Basware Oyj — Interim / Quarterly Report 2021

Oct 19, 2021

basware
Simplify Operations, Spend Smarter.

INTERIM REPORT

January-September 2021

Q3/2021

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basware

Interim Report

January-September 2021

Basware Interim Report January-September 2021: Robust operating profit performance, Cloud revenue 80% of net sales

July-September 2021

• Cloud ARR order intake amounted to EUR 2.6 million (EUR 3.6 million)
• Net sales increased 0.9 percent to EUR 37,100 thousand (EUR 36,772 thousand), which amounted to 0.2 percent organic growth at constant currencies
• Cloud revenue increased 9.8 percent to EUR 29,693 thousand (EUR 27,037 thousand), which amounted to 9.1 percent organic growth at constant currencies
• EBIT increased 17.5 percent to EUR 2,432 thousand (EUR 2,069 thousand)
• Earnings per share (diluted) were EUR -0.74 (EUR -0.06)

January-September 2021

• Cloud ARR order intake amounted to EUR 11.1 million (EUR 13.3 million)
• Net sales increased 0.6 percent to EUR 113,413 thousand (EUR 112,787 thousand), which amounted to 1.0 percent organic growth at constant currencies
• Cloud revenue increased 8.2 percent to EUR 88,369 thousand (EUR 81,652 thousand), which amounted to 8.7 percent organic growth at constant currencies
• EBIT increased 62.5 percent to EUR 5,612 thousand (EUR 3,454 thousand)
• Earnings per share (diluted) were EUR -0.94 (EUR -0.38)

Key figures

EUR thousand	7-9/2021	7-9/2020	Change, %	1-9/2021	1-9/2020	Change, %	2020
Net sales	37,100	36,772	0.9	113,413	112,787	0.6	151,579
Cloud revenue	29,693	27,037	9.8	88,369	81,652	8.2	110,312
Cloud ARR order intake	2,575	3,599	-28.6	11,054	13,348	-17.2	19,250
EBIT	2,432	2,069	17.5	5,612	3,454	62.5	4,667
EBITDA	6,390	5,936	7.6	17,467	15,162	15.2	20,207
Gearing, %^{1}	83.9	52.1	61.0	83.9	52.1	61.0	53.0
Cash and cash equivalents^{1}	25,865	38,427	-32.7	25,865	38,427	-32.7	40,461
Cash flow from operating activities	4,004	7,525	-46.8	11,640	19,619	-40.7	25,252
Earnings per share, diluted, EUR	-0.74	-0.06	-1,194.8	-0.94	-0.38	-146.0	-0.51
Personnel^{1}	1,341	1,323	1.4	1,341	1,323	1.4	1,336

¹ At the end of the period.

The interim report is unaudited.

Guidance for 2021

Basware expects the gradual normalization of the business environment to continue in Q4 2021 and keeps guidance for the full year 2021 unchanged:

• Modest positive Net sales growth on an organic constant currency basis
• EBIT approximately at the same level or better than the previous year

Basware Corporation | https://investors.basware.com/en

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basware
Interim Report
January-September 2021

CEO Klaus Andersen:

"Basware's net sales and profitability continued to grow during the third quarter of the year. Total net sales were EUR 37.1 million, which amounted to 0.2% organic growth at constant currencies. Cloud revenue grew with 9.1% to EUR 29.7 million, now 80% of net sales, and Maintenance revenues declined according to expectations. We saw a slight decrease in Consulting revenues driven by lower project activity. EBIT amounted to EUR 2.4 million for the quarter, which is a growth of 17.5% compared to the corresponding period last year. Cash flow from operating activities was EUR 4.0 million for the quarter.

In this quarter we signed a significant enterprise agreement with a large North American fast-food chain, which will become one of our biggest engagements when fully implemented. This contract is not included in our reported Cloud order intake this quarter, due to the ramp-up structure of the agreement. In addition to this contract, EUR 2.6 million order intake was closed in Q3. Uncertainty in the business environment in general remains and has amplified the demand for more flexible cloud service terms and ramp-up structures. This impacts the order intake timing for these typically larger customers, because order intake will be reported incrementally as the engagement ramps up. New logos were added in all regions, and we are pleased to announce that amongst other names, we added Northern Territory Government, Southern Cross Care, Pernod Ricard North America, Gren Holding and Beekenkamp to our customer portfolio. Our expansion business continued to be consistent and strong. In this quarter more than hundred customers expanded their cloud service usage with us, which contributed to more than half of the reported order intake. Approximately one third of the order intake in the quarter was generated either indirectly or together with our partners.

We continued to bring innovations to the market also this quarter. The end-user adoption rate for our next generation user interface, AP-Pro, accelerated and today approximately two-thirds of all end-users have moved entirely to AP-Pro. We introduced significant new capabilities for the AP Power user role during the quarter which together with further automation capabilities, will facilitate the journey towards 100% AP-Pro user adoption even further. The number of customers using Basware's Procurement offering is increasing steadily. End of this quarter more than 120 customers actively used the procurement service in their daily operations. That is an annual growth rate of more than 40%. Our SmartPDF invoicing services, including SmartPDF AI, is also gaining momentum. The amount of PDF invoices we processed through our highly automated SmartPDF services reached annualized volumes of 2.4 million invoices this quarter, which is four times the volumes processed in the beginning of the year. Our operational capabilities in this area are rapidly becoming more scalable, and we expect to see continued growth in our SmartPDF invoicing service going forward.

In August, we announced that Alwin Schauer has been appointed Chief Revenue Officer of Basware and member of the Executive Team starting 1st of September. Alwin Schauer joined Basware from Software AG and has extensive cloud sales experience also from his more than seven years at Salesforce. Sales execution and efficiency as well as continued successful execution of our partner strategy remains a focus area and I am truly pleased to have Alwin on board to lead our global Go-To-Market organization towards accelerated growth and increased operational efficiency in line with our strategy of sustainable growth and profitability.

Based on the development of our financial performance year-to-date and our estimates for the rest of the year, we are increasingly confident with reaching our full year guidance. At the same time, even with a certain level of market uncertainty continuing, we are well positioned to continue our journey of sustainable growth and profitability also in the long-term."

