Slide 1: Opera Software: Fourth quarter 2010
Opera Software: Fourth quarter 2010
Slide 2: One year ago, we asked how to deliver revenue on mobile users
One year ago, we asked “How to deliver revenue on 46.3 million mobile users” (4Q09 presentation) Today, we give you the answer.
Slide 3: The answer is million operator Opera Mini users
The answer is million operator Opera Mini users in January 2011. Up from 1.7 million twelve months earlier
Slide 4: 4Q 2010 Financial highlights
4Q 2010 Financial highlights Financial metric 4Q10 4Q09 Status report (MNOK) (MNOK) Revenue Total revenue 193.6 142.6 Profitability Adj. EBITDA* 45.4 11.6 EBIT** 34.6 4.7 • Strong revenue growth from operators, device OEMs and desktop • Continuing to see a shift in revenue mix towards license revenu
Slide 5: Highlights (1Q10 – 1Q11TD)
Highlights (1Q10 – 1Q11TD) Operators • Very strong growth in volume of active, monthly users consuming petabytes of data - creating significant business value for leading operators worldwide • Key growth customers: Vodafone, AT&T, Telkomsel, TIM Brazil, MTN South Africa, MTS Russia and Telenor Mobil
Slide 6: Financial review
Financial review
Slide 7: 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 8: 4Q 2010 Financial highlights
4Q 2010 Financial highlights Financial metric 4Q10 4Q09 (MNOK) (MNOK) Revenue Total revenue 193.6 142.6 Profitability Adj. EBITDA* 45.4 11.9 EBIT** 34.6 4.7 Cash generation Operating Cash 25.5 -14.3 Flow Free Cash Flow*** 11.6 -24.6 * Non-IFRS EBITDA excludes stock option costs and one-time costs **
Slide 9: Currency impact 4Q10
Currency impact 4Q10 4Q 2010 Mid-Point 4Q 2010 Actuals 4Q 2010 at Guidance* Guidance FX (Nov 18) Rates* Revenue MNOK 189 MNOK 194 MNOK 198 EBIT MNOK 34 NOK 35 MNOK 39 *Provided at 3Q10 Presentation
Slide 10: 4Q10 Financial review
4Q10 Financial review MNOK 4Q2010* 4Q2009 Q on Q 2010** 2009 Y on Y Desktop + 70.9 50.4 41% 242.3 184.9 31% Internet Devices + 122.7 92.2 33% 450.0 427.8 5% Total revenue = 193.6 142.6 36% 692.2 612.7 13% Payroll and related 104.9 92.6 13% 394.9 389.6 1% expenses - Stock option costs - 4.3 3.9 11% 1
Slide 11: Revenue growth drivers
Revenue growth drivers Active users with operators Desktop users Opera Mini user base and ARPU Agreements with Connected TV vendors
Slide 12: Revenue: Customer Type (4Q10)
Revenue: Customer Type (4Q10) • Overall revenue higher than expected • Operator revenue as expected • Desktop revenue stronger than expected • Device revenue stronger than expected • Mobile OEM down as expected • Other Revenue better than expected, with good contribution from AdMarvel 100 % 200 90 %
Slide 13: Revenue: Operators (4Q10)
Revenue: Operators (4Q10) • Operator revenue up as expected, with solid license revenue growth • 523% Operator Opera Mini user growth December 2010 vs. December 2009 • User growth driven by Motricity (AT&T), Telkomsel, Vodafone and MTS in particular • ARPU as expected • Overall revenue growth: 47% v
Slide 14: Revenue: Device OEMs (4Q10)
Revenue: Device OEMs (4Q10) • Device OEM revenue stronger than expected due to solid shipments • Revenue driven primarily from the gaming console and ConnectedTV segments • License revenue: 75%+ of revenue • Overall revenue growth: 37% versus 4Q 09 MNOK Device OEM Revenue* 40 35 30 25 20 15 10 5 0 4
Slide 15: Revenue: Mobile OEMs (4Q10)
Revenue: Mobile OEMs (4Q10) • Mobile OEM revenue down as expected, due to low shipments and low NRE • License revenue: 55%+ of revenue • Overall revenue growth: - 40% versus 4Q 09 MNOK Mobile OEM revenue* 30 25 20 15 10 5 0 4Q09 1Q10 2Q10 3Q10 4Q10 Opera Mobile shipments were 0.4 mm in 4Q10 from Mob
Slide 16: Revenue Type: Internet Devices (4Q10)
Revenue Type: Internet Devices (4Q10) • NRE revenue relatively flat as expected • M&S revenue slightly higher than expected • Opera Mini revenue generally as expected, with strong growth in license revenue Revenue 4Q09 1Q10 2Q10 3Q10 4Q10 4Q10 vs. type* (MNOK) (MNOK) (MNOK) (MNOK) (MNOK) 4Q09 NRE 28
Slide 17: Revenue: Desktop (4Q10)
Revenue: Desktop (4Q10) • Desktop revenue higher than expected • Desktop user growth as expected • Higher ARPU than expected due to higher search and content partnership revenue • Overall revenue growth: 41% versus 4Q09 Monthly Desktop users* Desktop Revenue* (last month of quarter) (MNOK) 80 80 70
