Earnings Release • Oct 10, 2014
Earnings Release
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Basware expects its net sales and operating profit (EBIT) for 2014 to grow compared to 2013.
The figures are unaudited.
| 7-9/ | 7-9/ | Change, | 1-9/ | 1-9/ | Change, | 1-12/ | |
|---|---|---|---|---|---|---|---|
| EUR thousand | 2014 | 2013 | % | 2014 | 2013 | % | 2013 |
| Net sales | 30 164 | 28 682 | 5.2% | 93 010 | 90 300 | 3.0% | 123 349 |
| EBITDA | 2 923 | 3 609 | -19.0% | 7 918 | 6 504 | 21.7% | 10 383 |
| Operating profit before IFRS3 amortization |
1 719 | 2 092 | -17.8% | 3 642 | 1 895 | 92.2% | 4 256 |
| Operating profit | 1 162 | 1 861 | -37.6% | 2 624 | 1 201 | 118.5% | 3 331 |
| % of net sales | 3.9% | 6.5% | 2.8% | 1.3% | 2.7% | ||
| Result before tax | 964 | 1 819 | -47.0% | 2 124 | 1 130 | 87.9% | 3 284 |
| Result for the period | 777 | 960 | -19.2% | 1 505 | 350 | 329.9% | 2 605 |
| 2.6% | 4.0% | 1.7% | 0.5% | 2.6% | |||
| Return on equity, % | |||||||
| Return on investment, % |
3.0% | 7.7% | 3.1% | 2.3% | 3.9% | ||
| Liquid assets | 60 156 | 15 124 | 297.8% | 60 156 | 15 124 | 297.8% | 13 218 |
| Gearing, % | -39.3% | -6.7% | -39.3% | -6.7% | -4.7% | ||
| Equity ratio, % | 80.6% | 73.1% | 80.6% | 73.1% | 77.1% | ||
| Earnings per share | |||||||
| Undiluted, EUR | 0.05 | 0.07 | -21.5% | 0.11 | 0.03 | 254.6% | 0.20 |
| Diluted, EUR | 0.05 | 0.07 | -21.5% | 0.11 | 0.03 | 254.6% | 0.20 |
| Equity per share, EUR | 9.90 | 7.51 | 32.7% | 9.90 | 7.46 | 32.7% | 7.62 |
Basware is the global leader in providing purchase-to-pay and e-invoicing solutions in the world of commerce. We empower companies to unlock value across their financial operations by simplifying and streamlining key financial processes. We help our customers to succeed and create added value to their business through better financial management. Our 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 new levels of 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.
Basware Corporation 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 (einvoicing solutions and services) and Solution Services (software solutions and services). In addition to
this, the company reports revenue from products and services in tabulated format according to the breakdown of the previous reporting practice: License sales, Professional Services, Customer Support, and Automation Services.
In accordance with the previous practice, Customer Support and Automation Services together form the recurring revenue reported by the company.
Network services revenue is comprised of e-invoicing, paper invoice scanning services, printing service, catalog exchange, purchase message exchange, activation services, and alliance fees of e-invoicing services and financing-related added value services. Solution Services revenue is comprised of software revenue (SaaS revenue and license sales), software maintenance and extended customer support services (customer support), Professional Services, and start-up fees of SaaS services.
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 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.
The Network Services business continued to grow strongly during the third quarter. Net sales for the third quarter amounted to EUR 30 164 thousand, growth of 5.2 percent, and operating profit to EUR 1 162 thousand (EUR 1 861 thousand). The share of recurring revenue of net sales continued to grow, accounting for 70.1 percent. International operations accounted for 61.8% (60.7%) of net sales.
The net sales of Network Services amounted to EUR 8 010 thousand (EUR 6 559 thousand) for the third quarter, growth of 22.1 percent year-on-year. Organic growth in Network Services transactions accelerated to a record-high number, growth of 41.4 percent year-on-year. A total of 20.3 million transactions were processed via Basware Commerce Network, up 8.9 percent from the previous quarter when 18.7 million transactions were reported. We 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.
Decrease in the Solution Services business came to a halt, with net sales of EUR 22 154 thousand for the third quarter (EUR 22 125 thousand). Sales of Alusta and chargeable utilization rate of Professional Services improved during the third quarter. The performance during the quarter lays down a good foundation for the positive development of the Solution Services business during the rest of the year as well. International demand has developed favorably in Solution Services, and the number of requests for quotes on comprehensive Purchase to Pay solutions in particular has increased. We will continue to improve our profit-making ability in the Solution Services during the last quarter by ensuring the efficient use of resources in Professional Services and improving the billing rate in relation to demand.
In September, we announced that we are launching a new business in financing services. Basware's Financing Services will deliver new and innovative financing services for companies of all sizes, combining invoice automation with financing services on the Basware Commerce Network. The first solution within Basware's Financing Services portfolio is Basware Pay, a new type of a global e-payment solution offered in collaboration with MasterCard.
In September, we carried out a directed share issue to a number of international institutional investors, and I am grateful for the great interest shown towards Basware. The Basware Commerce Network has grown as planned for years, and particularly strongly during the last two years. In accordance with our strategy, we are pursuing growth in the network both organically and through mergers and acquisitions.
The net proceeds from the offering will increase Basware's financial flexibility and preparedness to carry out growth projects and acquisitions.
