OPERATIONS, SPEND SMARTER FEBRUARY 2017 IMPORTANT NOTICE The - - PowerPoint PPT Presentation

SIMPLIFY OPERATIONS, SPEND SMARTER

FEBRUARY 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 those 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.

WHY BASWARE

Huge Market Opportunity THE Market Leader Cloud Focused Strategy

3

SIMPLIFY OPERATIONS, SPEND SMARTER

Connect Optimize Manage

The Solution The Problem

Uncontrolled spending Inefficient manual processes Poor cash flow visibility

4

HELPING OUR CUSTOMERS REALIZE TOMORROW’S FINANCIAL GOALS TODAY

75%

Reduction of paper £176,000 annual savings Delayed/denied

$457,000 on $7.6 million in spend

Reduced invoicing costs by

75%

Receive

97%

• f invoices as

electronic invoices

>1 million

• rganisations

connected to

• ur Network

2500+ large customers use our P2P software

500,000

E-invoices delivered annually Process over

90%

• f invoices without

any manual intervention

40%

Reduction in AP headcount

66%

cost savings

60%

Hitting on-time payment target rate of over

85% €450,000

direct cost savings

60%

e-invoicing

5

straight through invoice processing

MEGA TRENDS DRIVING DEMAND FOR BASWARE’S SERVICES

Open Networks Big Data Digitalisation Automation e-commerce Disruption of Traditional Financing Models Robotics and AI Public Sector Initiatives

6

SIGNIFICANT MARKET OPPORTUNITY

is global leader

(1) Annual spend on source-to-pay and e-invoicing network services for key, corporate, SMB medium and public sector customers in Europe and North America. Source: Basware, Forrester, Gartner, Billentis, EESPA

EUR 149 million

Basware 2016 revenues

EUR 3.5 billion

Current market(1)

EUR 15 billion

Market potential(1)

Top 3 in Procurement

• No. 1 in Accounts Payable

Largest e-invoicing network Underpenetrated market Competition is fragmented

7

RECOGNIZED MARKET LEADER

8 Leader with highest score for Adaptability

“an impressive company that offers a leading solution among global P2P providers”

Procure to Pay Navigator 2016

Basware scores highest in five categories

OPEN NETWORK IS DIFFERENTIATOR

Huge Data Asset Global Trusted Partner Largest e-invoicing network Open Network Philosophy Multi-lingual, Multi-format

>70

eInvoice formats supported

>100 million

Transactions annually

220+

interoperability partners

>EUR500 billion

annual spend on Basware’s network

1M+

Active buyers and suppliers Used in more than 100 countries VAT compliance in more than 50 countries Connected to main

government

hubs 9

GEOGRAPHICAL AND INDUSTRY REACH IS DIFFERENTIATOR

Across the globe

Manufacturing Food / Beverage Energy / Utility Telco / Media Healthcare / Pharma Automotive Services Industrials Transport / Lodging Retail Finance / Professional Public Sector

Supporting customers in all industries

10

Geographies where Basware supports customers

INNOVATION IS DIFFERENTIATOR

Recognized by industry analysts as a leader in providing analytics for customers Expands value added services to utilize Basware’s huge network data asset Creates its e-invoicing network to enable true AP automation Invents P2P software

Basware is a Visionary

We invented networked P2P and have continued to innovate since then, leading the market and maintaining our product superiority.

11

END-TO-END SOLUTION IS DIFFERENTIATOR

ANALYTICS NETWORK / E-INVOICING AP AUTOMATION

• Stronger

relationships

• Foundation for

sustainable growth

• 100% e-Invoicing

from day one

• Increased

productivity

• Streamlined

processes

• Automate all invoices

from all systems

FINANCING SERVICES

• Consumer

experience

• Collaboration with

AP and suppliers

• New savings
• pportunities
• Eliminate payment

friction

• Improved DSO, DPO,

net operating income and return on capital

• More cash for growth
• Analytics & KPIs
• Complete spend

visibility

• Higher compliance
• Risk mitigation
• Direct and indirect

spend

WePROCUREMENT

CONNECT MANAGE OPTIMIZE

12

HOW BASWARE WILL SEIZE THE OPPORTUNITY

13

Cloud Revenue Growth Grow the Network Extend P2P Leadership Expand Value Added Services Customer experience High performance culture Integrated & high-quality

• ffering

Sales & Marketing effectiveness Operational excellence Innovation

2020 STRATEGY GOALS

Cloud revenue growth >20% CAGR

• n an organic basis

Annual net sales >EUR 220 million Recurring revenue ~ 80% of net sales

* Cloud revenue includes transactions services, SaaS and other subscription and financing services revenue excluding alliance fees ** Recurring revenue consists of net sales excluding license sales, consulting revenue related to deliveries, and alliance fees

2020 Strategic Goals Cloud Revenue Growth Continue to improve underlying profitability Strategic Priority

14

STRONG CLOUD GROWTH TOTAL REVENUES IMPACTED BY TRANSITION

10 20 30 40 50 60 70 80 90 100 2013 2014 2015 2016

+ =

Cloud Non-Cloud Total

20 40 60 80 100 120 140 160 2013 2014 2015 2016 10 20 30 40 50 60 70 80 90 100 2013 2014 2015 2016

