basware’s interim report q2/2014/media/files/b/... · •basware signed eur 2.8 million global...
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BASWARE’S INTERIM REPORTQ2/2014
Esa Tihilä, CEO
Mika Harjuaho, CFO
July 10, 2014
Basware’s Interim Report Q2/2014
Contents
• Business review of Q2/2014
• Financial review of Q2/2014
• Future outlook
Basware’s Interim Report Q2/2014
Key events in Q2/2014
• Network Services net sales grew; strong growth of transaction volume continued
• Alusta sales developed promisingly; more Alustadeployments during the quarter than ever before
• International net sales and international share of net sales grew
• Profit-making ability improved; fixed costs decreased by 6.7 %
• Basware signed EUR 2.8 million global e-invoicing services agreement in the U.S. with a leading oil & gas company
• New research on e-invoicing & Purchase to Pay markets: the volume of e-invoices grown significantly in Europe and globally, global market penetration is approximately 10 %
Basware’s Interim Report Q2/2014
Share of recurring
revenue increased to
66.5 % of net sales
(61.6 %)
• Net sales EUR 31 833 thousand (EUR
31 789 thousand), +0.1 percent
0300060009000
120001500018000210002400027000300003300036000
Q1/11 Q1/12 Q1/13 Q1/14 Q2/11 Q2/12 Q2/13 Q2/14 Q3/11 Q3/12 Q3/13 Q4/11 Q4/12 Q4/13
• Operating profit EUR 1 152 thousand
(EUR 908 thousand), +26.9 percent
Net sales
EUR thousand
Q2/2014 key financials
Q2/2014 in brief: Operating profit grew by 26.9
percent during the second quarter
• Network Services net sales +12.7 % and Solution
Services net sales -3.5 %
• 18.7 million transactions processed through
Basware Commerce Network, +8.5 % from previous
quarter (17.2 million)
• International net sales grew by +2.5 % and the
international share of net sales was 60.4 % (59.0 %)
• Share of recurring revenue of net sales grew, totaling to
66.5 % (61.6 %) of net sales
• EBITDA amounted to EUR 2 896 thousand (EUR 2 663
thousand), +8.8 %
Basware’s Interim Report Q2/2014
Transaction volume
amounted to 18.7
million, up +29.0 %
0,01,02,03,04,05,06,07,08,09,0
10,011,012,013,014,015,016,017,018,019,020,0
Q1 Q2 Q3 Q4
2010 2011 2012 2013 2014Million
transactions
The transaction volume
was 18.7 million during
the quarter, growth of
29.0 %
Growth of transaction volumes 2010-Q2/2014
Basware’s Interim Report Q2/2014
Basware’s Interim Report Q2/2014
Share of recurring revenue, rolling 12 months average
EUR thousand
Net sales
Share of recurring
revenue, rolling 4
quarters average
The share of
recurring revenue of
net sales increased
to 66.5 % (61.6 %)
during the quarter
35,0 %
40,0 %
45,0 %
50,0 %
55,0 %
60,0 %
65,0 %
70,0 %
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
Basware’s Interim Report Q2/2014
SaaS versus license sales dynamics 2007-H1/2014
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
90 %
100 %
2007 2008 2009 2010 2011 2012 2013 H1/2014
SaaS
License Sales
• 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.
• As of 2014, the company reports revenue from products and services as
follows: Network Services (e-invoicing solutions and services) and Solution
Services (software solutions and services).*
• As previously, Customer Support and Automation Services together form the
recurring revenue reported by the company.
• As geographic information Basware reports geographical areas Finland,
Scandinavia, rest of Europe, and Other. Net sales are reported by the
customer’s location, and net sales and operating profit are also reported by
the location of the assets.
