Slide 1: Opera Software Second quarter 2007
Opera Software Second 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: 2Q 2007 highlights
4 2Q 2007 highlights Business Shipments of Opera Mobile: 8.8 million in 2Q 23 new mobile phones include the Opera Mobile browser pre-installed 52 new mobile phones announced YTD 27 new mobile phones, including Opera Mini announced YTD Notable contract signatures TMN, Vodafone D2, Westell, Palm, Will
Slide 5: 2Q 2007 highlights: revenue and EBITDA
5 Revenue 2Q 2007 vs 2Q 2006 2Q 2007 highlights 80 44% Millions 70 Revenue highlights 60 2Q revenue: MNOK 75.3, up 44% vs. 2Q06 50 40 Record quarter 30 Desktop revenue MNOK 15.6, up 165% 20 vs. 2Q06 10 Internet Devices revenue MNOK 59.7, 0 2Q 2006 2Q 2007 up 29% vs 2Q06 Revenue 1H 2007 vs 1H 2006 16
Slide 6: Financial Review
Financial Review
Slide 7: Income statement
2Q07 financial review 7 Income statement NOK Million Q2 2007 Q2 2006 Q on Q Desktop + 15.6 5.9 165% Internet Devices + 59.7 45.3 29% Total revenue = 75.3 52.2 44% Payroll and related expenses - 49.3 31.7 55% Stock option costs - 3.4 (0.7) nm Depreciation and amortization - 1.5 1.0 49% Other operatin
Slide 8: Key financial figures
2Q07 financial review 8 Key financial figures Operating revenues (NOK Million) EBITDA* (Non-IFRS) (NOK Million) 80 15 75 70 10 65 60 10 61 7 5 50 52 53 5 48 48 3 2 3 40 0 -2 -1 -1 40 -2 -3 38 30 -5 30 -5 -6 28 20 25 22 23 -10 10 -12 0 -15 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 04 Q2 04 Q3 04 Q
Slide 9: OPEX development
2Q07 financial review 9 OPEX development OPEX (NOK Million) OPEX comments 2Q07 vs 1Q07 Payroll Stock Options Depreciation Other OPEX Non recurring costs Payroll cost down 8% Seasonal effect of vacation pay 90 Low headcount growth 80 Stock option costs up New option program in place (predominantly 70
Slide 10: Revenues / EBITDA development
2Q07 financial review 10 EBITDA development 2Q 2006 / 2Q 2007 (NOK Million) Comments on EBITDA development YoY* 30,0 Revenues up MNOK 23.2 Desktop + MNOK 9.7 25,0 Internet Devices + MNOK 13.4 20,0 Payroll and related expenses up MNOK 17.6 Sales and Marketing globally 15,0 Engineering Overall headcou
Slide 11: Strong capital structure
2Q07 financial review 11 Strong capital structure Balance Sheet BALANCE SHEET Q2 2007 Q1 2007 700 Deferred Taxes 12 321 11 684 600 Goodwill 3 143 3 143 Cash and cash Fixed Assets, Net 23 709 24 023 500 equivalents Accounts Receivable 50 685 69 327 400 Accrued, but Unbilled Revenue 28 221 32 145 300
Slide 12: Strong cash flow
2Q07 financial review 12 Strong cash flow CASH FLOW STATEMENT Q2 2007 Q1 2007 Operating cash flow MNOK 31.9 Positive result Cash flow from operating activities Profit/loss before taxes 3 711 -6 929 Positive working capital management Taxes paid -1 776 -3 050 Investment activities MNOK 1.8 Depreciati
Slide 13: Update on Opera's FY 2007 operational priorities
2Q07 financial review 13 Update on Opera’s FY 2007 operational priorities Priorities YTD status report Focus and invest in consumer area Desktop revenue up 165% YoY 2Q07 Opera Mini monthly page views up 25% vs. 1Q07 My Opera users up 112% from 2Q06 Accelerate momentum among mobile 12 new phones from
Slide 14: Operations Update
Operations Update
Slide 15: Opera's vision
15 Opera’s vision Opera’s vision is to provide the best Internet experience on any device
Slide 16: Delivering One Web
Delivering One Web People want to access the same services regardless of device The cost of teaching people to do something new is too high Most devices will have full Web browsers– good for users, operators and manufacturers The browser is now a platform for Web 2.0 applications and services Empowe
