2009-07-10 08:44:59 CEST
2009-07-10 08:45:41 CEST
REGULATED INFORMATION
BasWare - Interim report (Q1 and Q3)
Basware Interim Report January 1 - June 30, 2009 (IFRS)
BASWARE INTERIM REPORT JANUARY 1 - JUNE 30, 2009 (IFRS)
SUMMARY
January-June H1
- Net sales EUR 44 446 thousand (EUR 40 545 thousand) - growth
9.6 percent
- Operating profit EUR 3 738 thousand (EUR 2 177 thousand) -
growth 71.8 percent
- Operating profit 8.4 percent of net sales (5.4%)
- International operations accounted for 52.5 percent of net
sales (50.4%) - growth 14.2 percent
- Cash flows from operating activities were EUR 7995 thousand
(EUR 4 579 thousand).
- Earnings per share EUR 0.18 (EUR 0.11)
April-June Q2
- Net sales EUR 22 729 thousand (EUR 22 312 thousand) - growth
1.9 percent
- Operating profit EUR 2 146 thousand (EUR 2 431 thousand) -
decrease 11.7 %
- Operating profit 9.4 percent of net sales (10.9%)
- International operations accounted for 52.6 percent of net
sales (49.3%) - growth 8.6 percent
- Cash flows from operating activities were EUR -428 thousand
(EUR -2 306 thousand).
- Earnings per share EUR 0.12 (EUR 0.16)
Basware expects its net sales for 2009 to develop positively on the
level of 2008. Operating profit (EBIT) for 2009 is expected to be
from 10 to 15 percent of net sales.
The figures are unaudited.
GROUP KEY FIGURES
4-6/ 4-6/ Change, 1-6/ 1-6/ Change, 1-12/
EUR thousand 2009 2008 % 2009 2008 % 2008
Net sales 22 729 22 312 1.9% 44 446 40 545 9.6% 86 098
EBITDA 3 213 3 123 2.9% 5 809 3 540 64.1% 11 722
Operating profit
before
IFRS-3
amortization 2 559 2 627 -2.6% 4 592 2 569 78.7% 9 730
Operating profit 2 146 2 431 -11.7% 3 738 2 177 71.8% 8 679
% of net sales 9.4% 10.9% 8.4% 5.4% 10.1%
Profit before tax 2 122 2 428 -12.6% 3 607 2 178 65.6% 8 410
Profit for the
period 1 396 1 899 -26.5% 2 062 1 350 52.7% 6 585
Return on equity,
% 11.5% 16.6% 8.4% 5.7% 13.7%
Return on
investment, % 11.9% 20.9% 11.9% 8.9% 16.6%
Liquid assets* 9 516 5 771 64.9% 9 516 5 771 64.9% 8 777
Gearing, % 3.3% -7.8% 3.3% -7.8% 9.3%
Equity ratio, % 58.2% 67.2% 58.2% 67.2% 59.5%
Earnings per
share, EUR 0.12 0.16 -26.0% 0.18 0.11 55.6% 0.56
Earnings per share
(diluted), EUR 0.12 0.16 -26.0% 0.18 0.11 55.6% 0.56
Equity per share,
EUR 4.25 4.06 4.9% 4.25 4.06 4.9% 4.23
*) Includes cash, cash equivalents and financial assets at fair value
through profit or loss
Basware's business operations consist of product sales, maintenance,
consulting and Automation Services. The core of Basware's product
sales consists of the Basware Enterprise Purchase to Pay product
suite and the Basware Financial Management (FIMA) suite. The Group's
reported market areas are Finland, Scandinavia, Europe and North
America.
Basware's CEO Ilkka Sihvo's comments in connection with the
publishing of the Interim Report:"The company's results for the second quarter were at a good and
anticipated level under extremely challenging financial market
situation that has also seen prolonged sales cycles. Our six-month
operating profit has increased by 72% on the previous year, which is
a sufficient starting point also considering the achievement of the
target for the rest of the year.
During the first half of the year, the company's geographical
segments fared well considering the circumstances. All areas
continued their growth while also improving their profitability.
During the reporting period, the proportion of services grew solidly,
and Automation Services increased their share compared to product
sales. Sales of the Basware Connectivity Services, launched at the
beginning of the year, have seen excellent success. Supplier
Activation, e-invoicing and Scan and Capture agreements have been
sold successfully in Finland, Central Europe and North America among
others. Automation Services agreements typically span several years,
generating continuous income throughout the contract period.
Automation Services net sales increased superbly by 61% during the
first half of the year, by 73% during the second quarter and by 55%
compared to the previous quarter."
REPORTING
As of January 1, 2009, the Group has applied the following new and
revised standards: IFRS 8 Operating Segments and IAS 1 Presentation
of Financial Statements. IFRS 8 has an effect on the segment
information in the notes and IAS 1 has an effect on the presentation
of the income statement.
Basware's reporting segment is based upon geography as follows:
Finland, Scandinavia, Europe and North America.
In addition, the company reports revenue from products and services
as follows: Product sales, Consulting, Maintenance and Automation
Services. Automation Services include SaaS revenue and Connectivity
Services, which include digitalization of paper invoices and exchange
of e-invoices and purchase transactions.
The company also reports the backlog of Automation service agreements
not recognized as income. Automation Services agreements typically
span several years.