Basware’s Interim Report Q2/2014
Reporting (IFRS)
*Revenue reported also according to the previous reporting practice: License sales,
Professional Services, Customer Support, and Automation Services
20 000
30 000
40 000
Q1 Q2 Q3 Q4
2014 2013
EUR thousand Q1/14 Q1/13 Q2/14 Q2/13 Q3/14 Q3/13 Q4/14 Q4/13
Net sales 31 013 29 828 31 833 31 789 28 682 33 049
Growth % 4.0% 8.7% 0.1% 10.7% 5.8% 8.6%
Other operating income 177 58 26 1 623 61 173
Materials and services 2 978 2 542 3 057 2 987 2 967 3 265
Personnel expenses 20 078 20 518 19 561 20 611 16 464 19 327
Depreciation and amortization 1 789 1 801 1 744 1 755 1 748 1 748
Other operating expenses 6 034 6 594 6 345 7 152 5 703 6 751
Operating result 310 -1 569 1 152 908 1 861 2 131
24%
26%23%
27%
Net sales 2013
Q1 Q2 Q3 Q4
Net sales
Basware’s Interim Report Q2/2014
Development of quarterly net sales & profit
8 066
23 768 Network Services
Solutions Services
Network Services & Solution Services:
net sales in Q2/2014
• Network Services: e-invoicing solutions and services
• Solution Services: software solutions and services
Basware’s Interim Report Q2/2014
EUR thousand
(24 636, -3.5 %)
(7 154, +12.7 %)
R&D in H1/2014
R&D expenses 14.4 % of net sales
21.9 % of personnel
Basware’s Interim Report Q2/2014
R&D expenses amounted to EUR
9 027 thousand (EUR 9 468
thousand):
• Decrease of 4.7 percent, 14.4 % of
net sales (15.4 %)
• EUR 1 784 thousand (EUR
2 508 thousand) of R&D expenses
capitalized
• R&D costs included in the P&L
totaled EUR 7 243 thousand (EUR
6 960 thousand), or 11.5 % (11.3
%) of net sales
R&D unit personnel 320 (350):
• 145 (151) people in India; units
also in Finland, Romania and
Belgium
Personnel
0
200
400
600
800
1000
1200
1400
Q1/1
0
Q2/1
0
Q3
/10
Q4/1
0
Q1/1
1
Q2/1
1
Q3/1
1
Q4/1
1
Q1/1
2
Q2/1
2
Q3/1
2
Q4/1
2
Q1/1
3
Q2/1
3
Q3/1
3
Q4/1
3
Q1
/14
Q2/1
4
Sales & Marketing
Consulting & Services
Products
Admin
Personnel groups
Finland
Rest of Europe
India
Other
Geographical location of personnel
Scandinavia
Basware’s Interim Report Q2/2014
• 1 459 employees at the end of Q2/2014
• Average age of personnel is 34.7 years;
48.6% have an academic degree
• 67.0 % in APAC & India, Europe and Northern
America; 33.0 % in Finland
EUR million Q2/14 Q2/13
Net sales 31.8 31.8
Growth of net sales, % 0.1% 10.7%
Operating profit (EBIT) 1.2 0.9
% of net sales 3.6% 2.9%
Net profit 0.8 0.4
Share of recurring revenue, % 66.5 61.6%
Earnings per share, euro 0.06 0.03
Fixed costs 25.9 27.8
Change of fixed costs, % -6.7% 15.6%
Personnel, June 30 1 459 1 498
Change in personnel, % -2.6 13.2
Personnel costs 19.6 20.6
R&D expenses, H1 9.0 9.5
Basware’s Interim Report Q2/2014
EBITDA amounted to
EUR 2 896 thousand
(EUR 2 663 thousand),
an increase of 8.8 %
Q2/2014 in brief
Finance & investments
Basware’s Interim Report Q2/2014
• Total assets on the balance sheet EUR 136 027 thousand(EUR 143 158 thousand)
• Cash and liquid assets EUR 19 954 thousand (EUR 22 917 thousand)
• Cash flows from
– Operating activities EUR 13 558 thousand (EUR 9 268 thousand)
– Investments EUR -2 093 thousand (EUR -17 333 thousand)
– Financing EUR -4 765 thousand (EUR -3 080 thousand)
• Equity ratio 70.5 percent (66.9 %)
• Gearing -13.7 percent (-13.0 %)
• Total gross investments EUR 2 707 thousand (EUR 18 507 thousand)
– includes capitalized R&D expenses and acquisitions
Share & shareholders
• Number of shareholders 13 840 (14 097) at the end of June 2014
• Share price development during January-June 2014:
• Highest EUR 41.00 (EUR 21.69), lowest EUR 23.50 (EUR 16.75)
• Closing price EUR 38.55 (EUR 17.60)
• Average price of the share EUR 34.31 (EUR 19.88)
• Traded shares 3 111 870 (490 244)
• 24.2 % (3.8%) of all shares
• Market capitalization EUR 495 615 222 (EUR 226 133 970)
Basware’s Interim Report Q2/2014
Basware is a leading P2P solution provider
based on Forrester Research, Inc.
