Avast Holding B.V. Announcement of Intention to Float

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THIS ANNOUNCEMENT

This announcement is an advertisement for the purposes of the Prospectus Rules of the UK Financial Conduct Authority

(“FCA”) and not a prospectus and not an offer to sell, or a solicitation of an offer to subscribe for or to acquire, securities in or

into the United States or in any other jurisdiction, including in or into Australia, Canada or Japan. Neither this announcement

nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever

in any jurisdiction. Investors should not subscribe for or purchase any ordinary shares referred to in this announcement except

solely on the basis of information contained in the prospectus (the “Prospectus”) in its final form expected to be published by a

new English holding company (the "Company") of Avast Holding B.V. ("Avast Holdings") and its subsidiaries (Avast Holdings

and its subsidiaries being together the "Group", or "Avast") in due course in connection with the proposed admission of its

ordinary shares (the “Shares”) to the premium listing segment of the Official List of the FCA and to trading on the main market

for listed securities of the London Stock Exchange plc (the “London Stock Exchange”). A copy of the Prospectus will, following

its publication, be available for inspection from https://investors.avast.com.

FOR IMMEDIATE RELEASE

12 April 2018

Avast Holding B.V.

Announcement of Intention to Float

Avast, a leading global cybersecurity provider, today announces that it intends to proceed with an

initial public offering (the “IPO” or the “Offer”). It is intended that the Company will apply for admission

of its Shares to the Premium segment of the Official List of the FCA and to trading on the Main Market

for listed securities on the London Stock Exchange (together, the “Admission”). It is expected that

Admission will occur in early May 2018.

Avast – The Number One Consumer Cybersecurity Company

 Number one provider of security software to the consumer market globally as measured by

number of users, offering a range of products that protect users’ security, privacy and improve

device performance

 More than 435 million users worldwide as of 31 December 2017, including more than 290

million consumer personal computer software users, approximately six times more than the

Group’s nearest competitor, and more than 145 million mobile users

 Products offered in two segments: consumer products (which generate direct and indirect

revenue streams) and products for the small and medium business (“SMB”) market which

secure not just the devices of users, but also their data, families, networks and homes

(collectively, their “digital lives”)

 Next-generation consumer PC antivirus security software marketed under the Avast and AVG

brands, each in the form of both free offerings as well as paid premium products, as well as

value-added solutions for PCs and mobile devices focused on performance and privacy

 A sophisticated, predictive, consumer monetisation platform which uses contextual

messaging to convert, up-sell and cross-sell the Group’s users. The combination of the

Group’s large user base and powerful consumer monetisation platform provides the Group

with strong monetisation and marketing capabilities for new and existing product offerings

 Advanced security engine stopped approximately two billion attacks per month in the year

ended 31 December 2017

 More than 600 employees in research and development (“R&D”) focused on continuous

development and improvement of these technologies, representing more than 45% of its total

permanent employee headcount

 30 years’ experience delivering security solutions to the consumer market; successfully

growing the business in recent years while maintaining strong levels of profitability

 Billings primarily composed of subscription agreements, which enhance the predictability and

visibility of the Group’s future revenue streams, with 88% of Adjusted Billings excluding

Discontinued Business were attributable to subscription agreements for the year ended 31

December 2017

In 2017, the Group's Adjusted Billings was $811 million, Adjusted Revenue was $780 million,

Adjusted Cash EBITDA

was $451 million. The Group has achieved significant growth, increasing

Adjusted Billings, Adjusted Revenue and Adjusted Cash EBITDA at a CAGR of 9%

, 8%

and 13%

respectively, over the three years ended 31 December 2017. The Group also benefits from a high

cash conversion

profile, resulting from a combination of low capital expenditure, limited working

capital requirements and high margins. The Group had 76% cash conversion for the year ended 31

December 2017, driven by deferred revenue inflows and its low capital expenditure requirements.

The Group is confident that its innovative business strategies will continue to drive growth in a large

and robust global market. These include: direct monetisation through up-selling users to premium

paid products and by cross-selling across multiple platforms and services; leveraging scale, expertise

and big data to find new ways of indirect monetisation; product innovation through the improvement of

offerings, including developing products to address the Smart Home market and the internet of things

(“IoT”); and continuing the strong track record of successful acquisitions.

Vincent Steckler, CEO of Avast, said:

"Over the past thirty years, Avast has grown from a visionary start-up to the number one consumer

cybersecurity company, with 435 million users worldwide. This transformation of our company has

happened because of the dramatic increase in the number and types of threats around the world

which are a growing concern to people, and Avast’s ability to stay ahead of the bad guys with new

and evolving technologies and products.

We are proud of our award-winning security products and amazing technical experts in R&D, which

have positioned us well to take advantage of this expanding consumer cybersecurity market which is

expected to grow 10% annually and reach $21 billion by 2021. Our large user base creates a strong

network effect and powers our advanced next-generation security engine which uniquely combines

the latest in machine learning and artificial intelligence and big data to keep people around the world

safe online. Our winning Freemium business model uses our sophisticated consumer platform to

provide highly targeted cross-sell and up-sell opportunities for our premium products. This has

resulted in strong revenue growth over the past three years, high margins and an attractive cash

conversion rate.

The hard work and commitment of our ~1,700 employees across the globe, over 600 of which work in

R&D, has been core to our success. Their talent and dedication has enabled Avast to create leading

and trusted products that make people’s digital lives safer. As a leading European tech company, a

listing on the London Stock Exchange is a strategic and natural fit, providing us with wider access to

the capital markets and supporting the future growth of our business in the years ahead.”

All adjusted figures include Piriform pre-acquisition results

CAGRs for 2015-2017 excluding Discontinued Business and Piriform

CAGR for 2015-2017 excludes Piriform, Discontinued Business (assuming 100% drop-through) and realized cost synergies

from AVG

Cash Conversion is calculated as Unlevered Free Cash Flow (uFCF) as a % of Adjusted Cash EBITDA. uFCF represents

Adjusted Cash EBITDA less capital expenditures, plus cash flows in relation to changes in working capital (excluding change in

deferred revenue and change in deferred cost of goods sold) and taxation

John Schwarz, Independent Chairman of Avast, said:

“Avast has a pioneering history of innovation in cybersecurity and a clear vision to protect people

online, which has resulted in global success. The strength of the management team, with deep

experience in security and brand-building, has enabled Avast to build a track record of strong financial

performance. I believe that the scale of Avast’s operations and the sophistication of its technology

platform provide a firm foundation for future growth. A listing on the LSE will allow a new generation of

investors to benefit from the next phase of Avast’s growth as a public company, and from significant

returns through future dividends. The Board is very supportive of the Avast team in executing our

plans for protecting people’s digital lives."

Reasons for the Offer

 As part of the offer, the Group intends to raise approximately $200 million of primary proceeds

 The Group intends to use the primary proceeds of the offer to reduce its overall indebtedness,

which is expected to provide it with greater financial flexibility to drive the future growth of the

business

 assuming approximately $200 million of primary proceeds raised, this would imply a Net

Debt / LTM Adjusted Cash EBITDA of approximately 3x at the time of IPO

 The Group also believes that the Global Offer will:

 further increase the Group’s profile, brand recognition and credibility with its users,

suppliers and employees;

 assist in recruiting, retaining and incentivising key management and employees; and

 provide the Selling Shareholders with a partial realisation of their investment

 Immediately following Admission, the Company intends to have a free float of at least 25% of

the Company’s issued share capital

 It is expected that Admission will take place in May 2018 and that, following Admission, the

Company will be eligible for inclusion in the FTSE UK indices

Each of the Company, its Directors and members of its senior management, and the Company's

ultimate shareholders will agree to customary lock-up arrangements in respect of their remaining

holdings of Shares for specified periods of time following Admission. On an estimated fully diluted

basis (subject to final dilution), the Group is currently owned by its Founders (46%); CVC (29%);

Management, Board and Employees (18%) and Summit Partners (7%).

