RESULTS Q4/2015 & 2015 ESA TIHIL, CEO NICLAS ROSENLEW, CFO - - PowerPoint PPT Presentation

FINANCIAL RESULTS Q4/2015 & 2015

ESA TIHILÄ, CEO NICLAS ROSENLEW, CFO FEBRUARY 2, 2016

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

• ffer to sell or the solicitation of an offer to buy any securities of Basware or otherwise to engage in any

investment activity.

FINANCIAL RESULTS Q4/2015 & 2015

BUSINESS REVIEW

KEY EVENTS 2015

The growth in Network Services continued throughout the year

• Position in public sector strengthened with

Procserve acquisition Net sales continued to grow strongly in the US, the UK and Germany, offsetting modest growth in Finland Tipping point reached in transition to cloud and SaaS-based company:

• Signed Alusta-based SaaS agreements more

than doubled;

• Licence sales decline accelerated, offset by

growth in SaaS Investments in Network Services and Financing Services business continued

Cloud business developed favourably with significant growth in key markets Starting point for the next phase of growth

Refined strategy for 2016-2018 announced

Q4/2015 IN BRIEF

Strong growth in net sales & operating profit: Transition to the cloud continued

Record number of Alusta- based SaaS agreements signed in Q4 8.5 million Network transactions in October (all- time monthly high)

NETWORK SERVICES Net sales grew significantly (53.5% vs Q4 2014) Growth of transaction volumes continued, with 25 million transactions in Q4 SOLUTION SERVICES SaaS net sales grew 21.9% Licence sales declined at a similar pace to Q3 FINANCING SERVICES 25 new customers signed up since summer 2015 in the UK, the US and Finland for Basware Pay & Basware Discount

Q4/2015 KEY FINANCIALS

• Net sales EUR 39 210 thousand

(EUR 34 644 thousand), +13.1%

• Operating profit EUR 4 305 thousand

(EUR 1 701 thousand)

Net sales EUR thousand

• 5 000

10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 Q1 Q2 Q3 Q4 2010 2011 2012 2013 2014 2015

STRONG GROWTH IN NET SALES IN HIGH POTENTIAL MARKETS

Net sales by markets (Q1-Q4 2015) Growth in net sales (2015 vs. 2014) Total: €143.4 million(1)  Net sales in stable in mature markets  Strong organic growth in key markets

(1) Includes Procserve and partnership income. (2) Excludes Procserve and partnership income. (1) (1) (2)

SIGNIFICANT GROWTH CONTINUED IN TRANSACTION VOLUMES

• 5,0

10,0 15,0 20,0 25,0 30,0 Q1 Q2 Q3 Q4 2010 2011 2012 2013 2014 2015

Million transactions

~94 million transactions in 2015 +20.2% versus 2014

CONTINUOUSLY INCREASING SHARE OF RECURRING REVENUE

The share of recurring revenue

• f net sales increased

to 66.5 % (64.9%) in Q4/2015

Net sales Share of recurring revenue, rolling 4 quarters average 0,0 % 10,0 % 20,0 % 30,0 % 40,0 % 50,0 % 60,0 % 70,0 % 80,0 % 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15

EUR thousand

20 40 60 80 100 120 140 160 2010 2011 2012 2013 2014 2015

TIPPING POINT REACHED IN TRANSITION TO CLOUD AND SAAS

Cloud businesses drive growth

Net Sales by type (€M, 2010 – 2015)

Maintenance, license and consulting provide a solid base

Other Network related Transactions SaaS Consulting Licenses Maintenance

Note: Other Network related includes Procserve and alliance fee.

2015 Net sales mix 2010 Net sales mix

Maintenance, consulting and license SaaS and Network

FINANCIAL RESULTS Q4/2015 & 2015

FINANCIAL REVIEW

• 2,0

4,0 10,0 0,0 10,0 20,0 30,0 40,0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15

Net sales Operating profit

KEY GROUP FINANCIALS

EUR thousand Q4 2015 Q4 2014 Q4 15 vs Q4 14 growth FY 2015 FY 2014 YoY growth Net sales 39 210 34 664 13.1% 143 410 127 674 12.3% Material and services

