Basware Interim Report January 1 – September 30, 2019: Significant improvement in profitability, strong order intake from key markets
Basware Corporation, stock exchange release, October 22, 2019 at 8:45 am EEST
July-September 2019:
- Net sales EUR 36,823 thousand (EUR 33,991 thousand): increase of 8.3 percent, organic growth at constant currencies 7.7 percent
- Organic cloud revenue growth at constant currencies 10.7 percent, amounting to 67.9 percent (66.0%) of net sales
- Cloud ARR order intake amounted to EUR 5.5 million (EUR 4.5 million)
- Adjusted EBITDA EUR 4,702 thousand (EUR -877 thousand)
- Adjusted operating profit/loss EUR 729 thousand (EUR -3,600 thousand)
- Operating profit/loss EUR 940 thousand (EUR -3,787 thousand)
- Adjusted earnings per share (diluted) amounted to EUR -0.14 (EUR -0.21) and earnings per share (diluted) were EUR -0.13 (EUR -0.22)
January-September 2019:
- Net sales EUR 109,038 thousand (EUR 104,929 thousand): increase of 3.9 percent, organic growth at constant currencies 5.5 percent
- Organic cloud revenue growth at constant currencies 12.5 percent, amounting to 67.9 percent (62.5%) of net sales
- Cloud ARR order intake amounted to EUR 16.8 million (EUR 15.5 million)
- Adjusted EBITDA EUR 2,705 thousand (EUR -3,538 thousand)
- Adjusted operating profit/loss EUR -9,326 thousand (EUR -11,633 thousand)
- Operating profit/loss EUR -13,022 thousand (EUR 2,379 thousand)
- Adjusted earnings per share (diluted) amounted to EUR -1.09 (EUR -1.14) and earnings per share (diluted) were EUR -1.35 (EUR -0.18)
Key figures
| EUR thousand | 7-9/ 2019 |
7-9/ 2018 |
Change, % | 1-9/ 2019 |
1-9/ 2018 |
Change, % | 2018 |
| Net sales | 36,823 | 33,991 | 8.3 | 109,038 | 104,929 | 3.9 | 141,417 |
| Cloud revenue | 25,018 | 22,440 | 11.5 | 74,052 | 65,566 | 12.9 | 89,482 |
| Cloud ARR order intake | 5,455 | 4,483 | 21.7 | 16,821 | 15,531 | 8.3 | 21,474 |
| EBITDA | 4,913 | -1,064 | -991 | 10,474 | 9,217 | ||
| Adjusted EBITDA | 4,702 | -877 | 2,705 | -3,538 | -4,364 | ||
| Operating profit/loss | 940 | -3,787 | -13,022 | 2,379 | -1,471 | ||
| Adjusted operating profit/loss | 729 | -3,600 | -9,326 | -11,633 | -19.8 | -15,052 | |
| Gearing, %* | 45.4 | 9.6 | 45.4 | 9.6 | 14.9 | ||
| Cash and cash equivalents* | 30,640 | 46,235 | -33.7 | 30,640 | 46,235 | -33.7 | 40,747 |
| Free cash flow metric | -1,445 | -3,129 | 53.8 | -19,055 | -15,753 | -21.0 | -19,829 |
| Earnings per share, diluted, EUR | -0.13 | -0.22 | 42.9 | -1.35 | -0.18 | -0.49 | |
| Adjusted earnings per share,diluted, EUR | -0.14 | -0.21 | 32.4 | -1.09 | -1.14 | 4.8 | -1.44 |
| Personnel* | 1,299 | 1,736 | -25.2 | 1,299 | 1,736 | -25.2 | 1,412 |
* 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 third quarter of 2019 totalled EUR 1,179 thousand and EUR 3,549 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 1,093 thousand in the third quarter of 2019. Year-to-date the payments of lease liabilities totalled EUR 3,126 thousand.
- Interest expenses recognized from lease liabilities totalled EUR 216 thousand in the third quarter of 2019 and EUR 666 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 2019
Basware’s key strategic priority for the strategy period 2018-2022 is scalable cloud revenue growth. The company continues to strengthen its leading market position in order to grow scalable cloud revenue.
For 2019, Basware expects the following on an organic basis at constant currencies:
- Cloud revenues to grow at approximately 15 percent
- Total revenues to grow at approximately 5 percent
- Adjusted EBITDA to be EUR 3 million or better
CEO Klaus Andersen:
“Basware had strong cloud order intake in the US for the third quarter in a row. Overall our performance in the key markets was good. Quarterly order intake increased 21.7 percent and amounted to EUR 5.5 million. During the quarter amongst others we signed a significant new deal with a North American department store chain. We continued to sign new expansion projects with our existing customers such as Freeport Minerals Corporation and Lisi Aerospace as well as the UK public sector.
In the third quarter, cloud revenue increased 11.5 percent and total revenue increased 8.3 percent. The consulting business showed signs of improvement. As a result of the strong execution of the productivity programme, Basware’s profitability improved. Adjusted EBITDA amounted to EUR 4.7 million and operating profit reached positive EUR 0.9 million for the quarter. We are in a great place as a company to continue our focus on customer success and profitable growth.
I am particularly pleased about the fact that the average deal size from new customers has been increasing steadily in the first three quarters of the year as we make more deals with large international companies. As an independent industry analyst Gartner has assessed, Basware is “well suited to multinational organizations moving to digital procurement and looking to automate invoice processing.” It is part of our core strategy and creates a great foundation for our expansion business.”
Results briefing webcast and conference call
Basware arranges a briefing for analysts and press, where CEO Klaus Andersen comments 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, October 22, 2019 at 11 am EEST / 9 am BST
Place: Clarion Hotel Helsinki (Makasiini Event Venue, 2nd floor), Tyynenmerenkatu 2, Helsinki Finland
Video webcast: https://basware.videosync.fi/2019-q3-results
Teleconference numbers:
Finland: +358 981 710 310
Sweden: +46 856 642 651
UK: +44 333 300 08 04
US: +1 631 913 14 22
PIN: 11296989#
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.