correctness or completeness of the presentation, and neither Opera Software
ASA nor ..... Web 2.0 applications and services ... downloads .... Nokia 3110
classic.
Opera Software Fourth q quarter 2008
A note from our lawyers 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, performances or achievements expressed or implied by the forward forward-looking looking statements. statements Forward-looking statements may in some cases be identified by terminology such as “may”, “will”, “could”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” p or “continue”,, the negative g of such terms or other comparable p terminology. gy These statements are only predictions. Actual events or results may differ materially, and a number of factors may cause our actual results to differ materially from any such statement. Although we believe that the expectations and assumptions reflected in the statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievement. Opera Software ASA makes no representation or warranty (express or implied) as to the correctness or completeness of the presentation, and neither Opera Software ASA nor any of its di t directors or employees l assumes any liliability bilit resulting lti ffrom use. E Exceptt as required i db by llaw, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this presentation to conform these statements to actual results or to changes in our expectations. You are advised, however, to consult any further public disclosures made by us, s ch as filings made with such ith the OSE or press releases releases. This presentation is for information purposes in connection with the Opera Software ASA 4Q08 presentation only. The presentation is not an offer to sell, or the solicitation of an offer to buy, any securities. securities
2
3
Agenda 1. Highlights Erik Harrell, Harrell CFO/COO
2. Financial review Erik Harrell, CFO/COO
3. Operational update Business, Consumer Jon S. von Tetzchner, CEO
4. Q&A
4
Operational highlights: 4Q08 + YTD 2009 Priority Areas
Overview
Operators
Vodafone signed Global Frame Agreement with Opera across multiple product categories and geographies Introduced Opera p Turbo – targeted g at operators p and OEMs Opera Mobile and Opera Widgets on KDDI's new mobile phone lineup
Mobile
12 new phones with Opera pre-installed, including 2 new phones with Opera Mobile and 10 with Opera Mini Opera Mobile shipments pre-installed in 4Q08: 7.3 million
Devices
Opera introduced on ASUS Eee Top PC Announced Nintendo DSi gaming device with Opera Alpha Networks and ZyXEL introduced set-top boxes with Opera
Desktop
Desktop users grew by 17% in 4Q vs. 3Q (up 67% from end 2007)
Opera Mini (consumer)
20 million monthly users of Opera Mini in January 2009 (up over 160% vs January 2008), which generated over 7.6 billion viewed pages (up over 325% vs January 2008) and 122M MB of data traffic Y h ! selects Yahoo! l t Opera O Mini Mi i for f revamped d Yahoo! Y h ! Mobile M bil solution l ti
5
4Q08 financial review
2008 Financial highlights Priorities
4Q status report
2008 status report
Revenue
MNOK 157.0 (+69% vs 4Q07)
MNOK 497.1 (+58% vs. 2007)
EBITDA*
MNOK 35.7 (MNOK 12.2 in 4Q07)
MNOK 98.0 ( vs. MNOK 25.8 FY2007)
Operating Cash Flow
MNOK 69.0 (MNOK 5.3 in 4Q07)
MNOK 149.7 ( vs. MNOK 38.9 FY2007)
* Non-IFRS EBITDA excludes stock option cost
6
Financial Review
7
4Q08 financial review MNOK
4Q 2008 4Q 2007 Q on Q
2008
2007
08 vs 07
Desktop +
41.9
19.3
117%
116.3
67.1
73%
Internet Devices +
115.0
73.7
56%
380.8
248.4
53%
Total revenue =
157.0
93.0
69%
497.1
315.5
58%
Payroll and related expenses -
88.0
58.5
50%
296.5
215.1
38%
Stock option costs -
2.3
1.1
118%
8.8
8.4
5%
Depreciation and amortization -
2.5
1.7
42%
8.3
6.5
28%
Other operating expenses -
33.2
22.3
49%
102.6
76.6
37%
