Basware : Basware Interim Report January 1-June 30, 2012 (IFRS)


Basware Corporation stock exchange release, July 11, 2012 at 09:00


BASWARE INTERIM REPORT JANUARY 1 - JUNE 30, 2012 (IFRS)

SUMMARY

January-June H1/2012: Strong growth in service business continues

  * Net sales EUR 56 153 thousand (EUR 53 338 thousand) - growth 5.3 percent
  * Operating profit EUR 3 120 thousand (EUR 5 788 thousand) - decrease of 46.1
    percent
  * Operating profit 5.6 percent of net sales (10.9%)
  * Growth of Automation Services (SaaS and e-Invoicing) 46.0 percent
  * Recurring revenue (including Maintenance and Automation Services) 55.1
    percent (47.9%) of net sales
  * Cash flow from operating activities EUR 9 946 thousand (EUR 15 800 thousand)
  * Earnings per share (diluted) EUR 0.19 (0.35) - decrease of 46.6 percent

April-June Q2/2012:

  * Net sales EUR 28 718 thousand (EUR 27 280 thousand) - growth 5.3 percent
  * Operating profit EUR 1 298 thousand (EUR 2 832 thousand) - decrease 54.2
    percent
  * Operating profit 4.5 percent of net sales (10.4%)
  * Growth of Automation Services (SaaS and e-invoicing) 45.6 percent
  * The estimated revenue to be recognized for current Automation Services
    agreements that are in production as well as for new, signed agreements in
    the next twelve months is EUR 27.0 million, growth from previous quarter
    9.7 percent
  * Recurring revenue (including Maintenance and Automation Services) 54.7
    percent (47.6%) of net sales
  * Earnings per share (diluted) EUR 0.07 (0.17) - decrease of 56.1 percent

Basware expects its net sales for 2012 to grow from the previous year, and
operating profit (EBIT) is expected to be EUR 8-13 million. The company
estimates that its net sales for the latter half of the year will see a stronger
growth than for the ended review period.

Previously, the company expected its net sales for 2012 to grow from the
previous year, and operating profit (EBIT) to be EUR 8-18 million.


The interim report is unaudited.


GROUP KEY FIGURES

                              4-6/   4-6/ Change,   1-6/   1-6/ Change,   1-12/
 EUR thousand                 2012   2011       %   2012   2011       %    2011
-------------------------------------------------------------------------------


 Net sales                  28 718 27 280    5.3% 56 153 53 338    5.3% 107 750

 EBITDA                      2 793  4 111  -32.1%  5 981  8 305  -28.0%  17 284

 Operating profit before
 IFRS3 amortization          1 847  3 333  -44.6%  4 302  6 791  -36.7%  14 290

 Operating profit            1 298  2 832  -54.2%  3 120  5 788  -46.1%  12 280

    % of net sales            4.5%  10.4%           5.6%  10.9%           11.4%

 Profit before tax           1 296  2 904  -55.4%  3 214  5 834  -44.9%  12 332

 Profit for the period         949  2 162  -56.1%  2 425  4 430  -45.3%   9 671



 Return on equity, %          3.9%   9.3%           4.9%  11.0%           11.6%

 Return on investment, %      5.7%  12.5%           6.7%  14.3%           14.9%

 Liquid assets *)           31 630 47 661  -33.6% 31 630 47 661  -33.6%  42 977

 Gearing, %                 -32.0% -48.1%         -32.0% -48.1%          -42.3%

 Equity ratio, %             74.4%  75.1%          74.4%  75.1%           81.9%



 Earnings per share, EUR      0.07   0.17  -56.1%   0.19   0.35  -46.7%    0.76

 Earnings per share
 (diluted), EUR               0.07   0.17  -56.1%   0.19   0.35  -46.6%    0.76

 Parent company's
 shareholders'

 equity per share, EUR        7.56   7.32    3.2%   7.56   7.32    3.2%    7.76

*) Includes cash, cash equivalents and financial assets at fair value through
profit or loss

Reporting

Basware Corporation reports one operating segment: Purchase to Pay, P2P.

Basware reports income for products and services as follows: License sales,
Professional Services, Maintenance and Automation Services. License sales
consists of Purchase to Pay product family together with payment, financial
planning and reporting solutions sold only in Finland. Automation Services
include e-Invoicing, scanning services, printing services, catalogue management,
purchase message exchange, activation services and Software as a Service (SaaS)
services.

Basware reports the estimated revenue to be recognized for current Automation
Services agreements that are in production as well as for new, signed agreements
in the next twelve months. Automation Services agreements typically expand
several years or are valid until further notice.

As geographic information Basware reports geographical areas Finland,
Scandinavia, rest of the Europe and Other. In the geographical information net
sales is split by customer's location. Net sales and operating profit are also
reported by the location of the assets. In annual financial statements the
geographical information of non-current assets is reported by the location of
the assets.