NET SALES
The geographical division of net sales by the location of assets:
Net sales 4-6/ 4-6/ 1-6/ 1-6/ Change, 1-12/
(EUR thousand) 2009 2008 Change, % 2009 2008 % 2008
Finland 12 406 13 091 -5.2 23 737 23 584 0.6 49 517
Scandinavia 6 278 4 628 35.6 11 595 8 827 31.4 18 805
Europe 4 318 4 469 -3.4 8 984 8 762 2.5 19 454
North America 1 128 1 446 -21.9 2 323 2 125 9.3 5 004
Sales between
segments -1 402 -1 322 -6.0 -2 193 -2 752 20.3 -6 682
Group total 22 729 22 312 1.9 44 446 40 545 9.6 86 098
The geographical division of net sales by the location of customers:
Net sales 4-6/ 4-6/ 1-6/ 1-6/ Change, 1-12/
(EUR thousand) 2009 2008 Change, % 2009 2008 % 2008
21
Finland 10 774 11 320 -4.8 098 20 100 5.0 41 514
10
Scandinavia 5 613 4 508 24.5 823 8 635 25.3 18 309
Europe 4 391 4 401 -0.2 9 073 8 749 3.7 19 191
Others 1 950 2 082 -6.3 3 453 3 061 12.8 7 083
44
Group total 22 729 22 312 1.9 446 40 545 9.6 86 098
Basware Group's net sales increased by 9.6 percent during the first
two quarters to EUR 44 446 thousand (EUR 40 545 thousand). Net sales
for the second quarter increased by 1.9 percent to EUR 22 729
thousand (EUR 22 312 thousand).
The company's product sales decreased by 15.1 percent during the
reporting period to 22.8 percent (29.5%) of net sales.
Maintenance revenue increased by 22.3 percent in the reporting period
and accounted for 32.5 percent (29.1%) of net sales. Consulting
revenue increased by 11.7 percent and accounted for 36.6 percent
(35.9%) of net sales.
During the period, Automation Services grew 62.1 percent and
accounted for 8.1 percent (5.5%) of net sales. The backlog of the
Automation Services business not recognized as income was EUR 13 116
thousand (EUR 11 241 thousand) at the end of the period. A total of
976 customers had been connected to the service at the end of the
reporting period.
In April-June, 24.1 percent (33.2%) of net sales consisted of own
product sales with product sales decreasing by 26.0 percent.
Automation Services sales accounted for 9.6 percent (5.6%) of net
sales in the second quarter, up 73.2 percent. Maintenance revenue
accounted for 32.1 percent (27.2%) of net sales during the second
quarter and grew by 20.3 percent. Consulting revenue represented 34.2
percent (34.0%) of net sales and grew by 2.5 percent.
Value added resellers provided a net share of 11.3 percent (16.1%) or
EUR 1 145 thousand (1 044 thousand) of product sales during the
reporting period and 10.5 percent (11.9%) or EUR 577 thousand in
April-June, accounting for 4.8 percent (8.0%) of the net sales from
international operations.
The international share of Basware's net sales was 52.5 percent
(50.4%) in the reporting period. International operations grew by
14.2 percent.
FINANCIAL PERFORMANCE
Basware's operating profit for the period increased by 71.8 percent
to EUR 3 738 thousand (EUR 2 177 thousand). Operating profit
represented 8.4 percent (5.4%) of net sales.
Operating profit decreased by 11.7 percent during the second quarter
to EUR 2 146 thousand (EUR 2 431 thousand). Operating profit
represented 9.4 percent of net sales.
The geographical division of operating profit by the location of
assets:
Operating profit 4-6/ 4-6/ Change, 1-6/ 1-6/ 1-12/
(EUR thousand) 2009 2008 % 2009 2008 Change, % 2008
Finland 1 295 1 926 -32.8 2 144 1 834 16.9 7 898
Scandinavia 1 249 489 155.2 1 915 810 136.5 1 017
Europe -32 -123 73.7 199 -401 149.6 -74
North America -102 185 -155.2 35 27 28.7 289
Operating profit
between segments -263 -47 -461.2 -555 -94 -492.2 -452
Group total 2 146 2 431 -11.7 3 738 2 177 71.8 8 679
The company's fixed costs were EUR 35 556 thousand (EUR 34 539
thousand) in the period, up 2.9 percent on the corresponding period
the previous year. Personnel costs made up 74.1 percent (70.6%) or
EUR 26 340 thousand (EUR 24 373 thousand) of the fixed costs. Fixedcosts for the second quarter amounted to EUR 17 957 thousand (EUR 17
865 thousand).
Research and development costs totaled EUR 7 530 thousand (EUR 8 133
thousand), of which EUR 892 thousand (EUR 1 342 thousand) or 11.8
percent (16.5%) were capitalized during the period. Amortization of
capitalized research and development costs totaled EUR 778 thousand
(EUR 569 thousand).
The company's finance income and finance expenses were EUR -132
thousand (EUR 1 thousand). Profit before tax was EUR 3 607 thousand
(EUR 2 178 thousand) and profit for the period was EUR 2 062 thousand
(EUR 1 350 thousand). Undiluted earnings per share were EUR 0.18 (EUR
0.11).
FINANCE AND INVESTMENTS
Basware Group's total assets on the balance sheet at the end of the
period were EUR 84 060 thousand (EUR 69 627 thousand). The company's
cash and liquid assets were EUR 9 516 thousand (EUR 5 771 thousand),
of which cash and cash equivalents were EUR 9 484 thousand (EUR 5 739
thousand) and financial assets at fair value through profit or loss
were EUR 32 thousand (EUR 32 thousand).
Equity ratio was 58.2 percent (67.2%) and gearing was 3.3 percent
(-7.8%). The company's interest-bearing liabilities totaled EUR 11
115 thousand (EUR 2 130 thousand), of which current liabilities
accounted for EUR 5 563 thousand (EUR 2 111 thousand). Return on
investment was 11.9 percent (8.9%) and return on equity 8.4 percent
(5.7%).
Cash flows from operating activities were EUR 7 995 thousand (EUR 4
579 thousand). Cash flows from investments were EUR -2 734 thousand
(EUR -1 838 thousand).
Basware AS purchased the Norwegian invoice automation solution
business of Itella Information AS. The purchase price was NOK 6.38
million (approximately EUR 0.72 million) and it was paid in cash on
the day the acquisition was completed, April 1, 2009. In addition,
Basware may pay an additional purchase price of a maximum of NOK 7.0
million (EUR 0.77 million) in February 2010 at the latest, determined
on the basis of the volume of the purchased operations' service sales
in 2009. EUR 1 039 thousand associated with customer relationships
has been allocated to intangible assets, taking deferred tax
liabilities into consideration. The purchase price includes EUR 436
thousand of goodwill. The allocation of the acquisition purchase
price is preliminary.
