FINANCIAL RESULTS Q3 2016 VESA TYKKYLINEN, CEO NICLAS ROSENLEW, - - PowerPoint PPT Presentation

FINANCIAL RESULTS Q3 2016

VESA TYKKYLÄINEN, CEO NICLAS ROSENLEW, CFO OCTOBER 19, 2016

IMPORTANT NOTICE

The following information contains, or may be deemed to contain, forward-looking statements. These statements relate to future events or future financial performance, including, but not limited to, expectations regarding market growth and development as well growth and profitability of Basware. In some cases, such forward-looking statements can be identified by terminology such as “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of those terms or other comparable terminology. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Future results may vary from the results expressed in, or implied by, the forward-looking statements, possibly to a material degree. All forward-looking statements included herein are based on information presently available to Basware and, accordingly, Basware assumes no obligation to update any forward-looking statements, unless obligated to do so pursuant to an applicable law or regulation. Nothing in this presentation constitutes investment advice and this presentation shall not constitute an

• ffer to sell or the solicitation of an offer to buy any securities of Basware or otherwise to engage in any

investment activity.

2

VESA TYKKYLÄINEN

CEO REVIEW

Q3 2016 HIGHLIGHTS

Extend cloud P2P leadership Accelerate Network growth Unleash Financing Services SaaS revenues +118.7% 26.4 million Q3 Transactions (+13.8%) Maturing the solutions 21 new P2P SaaS deals closed (vs 9 in Q3 2015) September record month at 9.4m 53 deals signed in total since inception

Strategy: Q3 2016 Progress:

CLOUD TRANSITION CONTINUED IN Q3 2016

Announced 2018 Goal:

Recurring Revenues** Cloud Revenues*

Q3 2016 Progress:

80% Recurring 2/3rds Cloud 77.4 % Recurring vs 72.2 % in Q3 2015 46.6 % Cloud vs 39.5 % in Q3 2015

* Cloud revenue includes transactions services, SaaS and other subscription and financing services revenue excluding alliance fees ** Recurring revenue consists of net sales excluding license sales, consulting revenue related to deliveries, and alliance fees

28 Alusta go-lives vs 16 in Q3 2015 Tighter scope control and senior management

• versight

Progress on moving to public cloud infrastructure Continued focus on productivity

Q3 INVESTMENTS FOR THE STRATEGY

Announced Growth Enablers:

Further shortening of delivery times Investing in demand generation and sales Scalable company infrastructure

Q3 2016 Progress:

Sales and marketing headcount up 25% Bulk of new sales and marketing hires now made

FINANCIAL REVIEW

NICLAS ROSENLEW

(EUR Thousands)

Q3 2016 Q3 2015 Change 1-9 2016 1-9 2015 Change Reported Net Sales 35 295 33 569 5.1% 108 369 104 200 4.0% Organic Net Sales 32 678 33 515 100 736 101 036 Organic Net Sales at Constant Currencies 33 365 33 515

• 0.4%

102 603 101 036 1.6%

KEY GUIDANCE METRICS

(EUR Thousands)

Q3 2016 Q3 2015 1-9 2016 1-9 2015 Reported EBITDA

• 33

2 823

• 3 771

5 678 Total Adjustments 1 414 717 2 173

• 340

Adjusted EBITDA 1 381 3 540

• 1 598

5 337

5.1% Net Sales growth (-0.4% organic at constant currencies) in Q3 2016

Q3 2016 NET SALES PROGRESSION

EUR thousand

Q3 2016 Q3 2015 Change Transaction services 8 523 7 817 9.0% SaaS 6 336 2 897 118.7% Consulting services 7 439 7 895

• 5.8%

Maintenance 10 168 10 316

• 1.4%

License sales 1 137 2 050

• 44.5%

Other revenue 1 692 2 594

• 34.8%

Group total 35 295 33 569 5.1%

• SaaS growth accelerated at

118.7% total, 53.2% organic

• Transaction services revenue

increased 9.0%; differences vs transaction volume driven by decline of start-up fees

