Slide 1: Opera Software: Second quarter 2011
Opera Software: Second quarter 2011
Slide 2: 2Q 2011 Financial highlights
2Q 2011 Financial highlights Financial metric 2Q11 2Q10 Status report (MNOK) (MNOK) Revenue Total revenue 214.8 168.9 Profitability Adj. EBITDA* 56.1 38.2 EBIT 44.5 28.8 • Record revenue and profitability • Strong revenue growth from operators and desktop • Continuing to see a shift in revenue mix t
Slide 3: Highlights
Highlights Operators • Strong growth in operator Opera Mini users: 16.2 million in June 2011, vs. 4.5m in June 2010, up 260% • Strong operator platform for continued growth • Growth from existing customers like Telkomsel, AT&T and MTS • Vodafone launching Co-branded version of Opera Mini • New wins
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: 2Q 2011 Financial highlights
2Q 2011 Financial highlights Financial metric 2Q11 2Q10 (MNOK) (MNOK) Revenue Total revenue 214.8 168.9 Profitability Adj. EBITDA* 56.1 38.2 EBIT 44.5 28.8 Cash generation Operating Cash 19.8 62.3 Flow Free Cash Flow** 3.5 54.9 *Non-IFRS EBITDA excludes stock option costs ** Operating Cash Flow less
Slide 7: 2Q11 Actuals versus Guidance
2Q11 Actuals versus Guidance 2Q 2011 Actuals 2Q 2011 Midpoint 2Q 2011 Actuals Guidance* at Guidance FX (May 11) Rates (May 11)* Revenue MNOK 214.8 MNOK 212 MNOK 219 EBIT NOK 44.5 MNOK 42.5 MNOK 48 *Provided at 1Q11 Presentation
Slide 8: 2Q11 Financial review
2Q11 Financial review MNOK 2Q2011 2Q2010 Q on Q 1H 2011 1H 2010* 1H vs. 1H Desktop + 70.1 59.1 19% 141.0 111.1 27% Internet Devices + 144.7 109.9 32% 281.1 209.2 34% Total revenue = 214.8 168.9 27% 422.1 320.3 32% Payroll and related 111.4 95.2 17% 219.2 195.5 12% expenses - Stock option costs - 4.1
Slide 9: Financial highlights: 1Q07-2Q11
Financial highlights: 1Q07-2Q11 Operating revenues (NOK Million) Adjusted EBITDA* (NOK Million) Desktop Internet Devices EBITDA* 220 60 200 50 180 160 40 140 120 30 100 20 80 60 10 40 0 20 0 -10 Q210 Q310 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q4 10 Q1 11 Q2 11
Slide 10: Revenue growth drivers
Revenue growth drivers Operators: Users and Usage Desktop: Users and Usage Mobile Consumers and Publishers: Users and Usage Device OEMs: ConnectedTVs
Slide 11: Revenue: Customer type (2Q11)
Revenue: Customer type (2Q11) Overall revenue higher than expected (vs. midpoint), offset by negative FX Customer Type Operator As expected vs. guidance Desktop As expected vs. guidance Device OEM As expected vs. guidance Mobile OEM As expected vs. guidance Mobile Consumers & Publishers Better than
Slide 12: Revenue: Operators (2Q11)
Revenue: Operators (2Q11) Operator Revenue in line with expectations 260% Operator Opera Mini user growth June 2011 vs. June 2010 User growth driven by Motricity (AT&T), Telkomsel, Telenor and MTS in particular ARPU as expected Overall revenue growth: 41% versus 2Q10 and up as expected vs. 1Q11 MNOK
Slide 13: Revenue: Mobile Consumer & Publishers
Revenue: Mobile Consumer & Publishers Mobile Consumer & Publishers revenue higher than expected Revenue growth driven by AdMarvel and the Opera Mobile Store AdMarvel serving 50B+ ad impressions per quarter Overall revenue growth: ~200% versus 2Q10 and up more than as expected vs. 1Q11 MNOK Mobile Co
Slide 14: Revenue: Device OEMs (2Q11)
Revenue: Device OEMs (2Q11) Device OEM revenue in line with expectations Revenue growth driven by Connected TV customers License revenue: 85%+ of revenue Overall revenue growth: 17% versus 2Q10 and up as expected vs. 1Q11 MNOK Device OEM revenue* NRE + M&S Licenses 40 35 5 30 9 25 20 33 36 15 29 30
Slide 15: Revenue: Mobile OEMs (2Q11)
Revenue: Mobile OEMs (2Q11) Mobile OEM revenue in line with expectations License revenue: ~50% of revenue Overall revenue growth: -45% versus 2Q10 and down vs. 1Q11 as expected MNOK Mobile OEM revenue* NRE + M&S Licenses 30 25 20 15 7 21 22 10 6 13 12 5 6 Opera Mobile shipments were 0.5 mm in 0 2Q11
