basware’s interim report q2/2014/media/files/b/... · •basware signed eur 2.8 million global...

BASWARE’S INTERIM REPORTQ2/2014

Esa Tihilä, CEO

Mika Harjuaho, CFO

July 10, 2014

Basware’s Interim Report Q2/2014

Contents

• Business review of Q2/2014

• Financial review of Q2/2014

• Future outlook


BUSINESS REVIEWQ2/2014

Esa Tihilä, CEO


Key events in Q2/2014

• Network Services net sales grew; strong growth of transaction volume continued

• Alusta sales developed promisingly; more Alustadeployments during the quarter than ever before

• International net sales and international share of net sales grew

• Profit-making ability improved; fixed costs decreased by 6.7 %

• Basware signed EUR 2.8 million global e-invoicing services agreement in the U.S. with a leading oil & gas company

• New research on e-invoicing & Purchase to Pay markets: the volume of e-invoices grown significantly in Europe and globally, global market penetration is approximately 10 %


Share of recurring

revenue increased to

66.5 % of net sales

(61.6 %)

• Net sales EUR 31 833 thousand (EUR

31 789 thousand), +0.1 percent

0300060009000

120001500018000210002400027000300003300036000

Q1/11 Q1/12 Q1/13 Q1/14 Q2/11 Q2/12 Q2/13 Q2/14 Q3/11 Q3/12 Q3/13 Q4/11 Q4/12 Q4/13

• Operating profit EUR 1 152 thousand

(EUR 908 thousand), +26.9 percent

Net sales

EUR thousand

Q2/2014 key financials

Q2/2014 in brief: Operating profit grew by 26.9

percent during the second quarter

• Network Services net sales +12.7 % and Solution

Services net sales -3.5 %

• 18.7 million transactions processed through

Basware Commerce Network, +8.5 % from previous

quarter (17.2 million)

• International net sales grew by +2.5 % and the

international share of net sales was 60.4 % (59.0 %)

• Share of recurring revenue of net sales grew, totaling to

66.5 % (61.6 %) of net sales

• EBITDA amounted to EUR 2 896 thousand (EUR 2 663

thousand), +8.8 %


Transaction volume

amounted to 18.7

million, up +29.0 %

0,01,02,03,04,05,06,07,08,09,0

10,011,012,013,014,015,016,017,018,019,020,0

Q1 Q2 Q3 Q4

2010 2011 2012 2013 2014Million

transactions

The transaction volume

was 18.7 million during

the quarter, growth of

29.0 %

Growth of transaction volumes 2010-Q2/2014



Share of recurring revenue, rolling 12 months average

EUR thousand

Net sales

Share of recurring

revenue, rolling 4

quarters average

The share of

recurring revenue of

net sales increased

to 66.5 % (61.6 %)

during the quarter

35,0 %

40,0 %

45,0 %

50,0 %

55,0 %

60,0 %

65,0 %

70,0 %

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000


SaaS versus license sales dynamics 2007-H1/2014

0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

90 %

100 %

2007 2008 2009 2010 2011 2012 2013 H1/2014

SaaS

License Sales

FINANCIAL REVIEWQ2/2014

Mika Harjuaho, CFO


• Basware reports one operating segment: Purchase to Pay, P2P. The segment

is divided into the Network Services and Solution Services businesses that

support each other.

• As of 2014, the company reports revenue from products and services as

follows: Network Services (e-invoicing solutions and services) and Solution

Services (software solutions and services).*

• As previously, Customer Support and Automation Services together form the

recurring revenue reported by the company.

• As geographic information Basware reports geographical areas Finland,

Scandinavia, rest of Europe, and Other. Net sales are reported by the

customer’s location, and net sales and operating profit are also reported by

the location of the assets.