Slide 18: Revenue: Opera-branded Opera Mini (4Q10)
Revenue: Opera-branded Opera Mini (4Q10) 90 000 000 Monthly users 80 000 000 • Growth continues 70 000 000 • High focus on 60 000 000 converting users 50 000 000 to Operator branded or Co- 40 000 000 branded revenue 30 000 000 generating users • Increasing ARPU 20 000 000 on 100% Opera- 10 000 000 b
Slide 19: Key user metrics FY2010 - YTD
Key user metrics FY2010 - YTD January April October January Metric 2010 2010 July 2010 2010 2011 Operator 7.5* Opera 2.1* 3.5* 5.2* 11.5* Mini users Million Million Million Million Million Opera- branded 50** 59** 62** 75** 90** Opera Million Million Million Million Million Mini users Desktop 48 Mil
Slide 20: OPEX development
OPEX development OPEX (NOK Million) One time extraordinary cost Cost line 4Q10 vs. Comments Other OPEX 4Q09 Depreciation Payroll 13% • Higher compensation Stock Options expense/employee compared to 4Q09 Payroll (including result of stronger FY2010 180 performance vs. FY2009) 160 Stock 11% •New emplo
Slide 21: EBITDA development
EBITDA* development 4Q 2009 / 4Q 2010 (NOK Million) 70 60 50 40 30 20 10 0 EBITDA Internet Desktop Currency Total costs Currency EBITDA Q4 2009 Devices Revenue impact impact Q4 2010 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 4Q10 (MNOK 4Q09 (MNOK) Cash 507 546 Interest bearing debt 0 0 NWC* -48 -58 Equity 623 587 * NWC is defined as Total current assets excluding cash and cash equivalents and minus Total current liabilities excluding provisions.
Slide 23: Cash flow 4Q10 (MNOK)
Cash flow 4Q10 (MNOK) 40 35 30 25 20 15 10 5 0 -5
Slide 24: Comments about extraordinary cost items
Comments about extraordinary cost items Element Comments Revaluation of • AdMarvel over performance in FY2010 contingent • Mahi de Silva (CEO of AdMarvel) to become EVP of Consumer consideration Mobile, effective March 1, 2011, reporting to Lars Boilesen, CEO • Restructuring of FY2011 earn-out, givi
Slide 25: 2010 Key KPIs
2010 Key KPIs Metric 2009 2010 Change % Revenue (MNOK) 613 692 13% EBIT** (MNOK) 54 104 93% Adjusted EBITDA *** (MNOK) 82 144 76% Adjusted EBITDA Margin*** 13.4% 20.8% 55% Operating Cash Flow (MNOK) 64 76 19% Free Cash Flow (MNOK) 33 44 33% Opera Mini Operator users* 1.7 10.6 523% Desktop users* 46
Slide 26: 1Q11 Guidance
1Q11 Guidance Metric 1Q 2011 Revenue* MNOK 203-213 EBIT** MNOK 35-40 *Assumes currency remainder of 2011 (NOK 5.8 /USD, NOK 7.9/EUR). **Earnings before interest and taxes, exclude extraordinary/one-time charges and acquisition costs
Slide 27: 1Q11 Guidance
1Q11 Guidance Vs. Comments 4Q10 Revenue* Operators Up Strong due to Operator Opera Mini active user growth Desktop Flat-Up Seasonally weaker 1Q Device OEM Down Seasonally weaker 1Q, coming off very strong 4Q 10 Mobile OEM Up Due to guaranteed minimum license payments Expenses Payroll Up Primarily du
Slide 28: 2011 Guidance
2011 Guidance Metric 2011 Revenue* MNOK 850-900 EBIT** MNOK 170-200 *Assumes currency remainder of 2011 (NOK 5.8 /USD, NOK 7.9/EUR). **Earnings before interest and taxes, exclude extraordinary/one-time charges and acquisition costs
Slide 29: 2011 Revenue guidance: comments
2011 Revenue guidance: comments Customer Area* 2010 2011 (e)** Comments MNOK Operators 203 Up Primarily due to Opera Mini Opco user growth Desktop 242 Up Primarily due to user growth Device OEM 129 Up Strong FY2010, ConnectedTV key market driver Mobile OEM 82 Down Limited license revenue and low NRE
Slide 30: 2011 Guidance
2011 Guidance Comments Expenses Payroll Up, primarily due to new hires in Opera Mini / Mobile consumer monetization and pay increase (effective beginning of 2Q11) Stock option Up, due to issuance of new options costs Depreciation Up, due to continued investments in Opera Mini server hosting infrastr
Slide 31: Capital Markets Day 2011
Heads up: Capital Markets Day 2011 • Opera will hold a Capital Markets Day in late May or early June. Exact date to be announced • The CMD will, among other items, include a broad presentation of Opera’s consumer growth and monetization strategy
Slide 32: Operations update
