Avast plc annual report 2020 Empowering digital citizens for safer online experiences © 2019 Friend Studio Ltd File name: FC_Mission_AboutUs_OurImpact_v77 Modification Date: 2 March 2021 8:19 pm Strategic report Governance Financial statements Avast plc annual report 2020 Financial KPIs Driving growth and Adjusted billings Adjusted revenue $922.0m $892.9m creating value +7.1% organic growth +7. 9 % organic growth +1.2% actual growth +2.3% actual growth Adjusted EBITDA Adjusted net income In this report $495.5m $360.2m +2.6% +11.8% Strategic report Governance Unlevered free cash flow Net debt/LTM adjusted EBITDA Introducing Avast 1 Board of Directors 88 Chair’s letter 9 Corporate governance statement 90 $451.1m 1.5x Markets & threat landscape 12 Audit and Risk Committee report 97 +6.2% Company strategy 20 Nomination Committee report 103 Investment case 23 Directors’ remuneration report 107 Statutory revenue Statutory net income Business model 25 Directors’ report 129 CEO’s review 30 $892.9m $169.6m Financial statements Our technology 36 +2.5% -31.8% Independent Auditor’s Report 136 CFO’s review 42 Consolidated financial statements 146 Risk management 58 Notes to the consolidated People and culture 64 financial statements 153 Operational KPIs Social responsibility Company financial statements 193 Revenue per desktop customer Product per desktop customer and sustainability 75 Notes to the Company Section 172 statement 82 financial statements 195 $53.34 1.5 Glossary 199 +4.5% +2.8% Number of desktop customers 13.62m +7. 9 % © 2019 Friend Studio Ltd File name: FC_Mission_AboutUs_OurImpact_v77 Modification Date: 2 March 2021 8:19 pm Strategic report Governance Financial statements Avast plc annual report 2020 01 Our purpose We protect people’s digital lives Avast believes in an open and connected world where people everywhere have the right to access the same information, ideas and experiences. Our role is to make the online world a safer place so that digital citizens are free to enjoy safe and private connected lives. Our primary purpose is to keep people We have been proud to play a meaningful safe and private online, and never has role in supporting our key stakeholders, this been more important than in 2020. non-governmental organisations (NGOs), In a year when cybercriminals exploited and the scientific community as the fear and confusion around COVID-19, the world battled COVID-19. people, businesses, and frontline healthcare Avast safeguards more than 435 million services turned to technology to maintain people worldwide, protecting their digital their lives and their work. Ensuring internet data, identity, and privacy. access and usage have been secure and private has become mission-critical. © 2019 Friend Studio Ltd File name: FC_Mission_AboutUs_OurImpact_v77 Modification Date: 2 March 2021 8:19 pm Strategic report Governance Financial statements Avast plc annual report 2020 02 About us Avast is a world leader in consumer cybersecurity Our brands: 1.5bn+ 33m+ 435m+ attacks and over 200m new files blocked phishing attacks and nearly 3m unique users1 worldwide each month on average in 2020 phishing URLs blocked each month on average in 2020 User defined as a unique device that has one of more Avast free or paid products installed and has been in contact with our servers in the last 30 days. 4m+ ~100,000 ransomware attacks blocked each organic installs of Avast Antivirus every day month on average in 2020 © 2019 Friend Studio Ltd File name: FC_Mission_AboutUs_OurImpact_v77 Modification Date: 2 March 2021 8:19 pm Strategic report Governance Financial statements Avast plc annual report 2020 03 About us continued Our comprehensive offering Continuing our Attractive investment profile protects and enhances our growth as a FTSE High level of recurring revenues, with strong cash users’ online experiences 100 company generation and a robust Avast was officially admitted to the FTSE balance sheet. SMB 100 index in June 2020. Our promotion security Diversified revenue streams marks another milestone in our growth and recognises our success in providing award- by customer, geography Smart winning products that keep people safe and and product. home private in a fast-evolving digital world. Consistent delivery Consumer Protection on financial guidance. security See the Investment case section, p23 Data Control breaches Family safety Privacy Users Software updates Identity protection Online anonymity Performance PC maintenance Speed © 2019 Friend Studio Ltd File name: FC_Mission_AboutUs_OurImpact_v77 Modification Date: 2 March 2021 8:19 pm Strategic report Governance Financial statements Avast plc annual report 2020 04 Our pandemic response Backing science and technology for a better world Avast’s commitment to keeping people