Basware Corporation | https://investors.basware.com/en

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basware

Interim Report

January-September 2021

Net sales

Net sales by revenue type, EUR thousand	7-9/2021	7-9/2020	Change, %	1-9/2021	1-9/2020	Change, %	2020
Cloud	29,693	27,037	9.8	88,369	81,652	8.2	110,312
Consulting	5,882	6,180	-4.8	20,299	19,873	2.1	26,875
Maintenance, license and other	1,526	3,555	-57.1	4,745	11,261	-57.9	14,392
Total	37,100	36,772	0.9	113,413	112,787	0.6	151,579
Net sales by customer location, EUR thousand	7-9/2021	7-9/2020	Change, %	1-9/2021	1-9/2020	Change, %	2020
Americas	8,366	8,308	0.7	25,167	25,953	-3.0	35,013
Europe	13,516	12,885	4.9	40,191	38,673	3.9	52,176
Nordics	13,406	13,565	-1.2	42,207	42,090	0.3	56,428
APAC	1,811	2,013	-10.0	5,848	6,070	-3.6	7,962
Total	37,100	36,772	0.9	113,413	112,787	0.6	151,579

Net sales by revenue type

Net sales by customer location

• Cloud 80%
• Consulting 16%

• Maintenance, license and other 4%

• Americas 23%

• Europe 36%
• Nordics 36%
• APAC 5%

Basware's net sales for the third quarter amounted to EUR 37,100 thousand (EUR 36,772 thousand), an increase of 0.9 percent. This equated to 0.2 percent organic growth at constant currencies.

Basware's net sales year-to-date amounted to EUR 113,413 thousand (EUR 112,787 thousand), an increase of 0.6 percent. This equated to 1.0 percent organic growth at constant currencies.

Cloud revenues continued to grow during the third quarter. Cloud revenues in the third quarter were EUR 29,693 thousand (EUR 27,037 thousand), up by 9.8 percent, equating to 9.1 percent organic growth at constant currencies and accounted for 80.0 percent (73.5%) of net sales.

In the third quarter consulting revenues decreased 4.8 percent, equating to 5.4 percent organic decrease at constant currencies.

Maintenance and license revenues declined in line with expectations as Basware transitions customers to the cloud and discontinues some of Basware's legacy services. In the third quarter maintenance, license and other revenues decreased 57.1 percent, equating to 57.4 percent organic decrease at constant currencies. The accelerated decline in maintenance is due to end of life of some of Basware's legacy on-premise products triggered on January 1st 2021.

Basware's net sales year-to-date from Americas was negatively impacted by the development of US Dollar against Euro. At constant currencies net sales year-to-date from Americas grew by 2.4 percent.

Basware Corporation | https://investors.basware.com/en

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basware

Interim Report

January-September 2021

The reduction in the revenues from APAC was mainly due to the decline in Maintenance revenues compared to corresponding period last year.

Cloud order intake

EUR thousand	7-9/2021	7-9/2020	Change, %	1-9/2021	1-9/2020	Change, %	2020
Cloud	2,575	3,599	-28.6	11,054	13,348	-17.2	19,250

Cloud order intake by customer location in Q3/2021 and Q3/2020

• Americas 15%
• Europe 45%
• Nordics 25%
• APAC 15%

• Americas 29%
• Europe 40%
• Nordics 24%
• APAC 7%

Basware's total cloud annual recurring revenue (ARR) gross order intake in the third quarter amounted to EUR 2,575 thousand (EUR 3,599 thousand), a decrease of 28.6 percent from corresponding period last year. This equated to 30.0 percent decline on an organic constant currency basis. Market uncertainty continues to impact the order intake. Especially large enterprise customers continue to look for increased flexibility in ramp-up and upfront commitments and this impacts the timing of when order intake is reported.

There will be a time lag before order intake is visible in net sales. Historically, around one quarter of the full year's new ARR order intake converts into revenues in the same year, with roughly fifty to sixty percent converting to revenues in the following year and the remainder thereafter. Further information on the definition of annual recurring revenue gross order intake is included in the section on Definitions of Alternative Performance Measures and Key Indicators.

Financial performance

EUR thousand	7-9/2021	7-9/2020	Change, %	1-9/2021	1-9/2020	Change, %	2020
Net sales	37,100	36,772	0.9	113,413	112,787	0.6	151,579
Cost of sales	-16,010	-15,405	3.9	-49,563	-49,467	0.2	-65,941
Gross profit	21,090	21,368	-1.3	63,850	63,320	0.8	85,638
Sales and marketing	-8,768	-8,885	-1.3	-27,124	-29,147	-6.9	-40,001
Research and development	-7,190	-6,546	9.8	-20,899	-19,238	8.6	-25,930
General and administration	-2,774	-3,702	-25.1	-9,961	-10,531	-5.4	-14,096
Total operating expenses	-18,732	-19,133	-2.1	-57,983	-58,916	-1.6	-80,027
Other operating income and expenses	74	-165	N/A	-255	-949	-73.2	-944
EBIT	2,432	2,069	17.5	5,612	3,454	62.5	4,667
EBITDA	6,390	5,936	7.6	17,467	15,162	15.2	20,207

Basware Corporation | https://investors.basware.com/en

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basware
Interim Report
January-September 2021

In the third quarter, cost of sales amounted to EUR 16,010 thousand (EUR 15,405 thousand), an increase of 3.9 percent. The cloud gross margin was 69 percent in the third quarter, up 1 percentage point in comparison to the third quarter of 2020.

Out of the total operating expenses, sales and marketing expenses decreased 1.3 percent, research and development expenses increased 9.8 percent and general and administration expenses decreased 25.1 percent during the third quarter. Sales and marketing costs reduced in comparison with the third quarter of 2020 due to lower labour costs and incentives. Research and development costs increased in comparison to corresponding period last year mainly due to higher labour costs and higher amortizations of completed development projects. General and administration costs decreased in comparison to corresponding period last year mainly because of lower incentive costs and the capitalization of refinancing related consulting expenses.

Basware's research and development investments including capitalizations but excluding amortizations totalled EUR 6,238 thousand (EUR 5,924 thousand), or 16.8 percent (16.1%) of net sales during the quarter.

Basware's EBITDA was EUR 6,390 thousand (EUR 5,936 thousand) and adjusted EBITDA was EUR 6,480 thousand (EUR 5,963 thousand) in the third quarter. The adjustments to EBITDA totalled EUR 90 thousand (EUR 28 thousand) in the quarter. Other operating income and expenses amounted to EUR 74 thousand (EUR -165 thousand).

Basware's EBIT for the quarter amounted to EUR 2,432 thousand (EUR 2,069 thousand).

Basware's EBITDA was EUR 17,467 thousand (EUR 15,162 thousand) and EBIT EUR 5,612 thousand (EUR 3,454 thousand) year-to-date.

