B A S W A R E Roadshow presentation June 2020 IMPORTANT NOTICE - - PowerPoint PPT Presentation

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B A S W A R E Roadshow presentation June 2020 IMPORTANT NOTICE - - PowerPoint PPT Presentation

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


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SLIDE 1

B A S W A R E

Roadshow presentation June 2020

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SLIDE 2

2

IMPORTANT NOTICE

The follow

  • wing infor
  • rmation co

conta tains, or

  • r may be

be de deemed to to cont ntain, n, for

  • rwa

ward rd-look

  • king state

tement

  • nts. These state

tement nts re relate te to to futur uture eve vent nts or

  • r futur

uture financ ncial perfor

  • rmance

nce, inc nclud uding, g, but ut not

  • t limite

ted to, expecta ctations re regard rding market gr growt wth and nd de deve velopment nt as as we well gr grow

  • wth

th and nd profita tability ty of

  • f Baswa

ware

  • re. In

In som

  • me ca

cases, suc uch for

  • rwa

ward rd-look

  • king 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

  • r “continue”, or
  • r the

nega gati tive ve of

  • f thos
  • se te

terms or

  • r ot
  • ther co

comparable te terminology

  • gy. By

By their na nature ture, for

  • rwa

ward rd-look

  • king 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

  • n circ

circum umstance nces that may or

  • r may not
  • t occ
  • ccur

ur in in th the futur

  • uture. Futur

uture re results may vary ry from the results exp xpre ressed in, or

  • r implied by, the forw
  • rward

rd-look

  • king

ng state tement nts, pos

  • ssibly to

to a mate terial de degre gree. All forw

  • rward

rd-loo

  • oking state

tement nts inc nclude uded here rein are re based on

  • n infor
  • rmation 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

  • oking 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

  • r regul

ulati tion. Not

  • thing in

in this pre resent ntation

  • n cons

nstitute tutes inve nvestm tment nt adv dvice ce and nd this pre resent ntation

  • n shall no

not co constitute tute an an of

  • ffer to

to sell or

  • r the

solicitati tion of

  • f an

an offer to to buy any secur uriti ties of

  • f Basware or
  • r otherwise to

to engage in in any investment activity ty.

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EUR 148 million revenue in 2019

~1,325 employees

in 14 countries Customers in

100+ countries

73% revenue

comes from cloud

B A S W A R E I N B R I E F

EUR 800 billion managed spend in 2019

We help our customers simplify operations and spend smarter by automating their procurement and finance processes We are the global leader with largest e-invoicing network in the world #1 in accounts payable automation and #1-3 in procurement 38% 23% 33% 5%

Revenue by area (Q1/2020)

Americas Nordics Europe APAC

%

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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

Receive Source Order Shop Invoice Match Analyze Pay

1) Total economic impact of Basware’s Purchase-to-Pay Cloud Solution, Forrester 2017

From inefficient invoice process → to AP automation From uncontrolled spend → to spend under management From lack of cashflow visibility → to optimize spend with analytics 307% return on investment and a payback time of 12 months1)

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I N V E S T M E N T H I G H L I G H T S

Large ge addressab essable le market ket Market rket leader er with th unique ue

  • ffering

ng Prof

  • fitable

able cloud ud grow

  • wth
  • EUR

R 15 bill llion market ket pote tentia ntial

  • Leader

ader in netw twor

  • rked

ked purchase hase-to to-pay pay

  • Large

gest st e-invoi voici cing ng netw twork and innova vato tor in analyti lytics

  • Acti

tions s on-goin going g to impr prove ve prof

  • fita

tabi bilit lity while le retai taining g cloud ud grow

  • wth

th

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R E C O G N I Z E D M A R K E T L E A D E R

Leader with strong market understanding, innovation and product roadmap, and customer experience

“well suited to multinational organizations moving to digital procurement and looking to automate invoice processing”

MAGIC QUADRANT FOR PROCURE TO PAY SUITES 2019

“a leading choice for CPOs and CFOs who aim at achieving 90% or more process automation across their P2P spend”

5/5 in Product strategy | 5/5 in Globalization | 4.2/5 in Invoice Processing FORRESTER WAVE: ePROCUREMENT PLATFORMS, Q4 2019

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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

PROCU CURE REMENT NT E-INVO INVOIC ICIN ING G NETWO TWORK RK & AP AUTOM OMATION ATION

  • 100%

0% invoice ice capture ture

  • 100%

0% spend nd visibi ibility ity

  • 100%

0% end-user user adoptio ption ANALYTICS YTICS LARGE GEST ST & MOST ST GLOBAL BAL E-IN INVOIC VOICIN ING G NETWO TWORK RK €800BN SPEND – 150M 0M+ + INVOICES ICES

