Basware Interim Report January 1-March 31, 2015 (IFRS)

Tuesday, 14 April, 2015
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Basware Corporation, stock exchange release, April 14, 2015 at 08:45



January-March 2015: Revenue growth at a good level

  • Net sales EUR 34 041 thousand (EUR 31 013 thousand) - increase of 9.8 percent
  • Operating profit EUR 1 132 thousand (EUR 310 thousand)
  • Operating profit 3.3 percent of net sales (1.0%)
  • Growth of Network Services net sales 38.9 percent
  • Recurring revenue 63.7 percent (66.9%) of net sales
  • Earnings per share (diluted) EUR 0.04 (-0.01)

Basware expects its net sales and operating profit (EBIT) for 2015 to grow compared to 2014.

The Interim Report is unaudited.


  1-3/ 1-3/ Change, 1-12/  
EUR thousand 2015 2014 % 2014  
Net sales 34 041 31 013 9.8 % 127 674  
EBITDA 2 790 2 099 32.9 % 11 354  
Operating profit 1 132 310 265.2% 4 325  
  % of net sales 3.3% 1.0%   3.4%  
Profit before tax 856 11 7 683.1% 4 328  
Result for the period 595 -76   2 959  
Return on equity, % 1.7% -0.3%   2.5%  
Return on investment, % 4.7% 1.7%   4.4%  
Cash and cash equivalents 73 624* 21 308 245.5 % 28 954  
Gearing, % -50.2% -15.1%   -38,6%  
Equity ratio, % 74.3% 65.9%   82.7%  
Earnings per share          
Undiluted, EUR 0.04 -0.01   0.22  
Diluted, EUR 0.04 -0.01   0.22  
Equity per share, EUR 9.89 7.40 33.6 % 9.88  

*including the short term deposit maturing within 3 months from the period end


Basware is the global leader in providing purchase-to-pay and e-invoicing solutions in the world of commerce. Basware empowers companies to unlock value across their financial operations by simplifying and streamlining key financial processes. Basware helps its customers to succeed and create added value to their business through better financial management. Basware 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 improved 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.


Basware reports one operating segment: Purchase to Pay, P2P. The segment is divided into the Network Services and Solution Services businesses that support each other.

The company reports revenue from products and services as follows: Network Services (e-invoicing solutions and services) and Solution Services (software solutions and services).

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 alliance fees of financing-related value added services. Solution Services revenue is comprised of software revenue (SaaS revenue and license sales), software maintenance and extended customer support services, professional services, and start-up fees of SaaS services.

Recurring revenue reported by the company consists of the net sales excluding license sales and professional services revenue. Alliance fees related to financing-related value added services of non-recurring nature are not included in the recurring revenue reported. The definition of the recurring revenue has been revisited to reflect the current business structure.

As of January 1, 2015, Basware reports geographical areas Finland, EMEIA & Russia, and Americas & APAC. The reported areas have been adjusted to reflect the growth in the share of the Group's international business. The Finland area includes the Finnish operations and corporate services. EMEIA & Russia combines Scandinavia and the rest of Europe, previously reported separately, and it also includes operations in Russia and Africa. Americas & APAC includes business functions in North and South America and the Pacific region. The comparison figures have been adjusted correspondingly.

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:

Revenue growth was at a good level during the first quarter, growth of 9.8 percent year-on-year. Net sales for the first quarter amounted to EUR 34 041 thousand (EUR 31 013 thousand), and operating result was EUR 1 132 thousand (EUR 310 thousand). The year-on-year growth in key markets, such as the US, the UK as well as Finland, was at a good level. The number of transactions within the Basware Network as well as the SaaS business grew according to the plan. The investments in the development of selected key operations, such as Financing Services and customer interfacing activities, have continued also during the first quarter.

The Network Services sales grew strongly during the first quarter. The net sales of Network Services amounted to EUR 11 112 thousand (EUR 8 002 thousand) during the first quarter, growth of 38.9 percent year-on-year. The development of collaboration activities continued and the company recorded solid income related to these partnership activities. The growth in the transaction volume continued also during the first quarter, up 28.5 percent year-on-year. A total of 22.1 million transactions were processed via Basware Network during the quarter.

