Basware Interim Report January 1 - June 30, 2009 (IFRS)>
Basware Interim Report January 1 - June 30, 2009 (IFRS)
(Thomson Reuters ONE) - BASWARE INTERIM REPORT JANUARY 1 - JUNE 30, 2009 (IFRS)SUMMARYJanuary-June H1- Net sales EUR 44 446 thousand (EUR 40 545 thousand) - growth9.6 percent- Operating profit EUR 3 738 thousand (EUR 2 177 thousand) -growth 71.8 percent- Operating profit 8.4 percent of net sales (5.4%)- International operations accounted for 52.5 percent of netsales (50.4%) - growth 14.2 percent- Cash flows from operating activities were EUR 7995 thousand(EUR 4 579 thousand).- Earnings per share EUR 0.18 (EUR 0.11)April-June Q2- Net sales EUR 22 729 thousand (EUR 22 312 thousand) - growth1.9 percent- Operating profit EUR 2 146 thousand (EUR 2 431 thousand) -decrease 11.7 %- Operating profit 9.4 percent of net sales (10.9%)- International operations accounted for 52.6 percent of netsales (49.3%) - growth 8.6 percent- Cash flows from operating activities were EUR -428 thousand(EUR -2 306 thousand).- Earnings per share EUR 0.12 (EUR 0.16)Basware expects its net sales for 2009 to develop positively on thelevel of 2008. Operating profit (EBIT) for 2009 is expected to befrom 10 to 15 percent of net sales.The figures are unaudited.GROUP KEY FIGURES 4-6/ 4-6/ Change, 1-6/ 1-6/ Change, 1-12/EUR thousand 2009 2008 % 2009 2008 % 2008Net sales 22 729 22 312 1.9% 44 446 40 545 9.6% 86 098EBITDA 3 213 3 123 2.9% 5 809 3 540 64.1% 11 722Operating profitbeforeIFRS-3amortization 2 559 2 627 -2.6% 4 592 2 569 78.7% 9 730Operating profit 2 146 2 431 -11.7% 3 738 2 177 71.8% 8 679% of net sales 9.4% 10.9% 8.4% 5.4% 10.1%Profit before tax 2 122 2 428 -12.6% 3 607 2 178 65.6% 8 410Profit for theperiod 1 396 1 899 -26.5% 2 062 1 350 52.7% 6 585Return on equity,% 11.5% 16.6% 8.4% 5.7% 13.7%Return oninvestment, % 11.9% 20.9% 11.9% 8.9% 16.6%Liquid assets* 9 516 5 771 64.9% 9 516 5 771 64.9% 8 777Gearing, % 3.3% -7.8% 3.3% -7.8% 9.3%Equity ratio, % 58.2% 67.2% 58.2% 67.2% 59.5%Earnings pershare, EUR 0.12 0.16 -26.0% 0.18 0.11 55.6% 0.56Earnings per share(diluted), EUR 0.12 0.16 -26.0% 0.18 0.11 55.6% 0.56Equity per share,EUR 4.25 4.06 4.9% 4.25 4.06 4.9% 4.23*) Includes cash, cash equivalents and financial assets at fair valuethrough profit or lossBasware's business operations consist of product sales, maintenance,consulting and Automation Services. The core of Basware's productsales consists of the Basware Enterprise Purchase to Pay productsuite and the Basware Financial Management (FIMA) suite. The Group'sreported market areas are Finland, Scandinavia, Europe and NorthAmerica.Basware's CEO Ilkka Sihvo's comments in connection with thepublishing of the Interim Report:"The company's results for the second quarter were at a good andanticipated level under extremely challenging financial marketsituation that has also seen prolonged sales cycles. Our six-monthoperating profit has increased by 72% on the previous year, which isa sufficient starting point also considering the achievement of thetarget for the rest of the year.During the first half of the year, the company's geographicalsegments fared well considering the circumstances. All areascontinued their growth while also improving their profitability.During the reporting period, the proportion of services grew solidly,and Automation Services increased their share compared to productsales. Sales of the Basware Connectivity Services, launched at thebeginning of the year, have seen excellent success. SupplierActivation, e-invoicing and Scan and Capture agreements have beensold successfully in Finland, Central Europe and North America amongothers. Automation Services agreements typically span several years,generating continuous income throughout the contract period.Automation Services net sales increased superbly by 61% during thefirst half of the year, by 73% during the second quarter and by 55%compared to the previous quarter."REPORTINGAs of January 1, 2009, the Group has applied the following new andrevised standards: IFRS 8 Operating Segments and IAS 1 Presentationof Financial Statements. IFRS 8 has an effect on the segmentinformation in the notes and IAS 1 has an effect on the presentationof the income statement.Basware's reporting segment is based upon geography as follows:Finland, Scandinavia, Europe and North America.In addition, the company reports revenue from products and servicesas follows: Product sales, Consulting, Maintenance and AutomationServices. Automation Services include SaaS revenue and ConnectivityServices, which include digitalization of paper invoices and exchangeof e-invoices and purchase transactions.The company also reports the backlog of Automation service agreementsnot recognized as income. Automation Services agreements typicallyspan several years.NET SALESThe geographical division of net sales by the location of assets:Net sales 4-6/ 4-6/ 1-6/ 1-6/ Change, 1-12/(EUR thousand) 2009 2008 Change, % 2009 2008 % 2008Finland 12 406 13 091 -5.2 23 737 23 584 0.6 49 517Scandinavia 6 278 4 628 35.6 11 595 8 827 31.4 18 805Europe 4 318 4 469 -3.4 8 984 8 762 2.5 19 454North America 1 128 1 446 -21.9 2 323 2 125 9.3 5 004Sales betweensegments -1 402 -1 322 -6.0 -2 193 -2 752 20.3 -6 682Group total 22 729 22 312 1.9 44 446 40 545 9.6 86 098The geographical division of net sales by the location of customers:Net sales 4-6/ 4-6/ 1-6/ 1-6/ Change, 1-12/(EUR thousand) 2009 2008 Change, % 2009 2008 % 2008 21Finland 10 774 11 320 -4.8 098 20 100 5.0 41 514 10Scandinavia 5 613 4 508 24.5 