2012-04-13 07:56:07 CEST
2012-04-13 07:56:48 CEST
REGULATED INFORMATION
BasWare - Interim report (Q1 and Q3)
Basware : Basware Interim Report January 1-March 31, 2012
Basware Corporation stock exchange release, April 13, 2012 at 09:00
BASWARE INTERIM REPORT JANUARY 1 - MARCH 31, 2012 (IFRS)
SUMMARY
January-March Q1: Demand for services grew stronger
* Net sales EUR 27 435 thousand (EUR 26 058 thousand) - growth 5.3 percent
* Operating profit EUR 1 822 thousand (EUR 2 957 thousand) - decrease of 38.4
percent
* Operating profit 6.6 percent of net sales (11.3%)
* Growth of Automation Services (SaaS and e-Invoicing) 46.5 percent
* The estimated revenue to be recognized for current Automation Services
agreements in production in the next twelve months is EUR 21.8 million,
growth from previous quarter 19.4 percent
* Recurring revenue (including Maintenance and Automation Services) 55.5%
(48.3%) of net sales
* Cash flow from operating activities EUR 10 634 thousand (EUR 14 623
thousand)
* Earnings per share (diluted) EUR 0.11 (0.19) - decrease of 38.2 percent
Basware expects, as earlier estimated, its net sales for 2012 to grow from the
previous year. Operating profit (EBIT) for 2012 is expected to be between EUR
8-18 million.
The interim report is unaudited.
GROUP KEY FIGURES
1-3/ 1-3/ Change, 1-12/
EUR thousand 2012 2011 % 2011
------------------------------------------------------------------------
Net sales 27 435 26 058 5.3 107 750
EBITDA 3 188 4 169 -24.0 17 284
Operating profit before IFRS3 amortization 2 455 3 458 -29.0 14 290
Operating profit 1 822 2 957 -38.4 12 280
% of net sales 6.6% 11.3% 11.4%
Profit before tax 1 918 2 930 -34.5 12 332
Profit for the period 1 476 2 268 -34.9 9 671
Return on equity, % 6.0% 11.4% 11.6%
Return on investment, % 8.0% 14.7% 14.9%
Liquid assets *) 34 450 48 295 -28.7 42 977
Gearing, % -35.2% -50.7% -42.3%
Equity ratio, % 70.5% 71.0% 81.9%
Earnings per share, EUR 0.11 0.19 -38.3 0.76
Earnings per share (diluted), EUR 0.11 0.19 -38.2 0.76
Parent company's shareholder's
equity per share, EUR 7.47 7.16 4.3 7.76
*) Includes cash, cash equivalents and financial assets at fair value through
profit or loss
REPORTING
As of the first quarter in 2012 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 SaaS services.
Basware reports the estimated revenue to be recognized for current Automation
Services agreements in production 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.
Basware issued a stock exchange release of changes in external reporting in
2012 on March 19, 2012.
CEO Esa Tihilä comments in conjunction with the Interim Report:"I am satisfied with our performance in the first quarter and in particular the
strong growth in Automation Services as well as the fact that recurring revenue
accounted for as much as 55.5% of the company's net sales. The company is
undergoing a transformation from a software company into a service company,
which requires additional investments and changes our operating methods,
solutions, and services. We are aiming at completely new customer groups through
segmented customer management and portfolio of products and services. Our
strategic goal is to become the world's leading e-Invoice operator.
During the first quarter, we concluded several significant deals in all of our
geographic segments. With regard to the service business, the demand increased
on the whole, and demand shifted from license sales towards Software as a
Service (SaaS) solutions. The deals made also included virtual operator
agreements as new distribution channel models. Automation Services have already
increased their share to 19.8% of net sales. Recurring revenue (Maintenance and
Automation Services) continued to account for an increasing share of net sales,
totaling 55.5% of net sales.
The transaction volume processed by Automation Services continued to grow
favorably during the first quarter, increasing by 77.1%. Increasing transaction
volumes are essential to the continuous development of Automation Services.
During the first quarter, our net sales increased by 5.3% to EUR 27.4 million,
with our operating profit amounting to 6.6% of net sales, or EUR 1.8 million.
License sales' share of net sales decreased compared to the previous year, with
the majority of deals being based on SaaS solutions. The realization of the
investments required for the company's growth as planned contributed to the
decrease in net sales. These include increasing the Volume Sales function and
Volume Delivery implementation consultation, investments in the growth of
Automation Services and launch of the Basware Alusta platform technology.
Basware launched the Alusta platform technology during the first quarter of
2012. The Alusta technology combines Basware's financial process competence and
cloud services with usage-based pricing, guaranteeing organizations of all sizes
easy connectivity through an open network. The company's next-generation product
suite is also offered as a service. The Alusta technology supports Basware's
strategic growth and will improve the company's competitiveness.
The company will continue to follow its strategy of focusing increasingly on the
service business, selling software as a service instead of licenses."
Market outlook and operating environment
Market estimates released in April 2012 expect the software market to grow 6.2
percent globally (forecast unchanged) and 8.0 percent in the U.S. in 2011
(forecast unchanged). 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. (previous
estimate 6.8%) in 2012. According to research companies, the software market is
expected to grow at a rate of 7.0 percent globally, IT services by 5.6% and the
IT market as a whole by 7.3 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 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 is surveying the
development of offshoring in order to improve profitability also with regard to
new service business operations and internal support functions. The company is
also investigating the possibility of new geographical regions in expanding
offshoring.
Espoo, Finland, April 13, 2012
BASWARE CORPORATION
Board of Directors
For more information, please contact
CEO Esa Tihilä, Basware Corporation
Tel. +358 40 480 7098
Analyst and Press Briefing
Basware arranges today, April 13, 2012 a briefing on the Interim Report for the
press and analysts at 11:00 a.m. in Hotel Kämp, Pohjoisesplanadi 29, Helsinki,
Finland. During this briefing CEO Esa Tihilä and CFO Mika Harjuaho will comment
on the events and financial performance of the quarter. Welcome.
A conference call for analysts will take place on April 13 at 3 p.m. EEST:
Preregistration is required to listen to the conference call:
https://emea.directeventreg.com/registration/event/70450316
Preregistration is required to see the presentation during the conference call:
http://webeventservices.reg.meeting-stream.com/62160_basware/
Distribution:
NASDAQ OMX Helsinki Ltd
Key media
www.basware.com
Enclosure: Basware_interim_report_Q1_2012
[HUG#1602194]
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