Basware's loss before taxes was EUR -10,503 thousand (EUR -760 thousand) and loss for the quarter EUR -10,698 thousand (EUR -824 thousand). Taxes for the quarter impacted the result by EUR -195 thousand (EUR -64 thousand). Finance income and expenses for the quarter amounted to EUR -12,934 thousand (EUR -2,829 thousand). As announced on 12 July, 2021, Basware's finance expenses for the quarter were negatively impacted by the refinancing related one-off expenses of EUR 11,210 thousand of which EUR 8,027 thousand was related to recognizing the unamortized part of the costs related to the original debt facility and EUR 3,182 thousand related to recognizing the unamortized part of the paid exit fee.

Diluted earnings per share were EUR -0.74 (EUR -0.06) for the quarter.

Cash flow, financing and investments

Cash flow from operating activities was EUR 4,004 thousand (EUR 7,525 thousand) during the third quarter. Reporting period's cash flow from operating activities was impacted by the interest payment for the first half of 2021 related to the debt facility with Macquarie Capital Principal Finance, originally drawn in 2019. Last year's cash flow from operating activities was negatively impacted by the net repayment of approximately EUR 1.3 million of utilized payment deferral opportunities that were offered by different entities as a result of the Covid-19 situation. No payment deferral opportunities were utilized or repaid in the third quarter of 2021. EUR 1.1 million of payment deferrals are remaining to be repaid by the end of 2022.

Basware's cash and cash equivalents including short-term deposits totalled EUR 25,865 thousand (EUR 38,427 thousand) at the end of the quarter. Cash balance decreased mainly because of the refinancing related payments of EUR 9,886 thousand of which EUR 8,332 thousand was related to the payment of the exit fee of the original debt facility and EUR 1,599 thousand related to the transaction fees. In connection with executing the refinancing transaction, EUR 5,000 thousand was transferred to a pledged bank account during the third quarter of 2021, attributable to an adjustment in the covenant terms related to the guarantee the Company has from Garantia for its multi-issuer bond.

Basware Corporation | https://investors.basware.com/en

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basware

Interim Report January-September 2021

Basware's total assets on the balance sheet at the end of the quarter were EUR 217,358 thousand (EUR 225,196 thousand). Net cash flow from investments was EUR -6,637 thousand (EUR -1,818 thousand) in the quarter and was negatively impacted by the transfer of EUR 5,000 to a pledged bank account.

The equity ratio was 33.2 percent (37.6%) and gearing 83.9 percent (52.1%). Gearing increased because of lower cash balance and decreased equity driven by the loss for the period, both attributable to the refinancing transaction as expected. The Company's interest-bearing liabilities excluding leasing liabilities totalled EUR 70,938 thousand (EUR 66,311 thousand), of which current liabilities accounted for EUR 1,175 thousand (EUR 2,172 thousand). The return on investment was 6.4 percent (5.3%) and return on equity -55.7 percent (-3.8%) in the quarter.

Personnel

Personnel by area, on average	7-9/2021	7-9/2020	Change, %	1-9/2021	1-9/2020	Change, %	2020
Americas	97	105	-7.9	101	107	-5.4	106
Europe	377	374	0.8	377	372	1.4	373
Nordics	415	424	-2.3	418	427	-2.1	425
APAC	454	427	6.3	441	430	2.6	430
Total	1,342	1,330	0.9	1,336	1,334	0.1	1,334

Basware employed 1,342 (1,330) people on average during the quarter and 1,341 (1,323) at the end of the quarter.

On September 30, 2021, 12.9 percent (13.4%) of the personnel worked in sales and marketing, 32.3 percent (33.3%) in R&D, production and products, 43.6 percent (42.7%) in consulting and customer services and 11.2 percent (10.7%) in administration.

Basware's personnel expenses were EUR 20,731 thousand (EUR 21,037 thousand) in the quarter.

Share and shareholders

Share Indicators	1-9/2021	1-9/2020	2020
Share price performance, EUR
- lowest price	31.45	15.66	15.66
- highest price	43.85	38.60	42.85
- average price	38.40	27.63	29.58
- closing price	32.30	37.90	42.00
Market capitalization at end of period¹, EUR	466,928,574	546,308,034	605,449,320
Number of shares¹
- at end of the period	14,455,993	14,414,460	14,415,460
- average during the period	14,442,397	14,405,003	14,407,595
- average during the period, diluted	14,582,133	14,638,120	14,638,935
Number of traded shares (share issue adjusted) in Nasdaq Helsinki	3,564,451	4,015,093	4,817,685
% of average number of shares	24.7%	27.9%	33.4%
Treasury shares held by the Company at end of the period	7,943	6,476	5,476
% of total shares	0.1%	0.0%	0.0%
Share capital, EUR	3,528,368	3,528,368	3,528,368

¹ The Company's share in 2020 was 14.7% (13.4%) and 14.7% (13.3%) in the year 2019.

Basware Corporation | https://investors.basware.com/en

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basware

Interim Report

January-September 2021

Earnings per share, undiluted, EUR	-0.94	-0.38	-0.51
Earnings per share, diluted, EUR	-0.94	-0.38	-0.51
Adjusted earnings per share, undiluted, EUR	-0.92	-0.38	-0.50
Adjusted earnings per share, diluted, EUR	-0.92	-0.38	-0.50
Equity per share, EUR	4.99	5.88	5.73
Price per earnings (P/E)	-34.34	-99.12	-82.56

¹ Excluding treasury shares

Basware had 11,462 (12,394) shareholders at the end of the quarter, including nominee-registers. Nominee-registered holdings accounted for 52.98 percent (55.1%) of the total number of shares.

Share price development and trading January 1–September 30, 2021

(Source: Investis Digital)

Flagging notifications

During 2021, Basware Corporation has received the following notifications from major shareholders:

Announcement date	Shareholder	Threshold	Total holding, %
February 9	Arrowgrass Master Fund Ltd	Below 15%	14.3%
February 23	Long Path Partners LP	Over 10%	10.11%
April 15	Arrowgrass Master Fund Ltd	Below 10%	9.2%
July 20	Arrowgrass Master Fund Ltd	Below 5%	4.4%

Annual General Meeting and authorizations of the Board of Directors

Basware Corporation's Annual General Meeting 2021 was held on March 18, 2021. The Annual General Meeting adopted the annual accounts for the financial period ending on 31 December 2020. The remuneration report was approved, and the members of the Board of Directors as well as the CEO were discharged from liability for the financial period ending on 31 December 2020. The Annual General Meeting

Basware Corporation | https://investors.basware.com/en

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basware

Interim Report
January-September 2021

resolved in accordance with the proposal of the Board of Directors that no dividend will be paid for the year 2020.

