Slide 1: 1Q 2020 Otello Corporation ASA
1Q 2020 OTELLO CORPORATION ASA
Slide 2: Disclaimer
Disclaimer This presentation contains, and is i.a. based on, forward-looking statements regarding Otello Corporation ASA and its subsidiaries. These statements are based on various assumptions made by Otello Corporation ASA, which are beyond its control and which involve known and unknown risks, unc
Slide 3: Agenda
Agenda • Executive Summary (CEO, Lars Boilesen) • Operational Review (CEO, Lars Boilesen) • Financial Review (CFO, Petter Lade) • Q&A (CEO, Lars Boilesen & CFO, Petter Lade) 3
Slide 4: Executive Summary
Executive Summary 4
Slide 5: Quarterly highlights
Quarterly highlights Financial metric (USD 1Q20 1Q19 million) Revenue 55.7 51.5 Adj. EBITDA* 2.6 1.4 • Both AdColony and Bemobi delivered above the guided 10% revenue growth in 1Q20 • Adj. EBITDA for both AdColony and Bemobi up from last year • Strong Operating cashflow of $6.6 million and positive
Slide 6: Operational Review
Operational Review 6
Slide 7: AdColony
AdColony • Revenue • Accelerating revenue growth, 12% YoY growth • Negative impact in March on Brand spend from Covid-19 • Positive impact in March on Performance spend from Covid-19 • Programmatic revenue growth of over 130% in 1Q20 vs 1Q19 • Cost • Merging demand side of Brand and Performance in 2
Slide 8: AdColony – 2020 & Covid-19 impact
AdColony – 2020 & Covid-19 impact • Expecting 10% revenue growth in 2020 vs 2019, but higher risk due to Covid-19 • Performance growth partially offsetting weakness in Brand spend • Overall April 2020 revenue flat vs March 2020 and up slightly vs April 2019 • Free cashflow breakeven post 2Q20 cost i
Slide 9: AdColony Global Brand Business
AdColony Global Brand Business 9
Slide 10: Results: Brand Advertising
Results: Brand Advertising Revenue Source 1Q 2020 Y-O-Y Growth Brand (incl. IO and PMP) $14.1M + 21% - 9% Brand Performance $4.8M Programmatic $9.9M + 136% Open Marketplace TOTAL $28.8M + 36% • Followed up +20% Y-O-Y growth in 4Q19 with +36% Y-O-Y growth in 1Q20 • Huge surge in programmatic (both PM
Slide 11: Tremendous Momentum
Tremendous Momentum • Prior to Covid-19 impacting March revenue, Brand was on pace for +50% Y-O-Y growth • Q419 was the first time we showed Y-O-Y growth on the Brand side of our business in 3.5 years, continued acceleration in 1Q20
Slide 12: EMEA & LATAM Brand
EMEA & LATAM Brand 1Q Revenue 2019 vs 2020 1Q 2020 Sales Breakdown by Product $9,0 $8,3 3% Millions $8,0 $7,0 $6,0 $5,7 $5,0 48% $4,0 49% $3,0 $2,0 $1,0 $0,0 Q1 2019 1Q 2020 1Q Instant Play LinkedIn Spotify • +45% revenue increase from Q1 2019 YoY, the increase is coming from all 3 main product reve
Slide 13: 2020 Focus Areas
2020 Focus Areas EMEA & LATAM Brand Instant Play • Moving customers to programmatic, more scalable and enables us to onboard new clients looking for minimal creative work and lower pricing models • In France & Poland we increased our salesforce with new reseller agreements LinkedIn • Enhancing self-
Slide 14: APAC
APAC • Revenue flat in 1Q20 vs 1Q19, impact from Covid-19 throughout the quarter • Gross margins at 50% • Programmatic as a proportion of overall revenue grew by 13% over 2019 • Japan continues to see positive early revenue growth following the launch of Brand business in 2H19
Slide 15: AdColony Global Performance & Publishing
AdColony Global Performance & Publishing 15