For more information, see Details of the Offer.

Avast Investment Highlights

(For more information, see Avast Key Competitive Strengths and Avast Key Business Strategies)

The Group believes that it benefits from the following key competitive strengths:

1) Global leader in security, performance and privacy, specialising in protecting consumers’ digital

lives

 More than 435 million users worldwide as of 31 December 2017, a user base of comparable

magnitude to other leading global online consumer brands, with more than 290 million

consumer PC users as of 31 December 2017 and more than 145 million mobile users

 Headquartered in the Czech Republic with a global user base, with approximately 35% of

users in the Americas, 48% of users in Europe, the Middle East and Africa, and 17% of users

in Asia Pacific for the year ended 31 December 2017

2) Highly recognisable leading consumer brand

 Best in class brand awareness results, outranking all the Group's competitors

 Recognised by the online security community as a leading and trusted provider in consumer

security which has helped the Group improve its brands' visibility and promote its reputation

and its products

3) Advanced next-generation security engine, driven by cloud-based machine-learning capabilities

 Next-generation security engine which uses a combination of Artificial Intelligence (AI),

behavioural detection, machine-learning capabilities and signature-based detection to drive

best-in-class protection

 The Group’s threat detection engine is continuously improved through technology that uses a

global network of sensors to provide the Group with data gathered anonymously from the

online experiences of its users, providing industry leading protection against file and memory

attacks as well as network-based attacks

 The Group's security engine stopped approximately two billion attacks per month in the year

ended 31 December 2017 and successfully defended users against specific attacks, including

the WannaCry attack which affected millions of PCs worldwide in 2017

 The Group places a heavy focus on the continuous development and improvement of these

technologies, with more than 45% of its permanent employees working in research and

development (“R&D”)

4) Sophisticated consumer platform with strong monetisation opportunities from the Group’s existing

user base

 Consumer monetisation platform, which is underpinned by machine-learning algorithms, is

used to promote up-sells and cross-sells within the existing user base in an efficient manner

 Strong execution in converting, up-selling and cross-selling a wide range of products and

solutions to the user base: as of 31 December 2017, 25% of customers had purchased more

than one Group product, compared to 19% as of 31 December 2015

 The Group also benefits from indirect monetisation through analytics, advertising, third party

product distribution and secure browsing. The Group believes the total Consumer Indirect

market will grow at an 11% CAGR from 2017 to 2021, from $6.9 billion in 2017 to $10.4 billion

in 2021

5) Differentiated and cost-effective user acquisition model

 Direct sales model, focused on online sales with low user acquisition costs, promotes a low

sales and marketing expense that distinguishes the Group from competitors in the traditional

retail and OEM channels

 Free antivirus software is the most effective marketing tool: users have positive experiences

with these products, which promotes viral marketing through interactive marketing channels,

including through word-of-mouth recommendations and reviews

 For free PC antivirus products, service cost of approximately $0.02 per free PC antivirus

software user per annum for the year ended 31 December 2017

6) Highly scalable business model benefitting from significant network effects

 Large size of the Group’s user base promotes strong network effects, fuels further growth and

creates barriers to entry

 The user base also generates large amounts of data with unique insights into their behaviour,

which acts as an input to improve the Group's machine-learning-based technology engine,

including its virus detection capabilities and its consumer monetisation platform

 As the Group’s technology platform improves and successfully protects users, the Group

earns more trust from its users, promoting strong global brand awareness and increased

demand for products thereby attracting more users

7) Attractive financial profile with robust cash flow generation and high cash conversion

 The Group operates in a large and robust market, which is estimated to have reached $14.5

billion for the year ended 31 December 2017, and the Group believes the market will reach

revenues of $21.3 billion in 2021, representing a CAGR of 10% according to Group estimates

 Business model provides a high level of billings and revenue visibility, driven by a high

proportion of subscription agreements

 Track record of consistent growth and strong profitability and cash flow generation. The

Group’s 2017 Adjusted Revenues were $779.5 million with 76% cash conversion for the year

ended 31 December 2017; having grown by 8.0%

over the period 2015-17

8) Experienced management team with a strong track record of execution

 Management team has significant experience in sales, technology, product development and

marketing and the security software industry

 Group Chief Executive Officer, Vincent Steckler, has been with the Group for nine years and

has worked in the security software industry for over eighteen years; Ondrej Vlcek, the head

of the Group’s Consumer business and CTO, has been with the Group for over twenty years

 Management team has led the Group through its growth into the leading global provider of

software to consumers, growing both organically and through the acquisition and integration

of AVG, a leading security software company, and Piriform, a leading provider of device

performance optimisation software

Excluding Discontinued Business and Piriform

Avast's Growth Strategy

 Continue to drive direct monetisation by up-selling users to paid premium security products

and to higher tier premium security products

 Continue to drive direct monetisation by successful cross-selling across multiple platforms

and services

 Leverage scale, historical expertise and big data to find new ways of indirect monetisation

 Achieve product innovation through the improvement of its offerings, including developing

products to address the Smart Home market and the privacy and security threats posed by

the rapid growth of connected devices, collectively known as the internet of things (“IoT”)

 Continue strong track record of successful acquisitions

Current Trading and 2018 Outlook

The Group has performed in line with its expectations in the first three months of 2018. The Group

continues to deliver attractive organic growth and outperform the market. As a result, the Group

continues to expect high-single digit revenue growth at constant currency in 2018

Dividend Policy

The Group expects to adopt a dividend policy that focuses on providing significant returns to

shareholders, whilst also ensuring that the Group retains the flexibility to continue to deploy capital

towards profitable growth. There can be no guarantees that the Company will pay future dividends.

The determination of the level of future dividends, if any, will depend upon the Group’s results of

operations, financial condition, capital requirements, contractual restrictions, business prospects and

any other factors the Board may deem relevant. The Group currently expects to maintain dividend

payments of approximately 40% of levered free cash flow in the short to medium term.

Dividend payments will be made on an approximate one-third:two-thirds split for interim and final

dividends, respectively. The Group intends to commence dividend payments with a final dividend

payment in respect of 2018, which will be payable in the first half of 2019.

The Group may revise its dividend policy from time to time.

Summary Details of the Offer

The Global Offer consists of an institutional offer only. In the Global Offer, Shares will be offered (i) to

certain institutional investors in the United Kingdom and elsewhere outside the United States and (ii)

in the United States only to qualified institutional buyers in reliance on Rule 144A or pursuant to

another exemption from, or in a transaction not subject to, the registration requirements of the

Securities Act. The Group intends for the Company to use the net proceeds from the issue of the New

Shares to reduce the Group’s overall indebtedness, which is expected to provide the Group with

greater financial flexibility to drive the future growth of the business.

Excluding Discontinued Business

Enquiries:

Avast

Vincent Steckler (CEO)

Philip Marshall (CFO)

Investor Relations

Peter Russell

IR@avast.com

Media Relations

Stephanie Kane

MediaRelations@avast.com

Joint Global Co-ordinators, Joint Bookrunners and Joint Sponsors

Morgan Stanley

David Chen

Enrique Perez-Hernandez

Ben Grindley

Martin Thorneycroft

+44 20 7425 8000

UBS Investment Bank

Christian Lesueur

Thomas Koehrer

Christopher Smith

Rahul Luthra

+44 20 7567 8000

Other Joint Bookrunners

Bank of America Merrill Lynch

James Fleming

Tristan Lacroix

+44 20 7628 1000

Barclays Bank PLC

Ben Freeland

Phil Drake

+44 20 7623 2323

Credit Suisse

Nick Koemtzopoulos

Vivek Manipadam

+44 20 7888 8888

Jefferies International Limited

Nandan Shinkre

Rob Leach

+44 20 7029 8000

Co-Lead Manager

KeyBanc Capital Markets

Rodd Langenhagen

David Spitz

+1 (800) 859-1783

Financial Adviser to Avast

Rothschild

William Marshall

Albrecht Stewen

Anton Black

+44 20 7280 5000

Financial Public Relations

Finsbury

Dorothy Burwell +44 20 7251 3801

Andy Parnis

Further information on the Group

Avast Business Overview

The Group offers products in two segments: consumer products (which generate direct and indirect

revenue streams) and products for the small and medium business (“SMB”) market. These products

secure not just the devices of users, but also their data, families, networks and homes. The Group

offers next-generation consumer PC antivirus security software under the Avast and AVG brands,

each in the form of both free offerings as well as paid premium products. In addition to security

products, the Group also offers value-added solutions for PCs and mobile devices focused on

performance and privacy, such as optimisation products (including CCleaner, Avast Cleanup and

