BASWARE INTERIM REPORT JANUARY 1 - SEPTEMBER 30, 2008 (IFRS)


                        
Stock Exchange Release

SUMMARY

January-September
-       Net sales EUR 59 804 thousand (EUR 50 082 thousand) - growth
19.4 percent
-       Operating profit EUR 4 557 thousand (EUR 5 588 thousand) -
decrease by 18.4 percent
-       Operating profit 7.6 percent of net sales (11.2%)
-       International operations' share 51.9 percent of net sales
(45.9%) - growth 35.1 percent
-       Backlog of SaaS orders not recognized as income EUR 11 130
thousand (EUR 11 241 thousand) at the end of the period
-       Earnings per share EUR 0.28 (EUR 0.26)

July-September Q3
-       Net sales EUR 19 259 thousand (EUR 15 268 thousand) - growth
26.1 percent
-       Operating profit EUR 2 381 thousand (EUR 1 406 thousand) -
growth 69.3%
-       Operating profit 12.4 percent of net sales (9.2%)
-       International operations' share 55.1 percent of net sales
(48.0%) - growth 44.8 percent
-       Earnings per share EUR 0.17 (EUR 0.05)


Outlook for 2008: Basware expects the growth of net sales for the
financial year to be from 15 to 25 percent compared with the Group's
net sales in the previous year. Operating profit (EBIT) is expected
to be from 10 to 15 percent of net sales before the one-off items
related to the Contempus reorganization. Contempus' financial result
is slightly positive before one-off items that total approximately
EUR 1 million.

The figures are unaudited.

GROUP KEY FIGURES


                     7-9/   7-9/ Change,   1-9/   1-9/ Change,  1-12/
EUR thousand         2008   2007       %   2008   2007       %   2007

Net sales          19 259 15 268   26.1% 59 804 50 082   19.4% 73 270
Operating profit    2 381  1 406   69.3%  4 557  5 588  -18.4%  7 512
% of net sales       12.4   9.2%           7.6%  11.2%          10.3%
Profit before tax   2 370  1 516   56.3%  4 548  5 816  -21.8%  7 704
Profit for the
period              1 941    531  265.3%  3 290  2 999    9.7%  4 112

Return on equity,
%                   16.3%   4.6%           9.2%   8.8%           8.9%
Return on
investment, %       17.6%  12.7%          11.0%  16.2%          16.2%
Cash and cash
equivalents*)       8 680  9 644  -10.0%  8 680  9 644  -10.0%  7 041
Gearing, %           8.3% -10.9%           8.3% -10.9%          -5.7%
Equity ratio, %     60.0%  68.7%          60.0%  68.7%          70.0%

Earnings per
share, EUR           0.17   0.05  253.1%   0.28   0.26    6.1%   0.36
Earnings per share
(diluted), EUR       0.17   0.05  253.1%   0.28   0.26    6.1%   0.36
Equity per share,
EUR                  4.19   4.04    3.9%   4.19   4.04    3.9%   4.12


*) Includes cash, cash equivalents and financial assets at fair value
through profit or loss
Basware's business operations consist of product sales, maintenance
and support, consulting and services, Software as a Service (SaaS)
sales and other operations. The core of Basware's product sales
consists of Basware Enterprise Purchase to Pay product suite and
Basware Basware Financial Management suite. The Group's reported
market areas are Finland, Scandinavia, Europe and North America.

Basware's CEO Ilkka Sihvo comments in conjunction with the Interim
Report:"Strong growth and profitability describe the third quarter of the
year. Our net sales grew by over 26 percent and profitability nearly
70 percent compared with the same quarter last year. The company grew
in all market areas, with the growth being strongest in North America
and Europe. Product sales grew strongly, by 35.4 percent. Consulting
revenue grew by 27.7 percent and Software as a Service by 29.9
percent. Basware has succeeded well in acquiring and managing large
international accounts, especially in North America and Europe.

The acquisition of Contempus AS strengthens our market position in
Norway, Sweden and United Kingdom and enables us to extend our
distribution network in the United States and Benelux countries,
thanks to the Contempus sales channel. The acquisition supports our
internationalization strategy and more than 55 percent of the net
sales in the third quarter come from operations outside of Finland.

The company continues to be positioned highly in international
research reports and was among five largest eProcurement solution
vendors globally.

The general economic uncertainty has increased significantly. The
demand for Basware's software has remained steady so far. In previous
economic downturns, the demand for the company's products and
services has also remained more positive than the general economic
climate. This is because the company's software solutions generate
cost savings. The rapidly declining global market situation does
however create uncertainty.

For the remainder of the year, the prospects for consulting and
maintenance look promising but given the current climate, more
challenging for license sales. The costs for the latter part of the
year will remain on the same level as in the first half of the year,
excluding the Contempus acquisition."


REPORTING

Basware's primary reporting segment is based upon geography as
follows: Finland, Scandinavia, Europe and North America.

Basware reports it Software as a Service (SaaS) revenue separately in
the second segment. Software as a Service revenue includes license,
maintenance and services revenue that are invoiced monthly based on
an agreement. Software as a Service agreements typically span several
years. The Group also reports the backlog of orders not recognized as
income. The Company's SaaS sales are growing and this dilutes net
sales growth in short term.

As of January 1, 2008,  the capital structure of Basware Oyj's
foreign subsidiaries has been changed to the extent that majority of
the long-outstanding intercompany trade receivables in the parent
company have been converted to a long-term net investment in a
foreign operation. Purpose of the loan arrangement is to fund a
long-term strategic investment. Foreign currency gains and losses
from a net investment in a foreign operation are recorded in a
separate component of equity in the consolidated financial
statements.

Basware Corp. acquired the entire share capital of Contempus AS from
Affecto. Contempus will be combined to the Basware Group as of
October 1, 2008. The preliminary balance sheet of Contempus Group is
included on the Basware Group balance sheet because the acquisition
took place on September 30, 2008.