823 8 635 25.3 18 309Europe 4 391 4 401 -0.2 9 073 8 749 3.7 19 191Others 1 950 2 082 -6.3 3 453 3 061 12.8 7 083 44Group total 22 729 22 312 1.9 446 40 545 9.6 86 098Basware Group's net sales increased by 9.6 percent during the firsttwo quarters to EUR 44 446 thousand (EUR 40 545 thousand). Net salesfor the second quarter increased by 1.9 percent to EUR 22 729thousand (EUR 22 312 thousand).The company's product sales decreased by 15.1 percent during thereporting period to 22.8 percent (29.5%) of net sales.Maintenance revenue increased by 22.3 percent in the reporting periodand accounted for 32.5 percent (29.1%) of net sales. Consultingrevenue increased by 11.7 percent and accounted for 36.6 percent(35.9%) of net sales.During the period, Automation Services grew 62.1 percent andaccounted for 8.1 percent (5.5%) of net sales. The backlog of theAutomation Services business not recognized as income was EUR 13 116thousand (EUR 11 241 thousand) at the end of the period. A total of976 customers had been connected to the service at the end of thereporting period.In April-June, 24.1 percent (33.2%) of net sales consisted of ownproduct sales with product sales decreasing by 26.0 percent.Automation Services sales accounted for 9.6 percent (5.6%) of netsales in the second quarter, up 73.2 percent. Maintenance revenueaccounted for 32.1 percent (27.2%) of net sales during the secondquarter and grew by 20.3 percent. Consulting revenue represented 34.2percent (34.0%) of net sales and grew by 2.5 percent.Value added resellers provided a net share of 11.3 percent (16.1%) orEUR 1 145 thousand (1 044 thousand) of product sales during thereporting period and 10.5 percent (11.9%) or EUR 577 thousand inApril-June, accounting for 4.8 percent (8.0%) of the net sales frominternational operations.The international share of Basware's net sales was 52.5 percent(50.4%) in the reporting period. International operations grew by14.2 percent.FINANCIAL PERFORMANCEBasware's operating profit for the period increased by 71.8 percentto EUR 3 738 thousand (EUR 2 177 thousand). Operating profitrepresented 8.4 percent (5.4%) of net sales.Operating profit decreased by 11.7 percent during the second quarterto EUR 2 146 thousand (EUR 2 431 thousand). Operating profitrepresented 9.4 percent of net sales.The geographical division of operating profit by the location ofassets:Operating profit 4-6/ 4-6/ Change, 1-6/ 1-6/ 1-12/(EUR thousand) 2009 2008 % 2009 2008 Change, % 2008Finland 1 295 1 926 -32.8 2 144 1 834 16.9 7 898Scandinavia 1 249 489 155.2 1 915 810 136.5 1 017Europe -32 -123 73.7 199 -401 149.6 -74North America -102 185 -155.2 35 27 28.7 289Operating profitbetween segments -263 -47 -461.2 -555 -94 -492.2 -452Group total 2 146 2 431 -11.7 3 738 2 177 71.8 8 679The company's fixed costs were EUR 35 556 thousand (EUR 34 539thousand) in the period, up 2.9 percent on the corresponding periodthe previous year. Personnel costs made up 74.1 percent (70.6%) orEUR 26 340 thousand (EUR 24 373 thousand) of the fixed costs. Fixedcosts for the second quarter amounted to EUR 17 957 thousand (EUR 17865 thousand).Research and development costs totaled EUR 7 530 thousand (EUR 8 133thousand), of which EUR 892 thousand (EUR 1 342 thousand) or 11.8percent (16.5%) were capitalized during the period. Amortization ofcapitalized research and development costs totaled EUR 778 thousand(EUR 569 thousand).The company's finance income and finance expenses were EUR -132thousand (EUR 1 thousand). Profit before tax was EUR 3 607 thousand(EUR 2 178 thousand) and profit for the period was EUR 2 062 thousand(EUR 1 350 thousand). Undiluted earnings per share were EUR 0.18 (EUR0.11).FINANCE AND INVESTMENTSBasware Group's total assets on the balance sheet at the end of theperiod were EUR 84 060 thousand (EUR 69 627 thousand). The company'scash and liquid assets were EUR 9 516 thousand (EUR 5 771 thousand),of which cash and cash equivalents were EUR 9 484 thousand (EUR 5 739thousand) and financial assets at fair value through profit or losswere EUR 32 thousand (EUR 32 thousand).Equity ratio was 58.2 percent (67.2%) and gearing was 3.3 percent(-7.8%). The company's interest-bearing liabilities totaled EUR 11115 thousand (EUR 2 130 thousand), of which current liabilitiesaccounted for EUR 5 563 thousand (EUR 2 111 thousand). Return oninvestment was 11.9 percent (8.9%) and return on equity 8.4 percent(5.7%).Cash flows from operating activities were EUR 7 995 thousand (EUR 4579 thousand). Cash flows from investments were EUR -2 734 thousand(EUR -1 838 thousand).Basware AS purchased the Norwegian invoice automation solutionbusiness of Itella Information AS. The purchase price was NOK 6.38million (approximately EUR 0.72 million) and it was paid in cash onthe day the acquisition was completed, April 1, 2009. In addition,Basware may pay an additional purchase price of a maximum of NOK 7.0million (EUR 0.77 million) in February 2010 at the latest, determinedon the basis of the volume of the purchased operations' service salesin 2009. EUR 1 039 thousand associated with customer relationshipshas been allocated to intangible assets, taking deferred taxliabilities into consideration. The purchase price includes EUR 436thousand of goodwill. The allocation of the acquisition purchaseprice is preliminary.The company's capital expenditure, resulting from regular additionaland replacement investments required for growth, was EUR 481 thousand(EUR 368 thousand) in the period. Gross investments which include, inaddition to those