Slide 1: Opera Software Fourth quarter 2007
Opera Software Fourth quarter 2007
Slide 2: A note from our lawyers
A note from our lawyers 2 This presentation contains and is, i.a., based on forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results
Slide 3: Agenda
Agenda 1. Highlights Erik Harrell, CFO/COO 2. Financial review Erik Harrell, CFO/COO 3. Operational update Business, Consumer Jon S. von Tetzchner, CEO 4. Q&A
Slide 4: 4Q 2007 highlights
4 4Q 2007 highlights On track, focused and taking advantage of industry trends Business Shipments of Opera Mobile: 10.4 million in 4Q 8 new mobile phones include Opera Mobile pre-installed A record 122 mobile phones in 2007 include Opera Mini or Opera Mobile KDDI announced seven new handsets, three
Slide 5: Introduction: revenue highlights
Revenue 4Q 2007 vs 4Q 2006 Introduction 100 Millions 90 54% Revenue highlights 80 70 4Q revenue: MNOK 93.0, up 54% vs. 4Q06 60 50 Record quarter 40 30 Desktop revenue MNOK 19.3, up 50% 20 vs. 4Q06 10 0 Internet Devices revenue MNOK 73.7, 4Q 2006 4Q 2007 up 54% vs. 4Q06 Revenue 2007 vs 2006 350 EBITD
Slide 6: Financial Review
Financial Review PERA Q OPERA
Slide 7: Income statement
4Q07 financial review 7 Income statement NOK Million 4Q 2007 4Q 2006 Q on Q 2007 2006 Y on Y Desktop + 19.3 12.9 50% 67.1 33.0 103% Internet Devices + 73.7 47.7 54% 248.4 180.8 37% Total revenue = 93.0 60.6 54% 315.5 213.8 48% Payroll and related expenses - 58.5 48.1 22% 215.1 157.0 37% Stock option
Slide 8: Key financial figures
4Q07 financial review 8 Key financial figures Operating revenues (NOK Million) EBITDA* (Non-IFRS) (NOK Million) 100 15 90 93 10 12 12 80 82 10 70 75 7 5 65 5 60 61 3 -1 2 3 50 52 53 0 -2 -1 -2 -3 48 48 40 40 38 -5 -6 -5 30 30 28 20 22 23 25 -10 -12 10 0 -15 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q107 Q
Slide 9: Key revenue drivers in 4Q
4Q07 financial review 9 Key revenue drivers in 4Q Internet Devices revenue 4Q 2007 vs 4Q 2006 80 Millions 70 Business area 54% 60 Strong license and services revenue from 50 40 key OEM and operator customers 30 - Services revenue particularly strong 20 - Positive as indicates potential future licens
Slide 10: OPEX development
4Q07 financial update 10 OPEX development OPEX (NOK Million) Payroll Stock Options Depreciation Other OPEX Non recurring costs OPEX comments 4Q07 vs 4Q06 90 • Payroll cost up 22% • Headcount growth worldwide 80 • Stock option costs down 49% 70 •New option program in place (predominantly non-cash) 60
Slide 11: EBITDA development
4Q07 financial review 11 EBITDA development 4Q 2006 / 4Q 2007 (NOK Million) 20,0 Comments on EBITDA development YoY* 15,0 Revenues up MNOK 32.4 Desktop + MNOK 6.4 10,0 Internet Devices + MNOK 26.0 5,0 Payroll and related expenses up MNOK 10.4 Engineering 0,0 Sales and Marketing globally Payroll and
Slide 12: Strong capital structure
4Q07 financial review 12 Strong capital structure BALANCE SHEET Q4 2007 Q3 2007 Balance Sheet (MNOK) Deferred Taxes 10 420 11 200 700 Goodwill 3 143 3 143 600 Fixed Assets, Net 22 374 22 791 Cash and cash Accounts Receivable 65 249 29 267 500 equivalents Accrued, but Unbilled Revenue 40 700 40 049 4
Slide 13: Strong cash flow YTD
4Q07 financial review 13 Strong cash flow YTD CASH FLOW STATEMENT Q4 2007 Cash flow from operating activities Profit/loss before taxes 16 665 Taxes paid -1 444 Depreciation expense 1 735 Operating cash flow MNOK 38.9 in 2007 Changes in accounts receivable -36 633 Changes in accounts payable 1 842 Pr