AVG Tune Up), VPN products (including HideMyAss (“HMA”) and Avast SecureLine VPN), password

manager products (including Avast Passwords) and family safety products (such as Location Labs’

mobile parental controls products). The Group is also developing products to address the Smart

Home market and the privacy and security threats posed by the rapid growth of connected devices,

collectively known as the internet of things (“IoT”). In addition, the Group monetises its users indirectly

through advertisements and third party software distribution agreements, as well as through its secure

browser, SafeZone, and successor product Avast Secure Browser; its e-commerce offering,

SafePrice; and its data analytics business, Jumpshot. Specifically designed for the SMB market, the

Group offers cloud and on-premises antivirus protection and IT administrative solutions under both

the Avast and AVG brands.

The Group’s antivirus solutions use artificial intelligence (“AI”) and employ machine-learning

capabilities to conduct behavioural analysis and improve detection abilities. With both local and cloud-

based deep learning capabilities, the Group’s security engine is powered by a continuous data loop of

inputs from the Group’s users, who act as a geographically dispersed global threat detection system.

The Group’s security engine stopped approximately two billion attacks per month in the year ended

31 December 2017. The Group places a heavy focus on the continuous development and

improvement of these technologies, with more than 45% of its permanent employees working in

research and development (“R&D”). The Group believes this focus on R&D strongly contributes to the

fact that the Group’s products are consistently ranked among the highest-rated antivirus solutions by

both users and editors on leading download websites, as well as in popular media globally.

The Group offers versions of its high-performance consumer PC antivirus security software to

consumers free of charge. The Group focuses on promoting these free products as a part of its user

acquisition strategy. The Group monetises its user base by converting users of its free antivirus

software to paid antivirus customers and selling existing customers of its paid antivirus products a

higher tier of paid antivirus software (collectively, “up-selling”) or selling adjacent (non-antivirus) paid

products, such as VPN products or PC optimisation tools, to existing users or customers (“cross-

selling”). The large user base not only drives direct revenues by growing the market to which the

Group can target its up-selling and cross-selling campaigns, but it also improves the accuracy and

effectiveness of the Group’s machine-learning-powered consumer monetisation platform. The

platform becomes more effective with increased inputs, improving the Group’s ability to market and

advertise its products to its existing user base by learning the most effective time and manner to

message and prompt users to purchase premium paid antivirus software or value-added solutions.

The Group’s free products provide comprehensive malware protection to users, while imposing low

user support and servicing costs on the Group, amounting to, on average, $0.02 per free PC antivirus

software user per annum for the year ended 31 December 2017.

The Group has successfully grown its business in recent years while maintaining strong levels of

profitability. Further, the Group’s billings are primarily composed of subscription agreements, which

enhance the predictability and visibility of the Group’s future revenue streams. Subscription

agreements are typically paid in full up front with revenue being recognised on a deferred basis over

the life of the agreements, which typically vary from one to three years.

Avast Key Competitive Strengths

The Group believes that it benefits from the following key competitive strengths:

Global leader in security, performance and privacy, specialised in protecting consumers’ digital lives

The Group is the number one provider of security software to the consumer market by number of

users. With more than 435 million users worldwide as of 31 December 2017, the Group had a user

base of comparable magnitude to other leading global online consumer brands. The Group has a

global user base, with approximately 35% of its users in the Americas, 48% of its users in Europe, the

Middle East and Africa, and 17% of its users in Asia Pacific for the year ended 31 December 2017.

The Group had more than 290 million consumer PC users as of 31 December 2017, which was

approximately six times the number of consumer PC users as its nearest competitor and more than

145 million mobile users.

Highly recognisable leading consumer brand

The Group has high brand awareness among consumers. According to data from Google Trends,

which tracked trends in Google searches for antivirus vendors (and their name variations) for the year

ended 31 December 2017, the Group’s two major brands, Avast and AVG, together generated 21.4%

of named searches worldwide. These brand awareness results were best-in-class in the industry,

outranking all the Group's competitors.

Further, the Group has also been recognised by the online security community as a leading and

trusted provider in consumer security. For example, the Group’s free antivirus products under both the

Avast and AVG brands have been recognised by PC Mag as an Editors’ Choice in 2018 and have

been given the title of “best free antivirus”. AV Test rated the Group’s Mobile Security product as the

best antivirus software for Android in November 2017, giving it a perfect score for its antivirus

capabilities. These and other such recognitions have helped the Group improve its brand’s visibility

and promote its reputation and its products.

Advanced next-generation security engine, driven by cloud-based machine-learning capabilities

The Group has developed a next-generation security engine which uses a combination of behavioural

detection, machine-learning capabilities and signature-based detection to drive best-in-class

protection. Unlike signature-based antivirus products that can only detect known viruses, the Group’s

proprietary scanning engine proactively searches for previously unknown viruses and malware, as

well as new variants of known viruses and malware undetectable with normal definitions and virus

signatures. The security engine adds additional layers of defence to protect against more

sophisticated and advanced threats and will flag anomalous behaviours (e.g., the creation of new

binary files, the execution of files or the modification of certain registry entries), even if such

behaviours have not previously been identified as known viruses. The Group’s threat detection engine

is continuously refined through technology that uses a global network of sensors to provide the Group

with data gathered anonymously from the online experiences of its users. This threat detection engine

uses advanced techniques, such as these behavioural insights as well as machine-learning

capabilities, to leverage the data collected in order to provide effective protection for users. The Group

has a highly specialised team of researchers, including a core team of individuals with advanced

degrees, who have a specific focus in developing the Group’s next-generation technology and

machine-learning capabilities, with the task of continuing to improve the Group’s security engine and

core technologies.

The Group’s security engine is supported by more than 10,000 servers handling more than 60 million

simultaneous connections, enabling a high level of automation and scalability to process extensive

data sets from users to drive industry leading protection against file and memory attacks as well as

network-based attacks. The multi-layered security protection integrated into the Group’s products

successfully defended users against specific attacks, including the WannaCry attack which affected

millions of PCs worldwide in 2017 (in which the devices of many well-known organisations were

infected with ransomware, which encrypted these organisations’ files and threatened to delete them

unless the hackers were paid a ransom).

Sophisticated consumer platform with strong monetisation opportunities from the Group’s existing

user base

The Group believes that its consumer monetisation platform is a key driver of its success, allowing the

Group to leverage data from, and monitor the behaviour of, its base of more than 435 million users.

The Group uses this consumer monetisation platform to promote up-sells and cross-sells within its

existing user base in an efficient manner. The Group believes that the most powerful features of its

consumer monetisation platform are those underpinned by machine-learning algorithms. Through this

predictive modelling method (which statistically analyses potential outcomes of various campaigns),

the Group optimises its marketing campaigns to better identify monetisation opportunities through

price optimisation (which provides customised prices for different users), campaign muting (which

minimises the number of messages in order to optimise effectiveness), and churn prediction (which

predicts when and how likely a user is to leave the Group so the Group can take proactive measures).

The Group’s consumer monetisation platform is a sophisticated predictive platform which uses

contextual messaging to convert, up-sell and cross-sell the Group’s users, targeting users at the most

appropriate moment. The Group believes these messages are minimally intrusive and provide offers

for quality products that add value for the user in the appropriate context. For example, the consumer

monetisation platform will push a message to users who have connected to an unsecure Wi-Fi

network to suggest downloading the Group’s paid VPN products, or warn antivirus users of device

performance issues that could be resolved by downloading the Group’s paid optimisation products.

