Basware Financial Statement Release January 1-December 31, 2013 (IFRS)
Basware Corporation, stock exchange release, January 24, 2014 at 08:30
BASWARE FINANCIAL STATEMENT RELEASE JANUARY 1 - DECEMBER 31, 2013 (IFRS)
Basware Corporation's fourth quarter and full year 2013
SUMMARY (last year's corresponding period in parentheses, unless otherwise
stated)
Financial year 2013: Automation Services grew by 48 percent
* Net sales EUR 123 349 thousand (EUR 113 699 thousand) - growth 8.5 percent
* Operating profit EUR 3 331 thousand (EUR 8 308 thousand) - decrease 59.9
percent
* Operating profit 2.7 percent of net sales (7.3%)
* Growth of Automation Services (SaaS and e-invoicing) 48.3 percent
* Recurring revenue (Customer Support and Automation Services) 63.8 percent
(57.8%) of net sales
* Cash flow from operating activities EUR 3 578 thousand (EUR 6 441 thousand)
* Earnings per share (diluted) EUR 0.20 (0.46) - decrease of 55.6 percent
October-December 2013:
* Net sales EUR 33 049 thousand (EUR 30 427 thousand) - growth 8.6 percent
* Operating profit EUR 2 131 thousand (EUR 2 927 thousand) - decrease 27.2
percent
* Operating profit 6.4 percent of net sales (9.6%)
* Growth of Automation Services (SaaS and e-invoicing) 49.7 percent
* The estimated revenue to be recognized for current Automation Services
agreements that are in production as well as for new, signed agreements in
the next twelve months increased to EUR 36.1 million, growth of 7.6 percent
compared to the previous quarter
* Recurring revenue (Customer Support and Automation Services) 63.4 percent
(57.5%) of net sales
* Earnings per share (diluted) EUR 0.18 (0.15) - growth of 15.7 percent
Basware expects its net sales and operating profit (EBIT) for 2014 to grow
compared to 2013.
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
23, 2014.
GROUP KEY FIGURES
10-12/ 10-12/ Change, 1-12/ 1-12/ Change,
EUR thousand 2013 2012 % 2013 2012 %
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Net sales 33 049 30 427 8.6% 123 349 113 699 8.5%
EBITDA 3 879 4 750 -18.3% 10 383 14 801 -29.8%
Operating profit before IFRS3
amortization 2 361 3 460 -31.8% 4 256 10 555 -59.7%
Operating profit 2 131 2 927 -27.2% 3 331 8 308 -59.9%
% of net sales 6.4% 9.6% 2.7% 7.3%
Profit before tax 2 153 2 843 -24.3% 3 284 8 357 -60.7%
Profit for the period 2 255 1 945 16.0% 2 605 5 863 -55.6%
Return on equity, % 9.3% 7.8% 2.6% 5.8%
Return on investment, % 9.1% 11.3% 3.9% 8.2%
Liquid assets *) 13 218 34 519 -61.7% 13 218 34 519 -61.7%
Gearing, % -4.7% -23.8% -4.7% -23.8%
Equity ratio, % 77.1% 77.6% 77.1% 77.6%
Earnings per share
Undiluted, EUR 0.18 0.15 15.7% 0.20 0.46 -55.6%
Diluted, EUR 0.18 0.15 15.7% 0.20 0.46 -55.6%
Equity per share, EUR 7.62 7.84 -2.8% 7.62 7.84 -2.8%
*) Includes cash and cash equivalents
Business operations
Basware is the global leader in providing solutions for better buying, better
selling and connected commerce. Basware provides open, secure, cloud-based
purchase-to-pay and e-invoicing solutions to organizations of all sizes,
resulting in greater efficiencies in procurement, accounts payable and accounts
receivable, payment and financial processes. Companies across all industries,
from small businesses to corporate giants use Basware solutions to drive
sustainable cost savings, proactive insight to cash flows and improved buyer-
supplier relationships. Basware Commerce Network is founded on the principles of
openness, where all types of organizations can collaborate and trade, making it
the largest in the world. Today the network connect millions of business users
in 900 000 companies across over 100 countries.
Reporting
Basware Corporation reports one operating segment: Purchase to Pay, P2P.
Basware reports income for products and services as follows: License sales,
Professional Services, Customer Support, and Automation Services.
Customer Support includes the previous Maintenance and Extended customer
support, which was previously reported under Professional Services. Extended
customer support agreements are continuous service agreements with a term of
several years. Customer Support and Automation Services together form the
recurring revenue reported by the company.
License sales consist of the Purchase to Pay product family together with
financial planning and reporting solutions sold only in Finland. Automation
Services include e-invoicing, scanning services, printing services, catalog
management, purchase message exchange, activation services, and Software as a
Service (SaaS) services.
Basware also reports the estimated revenue to be recognized for current
Automation Services agreements that are in production in the next twelve months.
Automation Services agreements typically expand several years or are valid until
further notice.
As geographic information Basware reports geographical areas Finland,
Scandinavia, rest of Europe, and Other. Net sales are reported by the customer's
location, and geographical information of non-current assets is reported by the
location of the assets.
