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INTERIM REPORTQ3/2015
ESA TIHILÄ, CEO
NICLAS ROSENLEW, CFO
OCTOBER 12, 2015
INTERIM REPORTQ3/2015
BUSINESS REVIEW
KEY EVENTS IN Q3/2015
Year-on-year growth in key markets at a good
level: net sales grew in the UK 185%,
the US 51% & Germany 44%
Building Financing Services business &
services has continued
Revenue developed favourably with
key markets growing 95%:Basware Commerce
Network
The milestone of 100 million
annualized transactions
reached
Q3/2015 KEY FINANCIALS
• Net sales EUR 33 569 thousand
(EUR 30 164 thousand), +11.3%
• Operating profit EUR 996 thousand
(EUR 1 162 thousand)
Net sales
EUR thousand
-
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
Q1 Q2 Q3 Q4
2010 2011 2012 2013 2014 2015
Q3/2015 IN BRIEF
Revenue growth of 11.3% year-on-year:
Network Services
growth
Network Services revenue
grew 48.3% year-on-year
NETWORK SERVICES
Sales grew well; +48.3% year-on-year
Growth of transaction volume continued, +23%
year-to-date, 68.8m transactions at the end of period
SOLUTION SERVICES
Order intake continued steadily; SaaS revenue grew
18.0% year-on-year
23 Alusta agreements
Faster than expected decrease in license sales
FINANCING SERVICES
12 new customers in the UK, the US and Finland
for Basware Pay & Basware Discount
GROWTH OF TRANSACTION VOLUMES 2010 – Q3/2015
-
5,0
10,0
15,0
20,0
25,0
Q1 Q2 Q3 Q4
2010 2011 2012 2013 2014 2015
Million transactions The growth in the transaction volume continued, +23% year-to-date:
• 68.8 million transactions
• 23.1 million transactions in Q3
• An all-time-high, 8.2 million transactions in September
SHARE OF RECURRING REVENUE, ROLLING 12 MONTHS AVERAGE
The share of
recurring revenue
of net sales increased
to 72.2 % (70.1%) in
Q3/2015
Net sales
Share of
recurring
revenue, rolling
4 quarters
average
0,0 %
10,0 %
20,0 %
30,0 %
40,0 %
50,0 %
60,0 %
70,0 %
80,0 %
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
Q1/
10
Q2/
10
Q3/
10
Q4/
10
Q1/
11
Q2/
11
Q3/
11
Q4
/11
Q1/
12
Q2/
12
Q3/
12
Q4/
12
Q1/
13
Q2/
13
Q3/
13
Q4/
13
Q1/
14
Q2/
14
Q3/
14
Q4/
14
Q1/
15
Q2/
15
Q3/
15
EUR thousand
SAAS VERSUS LICENSE SALES DYNAMICS
License salesSaaS
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
90 %
100 %
2010 2011 2012 2013 2014 Q3/2015
INTERIM REPORTQ3/2015
FINANCIAL REVIEW
-2,0
4,0
10,0
16,0
0,0
10,0
20,0
30,0
Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/2015
Net sales Operating profit
BASWARE GROUP
EUR thousand Q3 2015 Q3 2014 YoY growth Q2 2015 QoQ growth
Net sales 33 569 30 164 11.3% 36 590 -8.3%
Material and services -3 852 -3 201 20.3% -4 437 -13.2%
Personnel expenses -19 238 -17 337 11.0% -23 221 -17.2%
Depreciation and amortization -1 827 -1 760 3.8% -1 822 0.3%
Other operating expenses -7 654 -6 760 13.2% -8 870 -13.7%
Operating result (EBIT) 996 1 162 -14.3% - 1 757
Net result 1249 777 60.7% - 1 715
EPS, EUR (diluted) 0.09 0.05 80.0% -0.12
Personnel 1 653 1 480 11.7% 1 649 0.2%
EUR million
NETWORK SERVICES & SOLUTION SERVICES IN Q3/2015
Solution Services (software solutions & services):
EUR 21 758 (22 200) thousand, -2.0%;
SaaS developed favourably, offset by the decline in
license sales
Network Services (e-invoicing solutions & services):
EUR 11 810 (7 964) thousand, +48.3%;
growth supported by organic growth & acquisition in Q2
Net sales by business in Q3/2015:
(25 642, -0.6 %) 4 000
6 000
8 000
10 000
12 000
14 000
NETWORK SERVICES
10 000
15 000
20 000
25 000
Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15
SOLUTIONS SERVICESEUR thousand
EXPENSES, FINANCING & INVESTMENTS
Operating expenses* amounted to EUR 91 550 thousand (81 406), +12.5%
Operating expenses include approximately EUR 2 600 thousand non-recurring expenses
R&D expenses amounted to EUR 14 654 thousand (12 830), 14.1% of net sales (13.8%)
Capitalized R&D expenses amounted to EUR 5 865 thousand (2 853)
The operative cash flow amounted to EUR 12 407 thousand (13 931)
Cash & cash equivalents amounted to EUR 36 824 thousand (60 156)
Continuing year-to-date investment activities:Stable balance sheet
Cash & cash equivalents of
EUR 36 824 thousand
Loans related to Procserve