NET SALES

Basware Group's net sales grew by 19.4 percent in January-September
and were EUR 59 804 thousand (EUR 50 082 thousand). During the third
quarter, net sales grew by 26.1 percent and were EUR 19 259 thousand
(EUR 15 268 thousand).

The Company's product sales decreased by 2.3 percent in the period
and were 27.1 percent (33.1%) of net sales Due to the adjusted
revenue recognition principles for product sales, some of the
agreements signed at the end of 2006 were recognized in the first
quarter of 2007. The value of these agreements amounts to over EUR 3
million. The growth of product sales without these components would
have been 22.8 percent.

Maintenance revenue and support services related to maintenance grew
by 17.5 percent in the period and represented 30.2 percent (30.7%) of
net sales.  Consulting and services revenue grew by 40.8 percent and
represented 40.6 percent (34.4%) of net sales. SaaS sales grew by
43.7 percent in the period and represented 2.1 percent (1.8%) of net
sales. The backlog of SaaS orders not recognized as income was EUR
11 130 thousand (EUR 11 241 thousand) thousand at the end of the
period.

In July-September, 27.8 percent (25.9%) of net sales came from own
product sales, with product sales increasing by 35.4 percent. SaaS
sales represented 2.3 percent (2.2%) of net sales in the third
quarter and grew by 29.9 percent. In the third quarter, maintenance
revenue represented 32.3 percent (34.7%) of net sales and grew by
17.4 percent. Consulting and service revenue represented 37.6 percent
(37.2%) of net sales and grew by 27.7 percent.

Value added resellers provided a net share of 16.8 percent (15.3%) or
EUR 2 721 thousand of product sales in January-September. In
July-September, value added resellers provided a net share of 17.0
percent (15.7%) or EUR 907 thousand of product sales which represents
8.5 percent (8.5%) of international operations' total net sales.

The international share of Basware's net sales was 51.9 percent
(45.9%) in the period. International operations grew by 35.1 percent.
The international share of Basware's net sales was 55.1 percent
(48.0%) in the third quarter and it grew by 44.8 percent.

The geographical division of net sales by the location of assets
(primary segment):


Net sales          7-9/   7-9/             1-9/   1-9/ Change,  1-12/
(EUR thousand)     2008   2007 Change, %   2008   2007       %   2007
Finland          10 604 10 238       3.6 34 188 34 571    -1.1 48 849
Scandinavia       3 352  3 126       7.2 12 179 11 015    10.6 16 797
Europe            5 428  3 477      56.1 14 189  9 429    50.5 15 081
North America     1 567    757     107.1  3 692  2 429    52.0  3 460
Sales between                                                     -10
segments         -1 692 -2 329      27.4 -4 444 -7 362    39.6    917
Group total      19 259 15 268      26.1 59 804 50 082    19.4 73 270



The geographical division of net sales by the location of customers:


Net sales        7-9/   7-9/             1-9/   1-9/            1-12/
(EUR thousand)   2008   2007 Change, %   2008   2007 Change, %   2007
Finland         8 645  7 939       8.9 28 745    27 118    6.0 37 969
Scandinavia     3 262  2 819      15.7 11 898    10 362   14.8 15 911
Europe          5 299  3 371      57.2 14 048     9 364   50.0 14 785
Other           2 052  1 139      80.2  5 113     3 239   57.9  4 604
Group total    19 259 15 268      26.1 59 804    50 082   19.4 73 270




FINANCIAL PERFORMANCE
Basware's operating profit decreased by 18.4 percent in the period
and totaled EUR 4 557 thousand (EUR 5 588 thousand). Operating profit
represented 7.6 percent (11.2%) of net sales. Operating profit grew
by 69.3% in the third quarter and totaled EUR 2 381 thousand (EUR 1
406 thousand).
In the third quarter, Basware's operating profit totaled EUR 2 381
thousand (EUR 1 406 thousand). In the third quarter, operating profit
represented 12.4 percent of net sales.

The division of operating profit geographically by the location of
assets (primary segment):


Operating profit
(EUR                  7-9/  7-9/ Change,  1-9/ 1-9/ Change,
thousand)             2008  2007       %  2008 2007       % 1-12/2007
                                                 10
Finland              1 679 3 219   -47.8 3 513  371   -66.1    12 706
Scandinavia            229  -104   319.8 1 038 -540   292.4       333
                              -1                 -2
Europe                 375   058   135.5   -26  584    99.0    -3 662
                                                 -1
North America          144  -614   123.5   171  591   110.8    -1 751
Operating profit
between segments       -47   -37   -27.5  -140  -67  -108.2      -114
                                                  5
Group total          2 381 1 406    69.3 4 557  588   -18.4     7 512



The Company's fixed costs were EUR 49 988 thousand (EUR 40 996
thousand) in the period and have grown by 21.9 percent compared with
the same period last year. Personnel costs made up 70.6 percent
(65.9%) or EUR 35 306 thousand (EUR 27 031 thousand) of the fixed
costs. In the third quarter, fixed costs totaled EUR 15 449 thousand
(EUR 12 247 thousand).

Research and development costs totaled EUR 11 134 thousand (EUR 8 640
thousand), of which EUR 1 892 thousand (EUR 1 843 thousand) or 17.0
percent (21.3%) were capitalized during the period. Amortization of
capitalized research and development costs totaled EUR 871 thousand
(EUR 719 thousand).

The Company's finance income and finance expenses were EUR -9
thousand (EUR 227 thousand). The Company's profit before tax was
EUR 4 548 thousand (EUR 5 816 thousand) and profit for the period was
EUR
3 290 thousand (EUR 2 999 thousand). Undiluted earnings per share
were EUR 0.28 (EUR 0.26).