Total expenses =
126.0
83.6
51%
416.2
304.6
37%
EBIT
30.9
9.4
80.9
10.9
Net Income
31.1
13.6
89.9
13.2
EPS (NOK)
0 26 0.26
0 12 0.12
0 75 0.75
0 11 0.11
8
4Q08 financial review
K financial Key fi i l figures fi Operating revenues (NOK Million)
EBITDA* (Non-IFRS) (NOK Million)
160 157
35
140 120
36
125 113
100
25
26
103 93
80
82
21
15
16
75
60
61 48 8 48 8
40 20
12 12
65
52 53
10
-2
40 38 25 22 23
30 28
7
5
-5
3
1 -2 -1
-3
-1 1
5 2
3 -5
-6 -12
0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08
-15 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08
* Non-IFRS EBITDA excludes stock option costs
4Q08 financial review
Revenues: 4Q08 Area
Comments: Revenues (vs. (vs 4Q07)
Business
Operators: Strong growth in Opera Mini license revenue, driven by operator active user growth Mobile and Device OEMs: Large increase in revenue from existing and new customers
Consumer
Opera Desktop: User growth up 67% since 4Q07 Strong growth in Opera Mini revenue streams vs 4Q07, with Opera Mini users up 160% since 4Q07
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10
4Q08 financial review
OPEX development d l t OPEX (NOK Million) Payroll
140
Stock Options
Depreciation
Other OPEX
Non recurring costs
OPEX comments 4Q08 vs 4Q07 •
Payroll cost up 50% Headcount growth worldwide of 38% since 4Q07 • Expect quarterly payroll cost/head to be slightly higher in 2009 versus 4Q08 •
120 100 80
•
Stock option* costs up 118% •
Impact of Opera stock price
60 •
Result of investments in worldwide and Opera Mini infrastructure
40
•
20 •
0
Depreciation cost up 42%
Other OPEX up 49% Expect other opex/employee/quarter in FY2009 to be generally comparable to 4Q08 •
*Fair Value cost in 4Q08 was approximately 2.1 MNOK
11
4Q08 financial review
EBITDA d development l t 4Q 2007 / 4Q 2008 (NOK Million)
80,0
Comments on EBITDA development YoY*
70,0
Revenues up MNOK 64.0 60,0
! !
Desktop + MNOK 22.6 Internet Devices + MNOK 41.3
50,0
Payroll and related expenses up MNOK 29.5
40,0
!
30,0
! !
20,0 10,0
Engineering Sales and Marketing globally Overall headcount up 38% vs. 4Q07
Other expenses up MNOK 10.9 EB BITDA Q4 2008 8
Other
Stoc ck option costs s
Payrroll and related d
Revenues s
EB BITDA Q4 2007 7
0,0
* Year over Year, Year 4Q 2008 vs 4Q 2007
12
4Q08 financial review
St Strong capital it l structure t t Balance sheet (MNOK)
Balance sheet highlights g g
900 800 700 600 500 400 300 200 100 0
Cash and cash equivalents
Metric
4Q08
4Q07
Cash
MNOK 564
MNOK 467
NWC*
MNOK 9
MNOK 17
Equity
MNOK 598
MNOK 533
Current assets
Fi ed assets Fixed
31.12.2007
31.12.2007
31.12.2008
* NWC is defined as Total current assets excluding cash and cash equivalents i l t minus i T Total t l currentt liabilities li biliti
Total Equity y 650 600 550 500 450 400 31 12 2007 31.12.2007
31 12 2007 31.12.2007
31 12 2008 31.12.2008
13
4Q08 financial review
St Strong cash flow fl 2008 Operating cash flow: MNOK 69.1 in 4Q08 p g cash flow : MNOK 149.7 in 2008 Operating
Cash Flow highlights g g
200
4Q08
4Q07
Operating cash flow
MNOK 69
MNOK 8
Investments
MNOK -5
MNOK -1
Financing*
MNOK -8
MNOK -1
Cash balance
MNOK 564
MNOK 467
Millions
180 160 140 120
100 80 60 40
* Opera Software bought back 695 100 own shares totaling 9.5 MNOK in 4Q08
20 0 2007
2008
Operating cash flow 2008 vs 2007
4Q08 financial review
Operational focus FY2009 Grow revenues across business segments Be mindful of macroeconomic environment Invest and increase headcount, while being vigilant on costs F Focus on operating i cash h flow fl
Note: This does NOT constitute financial guidance *Excludes stock option costs
14
4Q08 financial review
15
Key strategies to achieve goals: Revenues Business area
Consumer area
Continue to focus on top mobile operators and OEMs
Aggressively grow Opera Desktop and Opera Mini users in top ten target geographic markets