Slide 16: Revenue type: Internet Devices (2Q11)
Revenue type: Internet Devices (2Q11) Revenue type Comment NRE Down as expected vs. 2Q10 and in line with expectations vs. 1Q11 M&S Down as expected vs. 2Q10 and in line with expectations vs. 1Q11 Total Opera Mini Opera Mini revenue up as expected vs. 1Q11 and 2Q10, with strong growth in license rev
Slide 17: Revenue: Desktop (2Q11)
Revenue: Desktop (2Q11) Desktop revenue in line with expectations Desktop user growth 20% versus end of 2Q10 Strong ARPU offset by weaker USD Overall revenue growth: 19% versus 2Q10 and relatively flat as expected versus 1Q11 Monthly Desktop users* Desktop revenue* (MNOK) (last month of quarter) 80
Slide 18: Revenue: Opera-branded Opera Mini (2Q11)
Revenue: Opera-branded Opera Mini (2Q11) 120 000 000 Monthly users • Growth continuing 110 000 000 100 000 000 • High focus on 90 000 000 converting users to operator- 80 000 000 branded or co- 70 000 000 branded revenue 60 000 000 generating users 50 000 000 • High priority of 40 000 000 new Consum
Slide 19: Key user metrics FY2010 - 2011YTD
Key user metrics FY2010 - 2011YTD January April July October January April July Metric 2010 2010 2010 2010 2011 2011 2011 Operator Opera 2.1* 3.5* 5.2* 7.5* 11.5* 15.0* 16.8* Mini Million Million Million Million Million Million Million users Opera- branded 50** 59** 62** 75** 90** 106** 122** Opera
Slide 20: OPEX development
OPEX development OPEX (NOK Million) Cost line 2Q11 vs. Comments 2Q10 One time extraordinary cost Payroll 17% Payroll and related expenses Other OPEX increased in 2Q11 versus Depreciation 2Q10 due to higher compensation expense per Stock Options employee and overall Payroll headcount growth. Stock 6%
Slide 21: Adjusted EBITDA development
Adjusted EBITDA* development 2Q 2010 / 2Q 2011 (NOK Million) 120 100 80 60 40 20 0 EBITDA Internet Desktop Currency Total costs Currency EBITDA Q2 2010 Devices Revenue impact impact Q2 2011 revenue revenue costs *Non-IFRS Adjusted EBITDA excludes stock option costs and one-time costs.
Slide 22: Strong capital structure
Strong capital structure Balance sheet highlights: Metric 2Q11 (MNOK 2Q10 (MNOK) Cash 454 528 Interest-bearing debt 0 0 NWC* -24 -87 Equity 642 617 * NWC is defined as total current assets excluding cash and cash equivalents and minus total current liabilities excluding provisions.
Slide 23: Cash flow 2Q11 (MNOK)
Cash flow 2Q11 (MNOK) 60 50 40 30 20 10 0 -10 -20 -30 -40
Slide 24: 2Q11 Key KPIs: Summary
2Q11 Key KPIs: Summary Metric 2Q11 2Q10 Change % Revenue (MNOK) 214.8 168.9 27% EBIT (MNOK) 44.5 28.8 55% Adjusted EBITDA ** (MNOK) 56.1 38.2 47% Adjusted EBITDA Margin** 26.1% 22.6% 16% Operating Cash Flow (MNOK) 19.8 62.3 -68% Free Cash Flow (MNOK) 3.5 54.9 -94% Opera Mini Operator users (mill)* 1
Slide 25: 3Q11 Guidance
3Q11 Guidance Metric Current 3Q 2011 Guidance Revenue* MNOK 217-227 EBIT** MNOK 50-55 *Assumes currency remainder of 2011 (NOK 5.5 /USD, NOK 7.9/EUR) **Earnings before interest and taxes, exclude extraordinary/one-time charges and acquisition costs.
Slide 26: 3Q11 Guidance
3Q11 Guidance Vs. 2Q11 Comments Revenue* Operators Flat-Down Opera Mini active user growth offset by less NRE and Opera Mobile revenue Desktop Flat Seasonally weaker 3Q Device OEMs Up Higher due to connected TV customers Mobile OEMs Up Higher due to minimum commitments Mobile Flat Seasonally weaker
Slide 27: 4Q11 Guidance
4Q11 Guidance Metric Current 4Q 2011 Guidance Revenue* MNOK 231-241 EBIT** MNOK 45-50 *Assumes currency remainder of 2011 (NOK 5.5 /USD, NOK 7.9/EUR) **Earnings before interest and taxes, exclude extraordinary/one-time charges and acquisition costs.
