Basware Half Year Financial Report January−June 2022: Net sales and adjusted EBIT in line with expectations, one-off items related to the tender offer impacted reported EBIT

April-June 2022

• Cloud ARR order intake decreased 7.4 percent to EUR 5.2 million (EUR 5.6 million), which amounted to 9.7 percent organic decrease at constant currencies
• Net sales increased 5.2 percent to EUR 40,563 thousand (EUR 38,571 thousand), which amounted to 2.3 percent organic growth at constant currencies
• Cloud revenue increased 11.4 percent to EUR 33,024 thousand (EUR 29,633 thousand), which amounted to 8.1 percent organic growth at constant currencies
• EBIT decreased to EUR -8,755 thousand (EUR 1,800 thousand)
• Adjusted EBIT increased 2.1 percent to EUR 1,965 thousand (EUR 1,926 thousand)
• Loss for the period was EUR -9,737 thousand (EUR -1,407 thousand)
• Adjusted profit for the period was EUR 983 thousand (EUR -1,282 thousand)
• Earnings per share (diluted) were EUR -0.67 (EUR -0.10)
• Adjusted earnings per share (diluted) were EUR 0.07 (EUR -0.09)

January-June 2022

• Cloud ARR order intake increased 8.8 percent to EUR 9.2 million (EUR 8.5 million), which amounted to 6.5 percent organic growth at constant currencies
• Net sales increased 4.1 percent to EUR 79,441 thousand (EUR 76,313 thousand), which amounted to 1.8 percent organic growth at constant currencies
• Cloud revenue increased 10.8 percent to EUR 65,021 thousand (EUR 58,676 thousand), which amounted to 8.1 percent organic growth at constant currencies
• EBIT decreased to EUR -6,415 thousand (EUR 3,180 thousand)
• Adjusted EBIT increased 30.5 percent to EUR 4,383 thousand (EUR 3,385 thousand)
• Loss for the period was EUR -8,799 thousand (EUR -2,885 thousand)
• Adjusted profit for the period was EUR 1,999 thousand (EUR -2,707 thousand)
• Earnings per share (diluted) were EUR -0.61 (EUR -0.20)
• Adjusted earnings per share (diluted) were EUR 0.14 (EUR -0.19)

Key figures

[][][]
EUR thousand 4-6/ 4-6/ Change, 1-6/ 1-6/ Change, 2021
2022 2021 % 2022 2021 %
Net sales 40,563 38,571 5.2 79,441 76,313 4.1 153,155
Cloud revenue 33,024 29,633 11.4 65,021 58,676 10.8 119,996
Cloud ARR order 5,197 5,611 -7.4 9,226 8,479 8.8 17,064
intake

EBIT -8,755 1,800 N/A -6,415 3,180 N/A 7,144
Adjusted EBIT 1,965 1,926 2.1 4,383 3,385 30.5 7,501
EBITDA -4,518 5,852 N/A 2,015 11,077 -81.8 22,828
Adjusted EBITDA 6,202 5,977 3.8 12,813 11,255 13.8 23,186

Gearing, %[1] 79.5 55.4 43.5 79.5 55.4 43.5 72.5
Cash and cash 28,759 40,560 -29.1 28,759 40,560 -29.1 31,060
equivalents[1]
Cash flow from 3,851 1,278 201.3 6,241 7,636 -18.3 20,435
operating activities

Earnings per share, -0.67 -0.10 570.0 -0.61 -0.20 205.0 -0.99
diluted, EUR
Adjusted earnings 0.07 -0.09 N/A 0.14 -0.19 N/A -0.96
per share, diluted,
EUR

Personnel[1] 1,382 1,340 3.1 1,382 1,340 3.1 1,347

[1 ][1]At the end of the period.

The half year financial report is unaudited.

Guidance for 2022           

Basware updated its full year 2022 guidance on 27 June 2022 as follows:

• Order Intake to grow between 15 and 35 percent at organic constant currencies
• Net sales to grow between 3 and 6 percent at organic constant currencies
• EBIT between EUR 7 and 10 million, excluding any impact from one-off expenses related to the tender offer from Sapphire BidCo Ltd

Previous guidance given on 3 February 2022:

• Order Intake to grow between 15 and 35 percent at organic constant currencies
• Net sales to grow between 3 and 6 percent at organic constant currencies
• EBIT between EUR 7 and 10 million

CEO Klaus Andersen:

"Second quarter of 2022 developed according to our expectations both in terms of net sales and profitability. Total net sales grew 5.2% as reported and 2.3% at constant currencies y-o-y to EUR 40.6 million. Cloud revenue continued to deliver solid growth of 11.4% as reported and 8.1% at constant currencies y-o-y, amounting to EUR 33.0 million. Consulting revenue was EUR 6.8 million, a decrease of 5.7% as reported and 7.3% at constant currencies y-o-y. Cloud revenue growth was mainly driven by our SaaS business which grew 15.3% as reported and 11.2% at constant currencies, while our implementation partner strategy continued to impact our Consulting revenues, especially in North America. Profitability developed well in line with expectations during the second quarter and adjusted EBIT increased with 2.1% y-o-y to EUR 2.0 million, excluding the impact from the one-off cost items related to the tender offer. Reported EBIT was EUR -8.8 million including one-off cost items. Our cash position was strong, EUR 28.8 million at the end of the quarter.

This quarter we experienced indications of a shift in the external business environment compared to the first quarter of the year. The impact of the war in Ukraine as well as continued high inflation and cost pressures leading to economic uncertainty slowed customer decision making and investments, in particular in markets in Central Europe. Not all regions were equally impacted, and the total order intake amounted to EUR 5.2 million, down 7% y-o-y, which is a solid result in a changing business environment. As a testament to the value we deliver to our customers, expansion sales with existing customers remained strong and made up 57% of the total order intake. New logo business accounted for 43% of total order intake and again multiple new customers selected our advanced Networked Accounts Payable solution during the quarter. Well-known brand names such as Mauser, Black and McDonald and VYV3, among others. In total we welcomed more than 30 new customers in Q2. Partner influenced sales continued to contribute to our order intake in line with previous quarters. During Q2, we also added a new system integrator partner in France, Viseo, to our global partner network. Viseo is focused on providing digital transformation services that help customers adapt to the regulatory compliance requirements of e-invoicing, which come into effect from 2024 in France.

During Q2 we saw a continued improvement in our customer feedback as seen in the Gartner Peer Insights Business-to-Business customer review platform. Basware is now in the top three vendors for customer satisfaction with an average rating of 4.6 out of 5 for the last 12 months as at the end of June 2022.

Outlook for the rest of the year remains unchanged. Order intake, net sales and profitability is expected to develop in accordance with our guidance for the remainder of the year. Due to the tender offer activities, an update to our EBIT guidance was given on the 27th of June 2022. We clarified our full year EBIT guidance to be net of one-off expenses related to the tender offer."
Results conference call

Basware arranges a briefing for analysts and press, where CEO Klaus Andersen and CFO Martti Nurminen will comment on the events and financial performance of the past quarter. The results briefing can be followed via live webcast or teleconference. A recording of the briefing will be available shortly after the event.

Time: Thursday, 21 July 2022 at 2 p.m. EEST / 12 p.m. BST
Place: Basware HQ, Linnoitustie 2, Cello-building, Espoo, Finland
Video webcast and teleconference registration: https://basware.videosync.fi/2022-q2-results (https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fbasware.videosync.fi%2F2022-q2-results&data=05%7C01%7CKatariina.Kataja%40basware.com%7C4507fd8a31204b2988c908da48616717%7C9737b55a445548e48c47a26a6ee65c97%7C1%7C0%7C637901880432329524%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=qCCYcLEiFWAJxOM0qpP4z9vGQ%2FQODA8apx1XH%2BEilzM%3D&reserved=0)

Teleconference numbers:

Finland: +358 981 710 310
Sweden: +46 856 642 651
United Kingdom: +44 333 300 0804
United States: +1 631 913 1422

PIN: 11564618#

To join in analysts and press briefing, please contact ir@basware.com.
Basware Corporation

Klaus Andersen
CEO

For more information, please contact:
Martti Nurminen, CFO, Basware Corporation
Tel. +358 (0)40 751 7194, martti.nurminen@basware.com
Distribution:
Nasdaq Helsinki
Main media
investors.basware.com/en

About Basware:
Basware is a leading provider of Networked Procure-to-Pay solutions with the largest open e-invoicing network in over 180 countries. Our cloud-based technology enables enterprises to fully manage their spend, mitigate financial risk and reduce operating costs through automation of finance, procurement, accounts payable and accounts receivable processes. Our open technology ecosystem and extensive partner network have helped over 6,500 businesses in 60 countries move towards 100% spend visibility which enables better business decisions - a concept we call Visible Commerce. Basware's solutions support the transition to a lower-carbon economy by digitization and automation. Basware is traded on the Helsinki exchange (BAS1V: HE). Find out more at https://investors.basware.com/en.