BASWARE: THE TIME IS NOW

JP MORGAN TECH CEO CONFERENCE

20 JUNE 2016

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.

2

3

Future Potential:

100%

e-invoices

HUGE MARKET POTENTIAL FOR E-INVOICING

4

370 billion invoices annually, globally,

95% currently in paper format

Current Total

Addressable

Market:

3 billion e-invoices,

1% of total

Source: Management estimates, Billentis, EESPA. Covers B2B, B2G and B2C

E-invoice Other electronic formats Paper and unstructured data

WHY E-INVOICING WILL GROW:PULL FROM EFFICIENCY GAINS

80% of

businesses

still

process

invoices

manually(1)

An e-invoice costs less than a stamp to send

Admin costs drop dramatically (60-80%)

Organisations get paid faster (by up to 45 days)

Cashflow management improves

5 (1) US Federal Reserve Banks of Minneapolis & Chicago study

WHY E-INVOICING WILL GROW:PUSH FROM REGULATION

EU and US

public sector

mandated to

support

e-invoicing

from end 2018

More than 50 governments pushing e-invoicing

• Cut costs

• Increases tax income

• Reduces fraud

65% of businesses supply the public sector

= 14 million companies in the EU alone

6

THE LEADING PROVIDER OF E-INVOICING AND NETWORKED PURCHASE-TO-PAY SOLUTIONS

E-invoicing solutions &

operator between

buyers & suppliers

• 1 million connected companies

in over 100 countries

• Over 100m annualized

transactions

Invoice automation,

procurement & travel and

expense management

software and analytics

• 2500+ large customers, 1.2

million users

New value added

innovations: Basware Pay,

Basware Discount &

Basware Advance

• Partnerships include

MasterCard, Arrowgrass, ING

• 40 clients already signed up

Largest

e-invoicing Network

7

NetworkP2P Financing Services

#1 in Accounts Payable Top 3 in Procurement

AN EXTENSIVE AND INTERNATIONAL CUSTOMER BASE

8

Finland34%

US, UK, Germany

27%

Other39%

2015 Net sales breakdown by geography

GLOBAL LEADER IN A FRAGMENTED MARKET

P2P NetworkFinancing

Services

Global

competition from

ERP providers

Smaller local

providers

Very few global

competitors

Multiple small

local competitors

Offering is unique

in breadth

Competition

depends on

customer size

9

#1 in Accounts

Payable and Top 3

in Procurement

#1 e-invoicing

operator globallyNascent market

7% share of

addressable

market

3% share of

addressable

market

Nascent market

BASWARE IS UNIQUELY POSITIONED TO CAPTURE MARKET GROWTH

WHY BASWARE

Strategy Focused on

Growth

World’s Largest Open

Network

Established and

Loyal Customer Base

Better Products

Unique Integrated

Offering

Geographical Reach

and Know-How

10

2016-2018 STRATEGY PRIORITIES SET IN FEBRUARY 2016

Extend cloud

Purchase to Pay

leadership

Accelerate

Network growth

Unleash

Financing

Services

1. Accelerate

all three

businesses:

2. Supported

and enabled

by:

Further

shortening of

delivery times

Investing in

demand

generation

and sales

Scalable

company

infrastructure

11

Further expand

to SMBs

Key markets:

US, UK,

Germany

Public sector

3. With key

areas of

customer

focus:

2018 STRATEGIC GOALSSET IN FEBRUARY 2016

Top line & transaction growth

€220 to €280 million

Growth is #1 priority

Focus on growing cloud

businesses and recurring

revenue

Opex increase to implement

necessary growth enablers

Improving profitability over

time

Select acquisitions

2/3 of total revenues

~80% of total revenues

250 million

transactions annually

>30% CAGR over 2016-2018

>10% of Basware net sales

Priority

Net sales

Transactions

Cloud

revenue

Recurring

revenue

P2P SaaS

Revenue

Financing

Services

12

0

20

40

60

80

100

120

140

160

2010 2011 2012 2013 2014 2015

TIPPING POINT REACHED IN TRANSITION TO CLOUD AND SAAS

Cloud

businesses

drive growth

Net Sales by type (€M, 2010 – 2015)