The Forrester Wave™: eProcurement, Q2 2014 Report
Forrester cites Basware as a leader in
procure-to-pay (P2P) automation platforms:
• Largest independent eProcurement vendor
• One of the largest networks in terms of
transaction volume and value going
through it
• Excels in invoice automation
• Pioneer in network interoperability
• Solid Alusta eProcurement platform
• Excellent support for global enterprises
The Forrester Wave™ is copyrighted by Forrester Research, Inc. Forrester and Forrester Wave are trademarks of Forrester Research, Inc. The Forrester Wave is a graphical
representation of Forrester's call on a market and is plotted using a detailed spreadsheet with exposed scores, weightings, and comments. Forrester does not endorse any
vendor, product, or service depicted in the Forrester Wave. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.
Basware’s Interim Report Q2/2014
Basware’s Interim Report Q2/2014
2012 2013 Increase
B2B and B2G
Direct – e-invoices delivered to
customers
390,494,710 463,512,001 18.70%
Indirect – e-invoices delivered to
non-EESPA service providers
and EESPA service providers not
participating in the survey
126,837,404 139,513,992 9.99%
TOTAL 517,332,114 603,025,993 16.56%
B2C
Direct – e-invoices delivered to
customers
157,670,684 174,493,368 10.67%
Indirect – e-invoices delivered to
non-EESPA service providers
and EESPA service providers not
participating in the survey
30,968,673 63,216,762 104.13%
TOTAL 188,639,357 237,710,130 26.01%
GRAND TOTAL 705,971,471 840,736,123 19.09%
European e-invoicing service providers
processed more than 800 million e-invoices
EESPA members
processed at least
half of all e-invoices
in Europe
• 840 million e-
invoices in 2013;
a significant
growth of 19 %
over 2012
volumes
Growth enablers
• Basware Commerce Network,
the largest open business
network, connecting 1,000,000
businesses
• Leading purchase-to-pay &
e-invoicing solutions,
empowering companies to
unlock value across their
financial operations
• The benefits of e-invoicing
realized more widely globally
• Companies’ interest in other
payment & value added services
for financing
• Growth through partnerships &
acquisitions
Basware’s Interim Report Q2/2014
• Basware is pursuing accelerated growth that exceeds the market growth in its Network Services. Stronger growth can be achieved by developing and automating the connection of buyers and suppliers to the e-invoicing services, by utilizing digital marketing and sales channels more extensively, and through acquisitions.
• The Network Services business is expected to grow strongly also during the second half of the year. The Solution Services business is expected to develop more favorably during the rest of the year. The growth in the sales of Alusta is expected to have a positive effect on software net sales and professional services.
• The fixed costs of the company are expected to stay at the same level than during the first half of 2014. The company will continue to improve the profit-making ability in the Solution Services business during the second half of the year by ensuring the effective use of resources in Professional Services and improving the billing rate in relation to demand. The company will continue to invest in the Network Services business to achieve accelerated growth by primarily developing automated solutions for sending and receiving e-invoices.
• Decisions about investments required by the growth will be made during the year if the market situation and business development so require.
• Basware expects its net sales and operating profit (EBIT) for 2014 to grow compared to 2013.
Basware’s Interim Report Q2/2014
Basware outlook 2014