The company's capital expenditure, resulting from regular additional
and replacement investments required for growth, was EUR 481 thousand
(EUR 368 thousand) in the period. Gross investments which include, in
addition to those mentioned above, the capitalized research and
development costs and acquisitions totaled EUR 2 598 thousand (EUR 1
823 thousand).
Amortization of intangible assets totaled EUR 1 073 thousand (EUR 921
thousand). There are no indications of impairments of assets.
RESEARCH, DEVELOPMENT AND NEW PRODUCTS
Research and development costs were EUR 7 530 thousand (EUR 8 133
thousand) in the period, corresponding to 16.9 percent (20.1%) of net
sales. Research and development costs decreased by 7.4 percent
compared with the same period last year. Of the research and
development costs, EUR 892 thousand (EUR 1 342 thousand) or 11.8
percent has been capitalized. Amortization of capitalized research
and development costs totaled EUR 778 thousand (EUR 569 thousand).
A total of 187 (161) people worked in Products at the end of June
2009. The Products unit is expanding in India, where there are
currently 48 employees.
At the beginning of 2009, Basware launched the Basware Connectivity
solution, which aims at speeding up the migration to electronic
exchange of documents. There has been obvious demand for the solution
in the market, and it has been sold successfully in Europe as well as
North America. Basware is now able to exchange all the documentation
related to the Purchase to Pay process in a single solution.
PERSONNEL
Basware employed 738 (672) people on average during the first two
quarters and 742 (686) at the end of the period. The number of
personnel increased by 56 persons and by 8.2 percent compared with
the same period the previous year. The Contempus acquisition during
the last quarter of 2008 increased the number of personnel by 41
people.
The share of personnel working in foreign units has increased
compared with the previous year. At the end of the period, 46.1
percent (41.8%) of Basware personnel worked outside of Finland and
53.9 percent (58.2%) in Finland. 17.5 percent of the personnel work
in sales and marketing, 48.5 percent in consulting and services, 25.2
percent in Products, and 8.8 percent in administration.
The average age of employees is 36.1 (35.7) years. Of the employees,
35.6 percent have a Master's degree and 42.7 percent have a
Bachelor's degree. Women account for 28.4 percent of employees, men
for 71.6 percent.
Geographical distribution of personnel:
Personnel (employed, on 4-6/ 4-6/ 1-6/ 1-6/ Change, 1-12/
average) 2009 2008 Change, % 2009 2008 % 2008
Finland 458 421 8.8 449 418 7.3 421
Scandinavia 137 101 35.3 138 100 37.3 112
Europe 119 130 -8.5 121 129 -6.2 129
North America 31 26 19.5 31 25 24.3 26
Group total 744 678 9.8 738 672 9.8 689
BUSINESS OPERATIONS
Finland
The Finland segment includes the business operations in Finland,
Russia, Asia and Australia and the head office functions. Net sales
for the second quarter idecreased by 5.2 percent to EUR 12 406
thousand (EUR 13 091 thousand).
Net sales of the Finnish and Russian business operations increased by
4.1 percent during the second quarter to EUR 11 333 thousand (EUR 10
887 thousand). All the Basware Enterprise Purchase to Pay and
Financial Management products are sold in the region.
Basware signed a partnership agreement with the Russian auditing and
consulting company RSM Top Audit and the auditing and consulting
company Baker Tilly Russaudit. As a result of the agreements, RSM Top
Audit and Baker Tilly Russaudit will resell Basware's IFRS
consolidation solutions in Russia.
The company will deliver an extensive Basware Connectivity solution
to a Finnish corporate group. The solution will be adopted throughout
the group in approximately 20 countries. The value of the transaction
totals approximately EUR 900 000.
New customers included DNA, Metso, Empower Oy, Lindell Oy, RoboMec
Oy, Voglia, HRAK Vocational Adult Education Centre, Aller Julkaisut
and Globetel.
There are 5 resellers in the Asia Pacific region.
There are currently 10 resellers in all in the area and the number of
personnel averaged 458 (421) during the second quarter.
Scandinavia
Basware's Nordic organization consists of a centrally directed
Scandinavian (Sweden, Denmark and Norway) unit. All the Basware
Enterprise Purchase to Pay and Financial Management products are sold
in the Nordic countries, apart from the payment solutions.
The Scandinavian business operations developed positively as a whole
during the second quarter, and net sales of the area increased by
35.6 percent to EUR 6 278 thousand (EUR 5 317 thousand). The
profitability of the operations has improved by 155.2 percent and
operating profit was EUR 1 249 thousand (EUR 489 thousand).
New customers include Danish Agency for Governmental Management,
Danish Technical University, Alliance Boots, Heimdal Gruppen (HENT
AS), LINK Singatur AS, Nordnet AB, Permobil AB, Landscape Services
Sweden AB and LRF Konsult AB.
Business operations are mainly handled by the own organization and
there were 137 (101) employees on average in the area.
Europe
Basware's European business operations consist of the units in
Germany, France, the Netherlands, United Kingdom and Southern
Europe. Additionally, the reseller network covers the eastern part
of Central Europe. All Enterprise Purchase to Pay products and
services are sold in Europe, apart from the payment and travel &
expense management solutions.
Net sales in the Europe segment decreased by 3.4 percent in the
second quarter and totaled EUR 4 318 thousand (EUR 4 469 thousand).
The profitability of the operations has improved by 73.7 percent and
operating profit was EUR -32 thousand (EUR -347 thousand).
At the end of 2008, Basware UK initiated a rationalization program
and reorganization of operations, facilitating profitable growth. The
program has resulted in significant cost-savings and the utilization
rate of consulting has increased, which improves the unit's
profitability.
New customers included SITA NEWS, Aggreko Plc, Malvern Instruments,
Thon Hotels, Gibo Groep, Quadraam, Aviva Investors Luxemburg, Michael
Page, PQ Europe and Nouvelles Frontières.