FINANCE AND INVESTMENTS
Basware Group's total assets on the balance sheet at the end of the
financial period were EUR 80 537 thousand (EUR 67 555 thousand). The
Company's cash and liquid assets were EUR 8 680 thousand (EUR 9 644
thousand), of which cash and cash equivalents were EUR 8 648 thousand
(EUR 9 217 thousand) and financial assets at fair value through
profit or loss were EUR 32 thousand (EUR 427 thousand).

During the period under review, the Company withdrew a 3-year loan of
EUR 10.65 million to finance the acquisition of Contempus AS. The
loan is hedged by a 2-year interest cap agreement, setting a cap of
5.4% for the base rate of interest.

Cash flows from operating activities were EUR 6 205 thousand (EUR 5
918 thousand). Cash flows from investments were EUR -11 039 thousand
(EUR -7 373 thousand).

Equity ratio was 60.0 percent (68.7%) and gearing was 8.3 percent
(-10.9%). The Company had a total of EUR
12 679 thousand (EUR 4 597 thousand) interest-bearing liabilities, of
which current liabilities accounted for EUR 5 561 thousand (EUR 4 418
thousand). Return on investment was 11.0 percent and return on equity
9.2 percent.

The acquisition price of Contempus AS was NOK 83.6 million
(approximately EUR 10.1 million). In the financial statements for the
third quarter, the difference between purchase price and book value
of acquiree's assets has been allocated fully to intangible assets.
This allocation of the acquisition price is preliminary.

The Company's capital expenditure, resulting from regular, additional
and replacement, investments resulting from growth, was EUR 684
thousand (EUR 581 thousand) in the period. Gross investments which
include, in addition to the previously mentioned, the capitalized
research and development costs and acquisitions (Contempus 2008 and
Digital Vision 2007) totaled EUR 11 262 thousand (EUR 11 109
thousand).

Amortizations of intangible assets were EUR 1 621 thousand (EUR 1 448
thousand). There are no indications of impairments of assets.

RESEARCH, DEVELOPMENT AND NEW PRODUCTS
Basware's research and development costs were EUR 11 134 thousand
(EUR 8 640 thousand) in the period and made up 18.6 percent (17.3%)
of net sales. Research and development costs grew by 28.9 percent
(13.1%) compared with the same period last year. Of the research and
development costs, EUR 1 892 thousand (EUR
1 843 thousand) or 17.0 percent (21.3%) were capitalized during the
period. Amortization of capitalized research and development costs
totaled EUR 871 thousand (EUR 719 thousand).

Altogether 162 (144) people worked in Software Production at the end
of September 2008. The Software Production unit expands to India
where there are currently 21 employees.

Basware's product portfolio was developed according to plan in the
third quarter. New versions of Basware Contract Lifecycle Management
and Basware RFx Management applications were launched during the
second quarter. With Basware Contract Lifecycle Management, users can
maintain and leverage all business agreements. With the Basware RFx
Management sourcing solution, tenders can be managed and prepared
electronically. A new version of Basware Travel & Expense Management
was also launched during the quarter.


PERSONNEL

The figures do not include the Contempus AS personnel which totaled
55 people on September 30, 2008.

Basware employed 675 (557) people in average in the third quarter and
686 (630) people at the end of the period. The number of personnel
grew by 56 persons and by 8.9 percent compared with the same period
last year.

The share of personnel working in foreign units has increased
compared with the same period last year. At the end of the period,
42.6 percent (41.0%) of the Basware personnel worked outside of
Finland and 57.4 percent (59.0%) in Finland. 19.4 percent of the
personnel work in sales and marketing, 48.1 in consulting and
services, 23.6 percent in Software Production, and 8.9 percent in
administration.

The average age of the employees is 35.9 (35.8) years. 32.4 percent
of them hold a Master's degree and 45.8 percent a Bachelor's degree.
27.6 percent of the personnel are women and 72.4 percent men.

Geographical distribution of personnel (primary segment):


Personnel
(employed, in     7-9/   7-9/             1-9/   1-9/  Change,  1-12/
average)          2008   2007 Change, %   2008   2007        %   2007
Finland            422    369      14.5    420    361     16.3    367
Scandinavia        103     98       5.5    101     96      5.7     96
Europe             130     94      37.9    129     76     69.5     93
North America       28     28       0.0     26     24      6.5     25
Group total        682    588      16.0    675    557     21.3    580




BUSINESS OPERATIONS

Finland

The Finland segment includes the business operations of Finland,
Russia, Asia and Australia as well as the Financial Management
business unit. Net sales increased by 3.6 percent EUR 10 604 in the
third quarter and totaled EUR 10 604 thousand (EUR 10 238 thousand).

Net sales of the Finnish Enterprise Purchase to Pay unit grew by 5.9
percent in third quarter. Net sales of the Financial Management
operations (Basware FIMA Oy) increased by 14.1 percent and
represented 10.0 percent (11.1%) of Basware Group's business
operations.

In July-September, a total of 2 million invoices were transmitted
through the eInvoicing service of Basware Einvoices Oy. The invoice
volume grew by approximately 20 percent during the third quarter
compared with the same quarter last year. A total of 34 new customer
agreements were signed during the period. Of the agreements, 30 were
international agreements. The e-invoicing service was extended to
Germany. A total of 10 new partner agreements were signed during the
period. During the quarter, Basware Einvoices Oy launched new
functionality to the e-invoicing service, enabling the transmission
of purchase messages, such as orders and order confirmations, between
buyers and suppliers.

The Enterprise Purchase to Pay and Financial Management solutions are
sold in Russia. Currently there are five resellers in the area.

There are six resellers in the Asia Pacific region. New customers in
the quarter include Flinders University and BGC Contracting Pty Ltd.

In the Finland segment, new customers include Hollming Oy, Huhtamäki
Oyj, Icecapital Pankkiiriliike Oy, Tiimari, Mawell, Ateriamestarit
and Masinotrading.

There are currently 15 resellers in the area and the number of
personnel was 422 (369) on average in the period.