The Annual General Meeting decided the number of members of the Board of Directors to be six. Mr. Ilkka Sihvo, Mr. Michael Ingelög, Mr. Daryl Rolley and Ms. Minna Smedsten were re-elected as members of the Board of Directors, and Mr. Carl Farrell and Mr. Jonathan Meister were elected as new members. The Board of Directors elected in its organizing meeting Michael Ingelög as the Chairperson and Ilkka Sihvo as the Vice Chairperson of the Board of Directors. Minna Smedsten was elected as the Chairperson of the Audit Committee and Carl Farrell, Jonathan Meister and Michael Ingelög as its members. Ilkka Sihvo was elected as the Chairperson of the Remuneration Committee and Daryl Rolley and Michael Ingelög as its members.

Ernst & Young Oy, Authorized Public Accounting Firm, was elected as the company's auditor.

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 1,446,000 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 trading on regulated market organized by Nasdaq Helsinki Ltd at the market price prevailing at the time of acquisition. The repurchase authorization shall be valid for 18 months and it shall revoke the previous authorizations for repurchasing the company's own 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. A total maximum of 1,446,000 new shares may be issued and/or company's own shares held by the company may be conveyed. The number of shares to be issued to the company itself together with the shares repurchased by the company on basis of the repurchase authorization shall be at the maximum of 1,446,000 shares. The subscription price of the new shares and the consideration payable for the company's own shares shall be recorded under the invested non-restricted equity fund. The authorizations shall be valid for 18 months.

On March 18, 2021 Basware announced a stock exchange release of the resolutions of the Annual General Meeting. The resolutions from Annual General Meetings are available on Basware's investor website at https://investors.basware.com/en/governance/annual-general-meeting.

Strategy

Basware is a global market leader in networked Purchase-to-Pay with the largest open e-invoicing network in the world. The market opportunity is estimated to be worth EUR 15 billion annually and it is driven by global megatrends such as digitalization and automation, increased regulation, rapid technological development and sustainability. Basware is focused on sustainable growth and profitability, increasing operational efficiency in the strategic business and simplifying operations.

Basware's key growth markets are US, UK, Germany and France, where the company sees the greatest opportunity to win new customers. Each of Basware's top 200 key customers brought on average approximately EUR 300 thousand annual recurring cloud revenue in 2020. Through add-on sales and geographical expansions, there is potential to increase the average revenue from existing customers.

Once Basware wins a new customer they typically stay with the company for many years. In 2020 Basware's gross renewal rate was 94 percent and net renewal rate was 104 percent. The gross margin for cloud revenues at the end of 2020 was 68 percent. Together these make the lifetime value of customer contracts high. In 2020 Basware had a customer lifetime value to customer acquisition cost ratio of five times.

Basware's long-term ambition is to become the networked Purchase-to-Pay vendor of choice for large global enterprises. Basware moves forward to its vision through six Must-Wins, which define strategic

Basware Corporation | https://investors.basware.com/en

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basware
Interim Report
January-September 2021

priorities for the period 2020-2022. The Must-Wins relate to customer satisfaction, project delivery capabilities, procurement solution, growing with partners, cloud transformations and Network business. The first Must-Win relates to customer satisfaction, which is a priority across all functions, from first contact to project delivery, products and support. The second Must-Win is enhancing delivery capabilities internally and together with partners to meet customer needs for continuous improvement and change agility. With the number three Must-Win, Basware's aim is to further strengthen its procurement solution and entire Source-to-Pay offering through partnerships and open API architecture. For number four, Basware aims to accelerate cloud growth through partnering. The fifth Must-Win battle is to complete the last phase in customer cloud transformations and reallocate resources to long-term strategic areas. Basware has identified accelerating its Network business as the sixth Must-Win battle from 2021 onwards.

Risks and uncertainty factors

Basware operates in a market where technological innovation plays a key role. While Basware is recognized as a leader within its segments by independent analysts, it is critical that Basware continues to innovate and develop its offering. Basware invests in product development to ensure the competitiveness of its product portfolio and good end-to-end quality, which impacts customer satisfaction, customer retention and expansion.

Basware has a growth strategy with high net sales growth expectations for the cloud business. Executing the strategy requires significant investments in sales and marketing and related resources in addition to an optimized pricing model with efficient customer delivery. At the same time, the industry transformation from an on-premise license-based business model to a SaaS model will accelerate the decline of certain Basware revenue streams, including license sales and maintenance. The transformation will also make consulting revenues more volatile. Until the transformation is fully complete, this will act as a drag on Group net sales growth. The churn rate may increase as Basware consolidates its product portfolio to focus on the strategic high gross margin business.

Market disruptions such as consolidation of significant competitors, aggressive entries of new competitors or emergence of disruptive technologies may be a risk to Basware's position as a market leader and to Basware's market share.

The fact that more than 50 percent of the company's sales are expected to come from non-euro countries exposes the Group's net sales growth to foreign exchange rate movements. In case there is a significant movement of USD, GBP, NOK, SEK or AUD against the euro, reported net sales may be affected. In addition, a proportion of Basware's costs are denominated in INR and RON. Political risks may have a negative effect on Basware. This includes the uncertainty around the status of the UK in relation to the European Union which may have a negative impact on Basware's business in the UK, and additionally the uncertainty related to taxation and legislation in India which may have a negative impact on Basware's business in India.

Basware considers acquisitions as part of its strategy. Acquisitions entail risks, such as failure in integrating acquisitions or in ensuring that the planned financial benefits and synergies of the acquisitions materialize.

Basware's biggest operational risks relate to service disruption which could be as a result of, data centre failures, various data security threats and non-compliance risks related to Basware's solutions and services, the company's activities or its employees' behaviour. Operational risks are actively managed by continuous improvement in risk monitoring and protection practices, external assessments as well as internal training of Basware's personnel.

The Covid-19 pandemic may have an impact on the timing of organisations' IT project decisions and implementations and on the global volume of invoices sent and received. This may impact Basware's order intake, revenues, operating profit and cash flow. Basware has a business continuity plan in place including extensive remote working capabilities across all functions, however, should the Covid-19 situation materially affect employees' ability to work, this may disturb Basware's ability to serve its customers.

Basware Corporation | https://investors.basware.com/en

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basware
Interim Report
January-September 2021

Other events of the quarter

On July 12, Basware announced that it has completed an amendment agreement of its debt facility with Macquarie Principal Financing PTY Limited, effective 12th of July 2021. As a result of the improved terms, the Company will realize a cash benefit of minimum EUR 12 million over the remaining duration of the Loan, compared with the original debt facility. The renegotiated Loan reflects Basware's improved financial performance and significantly decreases Basware's cost of debt. Under the amendment, the debt facility is upsized to a EUR 66 million senior secured Loan which will be due September 2024 in line with the facility's original maturity and has a non-call of 24 months. The Loan amount of EUR 66 million consists of EUR 50 million related to the original debt facility, EUR 11 million related to previously capitalized interest (PIK interest) and EUR 5 million upsizing to enhance the Company's overall liquidity position.

