INVESTOR PRESENTATION Q3 2017 Vesa Tykkyläinen, CEO Niclas Rosenlew, CFO October 18, 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
CONVERTING TO E-INVOICING E-INVOICING RATE NOW A WHOPPING 96%. ”CURRENTLY WE ARE SENDING ELECTRONIC INVOICES TO 96% OF OUR CUSTOMERS. IT IS FANTASTIC! I HAVE A HAPPY CFO.” Liselotte Frost Christensen, Credit Manager, Carlsberg Group
CUSTOMER SUCCESS EXAMPLES OF GLOBAL CUSTOMER WINS ACROSS INDUSTRIES IN Q3 2017
CUSTOMER SUCCESS EXAMPLES OF CUSTOMER TRANSFORMATIONS SIGNED IN Q3 2017
BASWARE LEADS INDUSTRY INNOVATION IN Q3 Enhancements to Analytics: Peer Benchmarking, Predictive Analytics Discount Partnership with Nordea Basware Vault
Q3 2017 STRONG CLOUD MOMENTUM Cloud revenues 55% of total STRATEGIC PRIORITY: Subscription ARR CLOUD REVENUE Order Intake YTD +66% GROWTH Productivity savings fully visible in cost base
FINANCIAL REVIEW
SOLID SUBSCRIPTION ORDER INTAKE 10,0 • Investments in 9,0 sales and marketing 8,0 delivered solid 7,0 order intake 6,0 EUR m 5,0 • Time lag to 4,0 visibility in 3,0 revenues 2,0 1.9 2.2 5.7 9.5 1,0 0,0 Q3 2016 Q3 2017 YTD 2016 YTD 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. Transaction 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.
STRONG CLOUD REVENUES 25 More than half of total revenues now 20 from Cloud 15 EUR m 10 55% 5 0 Cloud Non Cloud Q3 2016 Q3 2017 SaaS Transaction Services Other Cloud Revenues
Q3 2017 NET SALES PROGRESSION Net sales by revenue type 7-9 2017 7-9 2016 Change • SaaS growth (EUR thousand) continued to be SaaS 8 451 6 336 33% strong, up 33% Revenue Transaction services 9 632 8 547 13% Cloud Other cloud revenue 1 269 1 572 -19% • Significant cloud Cloud Revenue total 19 352 16 455 18% potential in existing Maintenance 8 965 10 168 -12% maintenance Non-Cloud License sales 790 1 137 -31% Revenue customer base Consulting services 6 380 7 439 -14% being addressed Other non-cloud revenue -42 96 Non-Cloud Revenue total 16 092 18 841 -15% Group Total 35 444 35 295 0%
Q3 2017 PROFITABILITY • Effect of (EUR thousand) 7-9 2017 7-9 2016 Change productivity Net sales 35 444 35 295 0% programme visible Materials and services -3 562 -3 576 0% in cost base Personnel expenses -21 370 -24 070 -11% Other operating expenses -7 446 -7 682 -3% Total costs and expenses excluding -32 378 -35 328 -8% • Savings achieved depreciation as result of Reported EBITDA 3 121 -33 personnel reductions approx. Adjustments to EBITDA 156 1 414 -89% EUR 1.6 m in Q3 Adjusted EBITDA 3 277 1 381 137% and EUR 3.3 m YTD
Q3 2017 R&D INVESTMENTS • Full impact of (EUR thousand) 7-9 2017 7-9 2016 Change Q4 2016 R&D expenses excluding depreciation 2 572 2 664 -3% productivity Capitalised R&D 2 192 2 639 -17% measures Total R&D investments 4 764 5 304 -10% realised Total R&D investments as % of net 13% 15% sales
Q3 2017 CASH FLOW AND BALANCE SHEET • Strong liquidity position with cash and (EUR thousand) 7-9 2017 7-9 2016 undrawn bank Cash flows from operating activities -4 840 -5 479 facilities totalling EUR Net change in cash and cash equivalents 1 708 -8 713 35 m Cash and cash equivalents 25 275 12 951 • EUR 30 m loan Total available liquidity* 35 275 22 951 financing executed * Includes undrawn bank facilities and short term deposits
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
APPENDIX
SUBSCRIPTION ARR GROSS ORDER INTAKE 5,0 • Subscription 4.4 4,5 annual recurring revenue gross 4,0 order intake 3,5 quarterly 2.8 2.7 3,0 EUR m 2.2 2.2 2,5 1.9 2,0 1,5 1.1 1,0 1.9 0,5 0,0 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 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. Transaction 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.
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