acquisition fully paid in Q3
*Operating expenses include employee benefits, depreciations &
amortizations, and other operating expenses
INTERIM REPORTQ3/2015
FUTURE OUTLOOK
STRATEGIC OBJECTIVES AND NEAR TERM PRIORITIES
Network Services Financing Services
• Rapidly grow # of companies
& transactions
• Extend Basware Commerce
Network coverage
• Build a leading portfolio of
innovative financing services
• Multiply value of P2P &
e-invoicing to our customers
Key
objec-
tives
• Simplify access of SMBs to
Basware Commerce Network
• Partnerships and M&As
• Deploy more customers for
working capital management
• Introduce new innovations
Near
term
priori-
ties
• Extend market leadership
• Continue driving innovation
Solution Services
• Drive completeness
• Operational excellence
across delivery
THE BASWARE COMMERCE NETWORK
BASWARE
COMMERCE
NETWORK
The world’s largest open commerce network - connecting buyers and suppliers,
improving relationships and ultimately enabling the flow of commerce.
> 1.2m end-users
> $500bn annual spend
100m business documents *annualized
Users in >100 countries
> 1m active buyers
& suppliers
> 200 interoperability
partners
VAT compliance in
> 50 countries
> 70 formats supported
BUSINESS TO GOVERNMENT (B2G)E-INVOICING INITIATIVES
Increased awareness of the benefits
Cooperation, enhanced technologies,
easy use & open networks
Learnings from other countries and
governments & private sector
Governments under pressure to
reduce costs & be more efficient
KEY DRIVERS IN E-INVOICING:Recent published B2G
e-invoicing initiatives
Ongoing push in Italy,
Spain, Portugal and
Slovenia
UK: Procurement Policy
Note of 06/2015
Switzerland by 2016
France by 2017
US by 2018
www.basware.com/public-sector
BASWARE P2P PAYS BACK IN NO TIME
“We systematically go after
achieving early-pay discounts.
In the past, we captured about
50% of all early-pay discounts
that were available to us; with
Basware, we were able to
push it to 95%.”
Manager, finance at a large
manufacturing company
“We can now finally see — on a
nationwide level — which actual
suppliers we use and how much we use
them. We can use these insights to
better negotiate with existing suppliers
and even contract with suppliers in
areas where we previously didn’t have
any arrangements.”
Development manager at a large
property management company
A COMMISSIONED STUDY CONDUCTED BY
FORRESTER CONSULTING ON BEHALF OF
BASWARE:
BASWARE OUTLOOKBasware expects its net sales and operating profit (EBIT) for 2015 to grow compared to 2014:
Strong growth in Network Services by developing & automating the connection of buyers and suppliers to the e-invoicing service, by utilizing digital marketing and sales channels more extensively, and through acquisitions
Sales of Alusta are expected to have a positive effect on software net sales and professional services.
Operating expenses are expected to develop moderately, the company is actively managing its cost base and has initiated several productivity improvement programs during 2015. Seasonality affects Basware’s business throughout the year, and typically the last quarter of the year has been the strongest quarter.
The company will invest more extensively in sales and marketing as well as research and development of new solutions and services, including Financing Services.
In 2015, the acquisition of Procserve and related integration costs are expected to exceed the savings starting from the second quarter of the year and the cost synergies to be net positive next year. The joint venture which has been established with Arrowgrass Capital Partners LLP is expected to add net costs in 2015.
Active analysis of acquisition targets especially in the e-invoicing market in Europe and in the U.S. will continue.
MORE INFORMATION:
Investors
www.basware.com/investors
Baswarewww.basware.com
www.twitter.com/basware
www.facebook.com/BaswareCorporation
www.linkedin.com/company/basware
The Total Economic Impact™ of Basware’sIntegrated Purchase-to-Pay (P2P) Software Solution
www.basware.com/knowledge-center
Q4 INTERIM REPORT IN EARLY 2016,
TO BE ANNOUNCED
NEXT REPORT