INVESTOR PRESENTATION Q2 2018 Vesa Tykkyläinen, CEO Niclas Rosenlew, CFO July 18, 2018
IMPORTANT NOTICE The following information contains, or may be deemed to contain, forward-looking statements. These statements relate to future events or future financial performance, including, but not limited to, expectations regarding market growth and development as well growth and profitability of Basware. In some cases, such forward-looking statements can be identified by terminology such as expect, plan, anticipate, intend, believe, estimate, predict, potential, or continue, or the negative of those terms or other comparable terminology. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Future results 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 forwardlooking statements, unless obligated to do so pursuant to an applicable law or regulation. Nothing in this presentation constitutes investment advice and this presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities of Basware or otherwise to engage in any investment activity.
CEO REVIEW
SUCCESSFULLY COMPLETING CLEAN UP PHASE, INCREASING FOCUS ON ACCELERATING GROWTH Clean-up Consolidation of R&D sites Transition to AWS Sale of noncore assets Functional organization Scanning services outsourced Cloud focused strategy Performance culture and leadership changes Management become shareholders Country management Account management Partnering organization Growth
FOUNDATIONS ALREADY IN PLACE TO ACCELERATE GROWTH Existing sales and marketing ramp-up Improving sales pipeline Quota carriers +40% YE 2018 vs. YE 2017 Marketing pipeline +60% Investment in sales and marketing will increase +12% in Q2 2018
WHERE GROWTH WILL COME FROM Key markets Existing customers Partnerships New markets Select M&A
SOLUTION LEADERSHIP IN Q2 2018 Basware recognized as Leader in Gartner s Magic Quadrant Smart PDF: invoice capturing for any machine-readable PDF Basware Assistant: virtual assistant for procurement
CUSTOMER SUCCESS EXAMPLES OF NEW CUSTOMER WINS AND TRANSFORMATIONS IN Q2 2018
Q2 HIGHLIGHTS STRATEGIC PRIORITY: CLOUD REVENUE GROWTH Cloud revenues 62% of total Cloud order intake at all-time high Clean-up phase completed, moving to accelerate growth
WHY BASWARE SIMPLIFY OPERATIONS SPEND SMARTER 100% Digital Processes Network is Differentiator EUR 15bn Market Opportunity
FINANCIAL REVIEW
ORGANIC CLOUD REVENUE GROWTH FEEDS TOTAL GROWTH H1 Organic Cloud Growth at Constant Currencies Cloud as a proportion of Q2 total revenues Q2 Organic Total Growth at Constant Currencies +17% 62% +7% Cloud Non Cloud
EUR m RECORD TOTAL CLOUD ORDER INTAKE Total cloud order intake at all-time high 12,0 10,0 Includes all SaaS and Network recurring revenues 8,0 6,0 4,0 Time lag to visibility in revenues 2,0 5.5 6.4 9.5 11.0 0,0 Q2 2017 Q2 2018 H1 2017 H1 2018 Annual recurring revenue gross order intake is calculated by summing the total order intake in the period expressed as an ann ual contract value. This includes all SaaS and Network recurring revenues including transaction revenues. Gross order intake covers new cl oud customers, add-ons and renewal uplifts but excludes churn. There will be a time lag before this order intake is visible in net sales. *Organic constant currency growth rate
Non-Cloud Revenue Cloud Revenue Q2 2018 NET SALES PROGRESSION Headline growth impacted by FX and disposals SaaS and Transaction services combined grew 20.4%* Significant cloud potential in existing maintenance customer base being addressed Net sales by revenue type (EUR thousand) 4-6 2018 4-6 2017 Change Change* SaaS 9 663 8 372 15.4 % 26.2 % Transaction services 10 900 9 573 13.9 % 15.6 % Other cloud revenue 1 220 1 807-32.5 % -31.3 % Cloud Revenue total 21 783 19 752 10.3 % 15.6 % Maintenance 6 226 9 357-33.5 % -11.7 % License sales 646 1 120-42.3 % -21.9 % Consulting services 6 201 7 165-13.5 % 2.0 % Other non-cloud revenue 114-105 Non-Cloud Revenue total 13 186 17 536-24.8 % -4.8 % Group Total 34 969 37 287-6.2 % 7.0 % *On an organic basis at constant currencies
Q2 2018 PROFITABILITY Growth rates impacted by disposals and FX (EUR thousand) 4-6 2018 4-6 2017 Change Net sales 34 969 37 287-6.2 % Cost of sales -18 580-19 363-4.0 % Gross profit 16 389 17 924-8.6 % Sales and marketing -10 434-9 304 12.1 % Research and development -6 964-7 657-9.0 % General and administration -4 315-3 335 29.4 % Total operating expenses -21 712-20 296 7.0 % Other operating income and expenses -1 006-397 Operating profit/loss -6 329-2 769-128.6 % Adjustments 913 618 Depreciation and amortization -2 742-2 469 11.1 % Adjusted EBITDA -2 674 318
Q2 2018 CASH FLOW AND BALANCE SHEET Strong liquidity position with cash and undrawn bank facilities totalling EUR 51 million (EUR thousand) 4-6 2018 4-6 2017 Cash flows from operating activities -7 856-4 837 Net change in cash and cash equivalents -12 988-8 162 Cash and cash equivalents 41 413 23 610 Total available liquidity* 51 413 33 610 *Includes undrawn bank facilities and short term deposits
2018 FULL YEAR OUTLOOK Basware s number one strategic priority is cloud revenue growth. FOR 2018, BASWARE EXPECTS*: Cloud revenues between EUR 90 and EUR 95 million Total costs slightly above 2017 levels** *On an organic basis at constant currencies **Excluding D&A and adjustments to EBITDA