Q2/2019
HALF-YEAR FINANCIAL REVIEW
Half-Year Financial Review January–June
FINANCIAL REVIEW Klaus Andersen, CEO Ben Selby, VP, IR and - - PowerPoint PPT Presentation
HALF-YEAR FINANCIAL REVIEW Klaus Andersen, CEO Ben Selby, VP, IR and Treasury August 6, 2019 Q2/2019 Half-Year Financial Review January June IMPORTANT NOTICE The following information contains, or may be deemed to contain,
Half-Year Financial Review January–June
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
events and depend on circumstances that may or may not occur in the future. Future results may vary from the results expressed in,
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 offer to sell or the solicitation
2
Order intake all-time high at EUR 6.4 million
Adjusted EBITDA guidance for 2019 upgraded
3
Productivity programme actions almost fully implemented
4
Value Leader in Spend Matters’ Q2/2019 Procure-to-Pay SolutionMap SmartOrders with actionable emails Advanced Analytics dashboard enhancements Basware again recognized as a Leader in Gartner’s Magic Quadrant
EXAMPLES OF CUSTOMER WINS IN Q2/2019
5
✓ Productivity programme actions almost fully implemented ✓ EUR 10m annual cost savings in 2020 compared to Q1/2019 within reach ✓ S&M H2/2018 investment level retained ✓ R&D investment level retained for strategic products and services
Significantly improve profitability Retain cloud growth Simplify the business
Basware expects to reach positive EBIT in 2020 and positive free cash flow on a run rate basis when exiting 2020
Focus areas Status
Focus investments on long term strategic products and consolidate product portfolio
Align global organizational setup with Basware’s global unified operating model
corporate IT services
to where the opportunities for growth are highest Improve profitability of professional services
roles and less internal roles
services now available globally Reduce external spending
Reduce headcount
Martti Nurminen, CFO, as of January 2020 latest
Key work experience:
Blair Tolbard, General manager, North America and VP of Sales, as of June 2019
Key work experience:
General manager, UK and VP of Sales
Recruitment process completed, expected to start in coming months
STRATEGIC PRIORITY: SCALABLE CLOUD REVENUE GROWTH
9
Cloud order intake EUR 6.4m Cloud revenue growth 12% Cloud revenues 68% of total
Cloud Non Cloud
Cloud as a proportion of total revenues Organic cloud growth at constant currencies
Organic total growth at constant currencies
11
EUR million
intake
progress with cloud
new customers
in the US and Finland
performance in the UK
Annual recurring revenue gross order intake is calculated by summing the total
12 0.0 2.0 4.0 6.0 8.0 10.0 12.0
Q2/2018 Q2/2019
6.4 6.4
0.0 2.0 4.0 6.0 8.0 10.0 12.0
H1/2018 H1/2019
11.0 11.4
growth rate was impacted by higher than average amount of credit notes
improved reported figures
*On an organic basis at constant currencies
13
Net sales by revenue type, EUR thousand 4-6/ 2019 4-6/ 2018 Change, % Change, %* Cloud 24,752 21,783 13.6 12.4 Consulting 6,052 6,201
Maintenance, license and
5,516 6,986
Total 36,320 34,969 3.9 3.0
approximately breakeven
legacy data back-up hosting costs and previously unbilled license costs
and marketing
Executive Team exits
14
EUR thousand 4-6/2019 4-6/2018 Change,% Net sales 36,320 34,969 3.9 Cost of sales
Gross profit 17,819 16,389 8.7 Sales and marketing
17.0 Research and development
General and administration
Total operating expenses
0.4 Other operating income and expenses
119.9 Operating profit (EBIT)
2.3 Adjustments 2,032 913 122.6 Depreciation and amortization
43.5 Adjusted EBITDA
92.0
Q1/2018 Q2/2018 Q3/2018 Q4/2018 Q1/2019 Q2/2019
15
EUR thousand 4-6/2019 4-6/2018 Change, % EBITDA
37.4 Capitalizations
Finance expenses
Taxes, excl. deferred taxes
Payment of lease liabilities1
share part
99 Gain/loss on sale of assets Free cash flow metric
reach positive free cash flow on a run-rate basis by the end of 2020
cash flow metric is to provide a clear view of all costs related to Basware’s operations
comparison period is the new financing arrangement
1 Payment of lease liabilities in 2018 are included in EBITDA.
cashflow mainly due to positive changes in working capital
repaid
repaid in September 2019
Q3:
(amortising, EUR 5m remaining)
EUR 10m
16
EUR thousand 4-6/ 2019 4-6/ 2018 Cash flows from operating activities
Net change in cash and cash equivalents 28,456
Cash and cash equivalents 63,373 41,413 Gross financial debt 87,307 48,277 Net financial debt 23,935 6,864 Gross debt including leases* 104,564 48,277 Net debt including leases* 41,192 6,864
*Comparison impacted by IFRS16 methodology change
Total revenues to grow at approximately 5%* Cloud revenues to grow at approximately 15%*
AS A RESULT OF THE PRODUCTIVITY PROGRAMME ACTIONS, BASWARE UPGRADES THE PROFITABILITY GUIDANCE FOR 2019. REVENUE GUIDANCE IS UNCHANGED.
*On an organic basis at constant currencies
18
Adjusted EBITDA EUR 3 million or better
Order intake all-time high at EUR 6.4 million
Adjusted EBITDA guidance for 2019 upgraded
19
Productivity programme actions almost fully implemented