Operations update
Slide 33: 11.5 million operator Opera Mini users
11.5 million operator Opera Mini users 12 000 000 Monthly Subscribers* 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 very quickly
Slide 34: Lift-off for TIM Brazil
Lift-off for TIM Brazil Unique monthly users of Opera Mini in Brazil 1 800 000 1 600 000 1 400 000 1 200 000 1 000 000 TIM Brazil TIM launches Opera 800 000 600 000 400 000 All other operators in Brazil 200 000 0 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11
Slide 35: Telkomsel turns on the user base
6.24.10 7.1.10 7.8.10 7.15.10 All others 7.22.10 7.29.10 8.5.10 Telkomsel launches Opera 8.12.10 8.19.10 8.26.10 9.2.10 9.9.10 9.16.10 9.23.10 Pratama 9.30.10 10.7.10 Excelcomindo 10.14.10 10.21.10 10.28.10 11.4.10 11.11.10 11.18.10 Indosat 11.25.10 12.2.10 Telkomsel turns on the user base 12.9.10 1
Slide 36: Video: Telenor and Opera bring mobile web to Serbia and Montenegro
Video: Telenor and Opera bring mobile web to Serbia and Montenegro
Slide 37: Why operators choose Opera
Why operators choose Opera • Opera Mini users generate higher ARPU through an increase in data usage. • Opera Mini features create a better user experience, which drives use and adoption. • Opera Mini home-page placement of operator portals drives more traffic to operator content and services. • Ope
Slide 38: How to monetize beyond operators in 2011-2013
How to monetize beyond operators in 2011-2013: Ad Exchange Opera Mobile Store Payment integration Home page / portal / other properties
Slide 39: Open Mobile Ad Exchange
Open Mobile Ad Exchange • Strong 2010 progress for Opera/AdMarvel’s Open Mobile Ad Exchange • In 2011, the goal is to further build out the synergy between the large user base and the technology platform • Key strategic deliverable: Payment integration
Slide 40: Opera Mobile Store
• 700,000 downloads/day • 16 million unique users/month • Unique differentiator: delivers apps to any platform/device
Slide 41: The value of Opera's prime real estate
The value of Opera’s prime real estate Real estate: Opera Portal Opera Speed Dial Opera bookmarks Search fields Extensions Widgets
Slide 42: Opera on your TV
Opera on your TV • Opera delivered a very strong year for Connected TVs in 2010: Major new customers signed up and products started shipping • In 2011, Opera will continue to strengthen its market-leading position: • Sign new, major customers • Further innovate on open platform approach and apps env
Slide 43: Case: Sony selects Opera
Case: Sony selects Opera • Sony is one of the world’s largest manufacturers of televisions • Sony will integrate Opera in global shipments of Sony “BRAVIA” televisions and Blu-ray Disc players • Based on Opera Devices SDK
Slide 44: Case: Vodafone targets emerging markets
Case: Vodafone targets emerging markets Opera Mini for your TV
Slide 45: 170+ million people use Opera
170+ million people use Opera Opera Mini Opera for Desktop Opera Mobile & Devices
Slide 46: Qualcomm selects Opera Mini
Qualcomm selects Opera Mini “Opera Mini allows us to provide a best- in-class mobile browsing experience across a range of mass-market devices.” Rob Chandhok, president of Qualcomm Internet Services
Slide 47: Users embrace Opera 11
Users embrace Opera 11 • Currently at 53 million users • 21 million downloads since launch • 500,000 weekly extension installations • During the revolution in Egypt, Opera attracted one million new users (who were eager to bypass Internet restrictions with Opera Turbo) • Currently, Opera is observin
Slide 48: Opera desktop: Continued revenue and user growth
Opera desktop: Continued revenue and user growth Desktop Revenue* • Continued revenue growth (MNOK) • 70.9 MNOK: increase of 80 41% compared to 4Q09 70 • Continued user growth 60 50 • 53 million Opera desktop users in 40 January 2011 30 20 10 0 4Q09 1Q10 2Q10 3Q10 4Q10
Slide 49: In summary
In summary 2010: Opera proved its ability to deliver revenue on its fast-growing mobile user base, with strong development on : Opera Mini & Mobile / Operators / Asian manufacturers Desktop Connected TV 2011-13: Opera aims to accelerate further growth via above business areas. In addition, we will i
Slide 50: Q&A
Q&A