Slide 1: Opera Software: Fourth quarter 2009
Opera Software: Fourth quarter 2009
Slide 2: Agenda
Agenda 1. Highlights Lars Boilesen, CEO 2. Financial review Erik Harrell, CFO/COO 3. Business & Strategic update Lars Boilesen, CEO 4. Q&A
Slide 3: Highlights (4Q09 – 1Q10TD)
Highlights (4Q09 – 1Q10TD) Operators • Strong progress with AT&T, Vodafone, SKT and new tier-one operators • Starting monetization of 50 million Opera Mini users via operator/partner deals OEMs (Mobile/Devices) • Opera Mobile shipments of 4.2 million • Signed with Huawei • Signed a major mobile phon
Slide 4: Financial review
Financial review
Slide 5: A note from our lawyers
A note from our lawyers DISCLAIMER: This presentation contains, and is i.a. based on, forward-looking statements regarding Opera Software ASA and its subsidiaries. These statements are based on various assumptions made by Opera Software ASA, which are beyond its control and which involve known and u
Slide 6: 2009 Financial highlights
2009 Financial highlights Priorities 4Q Status report 2009 Status report Revenue MNOK 142.6 (-9% vs 4Q08) MNOK 612.7 (+23% vs 2008) EBITDA* MNOK 11.9 (MNOK 35.7 in MNOK 81.7 (MNOK 98.0 in 2008) 4Q08) Operating cash MNOK -14.3* (MNOK 69.0 in MNOK 63.6 (MNOK 149.6 in flow 4Q08) 2008) *Non-IFRS EBITDA
Slide 7: 4Q09 Financial review
4Q09 Financial review 2009 vs MNOK 4Q 2009 4Q 2008 Q on Q 2009 2008 2008 Desktop + 50.4 41.9 20% 184.9 116.3 59% Internet Devices + 92.2 115.0 -20% 427.8 380.8 12% Total revenue = 142.6 157.0 -9% 612.7 497.1 23% Payroll and related expenses - 92.6 88.0 5% 389.6 296.5 31% Stock option costs - 3.9 2.3
Slide 8: Financial highlights: 4Q06-4Q09
Financial highlights: 4Q06-4Q09 Operating revenues (NOK Million) EBITDA* (Non-IFRS) (NOK Million) 200 180 35 36 36 160 31 Desktop 45 25 26 140 42 47 Internet Devices 21 120 50 28 43 15 16 100 23 23 12 12 12 80 19 17 5 7 16 128 60 15 115 116 2 13 90 97 92 92 -6 40 74 80 -5 60 65 48 51 -12 20 0 -15 Q4
Slide 9: Revenues: 4Q09
Revenues: 4Q09 Area Comments: Revenue (vs. 4Q08) Operators Operators: Very solid growth in active users and revenue, driven by new 2009 customers such as Vodafone and Motricity (AT&T) , as well as by existing customers such T-Mobile and O2 • Operator generated revenue now constitutes approximately 4
Slide 10: Revenues: 4Q09
Revenues: 4Q09 Area Comments: Revenue (vs. 4Q08) Opera Opera Desktop: Users up 37% since 4Q08 (up 11% vs 3Q09) Desktop • Revenue up 20% (up 37% on constant currency basis) • Successful launch of Opera 10 and 10.10 • Users up 125% since 4Q07 to approximately 46 million in December 2009 • Strong user
Slide 11: Development revenue: 4Q09 vs 4Q08
4Q09 vs 4Q08 comparison: Revenue 4Q 2008 / 4Q 2009 (NOK Million) Comments on Revenue development YoY* 160,0 • Revenues down MNOK 14 155,0 150,0 • Currency impact negative 145,0 MNOK 18 140,0 • Development revenue 135,0 negative MNOK 12 130,0 • Rest of business revenue 125,0 positive MNOK 16 (13% YoY
Slide 12: Development revenue: 4Q09 vs 3Q09
4Q09 vs 3Q09 comparison: Revenue 3Q 2009 / 4Q 2009 (NOK Million) Comments on Revenue development QoQ* 145,0 • Revenues up MNOK 8 140,0 • Currency impact negative MNOK 5 135,0 • Development revenue down MNOK 130,0 2 125,0 • Rest of business revenue up MNOK 15 (12% sequential growth) 120,0 •Overall, s
Slide 13: OPEX development
OPEX comments 4Q09 vs. 4Q08 OPEX development •Total operating expenses up 9% OPEX (NOK Million) • Payroll cost up 5% Payroll Stock Options Depreciation Other OPEX Non recurring costs •Headcount growth worldwide of 21% since 4Q08 160 •Much lower bonus expense and less vacation expense compared to 4Q0
Slide 14: EBITDA Development
0,0 5,0 10,0 35,0 15,0 20,0 25,0 30,0 40,0 EBITDA Q4 2008 * Year over Year, 4Q 2009 vs 4Q 2008 Internet Devices revenue Desktop Revenue Currency impact revenue Total cost 4Q 2008 / 4Q 2009 (NOK Million) EBITDA Development Currency impact costs EBITDA Q4 2009
Slide 15: Strong capital structure
Strong capital structure Balance sheet (MNOK) Balance sheet highlights 1000 Metric 4Q09 4Q08 Cash and cash equivalents Cash MNOK 546 MNOK 564 Current assets 500 NWC* MNOK -58 MNOK 9 Fixed assets 0 Equity MNOK 587 MNOK 598 31.12.2008 31.12.2009 Equity (MNOK) 620 600 580 560 540 520 500 31.12.2008 31.
