Basware Corporation, stock exchange release, February 2, 2016 at 08:40
Basware's refined strategy for 2016-2018
Basware is the market leader of the fast growing market of networked purchase-to-pay (P2P) and e-invoicing solutions. Automated, real-time solutions including innovative financing services for cash flow and working capital management differentiate Basware positioning it to become the largest business commerce network in the world. With reaching a tipping point in its transition from a license-dominated software company to offering cloud and network-based services, the refined strategy for 2016-2018 will enable Basware to capture an increasing share of new markets and accelerate the expansion of its P2P and e-invoicing solutions and new financing services for organizations of all sizes.
Starting point for the next phase of growth
Basware has successfully managed to leverage its superior integrated offering to achieve its current status of largest e-invoicing network operator and largest invoice automation solution supplier in the world. Basware is proud of the milestones the company has achieved over the recent years resulting in key competitive differentiators:
- An established and loyal customer base underpinned by market-leading P2P and e-invoicing solutions and services, enabling the growth of recurring revenues;
- Over 1 million organizations, connected via the open and global Basware Commerce Network, using Basware's solutions and services in over 100 countries;
- Large amounts of e-invoices and other business documents sent and received across the Basware Commerce Network accumulate vast amounts of valuable and value-added data. This data lays the foundations for Basware's new Financing Services, with significant growth potential; and
- Streamlined, customer-centric and globally operating organization, with strong presence in all key growth markets.
Customers now expect best-in-class, highly automated cloud-based services for fully digital transactions rather than legacy, manual and bespoke software solutions. Basware expects the demand for its software-as-a-service (SaaS) to continue to grow in all segments, and especially in the small and medium-sized businesses (SMB) segment.
- To address this trend, Basware has transformed its business model during the past four years from license-based to a SaaS model catering to both direct customers and outsourcing providers alike. This shift has resulted in a continuously increasing share of recurring revenues. During this transformation phase, Basware has also taken steps to simplify its business model in order to improve customer experience as well as the scalability of the business.
- Highly automated P2P solutions and e-invoicing enable private and public organizations of all sizes to realize the value of data and achieve new levels of flexibility for cash flow and working capital management. Basware has developed its Financing Services offering to address this vast potential. Basware expects the demand for these innovative services to rapidly grow globally, with penetration levels increasing in large markets such as the UK, the US and Germany. At the same time, public sector e-commerce initiatives, launched particularly across the EU and the US, will drive the digitalization agenda and the further adoption of e-invoicing.
Refinements to strategy enabling priorities and investment
Basware's vision to become the largest business commerce network in the world remains unchanged.
Basware's strategic goals by 2018 include the following:
- Annual net sales in the range of EUR 220 to 280 million;
- 250 million of processed transactions;
- Increasing the share of recurring revenue to over 80 percent; and
- Continue to improve underlying profitability (excluding growth related investments) over the period.
The refined 2016-2018 strategy will now focus fully on operational execution and making the necessary investments to accelerate the crystallization of this vast potential.
Basware will accelerate operating investments that will be mainly targeted at:
- Expanding the company's sales and marketing as well as go-to-market capabilities,
- R&D capability and other investments aimed at shortening significantly the implementation times of Basware's solutions and services with new and existing customers, and
- Supporting the development and tapping the additional opportunity provided by Basware's new Financing Services offering.
Within sales, Basware plans to increase its direct sales force, with a key focus on the UK, the US and Germany. In addition to the effort on direct sales, the company will also continue to focus on establishing new types of partnerships, ranging from accounting service providers and various other cloud solution providers to business process outsourcing providers, and financial institutions. As part of its strategy, Basware will also extend its go-to-market model to better address the SMB segment and will continue to innovate in value-added services leveraging the Basware Commerce Network and its data.
The company will further improve profitability as a result of the ongoing efficiency and streamlining initiatives. These initiatives include the continuous cost of sales reduction of Basware's cloud-based business, increasing use of online tools and services to selectively automate demand generation and sales activities, as well as various supporting process simplification and scalability related actions.
The organic growth which is the key focus will continue to be supported by a disciplined acquisition strategy, aimed at strengthening the company's position in its key markets.
For more information, please contact:
Esa Tihilä, CEO, Basware Corporation
Tel. +358 40 480 7098
Distribution:
Nasdaq Helsinki
Key media
www.basware.com/investors
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