There are 35 resellers in Europe, and Basware personnel averaged 119
(130).
North America
Basware's North American unit sells the Enterprise Purchase to Pay
solutions in the United States and Canada.
Net sales of the area decreased by 21.9 percent in the second quarter
to EUR 1 128 thousand (EUR 1 446 thousand). The profitability of the
operations has decreased by 155.2 percent and operating profit was
EUR -102 thousand (EUR 185 thousand).
Basware will deliver the Basware Enterprise Purchase to Pay solution
and Scan and Capture services to HCR ManorCare, Inc. in North
America. The value of the agreement is over EUR one million including
product sales, consulting and Scan and Capture services. The sales
and consulting revenue will be recognized mainly during the last
quarters of 2009 and Connectivity services over the next three years.
At the end of the period, there were 9 resellers in North America. On
average, there were 31 (26) employees in the area.
OTHER EVENTS OF THE PERIOD
Basware AS purchased the Norwegian invoice automation solution
business of Itella Information AS. The purchase price was NOK 6.38
million (approximately EUR 0.72 million) and it was paid in cash on
the day the acquisition was completed, April 1, 2009. In addition,
Basware may pay an additional purchase price of a maximum of NOK 7.0
million (EUR 0.77 million) in February 2010 at the latest, determined
on the basis of the volume of the purchased operations' service sales
in 2009. The acquisition is expected to increase Basware's Automation
Services revenues for 2009 by approximately EUR 0.9 million instead
of the previous estimate amounting to EUR 1.2 million. The decrease
is based on the volume of service sales being below previous
estimates.
Basware Einvoices Oy merged into Basware Corporation on June 30,
2009, in accordance with the previously registered merger plan. The
business operations of Basware Einvoices Oy will resume in Basware
Corporation as a part of the Basware Automation Services business.
The merger did not result in changes to Basware Corporation's
organization structure.
Contempus AS in Norway merged into Basware AS on June 30, 2009, in
accordance with the previously registered merger plan. The business
operations of Contempus AS will resume in Basware AS as a part of its
normal business. The merger did not result in changes to Basware AS'
organization structure.
Strategy
Basware has updated its strategy for the years 2009-2012. The long
term net sales growth objective remains in the range of 20-40 percent
with operating profit margin of 10-20 percent of net sales.
Basware will expand the EPP (Enterprise Purchase to Pay) Automation
Services concept during 2009. The concept targets Basware software
license customers to achieve an even higher degree of automation. The
Software as a Service (SaaS) model is predicted to see a remarkably
higher growth than the software license market.
The company's vision, mission and financial objectives for the years
2007-2010 announced on September 12, 2006, remain unchanged.
SHARE AND SHAREHOLDERS
Basware Corporation's share capital totaled EUR 3 440 437,20 at the
end of the period and the number of shares was 11 468 124.
A separate stock exchange release has been issued on the Board
authorizations and other resolutions of the Annual General Meeting of
Shareholders on February 12, 2009.
Share price and trade
During the reporting period, the highest price of the share was EUR
11.48 (EUR 10.45), the lowest was EUR 6.60 (EUR 6.14) and the closing
price was EUR 11.40 (EUR 7.00). The average price of the share was
EUR 8.57 (EUR 8.03) during the period.
A total of 986 643 (1 039 454) shares were traded during the period
which is the equivalent of 8.7 percent (9.1%) of the average number
of shares. Market capitalization with the period's closing price on
June 30, 2009 was EUR 129 707 194 (EUR 80 276 868).
Shareholders
Basware had 16 770 (17 301) shareholders on June 30 including
nominee-registered holdings (7). Nominee-registered holdings
accounted for 8.4 (11.4) percent of the total number of shares.
Basware Corporation's share repurchases program that was resolved by
the Board of Directors on October 14, 2008 ended on March 31, 2009.
The program was based on the authorization granted by the Annual
General Meeting on February 14, 2008. The purchases started on
October 23, 2008 and ended according to the terms of the share
repurchase program on March 31, 2009.
On March 31, 2009 90.300 of shares were acquired and the company now
holds a total number of 90.300 shares representing approximately 0.79
% of all Basware shares. The average price of the shares acquired
during the repurchases program was 6.9475 euro.
GOVERNANCE
The Annual General Meeting of Shareholders on February 12, 2009,
confirmed the number of Board members as five. The Annual General
Meeting resolved to agree on the proposal and elected Matti Copeland,
Sakari Perttunen, Pentti Heikkinen, Ilkka Toivola and Hannu
Vaajoensuu members of the Board of Directors. In its first meeting
held after the Annual General Meeting, the Board of Directors elected
Hannu Vaajoensuu as chairman and Sakari Perttunen as vice chairman of
the Board.
The Annual General Meeting further resolved to elect Ernst & Young
Oy, Authorized Public Accountants as the auditor, with APA Heikki
Ilkka in charge and APA Terhi Mäkinen as the deputy auditor.
The Board was authorized to resolve on share issue and share
repurchase.
A separate stock exchange release has been issued on the Board
authorizations and other resolutions of the Annual General Meeting of
Shareholders on February 12, 2009.
SHORT-TERM RISKS AND UNCERTAINTY FACTORS
In accordance with Basware's risk management policy, risks are
divided into six categories: risks related to business operations,
products, personnel as well as legal, financial and data security
risks. Basware takes risks that are a natural part of its strategy
and objectives. These risks are managed and decreased in various
ways. Short-term risks are considered to be risks in the current
reporting year.
The global crisis of the finance market, general economic uncertainty
and depression decrease companies' willingness to invest, which might
have an unfavorable impact on the development of the company's net
sales and profitability. In previous economic downturns, the demand
for the company's products and services has remained more positive
than the general economic market as a whole as the company's software
solutions generate cost savings.
