Slide 1: 3Q 2019 Otello Corporation ASA
3Q 2019 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 3Q19 2Q19 3Q18 (USD million) Revenue 63.1 56.2 64.9 Adj. EBITDA* 6.0 3.9 1.4 • Revenue in AdColony and Bemobi both up ~ 10% vs 2Q19 • All time high Adj. EBITDA for Bemobi and AdColony turned positive in the quarter • On track to deliver on our FY 2019 targets *F
Slide 6: Operational Review
Operational Review 6
Slide 7: AdColony – Turnaround starting to show results
AdColony – Turnaround starting to show results • Revenue • Brand (2/3rd of revenue) had very strong 3Q19, up over 20% vs 2Q19 • Performance is still volatile (1/3rd of revenue), down 2% in 3Q19 vs 2Q19 • Cost • OPEX reduced by over 50% last 2 years, now @ $60m annual run-rate • Cost savings on ad de
Slide 8: AdColony – Status
AdColony – Status • Expecting ~10% revenue growth in 4Q19 vs 3Q19 • Programmatic revenue with strong start to 4Q19 • Expecting Adj. EBITDA growth in 4Q19 and positive Adj. EBITDA for FY2019 • Brand is where we invest and the strong Brand demand is canibalizing some Performance revenue as they pay mo
Slide 9: AdColony Global Brand Business
AdColony Global Brand Business 9
Slide 10: Results: Brand Advertising
Results: Brand Advertising Revenue Source Q3 2019 Q2 to Q3 growth Brand (incl. IO and PMP) $16.8M + 8% + 30% Brand Performance $7.4M Programmatic $7.9M + 55% Open Marketplace TOTAL $32.2M + 22% • 22% revenue growth from 2Q19 to 3Q19 • Programmatic open marketplace revenue with accelerated and very s
Slide 11: Successful Shift to Programmatic Continues
Successful Shift to Programmatic Continues • Programmatic open marketplace now scaling, strong start to 4Q19 • Focus on fewer and bigger partners, with revenue per customer up over 2x in 3Q19 vs 2Q19 • Deeper partnerships • Lower cost of serving • Infrastructure, product and tech ready to support si
Slide 12: Key reasons for growth and marketshare gain in 3Q19
Key reasons for growth and marketshare gain in 3Q19 Supply / Demand Alignment • Better optimization of both supply and demand =>Right ad at right place • More ad formats (Interstitial Display) => More products to sell Transparency & Measurability • sellers.json and SupplyChain enabling indentificati
Slide 13: EMEA & LATAM
EMEA & LATAM Overview Revenue 2018 vs 2019 Q3 2019 Sales Product Breakdown $9,0 5,9% $8,1 $8,0 $7,6 $7,0 $6,0 $5,7 $5,4 $5,1 $5,0 $4,5 48,3% $4,0 2018 45,6% $3,0 2019 $2,0 $1,0 $,0 Instant Play LinkedIn Spotify Q1 Q2 Q3 • 49% revenue growth from Q3 2018 • Instant Play Programmatic Revenue increased
Slide 14: APAC
APAC • 12% YOY growth in revenue Q3 2018 to Q3 2019 • Gross margins above 50% • Automated programmatic delivery already over 50% of revenue • Regional expansion of the brand business a priority for 2019 through 2020 • Launched brand business in Japan, New Zealand and Myanmar • New business momentum
Slide 15: AdColony Wins “Best Ad Network - Mobile” from Adweek
AdColony Wins “Best Ad Network - Mobile” from Adweek • AdColony voted Mobile Ad Network of the year • Won ahead of Google and Unity • 15,000+ votes by industry peers • Boost for our employees and should help boost sales in 4Q19
Slide 16: AdColony Global Performance Business
AdColony Global Performance Business 16
Slide 17: Results: Performance Advertising
Results: Performance Advertising Summary: Q3 2019 Performance Revenues = US$15.9 million Revenues Gross Margin (%) $18,0 26,8% 26,2% $16,0 23,3% 23,9% $14,0 2% 20,8% $12,0 $10,0 1Q19 $8,0 2Q19 $6,0 3Q19 $4,0 $2,0 $,0 Revenue ($m) 3Q18 4Q18 1Q19 2Q19 3Q19 • Competitive market, revenue stabilizing • G
Slide 18: New Business Publishing – Big wins with AdColony SDK
New Business Publishing – Big wins with AdColony SDK Chartbusters - 42 apps in Top 100 New Business publishing now contributing over 10% to Performance business (was <5% in 1Q19) => Important long term revenue driver 18
Slide 19: Priorities and Action Plan
Priorities and Action Plan • Drive adoption of SDK4.0 with all publishers to open up ‘Display’ as new revenue source in 2020 => Incremental revenue • Advanced bidding => Incremental revenue • Continued push on new business to drive continuous growth in publisher base and top apps – build on success
Slide 20: 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 21: Bemobi
Bemobi 21
Slide 22: 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 ADDRESSABLE USERS OF SERVICE breed apps & games priced for e
