SIMPLIFY
OPERATIONS,
SPEND
SMARTER
FEBRUARY 2017
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 forward-looking 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.
WHY BASWARE
Huge
Market
Opportunity
THE
Market
Leader
Cloud
Focused
Strategy
3
SIMPLIFY OPERATIONS,
SPEND SMARTER
The Problem
The Solution
Uncontrolled
spending
Connect
Inefficient manual
processes
Optimize
Poor cash flow
visibility
Manage
4
HELPING OUR CUSTOMERS REALIZE
TOMORROW’S FINANCIAL GOALS TODAY
>1 million
organisations
connected to
our Network
2500+ large
customers
use our P2P
software
60%
straight
through
invoice
processing
€450,000
500,000
E-invoices delivered annually
direct cost savings
Process over
90% 40%
66%
of invoices without
any manual
intervention
cost savings
Hitting on-time payment
target rate of over
Delayed/denied
85%
$457,000 on
$7.6 million in spend
Reduction in AP
headcount
75%
Reduction of paper
£176,000 annual savings
Reduced invoicing
costs by
75%
Receive
97%
of invoices as
electronic
invoices
60%
e-invoicing
5
MEGA TRENDS DRIVING DEMAND
FOR BASWARE’S SERVICES
Digitalisation
Open Networks
e-commerce
Public Sector Initiatives
Big Data
Robotics and AI
Disruption of Traditional
Financing Models
Automation
6
SIGNIFICANT MARKET OPPORTUNITY
Underpenetrated
market
EUR 15 billion
Market potential(1)
is global leader
Largest e-invoicing network
No. 1 in Accounts Payable
Top 3 in Procurement
Competition is
fragmented
EUR
149 million
EUR 3.5
billion
Current market(1)
Basware 2016 revenues
(1) Annual spend on source-to-pay and e-invoicing network services for key,
corporate, SMB medium and public sector customers in Europe and North America.
Source: Basware, Forrester, Gartner, Billentis, EESPA
7
RECOGNIZED MARKET LEADER
Procure to Pay Navigator 2016
Leader with highest score for Adaptability
Basware scores highest in five categories
“an impressive company that offers a leading solution among global P2P providers”
8
OPEN NETWORK IS DIFFERENTIATOR
Largest
e-invoicing network
Open Network
Philosophy
Multi-lingual,
Multi-format
Global
Trusted Partner
>100 million
220+
>70
Transactions
annually
interoperability
partners
eInvoice formats
supported
Used in more
than 100
countries
>EUR500 billion
1M+
annual spend on
Basware’s network
Active buyers
and suppliers
VAT compliance
in more than 50
countries
Connected to main
government
hubs
Huge Data Asset
9
GEOGRAPHICAL AND INDUSTRY REACH
IS DIFFERENTIATOR
Supporting customers in all industries
Manufacturing
Food / Beverage
Energy / Utility
Telco / Media
Healthcare / Pharma
Automotive
Services
Industrials
Transport / Lodging
Retail
Finance / Professional
Public Sector
Across the globe
Geographies where Basware supports customers
10
INNOVATION IS DIFFERENTIATOR
Basware is a Visionary
We invented networked
P2P and have continued to
innovate since then,
leading the market and
maintaining our product
superiority.
Invents P2P
software
Creates its
e-invoicing
network to enable
true AP automation
Recognized by
industry analysts as a
leader in providing
analytics for
customers
Expands value
added services to
utilize Basware’s
huge network data
asset
11
END-TO-END SOLUTION IS DIFFERENTIATOR
NETWORK /
E-INVOICING
• Stronger
relationships
• Foundation for
sustainable growth
• 100% e-Invoicing
from day one
CONNECT
AP AUTOMATION
• Increased
productivity
• Streamlined
processes
• Automate all invoices
from all systems
ANALYTICS
• Analytics & KPIs
• Complete spend
visibility
• Higher compliance
• Risk mitigation
• Direct and indirect
spend
MANAGE
WePROCUREMENT
• Consumer
experience
• Collaboration with
AP and suppliers
• New savings
opportunities
FINANCING
SERVICES
• Eliminate payment
friction
• Improved DSO, DPO,
net operating income
and return on capital
• More cash for growth
OPTIMIZE
12
HOW BASWARE WILL SEIZE THE OPPORTUNITY
Sales &
Marketing
effectiveness
High
performance
culture
Customer
experience
Extend P2P
Leadership
Integrated &
high-quality
offering
Grow the
Network
Cloud
Revenue
Growth
Innovation
Operational
excellence
Expand Value
Added Services
13
2020 STRATEGY GOALS
2020 Strategic Goals
Strategic Priority
Cloud Revenue Growth
Cloud revenue growth
>20% CAGR
on an organic basis
Annual net sales
>EUR 220 million
Recurring revenue
~ 80% of net sales
Continue to improve
underlying profitability
* Cloud revenue includes transactions services, SaaS and other subscription and financing services revenue excluding alliance fees
** Recurring revenue consists of net sales excluding license sales, consulting revenue related to deliveries, and alliance fees
14
STRONG CLOUD GROWTH
TOTAL REVENUES IMPACTED BY TRANSITION
Net Sales, EUR millions
Cloud
Total
Non-Cloud
100
100
90
90
80
80
70
70
60
60
160
140
120
+
50
40
100
=
50
40
30
30
20
20
10
10
80
60
40
0
2013
SaaS
2014
2015
0
2013
2016
Transaction Services
20
Other Cloud
2014
Maintenance
2015
License
0
2013
2016
Consulting
2014
2015
2016
Other Non-Cloud
15
SHIFT IN REVENUE MIX SUPPORTS
FUTURE GROWTH ACCELERATION
2013
2016 Q4
Cloud
Non-Cloud
Cloud Revenues
Approaching 50%
2010
2016 Q4
US, UK, Germany
Other International
International
Business Growing
Finland
Sales and marketing
expansion
Adjusted
EBITDA
(EURm)
HISTORICALLY PROFITABLE &
CASH GENERATIVE
20
10
0
+
Ongoing investments in
product development
Net Operating
Cashflow
(EURm)
2010
2011
2012
2013
2014
2015
2016
2012
2013
2014
2015
2016
20
10
0
-10
2010
2011
Impact on 2016
profitability
R&D as %
of Net Sales
=
20%
10%
0%
2010
2011
R&D (expensed)
2012
2013
2014
2015
2016
R&D (capitalized)
17
ACQUISITIONS SUPPORT
BASWARE STRATEGY
WITH M&A OUR PRIORITIES ARE...