Slide 17: The world of Opera
The world of Opera \ \ _— The world of Opera user: Wi ‘Ss Opera consumer products H@OUs Desktop Community Mini Mobile \ Opera-powered s olutions BY Op Po Mobile Core Technology a Mini Operator Devices Calttions Desktop
Slide 18: Working with global leaders
18 Working with global leaders
Slide 19: The unique differentiators
19 The unique differentiators Windows Motorola Pocket P2K PC Smart ltron phone Windows CE/Mobile Superior user experience Media S60 Opera is the smallest full-featured Highway Symbian Platform browser OS Independent UIQ kernel Lower HW, power requirements Mac Performs well on low-resource QnX Java d
Slide 20: The browser is the glue
The browser is the glue Wi. Si q , a 7@ facebook jaa & Q OPERA
Slide 21: Three screens – boundaries blurring
21 Three screens – boundaries blurring making calls watching movies watching films browsing Web browsing web making calls 1998 2007
Slide 22: Operations Update Business area
Operations Update Business area
Slide 23: Opera value proposition: Business area
23 Opera value proposition: Business area Target Key value proposition of full Web browsers and Opera Customer/Market Mobile operators Full Web browsing Drives data traffic = higher ARPU* Facilitates customer retention Differentiates operator service offering from competition Opera Can power converg
Slide 24: Opera value proposition: Business area
24 Opera value proposition: Business area Target Key value proposition of full Web browsers and Opera Customer/Market Consumer Full Web browsing as a product differentiator Electronic Device Helps OEMs meet and exceed customer expectations of browsing on OEMs any Internet connected device Provides s
Slide 25: Opera Mobile: 2Q highlights
25 Opera Mobile: 2Q highlights Number of phone models with Opera pre-installed Shipments of phones with Opera pre-Installed 60 Millions 12 52 50 10 40 37 8 30 6 24 20 4 13 10 2 6 0 0 2003 2004 2005 2006 2007 YTD Total shipments of Opera Mobile rose 22% in 2Q07 vs. 2Q06 23 new mobile phones that incl
Slide 26: Opera Mobile: 52 new phones so far in 2007
26 Opera Mobile: 52 new phones so far in 2007 Accton HTC Panasonic Toshiba VM3228T HTC Ameo (T-Mobile) Panasonic W51P Toshiba G500 HTC U1000 (Dopod) Panasonic W52P Toshiba G900 HTC Advantage Toshiba W51T ASUS Samsung Toshiba W52T ASUS V1210 KDDI Samsung SPH-8100 Toshiba W53T MEDIA SKIN Samsung SCH-M
Slide 27: WILLCOM
27 WILLCOM On July 3, WILLCOM’s new smartphone hit the streets and subways of Japan The W-ZERO3 Advanced [es] features the Opera Mobile browser This is the third handset to ship with Opera from Willcom, a national operator in Japan with 4,5 million subscribers
Slide 28: Opera powers Motorola's new mass market handsets
Opera powers Motorola’s new mass market handsets “Surfing the Web on the RAZR V9 is a joy, thanks to the included Opera Web browser” Laptop Magazine, US
Slide 29: Opera Mini: 27 new phones so far in 2007
29 Opera Mini: 27 new phones so far in 2007 LG Sagem LG KU250 My411x LG KE970 P9521 LG KU311 Samsung Samsung E900 Nokia Samsung SGH-E250 Nokia 6085 Samsung SGH-D900 Nokia 5500 Samsung U700 Samsung ZV60 Nokia 3110 Samsung D900i Nokia 7373 Nokia 6131 Sony Ericsson Nokia 5300 SE K550 SE W200i Nokia 623
Slide 30: The Web gets Handy in Germany
30 The Web gets Handy in Germany
Slide 31: Vodafone D2 introduces the mobile Web
Vodafone D2 introduces the mobile Web Vodafone D2 introduced its new "Handy 2.0 Mobile Internet" service, powered by Opera and Bytemobile Inc. Users access the real Internet using a Vodafone-branded version of Opera Mini With flat-rate EUR 9.95 per month, users can surf all their favorite Web sites,