Scandinavia

Basware's Nordic organization consists of centrally directed
Scandinavian (Sweden, Denmark and Norway) unit. All the Basware
Enterprise Purchase to Pay and Financial Management products are sold
in the Nordic countries, apart from the payment solutions which are
currently sold only in Finland.

Net sales of the area grew by 7.2 percent in the third quarter and
totaled EUR 3 352 thousand (EUR 3 126 thousand).  The profitability
of the operations has improved by 319.8 percent and operating profit
was EUR 229 thousand (EUR -104 thousand).

New customers include SKTF, HSB Umeå, Villa Organic, GS-Hydro Norge
AS,Terra Gruppen AS and Apokjeden AS.

Business operations are mainly handled by the own organization and
there were 103 (98) employees on average in the area.


Europe

Basware's European business operations consist of the units in
Germany, France, The Netherlands, United Kingdom and Southern Europe.
Additionally, the reseller network covers the eastern part of Central
Europe. All Enterprise Purchase to Pay solutions are sold in Europe,
apart from the payment and travel & expense management solutions.


Net sales of the Europe segment grew by 56.1 percent in the third
quarter and totaled EUR 5 428 thousand (EUR
3 477 thousand). The profitability of the operations has improved by
135.5 percent and operating profit was EUR 375 thousand (EUR -1 058
thousand).

The UK data capture operations developed according to plan and were
profitable.

New customers include Hertel, ENCI, ERAM, Prinovis Liverpool Ltd,
Barmenia, Autoliv, Friesland Hungaria zRt., Contitrade Ireland and
CHEP.

At the end of the second quarter, there were 27 resellers and 130
(94) employees on average in Europe.


North America

Basware's North American unit sells the Enterprise Purchase to Pay
solutions in the United States and Canada.

Net sales of the area increased 107.1 percent in third quarter and
totaled EUR 1 567 thousand (EUR 757 thousand). The profitability of
the operations has improved by 123.5 percent and operating profit was
EUR 144 thousand (EUR -614 thousand).

Basware delivers an extensive invoice automation solution to a
US-based engineering, construction and technical services
organization. The value of the agreement exceeds EUR 500 thousand and
the solution is planned to be implemented by the end of 2008. Other
new customers in the area include Allied Tube & Conduit Corporation,
Howard Hughes Medical Institute and Protection One Alarm Monitoring
Inc.

At the end of the third quarter, there were 10 resellers and 28 (28)
employees on average in North America.


OTHER EVENTS OF THE FINANCIAL PERIOD
Basware Corp. acquired the entire share capital of Contempus AS from
Affecto. The acquisition price was NOK 83.6 million (approximately
EUR 10.1 million, exchange rate EUR/NOK 8.27). Contempus was part of
Affecto's operations in Norway and produces software solutions for
procurement, invoice and document management.

The acquisition strengthens Basware's market position in Norway,
Sweden and the UK as well as brings valuable expertise to Basware to
improve competitiveness. In addition Basware can extend its
distribution channel through existing Contempus' sales channel in the
United States and Benelux countries. Synergy benefits can be reached
by unifying the businesses as well as by transferring to common
infrastructure and common offices in Oslo, Stockholm and Manchester.

Cost savings will be realized starting from the beginning of 2009 and
they will be approximately EUR 3 million by the end of 2009.
One-off-items are approximately EUR 1 million and they will all be
realized in the fiscal year of 2008. The financial figures of
Contempus will be integrated into Basware as of October 1, 2008 and
the profit of Contempus will be positive before one-off-items.

The Basware Executive Team has extended as a result of organizational
changes in the Software Production unit. Pekka Rehn has been
nominated to lead the new Products unit. Olli Hyppänen who used to
lead the Software Production unit has been nominated Senior Vice
President, Strategy and Development, to lead the new Strategy and
Development unit that was founded on October 1. Additionally, Steve
Muddiman has been nominated as Senior Vice President, Global
Marketing. Ari Salonen started as the General Manager, North America
for Basware's North American operations on September 1, 2008.




SHARE AND SHAREHOLDERS
Basware Corporation's share capital totaled EUR 3 440 437.20 at the
end of the period and the number of shares was 11 468 124.

Share price and trade

In the third quarter, the highest price of the share was EUR 10.45
(EUR 14.00), lowest price was EUR 6.14 (EUR 10.11) and closing price
was EUR 7.00 (EUR 12.95). The average price of the share was EUR 7.70
(EUR 12.13).

A total of 1 808 869 (2 216 534) shares were traded during the
financial period which is the equivalent of 15.8 percent (19.3%) of
the average number of shares. Market capitalization with the period's
closing price on September 30, 2008 was EUR 80 276 868 (EUR 148 512
206).


Shareholders

Basware had 17 301 (18 459) shareholders on September 30, 2008
including nominee-registered holdings (9). Nominee-registered
holdings accounted for 11.41 percent of the total number of shares.

The Company did not receive any notice of change in ownership during
the financial period.


GOVERNANCE
At the Annual General Meeting of Shareholders on February 14, 2008,
the number of Board members was confirmed to be five. The Annual
General Meeting resolved to agree on the proposal and elected Matti
Copeland, Sakari Perttunen, Ossi Pohjola, Ilkka Toivola and Hannu
Vaajoensuu to the Board of Directors.

The Annual General Meeting further resolved to elect Ernst & Young
Oy, Authorized Public Accountants as the auditor, with APA Heikki
Ilkka in charge and APA Terhi Mäkinen as the deputy auditor.

The Board was authorized to resolve on share issue and on a free
issue to the Company itself.

A separate stock exchange release has been issued February 14, 2008
on the Board authorizations and other resolutions of the Annual
General Meeting of Shareholders.

Decision on the Decrease of Share Premium

The AGM authorized the company share premium to be decreased by EUR
33 057 787.45 for the purpose of transferring the decreased amount to
the company's distributable equity. According to the resolution of
the National Board of Patents and Registration of Finland on June 24,
2008, the decrease has been done.


