INVESTOR PRESENTATION Q1 2017 Vesa Tykkyläinen, CEO Niclas Rosenlew, CFO April 21, 2017
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
WHY BASWARE SIMPLIFY OPERATIONS SPEND SMARTER 100% Paperless Processes Network is Differentiator EUR 15bn Market Opportunity
WE DELIVER COMPELLING VALUE Analytics leadership Procurement strength Seamless user experience Leader in Gartner’s Magic Quadrant for Procure-to-Pay Suites
CUSTOMER SUCCESS EXAMPLES OF GLOBAL CUSTOMER WINS ACROSS INDUSTRIES IN Q1 2017
OPERATIONAL IMPROVEMENTS SALES New US and Germany Sales Heads PERFORMANCE DATA Network Management OPPORTUNITY Productivity Programme AGILITY
MANAGEMENT ALIGNED WITH SHAREHOLDERS Matching Share Plan 2% OF BASWARE’S Performance Share Plan SHARE CAPITAL Restricted Share Plan
Q1 2017 STRONG CLOUD MOMENTUM Cloud revenues +29% STRATEGIC PRIORITY: Subscription ARR CLOUD REVENUE Order Intake +171% GROWTH March record month for Basware Network volumes
FINANCIAL REVIEW
STRONG SUBSCRIPTION ORDER INTAKE 3.0 • Investments in sales and 2.5 marketing delivered strong order intake 2.0 • Time lag to EUR m 1.5 visibility in revenues 1.0 0.5 0.0 Q1 2016 Q1 2017 Subscription 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 SaaS and other subscription types. Per transaction cloud revenue is not included. Gross new 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.
CLOUD REVENUE AT RECORD LEVELS 20 18 More Than Half of Total Revenues Now 16 from Cloud 14 12 EUR m 10 8 50% 6 4 2 0 Cloud Non Cloud Q1 2016 Q1 2017 SaaS Transaction Services Other Cloud Revenues
Q1 2017 NET SALES PROGRESSION Net sales by revenue type 1-3 2017 1-3 2016 Change • SaaS growth (EUR thousand) continued to be SaaS 7 417 3 563 108% extremely strong, Revenue Transaction services 9 637 8 430 14% up 108% Cloud Other cloud revenue 1 442 2 365 -39% • Significant cloud Cloud Revenue total 18 497 14 358 29% potential in existing Maintenance 9 849 10 132 -3% maintenance Non-Cloud License sales 900 1 501 -40% Revenue customer base Consulting services 7 482 8 117 -8% being addressed Other non-cloud revenue 73 17 326% Non-Cloud Revenue total 18 304 19 767 -7% Group Total 36 801 34 125 8%
Q1 2017 PROFITABILITY • Impact of Q4 (EUR thousand) 1-3 2017 1-3 2016 Change 2016 Net Sales 36 801 34 125 8% productivity Material and Services -3 734 -3 611 3% measures Personnel Expenses -26 459 -23 848 11% expected in Other Operating Expenses -9 108 -7 533 21% H2 2017 Total costs and expenses excluding -39 301 -34 992 12% depreciation Reported EBITDA -2 500 -867 188% Adjustments to EBITDA 898 350 157% Adjusted EBITDA -1 602 -517 210%
Q1 2017 R&D INVESTMENTS • Impact of Q4 (EUR thousand) 1-3 2017 1-3 2016 Change 2016 R&D expenses excluding depreciation 3 282 2 922 12% productivity Capitalised R&D 2 854 2 265 26% measures Total R&D investments 6 136 5 187 18% expected in Total R&D investments as % of sales 17% 15% H2 2017
Q1 2017 CASH FLOW AND BALANCE SHEET • Strong liquidity position with cash and (EUR thousand) 1-3 2017 1-3 2016 undrawn bank Cash flows from operating activities 7 471 12 234 facilities totalling EUR Net Change in cash and cash equivalents -3 464 21 810 42 m • Basware may consider Cash and cash equivalents 32 281 54 654** additional financing to Total available liquidity* 42 281 64 654 to support future cloud growth * Includes undrawn bank facilities and short term deposits ** EUR 15.3m of the Q1 2016 cash position related to borrowing for the Verian acquisition drawn down at the end of the quarter prior to actual closing of the acquisition on 1 April 2016
2017 FULL YEAR OUTLOOK Basware’s number one strategic priority is cloud revenue growth. FOR 2017, BASWARE EXPECTS: Cloud revenues to grow by Adjusted EBITDA approximately at breakeven 20 percent
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