Basware/media/Files/B/Basware-IR-V2/2020... · with analytics 307% return on investment and a payback time of 12 months1) 5 INVESTMENT HIGHLIGHTS ... “a leading choice for CPOs
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B A S W A R ERoadshow presentation
June 2020
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IMPORTANT NOTICEThe following information contains, or may be deemed to contain, forward-looking statements. These statements relate tofuture events or future financial performance, including, but not limited to, expectations regarding market growth anddevelopment as well growth and profitability of Basware. In some cases, such forward-looking statements can be identifiedby terminology such as “expect”, “plan”, “anticipate”, “intend”, “believe”, “estimate”, “predict”, “potential”, or “continue”, or thenegative of those terms or other comparable terminology. By their nature, forward-looking statements involve risks anduncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Futureresults may vary from the results expressed in, or implied by, the forward-looking statements, possibly to a material degree.All forward-looking statements included herein are based on information presently available to Basware and, accordingly,Basware assumes no obligation to update any forward-looking statements, unless obligated to do so pursuant to anapplicable law or regulation.
Nothing in this presentation constitutes investment advice and this presentation shall not constitute an offer to sell or thesolicitation of an offer to buy any securities of Basware or otherwise to engage in any investment activity.
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EUR 148 million revenue in 2019
~1,325 employees in 14 countries
Customers in 100+ countries
73% revenue
comes from cloud
B A S W A R E I N B R I E F
EUR 800 billion managed spend in 2019
We help our customers simplify operations and spend smarter by automating their procurement and finance processes
We are the global leader with largest e-invoicing network in the world
#1 in accounts payable automation and #1-3 in procurement
38%
23% 33%
5%
Revenue by area (Q1/2020)
Americas
Nordics
Europe
APAC
%
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S I M P L I F Y O P E R A T I O N S , S P E N DS M A R T E R
Receive
Source
Order
Shop
Invoice
Match
Analyze
Pay
1) Total economic impact of Basware’s Purchase-to-Pay Cloud Solution, Forrester 2017
From inefficient invoice process → to AP automation
From uncontrolled spend
→ to spend under management
From lack of cashflow visibility
→ to optimize spendwith analytics
307% return on investment and a payback time of 12 months1)
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I N V E S T M E N T H I G H L I G H T S
Large addressable market
Market leader with unique offering
Profitable cloud growth
• EUR 15 billion market potential
• Leader in networked purchase-to-pay• Largest e-invoicing network and innovator
in analytics
• Actions on-going to improve profitability while retaining cloud growth
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R E C O G N I Z E D M A R K E T L E A D E R
Leader with strong market understanding, innovation and product roadmap, and customer experience
“well suited to multinational organizations moving to digital procurement and looking to automate invoice processing”
MAGIC QUADRANT FOR PROCURE TO PAY SUITES 2019
“a leading choice for CPOs and CFOs who aim at achieving 90% or more process automation across their P2P spend”
5/5 in Product strategy | 5/5 in Globalization | 4.2/5 in Invoice Processing
FORRESTER WAVE: ePROCUREMENT PLATFORMS, Q4 2019
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C O M P E T I T I V E D I F F E R E N T I A T O R SPROCUREMENTE-INVOICING NETWORK
& AP AUTOMATION
- 100% invoice capture
- 100% spend visibility
- 100% end-user adoption
ANALYTICS
LARGEST & MOST GLOBAL E-INVOICING NETWORK €800BN SPEND – 150M+ INVOICES
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B A S W A R E C H O S E N B Y C U S T O M E R S A C R O S S T H E W O R L D
Geographies where Basware supports customers
Automotive
Manufacturing
Healthcare / Pharma
Telco / Media
Energy / Utility
Food / Beverage
Services
Industrials
Transport
Retail
Finance / Professional
Public Sector1.5m+ organisations connected to network
EUR 800 billion spend managed in 2019
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T H E J O U R N E Y T O C L O U D
TRANSFORMATION CONSOLIDATION OPTIMIZATION
Client transformations
Subscription pricing
All new business is cloud
Making it happen – cloud growth
Mature processesConsolidate systemsAchieve step change in cost baseDrive efficiency Cloud growth and profitability
Adaptive optimization
Drive efficiency and margins
Strategic investments
Cloud growth & margins
Push to cloud Grow profitably Finetune
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F R O M T R A N S I T I O N T O P R O F I T A B L E G R O W T H
Simplification and profitable growth
Consolidation of R&D sites
Transition to AWS
initiated
Sale of non-strategic
businesses in 2018
Functional organization
Cloud focused strategy in
2016
Scanning services
outsourced
Productivity programmeLaunched in
Q1/19
Cloud revenues
reach 2/3 of total
Consolidation ofproduct portfolio
Push to Cloud
Robust business
development in H2/19
Q1/20 Cloud revenue +14% YoY
EBIT 0.1M€
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C O N T I N U E D C L O U D R E V E N U E G R O W T H
▪ Cloud revenue growth +14% in Q1/20*
▪ Cloud 73% of total revenue
▪ Maintenance, license and other revenue declines in line with expectations as Basware transitions customers to cloud
EUR million1)
*On an organic basis at constant currencies
1)Q1/2017-Q2/2018 revenue has been adjusted for disposals and is indicative only.
