Basware Financial Statement Release January 1-December 31, 2014 (IFRS)
Basware Corporation, stock exchange release, January 23, 2015 at 13:00
BASWARE FINANCIAL STATEMENT RELEASE JANUARY 1 - DECEMBER 31, 2014 (IFRS)
Basware Corporation's fourth quarter and full year 2014
Network Services business grew well and software sales developed favorably
Financial year 2014:
* Net sales EUR 127 674 thousand (EUR 123 349 thousand) - growth 3.5 percent
* Operating profit EUR 4 325 thousand (EUR 3 331 thousand) - growth 29.8
* Operating profit 3.4 percent of net sales (2.7%)
* Growth of Network Services net sales 19.4 percent
* Recurring revenue 67.0 percent (63.8%) of net sales
* Net cash flows from operating activities EUR 14 912 thousand (EUR 3 578
* Earnings per share (diluted) EUR 0.22 (0.20)
* Net sales EUR 34 664 thousand (EUR 33 049 thousand) - growth 4.9 percent
* Operating profit EUR 1 701 thousand (EUR 2 131 thousand) - decrease of 20.2
* Operating profit 4.9 percent of net sales (6.4%)
* Growth of Network Services net sales 23.9 percent
* Recurring revenue 64.9 percent (63.4%) of net sales
* Earnings per share (diluted) EUR 0.11 (0.18)
Basware expects its net sales and operating profit (EBIT) for 2015 to grow
compared to 2014.
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 January
GROUP KEY FIGURES
10-12/ 10-12/ Change, 1-12/ 1-12/ Change,
EUR thousand 2014 2013 % 2014 2013 %
Net sales 34 664 33 049 4.9% 127 674 123 349 3.5%
EBITDA 3 436 3 879 -11.4% 11 354 10 383 9.4%
Operating profit 1 701 2 131 -20.2% 4 325 3 331 29.8%
% of net sales 4.9% 6.4% 3.4% 2.7%
Profit before tax 2 204 2 153 2.4% 4 328 3 284 31.8%
Profit for the period 1 454 2 255 -35.5% 2 959 2 605 13.6%
Return on equity, % 4.2% 9.3% 2.5% 2.6%
Return on investment, % 7.2% 9.1% 4.4% 3.9%
Cash and cash equivalents 28 954 13 218 119.0% 28 954 13 218 119.0%
Gearing, % -38,6% -4.7% -38,6% -4.7%
Equity ratio, % 82.7% 77.1% 82.7% 77.1%
Earnings per share
EUR 0.11 0.18 -39.2% 0.22 0.20 11.4%
(diluted), EUR 0.11 0.18 -39.2% 0.22 0.20 11.4%
Equity per share, EUR 9.88 7.62 29.6% 9.88 7.62 29.6%
Basware is the global leader in providing purchase-to-pay and e-invoicing
solutions in the world of commerce. Basware empowers companies to unlock value
across their financial operations by simplifying and streamlining key financial
processes. Basware helps its customers to succeed and create added value to
their business through better financial management. Basware Commerce Network,
the largest open business network in the world, connects 1 million companies
across 100 countries and enables easy collaboration between buyers and suppliers
of all sizes. Through this network, leading companies around the world achieve
improved spend control, efficiency, and closer relations with their suppliers.
With Basware, businesses can introduce completely new ways of buying and selling
to achieve significant cost savings and boost their cash flow.
Basware reports one operating segment: Purchase to Pay, P2P. The segment is
divided into the Network Services and Solution Services businesses that support
As of the beginning 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). In addition to this, the
company reports revenue from products and services in tabulated format according
to the breakdown of the previous reporting practice: License sales, Professional
Services, Customer Support, and Automation Services.
Customer Support and Automation Services together form the recurring revenue
reported by the company.
Network services revenue is comprised of e-invoicing, paper invoice scanning
services, printing service, catalog exchange, purchase message exchange,
activation services, and alliance fees of e-invoicing services and financing-
related added value services. Solution Services revenue is comprised of software
revenue (SaaS revenue and license sales), software maintenance and extended
customer support services (customer support), Professional Services, and start-
up fees of SaaS services.
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 result are also reported by the location
of the assets. In addition, the geographical information of non-current assets
is reported by the location of the assets in the annual financial statements.
CEO Esa Tihilä:
Network Services business grew well and software sales developed favorably in
2014. Net sales for the review period amounted to EUR 127 674 thousand, growth
of 3.5 percent, and operating profit to EUR 4 325 thousand (EUR 3 331 thousand).
The share of recurring revenue of net sales continued to grow, accounting for
67.0 percent. International operations accounted for 61.6% (60.0%).of net sales.
Growth in sales outside Europe was particularly good, up 13.3 percent for the
year as a whole and 27.1 percent for the fourth quarter.
The net sales of Network Services amounted to EUR 9 175 thousand (EUR 7 407
thousand) for the fourth quarter, growth of 23.9 percent year-on-year. A total
of 21.8 million transactions, e-invoices and other electronic messages, were
processed via Basware Commerce Network, up 25.6 percent year-on-year.