Basware Group's net sales for the review period amounted to EUR 93 010 thousand (EUR 90 300 thousand), growth of 3.0 percent. The growth of net sales in comparable currencies was 4.4 percent.
Net sales for the third quarter increased by 5.2 percent to EUR 30 164 thousand (EUR 28 682 thousand). The growth of net sales in comparable currencies was 5.3 percent.
| Net sales | 7-9/ | 7-9/ | Change, | 1-9/ | 1-9/ | Change, | 1-12/ |
|---|---|---|---|---|---|---|---|
| EUR thousand | 2014 | 2013 | % | 2014 | 2013 | % | 2013 |
| Network Services | 8 010 | 6 559 | 22.1 | 24 108 | 20 422 | 18.0 | 27 829 |
| Solution Services | 22 154 | 22 125 | 0.1 | 68 903 | 69 878 | -1.4 | 95 520 |
| Group total | 30 164 | 28 682 | 5.2 | 93 010 | 90 300 | 3.0 | 123 349 |
| of which License Sales | 2 789 | 3 037 | -8.2 | 9 629 | 10 380 | -7.2 | 14 617 |
| Customer Support | 11 066 | 10 891 | 1.6 | 33 104 | 32 503 | 1.8 | 43 512 |
| Professional Services | 6 216 | 6 488 | -4.2 | 20 311 | 22 200 | -8.5 | 30 069 |
| Automation Services | 10 093 | 8 267 | 22.1 | 29 966 | 25 217 | 18.8 | 35 151 |
The Network Services net sales for the period amounted to EUR 24 108 thousand (EUR 20 422 thousand), growth of 18.0 percent, including the alliance fees of financing-related added value services. The strong growth in the transaction volume of the e-invoicing business continued, up 31.9 percent, and 56.2 million transactions were processed via Basware Commerce Network.
Solution Services net sales amounted to EUR 68 903 (EUR 69 878 thousand), down 1.4 percent. The development of net sales was influenced by the utilization rate of consulting being lower than planned.
The share of recurring revenue of net sales increased during the period to 67.8 percent (63.9%) of net sales.
The international share of Basware's net sales was 62.1 percent (60.2%) in the period. International operations grew by 6.2 percent.
Basware's operating profit for the period amounted to EUR 2 624 thousand (EUR 1 201 thousand). Operating profit represented 2.8 percent (1.3%) of net sales. The operating profit for the review period of the previous year included a non-recurring capital gain of EUR 1 540 thousand recorded as a result of the divestment of the Cashier Desk business and expenses totaling EUR 1 659 thousand due to the efficiency drive and termination of employment relationships.
Basware's operating profit for the third quarter was EUR 1 162 thousand (EUR 1 862 thousand). Operating profit represented 3.9 percent (6.5%) of net sales. The development of fixed expenses was influenced by the exchange of annual holiday pay to additional leave as part of the company's efficiency drive in the comparison year.
The company's fixed costs were EUR 75 622 thousand (EUR 77 042 thousand) in the period, and have decreased by 1.8 percent from the corresponding period the previous year. Personnel costs made up 75.3 percent (75.0%) or EUR 56 976 thousand (EUR 57 593 thousand) of the fixed costs. Bad debt and change in bad debt provision are included in fixed costs. Bad debt provision at the end of the period amounted to EUR 1 560 thousand (EUR 1 702 thousand).
The company's finance income and finance expenses were EUR -500 thousand (EUR -71 thousand) for the period. Result before tax was EUR 2 124 thousand (EUR 1 130 thousand) and result for the period was EUR 1 505 thousand (EUR 350 thousand) or 1.6 percent (0.4%) of net sales. Taxes for the period totaled EUR 619 thousand (EUR 780 thousand). Undiluted earnings per share were EUR 0.11 (EUR 0.03).
Basware Group's total assets on the balance sheet at the end of the period were EUR 173 739 thousand (EUR 131 968 thousand). The company's liquid assets were EUR 60 156 thousand (EUR 15 124 thousand), which is comprised of cash and cash equivalents in full. Cash flows from operating activities were EUR 13 942 thousand (EUR 4 129 thousand). Cash flows from investments were EUR -3 256 thousand (EUR -18 284 thousand) and the cash flows from financing activities were EUR 35 999 thousand (EUR -4 809 thousand).
Equity ratio was 80.6 percent (73.1%) and gearing was -39.3 percent (-6.7%). The company's interestbearing liabilities totaled EUR 5 072 thousand (EUR 8 693 thousand), of which current liabilities accounted for EUR 3 405 thousand (EUR 3 606 thousand). Return on investment was 3.1 percent (2.3%) and return on equity 1.7 percent (0.5%).
Capital expenditure, resulting from regular additional and replacement investments required by the growth, was EUR 608 thousand (EUR 960 thousand) during the period. Gross investments including the capitalized research and development costs totaled EUR 3 872 thousand (EUR 19 458 thousand). The investments during the corresponding period the previous year included one acquisition.
Basware's research and development expenses totaled EUR 12 830 thousand (EUR 12 571 thousand), or 13.8 percent (13.9%) of net sales during the review period. The expenses increased by 2.0 percent compared to the corresponding period the previous year. Research and development expenses capitalized during the period amounted to EUR 2 853 thousand (EUR 2 842 thousand). The research and development costs included in the profit for the review period totaled EUR 9 977 thousand (EUR 9 729 thousand), or 10.7 percent (10.8%) of net sales. A total of 330 (356) people worked in R&D of whom 142 (155) people in India at the end of the period.