CEO Esa Tihilä:
Automation Services grew at a rate of 50 percent during the fourth quarter. The
strong growth in the transaction volume continued, up 84.2 percent, and 17.5
million transactions were processed via Basware Commerce Network during the
quarter. Due to the efficiency drive launched by the company during the second
quarter, the growth in costs was more moderate during the latter half of the
year than in the first half, and the company's result improved during the second
half compared to the first half of the year. Net sales for Q4 amounted to EUR
33 049 thousand, growth of 8.6 percent, and operating profit to EUR 2 131
thousand.
The strong growth in Automation Services continued throughout 2013 and amounted
to 48 percent. In 2013, more than 60 million transactions were processed via
Basware Commerce Network, a growth of 76.5 percent. The share of recurring
revenue (Customer Support and Automation Services) of net sales increased during
each quarter, accounting for 63.8 percent of net sales during the financial
period as a whole. The increasing share of recurring revenue of net sales
improves predictability over the long term. Net sales grew by 8.5 percent in
2013 to EUR 123 349 thousand, with our operating profit amounting to EUR 3 331
thousand.
Determined efforts to make Basware Commerce Network into the world's largest
open business commerce network for companies have continued. An increasing
number of small and medium-sized suppliers and buyers have also been connected
to the network through new products and delivery methods during the year. The
strategic aim is to reach an annual transaction volume of 150 million by the end
of 2015. The good performance in 2013 makes it possible to reach the objective.
According to customer feedback received during the year, the competitiveness of
Basware software and services is good. Our key goal is the growth of Basware
Commerce Network and Alusta software and services sales in all of our
operations. During the year, we have migrated a number of existing customers to
Alusta and won a significant number of new Alusta customers.
The product and service portfolio was strengthened also through strategic
partnerships in 2013, such as the partnership with MasterCard announced in
September, combining MasterCard's network, one of the world's largest payment
networks, with Basware Commerce Network and introducing a new business-to-
business payment solution.
During the latter half of 2013, we have restructured our organization to ensure
even faster growth in transaction volumes and expand our service-based business.
Within the new model, the operations will be managed as two units in 2014: the
Network Services business area is responsible for the e-invoicing business and
the Solution Services business area for software business. The Network Services
business aims at strong growth, supported by growth investments. The Solution
Services business aims at moderate growth and strong profitability.
The organizational restructuring has particularly aimed at accelerating the
deployment of our services and products, accelerating the production of SaaS and
e-invoicing deals through product and process improvements and to make
operations more efficient and improve profit-making ability. The company will
continue to streamline its operations in 2014.
Companies of all sizes all over the world are under pressure to improve their
cash flows, find new innovative payment strategies and automate their financial
processes and functions. We expect the same trend to continue this year as well.
We expect that the need for recurring services will also remain at a good level
among our customers. The rapidly growing and evolving e-invoicing market will
offer Basware excellent growth opportunities in 2014 as well.
I would like to thank our employees for their committed work and development
innovative premium financial solutions and processes for the benefit of our
customers during the past year. I would like to extend my thanks also to all
Basware's customers and shareholders for their trust.
FUTURE OUTLOOK
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 2014 and the
continuous need for services to remain at a favorable level among its customers.
Consolidation is expected to continue in the business environment, with the role
of services growing in companies' portfolios. Basware continues active analysis
of acquisition targets especially in the e-invoicing market in Europe and in the
U.S. according to its strategy.
By the end of 2015, Basware aims to become the largest business commerce network
for buyers and suppliers. The penetration rate of e-Invoicing is still low. It
varies between 5-30 percent depending on the country, and it has been estimated
to grow strongly. The growing and evolving e-invoicing market will offer Basware
excellent growth opportunities.
Outlook 2014
In Basware's new organizational model the operations will be managed as two
units: the Network Services business area will be responsible for the e-
invoicing business and the Solution Services business area for Basware's
software business. The Network Services business aims at strong growth. The
Solution Services business aims at moderate growth and strong profitability.
The organizational restructuring has particularly aimed at accelerating the
deployment of company's services and products, accelerating the production of
SaaS and e-invoicing deals through product and process improvements and to make
operations more efficient and improve profit-making ability. The company will
continue to streamline its operations in 2014.
Basware expects its net sales and operating profit (EBIT) for 2014 to grow
compared to 2013.
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 2013, the Group parent company's distributable funds are EUR
88 866 295.46.
Basware's Board of Directors proposes to the Annual General Meeting that a
dividend of EUR 0.23 per share (2012: EUR 0.23) be paid for 2013.
Basware Corporation's Annual General Meeting will take place on Friday, February
14, 2014, at 10 a.m. at Tapahtumatalo Bank in Helsinki, Finland.
Espoo, Finland, January 24, 2014
BASWARE CORPORATION
Board of Directors
For more information, please contact
Esa Tihilä, CEO, Basware Corporation
Tel. +358 40 480 7098
Distribution:
NASDAQ OMX Helsinki Ltd
Key media
www.basware.com