THE COMPANY'S NEAR FUTURE RISKS AND BUSINESS UNCERTAINTIES
According to the Company's risk management model, the risks are
divided into six categories: risks related to business operations,
products, personnel as well as legal, financial and data security
risks. Basware takes risks that are a natural part of the strategy
and objectives. These risks are managed and diminished in various
ways. Short risks are considered to be risks in current reporting
year.

As part of Basware's risks and business uncertainties in the near
future, Software as a Service (SaaS) based services instead of
license agreements may affect the Company's short term net sales
growth.

The general economic uncertainty has increased significantly. The
demand for Basware's software has remained steady so far. In previous
economic downturns, the demand for the company's products and
services has also remained more positive than the general economic
climate. This is because the company's software solutions generate
cost savings. The rapidly declining global market situation does
however create uncertainty.

The company operates in several areas outside the Euro zone, the most
significant of which being Sweden, Norway, United Kingdom and United
States. The company is exposed to exchange rate risks in these
countries through intra-company trade, exports and imports as well as
through funding of foreign units and currency denominated equities.

The company manages liquid assets through centralized cash management
and payment. The main cooperation bank globally is Nordea.

EVENTS AFTER THE FINANCIAL PERIOD
Basware Corporation starts share repurchases
Basware Corporation's Board of Directors has resolved to start
repurchases of the company's own shares. A maximum of 400 000 shares
will be acquired which represents approximately 3.49% of all Basware
shares. The decision is based on the authorization granted by the
Annual General Meeting on February 14, 2008 to purchase a maximum of
1 146 812 shares. The purchases will start on October 23, 2008 at the
earliest, and they will end by March 31, 2009.
The shares may be repurchased in order to finance or carry out
acquisitions or other business transactions, in order to develop the
Company's capital structure, to improve the liquidity of the
Company's shares, to be disposed for other purposes, or to be
cancelled. Basware will use its free liquid to purchase the shares,
which will decrease the amount of distributable funds.
The repurchases will be carried out through public trading on the
Nasdaq OMX Helsinki, whereby the shares will be purchased in
accordance with the rules and regulations of the Nasdaq OMX Helsinki
and the Finnish Central Securities Depository.

FUTURE OUTLOOK
General economic uncertainty has significantly increased. Basware
solutions generate cost savings and therefore the demand is not
heavily dependent on the economic situation.

Western Europe and the United States represent approximately three
quarters of overall demand for enterprise software. Invoice
processing and procurement software remain at the beginning of their
lifecycles in these regions. The purchase management and invoice
processing software markets are relatively heterogeneous with regards
to the competitive situation. However, strong growth may attract more
competitors to the market. The industry is consolidating rapidly and
this development is expected to continue in the future. Basware is a
medium sized software company on a global scale, in terms of sales
and number of personnel.

Basware's direct competitors are mainly smaller companies that
operate locally. In North America, the company has also bigger
competitors, especially in procurement. Document management, scanning
and workflow solution developers compete with Basware especially in
invoice processing. Competing solutions also include tailored
software solutions that complement Enterprise Resource Planning (ERP)
systems and require extensive client-specific project work.

The competitiveness of the software is still good due to new value
added products and the integrated concept that the products form.

The Company's international growth is based on the Company's own
sales and marketing efforts as well as on reseller operations. The
development of the indirect channel continues especially in Europe
and North America and in Russia and Asia. In Scandinavia, the focus
is on profitability, supported by the extending product portfolio. In
Finland, the focus is on profitability and the moderate growth comes
mainly from the procurement area and services.

The profitability of the regions outside the Nordic countries
continues to be improved in all of the Group's country units which
decreases the Group's tax rate in the long term.

Of the Company's EUR 11 130 thousand backlog of SaaS orders,
approximately EUR 200 thousand will be recognized as income in 2008.

Basware has complemented its organic growth with acquisitions. The
Company continues to review possible acquisition targets during 2009.
With the acquisitions, the Company can extend the sales channel in
international markets.

Fixed costs in the second half of the year are estimated to be at the
same level as the fixed costs in the first half of the year without
the effect of the Contempus acquisition.

In 2008, Basware expects the growth of net sales for the financial
year to be from 15 to 25 percent compared with the Group's net sales
in the previous year. Operating profit (EBIT) is expected to be from
10 to 15 percent of net sales before the one-off items related to the
Contempus reorganization. Contempus' financial result is slightly
positive before one-off items that total approximately EUR 1 million.


In Espoo, Finland, October 14, 2008

BASWARE CORPORATION
Board of Directors


For more information, please contact

CEO Ilkka Sihvo, Basware Corp.,
Tel. +358 9 8791 7251 or +358 40 501 8251

Analyst and Press Briefing
Basware arranges today, October 14, 2008 a briefing on the Interim
Report for the press and analysts at 11:00 in Hotel Kämp,
Pohjoisesplanadi 29, Helsinki, Finland. During this briefing CEO
Ilkka Sihvo will comment the operations and financial performance of
the quarter. Welcome.

Distribution
Helsinki Stock Exchange
Key media
www.basware.com

SUMMARY OF FINANCIAL STATEMENTS AND NOTES TO THE FINANCIAL STATEMENTS

The Interim Report has been prepared according to the International
Financial Reporting Standards (IFRS). Same Accounting Principles have
been applied as in the 2007 Financial Statements. Key indicator
calculations remain unchanged and have been presented in the 2007
Financial Statements.


