January 26, 2010 Basware Financial Results Q4/2009 and full year 2009 CEO Ilkka Sihvo and CFO Mika Harjuaho 1.

January 26, 2010

Basware Financial Results Q4/2009 and full year 2009

CEO Ilkka Sihvo and CFO Mika Harjuaho

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Contents

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• Q4/2009 in Brief

• 1-12/2009 in Brief

• Business Review of Q4/2009

• Financial Review of Q4/2009

• Financial Review of 1-12/2009

• Future Outlook

Basware in Brief

3

• Headquarters in Espoo, Finland and altogether 10 subsidiaries in Europe, in the US and Asia-Pacific

• Approximately 1 000 000 users globally in 1500+ large organizations

• Net sales 92 654 thousand at the end of December 2009 (86 098 thousand)

• 761 employees at the end of December 2009 (731)

Breakthrough to Global Leader

Q4/2009 in Brief

4

EUR Million Q4/2009 Q4/2008

Net sales 26.6 26.3

Growth of net sales, % 1.2% 13.4%

Operating profit (EBIT) 4 .1 4.1

Change of operating profit % -1.6% 114.2%

% of net sales 15.3% 15.7%

Net profit/loss 4.0 3.3

Earnings per share, euro 0.35 0.28

Growth of EPS % 24.0%

Fixed costs 19.7 19.9

International operations’ share of net sales

53.9% 51.4%

Resellers’ share of product sales

11.1% 14.9%

Personnel 31.12. 761 731

• Excellent performance in recession

• Operating profit over 15 percent and at the last year’s level

• Growth of EPS 24.0 percent

• Fixed costs tightly managed

• Automation Services grew strongly by 162.3%

• Maintenance grew by 13.3%

• International operations’ share of net sales continued to grow, growth 6.0%

• Major deals in North America in Q4

1-12/2009 in Brief

5

EUR Million 1-12/09 1-12/08

Net sales 92.7 86.1

Growth of net sales, % 7.6% 17.5%

Operating profit (EBIT) 11.8 8.7

Change of operating profit % 36.2% 15.5%

% of net sales 12.8% 10.1%

Net profit/loss 9.1 6.6

Cash flow from operating activities

14.7 8.3

Earnings per share, euro 0.80 0.56

Growh of EPS % 41.3%

Fixed costs 70.3 69.9

International operations’ share of net sales

54.2% 51.8%

Resellers’ share of product sales

9.9% 15.7%

Personnel 31.12. 761 731

• Excellent performance in recession

• Record-high profitability EUR 11.8 M and at 12.8%, growth 36.2%

• Growth of EPS 41.3%

• Growth of net sales 7.6%

• Strong operating cash flow at EUR 14.7 M

• Automation Services grew by 72.0%

• Maintenance grew by 18.7%

• International operations’ share of net sales continued to grow, growth 12.6%

• Order backlog EUR 14.6 Million, several new large Automation Services deals

Highlights of Q4/2009

6

Large Scan and Capture deal in North America in health care sector

Major Connectivity deal with Veolia Environmental Services in UK

Large Invoice Automation deals in North America in energy, retail and health care sectors

Basware strategy update for 2010-2012

Connectivity and Basware Invoice Processing solution deal to one of the world's largest manufacturers of building materials

Growth of Automation Services 162.3%

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Business Review of Q4/2009

CEO Ilkka Sihvo

2010 market estimate up-dates

Estimates made at the end of 2009

USA Western and Central Europe

2010 2010

Software market 9.2% 5.5%

IT market total 6.6% 4.0%

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Reporting

9

FinlandFinnish, Russian, Asia-Pacific (excl. Australia) and headquarter operations

ScandinaviaDenmark, Norway and Sweden

EuropeFrance, Germany, The Netherlands, UK

OtherNorth-America, Australia

License sales Enterprise Purchase to Pay and Financial Management Software

Professional Services

Maintenance

Automation Services SaaS Connectivity (e-invoicing, Scan&Capture)