On August 28, Basware announced that Alwin Schauer has been appointed as the Chief Revenue Officer of Basware and member of the Executive Team. Mr. Schauer will report to Klaus Andersen, Chief Executive Officer of Basware.

On September 23, the company conveyed 625 Basware Corporation shares to the key persons participating in the Restricted Share Plan 2020. After the directed share issue, the company holds 7,943 own shares. As a result of the share issue decided by the Board of Directors on 22 September 2021, the Board of Directors also decided upon the adjustment of the subscription price to be utilized when subscribing the 1,000 freely transferable warrants belonging to Briarwood Chase Management LLC. Following the adjustment, the warrants entitle their holder to subscribe for a total of 1,003,000 shares in the company at an adjusted subscription price of EUR 29.7926 per share (before the adjustment, the subscription price per share was EUR 29.7939).

Events after the quarter

There were no significant events after the quarter.

Future outlook

Themes affecting revenues and EBIT

Basware aims for consistent cloud revenue growth. Cloud revenues are impacted by cloud order intake, churn and network transaction volume driven revenues. Approximately fifty percent of Basware's network transaction services revenues are subscription based. Cloud order intake may be negatively affected by economic uncertainty caused by Covid-19, however in the long run the pandemic is expected to accelerate digitalization megatrends which would support order intake for Basware.

Demand for consulting services is driven primarily by new customer wins, expansion sales and services adoption and efficiency projects for existing customers.

Revenues from maintenance and license will continue to decline as Basware transitions existing licence customers to cloud services. The rate of decline has been increased by end-of-life actions taken during 2019 with effect from January 1st 2021.

Improvements in scalability and operational efficiency are expected to continue. However, due to the Covid-19 situation there may be some impact to the timing of these improvements.

Basware Corporation | https://investors.basware.com/en

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basware
Interim Report
January-September 2021

Guidance for 2021

Basware expects the gradual normalization of the business environment to continue in Q4 2021 and keeps guidance for the full year 2021 unchanged:

• Modest positive Net sales growth on an organic constant currency basis
• EBIT approximately at the same level or better than the previous year

Constant currencies mean that the effects of any changes in currencies are eliminated by calculating the figures for the period using comparable period's exchange rates. Organic means that the figures are adjusted to remove the effects of any acquisitions or disposals within the past 12 months.

Basware Corporation's financial calendar for 2022

• 3 February 2022 at 8.45 a.m. EET
  Financial Statement Bulletin for 1 January–31 December 2021
• 21 April 2022 at 8.45 a.m. EEST
  Interim Report for 1 January–31 March 2022
• 21 July 2022 at 8.45 a.m. EEST
  Half-Year Financial Report for 1 January–30 June 2022
• 25 October 2022 at 8.45 a.m. EEST
  Interim Report for 1 January–30 September 2022

Espoo, Finland, on Monday, 18 October, 2021

BASWARE CORPORATION

Board of Directors

Klaus Andersen, CEO

Basware Corporation | https://investors.basware.com/en

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basware

Interim Report

January-September 2021

SUMMARY OF FINANCIAL STATEMENTS AND NOTES TO THE FINANCIAL STATEMENTS JANUARY 1 – SEPTEMBER 30, 2021

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

EUR thousand	7-9/2021	7-9/2020	Change, %	1-9/2021	1-9/2020	Change, %	2020
NET SALES	37,100	36,772	0.9	113,413	112,787	0.6	151,579
Cost of sales	-16,010	-15,405	3.9	-49,563	-49,467	0.2	-65,941
GROSS PROFIT	21,090	21,368	-1.3	63,850	63,320	0.8	85,638
Sales and marketing	-8,768	-8,885	-1.3	-27,124	-29,147	-6.9	-40,001
Research and development	-7,190	-6,546	9.8	-20,899	-19,238	8.6	-25,930
General and administration	-2,774	-3,702	-25.1	-9,961	-10,531	-5.4	-14,096
Total operating expenses	-18,732	-19,133	-2.1	-57,983	-58,916	-1.6	-80,027
Other operating income and expenses	74	-165	N/A	-255	-949	-73.2	-944
OPERATING PROFIT	2,432	2,069	17.5	5,612	3,454	62.5	4,667
Finance income and expenses	-12,934	-2,829	357.3	-18,732	-8,251	127.0	-11,652
PROFIT/LOSS BEFORE TAXES	-10,503	-760	-1,282.3	-13,120	-4,797	-173.5	-6,985
Income taxes	-195	-64	204.9	-463	-711	-34.9	-345
PROFIT/LOSS FOR THE PERIOD	-10,698	-824	-1,198.5	-13,583	-5,508	-146.6	-7,329
Other comprehensive income
Other comprehensive income that will not be reclassified to profit or loss
Remeasurement of employee benefits	7	2	247.7	-10	0	N/A	-5
Other comprehensive income that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations	861	-1,806	N/A	3,392	-4,493	N/A	-4,964
Cash flow hedges	226	-48	N/A	691	-248	N/A	-435
Income tax relating to components of other comprehensive income	-45	9	N/A	-107	86	N/A	112
Other comprehensive income for the year net of tax	1,049	-1,843	N/A	3,965	-4,655	N/A	-5,292
TOTAL COMPREHENSIVE INCOME	-9,649	-2,667	-261.8	-9,618	-10,163	5.4	-12,621
Profit/loss attributable to:
Equity holders of the parent company	-10,698	-824	-1,198.5	-13,583	-5,508	-146.6	-7,329
Total comprehensive income attributable to:
Equity holders of the parent company	-9,649	-2,667	-261.8	-9,618	-10,163	5.4	-12,621
Earnings per share
undiluted, EUR	-0.74	-0.06	-1,194.8	-0.94	-0.38	-146.0	-0.51
diluted, EUR	-0.74	-0.06	-1,194.8	-0.94	-0.38	-146.0	-0.51

Basware Corporation | https://investors.basware.com/en

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basware

Interim Report

January-September 2021

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

EUR thousand	Sep 30, 2021	Sep 30, 2020	Change, %	Dec 31, 2020
ASSETS
Non-current assets
Intangible assets	39,626	42,675	-7.1	41,927
Goodwill	79,127	77,243	2.4	76,676
Tangible assets	1,072	1,117	-4.0	1,023
Right-of-use assets	14,122	15,252	-7.4	14,322
Non-current financial assets	13	13	-1.9	13
Other receivables	7,609	3,303	130.3	3,541
Contract assets	0	15	N/A	6
Deferred tax assets	11,442	10,119	13.1	10,592
Non-current assets	153,011	149,737	2.2	148,101
Current assets
Trade receivables	28,948	27,740	4.4	26,602
Other receivables	8,574	7,922	8.2	8,714
Contract assets	653	906	-28.0	818
Income tax receivables	307	463	-33.8	166
Cash and cash equivalents	25,865	38,427	-32.7	40,461
Current assets	64,346	75,459	-14.7	76,761
ASSETS	217,358	225,196	-3.5	224,862