The Solution Services sales continued steadily also during the first quarter. The net sales of the Solution Services business amounted to EUR 22 928 thousand for the first quarter (EUR 23 011 thousand). The demand for SaaS services has been at a good level, represented by the SaaS revenue growth of 21.5 percent. The billable utilization rate continued to develop positively and several significant new customer agreements were signed during the first quarter.

Building the Financing Services business and services has continued according to the plan. Basware launched Basware Discount, a new solution that allows buyers and suppliers to optimize invoice payment terms for better working capital management. As a service on the Basware Network, more than one million businesses will be able to benefit from early payment terms, managed online in real time. With the signing of the definitive agreement with Arrowgrass Capital Partners LLP, the joint development of a new e-invoicing based, supplier driven invoice financing service has kicked off.

On April 8, 2015, Basware signed an agreement to acquire Procserve, the leading e-procurement solution provider for the public sector in the UK. Procserve's and Basware's cloud-based e-procurement solutions as well as Procserve Commerce Network and the open Basware Network complement each other and they will enable public sector to operate more efficiently by automating the purchase-to-pay process, freeing up time and money that can be invested in frontline services.

Basware is the leading expert for the public sector to support their e-invoicing and e-procurement initiatives across Basware markets. There is a continued push from governments and public sector, including the UK, to adopt e-invoicing as the technology is becoming more commonplace and the benefits are realised more widely. Through the acquisitions over the recent years, Basware is already the leading e-invoicing operator in the Nordics, the Benelux market and Germany, and with the recent acquisition the company significantly strengthens its foothold in the UK.

In accordance with its strategy, Basware's geographic expansion and achieving strong growth in Basware Network continue to be the main objectives, pursued both organically and through mergers and acquisitions. The company will continue to invest in the sales and has introduced an internal Customers for Life initiative, tasked with achieving scalable growth and significantly improving the customer's experience in how they engage with Basware. Development of the Financing Services business and services and establishing and finding new significant partnerships in the business will continue actively this year.


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 2015 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 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. The global market penetration of e-invoices is estimated to be some 10 percent. The growing e-invoicing market and companies' interest in other payment and financing added value solutions as well will offer excellent growth opportunities in future years.

Outlook 2015

The global market growth in e-invoicing has been estimated to be approximately 20 percent. Basware is pursuing strong growth in Network Services by developing and automating the connection of buyers and suppliers to the e-invoicing service, by utilizing digital marketing and sales channels more extensively, and through acquisitions. In the Solution Services business, sales of Alusta are expected to have a positive effect on software net sales and professional services.

Basware's fixed costs are expected to develop moderately. Basware will invest more extensively in sales and marketing as well as research and development of new solutions and services, including Financing Services. The company will continue to improve its profit-making ability in its software business also this year by ensuring the efficient use of resources in professional services and improving the billing rate in relation to demand. The company will continue investments in the Network Services business to achieve accelerated growth by primarily developing automated solutions for sending and receiving e-invoices and new ways to achieve accelerated growth in sales.

In 2015, the company expects the acquisition of Procserve and related integration costs to exceed the savings starting from the second quarter of the year and the cost synergies to be marginally net positive next year.The company also expects the joint venture which has been established with Arrowgrass Capital Partners LLP to add net costs in 2015.

Basware continues active analysis of acquisition targets especially in the e-invoicing market in Europe and in the U.S. according to its strategy. Decisions on additional investments required for growth will be made during the year as required by the market situation and development of business operations.

Basware expects its net sales and operating profit (EBIT) for 2015 to grow compared to 2014.

Espoo, Finland, Tuesday, April 14, 2015

Board of Directors

For more information, please contact:

Esa Tihilä, CEO, Basware Corporation
Tel. +358 40 480 7098

NASDAQ OMX Helsinki Ltd
Key media

Basware Q1/2015 Interim Report