Slide 14: Update on Opera's FY 2007 operational priorities
4Q07 financial review 14 Update on Opera’s FY 2007 operational priorities Priorities YTD status report Focus and invest in consumer area Desktop revenue up 50% YoY Number of desktop users increased approximately 55% in FY2007 4Q07 Opera Mini monthly page views up 35% vs. 3Q07 My Opera users up 102%
Slide 15: Opera's FY2008 & 2009 financial goals
4Q07 financial review 15 Opera’s FY2008 & 2009 financial goals Metric Goal 2008 Goal 2009 Revenue Growth comparable to 2007 Accelerated growth from 2007 EBITDA* 12%+ 20%+ margin Note: This does NOT constitute financial guidance *Non-IFRS EBITDA excludes stock option cost
Slide 16: Key strategies to achieve financial goals: revenue
4Q07 financial review 16 Key strategies to achieve financial goals Metric Strategies Revenue Continue to scale Consumer area aggressively Opportunity to grow Opera Desktop and Opera Mini revenue significantly More scaleable (standard products) Geographic focus critical to success Reap benefits of cr
Slide 17: Key strategies to achieve financial goals: profit
4Q07 financial review 17 Key strategies to achieve financial goals Metric Strategies Profit Continue to scale Consumer area aggressively High long-term margins Grow user base, reap higher ARPU on Opera Mini and Opera Desktop Continue to focus on top operators and OEMs Greater standardization of prod
Slide 18: Operations Update
Operations Update
Slide 19: Opera's vision
19 Opera’s vision Opera’s vision is to provide the best Internet experience on any device
Slide 20: Powered by the Opera rendering engine
20 Powered by the Opera rendering engine Full browser client on any device Widgets & Web Opera Mini – applications Client/server platform Community and B2B services
Slide 21: The unique differentiators
21 The unique differentiators PocketP Windows Motorola P2K C Smart ltron phone Windows CE/Mobile Superior user experience S60 Media Opera is the smallest full-featured Highway Symbian Platform browser OS Independent UIQ kernel Performs well on low-resource Mac devices QnX Java Opera is the fastest f
Slide 22: Opera's unique ability to deliver a world-class mobile browser
22 Opera’s unique ability to deliver a world- class mobile browser Technical Core – a single, powerful rendering engine designed to run on any platform Support quickly evolving standards, to enable a desktop experience on a mobile handset Multiple mobile platforms supported Advanced features such as
Slide 23: Leading, global customers...
23 Leading, global customers...
Slide 24: ... and leading, global partners
24 ... and leading, global partners
Slide 25: Delivering One Web
25 Delivering One Web The services that win on the ordinary Web also win on the mobile Web The cost of teaching people to do something new is too high – WAP was a mistake, let's not do it again Most mobile phones and other devices will ultimately have full web browsers; browsing drives higher ARPU a
Slide 26: Stand-alone vs. Web-based
26 Stand-alone vs. Web-based Question: How much of your time with a PC did you spend with stand-alone applications vs. Web-based apps in 1998? What about now?
Slide 27: Exercise: Find the Windows applications...