mentioned above, the capitalized research anddevelopment costs and acquisitions totaled EUR 2 598 thousand (EUR 1823 thousand).Amortization of intangible assets totaled EUR 1 073 thousand (EUR 921thousand). There are no indications of impairments of assets.RESEARCH, DEVELOPMENT AND NEW PRODUCTSResearch and development costs were EUR 7 530 thousand (EUR 8 133thousand) in the period, corresponding to 16.9 percent (20.1%) of netsales. Research and development costs decreased by 7.4 percentcompared with the same period last year. Of the research anddevelopment costs, EUR 892 thousand (EUR 1 342 thousand) or 11.8percent has been capitalized. Amortization of capitalized researchand development costs totaled EUR 778 thousand (EUR 569 thousand).A total of 187 (161) people worked in Products at the end of June2009. The Products unit is expanding in India, where there arecurrently 48 employees.At the beginning of 2009, Basware launched the Basware Connectivitysolution, which aims at speeding up the migration to electronicexchange of documents. There has been obvious demand for the solutionin the market, and it has been sold successfully in Europe as well asNorth America. Basware is now able to exchange all the documentationrelated to the Purchase to Pay process in a single solution.PERSONNELBasware employed 738 (672) people on average during the first twoquarters and 742 (686) at the end of the period. The number ofpersonnel increased by 56 persons and by 8.2 percent compared withthe same period the previous year. The Contempus acquisition duringthe last quarter of 2008 increased the number of personnel by 41people.The share of personnel working in foreign units has increasedcompared with the previous year. At the end of the period, 46.1percent (41.8%) of Basware personnel worked outside of Finland and53.9 percent (58.2%) in Finland. 17.5 percent of the personnel workin sales and marketing, 48.5 percent in consulting and services, 25.2percent in Products, and 8.8 percent in administration.The average age of employees is 36.1 (35.7) years. Of the employees,35.6 percent have a Master's degree and 42.7 percent have aBachelor's degree. Women account for 28.4 percent of employees, menfor 71.6 percent.Geographical distribution of personnel:Personnel (employed, on 4-6/ 4-6/ 1-6/ 1-6/ Change, 1-12/average) 2009 2008 Change, % 2009 2008 % 2008Finland 458 421 8.8 449 418 7.3 421Scandinavia 137 101 35.3 138 100 37.3 112Europe 119 130 -8.5 121 129 -6.2 129North America 31 26 19.5 31 25 24.3 26Group total 744 678 9.8 738 672 9.8 689BUSINESS OPERATIONSFinlandThe Finland segment includes the business operations in Finland,Russia, Asia and Australia and the head office functions. Net salesfor the second quarter idecreased by 5.2 percent to EUR 12 406thousand (EUR 13 091 thousand).Net sales of the Finnish and Russian business operations increased by4.1 percent during the second quarter to EUR 11 333 thousand (EUR 10887 thousand). All the Basware Enterprise Purchase to Pay andFinancial Management products are sold in the region.Basware signed a partnership agreement with the Russian auditing andconsulting company RSM Top Audit and the auditing and consultingcompany Baker Tilly Russaudit. As a result of the agreements, RSM TopAudit and Baker Tilly Russaudit will resell Basware's IFRSconsolidation solutions in Russia.The company will deliver an extensive Basware Connectivity solutionto a Finnish corporate group. The solution will be adopted throughoutthe group in approximately 20 countries. The value of the transactiontotals approximately EUR 900 000.New customers included DNA, Metso, Empower Oy, Lindell Oy, RoboMecOy, Voglia, HRAK Vocational Adult Education Centre, Aller Julkaisutand Globetel.There are 5 resellers in the Asia Pacific region.There are currently 10 resellers in all in the area and the number ofpersonnel averaged 458 (421) during the second quarter.ScandinaviaBasware's Nordic organization consists of a centrally directedScandinavian (Sweden, Denmark and Norway) unit. All the BaswareEnterprise Purchase to Pay and Financial Management products are soldin the Nordic countries, apart from the payment solutions.The Scandinavian business operations developed positively as a wholeduring the second quarter, and net sales of the area increased by35.6 percent to EUR 6 278 thousand (EUR 5 317 thousand). Theprofitability of the operations has improved by 155.2 percent andoperating profit was EUR 1 249 thousand (EUR 489 thousand).New customers include Danish Agency for Governmental Management,Danish Technical University, Alliance Boots, Heimdal Gruppen (HENTAS), LINK Singatur AS, Nordnet AB, Permobil AB, Landscape ServicesSweden AB and LRF Konsult AB.Business operations are mainly handled by the own organization andthere were 137 (101) employees on average in the area.EuropeBasware's European business operations consist of the units inGermany, France, the Netherlands, United Kingdom and SouthernEurope. Additionally, the reseller network covers the eastern partof Central Europe. All Enterprise Purchase to Pay products andservices are sold in Europe, apart from the payment and travel &expense management solutions.Net sales in the Europe segment decreased by 3.4 percent in thesecond quarter and totaled EUR 4 318 thousand (EUR 4 469 thousand).The profitability of the operations has improved by 73.7 percent andoperating profit was EUR -32 thousand (EUR -347 thousand).At the end of 2008, Basware UK initiated a rationalization programand reorganization of