These messages are applied to the Group’s indirect consumer offerings as well. For example, if a

user were to go to a banking website, a tailored message would appear prompting the user to

download the Group’s secure browser, Avast Secure Browser. The Group continuously tracks and

tests this consumer monetisation system, applying machine-learning to optimise yield.

The combination of the Group’s large user base and powerful consumer monetisation platform

provides the Group with strong monetisation and marketing capabilities for new and existing product

offerings. The Group has been successful in converting, up-selling and cross-selling its wide range of

products and solutions to its user base: as of 31 December 2017, 25% of customers had purchased

more than one Group product, compared to 19% as of 31 December 2015. The Group believes that

up-sells and cross-sells will continue to drive the Group’s growth in the future.

Differentiated and cost-effective user acquisition model

The Group believes its direct sales model promotes a low sales and marketing expense that

distinguishes the Group from competitors in the traditional retail channel or OEM channel. In the

traditional retail channel, antivirus software is promoted through material marketing spend, requiring

fees in the form of slotting, promotions and stocking, in addition to the revenues shared with the

retailer (which can be up to 100%). In the OEM partnership channel, software companies will pay

large fees to OEMs to pre-install their software on equipment. There is generally a large loss of users

who will stop using the pre-installed product upon the expiry of a free trial, and there are fees (often

more than 50%) that are shared with the OEM for revenues from users who opt to continue to use the

product.

By contrast, the Group’s differentiated and cost-effective business model primarily focuses on online

sales with low user acquisition costs. The Group believes that its most effective marketing tool is the

quality of the Group’s free antivirus software: users have positive experiences with these products,

which promotes viral marketing through interactive marketing channels, including through word-of-

mouth recommendations and reviews. At the same time, the Group also maintains low user support

and servicing costs even after successfully acquiring new users, due to its community forum user

support platform. For the Group’s free PC antivirus products, there is a service cost of approximately

$0.02 per free PC antivirus software user per annum for the year ended 31 December 2017. Further,

the Group still generates revenues from these free PC users through indirect monetisation methods.

For the Group’s customers, the Group retains the majority of the revenues it generates. Certain

revenue share agreements with mobile network operators for certain mobile offerings result in a

revenue share of up to 50%. The Group believes that its direct sales model provides strong benefits

as compared to the traditional retail or OEM partnership channels and allows the Group to cost-

effectively scale its business globally.

Highly scalable business model benefitting from significant network effects

The large size of the Group’s user base promotes strong network effects and a continuing cycle of

growth. The Group’s large user base generates large amounts of data with unique insights into their

behaviour, which acts as an input to improve the Group's machine-learning-based technology

platform, including its virus detection capabilities and its consumer monetisation platform. As the

Group’s technology platform improves and successfully protects users, the Group earns more trust

from its users, promoting strong global brand awareness. As the Group’s global brands strengthen,

there is an increase in demand for its products. This increased demand leads, in turn, to more users,

perpetuating the cycle. The Group believes this cycle of growth and the related network effects create

high barriers for new market entrants.

Attractive financial profile with robust cash flow generation and high cash conversion

The Group operates in a large and robust market, which is estimated to have reached $14.5 billion for

the year ended 31 December 2017, and the Group believes the market will reach revenues of $21.3

billion in 2021, according to Group estimates. Within this market, the Group believes it is well-

positioned to grow, given the Group’s history of growth and of increasing its market

share. Furthermore, as the Group continues to expand its product offerings, its total addressable

market is expected to continue to expand to include the markets of such product offerings.

The Group’s business model provides a high level of billings and revenue visibility, driven by a high

proportion of subscription agreements, which are typically paid up front, enhancing the predictability

and visibility of the Group’s future revenue streams. For the year ended 31 December 2017, 88% of

Adjusted Billings excluding Discontinued Business were attributable to subscription agreements,

compared to 83% for the year ended 31 December 2016 and 79% for the year ended 31 December

2015. Revenues are predictable as a result of primarily being driven by prior period billings that were

recorded as deferred revenue to be recognised in future periods, as the revenue from subscription

agreements is recognised on a deferred basis over the life of the agreement, which are typically from

one to three years. Further, 88% of the Group’s consumer direct desktop renewal revenues are from

existing customers auto-renewing their subscriptions.

The Group has established a track record of consistent growth and strong profitability and cash flow

generation. The Group’s Adjusted Revenues increased by $43.0 million on a like-for-like basis from

$736.5 million for the year ended 31 December 2016 to $779.5 million for the year ended 31

December 2017 and increased $16.0 million on a like-for-like basis from $720.5 million for the year

ended 31 December 2015 to $736.5 million for the year ended 31 December 2016. As a technology

company, the Group benefits from low overhead costs, and its primary cost is personnel costs, which

remain low compared to its peers given the location of many of its employees in the Czech Republic,

a relatively low-cost jurisdiction. The Group also maintains a cost efficient distribution model with low

user acquisition costs and low sales and marketing costs compared to competitors.

For the year ended 31 December 2017 Adjusted Cash EBITDA was $451 million which has grown at

a CAGR of 13% over the three years ended 31 December 2017.

The Group also benefits from a high cash conversion profile, resulting from a combination of low

capital expenditure, limited working capital requirements and high margins. The Group had 76% cash

conversion for the year ended 31 December 2017, driven by deferred revenue inflows and its low

capital expenditure requirements.

On a like-for-like basis, the Group had capital expenditures of $15.9 million for the year ended 31

December 2017, $23.7 million for the year ended 31 December 2016 and $26.8 million for the year

ended 31 December 2015.

Experienced management team with a strong track record of execution

The Group’s management team has significant experience in sales, technology, technology product

development and marketing and each member has years of experience in the security software

industry. The Group’s Chief Executive Officer, Vincent Steckler, has been with the Group for nine

years and has worked in the security software industry for over eighteen years. Ondrej Vlcek, the

head of the Group’s Consumer business, has been with the Group for over twenty years. Mr. Steckler,

Mr. Vlcek and the other members of the management team have led the Group through its growth into

the leading global provider of software to consumers, growing both organically and through the

acquisition and integration of AVG, a leading security software company with $418.6 million in

revenue for the year ended 31 December 2016, and Piriform, a leading provider of device

performance optimisation software, in 2017, among other key strategic acquisitions. The Group's

management team has experience working at blue-chip companies such as Google, Apple,

Symantec, General Electric and Netgear, and has been key in attracting and retaining talent from

similar companies. The Group believes that the experience of the Group’s management team has

driven the Group’s strong performance, increasing total users from approximately 100 million in 2009

to more than 435 million in 2017.

Avast Key Business Strategies

Continue to drive direct monetisation by up-selling users to paid premium security products and to

higher tier premium security products

The Group generates revenues from users who upgrade to paid antivirus security products with

advanced functionalities. The Group plans to further differentiate its premium antivirus products from

its free antivirus products in order to continue to drive users toward its paid premium security products

by adding better add-on products to its premium antivirus offerings and by improving its bundling

options for paid antivirus products. Four percent of the Group’s desktop antivirus users were premium

security software customers in the year ended 31 December 2017 (and 96% were free desktop

antivirus users). The Group therefore continues to have a large percentage of its user base which it

can convert to its premium paid security products.

The Group also seeks to directly monetise its user base by continuing to sell existing antivirus

customers higher tier premium security products. The Group has been successful in recent years with

its up-sell campaigns, with average revenue per customer for the Group’s antivirus products

increasing from $43.09 in 2015 to $45.35 in 2017. As only a small portion of the Group’s customers

subscribed to its top-tier products within the Avast and AVG brand offerings as of 31 December 2017,

the Group continues to have a significant opportunity to up-sell the majority of its customers to higher-

tier security offerings.

