Slide 1: 2Q 2020 Otello Corporation ASA
2Q 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 2Q20 2Q19 million) Revenue 54.0 56.2 Adj. EBITDA* 3.5 3.9 Operating Cash Flow 3.0 (2.8) • AdColony slightly above and Bemobi slightly below guidance for the quarter • Adj. EBITDA improved and turned positive for AdColony while Bemobi faced more Covid -19 im
Slide 6: Operational Review
Operational Review 6
Slide 7: AdColony
AdColony • Revenue • Revenue growth YoY and QoQ, despite Covid 19 impact • Performance revenue stable last 3 quarters • Continued growth for our Brand business • Programmatic revenue growth of over 100% in 2Q20 vs 2Q19 • Now 40% of Brand revenue • Cost • Merging demand side of Brand and Performance
Slide 8: AdColony – 2020 & Covid-19 impact
AdColony – 2020 & Covid-19 impact • Expecting 10% revenue growth in 2020 vs 2019, some risk due to Covid-19, but positive trend from May • Stable Performance revenue and continued growth in our Brand business • Positive trend throughout 2Q20 and into 3Q20, but still significant pent-up demand due to
Slide 9: Supply/Publishing
Supply/Publishing
Slide 10: AdColony a leader for in-app ad inventory for mobile games
AdColony a leader for in-app ad inventory for mobile games say their mobile usage outside of work has gone up significantly More available inventory play mobile games multiple times per day for our Brand and are playing new Performance advertisers games on their smartphones Advertisers want a Fraud
Slide 11: Why gaming inventory works
Why gaming inventory works of marketers are actively taking action to protect their brands from unsuitable content – Gaming is always brand-safe of marketers say that the Coronavirus is changing the types of content they are comfortable advertising alongside of marketers would be concerned if their
Slide 12: Global Brand Business
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Slide 13: Business Diversity is AdColony’s strength
Business Diversity is AdColony’s strength • AdColony is one of the few in-app SDK companies to have a successful Brand sales team, as well as a Performance/Gaming app-install team • Direct IO business traditional orders, high-touch • Brand Performance app install for Fortune 500 brands and non-gamin
Slide 14: Results: Brand Advertising
Results: Brand Advertising Revenue 2Q 2020 YoY Growth Source • Third consecutive quarter of double- digit growth Programmatic $11.9MM Open + 133% Marketplace • Direct Brand deals (IO) were impacted most by industry-wide campaign freezes and cancellations due to Brand COVID-19 $13.4MM (incl. IO and -
Slide 15: North America Brand
North America Brand • North America Brand finished Revenue 2019 vs 2020 (Millions USD) 2Q20 up 24.5% vs last year $25,0 • AdColony’s position as one of the few ad inventory supply $20,0 $19,3 owners for mobile games & $15,5 apps helped Marketplace $15,0 dollars surge, even as brands $11,9 & agencies
Slide 16: EMEA & LATAM Brand, APAC Brand
EMEA & LATAM Brand APAC Brand Revenue 2019 vs 2020 (Millions USD) Revenue 2019 vs 2020 (Millions USD) $10,0 $3,0 $8,7 $2,7 $2,6 $9,0 $8,3 $8,1 $2,5 $8,0 $7,0 $2,0 $1,9 $1,9 $6,0 $5,7 $5,0 $1,5 $4,0 $1,0 $3,0 $2,0 $0,5 $1,0 $0,0 $0,0 Q1 Q2 Q1 Q2 2019 2020 2019 2020 • Though major EMEA & LATAM markets
Slide 17: Programmatic Results
(/ ADCOLONY Programmatic “ZZ
Slide 18: Why is AdColony Winning on Programmatic
Why is AdColony Winning on Programmatic • Constant focus on maintaining a Fraud Free, Brand Consumer Spend Trends 2Q20 Safe, Transparent marketplace • Ongoing optimizations and strategic technical integrations to increase Supply-Demand Alignment • Mobile Gaming increased in the absence of sports, or
Slide 19: Global Publishing & Performance Business
Global Publishing & Performance Business
Slide 20: Results: Performance Advertising
Results: Performance Advertising 3Q19 4Q19 1Q20 2Q20 Q2 Revenue Trend Performance Revenues $20,0 • Relatively flat revenue trend QoQ after several quarters of decrease • Growth in key categories $15,0 $15,9 • Reward / Scratcher $13,9 $13,7 $12,8 • Social Casino $10,0 • Hyper-casual • Enabling future
Slide 21: Performance business stabilizing
Performance business stabilizing 1. Data science team in Poland improving our core algorithms => Driving better decisions 2. Growth team established in Turkey => Building for long-term success with new publishers and advertisers 3. Campaign management centered in Turkey => Driving down cost 2
