Opera Software Fourth Quarter 2006

Transcription

1 Opera Software Fourth Quarter 2006

2 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, performances or achievements expressed or implied by the forward-looking 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 or continue, the negative of such terms or other comparable terminology. 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 directors or employees assumes any liability resulting from use. Except as required by law, 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, such as filings made with the OSE or press releases. This presentation is for information purposes in connection with the Opera Software ASA 4Q06 presentation only. The presentation is not an offer to sell, or the solicitation of an offer to buy, any securities.

3 4Q highlights 3 Revenue highlights 4Q revenue: MNOK 60.6, up 26% vs. 4Q05 Record quarter Millions % Revenue Desktop revenue MNOK 12.9, up 101% vs. 4Q05 40 Internet Devices revenue MNOK 47.7, up 14% FY revenue: MNOK 213.8, up 39% vs. FY05 0 Q Q EBITDA highlights 4Q EBITDA: MNOK vs. MNOK 4.4 in 4Q05 FY 2006 EBITDA vs. FY 2005 EBITDA 3.0 Millions Revenue 39% FY 2005 FY 2006

4 4Q highlights 4 Business Samsung selects Opera for upcoming mobile phones Opera Mini and Opera Mobile powers Navega mobile Web service from Telefónica Móviles Signed licensing deal with Sony Opera browser for Nintendo Wii available to the public Consumer Renewed strategic partnership with Google Opera Mini 3.0 released to the world nearly 12 million cumulative users* and 4 billion cumulative page views Released Opera 9.1 with industry-leading Fraud Protection * Number of users who have downloaded and used Opera Mini

5 Financial Update

6 4Q financial review 6 Income statement NOK Thousands Q Q FY 2006 FY 2005 Q on Q Y on Y Desktop % 28% Internet Devices % 41% Total Revenue % 39% Payroll and related expenses % 55% Stock option costs % 45% Depreciation and amortization % 112% Other operating expenses % 64% Total Expenses % 58% EBIT (15 690) (27 471) 927 n/a n/a Net financial items % 140% EBT (12 626) (18 595) n/a n/a Provision for Taxes (216) (1 428) 308 (1 819) n/a n/a Net Profit (12 842) (18 288) n/a n/a EPS (NOK) (0,11) 0,03 (0,15) 0,03 n/a n/a EPS, Fully Diluted (NOK) (0,10) 0,03 (0,15) 0,03 n/a n/a

7 4Q financial review 7 Key financial figures Operating Revenues (NOK Million) EBITDA (Non-IFRS) (NOK Million) Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 * Non-IFRS EBITDA excludes stock option cost

8 4Q financial review 8 OPEX development OPEX (NOK Thousands) OPEX Comments 4Q06 vs 3Q06 Payroll Stock Options Depreciation Other OPEX Non recurring costs Overall costs higher in 4Q06 vs. 3Q06 Increased headcount Increased marketing costs Opera also incurred approximately MNOK 4.5 of non-recurring expenditures Q Q Q Q Q Q4 2006

9 4Q financial review 9 EBITDA development Q / Q Comments on EBITDA Development YoY* 20 Revenues up NOK 12,5 million 15 Desktop: + NOK 6.5 million Internet Devices: + NOK 6.0 million 10 Payroll and related expenses up NOK 15.6 million 5 Sales & marketing globally 0 Engineering EBITDA Q Revenues Payroll and related Stock option costs Other EBITDA Q Stock option cost up NOK 1.3 million Other expenses up NOK 14.4 million -15 Higher indirect costs associated with higher headcount and international expansion -20 Non-recurring consulting expenditures * Year over Year, Q vs Q4 2006

10 4Q financial review 10 Strong capital structure Balance Sheets Cash and cash equivalents Current assets Fixed assets Total Equity Total Liabilities Balance Sheet Q4 06 Q3 06 Deferred Taxes Goodwill Fixed Assets, Net Accounts Receivable Accrued, but Unbilled Revenue Other Current Assets Cash and cash equivalents Total Assets Accounts Payable Other Liabilities Total Liabilities Common stock Additional paid-in-capital Retained earnings Total Equity Total Liabilities and Equity

11 4Q financial review 11 Outlook: FY 2007 Revenue: Well-positioned for long-term growth As consumers worldwide embrace and access the Internet through a growing array of mobile and non-mobile phone devices, Opera believes it is well-positioned to take advantage of the mega trends in both the mobile phone and consumer electronics industries Operating expenses Continued investment in our business lines, in particular around Opera Mini Continued investment in sales & marketing and foreign offices (Japan and USA, in particular), and engineering and customer delivery Opera expects to hire around 90 people in 2007, with more hires in the 1H2007 than the 2H2007; more hires planned in sales and marketing than ever before in a single year Opera is implementing new systems and processes in 1Q07 to optimally manage the continued growth of the company