Continue to drive direct monetisation by successful cross-selling across multiple platforms and

services

As the Group’s user base grows, the Group utilises its consumer monetisation engine, powered by

machine-learning, to effectively push cross-selling campaigns to its users to promote its paid value-

added products. The Group has a proven model of driving success with cross-selling its value-added

non-antivirus solutions in past years, with the portion of the Group’s revenues driven by non-antivirus

solutions increasing from 2015 to 2017. In addition to achieving success in cross-selling to the

Group’s free antivirus users, the Group has also been successful at increasing the average spend of

customers on value-added products. The Group plans to continue to improve the breadth and quality

of its value-added solutions through product innovation and acquisitions, which the Group believes

will further increase its direct monetisation from cross-sales. As the markets grow, the Group believes

it is well-positioned to continue to increase its billings and revenues from such products.

Leverage scale, historical expertise and user data to find new ways of indirect monetisation

The Group has powerful methods by which to indirectly monetise its large user community. The

Group earns revenues through its distribution agreements with Google, one of which was recently

renewed for two years; to promote Chrome downloads, advertising on its free mobile applications,

distribution of promotion codes to drive traffic and user acquisition for online retailers in exchange for

e-commerce affiliate payments, its analytics business and its secure desktop web browser product.

Through these channels, the Group is able to monetise its user base, including its free users, at

different points throughout their relationship with the Group.

The Group plans to specifically focus on continued distribution of third party products as well as

improving its secure web browsing product, e-commerce rewards business and analytics business to

continue to strengthen its success with, and variety of, indirect monetisation methods. On 5 March

2018 the Group began a process by which existing installations of the Group's SafeZone browser

product are being updated globally to the newly launched Avast Secure Browser, the Group's updated

and renamed successor product, which the Group markets together with, and as an extension of, its

online security offerings. The browser is expected to earn the Group a share of advertising revenue

generated by user search activity. The Group also plans to launch an upgrade and successor to its

existing SafePrice e-commerce affiliate product, offering improved discounts or rebates to users

during their online shopping activities through a browser plugin or mobile application. The Group

earns revenues reflecting the value that retailers receive in the form of increased traffic, user

acquisition and sales. Further, the Group intends to continue to grow its analytics business,

Jumpshot, to enhance its brand recognition to be able to target business partners on a larger scale.

As the business receives greater volumes of anonymised data and inputs which it can aggregate and

analyse, the Group believes it will continue to become more valuable and attractive to market

research firms, advertising agencies and consumer brands.

Achieve product innovation to continually improve its product offerings

The Group has a strong portfolio of existing products to improve PC and mobile security, privacy and

performance. The Group seeks to more deeply penetrate this market by continuing to innovate and

improve upon its offerings, leveraging the Group’s large global footprint and customer understanding

to feed its product innovation pipeline. The Group believes that its strong focus on R&D, which

accounts for over 45% of its permanent employees, will help the Group implement this strategy and

continue to improve its offerings. Further, the Group’s employees are based in the Czech Republic,

which the Group believes is a benefit not only for its cost efficient model but also for its welcoming

environment for innovation: the Czech Republic was identified as one of the top ten most innovative

countries in the Consumer Technology Association’s 2018 International Innovation Scorecard.

The Group’s near-term product pipeline includes new and updated products such as anti-tracking

products, parental controls, identity theft monitoring and Smart Home security, among others. The

Group also plans to continue to improve its SMB offerings to expand its market share in that sector

and drive growth.

The Group plans to release its first Smart Home security product in 2018. The Group believes that

this market will continue to come into increasing user focus as IoT growth increases. Smart Home

devices are complex with high threats to privacy, potentially worse than those threats to PCs, as once

a hacker breaks into the network through its weakest link (i.e., a Smart Home product), that hacker

could gain access to all devices on that network, resulting in a greater potential for harm. To enter the

Smart Home security market, the Group plans to market to its existing users using its consumer

monetisation platform. It will also focus on a partnership model with internet service providers, with

the potential to also partner with OEMs to offer its products direct to consumers pre-installed on Smart

Home equipment.

In addition, the Group plans to release a new anti-tracking product which, similarly to its VPN

products, will protect users’ privacy online. The anti-tracking product will shield users’ internet

browsing by masking a user’s location, detecting threats, scheduling browser cleanings and allowing

private searching and browsing. The Group will also offer a new free service to monitor whether users

have been hacked or had their personal details stolen online, providing regular alerts and reports.

This hack checking service will allow the Group to establish regular communications with users, which

will include product promotions for the purpose of up-selling and cross-selling. Further, the Group also

plans to finalise a new parental control innovation which will increase the variety of functionalities as

compared to its existing offering, such as location tracking and smart alerts. The Group intends to

market this parental control offering both on a direct-to-consumer basis and to consumers through

mobile carriers and internet service providers as intermediaries.

Continue strong track record of successful acquisitions

The Group strategically seeks out acquisitions that will consolidate the market and grow the Group’s

scale and market share, such as the acquisition of AVG in 2016. The Directors recognised that AVG

was very similar to the Group in terms of its product offerings, culture and strategy: it offered a free

consumer PC antivirus product, with a business model focused on converting free users to paid

products, and had its main office in the Czech Republic. The Group believed the two businesses

would integrate well, increasing the scale of the Group, expanding its product offerings and creating

significant synergies and cost savings compared to running the two as separate entities. The

acquisition of AVG brought approximately 141 million new users to the Group’s user base, and, by

combining the two businesses, the Group expects to over-deliver by approximately $10 million on the

Group’s original cost synergy projections of $118 million, in particular related to payroll cost

reductions in the Czech Republic and the U.S. The Group continues to monitor the market for any

other similar security companies which it could acquire to increase its scale.

The Group also believes that there is value in acquiring well-recognised companies and brands that

will increase its distribution network and user base. The addition of new product lines and offerings

increases the Group’s functionalities and ability to sell adjacent products to its users, while also

increasing its total addressable market. For example, the Group acquired Piriform (including its main

brand, CCleaner) in 2017. The Group sought out this acquisition because it added a compatible

optimisation product through CCleaner and brought with it a significant number of users who did not

already use Avast or AVG products to whom the Group could cross-sell. As of the date of the

acquisition, of CCleaner’s approximately 90 million users, approximately 79% (or 71 million users) did

not yet use any Group products as of 31 December 2017. In addition, CCleaner was seen as a well-

regarded product with strong brand recognition which the Group could cross-sell to its existing users.

The Group continues to monitor the market for other complementary businesses focused on adjacent

products which it could acquire to increase its distribution.

The Group has a strong track record in diversifying its business and expanding its product breadth in

recent years through acquisitions. The Group acquired a small PC optimisation company in 2013 and

launched its first organic PC optimisation product, Avast Cleanup, in 2014. Also in 2014, AVG

acquired Location Labs to enter the parental controls market. These acquisitions, among others,

allowed the Group to broaden its offerings and focus more on cross-selling its value added products,

such as its VPN and PC Cleaner, to its users. The Group plans to continue to seek out opportunities

for acquisitions that will diversify its product offerings, and in turn, grow the size of its total

addressable market.

Avast's Financial Track Record

The Group – Consolidated Income Statement Data

Group

Year ended 31 December

2015

2016

2017

(in $ millions)

Revenues ...........................................................................................................

251.0

340.7

652.9

Cost of revenues .................................................................................................

(72.8)

(112.1)

(232.8)

Gross profit .......................................................................................................

178.2

228.6

420.1

Operating costs:

Sales and marketing ........................................................................................

(29.0)

(59.6)

(121.4)

Research and development ..............................................................................

(23.7)

(46.8)

(75.5)

General and administrative ..............................................................................

(25.9)

(90.3)

(98.9)

Total operating costs ...........................................................................................

(78.6)

(196.7)

(295.8)

Operating profit (loss) .......................................................................................

99.6

31.9

124.3

Analysed as:

Underlying Operating Profit

165.7

183.8

299.7

Share-based payment ..........................................................................................