27 Excercise: Find the Windows applications...
Slide 28: The browser is the glue
The browser is the glue Ww Last. Gi | = ) ! ! , > | — °@ facebook faa Oo aig Myspace.com OQ OPERA
Slide 29: Three screens – boundaries blurring
29 Three screens – boundaries blurring making calls watching movies watching films browsing Web browsing web making calls 1998 2008
Slide 30: The Opera-powered day
30 The Opera-powered day Breakfast: Bus: Work: Boring Airport Recreation: Opera on Opera Opera on meeting: lounge: Opera on laptop Mobile laptop Opera Mini Opera on Wii Archos PMP
Slide 31: Opera Widgets – the basics
Opera Widgets – the basics A technology to enable Web applications to run locally on a phone or other device A Web services delivery mechanism based on open standards Time to market advantage with rapid application and content development Instant access to services such as social networking, weather
Slide 32: Opera Widgets are already in the market
32 Opera Widgets are already in the market Windows, Mac and Linux desktop Archos 605 WiFi portable media player Nintendo Wii KDDI au Gadgets
Slide 33: Operations Update Business area
Operations Update Business area
Slide 34: Introducing Opera Mobile 9.5
34 Introducing Opera Mobile 9.5 “[It] significantly pumps up the existing Opera Mobile 8.6 browser.” PC Magazine, USA
Slide 35: Opera Mobile 9.5
Opera Mobile 9.5
Slide 36: Industry traction for Opera Mobile 9.5
36 Industry traction for Opera Mobile 9.5 HTC ships Opera Mobile 9.5 UIQ selects Opera Mobile 9.5 for Sony Ericsson handsets One un-named OEM selects Opera Mobile 9.5 More to be announced...
Slide 37: Opera rocks Mobile World Congress
37 Opera rocks Mobile World Congress 200 meetings, including all leading OEMs and operators Opera Mobile 9.5 was the biggest hit of the show Opera demoed broad portfolio of products on multiple platforms Opera Widgets, Opera on Wii, Opera on HTC, Opera on UIQ, Opera on Archos Joint product demos wit
Slide 38: Why operators choose Opera
38 Why operators choose Opera Market-tested applications ensure high quality of service Standardize on one application platform, allowing for more efficient service management Operators create revenue-generating services accross all networks: GPRS, UMTS, EDGE, 3G and more Introduce new services with
Slide 39: Opera Mini delivers a customized user experience
39 Opera Mini delivers a customized user experience
Slide 40: Web'n'Walk marches through Europe
40 Web’n’Walk marches through Europe Web’n’Walk now available in nine countries More than one million subscribers use Opera Mini T-Mobile’s revenues from data usage across Europe surged 42% year on year in the first three quarters of 2007 to EUR 1.4 billion, T-Mobile UK continues to see significant
Slide 41: Operators and Opera Mini
41 Operators and Opera Mini Full-scale commercial partners: T-Mobile International Vodafone D2 Tata Teleservices (India) TMN (Portugal) Telefónica Móviles de España (Spain and CALA) PTC/era (Poland) Distribution deals: TIM Hellas (Greece) Pannon (Hungary) GrameenPhone (Bangladesh) mobilkom (Austria)
Slide 42: Opera Mobile: 4Q highlights
42 Opera Mobile: 4Q highlights Number of phone models with Opera pre-installed Shipments of phones with Opera pre-Installed Millions 70 12 63 60 10 50 8 40 37 6 30 24 4 20 13 10 2 6 0 0 2003 2004 2005 2006 2007 The number of mobile phones shipped with the Opera browser was 10.4 million in 4Q07. For
Slide 43: Opera Mobile: 63 new phones in 2007
43 Opera Mobile: 63 new phones in 2007 Accton Kyocera Samsung Toshiba VM3228T Kyocera W51K Samsung SPH-8100 Toshiba G500 Kyocera W44K II Samsung SCH-M620 Toshiba G900 Kyocera WX320R Samsung SPH-M6200 Toshiba W51T ASUS Kyocera W53K Samsung Blackjack Toshiba W52T ASUS V1210 Toshiba W53T Longcheer Sany
Slide 44: Opera Mini: 59 new phones in 2007