Segment: Finland Q4/2009

10

EUR thousand Q4/08 Q1/09 Q2/09 Q3/09 Q4/09

Net sales 15 329 11 331 12 406 11 478 15 271

Growth of net sales,% 7.4% 8.0% -5.2% 8.2% -0.4%

Operating profit 4 385 849 1 295 2 546 3 024

Number of personnel 426 439 458 458 460

Q4/08 Q1/09 Q2/09 Q3/09 Q4/090

2,0004,0006,0008,000

10,00012,00014,00016,00018,000

Net Sales

Q4/08 Q1/09 Q2/09 Q3/09 Q4/090

1,000

2,000

3,000

4,000

5,000

Operating Profit

Q4/08 Q1/09 Q2/09 Q3/09 Q4/090

100

200

300

400

500

Personnel

Segment: Finland Q4/2009

11

New deals with e.g.

Fenet Oy, Parmarine Oy, Euteller Oy, Nurmijärven Sähkö Oy, UB Securitas Oy (United Bankers)

Highlights

Strong results in economic downturn

Successful scan and capture launch in Finland, large deals

Profile

Segment consists of Finnish, Russian, Asia-Pacific (excluding Australia) operations and head quarter functions

Altogether 14 resellers in the segment

Number of personnel 460 (426)

Segment: Scandinavia Q4/2009

12

EUR thousand Q4/08 Q1/09 Q2/09 Q3/09 Q4/09

Net sales 6 627 5 317 6 278 4 505 6 135

Growth of net sales,% 14.6% 26.6% 35.6% 34.4% -7.4%

Operating profit -21 666 1 249 212 1 041

Number of personnel 146 138 137 135 130

Q4/08 Q1/09 Q2/09 Q3/09 Q4/090

1,0002,0003,0004,0005,0006,0007,000

Net Sales

Q4/08 Q1/09 Q2/09 Q3/09 Q4/09-100

100

300

500

700

900

1,100

1,300

Operating profit

Q4/08 Q1/09 Q2/09 Q3/09 Q4/090

20406080

100120140160

Personnel

Segment: Scandinavia Q4/2009

13

Profile

Centrally managed units in Sweden, Norway and Denmark

The segment sells Enterprise Purchase to Pay solutions

Mainly direct salesNumber of personnel 130 (146)

Highlights and New deals with e.g.

• Public sector breakthrough in Denmark

• Folketinget• Arctic Securities• Tun Media AS• Norges vassdrags- og

energidirektorat• Rieber & Son

Segment: Europe Q4/2009

14

EUR thousand Q4/08 Q1/09 Q2/09 Q3/09 Q4/09

Net sales 5 264 4 666 4 318 4 104 5 629

Growth of net sales,% -6.9% 8.7% -3.4% -24.4% 6.9%

Operating profit -48 231 -32 465 902

Number of personnel 127 122 119 116 119

Q4/08 Q1/09 Q2/09 Q3/09 Q4/090

1,000

2,000

3,000

4,000

5,000

6,000

Net Sales

Q4/08 Q1/09 Q2/09 Q3/09 Q4/09-100

100

300

500

700

900

Operating Profit

Q4/08 Q1/09 Q2/09 Q3/09 Q4/090

50

100

150

Personnel

Segment: Europe Q4/2009

15

Profile

Segment consists of units in Germany, France, The Netherlands and UK

Segment sells Enterprise Purchase to Pay solutions

Altogether 35 resellers in the segmentNumber of personnel 119 (127)

Highlights and new deals with e.g.

• Successful Connectivity launch in UK

• Major Connectivity deal with Veolia Environmental Services in UK

• ABB Egypt and SaudiArabia

Segment: Other Q4/2009

16

EUR thousand Q4/08 Q1/09 Q2/09 Q3/09 Q4/09

Net sales 1 311 1 195 1 128 3 980 2 897

Growth of net sales,% 27.3% 75.8% -21.9% 154.0% 120.9%

Operating profit 118 137 -102 1 223 -517

Number of personnel 29 31 31 46 48

Q4/08 Q1/09 Q2/09 Q3/09 Q4/090

1,000

2,000

3,000

4,000

Net Sales

Q4/08 Q1/09 Q2/09 Q3/09 Q4/09-1,000

-500

0

500

1,000

1,500

Operating Profit

Q4/08 Q1/09 Q2/09 Q3/09 Q4/090

10

20

30

40

50

Personnel

Segment: Other Q4/2009

17

• Large Invoice Automation deals in North America in energy, retail and health care sectors

