Fourth quarter

Opera - Simply The Best Internet Experience
4Q05 Results
February 20, 2006
Opera - Simply The Best Internet Experience
Profit and loss account – 4Q05
PROFIT AND LOSS ACCOUNT
(Figures in TNOK)
Revenues, PC/Desktop
Fourth Quarter
2004
Full year
2005
2004
2005
9 757
6 396
33 439
25 826
20 078
41 669
65 886
128 128
124
0
87 689
0
Total Operating Revenues
29 959
48 065
187 014
153 954
Payroll and related expenses
23 402
33 292
75 441
112 483
290
594
1 185
2 055
Other operating expenses
7 679
10 340
29 098
38 489
Total operating expenses
31 371
44 226
105 724
153 027
Earnings Before Interest and Tax (“EBIT”)
-1 412
3 839
81 291
927
1 487
1 170
2 653
3 691
75
5 009
83 944
4 618
Taxes
-273
-1 428
-24 930
-1 342
Earnings After Tax (“EAT”)
-198
3 581
59 014
3 276
Earnings per share
0.00
0.03
0.62
0.03
Earnings per share fully diluted
0.00
0.03
0.56
0.03
Revenues, Internet Devices
Other income
Depreciation and amortization
Net financial items
Earnings Before Tax (“EBT”)
Opera - Simply The Best Internet Experience
Highlights – Fourth Quarter 2005
Opera Mini launched globally
6.1 million mobile phones sold with the Opera browser in 4Q05, compared to 3.0
million units in 4Q04
More than 1,400,000 downloads and users since launch
17.0 million phones included the Opera browser in 2005, compare to 8.8 million in 2004
Nine new handsets announced since last quarterly presentation
Motorola ROCKR and A1200
Sharp W-Zero3
Hitachi W41H
Casio W41CA
Nokia 9300i
Sony-Ericsson W950, M600 and W41S
Nintendo to include the Opera browser in the Nintendo DS offering
The Opera browser for Nintendo DS will be sold as a DS card
Opera - Simply The Best Internet Experience
Number of phones sold to end-users
Per year
Per quarter
05
05
4Q
3Q
05
04
04
04
05
2Q
2005
1Q
2004
4Q
2003
3Q
2002
1Q
03
0
04
2 000 000
2Q
4 000 000
03
6 000 000
1Q
8 000 000
4Q
10 000 000
03
12 000 000
03
14 000 000
000
000
000
000
000
000
000
000
000
000
000
000
000
0
3Q
16 000 000
500
000
500
000
500
000
500
000
500
000
500
000
500
2Q
6
6
5
5
4
4
3
3
2
2
1
1
18 000 000
Opera - Simply The Best Internet Experience
Costs related to option program per quarter (NOK)
5 000 000
4 500 000
4 000 000
3 561 085
3 500 000
3 000 000
2 424 034
2 500 000
2 000 000
1 500 000
1 233 052
1 303 899
1 000 000
500 000
444 485
33 476
238 804
-8 068
0
-500 000
Q1
Q2
2004 : MNOK 0.7
Q3
2005 : MNOK 8.5
Q4
Opera - Simply The Best Internet Experience
Growth trend confirmed
Per year*
Per quarter*
50
150
45
125
40
35
100
30
75
25
50
20
15
25
10
0
5
1995 1996
1997 1998
1999
2000 2001
2002 2003
2004 2005
-25
0
-5
-50
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05
-10
Operating income
EBIT
Operating expenses
*: Excluding income and cost related to settlement of MNOK 87.6 in 2Q04
Operating income
EBIT
Operating expenses
Opera - Simply The Best Internet Experience
Balance sheet – 4Q05
BALANCE SHEET
(Figures in TNOK)
31. December
2004
2005
Assets
Deferred taxes
1 055
229
Goodwill
3 143
3 143
Tangible assets
2 338
9 251
33 404
93 347
Cash and cash equivalents
241 275
218 526
Total assets
281 215
324 496
200 846
222 737
Retained earnings
63 058
67 061
Short-term liabilities
17 311
34 698
281 215
324 496
Other current assets
Liabilities & equity
Paid in capital
Total liabilities & equity
Opera - Simply The Best Internet Experience
Financial outlook
Strong revenue growth to continue in 2006
Mobile Phones will be the main value driver in 2006
Investment in additional OS’ and UI’s, will pay off in 2006
Royalty income will keep increasing
Home media market expected to become increasingly
important
Several mass market devices expected launched in 2006
Operating cost expected to continue to grow in 2006, but at
a somewhat lower rate than in 2005
Motorola ROKR E2
Opera - Simply The Best Internet Experience
Mobile Business Unit
Opera - Simply The Best Internet Experience
The goal is to double the number of phones announced in 2006
Motorola A1200
Sharp W-ZERO3
Nokia 9300i
Toshiba W32T
*: Only in Cingular’s network
**: Only in T-mobile’s network
Sony Ericsson P990
Nokia 6630**
Kyocera WX 300K
Kyocera WX 310K
Kyocera AH-K3002V
Nokia N70
Nokia N90
Nokia 7710
T-Mobile SDA II
Casio W21CA
Motorola E895
Nokia 6620*
Motorola E680i
Nokia 9300
Hitachi W32H
Motorola A780
Nokia 6682
