Slide 1: Opera Software: Third quarter 2009
Opera Software: Third quarter 2009
Slide 2: 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 3: Agenda
Agenda 1. Highlights Erik Harrell, CFO/COO 2. Financial review Erik Harrell, CFO/COO 3. Operational update Jon S. von Tetzchner, CEO 4. Q&A
Slide 4: Operational highlights: 3Q09 + 4QTD
Operational highlights: 3Q09 + 4QTD Priority Overview Areas Operators Continue to make good progress • AT&T launched Opera Mini on 6 phones in the USA • Vodafone has launched • Opera Mini in 7 countries • Opera Widgets (on Windows Mobile and Nokia Series 60) in 9 countries • Announced 30 phones with
Slide 5: Operational highlights: 3Q09 + 4QTD
Operational highlights: 3Q09 + 4QTD Priority Overview areas Desktop Successful launch of Opera 10 driving user growth • Record downloads • Innovative new features such as Opera Unite and Opera Turbo • Nearly 45 mm monthly users (up 45% YoY) Opera Mini Strong user growth continues • 35+ mm users in S
Slide 6: 2009 Financial highlights
2009 Financial highlights Priorities 3Q Status report 9M** Status report Revenue MNOK 134.8 (+8% vs 3Q08) MNOK 470.2 (+38% vs 9M08) EBITDA* MNOK 2.1 (MNOK 25.9 in 3Q08) MNOK 69.8 (MNOK 62.3 in 9M08) Operating cash MNOK 47.4 (MNOK 44.2 in MNOK 77.9 (MNOK 80.6 in 9M08) flow 3Q08) * Non-IFRS EBITDA exc
Slide 7: Financial review
Financial review
Slide 8: 3Q09 Financial review
3Q09 Financial review MNOK 3Q 2009 3Q 2008 Q on Q 9M* 2009 9M* 2008 9M* vs 9M* Desktop + 42.8 28.0 53% 134.5 74.4 81% Internet Devices + 92.0 96.7 -5% 335.7 265.8 26% Total revenue = 134.8 124.7 8% 470.2 340.2 38% Payroll and related expenses - 96.1 73.2 31% 297.0 208.5 42% Stock option costs - 2.7
Slide 9: Financial highlights: 1Q04-3Q09
Financial highlights: 1Q04-3Q09 Operating revenues (NOK Million) EBITDA* (Non-IFRS) (NOK Million) * Non-IFRS EBITDA excludes stock option costs
Slide 10: Revenues: 3Q09
Revenues: 3Q09 Area Comments: Revenues (vs. 3Q08) Operators Operators: Very solid growth in revenue, both from existing and new and OEMs agreements • Operator generated revenue now constitutes approximately 40% of Internet Device revenue, largest generator of revenue within Internet Devices Mobile O
Slide 11: Revenues: 3Q09
Revenues: 3Q09 Area Comments: Revenues (vs. 3Q08) Consumers Opera Desktop: Users up 45% since 3Q08 • Revenue up 53% • Successful launch of Opera 10 • Users up 130% since 3Q07 Opera Mini: Users up 150% since 3Q08 • Continued development of revenue models • Expect more meaningful revenue in 2010 • Suc
Slide 12: OPEX development
OPEX development OPEX comments 3Q09 vs. 3Q08 OPEX (NOK Million) •Total operating expenses up 37% • Payroll cost up 31% •Headcount growth worldwide of 31% since 3Q08 • Stock option costs up145% • 3Q08 was unusually low* • Depreciation cost up 95% •Is mainly a result of Opera Mini hosting infrastructu
Slide 13: EBITDA development
EBITDA development 3Q 2008 / 3Q 2009 (NOK Million) Comments on EBITDA development YoY* • Revenues up MNOK 10.0 • Desktop + MNOK 14.7 • Internet Devices - MNOK 4.7 •Payroll and related expenses up MNOK 22.9 • Engineering • Sales and Marketing globally • Overall headcount up 31% vs 3Q08 • Other expens
Slide 14: Strong capital structure
Strong capital structure Balance sheet (MNOK) Balance sheet highlights Metric 3Q09 3Q08 Cash MNOK 581 MNOK 509 NWC* MNOK -82 MNOK 37 Equity MNOK 601 MNOK 571 * NWC is defined as Total current assets excluding cash and cash equivalents minus Total current liabilities.
