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Basware Oyj — Interim / Quarterly Report 2012
Apr 13, 2012
3257_rns_2012-04-13_a7bbdfbe-dbf4-4762-b08e-526ee5b74b5d.pdf
Interim / Quarterly Report
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basware
Interim Report
April 13, 2012
BASWARE INTERIM REPORT JANUARY 1 – MARCH 31, 2012 (IFRS)
SUMMARY
January-March Q1: Demand for services grew stronger
- Net sales EUR 27 435 thousand (EUR 26 058 thousand) – growth 5.3 percent
- Operating profit EUR 1 822 thousand (EUR 2 957 thousand) – decrease of 38.4 percent
- Operating profit 6.6 percent of net sales (11.3%)
- Growth of Automation Services (SaaS and e-Invoicing) 46.5 percent
- The estimated revenue to be recognized for current Automation Services agreements in production in the next twelve months is EUR 21.8 million, growth from previous quarter 19.4 percent
- Recurring revenue (including Maintenance and Automation Services) 55.5% (48.3%) of net sales
- Cash flow from operating activities EUR 10 634 thousand (EUR 14 623 thousand)
- Earnings per share (diluted) EUR 0.11 (0.19) – decrease of 38.2 percent
Basware expects, as earlier estimated, its net sales for 2012 to grow from the previous year. Operating profit (EBIT) for 2012 is expected to be between EUR 8-18 million.
The interim report is unaudited.
GROUP KEY FIGURES
| EUR thousand | 1–3/2012 | 1–3/2011 | Change, % | 1–12/2011 |
|---|---|---|---|---|
| Net sales | 27 435 | 26 058 | 5.3 | 107 750 |
| EBITDA | 3 188 | 4 169 | -24.0 | 17 284 |
| Operating profit before IFRS3 amortization | 2 455 | 3 458 | -29.0 | 14 290 |
| Operating profit | 1 822 | 2 957 | -38.4 | 12 280 |
| % of net sales | 6.6% | 11.3% | 11.4% | |
| Profit before tax | 1 918 | 2 930 | -34.5 | 12 332 |
| Profit for the period | 1 476 | 2 268 | -34.9 | 9 671 |
| Return on equity, % | 6.0% | 11.4% | 11.6% | |
| Return on investment, % | 8.0% | 14.7% | 14.9% | |
| Liquid assets *) | 34 450 | 48 295 | -28.7 | 42 977 |
| Gearing, % | -35.2% | -50.7% | -42.3% | |
| Equity ratio, % | 70.5% | 71.0% | 81.9% | |
| Earnings per share, EUR | 0.11 | 0.19 | -38.3 | 0.76 |
| Earnings per share (diluted), EUR | 0.11 | 0.19 | -38.2 | 0.76 |
| Parent company's shareholders' equity per share, EUR | 7.47 | 7.16 | 4.3 | 7.76 |
*) Includes cash, cash equivalents and financial assets at fair value through profit or loss
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
basware
Interim Report
April 13, 2012
REPORTING
As of the first quarter in 2012 Basware Corporation reports one operating segment: Purchase to Pay, P2P.
Basware reports income for products and services as follows: License sales, Professional Services, Maintenance and Automation Services. License sales consists of Purchase to Pay product family together with payment, financial planning and reporting solutions sold only in Finland. Automation Services include e-Invoicing, scanning services, printing services, catalogue management, purchase message exchange, activation services and SaaS services.
Basware reports the estimated revenue to be recognized for current Automation Services agreements in production in the next twelve months. Automation Services agreements typically expand several years or are valid until further notice.
As geographic information Basware reports geographical areas Finland, Scandinavia, rest of the Europe and Other. In the geographical information net sales is split by customer's location. Net sales and operating profit are also reported by the location of the assets. In annual financial statements the geographical information of non-current assets is reported by the location of the assets.
Basware issued a stock exchange release of changes in external reporting in 2012 on March 19, 2012.
CEO Esa Tihilä comments in conjunction with the Interim Report:
"I am satisfied with our performance in the first quarter and in particular the strong growth in Automation Services as well as the fact that recurring revenue accounted for as much as 55.5% of the company's net sales. The company is undergoing a transformation from a software company into a service company, which requires additional investments and changes our operating methods, solutions, and services. We are aiming at completely new customer groups through segmented customer management and portfolio of products and services. Our strategic goal is to become the world's leading e-Invoice operator.
During the first quarter, we concluded several significant deals in all of our geographic segments. With regard to the service business, the demand increased on the whole, and demand shifted from license sales towards Software as a Service (SaaS) solutions. The deals made also included virtual operator agreements as new distribution channel models. Automation Services have already increased their share to 19.8% of net sales. Recurring revenue (Maintenance and Automation Services) continued to account for an increasing share of net sales, totaling 55.5% of net sales.
The transaction volume processed by Automation Services continued to grow favorably during the first quarter, increasing by 77.1%. Increasing transaction volumes are essential to the continuous development of Automation Services.
During the first quarter, our net sales increased by 5.3% to EUR 27.4 million, with our operating profit amounting to 6.6% of net sales, or EUR 1.8 million. License sales' share of net sales decreased compared to the previous year, with the majority of deals being based on SaaS solutions. The realization of the investments required for the company's growth as planned contributed to the decrease in operating profit. These include increasing the Volume Sales function and Volume Delivery implementation consultation, investments in the growth of Automation Services and launch of the Basware Alusta platform technology.
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
basware
Interim Report
April 13, 2012
Basware launched the Alusta platform technology during the first quarter of 2012. The Alusta technology combines Basware's financial process competence and cloud services with usage-based pricing, guaranteeing organizations of all sizes easy connectivity through an open network. The company's next-generation product suite is also offered as a service. The Alusta technology supports Basware's strategic growth and will improve the company's competitiveness.
The company will continue to follow its strategy of focusing increasingly on the service business, selling software as a service instead of licenses.
Market outlook and operating environment
Market estimates released in April 2012 expect the software market to grow 6.2 percent globally (forecast unchanged) and 8.0 percent in the U.S. (forecast unchanged). The entire IT services market is expected to grow by 4.7 percent globally (forecast unchanged) and by 7.3 percent in the U.S. (previous estimate 6.8%) in 2012. According to research companies, the software market is expected to grow at a rate of 7.0 percent globally, IT services by 5.6% and the IT market as a whole by 7.3 percent.
The number of acquisitions and partnerships has increased in the market. Companies active in the market are trying to strengthen their supplier networks and expand geographically. Consolidation is expected to continue in the business environment, with the role of services growing in companies' portfolios. Basware continues active analyzing of acquisition targets especially in European e-Invoicing market according to Basware's strategy.
