BASWARE FINANCIAL STATEMENT RELEASE JANUARY 1 - DECEMBER 31, 2017 (IFRS)

Basware Corporation, stock exchange release, February 2, 2018, 8.45am

BASWARE FINANCIAL STATEMENT RELEASE JANUARY 1 - DECEMBER 31, 2017 (IFRS)

Cloud revenue growth continued and productivity improved
  
January-December 2017:

-       Net sales EUR 149 241 thousand (EUR 148 580 thousand): growth 0.4 percent
-       Cloud revenue growth of 19.5 percent, amounting to 53.0 percent (44.6 %) of net sales
-       Adjusted EBITDA EUR 3 367 thousand (EUR 2 063 thousand)
-       Adjusted operating result EUR -6 741 thousand (EUR -6 490 thousand)
-       Adjusted earnings per share (diluted) EUR -0.61 (-0.48)
-       Operating result EUR -9 436 thousand (EUR -13 946 thousand)
-       Earnings per share (diluted) EUR -0.79 (-1.00) 

October-December 2017:

-       Net sales EUR 39 707 thousand (EUR 40 211 thousand): decrease 1.3 percent
-       Cloud revenue growth of 15.0 percent, amounting to 54.7 percent (47.0 %) of net sales
-       Adjusted EBITDA EUR 1 372 thousand (EUR 3 660 thousand)
-       Adjusted operating result EUR -1 375 thousand (EUR 1 269 thousand)
-       Adjusted earnings per share (diluted) EUR -0.13 (0.09)
-       Operating result EUR -2 398 thousand (EUR -4 014 thousand)
-       Earnings per share (diluted) EUR -0.21 (-0.28) 

Basware is the global leader in providing networked source-to-pay, e-invoicing and value-added services. Basware’s key strategic priority for the strategy period 2017-2020 is cloud revenue growth. The company continues to strengthen its leading market position in order to grow cloud revenue.

For 2018 Basware expects the following on an organic basis at constant currencies:

-       Cloud revenues to be between EUR 90 and 95 million
-       Total costs excluding amortization, depreciation and adjustments to EBITDA to be slightly above 2017 levels

This financial statement release has been prepared in accordance with IAS 34, Interim Financial Reporting. The amounts presented in the summary of financial statements and notes to the financial statements are based on the company's audited financial statements. The Auditor's Report was issued on February 1, 2018.

GROUP KEY FIGURES

10-12/ 10-12/ Change,  1-12/ 1-12/ Change, 
EUR thousand 2017 2016 % 2017 2016 %
Net sales 39 707 40 211 -1.3 % 149 241 148 580 0.4 %
Cloud revenue 21 726 18 900 15.0 % 79 169 66 242 19.5 %
ARR order intake 3 368 2 206 52.7 % 12 838 7 896 62.6 %
EBITDA 349 -1 623 672 -5 394
Adjusted EBITDA 1 372 3 660 -62.5 % 3 367 2 063 63.2 %
Operating result -2 398 -4 014 40.3 % -9 436 -13 946 32.3 %
Adjusted operating result -1 375 1 269 -208.3 % -6 741 -6 490 3.9 %
Result before tax -2 800 -4 091 31.6 % -12 203 -16 256 24.9 %
Result for the period -2 967 -4 048 26.7 % -11 451 -14 318 20.0 %
Cash and cash equivalents 20 683 35 755 -42.2 % 20 683 35 755 -42.2 %
Earnings per share
Diluted, EUR -0.21 -0.28 27.0 %  -0.79 -1.00 20.5 %
Adjusted earnings per share -0.13 0.09 -0.61 -0.48 -26.8 %

BUSINESS OPERATIONS

Basware is the global leader in networked source-to-pay solutions, including e-invoicing and value added services. Basware’s commerce network connects businesses in over 100 countries and territories around the globe. As the largest open business network in the world, Basware provides scale and reach for organizations of all sizes, enabling them to grow their business and unlock value across their operations by simplifying and streamlining financial processes. Small and large companies around the world achieve significant cost savings, more flexible payment terms, greater efficiencies and closer relationships with their suppliers.

CEO Vesa Tykkyläinen:

As both CEO and a shareholder of Basware, I am very proud of what we have achieved in the fourth quarter and in 2017 as a whole. We have continued to grow our cloud business rapidly, increased order intake, released exciting new innovations, and at the same time implemented significant productivity improvements. We have set the foundations for the future, and the effects of these changes are only just starting to become apparent.

