Slide 1: Opera Software: Third quarter 2010
Opera Software: Third quarter 2010
Slide 2: Agenda
Agenda 1. Highlights Lars Boilesen, CEO 2. Financial review Erik Harrell, CFO/COO 3. Operations review Lars Boilesen, CEO 4. Q&A 2 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 3: 3Q 2010 Financial highlights
3Q 2010 Financial highlights Financial metric 3Q10 3Q09 Status report (MNOK) (MNOK) Revenue Total revenue 178.3 134.8 Profitability EBITDA* 45.8 2.1 EBIT 34.8 -4.6 • Revenue and cost in line with expectations • Operator revenue increasing as portion of revenue; NRE revenue declining • Good user grow
Slide 4: Highlights (1Q10 – 4Q10TD)
Highlights (1Q10 – 4Q10TD) Operators • Volume growth with tier-one operators such as AT&T, Vodafone, MTS, Telkomsel, TIM Brazil: Total of 7.5 million Opera Mini users in October • Key wins: Telenor & Verizon • Strong deal flow and ramp up, Nextel, Telkomsel, MTS, Megafon, TIM, Smart, Tigo, Tele2 – a
Slide 5: Financial review
Financial review 5
Slide 6: 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 7: 3Q 2010 Financial highlights
3Q 2010 Financial highlights Financial metric 3Q10 3Q09 Status report (MNOK) (MNOK) Revenue Total revenue 178.3 134.8 Profitability EBITDA* 45.8 2.1 EBIT 34.8 -4.6 Cash generation Operating Cash -1.6 47.4 Flow Free Cash Flow** -5.7 40.9 *Non-IFRS EBITDA excludes stock option costs ** Operating Cash
Slide 8: 3Q10 Financial review
3Q10 Financial review MNOK 3Q2010 3Q2009 Q on Q 9M 2010* 9M 2009 9M vs 9M Desktop + 60.3 42.8 41% 171.4 134.5 27% Internet Devices + 118.0 92.0 28% 327.2 335.7 -2% Total revenue = 178.3 134.8 32% 498.7 470.2 6% Payroll and related 94.5 96.1 -2% 290.0 297.0 -2% expenses - Stock option costs - 5.1 2.7
Slide 9: Financial highlights: 1Q07-3Q10
Financial highlights: 1Q07-3Q10 Operating revenues (NOK Million) EBITDA* (Non-IFRS) (NOK Million) Desktop Internet Devices EBITDA* 200 50 180 40 160 140 30 120 100 20 80 60 10 40 0 20 0 -10 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 Q210 Q310 Q1 07 Q2 07 Q3 07 Q4 0
Slide 10: Revenue growth drivers
Revenue growth drivers Active users with operators Desktop users Opera Mini user base and ARPU Agreements with Connected TV vendors 10 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 11: Revenue: Customer Type (3Q10)
Revenue: Customer Type (3Q10) • Operator revenue generally in line with expectations • Desktop revenue stronger than expected • Device revenue in line with expectations • Mobile OEM revenue stronger than expected • Other Revenue in line with expectations with good contribution from AdMarvel 100% 200
Slide 12: Revenue: Operators (3Q10)
Revenue: Operators (3Q10) • Operator revenue generally in line with expectations with license revenue up as expected • 488% Operator Opera Mini user growth September 2010 vs. September 2009 • User growth driven by Motricity (AT&T) and Telkomsel, in particular MNOK Operator Revenue 8,000,000 Monthly
Slide 13: Revenue: Device OEMs (3Q10)
Revenue: Device OEMs (3Q10) • Device OEM revenue in line with expectations • Revenue driven primarily from the gaming console and ConnectedTV segments • License revenue: 65%+ of revenue MNOK Device OEM Revenue 40 35 30 25 20 15 10 5 0 4Q09 1Q10 2Q10 3Q10 13 Finner ikke bildedelen med relasjons-ID rI
Slide 14: Revenue: Mobile OEMs (3Q10)
Revenue: Mobile OEMs (3Q10) • Mobile OEM revenue stronger than expected due to wins in the quarter such as TCL MNOK Mobile OEM revenue 30 25 20 15 10 5 0 4Q09 1Q10 2Q10 3Q10 Opera Mobile shipments were 1.3mm in 3Q10 from Mobile OEMs 14 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 15: Revenue Type: Internet Devices (3Q10)
Revenue Type: Internet Devices (3Q10) • NRE revenue down as expected • M&S revenue in line with expectations • Opera Mini revenue generally as expected, with strong growth in license revenue Revenue type 4Q09 1Q10 2Q10 3Q10 (MNOK) (MNOK) (MNOK) (MNOK) NRE 28 34 29 19 M&S 14 11 11 10 Total Opera 20 2
Slide 16: Revenue: Desktop (3Q10)
Revenue: Desktop (3Q10) • Desktop revenue higher than expected • Desktop user growth as expected, in seasonally weaker quarter • Higher ARPU than expected due to higher search and content partnership revenue Monthly Desktop users Desktop Revenue (last month of quarter) (MNOK) 60 70 50 60 50 40 40 30
Slide 17: Revenue: Opera-branded Opera Mini (3Q10)
Revenue: Opera-branded Opera Mini (3Q10) 80,000,000 Monthly users 70,000,000 • Growth continues 60,000,000 • High focus on 50,000,000 converting users to Operator 40,000,000 branded or Co- branded revenue 30,000,000 generating users • Increasing ARPU 20,000,000 on 100% Opera- 10,000,000 branded user
Slide 18: Key user metrics FY2010 - YTD