• Large Scan and Capture deal in North America in health care sector

Highlights and new deals

Profile

Segment consists units in North-America and Australia

Altogether 10 resellers in the segment

Number of personnel 48 (29)

Basware Automation Services

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Business Transactions: enables delivery of e-invoices and purchase messages between buyers and suppliers

Scan and Capture: converts paper invoices into electronic format

Basware Supplier Portal: enables suppliers to create einvoices and to handle purchase messages and catalogues

Basware Supplier Activation service: enables buyers to convert suppliers’ paper invoices into electronic invoices

Basware Connectivity

Services

Basware Connectivity Services

• Basware Connectivity is a new set of services which enable suppliers and buyers of all sizes and maturity to transact electronically

• Launched on the markets early 2009, clear demand for the solution

• New customers in all important markets including North America

• Basware strong player in connectivity markets

• Competitors local or small by transaction volumes

• Major success in 2009 extending Basware’s competitiveness and ensuring recurring revenue stream

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20

Financial Review of Q4/2009 and 1-12/2009

CFO Mika Harjuaho

Key Financials 2005-2009

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EUR thousand 2005 2006 2007 2008 2009

Restated

Net sales 41 666 59 954 73 270 86 098 92 654

Growth of net sales, % 29.4% 43.9% 22.2% 17.5% 7.6%

Operating profit 3 611 8 078 7 512 8 679 11 824

% of net sales 8.7% 13.5% 10.3% 10.1% 12.8%

Personnel, 31.12. 395 528 658 731 761

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

2005 2006 2007 2008 2009

Net sales

2005 2006 2007 2008 20090

100020003000400050006000700080009000

10000110001200013000

Operating profit

2005 2006 2007 2008 20090

100

200

300

400

500

600

700

800

PersonneltEUR tEUR

EUR Thousand Q4/09 Q4/08 1-12/09 1-12/08

Net sales 26 600 26 294 92 654 86 098

Growth of net sales, % 1.2% 13.4% 7.6% 17.5%

Operating profit 4 058 4 122 11 824 8 678

Change of operating profit, % -1.6% 114.2% 36.2% 15.5%

% of net sales 15.3% 15.7% 12.8% 10.1%

Net profit/loss 4 007 3 294 9 074 6 585

Earning per share, EUR 0.35 0.28 0.80 0.56

Fixed costs 19 660 19 911 70 343 69 900International operations' share of net sales,% 53.9% 51.4% 54.2% 51.8%Resellers' share of product sales,% 11.1% 14.9% 9.9% 15.7%

Q4/2009 and 1-12/2009 in Brief

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Development of Quarterly Net Sales

23

EUR thousand Q1/09 Q1/08 Q2/09 Q2/08 Q3/09 Q3/08 Q4/09 Q4/08

Net sales 21 717 18 233 22 729 22 312 21 609 19 259 26 600 26 294

Growth % 19.1% 7.0% 1.9% 25.5% 12.2% 26.1% 1.2% 13.4%

Other operating income 30 69 52 62 47 58 34 62

Materials and services 1 552 1 211 1 611 1 385 1 395 797 1 636 1 333

Personnel expences 12 896 11 765 13 444 12 608 11 113 10 933 14 841 15 093

Depreciation and write-offs 1 004 671 1 067 693 1 106 690 1 280 990

Other operating expenses 4 703 4 910 4 513 5 257 4 014 4 516 4 819 4 818

Operating profit 1 592 -254 2 146 2 431 4 028 2 381 4 058 4 122

Q1 Q2 Q3 Q40

5000

10000

15000

20000

25000

30000

2009 2008

23 %

25 %23 %

29 %

2009

Q1 Q2 Q3 Q4

Development of Quarterly profit

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EUR thousand Q1/09 Q1/08 Q2/09 Q2/08 Q3/09 Q3/08 Q4/09 Q4/08