The growth in Network Services continued throughout 2014 and amounted to 19.4
percent. Over 78 million transactions were processed via Basware Commerce
Network during 2014, up 30 percent compared to the previous year, between over a
million buyers and suppliers in over a hundred countries. Organic growth in
transactions was at a good level during every quarter of the year.
Decrease in software sales came to a halt during the latter half of the year.
The net sales of the Solution Services business, which accounts for over 70
percent of the company's total net sales, amounted to EUR 25 489 thousand for
the fourth quarter (EUR 25 642 thousand), a decrease of 0.6 percent year-on-
According to customer feedback, Basware's e-invoicing and purchase-to-pay
software and services are highly competitive. During 2014, we have migrated a
number of existing customers to Alusta and secured a significant number of new
Alusta customers. The demand for SaaS services has been good.
The extensive reach and size of Basware Commerce Network offers excellent
opportunities for providing Basware's new and innovative financing services to
meet the needs of companies of all sizes under competitive terms. Basware's
Financing Services deliver financing solutions and alternatives for both buyers
and suppliers, combining invoice automation and e-invoicing with financing
services on the Basware Commerce Network. Basware Pay, a new type of a global e-
payment solution offered in collaboration with MasterCard, was launched in
September 2014 as the first solution in the Financing Services portfolio. The
first agreement on Basware Pay collaboration was signed with an international
financial institution towards the end of 2014, and negotiations with other
potential partners are underway.
E-invoicing became more common and the volume of e-invoices increased
significantly in Europe as well as globally during the year. The adoption of e-
invoicing and other new solutions for automating financial operations are
accelerated by companies' efforts to improve their cash flow. This is supported
also by the regulatory standards aiming to establish a uniform infrastructure
Basware is already the leader in the e-invoicing and purchase-to-pay solutions,
and Financing Services provide new growth opportunities. In the light of market
analyses, industry research and feedback, there is a high level of interest in
online, real-time payment solutions that make B-to-B commerce more agile among
existing and new customers.
Achieving strong growth in Basware Commerce Network continues to be our main
objective. In accordance with our strategy, we are pursuing growth in the
network both organically and through mergers and acquisitions. We will also
invest in growth in the sales of Alusta software and services, as well as other
sales. Development of the Financing Services business and financing services and
solutions commenced in 2014 and will continue actively this year.
I would like to extend my gratitude to our employees for their committed work
and development of high-quality and new solutions and processes for automated
financial administration, helping Basware's customers to prosper, generate added
value, and improve their cash flow. I would also like to thank all of Basware's
customers and shareholders for their trust in the company.
Operating environment and market outlook
Companies of all sizes globally are under pressure to improve their cash flows,
find new innovative payment strategies, and automate their financial processes
and functions. The company expects the same to continue also in 2015 and the
continuous demand for services to remain at a favorable level among its
Consolidation is expected to continue in the business environment, with the role
of services growing in companies' portfolios. According to industry research, e-
invoicing has become more common and the number of e-invoices has grown
substantially in Europe and the rest of the world. The global market penetration
of e-invoices is estimated to be some 10 percent. The growing e-invoicing market
and companies' interest in other payment and financing added value solutions as
well will offer excellent growth opportunities in future years.
The global market growth in e-invoicing has been estimated to be approximately
20 percent. Basware is pursuing strong growth in Network Services by developing
and automating the connection of buyers and suppliers to the e-invoicing
service, by utilizing digital marketing and sales channels more extensively, and
through acquisitions. In the Solution Services business, sales of Alusta are
expected to have a positive effect on software net sales and professional
Basware's fixed costs are expected to develop moderately. Basware will invest
more extensively in sales and marketing as well as research and development of
new solutions and services in particular. The company will continue to improve
its profit-making ability in its software business also this year by ensuring
the efficient use of resources in Professional Services and improving the
billing rate in relation to demand. The company will continue investments in the
Network Services business to achieve accelerated growth by primarily developing
automated solutions for sending and receiving e-invoices and new ways to achieve
accelerated growth in sales.
Basware continues active analysis of acquisition targets especially in the e-
invoicing market in Europe and in the U.S. according to its strategy. Decisions
on additional investments required for growth will be made during the year as
required by the market situation and development of business operations.
Basware expects its net sales and operating profit (EBIT) for 2015 to grow
compared to 2014.
BOARD'S DIVIDEND PROPOSAL
Basware aims at increased market capitalization and moderate dividend yield.
When preparing the dividend proposal, the Board considers the Company's
financial position, profitability and prospects in the near future.
At the end of 2014, the Group parent company's distributable funds are EUR
127 600 thousand.
Basware's Board of Directors proposes to the Annual General Meeting that a
dividend of EUR 0.10 per share (2013: EUR 0.23) be paid for 2014.
Basware Corporation's Annual General Meeting will take place on Friday, February
13, 2015, at 10 a.m. at Korjaamo in Helsinki, Finland.
Espoo, Finland, Friday, January 23, 2015
Board of Directors
For more information, please contact:
Esa Tihilä, CEO, Basware Corporation
Tel. +358 40 480 7098
NASDAQ OMX Helsinki Ltd