The launch of Basware's next generation solutions during the first quarter in 2012 will further improve the competitiveness of Basware's solutions and services. Through the acquisition of German e-Invoicing operator we gained innovative technology, which will improve the competitiveness of the company. Also Automation Services will have a positive impact on the competitiveness, improving the predictability and transparency of the company's net sales and profitability in the long term.
Basware aims to become a leading company in e-invoicing worldwide. E-Invoicing and the supporting services are targeted to connect suppliers and buyers also outside of Basware's existing software customer base, leading into a higher potential. The penetration rate of e-Invoicing is low, between 5-30 percent depending on the country, which creates a solid foundation for the future growth of Basware Automation Services.
The role of offshoring operations will continue to grow in the company's strategy. R&D and Automation Services operations at Basware's Indian office have already succeeded in gaining a significant role. The company is surveying the development of offshoring in order to improve profitability also with regard to new service business operations and internal support functions. The company is also investigating the possibility of new geographical regions in expanding offshoring.
NET SALES
Basware Group's net sales for the period increased by 5.3 percent to EUR 27 435 thousand (EUR 26 058 thousand). The growth in comparable currencies was 4.6 percent.
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
basware
Interim Report
April 13, 2012
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Information of products and services
| Net sales (EUR thousand) | 1–3/2012 | 1–3/2011 | Change, % | 1–12/2011 |
|---|---|---|---|---|
| License Sales | 4 077 | 4 814 | -15.3 | 20 874 |
| Maintenance | 9 779 | 8 879 | 10.1 | 36 247 |
| Professional Services | 8 137 | 8 650 | -5.9 | 34 179 |
| Automation Services | 5 442 | 3 715 | 46.5 | 16 449 |
| Group total | 27 435 | 26 058 | 5.3 | 107 750 |
The Company's license sales decreased by 15.3 percent during the period, accounting for 14.9 percent (18.5%) of net sales. SaaS sales, reported in Automation Services, grew by 22.0 percent. Maintenance revenue increased by 10.1 percent and accounted for 35.6 percent (34.1%) of net sales. Professional Services revenue decreased by 5.9 percent and accounted for 29.7 percent (33.2%) of net sales.
During the period, Automation Services increased by 46.5 percent and accounted for 19.8 percent (14.3%) of net sales. The transaction volume processed by the Automation Services business was 7.8 million during the reporting period, growth of 77.1 percent. The estimated revenue to be recognized for current Automation Services agreements in the next twelve months is EUR 21.8 million (growth of 19.4 percent from the estimate made at the end of last quarter).
The international share of Basware's net sales was 56.1 percent (54.5%) in the period. International operations grew by 8.4 percent.
FINANCIAL PERFORMANCE
Basware's operating profit for the period decreased by 38.4 percent to EUR 1 822 thousand (EUR 2 957 thousand). Operating profit represented 6.6 percent (11.3%) of net sales.
Basware recognized a provision of EUR 1 203 thousand related to the restructuring of operations in the fourth quarter of 2011. Negotiations on the restructuring have been completed, and the provision will be fully utilized during the first half of the year. The purpose of the arrangement is to allow possibilities for additional investments needed for strategic growth markets.
The Company's fixed costs were EUR 22 244 thousand (EUR 19 957 thousand) in the period, up 11.5 percent on the corresponding period the previous year. Personnel costs made up 72.3 percent (73.8%) or EUR 16 072 thousand (EUR 14 738 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 first quarter amounted to EUR 1 213 thousand (EUR 984 thousand) on the balance sheet.
The research and development expenses amounted to EUR 4 251 thousand (EUR 3 834 thousand), or 15.5 percent (14.7%) of net sales. The expenses grew by 10.9 compared with the corresponding quarter in previous year. Research and development expenses capitalized during the period amounted to EUR 1 162 thousand (EUR 809 thousand). Basware's research and development costs for the period totaled EUR 3 089 thousand (EUR 3 025 thousand), or 11.3 percent (11.6%) of net sales.
The Company's finance income and finance expenses were EUR 96 thousand (EUR -26 thousand). Profit before tax was EUR 1 918 thousand (EUR 2 930 thousand) and profit for the period was EUR 1 476 thousand (EUR 2 268 thousand) or 5.4 percent (8.7%) of net sales. Taxes for the period amounted to EUR 442 thousand (EUR 662 thousand). Undiluted earnings per share were EUR 0.11 (EUR 0.19).
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
basware
Interim Report
April 13, 2012
FINANCE AND INVESTMENTS
Basware Group's total assets on the balance sheet at the end of the period were EUR 136 033 thousand (EUR 129 048 thousand). The Company's cash and liquid assets were EUR 34 450 thousand (EUR 48 295 thousand), of which cash and cash equivalents were EUR 34 450 thousand (EUR 33 251 thousand).
Equity ratio was 70.5 percent (71.0%) and gearing was -35.2 percent (-50.7%). The Company's interest-bearing liabilities totaled EUR 643 thousand (EUR 1 789 thousand), of which current liabilities accounted for EUR 178 thousand (EUR 1 789 thousand). Return on investment was 8.0 percent (14.7%) and return on equity 6.0 percent (11.4%).
Cash flows from operating activities were EUR 10 634 thousand (EUR 14 623 thousand). Cash flows from investments were EUR -13 453 thousand (EUR -1 224 thousand).
The Company's capital expenditure, resulting from regular additional and replacement investments required for growth, was EUR 312 thousand (EUR 411 thousand) in the period. Gross investments which include - in addition to those mentioned above - the acquisition as well as capitalized research and development expenses totaled EUR 13 682 thousand (EUR 1 219 thousand).
Amortization of intangible assets totaled EUR 1 188 thousand (EUR 1 086 thousand). There are no indications of impairments of assets.
On January 17, 2012 Basware acquired the entire share capital of e-Invoicing operator First Businesspost GmbH. The acquisition price was paid in cash in connection with the closing of the acquisition so that 20 percent of the debt free price was paid to an escrow account. The escrow agreement is in place until the end of January 2013. Basware consolidated First Businesspost's figures into its net sales and profit as of January 1, 2012.
The acquisition price to be allocated amounts to approximately EUR 12.5 million. EUR 2.6 million associated with customer relationships and associated with acquired technology has been allocated to intangible assets, taking deferred tax liabilities into consideration. The value associated with customer relationships is amortized in seven years and value associated with technology in five years, starting in the first quarter of 2012. The purchase price includes approximately EUR 9.1 million of goodwill. The allocation of the purchase price also takes into account the deferred tax assets of EUR 0.8 million related to the utilization of retained losses. The allocation of the acquisition purchase price is preliminary.
The Annual General Meeting decided to authorize the Board of Directors to decide on repurchase of company's own shares in accordance with the proposal of the Board of Directors. By virtue of the authorization, the Board of Directors is entitled to decide on repurchasing a maximum of 1 290 000 company's own shares. The Repurchase Authorization shall be valid until 30 June 2013. A separate stock exchange release has been sent on February 16, 2012. The company has repurchased 27 219 own shares by March 31, 2012 and the total amount of own shares held by the company on March 31, 2012 is 84 980.
