Basware Interim Report Q1/2011/media/Files/B/... · Segment: Finland Q1/2011 13 EUR thousand Q1/10...
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1 Basware Interim Report Q1/2011 CEO Ilkka Sihvo and CFO Mika Harjuaho April 13, 2011
Transcript of Basware Interim Report Q1/2011/media/Files/B/... · Segment: Finland Q1/2011 13 EUR thousand Q1/10...
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Basware Interim
Report Q1/2011
CEO Ilkka Sihvo and
CFO Mika Harjuaho
April 13, 2011
Contents
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• Business and market review of Q1/2011
• Segment review of Q1/2011
• Financial review of Q1/2011
• Future outlook
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Business and market review of Q1/2011
CEO Ilkka Sihvo
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• Focused strategy for 2011-2014 on international growth
• Strategic Invoice Automation cooperation started with Iron Mountain
• Successful share issue in February
• Basware ranked 2nd in Forrester Wave eProcurement solutions
• Net sales grew by 12.7 percent to EUR 26 058 thousand
• Operating profit grew by 38.4 percent to EUR 2 957 thousand
• Automation services (SaaS and e-invoicing) grew by 48.6 percent
• Share of recurring revenue (Maintenance and Automation services) 48.3 percent of net sales
Highlights of Q1/2011
Solid growth in Q1/2011
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0
3000
6000
9000
12000
15000
18000
21000
24000
27000
30000
33000
Q1/09 Q1/10 Q1/11 Q2/09 Q2/10 Q3/09 Q3/10 Q4/09 Q4/10
Net Sales Operating ProfitEUR
Thousand
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March 2011 “The Forrester
Wave™: eProcurement
Solutions, Q1 2011”
Basware ranked 2nd in Forrester Wave™
eProcurement Solutions, Q1 2011
Evaluation criteria:
• Current offering
• Strategy
• Market presence
IT market forecast for 2011
Global US
Year 2010 2011 2012 2010 2011 2012
Software 7.5 7.1 8.9 8.3 8.4 10
IT Services,
total 5.0 7.3 7.5 3.5 7.4 7.5
All IT 7.0 7.0 8.7 7.7 7.2 9.1
Forecast is based on market reports and estimates from leading
independent research companies made at the end of 2010 and in
the beginning of 2011.
Purchase to Pay market is expected to grow over 10% in 2011.
Operating environment trendsEnd of 2010 and beginning of year 2011
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Increased M&A activity
on IT markets
Increased activity in IT
markets in building new
partnerships in different
regions
To strengthen and
expand supplier
networks
To expand market
presence and visibility
- Consolidation is expected to continue and
- Role of services is expected to gain more importance in
companies‘ offering portfolio
Automation services/transaction volumes
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0
2
4
6
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12
14
16
18
20
0,0
2,0
4,0
6,0
8,0
10,0
Q1 Q2 Q3 Q4
2010 2011 Total 2010
Million
transactions
Million
transactions
Basware Open Network approach
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Basware is leading transaction message operator
in between suppliers and buyers. All purchase and
e-invoicing messages are delivered through
Basware network.
We also provide
interoperability
with 110 other
operators.
And each party only pays to their
operator. No hidden extra
costs.
€
€
Suppliers
& ~10 000 other buyer customers + over 200 000 active suppliers + 110 operator partners
to be reached with e-invoicing / electronic purchase orders
Buyers
Basware has simple pricing model. After
implementation customers pay simple low cost
transaction fee.
Basware Automation Services –
network effect for revenue generation
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Products
Basware Solution
Customers
Network
Non-Basware
Solution Customers
In Q1/2011 Automation Services grew by 48.6 %
The estimated revenue to be recognized for current Automation Services agreements in production in the next twelve months is EUR 15.8 million, growth of 8.0 percent compared to the estimate made at the end of the previous quarter
Transaction volume in Q1/2011 was 4.4 Million.
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Segment Review of
Q1/2011
CEO Ilkka Sihvo
Segment: Finland Q1/2011
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EUR thousand Q1/10 Q2/10 Q3/10 Q4/10 Q1/11
Net sales 12 191 13 763 11 641 16 011 13 656
Growth of net sales,% 7.6% 10.9% 1.4% 4.8% 12.0%
Operating profit 1 092 1 616 2 238 2 757 1 782
Number of personnel 501 526 547 584 639
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Net Sales
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Operating Profit
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Personnel
Highlights: Invoice Automation and e-invoicing services to a Finnish building industry supplier,
scan & capture service to construction group Lemminkäinen, Global Invoice Automation roll-out
with one of the leading shipping lines of the world. Profitability was impacted by decrease in
R&D costs included in the results relating to capitalization of NextGeneration development.
