INTERIM REPORTQ3/2015

ESA TIHILÄ, CEO

NICLAS ROSENLEW, CFO

OCTOBER 12, 2015

INTERIM REPORTQ3/2015

BUSINESS REVIEW

KEY EVENTS IN Q3/2015

Year-on-year growth in key markets at a good

level: net sales grew in the UK 185%,

the US 51% & Germany 44%

Building Financing Services business &

services has continued

Revenue developed favourably with

key markets growing 95%:Basware Commerce

Network

The milestone of 100 million

annualized transactions

reached

Q3/2015 KEY FINANCIALS

• Net sales EUR 33 569 thousand

(EUR 30 164 thousand), +11.3%

• Operating profit EUR 996 thousand

(EUR 1 162 thousand)

Net sales

EUR thousand

-

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

Q1 Q2 Q3 Q4

2010 2011 2012 2013 2014 2015

Q3/2015 IN BRIEF

Revenue growth of 11.3% year-on-year:

Network Services

growth

Network Services revenue

grew 48.3% year-on-year

NETWORK SERVICES

Sales grew well; +48.3% year-on-year

Growth of transaction volume continued, +23%

year-to-date, 68.8m transactions at the end of period

SOLUTION SERVICES

Order intake continued steadily; SaaS revenue grew

18.0% year-on-year

23 Alusta agreements

Faster than expected decrease in license sales

FINANCING SERVICES

12 new customers in the UK, the US and Finland

for Basware Pay & Basware Discount

GROWTH OF TRANSACTION VOLUMES 2010 – Q3/2015

-

5,0

10,0

15,0

20,0

25,0

Q1 Q2 Q3 Q4

2010 2011 2012 2013 2014 2015

Million transactions The growth in the transaction volume continued, +23% year-to-date:

• 68.8 million transactions

• 23.1 million transactions in Q3

• An all-time-high, 8.2 million transactions in September

SHARE OF RECURRING REVENUE, ROLLING 12 MONTHS AVERAGE

The share of

recurring revenue

of net sales increased

to 72.2 % (70.1%) in

Q3/2015

Net sales

Share of

recurring

revenue, rolling

4 quarters

average

0,0 %

10,0 %

20,0 %

30,0 %

40,0 %

50,0 %

60,0 %

70,0 %

80,0 %

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

Q1/

10

Q2/

10

Q3/

10

Q4/

10

Q1/

11

Q2/

11

Q3/

11

Q4

/11

Q1/

12

Q2/

12

Q3/

12

Q4/

12

Q1/

13

Q2/

13

Q3/

13

Q4/

13

Q1/

14

Q2/

14

Q3/

14

Q4/

14

Q1/

15

Q2/

15

Q3/

15

EUR thousand

SAAS VERSUS LICENSE SALES DYNAMICS

License salesSaaS

0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

90 %

100 %

2010 2011 2012 2013 2014 Q3/2015

INTERIM REPORTQ3/2015

FINANCIAL REVIEW

-2,0

4,0

10,0

16,0

0,0

10,0

20,0

30,0

Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/2015

Net sales Operating profit

BASWARE GROUP

EUR thousand Q3 2015 Q3 2014 YoY growth Q2 2015 QoQ growth

Net sales 33 569 30 164 11.3% 36 590 -8.3%

Material and services -3 852 -3 201 20.3% -4 437 -13.2%

Personnel expenses -19 238 -17 337 11.0% -23 221 -17.2%

Depreciation and amortization -1 827 -1 760 3.8% -1 822 0.3%

Other operating expenses -7 654 -6 760 13.2% -8 870 -13.7%

Operating result (EBIT) 996 1 162 -14.3% - 1 757

Net result 1249 777 60.7% - 1 715

EPS, EUR (diluted) 0.09 0.05 80.0% -0.12

Personnel 1 653 1 480 11.7% 1 649 0.2%

EUR million

NETWORK SERVICES & SOLUTION SERVICES IN Q3/2015

Solution Services (software solutions & services):

EUR 21 758 (22 200) thousand, -2.0%;

SaaS developed favourably, offset by the decline in

license sales

Network Services (e-invoicing solutions & services):

EUR 11 810 (7 964) thousand, +48.3%;

growth supported by organic growth & acquisition in Q2

Net sales by business in Q3/2015:

(25 642, -0.6 %) 4 000

6 000

8 000

10 000

12 000

14 000

NETWORK SERVICES

10 000

15 000

20 000

25 000

Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15

SOLUTIONS SERVICESEUR thousand

EXPENSES, FINANCING & INVESTMENTS

Operating expenses* amounted to EUR 91 550 thousand (81 406), +12.5%

Operating expenses include approximately EUR 2 600 thousand non-recurring expenses