Basware’s mission to help our customers simplify operations and spend smarter is something that I feel very passionate about. Every single organisation in the world can benefit from using Basware’s solutions and this means that there is a huge market opportunity for us, worth EUR 15 billion annually in Europe and North America alone. Basware’s Network, the largest e-invoicing network in the world, is a major differentiator and helps our customers to make all of their purchasing processes 100 percent paperless. A commissioned study conducted by Forrester Consulting on behalf of Basware, titled The Total Economic Impact™ Of Basware’s Purchase-To-Pay Cloud Solution published in November 2017 found that Basware’s solutions have a return on investment of 307 percent and a payback time of 12 months for customers.

Basware’s strategic priority is cloud revenue growth and with 20 percent growth in 2017, we met our guidance for 2017. Basware’s cloud revenues now account for 53 percent of net sales, up from 45 percent in full year 2016. The ever increasing share of cloud revenues is a key driver for total growth. Subscription order intake, our main lead indicator for future cloud revenue growth, also continued to rise, up 53 percent in the fourth quarter and 63 percent compared to 2017.

Winning and retaining customers are key to our success and in the fourth quarter we acquired some great new customers as well as transforming existing customers to our cloud solutions. New customers won in the fourth quarter include, for example MAN Truck and Bus,  Belden, Hudson Group and Anglican Community Services. Customers that recently transformed from on-premise to cloud solutions included Unicredit, Adecco, Metso, and  Gate Gourmet.

Basware’s vision is to offer the best global solution for purchasing, invoicing and paying. Basware leads innovation in our industry and we continued to announce more enhancements to our solutions that benefit our customers by utilising the huge data asset in our systems. In November, Basware announced the availability of smart coding, a capability that helps customers further automate their invoice processing of non-PO invoices through machine learning. In December, Basware released Supplier Quality Analytics, which provides actionable insights for customers on how suppliers are performing against targets, and enables them to develop better sourcing strategies and reduce supply chain risk.

At the same time as focusing on serving customers and growing cloud revenues, we have continued to work on streamlining our business and increasing productivity. Sales productivity has increased significantly compared to 2016. We successfully executed all aspects of the productivity programme announced in November 2016.

Basware’s people are what makes our company, and employee satisfaction is very important to us. It was very rewarding to see that once again our US team was recognised in the fourth quarter as a great place to work, winning the ‘Best and Brightest Companies to Work For In the Nation’ Award.

Together with the great team that we have globally at Basware I am excited and confident about Basware’s future and our ability to capture the significant market opportunity ahead of us.

FUTURE OUTLOOK

Operating environment and market outlook 

All organisations need to manage their purchasing processes from procurement through to handling invoices and paying them. Currently many organisations only have unsophisticated or partial tools to manage these processes and as a result many are faced with unmanaged spending, inefficient manual and paper-based processes and poor visibility of cashflows. Basware offers a uniquely complete solution for these challenges that is differentiated by the Basware Network, the largest e-invoicing network in the world, and enables customers to manage 100 percent of their spending and make their purchasing processes completely paperless.

Basware expects the demand for networked purchase to pay services to continue to grow. The total potential market for networked purchase to pay services is estimated to be worth EUR 15 billion in annual revenues in Europe and North America. 

Outlook for 2018 

Basware is the global leader in providing networked source-to-pay, e-invoicing and value-added services. Basware’s key strategic priority for the strategy period 2017-2020 is cloud revenue growth. The company continues to strengthen its leading market position in order to grow cloud revenue.

For 2018 Basware expects the following on an organic basis at constant currencies:

-       Cloud revenues to be between EUR 90 and 95 million
-       Total costs excluding amortization, depreciation and adjustments to EBITDA to be slightly above 2017 levels

Constant currencies means that the effects of any changes in currencies are eliminated by calculating the figures for the period using 2017 exchange rates. Organic means that the figures are adjusted to remove the effects of any acquisitions or disposals within the past 12 months.

BOARD OF DIRECTOR’S PROPOSAL FOR DIVIDEND

On December 31, 2017, the Group’s parent company’s distributable funds were EUR 68 704 thousand. The Board of Directors proposes to the Annual General Meeting that no dividend be paid for 2017. 

Basware Corporation’s Annual General Meeting is planned to be held on Thursday, March 15, 2018 in Helsinki, Finland. 

Espoo, Finland, Thursday, February 1, 2018

BASWARE CORPORATION 

Board of Directors 

Vesa Tykkyläinen, CEO, Basware Corporation

For more information, please contact:

Niclas Rosenlew, CFO, Basware Corporation
Tel. +358 50 480 2160, niclas.rosenlew@basware.com

Distribution:

Nasdaq Helsinki
Key media
www.basware.com/investors

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