Basware employed 1 464 (1 487) people on average during the period and 1 456 (1 480) at the end of the period. The number of personnel decreased by 24 persons and by 1.5 percent compared with the same period the previous year.
Geographical division of personnel:
| Personnel | 7-9/ | 7-9/ | Change, | 1-9/ | 1-9/ | Change, | 1-12/ |
|---|---|---|---|---|---|---|---|
| (employed, on average) | 2014 | 2013 | % | 2014 | 2013 | % | 2013 |
| Finland | 483 | 510 | -5.3 | 476 | 510 | -6.7 | 510 |
| Scandinavia | 134 | 130 | 3.3 | 135 | 131 | 2,8 | 131 |
| Rest of Europe | 282 | 257 | 9.6 | 293 | 262 | 11,8 | 265 |
| India | 490 | 510 | -3.9 | 494 | 509 | -2.9 | 506 |
| Other | 67 | 73 | -8.7 | 66 | 74 | -10.4 | 73 |
| Group total | 1 456 | 1 480 | -1.6 | 1 464 | 1 487 | -1.5 | 1 485 |
The share of personnel working in foreign units has increased compared with the previous year. At the end of the period, 67.7 percent (66.0%) of Basware personnel worked outside of Finland and 32.3 percent (34.0%) in Finland. 12.1 percent (12.0%) of the personnel work in sales and marketing, 59.9 percent (57.9%) in consulting and services, 22.3 percent (24.1%) in products, and 6.2 percent (6.0%) in administration.
The average age of employees is 34.8 (34.6) years. Of the employees, 21.4 percent (23.1%) have a Master's degree and 26.5 percent (28.8%) have a Bachelor's degree. Women account for 25.0 percent (21.7%) of employees, men for 75.0 percent (78.3%).
The company's Annual General Meeting on February 14, 2014, authorized the Board of Directors of Basware to decide on the issue of new shares deviating from shareholders' pre-emptive subscription rights. Basware announced on September 4, 2014, that it will offer up to 1 290 000 new Basware shares to a limited number of international institutional investors in an accelerated book-built offering deviating from shareholders' pre-emptive subscription rights. The offered shares corresponded with approximately 9.98% of all Basware shares and votes before the share issue.
The subscription price was set at EUR 33.50 per share, amounting to total proceeds of approximately EUR 43.2 million before commissions and expenses. The proceeds from the offering will increase Basware's financial flexibility and preparedness to carry out potential acquisitions.
Basware announced on September 3, 2014, that it is establishing a new business called Basware Financing Services. Basware's Financing Services deliver new and innovative financing services for buyers and suppliers, combining payment automation with financing services for companies of all sizes. Financing Services optimize companies' cash flow and working capital as they participate within and transact across the Basware Commerce Network.
The company announced three new solutions within its Financing Services portfolio:
Basware Discount, a buyer-funded supplier financing solution in which the supplier and buyer dynamically agree on the terms of payment; and
October 10, 2014
The company announced on September 3, 2014, that it had signed a letter of intent with Arrowgrass Capital Partners LLP on the development of a new e-invoicing-based factoring service, Basware Factoring. The letter of intent outlines the cooperation to jointly develop, resource, and maintain the new service, and the establishment of a joint venture to manage it.
Short-term risks are considered to be risks in the current reporting year. Additional information on risks and risk management is available on the company's investor pages at www.basware.com/investors.
The world economy and markets are unstable, which has resulted in a decrease in the demand for license sales and services. The negotiation times of large international deals in particular are long because of the nature of service level agreements in the deals.
The bad debt provision related to sales receivables on the company's balance sheet has decreased compared to the corresponding period the previous year. There are no significant credit loss concentrations associated with the sales receivables; they are primarily comprised of a large number of relatively small receivables. Business management regularly monitors the payment of sales receivables as part of the management of customer accounts.
The development of Solution Services net sales has been influenced by the utilization rate of consulting being lower than planned, non-chargeable work, and delays in the entry of new SaaS services into production compared to the plans.
As part of HR processes, the company continuously assesses the competence and well-being of the personnel. The company aims to avoid recruitment errors and excessive turnover of personnel, which may lead to a decrease in customer satisfaction, growth, and profitability.
Basware updated its strategy in accordance with its strategy process at the end of 2013. The key strategic objectives are: an annual volume of 150 million transactions processed by the end of 2015, annual growth of 15–30 percent in net sales, share of recurring revenue 70 percent of net sales and operating profit margin of 15–20 percent at the end of the strategy period. The strategy will be reviewed by the beginning of 2015 when company's financial targets will also be updated.
The key aim of the Network Services business is strong growth in net sales, while the Solution Services business aims at strong profitability and moderate growth. Strengthening Basware's position in the key markets and customer loyalty are objectives shared throughout the company.
The strategy focuses on accelerated global growth both organically and through acquisitions. The strategic focus areas for 2014 include strengthening Basware's position in the international key markets, maximizing the transaction volume, global market leadership in Purchase-to-Pay (P2P) solutions, and customer loyalty.
Basware will continue to revise its sales and marketing model with the aim of strengthening its position in the key markets. Direct sales and marketing measures will be increasingly segmented according to carefully selected segments and companies. Investments in obtaining channel partners and business support will continue.