RESEARCH, DEVELOPMENT AND NEW PRODUCTS
The research and development expenses amounted to EUR 4 251 thousand (EUR 3 834 thousand), or 15.5 percent (14.7%) of net sales. The expenses grew by 10.9% compared with the corresponding quarter in previous year. Research and development expenses capitalized during the period amounted
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
basware
Interim Report
April 13, 2012
to EUR 1 162 thousand (EUR 809 thousand). Basware's research and development costs for the period totaled EUR 3 089 thousand (3 025 thousand), or 11.3 percent (11.6%) of net sales.
The development of the next generation of software had an effect on the amount of capitalized research and development costs.
Basware Alusta, a cloud-based platform for business-to-business transaction collaboration, was launched on February 29. Basware Alusta is a flexible, new architecture that is designed to bring together Basware's B2B process knowledge with its cloud services optimized to ensure easy connectivity with the Open Network to companies of all sizes. Basware Alusta is also strongly offered as a Service and supports Basware's strategic transformation to a services company. It will also have a positive impact on the competitiveness of Basware in the long run.
A total of 325 (270) people worked in Products of which 149 people in India at the end of March 2012. The number of the personnel in the Products unit is expected to grow moderately in the future.
PERSONNEL
Basware employed 1 241 (959) people on average during the first quarter and 1 245 (981) at the end of the period. The number of personnel increased by 264 persons and by 26.9 percent compared with the same period the previous year. The increase in the number of personnel is mainly due to the increase in the number of employees in the Indian unit and the personnel joining Basware through the acquisition of a German e-Invoice operator.
Geographical division of personnel:
| Personnel (employed, on average) | 1–3/2012 | 1–3/2011 | Change, % | 1–12/2011 |
|---|---|---|---|---|
| Finland | 463 | 431 | 7.3 | 454 |
| Scandinavia | 126 | 120 | 5.3 | 119 |
| Rest of the Europe | 169 | 136 | 24.2 | 137 |
| India | 415 | 208 | 99.4 | 284 |
| Other | 68 | 63 | 8.5 | 64 |
| Group total | 1 241 | 959 | 29.5 | 1 058 |
Basware recognized a provision of EUR 1 203 thousand related to the restructuring of operations in the fourth quarter of 2011. Negotiations on the restructuring have been completed, and the provision will be fully utilized during the first half of the year. The purpose of the arrangement is to allow possibilities for additional investments needed for strategic growth markets.
The share of personnel working in foreign units has increased compared with the previous year. At the end of the period, 63.3 percent (56.1%) of Basware personnel worked outside of Finland and 36.7 percent (43.9%) in Finland. 10.8 percent of the personnel work in sales and marketing, 56.6 percent in consulting and services, 26.1 percent in Products, and 6.4 percent in administration.
The average age of employees is 34.2 (35.4) years. Of the employees, 26.6 percent have a Master's degree and 32.5 percent have a Bachelor's degree. Women account for 24.7 percent of employees, men for 75.3 percent. For incentive purposes, the company has a bonus program that covers all employees.
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
basware
Interim Report
April 13, 2012
The short-term remuneration of the top management consists of salary, fringe benefits and a possible annual bonus based on performance. Long-term remuneration of the top management consists of warrants and a share-based incentive scheme. The bonus based on performance is no more than 50 percent of annual basic salary. The bonus based performance percentage is not limited in the CEO's contract of employment. The bonus is determined on the basis of the attainment of goals supporting to the company's growth and profitability according to its strategy, and personal objectives. The Board of Directors monitors the fulfillment of the performance and result criteria of the incentive scheme twice a year and approves the bonus to be paid.
A share-based incentive scheme was in use in 2009–2011. The possible reward of the share-based incentive scheme for the vesting period 2009–2011 is based on Basware Corporation's earnings per share (EPS). The bonus for the vesting period 2009 was paid in December 2011, the bonus for the vesting period 2010 will be paid in December 2012, and the bonus for the vesting period 2011 in December 2013, partially as shares in the company and partially in cash. The bonus of the share-based incentive scheme is paid two years after the end of the vesting period, and therefore no other restrictions are associated with the ownership of the shares received.
The Board of Directors of Basware Corporation has approved a new share-based incentive plan for the Basware Group key personnel on February 17, 2012. The aim of the plan is to combine the objectives of the shareholders and the key personnel in order to increase the value of the company, commit the key personnel to the company, and offer them a competitive reward plan based on shareholding in the company. The Board of Directors encourages the Basware Executive Team members to hold shares in the company equaling the value of annual gross base salary.
The system includes three earning periods, calendar years 2012, 2013 and 2014. The system comprises annual earning periods 2012, 2013, and 2014 and fixed earning period 2012–2014.
Members of Basware Executive Team may be allocated additional shares without consideration against shareholding during the earning period 2012–2014.
The Board of Directors decides on the earnings criteria and related targets separately for each annual earning period at the beginning of the earning period. There are employment-related conditions for eligibility for reward payment.
A separate stock exchange release has been issued on February 17, 2012.
GEOGRAPHICAL INFORMATION
Geographical division of net sales and operating profit is presented in the summary of financial statements and notes. As geographic information Basware reports geographical areas Finland, Scandinavia, rest of the Europe and Other.
Basware closed several significant agreements during the first quarter across all geographical regions. Demand for services grew as a whole and demand for license sales is shifting towards services delivered as service. The deals include also virtual operator agreements representing new channel distribution models.
Basware sent out five stock exchange releases in the first quarter about agreements delivered as service closed in Finland, one of those being a virtual operator agreement. One stock exchange release was sent out about a Scandinavian service agreement, two releases about service agreements in Rest of the Europe and one release about a service agreement in the Other area.
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
basware
Interim Report
April 13, 2012
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OTHER EVENTS OF THE PERIOD
Strategy
Basware continues the realization of the 4-year-period strategy published in January 2011. The company focuses on strong international growth through organic growth and acquisitions.
The company aims to be the leading e-Invoice company worldwide. Acquisitions will support the growth of the e-Invoicing service. Its annual volume in 2011 amounted to 20.8 million transactions. The e-Invoicing market is growing strongly, and Basware aims to reach the 100 million invoice mark by the end of 2014. Through the acquisition of a German e-Invoicing operator in January 2012 Basware is able to complement its offering through innovative technology to turn also accounts receivable into electronic format. This expands our growth potential and delivers value also for our existing customers globally.