Slide 22: Bemobi
Bemobi 22
Slide 23: 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 24: 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 25: 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 26: Revenue & Adj. EBITDA
Revenue & Adj. EBITDA • Negative impact from FX and Covid-19 Revenue in BRL (rolling LTM) 60 000,00 • Outperformed our peers during Covid-19 50 000,00 ∆ (%) Bemobi 2Q20 2Q19 Y-o-Y 40 000,00 Revenue (USD M) 10,7 13,9 -23% EBITDA (USD M) 4,0 6,0 -34% 30 000,00 ∆ (%) 20 000,00 Bemobi - Ex-FX Rate 2Q20
Slide 27: Bemobi – Subscriber growth driving revenue and scale
Bemobi – Subscriber growth driving revenue and scale • Total # subscribers up 4.5 million vs 2Q19 40,0 4,0% • YoY LATAM up 2.4 million including Voice 35,0 (IVR) and financial services subscribers 3,6% 34,6 30,0 31,9 3,0% 3,2% • YoY International up 2.2 million due to 25,0 26,7 27,3 global rollout 2
Slide 28: Bemobi - Overal channel mix improving
Bemobi - Overal channel mix improving International markets continue subscriber growth Co-owned Channels 2Q19 vs. 2Q20 (from 8.2M to 10.4M) NDNC CHANNEL FROM TO Comments • 16 portals live in Bemobi outside of Latam: • Idea India Bemobi1 (co- 37% 35% Stable % contribution despite the • Banglalink Ban
Slide 29: Bemobi
Bemobi • New voice-based channels and omnichannel platform with good traction in Brazil and about to begin international rollout, however delayed by about two quarters • New voice and financial services offers growing in Brazil and show potential for a international rollout in the future. Two new co
Slide 30: Other topics: Bemobi IPO and COVID-19
Other topics: Bemobi IPO and COVID-19 • Otello and Bemobi are constantly assessing market conditions and are still aiming to carry out a separate listing of Bemobi as capital markets reopen • Brazil still positioned as the best potential listing venue for Bemobi • As indicated before, COVID 19 had a
Slide 31: 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 32: Financial Review
Financial Review 32
Slide 33: Otello Corporation 2Q20
Otello Corporation 2Q20 (USD million) 2Q 2020 2Q 2019 % Change Revenue growth in AdColony offset Revenue 54.0 56.2 -4% by revenue decline in Bemobi Publisher and revenue share cost (32.5) (31.9) 2% Payroll and related expenses (9.6) (12.1) -21% Total operating expenses down 4% Stock-based compensati
Slide 34: Otello Corporation 2Q20
Otello Corporation 2Q20 Revenue (USD million) OPEX (USD million) Revenue growth in AdColony 70,0 offset by revenue decline in 21,2 21,0 20,9 20,5 63,1 18,1 Bemobi 56,2 55,7 54,0 OPEX down 12% due to lower payroll expenses • Positive FX impact for 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 Bem
Slide 35: AdColony
AdColony • Revenue slightly above expectations in Revenue USD million) 2Q20, very strong Programmatic OPEX (USD million) 55 revenue 48 12 Brand - 42 43 43 8 Programmatic • Performance business stable last 3 5 9 15,9 15,8 15,8 15,7 6 7 10 12 Brand - quarters 13,7 5 5 Performance 15 17 22 Brand - Mana
Slide 36: Bemobi
Bemobi • Significant negative Covid-19 impact in the quarter Revenue (USD million) OPEX (USD million) 4,5 13,5 • Revenue would have been 14,9 14,8 down 3% YoY with neutral FX 13,9 4,1 4,1 3,8 13,0 3,6 rates. 3,3 10,7 • Gross margin fluctuates based on channel/product mix and % 2Q19 3Q19 4Q19 1Q20 1Q
Slide 37: Cash flow
Cash flow Cash flow (USD million) • Operating cash flow: USD 3.0 million • Positively impacted by positive Adj. EBITDA 3.0 (2.9) and good cash collection (1.3) (0.3) • Cash flow from Investment: USD (2.9) million • Capitalized R&D: USD (2.4) million • CAPEX: USD (0.4) million • Cash flow from Financ
Slide 38: Financial position
Financial position Financial Position (USD million) Balance sheet (USD million) 33,5 Other assets 80,3 33,5 Cash Accounts 62,8 303,8 3,5 receivables Equity Goodwill 218,1 -30 90,9 Liabilities Gross Cash Gross Debt Net Cash 38
Slide 39: Outlook AdColony
Outlook AdColony 3Q20* 2020** Revenue: Up 5-10% Revenue: Up ~10% Gross margin: Flat/down Gross margin: Flat/down OPEX: Down OPEX: Flat/down *Vs 3Q19 **Vs 2019 39
Slide 40: Outlook Bemobi
Outlook Bemobi 3Q20* 2020** Revenue: Flat Revenue: Flat/up (~0-5%) Adj. EBITDA: Flat Adj. EBITDA: Flat/up (~0-5%) *Vs 3Q19 (local currency) **Vs 2019 (local currency) 40
Slide 41: Q&A
Q&A 41