The Network Services Business focuses on measures to maximize transaction volumes, which include acquiring new virtual operator partners, intensifying and automating supplier activation, developing product and transaction services, and offering added value services related to financing, among others.
The Solution Services business will continue the development of Alusta software products and streamlining the associated delivery, production, and support processes. The ease of use and operating logic of Alusta products have met a favorable market reception.
In September 2014, Basware announced that it is launching new business in financing services. The Financing Services business is expected to accumulate substantial revenue as of the second half of 2015. Basware's Financing Services deliver new and innovative financing services for companies of all sizes, combining invoice automation with financing services on the Basware Commerce Network for buyers and suppliers. The company expects the new financing services to offer future growth opportunities and benefits to Basware's customers, who will benefit from the ease of obtaining financing services and options through the company's other existing services.
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 2014 and the continuous need 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. Basware continues active analysis of acquisition targets especially in the einvoicing market in Europe and in the U.S. according to its strategy.
By the end of 2015, Basware aims to become the largest business commerce network for buyers and suppliers. According to latest industry surveys, 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 Basware excellent growth opportunities in future years.
The global market growth in e-invoicing has been estimated to be approximately 20 percent. Basware is pursuing accelerating 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 service, by utilizing digital marketing and sales channels more extensively, and through acquisitions.
The Network Services business is estimated to grow strongly during the rest of the year. 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 for the second half of the year are estimated to be on a par with the first half. The company will continue to improve its profit-making ability in the Solution Services also during the last quarter 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 einvoices and new ways to achieve accelerated growth in sales. Decisions on additional investments required for growth will be made during the last quarter as required by the market situation and development of business operations.
Basware expects its net sales and operating profit (EBIT) for 2014 to grow compared to 2013.
Espoo, Finland, October 10, 2014
BASWARE CORPORATION Board of Directors
Esa Tihilä, CEO, Basware Corporation Tel. +358 40 480 7098
Distribution: NASDAQ OMX Helsinki Ltd Key media www.basware.com
This interim report has been prepared in accordance with IAS 34, Interim Financial Reporting. The same accounting policies have been followed as in the previous Financial Statements. Key indicator calculations remain unchanged and have been presented in the 2013 Financial Statements.
Preparation of financial statements in accordance with the IFRS standards requires Basware's management to make estimates and assumptions that have an effect on the amount of assets and liabilities on the balance sheet at the closing date as well as the amounts of income and expenses for the financial period. In addition, the management must exercise its judgment regarding the application of accounting policies. Since the estimates and assumptions are based on the views at the date of the Financial Statements, they include risks and uncertainties. The actual results may differ from the estimates and assumptions.
The amounts presented in the income statement and balance sheet are Group figures. The amounts presented in the release are rounded, so the sum of individual figures may differ from the sum reported. The Interim Report is unaudited.
| EUR thousand | 1.7.- 30.9.2014 |
1.7.- 30.9.2013 |
Change, % |
1.1.- 30.9.2014 |
1.1.- 30.9.2013 |
Change, % |
1.1.- 31.12.2013 |
|---|---|---|---|---|---|---|---|
| Profit attributable to: | |||||||
| Equity holders of the parent company |
777 | 960 | -19.2 | 1 505 | 350 | 329.9 | 2 605 |
| 777 | 960 | -19.2 | 1 505 | 350 | 329.9 | 2 605 | |
| Total comprehensive income attributable to: |