The rapidly weakened global market situation does however cause
uncertainty. The depression has generally increased companies'
delinquency entries and the number of bankruptcies. Typically,
companies may also prolong the times of payments in order to free up
working capital. Basware has intensified its management of sales
receivables, and business management regularly monitors the payment
of sales receivables as part of the management of customer accounts.
Goodwill has been tested during the last quarter of 2008. In
accordance with the testing for impairment of assets, no impairment
of assets has occurred. At the end of 2008, Basware UK implemented a
rationalization program and reorganization of operations. The program
has resulted in significant cost-savings and the utilization rate of
consulting has increased, which improves the unit's profitability. If
the unit's profitability does not improved as planned in the medium
term despite the streamlining program, it is likely that the goodwill
allocated to the unit will need to be impaired.
In other respects, no significant changes have taken place in
Basware's short-term risks and uncertainties during the financial
period.
EVENTS AFTER THE REPORTING PERIOD
Basware acquired the entire share capital of TAG Services Pty Ltd in
Australia on July 1, 2009. The acquisition price will be based on the
company's net sales for its fiscal year ended June 30, 2009 and the
company's net asset value on June 30, 2009, and is estimated to
amount to AUD 2.25 Million (EUR 1.30 Million, using an exchange rate
of EUR/AUD 1.7359 on June 30, 2009). The company's net asset value at
June 30, 2009, is estimated to be AUD 0.53 million (EUR 0.31
Million). The acquisition price will be paid in cash in two parts in
July and August 2009. In addition the deal includes an additional
acquisition price element that is based on the growth of the
company's net sales of the period from July 1, 2009 to June 30, 2010
and will be paid in August 2010 at the latest.
TAG Services, a Basware's partner since 2001, offers Basware
Enterprise Purchase to Pay solutions to its customers. As a result of
the acquisition, Basware will obtain a strong foothold in the
Australian market, be able to launch the Basware Connectivity
Services solution also in this market area and offer 24/7 customer
support to its global customers.
TAG Services' net sales of the fiscal year ended June 30, 2009 was
AUD 2.26 million (EUR 1.29 Million) excluding the resale share to be
paid to Basware and the operating profit was positive. The above
mentioned figures are unaudited. Basware employs 13 persons in
Australia.
FUTURE OUTLOOK
Market forecasts published in March 2009 expected the entire IT
market to decrease by 3.7 percent in 2009, while the corporate
software market was forecast to increase by 5.4 percent on average
annually until 2013. According to forecasts published in June 2009
the software markets are estimated to decrease by 8.2 percent and
entire IT markets to decrease by 10.6 percent globally in 2009.
According to analysts' estimates published in June 2009, both the
entire IT market and service market are expected to increase by 4.0
percent in 2010, while the software market is forecast to increase by
5.6 percent globally.
Western Europe and the United States combined account for
approximately three quarters of the enterprise software market. In
these markets, electronic invoice processing and procurement
solutions are still in early maturity. The procurement management and
electronic invoice processing markets are heterogeneous in terms of
the competitive situation. Growth could attract more competitors to
the market. The industry is consolidating, and this development could
go on in the future as well. Globally speaking, Basware is a
medium-sized software company in terms of net sales as well as number
of personnel.
Basware's direct competitors are primarily locally operating and
often smaller companies. In North America in particular, the company
has also larger competitors, especially in the field of procurement
management. Developers of document management, scanning and recycling
systems compete with Basware, particularly with regard to purchase
invoice management solutions. Competing solutions also include
customized solutions integrated into ERP (Enterprise Resource
Planning) systems.
The software still offers a competitive edge, thanks to the
integrated offering consisting of new added value products and the
products. Automation Services, a new concept in the portfolio, will
have a positive impact on the competitiveness.
Automation Services increase the predictability and transparency of a
company's net sales and profitability. In 2008, revenue from
continuous services (including maintenance) accounted for a third of
the company's total revenue. Basware predicts that Automation
Services revenue will increase significantly in the strategy period.
The company's international growth is based on efforts of its own
sales and marketing activity as well as the reseller channel.
Development of the indirect distribution channel continues in Europe,
Russia and Asia. In North America, the focus will be on developing
the company's own sales channel for the time being. In Scandinavia,
the focus is on profitability, and moderate growth is supported by
the company's expanded product portfolio and the development of the
service business. In Finland, the focus is on profitability, and
moderate growth will primarily be achieved from the fields of
procurement management and services.
Basware has complemented its organic growth with acquisitions. The
company will continue to review possible acquisition targets during
2009. The aim of the acquisitions is to expand the company's
distribution channel and product portfolio in international markets.
The Group increased its number of personnel mainly in India during
the first two quarters. Research and development costs are not
expected to substantially increase from the level of 2008.
Growth-related investments will start earliest during the second half
of the year if net sales and profitability are at the expected level.
The cost savings resulting from the synergy benefits of the Contempus
integration will materialize starting from the beginning of 2009 and
they will be approximately EUR 3 million by the end of 2009.
Approximately EUR 1 million will be amortized of the Contempus
acquisition cost allocated to customer relationships and products in
accordance with a straight-line depreciation plan of 4.25 years.
Basware expects its net sales for 2009 to develop positively on the
level of 2008. Operating profit (EBIT) for 2009 is expected to be
from 10 to 15 percent of net sales.
Espoo, Finland, July 10, 2009
BASWARE CORPORATION
Board of Directors
For more information, please contact
CEO Ilkka Sihvo, Basware Corp.,
Tel. +358 9 8791 7251 or +358 40 501 8251
Analyst and Press Briefing
Basware arranges today, July 10, 2009 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 the events and
financial performance of the quarter. Welcome.
Distribution:
NASDAQ OMX Helsinki Ltd
Key media
www.basware.com
The Interim Report has been prepared in accordance with the
International Financial Reporting Standards (IFRS). As of January 1,
2009, the Group has applied the following new and revised standards:
IFRS 8 Operating Segments and IAS 1 Presentation of Financial
Statements. Otherwise the same Accounting Principles have been
applied as in the 2008 Financial Statements. Key indicator
calculations remain unchanged and have been presented in the 2008
Financial Statements.