Grow operator-branded Opera Mini active users and win new operators with widgets solution
Leverage Opera Link and increase value proposition through new features
Continue to focus on top p consumer electronics OEMs
Monetize rapidly p yg growing g Opera p Mini user base
Hire enough top quality sales, marketing and engineering people and increase productivity to drive growth
Increase third-party distribution channel share of Opera Mini users
Note: This does NOT constitute financial guidance
16
4Q08 financial review
Key strategies to achieve goals: Profits Business area
Consumer area
Focus on top customers and opportunities
Prioritize most strategic features and functions
Continous alignment of engineering planning p g relative to p projected j demand
Optimize headcount growth and priorities
Continue to: • build and sell more standardized products and SDKs • build easily customizable products for operators
Constantly monitor efficiency of Opera Mini hosting operation
Note: This does NOT constitute financial guidance
Operations Update
18
Opera’s vision
Opera’s O ’ vision i i iis to provide id the h b best Internet experience on any device
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This is Opera Software The world’s leading Web browser developer company: 675+ employees in ten countries Unmatched footprint across PCs, mobile phones and other connected devices p Leading customers: T-Mobile, Vodafone, Nokia, KDDI, Sony Ericsson, Motorola, Samsung, Sony and Nintendo + others
End-user movement: !
!
!
! !
20+ million unique monthly users of Opera Mini in January 2009 Opera Mobile shipped on 125+ million phones More than 130+ million downloads of Opera products from Opera.com alone in 2008 35+ million use Opera for PCs Millions surf Opera on Wii and other connected devices
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Th vision The i i h has b become reality lit
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Opera’s unique ability to deliver a world-class, ld l crossplatform browser Technical ! One core – multiple platforms ! Support of quickly evolving standards ! Cutting edge innovation Organizational ! Experienced, global organization ! Management experience in handling highly complex technical projects ! Large Quality Assurance team Beyond the features ! The importance of time to market p , with Widgets, g , services and server-enabled solutions ! A connected experience,
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There is only one Web
Devices, platforms and networks: they come in all shapes and sizes. Only one thing unifies them: The Web
Why only One Web will prevail People want to access the same services regardless of device The cost of teaching people to do something thi new is i too t high hi h Most connected devices will have f ll Web bro full browsers– sers good for users, sers operators and manufacturers The browser is now a platform for Web 2.0 applications and services Empowers the next generation of user-driven content
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The unique Th i diff differentiator: ti t One O browser b core for any platform powers One Web Windows
Pocket PC
Smart phone
Motorola P2K
ltron Samsung SHP
Windows CE/Mobile
S60
Media Highway
PlatformPl tf independent core
Symbian OS UIQ
Mac
QnX
Java J2ME (Mini)
Unix Qte Qt
Linux Solaris
Qtopia
Free BSD
BREW
Nintendo
Gogi Wii DS
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Proprietary mobile operating systems will drive the Web as the application platform 90% of mobile handsets ship with proprietary mobile operating system 2007 approximately 1.1 1 1 billion In 2007, handsets shipped with a proprietary OS while just 100 million shipped with p OS an open Examples of leading, proprietary OSs: S40 (Nokia), EMP (Sony Ericsson), SHP (Samsung), P2K (Motorola)
