SIMPLIFY OPERATIONS, SPEND SMARTER. May 2018

Transcription

1 SIMPLIFY OPERATIONS, SPEND SMARTER May 2018

2 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 forwardlooking 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 to events 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 are based 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. 2

3 WHY BASWARE SIMPLIFY OPERATIONS SPEND SMARTER 100% Digital Processes Network is the Differentiator EUR 15bn Market Opportunity

4 INVESTMENT HIGHLIGHTS Large addressable market EUR 15bn market Market leadership Differentiated offering Strong areas of growth Best end-to-end networked source-to-pay Largest e-invoicing network Analytics leadership Industry innovator leveraging large dataset Expansion in core business Cloud-based model

5 THE PROBLEMS WE HELP OUR CUSTOMERS SOLVE PROCESS INEFFICENCY INCREASE EFFICIENCY EXCESSIVE SPENDING MANAGE SPEND LACK OF VISIBILITY RELEASE CASH FROM OPERATIONS 5

6 EVERY ORGANISATION NEEDS OUR HELP UNDERPENETRATED MARKET HUGE MARKET OPPORTUNITY Structural growth drivers include: Digitalisation EUR 15 billion Market potential (1) Automation Public Sector Initiatives EUR 149 million Basware 2017 revenues EUR 5 billion Current market (1) (1) Annual spend on source-to-pay and e-invoicing network services for key, corporate, SMB medium and public sector customers in Europe and North America. Source: Basware, Forrester, Gartner, Billentis, EESPA as of

7 BASWARE IS A RECOGNIZED MARKET LEADER 2017 PROCURE TO PAY NAVIGATOR 2016 Leader with highest score for Adaptability an impressive company that offers a leading solution among global P2P providers MAGIC QUADRANT FOR PROCURE TO PAY SUITES 2016 Leader with highest score for Geographic Strategy a pioneer in the open B2B network approach it attained our highest score for e-invoicing Leader with highest score for invoice automation a particularly strong fit for enterprises that want to automate processing of high invoice volumes 7

8 BASWARE CHOSEN BY CUSTOMERS ACROSS THE WORLD AND ACROSS INDUSTRIES AUTOMOTIVE TELCO / MEDIA MANUFACTURING ENERGY / UTILITY HEALTHCARE / PHARMA FOOD / BEVERAGE >1 million organisations connected to our Network SERVICES INDUSTRIALS TRANSPORT/LODGING/REAL ESTATE large customers use our Source-to- Pay software RETAIL FINANCE / PROFESSIONAL PUBLIC SECTOR Support customers in more than 100 countries 8

9 VALUE TO CUSTOMERS OF BASWARE SOLUTIONS 12 Month Payback Time 307% Return on Investment 45% Reduction in Invoice Processing Costs Link to report: The Total Economic Impact Of Basware s Purchase-To-Pay Cloud Solution

10 WHY BASWARE WINS 100% DAY 1 100% Largest Global Partner and Interoperability Network 100% Onboarding of Suppliers of All Sizes Day 1 Invoice Processing for All Formats 100% Capture of Spend, Including Non- PO and Direct Procurement Solutions Built for the Way People Work 10

11 OPEN NETWORK IS DIFFERENTIATOR Largest e-invoicing network Open Network Philosophy Multi-lingual, Multi-format Global Trusted Partner >120 million transactions annually 220+ interoperability partners >70 einvoice formats supported Used in more than 100 countries >EUR 600 billion annual spend on Basware s network 1.2M+ active buyers and suppliers VAT compliance in more than 50 countries Connected to main government hubs HUGE DATA ASSET 11

12 GROWTH IS JUST GETTING STARTED Performance Culture Productivity Cloud Focused Strategy 6 / 9 New Executive Team Members in last 2 years 383 new / 1831 total employees globally in 2017 Management are shareholders Sales productivity up 68% in 2017 Successful implementation of productivity programme announced 2016 Transition to AWS Refined strategic focus areas Sale of non-core assets Cloud and geographical revenue mix already coming through 12

13 BASWARE LEADS INDUSTRY INNOVATION WITH #SUPERFINANCE Analytics: Peer Benchmarking, Supplier Quality Machine Learning: Smart Coding, Predictive Analytics Value Added Services: Vault, Discount