GROUP INCOME STATEMENT
1.4.- 1.4.- 1.1.- 1.1.- 1.1.-
30.6. 30.6. Change, 30.6. 30.6. Change, 31.12.
EUR thousand 2009 2008 % 2009 2008 % 2008
NET SALES 22 729 22 312 1.9 44 446 40 545 9.6 86 098
Other operating
income 52 62 -16.6 81 131 -37.8 250
Materials and
services -1 611 -1 385 -16.3 -3 162 -2 596 21.8 -4 726
Employee benefit
-12 -26 -24
expenses -13 444 608 6.6 340 373 8.1 -50 399
Depreciation and
amortization -1 067 -693 54.0 -2 071 -1 364 51.8 -3 043
Other operating -10
expenses -4 513 -5 257 -14.1 -9216 166 -9.3 -19 500
Operating profit 2 146 2 431 -11.7 3 738 2 177 71.8 8 679
Finance income 30 18 71.0 155 57 170.4 734
Finance expenses -54 -21 159.9 -286 -56 413.2 -1 003
Profit before
tax 2 122 2 428 -12.6 3 607 2 178 65.6 8 410
Income tax
expense -727 -528 37.6 -1 545 -828 86.5 -1 825
PROFIT FOR THE
PERIOD 1 396 1 899 -26.5 2 062 1 350 52.7 6 585
Other
comprehensive
income
Exchange
differences
on translating
foreign
operations 594 -26 -2384.6 1 397 -210 -765.2 -4 383
Income tax
relating
to components of
other
comprehensive
income 8 0 -44 0 0
Other
comprehensive
income, net of
tax 602 -26 -2415.4 1 353 -210 -744.3 -4 383
TOTAL
COMPREHENSIVE
INCOME 1 998 1 873 6.6 3 415 1 140 199.6 2 201
Profit
attributable
to:
Owners of the
parent 1 370 1 865 -26.5 2 012 1 302 54.5 6 467
Minority
interest 26 35 -25.3 50 48 5.2 118
1 396 1 899 -26.5 2 062 1 350 52.7 6 585
Total
comprehensive
income
attributable to:
Owners of the
parent 1 973 1 839 7.3 3 365 1 092 208.2 2 084
Minority
interest 26 35 25.3 50 48 5.2 118
1 998 1 873 6.6 3 415 1 140 199.6 2 201
Earnings per
share
(undiluted), EUR 0.12 0.16 -26.0 0.18 0.11 55.6 0.36
Earnings per
share
(diluted), EUR 0.12 0.16 -26.0 0.18 0.11 55.6 0.36
GROUP BALANCE SHEET
EUR thousand 30.6.2009 30.6.2008 Change, % 31.12.2008
ASSETS
NON-CURRENT ASSETS
Intangible assets 17 678 12 589 40.4 17 022
Goodwill 30 389 25 726 18.4 29 212
Tangible assets 933 1 081 -13.7 991
Available-for-sale
investments 38 38 38
Long-term trade and other
receivables 208 12 1 614.1 536
Deferred tax assets 1 973 2 300 -14.2 2 208
Non-current assets 51 220 41 746 22.7 50 006
CURRENT ASSETS
Inventories 45 37 23.5 48
Trade and other receivables 20 285 20 654 -1.8 20 737
Income tax receivables 2 993 1 420 110.8 2 341
Financial assets at fair
value through profit or loss 32 32 3.1 31
Cash and cash equivalents 9 484 5 739 65.2 8 745
Current assets 32 840 27 881 17.8 31 902
TOTAL ASSETS 84 060 69 627 20.7 81 909
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital 3 440 3 440 3 440
Share premium account 69 69 69
Own shares -629 -271
Fair value reserve and other
reserves 33 598 33 598 33 598
Translation differences -3 818 229 -1 769.2 -3 991
Retained earnings 16 088 9 227 74.4 15 648
Minority interest 189 196 -3.5 224
Shareholders' equity 48 937 46 759 4.7 48 717
NON-CURRENT LIABILITIES
Deferred tax liability 2 823 1 618 74.5 2 307
Interest-bearing liabilities 5 552 14 29 368.1 7 729
Non-interest-bearing
liabilities 21
Non-current liabilities 8 396 1 632 412.9 10 036
CURRENT LIABILITIES
Interest-bearing liabilities 5 563 2 111 163.5 5 555
Trade payables and other
liabilities 20 664 18 870 9.5 16 683
Tax liability from income
tax 500 255 96.6 918
Current liabilities 26 727 21 236 25.9 23 156
TOTAL EQUITY AND LIABILITIES 84 060 69 627 20.7 81 909
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Inv.
non-
Share- Share restr.
holders premium Own equity Other Transl Retained Minority
EUR thousand equity account shares res. res. diff. earnings interest Total
SHAREHOLDERS' 47
EQUITY 1.1.08 3 440 33 127 0 0 540 392 9 765 148 413
Comprehensive
income -163 1 255 48 1 14
Dividend -1
distribution -1 720 720
Granted
warrants 70 70
Changes in
reporting
period -143 -143
SHAREHOLDERS'
EQUITY 46
30.6.08 3 440 33 127 0 0 540 229 9 227 196 759
Inv.
non-
Share- Share restr.