|||||||
| Equity holders of the parent company |
1 456 | 1 261 | 141.1 | 2 224 | -1 342 | 247 | |
| 1 456 | 1 261 | 141.1 | 2 224 | -1 342 | 247 | ||
| Earnings per share | |||||||
| undiluted, EUR | 0.05 | 0.07 | -21.5 | 0.11 | 0.03 | 254.6 | 0.20 |
| diluted, EUR | 0.05 | 0.07 | -21.5 | 0.11 | 0,03 | 254.6 | 0.20 |
| EUR thousand | 30.9.2014 | 30.9.2013 | Change, % | 31.12.2013 |
|---|---|---|---|---|
| ASSETS | ||||
| Non-current assets | ||||
| Intangible assets | 24 949 | 26 863 | -7.1 | 26 428 |
| Goodwill | 51 240 | 51 274 | -0.1 | 50 996 |
| Tangible assets | 1 396 | 1 493 | -6.5 | 1 431 |
| Available-for-sale investments | 45 | 38 | 18.9 | 38 |
| Trade and other receivables | 864 | 906 | -4.7 | 947 |
| Deferred tax assets | 4 090 | 3 338 | 22.5 | 3 680 |
| Non-current assets | 82 584 | 83 912 | -1.6 | 83 520 |
| Current assets | ||||
| Inventories | 153 | 145 | 5.7 | 240 |
| Trade and other receivables | 26 958 | 29 498 | -8.6 | 27 536 |
| Income tax receivables | 3 888 | 3 289 | 18.2 | 2 529 |
| Cash and short-term deposits | 60 156 | 15 124 | 297.8 | 13 218 |
| Current assets | 91 156 | 48 055 | 89.7 | 43 522 |
| ASSETS | 173 739 | 131 968 | 31.7 | 127 043 |
| EUR thousand | 30.9.2014 | 30.9.2013 | Change, % | 31.12.2013 |
|---|---|---|---|---|
| EQUITY AND LIABILITIES | ||||
| Shareholders' equity | ||||
| Share capital | 3 528 | 3 528 | 0.0 | 3 528 |
| Share premium account | 1 187 | 1 187 | 0.0 | 1 187 |
| Own shares | -1 156 | -1 215 | -4.9 | -1 164 |
| Invested unrestricted equity fund and other reserves |
104 924 | 62 339 | 68.3 | 62 288 |
| Translation differences | -1 238 | -1 743 | -28.9 | -1 958 |
| Retained earnings | 32 765 | 32 359 | 1.3 | 34 074 |
| Shareholders' equity | 140 011 | 96 455 | 45.2 | 97 956 |
| Non-current liabilities | ||||
| Deferred tax liability | 2 469 | 1 783 | 38.5 | 1 863 |
| Interest-bearing liabilities | 1 667 | 5 086 | -67.2 | 5 014 |
| Other non-current financial liabilities | 385 | 264 | 45.9 | 127 |
| Non-current liabilities | 4 521 | 7 133 | -36.6 | 7 004 |
| Current liabilities | ||||
| Interest-bearing liabilities | 3 405 | 3 606 | -5.6 | 3 618 |
| Trade payables and other liabilities | 25 686 | 23 874 | 7.6 | 17 966 |
| Income tax liabilities | 117 | 898 | -87.0 | 499 |
| Current liabilities | 29 208 | 28 379 | 2.9 | 22 082 |
| EQUITY AND LIABILITIES | 173 739 | 131 968 | 31.7 | 127 043 |
| EUR thousand | Share holder capital |
Share premium account |
Own shares |
Inv. non restricted equity |
Other reserves |
Translation differences |
Retained earnings |
Total |
|---|---|---|---|---|---|---|---|---|
| SHAREHOLDERS' EQUITY | ||||||||
| 1.1.2014 | 3 528 | 1 187 | -1 164 | 61 748 | 540 | -1 958 | 34 074 | 97 956 |
| Comprehensive income | 719 | 1 505 | 2 224 | |||||
| Dividend distribution | -2 957 | -2 957 | ||||||
| Management incentive plan | 143 | 143 | ||||||
| Share issue | 42 644 | 42 644 | ||||||
| Changes in rep. period | 8 | -8 | 0 | |||||
| SHAREHOLDERS' EQUITY 30.9.2014 |
3 528 | 1 187 | -1 156 | 104 384 | 540 | -1 238 | 32 765 | 140 011 |
| EUR thousand | Share holder capital |
Share premium account |
Own shares |
Inv. non restricted equity |
Other reserves |
Translation differences |
Retained earnings |
Total |
|---|---|---|---|---|---|---|---|---|
| SHAREHOLDERS' EQUITY 1.1.2013 |
3 528 | 1 187 | -1 215 | 61 799 | 540 | -708 | 35 594 | 100 725 |
| Comprehensive income | -1 692 | 350 | -1 342 | |||||
| Dividend distribution | -2 955 | -2 955 | ||||||
| Management incentive plan | 27 | 27 | ||||||
| Changes in rep. period | 657 | -657 | 0 | |||||
| SHAREHOLDERS' EQUITY 30.9.2013 |
3 528 | 1 187 | -1 215 | 61 799 | 540 | -1 743 | 32 359 | 96 455 |
| EUR thousand | 1.1.-30.9.2014 | 1.1.-30.9.2013 | 1.1.-31.12.2013 |
|---|---|---|---|
| Cash flows from operating activities | |||
| Result for the period | 1 505 | 350 | 2 605 |
| Adjustments | 6 505 | 4 623 | 6 177 |
| Working capital changes | 8 463 | 2 922 | -1 641 |
| Interest paid | -96 | -163 | -200 |
| Interest received | -83 | 54 | 109 |
| Other financial items in operating activities | -162 | -316 | -425 |
| Income taxes paid | -2 189 | -3 340 | -3 047 |
| Cash flows from operating activities | 13 942 | 4 129 | 3 578 |
| Cash flows used in investing activities | |||
| Purchase of tangible and intangible assets | -3 856 | -4 163 | -5 418 |
| Acquisition of subsidiaries and businesses | 0 | -15 061 | -15 061 |
| Proceeds from divestment of business | 0 | 1 540 | 1 540 |
