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Basware Half Year Financial Report January-June 2020: Better than expected performance driven by consistent execution despite Covid-19

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Basware Corporation, stock exchange release, July 16, 2020 at 8.45 am EEST

April-June 2020

  • Cloud ARR order intake amounted to EUR 6.1 million (EUR 6.4 million)
  • Net sales increased 4.0 percent to EUR 37,769 thousand (EUR 36,320 thousand), which amounted to 4.5 percent organic growth at constant currencies
  • Cloud revenue increased 8.4 percent to EUR 26,841 thousand (EUR 24,752 thousand), which amounted to 8.8 percent organic growth at constant currencies.
  • EBIT amounted to EUR 1,285 thousand (EUR -6,181 thousand)
  • Earnings per share (diluted) were EUR -0.07 (EUR -0.65)

January-June 2020

  • Cloud ARR order intake amounted to EUR 9.7 million (EUR 11.4 million)
  • Net sales increased 5.3 percent to EUR 76,014 thousand (EUR 72,215 thousand), which amounted to 5.6 percent organic growth at constant currencies
  • Cloud revenue increased 11.4 percent to EUR 54,615 thousand (EUR 49,034 thousand), which amounted to 11.5 percent organic growth at constant currencies.
  • EBIT amounted to EUR 1,385 thousand (EUR -13,962 thousand)
  • Earnings per share (diluted) were EUR -0.33 (EUR -1.22)

Key figures

EUR thousand 4-6/
2020		 4-6/
2019		 Change, % 1-6/
2020		 1-6/
2019		 Change, % 2019
Net sales 37,769 36,320 4.0 76,014 72,215 5.3 148,302
Cloud revenue 26,841 24,752 8.4 54,615 49,034 11.4 101,442
Cloud ARR order intake 6,130 6,429 -4.7 9,747 11,365 -14.2 23,694
EBIT 1,285 -6,181 1,385 -13,962 -14,537
EBITDA 5,156 -2,245 9,226 -5,905 1,403
Gearing, %1 53.4% 42.1% 26.7 53.4% 42.1% 26.7 48.9
Cash and cash equivalents1 34,850 63,373 -45.0 34,850 63,373 -45.0 31,672
Cash flows from operating activities 5,597 -3,665 12,093 -2,039 4,159
Free cash flow metric -1,293 -9,794 86.8 -4,873 -17,610 72.3 -23,829
Earnings per share, diluted, EUR -0.07 -0.65 89.0 -0.33 -1.22 73.3 -1.63
Personnel1 1,343 1,354 -0.8 1,343 1,354 -0.8 1,325

1 At the end of the period.

The interim report is unaudited.

Guidance for 2020 unchanged

Basware reiterates full year guidance as announced on April 21, 2020.

Due to the Covid-19 pandemic, the current economic outlook in Basware's main markets involve significant uncertainties. Basware assumes that global business activity will be negatively impacted in the second and third quarters, and in the fourth quarter business activity will gradually head towards more normal conditions. Net Sales guidance will be given when it is possible to estimate the Covid-19 pandemic effects more precisely.

Basware’s cost base is scalable and has variable cost components that can be reduced to a certain extent to maintain profitability. EBIT for 2020 is expected to be positive.

CEO Klaus Andersen:

“I am very pleased with our achievements this quarter. It clearly shows the resilience of our business and our ability to adjust. We continued to serve our customers in extraordinary times and consistently execute our strategy. Considering the current business environment where there is significant uncertainty caused by Covid-19 pandemic, our sales performance in the second quarter was very strong and order intake amounted to EUR 6.1 million. Dr1v Automotive, Restalliance, Munters and Fieldale Farms Corporation, among others chose our market leading solutions this quarter. As countries slowly began to reopen, we also saw positive development in our sales pipeline in the latter part of the quarter.

Cloud revenues increased 8 percent in the quarter. Transaction volumes in the Basware Network declined during April and May but regained momentum, and in June they were almost at the same level as last year. Total revenues amounted to EUR 37.8 million, an increase of 4 percent compared to second quarter of 2019. Scalability of the business continues to progress, and we were able to improve EBIT sequentially from the first quarter of the year despite the challenges caused by the pandemic. Basware reiterates its positive EBIT guidance for full year 2020 and net sales guidance will be issued once there is clearer visibility on the effects of the Covid-19 pandemic on Basware’s business in 2020.

The team at Basware has adjusted to the current circumstances, successfully operating with remote ways of working in all business functions in all countries. We have followed the cost actions announced in the first quarter and have not needed to take further measures. We solved the capacity issues in validation services with the third-party provider beginning of June and since then Basware has been fully operational at normal service levels.

We also continued to execute on our R&D initiatives as planned in the second quarter. Leveraging artificial intelligence and machine learning across the solution suite will further improve efficiency and scalability to our customers. In this quarter the next generation of our SmartPDF service, which uses machine learning to capture invoice data without any human intervention, was launched for selected pilot customers. A very important milestone reached this quarter.

The Covid-19 pandemic has created unprecedented challenges to many organizations, especially those that still have manual and paper-based invoice and procurement processes. Digital and automated Purchase-to-Pay processes are crucial for cash flow management and optimizing spend, as well as for enabling remote work. The long-term outlook for cloud-based networked Purchase-to-Pay solutions remains highly attractive.”
 

Results conference call

Basware arranges a briefing for analysts and press, where CEO Klaus Andersen and CFO Martti Nurminen will 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: Thursday, July 16 at 11 am EEST / 9 am BST

Place: Basware HQ, Linnoitustie 2, Cello -building, Espoo, Finland

Video webcast and teleconference registration: https://basware.videosync.fi/2020-q2-results

Teleconference numbers:

Finland: +358 981 710 310

Sweden: +46 856 642 651

UK: +44 333 300 0804

US: +1 631 913 1422 

PIN: 63299134#

 

Basware Corporation

Klaus Andersen

CEO

For more information, please contact:

Ben Selby, VP Investor Relations and 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 and e-invoicing 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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