GROUP INCOME STATEMENT


                  1.7.-  1.7.-           1.1.-  1.1.-           1.1.-
                  30.9.  30.9. Change,   30.9.  30.9. Change,  31.12.
EUR thousand       2008   2007       %    2008   2007       %    2007

NET SALES        19 259 15 268    26.1  59 804 50 082    19.4  73 270
Other operating
income               58     23   152.1     189    790   -76.1     834
Materials andservices           -797   -981   -18.7  -3 394 -2 463    37.8  -4 459
Employee
benefits
                                                  -27
expenses        -10 933 -7 827    39.7 -35 306    031    30.6 -40 600
Depreciation
and
amortization       -690   -657     4.9  -2 053 -1 825    12.5  -2 590
Other operating                                   -13
expenses         -4 516 -4 419     2.2 -14 682    966     5.1 -18 943
Operating
profit            2 381  1 406    69.3   4 557  5 588   -18.4   7 512
Finance Income       39    130   -69.9      96    270   -64.3     344
Finance
Expenses            -50    -20   146.9    -106    -43   146.1    -152
Profit before
tax               2 370  1 516    56.3  4  548  5 816   -21.8   7 704
Income tax                                        - 2
expense            -430   -985   -56.4  -1 258    816   -55.3  -3 591
PROFIT FOR THE
PERIOD            1 941    531   265.3   3 290  2 999     9.7   4 112
EPS
(undiluted),
EUR
EPS (diluted),
EUR                0.17   0.05   253.1    0.28   0.26     6.1    0.36
Average share
number             0.17   0.05   253.1    0.28   0.26     6.1    0.36













GROUP BALANCE SHEET


EUR thousand                 30.9.2008 30.9.2007 Change, % 31.12.2007

ASSETS

NON-CURRENT ASSETS
Intangible assets               20 953    11 873      76.5     12 210
Goodwill                        25 821    25 816               25 702
Tangible assets                  1 148     1 003      14.4      1 009
Available-for-sale
investments                         38        38                   38
Long-term trade and other
receivables                         12        12                   12
Deferred tax assets              2 199     2 752     -20.1      2 489
Non-current assets              50 171    41 495      20.9     41 460

CURRENT ASSETS
Inventories                         57        28     102.2         42
Trade and other receivables     19 579    16 158      21.2     18 704
Income tax receivables           2 051       230     791.3        476
Financial assets at fair
value through profit or loss        32       427     -92.5         31
Cash and cash equivalents        8 648     9 217      -6.2      7 010
Current assets                  30 367    26 060      16.5     26 263

TOTAL ASSETS                    80 537    67 555      19.2     67 722


EQUITY AND LIABILITIES

SHAREHOLDERS' EQUITY
Share capital                    3 440     3 440                3 440
Share premium account               69    33 127     -99.8     33 127
Fair value reserve and other
reserves                        33 598       540   6 121.4        540
Translation differences           -237       550    -143.1        392
Retained earnings               11 235     8 629      30.2      9 765
Minority interest                  223        98     128.4        148
Shareholders' equity            48 328    46 383       4.2     47 413

NON-CURRENT LIABILITIES
Deferred tax liability           1 648     1 649                1 643
Interest-bearing liabilities     7 118       179   3 871.3         20
Non-current liabilities          8 766     1 828     379.4      1 663

CURRENT LIABILITIES
Interest-bearing liabilities     5 561     4 418      25.9      4 314
Trade payables and other
liabilities                     17 138    13 774      24.4     14 000
Tax liability from income
tax                                744     1 152     -35.4        333
Current liabilities             23 444    19 343      21.2     18 647

TOTAL EQUITY AND LIABILITIES    80 537    67 555      19.2     67 722



GROUP STATEMENT OF CHANGES IN EQUITY

                                 Invested
                           Share     non-    Ot-  Trans-   Ret- Mino-
                  Share-    pre-      re-    her  lation  ained  rity   Share-
                holders'    mium stricted    re-    dif-  earn- inte- holders'
EUR thousand      equity account   equity serves ference   ings  rest   equity
SHARE-HOLDERS'     3 440  33 127        0    540     235  7 176    88   44 606
EQUITY 1.1.2007
Change in
translation
difference                                           120                   120
Granted
warrants                                                     69             69
Other changes                                                 1              1
Net profit/loss
recognized
directly
in
shareholders'
equity                                               120     71            190
Profit for the
period                                                    2 488   -20    2 468
Total profits
and losses                                           120  2 559   -20    2 658
Share premium                                            -1 720         -1 720
SHARE-HOLDERS'
EQUITY
30.9.2007          3 440  33 127        0    540     355  8 015    68   45 545
                                 Invested
                           Share     non-    Ot-  Trans-   Ret- Mino-
                  Share-    pre-      re-    her  lation  ained  rity   Share-
                holders'    mium stricted    re-    dif-  earn- inte- holders'
EUR thousand      equity account   equity serves ference   ings  rest   equity
SHARE-HOLDERS'
EQUITY 1.1.2008    3 440  33 127        0    540     392  9 765   148   47 413
Change in
translation
difference                                          -629   -141           -770
Granted
warrants                                                    106            106
Transfers                      -
between items             33 058   33 058                                    0
Net profit/loss
recognized
directly
in
shareholders'                -33
equity                       058   33 058           -629    -35           -664
Profit for the
period                                                    3 215    75    3 290
Total profits
and losses                                          -629  3 180    75    2 626
Dividend
distribution                                             -1 711         -1 711
SHARE-HOLDERS'
EQUITY
30.9.2008          3 440      69   33 058    540    -237 11 235   223   48 328





GROUP CASH FLOW STATEMENT


EUR thousand                  1.1.-30.9.08 1.1.-30.9.07 1.1.-31.12.07

Cash flows from operating
activities

Profit for the period                3 290        2 999         4 112
Adjustments for profit               3 294        4 110         5 732
Working capital changes              2 200          739        -1 812
Interest paid                          -83          -47          -124
Dividends received                      83           55           287
Interest received                       -8           35            -7
Other financial items in
operating activities                -2 572       -1 975        -3 801
Net cash from operating
activities                           6 205        5 918         4 387


Cash flows from investing
activities

Purchase of tangible and
intangible assets                   -2 515       -2 402        -2 869
Proceeds from sale of
tangible
and intangible assets                   36           25            48
Acquired subsidiaries               -8 567       -8 018        -8 180
Proceeds from other
investments                                       3 013         3 013
Repayments of loan
receivables                              7            8            20
Net cash used in investing
activities                         -11 039       -7 373        -7 969