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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

Geographies where Basware supports customers

Automotive Manufacturing Healthcare / Pharma Telco / Media Energy / Utility Food / Beverage Services Industrials Transport Retail Finance / Professional Public Sector

1.5m+ + organisations

connected to network EUR 800 billion spend managed in 2019

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T H E J O U R N E Y T O C L O U D

TRANSFORMATION CONSOLIDATION OPTIMIZATION

Client transformations Subscription pricing All new business is cloud Making it happen – cloud growth Mature processes Consolidate systems Achieve step change in cost base Drive efficiency Cloud growth and profitability Adaptive optimization Drive efficiency and margins Strategic investments Cloud growth & margins Push to cloud Grow profitably Finetune

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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

Simplification and profitable growth

Consolidation

  • f R&D sites

Transition to AWS initiated Sale of non- strategic businesses in 2018 Functional

  • rganization

Cloud focused strategy in 2016 Scanning services

  • utsourced

Productivity programme Launched in Q1/19 Cloud revenues reach 2/3 of total Consolidation of product portfolio

Push to Cloud

Robust business development in H2/19 Q1/20 Cloud revenue +14% YoY EBIT 0.1M€

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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

▪ Cloud revenue growth +14% in Q1/20* ▪ Cloud 73% of total revenue ▪ Maintenance, license and other revenue declines in line with expectations as Basware transitions customers to cloud

EUR million1)

*On an organic basis at constant currencies

1)Q1/2017-Q2/2018 revenue has been adjusted for disposals and is indicative only.

5 10 15 20 25 30 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

*Organic constant currency basis

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S T R O N G C L O U D M E T R I C S

Cloud Non-Cloud

73%

95% 104% 67% 7X

Gross renewal rate in 2019 Net renewal rate in 2019 Cloud gross margin in Q1/2020 LTV / CAC ratio in 2019

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EBIT Basware’s cost base is scalable and has variable cost components that can be reduced to a certain extent to maintain profitability. EBIT for 2020 is expected to be positive. On April 21st Basware updated its 2020 guidance to reflect the estimated impact of the Covid-19 pandemic.

O U T L O O K F O R 2 0 2 0

Net Sales Net Sales guidance will be given when it is possible to estimate the COVID-19 pandemic effects more precisely.

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S T R A T E G Y 2 0 2 0 - 2 0 2 2

#1 Happy Customers

MUST-WIN BATTLES LONG TERM

#2 Delivery Capabilites #3 Procurement #4 Sell with Advisory Partners #5 Transformations; now and after Realize growth potential Enable Visible Commerce

Scalable growth and profitability Increase operational efficiency in strategic business Simplify operations, clean up legacy

GUIDING PRINCIPLES

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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

Supplier management Monitoring cash flow

Basware solutions digitalize and automate customers Purchase-to- Pay processes which enables work from home. 100% visibility and a holistic view to suppliers are key when mitigating against supply shortages, labour irregularities and slow-downs in logistics. With Basware Analytics companies can analyse spend and plan ahead, prioritize critical suppliers and avoid late payments.

100% digital processes

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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 148 million

Basware 2019 revenues

EUR ~5 billion

Current market

EUR 15 billion

Market potential

DIGITALIZATION & AUTOMATION RAPID TECHNOLOGICAL DEVELOPMENT SUSTAINABILITY

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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

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A P P E N D I X

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B A S W A R E H U B F O R V I S I B L E C O M M E R C E

Basware AP Automation Basware Purchase Basware Vendor Manager Open philosophy: Pluggable specialist solutions and 3rd party coexistence Network Open Network: partnerships / expansion Data & Analytics

APIs

+200 interops B2G networks Regional partners

APIs

3rd party procurement Sourcing Spend Analytics Vendor Risk Management CLM Contingent Workforce Management

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M I N I M I Z E E R R O R S , W H I L E S P E E D I N G U P T H E P R O C E S S

*Source: Ardent Partners report, 2018

3.1 days

BEST IN CLASS

Supplier creates and sends invoices electronically Automatic content validation & format conversion Invoices automatically arrive in customer AP/ERP

10.6

days*

MANUAL

Customer receives invoices in mailroom Customer scans invoices Customer validates invoices Customer enters the data into a system Suppliers create invoices

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C L O U D O R D E R I N T A K E G R O W T H

