BASWARE HALF YEAR FINANCIAL REPORT JANUARY 1 – JUNE 30, 2017 (IFRS)
Basware Corporation, stock exchange release, July 19, 2017 at 08:45
SUMMARY
Cloud revenues at historical high
January-June 2017:
- Net sales EUR 74 090 thousand (EUR 73 073 thousand): growth 1.4 percent.
- Cloud revenue growth of 23.4 percent, amounting to 51.4 percent (42.3 %) of net sales
- Adjusted EBITDA EUR -1 282 thousand (EUR -2 978 thousand)
- Adjusted operating result EUR -6 343 thousand (EUR -6 955 thousand)
- Adjusted earnings per share (diluted) EUR -0.51 (-0.47)
- Operating result EUR -7 859 thousand (EUR -7 714 thousand)
- Earnings per share (diluted) EUR -0.61 (-0.52)
April-June 2017:
- Net sales EUR 37 289 thousand (EUR 38 948 thousand): decline 4.3 percent
- Cloud revenue growth of 18.8 percent, amounting to 52.5 percent (42.4 %) of net sales
- Adjusted EBITDA EUR 320 thousand (EUR -2 461 thousand)
- Adjusted operating result EUR -2 149 thousand (EUR -4 589 thousand)
- Adjusted earnings per share (diluted) EUR -0.19 (-0.29)
- Operating result EUR -2 767 thousand (EUR -4 999 thousand)
- Earnings per share (diluted) EUR -0.24 (-0.32)
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
| 4-6/ | 4-6/ | Change | 1-6/ | 1-6/ | Change | 1-12/ | ||||
| EUR thousand | 2017 | 2016 | % | 2017 | 2016 | % | 2016 | |||
| Net sales | 37 289 | 38 948 | -4.3% | 74 090 | 73 073 | 1.4% | 148 580 | |||
| EBITDA | -298 | -2 870 | 89.6% | -2 798 | -3 737 | 25.1% | -5 394 | |||
| Adjusted EBITDA | 320 | -2 461 | -1 282 | -2 978 | 57.0% | 2 063 | ||||
| Operating result | -2 767 | -4 999 | 44.6% | -7 859 | -7 714 | -1.9% | -13 946 | |||
| % of net sales | ||||||||||
| Adjusted operating result | -2 149 | -4 589 | 53.2% | -6 343 | -6 955 | 8.8% | -6 490 | |||
| Result before tax | -3 621 | -5 622 | 35.6% | -9 707 | -9 395 | -3.3% | -16 256 | |||
| Result for the period | -3 414 | -4 528 | 24.6% | -8 794 | -7 485 | -17.5% | -14 318 | |||
| Return on equity, % | -11.0% | -13.2% | -13.9% | -10.7% | -10.5% | |||||
| Return on investment, % | -7.4% | -14.4% | -9.6% | -11.7% | -9.5% | |||||
| Cash and cash equivalents | 23 610 | 21 799 | 8.3% | 23 610 | 21 799 | 8.3% | 35 755 | |||
| Gearing, % | 13.9% | -4.7% | 13.9% | -4.7% | 8.7% | |||||
| Equity ratio, % | 56.1% | 66.1% | 56.1% | 66.1% | 58.5% | |||||
| Earnings per share | ||||||||||
| Diluted, EUR | -0.24 | -0.32 | 24.9% | -0.61 | -0.52 | -16.8% | -1.00 | |||
| Adjusted earnings per share diluted | -0.19 | -0.29 | 32.7% | -0.51 | -0.47 | -7.4% | -0.48 | |||
| Equity per share, EUR | 8.38 | 9.68 | -13.4% | 8.38 | 9.68 | -13.4% | 9.26 | |||
BUSINESS OPERATIONS
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:
As a shareholder, CEO and employee, what excites me about Basware is our mission to help organisations to simplify their operations and spend smarter. We help customers make their purchasing processes 100 percent paperless and we are the best placed to do this because of our Network, the largest e-invoicing network in the world. Every single organisation can make their purchasing processes better by adopting our solutions, and this huge market opportunity is worth EUR 15 billion annually in North America and Europe. The executive team at Basware all share my passion, and following stock purchases made this quarter, all members of the executive team are now Basware shareholders.
I’m therefore proud to report that this quarter we reached a number of key milestones on the route towards our strategic priority of cloud revenue growth. Basware recorded the highest ever quarterly cloud revenues in the second quarter of 2017. Cloud revenues now account for 53 percent of Basware’s total revenues, continuing to grow as a proportion of revenues after passing the 50 percent mark in the first quarter.
Basware’s subscription order intake continued to be strong, even against a strong comparison period in the second quarter of 2016. We won a number of significant deals from key customers including ATU, Tennis Australia, Thames Valley Police, Hoag Memorial Hospital and BSI (the British Standards Institution). These are just a selection of our wins in the second quarter, but they showcase the geographical and industry breadth of our customers. Our sales performance in the US market continues to be particularly pleasing, winning a number of deals against the US competition. In fact, the US is now the biggest contributor to our purchase-to-pay revenues.
Overall revenue and order intake performance in Network was not completely satisfactory this quarter, and the same in consulting. However, I am confident that there is significant further potential in both areas.
The strength of Basware is in its people, so I am very pleased that we further strengthened our sales team with the addition of new sales heads in the UK, Germany and Norway, who all started working at Basware this quarter. In May, our new SVP of Network and Financing Services and our new SVP of Customer Services both also began in their new roles.
Basware is recognised as a trail blazer by industry analysts and in May was cited as a Leader in “The Forrester Wave™: eProcurement, Q2 2017” report. According to the Forrester report, Basware excels in invoice automation for global organizations and is a particularly strong fit for enterprises that want to automate processing of high invoice volumes. Also in May, Basware announced the strengthening of its solutions with the addition of a new strategic sourcing offering to provide customers with a one-stop-shop for the entire Source-to-Pay process. Basware continued the strengthening of its brand with the launch of a new corporate website, which went live in May.
I am very pleased with the progress that Basware has made this quarter. We continue to win significant new customers, we continue to be recognised as an industry leader, and we continue to take actions to improve our operations. I remain very confident in our ability to capture the significant market opportunity ahead of Basware.
FUTURE OUTLOOK
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.
Outlook 2017
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, Wednesday, July 19, 2017
BASWARE CORPORATION
Board of Directors
Vesa Tykkyläinen, CEO, Basware Corporation
For more information, please contact:
Niclas Rosenlew, CFO, Basware Corporation
Tel. +358 50 480 2160, niclas.rosenlew@basware.com
Distribution:
Nasdaq Helsinki
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