safe reaches far beyond the online world. We have $25m always believed in the power of donated to support global R&D initiatives focused on COVID-19 testing, treatment technology to change the world and vaccines for the better. In 2020, we provided financial support and resources to a As a tech company, we believe considerable range of scientific, that a rigorous, scientific approach technological, and community- provides the best exit strategy for based initiatives to help fight this crisis. A prudent, systematic COVID-19 and back the and well-funded approach to people, businesses, and testing, treatment, and vaccine organisations directly impacted development will minimise by the pandemic. lockdowns and disruptions, and ultimately, save lives. Ondrej Vlcek Chief Executive Officer © 2019 Friend Studio Ltd File name: FC_Mission_AboutUs_OurImpact_v77 Modification Date: 2 March 2021 8:19 pm Strategic report Governance Financial statements Avast plc annual report 2020 05 Our pandemic response continued Global support for a global crisis Avast joined the COVID-Zero Coalition, an initiative coordinated by Wellcome, one of the world’s $12m $8m leading independent health to the COVID-19 to the Coalition for Epidemic Therapeutics Accelerator Preparedness Innovations (CEPI) research foundations. In partnership with the Bill & The Coalition makes efforts to We fully supported the coalition’s Melinda Gates Foundation, eliminate preventable deaths Mastercard, and Wellcome, through the pursuit of testing, strategic focus on research and this initiative accelerates the treatment, and prevention development (R&D) projects development of rapid testing through vaccine development that are dedicated to developing Supporting employees in a time and treatments the best testing, treatment, and of change vaccines to fight the virus. We also moved swiftly to supply all our colleagues with the technology and office equipment for a smooth transition to working from home, ensuring they $5m received all the support they needed and to community-based scientific efforts without taking any government aid. Including: Local activities in Czech We embraced truly asynchronous working Republic included: $200,000 and computing to give those suddenly balancing caring – $720,000 for one million resources to Folding@home’s responsibilities alongside their work the face masks delivered to supercomputing program to flexibility they needed. This enabled us care organisations in the find a cure for the virus. to continue providing our services to our Czech Republic. users without interruption. $580,000 to Czech Technical – $44,000 to provide University for the development 1,000 hot meals a day and production of Corovent, to key workers in Prague. a prototype lung ventilator. – Production of 3D printed face masks with Czech OneVoluntary contributions Technical University. to US food bank schemes. © 2019 Friend Studio Ltd File name: FC_Mission_AboutUs_OurImpact_v77 Modification Date: 2 March 2021 8:19 pm Strategic report Governance Financial statements Avast plc annual report 2020 06 Our pandemic response continued The pandemic proved to be an Secure opportunity for bad actors. With people forced online for services connected and information as restrictions and experiences lockdowns were implemented, we tracked a large number of scams. for everyone, Fake shops were the most common scam variant, selling everywhere discounted medical equipment such as face masks or sanitiser. Some even claimed to sell treatments or self-provisioned COVID-19 tests. Anyone can set People are dealing with a up a shop online under almost any lot of problems right now. name. Anyone placing orders on Digital security doesn’t these sites would never receive the goods. We used a variety of have to be one of them. communication channels, such The Internet of People COVID-19 has expanded the cyberattack as blogs, social media, and press surface of all these networks, with remote We consider security and privacy to be working and schooling increasing our releases, to raise awareness of about protecting individuals, moving away reliance on technology to connect people these scams with the public. from a device-centric approach to embrace on an unprecedented scale – one that is what we think of as the ‘Internet of People’ increasingly likely to be permanent. where individuals’ online experiences and identities are secured. Enabling this approach, Internet of Things Nick Viney (IoT) devices are increasingly widely and SVP Partner deeply integrated into our home, business, utilities, and transportation systems. We increasingly no longer separate online and offline experiences as a result. © 2019 Friend Studio Ltd File name: FC_Mission_AboutUs_OurImpact_v77 Modification Date: 2 March 2021