| Loans granted | 0 | -600 | -600 |
| Repayment of loan receivables | 600 | 0 | 0 |
| Cash flows used in investing activities | -3 256 | -18 284 | -19 538 |
| Cash flows from financing activities | |||
| Share issue | 42 502 | 0 | 0 |
| Repayments of borrowings | -3 333 | -1 667 | -1 667 |
| Payments of finance lease liabilities | -213 | -188 | -239 |
| Dividends paid | -2 957 | -2 955 | -2 955 |
| Cash flows from financing activities | 35 999 | -4 809 | -4 861 |
| Net change in cash and cash equivalents | 46 685 | -18 964 | -20 821 |
| Cash and cash equivalents at the beginning of | |||
| period | 13 218 | 34 519 | 34 519 |
| Net foreign exchange difference | 253 | -431 | -479 |
| Cash and cash equivalents at the end of period | 60 156 | 15 124 | 13 218 |
| EUR thousands | 7-9/2014 | 4-6/2014 | 1-3/2014 | 10-12/2013 | 7-9/2013 | 4-6/2013 | 1-3/2013 |
|---|---|---|---|---|---|---|---|
| NET SALES | 30 164 | 31 833 | 31 013 | 33 049 | 28 682 | 31 789 | 29 828 |
| Other operating income | 57 | 27 | 177 | 173 | 61 | 1 623 | 58 |
| Materials and services | -3 200 | -3 058 | -2 978 | -3 265 | -2 967 | -2 987 | -2 542 |
| Employee benefit expenses |
-17 337 | -19 561 | -20 078 | -19 327 | -16 464 | -20 611 | -20 518 |
| Depreciation and amortization |
-1 760 | -1 744 | -1 789 | -1 748 | -1 748 | -1 755 | -1 801 |
| Other operating expenses | -6 761 | -6 345 | -6 034 | -6 751 | -5 703 | -7 152 | -6 594 |
| Operating result | 1 162 | 1 152 | 310 | 2 131 | 1 861 | 908 | -1 569 |
| % | 3.9% | 3.6% | 1.0% | 6.4% | 6.5% | 2.9% | -5.3% |
| Finance income | -233 | 325 | 139 | 271 | 178 | 252 | 227 |
| Finance expenses | 34 | -328 | -438 | -248 | -220 | -324 | -184 |
| Result before tax | 964 | 1 149 | 11 | 2 153 | 1 819 | 836 | -1 526 |
| % | 3.2% | 3.6% | 0.0% | 6.5% | 6.3% | 2.6% | -5.1% |
| Income taxes | -187 | -345 | -87 | 102 | -859 | -485 | 563 |
| RESULT FOR THE PERIOD |
777 | 804 | -76 | 2 255 | 960 | 352 | -962 |
| % | 2.6% | 2.5% | -0.2% | 6.8% | 3.3% | 1.1% | -3.2% |
| EUR thousand | 30.9.2014 | 30.9.2013 | 31.12.2013 |
|---|---|---|---|
| Own guarantees | |||
| Business mortgages of own debts | 1 200 | 1 200 | 1 200 |
| Commitments on behalf of subsidiaries and group companies |
|||
| Guarantees | 68 | 31 | 31 |
| Other own guarantees | |||
| Lease liabilities | |||
| Current lease liabilities | 891 | 993 | 1 012 |
| Lease liabilities maturing in 1–5 years | 753 | 702 | 820 |
| Total | 1 643 | 1 695 | 1 831 |
| Other rental liabilities | |||
| Current rental liabilities | 3 647 | 3 792 | 4 001 |
| Rental liabilities maturing in 1–5 years | 5 861 | 2 839 | 3 738 |
| Rental liabilities maturing later | 1 848 | 0 | 0 |
| Total | 11 356 | 6 631 | 7 739 |
| Other own contingent liabilities, total | 13 036 | 8 326 | 9 570 |
| Total commitments and contingent liabilities | 14 267 | 9 563 | 10 801 |
| RELATED PARTY TRANSACTIONS | |||
| EUR thousand | 30.9.2014 | 30.9.2013 | 30.12.2013 |
| Purchases of services | 132 | 54 | 82 |
Basware Corporation and Softaforce Oy have an agreement related to outsourcing of procurement. The agreement is market-based.
| EUR thousand | 30.9.2014 Book value |
30.9.2014 Fair value |
30.9.2013 Book value |
30.9.2013 Fair value |
|---|---|---|---|---|
| Financial assets | ||||
| Available-for-sale financial assets | 45 | 45 | 38 | 38 |
| Non-current trade and other receivables | 864 | 864 | 906 | 906 |
| Current trade and other receivables | 26 958 | 26 958 | 29 498 | 29 498 |
| Cash and cash equivalents | 60 156 | 60 156 | 15 124 | 15 124 |
| Financial liabilities | ||||
| Financial liabilities at fair value | ||||
| through profit or loss | ||||
| Interest rate derivatives - | ||||
| not in hedge accounting (level 2) | 17 | 17 | 14 | 14 |
| Financial liabilities – financial liabilities valued at | ||||
| amortized acquisition cost | ||||
| Non-current | ||||
| Loans from financial institutions, interest bearing |
1 667 | 1 667 | 5 000 | 5 000 |
| Finance lease liabilities, interest-bearing | 0 | 0 | 72 | 72 |
| Current | ||||
| Loans from financial institutions, | ||||
| interest-bearing | 3 333 | 3 333 | 3 333 | 3 333 |
| Finance lease liabilities, interest-bearing | 72 | 72 | 273 | 273 |
| Trade payables and other liabilities | 25 686 | 25 686 | 23 864 | 23 864 |
Basware Corporation reports one operating segment: Purchase to Pay, P2P. The reported segment is comprised of the entire Group, and the segment figures are consistent with the Group figures.