0
5
10
15
20
25
30
Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20
Cloud revenue Consulting Maintenance, license and other revenue
*Organic constant currency basis
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S T R O N G C L O U D M E T R I C S
Cloud Non-Cloud
73%
95% 104% 67% 7XGross renewal rate in 2019
Net renewal rate in 2019
Cloud gross margin in Q1/2020
LTV / CAC ratio in 2019
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EBIT
Basware’s cost base is scalable and has variable cost components that can be reduced to a certain extent to maintain profitability. EBIT for 2020 is expected to be positive.
On April 21st Basware updated its 2020 guidance to reflect the estimated impact of the Covid-19 pandemic.
O U T L O O K F O R 2 0 2 0
Net Sales
Net Sales guidance will be given when it is possible to estimate the COVID-19 pandemic effects more precisely.
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S T R A T E G Y 2 0 2 0 - 2 0 2 2
#1 Happy Customers
MUST-WIN BATTLES LONG TERM
#2 Delivery Capabilites
#3 Procurement
#4 Sell with Advisory Partners
#5 Transformations; now and after
Realize growth potential
Enable Visible Commerce
Scalable growth and profitability
Increase operational efficiency in strategic business
Simplify operations, clean up legacy
GUIDING PRINCIPLES
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G L O B A L C R I S I S B R I N G I N G V I S I B L E C O M M E R C E T O F O C U S
Supplier management
Monitoring cash flow
Basware solutions digitalize and automate customers Purchase-to-Pay processes which enables work from home.
100% visibility and a holistic view to suppliers are key when mitigating against supply shortages, labour irregularities and slow-downs in logistics.
With Basware Analytics companies can analyse spend and plan ahead, prioritize critical suppliers and avoid late payments.
100% digital processes
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M A R K E T G R O W T H D R I V E N B Y G L O B A L M E G A T R E N D S
EUR 148 million Basware 2019 revenues
EUR ~5 billionCurrent market
EUR 15 billionMarket potential
DIGITALIZATION & AUTOMATION
RAPID TECHNOLOGICAL DEVELOPMENT
SUSTAINABILITY
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W H Y I N V E S T I N B A S W A R E ?