Net sales 21 717 18 233 22 729 22 312 21 609 19 259 26 600 26 294

Growth % 19.1% 7.0% 1.9% 25.5% 12.2% 26.1% 1.2% 13.4%

Other operating income 30 69 52 62 47 58 34 62

Materials and services 1 552 1 211 1 611 1 385 1 395 797 1 636 1 333

Personnel expences 12 896 11 765 13 444 12 608 11 113 10 933 14 841 15 093

Depreciation and write-offs 1 004 671 1 067 693 1 106 690 1 280 990

Other operating expenses 4 703 4 910 4 513 5 257 4 014 4 516 4 819 4 818

Operating profit 1 592 -254 2 146 2 431 4 028 2 381 4 058 4 122

Q1 Q2 Q3 Q4-1000

0

1000

2000

3000

4000

5000

2009 2008

13 %

18 %

34 %

34 %

2009

Q1 Q2 Q3 Q4

Net Sales by Operation Q4/2009

7,800

6,388

7,913

2,498

EUR Thousand

Maintenance Professional Services

Licenses Automation Services

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Licenses = License sales of software products Professional Services = Former consulting, includes also Maintenance and Automation Services related consultingMaintenance = Continuous, annually charged fees (18-20% of license sales)Automation Services = Software as a Service, einvoicing, scan and capture

Maintenance, growth

of 13.3%

License sales,

decrease of 4.1%

Automation Services, growth

of 162.3%

Professional Services,

decrease of 18.0%

Net Sales by Operation 2009

29,757

31,174

23,755

7,967

EUR Thousand

Maintenance Professional Services

Licenses Automation Services

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Licenses = License sales of software products Professional Services = Former consulting, includes also Maintenance and Automation Services related consultingMaintenance = Continuous, annually charged fees (18-20% of license sales)Automation Services = Software as a Service, einvoicing, scan and capture

Maintenance, growth

of 18.7%

License sales,

decrease of 8.1%

Automation Services, growth

of 72.0%

Professional Services, growth of

2.1%

Net Sales by Primary Segment Q4/2009

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Net sales 10-12/09 10-12/08 Change, %

Finland 15 271 15 329 -0.4

Scandinavia 6 135 6 627 -7.4

Europe 5 629 5 264 6.9

Other 2 897 1 311 120.9Net sales between segments -3 333 -2 238 -49.0

Group total (IFRS) 26 600 26 294 1.2

Finland Scandinavia Europe Other

5,000

10,000

15,000

20,000

10-12/2009 10-12/2008

Finland ScandinaviaEurope Other

Operating Profit by Primary Segment Q4/2009

28

Operating profit Q4/09 Q4/08 Change,%

Finland 3 024 4 385 -31.0

Scandinavia 1 041 -21 5 068.2

Europe 902 -48 1 974.0

Other -517 118 -537.7

Operating profit between segments -393 -312 -26.0

Group total (IFRS) 4 058 4 122 -1.6

Finland

Scandinavia

Europe

Other

-1000 0 1000 2000 3000 4000 5000

Q4/2008Q4/2009

Cumulative correction for transfer pricing model in H2. Relates to acquired business in Australia in Q3/2009.

Net Sales by Primary Segment 1-12/2009

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Net sales 1-12/2009 1-12/2008 Change,%

