B A S W A R E Roadshow presentation June 2020
IMPORTANT NOTICE The follow owing infor ormation co conta tains, or or may be be de deemed to to cont ntain, n, for orwa ward rd-look oking state tement nts. These state tement nts re relate te to to futur uture eve vent nts or or futur uture financ ncial perfor ormance nce, inc nclud uding, g, but ut not ot limite ted to, expecta ctations re regard rding market gr growt wth and nd de deve velopment nt as as we well gr grow owth th and nd profita tability ty of of Baswa ware re. In In som ome ca cases, suc uch for orwa ward rd-look oking state tement nts ca can be be ide dent ntified by by te terminology gy suc uch as as “expect”, “plan”, “anticipate”, “intend”, “believe”, “estimate”, “predict”, “potential”, or or “continue”, or or the nega gati tive ve of of thos ose te terms or or ot other co comparable te terminology gy. By By their na nature ture, for orwa ward rd-look oking state tement nts involve ve risks and nd unce ncerta rtaint nties becau cause th they re relate te to to eve vent nts and nd de depend on on circ circum umstance nces that may or or may not ot occ occur ur in in th the futur uture. Futur uture re results may vary ry from the results exp xpre ressed in, or or implied by, the forw orward rd-look oking ng state tement nts, pos ossibly to to a mate terial de degre gree. All forw orward rd-loo ooking state tement nts inc nclude uded here rein are re based on on infor ormation pre resently available to to Basware re and, d, acc ccordi rdingly, Basware re assumes no no obligation to to up update te any ny forw rward rd-loo ooking sta tate tement nts, unless obligate ted to to do do so so pur ursua uant nt to to an an applicable law law or or regul ulati tion. Not othing in in this pre resent ntation on cons nstitute tutes inve nvestm tment nt adv dvice ce and nd this pre resent ntation on shall no not co constitute tute an an of offer to to sell or or the solicitati tion of of an an offer to to buy any secur uriti ties of of Basware or or otherwise to to engage in in any investment activity ty. 2
B A S W A R E I N B R I E F 73% revenue We help our customers comes from cloud simplify operations and spend smarter by automating Nordics their procurement and finance processes 38% We are the global leader with Americas 33% 23% Europe largest e-invoicing network in the world 5% APAC #1 in accounts payable automation and #1-3 in % Revenue by area (Q1/2020) procurement EUR 148 million ~1,325 employees Customers in EUR 800 billion 100+ countries in 14 countries managed spend in 2019 revenue in 2019 3
S I M P L I F Y O P E R A T I O N S , S P E N D S M A R T E R Analyze Pay Source From inefficient → to AP automation invoice process From uncontrolled → to spend under spend management Match Shop From lack of → to optimize spend cashflow visibility with analytics 307% return on investment and a payback time of 12 months 1) Invoice Order 1) Total economic impact of Basware’s Purchase -to-Pay Cloud Solution, Forrester 2017 Receive 4
I N V E S T M E N T H I G H L I G H T S • Leader ader in netw twor orked ked purchase hase-to to-pay pay Market rket leader er with th unique ue Large gest st e-invoi voici cing ng netw twork and innova vato tor • offering ng in analyti lytics • Acti tions s on-goin going g to impr prove ve prof ofita tabi bilit lity Prof ofitable able cloud ud grow owth while le retai taining g cloud ud grow owth th EUR R 15 bill llion market ket pote tentia ntial • Large ge addressab essable le market ket 5
R E C O G N I Z E D M A R K E T L E A D E R FORRESTER WAVE: ePROCUREMENT PLATFORMS, Q4 2019 MAGIC QUADRANT FOR PROCURE TO PAY SUITES 2019 Leader with strong market understanding, innovation 5/5 in Product strategy | 5/5 in Globalization | 4.2/5 in Invoice Processing and product roadmap, and customer experience “well suited to multinational organizations moving to digital “a leading choice for CPOs and CFOs who aim at achieving procurement and looking to automate invoice processing” 90% or more process automation across their P2P spend” 6
C O M P E T I T I V E D I F F E R E N T I A T O R S ANALYTICS YTICS E-INVO INVOIC ICIN ING G NETWO TWORK RK PROCU CURE REMENT NT & AP AUTOM OMATION ATION - 100% 0% invoice ice - 100% 0% end-user user - 100% 0% spend nd capture ture adoptio ption visibi ibility ity LARGE GEST ST & MOST ST GLOBAL BAL E-IN INVOIC VOICIN ING G NETWO TWORK RK €800BN SPEND – 150M 0M+ + INVOICES ICES 7