holders premium Own equity Other Transl Retained Minority
EUR thousand equity account shares res. res. diff. earnings interest Total
SHAREHOLDERS' 48
EQUITY 1.1.09 3 440 69 -271 33 058 540 -3 991 15 648 224 717
Comprehensive
income 173 3 192 50 3 415
Dividend -2
distribution -2 663 663
Granted
warrants 378 378
Repurchase of
own
shares -358 -358
Changes in
reporting
period -467 -86 -553
SHAREHOLDERS'
EQUITY 48
30.6.09 3 440 69 -629 33 058 540 -3 818 16 088 189 937
GROUP CASH FLOW STATEMENT
1.1.- 1.1.-
EUR thousand 1.1.-30.6.2009 30.6.2008 12.2008
Net cash from operating activities
Profit for the period 2 062 1 350 6 585
Adjustments for profit 3 748 2 191 5 243
Working capital changes 4 392 2 770 125
Interest paid -99 -51 -291
Interest received 29 56 154
Other financial items in operating
activities -16 -6 -38
Income taxes paid -2 122 -1 730 -3 447
Net cash from operating activities 7 995 4 579 8 331
Cash flows from investing activities
Purchase of tangible and intangible
assets -2 010 -1 842 -3 631
Proceeds from sale of tangible and
intangible assets 47
Acquired subsidiaries -724 -1 -8 728
Repayment of loan receivables 5 9
Net cash used in investing
activities -2 734 -1 838 -12 303
Cash flows from financing activities
Proceeds from short-term loans 2 000 2 000
Repayments of short-term loans -4 000 -4 000
Proceeds from long-term borrowings 10 650
Repayments of long-term borrowings -1 783 -200 -300
Share repurchase -358 -271
Repayments of financial lease
liabilities -4 -1
Dividends paid -2 623 -1 720 -1 720
Net cash used in financing
activities -4 763 -3 925 6 358
Net change in cash and cash
equivalents according to cash flow
statement 498 -1 184 2 386
Cash and cash equivalents at
beginning of period 8 777 7 041 7 041
Effects of exchange rate changes on
cash and cash equivalents 242 -86 -650
Cash and cash equivalents at end of
period 9 516 5 771 8 777
GROUP QUARTERLY INCOME STATEMENT
1-3/ 1-3/ 4-6/ 4-6/ 7-9/ 10-12/
EUR thousand 2009 2008 2009 2008 2008 2008
NET SALES 21 717 18 233 22 729 22 312 19 259 26 294
Other operating
income 30 69 52 62 58 62
Materials and
services -1 552 -1 211 -1 611 -1 385 -797 -1 333
Employee benefit
expenses -12 896 -11 765 -13 444 -12 608 -10 933 -15 093
Depreciation and
amortization -1 004 -671 -1 067 -693 -690 -990
Other operating
expenses -4 703 -4 910 -4 513 -5 257 -4 516 -4 818
Operating profit 1 592 -254 2 146 2 431 2 381 4 122
% 7.3% -1.4% 9.4% 10.9% 12.4% -15.7%
Finance income 124 39 30 18 39 637
Finance expenses 232 -35 -54 -21 -50 -897
Profit before tax 1 484 -250 2 122 2 428 2 370 3 862
% 6.8% -1.4% 9.3% 10.9% 12.3% 14.7%
Income tax expense -818 -300 -727 -528 -430 -567
PROFIT FOR THE PERIOD 666 -550 1 396 1 899 1 941 3 294
% 3.15 -3.0% 6.1% 8.5% 10.1% 12.5%
Changes of ownership
Basware increased its shareholding in Basware Einvoices Oy to 100
percent on January 30, 2009, by acquiring 12.55% of the company's
shares and control from the company's management. The purchase price
paid on the date of the transaction was approximately EUR 720
thousand and the additional purchase price to be paid based on the
business volume for 2009 in February 2010 at the latest is expected
to be approximately EUR 250 thousand. Basware Einvoices Oy will be
merged with the parent company during the financial period underway.
A situation such as the one presented above is currently not
regulated by IFRS, so the company's management has compiled an
accounting principle for the case in compliance with IAS 8. The
change of ownership is recognized under shareholders' equity, and it
will not have any effect on profit or goodwill.
COMMITMENTS AND CONTINGENT LIABILITIES
EUR thousand 30.6.2009 30.6.2008 31.12.2008
GUARANTEES ON BEHALF OF SUBSIDIARIES
1 098 1 075 1 096
Guarantees total 1 098 1 075 1 096
OWN GUARANTEES
Lease liabilities
Current lease liabilities 795 713 868
Lease liabilities maturing in 1-5
years 820 754 838
Total 1 615 1 468 1 706
Other rental liabilities
Current rental liabilities 2 477 2 000 2 385
Rental liabilities maturing in 1-5
years 4 299 4 471 4 620
Rental liabilities maturing later 1 227 25 1 196
Total 8 003 6 496 8 201
Other own contingent liabilities,
total 9 618 7 964 9 907
SEGMENT REPORTING
Net sales by market area
Net sales 4-6/ 4-6/ Change, 1-6/ 1-6/ Change, 1-12/
(EUR thousand) 2009 2008 % 2009 2008 % 2008
Finland 12 406 13 091 -5.2 23 737 23 584 0.6 49 517
Scandinavia 6 278 4 628 35.6 11 595 8 827 31.4 18 805
Europe 4 318 4 469 -3.4 8 984 8 762 2.5 19 454
North America 1 128 1 446 -21.9 2 323 2 125 9.3 5 004
Sales between
segments -1 402 -1 322 -6.0 -2 193 -2 752 20.3 -6 682
Group total 22 729 22 312 1.9 44 446 40 545 9.6 86 098
Operating profit 4-6/ 4-6/ Change, 1-6/ 1-6/ Change, 1-12/
(EUR thousand) 2009 2008 % 2009 2008 % 2008
Finland 1 295 1 926 -32.8 2 144 1 834 16.9 7 898