We restructured our organization during the fourth quarter of 2011 and adopted a globally managed function-based organization as of January 1, 2012. The change in the operating model allows Basware to implement its strategy more efficiently, clarify the functions and utilize the growth opportunities offered by the market. We will seek entirely new customer groups with segment-based customer account management and product and service portfolio. According to Basware's view, the significance of the service concept will continue its solid growth in the future as well, which is the reason for marketing the company's next-generation product concept strongly also as services. Basware has adjusted its pricing model to be very flexible according to customer needs. From now on, software solutions will be available to customers with one-time license fee, monthly subscription, and according to the SaaS model.
The role of offshoring operations will continue to grow in the company's strategy. R&D and Automation Services operations at Basware's Indian office have already succeeded in gaining a significant role. The company is surveying the development of off-shoring in order to improve profitability also with regard to new service business operations and internal support functions. The company is also investigating the possibility of new geographical regions in expanding offshoring.
The new strategic guidelines facilitate strong international growth and positive development of operating profit margin. The long term target is to grow annually 15-30 percent in net sales and more than 50 percent in Automation Services. The company's long-term target for operating profit margin is 15-20 percent improving towards the end of the period.
A separate stock exchange release on the strategy update was issued on January 25, 2011 and on the organization reform on October 31, 2011.
SHARE AND SHAREHOLDERS
Basware Corporation's share capital totaled EUR 3 528 368.70 at the end of the period and the number of shares was 12 931 229.
The Board of Directors of Basware Corporation has decided to start repurchase of own shares on February 16, 2012. Maximum of 100 000 company's own shares can be purchased representing 0.77 percent of the total amount of all shares owned by the company. The Annual General Meeting decided to authorize the Board of Directors to decide on repurchase of company's own shares on February 16, 2012. The repurchasing will be started earliest on February 27, 2012 and finalized by May 31, 2012. The repurchased shares will be mainly used as a part of Basware Corporation's incentive program.
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
basware
Interim Report
April 13, 2012
The company's own shares shall be repurchased otherwise than in proportion to the holdings of the shareholders by using the non-restricted equity through public trading on NASDAQ OMX Helsinki Ltd at the market price prevailing at the time of acquisition. The shares shall be repurchased and paid for in accordance with the rules of NASDAQ OMX Helsinki Ltd and Euroclear Finland Ltd.
A separate stock exchange release has been issued on the Board authorizations and other resolutions of the Annual General Meeting of Shareholders on February 16, 2012.
Share price and trade
During the reporting period, the highest price of the share was EUR 19.95 (EUR 27.00), the lowest was EUR 16.70 (EUR 23.02) and the closing price was EUR 19.26 (EUR 26.40). The average price of the share was EUR 19.04 (EUR 25.26) during the period.
A total of 444 503 (2 625 376) shares were traded during the period, equivalent to 3.5 percent (21.5%) of the average number of shares. Market capitalization with the period's closing price on March 31, 2012 was EUR 247 418 756 (EUR 337 933 966).
Shareholders
Basware had 14 964 (15 518) shareholders on March 31, 2012 including nominee-registered holdings (10). Nominee-registered holdings accounted for 12.1 percent (11.1%) of the total number of shares.
The company holds 84 980 Basware Corporation shares, corresponding to approximately 0.7% of all shares in the company.
Share holdings of the Executive Team and Board of Directors members
According to the share register maintained by Euroclear Finland Ltd, CEO Esa Tihilä holds 6 225 shares in Basware Corporation, Matti Copeland 2 771 shares, Mika Harjuaho 4 375 shares, Steve Muddiman 4 375 shares and Jukka Virkkunen 1 875 shares on March 31, 2012. Other members of the Executive Team did not hold shares in Basware Corporation.
According to the share register maintained by Euroclear Finland Ltd, Hannu Vaajoensuu held 757 976, Pentti Heikkinen 2 609, Ilkka Sihvo 881 675, Eeva Sipilä 1 593 and Anssi Vanjoki 5 000 shares in Basware Corporation on March 31, 2012.
GOVERNANCE
The Annual General Meeting of Shareholders on February 16, 2012, confirmed the number of Board members as five. The Annual General Meeting resolved to agree on the proposal to elect Ilkka Sihvo, Pentti Heikkinen, Eeva Sipilä, Hannu Vaajoensuu and Anssi Vanjoki as 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 Ilkka Sihvo 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.
Authorizing the Board of Directors to decide on the repurchase of the company's own shares
The Annual General Meeting decided to authorize the Board of Directors to decide on repurchase of company's own shares in accordance with the proposal of the Board of Directors. By virtue of the
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
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April 13, 2012
authorization, the Board of Directors is entitled to decide on repurchasing a maximum of 1 290 000 company's own shares. The company's own shares shall be repurchased otherwise than in proportion to the holdings of the shareholders by using the non-restricted equity through public trading on NASDAQ OMX Helsinki Ltd at the market price prevailing at the time of acquisition. The shares shall be repurchased and paid for in accordance with the rules of NASDAQ OMX Helsinki Ltd and Euroclear Finland Ltd. The shares shall be repurchased for use as consideration in possible acquisitions or other arrangements related to the company's business, as financing for investments or as part of the company's incentive program or to be held by the company, to be conveyed by other means or to be cancelled. The Board of Directors shall decide on other terms and conditions related to the repurchase of the company's own shares. The Repurchase Authorization shall be valid until 30 June 2013. A separate stock exchange release has been sent on February 16, 2012.
Authorizing the Board of Directors to decide on share issue as well as on the issuance of options and other special rights entitling to shares
The Annual General Meeting decided to authorize the Board of Directors to decide on issuing new shares and/or conveying the company's own shares held by the company and/or granting special rights entitling to shares pursuant to Chapter 10, Section 1 of the Finnish Companies Act in accordance with the proposal of the Board of Directors.
The Board of Directors shall decide on all other related to the authorization. The authorizations shall be valid until 30 June 2013. A separate stock exchange release has been sent on February 16, 2012.
The company issues a Corporate Governance Statement for 2011, composed in accordance with Recommendation 51 of the new Corporate Governance Code and Chapter 2, Section 6 of the Finnish Securities Market Act. The Corporate Governance Statement is issued separately from the company's annual report.
The Corporate Governance Statement can be read at: http://www.basware.com/Investors/corporate_governance/Pages/default.aspx
Basware Executive Team as of April 1, 2012
Esa Tihilä, CEO; Matti Copeland, Senior Vice President, Strategy; Mika Harjuaho, CFO; Henrik Hasselbalch, Senior Vice President, Professional Services; Mari Heusala, Senior Vice President, HR&Dev; Jorma Kemppainen, Senior Vice President, Products; Pekka Lindfors, Senior Vice President, Volume Sales; Steve Muddiman, Senior Vice President, Global Marketing; Riku Roos, Senior Vice President, Automation Services; Matti Rusi, Senior Vice President, Support and Jukka Virkkunen, Senior Vice President, Enterprise Sales.
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.
During 2012, the company will be undergoing a strong transformation from a software company into a service company, which will change our operating methods, solutions, and services.
