Basware Corporation, stock exchange release, April 10, 2014 at 08:45
BASWARE INTERIM REPORT JANUARY 1 - MARCH 31, 2014 (IFRS)
SUMMARY
January-March 2014: Transactions processed by Network Services increased by
25.5 percent
* Net sales EUR 31 013 thousand (EUR 29 828 thousand) - growth 4.0 percent
* Operating result EUR 310 thousand (EUR -1 569 thousand)
* Operating result 1.0 percent of net sales (-5.3%)
* Growth of Network Services net sales 23.0 percent
* Recurring revenue 66.9 percent (63.6%) of net sales
* Cash flow from operating activities EUR 13 422 thousand (EUR 9 718 thousand)
* Earnings per share (diluted) EUR -0.01 (-0.07)
Basware expects its net sales and operating result (EBIT) for 2014 to grow
compared to 2013.
The figures are unaudited.
GROUP KEY FIGURES
1-3/ 1-3/ Change, 1-12/
EUR thousand 2014 2013 % 2013
-------------------------------------------------------------------------
Net sales 31 013 29 828 4.0% 123 349
EBITDA 2 099 233 802.0% 10 383
Operating result before IFRS3 amortization 540 -1 337 4 256
Operating result 310 -1 569 3 331
% of net sales 1.0% -5.3% 2.7%
Result before tax 11 -1 526 3 284
Result for the period -76 -962 -92.1% 2 605
Return on equity, % -0.3% -3.9% 2.6%
Return on investment, % 1.7% -4.9% 3.9%
Liquid assets 21 308 23 276 -8.5% 13 218
Gearing, % -15.1% -13.2% -4.7%
Equity ratio, % 65.9% 63.7% 77.1%
Earnings per share
Undiluted, EUR -0.01 -0.07 0.20
Diluted, EUR -0.01 -0.07 0.20
Equity per share, EUR 7.40 7.51 -1.4% 7.62
Business operations
Basware is the global leader in providing purchase-to-pay and e-invoicing
solutions in the world of commerce. We empower companies to unlock value across
their financial operations by simplifying and streamlining key financial
processes. Our Basware Commerce Network, the largest open business network in
the world, connects 1 million companies across 100 countries and enables easy
collaboration between buyers and suppliers of all sizes. Through this network,
leading companies around the world achieve new levels of spend control,
efficiency and closer relations with their suppliers. With Basware, businesses
can introduce completely new ways of buying and selling to achieve significant
cost savings and boost their cash flow.
Reporting
Basware Corporation reports one operating segment: Purchase to Pay, P2P. The
segment is divided into the Network Services and Solution Services businesses
that support each other.
As of 2014, the company reports revenue from products and services as follows:
Network Services (e-invoicing solutions and services) and Solution Services
(software solutions and services). In addition to this, the company reports
revenue from its products and services according to the breakdown of the
previous reporting practice: License sales, Professional Services, Customer
Support, and Automation Services.
In accordance with the previous practice, Customer Support and Automation
Services together form the recurring revenue reported by the company.
Network Services revenue is comprised of e-invoicing, paper invoice scanning
services, printing service, catalog exchange, purchase message exchange,
activation services, and start-up fees of e-invoicing services and added value
services related to financing. Solution Services revenue is comprised of
software revenue (SaaS revenue and license sales), software maintenance and
extended customer support services (customer support), Professional Services,
and start-up fees of SaaS services.
As geographic information Basware reports geographical areas Finland,
Scandinavia, rest of Europe, and Other. Net sales are reported by the customer's
location, and net sales and operating result are also reported by the location
of the assets. In addition, the geographical information of non-current assets
is reported by the location of the assets in the annual financial statements.
CEO Esa Tihilä:
Net sales for the first quarter amounted to EUR 31 013 thousand, growth of 4.0
percent compared to the corresponding period in the previous year, and operating
result was EUR 310 thousand. International net sales grew by 9.2 percent, and
the international share of Basware's net sales was 64.1 percent (61.1%) in the
first quarter.
The net sales of the Network Services business developed as strongly as expected
during the first quarter and amounted to EUR 8 032 thousand, growth of 23.0
percent compared to the corresponding period in the previous year. The growth is
entirely organic. The strong growth in the transaction volume continued during
the first quarter, up 25.5 percent, and 17.2 million transactions were processed
via Basware Commerce Network.
Solution Services net sales amounted to EUR 22 981, down 1.4 percent. The
development of net sales was influenced by the utilization rate of consulting
being lower than planned, non-chargeable work, and delays in the entry of new
SaaS services into production compared to the plans. The Solution Services
business is expected to develop more favorably during the rest of the year. The
growth in the sales of Alusta is expected to have a positive effect on software
net sales and professional services.
The development of costs was still moderate during the first quarter of 2014.
The co-operation negotiations regarding the personnel were concluded in the
first quarter, and the Group will also conduct other saving and rationalization
measures with an estimated annual cost impact of EUR 2.5 million. The
development of operations has also aimed at accelerating the deployment of our
services and products, accelerating the production of SaaS and e-invoicing
agreements through product and process improvements and to make operations more
efficient and improve profit-making ability.
The global market growth in e-invoicing has been estimated to be approximately
20 percent. Basware is pursuing accelerated growth that exceeds the market
growth in its Network Services. Stronger growth can be achieved by developing
and automating the connection of buyers and suppliers to the e-invoicing
services, by utilizing digital marketing and sales channels more extensively,
and through acquisitions.
Basware's internationalization and transformation into the global leader in
providing purchase-to-pay and e-invoicing solutions is illustrated by our
refreshed brand promise, Unlocking value in a connected business world. It
reflects how we empower our customers to unlock value across their financial
operations by simplifying and streamlining key financial processes. Our Basware
Commerce Network enables easy collaboration between 1 million buyers and
suppliers in over 100 countries. The cooperation with MasterCard for creating
value added services for financing and a new global e-payment solution for
Purchase to Pay proceeds as planned.
FUTURE OUTLOOK
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 2014 and the
continuous need 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 growing in companies' portfolios. Basware continues active analysis
of acquisition targets especially in the e-invoicing market in Europe and in the
U.S. according to its strategy.
By the end of 2015, Basware aims to become the largest business commerce network
for buyers and suppliers. The penetration rate of e-invoicing is still low. It
varies between 5-30 percent depending on the country, and it has been estimated
to grow strongly. The growing and evolving e-invoicing market will offer Basware
excellent growth opportunities, as will the provision of added value services
related to financing.
Outlook 2014
The global market growth in e-invoicing has been estimated to be approximately
20 percent. Basware is pursuing accelerated growth that exceeds the market
growth in its Network Services. Stronger growth can be achieved by developing
and automating the connection of buyers and suppliers to the e-invoicing
services, by utilizing digital marketing and sales channels more extensively,
and through acquisitions.
The Solution Services business is expected to develop more favorably during the
rest of the year. The growth in the sales of Alusta is expected to have a
positive effect on software net sales and professional services.
The development of costs was still moderate during the first quarter of 2014.
Decisions about investments required by the growth will be made during the year
if the market situation and business development so requires.
Basware expects its net sales and operating profit (EBIT) for 2014 to grow
compared to 2013.
Espoo, Finland, April 10, 2014
BASWARE CORPORATION
Board of Directors
For more information, please contact:
Esa Tihilä, CEO, Basware Corporation
Tel. +358 40 480 7098
Distribution:
NASDAQ OMX Helsinki Ltd
Key media
www.basware.com
[HUG#1776138]