operations, facilitating profitable growth. Theprogram has resulted in significant cost-savings and the utilizationrate of consulting has increased, which improves the unit'sprofitability.New customers included SITA NEWS, Aggreko Plc, Malvern Instruments,Thon Hotels, Gibo Groep, Quadraam, Aviva Investors Luxemburg, MichaelPage, PQ Europe and Nouvelles Frontières.There are 35 resellers in Europe, and Basware personnel averaged 119(130).North AmericaBasware's North American unit sells the Enterprise Purchase to Paysolutions in the United States and Canada.Net sales of the area decreased by 21.9 percent in the second quarterto EUR 1 128 thousand (EUR 1 446 thousand). The profitability of theoperations has decreased by 155.2 percent and operating profit wasEUR -102 thousand (EUR 185 thousand).Basware will deliver the Basware Enterprise Purchase to Pay solutionand Scan and Capture services to HCR ManorCare, Inc. in NorthAmerica. The value of the agreement is over EUR one million includingproduct sales, consulting and Scan and Capture services. The salesand consulting revenue will be recognized mainly during the lastquarters of 2009 and Connectivity services over the next three years.At the end of the period, there were 9 resellers in North America. Onaverage, there were 31 (26) employees in the area.OTHER EVENTS OF THE PERIODBasware AS purchased the Norwegian invoice automation solutionbusiness of Itella Information AS. The purchase price was NOK 6.38million (approximately EUR 0.72 million) and it was paid in cash onthe day the acquisition was completed, April 1, 2009. In addition,Basware may pay an additional purchase price of a maximum of NOK 7.0million (EUR 0.77 million) in February 2010 at the latest, determinedon the basis of the volume of the purchased operations' service salesin 2009. The acquisition is expected to increase Basware's AutomationServices revenues for 2009 by approximately EUR 0.9 million insteadof the previous estimate amounting to EUR 1.2 million. The decreaseis based on the volume of service sales being below previousestimates.Basware Einvoices Oy merged into Basware Corporation on June 30,2009, in accordance with the previously registered merger plan. Thebusiness operations of Basware Einvoices Oy will resume in BaswareCorporation as a part of the Basware Automation Services business.The merger did not result in changes to Basware Corporation'sorganization structure.Contempus AS in Norway merged into Basware AS on June 30, 2009, inaccordance with the previously registered merger plan. The businessoperations of Contempus AS will resume in Basware AS as a part of itsnormal business. The merger did not result in changes to Basware AS'organization structure.StrategyBasware has updated its strategy for the years 2009-2012. The longterm net sales growth objective remains in the range of 20-40 percentwith operating profit margin of 10-20 percent of net sales.Basware will expand the EPP (Enterprise Purchase to Pay) AutomationServices concept during 2009. The concept targets Basware softwarelicense customers to achieve an even higher degree of automation. TheSoftware as a Service (SaaS) model is predicted to see a remarkablyhigher growth than the software license market.The company's vision, mission and financial objectives for the years2007-2010 announced on September 12, 2006, remain unchanged.SHARE AND SHAREHOLDERSBasware Corporation's share capital totaled EUR 3 440 437,20 at theend of the period and the number of shares was 11 468 124.A separate stock exchange release has been issued on the Boardauthorizations and other resolutions of the Annual General Meeting ofShareholders on February 12, 2009.Share price and tradeDuring the reporting period, the highest price of the share was EUR11.48 (EUR 10.45), the lowest was EUR 6.60 (EUR 6.14) and the closingprice was EUR 11.40 (EUR 7.00). The average price of the share wasEUR 8.57 (EUR 8.03) during the period.A total of 986 643 (1 039 454) shares were traded during the periodwhich is the equivalent of 8.7 percent (9.1%) of the average numberof shares. Market capitalization with the period's closing price onJune 30, 2009 was EUR 129 707 194 (EUR 80 276 868).ShareholdersBasware had 16 770 (17 301) shareholders on June 30 includingnominee-registered holdings (7). Nominee-registered holdingsaccounted for 8.4 (11.4) percent of the total number of shares.Basware Corporation's share repurchases program that was resolved bythe Board of Directors on October 14, 2008 ended on March 31, 2009.The program was based on the authorization granted by the AnnualGeneral Meeting on February 14, 2008. The purchases started onOctober 23, 2008 and ended according to the terms of the sharerepurchase program on March 31, 2009.On March 31, 2009 90.300 of shares were acquired and the company nowholds a total number of 90.300 shares representing approximately 0.79% of all Basware shares. The average price of the shares acquiredduring the repurchases program was 6.9475 euro.GOVERNANCEThe Annual General Meeting of Shareholders on February 12, 2009,confirmed the number of Board members as five. The Annual GeneralMeeting resolved to agree on the proposal and elected Matti Copeland,Sakari Perttunen, Pentti Heikkinen, Ilkka Toivola and HannuVaajoensuu members of the Board of Directors. In its first meetingheld after the Annual General Meeting, the Board of Directors electedHannu Vaajoensuu as chairman and Sakari Perttunen as vice chairman ofthe Board.The Annual General Meeting further resolved to elect Ernst & YoungOy, Authorized Public Accountants as the auditor, with APA HeikkiIlkka in charge and APA Terhi Mäkinen as the deputy auditor.The Board was authorized to resolve on share issue and sharerepurchase.A separate stock exchange release has been issued on the Boardauthorizations and other resolutions of the Annual General Meeting ofShareholders on February 12, 2009.SHORT-TERM RISKS AND UNCERTAINTY FACTORSIn accordance with Basware's risk management policy, risks aredivided into six categories: risks related to business operations,products, personnel as well as legal, financial and data securityrisks. Basware takes risks that are a natural part of its strategyand objectives. These risks are managed and decreased in variousways. Short-term risks are considered to be risks in the currentreporting year.The global crisis of the finance market, general economic uncertaintyand depression decrease companies' willingness to invest, which mighthave an unfavorable impact on the development of the company's netsales and profitability. In previous economic downturns, the demandfor the company's products and services has remained more positivethan the general economic market as a whole as the company's softwaresolutions generate cost savings.The rapidly weakened global market situation does however causeuncertainty. The depression has generally increased companies'delinquency entries and the number of bankruptcies. Typically,companies may also prolong the times of payments in order to free upworking capital. Basware has intensified its management of salesreceivables, and business management regularly monitors the paymentof sales receivables as part of the management of customer accounts.Goodwill has been tested during the last quarter of 2008. Inaccordance with the testing for impairment of assets, no impairmentof assets has occurred. At the end of 2008, Basware UK implemented arationalization program and reorganization of operations. The programhas resulted in significant cost-savings and the utilization rate ofconsulting has increased, which improves the unit's profitability. Ifthe unit's profitability does not improved as planned in the mediumterm despite the streamlining program, it is likely that the goodwillallocated to the unit will need to be impaired.In other respects, no significant changes have taken place inBasware's short-term risks and uncertainties during the financialperiod.EVENTS AFTER THE REPORTING PERIODBasware acquired the entire share capital of TAG Services Pty Ltd inAustralia on July 1, 2009. The acquisition price will be based on thecompany's net sales for its fiscal year ended June 30, 2009 and thecompany's net asset value on June 30, 2009, and is estimated toamount to AUD 2.25 Million (EUR 1.30 Million, using an exchange rateof EUR/AUD 1.7359 on June 30, 2009). The company's net asset value atJune 30, 2009, is estimated to be AUD 0.53 million (EUR 0.31Million). The acquisition price will be paid in cash in two parts inJuly and August 2009. In addition the deal includes an additionalacquisition price element that is based on the growth of thecompany's net sales of the period from July 1, 2009 to June 30, 2010and will be paid in August 2010 at the latest.TAG Services, a Basware's partner since 2001, offers BaswareEnterprise Purchase to Pay solutions to its customers. As a result ofthe acquisition, Basware will obtain a strong foothold in theAustralian market, be able to launch the Basware ConnectivityServices solution also in this market area and offer 24/7 customersupport to its global customers.TAG Services' net sales of the fiscal year ended June 30, 2009 wasAUD 2.26 million (EUR 1.29 Million) excluding the resale share to bepaid to Basware and the operating profit was positive. The abovementioned figures are unaudited. Basware employs 13 persons inAustralia.FUTURE OUTLOOKMarket forecasts published in March 2009 expected the entire ITmarket to decrease by 3.7 percent in 2009, while the corporatesoftware market was forecast to increase by 5.4 percent on averageannually until 2013. According to forecasts published in June 2009the software markets are estimated to decrease by 8.2 percent andentire IT markets to decrease by 10.6 percent globally in 2009.According to analysts' estimates published in June 2009, both theentire IT market and service market are expected to increase by 4.0percent in 2010, while the software market is forecast to increase by5.6 percent globally.Western Europe and the United States combined account forapproximately three quarters of the enterprise software market. Inthese markets, electronic invoice processing and procurementsolutions are still in early maturity. The procurement management andelectronic invoice processing markets are heterogeneous in terms ofthe competitive situation. Growth could attract more competitors tothe market. The industry is consolidating, and this development couldgo on in the future as well. Globally speaking, Basware is amedium-sized software company in terms of net sales as well as numberof personnel.Basware's direct competitors are primarily locally operating andoften smaller companies. In North America in particular, the companyhas also larger competitors, especially in the field of procurementmanagement. Developers of document management, scanning and recyclingsystems compete with Basware, particularly with regard to purchaseinvoice management solutions. Competing solutions also includecustomized solutions integrated into ERP (Enterprise ResourcePlanning) systems.The