Slide 16: Results: Performance Advertising
Results: Performance Advertising Summary: 1Q20 Performance Revenues = USD 13.9 million Q1 Revenue Trend Performance Revenues $20,0 • Positive revenue trend (+8.5%), 1st Q-o-Q since 3Q17 +8.5% $15,0 2Q19 3Q19 • Double digit growth in key categories– 4Q19 Casual, Reward / Scratcher and Hyper- $10,0 1Q
Slide 17: Performance back to growth in 2020
Performance back to growth in 2020 1. Turn around we saw in Brand in 1Q19 we are now seeing in Performance 2. Investment in Data Science Team in Poland => IR (Install Rate) & ROAS (Return On Ad Spend) models => Better IR and ROAS will give us a bigger portion of the spend from the advertisers 3. Con
Slide 18: Key Publishing Wins
Key Publishing Wins 50 of Top 100 Trending Apps are with AdColony SDK 18
Slide 19: Bemobi
Bemobi 19
Slide 20: Bemobi's two pillars for sustainable profitable growth
Bemobi’s two pillars for sustainable profitable growth in emerging markets makes us unique Illustration of growth in number of subscribers APPSCLUB SERVICES Compelling subscription services with best of Growth comes from combining multiple breed apps & games priced for each emerging ADDRESSABLE USER
Slide 21: Bemobi's key subscription service offerings
Bemobi’s key subscription service offerings SUBSCRIPTION SERVICES 1 APPSCLUB FAMILY 2 STANDALONE 3 VOICE & FINANCIAL SERVICES SUBSCRIPTION APPS Bundles of top apps & games in a low Distribution of standalone subscription Market-leading on Voice price point subscription model apps Messaging provider
Slide 22: Bemobi's distribution channels
Bemobi’s distribution channels DISTRIBUTION CHANNELS 1 MOBILE CARRIERS PROMOTIONS 2 PAID ONLINE CAMPAIGNS 3 CO-OWNED CHANNELS WITH MOBILE CARRIERS When a deal is signed, the mobile Partnering with leading apps and web Bemobi’s turnkey platform for mobile carrier commits to doing marketing properties
Slide 23: Co-owned digital channels with mobile carriers
Co-owned digital channels with mobile carriers NO CREDIT NO DATA WEB PORTAL NO CREDIT VOICE PORTAL • Live channel platform in 18 Carriers • Live channel platform in 4 Carriers (4 LATAM + 14 INTL) (4 Brazil) 23
Slide 24: Revenue & Adj. EBITDA growth
Revenue & Adj. EBITDA growth ∆ (%) Bemobi 1Q20 1Q19 Y-o-Y Revenue (USD M) 13,0 12,8 2% EBITDA (USD M) 5,1 5,0 2% ∆ (%) Bemobi - Ex-FX Rate 1Q20 1Q19 Y-o-Y Revenue (USD M) 14,8 12,8 16% EBITDA (USD M) 6,0 5,0 20% FX Rate impact YoY (1Q20 vs. 1Q19) • INTL basket: -1.0% • LATAM BRL: - 18.1% 24
Slide 25: Bemobi – Subscriber growth driving revenue and scale
Bemobi – Subscriber growth driving revenue and scale • Total # subscribers up 9.4 million vs 1Q19 40,0 4,0% 35,0 • LATAM up 5.5 million including Voice 3,6% 34,6 35,4 (IVR) and financial services 30,0 3,0% 3,2% subscribers 25,0 26,7 26,0 20,0 2,0% • International up 3.9 million due to 15,0 20,3 glob
Slide 26: Bemobi – Strong channel mix
Bemobi – Strong channel mix Co-owned Channels International markets continue subscriber growth 1Q19 vs. 1Q20 (from 6.2M to 10.1M) NDNC CHANNEL FROM TO Comments • 13 portals live in Bemobi outside of LATAM: • Idea India Bemobi1 (co- 32% 32% Subscriber base growth from this • Vodafone India • Grameenp
Slide 27: Bemobi
Bemobi • New voice based channels and omnichannel platform with good traction in Brazil and about to begin international rollout • New voice and financial services offers growing in Brazil and show potential for a future international rollout • Bemobi co-owned channel growth in international markets
