Basware Interim Report January-September 2021: Robust operating profit performance, Cloud revenue 80% of net sales

Basware Corporation, stock exchange release, 19 October 2021 at 8.45 a.m. EEST

July-September 2021

• Cloud ARR order intake amounted to EUR 2.6 million (EUR 3.6 million)
• Net sales increased 0.9 percent to EUR 37,100 thousand (EUR 36,772 thousand), which amounted to 0.2 percent organic growth at constant currencies
• Cloud revenue increased 9.8 percent to EUR 29,693 thousand (EUR 27,037 thousand), which amounted to 9.1 percent organic growth at constant currencies
• EBIT increased 17.5 percent to EUR 2,432 thousand (EUR 2,069 thousand)
• Earnings per share (diluted) were EUR -0.74 (EUR -0.06)

January-September 2021

• Cloud ARR order intake amounted to EUR 11.1 million (EUR 13.3 million)
• Net sales increased 0.6 percent to EUR 113,413 thousand (EUR 112,787 thousand), which amounted to 1.0 percent organic growth at constant currencies
• Cloud revenue increased 8.2 percent to EUR 88,369 thousand (EUR 81,652 thousand), which amounted to 8.7 percent organic growth at constant currencies
• EBIT increased 62.5 percent to EUR 5,612 thousand (EUR 3,454 thousand)
• Earnings per share (diluted) were EUR -0.94 (EUR -0.38)

Key figures

¹ At the end of the period.

The interim report is unaudited.

Guidance for 2021

Basware expects the gradual normalization of the business environment to continue in Q4 2021 and keeps guidance for the full year 2021 unchanged:

• Modest positive Net sales growth on an organic constant currency basis

• EBIT approximately at the same level or better than the previous year

CEO Klaus Andersen:

“Basware’s net sales and profitability continued to grow during the third quarter of the year. Total net sales were EUR 37.1 million, which amounted to 0.2% organic growth at constant currencies. Cloud revenue grew with 9.1% to EUR 29.7 million, now 80% of net sales, and Maintenance revenues declined according to expectations. We saw a slight decrease in Consulting revenues driven by lower project activity. EBIT amounted to EUR 2.4 million for the quarter, which is a growth of 17.5% compared to the corresponding period last year. Cash flow from operating activities was EUR 4.0 million for the quarter.

In this quarter we signed a significant enterprise agreement with a large North American fast-food chain, which will become one of our biggest engagements when fully implemented. This contract is not included in our reported Cloud order intake this quarter, due to the ramp-up structure of the agreement. In addition to this contract, EUR 2.6 million order intake was closed in Q3. Uncertainty in the business environment in general remains and has amplified the demand for more flexible cloud service terms and ramp-up structures. This impacts the order intake timing for these typically larger customers, because order intake will be reported incrementally as the engagement ramps up. New logos were added in all regions, and we are pleased to announce that amongst other names, we added Northern Territory Government, Southern Cross Care, Pernod Ricard North America, Gren Holding and Beekenkamp to our customer portfolio. Our expansion business continued to be consistent and strong. In this quarter more than hundred customers expanded their cloud service usage with us, which contributed to more than half of the reported order intake. Approximately one third of the order intake in the quarter was generated either indirectly or together with our partners.

We continued to bring innovations to the market also this quarter. The end-user adoption rate for our next generation user interface, AP-Pro, accelerated and today approximately two-thirds of all end-users have moved entirely to AP-Pro. We introduced significant new capabilities for the AP Power user role during the quarter which together with further automation capabilities, will facilitate the journey towards 100% AP-Pro user adoption even further. The number of customers using Basware’s Procurement offering is increasing steadily. End of this quarter more than 120 customers actively used the procurement service in their daily operations. That is an annual growth rate of more than 40%. Our SmartPDF invoicing services, including SmartPDF AI, is also gaining momentum. The amount of PDF invoices we processed through our highly automated SmartPDF services reached annualized volumes of 2.4 million invoices this quarter, which is four times the volumes processed in the beginning of the year. Our operational capabilities in this area are rapidly becoming more scalable, and we expect to see continued growth in our SmartPDF invoicing service going forward. 

In August, we announced that Alwin Schauer has been appointed Chief Revenue Officer of Basware and member of the Executive Team starting 1st of September. Alwin Schauer joined Basware from Software AG and has extensive cloud sales experience also from his more than seven years at Salesforce. Sales execution and efficiency as well as continued successful execution of our partner strategy remains a focus area and I am truly pleased to have Alwin on board to lead our global Go-To-Market organization towards accelerated growth and increased operational efficiency in line with our strategy of sustainable growth and profitability. 

Based on the development of our financial performance year-to-date and our estimates for the rest of the year, we are increasingly confident with reaching our full year guidance. At the same time, even with a certain level of market uncertainty continuing, we are well positioned to continue our journey of sustainable growth and profitability also in the long-term.”

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 shortly after the event.

Time: Tuesday, 19 October 2021 at 2 p.m. EEST / 12 p.m. BST
Place: Basware HQ, Linnoitustie 2, Cello-building, Espoo, Finland
Video webcast and teleconference registration: https://basware.videosync.fi/2021-q3-results

Teleconference numbers:

Finland: +358 981 710 310
Sweden: +46 856 642 651
United Kingdom: +44 333 300 0804
United States: +1 631 913 1422

PIN: 47864667#

To join in analysts and press briefing, please contact ir@basware.com.

Basware Corporation

Klaus Andersen
CEO

For more information, please contact:
Martti Nurminen, CFO, Basware Corporation
Tel. +358 (0)40 751 7194, martti.nurminen@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 organizations with 100% spend visibility by enabling the capture of all financial data across procurement, finance, accounts payable and accounts receivable functions. Basware's solutions play an important role in transitioning to a lower-carbon economy by enabling the digitalization and automation of Purchase-to-Pay enterprise processes that rely on paper. 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.