Market leader with unique offering
Profitable cloud growth
Large addressable market
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A P P E N D I X
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B A S W A R E H U B F O R V I S I B L E C O M M E R C E
Basware AP Automation
Basware PurchaseBasware Vendor Manager
Open philosophy: Pluggable specialist solutions and 3rd party coexistence
Network
Open Network: partnerships / expansion
Data & Analytics
APIs
+200 interops B2G networks Regional partners
APIs
3rd party procurement
Sourcing
Spend Analytics
Vendor RiskManagement
CLMContingentWorkforce
Management
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M I N I M I Z E E R R O R S , W H I L E S P E E D I N G U P T H E P R O C E S S
*Source: Ardent Partners report, 2018
3.1 days
BES
T IN
CLA
SS
Supplier creates and sends invoices electronically
Automatic content validation & format conversion
Invoices automatically arrive in customer AP/ERP
10.6 days*
MAN
UAL
Customer receives invoices
in mailroom
Customer scans
invoices
Customer validates invoices
Customer enters the data into a
system
Suppliers create
invoices
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C L O U D O R D E R I N T A K E G R O W T H
▪ Reported as annual recurring revenue (ARR) gross order intake
▪ Share of cloud order intake from new customers increasing
▪ Key markets: US, UK, Germany and France
EUR
mill
ion
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KEY FIGURESEUR thousand Q1/2020 Q1/2019 Change,% 2019 2018 Change, %
Net sales 38,245 35,895 6.5 148,302 141,417 4.9
Cloud 27,774 24,282 14.4 101,442 89,482 13.4
Consulting 6,496 5,441 19.4 24,962 23,567 5.9
Maintenance, license and other 3,975 6,172 -35.6 21,889 28,368 -22.8
Cost of sales -17,473 -18,147 -3.7 -71,493 -69,620 2.7
Gross profit 20,772 17,748 17.0 76,810 71,797 7.0
S&M -10,767 -11,375 -5.3 -45,190 -43,041 5.0
R&D -6,176 -7,404 -16.6 26,815 -27,222 -1.5
G&A -3,575 -4,607 -22.4 -14,572 -16,247 -10.3
Total operating expenses -20,518 -23,386 -12.3 -86,577 -86,510 0.1
Other operating income and expenses
-153 -2,142 -92.8 -4,770 13,242
Operating profit (EBIT) 100 -7,780 -14,537 -1,471
Adjustments -59 1,960 3,781 -13,581
Depreciation and amortization 3,970 4,121 -15,941 10,688 49.2
Adjusted EBITDA 4,011 -1,699 5,185 -4,364
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SHAREHOLDER BREAKDOWN
SHAREHOLDER DISTRIBUTION AS OF APRIL 30, 2020
1 Based on Euroclear Finland shareholder register as of April 30, 20202 Based on their latest flagging notification
TOP 20 SHAREHOLDERS1 Shares, pcs % of total
1 Arrowgrass Capital Partners2 3,600,698 25.02 Sihvo Ilkka 887,300 6.23 Long Path Partners LP2 760,971 5.34 Briarwood Chase Management2 720,347 5.05 Vaajoensuu Hannu 567,857 3.946 Fjärde Ap Fonden 469,873 3.26
7Ilmarinen Mutual Pension Insurance Company 420,830 2.92
8 Perttunen, Sakari 384,375 2.679 Veritas Pension Insurance Company Ltd. 352,345 2.45
10 Danske funds 270,000 1.8711 The State Pension Fund 256,000 1.7812 Pöllänen Antti 192,127 1.3313 Perttunen, Meimi 145,107 1.01
14Sijoitusrahasto Taaleritehdas Mikro Markka 90,000 0.62
15 Vaajoensuu, Matias 83,800 0.5816 Vaajoensuu Petra 83,800 0.5817 Vaajoensuu Sara 83,700 0.5818 OP-Finland Small Firms Fund 79,605 0.5519 Kaloniemi Markku 77,000 0.5320 Koripalloilun Tukisäätiö Sr 45,000 0.31
Total top 20 9,570,735 66.5 %Total number of shares 14,401,936 100 %
Executive team & Board
6 %
International Institutional
Investors52 %
Other Founders
15 %
Finnish Institutional
Investors 15 %
Households8 %
Other4 %
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F R E E C A S H F L O W M E T R I C
-7,816
-9,794
-1,445
-4,774
-3,579
Q1/2019 Q2/2019 Q3/2019 Q4/2019 Q1/2020 EUR thousand 1-3/
20201-3/2019
EBITDA 4,070 -3,660
Capitalizations -3,111 -2,993
Finance expenses -3,021 -650
Taxes, excl. deferred taxes -628 -95
Share based compensation, share part
-1,174 -953
Gain/loss on sale of assets 285 534
Free cash flow metric -3,579 -7,816
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EUR thousand 1-3/
20201-3/2019
Cash flows from operating activities 6,497 1,626
Net change in cash and cash equivalents 1,250 -5,879
Cash and cash equivalents 32,558 35,117
Gross financial debt 62,264 53,669
Net financial debt 29,706 18,522
C A S H F L O W A N D B A L A N C E S H E E T
▪ Improvement in operating cash flows driven by higher profitability
▪ Heightened efforts on receivables collection
▪ Increase in gross and net financial debt mainly driven byPIK interest and principalaccrual
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