Slide 15: Cash flow
Cash flow 3Q09 3Q08 Operating MNOK47 MNOK 44 cash flow*** Investments MNOK -7 MNOK -4 Financing MNOK -47* MNOK -24** Cash balance MNOK 581 MNOK 509 Operating cash flow YTD09 vs. YTD08 *Dividend of 0.4NOK per share, 48 MNOK. **Buyback of shares, 25 MNOK *** 4Q09 cashflow will be impacted by a tax pay
Slide 16: Financial high-level summary: 3Q09
Financial high-level summary: 3Q09 • Revenues • Continue to make good progress with operators and desktop • Revenues from device OEMs important contributor • Revenues from mobile OEMs weak • FX headwinds having a pronounced negative effect on revenues • USD down 16% versus the NOK and EUR down 13% v
Slide 17: Financial high-level summary: 4Q09
Financial high-level summary: 4Q09* • Revenues: Expectations vs. 3Q09 (constant currency)* • Revenue to continue to grow with operators • Opera 10 to continue to drive desktop-user growth • Device OEM revenue to grow • Mobile OEM revenue to decline (due to lower NREs) • NRE revenues to remain relati
Slide 18: 4Q 2009 Guidance
4Q 2009 Guidance Metric 4Q 2009 Revenue* MNOK 140 - 145 Expenses** MNOK 145 - 150 *Assumes currency (NOK 5.6/USD, NOK 8.4/EUR). ** Includes payroll, other OPEX, stock option costs and depreciation
Slide 19: Outlook FY2010
Outlook FY2010 • Overall • Will provide a more specific outlook for 1Q 2010 and FY2010 by February 2010 • 1Q10 revenues expected to be comparable to slightly higher than 4Q09 revenue range* • 1Q10 expenses expected to be comparable to 4Q09 expense range** • Profits in FY2010 to be heavily 2H 2010 or
Slide 20: Operational focus FY2010
Operational focus FY2010 • Operators • Sign more agreements with top operators • Work closely with existing and prospective customers to ramp up active users of Opera Mini and Opera Widgets • Desktop • Continued high focus on top geographic markets , local marketing and product localization to drive
Slide 21: Summary
Summary • Overall, disappointed with the financial results in 3Q09 • Pleased with progress in the key areas driving revenue growth (operators and desktop) • Overall, our resources are more and more focused on operators and desktop • To make recurring and more predictable revenue streams a higher % o
Slide 22: Capital Markets Day 2010
Capital Markets Day 2010 suggestion Capital Markets Day 2010 • Opera will be hosting a Capital Markets Day • Timing: March, 2010 • Location and further details to be announced as soon as possible
Slide 23: Operations update
Operations update
Slide 24: 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 25: This is Opera Software
This is Opera Software The world’s leading Web browser End-user movement: development company 760 employees in more than ten countries 35+ million unique monthly users of Unmatched footprint across PCs, Opera Mini in September 2009 mobile phones and other connected devices Opera Mobile shipped on 13
Slide 26: Opera's unique ability to deliver a world-class, cross-platform browser
Opera’s unique ability to deliver a world-class, cross- platform browser Technical • One core – multiple platforms • Support of quickly evolving standards • Cutting edge innovation Organizational • Experienced, global organization • Management experience in handling highly complex, technical project
Slide 27: The unique differentiator: One browser core for any platform
The unique differentiator: One browser core - for any platform - powers One Web Motorola Pocket Windows P2K ltron PC Smartp Samsung hone Windows SHP CE/Mobile S60 Media Symbian Platform- Highway OS independent UIQ core Mac QnX Java Unix J2ME Qte Free (Mini) Qt Linux BSD Solaris BREW Nintendo Qtopia
Slide 28: Opera's global customers
Opera’s global customers Pera Verfone PHILIPS --F--Mobile- @ servercsson NOKIA THALES ~ ARCHOS O, $ tilgin SK telecom G Sagem Telecommunications pode ms) SoftBank DP ‘Mobile Meridian 28 WILLCOM HITACHI WESTELL ® MOTOROLA eS CASIO. S atat OR KYOCERA “YAHOO! SHARP. >| NVIDIA, SANYO IWATSL cisco. . Goo
Slide 29: There is only One Web…
There is only One Web… Devices, platforms and networks: They come in all shapes and sizes. Only one thing unifies them: The Web
Slide 30: Why only One Web will prevail
Why only One Web will prevail • People want to access the same services regardless of device • The cost of teaching people to do something new is too high • Most connected devices will have full Web browsers– good for users, operators and manufacturers • The browser is now a platform for Web 2.0 app
Slide 31: Operations update: Business area
Operations update: Business area
Slide 32: AT&T brings the mobile Web to the masses
AT&T brings the mobile Web to the masses • AT&T and Opera bring the full Web to feature phones • Currently, AT&T has introduced or previewed six handsets featuring the Opera Mini browser, branded att.net • att.net makes the mobile Internet browsing experience faster, more location-aware, and easier
Slide 33: AT&T brings the mobile Web to the masses with the att.net experience
AT&T brings the mobile Web to the masses with the att.net experience Pantech Reveal
Slide 34: Latin America: TIGO selects Opera
Latin America: TIGO selects Opera • TIGO, a leading telecom brand in Latin America, selects Opera for mobile Web push • TIGO Guatemala preinstalls Opera Mini and offers the browser as a download • The Opera Mini browser is customized with Spanish menus and customized bookmarks • The TIGO brand is ma
Slide 35: Opera and Smart Telecom bring Opera Mini to Indonesia
Opera and Smart Telecom bring Opera Mini to Indonesia • Smart Telecom has selected Opera Mini for two handsets, the Samsung Pinger and the Nexian C951 • The Nexian C951 features a pre-set ”hot key” with the Opera logo, for direct access to the Web • The new devices will be available in mid-November
Slide 36: "Honey, I shrunk the net!"
