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Basware Financial Statement Bulletin January–December 2019: Profitability improved; cloud revenues exceed EUR 100 million

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Basware Corporation, stock exchange release, February 4, 2020 at 8:45 am EET

October-December 2019:

  • Net sales EUR 39,264 thousand (EUR 36,488 thousand): increase of 7.6 percent, organic growth at constant currencies 7.3 percent
  • Organic cloud revenue growth at constant currencies 13.9 percent, amounting to 69.8 percent (65.5%) of net sales
  • Cloud ARR order intake amounted to EUR 6.9 million (EUR 5.9 million)
  • Adjusted EBITDA EUR 2,480 thousand (EUR -826 thousand)
  • Adjusted operating profit/loss EUR -1,430 thousand (EUR -3,419 thousand)
  • Operating profit/loss EUR -1,516 thousand (EUR -3,850 thousand)
  • Adjusted earnings per share (diluted) amounted to EUR -0.27 (EUR -0.28) and earnings per share (diluted) were EUR -0.28 (EUR -0.31)

January-December 2019:

  • Net sales EUR 148,302 thousand (EUR 141,417 thousand): increase of 4.9 percent, organic growth at constant currencies 5.9 percent
  • Organic cloud revenue growth at constant currencies 12.9 percent, amounting to 68.4 percent (63.3%) of net sales
  • Cloud ARR order intake amounted to EUR 23.7 million (EUR 21.5 million)
  • Adjusted EBITDA 5,185 thousand (EUR -4,364 thousand)
  • Adjusted operating profit/loss EUR -10,756 thousand (EUR -15,052 thousand)
  • Operating profit/loss EUR -14,537 thousand (EUR -1,471 thousand)
  • Adjusted earnings per share (diluted) amounted to EUR -1.37 (EUR -1.44) and earnings per share (diluted) were EUR -1.63 (EUR -0.49)

Key figures

EUR thousand 10-12/
2019		 10-12/
2018		 Change, % 1-12/
2019		 1-12/
2018		 Change, %
Net sales 39,264 36,488 7.6 148,302 141,417 4.9
Cloud revenue 27,390 23,916 14.5 101,442 89,482 13.4
Cloud ARR order intake 6,873 5,942 15.7 23,694 21,474 10.3
             
EBITDA 2,395 -1,257   1,403 9,217 -84.8
Adjusted EBITDA 2,480 -826   5,185 -4,364  
Operating profit/loss -1,516 -3,850 60.6 -14,537 -1,471  
Adjusted operating profit/loss -1,430 -3,419 58.2 -10,756 -15,052 28.5
             
Gearing, %1 48.9 14.9   48.9 14.9  
Cash and cash equivalents1 31,672 40,747 -22.3 31,672 40,747 -22.3
Free cash flow metric -4,774 -4,076 -17.1 -23,829 -19,829 -20.2
             
Earnings per share, diluted, EUR -0.28 -0.31 -10.7 -1.63 -0.49  
Adjusted earnings per share, diluted, EUR -0.27 -0.28 -3.4 -1.37 -1.44 -5.0
             
Personnel1 1,325 1,412 -6.2 1,325 1,412 -6.2

1 At the end of the period.

Notes on comparability

Basware has adopted IFRS 16 ‘Leases’ as of January 1, 2019 with modified retrospective method of application, and accordingly the comparative information has not been restated. IFRS 16 impacts comparability for the following financial information:

  • Depreciation expenses have increased significantly and correspondingly rent expenses decreased significantly. Depreciation expenses for right-of-use-assets in the fourth quarter of 2019 totalled EUR 1,155 thousand and EUR 4,704 thousand year-to-date. The aforementioned improves reported EBITDA compared to 2018.
  • Balance sheet totals on January 1, 2019 have increased by EUR 17,012 thousand due to recognition of right-of-use-assets and lease liabilities.  
  • Principal payments of lease liabilities are separately presented in the cash flow from financing activities and totalled EUR 1,246 thousand in the fourth quarter of 2019. Year-to-date the payments of lease liabilities totalled EUR 4,372 thousand.
  • Interest expenses recognized from lease liabilities totalled EUR 223 thousand in the fourth quarter of 2019 and EUR 888 thousand year-to-date.
  • Notes information in 2019 for commitments and contingent liabilities does not include lease liabilities that are recognized as lease liabilities on the balance sheet.
  • IFRS 16 impacts comparability for key figures that are calculated based on balance sheet totals or interest-bearing liabilities.

