BASWARE INTERIM REPORT JANUARY 1 – SEPTEMBER 30, 2017 (IFRS)
Basware Corporation, stock exchange release, October 18, 2017 at 08:45am
Cloud revenue growth continues
- Net sales EUR 109 534 thousand (EUR 108 369 thousand): growth 1.1 percent
- Cloud revenue growth of 21.4 percent, amounting to 52.4 percent (43.7 %) of net sales
- Adjusted EBITDA EUR 1 995 thousand (EUR -1 598 thousand)
- Adjusted operating result EUR -5 366 thousand (EUR -7 759 thousand)
- Adjusted earnings per share (diluted) EUR -0.47 (-0.57)
- Operating result EUR -7 038 thousand (EUR -9 932 thousand)
- Earnings per share (diluted) EUR -0.59 (-0.72)
- Net sales EUR 35 444 thousand (EUR 35 295 thousand): growth 0.4 percent
- Cloud revenue growth of 17.6 percent, amounting to 54.6 percent (46.6 %) of net sales
- Adjusted EBITDA EUR 3 277 thousand (EUR 1 381 thousand)
- Adjusted operating result EUR 977 thousand (EUR -804 thousand)
- Adjusted earnings per share (diluted) EUR 0.03 (-0.10)
- Operating result EUR 821 thousand (EUR -2 218 thousand)
- Earnings per share (diluted) EUR 0.02 (-0.19)
The interim report is unaudited.
Basware is targeting accelerated revenue growth during its strategy period 2017-2020. Basware’s number one strategic priority is cloud revenue growth which it will achieve by extending its leadership in networked purchase to pay, growing its network and expanding value added services. For 2017, Basware expects its cloud revenues to grow by approximately 20 percent, and adjusted EBITDA at breakeven.
GROUP KEY FIGURES
|Net sales||35 444||35 295||0.4 %||109 534||108 369||1.1 %||148 580|
|Cloud revenue||19 352||16 455||17.6 %||57 443||47 311||21.4 %||66 242|
|ARR order intake||2 207||1 886||17.1 %||9 470||5 690||66.4 %||7 896|
|EBITDA||3 121||-33||323||-3 771||-5 394|
|Adjusted EBITDA||3 277||1 381||137.3 %||1 995||-1 598||2 063|
|Operating result||821||-2 218||-7 038||-9 932||29.1 %||-13 946|
|Adjusted operating result||977||-804||-5 366||-7 759||30.8 %||-6 490|
|Result before tax||304||-2 770||-9 403||-12 165||22.7 %||-16 256|
|Result for the period||310||-2 785||-8 484||-10 269||17.4 %||-14 318|
|Cash and cash equivalents||25 275||12 951||95.2 %||25 275||12 951||95.2 %||35 755|
|Earnings per share|
|Diluted, EUR||0.02||-0.19||-0.59||-0.72||18.0 %||-1.00|
|Adjusted earnings per share, diluted EUR||0.03||-0.10||-0.47||-0.57||16.5 %||-0.48|
Basware is the global leader in networked purchase-to-pay solutions, including e-invoicing and financing 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:
It is a little over one year since I became CEO of Basware, and as I look back over the last twelve months, I am very proud of what all of us at Basware have achieved, and remain as excited about our future potential as I was on my first day as CEO. As a shareholder, CEO and employee, I am passionate about our mission to help organisations simplify their operations and spend smarter. This is something that every single organisation in the world can benefit from and making sure that Basware can capture this EUR 15 billion market opportunity is what drives me. Basware’s offering is differentiated by its Network, the largest e-invoicing network in the world, which helps customers to make all their purchasing processes 100 percent paperless.
Cloud revenue growth is Basware’s strategic priority so I am pleased to report that cloud revenues continue to grow as a proportion of revenues, making up 55 percent of total revenues in the third quarter of 2017, up from 47 percent in the third quarter of 2016. Total cloud growth continued, up 18 percent compared to the third quarter of 2016. Subscription order intake continued to be solid and was up 66 percent for 2017 year-to-date.
Customers are the key to our success and we made some great wins during the third quarter. It has been particularly pleasing to see our continued strong progress in the US market, winning customers against the US competition. Deals won in the third quarter include Aspen Square, Handelsbanken, Zleep Hotels, the South Yorkshire Police and Crime Commissioner, Nord Pool and Symphony Group. Our existing maintenance customer base is a huge asset for Basware, and we continued to make great progress in transforming these customers to our cloud solutions. This benefits customers by increasing their flexibility and providing them access to the latest innovations via ongoing automatic updates. Customers transformed recently include Valmet, Immochan, Bradken, JELD-WEN, Ramboll and Gjensidige.
Basware continues to lead innovation in our industry and we announced a number of developments in the third quarter that harness the data in our systems for the benefit of our customers. We have further enhanced our award-winning Analytics function with the addition of peer benchmarking and predictive analytics. We announced our partnership with Nordea to offer Basware’s Discount product to Nordea’s corporate banking customers to enable them to achieve better working capital management. We also launched Basware Vault, our compliant, efficient and secure cloud-based archiving service for e-invoices.
At the same time as focusing on customers and growing cloud revenues, we have successfully executed the productivity programme announced in November 2016. As a result we have controlled our cost base while at the same time driving cloud revenue growth, continuing innovation and increasing sales and marketing productivity.
Our people are the source of our strength as a company and employee satisfaction is very important to Basware. It is therefore very pleasing that Basware was a winner of the Charlotte Business Journal 2017 Best Places to Work award. As well as demonstrating the strength of our culture and values, it is also a recognition of Basware’s progress in the US market.
Looking back on the last twelve months, Basware has delivered on all of the areas that were outlined as strategy enablers in October 2016, in particular, continuing to strengthen sales and marketing, seeing great progress in offering value added services to customers, creating a performance culture with all executive team members now Basware shareholders, and successfully implementing a productivity programme to enable scalable growth. This sets a very strong foundation for Basware to capture the significant market opportunity ahead of us and I am excited and confident about Basware’s future.
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.
Basware’s number one strategic priority is cloud revenue growth during its strategy period 2017-2020 which it will achieve by extending its leadership in networked purchase to pay, growing its network and expanding value added services. For 2017, Basware expects its cloud revenues to grow by approximately 20 percent, and adjusted EBITDA at breakeven.
Espoo, Finland, Tuesday, October 17, 2017
Board of Directors
Vesa Tykkyläinen, CEO, Basware Corporation
For more information, please contact:
Niclas Rosenlew, CFO, Basware Corporation
Tel. +358 50 480 2160, email@example.com