”Honey, I shrunk the net!” • Vodafone’s operating company in South Africa, Vodacom, introduces the true mobile Web to its customers • In its marketing, Vodacom focuses on how Opera’s technology ”shrinks” the Web to fit on any mobile screen • Opera Mini and Opera Mobile now available on multiple hand
Slide 37: Opera Mini goes mega in Moscow with MegaFon
Opera Mini goes mega in Moscow with MegaFon • MegaFon, a leading telecom operator in Russia, has selected Opera Mini • The agreement covers the city of Moscow • Subscribers can activate the ”Unlimited Internet with Opera Mini” service package • More than half of MegaFon’s customer base is already us
Slide 38: A worldwide operator footprint
A worldwide operator footprint Operator-branded (9): Opera-branded (20): AT&T (USA) (New) GrameenPhone (Bangladesh) Cell One (Namibia) HT Telecom (Europe) Debitel (Germany) MegaFon (Russia) (New) O2 (Slovakia & Germany) mobilkom (Austria) SK Telecom Mobitel (Sri Lanka) Swisscom (Switzerland) Movista
Slide 39: Creating standardized products
Creating standardized products • Opera is increasing its focus on creating standardized products, from the browser core to the user interface • Standardized products streamline the customer delivery process and reduce The all-new Opera Mini 5 burden on internal engineering resources • Product exampl
Slide 40: Partner success program
Partner success program Goal: • Increase the marketing of Opera products through our key customers, to increase the number of active users per account Activities: • Marketing campaign materials • Educational materials • Research and statistics • Provide relevant case studies • Dedicated marketing re
Slide 41: Opera Mobile: 36 new models to date in 2009
Opera Mobile: 36 new models to date 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) HTC HD2 Willcom HTC Imagio Panasonic Willcom Honey BEE 2 HTC Leo HTC Pure Panaso
Slide 42: Opera Mini: 102 new models to date in 2009
Opera Mini: 102 new models to date in 2009 Pantech Samsung Haier Micromax Pantech PA-711 Samsung 777 Haier CG100 Micromax GC700 Pantech PA-715S Samsung Mythic Micromax X555 Pantech CDM8074 Samsung Flight Huawei Micromax X511 Pantech Reveal Huawei 736 Pantech Impact Sony Ericsson Huawei 835 Motorola
Slide 43: Opera Devices: Pushing the boundaries of One Web
Opera Devices: Pushing the boundaries of One Web Two areas of use: 1. Full Internet browsing 2. Application environment Opera Devices SDK is Opera Devices SDK powers a used to develop a full- device with menu system, user fledged browser for surfing interface, widgets and applications
Slide 44: Opera brings widgets and Web browsing to Orange's new Tabbee
Opera brings widgets and Web browsing to Orange’s new Tabbee family organizer “On the Tabbee, the Web is a key component. Widgets are essential in making this device easy to use for the entire family. […] Opera Devices SDK was the best choice to put the entire Web at their fingertips” Jean-Louis Con
Slide 45: New Toshiba TV ships with Opera
New Toshiba TV ships with Opera • Toshiba has unveiled the 55- inch Cell Regza 55X1 in Japan as its new flagship LCD television set • The TV's Opera- powered browser also supports Full HD and can display HD YouTube videos • The Cell Regza system is made up of a TV and a separate matching box that ho
Slide 46: Nintendo sets Opera free on the Wii
Nintendo sets Opera free on the Wii • The Opera browser (The Internet Channel) on the Nintendo Wii is now a free download to all owners • The Internet Channel has been updated to support upgraded features of Adobe Flash • The Internet Channel makes it possible for Wii users to surf the web easily us
Slide 47: The Web goes prime time on TV sets
The Web goes prime time on TV sets • Opera Devices SDK 10: A complete Web technology-based toolkit for bringing the Web and widgets to TVs and other connected devices Key features: • Hardware acceleration • Extended support for silicon platforms • Improved UI transitions and animations • Easier on-s
Slide 48: Devices shipping with Opera
KDDI au BOX Sony VGF-CP1 Sony Bravia Video Internet link Pirelli Discus Nintendo DSi ASUS Eee Top PC Nintendo Wii Phillips Net TV Leadtek XTP8886 VeriFone payment system Amino set-top box Ford trucks and vans Orange Tabbee VCom NDVB-9000 Tilgin Mood 300 & 400 Posbro G100 Telsey Waves Toshiba TV
Slide 49: Operations update: Consumer area
Operations update: Consumer area
Slide 50: The Web is big, but everyone is not online
The Web is big, but everyone is not online • In June 2009, almost 1.7 billion people had access to the Internet. • This is 24.7 % of the world’s current population.