14 THE BEST GLOBAL SOLUTION FOR PURCHASING, INVOICING AND PAYING Basware s Vision The best global solution for purchasing, invoicing and paying Cloud revenue growth >20% CAGR* Customer value beyond expectations #1 networked Source-to- Pay offering Largest and smartest commerce network Undisputed market leader Cost of goods sold and opex to grow at a lower rate than cloud revenues* *2017 to 2020 on an organic basis 14

15 Net Sales, EUR million TWO ENGINES OF GROWTH CLOUD ENABLED BY NON-CLOUD SaaS Transaction Services Value Added Services Consulting Maintenance Licence 15

16 SOLID ORGANIC CLOUD REVENUE GROWTH IN Q1 Organic Cloud Growth at Constant Currencies in Q Cloud as a proportion of total revenues in Q % 59% Cloud Non Cloud 16

17 STRONG ORDER INTAKE AND LOW CHURN Strong Growth in Subscription Order Intake Low Net ARR Churn 0.2% in % Gross ARR Churn 7% in 2017 Customer lifetimes 10 to 20 years Subscription annual recurring revenue gross order intake is calculated by summing the total order intake in the period expres sed as an annual contract value. This includes SaaS and other subscription types. Transaction revenue is not included. Gross new 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. 17

18 SAAS GROWTH SUPPORTED BY TRANSFORMATIONS Roughly Half of Subscription Order Intake from Maintenance Customers in 2017 Resulting in Significant Revenue Uplift per Customer Components of Revenue Uplift from Transformation Cloud vs Licence Solution Expansion New customers and add-ons Transformation from Maintenance Maintenance SaaS Geographical Expansion 18

19 SHIFT IN REVENUE MIX SUPPORTS FUTURE GROWTH ACCELERATION Cloud Revenues More Than 50% Cloud Non-Cloud US International Business Growing Other key markets (UK, Germany, France) Nordics Rest of World 19

20 Non-Cloud Revenue Cloud Revenue Q NET SALES PROGRESSION Continued transition to Cloud model Partner sales growth Non-cloud performance in line with expectations Impact from disposals and FX Net sales by revenue type (EUR thousand) Change Organic Growth at Constant Currencies SaaS % % Transaction services % % Other cloud revenue % Cloud Revenue total % % Maintenance % License sales % Consulting services % Other non-cloud revenue Non-Cloud Revenue total % Group Total % +5.3 % 20

21 PATH TO PROFITABILITY 2017 Mid Term* Cloud Gross Margin 60% 67-72% Total Gross Margin 49% 55-60% R&D as % of Revenue** 20% 15-20% S&M as % of Revenue** 24% 25-30% G&A as % of Revenue** 9% 8-10% EBITDA Margin*** 2% 12-15% Operating Margin -6% 5-8% Gross Margin Improvement Q vs Q % points * 2020 ** Including depreciation and amortisation *** Excluding adjustments to EBITDA 21

22 ACQUISITIONS SUPPORT BASWARE STRATEGY WITH M&A OUR PRIORITIES ARE... Buy technology or capability to further strengthen our offering Extend Basware Network OUR KEY CRITERIA INCLUDES... Bring substantial value to customers Gain points of differentiation Extend market presence and accelerate growth DISCIPLINED APPROACH TO ACQUISITIONS Year Company Country Key rationale 2016 Verian US Strengthen market position in the US. Extend Network to Verian customers. Strengthen eprocurement 2015 Procserve UK Access to UK public sector customers to leverage the einvoicing opportunity 2013 Certipost Benelux Gain a significant position in the Benelux e-invoicing market st BP Germany Become a leading e-invoice operator in Germany 22

23 WHY INVEST IN BASWARE? Large addressable market Market leadership Differentiated offering Strong areas of growth 23

24 APPENDIX

25 Q PERFORMANCE AND OTHER FINANCIAL INFORMATION

26 Q PROFITABILITY New functional P&L format Growth rates impacted by disposal and FX (EUR thousand) Change Net sales % Cost of sales % Gross profit % Sales and marketing % Research and development % General and administration % Total operating expenses % Other operating income and expenses Operating profit/loss Adjustments Depreciation and amortization % Adjusted EBITDA

