Dear Shareholder,
We achieved the financial goals set for Basware in 2007 with respect to the development of turnover. Our growth continued in a profitable manner and in accordance with expectations. Our turnover increased during the year 22 percent to 73 270 thousand euros. Basware’s profit outcome was 7 474 thousand euros, with decrease as compared to the previous year at 8 percent.
Our share of international business developed favorably with the growth rate of 29 percent, resulting in 48 percent of our turnover. We were able to close deals with larger and larger corporations and in 2007 our procurement solution rose to compete in the heavyweight series and succeeded in this competition well. Our product sales grew by 24 percent and consulting revenues developed favourably especially in the latter half of the year. As a whole, Basware’s business units in Finland, Scandinavia and Europe exceeded the sales objectives for the financial year and The Financial Management operations met the objectives.
To become a top company in the world
Our strategic goal is to become the leading software company in our field through rapid and profitable growth. We tightened our strategy during the year with five strategic projects which support our business operations. We are endeavoring to achieve the dominant position in the United States by 2010. In the Nordic countries, our most important objective is to continue consistent growth by emphasizing the management of strong client relations. We are also striving to reach the position of global opinion leader in our branch, together with a strong brand. We are also going after rapid growth from large clientele-based agreements as well as from close cooperation with resellers. Via strategic projects, we are advancing towards our vision, which is to be the leading software supplier of purchase to pay solutions in all our main market areas in 2010.
A breakthrough year
In many respects, 2007 represented a breakthrough year. We were able to gain significantly more customers from larger corporations and organizations. Our awareness creation was also successful, and the reputation of our products rose considerably outside Finland as well. The independent research company, Forrester Research, identified Basware as a leading supplier of electronic procurement solutions in its April 2007 report, The Forrester Wave™: eProcurement Solutions, Q2 2007. A leading independent research company earlier listed our invoice automation solutions as solutions that lead the market globally. We are able to offer large corporations diverse, capable solutions on the market, which are also extremely easy to use.
With regard to our procurement solutions, 2007 was a highly significant year with respect to sales as well. Up to this point, our clients have proceeded on the basis of our invoice automation solutions. Currently, many of our clients have purchased a procurement solution directly from us. Our invoice automation solutions still represent the spearhead of our efforts in the world.
Concentration on purchase to pay business activity
We acquired the British company Digital Vision Technologies during the year under review. With this corporate acquisition, we attained the leading position on Great Britain’s market in purchase to pay solutions. As a result of this transaction, our activity expanded to a new country, India, where a product development unit of over ten employees is operational. We will preserve the core functions of our product development in Finland in the future as well, but will expand our India-based product development unit.
Our position was further consolidated in the public sector. We completed a transaction with Finland’s State Treasury – the single largest deal in Basware’s history. We are supplying the State Treasury with a massive procurement solution embracing 40,000 users, in the form of Software as a Service (SaaS). This transaction represents one of the largest procurement contracts ever signed in Europe. We also arranged for the
delivery of a similar system to the City of Oulu region.
We incorporated our financial control unit in 2007. The parent company is concentrating on the purchase to pay software business. Our purchase to pay product family is made up of invoice automation and procurement solutions. Basware Einvoices Oy focuses on einvoicing.
Reseller channel plays on important part in Basware’s business and at the end of 2007 Basware had 70 partners in 33 different countries globally. We put efforts to strengthen our partner network especially in the United States.
In 2007, we undersigned a global reseller contract with DICOM Group, which develops data capture programs. This has opened up an abundant number of business opportunities for us, especially in the Asian market.
The most comprehensive product family
Basware has without a doubt the most comprehensive purchase to pay product family on the market. We invested 18 percent of our turnover into product development and we will continue with the same policy next year as well. We continued the development of our software products in close cooperation with our clients.
The company developed a sourcing solution, Basware RFx Management, which was piloted among the existing customer base. Basware Contract Lifecycle Management was also piloted as a new solution. These new solutions automate and support the efficiency of the entire purchase to pay process. Both solutions integrate seamlessly with Basware Invoice Processing and Basware Purchase Management.
In 2007, Basware was the first in the world to introduce a mobile solution, Basware Mobile Client. With the solution, it is possible to approve purchase invoices and purchase requisitions with a mobile device. In 2007, Basware launched Unicode support for all its Enterprise Purchase to Pay solutions. The standard unifies different encoding systems, enabling the use of several different character sets in one database installation. This is a significant feature for international companies operating for example in Asia or Russia. Our programs boast over 650,000 users in a total of 50 countries.
An internationalising, growing organization
Basware’s number of personnel is still undergoing a dynamic increase, and an ever larger part of our staff operates in our foreign subsidiaries. In 2008, we will employ – for the first time – more personnel abroad than in Finland. We opened operational centers in Singapore, Moscow and Madrid in 2007.
Basware’s success is founded on capable personnel, from whom we expect a great deal. In return, we offer our staff challenging career development possibilities as well as the possibility of continuous self-development in an economically stable organization. In 2007, we put special emphasis on the development of personnel know-how, and we intend to continue in this manner also in 2008. A capable and motivated staff is in a key position to resolve how we succeed in attaining our goals.
With regard to 2007, I would like to thank our clients, partners and shareholders for the trust and confidence you have placed in Basware. I also wish to thank all Basware employees for a job excellently done.
Ilkka Sihvo
Chief Executive Officer (CEO)