In February 2018 Basware completed the divestment of two businesses. As a result, it is important to consider the organic growth rate when comparing 2019 financials with 2018 financials as the divestments decrease revenues and profitability. The interim report is unaudited.

Guidance for 2020

For 2020, Basware expects the following:

  • Net Sales to grow at around the same rate as in 2019 on an organic basis at constant currencies
  • Positive EBIT

Constant currencies mean that the effects of any changes in currencies are eliminated by calculating the figures for the period using 2019 exchange rates. Organic means that the figures are adjusted to remove the effects of any acquisitions or disposals within the past 12 months.

CEO Klaus Andersen:

"The productivity programme actions implemented throughout the year improved Basware's profitability in 2019. Adjusted EBITDA amounted to EUR 5.2 million for the full year and EUR 2.5 million for the quarter. Total revenue in 2019 was EUR 148 million, of which cloud amounted to EUR 101 million. Cloud revenue growth was 13 percent and total revenue growth was 6 percent both on an organic basis at constant currencies. Revenue growth was in line with our expectations and profitability slightly better than guidance.

In the last quarter of the year, Basware signed deals with new customers such as Tillman Infrastructure Inc and Millennium Physician Group, both based in the US. Order intake for the quarter amounted to EUR 6.9 million.

For the fifth time in a row Forrester, an independent industry analyst, named Basware as a Leader in eProcurement, with the top scores in the product strategy, globalization and invoice processing criteria. We were recognized for our innovations in accounts payable automation and procurement, particularly in leveraging Artificial Intelligence. As industry leader we are also pleased that Basware solutions are now featured on the SAP App Center.

Basware’s open API architecture approach has been well received by customers and key stakeholders alike. During the quarter we announced the first application partnership with SirionLabs, which is the best in class vendor for Contract Lifecycle Management. We look forward to cooperating with selected specialist vendors to cover key functionalities of the Source-to-Pay cycle with seamless integration to Basware solutions.”

Results briefing webcast and conference call

Basware arranges a briefing for analysts and press, where CEO Klaus Andersen and CFO Martti Nurminen comment on the events and financial performance of the past quarter. The results briefing can be followed via live webcast or teleconference. A recording of the briefing will be available after the event.

Time: Tuesday, February 4, 2020 at 11 am EET / 9 am GMT
Place: Basware HQ, Linnoitustie 2, Cello -building, Espoo, Finland
Video webcast and teleconference registration: https://basware.videosync.fi/2019-financial-statements/

Teleconference numbers:
Finland: +358 981 710 310
Sweden: +46 856 642 651
UK: +44 333 300 0804
US: +1 631 913 1422

PIN: 66013980#

BASWARE CORPORATION


For further information, please contact:
Ben Selby, VP IR & Treasury, Basware Corporation
Tel. +358 50 305 8077, ben.selby@basware.com

Distribution:
Nasdaq Helsinki
Main media
investors.basware.com/en

About Basware:
Basware offers the largest open business network in the world and is the global leader in providing networked purchase-to-pay solutions, e-invoicing and innovative financing services. Our technology empowers organisations with 100% spend visibility by enabling the capture of all financial data across procurement, finance, accounts payable and accounts receivable functions. Basware is a global company doing business in more than 100 countries and is traded on the Helsinki exchange (BAS1V: HE). Find out more at https://investors.basware.com/en.

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