Finland 50 486 49 517 2.0

Scandinavia 22 236 18 805 32.2

Europe 18 717 19 454 -3.8

Other 9 201 5 004 83.9

Net sales between segments -7 985 -6 682 -19.7

Group total (IFRS) 92 654 86 098 7.6

Finland

Scandinavia

Europe

Other

0 100002000030000400005000060000

1-12/20081-12/2009

Operating profit by Primary Segment 1-12/2009

30

Operating profit 1-12/2009 1-12/2008 Change,%

Finland 7 714 7 898 -2.3

Scandinavia 3 169 1 017 211.4

Europe 1 566 -74 2 224.8

Other 741 289 155.9

Operating profit between segments -1 365 -452 -201.8

Group total (IFRS) 11 824 8 679 36.2

Finland

Scandinavia

Europe

Other

-2000 0 2000 4000 6000 8000 10000

1-12/20081-12/2009

Development of Profit Q4/2009 and 1-12/2009

31

EUR Thousand Q4/09 Q4/08 1-12/09 1-12/08

Operating profit 4 058 4 122 11 824 8 679

Change of operating profit,% -1.6% 114.2% 36.2% 15.5%

% of net sales 15.3% 15.7% 12.8% 10.1%

Profit before tax 4 038 3 862 11 590 8 410

Net profit/loss 4 007 3 294 9 074 6 585

Earnings per share, EUR 0.35 0.28 0.80 0.56

Fixed costs 19 660 19 911 70 343 69 900

Personnel costs 14 841 15 093 52 294 50 399

R&D expenses 3 847 4 385 14 781 15 518

Products

• R&D expenses EUR 14 781 thousand (EUR 15 518 thousand)

- Decrease of 4.7 percent

- 16.0 percent of net sales (18.0%)

- EUR 1 454 thousand of costs capitalized i.e. 9.8%

• Products unit personnel 195 (171)

- Units in Finland and India

- Future recruitments in India

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R&D expenses 16.0% of net sales

25.6% of personnel

Personnel

• In total 761 (731) employees at the end of December 2009

• 47.4 percent abroad

• Average age 36.6 years

33

Mas-ter

Bachelor

Col-lege and

other

Sales &

Sales

Support

Cus-tome

r Ser-vice

R&D

Admin

Education Personnel groups

Finance and Investments

• Total assets on the balance sheet EUR 87 287 thousand (EUR 81 909 thousand)

• Cash and cash equivalents EUR 12 210 thousand(EUR 8 777 thousand)

• Cash flow from operations EUR 14 732 thousand (EUR 8 331 thousand)

• Equity ratio 64.8% (59.5%)

• Gearing -5.3% (9.3%)

• Total gross investments EUR 7 448 thousand (EUR 12 476 thousand)

- Includes capitalized R&D costs and acquisitions

Share and Shareholders

• Number of shareholders 16 480 (17 120) at the end of December 2009

• Share price development during January–December 2009:

- Average price of the share EUR 10.79 (EUR 7.53)

- Highest EUR 14.66 (EUR 10.45), lowest EUR 6.60 (EUR 6.00)

- Closing price EUR 14.52 (EUR 6.59)

• Traded shares 2 038 565 (2 298 467)

- 17.9% (20.1%) of all shares

• Market capitalization EUR 165 206 004 (EUR 75 301 011)

• Basware’s Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.36 per share (2008: EUR 0.23) be paid for 2009.

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Future Outlook

CEO Ilkka Sihvo

Industry and Basware Outlook 2010

• Uncertainty in world economy- Market forecasts updated towards the end of 2009 expect the software

market to increase by 9.2 percent in 2010 in the United States and by 5.5 percent in Western and Central Europe. 

- The entire IT market is expected to grow by 6.6 percent in the United States and by 4.0 percent in Western and Central Europe in 2010.

• Competitive position strong, Automation Services supporting overall product offering.

• The company's long-term target is to grow annually more than 50% in SaaS, Connectivity Services and e-invoicing. Target is to become one of the leading e-invoicing companies in the world.

• A program to invest in the growth of Basware Automation Services (SaaS, e-invoicing service and Scan and Capture) has been initiated as of the beginning of 2010

• Automation Services order backlog: EUR 14 630 thousand

Industry and Basware Outlook 2010

• Strategic growth markets are North America, Germany, UK and France based on market size and opportunities.

• In Finland and Scandinavia, the focus is on profitability, and moderate growth is supported by the company's expanded product portfolio and the development of the service business.

• The number of the Group's personnel will increase mainly in Automation Services and R&D activities during the year. The number of personnel will increase the most in India, which will enable growth with a more moderate increase in costs.

• Additional investments required by growth will be moderately realized, provided that net sales and profitability have realized in accordance with expectations.

• Review of acquisition possibilities continues: Automation Services, distribution channel and product portfolio

• Basware expects its net sales to develop positively on the level of 2009.

• Operating profit (EBIT) for 2010 is expected to be from 10 to 15 percent of net sales.

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Next interim report on April 15, 2010

Analyst and press briefing takes place on April 15, 2010 at 11.00 in Hotel Kämp, Pohjoisesplanadi 29, Helsinki, Finland.

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