Key user metrics FY2010 - YTD January April July October Metric 2010 2010 2010 2010 Operator Operator Opera Opera Mini Mini 2.1* 2.1* Million Million 3.5* 3.5* Million Million 5.2* 5.2* Million Million 7.5* Million users users Opera- Opera- branded branded 75** Million 50** 50** Million Million 59**
Slide 19: Cost management priorities
Cost management priorities Budget discipline • Reduced cost growth Constrained headcount • Reduced cost growth Project prioritization • Higher margin on projects Resource allocation • Higher margin on projects based on ROI Continuous optimization • Reduced cost per user of hosting facilities 19 Finn
Slide 20: OPEX development
OPEX development OPEX (NOK Million) One time extraordinary cost Cost line 3Q10 vs. Comments Other OPEX 3Q09 Depreciation Payroll -2% • Lower headcount (6%) Stock Options vs. 3Q09 Payroll Stock 88% •New employee option 180 options grants issued during the last twelve months. 160 • Investments in prim
Slide 21: EBITDA development
EBITDA* development 3Q 2009 / 3Q 2010 (NOK Million) 60 50 40 30 20 10 0 EBITDA Internet Desktop Currency Total costs Currency EBITDA Q3 2009 Devices Revenue impact impact Q3 2010 revenue revenue costs *Non-IFRS EBITDA excludes stock option costs 21 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 22: Strong capital structure
Strong capital structure Balance sheet highlights: Metric 3Q10 (MNOK 3Q09 (MNOK) Cash 509 580 Interest bearing debt 0 0 NWC* -61 -82 Equity 629 601 * NWC is defined as Total current assets excluding cash and cash equivalents and minus Total current liabilities excluding provisions. 22 Finner ikke bi
Slide 23: Cash flow 3Q10 (MNOK)
Cash flow 3Q10 (MNOK) 40 30 20 10 0 -10 -20 -30 23 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 24: Financial high-level summary: 4Q10
Financial high-level summary: 4Q10* • Revenues: Expectations vs. 3Q10 (constant currency)* • Solid revenue growth from operators • Increase in desktop revenue as we move into seasonally strong 4Q • Flat revenue from Device OEMs • Fall in revenue from Mobile OEMs due to lower NRE and license revenues
Slide 25: 2010/4Q Updated guidance
2010/4Q Updated guidance Metric 2010*** (Earlier) 2010 (Updated) 4Q 2010 Revenue* MNOK 680-690 MNOK 684-692 MNOK 185-193 Expenses** MNOK 585-595 MNOK 582-588 MNOK 152-158 *Assumes currency remainder of 4Q10 (NOK 6.0 /USD, NOK 8.2/EUR). ** Includes payroll, other OPEX, stock option costs and deprecia
Slide 26: Operations update
Operations update 26
Slide 27: Winning the users
Winning the users 27 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 28: More than ever, our industry is all about winning users
More than ever, • Industry position: The open and independent our industry is alternative all about • Users: Large and fast- winning users. growing userbase across platforms and devices Opera is • Customer portfolio: incredibly well Leading operators and positioned. OEMs driving Opera’s brand in key
Slide 29: 140+ million people use Opera
140+ million people use Opera Opera Mini Opera for Desktop Devices 29 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 30: Telenor Serbia
Telenor Serbia • Biggest partner launch so far • Offer: bundle of Internet services called ”Klik”, which includes Opera Mini, Facebook and email • Free trial until end of 2010 • Fully integrated campaign, all above- the-line and below-the-line channels • “Introducing Telenor Klik with Opera feels li
Slide 31: Serbia today: Leading mobile browser
Serbia today: Leading mobile browser 31 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 32: Walk the talk: Operators launch Opera
Walk the talk: Operators launch Opera Tele2 (Russia) Megafon (Russia) 32 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 33: Walk the talk: Operators launch Opera
Walk the talk: Operators launch Opera Smart (Philippines) TATA (India) Telkomsel (Indonesia) 33 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 34: Walk the talk: Operators launch Opera
Walk the talk: Operators launch Opera Vodafone (India) Vodafone (Turkey) 34 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 35: Walk the talk: Operators launch Opera
Walk the talk: Operators launch Opera TIM (Brazil) SafariCom (Kenya) 35 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 36: TIM Brazil and Opera change the mobile Internet landscape in Brazil
TIM Brazil and Opera change the mobile Internet landscape in Brazil Opera Mini in Brazil Co-branded application ”Navegador” Downloadable or pre-installed for TIM subscribers 36 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 37: Status with key operators
