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 offer 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 Cloud business developed favourably with significant growth Starting point for the in key markets next phase of growth The growth in Network Services continued throughout the year Refined strategy for • Position in public sector strengthened with 2016-2018 announced 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

Q4/2015 IN BRIEF Strong growth in net sales & operating profit: Transition to the cloud NETWORK SERVICES continued Net sales grew significantly (53.5% vs Q4 2014) Growth of transaction volumes continued, Record number of Alusta- with 25 million transactions in Q4 based SaaS agreements signed in Q4 SOLUTION SERVICES 8.5 million Network SaaS net sales grew 21.9% transactions in October (all- Licence sales declined at a similar pace to Q3 time monthly high) 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 • Operating profit EUR 4 305 thousand • Net sales EUR 39 210 thousand (EUR 1 701 thousand) (EUR 34 644 thousand), +13.1% Net sales EUR thousand 45 000 40 000 35 000 30 000 25 000 20 000 15 000 10 000 5 000 - 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)  Net sales in stable in mature markets  Strong organic growth in key markets (1) Total: € 143.4 million (1) (1) (2) (1) Includes Procserve and partnership income. (2) Excludes Procserve and partnership income.

SIGNIFICANT GROWTH CONTINUED IN TRANSACTION VOLUMES Million transactions 30,0 25,0 ~94 million 20,0 transactions in 2015 15,0 10,0 +20.2% versus 2014 5,0 - Q1 Q2 Q3 Q4 2010 2011 2012 2013 2014 2015

CONTINUOUSLY INCREASING SHARE OF RECURRING REVENUE EUR thousand 45 000 80,0 % The share of 40 000 recurring revenue 70,0 % of net sales increased 35 000 60,0 % to 66.5 % (64.9%) in 30 000 Q4/2015 50,0 % 25 000 40,0 % 20 000 30,0 % 15 000 Net sales 20,0 % 10 000 Share of 10,0 % 5 000 recurring 0 0,0 % revenue, rolling 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 4 quarters average

TIPPING POINT REACHED IN TRANSITION TO CLOUD AND SAAS Net Sales by type ( € M, 2010 – 2015) 160 2015 Net sales mix Other Network 140 related Cloud 120 businesses drive growth Transactions 100 SaaS 80 Maintenance, 2010 Net sales mix Consulting license and 60 consulting Licenses provide a 40 solid base Maintenance 20 0 Maintenance, consulting and license 2010 2011 2012 2013 2014 2015 SaaS and Network Note: Other Network related includes Procserve and alliance fee.

FINANCIAL RESULTS Q4/2015 & 2015 FINANCIAL REVIEW

KEY GROUP FINANCIALS 40,0 10,0 30,0 EUR million 20,0 4,0 10,0 0,0 -2,0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Net sales Operating profit Q4 15 vs Q4 EUR thousand Q4 2015 Q4 2014 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%

NETWORK SERVICES & SOLUTION SERVICES IN Q4/2015 SOLUTIONS SERVICES EUR thousand 25 000 Net sales by business in Q4/2015: 20 000 Solution Services (software solutions & services): 15 000 EUR 25 124 (25 489) thousand, -1.4%; Net sales increased versus Q3 in line with the seasonal trend 10 000 License sales declined 25% vs Q4 2014 (a similar pace to Q3) SaaS sales grew 21.9% vs Q4 2014 NETWORK SERVICES Network Services (e-invoicing solutions & services): 16 000 EUR 14 086 (9 175) thousand, +53.5%; 14 000 Net Sales growth includes Procserve 12 000 Transaction volumes up 14.6% Q4 15 vs Q4 14 Transaction net sales up 16.8% Q4 15 vs Q4 14 10 000 8 000 6 000 (25 642, -0.6 %) 4 000

EXPENSES, FINANCING & INVESTMENTS Disciplined investment in the business: Demonstrated ability to scale the business Operating expenses* amounted to EUR 122 442 thousand (110 813), +10.5% Opex growth kept lower Operating expenses include approximately EUR 3 500 thousand non-recurring expenses than net sales growth in 2015 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) *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 NETWORK PURCHASE TO PAY FINANCING SERVICES Penetration still low but Growth picking up in Alternative financing    accelerating key large markets services attracting growing investment  Network is the  Demand moving rapidly foundation for value to cloud solutions  Basware an early added services leader, leveraging Basware is a network data   Fragmented standards, recognized market Basware the largest leader  First solutions launched network, supporting all Accelerate Network Extend cloud Purchase Unleash Financing growth to Pay leadership Services

KEY 2016-2018 PRIORITIES FOR TAKING THE NEXT STEP 1. Accelerating all three businesses: Extend cloud Unleash Accelerate Purchase to Pay Financing Network growth leadership Services 2. Supported and enabled by: Investing in Further Scalable demand shortening of company generation delivery times infrastructure and sales

BASWARE OUTLOOK FOR 2016 Organic revenue growth of 5 percent or more: SaaS revenue expected to grow; strong growth of Basware Operating investments Commerce Network to be sustained to be accelerated Continued increase in recurring revenue to outpace progressive slowdown in license revenues Expanding sales and marketing & go-to-market capabilities Temporary pressure on margins driven by growth investments R&D capability and other • Growth related operating investments expected to investments to shorten amount to approximately EUR 20 million implementation • EBITDA excluding non-recurring items at break-even Supporting development of Financing Services offering Disciplined acquisition strategy continues in the e-invoicing key markets; in Europe & US

NEXT REPORT Q1 INTERIM REPORT ON APRIL 19, 2016 MORE INFORMATION: www.basware.com/investors www.basware.com www.twitter.com/basware www.facebook.com/BaswareCorporation www.linkedin.com/company/basware