Cash flows from financing
activities

Minority's capital investment                        40            40
Proceeds from short-term
loans                                5 550        4 000         4 000
Repayments of short-term
borrowings                          -4 000
Withdrawals of non-current
loans                                7 100
Repayments of long-term
borrowings                            -300         -307          -562
Repayments of financial lease
liabilities                             -5          -12           -10
Dividends paid                      -1 711       -1 720        -1 720
Net cash used in financing
activities                           6 634        2 000         1 749


Net change in cash and cash
equivalents according to cash
flow statement                       1 800          545        -1 833

Cash and cash equivalents at
beginning of period                  7 041        8 975         8 975
Effects of exchange rate
changes on cash
and cash equivalents                  -161          -39          -101
Effects of fair value
implementation                                      164
Cash and cash equivalents at
end of period                        8 680        9 644         7 041






GROUP QUARTERLY INCOME STATEMENT

                    1-3/   1-3/    4-6/   4-6/    7-9/   7-9/  10-12/
EUR thousand        2008   2007    2008   2007    2008   2007    2007
NET SALES         18 233 17 038  22 312 17 776  19 259 15 268  23 187
Other operating
income                69     15      62    752      58     23      44
Materials and
services          -1 211   -819  -1 385   -662    -797   -981  -1 996
Employee
benefits
expenses         -11 765 -9 243 -12 608 -9 961 -10 933 -7 827 -13 569
Depreciation and
amortization        -671   -571    -693   -597    -690   -657    -765
Other operating
expenses          -4 910 -5 010  -5 257 -4 536  -4 516 -4 419  -4 977
Operating profit    -254  1 409   2 431  2 773   2 381  1 406   1 924
%                  -1.4%   8.3%   10.9%  15.6%   12.4%   9.2%    8.3%
Finance income        39     61      18     79      39    130      73
Finance expenses     -35    -11     -21    -12     -50    -20    -109
Profit before
tax                 -250  1 459   2 428  2 840   2 370  1 516   1 888
%                  -1.4%   8.6%   10.9%  16.0%   12.3%   9.9%    8.1%
Tax on income
from operations     -300   -575    -528 -1 256    -430   -985    -775
PROFIT FOR
THE PERIOD          -550    884   1 899  1 584   1 941    531   1 113
%                  -3.0%   5.2%    8.5%   8.9%   10.1%   3.5%    4.8%



Material changes in loans

During the period under review, the Company withdrew a 3-year loan of
EUR 10.65 million to finance the acquisition of Contempus AS. The
loan is hedged by a 2-year interest cap agreement, setting a cap of
5.4% for the base rate of interest.

Accounting for business combination

The acquisition of Contempus AS was endorsed on September 30, 2008.
Provisional fair values are assigned to the assets and liabilities of
Contempus in the consolidated financial statements of the Company.
COMMITMENTS AND CONTINGENT LIABILITIES

Significant changes in liabilities

During the period, the Company withdrew a 3-year loan of EUR 10.65
million to finance the acquisition of Contempus AS. The loan is
hedged by a 2-year interest cap agreement, setting a cap of 5.4% for
the base rate of interest.
Combining new acquisitions

The acquisition of Contempus AS:n was realized on September 30, 2008.
The acquired assets and liabilities have been recognized to the
preliminary fair value through profit or loss on the balance sheet.



 EUR thousand                            30.9.08 30.9.07 31.12.07

GUARANTEES ON BEHALF OF SUBSIDIARIES
                                           1 101   1 097    1 103
Guarantees total                           1 101   1 097    1 103

OTHER OWN CONTINGENT LIABILITIES
Lease liabilities:
Current lease liabilities                    781     553      601
Lease liabilities maturing in 1-5 years      969     598      685
Total                                      1 750   1 151    1 286

Other rental liabilities:
Current rental liabilities                 2 033   1 675    1 827
Rental liabilities maturing in 1-5 years   4 056   4 152    3 957
Rental liabilities maturing later                    246      172
Total                                      6 183   6 074    5 956
Other own contingent liabilities, total    7 934   7 225    7 242



SEGMENT REPORTING
Geographical segments (primary segment)


Net sales
(EUR                                                  Change,
thousand)       7-9/08 7-9/07 Change, % 1-9/08 1-9/07       % 1-12/07
Finland         10 604 10 238       3.6 34 188 34 571    -1.1  48 849
Scandinavia      3 352  3 126       7.2 12 179 11 015    10.6  16 797
Europe           5 428  3 477      56.1 14 189  9 429    50.5  15 081
North America    1 567    757     107.1  3 692  2 429    52.0   3 460
Sales between
segments        -1 692 -2 329      27.4 -4 444 -7 362    39.6 -10 917
Group total     19 259 15 268      26.1 59 804 50 082    19.4  73 270



Operating profit
(EUR                             Change,               Change,
thousand)          7-9/08 7-9/07       % 1-9/08 1-9/07       % 1-12/07
Finland             1 679  3 219   -47.8  3 513 10 371   -66.1  12 706
Scandinavia           229   -104   319.8  1 038   -540   292.4     333
Europe                375 -1 058   135.5    -26 -2 584    99.0  -3 662
North America         144   -614   123.5    171 -1 591   110.8  -1 751
Operating profit
between segments      -47    -37   -27.5   -140    -67  -108.2    -114
Group total         2 381  1 406    69.3  4 557  5 588   -18.4   7 512




Personnel
(employed, in                                         Change,
average)        7-9/08 7-9/07 Change, % 1-9/08 1-9/07       % 1-12/07
Finland            422    369      14.5    420    361    16.3     367
Scandinavia        103     98       5.5    101     96     5.7      96
Europe             130     94      37.9    129     76    69.5      93
North America       28     28       0.0     26     24     6.5      25
Group total        682    588      16.0    675    557    21.3     580