Basware Corporation | https://investors.basware.com/en

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basware

Interim Report

January-September 2021

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

EUR thousand	Sep 30, 2021	Sep 30, 2020	Change, %	Dec 31, 2020
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
Invested unrestricted equity fund	110,290	110,290	0.0	110,290
Other reserves	912	438	108.1	289
Translation differences	-9,789	-12,658	22.7	-13,137
Retained earnings	-34,065	-18,027	-89.0	-19,600
Shareholders' equity	72,064	84,759	-15.0	82,557
Non-current liabilities
Deferred tax liability	5,516	5,109	8.0	5,071
Interest-bearing liabilities	69,763	64,138	8.8	66,665
Leasing liabilities, interest-bearing	11,467	12,468	-8.0	11,647
Contract liabilities	2,312	2,403	-3.8	2,791
Liabilities from employee benefits	476	383	24.3	388
Non-current liabilities	89,534	84,502	6.0	86,562
Current liabilities
Interest-bearing liabilities	1,175	2,173	-45.9	2,173
Leasing liabilities, interest-bearing	3,941	3,834	2.8	3,727
Trade payables and other liabilities	27,480	28,513	-3.6	30,470
Contract liabilities	22,924	20,861	9.9	19,177
Income tax liabilities	240	555	-56.8	196
Current liabilities	55,760	55,936	-0.3	55,743
EQUITY AND LIABILITIES	217,358	225,196	-3.5	224,862

Basware Corporation | https://investors.basware.com/en

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basware

Interim Report

January-September 2021

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

EUR thousand	Share capital	Share premium account	Treasury shares	Inv. Un-restricted equity	Other reserves	Translation differences	Retained earnings	Total
SHAREHOLDERS' EQUITY Jan 1, 2021	3,528	1,187	0	110,290	289	-13,137	-19,600	82,557
Comprehensive income						3,348	-13,580	-10,232
Share based payments							-875	-875
Defined benefit plan							-10	-10
Cash flow hedges					624			624
SHAREHOLDERS' EQUITY Sep 30, 2021	3,528	1,187	0	110,290	912	-9,789	-34,065	72,064
EUR thousand	Share capital	Share premium account	Treasury shares	Inv. Un-restricted equity	Other reserves	Translation differences	Retained earnings	Total
---	---	---	---	---	---	---	---	---
SHAREHOLDERS' EQUITY Jan 1, 2020	3,528	1,187	-98	110,388	653	-8,226	-13,347	94,086
Comprehensive income						-4,432	-5,516	-9,949
Share based payments			98	-98			836	836
Defined benefit plan							0	0
Cash flow hedges					-214			-214
SHAREHOLDERS' EQUITY Sep 30, 2020	3,528	1,187	0	110,290	438	-12,658	-18,027	84,759

Basware Corporation | https://investors.basware.com/en

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basware

Interim Report

January-September 2021

CONSOLIDATED STATEMENT OF CASH FLOWS

EUR thousand	7-9/2021	7-9/2020	1-9/2021	1-9/2020	2020
Cash flow from operating activities
Profit/loss for the period	-10,698	-824	-13,583	-5,508	-7,329
Adjustments for profit:
Depreciation and amortisation	3,958	3,867	11,855	11,708	15,540
Unrealised foreign exchange gains and losses	-24	-31	213	3	690
Financial income and expenses	12,952	2,805	18,471	8,262	11,068
Tax on income from operations	195	64	463	711	345
Other adjustments	107	-384	-588	420	1,566
Total adjustments	17,188	6,321	30,414	21,104	29,208
Changes in working capital:
Increase (-) / decrease (+) in trade and other receivables	931	3,048	184	756	810
Increase (+) / decrease (-) in trade and other payables	344	-250	-492	5,242	5,069
Increase / decrease in provisions	0	-28	0	-231	-211
Total changes in working capital	1,275	2,770	-308	5,767	5,668
Financial items in operating activities	-3,201	-428	-3,665	-1,058	-1,301
Income taxes paid (-) / received (+)	-561	-314	-1,218	-687	-994
Cash flow from operating activities	4,004	7,525	11,640	19,619	25,252
Cash flow used in investing activities
Purchase of tangible and intangible assets	-1,670	-1,825	-5,966	-7,481	-9,470
Net proceeds from sale of tangible and intangible assets	33	7	33	7	7
Movements in short-term deposits and fixed deposits	-5,000	0	-5,000	0	0
Cash flow from investing activities	-6,637	-1,818	-10,933	-7,474	-9,464
Cash flow from financing activities
Proceeds from current borrowings	0	0	0	176	176
Repayment of current borrowings	-998	-998	-1,996	-1,996	-1,996
Payment related to financing	-9,886	0	-9,886	0	0
Payment of lease liabilities	-1,094	-967	-3,243	-3,171	-4,257
Cash flow from financing activities	-11,978	-1,965	-15,124	-4,991	-6,076
Net change in cash and cash equivalents	-14,611	3,742	-14,417	7,154	9,712
Cash and cash equivalents at the beginning of period	40,560	34,850	40,461	31,672	31,672
Net foreign exchange difference	-84	-164	-179	-398	-922
Cash and cash equivalents at the end of period	25,865	38,427	25,865	38,427	40,461

Basware Corporation | https://investors.basware.com/en

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basware

Interim Report January-September 2021

ACCOUNTING PRINCIPLES

This interim report has been prepared in accordance with IAS 34. The same accounting principles have been followed as in the annual financial statements except for the adoption of new standards and amendments effective as of January 1, 2021. The new standards and amendments had no impact on Group figures.

In April 2021, IFRS Interpretations Committee published their final agenda decision on the accounting of configuration and customization costs in a cloud computing arrangement (IAS 38 Intangible Assets). In this agenda decision, the Committee considered when an intangible asset can be recognized in relation to configuration and customization of an application software. As the IFRIC agenda decisions do not have a date when they enter into force, they are expected to be applied as soon as possible. As Basware uses cloud computing arrangements, it has started to analyse whether this agenda decision has any impact on the accounting principles related to costs in cloud computing arrangements. The analysis will be finalized before the end of the year 2021.