Segment: Scandinavia Q1/2011
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EUR thousand Q1/10 Q2/10 Q3/10 Q4/10 Q1/11
Net sales 5 253 6 232 4 994 7 708 6 096
Growth of net sales,% -1.2% -0.7% 10.9% 25.6% 16.0%
Operating profit 762 926 890 1 557 1 122
Number of personnel 127 123 124 124 120
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Q1/10Q2/10Q3/10Q4/10 Q1/11
Net Sales
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Operating profit
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Q1/10 Q2/10 Q3/10 Q4/10 Q1/11
Personnel
Highlights:
•SaaS deals to mid market have started promisingly
• Solid growth and improvement in profitability
• All countries contributed to the growth
Segment: Europe Q1/2011
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EUR thousand Q1/10 Q2/10 Q3/10 Q4/10 Q1/11
Net sales 5 069 5 538 4 782 5 959 5 518
Growth of net sales,% 8.6% 28.2% 16.5% 5.9% 8.9%
Operating profit 509 683 419 743 520
Number of personnel 122 124 126 131 136
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Net Sales
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Operating Profit
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Personnel
Highlights:
• Especially License sales and Automation Services contributed to the growth
• Strong sales performance especially in France
Segment: Other Q1/2011
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EUR thousand Q1/10 Q2/10 Q3/10 Q4/10 Q1/11
Net sales 2 373 2 719 3 111 3 898 2 611
Growth of net sales,% 98.6% 141.0% -21.9% 34.5% 10.1%
Operating profit 179 191 269 284 -54
Number of personnel 48 54 57 61 63
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Q1/10 Q2/10 Q3/10 Q4/10 Q1/11
Personnel
Highlights: South-Australian Government roll out project completed in
February, large Supplier Portal deal to a Fortune 100 company in North
America, Iron Mountain partnership in North America
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Financial
Review of
Q1/2011
CFO Mika Harjuaho
Q1/2011 in Brief
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EUR Million Q1/11 Q1/10
Net sales 26.1 23.1
Growth of net sales, % 12.7% 6.5%
Operating profit (EBIT) 3.0 2.1
Change of operating profit % 38.4% 34.2%
% of net sales 11.3% 9.2%
Net profit/loss 2.3 1.6
Share of recurring revenue, % 48.3% 45.9%
Earnings per share, euro 0.19 0.14
Growth of earnings per share,
%34.9% 144.4%
Fixed costs 20.0 18.5
Growth of fixed costs, % 7.8% 5.2%
Personnel 31.3. 981 808
Growth of personnel, % 21.4% 10.7%
Personnel costs 14.7 13.7
R&D expenses 3.5 3.7
• Growth of net sales 12.7%• Growth of net sales incomparable currencies 10.6%
• Growth of operating profit 38.4%
• Growth of Automation services (SaaS and e-invoicing) 48.6%
• Recurring revenue (Maintenance and Automation services) 48.3% of net sales
•The estimated revenue to be recognized for current Automation Services agreements in production in the next twelve months is EUR 15.8 million
• R&D costs included in the results amount to EUR 2.6 million (3.4)
Net Sales by Operation Q1/2011
8 879
8 650
4 814
3 715
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 consulting
Maintenance = Continuous, annually charged fees (18-20% of license sales)
Automation Services = Software as a Service, einvoicing, scan and capture
Maintenance,
growth
of 9.4%
License
sales, growth
of 3.6%
Automation
services,
growth
of 48.6%
Professional
Services,
growth of
9.9%
Development of Quarterly Net Sales and Profit
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EUR thousand Q1/11 Q1/10 Q2/11 Q2/10 Q3/11 Q3/10 Q4/11 Q4/10
Net sales 26 058 23 132 26 612 23 202 30 149
Growth % 12.7% 6.5% 17.1% 7.4% 13.3%
Other operating income 42 50 55 43 42
Materials and services 1 948 1 288 1 754 1 593 1 760
Personnel expences 14 738 13 703 15 184 11 959 16 491
Depreciation and write-offs 1 237 1 236 1 309 1 294 1 278
Other operating expenses 5 219 4 818 5 414 4 991 5 725
Operating profit 2 957 2 136 3 006 3 408 4 937
0
10 000
20 000
30 000
40 000
Q1 Q2 Q3 Q4
2011 201022 %
26 %23 %
29 %
2010
Q1 Q2 Q3 Q40
2 000
4 000
6 000
Q1 Q2 Q3 Q4
2011 2010
Net Sales Profit
Net Sales Q1/2011
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Net sales 1-3/11 1-3/10 Change, %
Finland 13 656 12 191 12.0
Scandinavia 6 096 5 253 16.0
Europe 5 518 5 069 8.9
Other 2 611 2 373 10.1
Net sales between segments -1823 -1754 -3.9
Group total (IFRS) 26 058 23 132 12.7
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
Finland Scandinavia Europe Other
1-3/2011 1-3/2010
Finland Scandinavia Europe Other
Operating Profit Q1/2011
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Operating profit Q1/11 Q1/10 Change,%
Finland 1 782 1 092 63.1
Scandinavia 1 122 762 47.1
Europe 520 509 2.3
Other -54 179 -130.2
Operating profit between segments -413 -406 -1.7
Group total (IFRS) 2 957 2 136 38.4
-100 400 900 1400 1900
Finland
Scandinavia
Europe
Other
Q1/2010
Q1/2011
Operating Profit % (EBIT %) Trend
Rolling 12 Month Quarterly Average
5,0 %
7,0 %
9,0 %
11,0 %
13,0 %
15,0 %
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Operating profit (EBIT) for 2011 is expected to be over 13 percent of net sales.