27 Q CASH FLOW AND BALANCE SHEET Strong liquidity position with cash and undrawn bank facilities totalling EUR 64 million (EUR thousand) Cash flows from operating activities Net change in cash and cash equivalents Cash and cash equivalents Total available liquidity* * Includes undrawn bank facilities and short term deposits 27

28 2018 FULL YEAR OUTLOOK Basware s number one strategic priority is cloud revenue growth. FOR 2018, BASWARE EXPECTS*: Cloud revenues between EUR 90 and EUR 95 million Total costs slightly above 2017 levels** *On an organic basis at constant currencies **Excluding D&A and adjustments to EBITDA 28

29 ILLUSTRATIVE ORGANIC CONSTANT CURRENCY IMPACT* 2018 Cloud Revenues Reported X 2018 costs excluding D&A and adjustments Y FY 2018 FX impact (expected)** EUR 2.0m FY 2018 FX impact (expected)** EUR 4.0m FY 2018 disposal impact*** EUR 2.3m FY 2018 disposal impact**** EUR 3.0m Total FX and disposal impact EUR 4.3m Total FX and disposal impact EUR 7.0m 2018 Cloud Revenues Organic at Constant Currencies X + EUR 4.3m 2018 Costs Organic at Constant Currencies * Illustrative, final numbers will only be available at year end ** Expected FX impact as of 31 March 2018, total effect will change with further FX movements *** 2017 cloud revenues plus 2017 subscription order intake for disposed businesses **** 2017 carve-out costs adjusted for TSA costs Y + EUR 7.0m 29

30 EUR m SUBSCRIPTION ARR GROSS ORDER INTAKE Subscription annual recurring revenue gross order intake quarterly Numbers restated to account for changes in revenue recognition practices and disposal (see notes to Q interim report) 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 2,5 3,8 2,0 2,9 2,7 0,0 Q Q Q Q Q Subscription 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 SaaS and other subscription types. Transaction revenue is not included. Gross new 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 s ales. 30

31 EURm FROM ORDER INTAKE TO REVENUE GROWTH Components of SaaS growth Baseline Order Intake Churn 31

32 THE SAAS TRANSITION: LOWER UPFRONT BUT HIGHER RECURRING REVENUES On-Premise Deal: Upfront License Payment + Annual Maintenance Payments Cumulative Revenues from Year 1 Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 Year 2 Year 3 Year 4 Year 5 License and Maintenance License & Maintenance SaaS SaaS Deal: Monthly Payments Cumulative Revenues from Year 2 Year 1 Year 2 Year 3 Year 4 Year 5 SaaS Year 2 Year 3 Year 4 Year 5 Maintenance SaaS 32

33 OTHER

34 BASWARE IN BRIEF WHAT WE DO We help our customers simplify operations and spend smarter We do this by automating their procurement and finance processes This helps customers increase efficiencies and reduce unnecessary spend MARKET LEADER Largest e-invoicing network in the world Number one in accounts payable automation Top 3 in procurement Cloud based solutions KEY FACTS Net sales 149m in 2017 Supporting customers in > 100 countries Offices in Europe, the US and Asia-Pacific Employees 34

35 THE PROCESS WE HELP CUSTOMERS IMPROVE Sourcing Procurement Accounts payable automation Pay Choose supplier and products Approve Receive Match Shop Order Invoice Pay NETWORKED SOURCE TO PAY 35

36 SUSTAINABLE BUSINESS MODEL Basware helps customers move to 100% paperless GHG emissions reduction target: 20% by 2020* Environmental Policy since 2018 Code of Conduct since 2016 * Office based per employee GHG emissions 36

37 SHAREHOLDER BREAKDOWN SHAREHOLDER DISTRIBUTION TOP 20 INSTITUTIONAL SHAREHOLDERS % of shares Q Country Finnish institutional investors 17% Executive team and Board 7% Other founders 16% International institutional investors 49% Other 6% Households 6% INTERNATIONAL SHAREHOLDER DEVELOPMENT 12% 51% 2013 Y/E 2018 Q1 37

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