Slide 51: The Internet population breakdown
The Internet population breakdown 41 % 25 % 16 % 11 % 3% 3% 1%
Slide 52: Internet penetration per market
Internet penetration per market 74 % 60 % 49 % 30 % 23 % 17 % 6%
Slide 53: Remaining growth potential per market
Remaining growth potential per market* 1 567 % 488 % 335 % 233 % 104 % 67 % 35 % * Potential growth until 100% internet penetration reached
Slide 54: Opera 10: Fast, powerful and innovative
Opera 10: Fast, powerful and innovative
Slide 55: Feature map
Feature map File Edit View Bookmarks Widgets Tools Help Visual tab bar PS Speed Dial 4 Enter Web address here 5 A (6) Password Manager Closed Tabs ‘The top news headlines on Opera Software (opera) on 2 6 Customizable Speed Dial O x l Opera Web Browser | Faceb... | , Opera Turbo
Slide 56: Praise for Opera 10
Praise for Opera 10 “Opera 10 is just too good to ignore: You won't miss IE, Firefox or Chrome” “Opera 10 Beta Continues Browser's Innovation Trend” “Between the new features and the UI redesign, Opera 10 for the Mac looks to be yet another strong contender”
Slide 57: Opera Turbo: 3 million users in the first month
Opera Turbo: 3 million users in the first month • In September, 3 million people used Opera Turbo to escalate their surfing speeds • They viewed 668 million pages • The numbers indicate that Opera Turbo solves critical bandwidth issues
Slide 58: Opera Unite
Opera Unite • Opera Unite is a powerful platform that turns your Web browser into a Web Server. • You can share content directly with friends without having to upload anything to a Web site. • You can stream music, show photo galleries, share files and folders or even host your Web pages.
Slide 59: Opera Unite Applications
Opera Unite Applications Media Player Messenger File Sharing The Lounge File Inbox Web Server Fridge Photo Sharing
Slide 60: Opera for Desktop: Revenue growth
Opera for Desktop: Revenue growth Opera Desktop Revenue (MNOK) • Revenue growth of 53% compared to 3Q08 • User growth 45% compared to 3Q08 and 6% vs 2Q09 • Reaping benefits of localization strategy in terms of product features, marketing materials and commercial agreements • Higher user growth than
Slide 61: Opera Mobile 10 hits the streets
Opera Mobile 10 hits the streets • Opera Mobile 10 in beta for the S60 smartphone platform • Completely redesigned UI and greatly improved browsing experience • More customizable, easier for partners to skin/customize • Faster • Supports touch phones and keypad phones • Future versions of Opera Mobi
Slide 62: Opera Mini 5: The world's most popular mobile Web browser
Opera Mini 5: The world’s most popular mobile Web browser gets an inside-out makeover • New, sleek design • Tabbed browsing • Touchscreen or keypad browsing • Password manager • Speed Dial • Faster browsing
Slide 63: Users embrace the mobile Web
Users embrace the mobile Web More users • Number of Opera Mini users in September 2008: 14.2 million • Number of Opera Mini users in September 2009: 35.6 million Data traffic growth (September 2008 – September 2009) • + 230% (to 227 million MB)
Slide 64: Opera Mini – page view bonanza
64 Opera Mini – page view bonanza Opera Mini monthly page views Opera Mini users viewed nearly 15 billion pages in September 2009. Since September 2008, page views have gone up 230% In September 2009, Opera Mini had over 35 million users, up 150% compared to September 2008. Opera Mini generates data
Slide 65: 2.6 billion Java devices roam worldwide
Total addressable market for Opera Mini 2.6 billion Java devices roam worldwide (Comments by Sun CEO Jonathan Schwartz at the JavaOne conference, July 2009)
Slide 66: The My Opera Community – at the heart of Opera's universe
The My Opera Community – at the heart of Opera’s universe Strong growth in users and traffic Total members: 3,136,216 Average daily signups: 5,433 (Oct 09) Average daily page views: 1,929,568 (Oct 09)
Slide 67: Thank you for listening
Thank you for listening