Source: Strategy Analytics, Yankee Group, Opera estimates
Applications will increasingly drive phone sales, so widgets will be adopted by the high volume, properietary i t OS feature f t phone h market k t
26
The Opera Opera-powered powered day
Breakfast: Opera p on laptop
Bus: Opera p Mobile
Work: Opera p on laptop
Boring meeting: g Opera Mini
Airport lounge: g Opera on Archos PMP
Recreation: Opera p on Wii
27
Web as a platform gains momentum OEMs and operators are looking to leverage the Web as a platform for mobile applications, user interfaces and services OEMs and operators are looking for an open p developer p environment they y can offer across phones Users are looking for an easy way to access personalized and current content on their connected devices
T-Mobile, KDDI and other operators are using i Widgets to make content easily available on the mobile screen
Operations Update Business area
29
Why operators choose Opera Mini Increase ARPU through frequent data usage Attract new customers Improve customer retention and reduce churn Maintain a sustainable competitive advantage
t
30
Global agreement with Vodafone Group Vodafone and Opera collaborates to enhance the mobile Internet experience i on handsets h d t The global agreement covers a wide array of Opera products: Opera Mini, Opera Widgets and Opera Turbo Applications can be pre-installed or made available as over-the-air downloads
31
The dynamic duo: Opera Mobile and Opera Mini Number of phone models with Opera pre-installed pre installed
Opera’s presence keeps growing on an ever larger list of mobile phone models
250
200
New models with Opera Mobile in 4Q: 2
150 141 100
59
0
Total new models in 2008: 197
35
50
6
13
2003
2004
24 2005
Opera p Mobile
New models with Opera Mini in 4Q: 10
63
56
2007
2008
37
2006
Opera p Mini
Number of mobile phones shipped with the Opera Mobile browser: 7.3 million in 4Q08.
32
Operators and Opera Mini Operator-branded: Cell One (Namibia) Debitel (Germany) O2 (Slovakia & Germany) PTC/era (Poland) Swisscom (Switzerland) T-Mobile International Tata Teleservices (India) TMN (Portugal) Vodafone Group (New)
Opera-branded: GrameenPhone (Bangladesh) Helio (USA) HT Telecom (Europe) mobilkom (Austria) MegaFon (Russia) Meteor Communications Ltd. (Ireland) Mobitel (Sri Lanka) Movistar (Mexico) Movistar (Colombia) MTN Uganda Omnitel (Lithuania) Optimus (Portugal) Pannon (Hungary) Talkline (Germany) TDC C (Denmark) ( ) Telenor (Serbia) Telenor (Pakistan) Ten (France) TIM Hellas (Greece)
33
Opera Mobile: 56 new models in 2008 Casio Casio Hitachi W61CA Casio W62CA Casio EXILIM Keitai W63CA Hitachi Hitachi W61H Hitachi W62H Hitachi Wooo Keitai W63H HTC HTC Shift HTC Touch Diamond HTC T Touch hP Pro HTC Touch HD HTC Touch Viva HTC Fuze HP iPAQ Data Messenger Kyocera Kyocera W61K Kyocera W64K Kyocera W62K Kyocera W63K Kyocera W65K
Motorola Moto Z10 Moto Z9 Moto A810 Motoming A1600 Motorola Q9e MOTO Q Global Panasonic P i Panasonic W61P Panasonic W62P Pantech Pantech W61PT Pantech W62PT Samsung Samsung Omnia Samsung SCH-M480 Samsung 900i Samsung L700 Samsung Player Addict Samsung Saga Sanyo Sanyo W61SA Sanyo W62SA Sanyo W63SA Sanyo W64SA Sharp Sharp W61SH Sharp W62SH Sharp AQUOS Keitai W64SH
Sony Ericsson Sony Ericsson G700 Sonyy Ericsson G900 Sony Ericsson W61SA Sony Ericsson re Sony Ericsson W64S Sony Ericsson Xperia X1 Toshiba Toshiba W61T Toshiba Sportio Toshiba W62T Toshiba W65T WILLCOM WILLCOM 03 Willcom WX330K Willcom WX331K XDA (O2) XDA Diamond XDA Serra
Black: 1Q-3Q Red: 4Q
34
Opera Mobile: fresh off the press (1Q09)
Garmin-Asus nüvifone M20 with Opera Mobile 9.5 95
HTC Touch Diamond2 with Opera Mobile 9.5 95
HTC Touch Pro2 with Opera Mobile 9.5 95