•
Extend Basware Network
•
Consolidate P2P competition
•
Strengthen our offering
•
Focus on key markets
OUR KEY CRITERIA INCLUDES...
•
High share of cloud revenues
•
Visible revenue synergy
opportunity
•
Profitable or clear path to
profitability
•
Substantial benefits to customers
DISCIPLINED APPROACH TO ACQUISITIONS
Year
Company
Country
Key rationale
2016
Verian
US
Strengthen market position in the US. Extend Network to Verian customers.
Strengthen eProcurement
2015
Procserve
UK
Access to UK public sector customers to leverage the eInvoicing opportunity
2013
Certipost
Benelux
Gain a significant position in the Benelux e-Invoicing market
2012
1st BP
Germany
Become a leading e-Invoice operator in Germany
18
WHY BASWARE
Huge
Market
Opportunity
THE
Market
Leader
Cloud
Focused
Strategy
19
APPENDIX
SUPPORTING
MATERIALS
THE SAAS TRANSITION: LOWER UPFRONT
BUT HIGHER RECURRING REVENUES
On-Premise Deal:
Upfront License Payment
+ Annual Maintenance Payments
Year 1
Year 2
Year 3
Year 4
Cumulative Revenues from Year 1
Year 5
Year 1
License and Maintenance
Year 2
Year 3
Year 3
Year 4
Year 5
License & Maintenance
SaaS Deal:
Monthly Payments
Year 1
Year 2
SaaS
Cumulative Revenues from Year 2
Year 4
SaaS
Year 5
Year 2
Year 3
Year 4
Maintenance
Year 5
SaaS
21
THE BASWARE EXPERIENCE
EMPLOYEE REQUESTER
“I need something.”
• Special order
requests
• Automated
calculations
• Online shopping
experience
• Items on contract
• All orders captured
“I got my stuff easily and quickly, and I didn’t
need to know procurement to do it. And I feel
good about helping the company, too.”
• I came in 12% under budget!
• Woohoo – I am in the leader
position in savings!
• I received it!
• I can tell the system
• I know where my order is
• I know who to ping
22
THE BASWARE EXPERIENCE
THE APPROVER
• Accessible from my
smartphone
• On the Go Approvals
•
•
•
•
Budget Summary
Transaction Impact
Committed Funds
Expensed Amounts
• Detailed Emails
• Relevant Intelligence
• Actionable Links
“I know whether I should approve this – the
relevant budget, policy, and trends are
right there for me.”
• Easy access to
actionable items
23
THE BASWARE EXPERIENCE
THE EXECUTIVE
• Track spending to budgets
• See committed funds
• I have data at my
fingertips as I plan for
next year
“We are driving margin through our
disciplined use of financial resources.
We are much more efficient.”
• See controlled vs.
uncontrolled
spending
• Track hard dollar
tangible results
24
THE BASWARE EXPERIENCE
AP ENTRY CLERK
• Invoices enter
system
automatically
• Visualize the AP
Workflow
• Automatic matching
of invoices to
receipts to POs
“We are able to do our job faster and more
accurately. With added visibility, monthly
accruals are a snap.”
• Automated status to suppliers through self service
• Automate payment of recurring invoices
• Only intervene where
discrepancies are
flagged
• Flexible tolerances for
intervention
25
PAPER INVOICE EXAMPLES
DIFFERENT FIELDS, LAYOUTS, LANGUAGES
26
Accompanying Image Conversion:
Extract from XML Format E-Invoice:
E-INVOICE EXAMPLE
STRUCTURED DATA, MACHINE READABLE
Note: Customer details blacked out
27
MORE
INFORMATION
FOR INVESTORS
www.basware.com/investors
www.basware.com/annualreport
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RESEARCH REPORTS
www.basware.com/knowledge-center