Maintenance,

license and

consulting

provide a

solid base

Other

Transactions

SaaS

Consulting

Licenses

Maintenance

2015 Net sales mix

2010 Net sales mix

Maintenance, consulting and license

SaaS and Network

13

2015 Net sales:

€143.4 million

2010 Net sales:

€103.1 million

BASWARE’S BUSINESS MODEL:SELF-FINANCING ORGANIC GROWTH

14

Established,

Profitable &

Cash Generative

P2P Business

Invest in

Growing the

Network

And now in FS

to Monetize Data

in the Network

0

5

10

15

20

2010 2011 2012 2013 2014 2015

HISTORICALLY PROFITABLE & CASH GENERATIVE

15

Profitable every

year since

founding in

1985

Consistent

investment into

R&D and

developing new

business areas

EB

ITD

A

(EU

Rm

)

Net

Op

era

tin

g

Cash

flo

w

(EU

Rm

)

R&

D a

s %

of

Net

Sale

s

R&D (expensed) R&D (capitalized)

0

5

10

15

20

2010 2011 2012 2013 2014 2015

0%

5%

10%

15%

20%

2010 2011 2012 2013 2014 2015

EBITDA MARGIN TEMPORARILY IMPACTED; UNDERLYING PROFITABILITY IMPROVING

2015 2016 2017 2018

Basware totalEBITDA 8%

Transactions Gross

Margin50-60%

SaaS Gross

Margin60-70%

Financing

ServicesGross

MarginN/A 80-90%

Consulting Gross

Margin10-20%

License Gross

Margin~90%

Maintenance Gross

Margin>90%

16

ACQUISITIONS SUPPORT BASWARE STRATEGY

17

• Extend Basware Network

• Consolidate P2P competition

• Strengthen our offering

• Focus on key markets

• High share of cloud revenues

• Visible revenue synergy opportunity

• Profitable or clear path to profitability

• Substantial benefits to customers

WITH M&A OUR PRIORITIES ARE... OUR KEY CRITERIA INCLUDES...

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 1stBP Germany Become a leading e-Invoice operator in Germany

BASWARE’S TIME IS NOW FOR THE NEXT PHASE OF GROWTH

18

THE market

leader

Huge market

opportunity

Unique

integrated

structure

APPENDIX

PAPER INVOICE EXAMPLESDIFFERENT FIELDS, LAYOUTS, LANGUAGES

20

E-INVOICE EXAMPLESTRUCTURED DATA, MACHINE READABLE

21

Ex

tra

ct

fro

m X

ML

Fo

rma

t E

-In

vo

ice

:

Ac

co

mp

an

yin

g I

ma

ge

Co

nve

rsio

n:

Note: Customer details blacked out

INTEGRATED OFFERING IS KEY DIFFERENTIATOR

• Software used within companies

• # 1 in Accounts Payable, Top 3 in Procurement

• 30+ years of expertise, Gartner magic quadrant,

recognized as leader by Forrester

• Transition from Licence to SaaS model

• Modern cloud-based architecture

• Powered by Basware Commerce Network

P2P

• Send and receive documents through the Basware

Commerce Network (e.g. e-invoices)

• World’s largest network

• Open network architecture and interoperability

• Transaction based model

• Comprehensive geographical and format coverage

• Enables use of value added services e.g. Financing

• A working capital platform offering clients payables

and receivables financing

• Built on top of Basware Commerce Network,

utilizing data flow between companies

• Financing provided in partnership with financial

institutions or agreed between buyer and seller

• Commission based model

Network

Financing Services

Buyer

Access

Financing

Send / Receive

e-Invoices

Send / Receive

Orders,

Confirmations,

Catalogues and

Other

Documents

Network

Buyer

Supplier

Supplier

Supplier

P2P

Finance

Partners

Financing

Services

Confirmed

Purchase Order

Funding and

payments

AP automation,

E-procurement,

Travel and expense

management and

Analytics

22

HISTORICAL NET SALES TYPE BREAKDOWN

EUR million

34.036.6

33.6

39.2

34.1

Licence Sales

Maintenance

Consulting Services

SaaS

Transaction Services

Other

2.5 2.9 2.1 3.41.5

10.1

8.1

3.6

8.4

2.4

2.5

10.4

10.3

3.2

9.42.6

10.3

7.9

2.9

7.8

2.1

10.5

9.5

3.0

8.6

3.0

10.5

7.9

2.7

7.4

23

FOR INVESTORS

www.basware.com/investors

www.basware.com/annualreport

BASWARE

www.basware.com

www.twitter.com/basware

www.facebook.com/BaswareCorporation

www.linkedin.com/company/basware

FINANCING SERVICES

www.basware.com/financing-services

RESEARCH REPORTS

www.basware.com/knowledge-center

MOREINFORMATION