Basware Interim Report January 1-March 31, 2016 (IFRS)

Basware Corporation, stock exchange release, April 19, 2016 at 08:45



Basware invested for future growth and transition to the cloud accelerated

January-March 2016:

  • Net sales EUR 34 125 thousand (EUR 34 041 thousand)

  • Organic revenue growth 3.5 percent at constant currencies

  • Adjusted EBITDA EUR -517 thousand (EUR 18 thousand)

  • Recurring revenue 72.9 percent (63.7%) of net sales

  • Earnings per share (diluted) EUR -0.21 (0.04)

The Interim Report is unaudited.

According to Basware's refined strategy, the company is targeting accelerated revenue growth during its strategy period 2016-2018. In 2016, Basware will accelerate its growth-related investments primarily focused on its cloud business, sales and marketing and related supporting activities as well as in the rollout of Basware's Financing Services offering. For 2016, Basware expects organic revenue growth of 5 percent or more for the year at constant currencies, and temporary pressure on margins driven by accelerated growth investments resulting in adjusted EBITDA (excluding non-recurring items) around break-even. The growth related accelerated operating investments are planned to amount to approximately 20 million euros.


  01-03/ 01-03/ Change, 1-12/  
EUR thousand 2016 2015 % 2015  
Net sales34 12534 0410.2143 410 
Organic revenue growth*3.5 %    
EBITDA-8672 790 11 902 
Adjusted EBITDA* *-51718 12 337 
Operating result-2 7161 132 4 676 
  % of net sales-8.0 %3.3% 3.3 % 
Result before tax-3 773856 3 563 
Result for the period-2 957595 3 083 
Return on equity, %-8.5%1.7% 2.2 % 
Return on investment, %-8.5 %4.7% 3.6 % 
Cash and cash equivalents54 65473 624***-25.833 238 
Gearing, %-28.9 %-50.2% -22.4 % 
Equity ratio, %66.3 %74.3% 79.1 % 
Earnings per share     
Undiluted, EUR-0.210.04 0.22 
Diluted, EUR-0.210.04 0.22 
Equity per share, EUR9.649.89-3.69.97 

*at constant currencies
**EBITDA excluding non-recurring items
*** Including short term deposits maturing within 3 months from the period end


Basware is the global leader in providing networked purchase-to-pay solutions, e-invoicing and innovative financing services. Basware's commerce and financing network connects businesses in over 100 countries and territories around the globe. As the largest open business network in the world, Basware provides scale and reach for organizations of all sizes, enabling them to grow their business and unlock value across their operations by simplifying and streamlining financial processes. Small and large companies around the world achieve significant cost savings, more flexible payment terms, greater efficiencies and closer relationships with their suppliers.

CEO Esa Tihilä:

Basware's transition to a cloud and SaaS-based company continued to accelerate, with strong momentum in SaaS deals during the first quarter, and we expect this positive trend to continue. In the first quarter, we won a number of important Network agreements and were especially pleased with the strengthening of our sender-related business. This will positively impact growth in coming quarters. The Financing Services business generated significant deal activity and the first customers have started using Financing Services solutions and services. Overall however, as expected, the transition to SaaS continued to drag on total net sales growth as net sales of licenses were down significantly in the first quarter.

Sales of services developed well in the first quarter. The orderbook grew more strongly than expected and 26 Alusta deals (compared to 11 in Q1/2015) were closed. Network transactions amounted to 24.8 million during the quarter, with March a record month (8.7 million transactions). 15 agreements were closed in Financing Services during the quarter. Financing Services has enhanced the quality of all customer discussions, adding another dimension to differentiate Basware's solutions and services.

Basware executed against the announced growth enablers in its refined strategy for 2016-2018, investing in demand generation and sales in particular. Sales and marketing headcount grew 16.3 percent in the first quarter, with the rate of additions expected to increase during the second quarter due to the lead time in hiring processes. These investments are expected to show returns in late 2016 and early 2017.

