INVESTOR PRESENTATION Q3 2018 Vesa Tykkylinen, CEO Niclas - - PowerPoint PPT Presentation

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INVESTOR PRESENTATION Q3 2018 Vesa Tykkylinen, CEO Niclas - - PowerPoint PPT Presentation

INVESTOR PRESENTATION Q3 2018 Vesa Tykkylinen, CEO Niclas Rosenlew, CFO October 17, 2018 IMPORTANT NOTICE The following information contains, or may be deemed to contain, forward-looking statements. These statements relate to future events


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INVESTOR PRESENTATION Q3 2018

Vesa Tykkyläinen, CEO Niclas Rosenlew, CFO October 17, 2018

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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

  • ther 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,

  • r 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 offer to sell or the solicitation

  • f an offer to buy any securities of Basware or otherwise to engage in any investment activity.

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STRATEGY UPDATE

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BASWARE’S VISION Deliver the best global solution for networked purchasing, invoicing and paying

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A HUGE MARKET OPPORTUNITY

EUR 15bn

EUR 5bn EUR 149m

Basware 2017 revenues Current market size Market potential

Every organisation can benefit from our solutions Supported by digitalisation, automation and AI megatrends Growing market

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BASWARE’S KEY DIFFERENTIATORS

Largest E-invoicing network Uniquely complete solution Captures 100% spend

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BASWARE’S GROWTH VISION

EUR 1 billion revenues

DELIVER CUSTOMER VALUE BEYOND EXPECTATIONS BE THE UNDISPUTED MARKET LEADER SIMPLIFY GLOBAL TRADE INTERACTIONS ENTER SELECT NEW GEOGRAPHIES NUMBER 1 IN LARGE EUROPEAN MARKETS LEADER IN US

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WHERE GROWTH WILL COME FROM

Customer Expansions Partnering Customer Transformations New Customer Acquisitions Select M&A

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STRONG ROI ON S&M INVESTMENTS

Increasing investments into Sales and Marketing significantly

7x

LTV / CAC ratio

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MEDIUM TERM TARGET Accelerate to more than

20 %

Organic cloud growth by 2022

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CEO REVIEW

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CUSTOMER SUCCESS

EXAMPLES OF NEW CUSTOMER WINS AND TRANSFORMATIONS IN Q3 2018

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PARTNERSHIP WITH XEROX

  • Scanning services outsourced
  • Simplifies Basware operations

with 387 employees transferring

  • Focus on e-invoicing

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Q3 HIGHLIGHTS

Cloud revenues 66% of total Cloud Order intake +29%

STRATEGIC PRIORITY: CLOUD REVENUE GROWTH

Xerox partnership

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FINANCIAL REVIEW

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ORGANIC CLOUD REVENUE GROWTH FEEDS TOTAL GROWTH

Cloud Non Cloud

66%

Cloud as a proportion of Q3 total revenues YTD Organic Cloud Growth at Constant Currencies

+16%

YTD Organic Total Growth at Constant Currencies

+6%

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0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0

Q3 2017 Q3 2018 YTD 2017 YTD 2018

CLOUD ORDER INTAKE GROWTH ACCELERATES

EUR m

  • Cloud order intake

growth accelerates

  • Includes all SaaS

and Network recurring revenues

  • Time lag to visibility

in revenues:

  • ~1/4 year 1
  • 50-60% year 2

Annual recurring revenue gross order intake is calculated by summing the total order intake in the period expressed as an annual contract

  • value. This includes all SaaS and Network recurring revenues including transaction revenues. Gross order intake covers new cloud customers,

add-ons and renewal uplifts but excludes churn. There will be a time lag before this order intake is visible in net sales. *Organic constant currency growth rate

13.0 15.5 4.5 3.5

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STRONG CLOUD UNIT ECONOMICS

CAC LTV

106% net renewal rate 95% gross renewal rate 19 years customer lifetime

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Q3 2018 NET SALES PROGRESSION

  • Headline growth

impacted by disposals

  • Significant cloud

potential in existing maintenance customer base being addressed

Net sales by revenue type (EUR thousand) 7-9 2018 7-9 2017 Change Change* Cloud Revenue SaaS 10 177 8 903 14.3% 21.0% Transaction services 11 029 9 875 11.7% 12.4% Other cloud revenue 1 233 1 274

  • 3.2%
  • 3.9%

Cloud Revenue total 22 440 20 052 11.9% 15.0% Non-Cloud Revenue Maintenance 6 150 8 965

  • 31.4%
  • 8.9%

License sales 401 790

  • 49.3%
  • 36.7%

Consulting services 4 966 6 063

  • 18.1%
  • 8.6%

Other non-cloud revenue 34

  • 42

Non-Cloud Revenue total 11 551 15 776

  • 26.8%
  • 9.6%

Group Total 33 991 35 827

  • 5.1%

5.2%

*On an organic basis at constant currencies

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Q3 2018 PROFITABILITY

  • Growth rates

impacted by disposals, sales and marketing investments and stock based compensation

(EUR thousand) 7-9 2018 7-9 2017 Change Net sales 33 991 35 827

  • 5.1%

Cost of sales

  • 16 101
  • 16 966
  • 5.1%

Gross profit 17 890 18 862

  • 5.2%

Sales and marketing

  • 10 759
  • 7 809

37.8% Research and development

  • 6 599
  • 6 539

0.9% General and administration

  • 4 003
  • 3 052

31.2% Total operating expenses

  • 21 361
  • 17 400

22.8% Other operating income and expenses

  • 316
  • 257

22.7% Operating profit/loss

  • 3 787

1 205 Adjustments 187 156 19.9% Depreciation and amortization

  • 2 723
  • 2 300

18.4% Adjusted EBITDA

  • 877

3 661

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UNDERLYING PROFITABILITY

c. EUR 2m c. EUR 3m c. EUR 1m Adjusted EBITDA EUR -0.88m Disposal impact Additional S&M spend Additional Stock based compensation Total impact: c. EUR 6m

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Q3 2018 CASH FLOW AND BALANCE SHEET

  • Strong liquidity

position with cash and undrawn bank facilities totalling EUR 56 million

  • Additional EUR 10

million financing via multi-issuer bond in September

(EUR thousand) 7-9 2018 7-9 2017 Cash flows from operating activities

  • 2 676
  • 4 840

Net change in cash and cash equivalents 4 760 1 708 Cash and cash equivalents 46 235 25 275 Total available liquidity* 56 235 35 275

*Includes undrawn bank facilities and short term deposits 22

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Cloud revenues between EUR 90 and EUR 95 million Total costs slightly above 2017 levels**

2018 FULL YEAR OUTLOOK

Basware’s number one strategic priority is cloud revenue growth. FOR 2018, BASWARE EXPECTS*:

*On an organic basis at constant currencies **Excluding D&A and adjustments to EBITDA

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