software still offers a competitive edge, thanks to theintegrated offering consisting of new added value products and theproducts. Automation Services, a new concept in the portfolio, willhave a positive impact on the competitiveness.Automation Services increase the predictability and transparency of acompany's net sales and profitability. In 2008, revenue fromcontinuous services (including maintenance) accounted for a third ofthe company's total revenue. Basware predicts that AutomationServices revenue will increase significantly in the strategy period.The company's international growth is based on efforts of its ownsales and marketing activity as well as the reseller channel.Development of the indirect distribution channel continues in Europe,Russia and Asia. In North America, the focus will be on developingthe company's own sales channel for the time being. In Scandinavia,the focus is on profitability, and moderate growth is supported bythe company's expanded product portfolio and the development of theservice business. In Finland, the focus is on profitability, andmoderate growth will primarily be achieved from the fields ofprocurement management and services.Basware has complemented its organic growth with acquisitions. Thecompany will continue to review possible acquisition targets during2009. The aim of the acquisitions is to expand the company'sdistribution channel and product portfolio in international markets.The Group increased its number of personnel mainly in India duringthe first two quarters. Research and development costs are notexpected to substantially increase from the level of 2008.Growth-related investments will start earliest during the second halfof the year if net sales and profitability are at the expected level.The cost savings resulting from the synergy benefits of the Contempusintegration will materialize starting from the beginning of 2009 andthey will be approximately EUR 3 million by the end of 2009.Approximately EUR 1 million will be amortized of the Contempusacquisition cost allocated to customer relationships and products inaccordance with a straight-line depreciation plan of 4.25 years.Basware expects its net sales for 2009 to develop positively on thelevel of 2008. Operating profit (EBIT) for 2009 is expected to befrom 10 to 15 percent of net sales.Espoo, Finland, July 10, 2009BASWARE CORPORATIONBoard of DirectorsFor more information, please contactCEO Ilkka Sihvo, Basware Corp.,Tel. +358 9 8791 7251 or +358 40 501 8251Analyst and Press BriefingBasware arranges today, July 10, 2009 a briefing on the InterimReport for the press and analysts at 11:00 a.m. in Hotel Kämp,Pohjoisesplanadi 29, Helsinki, Finland. During this briefing CEOIlkka Sihvo and CFO Mika Harjuaho will comment the events andfinancial performance of the quarter. Welcome.Distribution:NASDAQ OMX Helsinki LtdKey mediawww.basware.comThe Interim Report has been prepared in accordance with theInternational Financial Reporting Standards (IFRS). As of January 1,2009, the Group has applied the following new and revised standards:IFRS 8 Operating Segments and IAS 1 Presentation of FinancialStatements. Otherwise the same Accounting Principles have beenapplied as in the 2008 Financial Statements. Key indicatorcalculations remain unchanged and have been presented in the 2008Financial Statements.GROUP INCOME STATEMENT 1.4.- 1.4.- 1.1.- 1.1.- 1.1.- 30.6. 30.6. Change, 30.6. 30.6. Change, 31.12.EUR thousand 2009 2008 % 2009 2008 % 2008NET SALES 22 729 22 312 1.9 44 446 40 545 9.6 86 098Other operatingincome 52 62 -16.6 81 131 -37.8 250Materials andservices -1 611 -1 385 -16.3 -3 162 -2 596 21.8 -4 726Employee benefit -12 -26 -24expenses -13 444 608 6.6 340 373 8.1 -50 399Depreciation andamortization -1 067 -693 54.0 -2 071 -1 364 51.8 -3 043Other operating -10expenses -4 513 -5 257 -14.1 -9216 166 -9.3 -19 500Operating profit 2 146 2 431 -11.7 3 738 2 177 71.8 8 679Finance income 30 18 71.0 155 57 170.4 734Finance expenses -54 -21 159.9 -286 -56 413.2 -1 003Profit beforetax 2 122 2 428 -12.6 3 607 2 178 65.6 8 410Income taxexpense -727 -528 37.6 -1 545 -828 86.5 -1 825PROFIT FOR THEPERIOD 1 396 1 899 -26.5 2 062 1 350 52.7 6 585OthercomprehensiveincomeExchangedifferenceson translatingforeignoperations 594 -26 -2384.6 1 397 -210 -765.2 -4 383Income taxrelatingto components ofothercomprehensiveincome 8 0 -44 0 0Othercomprehensiveincome, net oftax 602 -26 -2415.4 1 353 -210 -744.3 -4 383TOTALCOMPREHENSIVEINCOME 1 998 1 873 6.6 3 415 1 140 199.6 2 201Profitattributableto:Owners of theparent 1 370 1 865 -26.5 2 012 1 302 54.5 6 467Minorityinterest 26 35 -25.3 50 48 5.2 118 1 396 1 899 -26.5 2 062 1 350 52.7 6 585Totalcomprehensiveincomeattributable to:Owners of theparent 1 973 1 839 7.3 3 365 1 092 208.2 2 084Minorityinterest 26 35 25.3 50 48 5.2 118 1 998 1 873 6.6 3 415 1 140 199.6 2 201Earnings pershare(undiluted), EUR 0.12 0.16 -26.0 0.18 0.11 55.6 0.36Earnings pershare(diluted), EUR 0.12 0.16 -26.0 0.18 0.11 55.6 0.36GROUP BALANCE SHEETEUR thousand 30.6.2009 30.6.2008 Change, % 31.12.2008ASSETSNON-CURRENT ASSETSIntangible assets 17 678 12 589 40.4 17 022Goodwill 30 389 25 726 18.4 29 212Tangible assets 933 1 081 -13.7 991Available-for-saleinvestments 38 38 38Long-term trade and otherreceivables 208 12 1 614.1 536Deferred tax assets 1 973 2 300 -14.2 2 208Non-current assets 51 220 41 746 22.7 50 006CURRENT ASSETSInventories 45 37 23.5 48Trade and other receivables 20 285 20 654 -1.8 20 737Income tax receivables 2 993 1 420 110.8 2 341Financial