Scandinavia 1 249 489 155.2 1 915 810 136.5 1 017
Europe -32 -123 73.7 199 -401 149.6 -74
North America -102 185 -155.2 35 27 28.7 289
Operating profit
between segments -263 -47 -461.2 -555 -94 -492.2 -452
Group total 2 146 2 431 -11.7 3 738 2 177 71.8 8 679
Personnel (employed, on 4-6/ 4-6/ 1-6/ 1-6/ Change, 1-12/
average) 2009 2008 Change, % 2009 2008 % 2008
Finland 458 421 8.8 449 418 7.3 421
Scandinavia 137 101 35.3 138 100 37.3 112
Europe 119 130 -8.5 121 129 -6.2 129
North America 31 26 19.5 31 25 24.3 26
Group total 744 678 9.8 738 672 9.8 689
Net sales by business
Net sales 4-6/ 4-6/ 1-6/ 1-6/ Change, 1-12/
(EUR thousand) 2009 2008 Change, % 2009 2008 % 2008
Product sales 5 475 7 400 -26.0 10 152 11 964 -15.1 25 859
Maintenance 7 301 6 071 20.3 14 439 11 809 22.3 25 068
Consulting 7 773 7 582 2.5 16 269 14 560 11.7 30 538
Automation
services 2 179 1 258 73.2 3 585 2 212 62.1 4 633
Group total 22 729 22 312 1.9 44 446 40 545 9.6 86 098
Net sales by the location of customer:
Net sales 4-6/ 4-6/ Change, 1-6/ 1-6/ Change, 1-12/
(EUR thousand) 2009 2008 % 2008 2008 % 2008
Finland 10 774 11 320 -4.8 21 098 20 100 5.0 41 514
Scandinavia 5 613 4 508 24.5 10 823 8 635 25.3 18 309
Europe 4 391 4 401 -0.2 9 073 8 749 3.7 19 191
Other 1 950 2 082 -6.3 3 453 3 061 12.8 7 083
Group total 22 729 22 312 1.9 44 446 40 545 9.6 86 098
GROUP KEY INDICATORS
1-6/ 1-6/ 1-6/ 1-12/
EUR thousand 2009 2008 2007 2008
Net sales 44 446 40 545 34 814 86 098
Growth of net sales, % 9.6 % 16.5% 15.7% 17.5%
EBITDA 5 809 3 540 5 350 11 722
% of net sales 13.1% 8.7% 15.4% 13.6%
Operating profit before
IFRS3 amortization 4 592 2 569 4 512 9 730
% of net sales 10.3% 6.3% 13.0% 11.3%
Operating profit 3 738 2 177 4 182 8 679
Growth of operating
profit, % 71.8% -48.0% 10.7% 15.5%
% of net sales 8.4% 5.4% 12.0% 10.1%
Profit before tax 3 607 2 178 4 299 8 410
% of net sales 8.1 % 5.4% 12.3% 9.8%
Profit for the period 2 062 1 350 2 468 6 585
% of net sales 4.6% 3.3% 7.1% 7.6%
Return on equity, % 8.4% 5.7% 11.0% 13.7%
Return on investment, % 12.8 % 8.9% 18.9% 16.6%
Interest-bearing
liabilities 11 115 2 130 552 13 283
Cash and liquid assets *) 9 516 5 771 14 683 8 777
Gearing, % 3.3% -7.8% -31.0% 9.3%
Equity ratio, % 58.2 % 67.2% 71.6% 59.5%
Total assets 84 060 69 627 63 593 81 909
Gross investments **) 2 598 1 823 1 649 12 476
% of net sales 5.8% 4.5% 4.7% 14.5%
Capital expenditure 230 481 368 1 007
% of net sales 0.5% 1.2% 1.1% 1.2%
Research and development
costs 7 530 8 133 6 344 15 518
% of net sales 16.9% 20.1% 18.2% 18.0%
R&D personnel at end of
period 187 161 140 171
Personnel on average
during the period 738 672 541 689
Personnel at end of period 742 686 559 731
Increase in personnel, % 8.2% 22.7% 10.3% 11.1%
Earnings per share, EUR 0,18 0.11 0.22 0.56
Earnings per share
(diluted), EUR 0,18 0.11 0.22 0.56
Equity per share, EUR 4,25 4.06 3.97 4.23
P/E ratio 64,54 61.67 56.46 11.68
Share price performance
lowest share price 6,60 6.14 10.48 6.00
highest share price 11,48 10.45 14.00 10.45
average share price 8,57 8.03 12.19 7.53
closing share price 11,40 7.00 12.25 6.59
Market capitalization at 129 80 276 140 484 75 301
end of period 707194 868 519 011
2 298
Number of traded shares 986 643 1 039 454 1 597 569 467
% of average number of
shares 8,7 % 9.1% 13.9% 20.1%
Average number of shares
11 385 11 468 11 468 11 463
- undiluted 986 124 124 307
11 385 11 468 11 468 11 463
- diluted 986 124 124 307
*) Includes cash, cash equivalents and financial assets at fair value
through profit or loss
**) Includes capitalized R&D costs and acquisitions
Major shareholders
June 30, 2009
Shares
Shareholders votes
pcs %
1. Sihvo, Ilkka 1 065 800 9.3
Eräkangas, Kirsi (incl. children under
2. guardianship) 1 031 800 9.0
Vaajoensuu, Hannu (incl. a controlled company
3. and children under guardianship) 962 100 8.4
4. Perttunen, Sakari 830 400 7.2
Pöllänen, Antti (incl. children under
5. guardianship) 717 415 6.3
6. Nordea Nordic Small Cap Fund 552 217 4.8
7. Sampo Life Insurance Company Limited 550 000 4.8
8. Ilmarinen Mutual Pension Insurance Company 429 064 3.7
9. Ahonen, Asko 318 822 2.8
10. Royal Skandia Life Assurance Eib 17527-6 270 000 2.4
11. Kaleva Mutual Insurance Company 242 690 2.1
12. Pension insurance company Veritas 226 000 2.0
13. Perttunen, Meimi 215 400 1.9
14. Fondita Nordic Micro Cap Placeringsfond 200 000 1.7
15. Investment Fund Aktia Capital 133 213 1.2
16. Fondita Nordic Small Cap Fund 118 500 1.0
17. Basware Corporation 90 300 0.8
18. Vaajoensuu, Sara 83 700 0.7
19. Tietoklusteri Oy 77 000 0.7
20. Pavor Oy 75 052 0.7
Total of 20 largest shareholders 8 189 473 70.8
Total of nominee-registered 962 693 8.4
Others 2 315 958 20.8
Total 11 468 124 100.0
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