2011-10-13 07:44:35 CEST
2011-10-13 07:45:14 CEST
REGULATED INFORMATION
BasWare - Interim report (Q1 and Q3)
Basware : BASWARE INTERIM REPORT JANUARY 1 - SEPTEMBER 30, 2011 (IFRS)
Basware Corporation Stock Exchange release, October 12, 2011
BASWARE INTERIM REPORT JANUARY 1 - SEPTEMBER 30, 2011 (IFRS)
SUMMARY
January-September 1-9/2011:
- Net sales EUR 77 523 thousand (EUR 72 946 thousand) -
growth 6.3 percent
- Operating profit EUR 8 826 thousand (EUR 8 550 thousand) -
growth 3.2 percent
- Operating profit 11.4 percent of net sales (11.7%)
- Growth of Automation Services (SaaS and e-invoicing) 39.4
percent
- Recurring revenue (including Maintenance and Automation
Services) 49.7% (45.1%) of net sales
- Cash flow from operating activities EUR 15 941 thousand
(EUR 11 368 thousand)
- Earnings per share (diluted) EUR 0.53 (0.56) - decrease
4.0 percent
July-September Q3/2011
- Net sales EUR 24 185 thousand (EUR 23 202 thousand) -
growth 4.2 percent
- Operating profit EUR 3 038 thousand (EUR 3 408 thousand) -
decrease 10.8 percent
- Operating profit 12.6 percent of net sales (14.7%)
- Growth of Automation Services (SaaS and e-invoicing) 32.0
percent
- The estimated revenue to be recognized for current
Automation Services agreements in production in the next twelve months is EUR
17.2 million, growth from previous quarter 7.2 percent
- Recurring revenue (including Maintenance and Automation
Services) 53.5% (48.4%) of net sales
- Earnings per share (diluted) EUR 0.18 (0.23) - decrease
22.7 percent
Basware expects its net sales for 2011 to grow 5-9 percent from the previous
year. Operating profit (EBIT) for 2011 is expected to be 11.5-14.5 percent of
net sales.
The interim report is unaudited.
GROUP KEY FIGURES
7-9/ 7-9/ Change, 1-9/ 1-9/ Change, 1-12/
EUR thousand 2011 2010 % 2011 2010 % 2010
--------------------------------------------------------------------------------
Net sales 24 185 23 202 4.2 77 523 72 946 6.3 103 094
EBITDA 4 308 4 702 -8.4 12 613 12 389 1.8 18 604
Operating profit before
IFRS3 amortization 3 542 3 956 -10.5 10 333 10 214 1.2 15 691
Operating profit 3 038 3 408 -10.8 8 826 8 550 3.2 13 487
% of net sales 12.6% 14.7 % 11.4% 11.7 % 13.1%
Profit before tax 3 024 3 391 -10.8 8 858 8 486 4.4 13 325
Profit for the period 2 301 2 694 -14.6 6 731 6 418 4.9 10 331
Return on equity, % 9.7% 17.6% 11.0% 14.4 % 16.7%
Return on investment, % 13.0% 20.4% 14.5% 17.4 % 20.1%
Liquid assets *) 44 988 13 719 227.9 44 988 13 719 227.9 13 822
Gearing, % -45.9% -16,2% -45.9% -16.2 % -15.3%
Equity ratio, % 79.7% 71.6% 79.7% 71.6 % 73.3%
Earnings per share, EUR 0.18 0.23 -22.9 0.53 0.56 -4.6 0.90
Earnings per share
(diluted), EUR 0.18 0.23 -22.7 0.53 0.56 -4.0 0.89
Equity per share, EUR 7.46 5.34 -39.9 7.46 5.34 39.9 5.78
*) Includes cash, cash equivalents and financial assets at fair value through
profit or loss
REPORTING
Basware's reporting segment is based upon geography as follows: Finland,
Scandinavia, Europe and Other. The Finland segment includes the Finnish,
Russian, and Asia-Pacific (excluding Australia) business operations and
corporate services. The Other segment includes North America and Australia.