Preparation of financial statements in accordance with IFRS 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 judgement 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. Percentage changes for net figures are shown on an absolute basis.

Adjusted EBIT and EBITDA

EUR thousand	7-9/2021	7-9/2020	Change, %	1-9/2021	1-9/2020	Change, %	2020
EBIT	2,432	2,069	17.5	5,612	3,454	62.5	4,667
Adjustments:
Acquisition, disposal and restructuring income (-) and expenses (+)	-35	-110	-68.2	-47	-140	-66.5	-301
Efficiency related expenses	125	137	-8.8	315	239	31.8	453
Total adjustments	90	28	221.4	268	99	171.1	152
Adjusted EBIT	2,522	2,096	20.3	5,880	3,553	65.5	4,819
Depreciation and amortization	3,958	3,867	2.3	11,855	11,708	1.3	15,540
Adjusted EBITDA	6,480	5,963	8.6	17,735	15,261	16.2	20,359
% of net sales	17.5%	16.2%		15.6%	13.5%		13.4%

Information on products and services

Basware reports one operating segment. The reported segment is comprised of the entire Group, and the segment figures are consistent with the Group figures.

Basware reports revenues by type. Cloud revenue includes SaaS, Transaction services (consisting of e-invoicing, scan and capture services, printing services and network start-up fees) and Other cloud revenue. Non-cloud revenue includes Maintenance, License sales, Consulting services (consisting of professional services and customer services management) and Other non-cloud revenue.

Basware Corporation | https://investors.basware.com/en

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basware

Interim Report

January-September 2021

EUR thousand	7-9/2021	7-9/2020	Change, %	Change, %^{1}	1-9/2021	1-9/2020	Change, %	Change, %^{1}	2020
Cloud Revenue
SaaS	16,138	14,447	11.7	11.1	47,954	43,172	11.1	11.9	58,344
Transaction services	12,326	11,654	5.8	5.3	36,780	35,146	4.6	5.0	47,272
Other cloud revenue	1,229	935	31.4	25.0	3,635	3,335	9.0	7.0	4,696
Cloud Revenue total	29,693	27,037	9.8	9.1	88,369	81,652	8.2	8.7	110,312
Non-Cloud Revenue
Maintenance	1,523	3,601	-57.7	-58.0	4,607	11,346	-59.4	-59.6	14,687
License sales	4	73	-94.1	-94.0	82	255	-67.8	-70.0	348
Consulting services	5,882	6,180	-4.8	-5.4	20,299	19,873	2.1	2.8	26,875
Other non-cloud revenue	-1	-119	-98.8	-98.9	55	-340	N/A	N/A	-644
Non-Cloud Revenue total	7,408	9,735	-23.9	-24.4	25,044	31,134	-19.6	-19.2	41,267
Total	37,100	36,772	0.9	0.2	113,413	112,787	0.6	1.0	151,579
^{1}Organic at constant currencies.

Fair values of financial assets and liabilities

EUR thousand	Sep 30, 2021		Sep 30, 2020		Dec 31, 2020
	Book value	Fair value	Book value	Fair value	Book value	Fair value
Financial assets
Non-current:
Non-current financial assets	13	13	13	13	13	13
Non-current trade and other receivables	6,166	6,166	886	886	688	688
Current:
Current trade receivables	28,948	28,948	27,740	27,740	26,602	26,602
Current other receivables	1,187	1,187	233	233	1,205	1,205
Cash and cash equivalents	25,865	25,865	38,427	38,427	40,461	40,461
Financial liabilities
Non-current:
Financial liabilities valued at amortized acquisition cost:
Loans from financial institutions, interest-bearing	69,763	72,141	64,138	74,942	66,665	77,299
Leasing liabilities, interest-bearing	11,467	11,467	12,468	12,468	11,647	11,647
Current:
Loans from financial institutions, interest-bearing	1,175	1,175	2,173	2,173	2,173	2,173
Leasing liabilities, interest-bearing	3,941	3,941	3,834	3,834	3,727	3,727
Trade payables and other liabilities	9,674	9,674	11,355	11,355	10,196	10,196

Financial assets arising from derivative financial instruments of EUR 333 thousand are classified as level 2 and unquoted equity shares of EUR 13 thousand as level 3 in the fair value measurement hierarchy.

Basware Corporation | https://investors.basware.com/en

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basware

Interim Report

January-September 2021

On July 12, 2021, Basware made an agreement of its debt facility with Macquarie Principal Financing PTY Limited, effective 12th of July 2021. The debt facility is a EUR 66 million senior secured loan which will be due September 2024 and has a non-call of 24 months. The loan amount of EUR 66 million consists of EUR 50 million related to the debt facility drawn in 2019, EUR 11 million related to previously capitalized interest (PIK interest) and EUR 5 million upsizing to enhance the Company's overall liquidity position. The cash interest margin of the loan is 6.00 per cent per year.

Commitments and contingent liabilities

EUR thousand	Sep 30, 2021	Sep 30, 2020	Dec 31, 2020
Own guarantees
Guarantees	1,235	1,248	1,262
Commitments on behalf of subsidiaries
Guarantees	865	222	822
Other commitments
Maturing in less than 1 year	3,117	3,249	3,455
Maturing in 1-5 years	968	3,467	2,876
Total	4,085	6,716	6,331
Total commitments and contingent liabilities	6,184	8,186	8,415

Other commitments include leases and other rental not in scope of IFRS 16, as well as commitments arising from license agreements. Obligations from long term service agreements are not included.

In addition, Basware has an asset of EUR 5,000 thousand in a pledged bank account that is related to the guarantee the Company has from Garantia for its multi-issuer bond.

Basware Corporation | https://investors.basware.com/en

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basware
Interim Report
January-September 2021

Definitions of Key Indicators and Alternative Performance Measures

Earnings per share (EPS)

Profit for the period
Adjusted average number of shares during the period

Diluted earnings per share (EPS)

Profit for the period
Adjusted average number of shares during the period + dilutive shares

Alternative Performance Measures

Organic revenue growth is calculated by comparing net sales between comparison periods in constant currencies excluding alliance fees as well as net sales from acquisitions or disposals that have taken place in the past 12 months.

Net sales in constant currencies is calculated by eliminating the impact of exchange rate fluctuations by calculating the net sales for the current period by using the comparable period's exchange rates.

Gross investments are total investments made to non-current assets including acquisitions and capitalized research and development costs.

Other capitalized expenditure consists of investments in property, plant & equipment and intangible assets excluding acquisitions and capitalized research and development costs.

EBITDA is calculated as operating profit (EBIT) plus depreciation and amortization.