Slide 16: Cash flow 4Q09
-40,0 -30,0 -20,0 -10,0 10,0 20,0 30,0 40,0 50,0 0,0 Profit before tax Depreciation Changes in working capital Taxes paid Cash flow from operations Cash flow 4Q09 Acquisition of tangible fixed assets Purchase of own shares Net change in cash and cash equivalents
Slide 17: Financial high-level summary: 4Q09
Financial high-level summary: 4Q09 • Revenues: Generally in line with expectations • Continue to make good progress with operators and desktop • Solid revenues from our Device OEM customers • FX headwinds had a pronounced negative effect on revenues vs. 4Q08 • USD down 17% versus the NOK and EUR dow
Slide 18: Overall Summary of 4Q 09
Overall Summary of 4Q 09 • Pleased with progress in the key areas driving revenue growth (operators and desktop) • Also, encouraging to see more Opera Mobile distribution through operators • Very solid growth in subscribers from our newer operator deals • Encouraging momentum with data revenue share
Slide 19: Financial high-level summary: 1Q10
Financial high-level summary: 1Q10* • Revenues: Expectations vs. 4Q09 (constant currency)* • Revenue to continue to grow with operators • Opera 10 to continue to drive desktop-user growth • Device OEM revenue to fall in 1Q 10 due to seasonality, but expect increase in 2Q 10 • Mobile OEM revenue to f
Slide 20: 1Q 2010 Guidance
1Q 2010 Guidance Metric 1Q 2010 (16/11/09) Additional Ongoing 1Q 2010 OpEx from Range AdMarvel acquisition costs**** Revenue* MNOK 140-145+*** MNOK 148-154 Expenses** MNOK 145 – 150** MNOK 5 MNOK 153-156 Note: 1Q 10 expense range above EXCLUDES estimated MNOK 28-32 in extraordinary acquisitions cost
Slide 21: 2010 Guidance
2010 Guidance Metric 2010 Revenue* MNOK 675 - 725 Expenses** MNOK 635 - 645** Note: Expenses excludes extraordinary restructuring charges and acquisition transaction costs *Assumes currency (NOK 5.9/USD, NOK 8.1/EUR). ** Includes payroll, other OPEX, stock option costs and depreciation. Also include
Slide 22: 2010 Guidance: Commentary
2010 Guidance: Commentary Outlook Overall • Operators and desktop expected to be the primary drivers of Revenues revenue growth in FY2010 (in 4Q09, constituted @65% of revenues) • Expect solid sequential quarterly revenue growth overall for the year Overall • Expect 2Q10 expense range to be 1-2% hig
Slide 23: 2010 Guidance: Commentary
2010 Guidance: Commentary Outlook Operators • Continued growth in active users from both existing and new customers • Prevailing revenue models: active user based and data/content revenue share Consumers • Continued growth in desktop revenues due to desktop user growth (Desktop and • Continued growt
Slide 24: Outlook Beyond FY2010
Outlook Beyond FY2010 • Overall Focus • Expand profits and margins from growth in revenues, combined with constrained headcount growth • Revenue Expectations * • Operators and desktop to continue to be the major drivers of revenue growth • Operator revenues expected to be largely driven from active
Slide 25: AdMarvel and the mobile advertising opportunity
AdMarvel and the mobile advertising opportunity • Acquisition gives Opera a foothold in burgeoning mobile advertising industry • AdMarvel is an optimization platform that simplifies management of mobile advertising spend, increases transparency, and improves return • Gives Opera new roads to revenue
Slide 26: Capital Markets Day 2010
Capital Markets Day 2010 suggestion Capital Markets Day 2010 • Opera will be hosting a Capital Markets Day • Timing: 4. March, 2010 (13:00 CET – 18:00 CET) • Location: Oslo, Holmenkollen Park Hotel Rica Speakers: Scott Ellison Vice President, Mobile & Wireless, IDC The Ecosystem: Operators, OEMs and
Slide 27: Operations update
Operations update
Slide 28: Opera's vision is to provide the best Internet experience on any device