12 4Q financial review 12 Outlook: FY 2007 FY 2007: Priorities Desktop/Mini: Invest in a more aggressive manner in the Consumer Segment and continue to grow user base worldwide Devices: Build on the momentum Opera has going into FY2007 among major consumer electronic OEMs Mobile: Accelerate momentum among mobile phone operators worldwide and increase Opera s position with top mobile phone OEMs globally Overall: Capitalize on Opera s unique cross-platform position and offer content related services to its users, leveraging the fact that its browsers run on a wide and disparate array of device types and form factors

13 Operations Update

14 Opera s vision 14 Opera s mission is to provide the best Internet experience on any device

15 Delivering cross-platform innovation 15 Desktop computers Laptops Gaming consoles TVs Set top boxes Mobile phones Personal communicators Portable media players PDAs In-flight entertainment systems Web tablets IP screen phones

16 Leading cross-platform technology 16 Opera is the smallest full-featured browser Lower HW requirements Lower power consumption Performs well on low-resource devices Opera is the fastest full-featured browser Limited bandwidth Better Internet experience Significantly faster than competitors in a number of tests Core code is ported to all platforms More than 15 platforms supported Opera 9 core is regularly used by millions

17 Opera powers convergence

18 There is only one Web 18 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 and improves customer retention

19 The growth of Web applications 19 Exercise: Find the Windows applications... netvibes

20 Web applications what happened? 20 No more native applications: practically all new services and applications are based on Web technologies such as Ajax The social Web: people create Web content through services like Flickr, MySpace, Blogger and YouTube The open Web: content providers make their services available to all by using open Web standards and APIs WEB 2.0

21 The browser is the glue 21

22 Three screens boundaries blurring 22 making calls watching movies watching films browsing Web browsing Web making calls

23 The Opera-powered day 23

24 Opera defining mobile Ajax since Opera Platform 2003 Opera Platform 2006

25 Opera brings Ajax to your TV 25 Web applications and user interfaces here today Opera enables Web applications on devices Web applications are dynamic, quick to create and can easily be modified Opera supports cutting-edge technologies such as Ajax

26 Operations Update Business Segment

27 Opera Mobile highlights 27 Number of phone models with Opera pre-installed Shipments of phones with Opera pre-installed Millions Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Q3/06* Q4/06 * Number for Q3 has been revised from 8.6 to 8.8 million (actual). Total shipments of Opera Mobile rose 72% in 4Q06 vs. 4Q05 4 new mobile phones that include the Opera Mobile browser were announced in 4Q06. Opera announced 37 new models in 2006

28 Phones with Opera Mobile 28 Opera Mobile announced models FY2006: 37 *: Only in Cingular s network **: Only in T-mobile s network Motorola A1200 Sharp W-ZERO3 Nokia 9300i Toshiba W32T Sony Ericsson P990 Nokia 6630** Kyocera WX 300K Kyocera WX 310K Kyocera AH-K3002V Nokia N70 Casio W43CA Toshiba DRAPE Toshiba W47T Hitachi W43H Motorola RAZR V3x ** MOTORAZR maxx MOTORAZR xx Nokia N70** Sharp W-ZERO3[es] Sony Ericsson M608c Nokia N90 Nokia N72 Nokia 7710 Casio W21CA T-Mobile SDA II** Motorola E895 Toshiba W44T Hitachi W42H Motorola A1200r Motorola A1200i Nokia 6620* Motorola E680i Casio W42CA Motorola ROKR e6 Sendo X Nokia 9300 Motorola A780 Hitachi W32H Nokia 6682 Sony Ericsson W42S Sanyo W33SA II Motorola A910 Motorola E680G Nokia 6600 Sony Ericsson P910 Nokia 6681 Sanyo E02SA Sony Ericsson W958c Sony Ericsson P900 Motorola A1000 Nokia 6680** Toshiba W43T Kyocera W44K Motorola A920 Nokia 7610 Toshiba W31T Sony Ericsson W950 Sanyo W42SA Sharp Zaurus Nokia 9500 Casio W31CA Sony Ericsson M600 Toshiba W45T Sony Ericsson P800 BenQ P30 Casio W21CA II Hitachi W41H Sharp W41SH Sharp Zaurus Nokia 7700 ZTE e3 Casio W41CA Kyocera W43K Psion Revo Kyocera PS 900 Motorola M1000 Sony Ericsson W41S Sony Ericsson W43S Nokia 9210 Sharp SL-6000 Motorola A1010 Motorola ROKR 2 Sanyo W43SA cont'd

29 Mobile browsing momentum accelerates 29 Sneak peek: 25 new phones ASUS ASUS V1210 KDDI Sharp W51SH Casio W51CA Hitachi W51H Kyocera W51K Sony Ericsson W51S Toshiba W52T Toshiba W51T au design project MEDIA SKIN Sanyo W51SA Panasonic W51P E28 R2821 HTC HTC Ameo (T-Mobile) HTC U1000 (Dopod) Longcheer Linux Smartphone Motorola V1100 A1200e MOTOQ Q9 RIZR Z8 Sharp emobile Simcom S955T Toshiba G500 G900 Wistron D-link ZTE E700