Slide 32: Operators choose Opera Mini
Operators choose Opera Mini Full-scale commercial partners: T-Mobile International Vodafone D2 TMN (Portugal) Telefónica Móviles de España (Spain and CALA) PTC/era (Poland) Distribution deals: TIM Hellas (Greece) Pannon (Hungary) GrameenPhone (Bangladesh) mobilkom (Austria) Omnitel (Lithuania) TDC (
Slide 33: Growth continues in Opera for Devices
33 Growth continues in Opera for Devices The Westell Media Terminal(TM), a broadband smartphone, features the Opera browser Opera brings the Web to innovative devices: Palm Foleo, the smartphone companion to launch shortly Westell Media Terminal(TM) Final version of Opera for Nintendo Wii introduced
Slide 34: Operations Update Consumer area
Operations Update Consumer area
Slide 35: Opera for Desktop: 2Q highlights
35 Opera for Desktop: 2Q highlights Fourth consecutive quarter of Opera Desktop Revenue (MNOK) growth 16 Revenue growth of 165% 14 compared to 2Q06 12 Further increase in usage drives 10 record revenues 8 Innovative features such as Speed 6 Dial contribute to further growth in usage 4 2 Continued ma
Slide 36: Onet.pl
36 Onet.pl Distribution and revenue share partnership with the leading Internet brand in Poland: Onet.pl As a result, Opera strengthens its awareness and market penetration in a historically highly successful market for the company’s products Areas of collaboration include a Onet.pl search field in
Slide 37: Opera Mini: 2Q highlights
37 Opera Mini: 2Q highlights Cumulative pages downloaded Cumulative Opera Mini Users and Page Views since launch: 7.8 billion 25 9 000 Millions Millions 8 000 Cumulative number of users*: 19.9 20 million 7 000 6 000 15 Opera introduced the trial (beta) 5 000 version Opera Mini 4 4 000 10 Page overvi
Slide 38: KongZhong: China's leading mobile services company
38 KongZhong: China’s leading mobile services company Launch of "KongZhong Opera" browser for Chinese mobile phone users “KongZhong Opera“, based on Opera Mini, is a free download that enables mobile phone users to browse both traditional Internet sites and WAP sites with their cell phone Revenue sh
Slide 39: Growth in Opera Mini traffic continues
Growth in Opera Mini traffic continues 39 Opera Mini monthly page views 1 000 000 000 900 000 000 800 000 000 700 000 000 600 000 000 500 000 000 400 000 000 300 000 000 200 000 000 100 000 000 0
Slide 40: Introducing the power of My Opera
40 Introducing 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 loyalt
Slide 41: My Opera – the facts
41 My Opera – the facts My Opera Community closing in on one million members: June 30: 877,650 members August 24: 973,500 members Growth since 1Q: 19% Growth since 2Q 2006: 112% (414,962 members per June 30, 2006) 1 500 sign-ups per day
Slide 42: My Opera statistics
My Opera statistics 42 Cumulative registered users 1 000 000 900 000 800 000 700 000 600 000 500 000
Slide 43: Summary
Summary PER Q OPERA
Slide 44: Update on Opera's FY2007 financial goals
2Q07 financial review 44 Update on Opera’s FY2007 financial goals Metric Goal 2007 Baseline 1H performance Revenue Accelerated growth vs. >39% 41% 2006 vs. 2005 growth EBITDA* Single digit >1% 1.2% EBITDA* Note: This does NOT constitute financial guidance *Non-IFRS EBITDA excludes stock option cost
Slide 45: Update on Opera's FY2007 operational goals
2Q07 financial review 45 Update on Opera’s FY2007 operational goals Metric Goal 2007 YTD performance Opera Desktop 50% increase in users ~20% increase Opera Devices 20 Devices announcements 6 announcements Opera Mini B2C 30 million cumulative users 19.9 million Opera Mini B2C 10 billion cumulative p
Slide 46: Thank you for listening!
Thank you for listening!