Opera’s vision is to provide the best Internet experience on any device
Slide 29: Opera's road to growth in 2010
Opera’s road to growth in 2010
Slide 30: Key strategic objectives
Opera’s road to growth in 2010 Key strategic objectives • Build volume in existing tier-1 operator deals • Sign up more tier-1 operators • Focus on monetizing the 50 million+ mobile users • Strengthen leadership position in the growing connected TV market • Continue to grow desktop user base
Slide 31: Mobile Internet has become a strategic topic across all devices
What operators are thinking right now: Mobile Internet has become a strategic topic across all their devices 1995 2000 2002 2005 2007-2010 Voice SMS MMS Data Web Services
Slide 32: Large OEMs target the entire value chain
Reality check: Large OEMs target the entire value chain… Applications Products OS Apple Google Nokia Microsoft … leaving operators to deliver the pipe only
Slide 33: Operators want to turn any device into a service delivery platform
Operators want to turn any device into a service delivery platform Application offering Premium services Internet browsing & discovery Instant experience
Slide 34: Opera's unique ability to cover the entire mobile value chain
Opera’s unique ability to cover the entire mobile value chain Opera Turbo Opera Widgets Opera Mobile Opera Mini Smartphones Feature phones Basic phones
Slide 35: Ericsson eStore: powered by Opera
Ericsson eStore: powered by Opera • Opera helps deliver a groundbreaking application store • Includes Opera Mobile, Opera Mini and Opera Widgets • Available in 25 countries, reaching one billion subscribers
Slide 36: The OEM opportunity
The OEM opportunity • Branded, traditional OEMs compete directly with operators • Other OEMs seek to provide operators with branded or operator- branded solutions • Focus in 2010: Continue to win new OEMs that are focused on delivering operator-friendly solutions – self-branded or operator- branded
Slide 37: The dawn of China's 3G era
The dawn of China’s 3G era • Huawei selects Opera Mobile 10 • China’s 3G market is expected to grow four- fold in 2010 alone* • Huawei shipped more than 30 million handsets in 2009 *Source: Ministry of Industry and Information Technology
Slide 38: Opera Mobile: new models in 2009
Opera Mobile: 47 new models in 2009 HTC Motorola Toshiba HTC Touch 3G MOTOSURF A3100 Toshiba Biblio HTC Touch Diamond2 Motorola A1200R Toshiba T0002 Toshiba FullChen T001 HTC Touch Pro2 Motorola Karma QA1 (AT&T) Toshiba T003 HTC HD2 HTC Imagio Panasonic Willcom HTC Leo Willcom Honey BEE 2 HTC Pure P
Slide 39: Opera Mini: new models in 2009
Opera Mini: 172 new models in 2009 Fly Mobile Micromax Nokia con’t Pantech Samsung Sonim Fly mobile B 430 DS Micromax GC700 Nokia 6124 Pantech PA-711 Samsung 777 Sonim XP3.20 Nokia 6210 Pantech PA-715S Samsung Mythic Sonim XP3 Quest Micromax X555 Nokia 6210 Navi Pantech CDM8074 Samsung Flight Sonim
Slide 40: Opera's big opportunity: 50 million mobile users
Opera’s big opportunity: 50 million mobile users
Slide 41: How to deliver revenue on 50 million mobile users
How to deliver revenue on 50 million mobile users Short term: operators • Revenue share on traffic and content • Migration of users to paying operators • License per active user Long term: direct revenues • Develop direct billing integration technology • Revenue types: advertising, content, partners
Slide 42: The flexible operator business model
The flexible operator business model Examples from Russia Megafon • Opera Mini data plans • Revenue share on traffic/data generated by Opera Mini users MTS • New customer • Revenue generated on content and traffic • Bespoke, integrated billing system allows for easy revenue generation
Slide 43: The flexible operator business model