assets at fairvalue through profit or loss 32 32 3.1 31Cash and cash equivalents 9 484 5 739 65.2 8 745Current assets 32 840 27 881 17.8 31 902TOTAL ASSETS 84 060 69 627 20.7 81 909EQUITY AND LIABILITIESSHAREHOLDERS' EQUITYShare capital 3 440 3 440 3 440Share premium account 69 69 69Own shares -629 -271Fair value reserve and otherreserves 33 598 33 598 33 598Translation differences -3 818 229 -1 769.2 -3 991Retained earnings 16 088 9 227 74.4 15 648Minority interest 189 196 -3.5 224Shareholders' equity 48 937 46 759 4.7 48 717NON-CURRENT LIABILITIESDeferred tax liability 2 823 1 618 74.5 2 307Interest-bearing liabilities 5 552 14 29 368.1 7 729Non-interest-bearingliabilities 21Non-current liabilities 8 396 1 632 412.9 10 036CURRENT LIABILITIESInterest-bearing liabilities 5 563 2 111 163.5 5 555Trade payables and otherliabilities 20 664 18 870 9.5 16 683Tax liability from incometax 500 255 96.6 918Current liabilities 26 727 21 236 25.9 23 156TOTAL EQUITY AND LIABILITIES 84 060 69 627 20.7 81 909GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Inv. non- Share- Share restr. holders premium Own equity Other Transl Retained MinorityEUR thousand equity account shares res. res. diff. earnings interest TotalSHAREHOLDERS' 47EQUITY 1.1.08 3 440 33 127 0 0 540 392 9 765 148 413Comprehensiveincome -163 1 255 48 1 14Dividend -1distribution -1 720 720Grantedwarrants 70 70Changes inreportingperiod -143 -143SHAREHOLDERS'EQUITY 4630.6.08 3 440 33 127 0 0 540 229 9 227 196 759 Inv. non- Share- Share restr. holders premium Own equity Other Transl Retained MinorityEUR thousand equity account shares res. res. diff. earnings interest TotalSHAREHOLDERS' 48EQUITY 1.1.09 3 440 69 -271 33 058 540 -3 991 15 648 224 717Comprehensiveincome 173 3 192 50 3 415Dividend -2distribution -2 663 663Grantedwarrants 378 378Repurchase ofownshares -358 -358Changes inreportingperiod -467 -86 -553SHAREHOLDERS'EQUITY 4830.6.09 3 440 69 -629 33 058 540 -3 818 16 088 189 937GROUP CASH FLOW STATEMENT 1.1.- 1.1.-EUR thousand 1.1.-30.6.2009 30.6.2008 12.2008Net cash from operating activitiesProfit for the period 2 062 1 350 6 585Adjustments for profit 3 748 2 191 5 243Working capital changes 4 392 2 770 125Interest paid -99 -51 -291Interest received 29 56 154Other financial items in operatingactivities -16 -6 -38Income taxes paid -2 122 -1 730 -3 447Net cash from operating activities 7 995 4 579 8 331Cash flows from investing activitiesPurchase of tangible and intangibleassets -2 010 -1 842 -3 631Proceeds from sale of tangible andintangible assets 47Acquired subsidiaries -724 -1 -8 728Repayment of loan receivables 5 9Net cash used in investingactivities -2 734 -1 838 -12 303Cash flows from financing activitiesProceeds from short-term loans 2 000 2 000Repayments of short-term loans -4 000 -4 000Proceeds from long-term borrowings 10 650Repayments of long-term borrowings -1 783 -200 -300Share repurchase -358 -271Repayments of financial leaseliabilities -4 -1Dividends paid -2 623 -1 720 -1 720Net cash used in financingactivities -4 763 -3 925 6 358Net change in cash and cashequivalents according to cash flowstatement 498 -1 184 2 386Cash and cash equivalents atbeginning of period 8 777 7 041 7 041Effects of exchange rate changes oncash and cash equivalents 242 -86 -650Cash and cash equivalents at end ofperiod 9 516 5 771 8 777GROUP QUARTERLY INCOME STATEMENT 1-3/ 1-3/ 4-6/ 4-6/ 7-9/ 10-12/EUR thousand 2009 2008 2009 2008 2008 2008NET SALES 21 717 18 233 22 729 22 312 19 259 26 294Other operatingincome 30 69 52 62 58 62Materials andservices -1 552 -1 211 -1 611 -1 385 -797 -1 333Employee benefitexpenses -12 896 -11 765 -13 444 -12 608 -10 933 -15 093Depreciation andamortization -1 004 -671 -1 067 -693 -690 -990Other operatingexpenses -4 703 -4 910 -4 513 -5 257 -4 516 -4 818Operating profit 1 592 -254 2 146 2 431 2 381 4 122% 7.3% -1.4% 9.4% 10.9% 12.4% -15.7%Finance income 124 39 30 18 39 637Finance expenses 232 -35 -54 -21 -50 -897Profit before tax 1 484 -250 2 122 2 428 2 370 3 862% 6.8% -1.4% 9.3% 10.9% 12.3% 14.7%Income tax expense -818 -300 -727 -528 -430 -567PROFIT FOR THE PERIOD 666 -550 1 396 1 899 1 941 3 294% 3.15 -3.0% 6.1% 8.5% 10.1% 12.5%Changes of ownershipBasware increased its shareholding in Basware Einvoices Oy to 100percent on January 30, 2009, by acquiring 12.55% of the company'sshares and control from the company's management. The purchase pricepaid on the date of the transaction was approximately EUR 720thousand and the additional purchase price to be paid based on thebusiness volume for 2009 in February 2010 at the latest is expectedto be approximately EUR 250 thousand. Basware Einvoices Oy will bemerged with the parent company during the financial period underway.A situation such as the one presented above is currently notregulated by IFRS, so the company's management has compiled anaccounting principle for the case in compliance with IAS 8. Thechange of ownership is recognized under shareholders' equity, and itwill not have any effect on profit or goodwill.COMMITMENTS AND CONTINGENT LIABILITIESEUR thousand 30.6.2009 30.6.2008 31.12.2008GUARANTEES ON BEHALF OF SUBSIDIARIES 1 098 1 075 1 096Guarantees total 1 098 1 075 1 096OWN GUARANTEESLease liabilitiesCurrent lease liabilities 795 713 868Lease liabilities maturing in 1-5years 820 754 838Total 1 615 1 468 1 706Other rental liabilitiesCurrent rental liabilities 2 477 2 000 2 385Rental liabilities maturing in 1-5years 4 299 4 471 4 620Rental liabilities maturing later 1 227 25 1 196Total 8 003 6 496 8 