Adjusted EBITDA is calculated from EBITDA excluding any adjustments related to alliance fees, acquisitions and disposals, restructuring and efficiency measures, impairment losses and litigation fees and settlements.

Operating profit (EBIT) is the net sum of operating income added to net sales, less cost of sales consisting of materials and services, less the costs resulting from employee benefits, depreciation and amortization as well as other operating expenses and any impairment. Exchange rate differences and gains or losses arising from changes in the fair value of derivatives are included in operating profit, provided that they result from items related to business operations; otherwise they are recognized under financing items. All other items of the consolidated statement of comprehensive income are presented after operating profit.

Adjusted operating profit (Adjusted EBIT) is calculated from operating profit excluding any adjustments related to alliance fees, acquisitions and disposals, restructuring and efficiency measures, impairment losses and litigation fees and settlements.

Annual recurring revenue gross order intake is calculated by summing the total order intake in the period expressed as an annual contract value. For cloud order intake this includes all SaaS and Network recurring revenues including transaction revenues. Gross order intake covers new cloud customers, add-ons and renewal uplifts but excludes churn. There will be a time lag before this order intake is visible in net sales.

Cloud gross churn rate is defined as the total amount of cloud revenues lost during the period, divided by the total cloud revenues at the beginning of the period.

Basware Corporation | https://investors.basware.com/en

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basware
Interim Report
January-September 2021

Cloud net churn rate is defined as the total amount of cloud revenues lost during the period minus the new cloud ARR won from add-on sales to existing customers during the period, divided by the total cloud revenues at the beginning of the period.

Cloud gross renewal rate is defined as 100 percent minus the cloud gross churn rate.

Cloud net renewal rate is defined as 100 percent minus the cloud net churn rate.

Customer lifetime is defined as 1 divided by the cloud gross churn rate.

Lifetime value of the order intake won during the period is calculated by multiplying Cloud ARR order intake during the period by the cloud gross margin and dividing by the cloud gross churn rate.

The customer acquisition cost is defined as the total expenditure on sales and marketing for the 12 months prior to the period (to account for the lead time between new sales and marketing expenditure converting to order intake).

Return on equity (ROE), %
$$
\frac{(\text{Profit or loss before taxes} - \text{taxes}) \times 100}{\text{Shareholders' equity (average)}}
$$

Return on investment (ROI), %
$$
\frac{(\text{Profit before taxes} + \text{interest and other financial expenses}) \times 100}{\text{Balance sheet total} - \text{non-interest-bearing liabilities (average)}}
$$

Gearing, %
$$
\frac{(\text{Interest-bearing liabilities} - \text{interest-bearing assets}) \times 100}{\text{Shareholders' equity}}
$$

Equity ratio, %
$$
\frac{\text{Shareholders' equity} \times 100}{\text{Balance sheet total} - \text{advance payments received}}
$$

Adjusted earnings per share (EPS) is calculated by excluding from the profit/loss any adjustments related to alliance fees, acquisitions and disposals, restructuring and efficiency measures, impairment losses and litigation fees and settlements.

Equity per share
$$
\frac{\text{Shareholders' equity}}{\text{Adjusted number of shares at the end of the financial period} - \text{own shares}}
$$

Price-earnings ratio (P/E)
$$
\frac{\text{Adjusted share price at the end of the financial period}}{\text{Earnings per share}}
$$

Basware Corporation | https://investors.basware.com/en

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basware

Interim Report

January-September 2021

QUARTERLY INCOME STATEMENT

EUR thousand	7-9/2021	4-6/2021	1-3/2021	10-12/2020	7-9/2020
NET SALES	37,100	38,571	37,742	38,793	36,772
Cost of sales	-16,010	-17,137	-16,415	-16,474	-15,405
GROSS PROFIT	21,090	21,434	21,326	22,318	21,368
Sales and Marketing	-8,768	-9,113	-9,242	-10,853	-8,885
Research and Development	-7,190	-6,879	-6,830	-6,692	-6,546
General and Administration	-2,774	-3,427	-3,761	-3,565	-3,702
Total operating expenses	-18,732	-19,418	-19,833	-21,111	-19,133
Other operating income and expenses	74	-215	-113	5	-165
OPERATING PROFIT	2,432	1,800	1,380	1,213	2,069
% of net sales	6.6	4.7	3.7	3.1	5.6
Finance income and expenses	-12,934	-3,012	-2,785	-3,401	-2,829
Profit/loss before taxes	-10,503	-1,212	-1,405	-2,188	-760
Income taxes	-195	-195	-72	367	-64
PROFIT/LOSS FOR THE PERIOD	-10,698	-1,407	-1,478	-1,821	-824

Basware Corporation | https://investors.basware.com/en

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basware

Interim Report

January-September 2021

KEY INDICATORS

EUR thousand	7-9/2021	7-9/2020	1-9/2021	1-9/2020	2020
Cloud ARR order intake	2,575	3,599	11,054	13,348	19,250
Net sales	37,100	36,772	113,413	112,787	151,579
Net sales growth, %	0.9%	-0.1%	0.6%	3.4%	2.2%
Organic net sales growth, %	0.2%	1.2%	1.0%	4.1%	3.2%
EBIT	2,432	2,069	5,612	3,454	4,667
% of net sales	6.6%	5.6%	4.9%	3.1%	3.1%
EBITDA	6,390	5,936	17,467	15,162	20,207
% of net sales	17.2%	16.1%	15.4%	13.4%	13.3%
Adjusted EBITDA	6,480	5,963	17,735	15,261	20,359
Return on equity, %	-55.7%	-3.8%	-23.4%	-8.2%	-8.3%
Return on investment, %	6.4%	5.3%	4.2%	3.2%	3.1%
Interest-bearing liabilities excl. leasing liabilities	70,938	66,311	70,938	66,311	68,837
Cash and cash equivalents	25,865	38,427	25,865	38,427	40,461
Cash flow from operating activities	4,004	7,525	11,640	19,619	25,252
Gearing, %	83.9%	52.1%	83.9%	52.1%	53.0%
Gross investments	1,797	2,010	6,334	7,727	9,877
% of net sales	4.8%	5.5%	5.6%	6.9%	6.5%
R&D expenses excluding amortizations	4,603	4,186	13,226	12,127	16,447
R&D costs, capitalised	1,636	1,738	5,639	6,497	8,372
R&D investments, total	6,238	5,924	18,865	18,623	24,819
% of net sales	16.8%	16.1%	16.6%	16.5%	16.4%
Depreciation and amortization	3,958	3,867	11,855	11,708	15,539
Other capitalised expenditure	162	272	695	1,230	1,505
Personnel at end of period	1,341	1,323	1,341	1,323	1,336

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