30 Gaining traction with Tier One OEMs 30 New Opera partner: Samsung Samsung shipped 118 million phones in 2006; 32 million in 4th quarter Samsung focuses on mid-range and high-end phones Opera complements current and future market strategy Will increase number of modestly priced phones to expand market share Source: Wall Street Journal

31 Gaining traction with Tier One OEMs 31 New Opera partner: HTC HTC is the leading manufacturer of Windows Mobile cell phones and PDAs More than 70% of all Windows Mobile phones are made by HTC Opera complements HTC s strategy to customize product offering for customers in both B2C and B2B markets HTC is becoming an industry powerhouse with an increasingly growing impact on the market. It has developed some of the most notable cutting-edge phones and handheld devices this year. - Tricia Duryee, Seattle Times

32 Business Mini highlights 32 New distribution partners in 4Q: Mobilkom Austria and 4INFO Pannon pre-installs Opera Mini on 10 high-volume handsets Nokia pre-installs Opera Mini on the 6300 mid-range handset We are confident that the Nokia 6300 will be among our best selling models in Kai Oistamo, Nokia

33 Phones with Opera Mini 33 Opera Mini announced models FY2006: 35 Samsung X160* Sony Ericsson K750i* Sony Ericsson Z530i* Sony Ericsson Z610i* Sony Ericsson K610i* Sony Ericsson K310i* Nokia N73* Nokia 6288* Nokia 6233* Nokia 6131* Nokia 6103* Nokia 6080* Nokia 6070* Nokia 2610* Nokia 6233** Sony Ericsson W810i** Nokia 6131** BenQ-Siemens EL71** BenQ-Siemens EF81** Sony Ericsson K608i** Nokia 6280** Motorola RAZR V3i** Motorola RAZR V3 ** Motorola L7** Nokia 6300 Samsung Z400*** BenQ E71** Motorola KRZR K1** Sony Ericsson K510i** Samsung D900** LG K880* Samsung X650* Samsung X510* Samsung E420* Samsung E570* *: Undisclosed European operator **: Only in T-mobile s network ***: Samsung Poland / PTC cont d

34 Gaining traction with Tier One operators 34 Telefónica launches Navega Opera Mini pre-installed on high-volume handsets: Sony Ericsson Z610i Sony Ericsson K800 Sony Ericsson K610i Nokia N70 (with more to come) Revenue model for Opera: License fees based on active users Maintenance & support Server hosting fees

35 Devices highlights 35 Opera for Nintendo Wii released in a public Beta First Opera 9 delivery on an embedded device Sony Electronics, Inc., selected the Opera 9 Software Development Kit (SDK) to power future consumer electronics products Opera on Wii adds a new dimension and functionality to a video game console system. It is a unique Web experience that everyone can use - Reggie Fils-Aime, Nintendo

36 Opera adds to the winning Nintendo Wii experience 36 Opera on Wii makes Internet browsing in the living room more compelling than ever Opera has broken new ground by combining intelligent zoom and navigation using the Wii Remote Merrill Lynch predicts that by 2011, a third of all Japanese households and almost 30 per cent of all US households will own a Wii Sources: Merrill Lynch, NPD Group

37 Operations Update Consumer Segment

38 Desktop highlights 38 Desktop reaches new revenue highs Revenue growth of 100%+ Second consecutive quarter of growth Renewed strategic agreement with Google with improved commercial terms Opera Desktop Revenue (MNOK) Commercialization strategy is working as predicted 2 0 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06

39 Improved traction with premier online brands 39 Opera for T-Online Opera and T-Online create custom version of the Opera browser New road to commercialize browser and expand distribution Direct links to favorite T-Online content Leverages T-Online distribution channels Complements T-Online s other branded offerings

40 Consumer Mini highlights 40 Opera Mini 3.0 released to rave reviews Powers mobile social networking with intuitive new features Cumulative Opera Mini Users and Page Views Millions Millions 6 Total number of cumulative users*: nearly 12 million** Cumulative pages downloaded since launch: nearly 4 billion** 2 0 JAN FEB MAR APR MAY Cumulative users JUN JUL AUG SEP OCT NOV DEC JAN Page views * Number of users who have downloaded and used Opera Mini ** Numbers current as of 22/02

41 Commercial opportunities abound 41 Opera Mini partners with Yahoo! Yahoo! becomes new mobile search provider for Opera Mobile and Opera Mini Yahoo! partnership enhances mobile search revenues and adds possibilities for new mobile services This application is brilliant. If your phone does Internet, then this application should be the first thing you install, period. - Stefan Constantinescu, RingNokia.com

42 Services highlights 42 My Opera community key for consumer growth My.Opera.com popular with more than members today - doubled the number of users since Dec Opera continues to work with its loyal user base to build word of mouth and brand awareness Community-based services represent the key opportunity to create true convergence

43 Thank you for listening