201Other own contingent liabilities,total 9 618 7 964 9 907SEGMENT REPORTINGNet sales by market areaNet sales 4-6/ 4-6/ Change, 1-6/ 1-6/ Change, 1-12/(EUR thousand) 2009 2008 % 2009 2008 % 2008Finland 12 406 13 091 -5.2 23 737 23 584 0.6 49 517Scandinavia 6 278 4 628 35.6 11 595 8 827 31.4 18 805Europe 4 318 4 469 -3.4 8 984 8 762 2.5 19 454North America 1 128 1 446 -21.9 2 323 2 125 9.3 5 004Sales betweensegments -1 402 -1 322 -6.0 -2 193 -2 752 20.3 -6 682Group total 22 729 22 312 1.9 44 446 40 545 9.6 86 098Operating profit 4-6/ 4-6/ Change, 1-6/ 1-6/ Change, 1-12/(EUR thousand) 2009 2008 % 2009 2008 % 2008Finland 1 295 1 926 -32.8 2 144 1 834 16.9 7 898Scandinavia 1 249 489 155.2 1 915 810 136.5 1 017Europe -32 -123 73.7 199 -401 149.6 -74North America -102 185 -155.2 35 27 28.7 289Operating profitbetween segments -263 -47 -461.2 -555 -94 -492.2 -452Group total 2 146 2 431 -11.7 3 738 2 177 71.8 8 679Personnel (employed, on 4-6/ 4-6/ 1-6/ 1-6/ Change, 1-12/average) 2009 2008 Change, % 2009 2008 % 2008Finland 458 421 8.8 449 418 7.3 421Scandinavia 137 101 35.3 138 100 37.3 112Europe 119 130 -8.5 121 129 -6.2 129North America 31 26 19.5 31 25 24.3 26Group total 744 678 9.8 738 672 9.8 689Net sales by businessNet sales 4-6/ 4-6/ 1-6/ 1-6/ Change, 1-12/(EUR thousand) 2009 2008 Change, % 2009 2008 % 2008Product sales 5 475 7 400 -26.0 10 152 11 964 -15.1 25 859Maintenance 7 301 6 071 20.3 14 439 11 809 22.3 25 068Consulting 7 773 7 582 2.5 16 269 14 560 11.7 30 538Automationservices 2 179 1 258 73.2 3 585 2 212 62.1 4 633Group total 22 729 22 312 1.9 44 446 40 545 9.6 86 098Net sales by the location of customer:Net sales 4-6/ 4-6/ Change, 1-6/ 1-6/ Change, 1-12/(EUR thousand) 2009 2008 % 2008 2008 % 2008Finland 10 774 11 320 -4.8 21 098 20 100 5.0 41 514Scandinavia 5 613 4 508 24.5 10 823 8 635 25.3 18 309Europe 4 391 4 401 -0.2 9 073 8 749 3.7 19 191Other 1 950 2 082 -6.3 3 453 3 061 12.8 7 083Group total 22 729 22 312 1.9 44 446 40 545 9.6 86 098GROUP KEY INDICATORS 1-6/ 1-6/ 1-6/ 1-12/EUR thousand 2009 2008 2007 2008Net sales 44 446 40 545 34 814 86 098Growth of net sales, % 9.6 % 16.5% 15.7% 17.5%EBITDA 5 809 3 540 5 350 11 722% of net sales 13.1% 8.7% 15.4% 13.6%Operating profit beforeIFRS3 amortization 4 592 2 569 4 512 9 730% of net sales 10.3% 6.3% 13.0% 11.3%Operating profit 3 738 2 177 4 182 8 679Growth of operatingprofit, % 71.8% -48.0% 10.7% 15.5%% of net sales 8.4% 5.4% 12.0% 10.1%Profit before tax 3 607 2 178 4 299 8 410% of net sales 8.1 % 5.4% 12.3% 9.8%Profit for the period 2 062 1 350 2 468 6 585% of net sales 4.6% 3.3% 7.1% 7.6%Return on equity, % 8.4% 5.7% 11.0% 13.7%Return on investment, % 12.8 % 8.9% 18.9% 16.6%Interest-bearingliabilities 11 115 2 130 552 13 283Cash and liquid assets *) 9 516 5 771 14 683 8 777Gearing, % 3.3% -7.8% -31.0% 9.3%Equity ratio, % 58.2 % 67.2% 71.6% 59.5%Total assets 84 060 69 627 63 593 81 909Gross investments **) 2 598 1 823 1 649 12 476% of net sales 5.8% 4.5% 4.7% 14.5%Capital expenditure 230 481 368 1 007% of net sales 0.5% 1.2% 1.1% 1.2%Research and developmentcosts 7 530 8 133 6 344 15 518% of net sales 16.9% 20.1% 18.2% 18.0%R&D personnel at end ofperiod 187 161 140 171Personnel on averageduring the period 738 672 541 689Personnel at end of period 742 686 559 731Increase in personnel, % 8.2% 22.7% 10.3% 11.1%Earnings per share, EUR 0,18 0.11 0.22 0.56Earnings per share(diluted), EUR 0,18 0.11 0.22 0.56Equity per share, EUR 4,25 4.06 3.97 4.23P/E ratio 64,54 61.67 56.46 11.68Share price performance lowest share price 6,60 6.14 10.48 6.00 highest share price 11,48 10.45 14.00 10.45 average share price 8,57 8.03 12.19 7.53 closing share price 11,40 7.00 12.25 6.59Market capitalization at 129 80 276 140 484 75 301end of period 707194 868 519 011 2 298Number of traded shares 986 643 1 039 454 1 597 569 467% of average number ofshares 8,7 % 9.1% 13.9% 20.1%Average number of shares 11 385 11 468 11 468 11 463- undiluted 986 124 124 307 11 385 11 468 11 468 11 463- diluted 986 124 124 307*) Includes cash, cash equivalents and financial assets at fair valuethrough profit or loss**) Includes capitalized R&D costs and acquisitionsMajor shareholdersJune 30, 2009 Shares Shareholders votes pcs % 1. Sihvo, Ilkka 1 065 800 9.3 Eräkangas, Kirsi (incl. children under 2. guardianship) 1 031 800 9.0 Vaajoensuu, Hannu (incl. a controlled company 3. and children under guardianship) 962 100 8.4 4. Perttunen, Sakari 830 400 7.2 Pöllänen, Antti (incl. children under 5. guardianship) 717 415 6.3 6. Nordea Nordic Small Cap Fund 552 217 4.8 7. Sampo Life Insurance Company Limited 550 000 4.8 8. Ilmarinen Mutual Pension Insurance Company 429 064 3.7 9. Ahonen, Asko 318 822 2.810. Royal Skandia Life Assurance Eib 17527-6 270 000 2.411. Kaleva Mutual Insurance Company 242 690 2.112. Pension insurance company Veritas 226 000 2.013. Perttunen, Meimi 215 400 1.914. Fondita Nordic Micro Cap Placeringsfond 200 000 1.715. Investment Fund Aktia Capital 133 213 1.216. Fondita Nordic Small Cap Fund 118 500 1.017. Basware Corporation 90 300 0.8 18. Vaajoensuu, Sara 83 700 0.7 19. Tietoklusteri Oy 77 000 0.7 20. Pavor Oy 75 052 0.7 Total of 20 largest shareholders 8 189 473 70.8 Total of nominee-registered 962 693 8.4 Others 2 315 958 20.8 Total 11 468 124 100.0http://hugin.info/131662/R/1328133/313054.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
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Datum: 10.07.2009 - 08:45 Uhr
Sprache: Deutsch
News-ID 3427
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