SaaS Transaction Services Other Cloud Maintenance License Consulting Other Non-Cloud Net Sales, EUR millions

15

SHIFT IN REVENUE MIX SUPPORTS FUTURE GROWTH ACCELERATION

2016 Q4 2013 2016 Q4 2010

Cloud Non-Cloud Other International US, UK, Germany Finland

International Business Growing Cloud Revenues Approaching 50%

HISTORICALLY PROFITABLE & CASH GENERATIVE

Adjusted EBITDA (EURm) Net Operating Cashflow (EURm) R&D as %

• f Net Sales

0% 10% 20% 2010 2011 2012 2013 2014 2015 2016

R&D (expensed) R&D (capitalized)

10 20 2010 2011 2012 2013 2014 2015 2016

• 10

10 20 2010 2011 2012 2013 2014 2015 2016

Sales and marketing expansion Ongoing investments in product development

+ =

Impact on 2016 profitability

17

ACQUISITIONS SUPPORT BASWARE STRATEGY

WITH M&A OUR PRIORITIES ARE...

• Extend Basware Network
• Consolidate P2P competition
• Strengthen our offering
• Focus on key markets

OUR KEY CRITERIA INCLUDES...

• High share of cloud revenues
• Visible revenue synergy
• pportunity
• Profitable or clear path to

profitability

• Substantial benefits to customers

DISCIPLINED APPROACH TO ACQUISITIONS

Year Company Country Key rationale 2016 Verian US Strengthen market position in the US. Extend Network to Verian customers. Strengthen eProcurement 2015 Procserve UK Access to UK public sector customers to leverage the eInvoicing opportunity 2013 Certipost Benelux Gain a significant position in the Benelux e-Invoicing market 2012 1st BP Germany Become a leading e-Invoice operator in Germany

18

WHY BASWARE

Huge Market Opportunity THE Market Leader Cloud Focused Strategy

19

APPENDIX SUPPORTING MATERIALS

THE SAAS TRANSITION: LOWER UPFRONT BUT HIGHER RECURRING REVENUES

Year 1 Year 2 Year 3 Year 4 Year 5 License and Maintenance Year 1 Year 2 Year 3 Year 4 Year 5 SaaS Year 1 Year 2 Year 3 Year 4 Year 5 License & Maintenance SaaS Year 2 Year 3 Year 4 Year 5 Maintenance SaaS

On-Premise Deal: Upfront License Payment + Annual Maintenance Payments SaaS Deal: Monthly Payments Cumulative Revenues from Year 1 Cumulative Revenues from Year 2

21

• Online shopping

experience

• Items on contract
• All orders captured
• I came in 12% under budget!
• Woohoo – I am in the leader

position in savings!

• I received it!
• I can tell the system

“I got my stuff easily and quickly, and I didn’t need to know procurement to do it. And I feel good about helping the company, too.”

• Special order

requests

• Automated

calculations

• I know where my order is
• I know who to ping

THE BASWARE EXPERIENCE

EMPLOYEE REQUESTER

“I need something.” 22

“I know whether I should approve this – the relevant budget, policy, and trends are right there for me.”

• Accessible from my

smartphone

• On the Go Approvals
• Detailed Emails
• Relevant Intelligence
• Actionable Links
• Easy access to

actionable items

• Budget Summary
• Transaction Impact
• Committed Funds
• Expensed Amounts

THE BASWARE EXPERIENCE

THE APPROVER

23

• Track spending to budgets
• See committed funds
• See controlled vs.

uncontrolled spending

• Track hard dollar

tangible results

“We are driving margin through our disciplined use of financial resources. We are much more efficient.”

THE BASWARE EXPERIENCE

THE EXECUTIVE

• I have data at my

fingertips as I plan for next year

24

• Invoices enter

system automatically

“We are able to do our job faster and more

• accurately. With added visibility, monthly

accruals are a snap.”

• Visualize the AP

Workflow

• Automatic matching
• f invoices to

receipts to POs

• Only intervene where

discrepancies are flagged

• Flexible tolerances for

intervention

• Automated status to suppliers through self service
• Automate payment of recurring invoices

THE BASWARE EXPERIENCE

AP ENTRY CLERK

25

PAPER INVOICE EXAMPLES DIFFERENT FIELDS, LAYOUTS, LANGUAGES

26

E-INVOICE EXAMPLE STRUCTURED DATA, MACHINE READABLE

Extract from XML Format E-Invoice: Accompanying Image Conversion:

Note: Customer details blacked out 27

FOR INVESTORS www.basware.com/investors www.basware.com/annualreport BASWARE www.basware.com www.twitter.com/basware www.facebook.com/BaswareCorporation www.linkedin.com/company/basware RESEARCH REPORTS www.basware.com/knowledge-center

INFORMATION MORE