(6.1)

(2.7)

(7.7)

Exceptional items................................................................................................

(0.8)

(69.8)

(34.8)

Amortisation of acquisition intangible items .........................................................

(59.2)

(79.4)

(132.9)

Finance income and expenses, net ........................................................................

(27.9)

(12.4)

(153.2)

Profit (loss) before income tax ...........................................................................

71.7

19.5

(28.9)

Income tax .....................................................................................................

(0.2)

5.1

(4.9)

Profit (loss) for the financial year ......................................................................

71.5

24.6

(33.8)

The Group – Consolidated Cash Flow Data

Year ended 31 December

2015

2016

2017

(in $ millions)

Net cash flows from operating activities..................................................................................

202.3

224.6

306.5

Net cash used in investing activities ........................................................................................

(30.5)

(1,250.0)

(173.8)

Net cash used in financing activities .......................................................................................

(154.3)

1,124.9

(193.7)

Cash and cash equivalents at end of period .........................................................................

141.2

240.7

176.3

There has been no significant change in the financial or trading position of the Group since 31

December 2017.

Board of Directors

John Schwarz, Independent Chairman

Mr. Schwarz has served as one of the Group’s Directors since December 2011 and as Chairman of

the Group since January 2014. Mr. Schwarz will be the Independent Chairman of the Company at

Admission. Since May 2010, Mr. Schwarz has served as co-founder and Chief Executive Officer of

Visier Inc., a business analytics software firm. Mr. Schwarz joined SAP AG through its acquisition of

Business Objects S.A. in January 2008 and served on the executive board of SAP from March 2008

to February 2010, where he led the successful integration of the two companies. From September

2005 until 2010, Mr. Schwarz was the Chief Executive Officer of Business Objects S.A., later SAP

Business Objects, a provider of business intelligence software and services that was acquired by SAP

in January 2008. Before joining Business Objects, Mr. Schwarz served as President and Chief

Operating Officer of Symantec Corporation from December 2001 to September 2005. Prior to joining

Symantec, from January 2000 to November 2001, Mr. Schwarz served as President and Chief

Executive Officer of Reciprocal Inc., which provided business-to-business secure e-commerce

services to the media industry. Before joining Reciprocal, Mr. Schwarz spent 25 years at IBM

Corporation, working in various development, manufacturing, sales and marketing roles. His last

position was general manager of IBM's Industry Solutions unit, a worldwide organisation focused on

building business applications and related services for IBM's large industry customers. Mr. Schwarz

currently serves as a director of Synopsys, Inc. and Teradata, Inc. in addition to his role as an advisor

to Dalhousie University in Halifax, Nova Scotia. Mr. Schwarz holds a B.S. in Computer Science from

the University of Manitoba, a Diploma in Business Administration from the University of Toronto, and

an honorary Ph.D. from Dalhousie University.

Vincent Steckler, Chief Executive Officer

Mr. Steckler has served as Chief Executive Officer and Director of the Group since January 2009.

Prior to joining the Group, Mr. Steckler was the Senior Vice President of Worldwide Consumer Sales

at Symantec Corporation, where he was in charge of multi-channel international consumer sales

valued at $2.0 billion. Mr. Steckler joined Symantec in 2000 as Vice President of Public Sector

Business and started Symantec's business of serving U.S. local, state and federal governments. Mr.

Steckler also served over two years as Symantec’s Vice President for Asia Pacific and Japan and

was responsible for all enterprise and consumer business in that region. Prior to joining Symantec,

Mr. Steckler had 20 years of experience in software development, systems analysis and engineering,

project management, and business development. Mr. Steckler holds two B.S.’s from the University of

California, Irvine, one in Mathematics and the other in Information and Computer Science.

Philip Marshall, Chief Financial Officer

Mr. Marshall has served as the Chief Financial Officer since February 2018. Prior to joining the

Group, Mr. Marshall was the Chief Financial Officer and Board Member at Exova Group plc from 2015

to 2017. Mr. Marshall was a Non-Executive Director and Audit Committee Member at PhotonStar LED

plc from 2013 to 2016 and Chief Financial Officer and Board Member at Wood Mackenzie from 2014

to 2015. Prior to this, Mr. Marshall worked at General Electric from 1996 to 2013. He also currently

serves as a Supervisory Board and Audit Committee Member at Waberer’s International. Mr. Marshall

holds a BA in Accounting Studies from University of West London.

Ondrej Vlcek, Executive Vice President and General Manager, Consumer, & Chief Technology

Officer

Mr. Vlcek serves as the Group's EVP and GM for the Consumer business and CTO, leading the

largest business at Avast. Through his strategies and vision, Mr. Vlcek has architected the Group's

cloud based security network for the newly announced IoT security solutions and has led his team to

significant growth. Serving as the Group’s CTO since 2009, Mr. Vlcek has pioneered Avast's

transformation from a traditional PC antivirus vendor into the leading provider of next-gen security

solutions it is today. In 2003, Mr. Vlcek became a chief developer at Avast and led the team that

developed one of the first antivirus programs for Windows. Mr Vlcek holds an MS in Mathematics from

Czech Technical University in Prague.

Pavel Baudiš, Non-Executive Director

Mr. Baudiš is one of the Group’s co-founders and has served as a Director of the Group since the

incorporation of Avast Software a.s. in December 2006. Mr. Baudiš will be a Non-Executive Director

of the Company at Admission. In 1988, Mr. Baudiš wrote the original program from which the Group’s

portfolio of products is generated. Since 1991, Mr. Baudiš has played a leading role in the

development of the Group’s business with its predecessor entity, ALWIL Software partnership. Prior

to co-founding Avast, Mr. Baudiš was a graphics specialist at the Czech Computer Research Institute

(VUMS). Mr. Baudiš holds an M.S. in Information Technology from the Prague School of Chemical

Engineering.

Eduard Kučera, Non-Executive Director

Dr. Kučera is one of the Group’s co-founders and has served as a Director of the Group from the

incorporation of Avast Software a.s. in December 2006, including as Chairman from January 2007 to

February 2014. Dr. Kučera will be a Non-Executive Director of the Company at Admission. Since

1991, Dr. Kučera was responsible for the activities of the Group’s predecessor entity, ALWIL Software

partnership. From 1991 to 2009, Dr. Kučera served as Chief Executive Officer of the Group, directing

day-to-day operations that included the transition to a free software distribution model in 2002. Prior to

co-founding the Group, Dr. Kučera was a computer hardware specialist at the Czech Computer

Research Institute (VUMS). Dr. Kučera holds a doctorate in experimental physics from the Charles

University in Prague.

Lorne Somerville, Non-Executive Director

Mr. Somerville has been one of the Group’s Directors since 2014. Mr. Somerville will be a Non-

Executive Director of the Company at Admission. Mr. Somerville is Co-Head of the Strategic

Opportunities Fund and Head of the CVC Telecommunications Media and Technology team. He is

based in London. Prior to joining CVC, he worked for UBS where he was Joint Global Head of

Telecommunications and Head of the European Communications Group, and Swisscom AG as Head

of Swisscom International. Mr. Somerville holds an MA in Computer Sciences from the University of

Cambridge and an MBA from IMD, Lausanne.

Warren Finegold, Senior Independent Non-Executive Director

Mr. Finegold has been one of the Group’s Directors since February 2015. Mr. Finegold will be the

Senior Independent Director of the Company at Admission. Mr. Finegold retired from the Vodafone

Group Executive Committee in June 2016 having served for 10 years, most recently as Group

Business Development Director. He had previously served as Group Strategy and Business

Development Director and CEO Global Business Development. While a member of the Executive

Committee, Mr. Finegold was responsible for strategy, business development, mergers and

acquisitions and partner networks. From 1985 to 1995, he was an Executive Director at Goldman

Sachs International in New York and London. From 1996 to 2006, he served as a Managing Director

of UBS Investment Bank and head of its technology team in Europe. He has been a Member of

Supervisory Board at VodafoneZiggo Group B.V. since 31 December 2016. He has been an

Independent Non-Executive Director at Inmarsat plc since August 2017. He has been a Non-

Executive Director at UBM plc since 19 May 2017 and its Senior Independent Director since February

2018. Mr. Finegold holds a M.A. in Philosophy, Politics and Economics from Oxford University and a

Masters degree in Business Administration from London Business School.