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
basware
Interim Report
April 13, 2012
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The global economy and markets are unstable, which may result in a decrease in the demand for license sales and services. In addition, the conversion of license sales to SaaS solutions may have an increasingly negative effect on the growth in net sales, especially with the company's next-generation software family. The shift in demand from license sales towards SaaS solutions will support the long-term growth targets of the Automation Services business in the future.
Competitiveness in acquiring new customers is fundamental to the growth pursued by the company. Basware will publish a next-generation software suite during the first quarter of 2012. The next-generation software family aims to ensure Basware's product leadership in Purchase to Pay software and services as well as increase the number of new customers.
Securing the annual maintenance and service revenue generated by the existing software customers is the foundation of the company's profitable growth. Therefore, the company aims to ensure that existing customers migrate to next-generation software and services in future financial periods in a controlled way.
The long-term target in Automation Services is annual growth of more than 50 percent. SaaS and e-invoicing are scalable business models with a high business potential. Achieving the targeted growth requires continuous strong growth in the number of customers and transaction volumes. We restructured our organization during the last quarter of 2011 and adopted a globally directed function-based organization. The change of the business model allows Basware to better utilize the growth opportunities offered by the market.
Basware has complemented its organic growth through acquisitions in line with its strategy. Ensuring the success of acquisitions is fundamental to the company's profitable growth. In implementing acquisition projects, the aim is to follow due diligence and utilize the company's internal and external expertise in the planning phase, take over phase and when integrating the acquired functions into the company's operations.
Managing the increasing costs through the cost benefits offered by offshoring sites is an essential part of the continuous improvement of the company's profitability. Our Indian branch has grown at a rapid rate during 2011, and we are surveying the possibilities of new business service functions and internal support functions to operate from India. We are also investigating new geographical areas.
Goodwill is tested for impairment during the last quarter in 2011. According to testing for asset impairment, goodwill has not been impaired, and there were no indications of impairment.
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
Henrik Hasselbalch, 47, has been appointed Senior Vice President, Professional Services and a Member of Basware Executive Team as of April 1, 2012. He reports to CEO Esa Tihilä.
FUTURE OUTLOOK
Operating environment and market outlook
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
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Market estimates released in April 2012 expect the software market to grow 6.2 percent globally (forecast unchanged) and 8.0 percent in the U.S. (forecast unchanged). The entire IT services market is expected to grow by 4.7 percent globally (forecast unchanged) and by 7.3 percent in the U.S. (previous estimate 6.8%) in 2012. According to research companies, the software market is expected to grow at a rate of 7.0 percent globally, IT services by 5.6% and the IT market as a whole by 7.3 percent.
Basware strategic goal is to grow more than 50% in Automation Services. During 2012, the company will be undergoing a strong transformation from a software company into a service company, which will change our operating methods, solutions, and services.
The world economy and markets are unstable, which may result in a decrease in license sales and demand for services. In addition, the conversion of license sales to SaaS solutions may have an increasingly negative effect on the growth in net sales, especially in the first quarter when Basware Alusta P2P collaboration tool is launched. The shift in demand from license sales towards SaaS solutions will support the long-term growth targets of the Automation Services business in the future.
Outlook for 2012
The performance of the first quarter of the year gives a good starting point to reach the growth targets of Automation Services during the rest of the year. Demand for recurring services (Maintenance and Automation Services) is expected to continue strong and demand for license sales is expected to shift towards services delivered as SaaS.
Additional investments needed for transformation and growth of Automation Services will be realized according to plans along the year as defined in Basware strategy.
Basware estimates that net sales for 2012 will grow from previous year and operating profit is estimated to reach EUR 8-18 million.
Espoo, Finland, April 13, 2012
BASWARE CORPORATION
Board of Directors
For more information, please contact
CEO Esa Tihilä, Basware Corp.,
Tel. +358 40 480 7098
Analyst and Press Briefing
Basware arranges today, April 13, 2012 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 Esa Tihilä and CFO Mika Harjuaho will comment on the events and financial performance of the quarter. Welcome.
A conference call for analysts will take place on April 13 at 3 p.m. EEST:
Preregistration is required to listen to the conference call:
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
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April 13, 2012
https://emea.directeventreg.com/registration/event/70450316
Preregistration is required to see the presentation during the conference call:
http://webeventservices.reg.meeting-stream.com/62160_basware/
Distribution:
NASDAQ OMX Helsinki Ltd
Key media
www.basware.com
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
basware
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April 13, 2012
SUMMARY OF FINANCIAL STATEMENTS AND NOTES JANUARY 1 – MARCH 31, 2012
Basis of preparation:
The Interim Report has been prepared in accordance with the IAS 34 Interim Reports standard. The company has adopted certain new or revised IFRS standards and IFRIC interpretations at the beginning of the financial period as described in the Financial Statements for 2011. However, the adoption of these new and amended standards has not yet had an effect on the reported figures in practice. In other respects, the same accounting policies have been followed as in the Financial Statements for 2011 Key indicator calculations remain unchanged and have been presented in the 2011 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 Interim Report, 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.
