated to improve significantly SSH’s operating profit and profit.

The acquisition is not expected to cause significant one-time integration costs or investments.

Deltagon key figures

The key figures presented below are based on non-audited accounts of the Deltagon business. They have been prepared in accordance with the Finnish Accounting Act and the FAS standard. They have not been adjusted for IFRS.

Revenue and operating profit figures for the year 2020 are based on estimates.

During the fiscal year 2019, the Deltagon business was consolidated into the Leijonaverkot Oy group balance sheet, and it did not carry a balance sheet of its own. The 2020 balance sheet figures presented are based on the balance sheet of Deltagon Oy, which was carved out from Leijonaverkot Oy at the beginning of 2021. These balance sheet items may change slightly, depending on the time of consolidation.              

	2019	2020 estimate
Revenue (EUR millions)	4.34	4.69
Adjusted operating profit (EUR millions)	2.27	2.50
Equity (EUR millions)	-	1.55
Liquid assets and receivables (EUR millions)	-	1.96
Short term payables and other debt (EUR millions)	-	0.42

A conference call on the acquisition will be organized for media, analysts, and investors on Tuesday, February 2 at 1000 EET. An invitation to the conference call will be issued separately.