Ulf Claesson, Independent Non-Executive Director

Mr. Claesson has been one of the Group’s Directors since October 2012. Mr. Claesson will be an

Independent Non-Executive Director of the Company at Admission. Since 2009, Mr. Claesson has

served as a Partner at BLR & Partners AG, a private equity firm in Zurich, Switzerland where he

advises technology companies and investors. In addition, since 1997, Mr. Claesson has served as

founder and Managing Director of Whitecap GmbH and Whitecap LLP. From 2006 to 2009, Mr.

Claesson served as General Manager and Vice President at Hewlett-Packard Corporation. Prior to

founding Whitecap in 1997, Mr. Claesson worked for 20 years at IBM Corporation serving in various

engineering, sales, management and director positions. Mr. Claesson currently serves as a member

of the Board of Directors of AO InvestAG, the President of Board and Director at BlankPage AG and a

member of the board of the Swiss Federal Commission for Innovation and Technology. He is also a

lecturer at the Swiss Federal Institute of Technology in Zurich. Mr. Claesson holds a M.Sc. from

Chalmers University of Technology.

Erwin Gunst, Independent Non-Executive Director

Mr. Gunst has been one of the Group’s Directors since October 2012. Mr. Gunst will be an

Independent Non-Executive Director of the Company at Admission. From July 2008 to March 2010,

Erwin served as Chief Operating Officer and a Member of the Executive Board of SAP AG where he

was responsible for global operations, information technology, human resources and the

management of all SAP Labs worldwide. From October 2004 to July 2008, Erwin served as a

Corporate Officer of SAP AG and President of Customer and Solutions Operations for Europe, the

Middle East and Africa. From 1988 to 2004, Erwin served in a variety of positions with SAP, including

Managing Director of SAP AG subsidiaries in Belgium, Switzerland and the United Kingdom. Erwin

holds a M.S. degree in Commercial Engineering from the Free University (Solvay) in Brussels,

Belgium.

The Group does not expect the Company to comply with the full provisions of the UK Corporate

Governance Code (the " Governance Code") in respect of composition of the Board by the date of

Admission. However, the Group believes this will not have an impact on the Group’s governance in

practice and intends to achieve full compliance with the Governance Code over time and will update

the market in due course.

Important Notice

The contents of this announcement, which has been prepared by and is the sole responsibility of Avast Holdings, have been

approved by Morgan Stanley & Co. International plc (“Morgan Stanley”) and UBS Limited (“UBS Investment Bank”) solely for

the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 as amended (“FSMA”).

The information contained in this announcement is for background purposes only and does not purport to be full or complete.

No reliance may be placed by any person for any purpose on the information contained in this announcement or its accuracy,

fairness or completeness.

Avast Holdings has included non-GAAP and non-IFRS financial measures in this announcement (including Adjusted Billings,

Adjusted Revenue and Adjusted Cash EBITDA, among others) which have not been and will not be audited. These non-GAAP

and non-IFRS financial measures are not recognised measures of financial performance or liquidity under UK GAAP or IFRS,

but are measures used by the Group's management to monitor the underlying performance of the Group's business and

operations. These non-GAAP and non-IFRS measures may not be indicative of the Group's historical operating results nor are

such measures meant to be predicative of future results. These measurements may not be comparable to those of other

companies under the same or similar names. Reference to these non-GAAP and non-IFRS financial measures should be

considered in addition to GAAP and IFRS financial measures, but should not be considered а substitute for results that are

presented in accordance with GAAP or IFRS.

Neither this announcement, nor the information contained herein is for publication, distribution or release, in whole or in part,

directly or indirectly, in or into the United States (including its territories and possessions, any State of the United States and the

District of Columbia), Australia, Canada or Japan, including to any branch or agency of a non-US person located in the United

States, or in any other jurisdiction where to do so could constitute a violation of the relevant laws of such jurisdiction. Any failure

to comply with this restriction may constitute a violation of United States, Australian, Canadian, Japanese or other securities

laws. The Offer and the distribution of this announcement and other information in connection with Admission and the Offer in

other jurisdictions may be restricted by law and persons into whose possession any document or other information referred to

herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions

may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy, or subscribe for, Shares to

any person in the United States (including its territories and possessions, any State of the United States and the District of

Columbia), Australia, Canada or Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The

Shares referred to herein may not be offered or sold, directly or indirectly, in the United States unless registered under the US

Securities Act or offered in a transaction exempt from, or not subject to, the registration requirements of the Securities Act. The

Offer and sale of Shares referred to herein has not been and will not be registered under the Securities Act or with any

regulating authority or under any applicable securities laws of any state or other jurisdiction of the United States or under the

applicable securities laws of Australia, Canada or Japan. Subject to certain exceptions, the Shares referred to herein may not

be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of

Australia, Canada or Japan. There will be no public offer of the Shares in the United States, Australia, Canada or Japan or in

any other jurisdiction where to do so could be unlawful.

In member states of the European Economic Area (“EEA”) (each, a “Relevant Member State”), this announcement and any

offer if made subsequently is only addressed to and directed at persons who are “qualified investors” within the meaning of

Article 2(1)(e) of the Prospectus Directive (“Qualified Investors”). For these purposes, the expression “Prospectus Directive”

means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented

in a Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the

expression “2010 PD Amending Directive” means Directive 2010/73/EU. In the United Kingdom this announcement is

exclusively addressed to and directed at Qualified Investors who are (i) persons who have professional experience in matters

relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order

2005, as amended (the “Order”); (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order; or (iii) other persons

to whom it can otherwise lawfully be distributed (each a “Relevant Person”). This announcement must not be acted or relied

upon by persons other than Qualified Investors in any member state of the EEA other than the United Kingdom and Relevant

Persons in the United Kingdom and any investment or investment activity or controlled investment or controlled activity to which

this presentation relates will only be available to such persons and will be engaged in only with such persons.

This announcement contains historical market data that has been obtained or derived from industry publications, market

research and other publicly available information. Certain information regarding market size, market share, market position,

growth rate and other industry data pertaining to the Group and its business contained in this announcement consist of

Directors' estimates and conclusions based on their review of internal Group data, external third-party data, reports compiled by

professional organisations and other sources.

This announcement includes statements that are, or may be deemed to be, “forward-looking statements”. These forward-

looking statements may be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”,

“plans”, “projects”, “anticipates”, “expects”, “intends”, “may”, “will” or “should” or, in each case, their negative or other variations

or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking

statements may and often do differ materially from actual results. Forward-looking statements include all matters that are not

historical facts and involve predictions, and include statements regarding: objectives, goals, strategies, outlook and growth

prospects; future plans, events or performance and potential for future growth; contracted revenues, committed revenues,

liquidity, capital resources and capital expenditures; economic outlook and industry trends; developments of the Group’s

markets; and the strength of the Group’s competitors. In particular, statements in this announcement regarding expectations in

respect of the Group’s Adjusted Billings, Adjusted Revenue, Adjusted Cash EBITDA, revenue or capital expenditure, as well as

other expressions of the Group’s targets and expectations, should be considered forward-looking statements. Such statements

may differ materially from the Group’s actual results. These expectations and estimates are based on a number of

assumptions, which are inherently subject to significant business, operational, economic and other risks, many of which are

outside of the Group’s control. Accordingly, such assumptions may not materialise at all. Any forward-looking statements,

including the Group’s medium term objectives, reflect the Group’s current view with respect to future events and are subject to

risks relating to future events and other risks, uncertainties and assumptions relating to the Group’s business, results of

operations, financial position, liquidity, prospects, growth or strategies and the industry in which the Group operates. In

particular, such factors include, but are not limited to, changes in economic conditions, the Group’s competitive environment,

the Group’s relationship with customers, the Group’s ability to execute its strategy, the legislative or regulatory regimes under

which the Group operates, or the taxation regime applicable to the Group, as well as other factors within and beyond the

Group’s control that may affect its operations or planned strategies and operational initiatives. As a result, the Group’s actual

results may vary from the medium term objectives established herein and those variations may be material. Forward-looking

statements speak only as of the date they are made and cannot be relied upon as a guide to future performance.