• Overall growth impacted by the

decline in license sales, maintenance and consulting, as well as weakness in the UK

Q3 OPERATING EXPENSES AND INVESTMENTS

• Operating Expenses

increased by EUR 5.2 m versus Q3 2015

• Sales and marketing

headcount grew 24.9% compared to 13.6% for group headcount

• R&D Expenses accounted for

17.2% of sales versus 14.0% in Q3 2015

• While investing for growth,

focus on efficiency of the cost base continued

* Operating expenses include employee benefits, depreciations & amortizations, and other operating expenses

EUR thousand

Q3 2016 Q3 2015 Change Employee Benefit Expenses 24 070 19 238 25.1% Other Operating Expenses 7 682 7 654 0.4% Depreciation and Amortization 2 185 1 827 19.6% Total Operating Expenses 33 937 28 719 18.2% Materials and Services 3 576 3 852

• 7.2%

R&D Expenses 6 066 4 707 28.9% Capitalised R&D 2 639 1 951 35.3% Personnel 1 869 1 646 13.6%

Q3 CASHFLOW AND BALANCE SHEET

• Cashflow from operating activities

was EUR -5.5 m in Q3

• Cashflow was impacted by the

increase in growth investments

• EUR 13.0m of cash and cash

equivalents

• Decrease in cash position

compared to Q3 2015 related to acquisitions and growth related investments

(EUR Thousands)

Q3 2016 Q3 2015 Cash flows from operating activities

• 5 479
• 7 340

Net change in cash and cash equivalents

• 8 713
• 25 120

Cash and cash equivalents* 12 951 36 824

* Includes short term deposits

KEY GROUP REPORTED FINANCIALS

EUR thousand Q3 2016 Q3 2015 Change Net sales 35 295 33 569 5.1% Material and services

• 3 576
• 3 852
• 7.2%

Personnel expenses

• 24 070
• 19 238

25.1% Other operating expenses

• 7 682
• 7 654

0.4% EBITDA

• 33

2 823 Depreciation and amortization

• 2 185
• 1 827

19.6% Operating result (EBIT)

• 2 218

996 Net result

• 3 711

1 249 EPS, EUR (diluted)

• 0.26

0.09

Q3 2016 SUMMARY HIGHLIGHTS

• 0.4% Organic

revenue growth at constant currencies Adjusted EBITDA EUR 1 381 K + 118.7% total SaaS revenue growth + 13.8% Network transaction volume growth + 25% Sales and Marketing headcount Bulk of new sales and marketing hires made 46.6% Cloud Revenues 26.4 million Transactions Financials Sales momentum Investing in growth Transition to cloud

OUTLOOK

VESA TYKKYLÄINEN

2016 FULL YEAR OUTLOOK

• Organic revenue growth at constant currencies expected to be flat in 2016

compared to 5% previously expected

• Adjusted EBITDA still expected at breakeven
• Increase in operating expenses expected to be c. EUR 20 million including

Verian

• Revenues from SaaS and Basware’s network expected to continue to grow for

the rest of 2016.

STRATEGY ENABLERS

New CEO Review Continue to strengthen sales and marketing Additional Actions To Enable Strategy Focus on Customer Success Grow and monetize network and data assets with value added services including financing Increase productivity by simplifying our

• perations and increasing scalability

Evolve our culture and way of working to focus more on performance

REFINED STRATEGY GOALS

Cloud revenue growth Cloud revenue growth >20% CAGR

• n an organic basis

Annual net sales >EUR 220 million Recurring revenue ~ 80% of net sales Strategic Priority 2017-2020 Strategic Goals

* Cloud revenue includes transactions services, SaaS and other subscription and financing services revenue excluding alliance fees ** Recurring revenue consists of net sales excluding license sales, consulting revenue related to deliveries, and alliance fees

Continue to improve underlying profitability

MORE INFORMATION: www.basware.com/investors www.basware.com www.twitter.com/basware www.facebook.com/BaswareCorporation www.linkedin.com/company/basware

Q4 INTERIM REPORT ON FEBRUARY 1, 2017

NEXT REPORT