Business segments (secondary segment)


Net sales                                             Change,
(EUR thousand)  7-9/08 7-9/07 Change, % 1-9/08 1-9/07       % 1-12/07
Product sales    5 801  4 019      44.4 16 637 16 637     0.0  24 117
Maintenance and
support          5 989  5 369      11.5 17 246 15 468    11.5  22 100
Consulting and
services         6 334  4 987      27.0 22 287 15 523    43.6  23 342
SaaS               442    340      29.9  1 266    881    43.7   1 250
Other
operations         693    553      25.4  2 368  1 573    50.5   2 461
Group total     19 259 15 268      26.1 59 804 50 082    19.4  73 270


Geographical division of net sales by the location of customer


Net sales (EUR                                        Change,
thousand)       7-9/08 7-9/07 Change, % 1-9/08 1-9/07       % 1-12/07
Finland          8 645  7 939       8.9 28 745 27 118     6.0  37 969
Scandinavia      3 262  2 819      15.7 11 898 10 362    14.8  15 911
Europe           5 299  3 371      57.2 14 048  9 364    50.0  14 785
Other            2 052  1 139      80.2  5 113  3 239    57.9   4 604
Group total     19 259 15 268      26.1 59 804 50 082    19.4  73 270




GROUP KEY INDICATORS

EUR thousand               1-9/08      1-9/07      1-9/06     1-12/07

Net sales                  59 804      50 082      43 446      73 270
Growth of net sales, %      19.4%       15.3%                   22.2%
Operating profit            4 557       5 588       6 271       7 512
Growth of operating
profit, %                  -18.4%      -10.9%                   -7.0%
   % of net sales            7.6%       11.2%       14.4%       10.3%
Profit before tax           4 548       5 816       6 457       7 704
   % of net sales            7.6%       11.6%       14.9%       10.5%
Profit for the period       3 290       2 999       4 460       4 112
   % of net sales            5.5%        6.0%       10.3%        5.6%

Return on equity. %          9.2%        8.8%       27.1%        8.9%
Return on investment,
%                           11.0%       16.2%       38.8%       16.2%
Interest bearing
liabilities                12 679       4 597         870       4 334
Cash and liquid assets
*)                          8 680       9 644       9 909       7 041
Gearing, %                   8.3%      -10.9%      -20.6%       -5.7%
Equity ratio, %             60.0%       68.7%       76.6%       70.0%
Total assets               80 537      67 555      57 293      67 722

Gross investments **)      11 262      11 109      24 492      12 220
   % of net sales           18.8%       22.2%       56.4%       16.7%
Capital expenditure           684         581         510         817
   % of net sales            1.1%        1.2%        1.2%        1.1%
Research and
development costs          11 134       8 640       7 640      13 172
   % of net sales           18.6%       17.3%       17.6%       18.0%
R&D personnel at end
of period                     162         144         138         152

Personnel average for
period                        675         557         510         580
Personnel at end of
period                        686         630         517         658
Growth of personnel, %       8.9%       21.8%       34.4%       24.6%

Earnings per share,
EUR                          0.28        0.26        0.40        0.36
Earnings per share,
EUR (diluted)                0.28        0.26        0.40        0.36
Equity per share, EUR        4.19        4.04        3.83        4.12
Dividend per profit, %                                          42.0%
P/E ratio                   24.97       49.02       29.55       28.02
Share price
performance
   lowest share price        6.14       10.11       11.21        9.50
   highest share price      10.45       14.00       15.25       14.00
   average share price       7.70       12.13       13.22       12.03
   closing share price       7.00       12.95       11.90       10.00

Market value at end of
period                 80 276 868 148 512 206 136 470 676 114 681 240
Number of traded
shares                  1 808 869   2 216 534   4 708 382   2 761 995
% of average share
number                      15.8%       19.3%       42.5%       24.1%
Average share number:
- during the period    11 468 124  11 468 124  11 074 109  11 468 124
- during the period,
diluted                11 468 124  11 468 124  11 138 694  11 468 124


*) Includes cash, cash equivalents and financial assets at fair value
through profit or loss
**) Includes capitalized R&D costs and acquisitions
MAJOR SHAREHOLDERS, SEPTEMBER 30, 2008



                                                    Shares      Votes
                                                          pcs      %
1.   Sihvo, Ilkka                                   1 065 800    9.3
2.   Vaajoensuu, Hannu (incl. a controlled
     company and children under guardianship)       1 045 800    9.1
3.   Eräkangas, Kirsi (incl. children under
     guardianship)                                  1 031 800    9.0
4.   Perttunen, Sakari                                830 400    7.2
5.   Pöllänen, Antti (incl. children under
     guardianship)                                    740 900    6.5
6.   Nordea Nordic Small Cap Fund                     555 734    4.8
7.   Henki-Sampo Pension Insurance Company            550 000    4.8
8.   Ahonen, Asko                                     318 822    2.8
9.   Royal Skandia Life Assurance                     270 000    2.4
10.  Veritas Pension Insurance Company                266 000    2.3
11.  Kaleva Mutual Insurance Company                  242 690    2.1
12.  Perttunen, Meimi                                 215 400    1.9
13.  Fondita Nordic Micro Cap Fund                    200 000    1.7
14.  Evli Pankki Oyj                                  120 297    1.0
15.  Aktia Capital Fund                               108 213    0.9
16.  Fondita Nordic Small Cap Fund                    106 000    0.9
17.  Pavor Oy                                          75 052    0.7
18.  Sinkonen, Raija                                   70 000    0.6
19.  Sarvala, Vesa                                     65 241    0.6
20.  Sr Eq Finland Small companies                     61 443    0.5
     20 largest shareholders total                  7 939 592   69.2
     Nominee registered shares                      1 059 925    9.2
     Others                                         2 468 607   21.5
     Total                                         11 468 124  100.0

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