Status with key operators • Released in 28 markets, ad-supported launches in 11 of these as of today with more to come • Handsets launched, campaigns running. Opera pre-loaded in 24 handsets, with more to come • Launched on Virgin Mobile USA, prepaid • Four devices shipping with Opera • Russia: Part
Slide 38: Status with key operators
Status with key operators • Russia: Launched nationwide in August with strong results • Indonesia: Continuous growth, focusing on marketing to grow Opera Mini data-plan users • Brazil: Launched in 3Q, looking to do more joint campaigns in Q4 • Phililipines: Launched in 2Q, campaigning co-branded pro
Slide 39: Status with key operators
Status with key operators • Colombia: Launched, co-brand deal • Guatemala: Launched, co-brand deal • Honduras: Launched, co-brand deal • India: Launched • Russia: National deal signed and launched with strong results 39 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 40: Mobile manufacturers: Opera and TCL
Mobile manufacturers: Opera and TCL • TCL Communication selects Opera Mini for its mobile phones. • TCL is a tier-1 mobile phone/TV vendor in China (Alcatel & Thomson brand). • TCL is a primary vendor to Vodafone. 40 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 41: MediaTek and Opera
MediaTek and Opera • Overall, MediaTek is the second biggest producer of handsets after Nokia. • MediaTek just recently started shipping with preinstalled Opera Mini. • Demand is strong from selected Operators (VF) and International Market (SEA & India) (45%). 41 Finner ikke bildedelen med relasjons
Slide 42: Opera’s manufacturer partners
Opera’s manufacturer partners Alcatel •ASUS •Beetel •Bright Telecom •CASIO •Fly •Fujezone •HTC •Huawei •Infibeam •Karbonn •Kyocera •Lava •Lemon •LG Mobile •Micromax •Motorola •MVL •Nokia •O2 •Olive •Pantech •Samsung •Sharp •Sony Ericsson •Spice •Spice •Toshiba •Wynncom •Yulong •ZTE 42 Finner ikke bi
Slide 43: Opera: The browser that fits them all
Opera: The browser that fits them all Number of new phones introduced: Opera Mobile Opera Mini 3Q 2010: 8 3Q 2010: 36 2010 in total: 24 2010 in total: 92 43 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 44: Open Mobile Ad Exchange
Open Mobile Ad Exchange • Pairing users with the most relevant ads. • Finding the best format and targeting the right consumers • Platform for publishers • Superior visibility and control over advertising • Complete ad serving and campaign management • Platform for advertisers • Superior visibility
Slide 45: Signed contracts
Connected TV contracts -1H-09 2H-09 1H-10 2H-10 Signed contracts Un-named 45 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 46: 3Q: The return of the desk phone
3Q: The return of the desk phone Leadtek, a leading Taiwan-based manufacturer of video telecommunication products, has selected Opera Devices SDK to bring widgets and full web browsing to its new multimedia phones, AMOR 8210 and AMOR 8a10. 46 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 47: Philips moves its TVs and Blu-ray players online
47 Philips moves its TVs and Blu-ray players online • Philips delivers: NetTV to its entire range of TVs NetTV to over half of its Blu-ray players • Positive shipment forecasts for 2011 47 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 48: The HTML5 revolution will be televised
The HTML5 revolution will be televised Opera Devices SDK 2.8 is designed for television and other consumer electronics manufacturers. Support for HTML5 video Four times faster Integration with Opera’s new Content Development Kit Improved support for HbbTV Hardware-accelerated video codecs, offering
Slide 49: Launching Opera 11
Launching Opera 11 49 Finner ikke bildedelen med relasjons-ID rId17 i
Slide 50: A sneak peak …
A sneak peak … • Extensions • Speed • More to come in upcoming beta version … • Alpha version downloaded 370.000 times during the first two weeks • 73 3rd-party extensions reviewed and published during the first two weeks • Receiving 10-20 new ones for review every day 50 Finner ikke bildedelen med
Slide 51: Opera builds further momentum on desktop
Opera builds further momentum on desktop 70 Opera Desktop Revenue (MNOK) • Continued revenue 60 growth • 60 MNOK: increase of 50 42% compared to 3Q09 • Continued user growth 40 • 48 million Opera 30 Desktop users: increase of 15% compared to 3Q09 20 10 0 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08
Slide 52: Key strategic objectives
Opera’s road to growth Key strategic objectives 1. Build volume with existing tier-one operator customers. 2. Sign up additional operators and mobile manufacturers. 3. Monetize the 75 million+ mobile users. 4. Strengthen leadership position in the growing connected TV/devices market. 5. Continue to
Slide 53: Q&A
Q&A 53 Finner ikke bildedelen med relasjons-ID rId17 i