B A S W A R E C H O S E N B Y C U S T O M E R S A C R O S S T H E W O R L D Services Automotive Manufacturing Industrials Healthcare / Pharma Transport Telco / Media Retail Energy / Utility Finance / Professional Geographies where Basware supports customers Food / Beverage Public Sector EUR 800 billion 1.5m+ + organisations connected to network spend managed in 2019 8
T H E J O U R N E Y T O C L O U D TRANSFORMATION CONSOLIDATION OPTIMIZATION Push to cloud Grow profitably Finetune Client transformations Mature processes Adaptive optimization Consolidate systems Subscription pricing Drive efficiency and Achieve step change in cost margins All new business is cloud base Strategic investments Drive efficiency Making it happen – cloud Cloud growth and growth Cloud growth & margins profitability 9
F R O M T R A N S I T I O N T O P R O F I T A B L E G R O W T H Push to Cloud Simplification and profitable growth Sale of non- Productivity Robust Scanning strategic programme business services Consolidation businesses Launched in development outsourced of R&D sites in 2018 Q1/19 in H2/19 Cloud Cloud focused Transition Functional Consolidation of Q1/20 Cloud revenues strategy in to AWS organization product revenue +14% YoY reach 2/3 of 2016 initiated portfolio EBIT 0.1M€ total 10
C O N T I N U E D C L O U D R E V E N U E G R O W T H EUR million 1) 30 ▪ Cloud revenue growth +14% in 25 Q1/20* ▪ Cloud 73% of total revenue 20 Maintenance, license and other ▪ 15 revenue declines in line with 10 expectations as Basware transitions customers to cloud 5 0 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Cloud revenue Consulting Maintenance, license and other revenue 1) Q1/2017-Q2/2018 revenue has been adjusted for disposals and is indicative only. *Organic constant currency basis *On an organic basis at constant currencies 11
S T R O N G C L O U D M E T R I C S 95% 104% 67% 7X Gross Cloud Net LTV / CAC renewal gross renewal ratio in rate in margin in rate in 2019 73% 2019 Q1/2020 2019 Cloud Non-Cloud 12
O U T L O O K F O R 2 0 2 0 On April 21 st Basware updated its 2020 guidance to reflect the estimated impact of the Covid-19 pandemic. Net Sales EBIT Net Sales guidance will be Basware’s cost base is scalable given when it is possible to and has variable cost estimate the COVID-19 components that can be pandemic effects more reduced to a certain extent to precisely. maintain profitability. EBIT for 2020 is expected to be positive. 13
S T R A T E G Y 2 0 2 0 - 2 0 2 2 Scalable growth and profitability GUIDING Increase operational efficiency in strategic business PRINCIPLES Simplify operations, clean up legacy MUST-WIN BATTLES LONG TERM #1 Happy Customers #2 Delivery Capabilites Realize growth potential #3 Procurement #4 Sell with Advisory Partners Enable Visible Commerce #5 Transformations; now and after 14
G L O B A L C R I S I S B R I N G I N G V I S I B L E C O M M E R C E T O F O C U S 100% digital Supplier Monitoring cash processes management flow Basware solutions 100% visibility and a With Basware Analytics digitalize and automate holistic view to companies can analyse customers Purchase-to- suppliers are key when spend and plan ahead, Pay processes which mitigating against prioritize critical enables work from supply shortages, suppliers and avoid late home. labour irregularities and payments. slow-downs in logistics. 15
M A R K E T G R O W T H D R I V E N B Y G L O B A L M E G A T R E N D S EUR 15 billion DIGITALIZATION & Market potential AUTOMATION RAPID TECHNOLOGICAL EUR ~5 billion DEVELOPMENT Current market SUSTAINABILITY EUR 148 million Basware 2019 revenues 16
W H Y I N V E S T I N B A S W A R E ? Market leader with unique offering Profitable cloud growth Large addressable market 17
A P P E N D I X 18
Open philosophy: Pluggable specialist solutions and 3 rd party coexistence B A S W A R E H U B Sourcing Contingent Vendor Risk 3rd party CLM Workforce F O R V I S I B L E Management procurement Spend Analytics Management C O M M E R C E APIs Basware Vendor Manager Basware Purchase Basware AP Automation Data & Analytics Network APIs +200 interops B2G networks Regional partners Open Network: partnerships / expansion 19
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