Q3/2019
INTERIM REVIEW
Interim Report January-September
INTERIM REVIEW Klaus Andersen, CEO Ben Selby, VP, IR and Treasury - - PowerPoint PPT Presentation
INTERIM REVIEW Klaus Andersen, CEO Ben Selby, VP, IR and Treasury October 22, 2019 Q3/2019 Interim Report January-September IMPORTANT NOTICE The following information contains, or may be deemed to contain, forward-looking statements. These
Interim Report January-September
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
Significant improvement in profitability now visible
3
Strong order intake from key markets Consulting business improving
#1 for AP Automation & AP use case #1 in e-Invoicing #1 in Partner Ecosystem #1 for Supply Chain Financing #1 in Integration
Gartner’s Critical Capabilities report ranks Basware Basware creates value with open APIs
Coexisting with competitors Partnering with best of breed
Strong order intake growth continued in the US
Average new customer deal size continued to increase
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Improved order intake performance in UK
Basware expects to reach positive EBIT in 2020 and positive free cash flow on a run rate basis when exiting 2020 Simplify the business Retain cloud growth Significantly improve profitability
Programme status ✓ Focusing investments on long term strategic products and consolidating product portfolio ✓ Global organizational setup aligned with Basware’s global unified operating model ✓ Improving profitability of professional services ✓ Reducing external spending ✓ Headcount reduction of 64 employees ✓ EUR 10 million annual cost savings in 2020 compared to Q1/2019
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Gross margin, %
percentage points Q2/19 -> Q3/19
Target of EUR 10 million annual cost savings on track Consulting revenue
Q3/18 -> Q3/19
Programme costs Order intake
Q3/18 -> Q3/19
Cloud growth
Total growth
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EBIT
Operating cashflow
On track to profitable growth
EUR million
customer deal size continued to increase
expansions 75% of total order intake
in US and UK
constant currency basis 19% in Q3/19 and 7% in Q1-Q3/19
Annual recurring revenue gross order intake is calculated by summing the total
10 0.0 2.0 4.0 6.0 8.0 10.0 12.0
Q3/2018 Q3/2019
4.5 5.5
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0
Q1-Q3/2018 Q1-Q3/2019
15.5 16.8
rate impacted by discontinuation of non- strategic unprofitable contracts
particularly in the US contributed positively to consulting revenues
increased due to solutions going into end-of-life
reported figures
*On an organic basis at constant currencies
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Net sales by revenue type, EUR thousand 7-9/ 2019 7-9/ 2018 Change, % Change, %* Cloud 25,018 22,440 11.5 10.7 Consulting 6,491 4,966 30.7 29.7 Maintenance, license and
5,314 6,585
Total 36,823 33,991 8.3 7.7
productivity programme has reduced total costs and improved profitability
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EUR thousand 7-9/2019 7-9/2018 Change,% Net sales 36,823 33,991 8.3 Cost of sales
2.8 Gross profit 20,273 17,890 13.3 Sales and marketing
Research and development
General and administration
Total operating expenses
Other operating income and expenses
Operating profit (EBIT) 940
Adjustments
187 Depreciation and amortization
45.9 Adjusted EBITDA 4,702
Q1/2018 Q2/2018 Q3/2018 Q4/2018 Q1/2019 Q2/2019 Q3/2019
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EUR thousand 7-9/2019 7-9/2018 EBITDA 4,913
Capitalizations
Finance expenses
Taxes, excl. deferred taxes
Payment of lease liabilities1
part
693 Gain/loss on sale of assets Free cash flow metric
improved
profitability in Q3/2019 off-set the increased financing expenses
reach positive free cash flow on a run-rate basis by the end of 2020
1 Payment of lease liabilities in 2018 are included in EBITDA.
was mainly due to higher profitability, which was partly
timing differences
in September 2019
liabilities dropped to EUR 2 million
maturing by end of 2022
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EUR thousand 7-9/ 2019 7-9/ 2018 Cash flows from operating activities 1,474
Net change in cash and cash equivalents
4,760 Cash and cash equivalents 30,640 46,235 Gross financial debt 58,556 57,202 Net financial debt 27,915 10,967 Gross debt including leases* 75,086 57,202 Net debt including leases* 44,446 10,967
*Comparison impacted by IFRS16 methodology change
Total revenues to grow at approximately 5%* Cloud revenues to grow at approximately 15%*
BASWARE’S NUMBER ONE STRATEGIC PRIORITY IS SCALABLE CLOUD REVENUE GROWTH.
*On an organic basis at constant currencies
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Adjusted EBITDA EUR 3 million or better
Significant improvement in profitability now visible
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Strong order intake from key markets Consulting business improving