In addition, the company reports revenue from products and services as follows:
License Sales, Professional Services, Maintenance and Automation Services.
License Sales consist of the Purchase to Pay (P2P) product suite and financial
management and payment automation solutions that are only marketed in Finland.
Automation Services include paper invoice scanning services, exchange of
purchase catalogues and purchase messages, e-invoicing, activation service, and
Software as a Service (SaaS) services.
The company also reports an estimate of revenue to be recognized for current
Automation Services agreements in the next twelve months. Automation Services
agreements are typically in force for a fixed period of several years or until
further notice.
Basware's CEO Ilkka Sihvo comments in conjunction with the Interim Report:"The third-quarter market conditions were challenging, but our net sales
increased nevertheless, while our profitability was at a moderately good level.
Third-quarter net sales increased by 4.2 percent and operating profit was 12.6
percent. The estimated revenue to be recognized for current Automation Services
agreements in production in the next twelve months increased by a solid 7.2
percent on the previous quarter. The share of recurring revenue (Maintenance and
Automation Services) also increased strongly, rising to 53.5 percent of net
sales.
During the period under review, the company's net sales increased by 6.3
percent. The company's license sales decreased, which was mainly due to a
decrease in the sales of payment solutions related to SEPA updates and third-
party scanning software, which is compensated for by the stable growth of
Software as a Service (SaaS) sales. During the period, recurring revenue
accounted for 49.7 percent of net sales, which was due to an increase in
maintenance revenue and transaction and SaaS net sales. Start-up fees for
services and transaction revenue increased by 64.4 percent during the period.
The increase in the share of recurring revenue improves predictability in the
long term.
The global economic situation and the markets have rapidly become increasingly
unstable, but we believe that the company has the prerequisites for meeting the
growth and profitability objectives for the remainder of the year. Typically,
the fourth quarter is the company's best in terms of net sales and operating
profit."
Market outlook and operating environment
Market forecasts updated between September 2010 and 2011 expect software
purchases to increase by 9.0 percent globally and 6.6 percent in the U.S. in
2011. According to the previous estimate, the software market was expected to
increase by 8.6 percent in the U.S. The entire IT services market is expected to
grow by 7.3 percent globally and by 7.4 percent in the U.S. in 2011. Basware's
view is that the market estimates for 2011 have been too optimistic.
According to research companies, the software market is estimated to grow at a
rate of 7.0 percent in 2012 (previous estimate 8.8 percent), IT services by 6.0
percent (previous estimate 7.0 percent) and the overall market by 5.5 percent
(previous estimate 8.3 percent) globally. In 2012, the North American software
market is estimated to increase by 8.0 percent (previous estimate 10.0 percent),
IT services by 6.0 percent (previous estimate 7.5 percent) and the overall IT
market by 6.4 percent (previous estimate 8.9 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 software still offer a competitive edge, thanks to new added value
products and the integrated offering consisting of services and products. The
next generation of solutions will improve the company's competitiveness in the
long term. 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 Connectivity 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, which creates a
solid foundation for the future growth of Basware Automation Services.
In order to consolidate international growth further, Basware is increasing the
focus on acquisitions in its strategy and organization. The company has been
active in mergers and acquisitions and has strengthened the activity further by
establishing a new executive team-level M&A function.
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, October 13, 2011
BASWARE CORPORATION
Board of Directors
For more information, please contact
CEO Ilkka Sihvo, Basware Corp.,
Tel. +358 40 501 8251
Analyst and Press Briefing
Basware arranges today, October 13, 2011 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 Ilkka Sihvo and CFO Mika Harjuaho
will comment on the events and financial performance of the quarter. Welcome. A
conference call for analysts who are not able to attend the briefing will take
place on October 13 at 3:30 p.m. EEST. Please register through IR@basware.com.
Distribution:
NASDAQ OMX Helsinki Ltd
Key media
www.basware.com
ENCLOSURE: Basware_interim_report_Q3_2011
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