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 result are also reported by the location of the assets. In the annual financial statements, the geographical information of non-current assets is reported by the location of the assets.
| Net sales | 7-9/ | 7-9/ | Change, | 1-9/ | 1-9/ | Change, | 1-12/ |
|---|---|---|---|---|---|---|---|
| EUR thousand | 2014 | 2013 | % | 2014 | 2013 | % | 2013 |
| Finland | 11 525 | 11 276 | -11.5 | 35 254 | 35 912 | -1.8 | 49 324 |
| Scandinavia | 5 981 | 5 789 | 3.3 | 19 297 | 18 780 | 2.8 | 25 928 |
| Rest of Europe | 8 982 | 8 320 | 8.0 | 27 323 | 25 366 | 7.7 | 34 453 |
| Other | 3 675 | 3 297 | 11.5 | 11 135 | 10 241 | 8.7 | 13 643 |
| Group total | 30 164 | 28 682 | 5.2 | 93 010 | 90 300 | 3.0 | 123 349 |
| Net sales | 7-9/ | 7-9/ | Change, | 1-9/ | 1-9/ | Change, | 1-12/ |
|---|---|---|---|---|---|---|---|
| EUR thousand | 2014 | 2013 | % | 2014 | 2013 | % | 2013 |
| Finland | 17 110 | 16 824 | 1.7 | 53 224 | 46 251 | -21.9 | 64 570 |
| Scandinavia | 5 698 | 5 536 | 2.9 | 19 281 | 18 314 | -27.4 | 25 351 |
| Rest of Europe | 8 337 | 8 990 | -7.3 | 26 568 | 26 966 | -35.1 | 36 768 |
| Other | 3 430 | 2 766 | 24.1 | 10 320 | 8 941 | -23.4 | 11 899 |
| Sales between areas | -4 412 | -5 433 | 107.6 | -116 384 | -10 173 | 7.1 | -15 239 |
| Group total | 30 164 | 28 682 | 5.2 | 93 010 | 90 300 | -30.4 | 123 349 |
| Operating result | 7-9/ | 7-9/ | Change, | 1-9/ | 1-9/ | Change, | 1-12/ |
| EUR thousand | 2014 | 2013 | % | 2014 | 2013 | % | 2013 |
| Finland | 1 106 | 2 212 | -9.9 | 510 | 992 | -48.6 | 887 |
| Scandinavia | 182 | 434 | -58.0 | 1 056 | 1 387 | -23.9 | 2 348 |
| Rest of Europe | 957 | -454 | 177.4 | 2 178 | -321 | -778.4 | 326 |
| Other | 148 | -188 | -178.5 | 519 | -408 | -227.2 | 362 |
| Operating result between areas | -1 230 | -143 | 760.0 | -1 638 | -450 | 264.1 | -592 |
| Group total | 1 162 | 1 861 | -37.6 | 2 624 | 1 201 | 118.5 | 3 331 |
| Personnel | 7-9/ | 7-9/ | Change, | 1-9/ | 1-9/ | Change, | 1-12/ |
| (employed, on average) | 2014 | 2013 | % | 2014 | 2013 | % | 2013 |
| Finland | 483 | 510 | -5.3 | 476 | 510 | -6.7 | 510 |
| Scandinavia | 134 | 130 | 3.3 | 135 | 131 | 2.8 | 131 |
| Rest of Europe | 282 | 257 | 9.6 | 293 | 262 | 11.8 | 265 |
| India | 490 | 510 | -3.9 | 494 | 509 | -2.9 | 506 |
| Other | 67 | 73 | -8.7 | 66 | 74 | -10.4 | 73 |
| Group total | 1 456 | 1 480 | -1.6 | 1 464 | 1 487 | -1.5 | 1 485 |
The company reports revenue from products and services as follows: Network Services (e-invoicing solutions and services) and Solution Services (software solutions and services). In addition to this, the company reports revenue from products and services in tabulated format according to the breakdown of the previous reporting practice: License sales, Professional Services, Customer Support, and Automation Services.
Network services revenue is comprised of e-invoicing, paper invoice scanning services, printing service, catalog exchange, purchase message exchange, activation services, and alliance fees of e-invoicing services and financingrelated added value services.
Solution Services revenue is comprised of software revenue (SaaS revenue and license sales), software maintenance and extended customer support services (customer support), Professional Services, and start-up fees of SaaS services.
