INVESTOR PRESENTATION Q2 2018 Vesa Tykkyläinen, CEO Niclas Rosenlew, CFO July 18, 2018
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 th ose 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 offer to sell or the solicitation of an offer to buy any securities of Basware or otherwise to engage in any investment activity.
CEO REVIEW
SUCCESSFULLY COMPLETING CLEAN UP PHASE, INCREASING FOCUS ON ACCELERATING GROWTH Clean-up Scanning Consolidation Transition to Sale of non- Functional services of R&D sites AWS core assets organization outsourced Management Country Account Cloud focused Performance Partnering become management management strategy culture organization shareholders and leadership changes Growth
FOUNDATIONS ALREADY IN PLACE TO ACCELERATE GROWTH Quota carriers Existing sales and marketing ramp-up +40% YE 2018 vs. YE 2017 Marketing pipeline Improving sales pipeline +60% Investment in sales and marketing will +12% in Q2 2018 increase
WHERE GROWTH WILL COME FROM Key markets Existing customers Partnerships New markets Select M&A
SOLUTION LEADERSHIP IN Q2 2018 Basware recognized as Leader in Gartner’s Magic Quadrant Smart PDF: invoice capturing for any machine-readable PDF Basware Assistant: virtual assistant for procurement
CUSTOMER SUCCESS EXAMPLES OF NEW CUSTOMER WINS AND TRANSFORMATIONS IN Q2 2018
Q2 HIGHLIGHTS Cloud revenues 62% of total STRATEGIC PRIORITY: Cloud order intake CLOUD REVENUE at all-time high GROWTH Clean-up phase completed, moving to accelerate growth
WHY BASWARE SIMPLIFY OPERATIONS SPEND SMARTER 100% Digital Processes Network is Differentiator EUR 15bn Market Opportunity
FINANCIAL REVIEW
ORGANIC CLOUD REVENUE GROWTH FEEDS TOTAL GROWTH H1 Organic Cloud Cloud as a Q2 Organic Total Growth at Constant proportion of Q2 Growth at Constant Currencies total revenues Currencies +17% +7% 62% Cloud Non Cloud
RECORD TOTAL CLOUD ORDER INTAKE 12,0 • Total cloud order intake at all-time 10,0 high 8,0 • Includes all SaaS and Network EUR m 6,0 recurring revenues 4,0 • Time lag to visibility 2,0 in revenues 5.5 6.4 9.5 11.0 0,0 Q2 2017 Q2 2018 H1 2017 H1 2018 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
Q2 2018 NET SALES PROGRESSION Net sales by revenue type 4-6 4-6 Change Change* • Headline growth (EUR thousand) 2018 2017 impacted by FX SaaS 9 663 8 372 15.4 % 26.2 % and disposals Revenue Transaction services 10 900 9 573 13.9 % 15.6 % Cloud • SaaS and Other cloud revenue 1 220 1 807 -32.5 % -31.3 % Transaction Cloud Revenue total 21 783 19 752 10.3 % 15.6 % services combined grew 20.4%* Maintenance 6 226 9 357 -33.5 % -11.7 % • Significant cloud Non-Cloud License sales 646 1 120 -42.3 % -21.9 % Revenue potential in Consulting services 6 201 7 165 -13.5 % 2.0 % existing Other non-cloud revenue 114 -105 maintenance Non-Cloud Revenue total 13 186 17 536 -24.8 % -4.8 % customer base being addressed Group Total 34 969 37 287 -6.2 % 7.0 % *On an organic basis at constant currencies
Q2 2018 PROFITABILITY • Growth rates (EUR thousand) 4-6 2018 4-6 2017 Change impacted by Net sales 34 969 37 287 -6.2 % disposals and FX Cost of sales -18 580 -19 363 -4.0 % Gross profit 16 389 17 924 -8.6 % Sales and marketing -10 434 -9 304 12.1 % Research and development -6 964 -7 657 -9.0 % General and administration -4 315 -3 335 29.4 % Total operating expenses -21 712 -20 296 7.0 % Other operating income and -1 006 -397 expenses Operating profit/loss -6 329 -2 769 -128.6 % Adjustments 913 618 Depreciation and amortization -2 742 -2 469 11.1 % Adjusted EBITDA -2 674 318
Q2 2018 CASH FLOW AND BALANCE SHEET • Strong liquidity (EUR thousand) 4-6 4-6 2018 2017 position with cash and undrawn bank Cash flows from operating activities -7 856 -4 837 facilities totalling EUR Net change in cash and cash equivalents -12 988 -8 162 51 million Cash and cash equivalents 41 413 23 610 Total available liquidity* 51 413 33 610 *Includes undrawn bank facilities and short term deposits
2018 FULL YEAR OUTLOOK Basware’s number one strategic priority is cloud revenue growth. FOR 2018, BASWARE EXPECTS*: Cloud revenues Total costs slightly between EUR 90 and above 2017 levels** EUR 95 million *On an organic basis at constant currencies **Excluding D&A and adjustments to EBITDA
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