Reporting (IFRS)

*Revenue reported also according to the previous reporting practice: License sales,

Professional Services, Customer Support, and Automation Services

20 000

30 000

40 000

Q1 Q2 Q3 Q4

2014 2013

EUR thousand Q1/14 Q1/13 Q2/14 Q2/13 Q3/14 Q3/13 Q4/14 Q4/13

Net sales 31 013 29 828 31 833 31 789 28 682 33 049

Growth % 4.0% 8.7% 0.1% 10.7% 5.8% 8.6%

Other operating income 177 58 26 1 623 61 173

Materials and services 2 978 2 542 3 057 2 987 2 967 3 265

Personnel expenses 20 078 20 518 19 561 20 611 16 464 19 327

Depreciation and amortization 1 789 1 801 1 744 1 755 1 748 1 748

Other operating expenses 6 034 6 594 6 345 7 152 5 703 6 751

Operating result 310 -1 569 1 152 908 1 861 2 131

24%

26%23%

27%

Net sales 2013

Q1 Q2 Q3 Q4

Net sales


Development of quarterly net sales & profit

8 066

23 768 Network Services

Solutions Services

Network Services & Solution Services:

net sales in Q2/2014

• Network Services: e-invoicing solutions and services

• Solution Services: software solutions and services


EUR thousand

(24 636, -3.5 %)

(7 154, +12.7 %)

R&D in H1/2014

R&D expenses 14.4 % of net sales

21.9 % of personnel


R&D expenses amounted to EUR

9 027 thousand (EUR 9 468

thousand):

• Decrease of 4.7 percent, 14.4 % of

net sales (15.4 %)

• EUR 1 784 thousand (EUR

2 508 thousand) of R&D expenses

capitalized

• R&D costs included in the P&L

totaled EUR 7 243 thousand (EUR

6 960 thousand), or 11.5 % (11.3

%) of net sales

R&D unit personnel 320 (350):

• 145 (151) people in India; units

also in Finland, Romania and

Belgium

Personnel

0

200

400

600

800

1000

1200

1400

Q1/1

0

Q2/1

0

Q3

/10

Q4/1

0

Q1/1

1

Q2/1

1

Q3/1

1

Q4/1

1

Q1/1

2

Q2/1

2

Q3/1

2

Q4/1

2

Q1/1

3

Q2/1

3

Q3/1

3

Q4/1

3

Q1

/14

Q2/1

4

Sales & Marketing

Consulting & Services

Products

Admin

Personnel groups

Finland

Rest of Europe

India

Other

Geographical location of personnel

Scandinavia


• 1 459 employees at the end of Q2/2014

• Average age of personnel is 34.7 years;

48.6% have an academic degree

• 67.0 % in APAC & India, Europe and Northern

America; 33.0 % in Finland

EUR million Q2/14 Q2/13

Net sales 31.8 31.8

Growth of net sales, % 0.1% 10.7%

Operating profit (EBIT) 1.2 0.9

% of net sales 3.6% 2.9%

Net profit 0.8 0.4

Share of recurring revenue, % 66.5 61.6%

Earnings per share, euro 0.06 0.03

Fixed costs 25.9 27.8

Change of fixed costs, % -6.7% 15.6%

Personnel, June 30 1 459 1 498

Change in personnel, % -2.6 13.2

Personnel costs 19.6 20.6

R&D expenses, H1 9.0 9.5


EBITDA amounted to

EUR 2 896 thousand

(EUR 2 663 thousand),

an increase of 8.8 %

Q2/2014 in brief

Finance & investments


• Total assets on the balance sheet EUR 136 027 thousand(EUR 143 158 thousand)

• Cash and liquid assets EUR 19 954 thousand (EUR 22 917 thousand)

• Cash flows from

– Operating activities EUR 13 558 thousand (EUR 9 268 thousand)

– Investments EUR -2 093 thousand (EUR -17 333 thousand)

– Financing EUR -4 765 thousand (EUR -3 080 thousand)

• Equity ratio 70.5 percent (66.9 %)

• Gearing -13.7 percent (-13.0 %)

• Total gross investments EUR 2 707 thousand (EUR 18 507 thousand)