GROUP INCOME STATEMENT
| EUR thousand | 1.1.–31.3.2012 | 1.1.–31.3.2011 | Change, % | 1.1.–31.12.2011 |
|---|---|---|---|---|
| NET SALES | 27 435 | 26 058 | 5.3 | 107 750 |
| Other operating income | 58 | 42 | 36.1 | 172 |
| Materials and services | -2 061 | -1 948 | 5.7 | -7 788 |
| Employee benefits expense | -16 072 | -14 738 | 9.1 | -61 575 |
| Depreciation and amortization | -1 366 | -1 237 | 10.4 | -5 004 |
| Other operating expenses | -6 171 | -5 219 | 18.2 | -21 275 |
| Operating profit | 1 822 | 2 957 | -38.4 | 12 280 |
| Finance income | 146 | 51 | 188.1 | 510 |
| Finance expenses | -50 | -77 | -35.3 | -458 |
| Profit before tax | 1 918 | 2 930 | -34.5 | 12 332 |
| Tax on income from operations | -442 | -662 | -33.2 | -2 661 |
| PROFIT FOR THE PERIOD | 1 476 | 2 268 | -34.9 | 9 671 |
| Other comprehensive income: | ||||
| Exchange differences on translating foreign operations | -2 | -339 | -99.4 | 368 |
| Income tax relating to components of other comprehensive income | -8 | 170 | -104.7 | 54 |
| Other comprehensive income, net of tax | -10 | -170 | -94.1 | 422 |
| TOTAL COMPREHENSIVE INCOME | 1 466 | 2 098 | -30.1 | 10 093 |
| Profit attributable to: | ||||
| Equity holders of the parent company | 1 476 | 2 268 | -34.9 | 9 671 |
| 1 476 | 2 268 | -34.9 | 9 671 | |
| Total comprehensive income attributable to: | ||||
| Equity holders of the parent company | 1 466 | 2 098 | -30.1 | 10 093 |
| 1 466 | 2 098 | -30.1 | 10 093 | |
| Earnings per share (undiluted), EUR | 0.11 | 0.19 | -38.3 | 0.76 |
| Earnings per share (diluted), EUR | 0.11 | 0.19 | -38.2 | 0.76 |
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
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GROUP BALANCE SHEET
| EUR thousand | 31.3.2012 | 31.3.2011 | Change, % | 31.12.2011 |
|---|---|---|---|---|
| ASSETS | ||||
| NON-CURRENT ASSETS | ||||
| Intangible assets | 23 018 | 17 954 | 28.2 | 19 208 |
| Goodwill | 41 530 | 32 065 | 29.5 | 32 210 |
| Tangible assets | 1 372 | 1 146 | 19.7 | 1 244 |
| Available-for-sale investments | 38 | 38 | 0.0 | 38 |
| Long-term trade and other receivables | 1 | 0 | 0.0 | 0 |
| Deferred tax assets | 3 392 | 2 095 | 61.9 | 2 680 |
| Non-current assets | 69 350 | 53 298 | 30.1 | 55 379 |
| CURRENT ASSETS | ||||
| Inventories | 138 | 152 | -9.0 | 143 |
| Trade and other receivables | 31 062 | 27 032 | 14.9 | 23 091 |
| Income tax receivables | 1 032 | 271 | 280.8 | 374 |
| Financial assets at fair value through profit or loss | 0 | 15 043 | -100.0 | 0 |
| Cash and cash equivalents | 34 450 | 33 251 | 3.6 | 42 977 |
| Current assets | 66 683 | 75 750 | -12.0 | 66 586 |
| TOTAL ASSETS | 136 033 | 129 048 | 5.4 | 121 966 |
| EQUITY AND LIABILITIES | ||||
| SHAREHOLDERS' EQUITY | ||||
| Share capital | 3 528 | 3 516 | 0.3 | 3 528 |
| Issue of shares | 0 | 334 | -100.0 | 0 |
| Share premium account | 1 187 | 1 187 | 0.0 | 1 187 |
| Own shares | -932 | -629 | -48.3 | -429 |
| Fair value reserve and other reserves | 62 503 | 62 419 | 0.1 | 62 516 |
| Translation differences | -1 276 | -1 857 | 31.3 | -1 266 |
| Retained earnings | 30 946 | 26 688 | 16.0 | 34 340 |
| Shareholders' equity | 95 956 | 91 658 | 4.7 | 99 877 |
| NON-CURRENT LIABILITIES | ||||
| Deferred tax liability | 2 929 | 2 776 | 5.5 | 2 079 |
| Interest-bearing liabilities | 465 | 0 | 0.0 | 524 |
| Non-interest-bearing liabilities | 462 | 866 | -46.7 | 486 |
| Non-current liabilities | 3 856 | 3 642 | 5.9 | 3 090 |
| CURRENT LIABILITIES | ||||
| Interest-bearing liabilities | 178 | 1 789 | -90.0 | 158 |
| Trade payables and other liabilities | 34 954 | 31 248 | 11.9 | 16 765 |
| Tax liability from income tax | 861 | 711 | 21.2 | 873 |
| Provisions | 229 | 0 | 0.0 | 1 203 |
| Current liabilities | 36 222 | 33 747 | 7.3 | 19 000 |
| TOTAL EQUITY AND LIABILITIES | 136 033 | 129 048 | 5.4 | 121 966 |
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
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GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
| EUR thousand | Share-holder capital | Share issue | Share premium account | Own shares | Inv.non-restricted equity | Other reserves | Translation differences | Retained earnings | Total |
|---|---|---|---|---|---|---|---|---|---|
| SHAREHOLDERS' EQUITY 1.1.2011 | 3 507 | 255 | 1 187 | -629 | 34 263 | 540 | -1 688 | 29 644 | 67 079 |
| Compr. income | -170 | 2 268 | 2 098 | ||||||
| Dividend distribution | -5 120 | -5 120 | |||||||
| Share issue | 27 370 | 27 370 | |||||||
| Granted warrants | 102 | 102 | |||||||
| Changes in reporting period | 9 | 79 | 246 | -205 | 129 | ||||
| SHAREHOLDERS' EQUITY 31.3.2011 | 3 516 | 334 | 1 187 | -629 | 61 879 | 540 | -1 857 | 26 688 | 91 658 |
| EUR thousand | Share-holder capital | Share issue | Share premium account | Own shares | Inv.non-restricted equity | Other reserves | Translation differences | Retained earnings | Total |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| SHAREHOLDERS' EQUITY 1.1.2012 | 3 528 | 0 | 1 187 | -429 | 61 976 | 540 | -1 266 | 34 340 | 99 877 |
| Compr. income | -10 | 1 476 | 1 466 | ||||||
| Dividend distribution | -5 278 | -5 278 | |||||||
| Changes in reporting period | -503 | -13 | 408 | -108 | |||||
| SHAREHOLDERS' EQUITY 31.3.2012 | 3 528 | 0 | 1 187 | -932 | 61 963 | 540 | -1 276 | 30 946 | 95 956 |
GROUP CASH FLOW STATEMENT
| EUR thousand | 1.1.–
31.3.2012 | 1.1.–
31.3.2011 | 1.1.–
31.12.2011 |
| --- | --- | --- | --- |
| Cash flows from operating activities | | | |
| Profit for the period | 1 476 | 2 268 | 9 671 |
| Adjustments for profit | 1 695 | 1 926 | 7 613 |
| Working capital changes | 8 640 | 11 661 | 2 456 |
| Interest paid | -1 | -17 | -285 |
| Interest received | 69 | 37 | 483 |
| Other financial items in operating activities | 20 | -40 | -285 |
| Income taxes paid | -1 266 | -1 212 | -4 446 |
| Net cash from operating activities | 10 634 | 14 623 | 15 207 |
