2011-07-08 07:56:33 CEST
2011-07-08 07:57:16 CEST
REGULATED INFORMATION
BasWare - Quarterly report
BASWARE INTERIM REPORT JANUARY 1 - JUNE 30, 2011 (IFRS)
BASWARE INTERIM REPORT JANUARY 1 - JUNE 30, 2011 (IFRS)
Stock Exchange Release, July 8, 2011 at 09:00
SUMMARY
January-June H1/2011: Growth in transaction volumes and SaaS deals accelerate
Automation services
- Net sales EUR 53 338 thousand (EUR 49 743 thousand) -
growth 7.2 percent
- Operating profit EUR 5 788 thousand (EUR 5 143 thousand) -
growth 12.6 percent
- Operating profit 10.9 percent of net sales (10.3%)
- Growth of Automation Services (SaaS and e-invoicing) 43.4
percent
- Recurring revenue (including Maintenance and Automation
Services) 47.9% (43.5%) of net sales
- Cash flow from operating activities EUR 15 800 thousand
(EUR 12 423 thousand)
- Earnings per share (diluted) EUR 0.35 (0.32 ) - growth
9.5 percent
April-June Q2/2011
- Net sales EUR 27 280 thousand (EUR 26 612 thousand) -
growth 2.5 percent
- Operating profit EUR 2 832 thousand (EUR 3 006 thousand) -
decrease 5.8 percent
- Operating profit 10.4 percent of net sales (11.3%)
- Growth of Automation Services (SaaS and e-invoicing) 38.8
percent
The estimated revenue to be recognized for current Automation Services
agreements in production in the next twelve months is EUR 16.1 million, growth
from previous quarter 1.4 percent
- Recurring revenue (including Maintenance and Automation
Services) 47.6% (41.5%) of net sales
- Earnings per share (diluted) EUR 0.17 (0.19 ) - decrease
9.0 percent
Basware expects, as earlier estimated, its net sales for 2011 to grow over 10
percent from the previous year. Operating profit (EBIT) for 2011 is expected to
be over 13 percent of net sales
The interim report is unaudited.
GROUP KEY FIGURES
4-6/ 4-6/ Change, 1-6/ 1-6/ Change, 1-12/
EUR thousand 2011 2010 % 2011 2010 % 2010
--------------------------------------------------------------------------------
Net sales 27 280 26 612 2.5 53 338 49 743 7.2 103 094
EBITDA 4 111 4 315 -4.7 8 305 7 688 8.0 18 604
Operating profit before
IFRS3 amortization 3 333 3 566 -6.5 6 791 6 258 8.5 15 691
Operating profit 2 832 3 006 -5.8 5 788 5 143 12.6 13 487
% of net sales 10.4% 11.3% 10.9% 10.3% 13.1
Profit before tax 2 904 2 953 -1.7 5 834 5 095 14.5 13 325
Profit for the period 2 162 2 142 0.9 4 430 3 724 19.0 10 331
Return on equity, % 9.3% 14.7% 11.0% 12.8% 16.7
Return on investment, % 12.5% 18.9% 14.3% 16.0% 20.1
Liquid assets *) 47 661 18 554 156.9 47 661 18 554 156.9 13 822
Gearing, % -48.1% -21.8% -48.1% -21.8% -15.3
Equity ratio, % 75.1% 62.3% 75.1% 62.3% 73.3
Earnings per share, EUR 0.17 0.19 -9.7 0.35 0.33 8.7 0.90
Earnings per share
(diluted), EUR 0.17 0.19 -9.0 0.35 0.32 9.5 0.89
Equity per share, EUR 7.27 5.16 40.9 7.27 5.16 40.9 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, 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 transaction volume delivered by the Automation Services business and start-
up fees for services continued to develop favorably, increasing by 80.5 percent
during the second quarter. In addition, sales of SaaS services reached a record
high number, although this will have a positive impact on the development of
Automation Services net sales only in the future. On the whole, Automation
Services grew 38.8 percent during the second quarter.
During the second quarter, our net sales increased by 2.5 percent to EUR 27.3
million, and our operating profit decreased by 5.8 percent to EUR 2.8 million.
Automation Services, Professional Services, and Maintenance developed as
expected during the quarter. License sales fell short of the previous year, with
some of the deals transferred to the SaaS order book and updates of SEPA payment
software decreasing sharply.
The shift in the demand from license sales to Software as a Service (SaaS)
solutions has grown stronger during 2011. This will support the long-term growth
target of 50% in Automation Services. SaaS agreements typically span several
years, and they are reported as recurring revenue in Automation Services. The
cumulative net sales generated by SaaS solutions exceed the net sales of
conventional software sales, Maintenance and Professional Services typically as
early as the end of the second year after installation, and therefore are
positive in the long term.
The net sales for the first two quarters rose to EUR 53.3 million, up 7.2
percent. The operating profit for the first half of the year increased by 12.6
percent to EUR 5.8 million. During the first two quarters, recurring revenue
(including Maintenance and Automation Services) already accounted for 47.9
percent of the company's total net sales.
Basware's M&A function, strengthened as from the beginning of 2011, has actively
analyzed targets for acquisitions, especially in the European e-invoicing
market.
The company has the prerequisites for meeting its full-year growth and
profitability objectives. Basware software still offer a competitive edge,
thanks to the integrated offering consisting of new added value products,
services and products. Typically, the latter half of the year generates a higher
share of the company's net sales, while the costs for the second half of the
year are expected to grow only at a moderate rate from the current level."
Market outlook and operating environment
Market forecasts updated between September 2010 and June 2011 expect software
purchases to increase by 9.0 percent globally and 8.6 percent in the U.S. in
2011. 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.
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 the integrated
offering consisting of new added value products, 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 is now further strengthening the activity
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, July 8, 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, July 8, 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
July 8 at 2 p.m. EEST. Please register through IR@basware.com for appropriate
information.
Distribution:
NASDAQ OMX Helsinki Ltd
Key media
www.basware.com
ENCLOSURE: Basware_interim_report_Q2_2011
[HUG#1529473]
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