• 4 098
• 3 559

15.1%

• 16 396
• 12 796

28.1% Personnel expenses

• 22 456
• 20 803

7.9%

• 85 726
• 77 779

10.2% Other operating expenses

• 6 517
• 6 865
• 5.1%
• 29 490
• 26 004

13.4% EBITDA 6 224 3 436 81.1% 11 902 11 354 4.8% Depreciation and amortization

• 1 919
• 1 735

10.6%

• 7 226
• 7 029

2.8% Operating result (EBIT) 4 305 1 701 153.1% 4 676 4 325 8.1% Net result 2 954 1 454 103.1% 3 083 2 959 4.2% EPS, EUR (diluted) 0.21 0.11 90.6% 0.22 0.22

• 2.3%

Personnel (on average) 1 652 1 498 10.3% 1 591 1 466 8.5%

EUR million

NETWORK SERVICES & SOLUTION SERVICES IN Q4/2015

Solution Services (software solutions & services): EUR 25 124 (25 489) thousand, -1.4%; Net sales increased versus Q3 in line with the seasonal trend License sales declined 25% vs Q4 2014 (a similar pace to Q3) SaaS sales grew 21.9% vs Q4 2014 Network Services (e-invoicing solutions & services): EUR 14 086 (9 175) thousand, +53.5%; Net Sales growth includes Procserve Transaction volumes up 14.6% Q4 15 vs Q4 14 Transaction net sales up 16.8% Q4 15 vs Q4 14

Net sales by business in Q4/2015:

(25 642, -0.6 %) 4 000 6 000 8 000 10 000 12 000 14 000 16 000

NETWORK SERVICES

10 000 15 000 20 000 25 000

SOLUTIONS SERVICES

EUR thousand

EXPENSES, FINANCING & INVESTMENTS

Operating expenses* amounted to EUR 122 442 thousand (110 813), +10.5% Operating expenses include approximately EUR 3 500 thousand non-recurring expenses R&D expenses amounted to EUR 20 748 thousand (17 680), 14.5% of net sales (13.8%) Capitalized R&D expenses amounted to EUR 8 754 thousand (4 274) The operating cash flow amounted to EUR 13 648 thousand (14 912) Strong balance sheet with cash & cash equivalents amounting to EUR 33 238 thousand (28 954)

Disciplined investment in the business: Demonstrated ability to scale the business

Opex growth kept lower than net sales growth in 2015

*Operating expenses include employee benefits, depreciations & amortizations, and other operating expenses

FINANCIAL RESULTS Q4/2015 & 2015

FUTURE OUTLOOK

MARKET AND COMPETITIVE SITUATION ALLOWS ACCELERATING GROWTH

Extend cloud Purchase to Pay leadership Accelerate Network growth Unleash Financing Services

 Penetration still low but accelerating  Network is the foundation for value added services  Fragmented standards, Basware the largest network, supporting all  Growth picking up in key large markets  Demand moving rapidly to cloud solutions  Basware is a recognized market leader  Alternative financing services attracting growing investment  Basware an early leader, leveraging network data  First solutions launched NETWORK PURCHASE TO PAY FINANCING SERVICES

KEY 2016-2018 PRIORITIES FOR TAKING THE NEXT STEP

Extend cloud Purchase to Pay leadership Accelerate Network growth Unleash Financing Services

• 1. Accelerating all three businesses:
• 2. Supported and enabled by:

Further shortening of delivery times Investing in demand generation and sales Scalable company infrastructure

BASWARE OUTLOOK FOR 2016

SaaS revenue expected to grow; strong growth of Basware Commerce Network to be sustained Continued increase in recurring revenue to outpace progressive slowdown in license revenues Temporary pressure on margins driven by growth investments

• Growth related operating investments expected to

amount to approximately EUR 20 million

• EBITDA excluding non-recurring items at break-even

Disciplined acquisition strategy continues in the e-invoicing key markets; in Europe & US

Operating investments to be accelerated

Expanding sales and marketing & go-to-market capabilities R&D capability and other investments to shorten implementation Supporting development of Financing Services offering

Organic revenue growth of 5 percent or more:

MORE INFORMATION: www.basware.com/investors www.basware.com www.twitter.com/basware www.facebook.com/BaswareCorporation www.linkedin.com/company/basware

Q1 INTERIM REPORT ON APRIL 19, 2016

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