Products
• R&D expenses EUR 3 450 thousand (EUR 3 748 thousand)
- Decrease of 7.9 percent
- 13.2 percent of net sales (16.2%)
- EUR 809 thousand (EUR 324 thousand) of expenses capitalized
• Products unit personnel 270 (192)
- Units in Finland and India
- Future recruitments in India
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R&D expenses 13.2 % of net
sales
27.5 % of personnel
Personnel
• In total 981 (808) employees at the end of March 2011
• Growth of 21.4 %
• 56.1 (49.6) percent abroad
• Average age 35.4 years
25
Master
Bachelor
College and other
Sales & Sales
Support
Customer Service
R&D
Admin
Education Personnel groups
Finance and Investments
• Total assets on the balance sheet EUR 129 048 thousand (EUR 95 606 thousand)
• Increase of EUR 27.4 Million in Investment in non-restricted equity reserves
• Cash and cash equivalents EUR 48 295 thousand(EUR 16 351 thousand)
• Cash flow from operations EUR 14 623 thousand (EUR 11 115 thousand)
• Equity ratio 71.0 % (59.1 %)
• Gearing -50.7 % (-19.4 %)
• Total gross investments EUR 1 219 thousand(EUR 845 thousand)
- Includes capitalized R&D costs and acquisitions
Share and Shareholders
• Number of shareholders 15 518 (16 416 ) at the end of
March 2011
• Share price development during January–March 2011
- Average price of the share EUR 25.26 (EUR 16.99)
- Highest EUR 27.00 (EUR 18.58), lowest EUR 23.02 (EUR
15.00)
- Closing price EUR 26.40 (EUR 16.86)
• Traded shares 2 625 376 (400 317)
- 21.5 % (3.5 %) of all shares
• Market capitalization EUR 337 933 966 (EUR 192 024 003)
Key Financials 2006-2010
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2006 2007 2008 2009 2010
Net sales
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2006 2007 2008 2009 2010
Operating profit
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PersonnelEUR
Thousand
EUR
Thousand
EUR thousand 2006 2007 2008 2009 2010
Net sales 59 954 73 270 86 098 92 654 103 094
Growth of net sales, % 43.9% 22.2% 17.5% 7.6% 11.3%
Share of recurring revenue, % 31.3% 31.9% 34.5% 40.7% 44.3%
Operating profit 8 078 7 512 8 679 11 824 13 487
% of net sales 13.5% 10.3% 10.1% 12.8% 13.1%
Personnel, 31.12. 528 658 731 761 913
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Future Outlook
CEO Ilkka Sihvo
Industry and Basware Outlook 2011
• According to market estimates released at the end of 2010 and in the beginning of 2011, the software purchases is expected to grow by 7.1 percent globally and by 8.4 percent in the United States.
• The IT services market is expected to grow by 7.3 percent globally and 7.4 percent in US in 2011.
• Basware software offers a competitive edge: integrated offering consists of new added value products and services.
• The company aims to become the leading company in e-invoicing globally.
• Automation services (includes SaaS and e-invoicing) grew by 48.6 percent in the first quarter of 2011.
• The company's long-term target is to grow annually more than 50% in SaaS, Connectivity Services and e-invoicing.
• The estimated revenue to be recognized for current Automation Services agreements in production in the next twelve months is EUR 15.8 million (growth from previous quarter 8.0 percent).
• In North America, the focus is on developing the company’s own sales channel and strategic partnerships.
• In Europe, development of own sales channel and profitable growth continues.
• 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.
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Industry and Basware Outlook 2011
Industry and Basware Outlook 2011
• 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.
• Basware has increased the role of acquisitions, a new executive level M&A functions has been established.
• The role of offshoring operations will continue to grow in the company's strategy.
• No change to 2011 guidance
• Net sales is expected to grow over 10 percent in 2011.
• Operating profit (EBIT) for 2011 is expected to be over 13 percent of net sales.
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report on
July 8, 2011
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