Slide 23: Bemobi’s key subscription service offerings
Bemobi’s key subscription service offerings APPS & GAMES SUBSCRIPTION SERVICES 1 APPSCLUB SERVICES 2 STANDALONE 3 MOBILE COUPONING SUBSCRIPTION APPS Bundles of top apps & games in a low Distribution of standalone subscription Market-leading mobile couponing price point subscription model apps subscr
Slide 24: 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 25: Record Revenue & Adj. EBITDA
Record Revenue & Adj. EBITDA D (%) Bemobi 3Q19 3Q18 Y-o-Y Revenue (USD M) 14,8 12,4 19% EBITDA (USD M) 6,2 5,2 19% D (%) Bemobi - Ex-FX Rate 3Q19 3Q18 Y-o-Y Revenue (USD M) 14,9 12,4 21% EBITDA (USD M) 6,2 5,2 20% FX Rate impact YoY (3Q19 vs. 3Q18) • INTL basket: - 2.6% • LATAM BRL: - 0.6% 25
Slide 26: Bemobi – Subscriber growth driving revenue and scale
Bemobi – Subscriber growth driving revenue and scale 30,0 4,0% • 17% YoY subscriber growth 25,0 27,9 3,6% 26,7 3,0% • Overall service penetration on served 23,9 Bemobi Subscribers (M) 3,2% 20,0 20,3 addressable market grew to 1.2% 15,0 17,0 2,0% • 67 operators live 13,1 • 21 operators in Latam 10,0
Slide 27: Bemobi - Overall channel mix improving
Bemobi - Overal channel mix improving Co-owned Channels International markets continue subscriber growth 3Q18 vs. 3Q19 NDNC CHANNEL FROM TO Comments • 13 portals live in Bemobi outside of Latam: Bemobi1 (co- 27% 34% Growth due to launch of new portals • Idea India • Grameenphone Bangladesh owned) in
Slide 28: Bemobi
Bemobi • New voice based channels and omnichannel platform getting traction in Brazil and about to begin international rollout • Bemobi co-owned channel growth in international markets consistent with strategy (i.e. 34% of total new users) • Service diversification into new verticals beyond the Apps
Slide 29: Bemobi IPO
Bemobi IPO • We are still aiming to list or spin out Bemobi. • Brexit made 2H19 listing impossible in UK • Considering other exchanges • Additional investor meetings have been conducted in 2H19 and more are planned towards the end of the year 29
Slide 30: Financial Review
Financial Review 30
Slide 31: Otello Corporation 3Q19
Otello Corporation 3Q19 (USD million) 3Q 2019 2Q 2019 3Q 2018 Revenue 63.1 56.2 64.9 Revenue down 3% vs 3Q18 Publisher and revenue share cost (35.9) (31.9) (38.4) and up 12% vs 2Q19 Payroll and related expenses (12.8) (12.1) (14.0) Stock-based compensation expenses (1.0) (1.0) (0.2) Overall OPEX dow
Slide 32: Otello Corporation 3Q19
Otello Corporation 3Q19 Revenue (USD million) OPEX (USD million) 25,1 66,9 64,9 63,1 22,3 21,2 56,2 20,5 20,5 51,5 • Solid revenue growth vs 2Q19 for both AdColony and Bemobi 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 • OPEX significantly down vs Adj. EBITDA (USD million) 3Q18 and slightly up
Slide 33: AdColony
AdColony Revenue USD million) OPEX (USD million) 53 52 48 Brand - 8 8 42 Programmatic • Performance revenue levelling 7 38 8 8 5 out 19,3 4 7 Brand - 17,3 6 15,8 5 Performance 15,7 15,6 16 20 12 15 17 Brand - Managed • Brand revenue up YoY and all 3 IO brand segments up from 2Q19 21 18 17 16 16 Perf
Slide 34: Bemobi
Bemobi Revenue (USD million) OPEX (USD million) 14,9 4,2 • Both Revenues and Adj. 14,8 13,9 4,1 13,6 EBITDA growing close to 12,8 3,6 12,4 3,4 3,3 2,9 20% YoY • Very strong gross margins at 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 70% Adj. EBITDA (USD million) Gross Margin % 6,2 72,5 • 3Q19
Slide 35: Cash flow
Cash flow • Operating CF: USD (0.9) million, negatively impacted by building of working capital due to revenue growth in AdColony and Bemobi Cash flow (USD million) • Accounts receivables in AdColony US up USD 4 million • Accounts receivables in Bemobi (0.6) International up USD 1.5 million • Net ca
Slide 36: Financial position
Financial position Financial Position (USD million) Balance sheet (USD million) 31,5 Other assets 122,7 Cash 31,5 11,5 Accounts 344,1 71,5 Equity receivables Goodwill 229,1 -20 110,7 Liabilities Gross Cash Gross Debt Net Cash 36
Slide 37: Outlook AdColony
Outlook AdColony 4Q19* 2019 (unchanged) Revenue: Up ~10% Adj. EBITDA: Positive Gross Margins: Flat Opex: Flat, continued cost focus Adj. EBITDA: Up * Vs 3Q19 37
Slide 38: Outlook Bemobi
Outlook Bemobi 4Q19* 2019 (unchanged) Revenue: Up Revenue: Growth vs. 2018 Adj. EBITDA: Up Adj. EBITDA: Growth vs. 2018 * Vs 3Q19 38
Slide 39: Q&A
Q&A 39