BasWare - Interim report (Q1 and Q3)

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

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

BASWARE INTERIM REPORT JANUARY 1 - MARCH 31, 2015 (IFRS)

SUMMARY

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.

GROUP KEY FIGURES


                              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


BUSINESS OPERATIONS

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 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
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.

Reporting

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 Commerce 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 Commerce 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 Commerce 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 Commerce 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 Commerce 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.

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 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

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#1910789]

Attachments:

Basware Q1/2015 Interim Report.pdf