MOTOSURF A3100 with Opera Mobile
35
Opera Mini: 141 new models in 2008 ASUS ASUS P552 Fly (India) Fly MC 100 Fly E 130 Fly B 700 Fly B600 Fly B700 Duo Fly E110 Fly E300 Fly E310 Attitude Fly HUMMER HT2 Fly LX500 Fly LX600 Mega Fly LX610 Mega Fly MC101 Fly SX210 Fly SX220 Fly SX225 Fly V100 LG LG KS20 LG KF750 Secret LG HB620T LG KB770 LG KC910 LG KU990 LG KF750 LG KC550
Nokia Nokia N82 Nokia N81 Nokia N86 Nokia 5000 Nokia 2680 Nokia 6300i Nokia 6288 Nokia 6300 Nokia 6630 Nokia N73 Nokia 6210 Navigator Nokia 6220 classic Nokia 6233 Nokia 6280 Nokia 6600 fold Nokia 6600 slide Nokia 6600s Nokia N95 512 MB Nokia N95 8GB Nokia N95 8GB Nokia 2320 classic Nokia 2323 classic Nokia 2330 classic Nokia 3109 classic Nokia 3110 classic Nokia 3120 classic Nokia 5130 XpressMusic Nokia 5300 Nokia 5310 Xpress Nokia 5310 XpressMusic Nokia 6131
Nokia Nokia 6210 Nokia 6500 classic N ki 7100 S Nokia Supernova Nokia 7510 Nokia 8600 Nokia 8800 Nokia 6700 Nokia 6500 Slide Micromax Micromax Blink X511 Motorola Motorola V3 Motorola V9 Motorola K1 Sagem g Sagem EX2008P Sagem my721x Samsung Samsung SGH-A800 Samsung F700 Samsung J700 Samsung U900 Samsung F480 Samsung SGH-U700 Samsung SGH-U800 SGH U800 Samsung SGH-Z400 Samsung U800 Soul b Samsung U900 Soul
Samsung Samsung Z400 Samsung B2700 Samsung D900i Samsung E740 Samsung F480 Samsung G600 Samsung L870 Samsung M300 S Samsung M8800 Samsung SGH-U800 Samsung U700 Samsung G800 Samsung B2700 Spice Mobile (India) S-920n S-9 Spice Spice S-707n Spice X-1 Spice D-90 Sonim Sonim XP3 Sony Ericsson Sony Ericsson K818c Sony Ericsson K750i Sony Ericsson W380i Sony Ericsson W910i Sony Ericsson Z780 Sony Ericsson C902
Sony Ericsson Sony Ericsson Linda Sony Ericsson Shiho Sonyy Ericsson W760i Sony Ericsson W980i Sony Ericsson C702 Sony Ericsson C702 Sony Ericsson C902 Sony Ericsson C902i Sony Ericsson K610i Sony Ericsson K850i Sony Ericsson W880i Sony Ericsson W890i Sony Ericsson An Sony Ericsson Feng Sony Ericsson K530i Sony Ericsson K550i Sony Ericsson K770i Sony Ericsson TM506 Sony Ericsson W350i Sony Ericsson W580i Sony Ericsson W610i Sony Ericsson W760i Sony Ericsson W810i Sony Ericsson W890 Sony Ericsson W910i Sony Ericsson Ying Sony Ericsson W980 Sony Ericsson W902 Sony Ericsson W595 Sony Ericsson K770 Sony Ericsson C905 Sony Ericsson F305 Sony Ericsson C510 Uriver Uriver SP900
36
Opera Mini: Fresh of the press Tough car meets tough phones meets tough browser Two new devices: Land Rover S1 by Sonim and Land Rover S2 G4 by Sonim
37
Opera Turbo: a superior Web experience with significant speed and cost benefits
With Opera Turbo, operators and OEMs keep customers happy and network costs down Users get a fast, attractive Web experience at a lower cost By compressing network traffic by up to 80%, Opera Turbo helps to enable the sustainability and scalability of networks in order to meet traffic demands and ensure a superior browsing experience
38
Opera Devices: pushing boundaries of One Web Two areas of use: Full Internet browsing. Opera Devices SDK used to develop a fullfledged browser for surfing Application environment. Opera Devices SDK powers a device with menu system, y , user interface,, Widgets and applications
39
Philips first to ship TVs with a browser inside Philips introduces Net TV – powered by the Opera browser
Philips introduces easy internet access on the TV with the i innovative ti Net N t TV feature f t To be available on all Philips televisions in Europe in the 8000 series, 9000 series and Cinema 21:9 from Spring 2009 onwards Web content is tailored for the best possible viewing experience on the TV screen, and is easily accessed through the TV’s remote t control, t l without ith t the th need d for extra set-top boxes or service subscriptions, or for starting up a l t laptop.