Sony Ericsson P910
Nokia 6681
Motorola A1000
Nokia 6680
Sendo X
Nokia 7610
Toshiba W31T
Sony Ericsson W950
Nokia 6600
Nokia 9500
Casio W31CA
Sony Ericsson M600
Sony Ericsson P900
BenQ P30
Casio W21CA II
Hitachi W41H
Sharp Zaurus
Motorola A920
Nokia 7700
ZTE e3
Casio W41CA
Psion Revo
Sharp Zaurus
Kyocera PS 900
Motorola M1000
Sony Ericsson W41S
Nokia 9210
Sony Ericsson P800
Sharp SL-6000
Motorola A1010
Motorola ROCKR
2000-2002
2003
2004
2005
2006
Opera - Simply The Best Internet Experience
Key findings of Opera Mini
More than 1,400,000 unique
users since launch
Page compression of 1015% of actual size
Approx. 200 million
pages downloaded
Opera Mini makes data
ARPU grow significantly
“Norway’s Opera Software……, recently unveiled what’s quickly become recognized as
the best cellphone Web browser yet, known as Opera Mini”
Matthew Maier, CNN.com
“This is a really big breakthrough for the mobile space.”
Michael Gartenberg, Jupiter Research
Opera - Simply The Best Internet Experience
Opera Mini - free version
Opera distributes Opera Mini free of charge to the end
user and distributors
The free version is available in various languages and
content is customized per region / country
Google is the default search engine
Opera defines the content of the start page. This “real
estate” will be commercialized
Sony Ericsson W800
Opera - Simply The Best Internet Experience
Opera Mini – customized version
Opera offers custom builds of Mini
For customers that wish to adapt content to own
mobile strategy
Custom builds are distributed by the customer
Alternatives include customization of;
Bookmarks and links in the fromt page
Start page
Corporate branding
Opera - Simply The Best Internet Experience
What the future will bring…
The future browser will do lot more than just browsing
will let users interact with information in new ways
will run dynamic applications like email clients, games, tickers, etc.
Opera Mobile and Platform are foundations for the next generation of mobile services
enabling easy, fast and cost- effective creation of web based mobile applications
Opera - Simply The Best Internet Experience
Opera widgets will bring applications to multiple devices
Widgets will be Cross platform – cross devices
Opera - Simply The Best Internet Experience
Opera Mini vs. Opera Mobile
Opera Mini can’t run Web applications, but…
Fulfills most people’s browsing needs today – it displays web pages
Manufacturers would like advanced applications on advanced phones
Mini fills a need on those phones that are not able to run advanced applications
With Mini, Mobile and Platform, Opera covers all needs of all customers
Distribution and mass adoption is key
Opera - Simply The Best Internet Experience
PC/Desktop Business Unit
Opera - Simply The Best Internet Experience
Opera Desktop
Average daily downloads doubled to 100,000 after the free version was introduced
40 million downloads in 2005
750 000 unique visitors per day on www.opera.com
600 000 unique visitors per day on www.myopera.com
Key focus;
Getting a larger part of those that download Opera to become regular users
More users necessary to increase revenue
Opera - Simply The Best Internet Experience
Home Media Business Unit
Opera - Simply The Best Internet Experience
Increased number of opportunities in Home Media
Increased interest in including browsers on all kind of devices, such as;
Web pads, TVs, set-top-boxes, gaming, MP3 players, IP screen phones, etc, etc
Browser solution has become a key selection criteria
Opera senses a shift in browser adoption
From small early movers to also include large global players
Opera - Simply The Best Internet Experience
Opera selected for the Nintendo DS
Opera’s first browser for a gaming device announced
Opera available on Nintendo DS
Opera will be sold as a DS card
Users simply insert the DS card, connect to a network, and begin
browsing on two screens
13 million Nintendo DS systems have been sold in 13 months
Opera - Simply The Best Internet Experience
Summary – positioned for growth
Number of Web enabled mobile phones expected to grow significantly
Opera Mini™ expected to escalate growth of Web enabled phones
Large opportunities in the home media segment with more and more
devices utilizing Web technology
Seek to increase desktop revenue