Cash flows from investing activities
| Purchase of tangible and intangible assets | -1 475 | -1 224 | 5 631 |
|---|---|---|---|
| Acquired subsidiaries | -11 978 | 0 | 0 |
| Net cash used in investing activities | -13 453 | -1 224 | -5 631 |
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
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Cash flows from financing activities
| Share issue | 0 | 27 704 | 28 063 |
|---|---|---|---|
| Purchase of own shares | -516 | 0 | 0 |
| Repayments of short-term loans | -44 | 0 | 0 |
| Repayments of long-term borrowings | 0 | -1 775 | -3 550 |
| Dividends paid | -5 278 | -4 708 | -5 120 |
| Net cash used in financing activities | -5 838 | 21 221 | 19 393 |
| Net change in cash and cash equivalents according to cash flow statement | -8 657 | 34 619 | 28 969 |
| --- | --- | --- | --- |
| Cash and cash equivalents at beginning of period | 42 977 | 13 822 | 13 822 |
| Effects of exchange rate changes on cash and cash equivalents | 130 | -124 | 187 |
| Cash and cash equivalents at end of period | 34 450 | 48 295 | 42 977 |
GROUP QUARTERLY INCOME STATEMENT
| EUR thousand | 1-3/2012 | 1-3/2011 | 4-6/2011 | 7-9/2011 | 10-12/2011 |
|---|---|---|---|---|---|
| NET SALES | 27 435 | 26 058 | 27 280 | 24 185 | 30 227 |
| Other operating income | 58 | 42 | 41 | 43 | 46 |
| Materials and services | -2 061 | -1 948 | -1 727 | -1 933 | -2 179 |
| Employee benefit expenses | -16 072 | -14 738 | -16 004 | -13 293 | -17 539 |
| Depreciation and amortization | -1 366 | -1 237 | -1 279 | -1 270 | -1 218 |
| Other operating expenses | -6 171 | -5 219 | -5 478 | -4 694 | -5 883 |
| Operating profit | 1 822 | 2 957 | 2 832 | 3 038 | 3 454 |
| % | 6.6% | 11.3% | 10.4% | 12.6% | 11.4% |
| Finance income | 146 | 51 | 125 | 102 | 232 |
| Finance expenses | -50 | -77 | -53 | -115 | -213 |
| Profit before tax | 1 918 | 2 930 | 2 904 | 3 024 | 3 472 |
| % | 7.0% | 11.2% | 10.6% | 12.5% | 11.5% |
| Income tax expense | -442 | -662 | -742 | -723 | -533 |
| PROFIT FOR THE PERIOD | 1 476 | 2 268 | 2 162 | 2 301 | 2 940 |
| % | 5.4% | 8.7% | 7.9% | 9.5% | 9.7% |
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
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COMMITMENTS AND CONTINGENT LIABILITIES
| EUR thousand | 31.3.2012 | 31.3.2011 | 31.12.2011 |
|---|---|---|---|
| Own guarantees | |||
| Business mortgages of own debts | 1 200 | 1 200 | 1 200 |
| Commitments on behalf of subsidiaries and group companies | |||
| Guarantees | 1 123 | 1 143 | 1 290 |
| Other own guarantees | |||
| Lease liabilities | |||
| Current lease liabilities | 916 | 908 | 825 |
| Lease liabilities maturing in 1–5 years | 1 061 | 903 | 899 |
| Total | 1 977 | 1 811 | 1 723 |
| Other rental liabilities | |||
| Current rental liabilities | 4 425 | 3 826 | 4 551 |
| Rental liabilities maturing in 1–5 years | 6 301 | 7 917 | 7 016 |
| Total | 10 726 | 11 743 | 11 568 |
| Other own contingent liabilities, total | 12 704 | 13 553 | 13 291 |
SEGMENT REPORTING
Basware Corporation reports one operating segment: Purchase to Pay, P2P. The reportable operating segment consists of the whole group, and the segment information is consistent with the group figures.
GEOGRAPHICAL INFORMATION
As geographic information Basware reports geographical areas Finland, Scandinavia, rest of the Europe and Other. In the geographical information net sales is split by customer's location. Net sales and operating profit are also reported by the location of the assets. Finland's geographical area includes the business operations in Finland, Russia, Asia-Pacific (excluding Australia) and the head office functions. Other geographical area includes the business operations in North America and Australia.
Net sales by the location of customer:
| Net sales (EUR thousand) | 1–3/2012 | 1–3/2011 | Change, % | 1–12/2011 |
|---|---|---|---|---|
| Finland | 12 040 | 11 856 | 1.6 | 48 660 |
| Scandinavia | 6 216 | 6 083 | 2.2 | 25 381 |
| Rest of the Europe | 6 053 | 5 256 | 15.2 | 20 187 |
| Other | 3 125 | 2 863 | 9.2 | 13 522 |
| Group total | 27 435 | 26 058 | 5.3 | 107 750 |
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
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Geographical information by the location of assets
| Net sales (EUR thousand) | 1–3/2012 | 1–3/2011 | Change, % | 1–12/2011 |
|---|---|---|---|---|
| Finland | 14 592 | 13 656 | 6.9 | 57 685 |
| Scandinavia | 6 381 | 6 096 | 4.7 | 25 693 |
| Rest of the Europe | 6 110 | 5 518 | 10.7 | 20 940 |
| Other | 2 925 | 2 611 | 12.0 | 12 737 |
| Sales between areas | -2 574 | -1 823 | 41.2 | -9 305 |
| Group total | 27 435 | 26 058 | 5.3 | 107 750 |
| Operating profit (EUR thousand) | 1–3/2012 | 1–3/2011 | Change, % | 1–12/2011 |
| --- | --- | --- | --- | --- |
| Finland | 1 218 | 1 782 | -31.6 | 6 812 |
| Scandinavia | 883 | 1 122 | -21.3 | 4 533 |
| Rest of the Europe | 261 | 520 | -49.8 | 1 629 |
| Other | -288 | -54 | -431.6 | 963 |
| Operating profit between areas | -252 | -413 | -39.0 | -1 657 |
| Group total | 1 822 | 2 957 | -38.4 | 12 280 |
| Personnel (employed, on average) | 1–3/2012 | 1–3/2011 | Change, % | 1–12/2011 |
| --- | --- | --- | --- | --- |
| Finland | 463 | 431 | 7.3 | 454 |
| Scandinavia | 126 | 120 | 5.3 | 119 |
| Rest of the Europe | 169 | 136 | 24.2 | 137 |
| India | 415 | 208 | 99.4 | 284 |
| Other | 68 | 63 | 8.5 | 64 |
| Group total | 1 241 | 959 | 29.5 | 1 058 |
Net sales by business
Basware reports income for products and services as follows: License sales, Professional Services, Maintenance and Automation Services. License sales consists of Purchase to Pay product family together with payment, financial planning and reporting solutions sold only in Finland. Automation Services include e-Invoicing, scanning services, printing services, catalogue management, purchase message exchange, activation services and SaaS services.