44 Opera Mini: 59 new phones in 2007 Nokia Samsung Sony Ericsson Nokia 6085 Samsung E900 SE K550 Nokia 5500 Samsung SGH-E250 SE W200i Samsung SGH-D900 SE K810i Nokia 3110 Samsung U700 SE K530 Nokia 7373 Samsung ZV60 SE K800i Nokia 6131 Samsung D900i SE W580i Nokia 5300 Samsung F330 SE Z310 Nokia 623
Slide 45: Continued growth in Opera for Devices
45 Continued growth in Opera for Devices Opera introduces Opera 9.5 SDK for Devices Faster, more interactive user experience Advanced navigation: zooming, panning, acceleration Opera Widgets™ Evaluation kit with Adobe® Flash Lite 3 bundled plug-in Opera signs new deal with a leading vendor in the gl
Slide 46: Operations Update Consumer area
46 Operations Update Consumer area
Slide 47: Going for Google
47 Going for Google Opera selects Google as default search provider for Opera Mini and Opera Mobile Enhanced user experience Improved commercial terms Two-year agreement Covers all countries except Russia and CIS Mobile search with access to any Web site on any handset is a mass market reality Googl
Slide 48: Opera Mini: 4Q highlights
48 Opera Mini: 4Q highlights Cumulative Opera Mini Users and Page Views Cumulative pages downloaded 45 18 000 Millions Millions since launch: 15.7 billion 40 16 000 Cumulative users Page views Cumulative number of users*: 39 35 14 000 million 30 12 000 25 10 000 Opera introduced the final version Op
Slide 49: Opera Mini monthly page views
49 Opera Mini monthly page views 2 000 000 000 1 800 000 000 1 600 000 000 1 400 000 000 1 200 000 000 1 000 000 000 800 000 000 600 000 000 400 000 000 200 000 000 0
Slide 50: Opera for Desktop: 20+ million users
50 Opera for Desktop: 20+ million users Global movement continues towards a better, alternative Web browsing experience, focusing on security, speed and flexibility 20+ million monthly users Strong growth continues in rapidly emerging markets
Slide 51: Opera for Desktop: Revenue growth
51 Opera for Desktop: Revenue growth Opera Desktop Revenue (MNOK) Sixth consecutive quarter of 20 growth 18 16 Revenue growth of 50% 14 compared to 4Q06 12 Reaping benefits of localization 10 strategy in terms of product 8 features, marketing materials and commercial agreements 6 4 Opera’s multi-pla
Slide 52: The power of My Opera
52 The power of My Opera Vision: A personal space on the Web, regardless of device Started as discussion forum and technical support. Today it is our industry’s most powerful online community My Opera is a differentiator: Increases the value of our software products Improves brand loyalty Acts as pl
Slide 53: My Opera – the facts
53 My Opera – the facts December 31: 1,218,637 members Growth since 3Q: 17% Growth since 4Q 2006: 102% (605,000 members per December 31, 2006) 2 000 sign-ups per day
Slide 54: My Opera statistics
54 My Opera statistics 1 400 000 1 300 000 1 200 000 1 100 000 1 000 000 900 000 800 000 700 000 600 000 500 000 400 000 300 000 200 000 100 000 0
Slide 55: Summary
G)\ BL: Summary
Slide 56: Update on Opera's FY2007 financial goals
56 Update on Opera’s FY2007 financial goals Metric Goal 2007 Baseline Actual 2007 performance Revenue Accelerated growth >39% 48% vs. 2006 vs. 2005 growth EBITDA* Single digit >1% 8% EBITDA* Note: This does NOT constitute financial guidance *Non-IFRS EBITDA excludes stock option cost
Slide 57: Update on Opera's FY2007 operational goals
57 Update on Opera’s FY2007 operational goals Metric Goal 2007 YTD performance Opera Desktop 50% increase in users ~55% increase Opera Devices 20 Devices announcements 7 announcements Opera Mini B2C 30 million cumulative users 35 million Opera Mini B2C 10 billion cumulative page views 13.8 billion O
Slide 58: Thank you for listening
58 Thank you for listening “Opera is better in just about every respect” Stephen Wildstrom, BusinessWeek