A key area of management attention during the quarter has been on the efficiency and speed of delivering our services to customers in order to improve the revenue growth rates. A number of initiatives have been implemented to drive this, including piloting in Sweden a rapid deployment methodology for Alusta deliveries, moving to a global allocation of resources in Professional Services and greater regional oversight to drive timely deliveries.

Developing the customer services function is also key to Basware's strategy. Customer satisfaction is now tied to incentives at all levels in the Basware organization. Feedback from customers has been positive and we have had especially good feedback on the quality of our products and services.

Actions related to improving the quality of our operations play an important part of ensuring good customer services, revenue growth and efficiency of delivery. Key first quarter product achievements included the development of a sending solution enabling suppliers to start sending PDF invoices to Basware without any installations, as well as adding Vendor Management and Business Directory to our Network services.

Basware's acquisition and partnership activity also supported progress towards the 2018 goals. On March 31, 2016, Basware announced the acquisition of Verian, a leading cloud based e-procurement solution provider in the US. The acquisition will further strengthen Basware's market position in the US, doubling company's operations locally, and will add new talent and additional e-procurement capabilities to Basware. The acquisition will also extend Basware's network by offering our market leading open commerce and financing network and Financing Services to Verian's customers. In March Basware also announced a partnership with WEX Inc. to offer Basware Financing Services to their broad customer base.


Operating environment and market outlook

Companies of all sizes globally are under pressure to improve their cash flows, find new innovative payment strategies, and automate their financial processes and functions. The company expects the same to continue also in 2016 and the continuous demand for services to remain at a favorable level among its customers.

Consolidation is expected to continue in the business environment, with the role of services as an industry standard growing in companies' portfolios. According to industry research, e-invoicing has become more common and the number of e-invoices has grown substantially in Europe and the rest of the world. Public sector e-commerce initiatives, launched particularly across the EU and the US, are expected to drive further adoption of e-invoicing. The growing e-invoicing market and companies' interest in other payment and financing added value solutions will offer excellent growth opportunities in future years.

Outlook 2016

As part of its refined strategy for 2016-2018, Basware will accelerate operating investments in 2016 to drive higher organic growth. In particular go-to-market and related activities will be expanded, with a focus on the UK, the US, and Germany, and the development of the Financing Services offering will be accelerated. In addition, Basware will invest in R&D activities aimed at shortening the implementation times of Basware's solutions and services with new and existing customers. The growth related accelerated operating investments are planned to amount to approximately 20 million euros.

While EBITDA margin will be temporarily impacted in 2016 due to the investments, the underlying profitability will continue to improve as a result of efficiency and simplification initiatives. These initiatives include continuous cost of sales reduction of Basware's cloud-based business, increasing use of online tools and services to selectively automate demand generation and sales activities, as well as various supporting process simplification and scalability related actions.

For 2016, Basware expects organic revenue growth of 5 percent or more for the year at constant currencies, and temporary pressure on margins driven by accelerated growth investments resulting in adjusted EBITDA (excluding non-recurring items) around break-even. The company also expects its SaaS net sales to grow as well as to sustain strong growth of Basware's network. The continued increase in the company's recurring revenue is expected to outpace the progressive slowdown in license net sales. Seasonality affects Basware's business throughout the year, and typically the last quarter of the year has been the strongest quarter.

Organic growth will continue to be supported by a disciplined acquisition strategy, aimed at strengthening the company's position in key markets, especially in the e-invoicing market in Europe and in the US.

Espoo, Finland, Tuesday, April 19, 2016

Board of Directors

Esa Tihilä, CEO, Basware Corporation

For more information, please contact:

Niclas Rosenlew, CFO, Basware Corporation
+358 504 802 160

Nasdaq Helsinki
Key media


Basware Q1/2016 Interim Report

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The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Basware via GlobeNewswire