Basware Interim Report January 1–March 31, 2019: Cloud revenues increased 14 percent, cloud now 68 percent of total revenue
Basware Corporation, stock exchange release, April 30, 2019 at 8.45 am EEST
January-March 2019: Cloud revenues increased 14 percent, cloud now 68 percent of total revenue
- Net sales EUR 35,895 thousand (EUR 35,969 thousand): decrease of -0.2 percent, organic growth at constant currencies 5.7 percent
- Organic cloud revenue growth at constant currencies 14.4 percent, amounting to 67.6 percent (59.3%) of net sales
- Cloud ARR order intake amounted to EUR 4.9 million (EUR 4.7 million)
- Adjusted EBITDA EUR -1,699 thousand (EUR 12 thousand)
- Adjusted operating profit/loss EUR -5,820 thousand (EUR -2,618 thousand)
- Operating profit/loss EUR -7,780 thousand (EUR 12,495 thousand)
- Adjusted earnings per share (diluted) amounted to EUR -0.43 (-0.61) and earnings per share (diluted) were EUR -0.57 (0.45)
|EUR thousand||1-3/2019||1-3/2018||Change, %||2018|
|Cloud ARR order intake||4,937||4,657||6.0%||21,474|
|Adjusted operating profit/loss||-5,820||-2,618||122.3%||-15,052|
|Cash and cash equivalents||35,117||54,183||-35.2%||40,747|
|Earnings per share, diluted, EUR||-0.57||0.45||-0.49|
|Adjusted earnings per share,diluted, EUR||-0.43||-0.61||-28.7%||-1.44|
|Personnel at the end of the period||1,386||1,768||-21.6%||1,412|
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 first quarter of 2019 totalled EUR 1,251 thousand. 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 953 thousand during the first quarter of 2019.
- Interest expenses recognized from lease liabilities totalled EUR 219 thousand in the first quarter of 2019.
- 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 at breakeven or better
Interim CEO Klaus Andersen:
“In the first quarter of 2019, Basware continued to achieve record high quarterly cloud revenues. Cloud revenues increased 14 percent, which was an acceleration from the last quarter of 2018. During the quarter Basware signed important new deals with FirstGroup America, Sony Music Entertainment and Innio, amongst others. We also continued to sign add-on sales with existing clients such as Fresenius, Vinci and Marienhaus.
Cloud order intake amounted to EUR 4.9 million and we made good progress in orders received from new customers during the quarter. Although customer activity continued on a high level in the US and France, in other markets the speculation of a possible tender offer had a negative effect on the timing of some deals closing in the quarter. In the first two weeks of April, we closed deals with three new customers.
Adjusted EBITDA amounted to EUR -1.7 million, impacted partly by temporarily higher hosting costs related to the migration of major products to AWS.
Basware’s cloud revenue has reached 68 percent of total and Basware is ready to move towards the next phase in the cloud transformation. Focus will now change towards a balance between cloud growth and profitability. We will initiate a productivity program, which aims to improve our profitability by focusing on a number of areas including making professional services profitable, streamlining the product portfolio, R&D and production operations as well as corporate support functions. Basware expects annual run-rate savings of EUR 10 million and to reach positive EBIT in 2020 and positive free cash flow on a run-rate basis by the end of 2020.”
Results briefing webcast and conference call
Basware arranges a briefing for analysts and press, where interim CEO Klaus Andersen and CFO Niclas Rosenlew 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: Tuesday, April 30, 2019 at 11 am EEST / 9 am BST
Video webcast and teleconference registration: https://basware.videosync.fi/2019-q1-interim-report
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For further information, please contact:
Ben Selby, VP IR & Treasury, Basware Corporation
Tel. +358 50 305 8077, email@example.com
Basware (Nasdaq: BAS1V) is the global leader in providing networked source-to-pay solutions, e-invoicing and value-added services. Basware’s commerce and financing 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. Find out more at https://investors.basware.com/en.
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