Slide 28: Bemobi IPO and FX
Bemobi IPO and FX • We are still aiming to carry out a separate listing of Bemobi. • Based on last investors roadshow in Q1 2020, Brazil seems like a strong potential listing venue for Bemobi. • Due to COVID 19 and the volatility of the markets any potential IPO plans will temporarily be on hold unt
Slide 29: Bemobi - COVID-19 initial impact
Bemobi - COVID-19 initial impact • Bemobi’s revenues rely on mobile lower income pre-paid users from emerging countries • In emerging countries, informal work represent 40%-60% of the population and mobile pre-paid have been the most economically impacted by a full-lockdown as they lose all/most the
Slide 30: Opera TV (Vewd)
Opera TV (Vewd) • As previously communicated, there is an ongoing legal dispute with majority shareholder (MFC) • Favorable verdict granted on liability, not appealed by MFC • MFC ordered by the Court to pay a substantial portion of Otello’s legal costs to date, all cash received • Otello has now re
Slide 31: Financial Review
Financial Review 31
Slide 32: Otello Corporation 1Q20
Otello Corporation 1Q20 (USD million) 1Q 2020 1Q 2019 % Change Revenue Revenue up 8% vs 1Q19, 55.7 51.5 8% growth in AdColony and Publisher and revenue share cost Payroll and related expenses (32.1) (12.9) (29.6) (12.5) 9% 3% Bemobi Stock-based compensation expenses (0.6) (1.1) -43% Depreciation and
Slide 33: Otello Corporation 1Q20
Otello Corporation 1Q20 Revenue (USD million) OPEX (USD million) • Revenue growth vs 1Q19 for both AdColony and Bemobi 70,0 21,2 21,0 20,9 20,5 20,5 63,1 56,2 55,7 51,5 • OPEX virtually flat versus 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 Adj. EBITDA (USD million) 8,0 6,0 3,9 • Adj. EB
Slide 34: AdColony
AdColony Revenue USD million) OPEX (USD million) 55 48 12 Brand - 42 43 Programmatic • Revenue slightly above 38 8 5 9 expectations in 1Q20, very 15,9 15,8 15,8 15,7 15,6 4 7 10 Brand - 5 6 5 Performance strong Programmatic revenue 12 15 17 22 Brand - Managed 14 IO • Performance business with first
Slide 35: Bemobi
Bemobi Revenue (USD million) OPEX (USD million) 14,8 4,5 • Reported revenue up 2% 14,9 14,8 13,9 4,1 4,1 YoY, would have been 16% 3,8 13,0 12,8 3,6 3,3 with neutral FX rates • Strong Gross margin, 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 fluctuates based on Gross Margin % Adj. EBITDA (USD m
Slide 36: Cash flow
Cash flow Cash flow (USD million) 8.8 (5.5) • Operating cash flow: USD 6.6 million • Positively impacted by positive Adj. EBITDA, (3.1) strong 4Q19 revenue and good cash collection 6.6 • Cash flow from Investment: USD (3.1) million • Capitalized R&D: USD (2.7) million • CAPEX: USD (0.4) million • Ca
Slide 37: Financial position
Financial position Financial Position (USD million) Balance sheet (USD million) 35 Other assets 80,4 35,0 Cash Accounts 62,5 304,4 5 Equity receivables Goodwill 219,7 -30 93,5 Liabilities Gross Cash Gross Debt Net Cash 37
Slide 38: Outlook AdColony
Outlook AdColony 2Q20* 2020** (unchanged) Revenue: Flat Revenue: Up ~10% Gross margin: Flat Gross margin: Flat OPEX: Down OPEX: Flat *Vs 2Q19 **Vs 2019 38
Slide 39: Outlook Bemobi
Outlook Bemobi 2Q20* 2020** (unchanged) Revenue: Flat Revenue: Up ~ 10% Adj. EBITDA: Flat Adj. EBITDA: Up ~ 10% *Vs 2Q19 (local currency) **Vs 2019 (local currency) 39
Slide 40: Q&A
Q&A 40