R&D expenses amounted to EUR 14 654 thousand (12 830), 14.1% of net sales (13.8%)

Capitalized R&D expenses amounted to EUR 5 865 thousand (2 853)

The operative cash flow amounted to EUR 12 407 thousand (13 931)

Cash & cash equivalents amounted to EUR 36 824 thousand (60 156)

Continuing year-to-date investment activities:Stable balance sheet

Cash & cash equivalents of

EUR 36 824 thousand

Loans related to Procserve

acquisition fully paid in Q3

*Operating expenses include employee benefits, depreciations &

amortizations, and other operating expenses

INTERIM REPORTQ3/2015

FUTURE OUTLOOK

STRATEGIC OBJECTIVES AND NEAR TERM PRIORITIES

Network Services Financing Services

• Rapidly grow # of companies

& transactions

• Extend Basware Commerce

Network coverage

• Build a leading portfolio of

innovative financing services

• Multiply value of P2P &

e-invoicing to our customers

Key

objec-

tives

• Simplify access of SMBs to

Basware Commerce Network

• Partnerships and M&As

• Deploy more customers for

working capital management

• Introduce new innovations

Near

term

priori-

ties

• Extend market leadership

• Continue driving innovation

Solution Services

• Drive completeness

• Operational excellence

across delivery

THE BASWARE COMMERCE NETWORK

BASWARE

COMMERCE

NETWORK

The world’s largest open commerce network - connecting buyers and suppliers,

improving relationships and ultimately enabling the flow of commerce.

> 1.2m end-users

> $500bn annual spend

100m business documents *annualized

Users in >100 countries

> 1m active buyers

& suppliers

> 200 interoperability

partners

VAT compliance in

> 50 countries

> 70 formats supported

BUSINESS TO GOVERNMENT (B2G)E-INVOICING INITIATIVES

Increased awareness of the benefits

Cooperation, enhanced technologies,

easy use & open networks

Learnings from other countries and

governments & private sector

Governments under pressure to

reduce costs & be more efficient

KEY DRIVERS IN E-INVOICING:Recent published B2G

e-invoicing initiatives

Ongoing push in Italy,

Spain, Portugal and

Slovenia

UK: Procurement Policy

Note of 06/2015

Switzerland by 2016

France by 2017

US by 2018

www.basware.com/public-sector

BASWARE P2P PAYS BACK IN NO TIME

“We systematically go after

achieving early-pay discounts.

In the past, we captured about

50% of all early-pay discounts

that were available to us; with

Basware, we were able to

push it to 95%.”

Manager, finance at a large

manufacturing company

“We can now finally see — on a

nationwide level — which actual

suppliers we use and how much we use

them. We can use these insights to

better negotiate with existing suppliers

and even contract with suppliers in

areas where we previously didn’t have

any arrangements.”

Development manager at a large

property management company

A COMMISSIONED STUDY CONDUCTED BY

FORRESTER CONSULTING ON BEHALF OF

BASWARE:

BASWARE OUTLOOKBasware expects its net sales and operating profit (EBIT) for 2015 to grow compared to 2014:

Strong growth in Network Services by developing & automating the connection of buyers and suppliers to the e-invoicing service, by utilizing digital marketing and sales channels more extensively, and through acquisitions

Sales of Alusta are expected to have a positive effect on software net sales and professional services.

Operating expenses are expected to develop moderately, the company is actively managing its cost base and has initiated several productivity improvement programs during 2015. Seasonality affects Basware’s business throughout the year, and typically the last quarter of the year has been the strongest quarter.

The company will invest more extensively in sales and marketing as well as research and development of new solutions and services, including Financing Services.

In 2015, the acquisition of Procserve and related integration costs are expected to exceed the savings starting from the second quarter of the year and the cost synergies to be net positive next year. The joint venture which has been established with Arrowgrass Capital Partners LLP is expected to add net costs in 2015.

Active analysis of acquisition targets especially in the e-invoicing market in Europe and in the U.S. will continue.

MORE INFORMATION:

Investors

www.basware.com/investors

Baswarewww.basware.com

www.twitter.com/basware

www.facebook.com/BaswareCorporation

www.linkedin.com/company/basware

The Total Economic Impact™ of Basware’sIntegrated Purchase-to-Pay (P2P) Software Solution

www.basware.com/knowledge-center

Q4 INTERIM REPORT IN EARLY 2016,

TO BE ANNOUNCED

NEXT REPORT