▪ Reported as annual recurring revenue (ARR) gross order intake ▪ Share of cloud order intake from new customers increasing ▪ Key markets: US, UK, Germany and France

EUR million

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KEY FIGURES

EUR thousand Q1/2020 Q1/2019 Change,% 2019 2018 Change, %

Net sales 38,245 35,895 6.5 148,302 141,417 4.9 Cloud 27,774 24,282 14.4 101,442 89,482 13.4 Consulting 6,496 5,441 19.4 24,962 23,567 5.9 Maintenance, license and other 3,975 6,172

  • 35.6

21,889 28,368

  • 22.8

Cost of sales

  • 17,473
  • 18,147
  • 3.7
  • 71,493
  • 69,620

2.7 Gross profit 20,772 17,748 17.0 76,810 71,797 7.0 S&M

  • 10,767
  • 11,375
  • 5.3
  • 45,190
  • 43,041

5.0 R&D

  • 6,176
  • 7,404
  • 16.6

26,815

  • 27,222
  • 1.5

G&A

  • 3,575
  • 4,607
  • 22.4
  • 14,572
  • 16,247
  • 10.3

Total operating expenses

  • 20,518
  • 23,386
  • 12.3
  • 86,577
  • 86,510

0.1 Other operating income and expenses

  • 153
  • 2,142
  • 92.8
  • 4,770

13,242 Operating profit (EBIT) 100

  • 7,780
  • 14,537
  • 1,471

Adjustments

  • 59

1,960 3,781

  • 13,581

Depreciation and amortization 3,970 4,121

  • 15,941

10,688 49.2 Adjusted EBITDA 4,011

  • 1,699

5,185

  • 4,364
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SHAREHOLDER BREAKDOWN

SHAREHOLDER DISTRIBUTION AS OF APRIL 30, 2020

1 Based on Euroclear Finland shareholder register as of April 30, 2020 2 Based on their latest flagging notification

TOP 20 SHARE REHOLDERS RS1 Shares, , pcs % o

  • f total

1 Arrowgrass Capital Partners2

3,600,698 25.0

2 Sihvo Ilkka

887,300 6.2

3 Long Path Partners LP2

760,971 5.3

4 Briarwood Chase Management2

720,347 5.0

5 Vaajoensuu Hannu

567,857 3.94

6 Fjärde Ap Fonden

469,873 3.26

7

Ilmarinen Mutual Pension Insurance Company 420,830 2.92

8 Perttunen, Sakari

384,375 2.67

9 Veritas Pension Insurance Company Ltd.

352,345 2.45

10 Danske funds

270,000 1.87

11 The State Pension Fund

256,000 1.78

12 Pöllänen Antti

192,127 1.33

13 Perttunen, Meimi

145,107 1.01

14

Sijoitusrahasto Taaleritehdas Mikro Markka 90,000 0.62

15 Vaajoensuu, Matias

83,800 0.58

16 Vaajoensuu Petra

83,800 0.58

17 Vaajoensuu Sara

83,700 0.58

18 OP-Finland Small Firms Fund

79,605 0.55

19 Kaloniemi Markku

77,000 0.53

20 Koripalloilun Tukisäätiö Sr

45,000 0.31 Total top 20 9,570,735 66.5 % Total number of shares 14,401,936 100 % Executive team & Board 6 % International Institutional Investors 52 % Other Founders 15 % Finnish Institutional Investors 15 % Households 8 % Other 4 %

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F R E E C A S H F L O W M E T R I C

  • 7,816
  • 9,794
  • 1,445
  • 4,774
  • 3,579

Q1/2019 Q2/2019 Q3/2019 Q4/2019 Q1/2020

EUR thousand 1-3/ 2020 1-3/ 2019

EBITDA

4,070

  • 3,660

Capitalizations

  • 3,111
  • 2,993

Finance expenses

  • 3,021
  • 650

Taxes, excl. deferred taxes

  • 628
  • 95

Share based compensation, share part

  • 1,174
  • 953

Gain/loss on sale of assets

285 534

Free cash flow metric

  • 3,579
  • 7,816
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EUR thousand 1-3/ 2020 1-3/ 2019 Cash flows from operating activities 6,497 1,626 Net change in cash and cash equivalents 1,250

  • 5,879

Cash and cash equivalents 32,558 35,117 Gross financial debt 62,264 53,669 Net financial debt 29,706 18,522

C A S H F L O W A N D B A L A N C E S H E E T

▪ Improvement in operating cash flows driven by higher profitability ▪ Heightened efforts on receivables collection ▪ Increase in gross and net financial debt mainly driven by PIK interest and principal accrual