The flexible operator business model Example from Indonesia • Indonesia’s number one operator: 50% market share • Optimized Telkomsel version of Opera Mini 5 • Billing integration, and home page content • Opera Mini data plan
Slide 44: The flexible operator business model
The flexible operator business model Examples from South America and Philippines • TIGO (part of Millicom): Multi- country deals in Guatamala and Honduras • Localized for each country and downloaded over-the-air (OTA) • Customized SMART versions of Opera Mini 4 and Opera Mini 5 • SMART: More than 40
Slide 45: A worldwide operator footprint
A worldwide operator footprint Operator-branded (9): Opera branded Revenue- AT&T (USA) (New) share (6): Cell One (Namibia) MTS (Russia) (New) Debitel (Germany) Megafon (Russia) (New) O2 (Slovakia & Germany) Tigo (Guatemala) (New) SK Telecom Tigi (Nicaragua) (New) Swisscom (Switzerland) Smart (Philli
Slide 46: Connected TV market
• Market is growing rapidly: • 14.7 million connected TVs to ship in 2009 • 87.6 million connected TVs to ship in 2013 • Already signed up leading customers such Sagem, Philips, Toshiba, Sony, etc. • Target 2010: signing up additional TV customers • Services include widgets, browsing, video-on-deman
Slide 47: Nintendo introduces DSi upgrade with Opera
Nintendo introduces DSi upgrade with Opera • Nintendo DSi XL • A slightly larger, more powerful version of Nintendo’s hot-selling gaming device • Features the Opera browser
Slide 48: Expanding Opera's range of devices
Expanding Opera’s range of devices • Opera Mini on Zeebo gaming platform • GooMe selects Opera to deliver innovative Web, TV, and more via IPTV • Opera on 3View’s Freeview HD, world’s first HD set-top box capable of receiving free-to-air broadcasts
Slide 49: Opera 10.5: a new frontier in Web browsing
Opera 10.5: a new frontier in Web browsing • The ultra- scalable business model is already in place • The equation is simple: More users = more revenues
Slide 50: The world's fastest browser
The world’s fastest browser • Opera 10.5 introduces our newest JavaScript engine, Carakan • Carakan will enable a new, more powerful type of Web application
Slide 51: Praise for Opera 10.5
Praise for Opera 10.5 “The Rolls Royce of browsers has long been the innovation lab for the rest of the industry, with rivals touting features first seen on Opera as their own „inventions‟ years later.” “Opera 10.50 beta is out, and it‟s a real speed demon!” “Yes, it's here! Yes, it's faster than Go
Slide 52: Opera for Desktop: Revenue growth
Opera for Desktop: Revenue growth Opera Desktop Revenue (MNOK) • Revenue growth of 20% 50 compared to 3Q08 (37% in constant currency) 40 • User growth 37% 30 compared to 4Q08 and 11% vs 3Q09 20 10 0
Slide 53: Bringing choice to Europe
Bringing choice to Europe • New Windows 7 browser ballot screen coming shortly • Opportunity to attract millions of new users
Slide 54: Hi iPhone. Meet Opera Mini
Hi iPhone. Meet Opera Mini “Opera Mini beats the pants off iPhone's Safari browser by a wide margin.” – Eric Zeman, InformationWeek “The brief look I got was impressive. It‟s fast, for a start…And it‟s very easy to use” – Ciara O‟Brien, Irish Times “Today I tried out Opera Mini running on the iPhone
Slide 55: Opera Mini and Opera Mobile on Android
Opera Mini and Opera Mobile on Android • Opera Mini 5 and Opera Mobile 10 coming to Android devices • Operators save on bandwidth costs thanks to Opera Mini compression and Opera Turbo on high-end phones
Slide 56: Thank you for listening
Thank you for listening Key strategic objectives Committed to profitable growth in 2010 • Build volume in existing tier-1 operator deals • Sign up more tier-1 operators • Focus on monetizing the 50 million+ mobile users • Continue to grow desktop user base • Strengthen leadership position in the gro