BASWARE INTERIM REPORT JANUARY 1 - MARCH 31, 2011 (IFRS)
SUMMARY
January-March Q1: Strong start to 2011
* Net sales EUR 26 058 thousand (EUR 23 132 thousand) - growth 12.7 percent
* Operating profit EUR 2 957 thousand (EUR 2 136 thousand) - growth 38.4
percent
* Operating profit 11.3 percent of net sales (9.2%)
* Growth of Automation Services (SaaS and e-invoicing) 48.6 percent
The estimated revenue to be recognized for current Automation Services
agreements in production in the next twelve months is EUR 15.8 million,
growth from previous quarter 8.0 percent
* Recurring revenue (including Maintenance and Automation Services) 48.3%
(45.9%) of net sales
* Cash flow from operating activities EUR 14 623 thousand (EUR 11 115
thousand)
* Earnings per share (diluted) EUR 0.19 (0.14 ) - growth 34.9 percent
Basware expects, as earlier estimated, its net sales for 2011 to grow over 10
percent from the previous year. Operating profit (EBIT) for 2011 is expected to
be over 13 percent of net sales
The interim report is unaudited.
GROUP KEY FIGURES
1-3/ 1-3/ Change, 1-12/
EUR thousand 2011 2010 % 2010
------------------------------------------------------------------------
Net sales 26 058 23 132 12.7 103 094
EBITDA 4 169 3 373 23.6 18 604
Operating profit before IFRS3 amortization 3 458 2 692 28.4 15 691
Operating profit 2 957 2 136 38.4 13 487
% of net sales 11.3% 9.2% 13.1
Profit before tax 2 930 2 142 36.8 13 325
Profit for the period 2 268 1 582 43.3 10 331
Return on equity, % 11.4% 11.2% 16.7
Return on investment, % 14.7% 14.1% 20.1
Liquid assets *) 48 295 16 351 195.4 13 822
Gearing, % -50.7% -19.4% -15.3
Equity ratio, % 71.0% 59.1% 73.3
Earnings per share, EUR 0.19 0.14 33.9 0.90
Earnings per share (diluted), EUR 0.19 0.14 34.9 0.89
Equity per share, EUR 7.11 4.92 44.4 5.78
*) Includes cash, cash equivalents and financial assets at fair value through
profit or loss
REPORTING
Basware's reporting segment is based upon geography as follows: Finland,
Scandinavia, Europe and Other. The Finland segment includes the Finnish,
Russian, Asia-Pacific (excluding Australia) business operations and corporate
services. The Other segment includes North America and Australia.
In addition, the company reports revenue from products and services as follows:
License Sales, Professional Services, Maintenance and Automation Services.
License Sales consist of the Purchase to Pay (P2P) product suite and financial
management and payment automation solutions that are only marketed in Finland.
Automation Services include paper invoice scanning services, exchange of
purchase catalogues and purchase messages, e-invoicing, activation service, and
Software as a Service (SaaS) services.
The company also reports an estimate of revenue to be recognized for current
Automation Services agreements in the next twelve months. Automation Services
agreements are typically in force for a fixed period of several years or until
further notice.
Basware's CEO Ilkka Sihvo comments in conjunction with the Interim Report:
"The first quarter of the year succeeded according to our expectations. Net
sales grew by 12.7 percent and operating profit by as much as 38.4 percent to
EUR 2 957 thousand. Automation Services grew by 48.6 percent and Professional
Services showed a solid growth of 9.9 percent during the first quarter, compared
to the soft growth in early 2010. All geographical areas showed stable growth.
Recurring revenues (includes Maintenance and Automation Services) accounted for
over 48 percent of total net sales. Strong growth of recurring revenue and
number of personnel growing mainly in India contributed to the improved
profitability. The performance in the first quarter provides a good starting
point for the rest of the year.
Basware ranked second in The Forrester Wave TM: eProcurement Solution Q1 2011
study published in March in all sectors: strategy, portfolio and regional
coverage. This is a significant acknowledgement to Basware in an international
comparison, proving the competitiveness of our product and service offering in
the international market."
Market outlook and operating environment
Market forecasts updated at the end of 2010 and at the beginning of 2011 expect
software purchases to increase by 7.1 percent globally and 8.4 percent in the
U.S. in 2011. The entire IT services market is expected to grow by 7.3 percent
globally and by 7.4 percent in the U.S. in 2011.
The number of acquisitions and partnerships has increased in the market.
Companies active in the market are trying to strengthen their supplier networks
and expand geographically. Consolidation is expected to continue in the business
environment, with the role of services growing in companies' portfolios.
Basware software still offer a competitive edge, thanks to the integrated
offering consisting of new added value products, services and products. The next
generation of solutions will improve the company's competitiveness in the long
term. Automation Services will have a positive impact on the competitiveness,
improving the predictability and transparency of the company's net sales and
profitability in the long term.
Basware aims to become a leading company in e-invoicing worldwide. E-invoicing
and the supporting Connectivity Services are targeted to connect suppliers and
buyers also outside of Basware's existing software customer base, leading into a
higher potential. The penetration rate of e-invoicing is low, which creates a
solid foundation for the future growth of Basware Automation Services.
In order to consolidate international growth further, Basware is increasing the
focus on acquisitions in its strategy and organization. The company has been
active in mergers and acquisitions and is now further strengthening the activity
by establishing a new executive team-level M&A function.
The role of offshoring operations will continue to grow in the company's
strategy. R&D and Automation Services operations at Basware's Indian office have
already succeeded in gaining a significant role. The company is surveying the
development of offshoring in order to improve profitability also with regard to
new service business operations and internal support functions. The company is
also investigating the possibility of new geographical regions in expanding
offshoring.
Based on Financial Supervisory Authority's recommendation (standard 5.2b)
Basware has changed the interim report publishing format. This release publishes
the enclosed interim results for the first quarter of 2011. Interim results can
also be found at: www.basware.com
Outlook for 2011
Basware expects, as earlier estimated, its net sales to grow over 10 percent in
2011. Operating profit (EBIT) for 2011 is expected to be over 13 percent of net
sales.
Espoo, Finland, April 13, 2011
BASWARE CORPORATION
Board of Directors
For more information, please contact
CEO Ilkka Sihvo, Basware Corp.,
Tel. +358 40 501 8251
Analyst and Press Briefing
Basware arranges today, April 13, 2011 a briefing on the Interim Report for the
press and analysts at 11:00 a.m. in Hotel Kämp, Pohjoisesplanadi 29, Helsinki,
Finland. During this briefing CEO Ilkka Sihvo and CFO Mika Harjuaho will comment
on the events and financial performance of the quarter. Welcome. A conference
call for analysts who are not able to attend the briefing will take place on
April 13 at 3 p.m. EEST. Please register through IR@basware.com for appropriate
information.
Distribution:
NASDAQ OMX Helsinki Ltd
Key media
www.basware.com
Enclosure: Basware interim report for Q1/2011
