RESULTS PRESENTATION Q4 2018 - Basware/media/Files/B/... · 0,0 5,0 10,0 15,0 20,0 25,0 Q4/2017...
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RESULTSPRESENTATIONQ4 2018Vesa Tykkyläinen, CEONiclas Rosenlew, CFO
January 31, 2018
IMPORTANT NOTICE
The following information contains, or may be deemed to contain, forward-looking statements. These statements relate to future events or future financial performance, including, but not limited to, expectations regarding market growth and development as well growth and profitability of Basware. In some cases, such forward-looking statements can be identified by terminology such as “expect”, “plan”, “anticipate”, “intend”, “believe”, “estimate”, “predict”, “potential”, or “continue”, or the negative of those terms or other comparable terminology. By their nature, forward-looking statements involve risks and uncertainties because they relate toevents and depend on circumstances that may or may not occur in the future. Future results may vary from the results expressed in, or implied by, the forward-looking statements, possibly to a material degree. All forward-looking statements included herein arebased on information presently available to Basware and, accordingly, Basware assumes no obligation to update any forward-looking statements, unless obligated to do so pursuant to an applicable law or regulation.
Nothing in this presentation constitutes investment advice and this presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities of Basware or otherwise to engage in any investment activity.
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CEO REVIEW
BASWARE IN BRIEF
Global leader in networked Source-to-Pay
Market potential worth EUR 15 billion annually
EUR 1 billion revenue long-term growth vision
SPEND SMARTERSIMPLIFY OPERATIONS
KEY EVENTS IN STRATEGY EXECUTION 2018
Partnering organization established
Move to a functional
organization
Scanning services outsourcing partnership
Disposingnon-core
businesses
Strategy updated: New mid-term
target and long-term growth
vision
Cloud revenues
+16%
Gross margin
53%
Employees
~1,400
Cloud order intake
+22%
CUSTOMER SUCCESS
EXAMPLES OF GLOBAL CUSTOMER WINS ACROSS INDUSTRIES IN 2018
CUSTOMER SUCCESS
EXAMPLES OF CUSTOMER TRANSFORMATIONS SIGNED IN 2018
#SUPERFINANCE IN Q1 2018
Value Leader in Spend Matters’ Q4 2018 Procure-to-Pay SolutionMap
New functions in Procurement Marketplace and Basware Analytics
LEADING INDUSTRY INNOVATION IN Q4/2018
New enablement services and PDF eOrder solution for suppliers
Q4/2018 HIGHLIGHTS
All time high quarterlycloud revenuesSTRATEGIC
PRIORITY: CLOUD REVENUE
GROWTH
9
Cloud revenues 66% of total
+58% more Partner deals
FINANCIAL REVIEW
ORGANIC CLOUD REVENUE GROWTHFEEDS TOTAL GROWTH
Cloud Non Cloud
66%
Cloud as a proportion of Q4
total revenues
Organic cloud growth at constant currencies in 2018
+16%
Organic total growth at constant currencies in 2018
+5%
11
0,0
5,0
10,0
15,0
20,0
25,0
Q4/2017 Q4/2018 2017 2018
17.9 21.5
CLOUD ORDER INTAKE GROWTH
EUR
mill
ion
• Includes all SaaS and Network recurring revenues
• Time lag to visibility in revenues:• ~1/4 year 1• 50-60% year 2
Annual recurring revenue gross order intake is calculated by summing the total order intake in the period expressed as an annual contract value. This includes all SaaS and Network recurring revenues including transaction revenues. Gross order intake covers new cloud customers, add-ons and renewal uplifts but excludes churn. There will be a time lag before this order intake is visible in net sales.*Organic constant currency growth rate
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4.9 5.9
Q4/2018 NET SALES PROGRESSION
• Headline growthimpacted bydisposals
• Significant cloud potential in existing maintenance customer base being addressed
Net sales by revenue type, EUR thousand
10-12 2018
10-122017
Change Change*
Clou
d
SaaS 10 866 9 532 14.0% 21.0%
Transaction services 11 758 10 770 9.2% 9.3%
Other cloud revenue 1 292 1 310 -1.4% -1.3%
Cloud Revenue total 23 916 21 612 10.7% 13.6%
Non
-Clo
udMaintenance 5 899 8 856 -33.4% -12.6%
License sales 661 1 383 -52.2% -20.6%
Consulting services 6 063 7 447 -18.6% -6.3%
Other non-cloud revenue -52 -54
Non-Cloud Revenue total 12 571 17 631 -28.7% -10.2%
Group Total 36 488 39 243 -7.0% 4.1%
*On an organic basis at constant currencies 13
Q4/2018 PROFITABILITY
• Growth rates impacted by disposals and sales and marketing investments
EUR thousand 10-12 2018
10-12 2017
Change
Net sales 36 488 39 243 -7.0%
Cost of sales -17 026 -19 087 -10.8%
Gross profit 19 462 20 156 -3.4%
Sales and marketing -11 969 -9 947 20.3%
Research and development -6 848 -7 603 -9.9%
General and administration -4 061 -4 465 -9.0%
Total operating expenses -22 878 -22 014 3.9%
Other operating income and expenses
-433 -1 004 -56.9%
Operating profit/loss -3 850 -2 862 -34.5%
Adjustments 431 1 023 -57.9%
Depreciation and amortization 2 593 2 747 -5.6%
Adjusted EBITDA -826 90814
UNDERLYING PROFITABILITY
15
EUR
~8m
EUR
~6.6m
EUR ~0.7m
2017
Adjusted EBITDA
EBITDA
contribution
of disposed
businesses
in 2017
Additional
S&M Spend
in 2018
Underlying
profitability
improvement
~EUR 7.6m
EUR
- 4.4m
Additional
share-based
compensation
in 2018
EUR
3.3m
Ad
jus
ted
EB
ITD
A (
EU
Rm
)
2018
Adjusted EBITDA
Q4/2018 CASH FLOW AND BALANCE SHEET
• Strong liquidity position with cash and undrawn bank facilities totalling EUR 51 million
EUR thousand 10-122018
10-122017
Cash flows from operating activities -2 840 -1 795
Net change in cash and cash equivalents -5 323 -4 566
Cash and cash equivalents 40 747 20 683
Total available liquidity* 50 747 30 683
*Includes undrawn bank facilities and short term deposits16
IFRS 16 ESTIMATED IMPACT 2019
EBITDA
Assets and liabilities
EUR 4-6 million
EUR 17.5-19.5 million
Basware implements IFRS16 from 1 January 2019 onwards. The estimates describe the approximate impact on full year 2019 EBITDA and assets and liabilities.
Total revenues to grow at
approximately 5%
Cloud revenues to grow at
approximately 15%
OUTLOOK FOR 2019BASWARE’S NUMBER ONE STRATEGIC PRIORITY IS CLOUD REVENUE GROWTH.
FOR 2019 BASWARE EXPECTS SCALABLE CLOUD GROWTH TO CONTINUE*:
*On an organic basis at constant currenciesAfter IFRS16 changes have been applied.
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Adjusted EBITDA to be at breakeven or
better