– includes capitalized R&D expenses and acquisitions

Share & shareholders

• Number of shareholders 13 840 (14 097) at the end of June 2014

• Share price development during January-June 2014:

• Highest EUR 41.00 (EUR 21.69), lowest EUR 23.50 (EUR 16.75)

• Closing price EUR 38.55 (EUR 17.60)

• Average price of the share EUR 34.31 (EUR 19.88)

• Traded shares 3 111 870 (490 244)

• 24.2 % (3.8%) of all shares

• Market capitalization EUR 495 615 222 (EUR 226 133 970)


FUTURE OUTLOOK

Esa Tihilä, CEO


Basware is a leading P2P solution provider

based on Forrester Research, Inc.

The Forrester Wave™: eProcurement, Q2 2014 Report

Forrester cites Basware as a leader in

procure-to-pay (P2P) automation platforms:

• Largest independent eProcurement vendor

• One of the largest networks in terms of

transaction volume and value going

through it

• Excels in invoice automation

• Pioneer in network interoperability

• Solid Alusta eProcurement platform

• Excellent support for global enterprises

The Forrester Wave™ is copyrighted by Forrester Research, Inc. Forrester and Forrester Wave are trademarks of Forrester Research, Inc. The Forrester Wave is a graphical

representation of Forrester's call on a market and is plotted using a detailed spreadsheet with exposed scores, weightings, and comments. Forrester does not endorse any

vendor, product, or service depicted in the Forrester Wave. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.



2012 2013 Increase

B2B and B2G

Direct – e-invoices delivered to

customers

390,494,710 463,512,001 18.70%

Indirect – e-invoices delivered to

non-EESPA service providers

and EESPA service providers not

participating in the survey

126,837,404 139,513,992 9.99%

TOTAL 517,332,114 603,025,993 16.56%

B2C

Direct – e-invoices delivered to

customers

157,670,684 174,493,368 10.67%

Indirect – e-invoices delivered to

non-EESPA service providers

and EESPA service providers not

participating in the survey

30,968,673 63,216,762 104.13%

TOTAL 188,639,357 237,710,130 26.01%

GRAND TOTAL 705,971,471 840,736,123 19.09%

European e-invoicing service providers

processed more than 800 million e-invoices

EESPA members

processed at least

half of all e-invoices

in Europe

• 840 million e-

invoices in 2013;

a significant

growth of 19 %

over 2012

volumes

Growth enablers

• Basware Commerce Network,

the largest open business

network, connecting 1,000,000

businesses

• Leading purchase-to-pay &

e-invoicing solutions,

empowering companies to

unlock value across their

financial operations

• The benefits of e-invoicing

realized more widely globally

• Companies’ interest in other

payment & value added services

for financing

• Growth through partnerships &

acquisitions


• Basware is pursuing accelerated growth that exceeds the market growth in its Network Services. Stronger growth can be achieved by developing and automating the connection of buyers and suppliers to the e-invoicing services, by utilizing digital marketing and sales channels more extensively, and through acquisitions.

• The Network Services business is expected to grow strongly also during the second half of the year. The Solution Services business is expected to develop more favorably during the rest of the year. The growth in the sales of Alusta is expected to have a positive effect on software net sales and professional services.

• The fixed costs of the company are expected to stay at the same level than during the first half of 2014. The company will continue to improve the profit-making ability in the Solution Services business during the second half of the year by ensuring the effective use of resources in Professional Services and improving the billing rate in relation to demand. The company will continue to invest in the Network Services business to achieve accelerated growth by primarily developing automated solutions for sending and receiving e-invoices.

• Decisions about investments required by the growth will be made during the year if the market situation and business development so require.

• Basware expects its net sales and operating profit (EBIT) for 2014 to grow compared to 2013.


Basware outlook 2014

NEXT REPORT

Q3 Interim Report on October 10, 2014


basware’s interim report q2/2014/media/files/b/... · •basware signed eur 2.8 million global...

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