40
ZyXEL and Alpha Networks select Opera for set-top boxes ZyXEL Communications (Taiwan), a leading broadband access solutions provider, has selected O Opera Devices D i 9.5 9 5 ffor it its new Li Linux-based b d set-top tt box (STB) series Opera also serves as the presentation engine on the STB series Alpha global leader in the p Networks ((Taiwan)) a g networking industry, selected the Opera Devices SDK to deliver the Internet to its new high-definition IP set-top boxes, the AST series. Alpha Networks replaced its previous browser technology with the Opera Devices SDK in order to bring g a superior p Web experience p to users of the AST series.
41
Touch the Web on ASUS Eee Top PC with the Opera browser Eee Top PC: An innovative touchscreen computer Opera brings drag-anddrop functionality, onscreen panning and an automatic virtual keyboard to the Eee Top PC Already available in multiple markets
42
Th Nintendo The Ni t d DSi goes global l b l In early April 2009, the Nintendo DSi goes on sale l iin Europe E and d North America
43
KDDI au BOX Sony VGF-CP1
Nintendo Wii
Nintendo DS
Sony Bravia Video Internet link
Q-matic ticket printer Phillips Professional Flat TV
Archos 5 & 7
Telsey Waves
Iwatsu Precot IP Phones
Amino Set-top box
VCom NDVB-9000 Tilgin Mood 300 & 400
44
Operations p Update p Consumer area
The big g picture: p Global Internet penetration p now at 20% - as indicator of market opportunity pp y Growth in Desktop Internet Users (Global, MM)
Source: Internet World Stats
46
Opera for Desktop: Revenue growth Opera Desktop Revenue (MNOK)
Ninth consecutive quarter of growth
45
Revenue growth of 117% compared to 4Q07
35
User growth 67% compared to 4Q07
40
30 25 20 15
R i b fit off localization l li ti Reaping benefits strategy in terms of product features, marketing materials and commercial agreements Higher user growth than overall Internet market in target countries
10 5 0
47
The big picture: Mobile Web growth in 2008 From Opera’s monthly State of the Mobile Web report More users Number of Opera Mini users in Jan 2008: 7.6 million Number of Opera Mini users in Jan 2009: 20 million User growth on social networks in 2008: vKontakte: 910% Facebook: 693% MySpace: 618% Data traffic g growth ((Jan 2008 – Jan 2009)) + 350% (to 122 million MB)
48
O Opera Mi Mini: i Opera Mini monthly page views 8 000 000 000
20 million monthly users
7 000 000 000
6 000 000 000
122 million MB of data transferred monthly Value for operators (at NOK 4 per MB): NOK 5.9 billion per year Opera Mini now generates data traffic for 500 operators in 150 countries 150+ t i every month
5 000 000 000
4 000 000 000
3 000 000 000
2 000 000 000
1 000 000 000
0
49
Yahoo! selects Opera Mini Yahoo! improves consumers’ consumers ability to use their phones to discover and stay connected Opera Mini 4 4.2: 2: “An An integrated version of the world's most popular mobile web browser, with easy return to the Yahoo! Mobile app, that launches when web site access is needed.” Launch expected by late May 2009 Device categories: Hundreds of select models from RIM RIM, Windows Mobile, Nokia S60 and 40, Samsung, Sony Ericsson and Motorola. Motorola
50
M O My Opera – att the th heart h t off Opera’s O ’ universe i
In January 2009: Total members: 2 100 000 Visitors: 9,121,448 Average daily sign-ups: 3211 Average daily page views: 1,203,713
Th k you for Thank f listening li t i