| Net sales | 7-9/ | 7-9/ | Change, | 1-9/ | 1-9/ | Change, | 1-12/ |
|---|---|---|---|---|---|---|---|
| EUR thousand | 2014 | 2013 | % | 2014 | 2013 | % | 2013 |
| Network Services | 8 010 | 6 559 | 22.1 | 24 108 | 20 422 | 18.0 | 27 829 |
| Solution Services | 22 154 | 22 125 | 0.1 | 68 903 | 69 878 | -1.4 | 95 520 |
| Group total | 30 164 | 28 682 | 5.2 | 93 010 | 90 300 | 3.0 | 123 349 |
| of which License Sales | 2 789 | 3 037 | -8.2 | 9 629 | 10 380 | -7.2 | 14 617 |
| Customer Support | 11 066 | 10 891 | 1.6 | 33 104 | 32 503 | 1.8 | 43 512 |
| Professional Services | 6 216 | 6 487 | -4.2 | 20 311 | 22 200 | -8.5 | 30 069 |
| Automation Services | 10 093 | 8 267 | 22.1 | 29 966 | 25 217 | 18.8 | 35 151 |
| EUR thousand | 1-9/2014 | 1-9/2013 | 1-9/2012 | 1-12/2013 |
|---|---|---|---|---|
| Net sales | 93 010 | 90 300 | 83 272 | 123 349 |
| Growth of net sales, % | 3.0% | 8.4% | 7.4% | 8.5% |
| EBITDA | 7 918 | 6 504 | 10 051 | 10 383 |
| % of net sales | 8.5% | 7.2% | 12.1% | 8.4% |
| Operating profit before IFRS3 amortization |
3 642 | 1 895 | 7 095 | 4 256 |
| % of net sales | 3.9% | 2.1% | 8.5% | 3.5% |
| Operating profit | 2 624 | 1 201 | 5 381 | 3 331 |
| Growth of operating profit, % | 118.5% | -77.7% | -39.0% | -59.9% |
| % of net sales | 2.8% | 1.3% | 6.5% | 2.7% |
| Result before tax | 2 124 | 1 130 | 5 514 | 3 284 |
| % of net sales | 2.3% | 1.3% | 6.6% | 2.7% |
| Result for the period | 1 505 | 350 | 3 918 | 2 605 |
| % of net sales | 1.6% | 0.4% | 4.7% | 2.1% |
| Return on equity, % | 1.7% | 0.5% | 5.3% | 2.6% |
| Return on investment, % | 3.1% | 2.3% | 7.6% | 3.9% |
| Interest-bearing liabilities | 5 072 | 8 693 | 564 | 8 632 |
| Liquid assets* | 60 156 | 15 124 | 27 739 | 13 218 |
| Gearing, % | -39.3% | -6.7% | -27.5% | -4.7% |
| Equity ratio, % | 80.6% | 73.1% | 80.2% | 77.1% |
| Total assets | 173 739 | 131 968 | 123 281 | 127 043 |
| Gross investments ** | 3 872 | 19 458 | 17 419 | 20 733 |
| % of net sales | 4.2% | 21.5% | 20.9% | 16.8% |
| Capital expenditure | 608 | 960 | 990 | 1 470 |
| % of net sales | 0.7% | 1.1% | 1.2% | 1.2% |
| Research and development costs | 12 830 | 12 571 | 12 848 | 18 184 |
| % of net sales | 13.8% | 13.9% | 15.4% | 14.7% |
| R&D personnel at end of period | 330 | 356 | 362 | 370 |
| Personnel on average during the period |
1 464 | 1 487 | 1 301 | 1 485 |
| Personnel at end of period | 1 480 | 1 476 | 1 388 | 1 472 |
| Increase in personnel, % | 0.3% | 6.3% | 28.6% | 3.4% |
*) Includes cash and cash equivalents
**) Includes acquisitions and capitalized R&D costs
| 1-9/2014 | 1-9/2013 | 1-9/2012 | 1-12/2013 | |
|---|---|---|---|---|
| Earnings per share, basic | 0.11 | 0.03 | 0.31 | 0.20 |
| Earnings per share, diluted | 0.11 | 0.03 | 0.31 | 0.20 |
| Equity per share | 9.90 | 7.46 | 7.56 | 7.62 |
| Price per earnings (P/E) | 369.94 | 796.91 | 73.74 | 123.45 |
| Share price performance, share issue | ||||
| adjusted | ||||
| lowest price | 23.50 | 18.70 | 16.70 | 16.75 |
| highest price | 41.00 | 23.10 | 24.00 | 25.60 |
| average price | 34.89 | 19.39 | 20.68 | 20.35 |
| closing price | 39.35 | 21.70 | 22.50 | 25.03 |
| Share issue adjusted number of shares 30.9 | 14 221 229 | 12 931 229 | 12 931 229 | 12 931 229 |
| Market capitalization at end of period | 556 661 863 | 278 812 906 | 288 547 965 | 321 771 012 |
| Share issue adjusted number of | ||||
| traded shares | 4 012 169 | 679 872 | 1 242 210 | 1 723 866 |
| % of average number of shares | 28.4% | 5.3% | 9.7% | 13.4% |
| Number of shares | ||||
| - average during the period* | 14 146 294 | 12 848 521 | 12 841 083 | 12 848 540 |
| - at end of the period | 14 221 229 | 12 931 229 | 12 931 229 | 12 931 229 |
| - average during the period, diluted | 14 130 135 | 12 848 521 | 12 841 083 | 12 848 540 |
*Excluding treasury shares
Basware Corporation's share capital totaled EUR 3 528 368.70 (EUR 3 528 368.70) at the end of the period and the number of shares was 14 221 229 (12 931 229).
The company's Annual General Meeting of February 14, 2014, authorized the Board of Directors of Basware to decide on the issue of new shares deviating from the shareholders' pre-emptive subscription rights. The company carried out a share issue of up to 1 290 000 new Basware shares to a limited number of international institutional investors in an accelerated book-built offering deviating from shareholders' pre-emptive subscription rights on September 4, 2014. The offered shares corresponded with approximately 9.98% of all Basware shares and votes before the share issue. The subscription price was set at EUR 33.50 per share, amounting to total proceeds of approximately EUR 43.2 million before commissions and expenses. The 1 290 000 shares issued were registered with the Finnish Trade Register on September 11, 2014.
Basware had 13 815 (13 840) shareholders at the end of the period, including nominee-registered holdings (11). Nominee-registered holdings accounted for 19.1 percent (11.8%) of the total number of shares.
Basware Corporation holds 74 803 (82 708) of its own shares, corresponding to approximately 0.6 percent (0.6%) of the total number of shares.
Additional information on shareholdings of the Executive Team and Board of Directors and major shareholders is available on the company's investor site athttp://www.basware.com/investors.
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