CEO Esa Tihilä comments in conjunction with the Interim Report:

"The company's ongoing transition process from a software company to a service
company is proceeding according to plan. For example, during the first half of
the year we connected more than
1 000 net sales-generating customers that send invoices and 125 new invoice-
receiving customers to e-invoicing service production.

Our corporate performance is currently influenced by the decrease in license
sales and the planned investments required by the growth and transformation
process.

During the second quarter, our net sales increased by 5.3% to EUR 28.7 million,
with our operating profit amounting to EUR 1.3 million. Even though our product
sales decreased by EUR 1.0 million during the second quarter compared with the
corresponding period the previous year, Basware Purchase-to-Pay (P2P) license
sales were on a par with last year. In addition, the increase of EUR 1.8 million
in Automation Services during the second quarter compensated for the decrease in
license sales.

The strong growth in Automation Services continued during the second quarter.
Growth in services was largely generated in the international market. The
transaction volume processed by Automation Services amounted to 8.2 million
during the quarter, up 63.4%. Automation Services account for 20.4% of net
sales. Recurring revenue (Maintenance and Automation Services) accounted for an
increasing share of net sales compared to the previous year, totaling 54.7% of
net sales.

Sales of Software as a Service solutions are increasing at a steady rate, with
an increasing number of agreements made as SaaS services and the demand for
license sales shifting towards service solutions. We have secured new multi-year
SaaS and e-invoicing service agreements with a value of EUR 17.9 million during
the first two quarters. Basware Alusta, cloud-based platform for Purchase-to-Pay
technology launched during the first quarter, has been received well by our
customers.

Our performance during the first two quarters gives a strong foundation for
reaching the growth objectives of Automation Services during the rest of the
year. The company's growth is expected to speed up during the remainder of the
year, supported by the growth in Automation Services, and the results of the
transformation will begin to be visible in increasing net sales and profit."

Market outlook and operating environment

According to the most recent market estimates the software market is expected to
grow 6.0 percent globally (previous estimate 6.2%) and 7.4 percent in the U.S.
(previous estimate 8.0%). The entire IT services market is expected to grow by
4.7 percent globally (forecast unchanged) and by 7.3 percent in the U.S.
(forecast unchanged) in 2012. According to research companies, the software
market is expected to grow globally in 2013 at a rate of 7.0 percent, IT
services by 5.6% and the IT market as a whole by 6.7 percent.

The number of acquisitions and partnerships has increased in the market.
Companies active in the market are trying to strengthen their supplier networks
and expand geographically. Consolidation is expected to continue in the business
environment, with the role of services growing in companies' portfolios. Basware
continues active analyzing of acquisition targets especially in European e-
Invoicing market according to Basware's strategy.

The launch of Basware's next generation solutions during the first quarter in
2012 will further improve the competitiveness of Basware's solutions and
services. Through the acquisition of German e-Invoicing operator in January
2012 we gained innovative technology, which will improve the competitiveness of
the company. Also Automation Services will have a positive impact on the
competitiveness, improving the predictability and transparency of the company's
net sales and profitability in the long term.

Basware aims to become a leading company in e-invoicing worldwide. E-Invoicing
and the supporting services are targeted to connect suppliers and buyers also
outside of Basware's existing software customer base, leading into a higher
potential. The penetration rate of e-Invoicing is low, between 5-30 percent
depending on the country,  which creates a solid foundation for the future
growth of Basware Automation Services.

The role of offshoring operations will continue to grow in the company's
strategy. R&D and Automation Services operations at Basware's Indian office have
already succeeded in gaining a significant role. The company has developed its
offshoring operations in order to improve profitability also with regard to new
service business operations and internal support functions.

Espoo, Finland, July 11, 2012

BASWARE CORPORATION
Board of Directors

For more information, please contact:
CEO Esa Tihilä, Basware Corporation
Tel. +358 40 480 7098


Interim Report briefing & conference call

Basware arranges a briefing on the Interim Report for the press and analysts on
July 11, 2012 at 11:00 a.m. in Hotel Kämp (Kluuvikatu 2, 2nd floor), Helsinki,
Finland. During this briefing CEO Esa Tihilä and CFO Mika Harjuaho will comment
on the events and financial performance of the quarter. More information and
registration: Sirje Ahvenlampi, Manager, Investor Relations, tel. +358 (0)50
557 3822, sirje.ahvenlampi (at) basware.com.

A conference call for analysts who are not able to attend the briefing will take
place on July 11, 2012 at 3 p.m. EET:

Preregistration is required to listen to the conference call:
http://emea.directeventreg.com/registration/event/98332524

Preregistration is required to see the presentation during the conference call:
http://webeventservices.reg.meeting-stream.com/66082_basware

Capital Markets Day in September

Basware arranges a Capital Markets Day for investors and analysts in London on
September 4, 2012. The aim of the event is to tell about Basware's strategy and
operations. The program will consist of management presentations, given by the
CEO Esa Tihilä and other representatives of the company's top management. More
information about the event will be available on the company's website.

Distribution:
NASDAQ OMX Helsinki Ltd
Key media
www.basware.com


[HUG#1625041]

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