| Net sales (EUR thousand) | 1–3/2012 | 1–3/2011 | Change, % | 1–12/2011 |
|---|---|---|---|---|
| License Sales | 4 077 | 4 814 | -15.3 | 20 874 |
| Maintenance | 9 779 | 8 879 | 10.1 | 36 247 |
| Professional Services | 8 137 | 8 650 | -5.9 | 34 179 |
| Automation Services | 5 442 | 3 715 | 46.5 | 16 449 |
| Group total | 27 435 | 26 058 | 5.3 | 107 750 |
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
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GROUP KEY INDICATORS
Financial Performance Indicators
| EUR thousand | 1-3/2012 | 1-3/2011 | 1-3/2010 | 1-12/2011 |
|---|---|---|---|---|
| Net sales | 27 435 | 26 058 | 23 132 | 107 750 |
| Growth of net sales, % | 5.3% | 12.7% | 6.5% | 4.5% |
| EBITDA | 3 188 | 4 169 | 3 373 | 17 284 |
| % of net sales | 11.6% | 16.0% | 14.6% | 16.0% |
| Operating profit before IFRS3 amortization | 2 455 | 3 458 | 2 692 | 14 290 |
| % of net sales | 8.9% | 13.3% | 11.6% | 13.3% |
| Operating profit | 1 822 | 2 957 | 2 136 | 12 280 |
| Growth of operating profit, % | -38.4% | 38.4% | 34.2% | -8.9% |
| % of net sales | 6.6% | 11.3% | 9.2% | 11.4% |
| Profit before tax | 1 918 | 2 930 | 2 142 | 12 332 |
| % of net sales | 7.0% | 11.2% | 9.3% | 11.4% |
| Profit for the period | 1 476 | 2 268 | 1 582 | 9 671 |
| % of net sales | 5.4% | 8.7% | 6.8% | 9.0% |
| Return on equity, % | 6.0% | 11.4% | 11.2% | 11.6% |
| Return on investment, % | 8.0% | 14.7% | 14.1% | 14.9% |
| Interest bearing liabilities | 643 | 1 789 | 5 388 | 682 |
| Liquid assets * | 34 450 | 48 295 | 16 351 | 42 977 |
| Gearing, % | -35.2% | -50.7% | -19.4% | -42.3% |
| Equity ratio, % | 70.5% | 71.0% | 59.1% | 81.9% |
| Total assets | 136 033 | 129 048 | 95 606 | 121 966 |
| Gross investments ** | 13 682 | 1 219 | 845 | 6 331 |
| % of net sales | 49.9% | 4.7% | 3.7% | 5.9% |
| Capital expenditure | 312 | 411 | 263 | 2 014 |
| % of net sales | 1.1% | 1.6% | 1.1% | 1.9% |
| Research and development costs | 4 251 | 3 834 | 3 748 | 16 489 |
| % of net sales | 15.5% | 14.7% | 16.2% | 15.3% |
| R&D personnel at end of the period | 325 | 270 | 192 | 311 |
| Personnel, average for the period | 1 241 | 959 | 797 | 1 058 |
| Personnel, at end of the period | 1 245 | 981 | 808 | 1 182 |
| Growth of personnel, % | 26.9% | 21.4% | 10.7% | 29.5% |
) Includes cash, cash equivalents and financial assets at fair value through profit or loss
*) Includes capitalized R&D costs and acquisitions
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
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Group share indicators
| 1-3/2012 | 1-3/2011 | 1-3/2010 | 1-12/2011 | |
|---|---|---|---|---|
| Earnings per share (basic), EUR | 0.11 | 0.19 | 0.14 | 0.76 |
| Earnings per share (diluted), EUR | 0.11 | 0.19 | 0.14 | 0.76 |
| Equity per share, EUR | 7.42 | 7.11 | 4.92 | 7.72 |
| Parent company's shareholders' equity per share, EUR | 7.47 | 7.16 | 4.96 | 7.76 |
| Price per earnings (P/E) | 167.94 | 141.94 | 121.37 | 21.57 |
| Share price performance, share issue adjusted | ||||
| lowest price | 16.70 | 23.02 | 15.00 | 14.95 |
| highest price | 19.95 | 27.00 | 18.58 | 28.10 |
| average price | 19.04 | 25.26 | 16.99 | 21.58 |
| closing price | 19.26 | 26.40 | 16.86 | 16.45 |
| Market capitalization at end of period | 247 418 756 | 337 933 966 | 192 024 003 | 211 737 063 |
| Share issue adjusted number of traded shares | 444 503 | 2 625 376 | 400 317 | 5 079 523 |
| % of average number of shares | 3.5% | 21.5% | 3.5% | 40.1% |
| Average number of shares | ||||
| - during the period | 12 868 721 | 12 192 657 | 11 383 312 | 12 679 281 |
| - at end of the period | 12 931 229 | 12 890 829 | 11 479 624 | 12 931 229 |
| - at end of the period, diluted | 12 868 721 | 12 222 700 | 11 501 810 | 12 686 792 |
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com
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Major Shareholders, March 31, 2012
| Pcs | % | ||
|---|---|---|---|
| 1. | Ilmarinen Mutual Pension Insurance Company | 1 593 548 | 12.3 |
| 2. | Sihvo, Ilkka | 881 675 | 6.8 |
| 3. | Eräkangas, Kirsi | 827 300 | 6.4 |
| Eräkangas, Kirsi | 576 900 | 4.5 | |
| Eräkangas, Lotta | 250 400 | 1.9 | |
| 4. | Vaajoensuu, Hannu | 673 800 | 5.2 |
| Havacment Oy | 266 500 | 2.1 | |
| Vaajoensuu, Hannu | 323 500 | 2.5 | |
| Vaajoensuu, Matias | 83 800 | 0.6 | |
| 5. | Perttunen, Sakari | 665 900 | 5.1 |
| 6. | Varma Mutual Pension Insurance Company | 530 000 | 4.1 |
| 7. | Nordea Nordic Small Cap Fund | 387 585 | 3.0 |
| 8. | Veritas Pension Insurance Company | 372 641 | 2.9 |
| 9. | Fondita Nordic Micro Cap Fund | 360 000 | 2.8 |
| 10. | Op-Suomi Pienyhtiöt | 335 000 | 2.6 |
| 11. | Pöllänen, Antti | 299 023 | 2.3 |
| Pöllänen, Antti | 299 023 | 2.3 | |
| 12. | Investment Fund Aktia Capital | 273 313 | 2.1 |
| 13. | The State Pension Fund | 256 000 | 2.0 |
| 14. | Op-Delta Fund | 202 500 | 1.6 |
| 15. | Kaleva Mutual Insurance Company | 181 781 | 1.4 |
| 16. | Fim Fenno Fund | 181 243 | 1.4 |
| 17. | Perttunen, Meimi | 175 400 | 1.4 |
| 18. | Ahonen, Asko | 168 736 | 1.3 |
| 19. | Fim Forte Fund | 150 000 | 1.2 |
| 20. | Carnegie Share Fund | 107 489 | 0.8 |
| 20 largest shareholders | 8 622 934 | 66.7 | |
| Nominee registered shares | 1 573 577 | 12.2 | |
| Other | 2 734 718 | 21.1 | |
| Total | 12 931 229 | 100.0 |
Basware Corporation | Linnoitustie 2, Cello, P.O. Box 97, FI-02601 Espoo, Finland | Tel. +358 9 879 171 | Fax +358 9 8791 7297 | www.basware.com