Slide 28: 2011 Guidance
2011 Guidance Metric Current 2011 Guidance Prior 2011 Guidance May. 11 Revenue* MNOK 870-890 MNOK 840-890 EBIT** MNOK 180-190 MNOK 160-190 *Assumes currency remainder of 2011 (NOK 5.5 /USD, NOK 7.9/EUR). **Earnings before interest and taxes, exclude extraordinary/one-time charges and acquisition cos
Slide 29: Operations update
Operations update
Slide 30: 16 million+ operator Opera Mini users
16 million+ operator Opera Mini users 18 000 000 Monthly subscribers 16 000 000 14 000 000 12 000 000 10 000 000 8 000 000 6 000 000 4 000 000 2 000 000 0 Operators choose Opera because they can build a very large and active user base quickly
Slide 31: Boosting mobile Internet services across Africa and Middle East
Boosting mobile Internet services across Africa and Middle East •Global frame agreement with MTN Group in Middle East and Africa •Launch MTN Co-branded Opera Mini in all MTN markets – 21 markets (MTN ZA already launched in Jan) •Demand for mobile Internet growing exponentially across Africa and Midd
Slide 32: MTN Cobranded Opera Mini - roll out plan
MTN Cobranded Opera Mini - roll out plan September October November December Nigeria Syria Guinea Bissau Cameroon Cyprus Guinea Conakry Rwanda Yemen Liberia Afghanistan Congo Botswana Swaziland Sudan Ghana Ivory Coast Benin Uganda Iran Zambia • Launch MTN Co-branded Opera Mini in all 21 MTN markets
Slide 33: Extension of current agreement with Vodafone
Extension of current agreement with Vodafone: It’s now up to the operators •Three-year extension of successful partnership •Evolving from a customized model to co-branded model •Expecting new operators in markets where we have a large amount of active users – first out India
Slide 34: Oupeng: Reshaping the mobile Internet market in China
Oupeng : Reshaping the mobile Internet market in China •Opera joint venture, nHorizon Innovation Software Ltd., launches Oupeng browser in China •Telling Telcom is China’s top mobile phone distributor •Important part of Opera’s growth strategy in China
Slide 35: Oupeng: Successful launch
Oupeng: Successful launch Speech from CEO, Telling Telecom Speech from SVP, SE China •Over 200 people attended •Over 100 channels onsite •Over 60 media present at launch •Top executives from Moto, Samsung, SE, LG and HTC China were present, and have given positive feedback for preinstallation
Slide 36: Now 20 countries with more than 1 million Opera Mini users
Now 20 countries with more than 1 million Opera Mini users New countries include: -Nigeria -Turkey Number of countries -Vietnam 25 -Mexico -Brazil 20 -USA and more… 15 Number of 10 countries 5 0 June 2010 June 2011
Slide 37: Accelerating user growth on Android
Accelerating user growth on Android Opera on Android 6 000 000 5 000 000 4 000 000 3 000 000 2 000 000 1 000 000 - •Strong focus from development department •Supreme rating in Android Market •Strong user growth
Slide 38: 200+ million people use Opera
200+ million people use Opera Opera Mini Opera for Desktop Opera Mobile & Devices
Slide 39: TV: Opera the leading vendor in the TV/set-top box segment
TV: Opera the leading vendor in the TV/set- top box segment
Slide 40: Opera connected TVs now in store!
Opera connected TVs now in store! • Strong growth in connected TV and Blu-ray devices • Deals announced in 2010 now shipping in high volume globally • Good deal flow in Q2 (Humax, Airties, Fulan, SetOne and Comtrend) • From web engine only, to TV services
Slide 41: Desktop update
Desktop update
Slide 42: Opera for desktop: Continued revenue and user growth
Opera for desktop: Continued revenue and user growth • Continued revenue growth Desktop revenue (MNOK) • 70.1 MNOK: increase of 19% compared to 2Q10 80 • FX impacted revenue 70 negatively with USD down 14% in 2Q11 vs. 2Q10 60 50 • Continued user growth 40 • 55 million Opera desktop 30 users in June
Slide 43: Latest progress on partner deals on Desktop
Latest progress on partner deals on Desktop •Increased focus on content affiliate deals •Co-promote products and services •Monthly minimums + revenue share
Slide 44: Launch of Opera 11.50
Launch of Opera 11.50 • Speed Dial Extensions • Password synchronization • New ‘featherweight’ interface • Support for the latest HTML5 • Upgraded core rendering engine • Tweaked graphics engine with faster CSS and SVG rendering
Slide 45: Service Components
• Advertising • Audience Network Service • Opera Mobile Store Components • Content partnerships & Speed Dials slots • Payment Exchange
Slide 46: AdMarvel Ad Exchange and Audience Network
AdMarvel Ad Exchange and Audience Network •Main Q2 deliverables in the Open Mobile Ad Exchange was the launch of Bid/Ask auction •In conjunction with the Opera Mobile Audience Network we have created the first open marketplace for publishers and advertisers to participate in a real-time auction, usi
Slide 47: Mobile App store globally
Opera is exceeding 1.6M+ downloads/day Current Leaders #6 • Apple iTunes: 16M per day Mobile • Android: 9M App store • Ovi: 5M per day • GetJar: 3M per day globally • BlackBerry: 2M per day
Slide 48: O OPERA’
O OPERA’ software