Each member of the Group, the Banks and their respective affiliates expressly disclaims any obligation or undertaking to

update, review or revise any forward looking statement contained in this announcement whether as a result of new information,

future developments or otherwise, subject, in the case of the Group and its affiliates, as required by law or regulation.

Each of Morgan Stanley, UBS Investment Bank, Barclays Bank Plc, Credit Suisse Securities (Europe) Limited, Jefferies

International Limited, Merrill Lynch International, and Keybanc Capital Markets Inc. (together, the “Underwriters”) and N M

Rothschild & Sons Limited (“Rothschild” or the “Financial Adviser” and together with the Underwriters, the “Banks”), are acting

exclusively for the Group and no-one else in connection with the Offer. They will not regard any other person as their respective

clients in relation to the Offer and will not be responsible to anyone other than the Group for providing the protections afforded

to their respective clients, nor for providing advice in relation to the Offer, the contents of this announcement or any transaction,

arrangement or other matter referred to herein. Morgan Stanley and UBS Investment Bank are authorised by the Prudential

Regulation Authority (“PRA”) and regulated by the FCA and the PRA in the United Kingdom. Rothschild is authorised and

regulated by the FCA in the United Kingdom.

This announcement is an advertisement for the purposes of the UK Prospectus Rules of the FCA and not a prospectus.

Investors should not subscribe for or purchase any transferable securities referred to in this announcement except on the basis

of information in the Prospectus intended to be published by the Company in due course in connection with the proposed

admission of its Shares to the premium listing segment of the Official List of the FCA and to trading on the main market of the

London Stock Exchange. Copies of the Prospectus will, following its publication, be available from the Group's website at

www.avast.com. Any purchase of Shares in the proposed Offer should be made solely on the basis of the information

contained in the final Prospectus to be issued by the Company in connection with the Offer and Admission. Before investing in

the Shares, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set

out in the Prospectus when published. The information in this announcement is for background purposes only and does not

purport to be full or complete. No reliance may be placed by any person for any purpose on the information contained in this

announcement or its accuracy or completeness. This announcement does not constitute or form part of any offer or invitation to

sell or issue, or any solicitation of any offer to purchase or subscribe for any Shares or any other securities nor shall it (or any

part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor. The

information in this announcement is subject to change.

The IPO timetable, including the date of Admission, may be influenced by a range of circumstances such as market conditions.

There is no guarantee the Offer and/or that Admission will occur and you should not base your financial decisions on the

Group’s intentions in relation to the Offer and Admission at this stage. Acquiring investments to which this announcement

relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making such

investments should consult an authorised person specialising in advising on such investments. This announcement does not

constitute a recommendation concerning the Offer. The value of the Shares can decrease as well as increase. Potential

investors should consult a professional advisor as to the suitability of the Offer for the person concerned. Past performance

cannot be relied upon as a guide to future performance.

In connection with the Offer of the Shares, each of the Underwriters and any of their affiliates, acting as investors for their own

accounts, may take up a portion of the Shares in the Offer as a principal position and in that capacity may retain, purchase, sell,

offer to sell or otherwise deal for their own accounts in such Shares and other securities of the Company or related investments

in connection with the Offer or otherwise. Accordingly, references in the Prospectus, once published, to the Shares being

issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or

subscription, acquisition, placing or dealing by, the Underwriters and any of their affiliates acting in such capacity. In addition,

the Underwriters and any of their affiliates may enter into financing arrangements (including swaps or contracts for differences)

with investors in connection with which the Underwriters and any of their affiliates may from time to time acquire, hold or

dispose of Shares. None of the Underwriters nor any of their respective affiliates intend to disclose the extent of any such

investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

None of the Banks nor any of their respective affiliates or any of their respective directors, officers, employees, advisers or

agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to

the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from

the announcement) or any other statement made or purported to be made by it, or on its behalf, in connection with the

Company, Avast Holdings, the Shares or the Offer or any other information relating to the Company, Avast Holdings, its

subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or

made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in

connection therewith. Each of the Banks and each of their respective affiliates accordingly disclaim, to the fullest extent

permitted by applicable law, all and any liability whether arising in tort, contract or otherwise which they might otherwise be

found to have in respect of this announcement or any such statement or information. No representation or warranty express or

implied, is made by any of the Banks or any of their respective affiliates as to the accuracy, completeness, verification or

sufficiency of the information set out in this announcement, and nothing in this announcement will be relied upon as a promise

or representation in this respect, whether or not to the past or future.

In connection with the Offer, Morgan Stanley, as stabilisation manager, or any of its agents, may (but will be under no obligation

to), to the extent permitted by applicable law, over-allot Shares or effect other transactions with a view to supporting the market

price of the Shares at a higher level than that which might otherwise prevail in the open market. Morgan Stanley is not required

to enter into such transactions and such transactions may be effected on any stock market, over-the-counter market, stock

exchange or otherwise and may be undertaken at any time during the period commencing on the date of the commencement of

conditional dealings of the Shares on the London Stock Exchange and ending no later than 30 calendar days thereafter.

However, there will be no obligation on Morgan Stanley or any of its agents to effect stabilising transactions and there is no

assurance that stabilising transactions will be undertaken. Such stabilising measures, if commenced, may be discontinued at

any time without prior notice. In no event will measures be taken to stabilise the market price of the Shares above the offer

price. Save as required by law or regulation, neither Morgan Stanley nor any of its agents intends to disclose the extent of any

over-allotments made and/or stabilisation transactions conducted in relation to the Offer.

In connection with the Offer, Morgan Stanley as stabilisation manager, may, for stabilisation purposes, over-allot Shares up to a

maximum of 15% of the total number of Shares comprised in the Offer. For the purposes of allowing it to cover short positions

resulting from any such over-allotments and/or from sales of Shares effected by it during the stabilisation period, Morgan

Stanley will enter into over-allotment arrangements pursuant to which Morgan Stanley may purchase or procure purchasers for

additional Shares up to a maximum of 15% of the total number of Shares comprised in the Offer (the “Over Allotment Shares”)

at the offer price. The over-allotment arrangements will be exercisable in whole or in part, upon notice by Morgan Stanley, at

any time on or before the 30th calendar day after the commencement of conditional trading of the Shares on the London Stock

Exchange. Any Over-allotment Shares made available pursuant to the over-allotment arrangements, including for all dividends

and other distributions declared, made or paid on the Shares, will be purchased on the same terms and conditions as the

Shares being issued or sold in the Offer and will form a single class for all purposes with the other Shares.

Certain figures contained in this announcement, including financial information, have been subject to rounding adjustments.

Accordingly, in certain instances, the sum or percentage change of the numbers contained in this announcement may not

conform exactly with the total figure given.

Information to Distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in

financial instruments, as amended (“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593

supplementing MiFID II; and (c) local implementing measures (together, the “MiFID II Product Governance Requirements”), and

disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the p urposes of the

MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Shares have been subject to a

product approval process, which has determined that such Shares are: (i) compatible with an end target market of retail

investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and

(ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the “Target Market Assessment”).

Notwithstanding the Target Market Assessment, distributors should note that: the price of the Shares may decline and investors

could lose all or part of their investment; the Shares offer no guaranteed income and no capital protection; and an investment in

the Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in

conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment

and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is

without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Offer.

Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Underwriters will only procure investors who

meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or

appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or

purchase, or take any other action whatsoever with respect to the Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Shares and determining

appropriate distribution channels.